Today's Headlines

Bloomberg:

• Europe Welcomes Greek Vote; Bailout Nears. Germany and the European Commission welcomed Greek approval of the austerity steps demanded for a financial lifeline, suggesting euro finance chiefs will pull Greece back from the brink when they meet in two days. The Greek parliament’s backing “is a crucial step forward toward the adoption of the second program,” EU Economic and Monetary Affairs Commissioner Olli Rehn told reporters in Brussels today. “I’m confident that the other conditions, including for instance the identification of the concrete measures of 325 million euros ($430 million), will be completed by the next meeting” of finance ministers. Euro-area finance chiefs will convene in Brussels on Feb. 15 for their second extraordinary meeting on Greece in a week. Frustrated after two years of missed budget targets, ministers declined to ratify the 130 billion-euro package in a special session on Feb. 9, demanding that Greek officials put their verbal commitments into law. “It’s important for now to complete this program -- and the passage in the Greek parliament yesterday was very important,” German Chancellor Angela Merkel said in Berlin. “The finance ministers will meet again on Wednesday to undertake the work on this, but there can’t and the won’t be any changes to the program.”
• EU Vows to Keep Airline-Emission Levies as China-India Opposition Mounts. The European Union will press ahead with emissions levies for international airlines, putting the bloc on course for a trade spat with countries including China, India and the U.S. “The EU will not suspend the legislation,” Siim Kallas, the European Commission’s vice president for transport, said today in Singapore at an airline conference. “It’s a very high- profile environmental issue.”
• Toronto Condo Bubble Risk Topping New York. A sliver of land wedged between Toronto’s elevated expressway and an off-ramp that pumps traffic into downtown may become the epicenter for a Canadian housing bubble. In four years, this site that’s now used as a parking lot and police impound near the shores of Lake Ontario will be home to Ten York, a 75-story glass building that would be the country’s third-tallest condo tower. Toronto has more skyscrapers and high-rises under construction than any North American city -- almost three times as many as New York -- stoking debate on whether the condominium market in Canada’s largest city is headed for a U.S.-style correction as prices rise and household borrowing hits a record. Canadian lenders including Toronto-Dominion Bank last week raised mortgage rates to cool off the housing market. “Condo construction has always been rather prone to boom and bust cycles, and this one seems particularly strong,” said Sheryl King, an economist with Bank of America Merrill Lynch in Toronto. “Builders seem to overestimate how much demand is going to be out there, and that’s when you tend to see some abrupt pull-back.” Canada’s housing market is about 10 percent overvalued, with inflated prices primarily in Vancouver, Montreal and Toronto, King said in a telephone interview. “We would call it a bubble,” she said.
• Apple(AAPL) Says Fair Labor Association Began Foxconn Inspections. Apple Inc. (AAPL) said the Fair Labor Association started audits of supplier Foxconn Technology Group (FOXCGZ)’s factories in China, the first inspections of a larger effort to respond to criticism of conditions of workers making its gadgets. The iPhone maker, which became the first technology company to join Washington-based FLA in January, said labor-rights inspectors started today at a Shenzhen, China, plant known as Foxconn City, Apple said today in a statement.
• Obama Budget Proves Unique Source for $3 Trillion. President Barack Obama’s budget outlines his ideas for how the government may spend $3.8 trillion in fiscal 2013. There’s no similar document accounting for where taxpayers’ money actually goes. At least three federal sources tally spending, each following its own rules to produce a different total. For the 15 Cabinet-level agencies and Social Security, the White House Office of Management and Budget put expenses at $3.18 trillion in fiscal 2010, the last year for which data are complete. Ask the Census Bureau, and the amount rises by $13.1 billion to $3.19 trillion. USASpending.gov, a website Obama championed as a senator, accounts for $2.23 trillion of spending. (For an interactive graphic, click here.) The nation’s budget has more than doubled in the past decade, pushing the annual deficit to more than $1 trillion and the national debt to $15.2 trillion.
• Pentagon May Oust Troops Involuntarily Under Budget Cuts. The Defense Department may have to force soldiers, Marines or other members of the military out of the services for the first time since the aftermath of the Cold War to achieve the spending reductions in its budget proposal. The Pentagon plans to cut 67,100 soldiers from active and reserve Army units and the Army National Guard in the five years starting Oct. 1, as well as 15,200 from the active and reserve ranks of the Marine Corps.
• Oil Advances as Greek Approval of Austerity Bolsters Economic Optimism. Crude oil for March delivery increased $1.61, or 1.6 percent, to $100.28 a barrel at 1:10 p.m. on the New York Mercantile Exchange. Futures are up 17 percent from a year ago. Brent oil for March settlement rose 65 cents, or 0.6 percent, to $117.96 a barrel on the London-based ICE Futures Europe exchange.
• U.S. Farm Income May Fall on Bigger Crops, Increased Expenses. U.S. farm net income probably will fall 6.5 percent in 2012 from last year’s record as the biggest crop acreage in a generation and rising costs trim profits, the Department of Agriculture said. Income will total $91.7 billion, down from a revised $98.1 billion in 2011 and the second-highest ever, the USDA said today in a report. The value of crops will rise 3.1 percent to $204.9 billion, while revenue from livestock sales will increase 0.6 percent to $165.7 billion, the USDA said. Expenses such as diesel fuel and animal feed will increase 3.7 percent to $235.1 billion, eroding profits.

Wall Street Journal:

• Fed Watchers See Risks in Rate Plan. Many economists believe the Federal Reserve risks making a big mistake if it sticks to its recent guidance about keeping interest rates super low for the next three years. The Fed said last month that it expected to keep short-term interest rates near zero until at least late 2014 to bolster the slow recovery. Among 49 economists who participated in the latest monthly Wall Street Journal survey, the vast majority—33 respondents—said moving to raise rates then would be too late. Just three said it would be too soon, 11 said it would be right on time and two didn't answer.
• 'Co-Co' Debt Finds Favor in Euro Zone. Spanish, Portuguese Governments See Debt as Tool to Aid Lenders, Without Direct Bailouts. A new breed of bank debt that turns into equity if a lender hits trouble is becoming the instrument of choice for some Southern European governments as they prop up their ailing banks. The instruments, known as "contingent convertibles," began to get attention following the financial crisis and have been issued by a few banks. "Co-cos," as they are called, are sold as interest-bearing debt that has to be paid back. But they convert to equity in the event that a bank's capital ratios fall below certain levels.
• DBJ Chief Says Japan Needs Consumption Tax Hike.
  

MarketWatch:

• Regeneron(REGN) Loss Widens But Sales Forecast Raised. Regeneron Pharmaceuticals Inc. REGN +12.87% said sales of its new eye-disease treatment were off to a fast start, causing the company to boost its 2012 sales forecast for the drug by roughly 80%.
• Volcker, Others Clash On Speculative Trading Rule.
• Death Tolls Passes 600 in Europe Cold Snap.
  

CNBC.com:

• Greece Still to Convince Skeptical Euro Zone. Europe gave Greece until Wednesday to convince skeptical international creditors that it would stick to the punishing terms of a multi-billion-euro rescue package, endorsed by parliament as rioters torched downtown Athens.
  
• A Secretive Hedge Fund Legend Prepares to Surface. It’s a humbling time for Louis Moore Bacon. The 55-year-old founder of the $15 billion Moore Capital Management — and one of the premier hedge fund investors of the past two decades — just weathered his second down year in the past four after a particularly ragged run in the markets.

Business Insider:

• The Most Overpriced Housing Markets In The Developed World.
• Check Out The New Tax Hikes In Obama's Budget. Even for people making less than Warren Buffet. The Obama Budget is going to mean tax-increases. Notice how he can't just call them tax and revenue increases, they are "American Values" about "fairness." You see, even budget documents are campaign documents:
• Chinese Authorities Are Removing iPads From Store Shelves.
• Israeli Embassies Attacked in Three Countries, Netanyahu Blames Iran.
  

Zero Hedge:

• Athens - The Morning After: 48 Buildings On Fire, 150 Looted, Hundreds Arrested.
• Samaras Pledges To "Renegotiate" Bailout Pact After April Elections.
• LTRO Stigma Becomes Acute Days Ahead Of Second Operation. (graph)
• European Financials At Worst Levels In Two Weeks. (graphs)
  

New York Times:

• Chinese Official Brushes Aside Calls to Buy European Debt. The head of China’s $410 billion sovereign wealth fund has brushed aside a call by the German chancellor, Angela Merkel, to buy European government debt, saying Monday that such investments were “difficult” for long-term investors. “For European bonds like the government bonds of Italy and Spain, only central banks with certain responsibilities can invest,” he said. But it was more “difficult for long-term investors like us” to make such investments, he said at the annual meeting of China Economists 50 Forum, a club of government officials and economists. Xia Bin, an adviser to the Chinese central bank, echoed Mr. Lou’s harder line on buying European government debt. “We may be poor, but we aren’t stupid,” Mr. Xia said on the sideline of the forum. “We must follow commercial principles in making such investments. That means we want returns.” Mr. Lou, who predicted that Europe would “inevitably” fall into recession, said Mrs. Merkel had asked the sovereign fund to look at French and German government debt.

Forbes:

• Greek Optimism Severely Misplaced: Huge Risk of Political Failure.

MortgageOrb:

• Fitch: Office and Retail CMBS Delinquencies Hit New Highs. Delinquencies for office and retail loans have hit their highest-ever levels while overall U.S. commercial mortgage-backed securities (CMBS) delinquencies fell for the sixth straight month, according to the latest index results from Fitch Ratings. CMBS late-pays declined five basis points (bps) in January to 8.32% from 8.37% a month earlier. The improvement was driven by multifamily loans, which saw a 165-bp plunge in their rate month-over-month to 12.77%. The delinquency rates for office and retail rose to all-time highs of 7.30% and 7.21%, respectively. January marked the first time post-recession that the office delinquency rate surpassed that of retail.

Seeking Alpha:

• 7 Rallying Semi Stocks Hedge Funds Are Buying Up.

TheStreet.com:

• Bank of America(BAC), Citigroup(C) Face Debt Downgrade: Moody's. Moody's Investors Service is expected to announce downgrades to large global banks that play an outsized role in the capital markets, due to "Eurozone weakness and elevated economic and market uncertainties," according to a research report published Monday by CreditSights.

Reuters:

• Copper Falls as Euro Trims Gains, Demand Concerns Weigh.
• Obama Seeks Big Hike Is Dividend Taxes On Wealthy. President Barack Obama's 2013 budget plan calls for significantly hiking taxes on dividends for the wealthy, a change from prior proposals that will raise the ire of dividend-paying companies. Obama's proposal, released on Monday, would raise the taxes investors pay on dividends to the top income tax rate, now at 35 percent, but scheduled to rise to near 40 percent next year. In prior proposals, Obama sought to raise the current 15 percent dividend tax rate to 20 percent for the wealthiest Americans.
• Obama Unveils Big Spending Election-Year Budget. President Barack Obama called on Monday for aggressive spending to boost growth and for higher taxes on the rich, laying out an election-year vision for America in a budget that was criticized sharply by Republicans for failing to curb the deficit.

Telegraph:

• Debt Crisis and Greek Bailout: Live. German leader Angela Merkel states that there won’t be any changes to Greek rescue measures despite riots in the debt-stricken country, as Barack Obama unveils his Budget for 2013.

Der Spiegel:

• European Doubts Growing Over Greece Debt Strategy. 'The Troika's Policies Have Failed'.

Bear Radar

Style Underperformer:

• Mid-Cap Value +.49%

Sector Underperformers:

• 1) Coal -.80% 2) Gold & Silver -.60% 3) Gaming -.33%

Stocks Falling on Unusual Volume:

• ACI, ABC, CLF, VVUS, RAIL, NTGR, DMND, AVAV, ACOM, PANL, GRPN, CVV, FSLR, WYNN, GPRO, BWLD, LUFK, BPL, SRI and OSK
  

Stocks With Unusual Put Option Activity:

• 1) NTAP 2) CLNE 3) WM 4) NKE 5) FOSL
  

Stocks With Most Negative News Mentions:

• 1) ACI 2) FSLR 3) BAC 4) X 5) BRCM
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume
  

Bull Radar

Style Outperformer:

• Small-Cap Value +.89%

Sector Outperformers:

• 1) Biotech +1.89% 2) Homebuilders +1.67% 3) Airlines +1.39%

Stocks Rising on Unusual Volume:

• REGN, THRX, BMA, SAVE, IPGP, LQDT, PCYC, MPEL, WPRT, CLNE, PCLN, DNDN, DBD, CNK, LNG, DAN and RGC
  

Stocks With Unusual Call Option Activity:

• 1) KBR 2) SVNT 3) ARO 4) DTG 5) GSK
  

Stocks With Most Positive News Mentions:

• 1) NVDA 2) AMD 3) TSL 4) DBD 5) NOC
  

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume
  

Monday Watch

Weekend Headlines
Bloomberg:

• Greek Parliament Backs Austerity as Riots Continue. Greek Prime Minister Lucas Papademos won parliamentary approval for austerity measures to secure an international bailout after rioters protesting the measures battled police and set fire to buildings in downtown Athens. A total of 199 lawmakers voted in favor and 74 against, Parliament Speaker Filippos Petsalnikos said in remarks carried live on state-run Vouli TV. When, on Nov. 16, Papademos won a mandate from the Parliament to implement budget measures and secure the bailout of 130 billion euros ($172 billion) he received the support of 255 lawmakers in the 300-strong chamber. “It is up to us, our vote, whether the country will remain in the euro or be led to a disorderly default,” Papademos told parliament. “Voting for the economic program and opening the road for a loan accord sets the basis for the modernization and recovery of the economy.” Passage of the austerity bill puts the spotlight on a meeting of euro-region finance ministers on Feb. 15 that must decide whether to approve the second aid package. Resolution of the negotiations, which started in July, would help contain the threat that speculators will target debt-saddled nations, including Italy and Portugal.
• Roesler Tells ARD Greece Must Deliver or Germany Won't Pay. German Economy Minister Philipp Roesler said the lower house of parliament in Berlin can call off a special meeting on Feb. 27 to approve more aid for Greece if the Greek government and opposition parties fail to live up to their commitments today. The meeting that’s scheduled to approve Germany’s contribution to the second aid package for Greece “only makes sense if Greece has shown before, through legal measures and deeds, that it’s worth it,” Roesler said in an interview on ARD public television. “If that doesn’t happen, there won’t need to be a session.” Asked whether today’s parliamentary meeting in Athens is decisive for future German aid, Roesler said Chancellor Angela Merkel’s government wants to see full support by all Greek parties for the economic adjustment program the government has agreed to.
• Europe Job Losses Accelerating With AstraZeneca-to-PepsiCo Cuts. Global companies from NEC Corp. (6701) to PepsiCo Inc. (PEP) and AstraZeneca Plc (AZN) are chopping jobs more than three times faster than in 2011 as they brace for recession in Europe and a slowdown in China. Announced workforce reductions surged to 94,369 through Feb. 10 from 26,561 a year earlier, according to data compiled by Bloomberg. Employers based in Western Europe accounted for the biggest group of job-cut disclosures, threatening to add to unemployment in the euro area already running at a 13-year high. Such firings are now running at the quickest pace to start a year since a 2009 peak, when the European and U.S. economies shrank amid the deepest slump since World War II. Now, Europe’s debt crises may help spur a 0.5 percent contraction in the euro- area economy in 2012, based on economists’ estimates.
• Soros: Greek Bailout Won't Rid Europe of Danger. Billionaire investor George Soros predicted weak growth and lingering political tension that could shatter Europe’s economic union even if Greece agrees to austerity measures. “Right now the European Union and particularly the heavily indebted countries face a lost decade,” Soros said. “It might actually be longer than a decade because Japan that had a similar situation with the real estate boom and the banking crisis has had now 25 years of no growth,” Soros said. “That will create tensions within the European Union, which could destroy the European Union,” he said. “And that’s a real danger.” A package of budget, wage and pension cuts that Greece’s parliment could adopt as soon as tomorrow is “not necessarily going to work in the long run,” Soros said. “Greece is a sick situation” that has been “mishandled” by European authorities and “will continue to be an irritant and a problem for Europe,” Soros said. The European Union, once a desirable objective, has become “more of an imposition,” he said. In the U.S., the economy “shows some signs of revival,” thanks in part to the emergence of shale gas and oil and years of low-wage growth, which have lowered manufacturing costs, Soros said.
• Norway Faces Severe Credit Shock as Household Debt Swells, FSA Chief Warns. Norway faces “severe” imbalances in its credit and property markets as households continue to amass debt at unsustainable levels, according to the head of the country’s financial regulator. “Growth rates on household debt and house prices are not following a sustainable path,” Morten Baltzersen, Director General of the Financial Supervisory Authority in Oslo, said in an interview. “The longer these developments go on, the greater the risk is of a severe imbalance evolving.”
• China's Wuhu Halts Property Easing as Wen Pledges Curbs. China’s eastern city of Wuhu suspended a decision to ease property curbs three days after its announcement, in a move that underscores the nation’s determination to cool prices. The mid-sized city in Anhui province will temporarily suspend its home subsidy policy so it can study details on how to implement the rules, according to a statement on the local authority’s website yesterday. Wuhu will waive a deed tax and subsidize some home purchases, it said Feb. 9, becoming the first Chinese city this year to signal its intention to ease property curbs. China won’t waver on its real-estate controls, which aim to bring home prices down to a reasonable level, to ensure fairness and stability, Premier Wen Jiabao said during a meeting with business executives last week, Xinhua News Agency reported yesterday. Wuhu followed in the footsteps of the southern Chinese city of Foshan, which in October shelved plans to ease limits on home purchases one day after its announcement. “We at Credit Suisse recommend selling China property sector now,” Jinsong Du, the bank’s Hong Kong-based analyst, wrote in an e-mailed note. “The Wuhu reversal clearly shows that the stock market has severely underestimated the central government’s political will to cool the housing market significantly further.”
• Japan Economy Shrinks on Export Slump. Japan’s economy shrank an annualized 2.3 percent in the fourth quarter, more than economists estimated, as slumping exports undermine a recovery from last year’s record earthquake. The contraction compared with the median forecast for a 1.3 percent decline in a Bloomberg News survey of 26 economists.
• Hong Kong Economy May Contract on Exports. Hong Kong's economy may shrink this quarter if exports fail to improve amid faltering global growth, Financial Secretary John Tsang said. "I see a difficult year ahead for the global economy," Tsang said in a transcript of a radio broadcast, posted on a government website. "We may even see negative growth in the first quarter of this year if exports fail to pick up."
  
• Lew Says Infrastructure Spending Still Needed to Aid Economy. White House Chief of Staff Jack Lew said hundreds of billions of dollars in spending for roads and bridges, education and manufacturing are necessary to keep the U.S. economy growing. Election-year sparring over the budget begins tomorrow as President Barack Obama submits the fourth spending blueprint of his presidency, a multitrillion-dollar package that calls for $350 billion in short-term spending to create jobs and a $476 billion, six-year highway bill, while saying it will cut $4 trillion from the deficit over a decade, partly by raising taxes on the wealthy. Tomorrow’s budget proposal is loaded with “massive taxes” on small business and families, requires “bureaucratic rationing” of Medicare and Medicaid, and “hollows out” spending for defense and national security, Republican Representative Paul Ryan, chairman of the House Budget Committee, said on ABC‘s “This Week.” Ryan said he is planning an alternative budget that would drive down deficits through an overhaul of Medicare without calling for any tax increases that may slow the economy.
• GM(GM) Profits, But Taxpayers Are Still on Hook: Shikha Dalmia. Three years after being rescued by a taxpayer bailout, General Motors (GM) last week announced some rather ambitious profit targets for 2012. But even if it meets these targets -- a big if -- taxpayers should not wait on one foot to recover their remaining “investment” in the company.
• Speculators Lift Wagers to Highest Since September: Commodities. Hedge funds increased bets on rising commodity prices to the highest since September on mounting confidence that growth in the U.S. will strengthen demand. Money managers boosted their combined net-long positions across 18 U.S. futures and options by 13 percent to 929,199 contracts in the week ended Feb. 7, Commodity Futures Trading Commission data show. That’s the highest since Sept. 20. Bullish wagers on copper rose to a six-month high, and soybean holdings jumped by the most this year.
• Syrian Forces Press Assault as Violence Spills Into Lebanon. Syrian forces pressed their efforts to stamp out dissent against the rule of President Bashar al- Assad in the central city of Homs as violence spilled over into neighboring Lebanon. Syrian soldiers killed 10 people today in Homs, including five in the Baba Amr neighborhood, Al Arabiya television reported, citing the Syrian Revolution General Commission. In the Lebanese city of Tripoli, two people were killed yesterday in clashes between supporters of Assad and his opponents, it reported, without saying where it got the information. Nineteen people were injured, it said. Syrian forces have intensified efforts to crush the 11- month uprising against Assad since Russia and China vetoed a United Nations Security Council resolution on Feb. 4. The resolution had aimed to facilitate a political solution to a conflict that according to UN estimates has killed more than 5,400 people since starting in mid-March.

Wall Street Journal:

• SEC Launches Inquiry Aimed at Private Equity. Federal regulators have launched a wide-ranging inquiry into the private-equity industry that examines how firms value their investments, among other matters. The Securities and Exchange Commission's enforcement division sent letters to private-equity firms of various sizes in early December as part of an "informal inquiry," according to the letter and people familiar with the matter. It is unclear which firms received a letter, which includes language saying it shouldn't be construed as an indication the agency suspects securities-law violations.
• Volcker to Push Back on Banks' Trading. Paul Volcker is about to fire back at critics of the proposed rule that bears his name. The former Federal Reserve chairman is expected to file a comment letter on the Volcker rule before a Monday deadline, contending that the U.S. financial system will be safer and healthier with a ban on proprietary trading by banks, according to people familiar with the situation. Mr. Volcker also is likely to resist recent attacks on the Volcker rule from money managers, financial firms and foreign governments, including claims that banning banks from trading with their own money could reduce liquidity.
• Catholic Bishops Oppose Compromise on Birth-Control Insurance. Catholic bishops said Friday night that they would not support the Obama administration's proposed compromise on a controversial rule that requires most employers to fully cover contraception in their workers' health plans. The U.S. Conference of Catholic Bishops, which had led opposition to the regulation, issued a statement saying that they didn't believe their concerns were addressed by a new policy offered by President Barack Obama on Friday morning to allow religious employers who object to the use of birth control to turn over responsibility for covering it to insurance companies.
• China's Banks Face New Fee Regulations. China's banking regulator has drafted rules to stop banks from charging their customers excessive fees, which have become a focus of rising frustration in a country where customer service is seldom a priority. The new rules, issued Friday evening by the China Banking Regulatory Commission, said all fees must be set by banks' head offices and not local branches, that banks must be more transparent when setting prices, and that they must give three months' notice before raising fees.
• Spanish Unions to Protest New Labor Decree. Spain's biggest unions called for mass protests across the country on Feb. 19 in response to labor-market changes the government announced this past Friday to lower the country's towering unemployment rate and spur economic growth. "We want to raise a clamor in the streets of Spain against the labor-market reforms," said Ignacio Fernández Toxo, the head of Spain's largest union, in a news conference Saturday, although he stopped short of calling for a general strike.
• U.S. Is Asked to Review Bankruptcy Bonuses. The top Republican on the Senate Judiciary Committee asked Attorney General Eric Holder to examine the Justice Department's efforts to enforce a law limiting executive pay in certain bankruptcy cases. Sen. Charles Grassley, the Iowa Republican who introduced broad bankruptcy legislation that became law in 2005, expressed concern that companies might be skirting the law when issuing bonuses and other compensation to executives during Chapter 11 bankruptcy proceedings.
• Private Equity Drills Into Oil Patch. Wall Street thinks it has tapped a new gusher. Searching for growth in a tepid economy, private-equity firms are zeroing in on the U.S. oil patch. Deal makers are excited because advances in drilling techniques such as horizontal drilling and hydraulic fracturing, or fracking, have made it easier to extract oil and natural gas from shale and other rock formations, creating an opening for private-equity firms to place big bets in a capital-hungry business. Some early investors already have extracted billions of dollars of profits.
• Texans Are Baffled by the Keystone Decision. China will get the oil from Canada that could have come to the U.S.

Marketwatch.com:

• China's Central Bank Wary Of Easing Policy: Report. The People's Bank of China may be more cautious to loosen its monetary policy amid complexity in China's economy in the start of the year, the state-run China Securities News said in a front-page editorial. The weaker-than-expected new yuan loans data for January highlighted the central bank's efforts to curb credit expansion, the newspaper said. Chinese financial institutions extended CNY738.1 billion of new yuan loans in January, below expectations for CNY1 trillion in a survey of 16 economists polled by Dow Jones Newswires. The central bank is likely to keep the country's interest rates on hold in the near term, the newspaper said, adding whether there is a cut in banks' reserve requirement ratio will be determined by February economic data.

Business Insider:

• Incredible Pictures From Athens On Sunday Night.
• Iran Says Be Ready For Its 'Big New' Nuclear Achievements.
  

Zero Hedge:

• Charting The Federal Reserve's Assets - 1915-2012.
• Athens Burning As Police Run Out of Tear Gas. (video)
• Summary Of Key Events In The Coming Week.
• For Greece, Bailout Two Is Just The Beginning.
• This Time Next US Presidential Campaign: $24.1 Trillion In Debt, 138.9% Debt/GDP.
• The Cost Of The Combined Greek Bailout Just Rose to €320 Billion In Secured Debt, Or 136% Of Greek GDP.

CNBC:

• U.S. Gasoline Price Rises to $351/gallon: survey.
• Low-Interest Loans to European Banks Prompt Concern. Few would begrudge Mario Draghi his boast last week that he and the European Central Bank had prevented a disastrous credit crunch by showering banks with cheap loans in December. But beneath the gratitude toward Mr. Draghi, the president of the E.C.B., lurks a fear that the easy money could simply be creating the conditions for another banking crisis several years from now. Thanks to E.C.B. largess, some economists warn, sick banks now face less pressure to confront their problems — to clean out bad loans and other damaged assets, or even wind down operations if there is no hope of a turnaround. The E.C.B., they say, could inadvertently spawn a cohort of “zombie banks” like the ones that helped make the 1990s a lost decade for Japan. “It’s a huge bet,” said Charles Wyplosz, a professor of economics at the Graduate Institute in Geneva. “If the crisis ends up well, the E.C.B. will have pulled off a miracle. If things go wrong, then commercial banks will be in a much worse situation than they were before.”
• Apple(AAPL) Launches New Legal Attack on Samsung Phones. Apple has asked a federal court in California to block Samsung Electronics from selling its new Galaxy Nexus smartphones, alleging patent violations.
• Pop Queen Whitney Houston Dies on Eve of Grammys.
  

IBD:

• Cadence(CDNS) Profits From Industry Shift To Smaller Chips

The Hill:

• Obama's 2013 Budget: 10 Takeaways. President Obama’s 2013 budget will be released publicly on Monday at 11:15 a.m., but senior administration officials gave a preview of what the president will ask for. Here’s a guide to what the White House wants spending and taxes to look like in the next fiscal year. 2. What are the economic assumptions for this year and this decade? Steve Bell of the Bipartisan Policy Center points out that mid-decade figures will be key to scrutinize. In last year’s budget, the Obama administration forecast real gross domestic product to rise to 4.4 percent by 2013. CBO last month predicted 1.1 percent growth in 2013. Higher growth helps Obama’s budget meet its deficit reduction targets since growth raises revenue and lowers safety net spending.

USA Today:

• New Rule Puts A Wrinkle In Figuring Taxes On Stock Sales. For the first time, the annual tax forms investors receive, called the 1099-B, from their brokers will contain dramatic changes. Beginning with the just-completed 2011 tax year, it's up to brokers to track how much investors paid for stocks that were sold and report that information directly to the IRS. This so-called cost basis is what determines how much tax investors pay.

Reuters:

• Al Qaeda Leader Backs Syrian Revolt Against Assad. Al Qaeda leader Ayman al-Zawahri, in a video recording posted on the Internet on Sunday, urged Syrians not to rely on the West or Arab governments in their uprising to topple President Bashar al-Assad. In the eight-minute video, entitled "Onwards, Lions of Syria" and posted on an Islamist website, the Egyptian-born Zawahri also urged Muslims in Turkey, Iraq, Lebanon and Jordan to come to the aid of Syrian rebels confronting Assad's forces. "Wounded Syria still bleeds day after day, while the butcher, son of the butcher Bashar bin Hafiz (Hafez al-Assad), is not deterred to stop," Zawahri, wearing his white turban and seated against a green curtain, said. "But the resistance of our people in Syria despite all the pain, sacrifice and bloodshed escalates and grows," he added. Zawahri took command of al Qaeda after Osama bin Laden was killed by U.S. special forces in a raid in Pakistan last May. A Muslim should help "his brothers in Syria with all that he can, with his life, money, opinion, as well as information," Zawahri says.
• China Tells Banks to Roll Over Local Government Loans: FT. China has instructed its banks to embark on a huge roll-over of loans to local governments, the Financial Times reported, aiming to give itself more time to deal with a debt hangover from the global financial crisis. China encouraged banks to lend to local governments for new projects during the financial crisis to buoy the economy, but its provinces and cities now face $1.7 trillion in debts. More than half those loans were scheduled to come due over the next three years, the newspaper said. Banks had started extending maturities for local governments to avoid a wave of defaults, the paper said, citing bankers and analysts familiar with the matter. One person briefed on the plan said in some cases the maturities would be extended by as much as four years, it said.
• Greek Parties Expel Rebel Deputies After Austerity Vote. The two Greek parties supporting the government of technocrat Prime Minister Lucas Papademos expelled more than 40 deputies on Monday for failing to back an austerity bill needed to avoid the country's chaotic default. The conservative New Democracy party said it had expelled 21 out of its total 83 deputies. The Socialist PASOK party expelled about 20 of its 153 lawmakers.

Financial Times:

• UK-based investment banks may lower bonuses next year by about 25% from the $6.6 billion expected to be paid in 2012, down by close to 40% from the previous year. The reasons bonus pots are shrinking are "job cuts and a worsening financial performance," rather than a change in bonus culture, citing the Center for Economics and Business Research economist Rob Harbron.

The Telegraph:

• Slump in Shipping Freight Sparks Fears for World Trade. Fears are rising for the state of the shipping industry after it emerged operators are now paying clients to use their ships.
• Germany's Carthaginian Terms for Greece. The last time Germany needed a bail-out from world creditors, it secured better terms than shattered Greece last week.

Bild am Sonntag:

• Greece should exit the euro region voluntarily if its government fails to implement the policy changes it promised in return for financial aid, Alexander Dobrindt, general-secretary of Germany's Christian Social Union, said. Officials should try to convince the Greek government that an orderly exit from the euro is better than the threat of an "uncontrolled collapse," Dobrindt said.

La Libre Belgique:

• European Central Bank Governing Council member Yves Mersch said the introduction of joint euro bonds would require a transfer of sovereign powers and legitimate democratic control of the common-currency region by the European Parliament, citing an interview. If jointly issued euro bonds would involve a transfer only from competitive nations with prudent budget policies to weaker countries, it could lead to a disastrous situation of moral hazard, Mersch said.
  

Kyodo News:

• Temperatures in one of the damaged reactors at Tokyo Electric Power Co.'s Fukushima nuclear station are still rising, citing the company. The temperature at the bottom of the No. 2 reactor rose to 172.9 degrees Fahrenheit at 10 am, the highest level since a so-called cold shutdown of the unit was achieved in December. The unit hasn't gone critical yet, citing the company.
  

China Daily:

• Advisers to the government of Hainan, China's southernmost province, propose imposing a tax on vacant homes to discourage property speculation.

Weekend Recommendations

Barron's:

• Made positive comments on (DAN), (INT), (ORLY) and (HNT).
• Made negative comments on (CZR).
  

Night Trading

• Asian indices are -.25% to +.75% on average.
• Asia Ex-Japan Investment Grade CDS Index 165.0 +6.0 basis points.
• Asia Pacific Sovereign CDS Index 138.50 +3.5 basis points.
• FTSE-100 futures +.58%.
  
• S&P 500 futures +.52%.
• NASDAQ 100 futures +.52%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (DBD)/.84
• (REGN)/-.60
• (ALEX)/.22
• (RAX)/.15
• (HMA)/.21
• (MAS)/-.01

Economic Releases

• None of note

Upcoming Splits

• (MNST) 2-for-1
  

Other Potential Market Movers

• The Germany bond auction and the Sterne Agee Financial Institutions Conference could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the week.

Weekly Outlook

U.S. Week Ahead by MarketWatch (video).
Wall St. Week Ahead by Reuters.
Stocks to Watch Monday by MarketWatch.
Weekly Economic Calendar by Briefing.com.

BOTTOM LINE: I expect US stocks to finish the week mixed as rising global growth fears, profit-taking and Eurozone debt angst offsets falling energy prices, better US economic data and short-covering. My intermediate-term trading indicators are giving neutral signals and the Portfolio is 50% net long heading into the week.

Market Week in Review

S&P 500 1,342.64 -.17%*



The Weekly Wrap by Briefing.com.

*5-Day Change