Today's Headlines

Bloomberg:

• EU Says Greek Bond Swap in Aid Plan Requires Time For Investor Decisions. Greek investors will need time to review settlement details and make decisions as a debt swap takes shape along with a second rescue package for the country, the European Union said. Euro-area finance ministers need to agree on all elements of the bailout plan and the conditions Greece must meet to receive the bailout, Amadeu Altafaj, spokesman for EU Economic and Monetary Affairs Commissioner Olli Rehn, told reporters today in Brussels. When asked whether the debt swap would be technically able to proceed ahead of a broader deal, he responded that “decisions are first and foremost political.” Even though a framework and many of the details have been agreed upon, the bond exchange has stalled because of broader clashes between the EU and Greek authorities. EU officials have said Greece needs to show more commitment to promised reforms in order to receive the 130 billion-euro ($170 billion) aid package that was broadly endorsed in October. Finance ministers are discussing Greece on a conference call today, scheduled in place of a previously planned emergency meeting in Brussels. Institute of International Finance officials, who have been representing creditors in the negotiations and who had planned to be on the sidelines of the Brussels meeting, postponed their travels once the in-person meeting was canceled. The finance ministers have a regularly scheduled meeting in Brussels next week. Altafaj said today that there is an “urgency of proceeding smoothly” with all elements of the rescue package, including private-sector involvement.
• Italian Economy Slips Into Recession, Contracts .7%. The Italian economy entered its fourth recession since 2001, contracting more than economists forecast in the fourth quarter as government austerity measures weighed on growth. Gross domestic product declined 0.7 percent from the previous three months, when it shrank 0.2 percent, national statistics institute Istat said in a preliminary report in Rome today. The contraction was more than the median forecast of a 0.6 percent decline by 22 economists surveyed by Bloomberg News.
• Italian Government Debt Rises to $2.5 Trillion With Euro Bailout Costs. Italian government debt rose 4 percent in 2011 to 1.897 trillion euros ($2.5 trillion) on funding for European bailouts and a weaker euro that increased the cost of servicing foreign-denominated debt, the Bank of Italy said in a report today. The government contributed 9.2 billion euros to euro-region bailouts in 2011, about three times the amount of the previous year, the central bank said, after Greece, Ireland and Portugal needed rescues to avoid default. The decline in the euro added 200 million euros in debt financing costs, the report said.
• Sovereign Default Risk Surges in Europe on Greek Bailout Delay. The cost of insuring European sovereign debt rose for a sixth day on concern delays to Greece’s bailout are increasing the chance of default. The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 governments climbed 12 basis points to a four-week high of 344 at 3:30 p.m. in London. Officials are considering postponing a full aid package until Greek elections in April, according to the Wall Street Journal, after finance ministers canceled a meeting today because they are unconvinced the nation will stick to austerity pledges. Greece needs the 130 billion-euro ($171 billion) deal, along with about 100 billion euros of debt relief from private bondholders, to avoid an economic collapse next month. “I can’t see them giving the money,” said Peter Tchir, founder of TF Market Advisors in New York. “Timing is getting tight.” Antonis Samaras, the leader of Greece’s second-biggest political party, sought to reassure European officials by providing a signed pledge to maintain the “objectives, targets and key policies” of the austerity program. He left open the possibility of “modifications” to Greek policies to promote growth. “It can’t be easy signing off on lending further cash when you don’t really believe that you are going to get it back,” Gary Jenkins, the director of independent credit firm Swordfish Research in London, wrote in a note to investors. The cost of insuring corporate and financial debt also rose, according to JPMorgan Chase & Co. Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings increased 24 basis points to 624. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings rose 5.5 basis points to 143.5 basis points. The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers increased four basis points to 237 and the subordinated index rose 15.5 to 405.5.
• Paulson Says Euro Will Probably Unravel. Paulson & Co., the $23 billion hedge fund run by John Paulson, said the euro is “structurally flawed” and will eventually fall apart, according to a letter the firm sent to its investors. The collapse could be triggered by a Greek default, which would throw the world into recession and financial disorder, the New York-based firm said in the letter, a copy of which was obtained by Bloomberg News. “We believe a Greek payment default could be a greater shock to the system than Lehman’s failure, immediately causing global economies to contract and markets to decline,” the firm said. He sold his entire stakes in Citigroup Inc. and Bank of America Corp. last quarter before the shares started rallying this year. The holdings, which he began aggressively building in 2009, were among his largest last year. “While we have seen a reasonable recovery in the U.S. with leading indicators in early 2012 trending positive and equity valuations well below historical norms, the European sovereign debt crisis remains the overriding risk in the markets,” according to the letter. The hedge fund said it cut its so-called net exposure in one of its Advantage funds, among the firm’s largest, to 32 percent as of Jan. 31 from 82 percent at the start of last year. Paulson said it reduced net exposure because “we believe such a default could lead to a European banking crisis on par or worse than the world suffered in 2008 when Lehman Brothers failed.”
• Obama Looks to Hollywood to Raise Millions for Re-Election Bid. Over the next three days Obama is seeking to raise more than $8 million for his re-election, the bulk of it coming from six fundraisers in Los Angeles, San Francisco and Corona Del Mar, California, including one event co-hosted by comedian Will Ferrell. He also plans to raise money in Washington state. Californians have given more to the president’s campaign than donors from any other state, according to the Center for Responsive Politics, a Washington-based group that tracks political money.
• Deere(DE) Declines After Lowering Its Annual Forecast for U.S. Farmer Revenue. Deere & Co., the largest maker of agricultural equipment, fell the most in three months after lowering its forecast for U.S. farmer revenue, an indicator of demand for its signature green-and-yellow machines. Deere dropped 3.3 percent to $86.09 at 12:47 p.m. in New York. The shares earlier tumbled 3.8 percent, the biggest intraday decline since Nov. 9.
• Iran Says It Loaded Locally Made Fuel Into Nuclear Reactor. Iran loaded locally built fuel plates into its nuclear research reactor in Tehran, state-run Press TV reported today, showing images of President Mahmoud Ahmadinejad inside the facility. Only a handful of countries, including France and the U.S., have the technology to build the 20-percent enriched fuel plates needed for the reactor, according to Iranian officials. Ahmadinejad described the step as a “major” nuclear feat.

Wall Street Journal:

• U.S. Steps Up Watch of Syria Chemical Weapons. The U.S. and some Mideast allies are intensifying surveillance of Syria's chemical and biological depots amid fears that the weapons could go loose if unrest escalates out of control. The U.S. is using satellites and other surveillance equipment to monitor suspected chemical and biological weapons storage sites in Syria, military officials said, reflecting Washington's concerns about a growing proliferation threat.
• Some Creditors Consider Delaying Full Greek Bailout. Some of Greece's euro-zone creditors are considering whether to delay a full bailout package for Greece until after the country's April elections, and they are floating the idea of issuing special bridge loans to cover the €14.4 billion ($18.91 billion) in bond redemptions coming due next month, according to several officials familiar with the situation. These officials emphasized that the thinking isn't broadly anchored among Greece's 16 euro-zone partners and currently isn't even in the proposal stage. The suggestion is coming from some of Greece's sovereign creditors holding triple-A credit ratings.
• Goldman(GS) Analyst Under Investigation Was Known For Apple(AAPL) Supplier Calls. In Taiwan, Henry King, the Goldman Sachs analyst under investigation in the U.S. government’s broad insider-trading probe, was highly regarded and his calls were widely followed.
  

CNBC.com:

• Fed Members Still Divided On Need For More Easing: Minutes. The Federal Reserve appears open to the idea of a third round of bond purchases to boost a still-modest recovery. But members remain divided over when or whether to take that step.
• Mortgaage Apps Down as Purchase Demand Falls. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, dipped 1.0 percent in the week ended Feb 10. The gauge of loan requests for home purchases tumbled 8.4 percent, though the index refinancing applications edged up 0.8 percent.
• Key Manufacturing Gauge Shows Sharp Gain. The Empire State Manufacturing Survey produced a January reading of 19.5, well above analyst expectations for a 15 and indicative that business conditions improved significantly. January's reading was 13.48. It was the highest level since June 2010.
• US Industrial Production Unexpectedly Flat in January. U.S. industrial output was unexpectedly flat in January as steep declines in mining and utilities offset gains in manufacturing, a Federal Reserve report showed on Wednesday.

Business Insider:

• A Nightmare Tale of Foreclosure Squatters Destroying A Neighborhood.
• These 3 Charts on Government Jobs Should Make You Furious.
• Check Out The List Of Financial Heavy Hitters That Will Attend A $35,800 A Plate Obama Fundraising Dinner In NYC.
• Young Adults In America Are Angry For Good Reason. (graph)
  

Zero Hedge:

• Farage On Greek Chaos: "You Ain't Seen Nothing Yet". (video)
• The Hidden Taxes In Obama's Budget.
• Li(e)borgate Set to Become "Next Big Litigation Thing" As Lawsuits Against Libor Banks Avalanche.
  

Washington Post:

• Egypt's Muslim Brotherhood Rejects US Pressure Over Funding Of Pro-Democracy Groups. Egypt’s Muslim Brotherhood is throwing its weight behind the country’s military-backed government in an escalating dispute with the U.S. over pro-democracy groups Egypt accuses of seeking to foment protests against the country’s military rulers. The group praised in a statement Wednesday what it called the government’s “nationalist” position on the conflict over the role of the groups in Egypt’s politics.

SlashGear:

• iPad 2 Yanked From Amazon China(at Apple's(AAPL) request).

Reuters:

• Oliver Stone's Son Converts to Islam While In Iran. Sean Stone, the son of Oscar-winning director Oliver Stone and a defender of Iranian President Mahmoud Ahmadinejad, converted to Islam on Tuesday while filming a documentary in Iran, he told Agence France Presse. "The conversion to Islam is not abandoning Christianity or Judaism, which I was born with. It means I have accepted Mohammad and other prophets," Stone, whose famous father is Jewish and mother is Christian, told AFP. He underwent the ceremony in the city of Isfahan. The 27-year-old did not say why he converted. Iran's Fars news agency said he had become a Shiite and taken the Muslim first name Ali. In an interview with TheWrap at the Toronto Film Festival in September, he supported Iran's right to a nuclear program as a defense against threats from Israel.
• Iron Ore - Shanghai Steel Falls For 5th Day, Ore at 6-Week Low.
  

USA Today:

• Obama Wants Electric-Car Subsidies To Go To Automakers. We told you earlier about how the Obama administration is proposing to increase subsidies for electric cars, but it turns out that the breaks to go to automakers, not directly to consumers. Whether makers want to pass through the subsidies is their business.

Financial Times:

• Bank Crisis Looms as Europe's Debt Woes Deepen. The eurozone debt crisis has expressed itself in bond market “spreads” – yield differentials of different countries’ ten-year government bonds vis-à-vis Germany’s Bunds. The logic behind this is that even if a stricken country’s debt problem lies in the private sector – as it does most spectacularly in Ireland and Portugal – the problem will show up as a banking crisis, requiring a government bail-out. So the government’s credit is the ultimate loser.

Bild-Zeitung:

• German banks and insurers have started including euro exit clauses in international financing contracts. The clause specifies that the transaction must take place in euros or the currency that is valid in Germany at the time.

Hamburger Abendblatt:

• Frank Schaeffler, a lawmaker for the German Free Democratic Party, said he will not agree to a rescue package for Greece for the time being, citing an interview with the politician. The timeframe for approving the rescue in the German parliament is "questionable" and lawmakers should not be called on to decide the matter on short notice, he said.
  

Xinhua:

• China's southern region of Guangxi raised the minimum wage by about 22%, citing local officials.
• China's railway fixed-asset investment fell almost 70% in January to $1.95 billion, citing statistics from the Ministry of Railways. Capital construction investment fell 76% to 8.73 billion yuan. Investment fell to less than the market had expected, even given the two holiday breaks last month.
  

Shanghai Daily:

• Shanghai CPI Gains 4.9% to Beat National Figure. SHANGHAI'S Consumer Price Index rose 4.9 percent in January from a year earlier, higher than the national 4.5 percent growth, according to the Shanghai Statistics Bureau on Tuesday. Five out of the eight consumption expenditure categories covered by the CPI posted a price increase, the bureau said. The sub-indices for food jumped 11.5 percent, housing rose 5.2 percent and apparel up 4.8 percent. The prices of alcohol and cigarettes rose 1.2 percent while those of home appliance and maintenance services added percent.
• Beijing's Office Costs Surge 38%. BEIJING posted the biggest increase in occupancy costs last year among global locations as landlords raised rents aggressively amid limited supply, according to a latest industry report released yesterday by a global real estate services provider. The average occupancy costs per workstation per annum in Beijing's CBD area rose 38 percent to US$8,830 in 2011, propelling the city to jump from 73rd to 35th in ranking, according to an annual Global Occupancy Costs - Office report by DTZ, which is now part of UGL Services, a division of UGL Ltd. The global ranking of Shanghai, particularly Jing'an District, rose to 37th in 2011 from 49th a year earlier. In the Asia-Pacific, Beijing and Shanghai were ranked the top 10 most expensive locations in 2011, with Beijing in ninth spot and Shanghai at No. 10. In 2010, Beijing was at 17th, and Shanghai at ninth. Globally, Hong Kong remains the world's most costly office location with occupancy costs per annum per workstation at US$25,160, ahead of London's West End and Geneva.
  

Bear Radar

Style Underperformer:

• Large-Cap Value -.52%

Sector Underperformers:

• 1) Steel -1.90% 2) Road & Rail -1.83% 3) Oil Tankers -1.51%

Stocks Falling on Unusual Volume:

• LAD, AZN, SAH, NOR, CLF, GSK, NAV, AAWW, QSFT, GEOY, TNGO, PEET, NICE, EBIX, FOSL, PLCE, SNCR, USTR, ABAX, WERN, SYNT, ITRI, INCY, CMCO, CVV, NILE, LOGM, SDT, PAG, DE, PMT, GEO, EBIX, FTI, OC, QSFT, CW, INVN, ZNGA and DGI
  

Stocks With Unusual Put Option Activity:

• 1) HUN 2) MU 3) VFC 4) CMA 5) TEX
  

Stocks With Most Negative News Mentions:

• 1) FOSL 2) ZNGA 3) ORCL 4) GEOY 5) DELL
  

Charts:

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

Bull Radar

Style Outperformer:

• Large-Cap Growth +.69%

Sector Outperformers:

• 1) HMOs +2.13% 2) Homebuilders +1.69% 3) Networking +1.25%

Stocks Rising on Unusual Volume:

• CMCSK, CREE, TM, AIXG, HES, ANLY, CSOD, MASI, DF, XEC, ANF, K, WCG, JNPR, PNK, CRK, AEO and HIG
  

Stocks With Unusual Call Option Activity:

• 1) K 2) WTW 3) ACAS 4) ANF 5) PXD
  

Stocks With Most Positive News Mentions:

• 1) PPG 2) DTV 3) T 4) AVAV 5) DE
  

Charts:

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

Wednesday Watch

Evening Headlines
Bloomberg:

• Greece Struggles to Win Aid Package. European officials ratcheted up the pressure on the Greek government to deliver budget cuts in exchange for a second bailout as they insisted that default is not an option. Finance ministers canceled a Brussels meeting slated for today and will hold a teleconference instead to prod Greece to do more to clinch an aid package worth 130 billion euros ($170 billion) along with about 100 billion euros of debt relief from private bondholders. Greece needs the aid to make a 14.5 billion-euro bond payment on March 20. “The risk of a disorderly default has risen,” Thomas Costerg, a London-based economist at Standard Chartered Bank, said yesterday in an e-mail. “The timetable is already over- stretched to cover the March redemption and gives no room for maneuver or additional delay. The question remains whether we have reached the point of no return for Greece. I don’t think it’s the case yet, but we’re dangerously close to it.” Two years after pledging to pull Greece back from the brink, European leaders are torn between pouring more aid into the struggling economy or risking an unprecedented national bankruptcy that might force the country out of the euro and prompt renewed market tumult. “The decision was the result of an evaluation by the head of the eurogroup, Jean-Claude Juncker, that there weren’t sufficient elements of consensus to be sure that a meeting would be successful,” Italian Prime Minister Mario Monti said late yesterday on Sky Italy Television.
  
• Europe's Economy Probably Shrank for First Time Since 2009 on Debt Turmoil. Europe’s economy probably shrank in the fourth quarter for the first time in 2 1/2 years as the region’s debt crisis undermined confidence and prompted governments to toughen austerity measures, economists said. Gross domestic product in the 17-nation euro area fell 0.4 percent from the previous three months, the median forecast of 42 economists in a Bloomberg News survey showed. That would be the biggest drop since the first quarter of 2009, when the economy was in a recession. The European Union’s statistics office in Luxembourg will release the data at 11 a.m. Europe is facing its second recession in less than three years and Moody’s Investors Service cut the ratings of six of the region’s countries on Feb. 13, saying policy makers haven’t done enough to restore investor confidence. Euro-area finance ministers canceled a Brussels meeting slated for today and will hold a teleconference instead to prod Greece to do more to clinch an aid package it needs to make a March bond payment. “The risk of a recession is very high,” said Gerd Hassel, an economist at BHF Bank AG in Frankfurt. “We’ll only see a very, very gradual recovery this year. Countries affected by the debt crisis will take a long time to overcome their difficulties.”
• China Stocks Rebound After PBOC Governor, Premier Wen Vow to Help Europe. China’s stocks rebounded after Premier Wen Jiabao and the head of the central bank said they will help Europe resolve its debt crisis, easing concerns the export slowdown will worsen and drag down the economy. China will participate in resolving Europe’s debt crisis, People’s Bank of China Governor Zhou Xiaochuan said in Beijing today. The nation is ready to be more involved in resolving the crisis through the EFSF and European Stability Mechanism, he said in a speech, echoing comments made yesterday by Premier Wen at a joint press conference with European Union President Herman Van Rompuy.
  
• China Steel Price Shows Asia Optimism Overdone: Chart of the Day. The best start to the year for Asian currencies and stocks since at least 2006 may falter, as lagging metals prices in China signal a "downbeat" economic outlook for the region, according to Citigroup Inc. The Bloomberg-JPMorgan Asia Dollar Index and MSCI Asia-Pacific Index of shares are both near 5-month highs. However, copper in Shanghai fell this month to the least since October 2008 in relation to its price in New York, while steel, a construction mainstay, reached a 17-month low this week as China maintains curbs on its property market. "For China, steel shows demnad is still low. When one looks at Chinese equities one can argue that the outlook remains fairly downbeat. It's the rest of Asia that seems to be ignoring it," said Patrick Perret-Green, head of foreign exchange at Citigroup in Singapore.
  
• John Paulson Sells Entire Stakes in Citi(C), BofA(BAC). Billionaire John Paulson sold his entire stakes in Bank of America Corp. and Citigroup Inc. (C) in the fourth quarter before the bank’s shares rallied. Paulson & Co. sold 25.1 million shares of Citigroup valued at $643 million as of Dec. 31, according to a filing today with the U.S. Securities and Exchange Commission. The hedge fund sold about 64.3 million shares of Bank of America worth $394 million.
• LightSquared Faces U.S. Prohibition After Interference Report. The U.S. Federal Communications Commission said it won’t let Philip Falcone’s LightSquared Inc. begin service after an Obama administration adviser found that the wireless venture disrupts navigation gear. Federal agencies have determined that LightSquared’s signals interferes with global-positioning system devices, Tammy Sun, an FCC spokeswoman, said today in an e-mailed statement. The FCC is preparing to withdraw the preliminary approval it granted last year for LightSquared to build a high-speed network serving as many as 260 million people, Sun said. “The commission clearly stated from the outset that harmful interference to GPS would not be permitted,” Sun said. “The commission will not lift the prohibition on LightSquared.”
• Amazon(AMZN) Is Said To Have Fewer Prime Members Than Estimated. Amazon.com Inc.'s Prime service, a linchpin of its effort to keep customers loyal and fuel long- term profit, has attracted fewer than half as many members as analysts estimate, three people familiar with the matter said. As of October, 3 million to 5 million people subscribed to Prime, a program begun in 2005 that provides two-day shipping for $79 a year, said the people, who asked not to be named because the figures are private. Amazon is working to reach 7 million to 10 million in the next 12 to 18 months, the people said. Analysts have pegged the current number at 10 million or more, with expectations for it to climb higher this year. The slower adoption of Prime adds to concerns about Amazon's revenue growth.
• Libor Probe Said to Expose Collusion, Lack of Internal Controls. Global regulators have exposed flaws in banks’ internal controls that may have allowed traders to manipulate interest rates around the world, two people with knowledge of the probe said. Investigators also have received e-mail evidence of potential collusion between firms setting the London interbank offered rate, said the people, who declined to be identified because they weren’t authorized to speak publicly. Regulators are focusing on a lack of so-called Chinese walls between traders and employees making interest-rate submissions on behalf of their banks, the people said. In some cases, the two groups may have sat close to each other, one person said.
• Oil Rises From Two-Day Low as Optimism on Greek Aid Counters U.S. Demand. Oil rose as European leaders pushed Greece for stronger commitments to an austerity package in return for a second bailout, easing concern that the region’s debt crisis will worsen and curb commodity demand. Oil for March delivery rose as much as 63 cents to $101.37 a barrel in electronic trading on the New York Mercantile Exchange and was at $101.27 at 2:21 p.m. Sydney time. It fell 17 cents to $100.74 yesterday, the lowest close since Feb. 10. Prices are 20 percent higher the past year. Brent oil for April settlement gained 57 cents to $117.92 a barrel on the ICE Futures Europe exchange. Motor fuel demand slid to the lowest level since MasterCard Inc.’s SpendingPulse report started in July 2004. U.S. drivers bought 8.01 million barrels of gasoline a day in the seven days ended Feb. 10, down 3.1 percent from a week earlier, the report showed. Gasoline use over the previous four weeks was 5.3 percent below the 2011 period, the 47th consecutive decline in that measure. The U.S. accounts for about 21 percent of the world’s oil use and the EU consumes about 16 percent of the world’s oil demand, according to BP Plc’s Statistical Review of World Energy.

Wall Street Journal:

• Chinese local governments shouldn't try to adjust the central government's tightening policies for the property market, citing Wang Juelin, deputy director of the Ministry of Housing and Urban Rural Development's policy research department. China's tightening efforts will continue, Wang said.
  
• More Doctors 'Fire' Vaccine Refusers. Pediatricians fed up with parents who refuse to vaccinate their children out of concern it can cause autism or other problems increasingly are "firing" such families from their practices, raising questions about a doctor's responsibility to these patients. Medical associations don't recommend such patient bans, but the practice appears to be growing, according to vaccine researchers.
• Deal Reached on Payroll Tax. Congressional negotiators reached a tentative a deal Tuesday night on extending the current payroll-tax cut through the end of the year, as well as continuing longer unemployment benefits and avoiding a steep cut in Medicare doctors' fees.
• Zynga(ZNGA) Posts Loss in First Earnings Report. Zynga Inc. rode the wave of investor appetite for fast-growing Internet companies. But it still has a ways to go to prove it's worth the hype. The maker of popular social games such as "FarmVille" and "Words With Friends" posted a loss of $435 million in the fourth quarter, its first period as a public company. The loss came despite a 59% increase in revenue to $311.2 million.
• Washington's Knack for Picking Losers. Former Obama adviser Larry Summers warned the administration against federal loan guarantees to Solyndra, writing in a 2009 email that 'the government is a crappy venture capitalist.'

Fox News:

• Appaloosa Trims Home Builder, Adds Tech Holdings. Appaloosa Management LP, the Short Hills, N.J.-based hedge fund run by investor David Tepper, dropped most of its home builder positions and added shares of Apple Inc. and Oracle Corp. Appaloosa sold off shares of KB Home , PulteGroup Inc. and Ryland Group Inc. , while reducing its stake in Beazer Homes USA Inc. to just over 280,000 shares from 1.8 million last quarter. Appaloosa also increased its stake in Apple to just over 181,000 shares from about 38,000 shares last quarter, and created a new position of 1.2 million shares of Oracle.
  

Business Insider:

• A Bet On Greek Default In March, Drachmas In April.
• This Kosovo Power Plant Has Been Turned Into A Bizarre Alien World As Europe Sits Under 15 FEET Of Snow. (pics)
• The Next 12 Pivotal Dates You Can't Miss In Europe.
• Here's What Tim Cook Just Said About The TV Business.
• A Whole Bunch Of Charts That Will Give You Nightmares About The National Debt.
  

Zero Hedge:

• Complete Jeff Gundlach "Fall of the Roman Empire" Slideshow.

CNBC:

• Caesars(CZR) CEO Cites Online Gaming Opportunity. Caesars Entertainment Corp stands to benefit from the rise of social media gaming, Chief Executive Gary Loveman said in a speech on Tuesday. Loveman described what he called "the continued remarkable growth of online social games" in remarks at a luncheon in downtown Boston. Although the Las Vegas company's resort plans are often tied up in local proceedings, online games like those Caesars offers through its Playtika business face fewer rules. "These games are legal for anyone to play anywhere in the world," Loveman said.
• Obama to End 'Dozens' of Business Tax Breaks: Geithner. The Obama administration's corporate tax reform plan will end "dozens and dozens" of tax breaks, U.S. Treasury Secretary Timothy Geithner said on Tuesday as he defended the White House's election-year call for higher taxes on the wealthy.

charlotteobserver:

• Greenpeace Targets Duke Energy(DUK). The group said today it has launched a campaign to make Duke "the clean energy company that North Carolina and the United States deserve." Greenpeace faults Duke for its use of coal and for what the group considers inaction on renewable energy. Duke says the campaign ignores its work to reduce pollutants and invest in renewables, especially wind. Duke is an imposing target. It will be the largest U.S. utility if a merger with Progress Energy is approved, and is one of the largest U.S. emitters of heat-trapping carbon dioxide. It is also led by a chief executive, Jim Rogers, who has been outspoken on the industry's need to reduce emissions and address climate change, which has stalled in Congress. Greenpeace says it's calling on Duke to back up its rhetoric. "It's a question of action at this point," said its coal campaign director, Gabe Wisniewski. Greenpeace wants Duke to stop buying coal mined by destructive mountain-removal mining, make one-third of its energy from renewable sources by 2020 and "quit coal altogether" by 2030.
  
  Read more here: http://www.charlotteobserver.com/2012/02/14/3012987/greenpeace-targets-duke-energy.html#storylink=cpy

Reuters:

• Hedge Fund Managers Looked to Tech in 4th Quarter. Last year was a dismal one for many U.S. hedge fund managers, but based on their year-end stock holdings, some managers were well positioned to take advantage of this year's strong start in the equity markets.

Financial Times:

• EU Moves On Greek Debt Swap. Eurozone finance ministry officials were on Tuesday night moving to begin a €200bn Greek debt restructuring without approving a new bail-out for Athens and in the face of legal warnings – a sign that the European Union will ask for more proof that Greece is living up to austerity commitments before handing over aid urgently needed to avoid a default.
• Greeks Direct Cries of Pain at Germany. Rioters burn the German flag in street protests. A demonstrator defaces the façade of the Bank of Greece, the central bank, so that it reads “Bank of Berlin”. Most shockingly, a rightwing Greek newspaper depicts Angela Merkel, Germany’s chancellor, in a Nazi uniform above the headline “Memorandum macht frei” – an allusion to the memorandum in which Greece’s foreign creditors demand more austerity measures and to the Auschwitz slogan.

Telegraph:

• Greek Economy Spirals Down as EU Forces Final Catharsis. A Greek default and traumatic ejection from the euro moved a step closer last night after eurozone finance ministers cancelled a crucial meeting, accusing Athens of failing to flesh out austerity cuts. The escalating brinkmanship came as fresh data showed that Greece's economy contracted by 6.8pc last year and at an accelerating 7pc rate in the last quarter, far worse than expected by the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF) "troika". The country appears to be in a self-feeding downward spiral that is playing havoc with budget targets, leaving Greece with a Sisyphean task of ever deeper cuts. Premier Lucas Papademos called his cabinet together late last night to find a further €325m (£272m) of fiscal austerity demanded by the troika, likely to be defence cuts and lower salaries. The coalition parties failed to convince the Eurogroup that they would stick to the deal, and the mood has been poisoned by EU demands for an escrow account to seize Greek budget revenues at source. Blackened buildings set alight by protesters on Sunday were cordoned off on streets around parliament in Syntagma Square, a vivid reminder to Greece's politicians that any misjudgment could push the country towards anarchy.

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are -.50% to +2.0% on average.
• Asia Ex-Japan Investment Grade CDS Index 164.5 +.5 basis point.
  
• Asia Pacific Sovereign CDS Index 137.50 +2.5 basis points.
• FTSE-100 futures +.53%.
  
• S&P 500 futures +.60%.
  
• NASDAQ 100 futures +.48%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (DPS)/.74
• (DVN)/1.48
• (DF)/.23
• (OC)/.48
• (WCG)/1.120
• (ANF)/1.12
• (DE)/1.24
• (CMCSA)/.42
• (JAH)/.91
• (A)/.69
• (NVDA)/.24
• (MAR)/.47
• (GGC)/.12
• (VMC)/-.37
• (CBS)/.53
• (NTAP)/.58
• (CLF)/1.43
• (TEX)/.25
• (Z)/.00
• (IPI)/.30
• (CAR)/.06
• (CF)/6.83
• (NILE)/.42

Economic Releases
8:30 am EST

• Empire Manufacturing for February is estimated to rise to 15.0 versus 13.48 in January.
  

9:00 am EST

• Net Long-Term TIC Flows for December are estimated to fall to $45.0B versus $59.8B in November.
  

9:15 am EST

• Industrial Production for January is estimated to rise +.7% versus a +.4% gain in December.
• Capacity Utilization for January is estimated to rise to 78.6% versus 78.1% in December.

10:00 am EST

• The NAHB Housing Market Index for February is estimated to rise to 26 versus 26 in January.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,500,000 barrels versus a +304,000 barrel gain the prior week. Distillate inventories are estimated to fall by -1,100,000 barrels versus a +1,174,000 barrel gain the prior week. Gasoline inventories are estimated to rise by +700,000 barrels versus a +1,629,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to fall by -.15% versus a +1.0% gain the prior week.
  

2:00 pm EST

• Minutes of FOMC Meeting.
  

Upcoming Splits

• (MNST) 2-for-1
  

Other Potential Market Movers

• The Fed's Fisher speaking, Euro Group Finance Ministers Meeting, Portugal bond auction, weekly MBA mortgage applications report, BB&T Transports Conference, BofA Merrill Insurance Conference, (JBLU) Analyst Day and the Leerink Swann Healthcare Conference could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon. The Portfolio is 75% net long heading into the day.

Stocks Slightly Lower into Final Hour on Rising Eurozone Debt Angst, Less Financial Sector Optimism, Global Growth Fears, Profit-Taking

Broad Market Tone:

• Advance/Decline Line: Sharply Lower
  
• Sector Performance: Almost Every Sector Declining
  
• Volume: Below Average
  
• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• VIX 20.56 +7.98%
  
• ISE Sentiment Index 78.0 +9.86%
  
• Total Put/Call 1.02 +17.24%
  
• NYSE Arms 1.21 +24.84%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 98.39 +.86%
  
• European Financial Sector CDS Index 190.96 +5.02%
  
• Western Europe Sovereign Debt CDS Index 336.82 +1.41%
  
• Emerging Market CDS Index 260.39 +.99%
  
• 2-Year Swap Spread 29.0 -.5 bp
  
• TED Spread 38.50 -2.0 bps
  
• 3-Month EUR/USD Cross-Currency Basis Swap -72.25 -4.0 bps
  

Economic Gauges:

• 3-Month T-Bill Yield .11% +1 bp
  
• Yield Curve 164.0 -7 bps
  
• China Import Iron Ore Spot $142.20/Metric Tonne -1.83%
• Citi US Economic Surprise Index 68.50 +2.3 points
  
• 10-Year TIPS Spread 2.21 -3 bps
  

Overseas Futures:

• Nikkei Futures: Indicating +19 open in Japan
• DAX Futures: Indicating -26 open in Germany

Portfolio:

• Slightly Higher: On gains in my Retail, Medical and Tech sector longs
  
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) short, then covered some of them
  
• Market Exposure: 75% Net Long

BOTTOM LINE: Today's overall market action is mildly bearish, as the S&P 500 trades slightly lower on rising Eurozone debt angst, less financial sector optimism, rising global growth fears, profit-taking and technical selling. On the positive side, Oil Tanker, Computer, Semi and HMO shares are slightly higher on the day. The UBS-Bloomberg Ag Spot Index is falling -.86% and Gold is falling -.45%. Oil continues to trade poorly, given the stock rally, euro rally, rising interest from speculators, falling euro debt angst, subsiding emerging market hard-landing fears, improving US data and rising Mid-east tensions over the last few weeks. On the negative side, Coal, Alt Energy, Steel, Bank, REIT and Education shares are under meaningful pressure, falling more than -2.0%. Cyclicals and small-caps are relatively weak. Financial shares are also underperforming today. Copper is falling -.86% and Lumber is down -2.7%. The Spain sovereign cds is gaining +2.31% to 375.33 bps(+8.5% in 5 days), the France sovereign cds is gaining +2.86% to 186.50 bps(+14.7% in 5 days), the Italy sovereign cds is rising +.93% to 401.67 bps(+6.8% in 5 days) and the Belgium sovereign cds is gaining +1.8% to 227.67 bps(+9.3% in 5 days). The European Financial Sector CDS Index has risen +19.7% in 5 days. Lumber is flat since its Dec. 29th high despite the better US economic data, more dovish Fed commentary, improving sentiment towards homebuilders, equity rally and decline in eurozone debt angst. Moreover, the weekly MBA Purchase Applications Index has been around the same level since May 2010. The Baltic Dry Index has plunged over -60.0% from its Oct. 14th high and is now down over -50.0% ytd. The 10Y T-Note Yield is -5 bps to 1.92% today, which remains a concern considering the recent stock rally, falling Eurozone debt angst and improvement in US economic data. The Philly Fed’s ADS Real-Time Business Conditions Index has stalled over the last month after showing meaningful improvement from mid-Nov. through year-end. Weekly retail sales rose +2.6% this week versus a +2.5% gain the prior week. This remains a subpar rate for a recovery. The Western Europe Sovereign CDS Index is still fairly close to its Jan. 9th all-time high. The TED spread, 2Y Euro Swap Spread, 3M Euribor-OIS spread and Libor-OIS spread have improved, but are still at stressed levels. China Iron Ore Spot has plunged -22.0% since Sept. 7th of last year. Shanghai Copper Inventories are up +618.0% ytd to a new all-time high as they eclipsed their April 2010 record today. Stocks are cutting losses on news that Greece will deliver a letter of commitment tomorrow to lenders, however I still view it as highly unlikely they will meet those commitments over the intermediate-term. I still see little evidence to suggest that Europe's debt crisis won't flare up again in an even more intense fashion down the road. Investor sentiment remains too complacent, however performance angst is likely already a factor in some circles, which is a positive. The fact that the tech sector and broad market have stalled with market-leader (AAPL) soaring is another negative. For an intermediate-term equity advance from current levels, I would still expect to see further European credit gauge improvement, subsiding hard-landing fears in key emerging markets, a rising 10-year yield, better volume, stable-to-lower energy prices and higher-quality stock market leadership. One of my longs, (ISRG), is hitting a new all-time high today. The stock is extended short-term, however longer-term I still see outperformance for the shares. I expect US stocks to trade mixed-to-lower into the close from current levels on Eurozone debt angst, rising global growth fears, less financial sector optimism, technical selling, profit-taking and more shorting.

Today's Headlines

Bloomberg:

• Greece Struggles to Win Second Bailout. European officials jacked up the pressure on the Greek government to deliver budget cuts in exchange for a second bailout as they insisted that default is not an option. Finance ministers canceled a Brussels meeting slated for tomorrow and will hold a teleconference instead to prod Greece to do more to clinch an aid package worth 130 billion euros ($170 billion) along with roughly 100 billion euros of debt relief from private bondholders. “I did not yet receive the required political assurances from the leaders of the Greek coalition parties on the implementation of the program,” Luxembourg Prime Minister Jean- Claude Juncker, chairman of the euro finance panel, said in a statement today. He also pressed for “further technical work” on Greek budget cuts. Two years after pledging to pull Greece back from the brink, European leaders are torn between pouring more aid into the struggling economy or risking an unprecedented national bankruptcy that might force the country out of the euro and prompt renewed tumult in European markets. Finance ministers will discuss “outstanding issues” tomorrow and hold their next meeting as scheduled on Feb. 20, Juncker said. The postponement pushed the euro down to $1.3115 at 7 p.m. Brussels time from $1.3150 earlier.
• Greek Economy Shrank 6.8% in 2011, More Than Forecast. Greece's economy, reeling from austerity measures demanded by creditors in exchange for rescue funds, contracted almost a percentage point more last year than the government forecast, according to Bloomberg calculations. Gross domestic product fell 7 percent from a year earlier in the fourth quarter after contracting a revised 5 percent on an annual basis in the previous three months, the Athens-based Hellenic Statistical Authority said in an e-mailed statement today. GDP declined 6.8 percent in 2011, according to Bloomberg calculations, compared with a 6 percent contraction estimated in the government's 2012 budget.
• ECB Risks Repeat of Ruble Zone Failure, Citigroup's Buiter Says. The European Central Bank risks repeating the mistakes of policy makers after the Soviet Union’s break-up that led to the collapse of the ruble as a regional currency, according to Citigroup Inc. chief economist Willem Buiter. By allowing national central banks to expand their balance sheets at varying rates, the Frankfurt-based ECB’s policies echo condition following the collapse of the Soviet Union, Buiter wrote in a report today. Successor states initially shared a monetary union called the ruble zone only for it to collapse because of a lack of policy cohesion. The ECB may be following a “road at whose end awaits the complete ‘Rublezonefication’ of the common monetary, credit and liquidity policy into 17 different national policies and, ultimately, a fracturing of the monetary union into multiple independent national monetary regimes,” Buiter wrote.
• European Industrial Output Declines 1.1%, Led by Germany. European industrial production declined in December led by a slump in Germany, adding to signs the region may have slipped into its second recession in three years. Production in the 17-nation euro area fell 1.1 percent from November, when it remained unchanged, the European Union’s statistics office in Luxembourg said today. Economists had forecast a drop of 1.2 percent, the median of 36 estimates in a Bloomberg News (EUITEMUM) survey showed. From a year earlier, production decreased 2 percent. The region’s economy probably failed to grow in the fourth quarter as governments toughened austerity measures, undermining spending and hiring, just as global exports weakened.
• Sovereign Bond Risk Rises as Moody's Cuts Italy, Spain Ratings. The cost of insuring European sovereign debt rose after Moody's Investors Service cut the ratings of six of the region's governments, including Spin and Italy, and lowered its outlook on France and the U.K. The Markit iTraxx SovX Western Europe Index of cds on 15 governments rose for a fifth day, climbing three basis points to a two-week high of 332 at 10 am in London. Swaps on Spain climbed six basis points to 372, Italy rose two to 402 and the U.K. was up two at 76, all the highest levels in two weeks, according to CMA. Contracts on the Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers was unchanged at 221 basis points and the subordinated index was up 3.5 basis points at 373.5.
• Emerging Stock Rally May Fade as Bulls Increase, Strategists Say. The biggest purchases of emerging- market stocks by global money managers in more than a decade and the largest mutual-fund inflows in 15 months are signs to Bank of America Corp. and Morgan Stanley that the rally in developing-nation shares may pause. A net 44 percent of investors surveyed by Bank of America this month said they had "overweight" positions in emerging markets, up from 20 percent in January, the biggest monthly increase since 2001, according to a report today. Developing- nation stock funds lured $5.8 billion in the week ended Feb. 8, the most since October 2010, EPFR Global data show.
• Egypt Minister Says U.S. Used NGOs to Sow Chaos, Ahram Says. Egypt’s planning minister has told investigators that the U.S. directly funded non-governmental organizations in the country with the aim of sowing chaos after the fall of Hosni Mubarak, the state-run Al Ahram newspaper said. Fayza Aboulnaga said the U.S. aimed to thwart a “historic opportunity” for Egypt to regain its regional and international stature, the Cairo-based newspaper said. Egypt has referred 43 people, including the son of U.S. Transportation Secretary Ray LaHood, to trial after a probe into foreign funding of NGOs. The inquiry has added to strains between the U.S. and Egypt and jeopardized American financial aid to the Egyptian military, a close ally.
• Oil-Tanker Glut Is Unchanged From Four-Week High, Survey Shows. A surplus of the largest oil tankers competing to load crude at Persian Gulf ports stayed unchanged after reaching a four-week high last week, a survey showed. There are 10% more VLCCs available for hire over the next 30 days than there are likely cargoes, according to a Bloomberg survey of seven shipbrokers and owners today. The glut was the biggest since Jan. 10 as of last week.
• Syria Army Shells Homs as UN Urges International Action. Syria’s army fired artillery at the city of Homs as the United Nations’ top human-rights official, Navi Pillay, urged international action to protect civilians. Security forces resumed shelling the Baba Amr neighborhood at 6 a.m. today and carried out attacks in the southern province of Daraa and Idlib, killing at least 20, Rami Abdel Rahman, head of the U.K.-based Syrian Observatory for Human Rights, said by phone. The assault on Homs began 10 days ago. “The humanitarian situation is very bad, food and medicine are scarce, and there is no electricity,” said Abdel Rahman, who is in touch with a network of activists in Syria. The shelling of Baba Amr today was the “fiercest” of the past five days, he said. Nationwide, about 20 people died yesterday, he said, including in the city of Rastan, which was hit by heavy artillery and machine-gun attacks.
• Retail Sales in U.S. Rise, Below Forecasts. Sales at U.S. retailers rose less than forecast in January, reflecting an unexpected drop in purchases of automobiles. The 0.4 percent gain reported by the Commerce Department today in Washington was half the 0.8 percent rise median forecast of economists surveyed by Bloomberg News. Purchases excluding car dealers climbed 0.7 percent, more than projected and the biggest gain since March. “Consumers are being very picky at this point,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “We saw aggressive retailer discounting and sharp price cuts in the new year. It bodes poorly for retailers’ margins.” Purchases were also revised down 0.1 percentage point in each of the prior two months -- to unchanged in December and a 0.3 percent rise in November. Stagnant yearend sales prompted economists at Morgan Stanley to trim their tracking estimates for consumer spending in the fourth quarter and first three months of 2012.
• Philly Fed Boss Warns Against Speeding Recovery. The head of the Philadelphia Federal Reserve Bank warned Tuesday against efforts to accelerate the nation's economic recovery, citing the threat of inflation. Speaking at the University of Delaware, Charles Plosser said the Fed already has taken several steps to help revive the economy, and that with a very accommodative monetary policy already in place, officials must guard against the medium and longer-term risks of inflation. "Inflation risks in the near term, I think, remain modest," he said. "However, I do remain concerned that monetary policy actions have exposed us to substantial inflation risks over the medium and longer term." Plosser noted that the Fed has kept the federal funds rate near zero for more than three years to support the economic recovery. The Fed also has conducted two rounds of asset purchases that have more than tripled the size of its balance sheet and changed its composition from short-term Treasuries to longer-term Treasuries and mortgage-backed securities. "Today, we are in a modest recovery from a very deep recession and a financial crisis," Plosser said. "The financial crisis has passed, however, and monetary policy should not continue to act as if the financial crisis is still upon us." Plosser said he did not support the Federal Open Market Committee's announcement last month that economic conditions were likely to warrant exceptionally low levels for the federal funds rate at least through late 2014, 18 months longer than the mid-2013 date the Fed first signaled in August. "I think economic conditions, as they have evolved even since late last year, do not call for further accommodation," Plosser said. "In fact, the economy has actually improved. Moreover, I continue to oppose using calendar dates to communicate forward guidance."

Wall Street Journal:

• China's Military Spending to Double by 2015 - Report. China’s defense budget will double by 2015, making it more than the rest of the Asia Pacific region’s combined, according to a report from IHS Jane’s, a global think tank specializing in security issues.
• EU Says Many Members Vulnerable. Twelve European Union member nations, including Italy, Spain, the U.K. and France, are suffering from significant economic imbalances that leave them vulnerable to further shocks, the European Commission is to say. In a document due to be released Tuesday at 0900 ET by European Economics Commissioner Olli Rehn, the EU's executive arm said it will conduct an in-depth analysis into nearly half of the EU's 27 members, which could eventually lead to demands for policy changes and potentially even sanctions.
• Exclusive: Yahoo(YHOO) Asia Deal Talks Off For Now.
• Solar Firm Films for Chapter. 11. Energy Conversion Devices Inc., a pioneering Michigan-based solar-technology company, filed for bankruptcy protection Tuesday with a plan to slash its debt and sell its business at a court-supervised auction. The Auburn Hills, Mich., company filed for Chapter 11 protection in U.S. Bankruptcy Court in Detroit after it was unable to come to terms on an out-of-court deal with its convertible bondholders, according to Michael E. Schostak, director of business development at Energy Conversion Devices.
• China Deflects Criticism Over Syria. Chinese Premier Wen Jiabao and other senior leaders defended Beijing's handling of the crisis in Syria amid growing international criticism that threatens to cast a shadow over a visit to the U.S. by Vice President Xi Jinping. Mr. Wen, speaking at a news conference on Tuesday at an EU-China summit in Beijing, said China was working to prevent the spread of violence in Syria. He was addressing recent criticism from the U.S., Europe and others that Beijing's unwillingness to support measures against Syria at the United Nations was a key hurdle to restoring peace there.
  

CNBC.com:

• NFIB: Small Business Confidence Inches Up. The Small Business Optimism Index rose an ever-so-slightly 0.1 points in January, marking the the fifth increase in a row. “The good news is, it’s not going down,” William Dunkelberg, chief economist of the National Federation of Independent Business, told CNBC.com. "But there's still a lot of bad news out there."
• Apple(AAPL) May Face iPad Export Ban in china Trademark Spat.
• Young and Fashionable: Gen Y Flocks to Online Luxury.
  

Business Insider:

• Iran Has Prepared Suicide Boats And Is Shadowing The USS Abraham Lincoln Through The Strait Of Hormuz.
• Warren Buffett's Straw Man Argument Ignores One Fundamental Trend.
• Art Cashin: The Unemployed Are Now Going On Disability And It's Costing The Government Billions.
• A Must-Read On The Societal Disaster That's Happening In Greece.
• Top Marginal Tax Rates Under The Buffett Rule Could Exceed 100%.
  

Zero Hedge:

• Credit Drop Signals 'All Is Not Well'. (graphs)
• "Spain Is Fine". (graph)
• It's Not Just Gasoline Consumption That's Tanking, It's All Energy. (graph)
• January Gas Prices At All-Time Highs. (graph)
• Obama Predicts He Will Breach Debt Ceiling Two Months Before Election.
  

New York Times:

• French Candidate Assails Plan for Greece. The front-runner for the French presidency, the Socialist candidate François Hollande, criticized European policy on Greece on Monday, saying that mandatory austerity measures were too severe and would never produce the desired results because “everyone knows” that “there is no rebound in growth in Europe and in Greece.” The Greek government, he said, would “have a short life,” while the austerity plan forced on Greece amounted to a “purge.”
• Portugal's Debt Efforts May Be a Warning for Greece. Unlike Greece, Portugal is a debtor nation that has done everything that the European Union and the International Monetary Fund have asked it to, in exchange for the 78 billion euro (about $103 billion) bailout Lisbon received last May. And yet, by the broadest measure of a country’s ability to repay its debts, Portugal is going deeper into the hole. The ratio of Portugal’s debt to its overall economy, or gross domestic product, was 107 percent when it received the bailout. But the ratio has grown since then, and by next year is expected to reach 118 percent. That’s not necessarily because Portugal’s overall debt is growing, but because its economy is shrinking. And economists say the same vicious circle could be taking hold elsewhere in Europe.
• OECD Urges Germany to Address Its Own Economic Weak Spots. The vaunted German economy remains over-regulated and suffers from other weaknesses that could cause growth to slow significantly in coming years, the Organization for Economic Cooperation and Development said Tuesday. In what amounted to a warning against complacency by German leaders, the O.E.C.D. said that the country needs to do more to encourage women and older people to work; strengthen its fragile banking system; and remove regulations that discourage competition among lawyers, engineers and other professions.

Rasmussen Reports:

• 59% of Catholics Disapprove of Obama's Job Performance. Catholics strongly disapprove of the job President Obama is doing as the debate continues over his administration’s new policy forcing Catholic institutions to pay for contraception they morally oppose. While the president’s overall job approval ratings have improved over the past couple of months, they have remained steady among Catholics. A new Rasmussen Reports national telephone survey finds that 59% of likely Catholic voters nationwide at least somewhat disapprove of the president’s job performance, while 40% at least somewhat approve. But the passion’s on the side of those who don’t like the job he’s doing: 44% Strongly Disapprove versus 19% who Strongly Approve.

Reuters:

• EU to Punish Spain for Deficits, Inaction. The European Union is likely to take action against Spain's newly installed government by May for delaying austerity measures ahead of a regional election next month, sources familiar with the situation have told Reuters. A final decision still has to be made, but the European Commission believes the new government overstated the deficit figures for 2011 so the current year's data would look better. Spain is also not addressing quickly enough the deterioration in public finances expected in 2012, risking the country's longer-term growth, three senior EU officials said. Asked if the European commissioner for economic and monetary affairs, Olli Rehn, would take action and recommend that the bloc's 27 finance ministers adopt sanctions against Madrid, one of the officials said: "It is very likely." "It is not that we want to. But if there is a deviation, and it is almost inevitable, then we will have to," added the official, who spoke on condition of anonymity.
• Copper Slides in Sign of Deepening Correction.
  

USA Today:

• Pew Study: 1 in 8 Voter Records Flawed. More than 24 million voter-registration records in the United States— about one in eight — are inaccurate, out-of-date or duplicates. Nearly 2.8 million people are registered in two or more states, and perhaps 1.8 million registered voters are dead.

Telegraph:

• Debt Crisis: Live. Tomorrow's meeting to discuss the second Greek bail-out has been called off amid accusations that the debt-stricken country has failed to offer the required political pledges, as Britain is labelled an economy at risk by the EU.

Handelsblatt:

• An agreement under which private investors would voluntarily take a 70% losss on Greek debt may not result in the targeted writedown of about $132 billion because not enough bondholders accept the terms of the proposal, citing central bankers. While a deal will likely be announced tomorrow as planned, Greece may have to introduce legislation that would bind all bondholders to the revised terms once 50% of the investors agree to the plan.