Bear Radar

Style Underperformer:

• Large-Cap Growth +.82%

Sector Underperformers:

• 1) Education -1.75% 2) Homebuilders -.06% 3) Foods +.12%

Stocks Falling on Unusual Volume:

• STRA, ONE, SKX, WM, RP, UPL, VIP, SNCR, NILE, DGIT, RP, ACOM, AIMC, CAR, RPXC, NTES, SNCR, DTV, MELI, QCOR, AMZN, STJ, HBI, ABB, HTZ and KRO
  

Stocks With Unusual Put Option Activity:

• 1) WY 2) XEC 3) KMI 4) DECK 5) MS
  

Stocks With Most Negative News Mentions:

• 1) DE 2) PHM 3) AMZN 4) NHI 5) DGIT
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +.89%

Sector Outperformers:

• 1) Computer Hardware +1.58% 2) Oil Tankers +1.15% 3) Utilities +1.10%

Stocks Rising on Unusual Volume:

• SYNT, AAP, EGOV, CAB, MITK, OVTI, CLR, ITRI, NTAP, EQIX, ACTG, PCAR, EXPD, AEA, RUK, TRW, HOS, TEX, VCI, IPI, GNC, SEE, TRN and TAP
  

Stocks With Unusual Call Option Activity:

• 1) TLM 2) HTZ 3) MTG 4) SWN 5) NVS
  

Stocks With Most Positive News Mentions:

• 1) ITRI 2) FRED 3) NTAP 4) DTV 5) GIS
  

Charts:

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

Thursday Watch

Evening Headlines
Bloomberg:

• Europe Demands More Greek Budget Controls in Struggle to Forge Rescue Plan. Europe’s creditor countries struggled to bridge divisions over a rescue of Greece, seeking more control over how future aid is spent as the clock ticked toward a possible default next month. In a replay of the brinkmanship that marked the early stages of the Greek crisis two years ago, euro-area finance ministers extracted concessions from political leaders in Athens intended to pave the way for the endorsement of a 130 billion- euro ($171 billion) aid package next week. While “further considerations are necessary regarding the specific mechanisms to strengthen the surveillance of program implementation,” Europe is set to make “all the necessary decisions” on Feb. 20, Luxembourg Prime Minister Jean-Claude Juncker said in an e-mailed statement after chairing a conference call of finance chiefs late yesterday. Greece’s plea for more aid on top of the 110 billion euros awarded in 2010 has stirred recriminations on both sides of Europe’s north-south economic divide, with taxpayers in better- off countries rebelling against further handouts. Each day lost brings Greece closer to a March 20 bond redemption when it must make a 14.5 billion-euro payment or become the first country in the euro’s 13-year history to default.
• Greece Debt to Fall Less Than Forecast, Economists Tell FTD. Economists at European banks expect Greece’s national debt to fall less than expected by the so- called troika as consolidation efforts sap economic growth, Financial Times Deutschland reported. “Even with the discussed creditor participation it is now hardly realistic that the state debt falls to a sustainable level,” Frank Hansen, head economist of Danske Bank, was cited as saying by the newspaper. The troika, which includes the International Monetary Fund, European Commission and European Central Bank, “massively underestimated how dramatically damaging consolidation is for the economy,” the FTD cited Fabio Fois, European economist at Barclays Capital, as saying.
• France Joins Spain to Defy Moody's With 14.3 Billion-Euro Debt-Sale Plan. France and Spain plan to sell as much as 14.3 billion euros ($18.7 billion) in bonds today, defying concern about a second bailout for Greece and after Moody’s Investors Service cut ratings for some European nations. France plans to sell as much as 8.5 billion in two- three- and five-year bonds, while Spain aims to sell a maximum of 4 billion euros in securities maturing in January and July 2015 and October 2019. France is also auctioning as much as 1.8 billion euros of index-linked bonds. The European Central Bank’s three-year lending program for banks, dubbed LTRO, may help demand for the auctions, which come three days after Moody’s cut the ratings of six European nations including Spain and revised its credit outlook on France to “negative.”
  
• Morgan Stanley(MS), UBS May Be Cut Up to Three Levels by Moody's. UBS AG, Credit Suisse Group AG and Morgan Stanley's credit ratings may be cut by as many as three levels by Moody's Investors Service, which is reviewing 17 banks and securities firms with global capital markets operations. Goldman Sachs Group Inc., Deutsche Bank AG, JPMorgan Chase & Co. and Citigroup Inc. are among companies that may be downgraded by two levels, Moody's said in a statement, adding that the “guidance is indicative only.” Moody's today cut some European insurers' ratings based on risks stemming from the region's sovereign debt crisis.
• Chinese Shift to Wealth Products Seen Undermining Bank Stability. In January, depositors pulled 800 billion yuan from savings accounts, about 1 percent of the total, the central bank reported. It was the largest monthly decline in at least 12 years, according to data compiled by Bloomberg.
• Al Gore Likens Carbon to Subprime Debt in Plan to "Repair" Capitalism. Former U.S. Vice President Al Gore said investors in oil and gas companies who ignore the cost of emitting carbon dioxide and other greenhouse gases are making a mistake similar to those who invested in subprime mortgages. “The value of the subprime mortgages was based on a false assumption,” Gore said yesterday in an interview. “In almost exactly the same way, the value of all of these carbon fuel reserves is based on a similarly absurd assumption.” “The bitter experience that the subprime mortgages caused should be a reminder that stranded assets have the potential for doing a great deal of damage,” Gore said in a video link between Generation’s New York and London offices. The firm manages about $6.5 billion. “These subprime carbon assets have an asserted value based on the assumption that it’s perfectly OK to put 90 million tons of global warming pollution into the atmosphere every 24 hours,” he said. “Actually it’s not.”
• China's Foreign Direct Investment Falls for a Third Month. Foreign direct investment in China fell for the third month in January as slowing economic growth and Europe’s debt crisis prompted companies to rein in spending. Foreign investment declined 0.3 percent to $9.997 billion last month from a year earlier, the Ministry of Commerce said in a statement in Beijing today. Spending dropped 12.7 percent in December after a contraction the previous month that was the first since 2009. The outlook for foreign investment in China, which attracted a record amount of spending last year, is “not optimistic,” the ministry said in December. Weaker global growth and changes to the nation’s policies on overseas funding for some industries may temper gains this year.

Wall Street Journal:

• Real-Estate Chief Exits From China Wealth Fund. The head of real estate for China's giant sovereign-wealth fund resigned last week after two months on the job, following other departures from the real-estate division of one of the world's most-active property investors. Patrick Wu, who had been with China Investment Corp. for about four years, was elevated to the top position in the real-estate group in December, succeeding Collin Lau, who took a position with the fund's European private-equity division.
• Toxic? Says Who? Taste For 'Subprime' Returns. Investors' belief that the worst is over for the U.S. housing market is fueling renewed interest in once-toxic mortgage bonds that were at the heart of the financial crisis. Prices of some distressed bonds backed by subprime home loans—those issued before the crisis to borrowers with sketchy credit histories—have chalked up double-digit percentage gains this year, with one prominent market index rising 14%. The rally has drawn investors back to a corner of the credit markets that was pummeled from 2007 to 2009 and has been volatile since. The latest upswing has some money managers setting up investment funds dedicated to buying beaten-down mortgage bonds, hoping to reap fat yields while waiting for the housing market to turn. The recent resurgence in battered mortgage bonds that were left for dead during the crisis reflects how investors' appetite for risk is returning, even after many banks and hedge funds lost money last year on similar assets.
• Oil Rise Imperils Budding Recovery. Rising oil prices are emerging once again as a threat to the U.S. economic recovery just as it appears to be gaining momentum. Oil prices have climbed sharply in recent weeks as mounting tension with Iran has raised the threat of a disruption in global supplies. On Wednesday, oil futures on the New York Mercantile Exchange rose $1.06 to $101.80 a barrel on reports that Iran had cut off sales to six European countries in response to the European Union's newly stepped-up sanctions. Iran's oil ministry later denied the report.
• NetApp's(NTAP) 3Q Profit Falls, But Sentiment Improves. NetApp Inc.'s (NTAP) fiscal third-quarter earnings fell 36% on higher charges and weaker margins, but the data-storage company posted double-digit sales growth and helped to alleviate some fears about slowing tech spending.
• Cliffs Natural(CLF) 4Q Net Down 52% On Weakness In Asia Pacific. Cliffs Natural Resources Inc.'s (CLF) fourth-quarter earnings sank 52% on weaker sales volume and pricing in the Asia Pacific region, and higher input costs, though its revenue increased.
• New Bill Clouds Legality Of Tips. The political-intelligence industry thought it scored a great success last week when Republicans yanked a provision from a bill that would have forced firms to register their activities. Now it is confronting the possibility that the legislation—more broadly aimed at banning insider-trading in Congress—could put the entire industry in jeopardy.
• How I'll Respond to China's Rising Power by Mitt Romney. The character of the Chinese government—one that marries aspects of the free market with suppression of freedom—shouldn't become the norm.
• Meet the ObamaCare Mandate Committee. Think the contraception decision was bad? Wait until bureaucrats start telling your insurer which cancer screenings to cover. Offended by President Obama's decision to force health insurers to pay for contraception and surgical sterilization? It gets worse: In the future, thanks to ObamaCare, the government will issue such health edicts on a routine basis—and largely insulated from public view. This goes beyond contraception to cancer screenings, the use of common drugs like aspirin, and much more. Under ObamaCare, a single committee—the United States Preventative Services Task Force—is empowered to evaluate preventive health services and decide which will be covered by health-insurance plans.

MarketWatch:

• Fed Minutes Show Few Supporters For QE3. Only a few members of the Federal Open Market Committee favored another round of quantitative easing, or bond purchases, according to minutes of the last meeting released Wednesday.
• CF Industries(CF) More Than Doubles Profit. CF Industries Holdings Inc.'s CF -2.61% fourth-quarter earnings more than doubled as higher prices lifted revenue and margins surged.

Business Insider:

• Across The Western World Elections Could Set Off Crisis.
• This Is Just Getting Ugly, As A Verbal War Is Breaking Out Between Germany And Greece.
• Intelligence Reports Suggest Iran And Al Qaeda Are Teaming Up To Attack The West.

Zero Hedge:

• As Greece Crashes And Burns, Troika Arrives In Portugal With "Soothing Words Of Support".
• Brent Priced In EUR At Record Highs. (graph)
• Biderman Beyond Baffled by B.O.'s Budget. (video)
• Moody's Downgrades Generali, Cuts Megainsurer Allianz Outlook To Negative. (graphs)
  

CNBC:

• Is The US Heading For Another Credit Downgrade? (video)
• World Bank's Zoellick to Step Down, US Eyes Spot. World Bank President Robert Zoellick said on Wednesday he will step down in June and Washington pledged to put a replacement candidate forward within weeks for a job that has always gone to an American.

IBD:

• Endo(ENDP) Diversifies Drug Lineup To Offset Generic Threat.

NY Times:

• Loss of a Wireless Dream Caps a Fast Fall From Grace. It was as ambitious a bet as any hedge fund manager could imagine: building a wireless network from scratch to compete with the likes of AT&T and Verizon.But the dream has come crashing down to earth for Philip A. Falcone, the investor whose multibillion-dollar wager has been all but halted by the Federal Communications Commission.

Reuters:

• GE's(GE) Rice Sees China Growth Slowing In 2012. General Electric Co believes China's economy, a key source of revenue growth for the largest U.S. conglomerate, will slow this year but not substantially below 8 percent, said the executive who runs the company's international operations. "The growth rate in China is going to be a little bit lower than we thought a year ago. But still a very manageable, healthy if you will, 8 percent," Vice Chairman John Rice said on Wednesday. "If it does drop below 8 percent for a while, that's not the end of the world either."
  
• Copper Hits Two-Week Low as Greece Delay Sours Mood.
• Nvidia(NVDA) warns of chip supplies and loss of Samsung. Nvidia Corp warned that delays in ramping up new manufacturing technology are affecting sales of its PC graphics chips and that smartphone chip-customer Samsung Electronics has become a rival.
• More Chinese Cities Halt Apple(AAPL) iPad Orders - Reports. Retailers in more Chinese cities have been told by authorities to take the popular iPad tablet PCs off their shelves this week, media reports said on Thursday, due to a legal battle between a Chinese technology firm and Apple Inc over trademark issues.

Telegraph:

• Evangelos Venizelos warns Germany is 'playing with fire' on Greece. Greek finance minister Evangelos Venizelos accused European leaders of "playing with fire" by trying to oust the beleaguered country from the eurozone amid fears they want to delay releasing the €130bn (£108bn) bail-out until after Greek elections in April.
• Single Currency's Struggle Takes Its Toll On Europe. The diverse nature of the 17 countries brought together in monetary union has never been so apparent.
• Fed Member: US Banks Must Be Broken Up For Stability. Richard Fisher, president of the Federal Reserve Bank of Dallas, said on Wednesday that the largest American banks still posed a major risk to the US and were "too dangerous to permit". In a speech in New York, Mr Fisher said: "Downsizing the behemoths over time into institutions that can be prudently managed and regulated across borders is the appropriate policy response. Then, creative destruction can work its wonders in the financial sector, just as it does elsewhere in our economy." He warned that the US banking had "become more concentrated" with five of the largest banks accounting for half the industry's assets. "Sustaining too big-to-fail-ism and maintaining the cocoon of protection of SIFIs [systemically important financial institutions] is counter-productive, expensive and socially questionable. Perhaps the financial equivalent of irreversible lap-band or gastric bypass surgery is the only way to treat the pathology of financial obesity, contain the relentless expansion of these banks and downsize them to manageable proportions," said Mr Fisher.

Qiushi:

• China will gradually expand the nation's property tax reform trial, Chinese Vice Premier Li Keqiang wrote in an article. Excess global liquidity, market pessimism and a "relatively large" domestic money supply will challenge China's ability to maintain economic growth and stable consumer prices, Li wrote.

Shanghai Securities News:

• China's contribution to a European financial stability facility should be capped at 92.6B euros, the same as Spain's, Peng Xingyun, a researcher with the Chinese Academy of Social Sciences, writes in a commentary.

Evening Recommendations
Jefferies:

• Rated (LO) Buy, target $139.
  

Night Trading

• Asian equity indices are -1.50% to -.50% on average.
• Asia Ex-Japan Investment Grade CDS Index 169.0 +4.5 basis points.
  
• Asia Pacific Sovereign CDS Index 136.25 -1.25 basis points.
• FTSE-100 futures -1.03%.
  
• S&P 500 futures -.53%.
  
• NASDAQ 100 futures -.49%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (STRA)/2.25
• (RRGB)/.20
• (PCG)/.85
• (H)/.13
• (AAP)/.74
• (CAB)/.99
• (WM)/.60
• (HUN)/.28
• (DUK)/.21
• (TRW)/1.55
• (DISCA)/.69
• (PFCB)/.45
• (GM)/.41
• (APA)/2.86
• (RS)/.78
• (MDRX)/.25
• (JWN)/1.10
• (DTV)/.92
• (SPW)/1.75
• (AMAT)/.12
• (VFC)/2.30
• (SJM)/1.41
  

Economic Releases
8:30 am EST

• The Producer Price Index for January is estimated to rise +.4% versus a -.1% decline in December.
• The PPI Ex Food & Energy for January is estimated to rise +.2% versus a +.3% gain in December.
• Initial Jobless Claims are estimated to rise to 365K versus 358K the prior week.
• Continuing Claims are estimated to fall to 3490K versus 3515K prior.
• Housing Starts for January are estimated to rise to 675K versus 657K in December.
• Building Permits for January are estimated to rise to 680K versus 679K in December.
  

10:00 am EST

• Philly Fed for February is estimated to rise to 9.0 versus 7.3 in January.

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Bernanke speaking, France/Belgium/Spain bond auctions, ECB's Coene speaking, 4Q Mortgage Delinquencies, 4Q MBA Mortgage Foreclosures, 30Y Tips Auction, weekly EIA natural gas inventory report, weekly Bloomberg Consumer Comfort Index, Bloomberg Economic Expectations for February, (HNT) Investor Day, (WGL) Analyst Meeting, (IT) Investor Day, (ZION) Investor Day, (SNDK) Analyst Meeting, (JDSU) Analyst Day, (NILE) Investor Day and the KBW Cards/Payments/Financial Tech Symposium could also impact trading today.
  

BOTTOM LINE: Asian indices are lower, weighed down by technology and financial shares in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 50% net long heading into the day.

Stocks Falling into Final Hour on Rising Eurozone Debt Angst, Global Growth Fears, Apple Inc. Reversal, Rising Energy Prices

Broad Market Tone:

• Advance/Decline Line: Lower
  
• Sector Performance: Most Sectors Declining
  
• Volume: Around Average
  
• Market Leading Stocks: Underperforming
  

Equity Investor Angst:

• VIX 21.26 +8.80%
  
• ISE Sentiment Index 58.0 -26.58%
  
• Total Put/Call 1.06 +10.42%
  
• NYSE Arms 1.29 +26.25%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 99.59 +1.22%
  
• European Financial Sector CDS Index 200.21 +4.82%
  
• Western Europe Sovereign Debt CDS Index 349.35 +3.67%
  
• Emerging Market CDS Index 264.80 +2.21%
  
• 2-Year Swap Spread 28.50 -.5 bp
  
• TED Spread 38.75 +.25 bp
  
• 3-Month EUR/USD Cross-Currency Basis Swap -72.25 unch.
  

Economic Gauges:

• 3-Month T-Bill Yield .11% unch.
  
• Yield Curve 165.0 +1 bp
  
• China Import Iron Ore Spot $142.20/Metric Tonne -1.58%
• Citi US Economic Surprise Index 63.30 -5.2 points
  
• 10-Year TIPS Spread 2.21 unch.
  

Overseas Futures:

• Nikkei Futures: Indicating -30 open in Japan
• DAX Futures: Indicating -38 open in Germany

Portfolio:

• Slightly Higher: On gains in my Biotech/Tech sector longs and index hedges
  
• Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) short
  
• Market Exposure: Moved to 50% Net Long

BOTTOM LINE: Today's overall market action is bearish, as the S&P 500 trades near session lows on rising Eurozone debt angst, less financial sector optimism, a key reversal in market-leader (AAPL), rising global growth fears, higher energy prices, profit-taking and technical selling. On the positive side, Coal, Networking and HMO shares are especially strong, rising more than +.75%. Tech shares are holding up relatively well. The US sovereign cds is down -5.2% to 37.01 bps. On the negative side, Steel, Oil Tanker, Construction and Road & Rail shares are under meaningful pressure, falling more than -1.5%. Cyclicals and small-caps are underperforming. The Transports are also especially weak and are close to testing their 50-day moving average. Copper is falling -.39%, Oil is rising +.7%, Gold is gaining +.44% and Lumber is down -1.8%. The Spain sovereign cds is gaining +4.41% to 392.0 bps(+8.8% in 5 days), the France sovereign cds is gaining +4.78% to 194.67 bps(+20.5% in 5 days), the Italy sovereign cds is rising +3.82% to 416.0 bps(+11.6% in 5 days), the Germany sovereign cds is gaining +3.57% to 88.67 bps(+5.8% in 5 days), the Portugal sovereign cds is gaining +3.55% to 1,147.98 bps and the Belgium sovereign cds is gaining +3.74% to 235.67 bps(+10.8% in 5 days). The European Financial Sector CDS Index has risen +30.4% in 6 days. The ECB Overnight Facility is right back near its Jan. 17 record high. Moreover, the European Investment Grade CDS Index is rising +4.2% to 127.50 bps today. Lumber is -6.0% 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 flat at 1.93% 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. 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 ceased their recent improvement and are still at stressed levels. China Iron Ore Spot has plunged -24.1% since Sept. 7th of last year. Shanghai Copper Inventories are up +657.0% ytd to another new all-time high. My AAPL long's recent parabolic rise, with a flat overall market, was a red flag for the broad market. As well, questions surrounding Greece continue to linger and cds are starting to rise too much again. 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. The Transports continue to lag, which is also a red flag. I suspect the S&P 500 has put in, at the very least, a short-term top. 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. I expect US stocks to trade modestly lower into the close from current levels on rising Eurozone debt angst, rising global growth fears, less financial sector optimism, technical selling, profit-taking, rising energy prices, a key reversal lower in market leader (AAPL) and more shorting.

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