Today's Headlines

Bloomberg:

• Greece Pushes Bondholders Into Record Debt Swap. Greece pushed through the biggest sovereign restructuring in history after getting private investors to forgive more than 100 billion euros ($132 billion) of debt, opening the way for a second bailout. Euro-region finance ministers agreed on a conference call that with the swap Greece had met the terms for a 130 billion- euro rescue package designed to prevent a collapse of the economy. Ministers freed up 35.5 billion euros in payments and interest for bondholders, with a decision on the balance of the bailout funds to be made at a March 12 meeting in Brussels. “It would be a big mistake to think we are out of the woods,” German Finance Minister Wolfgang Schaeuble told reporters in Berlin after the call today. “We have a chance of making it. And we have to seize that opportunity.”
• Euro Drops as Greece Forces Investors to Take Part in Debt Swap. The euro weakened for the first time in three days against the dollar after Greece said it triggered an option compelling investors to take part in its debt restructuring, damping demand for the region's assets. The common currency fell versus 11 of its 16 major peers before the International Swaps and Derivatives Association meets to consider a "potential credit event" relating to Greece, following the results of the nation's private-sector involvement plan. "The euro has failed to gather any further support from the Greek news," said Ian Stannard, head of European currency strategy at Morgan Stanley in London. "The market was fully expecting a successful PSI. The rebound we've seen in the euro may be running out of steam."
• European Stocks Post Weekly Drop; Enel, Peugeot, Salzgitter Lead Decline. European stocks fell this week as investors speculated the Stoxx Europe 600 Index’s best start to a year since 1998 has overshot the outlook for the economy. Enel SpA sank to a record low as Italy’s largest utility cut its dividend target to reduce debt. PSA Peugeot Citroen sank 7.8 percent after Europe’s second-biggest carmaker announced a 1 billion-euro ($1.3 billion) rights offer. Salzgitter AG lost 7 percent after the steelmaker said it was“impossible” to provide an earnings forecast. The benchmark Stoxx 600 (SXXP) slid 0.7 percent to 265.44 this week, the biggest drop since Feb. 10.
• Gross Says Bond-Contract Sanctity Is Hurt by Greece's Debt Swap: Tom Keene. The “sanctity” of bondholders’ contracts has been diminished by Greece’s pushing through the biggest sovereign restructuring in history, according to Bill Gross of Pacific Investment Management Co. “The rules have been changed here,” Gross, co-chief investment officer at Pimco, said in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. “The sanctity of their contracts is certainly lessened. Bondholders have that to look forward to going into the future.”
• Greece's New Bonds Yield More Than Portugal's on Growth Concern. Greek government bonds due to be issued after the nation's debt swap is completed were priced at less than 30 percent of face amount, signaling concern the country will struggle to repay its revised obligations. While the debt swap is "a big step forward, it's not totally out of the woods yet," said Mohit Kumar, the head of European fixed-income strategy at Deutsche Bank AG in London. "There is a premium still demanded for Greece." Greece's economy shrank 7.5 percent in the fourth quarter from the same period in 2010, the Athens-based Hellenic Statistical Authority said today. The contraction, based on non- seasonally adjusted data, was wider than a Feb. 14 preliminary estimate of a 7 percent contraction, the authority said. The 2 percent bonds maturing in February 2023 were bid at 25.5 cents on the euro at 4:25 p.m. London time, BNP Paribas SA data on Bloomberg showed. They were offered at 26 cents, according to Jefferies Group Inc. That left the yield on the securities bid at 19.7 percent and offered at 19.42 percent, the data showed. Portuguese securities maturing in October 2023 yielded less than 14 percent.
• Greek Swap is 'Dangerous Precedent,' Wraith Says. (video) John Wraith, a fixed-income strategist at Bank of America Merrill Lynch, talks about the restructuring of Greece's sovereign debt. He speaks with Owen Thomas and Linzie Janis on Bloomberg Television's "Countdown."
• Payrolls in U.S. Climb 227,000; Jobless Rate Holds at 8.3%. The 227,000 increase followed a revised 284,000 gain in January that was bigger than first estimated, Labor Department figures showed today in Washington. The median projection of economists in a Bloomberg News survey called for a 210,000 rise. The jobless rate held at 8.3 percent, even as 476,000 more workers sought employment. The participation rate, which indicates the share of working-age people in the labor force, rose to 63.9 percent from 63.7 percent. Education and health services employment jumped 71,000, the most since September 2006, according the Labor Department. Construction companies reduced payrolls by 13,000 workers last month, the biggest drop since January 2011. Average hourly earnings rose 0.1 percent to $23.31, today’s report showed. The workweek for all employees averaged 34.5 hours for a third consecutive month. The so-called underemployment rate, which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking, decreased to a three-year low of 14.9 percent from 15.1 percent. The report also showed a decrease in long-term unemployed Americans. The number of people without a job for 27 weeks or more fell as a percentage of all jobless, to 42.6 percent from 42.9 percent.
• Harrisburg, Pennsylvania, Set to Default on $5.27 Million GO Bond Payments. Harrisburg, Pennsylvania’s insolvent capital, says it will miss general-obligation bond payments for the first time next week as its receiver seeks approval for a plan to sell assets. The city, whose debt load of more than $300 million is five times its general-fund budget, will miss $5.27 million in general-obligation bond payments due March 15, according to a notice its receiver posted on the Electronic Municipal Market Access system, a database for filings by municipal-debt issuers.
• Gold Bulls Strengthening as Bullion Wagers Reach $131 Billion: Commodities. Gold traders are the most bullish in four months after investors accumulated more metal than ever and hedge funds raised bets on gains to a five-month high. Sixteen of 23 analysts surveyed by Bloomberg expect prices to gain next week and one was neutral, the highest proportion since Nov. 11. Investors increased their holdings in exchange- traded products backed by bullion for seven consecutive weeks and now hold 2,407 metric tons valued at $131 billion, data compiled by Bloomberg show.
• Oil Increases for a Third Day. Oil for April delivery climbed 94 cents, or 0.8 percent, to $107.52 a barrel at 12:41 p.m. on the New York Mercantile Exchange. Prices have advanced 0.8 percent this week and 8.8 percent this year. Brent oil for April settlement gained 35 cents, or 0.3 percent, to $125.79 a barrel on the London-based ICE Futures Europe exchange. Total U.S. fuel demand fell an average 78,000 barrels a day to 18.2 million last week, an Energy Department report on March 7 showed. Consumption was down 7.6 percent from the same week a year earlier.
• China's February New Yuan Loans Were a Lower Than Estimated $113 Billion. China’s new yuan loans were less than estimated in February and money supply growth was below the government’s target, central bank data showed yesterday. Local-currency-denominated loans were 710.7 billion yuan ($113 billion) last month, the People’s Bank of China said in a statement on its website yesterday. That compares with the 750 billion yuan median estimate in a Bloomberg News survey of 26 economists and 738 billion yuan in January. M2, the broadest measure of money supply, expanded 13 percent in February from a year earlier.
• Solar Panel Sales Seen Dropping First Time in Decade, Feeding Glut: Energy. Fewer solar panels will be installed this year as the first drop in more than a decade worsens a glut of the unsold devices that’s already slashed margins at the top five manufacturers, an analyst survey showed. Homes and businesses will put up 24.8 gigawatts of solar panels worldwide, according to the average of six forecasts compiled by Bloomberg News. That’s equal to the power of about 20 nuclear reactors and down 10 percent from the 27.7 gigawatts added last year. Installations have grown 61 percent a year on average since 1999, Bloomberg New Energy Finance estimates. The decline would be the first since Germany began offering premium rates for solar power in 2004, opening the way for mass, utility-scale installations. It will exacerbate price-cutting and a surge in inventories that last year forced Solyndra LLC into bankruptcy, prompted SunPower Corp. to seek a buyout and gutted margins at top manufacturers led by Suntech Power Holdings Co. and First Solar Inc. “Overcapacity has been an overhang for this industry, and with Germany tightening it doesn’t seem like it will ease,” said Amir Rozwadowski, an analyst at Barclays Capital Inc. in New York. “It’s difficult to assess where there’s a significant push-out that would lead to accelerating demand, given the anticipated decline in Europe.” Germany and Italy, the biggest photovoltaic markets, cut subsidies to curtail a boom last year, helping depress prices for panels by more than 50 percent.
• Biggest Shipping Banks Withdraw New Funding, Lender DVB Says. Thirteen of the world’s 19 largest shipping banks stopped new lending to the industry amid an “extreme” vessel surplus that’s cut cash flows and led to vessel seizures, financier DVB Bank SE (DVB) said. The Rotterdam-based transportation lender that’s financing 1,500 vessels through 450 loan agreements is one of six remaining banks funding shipping, Dagfinn Lunde, a member of DVB’s board of managing directors, said at a presentation in London today. As many as 100 were lending to the industry four years ago, he said. Fifteen DVB loans worth $2 billion breached loan-to-value clauses after asset prices fell during the past four years and needed additional cash or security to regain compliance, Lunde said. The bank controls 20 ships, has seized and sold others and is prepared to take over more as rates for vessels “haven’t hit bottom yet,” he said. Lunde didn’t give a total figure for numbers of vessels seized.
• Obama Rallies Support for Health-Care Law Ahead of Supreme Court Case. While Supreme Court justices weigh the fate of the 2010 health-care overhaul late this month, the White House will help coordinate efforts to showcase the law’s most popular provisions outside the court to blunt relentless Republican attacks. Dozens of consumer, church and public health groups plan events including a prayer vigil to rally support for the health- care overhaul as the Supreme Court holds arguments on the measure March 26 to 28. About 100 supporters met at the White House on March 7 to discuss a coordinated response, according to an administration official who declined to speak on the record because he wasn’t authorized to discuss the gathering.
• Buffett's NetJets is Countersued by U.S. for $366 Million in Unpaid Taxes. NetJets Inc., the private-plane company owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/B), was countersued by the U.S. over $366 million in taxes and penalties. NetJets in November sued the U.S., saying the federal government had wrongly imposed taxes, interest and penalties totaling more than $642.7 million. The federal government, in a revised answer and countersuit filed yesterday in federal court in Columbus, rejected NetJets’ claims and alleged that four of the company’s units owe unpaid taxes and penalties. NetJets Aviation Inc. owes more than $302.1 million, and another unit, NetJets International, is liable for $52.9 million, the U.S. said. Executive Jet Management Inc. owes $10 million while NetJets Large Aircraft owes $1.19 million, the U.S. claimed.
  

Fox News:

• Factor Investigation: Ex-Obama Official Running Sandra Fluke. (video) As we reported last night "The Factor" believes that the Sandra Fluke contraception controversy was manufactured to divert attention away from the Obama administration's disastrous decision to force Catholic non-profit organizations to provide insurance coverage for birth control and the morning after pill. That might very well be unconstitutional.
  

CNBC.com:

• Banks Sit on Huge Aluminum Stocks, Collect Rent. New fronts are opening up in Europe and Asia in the battle between banks and trading houses to expand their storage hubs for aluminum, a metal meant for use in manufacturing but increasingly viewed as a store of value.
• Most Wealthy Americans Think US Still in Recession. Wealthier Americans aren't very optimistic about the economic recovery, with a surprising 63 percent saying the US is still in a recession, according to a new poll. Some 55 percent think the economy won’t fully recover until 2013 or later, and 14 percent say the recession won’t end at all.

Zero Hedge:

• Why JPM(JPM) Sees A "Lot More Printing" By The ECB.
• Part Time Workers Celebrate The Recovery With Soaring Gun Purchases.
• Greece - Round III, In Which We Learn That Greek Debt Actually INCREASED Post-Default.
  

New York Times:

• New Republic Gets an Owner Steeped in New Media. The newest owner of The New Republic magazine is Chris Hughes, a new-media guru who co-founded Facebook and helped to run the online organizing machine for Barack Obama’s presidential campaign.

PowerIntelligence:

• BrightSource Hunts For Mega Solar Funding. BrightSource is talking to lenders about securing several hundred million in debt for a large concentrating solar project this year.
  

BoyGenius:

• 'Anonymous' Hackers Lead Norton AntiVirus Source Code. Hackers associated with the group “Anonymous” have published Symantec’s(SYMC) Norton AntiVirus source code on The Pirate Bay. The source code was stolen in 2006 and after alleged attempts to extort money from Symantec failed, the hactivist group released it late Thursday evening.

Rasmussen Reports:

• Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Friday shows that 28% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-four percent (44%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -16 (see trends).

Reuters:

• GE(GE) Sees Slower Revenue Growth in Southeast Asia. With China's growth losing steam from its peak of more than 10 percent, GE is increasingly dependent on a strong performance in Southeast Asia.
• GE's(GE) Immelt Sees Long Period of Unstable Economies. General Electric Co will keep its focus on boosting its dividend and improving margins as it faces what Chief Executive Jeff Immelt expects to be an extended period of economic instability. "We live in what most business commentators call a volatile world. I would argue that when the environment is continuously unstable, it is no longer volatile. Rather, we have entered a new economic era," the head of the largest U.S. conglomerate said in his annual letter to shareholders. "It could remain this way for a long time."
• ISDA Declares Greek Credit Event, CDS Payments Triggered.
  

MailOnline:

• Is This Greek Rescue the Biggest Scam in History or Ponzi Finance 101? Don’t you love Europe? The way it messes with your head. The way really, really bad things somehow get blotted out in so much waffle, double-speak and spin, you start doubting your own instincts. Like, is it you or is it them?
  

Bear Radar

Style Underperformer:

• Large-Cap Value +.39%

Sector Underperformers:

• 1) Gold & Silver -.40% 2) Road & Rail -.17% 3) Energy -.04%

Stocks Falling on Unusual Volume:

• ELP, RCL, CUK, AUY, BODY, HMIN, GMCR, HIBB, MTGE, QCOR, CTRP, EXPE, XRTX, WPPGY, MLNX, SPG, PLL, ISH and HALO
  

Stocks With Unusual Put Option Activity:

• 1) DHI 2) GME 3) SYMC 4) ZION 5) AIG
  

Stocks With Most Negative News Mentions:

• 1) PLL 2) MDT 3) HIBB 4) GM 5) BHI
  

Charts:

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

Bull Radar

Style Outperformer:

• Small-Cap Value +1.58%

Sector Outperformers:

• 1) Homebuilders +2.09% 2) Oil Tankers +1.94% 3) Disk Drives +1.49%

Stocks Rising on Unusual Volume:

• IBN, HNP, CHL, QSFT, TPCG, VOCS, FSLR, MCP, LPS, ANN, COO, DHI, WLT, CLF, USG, HUN, CBT, TOL, LEN, APC, ARO, BECN, MRX, ITB, ZUMZ and INVN
  

Stocks With Unusual Call Option Activity:

• 1) CCL 2) ZION 3) HEK 4) S 5) GMCR
  

Stocks With Most Positive News Mentions:

• 1) DHI 2) CI 3) BA 4) NAV 5) KSS
  

Charts:

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

Friday Watch

Evening Headlines
Bloomberg:

• Investors Agree to Swap About 85% of Greek Debt. Private investors agreed to swap about 85 percent of their Greek government bonds for new securities in the biggest sovereign debt restructuring in history, according to a banker briefed on the results. Preliminary indications showed that as much as 155 billion euros ($205 billion) of the 177 billion euros of Greek-law bonds were offered, said the banker, who declined to be identified. Twelve billion euros of debt not under Greek law was also tendered, as was 7 billion euros of bonds from state-owned companies guaranteed by the government, the banker said.
• Greece's New Bond Yields May Reach 20% After Exchange, Morgan Stanley Says. Yields on Greece’s new bonds may climb to as high as 20 percent amid “material risks” stemming from implementation of terms for the biggest sovereign restructuring in history, according to Morgan Stanley. Traders are offering to buy and sell the potential new bonds at yields on 11-year securities of 22 percent, according to a person familiar with the prices who declined to be identified. Yields on exchanged Greek debt may be about 13 percent to 17 percent “in the medium term” as the nation faces an election and seeks to comply with terms of its bailout and debt-reduction programs, New York-based Morgan Stanley said yesterday in a research report.
• Draghi's Oil Dilemma Risks Exacerbating Recession: Euro Credit. ECB President Mario Draghi is trapped between accelerating inflation and slowing growth, making it hard for him to defend countries such as Italy and Spain from the ravages of recession. The central bank yesterday revised its inflation forecast for the euro area to an average rate of 2.4% this year, up from a December prediction for prices to rise by 2%. The new projections show the economy may contract .1%, down from a previous forecast for .3% growth. With at least six of the 17 euro nations in recession, the latest forecasts may mean Draghi, who cut interest rates at his first two monthly meetings as head of the central bank, won't be able to reduce borrowing costs further as efforts to resuscitate growth by lending unlimited funds to banks lose steam.
  
• China Should Maintain Property Curbs to Prevent Chaos, Developer Lo Says. China should maintain its property curbs as any relaxation may result in a “chaotic” housing market, said billionaire developer Vincent Lo, also a member of the government’s advisory board. Home prices may post a “single-digit” decline this year, said Lo, chairman of Shui On Land Ltd. (272), a Shanghai-based developer. Property values in the nation’s city centers will hold up, he said, adding that he doesn’t expect a property crash this year. “Unless something dramatic happens in the international economy, these more restrictive measures will remain for at least another 18 months,” Lo said. The nation’s developers will probably face more credit rating downgrades over the next six months as refinancing risks increase, according to Standard & Poor’s. Home prices may fall 10 percent by June from a year earlier, according to an S&P report yesterday that said “the worst is yet to come” for developers.
  
• China's Economy a Bigger Worry Than Yuan: Samual Sherraden. Domestic and foreign economic pressures are causing cracks to emerge. Domestically, over-investment and excess capacity weigh on China’s economy. The housing market is deflating and the local-government debt on banks’ balance sheets will limit future fiscal stimulus. Monetary authorities are constrained from further easing for fear of inflation. And China’s major export markets -- the U.S. and Europe -- are facing slow growth at best.
• Texas Instruments Cuts Forecasts on Lower Demand for Its Wireless Products. Texas Instruments Inc. (TXN), the world’s largest maker of analog semiconductors, reduced its first- quarter sales and profit forecasts, citing lower demand for products that let wireless devices connect and run applications. Revenue will be $2.99 billion to $3.11 billion, the Dallas- based company said today in a statement. Analysts on average had estimated $3.16 billion, according to data compiled by Bloomberg. Net income will be 15 cents to 19 cents a share, Texas Instruments said, compared with projections of 21 cents. Texas Instruments is the top supplier of chips that provide key functions in electronic devices ranging from missiles to mobile phones, making the company’s earnings an indicator of demand across the economy. Vice President Ron Slaymaker said the weakness in wireless was in connectivity products and OMAP processors, which run programs in smartphones and tablets. Some clients have cut their expectations for demand and reduced inventory, he said on a conference call. “Everybody in the tablet and handset market will overestimate the success they’re having, then end up eating inventory,” said Cody Acree, an analyst at Williams Financial Group in Dallas. Slaymaker declined to identify which Texas Instruments customers, or how many, had cut back orders.
• 'Anonymous' Hacker Sabu Worked Around the Clock to Aid U.S. Hector Xavier Monsegur, a member of the Anonymous, Internet Feds and LulzSec hacker groups, began working "around the clock" to inform on his colleagues immediately after his arrest, prosecutors told a judge. Monsegur, who pleaded guilty Aug. 15, began cooperating with U.S. authorities, including Federal Bureau of Investigation agents, after he was arrested June 7, Assistant U.S. Attorney James Pastore told U.S. District Judge Loretta Preska at a court hearing in August, an unsealed transcript shows. Monsegur, who used the nickname Sabu and is described as an "influential member" of all three groups, admitted to staging cyber attacks against the websites of the governments of Algeria, Yemen and Zimbabwe, according to a criminal information unsealed March 6. He also said he conducted hacks on Tribune Co. and News Corp.'s Fox television, prosecutors said.
• Oil Rises a Third Day. Oil for April delivery advanced as much as 37 cents to $106.95 a barrel in electronic trading on the New York Mercantile Exchange and was at $106.90 at 1:51 p.m. Sydney time. The contract yesterday climbed 0.4 percent to $106.58, the highest close since March 5. Prices are up 20 cents this week and have gained 8.2 percent this year. Brent oil for April settlement was at $125.50 a barrel, up 6 cents, on the London-based ICE Futures Europe exchange.
• Chinese Politburo Member Signals Wealth Gap Breached Unrest Trigger Point. China’s wealth gap has now exceeded the point that triggers widespread social unrest, according to figures revealed by Politburo member Bo Xilai, in a rare disclosure of the country’s income disparity. China’s Gini coefficient, an index of the income gap, has exceeded 0.46, Bo, the Communist Party Secretary for Chongqing Municipality, told reporters in Beijing today, without giving specifics. The index ranges from 0 to 1 and the 0.4 mark is used as a predictor by analysts for social disturbances. Bo, 62, has reintroduced slogans and songs from the late Chairman Mao Zedong in a bid to re-instill a Communist spirit in a country that still officially adheres to the principles espoused by Karl Marx. So-called mass incidents in China -- strikes, riots and other disturbances -- doubled from 2006 to 2010 as China’s wealth gap rose, according to Sun Liping, a professor at Beijing’s Tsinghua University. China’s Gini coefficient -- and hence its wealth gap -- has risen more than any other Asian economy in the last two decades, according to Murtaza Syed, the International Monetary Fund’s resident representative in Beijing, citing World Bank data. Syed told reporters in Beijing last month that the high wealth gap may hurt China’s long-term growth prospects. “If China becomes more and more unequal, it may find it very hard to keep growing at anywhere near the rates it’s been growing,” Syed said on Feb. 22.

Wall Street Journal:

• CBOE(CBOE) Executive Put on Leave Amid SEC Probe. The largest U.S. options exchange has put its most senior compliance officer on leave in the wake of an investigation by U.S. market regulators into the company's oversight of traders, according to people familiar with the matter.
• Deutsche Bank(DB) Bank Took ECB Loans. Deutsche Bank AG took between €5 billion and €10 billion ($6.6 billion and $13.1 billion) as part of the European Central Bank's lending program last week, according to a person familiar with the matter.
• European Commission Raises Hungary Deficit Forecasts - Agency. A background analysis by the European Commission obtained by Hungarian news website Portfolio.hu late Thursday raised Hungary's budget deficit outlook for 2012 and 2013.
• U.S., Jordan Discuss Securing Syria Cache. Fears Mount Over Suspected Chemical, Biological Weapons. The American and Jordanian militaries are jointly developing plans to secure what is believed to be Syria's vast stockpile of chemical and biological weapons, said U.S. and Arab officials briefed on the discussions. The groundwork comes amid mounting concerns about Damascus's arsenal of nerve agents and mustard gas at a time of growing instability in the country. One plan would call for Jordanian Special Operations units, acting as part of any broader Arab League peacekeeping mission, to go into Syria to secure nearly a dozen sites thought to contain weapons, these officials said.
• BofA(BAC) Makes a Deal on Side. More than 200,000 financially strapped households will have a chance to sharply reduce their mortgage balances under a side deal negotiated by Bank of America Corp. that could allow the bank to avoid as much as $850 million in penalties. Under the arrangement, part of the recent $25 billion settlement of alleged foreclosure abuses between government officials and five large lenders, Bank of America will make deeper and broader cuts in balances than other banks. The plan will offer qualifying borrowers a chance to cut their mortgage balances to their home's current market value.
• IMF Chief: Warns Against 'Shorting' Italy Given Rome's Economic Reforms.
• MF Global Executives Still Set to Get Bonuses. Three top executives of MF Global Holdings Ltd. when it collapsed could get bonuses of as much as several hundred thousand dollars each under a plan by a trustee overseeing the securities firm's bankruptcy case, people familiar with the matter said. Louis Freeh, the former Federal Bureau of Investigation director now in charge of unwinding what is left of the New York company, is expected to ask a bankruptcy-court judge as soon as this month to approve performance-related payouts for the chief operating officer, finance chief and general counsel at MF Global, these people said.
• FBI Traces Trail of Spy Ring to China. Federal agents were searching Walter and Christina Liew's home here last July for evidence of corporate espionage when a safe deposit box key caught their attention. They asked Ms. Liew if she knew where the bank was located. Her husband told her in Chinese to say she didn't, according to an account later given by federal prosecutors. An agent who understood Chinese picked up on the exchange and followed Ms. Liew as she left the house, drove to an Oakland bank and tried to empty a safe deposit box the key fit.
• Exxon(XOM) Rips U.S. Push on Fracking Oversight. Federal efforts to expand oversight of oil and gas drilling are threatening to derail development of U.S. energy without necessarily improving safety, Exxon Mobil Corp. Chief Executive Rex Tillerson said Thursday. The push by the Environmental Protection Agency and a handful of other agencies to have a say in the controversial drilling technique known as hydraulic fracturing, or "fracking," has had little impact so far on energy giant Exxon, Mr. Tillerson said in an interview following the company's analysts meeting in New York on Thursday.
• Spain Tests Europe's Resolve on Devicits. It hasn't taken long for the euro zone's new tough budget rules to face their first big test. Spain's stand-off with Brussels over the size of its 2012 budget deficit has presented officials in the city with a dilemma: How do they preserve the credibility of the tighter fiscal rules without triggering a Greece-style downward economic spiral by forcing Spain to slash its deficit too vigorously? Spanish Prime Minister Mariano Rajoy formally opened the issue last week when he announced that Spain's new budget-deficit target would not be the 4.4% that his predecessor agreed last year with the European Commission in Brussels—but 5.8%. The reason: last year's deficit turned out to be 8.5%-not the 6% target that this year's goal was based on. Hitting the agreed 2012 target would cut domestic demand by four percentage points, further squeezing Spain's already shrinking economy. It wasn't only Mr. Rajoy's unilateral decision that upset the Brussels bureaucracy. It was the way he framed it, telling reporters: "This is a sovereign decision made by Spain that I am announcing now, to you."

MarketWatch:

• Videogame Sales Slide Again in February. Videogame sales fell sharply in February, worse than analysts’ had expected, and making for a third straight month of declines for a sector suffering from a lack of compelling new releases. According to data from NPD Group late Thursday, sales of game software in the U.S. slid by 23% during the month compared to the same period last year. That was an improvement over the stunning 38% drop in January, but still deeper than the 8% to 19% drop modeled by analysts. NPD data only includes sales made through traditional retail outlets and not those made over digital channels.

Business Insider:

• The 'Biggest Surprise' From GE's(GE) Investor Meeting Should Serve As A Warning To All Investors.
• Australian Gold Sales Collapsed.
• Failed UK Rescue Effort Ends In Death Of Two Hostages Held By Nigerian Islamic Terrorists.
• A Brief History of Goldman Sachs(GS), The Most Hated Bank In The World.
  

Zero Hedge:

• US Budget Deficit Hits All Time High In February. (graph)
• Reuters Reports That Hedge Funds Have Found Greek Default Trigger Loophole.
  

CNBC:

• EU Debt Issue to Rile Markets for 'Many More Years'. Wall Street may breathe a sigh of relief with the apparent success of the Greek bond swap, but the European debt issue will continue to rile the markets for “many more years to come.” “Even if we band aid this Greek situation right now, they’re going to default down the road or write down 100 percent of the debt,” said Scott Wren, senior equity strategist at Wells Fargo Advisors. Wren projects that Greece will likely require further bailouts and other European nations such as Portugal and Spain may even jump on the bandwagon. In addition, Wren said he would not be surprised to see the market take a breather in the near-term, following the recent rally and expected slowdown in the global economy this year.
• China Inflation Rate Hits 20-Month Low as Economy Slows. China's annual rate of consumer inflation slowed sharply to a 20-month low of 3.2 percent in February, comfortably within Beijing's 2012 target of 4 percent. "The latest CPI number is mainly because of the dissipation of the Chinese New Year effect. Prices came down after the holiday, especially food prices," said Kevin Lai, economist at Daiwa in Hong Kong.
• Fisker Karma Car Dies in Consumer Reports Testing. A $100,000-plus Fisker Automotive luxury sports car died during Consumer Reports speed testing this week for reasons that are still unknown, leaving the struggling electric car startup with another blow to its image. "It is a little disconcerting that you pay that amount of money for a car and it lasts basically 180 miles before going wrong," David Champion, senior director for the magazine's automotive test center, told Reuters, on Thursday.

IBD:

• Chipotle(CMG) Stock Price Rises on Aggressive Growth Plan.
  

USA Today:

• Gas Prices Must Come Down, Consumers Say. Consumers fretting about soaring gasoline prices say President Obama and Congress must act to keep them from rising further, a Gallup Poll finds. An overwhelming number of consumers — 85% — say Obama and Congress should take "immediate" action to keep a lid on prices. After nearly four weeks of daily price increases, regular gasoline averages $3.76 a gallon nationwide. Industry analysts still expect a $4 top by Memorial Day, although prices could rise to $5 a gallon if escalating tensions in the Middle East disrupt crude oil shipments. At $5, about 30% of those surveyed by Gallup say they would have to make major changes in their lives and significant cutbacks in spending. About 28% say $4 gas would prompt similar changes.

Reuters:

• Starbucks(SBUX) to Sell Single-Serve Coffee Brewers. Starbucks Corp (SBUX.O) said it will launch its own single-cup coffee and espresso drink machine later this year, putting it in direct competition with partner Green Mountain Coffee Roasters Inc (GMCR.O), seller of the popular Keurig home brewers. Shares of Green Mountain plunged as much as 24 percent in after-hours trade, but regained some ground after Starbucks said on a conference call that it would continue to supply Green Mountain with Starbucks-branded single-serve coffee pods called K-cups. Starbucks shares rose 3 percent to $51.87.
• Banks Foreclosing on US Churches in Record Numbers. Banks are foreclosing on America's churches in record numbers as lenders increasingly lose patience with religious facilities that have defaulted on their mortgages, according to new data. The surge in church foreclosures represents a new wave of distressed property seizures triggered by the 2008 financial crash, analysts say, with many banks no longer willing to grant struggling religious organizations forbearance. Since 2010, 270 churches have been sold after defaulting on their loans, with 90 percent of those sales coming after a lender-triggered foreclosure, according to the real estate information company CoStar Group. In 2011, 138 churches were sold by banks, an annual record, with no sign that these religious foreclosures are abating, according to CoStar. That compares to just 24 sales in 2008 and only a handful in the decade before.

Telegraph:

• Legal Skull-Duggery in Greece May Doom Portugal. Europe has ring-fenced Greece's debt crisis for now but its escalating recourse to legal legerdemain has shattered the trust of global bond markets and may ultimately expose Portugal, Spain, and Italy to greater danger. "The rule of law has been treated with contempt," said Marc Ostwald from Monument Securities. "This will lead to litigation for the next ten years. It has become a massive impediment for long-term investors, and people will now be very wary about Portugal."
• Germany's Monetary Doyen Slams ECB's 'Shocking' Balance Sheet. The doyen of German monetarism has denounced the stimulus policies of the European Central Bank as a dangerous leap into the unknown, giving voice to growing misgivings among the German policy elite. Jurgen Stark, the ECB's former chief economist and Germany's board member until two months ago, said the blitz of lending had corrupted collateral standards and risked inflation. "The balance sheet of the euro system isn't just gigantic in size but also shocking in quality," he said. Unlimited lending to banks for three years has pushed the ECB's balance sheet to over €3 trillion (£2.5 trillion), overtaking the US Federal Reserve to become the world's most activist bank.

Shanghai Securities News:

• China Won't Relax Property Curbs Soon. The Chinese government will continue real estate curbs "resolutely" in 2012, citing China's housing minister Jiang Weixin. Jiang is confident in home price drops in tier 1 cities.

Evening Recommendations

• None of note

Night Trading

• Asian equity indices are +.25% to +2.0% on average.
• Asia Ex-Japan Investment Grade CDS Index 156.0 -8.5 basis points.
  
• Asia Pacific Sovereign CDS Index 126.75 -6.75 basis points.
• FTSE-100 futures +.27%.
  
• S&P 500 futures +.09%.
  
• NASDAQ 100 futures +.06%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (ANN)/.08
• (CCL)/-.01
• (HIBB)/.56
• (PNY)/1.20
  

Economic Releases
8:30 am EST

• The Trade Deficit for January is estimated to widen to -$49.0B versus -$48.8B in December.
• The Change in Non-Farm Payrolls for February is estimated at 210K versus 243K in January.
• The Unemployment Rate for February is estimated at 8.3% versus 8.3% in January.
• Average Hourly Earnings for February are estimated to rise +.2% versus a +.2% gain in January.

10:00 am EST

• Wholesale Inventories for January are estimated to rise +.6% versus a +1.0% gain in December..
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The EuroGroup Conference Call on Greece could also impact trading today.
  

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

Stocks Surging into Final Hour on Less Eurozone Debt Angst, More Tech Sector Optimism, Short-Covering, Investor Performance Angst

Broad Market Tone:

• Advance/Decline Line: Substantially Higher
  
• Sector Performance: Almost Every Sector Rising
  
• Volume: Light
  
• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• VIX 17.83 -6.45%
  
• ISE Sentiment Index 114.0 +12.87%
  
• Total Put/Call .91 -5.21%
  
• NYSE Arms .67 -16.25%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 96.10 -.08%
  
• European Financial Sector CDS Index 174.32 -4.07%
  
• Western Europe Sovereign Debt CDS Index 349.82 -.80%
  
• Emerging Market CDS Index 237.02 -3.40%
  
• 2-Year Swap Spread 25.50 -.25 bp
  
• TED Spread 39.75 unch.
  
• 3-Month EUR/USD Cross-Currency Basis Swap -64.0 +.5 bp
  

Economic Gauges:

• 3-Month T-Bill Yield .08% unch.
  
• Yield Curve 171.0 +4 bps
  
• China Import Iron Ore Spot $142.60/Metric Tonne -.28%
  
• Citi US Economic Surprise Index 45.60 -1.3 points
  
• 10-Year TIPS Spread 2.26 +4 bps
  

Overseas Futures:

• Nikkei Futures: Indicating +75 open in Japan
• DAX Futures: Indicating +27 open in Germany

Portfolio:

• Higher: On gains in my Tech, Retail, Medical and Biotech sector longs
  
• Disclosed Trades: Covered all of my (IWM)/(QQQ) hedges and some of my (EEM) short
  
• Market Exposure: Moved to 100% Net Long

Today's Headlines

Bloomberg:

• Greece Restructuring Deadline Looms as Bond Investors Signal Swap Accord. The Greek government’s deadline for the biggest sovereign restructuring in history approached with a majority of investors signaling their readiness to participate in the debt swap. The euro and stocks gained before the offer’s close at 10 p.m. in Athens today as Greek Prime Minister Lucas Papademos told his Cabinet ministers that Greece had made “an appropriate framework with significant incentives” for bondholders. “For this reason I look forward to the maximum possible participation of the private sector,” Papademos said, according to an e-mailed transcript of his comments. Finance Minister Evangelos Venizelos told Parliament that “a historic process will be completed tonight,” and the results announced tomorrow.
• Draghi Lays Groundwork for ECB Stimulus Exit as Inflation Takes Spotlight. European Central Bank President Mario Draghi signaled he’s done enough to battle the sovereign debt crisis, laying the groundwork for an eventual exit from record-low interest rates and emergency lending measures. Declaring that the environment “has improved enormously” and there are “many signs of returning confidence in the euro,” Draghi turned the spotlight instead on “upside risks” to inflation, which is now forecast to remain above the ECB’s 2 percent limit this year. That suggests policy makers don’t plan to cut rates further or add to their 1 trillion euros ($1.32 trillion) of long-term loans to banks, economists said.
• Greek Swap Seen Provoking Aftershocks on Borrowing: Euro Credit. Greece’s day of reckoning with bondholders dawns with economists from Barclays Capital to Deutsche Bank AG concerned that the world’s largest debt restructuring will provoke aftershocks. Eight months of negotiations reach a head with today’s deadline for private creditors to accept a bond swap aimed at writing off 106 billion euros ($140 billion) of Greek debt. The government vows to bind holdouts to the deal should participation fall short of its target. Possible repercussions include a surge in borrowing costs for other indebted nations as investors refuse to lend to countries that may follow suit in imposing losses on bondholders. The accord may also trigger derivatives designed to insure against default, and may not be enough to prevent Greece from reneging on its debts in the coming years. “We have to be on alert for all kinds of potential risks surrounding this,” said Julian Callow, head of international and European economics at Barclays Capital in London. “We are in such unknown territory here by the sovereign debt standards of advanced economies that we have to pay attention.”
  
• Citigroup European Debt Chief Says Greek Euro-Exit Risk Remains. Greece risks being forced to exit the euro even with private investors agreeing to the biggest sovereign-debt restructuring in history, said Citigroup Inc. (C)’s head of European government-bond trading. “The private-sector involvement will be no panacea for Greece and unlikely to lead to debt sustainability,” Zoeb Sachee said in an e-mailed response to questions. New Greek bonds received in exchange for existing securities will probably trade between 22 percent and 27 percent of face value depending on their maturities, Sachee said. That would reflect the risk of “further PSI or default,” or a “euro-zone exit,” he said.
• Mersch at ECB Would Back German Criticism, Sueddeutsche Says. Yves Mersch is the top candidate to succeed Jose Manuel Gonzalez-Paramo on the management board of the ECB, as he is backed by Germany, France, and smaller European nations including Finland, Austria, and the Netherlands. Naming Mersch to the post would mean backing for criticism voiced by Bundesbank chief Jens Weidmann that the ECB too carelessly handed hundreds of billions of euros to ailing nations while accepting dubious guarantees in return, the newspaper said.
• Sovereign, Corporate Bond Risk Falls Before Greek Debt Exchange. The cost of insuring against default on European sovereign and corporate debt fell as Greece moved closer to completing its debt swap. The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 governments dropped 5 basis points to 349 at 1 p.m. in London. The Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings fell 7 basis points to 581, according to JPMorgan Chase & Co. A decline signals improved perceptions of credit quality. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings was down two at 133 basis points. The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers declined one basis point to 214 and the subordinated gauge was two lower at 356.5.
• Household Net Worth Rises For First Time in 3 Quarters. Household wealth in the U.S. climbed from October through December for the first time in three quarters as an increase in stock prices outstripped a decline in home values. Net worth for households and non-profit groups increased by $1.19 trillion in the fourth quarter from the previous three months to $58.5 trillion, the Federal Reserve said today in its flow of funds report from Washington. Housing wealth decreased by the most in more than a year. The value of household real estate fell by $367.4 billion, the first decrease in three quarters. Owners’ equity as a share of total household real-estate holdings dropped to 38.4 percent last quarter from 38.9 percent. Mortgage borrowing decreased at a 1.5 percent pace, the 11th consecutive drop. Other forms of consumer credit, including auto and student loans, climbed at a 6.9 percent pace, the biggest gain in at least seven years. Total non-financial debt climbed at a 4.9 percent annual pace last quarter, led by a 13 percent increase by the federal government and a 4.6 percent gain among businesses. State and local government borrowing dropped at a 1 percent pace.
• Crude Oil Rises a Second Day on Signs Sanctions Are Cutting Iran Exports. Oil rose for a second day in New York on signs that sanctions on Iran are succeeding in cutting the nation’s crude exports. Futures climbed as much as 0.9 percent, adding to yesterday’s 1.4 percent increase. U.S. lawmakers proposed new measures against Iran’s nuclear program, while Barclays Capital said shipments from the Persian Gulf nation have dropped by 300,000 to 400,000 barrels a day. Oil for April delivery gained as much as $1 to $107.16 a barrel in electronic trading on the New York Mercantile Exchange and was at $106.76 at 12:56 p.m. London time. Prices are 8 percent higher this year. Brent oil for April settlement was at $125.16, up $1.04 on the London-based ICE Futures Europe exchange.
• Oil Rallies More From Dollar Outlook Than Iran: Chart of the Day. Higher oil prices may have more to do with the dollar's outlook than with tensions related to Iran's nuclear program, according to Jack Ablin, chief investment officer at Harris Private Bank. Yesterday's price of $106.16 a barrel for deliveries next month of West Texas Intermediate, the benchmark U.S. crude, was .063 times the price of April gold futures. The ratio was less than the monthly average of .071 since 1985, according to Bloomberg. The relatively low number shows oil is rising "on the prospect of a debased dollar" as the Federal Reserve seeks to bolster real-estate and stock prices, Ablin wrote. Higher costs for crude "are a by-product of one of the Fed's intended consequences: asset inflation."
  
• Gold Futures Advance as Greek Rescue Spurs Demand for Dollar Alternative. Gold rose for a second day on signs that investors are buying the precious metal as an alternative to a slumping dollar. The U.S. currency fell for a second day against the euro as Greece moved closer to completing its debt swap. European Central Bank President Mario Draghi said inflation will probably breach the bank’s 2 percent limit this year even as the economy stalls.
• Airline Passenger Growth Limited by Economy Until 2015, FAA Says. A sluggish economy and higher fuel prices will hold down airline growth until 2015, according to a U.S. Federal Aviation Administration forecast.
• Obama Lobbies Senate Dems to Head Off Keystone Pipeline Amendment. President Barack Obama, seeking to head off an election-year showdown over energy policy, has been calling wavering Senate Democrats to lobby against a Republican measure that would force approval of the Keystone XL oil pipeline from Canada. With a vote coming as soon as today, the president has made personal appeals to Democrats from Midwestern states, where many of the jobs would be created by building TransCanada Corp. (TRP)’s pipeline from Canada’s oil sands to refineries on the U.S. Gulf Coast, according to a Senate Democratic aide, who spoke on condition of anonymity to discuss the private conversations. White House press secretary Jay Carney confirmed Obama’s calls while declining to identify who was targeted by the effort.
• Ayatollah Khamenei Says Obama's Iran Comments Are 'Good Words'. Iran's Supreme Leader Ayatollah Ali Khamenei said President Barack Obama's comments that there is room for diplomacy in the international community's standoff with Iran are "good words."
• Obama Faces Swing State Anger Over Gas Prices. Voters in some U.S. swing states are feeling the pinch of rising gasoline prices more than those in states that tend to vote Democrat, posing a challenge to President Barack Obama’s re-election, according to a report. Gasoline in Florida, Michigan, Nevada and Pennsylvania costs more than the national average of $3.76 a gallon, Trevor Houser, a partner at the New York-based policy analysis firm Rhodium Group, said yesterday in a report. Consumers in Iowa, New Mexico and Ohio spend more on gasoline as a percentage of their personal income than the national average.
• Jobless Claims in U.S. Rose 8,000 Last Week. The number of Americans filing claims for jobless benefits rose to 362,000 last week, a level consistent with an improving labor market. Applications for unemployment insurance payments increased by 8,000 in the week ended March 3, Labor Department figures showed today. Economists forecast 352,000 claims, according to the median estimate in a Bloomberg News survey. The average over the past four weeks held close to a four-year low.

Wall Street Journal:

• Goldman(GS) Begins Hedge Fund Wind-Down. Goldman Sachs began this month unwinding its investments in hedge funds to comply with the Volcker Rule’s ban on banks holding more than 3% of the assets of any single fund. The process will take more than two years. It will redeem up to 10% of its stakes in certain hedge funds each quarter over ten consecutive quarters, starting in March 2012 and ending in June 2014.

CNBC.com:

• Jobs Report: Warm Winter May Boost February Number.
• S&P: China Developers Close to 'Downgrade Thresholds'.
• Apple's(AAPL) New iPad Is 'Pretty Much a Home Run': Analyst.
  

Business Insider:

• US Soldier in Afghanistan Says It's Outrageous That Obama Apologized For Koran Burnings. Several U.S. soldiers have been killed. And on Monday, a suicide bomber blew himself up at the entrance of Bagram Airfield in retaliation for the incineration of Islam's holy book. "The insurgents used the Koran to write jihadists messages to pass to others. In doing so, they violated their own cultural practice and defiled the Koran." The holy books were confiscated from a U.S. prison, Parwan Detention Center at Bagram Airfield, after they were discovered to contain extremist messages and were mistakenly taken out with the office trash. Sgt. Shively continued, "The insurgents turned the Koran into contraband. Therefore it’s ridiculous that we would even consider apologizing.”
• Here's Apple's(AAPL) First Ad For The New iPad. (video)
  

Zero Hedge:

• Presenting Europe's Schizophrenia Post LTRO. (graphs)
• Greek "Fresh Start" Bonds Face Immediate 80% Loss, 98% Probability Of Redefault.

Forbes:

• Americans Love McDonald's(MCD) But Overseas Growth Is Slowing. McDonald's overseas sales growth slowed last month. Americans though couldn’t get enough of the Golden Arches. The growth slip was most noticeable in Asia, the Middle East and Africa, where comparable store sales growth fell by 1.6%. Weak consumer demand in Japan and the Chinese lunar New Year hampered efforts there, the company said today. European sales growth suffered too, falling by 0.9%. The emerging markets decline are likely the most troubling factor for investors. Emerging markets are largely seen as a potential gold mine for all retailers—especially so for low-cost food chains that can easily appeal to rapidly expanding populations.

TreasuryDirect:

• US Taxpayers Spent $454Billion+ Just on Debt Interest in 2011.

TheStreet.com:

• Big Banks Bleed Best and Brightest to Hedge Funds. While the Volcker Rule hasn't yet been implemented, buy-side analysts, traders and investment managers are already leaving the big banks to strike out on their own.

Reuters:

• Egypt Parliament to Reject Govt in Vote - Muslim Brotherhood. The Egyptian parliament is likely to declare it has lost confidence in the government of Prime Minister Kamal al-Ganzouri via a formal vote, Muslim Brotherhood leaders said on Thursday, a move that will add to pressure on the ruling military council to appoint a cabinet led by the group. Emboldened by its success in parliamentary elections, the once-banned Brotherhood has become more critical of the Ganzouri cabinet which is set to govern until the end of June according to a timetable drawn up by the ruling generals.

AP:

• Homeless Household Levels Up by 14%. The number of households classed as homeless increased by 14% last year, Government figures have revealed. Some 48,510 applications for homelessness assistance were approved by councils, up from 42,390 in 2010. Among them were 69,460 children or unborn babies, the statistics from the Department for Communities and Local Government showed. Leslie Morphy, chief executive of homeless charity Crisis, said: "Our worst fears are coming to pass.

Cinco Dias:

• Most Spanish regions consider it will be impossible to meet the budget deficit targets set for this year by the central government of Prime Minister Mariano Rajoy, citing private conversations with officials.

The Australian:

• US Offers Israel Bombs To "delay" Iran Attack. THE US offered Israel advanced weaponry in return for it committing not to attack Iran's nuclear facilities this year, according to an Israeli report last night. Citing unnamed Western diplomats and intelligence sources, the report in the Maariv daily said that during Prime Minister Benjamin Netanyahu's visit to Washington this week, the US administration offered to supply Israel with advanced bunker-busting bombs and long-range refuelling planes. In return, Israel would agree to put off a possible attack on Iran until next year, after the US elections in November. The issue of Iran was top of the agenda at talks between Mr Netanyahu and US President Barack Obama in Washington this week.

Tencent:

• China should raise tolerance for small- and medium-sized companies' non-performing loans to about 5%, citing Yang Ziqiang, governor of China's central bank's Jinan branch.

Securities Times:

• Home prices in China's seven or eight major cities must decline, citing Housing Minister Jiang Weixin. If home prices rise further at current rates and the property market bubble bursts, the impact on the economy will be "very large," Jiang said.