Today's Headlines

Bloomberg:

• Consumer Confidence Falls to Lowest Since April. Confidence among U.S. consumers fell in February to the lowest level in 10 months, a sign that concern about job prospects may hold back the spending needed to sustain the recovery. The Conference Board’s confidence index slumped to 46, below the lowest forecast in a Bloomberg News survey of economists, from 56.5 in January, a report from the New York- based private research group showed today. Stocks fell and Treasuries gained after the confidence report also showed attitudes about current conditions fell to the lowest level in 27 years and the outlook for wages dimmed. The Conference Board’s measure of present conditions decreased to 19.4, the lowest since February 1983, from 25.2. The share of consumers who said jobs are plentiful fell to 3.6 percent from 4.4 percent, according to the Conference Board. The proportion of people who said jobs are hard to get increased to 47.7 percent from 46.5 percent. “The vicissitudes of the political situation in Washington cannot be helping,” said Brian Bethune chief financial economist at IHS Global Insight in Lexington, Massachusetts. “There has been a lot of sizzle on job stimulus proposals but no meat is coming out of the sausage factory. Now the focus seems to be moving back to the health-care reform issue.” The proportion of people who expect their incomes to increase over the next six months declined to 9.5 percent from 11 percent. The share expecting more jobs in the next six months fell to 13.4 percent from 15.8 percent.
• Wall Street Bonuses Rise 17%, N.Y.'s DiNapoli Says. Wall Street bonuses rose 17 percent in 2009 from a year earlier as the securities industry rebounded from the financial crisis, New York State Comptroller Thomas DiNapoli said. Financial firms disbursed $20.3 billion compared with $18.4 billion in 2008, DiNapoli’s office calculated, basing its estimate on personal income-tax collections. It doesn’t include stock options or other types of deferred pay. The bonus pool was the second-largest ever, DiNapoli said in his yearly report.
• Secret AIG(AIG) Document Shows Goldman Sachs(GS) Minted Most Toxic CDOs.
• Greek Bank Credit-Default Swaps Jump After Fitch Ratings Cut. “The banks’ already weakening asset quality and profitability will come under further pressure due to anticipated considerable fiscal adjustments in Greece,” Fitch said in the statement. “The required fiscal tightening that needs to be made by the Greek government will have a significant effect on the real economy, affecting loan demand and putting additional pressure on asset quality.” Swaps on National Bank of Greece rose 36 basis points to 433, Alpha Bank increased 40 to 447 and EFG climbed 42 basis points to 442, according to CMA prices. Contracts on Greek government debt rose 7 basis points to 363, the highest in two weeks, CMA prices show.
• Rio(RTP) Concerned on Metals Demand Outlook in Second Half. Rio Tinto Group, the world’s third- largest mining company, is concerned the removal of government stimulus packages and any slowing of consumer spending may dent demand for metals in the second half. “The big concern is if the Chinese do decide to clamp down on the loans and on the money supply,” he said. “If that happens very fast, then it will almost certainly have a negative effect on the market. Whenever the market sees signals of that about to happen, even if they are the faintest of signals, you see a reaction in commodity prices.”
• Copper Extends Declines After U.S. Consumer Confidence Drops.
• Crude Oil Drops More Than $2 as U.S. Consumer Confidence Falls. “You’re not going to see oil stay above $80 until demand is revived, and demand won’t be revived until people go back to work,” said Michael Fitzpatrick vice president of energy at MF Global in New York. “We’re in a period of structural unemployment, and that’s going to affect oil.”
• German Business Confidence Unexpectedly Declines. German business confidence unexpectedly fell for the first time in 11 months in February as the coldest winter in 14 years damped retail sales and construction. The Ifo Institute in Munich said its business climate index, based on a survey of 7,000 executives, fell to 95.2 from 95.8 in January. Economists expected a gain to 96.1, according to the median of 37 forecasts in a Bloomberg News survey.
• Wyden, Gregg Propose Cutting Top U.S. Corporate Tax Rate to 24%. Two senators proposed a bipartisan overhaul of the tax code that would reduce the top U.S. corporate tax rate to 24 percent from 35 percent in exchange for eliminating special breaks. Oregon Democrat Ron Wyden and New Hampshire Republican Judd Gregg today also proposed creating three tax rates for individuals, topping out at 35 percent. They would repeal the alternative minimum tax and exempt the first 35 percent of capital gains and dividends from taxes. Wyden serves on the tax- writing Finance Committee and Gregg is the top Republican on the Budget Committee.
• Harvard's Rogoff Sees Sovereign Defaults, Painful Austerity. Ballooning debt is likely to force several countries to default and the U.S. to cut spending, according to Harvard University Professor Kenneth Rogoff, who in 2008 predicted the failure of big American banks. Following banking crises, “we usually see a bunch of sovereign defaults, say in a few years,” Rogoff, a former chief economist at the International Monetary Fund, said at a forum in Tokyo yesterday. “I predict we will again.” The U.S. is likely to tighten monetary policy before cutting government spending, sending “shockwaves” through financial markets, Rogoff said in an interview after the speech. “Most countries have reached a point where it would be much wiser to phase out fiscal stimulus,” said Rogoff, who co- wrote a history of financial crises published in 2009. Rogoff, 56, said he expects Greece will eventually be bailed out by the IMF rather than the European Union. Greece will probably announce an austerity program “in a few weeks” that will prompt the EU to provide a bridge loan which won’t be enough to save the country in the long run, he said. “It’s like two people getting married and saying therefore they’re living happily ever after,” said Rogoff. “I don’t think Europe’s going to succeed.” Investors will eventually demand higher interest rates to lend to countries around the world that have accumulated debt, including the U.S., he said.
• U.S. 'Problem' Banks Soar, Lending Drops, FDIC Says. U.S. “problem” banks climbed to the highest level in 17 years, signaling failures may accelerate in 2010, the FDIC said. Bank lending had the biggest retreat in more than six decades. The FDIC included 702 banks with $402.8 billion in assets on the confidential list as of Dec. 31, a 27 percent increase from 552 banks with $345.9 billion in assets at the end of the third quarter, the regulator said today in a quarterly report. “Problem” banks account for 8.7 percent of all U.S. lenders. “The growth in the number and assets of institutions on the problem list points to a likely rise in the number of failures,” FDIC Chairman Shelia Bair said today at a Washington news conference.
• Zazi Pleads Guilty to Al-Qaeda Subway Plot in New York. Najibullah Zazi pleaded guilty to supporting al-Qaeda and conspiring to use a weapon of mass destruction in a plot to detonate bombs on New York subways around the anniversary of the Sept. 11, 2001, terrorist attacks.

Wall Street Journal:

• Intel(INTC) Plans $2B Investment Fund. Intel Corp. is working with venture-capital firms to establish a $2 billion fund that would invest solely in U.S. companies, people familiar with the chip maker's plans said. The move comes a year after Intel said it would invest $7 billion over two years to upgrade capabilities of its U.S. chip factories.
• Dow Jones in Talks to Buy Rest of SmartMoney.
  

CNBC:

• Greenspan: US Recovery Extremely 'Unbalanced.'

NY Times:

• Asia's Boom Conceals Some Darker Prospects.

NY Post:

• Volcker Fooled. The Obama administration is backing off a plan to bar commercial banks from engaging in proprietary trading, favoring instead a watered-down version of a key tenet of the proposed "Volcker rule" governing how banks operate, according to people familiar with the situation. Sources told The Post that instead of issuing an outright ban on prop trading -- or trading done on behalf of only the bank itself -- the White House will propose that federally insured banks keep higher cash reserves if they want to run such trading desks.
  

The Business Insider:

• Even More Than You Realize, Goldman's(GS) Role In Subprime Mirrored Its Role In The .Com Bubble.
• Mass Layoffs Jump in January After 4 Straight Months of Decline.
  

Seeking Alpha:

• Mutual and Hedge Funds Lowering Fees Due to Pressure From ETFs.

City Hall:

• Empty On Funding, ACORN Shutters Around the Country. Phone lines disconnected nationwide, reconstitutes in Brooklyn office as New York Communities for Change. ACORN, one of the largest social advocacy groups in the country, has been forced to suspend most operations as of today. The website was down on Monday morning, but the phone number for ACORN’s New York office was still connected, offering guidance on mortgage payments, first-time home purchases, general housing inquiries and ACORN housing maintenance. An operator was still answering the phones “ACORN, good morning,” and redirecting calls. By noon on Monday, the phone message had been replaced. “ACORN is not providing services in New York, but if you would like to receive information from local organizations with similar purposes, please leave your name, number and mailing address after the beep,” says the woman on the new recording, in both English and Spanish.

The Detroit News:

• Romney Blames UAW, Feds in Book. In his upcoming book, Michigan native and former Republican presidential candidate Mitt Romney blames the United Auto Workers and the federal government for having added a $2,000 "cost disadvantage" to U.S.-made autos that had crippled the Big Three automakers' ability to compete with foreign vehicle makers. In "No Apology: The Case for American Greatness," a copy of which was provided to The Detroit News, Romney calls the "decline of the industry and of the great state of Michigan painful to watch." He adds that restructuring and getting Washington politicians out of "the management of the companies" will lead to a turnaround.

Rasmussen:

• 41% Favor Obama's Health Care Plan, 56% Oppose. Voters still strongly oppose the health care reform plan proposed by President Obama and congressional Democrats and think Congress should focus instead on smaller bills that address problems individually rather than a comprehensive plan. A new Rasmussen Reports national telephone survey finds that 41% of voters favor the proposed health care plan, while 56% oppose it. Those figures include 45% who strongly oppose the plan and just 23% who strongly favor it.
• Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 23% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Forty-two percent (42%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -19 (see trends).

Politico:

• Sens. Susan Collins and Joe Lieberman Want to Cut Money for Khalid Sheikh Mohammed's Trial. Two key senators want to slash funding for civilian terror trials and give the money to the U.S. Coast Guard. Senate Homeland Security Chairman Joe Lieberman (I-Conn.) and Sen. Susan Collins (R-Maine), the panel's top Republican, want to use the $200 million the Obama budget proposes for the controversial civilian trials and use it to restore budget cuts for the Coast Guard. "Since I think terrorist trials should be conducted in a military, rather than a civilian, setting, the proposed $200 million set aside for security at civilian terror trials would be far better spent shoring up the critical operations of the U.S. Coast Guard," Lieberman said in a statement.

USA Today:

• Vatican: Number of Catholics Rising Worldwide. The Vatican says the number of Catholics as a percentage of the worldwide faithful is growing slightly. The Holy See says that from 2007 to 2008 Roman Catholics grew from 17.33% of the global population to 17.4%.

Reuters:

• New Doubts Surface Over AIG's(AIG) $2.2 Bln Nan Shan Deal. American International Group's stalled $2.2 billion sale of its Taiwan unit to a group led by China Strategic faces a new hurdle after Taiwan's regulator sought talks with parliament over the deal, raising the prospect of a chill in the nascent cross-strait M&A market. AIG agreed to sell Nan Shan to China Strategic and Hong Kong-based financial services firm Primus Financial in October, but has not been able to close the deal on concerns in Taiwan the buyers were backed by China-sourced funds.
• Chile's SQM Halts Iodine Mine Due to Demand Slump.
• Europe's Carmakers Says Economy Far From Stable. The European auto industry does not expect a quick recovery this year and warned sales of commercial vehicles that closely follow the economic cycle would "at best be flat" after dropping by one-third in 2009.

Repubblica:

• International Monetary Fund Chief Economist Olivier Blanchard told la Repubblica in an interview that European countries that don't have the option of currency devaluation face an "extremely painful" recovery process. To recover competitiveness, "it's inevitable that there will have to be sacrifices in terms of salaries," Blanchard said.

Xinhua:

• China Stresses Friendly Ties With DPRK As Its "Consistent Policy" President Hu Jintao on Tuesday pledged to push forward China's relations with the Democratic People's Republic of Korea (DPRK), saying cementing friendly ties between the two countries has been a consistent policy of China. "Under the current complicated and changeful international situation, it is in the fundamental interests of the two peoples and also benefits peace, stability and prosperity of the region and the world to further promote friendly exchanges and expand pragmatic cooperation between the two countries," said Hu when meeting with a delegation from the Workers' Party of Korea (WPK) of the DPRK.