Today's Headlines

Bloomberg:

• Hollande Urges Euro Rate Target, Sparring With Germany, ECB. French President Francois Hollande called for government leaders to steer the euro’s exchange rate, becoming the most powerful European official to warn that the rising currency may deepen the recession. Hollande broke with Germany’s hands-off policy on exchange rates and set up a potential clash with the European Central Bank by saying the euro area has to use the currency as an export-promoting tool just like the U.S. and China. 
• Goldman Sachs(GS) Asset Management Chairman O’Neill to Retire.

Wall Street Journal:

• China Takes a Big Bat to Income Gap. China unveiled sweeping policy guidelines to close the growing gap between rich and poor, vowing to turn over more of the profits of state-owned companies to pay for ambitious welfare programs and to take other steps to root out corruption and provide for the needy. In a policy statement filled with populist rhetoric about the need for greater equality, China's State Council, or cabinet, pledged to boost the social safety net and then took aim at the nation's powerful state corporations, effectively warning them they would have to shoulder some of that extra cost. "Narrowing the income gap is essential for ensuring social justice and social harmony," the State Council said in a statement posted on the central government website on Tuesday. "We need to raise income levels of the poor and adjust taxes on the excessively wealthy," it said.
• Dell(DELL) to Sell Itself for $24.4 Billion. Dell Inc. on Tuesday said it reached a deal to take itself private, in a $24.4 billion buyout that marks an unofficial end to the era when a handful of young entrepreneurs made PCs the dominant computing device.

MarketWatch.com: 

• 5 tax breaks on the chopping block.

Fox News: 

• North Korea video shows New York in ruins after missile attack. (video)

CNBC: 

• Sucker Alert? Insider Selling Surges After Dow 14,000. Insiders have been pulling out of stocks just as small investors are getting in. Selling by corporate executives has surged recently as the Dow Jones Industrial Average hit 14,000 and retail investors flooded into stocks. The amount of insider selling has usually preceded market selloffs. "In almost perfect coordination with an equity market that was rushing toward new all-time highs, insider sentiment has weakened sharply — falling to its lowest level since late March 2012," wrote David Coleman of the Vickers Weekly Insider report, one of the longest researchers of executive buying and selling on Wall Street. "Insiders are waving the cautionary flag in an increasingly aggressive manner." There have been more than nine insider sales for every one buy over the past week among NYSE stocks, according to Vickers. The last time executives sold their company's stock this aggressively was in early 2012, just before the S&P 500 went on to correct by 10 percent to its low for the year.
• 'Severe' Danger Looming In Corporate Bonds: BofA(BAC). A jump in interest rates could spark an unruly exit from the $12 trillion corporate bond market, according to a new analysis. Investors have been flocking to the relative safety of corporate and government debt while interest rates have stayed low and stock market tensions have run high.
• Housing Market Already Shows Signs of a New Bubble.  
• CBO: Budget Deficit Estimate Drops Below $1 Trillion. The Congressional Budget Office analysis said the government will run a $845 billion deficit this year, a modest improvement compared with last year's $1.1 trillion shortfall but still enough red ink to require the government to borrow 24 cents of every dollar it spends.The agency projected that the economy will grow just 1.4 percent this year if $85 billion in across-the-board spending cuts take effect as scheduled March 1. Unemployment would average 8 percent.
• Probe of S&P 'Intensified' After US Downgrade: Lawyer. Floyd Abrams, the lead attorney for Standard & Poor's, told CNBC Tuesday that "the intensity of the investigation" into the agency's bond ratings "significantly increased" after S&P downgraded the U.S. government's credit rating in 2011.

Zero Hedge: 

• Chinese Warship Prepared To Fire At Japanese Destroyer Last Week. 
• Service ISM Declines, Beats Modestly As New Orders Drop; Respondents Complain About Obamacare. (graph) 
• Eric Holder Holds One Half Of US Rating Agencies Accountable For Financial Crisis. 
• Is The Global Recovery Self-Sustaining?
• Mariano Rajoy's Mindblowing Defense: "It Is All Untrue, Except For Some Things".

Business Insider:

• Noumra's BOB JANJUAH: The First Half Of My Stock Market Doom Prediction Has Already Come True.
• A Banking Scandal And One Of The Best Soccer Players In The World Could Domino Into Europe's Worst Nightmare. 
• Even The Savviest Finance Folk Have Never Heard Of This $17 Trillion Credit Market. 
• CITI(C): Cracks Are Starting To Appear In Europe, And One Market Is Particularly Concerning.
• Massive Spanish Corruption Scandals Gets Weirder With Claims Of Forgery And Half-Truths. 
• Joe Scarborough Blasts 'Terrifying' Drone Memo: 'If George Bush Had Done This, It Would Have Been Stopped'.

Minyanville:

• China's Credit Crunch Is Killing Exporters. A sign reading "Dongguan City People's Court" is taped over a shuttered factory, one of many in the once-thriving export hub.

Washington Post:

• Obama calls on Congress to pass spending cuts, tax changes to delay sequester. President Obama on Tuesday called on Congress to pass a small package of spending cuts and tax changes to delay the start of deep reductions in domestic and defense set for next month.

RealClearPolitics: 

• Health Care and the Debt Deal. When Obamacare was passed, its supporters insisted the law would “bend the cost curve down” and “reduce the deficit.” Today, reality has set in. The Congressional Budget Office estimates Obamacare will add almost $1.6 trillion in new spending over the next 10 years. It obligates an estimated $1 trillion for subsidies to individuals for purchasing coverage through the government exchanges and $644 billion for states agreeing to expand their Medicaid programs. To help pay for the new entitlements, it takes over $700 billion out of an “old” one—Medicare, a program already teetering on the brink of insolvency. It also relies on unsound and unreliable savings, shifty Washington budget gimmicks, and imposes over $800 billion in new penalties and taxes that affect all Americans.

Reuters:

• MasterCard(MA) doubles dividend, to buy back $2 billion of shares. MasterCard Inc (MA.N) doubled its quarterly cash dividend and said it would buy back up to $2 billion of its Class A shares, days after the card payment network reported strong fourth- quarter results helped by its performance in emerging markets. 
• Petrobras(PBR) cuts dividends to keep up investment. The worst annual result in eight years at Brazil's state-led oil company Petrobras prompted it to cut the common-share dividend as it sought to preserve cash to maintain investments as fuel and refining losses mount, executives said on Tuesday. Common shares of Petroleo Brasileiro SA slumped as much as 8.8 percent on Tuesday in Sao Paulo, reaching their lowest level since late 2005.
• TEXT-Fitch revises Netherlands outlook to negative, affirms at 'AAA'. 
• METALS-Copper slips on European political concerns. 
• EURO GOVT-Spain and Italy rebound but rocky road lies ahead.
• Global business expansion weakened in Jan -PMIs. The global economy continued to expand at the start of the year but business activity grew at a weaker pace than in December as growth rates in the United States fell, a business survey showed on Tuesday. The Global Total Output index, produced by JPMorgan with research and supply management organisations, fell to 53.3 in January from December's nine-month high of 53.7.

Telegraph:

• Hollande warns Cameron not to hijack EU Summit. French President Francois Hollande has warned David Cameron not to hijack this week's European Union summit with excessive demands on cuts in the EU budget while refusing to make concessions.
• Where's your positive contagion now, Mr Draghi? Euroland remains confident that the positive contagion from improving market conditions will soon bear fruit in stronger economic data. And this despite the fact that unlike the US and Britain, Europe's banks are only just beginning their deleveraging cycle. Pigs might fly, I suppose.

Xinhua:

• China TV Watchdog Cuts Ads Suggesting 'Gift Giving'. State Administration of Radio, Film and Television issues order to all radio, TV channels in line with government campaign for "frugal and low-key" living, citing SARFT circular, spokesman for the government agency. Some ads have encouraged giving of gifts such as luxury watches, rare stamps and gold coins. These ads have created "bad social ethos".