Today's Headlines

Bloomberg:       

• Germany Rejects Loan Request Saying Greece Must Meet Conditions. (video)
  Germany rebuffed Greece’s request for an extension of its aid program as euro-area finance ministers prepare to meet to avert a cash crunch for the region’s most-indebted nation. The Greek proposal “doesn’t meet the criteria agreed upon in the Eurogroup on Monday,” German Finance Ministry spokesman Martin Jaeger said in an e-mailed statement. “In truth, it aims at bridge financing without meeting the requirements” of the rescue program. European Commission Spokesman Margaritis Schinas moments earlier had said the Greek letter could be the basis for a “reasonable compromise.”  
• Ukraine Rebels Thirst for Territory After Debaltseve. This is what a cease-fire looks like in eastern Ukraine: Vuhlehirsk, a village seven kilometers from the disputed town of Debaltseve, was redolent with acrid smoke Wednesday, constantly shaken by the deep thunder of tanks and artillery cannons as separatists fired on Ukrainian positions. Along much of the front line, both sides have largely observed the truce agreed to last week in Minsk, Belarus. But around the strategic rail hub of Debaltseve the rebels pushed the advantage that they had gained from weeks of shelling government forces. On Wednesday, thousands of battle-weary Ukrainian troops withdrew from Debaltseve -- leaving rebels thirsting for more territory, cease-fire or not. “We must kill them all now,” said Evgeny, a fighter from Donetsk nicknamed Boroda, or Beard. “Just a perfect day!”
• Obama Realized Too Late Putin's Return Would Undermine the Reset. The fractured relationship between U.S. President Barack Obama and Russian leader Vladimir Putin has reached a critical juncture in the conflict over Ukraine, with ties between the two nations more strained than at any time since the Cold War. Russia’s annexation of Crimea last year and its support for separatists in Ukraine’s east have soured Obama on Putin and prompted U.S.-led sanctions that have helped push Russia’s economy toward recession. The confrontation “will continue and could escalate pretty easily,” said Fiona Hill, a senior fellow at the Brookings Institution in Washington and author of “Mr. Putin: Operative in the Kremlin.” The standoff between Obama and Putin complicates efforts to defuse the Ukrainian conflict, and German Chancellor Angela Merkel has taken the lead. The U.S. also needs Russia’s help in the Iranian nuclear talks and in trying to thwart Islamic State in the Middle East. It wasn’t long ago that Obama took a different view, beginning his presidency by offering Russia a “reset” and new era of cooperation. These days, he fulminates that Putin views the world through a “Cold War lens” of the past.
• Greeks Backing Tsipras With Votes But Not Cash. Greek voters gave Alexis Tsipras’s Syriza party a mandate to force a new deal from the rest of the euro area. Without the backing of savers, he’ll struggle to deliver. As their prime minister went toe-to-toe with the German government over the terms of a new aid package, Greeks yanked their cash from the banking system, some delayed tax payments and, by putting off spending and investing in the run-up to the election, they tipped the economy back toward recession. The financial squeeze leaves Tsipras little room to maneuver in the face of German demands.  
• ECB Said to Push Greek Banks to Shed State Debt If Talks Fail. The European Central Bank intends to tell Greek banks to reduce their holdings of state debt if talks over the country’s finances break down, three people familiar with the discussions said. The ECB’s Supervisory Board, in charge of bank oversight across the euro area since November, is concerned that Greek lenders will be saddled with illiquid assets from a government heading for default. The board’s actions are contingent on progress at a meeting of euro-area finance ministers that starts on Friday, the people said, asking not to be named as the matter is private. An ECB spokesman declined to comment.
• Iran Wields Power From Syria to Gulf as Rise Alarms Sunni Rivals. The commander of the foreign wing of Iran’s Revolutionary Guards was upbeat as he addressed a rally marking the 36th anniversary of the uprising that ushered in theocratic rule. “We are witnessing the export of the Islamic revolution throughout the region,” Qassem Suleimani, the increasingly public head of the elite Quds Force, said last week. “From Bahrain and Iraq to Syria, Yemen and North Africa.”  
• European Stocks Extend Seven-Year High Amid Greek Negotiations. European stocks extended a seven-year high amid optimism Greece will reach a deal with euro-area creditors. The Stoxx Europe 600 Index added 0.3 percent to 381.41 at the close of trading. It climbed as much as 0.4 percent intraday after the European Commission said Greece’s request for an extension of loan facilities could pave the way for compromise. It then traded little changed as Germany rejected the plan.
• Options Traders Shore Up Defenses Against Oil Rebound Ending. Options traders are betting that oil’s rebound from a six-year low won’t last. The 17 percent gain from late January has spurred investors to buy options that protect against a drop in prices. Contracts that give the owner the right to sell U.S. crude futures are the most expensive relative to those offering the right to buy in data going back to 2010, according to data compiled by Bloomberg. The rebound will reverse because rising U.S. production is deepening the global supply glut, according to analysts at UBS Group AG, Bank of America Corp. and Commerzbank AG, who are forecasting Brent will drop to $45 or lower in the next three months.
• Tax on Sugary Foods Proposed by U.S. Panel to Fight Obesity. Americans should pay taxes on sugary sodas and snacks as a way to cut down on sweets, though they no longer need to worry about cholesterol, according to scientists helping to revamp dietary guidelines as U.S. obesity levels surge. The recommendations Thursday from the Dietary Guidelines Advisory Committee also call for Americans to reduce meat consumption and to take sustainability into account when dining.

ZeroHedge: 

• How Germany Is Blowing Up The European Union.
• Greek Deposit Run Accelerates Ahead Of Monday's Bank Holiday.
• Spain And Italy Bonds Are Pricing In "Anti-Contagion". (graph)
• Germany Slams Greek Bailout Extension Proposal As "Trojan Horse" - Full Text.
• It's Official: Global Economy Back In Contraction For First Time Since 2012 According To Goldman. (graph)
• Biggest Nordic Buyout Fund Sees "Asset Bubbles Wherever We Look".
• EIA Crude Inventories & Production Surge To Record Highs. (graph)
• Philly Fed Down 3rd Month In A Row, "Hope" Plunges Most Since Lehman. (graph)
• Caterpillar(CAT) Suffers Worst Month Since Lehman, 26 Consecutive Months Of Declining Retail Sales. (graph)
• Ukraine Fighting Shifts To Mariupol Whose Capture Would Grant Russian Land Corridor To Crimea.
• Walmart Slides After Cutting Sales Growth Guidance, Blames Strong Dollar.
• Texas Initial Jobless Claims Surge Higher As Continuing Claims Jump Most In 2015. (graph)

Frankfurter Allgemeine Zeitung:

• ECB, Regulators Said to Prefer Greek Capital Controls. ECB Governing Council and bank regulators would "feel better" if Greece introduced capital controls to prevent banks hemorrhaging, citing central bank sources.

Handelsblatt:

• El-Erian Says Push to Weaken FX Is Unsustainable. The trend for central banks to actively weaken their currencies is not sustainable, Allianz's Mohamed El-Erian said. Efforts may continue as long as the U.S. accepts "drastically strengthening" of USD, and as long as markets are willing to ignore fundamental economic data when pricing risks.

Kathimerini:

• ECB Rejected Greek Request for Additional T-Bills. Greek deposit outflows reached EU21b since Oct., withdrawals on Feb. 17 were EU800m, Kathimerini reports. Bank of Greece had asked for additional Emergency Liquidity Assistance of EU10b, ECB only approved EU3.3b.