The crisis of confidence in Greece’s ability to tame its budget deficit deepened yesterday as Greek government sources confirmed that European Union inspectors now in Athens expect the country to miss its targets for deficit reduction.

Surrounded by more mass protests against the Papandreou government’s austerity programme, EU officials believe that Greece’s contracting economy and rising debt costs will make it difficult for Greece to meet its obligations, according to Greek sources. It must roll over €25bn (£22bn) of debt in April and May.

George Papandreou was, in effect, placed out “on report” by fellow EU leaders at their last summit in Brussels, and he will be required to report monthly on his country’s progress. Such tight supervision is being demanded as the price for maintaining Greek membership of the euro and averting a potentially fatal crisis in the eurozone.

“Negotiations are continuing because they see a big slippage in targets,” commented the Greek official.

Read More: – By Sean O’Grady, Businessweek

Stock prices will finish 2010 somewhat lower than where they began this year, says investment guru Marc Faber.

Faber told investors to buy stocks in March of last year, right when the Standard & Poor’s 500 Index reached its lowest level since 1996.

Since then, the S&P 500 rallied more than 60 percent and the Dow Jones Industrial Average gained 59 percent thanks to government stimulus programs.

Now it’s time to sell, Faber says.

“I would look at the market to close probably a bit lower than it started the year in 2010,” says Faber, according to Bloomberg.

“Equally, I don’t think we have a huge downside risk. If the Dow and the S&P dropped, say 15 to 20 percent, in other words the S&P towards 900, I think there would be more stimulus and more quantitative easing.”

Read More: – By Forrest Jones, Moneynews

The U.S. housing sector encountered another cold front on the road to recovery, as existing home sales tumbled 7.2% to a 5.05 million-unit annualized rate in January, the National Association of Realtors announced Friday.

A Bloomberg News economists’ survey had expected the measure to rise to a 5.50 million annualized rate, after hitting 5.45 million in December.

However, on a year-over-year basis, existing home sales are still up 11.5% from the 4.53 million rate recorded in January 2009. But investors should keep in mind that the comparison is made against a very low base, which makes it easier to achieve higher monthly sales gains.

The home inventory story was mixed in January. Existing homes for sale actually fell 0.5%, but because of the lower sales pace that translates to an increase in supply, which rose to a 7.8-months worth of homes, up from December’s 7.2-month supply and November’s 6.5-month supply. Economists say a healthy, normal market has a three- to five-month supply of homes available for sale.

Read More: – By Joseph Lazzaro, Daily Finance

This was a week investors would probably rather forget. True, the Dow held on to the psychologically significant 10,000 level, but new home sales, existing home sales, and durable goods orders data all underperformed, and the consumer sentiment index dipped — unexpectedly edging about one point lower to 73.6 in February, the Reuters/University of Michigan Surveys of Consumers said.

Economists surveyed by Bloomberg News had expected the index to decline slightly less, to 73.7, following January’s 74.7 reading. The index was at 72.5 in December, 66.0 in November, and 70.6 in October. The index hit a cycle low of 55.3 in November 2008; its record low of 51.7 was set in May 1980.

Meanwhile, the forward-looking index of consumer expectations fell to 68.4 in February from 70.1 in January, while the current conditions index rose to 81.8 in February from 81.1 in January, Reuters reported. The expectations for inflation one year out fell to 2.7% in February from 2.8% in January, and the five-to-10-year inflation expectations fell to 2.7% in February from 2.9% in January.

Read More: – By Joseph Lazzaro, Daily Finance

New orders for long-lasting U.S. manufactured goods excluding transportation unexpectedly fell in January, while the number of workers filing for jobless benefits rose last week, suggesting a loss of momentum in the pace of economic recovery.

The Commerce Department said on Thursday orders excluding transportation fell 0.6 percent last month after increasing 2.0 percent in December. That was below market expectations for a 1.0 percent rise.

However, overall orders jumped 3.0 percent, the biggest gain since July, as aircraft bookings soared. That was well above market expectations for a 1.5 percent rise. Orders increased 1.9 percent in December.

Separately, initial claims for unemployment benefits rose 22,000 to 496,000 last week, the Labor Department said.

Analysts had expected jobless claims to fall to 455,000.

Read More: – Reuters

Morgan Stanley Chairman John Mack said he is disappointed that decisions coming from the Obama administration are being motivated by politics.

“I’m not here to bash the administration, but I’m really disappointed,” Mack said Wednesday while speaking at public forum at Queens University of Charlotte hosted by Hugh McColl, a former chairman and chief executive of Bank of America.

“Every decision can’t be a political decision. Whatever happened to doing what’s right?” Mack asked.

He shared his concern about the sentiment coming from Washington and that the focus is too much on politics than on meaningful industry reform.

“We will get some changes,” Mack said. “People are smart enough to know we cannot go forward with the system the way it is … but it is a slow go.”

Read More: – Reuters

Stocks are falling sharply after a stream of downbeat news revived fears of a global economic slowdown. Major indexes are all down more than 1%.

Disappointing reports on jobless claims in the U.S. and economic sentiment in Europe Thursday are a painting a bleaker picture of a recovery than Federal Reserve Chairman Ben Bernanke had during testimony on Wednesday on Capitol Hill.

The Labor Department says first-time claims for unemployment benefits rose by 22,000 to a seasonally adjusted 496,000. Economists had predicted a drop to 455,000.

Meanwhile, orders for big-ticket durable goods rose by a better-than-expected 3% in January because of a surge in commercial aircraft orders. However, orders fell by 0.6% excluding transportation, and that was worse than expected.

Read More: – By Stephen Bernard, AP Business Writer

Struggling video-rental chain Blockbuster (BBI) posted another dismal earnings report for the fourth quarter — a period that is usually its strongest because of the holidays. The company — long under assault from Netflix (NFLX), rental kiosks and online video offerings — shut down 253 of its U.S. stores in January. It now plans to shutter another 150 or so in April, and additional closures are planned for a total of between 500 and 545 stores in 2010. The latest moves follow Blockbuster’s closure of 374 U.S. stores last year, which left it with 3,525 entering 2010.

The beleaguered chain posted a wider quarterly loss after Wednesday’s closing bell, hurt by massive charges related to the diminishing value of its assets. For the most recent quarter, the Dallas-based company reported a net loss of $435 million, or $2.24 a share, versus a loss of $359.8 million, or $1.89, a year ago. Excluding whopping write-downs for asset impairment, Blockbuster recorded an adjusted loss of 35 cents a share, far deeper than analysts’ forecast loss of 17 cents, according to Thomson Reuters.

Read More: – By Dan Burrows, Daily Finance

2009-2010 has seen a great national debate over the role of government in health care.  But few Americans realize just what a expansive role the government already plays in our health care system:  In 2008, government spending on health care constituted 36 percent of federal outlays, up eight percent from the previous year.  And public financing of health care, aggregating federal, state and local programs, makes up 46 percent of U.S. health spending.

Medicare alone represents 19 percent of those health care dollars.  It is therefore wise, as the nation’s legislators consider an expanded federal role in health insurance, to examine the viability of existing programs such as Medicare to determine whether the government is capable of meeting its existing health care obligations.

Background

In 1965, America adopted a massive new government insurance program intended to bring low cost medical services and health insurance for Americans aged 65 and older.

The House version of what we now call Medicare, ushered by Ways and Means Chairman Rep. Wilbur Mills (D-AR.), passed the House by 313 to 115 on April 8, 1965.  The Senate passed another version 68-21 on July 9,5 and after a week’s conference a compromise package approved by both chambers was signed into law by President Lyndon Johnson on July 30, 1965.6

Read More: – by Matt Patterson, the National Center for Public Policy Research

Global trade last year suffered its biggest collapse since World War II, an unprecedented 12 percent drop according to new figures, with worrying signs suggesting 2010 threatens only mediocre recovery.

“World trade has also been a casualty of the crisis, contracting in volume by around 12 percent in 2009,” Pascal Lamy, director general of the World Trade Organisation, told an audience in Brussels on Wednesday.

“It is the sharpest decline since the end of the Second World War,” Lamy said, and a steep downwards revision from the WTO’s most recent estimate, in December, of 10 percent.

While he would give “no forecast” for 2010 trade growth, he insisted a “pickup” is underway, but led by an “overheating” China, could not say whether it is short-term or sustainable.

Read More: – by Roddy Thomson, AFP