By Carlos Guillen

Equity markets are slowly beginning to retreat. After hitting resistance, the Dow Jones Industrial Average has failed to sustain upward momentum and is now inching its way lower, down approximately 0.3 percent from yesterday's level. News from Europe is a bit mixed, with the Greek debt still unsolved but with euro-zone services and manufacturing output unexpectedly favorable.

The good news is that it is apparent that markets are becoming much less sensitive about negative actions in the euro-zone. Finance ministers in Europe failed to put up more cash for Greece, calling on bondholders to provide greater debt relief in order to save Greece. This news should have sent markets much lower, but equities are hanging on. While the details are not all that clear, it is apparent that the struggle to reach an agreement between Greece and its private-sector creditors will continue, but this cannot continue much further, something has to give. Greece must reach a deal on writing down its debt in order to qualify for the next installment of bailout aid and to avoid a default that could destabilize the euro-zone. Given how the S&P is already considering Greece as in default status, Greece needs to get a deal large enough to ensure that it can reduce its huge debt levels but without harming the banks by frightening investors.

On the positive side of the news coming from Europe, the combined measure of euro-area services and manufacturing output unexpectedly expanded in January, led by Germany, the region's largest economy. The composite index of purchasing managers jumped to 50.4, a five-month high, from 48.3 in December, higher than the Street's estimate of 48.5 and landing in what is considered expansion territory.

Although already hinted and expected, but nonetheless still discouraging, the International Monetary Fund (IMF) cut its growth forecasts for the global economy to 3.25 percent from its prior forecast of 4.0 percent. The IMF also cut its growth forecast for the U.K. to 2.0 percent from 2.4 percent.

Clearly, the overall news is to the negative side and is reflected in equity markets being down in the red today but, again, given how investors reacted to negative news flow not so long ago, today's market action is not bad at all.

Buffet: 1 Obama: 0?
By David Urani

So with the State of the Union coming up, the big issue in the spotlight is taxes; and as Mitt Romney gives out his tax info, we are getting reports that Warren Buffet's secretary Debbie Bosanek will be making a high profile appearance in Michelle Obama's box seats. As we know, the so-called Buffet tax is a central part of the President's tax overhaul proposals (and his entire campaign), with Mr. Buffet himself providing plenty of input on potential tax policies. The funny thing is that as much as a potential tax hike on Mr. Buffet might hurt his wallet, it just happens to turn out that another major recent decision by the President looks to have greatly benefitted Mr. Buffet.

I am not claiming any kind of conspiracy or insinuating that Mr. Buffet had anything to do with it, but the decision to axe the Keystone pipeline will directly add to the Oracle's bank account. Without the pipeline to transport oil from the Bakken oil field in North Dakota, rails will be the next best option. It just so happens that Berkshire Hathaway's Burlington Northern Santa Fe railroad is set up to ship as much as 730,000 barrels per day from the oilfield, making it able to handle the brunt of the field's expected production. A Burlington Nothern spokeswoman noted that the company ships approximately 25% of the oil from Bakken.

I find it interesting that Mr. Buffet has and will likely continue to be cast as the friendly billionaire, offering away large sums of his personal fortune over to the taxpayers. And in turn Mr. Obama gets to look like Robin Hood. Yet, in the background I have to wonder if Mr. Buffet's windfall from Mr. Obama's Keystone decision will offset Mr. Buffet's proposed personal income tax increases. In other words, whether he knows it or not, I wonder if the President just put money in Mr. Buffet's pocket rather than taking it out.

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