JPMorgan Beats Estimates as Net Rises 13% (Bloomberg)
The bank said net income rose 13 percent, higher than analysts estimated, as more borrowers paid on time and the bank reduced credit-card loan-loss reserves by $1 billion. Second-quarter net income climbed to $5.43 billion, or $1.27 a share, from $4.8 billion, or $1.09, in the same period a year earlier and compared with a record $5.56 billion, or $1.28, in the first quarter, the New York-based company said today in a statement. The average per-share estimate for earnings was $1.21, projected by 28 analysts surveyed by Bloomberg.

President Obama abruptly walks out of talks (Politico)
When Cantor said the two sides were too far apart to get a deal that could pass the House by the Treasury Department’s Aug. 2 deadline — and that he would consider moving a short-term debt-limit increase alongside smaller spending cuts — Obama began to lecture him. “Eric, don’t call my bluff,” the president said, warning Cantor that he would take his case “to the American people.” He told Cantor that no other president — not Ronald Reagan, the president said — would sit through such negotiations. Democratic sources dispute Cantor’s version of Obama’s walk out, but all sides agree that the two had a blow up. The sources described Obama as “impassioned” but said he didn’t exactly storm out of the room. “Cantor’s account of tonight’s meeting is completely overblown. For someone who knows how to walk out of a meeting, you’d think he’d know it when he saw it,” a Democratic aide said. “Cantor rudely interrupted the president three times to advocate for short-term debt ceiling increases while the president was wrapping the meeting…”


Top Republicans clash over debt-limit plan (WaPo)
Senate Minority Leader Mitch McConnell (Ky.), who offered a proposal this week that would allow President Obama to raise the federal debt limit without guaranteed spending cuts, warned that the Republican Party could “destroy” its brand with voters if Congress allows the government to default…But House Majority Leader Eric Cantor (Va.) rejected McConnell’s plan for resolving the debt stalemate, instead vowing to press ahead with the campaign to roll back government spending.

Bill Gross’s Warning to Washington: Don’t mess with the debt ceiling (WaPo)
“I say unbiased because my credentials have become very public over the past several months. Pimco owns very few Treasury securities, and its clients would theoretically benefit if yields rose on an under-owned asset class that was technically in default. But default would still be a huge negative for the U.S. and global financial markets, introducing fear and unnecessary volatility into the economy and global trade. The market situation might resemble what happened after Lehman Brothers collapsed in 2008.”

China Urges U.S. to Take Responsible Action on Debt (NYT)
“We hope that the U.S. government adopts responsible policies and measures to guarantee the interests of investors,” Reuters quoted a foreign ministry spokesman, Hong Lei, as saying…China holds more than $1 trillion in U.S. Treasury securities, more than any other country, making it highly sensitive to any developments that could lower the value of those holdings.

Raters Put U.S. on Notice (WSJ)
Moody’s Investors Service said it was reviewing the government’s top Aaa bond rating for a possible downgrade, citing the “rising possibility” that the government’s $14.29 trillion borrowing limit won’t be raised soon enough to prevent the U.S. from running out of money to pay its bills. In addition, ratings agency Standard & Poor’s privately has told lawmakers and top business groups it might cut the U.S. credit rating if the government fails to make any of its expected payments—including Social Security checks—even if it makes all its debt payments, people familiar with the matter said. Continue reading »

$$$ Moody’s Places US Aaa Government Bond Rating and Related Ratings on Review for Possible Downgrade (Moody’s)

$$$ QE3 talk pushes gold to nominal record (FT)

$$$ Boehner: No one wants to risk government default, would be a crapshoot (AP via WaPo)

$$$ Fitch downgrades Greece on lack of funding program (Reuters)

$$$ IMF urges private sector to share Greek burden (FT)

$$$ How to Save the Euro: Letting Greece default might be the only way (WSJ)

$$$ Citadel ends plan to be market maker in treasuries (Reuters)

$$$ Guilty pleas hint at next steps in insider cases (Reuters)

$$$ Options Trader, Actor Advance at Poker Series (Bloomberg) Continue reading »