Debt reduction talks in limbo as clock ticks toward Aug. 2 deadline (WaPo)
Talks among President Obama and congressional leaders Sunday evening failed to break a partisan stalemate over how to raise the federal borrowing limit, leaving the politically charged negotiations in limbo three weeks before the administration says the country will begin to default…Both sides appeared Sunday to dig further into their positions, leaving the talks deadlocked, a historic default looming and a fragile economy increasingly vulnerable to the consequences of Washington’s entrenched partisanship and ideological divide over taxes and entitlements.
Geithner: Failure on debt deal not an option (CBS)
“You can’t wait until August 2,” Geithner said. “The credit rating agencies of the world have already made it clear in public, the longer we go into July without a path to resolution, the more risk they are going to put a cloud over our credit rating…There’s no reason why the leadership in Congress should let that happen,” he added. Failure to reach an agreement, he warned, “is not an option.”
Deutsche Bank May Risk Co-CEO Pitfalls to Satisfy Jain, Germany (Bloomberg)
Jain, a 48-year-old native of India, may be named co-chief executive officer with Juergen Fitschen, 62, or another German speaker, people familiar with the matter have said. Chairman Clemens Boersig convened the nominations committee of the supervisory board yesterday to push for a two-CEO solution, said the people, who declined to be identified because the talks are confidential…Still, partnering Jain with another executive carries risks because shared leadership can lead to turf battles, divided loyalty among employees and sclerotic decision making, analysts said.
EU stance shifts on Greece default (FT)
European leaders are for the first time prepared to accept that Athens should default on some of its bonds as part of a new bail-out plan for Greece that would put the country’s overall debt levels on a sustainable footing. The new strategy, to be discussed at a Brussels meeting of eurozone finance ministers on Monday, could also include new concessions by Greece’s European lenders to reduce Athens’ debt, such as further lowering interest rates on bail-out loans and a broad-based bond buyback programme. It also marks the possible abandonment of a French-backed plan for banks to roll-over their Greek debt.
Italian Debt Adds to Fears in Euro Zone (NYT)
Top European officials planned to meet on Monday to wrestle with threats to the currency union as fears mounted that Italy could become a victim of the debt crisis even as discussions stalled over a second bailout for Greece…Investors were unnerved in part by evidence of a growing divide between the Italian prime minister, Silvio Berlusconi, and the finance minister, Giulio Tremonti, who has been praised for his handling of the economy during the financial crisis and for maintaining control of the budget deficit. The euro zone has been shaken by the fiscal troubles of Greece, Portugal and Ireland, though their economies are relatively small. The Italian economy is more than twice the size of the combined economies of those three countries.
Italy Regulator Introduces Short Selling Disclosure (Reuters)
Starting on Monday, investors will have to inform Consob of net short positions on Italian stocks when they represent 0.2 percent or more of the company’s share capital, the regulator said in a statement on its website. After that, investors will have to notify every variation equal to at least 0.1 percent of the capital.
Jim Rogers: Whatever Happens, Commodities Win (CNBC)
“If the world economy gets better, I earn money on commodities. If the global economy gets worse then they will print more money and I will make money in commodities,” Rogers said.
US hedge funds bet against Italian bonds (FT)
The funds have increased the size of short positions in the last month, speculating that investor concerns over the country’s ability to fund itself may spread from Europe’s periphery to Italy, according to investors in the funds briefed on the strategy.
Sheila Bair’s Bank Shot (NYT)
‘They should have let Bear Stearns fail,” Sheila Bair said. Continue reading »
Here at Dealbreaker we love short sale bans. Nothing inspires confidence in an asset so much as a government telling you that you can’t sell it, especially when the government in question is taking time out from a busy schedule of bunga bunga parties to give a firm but loving hand to the equity markets.
