Top Interest Rate Headlines 07-29-11: Forget About The Debt Ceiling Debate, Where’s The Economic Growth?

Forget About The Debt Ceiling Debate, Where’s The Economic Growth?
By Kevin Mahn, Forbes
It is my contention that the market has essentially priced in the belief that an agreement on raising the current debt ceiling will happen.  It is just now a question of when the agreement will be finalized and what the length and terms of the finalized agreement will be. Unfortunately, the finalization of the agreement may not be enough to avert further consideration of a downgrade to the U.S. AAA credit rating by the rating agencies.
http://jlne.ws/q9r6Ab

St. Louis Fed’s Bullard Discusses Monetary Policy and U.S. Economy
Federal Reserve Bank of St. Louis
On Friday, Federal Reserve Bank of St. Louis President James Bullard delivered remarks titled “Views on the U.S. Economy: A Four-Part Story” as part of the keynote monetary policy discussion at the 3rd Annual Rocky Mountain Economic Summit in Jackson Hole. Bullard said that “monetary policy is on hold in an ultra-easy mode,” which is “an appropriate setting for monetary policy today.”  Regarding the economic outlook, Bullard discussed why U.S. economic performance will likely improve in the second half of this year.  He stated that three of the four key uncertainties that have plagued the U.S. economy since February have been largely or partially resolved, while one of them—the U.S. fiscal situation—is still on the table.  “Once this last uncertainty is resolved, the path to faster growth may be open,” he said.
http://jlne.ws/pTFwu3

Remarks by the President on the Status of Debt Ceiling Negotiations | The White House
Good morning, everybody.  I want to speak about the ongoing and increasingly urgent efforts to avoid default and reduce our deficit. Right now, the House of Representatives is still trying to pass a bill that a majority of Republicans and Democrats in the Senate have already said they won’t vote for.  It’s a plan that would force us to re-live this crisis in just a few short months, holding our economy captive to Washington politics once again.  In other words, it does not solve the problem, and it has no chance of becoming law...
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Where does our national debt come from? | The White House
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Treasury May Adopt ‘Risky’ Payment Plan as U.S. Deadline Nears
By Cheyenne Hopkins and Ian Katz, Bloomberg
The U.S. is approaching the moment it may have to decide which bills to pay, a prospect Treasury Secretary Timothy F. Geithner has called “unacceptably risky and unfair” to Americans.
http://jlne.ws/nLjST6

Economy in U.S. Grows Less Than Forecast
By Shobhana Chandra, Bloomberg
The U.S. economy grew less than forecast in the second quarter, after almost stalling at the start of the year, as consumers retrenched. Gross domestic product climbed at a 1.3 percent annual rate following a 0.4 percent gain in the prior quarter that was less than earlier estimated, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 1.8 percent increase. Household purchases, about 70 percent of the economy, rose 0.1 percent.
http://jlne.ws/qsr0u7

U.S. House Bids to Salvage Boehner Debt Bill
By Julie Hirschfeld Davis and James Rowley, Bloomberg
House Speaker John Boehner plans to take his proposal to raise the U.S. debt ceiling to a vote in the chamber at about 6 p.m., Republican leaders announced.
http://jlne.ws/qypjvJ

DTCC Greatly Expands Historical CDS Data Available On Website
By Katy Burne Of DOW JONES NEWSWIRES
The Depository Trust & Clearing Corp. has expanded the suite of data it makes publicly available on credit default swap transactions, allowing interested parties to see weekly data going back to 2008. Until the change Tuesday night, buyers and sellers of CDS as well as market observers could see net notional values for the most recent week, the prior week, the month before the relevant date and for one year ago to that date.
http://jlne.ws/pKNeWs

Five questions for the Fed and Treasury
By Gillian Tett, Financial Times
This week, a cacophonous hubbub is overwhelming America’s airwaves. For with the debt ceiling deadline approaching, almost every pundit and politician worth their salt has been expressing views on what could – or should – happen next.
http://jlne.ws/rmBDO0

Citigroup, Goldman Commercial Mortgage Bond Traders Depart
By Sarah Mulholland and Donal Griffin, Bloomberg
The heads of commercial mortgage bond trading for Citigroup Inc. and Goldman Sachs Group Inc. have left the firms this week as the market is roiled by sovereign debt crises and new deals are cut back or put on hold.
http://jlne.ws/n2my3N

French Banks, Insurers to Lose $4.2 Billion in Greek Plan
BY WILLIAM HOROBIN, WSJ
PARIS—-The head of the French Banking Federation, François Perol, Friday said French banks and insurers will lose around E3 billion ($4.23 billion) by writing down the value of Greek bonds as part of the country's rescue plan, but said French financial institutions remain "solid" and have little exposure to Greece overall.
http://jlne.ws/pPFsDq

Moody’s puts Spain on review for downgrade
By Richard Milne in London and Sarah Mishkin in Hong Kong, Financial Times
Spain became the latest eurozone country to feel the pressure of credit rating agencies as Moody’s warned it was at risk of a one-notch downgrade. The move follows a similar warning to Italy in June and comes as the eurozone’s third and fourth biggest economies have endured a torrid time in the markets, as their borrowing costs shoot up.
http://jlne.ws/qobcZu

US default would spell turmoil for the repo market
By Darrell Duffie and Anil K Kashyap, Financial Times
Concerns are mounting that the US could default on its debt obligations if no agreement is reached on the country’s debt ceiling. But what exactly would be the consequences? The repo market would take a big hit for a start.
http://jlne.ws/nd22Ra

Goldman-Citi Offering Is Pulled Over Ratings
BY AL YOON, WSJ
Goldman Sachs Group Inc. and Citigroup Inc. pulled a $1.48 billion commercial mortgage-backed security from the market late Wednesday after an 11th-hour internal review by Standard & Poor's, throwing the CMBS world into disarray.
http://jlne.ws/rmYTVC

Investment banks hampered by high fixed costs
By Megan Murphy in London, Financial Times
European investment banks are being squeezed by fixed administrative expenses even as they slash pay and staff amid weak trading conditions. Credit Suisse on Thursday became the latest bank to announce significant job cuts, revealing it was shedding 4 per cent of its global headcount, about 2,000 employees, following a 52 per cent fall in net profits in the second quarter.
http://jlne.ws/psVNkv

Irish financial regulation to be strengthened
By Brooke Masters and Sharlene Goff in London, Financial Times
Ireland’s central bank would be given expanded powers to investigate the financial sector, direct institutions to change their business practice and fine or suspend those that misbehave, under a bill unveiled on Thursday.
http://jlne.ws/ndvuAQ