Updated: Bomb Explodes At Oslo Building Housing Prime Minister's Office 

Just out from Reuters:

• OSLO EXPLOSION BLOWS OUT MOST WINDOWS OF GOVERNMENT BUILDING HOUSING PRIME MINISTER'S OFFICE-REUTERS WITNESS
• Several people injured in explosion at Norwegian Government building in central Oslo

more as we get it

Norway Bomb Explosion Aftermath Video 

Dramatic footage of a post-bomb explosion Oslo comes via Reuters. Presented without comment.

Republican Kevin McCarthy Says No Debt Deal Likely Today, Or Over Weekend: Treasury Now Projected To Have -$15.5BN Cash Balance On August 15 $31BN Coupon Date 

Well, it looks like there will be no debt ceiling hike enacted prior to August 2 at which point the money really does run out. From The Hill: "The No. 3 Republican in the House said Thursday night that he didn’t expect any surprises in the deficit debate over the weekend. “I do not see something springing this weekend,” Republican Whip Kevin McCarthy (Calif.) told conservative radio host Hugh Hewitt. McCarthy pooh-poohed reports that the White House and Republican leadership are closing fast on a deal on the budget deficit and raising the debt ceiling. “There is no deal,” McCarthy said, using the same phrase used by the White House and House Speaker John Boehner (R-Ohio) following reports they were nearing a deal on Thursday. McCarthy said Republicans would not rush to push a bill through in order to meet the Treasury Department’s Aug. 2 deadline. According to McCarthy, House Republicans will seek to follow their own “three-day rule” in order to allow members of Congress to debate the plan. Now the reason why this is bad is because as Stone McCarthy calculates, "we expect Treasury to have less cash in early August than we thought previously." And here is where it gets very tricky since the money generating machinery won't be in place on time: "we now show Treasury with a negative cash balance of $15.5 billion on August 15, which implies that Treasury wouldn't have the resources to pay $30.6 billion in interest on that day." Translation: the money runs out, and the US is in default. Not selective. Not transitory. The real deal.

 

 

Boehner Tells GOP Lawmakers There Is No Deal On Debt Ceiling 

No deal... for now. From Reuters: "Speaker of the U.S. House of Representatives John Boehner told fellow Republicans on Friday there's still no deal to avert a debt default, but that talks continue, a senior party member said. Boehner's message at a closed-door House Republican meeting was: "There's no deal, and we'll continue to work to get resolution to the problem," said Republican Congressman Tom Latham." They have less than 14 hours now. 

 

 

 

 

 

Guest Post: 500 Million Debt-Serfs: The European Union Is A Neo-Feudal Kleptocracy 

If we knock down all the flimsy screens of artifice and obscuring complexity, what we see in Europe is a continent of debt-serfs, indentured to the banks under the whip of the European Union and its secular religion, the euro. What else can we call the stark domination of the big banks other than Neo-Feudalism? In one way or another, every one of the 27-member nations' citizens are indentured to the big international banks at risk in Europe, most of which are based in Europe. We can clear up much of the purposeful obfuscation by asking: exactly what tragedy befalls Europe if all the sovereign debt in the EU was wiped off the books? The one and only "tragedy" would be the destruction of the "too big to fail" banks, not just in Europe but around the world. As the big European banks imploded, then their inability to service their counterparty obligations on various derivatives to other big banks would topple those lenders. While the political vassals call that possibility a catastrophe, it would actually spell freedom for Europe's 500 million debt serfs. From the lofty heights of the Manor House, then the loss of enormously concentrated power and wealth is indeed a catastrophe for the Lords and their political lackeys. But for the debt-serfs facing generations of servitude for nothing, then the destruction of the banks would be the glorious lifting of tyranny.

 

 

EU Debt Restructuring Leads to Bailout Euphoria / Silver to Double to $100 Say Citigroup 

With all eyes on Brussels, myopia has returned to markets particularly with regard to the serious fiscal and monetary challenges continuing in Washington. Another sign of silver’s move from the fringe of hard money advocates and more risk averse investors and savers to the mainstream is seen in Citigroup technical analysis of the silver market which was picked up by Bloomberg. Citigroup Global Markets Inc. have said that if silver follows similar patterns as seen in silver’s last bull market from 1971 to 1980 than silver could double to over $100 per ounce. “If the final rally in the last bull market repeated then we can expect $100 over the long term,” Tom Fitzpatrick and two other analysts wrote. “While the high so far this year was at the same level as the peak in January 1980, we are not convinced that the long-term trend is over yet.” Most institutional players and Wall Street banks have been bearish on silver and have called the silver market wrong for years. 

 

 

 

 

 

So Much For That Gold Correction: Gold Surges As European Euphoria Wears Off, Euro Tumbles 

Some unpleasant developments for the 'Risk On' crowd have emerged in the past few hours, after gold and silver have both surged, with gold once again approaching recent all time highs, and is now once again at $1,605/oz. And the worse news is that after yesterday's bazooka bailout, the EURUSD is again in tumble mode. What else will Europe pull out of its hat? Was this the most shortlived "rescue" in history? We certainly would not be surprised, as it conforms to our understanding that the halflife of central bank interventions is getting shorter and shorter. And with the USDJPY expect yet another pronouncement from Noda how the Yen's moves are "one sided"... yet the BOJ will do absolutely nothing about it. Simply said the world is getting habituated to central planning rescues. That said, expect another tumble in gold following an imminent announcement of a debt ceiling deal. After that, the euphoria will be about 1 hour, 2 tops, at which point the reality of a global economic contraction will once again have to be faced only this time coupled with [X] trillions in fiscal cuts over the next several years. And that will be it for the upside catalysts. 

 

 

 

 

 

 

 

Fitch First To Downgrade Greece To Speculative Default As Greek CDS Tumble By Most Ever, Analysts Balk At Bailout 

Earlier today, Fitch announced it would be the first rating agency to declare Greece has defaulted, albeit on an interim basis. According to Reuters, Fitch Ratings will declare Greece in restricted default on its debt due to the steps taken in a new euro zone rescue package but will likely assign new ratings of a low speculative grade once a bond exchange is completed, the agency said on Friday. The agency said that the reduction in interest rates Greece is paying on its debts and extension of maturities gave it a chance of regaining solvency and would support its rating. "Fitch will assign new post-default ratings to Greece and to the new debt instruments once the default event is cured with the issue of new securities to participating bondholders," the agency said. "The new ratings will likely be low speculative-grade." Elsewhere, confirming that now that Greece is an explicit ward of the EFSF, read Germany and France its rating do not matter, Greek CDS tumbled the most ever, tightening by 500 bps to 1,500 in hours. However, since Greece now exists in a state of limbo when it comes to capital markets and since without the explicit support of the EFSF the country would be insolvent, there is little sense to look at its "risk" through the lens of fixed income any more. Lastly, as the following selection of analyst commentary indicates, there is nothing about this "solution" that is actually beneficial in the long run. 

 

 

 

 

 

Goldman's Complete Summary Of The European Council Decisions 

Still confused about why nobody is calling the EFSF expansion Europe's TARP, aside from the fact that this latest European bailout is exactly Europe's TARP? Need a one page summary tearsheet on the European Council Decision as pertains to Greece now and all the other European countries later? Have no fear, because Goldman's Francesco Garzarelli is here again, explaining all you need to know about the ongoing taxpayer-to-insolvent nation-to-bank capital transfer. 

 

 

 

 

 

 

As German Business Morale Drops To 9 Month Low, Concerns About Health Of Europe's Core Economy Emerge 

While futures are still drunk on the euphoria from Europe's bailout, and the EURUSD has rebased modestly higher by 200 pips to 1.44, the actual "cash flow" issues that are at the base of every modern problem are once again resurfacing, this time at key EFSF guarantor Germany, whose July Ifo business climate index, based on a monthly survey of some 7,000 firms, plunged to 112.9 from 114.5, well below expectations of 113.8, a nine month low in this closely watched indicator. "Germany has been the star performer in the industrialised world since the end of the financial crisis, and economists were split on whether Friday's data points to a sharp slowdown or just a moderate easing from unsustainably strong growth in the first part of 2011." Coming on the heels of yesterday's sharp decline in European PMIs confirms that while Europe has perfected the art of wealth redirection, primarily in the direction of bank balance sheets, it may need to soon grapple with the far more difficult task of stimulating the best performing industrial economy since the GFC. Because all it would take for the latest European "bailout" to fold would be for a rating agency to say that they are now shifting their attention to the creditworthiness of Europe backstopper supreme: Germany. 

 

 

 

 

 

 

Here Is What Is On Today's Critical Docket In Washington 

It is D-Day in Washington. While all of this week we have witnessed numerous red herrings by both parties on a final debt ceiling solution, today the gloves will finally have to come off as July 22 is broadly seen as the final day by which a law will have to be proposed and agreed upon in order to be implemented by the August 2 deadline. Should there be no debt deal today, even if one is ultimately reached at some point next week it may be too late for that critical period between August 2 and when money actually starts running out (more on that shortly). Expect the cadence of news headlines out of DC to hit a fever pitch, hopefully with at least one of them sticking. In the meantime, here is Goldman's summary of what is formally on the docket. 

 

 

 

 

 

 

EFSF And Sovereign CDS Pitchbook Updates 

Yesterday was a big day in the market for EFSF and Sovereign CDS. The announcements were big enough that some junior associates must be scrambling to update their pitchbooks. Here are my thoughts on what changes need to be done to the pitchbooks and the trading ideas that come as a result. 

 

 

 

 

 

 

Hank "3 Page Blank-Check Term Sheet" Paulson Issues First Mutual Assured Destruction Statement Since Retirement 

From Hank the Mutual Assured Destruction bomb dropping Tank "failing to raise the debt ceiling would do irreparable harm to our credit standing, would undermine our ability to lead on global economic issues and would damage our economy."

 

 

 

 

 

Bernanke's Nightmare




The Money Changers' Last Hurrah




The Collapse of Paper Money and The Vertical Move of Gold




Big US Bank:  If QE3 Actually Happens We Could See Gold at $5,000 and Silver at $1,000
 

 

 

 

 

 

 

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