By Mike Conlon, ForexNews.com on Jul 15, 2011 01:18:34 GMT
Stressful Situations!
Specifically, I am referring to two events taking place around the globe that have effectively put the markets on edge. The first today is the release of the results of the European bank stress tests, and then the on-going saga of the debt ceiling debate here in the US.
The bank stress tests are intended to allay the fears of the marketplace that the European banks are adequately capitalized and that they could withstand a major shock to the system such as sovereign default. This will likely throw a few banks under the bus which is obviously bad for some individual players, but this has to be done in order to ensure “credibility” that the tests were sufficient.
The debt ceiling debate is likely to be more drawn out as the politics behind the scenes have gotten so ugly that neither side is willing to budge. So we are headed on a collision course toward disaster unless one side is willing to compromise. S&P has put the US on negative credit watch and said that a debt downgrade may be forthcoming if a deal is not reached.
This has induced some mild risk aversion in the markets today, with stocks flat to slightly lower and commodities pulling back.
In the forex market:
Aussie (AUD): The Aussie is mostly lower on risk aversion and that money flows are leaving the Aussie in favor of the Kiwi on rate hike expectations.
Kiwi (NZD): The Kiwi is higher despite the risk in the marketplace after the much better than expected GDP report showed that the economy was growing at 1.4% vs. an expectation of .5% after having to deal with the two earthquakes. The market believes that this positive growth story means that the RBNZ could be next to raise rates. (Click chart to enlarge)
Loonie (CAD): The Loonie is somewhat higher against the Dollar despite lower oil prices and mild risk aversion in the markets. Canada’s close ties to the US economy make the Loonie slightly more desirable when the risk comes from Europe rather than the US.
Euro (EUR): The Euro is slightly lower ahead of the bank stress tests results that are due out at 12PM EST. Trade balance figures came in better than expected, though the market is more concerned with the news at noon.
Pound (GBP): The Pound is mixed as austerity measures are bringing down inflation, albeit slowly. This will likely mean that the BOE will be on hold for some time.
Swissie (CHF): The Swissie has been on a tear of late as its safe-haven status has been exploited by those who do not want to own the US dollar. (Click chart to enlarge)
Dollar (USD): The Dollar has been moving higher after Bernanke backed away from his comments the other day that has led the market to believe that QE3 is very much on the table. CPI data came in largely as expected this morning, showing a headline figure of 3.6%. However, the Empire manufacturing index came in at –3.76 vs. an expectation of 5. Michigan consumer confidence figures are due out later this morning.
Yen (JPY): Much like the Swissie, the Yen has been appreciating of late as it’s a Dollar alternative for a safe haven play. Too much strengthening could cause the BOJ to take action, especially if QE3 looks more like a reality.
With the stress in the marketplace adding to the already declining economic data, it is only a matter of time before something gives. The Euro bank stress tests are intended to instill confidence in an already skeptical market and if the tests are deemed to not be rigid enough, then this may become a non-issue. Nevertheless, expect volatility surrounding the release.
Here in the US, we have a different kind of stress over the debt ceiling debate. President Obama will be speaking on it later this morning but expect the same political rhetoric to take place. Meanwhile, markets that are already jittery over a worsening economy have extra reasons to be cautious. Potential US credit downgrades are adding fuel to fire, as they typically occur after the fact.
Prospects don’t look great for the global economy despite better than expected corporate stock earnings. There is a major disconnect between the markets and the real economy, so don’t be surprised if at some point they begin to resemble each other more realistically.
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing marke
Sunday, March 25, 2012
Clinton Warns S. China Sea Spats Threaten Asia Peace, Trade
July 23, 2011, 1:12 AM EDT
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By Daniel Ten Kate and Nicole Gaouette
(Adds comments from State Department official in sixth paragraph.)
July 23 (Bloomberg) -- U.S. Secretary of State Hillary Clinton warned today that escalating tensions in the South China Sea risk disrupting trade flows and called on Asian countries to clarify territorial claims.
“The United States is concerned that recent incidents in the South China Sea threaten the peace and stability on which the remarkable progress of the Asia-Pacific region has been built,” Clinton told a regional security forum in Bali, Indonesia. “These incidents endanger the safety of life at sea, escalate tensions, undermine freedom of navigation, and pose risks to lawful unimpeded commerce.”
Clinton commended China and the 10-member Association of Southeast Asian Nations for agreeing to guidelines for joint activities in the waters last week and urged them to accelerate a legally binding code of conduct. She called on countries to “exercise self-restraint” and avoid occupying uninhabited islands in the disputed waters.
The U.S.’s alliance with the Philippines and naval power in the Asia-Pacific has led to tensions with China, which claims most of the South China Sea as its own. The Philippines and Vietnam have pushed ahead with oil and gas exploration over objections from China, which has used patrol boats to disrupt hydrocarbon survey activities in disputed waters.
‘Clarify Claims’
Clinton called on the countries “to clarify their claims in the South China Sea in terms consistent with customary international law, including as reflected in the Law of the Sea Convention,” Clinton said, according to prepared remarks that were given to reporters. “Consistent with international law, claims to maritime space in the South China Sea should be derived solely from legitimate claims to land features.”
Clinton is asking states to lay out their claims very clearly and unambiguously and to explain the legal basis for them, said a State Department official present for meetings on the South China Sea. That will force countries to look carefully at their approach, especially given that almost all claims to the waters are exaggerated, the official said, speaking on condition of anonymity.
The U.S. has not ratified the United Nations Law of the Sea Convention.
‘Nine-Dash Map’
China last week rejected an attempt by the Philippines to have the UN’s International Tribunal for the Law of the Sea decide on the territorial dispute. The Philippines plans to ask another UN arbitration panel to demarcate disputed areas of the sea “to prove our claim,” Foreign Secretary Albert F. del Rosario said on July 20.
Along with the Philippines, Vietnam and Indonesia have released statements to the UN saying China’s “nine-dash map” of the waters has no basis in international law.
China says its claims “are supported by abundant historical and legal evidence,” according to an April submission to the UN. It said the Philippines “started to invade and occupy” its islands in the 1970s.
Chinese ships cut survey cables of Vietnam Oil & Gas Group vessels twice in the past few months and in March chased away a boat working for U.K.-based Forum Energy Plc that was surveying the area. A Chinese frigate fired warning shots at Philippine trawlers on Feb. 25.
China’s actions in the waters provoked protests in Hanoi over the past month and prompted a group of Filipino lawmakers to travel last week to the disputed Spratly Islands, which are also claimed by Malaysia, Taiwan, Brunei, Vietnam and China. All those countries except Brunei have troops stationed in the area.
“We believe that it’s important to respect the sovereignty and territorial integrity of China,” Liu Weimin, spokesman for Foreign Minister Yang Jiechi, told reporters yesterday after his meeting with Clinton. “I sense that the U.S. side understands the sensitivities of these issues.”
--Editor: Ben Richardson, Jim McDonald
To contact the reporters on this story: Daniel Ten Kate in Bali at dtenkate@bloomberg.net; Nicole Gaouette in Bali at ngaouette@bloomberg.net
To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net
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Story Tools
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By Daniel Ten Kate and Nicole Gaouette
(Adds comments from State Department official in sixth paragraph.)
July 23 (Bloomberg) -- U.S. Secretary of State Hillary Clinton warned today that escalating tensions in the South China Sea risk disrupting trade flows and called on Asian countries to clarify territorial claims.
“The United States is concerned that recent incidents in the South China Sea threaten the peace and stability on which the remarkable progress of the Asia-Pacific region has been built,” Clinton told a regional security forum in Bali, Indonesia. “These incidents endanger the safety of life at sea, escalate tensions, undermine freedom of navigation, and pose risks to lawful unimpeded commerce.”
Clinton commended China and the 10-member Association of Southeast Asian Nations for agreeing to guidelines for joint activities in the waters last week and urged them to accelerate a legally binding code of conduct. She called on countries to “exercise self-restraint” and avoid occupying uninhabited islands in the disputed waters.
The U.S.’s alliance with the Philippines and naval power in the Asia-Pacific has led to tensions with China, which claims most of the South China Sea as its own. The Philippines and Vietnam have pushed ahead with oil and gas exploration over objections from China, which has used patrol boats to disrupt hydrocarbon survey activities in disputed waters.
‘Clarify Claims’
Clinton called on the countries “to clarify their claims in the South China Sea in terms consistent with customary international law, including as reflected in the Law of the Sea Convention,” Clinton said, according to prepared remarks that were given to reporters. “Consistent with international law, claims to maritime space in the South China Sea should be derived solely from legitimate claims to land features.”
Clinton is asking states to lay out their claims very clearly and unambiguously and to explain the legal basis for them, said a State Department official present for meetings on the South China Sea. That will force countries to look carefully at their approach, especially given that almost all claims to the waters are exaggerated, the official said, speaking on condition of anonymity.
The U.S. has not ratified the United Nations Law of the Sea Convention.
‘Nine-Dash Map’
China last week rejected an attempt by the Philippines to have the UN’s International Tribunal for the Law of the Sea decide on the territorial dispute. The Philippines plans to ask another UN arbitration panel to demarcate disputed areas of the sea “to prove our claim,” Foreign Secretary Albert F. del Rosario said on July 20.
Along with the Philippines, Vietnam and Indonesia have released statements to the UN saying China’s “nine-dash map” of the waters has no basis in international law.
China says its claims “are supported by abundant historical and legal evidence,” according to an April submission to the UN. It said the Philippines “started to invade and occupy” its islands in the 1970s.
Chinese ships cut survey cables of Vietnam Oil & Gas Group vessels twice in the past few months and in March chased away a boat working for U.K.-based Forum Energy Plc that was surveying the area. A Chinese frigate fired warning shots at Philippine trawlers on Feb. 25.
China’s actions in the waters provoked protests in Hanoi over the past month and prompted a group of Filipino lawmakers to travel last week to the disputed Spratly Islands, which are also claimed by Malaysia, Taiwan, Brunei, Vietnam and China. All those countries except Brunei have troops stationed in the area.
“We believe that it’s important to respect the sovereignty and territorial integrity of China,” Liu Weimin, spokesman for Foreign Minister Yang Jiechi, told reporters yesterday after his meeting with Clinton. “I sense that the U.S. side understands the sensitivities of these issues.”
--Editor: Ben Richardson, Jim McDonald
To contact the reporters on this story: Daniel Ten Kate in Bali at dtenkate@bloomberg.net; Nicole Gaouette in Bali at ngaouette@bloomberg.net
To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net
Obama Deal With Boehner Upset by Last-Minute ‘Gang of Six’ Plan
July 23, 2011, 1:45 AM EDT
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Obama Open to Short-Term Debt Increase Tied to Major Deal
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By Julie Hirschfeld Davis
July 23 (Bloomberg) -- President Barack Obama, running out of time to strike a deal to raise the U.S. debt ceiling, had some bad news for House Speaker John Boehner on July 20.
The tax overhaul they had been discussing to raise $800 billion in revenue over a decade had to be bigger, Obama told Boehner and House Majority Leader Eric Cantor during an evening meeting in the Oval Office. Obama’s new offer: $1.2 trillion.
A new proposal by the “Gang of Six,” a bipartisan group of senators who were calling for $3.7 trillion in budget savings over 10 years to slash the deficit, had changed the dynamics of the accord that Obama and Boehner had been negotiating in closed-door talks for weeks, the president told the speaker.
The group, praised by both senior Republicans and Democrats for its mix of spending cuts and tax increases, proposed a bigger revenue target than Obama and Boehner were considering, according to officials on Capitol Hill and at the White House who gave their accounts of the talks on condition of anonymity.
And Obama, who had called for months for the sort of grand bargain the gang was offering, was going to have a hard time selling a deal that stopped short of that.
The turnabout ultimately led Boehner to walk out of the talks, he said last night, unraveling the progress that had been made toward a sweeping compromise to slice $3.5 trillion from the nation’s debt and raise the $14.3 trillion debt ceiling before a default threatened Aug. 2.
Back to Beginning
The breakdown sent both sides back to the beginning with little room left to reach a deal to boost the nation’s borrowing authority in time to head off the default. Congressional leaders from both parties are to meet today at the White House in an effort to reach an accord.
“It’s the president who walked away from his agreement and demanded more money at the last minute,” Boehner, of Ohio, told reporters at an evening news conference on Capitol Hill, hours after calling Obama to tell him he was abandoning their negotiations. “Dealing with the White House is like dealing with a bowl of jello.”
It was the final breakdown in the private negotiations between Obama and Boehner over a politically challenging debt- reduction agreement both were eager to reach.
“We had very intense negotiations,” Obama said last night. “I’ve been left at the altar now a couple of times.”
The courtship began June 18, when Obama, 49, invited Boehner, 61, for a round of golf at Andrews Air Force Base. The two teamed up against Vice President Joe Biden, who was spearheading bipartisan talks on the deficit with congressional leaders, and Ohio Governor John Kasich, a friend of Boehner’s.
Bonding Session
More bonding session than policy debate, the president and the speaker beat Kasich and Biden, winning $2 each. Still, the golf date proved a turning point, spurring Obama and Boehner to begin one-on-one talks on a broad compromise. Four days later, Boehner was at the White House meeting privately with Obama to sketch out what the deal could look like.
The following day, Cantor, a Virginia Republican who has cultivated a close relationship with Tea Party-backed lawmakers leading the call for spending cuts, abandoned the bipartisan Biden-led talks after a half-dozen meetings. He said Democrats’ insistence on raising taxes made an agreement impossible. The group had been making slow but steady progress, identifying more than $1 trillion in spending cuts the two parties could agree on.
The following week, Obama held a news conference in which he accused Republicans of siding with corporate-jet owners over children and the elderly in the negotiations, and compared Congress’s work ethic unfavorably with that of his pre-teen daughters.
Dire Consequences
“The yellow light is flashing,” Obama said during the June 30 news conference, warning of dire consequences if Congress didn’t raise the borrowing limit before Aug. 2. Standard & Poor’s said it would downgrade U.S. debt to junk status in the event of a default, and the Senate canceled its July 4 recess to continue talking.
The following Sunday, July 3, Boehner and Obama met secretly at the White House to continue their talks. Enough progress was made that Obama appeared at a White House briefing on July 5 to say the nation had “a unique opportunity to do something big to tackle our deficit,” and announce he was summoning congressional leaders from both parties for talks at the White House July 7.
At the roughly 90-minute meeting, Obama polled congressional leaders about what kind of deal they were seeking -- a limited one of between $2 trillion and $2.5 trillion over a decade, a medium-size agreement yielding about $3 trillion, or a big deal to cut $4 trillion off the debt.
Obama and Boehner both wanted to go big.
‘No Imminent Deal’
Still, Boehner -- cognizant of intense opposition among Republicans to any agreement that raised taxes -- cautioned that there was “no imminent deal about to happen,” saying there remained “serious disagreements.”
“We are this far apart,” Boehner told reporters, spreading his arms to indicate the gulf between himself and the president. Yet behind the scenes, his staff and Obama’s were beginning to exchange paper on the contours of a compromise to bridge that divide.
The White House was willing to consider major changes to Medicare, Medicaid and Social Security, including benefit cuts, that had previously been considered off-limits. Boehner was willing to discuss a tax overhaul that would raise revenue, until then dismissed by the Republicans as a tax increase.
Boehner’s aides, including Chief of Staff Barry Jackson and Policy Director Brett Loper, were haggling with Obama’s budget director Jack Lew and legislative liaison Rob Nabors on the details. Resistance was brewing in both parties to such a deal.
Pelosi Displeased
Meeting at the White House with Obama on July 8, House Minority Leader Nancy Pelosi of California vented her displeasure about the prospect of including Social Security and Medicare cuts in any deal, and told him such a package wouldn’t garner support among congressional Democrats.
On Capitol Hill, Boehner and other House leaders held a press conference to reiterate their opposition to tax increases. Still, negotiations continued into Saturday morning July 9, when a round of negotiating among Boehner’s and Obama’s aides yielded little progress in breaking remaining stalemates over details of the tax rewrite and entitlement cuts.
Later that day, Boehner phoned the president at Camp David to tell him he was pulling the plug on a broad deal and would seek a more limited measure.
“Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt-reduction agreement without tax hikes,” Boehner said in a statement after the call.
No Stopgap Deal
Obama was still pressing for a broad agreement. He called a news conference on July 11 in which he ruled out the idea of signing a stopgap debt-limit boost and argued that the time was ripe for a major compromise to reduce the debt, whatever the political difficulties.
“We might as well do it now -- pull off the Band-Aid, eat our peas,” he said.
That didn’t stop Republican resistance. Senate Republican Leader Mitch McConnell of Kentucky proposed a fallback plan on July 12 -- a “last choice” option, he called it -- that would allow Obama to unilaterally raise the debt ceiling $2.4 trillion in installments, requiring that the president lay out the same amount of spending cuts and giving Republicans several opportunities to vote “no.”
At the close of a White House meeting July 13, Cantor pressed Obama about a shorter-term debt measure, prompting a testy response from the usually low-key president.
More Than Reagan
Leaning back from the table, Obama told Cantor that he’d been personally negotiating the details of the debt deal for weeks -- more than Ronald Reagan or George W. Bush would have done -- because he wanted to reach a deal that was important for the country. If Republicans sent him legislation he couldn’t accept, he’d veto it and take it to the American people, Obama said before closing the meeting.
Republicans announced they would move forward the next week with legislation that would slash spending, cap future expenditures, and condition a $2.4 trillion debt-ceiling increase on passage of a balanced budget constitutional amendment. Behind the scenes, though, Boehner and Cantor began serious talks with Obama’s staff on a major compromise.
The House Republicans invited Obama’s chief of staff Bill Daley and Treasury Secretary Timothy Geithner to Boehner’s Capitol office suite on July 15 for a quiet meeting on a framework for a tax overhaul, according to House Republican leadership aides.
Cutting Medicare
Over coffee and bagels at the White House July 17, with Obama popping in periodically to check their progress, the four negotiators, now joined by Lew, moved toward a deal to slash discretionary spending by $1.2 trillion over a decade and set a process for overhauling entitlements and the tax code within six to eight months to save trillions more.
The White House would agree to cut $250 billion from Medicare and trim Social Security benefits through a change in the way their annual increase is calculated. Republicans would agree to a tax rewrite that would raise no more than $800 billion while lowering rates, a number blessed by Geithner, the Republican aides said.
The two sides remained divided over key details, including an enforcement mechanism to ensure the entitlement and tax targets were met. The White House rejected the Republicans’ idea that future borrowing authority be conditioned on achieving the goals, and Republicans opposed Obama’s insistence on raising taxes on high earners while keeping them at the same level for the middle class in the event the promised debt savings didn’t materialize, the aides said.
‘Grand Bargain’
On July 19, as Boehner’s staff awaited a counterproposal from Obama’s aides, Democratic Senator Mark Warner of Virginia and Republican Senator Saxby Chambliss of Georgia, co-leaders of the Gang of Six, stood before about 50 senators in an ornate room on the first floor of the Capitol and pitched their long- awaited “grand bargain.” Obama made a surprise appearance in the White House briefing room to commend the outline, and Treasuries rallied on expectations of a long-term debt-reduction deal.
The president’s team told Boehner’s that their bottom line had changed based on the framework, a message Obama delivered to the speaker in person the next day at the White House, the Republican aides said. An administration official said the senators’ plan had changed the political dynamics in the push for a deal, making it harder to attract Democratic support for a proposal with a smaller revenue increase.
Obama Rebuffed
Still, Obama had no inkling Boehner was abandoning the talks until he began having trouble getting the speaker on the phone and Jackson stopped returning e-mails beginning the evening of July 21. Boehner’s office informed the president on July 22 at about 3:30 p.m. that the speaker would call Obama in two hours. Obama said he wanted to talk to Boehner right then and was rebuffed, administration officials told reporters.
The call came in as scheduled, not long after House Republican leadership aides finished briefing reporters about Boehner’s decision.
“Up until sometime early today when I couldn’t get a phone call returned, my expectation was that Speaker Boehner was going to be willing to go to his caucus and ask them to do the tough thing, but the right thing. I think it has proven difficult for Speaker Boehner,” Obama said at the White House.
“In the end,” Boehner wrote in a letter to Republican lawmakers detailing his decision, “we couldn’t connect.”
--With assistance from Mike Dorning, Kate Andersen Brower and Laura Litvan. Editors: Robin Meszoly, Mark McQuillan
To contact the reporter on this story: Julie Hirschfeld Davis in Washington at Jdavis159@bloomberg.net.
To contact the editor responsible for this story: Mark Silva at msilva@bloomberg.net
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Obama Open to Short-Term Debt Increase Tied to Major Deal
Story Tools
add to Business Exchange
By Julie Hirschfeld Davis
July 23 (Bloomberg) -- President Barack Obama, running out of time to strike a deal to raise the U.S. debt ceiling, had some bad news for House Speaker John Boehner on July 20.
The tax overhaul they had been discussing to raise $800 billion in revenue over a decade had to be bigger, Obama told Boehner and House Majority Leader Eric Cantor during an evening meeting in the Oval Office. Obama’s new offer: $1.2 trillion.
A new proposal by the “Gang of Six,” a bipartisan group of senators who were calling for $3.7 trillion in budget savings over 10 years to slash the deficit, had changed the dynamics of the accord that Obama and Boehner had been negotiating in closed-door talks for weeks, the president told the speaker.
The group, praised by both senior Republicans and Democrats for its mix of spending cuts and tax increases, proposed a bigger revenue target than Obama and Boehner were considering, according to officials on Capitol Hill and at the White House who gave their accounts of the talks on condition of anonymity.
And Obama, who had called for months for the sort of grand bargain the gang was offering, was going to have a hard time selling a deal that stopped short of that.
The turnabout ultimately led Boehner to walk out of the talks, he said last night, unraveling the progress that had been made toward a sweeping compromise to slice $3.5 trillion from the nation’s debt and raise the $14.3 trillion debt ceiling before a default threatened Aug. 2.
Back to Beginning
The breakdown sent both sides back to the beginning with little room left to reach a deal to boost the nation’s borrowing authority in time to head off the default. Congressional leaders from both parties are to meet today at the White House in an effort to reach an accord.
“It’s the president who walked away from his agreement and demanded more money at the last minute,” Boehner, of Ohio, told reporters at an evening news conference on Capitol Hill, hours after calling Obama to tell him he was abandoning their negotiations. “Dealing with the White House is like dealing with a bowl of jello.”
It was the final breakdown in the private negotiations between Obama and Boehner over a politically challenging debt- reduction agreement both were eager to reach.
“We had very intense negotiations,” Obama said last night. “I’ve been left at the altar now a couple of times.”
The courtship began June 18, when Obama, 49, invited Boehner, 61, for a round of golf at Andrews Air Force Base. The two teamed up against Vice President Joe Biden, who was spearheading bipartisan talks on the deficit with congressional leaders, and Ohio Governor John Kasich, a friend of Boehner’s.
Bonding Session
More bonding session than policy debate, the president and the speaker beat Kasich and Biden, winning $2 each. Still, the golf date proved a turning point, spurring Obama and Boehner to begin one-on-one talks on a broad compromise. Four days later, Boehner was at the White House meeting privately with Obama to sketch out what the deal could look like.
The following day, Cantor, a Virginia Republican who has cultivated a close relationship with Tea Party-backed lawmakers leading the call for spending cuts, abandoned the bipartisan Biden-led talks after a half-dozen meetings. He said Democrats’ insistence on raising taxes made an agreement impossible. The group had been making slow but steady progress, identifying more than $1 trillion in spending cuts the two parties could agree on.
The following week, Obama held a news conference in which he accused Republicans of siding with corporate-jet owners over children and the elderly in the negotiations, and compared Congress’s work ethic unfavorably with that of his pre-teen daughters.
Dire Consequences
“The yellow light is flashing,” Obama said during the June 30 news conference, warning of dire consequences if Congress didn’t raise the borrowing limit before Aug. 2. Standard & Poor’s said it would downgrade U.S. debt to junk status in the event of a default, and the Senate canceled its July 4 recess to continue talking.
The following Sunday, July 3, Boehner and Obama met secretly at the White House to continue their talks. Enough progress was made that Obama appeared at a White House briefing on July 5 to say the nation had “a unique opportunity to do something big to tackle our deficit,” and announce he was summoning congressional leaders from both parties for talks at the White House July 7.
At the roughly 90-minute meeting, Obama polled congressional leaders about what kind of deal they were seeking -- a limited one of between $2 trillion and $2.5 trillion over a decade, a medium-size agreement yielding about $3 trillion, or a big deal to cut $4 trillion off the debt.
Obama and Boehner both wanted to go big.
‘No Imminent Deal’
Still, Boehner -- cognizant of intense opposition among Republicans to any agreement that raised taxes -- cautioned that there was “no imminent deal about to happen,” saying there remained “serious disagreements.”
“We are this far apart,” Boehner told reporters, spreading his arms to indicate the gulf between himself and the president. Yet behind the scenes, his staff and Obama’s were beginning to exchange paper on the contours of a compromise to bridge that divide.
The White House was willing to consider major changes to Medicare, Medicaid and Social Security, including benefit cuts, that had previously been considered off-limits. Boehner was willing to discuss a tax overhaul that would raise revenue, until then dismissed by the Republicans as a tax increase.
Boehner’s aides, including Chief of Staff Barry Jackson and Policy Director Brett Loper, were haggling with Obama’s budget director Jack Lew and legislative liaison Rob Nabors on the details. Resistance was brewing in both parties to such a deal.
Pelosi Displeased
Meeting at the White House with Obama on July 8, House Minority Leader Nancy Pelosi of California vented her displeasure about the prospect of including Social Security and Medicare cuts in any deal, and told him such a package wouldn’t garner support among congressional Democrats.
On Capitol Hill, Boehner and other House leaders held a press conference to reiterate their opposition to tax increases. Still, negotiations continued into Saturday morning July 9, when a round of negotiating among Boehner’s and Obama’s aides yielded little progress in breaking remaining stalemates over details of the tax rewrite and entitlement cuts.
Later that day, Boehner phoned the president at Camp David to tell him he was pulling the plug on a broad deal and would seek a more limited measure.
“Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt-reduction agreement without tax hikes,” Boehner said in a statement after the call.
No Stopgap Deal
Obama was still pressing for a broad agreement. He called a news conference on July 11 in which he ruled out the idea of signing a stopgap debt-limit boost and argued that the time was ripe for a major compromise to reduce the debt, whatever the political difficulties.
“We might as well do it now -- pull off the Band-Aid, eat our peas,” he said.
That didn’t stop Republican resistance. Senate Republican Leader Mitch McConnell of Kentucky proposed a fallback plan on July 12 -- a “last choice” option, he called it -- that would allow Obama to unilaterally raise the debt ceiling $2.4 trillion in installments, requiring that the president lay out the same amount of spending cuts and giving Republicans several opportunities to vote “no.”
At the close of a White House meeting July 13, Cantor pressed Obama about a shorter-term debt measure, prompting a testy response from the usually low-key president.
More Than Reagan
Leaning back from the table, Obama told Cantor that he’d been personally negotiating the details of the debt deal for weeks -- more than Ronald Reagan or George W. Bush would have done -- because he wanted to reach a deal that was important for the country. If Republicans sent him legislation he couldn’t accept, he’d veto it and take it to the American people, Obama said before closing the meeting.
Republicans announced they would move forward the next week with legislation that would slash spending, cap future expenditures, and condition a $2.4 trillion debt-ceiling increase on passage of a balanced budget constitutional amendment. Behind the scenes, though, Boehner and Cantor began serious talks with Obama’s staff on a major compromise.
The House Republicans invited Obama’s chief of staff Bill Daley and Treasury Secretary Timothy Geithner to Boehner’s Capitol office suite on July 15 for a quiet meeting on a framework for a tax overhaul, according to House Republican leadership aides.
Cutting Medicare
Over coffee and bagels at the White House July 17, with Obama popping in periodically to check their progress, the four negotiators, now joined by Lew, moved toward a deal to slash discretionary spending by $1.2 trillion over a decade and set a process for overhauling entitlements and the tax code within six to eight months to save trillions more.
The White House would agree to cut $250 billion from Medicare and trim Social Security benefits through a change in the way their annual increase is calculated. Republicans would agree to a tax rewrite that would raise no more than $800 billion while lowering rates, a number blessed by Geithner, the Republican aides said.
The two sides remained divided over key details, including an enforcement mechanism to ensure the entitlement and tax targets were met. The White House rejected the Republicans’ idea that future borrowing authority be conditioned on achieving the goals, and Republicans opposed Obama’s insistence on raising taxes on high earners while keeping them at the same level for the middle class in the event the promised debt savings didn’t materialize, the aides said.
‘Grand Bargain’
On July 19, as Boehner’s staff awaited a counterproposal from Obama’s aides, Democratic Senator Mark Warner of Virginia and Republican Senator Saxby Chambliss of Georgia, co-leaders of the Gang of Six, stood before about 50 senators in an ornate room on the first floor of the Capitol and pitched their long- awaited “grand bargain.” Obama made a surprise appearance in the White House briefing room to commend the outline, and Treasuries rallied on expectations of a long-term debt-reduction deal.
The president’s team told Boehner’s that their bottom line had changed based on the framework, a message Obama delivered to the speaker in person the next day at the White House, the Republican aides said. An administration official said the senators’ plan had changed the political dynamics in the push for a deal, making it harder to attract Democratic support for a proposal with a smaller revenue increase.
Obama Rebuffed
Still, Obama had no inkling Boehner was abandoning the talks until he began having trouble getting the speaker on the phone and Jackson stopped returning e-mails beginning the evening of July 21. Boehner’s office informed the president on July 22 at about 3:30 p.m. that the speaker would call Obama in two hours. Obama said he wanted to talk to Boehner right then and was rebuffed, administration officials told reporters.
The call came in as scheduled, not long after House Republican leadership aides finished briefing reporters about Boehner’s decision.
“Up until sometime early today when I couldn’t get a phone call returned, my expectation was that Speaker Boehner was going to be willing to go to his caucus and ask them to do the tough thing, but the right thing. I think it has proven difficult for Speaker Boehner,” Obama said at the White House.
“In the end,” Boehner wrote in a letter to Republican lawmakers detailing his decision, “we couldn’t connect.”
--With assistance from Mike Dorning, Kate Andersen Brower and Laura Litvan. Editors: Robin Meszoly, Mark McQuillan
To contact the reporter on this story: Julie Hirschfeld Davis in Washington at Jdavis159@bloomberg.net.
To contact the editor responsible for this story: Mark Silva at msilva@bloomberg.net
Man Charged in Deadliest Norway Attacks Since World War II
July 23, 2011, 6:10 AM EDT
More From Businessweek
Oslo Bombing Kills Seven, Gunman Leaves More Dead in Dual Attack
Norway Police Confirms Seven Dead From Explosion in Oslo
Democrats Balk at Possible Debt-Limit Deal as Deadline Looms
Merkel, Sarkozy to Outline Joint Greek Position at Summit
Obama Open to Short-Term Debt Increase Tied to Major Deal
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add to Business Exchange
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By Josiane Kremer and Stephen Treloar
(Adds Clinton comment in 13th paragraph.)
July 23 (Bloomberg) -- Twin attacks in Norway, the deadliest since World War II, left 91 people dead after a gunman killed 84 people at a youth camp on an island near Oslo and a bomb explosion in the center of the capital killed seven people.
A 32-year-old Norwegian man was arrested on the island of Utoeya, about 40 kilometers (25 miles) from Oslo, and authorities have begun interrogating the suspect, police said at a press briefing today. The same person is likely behind the bombing and the shootings on the island, they said. The suspect’s name is Anders Behring Breivik, local media reported. Police declined to confirm the suspect’s name.
The man has been charged on two counts of “dangerous crime to society,” which means he could be sentenced to 21 years in prison, Norway’s toughest punishment, Roger Andresen, deputy Oslo police chief, told reporters today. The man is a Christian fundamentalist with right-wing tendencies, Andresen said.
The blast in central Oslo shattered windows at the office of Prime Minister Jens Stoltenberg. Hundreds of youths were attending the camp organized by the youth wing of Stoltenberg’s Labor Party.
“Not since World War II has our country experienced a greater tragedy,” Stoltenberg said in a speech today. “For me, Utoeya was the paradise island of my youth that was transformed into hell.”
“The search may take a while as the island has a number of buildings and forested areas,” Anders Frydenberg, a spokesman for Oslo police, said by telephone today. He declined to say whether police believe the shooting was carried out by a single gunman or multiple people and declined to comment on the motives for the attack.
Man in Custody
“The police are not going to confirm his name,” Frydenberg said. “We have a man in custody and are asking him questions about shooting episodes at the island. We are still talking to him.”
Police “see a connection between the attack in Oslo center and the attack on the island because both attacks are at political sites in Norway,” he said. “The bomb blast in Oslo center was toward government buildings, which are being ruled by the Labor party. The youth camp was a Labor party youth camp. That’s the connection between the two attacks.”
Stoltenberg, called the attack on his office “cowardly” and said it wouldn’t interrupt government functioning. Stoltenberg was due to appear today at the youth gathering on Utoeya, Sponheim said. The suspected shooter, who wore a police uniform, wasn’t a police officer, he said.
‘A Lot Unclear’
Swedish Prime Minister Fredrik Reinfeldt said he contacted Stoltenberg to convey his condolences. “From a Swedish perspective, we’re following the ongoing development,” he said. “There is still a lot that is unclear about what has happened.”
Neighboring Sweden had a brush with what police treated as a possible terrorist attack in December when a suicide bomber injured two people in central Stockholm.
Danish Prime Minister Lars Loekke Rasmussen sent a statement conveying his “deepest sympathy and solidarity” with the Norwegian people. U.K. Foreign Secretary William Hague described the bombing in a press release as “horrific.” China, Australia and New Zealand condemned the attack and expressed their condolences.
‘Peaceful People’
U.S. Secretary of State Hillary Clinton broke away from her prepared remarks at an entrepreneurship event in Bali, Indonesia, to express sympathy.
“This tragedy strikes right at the heart and soul of a peaceful people,” the top U.S. Diplomat said. “Norway is well known for its efforts to resolve conflict and bring people together.”
Before the explosion, a car drove into the government quarter, the police said in a statement. No government ministers were hurt, Stoltenberg told broadcaster NRK.
Eirik Borg, a back office worker at stockbrokerage Fearnley Fonds based near the scene, said he saw smoke billowing from the government quarter after hearing the blast.
‘Hard Impact’
“We felt the impact very hard throughout the building,” Borg said in a phone interview. “All the windows were breaking and we actually thought lightning hit our roof. From our terrace, we saw white smoke.”
The bombing initially sent Norway’s currency and stocks lower. The krone weakened as much as 1 percent against the dollar and was trading 0.4 percent lower at 8:30 p.m. local time yesterday. Against the euro, the krone was little changed at 7.7851 after losing as much as 0.4 percent. The benchmark OBX stock index fell as much as 0.4 percent before closing little changed.
“Large sections of the center of Oslo have been evacuated and the police are urging people to stay away from the center of the city and limit their use of mobile phones,” police said in a statement. Sponheim said police don’t expect further blasts.
The country’s Ministry of Petroleum suffered “massive damage” as a consequence of the blast, spokesman Haakon Smith- Isaksen said by phone. Norway is the world’s seventh-largest oil exporter.
“There was a huge explosion, the windows just blew out,” Smith-Isaken said. “There is much debris, people are injured.”
--With assistance from Frances Schwartzkopff in Copenhagen, Kati Pohjanpalo and Diana ben-Aaron in Helsinki, Ola Kinnander, Johan Carlstrom, Adam Ewing, Kim McLaughlin and Toby Alder in Stockholm. Editors: Chad Thomas, Marianne Stigset
To contact the reporters on this story: Josiane Kremer in Oslo at jkremer4@bloomberg.net; Stephen Treloar in Oslo at streloar1@bloomberg.net
To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net
More From Businessweek
Oslo Bombing Kills Seven, Gunman Leaves More Dead in Dual Attack
Norway Police Confirms Seven Dead From Explosion in Oslo
Democrats Balk at Possible Debt-Limit Deal as Deadline Looms
Merkel, Sarkozy to Outline Joint Greek Position at Summit
Obama Open to Short-Term Debt Increase Tied to Major Deal
Story Tools
add to Business Exchange
By Josiane Kremer and Stephen Treloar
(Adds Clinton comment in 13th paragraph.)
July 23 (Bloomberg) -- Twin attacks in Norway, the deadliest since World War II, left 91 people dead after a gunman killed 84 people at a youth camp on an island near Oslo and a bomb explosion in the center of the capital killed seven people.
A 32-year-old Norwegian man was arrested on the island of Utoeya, about 40 kilometers (25 miles) from Oslo, and authorities have begun interrogating the suspect, police said at a press briefing today. The same person is likely behind the bombing and the shootings on the island, they said. The suspect’s name is Anders Behring Breivik, local media reported. Police declined to confirm the suspect’s name.
The man has been charged on two counts of “dangerous crime to society,” which means he could be sentenced to 21 years in prison, Norway’s toughest punishment, Roger Andresen, deputy Oslo police chief, told reporters today. The man is a Christian fundamentalist with right-wing tendencies, Andresen said.
The blast in central Oslo shattered windows at the office of Prime Minister Jens Stoltenberg. Hundreds of youths were attending the camp organized by the youth wing of Stoltenberg’s Labor Party.
“Not since World War II has our country experienced a greater tragedy,” Stoltenberg said in a speech today. “For me, Utoeya was the paradise island of my youth that was transformed into hell.”
“The search may take a while as the island has a number of buildings and forested areas,” Anders Frydenberg, a spokesman for Oslo police, said by telephone today. He declined to say whether police believe the shooting was carried out by a single gunman or multiple people and declined to comment on the motives for the attack.
Man in Custody
“The police are not going to confirm his name,” Frydenberg said. “We have a man in custody and are asking him questions about shooting episodes at the island. We are still talking to him.”
Police “see a connection between the attack in Oslo center and the attack on the island because both attacks are at political sites in Norway,” he said. “The bomb blast in Oslo center was toward government buildings, which are being ruled by the Labor party. The youth camp was a Labor party youth camp. That’s the connection between the two attacks.”
Stoltenberg, called the attack on his office “cowardly” and said it wouldn’t interrupt government functioning. Stoltenberg was due to appear today at the youth gathering on Utoeya, Sponheim said. The suspected shooter, who wore a police uniform, wasn’t a police officer, he said.
‘A Lot Unclear’
Swedish Prime Minister Fredrik Reinfeldt said he contacted Stoltenberg to convey his condolences. “From a Swedish perspective, we’re following the ongoing development,” he said. “There is still a lot that is unclear about what has happened.”
Neighboring Sweden had a brush with what police treated as a possible terrorist attack in December when a suicide bomber injured two people in central Stockholm.
Danish Prime Minister Lars Loekke Rasmussen sent a statement conveying his “deepest sympathy and solidarity” with the Norwegian people. U.K. Foreign Secretary William Hague described the bombing in a press release as “horrific.” China, Australia and New Zealand condemned the attack and expressed their condolences.
‘Peaceful People’
U.S. Secretary of State Hillary Clinton broke away from her prepared remarks at an entrepreneurship event in Bali, Indonesia, to express sympathy.
“This tragedy strikes right at the heart and soul of a peaceful people,” the top U.S. Diplomat said. “Norway is well known for its efforts to resolve conflict and bring people together.”
Before the explosion, a car drove into the government quarter, the police said in a statement. No government ministers were hurt, Stoltenberg told broadcaster NRK.
Eirik Borg, a back office worker at stockbrokerage Fearnley Fonds based near the scene, said he saw smoke billowing from the government quarter after hearing the blast.
‘Hard Impact’
“We felt the impact very hard throughout the building,” Borg said in a phone interview. “All the windows were breaking and we actually thought lightning hit our roof. From our terrace, we saw white smoke.”
The bombing initially sent Norway’s currency and stocks lower. The krone weakened as much as 1 percent against the dollar and was trading 0.4 percent lower at 8:30 p.m. local time yesterday. Against the euro, the krone was little changed at 7.7851 after losing as much as 0.4 percent. The benchmark OBX stock index fell as much as 0.4 percent before closing little changed.
“Large sections of the center of Oslo have been evacuated and the police are urging people to stay away from the center of the city and limit their use of mobile phones,” police said in a statement. Sponheim said police don’t expect further blasts.
The country’s Ministry of Petroleum suffered “massive damage” as a consequence of the blast, spokesman Haakon Smith- Isaksen said by phone. Norway is the world’s seventh-largest oil exporter.
“There was a huge explosion, the windows just blew out,” Smith-Isaken said. “There is much debris, people are injured.”
--With assistance from Frances Schwartzkopff in Copenhagen, Kati Pohjanpalo and Diana ben-Aaron in Helsinki, Ola Kinnander, Johan Carlstrom, Adam Ewing, Kim McLaughlin and Toby Alder in Stockholm. Editors: Chad Thomas, Marianne Stigset
To contact the reporters on this story: Josiane Kremer in Oslo at jkremer4@bloomberg.net; Stephen Treloar in Oslo at streloar1@bloomberg.net
To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net
Markets Call For Debt Deals Now!
By Mike Conlon, ForexNews.com on Jul 20, 2011 12:45:00 GMT
There is major optimism that tomorrow’s meeting of EU Finance Ministers in Brussels is going to produce a sensible solution to the debt crisis in Europe which means that the politics of doing the unpopular have been cast aside. This could come in the form of the bond buying from the emergency lending facility, which would essentially be quantitative easing to help keep individual countries’ yields low and then allow them to buy back later.
This situation practically mirrors what is going on here in the US with the debt ceiling debate, as the markets will take any solution at this point. While I personally don’t believe it’s a good idea to raise taxes in this economic climate, fixing loopholes is not the same thing. If unemployment gets worse as a result, then let the leaders bear the blame.
But we have been down this road before, where the markets anticipate a deal because they are weary and because it makes perfect sense; and then the politicians defy logic. By the end of this week we should have more clarity, and the risk appetite in the market is reflecting that sentiment.
In the UK, the release of the BOE rate policy meeting minutes confirmed there was no change of stance, though some have noted that there may be lesser resolve for additional bond purchases.
In the US, existing home sales are due out later this morning and yesterdays housing starts numbers surprised to the upside, showing that the housing market may not be dead just yet.
So this all adds up to risk taking this morning, with stocks and oil higher, and gold giving back prices gains as it sheds some of its safe haven status.
In the forex market:
Aussie (AUD): The Aussie is mostly higher on risk themes despite an index of leading indicators number that came in slightly negative, showing a decline of .1%. More pressing was the release of the RBA minutes, which showed that Central bank might not move on rates for some time.
Kiwi (NZD): The Kiwi is also mostly higher ahead of tomorrow’s release of consumer confidence figures. One item that has escaped attention is that the Chinese Yuan has appreciated the most in nearly 17 years (though still less than the weekly swings in Euro), which could be good for NZ exports.
Loonie (CAD): The Loonie continues to approach 2011 highs vs. USD after yesterday’s hawkish statement from the BOC at the rate decision. Today’s release of the monetary policy report may confirm that if not for global instability, rates might be higher. Oil back to $99 is also pushing Loonie.
Euro (EUR): It’s make-or-break time for the Euro this week as the entire globe is looking for a resolution to the debt crisis. The major impediment so far has been German political opposition, but as world opinion moves against them, they may be forced to bite the bullet. While no one expects the solution to emerge tomorrow from the meeting in Brussels, the market is optimistic that significant steps will be taken. (Click chart to enlarge)
Pound (GBP): The Pound is bouncing off of earlier lows as the indeed the BOE confirmed that they are willing to turn a blind eye to inflation (some say up to CPI gains of 5%!) in order to ride out the government austerity. Tomorrow’s retail sales figures will show whether or not the consumer in the UK is active, or if they are heading straight for stagflation. (Click chart to enlarge)
Swissie (CHF): The Swissie has been the most-favored safe haven currency of late so naturally it is giving back some of those gains as risk appetite has increased due to increased market optimism. Tomorrow’s trade balance figures will show whether or not a stronger currency has damaged the trade balance significantly.
Dollar (USD): The market is hoping that yesterday’s news on housing starts carries over to existing home sales figures due out later this morning. However, if the data begins to improve too much, then the market may assume that QE3 is off of the table which may cause some Dollar strength. What is more likely though is that good news will be received well by the stock market, which has been reporting great corporate earnings.
Yen (JPY): The Yen is mostly lower as safe haven demand has lessened. If the global economy can get past these two major debt hurdles, then it could be game on again for significant carry trades.
Markets are a forward-looking and discounting mechanism so gains we are seeing now are in anticipation of these debt problems getting fixed. This in and of itself does not mean that deals have been reached, however.
The politics surrounding all of these deals has been the major impediment so far, so the markets are saying just get it done. Uncertainty at this point is worse than bad policy and while the devil is in the details, the markets will decide later whether or not they approve. Let’s face it, I have very little confidence that any of these deals will be perfect, so just let the chips fall where they may.
If the markets do not see significant progress or agreements in principle to resolve these issues, then we could see this week’s gains vanish. For that is the problem with rising expectations; the letdowns hurt that much more!
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!
There is major optimism that tomorrow’s meeting of EU Finance Ministers in Brussels is going to produce a sensible solution to the debt crisis in Europe which means that the politics of doing the unpopular have been cast aside. This could come in the form of the bond buying from the emergency lending facility, which would essentially be quantitative easing to help keep individual countries’ yields low and then allow them to buy back later.
This situation practically mirrors what is going on here in the US with the debt ceiling debate, as the markets will take any solution at this point. While I personally don’t believe it’s a good idea to raise taxes in this economic climate, fixing loopholes is not the same thing. If unemployment gets worse as a result, then let the leaders bear the blame.
But we have been down this road before, where the markets anticipate a deal because they are weary and because it makes perfect sense; and then the politicians defy logic. By the end of this week we should have more clarity, and the risk appetite in the market is reflecting that sentiment.
In the UK, the release of the BOE rate policy meeting minutes confirmed there was no change of stance, though some have noted that there may be lesser resolve for additional bond purchases.
In the US, existing home sales are due out later this morning and yesterdays housing starts numbers surprised to the upside, showing that the housing market may not be dead just yet.
So this all adds up to risk taking this morning, with stocks and oil higher, and gold giving back prices gains as it sheds some of its safe haven status.
In the forex market:
Aussie (AUD): The Aussie is mostly higher on risk themes despite an index of leading indicators number that came in slightly negative, showing a decline of .1%. More pressing was the release of the RBA minutes, which showed that Central bank might not move on rates for some time.
Kiwi (NZD): The Kiwi is also mostly higher ahead of tomorrow’s release of consumer confidence figures. One item that has escaped attention is that the Chinese Yuan has appreciated the most in nearly 17 years (though still less than the weekly swings in Euro), which could be good for NZ exports.
Loonie (CAD): The Loonie continues to approach 2011 highs vs. USD after yesterday’s hawkish statement from the BOC at the rate decision. Today’s release of the monetary policy report may confirm that if not for global instability, rates might be higher. Oil back to $99 is also pushing Loonie.
Euro (EUR): It’s make-or-break time for the Euro this week as the entire globe is looking for a resolution to the debt crisis. The major impediment so far has been German political opposition, but as world opinion moves against them, they may be forced to bite the bullet. While no one expects the solution to emerge tomorrow from the meeting in Brussels, the market is optimistic that significant steps will be taken. (Click chart to enlarge)
Pound (GBP): The Pound is bouncing off of earlier lows as the indeed the BOE confirmed that they are willing to turn a blind eye to inflation (some say up to CPI gains of 5%!) in order to ride out the government austerity. Tomorrow’s retail sales figures will show whether or not the consumer in the UK is active, or if they are heading straight for stagflation. (Click chart to enlarge)
Swissie (CHF): The Swissie has been the most-favored safe haven currency of late so naturally it is giving back some of those gains as risk appetite has increased due to increased market optimism. Tomorrow’s trade balance figures will show whether or not a stronger currency has damaged the trade balance significantly.
Dollar (USD): The market is hoping that yesterday’s news on housing starts carries over to existing home sales figures due out later this morning. However, if the data begins to improve too much, then the market may assume that QE3 is off of the table which may cause some Dollar strength. What is more likely though is that good news will be received well by the stock market, which has been reporting great corporate earnings.
Yen (JPY): The Yen is mostly lower as safe haven demand has lessened. If the global economy can get past these two major debt hurdles, then it could be game on again for significant carry trades.
Markets are a forward-looking and discounting mechanism so gains we are seeing now are in anticipation of these debt problems getting fixed. This in and of itself does not mean that deals have been reached, however.
The politics surrounding all of these deals has been the major impediment so far, so the markets are saying just get it done. Uncertainty at this point is worse than bad policy and while the devil is in the details, the markets will decide later whether or not they approve. Let’s face it, I have very little confidence that any of these deals will be perfect, so just let the chips fall where they may.
If the markets do not see significant progress or agreements in principle to resolve these issues, then we could see this week’s gains vanish. For that is the problem with rising expectations; the letdowns hurt that much more!
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!
EU Does Their Part!
By Mike Conlon, ForexNews.com on Jul 22, 2011 01:21:21 GMT
Yesterday’s market reaction to the news out of the EU could not have been a more perfect scenario for those searching for a ray of hope that the global economy might actually be able to move forward. News out of Brussels was that indeed a solution to the Euro debt crisis had been agreed upon, going a lot further than most had thought possible.
While the markets are still trying to judge the merits of the resolution, the EU took some bold steps to try to stem the crisis. Some of the highlights: Greece gets a larger bailout—but needs to enact major austerity to receive it; Greece gets AAA-rated terms for borrowing from the ECB and EFSF, as does Portugal and Ireland if needed; the ECB will buy bonds and essentially be a “bidder of last resort”, all but daring speculators to try to drive yields higher on Spain, Italy, or others (think ‘don’t fight the Fed’). These are extraordinary measures that will give the debt-burdened countries a chance at redemption. However, the question remains as to whether or not the austerity required is too draconian, and the likelihood that it can be accomplished. One other thing to note however is that the EFSF was not expanded so the size of the emergency facility remains at 440 billion euros, which hopefully is enough to manage future liquidity issues.
While this serves the markets purposes for now, it appears likely that the EU economy is going to shrink in size as austerity is enacted throughout the region. One early sign is that German IFO confidence figures have come in lower than expected, though Euro zone industrial orders picked up for the month.
The rally that took place yesterday has followed through to this morning, with stocks in Asia and Europe up overnight, as are commodities. Next up is the US debt ceiling debate, and the politics surrounding it has gotten so nasty that it’s almost become comical. A deal will definitely get done and the only question is at whose expense.
In the forex market:
Aussie (AUD): The Aussie is mostly higher, easily clearing the resistance identified yesterday at 1.08 vs. USD. Export and import prices have risen, which could give rise to inflation down under.
Kiwi (NZD): The Kiwi is has rocketed higher to 86.75, just south of my target of .87 from earlier this weak. Inflation expectations are rising, which means that so are interest rate hike expectations as well.
Loonie (CAD): The only other fundamental data out his morning has come from Canada, which reported lower than expected CPI data that has sent the Loonie lower, despite oil trading up to $100. Core CPI came in at 1.3% vs. an expectation of 1.9%, and the headline figure came in at 3.1% vs. an expected 3.6%. This may buy the BOC time to allow the economy to continue with lower rates as prices seemingly are under control. Better than expected retail sales figures showed a gain of .5% vs. an expected .3%, which shows economic improvement. (Click chart to enlarge)
Euro (EUR): The Euro has pulled back some to under 1.44 vs. USD as markets are set to open slightly lower here in the US. While the market seemed pleased with the initial resolution form yesterday, as more is learned about the deal, the less enamored the markets may become. (Click chart to enlarge)
Pound (GBP): The Pound is also pulling back after yesterday’s rally and with no news on the docket may be a victim of having traveled too far, too fast.
Swissie (CHF): The SNB has been thankful of late that risk is abating in the global economy as the franc becomes less desirable when safe-havens are out of favor.
Dollar (USD): I’ve read some analyses that claim that yesterday’s massive moves were more a function of Dollar weakness than Euro strength. The markets are looking for any indication that the global economy is stabilizing, as the appetite for risk is increasing as cheap money floods the globe. We need a compromise on the debt ceiling debate to really instill confidence.
Yen (JPY): The Yen is picking up some strength as risk appetites are turning to risk aversion as the morning moves forward. Nevertheless it was lower yesterday as carry trades were re-established.
As I said yesterday, “buy the rumor, sell the news”. While the Euro debt crisis resolution may be better news than expected, the devil is always in the details. As the markets start the comprehend all that needs to be done, opinions over the deal may change.
While we are seeing a pull-back in the early action here in the US, this could be more of a function of jittery markets still being fearful heading into the weekend. The debt ceiling debate rages on here in the US and should it seem less likely that a deal can be reached, then the markets may react quickly.
So now it is up to the US, and hopefully we can cast the politics aside for the better of all and not just a specific political base.
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!
Yesterday’s market reaction to the news out of the EU could not have been a more perfect scenario for those searching for a ray of hope that the global economy might actually be able to move forward. News out of Brussels was that indeed a solution to the Euro debt crisis had been agreed upon, going a lot further than most had thought possible.
While the markets are still trying to judge the merits of the resolution, the EU took some bold steps to try to stem the crisis. Some of the highlights: Greece gets a larger bailout—but needs to enact major austerity to receive it; Greece gets AAA-rated terms for borrowing from the ECB and EFSF, as does Portugal and Ireland if needed; the ECB will buy bonds and essentially be a “bidder of last resort”, all but daring speculators to try to drive yields higher on Spain, Italy, or others (think ‘don’t fight the Fed’). These are extraordinary measures that will give the debt-burdened countries a chance at redemption. However, the question remains as to whether or not the austerity required is too draconian, and the likelihood that it can be accomplished. One other thing to note however is that the EFSF was not expanded so the size of the emergency facility remains at 440 billion euros, which hopefully is enough to manage future liquidity issues.
While this serves the markets purposes for now, it appears likely that the EU economy is going to shrink in size as austerity is enacted throughout the region. One early sign is that German IFO confidence figures have come in lower than expected, though Euro zone industrial orders picked up for the month.
The rally that took place yesterday has followed through to this morning, with stocks in Asia and Europe up overnight, as are commodities. Next up is the US debt ceiling debate, and the politics surrounding it has gotten so nasty that it’s almost become comical. A deal will definitely get done and the only question is at whose expense.
In the forex market:
Aussie (AUD): The Aussie is mostly higher, easily clearing the resistance identified yesterday at 1.08 vs. USD. Export and import prices have risen, which could give rise to inflation down under.
Kiwi (NZD): The Kiwi is has rocketed higher to 86.75, just south of my target of .87 from earlier this weak. Inflation expectations are rising, which means that so are interest rate hike expectations as well.
Loonie (CAD): The only other fundamental data out his morning has come from Canada, which reported lower than expected CPI data that has sent the Loonie lower, despite oil trading up to $100. Core CPI came in at 1.3% vs. an expectation of 1.9%, and the headline figure came in at 3.1% vs. an expected 3.6%. This may buy the BOC time to allow the economy to continue with lower rates as prices seemingly are under control. Better than expected retail sales figures showed a gain of .5% vs. an expected .3%, which shows economic improvement. (Click chart to enlarge)
Euro (EUR): The Euro has pulled back some to under 1.44 vs. USD as markets are set to open slightly lower here in the US. While the market seemed pleased with the initial resolution form yesterday, as more is learned about the deal, the less enamored the markets may become. (Click chart to enlarge)
Pound (GBP): The Pound is also pulling back after yesterday’s rally and with no news on the docket may be a victim of having traveled too far, too fast.
Swissie (CHF): The SNB has been thankful of late that risk is abating in the global economy as the franc becomes less desirable when safe-havens are out of favor.
Dollar (USD): I’ve read some analyses that claim that yesterday’s massive moves were more a function of Dollar weakness than Euro strength. The markets are looking for any indication that the global economy is stabilizing, as the appetite for risk is increasing as cheap money floods the globe. We need a compromise on the debt ceiling debate to really instill confidence.
Yen (JPY): The Yen is picking up some strength as risk appetites are turning to risk aversion as the morning moves forward. Nevertheless it was lower yesterday as carry trades were re-established.
As I said yesterday, “buy the rumor, sell the news”. While the Euro debt crisis resolution may be better news than expected, the devil is always in the details. As the markets start the comprehend all that needs to be done, opinions over the deal may change.
While we are seeing a pull-back in the early action here in the US, this could be more of a function of jittery markets still being fearful heading into the weekend. The debt ceiling debate rages on here in the US and should it seem less likely that a deal can be reached, then the markets may react quickly.
So now it is up to the US, and hopefully we can cast the politics aside for the better of all and not just a specific political base.
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!
Bernie Sanders: Let’s primary Obama
posted at 12:00 pm on July 24, 2011 by Jazz Shaw
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President Obama is under attack these days from all manner of nasty conservatives who don’t care for his liberal, big spending ways. They seem to have found an unlikely ally, though, in the person of the only officially declared socialist in Congress… Bernie Sanders. (Emphasis in original.)
SANDERS: Brian, believe me, I wish I had the answer to your question. Let me just suggest this. I think there are millions of Americans who are deeply disappointed in the president; who believe that, with regard to Social Security and a number of other issues, he said one thing as a candidate and is doing something very much else as a president; who cannot believe how weak he has been, for whatever reason, in negotiating with Republicans and there’s deep disappointment. So my suggestion is, I think one of the reasons the president has been able to move so far to the right is that there is no primary opposition to him and I think it would do this country a good deal of service if people started thinking about candidates out there to begin contrasting what is a progressive agenda as opposed to what Obama is doing. [...] So I would say to Ryan [sic] discouragement is not an option. I think it would be a good idea if President Obama faced some primary opposition.
It’s hard to say how much impact this will have, because traditionally Sanders hasn’t enjoyed a tremendous amount of influence outside his own state. But it is a sign of growing discontent with the political arm of his party. For better or worse, Obama is offering up some spending cuts which will effectively take the legs out from under most of the advertisements congressional Democrats are planning on running next year.
It’s difficult to talk about “Republicans destroying Medicare and Social Security as we know it” during the campaign if the titular leader of your party has just forced a vote on you to cut it yourself. It’s even tougher to talk about the need to “tax the rich” so everyone can “pay their fair share” if your President cuts deals to enact even bigger tax cuts than his predecessor. (Cuts which he already signed on to extending.)
Sanders can’t very well run against Obama himself in a primary since he’s not a registered Democrat. (Though, in theory, he could sign up at any time this year and still do it.) I suppose he’s expecting an actual Democrat to step up to the plate and do it for the sake of stopping Obama from running to the middle in a Clinton like move to secure a second term. Even so, given the President’s currently tanking numbers, I don’t expect a long line of Democratic leaders to step up and attempt this.
Pawlenty campaign manager: Bachmann won’t last over the long haul
posted at 1:00 pm on July 24, 2011 by Tina Korbe
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Tim Pawlenty’s campaign manager yesterday sent out an e-mail outlining Pawlenty’s accomplishments and assuring supporters that the former Minnesota governor’s fan club will continue to grow, while enthusiasm for other candidates — most implicitly, Michele Bachmann — will fade.
“In 2008, voters elected a member of Congress with no executive experience. We can’t afford the cost of inexperience any longer, and Iowans are getting that,” Ayers wrote. “[A]s more Republican primary voters start to tune in to the race, they are finding out that the governor’s record and message will stand the test [of] a brutal campaign. Other candidates’ records (or lack thereof), and plans for the future (or lack thereof) won’t.”
Even though Ayers never mentions Bachmann by name, it’s clear she’s the primary object of his statements.
Pawlenty’s persistent picking at Bachmann has drawn so much press attention that some even questioned whether the Pawlenty campaign planted the story of Bachmann’s supposedly “incapacitating” migraines. The Washington Post’s Jennifer Rubin explains how that insinuation — and the Pawlenty campaign’s failure to completely dispense with it — continues to plague Pawlenty’s prospects:
In essence, the campaign’s defense is that they let the press run with a story without effectively rebutting it. If that is the case, and there is no definitive proof at this point to suggest otherwise, this will only multiply concerns that Pawlenty’s campaign is not firing on all cylinders. In any event, the issue has now created another worrisome distraction for Pawlenty, who has failed to make a dent in the polls and needs to finish near the top of the pack in Ames.
Meantime, Bachmann’s own handling of the headache issue has actually served her well. This weekend, she even slipped in a witty quip about her “condition” during an Iowa appearance:
Michele Bachmann went beyond her prepared statement about her migraines during an Iowa appearance today, making a joke about the story that dominated the 2012 coverage for much of last week:
“This week, they were talking about me and headaches. All I want you to know is I’ve been giving a lot more headaches in Washington than I’ve been getting,” she joked to laughter and raucous applause. … “And as president of the United States, I intend to give those big power brokers a lot more headaches, because we’re going to give the country back to you.”
Pawlenty’s persevering criticisms of a competitor continue to betray insecurity. Ed eloquently defended candidates’ rights to question their competitors’ records — and I initially conceded Bachmann’s migraines to be a legitimate cause for concern (at least until her doctor settled the issue definitively) and praised T-Paw’s common-sense quote about the requirements of the presidency — but, at this point, if I were Pawlenty, I would steer as far away from any mention of Bachmann — explicit or implicit — as I could manage. He doesn’t appear to be hurting Bachmann, but he is denting the best shield he has against attacks against him: His reputation as a stand-up guy who’s running on his own merits, not money or a popular image. He’s at his best when he talks policy, not petty quibbles.
Fox News exclusive: Perry aides confirm that he’s running for president
posted at 4:05 pm on August 11, 2011 by Allahpundit
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He all but confirmed it himself in his interview with Halperin, but this is the first hard “yes” to come out of his camp after weeks and weeks and weeks of teasing. It’s newsworthy if only for that reason, although I’m intrigued by the timing of the leak. Why not wait another 48 hours and let him end the suspense himself on Saturday? Are they a tiny bit spooked by Palin’s arrival in Iowa, maybe, and looking to preempt that with solid news about him running? Or is this all about ensuring that his name is mentioned at the debate tonight?
Texas Gov. Rick Perry will make “a definitive announcement that he is in the 2012 race for the presidency Saturday,” aides told Fox News.
The language is significant. For several days the Perry camp has said he would signal his intentions and announce later.
“This is it,” the sources explain. No exploratory committee, no more deliberation.
Speaking of the Halperin interview, Ace is totally right that Perry made a bad mistake in gossiping about the conversation he had with Latvia’s prime minister about Obama. It humiliates a sitting president who, like it or not, is in charge of foreign affairs for another 15 months and it humiliates the Latvian PM by putting him on the spot over what was, almost certainly, supposed to be a confidential chat. I think this is more a case of Perry being absentminded than deliberately setting out to breach that confidence, but he can’t let it happen again.
Via the Daily Caller, here’s Joe Scarborough dumping on him this morning for praying a bit more publicly than he’d like. Meanwhile, Tom Tancredo’s tearing Perry to shreds in Politico for being much softer on amnesty than he’d like. He’s too far right for the centrists and too far towards the center for the right — not a bad place to be for a guy trying to triangulate between Romney and Bachmann. Besides, if he and Romney do end up in a two-man race, does anyone think Mitt will be taken seriously if he tries to beat Perry by becoming some sort of table-pounding border enforcer? C’mon.
Update: More confirmation. He’s in.
Update: At Townhall, Dwayne Horner has more details:
Stories started surfacing earlier this week saying that Perry, the longest serving chief executive in Texas history, would use the conservative gathering to remove all speculation about a run for the White House. Sources revealed to Townhall yesterday that the Governor’s children, Griffin and Sydney, have been told to clear their schedules starting Friday so they could be “with their father at this special time.”…
With the confirmation that Perry will indeed be a candidate, speculation is that a formal announcement is in the works during Labor Day weekend in either Austin or on the Texas A&M campus.
“Frustrated” Obama rips Congress: It’s time for certain people to put country over party
posted at 5:29 pm on August 11, 2011 by Allahpundit
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An actual quote from today’s remarks: “There are some in Congress right now who would rather see their opponents lose than see America win.” To which Steve Hayes, irked by the sight of yet another straw man being torched, replies, “Who are they?” The answer, I can only assume, is congressional progressives: They’re the ones who refuse to budge on the ruinous Medicare spending that’s rocketing the country towards fiscal collapse, as doing so would forfeit their party’s big campaign issue next year. But in case The One’s referring to tea-party congressmen (as he surely is), what was amazing about the “don’t raise the ceiling” crowd during the debt debate is that they were prepared to absorb a ferocious backlash against their own party in the name of doing something significant, i.e. Cut Cap and Balance, to solve America’s debt crisis. Time and again they were told that the GOP would bear the brunt of public anger if we didn’t make a deal, but they preferred that outcome to a weak compromise because at least there’d be important reform as a result. I know Democrats cherish their belief that the right acts only out of personal pique, not principle — it’s all part of the delegitimization game — but the caucus really was trying to put country first in that debate. Their means and ends simply differ from Obama’s; the fact that The One interprets that the way he does says more about him than it does about them, but Democrats have been begging him to be “bolder,” especially in attacking the tea party, so presumably they’ll be happy today.
The two key sections in the clip below run from 5:30 to 7:15 and 11:00 to 13:00. The grand absurdity of this critique, of course, is that every move this guy has made in recent memory, from yanking troops out of Afghanistan by next year to offering a budget so timid that it received not a single vote in the Senate to deliberately refusing to offer his own deficit-reduction plan during the debt-ceiling debate, is geared towards maximizing his odds of reelection. (It’s, er, not working.) The very last person who should be lecturing others about putting the country ahead of a campaign is the Perpetual Campaigner. But he can really sell the above-the-fray crap, can’t he? Exit question: Wasn’t putting country over party actually the campaign theme of Obama’s last opponent? Wouldn’t be the first time he’s borrowed a slogan from a Republican.
http://hotair.com/archives/2011/08/11/frustrated-obama-rips-congress-its-time-for-certain-people-to-put-country-over-party/
Open thread: Republican debate in Ames
posted at 8:10 pm on August 11, 2011 by Ed Morrissey
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Tonight, the Republican candidates for the presidential nomination — most of them, anyway — square off for a televised debate in Ames, Iowa, from the Stephens Auditorium at Iowa State University. I will be in the media “spin room,” along with our partner in blogging Tina Korbe and our Townhall brother Guy Benson. The debate starts at 9 pm ET/8 pm local time here in Iowa, and Fox News Channel’s Bret Baier will moderate the event. We’re looking forward to a lively debate, and I’d expect some elbow throwing and sharp barbs between the contenders, along with a few shots at the absent Rick Perry.
Since live blogging has become a little passé in the age of Twitter (is it possible to feel like an old blogger? Yes, we can!), our friends at Townhall came up with this widget that will track our tweets, along with our Townhall colleagues Katie Pavlich, Erika Johnsen, and the indispensable Allahpundit. Be sure to follow along, and perhaps open this post in two tabs — one to follow the Twitter feeds, and one for comment posting.
Tina, Guy, and I will capture some of the spin in the room after the show, so be sure to stay right here at Hot Air after the debate ….
Update (AP): While we wait, here’s Larry Sabato’s debate preview. Note this passage well:
The tension between Pawlenty and Bachmann will be even more fun to watch. T-Paw is in a corner on this one. If he wouldn’t smack a man last time, can he now do it to a woman — one who Republicans think was already wronged this week by Newsweek’s unattractive cover photo?
Pawlenty’s the only one onstage who can potentially make or break his campaign tonight. Huntsman needs to do well to make a good impression with Republicans who are seeing him for the first time, but Huntsman’s not competing in Ames or in Iowa more broadly. He can afford a mediocre performance. T-Paw can’t, and if he whiffs again when pressed to criticize his opponents to their faces, he’ll be a punchline before the night is out. I sure hope he’s ready if one of the moderators asks who he has in mind in his stump speech when he dumps on nameless “bobbleheads” among his competitors. It’s painfully clear that he means Bachmann, but who knows whether he has the stones to denigrate her when she’s standing right next to him. And if he does, he’d better hit Romney hard too or else he’ll get hammered tomorrow for precisely the reason Sabato gives. Long story short: Pawlenty needs to be throwing chairs tonight. He needs to walk in there in a cape, to the tune of “Pomp and Circumstance,” and be the Macho Man he keeps claiming he is. You’re an old hockey player, Tim, right? Drop the gloves.
Be prepared: Another open registration day coming tomorrow!
After all the fun we had last week in holding our open registration, who wouldn’t want to relive it the very next week? Our courageous staff support at Townhall has been medically cleared for duty, our systems have been fortified, and mainly we’re all a bunch of masochists. What could go wrong?
So tomorrow, we will once again hold an open registration for new commenters here at Hot Air, between 9 am and 4 pm ET, when our staff support is on duty to assist in the process. Just like last week, we will approve new registrants, not process amnesty requests for previously-banned commenters. We’ll have instructions in tomorrow’s post on how this works and what to expect — so please make sure you read those before peppering us with questions we have already answered.
Why hold another right now? First, we think we fixed the problems that plagued us last week, so it should go much smoother. Also, we want to add as many commenters as we can in order to increase participation in a new feature we will launch here and at our sister site Townhall — the Hot Air/Townhall Republican primary! (They’re probably calling it the Townhall/Hot Air Republican primary over there, but what do they know?) Only registered commenters will be able to vote — so make sure you register tomorrow!
Oh my: Ron Paul within one point of Gingrich in Iowa?
posted at 3:56 pm on December 13, 2011 by Allahpundit
Hey now. I was writing “Could Ron Paul seriously win Iowa?” posts before writing “Could Ron Paul seriously win Iowa?” posts was cool.
There has been some major movement in the Republican Presidential race in Iowa over the last week, with what was a 9 point lead for Newt Gingrich now all the way down to a single point. Gingrich is at 22% to 21% for Paul with Mitt Romney at 16%, Michele Bachmann at 11%, Rick Perry at 9%, Rick Santorum at 8%, Jon Huntsman at 5%, and Gary Johnson at 1%.
Gingrich has dropped 5 points in the last week and he’s also seen a significant decline in his favorability numbers. Last week he was at +31 (62/31) and he’s now dropped 19 points to +12 (52/40). The attacks on him appear to be taking a heavy toll- his support with Tea Party voters has declined from 35% to 24%.
Paul meanwhile has seen a big increase in his popularity from +14 (52/38) to +30 (61/31). There are a lot of parallels between Paul’s strength in Iowa and Barack Obama’s in 2008- he’s doing well with new voters, young voters, and non-Republican voters…
Simple question: What’s Paul’s ceiling in Iowa? A friend on Twitter was arguing earlier that it’s 20 percent, which is borne out by the polls — so far. If he’s right then Paul can’t win. But … what if Paul’s ceiling is actually 30 percent? Note that his favorables are trending upwards while Newt’s are sinking under the weight of renewed scrutiny of his various conservative heresies. If you’re an Iowan who’s unhappy with the “electable” candidates — Romney for being too opportunistic, Gingrich for flirting too often with activist government, Perry for seeming too darned hapless — then Paul’s an obvious choice for your “none of the above” protest vote. So obvious, in fact, that both Glenn Beck and Joe Scarborough are threatening to back him as a third-party candidate if Gingrich is the nominee. (An interesting footnote in the PPP data: Voters split equally on whether their view of the GOP establishment is favorable or unfavorable, and among the latter group Paul leads by double digits at 34 percent.) If he can pull 10 percent from voters like that on top of the 20 percent who make up his base, then his chances at an upset improve dramatically. And don’t forget, not only is Paul’s base famously enthusiastic and guaranteed to turn out, he’s one of the best organized candidates in Iowa this time. He might be able to get leaners to come out and caucus come rain or shine. Can Gingrich do the same?
I’ll bet Romney’s kicking himself now for not having abandoned Iowa early on. If he had done that, he could have sent his supporters out to caucus for Paul, thereby detonating Newt’s chances; if he tried that now, having competed in earnest in the state, the headlines would be all about Romney’s shockingly poor finish in Iowa, which would actually help Gingrich in New Hampshire even if he finished second to Paul in the caucuses. (On the other hand, per Rasmussen, Paul’s just four points back of Gingrich for second place in New Hampshire too.) Two exit questions for you, then. One: As chances of a Paul upset grow, will Iowa’s Republican leaders swing behind Newt or Mitt? They want the caucuses to remain relevant to choosing the eventual nominee, and if Paul wins, that’ll be two elections in a row where the Iowa winner realistically had no chance. Two: Could a Paul victory achieve a real “none of the above” outcome for the nomination? A brokered convention is unlikely – but, as Sean Trende explains, not impossible if Paul fares well.
Caucus states are also concentrated in the Mountain West, where his brand of Republicanism holds greater appeal. They’re also front-loaded, meaning that (a) his supporters will be less likely to have been swayed by the “can’t win” argument and (b) the more “establishment” Republican candidates are likely to split the non-Paul votes.
Overall, 486 delegates will be awarded in caucus states. If Paul picks off a sizable number of these delegates, say a quarter of them, and two other GOP candidates battle to a draw, there might not be a nominee by the end of June. This type of fight could carry over to the convention, since Paul is pretty feisty and is probably the least likely candidate out there to be “bought off” with a Cabinet position or speaking slot.
If, say, Perry and Gingrich are knotted up with about 1,050 delegates each, and Paul holds the remaining 200 and refuses to budge, you could end up with a deadlocked convention that eventually turns to a dark-horse candidate.
Ron Paul winning Iowa just might mean the GOP nominating Ryan, Christie, or Daniels. Second look at Ron Paul winning Iowa?
Hey now. I was writing “Could Ron Paul seriously win Iowa?” posts before writing “Could Ron Paul seriously win Iowa?” posts was cool.
There has been some major movement in the Republican Presidential race in Iowa over the last week, with what was a 9 point lead for Newt Gingrich now all the way down to a single point. Gingrich is at 22% to 21% for Paul with Mitt Romney at 16%, Michele Bachmann at 11%, Rick Perry at 9%, Rick Santorum at 8%, Jon Huntsman at 5%, and Gary Johnson at 1%.
Gingrich has dropped 5 points in the last week and he’s also seen a significant decline in his favorability numbers. Last week he was at +31 (62/31) and he’s now dropped 19 points to +12 (52/40). The attacks on him appear to be taking a heavy toll- his support with Tea Party voters has declined from 35% to 24%.
Paul meanwhile has seen a big increase in his popularity from +14 (52/38) to +30 (61/31). There are a lot of parallels between Paul’s strength in Iowa and Barack Obama’s in 2008- he’s doing well with new voters, young voters, and non-Republican voters…
Simple question: What’s Paul’s ceiling in Iowa? A friend on Twitter was arguing earlier that it’s 20 percent, which is borne out by the polls — so far. If he’s right then Paul can’t win. But … what if Paul’s ceiling is actually 30 percent? Note that his favorables are trending upwards while Newt’s are sinking under the weight of renewed scrutiny of his various conservative heresies. If you’re an Iowan who’s unhappy with the “electable” candidates — Romney for being too opportunistic, Gingrich for flirting too often with activist government, Perry for seeming too darned hapless — then Paul’s an obvious choice for your “none of the above” protest vote. So obvious, in fact, that both Glenn Beck and Joe Scarborough are threatening to back him as a third-party candidate if Gingrich is the nominee. (An interesting footnote in the PPP data: Voters split equally on whether their view of the GOP establishment is favorable or unfavorable, and among the latter group Paul leads by double digits at 34 percent.) If he can pull 10 percent from voters like that on top of the 20 percent who make up his base, then his chances at an upset improve dramatically. And don’t forget, not only is Paul’s base famously enthusiastic and guaranteed to turn out, he’s one of the best organized candidates in Iowa this time. He might be able to get leaners to come out and caucus come rain or shine. Can Gingrich do the same?
I’ll bet Romney’s kicking himself now for not having abandoned Iowa early on. If he had done that, he could have sent his supporters out to caucus for Paul, thereby detonating Newt’s chances; if he tried that now, having competed in earnest in the state, the headlines would be all about Romney’s shockingly poor finish in Iowa, which would actually help Gingrich in New Hampshire even if he finished second to Paul in the caucuses. (On the other hand, per Rasmussen, Paul’s just four points back of Gingrich for second place in New Hampshire too.) Two exit questions for you, then. One: As chances of a Paul upset grow, will Iowa’s Republican leaders swing behind Newt or Mitt? They want the caucuses to remain relevant to choosing the eventual nominee, and if Paul wins, that’ll be two elections in a row where the Iowa winner realistically had no chance. Two: Could a Paul victory achieve a real “none of the above” outcome for the nomination? A brokered convention is unlikely – but, as Sean Trende explains, not impossible if Paul fares well.
Caucus states are also concentrated in the Mountain West, where his brand of Republicanism holds greater appeal. They’re also front-loaded, meaning that (a) his supporters will be less likely to have been swayed by the “can’t win” argument and (b) the more “establishment” Republican candidates are likely to split the non-Paul votes.
Overall, 486 delegates will be awarded in caucus states. If Paul picks off a sizable number of these delegates, say a quarter of them, and two other GOP candidates battle to a draw, there might not be a nominee by the end of June. This type of fight could carry over to the convention, since Paul is pretty feisty and is probably the least likely candidate out there to be “bought off” with a Cabinet position or speaking slot.
If, say, Perry and Gingrich are knotted up with about 1,050 delegates each, and Paul holds the remaining 200 and refuses to budge, you could end up with a deadlocked convention that eventually turns to a dark-horse candidate.
Ron Paul winning Iowa just might mean the GOP nominating Ryan, Christie, or Daniels. Second look at Ron Paul winning Iowa?
Christiane Amanpour out as host of “This Week”? Update: Stephanopoulos in?
As with any dull, lifeless marriage, it’s probably better that this one ends than that they stay together out of obligation.
I want to try an idea out on you, but really think it over before you say no. Okay?
“This Week with Chelsea Clinton.”
Christiane Amanpour is preparing to leave as the anchor of “This Week,” the Sunday morning news program on ABC, two people with knowledge of her plans said Tuesday…
Rumors about Ms. Amanpour’s status on “This Week” have swirled for months, and were given more oxygen last Sunday when The New York Post said that ABC News executives were “mulling who might replace” her. ABC did not deny the newspaper’s report…
At the time she joined ABC, she said she would “focus on the intractable convergence of domestic and foreign policy.” Arguably her biggest scoop on ABC came last February when she interviewed then-Egyptian president Hosni Mubarak shortly before he stepped down.
Ms. Amanpour’s tenure on “This Week” coincided with a decline in ABC’s competitive position on Sunday mornings.
Here’s the Post item from Friday alleging that neither side was thrilled with the other and that Amanpour might be angling to go back to the foreign affairs beat at CNN, which makes sense. If you were a journo who’d made your rep in international news, what would you rather be doing these days: Covering Iran’s nuclear progress, Syria’s civil war, and Egypt’s new Islamist government or refereeing ideological slapfights between George Will and Paul Krugman?
Like everyone else in America, I’ve never understood why ABC tapped someone with her resume for a political talk show. The idea, I guess, was to add a foreign-affairs dimension to Sunday morning yakfests, but that’s kind of like hiring a business reporter to anchor SportsCenter. Sure, there’s some subject-matter overlap, but nobody’s watching SC for a panel discussion on revenue sharing or the salary cap. And even if a crisis overseas blows up and dominates the U.S. news cycle, what special insight is Amanpour supposedly bringing to “This Week” by dint of her experience as a correspondent? The Mubarak interview was a nice “get” but (a) it was Barbara Walters, not Amanpour, whom Assad turned to for ABC’s latest big “get,” and (b) if it’s Amanpour’s contacts abroad that are prized by ABC, they should have put her in the field rather than behind a desk in D.C. By making her anchor, they were promising especially penetrating discussions of foreign affairs from week to week. Does anyone think they delivered?
Exit question: Amanpour’s loss is Jake Tapper’s gain, right? He’s delivered for them before, you know.
I want to try an idea out on you, but really think it over before you say no. Okay?
“This Week with Chelsea Clinton.”
Christiane Amanpour is preparing to leave as the anchor of “This Week,” the Sunday morning news program on ABC, two people with knowledge of her plans said Tuesday…
Rumors about Ms. Amanpour’s status on “This Week” have swirled for months, and were given more oxygen last Sunday when The New York Post said that ABC News executives were “mulling who might replace” her. ABC did not deny the newspaper’s report…
At the time she joined ABC, she said she would “focus on the intractable convergence of domestic and foreign policy.” Arguably her biggest scoop on ABC came last February when she interviewed then-Egyptian president Hosni Mubarak shortly before he stepped down.
Ms. Amanpour’s tenure on “This Week” coincided with a decline in ABC’s competitive position on Sunday mornings.
Here’s the Post item from Friday alleging that neither side was thrilled with the other and that Amanpour might be angling to go back to the foreign affairs beat at CNN, which makes sense. If you were a journo who’d made your rep in international news, what would you rather be doing these days: Covering Iran’s nuclear progress, Syria’s civil war, and Egypt’s new Islamist government or refereeing ideological slapfights between George Will and Paul Krugman?
Like everyone else in America, I’ve never understood why ABC tapped someone with her resume for a political talk show. The idea, I guess, was to add a foreign-affairs dimension to Sunday morning yakfests, but that’s kind of like hiring a business reporter to anchor SportsCenter. Sure, there’s some subject-matter overlap, but nobody’s watching SC for a panel discussion on revenue sharing or the salary cap. And even if a crisis overseas blows up and dominates the U.S. news cycle, what special insight is Amanpour supposedly bringing to “This Week” by dint of her experience as a correspondent? The Mubarak interview was a nice “get” but (a) it was Barbara Walters, not Amanpour, whom Assad turned to for ABC’s latest big “get,” and (b) if it’s Amanpour’s contacts abroad that are prized by ABC, they should have put her in the field rather than behind a desk in D.C. By making her anchor, they were promising especially penetrating discussions of foreign affairs from week to week. Does anyone think they delivered?
Exit question: Amanpour’s loss is Jake Tapper’s gain, right? He’s delivered for them before, you know.
Perry hits the road
Anyone who has watched the Republican debates knows Rick Perry’s most glaring vulnerability — including Rick Perry. However, he has steadily improved and had a good debate on Saturday, and now he’s hitting the campaign trail in a big way in Iowa. And rather than playing to his weakness, this plays right into Perry’s biggest strengths, as the National Journal reports:
Rick Perry has a reputation as a campaigner in Texas: He’s dangerous, but even more dangerous when he’s down. The next three weeks in Iowa will present him with the ultimate underdog challenge as he undertakes a last-ditch, massive effort to save his presidential bid.
Wednesday marks the beginning of a 14-day, 42-city bus tour that will see the Texas governor traverse the Hawkeye State, logging more than 1,000 miles as he strives to regain his standing among the top tier of candidates for the GOP nomination. …
His Iowa tour will begin in Council Bluffs, on the western edge of the state, and run in a semicircle across the northern half of Iowa heading east. After a leisurely break for Christmas — Perry has no events planned from the afternoon of the 22nd until the morning of the 27th — the tour will resume with a swing through the southern part of the state and snake back around to the center. Most days follow a pattern: two to four “meet-and-greets,” often at local restaurants or coffee shops, followed by a town hall meeting in the afternoon.
As he travels through the state, Perry will seek to build a coalition of evangelical and tea party voters, often attempting to pick off supporters from his rivals. He’s shown as much in the ads he’s run in the state targeting those specific groups. His fight for the Christian right, a key voting bloc during the Iowa caucuses, will put him in competition against Rep. Michele Bachmann of Minnesota and former Sen. Rick Santorum of Pennsylvania.
Assuming his back troubles are behind him (pardon the pun), Perry can be a force of nature in retail politics. He got off to a good start in Iowa when he jumped into the race, but his immediate rise in national polls took his focus elsewhere. Now with Iowa the only prize that Perry can reasonably grasp at the moment, he’s going all in — like Bachmann and Rick Santorum, the latter of whom has already visited all 99 counties and has built a surprisingly extensive organization.
Those will be his two main competitors for voters who won’t back either Gingrich or Romney, and of course Perry wants to split social conservatives and Tea Party activists away from Gingrich, if possible. There is some evidence, although rather thin, that a Perry comeback has already begun. The latest poll from the American Research Group shows Perry rising to fourth place, but more significantly, into double digits at 13%. That’s a bounce upward of eight points since last month, trailing only Gingrich’s 19-point rise in the same period. Ron Paul and Mitt Romney are just ahead of Perry at 17%, putting Perry within reach of a second-place finish.
If Perry can even get to second place in Iowa, it would be a stunning change of fortune and could restore credibility to his campaign. With conservatives despairing at the prospect of a Gingrich-Romney contest, Perry could steal a march on the Right and find himself very much back in the mix — assuming that Ron Paul doesn’t beat him to it.
Rick Perry has a reputation as a campaigner in Texas: He’s dangerous, but even more dangerous when he’s down. The next three weeks in Iowa will present him with the ultimate underdog challenge as he undertakes a last-ditch, massive effort to save his presidential bid.
Wednesday marks the beginning of a 14-day, 42-city bus tour that will see the Texas governor traverse the Hawkeye State, logging more than 1,000 miles as he strives to regain his standing among the top tier of candidates for the GOP nomination. …
His Iowa tour will begin in Council Bluffs, on the western edge of the state, and run in a semicircle across the northern half of Iowa heading east. After a leisurely break for Christmas — Perry has no events planned from the afternoon of the 22nd until the morning of the 27th — the tour will resume with a swing through the southern part of the state and snake back around to the center. Most days follow a pattern: two to four “meet-and-greets,” often at local restaurants or coffee shops, followed by a town hall meeting in the afternoon.
As he travels through the state, Perry will seek to build a coalition of evangelical and tea party voters, often attempting to pick off supporters from his rivals. He’s shown as much in the ads he’s run in the state targeting those specific groups. His fight for the Christian right, a key voting bloc during the Iowa caucuses, will put him in competition against Rep. Michele Bachmann of Minnesota and former Sen. Rick Santorum of Pennsylvania.
Assuming his back troubles are behind him (pardon the pun), Perry can be a force of nature in retail politics. He got off to a good start in Iowa when he jumped into the race, but his immediate rise in national polls took his focus elsewhere. Now with Iowa the only prize that Perry can reasonably grasp at the moment, he’s going all in — like Bachmann and Rick Santorum, the latter of whom has already visited all 99 counties and has built a surprisingly extensive organization.
Those will be his two main competitors for voters who won’t back either Gingrich or Romney, and of course Perry wants to split social conservatives and Tea Party activists away from Gingrich, if possible. There is some evidence, although rather thin, that a Perry comeback has already begun. The latest poll from the American Research Group shows Perry rising to fourth place, but more significantly, into double digits at 13%. That’s a bounce upward of eight points since last month, trailing only Gingrich’s 19-point rise in the same period. Ron Paul and Mitt Romney are just ahead of Perry at 17%, putting Perry within reach of a second-place finish.
If Perry can even get to second place in Iowa, it would be a stunning change of fortune and could restore credibility to his campaign. With conservatives despairing at the prospect of a Gingrich-Romney contest, Perry could steal a march on the Right and find himself very much back in the mix — assuming that Ron Paul doesn’t beat him to it.
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