Video: Sgt. Leroy Petry receives the Medal of Honor

The second living recipient of the Medal of Honor since Vietnam, just nine months after Staff Sgt. Sal Giunta became the first.
What kind of man are we talking about here? One who didn’t have to participate in the raid for which he was awarded the MOH but went voluntarily, had his hand blown off by a jihadi grenade during that raid after he picked it up and tried to toss it away before it detonated, thereby saving the lives of two of his men, and then reenlisted in the Army after being fitted with a robotic arm and went back to war. Total deployments to Iraq and Afghanistan: Eight and counting. He has four kids.

As usual, the Army’s done a bang-up job creating a Medal of Honor webpage for him. The Profile and Battlespace graphics are a must, but take time to read this Army news story too about his recovery and experience with his new robotic hand — all the way to the part where one of his kids names the damaged arm “Nubby.” An apt exit quotation from Obama: “What compels such courage? What leads a person to risk everything so that others might live?”

Intern who helped save Gabby Giffords’ life to throw out first pitch tonight

Daniel Hernandez, the intern whose calm courage helped to save the life of Rep. Gabrielle Giffords (D-Ariz.), will throw out the ceremonial first pitch at tonight’s Major League Baseball All-Star Game in Phoenix, the New York Post reports.

Hernandez, 21, was hailed as a hero after his quick thinking was credited with keeping Rep. Giffords (D-Ariz.) alive until paramedics arrived after she was shot in the head outside a Tucson-area grocery store in January.

After hearing the gunfire, Hernandez ran to Giffords and held her upright so she could breathe and applied pressure to her head wound. He had been hired by Giffords less than a week before the Jan. 8 attack.

Among those killed in the shootings, in which six people died and 12 others were wounded, was Christina Taylor Green, the daughter of Los Angeles Dodgers scout John Green and granddaughter of former Major League Baseball manager Dallas Green.

MLB commissioner Bud Selig invited the families of all of the victims to participate in the pre-game ceremony, KTAR.com reported.

Hernandez’ part in the tragic Giffords’ story has always impressed me, perhaps because I know just how terrified I would have been in the same situation, how tempted to run as far and as fast as possible. Perhaps such a terrifically human gesture as to immediately attempt to alleviate the suffering of another ought to be the norm — but is it? Certainly it’s more likely to be if, when someone does display loyalty and bravery, he receives recognition and gratitude. The chance to throw out a ceremonial pitch at an All-Star game seems in line with that.

Obama: No, I can’t promise that Social Security checks will go out in August if we don’t reach a deal

See James Pethokoukis’s new graph for a response to this. There should be plenty of revenue in August to cover entitlement checks and interest on the debt if Treasury has the legal authority to prioritize payments,
which isn’t as clear as one would hope. Either way, the more voter angst O can create about default — and given the movement among independents, he’s doing a fine job — the more pressure there is on the GOP to make a deal and the more protected he’ll be politically if we hit X Day on August 2 without an agreement. Which, of course, is the point of McConnell’s gimmick today: If his bill were to pass, responsibility for keeping Social Security flowing coming would shift suddenly from those darned millionaire-hugging Republicans to the debt-loving Obama administration. You are willing to unilaterally order another $2 trillion in debt right before the election in order to keep grandma’s checks coming, aren’t you, champ?

If you’re looking for the case for and against the McConnell gambit, here’s Grover Norquist giving a thumbs up and Philip Klein giving a thumbs down. Norquist’s argument is straightforward: This debt-ceiling showdown has always been about politics for Obama, so let him choke on the politics of it. Force him to finally finally finally put his spending plan in writing after he and his party have ducked the issue for months. In fact, according to Roll Call, McConnell’s only question at yesterday’s debt-ceiling meeting was to ask how much the Biden plan would save in discretionary spending next year. The answer: Two measly billion. It’s time for Democrats to get serious, says Norquist, and this will force them. Au contraire, says Klein, there are lots of ways Obama can gin up phony savings to check the “deficit hawk” box for his campaign. Besides, he argues, the McConnell plan actually weakens the GOP’s ability to reach a real deal because O will read it as a sign of panic in the caucus and will press harder for concessions. I’m not so sure about that, though: To me it looks like a sign that McConnell and others in the caucus have more or less given up on making a deal, which strengthens the GOP’s hand insofar as Obama will either need to make new concessions to get them back to the table or start thinking about a Plan B like McConnell’s plan to avert a default.

I do think Klein was spot on with this post from April, though, about how the GOP promised the base too much in terms of what it could realistically achieve while sharing power with Democrats. For all the sturm and drang about the debt-ceiling deals under consideration, to my knowledge none of them — even the “grand bargain” — would actually reduce the debt over the next 10 years. Even the best-case scenario is merely a slower rate of growth. That’s not a serious solution, or even a half-solution, to such a cataclysmic problem, and yet it’s the very best we can do with the current occupants in Congress and the White House. We’ll have to shuffle the deck next year and hope for better; all McConnell’s doing is acknowledging the bleakness of the situation and trying to maximize the odds of a more favorable hand. Exit question: Given that McConnell’s bill would force Dems to own the debt hike, why would Reid allow it to pass the Senate without changes? And if it did, would Obama sign it or veto it?

'Harry Potter' tickets sell out a week before release

After 10 years, the end of "Harry Potter's" cinematic tale has arrived. Fans packed into London's Trafalgar Square on Thursday for the world premiere, and the cast talked to CNN about what it was like to say goodbye to the long-running franchise.

If you're planning on seeing "Potter" stateside on July 15, check to make sure there's still a ticket available at a showing near you. Online retailer Fandango reports that the site has already sold out of more than 2,000 showings across the U.S., from "Anchorage, Alaska to Sunrise, Florida," according to a statement. So far, it's Fandango's fastest selling movie. (Surprise, surprise.)

"Harry Potter and the Deathly Hallows: Part 2" opens July 15. You can catch a sneak peek of never before seen footage during Larry King's "Harry Potter" special this Sunday, July 10 at 8 p.m. ET. Don't forget to send in any questions you have for the cast via iReport by Friday, July 8 at noon, and you could see the answer on CNN.com.

Street name “Seven in Heaven Way” upsets American Atheists

This summer, the city of Brooklyn renamed a neighborhood street “Seven in Heaven Way” to honor seven local firefighters who gave their lives on Sept. 11, 2001. A nice thought, right? Simple, symbolic, sincere. But sadly, the commemorative gesture has since generated controversy.



The New Jersey-based American Atheists, the same group that brought the country “God Less America” Fourth of July aerial banners, promptly objected to the street name.

“It’s improper for the city to endorse the view that heaven exists,” American Atheists president David Silverman said. “It links Christianity and heroism.”

Additional objections: Sept. 11 was an attack on “all of America,” so no memorial of it should “break” the Constitution — and, also, the street sign presumes to know what the seven firefighters themselves believed.

But, as The Heritage Foundation’s Jennifer Marshall points out, the group’s objections reveal a misunderstanding of freedom of religion.

Godless secularism – or a “naked public square” denuded of all religious references and symbols, as the late Richard John Neuhaus put it – never was intended to be the character of our American republic. Religious freedom, the cornerstone of all freedom, is freedom for religion, not hostility toward it.

Yes, the Founders wisely separated political from religious authority in our federal government, but they didn’t intend to divorce religion from public life or politics. They based the American model of religious liberty on a favorable view of religious practice.

Far from privatizing or marginalizing religion, the Founders assumed religious believers and institutions would take active roles in society, engaging in the political process and helping to shape consensus on morally fraught questions. …

Most nations are dominated, demographically anyway, by adherents of particular faiths. But every denomination – and the atheist camp as well – is a small minority somewhere on the planet. This reality underscores why religious liberty, not the radical secularist or theocratic systems at either end of the spectrum, should be precious to everyone.

But on a more practical level, the objections reveal an acute sensitivity that seems unwarranted in this situation. A street name with the word “heaven” doesn’t automatically imply an endorsement of Christianity — many other religions include a paradisal idea of the afterlife, too. Nor does it even necessarily imply an endorsement of the belief that heaven is real. Are no streets named for mythical places or fictional characters? Additionally, more than 400 New York City streets have been named for 9-11 victims and heroes. Clearly, the sign was named with the simple motivation of recognizing seven men who made the ultimate sacrifice.

Perhaps that’s why one First Amendment lawyer described the situation this way: “The area of religion is so complex and nuanced that you could argue nearly anything … But a [legal] challenge in this case would be far-fetched.”

--------
from: hotair

Report: DeMint, Jim Jordan nix McConnell’s debt-ceiling plan; Update: Dems are considering it, says Durbin

DeMint’s opposition isn’t confirmed yet but Robert Costa of NRO has it on good authority. That might not be an insuperable obstacle to passage in the Senate given the fact, per Bret Baier below, that Reid seems open to the idea. If he can bring the Dems into line then all they’d need is the usual suspects — Brown, Snowe, Collins, Murkowski, and a few others — and they’re golden.


But Jordan’s kiss of death in the House will make things hard for Boehner:

Rep. Jim Jordan (R., Ohio), chairman of the conservative Republican Study Committee, tells NRO that while he hasn’t review all the details of Senate Minority Leader Mitch McConnell’s (R., Ky.) “contingency plan,” he doesn’t see much of a future for it in the House.

The RSC has 175 members. If all or most walk away, Boehner would need practically the entire Democratic caucus plus 50-60 Republicans who are willing to break with conservatives and lock arms with the left in the name of ceding control of the debt ceiling to Obama. They’d be doing it in the name of averting a default and boxing in The One as the candidate of debt next year, but I doubt that’d save them from primary challenges. How does Boehner get McConnell’s bill through the House under those circumstances? No wonder he seems so noncommittal about it; watch his reaction when Baier presses him on it at 1:30 of the clip below.

The key here, as is increasingly the case, might be Cantor. Whether there’s a rift between him and Boehner or not, he’s banked enough conservative cred by holding the line on taxes throughout the negotiation that he might be able to pry away some RSC members if he backed McConnell’s plan. Has anyone heard his reaction to it yet? If so, please tip us and I’ll update the post. I’ll leave you with a link to this brief but must-see vid (via NRO), which contains what must be one of the most ominous pauses in modern political history. No wonder McConnell’s thinking about Plan B.

Update: The Senate might be ready to play ball:

A back-up plan proposed by Senate Republican Leader Mitch McConnell that would keep the U.S. government from defaulting on its debts next month is viable and under consideration by Senate Democrats, according to Sen. Dick Durbin, the No. 2 Democrat in the chamber.

“We’re talking about it as one of the options, yes,” Durbin said in response to a question about whether the McConnell plan is viable.

Update: Still no word on Cantor vis-a-vis McConnell’s plan, but this quote from earlier today speaks volumes:

Across the Capitol, a closed-door caucus of House Republicans broke up with the leadership conceding that it’s frankly at a loss about getting the votes before Treasury’s Aug. 2 deadline.

“Nothing can get through the House right now,” Cantor said after the White House meeting. “Nothing.”

“Sister Wives” clan to challenge constitutionality of Utah’s polygamy law

Who’s angrier about this? Traditional marriage activists, or gay rights activists who don’t want to see the debate about same-sex marriage dragged down the slippery slope when they’re trying to build on momentum from New York?

Nationally-known constitutional law professor Jonathan Turley said the lawsuit to be filed in U.S. District Court in Salt Lake City will not call for plural marriages to be recognized by the state. Instead, it asks for polygamy between consenting adults like his clients, former Utahn Kody Brown and his wives, to no longer be considered a crime.

“We are only challenging the right of the state to prosecute people for their private relations and demanding equal treatment with other citizens in living their lives according to their own beliefs,” Turley said in a press release. The Browns star in the TLC network show “Sister Wives.” There is no word yet on whether they will appear in a press conference scheduled for Wednesday…

The complaint to be filed Wednesday, Turley said, presents seven constitutional challenges to the state’s bigamy law. It is largely based on the right to privacy.

“In that sense, it is a challenge designed to benefit not just polygamists but all citizens who wish to live their lives according to their own values—even if those values run counter to those of the majority in the state,” said Turley, a member of the faculty at George Washington University.

If the distinction between decriminalization and state recognition seems confusing (which it did to me at first), it helps to know that Utah’s bigamy statute includes cohabiting with one person when you’re legally married to another. And in fact, this guy is only legally married to one woman; the other three are, er, “sister wives.” Basically, he’s arguing that he doesn’t care if the state recognizes them as legal spouses or not, just that he doesn’t want the cops to come knocking and lock him up when they find out. In that sense, his court claim mirrors the current legal regime in most states where gay marriage is banned but gay sex is constitutionally protected.

So, no lawsuit to legalize polygamous marriage — yet. But legal precedents have a funny way of building on each other:

The lawsuit is not demanding that states recognize polygamous marriage. Instead, the lawsuit builds on a 2003 United States Supreme Court decision, Lawrence v. Texas, which struck down state sodomy laws as unconstitutional intrusions on the “intimate conduct” of consenting adults. It will ask the federal courts to tell states that they cannot punish polygamists for their own “intimate conduct” so long as they are not breaking other laws, like those regarding child abuse, incest or seeking multiple marriage licenses…

The questions surrounding whether same-sex couples should be allowed to marry are significantly different from those involved in criminal prosecution of multiple marriages, Ms. Pizer noted. Same-sex couples are seeking merely to participate in the existing system of family law for married couples, she said, while “you’d have to restructure the family law system in a pretty fundamental way” to recognize polygamy.

Professor Turley called the one-thing-leads-to-another arguments “a bit of a constitutional canard,” and argued that removing criminal penalties for polygamy “will take society nowhere in particular.”

Ah, but they’re not asking to change family law, just to take polygamy out of the penal code. The family law case will be the next lawsuit. FYI, the Supreme Court already upheld laws against polygamy — 130 years ago, rejecting a Mormon challenge based on the Free Exercise Clause. So there’s precedent here if SCOTUS wants it when it eventually hears a case along these lines. Two important footnotes, though. One: The Court’s language in Lawrence v. Texas, a decision authored by Anthony Kennedy, was famously broad in its implications (a point noted by Scalia in dissent at the time), so there’s no telling whether that earlier precedent is still good law. And second, Lawrence itself overruled a much more recent precedent in Bowers v. Hardwick to arrive at its holding. So yeah, there’s quite a fair chance that the Brown clan might pull this off.

Exit question: Speaking of people who aren’t eager to watch this court/media battle play out, how excited do you think Mitt Romney and Jon Huntsman are right now?

Romney won’t sign Iowa group’s marriage pledge

Yes, the same one that Bachmann signed and for which she took so much heat that even Gingrich ended up backing away from it.

Thus far it’s just her and Santorum. Your move, Mr. Pawlenty.

When it was first circulated last week, the introduction to the pledge stated that African American children were more likely to be raised in two-parent households when they were born into slavery than they are today. The group struck that language and apologized after black ministers complained, but it said it stands by the rest of the document.

Andrea Saul, a spokeswoman for Romney, told The Associated Press in a written statement Tuesday that Romney “strongly supports traditional marriage,” but that the oath “contained references and provisions that were undignified and inappropriate for a presidential campaign.”…

Romney, who supported rights for gay couples in Massachusetts, was criticized in Iowa by some Iowa social conservatives during his 2008 campaign, when he finished second in the caucuses after aggressively courting Christian conservatives…

The Family Leader, an organization formed last year and positioning itself to be an influential player in the 2012 caucuses, said Tuesday they stand by the 14 policy positions listed under the promise to “defend and to uphold the institution of marriage as only between one man and one woman.”

Here’s a PDF of the pledge, which is all over the map politically. I’m keen to hear which parts specifically he thought were “undignified and inappropriate” for a campaign, especially now that the radioactive language about slavery has been dropped. As for the politics of this, it would have caused him more headaches to sign than not to sign. He’s all but given up on Iowa and he’ll never be social cons’ candidate of choice, so he’s better off using this to draw a distinction with Bachmann that he can reference later. Until someone threatens him in New Hampshire he’ll stay focused on the general election and his electability vis-a-vis Obama. This is one less thing the Democrats can use against him to knock him off-message from the economy.

Can’t wait to see what T-Paw does here. He probably has to sign to protect himself among social conservatives — it might finish him off in Iowa if he didn’t and he can’t afford that like Mitt can — but if he does then he’ll be dealing with this from now until election day, assuming he’s nominated. Tough call. Oh — incidentally, the AP claims that Romney’s the first Republican presidential candidate to reject the Iowa pledge. Not so.

Quotes of the day

“Former Sen. Alan Simpson, R-Wyo., the GOP co-chair of President Obama’s deficit commission, told ABC News that ‘The American people are disgusted at both parties’ for not being able to agree on a measure to reduce the deficit…


“‘Reagan raised taxes,’ Simpson said. ‘We’ve never had less revenue to run this country since the Korean war.’

“Contrary to some Republicans expressing skepticism about the Aug. 2 default date, Simpson said that Treasury Secretary ‘Tim Geithner ain’t fooling.’”

***
“[M]any Congressional Republicans seem to be spoiling for a fight, calculating that some level of turmoil caused by a federal default might be what it takes to give them the chance to right the nation’s fiscal ship…

“Representative Paul D. Ryan of Wisconsin, the Budget Committee chairman seen as the voice of fiscal authority among House Republicans, said that he believed an agreement leading to a debt limit increase would eventually be reached, but that the impasse could extend beyond the administration’s Aug. 2 drop-dead date.

“‘Let’s say we go past Aug. 2,’ he said in an interview. ‘As time goes on, the situation deteriorates, so I do believe there will be something.’ He pointed to ‘macroeconomic circumstances and credit markets — and also paying the bills — Social Security, Medicare, the troops.’

“‘I think there ultimately will be something,’ he said. ‘I really honestly don’t know what it’s going to be. I really don’t.’”

***
The hotter precincts of the blogosphere were calling [McConnell's proposal] a sellout yesterday, though they might want to think before they shout. The debt ceiling is going to be increased one way or another, and the only question has been what if anything Republicans could get in return. If Mr. Obama insists on a tax increase, and Republicans won’t vote for one, then what’s the alternative to Mr. McConnell’s maneuver?…

“The tea party/talk-radio expectations for what Republicans can accomplish over the debt-limit showdown have always been unrealistic. As former Senator Phil Gramm once told us, never take a hostage you’re not prepared to shoot. Republicans aren’t prepared to stop a debt-limit increase because the political costs are unbearable. Republicans might have played this game better, but the truth is that Mr. Obama has more cards to play.

“The entitlement state can’t be reformed by one house of Congress in one year against a determined President and Senate held by the other party. It requires more than one election. The Obama Democrats have staged a spending blowout to 24% of GDP and rising, and now they want to find a way to finance it to make it permanent. Those are the real stakes of 2012.

“Even if Mr. Obama gets his debt-limit increase without any spending cuts, he will pay a price for the privilege. He’ll have reinforced his well-earned reputation as a spender with no modern peer. He’ll own the record deficits and fast-rising debt. And he’ll own the U.S. credit-rating downgrade to AA if Standard & Poor’s so decides.”

***
“Most people don’t care about the deficit, much less the debt ceiling. They care about jobs and the economy–which is the real advantage Republicans have in the coming campaign.

“If McConnell actually proposes to pull an Emily Littella and say ‘Never mind’ about the debt ceiling, the President can pocket this inadvertent gesture of sanity, sign the debt ceiling extension…and then come right back with an economic package reducing the deficit $2.4 trillion over the next ten years, including the budget cuts that both sides have agreed upon plus the loophole closing revenue raisers–corporate jets, oil and ethanol subsidies, and hedge fund manager tax breaks–that 80% of the American people favor. Let the Republicans vote that one down, or refuse to consider it at all in the House of Representatives. Barack Obama would have a lovely issue to run on.

“But I don’t believe for a moment that McConnell is going to do this. He’s desperate, facing a deal that either includes revenue increases or doesn’t happen at all. He’s blinking as fast as he can.”

***
“There is no constitutional authority for the legislative branch to surrender its clearly delineated duty to write bills for raising revenue and borrow money on the credit of the United States.

“Treasury Secretary Tim Geithner recently employed a clever but easily falsifiable argument, which cites Section 4 of the 14th Amendment to claim that the president can override the separation of powers…

“McConnell’s enthusiasm for this unconstitutional gimmick is disheartening, but it does not change the law. Congress has no more right to give up its authority than the president has to confiscate it.”

***
“Despite intense lobbying of Congress by President Obama, Treasury Secretary Timothy Geithner, and others in the administration about the economic urgency for raising the nation’s debt limit, fewer than one in four Americans favor the general idea of raising it. Also, Americans are significantly more concerned about the budgetary risk of giving the government a new license to spend than they are about the potential economic consequences that would result from not raising the debt limit. Both of these findings put Americans more on congressional Republicans’ side of the debate than Obama’s — at least in terms of political leverage as the two sides negotiate a deal.”

***
Via Verum Serum.

***
“I can guarantee you, Mark, that plan is going nowhere.” Click the image to listen.

Euro Bank Stress Tests In Focus!

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

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

Obama Deal With Boehner Upset by Last-Minute ‘Gang of Six’ Plan

July 23, 2011, 1:45 AM EDT
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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

Man Charged in Deadliest Norway Attacks Since World War II

July 23, 2011, 6:10 AM EDT
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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

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!

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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.



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