Boehner: “No Deal”

Hope this clears things up.

WASHINGTON (AP) — Speaker John Boehner declared Friday that the House has “done its job” toward resolving the impasse over raising the government’s debt limit and said it was time for the Senate to act.

“There is no deal. There is no agreement in private” with Democrats, Boehner told reporters at the Capitol as the Senate was undertaking a vote on a bill pushed through the House by majority Republicans which is called “cap, cut and balance” in pursuit of an accommodation on raising the government’s debt limit. Treasury’s borrowing authority expires Aug. 2, and the government will be facing default at that time in the absence of legislation to raise the debt limit.

A testy Boehner said at one point that “at the end of the day, we have a spending problem,” blaming that on Democrats and then abruptly declaring an end to his news conference.

Boehner’s appearance came after days of partisan wrangling and as the Senate was voting on on Republican-pushed legislation tying an increase in borrowing authority to a substantial program of spending cuts, including restraints on Social Security and Medicare.

House Majority Leader Eric Cantor called on Democrats to produce their own plan.

The complex is set to go up in Dallas. Construction is alive in well, depending on where you look.

Water utilities rejoice…

(CNN) — The dangerous heat wave blamed for as many as 13 deaths spread into the eastern United States on Wednesday, extending its reach across nearly half the U.S. population, officials said.

About 141 million people in a 1 million-square-mile area were under heat advisories and warnings, Justin Kenney, spokesman for the National Oceanic and Atmospheric Administration, tweeted.

The National Weather Service said “temperatures in the mid-90s will be possible across the mid-Atlantic states today. High temperatures will near 100 degrees tomorrow across much of the mid-Atlantic and parts of the Southeast. These triple-digit temperatures are forecast to remain in place across the eastern U.S. through Saturday before cooling off slightly to the mid-90s by Sunday.”

While it is unclear how many deaths will ultimately be blamed on the heat, the National Weather Service said 13 fatalities were “potentially related to the heat wave in the Midwest.”

WASHINGTON – The bipartisan Senate plan — which in a span of 24 hours has emerged as the leading proposal to lift lawmakers out of their debt-ceiling quagmire — is now running into doubts about whether there’s enough time or consensus to move forward on it.

Members of both parties made clear Wednesday that they weren’t yet sold on the idea put forth by the “Gang of Six” to curb spending even though aides reported that 30 senators had signed on already.

Some Republicans claimed to be holding out hope for the plan they passed out of the House Tuesday evening to cut and cap federal spending and push a balanced-budget amendment in exchange for a debt-ceiling increase.

“In case Senator Reid didn’t notice, a bipartisan ‘Gang of 234’ just sent him the way forward,” Rep. Jim Jordan, R-Ohio, chairman of the Republican Study Committee, said in reference to the House bill vote. “This is the only plan that can fundamentally solve our debt problem.”

Read here.

A House panel is considering a bill Wednesday that would suspend billions in foreign aid to several governments in the Middle East and beyond until the Obama administration can certify they are not controlled by groups hostile to the United States and its allies.

The bill, which provides the blueprint for U.S. foreign aid around the world, contains a big loophole — despite the myriad requirements outlined in the draft, it would allow the president to waive them in the interest of national security.

But the provisions, if passed, would impose a new and rigorous set of standards on how U.S. aid is distributed to nations and a leading group known for hosting a thriving anti-American contingent.

The proposal would require Egypt, Pakistan, Lebanon, Yemen and the Palestinian Authority to meet specific requirements in order to receive U.S. aid.

The most telling part of this piece is definitely the assessment of renting on the overall picture.

WASHINGTON (AP) — Builders broke ground on more single-family homes and apartments in June, helping the battered construction industry gain a little life after a dismal spring.

The Commerce Department said Tuesday that builders began work on a seasonally adjusted 629,000 homes last month, a 14.6 percent increase from May.

Still, that’s roughly half the 1.2 million homes per year that economists say must be built to sustain a healthy housing market. Jennifer Lee, a senior economist at BMO Capital Markets, called the gains “just a blip in the overall flat-lining trend of homebuilding activity.”

“We have to see a rebound in job creation to sustain a recovery in housing,” she said.

Much of the increase in June came from a surge in apartment construction, a volatile part of the industry. That sector jumped more than 30 percent last month.

Renting has become a preferred option for many Americans who lost their jobs during the recession and were forced to leave their rapidly depreciating homes. Since 1992, apartments have typically made up just 20 percent of home construction. Now, they make up closer to 30 percent of the market.

Single-family home construction rose 9.4 percent. It was the biggest increase since June 2009, when the recession officially ended. But analysts said the pace of 453,000 homes per year was still too depressed to signal a turnaround.

“The underlying trend of single-family housing starts shows no signs of improving in a significant manner anytime soon,” said Joshua Shapiro, chief U.S. economist at MFR Inc.

Building permits, a gauge of future construction, increased 2.5 percent.

Do not mess with Murdoch.

LONDON (AP) — Sean Hoare was the kind of reporter who could knock back several whiskeys and a few lines of cocaine before filing salacious stories of celebrity misbehavior.

He was also the first journalist to openly say that his former friend and editor at the News of the World, Andy Coulson, knew about the tabloid’s widespread use of phone hacking. Coulson links the scandal to Prime Minister David Cameron, who he worked for as communications chief.

Hoare’s death this week added another tragic twist to the scandal, which has forced the paper’s closure, brought down senior police officials and threatened to engulf the rest of Rupert Murdoch’s media empire.

Hertfordshire police discovered Hoare’s body at his home north of London on Monday morning. They describe his death as “unexplained, but not suspicious,” and are waiting for the results of Tuesday’s post-mortem.

NEW YORK (AP) — Things keep getting worse for Bank of America.

On Tuesday, the nation’s largest bank reported a loss of $9.1billion during the second quarter, partly due to an $8.5 billion settlement with investors. That agreement, reached in June, settled claims that the bank had sold the investors poor-quality mortgage bonds. The bank had already announced several other settlements this year. The total so far to settle investor claims: $12.7 billion.

The large settlements and protracted losses related to mortgage loans is causing investors to worry about something bigger: Bank of America’s overall financial strength. In a conference call to discuss the earnings report, analysts grilled the bank’s executives.

At the top of their list of concerns? Whether the bank will need to raise more money to comply with new international requirements that large banks hold more capital. If Bank of America needed to boost its capital reserves, it might look to raise more money by issuing more common shares of its stock. That would dilute the value of stock owned by current shareholders.

The stock is already down more than 35 percent for the year and is the only large bank whose shares trade below $10 per share.

If you have not done so already, I insist you go to Fox News’ home page and look at the picture they have up of Harry Reid.

He looks like a complete jackass, when he’s being bitchy.

CNN had a great one of Boehner up earlier, with his face in an upside-down-frown. The guy looked like a toad.

Good work Cantory, in forcing these clowns to ride their bikes at the brick wall one last time. Hopefully it doesn’t come back to bite you in the ass.

Eric Cantor’s simmering insistence on avoiding tax hikes has boiled to a political tempest in Washington’s debt negotiations, infuriating Democrats who are now labeling the majority leader as “childish” and forcing Republicans to insist there’s no rift between House Speaker John Boehner and his top deputy.

Cantor’s steadfast refusal to raise taxes as part of a deal to increase the nation’s $14.3 trillion debt limit has earned him praise from the Tea Party wing of his own party, but the scorn of Democrats, who are demanding the No. 2 House Republican be booted from negotiations.

“Eric Cantor has shown that he shouldn’t even be at the table and Republicans agree he shouldn’t be at the table,” Senate Majority Leader Harry Reid said on the chamber’s floor Thursday.

“Boehner needs to rein him in, and let the grown-ups get to work,” added a House Democratic source who called Cantor “juvenile.”

Senate Democrats later appeared alongside Treasury Secretary Timothy Geithner to underscore the urgency of the situation, while voicing their own frustrations with Cantor.

Washington (CNN) — After hinting for months that he would start a “trusted traveler” program to expedite security screening for air passengers, TSA Chief John Pistole took his first step in that direction Thursday, announcing a pilot program to ease screening for passengers who voluntarily release certain information about themselves.

The pilot test is based on U.S. customs programs and initially will be available only to certain participants in the customs program and a limited number of air travelers. Those include certain frequent fliers on two airlines — American and Delta — flying out of certain airports. Delta passengers must be flying out of Atlanta and Detroit airports, and American Airlines passengers must be flying out of Miami and Dallas airports.

But if it is successful, the program would likely be expanded to include other air travelers who voluntarily give additional information about themselves.

London (CNN) — Media tycoon Rupert Murdoch and his son James will attend a hearing over the phone-hacking scandal before British lawmakers next Tuesday, their company, News International, told CNN Thursday.

The House of Commons had issued the pair a summons to appear after the Murdochs initially told the Culture, Media and Sport Select Committee they could not attend the July 19 hearing.

News Corp. boss Rupert Murdoch wrote to the committee earlier that he was “not available to attend,” although he said he was “fully prepared to give evidence to the forthcoming judge-led public inquiry.”

That investigation was launched Wednesday by Prime Minister David Cameron in response to allegations that journalists working for Murdoch’s media empire illegally eavesdropped on phone messages of thousands of people and bribed police.

James Murdoch, who heads the News International newspaper group, a News Corp. subsidiary, had said he could not appear before lawmakers before August 10 or 11.

NEW YORK (AP) – Borders Group teetered on the brink of liquidation Thursday after an offer from a private-equity investor disintegrated.

The bookseller appeared to have found its white night in Najafi Cos. back in July, when the private-equity investor from Phoenix offered $215 million for the company, plus the assumption of $220 million in debt.

But on Wednesday creditors objected, saying that the agreement would not prevent Najafi from taking possession of the company and liquidating it immediately for profit.

Creditors said a bid from liquidators Hilco Merchant Resources and Gordon Brothers is stronger. They believe it would pay out between $252 million and $284 million in cash.

That offer should be the primary, or “stalking horse” bid, instead of the one from Najafi Cos., creditors said.

Creditors said in a court filing that they were hopeful Najafi would submit a higher bid, but Najafi stood by its original offer.

On Thursday, Borders said it wouldn’t seek approval for Najafi’s bid in a hearing scheduled for 10 a.m. in the U.S. Bankruptcy Courth Southern District of New York and designated the liquidators as the “stalking horse” bid.

WASHINGTON (AP) – Echoing President Barack Obama’s warning, Senate Majority Leader Harry Reid says Social Security payments would stop if there is no deal to raise the government’s borrowing limit by Aug. 2.

Speaking on the Senate floor, the Nevada Democrat said flatly that payments for veterans benefits and the military, as well as Social Security, would cease if the government defaults on its obligations. His statement goes beyond Obama, who said earlier this week that he could not guarantee Social Security checks will be issued on Aug. 3.

Later, a Reid spokesman said the senator meant to say the payments “could” stop, which would be consistent with the president’s comments.

Republicans have called such statements scare tactics.

About 55 million Americans receive Social Security payments each month, totaling about $60 billion.

According to Shilling, it’s the best of the worst:

According to A. Gary Shilling America’s economy is “the best of a bad lot”. This thinking isn’t going to make anyone break into a USA chant, but Shilling thinks it will be good enough to keep treasuries moving higher for the foreseeable future. “The U.S. is the ultimate safe haven in the world” he says. It’s a statement at once reassuring and horrifying for anyone paying attention to the domestic economy.

The author of “The Age of Deleveraging” and long-time bond bull notes that Europe is going to hell in a hand-basket and China is slamming on the breaks, leaving U.S. bonds “very attractive”, particularly the 30-year. When asked why anyone would buy a bond paying 4.2% Shilling says he simply couldn’t care less what the yield is as long as it’s going down. The genially gloomy investor is expecting yields to drop all the way to 3%, a move that would spell more than attractive returns for bondholders.

Of course you can’t get excited about relative returns without asking relative to what other asset classes. Having already dismissed the rest of the global economy the obvious question is whether or not stocks can continue to levitate in the face of stubborn unemployment and anemic growth. In short, no. In longer form Shilling dismisses the bullish notion of a second half recovery. Even if the economy grows at the anemic sub-2% rate of late, and Shilling thinks GDP will be much worse, stocks are likely to start missing even low-balled estimates in Q’s 3 and 4. Companies lowering estimates and missing earnings forecasts is not traditionally a bull market make.

WASHINGTON (Reuters) – Federal Reserve Chairman Ben Bernanke renewed his promise on Thursday that the central bank could put more monetary stimulus into play if the economic recovery stumbles.

On the second day of delivering the Fed’s semiannual monetary policy report to Congress, Bernanke is also expected to repeat his warning that a debt default would be devastating for the U.S. and the global economy.

Moody’s ratings agency warned late on Wednesday that the U.S. could lose its top credit rating in coming weeks if a standoff between the White House and congressional Republicans over raising the statutory borrowing limit is not resolved.

Bernanke’s comments to the Senate Banking Committee closely reflect remarks delivered to a House of Representatives panel on Wednesday.

Economic reports released on Thursday offered mixed signals about the path of the world’s largest economy, which grew at a tepid 1.9 percent annual rate in the first three months of the year and is not expected to expand much more quickly in the second quarter.

Retail sales rose in June, and claims for unemployment benefits fell last week. However, last month’s producer prices posted their steepest decline since February 2010 as energy prices eased.

While Fed policymakers have been worried about rising inflation, the risk of a damaging deflationary spiral could force the central bank to act to promote growth.

A separate report showed business inventories rose in May as sales posted their first drop in almost a year.

Although Bernanke said the Fed’s $600 billion bond buying program has been effective in lowering long-term interest rates and coaxing investors to take greater risks, it has been controversial.

“I believe the stage is set for a resurgence of inflation if the Fed is not careful,” Senator Richard Shelby told Bernanke at the hearing.

WASHINGTON – Stalemate in Libya is giving way to building rebel pressure against the regime of Muammar Qaddafi, according to new U.S. intelligence reports, U.S. officials tell The Associated Press.

While the battle is far from won, the officials point to three key indicators: dwindling fuel supplies, a cash crisis and reports of low morale among regime troops.

The assessment comes as French authorities describe overtures from Libyan emissaries reportedly seeking sanctuary for the Libyan leader, who has survived sustained bombing by NATO war planes and U.S. armed drones since mid-March.

While the rebels face their own supply problems, they have captured towns from Nalut to Kikla in Libya’s western Nafusa mountains and cut a key crude oil pipeline that feeds one of the regime’s major refineries in the town of al-Zawiya, the U.S. officials told the AP. They cited U.S. intelligence estimates that fuel shortages could occur within as little as a month.

Qaddafi is also facing a cash crisis after Turkey cut off his access, on July 4, to hundreds of millions in Libyan funds held in a Turkish-Libyan bank, the U.S. officials said. They spoke on condition of anonymity to discuss matters of intelligence.

While the Libyan strongman could not access actual cash, he had been issuing letters of credit to pay his debtors, including fuel importers, the U.S. officials said.

From Forbes:

As contagion sends ripple effects through the European periphery, with Italy in the eye of the storm amid rumors that the European Central Bank (ECB) has intervened and bought Italian sovereign bonds on the secondary market, analysts are coming to the conclusion that Italy is too big to bail given massive funding requirements and total debt outstanding of €1.6 trillion ($2.2 trillion).

Italian equities managed to record some gains during Tuesday’s session, up 1.3% after a terrible two-day beat-down that led to some of the largest spread moves in sovereign bonds in the European Monetary Union’s History and to what Italian’s called “Black Friday”. Yields on benchmark 10-year Italian bonds fell marginally on Tuesday and stood at 5.66%, just below Spain’s 5.96%.

With a plethora of negative news coming out of Europe on a daily basis, it is hard to attribute this Italian crisis to one event, but what is undeniable is that markets are coming to the realization that Italy is a whole different animal from Greece, Ireland, and Portugal, and that bailing it out might deliver a final blow to the beleaguered European Union. (Read Euro Contagion: Italian Equities Tank, Yields And CDS Jump).

Differences are staggering. While funding requirements for 2012 the three PIIGs that have already been bailed out totals €91 billion ($127 billion), Italy’s funding requirements reach a massive €250 billion ($350 billion). Total outstanding debt for the country run by Prime Minister Silvio Berlusconi is around €1.6 trillion ($2.2 trillion), compared with €345 million for Greece, and about €150 billion each for Portugal and Ireland, according to numbers crunched up by Nomura.

If Italy were to fail, the problem would be that it is too big to bail. Nomura’s analysts point out that current European Financial Stabilization Facility (EFSF) mechanisms were designed to deal with failure of relatively small countries being bailed out by a relatively large group of participating Eurozone countries. The equation changes for Italy.

Currently, the EFSF has an effective lending capacity of €320 billion ($448 billion) out of a total of €440 billion ($616 billion); Italy’s funding needs over the next two years exceed €500 billion ($770 billion). Not only would the EFSF (and its successor, the European Stability Mechanism-ESM-with total authorized capital estimated to be around billion) lack the capacity to bail out Italy, the number of countries ready and willing to lend Rome a hand would be reduced to only two: France and Germany. (Read French Banks Hold $93B In Greek Debt As Sarkozy Announces Rollover Deal).

If Europe’s two big dogs were forced to cough up €500 billion for their Italian buddies, that would constitute approximately 10% of their combined GDP (around €5 trillion, according to Nomura). According to the note:

At some point the load will be too big for France and Germany too. For example, would France be able to sustain an AAA rating with contingent liabilities to Italy in excess of 10% of GDP?

There is not enough capacity to bail out Italy within the current bail-out infrastructure. And even an expanded EFSF may not be able to provide a credible backstop over the medium-term

One possible alternative is central bank intervention to lower rates. Traders on Tuesday were pretty sure they saw the hand of the ECB, through the Bank of Italy, in sovereign bond markets for Italian debt. And on Monday, a meeting of European Finance Ministers allowed for the possibility that the EFSF could be allowed to buy sovereigns in the secondary market.

But this might not be enough, as FT Alphaville notes. While the ECB has already tried these interventions with Greece, Portugal, and Ireland, it has not succeeded in ensuring “depth and liquidity in those market segments which are dysfunctional,” as trade volumes in those suggest. And, given the size of the Italian bond market, with “daily turnover in May of €12 billion” and gross issuance in the third quarter of €31 billion in two, five, and ten-year bonds, it would be a disaster for the ECB to make Italy “a regular patient.”

The situation is dire indeed. The political battle to bail-out small nations in Germany was massive, eroding much of Chancellor Angela Merkel’s political capital. Bailing out Italy, then, seems like an economic, political, and social impossibility.

This gives me so much pleasure.

NEW YORK (CNNMoney) — Buffeted by high taxes, strict regulations and uncertain state budgets, a growing number of California companies are seeking friendlier business environments outside of the Golden State.

And governors around the country, smelling blood in the water, have stepped up their courtship of California companies. Officials in states like Florida, Texas, Arizona and Utah are telling California firms how business-friendly they are in comparison.

Companies are “disinvesting” in California at a rate five times greater than just two years ago, said Joseph Vranich, a business relocation expert based in Irvine. This includes leaving altogether, establishing divisions elsewhere or opting not to set up shop in California.

“There is a feeling that the state is not stable,” Vranich said. “Sacramento can’t get its act together…and that includes the governor, legislators and regulatory agencies that are running wild.”

The state has been ranked by Chief Executive magazine as the worst place to do business for seven years.

“California, once a business friendly state, continues to conduct a war on its own economy,” the magazine wrote.

From CNN:

In a nod to Big Business, President Obama on Monday issued an executive order asking independent agencies to rid their books of old and outdated regulations.

The White House made a similar request earlier this year to agencies it oversees. The new order asks agencies that don’t answer to the White House to join in this call to cut red tape.

“We are taking immediate steps to eliminate millions of hours in annual paperwork burdens for large and small business and save more than a $1 billion in annual regulatory costs,” said Obama in a memo accompanying the order.

The order, which was delivered to independent agencies on Monday, signals the White House’s sensitivity to complaints lobbed by big business groups and Republicans — that bureaucratic red tape and new rules are putting a crunch on job creation.

These groups are especially complaining about rules implementing expanded health care coverage, Wall Street reform and improved air quality standards.

Shares of Las Vegas Sands (NYSE: LVS – News), the operator of the Palazzo and Venetian resorts and the largest U.S. casino operator by market value, are down 3% today despite news that Nevada’s gambling revenue surged 16% in May, the largest monthly increase since 2006. Nevada casinos collected $984 million from casinos in May compared with $847.1 million in May 2010, according to the Las Vegas Review-Journal, which cited the state’s Gaming Control Board.

The news isn’t providing any assistance to the Casino Stocks Index, which is down 1.5%. The Index has jumped nearly 16% in the past month. Revenue on the Las Vegas strip rose almost 29% to $580.4 million from $450.2 million in May, according to the Review-Journal. That’s good for the best increase in Strip revenue since February 2010.

All areas of Clark County, except for Laughlin, showed increases in May gambling revenue. Laughlin experienced a 10.6% decline, the paper reported. For the fiscal year, which ended in June, gaming tax collections were more than $651.8 million, an increase of 3.3% over fiscal 2010, the Review-Journal reported.

Still, the news isn’t propping up casino stocks today. MGM Resorts International (NYSE: MGM – News) is slumping 5% while Wynn Resorts (NASDAQ: WYNN – News) is down 2%. Penn National Gaming (NASDAQ: PENN – News) is lower by 4% and Boyd Gaming (NYSE: BYD – News) is off 3%.