Here’s what you need to know this morning:
- Greece has finally been offered its European bailout with a 30 billion euro loan ($40.9 billion) at 5%, lower than market rates. The IMF is set to offer an additional 15 billion euros ($20.2 billion) as part of the deal. The euro is up .56% on the news.
- Attention has now turned to Spain and its 11.3% of GDP budget deficit as the European debt crisis begins to spread across the Mediterranean area. The country’s prime minister has had to publicly defend his country’s austerity budget in the last 24 hours.
- Businesses are moving to restock at a significant pace signaling confidence in the recovery. The variety of businesses is significant, with the likes of Tiffany’s and Home Depot making similar inventory moves, according to Bloomberg.
- U.S. rail traffic has fallen off due to a decline in in the shipment of coal, grain, construction materials, vehicles, and metal products.
- Gold has risen to a 4-month high this morning, as other metals commodities also saw significant gains. Platinum is near a 20-month high and palladium is near a 2-year high.
- Oil prices have gone back above $85 as a result of the resolution of the Greek situation and a weakening dollar. Positive data out of China showing higher demand for crude oil is also having an impact.
- Oil may have more serious long term problems though, with a U.S. military report revealing fears that extra capacity for oil production could cease to exist by 2012, with a 10 million barrel shortfall in oil predicted for 2015.
- A Nomura Asset Management chief has given support to the China bubble argument stating that Chinese real estate in prime cities is overheated.
- JP Morgan Chase, Wells Fargo, and Bank of America have been hit hard this morning, with news that the three will need to protect themselves from a potential $30 billion home-equity loan loss. This amount is near equal to the anticipated profit at the three banks this year, according to Bloomberg.
- UBS, the Swiss bank under investigation for its involvement in tax evasion activities by the U.S. government, has come out with strong quarterly profits, the company’s highest in 3 years. The company’s debt trading unit is cited for 1.4 billion pounds ($2.2 billion) of the company’s 1.52 billion pound ($2.3 billion) rebound.
- Bonus: Lady Gaga has come out publicly in defence of celibacy, a lack of activity she says she practices.
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