Good morning. Here’s what you need to know:1. U.S. stock index futures fell on Sunday. Negotiations on reducing the deficit and raising the debt ceiling continue to be unproductive. No deal seems imminent (or even within reach). The prospect of default — once consider an impossible outcome — looms.
2. House Speaker John Boehner (R-OH) said yesterday that resolution to the debt ceiling impasse would necessarily require a two-stage deal, with an initial stopgap agreement to reassure investors and more fundamental reform left until later. ”There is going to be a two-stage process. It is not physically possible to do all of this in one step,” he told Fox News.
3. David Rogers of Politico reports: “With markets waking, Washington’s debt standoff worsened significantly Sunday amid recriminations and distrust just eight days before the real threat on an unprecedented default.” That about sums it up.
4. Moody’s downgraded Greece by three notches to Ca, Athens’ lowest rating and one that implies the country is already in default. Moody’s also warned that last week’s set of measures to shore up the eurozone could lead to downgrades of the creditor countries because of the precedent for future bail-outs.
5. Wolfgang Munchau’s notes that when everyone comes back from their August vacations, the eurozone will still have its Euro and it will still have its crisis. A third bailout package for Greece will almost certainly be required in the autumn.
6. The Washington Post reports: “A year-long military-led investigation has concluded that U.S. taxpayer money has been indirectly funneled to the Taliban under a $2.16 billion transportation contract that the United States has funded in part to promote Afghan businesses.”
7. Karl W. Eikenberry spent five years — two tours as a general and one as the US Ambassador — serving in Afghanistan. He was perhaps the leading sceptic of US policy in Afghanistan. He was exceptionally good at his job.
8. State Treasurer Gina Raimondo (D-RI) is in charge of putting Rhode Island’s public pension system on firm financial footing. She’s a remarkably talented and tenacious woman. Her success or failure at fixing the broken Rhode Island pension system will inform what happens at state and municipal pensions around the country. So everyone is watching what she does.
9. Real Clear Politics reports that Governor Rick Perry is all but certain to run for the 2012 GOP presidential nomination and that he will likely announce his candidacy in late August.
10. Rep. Michele Bachmann’s presidential campaign unloaded on Tim Pawlenty over the weekend, attacking him as a flip-flopping, Obama-loving, liberal Republican.
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