Good morning! Here’s what you need to know:
1. Greece will default on its debts, Martin Wolf argues in his column in the Financial Times today. Other “peripherals” will follow. It is their least bad option and they have no other realistic choice.
2. For the last three years, The New York Times reports, federal agencies have backed new mortgages as large as $729,750…in high-cost states like California, New York, New Jersey, Connecticut and Massachusetts. Without the government covering the risk of default, many lenders would have refused to make the loans.” The Federal government will soon withdraw that support, sparking fears of another tumble in the housing market.
3. There’s a growing sense that a workable agreement on federal deficit reduction will not be forthcoming. The “Gang of Six” and the “Biden Group” appear to be stalled. Consensus on taxes and spending reduction seems remote.
4. President Obama campaigned in Texas yesterday, saying that immigration “reform” would make the US more economically competitive in the 21st Century. Mr. Obama’s campaign managers imagine (they say) that they have a chance of winning Texas in 2012. They don’t.
5. Newt Gingrich imagines that he is an American Churchill, banished into exile only to return and lead his country through its most perilous hour. Mr. Gingrich officially announces his campaign for the GOP’s 2012 presidential nomination today.
6. Former US Ambassador to China Jon Huntsman imagines that he can defeat Mitt Romney in New Hampshire and thus become a front-runner for the 2012 GOP presidential nomination. Mr. Huntsman plans to spend five straight days in New Hampshire to drum up support.
7. Mitt Romney is hoping that he can reposition himself on the issue of healthcare. Mr. Romney will deliver a “major speech” on how to “repeal and replace” Obamacare.
8. Mitt Romney is raising as much money as he can from all over the country. He anticipates a long march to the nomination and he’s hoping he can “out-resource” his opponents.
10. Saudi money and the Pakistani army are the two key building blocks of radical Islamist jihadis. They provide the money and the cover. Change that and you change the game. Don’t and you don’t.
11. President Obama is preparing a fresh appeal to the Muslim world, his aides say, in the wake of the assassination of Osama bin Laden. A speech is planned for as early as next week.