Good morning. Here’s what you need to know:1. The Wall Street Journal reports: “Europe’s banks are sitting on vast quantities of loans to individuals and businesses in cash-strapped Southern European countries, highlighting how plain-vanilla loans, not just government debt, pose potential risks to the Continent’s troubled banking system.”
2. Wolfgang Munchau, the Boswell of the crisis of the eurozone, writes: “I now would put the odds of a break-up of the eurozone at 50:50. This is not because I doubt the pledge by the European Council to do whatever it takes to save the euro but because I fear it has left things too late…This is a systemic crisis of a monetary union that refuses to be a fiscal union.”
3. Obama Administration officials and Republican Congressional leaders took to the TV chat shows yesterday to insist that a deal to raise the nation’s debt ceiling would be arrived at before the money runs out on August 2nd.
4. A compromise plan to raise the debt ceiling and reduce the Federal deficit by $1.5 trillion over 10 years is being fashioned by Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY). This appears to be the plan that everyone is hoping will avert a default by the United States.
5. Meanwhile, Politico reports: “Turning right with a vengeance, Republicans will bring to the House floor Tuesday a newly revised debt-ceiling bill that is remarkable for its total absence of compromise at this late date, two weeks before the threat of default.”
6. The Republican Congressional leadership is concerned that a failure to raise the debt ceiling will turn into a national catastrophe and that the GOP will be blamed for that catastrophe. GOP leaders are working overtime to convince the freshmen members of Congress that they need to walk back from their opposition to raising the debt ceiling.
7. Rep. Kevin McCarthy is the man who wrangles the 87 GOP freshmen members of Congress. The New York Times Sunday Magazine yesterday published a superb profile of McCarthy, which we urge you to read. The difference between the caricature and the reality of the 87 freshmen members of Congress is stunning.
8. The nation’s governors met in Salt Lake City, Utah this weekend to share ideas about how to govern in the “new normal.” The “new normal” means less Federal aid; not just the expiration of stimulus funds, but less and less Federal money year after year as Washington adjusts to its own “new normal.”
9. Texas Governor Rick Perry says he is almost ready to run for the 2012 GOP presidential nomination. ‘I’m getting more and more comfortable every day that this is what I’ve been called to do. This is what America needs.”
10. Bundlers raised at least $36 million for President Obama’s re-election campaign. Bundlers are individuals who raise substantial sums of money from their networks of friends and business associates.
11. Darren Clarke won the Open Championship. His challengers faded on the final nine holes. He did not.
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