Good morning! Here’s what’s you need to know:
1. General David Petraeus says that the US military has made steady progress in Afghanistan. Gen. Petraeus previewed his upcoming Congressional testimony in The New York Times.
2. defence Secretary Robert Gates said yesterday that this spring and summer would be the “acid test” of US military strategy in Afghanistan. Mr. Gates is visiting US and coalition troops there.
3. The Taliban killed a lot of people in Pakistan yesterday. A car-bomb killed at least 25 people near ISI headquarters in Islamabad. A suicide bomber killed at least 34 others at a funeral in northwestern Pakistan.
4. Recent events in the Middle East are often described as the “Second Arab Awakening.” Richard Haass looks at US policy options in the Middle East in light of the Second Arab Awakening and notes: “There is more than a little irony in the fact that the international community has so far been much tougher on Egypt and Bahrain than on Syria or Iran. Officials in the US and Europe should instead step up their public calls for significant political reform in these highly controlled unfriendly countries, as well as channel help to legitimate opposition movements.”
5. The Wall Street Journal reports: “Analysts don’t think China is on the verge of a debt crisis. Tax revenue is rising quickly, the state has considerable assets, and almost all of its debt is denominated in domestic currency.” Some analysts do think China is on the verge of a debt crisis.
6. One country that surely is in a debt crisis is Greece. The cost of insuring against Greek default is soaring yet again to new heights.
7. The idea of stress tests is to see how an institution would (hypothetically) stand up under duress. The European community has decided that stress tests are, like, too stressful. So Eurozone member countries are being allowed to soften them as needed.
8. Financial Times columnist Martin Wolf remains upbeat on the future of the European Union. He’s realistic about the challenges, but says that in the end, the advantages of union overwhelm the difficulties of the moment.
9. Synthetic junk bonds are all the rage. They enable investors to take positions in the US junk bond market without owning the underlying securities. Many of the bad habits from the credit bubble are making a comeback in financial markets.
10. There may be an extension of the extension (which could lead to an extension of the extension of the extension). Republican leaders in the House of Representatives are crafting legislation to fund the government for several weeks beyond the current March 18 deadline.
11. Mitt Romney is downplaying Iowa in his quest for the 2012 GOP presidential nomination. It’s a choice dictated by necessity: Romney runs poorly in Iowa, he runs well in New Hampshire.
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