Good morning. Here’s the news:1. Reuters reports: “European finance ministers have been warned confidentially of the danger of a renewed credit crunch as a “systemic” crisis in euro zone sovereign debt spills over to banks.” The report recommends that “further reinforcement of bank resources is advisable.”
2. German Chancellor Angela Merkel today rejected joint eurozone bonds as “absolutely wrong.” Reuters reports that she instead believes that “restoring stability to the single currency bloc required a longer-term step-by-step approach.”
3. The Wall Street Journal reports: “Europe’s financial crisis intensified Wednesday as banks moved to obtain more dollars for loans to their U.S. customers, and some nervous corporate clients began looking to banks outside the euro zone for loans.”
4. George Soros writes a smart summary of the eurozone crisis and why it remains unresolved. He then argues that only a European Treasury, with the power to both spend and tax, can resolve the crisis. If something like this is not done, Soros says, a Second Great Depression will likely follow.
5. World Bank President Robert Zoellick yesterday said that the world had entered an economic danger zone and Europe, Japan and the United States all needed to make hard decisions to avoid dragging down the global economy.
6. Fareed Zakaria opines that China should bail out Italy (and thus save the eurozone). He argues that such a move would allow China to earn its place as a “responsible stakeholder” in the “councils of power.” Why China would make such an investment remains unexplained.
7. The Sunday Times of London reports that, according to a Goldman Sachs report, the US will become the world’s top oil producer in 2017.
8. The insufferable knowingness of the Obama Administration continues to annoy George Will, along with tens of millions of Americans. Will writes: “Barack Obama, a pitilessly rhetorical president, continues to grab the nation by its lapels, demanding its attention, and is paying the price: The nation is no longer listening. This matters because ominous portents are multiplying.”
9. US military equipment is badly in need of a thorough (and expensive) upgrade. The US Air Force, in particular, needs modernization.
10. President Obama next Monday will send his deficit reduction package to Capital Hill. The package is unlikely to include any cuts to Social Security and may offer no adjustments on Medicare. The White House was (and is) alarmed by the fact that “protecting” Social Security did not work for the Democrats as a political issue in New York’s 9th Congressional District special election two days ago.
11. Texas Governor Rick Perry yesterday spoke about his faith and his purpose in life at Liberty University. Following two uncertain debate performances, he was moving to shore up his base among evangelical voters.
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