Good morning. Here’s the news:
1. Rioting continued across London for the third consecutive night. Riots also broke out in Birmingham, Bristol and Liverpool. British Prime Minister Cameron said today that 16,000 police would be on the streets of London tonight and that anyone involved in illegal conduct would feel “the full force of the law.”
2. Reuters reports: “European shares fell sharply on Tuesday, hitting a fresh two-year low on concern that major economies could fall back into recession and widespread scepticism over whether policymakers could stop the rot.”
3. The bear market has gone global. London is 20% of its highs. Honk Kong is 23% of its highs. The S&P 500 is 18% of its highs. Last week, $1.9 trillion in equity value evaporated in the US market meltdown.
4. The Wall Street Journal reports: “The cost of insuring French sovereign debt against default jumped to record highs Monday, as investors took Standard & Poor’s Corp.’s downgrade of the U.S. as a reason to question the ratings of other highly indebted sovereign nations.” Meanwhile, the cost of insuring German sovereign debt is also rising quickly.
5. The ECB bond-buying spree of Italian and Spanish debt has temporarily eased the solvency crisis inside those countries. The eyes of the financial world now turn to the US Federal Reserve Bank, which meets this morning. Investors are hoping for further stimulus from the Fed.
6. Former Treasury Secretary Hank Paulson says that the thing that is really rattling the markets right now is not the US downgrade, but the solvency crisis in Europe. Or as he says: “The most pressing and significant problems in the global economy are unsustainable structural issues with regard to the E.U. — fiscal deficits and the structure of the EU itself.”
7. Reuters reports: “China is still nursing a hangover from its 2008 stimulus spending spree and may be reluctant to kick off another big round, leaving less potent options on the table should the global economy tilt toward a cliff.”
8. The “days not weeks war,” also known as the Libyan misadventure, continues its downward spiral. The rebel “transitional authority” dissolved its own cabinet amid turmoil and dissension in the ranks.
9. President Obama’s re-election operation is planning to run a sharply negative campaign against Mitt Romney, should Romney win the 2012 GOP presidential nomination. Officials in the Obama camp told Politico that they would portray Romney as “weird” (read: Mormon) and as “a political Gordon Gekko.”
10. Rick Perry plans to signal his intention to run for the 2012 GOP presidential nomination at a speech in South Carolina this coming Saturday. In the most recent poll of GOP primary voters, Mr. Perry (17%) runs second to Mitt Romney (24%).
11. The Ames, Iowa Straw Poll is also this coming Saturday. GOP contenders Michele Bachmann, Ron Paul and Tim Pawlenty are scrambling for support. Things are said to be not going well for Mr. Pawlenty.
12. Recall elections today in Wisconsin are being billed as the opening curtain of the 2012 elections. Business Insider Politics will have election results this evening, beginning at 9pm or thereabouts.
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