While the market is trapped in a range, the world is awaiting the Deal. Obama has loaded his gun, but the question is if Boehner will prevent somebody from getting shot? By Bill Wilson.

With White House talks ended over Obama’s insistence on job-killing tax increases, it is time for House Speaker John Boehner to turn up the pressure for spending cuts on the Senate.

On July 22, just minutes after defeating the House-passed “Cut, Cap, and Balance” plan to trim the deficit by $5.8 trillion over the next ten years and balance the budget by amending the Constitution, Senate Majority Leader Harry Reid took to the floor to proclaim that his work was done.

Calling the legislation “dead,” Reid then made headlines by also taking his and Senate Minority Leader Mitch McConnell’s proposal off the table for Senate action that would have let Barack Obama raise the debt ceiling without any spending cuts of substance included. He also made no mention of the so-called “Gang of Six” proposal.

Instead, Reid alluded to ongoing negotiations between House Speaker John Boehner and the Obama White House. He said, “The product on which they are working would address, as I understand, both taxes and spending. And under the Constitution, the House of Representatives must originate all revenue measures.”

Reid continued, “Therefore, the path to avert default now runs first through the House of Representatives.”

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The attack in Norway has prompted a debate in Europe over whether the recent electoral success of far-right parties has had any causal linkages to the attack of extremism on full display in Oslo.

Recent success of far-right parties across Europe has actually a lot to do with the fact that the extremist far right has cleaned up and become part of the mainstream. One of the main avenues of electoral success has been the idea that the far right, especially in Nordic and northern Europe — so countries such as Sweden, Finland, Denmark, the Netherlands — that the far right in these countries is actually the last bastion of liberalism and protector of European-styled tolerance. The idea being that the reason these parties are anti-immigrant is because immigrants coming to Europe, specifically Muslims, are intolerant and that they therefore cannot be part of a tolerant, liberal society. This has played very well with voters in northern Europe.

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Financial Engineering is great. You can simply get anything to look good. Just like Greece miraculously swapped interest payments into the future, the famous US bail outs have some noteworthy fine prints you should read. Swapping from the left to the right pocket doesn’t make you more rich. Daniel Gross reports,

Most of the big banks have repaid the government funds they received under the Capital Purchase Program (CPP), the pillar of TARP under which Treasury bought preferred shares in the nation’s banks. Enough so that, combined with dividends and sales of warrants, Treasury has declared that taxpayers have earned a profit on the CPP. Thus far, $245 billion has gone out, and $255 billion in repayments, interest and warrants has come back, yielding a profit to taxpayers of $10 billion. And there’s several billion more where that came from.

But sometimes there’s less than meets the eye. Generally, banks that repaid CPP funds did so with cash raised from earnings, or by raising new outside capital. In finance and banking you always have to read the fine print. And if you go back to the report, you’ll notice that the fine print accompanying the entries for each of the above exits makes reference either to Footnote 49 or Footnote 50. Footnote 49 reads: “Repayment pursuant to Title VII, Section 7001(g) of the American Recovery and Reinvestment Act of 2009 using proceeds received in connection with the institution’s participation in the Small Business Lending Fund.” Footnote 50 reads: “Repayment pursuant to Title VII, Section 7001(g) of the American Recovery and Reinvestment Act of 2009 — part of the repayment amount obtained from proceeds received in connection with the institution’s participation in the Small Business Lending Fund.”

All of which is to say that these banks repaid cash owed to a program run by the Treasury Department by. . . borrowing from another program run by the Treasury Department.

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Small reminder on some of the points making the deadlock.

The “No tax” hike camp has got it wrong. The top Elite is not creating the jobs. The ordinary jobs are created by the small company USA. With unemployment of more than 9%, and 70% of GDP made up of spending, we clearly see who should be taxed.

The US companies are effectively shifting their companies abroad, while receiving the stimulus by Uncle Sam. With this trend having increased over the years, where will taxes come from?

Further reading, US Deadlock.

Relevant news continue below,

Ft.com
UK shareholders have received their largest dividend pay-outs since the collapse of Lehman Brothers almost three years ago, in a sign that companies are increasingly confident about the health of their balance sheetshttp://ftalphaville.ft.com/thecut/2011/07/25/632461/commodities-boom-fuels-uk-dividends/

Vince Cable has urged the Bank of England to consider another dose of quantitative easing to tackle “a serious problem of weak demand”, the FT reports, in a sign of growing ministerial alarm about the state of the economy. The business secretary’s highly unusual venture into monetary policy caused surprise at the Treasury and will irritate the Bank http://ftalphaville.ft.com/thecut/2011/07/25/632441/cable-appeals-for-new-dose-of-easing/

Only two formal bids have been made for over 600 Lloyds Banking Group branches, Reuters says, citing a Sunday Times report. The bidders were NBNK and Co-Operative Financial Services. Virgin Money, the financial services arm of entrepreneur Richard Branson’s Virgin Group http://ftalphaville.ft.com/thecut/2011/07/25/632391/few-bids-reported-for-lloyds-branches/

Several European banks with large exposures to Greek sovereign debt have yet to sign up to a plan for private-sector bondholders to contribute €37bn to a second Greek rescue package, the FT says. The UK’s Royal Bank of Scotland, http://ftalphaville.ft.com/thecut/2011/07/25/632371/major-banks-hesitant-on-greek-package

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With the European Economies falling off the cliff, the contagion effect is spreading to all nations. Merkel is feeling the heat, as the bail out(s) ultimately will be pad by the Germans.

The Telegraph reports;

German Chancellor Angela Merkel is facing a storm of protest at home after yielding to EU calls for radical action to shore up Spain and Italy, raising doubts over her ability to implement the package.