Xtranormal Explains The European Non-Bailout Best - With A Cartoon (from Zerohedge)

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Stratfor's Decision Tree On Greece - From John Mauldin's Newsletter

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Ask Captain Scott

Incredibly cool website: Ask Captain Scott http://askcaptainscott.com/

Scott is a commercial airline pilot and the website takes you into the cockpit of real planes.

 

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Interest Rates:10 Year Treasuries Plunging

Interest rate are dropping big time the last three days.

There are three obvious reasons:

1) Very weak GDP report last Friday, with an especially weak revision. For Q2-2011, GDP grew at an annual rate of 1.3%, and Q1-2011 GDP was revised down to 0.4% GDP growth. Link

2) A weaker ISM Manufacturing report on Monday. "The PMI registered a 50.9%, a decrease of 4.4 percentage points..." link ; followed by a tepid ISM non-manufacturing report today, link

3) Italy taking center stage in the ECB/EU slow motion trainwreck, with Prime Minister Berlusconi poised to put gasoline on the fire later today in a nationwide speech. link

There is a major forth item that is looming in the background: some form of QE3. If history is any guide and we see additional Quantitative Easing, we will see interest rates move higher.

The interest rate conditions right now look very attractive to lock in interest rates at these levels.

Current Interest Rates

Gold / Debt Limit Chart

Interesting chart correlating the price of gold with the raising of the debt limit ceiling.

Source: zerohedge

1995-1996 Govt Shutdown Impact on Interest Rates

Interestingly enough, interest rates declined during the 1995-1996 government shutdown. And, coincidentally or not, interest rates are declining now.

1995-96 Government Shutdown
SUMMARY:

From November 14 through November 19, 1995 and from December 16, 1995 to January 6, 1996 the U.S. government was shut down as a result of a budgetary impasse between Congress and the White House. The shutdown was precipitated by a dispute between Democratic President Bill Clinton and Republican Speaker of the House Newt Gingrich over domestic spending cuts in the fiscal year 1996 budget and resulted in a bipartisan agreement to balance the budget in seven years' time.

http://bancroft.berkeley.edu/ROHO/projects/debt/governmentshutdown.html

1995-1996: 10 Yr Treasury Note Rate
Crisis Began November 14, 1995: 5.97%
Crisis End January 6, 1996: 5.69%

Federal Debt Rollover in August: $467 Billion

Comments: August is going to be a very tumultuous month.

First, we have the debt ceiling issue to contend with. It's been estimated that X-Day (the date after which Treasury will not havesufficient cash to pay ALL of its bills) is going to be sometime between August 2 and August 9.

Next, if and when we get over the X-Day hurdle, there is the matter of $467 Billion of Treasury debt that will need to get financed in August. $467 Billion in one month, that is simply a staggering figure.

Interesting that interest rates spiked higher last week, just after this report was released privately.

Originally posted at Zerohedge: link

Debt Ceiling Analysis