Week of June 19, 2011 thru June 25, 2011

US's Geithner: 'No Alternative' To Budget Agreement By Aug 2

By Ian McKendry

WASHINGTON (MNI) - U.S. Treasury Secretary Timothy Geithner Friday
said there is "no alternative to a deal" on raising the debt ceiling
before the August 2 deadline, adding that the U.S. needs to bring the
federal deficit down to around 3% of GDP and keep it there.

The U.S. needs to address its deficit problems and can no longer
defer its fiscal responsibility, he told students at Dartmouth

Geithner said while he anticipates the political wrangling in
Washington over the U.S. budget to continue -- the leadership in

FXWRAP: Dollar Notches Gains On Pre-Weekend Risk-Aversion

By Dennis Pettit

NEW YORK, June 24 (MNI) - The dollar was able to score moderate
gains vs. the euro and the yen in thin trading conditions Friday, the
greenback lifted by a bout of risk aversion heading into the weekend.

Euro-dollar was changing hands at $1.4175 in afternoon dealings
Friday, the euro in the lower reaches of the day's $1.4140/1.4247 U.S.
hours range after beginning the day around $1.4223.

Dollar-yen meantime was trading at Y80.45 in afternoon dealings,
the dollar slightly above its early Y80.21 level and in the upper

FDIC's Bair Q&A: Greek Debt Crisis Solvable If Political Will

By Yali N'Diaye

WASHINGTON (MNI) - The Greek debt problems are "solvable" provided
there is the political will to make the tough decisions, U.S. Federal
Deposit Insurance Corporation Chair Sheila Bair said Friday.

For investors that would also mean having to accept taking a loss.

"Perhaps the Greek debt needs to be restructured," Bair said during
a question and answer session following a speech at the National Press

She noted that if investors hold that debt, then maybe they just
need to understand they "are going to have to take some losses."

Analysts: HIA2 Corp Tax Holiday Needed Stimulus; Dlr Positive

By Vicki Schmelzer

NEW YORK, June 22 (MNI) - With U.S. budget negotiations coming to a
standstill this week, amidst a lack of bipartisan support for a credible
fiscal plan, a new tax holiday for U.S. multi-national corporations is
being put forward as a possible source of stimulus for the economy that
both political parties could endorse.

If indeed a new version of the Homeland Investment Act of 2004
eventually is passed, the dollar could be underpinned by a variety of
factors, analysts said.

As a reminder, the Homeland Investment Act of 2004, part of the

US FDIC's Bair:'Regret' Congress carved Out Exemption For QRM

--US Banks have Plenty Of Capacity To Lend
--Banks Don't Lend Due To Risk Aversion, Lower Borrower Demand

By Yali N'Diaye

WASHINGTON (MNI) - In her last major speech as the chairman of the
Federal Deposit Insurance Corporation, Sheila Bair Friday expressed
"regret" about the exemption that was included in the risk retention
rule for a category of mortgages given the controversy it has triggered.

To ensure that issuers of a mortgage-backed security keep an
interest in the long-term performance of the underlying loan, the

US Budget Recap: Obama, Biden To Begin New Budget Talks Monday

--Obama and Biden To Meet Separately With Sens. Reid, McConnell Monday
--House Speaker Boehner Says Debt Bill W/Tax Hikes Would Fail In House
--Biden Says 'Next Phase' of Budget Talks Shift To Obama, Hill Leaders
--Senate Budget Panel Chairman Explores 'Another Way' on Budget

By John Shaw

WASHINGTON (MNI) - After the only two Republican members of his
budget negotiations decided to drop out of the talks Thursday, Vice
President Joe Biden handed the high-stakes negotiations over to
President Obama, House Speaker John Boehner and Senate Majority Leader

Fed Text: Release Of June 21-22 FOMC Mins Moved To July 12

WASHINGTON (MNI) - The following is a statement by the Federal
Reserve Friday:

The minutes of the Federal Open Market Committee (FOMC) meeting of
June 21-22, 2011, will be released at 2 p.m. EDT on Tuesday, July 12,
2011, a day earlier than usual. The release date was rescheduled in
light of the timing of the House Financial Services Committee hearing on
July 13 to receive the Federal Reserve Board's Monetary Policy Report to
the Congress.

The minutes of each regularly scheduled meeting of the FOMC are

US Tsy's Goldstein: Admin Won't Act Hastily On Hsg Fin Reform

By Ian McKendry

WASHINGTON (MNI) - The Obama Administration is in no hurry to
reform housing finance as long as the economy and the housing market
remain on unsteady ground a U.S. Treasury official said Friday.

"Unnecessary haste could prove counterproductive," U.S. Treasury
Under Secretary Jeffrey Goldstein said in prepared remarks at a housing

Goldstein said the administration will move forward with housing
finance "at a pace commensurate with the economy and the housing
market's recovery."

Analysts Slam IEA Oil Release As 'Risky'; Short-Term Fix

--API Economist: Obama Admin Action 'Purely Political'
--Deutsche Bank: IEA Stock Draw 'A Short-Term Fix'

By Brai Odion-Esene

WASHINGTON (MNI) - Analysts describe the decision by the world's
major oil consumers to release 60 million barrels of oil into market as
"risky," and say it is just a short-term solution for a market that is
likely to remain tight going forward.

"You are just postponing the day of reckoning in the marketplace,"
Rayola Dougher, a senior economic adviser at the American Petroleum
Institute, told Market News International Friday.

Next Wk/US: June ISM Manufacturing Report To Be Wk's Highlight

By Theresa Sheehan

PRINCETON (SMRA) - The week ahead will see the end of the second
quarter 2011, and although there may be some upside surprises, on
balance the second quarter will probably be most notable for slower
activity in housing and softness in the labor market, while prices
showed signs of holding at more elevated levels.

The week leads up to the three-day holiday weekend for Independence
Day the following Monday. There is no early close to the bond market
Friday. However, offices will likely empty out as soon as the morning's
data is out of the way.