Week of July 17, 2011 thru July 23, 2011

After Meeting W/Obama, Boehner Says Hill To Work On Debt Accord

By John Shaw

WASHINGTON (MNI) - President Obama met Saturday with the four top
congressional leaders in an attempt to end the impass

Obama Hits Boehner For Pulling Out of Talks, Killing $3T Deal

--President Obama: Still 'Confident' Will Pass Debt Hike On Time
--Obama: Boehner Rejected $3 Trillion Deficit Cut Deal
--Obama: Not Sure If the GOP Has 'Capacity' To Make Deficit Agreement
--House Speaker Boehner: Also 'Confident' Will Be Able To Avoid Default
--Rep. Boehner: Obama Increased Revenue Demand From $800B to $1.2T

By John Shaw

WASHINGTON (MNI) - The U.S.'s debt ceiling crisis appeared to
intensify dramatically Friday when House Speaker John Boehner said he
will withdraw from direct budget talks with President Obama, a move

Update:US Sovereign Rating Vulnerable Even If Default Avoided

--Updating With Comments From Moody's Analyst
--'Credible' $4 Tln Deficit Reduction Package Wld Ensure U.S. AAA Rating

By Yali N'Diaye

WASHINGTON (MNI) - U.S. rating agencies, the financial markets,
Congress, and the Obama administration, all agree the implications of a
U.S. default would be widespread across sectors and regions worldwide.

Following a meeting with Treasury Secretary Timothy Geithner
Friday, even former Treasury Secretary Henry Paulson warned of the
"irreparable harm" if the debt ceiling is not raised in a timely manner.

All Eyes on Obama & Boehner During 'Hot Weekend' in Washington

--President Obama, House Speaker Boehner Expected To Talk Over Weekend
--Obama, Boehner Expected To Explore 'Grand' Deal, Back Up Debt Options
--Boehner Tells House Republicans He Wants House Vote Next Wednesday
--Treasury's Geithner To Appear On Two Sunday Talk Shows

By John Shaw

WASHINGTON (MNI) - With temperatures this weekend in Washington
expected to exceed 100 degrees, it seems unlikely that President Obama
and House Speaker John Boehner will be getting together on the golf
course Saturday or Sunday.

But the President and Speaker are expected to be in close touch

US Swaptions: Gamma Off, Vega Steady Awaiting Budget Plan

By William Sokolis

CHICAGO, July 22 (MNI) - Over-the-counter swaption volatility held
steady to lower levels Friday as rates markets bounced on short cover,
risk-on/unwind support and light summer volume.

Portfolios:Institutl History Informs MSR Invstmnts'Quant Views

By Suzanne Cosgrove

Chicago (MNI) - After a long career managing big institutional
derivatives desks, including Lehman Brothers' in the 1980s, Michael
Rulle is running his own shop, weathering the drag of a U.S. debt
impasse with counter-trend stock, fixed-income and energy

Bank of Portugal Chief Says EMU Summit Decision Very Positive

LISBON (MNI) - European Central Bank Governing Council member
Carlos Costa, who is Governor of the Bank of Portugal, said Friday that
the decisions taken at the EMU Summit are very positive and show that
Greece's problems will be overcome.

US CDS: Benchmark Indexes Near Steady, Sovrgns Mostly Tighter

By William Sokolis

CHICAGO, July 22 (MNI) - Little off early morning/week lows,
benchmark indices on U.S. investment grade credit default swaps drifted
near steady to slightly higher levels Friday while sovereign peripherals
narrowed for the most part.

ECB Trichet: Integrity of ECB 'Non-Negotiable': Press

FRANKFURT (MNI) - The integrity of the European Central Bank is key
and protecting it is "non-negotiable," ECB President Jean-Claude Trichet
told the Sueddeutsche Zeitung.

In an interview with the paper to be published on Saturday but
pre-released early Friday evening, Trichet said that governments have
followed the central bank's

Obama: Warns of Risk of New Recession Without Debt Limit Hike

--Both Parties Have Responsibility to Resolve Debt, Deficit Issues
--Tsy's Geithner, Fed's Bernanke, Dudley Discussed Options if No Hike

By Heather Scott

WASHINGTON (MNI) - President Barack Obama warned again Friday that
failure to raise the debt limit could start a cascade of events,
starting with higher interest rates, that could send the economy
plunging back into a recession.

Obama opened a town hall meeting at the University of Maryland in
College Park by again stressing the need to raise the debt limit, saying