Daily Reading – Monday, July 25, 2011

Macro Man: Looking over the edge

It looked for a nano-second as though we were ending the week with the US heading towards some sort of a workout on the debt ceiling and the European statement of intent enough to correct the market’s near term peripheral vision.

What we hadn’t counted on was just how completely and utterly stupid the Republicans could be and the market has swiftly moved from “they couldn’t” status to “Jeez, they couldn’t, could they????”. TMM still cannot believe that they will let the US go over the edge, but they have stood at the rails at the top of some very high buildings in their time and the view down from this one is even more vertigo-inducing. Staring down this is what TMM see.

FT Alphaville: What’s wrong with Greece bailout II…

… in three easy-to-read paragraphs.

From Jacques Cailloux and his team at RBS.

Bloomberg: Investors Raise Bullish Commodity Bets by Most in Year as Economy Expands

Funds boosted bets on rising commodity prices by the most in almost a year on speculation that the global economic recovery will prove resilient.

Speculators raised their net-long positions in 18 commodities by 16 percent to 1.26 million futures and options contracts in the week ended July 19, government data compiled by Bloomberg show. That’s the biggest gain since early August. Bullish silver holdings climbed to the highest since May 3.

Bloomberg: BP Breakup Worth $100 Billion to JPMorgan as Investors Doubt Dudley’s Plan

Chief Executive Officer Dudley’s efforts to revive BP have been undermined by a failed exploration deal with Russia’s OAO Rosneft and the prospect of billions of dollars of fines from the spill. JPMorgan Cazenove said BP’s assets are worth about about 800 pence a share, equal to a total market value of about $248 billion. The company currently trades at about $147 billion.

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