Today's Headlines

Bloomberg:

• IMF Calls on Euro Authorities to Stand Behind Deposit Insurance. The International Monetary Fund called on the European Central Bank and euro-area authorities to stand behind deposit insurance within the currency area to help a common backstop take effect and forestall bank runs. European leaders should make banking union their immediate priority in the efforts to fight the debt crisis, the IMF said in staff reports today related to its annual review of the euro area. The Washington-based lender called for a rapid announcement of a timetable toward common deposit insurance, initially supported by the ECB or some other joint resource until it could eventually be funded by the banks. Existing bank backstops are nationally based and don’t go far enough to reassure customers that their money is safe, the IMF staff said. Cross-border deposit insurance, preferably accompanied by a centralized bank resolution agency, would keep weaker nations from running up against insolvency if their largest lenders run into difficulties.
• Merkel Adviser Calls Political Union Unrealistic, FAZ Says. A political union in Europe that allows for the joint issue of bonds is unrealistic, Claudia Buch, a member of Chancellor Angela Merkel’s council of economic advisers, told Frankfurter Allgemeine Zeitung. “Euro bonds in the framework of a political union, with joint control and a surrendering of fiscal powers, would be theoretically an alternative in the long term,” Buch told the newspaper. “But this way seems politically unrealistic.” Buch, an economist at the University of Tuebingen who replaced Beatrice Weder di Mauro on the panel earlier this year, promoted the debt-redemption fund as an alternative to European Central Bank monetization of sovereign debt, FAZ said.
• Credit Suisse Plans $15.6 Billion Capital Increase. Credit Suisse Group AG (CSGN) Chief Executive Officer Brady Dougan succumbed to pressure from the central bank and senior executives within his firm to increase capital by 15.3 billion francs ($15.6 billion). The lender will also cut an additional 1 billion francs in costs by the end of 2013, the Zurich-based bank said in a statement today. Second-quarter net income rose 2.6 percent to 788 million francs from a year earlier, the company said. Credit Suisse shares rose as much as 6.8 percent.
• Ibrahimovic’s Paris Saint-Germain Salary to Trigger 75% Tax. “These sums are astronomic and unreasonable,” Fourneyron told journalists after a meeting of the French cabinet in Paris. “They’re among the things that we can deplore today in football, the complete lack of regulation.”
• Corn Seen Rallying to Record $8.50 as Drought Kills Crops. Corn may rally to a record $8.50 a bushel as the worst U.S. drought in decades cuts production in the world’s biggest exporter, driving global stockpiles lower, according to broker Newedge USA LLC.
• BofA(BAC) to Cut Another $3 Billion in Expenses. Bank of America Corp., the second- biggest U.S. lender, plans to trim $3 billion in annual expenses from investment banking, trading and wealth-management units. The cuts, which are expected to be completed by the middle of 2015, represent 11 percent of expenses in the targeted areas, the Charlotte, North Carolina-based bank said today in a presentation on its website. The initiatives have already begun, the lender said, without specifying the number of job cuts, which are part of a larger effort to reduce costs by $8 billion.
• Bernanke Says Fed Will 'Take Away The Punch Bowl' When Needed. Federal Reserve Chairman Ben S. Bernanke said U.S. central bankers are capable of removing record stimulus from the financial system and raising interest rates when needed to avoid triggering inflation. “It will be a similar pattern to what we’ve seen in previous episodes where the Fed cut rates, provided support for the recovery, and when the recovery reached a point of takeoff where it could support itself on its own, then the Fed pulled back, took away the punch bowl,” Bernanke told the House Financial Service Committee today in Washington as part of his semi-annual testimony to Congress.
• Home Starts in U.S. Rise to Highest Level Since 2008: Economy. Housing starts rose 6.9 percent to a 760,000 annual pace after a revised 711,000 rate in May that was faster than initially estimated, the Commerce Department reported today in Washington. The median forecast of 79 economists surveyed by Bloomberg News called for a 745,000 rate.
• Temporary Work Demand Rises as Companies Avoid Commitments: Jobs. Create-A-Pack is among a growing number of businesses turning to staffing companies for temporary workers, reflecting employer concern about the U.S. economic outlook. The number of people on the payrolls of temp-staffing businesses grew 10.7 percent in June to 2.5 million from a year earlier, the biggest increase since May 2011, based on data from the Labor Department. Demand for temporary employees is gaining momentum as companies seek more flexible staffing arrangements, according to Tobey Sommer, director of equity research in Nashville at SunTrust Robinson Humphrey Inc. This has helped create a shift within the labor force, as a “not-easily-forgotten recession” has made many executives cautious about hiring, he said.

Wall Street Journal:

• India’s Economic Data Losing Credibility. Can India’s economic data be trusted? Economists and investors say they are finding it increasingly hard. “Market participants are not able to decide what to make of this data,” said Brinda Jagirdar, economist at the State Bank of India. Frequent and sharp revisions in inflation and factory output data—key determinants of monetary policy—have confounded experts in recent months.
• Staples vs. Solyndra. Mitt Romney needs to make a better argument for Bain capitalism.
  

MarketWatch:

• Palo Alto Networks raises IPO price range.

CNBC.com:

• Greek Leaders Push Back Decision on Austerity Cuts.
• Are Spain’s Banks, Bailouts and Bonds Breaking Europe? Opposition to Spain’s bailout from Holland and Finland, continued German resistance to Eurobonds, the possibilities of fiscal union out of sight and arguments growing over who owns Spain’s debt are a signal that the recent EU summit has resolved nothing, senior economists told CNBC.
• Forcing the Rich to Bail Out Europe. To many in Europe, the Continent has two big economic problems: Huge debt, and high inequality between the rich and the rest. Now some politicians are advocating a plan to solve both.

Business Insider:

• Insurgents Blow Up 22 NATO Trucks On A Crucial Land Route Into Afghanistan.
• FED SAYS MANUFACTURING AND RETAIL SPENDING SUFFERED LAST MONTH.
• The Credit Profile Of Every US State [Infographic].
• EL-ERIAN: The Risk Of Collateral Damage And Unintended Consequences Caused By The Fed Is Material And Growing.
• China's Biggest Companies Warn Of Profit Plunges Up To 80%.

Zero Hedge:

• Revenues And Earnings: Another "Decoupling".
• City Of Compton Next On The Muni Bankruptcy Deck.
• 2 Buses With 40 Israeli Tourists Blow Up At Bulgarian Airport.
• Netanyahu Accuses Iran Of Being Behind Bulgarian Bus Explosion, Promises "Strong Response".
• Santelli Slams "It's Not My Job" Bernanke And Screams "Enough Is Enough".

Reuters:

• Syrian army helicopters bombard districts in Damascus. Syrian army helicopters fired machineguns and in some cases rockets at several residential districts of Damascus as President Bashar al-Assad's forces fought rebels across the capital on Wednesday, residents and activists said.
• World Bank chief warns no region immune to European crisis. World Bank President Jim Yong Kim on Wednesday warned that most regions of the world will be hurt by the debt crisis enveloping the euro zone and said it was vital to protect the strong economic gains of the past decade in the developing world.
• U.S. money fund lending to euro zone fell faster in June. U.S. money market funds pulled money out of the euro zone at a faster pace in June as concerns about the region's debt crisis accelerated, with banks that contribute to the scandal plagued Libor rate in the region among the hardest hit, Credit Suisse said in a report.

Financial Times:

• Prepare for an Even Bigger U-Turn From Ms. Merkel. With Mr Hollande, the risk of France herself becoming a bailout candidate is rapidly growing. While Germany has extended the retirement age to 67, Mr Hollande has started reducing it from 62 to 60. Though France’s youth unemployment rate is four times higher than Germany’s, Mr Hollande has raised the minimum wage to a record level. Last year, the French budget deficit ratio was more than three times as high as Germany’s. There is to be no austerity programme to speak of in France. More and more Germans are discovering that Europe may speak German, but that it acts French. Since Ms Merkel’s U-turn in agreeing to a special bailout arrangement for Spanish banks, the mood in her country has changed. Two hundred economists protested in an open letter to German citizens. Even the German constitutional court believes that enough is enough. In an unprecedented move, the judges publicly asked Germany’s president to withhold his signature under the ESM. Should the court rule that further shifts of power to Brussels are subject to a referendum or should Finland opt to leave the euro, Ms Merkel might face her second “Fukushima”. Remember that after the tsunami hit Japan, it took Ms Merkel just a few days to abandon her energy policy and announce a departure from nuclear energy altogether. When opinion polls showed support for nuclear energy had plunged, she executed the fastest policy change in recent German history. Despite her usual European rhetoric, she didn’t even consult with the French, although they were severely affected by her unilateral action. If a German referendum on Europe became one on the euro instead, she might face similar pressure. That could result in another spectacular policy U-turn, this time on the euro.

Telegraph:

• Germany’s twin euro-martyrs tell Merkel to put up or break up.
• IMF urges action as eurozone enters 'critical' phase. The eurozone is in “critical” danger and the European Central Bank must do more to drag it from the depths of the crisis, the International Monetary Fund has warned.
• Germany could derail eurozone bailout fund, warns ECB's Joerg Asmussen. A senior European Central Bank official has expressed concern that Germany's top court could derail the eurozone's new bailout fund.

De Telegraaf:

• The Netherlands is studying the possibility of getting a collateral deal with Spain in the bailout of banks following Finland's example, citing a spokesman of the Dutch Finance Ministry.
  

The Prodigal Greek:

• A Tragic Common Fate Looms for Greece, Portugal and Spain.
  

O Globo:

• Brazilian public-servant strikes are the main concern of the government's economic team as meeting workers' demands could put at risk the target to expand above 2% this year.