Greece Inching Closer to the Edge, U.S. Economic Confidence Down, and Some More Praise for Ron Paul

Phew, Greece really took a beating in the news category today.  Where to even start?  Some countries are getting awfully antsy and are beginning to question how much it has pledged to the second bailout, via Bloomberg:

European governments weighed withholding half of Greece’s next 12 billion-euro ($17.2 billion) aid payment, seeking to keep the country solvent while maintaining pressure on the government to slash the debt that pitched the euro area into crisis.
Euro-area finance ministers may authorize only a 6 billion- euro loan to tide Greece through bond redemptions in July, while further aid hinges on Greek budget cuts, Belgian Finance Minister Didier Reynders said.
“We will in any case try to release the necessary funds for the short term,” Reynders told reporters before a meeting of euro-area finance ministers in Luxembourg tonight.

There was a rumor of a deal between Germany and the ECB regarding a 2nd Greece bailout, well that rumor isn't coming to fruition anytime soon:

BERLIN — A German compromise plan to resolve a dispute with the European Central Bank over the Greek rescue that was reported by Der Spiegel magazine is no longer on the table, a government source said Sunday.

Der Spiegel had reported ahead of its Monday issue that the German finance ministry called for a beefed-up version of Europe's temporary bailout mechanism lending to Greek banks to insure they have adequate collateral with the ECB.

It would boost the effective lending capacity of the Emergency Financial Stability Facility (EFSF) to 440 billion euros ($629 billion) and see member states double the amount of guarantees they provide the fund.

And Greece's Prime Minister continues to play the game of denial:

ATHENS, Greece (AP) -- Greece is talking with international creditors about a second bailout package "roughly equal" to the first euro110 billion ($157 billion) rescue it accepted a year ago, the prime minister confirmed Sunday.
George Papandreou also blamed Greece's bloated and inefficient state sector for bringing the country to its knees and vowed to effect deep changes with a fall referendum on the constitution that would make it easier to get rid of inept officials or workers.
His proposals were a populist response to widespread popular anger at politicians as austerity measures cut deeply into disposable incomes. Riots erupted on the streets of Athens last week against a new round of spending cuts and tax hikes being demanded by the European Union and the IMF.

Notice how he fails to mention any of the banks that stand to suffer big losses for holding worthless Greece assets.  As the market continues to price in a Greece default, banks too are also being proactive, such as those in the UK:

Senior sources have revealed that leading banks, including Barclays and Standard Chartered, have radically reduced the amount of unsecured lending they are prepared to make available to eurozone banks, raising the prospect of a new credit crunch for the European banking system.

Standard Chartered is understood to have withdrawn tens of billions of pounds from the eurozone inter-bank lending market in recent months and cut its overall exposure by two-thirds in the past few weeks as it has become increasingly worried about the finances of other European banks.

Barclays has also cut its exposure in recent months as senior managers have become increasingly concerned about developments among banks with large exposures to the troubled European countries Greece, Ireland, Spain, Italy and Portugal.

So enough bad news about Greece, let's move to the U.S.:

PRINCETON, NJ -- A sharp deterioration in the jobs outlook and six straight weeks of Wall Street declines sent Americans' confidence in the U.S. economy plunging to an average of -35 during the week ending June 12 -- a decline of nine percentage points from two weeks ago, and six points worse than it was in the same week a year ago. Economic confidence is now approaching a 2011 weekly low.

Recession here we come.
P.S. We never really left to begin with.

Despite winning the Republican Leadership Conference straw poll, having the most applause of any candidate at the New Hampshire debate, and having two money bombs that both earned $1 million, Ron Paul is still struggling to get respect from the mainstream media.  I watched ABC's This Week this morning and the roundtable discussion group talked about the Republican Leadership Conference while failing to mention that Ron Paul won the straw poll.  Instead the focus was on Michelle Bachmann and Rick Perry, two GOP talking point canaries.  Can't say I am surprised, but its always nice to see articles like this from Tim Stanley of the UK Telegraph:

Republican maverick Ron Paul wins a second straw poll and reminds the critics why he matter

Ron Paul reaffirmed his status as a serious contender for his party’s nomination on Saturday by winning the Republican Leadership Conference straw poll. He may not be a serious candidate in the sense that he has a snowball’s chance in hell of winning. But he is superbly well organised and funded, and he dominates the affections of the libertarian wing of his party. Some dismiss Ron Paul as a “perennial candidate”. Yet the reason why he keeps on running – this is his third shot at the presidency – is because his constituency is just as perennial as he is.

So why won’t Paul go away? His followers will tell you that Ron Paul keeps on winning because he is right on the issues. And he has certainly been vindicated on the subjects upon which he has built his reputation – fiscal policy and war. He was right to predict that the 2008 bailout would distribute public money to irresponsible private institutions and prolong the recession. At the time he was a lone voice. But his “throw ‘em to the wall” philosophy is now Tea Party orthodoxy, and the Republican leadership likes to pretend that it said that all along too. The GOP is even coming around to his way of thinking on war. In the New Hampshire Republican debate, several contenders distanced themselves from the decision to intervene in Libya. Mitt Romney, in the real surprise of the night, pledged to withdraw troops as soon as possible from Afghanistan.

Here is the best part:

For all its immediate relevance, Ron Paul’s candidacy remains quirky and idiosyncratic. The blame for that rests with the man himself. What elevates Dr Paul above the other candidates deflates him in the polls. At the podium he speaks without notes on whatever subject seems to come into his head. To see him in person is to experience the apocalyptic magic of wild prophecy. His rambling discourse on the moral and economic bankruptcy of America smacks of something missing in modern politics – the truth told honestly and intelligently by a mad old white guy with nothing to lose. He is so real, he’s unreal. His constituency laps it up. But that constituency – while holding a valid claim to Republican orthodoxy – is too small a base from which to launch a triumph of reason. And an ideologue like Paul could never compromise enough to reach beyond it. For the moment, the man and the movement are locked into a passionate conversation to the exclusion of others.

We will see who is "too small" at the end of the primary season.

Update: These pictures of the riots in Greece are simply unbelievable:

It's amazing how people in Greece appear to be resisting massive government cutbacks but are clashing with government enforcement at the same time.  It's like they are asking for more handouts from the institution that bankrupted them to begin with.  Hopefully the protestors realize that it is the banks overexposed to Greece debt in France, Germany, and the U.S. that are being protected from the potential, but inevitable, default.  I highly recommend you use the link above to check out all the pictures, they are indeed fascinating despite the violence.

And you gotta love this media confusion.  First is Bloomberg:

Europe Fails to Agree on Greek Aid Payout, Pressing Papandreou

Now Reuters:

Euro zone agrees to pursue Greek debt rollover plan

Now you know there is something wrong.  Maybe we will find out tomorrow which one is correct.