Thursday, June 09, 2011 White House considering a temporary cut in payroll taxes in an effort to help spur hiring.

This is one of several ideas being talked about. The idea of cutting the employer contribution to payroll taxes also has recently been under discussion among Republican members of Congress Bloomberg (NYT also says ideas being considered in Washington - Democrats and more liberal economists are suggesting that any long-term deficit reduction be paired with short-term spending increases or tax cuts to spur the economy, should it continue to weaken perhaps by extending for 2012 the payroll tax cuts, business write-offs for equipment and other investments and extended federal unemployment benefits NYT China real estate bubble starting to deflate according to the WSJ; housing prices are heading lower in some major cities; raising the prospect that the Chinese economy may slow more rapidly than anticipated WSJ Banking regulators are split on how large the Sifi charge should wind up being sources say the Fed will prob. endorse a plan to cap the buffer at 3% (so 10% in total including the 7% Basel III standard). The 3% is slightly higher than the US Treasury and some intl policy makers support. Globally, the number is in the 2-2.5% range. WSJ SIFI = Systemically Important Financial Institution (aka Too Big to Fail) S Liesman update on CNBC Bernanke has options left I can tell you Bernanke thinks he has more bullets. Trouble he has is that talking about these bullets will raise expectations that hell use them. However, there are scenarios whereby Bernanke would step in with further accommodation. I have little doubt, despite the inevitable political blowback, that the Fed would do more if a consensus developed on the board that a Japanese outcome was likely. Bernanke has been clear about that CNBC Solar power - FT says solar power within three yrs will be price competitive w/traditional energy sources. Cost of solar in California is near that of gas-fired plants during peak demand periods. FT Debt ceiling poll in Washington Post - A Washington Post-ABC News poll shows that 55 percent of Democrats and half of Republicans and independents support a debt-limit deal that includes a steep reduction in the size of government. But 37 percent of Republicans, a third of independents and nearly a fifth of Democrats say they are against raising the debt limit, under any circumstances. Washington Post Feds Bullard says debt ceiling risk is biggest overhang for global economy. "The U.S. fiscal situation, if not handled correctly, could turn into a global macro shock," Bullard said in an interview on Wednesday. "The idea that the U.S. could threaten to default is a dangerous one." Reuters Jim Rogers neg. comments on CNBC says the next financial crisis will be even worse than the present one. Officials are running out of tools to stimulate the economy CNBC The OPEC meeting in Vienna appears to have ended in disarray, with the producer group stifled from reaching consensus on an output increase. Saudi Arabia has already indicated that it will supply the market with whatever it needs. But it is still a stretch for Saudi Arabia alone to be able to lift output by the 1.9 mbd needed to fully supply the 30.87 mbd that the OPEC secretariat estimated in its May report would be needed to meet demand in 3Q2011. We retain our view that oil prices will reach $130/bbl in 2011, but arguably we now not only have to watch Saudi Arabian comments closely, but also those of the International Energy Agency. JPM