DON'T BLAME ME!

Blame George Bush. Hell, I don't know why the Euros didn't do a deal over the weekend with the Greeks. Because nobody wants to? Could be. As Paul commented, "It's Greece, who cares?" Aside from the bond holders I suspect that there are a few hundred members of the European Parliament in Brussels earning a couple of hundred thousand Euros a year for doing sweet fanny adam care even though in the best of weather Brussels is a God-awful town even when the trains don't run into one another but in the winter it's unlivable. Good Grub, though. Sensational if the truth be known but only if you like butter and cream like me.

I suspect it just hasn't gotten bad enough yet. It will, rest assured. Carter asked, "Who's next?" and to be honest, I hadn't thought about it. I guess the felling over there is let's not have a next one, let's try to end it with the Greeks but to an extent it's sort of like putting the toothpaste back in the tube; the problem has been exposed and a lot depends upon how much international co-operation is present. One thing you might keep a eye on, however, is how this mess over there is affecting things over here. Last Wednesday, we had a perfectly stinking auction of $16billion worth of long bonds Primary dealers were forced to take down almost 50% of the issue. Now I recognize with the economic conditions being what they are all around the world, 30 year bonds should not be expected to be the smell of the week but this auction was bad with a capital B. I keep going back to the point I've been trying to make over and over; this business is ll about trust and perception. It really doesn't make a difference what the reality of, say, Spain's finances might be. If the perception is Spain's finances stink, they stink. In today's world, Greece affects Spain, Spain affects Portugal, Portugal affects God knows who and they all affect us...at some point, even if it means nothing more than paying up for a 30 year issue.

As to this little Euro mis-understanding, there was a tiny miracle today in the New York Times. Paul Krugman actually got it right and wrote something that actually made sense. Seems as though he's cottoned on to the fact that when your fiscal policy originates in Athens but your monetary policy is set about 1000 miles away you may have a problem. He also thinks that political union may not be a bad thing to go along with monetary union but that might be hard to come by. Way to go Paulie, Bay-bee! Some of us had that germ of an idea some 20 years ago but welcome to the party. Wonder way he's saying this now when his guy is in deep do-do? Maybe I'm too suspicious, oh well. Anyway, Carter, my loyal reader, the real answer to your question may not be Spain, Italy, Portugal or any of the usual suspects. The real answer may be the EU itself, as impossible or unreal as that may seem. It's a good story. We'll be watching it this week.