We're back and I wonder why. The grandkids were great, I sat through an original middle school play and survived (I thought I would never have to do that again) we have a glorious spring-like day and now I have to comment on the latest monstrous piece of political stupidity put forth by Chris the Crook which, if enacted, will pretty much end the finance business. I never though one could root for Barney Frank but these are strange times.
I hate to say it but I think I hit this one right on the head announcing some weeks back that what Chris the Crook would produce is a populist pill of rubbish as his parting shot to the American people. It is worse. In addition to being unworkable and foolish in conception it completely politicizes the regulatory process by requiring that the president of the New York Fed, the body which has prime responsibility for the really heavy lifting, be a political appointment of the President. Any semblance of international cooperation will be lost as it is New York that has the prime responsibility of dealing internationally and no independent central bank will have any desire to deal with a political hack in the first instance except on a very well-defined basis. Then too, it would appear that the government would be involved in every aspect of oversight and regulation with political appointees serving in tandem with the Federal reserve at every level which is a guarantee of failure in all roles undertaken. Some much seems wrong with this thing that it's difficult to be fully expressive unless all 2000 pages are reviewed, but one should keep in mind that which is not covered, to wit, Fanny and Fredie. Remember dear reader, these two swill dispensers hold over 5 TRILLION at risk with estimates of impaired assets standing around 20%. That's 1 TRILLION in potential losses to the taxpayers. And nary a mention: whatuowiththat, Chris? So far, it is madness but not enough is known to comment further. I'm trying to plow through this thing so I'll have more to say in the coming days.
Moving right along, I remain impressed with the Euros and the manner in which they continue to perform this marvelous gavotte which while denying any agreement amongst the member states to bail out Greece the assurance that, if needed, a bailout will be available remains firmly planted in the mind of the financial market. Sounds very French to me. They have always been good at that. There is a BIG chunk of refinancing due in a bit over a month's time but the success of Greece's foray in the Eurobond market two weeks ago has taken the edge off a bit. The stakes are too high for a calamity unless one is caused by a totally unforeseen event, so I remain convinced that one will not occur. If I had any money--which I do not--I would be long the "on the run" Greek Euros with a yield of around 6 1/2% Like the currency as well as what is happening on our side of the pond is hardly cause for optimism what with the very real possibility for a full blown constitutional crisis over this House health care vote looming this week-end. For their part, the Greeks are behaving rather well although for how long remains the real question. Just long enough is, I suspect, the answer.
More tomorrow. It's 60 degrees. Me and the Mutt are going for a walk
How do you regulate children? You need tough rules. Why do we allow our economy to depend upon a handful of wall street firms? This is too risky.
ReplyDelete