Tuesday, September 6, 2011


Well, we're back.  I think we should have stayed away.  If anything, the world looks worse than when we left it.  The good news is the resolution of the Euro situation could be closer than most people realize what with a very important legal ruling in Germany tomorrow which might put all plans on stop or permanent hold.  Frau Merkel's party lost the by-elections over the week-end which places her in a very scary place and while she remains steadfast in her committment to Europe (read, bailouts for Greece, Italy, etc with German money), if the German courts decide that the Euro-bailouts are illegal or that they must be approved in every single instance of German participation, Frau Merkel's heart may still be with Europe but her head might be bearing a sign of relief as this gets her off the hook.  What that would mean for Euroland is anybody's guess.

Meanwhile, the talk of "The United States of Europe" is all the rage among the conoscenti who live in Georgetown and on West End Avenue.  The argument seems to be that the union of European states centered about a common currency and a common monetary policy was flawed to begin with and therefore, let's just fix it with agreement on a common fiscal policy because that's the right, intelligent and the thing that makes the most sense sense to do.  After all, didn't we do that and the Euro are sooooo much more intelligent than we.  The NY Times was literally dripping with that advice over the weekend and into today.

I keep trying to remind these guys that across the pond we have a bunch who have been trying to kill each other for 1000 years but nobody listens.  The Italians may be approaching Parliament with their reforms and the Greeks may have a list of items to be privatized but it is more probable that all will come to naught.  It is the nature of the beast.   Mme. Largrande, now of the IMF warned last week that Euro banks are dangerously under-capitalized, having not been asked what the hell did she do to fix this condition in her previous job (answer, nothing), and bank shares went right into the toilet on both sides of the Atlantic.  Over night, she was told to first re-think the issue and then shut up which she did and the shares stabilized...at a far lower level, mind you.  Nothing really seems to change.  The Euro tanked, our 2-year was yielding under 2% this morning, The Leader keeps saying the same thing with a different modifier, and the Fed is engaging in some off-the-air re-run of Family Feud.
Then again, college football began with lightning and thunder across the Fly-Over Zone and the NFL kicks off this week.

Good to be back.

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