Friday, September 9, 2011


The DOW closed down 303 points.  It had been far lower during most of the day driven lower right at the open by the news of the resignation of the ECB's chief economist, Juergen Stark.  For me, this is madness believing as I do that the news of one less economist practicing his trade anywhere in the world should be met with jubilation not terror.  Not so these days.  I guess Mr. Stark was doing, as My Really Smart Friend Larry, said what any sane man would do given his position struck a nerve.  Immediately, the resignation was interpreted as meaning that there would be a "hard" default of Greece possibly as early as this weekend.  DUH!  Like a "soft" default--which as I have said is like being just a little bit pregnant--is just fine.  The fear was hightened by the then-reminder that the G-7 was meeting in Basel this weekend to decide I suppose how The World As We Know It will end.  To repeat myself once more, "If it be not now yet it will come." Wait a minute, did I say that?  Oh well, whatever.  There is a pretty good chance, however, that something serious will come out of this meeting other than the usual bumf because everyone is running out of time.  I understand that the U.S. is still trying to talk some sense into the Euros and with the newly discovered (or revealed) information that few if any of the Eurobanks have prepared themselves for what everyone knew except for them what was coming accounting and provisioning-wise, perhaps they will listen to reason.  Kudos to the Financial Times by the way for breaking the story alluded to on these pages some months ago.  By Monday we should know the content in the latest chapter in this tale of woe.  Stay tuned.

Oh yeah, one final international comment for the week.  Once again, will CNBC please remove Jim Kramer from from the slot once occupied by the late and much mourned Mark Haines.  Kramer may be a good stock picker but when it comes to anything international he is a complete moron.  At a time when mis-information and lack of knowledge is worse than no information at all, he is a menace.  Simon Hobbs, Red Brick though he may be, deserves more time at this time.

Well, I would have lost a bob.  The Leader gave a heck of a good speech last night.  He said nothing but the delivery was terrific.  Ok, that's not fair.  There were some pretty good points but little by way of detail.  Mother pie and applehood is hardly what is needed.  Let me comment on one area.

I like the idea of a Infrastructure Bank, I really do.  There is no doubt in my mind, properly structured,  the idea would obtain enthsiastic and substantial financial support in the private sector.  Unfortunately, that is not what The Leader and his handlers have in mind.  I am told on good authority that the Bank is to be a politically orientated organization with private funding but no private governance.  The CEO is to be a political appointee (a prominant member of the administration is lobbying hard)  and the directors, members of Congress.  Already, early supportors are stepping aside.  Early in his speech The Leader spoke of removing earmarks from the Congress; one can see why.  Structured as above, the Infrastructure Bank would quickly become the biggest earmark in history; a tax-payer supported slush fund doing the bidding of politicians of both parties but particulalry that of whatever adninistration exists at the time.  It would be an abomination.  It should never be born to this parentage.  Let me know what you think.

Next week Greece and the amazing law suits surrounding the banks and Fanny and Fred.  Have a great weekend.

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