THEY'RE GOOOOOONE!

Grandchildren are wonderful and especially so when their parents take them home. No, not really, but one does forget what having little ones racing around in four different directions is like. Some wag said grandchildren keep you young; they don't. They make you tired but they are wonderful

Well, The Leader is off in Moscow and things appear to be quiet on the home front. Poor Michael Jackson is still dead, the Forth appeared to be somewhat subdued around the country and there appears to be a new malaise settling in about the state of the economy to the point that even Joe Biden believes that he and The Leader may have misjudged how bad things really were. He didn't say "misled" yet but that will surely come. Yield on the 10 year slipped to 3.52% today which is surely a statement as to the fear of continued and prolonged economic weakness but there continues to be concern expressed by Group of 8 members as to the state of the dollar both as a reserve currency and its stability. I continue to feel that something very bad is coming out of this by the end of the year. We shall see.

In the mean time, on the regulation front, silence is golden. There is no doubt that the Administration's unwillingness to face in a robust manner a new regulatory state of affairs has resulted in massive political jockeying between all the principal players and that continues as Congress is consumed with Health Care and Cap and Trade. What we will soon see is half-year earnings from the financials which I suspect will be a bit of a mixed bag but will no doubt fuel the fires a bit more in the coming weeks. I say a mixed bag which may seem like a refutation of all I have been saying over the past three months about this being the best of times for a bank to make money but I believe the tack most institutions will take is one of low profile on the earning front and a buttressing of balance sheets using profitability to increase reserves and capital and being allowed to do so in an unquestioned sense by the regulators and SEC. Wise, inasmuch as stock prices in this environment are probably not going to reflect even the best of results. Again, we shall see. It's starting out as a quiet summer...that may not be a bad thing.