CHANGE OF PLANS

I know I promised to return to Regulation but today's international stuff was just too good.

Joey Ackermann, the CEO of Deutschebank really dropped one on the markets today.  Speaking from a secret hideaway somewhere in Frankfurt he revealed some of his deepest, darkest thoughts regarding Greece.   You might remember that it is estimated that the German banking system has some 25-30 billion Euros in exposure although one must take notice that there are substantial assets of Greek banks' German branches in that figure.  Nevertheless, the number is bigger than a breadbox and a Greek bail-out wouldn't be a bad thing for Mrs Ackermann's little boy Joey.  And he seems to have received it.


Did Joey go away and stay silent?  Nah.  For some reason he felt it his duty (Germans are big on duty) to express the view that to pile more debt on top of what was already there in Greece's case may not really solve the problem because Greece's economy was simply not big enough to grow its way out of the burden that has been placed upon the poor country.  Joey, Joey, Joey: the elucidation of the obvious has never done anybody any good.  When you get a freeby, just take it and shut up.  The markets, acting as though this was a revelation from the Gods, once again destroyed the Euro inasmuch as there was nothing else left to destroy as the entire European sovereign debt bond market has been sterilized by this piece of political stupidity.  The Yen went through the roof as did the buck and things at this stage are so far out of joint that no one really knows what the future might bring.  Amazingly, the U.S. stock market geniuses seem to have gotten the vibe that something bad might be afoot and have reacted accordingly.  Somehow I just don't think anybody is into this weekend with a substantial position on either side, but I've been wrong before.  That's why I'm poor.

The Leader, of course, remains above the fray sending out Krugman in the Times to assure America that we are not Greece.  Most of us have figured that out but for sheer wanton political stupidity, all should read Krugman today.  You can now get a slug of Gold in a cash machine in the Gulf, there is more invested in Gold ETFs than exists in the commodity at 2x the current price and Congress still believes that trading basis swaps on an exchange will ensure safety in the future.  As I have said before, I should have retired to Bedlam.

More tomorrow.