CHANGING PLACES

Back in the good old days, when everyone was looking for an aggressive rating agency, Fitch arrived on the international scene, guns blazing.  After the "lost decade" of the eighties, it was Fitch that first upgraded the sovereign debt of a number of Latin countries much to the derision of their more established counterparts, and the game began again.  What a difference 20 years makes.

Just when the rose-colored glasses mob was making all sorts of cooing noises, Fitch downgraded Spain today sending our stock market into a 100+ point dive and wacking the Euro right upside the head.  Right in front of a three day weekend to boot.  One has to admire those guys' sense of humor.

Somewhere along this road folks are going to realize that the Emperor has no clothes and the Emperor is not Spain but the entire Euroland mob of financial leaders and prime ministers who have been not only whistling past the graveyard but doing all within their power to insure that what ails the patient will in fact, kill him.

Greece was seen as a threat to the Euro which needed to be fixed.  Fair enough.  But the cobbling together of a near-E1 billion package for Greece and anybody else that needed a touch of help was immediately recognized by the market as being unintelligent, insufficient and naive in its underlying tenant that Greece could somehow recover from a 50% increase in its national debt as a percentage of its GDP in the three years allotted.  The Greeks to their credit did and said all the right things including threatening to sue Goldman Sachs (what the hell, everybody else is) which is right up there with,"you can't put me in jail, Judge, for murdering my parents...I'm an orphan!  Down went the Euro, down went Portugal and Spain and with a brief respite of some ok bond offerings, enter Fitch, stage right.   I would of course be asking Fitch where the hell were they BEFORE the bonds were sold but that's a tale for another time.

The most comic thing in this entire farce is all the Euros demanding that we must all act like Germans; the bullet, swallow the bitter pill, pull in our belts, etc., etc.  Like that has a snowball's chance in hell of happening.  Might not even happen for the Germans as Fritz has no clue at this stage how big a piece of this cooked-up sausage he has to give up for his southern neighbors.  When the number becomes real, a big resounding "Nein" might echo around Deutschland.  And then, dear reader, what do you think happens to the Euro?  The plan to save the thing may well prove to be its destroyer.