ALL QUIET ON THE EURO FRONT

Fortunately.  That is not to say things will remain that way.  The day dawned with the almost universal agreement that the Sok/Merk show might not have a long run if any run at all.  The range of comment went from "day-dreaming" to "a cheeky attempt to control Europe for the benefit of France and Germany."  I am more in the first camp believing that they simply do not have a clue.  The Eurobond idea was probably the last one that could avert a default down the road but that has been effectively killed by Frau Merkel's probably correct reading of the mood of the German voter.

There was an element of bemusement in my mind to all of the happenings of yesterday, particularly the call for strict rules conserning budget deficits applying to all of the member countries.  Not surprisingly, perhaps, such rules already exist and have so existed since the Euro became the common currency.  They have been broken a number of times in the past--the first time by Germany when things got tight on the home front a few years back--who at the time simply said to their Euro partners, "Stuff it" or the Teutonic equivalent thereof.  So has France; so has Italy and of course there's Greece.  Let's just say it's hard to be encouraged by such new thinking.

So where do we go from here?  Frankly, I don't think the question is where but when.  My bet is sooner rather than later but a number of my far more intelligent friends tell me we have a bit more time.  My worry is that our guys may not be sufficiently worried as to the effect bad things in Europe can have in the U.S. and are in allignment with our friend, Jaime, who thinks what happens in Europe stays in Europe.  As you know I respectfully disagree, then again can we really prepare?  Maybe The Suit is not on the Magical Bus Trip with his boss because he's drawing up contingency plans back in D.C. Then again, as a good friend pointed out, "They're going through Illinois.  Chicago is in Illinois.  People get thrown under buses in Illinois."   I hope the former view is correct but it does make you wonder.

Stay alert.