BASE METAL

Gold was down almost 100 bucks today. You think the stuff was lead. Oil was down as well and as a consequence the DOW was up 145 points. Go figure. The combination of the drop in commodities and the continued anticipation that Bernanke will announce that the Fed is back in the game on Friday is causing a number of the talking heads to recommend stocks as the place to be. Funny, because if the Fed heads in the direction of QE III, the dollar will surely weaken, commodities will rise and the market will rise as well? As I said, go figure. I don't understand it any more and I thinl I'll stop trying. Anyway, there weren't any after-shocks the weather was beautiful, there was nary a peep from Euroland and everyone was happy. I'm happy. Speaking of Euroland, I gave a ring over there today to see what was going on with Greece. My man on the scene assured me that all was fine. "How can it be," I asked. "They have a big payment this week." "Oh, they made the payment," was the reply. "WHAT!" said I. "Where did they get the money?!" "Charlie, you really don't want to know," was all I got. Well, that sure knocks my time table out the window. I do want to know where the Greeks came up with 7 or 8 billion Euros but I'm not going to find out. No resttructure, no re-lending from what I can discerne, just a flat-out repayment. Remarkable. My bet would be on the ECB but it's just a guess. The important thing is this sends the signal that the Euros are going to kick the can just to find out how long is the road. Or, to put it another way, nobody can go broke as long as there's someone out there stupid enough to lend more money. Don't even know who got repaid. I must admit I feel pretty dumb not to have seen this coming although upon reflection it was probably an even-money bet. So where do we go from here? I guess everyone is waiting on Germany to say 'Ja" to the Eurobond idea incorporating their money and a far more close fiscal union. I still say that's not going to happen but after what I discovered today I must admit to be less certain than yesterday...but not by much. That is the preferred solution in a lot of camps, not because everyone is anxious for Germany to achieve complete dominance over Europe but because the alternative could be really ugly. While all of this was going on, France gave up the fiction and announced a new austerity package to combat a greater fiscal deficit which has come about as a result of greatly reduced GDP estimates for the coming quarter and year. The Leader would love the plan: tax the rich (more) at every level but that's neither here nor there. I just found the timing amusing as for the last month He With the Hottest First Lady in Town has been blabbering on about fiscal unions and balanced budgets while at home he's sloshing around in red ink. Are politicians all the same all around the world? I guess they are. Silly me for asking.