GOD'S IN HIS HEAVEN

...all's right with the world?   Seems like it.  DOW closed up 215, the ECB is busily buying Greece, Italy, Spain and anybody else that's on offer and Sarkozy and Merkel meet tomorrow with visions of sugar plums dancing in everybody's heads, the groundwork having been laid over the weekend.

I think what has really happened is the the Euros woke up and realized that it was August, what had occured was a bad dream and decided to go back on holiday hoping the two major heads of state could blabber on until September.  It will probably work barring something really stupid like the Greeks saying something like, "We're not going to take it anymore!" which they will at some point but please, not now.  To add to the show The Leader is on a bus trip to press the flesh in the mid-west and call for tax increases for the next three days.  There are three buses involved, each reportedly costing $1 million but who's counting.  Nobody is in D.C. (which may not be a bad thing) despit our continued fiscal mess   and The Swiss are still talking about pegging their currency to the Euro something they have resisted since the beginning of time--or the Euro--which ever came first.   You can't make this stuff up.

The guys really about to take the gas-pipe are the leaders of China who in the word's of My Really Smart Friend, Larry are well and truly stuck in the dollar trap that he has been talking about for over a year now.  Caught up in a fiscal and monetary policy of their own making they have no alternative but to continue to hold dollars and bitch about the United States which isn't a bad thing in itself but more than a bit of sour grapes coming from them.   As long as their economy is totally export driven (because that's what creates jobs and boy, do they need job) the bucks keep piling up.  They would love to diversify but into what.  For better or worse we are the reserve currency and no other capital market is as big or deep.  So thank you China.  Maybe you should hire My Really Smart Friend, Larry, although I'm not sure he has a solution...at least not one they would accept. Then again, the situation continues to provide me with considerable unease because I'm a firm believer that if you owe a bank a million dollars,  you are in trouble but if you owe a billion...well, you know how that comes out.  Hey, rather than Larry, maybe they should hire Donald Trump!  He's lived his life with that thought in mind and has done verywell, thank you.

Sarkpzy v. Merkel, round two.  We'll be watching