IT'S GREAT TO HAVE COMMITTED READERS!

That means you can take the day off because in his comments to yesterday's effort, Carter covered everything about which I was going to write. But I guess I have to clear up a few things and set the old boy straight on a couple of issues. Carter, on the Swiss swap facility I think you must be listening to Jim Kramer a bit too much (who, by the by, was no where to be seen on CNBC this morning to the relief of all). As to the why of the Swiss swap facility, in these times, why not? Costs zip and nice to have hanging about. But think about this: Switzerland is a little, bitty country with GREAT BIG BANKS. As a matter of fact even with the incrediably shrinking UBS, the assets of the banks are ten times the GDP of the entire country...and for the most part they are in dollars. So isn't it a good idea to have a bit of a fall-back give this fact? Further, this has nothing to do with the strength of the currency. There is no way in a market as relatively limited as that for the Swiss Franc could the SNB sell enough currency to in any way affect the $/SF price especially when the market is one way traffic to begin with and the bid is there at any price. There, wasn't that easy? As to the end game: My friend, Gerry, who knows about these things doesn't disagree with the event, just the timing. He says long and say just around the corner; that is to say end-September. Carter, I think your #2 is right on the money. Merkel knows she's at the end of her rope and probably realizes that her political future is looking very dark indeed. There is no more money to be had which means we are down to the very hard choices: do we eat the young or do we all go down together? I think they let Greece go and save all their ammo for Italy and perhaps Spain. By the by, I still think there is a big Greece repayment due next week so we may well have the beginning of the end in a few days. Oh, the ECB may step in and try to buy time because Trichet knows that might spell the end of the Euro and that was his child from conception, but in the end it will not make a great deal of difference. There will be a political reallignment and I think there is no question that France will stick with Germany (assuming the Germans want them). I have no idea how this is going to work but in some manner the Euro survives. The banks remain the big question mark. Creative accounting will be the call of the day, there will be some form of nationalization in a number of cases, mergers and perhaps, on the fringes, orderly (if there is such a thing) wind-ups. It's going to be ugly. The markets closed down in New York with, I suspect, all the boys either square or modestly short. The financials got killed again although I think U.S. banks are in pretty good shape and the regulators are pretty much on top of things given the long lead time to this point in this mess but you gotta wonder when Billy the Dud goes dumb on us when asked a question on the economy yesterday and proclaims that he thinks that things are just a bit worse than what he though in the face of his brothers down in the City of Brotherly Love telling everbody that the economy has flat stopped. He was a pretty good economist at...where did he work...oh, yeah, Goldman Sachs. There's that name again. And speaking of names, I asked a former financial official of the British Government if there was an truth to the rumor that a good deal of bank bashing in the Euro markets was coming from an unnamed area in th east. A pause..."we would have no way of knowing that." Yeah they would, so on I pressed. "Soros?" "I really don't know old boy. Always has in the past." Never let a crisis go to waste as his buddies say. Next week, to paraphrase the Chinese curse, "we may be living in interesting times." See you then.