QUO VADIS?

Nobody knows, least not The Leader who showed up 50 minutes late for a scheduled tv speech,  blathered on with the same generic solutions he's been blathering on about for the last month, blamed all the bad things on something or someone else and watched the stock market crumble by 200 additional points before he got finished.  To paraphrase the Architect, "If ye seek a reason, look about you."  I'm sorry folks, but he is not The One and I am afraid that it is becoming obvious even to some hard core supporters.

The Dow closed down 634 points not for any real reason but simply, it appears, that no one would buy a stock.  Gold and Treasuries held the only buying interest with the former at record highs and the latter at record low yields.  Not bad for a AA+ credit risk, which of course highlights the irrelevancy of the downgrade except in a technical sense which I am sure you all understand as it has been discussed to exhaustion in every form of media.  Unfortunately, the downgrade has resulted in a destruction of a huge amount of wealth due primarily to its destruction of all confidence in the economy and the future, which The Leader did nothing to reverse today and, indeed, probably made worse.  I fail to understand why S & P felt it necessary to act as they did except for the fact that they got way too far out in front of themselves and were trapped into taking the step they took.  Stupid, really stupid, but in the long run perhaps a good thing as their role and the role of the other two agencies will never be the same and that has been a long, long time in coming.  In the mean time, Congress better get the hell back in town and not wait until mid-September to set up their 12 person committee to start fixing this mess.

Meanwhile, back in Euroland, conflict continues to reign supreme with no real agreement--except in theory--that somebody is going to have to provid a bid for the debts of Spain and Italy for the forseeable future because this isn't going to get fixed soon.  As you have no doubt sensed, I have been a skeptic of the concept of a United Europe for quite some time merely from the standpoint of the vast differences in the people and cultures that comprise the Union not to mention the--in my opinion--the foolishness of a monetary union without a common fiscal approach.  It is now clear than that will never be achieved and with the exiting of Trichet from the scene (for he was the glue holding the thing together for this long), a dissolution may come sooner than anyone ever expected.  It may begin in the coming months with Greece as the realization that the country cannot and will not service its debt sinks in.  At that stage it will be every man for himself so to speak and it will be ugly.  I hope I am wrong but I don't believe I am.  This was a really bad day today and while I think the road ahead is well-defined I really don't know to where it leads.