OYEA, OYEA, OYEA

...or the German equivalent thereof.  The Constitutional Court performed a bit a a Pas de deux...or the German equivalent thereof...and decided that the Euro bailout from the German standpoint was ok BUT, every time a new "opportunity" arose permission would have to be obtained from a committee of the parliament.  It could have been worse--not by much mind you--but they could have required approval by the entire Parliament.  The market loved it; bank shares stabilized both over there and over here, gold dropped over 50 bucks, the DOW was up 275 and the pundits were asking, whilst panting, if this could be the end of the debt crisis in Europe.  So I asked my Really Smart Friend, Larry, if the death of Europe had been averted. "No," he replied, "Europe was never about to die, just the joke that has been referred to as the political union that is Europe.  It will occur shortly."

Larry has always been the stickler for precision and not being as smart I couldn't understand the difference in the colloquial sense of what he and I said but he's right of course.  If there was ever a dead cat bounce on the basis of one event this was it.  Nothing has changed, if anything it's been made worse especially if one realizes that the Italians have about 75 billion in roll-overs this month and the Greeks about 15.  Which means that there had better be an open line from Frau Merkel to this committee of the parliament because there are going to be a lot of requests coming.  At some moment, I suspect, somebody is going to ask what is the point of all of this and no good answer will be forthcoming.  Finito, if not for the Italians, certainly for the Greeks.  And then it's back to the banks.  A ways back there was a brilliant British Group called, "Beyond the Fringe," as funny and cutting as only the Brits can be.  They did a sketch about the need, during the dark days of WW II for a "grand gesture" for which some twit of a junior officer was to be sent out on a suicide mission.  His response to being chosen is screamingly funny ending with his question as to whether "A bien tot" would be applicable and being told very firmly that the situation required, "Au revoir."

If I were the Euros I would begin planning for a grand gesture in this situation involving their precious banks.  Not all can survive what could well occur and it would be best for them to decide for whom "Au revoir" should be considered.  Oh I suppose they could be all kept afloat but again, to what purpose?  Frankly, I never thought I  would be saying something like this but I don't really see any other way out. There is going to have to be some sort of method to wharehouse the assets and cover the liabilities lest we have another disorderly descent into chaos.  I think there must be a role for the U.S. in this whether we wish it or not because, despite Jaime Dimon's beliefs to the contrary, this is not a European problem: it's everyone's problem.  A road map through the end game best be drawn up quickly as I suspect it will be needed if there is to be an attempt to preserve Euroland in some shape of it's present form.  If there isn't...well, we'll wait and see.


I'm trying to figure out the lastest goings-on in the Great Mortgage Mess with the new rounds of Law Suits whipping about designed it would appear to make our banking industry pay for victimless crimes.  I'm going to try to spend some time on that soon.  What more can I say about the Euros that hasn't already been said?