It started with a Supreme Court Watch, an unusual form of blood sport played only in America. The issue was whether the Supremes as they are known (there are but nine) overturn all or part of the Affordablw Care Act (it is neither affordable nor providing of care) otherwise known as Obamacare. Surprise! No decision. The Supremes do that a lot and they do it on purpose. It's another way of them telling us that they do not dance to any music but their own. And so wait wait until Thursday perhaps.
Not too much later and 6000 miles away the newly formed Greek government announced that the newly appointed finance minister who had been in the job about 15 minutes resigned due to bad health. We pray for a speedy recovery. Hard upon that piece of news it was announced that--again due to health reasons--the Head of State would not attend the Euro Summit in Brussels on Thursday/Friday. We pray for a speedy recovery. Of course their absences is going to make this pow-wow look a bit like a funeral without a corpse but then again we always have Spain to kick around and another in the endless call for "Europeanization" or that into whatever that indecipherable word means. Keep and eye on Frankie Holland who really thinks he has the wind behind him, or so I am told, coming off his big legislative win last week. Why that would impress Angie I'm not real sure but that's what the sages tell me. I think what is behind it all is this intense desire on the part of the political left and some well-placed folks in our administration...sorry, I'll try not to be redundant...to push forward this theory of One United States of Europe formed under the protection of German Credit risk. Aint gonna happen, at least not this week. But they have pretty well worked out a game plan for at the end of the day, Spain formally requested Euro aid to bail out it's banking system.
Now Spaind hardly has a left-leaning government but when you have a problem the size of theirs strange bedfellows are the least of concerns. As announced last week, the money is there (at least we think it is but no one yet knows the size of the problem--stress tests be damned) but how it gets to where it is needed is the real issue. Angie is dead set against it going directly to the Spanish banks and for good reason. To do so would be for Europe to assume Spanish bank risk...and Italian bank risk, and French bank risk, and...well, you get the picture. For Europe read Germany. No go. The Spanish, supported by the French and the Italians (but not in the same fashion) will argue against the approach of Spain itself being the receipient of funds but the Northern tier will hold firm and the meeting will adjourn with a tasty meal and committees formed to discuss a broad range of alternatives. Thursday will be a short meting as Germany plays Italy in the semis and everyone will want to see that. As for Greece? All attendies will pray for a speedy recovery and discuss privately in small groups how much of a break they are going to give these deadbeats from the deal to which they have agreed next time they get together. The real interesting thing to watch will be the U.S. stock market. If Obama care is declared unconstitutional in whole or in part, look for a big rally off-set, perhaps, by the realization that that Euroland remains mired in gook. If Obamacare is upheld and everybody figures out that Euroland remains mired in gook we could be talking about a serious decline. That's as political as I am going to get.
Massimo called. I'm still trying to figure out what he said but I'll be back with my take shortly.
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Carter was kind enough to point out in regard to Friday's piece that if you got rid of mandatory capital requirements for banks the actual result might be better analysis and reduced lending to every chop shop out there. He's right of course, but silly boy. Ask a politician to give up the ability to regulate on any level? Not the basis for a career. Having made such horses asses of themselves, we may have a chance of reigning in Moody's, S & P, etc. but then again I wouldn't bet on it. After all we'll still have Fanny and Freddie don't we? Here's lookin' at you, kid
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