MISSION ACCOMPLISHED

The road warriors have returned and we are heading home tomorrow leaving behind two spoiled children just like grandparents are supposed to do. It has been fun.

What hasn't been fun is observing the goings-on in the nation's Capitol where the scope of disconnect with anything resembling the real world is quite scary. The up coming election sucks the air out of anything else and the conversation concerning the truly dreadful world wide economic news is only in the context of what candidate or campaign might it favor. Facing a fiscal calamity in five months there is no group or groups of legislators who are seriously seeking a solution with all concerned resigned to the fact that nothing will occur until after November 5 if then. Markets seem remarkably unconcerned as well with the 10 year yields at the lowest point in anyone's memory as the flight to quality continues as being defined as Treasuries, Bunds, Swissy and occasionally Dutch and Finnish paper. In the TBill market yields have gone negative more than once. In the face of this the entire town has adopted a "What, me worry?" attitude. It' like being trapped inside a MAD comic book.

Euroland resurfaced again today as the depth of the Spanish problem become more clear. They may not make it. The Euros okayed 100 billion for the banks (useLess) with Finland demanding cash collateral (I don't know either) but the Spanish need probably 30 billion by the end of the year and with the truly awful auction this week it's hard to see how they are going to get that. So here we find ourselves faced with, by the end of the year, the U.S. financial cliff AND the possible default of a real country; forget about Greece, no one cares any more. And of course L'Affair Libor grinds forward with the increasingly out of control Justice Department foaming at the mouth over here and the Bank of England and the Banker's Association at each other's throats over who did what to whom and when. Should be a hell of a dinner in The City late this fall.

Speaking of the Old Lady, did you happen to catch the idea that's being floated around by the Govenor? Seem he thinks special lending facilities could be made available to UK banks who would then on-lend in the corporate market place. Of course HM Treasury would be involved as well. Would one of the readers in London do me and the country a favor? Wander over to Threadneedle and hand one of the Pinks a note for Mr. King. Simply ask him if he knows how to spell Solyndra.

See you next week from the fly-over zone.