GRANDDAUGHTERS AND GRAND DESIGNS

Isabella arrived on Saturday and we are on the road, hence the absence.  All is well with the new arrival and if one can believe the popular press this morning, all is well with zone Euro.

The German Constitutional Court agreed to the constitutionality of German participation of the Euro bailout funds but only up to a maximum amounts of 190 billion Euros.   Why 190 billion?  Beats the hell out of me, but it probably has something to do with the present committment...adding to that will require the approval of both houses of the legislature.  A superior triumph of jurisprudence and political astuteness.  So onward we go to the funding of sovereign nations through the central bank--til the money runs out that is--because as you may remember the ECB's purchase of bonds must come through the bail out facilities until...oh bother, what difference does it make now that it appears the Germans and especially Angie are into this thing whole hog.  At the end of the day Germeny is still key and the limitation of German participation a problem if the problem is a tad larger than some folks expect.  I wonder if that might happen?

More interesting, I think, was the cross conversations regarding the banks.  Slowly, there seems to be emerging a general agreement for a zone-wide supervision under the authority of the ECB.  The problem of course is which banks?  Very much like the discussion of Too Big To Fail over here, will be the negotiations as to which national institutions will continue to be regulated by national institutionas.  The politics of Europe and the world of finance have always been interrelated to a far greater extent than has been the case in this country so one must expect that the battles over this issue will be mighty indeed.  Then of course there is the issue of non-Euro universal banks operating in the Euro zone.  Who regulates them which of course raises the issue of consistency of regulation between jurisdictions, which raises the issue of  Basel III, which, well, you get the idea.  Easier said than done but from my standpoint a step in the right direction.

This is importat stuff and about the worst time in the world to be away from home base but I'll try to keep up to date, but understand the next week or two is going to be choppy.  Reactions to all the goings-on from around the world tomorrow with special emphasis on Spain and of course, Greece go which all of this comes a bit too late although it probably would not have made a difference.  Please bear with me, like the Euros, I'm trying'.