SHORT WEEK

Man, a week like this is really a bummer.  July 4th is Thursday--Independence Day for us, Secession Day as named by  a few of my Brit friends--and when it comes in the middle of the week, no body's home.  The week is dead and nothing goes on.  Problem is there's some pretty interesting stats going out this week culminating of Friday with the jobs number which, if surprising either on the up or downside, could result in some pretty violent market moves, so pity the poor traders who will have to get up bright and early in their $20,000 a week rental in East Hampton and will not have had the chance to pig out at Bobby Van's the night before.  Then again, who said life is fair.

Oddly, Euroland is VERY quiet as well which surprises me a bit as in the past two weeks that mob went to great lengths to prove to themselves how much they hate each other, but the only real scandal emerging involves the Vatican Bank and a bit of money laundering which, while embarrassing, will probably come to nothing EXCEPT for the fact that the Italians are the absolute masters of intrigue and should they begin to dig, the corpses that could arise out of the ground would make the scariest zombie movie planned look like Little Red Riding Hood.

My first job as an international banker many years ago was in our Official Institutions Group and sure enough one of our biggest clients was the Vatican Bank and dealing with those guys was always a kick.  Banking was different in those days and there were clients whose reputation and quite frankly whose credit was never questioned which the client knew as well.  Every once in a while--rarely to be sure--the Bank would request a short term advance and it was always a big number which in those days was $50 million or more.  Always got it.  Never knew what it was for and always got it paid back within days.  One day we had a credit meeting and I was asked by a senior credit guy if I knew what resources were available to the Bank to justify advances of this size.  Being ever the snotty kid my response was, "Sir, have you ever been in the Vatican Museum?"  Silence for a moment when an even more senior guy piped up with, "John, the kid's got you there!" It wasn't a really good way to do business.

Years later the world discovered that the battle against Communism in Eastern Europe, especially in Poland, was financed mainly through the Church and in Poland the leader was a Cardinal from Krakow who the world came to know as John XXIII.  The world also came to know that the Bank was also the largest shareholder of Banco Ambrosiano, which was intertwined with Franklin National Bank, which was...well, that is a story for another day.

Today, the management of the Bank resigned following the arrest of a senior member for money laundering.  With a little bit of luck, Mrs. James' little boy Charlie will have a whole lot to write about concerning a former client, but I'm still sticking to my prediction that nothing will come of this.  Even wish you would be wrong about something?