TOO HARSH?

Some have suggested that I was too hard on Billy the Dud yesterday.  I mean, after all, said one caller, the DOW is up damn near 200 (it closed up 220) and the Greeks seem to have a deal!  As the football guy says, "Not so fast my friend."

The DOW was up because oil was up because half of the place where the oil is in Canada seems to be burning.  If anybody can find a long term trend in that, call home quickly.  Traders at work.  As for the Greeks, the Germans today announced...something.  Actually, they were no longer negative on a renegotiation under new terms and conditions that were "being discussed" and which, by the by, the Greeks could never in anybody's wildest imagination, ever meet.  But the whole world belongs to the traders these days and this is what one gets when there is hope--or doom for that matter--in the wind.

Then of course there's Jacob/Jack down in P.R saying all sorts of encouraging things like, "Something must be done."  I'm sure no one had that figured out until his pronouncement, so we can all rest well tonight.  And then there is BREXIT.

The latest poll had this thing dead even at 43%-43% with a remarkable 14% undecided.  Now of course this all started when Mr. Cameron dreamed up the brilliant idea of a referendum a couple of years ago when things were looking a bit bleak for he and his party to counter Labor's threats to get out.  Little did anyone know that Labor, in the general election would stand a fool like Jeremyand proceed to shoot itself in the foot, head and most other place leaving Mr. Cameron the once and future P.M. elegantly regaled upon his own petard and facing a far greater threat to his career in the form of former Mayor of London, Boris Johnson who is stumping all over the country and simply destroying Mr. Cameron in the most mocking terms since his late fellow American Sir Winston (yes, they were both born in America) used to refer to the Labor Minister for health in The Commons as, "The Right Honorable Minister of Disease."  When you have 14% who don't seem to have a clue at this point, their susceptibility to this kind of electioneering is, I suspect, worrisome if you are the P.M.

So, maybe Jacob/Jack should head Over There to sort this thing out and finish the job his boss started...well, do something in any case.  I'd hate to see Billy lose sleep as we get closer to a decision.  He sounded so happy the other day.

THE BEST LINE YET

Apparently, somewhere in France there was a headline, "Sarkozy Traps The Lion," The lion being referred to as being Great Britain.  So I asked one of my Brit buddies, a rather stylish and well-bred slip of a thing named Gillian what she thought of of Cameron getting bagged.

"A Frog's idea of a Lion trap is to buy a cage, step into it and wait for the Lion.  Bloody stupid, all of them."  Despite all of the above, Gillian was never shy.

Gillian is rather indicative of a certain wing of the Conservative Party known as Euro-skeptics that are at this point almost certain that "Jerusalem" was written with David Cameron in mind.  Personally, I think that's a bit over the top but Cameron's stand was indeed a brave one but a calculated one nevertheless and in the cold light of day the view on both sides of the pond is coming around to be that whatever was agreed last Friday may never come about as a number of the 26 are clearly beginning to ask their advisors back home, "what's it all about, Alfs?" and hearing the dreaded sound of the word referendum beginning to echo among the constituants.  If this was Cameron's bet, it was a very good bet indeed and he may well come up trumps in this high stakes Euro poker game.

Meanwhile, with the Moody's announcement of credit review for all of the members, comes a growing belief that France cannot escape a downgrade which puts a further dagger into the lingering hope of a Eurobond bailout (never was going to happen) and even a greater reason for the ECB not to begin to rain down money from on high. And so, all shall retire for the Christmas holidays as predicted and renew the effort to save the unsaveable come mid-January when I am sure the gang will all get together for another chin-wag, probably not in Brussels this time.  Even been to Brussels in the winter?  Awful, and this mob can just take so much awful.  The venue will probably be higher on the agenda than what to do about those awful Brits.  Look for a spot where a bit of shussing down the hills can go on.  Ever so European, that.  Unless something very unexpected and very odd occurs, we are not going to be hearing very much from Euroland for a month or so, which is not a good thng for Mrs. James' little boy Charlie.  I need material and as we used to say in the big war, Euroland is a target-rich enviorment.  Send in your suggestions...then again maybe I'll just speak with Gillian a bit more often.  Always a wonderful experience, then again you can't print half of what she says...least not in a family blog.  Bugger.

WHAT HAPPENED?

The great heavyweight champion, Archie Moore in one of his last bouts against Rocky Marciano was asked to describe the proceedings.

"Well, everything was going along just great, just like I wanted, when he it me with a what happened"

"A What Happened?" said the scribe.

"That's what I said when I woke up, 'What happened?'" said the great Mr. Moore.

I suspect that's what I'm going to say tomorrow.  It seems as though the meeting in Brussels ended with the Euros...

1.  Agreeing there was a problem
2.  Agreeing that they must fix the problem
3.  Agreeing to meet later to draw up rules to fix the problem
4.  Not being quite sure what was going to be drawn up within the context of the treaty
5.  Agreeing that it could be fixed between member states outside but inside the treaty because
6.  The Brits vetoed against a treaty change and
7.  That they all hated Great Britain...well, at least France agreed to that.

So, what happened?  May I be so bold to say pretty much what we predicted on these very pages over the past few days which adds up to pretty much zilch.  From my standpoint a surprising event was Frau Merkel's surrender as to the banks.  She agreed that there would be no "haircuts" which has the only effect of making George Soros even richer as it was revealed today that he had purchased $2 billion of MF Global's sovereign debt exposure just prior to the firm's demise.  Somewhere, deep inside me there is the belief that the fix was in but I can't prove it.  I just can't understand how this guy always winds up on the right side of a trade when Euro Politicians are involved.  I guess he's way smarter than anyone else because I didn't speak to a soul who didn't believe that there would be some sort of a negotiated debt reduction in any agreement struck.  Nary a one.  And so the banks, to the extent they wish, come out of this thing intact as long as the agreement holds and the taxpayers get it in the neck again...and there's the rub.

I'm going to go way out on a limb and say we are never going to find out because this Heads of Agreement as the French are fond of calling something like this is not going to happen which is probably better than having it happen and not work.  Oh, today as we have discussed will pave the way for a couple of events such as the ECB to buy up a bunch of bonds starting in January and for the IMF to agree to the release of limited conditionality monies to the EU for the bail-out fund (that is if the members agree to an increase in capital/exposure) and some recapitalization of certain banks (what the heck, Germany owns 25% of Commertzbank already), but in the end one of these heads of state is going to go home and get asked, "What, are you nuts?" and the immediate reaction will be: REFERENDUM!  Thus endeth the ball game.  A David Cameron moment.  As an aside, it's going to be a kick to watch The Suit explain to Congress why we should, as it will be catagorized, "Bail out Europe."

And what of Great Britain?  I"m solicitng comments from my many friend over there which will be ready by Monday.  Of course, the Beeb is in it's "How dare he!" mode and will stay like that throughout the adventure. The Guardian is beside itself and Labor has lost its mind.  The internet sites are wonderful reads...Britain's left wing in full flight is wonderful.  More on that next week.

Of course the problems as have been explained at this site have not been addressed and to be fair, cannot be in the time frame the market will demand.  Despite the promise of sugerplums and Euros falling from the skys, yields on Italian and Spanish obligations actually crept upwards which is another way of saying they are at even more unsustainable levels.  Today, three French banks received an S & P downgrade and one must ask can the country be far behind which, if it occurs everyone seems to believe will kill the plan.  I keep asking how a plan based on S & P's belief that France is triple-A and the United States is AA+ be a real plan and keep getting no answer.  I'm patient.  All in all, not a good day in Euroland but good days will be few and far between.  We had our first snowfall out here in the fly-over zone today.  Pretty.  Paris, by the way is lovely at Christmas time.  Hope the lights don't go out.