INCOMMING!!!

The Guns of August began firing today as expected.  The trigger was a completly accurate story on the front page of the WSJ concerning the Ney York Fed and the world's banking system..a story which I hinted at the other day.  Now its one thing for your friend, Charlie, to write about this but its quite another thing for the Journal to headline it although that shouldn't be the case.  My  comments were really informed speculation--been there, done that--knowing how these things work.  The Journal or any decent newspaper can't work that way.  Somebody spilled the beans and the result was to be expected; markets crashed and stayed crashed all day and will stay crashed for some time.

I don't know whether Billy the Dud is in town or out at Amagansett this being August, but wherever he is, he better damn well put out the word that in times like this KEEP YOUR MOUTH SHUT!  God, I know the Euros can't find their asses with both hands in the middle of the Haupbanhoff Strasse at high noon but the New York Fed?  Memo to Bill: if you do nothing else try to maintain whatever confidence is left.  The next thing you do is get Kramer off CNBC in the morning whaere today he simply tried to cover his butt for the mess he made in 2008 and panicked everyone again.  With this stuff he's way out of his league; time to say good-bye.

That's not to say there isn't a big problem.  The Euro banks have stuffed themselves full of as many dollars as they can get their hands on for pure liquidity purposes and the political initiative is dead.  The three states in Germany that are needed to finance this thing have said no way, Merkel is finished politically and everyone knows it and my Really Smart Friend, Larry, told me today that France is the only game in town and that is not very reassuring because the last time the France won anything on their own was with Joan of Arc and we know how that worked out.  He was in the country, drinking one of his really excellent bottles of Barolo and staring at an open ticket to Zermat.  Encouraging, that.

All that remains, barring a real miracle, is the final discussion of who dies in the financial sector and what Europe looks like in six months.  This mob have managed to take what amounted to a 30 billion Euro misunderstanding and turn it into God knows what by a total lack of leadership, intelligence, failure to act and stupid little turf battles between the ECB and the politicians with the pols trying to protect their precious banks who, if the truth be known, are really too dumb to be allowed to survive.  Mind you, our institutions are not the seats of genius, but come on!  You could see this coming for two years and you guys did nothing.  Incroyable.

Economic numbers today were just awful as well.  The Philly Fed report when it came out at 10:00am looked like a bad print.  Housing starts were awful and the jobs picture was not encouraging.  But things really can't be too bad because I guess The Leader is still heading up to the Vineyard for 11 days.  Nice place Martha's Vineyard.  Filled with those middle class folks of whom The Leader is so fond.  Hard working folks with good Union jobs, living in $15, 000, 000 bungalows as should we all.  I'm sure he'll get a lot of good ideas for his jobs speech in September.  What a country.