A "United States of Europe" is needed

WSJ: "EU Fights Irrelevance in Crunch"
Perhaps the nations and people of Europe will now learn the lesson that the leaders of the American States did in 1787. A unified national government with a moderately strong executive is essential for actions in times of crisis. Perhaps Europe will finally just copy the Constitution of the United States, make a few modifications for their inherent multilingual nature and implement it.

The unelected, unaccountable - even unappointed and unconfirmed - Trichet the Ostrich continues to say he's done everything and it's now a political problem. What a fool ! His delusion of fighting the phantom of inflation perhaps reaches back to Don Quixote jousting with windmills thinking they were giants in his clouded mind.

Russia lends Iceland $5 billion to stave off bankruptcy. That is a geopolitical loan. Iceland is strategically located in the North Atlantic at a critical point for Russia's fleet to break into the Atlantic. I presume KGB thinker Putin is plotting something.

Australian central bank cuts rates. Good. A start.

The Bank of England needs to lower rates buy a large amount - to 2% The ECB needs to cut rates to 2%.

The Fed will now pay interest on reserves at 75 bps under the overnight Fed funds rate. Good. So the banks will no longer just invest in T-bills, which now yield less. And banks obviously will earn more money.

Speaking of banks, BAC greatly disappointed me yesterday. But at least I had taken counsel of my fears after the MER acquisition when Ken Lewis said that all ways to raise capital were on the table. And he proceeds to cut the dividend by 50% to fund part of the MER purchase. What a jerk ! He builds his edifice now with the pain of his shareholders. At least I had sold. Whew !

Here are two lessons - one already learned and one just learned -
1. In a bull market do NOT take counsel of your fears. Hold good stocks for big gains.
2. In a bear market DO take counsel of your fears. Many bugs appear when the one picks up the rocks. And that bullet being "bitten" can become well-chewed.

WB taught me #2 - a painful lesson. But that learning saved me a lot of $$$ when a fear was conjured in my mind about BAC after the MER acquisition.

What is it with these banks like BAC and C who want to make big acquisitions while cutting dividends ? Do their leaders think the shareholders are mere serfs who cannot leave the manor after a pay cut ?

So now JPM is my sole bank of choice to re-buy at a good price. WFC seems a bit expensive and is now mud wrestling C over WB. I'll stay out of that mess.

Markets

The Dow Jones Industrial Average had fallen about 800 pts when I put my Bunker buy program in place and got some good prices on my stocks. Alpha Fund is now 100% long again.

My list: CVX, DVN, RIG, FCX, BHP, AAPL, GOOG, DRYS, EXM, GNK, and a bit of MBI. At a good price after the short sale rules are lifted, I'd like to buy some JPM. I figure the beefers will knock the banks down and give me JPM at a good price.

Word of the Day

"Cad" - noun [$10]
Cad means a person (esp. a man) who behaves dishonorably.
Sentence: Ken Lewis, the CEO of BAC, has become Cad of the Week, by making his shareholders pay to satisfy his "Edifice Complex" as he buys MER and then cuts the dividend by 50%.

Note: "Edifice Complex" is a pun on Oedipus Complex, a Freudian diagnosis drawing on the character Oedipus in the plays of Aeschylus who fulfilled a prophesy to kill his father and marry his mother.