The stock market swoon yesterday 

I’m sure you heard. The DOW went up about a half-trillion points yesterday. I’m also sure you heard that this is a sure sign that our economy is really on the road to recovery thanks to the incredible brilliance and efforts of the world’s greatest economic mind, Barack Obama.

Sorry … that’s not exactly what has happened here. Let’s try to make it simple.

Europe is on the ropes .. especially southern tier nations like Greece, Italy and Spain. Their social welfare state experiments have proven to be too expensive to sustain. The experiment with the Euro is pretty much doomed to failure and the so-called EuroZone is in for some mighty tough times. Why is this troubling for America? Well many major American corporations earning as much as 50% or more of their profits overseas, a major disruption in the European economy will translate to our economy at home. This is bad news for a president running for reelection when the voters are focusing on – what else? – the economy. So the Obama junta puts the pressure on. . American dollars start flowing into the International Monetary Fund in increasing amounts; money that will be available for European bailouts. The world’s central banks have given European banks easier access to dollars … this eases credit for troubled national economies. In other words … the can has been kicked down the road. No reform. Just easier access to money. Investors see a window of opportunity for stock market earnings and rush to buy … the sell off will come later.

In the meantime Obama just hopes that he has managed to delay the inevitable in Europe until after next year’s election. Good luck with that.