300 in the Quarter Mile

We believe our early appraisal of the situation is about right. Roughly 70% of the turmoil last week - perceived problems of the EU as they may impact the US; roughly 30% - worries about US domestic considerations.

We have little direct exposure to EU sovereigns but indirect exposure by the way of bank lines to EU / UK banks that are exposed. We’re no longer close enough to that situation to know just how much, but observers think it may be a lot. That situation has been "band aided" for the moment. We cannot assign odds to an outcome.

The US real sector will surprise to the upside, H2. Most now look for stagnation. No, both employers and the consumer will cooperate, our anchor from earlier posts; the last two releases (Claims, Retail Sales) support our view.

We’ll recover, yes, but on maybe 6 of 8. It is government interference that stands in the way of full blown acceleration. Picture that railer (dragster), equipped with a blown Chrysler hemi block, putting out 1800 hrsp, pushing through 300 mph in the qt mile. The policy of the administration keeps the railers in the garage - no one can agree on the rules of the race, there’s nothing level or straight about the course. Nobody in his right mind wants to hit 300 and then be thrown a curve.

　

Robert Craven