Premarks: A Few Quick Random Thoughts

*Risk on- Risk off is back in vogue.  How else to explain the string of +1%/-1% trading days we seen in the past month or so.

* Europe:  The European Union is now in the political Kabuki theatre stage.  Everything it seems will depend on how Germany {and to a lesser extent the other Northern nations of the EU} decide on how to ultimately deal with the Southern countries and Ireland.  The problem of course is the average German has no interest in bailing out his Southern counterpart who he doesn't seem to like very much .  To highlight that feeling I'm reminded of the statement a German said to me on the streets of Munich last winter when he found out that the next rung of my trip was to Italy, "You know Chris, God put the Alps where he did for a reason."   The only way German Chancellor Angela Merkel can get any sort of bailout done is to take the EU to the brink it seems so expect more chaos and volatility from across the pond until this whole mess gets sorted out.

*Of course the one event that nobody seems to ever entertain is what happens of the Germans just can't get there and instead of bailing out everybody else they just leave the EU.  I know that's supposed to raise the price of a new reconstituted Deutschmark to levels that would severely crimp their exports but nations sometimes do illogical things.

*Here at home our elections are going to be decided this summer.  That's because political data shows that most people's opinions on the economy are set between now and Labor Day in a presidential election year.  The economy is showing signs of slowing and that cannot be good for the President's chances on reelection.  We'll look here at the state polls this summer in Wisconsin, Ohio and Iowa for clues as to how he's doing.  

*Health care:  If the Supreme Court throws out all or part of the Health care Bill, it will be a huge loss for the President.  He will have a tough time rebutting the argument that he spent too much time on a bill ruled unconstitutional {all or part} and not enough time working on the economy.  I think stocks go up if part or all of the bill is thrown out. For the record I think the Supreme Court will throw out the individual mandates portion of the law and keep everything else. 

Markets are still cheap.  Estimates are now coming down closer to my 103.75 number for the S&P 500.  We'll see if we get some stability here now into month's end and the 4th of July holiday.

*Long ETFs related to the S&P 500 in client and personal accounts.