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Farrell: The Danube Two-Step

Angela and Nicky went to the prom and had a wonderful party, I am told. They got home on time and certainly didn't do anything rash. In fact, they didn't really do said there should be a Euro President with a 2 1/2 year term. I'm sure there is a reason for that, but it is not apparent. They want all 17 countries that share the Euro as a common currency to "enshrine" a balanced budget rule in their constitution by next summer. Like that is going to happen! But I love the "enshrining" idea. I wonder how we can get "enshrined?"

They think French and German corporate income taxes should be "aligned" and future budgets should be prepared on the basis of "shared macroeconomic analysis." What in good God are they talking about ?

One idea that will be enthusiastically received is to have some kind of financial transaction — tax. Taxing anything and everything financial is always a crowd pleaser. It's not like the industry hasn't asked for it.

Financial speculation drove the world to the edge of the abyss and now the financial chiefs spend ever so much time laying people off so the mighty ones at the top of the feeding chain can still get big bonuses.

It was a no-go on the Euro-bond idea and the EFSF won't be enlarged.

I don't think it will even be enshrined!

The European Financial Stability Facility (EFSF) will be used to stabilize the bond markets if the need arises. I am willing to bet the need will arise and the EFSF will be seriously underfunded. But I can understand how two politicians, under serious domestic attack and criticism, would be hesitant to pledge their tax payers to a bigger bailout of the southern periphery. Thing is, they have no choice if they want the Euro to survive. We are just in the beginning chapters of this book.

Isn't it better if you mis-speak, you say oops and try to weasel out of it ? The Rickster from Texas said "I am just passionate about the issue and we (who is the "we"?) stand by what we said." Again, who is we ? This is in regard to treating Ben with Texas hospitality if he prints more money.

I like to say "we think the market is ...whatever, whatever." It makes it sound like there is a massive team of intellectual power hitters here at Ticonderoga. The truth, as you all know, is when you are listening to me you are listening to our entire economic, financial, strategic, and market team. I double as odds-maker during the football season. I guess the Fed is now officially politicized.

Politics aside, I so disagree with this. The Fed is, has been, and should be independent and not subject to temporary political winds. I think Gov. Perry has made a mistake and opened up the possibility of others coming into the race. Christie, Rubio, Rudy G. of NY, Jeb - Momma Bush thought he was the one running when Georgie declared, Paul Ryan...Except for Cousin Arnold Schwarzenegger, for any number of reasons, the race is wide open and should be fun.

They will all have the Special Congressional Committee to take shots at when it starts its deliberations after Labor Day. Six hard and fast Republicans against six hard and fast Democrats are not likely to hammer out any compromises. Maybe that's for the better in that the economy is poised for a double dip if we are not careful. That is not my expectation, but there is very little room for error.

One quick comment on taxes on a lazy August day with the end of summer looming. The Wall Street Journal editorialized Wednesday that "those who make a $1 million accounted for .2 percent of returns in 2009, but paid 20.4 percent of taxes." OK, they can afford it, and more. "Those with adjusted gross income above $200,000 were just under 3 percent of tax filers but paid 50.1 percent of ...total personal income taxes." So the top 3 percent paid more than the bottom 97 percent!

There are a few millionaires and billionaires in that group, but most are thousandaires. It's my thought President Obama needs to refine his message a bit.

Vincent Farrell, Jr. is chief investment officer at Ticonderoga Securities and a regular contributor to CNBC.