Euro Crisis Continues, Bill Frezza Reveals How Much It Takes to Buy A Representative and Senator, and the Boom in Natural Gas Drilling

David Zervos has a pretty good take on the Euro crisis today.  With so many rumors flying around, it's tough to make sense of it all, but Zervos sums it up pretty well.  Via Zerohedge:

"The bottom line is that it looks like a Lehman like event is about to be unleashed on Europe WITHOUT an effective TARP like structure fully in place. Now maybe, just maybe, they can do what the US did and build one on the fly - wiping out a few institutions and then using an expanded EFSF/Eurobond structure to prevent systemic collapse. But politically that is increasingly feeling like a long shot. Rather it looks like we will get 17 TARPs - one for each country. That is going to require a US style socialization of each banking system - with many WAMUs, Wachovias, AIGs and IndyMacs along the way. The road map for Europe is still 2008 in the US, with the end game a country by country socialization of their commercial banks. The fact is that the Germans are NOT going to pay for pan European structure to recap French and Italian banks - even though it is probably a more cost effective solution for both the German banks and taxpayers....Expect a massive policy response in Europe and a move towards financial market nationlaization that will make the US experience look like a walk in the park. "

Yup, things don't look good.  Of course they haven't looked good for years, but enough people have pretended as such and we may finally be seeing the irresponsible decisions of politicians reach a destructive conclusion soon.  Unless of course the dreaded Euro bonds start making an appearance, but it looks like that option just got shut down today.  Via The Telegraph:

German court curbs future bail-outs, bans EU fiscal union

The nexus of bail-outs already agreed for Greece, Portugal and Ireland are allowable under Germany's Basic Law - or Grundgesetz - because there is no "automatic" transfer of money beyond the Bundestag's control. Germany may participate in Europe's €440bn (£388bn) bail-out fund (EFSF). To prohibit the existing rescues would have brought down the temple of monetary union within days, and with it Europe's financial system. The judges did not want a global depression on their conscience.

The ruling is "a clear rejection of eurobonds", said Otto Fricke, finance spokesman for the Free Democrats (FDP) in the governing coalition.
Above all, the court ruled that the Bundestag's fiscal sovereignty is the foundation of German democracy and that Article 38 of the Basic Law prohibits transfer of these prerogatives to "supra-national bodies".
By stating that there can be no further bail-outs for the eurozone without the prior approval of the Bundestag's budget committee, the court has thrown a spanner in the works and rendered the EFSF almost unworkable.

Whether this court ruling holds will remain to be seen.  I place my bets on "Eurozone stability" overriding the ruling.  Even so, total disregard for the ruling may not be enough as Mish points out:

Even disregarding the German court ruling, the likelihood that Austria, Finland, and all 17 countries need to change the treaty would agree to allow Eurobonds is zero.

While I sure hope Mish is correct, sovereignty is slowly becoming an ancient artifact in our modern kleptocratic world.  Our foreign policy is completely demonstrative of that.

Wall Street Journal has quite the hilarious article today:

Tim Geithner, Who Has Never Been Wrong About Anything, Rallies Markets

So apparently CNBC aired an interview with Tim Geithner this morning, in which the Treasury Secretary told Jim Cramer there is “no chance” of a Lehman-like event happening in Europe.
He also said people are mistaken if they think Europe doesn’t have the “capacity” to solve its problems.
That has stock investors super excited, with Dow futures up 70 points and S&P futures up 9, higher than they were before Mr. Geithner started talking. Update: The rally didn’t last long — the Dow is up just 10 points in early trading, following a Fitch downgrade of several Spanish regions.
Why they should be excited about this prediction is tough to say, but one thing we’ve learned this week is that stock markets, unlike financial bloggers, have absolutely zero cynicism when it comes to the pronouncements of the powers that be.
Like flightless birds that have never seen humans, they are absolutely guileless. Angela Merkel says Greece isn’t going to default? Well okey doke, then! More stocks, please. Tim Geithner says there’s zero chance of another Lehman Brothers? Why didn’t he say so before? Gimme more of them stocks, right now.

The author, Mark Gongloff, makes a great point.  When the market reacts positively when someone like Turbo Tax Timmy spews good news in order to cover his friends' asses, it really shows how idiotic the major players are.  Funny enough, Zerohedge dug up this nugget of Jim Cramer warning that if Geithner got to be Treasury Secretary, it would be a disaster:

Looks like a broken clock is right at least twice a day.

Bill Frezza has another excellent Forbes piece out today.  What's most interesting about it however is this revealed secret:

Several years ago, while sitting on the board of an internal combustion engine startup, I had to nix a proposal to seek a cleantech earmark. The respected K Street lobbying firm pitching us gave us chapter and verse on how you can rent congressmen and senators to gain multi-million dollar earmarks, complete with names and price lists. Ten thousand dollars bought the support of a congressman; twenty thousand bought a senator. These were campaign donations, of course, split into $2,000 checks written by officers and directors so as to dodge campaign finance laws. I was aghast at how open the whole process was, right down to the commissions paid to both the lobbying firm and the federal agency through which the funding was directed.

Frezza better watch himself.  In some demented way, that admission may count as insider trading.  After all, investors could use this "secret" information to gauge whether a company can purchase a few favors, thus enhancing their probability expectations.

So I was thinking about something today.  As Robert Wenzel has pointed out several times, Fed money printing is entering different parts of the economy right now:

One of the epicenters of money flow as a result of the current round of Federal Reserve money printing has been Silicon Valley. SV is having an impact just up the road as San Francisco experiences a boom in hotel sales.

The epicenter of the latest manipulated Federal Reserve boom is Silicon Valley. New IPO's are streaming out of the area and employment is climbing.

Bottom line: The early stages of a Fed manipulated boom are developing, but it is early stage. Particularly disconcerting about this manipulated boom is that producer prices are already climbing.

Those are just from a few posts on EPJ.  Being from Pennsylvania (and desperately trying to get out for any employers out there!), I hear a lot about the booming natural gas drilling industry that is taking place in much of the northern part of the state.  Now hopefully this doesn't come back and bite me in the ass, but I interned at the Commonwealth Foundation over the summer.  The Commonwealth Foundation is of course the leading free market think tank in Pennsylvania and my views don't reflect the institution in any way shape or form.  Anyway, CF has been fighting a proposed "extraction" tax on the industry, which is of course a good thing.  CF also reports on the economic boom the industry has created, which is also a great thing.  See this recent blog post:

You see, I spend most of my time traveling our great state meeting with folks who are interested in the Commonwealth Foundation. As a direct result, I am deeply knowledgeable about places like Wawa, Sheetz (which, again, for my fellow Philly natives, is what they have instead of Wawa from Harrisburg on west), McDonald's, Wendy's, and Dunkin Donuts.
What does this have to do with Marcellus? A great deal. Because Canonsburg is, in many ways, ground zero of the gas boom—and because of my aforementioned area of expertise, I am highly qualified to say that in Canonsburg I saw the absolute fullest Sheetz parking lot I have ever beheld.

Now Mark Perry over at Carpe Diem has also been reporting on the booming natural gas industry:

According to data just released by the EIA, natural gas production in the U.S. reached an annual record high of 26.85 trillion cubic feet in 2010.  That output was an increase of 3.22% above the previous record high last year, which pushed U.S. production in 2009 above Russia's, and made the U.S. the #1 producer of natural gas in the world. 

Another post:

The "natural gas revolution" is not only creating thousands of new U.S. jobs directly involved with the exploration, drilling and extraction of shale gas, but it's also creating thousands of new jobs in the domestic industries that support shale gas production, like steel tubes and shale sand, to highlight just a few.

So is Fed money printing feeding this boom which may inevitably end in a bust?  I am not an energy expert in any way so it's gonna take some extra research and observance.  Obviously there is a great demand for energy, especially alternatives to oil, but there was also great demand for housing and dot-com companies as well.  This may be the very early forming stages of a Fed manipulated boom.  Take a look at North Dakota, via another Carpe Diem post:

If there's any doubt that domestic drilling of oil and gas generate huge and significant positive economic benefits (more jobs, income, output, tax revenues, etc.), the booming economy in North Dakota provides a convincing case study.

I am definitely gonna keep an eye on this in the future.  It could be a very sustainable industry (I hope it is) or there could be some money printing manipulation involved.  We will just wait and see.

Update- I should also mention I have an article in the Press and Journal this week entitled "More Texas swagger? Thanks, but no thanks"  Here is an excerpt:

Genuine or not, cowboy boots paired with Joseph A. Banks suits make for a compelling image.  Top it off with a concealed laser-sight pistol, and you have the makings of another Bible-thumping cowboy gunning for a spot in the Oval Office.

Whatever you think of Perry, he has become a polarizing figure since announcing his bid for the presidency. From calling money printing by Fed-head Ben Bernanke treasonous, to receiving a lecture on civility from former Bush advisor and campaign extraordinaire Karl Rove, Perry has transformed the GOP nominee field from a sideshow to a real three-ring circus.

Though he continues to be marginalized by the media, Congressman Ron Paul has made huge strides in gathering support for his third run at the White House. The media is finally learning that it can only blackball a candidate who predicted the housing crisis and subsequent budget crisis for so long.  Even Jon Stewart, never one to let a cheap shot at conservatives go to waste, stood up for Paul after he was literally ignored by the media following his almost-upset victory at the Ames Straw poll.

Now I am not going to be delusional.  Libertarian views have a way to go before breaking into mainstream political thought.  And Ames hasn’t always been the best predictor of GOP nominees for president; remember when Mitt Romney faced Obama in the 2008 election after his Ames victory?  Still, Paul’s warnings of excessive government spending and overextended militarism abroad are finally coming to fruition.

Big thanks again to the editor for mentioning the blog in my description.

Update 2- Here is a nice description of the Fed-empowered U.S. consumer, *caution, adult language ahead*: