Good Sunday to all of you. I’m sitting in a cafe in the one of the most gorgeous cities in the world – San Francisco. Besides people watching, I’m thinking about a few things today. One is what will happen to the Euro. The other has to do with how poor this economy has done in the last few years. And the last has to do with who will win the PGA Championship.

The pain in Greece from the reforms is growing ever more severe. Will they leave the Euro or will they get kicked out? Getting kicked out will be costly for the remaining members, perhaps anywhere between 320 billion Euro and 1.15 trillion Euro (http://econ.st/P75o0x). With all the bailout money put forward and the ECB ownership of Greek debt is seems more unlikely that they will kick Greece and the other PIGS (Portugal, Ireland, and Spain) out of the Union, but they might. It all depends if you think that dependent neighbor is going to reform itself. Welfare typically doesn’t work. So it’s all up to evaluating the realistic possibility that Greece will reform it’s behavior and accept that it can’ enjoy the same comforts as more productive nations. Hmmm.

The exit out of the last recession has been amazingly slow compared to past exits from recessions (http://econ.st/P7cjHi or Appendix K at http://www.wiley.com/WileyCDA/WileyTitle/productCd-1118250028,descCd-DOWNLOAD.html) . Why is this? My personal feeling is that it has to do with the amazing amount of uncertainty that the current administration has created. Nothing hampers business like uncertainty and more and more rules. Now is the time to let the market thrive, not chain it. Another part of the problem is that overhang from all the housing bubble. Some propose writing down all of the underwater housing loans as a way to freshen the system. Maybe that will work, but who will pay the bill?

Who will the PGA Championship? At the moment, with six holes completed, it looks like Rory Mcllroy will win his 2nd major. Maybe he is the wunderkid we were hoping for. I would be happy with that and I would also be happy with Adam Scott winning after his utter debacle in the British Open.
Have a wonderful day and enjoy life wherever you are!