Rich Galen

The rest of the loss yesterday and a good deal of the 10.1 percent drop since April 26 (when the Dow closed at 11,205) is because of the situation in Europe about which we have spoken a number of times.

You will be hearing a great deal about "sovereign debt." That is the debt owed by a nation which is funded through selling bonds. The U.S. "sovereign debt" is a touch under $13 trillion. But, because the U.S. economy is so huge - twice the GDP of China which is second in the world - no one thinks our Treasury bonds are in any danger of default.

However, Greece, which has the 34th largest GDP in the world, has a sovereign debt which is about 113 percent of that GDP and there is a real fear that they won't be able to pay the interest on their Treasury bonds which is making it difficult to sell any new bonds which is why the EU (and the U.S.) had to dump all that money into Europe's Central Banks last week.

There appears to be growing fear that the trillion dollar bail-out will the equivalent of using a squirt gun on a house fire.

I said that I watch CNBC because I really don't know anything about this stuff. When I hear someone talking about "Credit Default Swaps" I do a "Default Channel Swap" to see if there's a Mythbuster's repeat on Discovery.

But, here's what I do know: The world is a very fragile place right now. Economies are teetering; Thailand is close to civil war; North and South Korea are snarling at each other; Iran is threatening Israel, the BP well is still spurting oil into the Gulf of Mexico, the Director of National Intelligence resigned last night, and the Washington Nationals have lost 6 out of their last 7 games.

I'm going to dig up that coffee can and put the $12.73 under my mattress. The way things are going, there will be an earthquake and my money will fall into the center of the earth.


Rich Galen

Rich Galen has been a press secretary to Dan Quayle and Newt Gingrich. Rich Galen currently works as a journalist and writes at Mullings.com.