Euro-zone Assessment

Alex Patelis of Merrill Lynch(MER) says the Bank of England's new lending facility for banks is unprecedented.It is remarkable that they established it after having warned of the moral hazard of such a move.Mr.Patelis is relatively positive about the Euro-zone.In the Euro-zone,homes are not as important in financing.The English-speaking countries are more dependent on housing for that purpose.While the Bank of England will have to cut interest rates twice more this year,the European Central Bank is on hold for the foreseeable future,in Mr.Patelis' view.Euro-zone inflation for March was at 3.6%,so the ECB is quite reluctant to risk any increase of it by cutting rates.

Nature Note:Still White Crowns

We had a light frost this morning.White-crowned sparrows were still bulking up at the feeder.I have been seeing two at a time.Their crown markings are distinctive,so I can tell they are the same individuals every day.One sparrow has thinner white bands than the other.By early May,they should both be flying north to Canada.

Bank of England Helps Banks

The Bank of England has set up a new lending facility for banks.British banks will now be able to swap their mortgage-backed securities for treasury bonds.The facility is similar to one established by the U.S. Federal Reserve.The banks will be able to keep the bonds for up to three years.At that point,the swap will be reversed.The BOE is providing 50 billion pounds for the facility-that is about 100 million dollars U.S..Even if the banks' securities were based on good mortgages,they are viewed with suspicion in the current environment.If they couldn't swap them for treasury bonds,they might have to write them down as a loss.

Nature Note:Purple Finches

Two female purple finches visited the feeder this morning.They were bulking up for their flight north,although it may only have been 40 miles or so to Blue Mountain,Pennsylvania,where I observed a male of the species one spring.They breed as far north as just south of James Bay,Canada.For me,that's what bird feeding is all about.I can help insure the safe arrival of a migratory bird on its breeding grounds.

Nature Note:The Rabbit

The rabbit is so close,I could reach over and touch it.I would like to do that,but I decide it would be wrong.Let the wild stay wild.It is almost tame,so I don't want to take away the little that is left.There are enough pets.

G-7 Reflections

Christine Lagarde,the French minister of Economy,Industry and Employment,has been reflecting on the G-7 meeting held over the weekend in Washington.They all came together and prepared some concrete measures,Ms.Lagarde recalled.They were concerned over the weak U.S. dollar and commodities prices,sharing the same view about the excessive volatility between the currencies.There is hope in the U.S. stimulus package and the support for financial system reforms,as well as for clarification.Bankers realize that between greed and guilt,we need to find equilibrium through regulations.For the first time since 2000,the G-7 countries,which include Canada,France,the U.S.,Italy,France,Japan,Germany and the U.K.,expressed common concern,Ms.Lagarde said.

Foreign Ministers Meet

The three North American foreign ministers met at the State Department in Washington recently.U.S. Secretary of State Condoleezza Rice hosted foreign ministers Patricia Espinosa of Mexico and Maxime Bernier of Canada.The theme of their talks was prosperity and security.They were preparing for a summit of their heads of government in New Orleans.The three countries practice free trade with each other and cooperate on border security.Many Americans dislike free trade because they think it eliminates jobs,and feel that Mexico doesn't police its border sufficiently.

Nature Note:Good Grass Seed

I spread grass seed this morning.About 35% of it is Creeping Boreal Red Fescue,a Canadian grass.That should produce grass that will stand up to any winter.

Microsoft and Yahoo

Microsoft(MSFT) remains determined to acquire Yahoo(YHOO).The two firms met this week to discuss the matter,but no agreement was reached.Some investors may nonetheless be buying Yahoo shares in hopes of profiting from what they see as the inevitable achievement of Microsoft's ambition.

Nature Note:White-Crowned Sparrow

This morning a white-crowned sparrow appeared at the feeder.It is bulking up for migration from the U.S. to Canada,where it breeds.Having spent the winter here,it's a bird that binds our two countries together.

Honeywell Continues Trend

Industrial titan Honeywell International(HON)is confident in its 2008 performance.David Cote,CEO of the Morristown,New Jersey firm,says orders still look good.It's all working for them.The U.S. is clearly slower than it was,and Europe is still slow,but China and North Africa look great.Between 2003-2007,Honeywell total return rose 107%.