As the EU goes, so goes the USA?

From Jeff Cox at CNBC (hat tip: Brian Hearden):

The current European debt crisis likely will not end until the euro collapses as a currency and takes the entire European Union with it, said Dennis Gartman, hedge fund manager and author of "The Gartman Letter."

"I think the whole thing will go down to defeat, the whole thing will eventually unravel," Gartman said in an interview with CNBC.com.

Gartman said he doesn't have a specific timetable for how long it will take for the collapse of the 17-year-old EU, but said, "it doesn't look good."

The debt problems continued to escalate Wednesday as Greek citizens rioted in the streets over proposed austerity measures that would be required for any rescue plan to gain approval.

At the same time, Moody's warned that it might downgrade the debt for Portugal, accelerating worries that Greece's unremitting debt worries could spread across the continent.

The thing is, with U.S. banks having major holdings in EU countries, if the EU sneezes, America could catch the cold. And if that's the case, so much for the budding recovery.

If a few rioters in Greece are enough to send the stock market on a near 1,000-point dive, I have a feeling it's going to be a long, hot summer.

Trading in rumors

The more I learn about the way stocks and commodities markets function, the more it strikes me as a cross between legalized gambling and a junior high school lunchroom. Everyone seems to be playing for high stakes based on the prevailing gossip of the day.

Take for example the recent run-up on wheat and other commodity prices. Wheat futures approached $10 per bushel on the Chicago Board of Trade, and wheat prices topped $10 per bushel in the Portland grain market, because buyers and traders were worried about the global supply of grain due to wheat problems in places like Australia. But lately, the futures prices have started dropping.

Why? Because the U.S. dollar is getting stronger against foreign currencies, thus making it more expensive for other countries to import U.S. goods. But global grain supplies haven't suddenly improved.

What's most interesting is that the price swings have for wheat have been dramatic. There is a 30-cent per day limit on price swings on wheat, which was huge when wheat was trading about $4 per bushel, but now at $8, $9 or $10 per bushel, those swings aren't as massive, but the fact that the trading limits have been reached several times in recent weeks is quite interesting.

Got to love those folks on the trading floors of the major U.S. markets. They are nothing if not melodramatic. Maybe that comes from having a job that forces you to stand in a pit and shout at people and gesture wildly to get noticed in flurries of activity and make financial decisions based on who is whispering what about whom.

I can't help but chuckle and scratch my head. The more I learn about how all that financial stuff works, the more it makes absolutely no sense to this simple ol' country boy. It makes about as much sense as social dynamics among teens and preteens. Just because the people involved are wearing expensive business suits doesn't change how silly it all looks to an outsider.

Dow Chemical takeover?

The stock price for Dow Chemical, which makes agriculture chemicals among other things, shot up today amid speculation the company may be the focus of a hostile takeover bid.

Read the AP story here.

The big money behind the bid will supposedly come out of the Middle East.