Don't worry, be happy ... a little Stollen will make you feel better.

In every life we have some trouble
But when you worry you make it Double
Don't Worry - Be Happy
Ain't got no place to lay your head,
somebody came and took your bed
Don't Worry, Be Happy
The landlord say your rent is late,
he may have to litigate
Don't Worry - Be Happy
Ain't got not cash, ain't got no style,
ain't got no gal to make you smile
Don't Worry - Be Happy

Bobby McFerrin

Lots of optimism seems to be embedded in the price of the euro based on the prospects for success at the upcoming summit among EU leaders; a summit effectively designed to remake eurozone countries in the image of Germany should said EU leaders expect more German taxpayer wealth to flow to the European Stabilization Fund.

There has been some push back, much behind closed doors, and some leaking into the public. Ireland for example, is still a major wildcard in this dangerous game given the shift in the political landscape on the Island as Irish serfs, those that haven't left to find jobs, are pretty much sick of carrying the burden for their highflying financial wizards' machinations from hell. And of course there is Greece, whose citizens have clearly caught on to the fact Greece's nomenklatura pretty much skated free of the burdens of excess, while they are left holding the austerity bag. As of now, it doesn't seem your average Greek citizen is happy about the idea of abandoning baklava for Stollen.

But it runs even deeper than that, as the discontent inside Germany is real and will likely grow as Merkel leaks more plans of German domination of the zone a la German taxpayer money (amazing how magnanimous your average human becomes when using other people's money) ... this is from Ambrose Evans-Pritchard column today in the Telegraph:

The three parties in Chancellor Angela Merkel's coalition have issued a paper ruling out use of the bail-out machinery to purchase the bonds of eurozone states in trouble, or engineer a soft debt-restructuring by lending to these countries so that they can buy back their own debt cheaply from the market.

They oppose any form of eurobond that puts Germany on a slippery slope towards a 'Transferunion', and have demanded a Bundestag vote on the accord reached by Mrs Merkel at next week's EU summit.

A group of 189 German professors has stiffened the Bundestag further by warning of fatal consequences for the whole process of European integration if the EU crosses the Rubicon to a de facto debt union.

As if that isn't enough, other risks to the eurozone project include:

...The EU's new criteria for bank stress tests

... Rising concern an oil shock could push the eurozone back into recession (given the broad exposure to Egypt and Libyan oil).

... Rising discontent among hardliner eurosceptics not only in Germany, but Finland and Holland

... and last but not least, the existing European Stabilization Fund rules that make it extremely expensive to borrow in the first place.

The reality is the euro is creaming the dollar even though everyone is aware of these risks to the single currency. Thus, the euro is acting very well relative to the news.

Surprise is what would do it. And on the near-term horizon a big surprise would be a strong US jobs market.

The US purchasing managers index hit its highest level in seven years as just announced. Big Ben Bernanke predicated the idea of ending QE2 (it can happen, really) on a self-sustaining recovery and employment is beginning to improve and labor markets are improving ... during yesterday's meeting of the minds at the Senate Banking Committee grilling and mugging for the camera's dog and pony show.

Another surprise might be Al Jeezera's cameras broadcasting live from beautiful downtown Riyadh showing 50,000 people in the streets battling Saudi security forces. This we think would end this idea the dollar is no longer a safe haven.

We realize trying to predict events is a mug's game. For now, the trend down in the dollar is all pervasive. Dollar yield support has vanished relative to euro and others. But even powerful trends must end. Just saying!

Jack Crooks

Black Swan Capital