From: US GIO To: Undisclosed recipients:; Subject: Eye on the Market: Thanksgiving edition, November 18, 2010 Date: Thu, 18 Nov 2010 20:20:13 +0000 Eye on the Market, November 18, 2010 A Don Quixote Thanksgiving At this time each year, I write on a topic linking politics and investments to give our clients something to talk about over the Thanksgiving holiday (lest the conversation become stale). Following on last year's comparison of the Obama Cabinet's business experience with all administrations since Theodore Roosevelt, we focus on Europe's ongoing strains in the periphery. This follows on our Aspen Insights session on Europe we held with Martin Feldstein and Paul Marshall earlier this year. The diverging economic conditions between Europe's core and periphery are severe, but not insurmountable. However, a flaw in Europe's creation myth may lay at the heart of the inability of the European Monetary Union to survive over the long run. As Europe deals with its latest weak link (Ireland), i am reminded of Don Quixote, who among other things, went on a difficult journey for all the wrong reasons. For Europe, the EMU may turn out to be the same. At the end, some brief comments on investments in European equity and sovereign debt markets. Michael Cembalest Chief Investment Officer The material contained herein is intended as a general market commentary. Opinions expressed herein are thaw of Michael Cembalest and may differ from those of other J.P. Morgan employees and affiliates. This information in no way constitutes JP Morgan research and should not be treated as such. Furdren the views expressed herein may differ from that contained in J.P. Morgan research reports. The above summary/prices/quotes/statistics have been obtained from. ources deemed to be reliable, but we do not guarantee their accuracy or completeness, any yield referenced ts indicative and. ubject to change. Past performance is not a guarantee of future results. References to the