Stock markets are cheering an apparent deal among European Union members (minus Britain) to institute new fiscal regulations aimed at preventing the crash of the common currency.

While some may applaud what appears to be a breakthrough, in a note this morning, UBS’ Art Cashin struck an entirely different chord, and warned that if Europe fails to right itself, the collateral damage could include President Obama:

Markets are celebrating (mildly) the Euro Summit “agreement”. We suspect Tim Geithner and the President are banging their heads against the wall.

The Euro leaders continue to plan and plot toward long range solutions, but they lack a crisis plan. In essence, they don’t have a fire department. If markets in the sovereign debt or European banks began to spiral out of control, they have no structure to deal with it.

We think the President is terrified, since – if Europe goes, it’s likely he goes too. The biggest threat to his re-election may be completely out of his control. Could be an interesting weekend at the White House.

A lot of pins would have to fall in order for a Euro collapse to consume the President. But it’s not impossible.

And I suggest that if Europe does crack, not only the President has reason to fear, but so does his resident cheerleader-in-chief, Tim Kaine.

During the AP’s closed-circuit debate, Mr. Kaine made it clear he’s ready to carry the President’s water, towels, snacks and whatever else might be necessary. That means Mr. Kaine, perhaps more than any other Democratic Senate candidate in the country, has the most to gain, or lose, from the President’s changing fortunes.

So, to extend Mr. Cashin’s note, it will also be an interesting weekend at Kaine campaign headquarters.

Norman Leahy blogs at Bearing Drift. The Local Blog Network is a group of bloggers from around the D.C. region who have agreed to make regular contributions to All Opinions Are Local.