It’s worthless. If you have to shut down the ratings agencies, then the rating is junk.

Holy fucking shit, the EU is filled with the dumbest bunch of piss heads on the face of Mother Earth!!

Do they really believe they can fix their problem by RELABELING debt?

ASSHOLES IN EUROPE, LISTEN UP. YOU DO NOT HAVE A BRANDING PROBLEM, YOU FUCKING IMBECILES. YOUR PROBLEM’S YOU’RE IN IT KNEE DEEP AND TOO STUPID TO GET YOURSELVES OUT.

Far from helping them, this move is exactly in line with all the other boneheaded missteps they’ve made up until now.

If people didn’t trust the debt when artificially high ratings were attached to it, what do you think forbidding ratings agencies from issuing ratings on that debt – just as those ratings are very visibly falling – is going to accomplish?

I’d guess, it will reinforce the belief that EU members are dishonorable scumbags who cannot be trusted with anything.

This kind of horseplay, like trying to create “super riskless bailout funds” and fucking with counterparty liability insurance, is EXACTLY the behavior that will send this system grinding to a halt. You want to see things get real ugly; fuck with bondholders.

Remember, up until now the ENTIRE EU rescue apparatus has been calibrated assuming some resiliency for EU sovereign debt would be present. I’m not talking about demand for new debt being issued; I’m talking about people being willing to hold onto the debt they have.

You want to know what happens if Europe keeps playing these gay little games, screwing with their creditors? Do the words “asset position Exodus” mean anything to you?

The misanthropes of Europe had better start toeing the fucking line, because they’re on thin ice with this shit.

I’m not kidding around here. If outstanding bonds in Europe decide the countries are hopeless, run by men and women with all the capabilities of 7 year olds, you could see the country of Spain disappear literally overnight.

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I came closer than I care to admit, in the final fifteen minutes of trading, to selling my entire ERY position, going to massive cash, and calling it that.

So close, yet I just can’t do it. The prospects of brutal selloffs in energy names are just too tantalizing to give up on.

The contraction in Europe is not stopping this weekend. Their problem is far too immense for that. No, this is not a simple issue of them simply rebranding themselves, fools.

They have daunting sums of debt all coming due at this exact moment. That’s what’s really dragging them back into the abyss. Not fucking confidence…

Nothing they do now will change that.

Pardon me, but you do not simply absorb twice your outstanding monetary supply over a one year time span, without there being some fucking repercussions.

Hyperinflation is certainly a possible outcome here, so I wouldn’t bet against the commodities outright, just now. Particularly if the Europeans are organizing themselves, they may steal up to do something desperate. Eventually, the commodities will collapse from this, from sheer demand destruction, but they can double in price between then and now on nothing but fear and fleeing hot money.

Rather, I’m focusing on the suppliers of refined products with ERY. If defaults shock the region, or they simply try to print away their problems – either road leads to further economic contraction. If you don’t like that, go back in time and bitch smack the idiots who set the world up for this.

I don’t care, though. So don’t complain to me about it.

But in order to placate my mind a little, and lock in some more of these recent gains, I raised my APC position to full size, for $64.06 a share. I love the company, and even if it sells off, I can be at peace owning it. It will complement the ERY shares nicely, forming a sort of partial hedge.

Best case scenario for me is a brutal selloff that lets me unwind the ERY shares for much higher, while leaving me owning everything I want, with cash to strategically add.

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Spain’s behavior this weekend has created the remarkable opportunity – yet again – to discuss the fine points of complex, non-linear systems, and what happens when myopic retards fuck with them.

I was really worried that my selloff would not materialize. For all I knew, Spain had given the market just enough of what it wanted to hear to usher in another cocaine induced rally; maybe it would ultimately prove faulty, but does that help me if it can sustain itself for 6 months and 2,000 DOW points, like the last one?

But then, as if it were their intention, Spain fucked up so thoroughly that everything they thought they had accomplished was unwrought right before their stupid, socialist eyes.

I would have assumed they had learned their lesson after Greece. Greece tried this same bullshit, you’ll remember. They attempted to circumvent the terms of their credit default swaps; the result was pandemonium.

Without the specter of principle protection, there was no reason to be caught holding Greek bonds. That same week, their bonds sold off hard, making it more or less impossible for them to continue on without direct support from the EU.

They lost literally billions, trying to screw markets out of a few million worth of protection – and increased the likelihood that a multi-billion hit to their banks would ensue.

This weekend, Spain did the same thing. By working the terms of their bailout to give the rescue fund preferred treatment, they have reminded markets – again – that there is no security in loaning money to these people. What’s the point of the usual protections of sovereign bonds if unlimited government money can find its way to the front of the line?

There’s no safety there. Each bailout is a bigger threatening haircut to any bond restructuring you may have to take.

So at that moment, Spain and the EU, trying to ensure that their precious little bailout money was extra safe, undermined the entire bond market. Now, people are fleeing their notes en mass. In an attempt to make $100 billion inviolable, now Spain gets to worry about its entire fucking debt load.

It’s Greece, part deux. Brilliant move, Spain. Well done ladies and gentlemen.

The best part is, once again, the entire purpose of the ESM/EFSF mechanisms have been undermined in trying to screw over the other market makers. The only reason they wanted to bail out the PIIGS with these funds, rather than direct monetary intervention, was to appease Germany’s hardcore stance of avoiding any and all inflation.

The point of the ESM and EFSF was to encourage people to lend money to over indebted countries. But by giving them preferential treatment, they’ve actually succeeded in driving investors away further.

Now, all money that comes to Spanish debt, just like Greek debt, will come from the ECB. And so, the EU gets to enjoy stagnate lending, a budget crisis, AND more horrific inflation levels. Germany will be pissed. Manufacturing will continue to contract continent wide. And negotiations between countries will be tougher than ever.

All because Spain decided one gay weekend to act unilaterally and screw the pooch.

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Sadly, it would appear that all benefits of the doubt will be given to European leaders, as most of you are too cowardly to bet against them over the two day weekend.

What you expect to occur over this lapse of time eludes me. If there is a recurring theme here, it’s European leadership is a vacuum, and they aren’t very expedient about anything.

It took them a year and a half to create a largely unfunded entity to market as a bail out for Greece. It took them another three months or so from there to get the initiative to write off some of Greece’s debt.

Spain’s a lot bigger than Greece, meaning it’s an even more delicate subject. Forgive me, but I have a feeling that Spain requesting a bailout is going to touch a nerve with citizens of Germany.

This same group of leadership, which is even more disparate and unpopular now, is going to save the day over a weekend, yes? A good chunk of these clowns weren’t even elected by their countries. They have no mandate to govern. Look at Greece; any “progress” could be swiped away with the rise of the political left.

Germany is going to put itself on the line, and open themselves up to immense liability, just to see these people take the easy path and drop their responsibilities? The preponderance of Europeans have been taking the easy path for the last thirty years. Even now, they’re just begging for a sucker to drop their failings onto.

Germany’s not biting that bullet, people. Fuck “the greater good”. “Good” for whom?

Spain’s bailout will take months to craft. The debates will be contentious. The fights, bitter. And the terms will be brutal. Merkel will see to that. Spain will have the option to put up for collateral (read: transfer ownership) of their entire national reserves of gold, in exchange from modest funding. Likely the amount of gold demanded will be worth at par to the size of the loan.

And in doing so, Germany will guarantee that any repercussions witnessed from this little charade goes right where it belongs – the homelands of the culprits.

This is a most serious matter; outside funding drying up leaves Europe with few options. They are trying to triple their outstanding currency to stay solvent, without tripling their outstanding currency. That can’t be done. It’s idiotic to even suggest. Yet here we are.

But the German’s aren’t dumb. They understand what’s at stake. They aren’t going to compromise on this. And Spain will not appreciate being told to surrender the only hard assets they have that could be used to offset the effects of price increases and collapsing confidence at home. These countries are betting the house knowing full well they have their gold reserves to fall back on, if they ruin everything. Even if no one wishes to acknowledge it.

What Germany is demanding is that Spain’s leadership put their contingency policy on the line. This is Spain’s game to lose. Germany may regret loss of the trade advantages the euro has provided, if this gambit fails. But they would then have possession of the second most liquid form of money, next to the US dollar.

Believe me. This will be an especially acrimonious phase of the European Debt Crisis. We are now moving out of the “Numbers/Confidence Game” and into the “Wealth Game”.

Paper promises and assurances on the part of indebted countries are meaningless. It’s time for the PIIGS to start putting up their national treasures as collateral. And they are going to hate it.

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Issue forth and spay them. Let none go unpunished. Into the close, their cheerful demands of sugar will be met on the receiving end of a sharp instrument, piercing their naked breast.

ERY going green for the day.

Commodities and idiot, untalented hedge fund managers over allotted to them being pushed to the point of desperation.

Kill them all, until Bernanke is forced to intervene in two weeks.

Two…LONG…weeks…

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I’m standing hunched over the desk in my 9th floor office, chewing lightly on a light Mediterranean salad, which is giving off slight aromatic aromas mingled with the sharp hint of vinegar, and a side of tender chicken while I work. In between taking bites, I can’t help but feel my lips purse into smirks.

Looking over my shoulder; WTI is now toppling into the $82-83 range. Yet, SCO is also falling, as is ERY, and reliably, TVIX is inside of $10 again (that product is useless).

What funniness!

I can’t say I blame anyone because the horizon is murky. So all products are being sold off together. Only cash is king today.

My expectation is that by the POMO meeting towards the end of June, policy makers will have already yielded some form of accommodative support to markets. However, it could come later. This is a big gamble, so having plenty of cash and feeling secure and confident about one’s book is critically important.

I was somewhat suspect of holding products like ETFs into today, because I figured they could sell off, much like last Friday. Being wary of the potential for intervention over the weekend, I sold SCO yesterday; missing out on big gains this morning.

However, that is the price of safety sometimes.

I’ve decided to hold ERY through the weekend – I’m going to trust that, if something big is announced this weekend, I’ll be able to get out with the herd on Monday. It’s a risk, but worst case, ERY opens down ~10% and it does 2-3% of damage to my portfolio.

At that point, I would theoretically deploy some of my – by then larger – cash position.

I yearn to buy more silver; but I cannot do so here. Lower; I need lower prices.

I’ll be preoccupied with some work for the remainder of the day. It’s my intention to stop back periodically and to finalize my strategy before the closing bell. If I do not get the chance, let me take this moment to wish you a fine weekend.

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