$34.62 a share. Seeing massive problems in my portfolio; looks like settlement issues.

We’re going lower.

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I’m not changing a thing.

While it is extremely tempting, crashing into the close as we are, to try and be a boss and nail a bottom by covering my ERX and UCO shorts, at the end of the day I need to remind myself of this;

I’m not up at all. I’m even.

We have no idea what’s going to happen over the next 24-96 hours. Personally, I’m thinking there’s going to have to be a massive bailout and major cross-continental agreement worked out over the weekend. Short of that, things are going to get very, very ugly.

But I’m not willing to bet money on that either. I’m slightly down for the year so far; that beats being really down for the year so far.

I’ll see you all tomorrow. Sleep well, and don’t hurt yourselves.

Update:

Christ this is tempting. ERX down more than 20% now, capitulating.

I don’t think we see an agreement tomorrow. The EU needs to convene for this level of conference. We are at least one day away from them even being in a position to do that. More chaos tomorrow, I think.

Update 2:

My free run got blown at the close. Depending on how you value it, I was off somewhere between .8-2% for the day (silver makes this challenging).

AEC and CLP collapsed into the close, as did BG, CCJ, MGM, and pretty much everything else underneath this God green Earth.

Remember, this is panic selling and wild liquidation. Don’t read into the numbers too much, with certain sectors or stocks. If you’re a $20 billion fund manager getting hit with margin calls at the end of the day, you aren’t too interested in what it is you’re selling.

At that point, you’re just selling.

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Crude to $60.

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Even as we speak, Federal Reserve officials are likely coordinating with their EU counterparts so that they can begin the process of sorting through the mess and finding a workable solution.

I do not think anyone suspected that Italy would fall so quickly; that particular domino was off in a corner by itself. Yet, it now appears that the domino is ten feet high, six feet across, and weighs roughly two thousand pounds; basically it is going to crush the entire game to hell.

This cannot be permitted. And in the interest of global trade, the EU cannot go on a euro printing jamboree. That would skewer the balance and send the rest of the planet tipping as exports dried up while Europe faced unprecedented inflation.

Any solution will require lots of dollars by the Fed.

Until a few minutes ago, I was set that the Fed would hold back from easing. However, they will most definitely be forced to commit bonds and dollar denominated debt if they are to bail out the EU without crushing our own economy at home through unprecedented dollar appreciation.

I don’t think they can get anything accomplished today, and they certainly won’t have it worked out tomorrow. But they cannot permit this to continue into next week.

I am considering removing the hedges lightly so that, when an inevitable deal is announced this weekend, I won’t feel the wrath of commodities. I may cut them in half early or late tomorrow.

Be cautious friends. The 9th floor bids you good health, and watch out for murder holes.

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I’ll tell you something that is sure to annoy you. As of a few minutes ago, I’m flat for the day.

Even after adding marginally to my AEC and CLP positions (which are well behaved at the moment; they are going higher by year end), the increase long exposure has not seemingly set me back.

Of course, having ERX bleed out almost 10% in one day helps. My UCO short is also worth another 3%+ so far, and those two positions make up 20% my net value and are rather volatile. So 20% in dollars, plus a now-smaller cash position lays me even on the board.

But also, AEC, AWK, and CLP are all holding up beautiful. And why shouldn’t they?

Which leaves us with the stragglers; BG and CCJ are getting poleaxed (I’m not bringing up MGM yet, it’s too small a position). These things are keeping me from having a most wonderful, profitable day.

But I will not let them go. I maintain BG is going to be a darling of Wallstreet if they keep their tempo. And CCJ is going to make so much money over the next decade people will wonder if the Japan tragedy wasn’t a boon for the sector.

So, right now AEC, CLP, and AWK are bigger positions than the rest of my holdings, mainly because I just added to them. On a good bounce, I’m willing to scale back to core on AWK and AEC. I will be keeping CLP however, because I’m anticipating the mother of all deals to be assembled by their management sometime this year.

On such a rally, while reducing those aforementioned positions, I would likely add marginally to my shorts of ERX and UCO, provided there’s a good 10% upswing in the names.

And finally, I will add to BG and CCJ on further weakness if BG should go to around $62 or CCJ to $22, respectively. I will not be adding to MGM; not until long after the best dip buying opportunity is long past, anyway. They are too indebted in this environment to risk anything on in size. I need to see things settle first before I go that far.

That’s the game plan. This sell off is mostly expectations being checked. I have not seen anything to make me think the end of the world is about to set in. I am skeptical about further intervention on the part of Bernanke, but if he does intervene, it will be mostly to keep the relationships level and avoid too great a disadvantage for U.S. exports.

And I certainly do not expect any such move before the end of August. He needs residual inflationary pressures to bleed out before he can really get moving freely. That was hinted at in a recent release from a former Fed official (can’t remember who, sorry), and by Bernanke himself only weeks ago.

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Pity isn’t a capacity I excel at; it comes with living in Motor City.

For instance, I used to give money to the homeless all the time. Then, one day, I saw a beggar sporting a $100+ designer hat and shoes and realized, “Holy shit, these people are taking me for a fool.” So I decided that anyone who really needs help badly very likely wouldn’t wind up on the busiest intersection in the city during rush hour.

It’s not that somewhere there isn’t someone who genuinely needs help. It’s more that you’ll never know who or where that person is; nine times out of ten you’re being manipulated, so sucks to be the guy who really needs the hand.

That’s about the moment I decided to not care about people’s suffering.

And once you start to stop caring, suddenly it’s a small step to laughing at people who get themselves in precarious situations.

Believe me, I have a good chuckle at the expense of cracked out loons all the time; I see them zigzagging across the street and don’t even pretend to reach for my wallet. It’s much more lighthearted than worrying about where they’ll sleep at night and much cheaper than feeding them.

So, if it seems like I’m really rubbing salt in the wound lately, towards those of you who were buying up oil and energy investments this whole time…it’s because I am.

I was quite explicit in telling you what was going to happen; it was only the when I wasn’t so confident of. You should have known better.

For the day, I am down mere pennies, despite adding to my longs by increasing AWK yesterday.

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