At this point there’s just no way the Germans feel bad enough about WW2 to even pretend to go along with anyone at the eurozone meeting today. The summit is looking more and more irrelevant in a “no news is bad news” environment. As for myself, I’m hoping for a public relations disaster because it’s now clear that Germany and France have totally different definitions of the word “bond” as in “common bonds” which is a pretty fundamental difference.
As I understand it, the Germans have no problem with money held by various national banks collectively in a certain account being used by a specific country at some sort of preferred rate without being mutually backed should they spend it all on hookers and blow. This is a technical consideration and not, in principle, a bad idea. Meanwhile, the French and Italians want the Germans to underwrite all of the risk for the entire Eurozone. The problem is that this is not a bad idea either if you’re not German so it’s not surprising to see the rest of the Eurozone really push for it. What’s surprising is surprising that they’re surprised Germany doesn’t want to do it, and they may even spark a mini-crisis by trying to persuade another country to agree to something that’s clearly against its interests without having any coercive leverage.
People in europe who are (already) starting to congratulate me for my bearishness based on the fundamentals no longer being fundamental have no idea how poor my sense of daily timing is. My portfolio would be much better off if I just talked to a trader once a week and he just took my advice and track record into consideration. Any takers?
I was about 80% committed to puts on Monday before face ripping began, and the remaining 20% were timed almost perfectly with the HoD yesterday but that’s still not a good ratio at all.
My SPY 129 weekly puts are still so fucking far underwater I’m discovering new species of fish, and while I’m probably going to see some return of their value, not being liquid enough to get more of the succulent SPY June 131 puts at 1.90 was heartbreaking.
The general idea for the non-me investor (I secretly want to know what blowing up feels like) would be 5% gold (I hate gold, but…) 20% cash, 25% puts, 10% calls, and the rest in stocks either short or long. I tell myself each month that it’s time to balance the portfolio, hedge and set up less risk, but then something always comes up and I find myself white-knuckling another week. Now it may be the turn of the bulls to develop an involuntary twitch and have mysterious stomach problems.
Barring really massive positive news, I don’t think the market has come anywhere close to pricing in the “news” about debt and slowdown in fundamentals that’s not really news but we’ve managed to ignore. Keep in mind that the walls of Jericho are not falling and this isn’t the end of the world unless AAPL breaks 515 at which point there becomes a risk that news and fundamentals become a feedback loop that drives stocks lower and wipes out this year’s gains entirely until something intervenes.
I’m not so sure about this “something” now: governments like to run up debt because it lets them look better in the present, and financial sectors like to take on extreme risk and commit suicide for the same reason.
So, fortresses that I am currently sieging and would like to see fall, but if they show no signs of cracking this week I’ll give up and move on to easier targets: LNKD, LULU YHOO, SSW, YELP
Villages where the terrified defenders have tried to parley but I’ve butchered their messengers each time: GME, BKS.
Where all my money should be: SPY puts
Where half my money should be: conservative call spreads on safe stocks like WMT and ABT and YUM when it drops back to 60.
Possible hedge against a money drop: Try to always have around 5% in gold but trade it on a weekly/monthly basis as needed, grab some AAPL 600 august calls picked up at anything below 530 with a downward trend*
*Note: I will not even attempt to do this until/unless it drops to 470-450 because I am dumb.
