Monday, May 31, 2010

After the Crash

I'd like to take a few moments to make a followup post on my "Worst Case Scenario" post from last week. There is a lot of speculation on what it would mean to the average working serf when just such a crash does occur. There are many different scenarios, and it kinda depends on where and how it occurs as to how it'll be played out here. Here's my idea on how it'll be played out based upon my "financial system collapse" scenario, and I'll just go forward from the post I made last week when the banking system collapses.

On Monday, the markets will not be opened as the central bankers cannot agree on a common strategy to deal with the mess. (It's here that I need to say that it's possible the central bankers print money Zimbabwe style, but in my opinion, this will not work.. as food and gas prices soar, people can't make their bills.. and worse, they begin to get really scared and start withdrawing any money left in the banks, bonds and stocks, thus leading to.. a banking collapse). It's my opinion that after Sept 2008, the US Gov't has a plan in place for just such an emergency; they obviously are'nt letting me in on it, so this is my best guess. I'd wager that "The Plan" is to nationalize vital utilities and companies. I think there will be no choice but to hit the "reset" button on the financial system, which does two things.. first it wipes out any debts owed by anyone anywhere.. including home mortgages, which is a way to ensure that 100 million families don't become homeless and it'll make them kinda glad in a way for the collapse, thus ensuring political stability. I believe that states will then issue ration cards for all the unemployed, which will be at least half the adult population. I believe the state will take all foreclosed properties and give them to families; hotels will be siezed by states and used. The second part of this is that anyone with money, bonds or stock are wiped out, even if you are saving the money in your mattress. Retirement is now a pipe dream, as is a job.

The people will notice that gas is extremely valueable; your ration card will allow unemployed folk perhaps 2 gallons a week or so as the Arabs refuse USD and demand a barter of goods.. grains primarily. The local stores will be essentially cleaned out, and only the basics of life are available. Instead of perhaps thirty brands of toothpaste, you'll have one. Coffee, booze and cigs are a memory. The food will be more local.. there will be no more imported grapes from Chile or Italian Olive Oil; instead you'll have bread, carrots, potatoes and beans. People will begin using bicycles again out of necessity; golf carts and mopeds soar in value.

How bad it gets also depends on where you are.. life in the inner cities will become even more violent and awful, and this will slowly spread to the suburbs. Jewelry stores and other stores will be cleaned out by thieves in most parts of the cities. But if you are living in a smaller town, especially with farms nearby, life will be much better. I also think that the state would be empowered with state of emergency police powers to ensure things don't become chaotic, but simple crime will be really bad. Deputized police will roam the streets doing battle with thugs. Those who can flee to the countryside; most will not be able to as there is no money to rent a home, no apartments available or even the gasoline to get there. I also think that hungry people in other countries, where things are even worse, will begin to flood into the US, with Florida and the Southwest becoming very volatile places. The elderly will not have medicines available as before; the mortality rate will go up.

Soon enough the Gov't will issue a new currency, perhaps in union with other central banks; I can easily see a new global currency standard based on a basket of commodities. The Depression will last for at least a decade; most will not have a formal job for some time. But we as a nation are an industrious lot; we'll begin to plant "victory gardens" in our back yards and in open spaces; flea markets will crop up; family restaurants also instead of Burger King. We'll need tools to do this and someone will begin a shop to produce them in area. The currency will slowly return; banks begin lending; the stock market re-opens. But life will be much different; we'll never again see an era like the 1990s and 2000s. For most of our history, the vast majority of Americans were not able to get loans for anything other than a house, and even then you needed a very large chunk as a down payment. We will (and should) return to this. I'm hoping that we can abolish the Federal Reserve/fiat currency system, but I fear that is more than can be hoped for.

Here's another man's opinion {Bruce Krasting, a very respected comentator, former hedge fund manager and forex trader} on what would might happen-- be warned; his view is much darker than mine is:

I recently found an outstanding website on this subject for all who are so interested; on here you will find many differing opinions about life after prosperity, but nearly all believe that gardening, living in small out of the way places and stocking up on barterable goods is a terrific start..

Friday, May 28, 2010

Update 5/28

First and foremost, this is Memorial Day weekend; it is meant for more than BBQ's and beer. It is meant to honor those who died fighting for this country. On Memorial Day, President Obama won't be able to make it to Arlington Cemetary, as nearly all other Presidents have done; apparently the Chicago Bulls are playing and he's got front row tickets, and this quite obviously takes precedence. I can't tell you how disgraceful that is and how angry I am. It says all you really need to know about the man.

Moving on to economics, the last few days in the markets have been relatively normal; one day the bulls win, the other the bears. No central bank interventions, no crashes. On the surface of it, all appears to be back to normal, and perhaps it is; I think the wolves are a little more careful after the central bankers mauled them a couple times in the last couple of weeks. But there are still troubling signs; first and foremost the LIBOR, which is a measure of the interest rate at which banks lend to each other, is creeping up to amber levels this week, though not quite red alert levels, and higher levels than when the Euro bailout was announced. It's essentially a sign that banks are increasingly wary of lending to each other out of fear. A number of commentators (all of whom are noted bears it must be said) have come out and given the "run for the hills" alert this week. I'm going to be keeping an eye out on the LIBOR; it could just be that this is a lagging indicator, but in the past it has, in fact, proven to be a good fear indicator. I think that the failure (well, forced mergers) of a number of good sized Spanish banks this week is whats spooking the LIBOR, and well it should. Second, the money supply in the US (the M3 measurement) is contracting, which is something Bernanke hates; if it gets too far, I look for Big Ben to suddenly announce another QE, perhaps in the form of a lending facility for businesses. Here's Eric Sprott, who runs one of Canada's biggest hedge funds, on Monday:

As for me, I'm going to leave my IDX and DRR trades intact (two cent stops); I have a feeling next week could see some good volatility and my trades have short trailing stops just in case of a drastic move one way or the other. Just in case all hell does break loose, I'm going to be putting in an order to buy one hundred of the short S&P etf SPXU at 36.00, one hundred more t 37.50 and one hundred more at 39.00 with a two cent stop loss. Given the volatility I think is coming, trading commodities is just a tad dangerous, and so for the meantime etf's are my answer.

Update 5/30

Apparently Obama went to the national cemetary in Illinois today to lay wreaths. For me, this is just fine; it was my understanding he was simply going to blow it off. He did not; sorry to any offended by my incorrect opening post. I'll be more careful with the facts next time I decide to blow a gasket on a public blog.

Wednesday, May 26, 2010

Update 5/26

After watching the overnight markets rise nicely, I've decided to dump all of my TLT on the open and purchase one hundred of Indonesia's etf IDX on the open as well as one hundred short Euro etf DRR on the open; I'll give all of these two cent trailing stops. This could be the start of a nice rally inequities.

Update 5pm:

I got out of TLT at 98.22, for a loss of about $300.
I bought IDX at 64.97.
I bought DRR at 55.72.
I'm also going to be putting in an order to buy three hundred of the etf SDD (short small cap stocks) at 23.25 with a three cent stop; by the time this trade goes thru, my IDX will be toast. I'm really torn here; today the day began with a nice equities rally, but late in the day it fizzled. So far the overnite markets are essentially unchanged and so I look for a flat opening. This essentially comes down to a battle between Central Banks and the wolves; the last few weeks have shown that the wolves are much more powerful than I previously thought, and any more bad news from Europe will rattle the markets. But this week has been relatively stable and the slide down from 11,000 in the DOW has stalled around 10,000. It also appears that the ECB (or the Swiss) seem willing and able to intervene in currency and bond markets to stabilize any panics. I kind of think a slower, calmer downward trend is the way forward, and SDD will be my ticket. If SDD reaches 25.00 I'll be purchasing another three hundred on top of the three hundred at 23.25.

Tuesday, May 25, 2010

Update 5/25

Tim Geithner is in China this week upon bended knee promising our Chinese creditors that we'll slow our borrowing at some point when our economy recovers. I wonder if their students laughed at him again; I know I am. At this point, the only thing keeping foreigners buying our Bonds is the fear in their own country's markets. We as a nation must keep bond rates low like Japan has over the last two decades if our Government has any hope of retaining solvency. Japan did it because of the frugal nature of their population, which worked tirelessly to save money and sunk it into Japanese Govt bonds at very low rates. We are no so lucky; Americans are still overindebted and spend too much. It's rather sad that the only thing keeping us afloat is the misery and fear in other nations. But that is where we are.

This morning again the overseas markets are heading south; yesterday was positive for most of the day but at the end it fell apart. From here, I'm going to "buy" two hundred of the ETF TLT at the open, which is bonds.. the more the stock markets go down, the more people pile into bonds. I'll put a six cent stop loss on this one. The markets simply refuse to rally; yesterday's valiant attempt ended in failure, and I fear that from here we're headed south in the DOW to perhaps the 9,000ish mark within a few weeks. My own opinion is that deflation looks to be setting in along with the fear in Europe.

Update 4pm:

TLT opened today at 99.65 and promptly went south on me, closing at 98.57. Looks like my timing sucked yet again. I'm going to adjust the stop loss to three cents. But I stand by this trade; the markets again overall look weak; again today the NYSE opened with Rule 48, then had "digital trading errors" for the first 45 minutes. That was certainly confidence inspiring, though a late rally did end the day in the green. I'm adjusting my sell order on the Euro to $1.18 with a three cent stop loss. One day we'll see parity with the greenback, but strong support around $1.185 needs to be broken.

Sunday, May 23, 2010

Update 5/23 & The Worst Case Scenario

Last Friday the German parlaiment passed the EuroBailout, and the markets went on to have a calm day; no interventions.. the DOW up 160 or so. Despite the victory Friday, I fear it only a matter of time before something forces this rotten, corrupt, over-indebted structure to crumble apart. There will come a time in the not too distant future when an event.. often called "black swan" events, will trigger a complete collapse of the (very weakened) global economic system.. banking and currency systems the world over collapse within a few days. Here's a video of US Rep Kanjorski talking about TARP and what almost happened in Sept '08:

Because I myself think that this type of event has a better than 50/50 chance of happening in the next few years, I'd like to take a few minutes to examine this scenario. Lets take Spain, a nation with 20% unemployment and $1.1 trillion in debt, which just announced yet another austerity package to assure the markets, which is enormously unpopular. Its then that a young, aspiring politician begins to question why bother paying the debts if we're already in a depression !! Within a month or so, he's attracting very large crowds of angry citizens who agree, and their parlaiment notices.. as do the markets. The cost of insuring Spanish debt reaches Greek levels; Spain becomes essentially unable to borrow on the open bond markets and the EU steps in.. but asks Spain to agree to another austerity package. The Spanish people, led by our young politician, explode with anger.. violent strikes paralyze Spain. Meanwhile, large marches take place in Munich to protest Germany's part in the upcoming bailout, burning Spanish flags along the strasse. These scenarios on TV are too much for the Spanish Prime Minister, who has arrived at the Rubicon.. and he stops answering Sarkozy and Obama's phone calls and at a news conference announces that Spain will stop paying on it's debts owed to foreign banks and investors and would like to begin negotiations on default with institutions. By morning, European stock markets are in utter turmoil as a dozen very large banks and/or financial institutions, beginning with Spain's Santander and BBVA, are essentially insolvent and threatening dozens of other entities by way of loan defaults as well as credit default swaps. The Crash is on, and by 1pm the European governments have halted trading on their stock, bond and currency markets despite European Central Bank intervention, which cannot keep up with a dozen collapsing stock, bond & currency markets within a matter of hours. The markets open up in New York, but don't stay open for long.. (rightly) worried that the trillions of credit default swaps written by American banks on the European banks will crash our own banking system, and by noon the markets here halt trading as the chaos is complete. It is Thursday. All trading is halted throughout the weekend. The vast majority never saw it coming, and with the FDIC limiting withdrawals to $100/day, they are pretty angry and fearful.. and well they should be. Prices soar (gas in particular); some merchants simply close up shop rather than risk being paid in a currency that could soon be worthless. Gas stations begin rationing gas purchases by order of the state. Many are sent home from work for the last time. The very basic function of modern economy.. the exchange of currency for goods.. is in doubt; frightened people begin hoarding what they can with the cash they have.

Over the weekend, it become rather obvious that the heads of the governments and central banks cannot come up with a united front; the markets are again not allowed to open, thus collapsing any confidence and ensuring that the entire system is doomed. At this moment, an MI5 plan is brought up.. a plan to essentially reboot the entire system, with everyone's (people, government and companies) debt zero'd out. People own their homes, ensuring societal stability. Every nation's sovereign debt is now zero. But by the same token, anyone who owned stock and/or had money in the banks are wiped out. An international currency standard is agreed upon by major powers within the week, based on a basket of commodies. The world is about to enter into a Depression. Overnight, unemployment in the US hits 20%, on it's way to better than 33%.. fully half of all adults are not working; taxes on those who are working are crushing. Such is the fate of nations who borrow from their children's future for a more prosperous present.
The question is.. do societies hold together during this ? Simon Schama, a Brit historian that made one of my favorite TV series "A History of Britain", examines this in an article in the FT:

Thursday, May 20, 2010

Update 5/20

Today was another really bad day; it started with the NYSE issuing "order 48".. which is where they do not have to state an opening price on the DOW. Throughout the day, there were some drastic currency moves as well; at one point, there was a huge drop in the GBP followed by a steep rise in the JPY; there might have been intervention on the part of the Bank of Japan to keep their currency from spiraling up too fast. The euro seemed to hold it's ground most of the day until late afternoon, when a central bank intervened, sending the euro up two cents in a matter of five minutes. Yesterday the Swiss openly intervened to keep their currency down as people in Europe were exchanging euros for Swiss francs in mass numbers; there was at least two major interventions by the Swiss. Despite all, the DOW had a really bad day, down nearly 4% by the close.. a stiff loss. The German finance minister chimed in with a statement saying that there needs to be a plan for an orderly default of some EU nations.

These actions today, in combination with those of the last couple of weeks, seem to be the actions of a currency and continent in the spasms of economic collapse. Central bank interventions, mass currency moves, crashing stock markets, central bank purchases of Bonds..

Krasting seems to think that the ECB and Fed are secretly using the Swiss Central Bank as their muscle, backing them with money when they need.. an interesting theory. Given his expertise on these matters.. anywho, it's worth a read:

Shaun's (as always) very detailed commentary on yesterday is always very good:

My question is still... how long can they keep doing this ??
Tomorrow Germany's parlaiment votes on their part of the $440 billion euro rescue; I think it'll pass just fine. I'm sure that German MP's are being given a good look at the abyss, and well they should. If they vote against the measure, look for all hell to break loose.

Wednesday, May 19, 2010

Update 5/19

Well copper tanked again today; it opened at my sell price of $2.99 and ended the day at $2.9595. Lets hope for a less volatile road south from here !

Tuesday, May 18, 2010

Update 5/18

Today Germany banned a whole slew of dangerous trading practices, including naked short selling on some stocks, currencies, and government bonds. It also declared null and void naked credit default swaps (ie.. CDS that are just bets and not actual insurance ). This is exactly what Obama should've done on Day One; yet here we are still discussing the Dodd Bill, which is 1,300 pages of toilet paper. This will be interesting to watch.. after it was announced, the Euro took a nasty tumble, dropping more than two cents on the day. If this ends well, it could be repeated worldwide to the benefit of us all. But this is a dangerous time and place to rattle markets and liquidity. We shall see..

Part of the reason might have been the passage of the "Cornyn Amendment" here in the US, which essentially makes it very hard for the US to participate in IMF or other foreign bailouts. With the US possibly unable to assist in any EU Zone rescues, the Germans probably felt as though they were going to be left holding the bag so to speak. In Germany there is to be a vote on their part of the €440 bailout; today's actions might've been the political price demanded for a yes vote.

As for me, I took it right on the chin today: I was stopped out of both my Euro trade when it sank below $1.22 and for some wierd reason copper exploded upwards, hitting my stop loss at $2.983 and closed at $3.03. Total loss on the Euro was $2,000; in copper I made out with a small profit of $850. I have no clue why copper went up. From here, I'm going to "sell" one Euro at $1.19 with a two cent stop and "sell" two copper at $2.99 with a five cent stop.

Monday, May 17, 2010

Update 5/17

Today's action in the stock and currency markets strongly smell of central bank manipulation; there was a brief moment when volume spiked and the DOW tanked badly; the euro was already well below $1.23. It was at this moment that Bernanke's beeper went off and "the call" was made to the shady trenchcoat dudes in the basement to start "corrective actions". Most market vets know this is the drill. But my question is.. how long can and/or will they continue rescue operations ? If their intention is to restore confidence, they have instead convinced seasoned market folks that all is far,far from well. I fear this will not be the only such rescue operation of the week.

Shaun's blog had a chilling analysis of the situation facing Greece: "However I have seen some analysis done by Daniel Gros (an economist who specialises in this area) who has done a calculation for how much he expects Greek economic output to fall for each 1% reduction in its fiscal deficit. His analysis leads him to believe that for each 1% of GDP decline in Greek government spending, economic output in Greece will fall by 2.5% of GDP. So if you put in a fiscal adjustment of 10% you get a fall in GDP of 25%. Now the analysis is a little simplistic but it is revealing as to the depths of recession we can expect and I feel it will be worse much worse than is being factored in now. You see if anything like this happens (and it is consistent with the experience of Latvia) then the numbers the IMF has calculated for a stable path for Greece simply fall apart"

The Euro rebounded mid afternoon thanks to central bank intervention and hit a high of $1.2407, so I'm now long one Euro from $1.24; the close was $1.2396. But the bigger news was in the copper markets; it finally tanked like I thought it would months ago.. today it lost twenty cents on news that sales of homes in China were down 50%.. yes 50%. Therefore I "sold" two copper contracts at $3.00 even and copper closed at $2.9320, so for me this means I made about $3,300 on today's copper trade. $2.75 copper is within sight.

Sunday, May 16, 2010

Update 5/16

Despite the €750 billion bailout, the European stock markets continue to get hammered, as does their currency; the French stock market (CAC 40)was down 4.5% last Friday, a pretty stiff loss. There is a chance of an ugly crash in European stock markets by the end of next week as confidence simply has not returned to the markets. On the other hand, one good week and confidence would be restored; it could yet happen.. the DOW was down last Friday, but only a small loss. The Euro might just rally on it's own; it has fallen pretty hard of late, as have EU stock markets. I believe that US and ECB authorities will use whatever ammo they possess in their holsters to prevent a full on meltdown.. ie.. they'll print enough money and intervene in any market they choose to (whether this is within their authority or not) and this includes bond, stock and currency markets. I was kind of surprised ECB/Fed did not covertly support the CAC or the Euro last friday. Perhaps they don't have as much power as I think they do ?? We'll see.. in short, I have no idea what's brewing for next week; my initial hunch is of a rebound in both equities and currencies. Therefore, if the overnight markets are up, I will put in an order to "buy" the Euro at $1.24 or better with a goal of three cents and a stop loss of two cents.

Thursday, May 13, 2010

Update 5/13

The GBP and the Euro are sinking very quickly; in this era of deleveraging and central bank interventions, I'm thinking that we're getting close to intervention; therefore I'm going to put in a "buy" order on the Euro at $1.26 with a stop loss of two cents.

Copper today opened up at exactly $3.20, a loss of exactly two cents per pound, for a total loss of $1,500. The last two copper trades have wiped out (and them some) the money made in my euro trade. I'm changing order: "sell" two copper at $3.00 and "buy" two at $3.27, both with five cent trailing stops.

Update 5/13

Copper has not done what I expected; it has essentially stayed flat. I will be dumping my three short positions on today's open. Just not sure where to go from here; my thinking is that everything is pretty much stuck in neutral after the Euro bailout. I'll move my two copper purchases from $3.26 to $3.33 and also put in a "sell" order for two copper at $3.03, both of which again have five cent stop losses. My thinking here is to "catch the wave" when it comes, be it either up or down, and at this point I've got no earthly idea which way it's going. So far the Euro bailout is doing exactly what it was supposed to do, namely calm the markets. My thinking is that ECB purchases of Greek, Portugese & Irish debt has done a lot to calm the markets; the ECB won't say how much they've purchased but my thinking is that it's a fairly large amount. This will sink the Euro; I can see the Euro at $1.10 by year's end. In addition to the one short Euro at $1.245, I'm going to short another at $1.195. The central banks won't let the Euro crash, but a slow slide is definitely in the cards.

Tuesday, May 11, 2010

Update 5/11

Well, I "sold" three copper today at $3.18 and it went up to $3.2065 by the close.
This might be painful if it opens up nicely tomorrow. I'm still keeping my "buy" at $3.26 should it get that high.

Monday, May 10, 2010

Update 5/10

Well the EUrocrats actually did something big.. €750 billion; about a third of this is from the IMF; the EU kicked in €60 billion right away with the promise of another €440 billion if needed. The European Central Bank was also authorized to begin purchasing sovereign and bank debt, and began doing such today. The swap lines between the Fed and the ECB were also reopened. The markets went up nicely. But.. where is this other €440 billion coming from ?? They're a little hazy on this detail as I understand it. Still, ECB purchases of sovereign debt is a huge step for them, as is the swap line; I'm thinking it's a decent part of the reason why the Euro did'nt rally along with stocks. We'll see how the markets take to this bailout over time.. all of the previously announced bailouts brought the markets up for a few days before being hacked down again. If this one does'nt work, there are no more bailouts and the Dark Ages begin again on the Olde Continent.

As for me, I got caught flat footed here; I was short Copper from $3.1315 with a five cent stop loss; copper opened today at $3.24, so for me it was a loss of $2,712.. ouch. But the timing of this was meant to do this exact thing.. whack the pee pee's of speculators like me. Sarkozy is smiling broadly this afternoon. I honestly hope the news from Europe keeps him smiling. I'm going to "sell" three copper contracts at $3.18 and "buy" two copper at $3.26 (today's close was $3.22).. both of these again have five cent stop losses on them. My thinking here is that the markets will move big one way or the other in the next few days, taking copper with it. I will also "sell" one euro at $1.2450, this one with a three cent stop loss.

Saturday, May 8, 2010

Lehman 2.0

There is something big going on this weekend in Brussels; apparently the EUrocrats have seen the abyss and have promised us the world come monday morning to save the European currency and banks, both of which are now in serious trouble. This is the central bank intervention I spoke about all week long. By doing this, the European Central Bank is crossing the Rubicon; it is finally admitting that there is serious problems in Europe. There is talk of the Fed re-opening the "swap lines" with the ECB, essentially allowing the ECB to print USD as opposed to Euros. Rumors of the size of the bailout is in the €600 billion range, and it had better be; if all they come up with is hot air and a very small bandaid, the markets will immediately crash monday. All of this leads me to believe that Thursday's crash was more than just a typing error at a trade desk. In short, Lehman 2.0 has arrived in Europe.
For a terrific explination of what's happened in the last two days & why this is happening:

Thursday, May 6, 2010

Update 5/6

Wow.. now today was a wild ride !
What happened ?? Apparently there was a human error.. someone in Citibank's trading desk sent an order to sell 16 billion shares of Proctor and Gamble (he was supposed to sell 16 million). This one trade forced the market downwards instantaneously.. and from there, the computers took over, immediately issuing sell orders on nearly everything that moved. These are called High Frequency Trades. There are a few other opinions (Bruce Krasting) that think the computers were triggered by a sudden move in the Yen market. Either way, those traders and firms who had stop losses on their trades were crushed; the losses will likely be in the hundred million range just on these alone.

Still, this sort of thing has happened before.. in 1987 specifically when the DOW crashed mightily, and again in 2007. As it turns out, while the specific day was possibly an error, there were some fundamental reasons why traders believed what was happening was legitimate, and in both of these cases, it was the beginning of a serious bear market. I honestly think this will be the case again here; todays dip below 10,000 was a preview of what's to come.

Before this happened, the market was down 3%; the European markets had closed down about 2% and the Asian markets the night before around 3-4%. These are stiff losses. The Euro was (again) crushed, and if this continues for another few days look for today's crash to be played out in the European stock markets.. this time for real. Something very big will have to be done very soon if the European markets continue tanking like this. CDS and Bond rates for Portugal, Spain and Italy continue to climb. I would not be surprised if central banks began intervening in Europe next week.

Wednesday, May 5, 2010

Update 5/5

My short Euro trade is going smashingly well thanks to the ongoing crisis in Europe. It has, in fact, gone so well that there is an increasing danger of the European Central Bank (possibly in combination with other central banks) intervening to support the Euro. Therefore I'm pulling out today at the close and an "selling" a copper, which has finally fallen thru the floor like I thought it would.

As for the European crisis, it just seems to keep on creeping back despite any and all attempts to stop the fungus from spreading. Portugese and Spanish debt continues to get hit hard, making it more and more expensive for these nations (and their banks) to borrow at reasonable rates. Bruce Krasting (who's blog is a must read) said this: "A few more days at the current pace would likely get us to the point where some central bank action may be required. It is equally possible that the global central banks will do nothing and the Euro makes a beeline to 1.10. That approach will end badly as well"

Despite repeated denials, this will not end until something very forceful is done to restore confidence. I honestly thought that Greece's aid package would be enough to calm the markets.. I was, so far, overly optimistic.

Update 7pm:

I "sold" the Euro at $1.3316; today's close was $1.2824, for a profit of $4,920.00.
I have now "sold" a copper contract at $3.1380; I'm putting a five cent stop loss on this.