Not just a funny I Love L”EU”cy episode

Speaking to Lucy in a Paris police station: “The sergeant only  speaks French, and see, this other cop here, he speaks French and German.  And this fellow, he speaks German and Spanish. So the sergeant is going to ask the questions, and we’ll translate them to you” – Ricky Ricardo

Good morning, good Monday, and welcome back to the police station, where you get a free photo and even your fingerprints stored for no charge.

The markets are ripping higher, with the Nasdaq currently up some 3.5%. Why, you ask?  First, there’s some buying because the US consumer is jacked up this holiday season and spending more this season than anybody expected and they were expecting some pretty good spending to begin with.

But more to the point — and I know this will shock you — the markets are likely being driven in the near-term here by the latest “Will-EU-bailout or won’t-they” drama in the headlines. Today’s latest interpretation of the the same situation and options as last week and last month is that the taxpayers in the EU and the US will shift trillions more of welfare monies to the bankers in the EU and the US so that their accounting-control-fraud and outright looting of our economies can continue. Neo-liberalism is another name for it. Of course, if you can tell the difference between the Neoliberal economic, domestic and foreign policies and their Neoconservative brethren, you’re drinking more Kool-Aid then most of us.

Anyway, the real questions for traders are right here — will the EU bailout their banks and if so, will the markets rip higher?  To the first point, I’ve recently shifted my stance from believing that the EU could and would somehow figure out a way to continue to ramp up the borrowing of trillions of dollars from our collective grandchildren to artificially pump up the asset prices and keep the wealth in place for the people who own things and have borrowed lots of money already.  If they are to succeed in doing so, the markets could conceivably be in bull market mode for another year or two.

But while the mainstream media and the elites it covers try to convince themselves that there’s been some sort of “progress” on figuring out who’s grandchildren will be paying the most for today’s free money, I still think that they’ve already passed the point of no return for finding a multi-trillion dollar gimmick.  A month or two ago, the markets and the prices for the bailouts were much more friendly (though to be clear, there’s NEVER a good reason or good time to bailout anybody or any company or any system).

I Love Lucy in financial trouble in Europe

Feet to fire then, what’s my outlook?  While the markets might get a few percentage points of upside in the next few days or so as the mainstream media and/or the markets convince themselves that an EU bailout is likely and will “fix” the economy, I’d expect any actual “formal agreements” for these EU/IMF/ECB bailouts to be met with selling when they finally get here, because even if the elites/bureaucrats come to terms on how much taxpayer money to send to the banks who lent money to the governments of those same elites/bureaucrats, there’s little chance that the respective citizens of those same countries (and here in the US too, don’t forget that we US taxpayers provide the vast majority of the funds that the IMF and ECB are planning to use for any bailouts) are going to let them happen.

As for trading today, I’m holding the bullish positions I created into the teeth of last Wednesday’s declines ride for now. And I’m bidding on some more LPS puts, dated out into March or June of next year ranging in prices that are two dollars above and two dollars below the current quote of $17.  But mostly I’m holding onto my outsized gains from this year and the cash positions I’ve raised up recently to lock in much of said gains.