Greece x 5

No biggie. Just because Greece has 5x the amount of debt a little country like Russia had when their currency collapsed or 2.5x that of Argentina when it went under, rest assured the European Union has a plan to save Spartans from having to use drachmas again. I still can't quite comprehend the Crameresque market philosophy of celebrating the potential bailout of a crisis we didn't know about 2 weeks ago. Yet the markets rose on the rumor of a nebulous plan to save Greece from financial ruin.

Good thing the rest of Europe is in such stellar shape. Spain only has 20% unemployment. I don't know it that's a real figure, or a figure like the one we use when we say 9.7% if you don't count workers who have given up, underemployed workers, workers who have taken pay cuts to keep their jobs.....But I'm sure Sarkozy and company will do what's wrong, enhancing Western debt to even more unprecedented levels. The euro has been sinking fast as a result.

As I have mentioned recently, the costs of long term options have been borderline outrageous. With this in mind, all of Europe quickly becoming a danger zone, mortgage repurchases drying up in March, stimulus wearing off, and snow dampening an already soggy economy, I have opted for shorter term puts on the NASDAQ (QQQQ), buying the March 42s. Longer term I am looking at Citi 2012 $2.50 calls. This may seem in contrast to my previous statement, but the huge liquidity in this stock serves to keep costs low, and half of the premium is baked in. If Citi can make some token attempt to pay back the government, the stock could rise significantly. The downside is limited of course by the bailout itself and all of the implicit guarantees to our larger institutions.

Taleb recently spoke about his high-risk allocations. They would include shorting the S&P vs. gold (basket of metals), shorting short-term treasuries "as long as you see the faces of Summers and Bernanke," and OOM hyperinflation bets or European collapse. Shorting the euro seems very logical, but get in line; premiums on FXE puts are huge. Interesting to note also that the Chinese have made huge purchases of USO and GLD. Glad that we own these as well.

A good reminder of getting back to our core beliefs, as the Colts and Peyton Manning choked in yet another big game, losing by two TDs. Our game, however, is far from over.