Jaws

by Larry Levin

It's a beautiful day on the ocean. The sunlight is warm on your skin as it reflects off the water. As you're reeling in a fishing line you notice the scent of diesel fuel in the air. You're on a large fishing boat, which gives you a sense of security; to wit you confidently tell yourself "I'm safe here."

Later you move to the aft of the fishing vessel to chum the water. After all, you're a hunter in search of large prey - you're hunting Carcharodon carcharias. It's quiet and the other men on the vessel are doing nothing much of importance - yet. The water is lapping against the side of the boat like a hypnotic metronome. It's so peaceful it could put you to sleep were it not for something that catches your eye in the water. Something large.

The Carcharodon carcharias that you are hunting is here. The great white shark breaches the surface to eat the chum you had so confidently thrown into the water only moments ago. In a microsecond you know you're in trouble - deep trouble - as your body reflexively snaps your spine backward away from the monster in the water. In complete wide-eyed shock you stare into the once-calm ocean looking at the boiling blood-red sea where the shark had been and wonder if the hunter is now the hunted.

In a state of silent shock you slowly march backward and quickly find yourself next to the captain of the ship and the only thing that you can bring yourself to say is "We're gonna' need a bigger boat."

The scene above is how I remember the 1975 classic "Jaws." If you change the actors, I believe one could reasonably say that this happened to the Europeans sometime Thursday evening when the Euro currency was slammed to new lows. The European Union is the vessel Orca that eventually becomes a floating pile of driftwood. The hunted are the so-called renegade "speculators" that have now become the hunters.

Although you may have a better person slotted as Chief Brody, I just cannot get the picture out of my head of Nicolas Sarkozy having a seizure when he realized the near $1 trillion bailout of the banks and Euro currency had failed and thought "We're gonna' need a bigger bailout." The banks of France alone are owed nearly $1 trillion; never mind the debt owed to the German banks and the others.

Gordon Brown is Captain Sam Quint: dead. As you know, Gordon Brown recently resigned his post as British Prime Minister. (Yes, I know England is not in the EU but he felt the same pressure and the speculators are on the heels of the massive debt of the U.K.)

Finally, I suppose we could say that Matt Hooper's character is being played out by Angela Merkel. Like Hooper, she'll get beat up a little in the fray but come out alive in the end.

Whatever the actual outcome is, it will certainly be interesting. So grab a bag of popcorn and enjoy the show. The "Financial Jaws" circa 2010 is just beginning.



Previous Day's Trading Room Results:

Trade Date: 5/14/10

E-Mini S&P Trades*
(before fees and commissions):

1) No "Secrets" trades filled today.

2) Algorithm positions (23)

3) “Reading the Tape” positions (27) …combined Secret’s, Algo, & “Reading the Tape” total… +3.75



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