The Euro Breakup now my base case

The past few months have left me disillusioned. European politicians fail to grasp the severity of the crisis at their hands, much less comprehend basic economics. German politicians have made it abundantly clear that they are against Eurobonds, the last best hope of saving the Euro. What’s under way right now is a full-scale market run on the much larger economies of Spain and Italy. 


My base case is a Eurozone breakup. I continue rotating out of long stock positions. Trade ideas I have implemented in the last few weeks (ETF ticker in parenthesis):


Key conviction ideas:

• Long the long end of the Treasury curve (TLO; LBND for a more aggressive posture)
• Short financial stocks (SEF)
• Short Euro currency (EUO for leveraged short)
  
  

Conviction ideas:

• Short oil (SCO) on slowing global economic growth
• Long gold (IAU)
• Minimal overweight in emerging market bonds (EMB)