Oops, now it looks like Hungary is blowing up!
This is a big concern to me because I just asked "What will be the ‘shot heard round the world’ that sparks the next global revolution" and, wouldn’t you know it – it’s Hungary again! It was also in June (of 1914) when the assassination of Archduke Ferdinand of Austria and his wife triggered a series of events that plunged the planet into World War I. Today Hungary is the first of the Eastern Europe block to step into the economic confessional as a spokesman for Prime Minister Viktor Orban was quoted this morning as saying the nation’s economy is in a "grave situation."
Before WWI, Hungary was the 2nd largest nation in Europe (behind Russia) but the Treaty of Trianon (June 4th, 1920!) carved it up into 7 countries. Modern Hungary has about 10M people and a GDP of $185Bn ($18,500 per capita) so it is not, by itself going to bring Europe down but keep in mind this is EXACTLY where we predicted we’d be last Friday, when I put up the chart of the Cycle of Fiat Currency Failures. So let’s take this seriously folks – next on the list after the baltics is the UK and France and then it’s our turn!
They say those who forget the past are condemned to repeat it and maybe that’s why we are able to stay ahead of the game. Yesterday we became concerned that Obama’s prediction of strong jobs numbers on Wednesday were already baked into the 200-point rally they sparked so I called an end to "short-term, unhedged, upside plays" in Member Chat at 10:04 and we added an aggressive upside play on BGZ that is designed to pay 1,000% if the market falls. We also got more aggressively bearish on our Mattress Plays so to say we’re not expecting a big push on the jobs number is an understatement.
Ahead of the close, I had commented to Members that, even if we get a big pop on the jobs number (need 600,000+), then we would likely short into it - looking for 10,350 at best to settle out but it the jobs come in below 450,000, then "look out below!" Volume was unimpressive yesterday and, even though we benefited from the daily stick save, it wasn’t strong enough to impress us.