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SmackMacDougal
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  • IF YOU BELIEVE IN A UKRAINIAN CIVIL WAR, THEN ... 0 comments
    Mar 28, 2014 10:38 PM | about stocks: SPXL, BXUB, SPY, UWTI, UCO, BNO, FXB, EWU, EURZ, EUO, DRR, EPV, RUSS

    Since a radical group of Ukrainians overthrew a democratically elected government precisely because they did not want to compete in electoral politics, the Russians' military have been amassing on the border of eastern Ukraine, perhaps as a show of force, or perhaps readying to aid Russians who dominate the eastern oblasts of Ukraine.

    Should the eastern oblasts of Ukraine break away from the western ones and civil war follows, it is likely SPY rises as Congress will need to ring up Yellen to buy U.S. bonds that would get floated to buy bombs, missiles, jet fuel and the like.

    Debt monetization, known today as "quantitative easing" leads to rising stock prices, not falling ones.

    If one expects a civil war or Russian incursion into the eastern oblasts, the smarter move would be these:

    • SPXL (3x leveraged, long S&P 500)
    • BXUB (about 2x leveraged long S&P 500)
    • SPY (S&P 500)

    • UCO (2x leveraged, long Crude)
    • UWTI (3x leveraged, long Crude)

    • BNO (long Brent oil)
    • FXB (long GBP)
    • EWU (long UK)

    • EUO (2x leveraged, short Euro)
    • DRR (2x leveraged, short Euro)
    • EURZ (3x leveraged, short Europe)
    • EPV (leveraged, short Europe)
    • RUSS (3x leveraged, short Russia)

    Why?

    1) Britain shall be seen as a safe-haven for Europeans.
    2) Russians shall shut off nat gas to Europe
    3) Owing to 2, more oil shall be needed by all
    4) US equities shall be seen as a safe-haven for everyone already speculating in Europe

    Also, other regions could become safe-havens. Look at South Korea, Singapore, and maybe Australia

    • FKO (South Korea Equity)
    • KORU (3x leveraged, long South Korea)
    • EWS (Singapore)
    • EWA (Australia)

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Themes: ETFs, Ukraine, war danger, Europe Stocks: SPXL, BXUB, SPY, UWTI, UCO, BNO, FXB, EWU, EURZ, EUO, DRR, EPV, RUSS
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