Meanwhile, back at the factory, the spin offs are spinning, the lifestyle’s inspiring, and the character development beats on. Turning to the box scores we see that—much like my life—the market is a tumultuous beast that I am determined to tame. Booking profits all the while.

The S&P 500 gained almost nothing today; it could only muster a minor 4.18 point or (.37%) gain.

Gold took a breather and closed down 11 points to close at 1132 per oz.

Buyers met sellers in a decently orderly fashion. Headlines were light—so much so that the Jessica Simpson interview on Oprah took center stage. I’ve yet to hire Jessica for her starring role in my new epic, The Adventures of Pinky Megiston, but after her daring performance on Oprah, she is definitely on speed dial. She fits the part perfectly: she’s one of the most famous actresses in the world with all sorts of security problems. The first time I saw her, I wondered if I’d ever met someone so beautiful with so many problems. Given her propensity for the spotlight and controversy, it was easy for me to develop an infatuation and eventually fall in love with her. Whether or not our affair is ever consummated in the honeymoon suite of reality, it will reign authentic in the archives of my memory.

Syndication is a girls best friend, right?

Speaking of syndication (blatant attempt to segue from my inappropriate digression), Greece’s syndicated 10-year debt offering may or may not go well, and depending on the outcome, the markets may continue to behave or may roil.

Rating’s Agencies

Here is where it gets tricky. If the ratings agency Moody’s were to downgrade Greece’s sovereign rating two notches—in line with ratings at Fitch and S&P—Greece’s sovereign debt would be ineligible for ECB repo operations when collateral criteria reverts to the normal minimum thresholds (A3/A- or above) at the end of 2010.

From the wires:

“The Greek cabinet will meet March 3 to discuss the additional austerity measures demanded by the rest of the Euro Zone, with an announcement on further budget cuts expected after the meeting. German Chancellor Merkel will meet with her Greek counterpart on March 5. In currency markets, euro sentiment depends on the final shape of Greeces austerity plans.
Considering the Greece story only really caught fire after the last ECB meeting, ECB President Trichet’s monthly press conference on March 4th is a must see. Moreover, the ECB’s three- and six-month special refinancing operations are scheduled to expire at the end of the month. The market will be looking for a bravura performance from the ECB, an institution often characterized as rigid. Real flexibility is needed in the face of unprecedented challenges to the European monetary union.”

Just a few things to think about (besides Jessica’s exquisite form).

And the beat goes on.

As the previously documented sovereign event approaches, the uncertainty that remains draws me closer to the prosperity that will effect the collective consciousness of my readership connection. To further dissect the economic scenario that is playing out, I will offer some thoughts on where things are, what could cause things to reverse, as well as how to best prosper from the sovereign contagion that is spreading like wildfire.

Greece

In my prior post, I outlined the sovereign default risk that we face—somewhere, sometime soon. Several geographies are flashing extremely risky scenarios. Greece is in need of a bailout and they lay on the precipice of disaster if some aid is not found. Any proposal of aid I have seen will not be a solution, rather a band-aid on a broken bone. However, a band-aid could buy Greece some time–which they are in dire need of.

Ireland

Economic woes in Ireland are severe, and they are not being given the focus they require. Further trouble in the place where I kissed the Blarney Stone could be the impetus for the contagion to spread further, causing the market dislocation that I anticipate.

Dubai

Risk in Dubai is priced where it was at the height of 2009. Further trouble and inability to restructure will cause fallout in Dubai—which will affect Europe, which will effect Greece, and the dominoes will continue to tip. Last week in Dubai, I found money dealers paying extremely large mark-ups for physical gold. Indeed, rumors of gold being used as legal tender in Dubai are true. Again we see my thesis substantiated: the risk aversion trade here is not the US Dollar, rather the precious metals–gold and silver.

Spain: The Wild Card

All of the above geographies could stabilize, or with further troubles, could act as catalysts for the contagion to spread quicker than it already is.

I’d note that Spain was a large driver of contagion over the past two years. The housing bubble in Spain was by far the largest real estate bubble compared to anywhere else. They also face a severely high unemployment rate. However, even with all this trouble, spreads on banks in Spain are not showing the stress they should. When the stress of the housing bubble and unemployment rate percolates into Spanish banks, it will be easy for Spain to pick up where it left off. More in need of a bailout this time, Spain will contribute to the strain in Europe, affecting Greece, affecting Ireland…tip, tip, tip.

All That Glitters

Though the catalyst remains uncertain, the looming event is undeniable. Remember, when the entire universe lunges to take risk off the table in a reaction to what I anticipate, gold will stand, glittering amidst the debris. I’ve said it once and I’ll say it again: if you don’t own gold, you should.

And the beat goes on.