long ZSL, closing VZ covered call position

So many commentators continue to espouse that severe inflation is logically a given, however with increasing job losses, decreasing average earnings, and falling prices in most goods and housing, we see only the present reality of deflation and no indications of any near-term inflation.

We also notice that gold has sold-off rather than rallied recently, and if there's no rally on extremely bullish news we conclude the path of least resistance is downwards.

Thus today we go long ZSL, the "ultrashort" silver ETF, last at $11.65 With this holding, we realize double the inverse move in silver. We are among the very few, if not the only ones, who believe silver will go much lower, perhaps under $10, thus with a double-inverse position via holding ZSL the potential gain is very compelling. Should this not move in our favor, we'll consider taking a loss if ZSL begins closing under $10.


Verizon, VZ we purchased in July 2008 at $35.43 and sold calls against this position in December for $1.53 Those calls, April $40, are effectively worthless currently, last offered at $0.03 thus we'll buy the calls back at some point in the near future to close that obligation and secure the reduction in our effective cost for the original shares. Our effective cost will then be $33.93

The stock last traded at $30.22 and has proven resilient over the time we've owned it, however it remains in a down-trend begun in Ocotber 2007. We hope for better luck soon with this position.




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