The Wheat From The Chaff...

Poking around on the internet as I attempted to digest another large holiday lunch (high carb today, in preparation for tonight's elbow marathon), I came across the following odd little anecdote in the June 2006 edition of the International Monetary Fund quarterly, "Finance & Development". The writer, one Angel Ubide from famed fund manager Tudor Investment notes that:

The first recorded hedge fund–style investment was a "call option" trade and appears to have occurred about 2,500 years ago. Aristotle told the story of a poor philosopher, Thales, who proved to doubters that he had developed a "financial device, which involves a principle of universal application," by making a profit from negotiating with owners of olive presses for the exclusive rights to use their equipment in the upcoming harvest. Olive press owners were happy to pass on the risks of future olive prices and to accept payment now as a hedge against a bad harvest later. As it turns out, Thales correctly predicted a bountiful harvest, and the demand for olive presses rose. He sold his rights to use the presses and made a profit. Thales's "call option" risked only his down payment. Although he did not invest in fields, workers, or olive presses, he participated actively in olive production by taking on a kind of risk olive growers and press owners were unable or unwilling to take—in the process enabling them to concentrate on growing and processing olives. They made a profit from their work, and he made a profit from his.

(No comment here on the supposed "public service" aspects of Thales' invention - or on the possibility that the Hunt brothers were actually philosophers).

Anyway, one thing led to another, and as I delved further in to the IMF's mag I found a piece entitled, "Argentina's Structural Reforms of the 1990s" and was, being a sucker for a happy ending, immediately attracted by the opening précis:

Argentina experienced serious economic and financial difficulties in the 1980s. Hyperinflation in 1989-90 finally elicited the necessary political consensus for reform. Despite areas of concern, structural reforms implemented in the 1990s have set Argentina on the path to sustained growth.

The one thing that struck me, though, was his failing to mention the tango crisis. Remember that? Of course, we all do. Who could forget the scenes, throughout 2002, of hundreds of thousands of regular folk banging pots and pans in a nationwide cacerolada, demanding access to their bank deposits, which had been frozen to coincide with the devaluation of the peso to almost zero versus the USD after privatization and free trade had made Argentina more dependent on foreign imports than it had ever been in its history. Even more chilling was the soon-to-be regular appearance of Argentina in the list of countries requiring the assistance of charitable groups as the population below the food poverty line rose to over forty percent. Argentina had passed through that philosophical curtain separating the forms from the real.

As it turns out, there was no omission. The article was written in June of 2000. And the author? Pedro Pou, until April 2001 Governor of the Central Bank of Argentina and original champion and participating architect of Carlos Menem's dollarization policy, among other duties.

Check your sources, kids.

Market Timing, Part 2 (Another Nail In The Coffin?)...

In a post on November 9th I expressed how the sudden and unsolicited appearance of news on the "Spanish markets" in the American press, as had happened that day, immediately makes doubts rear their ugly heads inside mine (according to some not unappealling in the least, by the way). Well, it's happened again. The December 14th edition of chronic bull market cheerleader, "The Motley Fool*", mentions the Madrid market ETF, EWP (see new Yahoo! chart in sidebar), as a possible investment candidate, based solely on its stellar year-to-date performance.

The writer also gives a breakdown of the slightly distorted IBEX 35 proxy created by the issuers of EWP with their representative stock selection. Evidently the stocks chosen are the ADR's available in the the United States and their weightings are probably exagerrated to some degree. She however fails to note that this overweighting, accompanied by the fact that the two big electric utilities included - due to takeover offers and defenses against the same - have risen two or three times as much as can be explained by market action, explains why the fund has outperformed the index handily for the last twelve months - and probably provides good reason to believe that it won't continue to do so.

In Motley's normal giddily optimistic editorial style (which effectively nullifies its religious adherence to the policy of outlining of the risks involved in an investment) and bolstered by the commentator's Rytalin-craving analysis, the conclusion can be reduced to, "Yeah, Spain! Why not? Let's take a flyer! Can you drink the water there?".

Incidentally, when the November 9th item appeared the IBEX 35 closed at 14,111 points, from which level is has risen as high as 14,387, fallen as low as 13,846 and closed today at 14,160 - giving us a slightly negative general profile and marginally positive outcome to date. The currently mentioned article, in conformity with its overall more go-get-'em tone, appeared on the day the IBEX 35 marked an all time high close of 14,351 and the day before it hit the historical maximum of 14,387 mentioned above. Its minimum 5:35 PM value since then has been 14,066.

I've placed little markers on the chart above to immortalize the two dates (and my remarks, of course). If you click on it, you can see it full size.

*The Motley Fool requires free registration, which will generate a certain number of encouraging, or even inciting, e-mails in your inbox. The welcome letter, however, gives you the option of "unsubscribing" without limiting your access to the site - and they respect your wishes.

Too Many Chiefs...

...and not enough Indians. So goes the old expression used to describe the command structure behind a chaotic organizational situation - in the case of this country the total lack of judicial control over municipalities and their construction codes. At the root of the problem is the sheer number of city halls in Spain and the attendant tradition of giving them almost absolute liberty in the making of decisions. They are almost sacred in the hearts of spaniards and there are, to be exact, eight thousand one hundred and nine of them in the country and, if you start from the smallest (seven residents including mayor), you have to go through 6,563 of these fiefdoms to reach a sum of inhabitants equal to the combined populations of Madrid and Barcelona.



If you are really interested you can download an entire 1.3 gigabyte spreadsheet of Spanish population stats from the I.N.E. here.

Felices Fiestas...

Appropriately, we saw the first snowfall of the year while driving down to the warmth (of all types) of the coast on Friday. Happy holidays and thanks to all who've stopped by to read a page or two.

CB

Sink Or Swim...

We were in Almería, directly south of here on the Mediterranean, to visit Ana's ailing folks during last week's super five-day Spanish long weekend (productivity? No problemo, Arnold!). Among the interesting things that caught my eye were: 1). All winter gear being on sale at reduced prices at the clothing stores, 2). The unseasonably warm weather, even for this place where people won't step out of their igloos when it gets below 12ºC, and 3). A guy that looked very much like excellent contrarian Big Picture blogster, Barry Ritholz, attempting to swim south to Morocco from the beach at El Zapillo in lusty defiance of a desert gale. I got a shot of him, too. It's on the left.

During my visit I also noticed that the geologically measured short-term threat of global warming is possibly on the verge of being taken seriously by the man on the street, at least as I was able to garner from the sports pages of several European newspapers. It apparently is the continent's warmest winter in the last five hundred, twelve hundred and fifty or thirteen hundred years, depending on the source. And it does follow hard on the heels of the recent summer in which a record heat wave evaporated the vacations of a large number of French citizens of child-bearing age by hospitalizing (to be kind) their parents while they themselves were out frolicking with their 1.2 children. This year we're again talking about pissing up leisure time - Christmas ski holidays in this case. These would be liquidated. No?

In the context of my current life as olive farmer, what takes place in Almería is of particular interest to me because of the anomaly that dominates the climate of that province - much of it being a true desert. If you recall Peter O'Toole climbing sand dunes astride a camel in "Lawrence of Arabia", Baron Munchausen's castle set on its palmless beach or Clint Eastwood coldly snapping out his six-shooter to confront evil in titles like "Hang 'em High", among countless others, you'll know what I mean. They were all shot within forty kilometers of the city. As you proceed north from the coast and pass the desert of Tabernas annual rainfall starts to increase slightly. But it's not until you reach the Sierra de Cazorla - my turf - that it actually becomes sufficient to sustain any agriculture beyond the growing of almonds. Here suddenly, the matter changes. This mountain range is oriented north-south, perpendicular to the humid winter winds coming up the Guadalquivir valley from the Atlantic, and the attendant cooling on their ascent from four hundred to two thousand meters forces them to discharge their load of water molecules. Historically, this area has been among the wettest in Spain for this reason. But recently the pattern has changed. Eight of the past fifteen winters have been classifiable as droughts, with two of them (the last being 2004-05) being absolutely desertic. And it looks like this is in the process of repeating itself this winter. So far, rainfall is about one-third of the expected. It is not as if there are no clouds, mind you. But they just don't leave much in the way of precipitation and a look at satellite maps shows fronts routinely being diverted northward by a persistent high pressure zone about fifty kilometers before they get here. It seems that the north African anticyclone that has historically hovered resistant over Almería and parts of Murcia is expanding northward, and we are first in the line of fire.

The fact that coverage of the issue is assigned to accompany the endless laments over the sorry state of Real Madrid unfortunately shows the insignificant position this tendency holds in the public view of future threats to their way of life. The regularly performed and duly reported public opinion surveys don't yet seem to include water supply as one of the selectable options, instead opting for the perenial top three: unemployment (virtually non-existent in real life), terrorism (understandable, I guess, though overrated) and immigration (definition? almost daily TV images of colourful wooden boats full of thirsty Senegalese grounding on the sands of the Playa de los Cristianos in Tenerife). The real economic and political, not to mention environmental, monster lurking on the Spanish horizon is that of the water shortage. Already reaching disastrous proportions in Murcia, there perhaps being some truth to the rumours that there is big money being made in the diversion of piped-in H2O before it reaches the region's cities to nourish the burgeoning golf course/resort industry, the problem is now extending itself northward to the olive groves of Jaén. Yet the closest thing we see to will to confront this issue on the political level is the recent passing of control over watersheds and water resources to the autonomous communities from Madrid, leaving the regions to fight it out amongst themselves in the event that the going gets rough. This would be public policy at its best, derived directly from the adage that provides the title for this piece.

The Holiday High Life...

The U.S. dollar has finally, it seems, dislodged most of the shards of turkey bone that got stuck in its craw over Thanksgiving and gasped its way back almost to the 76 cents that it tumbled from late last November. Dollar bears will be watching this as a possible resistance value. Gold, as we would expect, also reacted and has now fallen over 4% from its festive peak. And the stock markets? All, including my beloved IBEX 35, are at or above their pre-fright highs. Business, apparently, as usual. The IBEX, which managed to shed over 5% over a week and a half, closed Friday at 14,387 - a historical maximum for the index. Behind it all? - well, Telefonica really. When the sleeping beauty of the Spanish market finally woke from her long swoon at the end of September she found herself mighty thirsty, not having tilted an elbow since late 2004. Imagine her joyful reaction when her recently serene, and very dry, highness found the waters of liquidity actually lapping at her bed springs. End result - TEF up just shy of 20% in ten or eleven weeks and eight points since the Thanksgiving lows. On the stumble, lots of money would have transferred out of the movers and shakers of this year's rally and into the long-awaited-one. Enough of these John the Baptists, already. One has to keep in mind that, at the heights of 1999-2000, Telefonica came to comprise (if my memory serves me) almost 35% of the value of the Ibex, but currently sits in second place with a weighting of around fifteen. (Source: www.sbolsas.com.)

This rapid recovery notwithstanding, I am going to stick to my guns. As I implied in previous posts (1 and 2), the event or events that will make this market decide that up is not the direction to be heading will originate in a not expected location or from a thought-be-discounted threat and, if at all possible, on the least likely of all days. The dollar still holds that potential, by the way, as Thanksgiving is not even being given credit for being a warning shot.

A confession: Previously, I made the the offhand remark that among the side effects of, if not the actual reason behind, the helping hand lent to Iberdrola by ACS's president, Florentino Pérez, was the further stifling of European economic integration. I take it back. Iberdrola announced it is in the process of fattening itself out of takeover target status through the purchase of Scottish Power, possibly thinking that their white knight from the construction industry is only it for the buck to be made. For fans of renewable energy, this move places Iberdrola near the head of the pack in that field, although still third-largest electricity generator in Europe.

A Modest Proposal...

If you are currently writing a blog that deals with financial markets and you want to sound savvy, you have to occasionally drop a line that includes a phrase like "the carry trade", following it with references to "liquidity" or "fiat currency" and possibly predictions of a global financial crash. It has the same effect as being at a party and starting a sentence with, "Paris Hilton told me...". But before you try this at home, you should know that for this tactic to work the expression you're using has to be recognizable or even commonplace - yet, at the same time, little understood or actually beyond comprehension (don't take offence, Paris). Expressions like "backwardation" or "contango" don't work, because they lack the first of the two necessary elements and exhibit the second for that reason only. Trying it with either of those would have the same effect as suddenly overcoming your shyness and speaking in Hutu. A no-go, in other words.

So I'll just quietly slip those two magic words in right here and see if any of the ladies present take notice. How about you over there with the red pumps. Are you into f-f-finance, Sweetcheeks?

The carry trade (as everybody's mother knows by now) involves the borrowing of money in a low interest rate currency - the Japanese yen comes to mind for some reason - and reinvesting it in one that pays for money like it actually had some worth. The favourite of many is the Lilliputian* grunt. It's called the carry trade because you pick your newly-borrowed stack of sawbucks up at the Nippon Bank on the even-numbered side of the street, scan for the nearest pedestrian crossing, and carry that suspicious-looking Carrefour bag across to the Milendo Savings & Loan on the odd-numbered side, open a savings account and pocket the difference in the rates. Presto! Free money!

Well, being as I am, I'm not satisfied with just being able to unobtrusively have this phrase fall from my lips while talking about the weather with other olivareros in the town square. I want in on the action, and I've found out how to do it! The trick is this: 1). I deliver a few thousand kilos of olives to the co-op (this is essential). 2). I show up at the mill office a couple of days later and say, "I want my anticipo and I want it to be paid into my account at CajaSur". At which point they smilingly print me out and sign a piece of paper stating that I have x-number of kilos of olive oil stored on their premises for which they are willing to guarantee a loan of up to x-euros, representing around 80% of its current value. 3). I take this promise to said financial institution, sign over that amount of money from whatever the co-op pays me next fall and take delivery of my newly updated bank book. I've just been loaned 20,000 euros, say, at the usurious rate of 0.50% and for the sole reason that I am an olive farmer. 4). I go home, fire up my spam magnet and electronically carry the money across town to my account at ING Direct which is currently doling out a super cushy two-point-six-five. Presto! Free money for Carlitos, too!

The arithmetic of the whole thing may totally defy me, but I certainly know now why everything that can't be made in China - such as houses, common stocks, works of art, olive groves or even the government debt of solvent states - is priced beyond the reach of mere tiny folk. Its 'cause they're giving away bank notes in Tokyo and Zurich. Oh, another tip - after uttering those seductive words for the first time you should thereafter only refer to it as the "yen (or other cheap currency) carry". But everybody knows that.

*Explaining why they ask for the receiving account's SWIFT code when you transfer funds internationally.

European disUnion...

I've been following with all too keen interest the story of the Russian spy, Alexander Litvinenko, recently microwaved with polonium-210 by person or persons unknown - but various suspects come to mind. Well, who hasn't? For all its horror it holds at least the promise of a new book from John Le Carré and, with that, the return of a more familiar and better world - that of the Cold War. Now why would I make as preposterous a claim as that? Well, I'll leave the answer to fund manager Dr. John P. Hussman. In the September 10, 2006 edition of his weekly market commentary (highly recommended by this punter, by the way), he recalls a joke from his academic days. It goes, "Why are the disputes in academia so fierce?” The answer – “because the stakes are so low.” In a nutshell - people get real testy with their neighbours when risk disappears from the scene. (And if one thing characterizes current relations among members of European Union, it is testiness.) One look at the list of fifteen "Global Stress Points" compiled by risk advisory firm Aon Corporation and reported in another of my favourite reads, Capital Chronicle, places "oil price shock" as number one, followed by "avian flu pandemic". Among the other possible sources of global chaos that apparently stand out in the new world order environment are: "financial collapse in the Philipines" and "sovereign default in Argentina". Always the typical armchair critic, I want to know why they overlooked "repeat of last year's locust plague in central Africa".

Compare this silliness with the scene on October 11, 1960 when Soviet president (for those who missed out on all that) Nikita Khruschev in a propagandistic rage bent over and removed one of his shoes during a United Nations debate and began hammering his desk with its heel to drive home his point that America was an imperialist nation. If you are as impressed by that display as I (and the rest of the world) was at the time, consider the effect of the night two years and nearly two weeks later that the Butler family, including their nearly eleven year old younger son, found itself perched breathlessly on the leading edge of the basement sofa to watch the black-and-white television image of John F. Kennedy at his charismatic best stare down the Russians and their plan to seed Cuba with nuclear weapons. That was risk.

Now draw a straight line to present-day Europe. Back then, the not yet fully formed European club (will it ever be?) was still known as the European Common Market. The second world war still made its presence felt throughout Europe in the form of bombed out buildings and American troops, ships, airplanes and nuclear warheads aimed at Moscow stationed throughout the continent. The possibility that the Soviets, brought at least temporarily to a halt by the display of fire and death staged in Dresden, would continue westward was thought to be ever-present. And the governments and people of western Europe? It was nose to the wheel building some sort of political and economic structure that would prevent a recurrence of those two twentieth century wars and which would provide adequately for their citizens whilst developing an economic mass large enough to avoid eternal dependance on the United States, the grand victor of those conflagrations.

Today, a decade and a half after Gorbachev signed the U.S.S.R.'s death sentence, Russia again finds itself in a position of no small influence in western European affairs thanks to its vast supplies of petroleum and natural gas and the high prices they command. And the EU? Incapable (as in the case of the Iraq war, the problem of illegal immigration, the lack of integration of power grids, the proliferation of impediments to cross-border investment, among a myriad of other issues) of acting in unison to provide a secure future for all its residents. Well, Britain gets its oil from the North Sea, Spain pipes in gas from Algeria, etcetera. It's almost like everyone is hunkering down for the day the deal falls apart. And where do the real beneficiaries of this post-war miracle, the voting public, stand? Following the lead of previously front-line Denmark, the purely symbolic and without discernible effect or utility European constitution was rejected by the French citizenry - thus saving Tony Blair from the embarrassment of even having to call the referendum which was sure to come up negative.

Necessity being the mother of invention, the politicians are now jumping on the anti-Brussels bandwagon. Witness one of the few points in which the French left and right coincide - the European Central Bank. Recently anointed saviour of French socialism, Ségolène Royal, speaking in Portugal, made it clear that she wants to do away with the political independence of the ECB because its monetary policy is damaging the French economy - as if lowering rates from the vertiginous heights of 3.5% will accomplish for the French economy what it couldn't do for itself when they were nearly half that. It is possible that there's no surprise here, either. Since its first sixteenth century pact with the Ottoman empire France has regularly and predictably been a thorn in the side of grand schemes to integrate Europe (unless hatched domestically, of course).

Coming up in 2007 are negotiations to renew a trade agreement between Russia and the EU, currently stalled by a complaint originating in new associate Poland. Poland? Hello? But that's not surprising, either. From the beginning, the EC has taken a great risk in expanding beyond the borders created following the end of hostilities in 1945. And the gamble is not economic or administrative, but philosophical. The nurturing of this (or any other) pacifist impulse that created the Union, born of and bred by the horrors of modern warfare, was never really one of Moscow's preeminent societal goals. The first signs of this cultural divide showed up when Germany was reunited and the Federal Republic found itself with the task of integrating a society that had not participated at all in western European reconstruction and one that was still plagued by all the racism, prejudice and resentment that had characterized the 1930's in the motherland. Very little had changed on that side of the divide since Potsdam. The same goes for virtually every other former Soviet vassal in one degree or another. They are countries and societies that have never shared the utopian vision that was the impetus behind the EU's formation.

Unfortunately, France also is now finding it convenient to ignore the possibility that the European Union is the institution that has allowed la patrie to enjoy sixty years without a war with one or another of its neighbours for the first time since neanderthals decorated the walls of their homes with hunting prints in Valon Pont d'Arc.

Save us Vlad. We need you.

Will That Be Cash Or Chargex?*...

When I studied economics and political science at university in the 1970's, one of the features that was said to distinguish developed economies from the third world type (a fairly recently coined term at that point) was the fact that the cash transaction was the predominant economic grease in the latter, depriving them of the leverage that credit provided. "Third world" also accurately described Spain's cash economy of the time. To underline the change that has taken place here in one generation, the country's GNP recently surpassed that of Canada. But, despite all this progress, one thing remains true - cash is still king. No one visiting Spain fails to notice the facility with which people slap down fifty euro notes to pay for a couple of beers, and never to the chagrin of the waiter.

Recent data released by the ECB and the Banco de España show that approximately one quarter of the five hundred euro notes in circulation in the EC began their life in Spain as withdrawals from bank accounts. In figures, there are 106 million of these notes hidden in mattresses here. That totals out to 53,000,000,000 euros, and doesn't include the impossible to calculate value of those that have been brought into the country - which has to be substantial, given how easy it is spend them. Compare France. With about one-third more people it has one-tenth the value doing the rounds in large bills. And Germany, with eighty percent more residents has thirty billion circulating.

So what gives? In macro terms, the underground economy in Spain is thought to be equal to about 25% of the reported. That gives us the gross figure, but not the value of the individual note. What does explain it all is that "black money", as it is known here, surfaces predominantly in property transactions. The standard house purchase in Spain involves the payment of the deeded amount in the form of a certified cheque and the rest in cash with no record other than a handwritten receipt. (Imagine the difficulty I've had explaining that to prospective foreign buyers when I've had occasion to intervene). That amount can easily ascend to half the price of the deal given that the officially acceptable values have lagged far behind the real in recent years. So, you've bought a house in town for 120,000 euros, but the deal is that only 80,000 will show on the notary's escritura. It is much easier to carry and count eighty 500's than 800 fifties, if you get my drift. Much of this ease with which money is dry cleaned could have been avoided had Germany not been as much in love with its 1,000 DM note as it is with the autobahn. But now it has reached the point where banks do not have to figure in the picture and with the government now investigating the route that the five hundred takes, they will only slowly re-enter the accounting world in the form of deposits.

One of the side effects, by the way, of this Spanish propensity to hoarde cash is the staggeringly high number of house robberies here. Any dwelling representing a certain level of economic well-being WILL have a safe which WILL have a whole lot of cash in it. Specializing in this are former soldiers from the Balkans who know how to disable your alarm system and are not particularly concerned whether you're in the house, or not.

Along the same line, but to be left for a future edition, is the interesting fact that an abnormally high percentage of foreign investment in Spain proceeds from fiscal paradises. But that's only for people with truckloads of five hundreds.

*1973 ad for the Chargex card (later to be christened Visa), the first consumer-level credit card. When it was launched in the 1960's, the standard limit was 300 dollars and the first one they gave me tanked out at a hundred and twenty. The catch phrase from this campaign made Chargex the "Kleenex" of credit cards, a head start from which number two Mastercharge (later to become... you guessed it) never fully recovered. (Image courtesy www.adparade.com).

Rolling In His Grave...

Afficionados of the grand scheme and the quixotic venture will have noted, and duly respected, the recent 21st anniversary of the death of Fernand Braudel. The great work of this eloquent French historian and romantic economist was, "The Mediterranean and the Mediterranean World in the Age of Philip II", a two-volume, immensely complicated and dense work written by hand and entirely from memory during his stay in a German prisoner-of-war camp in North Africa in the 1940's. First published in French in 1949, the work is a marvel of elegantly and seamlessly deriving the large scale movements of the human saga from the infinitesimally small details of daily life and commerce contained in dusty archives and the anecdotes of travellers' tales - in the process making a mockery of the knee jerk reactions of financial markets to momentarily interesting data releases.

What reminded me of Mr. Braudel was a visit to the website, "The Routes of the Olive Tree", an apparently Greek initiative to celebrate the common culture (clearing of throat from offstage left) shared by the Mediterranean peoples that have cultivated olea europaea for millenea. The amazingly difficult-to-navigate and uninformative website, made even more cumbersome for being written in Flash, centres around annual thematic tours through olive-producing regions - particularly Greece. Several of these excursions are derived directly from the trade routes that are the centerpieces of Braudel's work. Gladly, the writers pay homage to him with with a reference in the section entitled "The Civilization of the Olive Tree" (no direct link 'cause it's Flash - urrgghh, and good luck finding it). The website paraphrases Braudel's introduction with this paragraph: "Coming down from the North towards the South, the Mediterranean begins where we meet the first olive tree and finishes where we meet the first palm tree... F. Braudel wrote, thus defining the homeland of the olive tree. The Mediterranean". Unfortunately however, they got it exactly and precisely backwards. In real life, Braudel defined his geographical area of reference as being contained within the northern limit of the palm tree (specifically and thankfully not including Torquay) and the southern limit of the olive.

This is an interesting and worthwhile initiative and a wonderful way to plan and pass a vacation but... Come on guys, let's get a little serious here! Your website is uncommonly bad!!

Against my will and due to scheduling problems with workers, I began the harvest last Thursday. The pickers (pictured at left) worked their way through about 450 olive trees over the weekend and brought around 13,000 kilos of fruit to the co-op mill. The remaining 1,100 trees will wait for a couple of weeks as the crew navigate their way through conflicting demands on their time.

As I previously thought would be the case, the January contract moved up 9€/ton after the closing of the November contract. It has since stalled and moved back down to around 227€. My good friend Christopher Ortiz - as fluent in this business on both sides of the Atlantic as his name would indicate - thinks that it's heading south in the short term and that 2.15€ would be a good entry point for a long trade on a far out contract - say November 2007. (No recommendation implied).