Thank God It's Friday

A new record, a very large and very round number, and a Friday. What a lethal combination - referring, of course, to the announcement from the Instituto Nacional de Estadística that the number of officially unemployed in Spain had breached the 4 million barrier, translating into a rate of 17.36%. Ignoring the possibility that the timing of the release was politically motivated (everything being possible in the long-memoried, backstabbing labrynth in which the Iberian pol lives his day to day life), the weekend pamphlets had a field day with this news - so beautifully timed to coincide with the only period of the week that people actually buy and read the things. And, mirabili dictu, having the most fun of all was El País, offical organ of the governing PSOE... starting with the unusually loving detail with which was covered opposition PP leader, Mariano Rajoy's, Madrid discourse. Among the quotes from the enemy:

We are not witnessing an economic doctrine 'but fear, offspring of incompetence, the fear of one who, having attained his power in a tranquil ocean, finds himself facing a storm for which he is not prepared'.

But the repetition of the beatifully turned phrase, 'offspring of incompetence', was only a preamble to Enrique Gil Calvo's opinion piece which appeared in today's edition. Entitled 'Voluntarismo', referring possibly to some kind of Randian vision of destiny - but more likely to the belief that merely wishing for something is a strategy adequate to the task of achieving it, Sr. Gil notes that Zapatero had described his recent remodelling of the cabinet as: 1). a 'change of rythm', and when that stuck neither with the press corps nor parliament, 2). one of actual 'direction'. And, as if to prove the thesis, the new Minister of Labour, Celestino Corbacho, gave a good verbal shitkicking to the governor of the Bank of Spain (along, incidentally, with the IMF, the OECD and the European Commission) for having the gall to imply that Spain's national accounts could not support more spending. The reader might keep in mind that the victim of the attack was the same figure, Miguel Ángel Fernández Ordóñez, whose sound banking policies had been Zapatero's proudly trumpeted claim to admission to the G-20 not so very long ago.

El País has not, at least in recent years, been a very big fan of Sr. Zapatero, but Gil's uninhibited conclusion may in fact be signalling that, finally, serious rebellion might be afoot within the ranks of the PSOE:

Which is the new tack that Zapatero proposes to imprint on the direction of economic policy? If he follows any, which strategy guides him? What objectives does he seek, how does he prioritize them, what 'shock plans' does he propose, how does he evaluate them...?

And so on. Our guess is that a couple of more months of unremitting bad news and Zapatero's gone.

Turning our attention to the other side of the floor, however, the lead headline of Sunday's print edition of ABC was a quote from PP ex-president José María Aznar - 'With me in the government, the crisis would not have happened'. Is there a Spanish politician who doesn't suffer from voluntarismo? Or, why does the right wing of every country this writer knows always blow any advantage handed to them by a moribund left with this kind of stupidity?
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Family Oriented Content

We recall hearing that the favoured destination for British residential moving companies was South Africa - because they knew that they'd get the return trip within three years. Perhaps Huelva real estate promotor, Geimsa, was thinking along these lines when they came up with their latest offer.

Today's internet edition of El Ideal reports that the agency, located in San Juan del Puerto, hard on the heels of an initially successful promotion in which they would pay the wedding costs of any couple buying a home valued at more than 100,500 euros, is attempting to entice motivated buyers by assuming all the divorce litigation expenses of new purchasers. Minimum price - 68,000 euros.

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New Punt

A friend e-mailed us some recent Citigroup research on Iberdrola Renovables (IBR.MC). Concerning the current prospects for the world's leading renewable energy provider, the following excerpt stands out:

We rate IBR as Buy/Medium Risk (1M). We see IBR as a growth company (EBITDA CAGR in 2007-12E of 30.5%) in an attractive sector. Its income is mainly regulated and its growth is supported by the expected installation of 1.5GW in wind in 2009 and 2010, with 2.2GW forecast beyond this period. We expect c.50% to be installed in the US market. The company's track record and security of supply of turbines (it is 100% hedged for 2009 and 2010, and 80% hedged for 2011 and 2012) make us think these ambitious targets are achievable. Nevertheless, if financial conditions get tougher, the company has announced it has the flexibility to reduce capex by €1bn without significant impact on 2009-10 figures, something we have already factored in our numbers.

Noting that IBR's parent, Iberdrola, is 24% owner of wind turbine manufacturer, Gamesa (GAM.MC), the assumption would be that the latter would be negatively affected by any decision to cut back on capital expenditures on the part of IBR.

We think a coherent argument (related to the picking of poisons, in this case) can be made for putting together a long IBR/short GAM spread. A possible contrarian bonus might be GAM's recent overbought state versus the relative underperformance of the other.

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Adventure World

The Generalísimo Franco - Tio Paco, being an avid hunter, was a fairly regular visitor to this forgotten outpost of civilization until very late in his life. In his latter years, however, trips to his hunting lodge at the Torre de Vinagre (now the 'Interpretation Centre' for the Parque Natural de Cazorla, Segura y Las Villas) were deemed to have been successful if he were capable of shooting an ibex, which had previously been drugged and tied to a tree, from the distance of ten paces.

Given the historical reputation of the protagonist of this anecdote, we assume that the reader will take home with him or herself whatever they might see fit from its telling. But, simply thinking about the self-degrading lengths the moribund with means can go to in order to sustain the illusion of vitality, the writer suggests a comparison be made with a documentary recently shown on some television channel or another.

In the flick, a small group of men were intending to replicate the doomed by weather and lack of supplies voyage to the north pole of some great adventurer - to the last detail of the dwindling and inadequate food provisions. The difference between this expedition and the original - aside from the fact that they forgot the part about dying en route - was not only the presence of the film crew (in itself, worthy of a short post). The team was also visited regularly by an aircraft bearing a doctor.

This writer cannot, at any fundamental level, distinguish between these two ersatz exhibitions. But the latter does make him wonder about the general fitness of the western world to do anything but appear to be up to the task at hand.

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Live To Tell About It

In line with some previous confusion between Christmas and Easter...

Fundamental to this writer's approach to stuff in general is his core belief that what distinguishes humanity from the rest of the known universe is its hard wired necessity to strongarm observations, of even the most inconsequential or resistant nature, into (at least) marginally coherent, but acceptable to the neighbours in form, content and message, stories to share with friends and acquaintances or impose upon strangers - which design feature has produced everything from superstition to gossip to science, and certainly most wars. And any reader that thinks that this is not the most pressing of all claims upon our attention might take note of the number of people that have gone to their deaths and the civilizations that have dissolved into starving, entropic irrelevance rather than admit the possibility of other (or even no) plot lines. Rational, economic man be damned. Homo fabulus names the beast.

Take the sighting of an unexpectedly bright light in a moonless sky in the middle of nowhere. Within our culturally limited experience, this event has been interpreted as follows:

1). In the case of desert dwelling ancestors, as an indication of where the second coming of the deity was taking place;

2). Or, now that the limitless wonders of science must be incorporated into the official prattle, as proof of the existence of a technologically advanced species of extraterrestrial aliens.

Less alarmist and millenarian interpretations are simply not acceptable when night turns suddenly to day - or when asset values, investment strategies, gross domestic products, rates of unemployment, banking system reserves, commodity prices, currency crosses and correlations in general get turned on their heads. After all, we are not talking about having seen the local fruitmonger wearing a green shirt on Tuesday instead of his usual Friday.

In line with the unexpected nature and severity of all the above, we find pundits of all stripes finding confirmation of every manner of previously told tale. For example:

1). The libertarians, milling about the science fiction book bin at their local St. Ron de Paul Society charity store, claim this to be the sign that socialism has ended and that the new kingdom of noble savages entering, unencumbered, into mutually beneficial contractual relationships based on enlightened self-interest is on the verge of being proclaimed;

2). Communists, humiliated and silenced by the collapse of the U.S.S.R., the turning of the moral table on Fidel Castro and the co-optation of the People's Republic, believe they are witnessing the final coming to pass of Karl Marx's epiphany;

3). Environmentalists, hoping against hope that a long lasting and deep recession will do anything but pitch ecological legislation in to the abyss of abeyance, see this as the long promised opportunity to return our relationship with the planet to something similar to that existing prior to the enactment of the Enclosure Laws;

4). Wyoming bunker dwellers, stocked to the roof with guns, cans of bully beef and gold bars, might imaginably be dreaming of the triumphant dawn in which they will stride out from their concrete caves to witness an earth scorched into submission by nuclear winter - but upon which they have survived;

We would humbly suggest that all of these are less likely outcomes than was the Star of Bethlehem itself. Rather, people will (for a time, at any rate) be forced to deal with the fact that the future never really felt itself required to comply with the legend of eternal and costless progress, despite the tongue lashing layed on it by the storytellers of the twentieth century.

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