Something for the Weekend – Grave New World
Some years ago I had a Polish friend called Ola who was living here in London. Her English was excellent so, being in cosmopolitan London, she decided to learn Spanish. The first thing you do when you start learning a language, if you’re serious about it, is to talk to native speakers, and this being London there was no shortage of them. So the conversation would go something like:
Ola: Hola
Spanish Person: Hola. ¿Como se llama?
Ola: Me llamo Ola
Spanish Person: No, no, no, no, no. I am asking ‘what is your name?’
Ola: Me llama Ola
Spanish Person: No, no, no, no, no. I am asking ‘what is your name?’
Ola: Me llama Ola
Spanish Person: No. Ok. Let’s start again. Hola…
Which brings me on to Spain. Well Spain and Portugal. I went to a talk a few years ago by EU Commissioner (2004 to 2010) Charlie McCreevy, who was involved in creating the single currency. He said that at the creation of the Euro many of the countries joining had not in fact satisfied the criteria for doing so. However, politics being what it is, they had found a metric that meant that wouldn’t matter. Although they hadn’t actually met the criteria, they were closer than they had been. Job done. And so the single currency was created.
I didn’t ask a question after the talk because, well, what’s the point asking a politician a question unless you already know the answer? After the talk a friend of mine who is a big wheel in the hedge fund world turned up. I said, “You missed the talk. They were discussing the single currency”. “What do they know? Coming for a drink?” He replied with a cheeky grin. How right he was. Not only about the drink.
So now it seems Spain and Portugal will be fined a percentage of GDP for failing to meet some fiscal targets. Sounds a bit like the reparations demanded at Versailles. It won’t end well. As the richer countries likely follow us and leave the EU perhaps it could end up with just the old fascist nations together – Germany, Spain and Italy. That would be quite ironic. As Eurovision will probably include the whole world by then, why not invite Japan and call it AXIS instead of EU if that happens? Meanwhile I hear Germany is bolstering its armed forces so they’ll be able to take that percentage of GDP one way or another. Greece I suppose will be lost to the mists of time, no longer connected to the EU, after the next Balkan war breaks out, which it certainly will.
Anyhoo, if you were wondering how the IBEX 35 is doing in Spain then the answer is: not too good. It’s not quite as low as it has been since 2009 but it’s at G1 the important Gann level of 50% of the ATH. To be fair, this support level has been broken before so it probably won’t offer a lot of support. The next significant support level is at 6,000. I wouldn’t be buying into this index right now.
On a happier note, My Local has gone into administration. Regular readers will not be surprised. This of course leaves Morrisons on the hook for £20m. I wrote a few times about Morrisons in the spring. I identified the financial problems they were having by simply visiting my local My Local. Empty shelves after days without a delivery pointed to financial problems. This led me to conclude that Morrisons will lose the supermarket wars and become victims of a hostile takeover. I’ll put links to my 4 articles at the foot of this one.
Once again, I’ve shown that you can get great market intelligence by simply being observant as you go about your daily business. And if you see Ola don’t forget to say Hola!
11th November 2015 Supermarkets: Trolleys at Dawn
14th March 2016 Morrisons: Failure and Hostile Take-Over Ahead?
MI Magazine April 2016 Using Fundamentals To Find Failure
25th April 2016 Morrisons, Morrisoff
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