Inspiration

We're close to option expiration. And markets are rallying.

• Solar leader First Solar getting crushed on accounting worries and declining margins... now at four-month low.
• China rebounds overnight... up 4.5%.
• Natural gas trading... near seven-year low.

• Big Pharma leader Wyeth reaches another new high... up 26% this year

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A reader writes a letter

This is a classic.
From the FT letters page

From Mr Eric Keetch.

Sir,

In a sleepy European holiday resort town in a depressed economy and therefore no visitors, there is great excitement when a wealthy Russian guest appears in the local hotel reception, announces that he intends to stay for an extended period and places a €100 note on the counter as surety while he demands to be shown the available rooms.

While he is being shown the room, the hotelier takes the €100 note round to his butcher, who is pressing for payment.

The butcher in turn pays his wholesaler who, in turn, pays his farmer supplier.

The farmer takes the note round to his favourite “good time girl” to whom he owes €100 for services rendered.

She, in turn, rushes round to the hotel to settle her bill for rooms provided on credit.

In the meantime, the Russian returns to the lobby, announces that no rooms are satisfactory, takes back his €100 note and leaves, never to be seen again.No new money has been introduced into the local economy, but everyone’s debts have been settled. Is this “quantitative easing”?

Eric Keetch,London W4, UK

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Someone want to buy a house in Spain?

Can you stimulate an economy with a printing press?
Japan is trying it for almost 19 years now, so the answer is obviously: ‘no’.
Printing money is issuing debt. And printing more debt cannot reverse a debt bubble until market forces have run their course.
The trend for this very moment is deflationary. And almost all asset classes are down, because the economy is readjusting.
Not only in the States, but everywhere.

From Reuters:

MADRID, June 16 (Reuters) - The number of houses sold in Spain fell by 47.6 percent in April compared to a year earlier, marking the largest percentage fall in 16-straight months of decline, the National Statistics Institute said on Tuesday.The fall in April sales to 29,217 units compared with a decline of 24.3 percent in March versus the same month of 2008, which had been the smallest fall in 11 months.


Moody’s downgraded 25 Spanish banks last Friday.
The unemployment rate in Spain is now 17.4% and is expected to go higher. The non-performing loan rate is still going higher: from 3.3% in December 2008 to 4.27% at the end of March 2009.

The Ronaldo effect?

Now what about this ad, back in the UK:

DON’T MISS OUT ON THE OPPORTUNITY OF A LIFETIME

UK house builder Taylor Woodrow de España, the only major UK house builder in Spain, discusses why the time is now right to purchase a home in Spain as the current climate makes purchasing the home of your dreams possible.
Victor Sague, Marketing Director of Taylor Woodrow de España comments: “For many months consumer confidence in the property market has been dented and quite frankly who can blame house hunters becoming subdued when it comes to making possibly the biggest investment of their lifetime.
However, at this moment in time we are currently seeing a number of people returning to the market, anxious not to miss out of some of the excellent deals that are currently available both at home and abroad.
Victor continues: “With the market looking brighter, this will of course add inflationary pressure onto house prices, the moment confidence returns. Indeed, house hunters that are unable to move quickly will know doubt miss out on the chance, of possibly their lifetime, to buy at the bottom of the market.

Indeed :-), plenty of houses over there now. We're not in a hurry

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