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A very frightening man with a very funny hair style…

News that the ETA military leader Mikel Garikoitz Aspiazu Rubina , known as “Txeroki” had been apprehended in France was headline news across the continent with Spanish Prime Minister Zapatero heralding the arrest a “severe blow” to the separatists.

The ETA has waged a smoldering terrorist campaign in Spain since the Franco regime ended with frequent violent outbursts. Since July the ETA is suspected of 3 car bombings, including one at a military academy in Santona that killed a Spanish Army officer on September 21st and one in a university parking lot in Pamplona on Oct 30th that injured 15 students. Despite the capture the IBEX continued to decline throughout the day session closing lower by 330 points or 3.77% pulled down by concerns over the gloomy prospects for a recovery anytime soon. Banco Santander, Spain’s largest financial institution fell by more than 6%.

We have followed the Spanish market closely this year and were short EWP, the Spanish ETF, during the spring as the housing market crisis there began to accelerate. We continue to keep an eye on the Spanish market, looking for signs that matter on the margin. This one certainly didn’t.

Andrew Barber
Director