Tens of thousands marched across Spain because they can't afford housing. Prime Minister Pedro Sanchez tried to pass legislation. Parliament said no. Now Spanish media thinks he might call a snap election for November. Democracy worked exactly as designed and everyone's furious about it.
Sanchez proposed housing fixes. The representatives voted. The representatives representing people decided the fix wasn't good enough. This apparently qualifies as a constitutional crisis requiring mass demonstrations. Imagine protesting because the legislative process functioned.
Retail traders saw the protests and immediately checked Spanish real estate ETFs. Down 0.3%. They panic-sold. Then they googled "what is Spain's currency" because they forgot the euro exists. Then they bought calls on construction companies that don't operate in Spain. Then they posted on Reddit about how they're "playing the volatility." They're not playing anything. They're being played by their own stupidity.
The housing crisis exists because demand exceeds supply and prices go up. This is microeconomics from week two of any undergraduate course. The protestors want the government to fix prices or build more units or ban foreign buyers or do literally anything that makes them feel better. Sanchez tried. Parliament declined. So now he might dissolve parliament and hold new elections where different people will vote no for different reasons.
None of this matters for markets. Spanish bond yields didn't move. The IBEX 35 doesn't care. Real estate investment trusts kept trading in their normal range. But some day trader in Ohio saw "Spain" and "crisis" in the same headline and shorted the euro against the yen because he thinks geopolitical instability creates currency opportunities. It doesn't. It creates losses in his Robinhood account that he'll blame on market manipulation.
The protestors will go home. Sanchez will either call an election or he won't. Housing will still cost too much. And your technical indicators will keep telling you exactly nothing about any of it.
Photo by Anastasiia Nelen on Unsplash
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