Baltic Dry Index. 702 -24
LIR Gold Target by 2019: $30,000. Revised due to QE programs
The Compagnia dei Bardi was a Florentine banking and trading company which was started by the Bardi family. The Bardi company was one of three major Florentine banking companies (called "super-companies" by some modern scholars) that assembled large amounts of capital and established wide-ranging, diversified business networks, doing business throughout the Mediterranean and in England. The Bardi traded oil and wine, and had close economic ties to southern Italy and Sicily. Their chief product, however, was high-quality woolen cloth. The Bardi were the largest of these super-companies, however, and seem to have been 50 percent larger than their closest rival, the Peruzzi company.
In 1344, at about the same time as the Peruzzi company, the Bardi company went bankrupt and the Florentine writer Giovanni Villani blamed this on the repudiation of war loans by King Edward III of England
They came, they talked, they argued, they lied they dithered and then they feasted, Europe’s joke of what passes for leaders in the 21st century, met in strike torn Brussels yesterday, and agreed a new version of the Maastricht Stability Pact. The new one is supposed to be more effective than the old one. Of course everyone knows that if Germany or France chose to ignore it citing a vital national need, the new one will be as effective as the old one. This is Europe after all. The land between the Urals and the Atlantic made for liars, bureaucrats, and tanks. We open with the results from Europe’s umpteenth “leaders” summit. Bismarck and Churchill it aint.
"When it becomes serious, you have to lie"
Jean-Claude Juncker. Luxembourg Prime Minister and president of the Euro Group of Finance Ministers. Confessed liar.
JANUARY 31, 2012
Europe Tightens Fiscal Ties
Leaders of Euro Zone Agree on Closer Union; Still No Deal to Reduce Greek Debt
BRUSSELS—Leaders of 25 European Union governments agreed Monday night on what some billed as a historic pact to move to closer fiscal union and signed off on the details of a permanent bailout fund for the euro zone—yet Greece's looming debt restructuring threw a shadow over the summit.
The leaders discussed Greece but provided no further clarity on the eventual outcome of an issue that was creating increasing nervousness in financial markets Monday.
European stocks fell Monday and the euro lost ground against the dollar, while Portugal's borrowing costs surged, with the 10-year government bond yield reaching euro-era highs. The summit ended after markets had closed in the U.S.
In a joint statement, the EU leaders noted "tentative signs" of economic stabilization in Europe but said financial market tensions continue to weigh on the economy.
The final shape of the deal to reduce Greece's debt is still unknown after months of wrangling between the Greek government, representatives of bondholders, and officials from the EU, the International Monetary Fund and the European Central Bank.
----One question the summit didn't address: whether official creditors, such as the ECB, will also be needed to reduce Greece's debt to levels that it is likely to be able to sustain in the long term.
After the summit, Greek Prime Minister Lucas Papademos met with other senior European officials, including Jörg Asmussen, the German representative on the board of the ECB. Officials said the talks likely concerned conditions to be imposed on Greece so it can receive its new loans. But afterward, Luxembourg Prime Minister Jean-Claude Juncker, who attended the meeting, said it yielded no conclusions.
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In other European news, get ready for a Portuguese bankruptcy. Mr. Market has already moved on from Greece and is in the process of rolling up Club Med. Three year government debt is at 25%. Get ready for a Friday night massacre. Stay long gold and silver, fiat is unravelling.
We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable.
Alexander Solzhenitsyn
Portuguese storm gathers as EU leaders fight over Greece
Surging borrowing costs in Portugal have raised the spectre of a second full-fledged contagion crisis in the eurozone, eclipsing the latest efforts by European Union leaders in Brussels to agree on Europe's bail-out machinery and a strategy for Greece.
Yields on Portuguese 10-year bonds hit a fresh record of 17.38pc on Monday even though the country is already shielded by a €78bn (£65.2bn) package from the EU, European Central Bank (ECB) and International Monetary Fund "troika" and does not have to tap the markets this year.
Reports also emerged on Monday night that European banks were gearing up to ask the ECB's emergency funding scheme for up to twice as much in funds as the central bank supplied in its debut €489bn auction last month.
The news reveals the extent of the liquidity squeeze on banks – with some chief executives looking to tap the ECB for up to triple the amount they originally borrowed, when the three-year money auction takes place on February 29.
The funding facility was launched in December last year to stave off a second credit crisis – with €230bn of bank bonds due for repayment in the first quarter of 2012.
Equity markets fell across Europe on Monday, with France's CAC and Spain's IBEX both down 1.6pc.
Santander Net Slumps on Real-Estate Charges
By Charles Penty - Jan 31, 2012 8:24 AM GMT
Banco Santander SA (SAN), Spain’s biggest lender, said fourth-quarter profit plunged as it anticipated tougher rules on recognizing real-estate losses at home and earnings declined in the U.K. and Brazil. (SANB11)
Net income fell to 47 million euros ($61.9 million) from 2.1 billion euros a year earlier, the bank said in a filing to regulators today. That compared with the average 1.78 billion- euro forecast in a Bloomberg survey of 10 analysts.
Santander and other Spanish banks are under pressure from Mariano Rajoy’s new government to recognize more losses on building land and apartments that have piled up on their balance sheets as a result of the country’s real-estate crash. The lender booked 1.81 billion euros in charges for Spanish real- estate provisions and a 600 million-euro goodwill charge at its Portuguese unit as profit sagged in its biggest markets.
“People do want to see these risks provisioned for properly and the sooner the better,” said Daragh Quinn, an analyst at Nomura International in Madrid, referring to the bank’s Spanish real-estate assets.
Next, how safe is it to use Deutsche Bank as a counterparty? The assumption is that the Bundesbank stand behind them, ready and able to recapitalise them if they were to go the way of Lehman, but supposing their troubles were down to outright fraud? Would the German taxpayer really bailout German peddled American fraud? Maybe maybe not, it depends on how dumb we think the German taxpayer is. Below Der Spiegel on the deepening troubles of Germany’s leading bank. Sounds like another job for the ECB’s LTRO next month. Of course that money is supposed to be lent out by the banks, but with questions over Deutsche Bank and Commerce Bank, SocGen, UniCredit, et al, is any bank in Europe safe to deal with? And just wait till the markets write off Italy and Spain.
"We finished the year, and we reported that we had $17 billion of cash sitting at the bank's parent company as a liquidity cushion. As the year has gone on, that liquidity cushion has been virtually unchanged."
Bear Stearns CEO Alan Schwartz. March 12, 2008. Bust March 17, 2008
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