• Tag Archives Italy
  • Baby boomers are refusing to sell and will age like a fine wine in their homes. The dominant force in the housing market.

    Older Americans own half of the houses in the market. Many are simply refusing to sell and others have adult ‘kids’ moving back in since they can’t afford a place to rent or buy. It is a Catch 22 and many people are looking at countries like Italy where the number of adults that live at home is enormous. Multi-generational families just don’t coincide with the ‘rugged American’ worldview where you go out on your own and you make it with your own two hands. Of course, many house humpers had mom and dad chip in but that doesn’t make for such a sexy story. In the end, however there are many baby boomers that simply are not selling. This is actually an interesting problem that is not going away.
    Refusing to sell
    Housing used to be a young person’s game. The U. S. housing market and to a large extent, the economy was driven by home buying and big ticket purchases. But that has definitely changed since the housing market imploded with the 2000s. It has also changed in terms of people marrying later, having fewer kids, and basically preferring to live in city centers versus suburbs. In other words, not a big need for McMansions.

    This post was published at Doctor Housing Bubble on August 11, 2017.


  • Saint-Tropez – The Billionaire’s Harbor is Empty

    When you impose drastic and excessively high taxes to get the ‘rich’ and their yachts, they just sail away. Saint-Tropez, which was known as the ‘Billionaire’s Harbor’ is just about empty. The yachts sailed off to Italy and Spain abandoning the French Riviera. The local government is pleading with Macron to intervene. They say revenue is already off 30% for boating fees. However, the whole community is feeling it because the ‘rich’ spend money more easily in local restaurants and shops. So the whole economy in South France is dropping very sharply.
    In addition, from people I know personally, they have set sail to Portugal to also escape from the refugee madness. It will be interesting to see what happens to the tourism revenue at the end of the summer.
    Armstrong Economics

    This post was published at Armstrong Economics on Aug 4, 2017.


  • Our European Tour

    Our European Tour this season has been very enlightening including meetings with politicians, corporations and many of the top banks. The concern centers around the ECB having to change policy with regard to negative interest rates. The net result has been to create massive hoarding of cash rather than spending cash for the sake of just spending. The banks were hopeful that a rise in rates will bring the money pouring back in for deposits. The real concern has been that the authorities are hard on the big banks while ignoring the small banks. This is true even in Germany, for the lending on real estate in Europe has been extensive and the credit has been questionable although the lending limit on property is running about 80%. However, the income requirement is not stringent and if rates begin to rise, the fear is there may be set in motion a real estate crisis in Europe similar to the S&L Crisis in the States.
    Clearly, the big concerns have been that all the economic theories are turning to dust. Nearly 10 years of quantitative easing has utterly failed to reverse course and the banks are most vulnerable in Southern Europe namely in Greece, Italy, and Spain. The understanding of inflation has collapsed as has the quantity of money theory and the notion that when interest rates rose, the stock market should have dropped. All of these theories still taught in school have crumbled to dust in the real world and people are more and more reaching out for help and explanations other than opinion. Where’s the research? They say.

    This post was published at Armstrong Economics on Jul 31, 2017.


  • FX Week Ahead: Can The Swiss National Bank Breathe A Sigh Of Relief?

    Is the SNB at it again? EURO-phoria takes off as longer term investors get the nod.
    Having focused on the USD in recent weeks, and how the market has rounded on the greenback ‘en masse’, we can finally look to some exchange rate moves outside of the major spot rates. Sharp losses in the CHF have shown that the big money is taking note of the recovery in the Euro zone, and that investment prospects look good as the smaller member states are gaining traction alongside the power house that is Germany. Last week, IFO economists said they saw little which could derail the domestic economy, including the strengthening EUR, which has traded to a little shy of 1.1800 in the past week, but more significantly, taking out the 1.1711/12 (long term range highs in the process. This led to the ‘follow through’ which saw EUR/CHF shooting up to levels close to 1.1400, having spent a year long slumber inside a 1.0600-1.1000 range.
    More data out next week is expected to confirm the above, headlined by EU wide Q2 GDP on the Tuesday, with updated manufacturing PMIs due out for all the leading states, as well as unemployment data. Focus on Germany will be shared out a little to Spain and Italy, also seeing marked improvement in economic activity. Spanish jobs have increased significantly, and in Italy, industrial orders have taken off, so no surprise for widespread calls for the ECB to rein in their APP, but once again, market forces are threatening to choke off some of this recovery. As such, there is growing sentiment that once the ECB do signal policy change in Autumn, there will be a sense of disappointment – naturally linked to the rampant gains in the EUR seen already. German 10yr hit levels shy of 0.65% a few weeks back, but the moderation of some 10bps or so looks to have been a short lived affair as Bunds took a sharp hit as the regional inflation data out of Germany saw healthy pick up. On Monday we will see whether CPI is rising across the region as a whole, but consensus is looking for 1.3% in the headline, 1.1% in the core.

    This post was published at Zero Hedge on Jul 30, 2017.


  • Leaked: EU Plans to Freeze Deposits to Prevent Bank Runs

    Desperate Times, Desperate Measures. Following a spate of drastic banking interventions in Spain and Italy earlier this summer, the European Commission is preparing new legislation to prevent bank runs from completely wiping out Europe’s hordes of zombified lenders. According to an Estonian document seen by Reuters, that legislation would include measures allowing EU governments to temporarily stop people withdrawing money from their accounts, including by electronic fund transfers.
    The proposal, which has been in the works since the beginning of this year, comes less than two months after a run on deposits pushed Banco Popular over the brink in Spain. In its final days, Popular was bleeding deposits at a rate of 2 billion a day on average. Much of the money was being withdrawn by institutional clients, including mega-fund BlackRock, Spain’s Social Security fund, Spanish government agencies, and city and regional councils.
    The European Commission, with the support of a number of national governments, is determined that what happened to Popular does not happen to other banks. ‘The desire is to prevent a bank run, so that when a bank is in a critical situation it is not pushed over the edge,’ a source close to the German government said.

    This post was published at Wolf Street on Jul 30, 2017.


  • Who Bought The New Greek Bonds: Here Is The Answer

    After triumphantly returning to the bond market three years after it last issued a euro-denominated long bond (which one year later nearly defaulted when only a third bailout prevented Grexit), this morning Bloomberg has provided details of who the lucky buyers of the just priced 3BN bond offering were. And not surprisingly, the biggest source of new funds for the Greek government (which will then use most of this to pay interest owed to the ECB) were US buyers.
    As Bloomberg notes, just under half, or 1.425BN of the 3BN deal was new money with 1.57b of existing paper rolled, with the following geographic distribution of new sources of cash:
    U. S. 44% U. K./Ireland 26% Greece 14% France 7% Spain/Portugal/Italy 3% Germany/Austria 3% Others 3% By investor type:
    Fund managers 46% Hedge funds 36% Banks/private banks 13% Others 5%

    This post was published at Zero Hedge on Jul 26, 2017.


  • Bank Of Italy Warns Citizens Against “Creating Your Own Currency”

    Authored by Louis Cammarosano via Smaulgld.com,
    Citizens Claim Right to Create Scriptural Euros.
    Citizens conjure Euros out of thin air, just like banks.

    Create Your Own Currency!
    Because the top cryptocurrencies, Bitcoin and Ethereum are open source, any one can create their own cryptocurrencies. While the proliferation of cryptocurrencies has central banks concerened, another more insidious and perhaps greater threat to central banks’ monopoly on money creation is the issuance of scriptural euros by citizens.


    This post was published at Zero Hedge on Jul 18, 2017.


  • Recovery? Italy’s Poor Population Has Tripled In Last Decade

    Is it any wonder the Italians are revolting against the European Union?

    Italians living below the level of absolute poverty almost tripled over the last decade as the country went through a double-dip, record-long recession. As Bloomberg reports, the absolute poor, or those unable to purchase a basket of necessary goods and services, reached 4.7 million last year, up from almost 1.7 million in 2006, national statistics agency Istat said Thursday. That is 7.9 percent of the population, with many of them concentrated in the nation’s southern regions.
    For decades, Italy has grappled with a low fertility rate — just 1.35 children per woman compared with a 1.58 average across the 28-nation European union as of 2015, the last year for which comparable data are available.

    This post was published at Zero Hedge on Jul 18, 2017.


  • JULY 17/GOLD RISES $4.20/SILVER UP ANOTHER 17 CENTS/GLD LOSES ANOTHER 1.77 TONNES DESPITE GOLD’S GAIN!!/CHINESE SMALL CAPS CRASH LAST NIGHT/ITALY CANNOT HANDLE ANY MORE MIGRANTS: GIVES THE EU AN …

    GOLD: $1234.50 UP $4.20
    Silver: $16.13 UP 17 cent(s)
    Closing access prices:
    Gold $1234.50
    silver: $16.13
    SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
    SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
    SHANGHAI FIRST GOLD FIX: $1241.75 DOLLARS PER OZ
    NY PRICE OF GOLD AT EXACT SAME TIME: $1231.60
    PREMIUM FIRST FIX: $10.15
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    SECOND SHANGHAI GOLD FIX: $1241.37
    NY GOLD PRICE AT THE EXACT SAME TIME: $1231.00
    Premium of Shanghai 2nd fix/NY:$10.37
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    LONDON FIRST GOLD FIX: 5:30 am est $1229.85
    NY PRICING AT THE EXACT SAME TIME: $1230.45
    LONDON SECOND GOLD FIX 10 AM: $1234.10
    NY PRICING AT THE EXACT SAME TIME. $1234.45
    For comex gold:
    JULY/
    NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 3 NOTICE(S) FOR 300 OZ.
    TOTAL NOTICES SO FAR: 120 FOR 12000 OZ (.3732 TONNES)
    For silver:
    JULY
    51 NOTICES FILED TODAY FOR
    255,000 OZ/
    Total number of notices filed so far this month: 2866 for 14,330,000 oz

    This post was published at Harvey Organ Blog on July 17, 2017.


  • Schaeuble Says Italy Bank-Liquidation Aid Shows Rule Discord

    German Finance Minister Wolfgang Schaeuble joined his counterparts from the Netherlands and Austria in calling for a review of European Union bank-failure rules after Italy won approval to pour as much as 17 billion ($19.4 billion) of taxpayers’ cash into liquidating two regional lenders.
    Schaeuble said Italy’s disposal of Banca Popolare di Vicenza SpA and Veneto Banca SpA revealed differences between the EU’s bank-resolution rules and national insolvency laws that are ‘difficult to explain.’ That’s why finance ministers convening in Brussels on Monday have to discuss the Italian cases and consider ‘how this can be changed with a view to the future,’ he told reporters in Brussels before the meeting.
    Dutch Finance Minister Jeroen Dijsselbloem said the focus should be on E.U. state-aid rules for banks that date from 2013, before the resolution framework was put in place. Italy relied on these rules for its state-funded liquidation of the two Veneto banks and its plan to inject 5.4 billion into Banca Monte dei Paschi di Siena SpA.
    The E.U. laid down new bank-failure rules in the 2014 Bank Recovery and Resolution Directive after member states provided almost 2 trillion to prop up lenders during the financial crisis. The BRRD foresees small banks going insolvent like non-financial companies. Big ones that could cause mayhem would be restructured and recapitalized under a separate procedure called resolution, in which losses are borne by owners and creditors, including senior bondholders if necessary.

    This post was published at bloomberg


  • JULY 10/GOLD AND SILVER REBOUND/FRIDAY WITNESSES AN ASTRONOMICAL VOLUME OF 165,000 CONTRACTS/ITALY AND GERMANY BECOMES OUTRAGED WITH MIGRANTS: ITALY WANTS TO END IMMIGRATION;GERMANY WITNESSES THE…

    GOLD: $1213.90 UP $3.50
    Silver: $15.71 UP 28 cent(s)
    Closing access prices:
    Gold $1214.00
    silver: $15.66
    SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
    SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
    SHANGHAI FIRST GOLD FIX: $1211.73 DOLLARS PER OZ
    NY PRICE OF GOLD AT EXACT SAME TIME: $1211.50
    PREMIUM FIRST FIX: $10.23
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    SECOND SHANGHAI GOLD FIX: $1215.44
    NY GOLD PRICE AT THE EXACT SAME TIME: $1208.95
    Premium of Shanghai 2nd fix/NY:$6.49
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    LONDON FIRST GOLD FIX: 5:30 am est $1207.55
    NY PRICING AT THE EXACT SAME TIME: $1221.30
    LONDON SECOND GOLD FIX 10 AM: $1211.95
    NY PRICING AT THE EXACT SAME TIME. $1209.75 ???
    For comex gold:
    JULY/
    NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 1 NOTICE(S) FOR 100 OZ.
    TOTAL NOTICES SO FAR: 62 FOR 6200 OZ (.1928 TONNES)
    For silver:
    JULY
    61 NOTICES FILED TODAY FOR
    305,000 OZ/
    Total number of notices filed so far this month: 2323 for 11,615,000 oz

    This post was published at Harvey Organ Blog on July 10, 2017.


  • Monte Paschi Wins E.U. Backing for 5.4 Billion in State Aid

    Banca Monte dei Paschi di Siena SpA won formal European Union approval to receive 5.4 billion euros ($6.1 billion) in aid from Italy’s government, removing a further source of turmoil from the country’s financial system.
    After months of negotiations, the European Commission cleared the so-called precautionary recapitalization of a lender that needs state support to survive even though regulators have declared it solvent. Monte Paschi turned to Italy for help after it failed to raise funding from investors in December.
    Italy is struggling to fix a crisis-era legacy of about 313 billion of soured loans that’s holding back credit and weighing on its weak recovery. The government approved a law last year to plow as much as 20 billion into troubled lenders as part of its efforts to revamp its banking industry and break a slump in lending. Last month the government committed as much as 17 billion to wind down Banca Popolare di Vicenza SpA and Veneto Banca SpA after trying for months to find a way to keep the regional banks afloat.
    The recapitalization of Monte Paschi ‘should ensure a turnaround for the lender and should help the whole Italian banking industry,’said Fabrizio Spagna, managing director at Axia Financial Research in Padua, Italy.
    In return for the state aid, Monte Paschi agreed to a five-year restructuring plan that includes changes in its business model and steps to improve efficiency and management of credit risk. It must also sell about 26 billion of bad loans packaged into securities, and impose a salary cap on senior managers. Further details of the plan will be presented during an analyst conference call at 8:30 a.m. local time on Wednesday.

    This post was published at bloomberg


  • Fade the Great Rotation into Europe

    This is a syndicated repost courtesy of theinstitutionalriskanalyst. To view original, click here. Reposted with permission.
    News last week that European Central Bank chief Mario Draghi was considering an end to the ECB’s extraordinary purchases of securities quickly let some air out of the Great Rotation into EU stocks. Sure the euro surged against a weakening dollar, but Europe’s mountain of bad debt remains unresolved – even after the election of Emmanuel Macron to the French presidency. Yet hope springs eternal in some quarters after Draghi’s claim of a successful ‘reflation.’
    ‘All the signs now point to a strengthening and broadening recovery in the euro area,’ Draghi told the ECB’s annual conference. ‘Deflationary forces have been replaced by reflationary ones,’ the former head of the Bank of Italy declared. Draghi’s bull call on inflation provides optimism for relief on excessive levels of bad debt, albeit in a context where the EU’s rules on resolving dead banks remain entirely subjective.
    The July 4 approval of the latest state-supported rescue for Banca Monte dei Paschi di Siena (Montepaschi) illustrates the deflationary challenges still facing Europe. As part of the overhaul, Reuters reports, Montepaschi ‘will transfer 26.1 billion euros to a privately funded special vehicle on market terms, with the operation partially funded by Italian bank rescue fund Atlante II.’ The bank will receive 5 billion euros in new public equity funds for its third bailout in a decade.

    This post was published at Wall Street Examiner on July 4, 2017.


  • Many European Banks Would Collapse Without Regulators’ Help: Fitch

    Only two things keep these banks alive: ‘a State willing to support them and a regulator that does not declare them insolvent.’
    Dozens of Greek, Italian, Spanish and even German lenders have volumes of troubled assets higher or similar to that of Spain’s fallen lender Banco Popular. They, too, are at risk of insolvency. This stark observation came fromBridget Gandy, director of financial institutions for Fitch Ratings, who spoke at a conference in London on Thursday.
    The troubled banks include:
    Greece’s HB, Piraeus, NBG, Eurobank and Alpha; Italy’s Monte dei Pachi di Siena (which is in the process of being rescued with state funds), Carige (9th largest bank, now under ECB orders to raise capital or else), CreVal, and the two collapsed banks, Veneto and Vicenza (whose senior bondholders were bailed out last weekend); Germany’s Bremer Landesbank (which just cancel interest payments on its CoCo bonds) and shipping lender HSH Nordbank. Spain’s Liberbank and majority state-owned BMN and Bankia, which are completing a merger after private-sector institutions refused to buy BMN. Now, the problems on BMN’s balance sheet belong to Bankia, which already has its own set of issues, Gandy said.

    This post was published at Wolf Street by Don Quijones ‘ Jul 1, 2017.


  • Autopsy of Banco Popular Shows Fragility of EU Banking System

    What would a disorderly bank collapse in Spain and Italy have done?
    By Don Quijones, Spain & Mexico, editor at WOLF STREET.
    New information has revealed just how serious a threat a disorderly collapse of Spain’s sixth largest bank, Banco Popular, might have posed to Spain’s banking system. In its final days, Popular was bleeding deposits at a rate of 2 billion a day on average.
    Much of the money was being withdrawn by institutional clients, including global mega-fund BlackRock, Spain’s Social Security fund, Spanish government agencies, and city and regional councils, prompting accusations that Spain’s government was using insider knowledge to withdraw large amounts of public funds, which of course hastened Popular’s demise.
    All the while, Spain’s Economy Minister was telling the bank’s less privileged investors, including retail shareholders and junior bondholders, that there was absolutely nothing to worry about. Those that believed him lost everything.
    Between the end of March and its last day of trading, Popular shed 18 billion of deposits, roughly a quarter of the total. On the night of June 6, Europe’s Single Supervisory Mechanism decided that the bank could no longer cover its collateral. Popular, warts and all (take note, Italy), was sold for the meager sum of 1 to Banco Santander, though Santander will have to raise 7 billion of fresh capital to fully digest the bad stuff on Popular’s books.

    This post was published at Wolf Street on Jun 29, 2017.


  • Gold Bounces vs ‘Reflation’ Euro as FANG Tech Stocks Get 2.5% of Global Fund Allocations

    Gold funds ticked higher Wednesday morning as world equity indices slipped for the second day – led by pre-market trading in US tech stocks such as Google – and the Euro retreated from 1-year highs versus the Dollar hit after Euro central-bank chief Draghi said the currency union may be enjoying economic “reflation”.
    Currently holding deposit rates for commercial banks at minus 0.4% per year and buying 60 billion of Euro government debt each month until at least December, the ECB “will announce a tapering [of stimulus measures] in September, to begin in January,” reckons J. P. Morgan’s global strategist Mike Bell.
    “Financial markets are usually most responsive to any early signs of monetary policy shifts,” says a note from bullion and investment bank ICBC Standard.
    “By the time the actual rate changes occur, the currency has already experienced much of the benefit.”
    The Euro, however, sank almost 1 cent today from Tuesday’s new top above $1.34 after Italy reported slower inflation in May, missing analyst forecasts.
    Silver tracked commodities higher, touching a near 2-week high at $16.86 per ounce while gold priced in Dollars rallied to touch $1254 per ounce – almost unchanged for the week after Monday’s 1.5% plunge.

    This post was published at FinancialSense on 06/28/2017.


  • 2 troubled Italian banks failing, to face insolvency

    The European Central Bank has pulled the plug on two troubled Italian banks, sending them into insolvency proceedings as it pushes ahead with efforts to clean up weak banks holding back the economy.
    The two banks, Veneto Banca and Banca Popolare di Vicenza, have struggled to overcome high levels of loans that were not being paid back.
    The ECB said Friday it had given the banks time to raise more capital but the banks had not been able to offer credible solutions. It ruled they were “failing or about to fail,” and they will now face insolvency proceedings in Italy.
    The Italian Economy and Finance Ministry said the government would meet over the weekend to “adopt the necessary measures to keep the banks fully operative, protecting all account holders, depositors and senior creditors.”
    Shareholders and holders of the bank’s junior bonds, however, face being wiped out.

    This post was published at ABC News


  • Italy’s newest bank bailout cost as much as its annual defense budget

    Two more Italian banks failed over the weekend – Banco Popolare di Vicenza and Veneto Banca.
    (In other news, the sky is blue.)
    The Italian Prime Minister himself stated that depositors’ funds were at risk, so the government stepped in with a bailout and guarantee package that could cost taxpayers as much as 17 billion euros.
    That’s a lot of money in Italy – around 1% of GDP. In fact it’s basically as much as the 17.1 billion euros they spent on national defense last year (according to an estimate by Italian think tank IAI).
    You don’t have to have a PhD in economics to figure out that NO government can afford to spend its entire defense budget every time a couple of medium-sized banks need a bailout.
    That goes especially for Italy, whose public debt level is already 132% of GDP… and rising. They simply don’t have the money.
    Moreover, the European Union actually has a series of new rules collectively known as the ‘Bank Recovery and Resolution Directive’ which is supposed to prevent failing banks from being bailed out with taxpayer funds.
    Here’s the thing – Italy has LOTS of banks that are on the ropes.

    This post was published at Sovereign Man on June 26, 2017.


  • Italy Bank Bailouts Send European, Global Stocks Higher; Gold Flash Crashes

    S&P futures point to a higher open following gains in Asian markets supported by stronger commodities but mostly European bourses, which are sharply higher following the 17 billion bailout of the two Veneto banks in Italy, the biggest taxpayer funded bank rescue in modern Italian history, as well as Dan Loeb’s activist campaign of the world’s biggest food company, Nestle which sent the stock up 5%, and finally Germany’s Ifo business climate index which hit new all time highs.
    Risk sentiment is broadly higher thanks to European equity markets which have rallied strongly from the open led by the Italian banking sector following the Veneto banks resolution. As shown in the chart below, EutoStoxx banks are about 2% higher as markets celebrate the return of taxpayer bailouts and the apparent death of Europe’s bail-in regime.

    This post was published at Zero Hedge on Jun 26, 2017.