Saturday, February 1, 2014

European highlights - February 1 , 2014 - Barcelona to Fine Owners of Empty Homes 100,000 Euros ...... Italy Unveils Most Bizarre Bank Bailout Yet - some may say the most corrupt bailout yet ( to the benefit of Unicredit and Intessa ) ......... Europe Is Set To Mandate "Remote Stopping Device" In All Cars For Police Use ..... Additional items to ponder on Europe ( h/t Ed Steer's blog )

Saturday, February 01, 2014 1:11 PM

Barcelona to Fine Owners of Empty Homes 100,000 Euros

Via translation from Libre Mercado, the city council of Barcelona, Spain proposes €100,000 Fine on Owners of Empty Homes
 The City Council will fine owners of empty homes up to 100,000 euros. The proposal by the City Council commits the government to detect unused homes, starting with the banks.

The statement also reflects the Council's commitment to initiate disciplinary proceedings which could end up with three fines "of up to 100,000 euros" if homes remain empty. The municipality of Barcelona draw "Inspection Programs to detect, check and effects pointing this statement, in order to guarantee the right to housing of the population and to address the housing emergency."

With this measure, Barcelona joins other municipalities that have already approved the proposal of the PAH as Gerona, Tarrassa or Santa Coloma de Gramenet.
Scramble For Renters On

To get around this idiotic law, banks and other landlords will either have to tear down houses or quickly dump them at distressed prices. Both of those things will compound the difficulties of already stressed banks.

Alternatively, banks, other landlords, and owners of vacations homes will enter a mad scramble to find renters, at any price, to get around the occupancy restriction. An avoidance maneuver of that kind would stress rent prices and rental landlords.

Clearly, this is another one of those too stupid to make up ideas.

Mike "Mish" Shedlock

Italy Unveils Most Bizarre Bank Bailout Yet

Tyler Durden's picture

The biggest problem facing European banks - one we highlighted most recently yesterday when we showed the latest 20% surge in Spanish Banco Popular Non-Performing Loans to a fresh record - and one we have been covering since 2010, which as of 2012 amounted to some $4.5 trillion that needs to be "remedied" - is the staggering amount of bad debt on the books of Europe's numerous banks, the bulk of which especially in the periphery are cojoined with their sovereign host in an unbreakable bond which despite Europe's theatrical attempts to sever, only keeps getting stronger.
But while, so far at least, the conventional "under the table" can-kicking European bailout mechanism involved a process whereby banks would issue bonds with a sovereign "guarantee", then promptly repo them to the ECB at virtually no haircut as the Goldman alum-led central bank did everything in its power to keep injecting liquidity in an insolvent continental banking system (while everyone pretended to not realize what was going on as the "A-ha" moment of public epiphany would mean the emperor would suddenly have no clothes and the jig was up), this week things changed.
On Wednesday, Italy's government voted final approval to a decree hiking the value of Bank of Italy's share capital from €156K to €7.5 billion - something that had not been done since the 1930s. Of course, politicians determining the fictitious value of a central bank is one thing, as idiotic as it may be. However, what is truly preposterous is the covert bailout that accompanies the decree: a key part of the decision was setting a 3% ceiling on the stake that the bank's shareholders can own in the central bank. This means, as Reuters reports, that Intessa and UniCredit, currently the central bank's largest shareholders with stakes of 42 percent and 22 percent respectively - not to mention two of Italy's most NPL-heavy banks - will have to sell the bulk of their central bank "equity" stakes. And who will they sell them to?Why the central bank itself, and in return they will pocket up to €3.5 billion ($4.7 billion) from the sale of their central bank holdings. Said otherwise, Italy took not only bizarro accounting, but also monetary financing of insolvent banks by the monetary authority, and thus Italy's taxpayers, to the truly next level.
Some more details on this supremely grotesque, and certainly not last, bailout from Reuters:
The decree says the banks have three years to comply with the new rules.

Should Intesa Sanpaolo sell a 39 percent stake, it could cash in up to 2.3 billion euros before tax according to analysts' calculations based on the new share capital of the Bank of Italy.

UniCredit could pocket a gross capital gain of around 1.15 billion euros from the disposal of its 19 percent stake in the central bank.

The only other lender with a stake in the central bank exceeding 3 percent is Carige which stands to reap a capital gain of 73 million euros if it sold part of its holding to comply with the decree.
And the cherry on top, confirming that Basel III is the biggest regulatory supervision joke conceived in Basel whose only purpose is to perpetuate a system of insolvent banks no matter the taxpayer cost, is that the capital gains from the sale would be used to boost the banks' core capital.
For those asking - yes: Italy's central bank just made sure Intessa and UniCredit pass Europe's stress test with flying color courtesy of a direct $4.7 billion deposit.
Sadly, this most brazen bailout will only benefit the abovementioned two banks:  "The ownership limit will benefit only Intesa Sanpaolo and UniCredit," said Fabrizio Bernardi, analyst at Fidentiis Equities. "It will not help, however, Monte dei Paschi di Siena and Banca Carige, which are desperate for capital," he added. Monte dei Paschi has to raise 3 billion euros later this year to pay back state aid, while Carige needs to boost its capital by 800 million euros.
That's ok, we are sure the MIT diaspora of brilliant bankers who rule the world (literally) will come up with some another ingenious plan to mask the epic insolvency of Monte Paschi in the 11th hour, kicking the can for another several months, until the next leg lower in the European depression forces Europe's banks to get yet another bailout, and so on, until one day there are no more people left to fool.
Perhaps the piece de resistance is that not only is the central bank bailing out insolvent banks, but it is indirectly also funding the sovereign: the new law will also help public finances thanks to the taxation of the capital gain the banks will register.
Simply remarkable.
And it would have been even more unbelievable had nobody in Italy's parliament figured out this was simply yet another taxpayer funded gift to Italy's banks. Somebody, however, did.Guardian reports that late on Wednesday, MPs of Beppe Grillo's M5S "stormed the government benches, put on symbolic gags and kept up a barrage of whistling after the speaker, Laura Boldrini, cut short the debate and ordered a vote on a complicated and intensely controversial measure to square Italy's public accounts. One of Grillo's followers said an MP from the governing majority had slapped her during the disorder. Opposition MPs claim that the measure would hand more than €7bn (£5.8bn) of taxpayers' money to the banks." Of course, what better way to fast-track yet another taxpayer bailout than to cut any debate short.
And this being Italy, where the phrase "political circus" is redundant, things just went uphill from here:
Members of the far-right opposition Brothers of Italy party showered chocolate coins on the government's representatives in the chamber and unfurled an Italian flag. After the vote was taken, Boldrini's party colleagues in the radical Left Ecology and Freedom (SEL) party broke into a chorus of the old partisan song Bella Ciao, prompting the M5S to respond with a rendition of the national anthem.

It is the first time since the foundation of the Italian republic after the second world war that a speaker has used the power to cut short a debate in this way. If she had not intervened, the decree at the centre of the dispute would have lapsed at midnight and Italian homeowners would have been landed with a bill for €2.2bn.

Enrico Letta's left-right coalition government won the vote by 236 to 209.

The decree was the latest stage in the government's tortuous efforts to fulfill an election pledge by Silvio Berlusconi to scrap an unpopular tax on first homes – and to do so without increasing Italy's already vast, €2tn public debt. Part of the cost is being passed to banks. 

But the decree included provisions for an increase in the capital of Italy's central bank – a move that will swell the balance sheets of the commercial banks that are shareholders in the Bank of Italy.

Since the central bank is to use its statutory reserves for the increasethe M5S argued that it amounted to a gift of more than €7bn to the banks.
And they were right. But that's ok - at least everyone get's to pretend for a few months longer that the system, which now needs ever more creative bailouts, is solvent.

Europe Is Set To Mandate "Remote Stopping Device" In All Cars For Police Use

Tyler Durden's picture

Submitted by Mike Krieger of Liberty Blitzkrieg blog,
Well this sounds like one of the worst ideas I have heard of in a long time. Naturally, it would emerge from the EU, the sorriest excuse for a fake government the world has ever seen.
While I have reported previously on regulatory efforts to put all sorts of invasive mandatory devices in U.S. automobiles (from October of last year Big Brother is Coming to Your Car), this idea from the EU take things to a whole other level of insanity.
From the BBC:
A device that would enable police to stop vehicles remotely is being considered by an EU-wide official working group, it has emerged.

The feasibility of such technology is being examined by members of the European Network of Law Enforcement Technology Services (Enlets).

The technology could impact on both road safety and civil liberties.
Civil liberties? What are those?
The BBC understands it would take several years for any such technical proposal to be drafted.

One EU document, from 4 December, sets out the Enlets 2014-20 work programme as including: “Remote Stopping Vehicles”.

It says “this project will work on a technological solution that can be a ‘build in standard’ for all cars that enter the European market”.

It is not clear what cost implications that would have for car makers.
No, but the implications for the peasant class are crystal clear.
The work of Enlets is little known and has emerged in part through documents published by the civil liberties campaign group Statewatch.
These people are out of control.
Full article here.

[ZH: Perhaps this utter insanity would be more palatable with a different marketing angle? At least we can have a laugh as the encroachment on personal privacy and civil liberties continues unabated]

GREECE: Slog’s default prediction officially confirmed

sambennyfinalAntonikis was shocked to discover new evidence of woodworm in the Parliament
Last Monday, a secret meeting of the Big SDs in Brussels took place to discuss Greece. Yesterday afternoon at 3.40 pm New York Time, the penny finally dropped at Murdoch’s Wall Street Journal:
‘[The meeting] discussed how to press the Greek government to forge ahead with unpopular structural reforms; and second, how to scramble together extra cash to cover a shortfall in the country’s financing for the second half of the year, estimated at €5 billion-€6 billion….the troika have put on hold their plans to travel to Athens. Concerns are growing because Greece faces a large maturity of government bonds in May of €11 billion.’
Two weeks ago, in a post entitled Mind the Gap, I wrote:
‘Several charts obtained from the EU and IMF finally end the debate about Greece’s funding gap this morning: without further loan support, Greece will default in May. And even if this is forthcoming, the country will default without yet more help in August.’
I hope plenty of Greeks noticed the WSJ piece, but I suspect they didn’t. Please pass on this information to as many influential Athenians as you can. And to the PM’s supporters in Kalamata, I say “FFS wake up”.
Your Prime Minister lied to you about ‘leaving the bailout scheme next year’. Your Prime Minister tried to frame Golden Dawn (an organisation I abhor) with a clumsy tissue of lies. His fat clown Evangelos Venizelos (the surname itself invented to claim lineage from one of Greece’s finest families) is a crooked embezzler who has ruined his Party and sold out his supporters. Even Alexis Tsipras continues to believe that Greece can stay in the euro and survive.
It cannot. From here on, Greece needs leaders it can look up to….without them spitting in its face. Former Pasokians, honest centrists and the Parties of the Left should come to an anti-Brussels accommodation, and fight the next election to keep the old guard and the new Nazis out – and then kick out the Eunatics for good.

ανεξαρτησία για την Ελλάδα!

Thanks as ever go to Dimitris, the two Elenis, Nick, Yianna and the guys in the Kafenion

From Ed Steer's blog.....

Danish P.M. Blindsided as Ministers Quit in Goldman Spat

As night turned to day on Jan. 30, Denmark’s biggest newspapers were predicting Prime Minister Helle Thorning-Schmidt’s coalition would survive a dispute over letting Goldman Sachs Group Inc. buy part of Dong Energy A/S.
By 10 a.m., the Socialist People’s Party had quit her minority coalition and Danes were trying to understand how a Wall Street bank could have shaken the political landscape in their Scandinavian haven. Thorning-Schmidt said she will appoint a new Cabinet “soon” to replace the six ministers who walked out over the dispute.
The 48-year-old Social Democrat watched her coalition fall apart yesterday after pushing a $1.5 billion sale of an 18 percent stake in Dong to Goldman. The deal, opposed by 68 percent of Danish voters in a Megafon poll for TV2, dominated headlines after it emerged Goldman would get some veto powers in exchange for its investment. Goldman has said it views the stake as a long-term holding and will support the strategy of the current management.
I'm gobsmacked at this news.  Finally people in relatively high places are standing up to these criminals---and doing what they're conscience tells them is right.  This must read Bloomberg news item, filed from Copenhagen, was posted on their website late Friday morning Denver time---and once again I thank Ulrike Marx for sending it our way.

Spain's Banco Popular Bad Loans Surge 20% QoQ (Most Ever) To Record High

As we draw ever closer to Europe's date with disaster and the inevitable lifting of the kimono that Draghi's supervision-driven stress tests appear to be, European banks are being forced to finally 'fess up to the real state of their balance sheets. Confused at how bad macro data can be in Spain and yet banks have been 'surviving' or 'thriving' - simply put, they lied (and are now being forced to un-lie) 
Spain's Banco Popular just released earnings showing a 19.6% rise in non-performing loans at EUR21.2 billion driven by a surge in "doubtful loans for subjective reasons" that almost tripled QoQ. This is the highest bad loan ratio on record at 14.27% - but have no fear, their CEO says "loan defaults are nearing their peak."
It seems we have reached the point where some "honesty" is the best policy as if they want to raise capital and be "saved" by the ECB, they need to show just how bad it all is - together. Expect more of the same from Spanish (and Italian) banks.
This short Zero Hedge piece, with two excellent charts, was posted on their Internet site late yesterday morning EST---and I thank reader 'David in California' for sending it our way.

Italy is wasting away month by month: Ambrose Evans-Pritchard

Today's headline from Italy is that unemployment has at last begun to fall, dropping from 12.8pc to 12.7pc in December.
Drill deeper and the recovery story turns to dust. The number employed in Italy has fallen by 424,000 over the last year. Piangi Italia mia.
As you can see from the chart below (only available on ISTAT's Italian site), the slide has been relentless. There is no sign of stabilisation. A further 25,000 dropped out of the work force in December alone.
The overall employment rate has fallen to 55.3, a staggeringly low level. The rate for men has fallen by 1.6 percentage points over the last year.  Youth unemployment was 41.6pc despite a tide of emigration to Britain, Germany, and beyond. It is at Greek and Spanish levels above 50pc in Naples and across much of the Mezzogiorno.
This short blog by AE-P was posted on The Telegraph's website sometime yesterday---and it's definitely worth your while.  Once again I thank Roy Stephens for sharing this story with us.

Switzerland tops list of European exporters to Iran

Official figures show that Switzerland exports to Iran totaled nearly USD 1.9 billion in the ten-month period ending on January 31, 2014.
According to official figures released by Islamic Republic of Iran Customs Administration, Switzerland exported as much as 2.6 tons of commodities to Iran during the ten-month time frame, topping the list of European exporters to Iran.
The Swiss Federal Council said in a statement on January 29 that it had suspended part of its economic sanctions against Iran in accordance with the Geneva nuclear deal between Tehran and the six world powers.
Switzerland has lifted a ban on precious metal trade with Iranian public bodies and eased restrictions on trade in petrochemical products, transport of Iranian oil and petroleum products, and the provision of insurance for shipments until August 14, 2014, read the statement.
This tiny story showed up on the website early this morning GMT in London---and it's another story courtesy of reader 'David in California'.