When an Italian government official tells you "the banks are turning the corner" it means that the real trouble is just beginning...Renzi wasted time and political & financial capital on importing hundreds of thousands of Africans and billeting them on unfortunate Italians.... Yes  indeed, "Whether Italy is out of the woods is a burning question" is an accurate and pithy caveat to the latest declaration that this week`s sticking plaster solution means every is now rosy for Italian banks, the Italian economy...

...and of course by inference the EU. It will be until the next crisis hits 2 or 3 weeks down the road.  This bailout will certainly help MPS in the short term, but it doesn`t offer any solution to the problems effecting larger financial institutions such as  Unibanco. As A-EP points out the tapering of bond purchases by the ECB will lead to  rising bond yields doesn't bode well for Italy and it`s banks...." The Italian state will be allowed to compensate some of 40,000 retail investors shunted into MPS bonds without understanding the risk, but these rebates will be partial, glacially-slow, and conducted on a means-tested basis.  Fabio Fois and Giuseppe Maraffino from Barclays said the rescue falls short of a “systemic solution”, arguing that funding is too thin and the MPS model cannot easily be replicated. “We estimate that the largest six Italian banks could need about €30bn in total to clean-up their balance sheets,” they said. Some analysts think it could take €50bn, or more if the next global downturn hits early. If so, this risks another messy drama a year hence in even less hospitable circumstances."

 

 Exporters demand professionalism from the future government, said Mihai Ionescu, the president of the National Association of Romanian Exporters and Importers (ANEIR). "Our first request is for the future government to be professional. Secondly, we would want for it not to overdo it with social policies. If they do that, meaning if they overdo it with social policies without helping the economy, then I don't see a solid future for this country. The third thing that we are asking for is: «Show some love to Romanian capital!»".  Mihai Ionescu warned that this year, the export growth rate is slower than the growth rate of the GDP. Also, this is the first time when Romanian exports outside the EU are dropping, he added. Another great discontent of the exporters is the elimination of the Foreign Trade Department of the Ministry of the Economy, according to the president of the ANEIR, who stated: "We are disappointed in the fact that the team in the Ministry of the Economy has succeeded in destructuring the Foreign Trade Department. We had a structure that was exclusively in charge of foreign trade. Some people thought we didn't need a department for that. That is not true! The existence of that department is very important. But that is how the technocrats saw fit to help exporters - they have dismantled that structure and they have frozen all departures of those nominated for those positions in the respective embassies. We used to have that kind of representatives in our embassies. This year only a few people went abroad to take those positions and they did so temporarily. Half of Romania's foreign network no longer exists. I am not saying they were geniuses, but we could rely on them. Good or bad, they were there and many of them were useful". Mihai Ionescu also mentioned the fact that the Ministry of the Economy has blocked the promotion of exports, despite the fact that a lot of money has been allocated from the state budget this year. "We have not even achieved half of the program for the promotion of exports planned in the beginning of this year". In this context, businesspeople are going to sue the representatives of the government who are guilty of the things mentioned above, like Mr. Ionescu, who mentioned: "We have decided, together with the representatives of the business sector: this government isn't going to go away just by handing over papers. We are going to take them to court, because they have to pay for what they have done and for what they haven't done. They are appointed and paid by us to help the economy. They are going to be taken to court, through criminal lawsuits, filed by the economic professional associations".

SIF Oltenia has announced that it has brought two lawsuits against Banca Comercială Română: "- a request to bring an action for annulment of the Decision of the Extraordinary General Meeting of BCR of November 23rd, 2016, which is the object of the case no. 45844/3/2016; - a request for intervention which is aimed at rejecting the request for authorization of the merger approved by the Extraordinary General Shareholder Meeting of BCR of November 23rd, 2016, which is the object of case no. 44243/3/2016 which will have the first hearing on January 17th, 2017. Defendants: BCR, BCR Real Estate Management SRL (REM) and Bucharest Financial Plazza SRL (BFP)". The merger between BCR, REM and BFP represents a necessary operational simplification, given the fact that BCR is a majority shareholder in both entities, as its holdings are near 100%, and the two companies conduct their commercial activities through BCR, according to bank officials, who gave us the following statement: "The activities of the two subsidiaries will be internalized, and the merger will have a significant contribution to simplifying the structure of the BCR group and corporate governance". Law no. 31/1990 of companies allows shareholders who did not vote in favor of a spinoff or merger decision to exit the company and to ask the company to buy their shares, in which case their shares will be evaluated by an independent evaluator.  SIF Oltenia is the only one of the SIFs that has remained a shareholder of BCR, with a stake of 6.3%, after the other SIFs made their exit in 2011, following deals with Erste Bank, the majority shareholder of the bank. SIF Oltenia values its stake in BCR at 439.05 million lei, according to the report of September 30, 2016. In its 2016 strategy, SIF Oltenia has announced that it is still willing to negotiate with investors interested in its BCR stake, in order to get an attractive offer. "In the event such a negotiation is completed, we will summon the General Shareholder Meeting in order to put the deal up for approval - according to art. 241 (1) of the law 297/2004 - that stake exceeds 20% of the total assets, less receivables", SIF Oltenia wrote, and added: "We need to remind that BCR has ended 2015 very profitably, meaning that the chances of selling this stake in good circumstances have seen a good evolution".  Bucharest Financial Plazza SRL owns the BCR building of Calea Victoriei (the former Bancorex headquarters). The office building has been inaugurated in 1997, is 83 high, has 18 floors and a surface of approximately 31,000 sqm. 

European Union council president, Donald Tusk, called on the authorities in Poland to respect the constitution as a standoff between the opposition and the ruling party continued.  Polish opposition leaders called for days of anti-government protests and pledged to keep blocking parliament’s main hall after being accused of trying to seize power illegally by a government they say has violated the constitution.   Several thousand people protested in Warsaw and other cities after police broke up a blockade of the parliament building in Warsaw in the early hours.   “Following yesterday’s events in parliament and on the streets of Warsaw … I appeal to those who have real power for respect and consideration of the people, constitutional principles and morals,” Tusk told a news conference in Poland’s western city of Wrocław....Protesters had blocked all exits from the parliament on Friday after the opposition said PiS politicians illegally passed the budget for next year by moving the vote outside of the main chamber of parliament.  The protest marked the biggest political standoff in years in EU member Poland and the sharpest escalation of the conflict between the opposition and the ruling Law and Justice (PiS) party since it came to power in October 2015.  The police attempted in the early hours of Saturday to remove protesters by grabbing them and pulling them aside, but stopped as new protesters arrived at the scene. The police also called on protesters blocking the parliament to disperse, saying on loudspeakers that they might otherwise use force

Forecasts made by investment banks such as Goldman Sachs, JP Morgan and Barclays Capital are only marginally better than flipping a coin, and if you hold on to their “hot picks” longer than a few months you will almost certainly lose money, according to new research. Intertrader, a spread betting firm, examined stock predictions from so-called (and highly paid) gurus at 16 investment banks, tracked them over the following 12 months and compared them to the returns on just putting your money into a savings account or a stock market index such as the S&P 500 on Wall Street. “Investment banks’ recommendations are only marginally better than a coin flip,” says Intertrader. “The banks we looked at only managed to predict the correct direction their hot picks would go 55% of the time. And that is actually the kindest we could be – holding their predictions for longer just meant worsening results.” Investors who bought and sold an investment bank recommendation within 30 days on average made a gain of just 0.8%. If they held it for 90 days, it moved to a loss of 1.48%, while over a year the average loss from buying an investment bank recommendation was 4.79%. “We found that if you put the money you would have invested in a 3% high-interest bank account instead, your returns would generally be higher,” says Intertrader, which has created a Gurudex index that analyses investment banks. The firm says the findings serve as a reminder of Warren Buffett’s words of advice on the value of stock market forecasters: “We have long felt that the only value of stock forecasters is to make fortune-tellers look good. Even now, Charlie [Munger] and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grownups who behave in the market like children.”

The FTSE 100 index of Britain’s biggest stock market-listed companies has enjoyed its strongest year since 2009, jumping from 6,137 at the start of the year to touch nearly 7,000 this week. Wall Street’s S&P 500 has hit record highs, with British investors gaining even more in sterling terms because of the fall in the currency. This has meant that some of the biggest funds popular with small investors – such as M&G’s £6.3bn Global Dividend – have made gains of nearly 40% over the past year. But not everyone has shared in the party. The single biggest fund in the UK, Standard Life’s £26.3bn Global Absolute Return Strategies, has managed to lose money when almost everyone else has been coining it. The fund is down 3.3% over the past 12 months, compared with the 17% gain made by UK index-tracking funds over the same period. Star fund manager Neil Woodford has also had a poor year, making just 2.7% over the past 12 months for investors in his popular £9.2bn equity income fund.  The prize for the best performance of any fund in the UK goes to the little-known JFM Gold, which has given investors a return of 128% over the past year. Unfortunately, it’s only a £20m minnow, so we took a look at the big funds instead. M&G Global Dividend performed best, rising 39.4%, while Fundsmith Equity was up 28.2%. Both are heavily invested in Wall Street-listed stocks, which have rocketed in sterling terms. For example, Microsoft (a big holding in both funds) was trading at $54.80 at the start of the year and was $63.14 this week – a rise of 15%. But in sterling terms that translated into £37.27 at the beginning of the year, and £49 now – a rise of 31%. While the post-Brexit plunge in sterling will make holidays more expensive for everyone in 2017, it has turbo-charged returns for pension and Isa holders with investments in big US companies.