Global
Shipping Meltdown Mauls German Banks, Retail Investors, Taxpayers - (www.wolfstreet.com) When
Commerzbank, Germany’s second largest bank, reported earnings on Thursday, it
made another groan in direction of the collapsing maritime shipping industry.
It raised its loan loss provisions to €900 million, as it said, “in timely response to the deterioration in
the shipping markets.” It warned that its losses on shipping loans alone could
reach €600 million in 2017 after having nearly doubled to €559 million last
year. At one point, Commerzbank had €18 billion in shipping loans. Over the
years, as the shipping crisis worsened, it has whittled down its shipping loan
portfolio to €5 billion. But Commerzbank is
neither alone nor the biggest player among German lenders. Before the Financial
Crisis, German lenders went on a wild binge and became the world’s biggest
issuers of shipping loans that ended up funding horrendous overcapacity of
ships, just when global trade would face enormous challenges. Of the $400
billion in maritime loans issued by large banks, German banks hold nearly
$100 billion.
Cash
No Longer King: Europe Accelerates Move To Begin Elimination Of Paper Money - (www.zerohedge.com) In
the shadow of Donald Trump’s spree of controversial actions, the European
commission has quietly launched the next offensive in the war on cash. These
unelected bureaucrats have boldly asserted their intention to crack down on
paper transactions across the E.U. and solidify a trend that has been gaining
momentum for years. The financial uncertainty amplified by Brexit has
incentivized governments throughout Europe to seize further control over their
banking systems. France and Spain have already criminalized cash
transactions above a certain limit, but now the commission has unilaterally
established new regulations that will affect the entire union. The
fear of physical money flowing out of the trade bloc has manifested a draconian
response from the State.
Greek
bonds sell off sharply as EU-IMF rift deepens - (www.ft.com) Greek
debt sold off sharply on
Thursday amid fears the country’s bailout lenders will not be able to bridge their differences in time to lend Athens the €7bn it needs to
avoid bankruptcy. The International Monetary Fund has refused to sign on to the
aid programme unless EU authorities grant further debt relief to Greece, but
the rift deepened after the head of the eurozone’s €500bn rescue fund dismissed the IMF’s demand. Eurozone finance ministry deputies were
locked in meetings on Thursday night attempting to resolve the dispute.
Although Athens’ debt bill does not come due until July, authorities fear they
must achieve a breakthrough by mid-February to avoid the issue becoming
politicised in the upcoming Dutch and French national elections.
Italy's
bitter bank rescue tsar bemoans lack of strategy - (www.reuters.com) The
head of Italy's bank-bailout fund said on Tuesday the country lacked a clear
strategy for shifting 356 billion euros ($381 billion) in problem loans...
"There is no clear vision of the problem and no strategy," Penati
said at a financial conference in Milan, suggesting that he was virtually
working alone on rescues that had revealed "horror stories" within
some banks.
Italy's
UniCredit bank posts massive $14.5 billion loss - (www.yahoo.com) Italian
bank UniCredit announced a heavy fourth-quarter loss Thursday of 13.6 billion
euros ($14.5 billion) as its new CEO moved to fortify the firm by cleaning up
its portfolio of soured loans. Italy's largest bank by assets, UniCredit said
that it incurred 13.2 billion euros in one-off expenses, which included a
previously announced 8.1-billion-euro write-off on bad loans plus other charges
such as contributions to an Italian fund to save weaker banks. CEO Jean Pierre
Mustier called 2016 "a pivotal year" for the bank. "We took a
number of decisive actions regarding legacy and operational issues to ensure
the future success of the group," he said, citing progress on the
reorganization plan announced in December, including deals this month with
unions to slash 14,000 positions by 2019.
Mexico Raises Key Rate After Inflation Surges and Peso Stumbles - (www.bloomberg.com)
Fed’s Bullard Says Fiscal Uncertainty Should Delay Rate Increase - (www.bloomberg.com)
New GOP Memo Targets Stress Tests, CFPB in Dodd-Frank Changes - (www.bloomberg.com)
Home Prices Rose in 89% of U.S. Metro Areas in Fourth Quarter - (www.bloomberg.com)
Trump Promises Airlines New Infrastructure, Less Regulation - (www.bloomberg.com)
Greece optimistic of deal with lenders on reforms, debt, next week - (www.reuters.com)
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