In the wake of recent world events, the markets have been rife with uncertainty. The Middle East has been riven by conflict, the European Union has been struck by crisis after crisis, and America is facing one of the most controversial presidential election contests in history. To add insult to injury, the existing tumult has been stirred to fever pitch in recent weeks by Britain’s vote in favour of Brexit.

This has left many investors in a quandary, wondering whether they should stick with their existing strategies, or retreat to safer ground and implement a more conservative approach to trading. For many, the latter has won out, and as a result, safe haven assets have surged.

If you’re new to the markets, however, you might not fully understand the purpose of these. Your portfolio may currently consist of only one type of investment instrument, so the thought of adding additional assets can be daunting.

In the case of safe havens, it needn’t be. Used by even the most experienced of investors during troubled times, these assets retain or even increase their value when volatility is at its peak, and are perhaps the most efficient tool in existence for limiting market losses.

If you’re considering adding them to your portfolio, then here are just three of the reasons why this is a very good idea under present circumstances…

Stability

One of the key points in favour of safe haven assets is that they have a stabilising influence in times of trouble. If you’re looking for investments that will not decrease in value in order to lessen your risks, then there are none better. From gold to the Japanese yen, even the worst tumult does not drag these assets down from their lofty perches, which makes them a wonderful portfolio addition for those seeking to create a safety net of conservative choices.

Balance

Safe haven assets are never a bad choice, but they need not be used in isolation. Frequently utilised as a tool for diversification, they can provide higher risk portfolios with the necessary balance and stability to pursue less certain avenues of income.

This is best explained using an egg analogy. Imagine that you have three eggs and three runners, who must complete a race against other teams carrying your eggs in their baskets. Prizes are available for everyone who completes the course with their egg/s intact, descending in value depending on the runners’ final positions, each purse payable to you as team manager. The faster runners (i.e. higher risk investments) are the ones most likely to claim high purses, but are also the most likely to jolt their eggs from their baskets and thus disqualify themselves and leave you out of pocket. Those less likely to win (i.e. safe haven assets) are more likely to complete the course, but won’t deliver you as great a purse. You can split your eggs any way you like between them. To give yourself the greatest chance of victory, you would of course give all of your eggs to your fastest runner. To spread your risk and give yourself the greatest chance of completing the course, however, you would spread your eggs between them, and this is how diversification works.

Profits

Thirdly and finally, consider this: the value of safe-haven assets during times of tumult tends to remain steady, if not increase. This means that for those who invest, now, with the world and the investment markets in tumult, is the perfect time to cash in on their maximum profitability, making gold and its ilk a very good bet if you’re on the search for trading success.

If you’re looking to add to your portfolio, consider safe haven assets today. Opportunity abounds if you’re only intelligent enough to take it.

Over time, charts for a bull market tend to print higher highs and higher lows on the way to the primary top. Two steps forward, one step back, creating a visual stair-step effect.

This chart “picture” has been in evidence for gold, silver, and the miners since January.

So far, waiting hasn’t been a good strategy. Yes, there were a couple of times in April, and a month later in late May where you might have been able to buy and save some money. But things can get in the way of that plan. And for a number of people I’ve talked to, things apparently did.

The first obstacle is Timing: Away from your computer, on a trip, sick, or depressed? Whoops, you missed the “correction.”

Price volatility tends to cause a surge in premiums. Over the last few years, when silver dropped sharply, premiums rose because demand surged. Now the same thing’s happening when prices rise sharply! So, even if silver declines to your target, you may still have to pay more than when the spot price was higher!

Then there’s a matter of the “experts” and the “gurus.” As a veteran of these markets since the 1970’s, I can tell you unequivocally that the way the metals and miners have surged this year, and the amount of time it took them to do it, is nothing short of amazing. In fact, “amazing” could be the operative word we keep using as the rest of this year… and next year unfolds. Fortunately for new buyers and current stackers, prices have not staged a runaway move and availability is good… so far.

But to hear the “experts” tell it, and I read just about everything they have to say – the market has become too “overbought,” the charts are showing “double tops,” “historically high COTs,” etc.

They’ve had their subscribers in and out, or are still out, waiting for that “correction.”

Yes, we may soon see the kind of “pullback” the Cassandras have been predicting. How long it will last, how deep it will go, I cannot say.

But I do know that for most of the procrastinators, it won’t go low enough or last long enough for them to actually get off the dime and do something.

Stuart Thomson of Graceland Updates likes to say that “If you’re trading through a microscope, your profits will be… microscopic.” Which reminds me of what so many of the gurus have been saying this year. They’re all “long-term bullish, but short-term bearish.” If this market is headed anyways near where the tea leaves are suggesting, this kind of thinking is going to leave a lot of people who are waiting to own precious metals… long-term empty-handed!

Truth be told, the biggest impediment to taking action, is human nature. Let’s say you’re patient and declare, “When silver hits ‘x’$, I’ll ‘back up the truck.” Maybe at some point over weeks and months the price declines to your “buy point.”

All of a sudden, everything you read is negative. “Demand is down in China.” “Poor harvests in India mean less silver will be imported.” “The Federal Reserve says it’s going to raise interest rates.” “The Maestro, Alan Greenspan, is now bearish on gold.” Yada, yada. You start thinking, “Maybe I should wait until it drops even more…” But, after a while, the price starts moving back up, and you’re still waiting.

Perth Mint 1 troy oz. Silver Kangaroos

Eventually you find yourself in one of two (still waiting) camps. Either you miss the entire bull market – as the Wall Street pros did from 2000-2011, telling their clients that “gold is too risky” for 11 consecutive years, during which the price rose over 600%! Or, at much higher levels you panic and jump in with both feet – just before a big “correction.” All of this effort for the privilege of waiting some more and finally selling out at a big loss.

David Morgan straight-forwardly addresses this conundrum. If you’re still a fence-sitter about “going long and strong” with precious metals, you might want to reflect on his wisdom:

“The problem with a lot of people is that they have an amateur’s perspective – which means they think that if they didn’t get in at the low, they’ve missed the move. Actually the best traders and the wealthiest people on the planet just take out the middle…They (will) get in and make massive amounts of money from the market as silver goes up to a hundred. They know what they’re doing; they’re not trading in hindsight.” (Or staying out, because they “missed the bottom.”)

There Is Still Good News for You

So where’s the good news in all of this for you? First, physical metals have not risen nearly as much, proportionately, as have the underlying mining stocks. Indeed, the miners are simply playing catch up, rising faster than gold and silver – as they should, because owning them comes with more risk.

Second, the general public still has not placed precious metals on their “must have” list. Sure you hear radio advertisements to buy, but how many of your neighbors, friends, and family members hold any? I’m willing to bet the answer is very few – or none!

If this overview makes sense to you, then get off the dime and exchange those base metal slugs in your pocket, along with some paper promises, for real money that has the “ring” of truth when you click two pieces together. Acquire your stockpile in thirds, every 30 days.

After that, order a copy of Bob Moriarty’s little investment gem, Nobody Knows Anything – Learn to Ignore the Experts, the Gurus and other Fools. It’s the best way I know of to stay relaxed, avoid waiting for scripted corrections, and keep from being long-term empty-handed.

Disclaimer: I own a copy of Bob Moriarty’s book.

David Smith is Senior Analyst for TheMorganReport.com and a regular contributor to MoneyMetals.com. For the past 15 years, he has investigated precious metals’ mines and exploration sites in Argentina, Chile, Mexico, Bolivia, China, Canada, and the U.S. He shares his resource sector observations with the media, readers, and North American investment conference attendees.

Just like the good ol' days, Russia is now a useful 'enemy' being used to justify whatever needed from Washington, whether it be more money for NATO expansion, more spying powers on the domestic population, or more reason to justify the USA's generally jingoistic, xenophobic attitude about foreign policy.  As we explain in Splitting Pennies - Understanding Forex - the USA has created a wall of stupidity surrounding the USA via sophistocated propoganda techniques developed over a period of 60 years utilizing advanced technology, combined with bio-chemical layer through aerosol sprays, chemicals in the food, and nervous system manipulation through 1/2 Hz coming from your Television (See US Patent 6506148 here).  

The event that changed the global power structure was World War 2.  History, whether business, technical, political, or social - should be looked at through 3 prisms; before, during, and after the war.  Before & during the war, Washington had a clear agenda - engage the US population & American business in the new hot industry: war.  Hitler provided them with an easy villian and a brand; Nazi.  It was the Evil Empire, something out of a b-novel.  It gave America an easy way to paint the world in a black and white brush for the domestic US population that wasn't aware of how the world really works (pratically speaking, Europeans need to be more clued in and speak 2 or 3 languages due to Europe's density and wide diversity of cultures).

Here's a list of FACTS that the Elite doesn't want you to know.  Everything you know about Russia - is wrong.

• Russia is 25 years old.  
• Russia, and the Soviet Union, are 2 completely different countries.  They are like comparing the British colonies and the United States of America.  It's a different system, different rules, different territory, different everything.   
• The United States developed a long term strategy to destroy the Soviet Union - in order to create Russia today (an open, market based economy).  In other words, Russia today is what Washington had planned for during a 40-50 year period after World War 2, spent billions of dollars, built countless missile silos and other hardware.   
• Russia has one of the fastest growing middle classes in the world See here
• Russia is currently the #3 country ranked in terms of total immigrants in the world, closely behind Germany and the United States.  See here
• Unlike most of European powers, Russia was not a very ambitious or successful colonial power.  The extent of Russia's colonialism was Alaska, but this was really just the business idea of some fur-trappers; it wasn't supported by Moscow very much.  With a few rare exeptions, Russia never 'invaded' another country.  Mostly Russia has defended itself from invaders, at least historically speaking.  Even today, Russia's foreign policy surrounds a 'defense' doctrine, not an 'invasion' doctrine.  Being attacked nearly every 20 or 30 years throughout history, the Kremlin has reason for such a policy.  Why did every Empire throughout history want to invade Russia?  Because of the nice weather?  No, because of the vast untapped resources.  For a more academic answer, checkout Brzezinski's "Grand Chess Board" - certainly Sun Tzu would agree, controlling Russia and North America is necessary for real global domination, for a number of geostrategic, logistic, and economic reasons.
• Russia is an Emerging Market (EM) - Why is it emerging?  Because it's just starting to build economic systems.  In Russia there's no class action litigation industry.  There's no FTC.  There's no bankruptcy rules.  But all that's changing.  Change takes time - it will likely be a generation or several generations.
• The Forex software that runs the algorithmic Forex world, Meta Trader, is from Russia.  Although primarily used outside of Russia, it's built native in Russian language, from Khazan (although headquartered in Cyprus).
• Russia has massive untapped resources unlike any other country in the world, most notably but not only oil.  Russia includes 11 time zones and is one of Planet Earth's most rich and undeveloped land masses, which includes mountains, forests, deserts, tundra, and ice oceans.
• No one is starving in Russia.  In fact, due to the trade war between Russia, the EU, and the United States, they're even burning and destroying food if it is found to come from blocked countries.

The list can go on and on.  Do your own research - unplug your TV and see what the world looks like.  Open a Forex Account.

See attached photo from a hard currency Foreign Exchange bureau in Moscow (they're on every street corner).  

If you want a quick Forex education, checkout Splitting Pennies - the pocket guide designed to instantly make you a Forex genius!

If you want to get started looking at investing, checkout Fortress Capital Forex

Source: CNBC

The much-anticipated stress test results from the Europan Banking Authority (EBA) were published yesterday (and of course, a Friday night right before a weekend is the best way to publish some bad results). In the stress test, the EBA is trying to find how the banks will perform under an adverse economic scenario in the world. Not all banks are being covered, and the 51 banks that have been subject to the test could only be seen as some sort of sample. At best.

Source: EBA

4 banks ‘failed’, and one Italian bank even succeeded in ending up with a negative (!) capital ratio under the adverse scenario in the stress test, il faut le faire! Banca Monte dei Paschi has a baseline CET1 ratio of 12.24% in 2018, but its entire capital would be wiped out under the ‘adverse’ circumstances (which aren’t that harsh at all). The bank’s board of directors is in emergency meetings the entire weekend to quickly inject 5B EUR of fresh capital into the bank before the markets re-open on Monday.

And yes, the criteria for the stress test were actually pretty mild. The EBA investigated how a bank’s capital ratio would change using a real GDP growth rate of -1.2% in 2016, -1.3% in 2017 and a real GDP growth of 0.7% in 2018. So this doesn’t even remotely represent how bad just the prelude of the 2008 global financial crisis was. Is a GDP shrinkage of 1.2% and 1.3% really the most adverse scenario you can base a stress test on? Give us a break!

Source: EBA

On top of that, the threshold and the minimum requirement for the banks to have been subject of the investigation was a consolidated asset base of 30B EUR. It’s totally fine to have a certain basis to cut off the smaller banks, but would a total asset base of 30B EUR be sufficient to restore the confidence in (and on) the financial markets? We don’t think so.

One of the banks that is in a bad shape but has been excluded from the stress test is BCP. In a previous column in January of this year, we already warned for the potential collapse of this bank. The market seems to be agreeing with us now, as the company’s share price is trading 60% lower.

As of at the end of Q1, this bank had approximately 76B EUR in assets (which is below the minimum threshold for the EBA stress test), but isn’t doing great at all. On top of that, not a single Portuguese bank was included in the stress test results, but that doesn’t mean these banks are doing great at all. In fact, almost all Portuguese banks are still repairing their balance sheet, but as we have seen in the past, all it takes is just one little push against one domino, and trickle-down effect could destroy the entire banking system of the country.

But when we tried to look up BCP’s results of the stress test, we were astonished to find out the bank hadn’t been included in the press release and the list of 51 banks. This doesn’t mean the bank hasn’t been analyzed, because IT HAS! According to its own press release, BCP admits the EBA told the bank it would have flunked the stress test, with an ending capital ratio of 6.1%.

And this leads us to the next big question. How reliable and important is this stress test? Sure, ‘only’ 4 banks failed (although that actually is quite a lot, considering that’s 8% of the test sample), but first of all, 51 banks represent just a part of the entire banking system, and the collapse of three smaller players could have an even bigger effect than the contained failure of one of the bigger banks. BCP failed the test, so how many other, smaller banks are there out there that would have failed?

Secondly, the EBA chose a fully loaded CET1 capital ratio of 7% in 2018 to determine who ‘passed’ the test, and only 4 banks failed.

However, if that cutoff ratio would have been 8%, an additional 6 banks would have been on the list of failed banks, and amongst them are some that could be considered too big too fail. Deutsche Bank (surprise, surprise), Commerzbank, Unicredit and Barclays would all fail the test when one would have used a fully loaded CET1 capital ratio of 8%.

Keep in mind the EBA said this wasn’t a pass/fail test, and there’s a very good reason for this. It’s just another smokescreen to keep the superficial investors happy. But when you start to dig deeper, several more banks have failed to meet the minimum criteria.

>>> Protect yourself against the weak financial system. Read our Guide to Gold!

Secular Investor offers a fresh look at investing. We analyze long lasting cycles, coupled with a collection of strategic investments and concrete tips for different types of assets. The methods and strategies are transformed into the Gold & Silver Report and the Commodity Report.

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By Chris at http://j.mp/22bDW4a

Let me frame this first. I have no political affiliation in any country on this ball of dirt, don't vote, never will, and I don't care any more or any less for any minority or in fact majority group. My concern is in understanding the world and probability of outcomes so that I and my clients can position accordingly.

With that out of the way I have a confession to make.

You know what really annoys me?

When I see one of my kids get an award for "participation". They didn't come first, they didn't do anything special, and yet they get a prize.

In the real world NOBODY gets an award for getting out of bed and participating in life. It's mandatory if you don't want to starve, and merely suggesting that performance is NOT somehow important is destructive nonsense, degrading to any thinking person, and, worse, sets one up for failure.

Now some may say: "Oh well, it's just kids. It's harmless and, besides, it boosts their sense of self worth". You'd be as wrong as Miley Cyrus swinging naked on a wrecking ball because not only do kids turn into grown-ups but this sort of pandering infests society at every level.

Grooming people to enter a street fight by teaching them poetry ends only one way.

The western world today treads on egg shells, careful not to upset some minority group: gay, non-gay, religious, non-religious, Black, Asian, Arab, pink, brown, cream-coloured with spots, transgender, or just plain thick. In fact, especially thick. The thicker one is the more they have the ability to yell "disadvantaged" and deflect responsibility. Because after all, it's always someone else's fault.

You expect that of someone aged 4. When an adult spews such garbage, they should be treated with the disrespect deserving of it but society has been accepting this nonsense.

Today we have daily examples of this absurdity. This is from an article in the Observer:

A non-Spanish-speaking teacher is suing her employer for rejecting her from a job that required her to teach the language. How dare they!

And just to get your blood boiling, I present to you one Ashleigh Shakelford - an obese, abusive, racist example of what floats to the top of a society too afraid to call a spade a spade. This is from an article you can read here:

Pay her for her humanity. It's your duty!

Jumping the ditch to Europe where it's unusual for a week to go by without at least one act of mayhem perpetrated by an islamic refugee and where the ruling class, drowning in politically correct rhetoric, are found impotent and afraid to address the issues head on. Instead they are trotting out the usual meaningless and distractionary garbage.

An article in the Spectator sums it up well:

It is now a fortnight since Mohammed Lahouaiej-Bouhlel shouted ‘Allahu Akbar’ and ploughed a truck along the Nice seafront, killing 84 people. The following Monday Mohammed Riyad, who said he was from Afghanistan but almost certainly came from Pakistan, screamed ‘Allahu Akbar’ while hacking with an axe at his fellow passengers on a Bavarian train. The next day another Mohammed, this time Mohamed Boufarkouch, shouted ‘Allahu Akbar’ and stabbed a Frenchwoman and her three daughters (aged eight, 12 and 14) near Montpelier.

 

Mixing things up a little, that Friday’s shooter in Munich was a child of Iranians called Ali David Sonboly. Skip forward a couple of days and a ‘-Syrian asylum seeker’ with a machete was hacking a pregnant woman to death in Stuttgart. The next day another ‘Syrian asylum seeker’, Mohammad Daleel, carried out a suicide bombing outside a bar in Ansbach, Bavaria. And a little over 24 hours later two men shouting the name of Isis entered a church in Rouen during Mass, took the nuns and congregation hostage and slaughtered the priest with a knife.

Although the public know what is going on, the media seems loath to find any connection between these events.

 

Indeed, the same papers that blame an exaggerated spike in ‘hate crime’ on everyone who voted for Brexit seem unwilling to put the blame for these real and violent attacks on the individuals carrying them out.

 

‘Syrian man denied asylum killed in German blast’ was the Reuters headline on the Ansbach story, neatly turning the suicide bomber into the victim and the German asylum system into the perpetrator. As Reuters went on: ‘A 27-year-old Syrian man who had been denied asylum in Germany a year ago died on Sunday when a bomb he was carrying exploded outside a music festival.’ How terrible for him to lose his bomb in such a way.

Unbelievably one of the "solutions" trotted out by the incompetent Eurocracy after the Munich shooting was that "inadequate welfare provisions" may be a cause.What!?

 What we're dealing with today is a crisis in political correctness.

But the man on the street is no longer buying it. He's not that stupid. He understands and sees with his own eyes, even if his rulers try to distract him.

 This is one reason that Brexit is taking place. A populace, increasingly distrustful of the establishment and horrified by the consequences of the actions already taken by the ruling class, look around them in search of someone who will say out loud what they whisper to each other behind closed doors.

Brexit was a huge plus for Donald Trump. It provided legitimacy to the rhetoric of Trump's campaign: "Don't vote for the establishment (Hillary), vote for me." "Let's make America great again" speaks the same language that Nigel Farage was speaking. Importantly, Trump doesn't pander to politically correct anything.

Don't misunderstand me. I'm not interested in being for or against Trump, I'm interested in the outcome and the knock on effects on a global macro scale.

Like him or loath him, Nigel Farage provided an increasingly horrified citizenry with a crystal clear message which never tried to pander to political correctness. A populace under attack (because Europe is most certainly under attack) found a level of honesty in the Brexit campaign, which was sorely lacking with the "remain campaign" and they voted for it.

 When only right-wing demagogues are prepared to say what a politically correct establishment is unwilling to say, then it will be right-wing demagogues that are elected to power.

Expect this trend to accelerate - first bringing Trump to power in the US and followed by massive changes in Europe, something I'll cover next week, including what I think is the easiest short in history and how it is likely to play out.

Investing and protecting our capital in a world which is enjoying the most severe distortions of any period in recorded history means that a different approach is required. Traditional portfolio management fails miserably to accomplish this.

And so our goal here is simple: protecting the majority of our wealth from the inevitable consequences of the political ruling class, while finding the most asymmetric investment opportunities for our capital. Ironically, such opportunities are a direct result of the actions by aforementioned people.

 Have a wonderful weekend!

 - Chris

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By the SRSrocco Report,

The top three U.S. oil companies released their financials today and the results were completely awful.  Exxon Mobil was the only one of the three that still made a profit for the first half of the year, however it was down a stunning 62% compared to the same period last year.

Unfortunately, Chevron and ConocoPhillips results were much worse as they suffered a combined net income loss of $4.7 billion for the first half of 2016.   We must remember, these are the major U.S. oil companies that are supposed to be highly profitable.  I hear this all the time from politicians and folks who believe in lousy conspiracies.

If we take a look at the chart below, we can see how much blood is flowing from the top three U.S. oil companies:

As I stated, Exxon Mobil still was able to show a profit of $3.5 billion, but this was down 62% compared to the $9.1 billion net income during the same period last year.  Chevron actually enjoyed a positive net income of $3.1 billion during the first half of 2015, however this became a net loss of $2.2 billion 1H 2016.  And then we have ConocoPhillips that suffered a $2.5 billion loss 1H 2016 versus a small profit of $93 million during the same period last year.

If we combine the total for these three major U.S. oil companies, they reported a $12.3 billion profit in the first half of 2015 compared to a net loss of $1.2 billion in the first six months this year.

So, individuals who don't believe in peak oil because the U.S. oil companies are making big profits, need to wake up and look at the data.  The low oil price and the rising debt levels on these oil companies balance sheets are destroying them.  While Exxon Mobil is still making a profit, it is nothing compared the BIG MONEY it was making a few years ago.

I don't have a chart for this, but look at these figures:

Top 3 U.S. Oil Companies Net Income (1H 2011 vs 1H 2016)

Exxon Mobil: (1H 2011) = $21.8 billion

Exxon Mobil: (1H 2016) = $3.5 billion

Chevron (1H 2011) = $13.9 billion

Chevron (1H 2016) = -$2.2 billion

ConocoPhillips (1H 2011) = $4.7 billion

ConocoPhillips (1H 2016) = -$2.5 billion

What a difference in five years... aye?  These top three U.S. oil companies made a combined net income profit of $40.4 billion during the first half of 2011 versus a net loss of $1.2 billion 1H 2016.  And... I believe the situation will become a lot worse for these companies going forward.

The U.S. Energy Sector is in serious trouble.  I believe the United States and world will suffer a SENECA CLIFF collapse in the future.   I discussed this in my interview on Finance & Liberty:

The Precious Metal Prices Continue To Rally

As the oil price continues to fall, gutting the entire U.S. oil industry, the precious metals continue to rally.  Today, the price of gold is up $12.40 to $1,347, while silver is higher by $0.11 to $20.23.

This is a very interesting disconnect as U.S. economic indicators point to a contraction on top of deflating energy prices.  Some analysts have been forecasting a huge deflation with falling gold and silver prices.  I don't think this will happen.  Gold and silver may have different plans, especially if we see more problems coming out of the European banks.

Investors need to prepare themselves for the coming collapse of most paper assets and real estate values.  I don't see the oil price recovering anytime soon, so this will put severe pressure on the U.S. oil industry.  Without rising energy production, ECONOMIC ACTIVITY GOES SOUTH... in a BIG WAY.

The idea that investors should only purchase 5-10% of their assets in gold or silver will become a HUGE MISTAKE going forward.

Lastly, if you haven't checked out our new PRECIOUS METALS INVESTING section or our new LOWEST COST PRECIOUS METALS STORAGE page, I highly recommend you do.

Check back for new articles and updates at the SRSrocco Report.

The “Seven Nation Army” just got a whole lot bigger… (h/t BoingBoing)

Last weekend was the Rockin'1000 music festival in Italy, where 1,000 musicians come together to perform to a massive crowd.

15,000 people show up to hear 17 songs played by 1,000 musicians. It's a lot.

youtube.com

And this year one of the songs they performed was "Seven Nation Army" by The White Stripes.

youtube.com

Just look at this musical army of drummers...!!!

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And the amount of people singing, ? "All the words are gonna bleed from me, And I will think no more." ?

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ANY big announcement about banks that is made after the markets close, and with a weekend to come before they reopen, brings back dark memories of the 2007-08 financial crisis. The results of the latest European bank stress test, which were released on Friday night, lacked the drama of that period and contained much that was reassuring. But they did not dispel the doubts that linger around a handful of institutions, notably in Italy.

Aggregate numbers suggested that European banks were in a generally healthier position than at the time of the last stress test, in autumn 2014. This time the banks started off with an average “fully-loaded” capital ratio of 12.6% and ended up with one of 9.2% in the tests’ most adverse scenario; that compares with a fall from 11.1% to 7.6% last time. No country’s banking sector ended these tests with an average capital ratio below the 5.2% of Ireland; in 2014, the capital ratio for several countries was negative, implying systemic insolvency. And all banks, except for Monte dei Paschi of Italy and Allied Irish, had capital ratios in the adverse scenario that exceeded 5.5%—a threshold that has previously been...Continue reading

THERE are only a handful of occasions on which it feels acceptable to have a drink before the sun has reached the yard-arm. Christmas, weddings and funerals, and the Test match are all fine. So too, for some reason, is an airport.

I have never been entirely sure why the last one should count. Probably people think a quick snifter a legitimate way to calm pre-flight jitters. But there is also something stasis-like about airports; time feels suspended in the terminal building. Perhaps it is because everyone is either adjusting from, or waiting to adjust to, another time zone. Or maybe everyone is mentally preparing for a situation in which they will be stuck with nowhere to go, whether in the airport or on the plane, for hour upon hour. Whatever it is, the only purpose of an airport clock is to make sure you reach your gate with five minutes to spare.

On a recent trip to Russia, arriving bleary-eyed at the airport before seven in the morning, I found the duty-free shop carrying out a vodka-tasting session. The airport-headed Gulliver saw nothing strange about wee nip before breakfast. The normal-headed Gulliver would have found that...Continue reading