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Homecoming II: the official response

August 25, 2011

The attentive reader will recall that having been robbed for the second time on the Fiumicino airport-Rome trains on 16 July I contacted ‘Dottoressa’ Caccia, responsible for statistical data at Italy’s Railway Police (Polfer) and that she told me to send my written enquiries to  the ‘scrivici’ (‘write to us’) web site of the state police. This site only allows a maximum 600 character (approximately 100 word) enquiry, so I had to be short and specific:

…

Sono stato rubato per la seconda volta a bordo il treno che porta a/dal l’aeroporto Fiumicino. Ho parlato con Dott. Caccia nel ufficio Polfer a Roma e vorrei avere i seguenti dati.

1. Il tot. annuale di denuncie di reato sulle linea Fiumicino-Termini e Fiumicino-Tiburtina nei ultimi 5 anni (meglio ancora dal 2004).

2.  Una conferma che questi dati contengono TUTTE le denuncie fatte — o sul modulo in lingue straniere o sul modulo tradizionale in Italiano.

3. Vorrei sapere se mantenete dati per il numero di giorni al anno che le telecamere sul binario 26 della stazione Termini non funziano (per guasti or altri motivi.) Se ci sono dati pubblici, vorrei ottenerli.

…

Let’s be honest that the Italian is not great, but nor is it difficult to understand.

The big surprise was that a section of the state police did reply:

…

Gentile signor Studwell,

la ringraziamo per aver contattato il Dipartimento di Pubblica Sicurezza fornendo utili segnalazioni sui furti che avvengono sui cosiddetti “treni a rischio”, in particolare nella tratta Roma-Fiumicino.

Siamo molto spiacenti per i furti che ha subito in due diverse occasioni su tali treni, faremo sicuramente tesoro delle sue utili indicazioni.

Premettendo che il nostro Ufficio è preposto esclusivamente al contatto con i referenti dei media, vorremmo comunque darle alcuni elementi di risposta alla sua richiesta in merito ai dati sui furti in danno dei viaggiatori.

Dal 2004 al 2010 è stata registrata una diminuzione delle denunce di furto pari al 62% per quanto riguarda gli episodi di furto in stazione ed al 45% per quelli a bordo treno. Il periodo gennaio – luglio 2011, confrontato con l’analogo periodo del 2010, ha fatto registrare un ulteriore calo dell’8% per i furti in stazione e del 21% per i furti a bordo treno.

Infine vorremmo rassicurarla confermando che i dati sulle denunce comprendono anche quelle effettuate sui moduli in lingua straniera.

Rimaniamo a disposizione per ogni eventuale altro chiarimento.

Cordiali saluti

 

 

 

 

 

 

 

 

 

…

Note the introductory line that ‘Despite the fact we are supposed to deal exclusively with the media [in this office], we would however like to provide you a few elements of response…’

I specifically asked for data on reported thefts on the Fiumicino airport- Rome  trains between 2004 and 2010. The reply states that reports of theft in stations and on trains fell respectively 62% and 45% between these dates, without saying where. There are further data about declining reports of theft this year.

The reply further states that the data include all reports filed on foreign language forms (the ones without reference numbers).

Since the press office failed to use a no-reply address (even Italians have tricks to learn) I asked for two clarifications:

…

Grazie per la risposta. Vorrei chiarificare 2 cose.

1. Questi dati sulle denunce che fornite referiscono a quale linea di ferrovia? La prima volta che sono stato rubato ero sul treno Termini-Fiumicino. La seconda volta sulla linea Fiumicino-Tiburtina. Sono due linee diverse. Volete dire che c’e stato questo calo sulla linea Termini-Fiumicino, or Fiumicino-Tiburtina, o dove?

2. Come potete sapere che i dati sulle denunce comprendono quelle effetuati sui moduli in lingua straniera cuando quelli moduli non hanno numeri di protocollo? E perche non contengono numeri protocolli?

…

And here is the reply:

…

I dati si riferiscono alle denunce di reati commessi “in stazione” oppure ” a bordo treno” nel loro complesso, ovevro senza distinzioni di linee o stazioni specifiche. è quindi da intendersi come dato complessivo.

il protocollo è inserito sulla nota di trasmissione della denuncia all’autorità giudiziaria.

nel nostro sistema giudiziario,infatti, tuttti i fatti di reato devono infatti essere comunicati all’Autorità Giudiziaria e per un lavoro più agevole si preferisce questo sistema, ma le confermiamo che tutte le denunce di reati vengono acquisite per i necessari studi sull’andamento della criminalità. siamo noi i primi quindi ad avere intreresse a ricevere denunce e segnalazioni per migliorare i nostri interventi.

Cordialità.

…

The first bit begins to concede that the data provided do not refer to the Fiumicino airport trains… in other words that my enquiry has not been answered.

The second part becomes more interesting, claiming that the police add reference numbers to foreigner reports of crime after the reports are received because the system is ‘piu agevole’, which I would translate as ‘more efficient’ (or you could use ‘smoother’).

I would say that the system is more efficient from the perspective of policemen who want to reduce the amount of reported crime by altering or losing crime reports (see the scans of the forms and discussion here).

But as usual I am wrong, and am reminded that in Italy there is a binding legal obligation on the police to report all crimes to the judicial authority. Moreover, the state police assure, they themselves want to know how much crime is being committed so that they can hone their crime-busting techniques.

…

I asked for a final clarification on the data about reported thefts:

…

I dati che mi avete forniti, allora, sono di tutto l’Italia?

Se uno rilegge l’email originale, non siete stati chiari su questo.

Cordiali saluti,

…

And the final reply:

…

Gentile Signor Studwell,

le confermiamo che i dati che le sono stati forniti sono nazionali.

Cordialità

…

So, yes, they gave me national rail crime report data — and avoided providing anything for the Fiumicino trains, (where Ms Caccia told me on the phone theft is down by ‘at least 85 percent’).

The national data also indicate a big drop in reported thefts.

Do I believe even these national data? I think that given the use of unregistered foreigner reporting forms — which my policeman was so insistent I fill out in preference to an Italian form with a reference number — and given the remarkable obfuscation by the police statistics office, it is very hard to do so. Anecdotally, I haven’t seen anything change in terms of policing at Italian stations and on Italian trains in recent years, so why would reported crime fall so sharply? As I wrote previously, riding back and forth on the airport trains after the July 16 robbery, I was able to watch pairs of extracommunitari wandering the carriages, seemingly looking for victims in the most nonchalant fashion.

In the absence of measurable evidence to the contrary, my guess is that a significant part of what is happening statistically is that crimes on trains are not being added to the statistics. I don’t have more time at present to go into this, but it would be very interesting to know when the foreigner forms were introduced.

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10 cents on the Euro

August 20, 2011

Here’s a weekend snapshot of the death throes of Italy’s financial system…

On a five year view, the share prices of the country’s big 3 banks are close to being — in strict terms — decimated. Intesa SanPaolo is worth about 15 cents of what it was, Unicredit 12 cents, and Monte Dei Paschi di Siena has already breached the 10 cent barrier.

Both Intesa and MPS are well below their previous financial crisis lows of March 2009.

On recent trends, next week should see all three big banks in decimation territory. The main reason, as discussed here, is their exposure to Italian public debt.

When a bank’s share price is decimated, what happens? Other banks will not lend to it, lest they fail to get their money back. The interbank market closes its door. That may already be happening since the ECB conceded this week that it extended significant funds to one unnamed institution.

As well as buying up all Italy’s debt as it rolls over, the ECB may in the next few days begin funding all its banks as well.

Still, as Frau Merkel and Sarko like to point out, it’s not like they have agreed to issue Eurobonds.

We should get a number on Monday for what the ECB spent in the full week up to last Wednesday on Italian (and Spanish) public paper. My guess is we are in for a monster. Northern European taxpayers will want to avert their eyes.

My own bank is Monte dei Paschi (motto: ‘Medieval bank, medieval service’). I was in there on Friday, discussing the unannounced interruption of my e-banking service (apparently anyone who had not used it for three months was cut off for ‘security’ reasons; I have now been restored). The friendly staff, in their ridiculously spacious branch, didn’t seem fazed by the fact their employer’s market capitalisation is now less than US$3 billion and headed for zero.

Perhaps they think it will be more fun working for a foreign bank? I very much doubt it will be. When the IMF comes in, MPS has to be the prime candidate for takeover by a foreign institution (HSBC? StandardChartered?). My guess is that Italy will be forced to throw at least one of its big banks to the foreign dogs in order to satisfy the IMF’s deregulation strictures, and number three is perhaps the most likely to go. MPS has so far survived 540 years, but this one may be a year too far (though I do not know to what extent MPS’s incorporation structure provides a defence against takeover… it may appear to provide protection, but when the IMF shows up, all bets are off).

Hold on tight now.

 

Update, Monday 22 August:

The ECB today confirmed Euro14 billion of government bond purchases under its Securities Markets Programme in the week to last Wednesday (11-17 August), less than I had been expecting. Still, we are at Euro36 billion in two weeks, and rising. Meanwhile the Bundesbank explicitly criticises the reactivation of the bond purchase programme in its latest monthly bulletin, jacking up the political pressure in Germany. Stock prices of IntesaSanPaolo and Unicredit continued to fall today, despite a small rebound in European markets; the most bombed-out counter, MPS, rose.

Here is the full history of SMP purchases since May 2010 (ie. Rounds 1 & 2).

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Antipasto

August 15, 2011

The European Central Bank has revealed that it spent Euro22 billion buying bonds in the first two days of last week, almost all of which would have been Italian and Spanish paper. Italian and Spanish bond purchases were only authorised from last Monday. I gave a detailed view on the structural story here, on Italy’s unconvincing promises to sort itself out here, and my take on the reality behind last week’s equity panic here.

So: in its first two days the ECB spent almost one-third as much as it did in its (wholly unsuccessful) multi-month bond buying programme for Greece, Ireland and Portugal (Euro74bn). It is nice that the admission comes on the same day that Merkel and Sarko reiterated there will never be any Eurobonds, not ever, ever, ever, ever, ever, jamais, niemals…  (FT sub needed).

Meanwhile sellers of Italian (and Spanish) debt have had their starter and are looking towards the kitchen door. But as they savour the flavour on their palates, what is that rather unusual smell coming from within? I know! It is the aroma of German taxpayer money burning…

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Stuck in the middle with you

August 14, 2011

The English riots story runs and runs. There have now been something like 1,700 arrests — which is equivalent to about 2 percent of the entire United Kingdom prison population. The courts are meting out quick justice, which is a good thing (magistrates have been sitting through the night in special sessions), but they are also meting out retributive justice, which is not good. One man who walked into a shop that had been broken into and took £3.50 of bottled water has been given six months in jail. That is nothing more than a magistrate responding to the calls of Brave Dave Cameron and the moronic right that everyone involved be given a good caning.

England is stuck in the middle with its underclass problem. On the one hand it could go the American route, have a bigger underclass, but use much higher levels of state violence to keep it in place. That means more ghettoisation and more police with guns. In essence, it would mean that every time you arrived in an English city (like an American one) the taxi driver would tell you which part of town you can’t go to ‘cos they might kill you’. It doesn’t matter that this isn’t necessarily true (Among others, I have survived the south side of Chicago, south-east DC and some bad bits of NYC), the taxi driver’s advice is a short-hand for the political choices that have been made.

The other route is the continental European one. We should clarify at the outset that we are not talking here about the continental European immigrant underclass, which definitely exists and is nicely down-trodden. The immigrant underclass has rioted in France, but for the most part immigrants live on sufferance and their very low expectations keep them from going over the civil unrest brink. What we need to talk about in continental Europe is the treatment of the least fortunate part of the indigenous population, including (usually second generation) naturalised immigrants.

This latter group has never, to my knowledge, rioted because of what can be called ‘inclusion’. Since the Second World War, continental Europe has implemented policies designed to maintain society as a single unit. The most important of these, I believe, is nationalised education. There is no educational ghettoisation in continental Europe that can act as a stepping stone to social ghettoisation. In towns throughout the European mainland, the children of the wealthiest entrepreneurs grow up going to school with the children of mechanics and barbers. This is overwhelmingly the case, and it is absolutely overwhelmingly the case at a primary level of education. Largely as a result, people growing up in continental Europe in the past 50 years have largely been denied the sense of exclusion and jealousy that pervades the Anglo-American underclass.

It is interesting that Ed Milliband, the Labour leader, is talking at every opportunity — in the wake of the riots — about the need to give people a stake in society. He even plans his own ‘enquiry’. But the Labour Party (the true party of bullshit in British politics) won’t go near the socially cancerous education issue. Boarding-school educated Tony Blair would not touch it and the new ‘lefty’ Labour leader will not do so either.

In consequence, Britain is destined to remain stuck in the middle. We have a sub American-scale underclass but we don’t have the guns to keep it in the ghetto. Once in a generation the underclass rampages down English high streets nicking whatever consumer durables its miserable existence has led it to crave. This generation is worse than the 80s one in that it is utterly bereft of any political consciousness. It appears to have been neutered by a combination of television, the moral cesspool of Premiership football, and the apparently limitless selfishness of reproductive underclass males.

Joe Strummer used to sing that anger can be power. But these days the only thing that anger can be is a flat-screen tv and a pair of new trainers — which most of the looters probably had anyway.

 

Latest:

Bob the Builder must be fuming. After Obama already stole his ‘Can we fix it? Yes, we can!’ refrain for the US election, Brave Dave Cameron is making another raid on Bob’s core IP with his new ‘Can we fix Broken Britain? You jolly well bet we can, matey’, campaign.

To be fair, Brave Dave has some reasonable points, but in the end I reckon he’s a fiddler not a fixer — a Polyfilla Blagger as Bob might say.

On the US copper — Bratton — to run the Met saga I am instinctively on Brave Dave’s side. But then he appointed Theresa May Home Secretary, so whaddya do? Remember that he also cut the political legs off Fatty Clarke, having first promised to be sensible about punishment issues. Brave Dave just can’t decide whether to hug a hoodie or lash one to a post and thrash him. It is so very hard being a modern Tory.

 

Unrelated, but quite funny: 

I had not realised that Giulio Tremonti, Italy’s finance minister who used to work as a tax law expert and this week imposed a ‘solidarity tax‘ on high earners, also worked in the past as a university lecturer in ethics. He currently stands accused of paying a fast-living political aide who is under investigation for serial corruption €1,000 a week in cash to live in his apartment in Rome. It would be fun to publish Mr Tremonti’s course notes, if someone has them.

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Noise (and not)

August 9, 2011

The equity markets threw quite a tantrum on Monday and on Tuesday morning, but Mr Market appears to have found his valium.

Wednesday evening insert: 

Strike that! Mr Market picked the wrong bottle and actually took some acid. He’s freakin’ out again.

 

What is the American equities terror all about? Not much as far as I can see. Noise.

I am no Bernanke groupie, but the message from the Federal Open Markets Committee Tuesday looked about right. No immediate promise of QE3. It isn’t needed yet and given the epicentre of crisis at this point is in Europe (see next par) it is hard to see how US government debt yields are going to be pushed significantly up. There was an FOMC promise of long-term cheap money, but everyone expected that anyway. The US may just (unlike the UK) continue to crawl towards recovery. If not, there’s time.

The real story is on two different fronts. The first is the European sovereign debt crisis, where the ECB is applying to Italy and Spain the medicine that did not work for Greece, Ireland or Portugal — buying the bonds of a country that cannot otherwise afford to service them. For Spain, at least this may be a useful subsidy while the country makes further adjustments to ensure its independent fiscal survival. But for Italy, it is simply a matter of how much time elapses before the market remembers that Italy cannot get its act together. I can’t see how this can take very long at all. The trigger for renewed panic in the debt market, however, could be one of many: German politicians decide unilaterally that they have had enough of Italy; Italian blue collar unions affirm their intransigence; Berlusconi opens his mouth; some new scandal breaks; the ‘professional’ classes go on strike; or the sheer scale of what is entailed in buying Italian (and Spanish) debt sinks in — the total the ECB spent on Greek, Irish and Portuguese debt last year and this was Euro74 billion; it will likely be asked by delighted sellers to buy that much Italian (and Spanish) debt within a month.  Waiting for one of these things to go bang is a bit like watching old episodes of Dallas: predictable.

More interesting perhaps is what is happening on the China front, another key to the rebalancing of economic and political relationships that must happen before this crisis is over. Here we see what can be construed as the method in American madness. The S&P downgrades of US debt and the hoo-ha about a possible QE3 is backing the Chinese leadership further into a corner it hardly even realised it was in. There was old China, all tough and proud with a couple of trillion dollars of US dollar-denominated foreign exchange reserves (out of a total of more than three trillion USD-equivalent). Everyone was all afraid of the big panda that was buying up all the forex. But suddenly the Chinese government doesn’t feel so clever buying USD in order to depress the Renminbi exchange rate. So what else do they buy? Euros? Ho, ho, ho. Japanese Yen? Hee, hee, hee. Sterling? Ha, ha, ha, ha. There aren’t enough Swiss Francs or Swedish Krona to last China a week. And if it buys gold, what happens when the crisis is over and the price falls off a cliff?

It is no fun at all being the Chinese government right now and the path of least resistance is to let the Renminbi appreciate. The central bank allowed it to shift a quarter of a percent in a day when the S&P downgrade was announced, to 6.43 to the USD. (This would be nothing in a free market, but it is a big jump for China.) The official news agency, Xinhua, has taken to running political commentaries demanding the US guarantee the value of Chinese investments, which must have the China people in Washington rolling on the floor and slapping the carpet. At least someone is having fun. The more the Renminbi appreciates, the  better the US net trade position becomes. The process also imports some inflation into the US, which is good. And the rising Rmb becomes a self-fulfilling prophecy as speculative capital moves into China in search of higher interest rates and a rising currency. Basically, China either lends America cheap money to fund the deficit, or it takes the (upward) currency hit. They ain’t feeling so forex macho any more.

More…

Sloppy graph of USD-Rmb exchange rate:  USD Rmb Sep10 to Aug11

And in the news:

Appreciation does not prevent a monster Chinese July trade surplus (FT sub needed). But imports, year-on-year, continued to rise faster than exports and the growth gap widened a little versus June. Going forward, it is worth bearing in mind that China could still see increasing trade surpluses as the Rmb exchange rate rises and exports slow, by virtue of falling domestic investment and hence lower capex imports. This would be consistent with the huge trade surpluses of the mid-1980s in east Asia which caused the US to put its revaluation gun to the head of Taiwan and Korea in 1987. However the trend to narrowing surpluses and a positive impact for the US economy is my base China case.

The Renminbi kicks on following yesterday’s FOMC statement.

 

Latest from not-so-gay Paris and not-so-dolce-vita Roma: (FT sub needed)

Zoot alors! King Sarko summons his ministers as selling fever turns on Italian bond-laden French banks. Pas bon: this FT story focuses on the sell-off of French bank stocks today, but notes further down that the Italian big 3 banks also got a caning. What is really telling, I suspect, is that French and Italian banks that own Italian (and other toxic) debt fell by double digits today, even as Italy was able to sell new bonds at lower interest than a few days ago (figures in the freakin’ out again link if you need them). Would that be because a few days ago the ECB wasn’t buying Italian bonds?

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Matilda

August 7, 2011

The country with more laws than any other in Europe, and whose institutional failure is based squarely on its inability to enforce its laws, has promised to overcome the financial crisis by… writing more laws.

The main points of Friday’s announcement at the Berlusconi-Tremonti press conference (FT subscription needed) are constitutional amendments requiring a balanced budget and the liberalisation of an as-yet undefined list of professions.

Perhaps Berlusconi and Tremonti forgot that their country signed a European Stability and Growth Pact in 1997 — two years before joining the Euro — that limits national debt to 60 percent of GDP. Perhaps they are unaware that in Italy the law says you must wear your seatbelt and stop at zebra crossings. Perhaps they have not read the constitution they plan to amend, and all the wondrous things it already promises which do not exist in Italy (more below).

It will be a wonder if the markets buy into this bullshit beyond 9am on Monday morning.

The S&P downgrade of US debt (FT subscription needed) allowed the weekend press to spend much of its time speculating if the US faces panic on Monday. I doubt it. Everything is relative and everything, ultimately, is about the capacity to pay.

Which is why, sooner or later, either the IMF comes in or Italy defaults.

There is, I think, a reasonable case that it would be better for Italy to go for a negotiated default and leave the Euro area. An exit is perhaps the one thing that could wake Italians up. (My ideal would be to kick Italy out of the EU completely and — so long as it would concede historic culpability for the Armenian genocide — let Turkey come in at the same time. I think that might just get the message through.)

Infinitely more likely, however, is that Italy continues its historic oscillation between puerile nationalism and running to mummy, in the form of the United States or the European Union. The EU has shown it lacks the discipline to help Italy, and so in any rescue in this crisis the heavy lifting will have to be done by (mostly American) IMF staffers backed by ECB funds. Apart from the fact that most of the money will be European this time, we are I suspect looking at 1945 deja vu all over again. A bunch of foreigners come in and tell Italians how to run their lives. It is utterly depressing that this is necessary. But I hope the guys and girls at the IMF are getting ready, because it will be necessary. I will write more about the task they face when it is clear they are on their way.

STOP PRESS

Sunday evening at 11pm the ECB puts out a press release, point 6 of which appears to mean it will start buying Italian and Spanish government bonds as soon as Monday morning. Guess they believed Matilda more than me then…

ECB Sunday 7 August 2011

MONDAY MORNING UPDATE

Mamma’s here. Those ECB folks grabbed a couple of hours sleep Sunday night, jumped out of bed, and started buying Italian and Spanish bonds (FT subscription needed) as soon as the markets opened Monday. The FT says bond yields are ‘tumbling’. Looked at the other way round, the ECB is offering far better prices than the market and grateful sellers are jumping with joy. What we want to know, of course, is the volume. We should start to get some information later in the day. My base case remains that this will be a very temporary respite.

MONDAY LUNCHTIME UPDATE

Much as I love the FT, I cannot believe how far behind the curve it is on this story today. You are better off reading Bloomberg for free:

Mostly this and then this.

The markets know that the ECB has neither the money nor the cojones for the job in hand and are headed south. G-7 is wittering on about hanging tough and doing everything necessary. It is time for the IMF to cancel all holiday. The end is nigh. I just wish I had cash to buy distressed equities — but I guess this is god’s way of punishing me for being a writer.

Meanwhile…

It wouldn’t be Italy if:

Some magistrate from some town you never heard of didn’t order police to raid the Milan offices of the ratings agencies because the financial crisis is clearly a satanic//American/British/etc conspiracy.

Links in Italian: 

Corriere della Sera reports the presser (Note how Italy’s most cosmopolitan newspaper refers to the US Secretary of the Treasury as Mr Timothy).

An editorial in the Corriere is interesting inasmuch as it refers to ‘a wave of speculation’ and ‘irrational’ market movements. Is it irrational to sell off Italian debt? I, personally, do not think so. If Italians do, they have the private savings to fund their debt domestically, so perhaps they should buy up the paper that is being sold. It would be a solid investment for them and it would show their trust in the reforming credentials of their government… Less cynically, I was struck at a party with Italian professionals on Saturday how receptive otherwise very smart people are to the notion that Italy is indeed the victim of some new and terrible global conspiracy.

The constitution:

Background to Italy’s 139-article constitution — one which parliamentary commissions have three times in the era of Italy’s decline tried and failed to simplify and focus.

Official English translation of the constitution.

Italy’s constitution guarantees many wondrous things. Readers of this blog will not be surprised that my personal favourites are:

Art. 10

The Italian legal system conforms to the generally recognised principles of international law.

Art. 54

Those citizens to whom public functions are entrusted have the duty to fulfil such functions with discipline and honour.

Art. 111

The law provides for the reasonable duration of trials.

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Banking the Sopranos

August 2, 2011

 

 

 

 

 

 

 

 

 

 

 

 

For some time I have been meaning to take a look at the structure of Italy’s public debt, and finally I did it. Let me assure you that the picture is every bit as ugly as one could imagine. I don’t mean the scale of the debt, which is known to almost every one. I mean the fact that Johnny Foreigner is totally, utterly on the hook. If this family goes down, we go down with them.

For the record, Italian public debt is currently around 124 percent of gross domestic product. Historically, this debt is the product of large, recurrent government deficits beginning in the 1970s. Over time, the debt load was compounded by the legendary ‘cunning’ (known in some cultures as ‘childishness’) of Italian politicians, manifested in manoeuvres like racking up the highest pension liabilities as a share of GDP in Europe — because it falls to another government, down the line, to pay the bill. So vote buying of one kind or another and a general willingness to mortgage the country’s future produced a large public sector liability.

Next, because of Italy’s history of relatively high inflation, governments were only able to sell their debt by offering short maturities. The buyers of Italian bonds commonly insisted on stuff of less than three years’ maturity. As of this year, Italy has about Euro500 billion of debt — around one-third of GDP — coming due in the next 36 months, compared with the equivalent of less than one-fifth of GDP coming due in that period in Spain. Even Greece has a lower share of GDP coming due in the next three years than Italy. (See the charts below. Note that these data are already a year out of date — they are the most recent I could quickly obtain. As each of the countries rolls more debt over into future liabilities, the bars to the right will rise quickly…)

Before one freaks out about these numbers, you have to remember that debt is really an issue of capacity to pay. Greece has no capacity to pay, which is why the market has already written it off. Until recently, the market said Spain had less capacity to pay than Italy. But now Mr Market is re-thinking.

There is good reason to do so. Spain has an Anglo-Saxon problem. Its banks are bust because of excessive real estate lending — a private-sector debt problem. The solution, sooner or later, will be bank nationalisation followed by a fattening of bank spreads in a less competitive banking system. The raising of the spread between deposit and loan rates quietly socialises the cost of the bail-out without a full-scale political confrontation about who is responsible for the cock-up and who must pay (the people my Etonian banker friend calls ‘the great unwashed’). This is what is already happening in the US and UK. Real estate prices deflate and banks use fat margins on current business to offset losses on their historic mortgage books. It is a long and painful process, but ultimately the mechanism to pay for the banks’ greed and misadventure is relatively easy to put in place.

Italy is a different story. Its debt problem does not stem from a real estate bubble and banking excess. The banking system already restrains competition and banks have traditionally made good margin from lending conservatively. The problem of the Italian banks is instead that — partly as a quid pro quo for a protected, high-margin banking sector — they have been the domestic buyer of first resort of government debt. Domestic financial institutions hold the overwhelming majority of Italian-owned Italian government debt. Put another way, government has been bribing the population to acquiesces in its incompetence and inefficiency, and the banks have provided the funds to allow this to happen. It is a public debt problem, but the banks are are the private sector symptom of it. This is why the shares of Italian banks are getting hammered as the debt crisis deepens.

If you want a non-technical Italian analogy, the situation is as if Paulie Gualtieri had started a bank. The main business of Paulie’s bank is lending money to Tony Soprano so that Tony can buy Porsche Cayennes for Carmela, which keeps their troubled marriage from falling apart. This is a pragmatic arrangement, and Paulie and Tony regard it as very cunning. Of course, Paulie’s bank eventually runs into trouble. When this happens, there is no automatic mechanism to socialise the losses. Instead, Paulie and Tony have to go out on the street and raise new funds by ‘cracking heads’.

Unfortunately, this is where the analogy breaks down. Silvio Berlusconi may be hewn from the same moral block as Paulie Gualtieri and Tony Soprano, but he does not have the same resources in terms of soldiers on the street. Washed and unwashed alike lack ‘respect’ for Sil and his degraded lifestyle (some of them hark back to the days of the legendary capo Bennie Muss, but that ship has sailed…).   Sil’s ‘family’ has been paring expenditure for several years since the global financial crisis broke. But his real problem is that the Italian economy has expanded an average of only 0.2 per cent a year since 2001. And the latest industry surveys suggest the economy is perilously close to contraction this year.

Put simply, there may not be enough money on the street for Sil to shake down, even if he had the wherewithall to do it. Mr Market knows this, and has pushed the price of Italian debt due for roll-over to more than 6 percent. When Greece, Ireland and Portugal exceeded a  7 percent cost of new debt, their bonds started to be sold off so heavily — because people no longer believed that they could be repaid — that bail-outs became inevitable. Italy may entering that arena and the symptom, as mentioned, is that Italian bank stocks are in precipitous decline. (Some of the more obvious investment advice today is: Short. European. Financial. Stocks.)

At this point, I know what you are thinking: the Sopranos had this coming. They’ve been taking the piss for years and, frankly, we’ve got bigger problems of our own to worry about.

Except that I am not sure that we do have bigger problems to worry about…

It is true that Italian banks hold most of the domestic share of Italian public debt. (Ordinary Italians have been far too sensible to load up on this toxic dross, despite any number of government schemes — mostly tax breaks — to encourage them to do so. The public holds only about 15 percent of Italian debt.)

However, apart from that held by Italian financial institutions, there is another vast chunk of Italian state bonds held by a different mob of wholly amoral financiers — foreign banks. Get this: approximately 900 billion euros of Soprano paper has been sold to foreign institutions, most of which represent a liability — if they go bust — to north European taxpayers.

Nine hundred billion euros is not some Greek, Irish or Portuguese morning after; it is a colossal, gob-smacking liability that means the Sopranos can probably make the rest of Europe jump through whatever hoops of fire they fancy. The line that Tony once used on Carmela is the one that Sil will likely use on the ECB: ‘Who knows more about extortion, me or you?’

 

 

 

 

 

 

 

 

 

 

 

 

 

Soprano-omics

Take a look at the aggregate numbers, displayed on top of the bars below, comparing debt due for roll over in Italy versus Spain….   (Greece, further down, is like discovering your kids failed to pay for half a dozen ice creams.)


 2009 2011        
Japan 218.6 231.9 245.6
Italy 115.1 123.5 128.5
Greece 113.4 126.8 —
Belgium 97.9 104.9 —
United States 84.8 97.7 108.2
France 77.4 86.6 92.6
United Kingdom 72.9 89.3 98.3
Germany 72.5 87.8 89.3
Ireland 64.5 87.9 —
Spain 55.2 66.9 —
Sources: European Commission, IMF, OECD.

Don’t let Japan, in the table above showing public debt as a share of GDP, make you feel better about Italy. Japan is a qualitatively different story because almost all its ridiculously large debt is financed by domestic borrowing. Indeed the willingness of the Japanese to pay for the debt at close to zero interest is what allows it to be so big. Italy, by contrast, plans to have its debt and then have foreigners pay for it. (The last column in the table above represents forecasts for 2014… for some reason the date will not reproduce.)

The thought to keep me awake at night:

In order to get out of jail, one Carnegie Endowment economist reckons Italy needs to achieve a primary budget balance (before interest payments) of PLUS-4 percent of GDP and cut real wages by at least six percent (to restore some competitiveness). Is this likely? After Italy joined the Euro in 1999, its borrowing costs were cut from a peak of 10 percent of government revenue before the Euro to under 5 percent because Italy was temporarily afforded German interest rates. This provided an extraordinary one-off opportunity to reduce public borrowing. What happened? Over the next 10 years, Greece cut public borrowing by more than Italy.

Also worth a look:

This recent European Commission study shows that, from 1998 to 2008, exports of goods and services grew more slowly in Italy than in any other member country.

Uncanny:
I post this, log on to the FT, and discover this is the lead story (subscription needed).

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With respect to selling postcards of hangings (Perugia versus Bristol redux)

July 30, 2011

Chris Jefferies case: exquisite psychological investigation wrong again...

Chris Jefferies. Photograph: Tim Ireland/PA

Here is a salutary outcome from the Bristol murder case highlighted in my Perugia versus Bristol post of January 2011. Eight tabloid British newspapers have been swiftly and efficiently hit with substantial defamation damages after they attempted to convict Chris Jefferies on the basis he looks a bit odd. (And he wears an anorak. And he’s a teacher.) It is going to be very interesting to see how many Italian newspapers are hit with substantial damages for their reporting of the Sollecito-Knox satanic ritual murder trial after it turns out Sollecito and Knox aren’t satanists after all. Will Italians also realise that it is not necessary to have a criminal libel law in order to sort this kind of thing out, just a functioning judiciary?

The damages award as reported by Roy Greenslade in the Guardian on 29 July:

…

Eight national newspapers have made public apologies today to Christopher Jefferies for the libellous allegations made against him following the murder of Joanna Yeates,

The titles – The Sun, Daily Mirror, Sunday Mirror, Daily Record, Daily Mail, Daily Star, The Scotsman and Daily Express – have also agreed to pay him substantial libel damages, thought to total six figures.

The solicitor for Mr Jefferies, Louis Charalambous, told Mr Justice Tugendhat in the high court hearing that the newspapers had acknowledged the falsity of the allegations, which were published in more than 40 articles.

Ms Yeates, a Bristol architect, was killed in December last year. After her body was discovered, Mr Jefferies, who was her landlord, was arrested by police.

In subsequent days, into early January, the newspapers ran a series of articles about Mr Jefferies that were inaccurate and defamatory.

Charalambous, of Simons Muirhead and Burton, said after today’s hearing:

“Christopher Jefferies is the latest victim of the regular witch hunts and character assassination conducted by the worst elements of the British tabloid media.

Many of the stories published in these newspapers are designed to ‘monster’ the individual, in flagrant disregard for his reputation, privacy and rights to a fair trial.

These newspapers have now apologised to him and paid substantial damages.”

Bambos Tsiattalou, the solicitor who advised Mr Jefferies after he was taken into police custody, said that the media were given a fair warning to be careful about what they published.

He said: “We warned the media by letter, immediately following Mr Jefferies’ arrest, in the strongest possible terms to desist from publishing stories which were damaging or defamatory.

“We were dismayed that our warnings went unheeded and are pleased that the newspapers in settling Mr Jefferies’ claims have acknowledged the extent of the damage to his reputation.”

The papers’ publishers – News International, Trinity Mirror, Daily Mail & General Trust, Express Newspapers and Johnston Press – will now have to fork out substantial sums in damages and legal fees.

But Charalambous pointed out that once the rules over conditional fee (no win, no fee) agreements change next year, “the victims of tabloid witch hunts will no longer have the same access to justice.”

via Eight newspapers pay libel damages to Christopher Jefferies | Media | guardian.co.uk.

And there’s more:

Plus the two best-known UK tabloids have been found guilty of contempt of court (a charge that is filed against them too rarely). This is what italian papers should go down for, having leaked the Perugia investigation before it was complete, in brazen contravention of Italian law. Problem is that Italy doesn’t apply the law, most obviously because it is the police and the magistrates who do the leaking. Or did I misunderstand something?

Here is the Guardian again:

Joanna Yeates murder

Christopher Jefferies was intially declared a suspect and arrested in Joanna Yeates murder case, but was released later without charge. There was intense media speculation about his life. Photograph: Tim Ireland/PA Wire/Press Association Images
…
The Sun and the Daily Mirror were found guilty of contempt of court for publishing a series of “extreme” articles about a suspect who had been arrested by police investigating the murder of the landscape architect Joanna Yeates.

The Daily Mirror was fined £50,000 and the Sun £18,000 after the high court ruled that the papers posed a “substantial risk” to the course of justice in their reporting on the arrest of Christopher Jefferies, Yeates’s landlord, who was later released without charge and was entirely innocent of any involvement.

The Daily Mirror fine is the biggest against a British newspaper for contempt since 2004, when the Daily Star was fined £60,000 for revealing the identities of two Premiership footballers at the centre of high-profile gang rape allegations.

In a separate legal action eight national newspapers, including the Daily Mirror and Sun, collectively paid six-figure libel damages to Jefferies following allegations made about him in January, when the police hunt for Yeates’s killer was at its height.

In a written judgment on the contempt of court action handed down at the high court, the Lord Chief Justice, Lord Judge, Lord Justice Thomas and Mr Justice Owen described the Daily Mirror articles as “extreme” and “substantial risks to the course of justice”. The judges said the Sun’s coverage of Jefferies created a “very serious risk” that any future court defence would be damaged.

Lord Judge said: “The articles in the one issue of the Sun were written and laid out in such a way that they would have conveyed to the reader of the front page and the two inside pages over which the stories were spread that he was a stalker, with an obsession with death, who let himself into the flats of other occupants of the building where Miss Yeates lived, and that he had an unhealthy interest in blond young women.”

The court gave the Daily Mirror publisher Mirror Group Newspapers extended time in which to launch a petition for permission to appeal to the supreme court.

Vincent Tabak, a 33-year-old engineer, pleaded guilty to manslaughter but has denied murdering Yeates, who was found dead on a roadside verge in Failand, Somerset, on Christmas Day 2010. Tabak, who lived next door to Yeates, is due to go on trial accused of murder at Bristol crown court in October.

Tabloid media coverage at the time of Jefferies’s arrest was intense, with speculation about the suspect rife in newspapers and the internet. Dominic Grieve, the attorney general who brought the court action against the two papers, issued a rare warning to the press at the timeabout their reporting.

Two of the three articles found in contempt of court were published the day after Grieve’s warning, on New Year’s Day. The attorney general welcomed Friday’s judgment, saying: “[The Daily Mirror and Sun] breached the Contempt of Court Act and the court has found that there was a risk of serious prejudice to any future trial.”

Ken Clarke, the justice secretary, echoed the attorney general’s warnings in March when he said that media focus on suspects in recent criminal cases had been “startling” and “far removed” from what it was just a few years ago.

Contempt of court proceedings are infrequently issued against newspapers. It is more unusual still for the attorney general to take action in defence of an individual who has not been charged.

Eight national newspapers separately issued a public apology to Jefferies over libellous claims made about him in the aftermath of his December arrest. The Sun, Daily Mirror, Sunday Mirror, Daily Record, Daily Mail, Daily Star, the Scotsman and Daily Express agreed to pay the retired public-school teacher damages.

Lawyers acting for Jefferies said he had been the victim of “regular witch hunts” in more than 40 articles in the tabloid papers. Bambos Tsiattalou, the solicitor who advised Jefferies after he was taken into police custody, said that the newspapers had ignored warnings to be careful about what they published.

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News from around the Third World

July 28, 2011

We start our report in the Third World’s richest nation, Italy.

I haven’t blogged about the Sollecito-Knox Satanic ritual murder case in my local provincial capital Salem*  for some time because the case has been unravelling as predicted. The star witness turned out to be a junkie-dealer who already testified for the police in two other murder trials (so much for drug addicts spending all day in bed). And the forensic procedures and DNA ‘evidence’ have been shredded by a long report from Rome’s Sapienza University.

We are now in the end game. The prosecutor Giuliano Mignini is firing off criminal defamation suits against people who point out he is unfit for office even in Italy at a rate unprecedented even for him. After the Rome academics introduced their report in court in Perugia this week, Mignini and his pals despatched two squad cars of police to Sapienza University in the capital in what appears to be a bizarre act of attempted intimidation. (The university sent them packing.) There is no real doubt that Sollecito and Knox are going to go free. The main point of interest for Italy-watchers is to ascertain that ABSOLUTELY NOBODY is held responsible for burning witches**. That includes the prosecutors; the half-witted magistrates; the gormless, overcharging lawyers; the thoroughly incompetent and corrupt police; the lazy and self-serving journalists who leaked the official side of the investigation at every turn in contravention of the law, and every other medievally-minded member of this shameful lynch-mob***.

When nobody is held responsible, it is important that you do not think of Sollecito and Knox. A couple of years inside will for them have been an interesting life experience. Think  instead of the family of Meredith Kercher, the murdered girl. They are the real victims of this pantomime performed by adults with uniforms and titles.

*Known in dialect as Perugia
** Should read: ‘sending innocent kids to prison for life’.

*** Should read: ‘professional mafia’.

A link to another part of the Third World that I cover is provided by poor old Google. The same US internet firm which last year decided to stand up to China by refusing orders to censor its service recently got a demand via Mr Mignini to shut down an Italian blog he does not like. The China decision has cost Google much of its market share in the Middle Kingdom as the Chinese government does almost everything it can to slow down and disrupt Google’s service (pushing many users to move to the Chinese Google rip-off provider, Baidu). In Italy, Google has already been intimidated under the country’s media laws in a case that saw some of its executives sentenced to prison (they won’t actually go, because that only happens to kids and poor people). So what did Google do when Mignini came knocking? The firm immediately pulled the site Mignini does not like (without contacting the blogger), even though there is no prima facie evidence it contains anything libelous under Italian law. The firm that took on the Dragon is caving in Italy. However, the blog in question has been moved to WordPress (which I use!), and which so far seems to have the necessary cojones for our Italian adventure.

The global battle against men who live with their mums, men with comb-over hair-cuts and men and women who call themselves ‘doctor’ but don’t actually have a doctorate, goes on.

We close today on the subject of the recent, horrific high-speed rail crash in China’s Zhejiang province and the official efforts to (literally) bury the truth of what happened (with corpses still inside). Rather than more news reports that you have probably already seen, here is a translation of Han Han, China’s most famous blogger. I wonder, is there anything in these lines that rings a bell for Italians with regard to the conduct of their own ‘professional’ classes:

“The Derailed Country”

You ask, why are they acting like a bunch of lunatics?

They think they’re the picture of restraint.

You ask, why can’t they tell black from white, fact from fiction?

They think they’re straight shooters, telling it like it is.

You ask, why are they running interference for murders?

They think they’ve thrown their friends under the bus. And they’re ashamed.

You ask, why all the cover-ups?

They think they’re letting it all hang out.

You ask, why are they so irretrievably corrupt?

They think they’re hardworking and plain-living.

You ask, why are they so infuriatingly arrogant?

They think they’re the picture of humility.

You feel like you’re the victim. So do they.

They think: “During the Qing Dynasty, no one had television. Now everyone has a television. Progress!”

They think: “We’re building you all this stuff, what do you care what happens in the process? Why should you care who it’s really for, so long as you get to use it? The train from Shanghai to Beijing used to take a whole day. Now you’re there in five hours (as long as there’s no lightning). Why aren’t you grateful? What’s with all the questions?

“Every now and then, there’s an accident. The top leaders all show how worried they are. We make someone available to answer journalists’ questions. First we say we’ll give the victims 170,000 kuai apiece. Then we say we’ll give them 500,000. We fire a buddy of ours. We’ve done all that, and you still want to nitpick? How could you all be so close-minded? You’re not thinking of the big picture! Why do you want us to apologize when we haven’t done anything wrong? It’s the price of development.

“Taking care of the bodies quickly is just the way we do things. The earlier we start signing things, the more we’ll have to pay out in the end. The later we sign, the smaller the damages. Our pals in the other departments—the ones who knock down all the houses—taught us that one. Burying the train car was a bonehead move, true, but the folks upstairs told us to do it. That’s how they think: if there’s something that could give you trouble, just bury it. Anyway, the real mistake was trying to dig such a huge hole in broad daylight. And not talking it over with the Propaganda Department beforehand. And not getting a handle on all the photographers at the site. We were busy, ok? If there’s anything we’ve learned from all this, it’s that when you need to bury something, make sure you think about how big it is, and make sure you keep the whole thing quiet. We underestimated all that.”

They think that, on the whole, it was a textbook rescue operation—well planned, promptly executed, and well managed. It’s a shame public opinion’s gotten a little out of hand, but they think, “That part’s not our responsibility. We don’t do public opinion.”

They’re thinking: “Look at the big picture: We had the Olympics, we canceled the agricultural tax, and you guys still won’t cut us a break. You’re always glomming on to these piddling little details. No can-do spirit. We could be more authoritarian than North Korea. We could make this place poorer than the Sudan. We could be more evil than the Khmer Rouge. Our army’s bigger than any of theirs, but we don’t do any of that. And not only are you not thankful, but you want us to apologize! As if we’ve done something wrong?”

Society has people of means, and those without. There’s people with power, and those that have none. And they all think they’re the victim. In a country where everyone’s the victim, where the classes have started to decouple from one another, where it’s every man for himself, in this huge country whose constituent parts slide forward on inertia alone—in this country, if there’s no further reform, even tiny decouplings make the derailings hard to put right.

The country’s not moving forward because a lot of them judge themselves as if Stalin and Mao were still alive. So they’ll always feel like the victim. They’ll always feel like they’re the enlightened ones, the impartial ones, the merciful ones, the humble ones, the put-upon ones. They think the technological drumbeat of historical progress is a dream of their own making.
The more you criticize him, the more he longs for autocracy. The more you gaomao him (piss him off), the more he misses Mao.

A friend in the state apparatus told me, “You’re all too greedy. Forty years ago, writers like you would’ve been shot. So you tell me, have things gotten better, or have they gotten worse?”

I said, “No, you’re all too greedy. Ninety years ago, that kind of thinking would have gotten you laughed out of the room. So you tell me: after all that, have things gotten better, or have they gotten worse?”

Worthwhile links:

No longer on Google’s Blogger, but now at WordPress (great courtroom detail):

http://perugiashock.com

Long reports can also be funny when they deal with Italian police conduct:

http://knoxdnareport.wordpress.com/

The highlights of this report (at least those that have thus far been translated into English) are here:

  • 5 big dos and 5 big don’’ts of crime scene investigation (Ooops. In Perugia the police and their ‘scientists’ did none of dos and all of the don’ts. Guess they had a bit of an off-day…)

http://knoxdnareport.wordpress.com/contents/conclusions-1/notes-on-inspection-and-collection-techniques/

  • Overall conclusions that police and their ‘scientists’ ignored standard international protocols, failed to perform some tests, misinterpreted results in others, claimed to have ‘scientific’ results where they did not:

http://knoxdnareport.wordpress.com/contents/conclusions-2/

Note the discovery at Sapienza of starch (err…food) on the knife between the blade and the handle. Prosecution claimed the knife had been thoroughly cleaned by the killers, but their great forensics still uncovered (internationally-unacceptably small trace of) Kercher blood on the blade. Presence of starch residue now shows satanic ritutal murder gang cunningly cleaned off blood but not food from the knife… just like they cleaned all their fingerprints, bloodprints, DNA, etc from the room where Kercher died while leaving Rudy Guede’s evidence all over the place. I say: Burn ‘em already…

Finally, here is that YouTube video of the chief investigator on the Sollecito-Knox case again, talking about his ‘exquisitely psychological’ investigation. There have been another 2,000 hits since I first posted it. It deserves 2 million. You will not find anything funnier on a comedy programme, so settle for Italian reality and send it to your friends.

http://www.youtube.com/watch?v=sWkZPWRS3N0

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Homecoming

July 25, 2011

I.

On Saturday 16 July I was robbed for the second time since living in Italy on the same train, the one that runs from Fiumicino airport into Rome. On both occasions I was targeted because I was travelling with children and had a lot of luggage. The first time I was with my pregnant wife and one child, going to Malaysia to start work on my last book, Asian Godfathers. This time I was returning from a month in China with my 8 year old daughter where I finished my latest book, to be published this year. This time I lost not only passports, wallet, laptop, etc, but also 500 pages of interview notes. The robbery was very professionally done, involving at least two people, and perfectly timed as the train reached a station. The Italian passenger next to me was also fully taken in. Money and cigarettes were dropped on the floor, and my daughter’s case moved, by one person, my rucksack grabbed from behind my daughter’s back by another.

The theft problem on the Fiumicino trains is endemic and could not exist without either the studied incompetence or the collusion of Italy’s railway police (Polizia Ferroviaria or Polfer). In 2004 I was robbed beneath a mass of video surveillance cameras on platform 26 at Termini station; I noted the location of the nearest cameras and the exact minute the robbery occurred; the police blithely said the cameras do not work. This time the theft occurred as the train arrived at Tuscolana station. A young policeman who helped me check bins around the station in the vain hope of finding my documents said on the subject of police collusion that he himself found it strange when recently transferred in to this unit that he was not asked to start out in plain clothes making some arrests on the trains; that, he said, is the norm in other rail police units; here, he was sent out on day one in full uniform.

When I took my daughter back to the station where we were robbed (the train had carried on to the next stop), we found the decoy (the ‘palo’) in the robbery sitting on a bench there. I asked him in Italian: ‘You were the person who dropped the money and cigarettes on our train, weren’t you?’ In front of myself and my daughter he said: ‘Yes’. He wasn’t afraid, didn’t try to run. When the police showed up he said he was just a builder catching a train (He was smoking a cigarette from the red Italian brand packet he had dropped before my eyes and showed the police the charger unit for an electric tool he had in his pack — with no tool). They searched him, said he had no prior form, and let him go. I gave him my phone number on a piece of paper, begging him to ask his accomplice to return the documents. That, really, is where Italy is at. You beg the person who robs you for some sympathy, because nothing else works.

Then we went to do the ‘denuncia’ at the Tiburtina police station. After 17 hours flying, and two hours of being robbed and looking for my documents, I rang the bell and the policeman who came to the door told us to come back in half an hour. I asked if we could wait in the waiting room inside. I had one credit card in my pocket, but no money, because four bank machines I had tried were out of order (the phone lines were down). The policeman said we could not come into the station and should wait in the street. When we returned, a policeman holding an i-phone, sporting an expensive watch and wearing spotless Sunday casuals launched into the preemptive statement about what a terrible place Italy is, how foreigners are mad to live here and how under-resourced the railway police are. Who can say, but he did not look to me like he works night and day catching thieves on the trains. Instead, he patronised my daughter: ‘Ciao, bionda.’ She is only eight, but she is already old enough to spot a certain kind of Italian man.

The policeman was insistent that I fill out a denuncia in English — instead of the standard Italian form — saying it ‘would be translated’, and despite my expectation and willingness to do this in Italian. As ever, you wonder why. Do the police really tell us how many people get robbed on that line? All we know for sure is that almost all the victims are foreigners.

Throughout this whole experience, my daughter and I were calm and accepting of our situation, including with the man who helped rob us. (My daughter cried very briefly at one point, for just about 30 seconds. She was trying to blame herself for the robbery because she asked to sit on the top deck of the train.) When I thought about this the next day, I realised that we have become the kind of people who accept suffering and unfairness as a part of normal life. In a sense, we have become Italian. The problem is — with the very greatest respect — I don’t want to be Italian.

II.

On 21 July I spent some time phoning around the railway police (Polfer) in search of published statistics about crime on the two Fiumicino train lines (to Termini and to Tiburtina). After some persistence I was put through to a woman who introduced herself as ‘Dottoressa Caccia’. Ms Caccia was the only person in my enquiry who was willing to give a name. (A web search suggests she is likely Barbara Caccia; like the vast majority of Italians who present themselves as ‘doctor’ she holds only an undergraduate degree.) Ms Caccia said that her office is responsible for Polfer statistics and, although my experience of being robbed twice on the airport lines was unfortunate, the statistical reality is that crime on the Fiumicino trains has fallen ‘at least 85 percent’ in the ‘last five years’. She was, however, unable to give me actual numbers, because she did not have them ‘sotto mano’.

After the robbery on 16 July, Gaia and I had to return from Tiburtina station to Tuscolana to see if my bag and papers had been abandoned (when we found the decoy sitting at the station) and then back to Polfer at Tiburtina station to do a denuncia. As we sat on our cases on these two trips, I watched at least two more pairs of impoverished eastern Europeans walking around the carriages in a manner wholly unnatural for actual passengers. Almost certainly they were looking for robbery victims. The policeman who took our denuncia said himself that we can have ‘no idea’ of the scale of theft on the line when he reflexively sought to defend the performance of Polfer. The helpful policeman who helped me look for my papers around Tuscolana station described the situation as running out of control, and said he understood that a member of parliament, whom he believed is from the Northern League, had been robbed on the train a few days previously.

There is no way that crime on these trains is down 85 percent. When I asked Ms. Caccia whether her numbers jived with reports received by foreign embassies about stolen passports, she pretended not to understand what I was saying and became defensive. ‘My memory is not perfect,’ she stated with respect to the data, telling me to write a request for figures on the state police ‘scrivici’ (write to us) web site. This site, I discovered, limits enquiries to 600 characters (about 100 words). None the less, I wrote a request, reassured by Ms Caccia’s guarantee that ‘If you write, we must respond.’

Thinking about Ms Caccia’s ’85 percent fall’, I looked again at the ‘foreigner’ denuncia that the officer at Tiburtina’s Polfer station had been so adamant I should fill out in preference to the standard Italian one. I realised what made me uncomfortable about the form: it contains no reference number of any kind. On Carabinieri denuncia forms I have looked at, there is always a ‘Numero protocollo Sdi’ and sometimes a ‘Numero protocollo Verbale’ as well. In other words the document is logged in ‘the system’. What I was made to fill out at Tiburtina station has no log in the system. It is simply a bit of floating paper, that could disappear without leaving any suggestion that it ever existed.

In addition, I note that at the top of the Polfer form are two small boxes to be ticked for either ‘stolen’ or ‘lost’. I missed these in filling out my form at the station. What then happened is that the Polfer officer photocopied my hand-written version, stamped a photocopy, and only ticked ‘theft’ on the copy he gave me. I very clearly watched him, through an internal office window, do the copying of the original and then bring a copy to me. I did not see him tick ‘stolen’ on the original or on any other copy, although he may have had me sign more than one copy. I cannot remember.

So. Is theft on the Fiumicino line down 85%? Or is reported theft down 85%?

III.

The problem with my mini-investigation is that checks with consular sections of embassies do not provide much useful evidence. The British embassy confirms it has had several thefts on the Fiumicino trains reported in recent weeks. But the US, Australian, New Zealand and Canadian embassies say that while they do have thefts reported on the trains, they see no particular trend. The Japanese say that the vast majority of thefts affecting their nationals at present are on Line A of the Rome Metropolitana (underground) on stops close to Termini station. While the Chinese say that most of their tourists come in groups and are rigorously warned by tour leaders about the risk of theft on Italian trains. (The Chinese embassy web site has descriptions of scams like the one that happened to us written up in great detail. There is also a description of an entire Chinese tour group recently being drugged and robbed on an Italian train. Of course all this is in Chinese… if stated in Italian, the content would likely lead to a minor diplomatic incident.)

What the consulates told me privately that they see does not add up to the industrial scale theft which I suspect goes on perennially on the airport trains. The reason may be that victims only turn to consulates if they lose their passports or all access to money, or both. And the vast majority of people are not as dumb as I am in keeping all their stuff in their back-pack. They have passports and credit cards closer to their person, in a wallet or pouch.

If I had not lost our passports on both occasions, it is unlikely I would have contacted the British embassy in Rome. After all, embassies are hardly places that invite extra business, and the British one in Rome  is about as bad as it gets — one is told the (out-of-country) emergency number is for cases of death or equivalent seriousness, while the switchboard is only manned from 0915 to 1200 each day.

My first letter to the US embassy last week was met with a written response that any information about thefts on trains affecting US citizens ‘is police information held by Italian law enforcement authorities. We therefore suggest you to refer to the Italian Police/Carabinieri to get the needed information.’

The modern embassy/consulate is a pretty shameful institution, and robbery victims are sensible to avoid it unless absolutely necessary. So the one potential source of reliable information about the scale of crime on trains in Italy — and the Fiumicino lines in particular — is Polfer. Which brings us back to those new ‘foreigner’ denuncia forms with no serial numbers. I will pass this post on to various foreign embassies in Rome and see if anyone is interested. Hold your breath!

Exhibits:

The header of a standard Carabinieri denuncia form, with ‘protocollo’ serial numbers, is here.

The front of the foreigner denuncia form I was told to fill out is here. There is no serial number of any kind. This is the photocopy of the original given to me by the Polfer policeman. He has crossed the ‘Report of theft’ box at the top left, but he did not do this in front of me for the original or for other copies. (I have blanked out my phone numbers on this scan.)

The back of the foreigner denuncia form is here. It is all ready for one of those Italian policemen who are fluent in foreign languages to bang out the translation and log the theft into the statistical record.

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