June 29/Tuscan Steak

***Italy beats Germany in the UEFA Euro 2012 semi finals…do I need to say anything else?*** Angie is “livin la vida loca”   and as the song says ….”she’ll make you take your clothes off and go dancing in the rain, she’ll make you live her crazy life as she takes away your pain – like a bullet to the brain….” Mario, Francois and Mariano used the powers of persuasion to get her to see the light or did they?  They agreed to spend about $150 bil on growth projects across the 17 nation EZ…..but not before forcing everyone to remain at the table by refusing to any agreement before getting some concessions on immediate short term assistance……the EZ leaders agreed to radically restructure the Spanish bank’s recapitalization plan….EU bailout funds to be used directly for failing institutions resulting in relieving the sovereigns of the burden……..but there is one catch……this deal will NOT happen unless or until the Eurozone creates a SINGLE banking supervisor that reports to the European Central Bank…..This is key…..Angie walks out the front door and comes in the back door…..Guten Morgen! This outcome could in fact be the beginning of the most far reaching change for European banking supervision….as the 17 different country banking supervisors will now be replaced by one supervisor for all of the zone…….creating the banking union that Angie has been pushing for…..and as a result for her cooperation…a northern group of creditor countries led by Germany will gain MORE control over all of the EZ banks via this new single supervisor.   A key feature is that this new supervisor (most likely German speaking) will be able to force bank recapitalizations on those weaker banks much like the US did in 2008 post the Lehman failure. Yields in Spain and Italy fell sharply in early trade….Italian yields now below 6% and Spanish yields fall below 7%…the banking industry moves higher in early trading as investors welcomed this decision….and under the proposed new rules – suggested by the Italians – any country that comes to the table and requests bailout funds will not be subject to the stringent/suffocating Greek type of oversight (let’s see how the Greeks feel about this development)….instead they would just have to maintain EU debt and deficit commitments…which will surely be tightened…… and this story is far from over….there is still a lot of conditionality and the devil is in the details….-  “her lips are devil red and her skin the color of mocha – she will wear you out livin la vida loca….” And the mkts are loving this…..European mkts are exploding to the upside…FTSE +1.4%, CAC 40 + 2.5%, DAX +2.13%, EUROSTOXX +2.4%, SPAIN +2.4%, ITALY +2.8% as relief washes over the continent….chatter already starting that Angie gave too much or that she “capitulated”…… will she sell this to her countrymen?  She is no dummy…..she needs to be the one who now controls the new banking supervisor – that’s how…..the German finance minister already noting that any aid will have “clear and certain conditions”…. Back to the US…..end of month and end of qtr futures are on fire right now as mkts appear relieved over the European news….Futures are +16 trading at 1338 – as the bulls are loving this and the shorts are getting squeezed – Mkt blasted thru short term resistance at 1325 and now is at the longer term resistance at the descending 50 DMA of 1340.  Expect continued window dressing for qtr end which will likely keep the mkts up here all day. Additionally the mkt will continue to digest yesterday’s Supreme Court decision to uphold Obamacare as the analysis and mud slinging continue… we saw that rather than deal with the issue on the constitutionality of whether the government can force people to buy insurance…the court turned this into a political matter by simply redefining the issue as the government has the power to “tax” people who choose not to get health insurance….Republicans & Marco Rubio wasted no time in hammering home this issue….now that the Supreme Court has ruled the government has the power to “tax” people they all raise the point that this now gives government the power to use the IRS to go after the “uninsured” citizens to enforce this law….and the fight continues and will surely get bloodier…. From an economic perspective, the big losers were the health insurers.  As you can imagine their costs will likely go up as they prepare for Obamacare resulting in higher health insurance premiums for all…..You don’t think that these companies are gonna just eat the increased cost do you?  And the 21 taxes included in this bill – Does this run counter to the Presidents pledge to not raise taxes on the low & middle class? “The high court’s ruling leaves in place 21 tax increases in the health-care law costing more than $675 billion over the next 10 years, according to the House Ways and Means Committee. Of those, 12 tax hikes would affect families earning less than $250,000 per year, the panel said, including a “Cadillac tax” on high-cost insurance plans, a tax on insurance providers, and an excise tax on medical device manufacturers.” Eco data today includes – Pers Inc exp of 0.2%, Pers Spend exp of 0.0%, Chicago Purch Managers Survey 52.3, and NAPM Milwaukee exp of 55.2 – these last two reports pointing to the future expectations of regional purchasing managers….. Take good care – Enjoy the weekend….**Note – I am out on Mon – Wed – Next note will be Thursday July 5th. Take Good Care KP
TUSCAN STEAK Steak…for the meat lovers you can have it so many ways….you can have it  Pizzaiola, or Sicilana, you can even make Steak Puttanesca……but today I will share a favorite Florentine recipe from the days I studied in Florence during my junior year abroad.  20 yrs old – living in Florence…doesn’t get any better….. Start with a nice cut T-Bone or Rib Eye – always on the bone as the bone provides so much more flavor and makes a nicer presentation for your dinner guests. You will need:  The steaks, 10 cloves of Garlic, Pork fatback, dried rosemary, coarse salt (kosher salt works nicely) and pepper. Remove steaks from fridge – rinse under cold water and pat dry with a paper towel.  Leave on a platter for about 20 mins so that they get to room temp.   In a food processor blend the pork fatback, garlic, rosemary  to a paste like consistency.  Next – wash you hands and massage this mixture into the steaks – taking time to make sure that you have worked the meat and the mixture well. Now season with S&P.  Set aside. Light the grill  – heat to high and allow the grill time to heat up  – it has to be nice and hot.   Place the steaks on the grill and cook for about 5 min/side – depending on thickness – This will result in a med rare steak…so if you add a couple more mins on each side you will get a more cooked center.  Remember though – when you remove the steaks from the grill – you will cover and let them rest for 4 mins allowing them time to continue cooking and allowing for the juice to flow.    Once ready serve immediately on warmed plates.  Accompanied by both a starch and a vegetable.  Garlic herb rice and brussel sprouts* are a good option or mashed potatoes and peas –  along with a mixed green salad with red wine vinaigrette dressing. * brussel sprouts – the easy way.  clip of the ends of the sprout – rinse and drain and place in baking dish.  Season with s&p, fresh lemon juice and 1/2 stick of butter – cut into pieces and place strategically around the sprouts.  Cover and place in oven – preheated to 400 degrees.  Cook for 35 mins….test with fork to determine readiness. Enjoy this steak with a robust red wine of your choosing. Buon Appetito.
Kenny PolcariJune 29/Tuscan Steak