Is a bank run about to bring Europe to its knees?

Some market watchers say yes, pointing ominously to the torrents of money pouring out of Ireland. Irish bank deposits declined in November for the fourth straight month, the central bank said last week. Overseas deposits fled the country at their fastest pace in more than a year.

The deposit flight compounds the stress on a financial system whose massive property-lending losses already have driven the government to accept an unpopular bailout from the European Union and the International Monetary Fund.

Worse yet, it shows that the solutions policymakers slapped together in the fall of 2008 helped in some cases to create even bigger problems — ones that are now coming due.

Unconditionally guaranteeing bank deposits is just such a policy, in a country where loan losses made the banks insolvent, job loss left many taxpayers peniless and deposits now at least double annual economic output.

And this time, given the unpopularity of bailouts and dysfunctional European politics, there is ample reason to fear the banking mess won’t so easily be swept aside.

…..read more HERE

In this issue

• While you were sleeping: equity markets remain firm across the board, U.S. dollar slipping, overseas data has been sparse and mixed

• Oh, Canada! The market clearly favours the country with the more sound national balance sheet and more solid long-term economic prospects

• Markets lining up behind Bernanke? Look for what happened in the past four months to have been nothing more than a bad case of misplaced optimism

• ISM – the good and the not-so-good: the headline numbers seem impressive but still below the peak posted last April

• A December to remember: half of the gains in the S&P 500 for 2010 can be attributed to the run-up in December

• Getting a grip: the U.S. economy has its share of structural problems that will come home to roost at some point

• Signs of exuberance abound

• What was the real surprise of the year? That we would close 2010 with the yield on the 10-year U.S. Treasury note anywhere near 3.3%.

• Is the sun rising in Japan?

As big as the Yukon Gold Rush was in 2010, I think it can be even better in 2011. Why? After over two decades playing (and sometimes getting killed by) the junior resource sector, it feels like a near “perfect-storm” has come together for this play. Rising metal prices, increasing interest in resource stocks and actual decent results all have come together for this seasonal play. While renewed exploration won’t start for a few more months, I believe any correction is already behind many of the key area players. I suspect the shares can move long before the first drill bit hits the ground.

Fascinating and scary….now you guys know why I don’t believe in buying love, I mean diamonds. Wink. – Miguel Barbosa

Introduction (Via Jay Epstein @ Atlantic) The diamond invention—the creation of the idea that diamonds are rare and valuable, and are essential signs of esteem—is a relatively recent development in the history of the diamond trade. Until the late nineteenth century, diamonds were found only in a few riverbeds in India and in the jungles of Brazil, and the entire world production of gem diamonds amounted to a few pounds a year. In 1870, however……