Long term US Treasury yields are at historic lows : 2% for ten-year bonds, 3% for 30-years. You have to go back to the Truman and Eisenhower administrations to find yields this low. There’s a good-news-bad-news story here. Investors are betting on the solidity of the US Treasury and the US dollar in a time when everything else looks too risky by half. That’s the good news. And it’s right. There is absolutely ZERO chance of the US government defaulting on its dollar-denominated debt. Why ? Because it can always print more dollars to pay off the debt. And if the Treasury won’t do it, the Federal Reserve System will. That debt will be paid.

The bad news is that there is nowhere for Treasury yields to go but UP. And as yields go up, bond prices fall. So if you buy a 30-year T’bond now, and yields go up to 6% in a few years, your bond will be worth 65 cents on the dollar. You’ll get paid off, but if you need to liquidate before maturity, you’ll take a loss. And why should yields go up? The bonds are currently pricing in low inflation and low productivity of capital. When an economic expansion gets going, inflation or real returns to capital have to go up. And with that, interest rates, eroding the market value of your bonds.

Treasuries are expensive now because investors are scared of everything but inflation and prosperity. If either of those occurs, they’ll have another thing to be scared of.

What’s a fixed income investor to do? Ladder the portfolio, emphasizing the short end with its lower risks and lower returns; CD’s at 1% instead of T’bills at 0.10%; muni’s at an historically high yield premium over Treasuries.

Pre-soak the beans for about 8 hours. Boil them in two quarts of water.In another pot, sauté the sliced onions in olive oil. Slowly add all of the other vegetables, chopped into large chunks. Let them slowly soften for about 10 minutes. Then add the water leftover from cooking the beans and half of the beans. Add the other half after pureeing them. Add salt and pepper. Cook over low heat for about two hours. Now add the sliced bread, stir well and let it boil for ten more minutes. Let it stand. Serve in earthenware bowls. Pour in a little genuine Tuscan extra virgin olive oil with a full, fruity flavor.

Click on “Slideshow” at

http://picasaweb.google.com/Susan.S.Starr/Florence2007?authkey=ZUhoUIGby64

Top Choices

Trattoria Roberto, Via Castellani 4r (centro storico, near the Uffizi), 055 21 88 22. Excellent fish and seafood, carpaccio of smoked swordfish and salmon.

I’che c’e c’e (rough translation: “what you see is what you get”), Via Magalotti 11 (Santa Croce), 055 216 589. Very well prepared Tuscan favorites. Good ribollita. Excellent desserts (including the secret favorite: Catherine di Medici – fondant chocolate cake).

Trattoria Tre Soldi, Via G. d’Annunzio 4a/r (outside the center of town, in Le Cure), 055 679 366. Very well prepared and varied Tuscan style. Excellent tagliatte di manzo, panna (rich thick cream covered with fruit or chocolate).

Osteria Caffe Italiano, Via Isola delle Stinche 11 (Santa Croce), 055 289 368. Very well prepared Tuscan dishes. Excellent grilled duck breast. Ambitious wine list and wines by the glass.

Baldovino, Via San Giuseppe 22r (Santa Croce), 055 241 773. Very popular for good pizza. Excellent smoked fish carpaccio, excellent pasta, tortellaci with pesto.

Trattoria Antellisi, Via Faenza 9r (San Lorenzo), 055 216 990. Small selection of Tuscan standards and daily specials. Best ribollita in town. Fresh fish daily specials are excellent.

Trattoria Cibreo-Cibreino, via del Macci 122r (eastern Santa Croce), 055 234 11 00. Very small; does not take reservations. May need to arrive early or late or lucky to get a seat. This is the low-price counterpart of the expensive Cibreo. They share a kitchen and part of a menu. The antipasti are excellent: zuppe de pesce, polenta. Main courses can be excellent and interesting.

Top Choice Specialties

Gelateria: Vestri, Borgo degli Albizi (eastern centro storico)
Gelateria: Grom, Via delle Ocche (centro storico, two blocks from Duomo)
Pasticceria: La Loggia degli Albizi, Borgo degli Albizi (eastern centro storico)
Hot chocolate: Café Rivoire, Piazza della Signoria (centro storico). Unbelievably rich and chocolatey hot chocolate. Cognoscenti pay first at the cashier and drink at the bar (for a lower price than at the tables — but the tables have a view of the piazza). Available with cream (con panna) or without.
Food markets: The San Lorenzo and San Ambrogio markets are amazing. Dozens of butchers, delicatessens (salumerie), fish mongers, cheese stores, fruit and vegetable stands, with an amazing variety of foods.

Notable:

Aqua al Due, Via della Vigne Vecchia 40r (centro storico, next to Bargello), 055 284 170. Very popular. Immense degustazione (tastings of pasta and antipasti), good tagliatte di manzo.

Ristorante Toto, Via S.S. Apostoli (centro storico). Large ristorante, may not need to reserve. Good bistecca fiorentina, good pizza, carpaccio of fish affumicato.

Nerbone, in the Mercato centrale (San Lorenzo) lunch only. Legendary sandwiches.

Da Mario, Via Rosina 2r (San Lorenzo, a block from the Mercado Centrale; operates same days as the mercato) Lunch only.

Il Latini, via del Palchetti 6 (western centro storico), 055 21 09 16. Immensely popular, feels like a tourist trap. Reserve, then push to the head of the line to announce your reservation. The food is sound, including surprising edible Trippa al Fiorentinna.

Camillo, (Oltrarno), Borgo Sant’ Jacopo 57r, 055 21 24 27, sound trattoria.

Casalinga, (Oltrarno), via del Michelozzi 9r, 055 21 86 24, sound trattoria, authentic local clientele.

La Settimana Santa in Florence and Naples

Holy Week activities start more than a week before Easter with a band and parade on Saturday evening through the old center of Naples. Flag-carriers, drum majors, an enthusiastic crew. Brass section, drums, and eight men carrying a shrine to the Virgin came down the street. From our third floor (2^o piano) room in Hotel Chiaja www.hotelchiaia.it directly overlooking Via Chiaja there was a grand view (and complete sound) of the small march. The brass included a distinct air of a minor key (think of the brass in a Fellini film).

The hotel itself is colorful, formerly the townhouse of Il Marchese Nicola Lealdano Sasso La Terza,. The hotel has a grand gate opening into a courtyard. On weekends and evenings the gate is closed, leaving a (really) small doorway (no tall guest need plan on an evening out or on coming in). The building, which also houses the Uruguayan consulate in Naples, is six very tall stories high, with an imposing outdoor rough stone staircase. Each story requires two flights of stairs. There are high ceilings, balconies overlooking the street, long corridors, closed circuit television security (even southern Italians regard southern Italy with distrust), and a reputation for disreptuable use in the far distant past.

Palm Sunday in suburban Ercolano: a street fair. The same sound of brass in a minor key, this time playing a martial adaptation of “Red River Valley”! Palm Sunday evening back on Via Chiaja, another smaller march of barefoot troopers, carrying a shrine and playing “Red River Valley” once again. Good Friday at Chiesa di San Frediano in Lucca another barefoot procession, without music, in ceremonial black robes and black cloth caps, carrying a small shrine.

Il Scoppio del Carro

Easter Sunday in Florence was remarkable, http://www.italiansrus.com/articles/scoppio.htm. The celebration starts at 9:30 with a march to the Church S.S. Apostoli (2 short blocks from our flat on Via delle Terme). The marchers are in full renaissance regalia: costumes, plumed hats, carrying flags of Florence (three ostrich plumes arrayed like a fleur-de-lys). They stop at the church to pick up burning coals to carry to the Duomo. The march proceeds to collect the “carro” (an oversize — fireproof — cart carrying a large supply of fireworks) at the Porto Prato and then proceeds through the Piazza de Strozzi, the Piazza de la Republica, to the Duomo (Chiesa di Santa Maria del Fiore). A crowd awaits there. The marchers convey the coals to the pulpit of Duomo where they are put to good use, igniting the rocket. At 11:00, a rocket propelled incendiary dove travels from the pulpit of the Duomo on a wire to the carro igniting the fireworks. It’s midday but the fireworks and the exploding sounds are impressive. http://www.youtube.com/watch?v=LBS7eZFWvVw .

The cart remains at the Piazza del Duomo while the march returns to the Piazza de la Republica for displays of music, flag and baton twirling. Finally the march returns (after the occasional photo-op with a spectator) to the Torre de Guelfi (two blocks from our apartment) where the marchers end up behaving (despite mature years) like frat boys. A rousing good time was had by all!

Naples and Pompeii

Naples is south of Florence, only four hours by train.  The look is far more Mediterranean:  wrought iron balconies, baroque decoration, provision for shade and air.   Naples — built on a hillside sloping steeply to the sea — commands a grand view of its port and the coast. 

Pompeii:  Ancient Elegance 

The legendary first century A.D. ghost city of Pompeii  is in suburban Naples (reachable by light rail) on the Tyrrhennian seacoast.  It was the Roman La Jolla of its day, an elegant seaside residential community.   The remarkable quality is how elegant it still is; if you moved one of the grand Pompeiian residences to twenty-first century La Jolla, retrofitted utilities and plumbing, you’d have an elegant La Jolla house.

            A typically luxurious Pompeiian house had an opening (atrium) to the roof  providing collection of fresh water.  The walls of dining rooms, studies, bedrooms, bathrooms (for bathing —the latrine is separate), and living rooms are decorated with frescoed paintings and frescoed designs.  Floors are mosaic in elegantly small tiles.  Stone columns in the great rooms and the courtyard garden (peristyle) emphasize classical grandeur.  

            Guidebooks and the audioguide lovingly discuss the decor, especially the grandest frescoes or mosaics.   After a particularly glowing description, they then disappoint the visitor by announcing that the fresco/mosaic/sculpture is now in the Archeological Museum in Naples.  A visit to the museum in Naples makes the reason clear.   Pompeii is an open site, easily subject to theft.  The frescoes and mosaics deserve a secure home.  The best of the mosaics are extraordinary.  After two millennia the colors are fresh, the details rich, the rounded three-dimensional quality of the figures and objects represented is remarkable (apparently fourteen centuries ahead of its time, since it was unduplicated in the plastic arts until the Renaissance).  Our view of the museum’s frescoes was truncated in typically Italian fashion.  The principal suite of galleries of Pompeiian frescoes was “chiuso” (closed) because it was “in restauro” (under restoration).  That happens a lot in this part of the world.   

            The museum’s collection of ordinary household items was striking in another way:  how nearly up-to-date they look.   Biscuit baking tins, pitchers, saucepans, all look ready for use right now, though quaintly 19^th century, in dark-colored heavy metal.  They’re only eighteen centuries ahead of their time. 

            Three small galleries, “il gabinetto segreto” (the secret cabinet) in the museum’s Pompeiian collection, start with a posted memo announcing that the collection is open only by appointment and only to those of mature years.  Nevertheless, the door is open to all  museum visitors.  The collection is a variety of erotic and phallic representations; mainly elegantly executed erotic frescoes, also including phallic objects (oil lamps!) and sculptures.   Back in Pompeii (presumably well secured to protect its frescoes) is Lupanare (the bordello) with its own frescoed illustrations of coital positions.  The audioguide suggests that these variations are representations of selections from a Greek book of the first century — the audioguide apparently under the impression that Romans lacked erotic imagination. 

Small signs of everyday life in Pompeii: 

                        Crosswalks and wheel grooves on the stone-paved streets.  The streets are paved with well-fitted near-flat paving stones set deeply below the sidewalks (themselves at grade level).  Crosswalks consist of raised stones in the street for crossing the street from one sidewalk to the next without stepping into the street (sometimes filled with rainwater, sewage, horse droppings).  The crosswalks’ raised stones have a few inches of open space between them to allow the passage of chariot wheels.  Grooves worn in the road by years of passing wheels are evident, particularly at the crosswalks where wheels were focused on the narrow passageways. 

                        Lead piping for the municipal water supply.  In addition to individual structures’ water supplies from the atriums, there were public fountains for drinking water provided through an aqueduct.  Lead pipes are there, no longer in use but in visibly sound condition, from a municipal water supply system two millennia old. 

First century Rome never looked better!  

Feast of the Annunciation: Florence’s own New Year’s Day

The traditional Florentine New Year, on the feast of the Annunciation, March 25, began today at the Palazzo Vecchio with a morning parade filling the streets. Several corps of marchers in mediaeval dress (with colorfully feathered hats), playing drums, sounding trumpet fanfares and waving flags, march from the Palazzo Vecchio through the Piazza del Duomo and into the Church SS Annunciata.   They receive thanks, a blessing, and march back.  Until 1750, Florence refused to accept the Gregorian calendar year that begins on January 1.  Florence still unofficially observes New Year on the feast of the Annunciation.

Hill Towns

The small cities of mediaeval Tuscany were built on hilltops (the steeper the better) surrounded by stone walls for military defense.  Those that survive unchanged are amazing — park the car outside the walls and walk into the sixteenth century.  It’s Disneyland but it’s really real.  Everything is three-quarter size: doorways, streets, storefronts.  All made of rough-cut stone, often with inset plaques or — for those with fame or pretensions — family crests. 

The towns typically have one or several high stone towers for two sorts of defense — as a viewpoint on the surrounding lands and as a castle-keep in the event of invasion or a hostile local mob.  The countryside is familiar:  just look at the background in the Mona Lisa.  Distinctive rolling hills, not quite mountains but often achieving serious heights, covered in grassland pastures (inhabited by sheep and cattle) alternating with woods, olive orchards, and vineyards.  The land is also home to the local favorite pig: Cinghale Sinese (Sienese Boar with distinctive belted coloring and ample rich fat).  Agriturismo thrives: working farms with foot-thick stone-walled farmhouses have been converted to small country inns. 

Volterra (http://www.volterra.net/)

A walled city of towers, piazze, grand views over the countryside, a Roman amphitheatre and 800 years of history.  Florentine coats of arms on the town palazzo reflect that it was eventually conquered by Florence.  Inside the palazzo, a room where Dante is reputed to have addressed the city fathers, recruiting them to the Guelph side, its walls now covered with frescoes. 

Pienza (http://www.pienza.com/)

Hometown (then known as Corsignano) of Pope Pius II in the 15^th century.  The pope decided to turn it into a gem of a papal summer residence.  There’s a mini-cathedral commanding views of the countryside.

San Gimignano (http://www.sangimignano.com/sghomei.htm)

Home of the most prominent Tuscan white wine, Vernaccia di San Gimignano.  Full on mediaeval Tuscan treatment:  a walled city with fourteen surviving towers, narrow streets bounded by several-story tall buildings, so that the streets remain in shadow most of the day.  The streets feed in to a main square with the 13^th century Torre Grosso at the center.   Visitors can walk up to a steep ladder atop the Torre and see what the San Gimignanans of seven hundred years ago saw: no invading army could approach unannounced. 

Foods of Tuscany II: A Florentine Food Fair

Florence’s second annual food fair, “Taste in Viaggio, con le diversita del gusto,” http://www.pittimmagine.com/it/fiere/taste/ , (in English at http://www.pittimmagine.com/clists/cfiles/13/TasteN2_ING.pdf) takes place this weekend. Over a hundred exhibitors presenting pasta, coffee, wine, prosciutto, salame, cheese, smoked fish, marmalade, honey, olives, olive oil, capers, chocolate, cookies, cakes, mushrooms and truffles. A noon-hour visit with dozens of small tastes constitutes an ample lunch.

Wines of Italy

There were the distinctive Tuscan wines: Chianti Classico and Vernacia (dry white). More surpising were wines from outside the region. Sweet wines from the island of Elba, made with grapes dried to raisins (without pouriture noble) and fully fermented (strong without fortification, 14.5 alcohol); sweet, flavorful, refreshing, without the complexity of sauternes.

Olive oil

Two dozen olive oil producers were represented, all offering samples (for smelling) of the aromatic oil, some offering small oily tastes. Hog heaven for connoisseurs of the olive. There’s a remarkable variety (especially for those of us unused to olive oil tasting). Some mild, some peppery (presumably from the spicy taste of the underlying olives, not from added flavor).

Prosciutto

Sicilian prosciutto was rich and moist, Tuscan drier and saltier.

Cheese

The cheeses were really in their element at the food fair. Ricotta: Rich mild slightly sweet. Fresh mozzarella di bufala with complexity unparalleled even on India St. Soft goat cheese (formaggi di capra) surprisingly sweet with the earthy character of goat.

The shop at the exit

Most of the foods are not easily available in Florence. But the retail shop at the exhibit hall was doing a fine business. We stocked up, enough cheese for the next week, even with family visiting.

Foods of Tuscany I

Tuscany is justly proud of its indigenous food and drink: olive oil, Chianti classico (red wine from the well-defined Chianti region), Vernaccia di San Gimiano (dry white wine), peccorino (sheep’s milk) cheese, bistecca fiorentina (beefsteak from range-fed cattle).
This note concentrates on a few distinctive dishes, typical of how the food is served.

Ribollita

The most typical of Tuscan foods, sometimes (misleadingly) described as “stale bread soup.” The Tuscan counterpart of cassoulet, a thick hearty soup full of white beans, bread, black kale (cavallo nero), redolent of garlic and onion, enriched with olive oil. At its best, this is a rich, lively, filling dish. “Ribollita” literally translates as “reboiled;” the dish is a pot-au-feu, prepared, reheated, and suitable to be served over several days.

Pasta al zucca

Pasta with “pumpkin.” Any of the many forms of pasta prepared with a sauce of sweet rich fruity squash — pumpkin is close though the squash looks greener on the outside. Surprisingly complex and flavorful.

Carpaccio di pesce affumicato

Smoked (uncooked) fish. Very moist and fresh. Typically swordfish (spada), salmon (salmone), and tuna (tonnato). Distinctive fresh complex mild flavors. If you like novy (Nova Scotia lox), you’ll love carpaccio di pesce affumicato.

Tagliate di manzo

Tuscan beefsteak grilled rare and sliced, served in a green salad including radiccio and thin-sliced peccorino, dressed in olive oil and balsamic vinegar. Lively and rich.