Creditors

Corrupt Or Just Stupid? Markets Hand Corporations An Unlimited Credit Card

The crucial thing to understand about credit bubble dynamics is that borrowing money from people desperate to lend and using the proceeds to overpay for assets requires only monkey-level intelligence. So while a bubble is inflating it’s impossible for most of the media, banking and political communities to tell the legitimate operators from the hopelessly corrupt and/or extremely stupid. That’s the world we’ve created by handing monetary printing presses to governments, and by extension to corporate CEOs.

Italy Races To Arrange €5 Billion Bailout For Monte Paschi Before Friday's Stress Test

Italy is scrambling to secure a privately-backed bailout of Monte dei Paschi di Siena, the most exposed of the country’s troubled lenders, including a plan to raise €5bn of fresh capital so as to avert nationalisation, the FT reports. The bank needs to obtain some €5 bilion in capital ahead of Friday's stress test, or else a dire "contagion" scenario could unfold that could impair not only all Italian banks, but promptly spread first to France and then to Germany...

US Futures Rise To Session Highs, Set For Another Record Open; Global Stocks Jump

After yesterday's positive close in the Dow Jones, which hasn't had a losing day since July 7 and which took the series of consecutive green closes to 8 in a row - the longest stretch since 2013 - the index will look to lock in its 9th green day in a row with futures currently trading well in the green. It's not just the US - equities edged higher in Asia and Europe as positive earnings results from some of the world’s biggest companies countered concern the global economy is losing steam. The dollar strengthened while gold retreated.

America Has Become A "Parasitocracy"

Everyone wants to get something for nothing. Everyone wants to be a rentier. And every society has them. But a rentier is a parasite. And the more of them you have, the weaker the economy becomes – until it eventually succumbs to revolution, depression, war, or hyperinflation.

US Futures Dip, European Stocks Slide After EU Court Slams Italian Bank Bailout Plans

After a head-scratching S&P500 rally - which not even Goldman has been able to justify - pushed stocks to new all time highs with seemingly daily record highs regardless of fundamentals or geopolitical troubles, overnight US equity futures dipped modestly, tracking weak European stocks as demand for safe haven assets including U.S. Treasuries and gold rises. Asian stocks outside Japan fall. Crude oil trades near $45 a barrel. 

The Real Endgame For Italian Banks

The new head of UniCredit, Italy’s biggest bank, has implored the EU to take a more lenient stance on rescuing the country’s troubled banking sector, as The FT reports Mustier urges Brussels should look to a controversial 2004 French government rescue of Alstom as a model. The 13% surge in Italian bank stocks this week - the most since 2011 - offers a further hint that, as Bloomberg's Mark Cudmore explains, there’s only one viable outcome to the fiasco with Italian banks, and it will ultimately be a positive catalyst for global risk assets even if negative for the euro.

Global Corporate Defaults Just Hit 100, On Pace To Surpass Financial Crisis Record

With half of 2016 in the history books, corporate bond defaults just hit the milestone "century" mark, or 100, last week, rising by 50% from the number of bankruptcies at this time last year and the highest level since the US emerged from recession in 2009. What is most troubling is that at the current run-rate, with half of 2016 still to come, the global debt default total is on pace to surpass 2009 for the all time corporate bankruptcy record.

Maduro Puts Military In Charge Of Venezuela's Food, Calls It "Great Sovereign Supply Mission"

Every time we believe Venezuela has hit rock bottom, president Nicolas Maduro finds a way to surprise us. In the latest installment of Venezuela's social collapse, we find that the president of the socialist utopia has put the armed forces in charge of a new food supply system called the Great Sovereign Supply Mission."This is now a completely militarized government" said Luis Manuel Esculpi, former head of the armed forces commission in the congress.

Who's Most Afraid Of Contagion From Italy's Bank Meltdown?

Contagion is the reason Italy’s banking crisis is all of a sudden Europe’s biggest existential threat. Greece’s intractable problems are out of sight, out of mind; Brexit momentarily spooked investors and bankers; but Italy’s banking woes have the potential to wipe out investors and undo over 60 years of supranational state-building in Europe.

Why Citi Sees No Solution For The Italian Banking Crisis Any Time Soon

"Any state intervention will likely be small, in our view, confined to a very small number of lenders and broadly within EU rules. As such, it is unlikely to represent a decisive fix of Italy’s banking problems. Retail investors will probably be protected as fears of a severe market backlash and subsequent deposit outflows may prevail. Such a compromise may limit the negative political fallout for PM enzi, but increased concerns among households about their savings are likely to hit the already-dwindling popularity of the government in any case."

European Stocks Storm Higher As Bank Fears Subside; US Futures Flat

After yesterday's afternoon surge in US stocks, facilitated by the "uncertain" Fed's FOMC Minutes, today the rest of global market are playing catch up with European stocks rebounding from one week lows, snapping the longest losing streak in three weeks, as well as Asia where most stock markets climbed, led by gains among energy producers as crude prices advanced, while a stronger yen weighed on Japanese shares.