Report: JP Morgan to Lend Close to $8 Billion for Italian Bank Bailout

Shares of Monte dei Paschi are surging higher by 5% in Italy on a report that said JP Morgan was set to lend close to $8b to Italian authorities in order to buy up toxic assets from the bedraggled Italian lender.

Naturally, Dimon will be lending into a vehicle that is buying the better toxic assets, ones backed by the state.

In an unsourced report, Il Messaggero said Monte dei Paschi was expected to sell 26.6 billion euros in bad loans to the vehicle that would finance the purchase by selling bonds backed by the non-performing loans.

Italian bank rescue fund Atlante will buy the riskier portion of the new bonds while the senior tranche, worth 7 billion euros, would benefit from a state-backed guarantee that requires 4-6 months to be provided.

The loan by JP Morgan would allow the transaction to proceed while the issuance of the asset-backed notes is arranged.

JP Morgan and Monte dei Paschi declined to comment.

Can’t lose.

There is a distinct harmony to the markets that is suggesting investors are eagerly willing to take on more risk now.

German bunds crushed lower, pushing yields higher to -0.093%.

Oil mounts huge 2% rally, while gold sinks 1.5%.

Pound up, Yen down, dollar down- perfect.

Jp Morgan beat on earnings and futures are indicating +150 at the open. Going out on a limb here, I’d expect gold miners and utes to trade down, as investors trade back into riskier stuff, like tech, oil and biotech. It’s all very predictable.

Markets are set to rise for a 10th consecutive day, spearheaded by animal instincts.

I took my son to catch a jigglypuff today. Also, the Princeton gym is strong as heck, fortressed by a Magmar that was a level 1,188. His fire game was strong.

Shares of Nintendo are ripping higher by 16% in Tokyo this evening, on news that the app has topped 15 million downloads.

Skeptics will say this is all horseshit. But don’t forget that Nintendo is a very real and very big company, led by smart people. They will find a way to monetize the hell out of this. Henceforth, the Pokemon craze continues.

We’re all just one action away from a life-ruining prison sentence. Imprisonment for victimless crimes is ALL THE RAGE in America these days. M. Coscia was just convicted to a 3 yr prison sentence for ‘spoofing’, a new crime, freshly made illegal by the retarded Dodd-Frank act, makes tricking adversaries in the marketplace a punishable crime.

Judge Harry Leinenweber, who tossed Mr. Coscia into prison, cited his $15m net worth and $150k monthly income in his decision, describing Mr. Coscia’s actions as ‘greedy.’

“This is a serious crime with serious consequences,” Leinenweber said before handing down the sentence. He noted that spoofing has been going on for a long time. Spoofing, which became illegal under the Dodd-Frank Act, carries a maximum of 10 years in prison. The practice typically consists of systematically placing orders without intending to execute them to trick the market into thinking there’s interest in buying or selling that doesn’t actually exist.

Bravo to Judge Leinenweber for ‘making an example’ and ruining someone’s life and being the first to sentence someone for a practice that has been part of the trading culture since the beginning of time.

Coscia was convicted by a jury in November of manipulating futures markets by placing unusually large orders he didn’t intend to execute and then filling smaller trades on the opposite side. Prosecutors said it was a bait and switch scheme that yielded Coscia, the head of Panther Energy Trading LLC, more than $1 million over 2 1/2 months in 2011. The scheme resulted in losses to high frequency trading houses that were placing and executing orders at the same time.

Jealous people always hate the success of others. When these people are in a position of power, liberties are stripped and bad things happen.

Prosecutors had sought a term as long as seven years and three months. Coscia’s lawyers said sentencing guidelines allowed for a term of only four to 10 months. His three-year prison term is to be followed by two years of supervised release.

Unfuckingbelievable.

It gets worse. Not only is he going to prison for something that every trader I’ve ever known has done, he’s paid back all of the gains ($1.4m) and an additional $3m fine to the fuckhead regulators.

What this is really about is his high speed algos were beating the shit out of someone with influence and power, causing some regulator to hone in on him and toss this modern day Edmond Dantes into the Chateau d’If.

The fuck out of here with this shit. Johnathon Stubbs called for a fucking death spiral, led by an oilmadggedeon back in February. But now, his glum views have been reformed, he’s turned bullish, and subsequently is lying his ass off on national teevee about the reasons why he’s found religion in the House of Citi.

Unlike this Stubbs character, I very much am still calling for an end of times scenario to play out. I will preside over the death of equities, as the oil market descends into sheer, fucking, anarchy.

Stubbs says his bearish call in February was merely a ‘cry for help’ and how the ‘rebalancing’ in crude is the reason why prices have shot higher.

WRONG.

Oil hasn’t rebalanced anything. A cursory google search will teach Stubbs that production is at RECORD highs and how our oil conglomerates are still producing crude at RECORD rates. Nothing has changed but the price of tea in China.

Lastly, his bear(d) game is weak.

To give the false illusion of economic prosperity, the Fed heads menace markets with interest rate hike promises. If you’re willing to debate me about the merits of the US economy, look no further than the value of homes less than 1 million since 2009. Zero growth there; but a fuckload of growth in homes worth more.

All of a sudden, BREXIT is a non-starter. The economy has recovered from that harrowing May jobs report and all is well.

“Considering the economic projections, I anticipate that it may be appropriate for up to two additional rate hikes this year,” said Harker, who does not vote on policy this year.

“Brexit is low on my list of risks, and I do not anticipate more than a transitory couple of 10ths of a percentage point slowdown in growth,” he added in prepared remarks.

Rest assured, just before the Fed is expected to hike rates, almost out of the blue, something will happen to derail it from happening.

Hilarious stuff out of the world’s most hated company. In an effort to remain independent and keep their top secret chimera science experiments under wraps, the Monsanto corporation is scrambling to get Bayer off their jock-strap. Instead of being acquired by Bayer for $122, Monsanto is telling its shareholders to fuck off and is considering merging with Bayer’s Frankenstonian agro-business.

The U.S. company is exploring various transactions, including the potential acquisition of BASF’s agriculture-solutions unit, the people said, asking not to be identified as the discussions are private. In return, Ludwigshafen, Germany-based BASF would likely receive newly issued shares in Monsanto, the people said. The discussions are at an early stage, and no final decisions have been made, they said. Talks with Bayer are continuing, they said.

Monsanto’s board is split over the merit of potential deals with rivals BASF and Bayer, one of the people said, with some executives keen to remain independent and others preferring a takeover. The company in May rejected a $122-a-share offer from Bayer, saying it was too low. It said in its earnings statement last month that it has been in discussions over the last several weeks with Bayer, as well as with other parties, about “alternative strategic options.”

Monsanto would likely face pressure from its shareholders if it opted to buy BASF’s division and issues shares to pay for it instead of accepting Bayer’s all-cash premium offer, one of the people said.

Monsanto doesn’t give a shit, as long as they’re permitted to continue to sue farmers and kick them off their lands for profiting from seeds that drifting into their fields by miracle or wind.

Color me skeptical. I hope Nigel enjoys his fucking fishing trips.

When oil went bust, I honed in on the debt/equity levels of the energy sector, knowing that it would be their sole source of capital once credit markets seized up. Lo and behold, this trend is beginning to take shape, especially as the 2017 debt wall looms.

Here are some opinions on the topic, which is being echoed through Wall Street now.

“The whole name of the game is trying to survive until oil gets back up to $60 or $70,” said Spencer Cutter, a credit analyst with Bloomberg Intelligence. “That may take a year or two. Nobody knows.”

“It’s all part of the same theme of de-levering,” Subash Chandra, an analyst at Guggenheim Securities LLC in New York, said of the share sales. “Part of that tool-kit is ‘backdoor equity,’ which adds inventory and obscures the dilution by adding something new.”

“Investors are looking at this and saying, ‘I know it’s not great now, but I think it’s going to get better in the future so I’m in,’” Wangler said. “It’s a bet on better days ahead.”

But what if oil prices don’t come roaring back? This idea that we need to hang in there because brighter days are ahead is gambling, 100%. No one can accurately predict where crude will be in a month from now, let along 1-2 years. If you’re investing in heavily burdened energy stocks now, you’re gambling–nothing more or less.

I’ll show you exactly what I’m talking about.

Should crude fail to rally, or God forbid fall from current levels, all of the companies below will find themselves in a credit crunch and will likely need to restructure their debt.

Once this happens, losses will be absorbed. The banks who lent the money will take hits. Hence, the ripple effect will be noteworthy.

Well, it looks like BREXIT will happen after all. Why else would Theresa May drag old Boris out from the dusty furniture and appoint him foreign secretary? I understand she is filling her cabinet with REMAIN folks too. But Boris was the fucking lightning rod, along with the quitter Farage, for this movement. Unlike Farage, who feels like he needs to have his little life back after plunging his nation into disarray, Johnson will try to lead his country via this new role.

Markets seem to agree. The pound is off by 0.82% and bonds are back in vogue again, as investors sashay in and out between risk on and risk off assets. Today is a risk off day, for those of you who are keeping track.

This is, without question, the biggest story of the day–even bigger than D. Gartman liking BAL.