Former U.S. Treasury Restructuring Chief on Italian Bank Crisis: There’s Risk of ‘Potential Financial Contagion’

What’s amazing to me is that no one seems upset, or concerned, about Europe’s most indebted nation needing a bank bailout by the EU. Not even a belch from the media about this huge event looming.

Italian banks, like Unicredit, have been hammered this year, down 2/3rds. This FTSE MIB is off by 25% in 2016, yet no one bats so much as an eyelash at these harrowing events unfolding.

At any rate, one man screaming in the wilderness, Jim Millstein, former restructuring chief at the U.S. Treasury is warning of contagion.

There’s a risk of “potential financial contagion” under rules designed to limit taxpayer bailout costs by inflicting losses on investors when banks fall short on capital, Millstein, who now runs his own firm, said Tuesday in a Bloomberg Television interview.

“There’s a safety valve for state aid,” he said. “So you could see the EU fashioning what we would call open bank assistance, which is, in effect, what we did with TARP,” a reference to the Troubled Asset Relief Program in 2008 in which the U.S. took stakes in the largest U.S. lenders.

The big hold up now is who will eat the losses for Italy’s enormous $400 billion bad loans. Naturally, the banksters want public funds to paper over it and help them avoid hard losses. The Italian Prime Minister is siding with the banksters.

“This would be one of the first big bail-ins done in the new regime, and the thought was that would avoid contagion by foisting losses on bondholders and shareholders,” Millstein said. However, because the banks’ bonds were sold to depositors, “You’re inflicting damage to the people who would otherwise be spending money in your economy.”

Italy’s $400b bad loan portfolio represents a third of the EU’s total.

I really like these deals.

The problem with Twitter has always been keeping the layman, the sloth, interested in the platform long enough to understand how great it is. With these teevee deals, Twitter stands to lure people back to the platform, which is bullish for the stock.

Twitter will stream Bloomberg West, What’d You Miss? and With All Due Respect. What an absurd name.

Twitter will enjoy a 70/30 revenue split, similar to the one inked with the NFL.

Add Bloomberg to the mounting list of live streaming partners, which includes the NFL and CBS for the DNC and RNC conventions.

In the coming months, I’m sure we’ll see some more deals cuts with sports organizations. The stock price likes this news.

Really? I get how depression is something of a big deal in this day and age of overly emotional self entitled narcissists. But I never knew there was a massive market for debilitating depression for women, post child birth.

According to the sages on Wall Street, apparently there is.

In a small trial of 21 patients, the treatment met its main goal of a significant reduction in the Hamilton Rating Scale for Depression, or HAM-D, a questionnaire used by psychiatrists to measure the level of depression, compared with placebo. After 30 days, seven of the 10 patients taking the drug, Sage-547, and two of the 11 in the placebo group were in remission, Sage said Tuesday in a statement.

Sage-547 was generally well-tolerated, with no serious adverse events reported during the treatment and follow-up periods, the biotech company said. A greater number of adverse events were reported in the placebo group than in the treatment arm of the trial. There are no approved therapies specifically for postpartum depression and therapeutic options in severe cases are limited, Sage said.

Not a fan of behavioral drugs, whatsoever. In many cases, psychotropics cause more damage than good. As a society, our answer to every problem seems to be papering over it, dull out the senses so that life can continue. Sometimes, people need to be smacked around and kicked into a garbage sewer.

Eighteenth century cannon are being fired upon the ark this morning. But in the big scheme of things, it’s just grape shot. The ark is impervious to cannon fire and will float past this nonsense into the sunset of mankind itself.

On the other hand, German bunds are getting shattered, rightly so. Yields are up an impressive 6bps, placing the vastly overpriced bund at around -0.10%.

In comparison to the bund, our 10yr looks like a steal.

Today’s big story is in forex. The dollar is surging against the yen, which is great for Japan, not so great for our exporters. But who gives a shit about American jobs anyway?

With Theresa May about to become Britain’s PM, it’s very likely she’ll delay or even derail the process for the UK to exit the EU. She was part of the BREMAIN camp. I believe markets are pricing in this eventuality now.

The Dow is at new record highs.

Today we are bearing witness to a complete repudiation of the risk averse trade. For the first time in months, bonds are getting crushed. The ark is taking on considerable water, with TLT off by more than 2.

The forex unwind is more severe. The pound is soaring, while the yen is plummeting. Both of these events are great for stocks.

Lastly, we’re seeing gold getting hit as WTI soars.

All of this has formulated a toxin for short sellers that is undeniable. Markets are soaring to new highs and the momentum is gaining traction.

The big fears have always been tucked away in forex and bonds. With those trades unwinding, stocks will continue to lift and crush both the purses and spirits of overzealous bears.

Art Laffer, former economist under Reagan, believes a gigantic bull market is only just beginning.

BEHOLD.

It’s all fun and games until your portfolio indicates LIMIT DOWN, fucked face, in the pre-market.

The NIKKEI is up more than 1,000 over the past two trading days, marking a degeneracy unseen in many moons. The NIKKEI 225 is now higher by 500, or 3.2%.

The Samurai are leading the charge against the asshole westerners with gatling guns. At the vanguard of this lift is Ash Ketchum from Pallett town, with Nintendo higher by another 5%.

Some of the supreme commanders of this run include Sumitomo Mitsui Trust (+13%), Toshiba (+10%), Mazda (+8%), Daiwa securities (+8%) and Mitsui Fudosan (+7.5%), naturally.

Separately, but related, the yen is off by 0.25%, which is likely the cause for the run in Japanese run banks.

U.S. futs give zero fucks, currently off by 1.

This is typical.

Someone who was given access to the beta version of the Pokemon Go app came up with the great idea to build a Pokemon Go chat app, dubbed GO Chat. The result was wanton success. People have been downloading the app in droves. The only problem: he didn’t have funding or a way to monetize the app. As such, his broke ass is living on a strict, impoverished, diet of crackers and water–Victorian era jailhouse style.

GoChat, which is available for iOS and Android, was released on July 4th — a day before Pokémon Go became available. Zarra posted about GoChat on Reddit, and the app was installed 10,000 times on its first day. As Pokémon Go grew into a global phenomenon, people began downloading GoChat at much higher rates. For the past two days, it’s been a top 10 search in the App Store. As of this writing, it’s the eighth-most-downloaded iOS social networking app. “The amount of traffic that we are currently getting has been the most insane thing ever, man,” says Zarra, who lives in San Diego. “People are just blowing it the fuck up.”

Also blowing up: GoChat’s servers. It was impossible to register a new account for most of the morning. And even if you did manage to log in, the app frequently crashes when you try to load a message. App analytics firm Sensor Tower estimates that 7.5 million people have downloaded Pokémon Go as of Monday, which would suggest that around 10 percent of all users downloaded a third-party chat app to go along with it.

GoChat is a hit, but it isn’t generating any revenue. Zarra resisted adding advertising to the app — “I hate ads,” he says — and worries that attempting to monetize the app could draw unwanted legal attention from the Pokémon Company. He said he is currently having discussions with investors to keep the app solvent. Zarra declined to say how much he has spent on GoChat to date — “I don’t want people to know how stupid I am,” he says.

Aside from a few experiments, Zarra says, he had never built a mobile app before GoChat. He says he’s happy with the results — one user messaged him to say he had met a girl using the app and had made plans to take her on a date. And Zarra will figure out a way to stay afloat — eventually. “I’m going to be able to pay my rent,” he says. “First and foremost, we really need to get our servers back online.”

Hopefully, this entrepreneurial moron can figure out a way to capitalize on his great idea.

Almost two years ago to the day, shares of IMPV topped out and imploded to the downside on a truly fucked up earnings report. This singular event marked the beginning of the end of my career in money management, as I was set to endure a harrowing drawdown in the Four Horsemen of the Apocalypse, heavily long WDAY, SPLK, YELP and FEYE. I didn’t leave money management because of the monetary drawdown, as I was very much ahead at the end of last year. Instead, it led to my emotional detachment from a business that I loved since entering it in 1997.

In the after-hours, IMPV is down over 11%–warning that revenues will miss by about 20% to $57.5m from $65m. Moreover, losses are set to explode to 20-22 cents from 2 cents.

“We are disappointed with our second quarter financial results, which were primarily impacted by extended sales cycles across most geographies and verticals predominantly relating to larger deals,” Chief Executive Anthony Bettencourt said in Monday’s announcement.

I expect competing software companies to drop in sympathy, just like 2014.

Year to date, the shares of the archaic maker of hard drives, Seagate, is down 30%. But in the after hours, all is sublime, as STX sprints ahead by 9% on a superb earnings beat. The company upped guidance to $2.65b from $2.34b, citing an improvement in the HDD business.

With the additional revenues, the company intends to fucking fire a bunch of people, 6,500 in total, or 14% of their work force, by the end of 2017. Gross margins have improved to about 25.8%, thanks to its enterprise HDD portfolio of overpriced horseshit.

Wall Street is eating this shit up and calling it caviar.

NOTE: Back in April of 2015, the company had announced a $2.5b share buyback–upping a previously approved buyback to $3.1b. Since then, the stock has been cut in half. They have no idea what they’re doing.

WDC is seeing a 2% spike in relation to the STX report.