The Last Pope

It Begins: Monte Paschi "Bails In" Bondholders, Halts $650 Million In Coupon Payments

Recall that three weeks ago we warned that "Monti Paschi Faces Bail-In As Capital Needs Point To Nationalization" although we left open the question of "who will get the haircut including senior bondholders and depositors.... given the small size of sub-debt in the capital structures." Today, as many expected on the day following the German elections, the dominos are finally starting to wobble, and as we predicted, Monte Paschi, Italy's oldest and according to many, most insolvent bank, quietly commenced a bondholder "bail in" after it said that it suspended interest payments on three hybrid notes following demands by European authorities that bondholders contribute to the restructuring of the bailed out Italian lender. Remember what Diesel-BOOM said about Cyprus - that it is a template? He wasn't joking.

As Bloomberg reports, Monte Paschi "said in a statement that it won’t pay interest on about 481 million euros ($650 million) of outstanding hybrid notes issued through MPS Capital Trust II and Antonveneta Capital Trusts I and II." Why these notes? Because hybrid bondholders have zero protections and zero recourse. "Under the terms of the undated notes, the Siena, Italy-based lender is allowed to suspend interest without defaulting and doesn’t have to make up the missed coupons when payments resume." Then again hybrids, to quote the Dutchman, are just the template for the balance of the bank's balance sheet.

Why is this happening now? Simple: the Merkel reelection is in the bag, and the EURUSD is too high (recall Adidas' laments from last week). Furthermore, if the ECB proceeds with another LTRO as many believe it will, it will force the EURUSD even higher, surging from even more unwanted liquidity. So what to do? Why stage a small, contained crisis of course. Such as a bail in by a major Italian bank. The good news for now is that depositors are untouched. Unfortunately, with depositor cash on the wrong end of the (un)secured liability continuum it is only a matter of time before those with uninsured deposits share some of the Cypriot pain. After all, in the brave New Normal insolvent world, "it is only fair."

To wit:

“In the new world we’re in, bondholders pick up the tab when they can be forced to,” said John Raymond, an analyst at CreditSights Inc. in London. “State aid rules impose losses where possible.”

European Union Competition Commissioner Joaquin Almunia told reporters on Sept. 7 the bank should receive final approval for its restructuring plan within two months. The lender, which received a 4.1 billion-euro bailout, submitted a revised plan that more than doubles the amount of new capital it intends to raise to 2.5 billion euros as it seeks to repay the aid.

Almunia recommended that “cash outflows from the beneficiary to hybrid capital holders and subordinated debt holders be prevented to the maximum extent possible,” in a letter sent to Italian Finance Minister Fabrizio Saccomanni dated July 16 and seen by Bloomberg News.

More importantly, this is just the start:

Monte Paschi’s 108 million euros of undated, non-cumulative trust preferred stock issued through Antonveneta Capital Trust II fell 5 cents on the euro to 41 cents, according to Bloomberg bond prices. That’s the lowest price since April 23, data compiled by Bloomberg show.

While the bank is halting payments on the bonds that make up its Tier 1 capital, the most-junior layer of debt capital instruments, it also has the equivalent of about 2.6 billion euros of more-senior Upper Tier 2 debt in three issues in euros and pounds.

While Monte Paschi is making payments on these notes, it isn’t clear that it will be able to go on doing so, said Raymond.

Expect an update from the bank on Wednesday when it will hold a conference call.

Investors may be betting the bank will buy back the debt “at or slightly below current trading levels,” according to Eva Olsson, an analyst at Mitsubishi UFJ Securities in London. Individual investors in Italy hold many of the bonds and have been an important source of funds for banks in recent years, she said.

"Monte likely will have to raise capital next year and we view any capital raising exercise in the market as challenging,” Olsson wrote.

Indeed, and best of luck. As for how "bailed in" capital figures in terms of a bank's equity buffer/Tier 1 capital

Credit to Zero Hedge

Economic Bubble, Government, Global Economic Crisis

Mexico death toll around 115 and Typhoon Usagi kills at least 25 people in China

MEXICO CITY (Reuters) - Mexico's Congress will revise its proposed 2014 budget in the wake of some of the worst storm damage in decades, President Enrique Pena Nieto said on Sunday as the death toll from widespread flooding and mudslides rose to some 115.

The government earlier this month said it aimed to run a budget deficit this year and next as it forges ahead with spending on infrastructure. It must now find additional funds to repair roads and infrastructure hammered by the storms.

Pena Nieto said Mexico's Congress "will absolutely have to adjust" the federal budget in light of the mounting damage caused by Tropical Storm Ingrid and Hurricane Manuel over the past week.

He did not specify new funding levels beyond the roughly 12 billion Mexican pesos ($938.97 million) available in emergency funding.

Pena Nieto added in a speech in the northwestern state of Sinaloa that the death toll from the storms stands at "110 or 115."

Mexico's government aims to widen the budget deficit next year to 1.5 percent of gross domestic product, the finance ministry said on September 8.

The ministry also asked Congress to approve a deficit of 0.4 percent of GDP for 2013 after an economic slowdown this year hurt government revenue.

At least two more people died when a Black Hawk rescue helicopter crashed on a hillside near the stricken village of La Pintada in southern Guerrero state, the government said late on Saturday night. Only the deaths of two pilots and a mechanic were confirmed from the accident previously, and the additional two victims were listed as rescue workers.

Meanwhile, nearly 70 people remained missing after a mudslide caused by torrential rains buried 40 homes in La Pintada.

Pena Nieto said on Saturday that there was little hope anyone had survived the mudslide in the village.

Guerrero state, home to the Pacific resort city of Acapulco, has been the hardest hit by heavy rains unleashed by Hurricane Manuel last week.

Mudslides and flooding have buried homes and badly damaged highways and bridges in all but two of the country's 31 states, according to government officials.

($1 = 12.7800 Mexican pesos)

Typhoon Usagi has killed at least 25 people in Guangdong province of south China, the government has said.



Winds of up to 180 km/h (110 mph) were recorded in some areas, toppling trees and blowing cars off roads. Its victims drowned or were hit by debris.

The storm has affected 3.5 million people on the Chinese mainland.

Trains from Guangzhou to Beijing have been suspended and hundreds of flights from Guangzhou, Shenzhen and Hong Kong have been cancelled.

However, Hong Kong has escaped the worst of the storm.

Weather officials say that the ferocity of the storm has abated as it progressed into southern China, but financial markets in Hong Kong were closed for part of Monday morning.

More than 80,000 people were moved to safety in Fujian province and the authorities have deployed at least 50,000 relief workers, the state-run Xinhua news agency reported. Power supplies in many parts of the province and in Guangdong have been cut off.

The typhoon caused 7,100 homes to collapse and led to direct economic losses of 3.24 bn yuan ($526m; £329m), Xinhua added.

"It is the strongest typhoon I have ever encountered," Xinhua quoted Luo Hailing, a petrol station attendant in Shanwei - in the eastern part of Guangdong province - as saying. "[It was] so terrible, lucky we made preparations."

Credit to The Chicago Tribune and the BBC

Iran parades missiles with range of up to 2,000 km

Bank of International Settlements Announces Imminent Financial Collapse

Straight from the Bank of International Settlements, and economic crash is imminent!


Financial Collapse is here!

3 thoughts on “Bank of International Settlements Announces Imminent Financial Collapse”

John RamboSeptember 21, 2013 at 3:06 pm


First scroll down to “The Greatest Financial Conspiracy” article and read it. THEN look back at this one. Tell everyone you meet to do the same and to tell others.

indeedSeptember 21, 2013 at 5:00 pm


And…here we go!

alexaSeptember 22, 2013 at 12:34 pm


* Hope everyone knows that our present existential predicament is ALL contrived, connived & orchestrated by the chess moves of Royal Capstone Chess Club of the 0.01%….in accordance with their demonic surreptitious & coercive Old Testament logic decrees & subsequent machinations of the ‘Grand Illusion’ propagation- propaganda conglomerate of the corpo/fascistic MSM media machine of mass- ‘MindKontroL’… thru the insidious application of the Hegelian Dialect for the desired mob enslavement via ‘cognitive dissonance’ by the Old World Black Nobility & their praetorian guards >Zion -Mossad-Jesuits-et al …who have effectively usurped the entire US Govn’t….effectively breaking into & commandeering the wheel of the Ship of State in a silent coup.

Credit to The common Sense Show

Fujitsu to Exhibit PalmSecure® Palm Vein Biometric Authentication and Currency Handling Technology at ASIS International 2013

Fujitsu’s suite of award-winning biometric authentication technology to be showcased at the world’s most influential security event

FOOTHILL RANCH, Calif.

Fujitsu Frontech North America Inc., a leader in innovative technology and front-end solutions, will be exhibiting at the 59th Annual ASIS International Show and Exhibits, September 24-26, 2013 at Chicago’s McCormack Place. Fujitsu, a regular exhibitor at ASIS International, will be demonstrating PalmSecure®, their award-wining biometric authentication technology, PalmSecure for Single Sign-On and the PalmEntry™ physical access control system in booth number 3801. This year’s show, expected to draw over 20,000 attendees and over 100 exhibitors, has the theme, STRATEGIC - SMART - SECURE.

Echoing this year’s theme, Fujitsu’s family of secure biometric solutions, PalmSecure®, PalmSecure for SSO (single sign-on) and the PalmEntry™ physical access control system all utilize Fujitsu’s award-winning palm vein authentication technology. This advanced, vascular pattern recognition technology not only provides highly reliable authentication with low false accept and reject rates, but also generates fast and easy enrollment. Because the PalmSecure solution can only identify the vein pattern if the blood is actively flowing within the individual’s veins, forgery is virtually impossible.

In addition to the suite of PalmSecure products, Fujitsu will also be exhibiting the G60 bill recycling unit in a third-party safe to demonstrate the concept of a smart safe. The G60 is a compact OEM recycler that can recycle 4 denominations, and dispense a fifth denomination from a loading cassette. It can also accept up to 1,000 notes in a depository. The G60 in a safe helps promote accurate cash management and safety for employees who have to handle cash.

Business Wire - Fujitsu PalmSecure™ biometric authentication technology.

While you are visiting our booth, don’t forget to register for a free PalmSecure Single Sign-On (SSO) Mouse with OmniPass™ software, a $299 value. We will conduct a drawing to give away one PalmSecure mouse at the end of each day. The winner need not be present to win. The PalmSecure mouse provides easy and secure access to all your protected files, websites and accounts without having to remember passwords.

Credit to Fort Mill Times

Netanyahu Is Said to View Iran Deal as a Possible Trap

WASHINGTON — Prime Minister Benjamin Netanyahu of Israel, stepping up his effort to blunt a diplomatic offensive by Iran, plans to warn the United Nations next week that a nuclear deal with the Iranian government could be a trap similar to one set by North Korea eight years ago, according to an Israeli official involved in drafting the speech.

Mr. Netanyahu is scheduled to address the General Assembly next Tuesday, a week after President Obama and Iran’s new president, Hassan Rouhani, are to speak at the United Nations.

But the Israeli government, clearly rattled by the sudden talk of a diplomatic opening, offered a preview Sunday of Mr. Netanyahu’s hard-edged message, in which he will set the terms for what would be acceptable to Israel in any agreement concerning Iran’s nuclear ambitions.

“A bad agreement is worse than no agreement at all,” the Israeli official said, reading a statement from the prime minister’s office that he said reflected Mr. Netanyahu’s remarks.

President Rouhani, in advance of his arrival in New York this week, has signaled a willingness to negotiate. The Obama administration, while professing wariness, is clearly intrigued by the possibility of resolving a problem that has bedeviled President Obama as long as he has been in office. And that, in turn, has deeply unsettled the Israelis.

“Iran must not be allowed to repeat North Korea’s ploy to get nuclear weapons,” said the Israeli official, who spoke on condition of anonymity because of the sensitivity of the matter.

“Just like North Korea before it,” he said, “Iran professes to seemingly peaceful intentions; it talks the talk of nonproliferation while seeking to ease sanctions and buy more time for its nuclear program.”

In his speech, the official said, Mr. Netanyahu plans to review the history of North Korea’s negotiations, with particular emphasis on an active period of diplomacy in 2005, when the North Korean government, in what was then seen as a landmark deal, agreed to abandon its nuclear weapons program in return for economic, security and energy benefits.

A year later, North Korea tested its first nuclear device. Israeli officials warn something similar could happen if the United States were to conclude too hasty a deal with Mr. Rouhani. As Iran is doing today, the North Koreans insisted on a right to a peaceful nuclear energy program.

There are differences between the two cases. At the time that it concluded the deal in 2005, North Korea said it had already produced a nuclear bomb. American intelligence experts believe Iran is still many months, if not years, away from having such a weapon.

But American officials agree that North Korea offers a troubling precedent of nuclear negotiations in which a rogue nation repeatedly extracted concessions from the United States and other countries, only to renege later and fire missiles or test nuclear devices.

In his speech, the Israeli official said, Mr. Netanyahu will offer a familiar list of demands: that Iran cease all enrichment of uranium and agree to the removal of all enriched uranium from its territory; dismantle its nuclear facility hidden in a mountain near the holy city of Qum; dismantle its newest generation of centrifuges at another facility, Natanz; and stop construction of a heavy-water reactor at Arak.

What is new is Mr. Netanyahu’s explicit comparison of Iran to North Korea — a rhetorical device devised to undermine Mr. Rouhani’s image as a moderate leader who posted greetings on Twitter to Jews for Rosh Hashana, the Jewish New Year. North Korea’s reclusive dictators — whether Kim Jong-il in 2005 or his son, Kim Jong-un, today — have not traveled to the United Nations to plead their country’s case to the world.

The Israeli official said that Mr. Netanyahu recognized that he would be labeled a naysayer for his pessimism. “He feels morally impelled to stake out this position,” the official said.

The White House has sought to allay the fears of Israel officials, assuring them that Mr. Obama will judge Mr. Rouhani by his actions, not his words, and that the United States is not planning to prematurely ease the economic sanctions against Iran that have crippled its economy.

“We certainly recognize and appreciate Israel’s significant concerns about Iran, given the threats that have been made against Israel and the outrageous comments that have come out of Iran for many years about Israel,” Benjamin J. Rhodes, a deputy national security adviser, told reporters on Friday, previewing Mr. Obama’s speech on Tuesday.

But with a recent exchange of letters between Mr. Obama and Mr. Rouhani stirring hopes of a diplomatic breakthrough, Israeli officials are not mollified. At last year’s General Assembly, Mr. Netanyahu provided what was probably its most dramatic moment, brandishing a simple drawing that he said demonstrated how close Iran was to producing a nuclear bomb.

This year, Israeli officials fear, the highest drama may be Mr. Obama greeting Mr. Rouhani on the sidelines of the General Assembly, something that has not happened for decades and which they worry would leave Israel more isolated in dealing with Iran.

Credit to New York Times

Violent eruption at Santa Maria, Guatemala

Another violent eruption occurred at Santiaguito lava-dome complex of Santa Maria volcano in Guatemala on the morning of September 21, 2013. At about 02:30 UTC (08:30 local time), the Caliente dome suddenly produced a series of major pyroclastic flows triggered by collapse of accumulated viscous lava at the southeastern rim and flank of the dome.

The flows descended on all sides of the lava dome.

The explosions, accompanied by shock waves that could be heard in 20 km radius, produced an ash plume that rose to about 4.5 km altitude or about 2 km height above the crater. Significant (but smaller compared) ash plume rose from the pyroclastic flows. Ash fall occurred in Quetzaltenango, Santa María de Jesús, Zuníl and other areas downwind. (VD)

There has been no recognized precursor to the eruption, illustrating that the activity of the lava dome is highly unpredictable and potentially extremely dangerous.

Credit to the watchers

REPORT OF UNEMPLOYMENT BY STATE DOESN’T PAINT A PRETTY PICTURE

Unemployment rates fell in 17 state states and were unchanged in 15, the Labor Department said.

“The picture is decidedly mixed,” said Jim Diffley, chief US regional economist at IHS Global Insight. “We’re still optimistic about the improvement (in hiring), but it’s been slow.”

Only 29 states saw employers adding jobs. That’s the fewest since March. And 20 states reported job losses, the most since March.

Louisiana added 14,000 jobs, while Nevada’s payrolls increased by 11,200 positions. Still, Nevada’s unemployment rate remained 9.5 percent, the highest in the nation. And Louisiana’s was unchanged at 7 percent.

Illinois had the second-highest rate at 9.2 percent. North Dakota reported the lowest rate, at 3 percent.

Nationally, the economy added roughly 169,000 jobs in August, which is hardly enough to suggest the U.S. is back and roaring again. The U.S. unemployment rate was 7.3 percent.

More importantly, the ho-hum hiring gains mean that most states still have fewer jobs than they did when the recession began in December 2007. IHS Global Insight forecasts that only 18 states will have returned to their pre-recession job levels by the end of this year.

Overall, the United States stil has 1.9 million fewer jobs than before the recession. Hiring has averaged just 155,000 a month since April. That’s down from an average of 205,000 in the first four months.


Credit to The blaze

An Economic Collapse Of Biblical Proportions Is Coming