Blippar unveiled a new feature on Tuesday that recognizes faces of famous people, and will soon let you add your own to a searchable database. …read more
Source: Scan any celeb’s face & this app will tell you who it is
By Tyler Durden
The wait is almost over.
After two previous taxpayer funded bailouts, and nearly five months of foreplay since the third largest Italian bank failed the latest European stress test at the end of July, in which the Italian government in September vow that “bailout for Italian banks has been ‘absolutely’ ruled out“, a third bailout, as we previewed earlier today, is now imminent.
According to Reuters, which cites two sources, Italy is preparing to take a €2 billion controlling stake in Monte Paschi as the bank’s hopes of a private funding rescue have faded after a fruitless five month search to secure an anchor investor, following Prime Minister Matteo Renzi’s decision to quit.
The government, which is already the ailing bank’s single largest shareholder with a four percent share, is planning do a debt-for-equity swap, and buy junior bonds held by ordinary Italians to take the stake up to 40%, the sources said. The bonds would then be equitized, converting the government’s bond stake into pure equity ownership, a troubling approach as it would effectively wipe out the existing equity tranche and position the bank for a potential bankruptcy fight in court where the government faces off with the equity committee.
This transaction would make the government by far the biggest shareholder, meaning the Treasury would be able to control Italy’s third biggest bank and its shareholder meetings, or in other words, the bank would be nationalized.
The sources said a government decree authorizing the deal, which would see the state buy the subordinated bonds from retail investors and convert them into shares, could be rushed through as early as this weekend. Italy’s treasury would buy the bonds held by around 40,000 retail investors at face value, the sources said.
It is unclear how the senior bondholders, who would not be made whole would feel about a government transaction which favors the juniors (who would get par) where the bulk of the retail investors are found, would feel about such a transaction which would bring memories of the US government’s “bailout” of GM which flipped the bankruptcy process on its head by prioritizing junior pensioners over senior creditors.
That way the transaction is structure, the government would ensure retail investors do not suffer any losses in the bank’s bailout, making it politically more palatable and staving off the risk of a run on deposits that could trigger a wider banking crisis.
The bank, which needs to raise €5 billion by the end of December or risk winding down, is set to raise 1 billion euros from a bond swap with institutional investors and Rome is hoping the 2 billion euros participation from the government could help persuade private investors to fill the 2 billion euros gap. Since any new equity investors would come in as the equivalent of post-petition equity, it would mean that existing equityholders, already a token amount, would be wiped out.
“It’s a de-facto nationalization with a strong presence by the state that can attract other …read more
Source: Italian Government Prepares To Nationalize Monte Paschi
Donald Trump’s spokesman says the president-elect sold all of his stocks in June. That was a month after Trump’s last financial disclosure. Trump doesn’t have to disclose again until May 2018. …read more
Source: Trump says he sold all his stocks in June
The Huffington Post has found a replacement for Arianna Huffington, hiring Lydia Polgreen of the New York Times to assume the top editorial role at the news site. …read more
Source: Lydia Polgreen named Huffington Post top editor
By Tyler Durden
Events were breaking yesterday, but as Bloomberg's Richard Breslow mocks, not nearly as quickly as the narrative that tried valiantly to explain the price action.
After the fact. We all know what happened. The Italian referendum sent the euro and risk into the sewer in the hours following the result.
Everything stabilized smartly when European markets opened and liquidity was there to be had. Then the Christmas mindset took over and markets decided the calendar was, for now, temptingly free of known black swan events and it was off to the races.
From a trader’s point of view, it was much simpler. They did all the obvious trades they thought they were supposed to do. Added at chart points that screamed lighten up. And then got their eyes ripped out. Why should December break the trading patterns that have played out so many times over the course of the year?
So far we’re on familiar ground. But what struck me was the speed with which the ECB story spun out. Not insignificant ahead of an impending governing council meeting. And one President Draghi will be unlikely to skate through with “mañana”.
We began with Italy and maybe the whole of Europe is in deep trouble. So horrid, at a time when monetary policy is losing its effectiveness. Followed by, buy-the-dip with both hands Eurex action which prompted shamefaced talk of the Draghi put. “How could we have forgotten”? Only to be succeeded by sombre warnings of the impending taper. Capital key changes to tapering at warp speed.
This has been a momentum-driven market rather than one driven by well-reasoned fundamental analysis. It’s amazing what pseudo-intellectual havoc can be caused by a couple hundred points bounce in the DAX and euro.
Two things have indeed importantly changed, however:
1.The charts look very different today. Once again being short EUR/USD near 1.05 has been painfully expensive. Quintuple bottom? The re-test and utter rejection of the 200-day moving average in EUR/JPY is also impressive.
2. The bar for a market panic on any mention of a possible tapering, or even the mere theoretical discussion of a future tapering — no matter if surrounded by APP extension and the like — has been lowered. Markets are on bond yield edge. If global rates continue to nudge higher, those pesky economics models will see inflation expectations lurking everywhere.
Source: Trader Exclaims "Markets Are In An Alternate Universe"
President-elect Trump is claiming credit for a $50 billion investment in the United States by a Japanese tech conglomerate — a deal he says wouldn’t have happened if he hadn’t won the election. …read more
Source: Trump claims credit for $50B investment by SoftBank
President-elect Trump is claiming credit for a $50 billion investment in the United States by a Japanese tech conglomerate — a deal he says wouldn’t have happened if he hadn’t won the election. …read more
Source: Trump claims credit for $50B investment by SoftBank
By EconMatters
By EconMatters
We discuss a VIX Trading Setup into the FOMC Meeting next week, with the option to rollover into the January contract as we expect a significant spike in the VIX over the next 6-8 weeks. Buy the VIX into the FOMC Rate Hike Meeting next week at these low levels!
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Source: The VIX FOMC Setup (Video)
By Tyler Durden
To visualize the impact the recent spike in mortgage rates will have on the US housing market in general, and home refinancing activity in particular, look no further than this chart from the October Mortgage Monitor slidepack by Black Knight.
The chart profiles the sudden collapse of the refi market using October and November rates. As Black Knight writes, it looks at the – quite dramatic – effect the mortgage rate rise has had on the population of borrowers who could both likely qualify for and have interest rate incentive to refinance. It finds it was cut in half in just one month.
Some more details from the source:
Which is bad news not only for homeowners, but also for the banks, whose refi pipeline – a steady source of income and easy profit – is about to vaporize.
It’s not just refinancings, however, According to the report, as housing expert Mark Hanson notes, here is a summary of the adverse impact the spike in yields will also have on home purchases:
Welcome to Esh Carmel Blog.
