Hedge Fund Key Employees in NYC Being Called-Into Work by 11:00 PM ET Tonight over ITALY VOTE!

ITALY.. 8 BANKS COULD COLLAPSE!

https://www.superstation95.com/index.php/world/2610


UH OH! Hedge Fund Key Employees in NYC Being Called-Into Work by 11:00 PM Eastern Time Tonight over Market Turmoil Fears Tomorrow!                                                         
Post by  Newsroom     - Dec 04, 2016 

BREAKING!
 


Key Managers and operations people are several VERY large Hedge Funds in New York City are being called-into work by 11 PM tonight over "Market Turmoil" expected tomorrow.  
Italy voters rejected Constitutional Reforms causing the resignation of their Prime Minister.  This vote is viewed as severely threatening to Italy's continued membership in the European Union (EU) and it appears the vote will trigger the collapse of up to eight Banks in Italy!  
Several large Italian banks failed the European Central Bank (ECB) Stress Test for lack of sufficient capital and the resultant political uncertainty from Italians REJECTING today's reforms is going to make it even more difficult to raise capital, putting at risk as many as eight mid-sized financial institutions, all of which are already at or beyond the brink of solvency.
Then, without warning or explanation the ex-Banker/Currency Trader and all around rich kid John Key, resigned as Prime Minister of New Zealand!  Given his long-term inside info on markets, people are wondering aloud what he knows that others do not?
Information coming into SuperStation95 from our contacts on Wall Street here in New York City say tomorrow could be a "Black Monday" for markets.   One such source, who asked to remain anonymous, said the word he got is that the Stock Market could plunge two thousands points tomorrow!  He would not say why.
Currency Traders here in New York City have told SuperStation95 that the EURO Currency is now in serious trouble, and its value against the US Dollar is dropping fast in pre-market futures trading going on right now (Sunday Evening).  The EURO, which traded just a year ago at $1.25, has already dropped to about $1.06 and is falling still.
All these things are adding-up to a disaster for markets worldwide which is why the Hedge Fund big shots are being called-into work tonight.  
Asian Markets open at 8:00 PM eastern US time, so everyone will have a good idea of how things will play-out, by the time the Hedge Fund folks start work at 11 PM tonight.
 

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MORE 7:35 PM EST --
Italian Banks are announcing they are "Closed" for Monday and Automatic Teller Machines (ATM's) throughout Italy are OFF-LINE!
The Value of the EURO is continuing to fall despite alleged intervention by the European Central Bank (ECB)
 
 MORE 7:51 PM EST --
The strong “No” vote in Italy's Referendum today, which caused Prime Minister Renzi to resign, is now leading to political instability in Italy.  The "No" vote is expected to kill a long-running attempt to rescue Italy's third largest (and oldest) bank, Monte dei Paschi, which has been desperate for a private sector bailout ever since it failed this summer's ECB stress test to avoid broader banking sector contagion; a failure of Monte Paschi will likely spark a fresh eurozone banking crisis, and prompt the ECB to get involved again (as it warned it would do), in a redux of what happened after the Brexit vote."
Sure enough, as the WSJ wrote moments ago, "when markets open Monday morning, all eyes will be on Banca Monte dei Paschi di Siena, Italy's troubled No. 3 lender, which is considered particularly vulnerable to fallout from a 'no' vote, which could complicate its plans to raise capital. Investors will be watching closely for any signs of a run on the bank, a situation that could force the government to move quickly with emergency measures."
For those who have not been following the seeming endless bailout saga, and growing crisis, at Italy's third largest - and most insolvent - bank, here is the quick rundown:

• 2007:  Monte dei Paschi buys Banca Antonveneta for EUR9.3 Billion
  
• 2011:  European stress test finds the bank has a capital hole of EUR3.3 billion
  
• 2012:  MPS's chairman and top management are replaced
  
• 2013:  The lender borrows EUR4 billion from the government to stay afloat
  
• June 2014: MPS raises EUR5 billion in fresh capital and pays back EUR3 billion of the government loan
  
• Nov. 2014:  New stress tests find the bank the worst capitalized lender in Europe. The ECB takes over as its supervisor. The bank is officially declared up for sale
  
• 2015:  MPS raises EUR3 billion in fresh capital and pays back the rest of the government loan
  
• 2016:  Announces plan to raise EUR5 billion and sell EUR28 billion in bad loans
  

Moments ago, the London FT reported  "rescue for the world’s oldest surviving bank Monte dei Paschi di Siena has been thrown into doubt after reformist prime minister Matteo Renzi decisively lost a referendum on constitutional reform on Sunday."

Quote :

 
 
Monte Paschi and advisers JP Morgan and Mediobanca will meet as early as Monday morning to decide whether to pull a plan to go ahead with a €5bn recapitalisation, according to people informed of the plan, Rachel Sanderson in Milan reports.
 
Senior bankers will decide whether to pursue their underwriting commitment or exercise their right to exit the transaction due to adverse market conditions, these people said. In the event the banks drop the capital plan, the Italian state is expect to nationalise the bank, say senior bankers.

The FT also adds that if Monte Paschi’s private recapitalisation plan fails, Italy is expected to undertake a precautionary recapitalisation of the bank to avoid it being wound down under new EU rules, say people informed of the plan."One big Monte Paschi investor said the extent of Mr Renzi’s loss was “a really bad result”. This person said they expected the private recapitalisation would be pulled and the Italian state would pump funds into the bank."
A precautionary recapitalisation, also known as a dreaded bail-in, would involve burden sharing by junior bondholders but with indemnification for investors up to a maximum of €100,000, said three people.
The FT cites officials and bankers who want to head off the risk of a deposit flight from Monte Paschi which has seen its deposits falls by 10 per cent so far this year as concerns about its viability have mounted; alas it is difficult to see how a bail-in would achieve that, especially if depositors are impaired. 
Officials also want to prevent contagion from Monte Paschi hitting Italy’s wider banking sector which is already weighed down by €360n of soured loans, low profitability and more bank branches than pizzerias.
Here, as the WSJ adds, should Monte Paschi's third bailout attempt fail, the contagion could be swift, "with Italy’s troubled banks among the biggest victims of Italy's rejection of Matteo Renzi’s proposal to make key changes to the country’s constitution."

Quote :

 
 
Mr. Renzi's resignation could bring an abrupt end to the government’s efforts to clean up the banking sector, which is suffering from a double whammy of low profitability and huge bad loans.
 
The prospect of political instability has created volatility in financial markets for weeks and Italian banks have markedly underperformed the rest of the Italian stock market this year. In the case of a ‘no’ vote, which now looks all but nailed on, investors are expected to sell off banking stocks in Italy–and possibly other European countries over contagion fears–when trading opens Monday morning.

It's not just Monte Pashi: The vote could also affect plans by UniCredit SpA, Italy’s largest bank, to raise as much as EUR13 billion. The bank is far healthier than Monte dei Paschi and less exposed to the fallout from the 'no' vote, since it could wait for calm to return to the markets before asking shareholders for capital. News could emerge from a Dec. 13 presentation by UniCredit’s top management in London, where they will unveil a new strategy.
There is, of course, the ECB, which warned last week it is prepared to step in and "temporarily step up purchases of Italian government bonds" if tomorrow's banking sector contagion were to "sharply drive up borrowing costs for the euro zone's largest debtor."

http://www.blacklistednews.com/Global_Financial_Markets_Plunged_Into_Chaos_As_Italy_Overwhelmingly_Votes_%E2%80%98No%E2%80%99/55613/0/38/38/Y/M.html

Global Financial Markets Plunged Into Chaos As Italy Overwhelmingly Votes ‘No’
Published: December 5, 2016

  

Source: Michael Snyder, Guest Post

Italian voters have embraced the global trend of rejecting the established world order, but the “no” vote on Sunday has plunged global financial markets into a state of utter chaos.  The euro has already fallen to a 20 month low, Italian government bonds are poised for a tremendous crash, and futures markets are indicating that both U.S. and European stock markets will be way down when they open on Monday.  It is being projected that Italian Prime Minister Matteo Renzi’s referendum on constitutional reforms will be defeated by about 20 percentage points when all the votes have been counted, and Renzi has already announced that he plans to resign as a result.  When new elections are held it looks like comedian Beppe Grillo’s Five-Star movement will come to power, and the European establishment is extremely alarmed at that prospect because Grillo wants to take Italy out of the eurozone.  In the long run Italy would be much better off without the euro, but in the short-term the only thing propping up Italy’s failing banking system is support from Europe.  Without that support, the 8th largest economy on the entire planet would already be in the midst of an unprecedented financial crisis.
I know that I said a lot in that first paragraph, but it is imperative that people understand how serious this crisis could quickly become.
This “no” vote virtually guarantees a major banking crisis for Italy, and many analysts fear that it could trigger a broader financial crisis all across the rest of the continent as well.
Just look at what has already happened.  All of the votes haven’t even been counted yet, and the euro is absolutely plummeting…

Quote :

The euro dropped 1.3 percent to $1.0505, falling below its 1 1/2-year low of $1.0518 touched late last month, and testing its key support levels where the currency has managed to rebound in the past couple of years.
A break below its 2015 March low of $1.0457 would send the currency to its lowest level since early 2003, opening a way for a test of $1, or parity against the dollar, a scenario which many market players now see as a real possibility.

In early 2014, there were times when one euro was trading for almost $1.40.  For a very long time I have been warning that the euro was eventually heading for parity with the U.S. dollar, and now we are almost there.
Meanwhile, Italian government bonds are going to continue to crash following this election result.  This is going to make it even more difficult for the Italian government to borrow money, and that will only aggravate their ongoing financial troubles.
But the big problem in Italy is the banks.  At this moment there are eight banks in imminent danger of collapsing, and virtually all of the rest of them are in some stage of trouble.  The following comes from a Bloomberg article about the crisis that Italian banks are facing right at this moment…

Quote :

They’re burdened with a mountain of bad loans. Their stocks have cratered. And they have to operate in an economy prone to recession and political upheaval.
Signs have been mounting for months that Italy’s weakest lenders, and in particular Banca Monte dei Paschi di Siena SpA, were sliding toward the precipice, threatening to reignite a broader crisis.

And we may get some news regarding the fate of Banca Monte dei Paschi di Siena as early as Monday morning if what the Sydney Morning Herald is reporting is correct…

Quote :

A last-gasp rescue for Monte dei Paschi di Siena, the world’s oldest surviving bank, has been thrown into doubt after reformist prime minister Matteo Renzi decisively lost a referendum on constitutional reform on Sunday.
MPS and advisers JPMorgan and Mediobanca will meet as early as Monday morning to decide whether to pull a plan to go ahead with a €5bn recapitalisation, the FT reports, citing people informed of the plan.
Senior bankers will decide whether to pursue their underwriting commitments or exercise their right to drop the transaction due to adverse market conditions, these people said. In the event the banks drop the capital plan, the Italian state is expected to nationalise the bank, say senior bankers.

If Banca Monte dei Paschi di Siena fails, major banks all over Italy (and all over the rest of Europe) could start going down like dominoes.
So what were Italians voting on anyway?
Well, the truth is that the constitutional reforms that were proposed actually sound quite boring…

Quote :

“The changes involve sharply reducing the size of one of the chambers of Parliament — the Senate — shifting its powers to the executive, and eliminating the Senate’s power to bring down government coalitions.
“The amendments also shift some powers now held by the regions to the central government, thereby reducing frequent and lengthy court battles between Rome and the regional governments.”

The reason why this vote was ultimately so important is because it became a referendum on Renzi’s administration.  The fact that he announced in advance that he would resign if it did not get approved gave a tremendous amount of fuel to the opposition.
So now Beppe Grillo’s Five-Star Movement stands poised to come to power, and that could be very bad news for those that are hoping to hold the common currency together.
The following is how NPR recently summarized the main goals of the Five-Star Movement…

Quote :

“It calls for a government-guaranteed, universal income, abolishing Italy’s fiscal commitments to the European Union and a referendum on Italy’s membership in the Euro — a prospect that could unravel the entire single currency Eurozone.”

If Italy chooses to leave the euro, it will probably mean the end of the common currency, and the continued existence of the entire European Union would be called into question.
So this vote on Sunday was huge.  The Brexit had already done a tremendous amount of damage to the long-term prospects for the European Union, and now the crisis in Italy is sending political and financial shockwaves throughout the entire continent.
Over the next few weeks, keep a close eye on the euro and on Italian government bonds.
If they both continue to crash, that will be a sign that a major European financial crisis is now upon us.
And what happens in Europe definitely does not stay in Europe.
If Europe goes down, we are going to go down too.
At this point we still have almost a month left in 2016, but 2017 is already shaping up to be a very troubling year.  As always, let us hope for the best, but let us also keep preparing for the worst.