this was not the first time i saw ana montes' name.veloped a gut feeling that there was something wrong and suspicious about this woman. when i saw her name again, i knew she was the spy they were looking for. >> four years early april 1996, one of our employees, reggie brown, came to me expressing concerns about ana. he says her accents caused me great concerns. >> okay. ladies and gentlemen, i had just been briefed about the national security adviser on the shooting down today, two american civilian airplanes by cuban military aircraft. >> 1996, cuban military shot down two aircrafts operated by brothers to the rescue. piloted by a total of three american citizens were shot down on international aerospace. did you have relatives? >> that was a murder of three american citizens. the united states government scrambled to figure out what has happened and how we may respond. one of the first people called an expert to advise them was ana montes. when the pentagon calls you in, you must stay in place until you are discuss mimissed. if you

david: monte dei paschi rejected. bank's request for more time to recapitalize. shares plunged on the news. digesting draghi. yields rising after ecb president mario draghi announced an extension of the central bank's bond buying program until the end of 2017, but at a reduced face. falling short of even if opec commences members to cut production, and may not be enough to drain inventories. that is waning you need to know at this hour. over to abigail. abigail: we do have breaking news. coca-cola shares are trading higher on the news that james quincey, the company's chief operating officer, has been named to succeed be current ceo, muhtar kent, may 1 of 2017. the shares are trading higher. trading less well, some of the italian banks. weakness as the ebs to reject monte dei paschi's request to raise 5 billion euros. this is a story of a continuances -- a continuation of weakness. we have seen charts decline. banking index down more than 35% this year. more bad news for the italian banks, jon. jonathan: let's continu

not the news that monte paschi wanted to hear today. in light of the news from mario draghi yesterday, i thought we would look at the spread between the two year and 30 year yield in germany. look at the difference. it is at the widest since november 2015. mario draghi student -- steep and the yield curve yesterday. they see the potential for continued accommodation due to the weak inflation outlook. so much happening. back to you. julie: we will talk more about monte paschi in a few moments. let's take a look at bloomberg word news. >> the president of south korea has been impeached. lawmakers voted to remove her after and influence peddling scandal. her powers have been suspended. the prime minister will step in as acting president until the country's supreme court decides whether to formally and her presidency. italy's prime minister matteo renzi is keeping the country waiting area he has not told the country's president whether he will stay on despite his defeat in a constitutional referendum. renzits to know if matteo will agree to

i have monte paschi, up 5.7%.uitiese a debt swap in the coming days, pressing ahead to avoid a state rescue that would impose losses on bondholders and shareholders. guy: thank you, nejra. paolo gentiloni hasn't asked --paolo gentiloni has been asked to replace matteo renzi. the ecb rejected banca monte dei extra time toor tim implement the capital increase. give us your thoughts, marco. we have a new feminist or and new issues within the banking sector. what is job number one for the new boss? [laughter] >> wow, a lot of questions. well, a week and a half since the referendum. the outcome was a resounding no. renzi tendered his resignation last week. loni was quick to pick up the baton. it looks like he will make a temporary government until the elections that will take place during the first or second week of june. he has a huge amount on his plate to solve. the first of which, unquestionably, by european standards is the resolution of siena problem.i the problem is a lot more serious than anybody can expect. th

we are talking about monte dei paschi di siena. its boss has been flying around the world, desperately trying to raise money from investors to keep it afloat. but late on thursday the bank admitted it had failed. itjust couldn't find enough takers. after a late—night meeting, the italian cabinet has passed a decree creating a bailout fund. let's give you some of the background to this. monte dei paschi is not only italy's oldest bank, it is the world's oldest. it was founded in 1472, and became one of the country's most powerful financial institutions. fast—forward 5.5 centuries, and things aren't looking quite so good. a string of bad decisions has left it with a pile of non—performing loans, bad debts that borrowers are unlikely to pay back, totalling 47 billion euros. this summer, it was singled out in stress tests by the european central bank as the shakiest of all 51 major banks in europe. its share price has plunged. it has lost nine tenths of its market value this year. deposits have been flowing out of the bank. this week i

how decimated is banca monte paschi? .05%.barely deutsche bank trade that .4%, the blue line, and it has seen a little bit of recovery. the question the market needs to ask itself today, is there a renewed probability of rising values once a state bailout is in place and deutsche bank settles with the regulators? deutsche bank has put $9 billion 2008.ince 200 defrauding fannie and freddie and mortgage-backed securities has drawn and $46 billion in fines, but this is a state of play. as a proposition to the market, do you see a resurgence? the yield curves are rising. is monte paschi and deutsche bank on your buy list? not least the trumped week as well. have a look. manic --fairly flat at the moment. discretionary down by 1.1%. the data was mixed. household purchases great, but the jobless claims rising to the highest level in six months. al golden here up a third of 1%. here upave got gold in 0.3%. the have contracted for the 30th day in a row. a long drawng removal from gold and oil off by zero point 4%. oil trims its

we are at a historic day for monte dei paschi and its future. also for the rest of the italian banking sector. in fact, the 20 billion plan that the government put in place will probably be a safe net also for other italian banks in trouble, it's persthey could bem that. and the effect has been clearly priced in from the market that seems the lowest in november has raised more than 20%, banking sector more than 25%. this is due to the fact that for the safer banks, there's positive impact in terms of the reduced systemic risk due to the intervention of the state and the fact that the safer banks will not have to pay for the rescue of the weaker one. so the market is being more selective. we saw intesa and bank copopolare doing well and unicredit doing fairly well. it will be a historic day for monte dei paschi. >> thank you, andrea. >>> let's bring in jean lu luca karada from simon kutcher. our reporter saying this is an historic moment when you talk about the implications for the sector as a whole. do you agree and what happens next? >> as your

make or break for monte dei paschi. the world's oldest bank needs to find over $5 billion to avoid the prospect of a government bailout. live from london, that's our top story on wednesday, 21st december. a bailout of monte pasci would see investors facing compulsory losses. it presents a tough choice for the new italian prime minister. also in the programme, a new twist in malaysia's 1mdb scandal. we will have the latest from singapore. and as economies grow, so too does demand for office space. we'll meet the man behind the firm that matches firms with work spaces — being dubbed airbnb for offices. so we are asking where would you like to work if you had the choice? a coffee shop or somewhere more scenic? let us know. just use the hashtag bbcbizlive. sally, where could be more exotic than here in the business live studio? the clock is ticking for the troubled lender banco monte dei paschi di sienna. the italian bank is seeking over $5 billion in new investment to help it stay afloat. today is the final deadline for in

bank a monte dei paschi completes its debt plot. what with its recap plan teetering, reports swirl of intervention by the treasury. mark: angela merkel braces for a fierce fight. she calls next year's vote the most challenging since german reunification. we are live at the party conference. i am mark barton in london. and i am francine lacqua, right here in rome. we have been in rome the last three days. when you look at the markets, they seem very calm. be buying some of the bonds to keep that safety blanket in check. we will find out more on thursday, when i am sure mario draghi will be fielding a lot of questions about the political upheaval here. one thing i keep being told over and over is that investors burned by brexit are still burned by trump, but this time took the right positions. timetable. talk when will lindsay step down as prime minister? francine: at this point, we don't know. we know that the president met with the prime minister, matteo renzi. we understand they met twice yesterday, once in the morning and once in

rejecting monte dei monte deirejecting paschi's request. italy is close to monte paschi rescue. on track for its best weekly gain. despite the decline in monte paschi's snare shares. this is a spread between the two year and 30 year. since novembert 2015. using the potential for further accommodation. taking less duration. the ecb saying it can thought ecb saying it-- can buy below the positive rates. course that has steep and the bond curve across europe because the ecb will also reduce or .aper its bond buying program hence the steepening of the yield curve. morgan stanley will continue. >> i sound like a broken record. we are talking about records. they are not up by that much. them onough to bring the record. the s&p has the distinction of rising for six straight sections -- six straight sessions. continuing be this positive sentiment surrounding growth. reading.hat confidence it is not just records for these guys. there are sub indices. it is amazing. the dow jones transportation average also touched a high before pulling back to some extent. we are watching the dollar-yen.

will they nationalize monte dei paschi? sector deal falls through. it would have to bail in some subordinated bondholders. 65% of monte dei paschi's bondholders are retail. the government may try to reimburse them but that would be incredibly politically toxic. the european rules -- if they will break those, they will bail out. francine: if they break the rules it would be with the consent to of germany. it would not just be italy's thing they do not want to conform to the rules. political turmoil is almost a perfect excuse to be more exible. >> there would be a lot of links mentioned. they would have to have the tacit consent is leased from germany otherwise the ecb will say they do not count it as capital. they would need tacit support. in any case, it would undermine the banking union which is the one area where europe has made reforms -- has made progress in its reforms. francine: what will happen now to renzi? there is no chance now that he will play a role in the coming government and he may also have to step down fro

and monte dei paschi problems. moody's extends its review of the baseline credit assessment as the ecb sees the troubled lender needing almost twice the amount it had thought to raise in a failed capital increase. welcome to the program. we are less than half an hour from the start of european equity trading. could be thin volumes, being a home period between the christmas and new year holidays. this is what we expect at the start. futures suggest a stronger start of trade in europe. a generally positive handover coming through from asia as well. the australian market up and back in action after the chris pratt. get to the gmm function on the bloomberg. the gmm for the d10 shows equity markets dominated by the move in australia, up just over 1%. we see anpacific, increase for the first time in seven days. that is one of the standout stories. laura -- low volumes today. their 30 day moving averages. we see some movement in currencies. the new zealand dollar in particular, and the australian dollar. the a fairly flat

do you think banca monte dei paschi should be saved? >> coming from the american side, i think that's a little harder to make that argument. one of the advances that we've had in the u.s. was that we forced some recapitalizations on to the banks. we forced some losses. there were some bailouts, but certainly pain before the bailouts. another good example is ireland. ireland's banking system rebounded faster than most others. mostly because the pain was incurred. i know it's the oldest bank in the world and it won't feel good. i think your correspondent nailed it politically it's toxic, but at some point losses have to be assigned. that's how capitalism has to move forward. >> politically this would be toxic if some bondholders are not compensated for losses. many of them, it would flock to the main right parties. >> this is the fear, this would provide more -- boost the popularity of the anti-establishment movements, the five star movement. it would be quite important for the italian establishment that there's an agreement with the eu i

bank a monte dei paschi completes its debt plot.etering, reports swirl of intervention by the treasury. mark: angela merkel braces for a fierce fight. she calls next year's vote the most challenging since german reunification.

yet again looking at banco monte dei paschi in italy. do you think this is having knock-on effects when it comes to the banking sector in europe? >> yes. i think it's a reminder you need to be cautious about banks that there are regulatory risks there, risks about balance sheets, it can be harder to understand than some other sectors. equally it would be a mistake to avoid the sector altogether. in our portfolios we have the northern european banks with strong domestic franchises and strong balance sheets. >> raises the question of whether or not 2017 could be the year that some european banks play catch up. when you look at the u.s. banks, particularly with goldman sachs, jpmorgan, on the heels of this trump rally, europe banks still underperforming relatively speaking. >> yes, we've seen some rally recently, but you highlight a key point, there's a major trend we've seen in equity markets, starting in early july as interest rates bottomed and accelerating sharply after the u.s. presidential elections as people have moved away from some

guest: we're talking about multi-passkey -- about monte monte pasche.ut they argue that the political instability following matteo renzi's resignation made it difficult to attract -- they need to stick to their deadline to meet regulations. reutersres fell 7% as rooks the news earlier on friday, ending the session down about 10%. just what is wrong with monte paschi? monte needs dei paschi a 5 billion injection to continue operating. ownership ofo its bad loans. money is unlikely to be paid back. roughly seeing signs that tax revenue has been able to service the governments that. italian businesses are facing increasing difficulties with many unable to repay their loans. loans now account for a fifth of the italian economy. banks are being held back by the country's bankrupting legislation. the banks like monte paschi holding onto their debts. the ecb has ordered the bank to get rid of its burden and raise new capital after one of the worst performers in the stress test in july. the banks strategy to rake in new credit, hoping some of their creditors will turn their outstanding debts

monte dei paschi needs $9.2 billion in capital.hi says that is based on the results of a stress test. on friday, the italian government said it would put as much as $21 billion into monte dei paschi and other banks. it failed in its plan to raise 500 billion dollars from investors. that is your bloomberg business flash. michael: thank you very much. let's bring the focus back to donald trump. it never leaves donald trump these days. over the weekend, he tweeted -- the world is gloomy. hopee i won, there was no and are joined by kevin cirilli, bloomberg news politics reporter in new york, neil dutta of renaissance macro research, and michael holland of holland and company. is not up 10% as we showed. but he was elected president. -- the market is up 10% as we showed. but he was elected president. donald trump cannot stop tweeting. can we expect this to continue? a lot of people are worried that he might say something that causes problems for the united states. kevin: the tweeting will continue, that i can guarantee. here's why. he u

finally of course, keeping an eye on buncombe monte banca monte dei paschi.ext, the gray areas 2017. the gray swan, i should say. they are easier to spot than blacks bond but pose a risk to the markets. find out why 2017 could be the year of the gray swan shocks. guy. guy: i think you could see a gray swan in london. i think one could fly right by but you would not know it was there. they could be harder to spot than we think they are. shaping up for the markets on this gloomy day before barbara arrives tomorrow in london, this is how european markets are. we are not doing very much at the moment, as you can see, on the downside. matt is warming up to hoodies. do you think that is a good idea? hoodiesor jackets? -- or jackets? this is bloomberg. ♪ matt: welcome back to the european market open. i'm matt miller in berlin. guy johnson alongside be in london. i thought they were building a bleachers here in front of the brandenburg gate to watch a christmas concert. guy: matt, matt. honestly, we don't use that word over here. seating, or something like that. mat

the clock is ticking for the troubled lender banco monte dei paschi di sienna.lian bank is seeking just over $5 billion in new investment to help it stay afloat — today is the final deadline for existing investors and other retail investors to purchase new shares. the new italian prime minister has sought parliamentary approval for an emergency bailout package worth some $20 billion in the event that private sector assistance doesn't materialise. this would prove contentious as investors who have already lent to the bank will be penalised under eu laws which came into force earlier in the year. poor quality loans are one of the biggest issues facing italy's banking sector. in total, the country's lenders sit on around 370 billion dollars worth of bad debt. this accounts for about 40% of all the non—performing loans in the eurozone. ben kumar is investment manager at seven investment management. good morning, then. how this particular bank get into so much trouble? as you say, bad loans are the focus. when you are the oldest bank in the world, maybe your regulati

guy: banca monte paschi? we have asked that question so many times. >> now at least we know what they are going to do. we know that the private plan has fallen short and that they are going to take state aid. the devil is now in the details into how much of the burden the bondholders are going to have to share. guy: let's bring you in on the fixed income side when it comes to financials. how does what we are seeing this morning affect the landscape for the bond side of the equation when it comes to the banking sector? >> i think it really helps to clear the air. if you think of all of these european banks, all of this hanging over them earlier this year, it looks like a lot of these banks are out of the woods because the worst is behind them. even banca monte paschi when you think of that. it is something that has come and gone. in term turnovers european banking landscape actually it looks in pretty good shape. you have a european economy growing and banks continuing to delever and a lot of these litigation

let's get to the world's oldest bank, monte pashci. will probably step in to rescue monte pashci because they cannot get anchor investors to commit to share sales. gives been following and us the likely probably -- the probable best estimates of the timing. when is the earliest he might hear the state is going to step in? >> the earliest would be this evening. we have argue reported one saying that the cabinet may meet as early as this evening to approve this 20 billion euro package that would , asimed at monte pashci well as other banks that would ne assistance in raising capital. julie: is 20 billion euros going to be enough? dan: well, tough question. analysts whoot of say 20 billion is not sufficient and the number is closer to 50 billion when you include all the banks that potentially will need help. the fact that provisioning a bad , so has not been sufficient he will find out over the next few months is this is going to help the at sign think it system or just give it a shot in the arm. mark: the devil, of course, is in the deta

monte dei paschi has to get together a new business plan.s to be submitted to european authorities as well. what they are looking at is trying to avoid big losses, primarily for retail investors. it is viewed as him was a caretaker government in the run-up to elections next year. it will not be easy. there are literally thousands. what they think so far is slumping these bonds they hold into new shares in the bank. at the end of the process, probably dropping back or getting more secure bonds guaranteed by the government. that is a preliminary plan now. vonnie: is it possible the european commission will allow this to go ahead? i would say there is a good chance. primarily because the bank, as well as the finance minister, have remained in close contact. they are not really taking major moves without discussing the people in brussels and frankfurt with the ecb before they do this. i am sure there will be tweaks requested, but using this , they have very specific guidelines that they are trying to meet. vonnie: square this out for us. you see

banco monte dei paschi shares getting slammed.rading has been suspended, this after they warned liquidity would dry out in four months versus the 11 months they previously stated. they are working to raise state capital. >>> shares of nike rising on better than expected earnings and revenues. on the conference call, executives went to great lengths to explain to investors this metric is not a good snapshot anymore since it only shows retailer demand, and nike invested heavily on selling products directly to consumers. >>> back to our quest to help you make some money this morning. we continue our monthly sectornomics series with a look at materials. landon dowdy has more on which stocks are winning and losing in materials. >> materials having a decent run. really jumping after the election on president-elect trump's promise to invest on infrastructure. here's a look at biggest winners and losers. freeport soaring 109% year to date. david gagliano telling me that comes to management's turnaround efforts in 2016 followed by the rece

is monte paschi now heading fo

overnight, the latest up date monte paschi from monte paschi is that they have raised 2 billion eurosis is one of those lenders one failed to getjust a cornerstone investor for the 5 billion euro capitalization. there were a number of different strands to this recapitalization from a debt to equity swap to reducing are selling off bad loans. where we are at the moment is monte paschi says they've got about 2 billion overnight. retail investors, how are they going to be compensated? that is the debate in the monte paschi debate. are the markets underpricing the ramifications of bailing in or sorting out monte paschi, jeter -- depending on what term you choose to use? a lot of variables yet to be defined in that equation. the next story is a telly and -- ion.l lastly johnson & johnson said it had ended negotiations with the $22 billion swiss drugmaker and the french form a giant said to be in advanced takeover talks. manus: and finally we focus on totale which is expanding in latin america. woods, your neck of the yusuf. it's also said to be considering buying other assets from state ow

in europe, the picture there, big news there is on monte dei paschi.e seeing red arrows across the board except in italy, thanks to the gains in that

but first: the european central bank has told the failing italian lender monte dei paschi di siena thateds 8 point 8 billion euro — to avoid collapse. that is quite a bit more than a previous estimate of 5 billion euro. on friday the italian government approved a decree to bail out monte dei paschi — the worlds oldest bank and italy's third largest — after it failed to win investor backing for the desperately needed capital increase. the bank, which has been crippled by years of losses and loans that may now never be repaid. the fear is that it's collapse could have triggered further failures among banks in italy, and potentially start a new european banking crisis. with me is dr andreas hoepner, associate professor of finance, at the icma centre of henley business school. good to see you. we have taught about this already. but these latest details coming from the european central bank but other high—profile agencies in germany? it is becoming more complicated, it is becoming more complicated, it is becoming more of an european issue because it is the first time the new regulations will

-- unicredit and monte paschi?schi cannot raise the capital does that mean that unicredit is a risk? i suppose it is a fair point to say the market has a degree of appetite for italian bank risk, and probably that is limited. it'll will be looking at their overall portfolios and saying, how much do we want? there is some sense in which there is a zero sum game but i think monte paschi will depend heavily on what price they want to put. put up the royal bank of scotland on this chart, that here we have for banks. paribas,diamond, bnp deutsche bank, and unicredit down here with 93% of their loss in equities since the beginning of the financial crisis. everybody wants to be like jpmorgan, i get that. when you are in a meeting, what is your number one message to bank operators to right size the behavior of european banking? what is the davies marching order to get tactical results? howard: there is an overall structural problem, which is that europe is too heavily depended on bank finance. therefore, what you really ne

david: is a larger problem than just monte dei paschi. we italian parliament is getting worse in terms of nonperforming loans. blue line at the top is going up. that's not sustainable over the long term. looking at some of the analysis that has been done of the nonperforming loans that have sold and what kind of capital hit they have taken on them. the needs of the italian banking 55 billioncloser to the 20 billion the italian state has promised to provide. that thea lot of doubt money that is set aside is going to be sufficient. it's also deutsche bank, credit suisse and barclays. take us through that. barclays ended up getting sued by the u.s. government in a very surprising development instead of settling. about how someone who used to work for jpmorgan is taking on a fight that even jamie dimon wasn't willing to take with the justice department. aey may believe they have better chance with the changing administration to prevail in that fight. bank of america was successful. we will see how that plays out. deutsche bank and credit suis

monte dei paschi and unicredit. pursuing capital raising plans, trying to find investors $5.3 billion by the end of the year to avoid any kind of rescue fund from the italian government. unicredit was able to sell pioneer investments, helping them with their finances. they are selling to a moon d, making it the eighth -- selling to amundi, making it the eighth largest finance manager. david: we will go live to vienna. one hour from now, we sit down with david rubenstein. his take on the markets and the businessmen coming to washington. ♪ jonathan: from new york, this is bloomberg. nation said over the weekend that they would join the opec pledge to reduce oil output, saudi arabia agreeing to cut oil by more than previously agreed. we sat down with russia's minister of energy to discuss the impact of these cuts. the have to say that situation is different as we go country by country, but i was pleasantly surprised to see so many countries respond to the invitation to participate in this deal. i would have to stay --

italy's president asked matteo renzi to remain in the top spot for a little longer, but will monte paschi get more time to complete its capital increase? and finally, when court and qatar sovereign wealth fund join forces to purchase an $11 billion stake in rosnet. is ivan glasenberg back in deal mode, matt? matt: absolutely fascinating story, that. of course, global markets are going to be captivated by mario draghi, but it what deals are going on in oil. at 1:45 p.m. local time in frank for and at 2:30, when he holds his press conference. the three main things to pay attention to from draghi will be number one, how long does he qe program and how much will he spend? will the hold out 80 billion euros a month? how will he buy bonds in countries where he has already reached the limit? he will hit the limit in germany by midsummer at this pace, which he will if he extends at the rate he has been buying so far. number three will be, how will he taper? when is it going to start? how will the pasth be, shallow or steep? investors will be looking at all of that very closely. guy: we will be lo

we are talking about monte dei paschi di siena.g around the world, desperately trying to raise money from investors to keep it afloat. but late on thursday the bank admitted it had failed. itjust couldn't find enough takers. after a late night meeting, the italian cabinet has passed a decree creating a bailout fund. let's give you some of the background to this. monte dei paschi is not only italy's oldest bank, it is the world's oldest. it was founded in 1472, and became one of the country's most powerful financial institutions. fast—forward 5.5 centuries, and things aren't looking quite so good. a string of bad decisions has left it with a pile of non—performing loans, bad debts that borrowers are unlikely to pay back, totalling 47 billion euros. this summer, it was singled out in stress tests by the european central bank as the shakiest of all 51 major banks in europe. its share price has plunged. it has lost nine tenths of its market value this year. deposits have been flowing out of the bank. this week it warned the money could

will the ecb extend monte dei paschi's deadline for the recapitalization plan? a bold call on gold as the precious metal sa suffers its worst year. our guest is bullish on bullion. that discussion later on bloomberg. ♪ guy: let's talk about what is happening in france. twistga takes another this morning. the former prime minister is now leading the charge in terms of the socialist push towards next year election -- year's election. clearly, it valls is worried we will see the votes split on the left and as a result of which, that will change the dynamics in terms of how the right votes. macron tosking join the socialist party. we'll come back and talk about what is happening in europe and the political story in just a moment. that is catch up with everything else we need to know. here is the bloomberg business flash with juliette saly. juliette: thank you. has agreed to buy shares in stillwater. the montana-based company is the only miner. hit the highest level in more than four months in tokyo after starting to market its super mario smartphone game. that inclu

like christmasit night -- a president for monte dei paschi. -- a gift for monte dei paschi.ews came at once. we had the auntie bresky board meeting and then a cabinet meeting approving -- we had the monte dei paschi board meeting and then a cabinet meeting approving the degree. were able to seek to request to increase their liquidity. it is not only monte dei paschi. monte dei paschi has been struggling to find investors to bail it out. that is not a good sign at all, is it? >> definitely not. wayss been tried in all find investors. it has been seeking investors for several weeks. that it was not able to meet the 5 billion capital increase it was seeking -- and it was needed under the european union request. political situation in his late with the referendum, earlier this month, and the resignation of the prime minister did not help monte dei paschi because international investors saw it as another sign of stress for the country. rishaad: there has been so much tumult. -- political to the reluctance of the investors to invest in the banks, has it not? >> of course, that is

keep your eyes on the data and on monte pasche. just like barbra streisand, memories from the corners of my mind, see what hess's memories are. then there seems to be plenty of bull market to choose from this this trump rally, but what? a bear market. there are other opportunities lurking. i'm buying the tech sector to see if it's time to do buy. and one of my absolute favorite companies joining me tonight. don't miss my exclusive with one of the greatest oil independents in the world, similar rax. stick with cramer. [engine revving] ♪ ♪ is it a force of nature? or a sales event? the season of audi sales event is here. audi will cover your first month's lease payment on select models during the season of audi sales event. why pause a spontaneous moment? cialis for daily use treats ed and the urinary symptoms of bph. tell your doctor about your medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, or adempas® for pulmonary hypertension, as this may cause an unsafe drop in

mark: monte dei paschi, what now? clearly, they are going to be nationalized. what is the next step? michael: they have confirmed they are applying for state aid. now, the question is in the details. the government has laid out some of the details of how the bonds will be swapped and what discount will be given. but we have to see. -- have to see what that means for the burden that bondholders will share. mark: charles, does this draw a line in the sand under italy banking woes, or is this still just the beginning of what some are calling a wagnerian saga? charles: i think you are going to see a number of other second-tier and third tier italian banks probably go in the same way as a result of this package being agreed for monte. it is the first step, and it is a positive step for sure. but there is still a lot of wood to chop, so to speak. we can be reading these stories about various italian banks. mark: from an equity and credit perspective, banks are in better shape than six months ago. charles: absolutely. particularly with the macro swapping given by the

monte dei paschi, something we will keep our eye on.loomberg first -- first word news. taylor: in indonesia, a strong underwater earth take -- earthquake has injured hundreds and killed 56. in 2004, more than 100,000 after aied there earthquake triggered a devastating tsunami. a british investigation into the sun plan -- plunge of the pound in october is focused on a japanese unit. the city's tonio -- tokyo trading desk exacerbated the pound strop. inrling fell as much as 6% early asian trading on october 7. a surprising india. the central bank unexpectedly kept interest rates unchanged before a possible increase in uris -- u.s. borrowing costs. they're waiting to see the impact of the government's decision to ban 80% of the currency in circulation. president-elect donald trump has thected longtime friend of taiwan -- the chinese president to be ambassador to china. i'll governor terry branstad has accepted the offer. come has been sharply critical of china and angered the chinese by speaking with taiwan's president. global news 24 hour

monte dei paschi says liquidity may turn negative after four months.ments on risk are in its prospectus supplement on its website. it is desperately trying to raise this fresh capital. more on central banks after the break. ♪ . mark: welcome back to bloomberg "surveillance." let's get the first word news. may have to get back billions of euros to mortgage customers after a ruling by the european unions top court. judges ruled borrowers who paid too much interest on home loans predating may 2013 spanish ruling on so-called mortgage floors are entitled to a refund from banks, the court says a proposed time limit is illegal. berlin police have stepped up behind for the truck driver who attacked christmas shoppers in berlin. an initial suspect released without charge, a 23 pakistani refugee, they fail to commit -- prove he committed the crime. angela merkel visited the scene yesterday and the islamic state said that one of its followers carried out the attack that killed 12 people. vw has recently billion dollar agreement with u.s. car owners and regulars

no sign of banca monte dei paschi.ly renzi through into doubt the lender's plan to raise as much as 5 million euros in capital by the end of the year. back to you. francine: thank you, mark. we are trying to understand the political fallout. we are in political limbo, but the banks have recouped their losses, and many of them are higher. let's get to the u.k. and talk about brexit. the u.k. supreme court, and of course, this is the government's case on triggering brexit without going to a parliamentary vote. joining us now is the bloomberg news legal reporter. patrick, great to have you on the program. give us a sense of what has changed in the last couple of months. this case has just been getting bigger and bigger. there are various intervenors now. most notably, the representatives forrom the irish and welsh governments. her seniordown advisor to accuse theresa may of bypassing british parliament. francine: what are the judges, patrick, likely to focus on, very quickly? patrick: there is a big elephant in the room h

monte dei paschi siena approved a last-minute plan to approve $5 billion in a debt swat. a reuters report says qatar is still considering investing in the world's oldest bank. >> if there's anything you and i have to be careful of when we talk about banks, the withdrawal of capital. i think we tried to handle it responsibly between 2008 and 2011. so i'm tempering what i've seen. monte dei paschi has seen deposits fall by 6 billion euros, a third of that decrease since the italian referendum on december 4th. this comes after the bank approved the last-minute plan to raise 5 billion euros through a share issue and debt swap. deposit holders will have a mindful eye to southeast region of the eu and what the ramifications were in a previous crisis. >> intesa sanpaolo agreed to pay a 235 million euro fine to new york state's financial regulator for violating the state's laws on money laundering. the state said the bank's local branch employees concealed money processing activities involving iran to avoid sanctions violations. some of the activities date back to a decade ago. >

mark: john, what about this liquidity concerns surrounding monte paschi? is that why the shares sank as much as 19% today? is liquidity running out quicker than previously estimated? john: we think that is a factor. the key thing is the markets are watching the general recap plan and how that is going to turn out. that the shares did recover a bit after parliament approved -- gave permission to the government to act and to boost debt by up to 20 billion euros. i think, obviously, we are mainly watching how the plan turns out. all right, thank you so much. reporting from rome there. mark: coming up, going to continue the discussion on european banks with chris jeffrey, with more than $1 trillion in assets under management. this is bloomberg. ♪ julie: live from london and new york, i am julie hyman. mark: i am mark barton. this is "bloomberg markets" on bloomberg television. bad, bad day for european banks. joining me to shout all about it is chris jeffery, strategist at elgin and which has more than $1 trillion in assets under management. thanks for joining

is there a link to what we are seeing it monte dei paschi?alian banks raising money at the same time? >> unicredit would like to separate itself from monte dei paschi, italy's third-largest bank and it has been troubled for years now. unicredit is the biggest bank in italy. it is in a much stronger position insofar as monte dei paschi. they appear to be headed to some sort of endgame here as they await state intervention. the both banks are emblematic of this deeper systemic problem. a structural problem we have seen across the italian commercial banking sector and the fact they are both going out on these massive capital raises at this time really shows -- they are not desperate, but it feels it needs to make a bold move to reestablish itself. manus: let's bring our coast cohost in. i've got volatility in the euro behind me,'s backing last week ahead of the ecb. in the italian story, what are people talking about on trading floors in terms of contagion and the risk to the euro? the contamination per pet -- potential propensity for the euro?

we also understand from our own that monte dei paschi will decide in the next few days whether to gos capital plan. how much is this the whole story around italy, and how much is this just unfortunate timing? >> i think this is a side story. the real italian story is the politics. i hope to avoid new election and get some clarity. than thes clarified, banks will find it much easier to actually attract capital. at the moment, well we are in political limbo, is very difficult. at the moment, it definitely makes sense to talk about these precautionary measures, and possibly just talking about them as a first step will hopefully help to keep markets somewhat settled. there are matters that could be taken to shore up the banking system while we have the need to clarify. anna: ok. thank you very much, good to see you. 7:17 in london. up next, construction equipment makers expect full-year revenue ahead of expectation. we speak live to the ftse 100 company it makes a lot of money in the united states, and talking about trump will be a feature. this is bloomberg. ♪ anna: warm welcome back; t

monte dei paschi says it will apply to tap the fund. this is the bank's third bailout since 2011.hares suspended now on the milan stock exchange. the latest saga for the italian bank. it has come to represent the problems in italian banks. it's not a complete bailout. there will be losses taken by junior bondholders because of european rules. they can't put it all on the taxpayer. >> in the u.s. we had our own moral issues, the divide about whether we should have bailed out our own banks. kn in italy it's a bigger deal. we'll watch that for sure. >>> turning to politics, donald trump once again tweeting about lockheed martin and boeing. the president-elect says what he calls the tremendous cost and cost overruns of lockheed martin's f-35 joint strike fighter program led him to ask boeing to "price out a comparable f18 super hornet jet." lockheed martin shares dropping in the afterhours trading session on that news, off by 2%. boeing shares did edge slightly higher in the afterhours statement. up by 0.2%. boeing says it has committed to working with the president-elect and his admi

monte dei paschi is a big priority there.d we expect this government to be able to address all the world banking issues in italy? certainly not. then they will deal with other emergencies. francine: are we looking at early elections? wolfango: most likely but we look at an election after a certain sequencing. there's court ruling, electrical change, and maybe an election sometime in may, june. francine: is there a danger that by changing electoral law, it gives a free hand to the five-star movement to say the establishment are changing it so that we don't get in? what is the probability of a very populist right-wing or left wing like the five-star movement coming into power in italy? wolfango: it is clear that any change to electrical system, anything they do with the banks, the nomination of gentiloni as a prime minister, are all going to be used by the five-star movement. to a certain extent, they have a point. will they win the election? hard to say. the electrical system will be changed. it will most likely be in a way th

their balance sheets, much more than the $21 billion the italian parliament agreed to provide, and monte paschi may be running out of money faster than we thought. spanish refund, europe's highest court orders spanish banks to refund billions of euros to mortgage holders --

everything is brought about by the monte dei paschi di siena.f they had not done that, of course, there would not have the problem they do have. can you feel it? have you seen some of the words in danish? thank you very much. merry christmas. bye—bye.. hi there. i'm sure you've already heard but barbara, the second named storm of the season, is heading to the uk for friday. now, yesterday was the quiet before the storm in many respects. barbara, out in the atlantic, continues to develop and deepen, and that's going to be swinging to the north—west of the uk over the next 2a hours. it has been a relatively storm—free start to winter, of course, but that is all set to change as barbara comes hurdling in off the atlantic. tightly packed isobars really squeezing together and focussing the strongest winds on scotland. as we start off the morning, the breeze will be picking up across all of the uk but it will become quite windy quickly in the day across northern ireland and scotland. quickly, gales will develop here but the strongest winds will be hea

. >>> italy provides a distraction with rome demanding more time to rescue monte dei paschi, as former prime minister matteo renzi officially resigns following the failure of his referendum. >>> tui travels higher as the tourism group's full-year core earnings growth gives the shares a boost in early trade. >>> the gamble doesn't pay off for uk betting firms as the stocks sell off on a report that mps will demand stricter controls over certain betting machines. >> good morning, everybody. welcome. we're being told today is the most important day of all time for the ecb. >> it's always the most important day. >> exactly. european equity markets gearing up for the most important ecb meeting with a slightly higher attitude. up by a quarter percentage point

tom: here is monte dei paschi, this is a basic chart off the bloomberg.00 euros down to 17 euros. if i look at a chart like that, it is a death spiral. what is the plan for the italians after the first of the year with the five or more monte dei paschi's? michael: i think a lot of it will depend on how the securitization of the bad loans goes. if you look at monte dei paschi, 36% of their loans are bad and if you look at a jpmorgan, it is less than 1%. this is a huge problem for them and they are trying to securitize that off, and kind of have a fresh start. if they are able to do that, they may get some our confidence in the system. they need the capital to allow the write-downs to let that happen. john: how bad do you think those loans really are? we look to these other debt crises, including lehman. suddenly all of that stuff is worth something. is there a buying opportunity or does nobody know? michael: it is hard to tell but they have taken major provisions against them. the securitization will be at a pretty low mark, so there could be some upside i

the clock is ticking for the troubled lender banco monte dei paschi di sienna. just over $5 billion in new investment to help it stay afloat — today is the final deadline for existing investors and other retail investors to purchase new shares. the new italian prime minister has sought parliamentary approval for an emergency bailout package worth some $20 billion in the event that private sector assistance doesn't materialise. this would prove contentious as investors who have already lent to the bank will be penalised under eu laws which came into force earlier in the year. poor quality loans are one of the biggest issues facing italy's banking sector. in total, the country's lenders sit on around $370 billion worth of bad debt. this accounts for about 40% of all the non—performing loans in the eurozone. you can see how exposed italy is. we will be getting an expert view on that later on in world business report. also, we are live to china. the chinese capital beijing has been blanketed in thick smog since the weekend leading the authorities there to take drast