There is a reason why Italy keeps bailing out Monte Paschi, Italy's third largest, most scandal-ridden and most insolvent bank not to mention the oldest in the world, again and again and again, and which is currently demanding yet another bailout. The reason is presented in the chart below which shows the amount of *Italian *bonds held by the *Italian *bank. According to yesterday's earnings release, *BMPS' Italian bond holdings just hit an all time high *with Monte Paschi buying over €3 billion in Italian sovereign bonds in Q2 alone.Putting the above into words:
· *An insolvent government promises to provide more funny-money and guarantees to an insolvent bank, while in return...*
· *The insolvent bank keeps buying the bonds sold by the insolvent government, thereby...*
· *Continuing the charade that both entities are solvent *
There has to be a name for such a truly "innovative" New Normal symbiotic relationship. Reported by Zero Hedge 13 hours ago.