The following is a press release being distributed today on behalf of the Mikhail Khodorkovsky defense team:

OVERWHELMING MAJORITY OF ITALIAN PARLIAMENT VOTE TO SUPPORT MIKHAIL KHORDOKOVSKY

Rome, September 23, 2009 - The Italian parliament today voted in favour of a motion urging the Italian Government "to activate all diplomatic channels, together with other European partners, to guarantee the respect for human rights and the right of defence for Mikhail Khodorkovsky and Platon Lebedev and for all Russian citizens". The motion, presented at the Lower Chamber by Pier Ferdinando Casini, leader of the Christian Democrat Party (UDC), received overwhelming support: out of 478 MPs attending the plenary session, 430 voted in favour. During the debate, Alfredo Mantica, Undersecretary of State for the Ministry of Foreign Affairs, expressed support for the motion on behalf of the Government and called for unanimous adoption

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Today’s Notes reads more like a John le Carre novel than an investment newsletter. But bear with us. It tracks one of the most fascinating news stories you’ve never heard of.  The news reports are maddeningly sketchy. And the mainstream media is doing a damn good job of not reporting the story.

But it’s clear the arrests by Italian authorities of two “Japanese-looking” men allegedly attempting to smuggle $134.5 billion worth of US bearer bonds across the Swiss border is the biggest financial crime in history. And one with major implications for America’s economic security.

For those of you who don’t know, a report surfaced on Monday, June 8, on an obscure Vatican-sponsored news website, AsiaNews.it, that Italy’s financial police (Guardia Italiana di Finanza) had “seized US bonds worth US 134.5 billion from two Japanese nationals at Chiasso (40 km from Milan) on the border between Italy and Switzerland.”

According to the report, these

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by Edward Hugh: Barcelonabr /br /Italy's recession deepened at the start of 2009, with first-quarter gross domestic product falling to its worst level since at least 1980, confirming the impression that Europe's fourth-largest economy is now headed for its worst downturn since World War II. Preliminary data from the national statistics office (Istat) show that Italian GDP fell 2.4% in the first quarter when compared with the last quarter of 2008. This follows a downwardly revised 2.1% contraction in the fourth quarter of last year. Annualised this means a 9.6% contraction rate during the three months, which is very high indeed.br /br /pa href="http://4.bp.blogspot.com/_ngczZkrw340/Sg0skEokxwI/AAAAAAAAN6U/_zHT8IVLSh4/s1600-h/italy+GDP+one.png"img id="BLOGGER_PHOTO_ID_5335970131734742786" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 400px; CURSOR: hand; HEIGHT: 229px; TEXT-ALIGN: center" alt="" src="http://4.bp.blogspot.com/_ngczZkrw340/Sg0skEokxwI/AAAAAAAAN6U/_zHT8IVLSh4/s400/italy+GDP+one.png" border="0" //abr /br /br /Year on year GDP fell by 5.9%, which was also the sharpest drop since Istat's most recent data series starts in 1980 - or for ...

Interesting that Berlusconi and Putin are signing the South Stream deal in Crimea - perhaps a little reminder of who's boss.  Eni, however, is a little surprised that after all they've done for Russia (including selling back Gazpromneft, which was purchased in a Yukos auction), that they should get such a raw deal.

Italian Prime Minister Silvio Berlusconi is scheduled to meet his Russian counterpart, Vladimir Putin, Friday in Crimea and may sign an agreement on South Stream.

A dispute has erupted between Eni and Russian state-controlled Gazprom over the role the Italian oil company will play in the South Stream gas pipeline, Reuters said last week, citing an unidentified person within the Italian government.

The person said Eni wants to be able to market gas

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By Edward Hugh: Barcelonabr /br /The Italian economy continued to contract sharply in the third quarter of 2008 as exports fell sharply - declining at the fastest rate in three years - under the impact of a global slump which weighed down on foreign demand for Italian products, and pushed the Italian economy into its worst recession since at least 1975. Sales of Italian goods abroad fell 1.6 percent from the previous quarter, their biggest decline since 2005.br /br /Pressure is of course on the government to offer a fiscal reponse to the problem, but given Italy's outstanding debt issues and the fact that a large part of the problem is long term structural and not cyclical it is hard to see much of note happening, and indeed Finance Minister Giulio Tremonti's statement this week that additional stimulus packages were pretty pointless could be read as more of an admission ...

by Edward Hugh: Barcelonabr /br /a href="http://1.bp.blogspot.com/_ngczZkrw340/SUEsR712NQI/AAAAAAAALuU/VGFiqyCyzBw/s1600-h/bond+spreads+2.png"img id="BLOGGER_PHOTO_ID_5278548924887872770" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 320px; HEIGHT: 170px; TEXT-ALIGN: center" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/SUEsR712NQI/AAAAAAAALuU/VGFiqyCyzBw/s320/bond+spreads+2.png" border="0" //abr /br /br /Spain yesterday became the third euro zone country within a week to be warned by rating agency Standard amp; Poor's that its credit rating (currently the highest - AAA) is under threat from the deterioration in public finances which is being produced by the government's attempt to support the banking system and put a brake on the dramatic decline in the domestic economy. As in the case of Ireland and Greece last Friday, Samp;P said Spain faces a painful process of rebalancing of its economy and a consequent marked deterioration in its public finances.br /br /The gap in bond yields between the benchmark German bunds and the sovereign debt of Spain, Greece, Ireland, Italy and Portugal has risen fourfold since July (see charts above ...

Rome, Italy-based Eni S.p.A. (E) is an integrated energy company operating in the oil, natural gas, electricity generation, petrochemicals, oilfield services, and engineering industries. Eni was Italy's national oil company prior to its 1995 privatization. The Italian government is still its largest shareholder, with about a 30% stake.We are maintaining our Hold recommendation on Eni ADRs after the company's fourth-quarter results. We continue to believe that the company's positive production-growth profile, capital discipline and attractive dividend are adequately reflected in its premium valuation relative to its European peers.We are increasingly concerned with Eni's high valuation, relative to its historical norms and as production growth slows, the stock could come under significant pressure.Read the full analyst report on E "E" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research

by Edward Hugh: BarcelonaItaly, which is still the eurozone's third biggest economy, slipped into a recession in the third quarter. The Italian economy fell into what is now its fourth recession in less than a decade as gross domestic product shrank 0.5 percent from its level in the second quarter, when it contracted a revised 0.4 percent, the national statistics office said today. This is already Italy's worst recession since 1992, and there is evidently more and worse to come.Italy effectively followed Germany, Europe's largest economy, in posting two consecutive quarters of contraction -- the technical definition of a recession. Spain contracted on the quarter, while France narrowly avoided recession by posting a slender 0.1% expansion after contracting in the second quarter.From the third quarter of 2007 the economy contracted 0.9 percent, and this was the sharpest ...

The U.S. isn’t the only country rolling back on free-market principles. Communist China is also busy bailing out its economy. Over the weekend, the People’s Republic announced a $586 billion ’stimulus’ plan of it own. U.S stock futures are up on the news.

- Italy may be the next country to ‘rescue’ its economy with taxpayers’ money. According the The Times the Italian government was working on plans over the weekend to pump as much as $26 billion into its biggest banks.

- Uncle Sam is about to bailout AIG from its bailout. Apparently, the original handout was too tough on poor old AIG. So now its going to get a sweeter deal. This from the WSJ:

The U.S. government reached a deal Sunday night to scrap its original $123 billion bailout of American International Group Inc. and replace it with a new $150

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As every woman who has ever had dealings with a man knows only too well, it is a lot easier for people to make promises than it is for them to keep them. And when Europe's leaders met in Paris on the 12 October, a lot of fine promises (which were all, surely, very well intentioned) were made. The reality of having to live up to them, however, is turning out, as might only have been expected, to be much more complicated.Basically, the kernel of the plan which is now being operationalised seems to have been thrashed out in Washington on 11 October, when key G7 leaders met with Dominique Strauss Kahn of the IMF, and it was decided to try and erect two great firewalls (corta fuegos) - at least as far as Europe is concerned. One of these was to be co-ordinated by the EU governments, ...