Mar 222012

Benedictus XVI is having a tough month.

First, on 03/07/12, the U.S. State Department named the Holy See, commonly know as the Vatican, as a new “Jurisdiction of Concern” in its 29th annual International Narcotics Control Strategy Report (the “INCSR”).  The INCSR reviews conditions in the major illicit drug-producing countries, the major drug-transit countries, and the major source countries for precursor chemicals used in the production of illicit narcotics. In addition, the INCSR discusses conditions in the major money-laundering countries.

Next, on 03/16/12, JPMorgan notified the the Vatican’s financial arm, the Istituto per le Opere di Religione (the “IOR”), that its account would be closed due to a failure to provide sufficient information on money transfers.  In the prior 18 months, the IOR had purportedly swept €1.5bn through the JPMorgan account with limited transparency.

The IOR, founded in 1942 by Pope Pius XII to handle the financial activities for priests, nuns, and other Roman Catholic religious institutions, has an unfortunate history of shady dealings.  For example, the IOR was entangled in the collapse Banco Ambrosiano, with lurid allegations about money-laundering, freemasons, mafiosi and the mysterious death of Ambrosiano chairman Roberto Calvi – “God’s banker”.  At the time of the Banco Ambrosiano collapse, it was the largest private bank in Italy and the IOR was a minority owner.  Several investigations have failed to determine the exact role of IOR in the management of Banco Ambrosiano and whether Calvi, who was found hanging under Blackfriars Bridge near London’s financial district, killed himself or was murdered.  Despite denying any responsibility for the collapse of Banco Ambrosiano, the IOR paid $250mm to creditors in what it called a “goodwill gesture.”

Perhaps all that smoke means something else is cooking in the Sistine Chapel…



Jan 242012

Hyperdynamics Corporation (NYSE:HDY)(“Hyperdynamics” or the “Company”), which closed yesterday at $3.41/share (implying a market capitalization of $542.7mm), has no revenue generating assets, a long history of value destroying and dilutive ventures, and a shady management team; its common stock has an estimated fundamental intrinsic value of less than $1.00/share.  Hyperdynamics’ share price will likely reach this target within the next 12-months as the existing cash balance is depleted and a Chapter 11 bankruptcy filing looms.  Hyperdynamics’ sole “asset” is a deepwater oil & gas exploration concession in the offshore waters of the Republic of Guinea in northwest Africa.  The Republic of Guinea is universally regarded as one of the most corrupt and misgoverned countries in Africa (the most recent coup d’état attempt was just on 07/19/11), so it is questionable that the Company would be able to retain title to the property in the unlikely event its misguided exploration efforts were even moderately successful.




Dec 172011 published a brief article on Seeking Alpha discussing recent natural gas discoveries off-shore the coast of Mozambique by Anadarok Petroleum Corp, Cove Energy PLC, Eni SpA, and Mitsui & Co.  The full article is available via: