Opening Bell: 12.13.11

Moody’s Puts Spanish Banks On Review (WSJ)
The negative review covered Banco Cooperativo; Banco de Sabadell SA; Bankia SA and its holding company, Banco Financiero y de Ahorro; Bankinter SA, CaixaBank SA and holding company La Caixa; Confederacion Espanola de Cajas de Ahorro, or CECA; Caja Rural de Granada; Ibercaja Banco SA; and Lico Leasing…The ratings service said an earlier reassessment of the banks’ financial strength led it to expect higher losses from businesses exposed to Spain’s commercial real-estate sector. “The indicators of asset quality in the real-estate segment just keep deteriorating, and what’s worse, there are no signs that the pace of the deterioration is easing,” said Alberto Postigo, one of the analysts who wrote the report. Moody’s said that the non-performing loan rate among real-estate developers already exceeded the level reached in the crisis of the early 1990s.

Top MF Global Execs Say They Don’t Know How Funds Went Missing (Bloomberg)
Three of MF Global Holdings Ltd.’s top executives said they didn’t know what happened to as much as $1.2 billion in client funds that went missing in the days before the New York-based brokerage filed for bankruptcy. Henri Steenkamp, chief financial officer of MF Global, and Bradley Abelow, the firm’s president and chief operating officer, said in testimony prepared for a Senate Agriculture Committee hearing today that they still don’t know the location of the funds. Jon S. Corzine, former chairman and chief executive officer of the broker, is scheduled to testify at the same witness table, after telling U.S. House lawmakers last week that he never intended to authorize any misuse of client money. “I do not know why these funds cannot be accounted for, but based on the fact that no shortfalls had been reported to me previously, it appears that any irregularities were likely caused by events that occurred shortly before the bankruptcy filing,” Steenkamp said in the testimony.

WaMu Ex-Officials Settle FDIC Lawsuit (WSJ)
Three former executives of Washington Mutual Inc. have agreed to settle a civil lawsuit stemming from the biggest-ever U.S. bank failure for less than 10% of the $900 million that was sought by federal regulators, according to people familiar with the situation. The deal would mark the latest setback for the government in a high-profile, financial-crisis-related case. The lion’s share of the payout, which is expected to total less than $75 million, would come from insurers and the bank’s estate—not from the pockets of the former executives.

German Economic Expectations Improve (WSJ)
German economic expectations improved as optimism grew that the euro-zone’s sovereign-credit crisis will eventually see some resolution following the European Union leaders’ decision last week in Brussels. The widely-watched ZEW index rose, after declining for nine consecutive months, to minus 53.8 in December from November’s minus 55.2, the Center for European Economic Research, or ZEW, said Tuesday. While experts keep expecting a “very bad first quarter,” the specter of a full-blown recession in Germany has receded as economic performance is forecast to pick up in the second quarter of next year, ZEW expert Michael Schroeder said.

MBIA to Pay Morgan Stanley $1.1 Billion to Settle Legal Battle (WSJ)
Talks that spanned the past two months between Morgan Stanley, MBIA and New York’s top financial regulator, Benjamin M. Lawsky, culminated late Monday night in a settlement that resolves about $4 billion in insurance contracts Morgan Stanley bought from MBIA before the financial crisis, according to the person. Under the agreement, the insurance contracts Morgan Stanley bought from MBIA will disappear, ending the New York securities firm’s costly entanglement with the insurer.

Mitt Romney Loves Border Patrol Humor (Morning Money)
“There are more Republicans here than my whole state,” Romney said at a fundraiser in New Jersey hosted by Chris Christie. “I’ve watched Chris Christie from afar just in awe of his accomplishments…This guy’s just amazing. The whole nation’s watching this guy…I noticed you have a problem with Border Security here. There are people from New York.” [Points out that Jets Owner Woody Johnson, a Romney fundraiser, is here.]

Cash-Poor Mets Given $40 Million Bank Loan (NYT)
The owners of the Mets, needing cash and unable to turn to Major League Baseball for more financial help, received a $40 million loan from a major bank in the past six weeks. The team described the arrangement as a bridge loan, meant to aid the team as it tries to raise money through the sale of minority stakes in the club. The loan marks the second time in a year that the Mets have received an infusion of cash. A year ago, the team’s owners, Fred Wilpon and Saul Katz, received a $25 million loan from Major League Baseball, but they have not been able to repay it. Meanwhile, Sandy Alderson, the club’s general manager, said last week that the organization had lost $70 million in 2011 alone.

Bewildered bear saunters into downtown Vancouver (TGM)
For reasons known only to itself, the small black bear surfaced on the back of a dumpster truck on Monday afternoon as workers prepared to drive away to the dump…“We were tipping a bin into the dumpster and a guy across the street yelled out that a bear just fell out into the dumpster,” said Bret Dougherty, owner of MiniBins. “Then the bear crawled up onto the edge of the dumpster, trying to decide what to do next.” Police quickly roped off the streets and summoned B.C. conservation officer Alex Desjardins, who dispatched the bewildered bear into slumber land with a few tranquilizers. “The bear was sitting on top of the truck like he was king of the world,” Mr. Desjardins said. He used a hand-held tranquilizer gun and a “jab pole” with a syringe at the end. “It was pretty textbook. There were hundreds of people looking on and I got big round of applause.”

Fed May Revise Zero-Rate Vow as Bond-Buying Need Fades (Bloomberg)
The Federal Reserve will probably revise its pledge to keep interest rates close to zero through mid-2013 as the need for large scale asset purchases diminishes, according to economists in a Bloomberg News survey. The Fed will alter the interest rate commitment before June, according to 64 percent of economists surveyed, with 51 percent saying the central bank will abandon the option of a third round of buying bonds, or so-called QE3.

Top Earners Not So Lofty in the Days of Recession (NYT)
The share of income received by the top 1 percent — that potent symbol of inequality — dropped to 17 percent in 2009 from 23 percent in 2007, according to federal tax data. Within the group, average income fell to $957,000 in 2009 from $1.4 million in 2007. Analysts say the drop largely reflects the stock market plunge, and most think top incomes recovered somewhat in 2010, as Wall Street rebounded and corporate profits grew.

Fightin’ Falcone (NYP)
New York billionaire Phil Falcone’s beleaguered wireless startup, LightSquared, came out kicking and screaming yesterday over leaked test results questioning the wireless network’s compatibility with costly navigation equipment. The leaked results were a “distortion of the truth” intended to “prejudice the public,” angry LightSquared executives said during a conference call. The company’s chief executive, Sanjiv Ahuja, called for an investigation into the leak by the US Department of Defense and the US Department of Transportation. On Friday, it was reported that a draft of a highly anticipated government-sponsored test conducted on LightSquared’s high-speed wireless service showed “harmful interference” on 75 percent of receivers tested.

BlackRock To Reduce San Francisco Jobs (Bloomberg)
BlackRock plans to eliminate 59 jobs in San Francisco starting at the end of January. The company disclosed the cuts in a Dec. 7 state filing in California.

Woman caught smuggling 1.5kg of cocaine in her dreadlocks on flight to Bangkok (DM)
South African Nobanda Nolubabalo, 23, was arrested and held in Thailand’s capital yesterday after customs officers allegedly noticed a suspicious white substance in her hair. Officials later carried out a search and discovered she had allegedly matted the Class A drug into her dreadlocks before boarding a flight from Brazil. Thailand’s Bangkok Post reported that the smuggled cocaine had a street value of £93,000 (4.5 million baht).

Comments (35)

  1. Posted by Put_Option | December 13, 2011 at 9:39 AM

    Well in Nobanda's defense, it was probably cut so many times she probably thought it was baby powder

  2. Posted by tyu | December 13, 2011 at 9:41 AM

    I would like to see "Titanic" redone with predatory, hungry bears.
    - Guest who thinks groovy meds and climbing on things would be a better way to spend the morning than sitting in a cubicle.

  3. Posted by u kno who | December 13, 2011 at 9:41 AM

    I pray for a bewildered bear to saunter down from Canada and eviscerate all these annoying American politicians. Ass douches.

  4. Posted by The Truth | December 13, 2011 at 9:47 AM

    Talk about a bridge to nowhere

    - D. Einhorn

  5. Posted by Reality | December 13, 2011 at 10:00 AM

    mets suck

  6. Posted by Guest | December 13, 2011 at 10:00 AM

    It makes me sad that the Astros are probably a more pathetic franchise then the Mets…

  7. Posted by H. J. Simpson | December 13, 2011 at 10:01 AM

    We're here! We're queer! We don't want any more bears!

  8. Posted by Guest | December 13, 2011 at 10:04 AM

    The Globe and Mail is usually abbreviated as G&M.

    - some joke involving RBC quants here

  9. Posted by Nervous Jew | December 13, 2011 at 10:19 AM

    Canadian coke bears make me very nervous.

  10. Posted by geoffgeoffgeoff | December 13, 2011 at 10:28 AM

    Yo dawg, I herd you like cocaine, so I put cocaine in your hair so you can fly while you fly.

    -Jimmy Cayne, IV XX

  11. Posted by guest | December 13, 2011 at 10:28 AM

    Caught smuggling drugs in Thailand. Ouch.

  12. Posted by Guest | December 13, 2011 at 10:32 AM

    Don't worry, the Pepsi bears eventually show up on a yacht

  13. Posted by Brick Tamland | December 13, 2011 at 10:40 AM

    Did the bear smell menstruation?

  14. Posted by Home Alone | December 13, 2011 at 10:40 AM

    New Nat Geo "Locked Up a Broad" now in production

  15. Posted by Texashedge | December 13, 2011 at 10:41 AM

    "Thailand’s Bangkok Post reported that the smuggled cocaine had a street value of £93,000"

    £93,000 / 1,500 grams / (.64 £/$) = $97 per gram. That's some good shit.

  16. Posted by Bandersnatch | December 13, 2011 at 10:44 AM

    Serious question: How could the Mets lose $70 million last year when they don't spend much for players? Are TV revenues in a separate entity that doesn't contribute to the Mets' bottom line?

  17. Posted by InfiniteGuest | December 13, 2011 at 10:53 AM

    Maybe it's just a really posh street.

  18. Posted by Canabanker | December 13, 2011 at 10:55 AM

    No bear market here!

    - Vancouver Investment Banker

  19. Posted by Guest | December 13, 2011 at 10:55 AM

    I didn't get the same answer

    -UBS MD

  20. Posted by tyu | December 13, 2011 at 10:57 AM

    Do your parents know you're on the computer?

  21. Posted by Hippy | December 13, 2011 at 10:58 AM

    They're currently filming the wildlife version of 'Dazed & Confused' around Vancouver. Apparently the bears are having trouble seperating their roles from reality.

    - Wildlife Psychologist

  22. Posted by Texashedge | December 13, 2011 at 11:12 AM

    Got me completely stumped too:

    The Mets spent $120 million on player salaries and drew 2.3 million people this last year. Unlike in football, the majority of MLB revenues come from ticket sales/concessions, but the average Mets ticket price was $59 per ticket, i.e. $140 million in revenues (not counting beer/food/parking sales or TV revenues which are huge). But they have something like $40 million per in debt service costs.

    That's still only a ~$20 million loss (again, not counting beer/parking/food sales OR TV revenues). Unless their CitiField lease is just ridiculous (and I can't find the lease terms on the internet), I don't see how it adds up. Are they depreciating players or something?

  23. Posted by HAM05 | December 13, 2011 at 11:12 AM

    assholes

    -bear

  24. Posted by rastadooche | December 13, 2011 at 11:14 AM

    We are currently petitoning the UN to have this declared a hate crime.

  25. Posted by Hakuna Matata Guy | December 13, 2011 at 11:22 AM

    Enron or Madoff take your pick

  26. Posted by Alt_EST | December 13, 2011 at 11:27 AM

    Bear,

    Dumpster diving for my old dresses?

    -L.M. Falcone

  27. Posted by VonSloneker | December 13, 2011 at 11:29 AM

    Nobanda? Nobanda Nolubabalo? It's me Lionel Joseph!

    - L.W. Joseph III, Director of Cultural Activities, Haile Selassie Pavilion

  28. Posted by guest | December 13, 2011 at 11:33 AM

    the strong draft created by the lack of championship banners is depreciating the citi field at twice the rate

  29. Posted by VonSloneker | December 13, 2011 at 11:32 AM

    We beg to differ. At least the Stros have been to the World Series.

    -Seattle Mariners & the Erstwhile Expos (Nationals)

  30. Posted by PermaGuestII | December 13, 2011 at 12:02 PM

    Got to be the lease. Also- are you sure beer/parking/food sales accrue to the team?

  31. Posted by PermaGuestII | December 13, 2011 at 12:04 PM

    N'goia-n'goia-n'goia-HAI!

  32. Posted by Cut Me | December 13, 2011 at 12:20 PM

    I cannot decide. I'm going to have to go with Enradoff.

  33. Posted by Cut Me | December 13, 2011 at 12:22 PM

    Yes, we did lock up that broad.
    -Thailand

  34. Posted by Texashedge | December 13, 2011 at 3:54 PM

    Beer and food definitely to team, merchandise split with the league (do people actually buy Mets gear?), parking to whomever owns the lots. Really surprised the lease terms (and sources and uses on stadium financing) are not easily Googleable.

  35. Posted by Deleveraging | December 13, 2011 at 5:03 PM

    Katz/Wilpon have a seperate legal entity that owns SNY Network (Sterling) and other properties (Cyclones, etc.) For legal reasons, I think they are avoiding tapping those assets. Besides, whatever liquidity they had was probably turned to fudge by Bernie.