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.” Continue reading »

A Romance With Risk That Brought On a Panic (NYT)
Although Mr. Corzine had been a United States senator, governor of New Jersey, co-head of Goldman Sachs and a confidant of leaders in Washington and Wall Street, he was at heart a trader, willing to gamble for a rich payoff. Dozens of interviews reveal that Mr. Corzine played a much larger, hands-on role in the firm’s high-stakes risk-taking than has previously been known…His obsession with trading was apparent to MF Global insiders over his 19-month tenure. Mr. Corzine compulsively traded for the firm on his BlackBerry during meetings, sometimes dashing out to check on the markets. And unusually for a chief executive, he became a core member of the group that traded using the firm’s money. His profits and losses appeared on a separate line in documents with his initials: JSC.

Moody’s: Pressure Remains on Euro Sovereigns Despite Summit Deal (Reuters)
Twenty-six of the 27 European Union leaders on Friday agreed to pursue stricter budget rules for the single currency area and also to have euro zone states and others provide up to 200 billion euros ($267 billion) in bilateral loans to the International Monetary Fund (IMF) to help tackle the crisis. “In substance, however, the communique offers few new measures, and does not change our view that risks to the cohesion of the euro area continue to rise,” Moody’s said in its weekly credit report. “As we announced in November, unless credit market conditions stabilize in the near future, our ratings of all EU sovereigns will need to be revisited. The communique does not change that view, and we continue to expect to complete such a repositioning during the first quarter of 2012.”

EU Banks Sit In Tangled Web (WSJ)
New data released last week by European banking regulators suggest the risks of banks suffering losses tied to European government bonds could be higher and more widespread than previously realized. The numbers show European banks have sold a total of €178 billion ($238 billion) worth of insurance policies, in the form of financial derivatives known as credit-default swaps, on bonds issued by the financially struggling Greek, Irish, Italian, Portuguese and Spanish governments. If those bonds default, as some investors fear they might, banks could be on the hook for making large payments to the holders of the swaps. The banks have at least partly insulated themselves from such potential losses by buying large quantities—roughly €169 billion worth—of credit-default swaps tied to the same bonds, apparently in large part from other European banks, according to European Banking Authority data.

Report Demands Tougher UK Banks Oversight (WSJ)
Major acquisitions by U.K. banks should be subject to regulatory approval and bank bosses should face penalties if their institution fails, the U.K.’s financial services regulator said Monday in a long-awaited report into the 2008 failure of Royal Bank of Scotland Group PLC. The Financial Services Authority said RBS managers made “multiple poor decisions” when they pursued an ill-fated takeover of European lender ABN Amro in 2007 that ultimately led to a £45.5 billion ($71.3 billion) bailout by U.K. taxpayers. Adair Turner, chairman of the FSA, said that future major acquisitions by U.K. lenders should require regulators’ explicit approval and recommended that bank executives and directors face “personal consequences” in the event of another bank failure.

Occupy Protesters Seek to Shut West Coast Ports (AP)
Anti-Wall Street protesters up and down the West Coast are joining an effort to blockade some of the nation’s busiest ports from Anchorage to San Diego. Demonstrators are scheduled to gather at 5:30 a.m. to march on the Port of Oakland, which Occupy protesters successfully shut down in November. The protests being billed as action against “Wall Street on the waterfront” are perhaps the Occupy movement’s most dramatic gesture since police raids sent most remaining camps scattering last month. Demonstrators began forming those camps around the country about two months ago to protest what they call corporate greed and economic inequality. Organizers hope to draw thousands Monday to stand in solidarity with longshoremen and port truckers they say are being exploited.

Hey, I’m Not Dead Yet (KWTX)
A Pennsylvania man published an obituary for his still-living mother in an attempt to get paid bereavement time off from work, authorities say. Relatives called The Jeffersonian Democrat newspaper in Brookville, Pa., after the obit appeared to report that the woman was actually alive and well and to underscore that, the woman visited the paper, too. Brookville police charged Scott Bennett, 45, with disorderly conduct on Tuesday. Democrat editor Randy Bartley says he accepted the obituary in good faith after he was unable to confirm the funeral arrangements at press time. He told The Derrick newspaper Friday that the woman was very understanding. Police Chief Ken Dworek says Bennett wrote up the memorial notice because he didn’t want to get fired for taking time off. Continue reading »