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Opening Bell: 12.14.11

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Merkel Cabinet Backs Bank-Rescue Fund Revival (Bloomberg)
Chancellor Angela Merkel’s Cabinet backed plans to reactivate Germany’s bank-rescue fund to help bolster lenders facing insolvency and lessen the risk of a systemic financial meltdown as a result of the debt crisis. Ministers meeting in Berlin today agreed to boost the size of the fund to 480 billion euros ($626 billion) from 360 billion euros, according to the draft bill. The text waters down provisions in earlier drafts to force troubled banks to recapitalize. ‘It’s especially important to act preventively including when there is a latent danger” to the bank system, the bill said. The fund’s revival underscores the government’s aim to be ready should any bank face collapse during the debt crisis and to pre-empt contagion. These measures include state help if banks are unable to raise capital via private means, it said.

The maverick behind Merkel (Reuters)
Schaeuble, a 69-year old political veteran, has been confined to a wheelchair since being shot by a deranged man a week after German reunification. Long committed to the cause of European unity, he has heavily influenced Berlin's response to the crisis. Some European insiders say he is perhaps the only politician capable of pushing Merkel, a risk-averse politician from ex-communist East Germany, to adopt the policies which may be needed to save the currency bloc.

Fed Stands Pat (WSJ)
Federal Reserve officials left their policy options open for 2012 but took no actions Tuesday and offered an economic assessment that was guardedly more upbeat but still marked by risks. Nine out of 10 Fed officials voted to keep the U.S. central bank's easy-credit policies unchanged for the second meeting in a row in what was the last Federal Open Market Committee gathering of the year. It took place on Fed Chairman Ben Bernanke's 58th birthday. Officials reiterated that short-term interest rates are likely to stay close to zero until mid-2013 at least. They said indicators pointed to some improvement in the U.S. jobs market.

CME Head Challenges Corzine's Account in MF Hearing (WSJ)
CME Group Executive Chairman Terrence Duffy testified that a CME auditor learned of the shift of customer funds, and of Mr. Corzine's knowledge of the move, from a senior MF Global official during a telephone call before the firm's collapse. CME was a frontline regulator MF Global's operations, including the futures side of the firm that holds customer cash.

Gingrich Surges to Wide Lead Over Romney (CNBC)
Former House Speaker Newt Gingrich has surged to a wide lead over Mitt Romney for the 2012 Republican nomination, but either leading candidates would face a daunting path in the general election against President Obama, according to a new NBC News/Wall Street Journal poll. The survey shows Mr. Gingrich backed by 40% of Republican voters, compared to 23% for former Massachusetts Gov. Mitt Romney...Mr. Gingrich draws his strongest support from self-described conservatives and supporters of the Tea Party movement. Some 70% of Republican voters call themselves conservative, and 57% see the former Speaker that way, too. Just 29% of Republicans consider Mr. Romney conservative, the poll shows. Yet that strength in the nominating process, which begins with the Jan. 3 Iowa caucuses, masks Mr. Gingrich's weakness with the broader electorate next November. The telephone survey of 1,000 voters, conducted Dec. 7-11, carries a margin for error of 3.1 percentage points. Americans view Mr. Gingrich unfavorably by a margin of 16 percentage points (24% positive, 40% negative); swing voters, who expressed openness to backing either party's nominee in the general election, view Mr. Gingrich unfavorably by a 3 to 1 (16% positive, 48% negative). Mr. Romney also is viewed unfavorably by a plurality, with 32% expressing negative views and 24% positive.

Credit Agricole readies investment bank cuts (Reuters)
France's Credit Agricole will unveil a fresh round of cutbacks in investment banking, including job cuts and country exits, as the lender ploughs ahead with a back-to-basics strategy sped up by the eurozone debt crisis. Union sources told Reuters the bank would detail the plan on Wednesday, with the French press predicting potential job cuts of between 2,000 to 2,500. The cuts would primarily hit its investment banking unit, which employs 13,000.

Female Banker Tells Oprah Getting Plastic Surgery Helped Her Career (HP)
"Not only did my romantic options explode [following liposuction, breast implants, two nose jobs, ear pinning, a forehead lift, lip filler, a tummy tuck, a facelift and veneers], but my career instantly shifted into a higher gear. I was suddenly being courted by senior partners, included in meetings with the CEOs and CFOs of current and prospective clients."

Morgan Stanley Faces Fresh Troubles (WSJ)
Morgan Stanley has been forced to return about $700 million to investors in its flagship global real-estate fund and to slash fees to persuade them to stick with the firm after a lackluster performance by the fund group, according to people familiar with the matter. The moves enabled the Wall Street firm to win a crucial investor vote on the future of its $4.7 billion global-real-estate fund this month. A loss in the vote could have threatened Morgan Stanley's entire private-equity real-estate investment business, which used to generate large profits before the financial crisis but has been dogged by poor returns in recent years.

Wall Street analyst gives Zynga a stinga (NYP)
Days before the San Francisco outfit’s initial public offering, one Wall Street firm yesterday advised investors to sell shares in Zynga. The unusual pre-IPO report from Sterne Agee’s Arvind Bhatia puts a “sell” rating on Zynga shares with a price target of $7. The company is expected to price shares between $8.50 and $10 after the closing bell tomorrow before it starts trading on Friday.

Venezuela Minister: OPEC Agrees to Limit Oil Output (Reuters)
The Organization of the Petroleum Exporting Countries agreed a new supply target of 30 million barrels daily, Venezuelan Oil Minister Rafael Ramirez said, roughly in line with current production. The agreement caps output for all 12 OPEC members for the first half of the year, keeping supply near 3-year highs—enough to rebuild lean global inventories. Higher supply from OPEC has kept a leash on oil prices which traded at $108 for Brent on Wednesday, down from a year-high $127 in April.

Scientists looking for Higgs Boson "God particle" & hoping to re-create the Big Bang (NYDN)
Two teams of researchers are searching for the subatomic particle known as the Higgs Boson inside the Large Haldron Collider, a 17-mile ring loaded with magnets and buried beneath Geneva, Switzerland. Physicists create a pair of hyperfast proton energy beams inside the $10 billion facility. The beams are violently crashed into one another — think an NFL helmet-to-helmet hit to the Nth power — in hopes of re-creating the Big Bang responsible for creating the universe. Which would, in turn, show unto them the “God particle.” It appears now that if the particle exists, it likely has a mass somewhere between 124 and 126 giga-electron volts...The European Organization for Nuclear Research acknowledged Tuesday that it’s too early “to make any conclusive statement on the existence or nonexistence of the Higgs.”