Opening Bell: 12.15.11


Bernanke: Fed Has No Plans To Aid EU Banks (Bloomberg)
Senator Bob Corker, a Republican from Tennessee, said Bernanke made it “very clear” in closed-door comments today the central bank doesn’t intend to rescue European financial institutions. Lindsey Graham, a South Carolina Republican, said Bernanke told lawmakers that “he doesn’t have the intention or the authority” to bail out countries or banks. Both senators spoke to reporters after leaving the one-hour session at the Capitol in Washington.

ECB's Draghi Plays Down Hopes on QE (WSJ)
European Central Bank President Mario Draghi Thursday rejected suggestions that the ECB should embark on quantitative easing as a means to boost the euro zone's economic performance, which has been dragged down by the region's sovereign debt crisis. "I don't think quantitative easing leads to stellar economic performance. I see no evidence that quantitative easing greatly boosts the U.K. and U.S. economies," Mr. Draghi said in response to a question after giving a speech in Berlin.

Wall Street Cools To Groupon (WSJ)
Analysts at a majority of Groupon's underwriters which initiated coverage for the first time Wednesday issued the equivalent of "hold" or neutral recommendations, with "holds" outnumbering "buys" by a margin of six to five. In fact, two of the three top-line managers of Groupon's initial public offering—Morgan Stanley and Credit Suisse Group—were neutral, while the report from Goldman Sachs Group Inc. was positive.

Paulson's Bright Spot May Fade As Gold Plunges (Bloomberg)
Until this month, gold had been the bright spot for Paulson & Co. clients, who can choose to invest in gold-denominated shares of the hedge funds. Gains in bullion had alleviated losses of 46 percent, in the dollar share class, for one of the firm’s biggest funds this year through November. Paulson also offers a dedicated Gold Fund, its best performer this year.

Traders Confounded as Volatility Extends Run (Bloomberg)
Jeffrey Kronthal, a former Merrill Lynch & Co. senior fixed-income executive, said he’s never seen so much volatility over such a long period as this in his 33-year trading career. “Volatility, to a certain extent, was a friend of Wall Street, but not like this,” said Kronthal, who co-runs the $1.2 billion hedge fund KLS Diversified Asset Management in New York. “I haven’t seen volatility like this in a sustained way ever before.”

MF Global’s Risk Officer Said to Lack Authority (NYT)
A House committee is expected to disclose on Thursday that MF Global, under Jon Corzine, stripped critical powers from its top executive in charge of controlling risk, according to a person briefed on the matter.

Regulators Know Where MF Global Funds Went (Reuters)
Jill Sommers, who is heading the Commodity Futures Trading Commission's review of MF Global, said regulators "are far enough along the trail" that they know where the money went.

Odds spike against Falcone’s LightSquared (NYP)
Yesterday’s report did not help Falcone’s cause — and kept his huge financial bet at risk. The government group, which represents nine federal agencies, including the Defense and Transportation departments, said its testing revealed that “LightSquared signals caused harmful interference” to “general purpose GPS receivers.”

In Congress, Another Partisan Spending Battle (NYT)
If an agreement on the spending bill does not come by midnight Friday, the government will be unable to pay its bills unless Congress passes yet another stop-gap financing bill to buy time, something the White House indicated late Wednesday night that it would prefer. Leaders of both parties say they are determined to avoid a pre-Christmas shutdown, raising the possibility that Congress may just pass a short-term bill to keep the government open and kick the whole payroll tax and spending mess into next year.

SEC Cops Want To Fight US Judge (WSJ)
The SEC's enforcement staff is expected to recommend to the five-person commission leading the agency that it vote to appeal last month's rejection by U.S. District Judge Jed S. Rakoff of a proposed $285 million settlement between the SEC and Citigroup Inc., according to people familiar with the situation. In his ruling, the New York judge denounced as "pocket change" a penalty agreed to by Citigroup as part of the settlement, claiming it was paltry compared with losses of more than $700 million suffered by investors in a $1 billion deal called Class V Funding III. Judge Rakoff also attacked the boilerplate language used in many SEC settlements, where defendants neither admit nor deny wrongdoing. If the allegations were correct, he wrote, "this is a very good deal for Citigroup," saying that it was hard to tell what the SEC got out of the agreement "other than a quick headline." The settlement's rejection is proving to be a nightmare for the SEC.

Attorney: Sandusky may have been teaching kids to shower (ABC)
A Carlisle attorney who has joined Jerry Sandusky's defense team says the former Penn State assistant football coach may have showered with young boys because the children lacked basic hygiene skills. Sandusky is accused of molesting ten boys he met through The Second Mile charity he founded for troubled youth. "Some of these kids don't have basic hygiene skills," attorney Karl Rominger said. "Teaching a person to shower at the age of 12 or 14 sounds strange to some people, but people who work with troubled youth will tell you there are a lot of juvenile delinquents and people who are dependent who have to be taught basic life skills like how to put soap on their body." Rominger, who spoke with abc27 News Tuesday, added that his college cross country coach often showered with the team.