MAJOR PAPERS:

• The Wall Street Journal said the $19B privatization of Clear Channel Communications Inc (NYSE: CCU) was near collapse as the private-equity firms behind the deal and the banks financing it failed to resolve their differences over terms of the credit agreement, people familiar with the matter said.
• Comcast Corporation (NASDAQ: CMCSA) and Time Warner Inc (NYSE: TWX) are in talks to fund a new nationwide wireless company that would be operated by Sprint Nextel Corporation (NYSE: S) and Clearwire Corporation (NASDAQ: CLWR), and use WiMax technology, reported the Wall Street Journal. Intel Corporation (NASDAQ: INTC) and Google Inc (NASDAQ: GOOG) may also help with funding.
• The Wall Street Journal also reported federal regulators are handing out warnings to banks due to their exposure to development loans and commercial real-estate construction. Sources believe Corus Bankshares Incorporated (NASDAQ: CORS) is facing trouble in the near future due to increasing scrutiny by regulators and the fact that much of the fallout in the condo sector has yet to be felt by banks.
• Some banks in the government-sponsored Federal Home Loan Banking system want to guarantee municipal infrastructure projects, the Financial Times reported, thus fulfilling the role traditionally taken by monoline insurance groups such as MBIA Inc(NYSE: MBI).

When it comes to anything in the financial sector, investors have been watching their stock holdings and waiting for the other shoe to drop. In the case of many companies, these holdings must resemble a financial octopus, as there seems to be third and fourth and fifth shoes dropping, with no end in sight.

That appears to be the case with one of my long-time holdings, MBIA Inc. (NYSE: MBI), which somehow decided today was the day to come clean. The financial guarantor said it had $30.61 billion in total multi-sector CDO exposure. MBIA has been a steady performer for 30 years, and this is one of the things that brought it to my attention about four years ago when I added it to several portfolios.

I suppose I should be happy I sold half of it before it tanked. However, this means that what was a wonderful stock pick has nothing to show for itself after four years, at least on paper. I am going to hold on to the remaining shares and ride this storm out, but it is harder to stomach, given management's bungling.