Today's Headlines

Bloomberg:
- Losses stemming from funds that borrow in the asset-backed commercial paper market are “manageable” for most banks, Fitch Ratings said.
- The US dollar is falling to the lowest in a month against the euro and weakened versus the yen after the jobs report.
- Treasury two-year notes had their second-largest gain in three years as a loss in jobs last month bolstered expectations the Fed will cut rates by at least a quarter percentage point this month.
- TXU stockholders approved the $32 billion sale of the largest Texas power producer to a group led by KKR and TPG Inc., clearing the way to complete the biggest leveraged buyout in US history.
- Investors added $197 million to high-yield bond funds in the past week, the most since May, as confidence in more risky debt instruments improved, according to JPMorgan Chase, citing AMG Data Services.
- AU Optronics(AUO) led shares of liquid-crystal display makers higher in Asia after the company posted record monthly sales and prices increased for panels used in computer monitors and notebooks.

Wall Street Journal:
- In a bid to rejuvenate lagging sales of its big sports drink, Gatorade, PepsiCo Inc.(PEP) is launching a low-calorie drink aimed at athletes off the field.
- Congressional Democrats are considering a proposal that would dramatically reduce hedge-fund manager’s ability to put off paying taxes on their compensation.
- GAM, one of the largest fund-of-hedge-funds managers, and rival Thames River Capital are primed to make substantial investments in the stalled bank-loan market, buying debt at a discount from lenders anxious to have it removed from their balance sheets.
- Morgan Stanley’s(MS) quantitative investment unit, known as PDT, for Process Driven Trading, lost about $500 million between the last week of July and Aug. 9.

NY Times:
- General David Petraeus, the top US commander in Iraq, wants to keep heightened troop levels in Iraq though much of next year to maintain military gains.
- US presidential candidate Mitt Romney wants to end taxes on most investment earnings for families that makes less than $200,000 a year.

BusinessWeek.com:
- Light at the End of the Subprime Tunnel.

San Francisco Chronicle:
- San Francisco would offer its own identification cards to illegal immigrants, under legislation being drafted by city Supervisor Tom Amiano. The cards would be accepted by all city agencies and organizations that receive city funding.

Forbes.com:
- Larger financial institutions will increasingly purchase hedge fund firms, potentially fueling industry consolidation over the next three years, according to a survey conducted by CPA firm Rothstein Kass.

AP:
- Fugitive Democratic fund-raiser Norman Hsu was arrested in Colorado late yesterday.
- Former North Carolina prosecutor Mike Nifong reported to jail today to begin serving a 24-hour sentence for lying to a judge during the now-discredited Duke lacrosse rape case.

Financial Times:
- Carlyle Group, the buyout firm run by David Rubenstein, may buy financial services companies and is hiring a team of former bank executives, citing Jean-Pierre Millet, head of Carlyle’s European business.

Reuters:
- India’s Simbhaoli Sugar Mills Ltd. will boost ethanol production 50% by March because of declining sugar prices.
- Goldman Sachs(GS) has raised more than $1.5 billion for a fund that will acquire distressed debt, including mortgages and buyout loans. Several other hedge funds and private-equity firms are seeking capital for distressed-debt funds.
- Cisco Sytems(CSCO) CEO John Chambers said the US economy may be headed for a “soft landing” and the Federal Reserve may cut interest rates.