Today's Headlines

Bloomberg:
- KeyCorp, U.S. Bancorp, Regions Financial Corp., and National City Corp. said they may join the government's $250 billion plan to recapitalize banks and are pondering whether to use the money to shore up capital or make acquisitions.

- Argentine bonds soared above 24 percent and stocks sank the most in a decade on speculation the government will seize private pension funds and use the assets to stave off the second default this decade. ``It's horrible,'' said Jaime Valdivia, who manages $1 billion of assets for Emerging Sovereign Group in New York. ``We're going back to the dark ages. Not even in times of the worst financial stress did the government ever think about taking over the private pension system.''

- Crude oil fell more than $2 a barrel as the U.S. dollar rose to its highest in more than a year against the euro, dimming the appeal of commodities as a hedge. Oil climbed earlier on expectations that OPEC, supplier of 40 percent of the world's oil, will reduce output at a meeting in Vienna this week. ``The Saudis will probably go along with a significant cut to maintain cohesion in the group.'' ``The cartel is in a tight corner,'' said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut. ``They don't want to contribute to a further global economic slowdown. The Saudis for sure know that it's not in their interest to see this occur, so they may limit what they do immediately.'' Iran, OPEC's second-largest producer, said it favors a cut of between 2 million and 2.5 million barrels a day.

- Home sales in the San Francisco Bay Area rose 45 percent last month, the biggest increase in more than six years, as buyers took advantage of discounted prices on foreclosed homes, MDA DataQuick said. A total of 7,271 single-family houses and condominium units were sold in the nine-county Bay Area last month, up from 5,014 a year earlier. It was the biggest year-over-year rise since April 2002, when sales increased 49 percent, San Diego-based real estate research company MDA DataQuick said today in a statement.

- The cost of borrowing in euros for three months fell to the lowest level since before Lehman Brothers Holdings Inc. collapsed as governments stepped up efforts to boost bank balance sheets and policy makers offered cash to revive lending. The London interbank offered rate, or Libor, that banks charge each other for such loans dropped 3 basis points to 4.96 percent today, the British Bankers' Association said. That's the lowest level since Sept. 12, the Friday before Lehman failed. The overnight dollar rate slid 23 basis points to 1.28 percent, below the Federal Reserve's target for the first time since Oct. 3.

Wall Street Journal:

- The US government effectively guarantees Fannie Mae(FNM) and Freddie Mac’s(FRE) debt, which should make it more attractive to those who want to buy it, citing remarks by Federal Housing Finance Agency director James Lockhart. Lockhart, who is the regulator for the two biggest mortgage finance companies, told the Journal the government would be “behind them short, medium and long term.”

- Children's products maker Delta Enterprise Corp. will announce a recall Tuesday of 1.59 million cribs linked to two infant deaths, the company said, continuing a string of recent recalls of cribs and bassinets involving other manufacturers. A spokesman for the New York-based company said the recall stems from two different types of problematic hardware used on cribs sold from 1995 through 2005. The hardware, which includes safety pegs for one set of cribs and spring pegs for another, can create a hazard if not properly installed. The drop side of the cribs can fall and disengage, creating a gap that can entrap and suffocate infants.

- A new bond insurer backed by Macquarie Group and Citadel Investment Group received regulatory approval to write guarantees on U.S. municipal bonds, where issuance has dropped and yields have risen amid the past year's credit-market turmoil.

- A review of nearly a dozen investor letters sent by hedge funds around the beginning of October finds a tone that could, at best, be described as somber — and, at worst, dire. Oaktree Capital Management L.P.’s Howard Marks called the last couple of weeks “the greatest panic I’ve ever seen,” while Tontine Associates LLC’s Jeffrey Gendell said he was “embarrassed by this performance.” “Since our specialty is not macro forecasting, let alone guessing how some erratic actors in Washington will behave, we are not in a position to know when these headwinds will reverse,” sniffed David Einhorn’s Greenlight Capital L.P., which posted a negative return of more than 16% on each of its three funds in the third quarter, net of fees and expenses. Mr. Einhorn should have merely followed his own advice — in its second-quarter letter, Greenlight preached cash and little action in stocks, but at the same time traded heavily all quarter long. Others took a quick swipe at the past, generally explaining where positions were lost, with a bias towards blaming the bursting of the commodities bubble - a sector many had touted earlier this year - as their biggest detriment.

WCBSTV.com:
- New York's transit agency is testing digital advertising screens on the sides of buses. The screens can target ads for specific neighborhoods. The ads, which resemble TV commercials, could even advertise coffee in the morning, and beer after work. Titan Worldwide has a 10-year, $800 million contract to sell ads throughout the city's bus and commuter-train systems. The company says GPS technology allows it to change the ads based on the buses' locations. The Metropolitan Transportation Authority is testing the system on a Manhattan route, with an eye toward 200 buses in the first quarter of next year.

Washington Post:

- The government is moving forward with its first significant effort to bring oversight to a vast, unregulated corner of Wall Street that has severely exacerbated the financial crisis. But a turf war is brewing among three leading federal agencies that have contrasting visions for how the $55 trillion market for speculative financial instruments known as credit-default swaps should be regulated.

Deutschlandfunk:

- European Central Bank Executive Board member Juergen Stark said tensions in the money market are abating and the worst of the turbulence may be over.

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Valor Economico:

- Russia, the biggest importer of Brazilian beef, halted purchases of the Brazilian product because of a lack of financing and a glut in the market.

Folha de S. Paulo:

- Brazilian units of Ford Motor(F), Fiat SpA and Volkswagen AG are cutting interest rates on vehicle loans to boost sales as demand dwindles. Vehicle sales declined 10% in the first half of October from a month earlier.

Emirates Business 24/7:
- Steel prices in Abu Dhabi fell 20% in September as compared with August, citing a study by the Department of Planning and Economy. Cement prices declined by less than 1% and the cost of other building materials fell.

Sudan Tribune:

- Southern Sudan will base its 2009 budget on oil prices at $65 a barrel. Oil revenue makes up 97% of Southern Sudan’s budget.