Today's Headlines

Bloomberg:

• Germany' s Top Court Rejects Constitutional Challenges to Euro Rescue Funds. Germany’s top court cleared the way for Chancellor Angela Merkel’s coalition to participate in the current euro-area rescue plans, while saying it must seek some additional parliamentary approval for payouts under the funds. The Federal Constitutional Court in Karlsruhe threw out three suits targeting Germany’s share of the 110 billion-euros ($155 billion) in loans for Greece from euro-region governments and the International Monetary Fund as well as a separate 750 billion-euro rescue fund approved last year in an effort to prevent Greece’s debt crisis from spreading. The ruling will aid Merkel’s efforts to gain support for participation in a new round of European Financial Stability Facility programs. The court said its ruling today shouldn’t be seen as “blanket” authorization of future rescue packages and the government must seek approval from the parliament’s budget committee for the individual guarantees it assumes in each bailout under the current EFSF. “Parliamentary decisions about taxing and spending are a central element of democratic self-government under the constitution,” Andreas Vosskuhle, president of the court, said in the ruling. “As representatives of the people, the elected members of parliament thus also need to remain in control over elementary budgetary decisions.”
• EU Said to Delay Ban Bondholder Writedown Plan. The European Union is delaying proposals for senior bondholders of failing banks to take losses because the measures may spook investors at a time of market turbulence and they need more work, according to two people familiar with the situation. Michel Barnier, the EU’s financial services commissioner, will unveil draft legislation on the measures in October at the earliest, said one of the people, who declined to be identified because negotiations on the proposals are continuing.
• Saks(SKS), Nordstrom(JWN) Say Luxury Sales Firm. So far so good in the luxury sector, say top executives of Saks Inc. (SKS) and Nordstrom Inc. (JWN), as stock markets lurch up and down amid global economic uncertainty. Saks Chief Executive Officer Stephen Sadove and Nordstrom Chief Financial Officer Michael Koppel say sales at their luxury chains are holding up and that they are sticking to their forecasts.
• The cost of insuring Greek government debt rose 117 basis points to a record 2,771 basis points, according to CMA prices.
• Gold Drops for Second Day as Equity Rebound Trims Haven Investment Demand. Gold dropped the most in two weeks as a rebound in global equities eroded demand for an alternative asset and spurred investors to sell the metal after its rally to an all-time high. Gold for December delivery declined $67.80, or 3.6 percent, to $1,805.80 an ounce at 11:07 a.m. on the Comex in New York, heading for the biggest drop since Aug. 24.
• Crude Gains on Forecast Stockpile Drop as Cyclone Builds in Gulf of Mexico. Crude oil climbed the most in four weeks in New York as a weather system threatened to reduce U.S. production from the Gulf of Mexico, where shut-ins from last week’s storm probably curbed stockpiles. Crude oil for October delivery rose $3.46, or 4 percent, to $89.48 a barrel at 12:42 p.m. on the New York Mercantile Exchange.
• Tropical Storm Maria Joins Katia in Atlantic. Tropical Storm Maria formed in the Atlantic, the 13th named system of the 2011 season, as Hurricane Katia weakened further on its path around Bermuda.
• IMF to Cut Irish Economic Growth. The International Monetary Fund will cut its Irish economic growth estimate for this year and next as the outlook for its main trading partners, the euro region, U.S. and U.K. “worsened substantially.” The Washington-based fund will lower its 2011 gross domestic product forecast for the country to 0.4 percent and 2012 projection to 1.5 percent as part of its world economic outlook this month, it said in a report today. The IMF had been forecasting growth of 0.6 percent and 1.9 percent, respectively.
• U.S. Job Openings Rose in July as Slower Hiring Signals Lack of Confidence. Job openings in the U.S. rose in July for a third month, while a slowdown in hiring showed businesses lacked the confidence to take on new staff. The number of positions waiting to be filled climbed by 59,000 to 3.23 million, according to Labor Department figures issued today in Washington. Hiring decreased by 74,000 to 3.98 million.
• Hedge Funds' Bets on S&P 500 Futures Are Most Bearish Since September 2007. Bearish bets by investors using Standard & Poor’s 500 Index futures increased to the highest level in almost four years amid concern global economic growth is stalling. Hedge funds and other large speculators were net short 107,913 contracts in the week ended Aug. 30, wagering that the S&P 500 will decrease in value, according to data compiled by Bloomberg and the U.S. Commodity Futures Trading Commission. The position is the highest since September 2007, when bearish bets reached a record 127,474 contracts a month before the benchmark equity gauge peaked at an all-time high, Bloomberg data going back to 1997 show.

Wall Street Journal:

• BP(BP) Feels Shareholder Heat After String of Setbacks. BP PLC shareholders are demanding the oil company come up with a new growth strategy after a miserable week in which rival Exxon Mobil Corp. replaced it in a landmark Russian Arctic deal and its Moscow office was raided by court officials. The latest setbacks come against a background of mounting investor frustration at the slow pace of BP's recovery from last year's Gulf of Mexico disaster.
• BNY Mellon: Funded Status of US Pensions Fell in August. The average funded status of the typical U.S. corporate pension plan declined in August, hitting the lowest level in nearly a year, BNY Mellon Asset Management said Wednesday.
• Eleven Killed, 66 Injured in Delhi Terror Attack. A bomb exploded outside New Delhi's High Court, killing 11 people and injuring more than 60 in an act of suspected terrorism in the heart of India's capital that further heightened concerns about the nation's security vulnerabilities. The high-intensity blast occurred Wednesday at 10:14 a.m. near the courthouse reception area. Officials said they believed the bomb was placed in a briefcase.
• Suicide Blast Kills 23 People in Pakistan. A pair of suicide bombers attacked a top army officer in Pakistan's southwestern city of Quetta on Wednesday, missing him but killing his wife. At least 22 others died, including several guards, a senior officer and two children, officials said. Police said they were investigating whether the strike was in revenge for the recent arrests in Quetta of three top al-Qaida suspects, an operation that was assisted by the CIA.
  

CNBC.com:

• Major US Banks Forced Into New Round of Stress Tests.
• US Economy is Basically 'Still In Recession': Chicago Fed's Evans.
• Suggish US Recovery Weakens in Some Areas: Fed. The sluggish recovery failed to gain any speed in recent weeks and softened in some areas of the nation, the Federal Reserve said on Wednesday. "Economic activity continued to expand at a modest pace, though some Districts noted mixed or weakening activity,'' the Fed said in its Beige Book collection of anecdotal reports of economic conditions in the 12 Fed districts.
• Teen Joblessness Was Worst Ever in US This Summer.
• Regulation Will Force BofA(BAC) to Fire 30,000 People: Bove. (video)
  

Business Insider

• Chinese Shipping Giant COSCO Is Freaking Out The Dry Bulk Industry Again.
• A Closer Look at Obama's Connection With The Solyndra Boondoggle.
• Greece: Now Here's What's Next. The good news it that a German high court ruled that bailouts are legal. But other than that, things are looking bad. Here's the latest on the collateral situation and EU gossip:

Zero Hedge:

• UN Security Council Finds Iran is Violating The Nuclear Weapons Program Ban.
• The PIIGS Fleecing of Europe Continues Even as Italy Promises to Implement Another "Austerity" Package Imminently.
• Explaining The German Constitutional Court Ruling.
  

Washington Post:

• SEC Still Destroying Records Illegally, Whistleblower Says. A year after it was warned that it might be violating federal law, the Securities and Exchange Commission is still breaking the law by destroying records of closed enforcement cases, a lawyer in the agency’s enforcement division has alleged. In addition, the purging of files has involved a wider range of investigative documents than previously reported, according to a signed statement by the enforcement lawyer.
  

Forbes:

• Obama's Phony War on Hedge Funds - Attack on Real Estate.

CNN Money:

• Big Hedge Funds Getting Slaughtered. Lyxor Asset Management, an arm of French bank Societe General, feeds $11.7 billion from investors into 100 hedge funds through its managed accounts platform, according to Stefan Keller, head of research and external relations at Lyxor. According to documents obtained by CNNMoney, 15 of these funds generated double digit percentage losses as of September 2. Five funds were down more than 20%.

Reuters:

• Greece Must Make Up Slippage to Get More Aid - Sources. Greece will have to compensate for slippage on its budget deficit target this year in the 2012 budget and in other areas of reform agreed with international lenders to get the next aid tranche, euro zone sources said. German Finance Minister Wolfgang Schaeuble said on Tuesday Greece would not receive the next, 8 billion euro (7 billion pound) tranche of aid due in September if inspectors from the IMF, ECB and European Commission did not give Athens a positive review on reforms set out in the emergency loan programme.
• Italy Senate Approves Austerity Package.
• Italy Police Use Tear Gas on Austerity Protesters.
• Copper Ends Sharply Higher as Supply Threats Mount.
• Oil-Funded Study: More Drilling Would Add 1 Million Jobs.
• Walter Energy(WLT) Shares Up On Report of Possible Bid. Shares of Walter Energy Inc (WLT.N) jumped 28 percent Wednesday morning after a report that Anglo American was weighing a bid for the metallurgical coal miner.

Bild:

• Horst Seehofer, Bavaria's prime minister and Christian Social Union chairman, said Greece's exit from the euro is "possible," though he would prefer it to remain in the single currency by boosting efforts to cut debt, citing an interview. Seehofer, whose CSU is one of three parties in Chancellor Angela Merkel's coalition, said he has "considerable doubt" that Greece and Italy have earnest intentions to cut spending.

Hannoversche Allgemeine Zeitung:

• Germany's Free Democrats, the junior partner in Chancellor Angela Merkel's government, reject joint bond sales by euro members, Economy Minister Philipp Roesler, the party's chairman, said.

Expansion:

• Spain's biggest business lobby group called on the government to raise taxes on the rich to help the country rein in its budget deficit.