Today's Headlines

Bloomberg:

• ECB to Consider New Crisis Tactics. European Central Bank policy makers are likely to next week debate restarting their covered-bond purchases along with further measures to ease monetary conditions, a euro-region central bank official said. The reintroduction of 12-month loans to banks will also be discussed at the ECB’s Oct. 6 policy meeting, said the person, who spoke on condition of anonymity because the information is confidential. Interest-rate cuts are likely to be discussed, though they are not on the current agenda, the official said. The euro rose half a cent against the dollar to as high as $1.3543. Yield spreads between covered bonds and interest-rate swaps tightened.
• European Central Bank Governing Council member Ewald Nowotny said it's "dangerous" if Germany feels ignored because it's outvoted in the ECB, and those feelings need to be respected. "It's very dangerous if in Germany the feeling emerges that the country is passed over," Nowotny said. "To be precise, that such an important country is being outvoted at the ECB," he said. There is now a "protectionist tendency" in the euro area's biggest economy, and its sensitivities need to be considered, he added.
• Rehn Says European Banks Should Be Recapitalized, Welt Reports. A recapitalization of European banks should be part of the region’s effort to contain the sovereign-debt crisis, European Union Monetary Affairs Commissioner Olli Rehn told Germany’s Welt newspaper. “We have to supplement the repair work in the financial sector with a stronger recapitalization of banks to reduce the risk of a credit squeeze and prevent a further slowdown of economic growth, which is now materializing in Europe and the U.S.,” Rehn was quoted as saying. “The current crisis is a serious combination of a sovereign-debt crisis and weakness in the banking sector. We can’t solve one without the other.”
• Dimon Attacks Bank of Canada Chief Over Basel Rules. (video) Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co., criticized Bank of Canada Governor Mark Carney on the subject of the new Basel III capital rules, saying many of them discriminated against U.S. banks and he would continue to describe them as "anti-American," the Financial Times reported. Dimon's attack on Carney, who is an advocate of the rules, was delivered in a closed-door meeting last week in the presence of more than two dozen bankers and finance officials, the newspaper said.
• Gold Plummets More Than $100, Silver Slumps on Euro Debt Crisis. Gold tumbled more than $100 and was set for its worst two-day slump since 1983 as equities and other commodities fell on speculation European governments will struggle to contain the region's debt crisis, threatening global growth. Silver headed for its worst two-day drop in 31 years. Cash gold fell as much as $124.08, or 7.5 percent, to $1,532.72 an ounce, the lowest price since July 8. The metal traded at $1,558.55 at 3:12 p.m. in Singapore, down 13.3 percent since Sept. 20. Spot silver lost as much as 16.3 percent to $26.07 an ounce, the lowest since November, and traded at $28.30. "It all depends on the stability of the financial situation in Europe and how that gets managed, but it's difficult times at the moment for gold," Alexandra Knight, an economist at National Australia Bank, said by phone from Melbourne. "It's possible people are selling gold to cover losses in other markets. We could see it come back as it's still a favored asset."
• New Home Sales Fall to Six Month Low. Purchases of new houses in the U.S. declined in August to a six-month low as the biggest drop in prices in two years failed to lure buyers away from even less expensive distressed properties. Sales, tabulated when contracts are signed, dropped 2.3 percent to a 295,000 annual pace, figures from the Commerce Department showed today in Washington. The median estimate of 73 economists in a Bloomberg News survey called for a decline to 293,000. The median price slumped 7.7 percent from August 2010, the steepest 12-month drop since July 2009.
• CICC's Hong Recommends Selling China Stocks on Any Rebound. Investors should sell Chinese stocks on rebounds because valuations are not “compelling” in terms of book value, China International Capital Corp. said. Price-to-book ratios are still about 35 percent higher than the lows reached during the 2008 global financial crisis, Hao Hong, a global equity strategist at CICC, wrote in a report today. The report was referring to the MSCI China Index, Hong said by phone. Investors should wait until economic fundamentals start to improve, the report said. “Consensus believes that Chinese markets now offer compelling valuations after the recent plunge,” Hong wrote. “We beg to differ.”
• Thai Stocks Drop Most in Almost Three Years on Economic Concern. Thailand's benchmark stock index slumped the most in almost three years after the central bank said it may trim its economic growth projections as the global recovery falters. The SET Index fell the most among Asian benchmark gauges today, declining 6 percent to 900.75 as of 3:30 p.m. local time, poised for the biggest drop since Oct. 27, 2008. PTT Pcl, whose shares account for 10 percent of the index, slumped as much as 12 percent as crude fell for a fourth day. Global investors have cut holdings in Thailand's equities and currency this month on expectation exports, which account for about 60 percent of the economy, will slow amid the European debt crisis and weakening U.S. recovery. The Bank of Thailand expects "some possibility for downward adjustments" in the growth forecast, Governor Prasarn Trairatvorakul said in an interview in Washington on Sept. 24.
• Brazil Economists See 2011 Inflation Topping Target Range. Brazil’s central bank will miss its inflation target this year for the first time since 2003, a central bank survey of economists shows. Consumer prices will rise 6.52 percent this year, according to the median forecast in a Sept. 23 central bank survey of about 100 analysts published today, as record low unemployment and a weaker currency fuel consumer price increases. The forecast was up from 6.46 percent the previous week. The central bank targets inflation of 4.5 percent, plus or minus two percentage points, and year-end inflation has remained within the target range for the past seven years.
• Trader Pay Would Face Restrictions Under Draft Volcker Rule. U.S. banks would have to change the way they compensate traders involved in market-making activities under one of the proposed restrictions of the so-called Volcker rule, according to a draft circulating among regulators.

Wall Street Journal:

• Europe's Banks Face New Funding Squeeze. An extraordinary dry spell in the market for long-term European bank funding is amplifying pressure on policy makers to devise a solution to the continent's banking crisis. For the past three months, European banks have been largely unable to sell debt at affordable prices to investors, who are wary of the banks' vulnerability to risky euro-zone government bonds and other loans. At $34 billion, the amount of senior unsecured debt issued by the continent's financial institutions this quarter is on track to be the smallest of any quarter in more than a decade, according to data provider Dealogic.
• Technicals Suggest Stocks Oversold.
• Eurozone SPV: What Could Possibly Go Wrong? Here Are a Few Possibilities.
  

Barron's:

• Bad Week? Not Here. Despite central banks' best efforts, foreign-exchange specialist John Taylor of FX Concepts thinks the euro is headed sharply lower and the dollar will gain.

MarketWatch:

• Apple(AAPL) Shares Stung by Reported iPad Cuts. But analysts say demand for popular tablet remains strong.

CNBC.com:

• Euro Area Facing 'Outright Recession': Economist. The euro zone will be in a recession before the end of the year, an economist from the Royal Bank of Scotland (RBS) told CNBC Monday. "The euro zone will enter a recession by the fourth quarter of this year with contractions in growth for this quarter and the first quarter of next year, which in the current environment could be very damaging," said Silvio Peruzzo, European economist at RBS. Peruzzo said with a sizeable contraction in the industrial sector, and chances of a disorderly Greek default remaining elevated, a recovery when it comes will be extremely modest.
• Senate to Vote on Bill to Avert Government Shutdown.
  

Business Insider

• Top Republican Strategist Rejects Calls for More US Funding for Eurozone Bank Bailouts, Lagarde Wants $4 Trillion EFSF.
• Buffett's Berkshire(BRK/A) Buyback Helps Shareholders Dodge Taxes.
• A Look Inside the New Boeing(BA) 787 Dreamliner.
• Soros: Failing to Resolve the Euro Debt Crisis Will Trigger a Breakdown of the Global Financial System.
  

Zero Hedge:

• After Dropping Under $100,000/Share, Berkshire(BRK/A) Announces Stock Buyback Plan.

The Memphis Daily News:

• NYC Investor Paul Tudor Jones Recalls Memphis Roots.

Reuters:

• ETF Industry Braces Itself for Transparency Push.
• German FinMin Stresses No Aim to Top-Up EFSF Funding. Finance Minister Wolfgang Schaeuble on Monday moved to dispel doubts in Germany's parliament that the euro zone's current bailout mechanism could be boosted with substantial funding. The Free Democrats, (FDP) junior coalition partners in the government, had earlier said they were concerned over rumors the European Financial Stability Facility (EFSF) could be topped up just before parliament is expected to it new powers in a vote on Thursday. "No, that is clear... We do not intend to increase it," Schaeuble told broadcaster N-TV when asked if the government planned on boosting the size of the 440 billion-euro EFSF.

Telegraph:

• Debt Crisis: Live.
• S&P Under Threat of Lawsuit Over CDOs.
  

Diario Economico:

• The Portuguese government will cut its forecast for GDP in 2012. The government is working with a forecast that indicates a contraction of more than 2% and as much as about 2.5%. The government on Aug. 31 had announced a forecast for GDP to shrink 1.8% in 2012.