Today's Headlines

Bloomberg:

• European Stocks Climb Most in 16 Months Amid Effort to Contain Debt Crisis. European stocks climbed the most in 16 months amid speculation policy makers will increase efforts to contain the region’s sovereign-debt crisis. Rio Tinto Group led a rally in raw-material shares, surging 7.8 percent, as metal prices rose. BNP Paribas (BNP) SA and Societe Generale (GLE) SA, France’s biggest banks, soared more than 14 percent. MAN SE (MAN) rose the most in two years as European Union regulators cleared Volkswagen AG (VOW)’s takeover of the truckmaker. The benchmark Stoxx Europe 600 Index climbed 4.4 percent to 229.91 at the 4:30 p.m. close in London. That’s the biggest gain since May 10, 2010, when it jumped 7.2 percent after the EU unveiled a 750 billion-euro ($1 trillion) loan package aimed at controlling the debt crisis. The gauge has surged 7 percent over the past three trading days after falling to a two-year low on Sept. 22. “The markets are hoping that the international leaders and politicians will act together and do what is needed to avoid a disaster,” said Lars Knudsen, who manages about $110 million at LGT Capital Management AG in Pfaeffikon, Switzerland. “Politicians are starting to feel pressure to act on the crisis. It is important that the European leaders act now.” The Stoxx 600 fell 26 percent from this year’s peak in February through Sept. 22 as European and U.S. economic reports trailed forecasts, adding to concern that the global recovery is at risk.
• Papandreou Has Votes to Approve New Property Tax. Greek Prime Minister George Papandreou garnered the support of 151 lawmakers in a vote to approve a new property tax, according to a tally of votes in the parliament in Athens today. The result, if confirmed, will bolster his chances of meeting 2011 budget targets and securing further international financial aid for the country. The vote is being televised live on state-run Vouli TV and is continuing.
• Italy, Spain Sell $24 Billion of Debt at Higher Yields; Bonds Gain on Sale. Italy and Spain sold 17.7 billion euros ($23.9 billion) of debt and their bonds rose after the sale even as both countries had to pay more to borrow than a month ago. Italy sold 8 billion euros of 182-day bills to yield 3.071 percent, up from 2.14 percent at the last auction of similar- maturity debt on Aug. 26. The Rome-based Treasury also sold 76- day bills at 1.808 percent and zero-coupon bonds due in 2013 at 4.511 percent. Spain’s interest costs also rose as it sold 3.22 billion euros of three- and six-month bills, just below the maximum target for the auction. Spain’s auction was “a very good result” and “in the near term, assuming Greece receives its disbursement, we are in for at least a short period of relatively less volatile markets,” said Matteo Regesta, senior interest-rate strategist in London at BNP Paribas SA, referring to Greece’s next bailout payment. “The yield was a little bit up, but nevertheless the take-up was significant and the yield pick-up not massive.”
• Financial Debt Swaps Fall in Europe on Crisis Containment Bets. The cost of insuring against default on European financial debt fell for a third day amid speculation policy makers will step up efforts to contain the region’s deficit crisis. The Markit iTraxx Financial Index of credit-default swaps on senior debt of 25 banks and insurers declined 16.5 basis points to 259.5 and the subordinated gauge was 26 lower at 498, according to JPMorgan Chase & Co. at 3 p.m. in London. “How many ‘hope’ rallies have ended up in eventual disappointment in Europe over the last 18 months?” Jim Reid, head of fundamental strategy at Deutsche Bank AG in London, wrote in a note to investors. “The answer is they all have in the end. Is this time any different?” Credit-default swaps on BNP Paribas SA dropped 40 basis points to 232 and are down from a record 309 on Sept. 22, according to CMA. Contracts on Deutsche Bank AG declined 25 to 171, Credit Suisse Group AG tumbled 22 to 170 and Credit Agricole SA fell 35 to 232, CMA prices show. The Markit iTraxx Crossover Index of credit-default swaps on 50 companies with mostly high-yield credit ratings dropped 39.5 basis points to 793. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings was down nine at 187.5 basis points. Both benchmarks are down from the highest levels in 2 1/2 years. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments dropped 17.5 basis points to 334.5, after reaching a record 358 on Sept. 23. A basis point on a credit-default swap protecting $10 million of debt from default for five years is equivalent to $1,000 a year. Contracts on Belgium declined 24 basis points to 258, France dropped 24 to 173 and Germany fell seven to 103, according to CMA. Ireland decreased 49 basis points to 751 and Italy fell 50 to 453, while Portugal was 61 lower at 1,121 and Spain was down 32 at 368.
• Brazil Prepares for a Greek Default This Week, Valor Says. Brazil’s government is preparing the country for a Greek default as early as this week, Valor Economico reported, citing an unidentified government official. President Dilma Rousseff and Finance Minister Guido Mantega got back from the U.S. this weekend more pessimistic about the global crisis after meeting with foreign officials and business leaders, the Sao Paulo-based newspaper said. The government may adopt new economic measures to shield the country if the crisis worsens, according to the newspaper.
• Commodities Rise Most in Four Months After European Debt Concerns Subside. Commodities rose the most in four months, led by metals, on signs that European policy makers will intensify efforts to contain the region’s debt crisis. The Standard & Poor’s GSCI index of 24 raw materials rose 2.9 percent to 617.86 at 12:50 p.m. New York time, heading for the biggest gain since May 9. Last week, the gauge plunged 8.2 percent, the most since May.
• Health-Benefit Costs Rise Most in Six Years. The cost for businesses to buy health coverage for workers rose the most this year since 2005 and may reach $32,175 for a family in 2021, according to a survey of private and public employers. The average cost of a family policy climbed 9 percent in 2011 to $15,073, according to a poll of 2,088 private companies and state and local government agencies by the Henry J. Kaiser Family Foundation in Menlo Park, California, and the Chicago- based American Hospital Association’s Health Research and Educational Trust.
• Apple(AAPL) to Introduce New iPhone at Oct. 4 Event. Apple Inc. (AAPL) will introduce a new iPhone at an Oct. 4 event in Cupertino, California, the company said in an e-mailed statement today. “Let’s talk iPhone,” Apple said in the statement. The new iPhone will include a better camera and faster processor, people familiar with the matter said earlier this year. Introduced in 2007, the iPhone is Apple’s top-selling product, accounting for about half its revenue in the third quarter. The touch-screen gadget has helped push Apple to be the world’s most valuable company, bigger than Exxon Mobil Corp. Apple’s shares rose $2.94 to $406.11 at 11:35 a.m. New York time on the Nasdaq Stock Market. The stock had climbed 25 percent this year before today.

Wall Street Journal:

• China May Suspend Some Military Exchanges With U.S. China has indicated it will suspend or cancel some military exchanges in response to the latest U.S. arms sales to Taiwan but has stopped short of a full suspension of bilateral defense ties, according to a senior State Department official. Yang Jiechi, China's foreign minister, asked the U.S. to reconsider the $5.3 billion package—consisting mainly of upgrades for Taiwan's existing fighter jets—in a meeting with Secretary of State Hillary Clinton in New York on Monday, the official told reporters in a briefing there.
• Solyndra Faced Headwinds Before Loan Guarantee - Report. Before Solyndra Inc. received a federal loan guarantee, there were warning signs that the solar panel maker's competitive edge was eroding, a new nonpartisan congressional report said. The Congressional Research Service, in a Sept. 9 report obtained by Dow Jones Newswires, said Solyndra had a niche technology and even before the loan guarantee was issued, one of the company's key advantages--high polysilicon prices--had disappeared.
• European Banks to Trade EUR15B of Real-Estate Loans 2012. European banks could trade up to EUR15 billion of non-performing real-estate loans in 2012, property consultants Situs Cos. said Tuesday, as institutions come under increasing pressure to deleverage their balance sheets and stimulate the wider economy.

MarketWatch:

• U.S. Home Prices Up for Fourth Month: Case-Shiller. The S&P/Case-Shiller 20-city home price index rose 0.9% compared to June, to narrow the year-on-year decline to 4.1%.

CNBC.com:

• Why Poland is Falling Out of Love With the Euro.

Business Insider

• Check Out The Latest Recipients Of 'Free Money' From The Federal Financing Bank. The Federal Financing Bank (FFB) has released it's August report. This is the bank that has provided the $500mm to Solyndra.
• If You're Outraged By Greece Now, Wait Till You Read Michael Lewis' New Book.
• UPRISING! Microsofties(MSFT) Trash Ballmer After Disastrous All-Hands Meeting.
• Here's How Medicare Wastes Almost $50 Billion A Year.
• Ford(F) Pulls Anti-Bailout Ad Over Objections From White House.
  

Zero Hedge:

• Venizelos Refuses to Release Bond Swap Data, Confirming Key Precondition to Second Greek Bailout Has Failed.
• Leverage: Yesterday's Problems, Today's Solution. Why is EFSF just not being expanded? Wouldn’t it be easier to just increase the size of the EFSF? It would be, but there is no support to get that done. So the group of bankers and politicians who do not have the courage to attempt to draw a line in the sand and attempt to fix the existing problem have embarked on a new crusade. The crusade is to come up a €2 trillion plan that will for once and all make Europe safe again. They have their goal and after being told, in no uncertain terms, that they wouldn’t get that much money, they put their thinking caps on. They started to figure out creative ways to turn the €440 billion they think they can get their hands on, and turn it into €2 trillion. There are several ways to accomplish this “miracle of finance”. There are a couple of ways that the EFSF could be used to create leverage. The potential to provide “equity” capital to the EIB would be another way. We will start with the EFSF.
• Fed's Fisher Comes Clean on Moral Hazard and 'Twist' Infeffectiveness.
• It Is Virtually Impossible To Land A Job as "Jobs Hard to Get" Responses Hit 28-Year High. (graph)
  

ABC News:

• Nightmare in Libya: 20,000 Surface-to-Air Missiles Missing. (video) U.S. officials had once thought there was little chance that terrorists could get their hands on many of the portable surface-to-air missiles that can bring down a commercial jet liner. But now that calculation is out the window, with officials at a recent secret White House meeting reporting that thousands of them have gone missing in Libya. "Matching up a terrorist with a shoulder-fired missile, that's our worst nightmare," said Sen. Barbara Boxer, D.-California, a member of the Senate's Commerce, Energy and Transportation Committee. The nightmare has been made real with the discovery in Libya that an estimated 20,000 portable, heat-seeking missiles have gone missing from unguarded Army weapons warehouses.

The Hill:

• LightSquared Doubles Size of Its Lobbying Team in 2011. LightSquared, the wireless telecom firm facing Republican complaints that it has benefited from political ties to the White House, has significantly boosted its lobbying this year. The company has more than doubled the number of lobbying firms on its payroll, from four to nine K Street shops, in the first half of 2011.

Politico:

• Army, Marines Could Cut 150,000 Troops. Proposed Defense Cuts Highest Since WWII. If the supercommittee fails to agree on a plan to reduce the deficit by $1.2 trillion over 10 years, an automatic $600 billion reduction in Pentagon spending will be cut on top of $350 billion already mandated.
  

Reuters:

• Big Four Auditors Face Massive Shake-Up. The "Big Four" global auditors could be broken up, leaving them susceptible to takeovers if radical European Union plans to boost competition go ahead, a UK auditing official said on Tuesday.
• U.S. on "Knife Edge" of Contraction: Fed Economist. The U.S. economy is on a 'knife edge' between growth and contraction and monetary policy tweaks do not seem to be helping, the Dallas Federal Reserve's top economist said on Tuesday. The U.S. jobs engine has lost momentum and could be set for further "backtracking," Dallas Fed chief economist Harvey Rosenblum told a forum sponsored by the greater San Antonio Chamber of Commerce. Meanwhile, he said, there is also a "credible" risk of rising inflation. "We are in the midst of the Second Great Contraction," Rosenblum said, demonstrating the economy's predicament with a picture of a place on the Appalachian Trail known as "Knife's Edge." "Economic growth has slowed; it may have stalled," he said. "The patient isn't responding well to the medicine."
• Bank Demand for ECB Cash Stays High. Euro zone bank demand for European Central Bank loans remained high on Tuesday and was expected to stay strong at upcoming emergency tenders as banks build up cash buffers, fearing there will be no quick solution to the debt crisis.
• Investor Confidence Up Slightly in Sept. - State Street. The U.S. financial services firm said its global investor confidence index rose to 89.9 this month from 88.1 in August.

Financial Times:

• NY Fed Casts Doubt on Impact of Swaps Rules.

Die Welt:

• German Chancellor Angela Merkel's junior coalition partner, the Free Democratic Party, is threatening to vote against an overhaul of the European Financial Stability Facility if discussions about leveraging the fund don't stop. The FDP opposes any form of leverage for the region's rescue fund because it would increase the burden on German taxpayers and circumvent parliament, Hermann Otto Solms, the party's deputy floor leader and finance spokesman, said.

Sueddeutsche Zeitung:

• European Union Trade Commissioner Karel De Gucht said China's currency policy has a destabilizing effect on world trade.

Borsen:

• Danish toy brick maker Lego A/S is preparing for a period of global economic decline. CEO Joergen Vig Knudstorp's recent management changes are designed to help the company cope with adverse market conditions.

Xinhua:

• China's monetary policy faces dilemma because the nation has to deal with high prices and a potential slowdown in economic growth, Xinhua News said in a commentary posted on the central government's website.