Today's Headlines

Bloomberg:

• ECB Said to Await German ESM Ruling Before Settling Plan. European Central Bank President Mario Draghi may wait until Germany’s Constitutional Court rules on the legality of Europe’s permanent bailout fund before unveiling full details of his plan to buy government bonds, two central bank officials said. With the court set to rule on Sept. 12, investors looking for Draghi to announce a definitive purchase program at his Sept. 6 press conference might be disappointed, according to the officials, who spoke on condition of anonymity because the deliberations are not public. The program is still being worked on and staff may not be able to finalize it by then, said the officials, who are familiar with thinking on the ECB Governing Council. An ECB spokesman in Frankfurt declined to comment.
• German Insurers Buy Junk Corporate Loans to Overcome Low Rates. German insurers, which came through the subprime mortgage crisis largely unscathed, are seeking to boost investment returns by buying junk loans to corporate borrowers.
• China’s Stocks Fall to Lowest Since March 2009 on Profit Concern. China’s stocks fell, dragging down the benchmark index to the lowest level since March 2009, after companies from Maanshan Iron & Steel (323) Co. to Shanxi Coal International Energy Group Co. reported weaker earnings. Maanshan Iron dropped to a 16-year low, while Shanxi Coal sank 6 percent as Shenyin & Wanguo Securities cut the company’s earnings estimates. Gemdale Corp. tumbled to a seven-month low after the official Xinhua News Agency reported the government is studying further measures to control the property market. The Shanghai Composite declined 1 percent to 2,092.10 at the close, the lowest since March 3, 2009. The CSI 300 Index (SHSZ300) lost 1.2 percent to 2,275.68. The Hang Seng China Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong fell 1.8 percent.
• Oil Heads for Fourth Weekly Gain as Isaac Approaches Gulf. Oil headed for a fourth weekly gain as Tropical Storm Isaac strengthened in the Caribbean Sea on a path that may threaten crude production in the Gulf of Mexico. Prices rose as much as 0.9 percent on forecasts that Isaac will enter the Gulf next week after crossing Haiti late today and reaching the southwest coast of Florida on Aug. 27. BP Plc (BP/), Eni SpA (ENI) and Apache Corp. (APA) began evacuating nonessential workers from the Gulf. Crude for October delivery slipped 7 cents to $96.20 a barrel at 1:30 p.m. on the New York Mercantile Exchange. Brent oil for October settlement slid $1.31, or 1.1 percent, to $113.70 a barrel on the London-based ICE Futures Europe exchange.
• Mahindra Cuts Tractor Sales Forecast as Sowing Area Drops. Mahindra & Mahindra Ltd. (MM), the world’s biggest tractor maker by volume, cut its forecast for sales growth of the farm equipment in India as the worst rainfall in three years delays crop sowing. Mahindra estimates industry sales to expand as little as 2 percent in the year ending March 31, Pawan Goenka, president of the automotive and farm equipment division at the Mumbai-based company, said in an e-mail response yesterday. Goenka had earlier estimated sales to rise as much as 10 percent. Tractor revenue rose 22 percent at Mahindra last fiscal year.
• Credit Risk Rises as Insurers Become ‘Aggressive’11. U.S. property-casualty insurers are accumulating lower-rated bonds as near record-low interest rates limit investment income from higher-rated securities, JPMorgan Chase & Co. said. The portion of corporate bonds in the insurers’ portfolios that are rated A or higher fell to 54 percent as of Dec. 31 from 60 percent at the end of 2005, JPMorgan analysts led by Eric Beinstein said in a report today.

Wall Street Journal:

• Underlying Weakness in Durable-Goods Report.
• Bernanke Letter Defends Fed Actions.
• Norway Killer of 77 People Deemed Sane, Given 21 Years. The sentence means that Mr. Breivik, 33 years old, is regarded to have been in a sane state of mind at the time he committed the brutal actions. Mr. Breivik, dressed in a dark suit and charcoal-colored necktie, smirked as the verdict was read against him in a packed courtroom. He was surrounded by a crowd of his victims and family members of those killed on July 22, 2011.

MarketWatch:

• Amazon(AMZN) hits all-time high, Autodesk plunges.

CNBC.com:

• Europe's 'Big Bang' for Banks May Sputter Amid Delays. A hoped-for "big bang" start next year for new rules to make banks safer is set to sputter in Europe, creating more uncertainty in a sector struggling to win back investor confidence lost in the financial crisis.
• ECB Mulls Setting a Bond Yield Target: Sources. The European Central Bank is considering setting yield band targets under a new bond-buying program to allow it to keep its strategy shielded and avoid speculators trying to cash in, central bank sources told Reuters on Friday.
• Half of Homeowners Under 40 Are Still Underwater.

Business Insider:

• A Brand New Bridge Just Collapsed In China.
• The One Poll Question That Should Make Barack Obama Cringe. The most stunning number in the poll comes from this question: Has the country changed for the better in the last four years, changed for the worse, or has the country not changed much either way in the last four years? Forty-six percent answered that question by saying it's changed for the worse. Only 29 percent said it was for the better.
• Drought Or Not, One In Five Americans Can't Afford To Put Food On The Table.
• Canada Is Walking Right Into A Subprime Mortgage Crisis.
• REPORT: Germany May Ask Greece To Exit The Euro 'Temporarily'.
• BofA: The US Economy Is 'In The Eye Of The Storm'.
• Japan Faces Its Own Terrible Fiscal Cliff.
• REPORT: EMPIRE STATE SHOOTING VICTIM HAD ORDER OF PROTECTION AGAINST ALLEGED GUNMAN.
• T. Boone Pickens: Wind And Solar Will Never Take Over For Coal.

Zero Hedge:

• Obama Requests Europe Bail Out His Reelection. Color us unsurprised; but the UK's Independent is reporting that American officials are worried that if the Troika decides Greece has not done enough to meet its deficit targets, it will withhold the money - triggering Greece's exit from the eurozone weeks before the presidential election. British government sources have suggested the Obama administration is urging eurozone Governments to hold off from taking any drastic action before then - fearing the resulting market destabilization could damage President Obama's re-election prospects.
• July Core Durable Goods Ex-Transports And Defense Implode. (graphs)
• Europe Ends Weak Week With Spanish Risk At 10-Day High.
• What Today's Real ECB News Really Means.
  

Chicago Tribune:

• 19 People Shot in Overnight Shootings Across Chicago. Nineteen people were shot across the South and West sides from Thursday evening through early Friday morning -- 13 of them wounded over a 30-minute period, authorities say. The overnight shootings peaked between 9:15 p.m. and 9:45 p.m. That's when eight people, many of them teens, were shot at 79th Street and Essex Avenue about 9:30 p.m.

Reuters:

• Syrian refugees top 200,000 as exodus grows-UN agency.
• S&P puts European synthetic CDOs on watch after July run.
• Brazil consumer confidence falls for 4th month in row in Aug. Consumer confidence in Brazil fell for the fourth consecutive month in August, as Brazilians grew increasingly dissatisfied with current economic conditions, a closely watched survey of consumer sentiment showed on Friday. Brazil's consumer confidence index fell to 120.4 in August from 121.6 in the prior month after seasonal adjustments, private research institute Fundação Getúlio Vargas said. Friday. This is the lowest figure since February. The survey's barometer of current economic conditions fell to 133.5 from 135.4 in July.
• Merkel offers Greek PM no extra time on bailout. Angela Merkel reassured Greek Prime Minister Antonis Samaras on Friday that she wanted his country to stay in the euro zone, but gave no sign of ceding to his pleas for more time to meet the tough terms of Athens' international bailout.
• Spain not in talks over European sovereign aid -Deputy PM. Spain is not in talks with the euro zone over financial assistance to lower its borrowing costs, Spain's deputy prime minister said on Friday.
• IEA may release oil reserves as soon as September: report.

The Economist:

• If China catches a cold. (table) A slowdown in China would have far-reaching effects

Telegraph:

• Debt crisis: Greek PM, Antonis Samaras, and Angela Merkel in crisis talks - live. German Chancellor says Greece is doing all possible to solve problems but must meet its commitments as Greek PM Antonis Samaras says his country just needs an opportunity to grow.

Irish Times:

• Germany's constitution says that a new constitution is needed if the government attempts to transfer large parts of the nation's sovereignty to the European Union, Schaeuble said in an interview.