Today's Headlines

Bloomberg:

• Monti Says ECB Plan Reduces Stigma as Rajoy Stalls on Aid. Italian Prime Minister Mario Monti said the European Central Bank’s bond-buying plan reduced the stigma of asking for aid, as he followed Spanish counterpart Mariano Rajoy in resisting tapping the bailout program. “The drama in the word ‘help’ has been reduced,” Monti said at a press conference yesterday in Rome. “Now, there are ways in the European Union, which must be used under careful conditionality and in the interest of all, to confront” unreasonable increases in borrowing costs, he said.
• Jobless Greeks Resolved to Work Clean Toilets in Sweden. Karachalios, who left behind his 6-year-old daughter to be raised by his parents, is one of thousands fleeing Greece’s record 24 percent unemployment and austerity measures that threaten to undermine growth. The number of Greeks seeking permission to settle in Sweden, where there are more jobs and a stable economy, almost doubled to 1,093 last year from 2010, and is on pace to increase again this year. “I’m trying to survive,” Karachalios said in an interview in Stockholm. “It’s difficult here, very difficult. I would prefer to stay in Greece. But we don’t have jobs.”
• Payrolls in U.S. Increased Less Than Forecast in August. Payrolls rose less than projected in August and the unemployment rate was unexpectedly driven down by Americans leaving the labor force, boosting the odds of additional Federal Reserve easing to spur a faltering recovery. The economy added 96,000 workers after a revised 141,000 increase in July that was smaller than initially estimated, Labor Department figures showed today in Washington. The median estimate of 92 economists surveyed by Bloomberg called for a gain of 130,000. The jobless rate fell to 8.1 percent. Treasuries and gold rose on bets the figures make it more likely Fed policy makers will expand record monetary stimulus next week after Chairman Ben S. Bernanke called unemployment a “grave concern.” The report also dealt a blow to President Barack Obama one day after he accepted the Democratic Party’s nomination for a second term. “This is definitely a setback for the labor market and the economy,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York and former economist for the Fed. “This clearly validates Bernanke’s concern. We have Europe, the fiscal cliff, and it is a generally cautious business environment.” Bloomberg survey estimates ranged from increases of 70,000 to 185,000. Revisions to prior reports subtracted a total of 41,000 jobs from payrolls in the previous two months. Factory employment fell by the most in two years, temporary-help companies eliminated positions for the first time in five months, and the share of the working-age population in the labor force slumped to the lowest since 1981. The jobless rate fell from 8.3 percent as 368,000 Americans left the labor force. Average hourly earnings were little changed, and up 1.7 percent from August 2011, today’s report showed. The 12-month change matched the smallest gain since record-keeping began in 2007. The participation rate, which indicates the share of working-age people in the labor force, fell to 63.5 percent, the lowest since September 1981, from 63.7 percent. The unemployment rate, derived from a separate Labor Department survey of households, has exceeded 8 percent since February 2009, the longest stretch in monthly records going back to 1948.
• August Jobs Report 'Warning' For Housing: Trulia's Kolko. The August jobs report shows falling employment among 25-34 yr olds, prime age group for housing demand, Trulia Chief Economist Jed Kolko said. 74.3% of 25-34 yr olds employed in Aug. vs 74.5% in July, 75.2% in April. The jobs recovery for this age group "has stalled," he said. The share of job in construction, 4.1%, is the lowest since 1946.
• Jobs Data Show U.S. Factories Bearing Brunt of Slowdown. The biggest decline in factory jobs in two years reported today by the U.S. Labor Department adds to signs that manufacturing is bearing the brunt of the slowdown in global growth. Factory payrolls declined by 15,000 workers last month, according to the figures issued today in Washington. The workweek shrank and the share of industries hiring plunged to the lowest level in almost three years. Combined with earlier data showing less demand for capital equipment and growing pessimism among purchasing managers, today’s figures show manufacturing, which helped lead the U.S. out of the worst recession in the post-World War II era, is pulling back. Companies such as Intel Corp. (INTC) are among those cutting forecasts as business investment cools and economies from Europe to Asia slow. “There is a clear loss of momentum in manufacturing,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts.
• Intel(INTC) Cuts Third-Quarter Sales Forecast Amid Weak Demand. Intel Corp. (INTC), the world’s largest semiconductor maker, slashed its third-quarter sales prediction amid declining demand for personal computers from corporate customers in a weakening economy. Sales will be $12.9 billion to $13.5 billion, down from a prior projection of $13.8 billion to $14.8 billion, the Santa Clara, California-based company said in a statement today. Analysts on average had estimated sales of $14.2 billion, according to data (INTC) compiled by Bloomberg. PC makers are reducing orders for Intel’s chips at a time of the year when they normally buy more to build products for the holiday shopping season. Intel said demand for chips used in business machines and orders in emerging markets are worse than expected, compounding concern that the PC market may not grow this year as consumers flock to smartphones and tablets. “It’s worse than everyone expected,” said Patrick Wang, a New York-based analyst for Evercore Partners Inc. (EVR) “Their consumer PC business is getting whacked.”
• Obama Delays Report to Congress on Automatic Cuts to Next Week. The Obama administration will send to Congress next week a report spelling out how billions of dollars in automatic spending cuts will be carried out beginning Jan. 2, missing a deadline set by lawmakers. White House press secretary Jay Carney today told reporters traveling with President Barack Obama to a campaign event that the report will be sent to the Capitol “late next week,” without being specific. He cited “a lot of complicating factors” in detailing the cuts.
• Oil Rises on Poor U.S. Jobs Report, Stimulus Speculation. Oil advanced for a third day as U.S. payrolls increased less than expected in August, raising speculation that the Federal Reserve will boost stimulus measures to spur economic growth. Prices gained as much as 1.1 percent on expectations that the Fed will ease monetary policy at a meeting next week after the Labor Department reported the U.S. economy added 96,000 workers last month, less than the 130,000 median estimate in a Bloomberg survey of economists. Crude for October delivery rose 69 cents, or 0.7 percent, to $96.22 a barrel at 12:09 p.m. on the New York Mercantile Exchange. Futures are down 0.3 percent this week and 2.6 percent this year. They have risen 25 percent from the year’s low of $77.28 a barrel on June 28. Brent oil for October settlement increased 51 cents, or 0.4 percent, to $114 a barrel on the London-based ICE Futures Europe exchange.
• ICRC Says Syria Conflict Worsening, More Aid Is Needed. The Syrian conflict is “rapidly deteriorating” as wounded people die because medical aid is lacking, International Committee of the Red Cross President Peter Maurer said following a three-day trip to the country. “I was shocked by the immense destruction of infrastructure and homes in several areas I visited,” Maurer said in an e-mailed statement from Geneva today. “Health workers face tremendous difficulties in performing their duties. Many men, women and children who could be saved are dying on a daily basis because they lack access to medical care.”

MarketWatch:

• Stubborn politicians threaten ECB-inspired rally. Spain’s Rajoy under pressure to apply for rescue.

CNBC.com:

• Wealthy Work to Avoid Health-Care Law's 'Mini-Cliff'. Tax planners are developing ways to help well-to-do U.S. clients avoid the full impact of taxes set to take effect next year under President Barack Obama's health-care overhaul.
• Germany Cannot Be ‘Leader of the World’: Italy’s Prodi. Germany must accept shared leadership of the European Union if the region is to prosper, ex-European Commission President Romano Prodi, told CNBC on Friday.
• Citi(C) Analyst Predicts ‘Worst 3Q Ever in PC History’.

Business Insider:

• MORGAN STANLEY(MS): The ECB's New Plan Is 'Quite Likely' To Deepen Europe's Recession.
• 4 Reasons To Be Skeptical About China's New Stimulus.
• Americans Are Buying Expired Food At Auctions To Save Money.
• Obama's Speech Gets Panned.
• Why Expat Businessmen Are Leaving China.
• CHART: Obama Said That Unemployment Would Be Much, Much Lower By Now.
• The Scariest Jobs Chart Ever.
• MORGAN STANLEY(MS): The Jobs Report Was All Bad, And Hiring Activity Could Be Ugly For Months.

Zero Hedge:

• The Reason Why The Unemployment Rate Dropped: The Labor Participation Rate Is At Fresh 31 Year Lows. (graph)
• Chart Of The Day: 25,792,000 Unemployed And Underemployed.
• Spot The Housing Recovery: Building Construction Workers At One Year Lows. (graph)
• Where The Jobs Are: Low Wage Sectors Add Most Jobs In The Past Year.
• German State Of Saxony Supports Legal Action Against ECB.
• Real Unemployment Rate Hits 11.7% As Spread Between Reported And Propaganda Data Hits Record. (graph)
  

New York Times:

• Bond Plan Lowers Debt Costs, but Germany Grumbles. Analysts warned that while Thursday’s announcement from the European Central Bank of an unlimited bond-buying plan should have a positive impact on market perception, familiar political and technical problems still lay ahead for the 17-nation euro zone.
• French President Must Cut Deficit, but How? President François Hollande was preparing to cut €33 billion, or $42 billion, from the budget to keep the euro crisis from infecting France, the headlines read. How would the French withstand it, demanded Mr. Chaffar, a plumber whose business has slowed, when the economy was already stagnant and unemployment was at a 10-year high? “When Hollande places austerity on us,” Mr. Chaffar said angrily, “things will get worse.”
• Move by E.C.B. Puts Pressure on Monti Government.

Nasdaq.com:

• Gold prices rising in anticipation of further quantitative easing. Ben Bernanke's Jackson Hole speech has generally been interpreted to mean another round of quantitative easing (QE3) aka 'printing money' is coming. This would devalue the dollar, and given the inverse relationship between gold prices and currency prices, QE3 means higher gold prices.

Reuters:

• Hedge funds edge up in August, helping yearly performance. Hedge fund returns inched up in August, recording a 0.7 percent gain for the month as the U.S stock market continued its third-quarter rally, according to industry tracker eVestment|HFN. It was the third consecutive month of positive performance for the more than $2 trillion hedge fund industry, and last month's gains helped to push average yearly returns to 4.1 percent, data released on Thursday showed. Still, hedge funds on average trailed the broader stock market, which gained 2.25 percent last month. The S&P 500 stock index rallied 13.5 percent through Aug. 31.
• France, Britain, Germany urge more EU Iran sanctions. European Union heavyweights Britain, France and Germany called on their EU partners on Friday to impose new sanctions against Iran over its nuclear programme. As Israel continued to threaten military action against Iran, German Foreign Minister Guido Westerwelle said Tehran's failure to meet international demands to scale back its nuclear work meant the EU should discuss new sanctions within weeks.
• Minority militias stir fears of sectarian war in Damascus. For months, most of Syria's minority sects stood warily on the sidelines of the revolt by the Sunni Muslim majority against President Bashar al-Assad's Alawite-dominated rule. But in Damascus, neighbourhood vigilante groups are arming themselves in Christian, Druze and Shi'ite Muslim areas, throwing up sectarian borders across Syria's capital in alliance with Assad's forces.

Telegraph:

• Nationalist backlash in Italy and Spain to test Mario Draghi bond plan. The European Central Bank's ground-breaking plan for mass purchases of Spanish and Italian bonds is fraught with political risk and may soon be overwhelmed by nationalist anger in the crisis states, leading economists and statesmen warned at a gathering of the European policy elites in Italy.

ynet:

• EU Mulling Ban On Settlement Products. Greek diplomat says European Union is considering complete import ban and labeling of settlement products; adds Athens believes settlements 'illegal'.