Today's Headlines

Bloomberg:  

• Emerging Markets Are Facing a Big Foreign FX Debt Bill. All that hard-currency borrowing is coming back to haunt emerging economies. The extent of emerging markets' foreign-currency borrowing binge is laid bare in new number-crunching from CreditSights. With EM currencies down a collective 15 percent since the start of the year, the cost of repaying debt and loans denominated in foreign currencies, such as the U.S. dollar and the euro for EM countries, is likely to increase.
• Countries Looking to Devalue Their Way to Growth Have a Big Problem, HSBC Says. Currency depreciations just don't have the impact they used to. Economists at HSBC have a message for monetary policymakers who are hoping their stimulus will help devalue their local currencies and spur exports: Good luck with that. According to HSBC Global Chief Economist Janet Henry and Economist James Pomeroy, a depreciating currency just doesn't pack the same punch it used to. Since the 2008 global financial crisis, "there has so far been little evidence that any major region has benefited from a weaker exchange rate for any significant period," write the economists. "A World Bank study of developed and emerging economies recently found that even for the devaluing countries the currency declines between 2004 and 2012 were only half as effective at boosting exports as they had been in the previous eight-year period."
• These Charts Tell the Story of Brazil's Economic Turmoil. (graph) The selloff in Brazilian assets has picked up pace as President Dilma Rousseff fends off impeachment speculation less than a year into her second term and struggles to win lawmakers’ support for measures to shore up the nation’s accounts. “What is really amazing about it is the speed of the deterioration since the election,” says Geoffrey Dennis, the head of global emerging-market strategy at UBS Securities. “All the sources of growth in Brazil have disappeared.”
• Brazil Bank Turns Into Money Pit for Former Steel Billionaires. The Steinbruchs, a family of former Brazilian billionaires who own Banco Fibra SA, have already injected about 1.4 billion reais ($336 million) into the company to cover losses since 2010, more than its book value. The tally is likely to get higher later this year. “They will do what’s necessary so the bank will stay above minimal capital requirements,” Chief Executive Officer Luis Felix Cardamone Neto said in an interview in Sao Paulo, where the company is based. He declined to say how much will be needed, though he said the family is “completely committed to keeping the bank financially healthy.” 
• ECB Loan Offer Meets Weak Demand in Sign of Recovery Risks. The European Central Bank attracted just 15.5 billion euros ($17.4 billion) of demand from lenders for the latest round of its long-term loan program, in a sign that weak investment may hinder the euro-area recovery. The take-up was lower than all the estimates in a Bloomberg News survey, which ranged from 35 billion euros to 120 billion euros. Banks borrowed 74 billion euros in a similar operation in June. The euro area is struggling to boost investment as its fragile recovery runs into the headwinds of a China-led emerging-market slowdown. The TLTROs are an indication of banks’ willingness to bet on Europe’s economic upswing.
• Canada Dollar on Worst Losing Streak Since 2013 as Growth Slows. The Canadian dollar is in the midst of its worst losing streak in more than two years as global economic growth looks set to derail the country’s plan for an export-led recovery. The currency plunged to an 11-year low after Norway, another large oil exporter, unexpectedly cut interest rates and said it may ease monetary policy even further. Signs that economic growth in China, the world’s biggest commodity consumer, is slowing down have sent prices for everything from oil to copper plunging and prompted speculation demand won’t be quick to recover.
• Germany's DAX Falls to Lowest This Year as Emission Woes Spread. The fallout from Volkswagen AG’s emissions-cheating scandal spurred a selloff in shares that dragged Germany’s DAX Index to its lowest level of the year. BMW AG dropped 5.2 percent as Autobild reported that diesel emissions from an X3 model exceeded European Union limits by as much as 11 times in a real-world road test. That helped push a regional gauge of automakers to its lowest level since November. The DAX retreated 1.9 percent today, taking its losses since Volkswagen admitted the deception to 4.9 percent. The Stoxx Europe 600 Index fell 2.1 percent and closed at its lowest level since January.
• Goldman(GS) Says Copper Bear Market to Last Years as Gluts Build. Copper will slump as the U.S. Federal Reserve starts to raise interest rates, demand growth stalls in China and stockpiles surge, according to Goldman Sachs Group Inc., which stood by a year-end forecast that signals the biggest annual drop since the global financial crisis. Copper prices will probably drop to $4,800 a metric ton by the end of December and $4,500 at the end of next year, analysts including Max Layton and Jeffery Currie wrote in a report. The metal fell 0.8 percent to $5,015 by 1:22 p.m. in London. Separately, the bank cut the target price for Glencore Plc shares, citing a weaker commodities outlook. The miner and trader’s stock dropped as much as 8.7 percent. “We see a long list of potential catalysts for copper’s next major move lower,” Layton, Currie and Yubin Fu wrote in the note received on Thursday. Of particular importance for copper has been the weakness in China, which points to a hard landing for commodities demand during 2015, they said. A drop to Goldman Sachs’s end-2015 target implies a full-year retreat of 24 percent, the most since the 54 percent plunge in 2008. 
• Goldman Cuts Coal Forecast as Indian Demand Seen Following China. The shrinking need for imports by two of the world’s largest coal consumers is undermining the fuel’s outlook, according to Goldman Sachs Group Inc., which cut price forecasts through 2018. Imports by India, which overtook China as the main driver of seaborne thermal coal demand, may slow as the country increases domestic production, analysts including New York-based Christian Lelong wrote in a Sept. 22 report. Prices will also be pressured by a 30 percent drop in marginal production costs over two years through 2016, according to the note. The bank cut its price forecast for Newcastle coal, a benchmark in Asia, by 17 percent to $54 a metric ton for next year.
• Caterpillar(CAT) Cutting 10,000 Jobs, Sales Forecast. (video) 
• Economist: The Fed Would've Hiked Rates Already If It Went Back to Its Old Measure of Inflation. The Federal Reserve doesn't have a deflation problem: It has a measurement problem. So says Joe Lavorgna, chief U.S. economist at Deutsche Bank, who reckons that the Fed should go back to the days of using the Consumer Price Index rather than Personal Consumption Expenditures, as it did prior to the dawn of the new millennium. One measure could make a big difference.  
• Junk Deals Get Wary Welcome as Investors Put Off by Fed Inaction. Junk-rated borrowers are finding it harder to convince bond investors to overlook the global growth concerns that pushed the Federal Reserve to maintain its zero-interest rate policy. Billionaire Patrick Drahi’s Altice NV and chemicals manufacturer Olin Corp. are among companies sweetening terms on debt offerings as investors grow more cautious, according to people with knowledge of the matter.
• Clinton's `Price Gouging' Tweet Sends Drugmaker Hedges Surging. Biotechnology is being singled out by options investors as the sick sibling of the health-care family. Losses for U.S. biotech stocks have accelerated in the three days since Democratic presidential hopeful Hillary Clinton suggested there may be “price gouging” in the market for prescription pills. The high-flying industry, which has surged more than 450 percent during the six-year bull market, is now finding less favor among investors than its more staid older cousins that include Aetna Inc. and HCA Holdings Inc. Implied volatility on an exchange-traded fund tracking biotechnology companies is at its highest in 16 months versus an ETF that mirrors a broader universe of health companies including insurers and hospitals.

Zero Hedge:

• Chinese Military Personnel, "Aerial Assets" Allegedly En Route To Syria.
• A Desperate Wal-Mart Demands Suppliers Pass Along Yuan Devaluation Savings.
• Materials Stocks Are Testing Critical Support Levels. (graph)
• Q2 Earnings Decline Exposes The Illusion Of Profitability. (graph)
• Inflation Watch - Butter Prices Hit All-Time Record High. (graph)
• Dutch Commodity Trading Firm Suffers Massive Loss, Blames It On "Rogue Trader". 
• French Joblessness Surges To Record High. (graph)
• Currency Carnage: The Global FX Heatmap Is A Bloodbath. (graph)
• DAX Crash Continues - Closes Below Black Monday At 10-Month Lows. (graph)
• Recession Countdown: Durable Goods Orders Drop Most Since March, Shipments Tumble. (graph)
• Another Regional Fed Survey Collapses - Chicago Activity Index Hits 6-Month Lows. (graph)
• New Home Sales Surge To Highest Since Feb 2008 (As Existing Home Sales Plunge). (graph)
• Dow Drops 800 Points From Fed Euphoria, Bond Yields & Black Gold Plunge. (graph)

AFP:

• NATO Head Concerned by 'Substantial' Russian Syria Build-Up. NATO head urges Russia to play "constructive" Syria role, citing an interview.