Today's Headlines

Bloomberg: 

• Some Deutsche Bank(DB) Clients Reduce Collateral on Trades. (video) A number of funds that clear derivatives trades with Deutsche Bank AG have withdrawn some excess cash and positions held at the lender, a sign of counterparties’ mounting concerns about doing business with Europe’s largest investment bank. While the vast majority of Deutsche Bank’s more than 200 derivatives-clearing clients have made no changes, some funds that use the bank’s prime brokerage service have moved part of their listed derivatives holdings to other firms this week, according to an internal bank document seen by Bloomberg News. Millennium Partners, Capula Investment Management and Rokos Capital Management are among about 10 hedge funds that have cut their exposure, said a person familiar with the situation who declined to be identified talking about confidential client matters. The hedge funds use Deutsche Bank to clear their listed derivatives transactions because they are not members of clearinghouses. Millennium, Capula and Rokos declined to comment when contacted by phone or e-mail. The lender’s New York-listed shares fell as much as 6.5 percent as of 12:53 p.m. local time.
• Here's the Smoking Gun That China Has a Huge Housing Bubble. Speculative buyers have eschewed Chinese stocks in favor of property, prompting even the chief economist at the central bank of the world's second largest economy to declare that housing was in a "bubble." But when strategists at UBS AG recently compiled a list of bubblicious housing markets, there weren't any selections from mainland China due to the lack of reliable data on the subject, underscoring the continued difficulty in declaring Chinese real estate to be in overheated territory. But Deutsche Bank AG Chief China Economist Zhiwei Zhang thinks he's pinpointed "a clear sign of a bubble" in the market — one that will end in a major correction in two years' time.  
• Treasuries Gain as Deutsche Bank Contagion Fear Fuels Haven Bid. Treasuries rallied, reversing earlier losses, as traders sought haven assets on reports that some Deutsche Bank AG clients are pairing back their exposure to the beleaguered German lender. Treasury 10-year yields fell one basis point, or 0.01 percentage point, to 1.56 percent as of 2:43 p.m in New York, according to Bloomberg Bond Trader data. The price of the 1.5 percent security due in August 2026 climbed to 99 13/32.
• European Stocks Fail to Maintain Gains After U.S. Economic Data. (video) The rally in energy producers wasn’t enough for European equities to maintain their gains after U.S. data stocked concern about the economy as the Federal Reserve contemplates raising interest rates. The Stoxx Europe 600 Index gained less than 0.1 percent, almost completely erasing its advance in the last hour of trading. A report showed U.S. pending home sales slumped in August, just as Fed Bank of Atlanta President Dennis Lockhart said the central bank is nearing its goals of maximum employment and steady inflation near 2 percent.
• With Deal Done, OPEC Faces Hurdles in Making Output Cuts Work. (video) The challenges OPEC will confront trying to limit output were evident just minutes after the group agreed on the new plan. In an angry and sometimes incoherent briefing, Iraq’s oil minister railed against the journalists and analysts who estimate the amount of crude each member produces. Why? Those estimates will be key to setting quotas and evaluating which countries are meeting their commitments to cap production and which aren’t. Iraq’s minister, Jabbar al-Luaibi, complained Wednesday in Algiers that published estimates of Iraqi output were too low and warned that Iraq will refuse to accept figures that don’t match its own.
• OPEC Nudges Ruble to Level That Sparked Putin Warning: Chart.
• Oil Analysts Remain OPEC Skeptics as Pump-at-Will Policy Ditched. (video) Oil analysts, many of whom were surprised by OPEC’s decision on Wednesday to set out the framework of a deal to limit oil production, remain split about the impact of the producer group’s plan. A Bloomberg News survey the week before the gathering showed that just two out of 23 analysts anticipated that the Organization of Petroleum Exporting Countries would overcome its internal rivalries and agree on a strategy. The producer group said in Algiers that it will restrict output to a range of 32.5 million barrels a day to 33 million barrels a day, with the fine details to be hammered out at its next formal meeting in November. Here are a selection of analysts’ comments following the Algiers meeting:
• Fed Divide Sharpens Between Washington Board and Regional Chief. (video) Remarks from Federal Reserve officials on Thursday highlighted a growing split between its Washington-based Board of Governors and many of the central bank’s regional bank presidents, who are more eager to get on with raising interest rates. Chair Janet Yellen has worked hard to preserve consensus among the 17 current members of the policy-setting Federal Open Market Committee, but it’s started to fray. Three regional Fed presidents dissented in favor of a rate hike at last week’s FOMC meeting and comments since then show that other officials shared their desire to tighten for the first time this year. Philadelphia Fed chief Patrick Harker said the U.S. central bank should begin lifting rates to get ahead of inflation and avoid “falling behind the curve.” His remarks echoed those in recent days from his counterparts in Boston, Dallas, San Francisco, Cleveland and Kansas City.
• Mercedes EQ Brand Plans 10 Models to Take on Tesla(TSLA).                                                                        

CNBC:

• Representative on Wells Fargo(WFC) and other big banks: 'It's time to break them up'. (video)
• OPEC's 'truce on oil prices' could be quickly shattered by more shale production.

Zero Hedge:

• Why is Deutsche Bank(DB) now the biggest worry in the financial world?
• Wells Fargo(WFC) To Be Sanctioned By DOJ For Improperly Seizing Soldiers' Cars.
• Live Feed: NJ Transit Commuter Train Crashes Into Hoboken Station: 1 Dead, 2 Critical, Up To 100 Injured.
• Major Dollar Shortage Exposed In Europe As Deutsche Bank Contagion Spreads. (graph)
• Iraq Revolts, Says "We Cannot Accept" OPEC Deal In This Form.
• Panic In The Kingdom: Saudi Currency, Bonds, Banks Extend Collapse Despite OPEC 'Deal'. (graph)
• Outflows From Active Funds Surpass A Record $200 Billion. (graph)
• Stanley Fischer's Novel Idea: "We'd Be Better Off With A Price For Using Money".
• NAR Warns "Current Housing Recovery Could Stall" As Pending Home Sales Slump To 7-Month Lows. (graph)
• Mainstream Media Still Silent As Dakota Access Pipeline Protests Spread, Construction Blocked In Iowa. (video)
• Final Q2 GDP Comes At 1.4%: US Set To Grow At Slowest Pace Since Financial Crisis. (graph)
• Pain Spreads To Germany's Second Biggest Bank: Commerzbank Scraps Dividend, Fires 20% Of Workforce.
• Jobless Claims Joke Of The Day. (graph)
• India Assets Slide After Modi Launches "Surgical Strikes" In Kashmir, Killing Two Pakistani Soldiers.

The Telegraph:

• Is Deutsche Bank(DB) the next Lehman Brothers? The denials certainly don't help suggest it's not.
• Why is Deutsche Bank(BB now the biggest worry in the financial world?

NZZ:

• Plosser Says It's 'Mystery' Why Fed Isn't Raising Rates. "It's mystery. Different reasons were cited at each past meeting," Charles Plosser, former president of the Federal Reserve Bank of Philadelphia, tells NZZ in response to question why U.S. officials are waiting to tighten policy.