Bull Radar

Style Outperformer:
Large-Cap Value (+.31%)

Sector Outperformers:
Semis (+.88%), Drugs (+.86%) and Homebuilders (+.79%)

Stocks Rising on Unusual Volume:
VVUS, MNKD, PG, EL, PFE, STD, HBC, IOC, BHI, WG, ALJ, SWIR, BDC, KALU, HEAT, SXCI, MDRX, MCRI, ZUMZ, CISG, DGIT, SCOR, EPAY, DDRX, ILMN, CHBT, AAPL, CMED, BCSI, SNDK, TEVA and SBUX

Stocks With Unusual Call Option Activity:
1) ODP 2) WNR 3) ARNA 4) IOC 5) HBAN

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Friday Watch

Late-Night Headlines
Bloomberg:

- The U.S. Securities and Exchange Commission proposed banning flash orders after lawmakers said the practice may give hedge funds an advantage over other investors. SEC commissioners unanimously voted today to seek public comment on a rule barring exchanges and trading platforms from giving clients access to information about stock orders a fraction of a second before the market. The proposal requires a second vote at a later public meeting to become binding. “Investors that have access only to information displayed as public quotes may be harmed if market participants are able to flash orders and avoid the need to make the orders publicly available,” Chairman Mary Schapiro said.

- The Federal Reserve’s balance sheet expanded for a sixth straight week as the central bank purchased housing debt in a program aimed at reducing mortgage rates. The Fed’s assets rose $51.9 billion, or 2.5 percent, to $2.14 trillion, the highest since May, in the week ended yesterday, the central bank said today in Washington. Mortgage- backed securities increased by $59.8 billion to $685.1 billion. One year after Lehman Brothers Holdings Inc.’s bankruptcy prompted the Fed to begin doubling its balance sheet with emergency credit programs, U.S. central bankers are trying to determine when to withdraw that stimulus. The Fed’s policy- setting Open Market Committee meets in Washington Sept. 22-23.

- The U.S. House of Representatives voted today to cut off all federal funding for the Association of Community Organizations for Reform Now after reports that some of the group’s employees gave tax and housing advice to people who said they ran a prostitution business. The motion passed 345-75 during debate on legislation to end federally subsidized private student loans. The bill now goes to the Senate. “Acorn’s abuse of the public trust and disregard for the responsibilities that come with receiving taxpayer funding are disturbing,” said Representative Roy Blunt, a Missouri Republican. Acorn, a nonprofit organization that provides housing and other assistance for low- and moderate-income families, has received more than $53 million in federal funds since 1994, according to a report by House Oversight and Government Reform Committee Republicans. Jerry Schmetterer, a spokesman for Brooklyn District Attorney Charles Hynes, said his office is conducting a criminal investigation of Acorn. He declined to elaborate. New York Attorney General Andrew Cuomo is monitoring that probe and will ensure any taxpayer money related to Acorn was used correctly, according to his spokesman, Richard Bamberger. California Attorney General Jerry Brown told reporters that he is “looking into” the allegations against Acorn. In addition, the Internal Revenue Service said Sept. 15 that it was conducting a “thorough review” of its agreements with Acorn, which helps low-income people prepare their tax returns. The group said it has helped prepare about 150,000 free tax returns since 2004 that have generated $190 million in tax refunds. “The IRS has partnered with hundreds of community and volunteer organizations, including Acorn, to provide free tax assistance to low- and moderate-income Americans,” IRS spokesman Frank Keith said in a statement released by the agency. “We are aware of recent events, and we are conducting a thorough review of our relationship with Acorn.” Johanns has asked Attorney General Eric Holder to investigate Acorn, and Representative Lamar Smith of Texas, the top Republican on the House Judiciary Committee, has made a similar request of the Federal Bureau of Investigation. “It is clear there exists significant justification for federal law-enforcement officials to conclude that Acorn should be investigated for potential criminal conduct, including the question of whether the organization itself is a criminal enterprise,” Smith wrote in a letter. Smith also asked the Justice Department’s inspector general whether Acorn has received money from the agency. Smith hasn’t yet received responses, said Kim Smith, a spokeswoman.

- Australian Prime Minister Kevin Rudd warned against complacency in the fight against terrorism after Indonesian police killed militant leader Noordin Mohammad Top, the alleged mastermind of bombings in Bali and Jakarta. Al-Qaeda and its Southeast Asian affiliate Jemaah Islamiyah remain “alive and well,” Rudd told Australian Broadcasting Corp. radio today. “We cannot afford to be complacent.”

- Copper fell in New York and London after two days of gains as swelling inventories fueled concern that this year’s rally lifted prices too high to reflect demand. Stockpiles tallied by the London Metal Exchange expanded for a 15th day to 324,375 metric tons, the most since May 26. Inventories have increased 8.5 percent this month after rising 6.4 percent in August and 5.6 percent in July. In Shanghai, stockpiles rose 12 percent last week to 97,396 tons, the highest level since June 2007. “The price should adjust to the high inventories and a looming oversupply,” Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt, said by phone. “We have had huge increases in stocks on the LME and in Shanghai, and there are probably undisclosed inventories in China as well.”

- US oil refiners, which lost almost two-thirds of their market value since the recession began in December 2007, won’t emerge from the “Dark Ages” of falling demand and disappearing profit margins until they shut their oldest plants, Credit Suisse Group AG analysts said. When margins began to fall along with demand at the end of 2007, refining capacity continued rising because of expansion projects that were already in the works. Any rebound in refining stocks based on expectations an economic recovery will lift fuel demand probably will be short-lived because of the overhang in production capacity, CSFB analysts Mark Flannery and Rakesh Advani said in a note to clients. “The real issue in US refining is overcapacity, and even the biggest of demand bounces will not be able to overcome this,” Flannery and Advani wrote. “The only lasting way out of the Dark Ages is for US refiners to start to shutter their weaker plants, and that part of the cycle has yet to begin.”

- Bank of America Corp.(BAC) knew about Merrill Lynch & Co.’s impending losses and plan to award bonuses when the lender made its takeover bid last year, said John Thain, the brokerage’s former chief executive officer.

- Aiful Corp., the Japanese consumer lender whose shares have lost 36 percent in the past month, plans to reschedule debt payments after being shut out of credit markets by the financial crisis. Aiful, which hasn’t sold bonds since March 2007 according to Bloomberg data, is seeking to delay repayments on 280 billion ($3 billion) of its 915 billion yen of debt, said spokesman Hirofumi Haruguchi. The company’s stock was poised to fall the most since its 1998 stock market listing on the Tokyo exchange.

Wall Street Journal:

- Penn National Gaming Inc.(PENN) is negotiating with the bankrupt Fontainebleau Las Vegas to buy the troubled casino and resort, according to a source with knowledge of the negotiations. The two parties have been in talks for three months and have not reached a deal, the source said. Talks could still fall apart at any moment. The $3 billion, 4,000-room hotel and casino development on the remote northern end of the Las Vegas Strip halted construction last spring when banks cut off around $800 million in funding. Around 3,000 construction workers were laid off when the funding dried up. The project is about 70% complete.

- Shoppers soon will be able to buy everything from meat to moccasins based on a number that purports to tell them the products' environmental impact. Manufacturers and retailers across the globe are working to measure their products' carbon footprints for a variety of reasons, and all of the efforts have one thing in common: The results have the appearance of precision. But all the decimal points in the world can't hide the fact that measuring carbon footprints is inexact. It is clouded by varying methodologies and definitions -- not to mention guesses. "There are no clear rules for the time being," says Klaus Radunsky, who co-chairs a group within the Geneva-based International Organization for Standardization that is producing a guideline for measuring products' environmental impacts. "It depends very much on how you do the calculations."

- Senate Finance Committee Chairman Max Baucus unveiled his long-awaited health-care compromise this week to the sound of one hand clapping. You wouldn't know it from the White House, which soothingly spun the Baucus bill as a breakthrough on the forced march to reform. We were told it was a good thing that the only person in Washington who liked Max Baucus's bill was . . . Max Baucus. That everybody was unhappy meant we were getting somewhere. What matters is that the Senate now has a "common sense" product to serve as a "building block" for bipartisan legislation. Uh-huh. Mr. Obama has the same problem he's had since the start, only magnified. That would be the left wing of his party, which is about to rip up the Baucus bill, making an ugly product grotesque.

MarketWatch.com:
- A proposed regulatory change in how companies recognize revenue of certain products could provide a boost for several tech firms, and Apple Inc. in particular. Several leading tech companies, including Hewlett-Packard Co.(HPQ) , IBM Corp.(IBM) and Cisco Systems Inc.(CSCO) had lobbied for the change. However, the most high-profile beneficiary could be Apple(AAPL) . In particular, the change is expected to improve how the company accounts for the sales of its wildly popular iPhone as well as products such as its Apple TV set-top box. For Apple, the impact of the accounting change can be seen in how the company reported its fiscal third-quarter results in July. Apple said it earned $1.23 billion, or $1.35 a share, on sales of $8.34 billion. However, when sales and costs of good sold for iPhones and Apple TV were, as Apple put it, "adjusted over their economic lives," the company's adjusted earnings for the quarter would have been $1.94 billion and sales would have climbed to $9.74 billion.

- Venezuela's President Hugo Chavez announced that China will invest $16 billion in an oil exploration project in the Orinoco River region, according to media reports. The news comes only a few days after Venezuela signed a $20 billion joint venture agreement with a group of Russian oil companies to develop the Junin 6 deposit in the Orinoco basin, reports said. Chavez reportedly said the two deals will increase Venezuela's oil production by about 900,000 barrels a day.

IBD:

- "In good times, people get sick. In bad times, people get sicker." Bill Sanger, chief executive officer of Emergency Medical Services (EMS), figures there's a lot of truth in that old saw. And he should know. His firm provides ambulance service and also staffs and manages emergency rooms. Business during these stressed times is flourishing.

CNNMoney.com:

- Afghan President Hamid Karzai on Thursday warned Western observers not to "delegitimize" the results of his country's presidential election, which has been marred by allegations of fraud.

NY Post:

- The Obama administration secretly estimated that its cap-and-trade plan to fight pollution would cost Americans up to $200 billion a year -- or $1,761 per family. The stark assessment of the administration's top environmental priority was made in an unreleased Treasury Department analysis that contradicts much lower figures cited by Democratic supporters. The House passed the bill by a narrow 219-212 vote in June. Cap-and-trade would be a government program designed to combat global warming by setting an annual cap on the amount of pollution companies can emit. To stay under their cap, firms could buy extra allowances in a government auction. Economists say that cost would be passed on to consumers. How much cost? An internal Treasury Department memo said, "Given the administration's proposal to auction all emission allowances, a cap-and-trade program could generate federal receipts on the order of $100 to $200 billion." Translation: $100 billion to $200 billion in what amounts to a "carbon tax," which could fall on everyone who uses energy. The higher figure amounts to $1,761 per US household.

Forbes:

- At Stagg Capital, investor money may have drifted off into an outside business and/or romantic relationships.

Politico:

- The Senate has rejected an amendment that would have killed funding for the John Murtha Airport in Johnstown, Pa., turning back an effort by fiscal conservatives to yank earmarks from a largely deserted airport named after a controversial lawmaker. The vote was 43-53, as Democrats decided to retain funding for an airport that has only three flights a day and is named after Rep. John Murtha (D-Pa.), a powerful appropriator who has come under increasing scrutiny for earmarks and his relationships with defense contractors in his district. The Murtha airport has received a total of $150 million in funding and currently receives about $1.5 million a year. The three daily flights — all to Washington — leave the Johnstown airport, and quite often the airplanes are half-empty.

- In the war on the czars, Glenn Beck and the GOP are picking up reinforcements from an unlikely source: the Democratic Party. The Fox News host and leading Republican lawmakers have been hammering President Barack Obama for weeks over a proliferation of policy “czars” — presidential appointees who don’t have to be confirmed by the Senate and aren’t easily held to account by Senate oversight committees. Democratic Sen. Russ Feingold of Wisconsin joined the anti-czar chorus Wednesday, asking Obama to detail the roles and responsibilities of all of the czars in his administration and to explain why he believes the use of czars is consistent with the Senate’s constitutional power to offer advice and consent on top-level executive branch officials. “To the extent that this undercuts that role and people are put in the place of Cabinet people and really are the key authorities and you can’t question them, that’s something worth talking about,” Feingold said. “I think it’s a fair point.” Feingold says he doesn’t know if there are any constitutional violations, but he suggested that he may hold an oversight hearing on the matter. Although the czar charge has come mostly from the right, Feingold isn’t the only Democrat to voice concerns about the issue.

Reuters:

- Robust sales of the Pre smartphone helped Palm Inc post a smaller-than-expected loss, but a tepid second-quarter sales forecast and a plan to sell more shares helped snuff out a rally and sent its shares down nearly 2 percent on Thursday.

- A U.S. energy information company has brought a James Bond approach to the otherwise bland job of gathering oil inventory data, hoping high-tech detective work will attract the business of petroleum traders hungry for accurate supply figures. Kentucky-based Genscape Inc, which has been selling power supply data since it was founded in 1999, has been flying a helicopter over the nation's top oil storage hub in Cushing, Oklahoma, every Friday since January, snapping photos to see how full the tanks are.

Financial Times:

- After five years of scanning books electronically, Google(GOOG) is finally entering the print publishing business for the first time. Through an arrangement with a printing company unveiled on Thursday, Google will offer 2m out-of-copyright books that can be picked up or shipped from libraries, universities and other spots around the world. It has struck the deal with On Demand Books, makers of the Espresso Book Machine that can print a 300-page book in less than five minutes, complete with a cover and a bound edge. The editions are likely to cost about $8, with Google keeping a dollar, On Demand Books keeping a dollar and the retailer keeping $3. The remaining $3 should cover the cost of materials and labor. “Google’s mission is to make the world’s books more available,” said Jennie Johnson, spokeswoman for the internet search leader. The alliance is timed to help Google demonstrate the public benefit to its broader initiative in books, which includes text searches and a proposed legal settlement of a class-action copyright case.

- Barack Obama’s decision to scrap Bush-era plans for a missile defence shield on Thursday triggered dismay in central Europe and among Republicans on Capitol Hill, amid claims that it amounted to a major security concession to Russia. Unveiling one of the biggest reversals on national security since coming to office, the US president said that he would abandon predecessor George W. Bush’s plans for ground-based interceptors in Poland and a related radar site in the Czech Republic, deploying instead a new system that could hit shorter-range Iranian missiles. US officials deny the move is a quid pro quo for Russian support for tougher UN sanctions on Iran – an idea previously floated by Mr Obama’s advisers. Russia’s foreign ministry on Thursday denied that there was any private deal behind the US decision. The Polish and Czech governments voiced no immediate concern, amid US reassurances that it would later deploy land-based defence systems in eastern Europe. But politicians in warned that the move would undermine US relations with Nato allies who fear a resurgent Russia. Mirek Topolanek, a former Czech prime minister, said: “This is bad news. After 20 years of our path into Euro-Atlantic structures and our very active involvement there, the process is being halted.”On the 70th anniversary of the Soviet invasion of Poland, Lech Walesa, former president, said: “I can see what kind of policy the Obama administration is pursuing towards this part of Europe. The way we are being approached needs to change.’’ “It would be a defeat for the long-term thinking of the American administration regarding this part of Europe,” Aleksander Szczyglo, head of the Polish national security bureau, told Poland’s TVN television.

Telegraph:

- Lloyds Banking Group has been forced to abandon its plan to withdraw from the Government's toxic debt insurance scheme after failing to raise enough capital to meet the Financial Services Authority's strict requirements.

Economic Daily News:
- Nanya Technology Corp. raised the prices of DDR2 dynamic random memory chips to $2 because of shortage for the semiconductors, citing Pei-lin Pai, vice-president at Nanya.

The Economic Times:

- Infosys Technologies, Wipro and HCL Technologies are among the software service providers that are laying foundation for the next round of multi-million dollar orders from the big US corporations, by pitching for low-value, but politically important US state governments’ orders. Infosys, which counts JP Morgan and Morgan Stanley as clients for its services, bids for Arizona Public Service’s (APS) 400 positions, who work in its information-services department, and another 400 or so contractors to raise the staff strength for undisclosed amount. Nine other US states, some from where politicians opposed offshoring work, are looking to outsource their healthcare operations worth over $2 billion, said Wipro chief strategy officer KR Lakshminarayana, and the company hopes to get a slice of these.

Late Buy/Sell Recommendations
Citigroup:

- Upgraded (PG) to Buy, target $66.

- Reiterated Buy on (LMT), target $90.

SunTrust Robinson:

- Rated (GCO) Buy, target $28.

CSFB:

- Reiterated Outperform on (CKR), target raised to $13.

William Blair:

- Rated (MFE) Outperform.

- Rated (ARST) Outperform.

Oppenheimer:

- Rated (AMT) Outperform, target $41.

- Rated (CCI) Outperform, target $35.

Night Trading
Asian Indices are -.75% to +.25% on average.

Asia Ex-Japan Inv Grade CDS Index 113.50 +3.50 basis points.
S&P 500 futures -.32%.
NASDAQ 100 futures -.19%.

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Other Potential Market Movers
- The Morgan Keegan Industrial/Transport Conference, DA Davidson Engineering/Construction Conference and the (AGP) Investor Day could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and financial shares in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.

Stocks Finish Slightly Lower, Weighed Down by Semi, Gold, Coal and Homebuilding Shares

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Stocks Slightly Lower into Final Hour on Profit-Taking, More Shorting

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Technology longs, Biotech longs and Medical longs. I added to my (ILMN) long and took profits in another long today, thus leaving the Portfolio 100% net long. The tone of the market is mildly negative as the advance/decline line is about even, most sectors are declining and volume is heavy. Investor anxiety is high. Today’s overall market action is neutral. The VIX is rising .17% and is high at 23.74. The ISE Sentiment Index is slightly below average at 136.0 and the total put/call is around average at .79. Finally, the NYSE Arms has been running above average most of the day, hitting 1.36 at its intraday peak, and is currently 1.19. The Euro Financial Sector Credit Default Swap Index is falling .04% today to 70.66 basis points. This index is down from its record March 10th high of 208.75. The North American Investment Grade Credit Default Swap Index is rising 1.50% to 101.50 basis points. This index is also well below its Dec. 5^th record high of 285.99. The TED spread is unch. at 20 basis points. The TED spread is now down 443 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is rising .92% to 34.13 basis points. The Libor-OIS spread is falling 1 basis point to 10 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is falling 7 basis points to 1.81%, which is down 86 basis points since July 7th. The 3-month T-Bill is yielding .09%, which is unch. today. Market leading stocks are substantially outperforming the major averages today. The bears have been unable to gain any traction from mid-day profit-taking. Defense, Alt Energy, Steel, Internet, Computer Service, Medical, Biotech, Construction, REIT, Restaurant, Gaming, Education and Airline shares are all higher on the day. It is noteworthy that (C) and (BAC) have been strong throughout the day. Today’s overall action does not indicate to me that this is the beginning of the much anticipated correction. Despite recent gains, AAII Bulls just slightly outnumber bears. The AAII % Bulls rose to 42.0 this week, while the % Bears declined to 40.0. Nikkei futures indicate an unch. open in Japan and DAX futures indicate a -11 open in Germany tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on diminishing economic fear, short-covering, declining healthcare reform worries, lower long-term rates, technical buying and investment manager performance anxiety.

Today's Headlines

Bloomberg:

- Laurence Fink, chairman and chief executive officer of BlackRock Inc.(BLK), said the U.S. dollar remains the preferred currency for investors seeking to protect wealth. “I still believe it is the best place to be if you have a large pool of money,” Fink said today in an interview with Bloomberg Television. Compared with the euro, Japanese yen and U.K. sterling, “I choose the dollar.”

- Company costs and consumer gas and electric prices will increase if Congress imposes higher capital and margin requirements on hedging as part of legislation meant to rein in over-the-counter derivatives, industry leaders said. Cargill Inc. may need to shift $1 billion from other investments to meet higher margin requirements under President Obama’s derivatives plan, said Jon Hixson, the company’s federal government relations director. The legislation may also make this type of hedging too expensive for smaller utilities, forcing them to raise rates, said Glenn English, chief executive officer of the National Rural Electric Cooperative Association. Municipal utilities that keep rates low by hedging risk shouldn’t be penalized by a system meant to address the failure on an insurance company like AIG, said David Schryver, executive vice president of the American Public Gas Association. The group, which represents public and community utilities in 36 states, is pushing to exempt smaller hedgers from the new rules.

- Gold at $1,000 Spurs Sales of Old Jewelry as Scrap Rises 22%.

- Household wealth in the U.S. increased by $2 trillion in the second quarter, bringing an end to the biggest slump on record. Net worth for households and non-profit groups climbed to $53.1 trillion from $51.1 trillion in the first quarter, marking the first gain since the third quarter of 2007, according to the Federal Reserve’s Flow of Funds report today in Washington. The government began keeping quarterly records in 1952. The advance reflected the biggest quarterly jump in stock prices since 1998 and the first increase in home values in more than two years. Together with increased savings and less debt, the gain in wealth is part of the mending process consumers will undergo in coming years before spending can gain speed.

- American Airlines, the world’s second-largest carrier, said it raised $2.9 billion in cash and financing in “a show of strength” and will expand at four U.S. hubs to prepare for a recovery in travel demand. American parent AMR Corp.(AMR) rose the most in 14 months in New York trading. Credit-card partner Citigroup Inc. paid $1 billion in an advance purchase of frequent-flier miles, and GE Capital Aviation Services provided $1.6 billion in jet-financing commitments, American said today.

- Manufacturing in the Philadelphia region expanded more than forecast in September as sales advanced at the fastest pace since the recession began. The Federal Reserve Bank of Philadelphia’s general economic index jumped to 14.1 this month from 4.2 in August, the bank said today. While shipments gained, orders slowed and employment and inventories decreased, the report showed, indicating manufacturing may take time to rebound. “Manufacturing activity is still at a very low but it has bottomed and even begun a modest recovery,” said Steven Wood, president of Insight Economics LLC in Danville, California. “However, a vigorous recovery is unlikely.” The Philadelphia Fed’s shipments index jumped to 8.2, the highest level since December 2007, the month the world’s largest economy slumped in the recession. The new orders index fell to 3.3 from 4.2 in August. The measure of inventories slumped to minus 18.1 from 0.3. Today’s report showed the employment index fell to minus 14.3 from minus 12.9 in August, which was an 11-month high. The gauge of prices paid climbed to 14.9 from 10, while an index of prices received slumped to minus 10.6 from minus 1.5. Manufacturers were less optimistic about the future, today’s report showed. Expectations for the next six months fell to 47.8 from 56.8.

Wall Street Journal:

- House Speaker Nancy Pelosi Thursday questioned whether a Senate health-care proposal was affordable for the middle class and expressed concerns about its effect on the elderly. The California Democrat, at her weekly news conference, welcomed health-care legislation released by Senate Finance Chairman Max Baucus as a step forward. But she also drew distinction between that bill and House legislation and reiterated her own preference for a government-run insurance program that would be available alongside private insurance plans, the so-called public option.

- The White House is scrapping a Bush-era plan for an Eastern European missile-defense shield, saying a redesigned defensive system would be cheaper, quicker and more effective against the threat from Iranian missiles. "After an extensive process, I have approved the unanimous recommendations of my secretary of defense and my joint chiefs of staff to strengthen America's defenses against ballistic-missile attack," President Barack Obama said in an announcement Thursday morning. The previous administration's plans will be changed, moving away from the installation of a missile-defense shield in the Czech Republic and Poland in the near future. A second phase to begin in 2015 could result in missiles being placed on land in Eastern Europe.

- FedEx Corp.(FDX) said the global economy is beginning to stabilize but warned that its earnings in the near term will continue to lag prior years' gains, as first-quarter profit dropped 53%. The package-delivery giant's optimism, brighter than its June forecast, portends a stronger quarter for many major transportation companies due to upturns in the retail, automotive and housing sectors—the three biggest drivers of manufactured goods shipped to the U.S. by barge or aircraft, and then moved by rail and truck. FedEx, because it handles an average of six million packages a day world-wide.

- Hundreds of federal health officials are earning more than cabinet secretaries, according to federal salary data, as part of a program originally intended to recruit and retain a handful of top-level scientists who might otherwise defect to private-sector jobs. The salary program, known as Title 42 after a provision in federal salary regulations, was originally set up for "rare" cases to attract and keep "extraordinary individuals" in the health sciences, according to an October 2000 memo within the Department of Health and Human Services that sought permission to pay these individuals outside of normal civil-service rules. About 2,000 officials are considered "special consultants" under Title 42. Of these, 378 earned more than $191,000 last year, the salary of a cabinet secretary in 2008.

CNBC:

- Congress has lost its momentum for financial regulatory reform and may not pass a bill before next spring, if at all, the chairman of the House Agriculture Committee said Thursday. "We're not moving on this," Collin Peterson told reporters while his committee listened to witnesses on regulation of over-the-counter derivatives. "I don't think it's acceptable not to deal with this issue this year."

- The economic recovery may be sharper than many forecasters, including the International Monetary Fund, have predicted, precisely because the recession was so deep, Michael Mussa, senior fellow, Peterson Institute for International Economics, told CNBC.com. "My observation is that when you have a deep recession you usually get a steep recovery," Mussa, who was also chief economist and director of the Department of Research at the IMF, said in a telephone interview. "What I'm forecasting is not a recovery that exceeds what we've seen in the past coming out of recessions."

- The 30-year U.S. home loan rate has dipped to a 3-1/2-month low to flirt again with breaking below the psychologically important 5 percent level. Average 30-year mortgages, the most widely used loan product, declined 0.03 percentage point to 5.04 percent in the week ended Sept. 17, Freddie Mac(FRE) said Thursday. The rate was the lowest since 4.91 percent in the week to May 28 and about 7/8 percentage point below the 5.78 percent a year ago, according to Freddie Mac, the second-largest U.S. home funding company.

- The debate over a tax on sugary soft drinks — billed as a way to fight obesity and provide billions for health care reform — is starting to fizz over. The tax would apply to soft drinks, energy drinks, sports beverages and many juices and ice teas, but not sugar-free diet drinks.

NY Times:

- Hedge Funds Challenged Over Fees.

FINalternatives:
- The hedge fund industry is still shrinking, but more are opening and fewer are closing, according to Hedge Fund Research.Some 292 hedge funds, including 123 funds of hedge funds, closed their doors in the second quarter, the data provider said. That’s just over 3% of all hedge funds, and is down 22% from the first quarter, when 376 funds went under, although the casualties included some of the bigger names in the hedge fund universe, including Pequot Capital Management, Cantillon Capital Management and Satellite Asset Management.New hedge funds are still opening at a slower pace than liquidating hedge funds, but they are opening faster than in the first quarter. In the second three months of the year, 182 funds went into business, up 24% from the January to March period.The news is not all good for hedge funds: Performance fees are continuing to drop, falling for the third straight quarter. The average incentive fee charged by hedge funds is no 19.18%, down 19.34% from the beginning of last year.

Washington Times:

- They're spending hundreds of billions of dollars to stimulate the economy, so Senate Democrats said Wednesday they might as well spend millions putting up signs to highlight where the money is being spent. The road signs, which let motorists know the paving and construction projects they see are being paid for by the $787 billion economic stimulus program, have popped up across the country. In a 52-45 vote, the Senate decided the signs should stay. "These are self-congratulatory signs; they're political signs. They're so that lawmakers can pat themselves on the back," he said. "But these signs cost money. Actually, when you add them all up, they cost a lot of money." Some localities have objected to the signs, arguing that they would rather spend the money on more projects. But Mr. Gregg said one community in New Hampshire was told no sign, no money for their original project. "We do enough self-congratulating around here. They shouldn't make the taxpayers pay for it," he said. Also Wednesday, senators voted against allowing states to determine their own transportation funding priorities, such as repairing deficient bridges. A day earlier, the Senate voted against an effort by Sen. John McCain, Arizona Republican, to drop all of the pork-barrel earmark projects from the $67.7 billion transportation and housing spending bill and use the $1.7 billion slated for earmarks to modernize the nation's air traffic control system instead. Five Democrats -- Sens. Kirsten Gillibrand of New York, Amy Klobuchar of Minnesota, Blanche Lincoln of Arkansas, Jeanne Shaheen of New Hampshire and Charles E. Schumer of New York -- voted with all 40 Republicans to try to strip the money, but their support was not enough. The stimulus bill included nearly $50 billion for the Transportation Department. So far, $28.3 billion has been obligated, but only $2.6 billion has been paid out for projects.

Vanity Fair:

- 100 to Blame: Alan Greenspan, Ernest Hemingway, and More.

Cargosystems.net:

- For the fourth year running, Singapore has retained its position as the world's number one box port. Industry predictions that Shanghai would steal the top spot came to nothing with Singapore outdoing its Chinese rival by a margin of over 2m teu.

GIGaom:

- Jajah is privately launching in beta today a voice-over-IP solution that lets people make calls for free via micromessaging site Twitter and other Twitter-related desktop and mobile applications. This is another effort by Jajah to get its VoIP service onto a popular application; last year, the company forged a partnership with Yahoo to offer its voice services to Yahoo IM users.

Rassmussen:

- The health care reform legislation working its way through Congress faces many obstacles primarily because it touches so many aspects of life. The abortion issue is one more with the potential to create a lose-lose situation for advocates of the plan. The latest Rasmussen Reports national telephone survey finds that 48% believe any government-subsidized health care plan should be prohibited from covering abortion procedures. Thirteen percent (13%) believe such plans should be required to cover abortions, and 32% favor a more neutral approach with no requirements in either direction.

The Daily Beast:

- Are two measly Bear Stearns hedge-fund managers the only “culprits” likely to go to jail over the financial meltdown? Charlie Gasparino on the strange lack of interest in prosecuting Wall Street.

Reuters:
- The California lawmaker who spearheaded a high-profile anti-obesity effort across the country's most populous state is now training his sights on sugar-sweetened drinks. Sen. Alex Padilla, who led a campaign requiring big restaurant chains to disclose calories in meals, said on Thursday he planned to hold hearings in November on the link between soda consumption and obesity.

- Genetic analysis products maker Sequenom Inc (SQNM) said on Thursday it launched its cystic fibrosis carrier screening test, sending its shares up 12 percent. Earlier this year, Sequenom delayed the launch of its much-awaited Down Syndrome test due to mishandling of data by employees, shaking investor confidence in the company. "A lot of people were sceptical if the company would be able to launch its tests in a timely manner," said Hapoalim Securities analyst Raghuram Selvaraju. "The fact that they have launched this one indicates that they were serious about what they said in their last earnings call about rolling out these tests," he said.

- The U.S. commercial paper market expanded for the fifth straight week for the first time since December, bolstering indications of an economic rebound as the global financial crisis fades, Federal Reserve data showed on Thursday. Analysts point to the incipient recovery of this market as a sign companies are restocking shelves to meet an upturn in demand and even increasing payroll costs to hire workers in some cases, confirming the economy is likely growing again after the most brutal recession in decades.

- The biggest change in U.S. higher education finance in 35 years was approved on Thursday by the House of Representatives, handing a defeat to major banks and student loan giant Sallie Mae (SLM). Lawmakers voted 253-171 in favor of legislation that would cut the banks and Sallie Mae out of a large slice of the $92 billion college student loan business, shifting most lending into a program run by the U.S. Education Department. The bill, supported by the White House, will go next to the Senate for further consideration.

Financial Times:
- The chief executive of the Australian Securities Exchange has criticized the Obama administration’s planned regulatory reforms of the US financial system, arguing they are “draconian” and out of touch with market developments. Robert Elstone, head of the ASX, said the reforms were too broad, bringing in parts of the securities markets – such as the over-the-counter swaps market – that had not been big contributors to the global financial crisis.

Xinhua:

- A Chinese official vows on Thursday to curb the country's production overcapacity and avoid repetitious construction of projects that are less environmental-friendly.

TheMarker:

- Tower Semiconductor Ltd. will return to a full work week after a period of working shortened weeks because of the financial crisis.