Today's Headlines

Bloomberg:

• Global Services Weaken as Europe Slides Into Recession: Economy. Services industries from Asia to Europe cooled last month after the euro-area debt crisis pulled economies including Spain and Italy into recession and damped global growth prospects. The purchasing managers’ index fell to 53.7 in September from 56.3 in August, the National Bureau of Statistics and China Federation of Logistics and Purchasing in Beijing said today. That’s the lowest since at least March 2011. In the euro-area, a gauge slipped to 46.1 last month from 47.2 and a U.K. measure also fell. Readings below 50 indicate contraction.  
• BNP Is Coming Under Pressure With SocGen to Isolate Risk. French lenders’ trading assets have grown to almost match the size of the nation’s economy, making them vulnerable to government efforts to wall off banking risk. Investment-banking units of BNP Paribas SA (BNP), Societe Generale SA, Credit Agricole SA (ACA) and Natixis (KN) SA have 2.05 trillion euros ($2.64 trillion) in trading assets, including bonds, equities and derivatives, data compiled from the banks show. That’s a 21 percent jump in the 12 months to June and a two-year high, just shy of France’s $2.77 trillion gross domestic product.
• U.S. States Teetering on Brink of Fiscal Cliff, Ganeriwala Says. The possibility of automatic federal budget cuts threatens U.S. states’ well-being, even as their revenue recovers, said Manju Ganeriwala, the incoming president of the National Association of State Treasurers. “We’re approaching the cliff, and hopefully it’s a climbing down and not just jumping from the cliff,” Ganeriwala, Virginia’s treasurer, said today at the State & Municipal Finance Conference hosted by Bloomberg Link in New York.
• Oil Falls to Four-Day Low as U.S. Supply Increases, China Slows. Oil fell to its lowest in four days after U.S. crude stockpiles climbed for a fourth week and a measure of China’s economy declined, signaling fuel demand may be faltering in the world’s biggest users of the commodity. Brent oil for November settlement on the London-based ICE Futures Europe exchange dropped $1.28, or 1.2 percent, to $110.29 a barrel. 
• BlackRock(BLK) Leads Firms Poised to Win From Hedge Fund Ads. The firms most likely to benefit first from new rules that would allow hedge funds to conduct wide advertising campaigns aren’t hedge funds. 
• Hewlett-Packard(HPQ) Plunges as Whitman Projects Profit Drop. Hewlett-Packard Co. (HPQ) Chief Executive Officer Meg Whitman forecast fiscal 2013 profit that missed estimates and said a turnaround at the computer maker won’t happen any time soon, sending shares to a more than nine- year low. “The recent financial performance of HP has not been good,” Whitman said at a meeting with financial analysts today. “The single biggest challenge facing Hewlett-Packard has been the multiple changes in CEOs,” she said. “It’s going to take longer to right this ship than any of us would like.”

Wall Street Journal:

• Obama, Romney Look to Win Over the Undecided. After jousting from afar for months, Barack Obama and Mitt Romney will meet Wednesday night in one of their last best chances to sway undecided voters and solidify support among the party faithful. For 90 minutes beginning at 9 p.m. EDT, the presidential candidates will share a stage at the University of Denver, laying out their ideas about domestic issues. The first of three televised presidential debates will heavily emphasize the economy, with both men trying to persuade voters that they understand their struggles and can improve the economic landscape in the next four years.
• Apple(AAPL) Suppliers Now Mass-Producing Tablets Smaller Than Existing iPad -Sources.  
• Tensions Rise as Syrian Shells Land in Turkey. Syrian mortar rounds landed in a Turkish border town on Wednesday, killing five people and wounding at least a dozen, opening a potentially dangerous new phase along the neighbors' increasingly tense shared border. Three Syrian shells fell on Akcakale, a Turkish town in the southern province of Sanliurfa, shortly after 3:30 p.m. local time, sending residents scattering to find cover, said Abdulhakim Ayhan, the town's mayor. 
• Dozens Killed in Syrian Suicide Blasts. Dozens of people were killed and wounded, many of them government soldiers, in multiple car bombings in the northern Syrian city of Aleppo. The attacks bore the hallmarks of al Qaeda-inspired or -linked jihadists, signaling a bloodier phase in the conflict in the city, where opposition rebels have been deadlocked in battle with the regime for nearly three months.

MarketWatch.com:

• Green-energy policy hurts America. Commentary: Environmental policies lead to less wealth.

CNBC:

• California Cities in 'Conga Line' For Fiscal Trouble. Then came Stockton. Mammoth Lakes. San Bernardino. Which California city will go bankrupt next? "There's a lot of them lined up in the conga line," said Marilyn Cohen, CEO of Envision Capital Management. Up next could be the city of Atwater, where civic leaders will vote Wednesday night on declaring a fiscal emergency. They may even lay off a quarter of the town’s 90-person workforce.   
• Fed Easing Has Little Impact So Far: Out of Bullets? "We've been range-bound as everyone digests the information," said Robert Laura, president of Synergos Financial Group in Brighton, Mich. "There's nothing that's going to take us any higher. The headwinds out there are too large for QE to overcome."
• There's Too Much Debt, Here's What to Do: Kyle Bass. Kyle Bass, who famously made a fortune shorting the subprime market before the housing market collapse, is worried that there's too much debt in the world. “We’ve never been here before,” said Bass, founder of hedge fund Hayman Capital, in an interview Wednesday on CNBC'S “Squawk on the Street.” “It has been the largest peacetime accumulation of debt in history.” And that makes investment decisions extremely difficult, Bass said.

Zero Hedge: 

• Noisy ADP Print Declines But Beats Expectations; Just 4000 Manufacturing Jobs Added. (graph) 
•  IMF Brings Good Tidings: Prepare For Another Lost Decade. 
• Services ISM Better Than Expected Even As Employment Slides, Prices Soar. (graph) 
• Ultraluxury NY Real Estate Market Cracking As Legendary 740 Park Duplex Sells 45% Below Original Asking Price.  
• Does Stimulus Spending Work? (video)

Business Insider: 

• These Charts Prove Biden Is Right About The Middle Class Being Buried Over The Last 4 Years. 
• Demand For Apartments Is Slowing As An 'Avalanche' Of Units Hit The Market.  
• South Africa Is On The Brink Of Total Chaos As Strikes Are Leading To Fuel And Cash Shortages.  
• Why You Should Be Outraged About The Ruling To Keep The NDAA Indefinite Detention Clause In Effect. That the NDAA is fully enforceable right now is scary enough, but the details of the ruling are truly bothersome to those that have been following the rulings in the case.  
• Why Everyone Is Losing Hope In Solar Power.   
• CONFIRMED: A Top Russian General Was Killed By Syrian Rebels While Advising Assad. 

WeKnowMemes: 

• The US Budget Explained In Simple English.

Reuters: 

• Copper falls as weak Europe, China data raises demand fears. Copper slipped on Wednesday, ending four days of gains, as weak data from Europe and China reinforced concerns about the outlook for industrial metal demand despite recent efforts by central banks to stimulate economic growth. 
• Greek hopes fade for quick deal on austerity cuts. Greece's hopes of striking a deal with its lenders before euro zone finance ministers meet next week dimmed on Wednesday, when officials admitted the two sides disagree on how much the economy will contract in 2013 - a key figure in their calculations. 
• Troika sees Greek economy slumping by 5 pct in 2013- Greek source.

Telegraph:

• Multiplying Europe's fiscal suicide (technical).
• Portugal to raise taxes to meet austerity targets. Portugal has announced a raft of new cuts designed to reduce the country's debt load, as finance minister Vitor Gaspar unveiled sweeping changes that will see the average income tax rate rise by 2pc.

Bear Radar

Style Underperformer:

• Large-Cap Value -.11%

Sector Underperformer:

• 1) Education -2.52% 2) Oil Service -2.03% 3) Computer -1.85%
  

Stocks Faling on Unusual Volume:

• QLIK, CBEY, MRCY, DELL, HPQ, SSL, RNF, CAJ, ARI, PCS, BGS, HPY, RNF, SSL, PCL, FIRE, HII, ISIS, PSSI, ERJ, MON, SUSS, KRA, EXXI, KSU, SYT, BJRI, POT, CLB, ESI, DX, FNP and SPN
  

Stocks With Unusual Put Option Activity:

• 1) HCA 2) PCS 3) HPQ 4) GPS 5) CCJ
  

Stocks With Most Negative News Mentions:

• 1) POT 2) XRTX 3) DELL 4) XOM 5) PBR
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth +.36%

Sector Outperformers:

• 1) Homebuilders +2.87% 2) Airlines +2.24% 3) Tobacco +.98%
  

Stocks Rising on Unusual Volume:

• SRPT, OCN, BKD, NFLX, LCC, ALR, ARUN, SPW, DAL and FDO

Stocks With Unusual Call Option Activity:

• 1) DLPH 2) PCS 3) SRPT 4) LNC 5) EWY
  

Stocks With Most Positive News Mentions:

• 1) JBLU 2) LCC 3) ITRI 4) STX 5) NFLX

Charts:

• ETFs Rising on Unusual Volume 
• Stocks Rising on Unusual Volume

Wednesday Watch

Evening Headlines
Bloomberg: 

• Merkel Emulates Kohl German Unity Turning Euro Crisis Into Votes. Three days before East and West Germany reunited in 1990, Angela Merkel made an acquaintance that was to put her on the path to power. An East German scientist propelled into politics by the fall of the Berlin Wall and the communist regime’s collapse, Merkel wangled an audience with Helmut Kohl at a party event in Hamburg. Within four months, Kohl had ridden German reunification to a landslide third election victory and Merkel secured a post in his Cabinet. Just as Kohl knew what Germans on both sides of the border wanted when they united 22 years ago today, Merkel is tuned in to voters who balk at paying the price of the united Europe Kohl brought about. While her peers in France, Italy and Spain have been voted out in the three years since the debt crisis emerged in Greece, Merkel’s ability to channel domestic public opinion paired with a still-expanding economy led polling company Forsa to conclude that she looks unbeatable before 2013 elections. “The crisis makes people rally behind Merkel,” Gerd Languth, a historian and professor of politics at the University of Bonn whose 2005 biography of the chancellor documents her meeting with Kohl, said by phone. “People see her as being on top of the issues and the only one who can solve the problems.” 
• European Bank Capital Results Overtaken by Tougher Global Rules. The Europe Union’s top bank regulator will release figures today detailing how lenders met a 114.7 billion-euro ($148.5 billion) capital target, as the bloc is criticized for failing to properly implement tougher global standards. European banks boosted their capital reserves by 94.4 billion euros by a June deadline, the European Banking Authority has said in July. The increase is part of a plan to boost investor confidence in the bloc’s financial system and protect lenders from the decline in value of sovereign bonds.
• ADB Cuts Developing Asia’s Growth, Inflation Forecasts on China. The Asian Development Bank cut the region’s inflation and growth forecasts for this year and next, as Europe’s sovereign debt crisis and fiscal contraction in the U.S. reduces expansions from China to India. The Manila-based lender forecast Asia excluding Japan will expand 6.1 percent this year, according to the Asian Development Outlook 2012 Update report released today, compared with a July estimate of 6.6 percent and an April prediction of 6.9 percent. It also reduced the region’s inflation projection to 4.2 percent from 4.4 percent. “Deceleration in the region’s two giants -- the People’s Republic of China and India -- and in other major exporting economies is tempering earlier optimism,” the ADB said. “The ongoing sovereign debt crisis in the euro area and the looming fiscal cliff in the U.S. pose major risks to the outlook.”
• Iron Ore Heads for Longest Bear Market in 20 Years: Commodities. Iron ore, the commodity most leveraged to China’s growth and Australia’s biggest export earner, is heading for the longest bear market in 20 years. Vale SA (VALE3), Rio Tinto Group and BHP Billiton Ltd. (BHP), which control about two-thirds of seaborne iron ore supply, are spending about $47 billion on new and bigger iron ore mines from Brazil to Australia. The new cargoes are set to reach the global market just as China changes gear to lower growth expectations, following what may become its weakest performance since 1990. “We’re already seeing the beginning of the end of the first phase of economic development in China,” Alberto Calderon, chief commercial officer of Melbourne-based BHP, which is spending about $1 billion a month on its ore mines in Australia, said last month at a conference in Canberra. “The pace of demand for iron ore from China has slowed down by more than half.” 
• JPMorgan(JPM) Rivals Face Billions in Damages After MBS Case. JPMorgan Chase & Co. (JPM)’s rivals may face government lawsuits claiming tens of billions of dollars in damages tied to investor losses on mortgage bonds after New York’s attorney general filed a fraud lawsuit against the nation’s biggest bank by assets. A state-federal task force set up this year to investigate misconduct in the bundling of mortgage loans into securities will bring other cases, according to New York Attorney General Eric Schneiderman. Investor losses in the JPMorgan case alone will be “substantially more” than the $22.5 billion cited in his complaint, he said. “We do expect this to be a matter of very significant liability, and there are others to come that will also reflect the same quantum of damages,” Schneiderman said in an interview yesterday with Bloomberg Television’s Erik Schatzker. “We’re looking at tens of billions of dollars, not just by one institution, but by quite a few.” 
• Samsung Targets iPhone 5 in Latest Patent Lawsuit. (video) 
• Nickel Surplus May Expand to Five-Year High on New Mine Projects. A global nickel surplus may expand for a third year to the highest level since 2008 as supply from new mining projects outweighs China’s demand growth, Japan’s top producer said. Supply will likely exceed demand by 60,000 metric tons in 2013, said Toru Higo, Sumitomo Metal Mining Co. (5713)’s general manager of nickel sales and raw materials. Supply outstripped demand by 40,000 tons this year and 22,000 tons in 2011, he said.  
• U.S. Casinos Won’t Get Macau Licenses, Caesars CEO Says. The government of Macau won’t issue any licenses for new U.S. companies to operate casinos in the world’s largest gambling market, Gary Loveman, chief executive officer of Caesars Entertainment Corp. (CZR), predicted. Loveman, in a presentation yesterday to analysts and investors in Las Vegas, said he has spoken at length with Chinese officials and that his company was unlikely to obtain a concession to operate a casino in Macau, the only part of China where casino gambling is legal.

Wall Street Journal: 

• How ECB Chief Outflanked German Foe in Fight for Euro.  
• Lawmakers Say Libya Security Pleas Were Rejected.
• Freddie's Foreclosure Plan Hits Roadblock.
• Agricultural Bank of China is among big Chinese lenders that have canceled plans to participate in World Bank and IMF meetings in Tokyo next week amid tensions between the Asian neighbors. 
• Romney's Middle-Class Tax Sale. How the Republican can win the debate he's now losing by default.

 CNBC: 

• China Services PMI Falls to 53.7 as New Orders Soften. China's normally robust services sector weakened sharply in September, as slow growth in manufacturing finally began to feed through to the rest of the economy, an official survey showed on Wednesday. The official purchasing managers' index (PMI) for the services sector fell to 53.7 in September from 56.3 in August, weighed by lackluster new orders, according to the latest survey from the National Bureau of Statistics. 
• The ‘Fiscal Cliff’—the Grinch That Steals Christmas?

Zero Hedge:

• Global Manufacturing PMI, Global Stocks. (graph) 
• US Debt Soars To $16,159,487,013,300.35, +$93 Billion; Or How To Kick Off Fiscal 2013 With A Bang. (graph)
• European Banks Still Treat Their Sovereign Debt Holdings As Risk-Free, BIS Finds.
• Troika Target Of Truculence As Greek Tax Evaders Terrified.

Business Insider:

• 3 Huge Risks For Equities In Q4.
• California Has A PMI Report And It Just Took A Horrifying Nose Dive. California has its own manufacturing PMI, the Inland Empire Report on Business, sponsored by San Bernardino and Riverside Counties in Southern California, commonly called the Inland Manufacturing Index. After the recent high of 60.8 in March—above 50 indicating growth—it zigzagged down to 52 in August, and then in September, it crashed to 43.4—the lowest level since September 2009. All five key components were weak. And three fell off a cliff: Production tumbled from 55 in August to 37.5 in September; New Orders—a harbinger of pain to come—fell from 52 to 37, and Exports fell from 51.1 to 35.7. “Disturbing,” the report called it. 
• Court Says Obama Administration Can Still Detain Anybody Indefinitely. 
• Obama Administration Says It's Legal To Track Citizens' Every Movement Without A Warrant.

TheBlaze: 

• Oops: Biden Admits Middle Class Has Been Buried ‘Over the Last Four Years’. (video)

National Journal:

• Obama, Romney Tied Among Likely Voters. President Obama and Mitt Romney are deadlocked among likely voters as they prepare to square off in their first presidential debate, according to the latest United Technologies/National Journal Congressional Connection Poll. Obama and Romney each pulled in 47 percent support in the poll among likely voters.

Reuters: 

• U.S. had early indications Libya attack tied to organized militants. Within hours of last month's attacks on U.S. diplomatic facilities in Benghazi, Libya, President Barack Obama's administration received about a dozen intelligence reports suggesting militants connected to al Qaeda were involved, three government sources said. Despite these reports, in public statements and private meetings, top U.S. officials spent nearly two weeks highlighting intelligence suggesting that the attacks were spontaneous protests against an anti-Muslim film, while playing down the involvement of organized militant groups.

MNI:

• China's consumer sentiment declined in September from August, amid a slowing economy and a lack of stimulus measures from govt. The index dropped for a third consecutive month. Consumers' aggregate view of current conditions fell to 91.3 in September from 95.0 in August.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are -.50% to +.25% on average.
• Asia Ex-Japan Investment Grade CDS Index 133.50 -3.0 basis points.
• Asia Pacific Sovereign CDS Index 114.25 unch.
• FTSE-100 futures -.07%.
• S&P 500 futures -.24%.
• NASDAQ 100 futures -.13%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (FDO)/.75
• (RPM)/.64
• (MON)/-.43
• (MAR)/.40

Economic Releases
8:15 am EST

• The ADP Employment Change for September is estimated at 140K versus 201K in August.

10:00 am EST

• ISM Non-Manufacturing for September is estimated to fall to 53.4 versus 53.7 in August.

10:30 am EST

• Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,500,000 barrels versus a -2,446,000 barrel decline the prior week. Distillate supplies are expected to fall by -400,000 barrels versus a -482,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -500,000 barrels versus a -481,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.1% versus a -1.5% decline the prior week.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The weekly MBA mortgage applications report, Eurozone services PMI, Eurozone Retail Sales, (HPQ) analyst day and the CSFB Credit Products Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Slightly Lower into Final Hour on Rising Global Growth Fears, US Fiscal Cliff Worries, Earnings Jitters, Restaurant/Retail Sector Weakness

Broad Market Tone:

• Advance/Decline Line: Lower
• Sector Performance: Most Sectors Declining
• Volume: Below Average
• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• VIX 16.39 +.43%
• ISE Sentiment Index 154.0 +4.76%
• Total Put/Call .69 -20.69%
• NYSE Arms 1.31 +30.60%

Credit Investor Angst:

• North American Investment Grade CDS Index 98.18 -.21%
• European Financial Sector CDS Index 195.33 bps -2.73%
• Western Europe Sovereign Debt CDS Index 145.32 -.19%
• Emerging Market CDS Index 218.45 -.07%
• 2-Year Swap Spread 14.25 +1.0 basis point
• TED Spread 26.75 -.75 basis point
• 3-Month EUR/USD Cross-Currency Basis Swap -26.75 +.75 basis point

Economic Gauges:

• 3-Month T-Bill Yield .09% +1 basis point
• Yield Curve 138.0 unch.
• China Import Iron Ore Spot $104.20/Metric Tonne unch.
• Citi US Economic Surprise Index 10.90 -.1 point
• 10-Year TIPS Spread 2.48 +6 basis points

Overseas Futures:

• Nikkei Futures: Indicating -13 open in Japan
• DAX Futures: Indicating -3 open in Germany

Portfolio:

• Slightly Higher: On gains in my Biotech/Medical sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and covered some of my (EEM) short
• Market Exposure: Moved to 50% Net Long

Today's Headlines

Bloomberg: 

• Spain Prime Minister Rajoy Says Bailout Request Is Not Imminent. Spanish Prime Minister Mariano Rajoy said he has no plans to request a bailout soon, fending off mounting speculation that a bid was near. Asked at a press conference in Madrid today if a bailout request was imminent, Rajoy said: “No.” Rajoy is weighing the terms of a Sept. 6 proposal by the European Central Bank President to buy bonds of cash-strapped nations including Spain if they make for a formal aid request from the euro region’s government-run rescue funds. Reuters news agency yesterday reported that Spain is ready to seek a bailout as soon as this weekend. As Rajoy faces unrest on the streets of Madrid over budget cuts and a separatist movement in Catalonia, leaders of the 17- nation euro area are confronting a tougher approach from the German-led pro-austerity bloc and talks in Athens over keeping emergency aid on track. The first of three summits in the next three months is set for Oct. 18-19.
• Weber Says Euro Crisis to Persist as ECB Fails to Bring Calm. UBS AG Chairman and former European Central Bank Governing Council member Axel Weber said the euro region’s festering debt crisis will “continue to linger” as the ECB fails to ease market disquiet and volatility. “While many expect that the ECB’s strong action would bring stability to financial markets, the risk is that the pattern of short-term rallies and long-term uncertainty will stay with us for some future,” Weber said today at an investment conference in Moscow organized by VTB Capital. The program of unlimited bond purchases unveiled last month by ECB President Mario Draghi has sought to stamp out the crisis by limiting government borrowing costs and giving debt-ridden nations the chance to fix their economies and preserve the euro. Weber, who during his tenure at the ECB opposed the central bank’s previous bond-buying plan, predicted the monetary union will overcome the crisis even as there won’t be a “quick fix.” “The underlying fundamental perspective is not great at the moment,” Weber said. “Austerity programs which are badly needed to restore market confidence and create fiscal room to maneuver will take a toll on the economy. So this will be a rough patch that Europe is going through, but it will get better.” 
• Popular Defying Oliver Wyman Tests Allianz’s Spain Appetite. Banco Popular Espanol SA (POP) is defying the findings of Spain’s bank stress tests as it seeks new money from Allianz SE (ALV) and other investors to plug a capital shortfall. The stress test by consultant Oliver Wyman showed Popular had a capital deficit of as much as 3.22 billion euros ($4.15 billion) and would earn 5.8 billion euros in pre-provision profit from 2012 to 2014 or 4.2 billion euros in its worst-case scenario. Popular, Spain’s sixth-largest lender by assets, said yesterday it would have an operating profit of 7.2 billion euros over that period as it unveiled plans for a share sale of as much as 2.5 billion euros to boost capital.   
• U.K. Would Benefit From Haven Flows in Euro Breakup, Bootle Says. Britain may initially benefit from capital flows in the event of a euro-area breakup as investors seek safety from turmoil in the currency region, said former U.K. Treasury adviser Roger Bootle. “We would find the U.K. being regarded as a safe haven with continued capital inflows for a while,” Bootle, founder of Capital Economics Ltd., said in an interview at an event in London today. “But we’re certainly not a safe haven in terms of the real economy -- we would be one of the hardest hit of all.”
• U.S. Hot-Rolled Steel Prices May Extend Decline Amid Weak Demand. The price of hot-rolled coil steel in the U.S. may drop to as low as $530 a metric ton by year-end amid weak demand as manufacturers hold off on purchases until after the presidential election, according to Jefferies & Co. "A lot of projects and other expenditures that were earlier planned by companies have been put on hold because of uncertainty ahead of the elections and the fiscal cliff," Luke Folta, an analyst at Jefferies, said today in an interview. "Demand has weakened across all key markets." 
• Banks Face Worst Equities Trading Since 2006. Wall Street banks’ equities-trading units aren’t getting much relief from the strongest stock rally since 2009, as sinking volume and already thin margins threaten to make their annual performance the worst in six years. Third-quarter equities-trading revenue probably fell 14 percent from the same period in 2011, the fifth straight drop of more than 8 percent, according to estimates by Kian Abouhossein, a JPMorgan Chase & Co. analyst. Full-year revenue at the five largest U.S. investment banks may be the lowest since 2006, UBS AG’s Brennan Hawken wrote in a Sept. 19 note to clients.  
• AIG(AIG) Says Oversight Panel Weighing Systemic Risk Label. American International Group Inc. (AIG) said a U.S. panel told the insurer it’s under consideration to be labeled a potential risk to the financial system, the first non-bank to report such notification in a process that could lead to tighter capital rules. The Financial Stability Oversight Council informed AIG of its status, the New York-based insurer said today in a statement. The council said last week that it voted to advance “certain” non-bank financial companies to a third stage of review for possible designation as a systemically important financial institution, without publicly identifying the firms. 

Wall St. Journal: 

• WSJ Guide to First Romney-Obama Debate.

Fox News:

• Diplomats asked repeatedly for more security before Libya attack, lawmakers claim. U.S. diplomats in Libya repeatedly asked the Obama administration for more security in Benghazi in the run-up to the Sept. 11 attack on the consulate but were "denied these resources," two congressional lawmakers said. House oversight committee Chairman Darrell Issa, R-Calif., and Rep. Jason Chaffetz, R-Utah, pressed Secretary of State Hillary Clinton for more information on those requests and other concerns in a letter Tuesday. They detailed a string of attacks and other security incidents in Benghazi starting in April, and asked the State Department what measures it took to address the threat. They claimed officials have told the House Oversight and Government Reform Committee of "repeated requests" for additional security. "Based on information provided to the Committee by individuals with direct knowledge of events in Libya, the attack that claimed the Ambassador's life was the latest in a long line of attacks on Western diplomats and officials in Libya in the months leading up to September 11, 2012," they wrote. "In addition, multiple U.S. federal government officials have confirmed to the Committee that, prior to the September 11 attack, the U.S. mission in Libya made repeated requests for increased security in Benghazi.  The mission in Libya, however, was denied these resources by officials in Washington."

CNBC:

• Voters Say Presidential Debates Will Be Key: Poll. Voters say the presidential debates will be important in deciding whom to vote for in this year’s election, according to a new NBC-Wall Street Journal poll released Tuesday. (Read More: Obama-Romney Debate Faces Off-Script Challenge) The poll found that voters say the importance of this year’s debate is greater than it was in 2004 or 2000. That may yet indicate some room for movement in the race: Twenty-two percent of those surveyed said the upcoming debates will be “extremely important,” and 16 percent said “quite important.”
• What a Post-'Fiscal Cliff' Deal Will Cost US Households.
• Affluent Plan to Spend Less If Obama Wins.

Zero Hedge: 

• The ECB - EUR22 Trillion Is Missing.
• Sam Zell On "Class Warfare Crap", QE3 Unreality, And Why Everything Is Mispriced Due To The Fed.
• China Just Killed All "China Bails Out Europe" Rumors For Good.
• This Is Why High Frequency Trading Will Never Go Away.
• Dancing On The Grave Of Keynesianism.

Business Insider:

• Here's The Massive Presentation On REITs That Bill Ackman Delivered At The Value Investing Congress. 
• Chipotle(CMG) Is Getting SLAMMED After David Einhorn Reveals He Is Short The Stock.
• Dylan Grice Writes His Most Negative Note Ever: 'I Am More Worried Than I Have Ever Been'.
• Bleak Photos Capture The Fall Of Detroit.
• Jon Stewart Slams The Obama Administration For Contradicting Itself Over And Over On The Libya Attack. (video)
• French Entrepreneurs Launch Online Protest Against Hollande's Capital Gains Tax Plans.
• FORGET ALL THE HOUSING COMEBACK TALK: Here's Why The Market Is Still A Disaster.
• The Fed Just Doubled-Down On A Plan That Led Us Into The Financial Crisis.

Reuters:

• Spain jobless rate spikes again as tourist season ends. Spain's jobless rate rose further in September as services sector layoffs accelerated at the end of a busy summer tourist season, suggesting one in four of the country's workforce is now unemployed. Tuesday's Labour Ministry data showed the jobless rate rose by 1.7 percent to leave 4.7 million people out of work. "There is a certain slowing down in the rate of increase in unemployment but the negative side is that jobs are still disappearing," said Estefania Ponte, head of economy at trading house Cortal Consors. The figure had also risen in August after it fell during the summer season. She said Tuesday's monthly figures suggested the rate of unemployment in Spain - already the highest in the European Union - would likely have hit 25 percent in the third quarter. 
• U.S. officials see more financial crisis cases after JPMorgan suit. Federal and state officials pledged on Tuesday to bring more cases against misconduct that fueled the financial crisis, after New York sued JPMorgan Chase & Co late Monday over mortgage-backed securities packaged and sold by Bear Stearns. The case was filed by New York Attorney General Eric Schneiderman, and was the first action to come from a federal-state working group created earlier this year to bring such cases, roughly four years after the peak of the crisis. 
• Iran's Ahmadinejad says Syria crisis may engulf region. Iran's President Mahmoud Ahmadinejad on Tuesday warned that hostilities in Syria could engulf the region and accused some Syrians of trying to use their country's conflict to settle scores with Tehran. 
• US gasoline demand falls in 2 weeks to Sept 28-MasterCard. U.S. retail gasoline demand fell over the past two weeks and continued a downward year-on-year trend, according to the bi-weekly SpendingPulse report from MasterCard released on Tuesday. Gasoline use in the world's top oil consumer dropped 0.9 percent over the two weeks ending Sept. 28, compared with the same period last year, MasterCard said. Demand dipped by 1.1 percent during the week to Sept. 28 and 0.8 percent in the week to Sept. 21 when compared with year-ago levels.
• Portugal finmin likely to detail new austerity steps. Portugal's Finance Minister Vitor Gaspar will hold a press conference on Wednesday on the country's bailout plan, when he is expected to detail fresh austerity measures. The centre-right government has been looking for alternative ways to meet budget goals under the 78-billion-euro bailout since it was forced to back down on a plan to hike social security taxes, which sparked a backlash among many Portuguese.
• US groups fear Mexican trade war over Obama tomato move. U.S. business groups said on Tuesday they were worried about a damaging trade war with Mexico if President Barack Obama's administration follows through on a preliminary decision to end a 16-year-old tomato trade agreement. They also expressed concern that last week's Commerce Department decision was politically motivated to sway voters in Florida, the second largest U.S. tomato producer and one of a handful of battleground states expected to play a decisive role in the Nov. 6 presidential election.
• GM(GM), Ford(F) see slower truck sales as Toyota gains. General Motors Co, the largest U.S. automaker, posted a small gain in September U.S. sales as demand for passenger cars offset a drop in pickup trucks, while Japanese automaker Toyota Motor Corp reported a large sales increase. 
• Iran to enrich uranium to 60 pct if nuclear talks fail - MP. Iran would enrich uranium up to 60 percent purity if negotiations with major powers over its nuclear programme fail, an Iranian lawmaker said on Tuesday, in comments that may add to Western alarm about Iranian intentions.

Telegraph: 

• Debt crisis: troika demand even tougher austerity on stricken Greece. Greece's international creditors are demanding the imposition of even tougher austerity measures despite the delivery this week of Antonio Samara’s hard-won €13.5bn package of cuts. 
• EU plans curbs on bank risk-taking. Risky activities such as proprietary trading will have to be separated from safer operations under EU proposals for banks published today.
• PIMCO: America could 'resemble Greece' before 2020. America could begin to resemble Greece before the turn of the decade if it does not cut spending and raise taxes to tackle its debt, according to Bill Gross, the head of the world's largest bond fund.

Europa:

• Prime Minister Mariano Rajoy told regional leaders from his People's Party that he won't request a bailout for Spain this weekend.