As we warned in May 2013... Gross Exposes $42 Trillion Bond Market’s Key Flaw in Exit (BBG).... hint: no liquidity WTI Crude Slips Below $90 for First Time in 17 Months (BBG) Traders Thank Fed for Once-in-Decade Surge in Profit (BBG) Islamic State committing 'staggering' crimes in Iraq: U.N. report (Reuters) Philippine Islamist militants threaten to behead German on October 17 (Reuters) Draghi’s Buying Spree for the ECB Might Start Modestly (BBG) Russian Officials Say No Plans for Capital Controls (WSJ) Indians Join the Wave of Investors in Condos and Homes in the U.S. (NYT) Leader of Mexican drugs cartel captured (FT) Dallas Ebola patient vomited outside apartment on way to hospital (Reuters) Goldman chat room a message to Wall St (FT) Angry former workers: Angry Birds Maker Rovio to Cut up to 130 Jobs in Finland (WSJ) Steven Cohen Urges Court to Dismiss Ex-Wife’s Fraud Suit (BBG) As PIMCO bleeds assets, Gross shows risk of star culture (Reuters) Caltech Leads World University Rankings for Fourth Year (BBG) U.S. Apartment Vacancies Rise for First Time Since 2009 (BBG) Commodity ETF Outflows Reach Highest This Year on Supply (BBG) China backs Hong Kong leader CY Leung over tear gas (FT) Overnight Media Digest WSJ * Secret Service Director Julia Pierson resigned after coming under intense pressure following an embarrassing breach of security at the White House two weeks ago. (http://on.wsj.com/10m0Iwa) * Health authorities are monitoring for symptoms of Ebola in at least a dozen people who came into contact with a Liberian man before he was hospitalized in Dallas, a move to prevent the virus's spread in the U.S. (http://on.wsj.com/1rGPsmT) * American consumers are buying new cars and trucks at the strongest pace in years, offsetting car makers' troubles elsewhere and leading the biggest U.S. auto maker to forecast fat profits ahead. (http://on.wsj.com/1sO9y28) * The Coca-Cola Co, bowing to pressure from lead investor Warren Buffett, announced changes to its executive pay plan that will result in fewer stock awards. (http://on.wsj.com/1E2LU4W) * Pacific Investment Management said investors pulled $23.5 billion from the Pimco Total Return fund in September, the firm's largest-ever monthly outflow, with the largest amount on the day founder Bill Gross abruptly quit. (http://on.wsj.com/1sOcig7) * Bank of America Corp's board voted to make Brian Moynihan chairman as well as chief executive, capping a comeback for a banker who survived the regulatory scrutiny and huge losses that followed the financial crisis. (http://on.wsj.com/1rGPsn5) FT * Some of the world's largest banks have stopped contributing to many of the financial benchmarks to avoid potential litigation, as a result of the Libor and foreign exchange rate rigging scandal. * German ecommerce company Rocket Internet AG priced its shares at 42.50 euros ($53.6265). The share listing is expected to raise gross proceeds of 1.4 billion euros and give it a market value of 6.7 billion euros. * France and Italy have increased their defiance of EU budget targets as the two countries go into talks relating to their public finances with their European partners in the coming weeks. * UK Prime Minster David Cameron vowed to lower income taxes for 30 million people and keep a competitive corporate tax policy. These tax cuts will cost 7.2 billion pounds a year when fully implemented in 2020. * Google Inc announced it would stop publishing snippets of German publisher Axel Springer's articles in its search results. This action follows a dispute between both the groups over intellectual property rights. (1 US dollar = 0.7925 euro) NYT * Pimco's flagship fund, once billed as the world's biggest bond fund, is shrinking fast. In September, investors pulled $23.5 billion from the Pimco Total Return Fund, with the largest redemptions coming on Sept. 26, the day Bill Gross stunned Wall Street by resigning from the firm he co-founded more than 40 years ago. (http://nyti.ms/1rNUmjx) * Coca-Cola Co, facing sharp shareholder criticism of its executive pay, on Wednesday announced changes to the compensation plan that set off the squall. (http://nyti.ms/10lZYXP) * Federal and state authorities, a group that includes prosecutors in New York, Alabama and Texas, are zeroing in on the most powerful, and arguably the least regulated, rung of the subprime auto loan chain, used-car dealerships, according to people briefed on the investigations. Already, they have found hundreds of fraudulent loans that together total millions of dollars. (http://nyti.ms/1vz65mf) * A federal bankruptcy judge on Wednesday upended the widely held belief that public workers' pensions have a special status in California that makes them impossible to cut, further chipping away at the idea that pensions are sacrosanct in a municipal bankruptcy. (http://nyti.ms/1uf22vX) * David Neil, senior Justice Department Prosecutor said he planned to depart the government at the end of the week, capping an eight-year Justice Department career. (http://nyti.ms/1ps2MIG) * The proxy advisory firm Institutional Shareholder Services amplified calls for Allergan Inc's board to hold off from making an all-cash acquisition that would scuttle an existing takeover offer from Valeant Pharmaceuticals International Inc and Pershing Square Capital Management. (http://nyti.ms/1oAB502) * Bank of America Corp said on Wednesday that Brian Moynihan, its chief executive, would assume the additional role of chairman. (http://nyti.ms/1oCs5HM) * Relational Investors, one of the most prominent activist investors, is planning to start a new fund that will give more day-to-day control to the firm's younger executives, a person briefed on the matter said on Wednesday. (http://nyti.ms/1rxuRDT) * The German technology company Rocket Internet priced its initial public offering at the top of its price range at 42.5 euros ($53.8) a share on Wednesday, valuing the company at 6.7 billion euros, or roughly $8.4 billion. (http://nyti.ms/1tj1QYh) Canada THE GLOBE AND MAIL ** A federal cyberbullying bill, C-13, that includes controversial new surveillance powers - and immunity for telecommunications companies that voluntarily hand over private data to police - has taken another step toward becoming law, despite a recent Supreme Court ruling that critics say is at odds with the bill. (http://bit.ly/1r0pYND) ** Canada's largest school board is joining a handful of other academic institutions in taking steps to sever its ties to a language and culture program controlled by the Chinese government. A Toronto District School Board committee voted on Wednesday evening to terminate the Confucius Institute. All but one member on the planning and priorities committee voted in favour of terminating the accord. (http://bit.ly/1vzP5wd) ** Tough new federal anti-corruption rules risk disqualifying several key government suppliers, jeopardizing government plans to buy items ranging from ships and fighter jets to computer systems. At least five foreign multinationals - BAE Systems PLC, Siemens AG, Alcatel-Lucent SA, Tyco International Inc and Hewlett-Packard Co have been convicted of crimes overseas and consequently face possible 10-year bans from doing business with Ottawa. (http://bit.ly/1mU12w3) NATIONAL POST ** The Stephen Harper government plans further changes to its oft-maligned veterans charter, hoping to take the political sting out of complaints by ex-soldiers promising to campaign against them in the next election. (http://bit.ly/1psCwOk) ** As the debate over the Scarborough subway rages in the Toronto mayoral race, Ontario's transportation minister was forced on Wednesday to clarify again that the Liberal government is "moving forward" with the transit project, after the finance minister refused to commit to such a position. (http://bit.ly/1tjwmkL) ** The Bank of Canada will be forced to renew warnings of the possibility for higher interest rates in order to halt a "bubble" from forming in the housing market, according to Pacific Investment Management Co Managing Director Ed Devlin. (http://bit.ly/1thjewB) Corporate Finance * Colombian Natural Resources, owned by investment bank Goldman Sachs Group Inc, will re-start coal exports and re-establish mining operations after the government helped broker a deal for its use of Drummond's Caribbean Sea port, according to government and industry sources. * China Investment Corp and AVIC Capital Co Ltd have ended talks to acquire Avolon Holdings Ltd (IPO-AVOL.N), making it likely that the aircraft leasing company will pursue an initial public offering, according to people familiar with the matter. * Amazon.com Inc's India unit plans to sell packaged food and beverages, starting mid-October, according to a person with direct knowledge of the launch. (bit.ly/1BAIAtJ) * Hochtief AG, the German building group controlled by Spain's ACS, is close to the sale of its Formart real estate business, two sources familiar with the matter told Reuters on Wednesday. Fly On The Wall Pre-market Buzz ECONOMIC REPORTS Domestic economic reports scheduled for today include:Jobless claims for week of September 27 at 8:30--consensus 297KFactory orders for August at 10:00--consensus down 9.3% ANALYST RESEARCH Upgrades Autodesk (ADSK) upgraded to Neutral from Sell at CitigroupAutodesk (ADSK) upgraded to Outperform from Market Perform at CowenAutodesk (ADSK) upgraded to Outperform from Neutral at Credit SuisseBank of America (BAC) upgraded to Buy from Neutral at UBSBarrick Gold (ABX) upgraded to Hold from Sell at CanaccordElectronics for Imaging (EFII) upgraded to Buy from Neutral at CitigroupEncana (ECA) upgraded to Buy from Hold at Deutsche BankEquity One (EQY) upgraded to Neutral from Sell at CitigroupFossil (FOSL) upgraded to Buy from Hold at ISI GroupGentex (GNTX) upgraded to Outperform from Market Perform at Wells FargoIntercontinentalExchange (ICE) upgraded to Buy from Hold at Deutsche BankKinder Morgan (KMI) upgraded to Outperform from Market Perform at Wells FargoMattel (MAT) upgraded to Market Perform from Underperform at BMO CapitalNASDAQ (NDAQ) upgraded to Buy from Hold at Deutsche BankPandora (P) upgraded to Buy from Hold at TopekaPreferred Bank (PFBC) upgraded to Outperform from Market Perform at Raymond JamesPulteGroup (PHM) upgraded to Neutral from Sell at GoldmanTime Warner (TWX) upgraded to Hold from Sell at TopekaTwitter (TWTR) upgraded to Overweight from Neutral at JPMorgan Downgrades A10 Networks (ATEN) downgraded to Neutral from Buy at CitigroupEnphase Energy (ENPH) downgraded to Neutral from Buy at BofA/MerrillFrancesca's (FRAN) downgraded to Hold from Buy at CanaccordIntuit (INTU) downgraded to Underweight from Equal-Weight at EvercoreJPMorgan (JPM) downgraded to Neutral from Buy at UBSMotorola Solutions (MSI) downgraded to Neutral from Buy at CitigroupNVR (NVR) downgraded to Sell from Neutral at GoldmanONEOK (OKE) downgraded to Neutral from Overweight at JPMorganPNC Financial (PNC) downgraded to Hold from Buy at JefferiesTower International (TOWR) downgraded to Market Perform from Outperform at Wells FargoU.S. Steel (X) downgraded to Hold from Buy at KeyBancWebMD (WBMD) downgraded to Hold from Buy at Stifel Initiations Delek US (DK) initiated with an Outperform at RBC CapitalHanesbrands (HBI) initiated with an Outperform at Credit SuisseHollyFrontier (HFC) initiated with a Sector Perform at RBC CapitalInsys Therapeutics (INSY) initiated with an Outperform at RBC CapitalMadison Square Garden (MSG) initiated with a Neutral at JPMorganMarathon Patent Group (MARA) initiated with a Buy at LadenburgMarathon Petroleum (MPC) initiated with a Top Pick at RBC CapitalPatent Properties (PPRO) initiated with a Buy at LadenburgPhillips 66 (PSX) initiated with a Sector Perform at RBC CapitalPly Gem (PGEM) reinstated with a Neutral at Credit SuisseRightside Group (NAME) initiated with a Buy at B. RileyRubicon Project (RUBI) initiated with a Buy at B. RileySalesforce.com (CRM) initiated with a Neutral at DA DavidsonSplunk (SPLK) initiated with a Buy at StifelStillwater Mining (SWC) initiated with a Neutral at GoldmanTesoro (TSO) initiated with an Outperform at RBC CapitalValero (VLO) initiated with an Outperform at RBC CapitalVaronis (VRNS) initiated with an Outperform at JMP Securities COMPANY NEWS BofA (BAC) CEO Moynihan elected Chairman of the Board of DirectorsStarboard Value raises stake in RealD (RLD) to 9.9% from 9.1%, proposes $12 buyoutNFL, DirecTV (DTV) extend NFL Sunday Ticket in new multi-year dealArotech (ARTX) CEO Robert S. Ehrlich steps down replaced by Steven EssesDollar General (DG) extends tender offer to acquire Family Dollar to Oct. 31EMC (EMC) names Zane Rowe CFO Liquidity Services (LQDT) announces business realignment, new senior leadershipNetflix (NFLX) signs deal deal with Adam Sandler for four feature filmsNewLink Genetics (NLNK) terminates CFO Gordon LinkQihoo 360 (QIHU) announces $200M share repurchase planTesla (TSLA) CEO says time to 'unveil D, something else' EARNINGSCompanies that beat consensus earnings expectations last night and today include:Global Payments (GPN), McCormick (MKC), National American University (NAUH) Companies that missed consensus earnings expectations include:Park Electrochemical (PKE) Global Payments (GPN) ups FY15 cash EPS view to $4.65-$4.75, consensus $4.60Darden (DRI) sees Q2 EPS in upper end of 26c-28c, consensus 26cMcCormick (MKC) raises FY14 adjusted EPS view to $3.30-$3.37, consensus $3.28Agrium (AGU) sees Q3 EPS 45c-55c, consensus 68cPTC Inc. (PTC) sees Q4 revenue at or above high end of $340M-$355M, consensus $349.03M NEWSPAPERS/WEBSITES Masimo (MASI) wins $466M verdict in patent suit with Philips, Bloomberg says Royal Bank of Canada (RY) prop desk spin-off plan shot down by regulators, WSJ saysScripps Networks (SNI) reaches licensing deal with Netflix, WSJ reportsVerizon (VZ) withdraws target to throttle unlimited LTE data plans, Gigaom saysVivendi looking for acquisitions in U.S. media space, NY Post reports SYNDICATE AAC Holdings (AAC) 5M share IPO priced at $15.00Atento (ATTO) 10M share IPO priced at $15.00Calithera Biosciences (CALA) 8M share IPO priced at $10.00Digital Ally (dgly) files to sell 1.19M shares for holdersJP Energy (JPEP) 13.75M share IPO priced at $20.00Memorial Resource (MRD) files to sell 27.8M shares for holdersPortola Pharmaceuticals (PTLA) files to sell 10M sharesRadius Health (RDUS) files to sell common stockVWR Corp (VWR) 25.532M share IPO priced at $21.00Wayfair (W) 11M share IPO priced at $29.00