• Senate is set to vote tonight on an amended bailout bill, which includes raising the FDIC deposit insurance to $250k and continuing some tax breaks for corporations and individuals.  Apparently some in the House are working on an amended bill as well.  No House vote is scheduled yet.

• The National ISM fell sharply from 49.9 to 43.5. Economists were forecasting 49.5.

This is the lowest number since October 2001. ISM points to a recession as a reading below 50 suggests activity is receding and this is evident by sharp drops in new orders, production, and employment.

Moreover, experts are saying conditions may worsen since the full impact from the credit crisis is yet to be felt.

• ADP jobs report came in at -8,000 nonfarm payrolls for September, Employment Situation report is due out on Friday.

• Mutual fund withdrawals hit a record $74.5 billion in September. The previous record withdrawal month was September 2001, with $27 billion cashed out.

Equity fund withdrawals were over $50 billion of the total $74.5 billion. You could look at that as a really bad sign, but there is the glass is half full view.  Those investorswon't be racing back into the market yet, but it does mean there is a lot of cash available to return to the market when conditions are more favorable.

• Many have been debating the mark to market or fair-market valuation accounting methods. Some in Congress urged suspension of the rule. But the SEC and FASB have flatly rejected this idea. The FASB has issued a “clarification” of the existing rule.

Under this “clarification” they are now telling auditors that if there is no valid market for securities, the existing rules permit institutions to value securities based on reasonable cash-flow projections. This is huge, and it is also  controversial.  Considering the mortgage market started to malfunction last year you have to wonder where the SEC and FASB were during all of this and why they have waited so long to "clarify" the rules.

More to come!