A.M. MARKET UPDATE 10.07.9: GOLD HITS RECORD HIGH

BLOOMBERG: Gold’s rally this year to a record shows commodity investors remain concerned that the U.S. economic recovery will spur inflation . . . Bullion has jumped 18 percent this year, heading for a ninth straight annual gain, after futures touched a record $1,045 an ounce yesterday in New York amid increasing demand for a hedge against inflation and a weaker dollar . . . READ MORE

ANALYST: GOLD NOW 'BULLETPROOF'
ASSOCIATED PRESS: The dollar has weakened considerably this year amid low interest rates and massive government spending designed to spur the economy . . . "I think the case for gold is pretty bulletproof right now," said Joe Foster, portfolio manager of the Van Eck International Investors Gold Fund. "Given that we're at new highs now, I think the next target the market will be looking at is $1,100." . . . READ MORE

WEAKER DOLLAR SPURS CALL
FOR NEW GLOBAL CURRENCY
WASHINGTON POST: The U.S. dollar continued its six-month slide Tuesday amid a growing international chorus that wants the dollar replaced -- or at least supplemented -- as the world's reserve currency, a move that would end the greenback's six decades of global dominance . . . READ MORE

BONDS: TREASURY AUCTION WEAKER
WALL STREET JOURNAL: Treasury prices remained lower Tuesday afternoon after an average three-year Treasury note auction . . . The tepid demand at the sale of a record $39 billion three-year notes came as somewhat of a disappointment . . . Treasury will sell $20 billion in previously sold 10-year notes Wednesday and $12 billion in reopened 30-year Thursday . . . READ MORE

REAL ESTATE: OFFICE VACANCIES 16%
REACH HIGHEST LEVEL IN FIVE YEARS
REUTERS: The U.S. office vacancy rate reached a five-year high in the third quarter, pushed up by extra unused space that just about wiped out all the gains made during the commercial real estate boom, according to real estate research firm Reis Inc. The national vacancy rate rose . . . to 16.5 percent . . . READ MORE

BANKING: FDIC SELLS 40% OF FAILED
CHICAGO LENDER FOR $554 MILLION
ASSOCIATED PRESS: The Federal Deposit Insurance Corp. has agreed to sell a 40 percent stake in a portfolio of Corus Bank assets for $554.4 million to a private-equity consortium led by Starwood Capital Group. . . . Federal regulators in September seized Corus Bancshares Inc., a major Chicago-based lender to condominium, office and hotel projects . . . Corus Bank's closure is expected to cost the fund that insures bank deposits $1.7 billion . . . READ MORE

REPORT: FED CONCERNED ABOUT
COMMERCIAL REAL-ESTATE WOES
WALL STREET JOURNAL: Banks in the U.S. "are slow" to take losses on their commercial real-estate loans being battered by slumping property values and rental payments, according to a Federal Reserve presentation to banking regulators last month. The remarks suggest that banking regulators are girding for a rerun of the housing-related losses now slamming thousands of banks . . . READ MORE

DEBT MARKET HINDERS ECONOMY
NEW YORK TIMES: The continued disarray in debt-securitization markets, which in recent years were the source of roughly 60 percent of all credit in the United States, is making loans scarce and threatening to slow the economic recovery . . . READ MORE