MAJOR PAPERS:

• The Wall Street Journal said the $19B privatization of Clear Channel Communications Inc (NYSE: CCU) was near collapse as the private-equity firms behind the deal and the banks financing it failed to resolve their differences over terms of the credit agreement, people familiar with the matter said.
• Comcast Corporation (NASDAQ: CMCSA) and Time Warner Inc (NYSE: TWX) are in talks to fund a new nationwide wireless company that would be operated by Sprint Nextel Corporation (NYSE: S) and Clearwire Corporation (NASDAQ: CLWR), and use WiMax technology, reported the Wall Street Journal. Intel Corporation (NASDAQ: INTC) and Google Inc (NASDAQ: GOOG) may also help with funding.
• The Wall Street Journal also reported federal regulators are handing out warnings to banks due to their exposure to development loans and commercial real-estate construction. Sources believe Corus Bankshares Incorporated (NASDAQ: CORS) is facing trouble in the near future due to increasing scrutiny by regulators and the fact that much of the fallout in the condo sector has yet to be felt by banks.
• Some banks in the government-sponsored Federal Home Loan Banking system want to guarantee municipal infrastructure projects, the Financial Times reported, thus fulfilling the role traditionally taken by monoline insurance groups such as MBIA Inc(NYSE: MBI).

Zimmer Holdings Inc. (NYSE: ZMH) is recently up $1.22 to $83.63 on renewed and unconfirmed buyout chatter. ZMH, a leader in designing, developing, manufacturing and marketing reconstructive orthopedic surgical products, is expected to report EPS on October 25. ZMH call option volume of 5,379 contracts compares to put volume of 125 contracts. ZMH November option implied volatility of 28 is above its 26-week average of 23 according to Track Data, suggesting slightly larger price risk.

Corus Bankshares Inc. (NASDAQ: CORS) is an active commercial real estate lender nationwide, specializing in condominium, hotel, office and apartment loans. CORS had outstanding commercial real estate loans and construction commitments of $8 billion as of June 30, 2007. CORS is expected to report EPS on October 16. CORS October option implied volatility of 80 is above its 26-week average of 59 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.