Spin Cycle

The Dow dropped 3.6 percent yesterday and Asian shares lost 3 percent, but European markets stabilized overnight, suggesting the carnage might be less savage today. Still, the worldwide financial turmoil and evidence of a global recession now makes the bailout passed just last week look like "a pebble tossed in a churning sea."

Obama and McCain said they were going to run a classy campaign, but McCain's character attacks and Obama's responses have moved both into attack mode as the two candidates prepare for their second debate tonight.

Handicapping the debate in Nashville tonight, the Town Hall format favors McCain, but the domestic policy/economy subject matter favors Obama. Brune in Newsday says McCain must raise doubts about Obama, but going harshly negative in a Town Hall format with undecided voters could backfire. Five things to watch for. Also, here.

Sarah Palin talked about William Ayers yesterday, and Obama's campaign talked about Charles Keating. The documentary Obama released about McCain's role in the "Keating 5" S&L scandal is a "useful primer" but is not entirely fair to McCain, the Times says.

McCain played an outrage card, claiming that Obama "abetted" the subprime lending mess, but his speech contained about 10 misrepresentations of fact.

Obama continues to make gains in battleground states, according to the polls. Ex-Hillary-aide and Fox personality Howard Wolfson, who spent six months trying to beat Obama by tying him to Bill Ayers, says Ayers won't work and the race is over.

Fox, moving into frenzied anti-Obama mode, broadcast a "documentary" asserting that Obama was "training for the radical overthrow of the government" while he was working as a community organizer in Chicago. The host was Sean Hannity.

Dana Milbank: Palin "makes a pit bull look tame."

Palin's husband and aides have agreed to cooperate with a Troopergate probe in Alaska, after a judge upheld it.

The GOP, working on every front to darkly raise questions about Obama, charged in an FEC complaint that he was receiving a lot of money from foreign sources.

A bill to allow Bloomberg to run for a third term will be introduced in City Council today, and his lawyer isn't answering questions about his curious claim that a spring referendum to allow voters to decide might be illegal. Term-limits champion Ron Lauder is still not on board.

Suffolk's land preservation efforts have cost the eye-popping sum of $3.5 billion.