Receiving Wide Coverage ...
Krueger on Board: As Scan readers were anticipating: Obama did in fact nominate labor economist Alan Krueger as chairman the Council of Economic Advisers, to replace Austan Goolsbee, touting his experience, according to the Post. More specifically, the Times reported, Krueger's studies of labor markets will be a boon for Obama, who plans to announce a jobs initiative next week. The Journal sees his role as Obama's "advocate for more aggressive government intervention to revive job growth." Wall Street Journal, New York Times, Washington Post
Obama's choice of Krueger was no big shocker to Post columnist Ezra Klein either. Reason One: Krueger is "more than qualified for this position." Reason Two: "The White House has hewed to a very specific personnel-replacement strategy, and Krueger fits it perfectly." It's this second reason that has Klein wondering if some outside-the-box thinking is missing from the picture: "taken as a whole, it's a very strong preference for a very specific type of experience and a very specific type of person, and it's been followed so rigorously that it's hard to believe the administration is hearing a very wide range of internal views." Klein likes Krueger well enough, but just wants to get us wondering what someone who isn't a "close tennis buddy of Summers and Geithner" might have to bring to the table.
Wall Street Journal
Bank of America agreed to sell $8 billion of China Construction Bank stock, helping pump up the bank's stock values which had been on the rise since Warren Buffett's Berkshire Hathaway invested $5 billion in B of A last week. The Charlotte lender has regained about $14 billion of the $16 billion of market value it lost in one day this month, and gives CEO Brian Moynihan more time to make good on his plan "to narrow the focus of the nation's largest lender and wring efficiencies out of a far-flung empire that was built up over the reign of his predecessor, Kenneth Lewis."
The paper used Hurricane Irene as a metaphor for the global investment banking industry, but unlike the municipalities struck by the storm, "Wall Street will never be the same." The article predicts more job cutting. "Modern investment banks are full of loss-leading bait to lure clients towards profit-generating products," but regulations will change bank's ability to charge premiums. The solution? The article suggests lowering pay and investing productively.
While housing prices may have risen three straight months, as measured by the Case-Shiller index, the "Ahead of the Tape" column warns that a similar pattern occurred last year only for prices to drop after the summer. "On a yearly basis, prices are still falling."
American Bankers Association President and CEO Frank Keating decried the amount of manpower needed by banks for compliance: 20% more than available for lending. "The pace and complexity of new regulations coming online will quickly overwhelm and obscure the nips and tucks that the agencies agreed to this month." He suggested that the "overregulation" end and government "get out of the way" of entrepreneurs.
New York Times
Banks including Chase and Wells Fargo suspended some fees related to ATM usage, overdrafts and other items because of upheaval caused by Hurricane Irene.
Companies that run derivatives trading platforms consider Dodd-Frank to be a boon to their bottom line because it enacts their business model into the regulatory code. Dodd-Frank requires companies to trade credit-default swaps and other derivatives through a tightly regulated version of the existing platforms.
A story takes a glum look at the economy, keying off of the University of Michigan's survey of consumer sentiment, which indicated that "Americans no longer believe they will make more money next year than this year... These expectations used to rebound after recessions; this time they didn't." Folks interviewed outside Wal-Marts and Targets are buying cheaper brands of cereal and condiments instead of the premium brands. It notes the observation from economist that "the decline in consumer confidence could become a self-fulfilling prophecy if, as a result of fear, they continue to cut back spending and lead businesses to cut back as well."