October 13

“What you need to know to navigate today’s economic debate.

‘Unbanked’ but No Longer Ignored (WP)
Congress is debating the creation of a Consumer Financial Protection Agency that would provide federal oversight f payday lenders and check cashers.

The Problem With Financial Services Compensation (AIG/Pay Czar Edition) (NakedCapital)
Yves Smith writes that while pay levels in the financial services industry are to a significant degree unwarranted, using pay to appease the masses forgoes the heavy lifting of real reform and meaningful oversight.

Don’t Fail, or Reward Success (NYT)
The bigger question — the more important question — is whether the enormous sums of money that will be given to Goldman’s executives are proper and whether the executives have the right incentives.

The Victims of High-Frequency Trading (Reuters)
There has been too little focus on how retail investors can get fleeced by Wall Street’s superfast trading programs, writes Matthew Goldstein.

Bank of America Relents, Will Hand Over Merrill Merger Files (WP)
Bank of America will turn over to investigators legal documents related to its purchase of Merrill Lynch, reversing its previous stance that such information must be kept confidential.

The Misplaced Tough-Mindedness of National-Debt Hawks (WP)
The national debt may be a hammer, but not everything is a nail.

Credit Tightens for Small Businesses (NYT)
Many small and midsize American businesses are still struggling to secure bank loans, impeding their expansion plans and constraining overall economic growth.

Stimulus: Creating jobs or not? (CNN)
Is the largest one-time economic recovery effort in U.S. history creating jobs?

Cost Cuts Lift Profits but Hinder Economy (WSJ)
Optimism belies deep worries among company executives about the strength of the economic recovery.

German Investor Sentiment Drops on Economic ‘Realism’ (BLM)
German investor confidence unexpectedly declined for the first time in three months in October amid concerns that the pace of the nascent recovery in Europe’s largest economy may ease.

China’s Super-Rich Bounce Back from Financial Crisis (Reuters)
China now has more known dollar billionaires than any other country bar the United States, according to a new Forbes report.