“Markets can remain irrational a lot longer than you or I can remain solvent.” — John Maynard Keynes.

1. Yoshihiko Noda to be Japan’s new prime minister — Finance Minister and fiscal conservative Yoshihiko Noda will replace Naoto Kan as Japan’s next prime minister after beating Trade Minister Banri Kaieda in a run-off vote for the leadership of the ruling Democratic Party.
2. Obama to choose Alan Krueger to top economic post — Barack Obama today plans to nominate Princeton University’s Alan Krueger to replace Austan Goolsbee as Chairman of the White House Council of Economic Advisers.
3. China Widens Reserve Ratio to Limit Inflation — China broadened the base of reserves it requires commercial lenders to deposit with the central bank to control liquidity and limit inflation, economists said.
4. QE3 expectations rise after FOMC minutes — expectations for more bond buying have increased after the minutes from the FOMC’s August 9 meeting showed that some policy makers were in favor of the move in order to help spur the economy, for which the Fed painted a gloomy picture.
5. The U.S. government sued to block Deutsche Telekom’s $39 billion sale to AT&T Inc of T-Mobile USA — the U.S. government citing concerns it will harm competition in the wireless market and lead to higher prices.
6. IMF pours further doubt on strength of EU banks — an IMF analysis shows that marking the sovereign bonds of six highly indebted eurozone countries to market would reduce the tangible common equity of EU banks by about €200B ($287B), or 10%-12%. The countries concerned are the usual suspects of Ireland, Greece, Portugal, Italy and Spain plus Belgium.
7. UAW workers OK strike option — in advance of a contract expiration on September 14, UAW workers in Detroit have voted to give union leaders the option of calling a strike against Ford (F).
8. U.S. said ready to sue big banks over mortgages — a federal U.S. agency is ready to sue more than a dozen major banks, arguing that they misrepresented the quality of mortgage securities they put together and sold in the run-up to the bursting of the housing bubble, according to a published report. The suits are aimed at Bank of America Corp., Goldman Sachs Group Inc., J.P. Morgan Chase & Co., Deutsche Bank AG and others, the report said, citing three unidentified individuals briefed on the matter.
9. Bullish Sentiment Up Again — According to AAII’s weekly poll of investor sentiment, bullish sentiment rose to 38.62% in the latest week. This represents the fourth straight week where bullish sentiment has improved. Chart courtesy from the Bespoke Investment Group.

The week ahead — Economic data from Econoday.com: