November 24

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

U.S. Economy Grows 2.8 pct in Q3 (Reuters)
In its second reading of third-quarter gross domestic product, the Commerce Department said the economy grew at a 2.8 percent annual rate, rather than the 3.5 percent pace it estimated last month.

Breaking up the Banks (BillyBlog)
Economist Bill Mitchell discusses modern monetary theory, which provides some simple rules for assessing whether separating retail banking investment (risk-taking) activities is sensible and necessary.

Freddie Mac Fears Big Hit (WP)
The mortgage finance giant says it’s trying to minimize losses on more than $1 billion in assets at risk because of the summer collapse of mortgage lender Taylor, Bean & Whitaker.

Home Sales Rebound to Early-2007 Level (WP)
Economists and policymakers got what they were looking for Monday: a clear uptick in the housing market.

One in 4 Borrowers Is Under Water (WSJ)
The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23%.

Fed Said to Ask Stress-Tested Banks to Submit Plans for Repaying U.S. Aid (BLM)
The Fed asked nine of the U.S. banks that were part of this year’s stress tests to submit plans for repaying the government’s capital injections, a person familiar with the situation said.

Vampire Banks Rise Again (Guardian)
Wall Street will never be fair while industry lobbyists wander the halls of Congress, sucking the life out of financial reform.

AIG’s Rescue Bedevils U.S. (WSJ)
Some federal officials are pressing U.S. pay czar Kenneth Feinberg to ease up on AIG compensation curbs for 2010, arguing that the firm and taxpayers would suffer if they are too severe.

Divisions Emerge on Stimulus Strategy (FT)
IMF chief outlines risks of an early exit.

Banks’ Newest Game: Debit Card Fees (CNN)
Faced with new credit card restrictions, lenders are touting debit card loyalty programs. But many come with fees that may not be worth it for consumers.

Plan Is Revived to Repay Some Lehman Creditors (Dealbook)
The administrator for Lehman Brothers said that it planned to seek support to remove claims against the investment bank from British courts and distribute assets directly to creditors

Blacks Hit Hard by the Economy (WP)
Jobless rate for young black men is more than three times that of the general population.

Signs of Hope (NYT)
The U.S. has the opportunity, the intellectual resources and the expertise to lead the world in the development of clean energy. What we’ve lacked so far has been the courage, the will, to make it happen.

Checking the Health of the Housing Recovery (BW)
Waiting for the pain in residential real estate to end? BusinessWeek asked experts what to watch now

Markets Lower After China’s Warning to Banks (NYT)
European shares tracked their Asian counterparts lower after China’s central bank warned commercial banks to control their lending.