July 16

What you need to know to navigate today’s economic debates.

Citi Close to Secret Deal with Regulator (FT)
Citigroup is close to a secret agreement with one of its main regulators that will increase scrutiny of the US bank and force it to fix financial, managerial and governance issues.

JPMorgan’s Profit Soars Despite Downturn (NYT)
JPMorgan Chase announces $2.7 billion in second-quarter profits from stellar trading and investment banking results.

CIT Talks Fall Apart, Bankruptcy Looms (Reuters)
A small and mid-sized U.S. businesses lender said bailout talks with the government had ended, a development that could ultimately drive the company into bankruptcy.

Jobless Claims at 6-Month Low(CNN)
Initial filings sink by 47,000 to 522,000, lowest level since first week of January.

Foreclosure Rate Rises 4.6 Percent in June over Prior Month (WP)
Foreclosure filings increased in June as a weak labor market pushes more homeowners into delinquency and government struggles to prevent foreclosure.

Deficits Saved the World (NYT)
Economist Paul Krugman looks at the role of deficits in the Great depression and today’s Great Recession.

Geithner Says U.S. Can’t Afford to Apply Growth Brake Too Soon (BLM)
Withdrawing stimulus too soon “would weaken our long-term fiscal process and weaken the basic fabric of the economy.”

Fed Sees End to US Downturn (FT)
The US Federal Reserve believes that the recession will end “before long”, but predicts that unemployment will remain at high levels for several years to come.

The Time Bomb in Corporate Debt (BW)
Company defaults on the heels of record borrowing will hamper the recovery, while going straight into bankruptcy may be a healthier option.

U.S. in Tight Spot on Trade (WSJ)
Obama administration plans to press foreign nations to increase imports of U.S. agriculture and manufacturing, in a bid to revive support for free trade within the U.S.