U.S. Economic/Financial News
Tsunami of Job Losses Sweeps U.S. Economy
April 1 (EIRNS)A stunning three-quarters of a million jobs were lost in the U.S. private sector in March, according to the widely cited ADP Employer Services. On top of 706,000 lost in Februaryup from an earlier estimate of 697,000March saw an additional 742,000 jobs go down the drain.
On April 3, the U.S. Labor Department will issue the official non-farm payrolls report, which accounts for public sector jobs as well as private ones. Earlier estimates from (constantly inaccurate) "economists" and "accounting experts" had been that some 650,000 jobs would be lost in March; now it is widely admitted that the numbers will be far worse.
CBO: Half of TARP Money Gone for Good
April 4 (EIRNS)The Congressional Budget Office (CBO) has issued revised figures as to the ultimate cost of the so-called Troubled Asset Relief Program (TARP). In January, the CBO estimated that the total cost to taxpayers of the $700 billion program would be $189 billion, that is, the government would not get back $189 billion of the funds that it lent out. In late March, the agency revised that figure upwards to $356 billion, which, according to the Wall Street Journal, reflects the Treasury's move to use the program for foreclosure mitigation, the changing details of the AIG bailout and the overall deterioration of financial conditions. The Obama Administration is asking for another $750 billion in bailout money in its 2010 budget, of which it claims that taxpayers will get back $500 billion. The new CBO figures, however, suggest that the loss would be closer to $375 billion, than $250 billion.
Of course, since the entire program is nothing but the bailout of bad paper, the losses to the taxpayers are likely to be much higher.
Foreclosure Prevention Efforts Not Working
April 4 (EIRNS)A report, released April 3, jointly by the Office of Thrift Supervision and the Office of the Comptroller of the Currency, demonstrates that the so-called foreclosure prevention measures that have been implemented in lieu of Lyndon LaRouche's Homeowners and Bank Protection Act, are a failure. According to an OCC/OTS press release on the report, the total percentage of performing mortgages declined from 93% at the end of September 2008, to just under 90% at the end of the year. The category of loans that is now deteriorating the fastest is prime loans, the category considered the least at risk, as compared to subprime loans. At the end of the fourth quarter last year, 2.4% of prime loans were delinquent, compared to 1.1% at the end of March 2008. The study also found that redefault rates on modified mortgages were high and also rising during the first three quarters of 2008, but that the reasons for the high default rates are not clear, and "could be the result of a worsening economy, excessive borrower leverage or poor initial underwriting."
EIR, on the other hand, has estimates that 40% of foreclosures are now the direct result of job losses and the collapse of the economy as a whole, showing why LaRouche's HBPA is the only solution.