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1. Ruud100 25 september 2009 14:03

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   Kijk,
   
   Twee wijze mannen met een wijs rapport. BBP is niet alles.
   
   Gr
   Ruud
   
   “What you measure affects what you do,” Mr. Stiglitz said Tuesday as he discussed the study before a gathering of journalists in New York. “If you don’t measure the right thing, you don’t do the right thing.”
   
   www.nytimes.com/2009/09/23/business/e...
   Emphasis on Growth Is Called Misguided
   
   By PETER S. GOODMAN
   Published: September 22, 2009
   
   Among the possible casualties of the Great Recession are the gauges that economists have traditionally relied upon to assess societal well-being. So many jobs have disappeared so quickly and so much life savings has been surrendered that some argue the economic indicators themselves have been exposed as inadequate.
   
   In a provocative new study, a pair of Nobel prize-winning economists, Joseph E. Stiglitz and Amartya Sen, urge the adoption of new assessment tools that incorporate a broader concern for human welfare than just economic growth. By their reckoning, much of the contemporary economic disaster owes to the misbegotten assumption that policy makers simply had to focus on nurturing growth, trusting that this would maximize prosperity for all.
   
   “What you measure affects what you do,” Mr. Stiglitz said Tuesday as he discussed the study before a gathering of journalists in New York. “If you don’t measure the right thing, you don’t do the right thing.”
   
   

   quote:

   schreef:

   According to the report, much of the world has long been ruled by an unhealthy fixation on swelling the gross domestic product, or the quantity of goods and services the economy produces.
   
   With a singular obsession on making G.D.P. bigger, many societies — not least, the United States — failed to factor in the social costs of joblessness and the public health impacts of environmental degradation.
   
   They allowed banks to borrow and bet unfathomable amounts of money, juicing the present by mortgaging the future, thus laying the ground for the worst financial crisis since the 1930s.
   [/quote]
   
   The report is more critique than prescription. It elucidates in general terms why leaning exclusively on growth as an economic philosophy may yield unhappiness, and it suggests that the incomes of typical people should be weighed more heavily than the gross production of whole societies. But it sidesteps the thorny details of slapping a cost on a ton of pollution or a waylaid career, leaving a great mass of policy choices for others to resolve.
   
   Some Americans may reflexively reject the report and its recommendations, given its provenance: it was ordered up last year by President Nicolas Sarkozy of France, whose dissatisfaction with the available tools of economic assessment prompted him to create the Commission on the Measurement of Economic Performance and Social Progress. Tuesday’s briefing was held in an ornate room at the French consulate. The official French statistics agency is already working to adopt the report’s recommendations. Mr. Sarkozy plans to bring it with him to the G-20 summit meeting in Pittsburgh this week, where the leaders of major countries will discuss a range of policy issues.
   
   But whatever one’s views on the merits of European economy policy, and wherever one sits on the ideological spectrum, these appear fitting days to re-examine how economists measure vital signs — particularly in the United States.
   
   By most assessments, the American economy is now growing again, perhaps even vigorously. Many experts expect a 3 percent annualized rate of expansion from July through September. As a technical matter, the recession appears to be over. Yet the unemployment rate sits at 9.7 percent and will probably climb higher and remain elevated for many months. In millions of households still grappling with joblessness and the tyranny of bills, signs of health served up by the traditional economic indicators seem disconnected from daily life.
   
   This was precisely the sort of contradiction Mr. Sarkozy sought to unravel when he created the commission, tasking it with pursuing alternate ways of measuring economic health.
   
   To head the panel, he picked Mr. Stiglitz, a former World Bank chief economist whose best-selling books amount to an indictment of the Washington-led model of global economic integration. Mr. Sarkozy also selected Mr. Sen, a Harvard economist and an authority on poverty.
   
   The resulting report amounts to a treatise on the inadequacy of G.D.P. growth as an indication of overall economic health. It cites the example of increased driving, which weighs in as a positive within the framework of economic growth, as it requires greater production of gasoline and cars, yet fails to account for the hours of leisure and work time squandered in traffic jams, and the environmental costs of pollutants unleashed on the atmosphere.
   
   During the real estate bubble that preceded the financial crisis, the focus on economic growth helped encourage overbuilding and investment in real estate. Mr. Stiglitz argues that the single-minded focus on growth gave American policy makers a false sense of assurance that their policies were virtuous, as they allowed financial institutions to direct virtually unlimited sums of money into real estate and as consumer debt levels built with unrestrained momentum.
   
   [quote=]
   Credit enabled spending, and spending translated into faster growth — an outcome that was intrinsically good, and never mind how long it might last or the convulsions that would accompany the end of easy money.
   
   A growth-oriented policy encouraged homeowners to borrow as if money need never be repaid, and industry to produce products as if the real cost of pollution were zero, Mr. Stiglitz added.
   
   “We looked to G.D.P. as a measure of how well we were doing, and that doesn’t tell us whether it’s sustainable,” he said at the briefing. “Your measure of output is grossly distorted by the failure of our accounting system. What began as a measure of market performance has increasingly become a measure of social performance, and that’s wrong.”
   

   Instead of centering assessments on the goods and services an economy produces, policy makers would do better to focus on the material well-being of typical people by measuring income and consumption, along with the availability of health care and education, the report concludes.
   
   Many of these prescriptions will no doubt resonate with policy makers and ordinary people.
   
   Indeed, the difficulty comes in turning these general principles into new means of measurement. The report notes that its authors concur on the big picture, but diverge on the methodologies to be employed when it comes to factoring in the value of a better education and cleaner skies.
   
   The old mode of measurement has taken a beating, and yet the new one, it seems, is still a work in progress.
2. Ruud100 27 september 2009 10:52

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   U.S. Job Seekers Exceed Openings by Record Ratio
   By PETER S. GOODMAN
   Published: September 26, 2009
   
   Despite signs that the economy has resumed growing, unemployed Americans now confront a job market that is bleaker than ever in the current recession, and employment prospects are still getting worse.
   
   Job seekers now outnumber openings six to one, the worst ratio since the government began tracking open positions in 2000. According to the Labor Department’s latest numbers, from July, only 2.4 million full-time permanent jobs were open, with 14.5 million people officially unemployed.
   
   And even though the pace of layoffs is slowing, many companies remain anxious about growth prospects in the months ahead, making them reluctant to add to their payrolls.
   
   “There’s too much uncertainty out there,” said Thomas A. Kochan, a labor economist at M.I.T.’s Sloan School of Management. “There’s not going to be an upsurge in job openings for quite a while, not until employers feel confident the economy is really growing.”
   
   The dearth of jobs reflects the caution of many American businesses when no one knows what will emerge to propel the economy. With unemployment at 9.7 percent nationwide, the shortage of paychecks is both a cause and an effect of weak hiring.
3. Ruud100 27 september 2009 11:27

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   Is er nog recht op het onderpand bij (tweede) hypotheken?
   
   Gr
   Ruud
   
   The Mortgage Machine Backfires
   
   By GRETCHEN MORGENSON
   Published: September 26, 2009
   
   WITH the mortgage bust approaching Year Three, it is increasingly up to the nation’s courts to examine the dubious practices that guided the mania. A ruling that the Kansas Supreme Court issued last month has done precisely that, and it has significant implications for both the mortgage industry and troubled borrowers.
   
   The opinion spotlights a crucial but obscure cog in the nation’s lending machinery: a privately owned loan tracking service known as the Mortgage Electronic Registration System. This registry, created in 1997 to improve profits and efficiency among lenders, eliminates the need to record changes in property ownership in local land records.
   
   Dotting i’s and crossing t’s can be a costly bore, of course. And eliminating the need to record mortgage assignments helped keep the lending machine humming during the boom.
   
   Now, however, this clever setup is coming under fire. Legal experts say the fact that the most recent assault comes out of Kansas, a state not known for radical jurists, makes the ruling even more meaningful.
   
   Here’s some background: For centuries, when a property changed hands, the transaction was submitted to county clerks who recorded it and filed it away. These records ensured that the history of a property’s ownership was complete and that the priority of multiple liens placed on the property — a mortgage and a home equity loan, for example — was accurate.
   
   During the mortgage lending spree, however, home loans changed hands constantly. Those that ended up packaged inside of mortgage pools, for instance, were often involved in a dizzying series of transactions.
   
   To avoid the costs and complexity of tracking all these exchanges, Fannie Mae, Freddie Mac and the mortgage industry set up MERS to record loan assignments electronically. This company didn’t own the mortgages it registered, but it was listed in public records either as a nominee for the actual owner of the note or as the original mortgage holder.
   
   Cost savings to members who joined the registry were meaningful. In 2007, the organization calculated that it had saved the industry $1 billion during the previous decade. Some 60 million loans are registered in the name of MERS.
   
   As long as real estate prices rose, this system ran smoothly. When that trajectory stopped, however, foreclosures brought against delinquent borrowers began flooding the nation’s courts. MERS filed many of them.
   
   The system also led to confusion. When MERS was involved, borrowers who hoped to work out their loans couldn’t identify who they should turn to.
   
   As cases filed by MERS grew, lawyers representing troubled borrowers began questioning how an electronic registry with no ownership claims had the right to evict people. April Charney, a consumer lawyer at Jacksonville Area Legal Aid in Florida, was among the first to argue that MERS, which didn’t own the note or the mortgage, could not move against a borrower.
   
   Initially, judges rejected those arguments and allowed MERS foreclosures to proceed. Recently, however, MERS has begun losing some cases, and the Kansas ruling is a pivotal loss, experts say.
   
   While the matter before the Kansas Supreme Court didn’t involve an action that MERS took against a borrower, the registry’s legal standing is still central to the ruling.
   
   The case involved a borrower named Boyd A. Kesler, who had taken out two mortgages from two different lenders on a property in Ford County, Kan. The first mortgage, for $50,000, was underwritten in 2004 by Landmark National Bank; the second, for $93,100, was issued by the Millennia Mortgage Corporation in 2005, but registered in MERS’s name. It seems to have been transferred to Sovereign Bank, but Ford County records show no such assignment.
   
   In April 2006, Mr. Kesler filed for bankruptcy. That July, Landmark National Bank foreclosed. It did not notify either MERS or Sovereign of the proceedings, and in October, the court overseeing the matter ordered the property sold. It fetched $87,000 and Landmark received what it was owed. Mr. Kesler kept the rest; Sovereign received nothing.
   
   Days later, Sovereign asked the court to rescind the sale, arguing that it had an interest in the property and should have received some of the proceeds. It told the court that it hadn’t been alerted to the deal because its nominee, MERS, wasn’t named in the proceedings.
   
   The court was unsympathetic. In January 2007, it found that Sovereign’s failure to register its interest with the county clerk barred it from asserting rights to the mortgage after the judgment had been entered. The court also said that even though MERS was named as mortgagee on the second loan, it didn’t have an interest in the underlying property.
   
   By letting the sale stand and by rejecting Sovereign’s argument, the lower court, in essence, rejected MERS’s business model.
   
   Although the Kansas court’s ruling applies only to cases in its jurisdiction, foreclosure experts said it could encourage judges elsewhere to question MERS’s standing in their cases.
   
   “It’s as if there is this massive edifice of pretense with respect to how mortgage loans have been recorded all across the country and that edifice is creaking and groaning,” said Christopher L. Peterson, a law professor at the University of Utah. “If courts are willing to say MERS doesn’t have any ownership interest in mortgage loans, that may eventually call into question the priority of liens recorded in MERS’s name, and there are millions and millions of them.”
   
   In other words, banks holding second mortgages could find themselves in the same pair of unlucky shoes that Sovereign found itself wearing in Kansas.
   
   Asked about the ruling, Karmela Lejarde, a spokeswoman for MERS, contested the court’s reasoning.
   
   “We believe the Kansas Supreme Court used an erroneous standard of review; this is not the end of the judicial process,” she said. “The mortgages on which MERS is the mortgagee will remain binding contracts.”
   
   BUT Patrick A. Randolph, a law professor at the University of Missouri, Kansas City, who described himself as a friend of MERS, described the recent decision as unsettling. “This opinion is hostile to the notion of MERS as nominee and could lead to problems for it in foreclosing,” he said. “The entire structure of MERS as a recorded nominee could collapse in Kansas, and that could lead to a patch-up job where they would have to run around and re-record the mortgages.”
   
   If so, MERS would be hoisted on its own petard. And it would be a rare case of poetic justice in this long-running mortgage mess.
4. Ruud100 27 september 2009 11:57

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   US large-loan bank losses triple to $53 billion
   Fri Sep 25, 8:58 am ET
   
   CHARLOTTE, N.C. – U.S. regulators said total losses from large loans at banks and other financial institutions nearly tripled to $53 billion in 2009, due to a deteriorating economic environment and continued weak underwriting standards.
   
   

   quote:

   schreef:

   According to an annual report released by the four federal bank-regulatory agencies on Thursday, credit quality deteriorated to record levels this year.
   
   The report said total identified losses of $53.3 billion in 2009 surpassed last year's total of $2.6 billion, and nearly tripled the previous peak in 2002, when losses totaled $19.1 billion.
   
   "While we expected a year-over-year increase in problem assets, given the weak economic environment, declining (commercial real estate) values, and previously weak underwriting, we were surprised by the magnitude of the increase," wrote FBR Capital Markets analyst Scott Valentin in a research note to clients Friday.
   

   Since 2007, banks have been crushed by mounting losses tied to real estate. Rising mortgage defaults since have helped push the U.S. into a recession. While the economic downturn was first pegged to residential mortgage loans, banks and lenders are now having problems with commercial real estate.
   
   The report, called the Shared National Credits Review program, is prepared and jointly released by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Office of Thrift Supervision. The report defines a "shared national credit" as any loan or formal loan commitment of at least $20 million that was financed by three or more banks.
   
   Total loans across the institutions reviewed in 2009 was $2.9 trillion. The study looked at 8,955 loans given to about 5,900 different borrowers.
   
   The report said foreign banks held about 38 percent of the $2.9 trillion in loans, while about 21 percent of the loans are held by hedge funds, insurance companies, pension funds and other entities.
5. Ruud100 29 september 2009 16:38

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   U.S. CEOs still not ready to hire, spend: survey
   Reuters
   
   BOSTON (Reuters) – U.S. chief executives are not ready to step up hiring or capital spending, though a majority expect sales to rise over the next six months, according to a Business Roundtable survey released on Tuesday.
   
   The survey said 40 percent expect to cut U.S. jobs over the next six months, compared with 13 percent who expect to add them. Some 35 percent expect to lower U.S. capital spending, more than the 21 percent who plan to raise it.
   
   In a sign that they see the U.S. economy beginning to pull out of its worst downturn since the Great Depression, the majority -- 51 percent -- of CEOs expect their companies' sales to rise over the next six months.
   
   "CEO's are beginning to see an uptick in expectations for sales, which is good; however, this demand has not yet translated into increased capital spending or hiring," said Ivan Seidenberg, chairman and CEO of Verizon Communications Inc (VZ.N), who also serves as chairman of the Roundtable.
   
   Seidenberg said that an upturn in hiring would likely lag a resumption of growth in sales by about 12 to 18 months.
   
   Caution was the dominant response on both hiring and spending, with the largest number of CEOs saying they expected their U.S. headcounts and capital budgets to remain flat over the next six months.
   
   OUTLOOK FOR CONTRACTION
   
   The Business Roundtable's quarterly CEO Economic Outlook Index rose to 44.9 in the third quarter, up from a reading of 18.5 three months ago, but below the level of 50 that separates growth from decline. It has been negative for a year.
   
   The index has snapped back sharply from its record low of negative 5 hit in the first quarter.
   
   CEOs expect real U.S. gross domestic product to decline 0.9 percent in 2009, up from their June view of a 2.1 percent decline.
   
   Investors in recent weeks have become more convinced the U.S. economy is pulling out of a downturn, and the three major U.S. stock averages are now in positive territory year-to-date, though they are well below their pre-recession levels.
   
   But Wall Street still has plenty to worry about, including an unemployment rate nearing 10 percent, leaving consumer spending, which accounts for the majority of U.S. economic activity, tepid.
   
   Business Roundtable member companies, who were surveyed September 2 to September 18, employ more than 10 million people and collectively generate over $5 trillion in annual revenue.
6. Ruud100 30 september 2009 23:51

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   U.S. Q2 home foreclosures, mortgage delinquencies up
   Reuters
   
   By Karey Wutkowski Karey Wutkowski – Wed Sep 30, 11:04 am ET
   
   WASHINGTON (Reuters) – The number of home foreclosures in process and delinquent mortgages rose during the second quarter, while home retention actions also increased, U.S. bank regulators said on Wednesday.
   
   Foreclosures jumped 16 percent to 2.9 percent of serviced mortgages, while home retention actions such as loan modifications rose 21.7 percent, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said in a report.
   
   "The mortgage data reported for the second quarter of 2009 continued to reflect negative trends influenced by weakness in economic conditions, including high unemployment and declining home prices in weak housing markets," the report said.
   
   The report covers mortgages serviced by most of the industry's largest mortgage servicers, whose loans make up about 64 percent of all mortgages outstanding in the United States.
   
   The regulators said there was a lull in newly initiated foreclosures during the second quarter as mortgage servicers worked to implement the federal "Making Home Affordable" program.
   
   The $50 billion program, launched in March, is designed to stabilize the housing market by helping up to 9 million Americans reduce their monthly mortgage payments to more affordable levels.
   
   The OCC and OTS said the emphasis on the program contributed to a dramatic shift in the composition of home retention actions toward lowering payments. Previously, the vast majority of loan modifications either did not change or increased monthly payments.
   
   The weak economy continued to drive up the number of delinquent mortgages. The number of mortgages delinquent 30 to 60 days jumped 10.9 percent during the second quarter to 3.2 percent of all mortgages covered by the report.
   
   The number of mortgages that were more than 90 days delinquent increased 11.5 percent, rising to 5.3 percent of serviced mortgages.
   
   Separately, the Mortgage Bankers Association said on Wednesday that U.S. mortgage applications fell last week despite the lowest loan rates in four months, another sign that housing will likely recover slowly from its three-year plunge.
7. Ruud100 2 oktober 2009 17:05

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   US recovery effort stumbles as 263,000 jobs lost
   AFP
   
   US recovery effort stumbles as 263,000 jobs lost
   Rob Lever
   WASHINGTON (AFP) – US economic recovery hopes got a rude shock Friday as official data showed job losses accelerated to 263,000 in September and the unemployment rate rose to 9.8 percent.
   
   The Labor Department report, one of the best indicators of economic momentum, showed the critical labor market reversed course after months of improvement.
   
   The unemployment rate was up one-tenth of a point from August and in line with most forecasts, but would have been higher if not for 571,000 people dropping out of the labor force.
   
   But payroll losses were far worse than expectations for a loss of 175,000 jobs. The number of job cuts rose sharply after a revised loss of 201,000 in August.
   
   "This confirms that this is going to be a frustratingly slow recovery and it's not going to make a lot of people happy for a long time," said Robert MacIntosh, economist at Eaton Vance.
   
   "We've had some recovery by rebuilding inventories and we had a one-time boost with 'cash for clunkers' (auto buying incentive) but all that did was take sales from future months.
   
   "This economy needs to grow on its own and it's going to take a long time."
   
   Cary Leahey, senior economist at Decision Economics said that "what makes it disappointing is that every major component is weak.
   
   "Job gains have stalled, the unemployment rate remains high and the smaller parts of the report were also disappointing," Leahey said.
   
   Although the economy seems to be recovering, Leahey said that based on recent data "there's no sustained V-shaped recovery because the consumer sector still has too many fundamental problems."
   
   Economist Nigel Gault at IHS Global Insight said there was "no silver lining" to the latest report. "There was nothing to support the view that the economy will be adding jobs before the end of the year," he said.
   
   "And nothing to support the view that the consumer can sustain the spending increases that we saw in August -- employment and hours worked were down, and hourly earnings only inched higher, implying that wage and salary incomes fell."
   
   Most economists expect growth to return in the third quarter but say the recovery could fade without job growth.
   
   Robert Brusca at FAO Economics said that some backtracking in recovery is not unusual, "but usually the backtracking comes after more progress has been made."
   
   "The main backtrack this month was from the government sector where 53,000 jobs were lost after having shed 19,000 a month ago," he said.
   
   "Where is the stimulus money? This demonstrates about a clearly as possible how badly designed the stimulus plan was. We spent over one trillion dollars...and one of the objectives was to stabilize state and local employment. That obviously was not done."
   
8. Ruud100 2 oktober 2009 17:42

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   Greenspan? Ach, is er nog wel iemand die enig geloof hecht aan zijn kennis van een juist monetair beleid. Is dit nou de man van het geld uit helikopters strooien om de economie te stimuleren.
   
   Greenspan says Fed balance sheet an inflation risk
   Reuters
   
   [Quote=]
   WASHINGTON (Reuters) – Former Federal Reserve Chairman Alan Greenspan said on Friday that the Fed risks igniting a burst of inflation if it does not withdraw its extensive support for the economy at the right moment.
   
   "You cannot afford to get behind the curve on reining in this extraordinary amount of liquidity because that will create an enormous inflation down the road," Greenspan said at a forum hosted by The Atlantic magazine, the Aspen Institute and the Newseum.
   [/quote]
   
   In its battle against the worst financial crisis in 70 years, the Fed has chopped interest rates to zero and flooded the financial system with hundreds of billions of dollars in the process. In so doing, it has more than doubled the size of its balance sheet to over $2 trillion.
   
   The Fed has said that with high unemployment and a record level of factory idleness, none of the pressures that would ignite inflation is on the horizon. A government report on Friday that showed a weaker-than-expected job market in September is likely to provide additional support for that view.
   
   Greenspan said the economy is "undergoing a disinflationary process," and stressed that the Fed faces no urgent need at the moment to unwind its monetary stimulus.
   
   Still, his comments echo concerns raised by some policymakers who worry that delays in shrinking the Fed's bloated balance sheet will tempt fate and recommend action sooner rather than later.
   
   "It's critically important the Fed's doubling of its balance sheet be reversed," Greenspan said. "If you allow it to sit and fester, it would create a serious problem.
   
   Greenspan chaired the Fed from 1987 until his retirement in 2006. Hailed by many as a sage during his Fed tenure for a long period of prosperity, his legacy has been called into question over the long period of ultra-low interest rates and the Fed's hands-off approach to overseeing the financial industry before the global economic crisis.
9. Ruud100 2 oktober 2009 18:45

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   World Bank warns on 2010 as US job losses mount
   AFP by Dario Thuburn
   
   ISTANBUL (AFP) – The World Bank on Friday warned the global economy was on unsteady legs, saying that 2010 would be "a highly uncertain economic year" as other signals took the gloss off talk of a quick recovery.
   
   The warning came as stock markets tumbled around the world and the United States, the world's biggest economy, said job losses had accelerated to 263,000 in September and the unemployment rate rose to 9.8 percent.
   
   The International Monetary Fund raised its economic growth forecasts for next year for most major advanced and emerging economies on Thursday.
   
   But experts warn that unemployment will continue to rise, that recovery will be slow at best, and that there could even be a return to recession.
   
   "We've broken the fall of the financial crisis but it's certainly too early to declare success," World Bank president Robert Zoellick said in Istanbul in the run-up to the annual meetings of the IMF and the World Bank next week.
   
   "2009 will continue to be a difficult year and 2010, when much of the stimulus action will run out, remains a highly uncertain economic year," he said, citing in particular the risk of inflation in Asian economies.
   
   IMF managing director Dominique Strauss-Kahn warned unemployment would continue to rise for around a year, saying: "I'm still very much concerned about unemployment... It casts a long shadow over the recovery."
   
   Reacting to the jobs data on Friday, US Vice President Joe Biden said the figures were "tough news" but expressed confidence the economy would recover. "Today's bad news does not change my confidence in the fact that we are going to recover -- we will be producing jobs," Biden told reporters.
   
   In comments about the global economy, Brian Coulton from international credit ratings agency Fitch, said he expected "the pace of expansion to remain weak by the standards of previous recoveries and fragile to shocks."
   
   Fitch said the speed of global economic growth "may ease somewhat in mid-2010 as the boost from the inventory cycle and normalisation in world trade flows fades" but added that growth would remain positive.
   
   Some economists have warned about the possibility of a "double-dip recession," with economic contraction following the current recovery.
   
   Strauss-Kahn said on Thursday that a return to recession could be a risk if major governments start winding up economic stimulus plans too early.
   
10. Ruud100 2 oktober 2009 21:30

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    Consumer bankruptcies soar in September
    Reuters
    
    WILMINGTON, Delaware (Reuters) – Consumer bankruptcies soared 41 percent in September from a year before and climbed from August, as high unemployment and the housing market crash took their toll, the American Bankruptcy Institute said on Friday.
    
    September filings totaled 124,790, the fourth-highest month since the bankruptcy law changed in 2005.
    
    Filings also rose 4 percent from August, even as recent reports have indicated that the U.S. housing market might be stabilizing and consumer confidence appears to be recovering.
    
    September's filings pushed 2009 consumer bankruptcies to about 1.05 million, the highest for the first nine months of a year since 1.35 million in 2005.
    
    The American Bankruptcy Institute said it expects consumer bankruptcies to climb to more than 1.4 million this year.
    
    Although recent reports show that the erosion in the U.S. housing market might be easing, after dramatic declines in sales and prices, credit bureau Equifax Inc said recently that mortgage delinquencies accelerated in August to a record level.
    
    Equifax said that indicated personal bankruptcies are likely to continue to rise.
    
    Many Americans with troubled finances rushed to file for bankruptcy in 2005 before a law change, leading to a spike that year.
11. Ruud100 2 oktober 2009 23:51

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    Roubini Sees ‘Light at End of Tunnel’ of Recession
    By Timothy Homan
    
    Oct. 2 (Bloomberg) -- New York University Professor Nouriel Roubini said that action by governments and central banks has led to a “bottoming out” of the global recession and that there is “light at the end of the tunnel.”
    
    In the U.S., “there are signs right now that the recession might be close to over,” Roubini, who gained notoriety for predicting the global financial crisis, said today in Istanbul. While he sees a U-shaped recovery, there remains a “a risk” of “a double-dip recession.”
    
    “The recovery is going to be extremely anemic” in the U.S., Roubini said. “Growth will be below potential” and conditions in the labor market “are awful.”
    
    ‘Deep Trouble’
    
    “We will be dealing with the aftermath of the crisis for years to come,” IMF Managing Director Dominique Strauss-Kahn said today in a speech in the Turkish city. The IMF predicts the global economy will expand 3.1 percent in 2010, led by growth in Asia, after a 1.1 percent contraction this year.
    
    “Right now, the main issue is the question of reversing policies implemented to bolster economies from the crisis, Roubini said. Exiting from fiscal and monetary stimulus programs globally “is going to be a very difficult thing” and the timing of this is one of the factors that could lead to a double-dip recession.
    
    

    quote:

    schreef:

    He also said that some of the “optimism” in the financial markets “is excessive” and that the U.S. financial system is “still in deep trouble.”
    

    For the period from 2007 through 2010, banks’ writedowns on nonperforming assets will be $2.8 trillion worldwide, the IMF said this week in its semi-annual Global Financial Stability Report. Losses on bad assets are projected to increase from July 2009 through next year by $470 billion for euro-area banks, $420 billion in the U.S. and $140 billion in the U.K., the report said.
    
    The global economic recovery “is going to be difficult, it’s going to be slow,” Roubini said.
12. Ruud100 3 oktober 2009 11:00

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    Altijd leuk, die correcties op de cijfers achteraf in de de VS, een half jaar later komen we er achter dat we 824.000 banen te veel geteld hebben in de donkerste maand van het jaar...
    
    "The department disclosed that in March this year the economy held 824,000 fewer jobs than previously reported, making an already bleak picture worse."
    
    Jobs Report Highlights Shaky U.S. Recovery
    By PETER S. GOODMAN
    Published: October 2, 2009
    
    After several months in which the American economy flashed tentative signs of improvement, a sobering report on the national job market released on Friday amplified worries that a lengthy period of lean times lay ahead.
    
    The economy shed 263,000 jobs in September according to the Labor Department’s monthly snapshot of the employment picture.
    
    Though the job market worsened, the pace of deterioration remained markedly slower than during the early months of the year, when roughly 700,000 jobs a month were disappearing. That improvement seems consistent with the widespread belief that the recession has given way to economic growth.
    
    “This is a weak report,” said Stuart G. Hoffman, chief economist at the PNC Financial Services Group in Pittsburgh. “The rate of job loss has tapered off, but we still haven’t reached the point where businesses are willing to hire.”
    
    The Labor Department also made a preliminary revision in its survey of private employers that indicated the job market shrank even more during the recession. The department disclosed that in March this year the economy held 824,000 fewer jobs than previously reported, making an already bleak picture worse.
    
    Despite a $787 billion stimulus package adopted early this year and aimed in part at shoring up state and local coffers, government jobs slipped by 53,000 in September.
    
    “That’s the budget crunch hitting,” said Dean Baker, co-director of the Center for Economic and Policy Research in Washington. “We’re still losing jobs at a very rapid pace. We’re still looking at an economy with a lot of weakness.”
    
    The unemployment rate continued to inch toward double digits, a level last seen in June 1983. The so-called underemployment rate (which includes people whose hours have been cut, and those working part-time for lack of full-time positions, along with the jobless) reached 17 percent, the highest level since the government began tracking it in 1994.
    
    More jobs were lost last month, at 263,000, than were lost in August, as the Labor Department revised the August decline to 201,000 jobs from the 216,000 it initially reported.
    
    Most economists assume the economy expanded at an annual pace of about three percent from July through September. But debate focuses on the vigor and staying power of the recovery.
    
    The economic improvement in recent months largely stems from businesses cutting inventories at a slower pace. As some companies begin to rebuild stocks, the impact could wash through the economy for a few more months, adding jobs and moderating the overall decline.
    
    Then the underlying weakness of the economy will probably reassert itself, say experts. After years of borrowing against homes and cashing in stock to spend in excess of their incomes, many Americans are tapped out. Austerity and saving have replaced spending and investment in many households, constraining the economy.
    
    For those out of work, the job market looks harsher now than at any point in the recession. The number of people who have been jobless for more than six months increased in September by 450,000, reaching 5.4 million.
    
    “We have a truly massive crisis of long-term unemployment,” said Christine L. Owens, executive director of the National Employment Law Project in a statement, adding that nearly 400,000 jobless people had exhausted their unemployment benefits by the end of September. “Today’s employment report is a marching order for Congress to pass unemployment benefit extensions to all states, quickly.”
    
    The first signs of improvement are likely to be seen among temporary workers, say experts, as companies now hunkering down in the face of uncertain prospects take tentative steps to expand.
    But temporary help services lost 1,700 jobs in September.
    
    “Companies are extremely cautious,” said Roy G. Krause, chief executive of Spherion, a recruiting and staffing company based in Fort Lauderdale, Fla.
    
13. Ruud100 4 oktober 2009 11:36

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    www.nytimes.com/2009/10/04/business/e...
    
    The Cost of Saving These Whales
    
    By GRETCHEN MORGENSON
    Published: October 3, 2009
    
    AMID all the talk about systemic risk regulators, consumer protection and other fixes to our fractured financial system, there is a troubling silence on what may be the single most important reform: how to rid ourselves of banks that are so big and interconnected that their very existence threatens the world.
    
    Too big to fail is too hard to kill, it seems.
    
    During the credit bust, our leaders embraced the too-big-to-fail policy, reluctantly bailing out large institutions to save the system from collapse, they said. Yet even as the crisis has abated, these policy makers have shown little interest in cutting financial monsters down to size. This is especially disturbing given that some institutions have grown even larger as a result of the mess.
    
    It is perverse, of course, to reward big banks’ mistakes with bailouts financed by beleaguered taxpayers. But the too-big-to-fail doctrine benefits the banks in other ways as well: the implication that an institution will not be allowed to fall gives it significant cost advantages over smaller, perhaps more responsible competitors.
    
    Quantifying these advantages is difficult, though. While bailouts have numbers attached to them, hidden benefits, again subsidized by the taxpayer, are harder to assess. The result is that taxpayers may mistakenly believe that when a bailout recipient repays a loan, subsidies received by the institution have stopped.
    
    Because our government wouldn’t dream of calculating the hidden costs associated with the bailout binge — taxpayers might become even angrier than they already are — it is gratifying that the Center for Economic and Policy Research, a liberal research group in Washington, has taken a stab at the task.
    
    Dean Baker, an economist and co-director of the center, and Travis McArthur, a research intern, analyzed banks’ costs of money to compare the interest rate that smaller banks pay to attract deposits and borrow funds with the rate paid by behemoths perceived as too big to fail.
    
    Using data from the Federal Deposit Insurance Corporation, Mr. Baker’s study found that the spread between the average cost at smaller banks and at larger institutions widened significantly after March 2008, when the United States government brokered the Bear Stearns rescue.
    
    From the beginning of 2000 through the fourth quarter of 2007, the cost of funds for small institutions averaged 0.29 percentage point more than that of banks with $100 billion or more in assets. But from late 2008 through June 2009, when bailouts for large institutions became expected, this spread widened to an average of 0.78 percentage point.
    
    At that level, Mr. Baker calculated, the total taxpayer subsidy for the 18 large bank holding companies was $34.1 billion a year.
    
    Mr. Baker is the first to note that the expanding gap may not be attributable solely to the too-big-to-fail policy. Banks’ cost of money has risen during other times of economic uncertainty, like the recession of 2001. After that downturn, the cost-of-funds spread between small and large banks rose to 0.69 percentage point.
    
    Given that increase, Mr. Baker said, one could calculate a more conservative assessment of the too-big-to-fail subsidy. Using the difference between the spread during the last recession and the current figure, which is 0.09 percentage point, the annual subsidy for the large banks reached $6.3 billion.
    
    Mr. Baker says it is important to continue measuring this difference in costs to see whether the subsidy disappears or whether it is a continuing transfer of income. If the spread vanishes, it could indicate that rock-bottom interest rates and excessive market turbulence were responsible for the wide gap.
    
    “Recognizing that you can’t have a definitive answer to this, it is important to understand there is real money at stake,” he said. “There is a subsidy here, and we either have to say we are going to break up the banks and get rid of the subsidy, or if we don’t do that, then we have to be confident that we have put in enough regulation to offset the subsidy.”
    
    Such offsets could include higher capital requirements for large institutions or restrictions on assets that banks are allowed to hold, Mr. Baker said. You can be sure that financial institutions would object strenuously to any such changes — after all, they have little to lose when their own failure isn’t an option.
    
    If Mr. Baker is correct about the estimated size of the subsidy, the costs of too-big-to-fail are substantial when compared with other government programs. At $34.1 billion a year, the subsidy is more than twice the grant given under Temporary Assistance to Needy Families, a $16.5 billion program that helps recipients move from welfare to work. A $6.3 billion subsidy would be roughly what the government spent in 2008 on the Global Health and Child Survival program, an initiative aimed at preventing malaria, AIDS and tuberculosis.
    
    The subsidy also looms large when compared with bank profits. Mr. Baker’s estimate of $34.1 billion would be equal to almost 50 percent of projected profits this year at the 18 largest institutions. The $6.3 billion estimate would amount to 9.1 percent of expected earnings.
    
    In specific cases, the subsidies may even exceed a bank’s profits. For example, Mr. Baker’s assessment of the benefit provided to Capital One ranges from 31 percent of profits to a possible 166 percent. He calculates that the subsidy to Regions Bank ranges from 17 percent of its earnings to 92 percent.
    
    “This should concern policy makers,” Mr. Baker noted, “since it would imply that a substantial portion of the profits of the largest banks is essentially a redistribution from taxpayers to the banks, rather than the outcome of market transactions.”
    
    FORCING policy leaders to dismantle too-big-to-fail banks will not be easy. These institutions want to maintain the status quo, and they wield enormous power.
    
    Still, taxpayers have a right to know the extent to which those institutions are benefiting from the backstops that are in place. The analysis provided by Mr. Baker and his colleagues is an important step in this direction. Too-big-to-fail is already an extremely costly policy; the longer it is allowed to persist, the heavier this taxpayer burden will become.
14. Ruud100 7 oktober 2009 22:44

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    Fed says banks slow to take commercial losses
    
    WASHINGTON (Reuters) – The Federal Reserve told bank examiners last month that banks were slow to take losses on their commercial real estate loans that have suffered as property values sink.
    
    The Wall Street Journal initially reported the Fed's concern and Fed sources on Wednesday confirmed a presentation was made on the topic to regulators but described it as a training exercise for examiners about potential real estate issues.
    
    The Journal report said the presentation was made on September 29 by Fed analyst K.C. Conway, a senior real estate analyst at the Atlanta regional Fed bank.
    It suggested that regulators were preparing for a rerun of housing-related losses that plagued many banks after the residential property bubble burst, the newspaper said.
    
    Fed sources said the intent was to provide examiners who work directly with banks with training they might need to evaluate emerging risks.
    Conway's report predicted commercial real-estate losses would reach roughly 45 percent next year, the Journal said.
    
    According to the paper, the report said that the most "toxic" loans on bank books were interest-only loans, which get no benefit from amortization, since it requires borrowers to repay interest but no principal.
    The Journal said the report also stated that banks have been slow to absorb the losses on their loans, partly due to "capital preservation" concerns.
    
    Apartment vacancy rate jumps
    
    Despite landlords willing to cut rent, the U.S. apartment vacancy rate rose to 7.8% in Q3, its highest since '86, said real estate research firm Reis. Vacancies have been rising for the past 2 years, and Reis expects the vacancy rate to pass 8% -- maybe in Q4, certainly by '10. The asking rental rate fell 0.5% to $1,035 a month, the 4th straight quarterly decline. Loans on apartment buildings have led the industry in defaults, with hotels a close second.
    
    Consumers cut borrowing by $12B in August
    
    By CHRISTOPHER S. RUGABER, AP Economics Writer
    WASHINGTON – Consumers reduced their borrowing for the seventh straight month in August, as households worked to pay off debt and banks reduced credit card limits.
    
    Americans are saving more and borrowing less as widespread job losses, stagnant wages and dwindling home values have spurred a move to greater frugality. While that's a positive trend in the long run, economists say, it can weaken the fledgling recovery as consumer spending powers about 70 percent of the economy.
    
    The Federal Reserve said Wednesday that total consumer debt outstanding fell in August by $12 billion, a 5.8 percent annual rate. That follows a downwardly revised drop of $19 billion, or 9.1 percent, in July. Wall Street economists expected a $10 billion decline in August.
    
    "Consumers are clearly becoming much more conservative about their spending habits (and) paying down debts," said Zach Pandl, an economist at Nomura Securities. "This is likely to continue."
    
    The declines reflect both a drop in demand for credit by consumers, as well as tighter standards among banks and other lenders.
    
    Total consumer credit outstanding is now $2.46 trillion, down about 4.6 percent from its peak in July. The Fed's report covers credit cards, store cards, auto and other personal loans. It doesn't include mortgages or other real-estate related debt.
    
    The retrenchment in August occurred even as consumer spending increased 1.3 percent, according to a report last week from the Commerce Department. That suggests consumers are increasingly buying with cash rather than credit, Pandl said.
    
    The Cash for Clunkers auto rebate program helped boost personal spending in August. Economists noted that auto loans and other non-revolving debt dropped only 1.6 percent that month, according to the Fed, compared with a 12.6 percent fall in July.
    
    Credit card debt, meanwhile, fell 13.1 percent, its steepest drop since February.
    
    That may also reflect cuts in card limits. A report earlier this year by FICO, which produces the most widely known credit scores, found that companies slashed limits for an estimated 58 million card holders in the 12 months ended in April.
    
    Retailers already are bracing for another meager holiday season. The National Retail Federation said Tuesday that it expects sales during November and December to fall 1 percent from last year. While that's not as steep a drop as in 2008, last year's holiday sales saw the worst annual drop on records dating to 1967.
    
    The NRF also expects retail sales for all of 2009 to fall 3 percent.
15. Ruud100 8 oktober 2009 22:44

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    Roubini says housing market hasn't bottomed
    Reuters
    
    By Walter Brandimarte – Thu Oct 8
    
    NEW YORK (Reuters) – U.S. housing prices may still fall more than 10 percent, killing an incipient recovery, as demand from first-time home buyers fades, leading economist Nouriel Roubini said on Thursday.
    
    Roubini, one of the few economists who accurately predicted the magnitude of the financial crisis, said massive losses in commercial real estate loans will add to the problem, forcing banks to raise more capital.
    
    "The stress is moving from residential mortgages that are still in deep trouble, to commercial real estate, where they are just starting to recognize that they're going to have massive, massive losses," Roubini of RGE Global Monitor told reporters after a presentation for a World Economic Forum report on the global financial system.
    
    U.S. home prices rose for the third straight month in July, raising hopes the market is stabilizing after a three-year plunge.
    
    A first-time buyer credit of $8,000, which is set to end on November 30, has jump-started housing activity this year and has helped reduce a massive inventory of unsold homes.
    
    While the number of unsold houses may have bottomed out, prices are poised to fall further, increasing pressure on the economy again, Roubini said.
    
    One of the main risks next year may be from losses on some $2 trillion in outstanding commercial real estate loans, the economist predicted.
    
    "Half of this is in medium-sized and smaller banks, and even in the larger ones. Most of these losses are not recognized because they're keeping the loans at face value on their books," he said, forecasting that U.S. and U.K. banks will need to raise more capital when those writedowns are made.
    
    Still, Roubini sees a greater chance of a U-shaped economic recovery in developed economies, with a 20 percent to 25 percent chance of a double-dip.
    
    "If it's a U-shaped recovery, China, Asia, and emerging markets will do fine. If there is a double dip, the consequences will be severe for everybody."
16. Ruud100 8 oktober 2009 23:03

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    Meltdown 101: What is a short sale of a home?
    AP
    
    By J.W ELPHINSTONE
    
    NEW YORK – For a homeowner who needs to sell but has a mortgage balance higher than the property value, one option is something called a "short sale."
    
    And don't let the name fool you. This type of sale is complicated and can drag on for months.
    
    So what exactly is a short sale? Here are some questions and answers.
    
    Q: What is a short sale?
    
    A: A short sale happens when a lender allows a borrower to sell his home for less than what's owed on the mortgage. The lender usually forgives the difference and considers the debt repaid.
    
    Q: How often do short sales occur?
    
    A: Short sales now make up about one in every 10 home sales, according to the National Association of Realtors. That's a lot more than you usually see when the housing market isn't distressed — in fact, the NAR doesn't have historical records on short sales before the current downturn because they were such an insignificant segment of the sales market.
    
    Falling home prices have eroded home equity at a rapid place, making short sales more commonplace. About 16 million homeowners owe more than their homes are worth and would have to seek a short sale if they were forced to sell their homes now.
    
    Q: What's in it for the lenders?
    
    A: Lenders minimize their losses. If the borrower defaults and the bank has to foreclose, there are extra costs to auction the property and maintain it while it's vacant. Foreclosed homes also typically sell for much less than short sales.
    
    Q: What are the drawbacks for the borrower?
    
    A: While not as bad as a foreclosure, a short sale will still blemish a borrower's credit report. A short sale would knock an "A" borrower down to a "B" borrower, while the same borrower would fall to "D+" after a foreclosure, said Ritch Workman, co-owner of Workman Mortgage in Melbourne, Fla.
    
    The extent of the damage also depends on the borrower's credit history before the short sale. A borrower with good credit won't get hit as hard, while a borrower with tarnished credit will feel more pain.
    
    Normally, a borrower would have to pay taxes on the forgiven part of the balance, though the Bush Administration granted homeowners a reprieve that applies to debt forgiven through 2012.
    
    Q: Why is the process so complicated and why does it take so long?
    
    A: Short sales are plagued with snags on both sides. Desperate sellers or inexperienced real estate agents often send in the wrong paperwork, only to get it kicked back. It's an easy mistake to make because each lender requires different documents.
    
    For their part, lenders don't have enough staff to handle the flood of short sale applications. It can take months before a lender will get back to a seller about an offer from a potential buyer. Some deals take more than year to finish.
    
    And approvals from third parties — such as private mortgage insurers, Fannie Mae or Freddie Mac, and lenders who hold a second mortgage on the house — also can slow a short sale.
    
    In May, the Obama Administration promised to standardize documents and offer incentives to mortgage servicers, borrowers and second mortgage holders to encourage timely short sales. The Treasury Department has yet to release specific guidelines to lenders, which will take months to implement.
    
    Q: What should I do if I'm interested in a short sale?
    
    A: Most lenders will approve a short sale only if the borrower is behind on his mortgage, but some are now considering non-delinquent borrowers because they don't want them to walk away from their mortgages, said Pava Leyrer, president of Heritage National Mortgage in Michigan.
    
    
17. Ruud100 9 oktober 2009 23:24

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    Panel Cites Shortcomings in Foreclosure-Fighting Plan
    
    A congressionally created financial watchdog warned on Friday that an Obama administration plan to stem foreclosures will be insufficient to keep millions of Americans from losing their homes.
    
    A report from the Congressional Oversight Panel -- created to oversee the $700 billion financial industry bailout -- found that a Treasury-run foreclosure-prevention program is "targeted at the housing crisis as it existed six months ago, rather than as it exists right now."
    
    The panel doubted whether the Home Affordable Modification Program (HAMP) will be able to meet its goal of preventing 3 to 4 million foreclosures using some $50 billion in bailout funds.
    
    While the mortgage crisis began in the subprime loan market, rising unemployment and a deep recession have put more families in danger of foreclosure.
    
    "HAMP was not designed to address foreclosures caused by unemployment, which now appears to be a central cause of nonpayment, further limiting the scope of the program," the panel found.
    
    The report also concluded that homeowners could still end up losing their homes after their loans have been modified. Many of the existing modifications have failed to yield long-term changes in loan terms, meaning "foreclosure is delayed, not avoided."
    
    The panel suggested the Treasury revamp the program, with an eye toward reaching more borrowers and making loan modifications permanent.
    
    The panel's Republican members dissented with the report's findings. Rep. Jeb Hensarling, R-Texas, said "instead of focusing its attention on taxpayer protection and oversight, the Panel's majority report implies that the administration should commit additional taxpayer funds in hopes of helping distressed homeowners -- both deserving and undeserving -- with a taxpayer subsidized rescue."
18. Ruud100 18 oktober 2009 11:54

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    news.yahoo.com/s/usnews/20091016/ts_u...
    
    Foreclosure Epidemic Reaching More Expensive Homes
    
    U.S. News & World Report
    By Luke Mullins Luke Mullins – Fri Oct 16, 2:46 pm
    
    A recent report by a congressional oversight panel highlighted the changing nature of the housing crisis by suggesting that the Obama administration's sweeping anti-foreclosure initiative might not be suited to address the mortgage delinquency epidemic as it exists today. The initial portion of the foreclosure mess was triggered in large part by over-leveraged borrowers who got in over their heads with resetting mortgage products and homes they couldn't really afford. But today, as the unemployment rate heads for 10 percent, a growing number of borrowers with good credit are heading into foreclosure after losing their jobs. However, the Obama administration's housing rescue "was not designed to address foreclosures caused by unemployment, which now appears to be a central cause of nonpayment," the panel said in the October 9 report. "The foreclosure crisis has moved beyond subprime mortgages and into the prime mortgage market. It increasingly appears that [the Obama administration's housing rescue] is targeted at the housing crisis as it existed six months ago, rather than as it exists right now."
    
    Last week, real estate company Zillow released some figures that further demonstrate the troubling evolution of the housing crisis, as an increasing number of upper-tier homes are now heading into foreclosure. At the peak of the real estate market back in 2006, homes in the top third of the property value spectrum made up just 16 percent of foreclosures nationwide, Zillow says. But by July of this year, this most expensive segment of the market accounted for 30 percent of home foreclosures. "That means that top-tier homes make up almost twice the proportion of foreclosures as they did just three years ago," Zillow Chief Economist Stan Humphries said in a statement accompanying the data.
    
    

    quote:

    schreef:

    Meanwhile, home foreclosures at the lower end of the market are trending in just the opposite direction. Properties in the bottom third of the home value spectrum represented 55 percent of all foreclosures in 2006, but just 35 percent in July. Humphries believes the trend reflects a significant change in the types of mortgages that are going bad these days. "High delinquency rates in Prime, Alt-A and Option ARM mortgage products and declining cure rates (the rate at which borrowers resolve their delinquency status) are resulting in many more foreclosures among borrowers outside of the sub-prime mortgage market (and in higher priced segments of the market)," he said.
    

    While subprime borrowers are still a factor in the current foreclosure epidemic, it's becoming increasingly apparent that the labor market is the driving force behind the mortgage crisis we face today. Mounting job losses are turning once-well qualified buyers of high-priced homes into foreclosure victims.
19. Ruud100 8 november 2009 12:37

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    Artikel op zich is minder interessant. Belangrijker zijn de bedragen die genoemd worden in de vergelijking 1982, 2009. Hoe stond de gemiddelde amerikaan er toen voor tov de huidige crisis. Bijv. in 2011 zal 27% van alle kinderen in de VS in armoede leven....
    
    Het echte werk van Obama moet nog beginnen.
    
    Gr
    Ruud
    
    news.yahoo.com/s/ap/20091108/ap_on_bi...
    
    Jobless: 10 percent is tougher than it used to be
    AP
    
    By JEANNINE AVERSA, AP Economics Writer Jeannine Aversa, Ap Economics Writer – Sun Nov 8, 12:00 am ET
    
    WASHINGTON – It hurts more to be unemployed now than the last time the jobless rate hit 10 percent.
    
    Americans have more than triple the debt they had in 1982, and less than half the savings. They spend 10 weeks longer off the job. And a bigger share of them have no health insurance, leaving them one medical emergency away from financial ruin.
    
    For these reasons, the unemployed are more vulnerable today to foreclosure and bankruptcy than they were a generation ago.
    
    Donald Schenk knows. He's been without work both times. It's worse now, he says. Back in the early 1980s, when Schenk lost his job at a phone company, he was able to find several temporary jobs — including one testing pinball machines — to make ends meet until he landed full-time work nearly two years later.
    
    But now Schenk, 55, of the Chicago suburb of Schaumburg, Ill., has been seeking work for a year and a half after losing his information technology job. Potential employers aren't interested "if you are not a perfect fit," he says.
    
    The unemployment rate hit 10.2 percent in October. All told, 15.7 million Americans are out of work. Add in workers forced to settle for part-time work or those who have simply given up looking, and the rate is 17.5 percent.
    
    Only twice since World War II has unemployment topped 10 percent — now and from September 1982 to June 1983. In a few respects, life is better today for the unemployed than it was then.
    
    And thanks in part to higher home values, Americans are worth more now. Measured in 2009 dollars, net worth comes to about $173,000 per person, compared with $94,000 in 1982, according to Lynn Reaser, president of the National Association for Business Economics.
    
    A much larger share of jobs these days — more than four out of five — are in the service sector, such as tax preparers, hair stylists and retail clerks. Those jobs generally pay less and offer fewer benefits than blue-collar manufacturing work.
    
    Manufacturing, which typically offers more generous benefits, accounts for less than 9 percent of payrolls today — down from 19 percent in 1982.
    
    Back then, the United Auto Workers persuaded the Big Three auto companies to pay up to 95 percent of the gap between a laid-off worker's unemployment benefits and what he or she made on the job.
    
    Unemployment also squeezes families tighter these days because they are less conservative about how they spend and save.
    
    People carry an average of about $46,000 in debt — mortgages, credit cards, auto loans and other consumer debt. That's a far bigger load than in 1982, when per capita debt totaled about $14,000 in today's dollars.
    
    And savings, as a percentage of after-tax income, was only 2.7 percent last year, down from 10.9 percent in 1982. Americans stashed an average of just $940 last year, compared with $2,537 in 1982. That helps explain why the foreclosure rate runs about seven times higher today.
    
    Not surprisingly, that means more Americans — about three times as many — are going bankrupt.
    
    Lawrence Mishel, president of the left-leaning Economic Policy Institute, says the ripple effects of the rising unemployment rate will be felt for years. He predicts the poverty rate for children will rise to 27 percent in 2011, from 18 percent in 2007. "It will scar a generation of kids," he says.
    
    And government surveys suggest that if you get laid off, it's more likely to be for good. Today's unemployed have been out of work about half a year on average. In the early 1980s, they spent about four months without jobs.
    
    One reason is that industries such as construction and finance may never bulk back up to pre-recession levels. Even before the economy went south, demand for their products was inflated by the housing bubble.
    
    Another reason layoffs are more permanent: Manufacturers these days are more aggressive about using technology to boost productivity — or they hire cheaper workers overseas as the economy improves.
    
    The government program lets today's workers keep their insurance for 18 months after a layoff. But the premiums can be steep — up to $1,137 a month for families and $410 for individuals.
    
    For those who lose jobs today, the safety net is much flimsier.
    
    Layoffs have forced some older workers into retirement, yet fewer of them can fall back on traditional pensions that pay a steady monthly sum. Only 11 percent of active workers have a traditional pension, according to the Employee Benefit Research Institute. That's down from 50 percent in 1982.
    
    Instead, more workers today have 401(k)-type retirement plans. But those have suffered huge hits in this downturn. The Standard & Poor's 500 index fell as much as 57 percent earlier this year from its October 2007 peak and is still down about 32 percent.
    
    Schenk, who has had dozens of jobs interviews, says it's a struggle to remain upbeat and to keep searching. He knows for sure that one bad economic indicator is higher nowadays than a generation ago: He worries more. "Back then it seemed like certain jobs were hit and you could still find those short little gigs," Schenk says. "This time it hit everything."
    
20. Ruud100 14 november 2009 13:08

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    www.nytimes.com/2009/11/14/business/1...
    
    JPMorgan Faces New Suit in Alabama County’s Woes
    
    By MARY WILLIAMS WALSH
    Published: November 13, 2009
    
    Even after a $700 million settlement with the federal government, JPMorgan Chase still faces troubles in Alabama.
    
    On Friday, Jefferson County sued the bank, seeking additional relief on $3.2 billion in county sewer bonds the bank helped underwrite. Under the previous settlement, the county will receive $50 million and will not have to pay the bank $650 million in fees. But the county says it needs more help to get out from under the huge debt that remains.
    
    The county, which includes Birmingham, accused JPMorgan of fraud and conspiracy in selling it several packages of debt and derivatives known as interest rate swaps that “provided no value to the county or its citizens, and created an inherently flawed financial structure that imploded within just a few years.”
    
    The bank issued a statement in response to the lawsuit, saying: “We believe the claims are meritless and we intend to defend ourselves vigorously. Meanwhile, we continue to work to achieve a responsible restructuring of Jefferson County’s financial affairs.”
    
    Under the settlement with the Securities and Exchange Commission, announced earlier this month, the bank did not admit any wrongdoing.
    
    In its new lawsuit — against JPMorgan Chase, its securities division and others — the county cited many of the same details in the S.E.C. complaint, but asked the court to order JPMorgan and others to produce the supporting documents. The commission has extensively investigated Jefferson County’s financial debacle but has not shared its evidence, as a matter of policy.
    
    The county’s new lawsuit gave a sense of the heated competition for its business and how it could be manipulated, describing efforts by JPMorgan to fend off two other firms, Goldman Sachs and the Rice Financial Products Company. The complaint said two employees of the bank’s securities division, Charles E. LeCroy and Douglas W. MacFaddin, worked out a deal to pay rivals “to stay out of the deal.”
    
    JPMorgan wired $1.4 million to Rice Financial, according to the complaint, and transferred $3 million to Goldman Sachs through a separate derivatives contract created just to make the payment. The president of the county commission at the time, Larry P. Langford, then awarded most of the county’s business to JPMorgan.
    
    Afterward, Goldman Sachs wrote to Mr. Langford and recommended that the payments be properly reported in the county’s bond documents, but Mr. Langford did not do so.
    
    Mr. Langford, was convicted in October of accepting luxury gifts and cash totaling $235,000 in connection with the scheme.
    
    Lawyers for Mr. LeCroy and Mr. MacFaddin have said the two men did nothing wrong and expect to be vindicated.
    
    As the dealing continued, Jefferson County ended up with a “radically different” risk profile, according to the complaint. The county said in its complaint that it could not pay down the debt, and that rating agencies had downgraded its overall creditworthiness, so that it now had to pay more to finance its schools and other services. It hopes to press JPMorgan to reduce the interest rate and the principal.
    
    “This whole process has been tainted,” a county commissioner, Bobby Humphryes, said after a heated meeting this week. “It has been corrupt. People made money off of it that didn’t do a bit of work, and I don’t think there is any reason we should even think about making these people whole.”
    
    Kyle Whitmire contributed reporting.