bank run blog

Amid the nervous chatter about green shoots and imminent recovery, it is difficult for anyone outside the deluded and lavishly subsidized financial sector or its laptop-wielding lapdogs in the business media to get too optimistic, as they are buffeted by reports of record foreclosures, record commercial bankruptcies, and, today, record unemployment.

The latest figures from the federal government put the national U3 rate at 9.4 percent, with the U6 at 16.4 percent. According to the Associated Press :

“The unemployment rate in the West jumped over 10 percent last month, the first time that regional threshold has been broken in about 25 years. On the state level, eight set record-highs and only two — Nebraska and Vermont — did not report increases.

The Labor Department reported Friday that 48 states and the District of Columbia saw employment conditions deteriorate last month. The fallout from the longest recession since World War II, was the worst in Michigan as automakers cut tens of thousands of jobs. Its unemployment rate rose to 14.1 percent.

The West region reported the highest jobless rate at 10.1 percent. The last time any region had a rate of at least 10 percent was September 1983, when the country was emerging from a severe recession.

The region is home to California, where the jobless rate jumped to a record 11.5 percent last month, Nevada, where it’s a record 11.3 percent, and other states that have been slammed when the housing boom went bust — snatching jobs and wealth.

The other six states that set new highs on records dating to 1976 were: North Carolina, Oregon, Rhode Island, South Carolina, Florida and Georgia.”

The situation is no longer confined to the Western region, or to the worst of the residential bubble states, as deteriorating fundamentals undermine the US economy in more serious and lasting ways than even during the 1930’s. CNN reports that thirteen states now have official unemployment rates above 10 percent :

“Several states and regions posted their highest unemployment rate since the report debuted in 1976.

Over the year, jobless rates were higher in all 50 states and the District of Columbia.

Michigan once again led the nation with a 14.1% jobless rate, up from 12.9% a month earlier, followed again by Oregon at 12.4%, up from 12% in April. Thirteen states have rates above 10%.”

Associated Press : Jobless rate in Western US tops 10 percent

CNN Money : Jobless rate rises in nearly all states

Bureau of Labor Statistics : The Employment Situation : May 2009

With no easy credit and many US workers unemployed, vacationers are becoming stay-cationers in foreclosureland leaving America’s getaway spots in dire straights. This segment from CBS focuses on how the economic downturn has even dimmed the lights in America’s favorite bingo hall, Las Vegas.

“The Folies Bergere opened at the Tropicana in 1959…the Tropicana’s owners, battling bankruptcy, announced they are closing the Folies for good.” CBS News

“Like nearly 60 percent of the people in Las Vegas with a mortgage, (Tanya Rucker) owes more than her house is worth.” CBS News

Rumors this morning that a Chrysler bankruptcy is imminent. It could just be a way of clearing some of the debt to make the company more attractive to Fiat, the sole suitor. The AFP is reporting :

“The US Treasury is pressing Chrysler to prepare to file for bankruptcy as early as next week, regardless of whether the troubled automaker ties up with Italy’s Fiat before an April 30 deadline, US media reported.

Chrysler would file for Chapter 11 bankruptcy protection if it reached a deal with its lenders, allowing Fiat to pick from the existing operations as part of a plan agreed to in principle by the United Auto Workers union, the Wall Street Journal said, citing people familiar with the matter.

President Barack Obama’s administration has told Chrysler it will make available up to six billion dollars in new financing if it can work out a deal by the end of the month that would give it a chance for survival.

The administration, which has already provided four billion dollars in loans, has given Chrysler until April 30 to sign a deal or have its bailout money cut off, which could lead to the company’s collapse.”

Agence France-Presse : US seeking Chrysler bankruptcy plan: reports

Detroit Free Press : Treasury readies for Chrysler bankruptcy

Spokesmen for General Motors have confirmed reports that the company will idle 13 plants for as much as 11 weeks over the summer in an effort to trim production and cut costs. Many auto industry analysts are predicting that at least some of the closed plants will never reopen. According to the Associated Press :

“General Motors Corp. said Thursday it will temporarily close 13 assembly plants in the U.S. and Mexico — some for more than two months — laying off nearly 24,000 workers to pare back a bloated inventory.

The closures, which will start in May, vary by factory from as short as three weeks to a long as 11, including the normal two-week July shutdown to change from one model year to the next.

GM said the shutdowns will help control high dealer inventories and bring manufacturing in line with sales. The company plans to cut production by 190,000 vehicles and reduce inventory from the current 767,000 to 525,000 by the end of July.

About 24,000 hourly and salaried employees will be laid off at the affected assembly plants, but there will be thousands more layoffs and temporary factory closures when GM works out its schedules for engine, transmission and parts stamping factories.”

Associated Press : GM to temporarily shut 13 plants, cut production

Wall Street Journal : GM Reducing Output To Align With Demand

The Sacramento, CA tent city, having been featured on national and international news- and even popping up in a mainstream media photo essay where photographs of the 2009 tent city were displayed alongside images of a tent city in Sacramento that sprung up during the last depression, in the 1930s, has been slated to be shuttered by an agreement between shamed city and state officials. The plan to close the internationally known homeless encampment calls for the finding funds to “add beds” for the homeless at local shelters.

In this segment from a local NBC affiliate that was broadcast nationally on NBC’s morning program, announcer Matt Lauer describes the conditions in depression-era Sacramento;

“If you want to see the impact of the economic downturn on average Americans, look no further than Sacramento California. The city’s unemployment rate is growing at an alarming rate, as people who just a few months ago had decent jobs suddenly find themselves with no place to go.”

This segment from KCRA TV in Sacramento asks, “who are the residents of tent city?” as reporters spend a week in the encampment finding the unemployed, the mentally ill, the recent and long-term dispossessed- all citizens who may be homeless but are “not hopeless”;



Although it took world-wide exposure to get local and state officials thinking about the ramifications of the Golden State’s capitol hosting the tent city, Governor Schwarzenegger announced recently in a very hopeful statement that the displaced jobless families and individuals “deserve more secure and more hygienic conditions…reliable health care and warm meals;” a stance that can hardly be refuted and that should surely be applied on the broadest possible terms.