Thursday, March 05, 2009

The Financial Crisis

I know it has been a long time but I am back. Life gets busy and blogging can get pushed back on a list of priorities. The big story the last few months has been the Financial Crisis. I have been watching the reporting on this story and have had questions.

How bad is the situation?

Is the media hyping the situation?

Are politicians making the situation sound worse to gain political power?

Is this just a cycle the economy is going through and if left alone, will it correct itself soon?

Will this crisis lead to something far worse than anyone can imagine?

It is really hard to answer the above questions. I am going to try to cover this situation as in-depth as I can and ppint people to the best information possible.

Let's look at some of the latest reports.

General Motors Crash Warning

General Motors sees signs pointing to the end of the road. On Thursday, a regulatory filing revealed that accounting firm Deloitte & Touche, the company's auditor, has "substantial doubt" the disturbed automaker can stay in business.

The warning was not necessarily surprising, but investors treated it as if it were. Shares of GM fell 15.5%, or 34 cents, to close at $1.86, in trading in New York on Thursday. Over the past year, the automaker's stock value has lost 91.9%.

Here is the link to the original report: GM

Texas unemployment rate jumps to 6.4 percent

AUSTIN, Texas — The Texas unemployment rate jumped to 6.4 percent in January and the state lost jobs for the third consecutive month, the Texas Workforce Commission reported Thursday.

The unemployment rate jumped nearly a percentage point from the revised December figure of 5.6 percent, and the state's seasonally adjusted nonagricultural employment fell by 75,800 jobs, according to commission figures.

Texas showed a net loss of 5,300 jobs over the year despite months of strong job growth early last year. Nationally, 3.5 million jobs were lost during the same period, and the U.S. unemployment rate has risen to 7.6 percent.

"The national economic crisis is beginning to have a serious, negative impact on our Texas economy," commission chairman Tom Pauken said in a statement.

The manufacturing sector was hammered in January, shedding 38,100 jobs. Trade, transportation and utility wasn't much better, losing 26,600 jobs.

Here is the link to the rest of the report: Texas

Mortgage woes break records again in 4Q

NEW YORK (AP) — Foreclosures are spreading by epidemic proportions, expanding beyond a handful of problem states and now affecting almost 1 in every 8 American homeowners.

It's an economic role-reversal: The economy, driven down by the collapse of the housing bubble, is causing the housing crisis to spread.

Figures released Thursday show that nearly 12 percent of all Americans with a mortgage — a record 5.4 million homeowners — were at least one month late or in foreclosure at the end of last year.

That's up from 10 percent at the end of the third quarter, and up from 8 percent at the end of 2007. In addition, the numbers now include many once-qualified borrowers who took out fixed-rate loans.

Data from the Mortgage Bankers Association also showed that a stunning 48 percent of homeowners who have subprime, adjustable-rate mortgages are behind on their payments or in foreclosure.

The reckless lending and borrowing practices in states like Florida, California and Nevada that were the epicenter of the problem are no longer driving up the nation's delinquency rate.

Here is the link to the original report: 4Q

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> posted by Trevor Hammack @ 9:03 PM   1 comments links to this post


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