OpEdNews - Page 3 of Article: Monetary and Fiscal Failure, Fraud, and Fear of What's Next

On March 12, the Wall Street Journal online reported that "General Electric Co. and its finance arm (GE Capital) have lost their coveted AAA long-term credit rating from Standard & Poors Ratings Service" when the agency cut it to AA+ in a move many analysts think was long overdue but not enough given the company's troubled state.

On the same day, Bloomberg reported that Fitch Ratings "cited concern about (B-H's) potential for losses on (its) equity and derivatives holdings" in cutting it to AA+ and its senior unsecured debt to AA." Bloomberg added: "Some investors (believe) the derivatives may saddle (B-H) with billions of (future) losses."

Economists and Financial Writers on The Global Research News Hour

Notable ones like F. William Engdahl, Michael Hudson, Ellen Brown, Jack Rasmus, Richard Wolff, John Bellamy Foster, and John Williams continue explaining the nature and consequences of the global economic crisis, and how it affects ordinary people. For example, Rasmus and Williams believe that the economy lost from 800,000 - 1,000,000 jobs for the past four months (not the Labor Department's lower figures) on top of all those lost earlier, and no end to the carnage is in sight.

According to the Economic Policy Institute (EPI), over 23 million Americans were either out of work or underemployed in February, and the numbers are growing. In addition, 60.3% of the population has some form of employment, down from 63.4% in December 2006. EPI reported that BLS figures show job openings fell 7.2% in January to three million, down 32% from year end 2007. Currently there are over four unemployed workers for every job, and seekers "are seeing their chances of finding (employment) grow ever dimmer."

Reports are that jobs are being lost at the rate of one every five seconds, and according to Manpower International's US employer survey, hiring plans are the lowest since the company began polling in 1982. A slim 1% of firms expect to hire in Q 2, down from 10% in Q 1 and off 15% from Q 2, 2008. A company official said: "That's about as bad as it gets with our survey," but it looks like worse is still ahead.

Consider the latest initial jobless claim filings for the week ending March 6 - a record 654,000 following the previous week's upwardly revised 645,000. People getting benefits for more than a week increased by 193,000 to 5.3 million, another record high, and it's the sixth time in the past seven weeks that new records have been set. The proportion of the work force getting unemployment benefits is the highest since June 1983 when the economy began emerging from a deep recession. One year ago, only 2.8 million got benefits. Today the numbers are skyrocketing with no end of it in sight. It shows in the monthly payroll data.

In his latest ShadowStats report, Williams said February's payroll loss was 899,999 and unemployment reached 19.1%, when discouraged and involuntary part-time workers are included. He compared it to Great Depression 25% levels but noted then they may have been higher because measures included only non-farm workers at a time agriculture was over one-fourth of the economy and farm labor much greater in numbers than today. According to the US Department of Agriculture, it's now less than 2% of all workers so its impact on employment is marginal.

Challenger, Gray & Christmas (CG&C) tracks monthly announced job cuts, now making grim reading. On February 4, it reported:

"Company layoff announcements were unusually heavy in January, indicating that the shock to the labor force is increasing in intensity and pointing to severely depressed readings in Friday's employment report." CG&C cited 241,749 compared to 166,348 in December, or the highest figure since the end of the last recession. By comparison, January layoffs a year ago were only 74,986. Of great concern is how much higher numbers will go and for how many more months.

CG&C's February total slipped to 186,350, but it cautioned to "distinguish between layoffs scheduled for the short-term or the long-term, or whether job cuts are handled through attrition or actual layoffs." Most important is the trend, not monthly blips up or down that obscure it, and the latest home foreclosure data aren't reassuring.

On March 11, Dow Jones Newswires reported that completed US foreclosures soared 67% in February over January, putting them at their highest since the start of the crisis, according to Foreclosures.com.

Most worrisome is that they came in spite of Fannie, Freddie, and several major banks putting a temporary halt to the process, yet it persists at severely high levels. In addition, pre-foreclosure filings (an indicator of future foreclosures) jumped 27% to 207,703, topping December's highest ever number by 9%. Three of the hardest-hit states continued impacted with California soaring 67% from January, Florida 42%, and Arizona more than doubling. The data suggest more of the same ahead with perhaps millions more homeowners facing loss of their most valued asset and little in the way of government help to prevent it.

Citigroup on the Ropes, or Are They?

Believe the former despite its CEO saying that January and February were profitable. Take it with a grain of salt given its $37 trillion derivatives portfolio, much of it toxic, and its stock price at a buck - until The New York Times published a "leaked" confidential memo from Vikram Pandit to employees saying the company was on track for its best quarter since late 2007 when the market started to implode.

Left out was how numbers are calculated - based on operating, not reported earnings, excluding lots of write-offs but mostly ones left undeclared hoping investors won't notice and think the bank healthy again. On March 10, the market responded positively with Citi and other financials doing best, but for how long. Nothing changed in a very weak economy, and Citi is among the sickest banks in it, insolvent and on the edge of bankruptcy or being nationalized.

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