U.S. Economic/Financial News
Bottom Falls Out of Auto Sales; More Plants To Close
July 1 (EIRNS)A new wave of shutdowns of auto plantsa core component of the machine-tool capability of the U.S. economyhas been triggered by the collapse of auto sales in the United States.
Chrysler Corp., whose June sales fell by a shocking 36% from a year earlier, and is rumored to be on the block of its hedge fund owner Cerberus, is shutting down its St. Louis center of assembly. Chrysler announced indefinite shutdown of the St. Louis South assembly plant, laying off 1,500 workers ("We see no need for the capacity in the future," said President Tom LaSorda); and the layoff of 900 more at the St. Louis North assembly plant. Ford auto assembly in St. Louis was shut down in early 2007, and now the parts plant of Canada-based Magna International in the area is threatened.
Automakers are shutting plants which were not even on the national list of 65 targetted plants, published in May 2006 by EIR (31 of them have closed since). The Chrysler St. Louis plants were not considered threatened then; neither were the GM plants in Janesville, Wisc., and in Ontario, and several Ford plants which are now to be closed.
The bottom fell out of the depressed U.S. auto sales market in May and June, as Americans lost their jobs and/or were hit by hyperinflation in fuel, food, and many other costs. The June sales of the top six automakers (GM, Toyota, Ford, Chrysler, Honda, and Nissan) combined, were down a full 20% from one year ago.
Los Angeles, Miami Home Foreclosure Rates More Than Double
July 2 (EIRNS)New foreclosures almost quadrupled in Los Angeles, and doubled in Miami, in the second quarter, with as much as $5 billion worth of loans going bad in Los Angeles alone, according to PropertyShark.com. The number of homes scheduled for auction in Los Angeles rose to 14,505, compared with 3,797 in the same period a year earlier. In Miami-Dade County, Florida, the number climbed to 2,677 from 1,282.
The percentage of U.S. homes in foreclosure more than doubled since December 2006 to about 2.5% last March, according to the Washington-based Mortgage Bankers Association.
In New York City, foreclosures climbed 49%, and in Seattle foreclosures in the quarter rose 48% from a year earlier.
The number of foreclosure sales slated in Los Angeles jumped 63% in the second quarter from the first quarter. The figure rose 28% in Seattle, 20% in Miami, and 5% in New York.
Unemployment on the March in Financial Crisis
July 3 (EIRNS)Working people of American households in the "lower 80%" by income, are not only being clobbered by inflation in fuel, food, health care, and local taxesmore and more are losing their jobs. Two reports from the government on July 3 showed more trouble for the labor force and its core industry. The Bush "stimulus" has only fed the inflation, doing nothing for the jobs, as economist Lyndon LaRouche forecast.
New unemployment claims broke the so-called "recession level" of 400,000 in the week ending June 28, hitting 404,000. The steadily climbing four-week moving average of new unemployed hit 390,500, up 30% since the end of 2007. The monthly report on total U.S. employment in June was another disaster: 438,000 jobs have been eliminated, net, in the first six months of 2008, including 250,000 well-paying manufacturing jobs and 120,000 jobs in construction. But in June, the biggest loser was "business and professional services" jobsthe Wall Street banks and brokerages, the mortgage and insurance outfitswhich dumped 51,000 jobs net for the month.
The official unemployment rate did not rise in June only because another 144,000 people dropped out of the shrinking labor force, according the Bureau of Labor Statistics, as discouraged unemployed workers stopped looking for jobs, and students who had been job-hunting in April and May gave up. The number of "unattached" and discouraged labor force dropouts has now reached 1.6 million officially. Added to 8.5 million officially unemployed and 5.4 million forced to work only part-time in June, that means the real unemployment rate did rise, past 10%: 15.5 million out of a 153 million-strong civilian labor force.
The worst economic danger lies in the disintegration of the auto/machine-tool industries; they've now lost 16% of their workers in just the past 24 months, and mass layoffs are accelerating as the plants that make pickup trucks and SUVsor engines, parts, and systems for themare being shut down across the country.
LaRouche Endorses Aldrin's Call for Funding NASA
June 29 (EIRNS)In an interview published today in London's Sunday Telegraph, Buzz Aldrin, the second man to step onto the surface of the Moon, said he intends to lobby Barack Obama and John McCain to ensure they fund NASA's goal to establish a permanent base on the Moon and then send a manned mission to Mars. After the Space Shuttle makes its last flight in 2010, it will be five years before its replacement is ready. In that time U.S. astronauts will have to be flown to the Space Station on Russian vehicles.
Aldrin said: "To me it's abysmal that it has come to this: After 50 years of NASA, and after putting $100 billion into the Space Station, we can't get our own astronauts to our Space Station without relying on the Russians." His message to the next U.S. President is:
"Retain the vision for space exploration. If we turn our backs on the vision again, we're going to have to live in a secondary position in human space flight for the rest of the century. These are important issues for consideration by the potential leaders of our country. They're not welcome criticisms for the present heads of NASA."
Aldrin continued: "All the Chinese have to do is fly around the Moon and back, and they'll appear to have won the return to the Moon with humans. They could put one person on the surface of the Moon for one day and he'd be a national hero."
He concluded: "The biggest benefit of Apollo was the inspiration it gave to a growing generation to get into science and aerospace. Are we inspiring the workforce now to work on things we need? No! We can do wonderful science on the Moon, and wonderful commercial things. Then we can pack up and move on to Mars."
Lyndon LaRouche today gave his full endorsement to Aldrin's statement. During his candidacy for the Democratic nomination for President in 1984, LaRouche aired a half-hour show on national network TV entitled "Woman on Mars."