U.S. Economic/Financial News

The Morgue: U.S. Collapse Stats for the Day

Jan. 22 (EIRNS)—Here are the latest reports confirming the disintegration of the global economy:

* Unemployment claims at 26-year high for the week, at 589,000; highest since November 1982.

* Home construction for December at lowest level since the government started tracking in 1959. The Commerce Department said housing permits fell 10.7% from November to an annual rate of 549,000 in December, while starts were down 15.5% from November to an annual rate of 550,000.

* The Federal Housing Finance Agency reported that home prices fell a record 1.8% for the month, compared with October, declining at an annualized rate of nearly 20%. For the 12 months ended Nov. 30, prices fell 8.7%, which was the largest 12-month price drop ever for the 17-year old index.

Another Large Retailer Bites the Dust

Jan. 18 (EIRNS)—Many of those businesses you always wondered about—why they ever came to be, and how they ever survived—will soon be gone. Big retail companies like Linens 'n Things and the Sharper Image have not just declared bankruptcy, they have shuttered their businesses and liquidated their assets in recent months. Now Circuit City is doing the same. Circuit City, the second-largest electronics retailer in the country, was given the nod on Jan. 16 to close its remaining 567 stores, liquidate over $2 billion in inventory, and add some 34,000 employees to the jobless rolls by March 31. In November, it entered Chapter 11 bankruptcy, and was looking for buyers, but the economic meltdown made liquidation the only realistic option. Circuit City owes more than $2.3 billion to creditors.

While the big failures capture the headlines, they are not the only ones. Many small businesses are quietly disappearing. According to the Washington Post Jan. 18, there were 64,318 commercial bankruptcy filings last year, rivaling 2005's rush of filings to beat the new bankruptcy laws. Among large firms, 146 companies with over $100 million in liabilities filed for bankruptcy this year, while only 38 such companies filed in 2007.

Rate of State Budget Deficits Accelerates

Jan. 24 (EIRNS)—The $200 billion-plus revenue deficits in states' budgets, by the week, are accelerating. Pennsylvania Gov. Ed Rendell reported the state's budget gap worsened by $300 million in one week! This puts Pennsylvania's deficit at $2.3 billion, up from $1.6 billion a month ago. Because political leaders have not taken the emergency action to put the system in to bankruptcy reorganization, as Lyndon LaRouche again insisted they must do in his Jan. 22 webcast, yelps of "belt tightening" and job cuts are what we hear. In announcing the new shortfall, Rendell said, "There will be some layoffs and there will be universal pain.... I think everyone has to tighten the belts."