U.S. Economic/Financial News
Depression Saps Retirement Savings Net
March 9 (EIRNS)As workers watch their union-funded pensions collapse, and their Social Security stolen, now their personal savings plans are collapsing as well. Fully one-quarter of the aging workforce has less than $1,000 in retirement savings, and almost half has less than $10,000, according to the Employee Benefit Research Institute's annual Retirement Confidence Survey reported on CNN Money. And it's getting worse.
According to the survey, the percentage of workers who said they have less than $10,000 in savings, grew 10% last year, from 39% to 43% in 2010. Workers who said they had less than $1,000 grew by 30%, from 20% to 27%. A mere 16% of the workforce reported "confidence" in its ability to save enough for a comfortable retirement, the second-lowest point in the survey's 20-year history. The percentage of workers who said they have saved enough for retirement fell to 69%, from 75% last year. 24% of workers said they have postponed their planned retirement age in the past year, up from 14% in 2008.
U.S. Poverty Expanding into the Suburbs
March 8 (EIRNS)It's not surprising to anyone who visits health clinics for the uninsured, passes by foreclosure signs, or sees clusters of men standing around informal dayjob pickup sites, but poverty is by no means limited to the inner cities any more.
A Brookings Institution study released in January notes that, by 2008, the nation's suburbs had become home to the largest and fastest growing poor population in the country. The "Suburbanization of Poverty" study reports that between 2000 and 2008, the suburbs of the country's largest metropolitan areas saw their poor populations grow by 25%almost five times faster than primary cities, and well ahead of the growth seen in smaller metro areas and non-metropolitan communities. As a result, by 2008, large suburbs were home to 1.5 million more poor than their primary cities, and housed almost one-third of the nation's poor overall.
In 2008, some 91.6 million peoplemore than 30% of the nation's populationfell below 200% of the Federal Malthusian so-called poverty level. More individuals lived in families with incomes between 100 and 200% of poverty line (52.5 million) than below the poverty line (39.1 million) in 2008.
Another Real Estate Collapse Looms with New Mass of Home Seizures
March 12 (EIRNS)With loss of homes by bank repossession in the United States continuing to run at 90,000-plus per month, another immediate future tsunami of foreclosures is looming, even bigger than that of the past two years. As it hitsif not prevented by the bank reorganization measures Lyndon LaRouche has proposed since mid-2007it will crash the residential real estate market again, together with the gathering collapse of commercial real estate.
New reports from the Mortgage Bankers Association and the First American CoreLogic analysts show a grim situation: More than 5 million American homeowners are more than 90 days behind on mortgage paymentsthat's the foreclosure lineand 11 million more homeowners are underwater, owing more on their houses than their market value, but are not (yet) delinquent on mortgage payments. Of the over 5 million in the foreclosure zone, 4 million have prime, not subprime, mortgage loans; and 2.5 million have not made a payment in six months or more. Mass unemployment, unchecked by the Obama Administration or Congress, is creating this mass delinquency, with no effective anti-foreclosure programs getting past Rep. Barney Frank in Congress or Obama in the White House.
The reason for the non-foreclosure of 5-6 million all-but-foreclosed American households is obvious. With total sales of new and existing homes in the United States running at about 1 million a year, and 40-50% of those sales already representing foreclosed homes, banks and lenders simply can't try to sell the vast majority of the homes in deep delinquency, so they aren't foreclosing on them. If prices, which are now falling only slowly, start to rise even a small amount, the mass of waiting foreclosures will soon send them plummeting again. The huge "shadow inventory" of foreclosureshomes of the unemployed, the underemployed, and others who've lost the ability to make their mortgage paymentshangs over residential real estate, capable of collapsing it again at any time.