Return of the Hoovervilles

Return of the Hoovervilles

People in these encampments live in tents, or else shacks built of old wood, scrap metal, cardboard and other waste. They live without running water, electricity, plumbing, or garbage removal

March 27, 2009

World Socialist Web Site - A front-page article in Thursday's New York Times ("Cities Deal With a Surge in Shantytowns") describes the reemergence of itinerant encampments on the American cityscape. The most widely reported of these lies near Sacramento, California. About 125 people now reside in this Hooverville, in the capital city of America's richest and most populous state.

Yet the Hooverville is far more widespread than the media attention on the tent city near Sacramento implies. It has reemerged in Phoenix, Arizona; Olympia and Seattle, Washington; Reno, Nevada; Portland, Oregon; Nashville, Tennessee; St. Petersburg, Florida; and Fresno, California; among others.

People in these encampments live in tents, or else shacks built of old wood, scrap metal, cardboard and other waste. They live without running water, electricity, plumbing, or garbage removal...

Schwarzenegger Opens California Fairgrounds to Homeless Camp

March 26, 2009

Bloomberg - Schwarzenegger said a make-shift tent city for the homeless that sprang up in the capital city of Sacramento will be shut down and its residents allowed to stay at the state fairgrounds...

Over Ten Thousand Public School Students Homeless in Chicago

February 17, 2009

World Socialist Web Site - Even before the collapse of the US economy in the fall of 2008, increasing social misery had taken its toll on Chicago-area students, with thousands forced to leave their homes and enter into a variety of precarious and temporary living arrangements. Recent months have only seen a further deterioration in the living situations of many area families.

As of the end of the 2008 school year last June, the number of students identified as homeless in figures reported by Chicago Public Schools (CPS) was 10,642, a record. That figure represented a 1.2 percent increase from 2006. However, from November 2007 to November 2008 CPS reported a staggering 28 percent rise in the number of homeless students, so the figure for the 2009 school year will undoubtedly be even higher.

In the eight suburban counties surrounding Chicago, the Illinois State Board of Education reported a nearly 67 percent increase in homeless students from fiscal year 2006 to 2008, with their total number rising to 4,399 from 2,628. When added to Chicago's total, the sum represents 57 percent of the state's 26,238 homeless students...

Illinois Income Tax May Jump 50 Percent

March 17, 2009

CBS 2 Chicago - Income taxes in Illinois could soon be going up by as much as 50 percent to combat deficits in a difficult state budget...

Fed Reports Record Fall in Household Net Worth

March 12, 2009

AP – The net worth of American households fell by the largest amount in more than a half-century of record keeping during the fourth quarter of last year. The Federal Reserve said Thursday that household net worth dropped by a record 9 percent from the level in the third quarter. The decline was the sixth straight quarterly drop in net worth and underscored the battering that U.S. families are undergoing in the midst of a steep recession with unemployment surging and the value of their homes and investments plunging...

Foreclosures Up 30 Percent in February

March 12, 2009

AP – Despite halts on new foreclosures by several major lenders, the number of households threatened with losing their homes rose 30 percent in February from last year's levels, RealtyTrac reported Thursday...

The rise in foreclosure filings came despite temporary halts to foreclosures by Fannie Mae and Freddie Mac, and major banks JPMorgan Chase, Morgan Stanley, Citigroup and Bank of America. Those companies pledged to do so in advance of President Barack Obama's plan to stem the foreclosure crisis, which was launched last week.

Two states contributing to the increase were Florida and New York, where temporary bans on foreclosures ended. But other states are moving to enact similar measures. On Wednesday the Michigan House approved legislation that would give homeowners facing foreclosure a 90-day reprieve. The legislation now goes to Michigan's Republican-led Senate, where its future is unclear.

While the number of foreclosures continue to soar nationwide, banks have held off listing properties for sale, Sharga said. There were around 700,000 such properties nationwide at the end of last year, making up a "shadow inventory" of unsold homes that could drag the housing crisis out even longer...

The Obama administration is aiming to help up to 9 million borrowers stay in their homes through refinanced mortgages or loans that are modified to lower monthly payments. Still, the faltering economy, driven down by the collapse of the housing bubble, is causing the housing crisis to spread. 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, according to the Mortgage Bankers Association. That's up from 10 percent at the end of the third quarter, and up from 8 percent at the end of 2007.

The RealtyTrac report said more than 74,000 properties were repossessed by lenders in February as the worst recession in decades, falling home values and stricter lending standards continue to sap the U.S. real estate market.

Nevada, Arizona, California and Florida had the nation's top foreclosure rates. In Nevada, one in every 70 homes received a foreclosure filing, while the number was one every 147 in Arizona. Rounding out the top 10 were Idaho, Michigan, Illinois, Georgia, Oregon and Ohio.

Among metro areas, Las Vegas was first, with one in every 60 housing units receiving a foreclosure filing. It was followed by the Cape Coral-Fort Myers area in Florida and five California metropolitan areas: Stockton, Modesto, Merced, Riverside-San Bernardino and Bakersfield.

Seven States See Jobless Rate Top 10 Percent

March 27, 2009

AP - More states logged double-digit unemployment rates in February, with North Carolina and Rhode Island seeing their rates hit record highs. The U.S. Labor Department's report, released Friday, showed the terrible toll the recession, now in its second year, is having on workers and companies alike. Seven states have unemployment rates that topped 10 percent last month. That's up from four states in January.

The U.S. unemployment rate, released earlier this month, rose to 8.1 percent in February, the highest in more than 25 years. Economists predict the national jobless rate will hit 10 percent by year end even if the recession were to end later this year as some hope...

Layoffs in manufacturing and construction—two sectors hard hit by the housing collapse—are common threads running through the higher unemployment. Another thread: difficulties faced by states, such as South Carolina, Michigan and Rhode Island, to lure new types of companies to help cushion the loss of manufacturing jobs and retrain laid-off factory workers for other kinds of employment.

All told, 49 states and the District of Columbia saw their unemployment rates move higher in February from the previous month. Only Nebraska recorded a slight drop. Its jobless rate dipped to 4.2 percent...

Food Stamp Enrollment Jumps to Record 31.8 Million with a Cost of at Least $51 Billion in This Fiscal Year

March 5, 2009

Reuters - A record 31.8 million Americans received food stamps at the latest count, an increase of 700,000 people in one month with the United States in recession, government figures showed on Thursday. Food stamps, which help poor people buy groceries, are the major U.S. anti-hunger program, forecast to cost at least $51 billion in this fiscal year ending September 30, up $10 billion from fiscal 2008...

U.S. Private Sector Cuts 697,000 Jobs in February

March 4, 2009

Reuters – U.S. private sector job losses accelerated in February, according to a report by ADP Employer Services that suggests hefty employment declines are on the way in the government's payrolls report due on Friday.

ADP said on Wednesday that private employers cut 697,000 jobs in February versus a revised 614,000 jobs lost in January. The January job cuts were originally reported at 522,000.

It was the biggest job loss since the report's launch in 2001 and showed the misery of declining employment spreading broadly and evenly throughout the economy...

Worst Job Losses in 60 Years Expected

March 1, 2009

MarketWatch - The recession tightened its grip on U.S. businesses and consumers in February, according to economists, who are predicting the largest one-month job loss in almost 60 years.

Stock Market Falls Below 7,000; Lowest Since 1997

March 2, 2009

Associated Press - Dow Jones industrial average plunged below 7,000 Monday for the first time in more than 11 years as investors grew pessimistic about the health of banks, and in turn the economy. The Dow hadn’t traded below 7,000 since Oct. 28, 1997, and last closed below that mark on May 1 of that year. The credit crisis and recession have now slashed half the average’s value since it hit a record high over 14,000 in October 2007...

The Fed Has Destroyed Your Retirement

March 11, 2009

Lew Rockwell - Over the last 18 months, Americans over age 55 have suffered a reversal in their capital that has not fully registered psychologically. They will not be able to afford a comfortable retirement. This was true 18 months ago, just less obvious. Very few Americans enjoy a combination of private pensions, annuities, and Social Security payments sufficient to fund what Social Security says retirees need: at least 70% of their pre-retirement income in the last year of employment. They are oblivious to this assessment on the Social Security website...

Throughout Greenspan's bubble economy, the savings rate of American households fell, going negative in 2005. The boom fooled Americans who owned stocks that they were getting richer. They weren't. They were merely benefitting from the greater fool theory of investing. That theory has brought down the real estate bubble. There will be further declines. It has ended the stock market mania. And it has just about shut down Elkhart, Indiana.

Americans have not yet recognized what has been done to them by the Federal Reserve System and the highly leveraged banks and hedge funds that thought the good ship Effortless Wealth had come into port. The hot-shots did not understand Ludwig von Mises' theory of the business cycle as the product of central bank monetary inflation. They never saw it coming.

Now the investors who believe the same dream, but without multimillion dollar severance deals, have seen their dreams called into question. They have not yet dumped their stocks. They have just stopped buying as many. The fall of 55% by the Dow and the S&P 500 was not accompanied by a huge sell-off. The decline has been one of dribbling away. The dreams of would-be retirees have not yet been smashed. They have merely dribbled away. The crash has not yet come. It will...

House Approves Mortgage Bankruptcy Overhaul

March 5, 2009

Reuters - Bankruptcy judges could cut the mortgage debt of homeowners in bankruptcy court as a last resort to avert foreclosure, under a bill approved by a 234-191 vote on Thursday in the U.S. House of Representatives.

Seen by Democratic supporters as vital to stabilizing the crumbling U.S. real estate market, the so-called "cramdown" bill has been opposed by bankers, despite amendments made this week to limit its scope, including one restricting it to existing primary residence mortgages, not future loans. The Senate was expected to consider its own version of the House bill soon, but chances of passage are uncertain there. The House bill has additional provisions meant to help homeowners in the worst housing market in decades, a slump that has helped pull the U.S. economy into a deepening recession.

Under present law, bankruptcy courts may reduce many forms of debt for struggling borrowers -- including a boat, car, vacation home or family farm -- but not a primary residence. Changing bankruptcy law to allow this, say bankers and Republican opponents of the bill, would raise costs for everyone by diverting capital from the mortgage debt market. But Democrats backing the bill discount such fears and say it could sharply cut the high U.S. home foreclosure rate.

About one in eight U.S. homeowners with mortgages, a record share, ended 2008 behind on payments or are in the foreclosure process, a mortgage industry group reported on Thursday. President Barack Obama on Wednesday launched a $75 billion foreclosure relief plan, part of a $275 billion housing stimulus program announced last month...

Feds Unveil Plan to Help 9 Million Stay in Homes

March 4, 2009

AP - The Obama administration is kicking off a new program designed to help up to 9 million borrowers stay in their homes through refinanced mortgages or loans that are modified to lower monthly payments.

The Treasury Department on Wednesday released detailed guidelines designed to let the lending industry know how to enroll borrowers in the program announced last month.

To help borrowers determine if they are eligible, the government has put answers to common questions and assessment tools on the Web site http://www.FinancialStability.gov.

"It is imperative that we continue to move with speed to help make housing more affordable and help arrest the damaging spiral in our housing markets," Treasury Secretary Timothy Geithner said in a statement.

One in Five U.S. Mortgage Borrowers are Underwater

March 4, 2009

Reuters - One in five U.S. homeowners with mortgages owe more to their lenders than their properties are worth, and the rate will increase as housing values drop in states that have so far avoided the worst of the crisis, a new study shows.

About 8.31 million properties had negative equity at the end of 2008, up 9 percent from 7.63 million at the end of September, according to the study, released Wednesday by First American CoreLogic. The percentage of "underwater" borrowers rose to 20 percent from 18 percent.

Another 2.16 million properties could go underwater if home prices fall another 5 percent, the study shows.

First American said the value of residential properties fell to $19.1 trillion at year-end from $21.5 trillion a year earlier, with half the decline in California. Forty-three U.S. states and Washington, D.C., were included in the study.

While states such as California, Florida and Nevada were particularly stressed, the study showed worrying signs of deterioration in relatively healthy parts of the nation.

"The economic slowdown is broadening," said Sherrill Shaffer, a banking professor at the University of Wyoming at Laramie and a former Federal Reserve official. "As more people lose jobs, it will be more difficult to sustain the levels of pricing and home ownership, and that is a big factor driving down housing prices in more parts of the country."

Arizona, California, Florida, Georgia, Michigan, Nevada and Ohio remained the most stressed states, with 62 percent of underwater borrowers and just 41 percent of mortgages.

Other areas, though, also face more stress. Connecticut, for example, saw a 25 percent increase in homes with negative equity, while Washington, D.C., had a 44 percent increase.

"Even I continue to be surprised at the tentacles of this financial and economic debacle," said Robert MacIntosh, chief economist at Eaton Vance Management in Boston. "More people are being laid off, resulting in reduced income and therefore less consumption. That leaves fewer people with money to buy homes, and the mentality is that people believe they should wait six months rather than buy now. Less demand means falling prices."

Roughly 68 percent of U.S. adults own their own homes, and about two-thirds of these have mortgages. Many economists expect the nation's unemployment rate to rise above 9 percent before the recession ends, up from January's 7.6 percent...

Associated Press Makes Excuses for High Gas Prices

Infowars Editor’s Note: High gas prices are the fault of a “energy market turned upside-down,” and have nothing to do with a conspiracy to fleece the commoners. Sure. And there is a bridge for sale in Brooklyn.

February 16, 2009

Associated Press - Crude oil prices have fallen to new lows for this year. So you’d think gas prices would sink right along with them. Not so. On Thursday, for example, crude oil closed just under $34 a barrel, its lowest point for 2009. But the national average price of a gallon of gas rose to $1.95 on the same day, its peak for the year. On Friday gas went a penny higher...