In another sign of how deep the global recession has become, the ports of Los Angeles and Long Beach on Friday reported their worst combined import statistics for September in nine years.22% of prime loans in Florida are overdue
As dismal as those figures are for the two ports, which rank first and second in the U.S. in container volume and together rank fifth in the world, a greater worry goes beyond the immediate and substantial loss of local trade-related jobs: Some of the ports' most important tenants were so poorly positioned for the downturn that they might sink completely in a sea of billions of dollars of red ink, experts say.
"Without a doubt, the Southern California ports should be worried," said Neil Dekker, an analyst at Drewry Shipping Consultants in London who produces container industry forecasts. "Companies will go bust; freight rates may take years to recover."
The outlook could hardly be more ominous, said John Husing, an independent analyst with Economics and Politics Inc. in Redlands who follows the effects of global trade on the Inland Empire.
For prime loans, 5.35% of loans were past due or in foreclosure in the latest quarter. For subprime, the rate was about 30%.US Bank Failures for 2009: 99 as of October 16
In the latest quarter, 2.75% of all loans were in the foreclosure process, up from 1.40% a year earlier.
Among loans insured by the Federal Housing Administration, 14.87% were overdue or in foreclosure, up from 14.73% a year earlier. The portion of FHA loans going bad is likely to increase in the quarters ahead because of a surge in new loans insured by the federal agency.
The share of new mortgages insured by the FHA leaped to 23% in July from a low of 1.8% in 2006, according to Inside Mortgage Finance, a trade publication. Guy Cecala, publisher of Inside Mortgage Finance, said the FHA's share might reach 30% by year end. The FHA is taking a far bigger share of the market because investors last year began shying away from buying mortgage securities that don't have backing from a federal agency or from government-sponsored mortgage investors Fannie Mae and Freddie Mac. Fannie and Freddie recently have become more cautious about buying or guaranteeing mortgages because default-related losses have depleted their capital.
Expected Cost to Bailout the FDIC: around $70 billion through 2013.
August Unemployment Numbers Rise
Nonfarm payroll employment continued to decline in September (-263,000), and the unemployment rate (9.8 percent) continued to trend up, the U.S. Bureau of Labor Statistics reported today. The largest job losses were in construction, manufacturing, retail trade, and government. Household Survey Data Since the start of the recession in December 2007, the number of unemployed persons has increased by 7.6 million to 15.1 million, and the unemployment rate has doubled to 9.8 percent. (See table A-1.) Unemployment rates for the major worker groups--adult men (10.3 percent), adult women (7.8 percent), teenagers (25.9 percent), whites (9.0 percent), blacks (15.4 percent), and Hispanics (12.7 percent)--showed little change in September. The unemployment rate for Asians was 7.4 percent, not seasonally adjusted. The rates for all major worker groups are much higher than at the start of the recession. (See tables A-1, A-2, and A-3.)
Federal Deficit Hits Record: $1.42 trillion
The federal budget deficit has surged to an all-time high of $1.42 trillion as the recession caused tax revenues to plunge while the government was spending massive amounts to stabilize the financial system and jump-start the economy.
The imbalance for the budget year — which ended Sept. 30 — more than tripled last year's record. The Obama administration projects deficits will total $9.1 trillion over the next decade unless corrective action is taken.
As a portion of the economy, the budget deficit stood at 10 percent, the highest since World War II, according to government data released Friday.