- Unemployment is at 8.1%, the highest level in over 25 years.
- Employers slashed 598,000 jobs in January, the biggest monthly decline since December 1974. Of the workers affected, 48.5 percent were terminated permanently, the highest proportion in government statistics going back to 1967. – Bloomberg news 2/29/09 (January figure subsequently adjusted upward.)
- Employers eliminated 651,000 jobs in February, according to the Labor Dept.
- Job losses have exceeded 600,000 per month for three months running, the first time since 1939.
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- 4.4 million jobs have been lost since the recession began in December 2007.
- "The magnitude of what is happening now is overwhelming what steps the Obama administration has already taken," said Chris Rupkey, chief financial economist at Bank of Tokyo- Mitsubishi UFJ Ltd. in New York. "The situation is much worse now than when they began" considering stimulus efforts, he said. – Bloomberg News 3/6/09
- The economy shrank 6.2% in the fourth quarter of 2008, its weakest performance since 1982.
- More than 8.3 million U.S. mortgage holders owed more on their loans in the fourth quarter than their property was worth, according to First American CoreLogic. Households at or near negative equity account for a quarter of mortgage holders. – Bloomberg News 3/6/09
- The Conferee Board’s consumer confidence index fell to 25 in February, far exceeding an expected drop to 35, and falling to the lowest level since the data collection began in 1967.
- Home prices dropped a record 18.5% from December 2007 to December 2008.
- Macy’s, the nation’s second largest retailer, reported in February that net income dropped 59% in the quarter ending in January 2009.
- Target, the nation’s second largest discount retailer, reported that profits fell 41% in the fourth quarter of 2008.
- U.S. auto sales fell 18% in 2009.
- Urban Science (Detroit) reported that 881 auto dealers closed in 2008, with most closings occurring in the fourth quarter. -- Detroit News, 2/19/09
- Auto industry sales fell in February to the lowest level since 1981, with GM sales falling 53%, Ford 28% and Chrysler 44%. – Bloomberg News 3/6/09
- Unemployment in Michigan hit 11.6% in January, the highest in 25 years and the worst in the nation. – Bloomberg News 3/6/09
- "Our floor traffic is off 40 percent, but our business is off 60 percent to 70 percent because people can’t get financing," said Gordon Stewart, a Detroit-based Chevrolet dealer for 29 years. "I’ve never seen anything like this. I’ve been calling it a depression since last January and it’s only gotten worse." – Bloomberg News 3/6/09
- The entire world is in a recession. --various sources
- "People haven’t yet understood the full depth of the financial crisis," said Yoshinori Nagano, a senior strategist at Daiwa Asset Management Co., which oversees about $96 billion of assets. – Bloomberg News 3/6/09
- The global economic crisis has become the biggest near-term U.S. security concern, sowing instability in a quarter of the world's countries and threatening destructive trade wars, U.S. intelligence agencies reported." -- Reuters, 2/12/09
- Both Fannie Mae and Freddie Mac have been placed into conservatorship.
- Lehman Brothers, a major financial institution, collapsed and is in bankruptcy.
- On 9/16/08, the Reserve Primary Fund, a money-market fund, "broke the buck." A run on the fund by investors outstripped the fund’s ability to pay in a timely way, causing major delays in repayment.
- On 1/29/09, the World Economic Fund reported that the global economic crisis had destroyed 40% of the world’s wealth. – The Telegraph/UK (Markets have continued to tank since.)
- "On Monday, March 2, 2009, AIG announced a loss of approximately $62 billion for the fourth quarter of 2008, ending a year in which AIG suffered approximately $99 billion in total net losses. As a consequence of increased economic weakness and market disruption, the insurance subsidiaries of AIG, like many other insurance companies, have recorded significant losses on investments in the fourth quarter of 2008. Commercial mortgage-backed securities and commercial mortgages have experienced especially severe impairment in market value, requiring a steep markdown on the companies' books, despite a lack of significant credit losses on these assets to date." – Donald Kohn, Vice Chairman, Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C., 3/5/09
- GE cut its dividend by 69%, from 31 cents to 10 cents, "the first such cut since the Great Depression by one of the nation's most widely held stocks." -- Wall St. Journal 2/28/09 (GE stock now stands at $7.06 vs. $32.23 one year ago - 3/6/09 close)
- "Forty-one companies in the S&P 500 have cut their dividend payouts this year, with the total reduction equivalent to $40.8 billion a year in cash lost to shareholders, according to Howard Silverblatt, senior analyst at S&P in New York. In all of 2008, there were 61 cuts by S&P 500 companies totaling $40.6 billion in lost dividend income." -- L.A. Times, 3/6/09 (...and it's only March)
- Nineteen million houses and apartments are vacant -- nearly one in seven -- the highest percentage vacancy since the 1960s. But only about six million of those are for sale or rent at this time, meaning they could come flooding on the market and further depress real estate prices. While home sales rose 54% in California in January over January 2008, 60% of the previously-owned homes sold had been in foreclosure. Prices are down as much as 50% from a few years ago. The sale of condominium and co-operative apartments in Manhattan fell 52% in January. "You are really looking at a very, very ugly outlook," said Ivy Zelman, chief executive of Zelman & Associates, a housing research firm. -- NY Times, 3/7/09
- Multiple massive securities frauds have been uncovered, bankrupting many investors and spooking investors. Those situations have included Bernie Madoff (estimated $50 billion losses), Stanford Financial Group (estimated $8 billion losses); Paul Greenwood and Stephen Walsh (a mere $667 million alleged fraud); and Mark Drier (a puny $400 million alleged fraud) -- NY Times Topics: Bernard L. Madoff; NY Times Business: Stanford Financial Group; NY Times, 2/13/09 and 2/25/09
- Already in 2009, 16 banks have failed as compared to 25 in 2008 and only 3 in 2007. The Federal Deposit Insurance Corporation (FDIC) has another 252 banks on its watch list, meaning they are at risk of failure. The FDIC estimates it will lose $65 billion as a result of bank failures. In order to fund the costs, the FDIC has assessed a one-time fee of $15 billion, which with other longer-term fees assessed brings the increased charges to banks to $27 billion, nine times more than in 2008. – NY Times, 3/2/09
- In July 2008, the FDIC took control of IndyMac Bancorp, the largest bank failure in 24 years. It had been 15 years since any bank with more than $10 billion in assets had failed. IndyMac had held $32 billion of assets. – NY Times, 7/12/08
- Wholesalers cut back on inventories in December by 1.4%, the largest amount in 17 years, according to the U.S. Commerce Department. Wholesale sales fell 3.6% in December, after falling 7.3% in November. – NY Times/AP 2/10/09
- Commenting on recent job losses: "These jobs aren’t coming back," said John E. Silvia, chief economist at Wachovia in Charlotte, N.C. "A lot of production either isn’t going to happen at all, or it’s going to happen somewhere other than the United States. There are going to be fewer stores, fewer factories, fewer financial services operations. Firms are making strategic decisions that they don’t want to be in their businesses." Also: "The current pace of decline is breathtaking," said Robert Barbera, chief economist at the research and trading firm ITG. "We are now falling at a near record rate in the postwar period and there’s been no change in the violent downward trajectory." -- NY Times, 3/7/09
- "American car sales have dropped to an annual pace of nine million, from some 17 million in 2007." -- NY Times, 3/7/09
- The national median price for a home is now $169,900, down from a high of $230,900 in July 2006. "National median prices can be misleading, particularly because more or fewer sales may be coming from high-cost or low-cost areas. Moreover, the volume of home sales has plunged. Many recent sales involved homes that were in or close to foreclosure, and may have been conducted at prices lower than the asking price for other homes in the area. But it is also possible that the decline in the median price may understate the devastation that has befallen the housing market in some areas. In December, the latest figure available, the S.& P./Case-Shiller composite home price index for the 20 regions was off 27 percent from July 2006." -- NY Times, 3/7/09
- Ford Motor Company is offering debt holders $2.2 billion in cash and stock to eliminate as much as $10.4 billion of debt. Moody’s Investors Services has valued the offer to convertible note holders at about $297 per $1,000 of principal debt. Ford’s debt is trading at about 20 cents per dollar. – NY Times, 3/4/09
- U.S. Bancorp approved a plan to cut its quarterly dividend on common stock by 88%, from 42.5 cents to 5 cents per share. The bank made the move due to "uncertainty in the financial markets and a weakening economy," according to president and chief executive officer Richard Davis. The bank’s stock closed the week at $8.82, down 38.36% for the week. – NY Times, 3/4/09, 3/8/09
- MGM Mirage warned that it might breach terms of its credit agreements if adverse economic conditions continue. MGM shares closed at $1.99, down 43.14% for the week. – NY Times, 3/8/09
- General Motors’ auditor expressed doubts about the company’s ability to survive, and G.M. also disclosed that it had found "material weaknesses" in its accounting systems. G.M. shares closed at $1.45, down 35.56% for the week. – NY Times, 3/8/09
- According to the U.S. Commerce Department, wholesale inventories fell 0.7% in January, falling for the fifth consecutive month. December’s fall was restated from 1.4% to 1.5%. Wholesale sales fell 2.9% in January, the seventh consecutive monthly fall. – NY Times, 3/10/09
- Warren Buffett said on March 9 that the U.S. economy had "fallen off a cliff" and that the nation is experiencing a "close to worst-case scenario." Mr. Buffett also said the economy had come within hours of a collapse when the credit markets froze, Lehman Brothers filed for bankruptcy and American International Group sought its first bailout. – NY Times Deal Book, 3/10/09
- Quarterly profits at Mr. Buffett’s Berkshire Hathaway fell 96%, largely from losses on derivative contracts, and its book value fell 9.6% in 2008, the worst year since 1965 when Mr. Buffett took control. The stock of the company has fallen by half since September. – NY Times Deal Book, 3/10/09; NY Times/Reuters 3/9/09
- Wells Fargo & Co. bank cut its dividend by 85%, from 34 cents to 5 cents per share. – NY Times/Reuters 3/6/09
- The value of Citigroup has fallen from $270 billion two years ago to about $6 billion, as its shares have fallen from an all-time high of $55 to below $1 last week. Citigroup has posted more than $37.5 billion of losses since last posting a profit in Q3-2007. – Business Week, 3/10/09
- Freddie Mac posted a $23.9 billion loss for Q4-08, following a $25.3 billion loss for Q3, and says it needs $30.8 billion from the Treasury to survive. – Reuters, 3/11/09
- J.P. Morgan cut its dividend 87% to 5 cents, after taking $33.3 billion in losses since the start of the financial crisis. – Bloomberg, 3/11/09
- Citigroup has reported $88.3 billion in losses since the start of the financial crisis. – Bloomberg, 3/11/09
- Merrill Lynch, now part of Bank of America, has reported $55.9 billion in losses since the start of the financial crisis. – Bloomberg, 3/11/09
- Two days after G.E. slashed its dividend, Nicholas P. Heymann and Matthew Kelley, analysts at Sterne Agee, wrote "GE Capital is now confronting the prospect that a downward trend in fundamental performance, fueled by weakening end markets and magnified by several liquidity constraints, could potentially lead to an extended period of steadily lower earnings, depleted loss provisions, lower credit ratings, rising borrowing costs...." Within 24 hours, GE’s stock fell to under $6. – NY Times Deal Book/Talking Business, 3/7/09
- United Technologies cut its 2009 profit forecast by 13% based on weakening core markets with worldwide construction and aerospace orders slowing. Chief Executive Louis Chapman said, "We intend to be fully prepared for a deeper and longer deterioration of market conditions. United Technologies plans to cut 5% of its work force, or 11,600 jobs. – NY Times, 3/11/09
- Standard & Poor’s put the country of India on its watch list for loss of its investment-grade status. – NY Times, 3/11/09
- In Iceland, the government banking agency took over the domestic operations of the country’s three largest banks, whose combined debt exceeded six times the entire gross domestic product of the country, in October 2008 as the banks crashed. The government later raised the interest rates to 18%, and when trading resumed, the krona had lost 2/3 of its value. In January 2009, the coalition government collapsed and a new government took over and fired the central bank governor. – Wikipedia: Iceland: 2008-2009 economic crisis
- Delta Air Lines, the world’s largest airline carrier, announced in December 2008 that it would cut international capacity by 6-8%, and in March 2009 announced additional cuts of 10% starting in September.
- Standard & Poor’s cut General Electric’s credit rating from AAA (which it had held since 1956) to AA+, and while this boosted the company’s stock it was because a more severe cut had been anticipated. – Bloomberg, 3/13/09; Times Online 3/12/09; Washington Post, 3/13/09; Motley Fool, 3/12/09
- Fitch cut Berkshire Hathaway’s credit rating from AAA to AA+. – Bloomberg, 3/13/09 -- Washington Post, 3/13/09
- Toyota Motor Corp. is forecasting its first loss in 2009 in 59 years in business. – Bloomberg, 3/13/09
- KKR Financial Holdings LLC, a publicly traded finance company, reported a $1.2 billion loss on March 2. Its shares have fallen 97% in the past year. KKR was a specialist in buying mortgage-backed securities and high-yield debt. – Bloomberg, 3/13/09
- R.H. Donnelley Corp., has "large debt maturities beginning in early 2010," Steve Blondy, chief financial officer, said on a call with investors March 12. The Cary, North Carolina-based company planned to refinance the debt, "which may not be possible in the current capital markets," he said. – Bloomberg, 3/13/09
- Blockbuster, Inc., which relied on collateralized loan obligations for financing, is exploring bankruptcy options. – Bloomberg, 3/13/09
- The Bush administration was about six months late with a program to deal with toxic assets and recapitalize banks, said Edward Lazear, former chairman of the White House’s Council of Economic Advisers. Lazear said the Bush administration should have acted in March rather than September 2008 to help recapitalize banks. – Bloomberg, 3/13/09
- U.S. exports and imports both slumped for the sixth straight month in January 2009, in what may be the biggest collapse of world trade since the 1930s. The U.S. trade deficit fell to $36 billion, the lowest level in six years, but only because the major slump in the U.S. economy cause a major drop in demand across wide sectors. – Bloomberg, 3/13/09
- National Semiconductor Corp. announced that it would cut 1,700 jobs or about 25% of its work force. – Bloomberg, 3/13/09
- Boeing Co., the world’s second-largest commercial jet-maker, said it delivered 19 aircraft to overseas buyers in January, down from 27 in December. – Bloomberg, 3/13/09
- U.S. households lost $5.1 trillion or 9% of their wealth in the last three months of 2008, according to the Federal Reserve. That is the largest single drop in a quarter in the 57 years the bank has been keeping track of this value. The last biggest drop happened in 2002 after the tech bubble popped, when households lost 3% of their net worth. – NY Times, 3/13/09
- The U.S. Commerce Department reported that retail sales fell 0.1% in February from January, better than the -0.5% drop economists had expected, but still in the negative territory after a surprising 1.8% gain in January. Retailers have had sales declines in seven of the late eight reported months. Every category of retail had declines except discount stores. –NY Times 3/13/09
- In a report on consumer behavior published by America’s Research Group, Chief Executive C. Britt Beemer said, "the dramatic drops in shopping levels have no match in our database in the last 30 years." –NY Times 3/13/09
- The U.S. Commerce also reported that businesses reduced their inventories for the fifth consecutive month in January, by 1.1%. –NY Times 3/13/09
- In its 2008 annual report, Swiss banking giant UBS reported an $18.1 billion loss, the largest in Swiss history, and $1 billion larger than it had reported on February 10 due to additional asset write-downs and a $780 million fine for helping wealthy Americans avoid federal taxes. UBS also warned that it was "extremely cautious" about the outlook for 2009, and that, "even after substantial risk reduction, our balance sheet remains exposed to illiquid and volatile markets and our earnings will therefore remain at risk for some time to come." –NY Times 3/12/09
- Newspaper publisher McClatchey Company said it would eliminate 15% of its work force, after cutting nearly 25% last year, due to dropping advertising revenue. It has already announced that it would suspend shareholder dividends and 401(k) and pension plan contributions after the first quarter. – NY Times 3/10/09
- Amusement park chain Six Flags has a payment of $300 million due to holders of preferred stock this year with no way to pay it. The company is examining restructuring options with bond holders and a potential bankruptcy filing. – NY Times 3/14/09
- Black & Decker is cutting the base salaries of top executives, base salaries for other salaried workers by 2.5 5o 5%, and ending contributions to retirement programs because of "unprecedented challenges to the global economy." – NY Times 3/14/09
- Sunoco plans to cut its work force by 20%, or about 750 jobs, to cut costs by more than $300 million due to weaker demand for gasoline and diesel fuel. – NY Times 3/14/09
- Mazda Motor Corp. plans to apply for aid from the Japanese government because of a 62% surge in short-term debt and its inability to sell bonds. "The market isn’t functioning. Conditions are really bad," said the general manager of its financial services division. Mazda expects a ¥13 billion loss this year and analysts expect this to triple next year to ¥37.5 billion next year. Car demand is at a 30-year low in the U.S., and has dropped 29% in the U.S., 16% in Europe and 38% in Japan in the first two months of the year. – Bloomberg, 3/14/09
- Alcoa, Inc. plans to slash its dividend 88% from 17 cents to 3 cents per share, cut costs by more than $2.4 billion and sell stock and convertible notes when its stock is at a 20-year low in order to raise cash. The company has cut output by 18% and eliminated 13,500 jobs or 13% of its work force already. – Bloomberg, 3/14/09
- Industrial product fell in February for the fourth consecutive month, according to the Federal Reserve. A report from the New York Fed showed production continuing to fall in March. Factory capacity in use fell to 70.9%, the lowest amount on record. – Bloomberg, 3/14/09
Update [2009-3-16 23:16:1 by FactsNotFiction]: