Labor Dept.: 2.6 Million Jobs Lost in 2008The Labor Department delivered more discouraging news to investors on Friday with the December employment report showing that in 2008 the workforce lost 2.6 million jobs.
This is the biggest job loss since the end of World War II. The report says the economy shed 524,000 jobs in December, bringing the year's total loss to just below 2.6 million.
The bulk of last year's job losses came in the last four months of the year; 1.9 million jobs evaporated after the financial crisis began in September.
In the current recession that began in December 2007, the economy has recorded more than 2.5 million jobs lost, far more than the past two recessions, and just barely below the 2.7 million jobs lost in the 1981-1982 recession that had the deepest unemployment in the report's 70- year history.
The report shows another troubling weakness in employment: A larger number of job seekers weren't able to find jobs with the amount of hours they want to work. Part-time workers who were working part-time because they couldn't find full-time work, or their hours had been cut back due to poor business conditions, jumped by 715,000 people to 8 million -- the highest ever on records dating back to 1955.
TARP Application Date Extended
The Treasury Department has extended the date for Trouble Asset Relief Program applications until January 15.
The two-week extension will help institutions that applied for bank holding status at the end of last year, extending the time for institutions to seek TARP funds.
Treasury says it will give regulators two extra weeks to approve thrift and bank holding company applications that were not completed by December 31.
This means that any institution that applied for bank or thrift status in order to access TARP funds won't be denied because their charter wasn't approved by the regulator by December 31. At year's end, Chrysler Financial had sought an industrial loan charter that if approved would give it access to federal money. The automaker's financial arm had applied for TARP funds in December.
Citigroup Says Yes To Mortgage 'Cram-Down' Plan
The banking giant Citigroup says it has agreed to participate in a foreclosure prevention plan that would let bankruptcy judges alter mortgages for homeowners who have filed for bankruptcy. This is called 'cram-down' and gives the judges broad authority to modify terms of mortgages.
Lawmakers see Citigroup's agreement to participate as possibly opening the door for other mortgage lenders to sign onto the program. Until now other members of the banking industry, including Citigroup and other housing industry groups like the National Association of Realtors criticized the idea of allowing courts to have any say over mortgage portfolios.
Among those against this plan is the Mortgage Bankers Association. The trade group says allowing bankruptcy courts to reduce the size of a home loan will add considerably to borrowing costs for future homebuyers. The American Bankers Association also says it is opposed to this approach, saying it will leave in place overly broad mortgage cram-down authority and other provisions that "will harm thousands of banks across the country that have made, and continue to make, good loans," says Floyd Stoner, ABA's executive director of congressional relations and public policy.