The sun is shining. The snow is melting. The soil is finally softening. Oh, and so are those financial markets. But you already knew that. So on this bright Friday, we offer you, dear readers, more light at the end of that dark, long tunnel. The zinc lining in the dark cloud. It’s Friday Financials!
• The Labor Department announced today that 80,000 jobs were lost in March, the third consecutive month to see job losses. Unemployment also rose to 5.1 percent, up from 4.8 percent the previous month. The good news? It sounds like there will be quite a few jobs opening up for those skilled in processing bankruptcy paperwork! Filings in March were up 29.4 percent compared to the year prior. In fact, if filings continue at the current rate (4,000 a day) there could be as many as one million filed by the end of the year.
# You know those foreclosures that are happening all over the cities? According to a recent study by the Federal Reserve Bank (via), 37 percent of ARMs in Minnesota will reset in the next 12 months. Fifty-six percent of the current subprime loans have already had late payments in the last year. The good news? It’s really hard to find the zinc here. So let’s try this: At least we’re not in Kansas. That state’s subprime interest rates shot up to 9.53 percent at the end of December, according to the same study. Minnesota’s subprime borrowers are dealing with an average reset interest rate of about 8.72 percent.
# One trillion dollars: In his new book “The Trillion Dollar Meltdown,” lawyer, author and former investment banker Charles R. Morris predicts there will be more than $1 trillion in defaults and write-downs over the next year. The good news? We’re on a bit of a picnic right now. “The sad truth,” he says, “is that subprime is just the first big boulder in an avalanche of asset write-downs that will rattle on through much of 2008.” Enjoy the little blanket bash while it lasts!