Wall Street Firms Cut 34,000 Jobs; Home Prices Drop the Most in 40 Years

While Hillary Clinton doggedly refuses to admit that she has lost the Democratic Party nomination and prefers to destroy the Democratic Party to satisfy her own ego, the GOP economic program just keeps on giving campaign issues that are being lost in all of the noise Billary is generating. We have plunging home prices (http://www.bloomberg.com/apps/news?pid=20601087&sid=atzjOWZh4RUU&refer=home) combined with more big lay offs (http://www.bloomberg.com/apps/news?pid=20601103&sid=aTARUhP3w5xE&refer=news). Meanwhile, the Chimperator has not been out of his bubble suffieciently and still doesn't understand the economic free fall and McCain "doesn't understand the economy." Instead of fighting off Hillary's deadhand grasp for the nomination, the Democrats should be running with these issues. On the housing front, where those who put 5% down on a purchase are now underwater, here are some story highlights:

The median price of single-family homes dropped 8.7 percent from February 2007, the most in four decades of record keeping. ``It looks like this may be a temporary pause,'' said Nigel Gault, chief U.S. economist at Global Insight Inc. in Lexington, Massachusetts. ``The price declines have helped, and people are still getting financing, though not on the good terms they could before. We're still a long way from a recovery in housing.''

Inventories may remain at elevated levels as foreclosures rise, continuing to pressure prices down, Briefing.com economist Timothy Rogers said. The Realtors group has said a five to six months' supply is needed to stabilize the market. Home foreclosure filings jumped 60 percent and bank seizures more than doubled in February from the same month last year as rates on adjustable mortgages rose and property owners were unable to sell or refinance, according to RealtyTrac Inc., a seller of foreclosure data.

On the employment front, the news of more big layoffs certainly will not help the economy rebound and likely will only add to the number of people unable to make their mortgage payments:

March 24 (Bloomberg) -- Wall Street banks hit by mortgage losses and writedowns have cut more than 34,000 jobs in the past nine months. ``This crisis is much worse than 2001 and we don't know how long it's going to last,'' said Jo Bennett, a partner at executive search firm Battalia Winston International in New York. Job cuts ``could be more than 100,000 in a few years.''

Securities firms started eliminating positions in mortgage departments as early as last July, when rising delinquencies on home loans to borrowers with poor credit histories led to a decline in the prices of bonds tied to the loans. Between July and December, almost 17,000 jobs were lost, according to data compiled by Bloomberg.

The bursting of what Glenn Reynolds of CreditSights Inc. has called the ``securitization bubble'' is affecting other industries. Lawyers who helped create mortgage-backed bonds, realtors who sold more houses as home ownership in the U.S. rose and mortgage brokers who found new customers as lending standards were relaxed are now looking for work, according to Jeanne Branthover, a managing director at Boyden Global Executive Search in New York. Some firms haven't fully disclosed their job cuts because they don't want to appear financially weak, according to Battalia Winston's Bennett. ``They're all dribbling people out the door, so the numbers don't show the true extent of the problem yet,'' said Bennett.