Regulators supply credit union aid

Regulators supply credit union aid

A government plan makes $40 billion available to credit unions hit by losses on mortgage securities. Struggling home owners get another $2 billion.

WASHINGTON (AP) -- Federal regulators said Tuesday they are making more than $40 billion available to support several credit unions that suffered losses from mortgage securities, and will provide another $2 billion to help struggling homeowners.

National Credit Union Administration Chairman Michael Fryzel said the credit unions should "use these programs constructively as they work through these difficult times."

The new borrowing from the Treasury Department will be available under a special facility that Congress approved in September for the agency, which oversees some 8,100 federally insured credit unions.

The new lending facility will provide aid for some credit unions, known as corporate credit unions, that furnish wholesale financing and investment services to the greater population of retail credit unions.

Some of the 28 corporate credit unions in the United States have sustained steep losses on paper from the depressed value of the mortgage-backed securities they hold.

The majority of credit unions, which are cooperatives owned by their members, are financially strong.

The other program will involve up to $2 billion in low-cost loans to retail credit unions to be used for reducing mortgage rates for delinquent and strapped low- and moderate-income homeowners who are their members. Credit unions will have six months to modify home loans under the program. more

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Have degree - and pink slip

Have degree - and pink slip

NEW YORK (CNNMoney.com) -- There are currently a record number of unemployed college graduates seeking work. So many, in fact, that they outnumber high school dropouts on the job hunt.

In November the number of people with a higher degree who were out of work rose to 1.413 million from 1.411 million in the previous month, according to the Bureau of Labor Statistics. Comparatively, there were 1.282 million unemployed high school dropouts, up slightly from 1.273 million in October.

"College graduates are not going to get away unscathed," said Dean Baker, director of the Center for Economic and Policy Research in Washington, DC, "everyone is being hit by this."

While the manufacturing and construction industries were hardest hit by layoffs last month - 85,000 and 82,000 jobs lost, respectively, according to the Labor Department - it is the professional and business services category that many economists view as a barometer for overall economic activity.

In its November jobs report, the Labor Department said that firms in the business and professional services category cut 136,000 jobs, the largest one-month drop on record. Additionally, financial services jobs fell by 32,000, another record decline.

Those job cuts are hitting college educated workers the hardest, according to Dr. Reena Aggarwal, a professor of finance at Georgetown University's McDonough School of Business.

"A lot of the job losses are the more higher paying jobs and it's just going to mean far fewer dollars flowing into the economy," she said.
A glass half full

But even though business and professional services saw significant layoffs, the unemployment rate among those with a higher degree held steady at 3.1% in November. The overall unemployment rate rose to 6.7% from 6.5% in October.

"You're still less than half as likely to be unemployed if you have a college degree," Baker said.

"The numbers say, despite these conditions, we still have a strong job market within the professional skills category, nearly 97% of college-educated workers are employed," said Janette Marx, senior vice president of Ajilon Global, professional staffing firm. more

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