Recession toll rises to 23

Fresh victims of recession are Banks in Colorado and North Carolina.The banks were shut as a loss of jobs shrinks household wealth in the deepest recession in last 25 years. With these banks shut down, the toll of US Bank failures has risen to 23 this year.

New Frontier Bank in Greeley, Colorado, with $2 billion in assets and $1.5 billion in deposits, and Cape Fear Bank in Wilmington, North Carolina, with $492 million in assets and $403 million in deposits, were shut today by state regulators.

The U.S. has lost about 5.1 million jobs since the recession began in late 2007 and unemployment jumped to 8.5 percent in March, the highest since 1983.

The Colorado failure will cost the FDIC’s insurance fund $670 million, while the cost to close Cape Fear is $131 million, the agency said in separate statements.

News from Chicago

This news is from Chicago.

The local transit authority (CTA) had as small( ? ) as US $ 1.5 billion. As things stood, this 62% funding gap left the CTA unable to pay retirees as soon as 2013.

CTA thought to borrow to fill the hole. The recent crash has been a lesson as to where excess leverage can leave a person, fund, state or even a country. Since the beginning of 2008, the CTA has been paying out more to bondholders than they are earning on the borrowed funds, further exacerbating the authority's funding gap.

This is not a local problem. It is learnt that numerous state pension funds around the country are coming up short in a similar fashion.

If firms in India are following the same strategy to fill the hole, think of situations in near future. USA Government have given loans to companies in trouble. That means the companies are paying interest in a tough situation. If recession is not recovered in short period, their hole will grow bigger and recession will be more deeper.

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