Re: Fed's Rate Cut Won't Help Consumers Who Need it the Most
- From: "Bob Brock" <bbrock@xxxxxxxxxxxxx>
- Date: Sat, 22 Sep 2007 20:50:09 -0400
"Winston_Smith" <not_real@xxxxxxxxx> wrote in message
news:ipbbf3dj5v0hssqgpup1ohlgadu9tdp51d@xxxxxxxxxx
On Sat, 22 Sep 2007 19:51:29 -0400, "Bob Brock" <bbrock@xxxxxxxxxxxxx>
wrote:
||Fed's Rate Cut Won't Help Consumers Who Need it the Most
Well boy am I surprised to hear that. Bush usually gets these things
right. ;>}
It's what I was trying to tell cheesy, but alas...he refuses to listen.
http://www.foxnews.com/story/0%2C2933%2C297463%2C00.html
For debt-weary consumers, the Federal Reserve's decision to shave interest
rates on Tuesday is welcome news for their stock holdings but won't do
much
for their mortgage payments or savings accounts.
The bankers seem to like it. Stock brokers are pretty happy too. I
guess you can't please all the people, so we'll just focus on the fat
cats.
It may also help corporations with banking connections buy up some prime
real estate at forclosure prices and really good interest rates.
Responding to fears that a credit crunch - exacerbated by a sagging job
market, a housing-market pullback and the related crisis among subprime
mortgage holders - is squelching economic growth, the Federal Reserve took
0.50 percentage point off the target Fed funds rate, marking the first cut
in that benchmark since 2003, and 0.50 percentage point off the discount
rate.
And don't lose sight of the fact that those who do hang on and keep
their house will have much less to spend elsewhere. Ah, yes,
Bushenomics. Or is that voodoo? Daddy can tell us.
Keeping up payments on a house that has lost a fairly large percentage of
it's value will be a real burden to recent home purchasers. How would you
like making 300,000 dollar loan payments on a 222,000 dollar house for
example.
For those on the brink of foreclosure, that's not the life preserver they
need to keep them from falling in. And for those who also are subprime
mortgage borrowers - there's an estimated 1.5 million to 2 million out
there - the Fed move is of little consequence.
To make life a little more interesting for those that lose their
house, rental housing is becoming less available and the rates are
climbing fast.
Supply and demand.
"It will help those who need it the least," said Richard Hastings, an
analyst at Bernard Sands LLC. "But for those who need the most help, this
does nothing for them. The Fed cannot help them at all."
Makes one wonder why we have it then.
To help the bankers and their friends.
.
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