Comments on: Fed Drops Interest Rates To Near Zero

By: Christian

Christian — Wed, 24 Dec 2008 18:15:04 +0000

OK I should correct myself…lowering the rates IS good, short term, for home sales. But horrible for the economy, bad for the world and possibly cataclysmic for the dollar.

By: Christian

Christian — Wed, 24 Dec 2008 18:13:47 +0000

Seriously guys? How can it be argued that lowering the rate is good for home sales? Granted I’ve heard this over and over, but no one has shown me a good reason for this being the right action to take. Credit is freezing everywhere because there’s no incentive to lend, and now we’re inflating our currency even further, just treading water and we think this is the right play? Mortgage rates ought to be in the double digits right now. The only right action is to slow things down, let the banks swim in inventory, and the market will force them to sell at fire sale prices to buyers who have an actual down payment. Will many of them go belly up? Probably. But it will put home prices where they need to be. Instead, we’re destroying our dollars and keeping our pricing artificially higher than it ought to be. All we’re doing is prolonging this recession, possibly even causing a depression.

By: Daniel

Daniel — Wed, 17 Dec 2008 08:36:02 +0000

That is True Arno. Along with this interest rate reduction in many countries including US, they have also started offering insurance of the same amount as that of loan. Is it true?

By: Arno

Arno — Wed, 17 Dec 2008 00:54:26 +0000

The bullets may have been exhausted in terms of interest rate reductions, but Uncle Ben certainly is not out of ideas. He is obviously not opposed to interjecting enormous risk into the federal reserve by buying up overpriced mortgage assets. And eventually, it is certain, that policy changes will push consumers into 100 year mortgages like Japan.