Right-on Gary

EXCUSE ME BUT SINCE WHEN IS IT THE GOVERMENTS JOB TO MAKE SURE THAT WALL STREET IS HAPPY.I OWN A LOT OF STOCK BUT THIS IS JUST PLAIN WROOOOONG.HOW DARE INVESTORS HOLD OUR GOVERMENT HOSTAGE WHENEVER THINGS ARE NOT GOING THERE WAY.

I agree. Well put, Gary. The country is being sold the concept of, "Everyone can afford the good life." The artificially-created prosperity of the housing boom was a train wreck waiting to happen. The people that allowed and promoted the lending practices that created this monster will walk away scott-free. Meanwhile, those of us who spend less than we make and practice personal fiscal responsibility will be left paying for the greed and deception of others. Again. With 2/3rds of the country's economy dependent on consumer spending, big business and big banking isn't open to the idea of a slowing or stagnant economy. Until this country gets serious about long-term fiscal planning and spending, both on the macro and micro levels, the economy is going to be a "one trick pony." The future is now and it isn't pretty, folks.

Well put Gary:

The current situation is similar to what created the Fed. The 1907 Crisis was solved by J. P. Morgan, but he and the rest of the bankers could not save the worst of the bunch and it looks like 2008 will be a repeat. While there is no panacea type solution, leaving the damage to be stretched over time may only create a recession. A rate cut, while it would please Wall St., would be a temporary fix. As you have stated, the disparity between the dollar and other currencies is already sufficient to strain their economies and having this widen is a recipe for disaster. The cost estimates in housing range from 100 billion to 4 trillion in the way of write downs, defaults and lost tax revenue, but one thing seems missing from the equation. The amount of building in the last 4 years is of such a magnitude that it could not have been financed entirely by the domestic banking houses. Since we have been economic partners with the U.K. from way,way, back you can be sure a big chunk is London financed and we have Northern Rock as an example. There are another 550+ banks that have yet to report, but must do so on Dec. 7. Considering that the pound is now 2.06 a value write down has occurred simply due to currency exchange, add in actual value write down and this is sure to make for a lot of red ink - that is - if there is excessive exposure. That is presently unknown and I see little reason for anyone to speak out early as the U.K. investors are already very spooked. Any leaks and there would be runs as the U.K. does not have investor insurance on the same scale as the U.S. You also cannot sue brokerages for mis-judgment as you can here. In short, if anything goes badly amiss over there it will start here on the same day. It we make it passed Dec. 10 without a collapse, I will feel relieved.

Spot on!

100% spot on!

Well I guess if you work on wall street, or for the goverment, or some multimillion dollar company it easy to say lets raise rates, and forget about the little guy. Lets tax everything more, and drive the cost of living up. The small guy suffers. The construction worker gets laid off. Small companys close there doors, because they can no longer afford high intrest rates. High gas,oil prices, and the grow cost of heath benifits, are making the rich richer, and the poor, poorer. People are not losing there houses because they are lazy, they are losing there homes, because the company they worked for can't afford soring prices.
My average income yearly has to be at least 50k. Just to make ends meat. I don't have a new home, or a new car,and I don't go on vacations. I have the right to own a home, and not rent. I have the right to live a good life, and not have to beg. You say we all don't have the right to live good, I say we all have the right to the american dream.
I say we all have to do what ever it takes to help one another,and not leave anyone behind. I don't have the answers to make things right, but I know forgetting about the less fortune it isn't the answer

Mike - You don't have the right to "own" a home. The only rights we have are in the Constitution.

Home ownership is just a priveledge. Just like getting a drivers' license.

Mike,

The little guy is dealing either with a fixed-rate mortgage (FRM) or an ARM. The Fed rate doesn't really impact the fixed-rate segments of the loans (see e.g. http://library.hsh.com/?row_id=90). It does affect the variable-rate segment or ARM loans, but the conceivable magnitude of Fed rate adjustments wouldn't make a sufficient dent in monthly payments to save a significant number of borrowers who are on the verge of defaulting. For example, a drop from 6 to 5% on a $200K principal makes about a $100/mo difference; that sort of drop is quickly lost to the effects of inflation (i.e., the borrower is likely to see his non-mortgage expenses rise by a similar amount).

Mike,
You have it backwards - the lower rates devalue your dollar, reduce your buying power, increase oil prices and bail out the big money guys not you!

Sheldon l , the lower rates might bail out the big guys, but you know what rising the rates or keeping them the same won't help all the people who are lossing there homes. With all the spiking prices there has to be some relief somewhere. Ok we leave the rates the way they are. 12 percent of the country gets forclosed upon. I know whos going to get rich again. the banks.The big guy never loses. The little guy always get it in the end

Mike,

This is an emotional issue and many of us share your sentiments in not wanting to see people hurt, but the fact is you're wrong on several counts. A) You don't have a right to own a home and not rent. This is what people were told by realtors and the banks as people got way in over their head on mortgages they couldn't afford. B) You don't have a right to a "good life." Go to school and learn either a skill set of a trade and you can earn things associated with a good life. This country wasn't built on handouts. It was built with hard work - people that built there own American dreams. C) and finally, you're right - people aren't losing their homes because they're lazy. They're losing them because they were stupid. They bought into the idea that real estate prices never go down. They listened to realtors and mortgage brokers who told them that the teaser rate was ok and not to worry about how much the mortgage payments would reset to. It all comes down to simple economics - if you can't afford something, don't buy it. And everyone didn't want to listen to their inner conscience as they kept up with their neighbors in the brand new homes and the leased BMWs.

gary, did you flunk economics 101? just because interest rates go down a bit, does NOT mean its easier to borrow money... checked out the tighter lending requirements lately? or have you been asleep the last 6 months? no.. i'm sure your wrong, again....

We need to get the Dollar and Euro back in line. Three years ago the Dollar was $.89 to $1.00 Euro Now the Dollar is at $1.44 to $1.00 Euro. The US exports did not increase enough to help our economy. We need the Government to work on the Dollar Euro exchange quickly, before the economy takes a bigger down turn.

Ok well I got bashed around a little, and thats ok. I wasn't looking for a hand out, because I'm a hard working construction worker. I've been working construction for 23 years. I guess I can call my self skilled. Being a skilled worker does me no good when people can't afford to either fix up there home, or build a new home. You say rate changes would only amount to 100 dollars a month. I see and extra 1200 dollars a year. You say that would be eaten up in inflation anyways., but thats 1200 dollars that I have to put to the cost of living. I'm in a fixed rate right now, and you know I probally wouldn't refinance unless I could save at least 3 bills a month. I do know people that are in hard times right now. Not because there interest rates are to high, or lack of schooling. But lack of work, and they are very smart people. Do they have to change there whole life around and go back to school to learn to do something else with there lives. No one was complaining when he designing and building homes for the rich. Now he's tring to tighten he belt a little to save a buck or two where he can till things turn around, and I hear everyone saying well you got your self into this listening to bankers you deserve to lose your home. You don't deserve a home if you didn't save your money. Hello things have been bad for a couple years now.
I guess what I'm saying is there is a lot of honest hard working people who are going through tough times. We shouldn't just put everyone in the same boat as the guy whos tring to take a free ride, and got caught up in this mess

I was a highly skilled outsourced IT worker in California worker probably more skilled than ANYONE is this posting. The US is about to feel the very pain I have endured for 6 years under this cabal that essentially seized the White House in 2000. Most of you have no idea what is about to come....hope you all like soup...

The federal reserves efforts to manipulate the market with rate cuts is formula for disaster..!It aint natural !!!! Better to bite the bullet now, then to wait till the system collapses like a house of cards...............

What's amazing to me: The Fed cited its fear of higher crude prices causing inflation as the cause of its uncertainty about further interest rate cuts. Now, if they can prove that theory, they might
win a Nobel prize for mathematics.But even Einstein's examination of the theories and laws governing the universe only proved
probability not certainty...But one thing is certain: High interest rates will never cause crude prices to decline when,in fact, the price of crude
is no longer a true function of supply and demand which is now the prevailing circumstance. So what is the FED telling us?
The simple truth is that economists are the people who couldn't
handle higher mathematics and science so they became economists. It's
like giving the controls of a 747 at 600MPH and 30,000 ft.to somebody
who hasn't even soloed. So the question is. why are we doing just that? Millions of people are about to start substituting food for
heating oil and the country is being run by incompetents and the traders in the Future's market. All the result of the blind leading the blind. Incidently, the value of the dollar is a function of perception of what supports that value not interest rates. Higher rates only attract foreign money to buy treasuries to fund the U.S. debt which artificially supports the value of our dollar but at a high cost that really increases our debt and ultimately will lead to an economic collapse unless paid back by a healthy economy. Raising rates to satisfy the need for foreign money investments is a band-aid solutuion where major surgery is needed. We should have learned our lesson in the late 1970's. And a long term model for a growing economy can not be sustained unless supported by sound fiscal and monetary policies. And predicated on energy sources that will free us from the shackles of OPEC and other crude -oil countries.

I got an idea lets pull out of Iraq. That will save us $135B per year according to the government but probably more likely a quarter of a trillion dollars a year. I understand that gas prices may go up but that is fine with me - nobody really cares about the cost of the war - it is simply added to the national debt and when it gets too large the wealthy and the powerful will simply take their wealth to Europe or somewhere else - the ultimate white flight. Why is it we can not develop an alternative to oil/gas? If we did it would not only fix our energy concerns, it would devalue the middle east oil. I read the other day if the government would have taken the money it has spent on the Iraq war and purchased solar power system for residences - every single family residence in the Western United States could have been equipped with a solar panel system saving billions and billions of barrels of oil. Whether they cut rates, inflate the dollar, devalue the dollar and so on these are games that the rich and powerful play for an effected result mean while the family of four living on $60,000 a year (in California) are struggling. The next big thing to hit the financial markets is going to be the millions of people who decide to walk away from their credit card debt - there is very little downside only damaged credit rating. Rarely are debtors pursed due to the low rate of recovery even after a judgment. Stay tuned!