The market was up by 300 points on the expectation that the Fed would lower rates 1 point. Instead they lowered rates by 3/4 of a point and the Dow is up 290 points. This is about the confidence necessary to give people who need to borrow and lenders who would like to lend some room. It does not do all that much for the mortgage crises.
I think this is much more about a bail out for the financial industry not the homeowner. Lehman Bros. and Goldman Sachs, both said Tuesday their first-quarter profits fell more than 50%. Yesterday, peolple thought Lehman Bros. was next to go the way of Bear Sterns. Its high fore the year was $160.00 and it sold yesterday for $2 bucks a share. Both shares are up dramatically!
Regarding the home crises, these moves dont really lower rates that much. I believe that this will take an effort whereby the banks join the Fed and do their part. I believe the banks have to renegotiate these loans to help keep people and their homes off the streets. The only other way is fore the Govt to intervene and be the lender of last resort and buy all this bad paper.
Plenty will howl, and rightfully so, about how we help out all those who speculated or lied to take a chance. After all we are the land of " a deal's a deal". Still, if we dont we will tank big time...a serious a crises as we have ever seen.
Thanks for Reading
Howard Bell
A new blog for property owners and managers in San Francisco
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