At least we will have jobs to pay for the $100 oil.
Which jobs? These cuts will not turn around the housing market which still has 2-3 years to deflate.
http://globaleconomicanalysis.blogspot.com/2007/09/righting-economic-ship.html
Bank of America (BAC) and Wells Fargo (WFC) both lowered their prime rate to 7.75% from 8.25%. In other words they have given up 100% of benefit of the drop in rates by passing it all on. But how many qualify for the prime rate, and more to the point who really wants to borrow in a clearly slowing economy unless they have to?
It’s going to take a lot more than 50 basis points to “right the ship”. And the ship I am talking about is the economy not just homebuilders. besides, the medicine is wrong. It was panic moves by Greenspan (with Bernanke voting with Greenspan every time), that created the credit bubble. Panic moves to lower interest rates can hardly be the cure. Bernanke has proven the inability to distinguish problem from solution. I talked about this in Bernanke Proves he is a Complete Fool.
Micromanagement by the Fed in response to every economic ill just creates bigger and bigger bubbles until it all blows sky high. It’s high time to abolish the Fed an give the free market a chance.
Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/