Posted on 03/18/2008 8:18:23 AM PDT by Lazamataz
I keep hearing from others asking who is benefiting from all these interest rate cuts...Clearly it's not the American middle class. I can only assume it's the large banks, corporations etc.
Eery idiot that signed one of those mortgages shoule lose their temporary housing and every company/bank that wrote them should go under!
I have been saying for months that the Fed’s actions are not helping the credit crunch. You can lower rates and add liquidity to the banking system all you want, but if the banks won’t lend out the money it will never reach the economy.
I understand the need to make sure banks have ample liquidity for deposit operations, but the idea that recent Fed actions will stimulate the economy is simply wrong right now. Lowering rates only works if the reduced borrowing is because borrowers are unwilling to pay the prevailing rates. Lots of borrowers with strong financials are willing to borrow, but the lending window is just not open.
They throw that out there, but don't say how that is supposed to happen. Obviously the small businesses that can't get loans at 5% will be even less likely to get loans at 4% or 3%. Anybody investing or loaning money for the long term with inflation in the pipe is nuts. More speculation is the only lasting result of the rate cuts. And eventually, as Mises said, complete destruction of the currency.
If the government keeps intervening in new and increasingly aggressive ways every time the market sneezes then yes, we’re all gonna die. No economy can survive this much socialism as a permanent solution.
The only fix for the problem is capitalism, but I don’t see that option being offered at the official channels.
I may refi with a five to seven year balloon, because I figure on moving in two or three years, and my 1100 s.f home is of a price that didn’t get hammered too bad, if I can find one under 5% without the hateful PMI.
I will be much tougher on purchase price next time, and don’t expect to make a killing at resale, nor will I use my house as piggy bank.
Mostly commodities traders (oil, wheat, gold) and to a lesser extent stock holders. It also benefits politicians because they can spend more without raising taxes. Some people will say exporters will benefit, but that is just silly. Would you rather sell 10 747s for 10M Euro, or have to sell 12 747s for 10M Euro? Yay..exports went up..but we only get paid the same.
The only difference is that purchasing 12 looks more attractive to the buyer than 10. So they may be more likely to purchase. In other words, you may not have had the order for 10, but get the order for 12.
Sure, because its a great discount for the buyer. The exporter could accomplish the same thing by cutting prices on their own, but a falling dollar puts additional pressure on input costs (commodities) and workers’ wages.
Mostly commodities traders... stock holders... politicians because they can spend more without raising taxes....exporters
OK. If it's benefiting some...Who are the ones that are being harmed?
I’ve got a 30 year 5.5%, and get about four letters a month trying to get me to go to an ARM.
Well it comes out of everyone who measures their financial value in dollar-based assets. Over the last three months the dollar value has dropped about 9% - gas and food prices keep in step and follow that trend in the exact opposite direction.
The main goal of low interest rates is to keep businesses investing (borrowing) with the hopes that it will create jobs and increase consumer spending.
So, its good for borrowers, bad for savers (unless the savers move into commodities/equities). Of course the problem is, the Fed will save some companies and not others so how do you know who to invest in if the government-entities decide who profits and who liquidates?
Government guaranteed asset appreciation is just insane.
I disagree because the crisis is too large and may overwhelm the US economy. I suggest providing liquidity to the credit system as Feds are doing. HOWEVER, I THINK THE ORIGINATORS AND BUYERS WHO SCAMED THE SYSTEM SHOULD BE INVESTIGATED AND TRIED. UPON GUILT, EXECUTED IN PUBLIC TO WARN FUTURE ORIGINATORS, BROKERS AND APPLICANTS NOT TO PULL THIS SH#T AGAIN. Old ancient saying - merchant class is needed, because they have the knack to produce wealth for the realm, however the merchant class is capable of being wicked and greedy, a ruler must find a way to punish them without destroying their ability to make money. The business men hasn’t changed much since ancient time. My saying - merchant class love life, money and are basicly cowards, so killing one of them to warn 10,000 of them is not hard to do, thus a nation’s ruler must take advantage of this historical fact to restore law and order, and prevent future scams (and definitely increase his chance of being re elected in a landslide).
So it seems those with the least amount of money, or income see their dollars buying less..So it would seem those with least money or income will be harmed most due to these bailouts?
>> OK. If it’s benefiting some...Who are the ones that are being harmed?
Believe it or not, some people actually SAVE money.
They are being squeezed by low interest rates.
The inflation that lower rates are bringing is a double whammy.
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