Federal Reserve makes emergency rate cut

MSNBC ^ | 01.22.08

[wardaddy]

You replied to me a post I did not make Jeff.
but I agree with what you said

[patriciaruth]

They wouldn’t give me a CD for more than 11 months at the current interest rate at the bank.

I didn’t have time to shop around so I took it.

[bella1]

I’m in Michigan. Chemical Bank.

[XR7]

And then add the Boomers retiring to the equation....

[Bogie]

Germany gets hit again today. EU says they need to clean up their co2 emissions.

[Christopher Lincoln]

Here is one pro-capitalist FReeper who is saddened, and also alarmed.

[jhpigott]

not sure the Fed band-aid .75 rate cut is going to do the trick. DOW down 200 at the momement

[Cedar]

The other 2/3 of the country are not.

[petercooper]

Then they are foolish. Nothing gets you a better return over the long run.

[Cedar]

Problem is they just can’t afford to lose it, which can happen in the stock market.

Many don’t even have enough left over from the weekly paycheck to invest at all. Those who have a little savings take the safe route of investing in a CD.

They just can’t afford any risk at all.

[gogogodzilla]

No! I want Flanian Pobble Beads or the Triganic Pu!

[ChinaThreat]

“Anti-capitalist”?

Thats funny. Because i don’t support an idiotic and artificial rate cut. Do you understand, a large part of the problem with the economy is related to low interest rates. This is an artificial attempt to keep idiotic loan companies and idiotic lenders afloat. This is what got us in trouble in the first place.

Now to add to this lunacy, our government is going to borrow some more money from China to give everyone a $600 “rebate” irregardless if they only paid $1 into the system. This is not pro-capitalist. This is socialism my friend.

[dglang]

Not if the rate is LOCKED. Once locked, it can’t change.

I am also in the process of having a house built with closing in early April. When I asked about the possibility of having the rate locked, the mortgage company said that they don’t lock rates more than 30 days away and once locked, it can’t be changed.

They also said that they were expecting further rate drops and that it wasn’t to my advantage at this time to lock the rate since they were expected to fall.

The rate has now been dropped three times since we first signed the contract on the house and is expected to drop some more at the end of this month and again next month.

Needless to say, I am glad that we couldn’t lock the rate when we signed the contract with the builder.

The only time when it is advantageous to lock the rate is if there is danger of it rising and at the current time, that is not expected to happen for a while.

[dglang]

Not yet, there’s probably another few months to go before things stabilize. I expect that as soon as I close on my new house in April, I will be shopping to refinance.

I am currently financing through the builders mortgage company and they aren’t the lowest available. I chose them because they pay $7,000.00 of the closing costs and gave me another $5,000.0 in decorating or furnishing allowance for using their company. I am essentially purchasing a NEW 6 bedroom 4 bath 3514 sq ft $276,000.00 house with NO money down.

Despite their slightly higher rate, those immediate financial gains were worth using them and then immediately refinancing as soon as possible.

Now is the time to but a NEW home, because the builders have already slashed prices to 2002 levels and are offering great incentives to but a new home.

[djf]

[PeterPrinciple]

So, if we use interest calculations from the ‘70s, what do we have really? I recall they peaked at around 21 percent then. And the 10.7 percent unemployment rate then would be ...what today? Those were rhetorical questions.

---

When Clinton was president they moved a lot of national debt to short term debt with a lower interest rate. This was one of the actions that made it look like spending was under control. Long term debt is what creates stability. Tell me what politician will move debt back to longer term and more expense. Answer is they won’t. We are locked into cheap money, chaos and inflation.

[PeterPrinciple]

The only time when it is advantageous to lock the rate is if there is danger of it rising and at the current time, that is not expected to happen for a while.

---

My credit Union is offering 15 year loans at the same rate as arms. What does that tell you?

[dglang]

Rates are always changing. I remember when my credit union was oppering 12% on CDs.

In specifics regarding your stetment, you didn’t say what the loan was for and that matters a lot. Car loans from banks and credit unions is usually much higher than if the loan is for a home.

Often times, car manufacturers may be offering zero percent loans just to move inventory. Home builders with ‘their own’ mortgage companies often use lower interest rates to also move inventory.

My builder’s mortgage company immediately sells the notes to other investors and doesn’t service them at all.

They take an immediate profit from selling to other investors at slightly higher than the current going rate while the investors hope that the borrowers keep the current loan and not refinance elsewhere.

I know that by immediately refinancing, I can get a lower rate elsewhere. I already have formal approval letters from three other mortgage companies for rates that are lower than my inital rate from the builder

I just asked for and received yesterday a ‘good faith estimate’ from my lender and thay have already dropped their rate by over 1/2% since I initally applied a couple of months ago.

The bottom line is that one still needs to shop around to get the best deal and in my case, that ment taking the builders incentives and then refinancing as soon as possible elsewhere.