The Federal Reserve announced a rate cut of 3/4 a percent today. ABOUT FREAK'N TIME. Our banks, businesses, and people are in need of cash. And yet, I still think we need to lower the rates more.
This whole slow down has been related back to the house bubble and credit crisis. Banks have been bleeding for the past 8 months, and the housing market is in complete confusion. "How much is a house worth?" has become a good question. You mean how much was it worth last year? Last month, or today?
The only way I can see us getting out of this mess is to 1) lower the rates in a huge way.Get more money into the system, get investors picking up inventory homes and sitting on them instead of letting all these builders and tight owners loose their shirts. 2) Get this credit mess in check. To be honest, this is a huge mess and I haven't come up with an answer I love yet. There are still horrible loans out there available for people who don't have the credit, income to debt ratio, or understanding. I'm working a short sale right now where I'm just sick to my stomach on the debt these people have and how easily they can go pick more up tomorrow. The entire industry needs to be cleaned up. I don't necessarily mean government regulation or intervention.
This whole credit crisis is enormous! And will not end because some huge banks are going under.
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