Join Date: Jan 2008
Location: Southern Cali
Total Points: 345,655.92
Originally Posted by Nwahs !!
The problem is two fold. If everyone had a variable rate loan, the banks would be making money, but they home owners would be going bankrupt (we see some of that), but if everyone had a fixed rate home loan, the banks would be losing money, like we see right now.
We are basically in a no win situation right now, it really doesn't matter what kinds of loans people have, because the economic atmosphere that was put in place by the fed is absolutely slaughtering everyone.
There is no doubt about it, the economy IS slowing down, and the fed decided that keeping inflation low was more important that keeping the financial heart of America alive.
We are actually on the verge of catastrophic economic failure, thanks to the fed.
The banks really are not in that much trouble, they have insurance.
This is the real problem. There is 500 billion dollars in bank insurance, and with the banks in such dire straits, the insurance companies are having to pay out.
If the fed does not act in the next week, or even the next few days, nearly every single one of these insurance companies will go belly up.
The DJIA will take about a 3,000 point dump in one day, massive hysteria will ensue, and the United States, might be finished as an economic superpower, all thanks to one man, Uncle Ben.
The "expert" on the causes of the great depression, is potentially driving us head long into another one.
gotcha. so you're sayin the rate cut isn't so much to stimulate the economy through lending origination but to actually start turning a profit on all these existing notes, right?