Wheeee! Free Money!
By Susie Madrak Wednesday Dec 17, 2008 7:00am
The Fed lowered their lending rate to between 0 and .25% yesterday in an attempt to combat the Bush recession:
In theory, the Fed's action should reduce the cost of borrowing for consumers and businesses, since the prime rate — what banks charge their best customers — moves in tandem with the federal funds rate.
The prime rate typically influences rates for car loans, student loans, credit cards and other debt. With Tuesday's cut, the prime rate is expected to fall to 3.0 to 3.25 percent from 4 percent.
However, despite the attractive rates, banks aren't lending to most consumers and businesses. Weak financial institutions continue to hoard cash and build their balance sheets, with little appetite for risk in new loans. That's worsening the economic downturn, especially since it hurts consumers, who drive almost two-thirds of U.S. economic activity.
In a statement, the rate-setting Federal Open Market Committee said that "The outlook for economic activity has weakened further . . . the Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability."
Credit card companies, of course, will continue to charge as much as they're legally permitted, driving consumers into a ditch and accelerating mortgage foreclosures.
Isn't untrammeled capitalism fun?
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Maybe it would have helped if Paulson had thought twice before he came out a couple of months ago and screamed, We're all gonna die if we don't give a shit load of tax payers money to Wall Street.
Every face in the US took on the deer in the headlights look and we all squeezed our money as tight as we could in our hot little fists.
With just about everyone's job in jeopardy, who in the hell is going to jump into a large home or car loan now? They can scramble the money around all they want, but until consumers feel secure in their jobs, no one is going to make any big financial moves.
but these damn banks and lending institutions, aren't lending!
There's loopholes they're (the CEO's) using to give themsleves MORE bonuses with OUR DAMN MONEY!
Our forefathers would have their heads on pikes!
Let's see, they can borrow the money at basically 0% and then either turn around and lend it at 6% via a real loan or put it on the street where the chumps will pay 24% for the same money, what do you suppose they're going to do?
It's time to start recognizing that these bailouts are merely to allow the banks time to gouge out profits that will be used to cover up future losses. This is arguably the best we can hope for but it sure galls me to be financing the very people who caused this mess.
So let me get this straight: I borrow from the Federal government at .25% and then loan to consumers at 19%? Dang... looks like I'm in the wrong business!
Yeah. Even if the Fed lowered the prime to 0%, credit cards would still be "prime + 22%" and they're refusing to make any other type of loan unless your credit rating is above 800
The banks are just keeping the money and refusing to lend, causing people to not buy since they're worried about layoffs and have no savings, causing businesses to cut back, causing layoffs and bankruptcies, causing...awwww crap!
the Republican recession. And as it gets worse, the Great Republican Depression. The pain and suffering that America is suffering and will continue to suffer is the result of Republican policy, conservative ideology and neocon implementation.
Who has controlled the House for the past two years? What party demanded Fannie and Freddie hand out loans to people with bad credit?
Ohhhhh... Its all the Republicans fault. Sure. I see the ancient divide and conquer technique is still working well.
The Republicans have held a solid majority in both houses of Congress from 1994 to 2006. Their administration has been either deregulating or not executing regulations on the books since 2000. The housing Bubble exploded from 2001-2006, and then collapsed in the summer of 2006.
Further, the Dems were elected in 2006 not because of the financial meltdown that was looming and being pointed out about by Calculated Risk, Roubini, and Krugman, but because the Bush Administration tortured, wiretapped, and bungled Iraq. In fact, the case could be made that all of this would have happened under Kerry's watch had the "liberal" New York Times broken the story about illegal wiretapping that it had known about for the entirety of 2004, instead of a month after one of the closest elections in American history.
And Fannie and Freddie are hardly the only bad players here. CitiGroup, BofA, AIG, Fitch, Standard and Poors, Moody's...
There was a great piece of Reporting about how Eliot Spitzer was getting set to blow the whistle on the Madoff Ponzi scheme but the financial world got to Him first by the prostitution thing.
Today, a full article of the SEC says much about how they for 8 years had warning which they ignored, but no mention of Spitzer.
I'd really like this story to be followed through to uncover the press' obsession with sex when Billions are being stolen.
The Neocons have won, they have taken down America and sold it's assets. They have wasted the blood of Americans. It's time for things to turn on them.
How did you get your picture to post on a thread about a month ago?
☻
It's too bad it actually takes a DEPRESSION to get American workers to stop for a minute and look over their shoulder at what the politicians have done to America. Admit it now. They couldn't have done THIS much damage without the acquiescence of Democrats. Harry Reid is simply not strong enough a leader. We need a new leader in the Senate.
as I understand it, a recession is a cyclical stagnation of the economy that will correct itself with minor adjustments.
A depression does not correct itself and needs massive adjustments from the "outside." (government)
The government/FED has intervened in every recession. A recession is a correction of excesses. A depression is an even greater correction of greater excesses. The depression is the result of the massive adjustments from the outside, which resulted in a boom.
The FED manipulated interest rates and did not allow the needed correction in 2001. Thus, with more stimulous, the existing excesses were piled onto, making the needed correction larger.
Bernanke has now created a bond bubble, like the commodities, housing and stock bubbles before them.
The bond bubble will end badly, as did all the bubbles before it.
A depression is a correction, thus it does not correct itsef.
The Great Depression did not respond to adjustments from the outside. The depression lasted all the way through the 1930's, despite anything Roosevelt did.
for clarifying that.
A friend of mine who is a commercial loan officer at a mid sized bank told me B of A is turning off home equity credit lines. If you have 51K in available equity, you can no longer borrow it. They actually had a provision in their contracts that allow them to do this. Most banks do not.
Unbelievable.
I used to work at WaMu and people who had home equity in the hundreds of thousands or millions all of a sudden had none. And, it wasn't because of some poor credit score. Nope the bank just stopped extending lines of credit. And the thing that is horrible about that situation, people wouldn't be notified in a prompt manner (the banks don't have to give a prior notification). They would come into the bank and try to take some money out only to discover that there was none.
I have a hard time feeling sorry for people who want to use their HELOCs or even worse, depend on them.
As for BofA turning these off -- duh. With Loan-to-values going insane, what did you expect? That they'll just give away money levered against a depreciating asset? These BofA dill-holes are finally doing what they should've done 5 years ago.
March on DC with torches and pitchforks?
I've been wanting this to happen since September.
Trickle down corruption:
From Bush/Cheney
to Defense
to State
to DOJ
to Interior
to SEC.
How to kill the middle class, brought to you by the republican party.
Two categories of republicans: the rich and the ignorant.
Obama said that lowering interest is one of the tools we have to combat the economic issues at hand. Since Bush has lowered the rates as low as they can go, effectively he has taken away Obama's tools.
Now when the economy tanks and we do have a Depression, the rigth wing will be blaming Obama nt Bush. I know, they already are blaming him!
It won't fly though. people know where it started and that the right are to blame. They have already tried to blame Obama a little and the shit came raining down on them. I think it was none other that Fox News who tried to make up that crap. The only ones who would believe them will be the 23%ers and who cares about them?
Really?
They say that economics times were "great! damn it they're great!" until 2006 when the "damnocrats" took over and ruined everything. They are touting this as proof that Democrats can't handle and shouldn't be in power.
Never mind that the republicans best efforts of 12 years if being in power couldn't stand on their own two feet for 1 1/2 years after the Democrats toppled them and our country! I just think that the the republicans will try to spin this to be our fault. And I think they'll succeed. I mean look at the efforts the spin machine is going to to make GW look like a god. There are enough to buy it to make it at least stick around long enough for someone "credible" to start spewing their mantra and oh screw them, too much time wasted already!!!!
You are exactly correct BobD. And our weaklings in congress will allow this. It is time for Harry Reid to step down. We need a strong bulldog in charge.
Let Obama build the "bipartisanship" he wants. But we need the majority in congress to loudly pronounce to the american people who was in charge when this shit hit, hold the repubs feet to the fire, and deny ALL legislation efforts put forth by the neocons.
If the Democrats let this slide, it will be the end of them.
Democrats blame repulicans and republicans blame democrats.
Phill Grahm proposed dismantling Glass Steagall, both parties strongly supported the final bill and President Clinton signed it.
Despite warnings about what would happen if it was dismantled, neither party stood up and said no.
Inflation and deflation complete a cycle. Democrat control and republican control complete a cycle.
President Kennedy cut the top tax rate from its cycle high.
President Carter deregulated the airlines before Reagan began the era of deregulation.
Inflation peaks and then becomes disinflation and then becomes deflation.
The cycle has brought us here.
The polititians will continue to blame the other party as they always do. The truth will lie somewhere in between.
And to everyone that squarely blames both parties.
Yes. Clearly this is all Kennedy's, Carters and Clinton's fault. Silly us.
...you gotta lotta nerve putting "Kennedy" in the same list with Carter and Clinton...
Carter and Clinton never came close to giving a speech like this one from Kennedy about (secret societies)
http://www.youtube.com/watch?v=CaaUC8Mtjw4
Take 3 1/2 minutes and listen to America's "last" real president, and see if you can find and post anything even close to these statements, from Kennedy, by Carter or Clinton....I dare ya! ....(in a good natured way) of course...
Umm. Yeah. Did you see that I was responding to a parent post?
I just jumped on the chance to post my most favorite (video speech of a president) ever...
sorry...I'll go read what you were responding to...(slink)
lol ok. Now I'm off to check out your link....
the effective Fed funds rate has actually been close to zero for 2 months now. i have a post that helps explain this in easy to understand pornographic terms
Exactly. The Fed has been front running declining rates for some time. It's never any big surprise when they've announced rates for the past year because they've been effectively trading at the next rate for a couple of weeks in advance.
We've been at ZIRP for a while, and we'll be there for the next couple of decades. I only hope Obama can do the right thing and shore up the domestic economy before we're all sold down the river.
That's us. So, if we drive two thirds of the economy, why did the fat cats get all the billions when it would have made sense to give the money directly to the consumers... us.
As Charlie Brown's little sister said, "I only want my fair share."
NATIONAL PAYDAY NOW!!!
Often I have a C&L comment page up. I post my comment and then leave the page up when I go away from the computer to do chores or whatever. Always before when I would come back, I would have a notification of how many new comments had been added since I left. I would just click on that and all the new comments would appear. With our new dealie this morning, when I left my computer for a little while and returned, there was no notification of any new comments. I had to leave the site and return to see all the new comments. Is this something that is fixable?
Sorry to wander off the path again, but I'm just curious.
Maybe there would be some confidence if the big auto companies could get bank loans rather than come directly to the govt for money. It's kind of ironic. The banks won't loan the auto makers the money that the govt gave the banks to loan. Seems the new slogan is the buck stops at the bank.
as of this morning that carries the comment notification?
Yeah, I know about the new one. It's just that I guess after some length of time if the new one isn't clicked on it just goes away. The old one used to stay up for a long time.
button at the bottom of the page. It's a little square and flower-type looking thing. Click on that and it will allow you to update all the comments. Or, at least it did.
Damn! Just when we get so we can feel comfortable with technology somebody goes and fiddles with it.
I would be happy if the spell check on the comments box worked for me. I loved that about the original site. I depended on it so much.
Do you use Firefox?
Mozilla
Then you should be getting the spell check thingy.
I wrote a reply to you, clicked on the preview button and here's what I got.
Here's my comment
If I did, it would be the answer to a maiden's prayer. Since the change a month or so ago or whenever C&L got the new digs, I can't play any of the videos unless I download them first. Thank goodness I still can play youtube videos when they are posted. Plus I lost the use of spell check. Kind of a bummer, but I'm flexible and for a plus, my dictionary gets a lot of use.
When I hit Preview, here's what I got.
ERROR: An unknown error has occured. Please try again.
There was no way to try again since all the buttons became inactive. I had to leave the site and return to get rid of the error message. I would suggest that no one use the "preview" button, at least for now.
I'm about ready to give up.
wrong with your tubes. I run Firefox-Mozilla and can view everything ok.
But I don't get spellcheck. There is a red line under a mispelled word, but not a place to correct it. I usually go to Thunderbird, start a letter to someone, and use the spellcheck there, delete the letter, come back here........Jesus, I'm out of breath just running around. Oh well.
I sometimes write my comment on Word and then copy paste it here.
instead of a house.
Now I have to wait until Jeb Bush becomes president before we get another boom.
Bite your tongue, the spin machine will have to make GW look good first. Oh wait, they're trying to do just that.... Maybe in time for Neil or, is it Chippy, the coking XGen Bushaholic they'll try to push up our noses?
That funny old Monopoly banker. I've heard he was representative of J. P. Morgan > http://en.wikipedia.org/wiki/Jp_morgan ?
I ask many questions, do to the fact there are many more knowledgeable people then myself. Some even act as if they know it all :-)
Has anyone ever received a AOL offer in the mail? Was it for 120hrs of "free" online service? Maybe 500, 1000 or 1200hrs? > http://en.wikipedia.org/wiki/AOL
Why did Bill Gates get the attention of the Justice Dept. with regard to IE? www.usdoj.gov/opa/pr/1998/May/223.htm.html
What are some of the reasons "Crack" became prevalent? http://en.wikipedia.org/wiki/Crack_cocaine
Who gains the most, the borrower or the lender?
Can't remember who said it, but someone on tv once said. Insurance companies are not in business to take care of you, they are in business to make money. Same goes for banks. They aren't in business to see that your money is taken care of, they are in business to make money.
You could also say that government is not in business to take care of you, it is in business to take care of government.
Govt. is supposed to work for us as our employees. But you're right, somehow we lost control of our employees and now they work for themselves.
I am not sure of the other perks of serfdom, but I believe they at least had a place to live.
http://www.youtube.com/watch?v=-DjYUmHjix4
Hank has given away the 700 billion while Bennie has been slipping billions out to friend, cronies and Foreign countries and keeping it quiet. Afther the audit the American people will see the total amount spent by the Bush Administratiion to be near 15 trillion dollars and none of it accountable. We were robbed blind and watched it happen. This is what the World sees and now Americans are demanding Obama fix it. Even the topic of salary has come up on the Media as what the President makes. Some think 400,000 dollars a year is to much, it sounds like Americans want Obama to work for nothing. Yes we gave Bush 400,000 dollars a year as he took the most vacatiion time, but us in a recession but never questioning the fact he should get his pay check. I guess for some Republicans it's normal for a person of color to for go a salary and just be grateful they live in America. But we have no problem paying a crook and thief like Bush/Cheney.
OK I'll take some of that money at 0% interest. And hell if I can't pay it back I know Uncle Sam and the taxpayers wil bail me out.... right...... right..... hello....
By now it should be clear to everyone except the blindest that unregulated markets work best for the players until there's no one left and they have to eat their own.
monetary reform -
here is how the money system should work - however, no one has the balls to do it.
http://www.heritech.com/yamaguchy/mcgeer/conq...
I have a feeling this link will not work from the USA - please let me know.
Lowering the inter-bank rate to a range of 0 - .25% should be taken as a very bad sign of our economic health. A last desperate act by the Fed, who have nothing left to falsely prop up the system. A weak play to stave off the inevitable pain. Duck and cover!
Wouldn't raising the interest rate actually encourage saving among the US people?
That isn't what they want. They want you to SPEND your money or, if you have none, borrow and spend it.
Consumption is 70% of the US economy, or it was. If the consumer doesn't spend the economy shrinks.
I know what they want, but I'm talking about what would be in our best interest. I haven't been able to earn more that 2% interest in a savings account since who knows when.
Capitalism is not the problem...
It cannot be the problem because there is no free market...
The FED (and its best customers/owners) have the monopoly...at least in the USA...
I think we the people should fire The Federal Reserve inc. and go back to printing our own interest free money.
If the fed aint doing its job, fire em'!
...it sucks to have to get a new contractor in the middle of the job but, if the (people you hire to do a job) turn out to be incapable like (Burnbanky and his employers)...we the people need to go hire someone else!
Try regulating the Fed? They are more secret than the CIA and have alot more power than any other branch of Government.. Oh wait!!! They are a private bank.. with a government function??
Sheesh.. I guess the free market sucks after all and we need more government to control every aspect of our lives. God forbid people actually embrace freedom and personal responsibility.
How come my student loans are at a set rate of freaking 6.8% ??
in one word...
"middleman"
the govt is making a profit off you! ...and using those profits for war...
..."THE FED" ...loans to govt...who then loans it to students...
Our govt is profiting from young people who want higher education to better themselves...despicable.
...it sure would be nice if "THE FED" would loan to the "average person" at the same rate they loan to "The U.S. treasury" or "Wachovia", or "Bank of America" wouldnt it?
Someone handed me a business card with this website on it when I was protesting the RNC in Minneapolis earlier this year. When you have time and choose to view some of these educational videos, you will be arming yourself with knowledge to better predict what the robber barons are doing on Wall Street and in Washington.
http://www.trueworldhistory.info/
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