Posted by OR on 3/31/10 2:52pm
Msg #329826
fed-pulls-plug-world-does-not-end
Tomorrow is the big day – the day the Federal Reserve pulls the plug on its purchases of mortgage-backed securities. Since December 2008, the Fed has kept the mortgage-backed securities market going by buying $1.25 trillion in securities issued by Fannie Mae, Freddie Mac and Ginnie Mae that no one else wanted. The massive program has helped keep home loan interest rates low during the financial crisis.
http://www.housingwatch.com/2010/03/31/fed-pulls-plug-world-does-not-end/?icid=main|htmlws-sb-n|dl4|link1|http%3A%2F%2Fwww.housingwatch.com%2F2010%2F03%2F31%2Ffed-pulls-plug-world-does-not-end%2F
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Reply by Susan Fischer on 4/1/10 3:41am
Msg #329896
But still under 5%. Remember conventional home loans
at 13-18% rates back in the olden days a generation ago?
Although Bubbles will undoubetedly arise if regulations get watered down too much, but Congress will only go so far, because the focus in on Consumer Protections vs. Bank Protections.
If the Regulations happen to lower the profits of Big Business? Then they must do what we all have done and pull in their belts, and heal, like the rest of us on MainStreet.
Interest rates and inflation are such a tangled dance. Moving the money back into the People, withdo-able Interest Rates for MainStreet, which creates jobs, innovation, with our Yankee Spirit - and America can grow its Economy. We need to make things. Good things, not useless plastic objects.
Here, on the Central Oregon Coast, NOAA is coming to Newport. The infusion of scientists, jobs, and contributions to the local enonomy will have significanct impact toward a rise in the quality of life to a struggling fishing industry.
So good for our schools, too. Great field trips...housing will certainly benefit, as will all of the ancillary local businesses. Plus we are a Destination area. Tourism is a Mainstay, albeit seasonal influx. Such a great addition to our Marine Science Center, and Aquaria. The fragile tidepools, and essential wild sealife that grace our shores. And kite-flying in the sand, in the sea-winds.
The hard, difficult dance requires balance - the cost of money vs. the value of money; credit vs. inflation.
The is much infrastructure to rebuild and innovate. We are Innovaters.
1/8th of a point? A pittance. Open up credit to MainStreet, Wall Street. Kick-start our Recovery and evening out of the American Dreams. American Prosperity - once again - and beyond - in this 21st Century.
JMHO.
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Reply by Laura_V on 4/1/10 8:12am
Msg #329912
Thanks for another amazing essay!
You and your writing completely blow me away, Susan.
I'm so happy to read your area won the NOAA prize, Susan. "We are Innovaters" says it all.
I used to living in Bellingham, WA, the town that was second choice for the NOAA facility. Outside the medical arenas and colleges, people generally do not work hard there. I work hard so I wasn't comfortable so I moved to a new town with better demographics for my business. My new town is a mix but most of us who are not retired work very hard. The local school district is one of the best nationwide.
I remember those days of 18% - 19% prime rates. Housing was affordable but no one could afford the loans.
I was working in San Francisco running a small firm. When things got really tight, the boss sat us down and said we had to choose: one person leaves or we all take Fridays off. The newest guy had an actress wife (movie level) so we starting taking Fridays off.
I think there are a few helpful things to do for ourselves and our families these days:
*Have more than one stream of income.
*Use credit unions (not banks) for home loans and parking cash.
*Behaving ethically as close to 100% of the time as possible. (I leave room for things like not punching the lights out of a guy who treats nice librarians in my town like dirt. Grrrrrr.)
*Being kind even when we are not in the mood and don't have time. A smile can often suffice.
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