Get ready for the final rate cut – will it matter?

How about a negative Fed Funds Rate????

At least prime rate would go lower so my equity line that the bank has frozen will still go down…

Printing money and giving it to banks is foolish.
It needs to get to those that need it – without the greedy banks taking a cut out of it.

I have used the analogy of burning your house down to keep your hands warm for now, the mindset of the United Sates has not yet changed.

The rate cuts are not helping. Since 9 previous cuts have not fixed anything we have no reason to believe a tenth cut will do the trick. The government needs to step in and offer fixed 30 or 40 year mortgage loans to all the people that are in foreclosure or about to be to stop the further decline of the housing market. They should be nontransferable to encourage people to keep what they have and be at a rate of 3 to 5 percent depending on income. I know that would make it harder for people to sell their homes but it may also help stabilize our country. Another thing that will help stimulate the economy is to offer a decent rate of return on savings in the form of certificates of deposit of say 5 percent for a 5 year CD and 7 percent for a 10 year CD. That would serve two purposes one to boost savings retirement accounts and if the person is already retired they could use the extra income monthly to put money back into the economy. Keep the FDIC insurance set at $250,000.00 per account. I think most people would not mind having their money tied up as long as they are receiving a decent rate of return. The Auto industry should put their R&D money together and develop one energy efficient engine that could be used in all their cars and let the free market decide what body styles and interiors will sell the best for them as individual companies. If they set a goal of 60 to 80 miles per gallon and use that engine for the next 10 years until they have time to develop one that is even better we may get things back on track. In the meantime continue to develop wind and solar energy. My wife and I live within our means and with the pension I receive every month and the interest my CD’s earn we get by. My dividends have all but dried up because the stock market is doing so poorly. I was lucky in the respect that I sold 90 percent of my stocks and mutual funds when I retired three years ago and put that money to work in CD’s.

Well this fed rate cut to.5% or to.25%well only drop CD rates and mm rates somemore, mm accounts at banks are only paying 1% now if it going any longer why risk moneys in any type of bank accounts ? credit card rates auto loan rates mortages have not dropped at all over all these prime rate drops. The federal government bailed out many banks with loans bailouts but the banks are not not given many loans loan rates have not fallin at all ,runs on u.s banks will be next due to these u.s government policys .Who will deposit any moneys in banks if they only get less then 1% interest no one will .

It absolutley does not matter at all. The real market rates are already trading below the fed rate. The fed is giving money away at no cost already. The treasury is letting you invest in t bills for a negative rate of return. It is purely symbolic at best. Japan had rates at zero for many years and it did nothing.

Basically every bank in America is bankrupt. Madoff was not the only broker who paid people 10 percent interest to people from their principle they all do it. It’s legal to do it so everyone has been doing it. Why do you think every five years there is a crash now?

When Greenspan lowered the rate to 1 percent everyone was saying he was running out of math. This time I think they will lower it to zero and it still will have no affect. Capitalism is dead and buried by the brokers who promised us at least 10 percent return on investment when the GDP grew at 2 percent a year and inflation was 4 percent having a net gain of minus 2 for the past 15 years.

Let’s hear it for all the Wall Street bankers who lost half our pension funds by paying themselves all the money as fees and the so called interest we would earn on the 401k plans.

I might suggest to some of the financial “experts” the following reading material: “The Shepherd Boy & The Wolf”. This country’s economic administration is a joke. A bigger joke are the “experts” who state on a regular basis “the bottom is in”. Of course the rate cuts will NOT HELP unless you want to continue to loan money to people who won’t pay it back! What kind of insanity is this? As shown in a 60-minutes segment about Barney Frank last night, our government is an embarrassment.

I will Echo the Following Post by Zeus Smith because I agree Fully.

Quote “NO. It will not matter at all anymore. The ones who badly need credit cant afford any credit anymore, even at the lowest possible rate, and wont even be approved anyway. The ones who are holding up good, those ones who were neither greedy nor ignorant during the boom, will remain fine even without the rate cut.”

Low Fed interest rates will encourage people to start to take risks again. There are a lot of good companies out there that can’t get any money.

The key item for the Fed is to make sure they start raise rates just as quickly as soon as some health starts to reappear.

We do have to change our fiscal policy. Keynes is truly the big winner from this whole debacle. The wealthy have accululated so much wealth that there’s just no money around for average people to buy the products that a wealthy person’s capital produces. I hate to sound like a socialist, but there has to be some limits on the upper end of the income spectrum for the overall health of the eocnomy. I think that the nation’s wealthy, especially CEOs, are going to have to get used to the idea of more traditional compensation packages with more realistic taxing structures. The wealthy should consider it an investment in continued income.

I think personal income tax level have to go up drastically at the high end. This should coincide with a drastic reduction in business taxes to make us more competitive internationally.

If you want to take $100,000 out of your business and buy a Porsche, then you should be taxed 3 ways to Sunday. If you want to take $100,000 and buy trucks for your business, you shouldn’t have to pay any taxes.

Henry Ford paid his workers high wages so they could buy a Model T. He considered it an investment in making the car a common product. His strategy worked.

Sure it will matter. It all depends on how many wheelbarrows full of money you eventually want to buy your bread with.

NO. It will not matter at all anymore. The ones who badly need credit cant afford any credit anymore, even at the lowest possible rate, and wont even be approved anyway. The ones who are holding up good, those ones who were neither greedy nor ignorant during the boom, will remain fine even without the rate cut.

The Federal Reserve is falling all over itself to keep money (freshly printed) flowing to the financial firms. They have lowered rates ten times since September 2007. I would like someone to tell me exactly what it has accomplished other than to reduce the retirement incomes of seniors who depend on their CD’s for income. The printing presses have been running around the clock now for nearly three months without any visible signs of improvement to the economy. A tsunami of inflation will soon begin to engulf the economy from this three trillion dollars of freshly printed money that has been dumped on Wall Street. I think Uncle Ben has forgotten what his predecessor Paul Volker went through in the 1980’s. Why is it we have to create future problem to solve to solve a current problem? Where is the logic?

Sure, cut rates. If a weaker middle class is needed. Probably sets us up for a “global” solution; Right, lots of heads are better none.

Must be tough reporting on this Gordian Knot. Hmm, tow the line or not.

No, it will not matter. US is bankrupt anyway.

It is true that deficit spending is sometimes neccessary during recessionary times but I don’t think deficit spending to the sum of 25% of our total GDP is what economists had in mind. Another words it is good to run a deficit but horrible to run a tsunami of debt. Inflation is not a good thing. Hyperinflation is devastating. There is nothing more dreadful than the invisible beast eating away at your wealth and prosperity. It is a stealth tax that erodes everyones purchasing power and contrary to some peoples belief, does not promote savings.
Anyone old enough here remember the late 70’s? It was not a fun time when we had 12% national unemployment (was 18% in Michigan) and bank CD’s were paying 16%. Sounds great hugh? Not when everything you buy is going up 21%. Want to buy a house, how about a 16% mortgage. So visualize high employment, stagnent economic growth, and high inflation all at once. We thought it wasn’t possible then, but we had it all at the same time. I am afraid that is where we are headed again. The government cannot spend us into prosperity any more than we can as individuals. This has unfortunately become obvious with the housing bust.

What a joke! The Fed has been cutting rates for months with no visible impact on interest available to the consumer. Banks are choosing to fund only the safest of loans and absorbing the spread while watching the auto industry and real estate markets flame out. Until the government elected to buy up billions of dollars in virtually worthless mortgages, rates for buying homes were, in fact, increasing. Meanwhile, we keep adding to the national debt while planning the next new adventure in stimulous packages. Lord Keynes and his interventionist theories are in the spotlight like never before and, so far, the reviews are dismal!

Keep cutting and keep pumping money into the system. First step will be asset price recovery, then spending recovery then production finally employment. Then we will do it all over again.

If the problem with out economy is that people can’t afford to buy things, then I can’t see how they can afford to borrow money to buy those same things.

The American Consumer ran out of money. No so-called solution is going to actually work that does not take this fact into account.

If people can not afford to buy things, whether they purchase them out right or borrow money to buy them, if they **really** can’t afford them, they can’t buy them. Making money cheaper to borrow wont change that.

The effective rate is already 0%. If there is a cut, it will only show that the Fed has run out of options.

The rate cut will simply be symbolic at best and not have an effect on the economic prospects. Just take a look as the author mentioned at Japan who held rates at 0% for years to no avail in thier deflationary spiral of the 90’s.
Unfortunately we have come to a massive economic stimulus which will address the employment situation with a bandaid since the jobs will not be permanent. In the meantime we will try and inflate ourselves to prosperity which will eventually leave us with high interest rates, stagflation and a worthless currency.
Why do you think Paul Voker is heading Obama’s economic team? He knows that the end result will have to be the Fed raising interest rates to kill the inflation beast eventually. This is something that Vocker has had experience with in the past under Reagan. When this happens it will make the current recession look like a hiccup.
The only place to make money in the next year or two will be in gold. It can go past $2000 an ounce and only be where is was inflaiton adjusted at $800 an ounce in the early 80’s. The government is currently out of control and the only way to continue the spending spree will be to print money. The more money available the less it will be worth. Simple supply and demand economics.

i remember some guy named paul writing
an article last summer titled rate cuts
are done get over it

he also said the fed should not cut in
september and boom the world blew up

he is in the running for my cheerleader of the year award with
larry kudlow and gene epstein of barrons

Lowering the rate will not matter.

If you are in a situation where you can borrow money it is because you didn’t buy in to the “keeping up the Jones’” mentality. Do you think that this group of people will now take leave of their senses to end up blogging about how the government should now send us a check for $100,000 or whatever amount so that we can continue to spend, spend, spend?

If you are facing forclosure because you have lost your job then you have my sympathy. If you bought a house you couldn’t afford, hit it like an ATM to do a custom remodel, buy new cars or whatever else your little heart desired, the rainy day that your mother warned you about has arrived. The government doesn’t have any money either – they have been spending, spending, spending too.

If the government has to borrow money it needs to be for meaningful things. Invest in jobs – real productive jobs that pay a decent wage (address infrastructure and new energy efficient technology). Stop rewarding companies that outsource jobs. Reign in the money spent on elections – give them each X number of dollars and don’t allow anymore to be contributed from anyone. Outlaw lobbyists. Investigate the Financial Industry (freeze their assets and seize those of the guilty) and put the crooks in jail (more prison guards will be needed). Implement rules and regulations for the Credit Card Companies that many have sold their souls too. Fund education for money management classes and make it mandatory that all high school students complete and pass this course. Cut out all pork and apply any savings toward paying down the deficit.

America needs to pull itself up by the boot straps. Instant gratification is over. Instead of blogging about a handout – Take a long hard look at where you are, figure out how you got there, research making a budget and paying down debt and then follow through, and learn whatever lessons to ensure that you won’t be here again.

God Bless you all!

Rate cuts at this point are completely irrelevant. There is little incentive to borrow at any price for money. You could make money “free”, by making the interest rate zero. It still would not change anything. There is no opportunity to make any return, neither in any investment, nor in any debt-based consumption, with the borrowed “free” money. This will just lead to more pain, very severe pain.

The FED can, on its own, just print more money and buy ALL the bonds that the Treasury issues. That will keep interest rates very low, even for the long term rates.

But it won’t stop the currency from eventually depreciating to worthlessness. That’s why we have sanctions against counterfeiting money.

It also won’t bring the economy back to life. It will just kill the savers. Retired folks are not going to buy much more than bread and water if they get no return on their savings. This will also stymie the path our society wants and needs to take. That is the path to saving. We cannot, I repeat, WE CANNOT, continue on the path of debt-based consumption. That story is OVER. Please, BIG BEN, take note of this!

But the FED, misguidedly, seems to believe it has to jolt the economy until the economy is shocked to death. Where it got this idea was from the study of the Great Depression. During that time, it is true, the FED allowed banks to fail and the money supply to collapse.

But the exact opposite policy is no good either. There is a big difference between not letting the money supply collapse and making it grow like a cancer. You don’t need to multiply the money supply by a factor of 10 in order to avoid its collapse. Because by doing so you will now be courting other big problems.

This morning (Friday, Dec. 12, 2008) I saw on the Bloomberg TV news-bar that the Bloomberg organization had requested that the FED provide a list of recipient names for the 2 trillion dollars distributed so far by the FED.

The FED has refused.

Is it true that the FED basically just printed this money?
Doesn’t this constitute the crime of counterfeiting?
Shouldn’t this activity be illegal?
Cannot the courts stop it?

Shouldn’t we know what “assets” the FED has received in return for the 2,000 billion dollars it has disbursed?
Won’t increasing the money supply by such horrendous percentages cause hyperinflation?

Who authorized this? Or was it done with absolutely no authority, by a single unelected official, who says he does not want to make the “mistakes of others” but is seemingly willing to make the mistakes of his own little self? To the tune of 2 TRILLION freakin’ dollars?
Will this not destroy the middle class?

The FED turns to the prevailing price-inflation rate (CPI) and says LOOK — it is “under control”. But, my friends, that is the SAME argument our dear Alan Greenspan used to justify for allowing the damaging auto- and housing-boom. The FED does not worry about “asset price inflation”. Maybe it should.

How can Dr. Ben Bernanke operate the FED like a badly-run pawnshop? A normal pawnshop is very careful with the assets it accepts as collateral for the loans it makes. It seems that the FED never took lessons in how to run a proper pawnshop OR a good central bank.

I naïvely used to think that Alan Greenspan was the worst central banker of all time. Now I know that Ben Bernanke has assumed that crown. Bernanke must have attended the John Law School of Central Banking.

The Senate turned down a request (for the time being) of about 20 billions of American money. Big Ben Bernanke has issued 100 times that amount of cash with no oversight whatsoever. What gives here?

Once the Chinese, and others, figure out that Ben is going to destroy the currency, they will “cash in” their U.S. Treasury bonds, and put the cash “to work”. Maybe they will come over here and buy up GM and Chrysler?

This is money-madness. The people in charge of the most critical institutions in our Western world are out-of-control. They are running a huge experiment based on their own ideology. We will pay, and pay big-time.

STOP THE MADNESS!!! We cannot piss away 2 TRILLION and even more, and not expect seriously evil consequences. Sorry, but “piss” is the politest term I could come up with.

In 2005 I wrote about bad Central Banks. But I was modest in my criticism. I will let you decide for yourselves.

Good luck — we will all need it.

http://www.businessweek.com/the_thread/hotproperty/archives/2005/07/past_housing_bu.html

From September 28, 2005 12:38 PM

I agree with those that see the bubble and not with those who cannot.
Time will tell who has the clearer vision.

However, the ultimate causes of this housing bubble are not clear.
While human psychology is clearly a main player, it is a player that acts to facilitate the bubble and not to directly create it.

The ultimate cause is the FED and, as quaint as it might sound, the lack of any foundation for our money system.

Of course, we all swim in the same pool, and there are other derivative players as well (pun intended). The whole world is now playing in a Ponzi sandbox of unknown size. We are so far out of the envelope that we have gone nutty.

We have a money system that is no longer self-limiting and self-governing.

The FED (and other Central Banks around the world) have no restraints, nor does the rest of the financial community, when it comes to their behavior in the creation and use of money, nor do they, nor any of us, have any useful, timely feedback to indicate when we are in harm’s way. There is a hurricane bearing down on us, but all of our eyes in the sky are blind.

We used to have limits, before we decided to trust in paper money, which is backed by nothing, except the printing press. We are so used to this approach in our daily lives, that we take it for granted, as if nothing could ever go wrong with this system. It has gone wrong, terribly wrong. But we are not yet aware of how wrong. The storm is still off shore.

There may never be a perfect system for money, but the one we have today is most likely the riskiest and the most open to abuse and mismanagement of any we could possibly have invented (other than possibly having counterfeiters and loan sharks running the show).

Isn’t it time to consider abolishing Central Banks, or at least changing the directives that they operate under? Can a Command Economy approach ever work? It hasn’t yet (and the Communists gave us a pretty good history lesson on that topic). How can it be expected to work from a Central Bank perspective?

The FED’s bad judgment has manifested in terrible decisions that have destroyed countless people’s lives since 1913. If it wasn’t for bad judgment, the FED seemingly wouldn’t have any at all. Perhaps it is just a function of the mandate they are asked to fulfill? Central Planning… need I say more?

Sadly, the FED (and other central banks around the world) will not soon leave the stage, nor will the extreme damage they cause soon be alleviated. Their raison d’être is supposedly to “smooth” the business cycle and diminish the pain. Ha! There is no greater instigator of instability in the business cycle, than is the proverbial Central Bank. It creates the pain and keeps itself in business by promising to mitigate that pain. What a fraud! What extortion!

The FED created (or, if you are generous, it exacerbated) the boom of the 1920’s, which led inescapably to a depression, which the FED then managed to aggravate into the GREAT Depression. Most recently, the boom of the 1990’s and then bust of the 2000’s. And now the latest act of infamy: the housing boom. It would be funny if it did not kill.

‘NUF said.

LIQUIDITY TRAP!!!! This term was invented by John Maynard Keynes in the 1930s to describe what happens when rates go too low (it HARMS the economy). If rates go too low, why keep your money in a bank?? If the bank pays virtually no interest, there is no point in having cash in a bank….especially a bank that might fail. This causes withdrawals, and further weakens the banking system as banks lose deposits.

The way OUT of a LIQUIDITY TRAP is for the Treasury to do MASSIVE deficit spending. Such spending threatens a rise in inflation. As inflation picks up, interest rates rise. As rates rise, it attracts deposits to banks. Also as rates rise, it prompts bond investors to invest in bonds….that actually pay something now.

Voila! Credit Crisis resolved (except for the idiots in too much debt, and they should lose anyway).

The problem with this approach is that deficit spending is looked as as something that should be avoided at all costs. But congressmen are not trained economists, and they don’t understand that what seems logical (balanced budget), isn’t. It’s also important to have the deficit spending spent on the right thing (investment into the country or science). Apollo was one such investment (integrated circuits came from that program). WWII caused advances in nuclear tech, aircraft technology, radar, etc.

I’m surprised nobody has seen the obvious angle in all this: lowering the interest rate to spur borrowing only works if people are willing to lend money! If the banks are unwilling to lend then how will making lending less profitable for them entice them at all?At best this (lower rates not this particular event) will reduce the strain on homeowners with ARMs which in turn will make the banks’ positions less volatile.So the answer isn’t to keep lowering rates. The answer is to wait and let the current low rates take effect.

how many cuts does it take to get to the center of an economic crisis? the world may never know.

unfortunately the Fed and government have been more of a turtle than an owl.

the reality is they are all donkeys.

If it is not already painfully clear, lowering the Fed Funds rates has done ABSOLUTELY NOTHING to help the economy, or to spur lending because there are no borrowers. How freaking hard is it to understand that borrowing is what got us to this point, and MORE borrowing is NOT going to get us out of it. YOU CANNOT BORROW YOUR WAY TO WEALTH. It has been openly proven to be a pipe dream.

The definition of insanity is to do the same thing over and over again and continue to expect a different result. Is Ben Bernanke insane? His actions certainly would seem to point in that direction.

I propose that instead of cutting interest rates, the Fed should be raising the rates in 2% increments, every 2 months over the next year. This would stimulate all the money currently being taken out of the system to start filtering back in (as now it would start to be worthwhile to actually save money).

The only real solution to our financial problems is to lay them all out bare in the open and let them be destroyed. It will be painful and ugly, but as always –> no pain, no gain. There is no such thing as a free lunch. Somebody ALWAYS has to ultimately PAY for the goodies.

The system MUST crash and burn, BEFORE any real, meaningful changes can be implemented towards REAL recovery.

I would not want Obama’s, or Geithner’s job for any amount of money. They are net lose lose positions, inherited or not. In a couple years, everybody will forget about Bush, Bernanke & Paulson and start blaming Obama, Geithner, whoever for not saving the world.

“I think the Fed is going to cut rates and it’s going to be intended as a signal that the Fed will do whatever is necessary to keep the economy from sliding too deeply in this recession,” said David Resler, chief economist with Nomura Securities International Inc.

wow! give this man a medal…wow, so original, so insightful. give him the keys to a new mercedes.

!!broken record! in fact paul, this entire article is a broken record— redundancy—-seems to be a result of a lack of insightful things to say.

no offense to you if that sounded malicious, but jeeze man. the Fed and wall street madmen must love to listen to themselves talk…they say the same thing day in and day out.

another rate cut shouldn;t be in the cards. like others have already said, it shouldn;t have gone below 2. we haven;t felt the benefits of the cuts from 6 months ago…is 0 or .5% really going to do anything for us in a half year. oh wait, i’m not in banking, how would i see those benefits. my credit cards?? get real
paulson and his bank buddies seem to have a nice bond together. that’s sweet. they can go kiss. when it comes down to struggle, what do any of those men in suits know about that…the warren buffetts are few and far between.

Cutting the rates even further will have absolutley no impact on the economy. How many cuts does it take to see that?
One thing rate cuts ARE doing, is hurting terribly the elderly with their only savings in banks to lose more an more interest they need to survive on.
While trying to help the wealthy on wall street, Bernanke is killing the elderly on very fixed incomes. They can;t afford any risk in stocks, especially now, so being in regular savings/CD’s is all they have. Every time Bernanke cuts rates, their savings rates get cut.
Since further rate cuts, as commented on by economic experts, will do no good. Why doen’t the Fed think of others for a change. Instead of the welathy wall street selfish crowd?

cutting the rates to zero will have no positive effect, more likely it will only be negative and create more problems. The Fed should be abloished immeadiately, they are a big part of the problem we now find ourselves in.

Agree with David. Bernanke has given his friends all the help he can. However, he has shown that he is creative in finding new ways to give away money that belongs to others so that he can help his friends some more, so maybe he will come through for Pirate Paulson and co thieves again.

We should all be concerned with future rate cuts. Check out the report from Bloomberg News (sorry CNN) with commentary from Peter Crane, president of Crane Data LLC, a money-fund research firm in Westborough, Massachusetts.

Per the report, investors in money-market mutual funds that focus on U.S. Treasuries may lose money for the first time if the Federal Reserve cuts interest rates next week and yields become too small to cover expenses. In addition, there are going to be gigantic amounts of bonds coming to the market, and inflation will be coming back.

We are staring at a once super power economy that could become a third world economy.

How do we like the greed, lack of accountability and corruption now?

“Gimme and do it FAST!”

Ak ptooy!

We don’t need cheap money. We don’t need cheap consumer stuff. We don’t need money from the “government” (i.e. from the working class). We don’t need people to borrow more money to buy more stuff they don’t need. For crassake get a grip!

We have been doing a pile of stuff that doesn’t make any sense for a long time and we are now paying the price. Lets stop with the stuff that doesn’t really make sense because we all want something for nothing.

Our government lending out money at less then the rate of inflation is stupid. Quit your whining for a 3% loan subsidized by, oh yeah – ME. If you can’t afford a house, don’t buy one. That’s what I didn’t. If you can’t afford 20% on a credit card, don’t use one. That’s what I don’t.

Here is the solution to your problem. Lower your lifestyle to what you can afford. Work more, help your neighbor, waste less, consume less, pay your debts.

What a F’n concept.

I agree with Mike that interest rates should never be brought below the rate of inflation.

Is anyone else bothered by the Fed. and the government undertaking a massive redistribution of wealth from creditors to debtors as well as to Paulson/Bernanke’s friends on Wall Street? Things are rotten in this country.

Drop the rate to 0% and DROP THE MORTGAGE RATES TO 3%. The economy would turn around in less than six months. People need to refinance or reset their mortgage rates NOW. The people support the institutions. Institutions due not support the people, Paulson and Bernanke need to get a clue….AND FAST!

What does the interest rate matter when no one is loaning money. And reduced home values mean HELOCs are being trimmed and mortgages can’t be refinanced because the guy next door had no income and bought a house worth a million???

I think the Fed should cut aggressively. I think a .25% Fed Funds rate is necessary given the deflationary pressures. Risking inflation is always preferable to deflation.

There are plenty of other tools left for the Fed to use should the situation get worse, as we’ve seen in the past few months. I think lowering the rates will give them access to more tools. Nobody can accuse them of looking for more power if they have already used up their conventional tools.

The interest rate can go to zero but the credit card rates are all going to +20% or more to make up for all the loses the banks have had. Zero will do nothing for the consumer or the economy. And who thinks anyone but the banks will get money from the fed at zero percent. Business and consumer loans will be going up so the banks can make back their profits.

The Fed is completely out of gas… everything that theyhave tried is not working like it has in the past. The Fed will have to start to monetize the debt of banks, homes and consumers soon to rally have any effect. That means the printing presses will be fired up. It also means that we will start to see the inflationary results of everything that the Fed has donw to get us out of this “crisis”.

A 1/2 point cut doesn’t mean anything on a credit card when the banks are now raising interest rates 300 to 400% due to “more expensive business conditions”, meaning we lost a ton of money on bad investments so first we’re going to take $45 billion from the government (taxpayer) and then some more from our customers (Thanks Citibank). In the end their not going to have any customers if they continue to treat them this way and they’ll go out of business anyway. Just look at the US automakers.

What good is a rate cut when no one is working. People don’t have equity in there homes to refinance. The homes are not worth what they owe on them. All these rate cuts does nothing but take money away from seniors as the interest rates on cd keep falling and falling. Do something to get people back to work. What have the last 9 cuts done to help the people. Wake up cutting interest rates is not working.

The FED should hold the line where it is. If all the capital that has been infused and prior rate cuts have not gotten credit flowing another 1/2 point will not make a difference. In the current climate even if the FED gave it away we’ld be stuck. Banks are holding their cash and don’t want to make any loans. We have seen it go to the other extreme from free wheeling to locked up. We lost the ability to do things in moderation in this country we move from extreme to extreme in all aspects (politics, economics, etc). We need to learn how to balance a live within our needs.

Depends on who you are, for banks yes they come out great, consumer doesnt matter. Mortgage rates are ok but the fee’s that banks are charging are a joke! They should have let them all go under. They will return to their old ways of pleasing wall st and nothing else matters.

The Fed should hold at 1%. Actually, they should have held at 2%, which is the core rate of inflation. Lending money to big banks (with all of their problems) at below the rate of inflation is sure to cause bubbles somewhere. Last year, it was housing; this year, it was oil. Next year, who knows ?

People don’t need more debt and borrowing; they need jobs.

Hold at 1% and wait for the 2009 Congress/Obama stimulus plan.