US Fed and Major World Central Banks Coordinate Rate Cut
- By:
- Bill Rice | October 08, 2008
Major world central banks react to a broadening global economic crisis by taking extraordinary measures to coordinate monetary policy. In a move to reduce growing stress in the world credit markets central banks cut interest rates by a 0.5 percent.
This coordinated effort by the US Federal Reserve, Bank of England, European Central Bank, Canada, Switzerland, Sweden, and even the People's Bank of China reflects the growing realization that globalization has deeply linked our independent economies.
Actions and reactions are increasingly directly and immediately impacting our respective markets. This realization has been no clearer than watching the market trading patterns following the clock from Asia, European, and into North America over the last few weeks. Watching these international trading exchanges, the closing marks are an eerie forecast of the impending fate of each new market opening.
The Federal Reserve, in a unanimous decision, lowered the Fed funds rate from 2.0 percent to 1.5 percent. Likewise, a similar reduction was made in the discount rate.
In a statement released with the rate decision the Fed said they reacted to increasingly weakening economic condition and were no longer immediately concerned with inflationary pressure. The weight of this decision was reflected in statements earlier in the week where Dallas Fed President Richard Fisher, a notorious inflationary hawk, said "market dysfunction trumps inflation." Dallas Fed President Fisher has been a frequent dissenter in past Fed decisions to leave rates at current levels, advocating Fed rate increases.
In this same Federal Reserve statement, the Fed stated that it has been and will continue to be in close consultation with major world central banks to monitor ongoing economic conditions.
Early indications are that the markets are reacting positively and with increased confidence over the move as broad European market indexes bounced up at the news.
Bankruptcy Reform Back on the Table
- By:
- Bill Rice - MortgageLoan.com | November 21, 2008
One of the earliest ideas for helping homeowners facing mounting mortgage debt and potential foreclosure on their home was to reform bankruptcy laws. The concept is now officially back on the table, introduced into the Congressional lame-duck session by Senator Richard Durbin (D-IL).
TARP is Closed for Relief Until Further Notice
- By:
- Bill Rice - MortgageLoan.com | November 20, 2008
Remember what a crisis the $700 billion mortgage market bailout was--the very existence of the American financial order hung in the balance.
Fixing the Housing Market, Lots of Ideas...Any Answers?
- By:
- Bill Rice - MortgageLoan.com | November 19, 2008
Almost a year into the dawning of the housing crisis (many chronologist are setting that around the January 2008 crumbling of Countrywide) ideas continue to flow, but few seem to be the answer. In fact, this seems to be the growing consensus--there is no silver bullet.
G-20 Lots of Motion, Will There Be Action?
- By:
- Bill Rice - MortgageLoan.com | November 18, 2008
The 20 most powerful industrial nations, and now the caretakers of an unprecedented global financial crisis, assembled in Washington DC over the weekend. Their mandate was broad and daunting--stabilize world markets.
FDIC Challenges Treasury with New Loan Modification Proposal
- By:
- Bill Rice - MortgageLoan.com | November 17, 2008
On the heels of the Treasury and Federal Housing Finance Agency's (FHFA) loan modification plan for Fannie Mae and Freddie Mac, the FDIC releases their own proposal. In this unprecedented, unilateral, and aggressive move by a Federal agency the FDIC is essential fighting a very public political battle directly with the Treasury and the current Administration.
Mortgage Rates Drop for Second Straight Week
- By:
- Bill Rice - MortgageLoan.com | November 14, 2008
Another week of dismal economic data have again pushed down mortgage rates. Freddie Mac reported Thursday that 30-year fixed-rate mortgages averaged 6.14 percent, down from 6.20 percent last week. This demonstrates a steep decline from 6.46 percent two weeks prior.
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