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« Arizona Wants Change Too! | Main | Selling Your House? Don't Take the Curtain Rods When You Move. » Tuesday, January 22, 2008Subprime Mortgage Problem Goes Global: Federal Reserve Makes 'Emergency' Interest Rate CutBen Bernanke and the Federal Reserve made an 'emergency' rate cut to the key interest rate this morning, rather than waiting until their next planned meeting at the end of January. The .75 basis point reduction in interest rates comes amid global economic fears. The Asian markets have been down sharply in recent days, and European markets have followed (although they're not down as much as the Asian markets). The fear is that America's subprime mortgage problem is now damaging the global economy. Fortunately, the US stock markets were not trading yesterday due to the Martin Luther King holiday. But DOW futures were down over 500 points until the announcement of the Fed's rate cut early this morning. The DOW (futures) has since recovered by a couple hundred points, but it still looks like today will be a bad day for the stock market (which is already down for the year). I guess we'll see when the markets open in a few minutes. Just remember, it's only a paper loss until you cash out!
Posted by Shannon Hubbard, Arizona Real Estate Agent on January 22, 2008 | Permalink CommentsWell this has decreased mortgage rates which could help the struggling real estate market... Posted by: AZ | Jan 25, 2008 4:21:16 PM yes its affecting everyone not just in US RK Posted by: RK | Jan 30, 2008 6:56:19 AM Hey, as an agent in the Palmdale, Lancaster area of the Antelope Valley here in California, I have reviewed this post and have think that todays (1/30) drop in interest will shurly help those with adjustable loans. I think we are going to see the U.S. stock market jump tomorrow AM due to this decrease. To see more infomation about the Palmdale, Lancaster area of the Antelope Valley visit my statistics page at wwww.gockelgroup.com/charts.htm Posted by: Don | Jan 30, 2008 9:34:42 PM The Federal reserve bank needs to drop the interest rates, maybe back to 1%. Once the economy stabilized, the federal reserve bank need to increase the rates gradually (not like they did before, a quarter point every time they meet). Posted by: Jay | Feb 1, 2008 6:21:36 AM What a difference a week makes. Not much to the positive. I was listening to the CEO of one of the lenders of jumbo loans speak this AM after they had a good last quarter. He was saying the interest rate reductions have not caused the financial institutions to ease up on their lending. Until they loosen up, the lowering of rates will have no effect on loans and therefore real estate. I believe I also heard that another of the European financial institutions was in trouble. It is my opinion that until the institutions get there books right and be open about their situations, thing are going to remain very tight Posted by: Nightwatch | Feb 5, 2008 8:41:43 AM This is only the tip of the iceberg, banks even in China are feeling the effects of this Posted by: Chris Heath | Feb 9, 2008 3:17:46 AM
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