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Bernanke Clears Way For Fed Rate Cut

Bernanke Clears Way For Fed Rate Cut

Financial Times
November 30, 2007

Ben Bernanke put the Federal Reserve on a path towards a December rate cut in a speech on Thursday night in which he said the relapse in financial markets had resulted in a “tightening in financial conditions” that had the potential to harm the real economy.

The Fed chairman also said recent data on household spending had been “on the soft side” and warned that the combination of higher petrol prices, the weak housing market, tighter credit conditions and declines in stock prices seem likely to create some headwinds for the consumer in the months ahead.

 

Paulson’s Plan to Punish the Public

The Motley Fool
November 30, 2007

If you don’t learn from the past …
If the mortgage crisis and housing bubble have taught us one thing, it should be to watch out for the unintended consequences of greed. Unfortunately, our nation’s legislators and political appointees haven’t learned that lesson. Recent plans for housing and mortgage bailouts generally run from dumb to dumber. Today, The Wall Street Journal reported on yet another scheme, reportedly being spearheaded by Treasury Secretary Hank Paulson. It’s an idea so naively populist and antimarket that you would think it came from Hugo Chavez, Evo Morales, or Mahmoud Ahmadinejad, if not for its cringe-inducing, Beltway-wonk moniker: the Hope Now Alliance.

In short, bankers and loan-servicing outfits are going to lower interest rates on strapped borrowers so they don’t lose their houses. How much, how long, and who qualifies are all still up in the air. No doubt, this will sound good to those folks who signed on for mortgages they can’t actually afford. It will also look good to politicians angling to score points before the next election, and to bleeding hearts everywhere. It will also look good to select mortgage-industry players — like Countrywide Financial (NYSE: CFC) and Citigroup (NYSE: C), which could really use a government-led bailout.

Unfortunately, this ill-conceived salve will ultimately punish the silent majority of Americans, people who didn’t go out and make boneheaded financial decisions over the past half-decade. Let’s take a look at why.

Read Full Article Here

Related News:

Price tag in mortgage crisis is looking like real money
http://www.latimes.com/bu…la-home-center

Foreclosure fallout: Renters forced out of lost homes
http://www.cnn.com/2007/US/11/30/willis.rentervictims/index.html

Shadow Mortgage Bailout Already in Progress
http://efinancedirectory.com/articles/Sha…_Progress.html

U.S. Government, Banks Near a Plan to Freeze Subprime Rates
http://cryptogon.com/?p=1662

UK: Trouble ahead for the economy
http://www.thebusiness.co.uk/the-m…economy.thtml

IMF Warns Of UK Recession
http://investing.reuters.co.uk/news/articl….NG-OPEN.XML

Video: “Food Banks Nationwide Face Shortages”
http://www.thought-criminal.org/article/node/1021

In the long run, value of paper currencies is zero
http://www.economist.com/finance/displaystory.cfm?story_id=10208445

More bad news for the dollar as the UAE gets ready to dump it
http://www.thaindian.com/newsportal/…p-it_1006967.html

China’s attempt to convert its U.S. Treasury holdings into euros
http://www.m-cam.com/display_news?id=240

Growth in Consumer Spending Slows While Construction Activity Drops Sharply
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Goldman Sachs Says To Short Gold In 08
http://www.reportonbusiness.c…wgoldman1129

Treasury Close to Subprime Aid Plan
http://www.cnbc.com/id/22039476

Morgan Stanley may face $5.7 billion Q4 writeoff
http://www.reuters.com/article/bankin….EN275220071130

New Home Prices: Worst Drop In 37 Years
http://money.cnn.com/2007/1…./?postversion=2007112912

More than 50,000 Lost Their Homes in October
http://money.cnn.com/2007/….rsion=2007112905

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