Monday’s Money Update in Jackson Hole
Redwood City, CA 94062. Monday’s Money Update
Last week The Federal Reserve Bank of Kansas City Economic Symposium at Jackson Hole, WY had a featured speaker in the Federal Reserve Chairman, Ben Bernanke. Chairman Bernanke said the biggest problem facing the United States is “tight credit”. He went on to say that in the past our economy recessions ended with the increase of housing sales. The housing market will bring the United State out of a recession and jump-start our economy, which will in turn help other sectors of our economy to grow. And this is why Monday’s Money Update in Jackson Hole was important to you today.
We all understood that say, 2 years ago. So what’s the big deal Ben? Can’t you solve the problem? Seems not. Ben says he fears all the foreclosures that are in the pipeline and is fearful housing prices are going to drop even more and then there will be more foreclosures to worry about and play havoc on our economy.
So this Kansas City Economic Symposium, which had to go to Wyoming for whatever reason, feels tight credit is the major problem of the economy. Housing can fix the problem provided credit is available, which will help the economic recovery, Yet by fixing the problem we will see more foreclosures, and the Feds think housing prices will go down further and this will cause our economic problems to get worse. Oh my oh my what should we do?
Ben Bernanke and his boys over at the Federal Reserve have no idea! Their recommendation from their Symposium was one of nothingness. They have NO IDEA what to do, recommended NO CHANGES, and took NO ACTION. Think that may fix the problem? Me either.
IMHO the credit in this country needs to be loosened up some. Not to the point as in years pass but enough to get builders building, home buyers buying home, homeowners selling their home so they can either buy a move up home or retire. It’s real simple, get in the middle with this credit issue so the most amount of Americans can survive this recession and start conducting business in a way that will jump-start our economy and lead us towards a full recovery.
Mortgage Rates (subject to change without notice)
30 YEARS CONFORMING JUMBO ($417,001-$729,750)
5/1 ARM 2.750% 3.250%
15 YEAR FIXED 3.250% 4.250%
30 YEAR FIXED 4.000% 5.000%
Rates are subject to change due to market fluctuations and borrower’s eligibility. Payment amounts do not include amounts for taxes, HOA fees, and insurance. APR are not given and real payments will be higher. Monday’s Money Update in Jackson Hole
Well, it seems to me that Mr. Bernanke pretty much telegraphed that things are not going to change on his end. And like you I don’t think that will fix the economy either. But I have trouble with the notion of loosening credit up so that debt can be entered into more easily. I just find that to be part of the problem that got us here.
Hal, You are so right. But loosening of credit was meant as a means to an end not to open the flood gates as in the past. Make it so builders, consumers, and home buyers can obtain a loan based on their creditworthy financial picture not some abstract, arbitrary guideline some underwriter wants to enforce because of fear of losing their job, or heaven forbid, an audit by regulators. There is a middle ground here where the pendulum needs to swing back to in order for the economy to recover. The craziness of lenders at the turn of the century is not the answer by any means. Thank you for your astute comments. I appreciate your position.
Thanks for the response, Cliff. I agree with you about the need for middle ground and totally agree with you on the need for loans being given on the bases of creditworthiness. That’s really where the whole thing went south, when loans were being handed out like free candy.