Fed announces new plan to rescue mortgage defaulters!

This is a good move by the feds and may well stop the unemployment rate in its tracks, well; it may not stop it altogether but should at the least lessen it. This is indeed a very good move for many reasons, for one, it should take some of the bite out of the current mortgage crisis that seems to be facing the American markets.

What many people do not seem to have considered is that if all the mortgage defaulters were thrown out of their homes, then the various companies would not be all that eager to hire them. Everyone must have a real address that they can call 'home' so as to get legally employed.

So if a defaulter was to be thrown out of his or her home, then that person, by law cannot be gainfully employed and would probably be begging a living under one of the overpass.

This move by the Fed is one that should have been taken a long time ago, but then again, it is better to be late than never.

With the current mortgage crisis spiraling out of control the next move by the fed should aim at regulating the housing markets and after that, the fed should concentrate on the banks and pressurize them to increase lending so as to prevent any further credit crisis from hitting the consumer on the street. It is a long way to go and the first step, the most important one has finally been taken by the Fed today!

Industry goes flat as the U.S economy tries to ride out the blizzard!

The industrial output for the month of December remained flat in spite of the best efforts of the Fed to cajole the economy to start running again. It seems that people no loner want to purchase with the same fervor as they used to before. And on top of this, we get reports that the inflation is at its highest in the last 17 years. That is not really a surprise, with the energy prices shooting up to the roof, it was only a matter of time before the food and other essential items started soaring up.
One of the things about the energy prices was that every time it went up so did the essential commodities. Anyway, with the economy trying to ride out the blizzard that seems to be blowing, the last thing that they needed was another bit if bad news. It seems that is just about the only thing that we are getting these days!

Stocks head downtown as Housing goes bust!

The housing market seems to be dragging down Wall street into new depths of recession as the home sales fell by as much as 2.6%. The fall in the sale of homes is not something that is totally unexpected but what is worrying many is the exposure of Countrywide financial corp as it seems that the company in question may soon have to face a fresh round of loan defaults.
The smell of recession seems to be blowing high and low in Wall street for the moment and it is going to take some really adept moves by the FED's to counter this.

With the Lehman Brothers seeing a rapid decline in the earnings power of Countrywide, that news saw the stocks decline by as much as 15%. At the rate it is going, pretty soon, Countrywide would have lost all the gains it had made in the last 3 years. And coupled with this , the news of the 'not so great' quarterly results from KB Home, has put all of Wall street on notice!

Wall street in a muddle over the economy!

The Wall street seems to be heading to a muddle over the anticipation of how the U.S economy fares next week. The investor reports as well as the housing data are to be released soon and it could go either way. Goldman sachs had reported profits in the last quarter and they are expected to do the same as their Q4 reports are due soon.

But as far as the markets go, and with all indications that the inflation is due to go up and in only one direction, the mood is all about 'a half glass that is all too empty'. The Fed cannot do much as with any inflation rise, their hands get tied down , so any negative data especially in the Housing data is bound to send the markets into another free fall.

Citigroup chief economist Lewis Alexander said he believes the housing market will remain weak well into 2008, but that it is more likely that the economy will keep growing than head into recession. I have to agree with that outlook but I also have to say that saying that the economy will keep on growing in spite of the housing market seems to be hiding ones head all too deeply in the sand. Maybe it is high time that the price ranges were regulated in the housing market but any such controls will only have negative implications for the U.S economy and the U.S dollar.
There is no easy solution to the current mess and this is one ride that we all will have to ride whether we like it or not!

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