The markets still would have crashed.  The banks still would have failed.  The only difference is that the few dollars still floating around would have been worthless.  How would that have turned out?  We'd probably have a hammer and sickle on the flag where the stars are, that's how!

It's interesting that overseas markets rallied even though their central banks left interest rates untouched.  We're down 192 points in the first half hour of trading today, even with the biggest rate cut in 23 years.  

Hmmm, ya think maybe low interest rates aren't a magic bullet?

Do you suspect that he may soon discover an irresistible urge to spend more time with them?

and Congress?  They all know what has to be done, but they don't have the balls to do it.  It's called job preservation at all costs.

The real problem is all the money resides right now with the wealthy, and the rest of us have none to spend. Wait til the next quarters earnings, or rather lack of them, start coming out. Until we fix that, nothing will work, and things will worsen fast. Interest rates could be at zero and it won't help.

maybe long enough to help get them past the election and allow more time for their cronies to ease out of the market, but the basic problem still exists.

There is no incentive to save with inflation rates rising and very low interest rates. It's almost like they're paying people to borrow and charging them to save. Where is the money going to come from to finance the borrowing? The printing presses? A dollar further devalued and spiraling inflation.

I'd suggest we encourage our children and grandchildren to learn Chinese.

maybe we should throw them?

A friend's uncle was invested in both the stock market and Boston area real estate during the 1980's. When the market dropped and the bottom fell out of the Boston real estate bubble, he lost so much money it sent his blood pressure through the roof, and that was that - he died of a heart attack while on the phone with his broker.

My friend, an immigrant escaping an oppressive government, was in the process of getting her green card. She had been working for her Uncle, and lost her immigration sponsor when he died. She ended up having to take a job as a software engineer - a job with a whole bunch of nasty strings attached in exchange for the company covering the costs of getting her green card. The company went bankrupt before her application finished the process. I have no idea what happened to her afterwards.

People we know as "speculators" in hind-sight are often considered "savvy investors" when times are good. And those "savvy investors" can still lose their shirts and suffer for it, and their families are affected, too.

... for some folks who want to stay in their homes. They are real people and I'm glad they'll get a little relief.

However, I remember reading somewhere that mortgage defaults correlate more with housing market declines than with mortgage resets. When the market price of the house falls below the amount of the mortgage, that's when people bail out on their mortgages.

If true, this confirms what intuition would suggest-- that the price of housing has gotten out of line with real incomes. That means that on a cash flow basis, housing payments were too high for many people. They were willing to sustain negative cash flow month after month as long as the market value of their real estate continued to appreciate. As soon as the market turned negative, the monthly cash drain became unsustainable.

Cheaper credit may help slow the decline of housing prices a bit, but I don't see this cut reversing the market psychology any time soon. The basic dynamic of defaults driven by declining home values will continue.

but it won't help much.

If they REALLY want to help things, and force the banks to actually look at what they're doing, they need to put some serious caps on consumer interest rates.

Cap credit card interest rates at 4 times the prime. That would put money in people's pockets TOMORROW. It would also mean that the same payment you've been making might actually put dent in the balance for a change. Cap the fees they can charge as well - those are obscene.

What the Fed did means less than NOTHING to the vast majority of people. It won't change my car payment, or my mortgage payment, or my utility bills, or what I put out for food, gas, insurance. It MIGHT (though the chance is slim to none) change the interest rate on credit cards. I doubt it though - they haven't gone down since the mid-80s, when MORTGAGE rates were 14%. There was some rationale for credit card rates to be at 20%+ then. What's the reason now?

I suspect it's the same reason for most of the bank fees, charges, and rates - because nobody is stopping them.

I say it's time we started stopping the banks from robbing us blind.

How many people who are suddenly taking in 30% of their former income for 12 months - with no guarantee of a new job - are able to pay $800 - $1300/month to continue the likely crappy insurance they had at work?

I always thought that was the stupidest thing I ever heard of.

I thought it even more stupid when we ended up in that very situation....

Hugely.

During almost every other war in American history, taxed were raised to pay for it.  Taxes were never cut before during a war.  

If the WH actually asked Americans to pay for this clusterf**k in Iraq, troops would be leaving the next day.  If Pelosi really wanted to end the war, she'd propose a tax increase to pay for it.