"Americans are taking advantage of interest rates near record lows to trim monthly mortgage payments as mounting job losses and plunging wealth pinch household budgets. Policy steps to cut foreclosures and unclog credit markets may ease the housing slump and help revive economic growth later this year."Shobhana Chandra,April 22 (Bloomberg).
Two other Bloomberg writers, Brian Louis and Kathleen M. Howley in their piece published two days ago, quoted Robert Edelstein, a professor at the Haas School of Business at the University of California, Berkeley as saying "Home loans may go as low as 4 percent if the economy worsens." "Record foreclosures,falling home prices and an economy that has lost 5.1 million jobs since December 2007 will pressure Bernanke to further reduce borrowing costs."
The two writers noted that "Bernanke, a Harvard-educated student of the Great Depression who spent his 20-year academic career writing and teaching about the
1930s,is using his knowledge of that era to avoid the missteps policy makers made then. He's bringing down mortgage rates,supporting the banking system, and buying back government debt and mortgage-backed securities to relieve the scarcity of credit."
The incredulity of these two - how easily do we forget! One of the first things Bernanke did following his appointment as Fed Chairman was to initiate a series of rate hikes (duh!). What was he thinking about when he was doing that? Where and how did the nation benefit from his "20-year academic career of writing and teaching about the 1930s? How will lower rates - as good as that may be, help the hundreds of thousands of homeowners who are now homeless,indigent,completely ruined. When others were talking about recession all the way back in 2007 where was the professor? who was Chairman of the Board?
The economy is a wreck and those who are charged to ensure good health and well-being failed, and failed miserably.A possible 4 percent mortgage rate is seen to be a good thing, and home owners as well as home buyers should benefit if it ever happens - when this is all over Bernanke should wash his hands and go home.
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