Seems the subprime mess is coming home to roost. Here's an article about what's happened overseas. Another on how there is more room to fall.
The Fed this morning cut by .75% the federal funds rate.
It seems to me that if a little more attention had been paid to the subprime market this would not have happened. It also seems to me that this should not have come as such a huge surprise. As the prime went up so did the rate people with this type of mortgage would pay once the lower rate lapsed.
But the Fed has always been more concerned about inflation, which never seems to rear its head, then what is actually happening on the ground.
The Fed will meet next week. There is talk of dropping the prime rate by half a percentage point. They may need to do more than that if it going to make any significant difference on the markets.
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