Frankly, people, what did you expect?
Many economists we’ve spoken with over the past few days have acknowledged The Fed would probably cut interest rates…but didn’t really need to.
Wall Street went into a deep-funk pouty-fit right after the announcement, like some spoiled 6-year old that just got a shiney, new bike for Christmas, and is pissed because it wasn’t just like the one in the store window, with FAT tires.
So now the blame game begins. Let’s pile on Ben Bernanke for not giving us a half point cut, or dare we breathe it, a 75-basis point cut, even though things are actually perking along fairly well…given the crappy condition of some lending institutions.
Guess what: They brought it upon themselves, spurred by greedy investors and managers, trying to wring more blood out of the turnip, despite rules and guidelines that were pretty clear that turnips which cannot make house payments shouldn’t live in garden homes they cannot afford.
Let’s pile on George Bush, while we’re at it, for his “bailout” of the financials by freezing terms on sub prime loans…thus keeping said same greedy managers, and the investors to which they pander, from raking in bonuses and earnings beyond reason again this season, while some families wonder where the next house payment is going to come from.
First—it’s not a bailout, it’s a freeze on rates that were about to adjust. Get over it.
Second—you wussies that are crying about not getting the earnings you thought you’d get from that rotten portfolio of high-yield notes, just simmer down. Ever hear high rates of return generally go hand in hand with high risk? A little bit of something is better than a lot of nothing, which is what you’d be receiving had those loans gone belly-up. Get over it.
And thirdly—those of you whining the “What About Me?” blues, while dutifully paying your mortgage notes without fail, and feeling like you’ve missed the gravy train because your numbskull neighbor is getting a “free ride” with a frozen rate on his ARM: What about you?
What about when you go to sell your home in three years, the market is pretty much back to where it should be--because your neighbor’s house, and the other sub-prime financed homes in your neighborhood, didn’t wind up in foreclosure and on some lender’s books as an REO, and as an empty eyesore on your block…because Bush got it right, saw the ugly light, and intervened.
All these nattering naybobs of negativity that are chirping about how we need to go through a recession because they think “it would be good for
That’s like saying poverty is good for society because it cleanses us of unnecessary happiness.
That’s like saying catching a dose of Cancer is good for you because it helps you appreciate good health.
Anytime we can head off a disaster—by freezing loan rates on a troubled slice of the mortgage pie, thus keeping the rest of the pie edible—is a good move.
What would you give to keep your neighbors in their homes, knowing that otherwise you’d be living with vacant, decaying houses on either side of yours? Get over it.
Consider it financial amazing grace…unmerited favor…given in the spirit of the season by a somewhat bumbling but benevolent Open Market Committee, willing to pander to the crowd in the face of evidence to the contrary that the economy needed an artificial resuscitation.