Was It Enough

December 12th, 2007

Although my saving friends wouldn’t have liked it, I think a 50 Basis Point cut would have done more good to lift the economy.

2008 will actually have more Home loan problems.?? More loans are resetting in 2008 than they did in 2007.? The new gov’t Hope program only applies to a very small number of people and most of the ones it could help will probably just walk or be in the same spot years down the road anyway.

I bet if they had included people on the solution panel that didn’t have a financial stake or looking for a favorable poll rating, the solution would have?been better.? If they had only asked me.

I’m guessing more rate cuts are in the future.? I also believe when they start going back-up they could need to go above the last high we saw (5.25%).? But also remember what most banks did.? They offered their highest rates on the short-term CDs (1-year or less).? The question is when could rates turn around.? I don’t think it will happen until 2009.?

I’m not suggesting only buy 1-year CDs though.? Everyone that did in?mid-2006 through this year,?are now or will be facing much lower rates.? Ladder your CDs.? I say it all the time.? It is the best way to go.

-- By +Chris Duncan

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