Recession now looks to be in full swing, and the markets are showing it. The DJIA tumbled more than 300 points on fears that the economy is in recession.
This, however, is good for mortgage rates. Rates continued to improve today, and may get better throughout the week. If you missed out on the one-day window of opportunity a couple weeks ago, when rates got really low, it is now a good time to ...
With the market relatively quiet today, I think it's a good opportunity to take a deep breath and blog about the state of the housing crisis.
A lot of what happens and has happened with housing can be attributed to the "herd" mentality of most people. Market perception, and what people think has been a big part of the housing boom and ensuing crash.
In the early 2000's, speculation and house flipping ...
Non-farm payroll numbers were released this morning and showed the first job loss since August 2003.
The weaker than expected number put an end to early gains in the markets.
Employment data is a lagging indicator of where the economy is headed, and this report may just be the final straw, signalling that we will see recession in 2008. This also opens the door for further FOMC rate cuts this spring.
posted by RJ Baxter February 01, 2008 9:20 | permalink | comments(0) | Housing CrisisJanuary, 2008 FOMC Rate Cut Effect on Inflation
I have blogged a few times over the past couple months about the threat of "stagflation" in today's economy. Stagflation is a period of simultaneous high inflation and high unemployment, not a good scenario.
Whether or not we are headed toward stagflation is debatable. Today's higher unemployment claims report is not a positive sign for the economy or for the prospects of stagflation.
Although the jobs report got the headlines today, the equally ...
The FOMC has cut the short term Federal Funds Rate by 0.5%, as expected, in their meeting this morning.
The announcement is expected to send stocks higher as investors are optimistic that the move will bolster a struggling economy. Historically, a Fed cut has served to cause mortgage rates to go up.
GDP was also released this morning at only 0.6% for the 4th quarter of 2007, lower than expectations, and a sign ...
posted by RJ Baxter January 30, 2008 12:26 | permalink | comments(0) | Housing Crisis Myth: Fed Rate Cut Has an Immediate Effect on the Economy
With another FOMC rate cut looming tomorrow, I think it's important to dispell another commonly held misconception. When the Fed cuts rates, there is not an immediate effect on the economy.
We are starting to see the effects of the first FOMC rate cuts from back in September, and the Fed has continued to steadily lower the Federal Funds Rate, including an emergency rate cut of .75% last week- the largest single-day cut since ...
