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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: Rocket Red who wrote (142765)	1/20/2009 1:28:02 PM
From: koan	Read Replies (1) \| Respond to of 313871

Here is an idea from Gary Molner and sort of what I expect. Something like this anyway. "I agree that employment is the key to building our economy back up. I can think of no faster way to build the economy then to put a lot of money into the hands of people who still can make both mortgage and other credit payments. My solution, while overly simple is to reduce rates on every loan to 3.5% for mortgages or others tied to any equity, i.e. cars, boats, etc. and bring down credit cards to 5%. Of course those having loans below these values could keep the loans they have. I believe this would bring the payments down to the point that the foreclosed homes would rapidly be sold, construction would take off employing a lot of people, consumption would increase, again taking all sorts of people off unemployment as manufacturing, distribution and sales all build to meet demands. The banks and other financial institutions wouldn't be making as much in interest from each account, but with extremely low cost of funds from the FED, they'd probably end up making more money as so many would be buying homes, cars, etc from the new found spur to the economy. Let me be clear, this would not happen with refinancing, I'm talking about every existing loan being dropped to these rates instantaneously. Banks would notify the borrowers of the new lower payments immediately, a mortgage might drop nearly half, credit cards might come down more than that. This is something that could be sustained as long as interest rates remained low, and while eventually rates would no doubt eventually need to go up, with the economy back on solid footing they could, but only for new business, the low rates in place would remain courtesy of the low FED rates, and nearly a trillion the govt. put into keeping the financial system viable in the first place."