Bailout Impact: Libor Improving

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I am one of the many people that have a home mortgage tied to the LIBOR. Mine is a 6-month LIBOR. So, I have a vested interest in this. For obvious reasons, I like that it is coming down. I make the same payment every month, so the lower the LIBOR, the more principal comes off. I disagree with the previous comment, because if the rates go up, an already bad problem with foreclosures will get worse. Rates need to stay low for a while so that some of these loans can either get re-financed, or paid off. Now, I agree that you can't keep low rates forever. However, it is going to take quite some time for this problem to work itself out. People like me who pay their mortgages need to be given time to get their mortgages caught up with falling home values.

Scott of OH 2:41PM October 20, 2008

The key question citizens ought to be asking about this is:
If banks are borrowing from each other at about 4% for three months (see above), then why are they only offering to borrow from citizens for three months at rates between two and three percent? My local paper has a table today of 14 local banks offering rates for 3-month certificates of deposit.
All fourteen are between 2 and 3 percent.
Rates have been held too low too long in America. This is the root of our current mess---including the stock bubble of 1999 and the housing bubble of 2006.

of 12:53PM October 20, 2008