3 Ways to Make the Fed's Moves Work for You

Reader Comments
Back to article

.

of 4:00PM October 03, 2008

Lowering published prime Interest rates will not affect the consumer much. Real repayment interest rates are held high by the margins required to pay for excess within the loan industry and for the excessive abuse of past borrowers.
I said it before and it is proved. I agree with most of the above comments.
Greed. More stuff for fewer people. More power at the top, less money at the bottom. Not much for domestic liquidity. Remember that trickle down was proven to be suck it up. You saw it yourself. The question, "what to invest in" when Bush the pirate kid took office? My advice to my family was to buy energy when Junior took office the first time. Also buy ownership of water and commodity of real value. Not paper. (Our family does not invest in munitions which was the most obvious choice for quick gain). Revenge is expensive, NO? Defeating the Russians with economic spending (like a space race and fighting a loosing war in Afganistan) was a generic concept published in the 1950's by the Grape and Jelly people - the Welsh society. Thank you Ronald for taking credit.
My previous advice to our recent Governor Davis was to let our energy companies and distributors of energy fail then buy them for the public at a favorable rate. Penney's on the dollar. Then just rescue those that over indulged in single retirement plans with what existing welfare programs Reagan may have left intact. I am right again. Let them feel the bite of reality. Certainly I did not agree to guarantee loans to support existing failed policy and retirement schemes of those theives who supported this guy who used the stripping of wealth of retirement programs and companies to place him in office.
Now we all face new taxes and much less service. Not just California with the worlds 5th largest and pretty robust economy. Realize that most political folks are working for someone special other than their constituancy. Certainly they are not working for the US and its residents.

the big little of CA 5:14PM May 03, 2008

In the past 150 years we have not had one republican president who has been fiscal minded or reduced government. So this theory that Democrats just spend is “just plain ignorant". Yes, democrats do and more than likely will raise taxes. But pick your poison people - The Republicans run the country on a credit card - how do you think the war is being funded, and that stimulus check coming in the mail is based on paper without anything backing it up. When George W. took office there was a projected surplus on the books, George blew that projection in less than six months in office and then took out his Congress issued credit card and started spending beyond the means of this country. Reduction in taxes means we spend beyond our means. And, running the country on a credit card is the Republican way of doing business. The democrats raise taxes, but as long as the taxes are raised on those that can fairly afford to pay, in my book that is fair. So Dem's when we finally get the "insane ones" out of the white house, don't raise taxes on the lower and middle class, raise the taxes on those you can afford it and gain the most from our country.

Steelesummer of CO 6:55PM May 02, 2008

If you have an interest rate that is above 6.5 you should consider refinancing. I am biased of course because I am a lender, but even with a rate at 6.5 there are the possibilities of a no closing cost refinance. Since you won't use equity, even saving $50 a month maybe worth it. Plus over the life of the loan you will be saving a ton. If you have an adjustable rate or a prepayment penalty you may still have options. Hey it doesn't cost anything to have a lender run some numbers for you. If anyone has questions you can contact me through my website www.lancastermortgagelender.com

of PA 5:01PM May 02, 2008

Edward - I'm not sure where you got your education from but when I bought my house in the 80's interest rates were topping out at 12-15%. It wasn't until Clinton took office that we finally saw interest rates dropping. You want to place blame - it sits squarely on the shoulder of the Reagan/Bush administration. How you can possibly blame a congress that has been in office for less than 2 years for almost 8 years of mismanagement is beyond me. It's been proven time and time again that the current administration (bush, etal) is responsible for the economic climate. There is no justification for this administration to continue to hand out $18 billion dollar subsidies to their oil buddies who are making over $150 billion dollars in profits. This causes the price of everything from gas to food to skyrocket and the average person doesn't stand a chance. Add that to the fact that the government is giving out tax breaks to companies that outsource jobs, well - you do the math buddy. This administration is the most corrupt ever - bowing to big business and the rich at the expense of it's average citizens.

Stella of NY 10:07PM May 01, 2008

It is important that business keep consumers buying; they will be in sorry shape otherwise. As long as the value of housing went up, consumers financed their purchases based on this increased value. But, income distribution is now a skewed as in the late 1920's. The wealthy are not going to keep purchasing enough to keep business inventory cleared. And the rest of us mayl not be able to do so. Yet, the stock market keeps rising.
Another thought about trade. Lower wages for workers in this country should have been expected as trade increased. Capital holders are the beneficiares. They have been unwilling to share the potential gains that can be achieved from trade. They were able to get Regan and Bush to give them major tax cuts. Therefore, the disillusionment with trade.
A thought about all these new financial intermediary instruments that have been created in recent years. If I recall my monetary theory, these instruments increase the velocity of money, over which the Fed has no control.

Howard Davis of MD 2:02PM May 01, 2008

Well Said Ryan - I get so very tired of hearing how people have been so taken advantage of. We need to step up to the plate and accept responsibilty for our own actions. People in this country are so darned spoiled and think that we should all have only the best of everything and then upon getting it, have no idea how to pay for it. Grow up people it does not take a brain surgeon or an economist to figure out the most easy of equations. Money in verses money out - simple accounting. While I think this administration is absolutely the worst that I have seen during my lifetime without a doubt and all the President's administration are in the politics game for there own benefit or to benefit their friends and cronies, the general public "American people" needs to take a hard look at their own actions and stop placing the blame on the government and expecting them to bail you out.

Susan/Whittier of CA 1:06PM May 01, 2008

As a former teacher of remedial math in the inner city, if people would start paying attention in math class (or even went to church and read the book of Proverbs in the Bible), they would know the dangers of debt and avoid this kind of stupid borrowing. Living within one's means requires only a budget, basic math skills, and self-discipline, but that last one seems to be in even shorter supply these days than basic math skills. I think greed has supplanted immorality as the #1 vice in America.
Recommendations for saving more money.... Go on a "spending fast" for a month: don't eat out at all; use up what you have at home; buy less expensive groceries and shampoo; don't buy any new clothes, gadgets, CDs, movies, etc; cancel cable and turn off the TV (hook up those old rabbit ears if going cold turkey is too hard); if you have a cell phone, cancel your home phone or reduce to just the most basic plan and hook up that old answering machine; go back to dial-up Internet for essential e-mail (besides being less expensive, the ads will take so long to load you won't be bombarded with temptations); play board games or read books you already have or can borrow from the library; tell the kids to go outside to play "real" games like tag and hide-and-seek; unplug the digital photo-frame which uses $9/year in electricity (and sell it on E-bay); replace incandescents with fluorescents; mow your own yard... with an old reel-styled motorless lawn mower (no need to pay for a gym membership OR a lawn service). In all the free time you'll have without a TV, you should have time to put together a budget and then figure out how much you can spend on clothes, car maintenance/payments/depreciation, and other essentials on a monthly basis to still meet your long-term financial goals.
Case in point: Although I'm a single woman in my mid-30's, by being frugal, not only do I own my car outright and have no credit-card debt, I'm looking at paying my house OFF in five-to-seven years (lived in a 1-bedroom apartment for 13 years saving up before I bought last year); theoretically, I could pay it off now, but I won't touch my 401K to do so. You can do it, too, if you will choose to live within your means.

Kristen of TX 12:50PM May 01, 2008

I don't think the idea of going from a 30year fixed rate to a 15 year fixed rate is a bad one. It seems like a great way to save a ton of money. I wouldn't ever buy a new car so that part isn't for me, nor do I carry a balance on my Credit card so I could care less about credit card interest. It's idiotic to say that the current economic crisis is the fault of democrats who have had a slim majority in congress for just over a year. The president creates the budget, and his lazy and arrogant band of get rich quick idiots has sold us out to the Chinese, arabs, Texas oil billionaires etc. and sent our kids to Iraq to die for nothing. It was under the watch of 8 years of a dyed in the wool conservative president, 6 years of conservative congress, and a conservative majority in the supreme court that we reached this point. We'd be out of Iraq already if Bush hadn't vetoed the democrats' budget in '07, and all the money going over there would be back in our economy. Maybe we wouldn't have to borrow the "tax rebate" money from the Chinese. Brilliant moves!!

Ryan of WI 11:09AM May 01, 2008

It's a shame that 60% of Americans have overspent and are in credit card debt. These people need to get an education on how credit works before they are allowed to borrow and spend (sounds like what Congress does everyday!). All to keep up with their friends on the latest technology, fashion, or cars. People who have high interest rates on their mortgage usually have bad credit scores, which is THEIR FAULT for not paying their bills on time. It's not Congress, Bush or Bernanke's fault. It's your responsibility to keep to a budget and not overspend.

Steve R of NJ 10:57PM April 30, 2008