Turi,
I love reading your posts. First of all, you're so knowledgeable. Secondly, I love getting a different perspective of the whole mess.

What I meant by "pegs inflation" is that they target it, which it looks likes they do.

Here in the U.S., besides the rate cut, there's talk that the Fed lend directly to corporations. The fear is that the rate cut will induce borrowing by banks, but instead of passing the new funds to consumers (and each other), they just hoard the money to shore up their own liquidity.

Oh yes and one thing I forgot to mention is that our £50b bail out package (named by the media) means that the Government will effectively become shareholders of the recipient companies. If dividends then become payable, the Government then has first rights over them. This is with the view that eventually the Government will reclaim their money and that no more banks will become nationalised.

Is that similar to how the Fed will invest?

What are mortgage rates in the UK?? Here in the US, you can still get rates in the 6-6.5% range. However, if you have a credit score of less than 700, you can forget about getting any credit.

Dow down another 100 points right now. I feel like it's never going to stop. I heard a prediction yesterday that "bottom" could be about 7500.

I'll be the first to admit I know little about Wall Street. Yet, from what I have been hearing, I do believe it is more serious than a lot of people might think. There is no easy fix, purchasing homes and getting loans in general is going to be rough. We see it already with job losses, food prices.

I was listening to a Public Radio station the other day and they were taking calls from everywhere. Let's see if I remember this correctly. Some guy who lived in Boston and owned a car dealership (have no idea what kind of dealership) called. He said that his customers are having a hard time getting loans. He told of one lady who had "good" credit (not excellent but good with no credit card debt, etc). He figured she'd qualify easily.

He said that the loan company called him and told him that thy'd give that lady the loan IF in the event that they had to reposssess the car, the owner of the dealership would pay the first $1,800 of the loan. He said in the 20 some years he'd been in the business, he never heard of such a thing.

The Market has only been open for a few minutes, and the DOW is already down another 700.

Evidence of global recession fears were most obvious in the price of crude oil, which briefly plunged below $80 a barrel to its lowest level of the year. However, crude prices recovered along with the equities markets, recently down $5.93 to $80.66 a barrel.

[quote=Just Lou]

Just wait until the OPEC countries vote to slow down production (causing an "artificial" shortage in which prices will rise again).

Turi,
I love reading your posts. First of all, you're so knowledgeable. Secondly, I love getting a different perspective of the whole mess.

Yeah, that's only a matter of time.

I read many car dealers were essentially telling anybody with less than great credit that 30% downpayment would be required. I can't imagine too many low-to-middle income families have that kind of extra cash in these times.

I'm not mentioning this to get into another political debate. But does anybody else worry that the U.S. might suffer the same fate as the U.S.S.R., when the latter collapsed in the early 90s? I have been frightened of this scenario occurring in the U.S. since Katrina. Particularly because Katrina was preceded by the economic disaster after 9/11, along with the enorumous cost of the Iraq War. And what is one big common factor that the Soviets and U.S. had? We were fighthing bin Laden and Afghanistan. He essentially bled the Soviets to death economically. I think it is obvious that is one of his goals against our country too. I think our capitalistic society is more able to fight back than a communist state, but it is still worriesome.

Granted, the mortgage mess and the credit worries are not related to the wars or bin Laden. But I get the feeling he's laughing somewhere right now at the mess we are in, which he was partly responsible for creating. It's fairly obvious that the billions we have sunk into Iraq a) could have helped rebuild New Orleans, b) been reinvested into better energy plans, c) used in improving our existing infrastructure. What's done is done, we cannot change it. But I sometimes fear that we have played right into the same trap the Soviets did against bin Laden.