DougM

Against Lower Mortgage Rates

This analysis is IMO bang on. Recent fed actions are an effort to prop up debtors at the expense of savers. It will ultimately lead to another huge crisis as anyone who lent long while borrowing short at today's artificially low rates finds themselves facing massive losses. Meanwhile savers will fight back by bearing their losses now lending (their cash) short in CDs while borrowing (on their homes) long, the opposite end of the trade. The fed can't create unnatural conditions contrary to market forces without unwanted consequences showing up later. Didn't we learn anything from the last time this was tried (in 2002)?