Danial Magid

Can the Fed Really Afford to Cut Another 50-75 Points?

Promod, you got good points in your post, but we must not forget that the FDIC is insuring many depositors, the banks are reporting losses, and if their losses get too large, they'll become insolvent, and the FDIC will get stuck paying lots of depositors a lot of money which will cause our debt/deficit even more troubles. The only purpose for the rate drop is really to save the banks from becoming insolvent.

At this point, obviously, the rate cuts don't propegate to the small person, so I don't think we'll see much effect with any more rate drops. I am all for saving the banks.

Lilguy has put it nicely, "find a more direct way to reach worthy borrowers without going through the money center banks, which are nothing but a financial black hole", the question is easy, the answer is a bit harder to find as so many people have enjoyed borrowing cheap money over the past few years. Live and learn, we'll live, hopefully we'll learn..