Phyllo...
Taking your thoughts, but probably a step too far...
Not wanting to get into an economics debate, but the Fed funds rate is not directly correlated to mortage rates. That's a common misconception. Mortgage rates are tied to the value of mortgage backed securities traded on the bond market. As long as the bond market sucks, mortgage rates will continue to increase (though they are still near all time lows). In fact, the Fed cutting rates could serve to stave off the coming correction in big boards meaning that bonds could continue to flounder meaning mortgage rates could continue to adjust up resulting in potentially a higher default rate.
IMO (and it's just that), the economy is so screwed up, not because of Government fiscal policy so much as it is in consumer habits. Over the last 5-7 years, consumer spending has become more and more tied, not to wages earned, but to real estate values. The "Home Equity Line of Credit" Credit card mentality combined with the "Get an Adjustable Rate because you will be able to sell for huge profits before the adjustment comes" mentality is the problem. We all want Real Estate to help us live a life above our means. And compared to the rest of the world, we live in way more home than we actually need. But then again, Americans are obsessed with space. Big cars, big homes, big yards etc etc.
We want to blame the government. We want to blame the mortgage broker (and I as a mortgage broker and realtor have dealt with folks that were victims of mortgage fraud). The problem IMO is that most bought too much house to begin with. Sorry to be so tough, but it's their fault they are losing their home. They couldn't afford it when they bought it. It's no different than when a person on these boards starts crying that they lost everything on a bad stock purchase and now is in debt. It's sad. But it's their fault. It's tough though because we're talking about emotional issues like families losing houses.
Again, though, I don't see this as a government problem but I'm also a liasez faire/caveat emptor/state's rights/less government/dare I say libretarian guy. I also have opted out of social security and don't vote much on purpose, so keep that in mind. I'm not main stream to say the least. My personal conviction is that the country needs less government intervention, inlcuding Fed intervention (remember the late 1970's and 1980's and an over reactionary Fed).
IMO, and it's just that, social problems are a church problem (again, based on my personal conviction and I have the right as a Christian to have one too). Too bad we Christians are too busy building big buildings, playing local politics and preaching about prosperity than we are actually giving financially until it hurts to the poor in our community. Like the folks in our congregations who are losing their homes to this mess. I wonder what Acts 4:32 would be like if Christians like me had the actual guts to live it and let it flow out into the non-Christian community...dare I say it would be Christ-like...I'm trying to get there but haven't quite arrived. I'm still addicted to my "big" things...
Ren
"Experience: that most brutal of teachers. But you learn, my God do you learn." C.S. Lewis
www.younglife.org
