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(CNN) NewsFlash Fed cuts interest rates a record-setting 11th time   ( divider line
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3019 clicks; posted to Main » on 11 Dec 2001 at 2:42 PM (15 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»

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69 Comments     (+0 »)
2001-12-11 02:43:51 PM  
2001-12-11 02:44:19 PM  
COOL! Now maybe I can refinance my house.
2001-12-11 02:45:06 PM  
No! Bad economy is good... I Have to buy a house and not sell one :)
2001-12-11 02:45:23 PM  
goddamn reaganomics.....
2001-12-11 02:46:15 PM  
poor Mark Mcguire. he deserved to keep the record. the Fed is such an asshole. i heard he spit on a fan once.
2001-12-11 02:48:35 PM  
This is good if you have to get a loan, but weird, since our money has no basis except the trust of those who use it. If cutting interest rates doesn't work soon, expect to see MASSIVE inflation.
2001-12-11 02:49:37 PM  
they cut the rates any lower, and I'll have to pay the bank interest on my savings..
...of course, if I refinance my mortgage....
2001-12-11 02:51:12 PM  
doo-dah......, doo-dah.......
2001-12-11 02:54:07 PM  
Bling Bling, I'm with 9/10, refinance time.

Though I've only had my mortgage for about 5 months. Heh.
2001-12-11 02:54:55 PM  
I'm not very good at economics so bear with these lower interest rates somehow help the hundreds of thousands of people (both technology and non-technology related) who have been laid off in the last year? They cannot make their house or car payments and are losing them, let alone be able to refinance them.

Banks like people to have a job before they finance them.
2001-12-11 02:56:32 PM  
Frikkin mortgage rates started climbing again, and just stabilized at just above 7%

The bubble must burst before the mortgage rates truly drop to 6% or below. THATs the time to buy/refinance
2001-12-11 02:56:46 PM  
People, wait till rigggggght before Xmas before refinancing ...
2001-12-11 03:01:22 PM  
This is boring
2001-12-11 03:03:21 PM  
So about refinancing....I want to refinance my car. I called the bank I have the loan from, and they said they don't refinance their own loans (what?). Anyway, what's the best way to go about it? Just hit another bank, try to get a loan for the $ I owe and lump pay the other one? Anything I should look out for?
2001-12-11 03:04:13 PM  
feh, I should be refinancing my damned car...
2001-12-11 03:07:53 PM  
kas: go to

Its a big help with stuff like that. He is even on the radio (AM) of you want to call him up.
2001-12-11 03:08:27 PM  
When the $#@! will Visa or Sears be cutting their !$!@ing rates?
2001-12-11 03:08:31 PM  
Mortgage rates have nothing to do with the fed rate cuts.

Mortgage %age points are determined from the bond market.

Kas On a used car, you more than likely aren't going to find a bank to give you a better interest rate (unless the current one is insane.) That said, you could probably get a used car loan for 6ish to 8 percent. Try credit unions. They typically have lower auto loan rates than most banks and only require $25 to start an account if you're not a member.
2001-12-11 03:08:38 PM  
Shouldn't this have had the [image from too old to be available] tag?
2001-12-11 03:11:29 PM  
Prngr44: I bought the car new, if that's a factor.

Thanks for the link Matzug, I'll keep digging around.

2001-12-11 03:11:29 PM  
and yet I still can't get my credit card company to lower my interest rate from 24% perfect. Damn them
2001-12-11 03:15:22 PM  
Hooray for boobies.
2001-12-11 03:19:09 PM  
you gotta wait until pigs start landing on your roof
2001-12-11 03:19:39 PM  
Bah, I bought a 2000 car right after Thanksgiving. Got a flipping 8.5% over 6 years. But I wanted my payments under $200 a month, which I got. Not happy with the 8.5% though.
2001-12-11 03:19:56 PM  
If your paying 24% on your credit card you must have got suckered into that Queen Latifa thing
2001-12-11 03:23:49 PM  
Greenspan sucks. I thought he was against this kind of shiat.
2001-12-11 03:24:19 PM  

24% My god. You need to get a better card and xfer the balance.
2001-12-11 03:28:09 PM  
Kas In the eyes of the lender it's used.

Grivas Call 'em up. I did. I got my rate lowered 2 points to a flat 9.9 fixed. I have decent credit (now) but all you have to do is ask. Worst case, transfer the balance from those cards to a lower interest rate card if you have no fear you won't be denied. (Too many inquiries to your credit report lowers your score.)
2001-12-11 03:30:15 PM  

Have you tried calling the credit card company and telling them you're considering paying off their card with another one? Often, they will offer to lower your current rate.

Also. Dont buy a house when interest rates are low. Usually that means the prices are high. Remember, you can always refinance after the deal is made, you cant renegotiate the selling price.
2001-12-11 03:30:48 PM  
Okay I'm not one of them there accountanticians but doesn't this HAVE to have some adverse effects on the economy down the road?

Also, the banks don't really have to lower their rates at all, and that's what matters to the average consumer, right?


2001-12-11 03:40:44 PM  
Due to the recession, most housing prices are lower than normal right now, and housing starts are WAY off, meaning that as the economy starts to recover, interest rates will be higher, but housing prices higher still, the way I understand it.

I had to get a high-interest credit card when I got back into the credit game, so I put some charges on it, paid it back off, and waited. Within 3 months, I got better offers, and took 2 of them and killed the high interest one. I really only use my 12% card, and try to keep it paid off, even at that (it's for shopping on the net). The main thing is to try to avoid credit, or at least see it for what it is, spending money you don't have, in many cases. Although the "low monthly payment" may not hurt that much each time, it's compounded, so you really end up paying out the arse in the long run.
2001-12-11 03:44:28 PM  
Can we say LIQUIDITY TRAP????
2001-12-11 03:44:34 PM  
Yes... and no. The reason they cut the rates is because a recession causes people with the money to stop spending money, causing a downward spiral (or that's the theory, and we've used it for a hundred years). So, the feds cut the interest rate, attempting to encourage new growth, and increase consumer & corporate spending, allowing the inflation cycle to continue.
Wash, rinse, repeat infinitum.
2001-12-11 03:49:20 PM  
Doctor: But doesn't the money from the interest go somewhere? What will happen when the money usually generated by those interest rates disappears? Exactly who's pocket does that come out of and won't that hurt the economy?
2001-12-11 03:56:53 PM  
Mostly we want corporate spending to go up. With lower rates, corporations are more willing to invest in, say, tht new building down the block, which will help bring in more jobs for people. Consumer spending is helpful, but it's got nowhere near the impact that corporate spending does.
2001-12-11 03:58:01 PM  
Thing is Japan's version of the Fed has lowered its prime rate to 0.10 percent and they are still stuck in eternal recession.

But Japan has a LOT of bad loans sitting around. Imagine a 40-year version of the dot-com bubble going *pop* ...

2001-12-11 03:58:36 PM  
I bought a new car about 3 weeks ago. got 2.9% financing over 60 months and threw my other car loan under the 2.9% too.

Got to love desperate car dealers.
2001-12-11 04:04:05 PM  
Migettossa: the interest rate charged by banks to customers is different than the rate which the Fed just cut. The Fed reduced the interbank loan rate, the rate at which banks make loans to each other. The idea is that with the cheap cost of borrowing, firms and big-time corporations will have an incentive to borrow and thus spur economic growth. You and I are in another class all together when it comes to interest rates and our banks. We get shat upon.
2001-12-11 04:04:51 PM  
"I want to have sex with sharon stone or somebody" - 1996 nat'l champ Craig Assemacher.
2001-12-11 04:06:08 PM  
Roselea, I would check out Bank America's website. They offered me 8.99% on my balance transfer which is FIXED UNTIL IT'S PAID OFF! Awesome deal. Plus, they also allow payments over the net so you don't have to waste a check and precious stamps.
2001-12-11 04:08:47 PM  
Doctor & FuManshu: Thanks guys, just had to make sure I don't give a shiat about this crap.
2001-12-11 04:14:05 PM  
Quick1: Consumer spending makes up two-thirds of the U.S. GDP, so its impact is much greater, in that sense, than that of corporate spending.

The slowdown this year was started by a slowdown in corporate spending, but consumer spending held up, keeping a recession at bay. Then 9/11 put a dent in consumer spending and triggered a recession.

Now, you can argue that increased corporate spending leads to hiring workers, etc., and you may be right. But, then again, if consumers don't want to buy companies' products, then companies won't spend money to increase production.

It's all a big circle-jerk.
2001-12-11 04:17:21 PM  
Cutting of Taliban's collective lifespan would be enough for me.
2001-12-11 04:20:15 PM  
2001-12-11 04:22:51 PM  
Feds cut interest rates - France surrenders.
2001-12-11 04:24:02 PM  
I'll soon have even MORE telemarketers calling me in the evening telling me they can give me a better deal on my mortgage. They never can.
2001-12-11 04:36:36 PM  
Rosalea 24% good lord. I have like 1/2 of that. When I was fresh out of high school I had 18%. And I'm with Bank of Amafia.

I would do some shopping around if I were you.
2001-12-11 04:52:26 PM  
Look, it just goes to show that you can lead a horse to water but you can't saddle a duck.
2001-12-11 05:06:42 PM  
NO NO NO I see NO advantages to this to MY wallet whatsoever. Loan/home rates are NOT coming down any.
2001-12-11 05:12:27 PM  
Woohoo!!!!! This is great for me the wife and I are house shopping anyway. At this rate the interest rate on my mortgage will be lower than the interest on my car loan hehe.
2001-12-11 05:13:25 PM  
Japan's been cutting rates too. They're almost down to zero percent. Hasn't been working for them.
2001-12-11 05:15:36 PM  
miss one little payment and my interest rate went from 8% to 24%

I'm not threatening to pay it all off with another credit card....I'm just paying it all off $1000 balance (I was umeployed for 6 comes in handy) and I'll have it paid off by the end of jan....

gonna stick to my $200 limit 6% interest card from now on
2001-12-11 05:17:15 PM  
er 9% to 24% and 8%

good grief I need some caffiene and a nap
2001-12-11 05:27:00 PM  
Everybody that understand macroeconomics, say it with me now.

The product of lowering interest rates too low too quickly is hyper deflation, not inflation!
2001-12-11 05:32:25 PM  
but the banks are made of marble, with a guard at every door
2001-12-11 05:36:09 PM  
yes Fb, but it's not that they're dropping them too quickly... they're almost out of "wiggle room" to drop them any more.
2001-12-11 05:48:13 PM  
Hyper deflation?!? Where have we seen this situation before?

Hmmm 1989-1996 Japan has a massive stock market boom where per capita income rose by 56%. The banks began lending without looking to the future. The stock market and real estate prices soared. This encouraged companies and private investors to take on unreasonable amounts of debt, creating a double boom in both finance and real estate. Those were the years when Japan gave the impression that it could effectively buy the world.

In early 1990, realising that this was a recipe for disaster, the Bank of Japan raised interest rates and put a squeeze on credit. But it was done too abruptly. As a result, the Stock Exchange soon lost half its value. The banks, finding themselves with a mountain of suspect debt, drastically cut back credit. This in turn led to the collapse of thousands of small and medium-sized companies. Almost overnight, millions of Japanese felt that part of their inheritance - artificially inflated by speculation - had simply vanished into thin air.

The Tokyo government has put forward no less than 11 recovery programmes since 1990 and has spent more than $575 billion in an attempt to revive the economy. To no avail. And reducing taxes has not helped either. With their suspicions about politicians and their fears for the future, the Japanese are now saving harder than ever (even with interest rates of 0.3%) and, by not consuming, triggering a spiral of deflation and recession.

Wow. Eeriely familier. Sounds like the exact situation the US is putting themselves in right now.
2001-12-11 05:51:26 PM  
Doctor wrote:

"yes Fb, but it's not that they're dropping them too quickly... they're almost out of "wiggle room" to drop them any more."

They are out of "wiggle room" because they are dumbasses, and so are you. They need to let the interest rate cuts work through the system. If they did that, instead of overcorrecting, we might have an economy that would stay stable for more than 5-10 years at a time (or less, yuck).

That is all.

-Got Spider??
2001-12-11 06:03:25 PM  
The economy needs people to spend. That is the only thing that is going to help it. Cost of money is not the prohibiting factor to economic growth anymore. The only thing that can make a difference is a well thought out and well placed fiscal incentive by Congress to encourage people to spend.

This was a very, very poor decision to cut interest rates in my opinion.
2001-12-11 06:11:26 PM  
japan has like a 0% intersest rate and their economy still sucks. alan greenspan should be tied to a slab of concrete with George W bush and sent on a one way exploration voyage to atlantis. We will just tell them there is lots of oil and money there so they will be eager to drown.shiat bags.
2001-12-11 06:31:00 PM  
Ironically, if the Fed raised interest rates .25 the economy would probably sore. "The fed thinks the recessions over. Lets spend and borrow, woho!!!" people would say.
2001-12-11 06:44:24 PM  

I agree. Not to say that raising it would be the right idea, but not lowering it and saying publicly that the short-term looks much much better would have done more for consumer confidence than a .25 drop in the fed funds rate that will have absolutely no positive impact for consumers.
2001-12-11 07:56:09 PM  
Wow, Gotspider truly reveals his age, with his comments - what a jerk.

I'll have to agree that some public portrayal of no recession would have as much if not more effect than actually altering the rates.
2001-12-11 09:17:04 PM  
Hah. I don't finance *anything*. If you can't pay for it in one payment, you can't afford it. (unless of course it's an *investment* situation which will yield a profit!)
2001-12-11 09:23:10 PM  
An economy built totally on borrowing basically puts everybody on the U.S.S. Debt and sends 'er careening o'er the waves rudderless. It begins to take on water, y'see? This sort of post-bubble shrinkage is actually a good thing; it pushes people to reevaluate their financial positions and start making more prudent decisions. Fewer risks are taken, which is both a good and bad thing. And we also run the risk of starving valid new ideas of capital. But I don't think I'm the only one who'd say America's gone too far down the fritter-fritter road...
2001-12-11 09:32:50 PM  
Perhaps if Greenspan hadn't made such a concerted effort to tank the economy last year (by raising interest rates several times in a row, despite no signs of inflation), we wouldn't be in a recession.
2001-12-11 10:29:56 PM  
Time to buy a rates are UP...time to refinance a rates are UP...time to...QUIT CUTTING THE RATE.
2001-12-11 10:46:08 PM  
Best way to kick start the economy: start telling greedy CEOs to stop firing everyone once they get their bail out money.

Since everyone else has a theory on economy, I should form one too. See, the more people employed = the more money being made = the more money spent = more taxes = more money for the government.

Of course it doesn't work too well when, after recieving an 800,000,000 bail out, you fire 13,000 employees. Many companies have done that as an excuse of 9-11, so they can keep their multi-million dollar a year salaries.
2001-12-12 10:31:19 AM tell me, one of you brainiacs...if a recession is 2 consecutive quarters of falling gross national product...when is it a depression?
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