Rates Stay The Same - Jim Cramer Goes Nuts

The U.S. Fed unanimously decided to keep the federal funds rate (the rate that impacts short-term rates including credit cards and business loans) at 5.25% yesterday focusing on inflation as the primary issue at hand.

This comes at a time where conditions are worsening across the markets: the recent blows to the stock market, downturn in the housing market, and increasingly tightening credit markets. "Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters, supported by solid growth in employment and incomes and a robust global economy'' as stated by the central bank.

The unchanged rate announcement at least offers some reassurance that the Fed does not see signs of a major crisis that requires direct intervention.

Nevertheless, as more and more mortgage lenders close their doors and credit policies become tighter, homebuyers are feeling the crunch. The loosey-goosey days of getting a mortgage are long gone. Nowadays, don't expect a mortgage broker to take you seriously if you're asking for a no income verification loan or want 100% financing (unless you have flawless credit history and great credit score). And who knows what's in store as the mortgage industry keeps sliding?

But don't panic! Some speculators are shrugging off the downturn of the mortgage and home builder industries as though they are not really "big industries". Here's a clip of Jim Cramer's argument that I came across on housingdoom.com:

More recently Cramer had a meltdown on CNBC claiming that Bernake is "an Academic" and they should have cut the rates. Take a look:

Labels: federal reserve, housing market, interest rates

posted by B. Samii @ 4:14 AM