FOMC Cuts Fed-Funds Rate by 1/2 Point

At about 11:15 pacific this news came out:
"The Federal Reserve lowered its key federal-funds rate by one-half percentage point, to 3%, capping an unprecedented eight-day period in which officials slashed rates massively to ward off recession risks. Officials signaled they're willing to ease still further in coming weeks. But they also suggested that the recent cuts may be enough to keep the economy on track. The vote was 9-1; Dallas Fed President Richard Fisher dissented, preferring no rate change."
WSJ.com

If congress also approves raising the conforming loan limits that could really help the housing industry in 2008, by refinancing to low rate 'fixed' loans.

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Recession...

Everywhere we turn lately everyone is worried that we are headed into a recession. Here is the problem, by the time the government economists admit to it, we are already on the mend! The main problem with predicting a recession is that it all comes as a result of 'lagging indicators'. You know as well as I do, the government puts out statistics every month that immediately makes the stock market react and then a month later changes the previous months numbers to reflect something they forgot. How can we ever trust anything we read anymore?

I am going to cut to the chase! WE ARE ALREADY IN A RECESSION. Unemployment is going up, real inflation is up (just look at the price of gas, which is not included in the inflation stats) , consumer buying is down, car sales are down, and housing has slowed dramatically. Anybody agree with me?

Does a recession mean hard times? Not necessarily. Thankfully, the Fed has finally realized that they over did the interest rate hikes during the last two years and have to lower them even faster now. (Again, they raised rates based on "lagging inflation indicators'. I hope they learn their lesson this time.) We can look for rates to go down another full point during the next 6 month. Look for FED FUNDS rate to fall to about 3%.

Remember the old saying: " A recession is when a friend loses his job... A depression is when you lose your job"!