On March 11, Federal Reserve announced a 200 Billion dollars’ infusion into the mortgage market to buy back the bad loans and mortgage backed securities.//
Wall Street hiked 417 points that afternoon.//
The banks now have 28 days to turn their fate around:
The banks can now borrow at the fed funds rate more than what their reserves. At the same time, using the borrowed money to generate new loans, cover or renew the bad ones. //
Hopefully, some of them will stay out of this credit crunch crisis.//
Gold went up to $1,000 an ounce on March 13.//
What about the consumers? //
Things always have two side:
The good side: Mortgage interest rates are attractive again. Hopefully more new rates will be announced by banks next week for buyers to shop in the housing market for this new season and in our highly priced housing area. Hey, haven’t you heard they raised the new conforming loan standard and this is ONLY good till December 31, 2008? (Read my Feb 17, 2008 BLOG)//

The Bad side: Your dollars will be harder at work. You will have to spend more to cover your usual needs.//

In San Francisco, one gallon of gas cost is over $4 this week.//
The End.


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