This is directly from the Fed website (thanks NF).Today, the Federal Reserve’s duties fall into four general areas: . • conducting the nation’s monetary policy by inf luencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates . • supervising and regulating banking institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers . • maintaining the stability of the financial system and containing systemic risk that may arise in financial markets . • providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation’s payments system Note: Responsibilites do not fall under any one category nor are they weighted.Protecting the credit rights of consumers...I am a young consumer and I do not think my credit rights have been protected. I say the prior because of the following: My household income I thought was good. I am young and as most of you know I am trying to purchase a house with my wife so I got the pencil out to see exactly what I could afford. Interest rates are low...however there is a caveat...I work and live in Cali. Guess what... there are very few homes that fall into the Freddie and Fannnie terms, most fall under the Jumbo Loan terms which are increasing (approximately 1 point higher than the 10-year yield). Most homes out in the San Fernando /ConejoValley (where I currently rent) are around $700K. Iwill have an estimated annual property tax of around 7K. At the current interest rates I will be spending more than $4,500 per month. Wonder why homes are not selling? I can not afford it and I make over $100K annually (my wife makes over 60K). So I live in my two bedroom apartment and get taxed up the ying-yang (like that term). Please don't tell me I should go ahead and borrow the money up front so I can realize the tax benefits later because that option has been already analyzed, exhausted and is not feasible.The Fed should have protected the consumers in 2003 - 04 when the different banking institutions started offering $0 down, 4 1/2 % interest, or interest only loans to people who had a 500 FICO score.ML
The Fed doesn't care about consumers. That's a bunch of hogwash. Consumers are going to be hit hard by the falling dollar the Fed is creating. It will cause the cost of things consumers need, like food and gasoline, to keep rising. The Fed can keep pumping money into the system but it won't make buying a house easier in the bubble markets like California. The problem in California is not a credit problem but an affordability (price) problem. Bernanke can do whatever he wants, but until prices come down in CA, real estate's not moving and inventories will continue to bloat.
Hey, Picpoule, I assume you know that the picpoul grape is used to create some of the most excellent white quaffing wines of Languedoc!My personal fav is the Picpoul de Pinet produced by La Cave les Costieres de Pomerols, which, despite the weak dollar, is still available around here for $5.99 a bottle!Hey, if we can't afford a house, we might as well drink ...and hedge our dollar risk, of course!But you know, this brings up a problem I observed the last time the dollar really went in the toilet back in the 1970's. At that time it was the Japanese who were buying Pebble Beach and were soon going to own America.At that time, U.S. autos were really crap, but they could have gained market share by cutting prices big time as their competitors were squeezed by their rising currancies. Instead, the response of U.S. industries was "Oh goodie! Our competitor's prices are rising so let's raise ours too!" Things didn't get straightened out until Paul Volker slapped some sense into people.
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