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The Feds keep doing the same thing and expecting different results. Cutting the interest rates doesn't mean the banks or cc companies are passing those lower rates on to the consumer, but it does mean the saver isn't earning squat on his savings or cds. Not much incentive to save. But no one's spending either. We're at a stalemate.
I'd love to see more of that peer-to-peer lending. Nothing is stopping anybody from trying to start a competitive business in this pessimistic national mood except money infusion. If people need loans, let's see some creative ways to get the money to people. Are credit unions good for that?
I'm a lender at Propser, but all lending has come to a halt. Propser is registering with SEC and our quiet period might very well last for several months. In any event, P2P lending is extremely risky, so it's not for everyone.
My thoughts are the next housing boom is in the works.
Never going to happen, mortgage rates are starting to take off like a rocket !!!!! I am scrambling right now to refi one of my properties. Missed the lower rates already... Gonna get worse from here on out.
Yeah, I heard that prosper.com was operating some kind of securities business according to Johnny Law. All of a sudden they get scrutinized. Hmmmm? Wouldn't you love to be able to use your money to make money without hassles?
The low rates contributed to the mess we're in now. But we now we have a different set of circumstances and the opportunity for low rates to provide any serious stimulation is facing the end of the road unless we can orchestrate Fed Funds rates at -1%, -2% or some other type of creative accounting. The low rates offered in 2004 created a dangerous stimulation of irresponsible borrowing and speculation with cheap money. It failed to generate any serious investment in the production of goods needed for the 21st century.
Good businesses have always found ways to derive a good return on capital when they made something of value that people actually needed to improve their lives. The Fed offering low Fed Funds rates has done nothing to promote this type of development.
On top of that, the low interest rates in general have discouraged Americans from saving. Instead we have seen trillions of dollars diverted into equities where we have witnessed substantially higher rates of risk with negative returns when adjusted for inflation over the past 8 years.
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