The Federal Reserve Banks are not private. Look at your money. Each bill has a Federal Reserve Bank named on it, for instance, on the face of the 1 dollar bill on the left side is a black insignia with a letter in the middle and the name of a regional federal reserve bank printed around within the insignia. In this region, the closest Federal Reserve Bank is in Chicago denoted by the letter G and the number 7 which is printed near each of the 4 corners. Most of the currency circulated around here bears those markings. Other regional banks have different letters and numbers. Each one has a Governor, appointed by the president and confirmed by Congress, comprising the Board of Governors, with a Chairman who is likewise appointed and confirmed.

Ryan's comments run a bit hollow for me. The past 15 years have been a boon to conservative "greed is good" types. Now indiviuals are starting to wake up to the fact the Washington and more importantly The Federal Reserve, have complete control over the economy. You all do know that The Fed is a collection of private banks...oh, and we don't know exactly who they are. Wakey Wakey mr. alex.

The extremely weak dollar is the root cause of inflation and also high gas prices. The Fed bailout of bad mortgages is primarily rewarding the banking system that +refused+ to self-regulate. Once upon a time, you needed X% of the value of a home in order to obtain a mortgage. *** GREEDY *** people who bought homes expecting the value to always increase are also at the root cause of this current mess. And the taxpayers will end up paying for this. Meanwhile we have bridges in disrepair, schools that are underfunded, etc. Pathetic. So much for our "MBA President".

"You are in essence paying the price for irresponsible people who allowed sub prime mortages, which made them rich."
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Or maybe the irresponsible politicians who bailed them out?

Another problem here is home prices in the west and north east. MSN.com had a good feature today, with picutres and descriptions of what a $220,000 house is in different markets around the country. We haven't seen this housing mess as much here in the midwest as they have out west and in the northeast. It was very interesting to see the type of house you can get in Iowa vs. San Diego for the same price.

Paul Ryan is correct. Rate cuts only prolong the agony which MUST finally come at some point. If anybody thinks rates cuts are good, think about that when you're filling your gas tank. Since oil is tied to dollars, and dollars are becoming worthless due to so many of them being printed by the Feds, you get to pay the hidden tax of higher prices. You are in essence paying the price for irresponsible people who allowed sub prime mortages, which made them rich.

Hannah,
You are totally right. Banks and brokers knew that there was no oversight at the federal level and were totally irresponsible in lending to people who could not afford it. There are certainly cases like the ones you mentioned where people really abused the lax rules and got into houses with no intention of making the payments. But I also know people who really got scammed and have tried to refinance but are turned down because they don't have any equity and those 100% loans are just not available any more. I'm all for helping people who have gotten trapped and just need to refinance to a reasonable rate, but don't want to see a total bail-out of the banks or the irresponsible homeowners who knew going into it that they could never afford their mortgage.

Hannah,
People got the ARM's with the understanding that they would refinance to a fixed or another ARM when their rates went up. They assumed that the value of their house would continue to rise, giving them more equity when they went to refinance so they could get a better rate. BUT the housing markets crashed causing home values to drop or stagnate AND the loans are not as easy to get now. So many people are stuck with the ARM and the rising rates and CANNOT refinance because they don't have the equity or the easy access to mortgages they were planning on.

The problem with raising rates is that there is a lag between the rate cut and seeing the effect in the economy. Some estimates are that the lag is as much as 12 months. Continuing rate cuts could actually hurt us.

No kidding they should be reasing rates to try to kill inflation. Even me a general joe nobody knows that the only way to kill inflation is to raise rates

The reason that people are having a harder time re-financiang their mortgages now is because credit requirements have been tightened (a reaction to the high default rates). The other issue with ARM loans is that a lot of the people didn't fully understand the type of loan they were getting into. Proof of this is the number of class-action lawsuits that are out there against the mortgage companies who are being accused of "predatory" lending. There are so many factors surrounding the "Mortgage Crisis". It is best to become educated on them before making any value judgements about the situation.