Ford chief urges Fed action (Emaciated corpses litter streets!)

http://money.cnn.com/2007/08/24/news/companies/ford_fed/index.htm?postversion=2007082406 ^ | 8-24-07

[Hydroshock]

NEW YORK (CNNMoney.com) -- Ford CEO Alan Mulally became the latest high-profile business executive to suggest that the Federal Reserve needs to cut interest rates, according to a report published Friday.

Noting that credit conditions were posing a "big headwind" to the company's turnaround plan, Mulally told the Financial Times he is concerned about the state of the larger economy.

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"It is a really important job to manage inflation and economic growth [but] focusing on economic growth appears to be a really important priority now," Mulally told the paper, hinting that the central bank needs to take action.

The Federal Reserve, which works to keep inflation in check and promote economic growth, has resisted calls to lower the federal funds rate from its current level of 5.25 percent.

The key interest rate, which has remained unchanged since June 2006, directly impacts consumer loan rates on everything from credit cards to auto loans.

[Marysecretary]

Exactly right!

[Marysecretary]

If people would stop trying to buy five bedroom homes with five bathrooms, a ‘bonus’ room, 15 foot high ceilings, etc. costing half a mil, maybe they wouldn’t be losing them. Whatever happened to common sense? You don’t need a bathroom the size of a living room, or a master suite that takes up half the space of the whole house. It’s gotten ridiculous. No wonder people can’t pay up.

[Hydroshock]

I have always viewed the ultimate status symbol to be debt free. And am working on it.

[stockstrader]

This should read,,,

"FED CHIEF URGES FORD ACTION" instead.

How about if Bernanke urges Ford to do more to produce a better product instead of the other way around?

[RockinRight]

Or here, where $400,000 gets you a small 3 bedroom single family home.

[FightThePower!]

The fed needs to protect the dollar. If they cut rates too much, the dollar falls and we have to raise interest rates on T-Bills for China, Japan and Europe to buy them. I think that’s the Fed’s main concern, they just don’t want to say it.

[FightThePower!]

Toddster. The Todddddddsterrrrrrrrr. PhD in Economics I presume?

[budwiesest]

I’m going to listen to AM radio this Sunday afternoon to get the answers from Bob Brinker(?) ;^)

[stockstrader]

It went 'out the window' (no pun intended) when the government started ENCOURAGING and REWARDING irresponsible behavior.

"Buy the biggest, most expensive home you possibly can,,,,using as little money as you can,,,using any and all 'creative financing' you can ,,,,extend yourself above your means financially,,,and let rising home prices make you TAX FREE MONEY"! Ever seen the "Stanley Johnson commercial"?

Granted the goal is increased homeownership, but,,,,

What is the overriding social or economic need to allow a tax-free capital gain of $500,000, EVERY TWO YEARS???? (So why not go in way over your head?)

What is the overriding social or economic need to allow up to ONE MILLION DOLLARS in deductible mortgage interest?

What is the overriding social or economic need to allow home equity loans (which in many cases are simply a transfer of debt from your credit cards,,,,ever seen a DITECH commercial?..lol) to be tax deductible?

What is the overriding economic and social need to allow mortgage interest tax deductibility on TWO HOMES??????

With the government ENCOURAGING and REWARDING irresponsible behaviour--the 'common sense' thing to do is take advantage of it!!! It's win/win,,,,if prices keep going up, you win big (tax free, even),,,,if they go down, you ask the government to bail you out!

[Iwo Jima]

Hindering economic growth is inflationary. The funds rate needs to be brought down to market levels.

This makes no sense. Artificially boosting economic growth is inflationary.

[stockstrader]

I accidently left it off the beginning of my last post, but that post was a response to your question,

"Whatever happened to common sense"?

[Iwo Jima]

Is it really going to take multiple posts to get it into your head that inflation is dead such that DEflation is rearing its ugly head, instead?! You act as though economics haven’t been explained to you.

Arrogant, aren't you? Do you really need to be so rude to disagree with someone?

Inflation is not dead. I see it all around me, from food, clothing, office supplies, gas, insurance, I could go on and on. Just about everything that I buy.

Housing has been going up from for some years now, falsely inflated by too low interest rates and stupid lending practices.

I can see that all these bad mortgages can lead to deflation for a time, but that is just the market cleansing itself of all the malinvestments. Propping them up with more inflation is the last thing that the markets need.

While all of the lunacy of the past few years was going on in the housing market, were you cheering it on or warning that it would have to come to a bad end?

[djf]

That’s not true!

We were enlightened in post #52 that it is foreign money that caused the problem!

See??!!

Learn something new every day!

:-)

[Iwo Jima]

The things that you mentioned are not worse than inflation. There have been mountains of malinvestments made in housing over the past few years. These will have to work themselves out. That’s the way the free market works. The loans should never have been made, but too low interest rates and bad lending practices got us into this situation.

[Toddsterpatriot]

Artificially boosting economic growth is inflationary.

Allowing the market to set interest rates is artificially boosting the economy? You goldbugs sure are funny!

[Iwo Jima]

Dude, we don’t have inflation! Why do you keep repeating nonsense? You act as though you are married to inflation.

You act as though you are married to rudeness and arrogance.

I think that the poster is rightfully concerned about inflation, as is the federal reserve.

[VOA]

Ford CEO Alan Mulally became the latest high-profile business executive
to suggest that the Federal Reserve needs to cut interest rates

So we can buy Ford sedans of questionable durability?

(Hey, I hope Ford completes and does a turn-around of their
North American sedans. But, after decades of building good sedans
in Europe and Australia...they may just be too late to overcome their
image of CRAP cars here in the USA.)

[Iwo Jima]

I don't see that interest rates are all that high.

I agree. And I just don't get the venom spewed and posters who see that the malinvestments in housing are just going to have to work themselves out.

Are the rude ones all mortgage brokers who are going to lose their shirts unless the Fed bails them out with inflation?

[Iwo Jima]

If by “deflation” you means greatly lowered housing prices, yes, we need that and we need it now. The malinvesment in housing over the last few years needs to be wrung out of the system. Inflation is not the answer to the housing industries problems. If the stock market plunges as a result, well, that’s the way the market works.

[Hydroshock]

This guy and a few others are dependent on the ponzi scheme to keep going for their bread and butter. That is why they are screaming so hard.