Nov 08
3
Quick Poll: Rate Cuts - Good Or Bad News?
- All talk is of a hefty rate cut this week – a half point at least, and possibly even a full one per cent.
But thus far lenders have been reluctant to pass on the cuts to consumers. So our question for today is:
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Use the comment box below to explain your answer.
Related Tags: General
Posted by 
Lower mortgage and loan rates = another fix for the addict — we’ll feel better for a while but in the long term it makes things worse (and like serious drug abuse, credit abuse damages future generations). Enabling more cheap borrowing now will simply result in even more debt-defaults and an even bigger bust down the line.
H Thomas seems happy to talk down the economy, we’ve all been bad borrowers and musn’t enjoy cheaper credit! Cheaper borrowing will make little difference to house prices if the banks are rationing mortgage funds and constraining demand. The people who would benefit from lower interest rates are those with mortgages already, who are paying high rates or are trapped into expensive re-mortgages. If we want to reduce mortgage defaults then the cost of borrowing needs to be passed on. Not passing on rate cuts means that the banks profit by the difference instead, and are skimming of money, which should be ours, to make us for their huge losses on bad money market investments.
Reduce rates to ease the burden on existing howeowners pls. Ethically the banks have an obligation to pass on the cut but who say’s they are ethical? Usury will always end up in tears and now we are seeing it come out in the wash. In ancient times, moneylenders would lend money to people and societies they wanted to destroy by crippling them with debt. I agree with Mr Thomas’ analogy of comparing interest to drugs. The government has an obligation to fully regulate banks and put a cap on interest that can be charged. What is shocking is money lenders charge several hunded percent interest and there is no regulation to cap this and protect the most vulnerable people to loan sharks. As this crisis has shown and Mr Greenspan has admitted his theory of self regulatinmg markets has a major flaw as self interest and greed has destroyed the lives of many and more to come.