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Study of Great Depression Shows Intervention Postpones Foreclosures, But Causes Mortgage Rates to Spike
It was January 1934. The Great Depression was five years old – but still had another five years to run.
The carnage was horrific: From 1929 to 1934, U.S. personal income plunged 44%, real output nosedived 30% and the unemployment rate soared to 25% of the American labor force.
With the nation’s economic landscape laid to waste, it should be no surprise that home foreclosures were soaring, too: Residential real-estate foreclosures doubled between 1926 and 1929 – before the Great Depression actually began. According to a new study by the Federal Reserve Bank of St. Louis, the foreclosure rate jumped from 3.6…
6Nov2008 | Money Morning | Comments Off | ContinuedTop Federal Reserve Officials Predict Weak Second Half; Warn Growth May Not Return Until 2010
Two top U.S. Federal Reserve officials on Friday predicted a weak second half for the U.S. economy, warning that strong U.S. growth may not return until 2010.
Atlanta Federal Reserve Bank President Dennis P. Lockhart and Chicago Fed Bank President Charles L. Evans both said the U.S. central bank is in no hurry to start raising rates while the American economy is sputtering badly because of an ongoing global financial crisis, a sagging housing market and inflationary pressures caused by a yearlong run-up in food-and-energy prices.
Indeed, Lockhart even said he wouldn’t rule out actually cutting interest rates if economic circumstances warranted…
18Aug2008 | Money Morning | Comments Off | Continued
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