"It's the economy, stupid" was James Carville's famous message for the 1992 Clinton campaign. Now after another failed Republican Administration it's the buzzword again and for a different Clinton. Or Obama or Edwards. Worries about the economy have been gradually rising in polling about 2008 issues. Stock market dives, bankruptcies, continued foreclosures and all continue wreaking economic havoc and this is becoming the central issue for 2008.
When the economy tanks it always trumps every other issue barring a world war. The Federal Reserve says it will decrease interest rates in response but I doubt this will have much effect. Money left the mortgage market in droves due to the lack of regulation and wisdom. This tightened credit because there simply isn't enough money available to lend. Lowering rates will exacerbate that not help. Investors fled mortgages for safer havens like bonds. Decreased returns won't lure them back.
Comments