I want to continue my thought process from yesterday's post.
One has to ask will the Fed's actions bring the speculators back to the housing market? The sad fact is that we built too many houses driven mostly by demand from speculators looking to flip. Unless we see those speculators come back we simply have too many houses. Too much supply and too little demand equals lower prices.
Will the Fed's actions somehow drive people to spend? If people are maxed out on their credit lines and can't service their debt payments now how does anything the Fed does entice these people to take on more debt that they can't service.
Now add in rising unemployment to the mix and I just don't see how anything the Fed does can cure any of the underlying problems. Ultimately all they are going to do is heap a crushing amount of inflation onto the backs of the consumer who is already struggling to survive.