Rates are still going up, Mr. Bernanke

As stated in my last post, the dropping of the Fed Funds rate by 50 basis points, has thus far, after nearly two days, driven the following rates higher:

	Price Chg	Yield (%)
1-Month Bill*	-0/32	3.527
3-Month Bill*	-3/32	3.818
6-Month Bill*	1/32	4.118
2-Year Note*	-6/32	4.113
3-Year Note*	-10/32	4.171
5-Year Note*	-21/32	4.364
10-Year Note*	-1 8/32	4.700
30-Year Bond*	-2 2/32	4.969

Only the 6 month bill dropped. The result for the homeowners facing adjustable rate mortgage resets??? Well, I have highlighted them for you below in pretty colors. The green numbers are the rates for the haves:, institutional borrowers from the government (commercial and investment banks), prime consumer borrowers from the banks with excellent credit ratings (and usually lots of money) and commercial borrowers from the banks and credit instruments between banks (again, usually with money). The red numbers are the folk who Mr. Bernanke and the current administration are suppose to be helping with the rate cut. These are the people who are most likely to face potential eviction due to over leverage in sub prime and Alt-A loans. The yellow is Grandma's savings account. Now, green goes down (richer folk get a little richer), red goes up (poorer folk get a lot poorer), Grandma Get's a few less pennies as well.

Consumer Money Rates

	YIELD/RATE (%)		52-WEEK		CHANGE IN PCT. PTS
Interest Rate	Last	Wk Ago	High	Low	52-Wk	3-Yr
Federal-funds rate target	4.75	5.25	5.25	4.75	-0.50	3.25
Prime rate*	7.75	8.25	8.25	7.75	-0.50	3.25
Libor, 3-month	5.21	5.69	5.73	5.21	-0.18	3.29
Money market, annual yield	3.84	3.84	3.90	3.48	0.24	2.35
Five-year CD, annual yield	4.93	4.96	5.10	4.80	-0.03	0.88
30-year mortgage, fixed	6.06	6.05	6.57	5.67	0.06	0.64
15-year mortgage, fixed	5.74	5.72	6.22	5.46	0.03	0.88
Jumbo mortgages, $417,000-plus	7.13	7.07	7.38	6.01	0.84	1.40
Five-year adj mortgage (ARM)	6.19	6.08	6.36	5.53	0.40	1.72
New-car loan, 48-month	6.92	6.92	7.03	6.85	-0.02	1.04
Home-equity loan, $30,000	7.32	7.33	7.93	6.66	0.03	3.87
* Base rate posted by 75% of the nation's largest banks.
Source: Reuters, WSJ Market Data Group, Bankrate.com

Bernanke says he cut rate to keep the housing contagion from seeping into the broader economy. Well, it already has. By dropping rates, he has raised mortgage rates. The home builders are in a worst bind, not better. Nobody still wants to buy Countrywide's BS loan portfolio, and anybody with an ARM has higher rates now. Savings rates have been lowered, the dollar is shot to hell, the market psychology is back to negative after only two days (good for my short positions, though - thanks for having the garbage stocks rally enough for me to get in nice and high to ride them back down), the rest of the world is afraid of our inflation prospects.

Oh, yeah! Why did you make that cut again???