CBS Disagrees with Fed, Presents Worries about 'Credit Crunch'
Apparently being able to obtain a mortgage without a co-signer is more important to CBS than protecting against inflation.
“Had the fed lowered interest rates, 26-year old Amanda Michalko of Roosevelt Park, Mich. would have benefited from lower monthly mortgage payments – assuming she could get a mortgage,” said CBS correspondent Kelly Wallace on “Evening News” August 7.
Apparently being able to obtain a mortgage without a co-signer is more important to CBS than protecting against inflation.
“Had the fed lowered interest rates, 26-year old Amanda Michalko of Roosevelt Park, Mich. would have benefited from lower monthly mortgage payments – assuming she could get a mortgage,” said CBS correspondent Kelly Wallace on “Evening News” August 7.
The media have been consumed by this current “credit crunch,” a crisis some think is a little overblown. Instead of an even-handed treatment that looked at consumers’ role, Wallace pointed to what the government should do to make the situation better.
“[T]hat has led to mortgage defaults spiking to their highest level since 1986, with the hardest hit areas spread across the country. And yet, experts say the Fed is more concerned about holding down inflation than easing the credit crisis. That’s why it held the line on interest rates for now,” said Wallace.
CNBC’s Lawrence Kudlow had a different perspective on Fed Chairman Ben Bernanke’s decision not to lower the 5.25 percent federal funds rate.
“He [Bernanke] seems to be suggesting a Goldilocks [not too hot, not too cold] soft landing,” said Kudlow on August 7 "Kudlow & Company." “[A]s I read it, this is my interpretation, he is saying, yes – there is a low grade credit virus infection in the markets, but it’s no big deal and it seems to me he’s suggesting it’s gonna go away soon.”
In the end, Wallace’s complaint seemed silly. It turned out that Michalko was on track to get a mortgage despite the Federal Reserve’s action earlier that day.
“As for Amanda, she is close to getting a mortgage, but only after her dad co-signed her application,” said Wallace. Wallace added that a year ago, when lenders were less concerned about risk, Michalko would have been able to get a mortgage on her own.
