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The Federal Reserve Board made the day's major economic news as it lowered short-term interest rates to 1%. ABC's Betsy Stark (no link) counted nine cuts in interest rates in the last 13 months in order to cure the problem of "homes that are not selling; consumers that are not buying; and businesses handing out more pink slips than jobs." On CBS, Anthony Mason showed us "a small army of distressed homeowners" protesting outside FannieMae's headquarters in Washington. He pointed out that interest rates on 30-year home mortgages are rising even as the short-term cost of money is being slashed. NBC's Christina Brown consulted personal financial planners, who recommended that every household's rainy day fund should have enough cash set aside to survive for three months in the event of a layoff: 80% of middle class families fail to meet that standard, she reported--and presumably 100% of poor households too, although Brown did not mention them.
Then there is the automobile industry. General Motors and Chrysler will both be bankrupt by next summer at the rate they are burning cash, CBS' Cynthia Bowers told us. They have gone to Washington to apply for a $10bn federal bailout to help them merge and stay in business. Detroit is "desperate to stay afloat."
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