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Tuesday, 10/7/08 4:30 PM

Ben Bernanke spoke this afternoon to a group of business economists, his first public appearance since he testified at Congress last week. He reiterated the depth that the economy has sunk as the credit crisis continues to plague any growth. Going on he waved the rate cut flag saying, "in light of these developments, the Federal Reserve will need to consider whether the current stance of policy remains appropriate". Markets have bet a 100% chance of at least 50 basis points by the end of this month. Will lowering the FF rate help? Obviously it won't hurt, but unlikely to help as much as past rate cuts. This isn't a problem of lowering rates as much as unlocking the almost complete closure of credit here and around the world.

Bernanke once again reminded the economy will not likely rebound until well into 2009 at the earliest.His speech sent stocks down again on initial reactions to his economic outlook."The combination of the incoming data and recent financial developments suggests that the outlook for economic growth has worsened and that the downside risks to growth have increased''.

This morning the Fed announced it would begin paying interest on reserves held by the Fed from banks, and also would begin buying 3 month commercial paper to try and unlock one of the key lending rolls that has been frozen in the panic bank crisis.

The FOMC minutes were released to a huge yawn; the meeting was on Sept 16th, since then the bottom has almost fallen out.

Glen Hubbard at Columbia and Shiller at Yale have a thought; re-finance all positive equity mortgage loans to 5.25% to help revive the mortgage markets. Not likely to happen and we still are pondering the idea. If it did happen the re-fi business would boom. Everyone trying to come up with a solution. The mortgages now with negative equity total about $600B, not clear as to what to do with them. As if there isn't anything to think about these days.

Becoming more clear on the rest of the week; still not likely to see a rate cut from the Fed until next Monday. This weekend the G-7 meeting in Washington will get the financial leaders in one place to chew on some coordinated steps to unlock credit markets. We believe we are close; but close only matters in horseshoes and corn hole games. All over Europe meetings are under way and moves being taken to shore up the financial markets and salvage banks that teeter on failure----nothing universal though. Central banks and governments are running out of time now; can't keep waiting for another anvil to drop; time to get a coordinated attack to open up lending as well as the mortgage markets that for the most part are closed down except for the agencies and FHA. Stop talking, too much talk not enough action.

Is there anyone out there that wants to buy? Rumors, fear, panic and outlandish comparisons to the 1929 -1933 crash are rampant. Now isn't the time to sell its the time to buy; this isn't 1929 as some are trying to assert. The doom and gloomers are outnumbering the usual optimistic players, that implies we are close to a bottom of this mess. Don't fall into the Depression comparison; no one alive was involved and only know it from reading accounts. 25% unemployment, 7,000 banks failed; "I knew the Depression, and you sir are no Depression".

What this country is experiencing is a reaction to a series of financial failures by banks, lack of consumer savings, huge speculations in markets, leveraging, excessive credit spending both by consumers and many businesses, financial institutions that lost their bearings on the binge of making unreasonable bets, and excessive government spending by politicians looking to keep their jobs----it has been building for the last 20 years. It all culminated with the the final greed grab in the housing markets with junk being sucked up by banks and financial institutions that finally met their waterloo. You can ask for all the details, and in the years to come there will be volumes to read about how America's and the world's financial systems were taken to the brink, but the bottom line is that this mess has been coming along for years in many forms. What we face now wasn't started with the housing mess, it is the end of years of excesses.

The current down turn in pricing will allow them to buy homes in neighborhoods that were out of their reach 2 years ago.

Home Buying Grants 101

Home buying grants are a popular subject among home buyers. And why wouldn't they be? The very word "grant" suggests free money, and any home buyer could use free money.

But there's more to home buying grants than simply applying for the grant and getting the money. Home buying grants run the gamut from government-sponsored grants to private grants. The question is, where do you begin? How do know if you're qualified for a home buying grant? And if you are qualified, how do you apply for a home buying grant?

To help you learn more about grants for home buying, we've gathered a few resources:

Your Guide to Federal Grants

The Federal Government and Private Grant Foundations issue billions of dollars in grant money to a variety of groups each year. How would you like to obtain such a grant for home buying purposes? If you want to learn more about the many grants available and how you can use them for home buying purposes, I strongly recommend you visit this guide to federal grants. Go there now

Info on Grants for Buying a Home

Home Buying Grants from HUD
The Department of Housing and Urban Development (HUD) is a good source for information on home buying grants. Though HUD does not make grants directly to home buyers, they do "work through local governments and non-profit organizations to make financial assistance available."

Home Buying Grants in Your State
This is another great resource on the HUD website. It lists home buying grant programs (and low-income home buying programs) offered in various state. Just click your state's link to learn about home buying grants in your area.

Low-Income Home Buying Grants
This article on CNN Money does a decent job explaining the concept of low-income home buying, including home buying grants. This article will give you a solid understanding on what "home buying grant" means ... and what it doesn't mean.

Grants for Home Buying in Your State
Here's a trick you can use to find home buying grant information in your city and/or state. Using a major search engine like Google or Yahoo, enter the phrase "home buying grants" followed by the plus sign, followed by your city name (or state name). For example, if I wanted information on home buying grants in Texas, I would enter the following into Google:

home buying grants +texas

We hope this guide to home buying grants has helped you better understand what these grants can do for home buyers, and what they can't do.

Happy home buying!