Housing Crisis - Just what are the banks doing?

Here is an interesting article from CNBC - Pimco's Gross on Mortgages.

The Federal Reserve's aggressive interest-rate cuts have failed to push mortgage rates lower and thus have done little to help the battered U.S. housing market, said Bill Gross, chief investment officer at Pimco, the world's largest bond fund.

The Federal Reserve is basically giving away money to banks and yet the mortgages rates have not changed - so the banks are getting a larger piece of the pie. But remember this is helping the consumers - not the start of a bail-out for the banks. Let's look at this -

Gross said Fannie 30-year mortgage rate stands at 5-3/4 percent, which is the same level as in September when the Fed began lowering rates dramatically.

Lending to banks have been drastically lowered but that is not transferring to the consumer. Great job!!! And this is just the beginning...

On a national basis, home prices are down roughly 7-8 percent but Gross still expects a 20 percent decline in total.

Just a nice way to wake up on a pleasant Monday morning.