New Fed’ Rate - Implications for Boating

[GordMay]

The Fed' cut the federal funds rate* to 4.75 percent, the first rate cut in more than four years. How will this affect you?

Excerpted from:
Will it help the boating industry? ~ JoAnn W. Goddard (Trade Only Today)
Trade Only Today – The Boating Business Newspaper Online | Articles | Will it help the boating industry?

"The Federal Reserve’s move yesterday to slash its benchmark interest rate* by half a point to 4.75 bolstered stock prices and helped assuage concerns about the subprime crisis and the shaky economy.

Consumers can hope for lower rates on adjustable rates credit cards and loans. The marine industry could benefit as well, although time will tell if the central bank’s move will have a ripple effect on sluggish boat sales ..."

* The Federal Funds rate is the benchmark overnight lending rate targeted by the Federal Reserve. Fed officials use the fed funds rate to attempt to keep inflation in their targeted range of 1% to 2%.

[Pura Vida]

There was a discussion of this subject on the radio yesterday. One of the brokers interviewed pointed out that a lot of boat buyers were financing their boats using their homes as collateral. I would hope that someone buying a $100,000 boat is smart enough not to get into an unconventional mortgage like those affecting the subprime market but some spill over might be expected. I'm sure that a lot of buyers use their homes because it is easier to finance an old house than it is an old boat. For years Texas law did not allow for certain types of home equity borrowing but that changed in the last decade. I suspect somewhere, someone is loosing their trailer house because of their bass boat.

[GordMay]

Originally Posted by Pura Vida

... I suspect somewhere, someone is loosing their trailer house because of their bass boat.

Beats losing it over a divorce.

Q: What do a tornado, a hurricane and a redneck divorce have in common?
A: In the end, some poor sod is going to loose a house trailer.

[Pura Vida]

Ain't it true... and so many good stories begins with "Bubba, hold my beer, I gotta idea..."