Martin D. Weiss, Ph. D. and Mike Larson Take a Closer Look atThe Feds Rate 1/4 Cut In Money and Markets

Martin D. Weiss, Ph. D. and Mike Larson take a closer look at the housing bust and it's relation to the recent rate cut by the Federal Reserve. In this issue of Money and Markets, both Dr. Weiss and Mr. Larson examine the London Interbank Offered Rate.

Jupiter, Fla. (PRWEB) December 13, 2007 -- Martin D. Weiss, Ph. D. and Mike Larson take a closer look at the housing bust and it's relation to the recent rate cut by the Federal Reserve. Dr. Weiss and Mr. Larson examine the London Interbank Offered Rate.

The U.S. economy is still being dragged down by the housing bust, the mortgage meltdown and the spreading credit crunch. And the meager quarter-point cut in rates on December 11 will barely make a dent in the poor economical conditions.

Despite all the Fed's rate cutting over the past few months, the key interest rate the Fed does not control, the London Interbank Offered Rate (LIBOR), is striking out on a different path.

Many years ago, this might not have mattered very much. LIBOR was largely irrelevant to American borrowers. However, LIBOR is now the rate that drives most adjustable rate mortgages in the United States. LIBOR is the rate that sets the standard for many corporate loans, a big chunk of the interbank borrowing by U.S. banks, even local government borrowing. LIBOR is easily the single most important interest rate in the world.

But LIBOR is not controlled by the Federal Reserve. It's the rate international banks charge each other on short-term loans.

Until August, the LIBOR market was mostly in lock step with the U.S. fed funds rate. But then, when the subprime crisis burst onto the scene, confidence shifted to fear and the LIBOR rate surged.

Despite the Fed's efforts to calm the crisis, the LIBOR market has slashed its umbilical cord to Fed-controlled interest rates, broken off on a different path and set the stage for one of the greatest financial battles of the century.

"The spread between the LIBOR rate and the fed funds rate is the proof. This spread was virtually flat until the summer. Then it went to the upside and has been on its own upward path since," states Dr. Weiss.

To read this issue online, please visit:
http://www.moneyandmarkets.com/Issues.aspx?NewsletterEntryId=1263

About MARTIN WEISS, MIKE LARSON & MONEY AND MARKETS    
Martin D. Weiss, Ph.D., founder and president of Weiss Research, Inc. and a leading advocate for investor safety, is a nationally recognized expert on domestic and international financial markets. With more than 35 years of experience, including many years in Latin America and Asia, Dr. Weiss has helped empower millions of investors to make better financial decisions through his monthly Safe Money Report and daily Money and Markets.

Dr. Weiss holds a bachelor's degree from New York University, a Ph.D. from Columbia University and is fluent in eight European and Asian languages.

Mike Larson joined the company in 2001, and has more than 10 years of experience researching and writing about personal finance, investing, and the housing and mortgage industry. In 2003, Mr. Larson was named associate editor of the company's monthly Safe Money Report. In this role, he is responsible for writing and editing as well as analyzing trading opportunities for clients. Mr. Larson is also a regular contributor to the company's daily e-letter, Money and Markets.

Before joining Weiss Research, Mr. Larson was a personal finance reporter for Bankrate.com, where he wrote extensively on mortgage lending, banking, residential real estate, and Federal Reserve Board policy. His responsibilities included analyzing economic data and interest rate trends for a weekly column and developing rate forecasts for a regular index feature. Previously, Mr. Larson held positions at Bloomberg News and the Boston Herald.

Mr. Larson holds B.A. and B.S. degrees from Boston University.

Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.

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