In efforts to silence speculations that they are indeed re-thinking of another round of rate adjustments, the Federal Reserve has officially announced their reluctance to take part in any more rate cuts. Their previous moves to counter the effects of the sub-prime lending market have proven to be insufficient and the money they released as a Stimulus package also went done the drain. We might have kept people from losing their homes and keeping the roofs above their heads but the economy is still in bad shape. They have repeatedly been advised and asked to exact more control over the regulation of financial institutions in hopes of preventing further slides in the economy. Most government officials say the economy is just right but most Americans agree that the country is already in recession. They just don’t want to admit it but we are down and we hit hard many financial analysts say.

Legislators have again released a total of $200 billion in the form of financing for the embattled house markets to avoid further problems. As usual, they were greeted with delight by some and criticism by others. The two major players in the sub-prime mortgage market; Fannie Mae and Freddie Mac have already posted losses in the billions and the crisis is still not over. These two major players have long been at work in fixing their garbled financial records in hopes of making them easier to interpret. The infusion of money by the Federal Government was said to be aid to a failing market that has global implications and has the potential to ruin more lives than those who are affected locally.

The now bankrupt sub-prime lender has been found by courts to be at fault for not adopting standardized accounting procedures which could have allowed them to monitor the performance of the company. As far back as 2005, financial reports have been found to be false and heads are going to roll for sure. The company’s management has also been found to be at fault for the excessively aggressive pursuit of clients without proper risk-management analyses which could have also raised warning signs way before the crunch took place. The bottom line, they gave too many loans to too many people who couldn’t afford them. Even the independent auditor they employed failed to see the discrepancies in the company’s financial records allowing them to get through to the public without anyone knowing something was wrong.

Welcome to Irvine California which is nestled between LA and San Diego which most financial industry analysts see as ground-zero for the current housing market crisis. It used to be the headquarters of 18 sub-prime lenders with most of the leaders and biggest such as Option One and New Century. In the blink of an eye 2% or roughly 4,100 jobs were lost almost overnight when the crisis took them by surprise. People in the area still can’t believe the speed at which the town went from boom to bust and many are finding it hard to deal with the problem. Hang on people; it’s not the end of the world.

The Chief of the US Department of Housing and Urban Development Secretary Alphonso Jackson steps down from his office due to pressure from Congress amidst rumors of an ethics committee investigation. He is to leave office officially on the 28th. of April which is seen by some as a sure sign of the White House’s search for a solution to the current housing market problems that is leaving people out of their homes. He has been accused of ethics violations which involves favoritism in the selection of HUD contractors. One case in particular has his department (when Jackson was still a construction manager during the Katrina Disaster rebuilding period) receiving more than $300,000 along with a friend.

Democrats are pushing for swift actions such as assistance to homeowners so they can keep their homes. The more people lose their homes, the more the economy dips. The current housing market status is dire indeed with major players in the game cutting their losses by ceasing all mortgage related functions till the market stabilizes enough for them. Profits may take some time to rebound due to the huge deficit they have to cover before they can start earning again. People are wary, the industry is wary and the government is helpless for they cannot just keep on injecting and injecting money into the economy which is failing on several fronts.

Another casualty of the housing market’s slowdown is KB Housing which is getting a sharp decline in share values according to JPM Security analysts. The housing firm lost almost 270 billion US Dollars that translates to something around $ 3.47 per share which lowered the share values of the firm sending it into the downward spin it is currently in. Excess houses translate to sleeping investments that should have otherwise been turned back into cash for re-injection into the company. There were so many factors that contributed to the housing crash that companies were just not able to cope and recover enough to stay in business. Insurance Carriers have already packed up their bags and left problem areas leaving unsold houses unattractive for they couldn’t be insured. This event further dismayed possible home buyers getting them to stand down and wait for more favorable conditions.