How Bond Traders Hold Us Back

Why aren't mortage rates falling? Because one group of Wall Streeters insists that things aren't getting worse

All year we've been hearing about how aggressively almighty Alan Greenspan is cutting interest rates. Just hold on, the logic goes. Soon big-ticket items that folks often finance, from refrigerators to cars, will be so affordable that we won't be able to resist digging deeper into debt to spend. That will lift the economy, end a blistering surge in layoffs, pick up corporate profits, ignite the stock market and restore trillions of dollars of lost wealth.

It is a magic formula, and it has worked in the past. There is just one catch: the interest rates that really matter would have...

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