By Richard E Walrath

The US subprime mortgage problem has spread all over the world.  If things don’t start to get better, they’re going to get worse–much worse.  There is no recession now, but it won’t take long to have one. 

That explains why the Federal Reserve approved a 1/2 percentage point cut on loans to banks.  The new discount rate will be 5.75, down from 6.25 percent.