In a move aimed at quelling fears of a looming recession, the Federal Open Market Committee took the country’s teetering monetary affairs seriously two weeks ago and lowered the short term federal funds rate another quarter of a percentage point to 4.5 percent. This latest move represents the second such lowering of rates by the Federal Reserve’s Board of Governors in as many meetings.

The move was seen as necessary to maintain a delicate balance between managing inflation and fostering economic growth. The rationale given for the move was the intensification of what the Fed continues to refer to as the nation’s housing “correction” which, by the way, has been ongoing for the better part of 2007.

The problem is, many industry analysts are starting to come around to the idea that this “correction” may not bottom out until either year’s end 2008 or sometime in 2009. The estimated end date seems to be stretching out longer and longer as time goes on.

“Today’s action, combined with the policy action taken in September, should help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and promote moderate growth over time,” the FOMC said in a statement published October 31.

Forestalling? How about rising energy costs? Lenders reporting billion dollar losses in Q3 and laying off thousands of employees. Home builders giving out automobiles as incentives to buy a new home. The increase in public real estate auctions. And just this week General Motors reported a multi-billion loss for the quarter just ended! Then there’s the nation’s retail industry, advertising sales events at after-Thanksgiving sales price levels the weekend after Halloween!!!

So what is the Fed forestalling? This is starting to sound like a hurting economy. We’re not back to the early 1990s yet, but we could get there fast if things keep going the way they are.

The good news for real estate investors and anyone else looking to buy real estate at below market prices anyway, is it looks like the inventory of available foreclosure properties is going to be around for quite a while longer.