The Federal Reserve meets tomorrow and the betting is on further rare reductions of .75% or even a full point drop. Lesser know is the surprise move by the Fed yesterday (Sunday!) lowering its lending rate to banks by a quarter percent, going from 3.50% to 3.25%.

Also yesterday, Bear Stearns, the 80+ year-old investment behemoth, tanked and was sold in a quickly approved deal to JP Morgan for $2 per share. This stock at one time near $160!

This activity is all related to the sub-prime problem which, until recently, looks to have spared Hawaii. It's gotten so large, however, that all consumer credit is apparently going to be in jeopardy, from credit card debt to auto loans. And, of course housing.

Until this financial meltdown filters through the economy, look for more stringent requirements for getting a loan, nationally and locally. The good news, however, is that rates will probably go lower to attract borrowers.