Do We Need This Bailout

I am not a George Bush Fan, however on Wed night he gave a compelling speech. I believe that President Bush made a sincere plea to Americans and Washington Politicians to pass some sort of legislation that will help begin to restart this economy. That restart is in the form of a financial bailout up to $700 Billion dollars. This money would be used to purchase mortgage back securities and other credit derivatives that are grappling and seize the books of financial institutions both large and small. The theory is that if these securities were transferred off the books, that would begin to free up liquidity for banks to begin issuing new loans, refinancing existing loans, and hopefully restart the extension of credit to various entities. Question, how much is required, who will manage it, what risk will the taxpayer incur, will it be enough, and what does the general public get out of it? These questions and more are reasons why the bailout has yet to be approved.

Now I will not be able to provide the exact answers to these questions because no one in the general public has seen the full scope of the plan as of yet, but I will offer some of my intellectual opinions. Let's attack the first question which is "How Much Is Required"...$700 Billion dollars is a large number. That is nearly 2xs the size of Wal-Mart's gross annual sales , but is this enough? Is this too much? I believe that a line of credit up to $1 trillion dollars should be extended however maybe only $300 Billion should be utilized right now to begin bailing out Washington Mutual, Wells Fargo, Community and Regional Banks. When it comes to the large institutions such as Wachovia, Bank of America and JP MorganChase for example extensions of credit should used since they are well capitalized however their negative, bad subprime debt could be sold to the government. The way it should be controlled is that good debt could be purchase at no less than 40 cents on the dollar and no more than 60 cents on the dollar. Bad, defaulted or pending default debt should be sold to the government at no less than 10 cents on the dollar to no more than 30 cents on the dollar. Is this extremely low, yes, however, if you want to be bailed out and get it off the books why not sell it to the taxpayers for a discount? From there the banks can receive an loan from the Fed to begin opening the credit markets at competitive short term rates. This strategy should encourage companies to retain good debt and not just unload everything off onto the taxpayer.

What Does the Fed do with the debt?
Now here is where the homeowners receive their bailout. Once the debt is transferred to the Fed, a series of teams will begin to feverishly unwind the derivatives and begin to put a face to the note. Any loan under $417,000 that was put into a bad loan, is pending foreclosure, or currently in foreclosure should be forced to refinance with no questions asked. If the homeowner refuses to accept the forced re-fi then the government has the right to seize the asset and sell it in a government auctions. The good loans over that amount could be repackaged and re-sold to to banking firms and mortgage outfits. Inorder for this option to be successful, it would require an extension of credit from the government however it could be a situation where preferred equity in the company is exchanged with the government for the sale of the packaged securities. Then at a time when the government feels they have received max value from the sale, they can liquidate the securities on the open market.


I think there comes a point in time when we all have to put partisanship to the side and begin to move this effort forward in executing a plan that will benefit both America and the U.S. people.

originally written on 9/24/2008

We Have Gas Everywhere...No Wait That's Water, My Bad

September 2008 will be forever ingrained in everyone's memory and it has nothing to do with the first Presidential debate that involves a Black Presidential nomination. This month will be known as the "Gas Illusion Month" because Governor Sonny Perdue had to be looking at a mirage on his computer screen when made the comment that “There is ample fuel in the city,” he said. “It’s not everywhere it needs to be, but we do not have a crisis in the sense that we don’t have fuel coming in.” (http://www.ajc.com/metro/content/metro/stories/2008/09/24/atlanta_gas_governor.html).

Hey Sonny, Hey Sonny where is this gas at? I just had to drive to 5 gas stations and wait for 45 min just to have the pump run out of gas while I was attempting to fill up. I think what he meant was that there was ample supply at the governor mansion, so there was no true reason to be seriously concerned yet. Ok, I am showing a bit of sarcasm, however, when one drives around the Metro area almost every single gas station is out of gas. One gas attendant said today that on this past Saturday evening he received a delivery of 3000 gallons, but he ran out by Sunday night less than 18 hours later. No disrespect governor, this is a supply crisis, regardless of how well you would like to spin it.

Now is the Governor completely at fault for his delusion? No, the people of Atlanta have to shoulder some of this blame. I have to ask this question, but is it the end of the world? Is there a Cat 5 Hurricane on the verge of hitting Atlanta within the next few hours? Why are we panicking so much and stockpiling gas at prices as high as $5.00 gallon? Do you realize that the rest of the nation is selling gas for $3.49 or less, I don't think we do. As I waited to get some gas today, the patron in front of me had a 20 gallon gas jug he filled up as well as his Benz SUV at $4.45 a gallon. He easily spent near $200 for that one purchase; now if the supply returns by this weekend and gas goes down to $3.75 that is a loss of $50.25 assuming that the Benz SUV is a 20 gallon tank. Now I have quite a bit of education and several professional licenses however it doesn't take a rocket scientist to see that is a dumb move...LOL. Demand can never return to normal if we are draining every gas station as soon as they re-up supplies. Hey Governor, this may be a good time to institute a state-wide $20 cap and not worry about bringing in a ton of tax revenue.

For the Perdue fans, yes Perdue was able to get the EPA to allow for dirty gas to be sold, but at what expense? Maybe if Atlanta had a stronger public transportation system then we would not have to worry about gas crunches; oh wait that is another ball that was dropped. In 2006, Marta received less than 1% of the State of Georgia total revenue source for capital funds (http://en.wikipedia.org/wiki/MARTA). In addition the State is experiencing a $1 Billion dollar shortfall in transportation and infrastructure spending.It just appears that for the most part Atlanta is not a major concern for the current State Administration.

Final Note: Hurricanes in the Gulf Coast are a normal occurance which means there will always be a gas shortage for some period of time or another. How about we work with the Petro firms and build a series of emergency reserves and strategically place them around the State. When situations like this arise, or increases in overall market price, The State will have a reserve that they can tap to help keep stability in the marketplace. Its time for politicans to stop reacting to situations and begin to be proactive; otherwise why are our tax dollars being spent to pay you to not run out City, County, and State properly.

Wow the New Tom Foolery

If you haven't heard now you will, Bishop Weeks, former husband of Juanita Bynum has stooped to an all time low from the pulpit in my opinion. Now that his divorce is final and his probation for hitting his ex-wife is in full swing, this joke of a pastor has started a reality show to find his 3rd wife; are you serious...LOL.

Here are his exact words about what he and his "help" are looking for:

"The group concludes the woman should be at least 25 years old but "with special exemptions for 21 and up if they are classy," Weeks said. She also must want to have children with him...This woman has to be very discerning, and very intimate, and very social and very sensual," Weeks says, laughing. "And on the ministry side she has to be very diverse. She can't be ugly." (http://www.msnbc.msn.com/id/26792417/)

Yes you read that right the epitome of what we call a mockery of the pulpit. He has classified this as a Christian reality dating show however, it does not appear to uphold the morals of the Church. The crazy thing is most are probably going to allow this kind of behavior and classify it as all in good fun. Now I am not trying to judge anyone; no one has the right to pass judgment but GOD, however, this is ridiculous. Is it that serious to be married especially after two failed marriages? And the world says that their are no positive Black men anymore...come on really...LOL...

Seriously, how can he speak about raising a strong, healthy household or encourage a dead beat Black husband to turn the corner and be a strong black role model to his home? I guess it's all about self and cares what the repercussions are or will be. Word to the wise brother...wake up and kill the show. Nothing absolutely nothing positive can come out of this circus of the pulpit, but hey what do I know...