[Oe List ...] Is this possibile? A.M.Noel

Sat Sep 20 14:52:41 EDT 2008

Can anyone find anything in this bail-out that attempts to identify  
those who created this situation, or the practices beyond short  
selling, and have announced any penalties or future penalties, or  
outlawing any practices in the boardroom, the arrangement of  
"cronyism" among boards, which allow stupid practices and rewards  
failure?  Anything that strengthens the hand of stockholders, the  
government, or any regulartory agencies, anything that addresses the  
meltdown in economies outside the U.S., especially the agriculture  
sector in 3rd World countries, anything that addresses the issues of  
increased poverty here and abroad brought on by these  
"irregularities."  The issue of irresponsibility seems to be hidden in  
the details for me; is it that the idea of morality is limited to  the  
no's-no's of religious culture?

George Holcombe
14900 Yellowleaf Tr.
Austin, TX 78728
Home: 512/252-2756
Mobile 512/294-5952
geowanda at earthlink.net

On Sep 20, 2008, at 11:08 AM, McCabe, Terence W wrote:

> Very interesting. One reflection on #3. I agree that we should  
> reduce interest rate that balloned on the single home families. But  
> I don't think we should bail out speculators that were trying to  
> ride the real state wave.
> Terry McCabe
> ________________________________________
> From: oe-bounces at wedgeblade.net [oe-bounces at wedgeblade.net] On  
> Behalf Of A.M. Noel [amnoel at comcast.net]
> Sent: Friday, September 19, 2008 7:30 PM
> To: 'Order Ecumenical Community'; dialogue at wedgeblade.net
> Subject: Re: [Oe List ...] Is this possibile? A.M.Noel
>
> Obama Economic Crisis Solution
> Upon a long term study of the economic meltdown of the financial  
> sector and thus the economy, I have tried to come up with a solution  
> to the problem.  The solution here is of course really succinct and  
> more comprehensive of the solution will be formulated.  The purpose  
> of this document is to provide a concise framework for an  
> alternative solution so please excuse its curtness.
> First, an understanding of the economic problem.  The crux of the  
> problem being faced by the major financial institutions in the  
> country is a liquidity problem.  Banks have made loans to their  
> clients with the expectations of it being repaid.  (The wisdom of  
> some of these notes are not discussed here but could be included in  
> a more comprehensive document.)  Unfortunately a substantial  
> percentage of these loans have been defaulted upon creating within a  
> bank a lack of expected funds flowing in.  When this amount is  
> significantly large enough it makes the banks ability to live up to  
> its financial obligations questionable.  Thus a liquidity problem.   
> So what is the solution?
> The solution is actually three fold but before it is postulated let  
> us first make one observation.  What if we can stop loans from  
> defaulting?  Then banks will get their payments from these clients  
> and thus reduce the liquidity problem that the bank will have.  The  
> client also now will have a chance to hold on to their most precious  
> asset.  So how do we reduce defaults?
> The answer is three fold all of which are geared towards reducing  
> the number of defaults amongst borrowers.  It is better for a bank  
> to get some money back rather than nothing.
>
> 1.       Increase the terms of the loan - The purpose of this  
> solution is to reduce the monthly mortgage payments of the borrower  
> to allow them to be able to continue making payments while still  
> possessing their loans.  Thus we make 30 year loans into 40 or 50  
> year loans.  These terms can be renegotiated when the economic  
> health of the country and the individual is better. This will lower  
> monthly mortgage payments of the borrowers.  Now since a majority of  
> your early payments are interest, this solution will only bring  
> payments down slightly.  But if we can get customers to pay  
> something instead of defaulting and getting nothing, the bank and  
> the borrower are now immediately better off.
>
> 2.       Reduce the amount of the loan – If value of the loans are  
> reduced between 5-10% on a case by case basis then once again  
> monthly mortgage payments will be reduced, giving the borrower a  
> chance to hold on to their property.  From the banks point of view  
> it is better to have a loan discounted and still hold 90% of their  
> value than to have the loan default and get the property which  
> essentially because of the defaults are not worth a lot less than  
> 90% of their value.  It some cases housing values have dropped more  
> than that in a month.
>
> 3.       Reduce interest rates – Once again this will lower the  
> mortgage payments to the borrower but severely reduce the  
> probability of defaults.  Once again lower cash flow is better than  
> none.
>
>
> The obvious advantage to the government and the nation is the stop  
> or at least slow down the collapse of the banking and financial  
> industry.  There are other benefits to the government.  The need for  
> massive financial institution bailouts are several reduced.  The  
> probability of banks collapsing caused by illiquidity is severely  
> hampered.  The beauty of this elegant solution is that it would cost  
> the federal government or for that matter any government a dime.
> Once again this is only a brief summary of what could be a massive  
> comprehensive solution to a incredibly pressing issue during this  
> time of economic crisis.  Frank  1-910-671-6769.
> Love your comments
> A.M.Noel
> 206-321-6274
>
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