Despite Bailouts if consumers can’t or won’t buy PRODUCTS, GOODS AND SERVICES these industries will fail anyway
Big Government is bailing out big business. Citigroup is another example. While our politicians continue to prop up various sectors of the economy consumers like you and me sit on the sidelines not consuming products, goods and services. So what does that mean? Well Citigroup like so many banks is sitting on “toxic loans”. The loans are toxic because Americans are defaulting and behind on mortgage payments, car loans, credit cards and many just trying to provide the basics for their families. With no plan to protect these people the circle will continue to go around and around because millions – tens of millions - of consumers won’t support our economy by buying goods and services because they can’t. This will assure every bailout scenario will fail over time.
50,000 workers laid off at Citigroup. Do you think those people and so many others unemployed and struggling to make ends meet will actually buy a new car, big ticket items, electronics, travel, dinning and the list goes on. Certainly not. Even worse when the years of financial woes to come continue to batter people’s credit rating there will be segment of our society that just can’t or won’t buy things. Forget about banks tightening credit, tens of millions of consumers won’t even qualify to come back into the market to support our failed and failing economic sectors. Tens of millions of consumers will have terrible credit ratings and be shut out. An immediate impact would be to expunge 30, 60, 90 days lates for people trying to pay their bills over the last 12 months and next 12 months. That would have an immediate “mainstream” impact and assure future spending. Otherwise this economy will not recover any time soon especially due to lack of consumption by those hobbled unworthy credit consumers.
Here is an example. The auto manufacturers. Even if they are bailed out their future is bleak. So they survive for a period of time but have no hope of meeting sales requirements in the future. What of airlines, banks and wait for retail among others that will for certain underperform because consumers just aren’t what they used to be. Why isn’t a team of experts, leverage buy out, investment bankers, economist and others with real world experience going into the segments and buying assets that these “To Big To Fail” businesses sit on while their hands are out to government. Why isn’t GM spinning out and taking public GM finance, GE Finance, all the brands they have acquired and rolled up over the past 20 years. Now there is a plan – even if we loan them money we need to break up the conglomerates and unlock shareholder value. If the companies are too big to fail then break them up and fast.
I have spoken to thousands of consumers and everyday people, unemployed, underemployed and credit constrained. Almost 100 percent of them are not buying things – especially big ticket items – and are being forced to raid their stock holdings and 401ks to survive despite huge penalties. With Desperality comes Depression. A deep recession, and we are in one, needs to have consumer support to turn around. There is no way the American consumer of the 90’s and early 2000’s are going to be even close to the sales numbers this year and for the foreseeable future. Without us, you and me, big government bailing out their donors and friends in big business have a failed strategy.
Here comes our President elect. Even now, and I have been saying for a year, the bailout packages combined are well over $1.5 trillion and will approach $2 trillion fast. Well here is a plan to save us! Consumers first.
1. The US takes its next $700 billion and places it in a trust to insure every American’s credit risk. Now that would be a stimulus and guess what assure banks that their portfolios aren’t toxic.
2. Every American gets a 30 day holiday on payments so they can catch up on their bills. Yes this would stifle collections but frankly we are already giving these institutions money anyway.
3. Support every American in an effort to refinance the entirety of their debt under one payment scheme again supported – not paid for – by the government guarantee program.
4. Expunge 30 – 90 day lates across the board over last 12 and at least next 12 months to assure that consumers will participate and can participate in the economy or we will sink.
Then Economy
1. We have an Office of Homeland Defense. Wouldn’t it make sense to create an office of Financial Defense to regulate and oversee the vulnerability of the America heart and soul – Capitalism. We are wide open to the real threat of Economic War by most any nation on earth. Not a shot needs to be fired to crater our economy and therefore our way of life.
2. American Board of Directors comprised of the most capable – real world – executives to oversee all the endeavors of runaway government and make sure we only spend what we have not to borrow against our future. If we had real world executives the US would not be bankrupt and can be turned around from the brink of catastrophe,
3. Pay off the deficit by requiring 10% of all portfolios in the US to be pooled into a deficit fund to retire our debt. All the intuitions must invest 100% of the money anyway why don’t we require that all invest in our nation. We would raise over $10 trillion in the first year, pay off the deficit and their stock portfolios would skyrocket.
4. Immediately step into the world markets and buy back as much currency as we can. The US dollar is soon to lose its status as the underpinnings of world trade. Worse the FED is printing money 24-7 flooding the market with dollars that will roost and cause inflation or perhaps hyper inflation. What would happen if a country like China or Russia dumps a hoard of dollars on the market. Or worse doesn’t show up at our next treasury action. You have it – Economic War.
I am certain that if American consumers don’t get real relief the economy will continue to erode. If we send out say a $1000 check to everyone that qualifies I will be sickened. That is a voters bribe and does nothing for the eroding credit and future credit worthiness that supports spending. They will say it stimulates spending and consumption and it will for some but frankly its flawed, ridiculous and I certainly don’t want Russia and China among others to lend me money or write me a check.
Big Government is bailing out big business. Citigroup is another example. While our politicians continue to prop up various sectors of the economy consumers like you and me sit on the sidelines not consuming products, goods and services. So what does that mean? Well Citigroup like so many banks is sitting on “toxic loans”. The loans are toxic because Americans are defaulting and behind on mortgage payments, car loans, credit cards and many just trying to provide the basics for their families. With no plan to protect these people the circle will continue to go around and around because millions – tens of millions - of consumers won’t support our economy by buying goods and services because they can’t. This will assure every bailout scenario will fail over time.
50,000 workers laid off at Citigroup. Do you think those people and so many others unemployed and struggling to make ends meet will actually buy a new car, big ticket items, electronics, travel, dinning and the list goes on. Certainly not. Even worse when the years of financial woes to come continue to batter people’s credit rating there will be segment of our society that just can’t or won’t buy things. Forget about banks tightening credit, tens of millions of consumers won’t even qualify to come back into the market to support our failed and failing economic sectors. Tens of millions of consumers will have terrible credit ratings and be shut out. An immediate impact would be to expunge 30, 60, 90 days lates for people trying to pay their bills over the last 12 months and next 12 months. That would have an immediate “mainstream” impact and assure future spending. Otherwise this economy will not recover any time soon especially due to lack of consumption by those hobbled unworthy credit consumers.
Here is an example. The auto manufacturers. Even if they are bailed out their future is bleak. So they survive for a period of time but have no hope of meeting sales requirements in the future. What of airlines, banks and wait for retail among others that will for certain underperform because consumers just aren’t what they used to be. Why isn’t a team of experts, leverage buy out, investment bankers, economist and others with real world experience going into the segments and buying assets that these “To Big To Fail” businesses sit on while their hands are out to government. Why isn’t GM spinning out and taking public GM finance, GE Finance, all the brands they have acquired and rolled up over the past 20 years. Now there is a plan – even if we loan them money we need to break up the conglomerates and unlock shareholder value. If the companies are too big to fail then break them up and fast.
I have spoken to thousands of consumers and everyday people, unemployed, underemployed and credit constrained. Almost 100 percent of them are not buying things – especially big ticket items – and are being forced to raid their stock holdings and 401ks to survive despite huge penalties. With Desperality comes Depression. A deep recession, and we are in one, needs to have consumer support to turn around. There is no way the American consumer of the 90’s and early 2000’s are going to be even close to the sales numbers this year and for the foreseeable future. Without us, you and me, big government bailing out their donors and friends in big business have a failed strategy.
Here comes our President elect. Even now, and I have been saying for a year, the bailout packages combined are well over $1.5 trillion and will approach $2 trillion fast. Well here is a plan to save us! Consumers first.
1. The US takes its next $700 billion and places it in a trust to insure every American’s credit risk. Now that would be a stimulus and guess what assure banks that their portfolios aren’t toxic.
2. Every American gets a 30 day holiday on payments so they can catch up on their bills. Yes this would stifle collections but frankly we are already giving these institutions money anyway.
3. Support every American in an effort to refinance the entirety of their debt under one payment scheme again supported – not paid for – by the government guarantee program.
4. Expunge 30 – 90 day lates across the board over last 12 and at least next 12 months to assure that consumers will participate and can participate in the economy or we will sink.
Then Economy
1. We have an Office of Homeland Defense. Wouldn’t it make sense to create an office of Financial Defense to regulate and oversee the vulnerability of the America heart and soul – Capitalism. We are wide open to the real threat of Economic War by most any nation on earth. Not a shot needs to be fired to crater our economy and therefore our way of life.
2. American Board of Directors comprised of the most capable – real world – executives to oversee all the endeavors of runaway government and make sure we only spend what we have not to borrow against our future. If we had real world executives the US would not be bankrupt and can be turned around from the brink of catastrophe,
3. Pay off the deficit by requiring 10% of all portfolios in the US to be pooled into a deficit fund to retire our debt. All the intuitions must invest 100% of the money anyway why don’t we require that all invest in our nation. We would raise over $10 trillion in the first year, pay off the deficit and their stock portfolios would skyrocket.
4. Immediately step into the world markets and buy back as much currency as we can. The US dollar is soon to lose its status as the underpinnings of world trade. Worse the FED is printing money 24-7 flooding the market with dollars that will roost and cause inflation or perhaps hyper inflation. What would happen if a country like China or Russia dumps a hoard of dollars on the market. Or worse doesn’t show up at our next treasury action. You have it – Economic War.
I am certain that if American consumers don’t get real relief the economy will continue to erode. If we send out say a $1000 check to everyone that qualifies I will be sickened. That is a voters bribe and does nothing for the eroding credit and future credit worthiness that supports spending. They will say it stimulates spending and consumption and it will for some but frankly its flawed, ridiculous and I certainly don’t want Russia and China among others to lend me money or write me a check.
1 comment:
This bailout is helping consumers!!! The bailout is causing lenders to practically give away money. You would be surprised at how much cheap and in some cases "free" money is going around out there.
Bailouts for Everyone
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