Bailout: A Bad Idea - Here's A Better One.

2008-10-16T02:27:00.005-04:00

ON FEDERAL GOVERNMENT'S BANK BAILOUT

It upsets me to think that we are "rewarding" executives for poor job performance. Especially, since all of the same managers would fire a worker on the spot for equivalent performance. Those same managers believe in the efficiency of the free-market, and little government regulation; yet have now turned to government for help as they have screwed up.

It would have been far better to have given every household in the U.S. $5400, and then let the banks compete to attract that money into their savings and checking accounts. Then the bank can lend this money at a higher rate. Those who deposit their $5400 would benefit further by the interest (1+%) they would receive. This would also create a fairer playing field for other businesses, especially small business, and an opportunity for them to likewise attract some of the money. Thus, this puts money into circulation by and for the benefit of everybody.

The big banks are simply going to aid the wealthy, their execs and shareholders (chief among whom are their execs.) Forget the threats they make of closings, layoffs, refusing to lend, etc. The big banks are already closing, merging, and laying off workers; they will continue to do this. They have already raised lending criteria to the point many people can't get a loan; they will continue this practice. Same for closings, mergers, etc.

On top of it all, money is still being sent overseas to aid foreign banks, countries, and the wars. The situation will not get better by the bailout. It is only a bandage for 4 or 5 months. What could happen now, WILL happen within the next 6 months. Let's pray it does not.

We should let this mess play out by the free-market. The banks can only make money when they lend what they have. They will lend, probably at slightly higher rates; and they are already doing this. People will borrow, even at slightly higher rates. But when the rates get too high, the drop in demand will force the rate downward.

And why should government modify or restructure the consumer mortgage loans? Force the banks to do this now. They made the mess, let them clean it up by resetting the rates at a low fixed rate. Certainly, a little interest is better than none at all; and the face value of the mortgage obligation is preserved.

Here’s another better idea: Make 20 monthly installment pay-outs of $35B each toward the $700B loan. Each future installment would be contingent on monthly satisfactory performance of the banks. Good performance toward fixing this mess will warrant receipt of another installment. This will also give the banks time to really assess the value of their portfolios.

I can go on with this, but it would turn into a book. So, let's sum it up this way: America survived a depression before, and later prospered. We now have better resources in place to get through this one; we will survive and prosper again. Let's pray we will.

Together, we WILL survive and strive.

"When Integrity, Ethics, and Knowledge Matter!
"REGGIE FLUKER, Cs.D., MBA
Strategic Development Advisor
REGGIEFLUKER CONSULTING
www.FlukerRealEstate.com
www.AmazingRealEstate.net

Specialty Coffee houses

2007-11-15T00:49:00.000-05:00

I had always heard that patrons of specialty coffee houses were coffee connoisseurs with a preference for a gourmet beverage even at a rather high price. If that were the case, why is it that many customers only buy one beverage during their lengthy visit to cyber-cafes (coffeehouses with wi-fi internet access?) Then they sit for a long time with empty cups. In fact, my recent unscientific observations revealed that many customers actual buy smoothies and other not-so-specialty drinks, instead of coffee.

Personally, I prefer the convenience store coffee "blends" with their wide variety of flavors. If you have not yet experienced the cinnamon-oatmeal blend for breakfast, you're missing something that's simply superb, and possibly a bit more healthy.

From a business investment perspective, comments by owner/operators in online chat rooms reveal that coffeehouses may not be all that profitable. This first came to my attention a couple of years ago, when a friend dumped his new franchise and building for just that reason.

What are your thoughts?

DREEM - "The Matrix"

Bailout: A Bad Idea - Here's A Better One.

Specialty Coffee houses