Are the Bank hording the $$$$$

The latest bad news – the government approves 700 Billion for the banks – and the banks take the money and stash it – rather than lending it. Rather than gripe about it – there is a simple solution. Most of the money has not been given out as yet – so STOP IT – pass a new bill and change the deal. Here’s how it should change – any Bank that wants the bailout money – must accept it as a “demand” loan – which means the Fed can call the loan at any time and demand repayment. This is precisely how these same banks lend money to businesses. If its good for the goose – its good for the gander! If the Banks don’t start lending money and doing as the Fed sees is in the public interest – then the Fed calls the loan. Thus – either the bank plays ball – or they are out of the game. Congress — it is not that complicated if you’d stop and think for a second.

Auto Industry Bail Out – What is so Complicated?

I don’t understand the financial wizards. If the Detroit Automakers go down – you might as well extend Lake Michigan to Lake Huron. Congress needs to get real. The key, however, is not just to give the big three money – they will burn through it unless AUTO SALES ARE STIMULATED.

To do that – all that is needed is to provide government guarantees to the Banks on auto loans and leases for the purchase or lease of domestic manufactured vehicles. The interest rates should range from 1% on fuel efficient cars to 4.99% on the SUV gas guzzlers. The Federal Program has to say to the Bank – if you want the guarantee – then you must approve loans for Buyers/Lessees with FICO scores above 600 (not the current ridiculous new requirement of 700 that has killed the market). If the buyer/lessee defaults, then the Bank is covered on 90% of the loss following repossession and sale of the vehicle.

This, coupled with enough money to get the Big 3 through the crises – is a plan that will work. Once auto sales and leases get going – so will our economy and only then will a turnaround occur.