The Industry Standard - Fixing the subprime mess: A Modest Proposal - Comments

Before the thought police

Jonathan Chance — Thu, 14 Feb 2008 07:06:41 -0800

Before the thought police continue making Americans into morons, please check out http://Cinetopia.Net before it gets censored again.

http://youtube.com/profile_play_list?user=CinetopiaNet

Thank you,

JPChance

Jonathan Chance — Thu, 14 Feb 2008 07:00:34 -0800

If we're going to act as civilized nations, we'll need to replace the Federal Reserve Bank's negative-value "dollars" with a positive-value currency such as United States renewable energy credits (US RECs):

http://rothschildmotors.com/solarbank/renewableenergycredits.html

Renewable Energy Credits

30 January 2008

United States renewable energy credits (US RECs) and United States peak renewable energy credits (US P-RECs) shall be issued to individual United States citizens, age eighteen (18) years or over, who are owners of certified renewable energy (RE) systems.

US renewable energy credits (RECs) and US peak renewable energy credits (P-RECs) shall be legal tender for any and all claims of debt, public and private.

One ($1) US renewable energy credit (REC) represents twenty (20) kilowatt-hours (kWh) of certified renewable energy (RE) produced within the United States of America ($1 REC = 20 kWh RE).

One ($1) US peak renewable energy credit (P-REC) represents ten (10) kilowatt-hours (kWh) of certified grid-tied peak-demand photovoltaic (PV) electricity produced within the United States of America ($1 P-REC = 10 kWh peak-demand RE).

Certified renewable energy for US renewable energy credit (REC and/or P-REC) shall be derived only from environmentally benign photovoltaic (PV) systems, grid-tied solar-thermal electric systems, grid-tied solar water heating systems, grid-tied wind power systems, grid-tied hydroelectric systems, grid-tied closed-loop geothermal systems, cellulosic ethanol and/or organic vegetable oil.

A minimum of ninety-five percent (95%) of natural resources, materials, labor time, components and/or systems contributing toward each US renewable energy credit (REC and/or P-REC) shall be produced in the United States of America.

The Treasury shall issue no more than three thousand ($3000) US renewable energy credits (RECs and/or P-RECs) to each individual United States citizen, age eighteen (18) years or over, per month.

US renewable energy credit (REC and/or P-REC) shall be taxable at a total rate no higher than fifteen percent (15%) to be shared equally among the federal, state and local governments of the locations where the certified renewable energy is produced.

US renewable energy credits (RECs) and US peak renewable energy credits (P-RECs) shall be fully redeemable for any and all public or private claims of debt denominated in currency issued in Federal Reserve Bank "dollars", Bank of England "pounds", Bank of Canada "dollars", Reserve Bank of Australia "dollars", Reserve Bank of New Zealand "dollars", Swiss National Bank "francs", European Central Bank "euros" and/or any other central-bank currency.

The real price of petro-banking - including military costs and replacement value, but excluding human health and safety - is over $1 million ($1,000,000) Federal Reserve Bank debt per gallon. Too expensive to burn?

There is no shortage of energy, there's just a shortage of common sense.

Rothschild Motors - Intelligent Solutions

This is a plan to charter a solar bank for qualified investors. It does not imply an offering of Securities or other products. Minimum investment: $1 silver dollar or $10,000 renewable energy credits (US RECs).

http://JPChance.Org

Fixing the subprime mess: A Modest Proposal

Mark R Anderson — Mon, 11 Feb 2008 14:02:01 -0800

Now that both Wall Street and the federal government have had their turns to take multiple whacks at emergency fixes for what most people call the subprime loan crisis, the results are clear. The first effort, an ad hoc move by central banks to catch the problem in time, turns out to have been too little, if not too late (The euro folk put in 350 billion euros in just one week last month.) A more recent attempt by Treasury Secretary Hank Poulson to rally private banks worldwide, led to a few large-scale independent cash injections, but no one bought the unified bank action package, and it literally evaporated as individual banks chose to take huge write-down baths one by one (Citibank, $18 billion to 24 billion and counting; Merrill Lynch, $10 billion to $27 billion).

The next attempt was by Congress and the President, with predictable results: Agenda items forced forward, without any serious chance of accomplishing something smart. Result: imminent passage of a $150 billion spending bill, which, as far as I can tell, has not been perceived by any living human being as likely to solve the problem. Giving about $600 to each taxpayer will turn out to have been a really stupid waste of money.

Then there was the second Paulson effort, via the G8: Let's act together as civilized nations. The result was clear this week, as Japan, France and Germany openly blew off the proposal, and Australia raised (instead of lowering) rates. Message to the U.S.: It's your problem, you caused it, you fix it. Subtext of Message to the U.S.: You're idiots.

OK, that about brings us up to now.

It occurred to me that there might actually be a way of fixing this mess without going through a depression, continued recession (we're in one already), or other painful gotchas for acting so stupidly in the past. Since nothing good is free, this isn't, either, but it has a number of winning points that might make it the best answer put forward yet.

Here is the Modest Proposal, as it currently stands:

1. Take all of the packaged securities (SIV, CDO, etc.), and unpackage them: i.e., look at what is inside.

2. Identify all of the loans currently or likely to be in default.

3. Offer the debtors/signors on each failing loan a new deal: we'll reduce the monthly payment on this by X to get you into an achievable payment zone (what it was before the last refi, for instance); in return you (debtors) agree to extend the loan by Y years to make up for the shortfall.

4. If any injection of funds is still needed, use it for this purpose (reducing monthly payments on extended loans) rather than as a consumer giveaway program. Specifically, trade off a monthly reduction in payments, for a partial interest in the appreciation of the house over the course of the loan.

5. Result: almost everyone involved in the scam part of this debacle takes a small but sustainable hit, but everyone survives: debtors keep their homes, banks do a slight (not massive) write-down, investors do the same (no market collapse), the liabilities are identified and dealt with, game over, life goes on. Mortgage brokers and appraisers will have to wait for the combined hammers of bankruptcy law, the FBI and the SEC for their turn at justice.

Mostly, it just means people have to wait for some of their money.

Sound too simple? Maybe it is. Maybe I'm crazy. Or maybe it's the best answer yet, and Hank Paulson ought to give this one more try, this time with something that will make a difference and really solve the problem.

Mark Anderson is CEO of Strategic News Service (TM), publisher of the technology industry's most accurate publicly-ranked predictive letter, at www.stratnews.com. He is also CEO of SNS Project Inkwell (TM), bringing appropriate technology design standards to K-12 classrooms (www.projectinkwell.com), and Chair of the "Future in Review (TM)" Conferences (www.futureinreview.com). He is a Contributing Editor to the Industry Standard.

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