$700 Billion Bailout Package

Courtensey of Jarold Perkins & Mary Ellen Kohut (The Mortgage Advantage)
The 700 billion dollar bail out has the world markets on an unexpected terrifying roller coaster ride. Fear and innuendo are guiding the global stock markets that are in serious need of Prozac. Although each of us would appreciate a few million dollars and promise not to spend it on spa’s and expensive dinners like AIG did with a portion of their save –the- banks- money, our lifestyles will be affected if the banks cannot start to play nice with one other. If you are a small business, say an Arizona gnome maker in Phoenix, and your clients are in Japan, the gnomes are shipped by rail to L. A. and by ocean barge to Japan. Before the journey begins, the Japanese buyer provides a letter of credit to the Arizona gnome maker for money that will be wired to his Phoenix bank upon delivery. The Phoenix business owner takes the letter to his Phoenix bank to get credit to build more Arizona gnomes. The breakdown is between the Phoenix bank not accepting the line of credit to the gnome maker and the Japanese bank not extending the line of credit to the Japanese buyer. Suitcases of cash is not an acceptable form of payment for gnomes unless they are Colombian and the buyer is Tony Soprano.