World Bank Proposal
WISE Division (World Investment Syndicate Enterprise)
Immediate Disbursement Schedule Outline
There are four immediate points of disbursement required to create economic stability virtually over night and worldwide. They exist and can be managed by contract to some extent but will require an eventual reporting oversight.
The world economic crisis is also the potential catalyst for major world changes including preserving our planet and the birth of new technologies for energy at essentially no cost to tax payers. Although the plan entails a new structure that can run forever, it allows Governments to ultimately take advantage of “one time charge offs” which would eliminate Government debt, reduce tax burdens and allow for necessary capital improvements for many things including hazardous roads, bridges and mass transit across the globe that is in need of repair. I would suggest adding to these aforementioned capital budgets for a new breed of airplanes for the airline industry—safer, more economical and more affordable for passengers and freight.
1. Residential Real Estate. Existing banks would be given a WISE sponsored loan program. It will have several tiers. Included will be flexibility and a departure from tough underwriting because that has been undermined by what has already occurred. Going to extremes as we have—full docs and only the best credit rated with large down payments won’t work. First, for all existing loans make prior to 2008, the ability to refinance up to 80% of current value or existing loan amount at 2% floating—subject to WISE adjustment; up to 90% at 3% floating subject to WISE adjustment. This will give existing homeowners that are 30-60% under water a chance to come out over time. New mortgages will be a sliding scale starting at 5% for 80% and 6% for those with 90% and 7% for 95% financing. Banks/mortgage Companies that resell the program will be given a small origination fee and banks will receive a .5% servicing fee. Banks will be limited to growth as a percentage of net capital. (The plan will recapitalize all banks over time and keep employees going without the need for layoffs. It will also bring back the mortgage business for independent companies that need access to products)
2. Major Stock Market Exchanges. WISE will stabilize prices for the major issuers that make up the prime indexes. This will stop the hemorrhaging for the Pension, Taft Hartley and Endowment markets that are crippled right now. When one of the individual equities supported begins to have upward movement, WISE will scale out of any position they might have taken for support and continue with this function within reasonable parameters. WISE will also offer direct financing to the same issuers with terms that require scaled down executive compensation and include the requirement to acquire smaller competitors and or create joint ventures with them for a percentage of the funding. Terminal causes that employ a lot of people such as the auto industry will be required to reduce production by at least 5% per year and provide training transition for number 4 listed below or other acceptable alternative.
3. Credit Markets. No one knows what the exact exposure is but it exists and cannot be taken away. WISE will provide liquidity for all of these existing issues but limit investment banking houses on creation of new issues that are garbage. Brokerage houses will be given access to pools of capital to hire new sales forces to manage financial products—not create a bunch of new instruments to further pollute the market. Banks will be given a program for credit cards that increase limits automatically and reduce interest rates accordingly. Price gouging has to stop and access to spendable dollars has to immediately increase—monthly payments would essentially be the same for most that are sub-prime borrowers or those that do not understand that most credit card debt is 17-18%. Brokerage firms will be given the task to assist in restructuring the collateral behind the derivative markets. Serious limits will be placed on Wall St. compensation that accept WISE offered assistance.
4. Green Infrastructure. This is immediate job creation through jvs with private industry and WISE capitalization. New roads in country’s that need them for trade and work. Rebuilding of existing roads that are in disrepair. Revamp of mass transit including upgraded trains that use clean energy. Change from fuel to electric grid that is powered by cleaner technologies. Refit of dams and hydroelectric generators that are much more efficient and do not kill wildlife (fish). An exchange program to recycle most of the commercial airplanes through the WISE program to new, safe and modern planes that save and conserve energy. Upgrading of shipping and pipeline infrastructures for health, safety, costs and conservation of energy.
Each of these categories can be vastly expanded upon. Additional ones over time can be created. The particular points above can generally be kicked off very quickly and result in profitable benefits for both industry and Government. This simple outline also creates a mechanism, potentially global in scope that can be used to reduce taxation and increase productivity by all measures.
Although the process of creation will take some work, most of it can be done outside of committees and then submitted to committees for explanation and approval. One of the governmental challenges is that it is operated by politicians, which makes implementation inherently difficult. On the other hand, business people have to appreciate that there are political ramifications to all of these actions beyond immediate gratification.