Course to Calmer Financial Waters 1. The government can assist / initiate recovery by: a.

Change Accounting Rules "mark to market" on mortgages which banks hold. This is unrealistic and devalues banks' assets unnecessarily, especially when about 97% of the mortgagees actually fully 'pay' their mortgages. Part of this credit crisis is actually a semantics accounting crisis and needs revision to reverse it. Apply a default prorata ratio of mortgage value to default rate and carry result as market value of the mortgage on bank balance sheet. b. Streamlining business paperwork and taxes required to do business at all levels: federal, state, and local. c. Promote new business in Textiles, Clothing, Shoes, Automotive Parts manufacturing, etc. d. Promote business development for products currently imported (which may be scarce shortly, and the promotion of American business creates jobs at home and stimulates the economy.) e. Issues tax incentives for new businesses & employment of U.S. Citizens (only). f. Nominal Tax credits for people who paid their mortgages and debts. g. Nominal Tax credits for people who purchase made in America. h. The Government can assist individuals, family and community self-sufficiency by supporting communities and churches with tax incentives. i. Reinstate Glass Steagal Act, Separate Bank and Underwriting, and limiting the maximum mortgage amount to less than 100% of value (not 105% or 125% which is what is was before the last Great Depression) [Banks should not loan over 100% of a home value, period (and probably should not loan over 90%). Let the buyer save and or use family funds for a down payment!] j. Government is requiring Banks to lend, to generate votes for congressmen. Not Sound Business. k. Government should have Bank troubled assets/mortgages in default placed into Unit Trusts. These Unit Trusts Assets should be managed by Professional Property Managers, turned into community rentals and managed for rental income. Owners of Unit Trust shares receive income from managed rental properties, and tax deductions from rentals, and real estate appreciation, if any. l. Outlaw speculative residential mortgage derivatives. m. Change Bank & Insurance Industry regulations to address consumer gouging. (1.) Banks are taking advantage of the public. Their risk in a mortgage comes from interest rate risk and default. They removed the interest rate risk by promoting adjustable rate mortgages. They increased the chance of default with these very same adjustable rate mortgages. Some Banks are issuing these ARM/mortgages at 40 and 45 year maturities with a balloon at 30 years where the mortgagee still owes 75% of the original loan! People barely quality to enter the mortgage and often cannot afford the home when the rate adjusts, usually much higher. BTW, the adjusted rate is preset at gouging levels! The cause is two-fold: first is government mandated loans to address social concerns (and votes), the second is a commission based sales force. This sales force sells what makes the most money for the salesman, not what is best for the consumer. (2.) Insurance companies are gouging the public. Their products are a tool to manage risk

by the consumer. The products sold to the consumer optimize insurance company profits largely without regard to the well-being of the consumer. The cause is commission based sales force. This sales force sells what makes the most money for the salesman, not what is best for the consumer. 2. Americans need get-tough attitude regarding financial decisions, both at personal and governmental levels. a. Goals for our Government and States and American People need to include basic fiscal discipline of a balanced budget. Period. b. Financial training should be included in Secondary School (high school). College for Financial Planning (Denver, CO) offers High School Financial Planning course materials. c. Our leadership should be required to pass fiscal education and business/resource management.