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Emergency Economic Stabilization Act of 2008: A Layman's Explanation

Essential Caveat To Fix Financial Crisis

The current financial crisis is a result of financial institutions developing a fear of lending. That IS the crisis…and the U.S. $700 billion bailout doesn’t directly address that. Banks may continue to sit on OUR money.

Medication should be applied before the patient dies…..and the U.S. government should provide the needed liquidity....but THE BANKS MUST BE FORCED TO LEND THE GOVERNMENT PROVIDED LIQUIDITY. Whether the government provides loans or buys the dumb “toxic” loans, financial institution getting assistance must agree to lend at least 50% of the money within 30 days and the remainder within 90 days and keep that money loaned to US businesses and US homebuyers for the duration of the government loans. That must be part of the deal or the US government is likely wasting our money on a dead patient.

Banks profit from lending and everything will return to normal sooner if the banks immediately provide the liquidity required for business to function and homebuyers to buy homes.

Equity Opportunities in Natural Gas

REGARDING THE RATIO OF OIL AND GAS PRICES: The energy content of one barrel of oil is about equal to 6000 cu. ft. of natural gas. Therefore, natural gas should be at least $19/1000 cu. ft. when oil is $115/bbl. Remember, crude oil is nasty crud that takes a multi-billion dollar refinery to turn into a usable product.

Comparing the price of natural gas to gasoline....the energy content of 1000 cu. ft. of natural gas is equivalent to 8.3 gallons of gasoline. When gasoline is $3.50 per gallon, natural gas should be $28.9/ 1000 cu. ft.

With natural gas currently at about $10.50 per 1000 cu. ft. it is one third the cost of gasoline. And it burns cleaner and doesn't require the complex emission devices to burn cleanly. It is hard to understand how natural gas prices can be so low and why more industries and vehicles don't switch to natural gas. Better yet, why do people still burn fuel oil for heating??!!!

Obviously, natural gas is an incredible bargain at $10 per 1000 cu. ft. How long will this bargain remain underutilized?