While I watched our US Senate sell itself out to the banking industry last night I was becoming more and more frustrated with how this crisis seems to be playing out.
Libor or Lemming?
I am newly familiar with an obscure term called the Libor Rate or London Interbank Offered Rate, which is the rate that banks worldwide charge each other for short-term loans.
According to the Washington Post, the rate “spiked by more than four percentage points, to 6.9 percent, its highest level ever” which “tells experts that banks around the world are basically unwilling to lend to each other at any price”.
So while the banks and Washington are asking Americans to “trust them” with $700 billion in our tax money they are at the same time extremely distrustful of themselves to make good choices.
So the Libor rate has congress jumping off a cliff like Lemmings to pass the bailout.
McDonald’s Credit Crunch
According to Advertising Age on September 29, 2008, McDonald’s is falling victim to the credit crunch which states the credit crunch has “prompted Bank of America to halt loans to McDonald’s franchisees.”
Is this related to keeping jobs? Yes and no…
According to the Washington experts spin you would assume McDonald’s might not be making payroll next week and laying off scores of workers.
Instead what is really the case is that franchisees might not be able to build out the new in-store coffee bars as quickly as they had planned.
This will lead to some job issues with contractors getting work later than planned but the work is not lost. Also the advertising buy associated with rolling this out will have some agency people in limbo as the project is delayed.
But is the sky falling at all?
Four days earlier the Chicago Tribune reported, “McDonald’s franchisees’ credit not frozen, Bank of America says.”
Bank of America said it is not freezing any current or new lines of credit to McDonald’s Corp. franchise owners, despite reports citing an internal memo from the fast-food giant advising franchisees of the contrary.
Sticking with the burger theme…
The St Pete Times reported “burger franchise to open at SkyPoint downtown” this morning and highlighted Bob Dorfman of TCH Restaurant Group Inc., and his plans to open a new Five Guys Burger and Fries in the SkyPoint tower in downtown Tampa by the end of the year.
Tough bill to swallow
The above cases in point are why myself and millions of others in this country are not convinced yet on the huge bailout.
Yes something has to be done, but the only reason I feel it is being shoved down our throats this week is to get the presidential campaigns back on track and pave over real efforts to fix the problem.
A number of Senators yesterday spoke against the plan as it stood, with most having suggestions to improve it or at least take more time to get it right.
I will continue my efforts to have this bill defeated until a real solution is presented and hope you will do the same.