Friday, September 19, 2008

A way to solve our crisis (if there is any at Sun)

I've order... I mean, asked, Jonathan to have a look to our legal situation to check if we can become a financial corporation instead of what we are. It seems that the government has plenty of money for saving that kind of business (and I thought that we were on the capitalist side of the Cold War, and now it happens that Bush acts like a Marxist! -and I'm not talking about Groucho, although some people think that all this plan is just a comedy-).

Anyhow, if Jonathan plan fails, I already have a B-Plan: We are going to sell mortgages as a way of paying the computers we sell to our customers. It's easy, we sell the iron, then the customer acquires a mortgage to pay the computer, using the very same computer and some other assets from the customer to assure the payment of the debt. Then, you may think 'what happens if the customer doesn't pay?' We get the computer back, and keep the money already payed by the customer.
Then again you may ask: 'What if the value of the computer has decreased and is lower than the debt of the customer? The customer may decide not to pay the debt and buy a newer computer to someone else -or even to Sun again- for less money then the remaining debt'. Yes, it is possible, and this is what assurance companies are for: we are launching immediately, together with Sun Finance, Sun Assurance, so we are going to assure our own mortgage and finance operations with customers. This way all the money remains at Sun at last.

You may then think: 'This is crazy, if customers stop paying, not only Sun would be in dire straits, also the new insurance company will be as they cannot fulfill the debt generated by customers that don't pay their debts. What are you going to do then?'
Easy: the same that Freddy Mac, Fanny Mae, AIG, Merril Lynch... That is why the Federal Reserve is creating that emergency plan for: to buy high risk mortgages and funds (those not payed by the customers, for instance), and assume the debt generated by those naughty (and sometimes even poor) customers. If they are doing it for the financial system, for those who won billions by doing risky business -that are leaving in exchange a black hole in debts-, why are they not going to do that for Sun or even for your mortgage or your medical debts? It would be unfair to rescue those that provoked the major crisis since 1929 and not to the rest of us who pay taxes (well, Jonathan and me do pay taxes in a remote island in the Caribbean, but this is another story).

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