Thank you for that post. I agree and have been telling everyone I know to throw all of them out. Even the no votes. They are all part of it now. I keep being reminded of a scene in frankenstien……

While this bill will add an enormous debt burden to the American “Tax Payers” and their families for many, many years to come, I thought I would share some more of what this bill “Will NOT Do” to help and assist American “Tax Payers” and “Home Owners” in this country:

Jobless Claims Report came out today and showed the largest number of “Out of Work” Americans in over 7 years (September 2001). The number of Americans filing claims for unemployment rose to 497,000 Americans!!! “THIS BILL WILL NOT CREATE ONE SINGLE JOB”

Manufacturing Index Report came out yesterday and showed it has dropped to a 7 year low (October 2001). The index dropped to 43.5 and came ever closer to the bench mark 41 that represents a recession. The bench mark of 50 is the guide whereby any reading below that signals contraction in the economy. Over the last 12 months the index has averaged 49.6 or contraction over the last year. The new orders sector of this index showed an ominously sharp drop to 38.8 and marked the 10’th straight month of decline of that sector. That is a forward indicator of job growth as new orders forces employers to hire. “THIS BILL WILL NOT INCREASE NEW ORDERS OR ADD DEMAND FOR FURTHER MANUFACTURING”

The Case-Shiller Index came out this week and showed an historical July year over year decline of 16.3%. This was the largest drop in home prices ever recorded for July. The 10-City index plunged to its largest decline in over 21 years. The decline of 17.5% in the 10-City index was also the largest ever since the index inception. “THIS BILL WILL NOT HELP HOME PRICES RISE OR ADD EQUITY TO PEOPLES HOMES”

The monthly Automakers Report cam out this week and showed industry wide US auto sales dropped by the largest amount in 15 years. Truck sales declined by 31% while Car sales declined by 22%. Ford sales declined by 35%, GM sales were down 16%, Chrysler sales declined by 33%, Honda sales declined by 24%, Toyota sales declined by 32% and Nissan declined by 37%. These drops are huge and clearly represent trouble for this industry ahead. “THIS BILL DOES NOT MAKE PEOPLE GO OUT AND BUY CARS AND TRUCKS”

Factory Orders Report came out today and showed the largest decline in nearly 2 years. Orders for non-defense capital goods excluding aircrafts, was the lowest in 19 months. We know the Government doesn’t have any money to be buying stuff moving forward, and especially after this bill is signed. This is a forward indicating sign of stress in the manufacturing base. They are slashing their investment plans and cutting back production as a result. Inventories have risen for over a year each and every month in companies and this is adding further stress to cut back building. “THIS BILL DOES NOT PLACE ORDERS INTO MANUFACTURING COMPANIES FOR CAPITAL GOODS”

As stated earlier this bill also will not force lenders to lend, force change in the business as usual in the financial industry, put oil in you tank, put gasoline in your car, place food on your table, decrease the cost of healthcare, pay for sorely needed repairs in our countries infrastructure, etc…

What this bill may due however is increase inflation, increase the cost of food and energy, decrease the value of the dollar, cause long term interest rates to rise, add to the American “Tax Payers” debt burden, reward the rich and wealthy lending boards, reward incompetence on wall street, prolong the recession we are already in further, increase the lack of transparency in the markets, reward corruption, etc…

I couldn’t agree with you more on the other stuff they created to gain higher returns.

We need to get back to basics.

Score: JJ 2, Stu -4, JAllen 2

JAllen

Call your Senators PLEASE and tell them “NO BAIL OUT BILL”

Now, if these ‘mortgage’ insurance policies could be bundled up and securitized, then we might have something.

(I lose two points for sarcasm, Stu loses one point, just because)

JAllen

Rates will rise as a result of the risk and although I have not seen a concrete plan on paper as of yet, I will assume it removes some of that risk thereby actually reducing interest rates. Markets always use rates based on risk / reward models. Not that their models are always accurate, but that is the idea. Our mortgage paper is non recourse so unless or until that is changed we need more risk protection for the lenders and for ourselves as well.

Off course the current problem overall cannot be fixed by workouts, although a small percentage can be. If we had an idea such as Shiller is tossing out then perhaps that percentage would be much, much higher to say 30%. Wouldn’t that be nice if we could have saved an additional 400,000 people from losing their homes this past year? Maybe we wouldn’t be in this mess if that were the case!!!

Do we need a serious correction still in property values? Absolutely!! Would quicker be better? Absolutely!! Is that what is going to happen? Absolutely NOT and partially it is BECAUSE we have no workable solution built into the mortgage market today!!!

Shiller is right on with this idea and his ideas most certainly can work in the real world. In fact many, many of them do today as models used each and every day by economist around the world.

one point for JJ for being against this bailout.

Minus one point for Stu for calling JJ part of the problem. I add one point for Stu for being positive about the end result

One point for JJ for paying his mortgage one time
Minus one point for JJ for his sarcasm about paying his mortgage on time.

Minus one point for JJ for criticizing Schiller

Current Score: Stu: 0 JJ: 1