The Weiss-Larson report
greatly expands what has been released publicly regarding the debt
crisis.

For example, Weiss found the number of banks in
need of assistance is 1,637 -- nearly 20 percent of the 8,451 such
institutions nationwide. Those banks and thrifts have assets totaling $3.2
trillion -- 41 times the $78 billion in assets held by the 117 financial
institutions recognized as needing assistance by the Federal Deposit
Insurance Corp.

Weiss Research bases its analysis on
financial reports filed by all banks and thrifts with federal regulators
every three months.

"There is a dual problem with the crisis," said
Weiss, whose data frequently are used in Tribune-Review articles
concerning the financial health of the region's banking industry. "All of
the talk seems to be about securitization of mortgages, but there's been a
decline -- a rotting -- of the underlying assets
(mortgages)."

Weiss' data show that among financial institutions
with $5 billion or more in total assets, 61 banks and 25 thrifts
are "overexposed" -- holding 1 1/2 times more in non-performing
mortgages than their shareholders' equity, which acts as a cushion to
absorb losses.

Weiss and Larson urge President
Bush and Congress to look past the mortgage mess and consider the
country's total debt outstanding. Mortgages, for example, represent just
42 percent of the country's $35.2 trillion in private-sector
debt.

"This is a debt-addicted society
we live in," Weiss said. "We need to focus less on bailing out and more on
strengthening our life vests, our safety nets, like the Federal Deposit
Insurance Corp., the Securities Investor Protection Corp., and state-run
insurance guarantee associations."

Weiss said the Federal
Deposit Insurance Corp., or FDIC, is funded at $45 billion, which is $32
billion less than the assets of banks on its list of troubled
institutions. The funding figure is a minuscule 1.9 percent of the assets
of banks and thrifts Weiss Research calls at risk.

If the $700
billion bailout is approved, where is the money coming from?

Weiss said there are three ways to raise the funds --
assessing taxpayers, which he said is unlikely; printing more money, which
means hyperinflation; or by borrowing.

Adding the
$700 billion to funds already announced to bail out Fannie Mae and Freddie
Mac, and insurance giant AIG, and the bailout total jumps to nearly $1
trillion.

"This bill is so extreme it could double
or triple the federal deficit in a very short period of time. It would
drive up the cost of borrowing, not only for the U.S. Treasury, but for
other bonds -- and for millions of Americans seeking a mortgage or other
credit," Weiss said.

The dollar likewise could be devalued, risking
a dollar collapse and the flight of capital out of the
country.

Weiss and Larson offer three
recommendations to ease the crisis:

--Congress should limit and reduce funds allocated
to any bailout to avoid a sharp interest-rate rise or a collapse of the
dollar and focus on shoring up government safety nets.

--If
Congress creates a new agency to acquire bad private-sector debt, the
agency should pay the market value for that debt. Such a move would mean
buying the debt at a sharp discount so that it can be quickly converted to
cash.

--Congress must admit to the American people that there are
significant risks in the financial system that government can't fix,
including the possibility of surging defaults on debt not covered by a
bailout or a chain reaction of corporate failures.