John Ryskamp

Second (Or Third) Stimulus? Stop the Madness - Now

Marshall is in the process of coming around to what I advocated in my book, The Eminent Domain Revolt (New York: Algora, 2006). Your problem, Edward, is that you know NOTHING about the law, so you know NOTHING about the legal regime in which we operate here in the U.S. It's called the "scrutiny" regime, and it stands for the proposition that as long as policy bears a "rational relation to a legitimate government purpose" it is Constitutional.

This means virtually NO individually enforceable rights in such facts as housing or medical care--policy need meet only the "minimum scrutiny" test and it is virtually impossible to defeat the political system with this test.

So the problem is not an economic problem, it is an individually enforceable rights problem. Marshall and his (previously) all too self-satisifed crew at the Roosevelt Institution, are beginning to wake up to this.

This is what makes commentaries such as yours possible: you are vying for power, you want what YOU want to be policy and enforce on US. You have no conception that individually enforceable rights have a role to play in economic policy.

As I pointed out in my book, and point out now, the "scrutiny" interpretation misrepresents what the Court has said, and here I use the two cases which determine the parameters of our current regime: West Coast Hotel v. Parrish and U.S. v. Carolene Products.

West Coast sustained a minimum wage law, but not, as is often supposed, because the Court felt that as long as the law bore a rational relation to a legitimate government purpose, the policy was Constitutional. It adopted the doctrine of the State of Washington which had passed the law, and its doctrine was that policy is Constitutional only if it maintains important facts. Look at the fact involved and why the state passed the law:

"It shall be unlawful to employ women or minors in any industry or occupation within the State of Washington under conditions of labor detrimental to their health or morals, and it shall be unlawful to employ women workers in any industry within the State of Washington at wages which are not adequate for their maintenance.

There is hereby created a commission to be known as the "Industrial Welfare Commission" for the State of Washington, to establish such standards of wages and conditions of labor for women and minors employed within the State of Washington as shall be held hereunder to be reasonable and not detrimental to health and morals, and which shall be sufficient for the decent maintenance of women."

The policy of the State was to maintain important facts, and the Court found that income was an important fact. This is what the Supreme Court meant when issuing West Coast, not that policy is rationally related to a legitimate government purpose.

On to U.S. v. Carolene Products, which supposedly--in its famous footnote four--said that policy regarding "political" (voting, speech) facts as opposed to "social" facts (housing, medical care) might be subject to a higher level of scrutiny. This law sustained a Federal law regarding milk ingredients. Why? Because it maintained an important fact health:

"[A]ffirmative evidence also sustains the statute. In twenty years, evidence has steadily accumulated of the danger to the public health from the general consumption of foods which have been stripped of elements essential to the maintenance of health. The Filled Milk Act was adopted by Congress after committee hearings, in the course of which eminent scientists and health experts testified. An extensive investigation was made of the commerce in milk compounds in which vegetable oils have been substituted for natural milk fat, and of the effect upon the public health of the use of such compounds as a food substitute for milk. The conclusions drawn from evidence presented at the hearings were embodied in reports of the House Committee on Agriculture, H.R. No. 365, 67th Cong., 1st Sess., and the Senate Committee on Agriculture and Forestry, Sen.Rep. No. 987, 67th Cong., 4th Sess. Both committees concluded, as the statute itself declares, that the use of filled milk as a substitute for pure milk is generally injurious to health and facilitates fraud on the public."

Thus, the doctrine of the Court is that the Constitution is the maintenance of important facts, not a rational relation to a legitimate government purpose. This misreading is at the source of our present difficulties, because it achieves only persistent misallocation of resources which can only be properly allocated through the enforcement of individually enforceable rights.

No one in the political system wants to give up power over the MONEY, that is why they, and YOU, have no conception of increasing individually enforceable rights as a reponse to the current problems.

How do you determine whether a fact is "important?" It is, whether the fact is an unchanging fact of human experience. It is an important fact if it is

1. a fact of human experience
2. which experience demonstrates
3. is unaffected by attempts to affect it.

This is the test the Court applied when it removed exercises of religion from the political system and turned over power over them to the individual. Look at the historical test the Court applied to the fact of exercises of religion, and how they found that it resisted assaults:

Struggles to coerce uniformity of sentiment in support of some end thought essential to their time and country have been waged by many good, as well as by evil, men. Nationalism is a relatively recent phenomenon, but, at other times and places, the ends have been racial or territorial security, support of a dynasty or regime, and particular plans for saving souls. As first and moderate methods to attain unity have failed, those bent on its accomplishment must resort to an ever-increasing severity. As governmental pressure toward unity becomes greater, so strife becomes more bitter as to whose unity it shall be. Probably no deeper division of our people could proceed from any provocation than from finding it necessary to choose what doctrine and whose program public educational officials shall compel youth to unite in embracing. Ultimate futility of such attempts to compel coherence is the lesson of every such effort from the Roman drive to stamp out Christianity as a disturber of its pagan unity, the Inquisition, as a means to religious and dynastic unity, the Siberian exiles as a means to Russian unity, down to the fast failing efforts of our present totalitarian enemies. Those who begin coercive elimination of dissent soon find themselves exterminating dissenters. Compulsory unification of opinion achieves only the unanimity of the graveyard.

Note that another test could be derived from this:

4. and such affects are an assault on government.

The Court long ago held that government is an unchanging fact of human experience (Marbury v. Madison).

The reason for the recent, and surprising, anti-eminent domain revolt is public opinion's fear over facts such as maintenance, housing and medical care, which it has concluded are important facts.

Thus, it is public opinion which is moving the political system out of the scrutiny regime and putting it into the maintenance regime, the doctrine of which is that the Constitution is the maintenance of important facts.

Viewed from this perspective, you are a cowboy. Your prescriptions, as well as Marshall's, need to be put through the rigor of individually enforceable rights regarding those facts public opinion now sees as important: liberty, maintenance, housing, education and medical care.

This is why people like you and Marshall never get anywhere: you don't understand that the issue is individually enforceable rights. I can tell you two people who know perfectly well that that is the issue: Nancy Pelosi and Michael Bloomberg. Every time another government effort is made, they are at pains to point out that it does not presume or established expanded individually enforceable rights.

This is why they are about to change their tune or be removed from power. But they won't be replaced by YOU or Marshall, unless you wake up and start thinking about the law.

Cheers,
John Ryskamp

Second (Or Third) Stimulus? Stop the Madness - Now

Marshall is in the process of coming around to what I advocated in my book, The Eminent Domain Revolt (New York: Algora, 2006). Your problem, Edward, is that you know NOTHING about the law, so you know NOTHING about the legal regime in which we operate here in the U.S. It's called the "scrutiny" regime, and it stands for the proposition that as long as policy bears a "rational relation to a legitimate government purpose" it is Constitutional.

This means virtually NO individually enforceable rights in such facts as housing or medical care--policy need meet only the "minimum scrutiny" test and it is virtually impossible to defeat the political system with this test.

So the problem is not an economic problem, it is an individually enforceable rights problem. Marshall and his (previously) all too self-satisifed crew at the Roosevelt Institution, are beginning to wake up to this.

This is what makes commentaries such as yours possible: you are vying for power, you want what YOU want to be policy and enforce on US. You have no conception that individually enforceable rights have a role to play in economic policy.

As I pointed out in my book, and point out now, the "scrutiny" interpretation misrepresents what the Court has said, and here I use the two cases which determine the parameters of our current regime: West Coast Hotel v. Parrish and U.S. v. Carolene Products.

West Coast sustained a minimum wage law, but not, as is often supposed, because the Court felt that as long as the law bore a rational relation to a legitimate government purpose, the policy was Constitutional. It adopted the doctrine of the State of Washington which had passed the law, and its doctrine was that policy is Constitutional only if it maintains important facts. Look at the fact involved and why the state passed the law:

"It shall be unlawful to employ women or minors in any industry or occupation within the State of Washington under conditions of labor detrimental to their health or morals, and it shall be unlawful to employ women workers in any industry within the State of Washington at wages which are not adequate for their maintenance.

There is hereby created a commission to be known as the "Industrial Welfare Commission" for the State of Washington, to establish such standards of wages and conditions of labor for women and minors employed within the State of Washington as shall be held hereunder to be reasonable and not detrimental to health and morals, and which shall be sufficient for the decent maintenance of women."

The policy of the State was to maintain important facts, and the Court found that income was an important fact. This is what the Supreme Court meant when issuing West Coast, not that policy is rationally related to a legitimate government purpose.

On to U.S. v. Carolene Products, which supposedly--in its famous footnote four--said that policy regarding "political" (voting, speech) facts as opposed to "social" facts (housing, medical care) might be subject to a higher level of scrutiny. This law sustained a Federal law regarding milk ingredients. Why? Because it maintained an important fact health:

"[A]ffirmative evidence also sustains the statute. In twenty years, evidence has steadily accumulated of the danger to the public health from the general consumption of foods which have been stripped of elements essential to the maintenance of health. The Filled Milk Act was adopted by Congress after committee hearings, in the course of which eminent scientists and health experts testified. An extensive investigation was made of the commerce in milk compounds in which vegetable oils have been substituted for natural milk fat, and of the effect upon the public health of the use of such compounds as a food substitute for milk. The conclusions drawn from evidence presented at the hearings were embodied in reports of the House Committee on Agriculture, H.R. No. 365, 67th Cong., 1st Sess., and the Senate Committee on Agriculture and Forestry, Sen.Rep. No. 987, 67th Cong., 4th Sess. Both committees concluded, as the statute itself declares, that the use of filled milk as a substitute for pure milk is generally injurious to health and facilitates fraud on the public."

Thus, the doctrine of the Court is that the Constitution is the maintenance of important facts, not a rational relation to a legitimate government purpose. This misreading is at the source of our present difficulties, because it achieves only persistent misallocation of resources which can only be properly allocated through the enforcement of individually enforceable rights.

No one in the political system wants to give up power over the MONEY, that is why they, and YOU, have no conception of increasing individually enforceable rights as a reponse to the current problems.

How do you determine whether a fact is "important?" It is, whether the fact is an unchanging fact of human experience. It is an important fact if it is

1. a fact of human experience
2. which experience demonstrates
3. is unaffected by attempts to affect it.

This is the test the Court applied when it removed exercises of religion from the political system and turned over power over them to the individual. Look at the historical test the Court applied to the fact of exercises of religion, and how they found that it resisted assaults:

Struggles to coerce uniformity of sentiment in support of some end thought essential to their time and country have been waged by many good, as well as by evil, men. Nationalism is a relatively recent phenomenon, but, at other times and places, the ends have been racial or territorial security, support of a dynasty or regime, and particular plans for saving souls. As first and moderate methods to attain unity have failed, those bent on its accomplishment must resort to an ever-increasing severity. As governmental pressure toward unity becomes greater, so strife becomes more bitter as to whose unity it shall be. Probably no deeper division of our people could proceed from any provocation than from finding it necessary to choose what doctrine and whose program public educational officials shall compel youth to unite in embracing. Ultimate futility of such attempts to compel coherence is the lesson of every such effort from the Roman drive to stamp out Christianity as a disturber of its pagan unity, the Inquisition, as a means to religious and dynastic unity, the Siberian exiles as a means to Russian unity, down to the fast failing efforts of our present totalitarian enemies. Those who begin coercive elimination of dissent soon find themselves exterminating dissenters. Compulsory unification of opinion achieves only the unanimity of the graveyard.

Note that another test could be derived from this:

4. and such affects are an assault on government.

The Court long ago held that government is an unchanging fact of human experience (Marbury v. Madison).

The reason for the recent, and surprising, anti-eminent domain revolt is public opinion's fear over facts such as maintenance, housing and medical care, which it has concluded are important facts.

Thus, it is public opinion which is moving the political system out of the scrutiny regime and putting it into the maintenance regime, the doctrine of which is that the Constitution is the maintenance of important facts.

Viewed from this perspective, you are a cowboy. Your prescriptions, as well as Marshall's, need to be put through the rigor of individually enforceable rights regarding those facts public opinion now sees as important: liberty, maintenance, housing, education and medical care.

This is why people like you and Marshall never get anywhere: you don't understand that the issue is individually enforceable rights. I can tell you two people who know perfectly well that that is the issue: Nancy Pelosi and Michael Bloomberg. Every time another government effort is made, they are at pains to point out that it does not presume or established expanded individually enforceable rights.

This is why they are about to change their tune or be removed from power. But they won't be replaced by YOU or Marshall, unless you wake up and start thinking about the law.

Cheers,
John Ryskamp

Why Wells Fargo Is a Great Buy

What's basically going to happen is that banks are going to be "crowded out," and the current level of support they have will vanish. All the powerful players have their money, anyway, so the banking system will turn into the postal banking system.

The really huge items on the agenda are faltering muni bonds (which will require an RFC-style rejiggering and this will REALLY destroy confidence), and commercial real estate.

These are the last pillars of the on the ground economy, because suburbia is still employed so there is no political will to increase the income of the 60% lowest income earners, or to increase income to those on unemployment or public assistance.

You really have economic apartheid going on here, with suburbia banking on the underclass rolling over and dying, or physical isolation+policing to keep down civil unrest.

However, an unemployment camp on the Washington Mall would really move things to the right, politically.

Commercial Paper Contracting at Nearly Fastest Rate on Record

The main importance of this figure is to direct attention to the supply chain. That is what has begun to collapse, and this will be the coup de grace of the economy. I think this is the reason the Administration is preparing a $2.4 trillion stimulus for February 2010. The society is collapsing.

Why Wells Fargo Is a Great Buy

Oh and by the way, "Dr." Roberts, you clown, you dog, this is why the supply chain is collapsing:

The Commercial Paper (CP) market is essentially a private debt market used by corporations as a cheaper means of funding typical recurring operations than drawing on a line of bank credit.

Commercial paper, as financial instrument, is by no means a recent innovation and, in fact, you can read about how the CP market was affected by the many historic financial shocks experienced by the U.S. (read Panic on Wall Street: A History of America’s Financial Disasters).

Although the Federal Reserve was able to artificially bring CP rates down significantly since the shocking 615 basis point spread blowout (A2/P2 spread) of late 2008, they have apparently not been successful in preventing an overall contraction in the CP market.

The Federal Reserve calculates and publishes the total amount of CP outstanding every week and as of the latest published period, commercial paper outstanding is contracting at nearly the fastest rate on record, registering a whopping 17.81% decline year-over-year.


On Nov 05 01:44 PM Dr. Roberts wrote:

> Mr. Ryskamp.......do us all a favor here.....post your drivel over
> on Yahoo with the rest of the know nothings.

Why Wells Fargo Is a Great Buy

No thanks. I'd rather continue commenting here, making fun of clowns like you with my superior knowledge. I said Wells was becoming a social welfare agency. If you read the story below, you will see why I said it. This policy will spread to every bank.

I said that $2.4 trillion bailout was coming in February 2010 because the above policy will also be applied to commercial real estate (with some other goodies thrown in).

The American is basically dead--we're running on embalming fluid. There is still some music being played and so some people are playing musical chairs.

But there are no chairs.

Did you see the wonderful "productivity" figure? Actually, capacity in the U.S. is declining, it is not "sitting idle." The supply chain is collapsing.

You will see it in agriculture: this sector is about to implode.

And now for our little slap in the face of "Dr." Roberts:


WASHINGTON – Thousands of borrowers on the verge of foreclosure will soon have the option of renting their homes from Fannie Mae, under a policy announced Thursday.

The government-controlled company, through its new "Deed for Lease" program, will allow borrowers to transfer ownership to Fannie Mae and sign a one-year lease, with month-to-month extensions after that.

The program will "eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities," Jay Ryan, a Fannie Mae vice president, said in a statement.

But the effort is likely to affect a relatively small number of homeowners. In the first half of the year, Fannie Mae took back about 1,200 properties through this process, known as a deed-in-lieu of foreclosure. That pales in comparison to the 57,000 foreclosed properties the company repossessed in the period.

While neither option is particularly attractive for the homeowner, a deed-in-lieu does less harm to the borrower's credit record.

The rental program is designed to help homeowners who don't qualify for a loan modification under the Obama administration's plan, but still want to remain in their homes. Fannie Mae is not planning to market the homes for sale during the one-year rental period.

Fannie Mae has hired an outside company, which officials declined to identify, to manage the properties.

To qualify, homeowners have to live in the home as their primary residence and prove that they can afford the market rent, which would be determined by the management company. The rent can't be more than 31 percent of their pretax income.

Fannie Mae's sibling company, Freddie Mac, launched a similar effort in March. That policy, however, requires the foreclosure to be complete and only allows month-to-month leases. A Freddie Mac spokesman declined to say how many borrowers have participated.


On Nov 05 01:44 PM Dr. Roberts wrote:

> Mr. Ryskamp.......do us all a favor here.....post your drivel over
> on Yahoo with the rest of the know nothings.

Jim Rogers on Nouriel Roubini

The only figure that matters is underemployment among those with a Bachelor's degree or higher. They make all the money, they make all the decisions.

And guess what? It's only about 10%, which is why nothing has changed.

And nothing will change until that figure reaches 40%.

Why Wells Fargo Is a Great Buy

Knowing someone in Wells real estate, as I do, I can tell you that Wells is a Ponzi scheme, now basically run by the Federal Government. They are turning it into a social welfare agency (as with all the banks).

There will be about a $2.4 trillion bailout bill in February 2010. Economic activity is declining drastically.

Bill Gross' 'New Normal': Just the Same Old Normal After All

Except that demand will collapse, so you will not get your normal--new, old or otherwise.

Inflation vs. Deflation Battle Hits Key Inflection Point

This is ridiculous. Demand is collapsing, the dollar will be the last currency standing, but who will have a dollar? It's exactly like it was in 1931, except this time the middle class won't escape massive unemployment? Time for regime change!! Just read my book, The Eminent Domain Revolt. The reason we're collapsing is that we're in the middle of a regime change, from the hypercorrupt scrutiny regime of West Coast Hotel v. Parrish (1937), to the maintenance regime with individually enforceable rights to education, maintenance, liberty, housing and medical care. This is already happening. A good example is the Abbott cases in New Jersey, which raised the level of scrutiny for public education, even though the U.S. Supreme Court says education is at minimum scrutiny (San Antonio v. Rodriguez).

How do you think we got in this mess? By evaluating West Coast as standing for the proposition that "social" facts such as education are at minimum scrutiny. That put ALL the power over the MONEY in hands of the political system. Disaster.

And now suburbia is terrified for facts such as housing, education and medical care. They want new rights, need new rights, and are getting new rights.

The economy doesn't know how to handle this, which is why it's collapsing. You need a new regime firmly in place in order to restore confidence, and economic activity will NEVER increase until confidence is restored. Simple.

Protecting the Natives?

So, is the point of this to get shorter jail terms for those making these changes. It certainly won't stop the collapse in demand, and the collapse in the supply chain.

Shorting the Double Dip

National income drives consumer spending, which is contracting due not just due to falling national income but rapidly contracting credit lines and a near 40% loss of accumulated wealth in the property and equity markets. And while consumer spending ostensibly is 70% of the economy, this includes spending on health care - love those government statisticians - so contraction has an incredibly outsized impact on consumer discretionary spending - luxury goods, travel, restaurants, unnecessary goods, expensive goods - anything you can trade down from to a lower level of price with equivalent functionality.

BUT ISN'T 60% OF CONSUMER SPENDING DONE BY THE TOP 40% INCOME EARNERS. THE UNDEREMPLOYMENT RATE AMONG THOSE WITH A BACHELORS DEGREE OR HIGHER IS ONLY 10%. THE REASON YOU HAVEN'T HAD ANY CHANGES--EXCEPT FOR THIS CORPORATIST GAMBIT--IS THAT SUBURBIA IS STILL WORKING. YOU WON'T SEE ANY CHANGE UNTIL THE B.A. UNDEREMPLOYMENT RATE IS 40%.


There are too many factories around the world, too many shopping malls an stores, too much commercial real estate - and at levels beyond all historical norms or comparisons. The first several legs of a rebound needed to absorb this capacity before we see any uptick in business investment that materially helps the economy.

THAT CAPACITY DOESN'T NECESSARILIY NEED TO BE 'ABSORBED.' IT CAN SIMPLY BE DESTROYED. AND THAT IS WHAT IS HAPPENING. NOTHING WILL CHANGE IN THIS RESPECT UNTIL SUCH CAPACITY DESTRUCTION VERY SIGNIFICANTLY UNDERMINES THE SUPPLY CHAIN.

LOOK FOR THIS TO OCCUR IN AGRICULTURE, WHICH IS HIGHLY LEVERAGED JUST LIKE COMMERCIAL REAL ESTATE.

WHAT YOU DON'T UNDERSTAND IS THAT THE WEST COAST HOTEL V. PARRISH "SCRUTINY" REGIME NEVER OUTLAWED MELLON'S "LIQUIDATE LIQUIDATE LIQUIDATE." THAT IS WHAT IS HAPPENING NOW, AND IT HAPPENS IN TWO PHASES:

1. CIRCLE THE WAGONS--PROTECT THE POWERFUL, BACKSTOP BONDS.

2. SHOOT OUT AT THE INDIANS--THE FEDERAL GOVERNMENT WITHDRAWS FROM AMERICAN SOCIETY.

EVERYTHING IS GOING RIGHT ON SCHEDULE. YOU SHOULD STUDY THE DEPRESSION MORE CLOSELY. THE FEDERAL GOVERNMENT IS PROGRESSIVELY, STEP BY STEP AND ACCORDING TO THE MOST APPROVED MELLON PLANBOOK, WITHDRAWING FROM THE COUNTRY.

THE QUESTION IS, WHERE WILL THE NEW REGIME COME FROM. IT WILL BE THE "MAINTENANCE" REGIME--NEW INDIVIDUALLY ENFORCEABLE RIGHTS (SUCH AS TO HOUSING AND MEDICAL CARE) IN SUPPORT OF A GOVERNING DOCTRINE WHICH SAYS THAT POLICY MAINTAINS IMPORTANT FACTS (BY THE WAY, THE "SCRUTINY" REGIME DOCTRINE IS THAT POLICY RATIONALLY RELATES TO A LEGITIMATE GOVERNMENT PURPOSE--AS ANY LAWYER).

"MAINTENANCE" IS USED EXPLICITLY IN THE THREE MOST IMPORTANT SCRUTINY CASES:

1. WEST COAST
2. UNITED STATES V. CAROLENE PRODUCTS
3. BERMAN V. PARKER

LOOK FOR THE SUPREME COURT TO VETO SOME LAW WHICH UNDERMINES SOME IMPORTANT FACT, STATING THAT THEY ALWAYS GROUNDED DISCRETION IN POLITICAL SYSTEM, ON MAINTENANCE OF IMPORTANT FACTS.

THAT WILL SHOW YOU THAT THE REGIME CHANGE HAS COME. AND IT HAS TO COME. IT IS THE ONLY CREDIBLE ALTERNATIVE. THE ECONOMY IS COLLAPSING BECAUSE THE SCRUTINY REGIME HAS LOST CREDIBILITY.

IF YOU KNEW ANYTHING WHATSOEVER ABOUT THE LAW, YOU WOULD KNOW THIS.

AND WHERE IS THIS CHANGE COMING FROM? WHY, FROM OUR SEMI-FASCIST SUBURBAN CLASS. THEY'RE SCARED SH-TLESS ABOUT IMPORTANT FACTS SUCH AS HOUSING AND MEDICAL CARE.


That being said, there is no political support for more stimulus. Deficits and a Congressional election preclude another stimulus package next year and the Fed and Uncle Sam have already said they are definitely pulling back, beginning November 1.

YOU'RE QUITE MISINFORMED. A SECOND STIMULUS BILL IS ALREADY IN THE WORKS. IT WILL PROBABLY BE INTRODUCED IN FEBRUARY 2010, AND WILL BE ABOUT $2 TRILLION. COMMERCIAL REAL ESTATE HAS TO BE BAILED OUT, OR 2000 COMMUNITY BANKS WILL FAIL.

Is It Time to Recognize Reality?

It's the same old analysis, over and over again. What new is there to be said? One thing:

He rants about the political system failing to change and continuing to turn a blind eye. Why is this happening? Simple. The underemployment rate among the politically relevant population--those with a Bachelor's degree or higher--is only 10%. These are the people who matter politically, and frankly, it isn't that bad for them yet. Just ask them.

Yeah, they're not happy with their stock portfolios or the decline in the value of their houses--or a lot of other things. But as long as the job is there, the house is there, and the TV is there, you will not see THEM get politically active and move for any kind of change.

Maybe it's too bad, but then, maybe it won't happen either. Unemployment in this class never reached a level high enough during the Depression to produce any important policy change--and the country was STILL in the depression when the war began.

So if this guy wants to see change, all he has to do is sit around and wait until underemployment among the educated class reachs 40%. NOTHING will happen at 39.99999999999%.

40%.

By the way, we are moving from the West Coast Hotel v. Parrish "scrutiny" regime--which allowed this catastrophe by denying individually enforceable rights and gave the political system nearly all power over the facts (blame people themselves for this)--and toward the "maintenance" regime I discuss in my book The Eminent Domain Revolt.

You will never see economic activity increase again--NEVER--until the scrutiny regime is booted out of power, the maintenance regime is put in power, and the New Bill of Rights is enforced.

Enforce it or starve. It's up to you clowns.

U.S. Recession: More Unemployment, Sinking Dollar

Don't worry about inflation. Collapse in demand will outpace it by a country mile.

And do you really think all that stimulus money is watering trade? Nonsense. It bounces right back to Washington.

We are in the second phase of Andrew Mellon's "liquidate liquidate liquidate." The first was circling the wagons (making sure all the bonds are paid on). The second is shooting out at the Indians (destroying the American people).

The depression is proceeding right on schedule. But who's our candidate for World War III target?

Homebuilders: Time to Short Again?

I hate to tell you this but "shadow inventory" no longer serves as an indicator. Why not? Because people AREN'T paying their mortgages and the banks AREN'T foreclosing. Shadow inventory is foreclosed homes kept off the market. But this is an entirely new category of housing: "limbo" housing. It's VERY difficult to get hands around this, because the banks don't talk about it.

Nevertheless, I can report (I'm in the Bay Area) that the concept is spreading to commercial real estate: no payments on notes and NO foreclosure.

Where's it coming from? Washington. They don't want ANY more losses on bank books. Most community banks invested in CRE, and if that goes into foreclosure 2000 banks will fail. Can't have that.

So look for a new stimulus bill--prboably around $2 trillion in February 2010. This will simply be more fingers in the dike--no new fundamental premises here, just a continuation of the privatizing of gains and the socializing of losses.

However, it DOES mean you should think 19 times before buying a home, because the Federal Government is once again fiddling around with the statistics.

How much limbo housing is there. Someone I know who works in repo at Wells said simply, "A lot."