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."

Dollar Declines Set to Continue

Fear not. The rest of the world's economies will collapse even more rapidly than ours, and our currency will then strengthen as the last currency standing. But it will be the depths of a depression. Sure, a dollar will buy a lot. But who will have a dollar?

As for inflation, don't underestimate collapse in demand. That will always be ahead of inflation, from now on. Prices will sink to NOTHING.

What if It Is a 'V' Recovery?

Just read the book, The Eminent Domain Revolt. It's for sale at Amazon.

By the way, what I just wrote is standard stuff you will read in ANY Constitutional law book. I wrote it, however, because so many economists write on about society without knowing ANYTHING about the legal structure. This is completely idiotic.

For example, you may well wonder how bondholders can be screwed by a lot of these "bailouts" or how any of the "stimulus" provisions can survive legal challenge. It's simple: with respect to any fact you please--money, property, taxation, stocks--the Federal Government need only show that its policy is rationally related to a legitimate government purpose.

I'm especially amused by "property rights" advocates, who seem utterly surprised to learn that property only enjoys minimum scrutiny, and that the law has virtually NO idea of what , in FACT, property is.

How can government get away policy it generates with respect to property? Simple. Advocates of property rights (Scalia among them), have done such an AWFUL job of factually studying property, that they have never been able to convince the Court that property is an important fact, that it enjoys a higher level of Constitutional scrutiny than minimum scrutiny, and that therefore plaintiffs have a right to introduce a wide variety of facts regarding property.

Under the minimum scrutiny regime, you have virtually NO right to introduce facts.


Any lawyer knows this. Why don't these pathetic "property rights" advocates? It's really appalling how ignorant Americans are. Their ignorance is how the scrutiny regime remains in "business."


On Sep 06 05:26 PM John Lounsbury wrote:

> John Ryskamp - - -
>
> Wow!
>
> I would like to read an elaborated discussion of what you wrote.
> Any links?