What the GDP Report is Screaming to the Fed – There is a loud and clear message coming from today’s BEA report on the U.S. economy:  it is time for the Fed to adopt an level target for total current dollar spending.  The report showed that final sales of domestic product grew at an annualized rate of only 2.4%.  This is far too weak of a growth rate in aggregate demand for there to be a robust recovery.  Moreover, it means that  that total current dollar spending is falling further below its long-run trend.   This can be seen in the figure below:  The fitted trend puts final sales at about $16.5 trillion.  Actual final sales is around $14.6 trillion, a whopping $1.9 trillion shortfall.   That the Fed can let aggregate demand fall this far below trend is mind-boggling.  It is even more staggering when one considers that there were forward-looking indicators all along that were telling the Fed it was passively tightening monetary policy by allowing this development to happen.  This need for an aggregate demand target is further supported by the following two figures.  The first one shows the year-on-year growth rate of final sales of domestic product over the most of the postwar period.  It  shows how far aggregate demand has to go just to get back to a normal growth rate of about 5%.
Chinese Internet Racketeering, Coming Soon to A Pipe Near You – The NYT had a piece about a Chinese telecom equipment provider, Huawei Technologies, which is seeking to break into the US market through a proposed $3 billion wireless equipment deal with Sprint. US information and hardware providers have long had a close, lucrative collaboration going with the repressive Chinese regime. This deal would be a kind of cultural exchange.   The threat is that Chinese knowhow will be put to use by US telecom rackets to engage in transmission discrimination (gutting net neutrality) and content censorship. It might be able to do both of these by stealth. The real threat, in other words, is simply that the Chinese, with their more extensive practical experience, will help the US rackets do the things they already do and want to keep doing at an escalated level. 
First They Came for the Raw Milk, And I Did Nothing – I’ve never drank raw milk, but it’s my right to do so. Humanity has done so for tens of thousands of years. On a broader level, we have a human and constitutional right to grow and produce our own food and distribute it among ourselves as citizens. When you read the history books few things stand out as so emblematic of tyranny as feudal designations of all the produce of the land and the farmer as belonging to the king or the nobles. Therefore it’s a metric of our recrudescence into a new feudalism that a new King, in the form of corporate agriculture and its government lackeys, is trying to proclaim itself the total lord of the food demesne, with the full force of law and the full violence of armed robbery. Since it’s a “fringe” culture, raw milk is ground zero for the government’s war on food freedom. Corporatism thinks that if it can make raw milk persecution the template, and establish here the legal, political, and tactical precedents, it can from there launch a broader assault on all production and distribution of food outside the corporate system.
The Corporatism of MERS – Taken in itself, MERS is just a lesser moving part of the big mechanism of the Foreclosuregate Land Scandal. It’s a malfunctioning gear, not the ghost in the machine. The most important features are the break in the chain of ownership, leaving the liens homeless and vagrant, and the vagrancy of the securities in the MBS trusts. In both cases we seem to be left with nothing but unsecured paper. The MBS themselves are worthless, and neither kind of paper directly touches the house. All of this has been propped up in the eyes of the law by massive, systematic forgery and perjury. The culpable conspiracy to commit fraud must encompass all officers of every entity involved, right up to the CEOs of BofA, Wells, Citi, and JPM. (Goldman Sachs and Morgan Stanley as well, since they knew how the MBS scam worked.) MERS is just an electronic registry set up to secretively toss around ”ownership” in the form of virtual ones and zeroes but not in the form of the physical paper required for it to have any force of law. This was intended to render the conveyor belt from originator to trust and servicer to investor more “efficient”, meaning cheaper in labor and tax evasion. It was also helpful in tranche fraud, since rather than the mortgages actually being sliced and diced ahead of time, the computer waited until one went bad and then assigned it to the proper tranche so the favored gamblers wouldn’t take the hit. The system was like a million Schrodinger’s cat boxes where people bet on how many cats were dead, except that the connected players were tipped off whenever a cat died and always got to avoid those boxes. Nearly a year ago I wrote about this, and I think my description and assessment hold up pretty well
Commercial Real Estate: "Normal market conditions years away" – From the Las Vegas Sun: Commercial real estate’s slide likely at an end The commercial real estate market led by the office sector appears to have halted its slide analysts said. With little construction and the demand for space outpacing those who are giving it up, it appears the office market isn’t going to worsen, “While it’s easy to latch on to even the smallest bright spot, the return to more normal market conditions is years away, but must start somewhere,” Joyce said. It is possible the office vacancy rate has peaked – or is near the peak as the the Reis vacancy data suggests – but it will take a long time to absorb all the excess office space. And that means non-residential investment in office buildings will be low for some time.
Trick or Treat – Walmart and Local, Sustainable Food – America needs millions more small farmers. The imperatives are economic, political, and physical. We need food relocalization, our own structures, our own farmers’ markets, garden markets, CSAs, distribution networks. We need to organize, manage, and of course own all this ourselves, completely outside the corporate system. One word used to encompass all of this is sustainability. It’s not just corporate production which is destroying our democracy and health, but corporate distribution. Therefore a prospect like Walmart allegedly emphasizing local foods is a great danger. Gandhi famously said, “First they ignore you, then they ridicule you, then they fight you, then you win.” He didn’t add, “then they try to co-opt you”, but it goes in there somewhere between ridicule and where we win. It proves we’re on the right track, that what we’re doing has “profit” potential, and even better that it’s a significant rival to corporate practice.

How many months it would take to sell banks’ current and shadow inventory of foreclosed homes. Banks’ vast pile of foreclosed homes doesn’t appear to be diminishing. That’s a troubling sign for the future of the housing market. Back in April, this column tallied up all the foreclosed homes sitting in banks’ inventory, as well as the “shadow” inventory of homes in the foreclosure process or on which owners had missed at least two mortgage payments. At the time, we reported that at the current rate of sales, it would take 103 months to unload it all. Over the past six months, that number has actually risen. Banks managed to pare down the shadow inventory, but largely by taking possession of foreclosed homes. As of September, they owned nearly 994,000 foreclosed homes, up 21% from a year earlier. The shadow inventory stood at 5.2 million homes, down 7% from a year earlier. Grand total: 107 months of inventory.

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