Trump Fires Comey – Right Decision – Wrong Timing


Trump fired Comey who was the head of the FBI. Trump said he fired Comey for his handling of an election-year email scandal involving then-Democratic presidential nominee Hillary Clinton. This is a perfectly valid argument, but he should have done that some time ago. Removing Comey now has only raised suspicions among Democrats and the Republic Elite who both want to stop Trump from really reforming anything for they like their perks as is. Worse still, this was a stupid decision that may now put in jeopardy his whole tax reform.

The timing of this is really bad when it is the FBI probe that is involving Russia and the claims that his people were in contact with Putin. Some Democrats compared this move to the “Saturday Night Massacre” of 1973, when President Richard Nixon fired an independent special prosecutor investigating the Watergate scandal.

Trump should have had better judgment in this matter. I question his real motives because he had plenty of time to fire Comey and should have done so for his whitewash of Hillary. Moreover, Comey was the Assistant US Attorney in the Southern District of New York – the most corrupt judicial post in the nation. Comey always did his part in protecting the bankers. His whitewash of Hillary was interlinked with that position and should have been questioned long ago.

Nevertheless, this raises concerns about Trump’s political advisers. Are they really this stupi

Secretary Tillerson Welcomes Russian Foreign Minister Lavrov To State Dept…


Earlier today, following a brief visit to the White House, Secretary Rex Tillerson welcomed Russian Foreign Minister Lavrov to the State Department.

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STATE DEPT – “I want to welcome Foreign Minister Lavrov to the State Department and express my appreciation for him making the trip to Washington so that we can continue our dialogue and our exchange of views that began in Moscow with the dialogue he hosted on a very broad range of topics. Thank you.”

~ Secretary Rex Tillerson

Again, the multidimensional politics of how President Trump utilized the leverage of Comey’s firing to diffuse the toxic antagonism with the Russian relationship is so far beyond diplomatic history making – modern historians have not yet been born who can aptly outline its consequence.

♦ President Trump stroked the Chinese Panda perfectly in Mar-a-lago.
♦ Today President Trump tickled the Russian Bear.
♦ We have already seen the jaw-dropping benefits from the Panda.
♦ Now we get to watch the results from the Bear.

History in our lifetime, and yet the media can’t even fathom the scope and details within the execution of a strategy…. right down to the optics of the tie.

“complicated business folks,… complicated business”

Officials Being Interviewed for Interim FBI Position – With VP Mike Pence Interview…


(Via ABC) U.S. Attorney General Jeff Sessions and Deputy Attorney General Rod Rosenstein are interviewing candidates to take over the FBI as interim director, after James Comey’s firing Tuesday.

Four candidates are being interviewed today, fielded from senior FBI and Justice Department officials and the heads of FBI field offices across the country, according to a Justice Department official.

The four candidates: FBI Executive Assistant Director Paul Abbate, who leads the agency’s cyber and criminal branch; National Counterintelligence Executive William Evanina; Special Agent Adam Lee, who runs the Richmond field office; and Special Agent Michael Anderson, who runs the Chicago field office.

A new FBI director is expected to be chosen and announced within the next 24 to 48 hours.

“The president is in the process of evaluating individuals who will be able to fill that spot, lead the FBI and restore the confidence in the American people,” Vice President Mike Pence said today on Capitol Hill.  (read more)

Watch Vice President Mike Pence:

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If the Majority Must Always Be Wrong – Can that Ever Change?


QUESTION: I find it interesting that you say the majority must always be wrong. I read Kenneth Rogoff’s comment on Davos and how the predictions there are always wrong. Do you think this can ever change or is it just how it works?

ANSWER: Yes, I reported on that comment by Rogoff. The MAJORITY must always be wrong for they are the fuel that moves markets as well as politics. I have been stating persistently that the Dow cannot “C R A S H” when the majority are bearish and retail participation is at historic lows. The question you pose is a very interesting one indeed.

I would have  to say NO. I do not believe that can ever change. Human nature is such that it never changes throughout the centuries. The issues may change with technology, but human responses will always be the same. A mother still cries for her son lost in war today as she did in ancient times.

What I do believe is we each have our own cycle. We progress through this journey of life hopefully learning from our mistakes. We buy the high and sell the low when we begin following the crowd. As we learn and progress with age, we end up being the person who sells the high to the novice just entering the cycle.

The best we can do is learn and survive ourselves. I do not believe we can change human nature. That is the same reason why Communism failed. It is also why politicians become corrupt. It’s too tempting for them, which is why they cannot stand Trump. He cannot be bought. No amount of money will change his life style of that of his family. It’s now all about accomplishment and being remembered.

 

Vancouver Real Estate Forecast – Regulation & Currency


QUESTION: I am new to your services. I purchased the Canadian report on the property markets. I am fascinated by your ability to forecast so many events. I understand it is the computer for sure and no individual has the time to forecast so many markets all the time. It appears your forecast on the real estate in Vancouver was right on target. Am I correct in assuming this was caused by the regulation changes and the trend in the US dollar?

Thank you

DK

ANSWER: Yes to regulation and the dollar. The Savings & Loan (S&L) Crisis in the 1980s was caused by a change in tax code whereby the US Congress wanted to tax the rich so they changed the tax credits in real estate. They took a bull market and turned it into a one-way sellers’ market with no bid. They had to order S&Ls to lend into the real estate market. So when the real estate market collapsed, they then blamed the S&L and went to even criminally prosecute directors. I provided the warning to members of Congress what would happen if they changed the tax code. Of course, they ignored the warning and the crisis unfolded as any person with common sense would have expected.

Charles Humphrey Keating, Jr. (1923–2014) operated the Lincoln Savings and Loan Association in Irvine California. When Lincoln Savings & Loan failed in 1989, it cost the federal government over $3 billion and about 23,000 customers were left with worthless bonds. The government, which caused the fail, then criminally charged Keating and of course they convicted him. The argument was he KNEW he would fail 7 years in advance so the bonds he sold he KNEW he would default on making it a crime. He served four and a half years in prison before those convictions were overturned in 1996. The theory of that case was absurd. I have never encountered the head of any company that was major where the director knew the company would fail 7 years in advance. The government made Keating the scapegoat for whole S&L Crisis Congress created.

Today, just add to this the Vancouver real estate market the trend in China trying to stop the outflow of cash that has been pouring out of the country. If you change the capital flows, you change the markets.

It’s not hard to put this together as long as you keep a global view and an understanding of history and how it unfolds for government is typically the source of all economic crisis. Politicians are absolutely clueless. The regulation changes in the property market in London set in motion the collapse in values there as well and in Australia they even outlawed foreigners from buying real estate.

Bitcoin Soars Over $1700 – 2017’s Best-Performing Currency


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Bitcoin is now up for 16 of the last 18 days, soaring over 50% in the last month and up almost 90% in 2017 – making its the year’s best performing currency.

There appears to be no specitic catalyst for today’s move as the surge in Japanese interest (as we detailed here) and news that Russia is considering, like Japan just did, to allow cryptocurrencies as a legal payment method are outweighing fears over ‘hard forks’, SEC rejections, and Chinese crackdowns.

 

One wonders whether this ‘spurious’ correlation has anything to do with Bitcoin’s rise – as Venezuela’s black market Bolivar plunges into hyperinflationary collapse, non-fiat currencies are bid…

We summarized the ongoing bitcoin frenzy as follows last week: “just as the Chinese bubble frenzy in bitcoin is fading, it may be replaced with a new one, in which thousands of Mrs. Watanabe traders shift their attention away from the FX market and toward digital currencies” and added that “If the transition is seamless, there is no telling just how far this particular bubble can grow.”

Five days later and $250 dollar higher, we are observing first hand how accurate this prediction may have been, although like last week, we have no way of telling how long this particular mania phase will last

President Trump Announces Third Wave of Federal Judicial Nominations…


[ Via White House ] President Donald J. Trump today announced his third wave of Federal judicial appointments. These appointments follow the successful nomination and confirmation of Justice Neil M. Gorsuch to the Supreme Court of the United States and the nomination of Judge Amul R. Thapar of Kentucky to serve as a Circuit Judge on the U.S. Court of Appeals for the Sixth Circuit. Specifically, the President today announced his nomination of these individuals to the following Federal judgeships.

♦ If confirmed, Amy Coney Barrett of Indiana will serve as a Circuit Judge on the U.S. Court of Appeals for the Seventh Circuit. Amy Coney Barrett currently serves as the Diane and M.O. Miller II Research Professor of Law at the Notre Dame University Law School. Professor Barrett teaches and researches in the areas of federal courts, constitutional law, and statutory interpretation—publishing scholarship in leading legal journals, such as the Columbia, Virginia, and Texas Law Reviews. Before joining the Notre Dame faculty, Professor Barrett clerked for Associate Justice Antonin Scalia of the Supreme Court of the United States and for Judge Laurence H. Silberman of the U.S. Court of Appeals for the D.C. Circuit. Following her clerkships, as an associate at Miller, Cassidy, Larroca & Lewin in Washington, D.C., she litigated constitutional, criminal, and commercial cases in both trial and appellate courts. Professor Barrett has also served as a visiting associate professor and John M. Olin Fellow in Law at the George Washington University Law School, and as a visiting associate professor of law at the University of Virginia. Professor Barrett received her B.A. in English literature, magna cum laude, from Rhodes College, and her J.D., summa cum laude, from the Notre Dame University Law School, where she served as Executive Editor of the Notre Dame Law Review.

♦ If confirmed, John K. Bush of Kentucky will serve as a Circuit Judge on the U.S. Court of Appeals for the Sixth Circuit. John Bush is currently a partner in the Louisville office of Bingham Greenebaum Doll LLP and is Co-Chair of the firm’s Litigation Department. Mr. Bush practices in complex litigation, including antitrust, securities, financial institutions, insurance, intellectual property, and product liability disputes. He has extensive litigation experience in state and Federal courts in many jurisdictions and in arbitration proceedings. Before joining Bingham Greenebaum Doll LLP, Mr. Bush practiced law at Gibson, Dunn and Crutcher LLP in Washington, D.C. Earlier in his career, Mr. Bush clerked for Judge J. Smith Henley of the U.S. Court of Appeals for the Eighth Circuit. Mr. Bush received his B.A., summa cum laude, from Vanderbilt University and his J.D., cum laude, from Harvard Law School.

♦ If confirmed, Joan L. Larsen of Michigan will serve as a Circuit Judge on the U.S. Court of Appeals for the Sixth Circuit. Justice Joan Larsen currently serves as the 111th Justice of the Michigan Supreme Court. Justice Larsen was appointed to the Court in 2015, and was then elected to that Court by the people of Michigan in 2016—winning every county in the state. Before assuming office, Justice Larsen served on the faculty of the University of Michigan Law School, where she was also special counsel to the Dean. An award-winning legal scholar, Justice Larsen taught for more than a decade at the University of Michigan, where she received the L. Hart Wright Award for Excellence in Teaching. Before joining the University of Michigan faculty, Justice Larsen clerked for Associate Justice Antonin Scalia of the Supreme Court of the United States and for Judge David B. Sentelle of the U.S. Court of Appeals for the D.C. Circuit. Justice Larsen received her B.A. from the University of Northern Iowa and her J.D. from Northwestern University Law School, from which she graduated first in her class and where she served as an Articles Editor on the Northwestern University Law Review.

♦ If confirmed, Kevin C. Newsom of Alabama will serve as a Circuit Judge on the U.S. Court of Appeals for the Eleventh Circuit. Mr. Newsom is currently the chair of the appellate group at Bradley Arant Boult Cummings, resident in the firm’s Birmingham office. Before joining Bradley, Mr. Newsom served as the Solicitor General of Alabama, where he directed the State’s litigation before the Supreme Court of the United States, the United States Courts of Appeals, and the Alabama Supreme Court. Mr. Newsom has argued four cases in the Supreme Court of the United States and has argued more than 35 cases in the United States Courts of Appeals for the Second, Third, Fourth, Fifth, Sixth, Seventh, Tenth, and Eleventh, and D.C. Circuits, as well as in state supreme and appellate courts and a Native American tribal appellate court. In addition to this service, Chief Justice John Roberts has twice appointed Mr. Newsom to the Advisory Committee on Appellate Rules, which advises the Judicial Conference of the United States concerning amendments and improvements in the Federal Rules of Appellate Procedure. Earlier in his career, Mr. Newsom clerked for Associate Justice David Souter of the Supreme Court of the United States and for Judge Diarmuid O’Scannlain of the U.S. Court of Appeals for the Ninth Circuit. Mr. Newsom received his B.A., summa cum laude, from Samford University, and his J.D., magna cum laude, from Harvard Law School, where he served as an Articles Editor on the Harvard Law Review.

♦ If confirmed, David R. Stras will serve as a Circuit Judge on the U.S. Court of Appeals for the Eighth Circuit. Justice David Stras currently serves as a Justice on the Minnesota Supreme Court. Justice Stras was appointed to the Court in 2010. Before his appointment to the Minnesota Supreme Court, Justice Stras was a professor at the University of Minnesota Law School, while also serving as counsel at the Minneapolis law firm of Faegre & Benson. Earlier in his career, Justice Stras clerked for Associate Justice Clarence Thomas of the Supreme Court of the United States, Judge J. Michael Luttig of the United States Court of Appeals for the Fourth Circuit, and for Judge Melvin Brunetti of the United States Court of Appeals for the Ninth Circuit. Justice Stras received his B.A. with highest distinction from the University of Kansas, his M.B.A. from the University of Kansas, and his J.D. from the University of Kansas School of Law, where he served as editor-in-chief of the Criminal Procedure Edition of the Kansas Law Review.

♦ If confirmed, David C. Nye of Idaho will serve as a District Judge on the U.S. District Court for the District of Idaho. Judge David C. Nye currently serves as an Idaho trial court judge in Pocatello, Idaho. Judge Nye was appointed to the state trial court in 2007 and was reelected by the people of Idaho to that position in 2010 and 2014. Previously, Judge Nye was a partner at Merrill & Merrill, Chartered, in Pocatello, Idaho. Judge Nye received his B.A. and his J.D. from Brigham Young University.

♦ If confirmed, Scott L. Palk of Oklahoma will serve as a District Judge on the U.S. District Court for the Western District of Oklahoma. Scott Palk currently serves as the Assistant Dean for Students and Assistant General Counsel at the University of Oklahoma College of Law in Norman, Oklahoma—a position he has held since 2011. Mr. Palk took this position after 19 years of public service as a state and Federal prosecutor, where he worked on death penalty, organized crime, and terrorism cases. Mr. Palk earned his undergraduate degree in Business Administration from Oklahoma State University and his J.D. from the University of Oklahoma College of Law.

♦ If confirmed, Damien M. Schiff of California will serve as a Judge on the U.S. Court of Federal Claims. Damien Schiff is currently a Senior Attorney at the Pacific Legal Foundation, a non-profit legal organization based in Sacramento, California. Mr. Schiff has extensive experience litigating cases concerning a variety of Federal and state environmental and land-use issues, including Sackett v. U.S. Environmental Protection Agency, a groundbreaking decision in which the United States Supreme Court upheld the right of landowners to challenge Clean Water Act compliance orders issued by the Environmental Protection Agency. Earlier in his career, Mr. Schiff clerked for Judge Victor J. Wolski of the U.S. Court of Federal Claims. Mr. Schiff received his B.A., magna cum laude, from Georgetown and his J.D., magna cum laude, from the University of San Diego School of Law in 2004.

President Donald J. Trump Announces Intent to Nominate Judicial Candidates

The President today announced his intent to nominate of these individuals to the following Federal judgeships.

♦ If confirmed, Dabney L. Friedrich of Washington, D.C., will serve as a District Judge on the U.S. District Court for the District of Columbia. Dabney Friedrich has a lengthy career of distinguished public service. Most recently, Ms. Friedrich served as a Commissioner on the United States Sentencing Commission, where she established sentencing policies and practices for the Federal criminal justice system by promulgating guidelines for congressional review and recommending changes in criminal statutes. Prior to that service, Ms. Friedrich served as an Associate Counsel to the President during the George W. Bush Administration, as Chief Crime Counsel to Senator Orrin G. Hatch, as an Assistant United States Attorney in the Eastern District of Virginia, as a trial attorney at the Department of Justice, and as an Assistant United States Attorney in the Southern District of California. Before holding those positions, Ms. Friedrich clerked for Judge Thomas F. Hogan of the District of Columbia District Court. Ms. Friedrich received her B.A., magna cum laude, from Trinity University, her Diploma in Legal Studies from Oxford University, and her J.D. from Yale Law School, where she served as a Senior Editor on the Yale Journal on Regulation.

♦ If confirmed, Terry F. Moorer of Alabama will serve as a District Judge on the U.S. District Court for the Middle District of Alabama. Judge Terry F. Moorer currently serves as a Magistrate Judge on the U.S. District Court for the Middle District of Alabama, a position he assumed in 2007. Before assuming his judgeship, Judge Moorer served as an Assistant United States Attorney in the Middle District of Alabama, as a Command Judge Advocate in Camp Arifjan, Kuwait, and as an attorney in the Office of Staff Judge Advocate in Fort Rucker, Alabama. Judge Moorer earned his Associate of Arts from the Marion Military Institute, his B.A. from Huntington College, and his J.D. from the University of Alabama Farrah School of Law.

(White House Link)

Canada’s Liberal Politics Behind Trudeau’s Antagonistic Trade Positions…


Actually, seeing this outlined in Reuters is a very good sign of things to come.  The pending NAFTA trade renegotiation between the U.S. (Trump/Ross) and Canada (Trudeau) correctly viewed through the prism of Canadian politics.  This is exactly the correct perspective.

The larger liberal need is for Trudeau to pander to the constituencies of Quebec, even if it means economic disaster and crushing collapse for the entire country of Canada.  This reality is exactly the ideological zero-sum perspective of the liberal mind and worldview.

Complete economic disaster is what Prime Minister Trudeau will do to Canada if he chooses to continue positioning against the U.S. with President Donald J Trump.

VIA REUTERS – Canada escalated a trade dispute with United States by making threats Washington called inappropriate in part because Prime Minister Justin Trudeau is under pressure to secure support in a key region ahead of the country’s 2019 elections.

Washington last month slapped tariffs on timber imports, prompting Trudeau to say he was considering a ban on exports of U.S. coal through Pacific ports.

As well as lumber, the administration of President Donald Trump has targeted Canadian dairy farmers, while Boeing Corp (BA.N) launched a trade challenge against Montreal-based planemaker Bombardier Inc (BBDb.TO).

All three are vital to the economy of Quebec, Canada’s second most-populous province. And Quebec is seen as vital to Trudeau’s hopes of maintaining a strong grip on power in a national election set for October 2019.

As contentious talks on renegotiating NAFTA draw closer, Trudeau has little choice but to defend dairy farmers and offer help to the lumber industry, even though that is likely to prompt fresh U.S. challenges.

“Quebec is the key,” said one senior Liberal organizer.  (please read full article)

President Trump, Secretary Wilbur Ross and Trade Rep Robert Lighthizer will absolutely crush any international trade opponent in direct bilateral trade deals.  It’s really not hard for them to do; we are the biggest market in the world.

Shutting down access to the U.S. ($20+ trillion) market is the ultimate leverage and entire national economies can be forceably wiped out.  In an applied fair market system the end result of any renegotiated trade deal will be vastly more beneficial to U.S. workers and business interests.  Stunningly so.

In addition to the size of our economy, America is profoundly unique in that there is almost no product on the planet that cannot be replicated in the United States.  We are blessed with an abundance of energy, raw material, minerals and rich fertile land that can provide the basis for domestically manufactured/created products.  It is a remarkable point of distinction not found in any other region.

Additionally, our inherent American DNA strain is one of entrepreneurial existence.  We know how to do things, create things, and think completely outside the box on new and innovative ideas for things.   Yes, we are exceptional like that.

Reminder:

  • Florida Power and Light won the prestigious International Edward Demming award for excellence in multi-platform engineering and efficiency superiority. They didn’t blow every global PhD business intellectual out of the water with slide rules, CAD programs and engineering acumen. They did it with hard hats and dirty fingernails.

Because they lost the award, the Japanese spent 6 months studying FPL and later published a 1,000 page dissertation essentially saying FPL “wasn’t really good, they were just lucky”….. FPL field leadership laughed, took out markers and wrote on the back of their hard hats: WE’RE NOT GOOD, WE’RE RUCKY….

  • When every single Kuwaiti oil field was blown up by Saddam Hussein, they said it would take 5 years to cap them all off and restart their oil pumping industry. The Kuwaiti’s and Saudi’s called Texans, who had them all capped and back in working order in 6 to 10 months.

We are a nation that knows how to get shit done.

  • When the Northern Chile mine workers were trapped two miles underground, they said no-one could save them. Who did they call for help? A bunch of hick miners from USA coal country who went down there, worked on the fly, engineered the rescue equipment on site, and saved everyone of them….

That’s our America.

  • When a half-breed Islamic whack job, armed with an AK-47 and a goal to meet his fourty-seven virgins, began opening fire on a train in France – the Americans on board didn’t run to the nearest safe room and hide themselves amid baguettes and brie. They said “let’s go”, and beat the stuffing out of that little Islamic nut with a death wish.

Legion d’Honneur or not, that’s us.  That’s just how we roll.

Lady Liberty can stroll along the Champs-Elysées with a swagger befitting Mae West because without her arrival they’d be speaking German in the Louvre.  Yet for the better part of the past decade a group of intellectual something-or-others have been teaching an insufferable storyline that it’s better to be sitting around a campfire eating sustainable algae cakes and picking parasites off each other.

Enough.

When I hear Donald Trump say “Let’s Make America Great Again”, I also hear the familiar echo “cowboy up” people.

It’s high time we stop being embarrassed about our exceptional nature, and start being proud of it again.   Because when it matters most, when it really counts, when it’s really needed, there’s a whole bunch of people all around this world of ours that are mighty happy when swagger walks in to solve their problems.

Yeah, “let’s make America great again”.  Swagger on !

 

Emerging Market Debt Expanding Twice the Rate of 2016


The view that BREXIT is a passing phase and Europe will extinguish the swell of populism, has led to more debt in dollars being racked up at a faster pace than ever in US dollars among emerging markets, which stood at about 50% of the US National Debt. The debt in new offering has exploded as bears continue to say the Dow will crash and the dollar with it. This had led to an extraordinary offering of new dollar debt which is close to $160 billion by the 1st of May, 2017. This represents more than twice the dollar value reached by May 1st last year.

The willingness of investors to buy debt securities is rooted in these bearish forecasts. I was recently asked to do an interview because they said they were desperate to find someone who was bullish on the equities market long-term. The vast majority keep touting the dollar will crash with the share market and this is fueling the explosion in new debt along with the expectation that interest rates will rise – not fall.

Investment funds specializing in emerging market bonds reported inflows of $ 1.9 billion, according to data provider EPFR Global. Also, exchange-traded funds from this sector were able to show more than $200 million. Investors from the US and Europe are currently particularly interested in corporate bonds from countries such as Brazil, Indonesia or Argentina, since they yield comparatively high returns and have rather short maturities. This is similar to the Russian bond collapse back in 1998, which took down Long-Term Capital Management.

The bond debt from developing countries is growing exponentially with total commitments reaching around $425 billion+. This crop of bonds have an average maturity of 6.3 years as compared to 10 year maturities for investment grade rated as risk-free.

This is adding to the crisis we see on the horizon and a dollar rally will set off a debt crisis like nobody has ever seen in more than 100 years. Private debt among emerging markets is almost about $1.6 trillion with maturity due to foreign creditors over the next five years. It looks like about 90% of this debt is in US dollars.

“The Crisis Has Become Pandemic” – System To Collect Defaulted Student Loans Is No Longer Functioning


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The system used by the Dept. of Education to collect on defaulted student loans came to a standstill in the last month, leaving an estimated 91,000 accounts in limbo, when the agency ordered debt collectors under contract to stop making collections on accounts.

As Consumerist’s Ashlee Kieler reports, consumers who expected their student loan payments to be deducted from their bank accounts this month have reportedly found the funds untouched, and their calls to the companies unanswered thanks to a Department of Education’s order prohibiting the debt collection companies from working on default accounts in response to two lawsuits against the agency.

The strange turn of events began with a lawsuit filed by two debt collection companies, who claim they were unfairly were fired by the Obama-era Education Department for poor performance. On March 29, the judge issued a temporary restraining order that prevented any new defaulted borrowers from being assigned to debt collectors and put into rehabilitation programs. Instead, the borrowers have piled up inside the department’s system, waiting.

On April 21, the government ordered the debt collectors involved in the suit to stop work altogether on defaulted accounts: no phone calls, no withdrawals from student accounts, nothing.

The Education Department and the Justice Department are partly to blame for “unnecessarily” throwing a wrench into the entire defaulted loan system, one attorney with knowledge of the case told BuzzFeed News, because they’ve been unable to come to a resolution that allows the loan system to kick back into gear. “There’s no fix in sight.”

Judge Susan Braden has extended the emergency order [PDF] several times since then, noting that it was made to “preserve the status quo to protect the interests of all parties and to afford the government an opportunity to reach a global solution” to two lawsuits against the Dept. of Education.

The cases, filed separately by several debt collection firms, claim that the Dept. of Education unfairly terminated their contracts with the companies.

More recently, the Dept. of Education ordered servicers to stop work on defaulted accounts. The actions, the companies argued in court filings [PDF], “fundamentally alter the status quo and are not fiscally responsible to the borrowers or to the federal taxpayers.”

“Thus, the well-documented student loan crisis will become a pandemic not because this Court ordered that result, but because [Dept. of Education] thinks that is what this Court expects,” the companies argue.

This week, the Dept. of Education submitted a court filing detailing how the Judge’s order and its subsequent suspension of collection activities has affected consumers, Career Education Review reports.

The Dept. claims that the action “has effectively shut down the Government’s defaulted student loan collection program,” with an estimated 91,000 borrowers now stuck in limbo because their accounts weren’t assigned to a debt collector in April.

Additionally, the Dept. argues that by not assigning borrowers to collectors “tens of thousand of borrowers have been prevented from gaining access to rehabilitation programs” and other benefits.

BuzzFeed News reports that debt collection agencies say that since the Department ordered a stop to collection activities they have been inundated with calls from borrowers.

However, the companies can’t help the customers. This, they claim, has resulted in thousands of messages and complaints from borrowers.

The collectors, BuzzFeed reports, claim that because of this borrowers will re-default and those enrolled in repayment programs could lose their eligibility.

Suzanne Martingale, policy staff attorney for our colleagues at Consumers Union, tells Consumerist that the stop in collections and payments could do “untold damage to borrowers.”

“Meanwhile, they’re going to rack up a ton of charges as more interest accrues on their loans,” she adds.

As the work stoppage drags on, consumer protection advocates are confused about where borrowers stand, especially given a tangle of other lawsuits involving the loan companies and the government. “The whole process has been completely mind-boggling,” said Persis Yu, the director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, who called the standstill “mystifying from a consumer protection standpoint.”