Did we mention we bombed the shit out of the bank?!

Here's the quick sitch: Kabul Bank - Afghanistan's largest - is under attack by depositors who have removed some $155 million in deposits in the last two days after news that the bank had been running a questionable operation and loaning money to insiders like Mahmood Karzai, brother of Afghan president Hamid Karzai. Karzai is a Kabul Bank shareholder, naturally. The bank's chairman Sherkhan Farnood decided an island shaped like a palm tree in Dubai would be a great investment so he took it upon himself to invest $160 billion of the bank's assets in said palm tree islands and, for convenience's sake, put the properties in his name. Who wouldn't?

The U.S. government didn't find these activities to be entertainment and swooped in to stop the nonsense. Unfortunately now they may be required to prop up Afghanistan's already precarious financial system. Oh well, they're experts in doing that at this point, if they could save Bank of America I'm sure they can save some corrupt Afghan bank.

MSNBC:

A senior U.S. official in Kabul told NBC that in recent weeks, Gen. David Petraeus, commander of international forces in the country, and other U.S. officials had “forcefully” urged President Karzai to crack down on the bank.

After reviewing the bank’s activities, “we didn’t like what we saw,” said the official. In particular, the official said, U.S. officials — “and many Afghans” — were upset that the country’s assets, much of which has been derived from billions of dollars in western aid, were being taken out of the country and invested elsewhere.

The U.S. prodding apparently prompted President Karzai to direct Afghanistan’s Central Bank to move in and oust Farnood, the bank’s chairman, and Khalilullah Frozi, the bank’s chief executive officer, from their positions. The reports of the move, first reported by the Washington Post, triggered the run on deposits that has now threatened the bank.

U.S. officials, under the direction of David Cohen, assistant secretary of the treasury for counterterrorism, are closely monitoring the situation and have dispatched a team to assist officials of the Afghan Finance Ministry as they grapple with how to deal with fallout from the bank withdrawals, a Treasury Department official said Thursday.

"U.S. officials in Kabul are in close contact with the Central Bank Governor and are monitoring the situation. The Treasury Department recently sent a Quick Response Team to offer advice to the Central Bank and we will continue to work with Afghan authorities in support of their efforts to ensure a prompt and effective response," the official said in an email.

Hahahaha "advice". See but the only advice Treasury knows how to give starts with "write a blank check" and ends with "don't worry, it'll come out of the taxpayer's ass later". Too bad that may not be an option for our little financial friends in Afghanistan.

No kidding, Karzai thinks the Treasury department (our Treasury department) should commit to saving Kabul Bank. He swears the money's good, you know, they just need, um, a co-signer.

Here's what I think: if illegals can afford to live in this city and don't mind having to step over human excrement to get to their $7 an hour dishwashing job at the hipster restaurant, let 'em stay. I really don't care. But can we please wait until I leave town to officially convert this third world toilet into a full-on refugee camp? Thanks.

SF Gate:

U.S. immigration officials said Wednesday they will consider San Francisco's request to opt out of the controversial Secure Communities program that makes it easier for federal authorities to track down and deport undocumented immigrants.

Until now, the Immigration and Customs Enforcement agency, known as ICE, has rebuffed San Francisco's contention that participation in the program is voluntary. San Francisco Sheriff Michael Hennessey, a vocal opponent of the program, has said repeatedly that as head of the city's jail system he does not want to participate.

Who exactly is San Francisco trying to be a safe haven for? Certainly not its citizens who are accosted by the homeless, pissed off Muni drivers, tourists and of course our own SFMTA which terrorizes us on a daily basis for having the nerve to park on our own neighborhood blocks.

Whatever, I hope they have fun trying to create an illegal immigrant-filled, hooker-infested, overpriced car-free utopia because I am so out of here. Pedro and his fourteen cousins can have my cracker box of an apartment.

I am beginning to think that we can extend and pretend indefinitely as the floor should have dropped out of this bitch back in March of 2009. Anyone else get that creepy invisible hand feeling tickling their spine?

Reuters:

Pending sales of previously owned U.S. homes rebounded unexpectedly in July and new claims for jobless benefits fell last week, helping dampen fears the economy could face a double dip recession.

The data on Thursday, including sturdy sales from U.S. retailers last month, followed a report on Wednesday showing a surprising gain in manufacturing activity and suggested the economy retained some underlying strength.

"This is an economy that has hit a soft patch. It's not an economy that appears to be heading toward a double-dip recession," said Brian Levitt, an economist at OppenheimerFunds in New York.

Investors appeared to agree earlier fears of a double-dip recession might have been overdone as they sold long-dated U.S. government bonds and bought some stocks. The broad Standard & Poor's 500 Index .SPX was up 0.32 percent at midday.

Listen, there are no real investors left in the S&P or anywhere else for that matter, it's just robots versus the invisible hand up in that bitch and apparently that little pissing contest can go on pretty much forever. Sure something like 22% of America is unemployed (don't let the government statistics fool you) and sure decent folks are losing their homes left and right but who cares, DOW 28,000,000 baby!!

If that's the case... where'd all the bulls go?

If you ask me I think we just saw our last sputter, that invisible hand has to be tired from jerking off HFT robots day in and day out for the last year and a half.

Yes because Lord knows we haven't thrown enough money into that black hole yet.

Via the Boston Globe:

Federal and state policy makers should take a broader approach to the foreclosure crisis, not only adopting measures to prevent foreclosures and stabilize housing, but also providing aid to help the hardest hit communities address underlying social and economic issues, said Eric Rosengren, president of the Federal Reserve Bank of Boston.

In these communities, high foreclosure rates appear symptomatic of deeper problems such as poverty, crime, and failing schools, said Rosengren, speaking today at a Federal Reserve conference in Washington. As a result, Rosengren said, a solution to the foreclosure crisis might be to send more money to local governments and nonprofits to tackle these broader challenges.

"Too little focus has been on community problems because the focus has been targeted to housing and foreclosures,'' Rosengren said. "Rather than treating the symptom -- the high [foreclosure] problem -- we need to better understand how to resolve the more general problems in communities that lead to higher concentrations of [foreclosed properties] and exacerbate the effects."

He's wrong, of course, because foreclosures are certainly not limited to low income areas, no matter what his little Boston Fed survey says. See also: Las Vegas, the San Francisco Bay Area, any lame town in Florida, etc etc. We aren't talking about rows of trap houses in Detroit, we are talking about a fundamental shift in America's standard of living here, stupid. Welcome to the third world, leave your malaria at the door please.

It takes an economic rocket scientist to figure this shit out?

The next figure highlights that high concentrations of REO are not the only problem afflicting those communities. Zip codes with four or more REOs per square mile also have higher property crime rates, higher rates of low birth-weight babies, higher unemployment rates, and weaker small business activity. Note that all these charts are for the time period that generally precedes the foreclosure crisis, so these communities were already challenged.

Wow, thank goodness these asshats are totally on the problem. Fire up the press, we have non-profits to bail out!

Alright so he didn't come out and admit he's a big fat liar but it's about the closest to that admission as we might ever get so enjoy it, kids.

Bloomberg:

Federal Reserve Chairman Ben S. Bernanke said he regretted not saying in congressional testimony shortly after the failure of Lehman Brothers Holdings Inc. in 2008 that the central bank had no authority to save the firm.

The testimony at the time “has supported this myth that we did have a way of saving Lehman,” Bernanke said in response to questions during a Financial Crisis Inquiry Commission hearing in Washington today. “I regret not being more straightforward there because clearly it has supported the mistaken impression that in fact we could have done something.”

Is Bernanke sure that the Fed had the authority to save the firms they did? Is Maiden Lane (I, II and III) within the Fed's authority? Is it in the Fed's authority to lie and say the crap they took on their balance sheet isn't really junk grade like it is?

Me thinks the baldy doth protest too much.

Get back in your cube, you're fired!

Whuzza? Who gets the honor now?

Dave & Buster's, Inc., a leading operator of high volume entertainment/dining complexes (the “Company”), today announced that effective August 25, 2010, Ernst & Young LLP (“E&Y”) has been dismissed as the Company’s independent auditor. The Audit Committee of the Board of Directors of the Company approved the dismissal of E&Y on August 24, 2010.

E&Y’s audit report on the Company’s consolidated financial statements for each of the past two fiscal years did not contain an adverse opinion or disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles.

During the Company’s most recent two fiscal years and through the subsequent interim period on or prior to August 25, 2010, (a) there were no disagreements between the Company and E&Y on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of E&Y, would have caused E&Y to make reference to the subject matter of the disagreement in connection with its report; and (b) no reportable events as set forth in Item 304(a)(1)(v)(A) through (D) of Regulation S-K have occurred.

(source)

Sooooo... anyone want to wildly speculate as to why E&Y got canned? Maybe it has something to do with Uncle Ernie's Whack-a-mole skills or Vice President Joe Biden being banned from D&B's (the Onion)?

 Pic credit: CarolLeeDesigns' HateMail via Etsy

...especially if you are into accounting. You've been warned.

Five Ways Not To Suck As an Accounting Blogger (me dry-humping my soapbox via Going Concern)

"the feds" not "the Fed" which would be this guy

Psst, it's "the Fed" not "the feds" and if you aren't clear on the difference, perhaps A) we need to talk and B) you shouldn't be writing about things you do not understand. Très sloppy of you, Politico, I'd be ashamed but I am not affiliated with your prestigious online publication and have my own shit to be ashamed about.

Former Lehman Brothers Chief Executive Officer Richard Fuld defiantly told a financial inquiry panel Wednesday his company could have survived the 2008 financial meltdown if it had only received some cash from the feds.

He told the Financial Crisis Inquiry Commission Wednesday afternoon that the company failed only because it was denied support given to its competitors, like Morgan Stanley and Goldman Sachs. He said the company made some mistakes, but those errors were also made by its competitors and by government officials.

The remarks in a Senate hearing room show that Fuld is still angry over the fact that Lehman was allowed to fail while other big banks got a government bailout.

“The big mistake that was made was that Lehman, as a sound company, was mandated to file for bankruptcy,” he said. The company had “derisked” in 2007 and 2008, he said, and added that he never received a negative assessment of the company’s amount and quality of collateral, which the Fed says was insufficient.

Once again, let's go over it. The feds = those guys who investigate mafia murders. The Fed = those guys who murder the purchasing power of the dollar. Got it? Not the same. I know it's really confusing since the Fed uses that whole .gov we're government we swear crap but come on, even my 7 year old knows Obama isn't Ben Bernanke's boss. Well of course my 7 year old does, maybe he should be writing for Politico instead of this Simmi Aujla hack who doesn't know the difference between "feds" and "the Fed"?

You fail, Politico. Worse than Lehman did.

Nothing like a little corporate crisis management to give a major bump to struggling media advertising.

NYT:

It will come as little surprise to newspaper readers and television watchers, but BP significantly increased its spending on advertising after the April 20 Deepwater Horizon explosion and oil spill. BP spent $93.4 million on newspaper, magazine, television and Internet advertising in the three months after the disaster, three times what it spent in the comparable period in 2009, the company reported to Congress.

The oil giant, based in Britain, told the House Energy and Commerce Committee that it had put fewer television and radio commercials on the air after the accident than it did a year earlier, but those it did were longer and ran nationwide.

The company also said it had broadened the markets in which it ran local newspaper advertisements, hitting 126 markets in 17 states. The company concentrated heavily in states directly affected by the spill — Louisiana, Alabama, Mississippi and Florida. It also took out ads in California, Connecticut, Delaware, Georgia, Illinois, Indiana, Ohio, Maryland, Michigan, New York, Pennsylvania, Texas, Wisconsin and the District of Columbia.

BP also gave $89.5 million in grants after the accident for tourism promotion along the Gulf Coast.

Of course, it's really not the best reason to make the decision to increase ad spending — and demonstrates why media companies need to keep the business and news units separate so the reporting isn't tainted by the ad revenue. But maybe it's heartening to see BP contributing directly to the economy.

Maybe. Seems the ads were made more for BP than the viewers, if you agree with the commenters in the NYT story.

"These ads made me sick. I'm sure I'm not alone.," says LM of New York. You are not alone, LM. Meet MH of Los Angeles: "The ads BP is running are disingenuous. They take no responsibility and come off as if they are sticking around to help with the clean up out of altruism. Why can't they just run an ad that say, 'we're sorry'?"

That's a different kind of crisis management. It's a little late to be expecting it from BP.

Obviously.

If you haven't heard, some weird shit went down at Discovery Channel HQ involving a eugenicist who totally read way too much in to An Inconvenient Truth. Though we really have no idea what James Lee what thinking, we can't let this one go without saying Kate Plus 8 is a monstrosity of excess and should be immediately taken off the air. Of course we're cool with those overpopulating freaks The Duggars because let's face it, 7 out of those 19 kids are going to end up pretty damn entertaining when they hit the dysfunction circuit in a few years and let all of us watch on reality TV. And regardless of our feelings on the matter, flipping out isn't the way to get the point across.

Here's an outtake from Lee's wacky life. That's apparently him tossing cash around... for baby formula and Pampers?

Ah yes, it makes perfect sense now. Kids, meet San Francisco Fed's soon-to-be Chief Executive Inflater. The rumors must be true, she's a perfect fit to replace current Chief Executive Inflater Janet Yellen.

Spend spend spend!!

WSJ's Washington Wire:

In her final speech before returning to academia, Romer offered a defense of the measures taken so far, in particular the Recovery Act. She said the economic stimulus program prevented a much worse recession but said more needs to be done to get the economy back on track.

“Policymakers need to find the will to take the steps needed to finish the job and return the American economy to full health,” she said in the address at the National Press Club.

Romer, who chairs the Council of Economic Advisers, has long been seen as an advocate for spending more than many in Congress – and some within the White House – have been willing to stomach. She made that stance clear in her remarks, saying “The only surefire ways for policymakers to substantially increase aggregate demand in the short run are for the government to spend more and tax less.”

And you wonder why we're doomed, look at the people Obama chose to surround himself with. I'm suuuuuure not spending enough was totally our problem. Are you fucking kidding me? This is so backwards even John Maynard Keynes himself would question her logic.

Don't let the door hit you on the way out, Christina.

Damn right they aren't here to fix the economy and it's about time someone recognize that. If it were up to me they wouldn't exist at all except to process checks and other payments and serve as National Bank of the United States so the government has a checking account to draw from (opted out of overdraft protection, of course, since we all know they've bounced about $1 trillion worth of checks of late).

Thankfully my favorite Fedhead Richard Fisher is here to remind us all of the Fed's precarious position and, more importantly, function in this bizarre economic environment of ours. Forgive the TLDR and read it any damn way.

Check out "Monetary Policy Going Forward", remarks today to the Greater Houston Partnership:

With the efficacy of most financial markets reasonably restored and inflation subdued, the question then is how the Federal Reserve might best do its part to restore employment growth.

Here’s the rub. Note that I say, “Do its part.” The Fed is not the end-all for curing every economic pathology. To return to my naval analogy, we are not the only authority in the pilot house. We play a crucial role in conditioning the economy, but we do not play the only role. Fiscal and regulatory authorities share significant responsibility for incentivizing economic behavior through taxes, spending and rulemaking.

With this in mind, I have been outspoken about what I refer to as “random refereeing,” by which I mean the tendency for lawmakers and rule makers to create programs that hinder, rather than advance, the incentive for the private sector to expand its payrolls. I spoke of this recently in San Antonio, noting that among the CEOs I regularly survey before every FOMC meeting―leaders of companies nationwide that vary in size from nine employees to over a million and represent a broad cross section of goods and service companies―the prevailing sentiment is that politicians and officials who craft and enforce taxes and rules have been doing so in a capricious manner that makes long-term planning, including expanding payrolls, difficult, if not impossible.

Just last week, I sat in on a financial planning and budgeting discussion with middle managers of one of America’s leading consumer goods producers. Asked directly how they determine the all-in cost of an employee, the CFO replied, “We can’t. We can’t because we don’t know what will happen on the tax front or with social overhead.” So their current plan is to withhold payroll expansion in the United States while investing their growing cash reserves in driving productivity enhancement from their current crop of over 200,000 employees, of which about 70,000 are located in the United States. Meanwhile, they are searching to expand their operations in other countries that “offer better incentives, stability and a more entrepreneurial environment.” The sentiment expressed by this CFO is not atypical. A careful reader of the minutes of the last FOMC meeting will note that several participants in the committee’s deliberations “reported that business contacts again indicated that uncertainty about future taxes, regulations, and health-care costs made them reluctant to expand their workforces. Instead, businesses had continued to meet growth in demand for their products largely through productivity gains and by increasing existing employees’ hours.” This does not bode well for job creation here at home.

The retarding effect of heightened uncertainty over the fiscal and regulatory direction of the country makes it difficult to kick-start the transmission mechanism of the economy. One might reasonably posit that the gas tank of those who have the capacity to hire―the private-sector businesses of America―is reasonably full. And one might conclude that the Fed, having cut the cost of interbank overnight lending to near zero and used quantitative easing to coax the entire yield curve downward, has driven the cost of gas to virtually nil for both the government and those businesses that are creditworthy.

The issue now is how that fuel might be released so as to propel the engine of job creation and drive a happier pace of economic growth.

As you recall, he's complained about this before and he's completely right. Businesses that could hire won't because we still don't know shit about the impact of Obamacare, nor are we convinced that the tax and regulatory burden of additional employees will be easy to handle. So until the government gets its head out of its ass and figures these things out in a way that does not leave businesses wondering
what they did to deserve such horrible treatment, unemployment will continue to surge and the unemployed will continue to suffer. Gee, what a novel concept eh?

Stop looking to the Fed to "fix" this, we are all so much better off when they stay the hell away from creative intervention that isn't in their mandate and stick to what they know: debasing the dollar and processing checks.

I remind dear reader that these views are my own and do not necessarily represent those of my Fedbashing colleagues and/or associates. Bitches.

Because the Fed had too much to do in September of 2008, apparently.

Business Week:

Thomas Baxter, general counsel for the Federal Reserve Bank of New York, said that a credit line for Lehman Brothers Holdings Inc. was pointless because the firm didn’t have a buyer lined up before its 2008 bankruptcy filing.

“We thought it was a bridge to nowhere,” Baxter said today during a hearing of the Financial Crisis Inquiry Commission in Washington. “Lehman was not our only problem during that month.”

LOL no shit, Tom, thanks for the clarification.

How is it Lehman was a "bridge to nowhere" but AIG, Fannie and Freddie, GM, the FHA et al were not?

So says AccountingWEB's Gail Perry in yesterday's Editor's Note:

Approximately half of Americans claim to have no retirement savings at all, and those with retirement plans at work seem to think it’s their employers’ responsibility to provide them with education and to give them time off to handle financial issues. Can we just dial back the clock a few decades and start taking responsibility for our own future and stop blaming someone else for the pickles we find ourselves in? And P.S. – seriously, what do these people think they’re going to do when they can no longer work? Are we going to become a nation of Night of the Living Dead zombies, people who can’t work or take care of themselves, feeding off of those who are more able?

THANK YOU.

P.P.S. Stupid brats aren't entitled to an education either. A degree isn't something you should automatically be given simply because you managed to graduate high school without strangling yourself on the curtain cords, dumbass.

But hey, the bright side is that I think we've resolved that whole entitlement issue... there's nothing left around here to be actually entitled to, even if we did feel compelled to think we deserve it anyway.

Women have long complained about the disparity between their earnings and those of men. A study that crunched Census information shows that certain variables make a difference in women's favor.

WSJ:

In 2008, single, childless women between 22 and 30 were earning more than their male counterparts in most U.S. cities, with incomes that were 8% greater on average, according to an analysis of Census data by Reach Advisors, a consumer research firm in Slingerlands, N.Y.

The trend was first identified several years ago in the country’s biggest cities, but has broadened out to smaller places and across more industries. Beyond major cities such as San Francisco and New York, the income imbalance is pronounced in blue collar hubs and the fast-growing metros that have large immigrant populations.

Atlanta topped the list, with single women pulling in 121 percent of what their male counterparts earn. The next 20 break out this way:

Memphis, TN-AR-MS ... 119%
New York City-Northeastern NJ ... 117%
Sacramento, CA ... 116%
San Diego, CA ... 115%
Miami-Hialeah, FL ... 114%
Charlotte-Gastonia-Rock Hill, NC-SC ... 114%
Raleigh-Durham, NC ... 114%
Los Angeles-Long Beach, CA ... 112%
Phoenix, AZ ... 112%
Richmond-Petersburg, VA ... 112%
San Francisco-Oakland-Vallejo, CA ... 111%
Cincinnati-Middletown, OH-KY-IN ... 111%
Oklahoma City, OK ... 110%
Riverside-San Bernardino, CA ... 109%
Salt Lake City, UT ... 109%
Dallas-Fort Worth, TX ... 108%
St. Louis, MO-IL ... 108%
Kansas City, MO-KS ... 108%
Columbus, OH ... 107%
Washington, DC-MD-VA ... 106%

Did you find yourself? The rest of the list of 50 metro areas is in the WSJ.