TLP: Don't Forget To Read The Fine Print

credit card debt
Not that it's a good thing to walk away from your debts, but when people don't pay their credit card bills, there's a process. And in some cases, things drag on so long that the statute of limitations runs out and the debt becomes noncollectable.

Not that some "industrious" people don't try.

NYT:
In most states, it is legal for collectors to pursue out-of-statute debt, as long as they do not file a lawsuit or threaten to do so.

But some lawsuits are filed anyway, and consumer groups and even some industry consultants argue that collectors routinely harass debtors for unpaid balances that have exceeded the statute of limitations. In some cases, collectors have unlawfully added fees and interest.

“It’s so cheap, if you can work it smart, you don’t need to collect that much,” said John Pratt, a consultant to the debt-buying industry and an author of “Debt Purchasing: An Investor’s Guide to Buying Debt” (Morris Publishing, 2005). He said investors in old debt generally hoped to recoup two and half times what they paid for a group of claims.

Because collectors cannot sue on old debt, he said, they are more likely to resort to abusive tactics. “Time-barred debt is where the worst abuse has occurred towards the debtor,” he said.

In a report issued July 12, the Federal Trade Commission called for “significant reforms” in the debt collection industry and recommended that states change the murky laws that govern out-of-statute debt.

The statute of limitations for debt varies by state, generally from three to 10 years. In many states, collectors can restart the clock if they can persuade the consumer to make even a tiny payment toward the old debt. Debt collectors generally do not tell consumers that making a payment will revive the debt so it can be legally pursued.

“The point of the payments is not so much to get the money” as it is to restart the clock, said Daniel Schlanger, a New York lawyer who represents consumers in cases against debt collectors.
Sounds pretty fucking sleazy. You can just imagine the back-and-forth as the collector tries to schmooze the former card-holder into making a small payment. "It'll help your credit rating ... You don't want to be a deadbeat, do you? ... It's not like you have to pay the whole thing." And then it gets ugly once the debt is "live" again.

Of course, this is one more reason people should either understand what it means to have a credit card or just say no.

TLP: Gore Gets Off!

gore investigation
Ok, that still may be up for debate, depending on whether anybody believes the woman who gave the former VP a massage in an Oregon hotel a long fucking time ago. One question has been settled: the police in Portland won't be bringing charges based on the woman's allegations.

CNN Political Ticker:
Former Vice President Al Gore will not face prosecution on an allegation of sexual assault from 2006.

The allegation, brought forth by Molly Hagerty, claims Gore sexually abused her during a professional massage at the Hotel Lucia in Portland on October 24, 2006.

The Portland Police Bureau did not recommend prosecution "due to a lack of credible evidence," according to the Multnomah County district attorney's office.

"After evaluating the materials submitted by PPB I have concluded that I agree with the assessment that a sustainable criminal case does not exist," Senior Deputy District Attorney Don Rees wrote in a memo Friday. "Ms. Hagerty's detailed statement ... is insufficient to support a criminal charge given other contradictory evidence, conflicting witness statements, credibility issues, lack of forensic evidence and denials by Mr. Gore."

Gore's office in Nashville, Tennessee, released a statement saying the former vice president was pleased with the finding.
Apparently, the supposed DNA evidence Hagerty said Gore deposited on her pants wasn't quite spunky enough for the forensics lab. If that's what it was. Whatever. The interview about the incident ran 67 pages and maybe the DA thought a trial would be interminable, no matter what the chances of a conviction were.

Gore just wasn't cut out to follow Bubba. In anything.

You Can Stop Shouting on Twitter Now



I'm guilty but engage so not as guilty.

Forbes has a "how not to be a dumb marketer on Twitter" guide that makes the current crop of "Internet Marketers" look like complete asshats:

When marketers use Twitter, 360i says that 75% of the time they are using it to disseminate news or information about the brand, as opposed to actively engaging Twitter users. Consumers are only engaged by the brand approximately 16% of the time. Putting that in perspective, consumers engaged in conversation with each other 43% of the time. Only 8% of Twitter users make their feeds private.

I've seen more than one repeating the same "motivational phrase" ("Advice is like kissing. Its free and fun to do" I kid you not) several times a day. Or how about the whales? Internet marketing is a dark and lonely place until they track you down, then it's 85% noise and possibly 10% useful (I haven't figured out the remainder).

Jr Deputy Accountant is a Dirty Capitalist Pig (Oh Well)



I'm going to confess something: I filled up at a BP-owned Arco station the other day and it felt good. Good because Arco, desperate to sell anything to help pay for parent BP's oil cleanup efforts, is coming in at $3.05 a gallon. To put this in perspective, the Shell station directly behind my house goes for $3.38 as of yesterday. I generally have been getting $3.25 average.

First of all, I'm already a dirty pig for having a car at all in this city but don't judge; I recycle like a motherfucker, give bikes the right of way even when they shouldn't have it (you wanna be treated equally on the road? It's called a STOP sign, asshole) and fully utilize the off-the-books "San Francisco curb/Craigslist recycling program" to get rid of crap I don't need (or find some that I do). So I'm not completely heartless but still a complete douchebag according to 99% of the San Francisco population just for being into wasting gas to shmob to Serramonte and buy more shit I don't need.

But I refuse to pay an extra 20 cents per gallon on principle alone. You want to boycott BP? Good for you but how are they supposed to pay for oil spill cleanup efforts if they aren't making any money? It would explain the desperation that's forced Arco prices down lately and if that's their tactic, it worked, at least on me. You won't catch me driving across town for the cheap stuff but I was in the neighborhood and the Mazda was dry, what would you have done?

Joe Mirabella doubts the effectiveness of these well-intentioned "boycotts" that I'm obviously not participating in (via HuffPo):

The progressive community loves to throw the word "boycott" around. While the BP oil gusher was still gushing, I heard several calls to boycott BP. Yet, BP stations I see today are always full of cars sucking down oil.

Effective boycotts take massive organization, huge coalitions, and steadfast dedication to the cause.

[...]

Rather than boycott companies, I prefer to spend consciously by taking an affirmative approach to consumer politics. I like to reward and focus on good behavior, rather than focus my energy punishing bad behavior. For example, I am on the Board of Directors for the Greater Seattle Business Association (GSBA). It is the country's largest LGBT chamber of commerce. By becoming a member of GSBA, our members sign onto a code of ethics that demonstrates their commitment to the LGBT community. I support GSBA member businesses whenever possible and use the annual GSBA Guide to find those businesses. For example, the gym I used to lose 47 lbs this year, Mode of Fitness, is a GSBA member. I remain a loyal customer, because I know they are loyal to my community.

We can do more with our collective money power than simply boycott. Sort of like not waiting around for the government to figure out what to do with non-profits but doing something with our own money instead. Like cheap gas. Who gives a fuck? The more you buy that the less Obama will have to hand over.

My car is going to suck down oil either way so I might as well get a deal on it.

Former Dirty Fed Operative Thinks the Fed is Behind the Curve



I'm shocked! An out of touch Federal Reserve? Say it ain't so!

WSJ
:

At its last meeting June 22-23, the Fed’s policy-setting body trimmed its GDP prediction to around 3.3% this year and to some 3.8% in 2011. Fed Chairman Ben Bernanke stuck to that scenario in testimony before Congress last week, probably more out respect for the Federal Open Market Committee than because he’s convinced they are still right.

Second quarter GDP growth, at 2.4%, was well below the forecast. Many private analysts see the economy continuing to languish at a slow pace. Economic predictions by private-sector economists may be closer to the mark. In the latest Wall Street Journal survey published July 15, they forecast, on average, that growth will come in just below 3% both this year and next, also below the Fed’s forecast.

“If I look at the Fed’s forecasts, I think they’re behind the curve,” said Laurence Meyer, a former Fed board governor now with economic consulting firm Macroeconomic Advisers LLC. He added the Fed will almost certainly downgrade its economic outlook again when central bank officials next meet Aug. 10.

All JDA's pennies are on a downgrade from "totally awesome and very nearly fixed" to "a little less awesome than previously thought but still awesome now go BUY, BUY, BUY consumer or else we are really screwed!"

Though not frequently advertised, the Fed actually has a singular mandate (forget all that stuff about maximum employment and price stability): keep the perpetual debt machine in motion. In order to accomplish that - though they may end up imploding the dollar along the way - they've got to assure that prices stay high and the debt yoke stays tight. Too bad America just isn't into it anymore.

TLP: It Would Sell Itself If They Had Just Called It "Nookie"

electronic readers
The appeal of Amazon has always been that you don't have to get off your ass to shop. Excellently lazy. Barnes & Noble, meanwhile, puts the lazy into its stores with big chairs and Starbucks cafes. Now that both booksellers have electronic readers – and what could be lazier than turning pages with your thumb? – the smackdown is on.

And B&N is making its play by both going old school and looking ahead.

NYT:

In September, the chain will begin an aggressive promotion of its Nook e-readers by building 1,000-square-foot boutiques in all of its stores, with sample Nooks, demonstration tables, video screens and employees who will give customers advice and operating instructions.

By devoting more floor space to promoting the Nook, Barnes & Noble is playing up what it calls a crucial advantage over Amazon in the e-reader war: its 720 bricks-and-mortar stores, where customers can test out the device before they commit to buying it.

“I think that’s everything,” William Lynch, chief executive of Barnes & Noble, said in an interview. “American consumers want to try and hold gadgets before they purchase them.”

Amazon’s Kindle e-reader is for sale on Amazon.com and in Target and HMSHost stores.

Barnes & Noble has already installed small counters in its stores where customers can test out the Nook. The new display space would be much larger, and it would be located next to each store’s cafe, to encourage customers to stop by the Nook space, coffee or tea in hand.
Points for placement, B&N. And points for foresight in making room for the expanded Nook boutiques by clearing out some of the CD bins. (Can you remember the last time you bought a CD?) Pretty soon, B&N will be thinking about moving all the music online.

Just like, uh, Amazon.

For F^*%'s Sake, Goldman Sachs!



I need IMMEDIATE clarity on this new Goldman rat policy, preferably from a real Goldman rat, as there are just too many questionable words out there for any reasonable Goldman rat to keep up with. Is asshat allowed? How about bonehead? Or cum-burping butt slut? I need to know. Like now.

WSJ:
There will never be another s— deal at Goldman Sachs Group Inc.

The New York company is telling employees that they will no longer be able to get away with profanity in electronic messages. That means all 34,000 traders, investment bankers and other Goldman employees must restrain themselves from using a vast vocabulary of oft-used dirty words on Wall Street, including the six-letter expletive that came back to haunt the company at a Senate hearing in April.
OK so obviously "shitty" is out but what about all the almost-profanity out there? What about cocksucker, where does cocksucker stand? That's not technically a swear word.

That's one cocksucking CDO. Yeah OK maybe it is a swear word. Whatever, they can call it the Unicorn and Rainbow Deal and it's still shitty if you ask me.

TLP: At the White House, Polling Till It Hurts

white house polls
The White House press office is learning a lesson in attitude. Spokesman Robert Gibbs (and do we think he has had about enough?) dissed reporters who were asking him about President Obama's standing in recent polls.

The pissy performance only did what it usually does for reporters: made them keep digging. And what they found was something delicious enough to give the administration a spanking.

The Huffington Post:
During his daily press briefing on July 13, White House Press Secretary Robert Gibbs was peppered with questions about why the president's popularity numbers are in decline and his policy positions are so difficult to sell.

ABC News's Jake Tapper sought reaction to the network's newest poll showing that 51 percent of respondents would rather have Republicans running Congress. CNN's Ed Henry wanted to know why, in that same poll, "six in 10 Americans have little or no faith in the President to make the right decisions." CBS's Chip Reid then pointed to his own network's poll showing that only 13 percent of respondents thought the president's economic programs had affected them personally.

Exasperated, Gibbs deployed a classic rejoinder: mocking the polling-obsessed media culture.

"You know, in all honesty, Chip, there isn't a website in the world that doesn't have a new poll every day," the press secretary replied. "And if you spent a lot of time sitting around worrying about polls rather than worrying about the people that you're trying to help, I'm sure you'd get discouraged. But we're way too busy to sit around looking at polls."

Too busy to look at polls? Perhaps. But not too poor to pay for them. While Gibbs routinely chides members of the press for obsessing about the day-to-day temperamental swings of the American public, behind the scenes the White House has poured plenty of money into conducting its own public opinion polls. Through June 9, 2010, the administration, via the Democratic National Committee, has spent at least $4.45 million on the services of seven different pollsters, according to records compiled by the Center for Responsive Politics. (The Huffington Post looked into only those expenditures that totaled more than $5,000.)

That total represents only 18 months into the administration. During the first 24 months of the Bush administration, the Republican National Committee spent $3.1 million on polling according to a 2003 study done by Brookings. During the 2005-2006 years of the Bush administration, the RNC spent just north of $1.23 million on "surveys," "focus groups," and "polling," according to an analysis of Center for Responsive Politics data (they spent millions, instead, on telemarketing services). So far this cycle, the RNC has spent slightly more than $1 million on those same activities. (The Huffington Post did not examine data from the 2008 cycle because spending totals were affected by the presidential election.)
Maybe if they keep spending money on polls, they'll be able to buy one that says what they want.

Dallas Fed's Fisher Still Thinks Monetary Policy is Nearly as Easy as Possible



And this, my friends, is exactly why Richard Fisher is my 2nd favorite Fedhead. While guys like James Bullard are talking about additional Treasury purchases and Ben Bernanke is tentatively booking a rate hike on his 2012 calendar, Dallas Fed's fearless leader has the large, robust cojones needed to say enough is enough. Told you the economy was frigid, now leave her alone.

Check out comments Thursday to the Greater San Antonio Chamber of Commerce:

At both the national and regional levels, despite a series of hiccups and roadblocks, we continue our slow slog out of what proved to be a most hellish downturn in 2008 and 2009. I expect the economic expansion to continue, buoyed by slow and admittedly bumpy improvements in the labor market, increases in business and household spending, and resilience in entrepreneurial hot spots like Texas. But, on net, I fear the nation’s economy will be sailing forward at suboptimal speed, despite the fact that the cost of borrowing is low, equity markets have shown resilience and liquidity is plentiful on corporate balance sheets and in the form of excess reserves in the banking system.

For some time now in internal discussions with my colleagues at the Fed, I have ascribed the economy’s slow growth pathology to what I call “random refereeing”—the current predilection of government to rewrite the rules in the middle of the game of recovery. Businesses and consumers are being confronted with so many potential changes in the taxes and regulations that govern their behavior that they are uncertain about how to proceed downfield. Awaiting clearer signals from the referees that are the nation’s fiscal authorities and regulators, they have gone into a defensive crouch.

OK. I sort of agree with that position, the Fed's free money policy notwithstanding, as it is fairly obvious that businesses (and the poor consumer) are scared to death these days. Scared because the outlook is awful? No. Scared because GDP dropped .2 from the first to second quarters? Doubtful. They're scared because they have absolutely no idea what comes next, be it new regulations or tax hikes. That's the problem with lawmakers, they tend not to consider the aggregate effect of their little rules.

And just FYI, he wants to make sure you're still clear that the Fed is no one's bitch, bitch.

[N]o amount of further monetary policy accommodation can offset the retarding effect of heightened uncertainty over the fiscal and regulatory direction of the country. As long as our economic players—businesses and consumers—are beset by unmanageable uncertainty, they will refrain from making decisions that provide the stuff of economic growth. Indeed, one could posit that further monetary accommodation might make the situation worse if private sector operators were to conclude that the Federal Reserve has become politically pliable and is prone to substituting such accommodation for fiscal discipline.

Liquidity never was the problem and obviously Fed policy isn't the problem either. Well it depends on what problem we're talking about. It's THIS problem I am talking about:

Some of you may wonder whether our elected officials, faced with the truly monumental task of balancing the nation’s books, might simply throw in the towel and turn to the Fed to print us out of this enormous fiscal hole. If such a request were ever made, there should be no uncertainty: We at the Fed cannot and will not monetize the debt. We know what happens when central banks give in to those requests—it leads us down the slippery slope of debasing our currency and puts us on the path of hyperinflation and economic destruction. Neither I nor my colleagues are willing to risk that legacy.

I don't think Fisher can speak for some of his colleagues who would rather debase the currency than face the threat of deflation. Once the hamster jumps off the debt wheel the entire thing is doomed anyway, so might as well have some control over the level of the doom, right?

At least we know who won't volunteer to take turns with Bernanke at the press crank. Someone loves you, Richard Fisher, and it's probably me.

Maricopa County Don't Need No Stinking Law

Not one to be told what to do by some stinking court, Maricopa County Sheriff Joe Arpaio went out yesterday afternoon looking to bust some illegals. In Maricopa's 17th immigration sweep since 2008 - through which the county has made 1,000 arrests, around 700 of which were actually illegal immigrants - Arpaio was joined by the media as he cruised through town looking for dirty Mexicans lawbreakers who may or may not actually be citizens of a distant locale.

LA Times:

With most of Arizona's new immigration law blocked by a judge, controversial Sheriff Joe Arpaio launched his 17th "crime suppression" sweep in Maricopa County, pledging late Thursday afternoon to have his deputies and volunteers check the immigration status of those arrested.

"We're looking for anybody who violates the law," he said. "If we find any illegal aliens, they are going to be arrested."

The operation began about 4 p.m. after being delayed for several hours while his deputies responded to demonstrations outside the county jail in Phoenix. During those protests, several people were arrested and others detained, including a legal observer and a news photographer.

His timing and intentions are suspect but at least he keeps it real.

Arpaio said Thursday that he didn't go looking for illegal immigrants but found them because they were out breaking the law. Arpaio said he timed the operation for the day SB 1070 took effect to send a message — that nothing is changing despite U.S. District Court Judge Susan Bolton's ruling.

"I want the people of Maricopa County to know, 'Hey if you are here illegally and you commit a crime — go somewhere else,'" he said.

How exactly does he decide who to arrest? What about those few high yellow Mexicans who boast green eyes and brown hair, does he go after them? Is his crew trained to spot bootleg Nikes and U.S. Polo Association kick pants?

This is NOT the first time Sheriff Arpaio's methods have been, erm, questioned a tad.

OMG! Obama Says the Check From Detroit Is In the Mail


Yeah so now that Detroit is all totally healed, where's the damn check? On its way, says Obama, without actually saying anything about demanding the cash from auto companies that benefited from both his and his predecessor Bushy Jr's kindness. Hey at least the guy is clear that the Bush money is pretty much gone forever. At least some of us can be real about that.

The Detroit News:

President Barack Obama said Thursday that taxpayers will be repaid for the $85 billion auto bailout -- at least the money his administration infused -- as he touted the auto industry's turnaround.

"We are going to get back all the money that we invested in those car companies," Obama said in an interview broadcast on ABC's "The View." "You now have all those U.S. companies showing a profit."

White House Press Secretary Robert Gibbs clarified that the president was referring to the $60 billion his administration loaned to the auto industry, not the $25 billion the Bush administration advanced.

The most recent government estimate is that taxpayers will lose $24.3 billion on the bailout of General Motors Co., Chrysler Group LLC and Ally Financial Inc. Treasury Secretary Timothy Geithner said this month he thinks the estimate will decline further. Gibbs has argued that even if taxpayers lose some money on the bailout, the alternative of 1 million or more jobs being lost would have been far worse.

To celebrate, Obama will be taking a tour of Chrysler's Jefferson North Assembly Plant and GM's Detroit-Hamtramck Plant. If I were him, I'd tell them to just leave me a briefcase of unmarked, non-sequential bills at the plant to cover that bailout tyvm.

I'll believe it when I see it.

The Schizophrenic American Consumer



I love that Bloomberg went there:

The new abnormal has given rise to a nation of schizophrenic consumers. They splurge on high-end discretionary items and cut back on brand-name toothpaste and shampoo. Companies such as Cupertino, California-based Apple, whose net income jumped 94 percent in its last quarter, and Starbucks Corp., which saw a 61 percent increase in operating income over the same time frame, are thriving.

Mercedes-Benz is having a record sales year; deliveries of new vehicles in the U.S. rose 25 percent in the first six months of 2010. Lexus and BMW were also up. Though luxury-goods manufacturers such as Hermes International SCA and Burberry Group Plc are looking primarily to Asia for growth, their recent earnings reports suggest stabilization and even modest improvement in the U.S.

By tomorrow, the consumer could easily run screaming and take what little liquidity he has left with him. The following day, he could be back at the mall jealously stroking a demo iPad. By Monday, he's at work ordering sneakers and delivery for lunch while brown bagging it mid-week after panic sets in moments after some flaccid Bernanke speech leaves him programmed to feel as though something is terribly awry. No wonder the consumer is so confused.

I don't believe America is stuffing itself with iPads, no matter what Apple tries to say to the contrary. Sure I saw two days' worth of idiots standing on Stockton St trying to get their iPhone 4s in its first two days of release but it was nothing like the first round of iPhone idiots that curled all the way up the street and back around to Union Square. And if there is a sense deep within the psyche of the American consumer that they need "more", it's only the residual phantom of Alan Greenspan, L'Oreal, Best Buy and every other evil creature that exists to convince the consumer that "you deserve it" rapping at the door. That doesn't mean we're still listening.

We KNOW better. The conflict comes from being told that the consumer must lead the way out and that things are far better than they appear everywhere we turn. An uneducated or mis-educated person might be inclined to believe the TV when it purrs everything is under control, head back to the mall now but doubt chews at the consumer heart and for the first time in possibly forever we know better.


But whatever. Let them keep saying it's the iPads.

Maiden Lane Spins Crap Assets Into Tungsten



Instead of addressing the issue of misleading the American taxpayer into owning this crap in the first place, I'm sure we will hear lots of GREAT NEWS surrounding this announcement from the NY Fed that the crap they bought on our dime is making a little bit of money.

WaPo:

Toxic assets the government bought during the bailouts of American International Group Inc. and Bear Stearns are finally gaining value, the Federal Reserve Bank of New York said Thursday.

The assets are now worth $69.1 billion - about $2 billion more than they were during the previous quarter
.

Who exactly defines "worth" in this case? The NY Fed?

The two companies are worth $16.2 billion, up from $15.6 billion; and $23.5 billion, up from $23.0 billion. The New York Fed said it made the revision to the companies' estimated value during a quarterly update performed at the end of last month.

Is that fair value? Mark-to-Disneyland? Lower of cost or market? What if there is no longer a market for crap guarantees and shitty mortgage deals gone bad? Can we please get an independent third party to inspect these numbers? I volunteer Skeptical CPA for the job, I'm sure he'd love nothing more than to shoot down each and every fantasy that the NY Fed calls a valuation.

While the NY Fed is busy patting itself on the back, I'm scratching my head wanting to get some more delicious accounting details before I'm willing to call this a win. Bitches.

Sherrod to Sue Breitbart Over Edited Video That Got Her Fired



See that's funny, if I were Shirley Sherrod I would start with suing the guys who fired me over a video they saw on the Internet and then work my way down to the guy who put the video on the Internet. But maybe that's just me.

CNN:

Former Agriculture Department employee Shirley Sherrod said Thursday she will pursue a lawsuit against conservative blogger Andrew Breitbart.

Breitbart posted an edited video clip of Sherrod appearing to say she discriminated against a white farmer looking for assistance. The clip showed her addressing a chapter of the NAACP.

"I will definitely do it," she said when asked whether she was considering legal action. Sherrod made her remarks during an appearance at the National Association of Black Journalists convention in San Diego, California.

Maybe she should also try getting in touch with the NAACP who kicked this entire thing off by spotting the Breitbart clip and then calling for her head. Sure they issued an apology but what's an apology worth when you can sue?

Why stop there? Sue Breitbart's ISP. Sue Microsoft for making the operating system that he used to go in and edit her speech. Sue herself for making the statement in the first place, whether or not it was taken out of context.

Think bigger, girl, think bigger.

Wait Wait! Don't Jump Until We Get That Other $40 Million!



$5 million down only $40 million to go!

SJ Mercury News:
Transportation officials have approved $5 million in federal funding to design a suicide barrier on the Golden Gate Bridge.

The Metropolitan Transportation Commission signed off on the funding on Wednesday, and the Golden Gate Bridge Board of Directors is expected to accept the money when it meets Aug. 13.

Bridge officials approved in February plans to hang a stainless steel net about 20 feet below the world-famous span in an effort to stop people from jumping to their deaths.

More than 1,300 people have jumped from the bridge since it opened in 1937.

Officials say the barrier will cost $45 million and take about 18 months to design.

I haven't seen "The Bridge" but boy I'd like to.

Citigroup Hit with Material Omission of Disclosure Requirements by the SEC


The "news" part of this isn't that Citi "forgot" to disclose its subprime exposure and got hit with an SEC fine but that they laid down and took it like the good little bitches they are.

Reuters:

Citigroup Inc (C.N) will pay U.S. regulators $75 million to settle charges that it failed to disclose $40 billion in subprime exposure to investors in 2007, the U.S. Securities and Exchange Commission said on Thursday.

The settlement is part of a larger regulatory probe into subprime mortgages. Earlier this month, Goldman Sachs Group Inc (GS.N) agreed to pay $550 million to settle civil fraud charges over how it marketed a subprime mortgage product.

Under Citigroup's settlement, the SEC charged the bank with material omission of disclosure requirements. Citigroup did not admit or deny the allegations under the settlement.

Catch that, future fraudsters? $40 billion in material omissions will get you a $75 million fine. Peanuts.

OMG No Not Deflation!!!



God this seems so obvious, why can't they see that there is no deflation threat? As I've said from the beginning, evaporation of made-up capital that should not have been made-up in the first place and deflation are two completely different things, why is it so difficult for these Fed geniuses to see that?

Oh well. Duck, it's deflation!!! Quick, let's buy more Treasurys!!

Bloomberg:

Federal Reserve Bank of St. Louis President James Bullard said the central bank should resume purchases of Treasury securities if the economy slows and prices fall rather than maintain a pledge to keep rates near zero.

“‘The U.S. is closer to a Japanese-style outcome today than at any time in recent history,” Bullard said, warning in a research paper released today about the possibility of deflation. “A better policy response to a negative shock is to expand the quantitative easing program through the purchase of Treasury securities.”

I think the Fed's easy money policy is more dangerous than the specter of deflation at this point, at least until the economic rocket scientists get together and redefine what we are currently experiencing.

Until that happens, I guess we'll just keep shoveling money into the hole and hope that works.

Mahmoud Ahmadinejad Hates Everything I Love

 pic via the Daily Bail

He hates everything I love except for bad hair, I hate bad hair too. I am totally into ties, the Internet, Twitter and "Immoral" writers, however. Oh well.

BP Isn't the Only Bad Photoshop Offender



I can admit I've made some pretty awful Photoshop over the years (mostly Ben Bernanke Exposed) but it's meant to look awful, not to sell a product. Like this.

See more at Photoshop Disasters.

TLP: A Job Is A Job, No Matter How Small

jobs program
Everybody loves to fight over jobs numbers. The monthly tally is subject to interpretation from all sides. Remember the fun a month or so ago when hiring for the Census spiked the figures? Good times.

Maybe you'd call this padding, too. About 250,000 people across the country are working now in private-sector jobs, with their pay coming directly from the government.

NYT:
The opportunity to simultaneously benefit struggling workers and small businesses has helped these job subsidies gain support from liberals and conservatives. Congress is now considering whether to extend the subsidy, which would expire in September, for an additional year. A House vote is expected on Thursday or Friday.

Despite questions about whether the programs displace existing workers, many economists have argued that direct job creation programs are a more cost-effective way to put some of the nation’s 14.6 million unemployed back to work than indirect alternatives like tax credits and construction projects.

The average duration of unemployment continues to break records, after all, and studies have shown that the longer people are out of work, the less employable they become.
The money came from the federal stimulus package, with an initial outlay of $5 billion. The Center on Budget and Policy Priorities pegs most of the jobs in the $8 to $15 per hour range. Big winners are in San Francisco, where the max is $74,000 a year. (Where does that broke city keep coming up with cash?)

This is the way the Obama administration does it, I guess. FDR had a different approach, putting the jobless to work building roads, bridges, schools, parks and even creating art. Might not be a bad idea today, but it'll be tough to make $74k that way.

Economists See a Bleak Short-Term



OK so this AP survey of economists might not appear to be good news on the surface but think about how many times these same guys have been wrong before. That should be some consolation.

TLP: Yeah, But What About His Windsurfer?

kerry yacht tax
If you owned a $7 million yacht and there was a chance it could be confiscated while certain tax questions are worked out, what would you do? If you're John Kerry, you drop a check for $500,000 in the mail to the Massachusetts Department of Revenue. You know, just in case.

CNN:
Sen. John Kerry will voluntarily pay $500,000 in taxes to the state of Massachusetts - a move that forestalls a potential investigation into whether the Bay State's senior senator attempted to evade the hefty levy by docking his $7 million yacht in Rhode Island.

"We've reached out to the Massachusetts Department of Revenue and made clear that, whether owed or not, we intend to pay the equivalent taxes as if the boat's home port were currently in Massachusetts," Kerry said in statement. "That payment is being made promptly."

The decision came after Kerry faced a series of questions over why the Massachusetts Democrat decided to dock his new multi-million dollar sloop in neighboring Rhode Island even though it had been reportedly spotted in Massachusetts waters and Kerry maintains residences in Boston and Nantucket.

Rhode Island has been known as a tax-haven for boaters after the state repealed its sales and use tax on boats in the early 1990's. Kerry, who recently purchased the 76-foot yacht in Rhode Island, therefore avoided close to a half-million in taxes.
So much easier to make that call when you're sitting on about $200 million. But still, nice gesture.

Jim Rogers Calls CNBC Bullsh*t On CNBC



No seriously.

"It is PR, they got the stocks up, that's the whole purpose of PR, make the stocks go higher. That's what CNBC and many many PR agencies are all about."

[Daily Bail]

If You're In Montreal, Try Not to Get Any In Your Eye Next Time Bernanke Speaks



The Montreal Gazette actually said this:

In his semi-annual testimony before Congress on Wednesday, U.S. Federal Reserve Chairman Ben Bernanke said the prospects for economic recovery were "unusually uncertain."

On those two words, stock markets in North America took the rest of the day off. In New York, the Dow plunged 109 points to close 1.3 per cent lower on the day, while the NASDAQ lost 35 points or 1.6 per cent. In Toronto, the TSX was off 116 points or one per cent, with much of the dip on the hot chart coming in the hour after Bernanke's afternoon testimony.

Such is the power of the chairman of the Fed to move markets. Not since his predecessor, Alan Greenspan, worried about "irrational exuberance," during the 1990s, have two words caused such a commotion in markets. Greenspan was subsequently more circumspect in his pronouncements, and developed an impenetrable vernacular of his own that he called "Fedspeak."

Maybe there's some sort of translation static interfering with the Gazette's perception but by my calculations, we haven't cared about a Fed move in at least a year and a half. Extended period. We get it. Whatever it takes. With you. Choppy. Heard you the first time you said it, homie. As long as the pipeline stays open, no one gives a shit what the Fed has to say.

They can publish as many papers as they like that prove me wrong but one of the largest contributing factors to the ineffectiveness of Fed announcements of late in accomplishing their objectives (whatever the fuck those may be) is that those easily spooked by the Fed have long since abandoned the market. It's the HFT robots against Ben Bernanke's printing arm, neither are anything but mechanic and their reactions are automatically priced in. Who is left to react?

Driiiiip

Bernanke's choice of words rattled markets because they are worried about the pace of the recovery and the prospect of the U.S. economy tipping into a double-dip recession. Bernanke offered little comfort, suggesting a modest recovery with "a somewhat weaker outlook."

Again, to say markets were rattled by Gentle Ben's little commitment to whatever it takes for the 400th consecutive speech (or are capable of being rattled by him at all) is a bit of a stretch. The invisible hand gets PTO when Bernanke speaks to make it appear as though they still possess the least amount of control. Looks like the Montreal Gazette fell for that old trick hook, line and sinker.

Way to go, ZB, you still have it in you.

EARN YOUR GET RICH QUICK DEGREE TODAY



(via Everything is Terrible!)

Let's Hope Doug Shulman Remembers to Internally CC Those 990 Reminders Next Year



An early "year's best" winner for irony definitely goes to the IRS folks in Des Moines. (via GC)

It seems of the charities unaware of new 990 rules, the IRS is among them. Bonus points for the last known mailing address reading PO Box 1337. Not so 1337, IRS. I'm mailing them a Post-it with "990" written in Sharpie just to be helpful.

WebCPA:

The IRS has found that a large number of charities were unaware of the expanded Form 990 requirements and are in danger of losing their tax-exempt status. The IRS had earlier indicated that it would give small charities extra time with the filings and it has now provided a specific deadline extension date.

Non-profits had three years to get theirs in and though the first due date was really May 17th, IRS Commissioner Doug Shulman has said October 15th for sure definitely they have to be in. Though the Service did its due diligence to communicate the new requirement (I'm sure the Des Moines mail was delayed by, er, snow and USPS' budget problems that lead to really shitty mail service), they're accepting some of the blame and being nice. Until October.

Just in case they really really didn't get the memo, the Service has published a list of "outstanding" 990ers including our Service Employee friends in Iowa.

Coincidence? I Think Not



Bloomberg:

Crude oil declined for a third day after the government reported an unexpected increase in supplies as imports jumped to the highest level in almost four years.


Yahoo! News
:

Where is all the oil? Nearly two weeks after BP finally capped the biggest oil spill in U.S. history, the oil slicks that once spread across thousands of miles of the Gulf of Mexico have largely disappeared. Nor has much oil washed up on the sandy beaches and marshes along the Louisiana coast. And the small cleanup army in the Gulf has only managed to skim up a tiny fraction of the millions of gallons of oil spilled in the 100 days since the Deepwater Horizon rig went up in flames.

Well! I guess that solves that!

Back On: Mandatory Three-Day Weekends for Most California State Employees



Hey remember Furlough Fridays that expired June 30th? They're back indefinitely or at least until the state gets its business in order and comes up with a budget. Our expert team of hamsters has determined that date to be either later this year or when hell freezes over, they are unsure at this time but will happily update you when more data becomes available.

This round of state-mandated vacation days, unlike the last run, excludes a few California state offices. The Board of Equalization and the Franchise Tax Board, the Employment Development Department, State Compensation Insurance Fund, the California Housing Finance Authority and the California Earthquake Authority will all be working Friday because, well, the FTB really needs to collect all the cash it can and someone's got to man the phones at the EDD to process all those new unemployment claims.

We wish California state legislators all the luck in the world in getting that budget nice and tight before Controller John Chiang starts cutting IOUs. 

Contrary to Popular Opinion, the Economy Has Not Flipped into a Ditch Says SF Fed



Words of wisdom from my least favorite Fed bank.

Bloomberg:

The U.S. economy’s “rough patch” in recent months, caused in part by weaker consumer confidence and spending, isn’t the start of a sustained slide back into a recession, said John Williams, research director for the Federal Reserve Bank of San Francisco.

“Recent economic data have been disappointing and there’s no denying that the economy has hit a bit of a rough patch,” Williams, 48, said in the text of a speech today in Portland. “Although discouraging, the recent softness in the economic data looks much more like a bump in the road” than “a swerve into the ditch.”

Rough, choppy tomato to-mah-to.

The solution (beyond government initiatives to capitalize on Keynesian rules that say $1 of investment = $3 in new money) is for America to squeeze out more kids and keep buying unnecessary crap like iPads. Seriously.

Of course, eventually, housing, commercial real estate, and other hard-hit sectors will return. After all, the population of the United States grows by over 2½ million people a year and those people need roofs over their heads. And all of those old cars and washing machines will eventually start looking pretty creaky compared with the snazzy stuff in the showrooms. We’ve already seen just this process take place in technology where both consumers and businesses have overcome their hesitation to buy the latest gear. I don’t know how much confidence it takes to buy an iPad or an iPhone, but whatever it is, millions of people obviously have it.

Hey has anyone thought that maybe instead of forcing themselves into new homes they can't afford Americans have been so shaken by recent events that they'll cram as many folks as they can in the tiny house they already have and forgo a Ford that will die in 5 years for a Toyota that might go 300,000 miles without needing to be replaced? Just sayin.

Full text of Williams' remarks may be found via the San Francisco Fed here.

Janet Goes to Washington

 Pic credit: MTTS

The Senate Banking Committee has approved Janet Yellen as Fed vice chair, bringing her one step closer to becoming the second most powerful asshat within the Fed. Obviously Ben Bernanke needed a chirping puppet at his side nodding yes to each and every statement and he's about to get the best one they could find.

"The members of the board will clearly have their hands full," said Chris Dodd in response to his committee's approval. The AP does not specify whether he laughed diabolically or just smirked when he said it. I vote both.

Next Janet must be confirmed by the Senate. We doubt the Senate knows enough about how the economy really works to offer up much resistance. We guess Richard Shelby has taken Econ 101 however as he stated he was opposing Yellen because she would bring an "inflationary bias" to the Board.

If that's what we're calling it these days...

San Francisco Wastes $25 Million to Find Out Its Parking Situation Sucks



Let me save the city $25 million it doesn't have and call this doomed right off the bat because there is never available parking in San Francisco. A supply and demand parking system would work great in a city that actually has its parking in order to begin with. Being that this is San Francisco, I can almost guarantee parking spots will cap out at the maximum nearly all hours of the day and off-meter parking in residential areas will be even more impossible to secure (as if it isn't already).

Way to go, SF, you just chased out the last remaining car owners you had, not to mention scared away any Bridge and Tunnel folks looking to cruise around in their Land Rovers on weekends. FAIL.

NPR:

San Francisco is about to spend $25 million to answer a simple question: How much should a city charge for parking?

The price should be cheap enough that most of the metered spaces and city parking lots are always almost full.

But it shouldn't be so cheap that spaces are entirely full, leaving drivers frustrated and adding to congestion as cars circle endlessly looking for a place to park.

The system will use electronic sensors to measure real-time demand for parking spaces, and adjust prices accordingly. When there are lots of empty spaces, it will be cheap to park. When spaces are hard to find, rates will be higher.

The range in prices will be huge: from 25 cents an hour to a maximum of $6 an hour, according to the San Francisco Municipal Transportation Authority.

Eventually, drivers will be able to find open parking spaces by going online, checking their mobile phones or reading for new electronic signs that will be posted throughout the city. (Warning to SF pedestrians: Watch out for drivers who are checking their phones to search for a parking place.)

Great. So instead of $2 an hour, parking will be jacked up to $6 anywhere worth going in the city and the DPTards at SFMTA will clean up on parking tickets as residents squeeze themselves into red-curbed spots just to avoid having to pay meters to park in front of their own homes. I just don't see how this can't work, it's genius!

NPR does not mention that the 2-hour rule is generally in effect across all metered parking areas in the city, so it isn't like moochers can plop down in the cheap parking and squat there all day. That being said, is the city REALLY looking to simplify the parking situation or is it instead looking to clean up on all that precious concrete real estate that isn't being used (read: taxed) to the fullest?

I vote #2.

Surely this has nothing to do with those 1000 additional metered spaces the city has been trying to install to help its budget problems. But what does the city do when its budget is fractured? Spend more money, natch!

How the Great Recession Was Brought to an End Or, Alternatively, "Keep Dreaming, Stupid..."



Super economists Alan Blinder and Mark Zandi have released an incredibly bold piece of work actually titled “How the Great Recession Was Brought to an End" in which they insist that government stimulus and the Fed's easiest money policy since Greenspan was furiously trying to reinflate the tech bubble have actually saved the economy.

In case you aren't familiar with their work, Blinder is now a Princeton prof and former Dirty Fed operative while Zandi makes a living as Chief Economist at economic collapse superstore Moody's.

TARP isn't the star of the report, instead credit goes mostly to the Fed's efforts to inject the economy with as much fake money as possible to replace the vaporized capital that started drying up right around 2008 and has continued to evaporate since. Don't worry, that's why we're ready for QE 2.0, 2.1 and 3.0 if necessary. Whatever it takes, right?

Anyway, let's see what these economic rocket scientists have to say, shall we?

The U.S. government’s response to the financial crisis and ensuing Great Recession included some of the most aggressive fiscal and monetary policies in history. The response was multi-faceted and bipartisan, involving the Federal Reserve, Congress, and two administrations. Yet almost every one of these policy initiatives remains controversial to this day, with critics calling them misguided, ineffective, or both. The debate over these policies is crucial because, with the economy still weak, more government support may be needed, as seen recently in both the extension of unemployment benefits and the Fed’s consideration of further easing.

In this paper, we use the Moody’s Analytics model of the U.S. economy—adjusted to accommodate some recent financial-market policies—to simulate the macroeconomic effects of the government’s total policy response. We find that its effects on real GDP, jobs, and inflation are huge, and probably averted what could have been called Great Depression 2.0. For example, we estimate that, without the government’s response, GDP in 2010 would be about 11½% lower, payroll employment would be less by some 8½ million jobs, and the nation would now be experiencing deflation.
When we divide these effects into two components—one attributable to the fiscal stimulus and the other attributable to financial-market policies such as the TARP, the bank stress tests and the Fed’s quantitative easing—we estimate that the latter were substantially more powerful than the former. Nonetheless, the effects of the fiscal stimulus alone appear very substantial, raising 2010 real GDP by about 2%, holding the unemployment rate about 1½ percentage points lower, and adding almost 2.7 million jobs to U.S. payrolls.

Thank God Bernanke saved us from GD II!

While all of these questions deserve careful consideration, it is clear that laissez faire was not an option; policymakers had to act. Not responding would have left both the economy and the government’s fiscal situation in far graver condition. We conclude that Ben Bernanke was probably right when he said that “We came very close in October [2008] to Depression 2.0.”

I threw up a little in my mouth reading this. You may do the same. I find it interesting that Blinder and Zandi don't think a $13 trillion deficit and $2 trillion Fed balance sheet loaded with crap assets are a grave condition for the government's fiscal situation but hey, I'm not the economist.

The State of California Will Gladly Pay You Tuesday for a Hamburger Today



State Controller John Chiang is serious about getting a budget together or else IOUs it shall be:

"Failure to find consensus on an honestly-balanced budget is not an option. Every passing day of political paralysis leads us closer to a completely avoidable fiscal meltdown that will plunge the State’s credit ratings into junk status, slow the State’s economic recovery and force us to again issue IOUs to innocent Californians."

The Controller said that without a budget in place, his latest cash projections show the State’s cash will go into the red by the end of October. To ensure the State meets payment obligations protected by the California Constitution and federal law, the Controller could be forced to begin issuing IOUs in August or September to conserve cash to get us through the fall.

With a budget in place, K-12 schools could have avoided a $2.5 billion payment deferral scheduled for October. Without a budget, the Controller may be forced to accelerate that payment delay to September, depriving schools of needed funds as students return to classrooms.

Further delays in enacting a budget will wreak havoc on the State’s already-shaky credit ratings. Standard & Poor this spring noted that California's economy is stabilizing, but, "In our view, a significant risk to the state's fiscal situation – and credit – is that if the state fails to reach a budget agreement in a timely manner, a severe shortage of financial liquidity could result with significant implications to state operations….Given that the absence of a budget agreement precludes the state from tapping the capital markets for a cash flow borrowing, we believe that in a protracted budget negotiation stalemate, the state's relative credit quality could weaken."

hahahahahaha LOL, you hear that, California? Our relative credit quality could weaken. Quick, hit the deck, they're going to cut our credit cards!

With all due respect to Mr Chiang as we all know he has one of the worst jobs in the state (at least that guy selling oranges at the 280 Ocean Ave off-ramp has product to sell), he did get the memo that we're already considered a credit risk, right? As in worst credit rating in the entire United States, tyvm. You need not wonder why.

Who Doesn't Love Post-Its?

 Creative uses for Post-its:

Post-it notes, introduced in 1980 just like yours truly, are pretty much the greatest thing ever. I couldn't live without them. The NYT gave them a really excellent rub as they totally deserve that you should check out if you're sticky note obsessed too.

Perhaps the adaptations on the original are the ones I like the most, being partial to samba colors and custom Post-its myself.

TLP: This Can't Be Good

new york state finances
State and local governments across the country are in a panic to get their budgets under control. Service cuts, new taxes and fees, layoffs — all of it figures in. But most places at least have a handle on the basics, like how many people are on the payroll.

Welcome to New York, as reported by the NYT:
As Gov. David A. Paterson calls lawmakers back to work on the budget this week, he has announced that the fiscal situation is so serious that he must begin laying off state workers. But there is one wrinkle, as officials try to pare government spending: No one knows for sure how big the state work force actually is.

That is because the state has not one but two public payrolls.

One is controlled by the governor, encompassing about 131,000 employees, who toil for agencies like the Health Department, the parks department and the Department of Motor Vehicles. That payroll has shrunk by about 25 percent in the last two decades — so has the much smaller legislative payroll — and usually shoulders the brunt of layoffs.

The other lies beyond the direct control of the governor and includes perhaps 163,000 more workers employed by independent public authorities and agencies — though that number is an estimate, because not all authorities have been reporting their payrolls to a central state registry. And projections of state employment by the federal government do not always match the state government’s figures. The work force beyond the governor’s control has largely bucked the statewide retrenchment, according to a review compiled by The New York Times.
Count on it being ugly.

TLP: Could Ronald Reagan, That Ronald Reagan, Win Tea Party Votes?

reagan tea party
Part of the Tea Party's appeal to its followers is the rhetoric that says things are massively fucked up and would be so much better if we could only get rid of that socialist Obama and the Democratic Congress. Misty-eyed recollections of Ronald Reagan are not uncommon amid the borderline nutjobbery.

But misty eyes don't always see clearly. At least, that's the take from CNN contributor John P. Avalon, who uses a Reagan campaign speech for Barry Goldwater to both cite Reagan's influence on the Tea Party and offer a reality check on the idol worship.

CNN:
The nationally televised address, known as "A Time for Choosing," is a classic — smart, funny and still so resonant that the rhetoric Reagan used more than 50 years ago echoes in Tea Party protests today.

Reagan tried to raise the stakes of the election with a vision of apocalyptic ideological conflict, pitting heroic defenders of the Founding Fathers' vision against big-state bureaucrats, willfully wasting taxpayer dollars on counterproductive do-gooder programs that are dragging America toward socialism.

Consistent with the Tea Party's self-image, it was primarily an economic speech, advancing a small-government libertarian economic philosophy, making statistics come alive with talk of fallen empires and American history, arguments aided by the added urgency of global conflict with communism. There is the specter of growing government power eclipsing the Constitution, the perverse incentives of the welfare state as an insult to hardworking individuals, all culminating in a citizens' resistance against elite liberals ruling by fiat from Washington.

It is compelling stuff, with the pitch-perfect delivery of a trained actor finally getting to recite his own lines. Speakers echo its themes from stages today almost like a tribute band. But, of course, times have changed a lot since 1964 — and so some questions arise.
Those questions? Avalon asks how the Tea Party can be so nostalgic for a time at which Reagan said, "freedom has never been so fragile, so close to slipping from our grasp as it is at this moment." Why didn't Reagan address civil rights, a dominant issue at the time (and one that this year burned Tea Party fave Rand Paul)? And where did the Reaganesque civility go?

More CNN:
Reagan never attacks then-President Lyndon Johnson by name, and he is even careful to use the phrase "our liberal friends" when slapping the domestic left. He does not question their patriotism or call them communists — after all, the Cold War was still on, and that insult seemed more idiotic and offensive than it does now.

There is a final irony — the Reagan who was elected governor of California in 1966 and ran for president in 1980 would have a hard time getting the GOP nomination today. The self-appointed sentinels of conservatism would have taken issue with the fact that as governor, Reagan raised taxes by a billion dollars to close a budget gap and increased the size of the state workforce by 50,000. He also raised taxes as president.
Goldwater, of course, lost and it was another dozen years before Reagan ran for president, unsuccessfully, before winning the next time around. It's also true that American voters did elect Obama and the Democratic Congress two years ago. But politics is always about what's ahead. Even when you're looking back.

The U.S. Can't Fix the Economy But We Can Still Threaten People (So There)



WikiLeaks founder Julian Assange will probably not be coming to the U.S. any time soon.

Via the Telegraph:

"Today the Whitehouse put out a private briefing to reporters about Wikileaks and me and it quoted a section from an interview with me in Die Spiegel saying that I enjoy crushing --------.

"Somehow the Whitehouse finds that offensive.

"In terms of returning to the United States I don't know. Our sources advise from inside the US government that there were thoughts of whether I could be charged as a co-conspirator to espionage, which is serious.

"That doesn't seem to be the thinking within the United States any more however there is the other possibility of being detained as a material witness and being kept either in confinement or not being allowed to leave the country until the Manning case is concluded."

You can implode our banking system all you want but don't you dare mess with our 9 year long wars.

In completely related news, the House just happened to give up $33 billion to both ongoing engagements in Iraq and Afghanistan.

The AICPA Complains New 1099 Reporting Requirements Under Obamacare are Burdensome (Read: Useless and Stupid)



The AICPA has sent a letter to the Senate and House condemning a requirement that would mean businesses must provide 1099s for every purchase above $600, even those from corporations. You don't have to be a CPA to see why this is a completely moronic idea. What happened to paperwork reduction?

I love the use of "extremely burdensome" - as most of you probably know, it's got to be REALLY annoying to get the accountants to bust out the "extremely" in a complaint.

Letter is as follows:

July 19, 2010

To the Members of the United States Senate:

The American Institute of Certified Public Accountants is very concerned about the significant compliance burdens placed on businesses by section 9006 of the Patient Protection and Affordable Care Act (P.L. 111-148) (“the Act”). The Act made two significant changes to the law that will take effect in 2012. First, the Act overturns a long-standing tax regulation providing that corporations were generally exempt recipients for Internal Revenue Code section 6041 reporting purposes. Second, the Act expanded information reporting requirements to business payments for goods (which is in addition to business payments for services, as required by current law). Thus, beginning in 2012 (reports due in 2013 for 2012 purchases), if a business generally purchases $600 or more in goods or services from another entity (including a corporation), the new provision requires the business to provide the vendor entity and the IRS with a Form 1099-MISC information return. For the reasons discussed in detail below, we believe section 9006 of the Act should be repealed because the provision imposes extremely burdensome information reporting requirements on business taxpayers that cannot be justified in terms of the limited utility such information reports will provide to government.

This expansion of information reporting may prove to be so burdensome to small businesses that we believe it will significantly contribute to the hurdles to growth and formation that businesses face. When businesses start tax compliance planning for 2012, section 9006 will impose a significant increase in costs on business with respect to the accumulation of relevant information and the preparation and mailing of Forms 1099-MISC. In addition, many corporations operate on a fiscal year basis rather than on a calendar year. Receipt of Forms 1099-MISC by these fiscal year corporations would not provide useful information as the corporations would be receiving calendar year information, triggering a burdensome income reconciliation procedure for the taxpayer that would be necessary to interpret the data. Indeed, the information reported to the IRS will prove of little value to the government due to the great difficulties the Service will face when trying to reconcile payments made for goods and services reported on Forms 1099-MISC and income reported by the vendor entity on its tax return. The business implementation costs associated with the likely generation and receipt of millions of forms, the difficulty of establishing that Forms 1099-MISC were actually received, and the potentially mind numbing reconciliation processes for businesses should be weighed against the uncertainty of the benefit to be derived by the government. The AICPA strongly supports efforts to reduce the tax gap, but we believe the extraordinary burden in this instance far outweighs the potential benefit.

Repeal of section 9006 of the Act is the best alternative to imposition of an overwhelming compliance burden on the nation’s small business community. IRS Commissioner Douglas Shulman has acknowledged publicly that the business community is concerned about the compliance burdens associated with this provision. In May 2010, Commissioner Shulman stated that the IRS plans to use its “administrative authority to exempt from this new requirement business transactions conducted using…credit cards and debit cards.” This potential exemption may mitigate some burden; however, we are still concerned with the overall level of burden placed on taxpayers. Thus, we remain convinced that repeal of section 9006 is the best solution for American businesses.

Why stop with repealing section 9006? I vote a repeal of Obamacare!

Replacing Janet Yellen at the San Francisco Fed: Christina Romer?



So I guess you kids haven't been doing your duty and inundating the SF Fed with recommendations for yours truly to head up my hometown Fed bank and instead Christina Romer is dominating the buzz around Janet Yellen's soon-to-be-vacant position.

WaPo:

Yellen will leave behind the presidency of the Federal Reserve Bank of San Francisco, a plum position: It has a long tradition of presidents who are influential shapers of monetary policy, its district encompasses the entire western U.S. and more people than any other Fed district, and it regulates dozens of major banks, including the nation's fourth largest, Wells Fargo. And hey, San Francisco may have the nicest climate of any city with a Fed regional bank.

So who's in line for the job? In Washington, the most widely discussed candidate is Christina Romer, currently chairman of the Council of Economic Advisers in the White House. By all accounts she is enjoying the White House job, but there are several reasons that an appointment to the San Francisco Fed would make sense from a personal perspective: Romer has always viewed her Washington stint as a temporary affair, her teenage son begins high school this fall, and her husband David Romer went on leave from his post at Berkeley to come to Washington (he has been working at the International Monetary Fund).

Well there you go, Romer won't take the job, it would mean putting her son in the bottom 5% public school system in the country. Oh who am I kidding, the SF Fed chief makes twice as much as those podunk Fedheads in cheap locales like Kansas City and - ahem - Richmond so surely she'll find a great private school to plug him into. Like Mercy High, maybe? Bwhaha.

Anyway, I take issue with WaPo's description of our climate as best in the entire Federal Reserve System - it's only best if you enjoy hiding out in a hoodie 360 days of the year, dodging non-stop rain for 6 months out of the year and rocking a supremely awesome hipster tan year-round (for the uninitiated that means we don't get any damn sun). Hey, maybe Romer is into it or can figure out a way to spend most of her time supervising SF Fed's LA branch. Mmm hmm.

Get it, girl, get it. I need a new punching bag so start working on your moronic statements, I'm going to miss having Janet to rip on from homebase.

TLP: Apparently, It Took Actual Research To Figure This Out

executive compensation
DealBook has a shocker:
Corporate boards appear to routinely use compensation peer groups to artificially inflate pay for their chief executives, helping to contribute to the cascading increases in executive compensation over the last several years, according to an academic study on corporate governance.

While the rate of pay increases was nearly 11 percent in one recent year, the study highlights one of the various ways that corporate boards go about determining huge compensation packages for executives.

Executive pay has increased substantially over the last few years. For example, in 1965 chief executives at major American companies earned 24 times more than a typical worker, while in 2007 they made 275 times more, according to the Economic Policy Institute. This sharp increase in income for chief executives, coming as wages for ordinary Americans remained relatively flat, has become one of the more perplexing questions in social science and business. Are chief executives that much more valuable now than they were 45 years ago?

Social scientists have looked at a number of reasons for the disparity in pay, with many believing that it has something to do with weak corporate directors simply giving into the demands of management, which are often leading the boards.

The common answer as to why chief executives are paid so much money is that boards want to “retain talent” and fear losing their chief executive to a competitor. Compensation committees on boards hire consultants to advise them on how much other chief executives at rival companies are paid to make sure that they are not undercutting their own top executives.
For the full circle jerk, check out ScienceDirect.

An Unlikely Health Threat: Paper Receipts?

 Only if it's BPA-free tyvm...

Serious. I'm waiting patiently for the San Francisco Board of Supervisors to outlaw paper receipts entirely. In the meantime, California legislators have been trying for years to keep BPA out of our babies' mouths (the latest attempt is SB 797) and the FDA has expressed some concerns that even "safe" levels of BPA (found in common products like CDs and automobile parts) can still cause development issues in infant brains, early onset of puberty in children, altered immune function, hyperactivity or increased aggressiveness, decreased sperm production and various types of cancer.

But paper receipts? Really?

WaPo
:
As lawmakers and health experts wrestle over whether a controversial chemical, bisphenol-A, should be banned from food and beverage containers, a new analysis by an environmental group suggests Americans are being exposed to BPA through another, surprising route: paper receipts.

The Environmental Working Group found BPA on 40 percent of the receipts it collected from supermarkets, automated teller machines, gas stations and chain stores. In some cases, the total amount of BPA on the receipt was 1,000 times the amount found in the epoxy lining of a can of food, another controversial use of the chemical.

Sonya Lunder, a senior analyst with the environmental group, says BPA's prevalence on receipts could help explain why the chemical can be detected in the urine of an estimated 93 percent of Americans, according to the Centers for Disease Control and Prevention.

"We've come across potentially major sources of BPA right here in our daily lives," Lunder said. "When you're carrying around a receipt in your wallet for months while you intend to return something, you could be shedding BPA into your home, into your environment. If you throw a receipt into a bag of food, and it's lying there against an apple, or you shove a receipt into your bag next to a baby pacifier, you could be getting all kinds of exposure and not realize it."
See, I'm a big huge undercover gaywad and store receipts going back years just to commemorate certain times in my life that I'd like to remember. It's not like I roll around in them with my 7 year old but still, paper receipts?!

TLP: The Government Welcomes Your Comments and Suggestions!

federal regulations
Not finding the federal rule-making process exciting enough? Lucky you. No more dead time in the mind-numbing midsummer heat. You now have a user-friendly way to kill the hours, thanks to a redesign of the Federal Register.

The Washington Post:
The Register is the federal government's weekday compilation of new and proposed policies, regulations and public meeting notices. The first edition published in 1936, and its first Web site launched in 1994. An essential resource in Washington's legal and lobbying circles, the Register is rarely used by most Americans unfamiliar with its legal and bureaucratic jargon.

But Monday's relaunch should make the Register even easier to navigate: Its new Web site will divide the thousands of federal rules and regulations into six main categories: money, environment, world, science and technology, business and industry, and health and public welfare. (Editors will add other sections with public feedback.) Register employees will highlight items on the home page that relate to the day's headlines or topics of Washington debate. Each notice will appear on an individual page with a plainly written summary, links to agencies seeking formal public comment, and the ability to share items on Facebook and Twitter.

"It's like USA.gov meets USA Today," Register managing editor Michael White said during a recent preview for reporters.

"We think it will open up the site in a way that the general public wouldn't normally go into it," he said.
Mild understatement there. The Register is nothing if not something the great unwashed "wouldn't normally go into." The redesign was launched to mark the publication's 75th anniversary at a cost of $275,000 after five months of work. Since that involved three federal agencies and as many private developers, it actually sounds like something approaching government efficiency.

Now, get to it, good citizens. The comment period has been extended for the Proposed Establishment of the Pine Mountain-Mayacmas Viticultural Area.