The Second Annual Jr Deputy Accountant Fed Year In Review


 someone has to make it rain...

I can't believe another year has gone by and have to say this one was just as exciting as the last except minus a few ugly scandals and some hot FOMC action but hey, they can't all be 2008 right?

Here's last year's wrap up if you missed it and don't worry, 2011 promises to be just as exciting if not more. We're still waiting patiently for CRE to tank and eventually silver is going to have to come out in the wash, which we guess will happen some time after March. I was a little sparse in my normal being-up-the-Fed's-ass activities this year as I lost both a mother and a grandmother within 7 months, retired from my job and moved across the country from San Francisco to DC so if I missed something, forgive me.

Anyway, I know you've all been waiting anxiously for this so here it goes.

In January, we kicked things off waiting for Bernanke to get confirmed for a second term and boy did that get ugly. St Louis Fed President James Bullard blasted out of the gate and took the Quote of the Year award not even a month into it with "the Fed is a firefighter, not an arsonist" while he whined about the Fed being the scapegoat. TIME's Michael Grunwald, who wrote Ben Bernanke's Man of the Year piece in 2009, insinuated that I was a right-leaning hawk but forever credited me in the mainstream media for the term Zimbabwe Ben, which I am eternally grateful for. Bailout watchdog Neil Barofsky started two inquiries into the AIG mess but everyone is still employed at the NY Fed so, as suspected, nothing came of them. The Fed's advanced money laundering scheme netted the Treasury a whole $45 billion in "profit" for the year, something we didn't hear the end of when we were busy lighting our pitchforks. The Fed actually talked about selling some of the crap on its balance sheet but, uh, we all know how that turned out.

In February, Richmond Fed got cussed out by Zero Hedge but turns out he screwed up a few details so it was merely a mild ass-whooping as opposed to a full-on bitchslap. The Fed came out with its latest financial accounting manual or, as JDA likes to call it, a "A Guide to Cooking the Books for Central Banks" - gee, it must be nice to write your own accounting standards! Bernanke came out and tried to say there was really no net impact on the taxpayer when it comes to his Fed's shenanigans but then employers got hit with an average 27.5% increase in unemployment taxes and that whole lie was blown to bits. Whoops. In one of my favorite posts of all time - Federal Reserve System Presidents: "This is Your Ass!" - we watched Fed presidents scramble to cash in all the favors they could ahead of financial reform and I have to say it was better than chocolate but not as good as sex. Of course it ended up working out in their favor even if they did do a lot of fighting amongst themselves during the whole thing.


By March, Fed vice chair Donald Kohn was out and the search for a replacement was on. Save the Fed's Ass 2010 was in full swing and they were both trying to get along and trying to convince Congress not to pull the plug. The Fed got to keep TBTF and Chris Dodd left them alone. Then DISASTER and my worst nightmare: Obama tapped Janet Yellen as the next Fed vice chair. Then Chris Dodd realized he could tap the Fed's secret backdoor and boy did he. The FOIA war raged on, with a Manhattan appeals court ruling the Fed had to reveal recipients of its $2 trillion in emergency loans during the 2008 crisis but in the end the Fed won that. Until Dodd-Frank said otherwise but that comes later in the year.

In April, we got the Maiden Lane details we've been waiting for. Hey buddy, what are those? They're zeros. They tried to come out with a new $100 bill but we know that by the end of the year, its release had been delayed due to printing press problems. It's a beautiful thing.

Then May came and audit the Fed was trendy again but that died pretty quickly and as we've always said, it's hard to audit an entity that gets to come up with its own rules. We found out Janet Yellen is filthy rich and Ben Bernanke is broke but that's nothing new, he lost 29% on his investments in 2009 and hasn't done so great with ours so we were not surprised. Oh and it wasn't hard to blame the Fed for JP Morgan's silver manipulation (hint: it involves Bear Stearns). The Fed's two Chucks later went on record saying they blamed Europe for all our trouble.

In June, Taco Bell petitioned the Fed to print more $2 bills so folks could buy their $2 meal deals but gee, the Fed doesn't actually print money, that's the Bureau of Engraving and Printing. Besides, what about tax? And please don't encourage them. The Fed opened up the spigot so the failing Eurozone could get all the dollars they needed but NY Fed's Brian Sack assured us this wouldn't be a permanent sort of thing (as of today, they're still wide open). And Fed audits came up again but by then I was bored with the entire idea and had given up completely. Oh and someone at the Fed must have lost the financial accounting manual but thankfully I had an extra copy and they found me (you're welcome).

July started with Richmond Fed economist Kartik Athreya pissing everyone off by implying only those with PhDs should be allowed to talk about economic matters. We also found out (shock) that Tim Geithner and Ben Bernanke lied when they told us the crap Bear Stearns assets they made us pick up were investment-grade. They weren't. Dallas Fed President Richard Fisher was hard at work trying to overthrow Richmond Fed's Jeffrey Lacker as JDA's #1 Fedhead and said that he was pretty much done with all this bullshit. Things got really interesting when a bunch of former Fed officials started railing on the current Fed, which got JDA pretty excited (doesn't take much). The Senate Banking Committee confirmed Janet Yellen as Fed vice chair and it's pretty much been downhill since.

By August, Lacker officially got dethroned by Fisher as my #1 Fed President and Fisher remains a safe #1 to this day. To Lacker's credit, I still think he has the best hair (that should be some small consolation I hope). I digress. The big bad Fed started foreclosing on folks and of course the media screwed it up and called it "the government" but we all know that's BS so we'll let it go. The FOMC decided to invest proceeds from previous bad investments er bailouts in new bailouts as a precursor to their big $600 billion buy announcement, which would come in November. They kicked off that little stunt with a piss poor $2.55 billion purchase. Oh and let's not forget former Fed governor and current Columbia professor Frederic Mishkin exposing himself as a big fat fraud.

September came and Bernanke was feeling a little Lehman regret (aren't we all). And the NY Fed passed off its AIG liability to - who else! - the taxpayer.

By October, NY Fed President William Dudley was wishing inflation would run a little hotter and his head of market ops was right there calling for more, more, more. The new (UGLY) $100 bill was delayed because they broke the press or something and that made for some good laughs and a sigh of relief because the damn thing was hideous anyway. No new bills for Timmy, sorry! But wait, is the Fed insolvent?

Well crap, they better not be because in November, they blew everyone's minds (yeah right) by announcing a new round of fresh money in the form of $600 billion in Treasury purchases. Monetization? Sure! Oh and the Fed surpassed China as our greatest creditor but hey, that should work out OK right? We wondered out loud if the Fed would bail out the muni market, maybe they're already working on it.

And that brings us to December, when the Dirty Fed tried to steal Christmas (you can guess how that turned out) and WC Varones wrote a very polite letter to Kansas City Fed President Thomas Hoenig explaining his feelings on the First Amendment. Bernanke and I had a birthday on the same day once again (happens every year) except mine was exponentially better. He went on 60 Minutes (AGAIN!) and said the Fed isn't printing money but sort of somewhat technically they are and it just so happens that contradicts his last 60 Minutes statement which said they are printing money. I made Stop Bernanke bumper stickers because frankly I'm sick of it and the man needs to be stopped. Oh and let's not forget this new transparent Fed, who were brave enough to try their first live streaming webcast of a meeting. 3000 people logged on to watch Fed Governor Daniel Tarullo spend a lot of time trying to look like a) he was reading the book and b) not picking his nose. Awesome.

It's been awful and fantastic (sometimes at once) and all of it so much fun to watch.

Thanks all of you for riding along and see you next year.

California Stoners Feed the Needy In Exchange For Weed



Only in California. Go, stoners!

A Soquel pot dispensary decided to run a food drive - with a twist. For every 4 cans of non-perishable food items donated by clients, the dispensary would offer one joint (up to 3 per client). We don't know if this was Mexican skunk or Green Crack or what (we'll leave that sort of investigative journalism to the professionals like, uh, the fine folks at the New York Times) but yay for these philanthropic potheads!

Via the Santa Cruz Sentinel:

Granny Purps handed out 2,000 joints to dispensary clients and collected 11,000 pounds of food, a large contribution for a business of its size.

"We look at pounds donated per employee, and Granny Purps, with about eight employees, received the amount of donations that we'd expect a business with 30 to 40 employees to get," said Danny Keith, chief development and technology officer at Second Harvest.

OK so we have to know: did Granny Purps donate any brownies?

Why Is Cyveillance Constantly Up My Ass?

 You're creeping me out!!

I would actually like an answer to this question. Can any of my fellow fringe financial bloggers help me out on that one?

Here's a big fat hint: they tend to show up most when I talk about the New York Fed, Goldman Sachs, and Timmy the Tax Cheat. Since the three tend to roam in a pack, it's hard to tell who actually pays Cyveillance to keep an eye on the chatter but my guess, based on what I can see (I saw what you did there), the NY Fed is the most likely client culprit. Maybe the New York Fed and the Goldman rats got a package deal for the Silver Fringe Blog Stalking Package.

Perhaps it's just innocent brand monitoring but I have to admit the name alone creeps me the hell out. I invite any of the many Cyveillance offices to get in touch if they have questions or need clarification, specifically on that bit about the Dudley/Dimon sex tape or how Lloyd Blankfein likes to get his balls rubbed by the fine folks at the NY Fed. I especially invite them to get in touch if they are, in fact, fans of my work locked in the sad world of stalking people on the Internet for a paycheck.

Muahz!

The St. Francis Hotel Money Laundering Operation

 pic credit: Kent Howie

"A San Francisco hotel is laundering money — literally." [SF Gate]

That's not a story. Tell me a story about what the SROs have to wash in San Francisco. “The biggest problem in the neighborhood, after crack, is bed bugs.” [Bedbugger]

TLP: Can You Get a Hangover at a Tea Party?

o'donnell probeDoes she weigh the same as a duck?

Seems like Christine O'Donnell has given someone in the Justice Department either a bad hangover or a big hard-on.

AP via HuffPo:
Federal authorities have launched a criminal investigation to determine whether failed U.S. Senate candidate Christine O'Donnell broke the law by using campaign money to pay personal expenses, according to a person familiar with the investigation.

O'Donnell, the Delaware Republican and tea party favorite who scored a surprise primary victory this year only to lose badly in the November general election, denied the charges and suggested they were being driven by her political opponents on the right and left, including Vice President Joe Biden.

The person spoke to The Associated Press on condition of anonymity to protect the identity of a client who has been questioned as part of the probe. The case, which has been assigned to two federal prosecutors and two FBI agents in Delaware, has not been brought before a grand jury.

O'Donnell, who set a state record by raising more than $7.3 million in a tea party-fueled campaign this year, has been dogged by questions about her personal and campaign finances.

At least two former campaign workers have alleged that O'Donnell routinely used political contributions to pay personal expenses including her rent as she ran for the Senate three consecutive times, starting in 2006. She acknowledged in a newspaper interview in March that she paid part of her rent with campaign money, arguing that her house doubled as a campaign headquarters.

The U.S. Attorney's office in Delaware has confirmed it is reviewing a complaint about O'Donnell's campaign spending made this year by a nonpartisan watchdog group, Citizens for Responsibility and Ethics in Washington. But officials in the office and the FBI declined to say whether a criminal investigation was under way.
So, this seems like either due diligence on behalf of the D0J or an effort to make sure O'Donnell doesn't make another run for something next time around. But, really, she was pretty much pure entertainment by the time it was all over. Either as a whack job or for a wank job, depending on your point of view.

Verizon Prepares For Its Day In the iPhone Sun



Hey "stupid [Mac] rumor sites", @JohnnyDeath beat you all to it, there it is right there in plain old Verizon red and white.

Start beating off furiously at the very thought of it, Mac freaks, I'm waiting. And be sure to get it on video but don't try to email it to me until you're on my beautiful Verizon network because, well, we all know AT&T doesn't do data very well.

Wait, Do You Mean to Tell Me That Fed Presidents Are In Bed with the Bankers?

Shhh, it's a secret meeting

God bless you, Bloomberg, for your Don Quixote FOIAing.

A little digging on their part has revealed that NY Fed President William Dudley (who took over for Tim Geither, another known conspirator who has the audacity to meet with those in the finance and banking sector on a regular basis) used his first few days in the office to meet with GS rats and Citi operatives. Somehow this is shocking to someone if it warranted an entire article.

Bloomberg:
Federal Reserve Bank of New York President William Dudley scheduled meetings with top Goldman Sachs Group Inc. and Citigroup Inc. officials in his first days on the job, his daybook showed today.

Dudley, a former partner and chief U.S. economist at Goldman, had an appointment to meet that bank’s chairman, Lloyd Blankfein, on Feb. 6, 2009, according to his schedule for 2009 and the first nine months of 2010. Four days earlier, Goldman was the topic of a planned meeting between Dudley and his staff.
Who wants to bet they talked about how Master Blankfein likes to get his balls stroked and the best way Dudley could do that in absence of that good little bitch Timmy?

Getting worked up over this is like getting worked up over hearing Richmond Fed's Jeffrey Lacker had a date with BB&T's Kelly King or that Dallas Fed's Richard Fisher went ATVing with Town North Bank CEO (and Big 4 alum) Steven McDonald. Who cares?

Show me a Jamie Dimon/Bill Dudley sex tape and we might have something otherwise please don't bother me with this nonsense until you have something useful to tell me that isn't a given.

Stop Zimbabwe Ben!


Stop Bernanke bumper stickers are in my hands, email me with your mailing address (and praise if you want me to get it in the mail faster) if you want one. All I ask is that you put it somewhere someone will see (but not on public property such as buses or DC Metro trains or park benches outside of the Board of Governors as, well, telling you to do that would be encouraging criminal behavior) and, if you're up for it, send me a pic of it in the wild.

The motive is completely selfish as stopzimbabweben.com redirects to Jr Deputy Accountant for now but eventually if I get a few interns to do all my tedious work I'll actually put together a proper site.


Stop Zimbabwe Ben!

CMKM: The Greatest Financial Statements We've Ever Seen. Ever.



David Coffey, a Las Vegas CPA, had a pretty easy job when he audited the financial statements of CMKM Diamonds in 2002, there were only $344 in assets to account for. You read that right: $344.



So how is it, then, that CMKM is demanding $3.87 trillion from the SEC when they themselves were the ones running the unlimited printing press and issuing stock up the wazoo to dumb "stockholders" willing to bite on their scam?

And how does a company with $344 in assets do a few quick name changes and suddenly have 800,000,000,000 shares to throw out there?

This is from the suit against the SEC (yes, they had the audacity to sue the SEC):

In November and December, 2002, CYBER MARK INTERNATIONAL INC., a public company domiciled in Nevada, reverse-merged with Casavant Mineral Claims, which then held mineral claims to more than 600,000 acres within Saskatchewan, Canada, increased authorized capital from 500,000,000 to 10,000,000,000 common shares, cancelled all preferred shares, and changed its name to CASAVANT MINING KIMBERLITE INTERNATIONAL, INC. (CMKI); as of February 3, 2003, 7,241,653,404 shares were issued and outstanding.

16. During the succeeding months CMKI declared a 2 for 1 stock split and filed with the Securities and Exchange Commission: Form 15 exemption claim, July, 2003; Certificate of Amendment to Articles of Incorporation changing its name to CMKM DIAMONDS, INC. (CMKM), February 5, 2004; Certificate of Amendment to Articles of Incorporation raising its authorized capital to 500,000,000,000 common shares @ $0.001 par value, March 1, 2004; Certificate of Amendment to Articles of Incorporation correcting the par value of common shares as of December 26, 2002 to $0.0001 par value, July 13, 2004; Certificate of Amendment to Articles of Incorporation raising its authorized capital to 800,000,000,000 common shares @ $0.0001 par value, July 13, 2004.

Said the DoJ: "the extraordinary number of authorized CMKM Diamonds shares rendered the price per share almost meaningless: the conspirators controlled the printing presses and issued themselves a seemingly inexhaustible supply of shares and stock certificates; having evaded registration and reporting requirements, the conspirators were able to surreptitiously issue themselves hundreds of billions of shares without disclosure."

The story, should you be curious...

Floyd Norris via NYT in March:

Perhaps the largest case of “buyer’s denial,” at least in terms of alleged damages, is in the fraud involving a tiny company known as CMKM Diamonds, which purported to have valuable diamond mining claims. In reality, what it had was a publicity machine, including the sponsorship of a car at “funny car” races around the country.

Several shareholders in CMKM — some of whom kept buying shares after the government exposed the fraud — want 10 current and former commissioners of the Securities and Exchange Commission to pay them $3.87 trillion, an amount equal to about half the United States government debt in public hands. You might think that would be enough, but the suit claims those are merely compensatory damages. They also want punitive damages, but do not cite a figure.

And now those shareholders have taken to Facebook to pray, hope and wish that their dreams shall come true. This week or next, they repeat, this week or next. You want a good read? Read through some of the comments, especially the part about the screwed up bank transfers and the peasants storming the castle. They're actually holding out for an SEC payoff in the trillions - trillions - and believe the money will magically appear in their accounts this week or next.

The best part - the VERY best part - is that CMKM is blaming naked shorts for their problems, claiming it's their fault and the company wants justice. Really?! Who naked shorts a tiny full-of-shit penny stock company pumping out hundreds of thousands of stocks all safe from the SEC's not-so-watchful eye?

Despite evidence that clearly shows CMKM as a massive fraud, "shareholders" (I use the term as loosely as possible, in the same way I might use "wealthy" to describe an American who has amassed tens of billions of pieces of fake paper called Federal Reserve Notes) spread paranoia and denial all over the place, like this gem calling CMKM's collapse a government sting operation in which hedge funds and TPTB saw something shiny in CMKM's possession and quickly worked together to take it. I'm sure the government doesn't have a reliable uranium field and therefore conspires with hedgies to take someone else's, that sounds totally reasonable.


It must be a conspiracy!..... uhh...

TLP: Sending Money to Cuba and Feeling 'Super Good' About It

cuban cash
As Cubans continue to wait out Fidel — 51 years and counting — those who receive cash from the United States are getting a bonus, thanks to a change in currency regulations.

Reuters:
The U.S. Treasury Department's Office of Foreign Assets Control has licensed Western Union to pay out remittances in Cuban currency instead of U.S. dollars, avoiding a local 10 percent surcharge on the greenback.

Previously, U.S. restrictions forced Western Union, the principal company allowed to send cash transfers from the United States, to make payouts in dollars.

... The change helps cash-strapped Cubans by cutting their government's take from remittances, said Cuba expert Phil Peters, at the Virginia-based Lexington Institute.

"Since Cuba imposes a 10 percent surcharge on dollar cash exchanges, and since the (George W.) Bush administration prohibited Western Union from providing remittances in Cuban currency, the Cubans who received remittances lost ten percent of their money when they converted it to Cuban pesos," Peters said.

"By allowing Western Union to pay out the remittances in Cuban currency, there is no more 10 percent loss in purchasing power," he said.

At a Havana Western Union office, Cubans, often hard pressed to make ends meet, were thrilled over their unexpected holiday bonus.

"This is fabulous," Laudelina Milanes said. "It is a bit more money for us, and our families over there also feel super good."
Sure, it's only a small step. But it could mean that we're that much closer to something really super good: ¡ cigarros cubanos legales !

A Friendly Reminder: The FCC Is In the Process of an Attempted Internet Coup



Clyde Bailey of Lewistown, PA sums up the situation nicely [any grammatical errors forgiven because of his name alone]:

A government out of control will erode our freedoms and enslave us all. Our founding fathers designed our system with checks and balances in an attempt to prevent the over reaching of government that has and is occurring as we speak.

The FCC is actively engaged in an Internet coup, don't get caught without your defenses, people.

Neither Rain Nor Snow Nor Being Broke Could Keep the American Consumer Away




Does anyone actually believe this? Either America is stupider than I suspect (a likely scenario) or they're lying through their teeth, and it is likely a combination of the two. Did you really just do what I think you did, America? I'm ashamed.

Full disclosure: JDA blew a couple hundred in a few hours and got all her Christmas shopping done in a day. Even fuller disclosure: JDA has a steady income and rents a home that is not in foreclosure.

Reuters:

U.S. retail sales rose in the week before Christmas as shoppers hurried to finish their gift-buying, putting holiday sales on track to hit the high end of estimates, according to data released on Tuesday by the International Council of Shopping Centers and Goldman Sachs.

Retail sales rose 4.8 percent for the week ended December 25 compared to the year-earlier period, helped in part by shoppers who could shop all day on Christmas Eve, which was a day off for many given that Christmas fell on a Saturday this year.

The ICSC and Goldman Sachs said retail sales in November and December were on track to rise 4 percent compared to a year ago. Two weeks ago, on the basis of strong November sales, they raised their forecast to a rise of between 3.5 percent and 4 percent for the holiday season.

That forecast includes the effect of the snowstorm that slammed U.S. Northeastern states this week and kept shoppers away from storms.

The ICSC's chief economist told Reuters the blizzard could lower December sales' increase by half of one percentage point but said it may simply delay some purchases into January.

The East Coast got hammered and the news actually had the nerve to say this put a huge dent in retail's year end rally, as if a single snow storm can really kill that kind of wild frenzy. Who the fuck doesn't shop online?

Keep trying, TPTB, keep trying.

And America, if you really did this I swear to God I'm not talking to you for a year.

Wait a second, what's this about consumer confidence taking a sudden and unexpected plunge in December? Surely that's a misprint.

TLP: Who's Afraid of Haley Barbour?

barbour for president
You wouldn't think Haley Barbour cuts a very intimidating figure among the potential Republican candidates for president in 2012. A long-time lobbyist, the two-term Mississippi governor has spent his time in office trying to help his state recover from Hurricane Katrina and the BP oil spill. He's distinguished himself lately for remarks on racial issues that, to put it kindly, don't exhibit much in the way of an enlightened view.

Last spring, he was puzzled at criticism that Virginia's Confederate History Month omitted a mention of slavery, saying the controversy "doesn't amount to diddly". This month, he was 'splaining what he really meant to say about Citizens Councils in the South during the civil rights era.

And he's polling at 2 percent, behind Romney, Huckabee, another former governor whose name escapes me, Gingrich, Christie, Rubio, Paul, Jindal and Pawlenty, tying with Thune and Daniel for last.

So why did a fat file of flight logs suddenly land in the laps of Politico reporters?
The Mississippi state plane, a zippy Cessna Citation with a capacity of 12, is a model favored by corporate executives and the wealthy, and its principal passenger, Gov. Haley Barbour, might easily be mistaken for one of them when he arrives with a small entourage at airports in Washington, Las Vegas or New York, a car and driver waiting there at their disposal.

Barbour has traveled extensively on the jet, brushing off suggestions from Mississippi Democrats that he give it up in favor of a more modest propeller plane for his travel. The trips, according to a POLITICO review of the Cessna’s flight manifest since 2007, have mixed state business with both pleasure and national politics.

Some of Barbour’s travel may well have been worth it to Mississippi, a state that is heavily dependent on federal funds. But much of the time, he has used the plane to go to fundraisers for himself and other Republican candidates and committees, to football games and to at least one boxing match — travel that has a less obvious connection to what Barbour, a former top lobbyist in Washington, has cast as his lobbying on behalf of his state.

The flight logs obtained by POLITICO indicate that Mississippi has spent more than $500,000 over the past three years on Barbour's air travel. That total does not include security and other logistical costs associated with his trips. And through a quirk in Mississippi law, whenever the governor is out of state, Mississippi must pay the lieutenant governor a salary differential as acting governor.

Barbour has reimbursed the state for a handful of flights, but he has more often scheduled obscure official business to coincide with the business of politics, according to the manifest and logs, which were obtained from the Mississippi Department of Finance and Administration under a Mississippi Public Records Act request by a Democrat who has worked in the state, who provided them to POLITICO.
This has vendetta written all over it. Barbour pissed off or pissed on somebody and that somebody (a Democrat!) wants to make sure whatever crazy scheme Barbour has in his head for 2012 goes nowhere.

And we are just getting started.

Homeland Security Needs Your Help Spotting Terrorists at Walmart





Maybe that's why we can't find Osama, he's been hiding in Walmart! DUH! Why didn't we think to look there?!

Homeland Security would like your help sniffing out terrorists, America, and is hoping that a new campaign in Walmart stores across this fine nation of ours will help them advance that goal.

Remember kids: no one likes a snitch. Except the government, who can't get enough of them.

Here's the press release:

Department of Homeland Security (DHS) Secretary Janet Napolitano today announced the expansion of the Department's national "If You See Something, Say Something" campaign to hundreds of Walmart stores across the country - launching a new partnership between DHS and Walmart to help the American public play an active role in ensuring the safety and security of our nation.

"Homeland security starts with hometown security, and each of us plays a critical role in keeping our country and communities safe," said Secretary Napolitano. "I applaud Walmart for joining the ‘If You See Something, Say Something' campaign. This partnership will help millions of shoppers across the nation identify and report indicators of terrorism, crime and other threats to law enforcement authorities."

"Other threats". Define please, DHS. If you ask JDA to define, she will put Alan Greenspan, the FCC, Ben Bernanke, Janet Yellen, Tim Geithner, Larry Summers, my mailman who doesn't deliver until 7p every night, Homeland Security and a handful of other unsavory critters on the list. If you ask the DHS, JDA is probably in the "other threats" column but that's OK, that means I'm doing my job.

Fuck the Fourth Amendment, we're all terrorists now.

What Took California So Long to Release CPA Exam Scores?



If you're a CPA exam candidate in California who sat the last testing window of 2010, you might still be waiting for your score. If this is your first exam, get used to it. If you've been around the block at least once, you are probably used to the waiting game but wondering what the hell is taking so long. Comments from the Peanut Gallery are that candidates have never had to wait this long for their scores, with the Board pretty quiet on what's holding things up. Since they won't tell you, I will.

Here's the deal (though the CA Board hasn't come out and said as much as far as I know): we won't know until official NASBA data is released but late 2010 was hit with tons of CPA exam candidates, so many that the already-overloaded Board just couldn't keep up.

The 4th quarter is always popular with CPA exam candidates (many of whom wait the entire year to get around to taking exams) and traditionally hard to schedule but this year, with the 2011 exam changes coming down the pipe, many candidates scrambled to fit in as many parts as they could before CBT-e takes over. Dumb move if you ask me, 2011's exam is actually going to be easier with fewer written communications, smaller simulations and a spell checker in BEC! So for the California Board, more applicants meant more work and less time available to roll out scores.

The other issue with California scores is that Furlough Friday is still in place (darn budget problems) and while the Board will tell you it takes them 4 - 6 weeks to approve your application, it really takes more like 8 - 10. So between higher applicant volume and fewer days to process, the Board is already overwhelmed. NASBA pulled out the last scores of 2010 in mid-December but California appears to be rolling them out way late to the game.

Furlough Friday is pissing off more than CPA exam candidates.

If you're into the CPA exam, check out my previous CPA exam columns on Going Concern, which will keep me in a job and therefore keep me from writing about it here on JDA.

Dallas Fed's Fisher as the Light at the End of This Crazy Monetary Tunnel



These statements are 2 months old but completely relevant because the face of the FOMC is changing dramatically next year and God I couldn't be more ready for it.

See his confession to the Economic Club of Minnesota, October 7, 2010:
In my darkest moments I have begun to wonder if the monetary accommodation we have already engineered might even be working in the wrong places. Far too many of the large corporations I survey that are committing to fixed investment report that the most effective way to deploy cheap money raised in the current bond markets or in the form of loans from banks, beyond buying in stock or expanding dividends, is to invest it abroad where taxes are lower and governments are more eager to please. This would not be of concern if foreign direct investment in the U.S. were offsetting this impulse. This year, however, net direct investment in the U.S. has been running at a pace that would exceed minus $200 billion, meaning outflows of foreign direct investment are exceeding inflows by a healthy margin. We will have to watch the data as it unfolds to see if this is momentary fillip or evidence of a broader trend. But I wonder: If others cotton to the view that the Fed is eager to “open the spigots,” might this not add to the uncertainty already created by the fiscal incontinence of Congress and the regulatory and rule-making “excesses” about which businesses now complain?

RF has obviously been reading too much Jr Deputy Accountant, if there is such a thing as too much.

If you're into it, the NYT has a great write-up on what to expect next year. My official write-up is still in progress, after I work off the 14 lbs I put on over Christmas weekend I might be able to lift my laptop into my lap and get to it.

Philadelphia Fed's Chuck Plosser is obviously off the reservation and willing to make some bold statements of his own but it's Fisher that will be doing most of the shit-disturbing at the conference table in 2011, something JDA has been waiting more patiently for than Christmas morning all year. The Janet Yellen bitchslap bounty, which once stood at a mere $15,000, is now up to $50,000 for the first Fed asshat bold enough to reach across the table and give her a good wack. $50,000 and my undying love and affection for eternity, of course.

Anyway, I'll be standing in front of the Board all year with a "SAVE US, RICHARD FISHER!" sign on FOMC days if anyone cares to visit.

You can obviously see where I stand on the matter.

TLP: Either Way, She's Bound to Get an Education

palin arizona
OK, so I am taking a chance here. There was an edict issued and I'm not one to blithely disregard what JDA says. After all, she has been known to beat me. Not like I don't deserve it. Or like it.

Oh, well. I guess we'll see if this breaks the rules. Could be my ass.

Anyway, seems like Wasilla may not be all it's made out to be, reality teevee notwithstanding.

NYT:
Bristol Palin, the 20-year-old daughter of Sarah Palin, has bought a five-bedroom house in Maricopa, a modest community south of Phoenix, setting off a flurry of speculation as to exactly what her plans — and those of her famous mother — are for the desert dwelling. ...

Edward Farrell, Maricopa’s vice mayor and a fourth-generation resident, gave Todd Palin, Ms. Palin’s father, a tour of Maricopa earlier in the year and was under the impression that he was looking for a house for the entire family.

“I left the meeting thinking that maybe he and Sarah were looking for a place to live,” said Mr. Farrell, who was surprised when he learned that Ms. Palin was listed as the buyer.

Property records from Pinal County show that Ms. Palin bought a brown stucco house in the Cobblestone Farms development several weeks ago for $172,000 in cash. The price was not bad considering the house has 3,900 square feet and a three-car garage and sold for almost $330,000 four years ago.

The house went into foreclosure in January and was bought by investors from North Dakota for $137,200. They spruced it up for resale.
TMZ speculates that Bristol could be looking at getting edumacated at Arizona State University. I'll venture that she could be looking at a political career. Another second-generation Arizona Republican, Ben Quayle, just got himself elected to Congress. And who knows what Meghan McCain is up to?

If Palin is thinking politics, and if Quayle and McCain are in the mix, Bristol has some work to do. "Dancing with the Stars" is nowhere near naughty enough. McCain has been on tour for her "Dirty Sexy Politics" book and Quayle did a stint writing for a blog called "Dirty Scottsdale."

Study hard, Bristol!

Merry Guilt-After!



Feeling guilty yet, consumer? Don't worry, you have all year and a 24% APR.

On behalf of JDA, BooBoo Kitty, Meaty and TLP, Merry Christmas!

TLP: No Animals Were Harmed ...

high reindeer
So, if Santa is late this year or misses your house completely, it's probably not his fault.

The Huffington Post:
Turns out the myth of flying reindeer might not be that far from the truth: According to a piece in Pharmaceutical Journal by scientist Andrew Haynes, they (along with other animals) sometimes deliberately eat hallucinogenic fungi in order to amuse themselves during long winters.

The Sun reports:

Haynes believes reindeer deliberately seek out the mushrooms to escape the monotony of dreary long winters.

Writing in the respected Pharmaceutical Journal, Mr Haynes said: "They have a desire to experience altered states of consciousness.

"For humans a common side-effect of mushrooms is the feeling of flying, so it's interesting the legend about Santa's reindeer is they can fly."


In a slightly less appetizing tidbit, Haynes went on to say that herdsmen have been known to drink their own reindeer's urine in an effort to catch a buzz themselves.
Hey, I've been to some holiday parties where that would be an improvement.

Merry Lazy Christmas!

Mayer Hoffman McCann Blows a Bunch of Hot GAAS (And a Serious Audit)


 I'm no auditor so perhaps it's out of line for me to say as much but since when is $8.89 million considered not significant? MHM blew it when it comes to the California city of Bell and the office of the state controller doesn't like the "rubber-stamp" approach - maybe the state controller needs a lesson in "same as last year" and a quick and dirty primer on how audits really work. As in they are a total farce and rubber stamps are the best we can do when we're not checking boxes and counting chairs in warehouses on New Year's Eve.

LA Times:

A prominent accounting firm's audits of Bell's city finances amounted to a "rubber-stamp," according to a state controller's study concluding that much of the alleged wrongdoing would have been detected earlier had the firm done its job.

The long-awaited report is being closely watched because Mayer Hoffman McCann audits the books of dozens of government agencies in California and has 30 offices nationwide. Officials at several agencies, including California's public employee retirement board, have said they were awaiting the controller's study to help determine whether they would consider changes in their auditing contracts.

The controller's office found that MHM failed to comply with 13 of 17 "fieldwork auditing standards" when reviewing Bell's books in the 2008-09 fiscal year. The firm focused mostly on comparing financial numbers year to year rather than looking at potential for inappropriate or illegal activities, the controller's report said.

Don't trip, the California Board of Accountancy is on it. Surely.
Chiang said his office is forwarding the report to the state Board of Accountancy, which regulates accounting firms in California. A board official has said it would open an investigation. If significant problems are found, penalties could range from fines to the loss of licenses. The controller also sent copies of the study to the Los Angeles County district attorney's office and state attorney general, which have been investigating the city.

MHM strongly disputed the controller's findings, suggesting that Bell officials deceived the firm. "Recent evidence disclosed by the controller's office shows that Mayer Hoffman was subjected to a massive scheme of collusion that reached through every layer of city government, to undermine the audit process and deceive the auditors," the firm said in its response.

Bill Hancock, president of the firm, said in a statement that his firm "adheres to the highest standards…. But in those 50 years we have never seen anything like the pervasive collusion of so many individuals acting in concert to deceive auditors, as happened at Bell."

Ask Sam Antar, it isn't that hard to fool auditors, so we believe Bill when he says there was some serious conspiring going down if this ended up this fucked up.

The controller's office is looking at ways to strengthen audits to prevent this sort of embarrassment in the future but really, how much can piss poor California do? To actually get useful information out of audits would require a complete overhaul of the industry as we know it, several indictments and the end of the Big 87654 and their precious fees. And that's just for starters.

Did Chiang not get the memo that audits are, in fact, bullshit? It's called coloring in the coloring books and checking boxes, that's it. See also: Accounting Is a Sewer

How I Could Tell Congress Passed a Bill To Pay Its Bills

Pic credit: married to the sea

For the last week or so, my mailman has decided that showing up at 7p is totally acceptable. Just when I've given up on getting my mail at all (who the hell wants to brave the driveway at that hour in the freezing cold just for bills and junk ads?), yesterday I noticed a USPS truck blasting down my quiet street at - get ready for it - 2p! Unbelievable! What on Earth could this be about?

Well duh, it's because the mailman knows he's getting a paycheck this week.

Why does the mail suck so hard? The Federal Times seems to think it's the Postal Service's stupid cost accounting model. Always blaming the accounting, aren't we?

[S]ome have said that 80 percent of post offices lose money. The figure is wrong — and meaningless. That is because the revenue generated from the largest part of our mail — commercial mail — is credited to the post office where the mail is entered into the system and not to the post office whose carriers end up delivering that mail.

Under USPS' cost accounting system, all of the final costs of delivering the mail in a post office's area are included in the costs of the delivering post office — but none of the revenue associated with that mail is allocated to that post office.

Of course the delivery post office loses money. How could it not, when it bears the delivery costs but gets none of the associated income?

That 80 percent figure? It's understated. As the Postal Service recently told the Postal Regulatory Commission, 92.5 percent of post offices lose money. Only 2,205 post offices are "profitable," and those 2,205 happen to have the income of some big mailer credited there — even though the cost of delivering that mail is shared by post offices across the country.

If you want to make more post offices profitable, just change the cost accounting system so that revenues are properly allocated to post offices.

Of course the Postal Service is supposed to be self-funded but how the hell do they pay the bills when they're insolvent? Watch the government back away slooooowly (from the National Commission on Fiscal Responsibility and Reform, Obama's debt commission folks):

The report also supports greater management authority for the U.S. Postal Service.

"To put the Postal Service on a path toward long-term solvency, the Commission recommends reversing restrictions that prevent the Postal Service from taking steps to survive - such as shifting to five-day delivery and gradually closing down post offices no longer able to sustain a positive cash-flow."
Listen, I get that the Postal Service is allegedly fully self-funded by postage but who the fuck is keeping the lights on with them in the red?

China Buys (More) Gold



Filed under: Surely someone saw this coming.

WSJ:

Gold’s record rally has been attributed to everything from worries about inflation, the dollar and the emergence of exchange-traded funds. One big factor many may have missed: huge buying from China.

Data cited Thursday by China’s state-run Xinhua news agency showed that China imported 209.7 metric tons of gold in the first 10 months of the year, a fivefold increase compared with the same period last year.

That surpassed purchases made by ETFs and surprised analysts, who until now had no clear insight into the size of China’s buying.

Where the hell did China get 209.7 tons of gold from? It certainly wasn't the IMF, who just completed their massive sale of 400+ tons (sounds like they ended up a few short by the end of it):

During October and November 2009, IMF sold a total of 212 tons in this manner to the Reserve Bank of India, the Bank of Mauritius, and the Central Bank of Sri Lanka. On September 7, 2010, the Fund sold 10 metric tons to the Bangladesh Bank.

IMF said on Nov. 29 it told 19.5 tonnes of gold in October, but it has not yet provided details of sales in November or December.

Not looking to upset the apple cart nor ruin the trillions in dollars they're sitting on, the Chinese have chosen to take the domestic production route, claiming they're turning over 300+ tons a year. Who needs the IMF with gold like that?

For China to turn to the IMF for the gold they're hawking would be an outright admission that they've lost their faith in the dollar and we know they are much more clever than that.

Last we heard, China had quietly increased its gold holdings 75% in a 6 year period and no one knew.

TLP: But Can They Do It Without Moving Their Lips?

business news
I thought I had the laziest gig going. You know, read the "papers" like the old school news junkie I am, and then maybe find an article or two to say something about here. It's deliciously lazy and I barely carry my weight. Just ask Jr Deputy Accountant, if you can catch her amid the flurry of posts she manages to write between her real job and her other real job.

Anyway, reading the news just got lazier. The NYT explains:
The number-crunchers on Wall Street are starting to crunch something else: the news.

Math-loving traders are using powerful computers to speed-read news reports, editorials, company Web sites, blog posts and even Twitter messages — and then letting the machines decide what it all means for the markets.

The development goes far beyond standard digital fare like most-read and e-mailed lists. In some cases, the computers are actually parsing writers’ words, sentence structure, even the odd emoticon. A wink and a smile — ;) — for instance, just might mean things are looking up for the markets. Then, often without human intervention, the programs are interpreting that news and trading on it.

Given the volatility in the markets and concern that computerized trading exaggerates the ups and downs, the notion that Wall Street is engineering news-bots might sound like an investor’s nightmare.

But the development, years in the making, is part of the technological revolution that is reshaping Wall Street. In a business where information is the most valuable commodity, traders with the smartest, fastest computers can outfox and outmaneuver rivals.

“It is an arms race,” said Roger Ehrenberg, managing partner at IA Ventures, an investment firm specializing in young companies, speaking of some of the new technologies that help traders identify events first and interpret them.

Many of the robo-readers look beyond the numbers and try to analyze market sentiment, that intuitive feeling investors have about the markets. Like the latest economic figures, news and social media buzz — “unstructured data,” as it is known — can shift the mood from exuberance to despondency.
"Despondency?" Now we're talking. Snark, mockery and doom-and-glooming such as you find here at JDA are unbeatable at stirring up despondency. Click around, it's not hard to find.

News companies, including Bloomberg, Dow Jones and Thomson Reuters have gotten into this racket, the NYT says, by "offering services that supposedly help their Wall Street customers sift through news automatically." I know a circle-jerk when I see one; these same companies are reporting the news to begin with. Genius.

Now, where can I get one of these gadgets? After all, lazy is as lazy does.

Philadelphia Fed's Plosser Wants the Fed To Rethink This Whole Money Printing Thing

Cooked.


Welcome back, Chuck, we missed you!

Business Week:

The Federal Reserve may need to slow or stop its purchases of U.S. Treasuries in response to an accelerating U.S. economy next year, Philadelphia Fed President Charles Plosser said.

“If the growth rate of the economy continues to strengthen and looks sustainable, then I am going to be looking for the Fed to react to that,” Plosser said today in an interview on Bloomberg Radio’s “The Hays Advantage,” with Kathleen Hays. “That may be to cut back on the degree of accommodation in a gradual way. One way would be to begin stopping some of the purchases or slowing them down.”

Hahahahaha oh my dear misguided Fedhead, knowing the crew as well as you do do you really think they'll even consider such a thing? Bernanke should have just come out with an oversized check for $600 billion the last time the FOMC decided to throw more free money at the problem, it would be a more accurate representation of the foolishness to follow. Reconsider? Yeah right.

Print faster!

In case you haven't noticed, QE 2 has been a flop of sorts, except for that whole thing about not driving interest rates down like it was supposed to. Oopsie, blew that one didn't we?

WC Varones Spreads Christmas Cheer to the Kansas City Fed

Jesus used to save but now that he only gets .001%, he spends.


If you've been in a cave for the last week, the Fed tried to steal Christmas from one small Oklahoma bank by forcing them to take down the Bible verse of the day from their website and various Christmas items like crosses and employee buttons, claiming the items clashed with Reg B's anti-discrimination rules. Thankfully this matter did not disappear and we're all in a foaming-at-the-mouth outrage over it, which always makes my job that much more interesting.

Fire the examiner!

In the spirit of being helpful, JDA's favorite SoCal shit disturber WC Varones took it upon himself to send a nice note to Kansas City Fed President Thomas Hoenig, who allegedly really hates looking like a big dumb asshole according to our unreliable sources. Hopefully he takes this as WCV trying to prevent him looking like a big dumb asshole in the future and redeeming his big dumb asshole status by firing the idiot bank examiner who thought this would be a good idea. See? We're helpful.

Don't mess with Jesus, people. Seriously. He's already going to be livid when he comes back.

from      W.C. Varones
to          thomas.m.hoenig@kc.frb.org
subject  First Amendment

Dear Mr. Hoenig,

I read with great dismay the story of your bank examiner who arrogantly, and with callous disregard for the Establishment Clause of the First Amendment, prohibited the free exercise of religion in a bank within your jurisdiction.

I'm sure you appreciate that the Fed is already under intense public scrutiny due to its gross bungling of the real estate bubble and ensuing financial crisis. The last thing we need is another embarrassment over a petty tyrant in your branch.

I hope you will see fit to set an example of good governance by firing the person responsible for this outrage.

Merry Christmas!

Best regards,

W.C. Varones


Micah 5:2
“But you, Bethlehem Ephrathah,
though you are small among the clans of Judah,
out of you will come for me
one who will be ruler over Israel,
whose origins are from of old,
from ancient times. ”

(p.s. to any Dirty Fed asshat reading this: YOU are not the ruler over Israel of whom this verse speaks. Just FYI, motherfucker.)

RIP: The Internet


(h/t Sic Ibid via WC Varones)

Check out Ars Technica for an excellent primer on the FCC's new net neutrality rules, the meat of which we still don't have a good grasp of since the FCC was (intentionally, we presume) sketchy on the details and is still holding back. Gee, that doesn't appear to be suspicious or anything.

The Federal Communications Commission is releasing the details of its new net neutrality Order in stages. Although the FCC's new ban on "unreasonable discrimination" for wired ISPs allows certain kinds of traffic discrimination (not all bits need be equal), the agency made clear after today's meeting that "paid prioritization" deals with Internet companies are unlikely to be allowed. Critics had worried that the new Order would only affect outright website blocking, leaving paid prioritization untouched (or even implicitly sanctioned).

"Pay for Priority Unlikely to Satisfy 'No Unreasonable Discrimination' Rule," advises one subheading of the new net neutrality rules. Ed Whitacre's dream of directly charging Google and Yahoo to "use his pipes"—a key event in starting the entire net neutrality debate—appears to be dashed.

The first FCC attempt to choke the Internet didn't work, perhaps the second will. Or perhaps the Internet will revolt and declare its independence from this sick, twisted tyranny at work in Washington.

The FCC's own Meredith Baker: "We have two branches of government -- Congress and the courts -- expressing grave concerns with our agency becoming increasingly unmoored from our statutory authority. By seeking to regulate the Internet now, we exceed the authority Congress has given us and justify those concerns."

Here's the problem: were there a such thing as a free market in this country, the Internet would be completely self-regulating. Broadband providers would be able to do what they do best - provide - and actually make a profit based on the services offered and deals struck with those seeking to borrow their tubes. The government would stay the hell away (STRONG HINT: THE INTERNET IS A THREAT TO THE POWERS THAT BE as it offers the free exchange of information and, more dangerous, knowledge) and the market would be able to work out any kinks such as traffic clogs or unfair treatment by tube-owners to tube-renters.

But since we haven't seen a free market in my lifetime (possibly yours), we get a power-hungry FCC strong-arming the Internet into compliance.

I'm sure - no really, I'm SURE - this will turn out great for all of us.

Ask yourself why the United States has some of the worst Internet in the world. Do you realize kids in Korea average 46mbps?! I'm lucky to get 7 here in the DC burbs. In Japan, the average broadband speed is 60mbps with a cost of $0.27 per 1mbps. The U.S.? We average 4.8 and pay $3.33 per 1mbps. Sad, people, SAD.

And this is supposed to help? Someone please explain to me how.

TLP: Finally, the Answer to the Budget Crunch. For Reals.

budget cuts
Elected officials faced with seemingly unending budget crises and an increasingly frustrated and angry populace are turning their cost-cutting efforts to public employees. One more knife in the drawer that so far hasn't given governments much relief, despite attempts to outsource their workforces, cut services, increase fees, issue IOUs, raid community development funds, beg, plead and turn to privatization.

The Washington Post:
More and more, when politicians talk about government employees - whether they are federal, state or local - it is with the kind of umbrage ordinarily aimed at Wall Street financiers and convenience store bandits.

"We can no longer live in a society where the public employees are the haves and the taxpayers who foot the bill are the have-nots," Wisconsin's incoming Republican Gov. Scott Walker declared this month, as he raised the idea of stripping state workers there of collective bargaining rights.

Outgoing Minnesota Gov. Tim Pawlenty, who is mulling a GOP presidential bid, also sounded a class-war note last week on the op-ed page of the Wall Street Journal: "Unionized public employees are making more money, receiving more generous benefits and enjoying greater job security than the working families forced to pay for it with ever-higher taxes, deficits and debt."

... Relative job security with generous benefits that extend into retirement has long been part of the appeal of working for the government. But an eight-hour day in a drab Independence Avenue office building can look like a supremely privileged lifestyle when Americans in the private sector are panicked and furious over what has happened to their own salaries, health coverage and 401 (k)s.

Add to that the growing view that the government has gotten too big and that deficits are going to swallow the economy, and you have all the makings of a backlash.
The Obama Administration already has proposed freezing federal salaries. Cuts could be coming to the House of Representatives, too, once the Republicans take power. At some point, some of those government workers are going to say, "Fuck it," and head to the private sector. You know, once the recovery kicks in and hiring resumes.

NYT:
Budgets in the House of Representatives will soon undergo some trimming, if Representative John A. Boehner, the incoming speaker, has his way. But according to a new report, congressional staffing levels have already fallen off over the last three decades and many House staffers could be paid significantly more for similar work in the private sector.

The study from the Sunlight Foundation, a nonpartisan outfit that aims to make government more transparent, also found that many employees in personal House offices have seen little change in their salaries over the last 20 years and that congressional offices have shifted more of their staff members away from Washington and into their home districts.

The analysis comes not long after Mr. Boehner said in an interview with CBS’s “60 Minutes” that he would look to cut an array of House budgets by 5 percent in order to help reduce federal spending. “You’ve got to start somewhere,” the Ohio Republican said. “And we’re going to start there.”

The Sunlight Foundation’s review did offer several caveats – for instance, in its comparison of salaries in the House and the private sector, the foundation said it was unable to consider committee salaries and that it only had approximate private sector parallels for some positions in Congress.

But it also asserted that, on average, a House member’s chief of staff could make almost 40 percent more in a comparable private position. In other top jobs – such as legislative director, communications director or senior legislative assistant – a staffer could add an additional 50 percent to 80 percent to their salaries in the private sector.
Some will be happy to let government workers go, just for the savings. The problem is that the private sector isn't going to want the schlubs and the clock-watchers. More than likely, the sought-after staffers will be the good ones. Yay.

Accounting Is a Sewer



...at least according to Berkshire Hathaway vice chairman Charlie Munger:
[A] majority of the horrors we faced would not have happened if the accounting profession were organized properly.

“In other words, [the accountants] have a position from which, if they behaved intelligently and correctly, they could prevent a huge amount of all that’s wrong with the system. And they fail utterly, time after time, after time.

“And they are way too liberal in providing the kind of accounting the financial promoters want. They have sold out and they do not even realise that they’ve sold out … Compared to what could reasonably be with intelligence and honour, the accounting profession is a sewer.”

I'd pretend to be offended but he's not saying anything I haven't already said and/or thought. Case in point, this nonsense with Andrew Cuomo taking on big bad Uncle Ernie over E&Y's epic Lehman failure. You think the auditors are actually there to find and expose fraud? Oh my dear, sweet, ignorant reader, if that's the case, how on Earth are the Big 87654 going to earn their fees? And if that's the case, why are the ones actually doing the audits the kids fresh out of counting school? It's all a very complicated and very expensive production intended solely to create the illusion of confidence in an entity's financial condition and not at all based in reality.

The cheerleaders don't need financial statements they can use, they need an accounting standard that allows for the most confusion, interpretation and general nonsense.

They've got it.

The Public Speaks on Regulation Z


I have no idea who this guy is but wish he'd get in touch with me, I'd like to hire him to write all my future comment letters.

First, the mission (which he chose to accept) from the Fed (and if you're really excited about giving them a piece of your mind, you've got a little less than 2 weeks to get your comments in), a buncha bullshit about credit cards:

The Federal Reserve Board on Tuesday proposed a rule amending Regulation Z (Truth in Lending) to clarify aspects of the Board's rules protecting consumers who use credit cards. The proposal is intended to enhance protections for consumers and to resolve areas of uncertainty so that card issuers fully understand their compliance obligations. In particular, the proposal would clarify that:

Promotional programs that waive interest charges for a specified period of time are subject to the same protections as promotional programs that apply a reduced rate for a specified period. For example, a card issuer that offers to waive interest charges for six months would be prohibited from revoking the waiver and charging interest during the six-month period unless the account becomes more than 60 days delinquent.

Application and similar fees that a consumer is required to pay before a credit card account is opened are covered by the same limitations as fees charged during the first year after the account is opened. Because the total amount of these fees cannot exceed 25 percent of the account's initial credit limit, a card issuer that, for example, charges a $75 fee to apply for a credit card with a $400 credit limit generally would not be permitted to charge more than $25 in additional fees during the first year after account opening.

When evaluating a consumer's ability to make the required payments before opening a new credit card account or increasing the credit limit on an existing account, card issuers must consider information regarding the consumer's independent income, rather than his or her household income.

The proposal would clarify portions of the Federal Reserve's final rules implementing the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit Card Act), which was enacted in May 2009. The last of these rules went into effect on August 22, 2010.

Philadelphia Fed's Consumer Compliance Outlook has a pretty good summary of the three-part CARD act changes
and what they mean for you, stupid, debt-ridden consumer.

And with that, I humbly present to you, dear reader, Patrick Wooldridge, US Citizen and his fantastic comment:

On behalf of the people of the United States of America, I must strenuously oppose the proposed changes to the Truth in Lending Act (FRB R-1393). 1) The Federal Reserve and its member banks are clearly and directly culpable for not only the current housing crisis, but even more importantly for the crisis of confidence in the US Dollar (and in fiat currencies in general). To contemplate eviscerating one of the few protections that consumers have against the power and megalopoly [fucking sick sic] of the banks is utterly unconscionable and literally makes me sick to my stomach. The banks and bankers continue to enjoy success and their ridiculous profits and salaries while millions of citizens lose their jobs and homes. Continuing along this path will destroy our republic. One wonders whether the Fed governors even care about the health of the nation, or whether they are just building up their personal and corporate fortunes and looking forward to carpetbagging after the looming economic catastrophe. 2) For the Fed to even contemplate this resolution at this time shows tremendous contempt for the Consumer Financial Protection Bureau, the Constitution of the United States, and the rule of law in general. The CFPB was established precisely to advocate for the common man against the power and self-interest of the banks and Big Money in general. This resolution seems very much like a hurried effort by the Fed to further indenture the middle class to the economic aristocracy and protect billionaires from working people by taking advantage of this small window in time before the CFPB is fully empowered. In summary, I ask - beg, really - that the governors, the FOMC and the member banks reexamine their consciences in light of a single question: "What course of action will most strongly support the principles that all men are created equal and that government of the people, by the people, for the people, shall not perish from the earth?

Megalopoly might not be a word but damnit it should be.

JDA salutes you, Mr Wooldridge! Keep on keepin' on!

Shock And Awe: Accountants Don't Rite Gud



(h/t Tax Prof)

An accountant must have put this chart together. Astute readers will notice "intended" is spelled wrong but let's ignore that and get to the results, which very clearly demonstrate what any of us who work, breathe and/or live accounting already know: accountants don't rite gud. You're looking at GRE scores by major, and I have to say that though the writing score isn't at all surprising, it's sort of pathetic to see accounting hanging out there at the bottom like that. Anyone else get the sense we're embarrassing ourselves?



The AICPA has presumably addressed this by removing written communication from the FAR, AUD and REG sections of the CPA exam, presenting candidates in 2011 with just three written communication essays in BEC. If you guys can't figure that out and pass, we truly are doomed.

The results (via Discover Magazine):

Major Verbal Quant Writing
Philosophy 589 636 5.1
English 559 552 4.9
History 543 556 4.8
Art History 538 554 4.7
Religion 538 583 4.8
Physics 534 738 4.5
Anthropology 532 571 4.7
Foreign Language 529 573 4.6
Political Science 522 589 4.8
Economics 504 706 4.5
Math 502 733 4.4
Earth Science 495 637 4.4
Engineering, Materials 494 729 4.3
Biology 491 632 4.4
Art & Performance 489 571 4.3
Chemistry 487 682 4.4
Sociology 487 545 4.6
Education, Secondary 486 577 4.5
Engineering, Chemical 485 727 4.3
Architecture 477 614 4.3
Banking & Finance 476 709 4.3
Communications 470 533 4.5
Psychology 470 543 4.5
Computer Science 469 704 4.2
Engineering, Mechanical 467 723 4.2
Education, Higher 465 548 4.6
Agriculture 461 596 4.2
Engineering, Electrical 461 728 4.1
Engineering, Civil 457 702 4.2
Public Administration 452 513 4.3
Education, Elementary 443 527 4.3
Engineering, Industrial 440 710 4.1
Business Administration 439 562 4.2
Social Work 428 468 4.1
Accounting 415 595 3.9




That's why being in accounting media (see: my sweet deal at Going Concern) is such a rewarding gig: there's no damn competition. No matter how awful my own derelict dialect, I know for a fact (based on my own test scores, naturally) that I'm head, shoulders and  ahead of my audience when it comes to stringing words into a sentence. If I were writing for English majors, I'd get slaughtered every time I left a participle dangling at the end of each sentence. Instead, my sloppy sentences are barely read and it's more likely that my attitude will get skinned before my modifiers do.

If accounting is the language of business, what does this say about our business?