Satire Bureau Editorial

Telling It Like It Isn’t

Satire Bureau, July 3, 2009 – Drs. Lacy Fair and G.D. Peay, Guest Commentators – Most of them are harmless, even clever and quaint; in fact, we use them everyday.

If you verbalize one, you will be said to have employed an euphemism; a difficult to pronounce word that describes the substituting of a milder term for one that comes across as being too harsh, blunt, or direct for polite discourse. Let’s review a few that have served useful purposes over the years:

Powder my nose – We suspect that, over the course of the last generation or two, the quantity of make-up particles actually applied to the proboscises of the declarants of this expression is relatively negligible. Nevertheless, we undoubtedly prefer this announcement to: “Pardon me please girls, but I need to pee like a racehorse.”

Sleeping with … – Far be it from us to quibble that this vafrous, vaniloquent vernacular is preferable to the poignant, provocative, pandemian, and popularized particularizations of profligate patterns of promiscuity prevalent presently – but its beguilement as to what is really taking place behind the euphemistic veil borders on the downright deceitful. After all, it used to allude to something as tame as a teenage slumber party. (Update: We now understand that there is a new euphemism sweeping the nation, thanks to South Carolina Governor Mark Sanford. Opportunely, it’s one that is complementary in this instance  … Hence, if a husband is suspected of “sleeping” with a paramour; that is, “having an affair,” it is hereafter considered more felicitous to explain that said infidel is “hiking the Appalachian Trail.”)

Plus size – Uh, we’re not going there.

Then, of course, there are job descriptions: sanitation worker (garbage man), leisure & hospitality worker (busboy), directory assistance (operator), financial consultant (stockbroker), and so on.

To repeat, when used during everyday communications, the petty substitutes advanced above contain a modicum of mischief, but overall they are comparatively benign. Nevertheless, we stress here that we reference the general populace’s utilization of such verbal sleights of hand. That’s an important distinction – because when a public figure gets his or her tongue around an expeditious euphemism, you had better duck … and make sure your wallet pocket is buttoned good and tight.

First, we’ll take a look at a couple turns of phrase where one would surely do well to bob and weave. Often such tautological twaddle finds fertile ground when attempting to justify a military action … oops, war, we mean … of some kind. After all, if activities like blowing things up and creating corpses can’t benefit from words that pussyfoot around, we don’t know what topics can.

Collateral damage – It’s not easy too explain away the million or so Iraqi civilians who have been either maimed or extinguished since “shock and awe” became a “crock and maul.” Thus, this lamentable locution has seen plenty of duty lately, although it owes its obfuscated origin to a previous civilian bloodbath; namely, Vietnam. There was even a 2002 movie titled with the weasel words; it starred the reigning California governor. As a side note, the same former Hollywood action hero is finding out all too distressingly what the term truly denotes, as a $24 billion budget shortfall is revealing that the “collateral” is darn near every living soul in the disintegrating Golden State.

Enhanced Interrogation – No doubt some form of ramped-up tactic has been employed by the U.S. over the years in order to let a prisoner know that we really … REALLY want to know what he knows. But during the Bush/Cheney years it was determined that certain “we have ways of making you talk” enhancements, like funneling H²O directly down a captive’s upright nostrils, might benefit from an handy dandy euphemism for what was otherwise considered to be outright torture. Indeed, the new and improved shibboleth almost sounds like something exceedingly clever and efficient is being engaged in order to convince the interrogee to see the light and join the good guys – as opposed to the actuality that 110 volt electrodes have just been crudely fastened to his scrotum.

There are others, of course: surge, Operation Iraqi Freedom, stay the course, and friendly fire being but a feckless, flimflaming, phonetic few. Fortunately, if one desires not to be entrapped by way of military mumbo-jumbo, there are ways that one can avoid direct war zone consequences. Necessarily, that brings us back to a matter that we warned you about earlier in this missive – the one where you were advised to carefully secure your billfold. When the subject turns to money, there are few places to hide from the apocalyptic apothegm we shall reveal in a moment.

In the meantime, we should remind readers that those in power have always sought to deflect criticism when things are not going swimmingly on the economic front. In order, for example, to avoid having to re-admit the dreaded “D” word, Franklin Roosevelt ordered up the term “recession” in 1937 when the nation’s fiscal woes worsened again after what proved to be a brief, fickle improvement.

And indeed hawkers of financial products often utilize tautological trickery, such as the portrayal of certain mortgages as being “subprime.” The description conjured up a comparison to the supermarket meat counter where the borrowers weren’t exactly prime sirloin but at least they were on the order of the next cut down. Sadly, their inherent credit-worthiness turned out to be a type of red meat all right, but more like Alpo than ground chuck.

The Federal Reserve, however, is probably the most licentious larcenist of the language. Former chairman Alan Greenspan was often so obtuse that listeners to his harangues usually dozed off before they could spot an euphemism or two – but the maestro did use them, often as an expedient to cover his failures. Perhaps the most famous example was when in 1996 he declared that the overheated dot.com related stock market was being powered by the “irrational exuberance” of investors. Thereby, he completed a rare “double diabolical” – the use of vacillating verbiage while at the same time blaming others. That hocus-pocus evidently was preferable in his mind than admitting that Fed easy money had created a stampeding, maniacal, bubblicious, feeding frenzy.

Be that as it may, it is his successor about whom we are more concerned. To be sure, Sir Alan fastened the hose to the economic air ball – but Ben Bernanke has been the gent doing the serious pumping of late. By best estimates, the U.S. money supply has expanded during the tutelage of the new Fed head from about $10 trillion in 2006 to nearly $15 trillion today. To put that in perspective, a mere one trill (that’s a million million, by the way) dollar bills would stretch from the earth to the sun. Thus, Mr. B’s feat is two round trips, plus an additional one-way passage back to el sol – in just over three years!

Consequently, such profligate, precarious, pecuniary pettifoggery brings us foursquare to the “big one”: the harbinger from Hades, the substitution from Scheol, the neutralization from the netherworld, the gimcrackery from Gehenna, the compromise from the crypt, the idiom from the inferno, and the prevarication from Pluto – it’s what the Chairman and his fellow central planners dub “quantitative easing.”

The reason we dispatch this execrable euphemism to such depths is because, whereas other mendacious malapropisms may affect some, even many victims, quantitative easing impacts virtually all of us here and now – and our kids, grandkids, and succeeding legatees for generations.

You see, as we have advanced ad nauseum, there is no national piggy bank. When so-called money is poofed into existence in vast quantities (or “quantitatively” in Fed-speak) all the new lucre is hoped by Mr. Bernanke and his ilk to “ease” down interest rates via pure supply and demand; i.e., the more moolah, the less interest that the bankers can extract from borrowers. The reality, however, is that today’s incarnation of robber barons is hoarding the loot – or dishing it to themselves as bonuses. That’s why, when it comes to a nation’s fiscal well-being, word games are so ominous. If the meddlers had to fess up to the truth that they are destroying the currency, they might wind up as damaged collateral in the hands of an angry populace.

Alas, for now, the bad guys are cleaning up. Wait …  isn’t that but another dodgy descriptive? Okay, no more beating around the bush – here it is, plain and simple.

They dish the euphemisms … and we get euthanized.

Baracknophobia

Fear Of Sound Economics

Washington (Satire Bureau) June 25, 2009 – Most of the banter between CBS Early Show interviewer Harry Smith and President Barack Obama this week was all watery meringue and no pie.

The Changer-In-Chief revealed, for one thing, that his golf game is lousy. Moreover, because the retailer-hyped-gift-guilt-trip known as Father’s Day had occurred on the Sunday prior to the morning news schmooze, he took the opportunity to palter a predictably pedantic, patriarchal patois as well.

For example, to one of Mr. Smith’s dippy, drippy lead-ins, Mr. Obama came back with, “…you know, whatever the hardships, whatever the obstacles, you can be a good dad.”

Well, there you have it – insight, inspiration …insipidness – all rolled into one.

Then, at another point, the CBS tube toady tossed an even more capricious creampuff to the ultimate trigger-puller of the world’s largest military superpower. The questionee is, by the way, the same decider who just a few months ago shipped another 17,000 of the offspring sired by … oh, what’s was that word again? … ah yes, FATHERS … to the killing fields in Afghanistan. “In this fatherless world,” gushed Mr. Smith, “where did you learn to love?”

Geesh. Enough of that. Let’s move on to the questions of truly national import, like the economy. That’s a subject where the new leader might really make some meaningful impact. After all, businesses are floundering, markets are seizing up, and pink slips are escalating. In a nation that once prided itself on entrepreneurship, prudent risk-taking, and healthy competition, it would be more than uplifting to hear something about a return to those principles.

Sure enough, the topic did eventually get away from putting greens and onto greenbacks; specifically, the President’s decision to give the Federal Reserve added oversight responsibilities over the country’s mega-financial behemoths. However, there are critics to such a plan, Mr. Smith gently pointed out, because the central bank has spent most of its existence in the deep rough rather than the short grass.

“It wasn’t the Fed,” Mr. Obama retorted.

What!!!?

“Yeah, it was one of those moments,” guffawed Satire Bureau Economics Editor, Dr. G.D. Peay, “where, if Harry had lifted a swig of coffee to his lips while hearing the answer, he might have gagged and spat it out like in an old-fashioned slapstick routine.”

But the host didn’t. Like most of today’s compliant media, he simply accepted the provably outrageous answer and moved on. Nor did Mr. Smith blink when the west winger proceeded to dig himself even deeper regarding the increased role for the nation’s monetary politburo. “The Fed has the expertise and the credibility, I think, to do it,” the Oval Office occupant nattered.

He …“thinks”!!?

“Goodness, where to begin,” responded an astonished Dr. Peay. “First let’s look at ‘it wasn’t the Fed.’ Not only are Alan Greenspan’s fingerprints covering the murder weapon, his DNA is all over the bloody corpse of the economy. After he and his Fed accomplices goosed and then popped the dot.com bubble of the nineties, they then created an even bigger fiasco when they tried to fix the problem by lowering interest rates almost down to zero. That recklessness subsequently touched off the housing insanity that yet threatens the entire planet!

“I mean, in retrospect, this isn’t even conjecture – it’s an indisputable fact.”

It is indeed hard to counter what the economist is averring. Simply put, it’s easier to argue that the obtuse former Fed chairman basically didn’t have a clue from the get-go as to which levers to pull and what dials to spin regarding the pecuniary affairs of USA, Inc. Recalling one ominous instance in February, 2000, he responded thusly to a monetary policy question from Congressman and free-marketer Ron Paul during a House Committee on Financial Services hearing: “Let me suggest to you that the monetary aggregates as we measure them are getting increasingly complex and difficult to integrate into a set of forecasts.”

Real message (after running the blather through the Bureau’s high-tech Baloney Inspecting Analog Licentious Gobbledegook Eliminator, aka  “BILGE”) : We’re flyin’ by the seat of our Macy’s Men’s Department trousers here!

“That evidence by itself ought to obliterate the notion that the central bank wasn’t to blame,” persisted Dr. Peay, “as well as the perception that, as the President surmises, the Fed has ‘credibility.’ But, just so we can dispel that nonsense once and for all, let’s take a look at the track record of his successor, Ben Bernanke, in the realm of reliability:

March 28th, 2007 – “At this juncture . . . the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.”

May 17th, 2007 – “While rising delinquencies and foreclosures will continue to weigh heavily on the housing market this year, it will not cripple the U.S.”

June 20th, 2007 – (the subprime fallout) “will not affect the economy overall.”

October 15th, 2007 – “It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions.”

June 9th, 2008 – Despite a recent spike in the nation’s unemployment rate, the danger that the economy has fallen into a “substantial downturn” appears to have waned.”

July 16th, 2008 – (Freddie and Fannie) “…will make it through the storm … in no danger of failing … adequately capitalized”

“Hmm, I guess he missed a few,” snickered the Bureau’s practitioner of the dismal science. “But, hey, just because he gaffed at virtually every crucial turn doesn’t mean the man doesn’t have – what is it?- credibility?”

Considering those shanks, therefore, it is possible that Pennsylvania Ave. rookie wishes he had stuck to the safety of a deliberate Daddy Day didactic or even his feckless, farcical, fairway foibles. That’s because, for a man who spent nary a single day of his life in any other venue except academia and politics, it is becoming painfully apparent that such vexing terrains as business and finance are proving to be plainly not his bag. And his simple-mindedness on such matters is especially worrisome considering that his nation is staring into an abyss that just could be, you know, the end of the economic world as we know it!

Is there still hope? After all, simply adding extra cornstarch is the cure for sloppy meringue, they say.

“I doubt it,” sighed Dr. Peay. “He just needs to let the free markets do their job.

“Putting it bluntly, the President, the Fed, and Congress need get out of the kitchen completely!”

Uncle Sam’s Used Cars

We You Tote The Note

Even after topping off their tanks with billions at the neighborhood monetary filling station, General Motors and Chrysler still seem to be missing on all cylinders. Car sales are running lean in spite of the free fuel from Congress insert your name.

As reported in the previous edition of Satire Bureau, the Supreme Court even became involved. Certain bondholders came begging to the black-robers (or is it robbers?) after it became clear that Chrysler’s new owners – Italian-based Fiat, the U.S. and Canadian governments, and the unions – were going to get what was left of the car carcass, leaving mere scraps for the aggrieved debtors.

Although the bondholders tried to dust off a rarely utilized parchment – that is to say, the Constitution – as the crux of their protection of property claim, the high court essentially told them to take a hike, or perhaps more appropriately, a hitchhike.

“Yeah, I guess you could say that this is repair job number two from the geniuses in government,” cringed free market economist, Lacy Fair, “the first being the billions handed to the big three already and now this new-ownership-marriage-from-hell.”

He has a point. Just like when one takes the family car into the dealership to fix that slight “clunking” noise … and emerges several thousand bucks later – and lighter – clunk now a clank, the “fix” just seems to make things worse. But surely beltway bilkers are through meddling. After all, how can the Chrysler shotgun wedding be topped?

Like this.

“A program that would provide up to $4,500 in government-funded discounts to consumers who trade in an old car could provide a much-needed boost to the auto industry,” churns out the Wall Street Journal. The dupery has been dubbed “Cash for Clunkers.” We admit that when we first spied the moniker, we thought it was just a clever metaphor for the moolah that Fiat and the others were forking out for the remains of America’s third largest car maker. But no, it was a brand new fraud!

As expected, those touting the clunker humbug include a number of grandstanding Congress persons, plus unions and car dealerships. Gee, that’s a surprise!

“Stimulating sales is the only way to get the auto industry back on its feet,” pimped Rep. Donald Manzullo, R-Ill.

“Our industry has been stuck in neutral and really has not started to move,” moaned Larry Kull, president of New Jersey dealership group.

He’s correct, of course, there’s no disputing his basic message – but his gear metaphor has the shifter in the wrong slot; fact is, the industry is in reverse not neutral. Even though General Motors and Chrysler have guzzled the aforementioned billions of dollars in government insert your name handouts, car sales are 34 percent lower than a year ago.

Naturally, the cockeyed solution is to try to save the ailing auto industry by snookering already strapped consumers into sinking further into a debt hell-hole. Simply put, the reason that car sales are falling off a cliff is because the last thing consumers need these days is another suffocating loan on a new Greyhound bus-like SUV. Hence, the wheel woes of Detroit simply mean that Joe and Jane American are finally removing the debt syringe from their veins, which though bad for the auto world, is actually very beneficial for them.

“I mean, come on,” huffed Mr. Fair, “Do we really need more cars? Just a couple of years ago, according to the Department of Transportation, there were 250,851,833 vehicles registered in the U.S. Considering that the population then was about 300 million and that 75 million of those folks were children and 10 million were over 80,  that means that there were 1.17 jalopies in 2007 for every homo sapiens from Juneau to Key West!”

Nevertheless, a common sense assessment of actualities like those described heretofore is rarely, if ever, within the purview of the American Congress and whatever administration is seated at any given time. “Cash for Clunkers,” accordingly, went zero to sixty through the House like a Corvette ZR1.

But perhaps we are being too harsh. Let’s at least look at the particulars of the program to see if they bear a modicum of merit. A “clunker” is any vehicle that was built after 1984 in drivable condition that quaffs petrol at 18 mpg or less (editors note: Is any car built by Detroit in the 80’s or early 90’s actually still technically, you know, drivable?). If you have one of these gasaholics, you are eligible for a $3,500 “subsidy” on a new model that merely sips fuel at 22 mpg or better. But wait, there’s more! You can secure another thousand bucks “subsidy” if the up-to-date product rates a 10 mpg improvement over your highway hog! There are also a number of fine print restrictions, (you can’t buy the that ZR1, for instance) and there are different rules for various varieties of trucks. Hmm, not so simple after one gets into the nitty-gritty.

On top of that, there is practical application of the matter. Thanks to numbers supplied by Mr. Fair, we took a look at whether or not the contrivance makes any negligible sense in the first place. Say, for example, you are drooling for a $40,000 sleek new futura. Your present 1989 rust bucket isn’t worth more than $2,000 as a trade-in – but it is somehow eligible. Therefore, you may be able to finance $34,500, after the “subsidy,” instead of thirty-eight grand. The monthly note difference between the two is about $70 per month; $710  vs. $780.

“Oh, yeah, that’ll really get car sales rolling again,” scoffed the free marketer.

Still, some drivers will probably bite … and show up at a nearby dealership intent on snatching some of their neighbors’ money. Neighbors’ money? Surely that’s a misprint; this is a subsidy from the “government,” isn’t it?

Ha.

As this digital rag has emphasized time and again – there is no national piggy bank. The current U.S. debt is racing towards $12 trillion. Thus, the $4 billion targeted for the clunker program will incrementally add to that amount, just like the poofed-into-existence cabbage squandered on TARP, TALF, Fannie Mae, AIG, previous Detroit bailouts, and too may others to list here. And who is the co-signer for all that “government” largess? Do you have a mirror handy?

So, think of it  like this:

Knock, knock (your door).

Knocker – “Hi, neighbor. I need at least a hundred bucks from you. I want to trade my ’84 Plymouth Voyager on a new Ford Mustang but I need about $4,500 more in order to swing the deal. And step on it, please, I’m trying to hit the rest of our neighbors before dark.”

You – Slam!

“That’s it, alright,” confirmed free marketer Fair, “Except under the clunker bill, you can’t get rid of the moocher – he either gets the dough at your front door … or on the showroom floor.”

Motown Mow Down

Hasta La Vista Chrysler Bondholders

Washington and Detroit (Satire Bureau) June 10, 2009 – Relax America – your judicial and legislative branches in Washington are on the case of what ails those of us dwelling anywhere in the vicinity of purple mountains majesty and/or above the fruited plains.

And in that spirit, it might be uplifting for readers to click on the link below in order to catch the essence of the efficacy of their endeavors:

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There, that’s better. Now, let’s see what they are actually up to.

First this: “The U.S. Supreme Court on Tuesday cleared the way for the sale of Chrysler to a consortium led by Italian automaker Fiat,” reports CNNMoney.

Then there’s this: “House approves ‘cash for clunkers’ plan – Consumers could receive $4,500 in rebates for turning in gas-guzzlers,” relates MSNBC.

Hmmm. After contemplating those items, perhaps the following music might better suit the occasion:

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Yes, that little interlude is far more appropriate – especially since the insanity is reaching unprecedented new levels. Is there something in the drinking water that is causing such stupidity? Ptomaine from the Potomac, perhaps?

First, we’ll examine the matter involving the high court. But, before we do, a quick bit of background. Most Americans are much more familiar with the other two supposedly separated powers of the nation’s federal governing apparatus; that is, the executive and legislative branches. The former is well-known because the President has obtained something approaching rock star status over the years. Indeed, the current oval office occupant fits that description to a “tee,” possessing  the charisma of a rocker and, alas, no more than the qualifications of one as well. The latter, on the other hand, is abundantly intimate to all citizens, given that Congress infests itself in their everyday affairs like a swarm of termites to an untreated two-by-four.

But the Supreme Court is more distant. Most folks can’t name all nine justices and many are hard pressed to name even one, not only those seated on the current bench, mind you – but ever since the black-robed jurists were first convened back in 1790 (editors note: Diana Ross is the most frequent wild guess).

Anyhow, the job of the Supremes is fairly simple: make sure that a sovereign citizen’s God-given rights to life, liberty, and the pursuit of happiness (synonymous with property) are protected against intrusions by either another citizen or a group of them acting collectively; i.e., like through a representative body such as Congress. Helpfully, there is a user manual that can be referenced in order to accomplish said task: it’s called the Constitution.

Normally, the Supreme Court doesn’t bother itself with disputes that can be decided at a lower court level either by a judge or a jury. For example, a loser’s appeal in a case such as, “Joe owes John 10,000 bucks … Joe answers, ‘No, I don’t … jury hears evidence, decides Joe owes the dough” has about as much chance of being heard by the Supremes as Susan Boyle has of being added to the Motown group of the same name. However, questions of more sweeping import often get the high court’s attention, like Miranda v. Arizona  (1966) which resulted in a landmark decision that protected an individual’s rights by insisting that a confession cannot be coerced from him.

Nevertheless, on Monday, the Court stuck its snout into the aforementioned Chrysler/Fiat transaction, a deal that would seem, on its face, to be merely a “”Joe and John”  dispute between two private parties, not a controversy that would normally invoke Constitutional review. The plea was brought by the Indiana state pension funds, which contended that they and other lenders were getting rooked by the bankruptcy court. It is an unconstitutional taking of property, the pensioners fussed. That’s because the car company’s new owners, the United Autoworkers Union, Fiat and the “governments” of the U.S. and Canada, get the lion’s share of what remains on the bones of the Chrysler cadaver, leaving only around 29 cents on the buck for the state retirees in Kokomo, Ft. Wayne, and Terre Haute, et al.

In the end, after a temporary stay via Justice Ginsberg was lifted, the initial convoluted sale transaction was allowed to proceed. Henceforth, the outfit that gave us the Plymouth Volare and the Chrysler Imperial LeBaron, shall be motored from a nation better known for designing high-end handbags and really fine pasta – with an assist from the Washington/Ottawa Keystone cops and a cadre of workers who make $71 per hour versus $49 for the makers of Corollas and Civics . Hooray.

But back to the crux of the Hoosier beef; that is, the “unlawful taking of property” assertion – something about the term has an odd ring to it. After all, since when has a little larceny stopped an apparatchik looter with the force of the government behind him?

“Exactly,” replied Satire Bureau legal editor, Olivia W. Holmes, “The attorneys for the pension plans were trying to invoke the protections under the Constitution. The nerve! I think it finally dawned on Justice Ginsberg that whether the high court should or should not have reviewed the issue was of secondary importance. What really was at stake here was something much more germane. It was if she suddenly experienced an Orwellian epiphany …‘Whoa, we can’t let something as elemental as that silly ol’ Supreme Law of the Land stand in the way of the leviathan state’s prerogative to rip off the peoples’ property!”

And so it was. The new owners got the hemi’s, leather seats, GPS systems, and whatever else was considered to be worthwhile – and the bondholders simply got the camshaft, minus the cam.

Indeed, that might have been the end of the news regarding the wacky world of wheels for the week … had not the aforementioned factious, farraginous, and fatuous falderal known as “Cash for Clunkers” spewed forth from the House of Representatives like fetid black exhaust from the tailpipe of a ’81 Dodge Aries K.

Surely there must be a relationship between such gratuitous, grandstanding gimcrackery and the Chrysler garage sale. We’ll try to connect those dots in the next edition….

Funnee Monee

A Night At The Beijing Improv

Beijing (Satire Bureau) June 3, 2009 – These are tough times; we could all use a few laughs.

Perhaps some of the great comedians from he past can help.

“The food on the plane was fit for a king. ‘Here, King,!’” joked Henny Youngman.

“I don’t want to tell you how much insurance I carry with the Prudential,” professed Jack Benny, “but all I can say is: when I go, they go too.”

Feeling better already? No? Okay, here are a few more.

“I’m so ugly… my father carried around a picture of the kid who came with his wallet,” rued Rodney Dangerfield.”

“You know you are getting old,” mused Bob Hope, “when the candles cost more than the cake.”

What’s the matter? Those are some of the funniest of the funniest – and yet we don’t even see the corners of your mouth turning up. Well, all right. We thought by now you’d be rolling in the aisles – but since you are still stone-faced, we saved the best for last.

“Chinese assets are very safe,” Treasury Secretary Tim Geithner said in response to a question after a speech  a few days ago at Peking University

Ha, ha, ha, ha, ha, ha, ha, ha,, hee, hee, hee, hee, guffaw, guffaw, guffaw … you’re killing me … stop it … I can’t catch my breath … I’m gonna’ wet my pants!

If you think you were the only one with a funny bone on steroids when that one-liner sunk in, think again. The Peking sophomores, juniors, and seniors, reports Reuters, roared with laughter too … woo hip har de har har.

The U.S. Treasury Secretary has been traveling this week to the Middle Kingdom to persuade America’s leading lender that it should keep forking out … or maybe chopsticking out for Uncle Sam’s T-bills and other debt instruments.

“What a riot!” roared free market economist, Lacy Fair. “Heretofore, Mr. G. tended to come across as a stick in the mud. We had no idea he was such a hoot”

Wait there’s more. “We believe in a strong dollar,” the gagman continued.

Get outa’ here! And to think Jay Leno turned the Tonight Show over to a mere Conan! NBC execs must be kicking themselves.

“I mean, this guy’s material is fabulous,” Mr. Fair mocked. “His former employer, the Fed, just recently announced that it will print $1.2 TRILLION to buy up U.S. Treasuries and mortgage-backed debris. The Chinese hold over a ‘tril themselves already. You want to know what that scenario means to them? They get Shanghaied that’s what. Imagine you were holding a 1952 Topps Mickey Mantle baseball card, a collectible so rare that one sold not too long ago for $283,000. Now, say someone is cleaning out his recently deceased granddaddy’s attic and finds 100,000 ‘52 Mick’s stuck in a foot locker. Suddenly yours ain’t worth the gum it came with.

“So, as I said … coming up with a line like, ‘We believe in a strong dollar’ … well, the man’s writers are too, too much!”

Then this. As we noted earlier, what the head G-man is really asking of Yao Ming’s home nation is even more hilarious. As our federal credit card bill races towards $12 trillion, the Treasury straw boss is imploring the far-eastern saps to buy even more U.S. paper; that is, debt instruments that can never, as in Never, be repaid. Oh, sure, the Federal Reserve can continue to poof more lucre into existence – but that fool’s errand is what worries last year’s Olympic host the most nowadays.

The only viable alternative to wonton money printing is for the our largest creditor to be repaid with something tangible. In that regard, one of Mr. Geithner’s goals was to convince the Chinese leadership that, sooner or later, all the fiscal insanity will cease and the U.S. shall return to its former supposedly productive ways. Thereafter, the funny money will be supplanted with more or less real stuff earned through the labor and sweat of the American people.

Alas, when it became understood that the Treasury Secretary was serious – that is, that such flapdoodle was actually, you know, the plan – things began to get somber and the chuckles seemed to cease. It didn’t help either that Yu Yongding, a former adviser to China’s central bank, sounded more like a man who had just been punched, rather than punch-lined. “It will be helpful if Geithner can show us some arithmetic,” he implored.

“Oooo … that darn problem with the math,” Mr. Fair grimaced. “Poor Tim likely hoped he might have slipped out of town without having to address the impossible.”

The conundrum to which the free marketer refers, of course, is that the total tab facing the aforementioned U.S. workers and perspirers is even more than the above mentioned $12 trillion national debt – waaay more. Indeed, it’s the obligations that the government tries to obscure that makes Mr. Yu blue. The liabilities of his nation’s most profligate obligor are more like $75 trillion (some say it’s $100 trillion) when one accounts for “off balance sheet” commitments, mainly Social Security and Medicare.

So, back to that pesky arithmetic. Go ahead, divide $75 trillion by a U.S. population of around 300 million;  the result is a cool $250,000 in the red for every man, woman, and rug-rat from Honolulu to Bangor.

“That’s why I used the term ‘impossible’,” reminded Mr. Fair. “It can’t be repaid; it won’t be repaid. You know it – and Yu knows it.”

That’s pretty grim, alright. Still, a little levity may yet save the day for Mr. Obama’s traveling money man.

After all, “Take my wife … Please!” always slayed ‘em for Mr. Youngman.

Come on, Tim – improvise!

“Yeah, I know,” sighed a Treasury spokesperson, “We tried.  But, ‘Take our bonds … PLEASE!’ went over like a lead dragon kite.”

Confabulating Consumer Confidence

Shopping To Gomorrah

New York (Satire Bureau) May 28, 2009 – Here we go again.

“Consumer confidence extended its rebound in May, soaring to the highest level since last September as more shoppers are feeling the worst of the recession is behind them,” babbles the Associated Press, citing the Conference Board.

How many times do we have to explain this? Let’s start with a bit of recent history. Back in early 2007, consumer confidence was at a two year high. “U.S. consumer sentiment rose in January to its highest in two years,” reported Reuters, “on favorable expectations for the U.S. economy and for higher wage gains.”

We all know what has happened since then to “favorable expectations” and “higher wage gains.” Not to say we told you so – but, frankly, we told you so…

From Satire Bureau, February 7, 2007 (a story comparing “good news” – that debt-sated consumers were revving up to further indenture themselves via plastic – to a similar pattern of excessive behavior): “In a related story, the Commerce Department today announced that alcoholics are getting drunker than ever.

The Bush administration responded to the news by holding a press conference wherein Press Secretary Tony Snow proclaimed, “The skeptics would have you believe that Americans aren’t happy enough. This number proves that they are not only happy, they are putting the bottle where their mouth is!”

In an economy where GDP is over 70% consumption driven, the statistics prove that despite rising foreclosures, higher oil prices, and high unemployment, Americans are pleased to exchange what little jack they have left for another Jack; namely, Daniels.

In Crawford Texas, a vacationing President Bush was also pleased with the report. In a press release, the President said, “This is just another sign that our economic agenda is working. I was confident that our tax cuts would flow first to the bars and liquor stores of America and then out to the streets and gutters of this great land.”

So, maybe consumer confidence isn’t such a harbinger of good things to come after all. It sure wasn’t in 2007 – and it’s not now, according to one analyst.

“Whenever you read stuff like that from a so-called mainstream news source,” huffed economist, Dr. G.D. Peay, “you should step back for a moment and ask yourself, ‘Does this square with what the fundamentals are telling us?’”

Hmm, let’s see if he has a point. On the one hand, we have the Conference Board, a conglomeration of supposedly impartial business interests. A visit to its website tell us very little about its agenda or membership, but for some reason, it hires a research company to contact 5,000 households each month. From those annoying supper-time calls, it was able to determine that consumers have fallen off the wagon, spending-wise.

And in today’s black-is-white world… that’s a good thing!

Let’s see what the survey’s results might look like versus those pesky fundamentals to which Dr. Peay refers.

Ring…ring.

Connie Consumer – Hello?

Conference Board – Hi. Conference Board here. How are you feeling about the economy?

Connie – The what? Honey, turn the dang volume down on “Wheel of Fortune!” (Back to the caller) Ok, I guess. I think I saw where some government guy said he sees “green shoots” or something like that.

Conference Board – I’ll put that down as “Fabulous!”

(Fundamentals – National Debt Hits Record $11 Trillion – shoots appear to be dandelions.)

Conference Board – Are you planning any retail purchases anytime soon?

Connie – Yeah, prob’ly. Food and toilet paper – I think there’s still a hundred or so left on the Capital One card.

Conference Board – Super. That’ll go down as a “10″ under “Consumers Shopping Again.”

(Fundamentals – Total household debt is $13 trillion! That’s around $120,000 for each household. Most of it is mortgage debt at a time when 20% owe more than their abodes than they are worth. Moreover, the Standard & Poor’s/Case-Shiller National Home Price Index reported home prices tumbled by 19.1 percent in the first quarter compared to the first quarter last year, the largest drop in its 21-year history.)

Conference Board – How about a major purchase, like a car or bigger house?

Connie – (Huffs.. then facetiously) Sure. Like we’re gonna go out and buy a $40,000 SUV … like any bank would be nuts enough to finance us anyway, seeing how our FICO score is more like a FICO scare.

Conference Board – Just a moment; let me get all that down … “Imminent plan to purchase a vehicle.”

(Fundamentals – GM and Chrysler are being fitted for toe tags as we write.)

Conference Board – Well, that’s it. Thanks for participating – and especially thanks for doing your part to get America going again!

(Fundamentals – Household savings, the bedrock of capital formation necessary to get any economy “going again,” has actually ticked up from a minus number in 2005 to a meager, but encouraging, 3-4% recently. Thus, there are only two outcomes that can occur as a result of renewed consumer confidence: 1) even more debt; or 2) sayonara to thrift and savings.)

Well, there you have it. When a hopelessly credit-englutted consumer becomes “confident,” it simply means that he or she has elected to get rid of the debt anvil attached to his or her ankle – by exchanging it for an even heavier one! That the Conference Board and the major media would report such a pickle as a sign that the recession is “behind us” is disingenuous at best, or downright dim-witted otherwise.

“By the way, it’s interesting,” mused Dr. Peay, “that ‘conference’ and ‘confidence’ both start with a syllable that they share with other expressions we have come to know and loathe.”

Such as?

“How about con-artist and con-game?” the economist reminded.

Ponzi Bonzai

Low Interest Rates Push Savers To Scammers

Los Angeles and New York (Satire Bureau) May 19, 2009 – It was as if a midnight-snack-craving suburbanite had flicked on the kitchen lights and revealed the cockroaches partaking in perfidious, panivorous, pantophagous, parasitical, and plenteous pandemonium.

Only, in the context of this report, we should substitute Ponzimonium as the subject of such a plethora of prescriptive “p’s.”

Ever since Bernard Madoff confessed to a Ponzi scheme involving a $50 billion sum that exceeds the Gross Domestic Product of Iceland, Bolivia, and Albania combined, other fraudsters have been skittering into news accounts faster than one can whistle La Cucaracha.

The runner-up to Mr. Madoff is Stanford Financial, the fiefdom of “Sir” Alan Stanford and friends. The firm operated brokerage offices throughout the U.S. but apparently did it’s dirty work from the small island nation of Antigua which, by the way, is the “royalty” through which Mr. Stanford was “knighted.” Compared to the Madoff rip-off, Stanford’s bilking was small change at a “mere” $9 billion, but that number still surpasses to the GDP of Chad, Malta, or Nicaragua.

Then, the following scuttled out from behind the bread box and from under the fridge:

Norwak, CA – Milton Retana, who allegedly defrauded thousands of people out of millions of dollars, operated a $62 million Ponzi scheme fraud involving real estate.

Beverly Hills, CA – Bradley Ruderman, a hedge fund manager was arrested this month and charged with defrauding investors of $44 million.

Crozet, VA – 52-year-old John Mark Donnelly pleaded guilty to wire fraud, securities fraud, and fraud in connection with futures contracts stemming from a Ponzi scheme that bilked more than $5 million from investors.

Sarasota, FL – Arthur G. Nadel, 76, of, faces 15 counts of securities fraud, wire fraud and mail fraud in connection with his alleged Ponzi scheme through which prosecutors allege that he conned perhaps more than 350 investors out $360 million.

“There will be more,” predicted Satire Bureau legal consultant, Olivia W. Holmes, “and it’s not so much that people are gullible – it’s that they are desperate.”

She has a point. All of the recent scams reveal the attempt by the chiselers to solve a problem affecting the most overlooked victims of the current financial crisis; namely savers.

Mr. Madoff, for example, touted consistent returns of around 10%, or a little more. Sir Alan attracted a loyal clientele by hyping CD’s that paid out far more than the return offered by similar U.S. bank instruments.

“That’s right,” confirmed Ms. Holmes. “It wasn’t like they were promising to rig things so that you won the lottery or some other pot of gold type bonanza. These were just marginally better returns than you could get at the local bank or from a conservatively run mutual fund.”

And yet the customers flocked to the shysters like cucarachas to a leftover taco. Doesn’t that action beg the question: Why weren’t investors satisfied with the modest returns to be had at one of the 8,000 or so local banks blanketing the American landscape? Perhaps if we can solve that mystery, we can find out why ordinary folks were so wantonly willing to stretch for a few extra percentage points of yield.

“Well, I believe that we can unravel it,” opined free market economist, Lacy Fair. “America has become a debt nation wherein the average family has around $25,000 in credit card and other revolving bills in addition to mortgage payments. Thus, the country runs on borrowing, not savings. Yet, many folks, especially retirees, have amassed what they figured would be enough of a nest egg to ensure a lifestyle close to that which they had become accustomed.”

They were wrong.

In a world where so many people are slaves to the effort required to eke out the “minimum payment,” the nation’s money politburo, also known as the Federal Reserve, has taken the position that Americans must continue descending into the aforementioned debt hell – or else. Hence, instead of rewarding savers for their thrift and the accumulation of capital that is vital to any society’s fiscal health, the Fed commissars set interest rates so as to encourage perpetually painful payment pauperism.

“Today’s financial planning guru’s,” Mr. Fair explained, “regularly advise that the average guy should strive to save at least a million dollars through regular savings, 401-k’s, IRA’s, or whatever so that he can live comfortably in retirement and be able to leave something to his heirs.

“But think about it, a mil today will earn about 16 thousand bucks for 12 months before tax at Bank of America, one of the Fed-favored bailout black holes. I mean, come on, busboys make almost that much! The bank’s advertisements even have the gall to refer to the CD as being ‘High Yield.’  That’s a good one – high yield compared to what .. zero!!?”

Is it so surprising, then, that those dependent on savings were lured to the Madoff’s and Stanford’s of this world? The math is easy: $1 million times 5% in the good ol’ days of traditional passbook savings accounts delivered $50,000 a year, not a Palm Beach lifestyle – but a comfortable one. On the other hand, with the regular banks shelling out mere pittance rates, the alternatives might came down to either Sir Alan or, gasp, Mr. Sam – as in signing on as a greeter at one of the latter’s Chinese goods distribution superstores.

So, as we move closer, we pick up the scent of at least an accomplice – and maybe even the primary motivator behind front men such as the dirty rotten scoundrels listed above. Like James Bond being initially fooled into thinking “it’s the Russians,” only to realize later that it was SPECTRE, or Sherlock Holmes, at the outset, chasing a trail that leads away the diabolical Professor Moriarty, the retail dispensers of the Ponzi may simply be the symptom, not the disease.

“Yeah, if Bernie and Sir Alan go down in the history books as two of the Charles Ponzi’s most devilish disciples,” growled Mr. Fair, “then Greenspan and Bernanke ought to be named on the same page. I even have name for the chapter describing their dastardly deeds: call it the Axis of Weevils!”

No Banks Tank Thanks To Bernank(e)

Stress Tests A Crip Shot

Washington (Satire Bureau) May 12, 2009 – Whew, that was a close one.

U.S. banks appeared to be headed off a cliff like Wylie Coyote in hot pursuit of a darting, dodging road runner. But at the last moment, instead of sprinting a step too far, it was as if the feckless desert predator made a hard right and not only avoided a steep descent terminating in a puff of dust, he managed to seize his bleeping, beeping, beaked bane once and for all.

Indeed, largely because of elevating financial stocks, the Standard & Poor’s 500 index has posted an impressive 35% percent gain since early March. That performance has made believers out of many market pundits who claim that the recession, depression …whatever, has surely ended.

From the Associated Press comes this: “We trust the rally,” said Chris Hyzy, chief investment officer at US Trust, a division of Bank of America. Oddly, his parent firm recently made news by betraying the “trust” of its owners. It seems that B of A’s former CEO wanted to back out of last year’s purchase of an increasingly noxious Merrill Lynch, but finally capitulated to threats from Washington and did the deal anyway, shareholders be damned.

Nevertheless, most of the newfound exuberance seems to have to do with the Supervisory Capital Assessment Program, (”SCAP,” which was originally labeled, so we hear, the Capital Resource Assessment Program, but changed because it was an obvious anagramatical disaster), popularly known as the “stress tests,” the results of which are now in. And aside from a few theoretically under-capitalized corpses, including the aforementioned B of A at $34 billion, many of the 19 examinees are pretty much hunky-dory, according to the Federal Reserve. For example, those with plenty of Capitol, not to be confused with capital, clout like Goldman Sachs, JP Morgan Chase, and American Express need not raise a nickel of new moolah. Gee, what a surprise!

Maybe, therefore, like the man said, the crisis is over – right? Well, maybe not.

“Humbug, all humbug,” opined free market economist Lacy Fair. “The so-called good news has provided an excuse for market cheerleaders to proclaim that eight or more years of mal-investment and debt drunkenness have been cured in less than sixty days!”

So, who does one believe? We have the major media, the stock market, and …er… the government on one side telling us the banking water is just fine, dive in! Then, there is the minority, like Dr. Fair, who assert that the whole stress test business is mere hocus-pocus.

In order to answer that question, perhaps we ought to objectively examine the criteria used to perform the tests. After all, the whole point of SCAP was to play “what if”; that is, what if unemployment worsens or what if GDP sinks, to name but two, and then assess the impact of such events on the already comatose 19.

Regarding the former, the worst-case unemployment scenario used was 8.9% in 2009 and 10.3% in 2010. However, the total number of Americans who are not working full-time RIGHT NOW is actually about 22 million, or 15.8 percent, according to the Bureau of Labor Statistics. So, where did the SCAPers get the low-ball numbers? Probably from the same BLS bean counters who, by the way, keep two sets of books. The rosier stat excludes those poor souls who are so discouraged that they have given up looking for a job and are thus not being counted any longer by state unemployment agencies.

“Yeah, using the bogus number is par for the course for the Fed and the rest of the Washington apparatchiks,” smirked Dr. Fair, “because the real number shines the spotlight on how inept they are.”

How about GDP? There, the worst case set-up assumed a decline of only 3.3% in 2009 and 0.5% in 2010. But, according to http://www.shadowstats.com, an objective website that tracks economic data using the measurement tools of the recent past (before they were monkeyed-with by succeeding administrations in order to suit special agendas), GDP is ALREADY in the neighborhood of negative 6%!

Thus, if the real numbers had been used, it is safe to say that all the screened nineteen would need more survival capital than is even remotely available from any source other than a deadbeat uncle named Sam.

“That’s right,” confirmed the free marketer, “A doctor would not even be able to give them a ’six months to live’ outlook because they are already six feet under!”

But since we have inserted a medical analogy here, maybe the utter absurdity of the SCAP methodology can best be conveyed by the following:

Waiting room at the doctor’s office -

Nurse: The doctor will see you now Mr. Sapp.

Mr. Sapp: Hi, Doc. I’m here to get my annual physical.

Dr. Scope: Great. Let’s start with the eye chart. Read the top line.

Mr. Sapp: Uh, there’s just one letter; an “E.”

Dr. Scope: Super, your eyes are fine. Now let’s look at your ears.

Mr. Sapp: Eyes okay? Just by reading a thick 4″ high letter from 5 feet away?

Dr. Scope: Yup. Ears lookin’ good, too.

Mr. Sapp: What say? Would you speak up, please.

Dr. Scope: EARS FINE! NOW, TURN YOUR HEAD AND COUGH!

Mr. Sapp: Hack.

Dr. Scope: Terrific.

Mr. Sapp: But, Doc … you always, you know, use your finger to check my groin area when you ask me to cough. Why not this time?

Dr. Scope: Uh, groin area…I’d really rather not.  Okay, now your heart. Get up on the treadmill.

Mr. Sapp: What treadmill?

Dr. Scope: Oh, yeah. I guess I thought we were in the next room. Oh, well, let’s skip that – your ticker’s probably all right. We’re all done.

Mr. Sapp: Doc, you mean you can tell that I’m healthy just by those meaningless tests?

Dr. Scope: Not really, but if I had done a thorough physical, I might have found something wrong and I wouldn’t want to alarm your family or you. That’s why I performed the simple exam; it’s known as the Superficial Condition Assessment Profile – you can just call it SCAP. NEXT!

One Flu Over The Cuckoo’s Nest

Nation Calls In Sick

Washington (Satire Bureau) May 1, 2009 – “Never waste a good crisis,” was the political advice doled out by Secretary of State Hillary Clinton while addressing a Brussels audience in March.

And boy do we have a doozie now.

To be sure, a menacing malady perplexes the psyche of citizens the world over: “Confirmed cases of swine flu worldwide increased to 236 on Thursday,” warned CNN, “up significantly from the previous day’s total of 147. In the U.S., the number is now 109.”

No doubt about it, hacking, coughing, blowing, and retching are always reasonable causes for concern. Still, the numbers are miniscule relative to the overall population. After all, out of a U.S. population of roughly 300 million, it would take 30,000 cases to equal a measly 1/10 of 1% of said citizenry.

“I’m not saying it won’t turn out to be a big deal, especially if you or I get it,” opined Satire Bureau Medical Correspondent, Anne Jina. “But except for taking the same precautions one normally exercises against colds, there’s not much one can do.”

Oh, really?

That’s not what we read from Fox News. According to that outlet, your government is already in high gear. “Roughly 12 million doses of Tamiflu will be moved from a federal stockpile to places where states can quickly get their share if they decide they need it.” Indeed, Fox cites the source for this information as none other than the government poster child for ineptness and bungling; namely, Homeland Security.

“I’ll admit, anything being handled by that particular agency is not too encouraging,” sighed Ms. Jina, “The last time Homeland did some serious mobilizing, it was for trailers and ice for Katrina victims. Most of the ice simply melted on loading docks and the agency likely wishes the wheeled abodes had vaporized also, seeing how thousands of them never got used and today sit idly in ghost trailer parks.”

Even worse, the porcine vaccine may yet to develop into a new low for the nanny state black hole agency – and an all-time high in terms of sales for the drug’s distributor, Roche (not to mention Gilead Corp., a firm once headed by former Defense Secretary, Donald Rumsfeld – it receives a 25% royalty for every arm stabbed.)

Why, one might ask, might it be a new maladroit milestone for Homeland? Well, how about this anecdotal of item of interest not mentioned by the mainstream media – there is no solid evidence that the juice even works! “The flu shot is only as good as the educated guesses of a group of vaccine researchers across the globe,” explains the medical website, living.health.com, “Every February, they try to predict which flu viruses will work their evil during the next fall and winter. Their three top choices are put into the vaccine.”

Darts, anyone? So, what about the benefit to Roche and Gilead?

“National governments are placing multi-billion orders for stockpiles of Roche’s Tamiflu” but there is no guarantee as yet that Tamiflu will prove effective against a pandemic strain,” said a report by Informa health care, a leading U.K.-based pharmaceutical research, publishing and consulting group.

Hmm, sounds like ordering up more double-wides to us – but we doubt if the drug makers are fussing. But the two firms’ windfall does at least provide inspiration for another Satire Bureau moldy-oldie (Ed. note: the Bureau, on a limited budget, had some difficulty procuring a competent vocalist – as you will be made abundantly aware by clicking the link below. Bear with us, it’s not the melody that counts; it’s the parody).

Tamiflu

(Sung to the tune of “Tammy” from the 1957 movie, Tammy and the Bachelor)

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

We see the bottom line startin’ to grow

Tamiflu! Tamiflu! We love you so!

The ole hootie owl hootie-hoo’s to the swine

Tamiflu! Tamiflu! Pigs did just fine!

Does Don Rumsfeld feel, what we feel

When his check comes near

Our hearts beat so joyfully

You’d think that he could hear

Wish I knew if he knew what I’m dreaming ’bout

Tamiflu! Tamiflu! Big sales no doubt!

Government stockpiling, when there’s a fuss

Tamiflu! Tamiflu! Make sure they need us!

The huge cash from DC is startin’ to grow

Tamiflu! Tamiflu! We love you so!

When the fear is high, in a while,

They’ll long for a vial

Begging now, on their knees,

Inoculate me please!

Glad they don’t know what we know … that is for sure

Tamiflu, Tamiflu, it ain’t no cure

If that little ditty doesn’t bring a tear to Secretary Clinton’s eye as she contemplates a good crisis snatched, we don’t know what will. But it’s unlikely that she knows that a perceptive early 20^th century journalist must have seen her coming when he sagely wrote: “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary,” scribed H.L. Mencken.

MounteBank, N.A.

“The Friendly Bank”

Member – FDIC

April 22, 2009

Dear Shareholders:

Since it was in all the papers, you most likely know by now that your company announced a quarterly loss of over $80 million.

It’s our fifth straight quarter of reporting red ink. Coincidentally, I must admit that said losing string is correlated with the pain-dulling distilled decanter, sharing the same numerical reference, that we in top management keep handy in our bottom desk drawers these days.

As is so often the case since your company began its descent from $50 per share to the present price of just over ten bucks, the e-mails and phone calls to my office have been incessant. Fortunately, my secretary intercepts the incoming land line missiles for me, so if you have phoned and been told, “I’m sorry, he’s not at his desk,” it may be because I am under it, having ventured to the aforementioned bottom drawer a few too many times.

Be that as it may, I do read a sufficient number of your e-mails to be able to catch the drift of your ire. Naturally, you want to know why a large regional bank like ours is “puking up” (your words, not mine) losses when Wells Fargo, Citibank, and B of A have reported big profits for the quarter. Well, let me be blunt about it – they are allowed to cheat on the numbers even more than we are.

You see, certain really large banks are considered “too big to fail” by the Treasury Dept. and the Federal Reserve – but, alas, your company isn’t one of them. Hence, to use Citibank as an example, the powers-that-be let Citi back-date January losses to December. Sure enough, that made the current quarter look much  better it really was.  Plus, Citi was permitted to book a gain on its own deteriorating debt via an accounting gimmick called, “a credit value adjustment.”

Now, please, I’m just trying to let you shareholders in on the straight dope; so whatever you do, don’t go out and start telling our customers about the latter. What it essentially means is this – picture one of our hopelessly past due borrowers swaggering into one of our branches and claiming the following: “Hey, since at most I can only pay you 25% of what I owe, then the liability side of my balance sheet is reduced by that 75%. Because of this ‘credit value adjustment,’ my financial statement is therefore now vastly ‘improved.’ Ergo, I am – Presto! – a better credit risk, so how’s about lending me some more dough!”

Of course, taking into account the many lousy loan decisions that your company has made – after all, we didn’t book the above-mentioned $80 million loss by being unadventurous in our credit committees – even we are dumbstruck at the audacity of such licentious legerdemain. Regardless, the Fed, Treasury, and a bunch of accountants gave Citi their blessings. It’s a travesty, I tell you! That is, that a mega bank got to do it and not your company!

Moving on, it seems that the second most important thing on your minds is this whole concept of having the government “stress test” certain banks. Again this won’t apply to us because we aren’t big enough. Still, we find it odd that the feds haven’t even revealed to the public what such an exam really entails. I mean, various agencies snoop around your company’s affairs all the time; it’s kind of like getting a physical. It may be, therefore, that a stress test is even more invasive.

I believe that your chairman, Wright Downs, who at 92 has seen just about everything, may have the best analogy. Just the other day he sagely told the rest of us in top management that if a routine visit from a regulator is like a physical, then a stress test must be like a prostate exam. Take JP Morgan, for instance. Your chairman thinks Morgan will know whether or not it passed based on the octave level of its management’s voices when the procedure is nearing completion. This is the way he put it: “The reg’lators’ll start out tellin’ ‘em to bend over and at first they may be calmly explaining their sit’ation and soundin’ real composed, vocalizin’ like James Earl Jones. But when the probe gets goodn’ deep they may wind up shattering wine glasses like Ella Fitzgerald. That’ll mean they failed the dadgum stress test!”

Anyway, we got the point.

On a more encouraging note, a brokerage company that follows your company’s stock put a positive spin on this quarter’s big negative number. “This is actually a better reporting period than would be implied by the headline number; that is, an $80,000,000 loss,” wrote Debra “Dee” Lude of our good friend, Seth Poole Securities. Sounds good to us. Moreover, employing such logic, I guess if we had blown double that amount, our prospects would be twice as good!

Bless her heart, Dee is an eternal optimist and she’s still in our corner despite her ill-timed upgrade of your company’s stock early last summer. I suppose that technically her call was a good one, as her firm’s clients would have benefited if had they bought our shares back then. I mean, she did say we would “outperform” – and outperform we did! Our share price is up .006%.

Furthermore, by way of her report, Seth Poole suggested to its clients that, because we are taking our write-off medicine now, we might emerge first when the economy gets kicking again. I sure hope the firm is correct, but a lot will have to do with what happens to our massive portfolio of Home Equity Lines of Credit (”HELOC’s). Regrettably, your company pitched HELOC’s like candy at an second grade Halloween party during the earlier part of this decade.

By the way, since we are discussing this loan product, let me clarify some confusion regarding the correct way to pronounce its nickname. We in management prefer not to use the long vowel, as in HEE-LOCKS, but rather the short “e”, as in HELL-LOCKS. Besides, the latter carries the added benefit of describing the purgatory of holding a slew of second mortgages at a time when many banks are discovering that even their first mortgage collateral is worth far less than what the borrower owes.

Last time I looked, we had HELOC’s totaling 300% or so of our capital. I’m referring to “real” equity, I should point out, not the new-fangled number we are reporting nowadays that includes our ingestion of TARP money. In any case, I guess our exposure means that, if roughly a third of those HELOC borrowers welsh, your company’s net worth shall be but a distant memory.

We don’t think such a scenario will take place. Nevertheless, it is indeed a sobering thought – but not so sobering that doing away with the bottom drawer contents is being contemplated presently.

Keep your fingers crossed,

Jerry Rigg, Chairman