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Bernanke’s Next Four Years

Posted on by Adrienne Gonzalez

We’re skipping >75 this week because apparently none of you have any CPA exam questions. That’s sad. Really? None? Well if you do, send them over. Please. JDA needs to eat.

Anyway, let’s talk about Bernanke’s confirmation!

WSJ:

Ben Bernanke won the backing of the Senate for a second four-year term as chairman of the Federal Reserve by a comfortable margin Thursday. Even with that storm behind him, Mr. Bernanke faces formidable political and economic challenges made tougher by the bruising confirmation fight.

Yeah, ok, let’s ignore the fact that the Fed spent the last week buttering up everyone they could to get to push Bernanke through. WSJ made it really easy with a chart of Senators who were going to vote for him, who weren’t, and who were undecided. It was a fucking Fed Telethon trying to save Bernanke’s ass and with a 70-30 vote, apparently they won.


Dallas Fed President Richard Fisher wrote in the WSJ that Congress is Politicizing the Fed but Market Ticker argued that The Fed is Politicizing the Fed. What do you call making a last ditch effort to convince undecided Senators to keep the Bernanke crack flowing? That’s not necessarily the Fed getting political, it’s just them trying to save their own asses.

I’m not going to rant about Zimbabwe Ben and his mission to destroy the dollar. In some ways, I’m glad this thing is over with and Bernanke is the least of all evils (Larry Summers for one) but it’s funny that markets reacted as they did when Bernanke’s confirmation was “up in the air” (LOL, we all knew what would happen).

I would hate to go all conspiratorial and throw out “manipulation” as the culprit, nor can I pretend to know what charts mean.

Don’t miss The Bernanke Confirmation: Incompetence, Indifference and Institutional Inertia via Huffington Post.

DealBook:

The Senate voted 70 to 30 on Thursday afternoon to confirm Ben S. Bernanke as chairman of the Federal Reserve for another four years, Sewell Chan of The New York Times reports from Washington. The confirmation came minutes after senators voted 77 to 23 to end a debate in which critics excoriated the central bank’s handling of the financial crisis.

The confirmation was a victory for President Obama, who had called Mr. Bernanke a critical leader in the nation’s recovery from recession, but the rancor in the debate also signaled the extent to which the Fed, once little known to the public, has become the object of populist anger over high unemployment and bank bailouts.

Grrrrr.

Related Posts

A Thanksgiving Reminder from >75

turkey.jpgEditor’s note: Welcome to latest edition of >75, our weekly post on questions that you have related to the CPA Exam. Send your questions to [email protected] and we’ll do our best to answer as many of them as possible. You can see all of the JDA’s posts for GC here and all our posts related to the CPA Exam here.
For CPA exam candidates, the final few weeks of the year can be a time of extreme pressure and/or procrastination. I won’t name names and bust any of our CPA Review students out (you know who you are) but I can tick off at least 25 people taking the exam today and next Monday, trying to squeeze in one last part before the New Year.
So how exactly is one supposed to show up for an exam the Monday after Turkey Day before the tryptophan coma has worn off?


• Plan better next time: This is a terrible time of year to be sitting for the exam but unfortunately it’s also the busiest. More candidates cram into the final testing window of the year than any other window so if you’re testing in the 4th quarter next year, keep that in mind when you’re scheduling your exams. Schedule early and don’t get stuck testing the week after Thanksgiving.
• Prioritize: Do you really need to hit your parents house, your in-laws’ house and your best friend’s grandma’s house for Thanksgiving? If you’re really serious about preparing through the weekend (which you should have already been doing weeks before this), cut dinner short, stick to one holiday meal and spend your Black Friday studying instead of getting trampled in the Wal-mart parking lot. It’s better for your brain and better for your wallet.
• You might have to have a chat with friends and family: If you’re trying to get a section in right when 2010’s first window opens up, you will be doing some studying through the December holidays and your absence might cause just a little bit of resentment. If you’re serious about getting the exam over with, sit down with loved ones and let them know that you need their support, not their shit. They have no idea what you are going through unless you tell them to back off and give you the time you need to study. And if that doesn’t work, coal for everyone in their stockings.
• My final point is this: it goes without saying that the holidays can be a stressful time for everyone and we all know what sort of stress taking the CPA exam causes. Mixing these two can be a dangerous cocktail of end-of-the-year misery if you don’t stay focused and plan your time accordingly. And look at it this way, you might get out of having to wear an ugly sweater or two.

Comverse: One More Epic Regulatory Failure

epic-failure.thumbnail.jpgTelecom company Comverse hasn’t filed financial statements in 4 years and the SEC has just now gotten around to settling with them. Does that make sense to anyone?
Continued, after the jump

Three years after getting caught in a huge stock-options backdating scandal, technology company Comverse appears to be nearing the end of its crisis. The company recently reported that it had come to an agreement with the U.S. Security and Exchange Commission, consenting to a permanent injunction over any future violations by the company of American securities laws.
Comverse will also have to meet its periodic reporting requirement to the SEC no later than Feb. 8, 2010.
The agreement acknowledges that Comverse neither admits nor denies the allegations that the SEC filed against the company, and no fines will be imposed. The settlement is subject to court approval.
Comverse President and CEO Andre Dahan called the settlement an important step forward. “With these matters resolved, we remain focused on our plan to be relisted and on carrying out our strategies for the long-term success of Comverse Technologies,” he said.

(source)
That’s all well and good but no fines? That sounds like encouraging bad behavior to me. What the SEC is saying, in effect, is that companies don’t really need to file financial statements, and if they do they can backdate all they want and perhaps the SEC will come around eventually to slap them on the wrist. Sounds like effective regulating to me.
Comverse subsidiary Ulticom finally filed 2005 – 2008 financial statements with the SEC this month and the company promises it will resume issuing quarterlies to the SEC in 2010. Well shit, why?

During the probe of the effects of the options backdating affair, following which Comverse CEO Kobi Alexander fled Israel to Namibia, Ulticom discovered additional accounting irregularities in the company’s financial statement preparations. Mistakes had been made in the recognition of postponed revenues in the years 1998-2004, and the expenses on intangible assets during 1999-2004 had been incorrectly assessed.
The correction of these irregularities resulted in a $6.8 million write-off from revenues prior to 2005, after which the company filed complete statements.

(source)
What’s the lesson here, kids? Do whatever the hell you want, it’s not like the SEC is going to stop you. It’s the IRS you’ve got to be afraid of, not the children over at SEC Elementary.
Also see: Where’s the Sex Tape, Comverse?

Panera Bread Combines Free Markets and Nonprofits in Missouri

In a test run to see if expenses can get covered at the end of the day, Panera Bread has opened a unique new location in Clayton, MO that combines the benefits of nonprofit status with the fundamental principle of the free market system: let the market determine what an item is worth. But it adds a unique qualifier to the traditional concept of the need determining price: human nature.


The menu is exactly the same as other Panera locations (sick foodies can check that out here if they aren’t familiar with Panera’s offerings) but instead of charging a fixed price for each item, this special little spot will ask only what customers can afford. “Take what you need, leave your fair share,” says the sign at their entrance, just in case one is confused by such a foreign transaction model. No prices? Do we even know how to value items independently any more?

Panera is hopeful that the “Cares Cafe” model will thrive and grow to a series of donation-based stores that rely more on empathy than capitalism. “Hopefully we’ll be able to open them across the country, but our original St. Louis location must succeed first!” tweeted the fine folks behind Panera’s official Twitter account.

Can someone confirm Missouri rules on sales taxes related to the sale of food? And is it a sale if the exchange is really a donation? I’m really confused.

Anyway, not everyone is thrilled about this concept. Though it is obviously well-intentioned, the donation model may not necessarily transfer outside of St Louis. Trends consultant Marian Salzman reality-checked USAToday saying “while young people are very much attuned to helping out and making a difference, if they find themselves sitting next to other customers with whom they don’t feel comfortable, they’re not coming back.” You know, as in the possibility of homeless and otherwise destitute individuals (of which our country has plenty nowadays) lounging around with the nerve to eat a cheap meal.

Hedging against operating losses, this particular location has one slight difference from other Panera stores: its bread (except for sandwich bread) is really day old product from other locations around the St Louis metro. Hey, nothing wrong with getting the most out of inventory with a horrible turnover rate.

In the end, it’s hard to say whether this nonprofit experiment will float but if it does, Panera wants to open two more within six months. Good luck with that.

Adrienne Gonzalez is the founder of Jr. Deputy Accountant, a former CPA wrangler and a Going Concern contributor . You can see more of her posts here.