Erudite Boston Thug Explains New Banking Rules...

... with the help of the world's greatest CPA. 

"So whaddaya know?"

"You know what mark to market accounting is?"

"No."

Marty looked pleased.

"You wouldn't understand detail anyway," Marty said. "Say you kept a ledger, which in your case is unlikely, but say you did, and you're making knuckle knives.  You sell one to Hawk for a buck,and you debit your asset column one dollar, and credit your liabilities column one dollar.  The two columns are always supposed to be equal."

"I don't have a ledger," I said. 

"I know," Marty said, "and if you did, the columns would never be equal. But this is hypothetical."

"And Hawk's already got a knuckle knife."

"Shut up and listen," Marty said. "So you keep your ledger and somebody says how much money you got and you say a buck, and they say show me and you take the buck out of your pocket and wave it under their nose.

"But," he said, and paused expectantly.  "Suppose you and Hawk have a deal.  He'll buy a knife every year for five years.  So you debit a buck from the asset side, and you credit five bucks on the liability.  Because that's what the deal's worth over time."

I nodded.

"Get it?" Marty said.  "See the problem?"

"What if Hawk dies or backs out of the deal?"

He was thrilled.

"Or somebody comes by in the first year and says show me the cash?" he said.

"I take out my one dollar."

"And suppose the guy that's asking has just fixed your sink, and seeing that you have five dollars in revenue, does it for credit, and now wants his five smackers?"

"I don't think I've heard anyone say smackers since I donated my Perry Como albums."

"Never mind that.  What I described in grossly oversimplified terms is another kind of accounting called mark to market."

"Thank God for the gross oversimplification," I said.

"And here's a little embroidery," Marty said. "Say you think the cost of knuckle knives will go up over time, so you, or probably I at your behest, because you pay me a monstruous retainer every year and I am in your pocket, make a projection of how much the price will rise, and decide that they'll be worth two bucks, five years hence."

"Hence."

"Yeah, hence. I went to the fucking Wharton School, remember.  So now you've got a deal worth ten simoleons and you credit that.  But how much actual cash you got?"

"A simoleon."

"See?"

"And the advantage of that is it inflates your revenue."

"Yes."

"Which makes your stock worth more."

"Yeah, and if you need to show an even bigger profit you can just move the curve."

"Predict that knives will sell for two-fifty," I said. "And then I can show a credit of twelve-fifty."

"Exactly."

"And it's legal."

"Sure, mark to market is perfectly legal, often useful, sometimes necessary, in companies where a reasonable curve can be predicted.  But it's less, ah, appropriate for a company whose product may fluctuate wildly because of war, or climactic events, or political decisions, or economic circumstance, or the death of some Arabian sheik."

"And you might find yourself with a cash-flow problem."

"Yeah.  You have to pay your employees, for example, in cash.  If you have debt to service, and you're cash-poor, you have to service that in cash.  And you have to do it now, not five years from now."

"So," I said. "Worst case?"

"You can't pay your bills.  You go bankrupt."

(Abridged from Bad Business, a Spenser novel by Robert B. Parker)

Now don't you feel reassured about our financial institutions?

Obama Impressed by G19 Riots

Asks Brown, Sarkozy, Merkel: "Gee, why are they so mad at you guys?"

Obama's Target for Tonight...

OK, Obama vilified the AIG executives who actually MADE money and had the nerve to take bonuses for it, proving he was going to stick it to the Man, man (even though he nominally IS the Man, man) and was rewarded with a stock market tanking even further and capable financial managers looking to get as far away from Obama and his NY catamites Cuomo and Paterson as possible.

He vilified Rush -- and was rewarded by Rush's ratings going through the roof and his airtime being bought in full for two years down the road.

He vilified Richard Wagoner -- and was rewarded with a nose-diving stock market (again) and being handed a basket of Detroit lemons that HE is now responsible for.

He continues the ongoing vilification and harassment of Sarah Palin -- with the result that her PAC is raking in big bucks and people are noticing that she is refusing bailout money and handling a freaking volcano in her home state without running screaming for help to Washington.

Obama and his handlers are clearly believers in Alinsky's old rule for radicals, that you must demonize your opponents and make them monsters responsible for everything afflicting the voters. But he seems less clear on the notion of unintended consequences.

So this raises the question, Who Will Barack Obama Target Next? Who will be the NEW official monster of the conservative movement. I've taken the liberty of posting the first three that come to my mind, feel free to suggest more.

MARK LEVIN The waspishly acerbic radio host and his book Liberty and Tyranny are dominating the Amazon and Barnes & Noble bestseller lists, with lines around whole shopping malls for his booksignings.

Angie Harmon The fetching Law and Order beauty had the temerity to claim she could disagree with Barack Obama and NOT be a racist. Attorney General Holder may have her court-martialed for cowardice.

Michael Steele Last and, okay, pretty much least, the RNC chairman's embarrassing media presence and unwillingness to confront people out to destroy the party he supposedly represents have reenergized a fractured conservative GOP wing, inspiring them to a new activism and independence from the clueless party hierarchy. This is something Barack Obama can neither forgive nor ignore.

So take your pick, folks! Which of us is next?

Who Ordered Another Texan?

Obama Appoints New GM CEO!

From the WH press release:

Sidona Arizona native Mitzi "Uhuru" Goldfarb-Bennington has a Masters Degree in Crafts from the Cornell College of Agriculture and Life Sciences. As a distinguished Cornell graduate, like her contemporary Keith Olbermann, Mitzi will bring a fresh, sophisticated vision to the outdated model of running a major international automobile company.

Mitzi comes to us from a successful managerial career as the self-publisher of Terror for Tots, a primer on the horrors of Abu Ghraib at the hands of George Bush for the K-3 age group, and organizer of the PETA campaign to prevent the extermination of the endangered Norwegian Rat in six major American cities.

Ms. Goldfarb-Bennington is looking forward to her role as leader of this country's largest automobile maker. "My father tried to give me a Chevy Vega for my 16th birthday," Mitzi says. "And that's just not something you forget."

Mitzi plans to shift the GM lines over to electric cars as soon as possible, as soon as the technology permits. "Right now we're looking at D-cells, but on the other hand, with AA's you get more in the package."