From the Pew report "Beyond California: States in Peril."

Getting ink this afternoon is the red ink flooding not only California but your state, too. "Beyond California: States in Peril," a new report from the sharp Pew Center steams through the dire straits in much more dramatic fashion than a similar report of states' last rites from the Center for Budget and Policy Priorities (see "Recession's Over? States in Deep Trouble; Even More Jobs Will Be Lost").

The Pew report lists the top 10 troubled states: California, Arizona, Rhode Island, Michigan, Oregon, Nevada, Florida, New Jersey, Illinois, and Wisconsin. New York is close behind. Stories on this from CNN, Daily Finance, and the Detroit Free Press.

Capitol Hill and the White House have passed the "stimulus" torch to the states. Too bad for the states that the torch isn't lit.

The White House will be crowing today, according to early reports, that its stimulus has helped create and/or save about 650,000 jobs. Barack Obama's crew will tout this as a sign of success. Maybe others will see this as yet another sign that the Great Recession is supposedly over.

CNN early this morning came flat out and headlined, "Stimulus creates 650,000 jobs."

Wise not to be too hasty about this as a sign that things are getting better for anyone but Wall Street. Go deeper into the subject with the Economic Policy Institute's analysis of the White House's Recovery.gov reports. On the eve of today's release of the 650,000 figure, the EPI said the website's reports from federal contractors are "a substantial step toward federal accountability and transparency" but cautioned that "the estimates of the numbers of job created or retained by individual recipients are deeply flawed in many cases."

This thoughtful debunking is not coming from a right-wing group, either. The EPI is definitely a liberal think tank, though not a knee-jerk defender of the Obama administration.

It's vital for the administration — not for the country but for the White House — to crank up the p.r. about the supposed size of job creation. The question is whether the Obama administration is focusing more on convincing us that the recession is over than on taking firmer steps to actually end the recession.

Bank of America to Pay for Merrill Backstop, Faces SEC Trial (Bloomberg)

Ken Lewis trying hard to buy his way out of trouble, saying BofA will pay $425 million to cancel one piece of unused federal guarantee of Merrill Lynch's assets. Lewis frantically trying to reduce "reliance on government support and return to normal market funding." Will it help fend off the government? SEC says it will "vigorously pursue" its bonuses case against the bank, and maybe the SEC means business now that federal judge Jed Rakoff is on the agency's back.

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Liquidation of CDOs aids banks (FT)

Market has loosened up for the assets underlying the complex, toxic securities that crashed Wall Street. An estimated $123 billion of these bullshit, defaulted securities that fed the Street's excessive greed have been liquidated.

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Is This a Sucker's Rally? (Seeking Alpha, Jeff Miller)

A good roundup of bloviations good and bad.

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Why haven't any Wall Street tycoons been sent to the slammer? (McClatchy, Kevin G. Hall)

In search of a "poster child for the Great Recession." Hank Paulson's always a candidate.

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Envoy seeks to ditch 'bullying' US image (FT)

Louis Susman, Obama fundraiser and now U.S. ambassador to the U.K., announces that the Bush Era is officially over: "We are not a dumb power, we are not a bullying power." He adds: "To compare it to the previous relationship, well, some people might say that relationship wasn't healthy. Many people here in the UK didn't think it was healthy because it was without questioning and interaction."

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Roast of Joan Rivers	Encore Friday 10pm / 9c
Brad Garrett
www.comedycentral.com
Roast Master Kathy Griffin Zombie Paparazzi Game Joke of the Day

Thanks to good stuff from Dealbreaker's Bess Levin and the Daily News's Dave Goldiner, we may know too much about Bernie Madoff's sex life with secretaries (as they were called when he was banging them). The fact is that Madoff still did his best work on his older co-religionists.

Brad Garrett somehow puts it all in perspective in the Comedy Central Roast of Joan Rivers, when he cracks, "Joan has fucked more old Jews than Bernie Madoff."

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Key Feature Of Obama Health Plan May Be Out (WashPost)

"White House may be willing to jettison a controversial government-run insurance plan favored by liberals."

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Citigroup May Shift Phibro Trader Hall's Pay to Stock From Cash (Bloomberg)

Regular investors don't think much of Citigroup stock right now (it fell 3.9 percent this morning in early NY trading), and energy trader Andy Hall got $100 million last year, so why should he do this? Traders like Hall don't have to disclose their compensation and don't fall under the aegis of pay czar Ken Feinberg, so the feds may have to send some leg-breakers to Hall's mansion.

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Thick Fashion Magazines Are So Last Year (WSJ)

Advertisers not only suddenly frugal but also increasingly turning to the Web. Uh-oh. The Internet virus is spreading from the newspaper industry (which started to waste away before the recession) to the slicks.

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A Detailed Look At The Stratified U.S. Consumer (Zero Hedge, Tyler Durden)

Extremely long and extremely interesting analysis of why most of you are fucked.

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Wall Street Stimulus Buoys Continental Airlines, Prudential, Goldman Sachs (Bloomberg)

The S&P 500 "has soared 48 percent since it reached a 13-year low on March 9." That says something about the manic-depressive economy. Read the rest of this overview by Michael J. Moore. Goldman's equities revenue was up 59 percent over the first quarter, Wall Street firms have raked in $4.2 billion in underwriting fees because of all the action. The rally bolsters confidence in companies "that cater to wealthy and corporate clients." But, speaking of manic-depression, see this WSJ story: "After Dow's 42% Run, Roadblocks Looming." Lithium may be indicated.

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Death of a Rally (Seeking Alpha, Alan Brochstein)

"It's easier to call the economy than stocks, and the economy has been experiencing a dead-cat bounce. I have some charts that I looked at recently, and I think that the likelihood of a normal post-recession bounce is very low."

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Madoff Investor's Art Dealer Got $26.5 Million in Rothko Sale (Bloomberg)

Madoff pal Ezra Merkin sells off art for $310 million to unknown buyer. Fee to mysterious agent (believed to be Kyra Sedgwick's stepfather) dwarfs mysterious buyer's agent fee. Cuomo skims off $191 million, puts it in escrow for Madoff's/Merkin's victims.

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Two years of pain and mega bonuses are back (Times U.K.)

Investment-banking is back in a big way, and investment bankers are popular once again. "Guaranteed multi-year bonuses, which have been attacked as the worst kind of banking excess, are back. ... It wasn't meant to be like this. Regulators were meant to change the rules to make sure that such bonuses would never be paid again. We had the Walker report on executive pay, and Barack Obama's strictures on remuneration in America. Funnily enough, they do not seem to have curbed banks' behaviour one bit."

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US food groups warn of sugar shortage (Telegraph U.K.)

If you consider Hershey, Mars, and Krispy Kreme "food groups."

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MADOFF'S MAN DODGES GUN, DRUG CHARGES (NY Post)

Frank DiPascali's deal "shut the door on other skeletons in his closet, including guns and drugs."

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As if everyone expected "cash for clunkers" to jump start the entire economy, experts are surprised that the latest figures indicate that U.S. retail sales overall fell 0.1 percent in July.

"A huge disappointment on Wall Street," the WSJ says. Why the surprise? Foreclosures are way up, weekly jobless claims are rising, banks are leaning on credit-card customers with more fees and higher rates.

Key sentence: "Excluding autos, all other retail sales dropped 0.6 percent; economists expected a 0.1 percent gain."

Key no-shit quote in Bloomberg's account: "Consumers continued to maintain a tight hold on their wallets, worried about rising unemployment, falling home prices, and tight credit."

The White House deal with Big Pharma undermines democracy (Salon, Robert Reich)

Little guy who was a big wheel in Clinton administration is "appalled" that the Obama administration "has promised Big Pharma that any healthcare legislation will bar the government from using its huge purchasing power to negotiate lower drug prices." Accurately points out: "Any bonanza for the drug industry means higher healthcare costs for the rest of us."

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Plea Is Due From Aide to Madoff (WSJ)

Frank DiPascali we're talking about, but still unclear whether he'll testify against others. Some of Bernie Madoff's "highest-profile investors" might want to enjoy their August vacations while they can.

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Fed Focusing on Real-Estate Recession (Bloomberg)

"The collapse in commercial real estate is preventing Federal Reserve Chairman Ben S. Bernanke from declaring the economy and financial markets are healed."

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Paulson's Calls to Goldman Tested Ethics (NYT)

That's putting it mildly. Details on what we already strongly suspected: that Hank Paulson doled out aid "that directly benefited his former firm." Records show that Paulson was constantly on the phone during the crucial days of last September with current Goldman CEO Lloyd Blankfein.

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The me-first, screw-everyone-else crowd: Nothing will keep the rich from whining about how tough easy street is (Salon, David Sirota)

When they "scream" that business taxes simply can't be hiked, you should say, "Here's the smallest violin in the world playing for the businesses."

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Debt Burden to Weigh on Stocks (WSJ)

"The economy isn't strong enough to support a long-running stock and bond recovery, despite hopeful signs, many warn," especially because, "as consumers cut borrowing and boost savings, they can't be reliable drivers of growth."

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Foreigners See Dubai's Dark Side (WashPost)

"In economic slump, those who arrived seeking riches now face a prison cell or furtive flight." Dubai's rulers "hunt for foreign culprits to blame for the sheikdom's sliding economic fortunes, and "among those who have been locked up are a JPMorgan investment banker; American, British and other foreign property developers; a German yachtmaker; and two Australians who worked as senior executives of what was to be the world's largest waterfront development."

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Sam's Club Tests The Big-Box Bodega (WSJ)

Wal-Mart goes after the Latino market with Más Club big-box stores.

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Is Obama Punking Us? (NYT, Frank Rich)

Rips Obama for "old boys' club" of economic advisers, secretive deals on health-care package, etc. "The making of legislative sausage is never pretty. The White House has to give to get. But the cynicism being whipped up among voters is justified. Unlike Hillary Clinton, whose chief presidential campaign strategist unapologetically did double duty as a high-powered corporate flack, Obama promised change we could actually believe in." Verdict so far? Progressively worse.

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States End Up Losers in Gambling Pullback (WSJ)

Weak economy and rising unemployment mean fewer gamblers? Hard to believe, but that's what this story says in noting that lottery and casino revenues are down for the first time in many of the 48 states that depend on gambling revenue.

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Dish Network Profit Falls 81% in the Second Quarter (WSJ)

Sharp contrast from DirecTV, but no surprise, because Dish "focuses on the lower-end consumer, who is getting squeezed" by the recession.

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Chances of Fed Raising Rate? Near Zero (WSJ)

Nice pun, but seriously, folks, there may very well be a rate hike soon — not after this week's Fed meetings but soon. That's what we'll get because of the "surprising dip in unemployment." The average Joe just can't win.

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How Uncle Sam Owns Ken Lewis (New York, Heidi N. Moore)

"Implausible" that the government is "ruling Wall Street"? Yeah, maybe. But Ken Lewis, "who has always hoarded power and earned a reputation as a standoffish, acid-tongued loner," is the government's bitch.

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Publicis to Buy Microsoft's Razorfish (Reuters)

Big deal in Microsoft's Bing war against Google. Publicis is one of the world's biggest cluster of ad agencies (Leo Burnett and Saatchi & Saatchi, et al.) and will give Microsoft a smokin' deal on display and search ad services. In return, Publicis "increases its position in digital communications." Clever deal.

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Rio Spying Cost China Mills $102 Billion, Agency Says (Bloomberg)

Third-largest mining company in the world spied on China steel mills for six years, Chinese government says. Six years? That's all?

Good breakdown on how much stimulus dough has really been spent, courtesy of ProPublica's Christopher Flavelle and Jeff Larson: "Stimulus: How Fast We're Spending $792 Billion."

Sneak preview of the pretty little graphic's info and excellent links: The Railroad Retirement Board has spent 87 percent of its $156 million bundle. NASA has spent zero of its $1 billion. Accompanying story wonders what the fuck the problem is. It ain't a stimulus program if you print the money but then don't hand it out. When it's handed out, the money seems to be helping.

ProPublica's Eye on the Stimulus blog here.

No surprise that Ron Paul hates "Cash for Clunkers" almost as much as he hates the Fed. Even if you're a well-meaning do-gooder, you can at least listen to the Texas maverick: He's not as obnoxious a critic as lightweight loudmouth Glenn Beck. And every time Ron Paul uses the word "foolishness," he backs it with a good example. He makes some good points here, especially when he talks about how poor and near-poor people are getting the shaft every time a clunker gets shredded.

Not to mention teens looking for that rusted but barely driveable hulk that they covet as a first car. Paul doesn't mention that angle, but Big Money's Matthew DeBord does in "Does Cash for Clunkers Kill Teen Car Dreams?"