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MyFoxKansasCity reports that many people are not taking the closure of their local Starbucks (NASDAQ: SBUX) sitting down. If your local Starbucks is among the 600 being shuttered around the U.S., perhaps you would like to join the movement.

MyFox lists four Starbucks there that are closing. And it reports that people are already using e-mail and a Web site to fight the closing. For example, Kansas City H&R Block employees sent out e-mails arguing against the closure -- they suggest that downtown Kansas City is "just starting to grow" and that "their Starbucks has a lot of earning potential." And MyFox reports that Kansas City has set up saveourstarbucks.com where visitors can type in their location, and their comments about "why [they] just can't live without [their] favorite Starbucks location."

Will any of these efforts work? I doubt it. Starbucks probably picked the 600 stores that it's closing based on their relatively low traffic, their costs to operate, and their forecast of future revenues based on the local business and retail climate and the level of competition. It doesn't seem to me that a Save our Starbucks campaign would change any of these factors unless you could prove that you would bring, say, 10 of your friends to the location every week,.

This post is part of a series on celebrity spokespeople who ended up doing serious harm to the brands they were hired to promote, or vice versa. See how we rank the 20 top spokesperson fiascos.

When it rains, it pours. Back in 2005 Defamer reports that Star " I am a lawyer" Jones was booted as a spokesperson for Payless Shoe Source around the same time that she was dumped from The View. Jones was clearly of no use to the shoe chain once she was Barbaraed off of The View. So Payless used its steel-toed boot to kick her to the curb.

Defamer noted that both parties tried to put a good spin on the situation. Payless said that the terms of their contract called for it to end after three years and that it was successful. And Jones said the same thing about the contract ending -- but she suggested that Payless decided it no longer wanted celebrities to endorse its products. Jones clearly still considered herself a celebrity.

But the people who release such statements are often paid well to provide a different view of reality. Unfortunately for Jones, it has been years since she's had as good a marketing platform as The View -- from which to offer such spin.

Read the entire series

In the expectations game, Citigroup (NYSE: C) $2.5 billion loss is great news for Wall Street. Bloomberg News reports that the analysts it surveyed expected a $3.67 billion loss, or 54 cents a share -- so Citi's results were $1.2 billion better than expected. But there were wide variations on what analysts expected Citi to lose -- from 51 cents to 67 cents.

This reminds me of the story of the boy who comes home from school to tell his mother about a grade he got on a test. Rather than bow his head in shame, he walks into the kitchen with head held high and a big smile on his face. And he announces: "Great news mom! I got a 70!"

The key reason for Citi's loss is the $7 billion in credit-related write-downs it took. These included reductions in the stated value of its subprime mortgage exposure and its investments in monoline insurance companies including Ambac Financial Group Inc. (NYSE: ABK) after they lost their AAA credit ratings. Analysts expected write-downs as high as $12 billion.

Last week, our country suffered its second biggest bank failure in history. But since it was an FDIC insured institution, this means that depositors had nothing to worry about as long as they had less than $100,000 in each account, right?

Well, that's what I thought when I heard that $32 billion IndyMac had failed. But a commenter on my Auction Rate Securities (ARS) post -- which now has 5,235 comments from people whose money is frozen -- told a chilling story with implications for everyone who keeps money at a bank.

As he said, "I've spent the past 3 days waiting outside an IndyMac branch. it was utter chaos. some people had funds that mysteriously disappeared from the IndyMac computer logs. (under 100 grand). bumbling FDIC officials, depositors fighting, people passing out from the heat, elderly folks collapsing when they realize their life savings were not insured...and even those who had under 100 grand are having some difficulty getting other institutions to accept the IndyMac checks."

If you have deposits in a bank that looks like it's in trouble, get your money out before the FDIC takes it over. Do you really want to spend three days waiting in line to access your cash? As the commenter advised: "While you may be within the insured limits at your bank, like i was, you still want to avoid banks that are in trouble. It's not worth the hassle."

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

Reuters reports that Capital One Financial (NYSE: COF) reported that its profit tumbled 40% and its earnings came in 10 cents a share less than expected. Its loan losses spiked -- cutting into profits.

In particular, Capital One made $1.21 a share and analysts had expected $1.31. And its provision for losses more than doubled from the same period in 2007. According to PR Newswire, Capital One's provision increased 109% from $397 million to $829 million.

The problem? Consumers are not paying off their credit cards like they did when they were using their house as an ATM. With housing prices down 15% and three million foreclosures underway, consumers just can't afford to pay off their credit cards. And Capital One is expecting a big jump in bad debt. Its stock has fallen 4.9% after hours.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

Reuters reports that Merrill Lynch (NYSE: MER) reported worse than expected results for the second quarter. Merrill lost $4.9 billion and is selling $8 billion in fresh assets to raise capital.

Merrill's news is the latest of the asset write-down capital raising dances that have taken place in the last year. This dance pairs the write-down of mortgage-backed securities that nobody wants to buy with a desperate effort to raise capital to keep its capital ratios from collapsing. To that end, Merrill took $9.4 billion of write-downs of repackaged debt, including CDOs, as well as exposure to bond insurers. And it raised $4.425 billion from selling its 20% stake in Bloomberg. Merrill may also sell a controlling interest in Financial Data Services for $3.5 billion.

Its loss of $4.42 a share was more than twice the $1.94 loss that analysts had expected. There is not likely to be an end to this asset write-down capital raising dance until people are willing to trade CDOs. And that's the optimistic scenario. If CDOs remain illiquid, it will be ever more difficult to raise capital. And in that case, the prospect of bankruptcy or government bailout loom large. Meanwhile, Merill's stock lost 7.3% in after-hours trading.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

The Wall Street Journal reports a mixed picture on technology earnings. Google Inc. (NASDAQ: GOOG) and Microsoft Corporation (NASDAQ: MSFT) disappointed investors but International Business Machines (NYSE: IBM) put impressive numbers on the board.

Here are the details:

• Google. The Journal reports that Google's net was up 35%, but investors expected it to make $4.74 excluding stock options -- 11 cents more than the $4.63 it reported -- Google lost 10% of ita market value after-hours.
• Microsoft. The Journal reported that Microsoft's net was up 42%, it reported EPS of 46 cents a share. But investors did not like its guidance. Microsoft's guidance of $2.12 to $2.18 per share on revenue from $67.3 billion to $68.1 billion was less than the $2.16 on revenue of $67.3 billion that analysts expected. Microsoft lost 5.7% of ots market value after-hours.
• IBM. The Journal reports that IBM's net was up 22% to $1.98. Investors had expected it to make $1.82 -- its stock was up slightly in after-hours trading.

DealBook reports that JPMorgan Chase & Co. (NYSE: JPM) CEO Jamie Dimon let out some bad news on JPMorgan's conference call today. Despite beating estimates, DealBook reported that JP Morgan's highest quality, so-called Prime mortgages, were, as Dimon said, "terrible, and we're sorry. We can say it eight times. It looks terrible."

Prime mortgages are not supposed to behave like subprime ones. But disappointment seems to be the big theme with the mortgage industry. Prime mortgages barely defaulted at all in the second quarter of 2007 -- JPMorgan wrote off 0.05% of them a year ago -- taking a $4 million charge. But in the same quarter of 2008, JPMorgan wrote off 0.91% -- and charged off $104 million.

And Dimon expects those Prime losses to triple -- to $300 million. If there's any good news, that $300 million is a mere 15% of the net income it earned this quarter. Still, it suggests the depth of the economic problems that lie ahead.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

Reuters reports that today is a big one for bank and technology earnings. It looks like Merrill Lynch (NYSE: MER) will lose big and will try to soften the blow with an announcement about selling its 20% of Bloomberg LP for $4.5 billion to its founder, New York mayor, Michael Bloomberg. JP Morgan Chase (NYSE: JPM) and a handful of big technology companies are expected to report profits. But will they be enough?

Meanwhile, how can we make sense of yesterday's 276 point rally on Wall Street? Nobody knows what happened, but theories abound: the price of oil fell -- possibly due to anticipation that the Fed would raise interest rates to deal with inflation that is roaring out of control. Higher interest rates would strengthen the dollar, which would drive down the price of oil since it's traded in dollars. But I think yesterday's market was a short-covering frenzy. With the SEC foolishly squeezing the shorts, they needed to cover their bets that financials would fall further. Of course good news from Wells Fargo (NYSE: WFC) didn't hurt.

Today's earnings -- with estimates courtesy of a Reuters analyst survey -- are likely to move the market. Here's a roundup:

• Merrill Lynch is expected to lose $1.94
• JPMorgan was expected to make $0.44, down 63% from 2007. At a Price/Earnings to Growth (PEG) ratio of 0.4 and a P/E of 12 on earnings forecast to grow 31% to $3.34 in 2009, it looks cheap. CNNMoney reports it made 54 cents -- well ahead of expectations and its shares are up 5% in premarket.
• Microsoft Corp. (NASDAQ: MSFT) will earn 47 cents a share, a 21% increase from last year. At a PEG ratio of 1.1 and a P/E of 15 on earnings forecast to grow 14.3% to $2.16 in 2009, it looks reasonably priced.

The New York Times reports that Citigroup (NYSE: C) CEO Vikram Pandit is trying to buck up his troops with speeches on values. Since taking over last December 12, Citi's stock has lost over 50% of its value and has accumulated $45 billion in losses in the last year.

A few days after he started as CEO, I suggested that Citi might be a buy if it hits $15. I am sorry to say it, but I was wrong. We're at $15 today and I would not buy more at this price. With analysts expecting Citi to lose 31 cents a share when it reports on Friday, it seems to me that the downside risks to the stock weigh heavily. That's because it's missed estimates the last two quarters and Zacks thinks it could lose as much as 51 cents a share. But what worries me the most is what the Times reported about what appears to be a missing sense of urgency about how to fix Citi.

It describes how he spent time at a meeting in Armonk, NY, pushing "60 top managers to build on his seven rules, which he unveiled in the last few weeks. Those rules include items like "client connectivity," "transparency" and "product excellence."" Not surprisingly, in my view, the Times reports that "some Citigroup insiders roll their eyes at what they see as dull platitudes."

Despite plunging housing prices, record oil and food costs, rising unemployment and a growth-chilling credit crunch, there is some good news in the economy. MarketWatch reports that short sellers had their best month in seven years in June.

Specifically, it reports that The Strunk Short Index, which tracks short selling fund managers, rose 10.47% in June -- it was last higher than that in March 2001 when it climbed 12.45%.The Strunk's best years were in 2002, when investors sold tech stocks, and in 1990, during the last major U.S. banking crisis. It gained 30% and 43% respectively in those years.

But thanks to government intervention, the SEC is going to shut down the one bright spot in the economy. Bloomberg News reports that the SEC is changing the rules of short selling. In particular, it is banning so-called naked short selling -- in which a trader sells a stock without borrowing its shares -- for Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). For the next 30 days, traders will need to borrow shares to short them.

This is less of a problem than it appears. The stocks of the two companies fell over 26% Tuesday and they'll probably hit zero in the next 30 days if current trends continue. Meanwhile, unless the SEC decides to ban short selling on the 150 banks expected to fail in the next 18 months, the shorts will not be denied.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

The SEC is trying to stop Wall Street players from spreading rumors that sink stocks, as I posted yesterday. The reason such rumors matter is because there are many companies that are unable to defend themselves from rumors. Bear Stearns comes to mind as an example. I think if someone tried to spread a rumor that Goldman Sachs Group (NYSE: GS) or Berkshire Hathaway Inc. (NYSE: BRK.A) were heading for bankruptcy, the rumor would not get foo far.

But if a company lacks such a strong reputation, its CEO needs to be prepared to respond effectively to such rumors. And I really don't think it should be difficult to mount an effective defense. In my mind, the CEO should be able to provide credible answers to two questions:

• Cash flow. How large are the company's short- and medium-term liabilities and how many times do the market value of its short- and medium-term assets cover these liabilities?
• Debt default. What are the company's key loan terms and what specific assurance can the company provide that it is in compliance with these terms?

The Wall Street Journal [subscription required] reports that Ben Bernanke's congressional testimony is full of uncertainty. The interesting part is that he's suddenly coming to realize that there is inflation in the economy. With oil prices up five-fold from $24 in January 2001, the dollar down 72% and food prices triple where they were a few years ago, Bernanke's statement suggests that he his suddenly becoming aware that core inflation -- which excludes energy and food prices -- is not real inflation. His statement suggests he only now comes to realize that energy and food prices part of our economy too.

Investors are spooked by Bernanke's uncertainty. I would support an effort by Bernanke to stop the fall in the dollar, but in order to make that work, the White House will need to direct a change in policy. This would mean raising interest rates, reducing the budget deficit -- including ending tax breaks for the rich and pulling the plug on expensive wars, as well as paying down the $9.5 trillion federal debt.

Guess what? That policy will not happen under the current president. And if Paulson is serious about raising the national debt to bail out the mortgage industry, the dollar will grow even weaker. The administration's policy of waiting until a disaster strikes to wake up and do something is costing this country trillions. I think we're getting to the point where we need to ask whether there is a limit to how much bailing out the U.S. can afford.

Meanwhile, if Bernanke raises rates to combat inflation, it will be interesting to see what that does to the flow of credit.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Last week, the FDIC oversaw the second biggest bank failure in U.S. history -- $32 billion IndyMac Bancorp (NYSE: IMB). I thought more would be on the way and this morning's New York Times estimates that 150 of the 7,500 U.S. banks will fail in the next 12 to 18 months. The FDIC only has $53 billion in its fund to cover bank failures so it is going to be needing much more cash, which it may get from raising insurance rates. No doubt those of us with bank accounts will pay the price.

For those looking to profit from this failure, it's time to get a hold of the FDIC's problem bank list and start estimating the ones that are most likely to get taken over. Here are some hints: look at their mortgages as a percent of total loans, their cash flow, when they have to pay back their debt, and the increase in the rate of their bad loans. The Times mentions two that are probably already on the radar of short sellers:

• BankUnited Financial Corporation (NASDAQ: BKUNA) in Florida, which trades at 77 cents a share and is probably too far gone to profit from as a short, went for $20 a share a year ago.
• Downey Financial Corporation (NYSE: DSL) in California, which trades at $1.69 today, traded at $65 a year ago.

The New York Times reports that the Securities and Exchange Commission (SEC) is going to begin examining "rumor-spreading intended to manipulate stock prices." Rather than protecting investors against false statements from financial advisers, as happened in the case of the $330 billion now-frozen Auction Rate Securities (ARS) market, the SEC is out to protect executives of companies they run into the ground.

What does the SEC's new policy entail? The Times says that the SEC will start today by focusing on "what policies brokerage firms have in place to prevent the passing of false information. The intent is to stop malicious rumors without hampering the natural exchange of information in the marketplace." I am not a lawyer but it sounds like the SEC will have a tough time monitoring all the exchanges of information among those on Wall Street unless it plans to record every cell phone, land-line, e-mail, IM, and Blackberry exchange all around the world.

Meanwhile, it seems that the government has strained to distinguish between fact and fiction when it makes big policy decisions. For instance, last year Hank Paulson and Ben Bernanke were saying that the subprime problem was "contained." Would the SEC indict Paulson and Bernanke for spreading false rumors intended to manipulate stock prices? After all, their statements -- which are clearly false -- may have had the effect of causing investors to buy stock in non-subprime mortgage lenders. Could they get off the SEC's hook by proving they had no intent to manipulate stock prices?