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There is apparently something VERY wrong with a firmware update that got pushed to Garmin Nuvis (one of their portable GPS systems.)

If you have one of these, and have not used it recently, do not until you check with Garmin!  If your unit has the "bad" firmware it may go completely dead, requiring replacement.

While Garmin is apparently making good, they are not (as of this time) eating shipping charges back to them nor doing anything for your time without the unit.

There is now a Garmin FAQ entry up on this that has firmware update instructions - IF your unit is displaying "Updating GPS firmware" or similar messages.

If its dead, you're screwed as the unit will apparently have to go back.

This is a major design defect folks, and if it is also the case for other Garmin products, this has the potential to cause serious trouble for Garmin, and serious COST to them.

Of late manufacturers have gotten into the habit of putting field-upgrade capability into their hardware.  Garmin has done it for a long time.  This is generally a good thing, as it allows new features and bug fixes to be distributed.

HOWEVER, it is absolutely essential that all such devices have a HARD ROM area that cannot be overwritten or damaged, and a means for the consumer to get back to that ROM entry.  This "zero loader" capability means that if you screw up an update, or the manufacturer sends you an update that blows your device up, it is recoverable without sending the unit back to the factory by entering that "zero loader" and re-flashing the firmware.

Garmin apparently has omitted this safety feature and good engineering practice in their units - another buck or two worth of cost in the form of a permanent PROM with a boot loader in it, which can't be overwritten and which is accessed by holding down a button or similar while powering on.

As a result they are now going to get socked with returns of these devices and the reprogramming cost which they will eat.

This hasn't shown up in their stock price - but it very well might.

Hattip JFedak on the forum for the original story.

Disclosure: No position, but will consider a short in the morning.

I'm done being nice about this.

First, watch the following clip from CNBC.  It is quite clear, and explicit.

This set off a veritable firestorm on CNBC, with various commentators coming in to defend Bernanke.

None, however, was more odious than Jim Cramer, who said we need "a little less democracy."

What? 

LESS DEMOCRACY Jim?

Oh, I get it.  You think that The Federal Reserve should be able to break the law any time it wants?  That it should be able to, for example, buy Freddie and Fannie paper even though the clear black-letter law says it cannot?  The Fed should be able to set up "Maiden Lane" LLCs like candy for the explicit purpose of hiding deteriorating assets which it also cannot legally purchase?

And speaking of Bank of America, what happened about eighteen months ago?  You remember that little company called Countrywide Financial, right?  You remember that acquisition, yes?  Was "special pressure" brought to bear on that one?  That was "systemic risk" too, right?

I sure as hell couldn't figure out why Lewis would close that transaction a few months after it was announced, given that by then it was apparent that their credit book looked like something that had come out of the back end of a dog.  Was The Fed twisting arms on that transaction as well?

I believe the record is quite clear, even without the Bank of America/Merrill incident when it comes to The Fed.  I believe that the record documents that The Fed has committed to buy $1 trillion dollars of agency securities with printed money, monetizing them, in direct violation of The Federal Reserve Act as those securities do not have the full faith and credit of The United States.

The United States has not taken formal responsibility for Fannie and Freddie debt precisely because those MBS are stuffed full of toxic assets, specifically, "assets" like the Citibank mortgages that we discovered today are missing documentation (presumably that documentation is "missing" for a reason.)  Should the US take Fannie and Freddie formally onto their book the government would immediate book about $5 trillion dollars in additional debt (on top of the roughly $6 trillion of real, external debt we already have), almost certainly triggering an instant credit downgrade.  In addition it would make the US Federal Government directly responsible for all of the fraudulently-underwritten paper that institutions shoved at Fannie and Freddie through various deceptions and failures-to-disclose, said paper being exactly why Fannie and Freddie got in trouble in the first place!

So instead of the US Government taking care of these problems the right way, including investigating the fraudulent underwriting and jailing the responsible parties, The Fed simply "cheated", The Federal Reserve Act be damned.

Empowered with his "God Complex" Bernanke seems to think that he can not only buy things that The Fed Charter explicitly does not allow but that he can also twist around SEC disclosure rules and even lie under oath before Congress!  Remember, Bernanke was asked directly whether he pressured Bank of America to close that transaction in a Congressional hearing and he denied it - under oath.

Perjury is a serious and indeed can be a criminal offense, and I would hope that Congress will pursue this matter to the fullest extent of the law.

I will quote from President Obama's Inauguration Speech:

Our founding fathers faced with perils that we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations.

Those ideals still light the world, and we will not give them up for expedience's sake.

REALLY, Mr. President?

It would appear that Mr. Bernanke is not the only one with questions to answer before The American People.  President Obama's continued defense of this man who, in my opinion, has defiled the office he holds and blatantly violated both law and regulation is outrageous and must stop now.

Those media outlets, including CNBC who spent all afternoon trotting out people like Cramer to DEFEND this apparent lawlessness, should have their advertisers BOYCOTTED by all Americans who are concerned about the rule of law and its even application.  After all, if you are unable to make your mortgage or credit card payments you don't get to cheat!

The Honorable Mr. Issa is a great American, and those such as Jim Cramer who argue that the law only applies to "the little people", able to be disregarded with wild abandon whenever it suits those in power, would do well to remember that such principles seem to be the order of the day in such shining examples of representative government as North Korea and Zimbabwe.

From Bloomberg off the wire:

June 24 (Bloomberg) -- U.S. Congressman Darrell Issa said the Federal Reserve “engaged in a cover-up” about details of Bank of America Corp.’s takeover of Merrill Lynch & Co. The Fed “deliberately hid concerns and pertinent details” of the merger from other government agencies, Issa, a Republican from California, said in an e-mailed statement.

Ok, so we have a cover-up and we have intentional concealment from regulatory agencies charged with protecting the safety of the banking system.

One question: Where are the indictments, referrals to the DOJ and, if necessary, appointment of a Special Prosecutor?

This is what The Taxpayers get for supporting Citibank:

June 24 (Bloomberg) -- Citigroup Inc. suspended loan applications at a unit that produced half of its $115 billion in mortgages last year after a review found that some property appraisals and income-verification documents were missing.

The correspondent division, which buys loans from banks and independent mortgage firms, stopped accepting new loans at 5 p.m. yesterday and will restart July 6, Citigroup said in a June 22 letter to clients. The New York-based company said it will use the time to change procedures and fix the omissions.

Uh huh.

Missing, eh?  Gee, I wonder why appraisals and income verification documents would be missing?

According to the June 22 letter, the review identified “valuation concerns” where “appraisal documentation is missing or incomplete,” or where property-assessment methods were “insufficient/lacking.”

Other missing information included employment confirmations, phone numbers, credit reports and rent verification, the letter said. The review also found “income calculation errors.”

I have just one question:

Is anyone tracking shredder sales?

Second: Where is the OIG and OCC?  If they are doing their jobs they would be in Citi's offices like white on rice and force a re-underwriting of every affected file.  Of particular importance are those mortgages that were later sold off to Fannie and Freddie, or insured under the FHA.

Betcha that doesn't happen.

Uh, don't bother telling the banks:

BOSTON (MarketWatch) -- Charge-offs on U.S. credit cards gauged by a Moody's index surpassed 10% in May for the first time in the benchmark's history of more than 20 years. "We expect the charge-off rate index to continue to rise in the coming months but at a slower pace, as it peaks at around 12% in the second quarter of 2010," said William Black, Moody's senior vice president, in a press release Wednesday. May was the sixth consecutive month the charge-off rate rose to a record high, Moody's said.

Charge offs tend to parallel U-3 unemployment, strongly implying that we will see 10% unemployment sooner rather than later.

BTW, 12.x% unemployment would be the highest number registered on U-3 - ever - by about a 20% margin.

9.7% was the post-war high, set in 1982.  10% will best it and 12.x% will blow it to Mars, putting the lie immediately to those who claim "the recession is over."

The worse news is that since we no longer have a "Usury" law at the federal level and we allow banks to locate card divisions in states where there are no usury laws but then demand federal protection for their operations (rather than force them to deal with consumer protection suits in the same state) the response to this has been and will continue to be a relentless ratcheting upward of average interest rates charged on card balances which will not abate until the charge-off rate comes down.

This in turn will stomp on consumer discretionary income and spending, since money paid in interest obviously does not get spent at the local Best Buy purchasing a new flatscreen TV.

Those who argue for "green shoots" have yet to reconcile the reality of ramping debt service requirements, with many people being hit with credit card interest rates reaching 30% with their projection that consumer activity will "recover".

How big of a problem is this?  Revolving credit is some $1 trillion in total, up about 60% since 2000.  For every point in interest rate increase on average against this debt $10 billion is subtracted from consumer discretionary spending.  Even those who carry no balance are seeing major changes in rates - I don't care if card companies change my interest rate, for example, since I never carry a balance, but change they have been, and not downward.  I would not be surprised if the average interest rate has gone up by a full five points in the last six months for those who do carry a balance, and given the laws going into effect next year this will continue - right up into the deadline when they can't change rates for existing balances any more.

This is a direct $50 billion hit to consumer discretionary spending and the worse news is that the withdrawal of free credit lines will hit spending even more.  Card companies are cutting back lines to the used balance relentlessly for those who revolve accounts, precluding further credit extension and chopping off consumer spending at the knees.

Anyone who thinks that a $100 billion+ hit to consumer spending capacity, plus the follow-on emotional impact of "feeling poorer" when the plastic doesn't work any more won't show up in the economy has rocks in their head.

Anyone who believes that the impact of consumers having interest rates double will not result in a permanent aversion to credit use by consumers is even dumber.

Consumer spending has "enjoyed" a roughly 5% increase over "natural and sustainable" levels over the last five years due to "fog-a-mirror" credit policies.  Now that the results of this are coming crashing down on both banks and consumers, the believe that the removal of that increase will not boomerang by more than the original increase is simple foolishness.

The outcome of all of this, by the way, is an essentially-permanent 4% reduction to GDP that will be reflected in forward economic performance, and that's before the impact of unemployment is added in.

The willful refusal of the talking heads on TV to discuss the inevitable math of this credit collapse and its impact on consumer behavior is dangerous to your portfolio.

(And people wondered where I got my expectation of a potential 20% top-to-bottom GDP contraction from?  Now that you're seeing it in the data does it begin to make sense?)