Professor Elam

Tuesday Feb 5 2013

I have suggested that all of you need to subscribe to and read the WSJ. I have also suggested that to really advance your career, you need to be forward looking, most of accounting however is backward looking in terms of preparing financial statements. Here are examples of what I mean gleaned from this morning's WSJ.

-On page one the DELL saga of going private continues. Ten years ago DELL was a star and hailed as such in college textbooks. Today Mike Dell would apparently rather work without the public scrutiny of quarterly reports. The deal is worth $23 which is about where the company is valued now. It also includes $15 B in debt, ouch!

-Now connect the dots. On page A 15 Who Needs Wall Street?  This op ed traces the rise of private equity financing, remember that guy Romney with Bain Capital? One can also connect the dots to the Year 2002 Sarbanes Oxley Act. Since then foreign exchanges have grown tremendously while the NYSE gets smaller. The big IPOs are much more liable to be in Hong Kong than Manhattan. 

-Atty General Eric Holder decides to sue S & P over its mortgage ratings. This is the height of irony. It was the government's own Community Development Act that created lousy mortgages and forced banks to make the loans and then its own SEC that turend a blind eye to the speculation in them. Alan Greenspan encouraged more ot his gambling by rescuing Long Term Capital Management.  Alan further encouraged speculation by encouraging ultra low interest rates.  Who;s really at fault here Eric?

-On the back page, D6, is the latest Lance Armstrong update. ON the athletic stie Strava, Lance as a premium member no less, boasts that 

According to rivals, peeers, and teammates, I won the Tour de France seven times. 

Contrition time anyone?