• Professor Elam

    Friday Sept 20 2019

    A Rogue Trader at Mitsubishi causesd a $320 M loss in oil fututures.

    While that is small in comparison to Mitsu overall profit, how embarassing an internal control failure.

     

  • Professor Elam

    Wednesday Sept 18 2019

    The Mays Center hosted a group of  volunteer non profits on campus today. Students and faculty had the chance to interface with them one on one.

     

    I visited with Mary Flannigan, Director of Communications and Partnerships at SA Youth Literacy. P9180008

     

     

     

     

     

     

     

     

     

     

    This group recruits volunteers to assist second graders with a reading program. Testing begins in the third grade. So  assisting with a push toward reading makes sense at this time. We see the results of testing reading out of education. Far too often not college ready means a lack of reading comprehension, what did you read?  And good writing only results from good reading.

    P9180006

  • Professor Elam

    Friday Sept  13 2019

    https://www.yahoo.com/entertainment/felicity-huffman-sentenced-college-admissions-scandal-195146827.html

    Felicity Huffman gets 14 days in jail for an attempt costing $15 K to get her daugher into a college of her choice.

     

     

    Gee what do you suppose her legal bills are now?

    Why not just contribute a half million to the school, perfectly legal, and bingo, daughter admitted.

    Geez

     

  • Professor Elam

    Thursday Sept 12 2019

    See page B 10 ij today's WSJ for the story on yet another KPMG ethical failure.

    The top auditor bribed and or stole information about which audits the PCAOB would examine.

    It is rare for a Big Four auditor to get jail time but he is sentenced to one year and one day which allows for an earlier parole.

    He states he never imagined he wold commit a crime

     

  • Professor Elam

    Thursday Sept  12 2019

    T Boone Pickens is described as a corporart raider. Except he never succeeded in taking over any firm.

    Here is a list of links to learn about the up and down career  of a famous Texan.

    James Stewart's prize winning account of Drexel and the Take Over Mania

    https://www.amazon.com/Den-Thieves-James-B-Stewart-ebook/dp/B008TRU7PE/ref=sr_1_1?crid=170DFGPTZGD2D&keywords=den+of+theives&qid=1568293726&s=books&sprefix=den+of+theives%2Caps%2C356&sr=1-1

     

    Drexel Burnham Lambert

    https://en.wikipedia.org/wiki/Drexel_Burnham_Lambert

     

    Michael Miliken

     

    https://en.wikipedia.org/wiki/Michael_Milken

     

    T Bone Pickens

     

    https://en.wikipedia.org/wiki/T._Boone_Pickens

  • Professor Elam

    Thursday Sept 12, 2019

    Luby's is exploring a possible sale.

    The stock has traded in low single digits for years while losing money.  Cafeterias have closed.  The Pappas Brothers are in control of the firm which also includes Fuddruckers. About 25 years ago senior citizens made Lubys a real item. I suspect as one student remarked, that concept of open food in steam trays is not appealing any longer.  Golden Corral has also diminished with the same formula.

    The stock price has been in decline for years.

    Screen Shot 2019-09-12 at 8.50.39 AM

  • Professor Elam

    Thursday Sept 12, 2019

    Today's selection — from The Minard System by Sandra Rendgen.

    In an age when the use and importance of data and statistics were first emerging, Charles Joseph Minard (1781-1870) pioneered the use of visuals to portray that data. His most famous chart, published in 1869 and revered by those in his field, shows Napoleon's army of 422,000 soldiers marching to Moscow and returning as a decimated force of only 10,000:

    "This work has stood out from Minard's extensive oeuvre for a long time and continues to do so today. Its fame has even produced some curious momentos, such as a T-shirt feauturing [it]. … Much of this selective fame can be traced back to the enthusiastic praise that the American statistician and political scientist Edward Tufte (b. 1942) bestowed on this graphic. He reasoned that 'it may well be the best statistical graphic ever drawn,' and published a facsimile of it. …

    "The source of Minard's prevail­ing fame [is] his flow map relating to Napo­leon's Russian Campaign in 1812-1813 [below]. It is puzzling that it is so often shown as an isolated work when it actu­ally forms part of a comparison with a second flow map, which covers the 218 BC march of Carthagian commander Hannibal who, along with an army of ninety thousand men, crossed over the Alps toward Rome. The two maps show the 'progressive losses in men' that both armies suffered. The flows are construct­ed to the same scale. It is important to note that both campaigns consisted of countless separate movements and were interrupted by battles, overnight stays, retreats and advances, and the parting and reunion of troops. To show both campaigns as a constant flow is 'an effective generalization of a historic event.'

    "The Napoleon graphic manages to integrate six data variables in a con­densed representation devoid of visual clutter. Its base map is strikingly reduced — except for a few rivers, barely any landscape features are delineated. The westernmost point is the city of Kowno (Kaunas, in what is today Lithuania) on the river Neman. In the east the city of Moscow is the extreme point of the flow. Note that the place names are neither consistently local nor taken from any par­ticular language but switch from French to German to Slavic. The flow enters Russia from Poland with 422,000 men; the retreating army crosses the Neman with only 10,000 men remaining. The graphic is enhanced by a temperature diagram (referring to the Réaumur scale) connected to the retreating flow. Contrary to conventional line diagrams, this one has the time running from right to left in order to follow the westward retreat.

    "A notable 'narrative' label on the lower left-hand side of the map reads, 'The Cossacks gallop over the frozen Neman.' This isolated test is connected to a spot on the Neman, located in the brown flow entering Russia. However, as we speak of Cossacks and the frozen river, the label can only refer to Russian soldiers chasing the retreating French army in the winter. We may assume then, that Minard here — in an interesting impulse to complete the 'narrative' contained in the map – 'told' the end of the story with an anecdote from the retreat and linked it to a particular location on the river.

    Charles Minard's map of Napoleon's disastrous Russian campaign of 1812. The graphic is notable for its representation in two dimensions of six types of data: the number of Napoleon's troops; distance; temperature; the latitude and longitude; direction of travel; and location relative to specific dates.
    "In the text Minard listed the books from which he had extracted his data. This must have been a rather laborious process, given that 'the army' consisted of countless military units from many parts of Europe,'

    "In comparison, the Hannibal base map is more detailed. It emphasizes the coastlines of Spain, southern France, and Italy, and includes the mountain ranges of the Pyrenees and the Alps, both of which formed fatal barriers for Hannibal's army. Note that the region is rotated eastward to make the coast­line fit the horizontal format. The scale along the bottom refers to leagues, an ancient unit of length. Due to the consistent scaling in both maps — as be­fore, this was a priority for Minard — Hannibal's losses seem rather modest. He had, however, lost some sixty-eight thousand men in this march, amounting to 72 percent of his troops.

    "Minard based his representationon the ancient account in Polybius's Histories, as well as some advice from contemporary historians. The map arrestingly conveys a sense of the fatal moments of the campaign. When Hanni­bal approached the Alps, he had forty-­six thousand soldiers at his command­ meaning that forty-eight thousand sol­diers had already been lost. For instance, the crossing of the river Ebro (today in Spain) had resulted in fourteen thousand losses, and the Pyrenees, twenty thou­sand. Losses were due not only to natural obstacles such as rivers and mountains, but also to numerous unexpected battles against local tribes along the way.

    "This gruesome impression is deeply intensified by looking at the diminishing flow that visualizes Napoleon's army in Russia. To this day, it is an excruciat­ing exercise to read eyewitness reports by soldiers who survived the retreat. Minard created his visualization more than fifty years after the campaign. It is a brilliant conceptual transfer: in apply­ing the flow method to a military cam­paign, Minard shifts his entire focus to a single variable: the number of people in the flow. This variable sees only one type of variation — a sharp and steady decline. It seems to have been this potent and poignant message that made these two maps (and particularly the Napoleon one) so successful in telling a story about the cataclysm of war."

     
  • Professor Elam

    Monday Sept 9 2019

    Welcome back CoB faculty,

    I hope your summer was enjoyable, and you are having a good start to the new semester. Please, follow the link below to your University Library newsletter.

     

    https://mailchi.mp/f7b20c8e50e5/cobfall2019

     

    Have a great day!

     

    Marina Narvaez

    Business Librarian

    Texas A&M University- San Antonio

    (210) 784-1510

     

  • Professor Elam

    Monday Sept 16 2019

    Recently we reviewed the concept of reserve currency, Smoot Hawley tariffs and the Bretton Woods 1944 agreement.

    In this post we introduce you to Chinese efforts to dominate trade in the Far East. By the way note the front page article on China weaker than most thought in today's WSJ.

    Asian Infrastructure investment Bank – Finance

    https://en.wikipedia.org/wiki/Asian_Infrastructure_Investment_Bank

    https://www.aiib.org/en/index.html

    China's New Silk Road – Transportation

    https://www.weforum.org/agenda/2017/06/china-new-silk-road-explainer/

    https://www.britannica.com/topic/Silk-Road-trade-route

    South China Sea – Spratley Islands

    https://thediplomat.com/2016/05/south-china-sea-who-claims-what-in-the-spratlys/

    https://en.wikipedia.org/wiki/Spratly_Islands_dispute

     

    Please read this for class discussion

     

     

     

  • Professor Elam

    Friday Sept 6, 2019

     

     

    China and the United States on Thursday agreed to hold high-level talks in early October in Washington, cheering investors hoping for a trade war thaw as new U.S. tariffs on Chinese consumer goods chip away at global growth.

    Reuters

     

    The DJIA rose over 400 points on that news. But markets have been rising and falling in a broad range on positive and then negative news on what might happen trade wise. And there is an entire month left until October. The most encouraging thing is the lack of Presidential tweets threatening this and that across our range of trading partners. The most reliable indicator is the advance decline line of the New York Stock Exchange index. This is simply a graph of the number of stocks advancing minus the number declining. It rose to a new high which is the technical reason for the market advances this week.

     

    The tariffs have replaced China with Mexico as our largest trading partner. No doubt Chinese leaders want to show something to their people that some progress is taking place. Still, it is hard to believe they won’t wait Trump out until the 2020 elections rather than agree to finally honor intellectual property rights. Until now they have trampled them, refusing to pay royalties on music and movies.

     

    Last week I mentioned that the refiners were worth watching. Indeed I am cautiously optimistic on this sector.   The refining ETF is CRAK. It is turning up as its i momentum indicator. But it really needs to take out $27.50-28 to turn the trend bullish.   Valero VLO is a better chart forming a second higher low since June. Since 2016 it rose from 44 to 120. It has given back half that gain now trading around $75. It is a well managed firm trading at a modest 12.77 price earnings ratio.   And the forward dividend is 4.69%, well more than the banks are paying.

     

    I also suggested looking at Cullen Frost Bank. Lower interest rates have beaten down bank share prices.   This past year Frost has fallen from 111.70 to 79.869, now at 83.25. If the stock market has corrected, it follow that yields on ten year treasuries should be advancing and indeed they are.   Surely we are as James Grant put it, at a 4,000 year low for interest rates.   Frost pays a 3.42% dividend and is quite profitable.  Our bottom line is to look for a low in interest rates leading to stronger bank stock prices. And in t turn, this should firm oil prices.

     

    Gold and silver have corrected a bit after a nice run from multi-year lows.   Let’s look for a good re-entry point here. The XAU index of gold miners is holding onto its recent gains.