Professor Elam

Accounting & Investing Info for San Antonio A & M

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  • Professor Elam

    Unfunded Liabilities

    Monday April 23, 2012 7:02 AM CST

    Off balance sheet unfunded liabilities continue to mount. Here is a story on how Kansas City is having to cover revenue shortfalls in the KC Power nad Light Development downtown. 

    Heard on the Street reports on the Multi Headed Pension Monster.Here multiple companies promise to fund pensions for various workers. A failure of one company means the others have to make up the difference. THe article suggests that Safeway is already $7.1 B short of its requirements, more than its market capitalization. Safeway of course claims the liability is only $1.88 B. The difference is the assumptions one makes about how much the fund will earn before required payouts begin. 

    The smart money bet of course is that Safeway is dead wrong, in the same way GM was wrong about its liabilities. 

    Meredith Whitney is slowly being proven right on her assertion of eventual widespread municipal and corporate  debt wores. 

     

     

  • Professor Elam

    Avon’s Not Calling on Facebook

    Monday April 23, 2012

    We noted that the original door to door sales firm of Fuller Brush took bankrutpcy just a few weeks back. Now Avon sales per representative have fallen 75% over the past ten years. The reason is internet shopping. Now Coty has an unsolicited bid to buy AVP. 

    This just makes it harder to press the case that AVP is worth more than the 23.25 offer Coty has made.

     

  • Professor Elam

    TAMUSA Students Attend SA Internal Audit Luncheon

    Wed nesday April 11, 2012

    A group of TAMUSA students were invited to the San Antonio Insitute of Internal Auditor Luncheon. Only UTSA and ourselves were on the invite list!  A three person panel from Audit Committees of various firms P1010057 held forth on the responsibilities of their committees. 

    Left to right we have Travis Case, Jeff Bledsoe from UT Health Science Center who organized the event, Ashley Craven, and Luis Martinez.

  • Professor Elam

    SA CPA Student Luncheon

    Friday April 20, 2012

    The annual student awards luncheon by SA CPA was held today at Oak Hills CC. 

    P4207212That's David, Remi, Laura, and Renee Foshee Tax  Instructor from left to right. 

     

     

     

     

     

     

     

     

    Shirley Peterson from Ridout Barret and Fred Timmons, TSCPA statewide President Elect. Fred volunteered to come to campus to discuss Texas CPA issues with our students. P4207193

    I made other new friends for our campus including our table sponsor, Steven Bankler. Steven is a CPA and a Certified in financial Forensics.  He indicated he would be interested in helping us fashion our courses in forensic accounting. 

    Eric Mack Executive Director of Financial Reporting for USAA Real Estate also expressed an interest in coming to campus. I am sure he would be a valuable resource on the latest in SEC compliance.

    So a good day for TAMUSA at SA CPA!

    Here is Renee Foshee with SA CPa Exec Director Jacqui Belcher.

    Here is P4207217

     

  • Professor Elam

    Law School Meltdown

    Friday April 20, 2012

    The next financial crisis will have its roots in student loan defaults. Law school ain't what it was 

    cracked up to be.   I suspect many of these people could find jobs but they would need to become assistant city attorneys i nowheresville USA. The problem is chasing a dream versus a realistic job. 

  • Professor Elam

    Another Ethics Scandal

    Thursday Apirl 19, 2012

    Do you know Rita Crundwell?  I didn't either until today but she is going go make the Rogues Gallery of Who Do you Trust in small town America. I find these things fascinating because I once had a serious fiduciary position with a small county. 

    Students are aware that I regularly preach that Internal Auditing is the fastest growing field in accounting. This is a case in point. Rita as the comptroller for a town with a budget of a mere $4.2 M. Yet she has apparently embezzled millions, a great deal since just 2006.

    This case fits all the classic internal audit questionnaire stats. She was discovered when she took a leave and someone else checked the books. Rule-enforce mandatory vacations. 

    Screen shot 2012-04-19 at 5.06.58 PM
    She lived an extravagant lifestyle far beyond her means. The town really believed she made money in the horse business?  Nobody makes money in the horse business, except perhaps the stable and feed store. Rule-observe lifestyles. 

    Everyone trusted her.  Rule-it's always an inside job. As I explained to one student in my office this semester, they are called con men (and women) because they get your confidence. 

    If any of my grad students are still looking for an audit failure or financial blow up, here is the latest. 

     

  • Professor Elam

    The Latest on instagram

    Thursday April 19, 2012

    Here is the latest on the estimate of FB and instagram valuations.

  • Professor Elam

    Grantham on Herding

    Thursday April 19, 2012 6:40 AM

    Last night in Intermed I I observed that a common complaint about American markets is the focus on short term results. I mentioned that San Antonio's own Sam Barshop the founder of La Qinta, complains of the same thing. As he observes one quarter is not a good measure of a national hotel chain.

     

    Fund managers runtogether. They are usually all doing the same thing. A week ago talking heads unanimously recommended Apple. This week Apple is finally correcting. Last week they all bought Apple, this week they all sold Apple. 

    Jeremy Grantham remarks on how this short term focused crowd behavior amplifies short term movements in prices, of everything. 

  • Professor Elam

    Text Analytics

    Thursday April 19, 2012

    Another concept demonstrated at the Socionomic Summit was the application of Text Analytics. One can examine the number of tweets at Twitter for trends in social mood. For exmple, this graph at right illustrates the number of articles discussing a Hard Landing in China. Key words can be examined in both Screen shot 2012-04-19 at 6.32.50 AM Twitter and  Google Searches.  The more often they appear the greater the interest in that topic. From that perspective both are methods of market feedback. 

  • Professor Elam

    822,751 Reasons to Oppose the Buffet Rule

    Thursday April 19, 2012

    I metioned the GSA Scandal in class last evening. The President believes those making money shold pay more taxes. For a look at what sending dollars to Washington buys one, click here.

    Be sure to leaf thru the Neely photo album. This makes the case that there is just no accountability in the Federal Government. 

    Individuals who make over a million dollars a years if allowed to keep their money, can and do support many worthwhile projects. Art museums, community theaters, and yes universities are supported by such contributions.

    And then there are innovative projects like Morgans Wonderland.

    As I remared, when it comes time to teach Ethcis in the spring, I always have new examples for the class!