Professor Elam

Accounting & Investing Info for San Antonio A & M

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  • Professor Elam

    WMT Lays off 11,200

    Monday Jan 25, 2010

    Wal Mart thru Sams Club will lay off 11,200 promotional workers. But what caught my eye was the corporate speak used to justify it.

    "We look at this as an investment in the in-club experience," Cornell said in an interview. "This is not a cost-cutting move for us in the short term. We really hope it will be cost neutral for our operation. It's an investment in building loyalty, enhancing the member experience and driving future growth."

    Sams will outsource to companies that provide in store people to offer samples. But, we study current liabilities in intermediate accounting. Employers must match social security, medicaid, and pay unemployment taxes on employees. As the ranks of unemployed grow, states will be looking for employers who still have people employed to replenish the unemployment funds. Seems to me that WMT sees that coming. My point is that government mandates have made employees and expensive liability, hence we see more 'outsourcing' in an effort to avoid what is increasingly viewed as unlimited employee liability. 

  • Professor Elam

    San Antonio Museums, How’s This for Irony?

    Sunday Jan 24, 2010

    Yesterday we remarked that the Express News has expressed serious concern about the viability not to mention fiscal responsibility of the Museo Alameda. 

    I suggested in my Nov 23, 2009 post that there are multiple museums in San Antonio that would have served a Latin Culture purpose just as well, and sure enough today's Express News in the SA Life Section makes that point. The Institute of Texan Culture literally sits in the Shadow of the Tower of the Americas, built for the 1968 Hemisfair here. It currently features an exhibit Race Are We so Different? My point being that this is a successful museum doing what museums are supposed to do, offer exhibits about culture!

    Picture 2  At left is Luis Jimenez's 1997 lithograph El Corazon Lowrider, a gift from UTSA President Romo to the McNay Museum. Note what the Mcnay Curator of Prints and Drawings has to say. "We've become more and more active in colecting Mexican American are.  It's a logicla step for us becasuee we have such a rich collection of Mexican art and contemporary graphics."

    Well there you have it, Latin Culture is alive and well at multiple locations in SA. 

    Now, gearhead that I am , it is always interesting when artists stay 'true' to the original. Let's examine this lowrider for a moment. It appears to be a 1957 Buick Special or Super, the lower model in the line evidenced by only three not four portholes on the front fender. But it is a true hardtop without the center post between the side windows. The owner has installed roll and tuck upholstery, a favorite of 1950s hot rodders. Note the 'Baby Moon' hubcaps.  Dean Moon in Souther California established Moon Speed Equipment in 1950. His products achieved icon status, as evidenced by their inclusion in this painting. those are 'lake pipes' exiting under the front fenders, a way to make a statement about the exhaust system.   And of course the owner has topped all this off in a non factory color scheme, what is that Kandy Kolored Kranberry maybe?

    Those students seeking to learn more about this era might do well to read the Tom Wolfe's classic,

    The Kandy Kolored Tangerine Flake Streamline Baby. This was one of the first essays that catapulted Wolfe to the top as the American writer of the last half century. It tells the story of the Southern California Hot Rod Culture. 

  • Professor Elam

    Museo Alameda Update

    Sat Jan 23, 2010

    We brought you the story on Museo Alameda November 23, 2009. This is a Latin themed Museum in the Market Square. Market Square is an area the local govt has tried to promote, albeit unsuccessfully. Now the lead editorial in today's Express News is expressing understandable concern about the project. it is $1.5 M in debt, operating in the read, and used money from the Ford Foundation intended for a charter school for operating expenses. The latter sounds like at least a violation of civil law to this writer but….

    Our point was that initial expectations for 400,000 annual attendance were grossly above the first year results. Subsequent years have proved even worse. As I say, it is difficult to stop a bad idea cloaked in good intentions, this was one of them. With multiple museums already in existence, why not a Latin American exhibit at one of them?  This is even harder to understand when the successful Museum of the Americas already exists.

    All of this speaks to the importance of internal auditing. Once targets and goals are set, it is imperative to re visit them and determine if the plan is on target, If not, can the plan be re adjusted or do we need an entirely new plan?  Clearly that was not done here. But since this is a government project, do we think anyone will be held accountable?

  • Professor Elam

    Haiti’s Debt Burden

    Friday January 21, 2010

    I have advocated a business history course but it is not to be with the new 120 hour limitation. Here is a good example of why history is important. The French were driven out of Haiti with a slave led rebellion in 1791, rebellion was sweeping the globe. The French dominated Haiti with cruel treatment to the slaves. Sugar was the commodity. After the French were driven out they returned with warships demanding a crushing reparations. That debt has still not been paid!

    This is one reason that the country, as well as crooked leaders, has never recovered. It will be interesting to see what France has to offer now…

  • Professor Elam

    Pastina Template

    Friday Jan 22 2010

    Intermediate Accounting Classes

    As you know Blackboard has not been accessible to all of you yet, I do not know when it will be.

    Send me an e mail and I will e mail you the pastina template with the questions for monday

    dennis.elam@tamuk.edu

    I do not normally use the blog for such announcements but gee it sure is nice to have an alternate communication route when others fail. 

  • Professor Elam

    Visions of the Future

    Jan 21 2009 Thursday

    Most futuristic films seems to take an apocalyptic view of what is going to happen, which is to say disaster. 

    My wife wants to see The Book  of Eli, I read the reviews, have not seen it yet, but it got me to thinking about the socionomic implications of such films. So here goes. 

    Socionomics is an emerging social science. It holds that popular culture is determined outside of everyday events, exogenously, and that change in mood determines what happens in society. 

    Historic note, most superheroes are created in times of stress and trouble. The original Wanderer occurred in Greek Mythology, Ulysses. The British created Beowulf as their hero in a nation that had none at the time. Superman and Batman appeared in the 1930s, another era of great personal difficulty.  The modern stories of Luke Skywalker in Star Wars and Harry Potter also feature orphans fighting overwhelming odds. Lately this has switched to heroines involved with vampires, Twilight and True  Blood. 

    The original Wanderer movie was the television series Kung Fu starring David Carradine. The series debuted in 1972. This is important as that was the high for the transition period from 1966-1972 in the Dow Jones at 1,050. The series was perfectly in tune with what would happen for the next ten years. Carradine played a wandering Shaolin monk, seeking to avoid conflict but always able to handle it when it occurred. Perhaps he was the perfect avatar for an investor or anyone else wandering the American and world landscape seeking some reason in what became an up and down decade of economic stagnation. 

    Another landmark film of the time and prescient of what was about to happen was 1971's Dirty Harry. 

    Clint Eastwood plays a gold shield San Francisco detective wandering what has become a landscape where criminals seem to roam free to victimize innocents. The film was based on the Zodiac Killer a serial murderer in that same area. Dirty Harry however is no Buddhist monk. 

    By the end of the decade America was really coming apart with double digit interest rates and a second oil embargo. And so the stage was set for a truly apocalyptic story, Mad Max starring Mel Gibson. An Australian creation, Gibson plays a policeman whose wife is killed by terrorist criminals. Playing on the energy crisis, things quickly dissolve into complete anarchy where the sole focus is on trying to find gasoline or some energy supply as roving bands of terrorists return the world to a mid evil mindset. Anarchy reigns. 

    Hollywood answered with Escape from New York in 1981. When it comes to sci fi horror no one does it much better than John Carpenter did (The Fog, Halloween). Kurt  Russell plays, once again, a lone avenger dropped into an alien land, which happens to be New York City turned into a giant free for all prison camp. NYC had spent the decade reeling from criminal activity and financial crisis after all. Reviews list this as the ideal B movie, no wonder, Kurt Russell is surely the premier B movie actor of our time (Captain Ron is my particular favorite). 

    Fifteen years later Russell reprises the role as Snake Plissken but we move to yes Escape from LA. 

    But wait, what was the social crisis, we need that to have the audience resonate with the film? Well the closest one could come was the Clinton Lewinsky Affair which turned out not to be so much despite a failed impeachment attempt. As a result, the Movie Industry termed it a bomb as it did not make a lot of money, at the time. But read the review at the link now, gee the young reviewer loves it, why, because now it makes perfect sense. Once again we have the lone avenger wandering an alien landscape fraught with danger, see the connection?  Two financial meltdowns, wars all over the mid East, tsunami, earthquake, you name it, are we all Snake Plissken now?  The reviewer is clamoring for another movie. It has been a while since Goldie Hawn (real life wife of Kurt)  put on her producer hat but the time is perfect for the return of the Snake, Goldie are you listening?

    Picture 3  All of which takes us to the film that did get made, The Book of Eli. Since Goldie did not make shall we call it Escape from Detroit, Denzell Washington stars as the wanderer in an Alien Landscape. Same exact story, same ability to whip all comers and handle whatever happens. So far audiences have not really made the connection, perhaps the improvement in markets since last March has people less worried about their futures, I suspect that is the case. Had the film hit at the March 2009 lows, it would have done better, let's see if it hits the rental lists by November of this year. 

  • Professor Elam

    Apple Tablet Details

    The speed of technology that can actually be used is accelerating. Interestingly this happened in previous periods of economic stagnation, the 1930s, just as it is happening now in this period. The 1930s saw commercial passenger aviation begin with the DC 3, already underway with the Ford Tri Motor. Color movies improved, and television was unveiled though it would take more work on the vacuum tube for it to become a commercial success after WW II, but I digress. 

    Picture 2 Apple will be unveiling its Tablet this next week.

    While no tablet or e Reader has had the success its creators wanted thus far, this one may be different. Apple has taken dead aim at the E book market as well as the larger failing market for subscription services, magazines and newspapers. iTunes rescued the music industry with its engaging ability allowing users to selectively pick and choose their music song by song. indications are that the Tablet will allow users to do the same with selected media. This comes as newspaper chains are literally filing banruptcy, it cannot happen too soon for them. 

    The subscriptions will no doubt happen through iTunes. The rate of change is accelerating before our eyes. This promises to be huge in that this will be the first tablet to offer color and internet capability.   

    I will be writing an article for our conference Southwest Learning and Technology on this topic. 

  • Professor Elam

    Chile Tilts Right, and Wins

    Chile is a different South American country. One hundred years ago it sought European settlers, and got them. Now Chile is managing its earnings from soaring copper prices, and improving average income all the time. Read this article to learn that it is not just Che t shirts and death to America in South America.

    Free markets bring wealth and encourage initiative. Hugo Chavez is already devaluing his currency. Will the rest of South America take notice?

  • Professor Elam

    Marc Faber on Sovereign Debt world

    Tuesday Jan 19 2009 

     Marc Faber lives in Hong Kong and travels the world. There are many forecasting an imminent collapse in the US Dollar. Well it has to collapse against something, Other currencies around the world are in much worse shape than the US Buck. We have been posting about this but to re cap

    PIGS are Portugal Italy Greece Spain, google those countries and debt and read the articles. The trouble with the European Union is that it has requirements about what a country must do with budget and currency. But there is not much enforcement. Will those countries take harsh measures of scaling back spending and debt?  I doubt it. 

    Meanwhile look at that chart of the Japanese stock market in my other posts today. Japan as Mish points out, has an aging population that is not being replaced. Russia has the same problem where they are paying women to have babies, really. 

    The cycle goes like this. Governments and business start taking more risks and financing the risk with debt. Eventually bubbles in asset sectors, like housing in the US emerge. A bubble is irrational exuberance in any investment sector, the price is unsustainable. Asset values collapse ala our housing market, but the debt remains. In the meantime governments have made unsustainable promises to the population, read fat pensions for govt employees at the state and city level here. In an effort to make it work, the governments print even more money, which is precisely what Obama is doing here following Bush doing the same thing. Now governments are attempting to tax banks and brokers to regain some money but that hardly fixes a system where banks and brokers are more gambling lottery houses than financial institutions. This leads to asset deflation which is where the US is now. Look around you, Burger King is advertising its $1 hamburger is superior to the MCD $1 hamburger. Prices have not been there since the 1970s. Pizza Hut is advertising ten bucks for whatever you want, just buy something. That friends is deflation. Yes the government money has buoyed speculation but it has not put anyone back to work. Discontent is on display in MA today. 

    Eventually all this money printing leads to hyper inflation, the sort of thing that brought a Hitler to power in post WW I Germany. Mood turns horribly negative which allows a monster like that to gain power. Hyper inflation leads to the govt finding another enemy for the people which is precisely what Hitler did, starting WW II. 

    Along the way we have massive speculation in currencies and markets, crashes and rallies, and finally the ultimate negative human emotion, war. Hugo Chavez is continually talking war, his country is already falling into the hyperinflation category, he devalued the currency this past month. 

    Okay you have your road map. 

  • Professor Elam

    CITI and the Prince

    Tuesday Jan 19, 2009

    Citibank has one of the wealthiest investors in the world telling it this is the year, or else.

    Prince Alwaleed Bin Talal gave $600 M of C stock back to the company. While this increased the retained earnings I am not sure it says much positive. C is trading for $3.60 down from the $52 when the Prince started buying. The Prince has waited far too long to demand changes. Most other large bank stocks have rebounded, C has not despite TARP et al.