Tata Motors bought Jaguar Land Rover from Ford.  Please read the  article about the difficulty Tata is having with the brand.

Sales are down, big time. So cash flow is less.

Tata paid off a lot of the $3 billion but now needs to invest a billion a year in R and D.

Tata is asking for another 15 days to pay suppliers, and apparently is asking shareholders to loan it some money.

When will Jag become profitable investors ask?  Good question, Jag has long been a name marque since winning the Lemans road race in the early 1950s but this is 2009. Ford never made money with it and Tata is dreaming that it can 'take sales away from BMW.'  Every car company that aspires to sports sedan success believes that, none have succeeded thus far. I just remembered that BMW itself bought the Rover Car comp;any in England and  lost billions before throwing in the towel. No British Car Company is owned by a Brit.

There are many accounting terms in the article, and in particular an analysis of cash flow. We are studying cash flow in cost managerial now.

Mahindra, is looking for a facility to manufacture its diesel line of pickups. 

While Chrysler and GM shutter dealers and plants, Mahindra is acquiring former dealership lots and shopping for a place to assemble its pickup.

Pickup, what in this crowded market in a downturn?  Well, Mahindra the tractor builder produces the only diesel powered truck smaller than a 3/4 ton, read big pickup. While the NUMMI plant in CA has ust come available, I suspect the various CA problems will make them wary it would me. 

Presently Mahindra is centered  in Georgia. 

Moral, one company distress is another's opportunity. Hello globalization. 

I find it very interesting that Mahindra sees a niche for a smaller diesel powered pickup while Toyota surely regrets though will never admit it, their decision to build a large gas powered truck. 

Since income taxes are indexed to the CPI, when we have deflation, income taxes in California can actually rise!  Yep, another horror story in the world's eighth largest economy.  

Deflation the collapse of prices is the opposite of inflation.  Real estate prices are collapsing, rents too,

there will be no inflation until the deflation ends.   Bernake has been printing and borrowing money trying to cause some inflation. So far it has not worked. 

Nevada is now running ads urging distressed Californians to flee their state. Many have. 

Barney Frank says it will happen, the FED will be audited. 

Now there is a headline for an accounting blog. I suspect the real reasons are that Ron Paul wants to show just how much power the FED has, independent of anyone. And Frank, well, that independence probably really irritates him, it should be his. 

We are studying financial ratios in managerial accounting. Jerry Flint of Forbes takes a look at 

auto inventories. If one divides inventory turnover into 365, one gets the number of days a car sits on the lot before it sells, a very important number in the auto business.

Flint reveals why GM and other Detroit auto makers have such long days on lot, versus the Japanese auto makers. The finance guys got it all wrong, just because you have to pay the workers it does not make sense to build cars that won't sell. 

The Ford Transit Connect  is a European van transport to the US. Much taller for more intereior space this is the latest salvo in what began with the Honda Element. Gee where is the VW Microbus of the 60s?  Ford is promoting the van over the internet, I had not seen one before this article. 

Meanwhile, expect a continued rise in crime. Cindy Sutton 

is accused of embezzling $1.1 M from Dallas based Accura Systems, not the car company. The owner noticed some irregularities. Auditors should always exhibit Professional Skepticism.

I have noted the interest in horror and the surreal, notably our fascination with Vampires in Twilight and True Blood. Expect a return of various Horror Movies. The aptly named Rob Zombie has directed Halloween II. 

It only rates two stars for no surprise excessive gore. My point is that the down market has like the 1930s moved horror genre mainstream again. 

Page One of the Dallas Morning News this Saturday pairs these two stories

Taliban expand Afghan Presence

NFL Says Video Board Can Stay Put –

The first is self explanatory , the second is about the scoreboard at the new Cowboys Stadium. IN Dallas the Cowboys are always a news staple. 

The point is that this supposed war ranks right with sports news. Obama plans, or says he plans, to send another 21,000 troops to Afghanistan as Eric Holder announces plans to investigate the CIA in Iraq. I suspect that that the Holder investigation is the equivalent of Walter Cronkite announcing on national tv that Viet Nam was lost. I expect an exit form Afghanistan next year. ……

THis is a copyright CNN article. But a darned good one. 

Why the federal deficit will raise taxes

• By Jeanne Sahadi, CNNMoney.com senior writer
• On Thursday August 27, 2009

A $9 trillion federal deficit over 10 years may be too hard to comprehend. But this part is easy: Such unwieldy amounts of debt could have an impact on Americans' bottom line one way or the other — if not tomorrow, then the day after.

The U.S. government has been spending a great deal more than it has been taking in, and it is on track to do so well beyond the next 10 years. It has been borrowing money to make all that spending possible and it has to pay the money back with interest. How, you ask? By borrowing more.

The solution is straightforward if unpleasant: Shy of finding a fairy willing to leave trillions under Uncle Sam's pillow, lawmakers will have to raise taxes and cut spending.

The more the country lives on a credit card, the more it makes itself beholden to the demands of its creditors — many of which are overseas. The danger is that buyers of U.S. debt could become concerned that the country is running too high a balance. If so, they will demand higher interest rates — thereby making the country's debt problem worse — or they'll put their money elsewhere.

At that point, things would get ugly.

"Taxes would rise to levels that would make a Scandinavian revolt. And the government would not be able to provide anything but the most basic public services. We would no longer be a great power (or even a mediocre one), and the social safety net would evaporate," tax policy expert and Syracuse University professor Len Burman wrote in a recent op-ed cheerfully titled "Catastrophic Budget Failure."

That's why acting sooner rather than later makes sense. But acting too soon could cause its own set of problems since the economy is only beginning to lick its wounds from a punishing recession.

Economists and tax experts, no matter their ideological position, agree raising taxes when the economy is down is self-defeating.

But as the economy finds a solid footing, the hard choices will have to be made.

"We need to do this in stages at the right time," said David Walker, former U.S. comptroller general, in a CNNMoney.com video.

Right now there is a lot of talk, but not a lot of planning, about how to address the situation.

In fact, President Obama is pledging to keep taxes low for most people.

For example, Obama has proposed keeping in place the 2001 and 2003 tax cuts for families making less than $250,000 (under $200,000 for individuals). The cuts are scheduled to expire in 2011.

A number of temporary tax relief measures, including the patch to protect the middle class from the Alternative Minimum Tax, are set to expire even sooner. And Obama has said he would like to keep many of those measures in place as well.

Experts say that's not going to cut it.

"Taxes are going up and they're going up for a lot more people than those making more than $250,000. Why? Math. The numbers don't come close to working," Walker said.

For instance, the president's proposal to raise taxes only on high-income families would raise an additional $600 billion over 10 years, said Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center.

That's not a lot when the government is staring at a 10-year deficit of $9 trillion. A 10-year deficit of that magnitude means the debt held by the public — the accumulation of all annual deficits over the decades — would reach 82% of gross domestic product come 2019. That's double the 41% recorded in 2008.

When lawmakers do decide to act, they will need to do more than just tinker with tax rates, according to Williams.

Tax experts have been calling for fundamental tax reform to make the system less complex. Plus, Williams said, Congress will likely need to seek out a new source of revenue beyond the income tax. One idea that has been talked about increasingly is a value-added tax, which is a tax on goods and services at every stage of production up to the point of sale.

A multi-pronged approach may work best because "no piece by itself is enough," Williams said. "There's a really big hole to fill and [lawmakers] are just talking about dollops."

Copyright © 2009 Cable News Network and Time Inc. and their affiliated companies. All Rights Reserved.

Alert  student Reni had a good post that a friend was already having second thoughts on her new car purchase, well sure enough, read on….interest in cars is already falling off given the number of Edmunds searches so we can expect car sales to shortly fall off, so as students in class have speculated,

this program just robbed future sales for today, what will they do next quarter?

No surprise, most students cannot accurately estimate what they will owe on students loans at graduation.

I suspect this is how schools have managed to raise tuition without much resistance, one one is writing a check to no one connects money wtih the event. And so we have no inelasticity of demand.

Take a look at what students estimate and what they owe.