Professor Elam

Accounting & Investing Info for San Antonio A & M

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  • Professor Elam

    Whyme.com

    If you saw Steve Martin as the bedraggled traveler in Trains Planes and Automobiles you have an inkling of my mental state in trying to pay my apartment rent. Most of you are aware that I am renting an apt while trying to sell my home in Dallas, TX.  We study Deming's Total Quality Management System in Managerial Accounting. After being hung up on multiple times and not being able to pay my rent on on line today, I sent this e mail, and yes I put whyme.com on the subject line. As the saying goes, everyone can serve as an example, even if a bad one…….

    The Hollows

    7520 Potranco
    thursday July 2

    I am trying without success to pay my rent. Your office was not open the last fwo days when I leave for work before 9 AM or when I return after six.  considering this is a complex for working class families this seems an odd choice of bankers hours for your staff. Most people need to be at work by 8 AM, not The Hollows staff though….

    The former pay slot on the office is now literally screwed shut, so no luck when I tried to deposit the check the last few days. 

    The supposed on line system will only let me pay the water bill which I paid. Who would design a system that prevents the person paying from entering an amount of money, well you managed it!

    I have called at least twice today. When I explained the problem I was told I had not returned a lease extension supposedly put on my door June 15. Well what have you been waiting for?  the extension was to July 31, I guess another month of doing nothing on your part and it will not matter eh?  I get all sorts of things on my door, pizza coupons, chinese take out coupons, etc, frankly I do not pay them any attention and toss most in the trash, perhaps I did that with this lease extension, who knows?  Incredibly your position is that it is my fault you will not let me pay you. I explained that I am in Dallas, TX, which is why I tried to leave a check AGAIN this morning when of course your office was closed

    Anyway the gal on the phone, this was about 1:30 PM said I would be able to pay on line later this afternoon.  No luck it still shows the water bill.

    I am doing everything  imaginable to pay you but am being blocked at every effort. On my last phone call at 4:15 this afternoon July 2 I was put on hold and then disconnected. 

    Again I will take a very dim view of being charged a late fee as hard as I have tried to pay you. 

    I do not have a wife, girl  friend, boy friend, dog, cat, fish or other living creature in my apartment. I neither drink nor smoke. I have paid everything on time except for the first month. that month you intentionally waited until you knew I had forgotten to pay the rent, gee it happens to people with paid for homes, and THEN you sent me a dun for the rent including of course the late fee.  I am 

    Struggling to pay in Dallas, which I would guess is more than a few of your renters are doing in San Antonio

    You can call my cell at 972 835 7555, go ahead I open before 8 and answer after 6.

    If nothing else this will serve as an example for my college students at SA A & M on how not to handle a customer.

    Dennis Elam

  • Professor Elam

    Entertaining the Masses

    P T Barnum  of circus fame was all about entertaining the masses. This is not necessarily done with high brow entertainment, think MTV. Gene Simmons was an ex high school teacher, he started KISS a music group with outrageous make up.  I have no idea if they had any music talent, I doubt it, but he is not teaching high school any more….

    In my lifetime a lot of promoters have taken a form of entertainment that was languishing and turned it into a real industry.  NASCAR, wrestling, and pro football come to mind. Pro football was a near amateur sport in the 1930s and 40s. It did not have near the following of baseball. Finally Pete Rozell re did the gate split and draft so the weaker teams had money to compete.  Bingo, a new genre was born. 

    Wrestling is another former low brow sort of sport that became really big time. Yes the 40s and 50s may have been some golden age of wrestling but no one was making money like they are now. 

    Managerial accounting and the study of business ought to be about innovation, sadly it is not. I have proposed making DESIGN a major part of an MBA program. 

    For example.  would you have thought of American Gladiators?  They guy that did has made a lot of money. 

    How about the Monster Truck circuit?  Yeah those ridiculous 'trucks' that look like giant tonka toys and sort of jump around inside arena well when they are not rolling over. 

    NASCAR was a bunch of good ole boys racing their cars on weekends, yes there was factory participation but finally someone got serious after Bill France got things going and REALLY made it big time.   By the way a lot of race car teams are now looking for sponsors amid the recession. 
    Honda has abandoned Formula I and their $300 M budget for it. 

    But what will be the next big show after wrestling, gladiators, roller derby?  Figure that out and you will not need to worry about working for someone else…..

    Or follow the trends. I bought a bicycle so I could cycle from work to grad school to finish my MBA at UT, the bicycle was the only way, too far to walk, no where to park. And so following the trends, 
    Trek and Cannondale both started in the US in the 1970s, now they are large corporations. 

    But none of this is possible without budgets and computing break even and target profit, our next areas of study in this managerial accounting.

    Not long ago the Dallas Cowboys were for sale for $50M Tom Landry seemingly had lost his touch and talked about a five year re building program. Ross Perot had the money but replied, show me how it makes money. Ross had no vision,  Jerry Jones however did have vision.  Today one could not buy the Cowboys for $50M.  Jones hired a new coach, won the super bowl and never looked back. While team fortunes have declined since Jimmy Smith left as coach, the new stadium just opened and will host the 2011 Super Bowl. 

    A few years back I read of an enterprising gal that attached small diamonds to the back pocket of some 'designer jeans.' They quickly sold out at what was then a high price of $65 a copy. Now that is innovation. 

    Billy Mays achieved success for his clients by creating a whole new genre of advertising on cable tv. 

    Well see what I mean by innovation?

  • Professor Elam

    Former Latin Presidents Call for Legalization

    An alert student posted this lnk

    The operative quote is, 'the policy is based on fear not results.'

    No kidding the best thing I ever heard Vince Fox say.

  • Professor Elam

    Weekly Column

    Dennis
    Elam

    June
    30, 2009

    Word
    count 629

     

    Mid Year Update

     

    World
    governments are proclaiming that for the first time in history, they have
    changed the natural order of human events. Intervention works!      The better view is that markets are
    emotionally exhausted after a brief snap back recovery. The next moves lie
    ahead this fall. Let’s take a look at where we are now.

    Texas
    has made some big bets on globalization. The Dallas Logistics Hub, the Port of
    San Antonio and Houston all assume an ever larger inflow of goods. This inflow
    would be so large that there is literally no place to store goods short term.      Huge warehouses have been constructed,
    just for stuff we have not had time to buy yet! That assumption, ahem, is being
    challenged.       The Dow
    Transportation Index peaked at 3458.20 May 7. Until the ‘Trannnies’ better that
    number, the stock markets are subject to correction.      The complacency in the markets with the pullback in the
    Transports suggests a correction or price decline      in July.

    Longer
    term interest rates are rising, and fast.     
    Even the short end of maturities such as the five and two years notes
    are seeing increases. For the near term, rates have fallen a bit. This makes a
    stock sell off a bit more likely. Money is hiding in Treasury securities, out
    of stock market danger. But ten year yields have doubled from 2.2 to 4% this
    year. Mortgage rates spring from the ten year note so there will be no relief
    for the sub prime borrowers. The FED effort to hold rates by buying bonds is
    the proverbial finger in the dike, the ocean lies on the other side. Rates will
    be moving sharply higher in the next few months.

    I
    suspected oil prices would pull back to the $55-60 level.       That has not happened but neither
    have prices vaulted the $75 level. This is tempering our view for higher
    prices. The energy services stocks are stalled here. This has been more a
    reflex bounce in price than a surge in demand. Grousing over gasoline prices
    has begunm again. Government meddling has made fence sitting a new past time.
    Nuclear and coal, realistic alternatives sit neglected while Washington tilts
    at windmills.       That coupled
    with the reality of higher taxes is not prodding anyone to do more oilfield
    work.      Cap and trade passed the
    House 219-212 with the help of seven Republicans, Michael Steele where are you?

    Gold
    frustrates.      The 50 week moving
    average is $873. Save for the sell off last summer fall, it has moved sideways
    since January of 2008.      Mining
    shares had a huge rally from the fall, the XAU index of gold stocks up from 65
    to 160 and now, well, on the fence like other stocks.

    Texas
    and the non union southeast United States are weathering this financial storm
    much better than other parts of the country. California has set the pace for
    social trends all our lives.      It
    continues to do so but now in a decidedly negative direction. Voters rejected a
    tax increase, the legislature will not cut spending. Will Washington DC bail
    out Sacramento?      As Sacramento
    returns IOUs for tax refunds we wait and see.      GM is one thing but a direct bailout to irresponsible
    governments will have them all standing in line.      How nay blue states can Obama save? How long would the rest
    of us support that irresponsibility? Indeed it would be our tax dollars not
    theirs, keeping the California afloat.     
     Can the few support the
    many?

     

    So
    near term we look for a stock pullback.     
    That will test the market resolve. Meanwhile watch the  Transports and the  3458.20 high water mark. Until we better
    that number, do not expect oil to better $75.

     

    More Dennis Elam available
    at http://www.professorelam.typepad.com/markets

  • Professor Elam

    Art and Culture Update My Weekly Rant

    Contemporary Art Month CAM will move from July to March, good thinking, let's get out of the heat.

    I read a good bit of The Story of Art over spring break. Art History is the history of a civilization and how well it comes to depict itself. This simple fact seems to be lost on  art education courses that require one to memorize the names and creators of art thereby boring everyone to death. What CAM needs is the integration of art and design to a profitable outcome. Just hanging a picture on the wall is not an outcome. 

    Robert Rivard Page 5B reports that in 2001 part of the River was weed choked. Now what eight years later, it is beyond what Mayor Peak back then imagined. Well I would hope!

    What on earth does the street, parks dept at the City and County do all day long?  What do all the volunteers in SA do? Eight years, we won WW II in four!

    'The winding meander of the River is largely gone'  Well how did THAT happen with the Sierra Club on the watch. If we can mow all the parks in SA you are telling me we cannot control the weeds on a stretch of meandering river?  Gee how on earth did Mission San Jose ever get off the ground in 1550?

    Now here is the best part, again I am not making this up

    'Three years from now, a short time for public works projects, (now what was WW II but a public works project) nature will take over, bird life, butterflies, kayakers,

    in short we will be back to 1550 when Mission San Jose got off the ground. 

    Good grief, these sorts of time lines are ridiculous IF the citizens really wanted this to happen. 
    How about the 15,000 Spurs fans (typical attendance at ONE game)  gathering on the banks and clearing weeds for a few hours, I bet that would unchoke a few things….

    Okay I feel like some sort of academic Lewis Black.. your comments?

  • Professor Elam

    Weekend Update

    From the SA newspaper

    Assasins have killed more than 11,000 people amid Mexico's 30 month campaign against organzied crime.

    The this unbelievable comment about a 30 year old priest shot in the back this past week. 

    This is the  beginning an indication that they (the gangsters) do not respect anything. Comment by another priest

    The beginning, what about the 11,000? There is no real legal system in Mexico, judges are regularly bribed which is why the outlaws operate so brazenly, they know nothing will happen to them. Apparently the drug trade is everything it is touted to be in the movies, one gets filthy stinking rich if one lives thru the ordeal. 

    Meanwhile in Afghan we have given up on whatever the last plan was to squash the opium trade, Let's see, you and I are Afghans, we can grow opium or pistachio nuts, what shall we do….

    But I digress. We should be focused on Mexico.   Legalizing at least marijuana as FDR repealed Prohibition would be a start, unless one takes the money out of the drug trade, no telling how high the body count will rise. And of course that would be the real way to defeat the taliban in Afghan, take away the money.   Does anyone really think the Mexican govt will dissuade the murderers of 11,000- people?

    The population of Mexico is expected to rise from the current 45 M to much higher levels. THere is not an existing economic structure to support almost any population increase. 

    WE cannot hope to build an economy in a country brutalized by open warfare with no real legal system. 

    OH, your tax dollars at work dept….
    The governors of Tx, Az, CA NMx want help on the border
    Gates at the Penatgon does not want a permanent military on the border.
    Napolitano at Homeland Security requested Nat Guard when Gov of AZ and now she disagrees with Gates
    Meanwhile Obama wants Congress to spend $250 M to send troops while saying he does not 'want to militarize the border.' Folks I am not making this stuff up, see page 16A in the paper today.

    Anyway, the goal of NAFTA was a free trade zone in the Americas which if you look at Laredo has increased trade. But hard to see how things are going to work out at this rate, I am not planning any trips to Mexico, are you?  Would you locate a manufacturing business in Mexico, don't worry it is just the outlaws killing outlaws…..

    I report, you decide. 

     

  • Professor Elam

    Long Term Capital Management

    Scholes was the creator of the now famous Black Shcoles option pricing model. 

    Ironically he was a principal in Long Term Capital Management. 
    LTCM went bust. Greenspan thought he had to rescue it in 1998, he Summers and Rubin ended up on the cover of Time as three who saved the world. As someone noted, had they let it go broke,  it would have been an early warning that this sort of nonsense will not be tolerated, it might have put the brakes on Lehman et a. But alas. This article gives some insight as to the folly of LTCM> 

  • Professor Elam

    Hydrogen Fuel, get the Checkbook

    Alert student Rani Lerma submitted this link on hydrogen autos. 

    This is the first I have read of converting a piston engine to hydrogen. Lots of vehicles run on propane which is a clean carbon gas. 

     Carbon is the fourth most abundant chemical element in the universe by mass after hydrogen, helium, and oxygen.

    THe idea of taxing carbon as though it were some sort of penalty is as absurd as taxing sunlight yet it passed in the House Friday 219-212. This can only raise all sorts of costs for everyone in a recession brining ever more govt meddling in the economy in the never ending search for more tax revenue. 

  • Professor Elam

    Political Science on Display

    I got this e mail from a friend and cannot verify it but….whether this is true I do not know but it reflects a mindset, at this point an electric car makes no sense, the energy is produced by carbon fuel to re charge the battery anyway, the battery weighs too much, it takes too long to re charge unlike gasoline, there are no re charging stations, the environmental damage from making and disposing of all those batteries is horrendous, this reflects the idea that if it does not make noise it must be Okay, you can't see the pollution since it came thru the wire to re charge the car. Electric cars also reflect a big city east coast mindset where five miles is a huge distance, try driving from here to San angelo in an electric car…….

    (From a senior level Chrysler person) 
      
    Monday morning I attended a breakfast meeting where the speaker/guest 
    was David E. Cole, Chairman Center for Automotive Research (CAR). You have all likely heard CAR quoted, or referred to in the auto industry 
    news lately. 

      

    Mr. Cole, who is an engineer by training, told many stories of the 
    difficulty of working with the folks that the Obama administration has 
    sent to save the auto industry. There have been many meetings where a 
    30+ year experience automotive expert has to listen to a newcomer to the 
    industry, someone with zero manufacturing experience, zero auto industry 
    experience, zero business experience, zero finance experience, and zero 
    engineering experience, tell them how to run their business. 

      

    My favorite story is as follows: 

      

    There was a team of Obama people speaking to Mr. Cole (Engineer, 
    automotive experience 40+ years, Chairman of CAR). They were explaining 
    to Mr. Cole that the auto companies needed to make a car that was 
    electric and liquid natural gas (LNG) with enough combined fuel to go 
    500 miles so we wouldn't "need" so many gas stations (A whole other 
    topic). They were quoting BTU's of LNG and battery life that they had 
    looked up on some website. 

      

    Mr. Cole explained that to do this you would need a trunk FULL of 
    batteries and a LNG tank as big as a car to make that happen and that 
    there were problems related to the laws of physics that prevented them 
    from… 

      

    The Obama person interrupted and said (and I am quoting here) "These 
    laws of physics? Who's rules are those, we need to change that. (Some of 
    the others wrote down the law name so they could look it up) We have the 
    congress and the administration. We can repeal that law, amend it, or 
    use an executive order to get rid of that problem. That's why we are 
    here, to fix these sort of issues". 

  • Professor Elam

    Rock ‘n Roll

    While the media is all ga ga over Michael Jackson, let me bring a couple of guys to your attention that deserve this sort of attention. 

    Little Richard perhaps rightfully claims to have invented rock 'n roll.  He still appears in commercials today as a matter of fact. 

    INterestingly as I looked this up the Rock and Roll Hall of Fame is divided on Little Richard and 
    Chuck Berry.  As one anthology remarked, by the end of the 1950s only Chuck and Little Richard remained true to their roots. The others had morphed into something that would appeal to the larger masses without the hard driving six beats to the bar of Good Golly Miss Molly or Maybelline. it was this same born in the south, yes black rock and roll that inspired Jerry Lee Lewis, Whole Lotta Shakin Goin On. 

    Before all this true class acts like Nat King Cole, who had his own television show in the early 1050s, Count Bassie, Duke Ellington, and Louis Armstrong delighted audiences for decades….

    Which led to Bill Cosby, Richard Pryor, well we will save that for another time. 

    A high school counselor in Dallas asked me if we offered a music major, nope I replied, too bad he said, that might actually interest the students. 

    Well I cannot construct a music hall but we could have a course on Music and the American Culture, now there's history course for you, something for everyone, a carnival tonite, what do you think?  Take a look at the links above, no better yet, go to iTunes and listen to the first few bars of Good Golly Miss Molly and Maybelline…..everyone wants to come to America, no one wants to immigrate to the Mid East, every hear their version of a pop tune? America has exported its culture the world over, it is on display in the streets of Tehran as I write, yearning to be free…..an Iranian Woodstock, dream on. 

    No wonder rock ' roll was branded as dangerous when introduced to America, it is, gets toes to tapping and finger popping, hmm, it is all about an alternate method of expression, after you listen to the tunes I mentioned, try what it replaced on the charts, Shrimp Boats are a Comin, hear the difference?