Professor Elam

Accounting & Investing Info for San Antonio A & M

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  • Professor Elam

    Clint Hits Socionomic Pay Dirt

    A lot of people say John Wayne can't act, but who else can do what John Wayne does?
    Clint Eastwood in an interview promoting Thunderbolt and Lightfoot, 1974

    Gran Torino has done very very well at the box office. Its estimated $35 M cost, cheap by today's standards, has already returned several times that with $147M gross so far, and it just now got released to DVD. Clint says it is his acting farewell but then he said that about Million Dollar Baby and how many times do singers do their last tour?


    Eastwood is one of the movie industry's premier producers for two simple reasons. His movies come in at a low budget on budget, and he has his finger on the social pulse of what moviegoers want to see. 

    Gran Torino  is part The Shootist (John Wayne's last film), part Karate Kid, Josey Wales, Gunny Highway from Heartbreak Ridge, and finally draws on the civic involvement theme of High Noon and Open Range. In researching this piece I note that Don Siegel directed The Shootist, he also did, Dirty Harry and appeared in a cameo in Eastwood's Play Misty for Me.   

    I understand that on all his movie projects, Eastwood's most spoken phrase is, Next!  Asked about the higher cost of movies in the 1980s he remarked that for $35 M he could invade a third world country. It was no accident that he would use many of the same stock players in subsequent movies, they knew each other and they worked for reasonable salaries. He really came to the industry attention with Any Which Way but Loose which at the time was Universal's second biggest gross picture, after Jaws, gee. 

    Wayne featured Hollywood stars in his last film and what a cast. Jimmy Stewart, Richard Boone, Lauren Bacall, Ron Howard, Harry Morgan, and even Bill McKinney who featured in many Eastwood films. 

    The casting for Gran took place in Michigan and featured folks who had not acted before, well that will help with budget!  In fact I daresay the only person you will recognize is Eastwood. He is in for a piece of the gross I understand. Notice the contrast with Wayne's approach. The topic is immigration, Viet Namese are moving into the old neighborhood.  Eastwood moves from gruff Gunny Highway to benevolent Josey Wales as he ends up helping the neighbors he at first seems to disdain. His Walt Kowalski is pure Archie Bunker in his description of immigrants, nothing really intolerant, just his point of view. Eastwood has become a Hollywood darling after being ignored for decades, no wonder as his films have taken a decided leftward tilt. His protege teenager grouses that he has been had on a transmission repair and is a foot to which the job interviewer sympathizes. Victimhood pure and simple, the liberal playbook. It would have been just as easy to brag on a mechanic friend, but no…

    At any rate, low cost, on budget, touching on social trends, that's the ticket. I won't spoil the ending but it is straight from Open Range and High Noon with a considerable different twist. 

    Not many of us have that actor director gene still going strong at 79, next project, directing Morgan Freeman as Nelson Mandela, now that will definitely be a winner…..my guess, and the Oscar goes to…….

    PS one more thing, as I mentioned the plot is pulled from several other movies, what plot isn't, but 
    the character of the involved priest is right out of On the Waterfront,l played by Karl Malden who nags on Marlon Brando;s conscience right to the last scene, by the way great line by Brando on that subject

    To Brando – whatsa matter, don't  you have a conscience?
    Brando- I thought I'd live longer without one…..

    I will be adding this one to my list of movies with ethical themes

  • Professor Elam

    Dallas Foreclosures Hit New High

    Next, Alt A foreclosures. First it was sub primes, now folks losing jobs in the next category are undergoing foreclosures. 

    Still, we are in the rebound from the March lows in the stock market. I look for a pullback into July and then a rally into the fall in stocks. Expect social attitudes to improve with the administration of course taking credit. Then I suspect we will see another waterfall decline in stocks. The administration will not be taking credit for that…..

  • Professor Elam

    Printing The Way to Prosperity

    Anogther reason to learn financial markets is to be able to spot a fraud. When news reports surfaced this week that two guys had billions of treasury bonds in a suitcase, I knew it was a fraud and a fake. How?

    Having traded bonds in the 1980s I knew  T bonds do not exist any more in physical form. There are so many the government made them electronic issue, not paper bonds. Yet many on right wings blogs and tv shows, Glenn Beck for example, wanted to know what was going on. There is no substitute for knowing what you are doing…..

  • Professor Elam

    A Socionomic View Deja Vu Again

    Walter Hill directed then box office stars Charles Bronson and James Coburn in 1975's Hard Times.
    The movie portrayed a the Hard Times of the Depression.  Coburn was the promoter for bare knuckle fighter Charles Bronson. Ouch, what a way to make a living. Note the move came out in the middle of 1970s 'hard times.' It was the perfect reflection of the spirit of the audience. After an unexpected oil embargo the economy entered stagflation, unemployment coupled with inflation. A President was forced to resign. Viet Nam ended, badly. The idea that one might have to fight for an existence resonated with the audience. Well guess what.History repeats.

    College got you down, well head back east to Boogies' Wrestling Camp

    Try as I might I cannot find the article link on the Dallas Morning News site. It describes an ex Volvo Truck assembler, laid off, who is achieving his 'dream' at BWC.  He has, okay ladies don't say the blog lacks a feminine viewpoint, met his wife to be at the camp where her teenage son trains.

    Look back on the blog to my posts in the spring of 2008, I was commenting that the mood we turning much darker. I mentioned that The Dark Knight, tagline The City Has No Hope, was the biggest grossing movie. It has gone on to become the second biggest grossing movie of all time. clearly the dark message hits a note with audiences. Even then one student had already seen it twice at the theater.

    Meanwhile no holds barred fighting  has gone mainstream on pay for view, even Chuck Norris is in the game. His weird combo of family values, religion, and fight to the near death for fun is surely a strange mixture, but Chuck is a consistent money maker. Francis GodfatherCoppola is pretty much out of the movie business. Chuck is headed to the bank with WCL. Chuck has tuned into the national conscious.  Check out World Combat League.

    Please understand I make this post as an Observer of what is happening, I have no interest in witnessing a World Combat league anything or any boxing or wrestling match. To me this is the ultimate hopelessness, which is though, exactly what the word Depression is all about.

  • Professor Elam

    Gearhead Weekend

    Terry Box, auto writer for the Dallas News posted this review of the new Camaro.

    My comments on the Dallas RSS site appear below. In my vie. Okay so what has this got to do with management accounting. Well it's my blog and I can post what i want but

    we are studying value chains that lead to customer satisfaction. In fact it was the failure to do just that which gave toyota honda nissan the foothold it needed. Indeed Detroit did what it usually does letting the pony cars, small light well performing sport vehicles become overweight with behemoth cast iron monster engines by 1972. Amid the move to better emissions the entire muscle pony car era ended as quickly as it began. By 1969 the best idea Detroit could come up with was the 'smog pump' a belt drive air pump that put more air into the mix to better burn emissions. Honda invented the cvcc engine which met al requirements, with no air pump. the future was sealed with that one anecdotal engineering event. What does Deming say, improve forever and constantly this has become Toyota Lean Engineering. But on with my post.

    Terry

    only$35,835 eh?  As I recall at least in 1967-68 one could purchase that 327 Camaro with a four speed and even an air conditioner for one tenth this amount about $3600. This says a lot about what Washington has done for the dollar and for car design. 3900 pounds?  My RAV 4 SUV only weighs 3500!  I doubt anyone buying the car will remember that Chevy put the four 'gauges' back then in an impossible to read out of line of sight position, which is where they are now. Now honest if you had not known you had the 426 bhp instead of the 400, about five percent and I expect all at the top of the rpm range, would you have known.  The problem with car tests is that 0-60 and 1/4 mile  times do provide not a baseline but an upper line, that no one outside of car testers ever tries anyway, at elast not on a regular basis. This car had been built by 2007 so it was probably planned in 2005 way ahead of Barney Green Car Frank. As usual I think a much lighter platform with the 4.2 Liter dobule voerhead cam 285 bhp straight six would have been the better idea, esp for insurance purposes. And it might survive the bureaucrat chopping block of politically unacceptable vehicles.

    While articles like this extol the virtues of the high performance four speeds of that era, most existed in the press fleets for car magazines.  The far more prevalent item in that cost conscious era was what my friend had, a 1968 307 cid with the gosh awful three speed manual. Detroit's refusal to make the far more desirable four speed a standard item paved the way for Toyota et al to do just that, yes their weaker four cylinders required it and Chevy and Ford could 'get by' with the three speed bolstered by V 8 torque, but it was a truly horrible 3 speed tranny, no wonder so many switched so willing so quickly to alternatives. And that is the way it was.

    As usual Detroit is late to the party with what is now the wrong product for the times.  Whoops again….where is their Scion tc?  I doubt the cobalt supercharged will have the life expectancy of any of the Asian brands.

  • Professor Elam

    Your Portfolio continued

    Tina C made this post on the previous installment entitled Your Portfolio, this is a precise example of what I was describing. Clearly her company has embraced the Deming model.

    I just
    returned from a whirlwind business trip to Dallas for my company's
    annual meeting. For those of you not out in the job market (in your
    desired profession) yet, "be prepared" is very good advice. This
    company set out 5 years ago to double in size and revenue, they did.
    They plan to repeat in the next 5 years. While other firms are laying
    off or not offering full time postions to interns, this company is
    hiring and giving pay increases and manged to end its fiscal year with
    a nice positive bottom line.

    At the annual meeting this morning, there were some quotes from the
    former CEO of GE (I had been planning on visiting the GE website
    anyway), reference to a book (which I jotted the name down for my next
    book report) along with other references, visions and plans. Every one
    from interns to partners were mingling and talking (350 of us, soon to
    be 400 with the fall interns and new hires). It was like a constant
    test of knowledge, skill, tact and networking ability. A pop test where
    you do not know who might ask what question of you! It was enjoyable
    watching those who did well and almost painful watching those that
    fumbled. The partners were also noticing who mingled and who hung back
    in their comfort zone.

    I've also recently had the opportunity to visit with intern
    prospects from several different colleges both in Texas and from
    neighboring states. Only so many will be offered positions. Grades
    matter, references matter but being able to "talk the talk" and
    represent yourself with poise and self-confidence about your area of
    study goes much further than you could imagine.

    No matter what your field, communication (written, not texting, and
    oral communication), networking, knowing what is going on in the world
    around you could possibly make the difference in who gets the job and
    who doesn't.

  • Professor Elam

    Your Portfolio

    There is a point in requiring you to read books, write papers, and read the blog. I would suggest a major part of your college experience is the completion of something that will never appear on your transcript-your portfolio of completed projects.  By the way no one ever looked at my transcript other than to see that it was genuine. 

    Your degree will get you in a room, with other college grads that will have, no surprise, similar degrees. Yet 99% of you have only prepared to that point, okay now what. What will you say do write produce to differentiate yourself from everyone else. 

    Hence reading one book for all your classes, and planning to use the same book in the future does you little good. You will run out of book topics rather fast, and what if that is of no interest to the person interviewing you?  Writing well is a huge issue. You should be able to produce a binder of well written reports complete with graphs and tables to reflect your analytic ability. You should certainly be able to converse intelligently about the business world, hello blog. It is most interesting that the  most frequent comments revolve around shopping at Goodwill. As you can see there are next to no responses on the markets blog……What does that tell you about how well your education to date has prepared you to discuss markets?  Trust me there is a world of What they Don't Teach You in the MBA Program on the markets blog.  

    All of you will be exiting into the very worst job market in your lifetimes, really. Unemployment is near 10% nationally, well outside the DC beltway. Competition will be ferocious. Let's get ready…

  • Professor Elam

    Speaking of the Monetary Base

    Picture 8


    A student asked about teh monetary base in the 1890s while i do not have that here is what is happening now. Spare capacity to produce is much larger than in the 1970s.  Monetary and fiscal expansion is way higher. Yet there is not inflation, not yet. 

  • Professor Elam

    Do Not File Taxes, Move to Govt Post

    And now from hotair.com, would you believe the new White House Protocol Officer, a former Hillary staffer, has not filed her taxes?  Capricia Marshall managed to forget, for  two years no less.

    Yes it was the fault of the Post Office.

    Yes it was the fault of her accountant who did not bother to mention filing the return in that BIG binder of stuff…

    Trust me we accountants make it very clear the return needs to be filed and signed.

    And yes, the IRS did not assess late filing penalties.

    No you and I cannot get that deal.

    As Fox says, we report you decide.

  • Professor Elam

    Investments Chapter 12 Spiceland

    Chapter 12 deals with ways of classifying investments. There are two ways of looking at this.

    The first point of view is What do you own?  This leads to the classes of

    Held to Maturity – Debt

    versus the two equity categories of

    Available for Sale  AFS

    versus

    Trading Securities TS

    Both are marked to value at the end of the reporting period. AFS takes the difference to Other Comprehensive Income OCI, TS takes the difference to actual Net Income NI. So the differences in TS affect your earnings per share.

    The second point of view might be expressed as not what but HOW much do you own?

    If you own less than 20%, we will report dividends as dividends.

    If you own 20-50% you are said to exercise significant influence, we use the equity method. Income gains or losses are recroded as our own gains and losses. Dividends are recorded as a decrease in the value of the investment carried on the books.