Carl Perkins may have invented Rock A Billy music but Lil Bit and the Customatics are carrying the torch right here in San Antonio.   Sunday evening at Floore Country Store they ran the gamut from 

But the real award was delivered by the Sunday Evening Dance Crowd.  Couples changed partners and enjoyed the beat of rock n roll interspersed with ballads like Boots are Made for Walkin.

The Governator has hired the LA City Comptroller to oversee the Federal money coming to Caliornia, good idea. No doubt he has watched the bankers et al unable to account for where the money went and does not want to be in that situation.
Here is another example of how the economy, at its worst, generates jobs for accountants. 

The Editor of Motor Trend describes the GM takeover as pragmatism not socialism.

Look back to see my comments on how no one seems to flinch when the US dicates who should run entire countries. Yet the critics that support intervention in countries around the world are upset that the US is actually trying to improve a company here in  our own country. Angus is an Australian by birth and brings a good perspective on the problem.

Maria Bartiromo talks with Bob Nardelli about Chrysler and FIAT.

Jerry Flint on why Rick Waggoner had to go.

Flint asks a good question, how did the colorless successor  to Waggoner, Fritz Henderson,  ever become CEO?  David E. Davis wrote a column for Winding Road a couple of years back though I cannot find it at the moment. He observed that GM had let thousands of employees go but there was no evidence that they had retained the right people, so true. He went on to observe that large corporations are cursed with the sort of hangers on that seem to stay put no matter what. They never commit, they never contribute but like the lint in your pocket they are always there doing little or nothing other than making sure they stay. As Flint says Waggoner is last to the post with a Camaro behind the Mustang and Challenger. There are but two interesting cars (my observation) in the entire GM stable, the Caddy CTS V and the Corvette, both using a 1955 engine. As Flint observes it is a passion for what one does that drives folks to the showroom.

In the curent Business Week MSFT Ballmer says that the $500 premium for an Apple is too much in this economy, Steve you still don't get it, this is the thinking that got GM to an 18% market share. No one is passionate about their Dell ( I hate the soft switches on mine) or their Chevy Cavalier. they are however passionate about their Mazda Miatas or their iPods. Even in this recession, there is not dealer incentive on Miatas or iPods.

Can GM build the auto equivalent of the iPod, do that or continue to be the maker of rent car fleets, the choice is theirs. This is the company that created the duece and a half all wheel drive truck that helped win WW II, the automatic transmission, the pillarless hardtop (the wife of a Buck exec wanted the convertible look in her hardtop), the first workable auto air conditioner. These firsts were followed by horrible engineering decisions including the Corvair, the 4 6 8 engine, the failed Pontiac OHC 6, and the proctor and gamble boring line up of sedans in the 1970s and 80s.

In the mid 1960s the Beach Boys observed that

She's so fine

My 409

Today the makers of the 409 beg at the Capitol, tin cup in hand,

how the mighty have fallen.

ZZZZ Best provides an extreme example of what ratios can show an alert accountant or in this case perhaps one even asleep at the wheel.  Had the auditors looked they would have realized something was surely terribly amiss.

Take a look at this article from the Journal of Accountancy.

In Chapter 12 in Intermediate Accounting  we studied Investment Rules.  The Mark to market FASB rule passed a few days after the all time high in the Dow at 14,000 in 2007.  It has been down ever since. So, now that mortgages have morped into toxic assets, the FASB is being pressured to relent.  And so theFASB has voted to allow a change, click on the hyper link to read the article. 

Value is in the mind of the beholder. So is distress.  Will teh readers of financial statements suspend move their mental valuationmodels beyond this crisis to when these mortgages might hav value. Well they are today as the markets are up. But are the mortgages suddenly more valuable since we moved the goal posts so to speak?  The truth is that the market was headed up anyway. Had this rule been passed just prior to the S and P 666 low on March 49, we might have had a different outcome.  

It is important to note that the FASB vote took place while the market had already begun rising, hence the news fuled the hope of the participants. In a bull phase, all news is bullish. Prior to March 9, all headlines read that the world was ending, fueling more fear. Now that hope is displacing fear, the news is deemd to be bullish. The green bar occurs amid today's hyperlinked headline.

Nicholas Taleb, author of Black Swan takes on the bystanders of the financial world. He has no use for modern portfolio theory or the quants that promote it, a good read.

Click for his interesting home page here. 

Selective Outrage

Surely
the most ironic twist this year is the international interventionists  on the right decrying the Government GM
Intervention on the left.  
Indeed, Usama bin Laden has bedded down with Senator Shelby of Alabama,
both decry the intervention of the US Government. Bin Laden is distressed that
the US wants to run every other country in the world, Shelby is distressed the
Government wants to run General Motors. The irony of all this is that
interventionists like Shelby regularly vote for foreign wars but selectively
oppose some domestic intervention.

Where
has the US Government thrown its weight around the world, let me count the
major spots, just in my lifetime. Since WW II the US has intervened in Berlin,
Korea, the Mid East (Lebanon, Kuwait, Israel, too many times and places to
list), Quemoy and Matsu, Guatemala, 
Cuba Bay of Pigs, Cuban Missile Crisis (closest brush with nuclear war),
Viet Nam, Grenada, Iraq 1979, 
Panama, Serbia Croatia, Kuwait, Georgia, Iraq 2003 to now, Saudi
Arabia,  Pakistan, Afghanistan
(again and again which promoted bin Laden to his current status), and the
latest gunboat Bush diplomacy with a gunboat cruising near Soviet influenced
Georgia. Let’s not forget CIA botched efforts like the U-2 Gary Powers fiasco
or the Pueblo spy ship kidnapped by Korea. U S soldiers have been killed,
wounded, or captured in all these efforts. The US has brazenly told the
countries involved how they should be run and indeed, who should be be in
charge. Is it any wonder a world weary of the US calls for another reserve
currency? As Congressman Ron Paul observes, Usama  wants us back here because we are over there….

Supposed
conservative (smaller government) types like Shelby have supported most of
these international interventions. 
By the way, Shelby’s web site just announced a $380,000 earmark for
streets in Aliceville, AL!  No
problem with government intervention in Aliceville, eh Senator?

It
will no doubt shock conservatives opposed to the US attempting to bring some
order to GM to learn of President Truman’s action in 1946.

When
the railway workers turned down a proposed settlement, Truman seized control of
the railways and threatened to draft striking workers into the armed forces
While delivering a speech before Congress
requesting authority for this plan, Truman received word that the strike had
been settled on his terms.

Gee
that sounds pretty interventionist to me! 
Critics of GM has long called for an ouster of the existing Board and
management that has shrunk the company to less than a 25% market share. Now it
is a reality.  By the way,
President Truman is regularly hailed as a great US President by both parties,
because of his unprecedented actions, the ironies abound here.

This
column has noted the enormous cost of a GM failure, or even a court
bankruptcy.   GM extends to
Andrews, unlike Eastern Airlines. 
Michigan has already added to the mortgage problem a GM collapse would
bring massive  supplier employment
and loan defaults, just what is not needed now. Calls for GM to go to court
ignore the reality that would be a Chapter 7 liquidation without more
government money.

The
same Congressional critics that have urged US intervention in countries around
the world now decry intervention in GM. 
For once the US government is at least doing something in this country
regarding US employees in a large US industry.  What did George Bush do about this looming problem for eight
years?  Answer – invade Iraq.   A three month expenditure in
Iraq  would wipe out all GM debt,
think about that.

Congress
rarely flinches at the idea we dictate who presides over Iraq, Kuwait, or Viet
Nam. The suggestion that Rick Waggoner step down pales in comparison to this
Viet Nam era stunt.

The
CIA was in contact with
generals planning to remove Diem. They were told that the United States would
not oppose such a move nor punish the generals by cutting off aid. President
Diem was overthrown and executed, along with his brother, on November 2, 1963.
When he was informed, Maxwell Taylor remembered that Kennedy "rushed from
the room with a look of shock and dismay on his face." He had not approved
Diem's murder. The U.S. ambassador to South Vietnam, Henry Cabot
Lodge, invited the coup leaders to the embassy and congratulated
them. Ambassador Lodge informed Kennedy that "the prospects now are for a
shorter war"

Meanwhile, Congress bloviates about GM but the
money flows to Aliceville, Alabama. Outrage it seems, is very selective.

Dennis
Elam teaches at Texas A & M San Antonio and can be reached at
dennis.elam@att.net.

The Governor of Kansas, up for Health and Human Services, and her husband, a Federal Magistrate Judge, discovered another $7K in taxes owed. The question all this should prompt is

A bankruptcy judge has ruled that Vallejo, CA can void its contracts with union workers while the City is in Bankruptcy.