A good friend called to report that the bay areas of south Texas are already seeing the crimp from reduced trade. The US has stopped cross border trucking. And so Mexico has trade sanctioned 90 US food and consumer items, making them uncompetitive in Mexico. Meanwhile the US helps suppliers for US automakers Ford GM Chrysler but not the foreign makers here in the US. And so we favor the cities with US plants but not those with foreign plants, understandable but discriminatory. 

Thomas Ellis and Dr. Granville Coggs, Tuskegee Airmen, visited the San Antonio A & M Campus February 25, 2009. We were delighted at their stories and affable manner. Dr. Mary Grams and Exec Dean Dr. Carolyn Green visit with Carolin Sinkfield, Dept Educaiton, and Dr. Granville Coggs. Six of the airmen live here in San Antonio. See the photo album on sidebar for more pictures.

Learn more at www.sactai.com

Fed Chief Bernake said the FED has helped the situation.

I guess this means that the entire banking system has not completley melted as CITI has rallied from 1.05 to nearly 3 bucks. And frankly I think that is what he means, the entire system did not collapse.

I visited he Cortez SA Public Libarary this morning, try it you will like it. Cortez is handily located just one stoplight north of Gillette at Hunter and Poteet. It is well laid out with windows on the north and south walls for natural light without the harsh afternoon sun. They have a nice periodical collection as well as music CDs. And there is a complete book collection, this would include books on business!

Stop by for a visit, it is another handy resource next to our campus.

In a case reminiscent of the KPMG $450M non deductible fine by the IRS, a BDO former partner

plead guilty to conspiring to tax fraud.  Please read this article.

Now, things are not quite as they appear. After all

People do not go to cpa firms merely to have their tax returns prepared, HR Block can do that

They seek hlep in avoiding taxes, which is not the same as tax evasion….

Tax personnel are of course like all firm members urged to maximize the profit in their section of the cpa firm

And believe me, when they do, they are put on display at the annual meeting, the point being, if the rest of you would emulate this behavior we could really make some money

In the KPMG case, the tax partners were 'thrown to the wolves' in my opinion after being hailed as real 'producers' for the firm.

KPMG paid the non deductible fine without ever being tried!  the Feds were fearful that too much prosecution would collapse KPMG ala Andersen and there would simply not be enough big cpa firms to do all the intl work

My point being, as teh song says, one day you are the windshield, the next day you are the bug…

We shold highlight this as a contemporary topic in audit and tax class.

The SEC has never really audited the firms they oversee. This is the reason SEC Chief Cox put $54 M into XBRL trying to get information so they could at least start. And so CFO reports that XBRL

The "Economic Stimulus Package" Explained

We don't know who came up with the following analogy (we can't take credit for it), but it does an excellent job of illustrating how Keynesian-style economic stimulus programs work, or, to put it more aptly, don't work.

Shortly after class, an economics student approaches his professor and says, "I don't understand this stimulus bill. Can you explain it to me?"

The professor put down his bucket and replied with a smile, "Congratulations. You now understand the stimulus bill."

We think the shifting-water-from-one-end-of-the-pool-to-the-other analogy is excellent, although for two main reasons it actually downplays the absurdity of so-called "stimulus" programs. First, while transferring water from the deep to the shallow end a significant amount will be spilled. This spillage is the government's take (the costs to pay all the bureaucrats and other government expenses). Second, the water transfer momentarily creates the impression that there is more water in the pool than there actually is, which, in turn, leads to more bad decisions.

Rather than everything being at the same level it was before, the act of re-distributing the water will cause the entire pool to become shallower.

What’s
Your Currency?

Imagine that the world is a series of disconnected
islands.  Each island produces a
different product. And so it is necessary for the islanders to trade with one
another to get products not produced on their island. And so the outrigger
dugouts start plying their way from island to island. By mutual agreement so
many pineapples will be worth perhaps a shirt.  A dugout canoe will no doubt command many pineapples as
fruit perishes but the dugout is a long lived transportation asset. Eventually
as trade swells, it is simply too difficult to move pineapples for shirts.
Barter gives way to easily transportable currency.  And so the islands issue their own currencies. The paper
money has its own commodity emblem on the currency. And so pineapple currency
is deemed to trade for so many shirts or even dugout canoes.  Which is all fine, as long as the
island really has the pineapples or shirts to back up their claim to currency.

Well in the big picture of things, nothing has changed. We
all still deal in pineapples and canoes. Governments however no longer tie the
currency to the number of pineapples or canoes they produce. Now currency is
printed at will regardless of the pineapples that stand behind it.  So demand pineapples from that  island in exchange for your currency and
you will get, well, the promise of more currency. Yes, sure, we have a
temporary shortage of pineapples per currency but once the new crop comes in,
not to worry. But indeed, the other islanders, eyeing their hard work in
producing canoes, become reluctant to take the pineapple currency for their
canoes.

Fast forward to islanders traveling by Lear Jets in Armani
suits and gee, here we are. On Wednesday the U S Dollar dropped about 2.9%. The
shares of Transocean RIG rose 2.9%. This is no accident. The traders at RIG are
bidding up the value of their canoe inventory.  A collection of offshore rigs is indeed a collection of
valuable dugout canoes.   And indeed, this morning oil is up about
$2, a bit more than 3%. 

The currency of Andrews, Saudi Arabia, and the Soviet Union
is oil. It is no accident that Vladimir Putin is growing ever more anxious
about using the fragile and multiplying dollar in exchange for his precious energy
supply. After all, other than military, Russia still has no consumer
production.  Our friends to the
south in Mexico face a double whammy of diminishing oil reserves and violence
which  decreases the tourist trade.

On the weekly charts, unleaded gasoline and crude oil have
moved up nicely. This column suggested that $40 would be the level to hold.  It apparently has done just that.  Each trading month has bounced there
since the lows of the fall. Crude oil has now moved up to $50!  Perhaps OPEC has cut back but for sure,
the FED has unleashed lots of pineapple (U S Dollars) currency.   The entire energy complex is not
in gear yet.  Natural gas and
heating oil have not broken to the upside on the weekly charts. No doubt some
of this is that unleaded gasoline typically moves up before the summer driving
season, though that is liable to be a weak market this year. Natural gas is
coming into the buying season for next fall. And so it languishes at $3.75.

This suggests a bear market bounce more than the start of
another move to $145. But for the time being, it should put some back to work.
Baker Hughes just laid off another 1,500 workers, bad move.  Such short term reactions mean
increased costs in terms of unemployment premiums. And then the firm will
scramble to find needed skill sets as demand comes back.  This is a business that requires a long
term perspective.

We do NOT make recommendations here. But our proxy for the
West Texas economy remains Patterson Energy, PTEN. It rose 22% on Wednesday.
Hmm, sounds like dugout canoes (workover rigs) just got more valuable in terms
of pineapple (U S Dollar) currency.

Natasha Richrdson, wife of actor Liam Neeson and an accomplished actress, has died of an apparent head injury while snow skiing. Oddly she seemed okay so the paramedics did not examine her. It was only later that she began feeling ill. 

Well OK he says it was just a rhetorical flourish.