• Professor Elam

    Sometimes you're the windshield
    sometimes you're the but
    sometimes you're a louisville slugger
    sometimes you're the ball

    Mary Chapin Carpenter

    Saturday evening I violated a sacred principle

    IF it is not broken, don't fix it..

    In short I attempted to install  windows xp on a partitioned hard drive in my mac laptop, bad idea.
    As always the rule is, do not mix pcs and macs, despite what apple says, that won't work. Keep pc on pc.

    Worse than I thought, the procedure managed to erase the entire mac hard drive.

    so after 2 hours at the apple store, we managed to re install the apple system sonething I could not have done as I did not have the program.

    At this point the Time Machine feature was very helpful. Mac has a unique back up program called Time Machine that actually indexes your work by the day. I had used Time Machine to back up to a 160 gb usb hard drive. Good thing!

    So if you are not backing up your computer to a usb hard drive I suggest you do so. I have lost two hard drives on computers in the last month, be safe, not sorry.

  • Professor Elam

    President Obama decided to visit the Press Corps room in the White House, unanounced. Reading the hyperlink, he wanted a just informal visit. What he got was an impromptu press conference.  He was clearly irritated. Well, you ran for it, you got it, as Harry T. Said, the buck stops here.

    Often students announce that they are not ready for a presentation or a quiz in class, ready should be your middle name. We will be discussing the ramifications of that readiness in class this week. Quick responders move up the ladder, well quickly, slow responders do not. Our new President just got an unintneded lesson in that.

  • Professor Elam

    Picture 2

    You will only be with us here at A & M San Antonio for the equivalent of four  15 hour semesters. That can take two years or so. As one of my students remarked at the end of two years, 'I never realized it would go by so fast.' We had a faculty retreat Friday and talked about our strengths and weaknesses. Ours yours and A & M San Antonio, and we talked about what we want the experience to be for you. 

    I will be the first to note that college is not what it used to be. The languid enjoyable experience of attending football games, seeing movies we had never seen and then  discussing them, reading new and different points of view. I can recall ducking into the Library to read Death of a Salesman, because a friend recommended it and I had never read it, which reminds me to put it on the movie list. Lee Cobb and Dustin Hoffman both played the role on Broadway.

    School has been reduced into a Can you pass the TAKS TAAS or whatever exam in high school, if so we are done with you.  Community college is too often – here is the review, take the exam, bye bye, or perhaps some sort of social encounter experience passed off as education. So here we are with two years to go and counting. 

    It is no mere chance accident or penalty that I am requiring you to read books, reflect and report on them. It is not mere chance accident that I am requiring you do the same with films. The point of college is to elevate you to a higher level of mental reflection. In one class this week  I asked if students could recall  Maslow's Heirarchy. 

    The idea was to compare those five levels with the five levels of moral awareness in the ethics book. Problem was not one person could or did remember what Maslow was describing. I related this to the management profs Friday and they were astounded all  saying they had gone over that in class. Similarly the mgt profs relate that none of their students know anything about a financial statement after three semesters of accountng, not to mention finance. This will not do. 

    The idea of a college degree is to connect these dots so to speak and rise to a higher level of perception. Students seem to achieve some of that but from their life experiences not from class. More is going on that passing the test don;t you see. 

    At any rate, I am attempting to inject into my classes some of those experiences that we lost along the way.  I do realize that you will need to be able to write and present effectively. Your first promotion on the job will depend on it, blow that chance and you might as well change jobs.   

    I can't re invent life as we know it and put all of you on a gorgeous campus with time for reflection.It is 2009  not 1969.  But we can do that in class which is why it is imperative that you arrive prepared and ready for intellectual engagement. 

    All this was prompted by AMC broadcasting On the Waterfront Saturday morning. The film is on the list and won numerous awards, yes in B and W in 1954-5. I was struck by just how well the film is directed. When Marlon Brando reveals his part in luring Eva Marie Saint's brother Joey to his death, the director has a loud whistle in the background we cannot hear what Brando  is saying, we only see his tortured admission and then Eva's horrified reaction, realizing that her new love interest has caused the  loss of her brother. We see the result of their actions on their faces,  and each grappling with the results. Marlon Brando was the Matt Damon of that day, but frankly Matt has yet to rise to the artistic heights of Streetcar Named Desire or Waterfront. Bourne makes money but not classic memories. 

    The photo at top is one of the most famous scenes in cinema, Rod Steiger, Brando's older brother tells him to make up his mind about testifying against the waterfront mob, or else. Brando responds that he coulda been a contender, if only Steiger had stood up for him at the right time. Instead the mob rigged the prize fight so Brando would lose, and as Brando says, he's a bum as a result. 

    Great stuff that, and what ethics is all about. Accounting is after all just moving numbers around in that debit credit equation thing, and the rules are always changing. But how we treat one another, on the Waterfront of life and elsewhere, never changes. Socrates had that one right. Jeff Skilling sits in jail, Richard Fuld makes $300 M and is a free man, hmmm. 

    I would certainly be glad to sponsor a film series, we would gather say early saturday morn and you can bring your teenagers, well if you can get them up that early, just to view the classics and discuss what it all means, that's college and that's why we are all here. No doubt there wold be a hundred reasons why students could not attend. Maybe but this chance only comes along once, and as Schlitz remarked, one had best grab for all the gusto one can as we only go round once. 

    Or as Akroyd muses in Blues Brothers, half a tank of gas, a pack of cigarettes, 75 miles to Chicago, 

    let's go.

  • Professor Elam

    Picture 1

    Casablanca will be on Turner Class Movies Sat nite at 7 PM Central Time. Yes I did say that no one should get a college degree that has not seen and discussed the film.  Dan Jenkins (Semi Tough author) claims to have seen it one hundred times. Harry Reasoner did perhaps his most famous 60 minutes segment on the making of the film, he even donned a white sport coat and resurrected the original set for the occasion. Nazis, Vichy France, a former gun smuggler (Humprhrey Bogart) to the Spanish Underground, a gorgeous woman (Ingrid Bergman), and another underground hero, her current escort. 
    Yep it will all be happening Saturday night at the Blue Parrot and Rick's Cafe American in Morocco. 

    This film is on every list of the Ten Best Films that has been compiled.  

    OH, warn the teenagers, oh not about the sex or violence, this is a 1941 film after all, but this may really shock them, yes like Dr. Strangelove, 

    it is in black and white!
  • Professor Elam

    Michael Phelp 

    has lost Kellogg as a sponsor. Phelps was shown in a British tabloid apparently inhaling marijuana using a 'bong.' THe photo was apparently taken by a camera phone at the er ah event. 

    We are studying ethics in accounting.  There are lots of cameras around all of us these days. It pays to make sure your behavior is well, photo perfect….oh estimates are about a million a year from Kellogg, most other sponsors are standing by Mike, well upwind anyway….
  • Professor Elam

    Who’s
    In Charge?

     

    A
    criticism of tax policy, among many, is that it is ever changing. This means
    that investors never really know the rules. And the result is often a lack of
    investment. 

     

    The
    same thing is happening in Congress right now. Vice President Joe Biden
    declared that the pendulum had swung too far in favor of the President and not
    Congress.  That was before he became Vice President.  I suspect that
    he and Obama are now finding out what it is like to deal with 535 ideas, (the
    total number of representatives and senators)  all different and all
    advanced at once. 

     

    As
    the former head of Vanguard Mutual Funds pointed out this morning, we need
    leadership from the Executive Branch of government, not a mish mash of
    ideas so that no one knows what to expect. Barbara Mikulski, D Maryland,
     passes a bill with a tax credit to get you to buy a car. The Republicans
    decide that mortgages should be fixed at 4%. One day the government wants to
    buy stock in banks, another day they want to guarantee mortgages, another day
    they want to create a BAD BANK. The stimulus bill is now seen as a pork laden
    political package. San Antonio is lobbying for funds for  River Project.  This is not
    leadership and that is why the stock market is dithering at a very, very
    dangerous level, the post 9/11 lows around 7500 on the Dow Industrials.  

     

    In
    the past few days, the Administration 
    that promised to make ethics a hallmark has seen three nominees withdraw
    their names from the process. New Mexico Governor Richardson is being  investigated. Geithner was affirmed as
    Treasury Secretary  but clearly
    ignored the tax law in failing to pay 
    social security  taxes.  Daschle and Killefer withdrew their
    names for failure to pay taxes. Ironically Killefer was to be the new Chief
    Performance Officer, presumably making sure the Federal Government is a well er
    ah, performing. As the saying goes, one cannot make this stuff up…

     

    Meanwhile
    the situation has gotten worse, much worse in places like California.  California has run out of cash to make
    state income tax refunds, school loans, and other payments. So residents have
    real cash withheld from their paychecks and IOUs returned for refunds. How long
    will residents agree to exchange real money for monopoly money?

     

    The
    salary caps will apparently not affect folks like Richard Fuld at Lehman that
    got off with $300 million dollars, those folks are gone.  Now the ones called in to fix things
    are paying for the past misdeeds of others with lower salary caps. Such
    maneuvers are calculated to get votes based on class envy, not getting results.

     

    The
    results of the stock market crash are now being seen. Denny’s offered  a free breakfast. NBC became its own
    best client as it apparently could not sell Super Bowl commercials to anyone
    else. Car sales have fallen by half from January, 2008. All of these events are
    deflationary, prices fall without buyers. And that is why FED Chief Bernake
    keeps printing money. He is at a loss to get folks to spend money.

     

    Nervous
    money is finding a home in gold which has jumped above $900 again.  Oil flirts with $40, five months out it
    is $50.

     

    Positives
    include health care stocks on the rise, rising T Bill rates, a higher Baltic
    Dry Index, and Oil Service stocks poking above their daily moving averages.

     

    Whether the market can make something
    positive of all this will be decided in the next few days. This is no way to
    proceed in a crisis and I am watching carefully, and uncomfortably. 

  • Professor Elam

    Many smaller regional banks, like Frost for example, 

    have said no to receiving money from the Federal Government.  As one banker says in the article, he is not interested in the Federal Government telling him who should get a loan. No kidding, we saw what happened when FNM decided everyone needed a house. 

    Notably the stock prices of well managed small banks have fallen to very low levels. These will be good buys at some point but the confidence level will have to improve before that happens. 
  • Professor Elam

    Markets
    101

     

    Following financial markets may or may not have
    been your hobby when oil was $145. Now that oil is $40 and stocks are down 50%,
    perhaps this has past time has gained in appeal. So what does one need to know
    in the big picture of things.

    Perhaps the most important concept to grasp is
    that the news is extraneous to what is happening. The news usually simply
    verifies or justifies what has already happened or is happening in the
    market.  Reading such a statement
    in a NEWS paper may seem odd. However Andrews County News provides unique
    information not found anywhere else. National and international news sites all
    follow politicians and other celebrities.

    The job of the financial markets is to predict
    what is going to happen. Hence, the best of all world was seen in March 2000
    and July 2007. The worst was seen after the 9/11 attack. That was a market buy
    but of course no one bought there. 
    The best of all worlds for oil was at $145. This column reported last
    summer that oil had completed price patterns on the monthly chart and therefore
    was due for a fall.  The news of
    course was that various economists were predicting $200, which, ahem, turned
    out to be a bad bet.

    Okay in the here and now, what is a person to
    do?  The answer is to ignore what
    people say and like that old maxim, watch what the markets do. Here are some
    specifics. Amidst the oil price collapse, OPEC announces production cutbacks.  A reading of history reveals that OPEC
    has never successfully cut production, once the price starts to fall. Cutbacks
    were the rule from 1982 to 1986 as price fell every year. All the member states
    cheated of course price finally crashed. So never mind what OPEC says.  Instead focus on a continuation chart for
    West Texas Intermediate ($WTIC at scockcharts.com).  Right now we need 
    a close over $46 on the daily chart and $50 would be even better. Until
    that happens, OPEC can talk all it wants.

    XES is the Energy Service Exchange Traded Fund.
    It actually has closed over its 50 day moving average. So despite all the doom
    and gloom you HEAR on the news, 
    the market is seeing something positive. For Andrews the Energy Serivce
    Industry index is more important than energy itself.  Energy Services usually lead the energy market.

     

    Bear markets are characterized by lower lows and
    lower highs. Recoveries or bull market require higher highs and higher lows. So
    in stocks we need a definite close in the Dow Industrials above 9,000, for
    starters. As I write we are at 8234.

    All the King’s Horses and all the King’s Men
    have done everything to put Humpty Dumpty back together again, this would be
    the banking system. Money has been showered on AIG, CITI, etc.  The LIBOR London Interbank Offered Rate
    of Interest has fallen as well as other spreads but lending and bank stock
    prices are still in the tank. The banks are still saddled with trillions (not a
    misprint) of dollars of derivatives and other exotic stuff that they are unable
    to price, much less identify. The Good Ship Bad Bank which is proposed to take
    all this stuff has yet to sail but this is the proposed solution. That buoyed
    bank stocks from their absolute dead lows this past week. But the XLF of bank
    stocks trades at a mere $10. We really need a close over $12 to suggest something
    positive is happening. The waves of selling have subsided, where are the
    buyers?

    As 
    for the bailout stimulus package, look to the markets not the
    politicians. Clearly this is a chance to wildly expand government intervention
    in every aspect of the economy. The Government effectively controls Bank of
    America and Citicorp.  One can add
    GM and Chrysler to the mix.  The
    bailout is all about increasing government control (hello France) rather than
    getting something done right now. Something right now might include a social
    security tax holiday for three months, heck the fund is broke anyway.  That would give everyone more money to
    spend. And frankly, until we all go investing again, nothing much is going to happen.  And that is the real news. 

  • Professor Elam

    An alert student sen me this link on credit default swaps.

    Interestingly the proposed legislation may come from an Agriculture committee.  Your author ofthe  intermediate text notes that these are popular in the markets.  We will proceed on our derivative education at a measured pace this semester.  Please read this article.


  • Professor Elam

    Duncanville Tx has isued ten times as many red light tickets as it has population. Swell, more govt harassment in the name of revenue.  Remind me to avoid Duncanville the next time I am in town.