In the 1920s as the markets were going up up up, a New Yorker was showing an out of towner the famous J Boats (130 feet) lined up at the dock in the New York harbor.  The story goes, that one belongs to Mr. Morgan and that one to Mr. Hutton…..after this lenghty recital of who owned which boat the out of towner innocently asked, yes but where are the customers’ yachts?’  The irony of course is that if the owners got rich why not the clients?

Indeed, and so nothing changes on Wall Street as MER begins looking for a new CEO> 

O’Neal will leave with a generaous compensation package.   HE was allowed to retire rather than be fired so he keeps, well click and read what he keeps. 

Indeed, where are the customers’ yachts?  For some reason I can’t copy the URL but go to
http://www.amazon.com and put in where are the customers yachts for the review…

The Center For Audit Quality  is runing a tv ad you might have seen. The ad features a yong lady suggesting that she is the investor’s best friend, she is a public company auditor.

Watch the commercial here.

The AICPA site is here. 

This I think speaks to the scrutiny the profession is now feeling from PCAOB.

Robert Samuelson takes a look at George Clark’s new book. Clark suggests that societal culture has a great deal to do with the adoption of new models, ways of thinking and ways of getting things done.  Hence it may be that societies that are resistant to change, won’t!  There is nothing really revolutionary about that and it may explain why so many want to come to the United States. 

Victor Davis Hanson wrote a column a while back noting that a wide variety of characters were using a park in California. Yet there were no riots, no ethnic cleansing campaigns, no religious intonations calling for death to the infidels over a matter of clothing for example.  And that’s the difference-tolerance.  And so Africa and the Middle East remain what they are and Europe and America remain what they are, and probably will.

Speaking in New Dehili, Tsy Sec Paulson said the US is for a strong dollar.  One has to wonder if he isn’t refrrring to the Canadian dollar that just went to a premium over the US Dollar. This is the first time for the Canuck Buck to do that since the 1970s.  The US Dollar has now fallen from 120 on the Dollar Index to about 78.  Apparently Paulson had to go to the other side of the world, where even the Indian rupee is gaining on the US Buck to say this without being questioned by the press.

Cabinet Officials tend to be official spin meisters for their Presidents. But as a former Goldman Sachs heavy, this is a bit much even for someone paid to spin.

Now test your knowledge, do you know which exchange in the US trades currency futures?

Answer, the Intl Monetary Exchange formerly on the Chicago Mercantile Exchange

Click here to take a look.

Cilck here to read about Merrill’s big write off. Stanley O’Neal, CEO just last week, is headed for the exits after trying to sell MER to Wachovia without Board authorization. Other ‘banks’ are also taking writedown.  This illustrates several concepts we have recently studied in Intermed I.

Take a look at the effect on MER’s IS at the Reuters Sites.

Read down this list of recent news to follow this train wreck.

Materiality-Yes $7.9 B would change my mind about the condition of the company

Historical cost and impairment – asset values which are impaired have to be written down

What is operating and non operating, I am looking for a copy of the third quarter statement where MER took the write down

Stop and think, there are ethical and actual issues involved here too. An Investment Bank normally packages and re sells securities to the public. Here with all these sub prime mortgages in inventory, clearly MER is participating in the market rather tan selling things to the public. As you read the article it is clear this was the idea of O’Neal, take more risk by participating rather than just making commissions.

As my Dad used to say, these guys are not as smart as they think they are. 

The Dallas Observer has investigated the DISD credit card scandal and has some interesting observations.  Have you read the observer?  This is an unofficial investigative watchdog on all things Dallas, take a look.

Airbus has only had 165 orders for hte new giant A 380, it takes 420 to break even, whoops.

MSFT spends six times what GOOG does in advertising.  Plus GOOG has not made me mad with a new release I have to learn.  This makes GOOG cool and the most valuable brand on teh planet,.

AOL RIP, instead of subscriptions, AOL has become just another ad supporte dsite, revenue is down 32% in 2007. 7 Million subscribers have hit the road. You will recall this became one of the largest impairment losses in hisotry when Time Warner had to write its value down.

Congress is determined to make Turkey angry over the Armenian vote. Meanwhile the GDP of Turkey is up 122%  in the past four years.  Check it out at  Turkey.

Can you imagine buying a care without haggling?  Read about Honda’s experience.

DELL finally started listening to the unhappy customers on the blogs. But a bit late I think.
 

Apple just posted a record year.   The stock jumped 7% in after hours trading yesterday afternoon when profits were announced.  Can you see why there are so many rules on the cumputationof EPS when such results can push a stock price in this maner?  Again this underscores my interest  in Design, something where Apple exceeds, the best Dell can manage is a colored laptop case.

While I usually don’t agree with Paul Krugman, this article succintly sums up the mortgage problem. He notes the latest idea promoted by Tsy Sec Paulson is more of the same, buy more mortgages in SIV Special Investment Vehicles.  Will this work, Greenspan who has yet to admit the error of lowering rates too far in the first place, does not think so.

Good summary as Countrywide financial CFC continues to fall in price.

Grant Thornton has just named a female partner to head their Women’s Intiatives and Programs group.  The number of female partners at GT is up 138% since 2004.

IN another interesting note, CFOs want more accounting choices.   This survey suggests what many of we instructors have suggested in class, that there are not enough firms to adequately audit all the companies and provide enough choices. Clearly the firms other outside the Big Four are making a push to be noticed.  GT revenue just topped one billion bucks by the way.