One of the best known brands in the USA is Playboy.  But sad to say the franchise has fallen on hard times. Yep octogenarian Hugh is seen on E Tv with his adoring threesome but magazine sales are half what they used to be. Hef’s daughter, Dristie simply has not shown the ability to make money with the franchise. 

Enter Playboy U.  Apparently Palyboy has decided to take on My Space and Facebook.  You can go to
Playboy U  and sign up. but you must have an .edu in your web mail address, no high schoolers or parents allowed.  Clearly Playboy is trying to re connect with a younger base that would conceivably  buy Playboy once they graduate. By buy Playboy we don’t mean just  the magazine but all branded products.  Apparently Playboy is going back into the Club business, and training college grads to the Playboy way would make for good future client relations.

Now, wondering how I am going to relate this to accounting, glad you asked.  Garrison’s Managerial Accounting text discusses Strategy. Playboy is adopting a new strategy to re invigorate an old brand.  In its heyday the Playboy mag had 250 pages.  I see the current  Vogue sports over 800!  Gee, how to woo the advertisers back? Answer, show that you attract that sought after young hip 18-25 demographic.

Will it work, I dunno, but they need to do something.

IN the future specific comments about classes will be sent by WEB CT e mail, but for now suspecting that everyone is not using it, for hte managerial class there is a very good example of capital budgeting at

this Garrison hyperlink.

Present value tables are on the web at

this thomson link.

I will also put the tables on reserve in the library so you can copy them and bring them to class.

I urge you to study the power point of narrated slides on Chapter 14 before Wed class.

today I am also placing

Business Week Sept 3 – see notes on the blog but certainly  P 30-42
and Aug 13, 2007 – see cover story articles on housing builders p. 26-42
As you read these articles on the sub prime mess, think about what it means for accountants
How do we value a mortgage, its ultimate worth the saleability of the house or collateral behind it,
so what happens If many houses go on the market at depressed values, how do we revalue the mortgage?

Profit as We Know It

Global Capital Markets

all on reserve, yes you are resonsible for reading this material if you are in

any of the three accounting classes this semester

DLE

I have urged students to subscribe to the Wall Street Journal and Business Week.  For decades frankly B/W was a second tier publication to Forbes with Fortune trailing Forbes. No longer.  For real news on Business Business Week  is now quite a bargain. The latest issue entitled Notso Smart sports a guy with a red pool ball nose on the cover.  But it is chock ful of information, consider

Not so smart is four articles plus the weekly article on the economy about how leveraging beyond belief has brought the credit markets to a standstill. The reason is that no one can tell who owes who. The repackaging of debt into CLO and CDO brought the commercial paper market to a standstill. That is why Bernake had to  lower the FED window rate and encourage banks to borrow to fund enough liquidity to keep things going.  But as the article explains, most of this is out of his hands.  Now consider all the terms in this paragraph alone, do you know what a CLO or CDO is, well better click and start reading .  Better yet, one never knows how long articles will be posted, I seriously suggest you buy the current week’s issue on stands just this week, and subscribe, it is only  about a buck a week, a genuine deal

http://www.businessweek.com/subs/cs
800 873 8504

Other articles of interest

The economy is red hot in where-the Ukraine?
Japan lags in tourism
How WMAX is poised to supercede Wi Fi, why should you care
Big Four Accounting Firms are back in the consulting business, how did THAT happen, and you thought SARBOX kept them out of it
Who is the world’s most profitable automaker, bet you can’t guess…think, there is no substitute
How TI got into the pain business
Saturn changes course
Sony tries to get us to adopt the e book, again
Which tv ads  get watched

And more

Plan to subscribe, I must say I am amazed at how many articles highlight what we study in accounting , particularly managerial accounting

I got an e mail from a student in San Antonio that he did subscribe to B/W and was still learning about the sub prime mess as a result

So start reading!

Lehman Brothers is the latest to head for the sub prime exits. Click and read to learn how many firms are paying to get out of that business while they still can.

Gee these guys sound so smart on their website, how could they be som dumb as to do such a thing in the first place?

Tools for Innovators  is a relatively new business book.  Read the review and note how many concepts are discused that are staright out ofthe Garrison Managerial Book.  I have remarked that if ACCT 3270 were re named How to Get Rich Running your Own Business, it would be a more popular course.

For centuries everyone assumed that all swans were white, well at least until the black swan was discovered in Australia.  Author Taleb argues that events do not happen gradually but in unpredictable fits and starts.  Well one need look no further than a few already gone by the by business names to see the wisdom of that observation

Remington Rand-typewriters and office furniture
Smith Corona-typewriters
Xerox-whoops our patents ran ou
Polaroid-whoops who expected digital
Wang, Control Data, Epson computers
Studebaker Packard Cord Dusenberg

Indeed change is not gradual, look at how cell phones and e mail change life at ATT. 
IBM missed the IT revolution and finally cast aside its stodgy ways but nearly lost its way.

Read the review of Black Swan.

Reard this review of the new book SEND.   We must remember that a large part of communication is visual. Our facial expressions and intonation add a lot of meaning to what we say.  This of ocurse is not possible with e mail.  So think before you click.  A good book for Student Development office perhaps.

Another reason for the difficulties of the 1930s were Smoot Hawley tariffs imposed by our government. The result was less trade.  Globalism is the new catch phrase but in this article, Pat Buchanan  wodners if it is a good thing.  Pat is right, when we buy foreign made goods, we don’t pay into US retirement funds.  Amid the lack of control on everything chinese from dog food to paint to aspirin, one has to wonder if losing control of one’s manufacturing sector is a good  thing. My view is that the stock market has turned bearish, prices will be falling. If that is true, attitudes will be falling also. This means you can expect more calls to look out for ourselves.  indeed, let the Dow lose another 2,000-3.000 points and you will be seeing more calls to look out for ourselves.

Baron von Rothschild is said to have famously remarked that one must buy when ‘there is blood in the streets.’ He of course meant that literally.  A time of revolution when things are being torn assunder can offer great value, if of course, you can figure out what will survive the revolution. 

Bank of America ahs decided that Countrywide Financial CFC will survive. B of A put $2 B in to CFC
convertible preferred stock.    Why did B of A do that?  What is a convertible preferred stock? Convertible into what pray tell?  Read the article at the hyperlink to learn all about it. 

A preferred stock is preferred to common stock as to payment of dividends. The preferred holders must be paid before the common stock holders.  Typically in exchange for this, preferred stock holders do not get to vote for the Board.  This way B of A earns a nice return, 7.25%, CFC gets the money it needs, and B of A could become a common holder if it senses the common might go back up.

You can be sure that some very high ups, read the FED, were behind the scenes orchestrating this deal to further calm the markets. Alarm bells were ringing the last two weeks with credit downgrades of CFC by Moodys and S & P. What is a credit downgrade?  Look it up!  No doubt the stock market will be up to day as rumors of an impending CFC bankruptcy have certiainly been quelled, at least for now.

Elvis Presley What Could Have Been

Elvis Presley passed from this earth August 16, 1977. And so the fortieth anniversary of his passing has been noted in various media outlets this month. How did such a promising talent end up so badly? At his death, he was worth less than $3 M, a miniscule amount for such a prodigious outpouring of records, concerts, and movies. Since then he has become one of the biggest dead celebrities. Forbes estimates Elvis made $45 M in pre-tax earnings in 2005. Two of the finalists in The Next Best Thing on summer television were Elvis impersonators; one of them won the contest. What happened?

Elvis, as David Halberstam notes in The Fifties, was a watershed musical talent. Prior to this, America’s moms and dads had listened to gentler tunes like Jo Stafford’s 1951 Shrimp Boats are a Comin’. The one four five jump base of songs like Hound Dog or Jailhouse Rock was a clear departure from Big Band Music. Elvis was from the south and the south was the birth of the blues and what became known as rock and roll. Rock had its roots in black musicians like Lil’ Richard. Richard claims to this day to have invented rock and roll. But that honor has to be shared with artists like Chuck Berry. Black musicians were certainly the inspiration to Jerry Lee Lewis. Elvis combined this beat with a swivel hip performance. This was deemed to be so suggestive that in his first performance on Ed Sullivan’s show, the camera only showed Elvis from the waist up.

The suits didn’t think they could sell black musicians like Richard and Berry to the public. So musicians like Elvis and others from Sun Records like Jerry Lee and Carl Perkins came into vogue. Still all this was a bit much for the parents who after all fund the record purchases. And so middle of the road performers like Pat Boone and Fabian were manufactured for broader appeal. The were smoother but definitely not rock and rollers. Still the teenagers swooned for Elvis in a manner not seen since early Frank Sinatra or later until the Beatles. A star had been born.

Colonel Tom Parker came to manage Elvis and certainly what happened has to be laid at his doorstep. Elvis began doing movies to promote the record albums. The very first ones sparked with dynamism and real talent like Juliet Prowse. This era peaked with Viva Las Vegas in 1964. In Viva Elvis was paired with vivacious Ann Margaret, easily his own screen performing equal in song and dance routines. Speculation has it that she coaxed his best song and dance performance ever; indeed, even today it is a classic.

What do I mean? Think John Travolta in Saturday Night Fever and Grease. Travolta made a comeback in Pulp Fiction and now commands millions per movie. In retrospect, it was time for Elvis to get serious after Viva. Male stars like Steve McQueen, James Coburn, and Charles Bronson were emerging as real stars. But it was not to be. Parker decided a female would not potentially upstage Elvis in a movie again. The result was another sixteen movies, one just as vapid and empty as the last. Elvis gained weight, lost wives, and married a drug habit. Interestingly, Barbara Streisand’s first casting choice for her re makes of A Star is Born in 1976 was Elvis, not Kristofferson. Gee would that have rescued him from his death the following year?

We all make choices in the great decision tree that is life. Elvis never wrote a song. He never performed overseas. And by age 42 it was all over. He is more prosperous today than when he was alive. Like Lucy, there is probably someone listening to an Elvis impersonator or the real thing 24/7 somewhere on the planet. The last Japanese Prime Minister delighted in his tour of Graceland, hosted by the President no less. Too bad Elvis did not stick around and get his kicks.

Shifty henry said to bugs, for heavens sake,
No ones lookin, nows our chance to make a break.
Bugsy turned to shifty and he said, nix nix,
I wanna stick around a while and get my kicks.
Lets rock, everybody, lets rock.
Everybody in the whole cell block
Was dancin to the jailhouse rock.

Jailhouse Rock