Be sure to read Going Global as the SEC tries to reconcile the GAAP of FASB with IASB. The recent 8% meltdown in China shows the gloabl interlocking effect of markets.  ANd the onerous requirements of SARBOX have companies heading for other outposts that can trade their stock. So there is a need to adopt a uniform set of Intl Accounting Standards. The goal is to reach congruence by 2009.

Hmm, do you suppose they will disband the FASB once that happens, I mean let’s finally apply Zero Based Budgeting…..

Have you scanned my Helpful Websites posted on WEB CT and looked at sites that relate to this issue?

Jim Rogers was a harsh critic of India in his Adventure Capitalist book.  Now read why in this B/W Article. Clearly there is no infrastructure. For photos and on the spot commentary go to Jim Rogers website

Now ask yourself, why are American companies willing to roll the dice on their future in a place like this with little or no infrastructure and a hap hazard legal system at best.  Surely it is not all cost. Part of the reason has to be escaping the burdensome layers of regulation and taxes in this country.  Given all of this, is it really cheaper to be in India while our small towns and cities wither on the vine here.  Take a stroll through a West Texas or South Texas town and tell me things are great there.  OK, the price of oil is up and West Texas is on a roll again, for the time being. 

Will India address such concerns?  Hmm I think I will add Bridge Over the River Kuwai for the Ethics list, should we be building India better infrastructure than they can build themselves? Is this fair to small town America?  Is it any wonder the South Bronx or southside Chicago look like they do when American business is fleeing this country?  Just wondered….

FBI Director Freeh yesterday apologized for what the Justice Dept auditors termed shoddy bookkeeping and inadequate record keeping.  Seems that ‘thousands’ (yeah right, read millions) of telephone and e mail records were requested by the FBI above and beyond requirements.  Congresss is, as usual, outraged but also totally oblivious that anything was wrong.  Didn’t Coleen Rowley complain about the lack of interest post 9/11 by anybody at the FBI.  Five years later and what have we here?  Would anyone tolerate this at McDonald’s or Fed Express?  Should we continue to tolerate it?  Is anyone so naive that they believe either party truly has any intention of doing anything other than blaming the other party?

Update, now Atty Gen Gonzales admits FBI broke the law.

Gee you would never know that to look at FBI National Security Branch.

First Congress and the President are ignorant of conditions at Walter Reed. Now they don’t know what is going on at FBI.  My take is that the span of control has gotten so large that literally no one is effectively in charge or has oversight of the Fed Govt.  This has truly become the Gang that Can’t Shoot Straight. While companies are using JIT, ABC, TQM to improve the Feds seem to just get worse.

A pox on both  their houses, what say you?

Jordan McClary posted such a great question on WEB CT that I am re printing it here and will answer it so all of you can respond.

Jordan’s post was as follows.

Dear Dennis:

A new comment has been submitted to your weblog “Professor Elam,” on the post “Level the Playing Field.”

Comment from:

Name: Jordan McClary
Email: irishman54_2001@yahoo.com

Comment:

I myself think the idea of having a test to establish the winners from the losers would be a great idea. But how could you design a test so that everyone in the nation could be supcebtible to it, much like the CPA exam? It would be tough, but I think there would be a need for a new DESIGN at UNT, in order to ensure students are provided with the best education for mastering this test. And on a side question. What makes Ivy league colleges any better than ones like UNT? is it really the education or the amount of money that flows through their campuses? I mean do you really have to be a genious in order to graduate from Harvard? The reason I ask is wouldn’t such a test kind of make the value of all schools become equal? If I can go to UNT and pass such a test what makes Harvard any better other than its name and the amount of money that flows from its institution. I never have understood this logic. Please fill me in so that I may have a better understanding

Prof Elam Responds

I can’t speak for architect or medicine but I can for the cpa exam and would bet the others fall in line the same way. The CPA exam is designed at the national level by the AICPA but administered by State oversight agencies that license CPAs. As far as I know the same holds true for medicine, law, architect, etc. When you go to any particular university, if your goal is achieving a professional status, certainly the record of that school’s grads should be examined. The State Board of Acctcy now publishes those results in Texas. Not surprisingly, the older the student and the more recent the schooling and the more hours, the better the results. I have no idea of how well Ivy League grads actually do on the CPA exam but frankly if you look, the top ten B schools only include a few Ivy League Schools and those are MBA not MPA so we really don’t know how well the Harvard students for example would do on the national exam since they have never taken one! By the way, did you know the Beta Alpha Psi (honor Accounting Society) students at UT Austin NEVER show up at regional meets to compete-they would not want to be embarassed by losing to say, UNT or SWT. And there frankly is the proof they are terrified of really competing on a level playing field with all of you or Texas Tech or SWT or UTSA.

In fact I honestly believe the raw intelligence and in fact the actual work required is no higher at Harvard than anywhere else that is a reputable large school. You can look it up and I beleive some of the past articles I have referenced make it explicit that grade inflation is rampant at such schools. I am not being political but conisder the case of Bill Clinton at Yale Law. He spent that fall managing George McGovern’s Presidential campaign in some state. He then showed up at Yale after the election, which would be after Nov 2, and yet he passed the entire semester with flying colors. How is that possible? the answer is that once you are admitted to Yale, you have arrived, it is virtually impossible to fail. Consider that our current president had a Gentleman’s C average at Harvard and Yale.

So why are those schools better? The answer is the complete oxymoron and Catch 22, if you go to Yale you are in the CLUB! Gerald Ford, Bush, Kerry, Clinton, Gore, even Tommy Lee Jones for pete’s sakes, all Yale guys! Hey, Harvard and Yale grads hire, you guessed it, Harvard and Yale guys, others need not apply. In Liars Poker the writer reports that 40% of the Yale or some such b school applied to Salomon Bros that year! Our grads at SWT reported that Houston big CPA firms were loaded with A & M and UT grads-guess who mostly got hired, oh come on, some one told you…..

In one of my last classes at UT MBA Prof Ruefli told us that guys from Harvard thought they were better than us but guess what, we had the same books and many profs that had taught at Harvard, let them think that he said, it will give you and edge.

And so, if you despair of my imploring you to put out your best efforts, it is not because I am Prof Cranky, I know you are as good as anyone, it is simply a matter of application.

Finally, the small schools offering MBA or MPA don’t have a great pass rate on CPA exams, this is why there is an industry devoted to helping you pass such tests, and that industry exists in all disciplines, law, medicine, etc.

It is finally a matter of fraternity. Even Ann Coulter was incensed that Bush had nominated a, oh my gosh, SMU law school grad to the Supreme Court, well huffed Ann, we certainly can’t have that! Ann went to Univ of Michigan but quickly put aside her conservative prejudices against liberal schools to embrace grads of Harvard et al. Ever go thru a fraternity rush, same deal

What say you?

DLE

Many knock on the door but few exceed the bar set by the famous names, and so Chanel, BMW, Pininfarina, Don Perrier, Cartier, Rolex and Omega are just that-targets to aim at.  Everyone tries to copy the winner, hey our Mazda 3 with a 223 bhp FWD engine is faster than a BMW 2.5 3 series…

Well Sean Connery WAS James Bond and Roger Moore PLAYED James Bond, one’s the real thing, the other  an imitation.  See what I mean?

And so the same thing occurs in Academia.  Right here in the DFW area one can attend

SMU Cox MBA

UTA MBA

UNT MBA

Univ of Phoenix on line MBA

even UT Austin has a Chinese menu of M-F, nights, and weekends or hey come on out to the DFW airport on the weekend and some sort of extension course MBA

So what’s the real thing here?  I mentioned that with enrollment numbers down, even Harvard is saying come on in, the water’s fine, never mind work experience.

A couple of California business professors have proposed, finally, a national standard for MBA.  Yep, like CPA, law, or medicine, you take the courses and then take the tests, only the survivors get the brass ring.  No doubt this would separate a lot of wheat and chaff,   Clearly this would separate the men from the boys and women from the girls. 

What say you?  Are you ready to ‘run for the pink slips’ ( a reference to drag racing where the winner takes the loser’s car title)  I suspect this would seriously deflate the number of people attempting an MBA at lower level ‘schools.’  But maybe not. As I left Odessa, TX in 1999, there were ‘legal assistants’ popping up all over town.  These folks attended law school but, er ah ahem, never passed the Bar. So you could pay for advice but when it came time to go to court, you got handed off to someone else or were on your own.  Would there be a gray market MBA, oh I took the courses I just don’t have a piece of paper.  Don’t laugh, the recently dethroned Ethics Manager for Dallas Ind School District said just that when it was revealed he had lost his CPA license, after claiming he had one.

So would this inject a senese of reality?  A national standard? Sound off gang!

There has been a trend of requiring students to have a couple of years real world work experience to enter an MBA program.  Now Harvard and others are saying never mind, come on in.  A Dean in Ireland says this is a bad idea as it negates the whole idea of the degree.  Click to read why.

What say you?  Sooner or later?  I went right from undergrad and was working while I earned my MBA.But that was back before UT thought the ruled the MBA world.

Jason McClary made a post noting that Chrysler was an assembler and there was not a Chrysler product left worth buying, my comments below.

Actually it was American Motors that mixed the parts. Dad bought my sister a pretty nice AMC Concord. Nice car with a 4.2 L straight six, a Ford carburetor and ignition sytem and interestingly the best auto tranny ever built, the Chrysler Torqueflight. (Ok so I aged myself with that one). Chrysler was somehow capable of some great engineering in engines, (the Beach Boys song shut down mentions the wedge combustion chambered 413) the hemi dates to the 1950s and the original Chrysler 300 and the Torqueflight was the best auto transmission easily capable of handling the 425 bhp hemi engine. Viper is made in very small numbers and has that expensive Lambo 10 cyl engine so the price i s high. Chrysler never got the bodies on the older cars right, lots of rattles and squeaks and the other stuff like power windows were somewhat problematic. American Motors never had the money to make the switch to front wheel drive as the Americans did in the 80s and so Chrysler bought it to get Jeep and junked the rest. Fail to innovate and you die. My personal favorite all time American Motors was the 1968 AMX two seater that never sold in any volume, what a shame.

It would have been interesting if a real company like BMW had bought Chrysler, straightened out the electric and body problems and then really given chevy and ford a run for it in the truck business.

How is it that Mercedes paid $36 B and now it is worth $0-14 B, I would say the lack of a devil’s advocate during the bargaining process, everyone in the room was just there to validate the forgone conclusion. Think how often that is true of meetings you have been in, no one to object, everyone there becomes a bobble head doll for the foregone conclusion.

ONe of the grad students had an excellent post about ABC in non profits Donors are demanding more accountability and assurance.  This is a way to do it and is the cover article for the March 2007 CFO. 

Many in Congress are now clamoring for the heads of those responsible for the truly sad stories of VA care, as though they themselves have no oversight responsibility regardless of party.  Such pandering is shameful considering broken lives and bodies are in the mix.  I wonder if those complaining can see the link between the VA operation and most govt operated health care systems, careful what you wish for.

CHeck out CFO.com, a great site and I subscribe for free, good magazine, there is also a CIO if that is your interest.

Jason Raper furnished this link on how Dell may offer Linux as an alternative to Windows. Seems there have been 100,000 requests for this in the last three weeks.  Now, think about strategy and managerial accounting.  The object is to come up with a strategy that outfoxes the competition and gives us an advantage and that makes the customers happy.  Jim Rogers predicted months ago on Cavuto’s tv show that the Chinese would come up with an alternate system to Windows as they did not want to pay the MSFT license fees.  Linux is free.  Dell is the topic of articles, as we have noted here, like What the Dell is Going On? Mike just replaced the CEO with himself. Mike needs a home run, bad, and soon.  Even though Mike is buddies with Bill Gates, does anyone doubt he would toss MSFT Windows overboard to give Dell even  one month advantage over HPQ?  Not likely I would say. 

Interestingly this comes on the heels of the release of VISTA.If Linux takes off via Dell, how long before HPQ and Gateway and Accer do the same thing?  Hmmm, with MSFT being a big part of the NASD and DOW stock indices, that won’t help the market will it?    With MSFT seemingly unable to get over $30 this may explain why, sometimes the stock market really does predict the future.

I have written about how pop psychology, socionomics, affects markets. There is a great psy phenomenon involved in the creation of lotteries. As a business student you have taken statistics and understand or should, the probability of winning a lottery ticket. However this is not the case for most folks. Indeed, for you or I 10,000 prizes might actually get us to buy a ticket, not one prize in 100 mil
lion. But that is not the way the uneducated masses see it. They see that they have the same equal chance of winning as anyone else. Sure the odds are equal for everyone, which is to say nigh impossible. Neal Boortz, co author of the Fair Tax puts in this way.

1 WINNER AND 76 MILLION LOSERS

People are checking their lottery tickets this morning to see if they’ve won the $370 million Mega Millions jackpot. The 12-state has determined that there are two winning tickets. One in New Jersey and one in Georgia. Two soon-to-be-miserably-unhappy saps.

Now is as good a time as any to remind people that not only is the lottery a tax on the stupid, but you aren’t going to win. But as the sheeple line up to thrown their money down a rathole, politicians are smiling. Why? Because the lottery is a great way to tax people without taxing people. Hey..somebody’s gotta win, right? Wrong.

According to published reports, you have a 1 in 76 million chance of winning. That means you have a greater chance of being struck by lightning, or waking up next to Reese Witherspoon. According to one website that tracks such things, there is a better chance that you will beaten alive by a mountain lion. But none of this matters…such is the desire of the ignorant masses to take the easy way out to wealth, they’ll be lining up at the liquor store by the millions trying to cash in.

It is a sad, sad testament to the American psyche that fully 50% of the people in this country think that they’re going to retire on their lottery winnings. Pathetic.

By the way, have you ever heard of a happy, well-adjusted lottery winner? Didn’t think so.