I passed out an article from B/W which questioned whether Ford had any actual balance sheet value.  Now the experts are wondering the same thing about Chrysler.  We are studying pension accoutning in Intermed II at this time.  Please read this article about how the pension cost which is not stated on the balance sheet, may mean Chrysler has no real value.  We report, you decide, is Chrysler worth anything.  ONce again, accounting matters and how liabilities are reported matter a great deal.  This is why we, and Warren Buffet, study accounting. AS you read the article, notice that everyone is angling to get rid of some future liability, ie the pension plan, no one seems to be interested in the car and truck production.  In short, Chrysler’s liabilites now outshine the assets.

By the way, be sure to check your tires.  I picked up three metal screws in one tire, clearly they did not clean the site completely after the building was done. While waiting for my tire to be repaired I spied a  new red Dodge Durango (read body on frame 5,000 pound SUV)  complete with 22 inch chrome wheels and dual exhausts, no doubt from its hemi engine.  What was Chrysler or the buyer I wondered thinking?

Click on Hemi the Engine at this link to enjoy the cartoon.  It may be the last cartoon like this Dodge runs for some time……..

The housing boom created by lower interest rates via the government in trying to spur the economy is turning into a housing bust, for everyone. First it was sub prime borrowers, now it is alt A borrowers.

Click to read about it.  More and more folks that used interest only or Adjustable Rate Mortgages are now regretting getting in at the bottom as their payments rise.  You will recall I noted that Garry Shilling in Forbes predicted a recession had started last December.  The Perfect Storm of a market top is coming together.

Housing market collapse takes lenders and borrowers as well as home builders down

Massive take overs financed by junk debt may eventually a similar fate

Stock Markets round the world down significant percents, weekly trends break down.

Weak poll numbers for President here tempt jihaddists round the world to try bolder adventures.

Mood turns darker evidence by interest in violent sports, gangster movies.

Stay tuned.

One of my CcATS sponsors sent this along, I would pretty much agree. Also, don’t hesitate to map out and manage your career.If you are not going where you want or making progress, change something!

Advise to those under 25 years old

New to the work force

12 steps to become a millionaire

1.. Keep your eyes peeled for better ways to do your job. Streamline a procedure, shave costs, create a new profit center, become an expert on a specific topic, volunteer for a company committee anything that will make you stand out as a prime candidate for a promotion or a pay boost.

2. Don’t be afraid to negotiate. In a study of master’s degree graduates from Carnegie Mellon University, economics professor Linda Babcock found that those who negotiated their first salary boosted their pay by 7.4% compared with those who didn’t bargain.

3. Get your ducks in a row and your numbers on paper. If possible, quantify how much your efforts add to the company’s bottom line. If that’s not feasible, spotlight your value with comparable salaries for workers in your position from a Web site, such as Salary.com, or from a professional association.

4. Plot your strategy when it’s time to move on. Create a professional looking page on MySpace that tells prospective employers why you’re an exceptional candidate, recommends John Challenger, of the outplacement firm Challenger, Gray & Christmas. And don’t neglect more-conventional networking: Join a professional association, or show up at school reunions toting business cards.Top of Form.

5.. Contribute as much as you can to your 401(k) and other tax-deferred retirement plans. You’ll not only build a bigger nest egg, but you’ll also cut your tax bill. In the 25% federal tax bracket, every $1,000 you contribute to a 401(k) trims your taxes by $250. And you’ll save on state income taxes, too.

6.. Flex your tax-saving muscle. Contribute pretax dollars to a flexible spending account to pay for dependent care or out-of-pocket medical expenses. If you set aside $1,500 per year and you’re in the 25% bracket, avoiding federal income and Social Security taxes means Uncle Sam will subsidize almost $500 of your expenses.

7.. Review your tax withholding. If you’re expecting a refund this spring, you’re having too much tax withheld from your paycheck — and making an interest-free loan to Uncle Sam. That’s no way to become a millionaire. Put more money in your pocket by using our withholding calculator and then filling out a new Form W-4.

8.. Stash savings in a Roth IRA, if you’re eligible. Withdrawals in retirement, including decades of compounded earnings, will be tax-free. This year, income-eligibility limits for a Roth increase to $114,000 for individuals and $166,000 for married couples.

9.. Don’t delay. The quicker you get a jump on putting money aside, the easier it will be to stuff a seven-figure cushion. If you start at age 25, for example, investing $286 per month will get you $1 million by age 65, assuming you earn 8% annually (for more calculations, go to kiplinger.com/links/million).

10.. Invest automatically, either through your employer’s retirement plan or by setting up a regular deposit to a mutual fund or broker. You’ll never miss the money, and you’ll avoid two big mistakes: buying too much when stock prices are high and not buying at all when prices fall.

11.. Watch for fund fees. The more you pay, the tougher it is to earn an above-average return. The typical hedge fund, for example, takes 20% of any gains, and that’s a huge hurdle to overcome. A better bet: no-load mutual funds with low expense ratios of 1% or less. If you trade individual stocks, watch those commissions.

12.. Keep it simple. Be wary of get-rich-quick schemes or sales pitches for complex investments, such as oil-and-gas partnerships, that trade on the millionaire cachet to lure investors into buying high-fee products they don’t understand. Most millionaire households accumulate their wealth over the long term by sticking to a regular investing plan in a balanced portfolio.

Surely someone can identify who owns this home!  Hint she is deeply concerned about how YOU ALL are destroying the environment with your excess consumption of energy…..

Anyway, with the collapse in the home building market, now builders are announcing affordable homes.

Unable to sell property in the $350K plus range, the latest thing in Miami is the $159,000 condo.  Here is a clear example of how quickly markets can adjust to price demand.  Of course this does zilch for all the unsold $350K condos, I suspect a big sale if right round the corner. I have been talking about the housing decline for some time.  Now the stock market is getting weaker along with the housing market. Expect all of this to ramp up to a more serious sell off this summer.

Here’s another home in the news. Hint, he just won an Oscar for telling us an Inconvenient Truth.  The energy bill on this baby is about 20 x the aveage US home.

We recently discussed MCD’s decision to stay open 24/7 and try to leverage their fixed costs.  Now Walt Disney wants to leverage itself further into the wedding business. Turns out there are 2,000 wedding a year in one of the two Disney theme parks.  So now Disney is taking the next step by branding wedding gowns.  Get yours now at the ‘modest’ price of $1100-$3000.

Okay enough of my prattling about cars, gals will this idea take off?  Click and read the article, they are serious about this!

Here are several follow up articles about our recent discussions

Turns out GM is considering Chrysler. GM wants it for free and it would add $62 B a year in sales, can GM merger its way out of trouble?  Sounds like Burroughs and Sperry making Unisys to me…Think about what we have studied concerning quality and different cultures in class, does this one make sense?

Airbus is using an old idea to solve its difficulties, fire the help. 10,000 of them.  French Unions call it an Act of War.

Good article in the Sunday DMN about TXU, did you know the Dallas and Houston mayors were behind the effort to fight coal powered plants?  Will KKR buy and dump leaving us to pay off the debt?

In my post about TXU I linked to an article in Socio Times noting that Chuck Norris has now created an ultra violent karate sport-his life dream he says.  Pete Kendall notes that Norris came to fame at the top of the bull market in the late 1960s, so it makes since he would be coming back now.  Another indication of a darkening mood is the Oscar win by The Departed (perhaps already a good way to describe the counter trend bull market of the last few years).  This is a replay of a series of movies hyping the gangster lifestyle when the GodFather appeared as the market topped in 1972.  And just to make the point complete, Godfather was delivered in a double dose.  Scorsese himself has been making the same kind of movie since then starting with Taxi Driver.  But he had to wait for another climax of markets for the market mood to begin to swing back to his genre.  Interestingly he did not win for his $100 M Aviator. Instead the much darker Million Dollar Baby  won again foretelling a change in mood.  The 1970s also saw the dawn of a new kind of dark movie, the Disaster Flick. The Poseidon Adventure with a fitting description of the times moniker, the World Turned Upside Down, kicked off series of movies about tidal waves, earthquakes, exorcism, and fires (Towering Inferno with the two biggest stars of the day, McQueen and Newman).  The back drop was the Viet Nam war combined with Watergate and an Arab oil Embargo, the world turned upside down indeed.

Now we have a President with similar low ratings, an unpopular war, gangster movies at the Oscars, and gasoline prices edging up again.  Gee looks a lot like 1972 to me.  Note between Jan 1972 and Dec 1974 the Dow dropped from 1051 to 577.  REITS were all the rage then and promptly tanked, they are just showing some weakness now amid the collapse of home builders and sub prime mortgage lenders.  This was repeated with the NASD as it peaked at 5,000 in 2001 and dropped to about 1250.  It has now doubled from that low to rise to about half its 2001 top at 2500.  Look out below, note, this is all a musing about pop culture, not a recommendation on the stock market……but it is fun to track this stuff, eh!

Manned exploration of space has been, well, much ado about nothing in my opinion.  Technical developments however have finally made real time global communication a reality what with satellites and all.  The problem in exciting folks about space is that, so far, all those weird Sci Fi creatures we love to see in the movies have yet to appear.  The best science can promise is a bit of water and perhaps a microscopic bit of, see there, under the 1,000x electron microscope, it lives, whatever it is. One writer opined that we have not been energized by space travel because apparently there is just not anything out there, at least in our reach in our lifetime or any near lifetime to come.

So, check out Charles Krauthammer’s column on the plans for a Moon Base. He is right, the shuttle was a three decade waste of time and money, and got a few folks needlessly killed for riding some sort of space bus to nowhere in particular.  Centuries ago the Chinese ventured forth on the high seas, found nothing of interest, and retreated back to China. I am not aware of any Indian excursions.

But the West, by golly, Magellan got things going in 1522 with his first circumnavigation of the globe, though he did not live to finish the journey.  That was an incredible leap from the Columbus Voyage that bumped into the New World instead of the intended Spice Islands off India.   Sir Edmund Hillary climbed Mt. Everest.  Admiral Perry was first to the Pole.  As Krauthammer notes, no one thought much about
Antarctica till we went there.  GPS has us all going round the globe by sea (Cruising World Magazine) and air.

So what say you?  We have some great shots of outer space from the Hubble telescope. And who can deny the gorgeous shots at Visible Earth. An overlooked space movie would be the one script that Sean Connery accepted after considering quite a few  when he did Outland.  Eastwood makes fun of aging astronauts in Space Cowboys.

But, again, anyone want to move?  And should we let NASA do this or sublet to industry, consider Rutan’s project on the cheap that got a guy my age wearing a ball cap and jeans to the edge of space all for a measly $20 M bucks. Look Mom, no spacesuit!  NASA can’t make coffee in Clear Lake for that money.

As an alternate assignment, check out how many singers have recorded Fly Me to the Moon at iTunes!

I have asked you to review a movie both on paper and in class which features an ethical theme.  Like one of my students, I pretty much thought this was a black and white issue when I set out to creat a syllabus.  After teaching the accounting ethics class twice I have decided otherwise. 

Modern ethical theory can be expresed in three broad concepts. Utility, Justice or Normative ethics, and Rights.  Jeremy Benthan is the father of utilitarianism. This theory simply states that one should choose an ethical path based on whether the result causes pleasure or pain.  Simple yes but then pleasure and pain to whom?   John Rawls proposes a Theory of Justice.  Here the idea is that the result should be the greatest benefit to the most and worst outcome to the least.  Karl Marx was in this camp as well as everyone who want to rob Peter to pay Paul, thereby assuring the support of Paul.  This of course is the philosophy of those on the political left.  The political right is represented by Robert Nozick. He believed in the sanctityof private property and that as long as no law is violated, individuals have the right to pursue their own desires and the rights of the state to interfere should be limited.  Click on the links to learn more.

Now while an outline of the movie is desirable we are not looking for a condensed script.  Quickly outline the plot and then get us to the ethical dilemmas.  How does this affect the characters and their responses to the situation.  What does the movie say about how we should live our lives, which after all was the way Socrates posed the original question of ethics? Is this really any more complex than Robert Fulghum ( All I Need to Know I Learned in Kindergarten) suggested? Should we be a rules or principle based society ( this has real meaning in accounting)?  Do you see a link between the movie theme and what we study in class?

OKay didn’t want you hanging out there all by yourself.   

The purpose of this post is to describe three of the accounting certifications available, and to make some specific recommendations about what you might best pursue.  At this point, I suggest you log on to WEB CT and retrieve my Helpful Websites document that contains a host of useful web links.

A certification is obtained by taking an examination administered by a licensing body. Certifications do not come from universities or CCs.  There are numerous certifications including Certified Divorce Accountant, no kidding, but here we are focusing on the top three which are

Certified Public Accountant

Certified Managerial Accountant

Certified Internal Auditor

Certified Public Accountant or CPA is the most prestigious.  The unique quality here is that one is licensed to issue audited statements on financial reports.  One can also represent folks before the IRS but actually there are lots of categories of folks that can do that.  This cert is issued by the Texas State Board of Public Accountancy. Click on that link for the rules. Basically you have to compete 150 college hours of which 30 are in accounting beyond the first 6 and an additional three in ethics.  And you must have completed a college degree though one in accounting is not specified though if you must have the hours, gee it only makes sense to major in accounting.  There is not space here to explain everything but most major universities in Texas have adopted a BBA MPA program so you will have the required hours and earn a BBA and a Masters upon completion. But understand that passing rate  is only about 40% on any one of the four IN short, you can graduate, take review exams, pay the whopping $750 exam fee and still have a heck of a time passing. IN fact most accounting grads never become CPAs, a fact not readily acknowledged in university circles.  Now, I am in no way saying that you should not consider becoming a CPA, I did at the urging of a good friend and it was one of my better life decisions.  Now by the way, do not confuse the state licensing agency, the TSBPA withe the American Institute of CPAs AICPA or the Texas Society of CPAs TSCPA. The latter are volunteer memberships to promote the profession.  Texas is divided into several sectors by area, such as Dallas Society of CPAs.  One joins the local and state society at the same time, AICPA is separate. 

Now I told you all that to ask you to consider a more modest level of accomplishment but still an important one first. I honestly believe the next two certifications are growing in importance and are probably more the areas where our graduates will seek work. 

The Institute of Internal Auditors supervises the Certified Internal Auditor CIA exam.  The

Institute of Management Accountants supervises the CMA exam.  Both certifications would be found working for an organization. The things we study in managerial accounting are what CMA is all about.  As we have become more service oriented and globalization has taken center stage, the importance of improving internal process has gained in importance. 

SARBOX and the call for more assurance will I think cause Internal Auditing to be the fastest growing field of accounting .  These exams are certainly difficult and composed of four different sections.  They are not seen as difficult as the CPA exam, but hey don’t think you can breeze thru without lots of serious study.  However the big advantage is that a BBA is required, not 150 hours.  And the exam fee is much lower.  This would also be a good way to build your confidence to eventually take the CPA exam. 

I will obtain the latest copies of the Gleim review books for CIA and CMA. If you are a student you can buy the Gleim review books for $50 for CMA and $48 each for CIA including book and software. Remember thre are four books to the entire set.    This price is lower as UNT has a site license with Gleim.  I will put then on reserve in the library. I also recommend taking a regular in the seat review class.

I urge you to take the Helpful Websites and surf around the sites to see what is going on in the world of accounting, quite a bit frankly.

Now one more thing.  Look around you next time you are in class here or in Denton.  Just about everyone you see is going to get a BBA. Well not to diminish that accomplishment BUT that means you have simply moved up one notch.  It will be necessary to separate yourself from the pack so to speak to stand out as a job applicant. There is simply no better way to do that than by obtaining a certification.  And you can take pride in your accomplishment knowing that many either don’t try or try and fail.