Archive for April, 2007

 

Oink

Monday, April 30th, 2007

Top Ten things not to do on your resume:

1. … attached a letter from her mother.

2. … used pale blue paper with teddy bears printed around the border.

3. … explained a three-month gap in employment by saying that he was getting over the death of his cat.

4. … specified that his availability to work Fridays, Saturdays, or Sundays is limited because the weekends are “drinking time.”

5. … included a picture of herself in a cheerleading uniform.

Read the rest here.

 
 

Principles in Accounting

Monday, April 30th, 2007

Accounting is becoming a mess of rules that’s almost as complex as the tax code. It doesn’t need to be that way. It isn’t that way overseas:

Accounting standards-setters have come under fire for producing hundreds of pages of rules that cover every conceivable situation a company could face. The much-discussed alternative is to adopt a principles-based approach, where broad-brush standards are used to govern behavior, relying on companies to reasonably apply the rules to their own situations.

But FTN Financial’s interpretation of the new rules shows that when standards aren’t precise, they can leave too much room for improvisation. The flip side to that is also true: When there’s room for interpretation, companies get nervous and ask for rules.

The problem is that accountants, auditors in particular, lack the balls to say no to outrageous schemes put forward my management. In all seriousness, what Andersen did at Enron was to say “yes” to their shenanigans. They didn’t have to, and they destroyed themselves as a result.

Making accounting inordinately complex isn’t the answer. Hopefully, normalization with what goes on overseas will bring some sanity back to the discipline.

Read more here.

 
 

Sama

Friday, April 27th, 2007

It’s been a bit of a mystery where the Sama family name comes from. It’s southern Italian, and apparently exists in two cities in Italy. All of the Samas from Boston come from St. Andrea.

Family speculation about the origin of the name mostly centered around the Greek island of Samos. Though I suspect it likely has more to do with the Samnites. Ancestry.com says it comes from the Bible, though I haven’t been able to find the reference. In Arabic, Sama means heaven or sky. And of course, it is also the proper name of Satan.

I’ve long noticed an unusually large number of hits in my logs from Saudi Arabia. I always assumed that this was because my name is the same as the acronym for the Saudi Arabian Monetary Agency. Fair enough. But now I suspect that some Saudi, accidentally happening across my blog, has decided to steal the look and feel, and apply it to their new airline venture.

Check out Sama Airlines.

According to Wikipedia, they started flying in March 2007, roughly four years after the launch of this blog (their own press release says Feb 2007). Whois shows their domain name as having been registered in November, 2005. Look at the lettering of the name, “Sama”. Check out the blue squares. It almost looks like it could be a product associated with this blog, doesn’t it?

Anyone think I have a trademark suit here?

 
 

Our Dieing Public Markets

Thursday, April 26th, 2007

The Wall Street Journal has an editorial today about a glimmer of hope in out dieing public markets, through an SEC rule called 144A:

Less well understood is another, more restricted market known after SEC Rule 144a that governs participation in it. As on stock exchanges, this market allows for the buying and selling of the stock of companies that offer their shares for sale. But participation is strictly limited. To be what is called a “qualified buyer” in this market, you must be a financial institution with at least $100 million in investable assets. If you meet these criteria, you are free to buy stocks of both U.S. and foreign companies that have never offered their shares to the investing public.

And here’s the real beauty of it: Companies that issue stock under Rule 144a can access America’s deep pools of capital without submitting to public-company accounting rules or to the tender mercies of Sarbanes-Oxley. In exchange, however, they must strictly limit the number of qualified U.S. investors in their company — to 500 total for U.S.-based firms and 300 for foreign-based. They are also barred from offering comparable securities for sale in the public market. The 144a market is also for the most part nontransparent, often illiquid and thus in some ways riskier. But increasingly, this is a trade that institutional investors and companies seeking capital are willing to make.

There are estimated to be about 1,000 companies whose stocks trade in the 144a market. And last year, for perhaps the first time, more capital was raised in the U.S. by issuing these so-called unregistered securities than through IPOs on all the major stock exchanges combined. Even more telling is that the large institutional investors eligible to buy these unregistered securities are more than happy to oblige. There is no selling without buying, and for the 144a market to overtake the giant stock exchanges, institutional investors who control trillions of dollars in capital must see better opportunities outside the regulations built by Congress and the SEC.

144a is nice, but it can’t possibly act as a substitute for a real IPO market, open to middle market companies, as Robert E. Grady points out in an op-ed today:

For three decades, venture capital-backed startup companies have been the job-creating engine of the U.S. economy.[...]

Today, however, we are killing that job-creating engine with a combination of high transaction costs and tremendous friction that is hampering our capital markets, particularly the Nasdaq. These problems are the unintended consequences of a bevy of regulations, each of which seemed like a good idea at the time but in total have turned out to be a disaster.

The first was the decimalization of the Nasdaq, which ironically was promulgated by the NASD itself, convinced as it was that its broker-dealers were making too much on commissions. Next came the SEC’s Regulation Full Disclosure, or “FD” for those in the trade, followed closely by then New York Attorney General Eliot Spitzer’s “global settlement,” which separated investment banking from equity research and made certain that a research analyst’s pay could not be a function of his involvement in winning investment banking business for his Wall Street firm.[...]

The granddaddy of them all has of course been Sarbanes-Oxley. At the time of passage, the official estimate of the cost of compliance with its now infamous Section 404 was $93,000 per company. In reality, even tiny companies with $50 or $100 million or less in revenues are incurring up to $2 and $3 million in incremental expense, just to comply with the blizzard of paperwork and documentation required by 404. Even the accounting industry, ironically the prime beneficiary of Sarbanes-Oxley’s high cost, has estimated average compliance cost at just under $1 million per company — but in my experience, this estimate is low.[...]

Some of this is the inevitable byproduct of the spectacular crash of the late 1990s technology bubble, during which it was clear that some companies went public too early. But consider this: when Intel went public in 1970, it offered $8 million of stock and sported a market value of $53 million. Cisco’s IPO in 1990 raised only $50 million, at a price which yielded a post-deal market cap at IPO of $226 million. E*Trade’s initial offering raised $59 million in 1996 at a market value of just $165 million.

The point is that these companies created the majority of their value and the jobs that came with that value after they were public. Today, they sport market caps of $126 billion, $160 billion and $9 billion, respectively, and employ among them hundreds of thousands of people.

Today, none of these deals would be doable.

You got that right cookie. It’s another failure of the past 6 years that nobody opposed Sarbanes-Oxley or bothered to try and reform it after it became clear it was a disaster. Hopefully it’s something that can be addressed after the next election cycle.

 
 

We Lost To Whom?

Thursday, April 26th, 2007

Amir Taheri brings up a good point that I’ve been pondering since Harry Reid announced that we’d lost the Iraq war. Namely, if we lost the war, to whom did we lose it?

Because all wars have winners and losers, Reid, having identified America as the loser, is required to name the winner. This Reid cannot do.

The reason is that, whichever way one looks at the situation, America and its Iraqi allies remain the only objective victors in this war.

Reid cannot name al Qaeda as the winner, because the terror organization has failed to achieve any of its objectives.[...]

What about the remnants of the Saddamite regime? Can Reid name them as victors? Hardly. What’s left of the Baath Party has split into four warring factions with rival leaders in exile.[...]

Reid may believe that Iran, either alone or with its Syrian Sancho Panza, is the victor. If that’s the case, Reid shares the illusion peddled by Iranian President Mahmoud Ahmadinejad.

Convinced that the Americans will run away, mostly thanks to political maneuvers by Reid and his friends, Ahmadinejad has gone on the offensive in Iraq and throughout the region. By heightening his profile, he wants to make sure that Iran reaps the fruits of what Reid is sowing in Washington.

But even then, it’s unlikely that most Iraqis would acknowledge Ahmadinejad as winner and bow to his diktat. The Islamic Republic cannot act as victor solely because Reid says so.

Read Amir Taheri.

 
 

Future Food

Tuesday, April 24th, 2007

And now for something completely different, a gourmet chef cooking a “Cyber Egg”:

Foam, isomalt, and sodium alginate aren’t usual ingredients in a reality TV show soufflé. But they got Marcel Vigneron to the finals of Top Chef this past season. Ultimately, the 27-year-old’s innovative cuisine didn’t win, but it spoon-fed molecular gastronomy to the masses.

The Cyber Egg
Key ingredients: Carrot, coconut milk, cauliflower, agar
Method: Spoon dollops of carrot-cardamom puree mixed with sodium alginate into calcium chloride so their surfaces form a skin. Mix the coconut milk with agar, a powerful thickening agent, and let it harden in a ring- shaped dish.
Marcel’s tip: “I prefer agar to gelatin for this sort of dish because it’s easier to use and can be heated without melting.”

I’m not sure if I should be intrigued or repulsed.

See more here.

 
 

Chocolate

Tuesday, April 24th, 2007

The very nature of Chocolate is changing:

It’s all basically made the same way: cacao pods are fermented and then roasted and ground into a fine paste that can be separated into two components: cacao solids (commonly called cocoa powder) and cocoa butter. Each chocolatier uses different proportions but generally blends sugar, cocoa solids and cocoa butter plus the optional ingredients — emulsifiers, flavors (typically vanilla) and milk solids (to make milk chocolate) — and molds that into a chocolate bar.[...]

But perhaps no longer. The FDA is entertaining a “citizen’s petition” to allow manufacturers to substitute vegetable fats and oils for cocoa butter.

The “citizens” who created this petition represent groups that would benefit most from this degradation of the current standards. They are the Chocolate Manufacturers Assn., the Grocery Manufacturers Assn., the Snack Food Assn. and the National Cattlemen’s Beef Assn. (OK, I’m not sure what’s in it for them), along with seven other food producing associations.[...]

I can tell you right now — we will notice the difference. How do I know? Because the product they’re trying to rename “chocolate” already exists. It’s called “chocolate flavored” or “chocolaty” or “cocoalicious.” You can find it on the shelves right now at your local stores in the 75% Easter sale bin, those waxy/greasy mock-chocolate bunnies and foil-wrapped eggs that sit even in the most sugar-obsessed child’s Easter basket well into July.

Read more here. And here. And here.

Tell the FDA what you think here. And hurry. The deadline for comment is April 25, 2007.

 
 

Yeltsin Is Dead

Monday, April 23rd, 2007

Boris Yeltsin is dead.

Man, I’ll miss his TV show.

 
 

Happy Earth Day

Sunday, April 22nd, 2007


Seriously. The Globe posted that pic in a slideshow about Earth Day. Check it out.

 
 

Top Ten Songs I’d Like To See Laibach Cover

Saturday, April 21st, 2007

Laibach does a lot of covers. Here is my top ten list of songs I would like to see them cover. Oh, and BTW, if anyone knows how to do a reverse ordered list in HTML, please let me know.

10. The Kiss – The Cure

9. Barbie Girl – Aqua

8. Jones The Rhythm – Grace Jones
(actually, they could redo that entire album. It’d be right up their alley.

7. Achy Breaky Heart – Billy Ray Cyrus

6. Bananaphone – Raffi

5. Proud To Be Black – Run D.M.C.

4. Some Girls Are Bigger Than Others – The Smiths

3. Poor Unfortunate Souls – The Little Mermaid Soundtrack

2. Who Can It Be Now – Men At Work

1. Birdhouse In Your Soul – They Might Be Giants