Why Auditors Should be Rotated
There is a proposal afoot to mandate auditor rotation every fiver years or so. Some don’t like it. I think it is a great idea, with large benefits relative to the costs. My insights, or lack thereof come from working in life insurance financial reporting in a number of different ways for around 15 years. ...
Why Auditors Should be Rotated
There is a proposal afoot to mandate auditor rotation every fiver years or so. Some don’t like it. I think it is a great idea, with large benefits relative to the costs. My insights, or lack thereof come from working in life insurance financial reporting in a number of different ways for around 15 years. ...
An Advanced Penny Stock Scam
Don’t buy what someone wants to sell you. Buy what you have researched, and know that it is what you want to buy, because it is valuable. I have an irregular series on penny stocks, largely off of advertisements mailed to me, or things found on the web. Every promoted penny stock I have run...
On Financial Intermediation
I appreciate Steve Randy Waldman, who writes the excellent blog Interfluidity. Even before I started blogging, while I was at RealMoney, we interacted over CPDOs, along with Alea, and several others that were onto the scam. That was a fun time, because aside from the Canadian rating agency Dominion, there was no one else questioning...
Goodbye 2011
I tried to think of a post where I would bring out the best of 2011 economically, but the best I could some up with was, “It could have been worse.” That doesn’t convey much fondness. 2011 was characterized by using debt to “solve” debt problems. Avoid default, extend the loan. Or, let a public...
A Large Middle Class Isn’t Necessarily Normal
This is not likely to be a popular post. Just warning you. I have a bias that modernity is more fragile than commonly believed. One aspect of that is income/wealth distributions. Inequality was far more pronounced in the past, and was fairly stable in being so. So why should the last 150 or so years...
The Foul Deed of the SEC in 2004
It started with reading Abnormal Returns, something I do daily, and innocent enough. But the article mentioned at SSRN was significant, and far more than a set of book reviews. It cited a GAO study and a speech given by SEC Director Erik R. Sirri, which showed that the SEC did not materially modify its...
On Penny Stocks (2)
Yesterday, I received a pitch in the mail for a penny stock. They should put a big red X over my address, but alas, they don’t. Now for all of my prior penny stocks that I have been written about, all have done horribly. Bonanza Gold GTX Corp Bioneutral Uniontown Energy Inc. Obscene Jeans Corp...
Book Review: Saving Capitalism from Short-Termism
This book was surprisingly good, and ambitious. It takes on the short-term nature of our business culture in many areas: The nature of the problem is that the owners no longer work for the corporations, and so managers run companies for shorter term objectives. Owners would care more about the survival and long run profitability...
Hypocritical Buffett
Computer-wise, things haven’t been going my way lately. My laptop seemingly died this evening, and my Gmail account has hacked by Chinese hackers last week. Apologies to those who got spammed by my Gmail account as a result. But that doesn’t mean I can’t keep going. I backed up all of my files on Saturday,...
The Rules, Part XXIII
A Ponzi scheme needs an ever-increasing flow of money to survive. Same for a market bubble. When the flow’s growth begins to slow, the bubble will wobble. When it stops, it will pop. When it goes negative, it is too late. Here’s how a Ponzi scheme works for the promoter: Prior Net Assets + Receipts...
