Professor Elam

Not Everyone is College Bound

Lauren Upton is the South Carolina teen who got both brain and tongue tied in a national beauty contest. If you haven't seen this mish mosh on You Tube, a description is in the hyperlink. Turns out though, she will be joining the Trump Modeling Agency and getting big bucks for pursuing her real dream, a modeling career. 

We are attempting to attract students to our new campus.  One problem is the perceived lack of advantage in a college education.  We are told that students think they will become NBA players, rap stars, or in this case, well paid models.  The message of course is that you are what you are not you are what you know.  But then no doubt modeling in far away places is more fun than calculating depreciation.  But I think the latter is a better platform to launch a life long career.

If you have a constructive idea on how we should pitch a college education be sure to post it here, we'd love to hear from you.

Will MSFT Woes Strike Apple?

An EU Court has upheld a ruling that MSFT should pay  a $690M fine.  The rub is that MSFT intentionally designed windows so that its media applications do not work with other vendor software. Clearly this is a bit of European jealousy at how MSFT dominates the computer world, Europe where are you?  The writer poses an interesting question.  If that is true of MSFT, what about Apple?  The iPod and iTunes exclude Sansa et al.  Could Apple be hit with the same sort of fine and ruling?  Sounds likely to me.

No Plan at Ford

New readers will  learn that I enjoy Jerry Flint's obervations about the auto industry.  Jerry has been writing about the auto industry since the 1950s and brings sage experience to the table.

Again in managerial accouting we discussed strategy and long range planning reflected in budgets.  We also discussed how different firms appeal to customers with different strategies, Toyota with say quality and Volvo with safety.  Flint in his article notes that Ford

is giving up its successful rear wheel drive cars to the public and selling them as fleet vehicles.

going the wrong way with high powered mustangs, see my previous post about the Demon

apparently is going to kill Mercury forcing Ford and Lincoln dealers under one roof

not expanding Focus

I have previously posted articles suggesting that Ford stock is essentially worthless when factoring in the legacy costs.  Without new products this may become fact.  I frankly suspect that Ford will end up as a light truck manufacturer, period. And that may only happen if they are taken over by someone else, likea  big truck manufacturer.

Those of you looking for a book to review might consider Execution, the Art of Getting Things Done. The authors argue that there are lots of books on strategy but finally someone has to get something done, and that is execution.

Dream Team at Chrysler?

Nardelli is assembling a new team at Chrysler.  But as readers comment to the article, are these older guys what Chrysler really needs?  And will these big egos really be able to work together and get anything accomplished? 

I would agree. Chrysler had a pretty good head start on where they needed to be in the 1990s after Iacoca worked on the problem. Specifically their partnership with Mitsubishi produced the respected 2.2 L turbo four, gee with gas back at $2.75 what happened to that idea?  Instead Chrysler revived the 5.7 L hemi engine in 5,000 pound trucks and the 4,000 pound Chrylser 300 and Dodge Charger. 

I would say Chrysler needs to

Once and for all improve their dealerships which have never been equal to Ford or GM or anyone else in terms of esthetics or personnel.

Get serious about small cars with quality. Chrysler is famous for great engines in cars that literally fall apart with doors that don't shut adn rattles aplenty. Like Toyota they need to work with suppliers to improve the tactile feel of switches et al, not drive the suppliers out of business with more low cost demands. Stop bulding cheap small throw away cars like the NEON. A sign in a Honda dealership compared five year car values and NEON was dead last in a field of a dozen.  Tear apart a BMW Mini or a Mazda 3 series and learn what constitutes a quality small car. 

Produce the Dodge Demon as a symbol of what the new Chrysler might do.  Tell the world you can compete with Miata, and that a 500 bhp Corvette is not what America needs now.

Most world cars have been a bust, will the Dodge Journey be any different?  Good luck guys, but I think this is the last chance for Chrysler. 

 

Apple's Cost on iPod Nano Going Down

On Monday in Managerial Accounting we discussed the concept of product cost versus period cost.

Apple's new Nano apparently benefits from negotiated lower costs  This will lower cost per unit which will fatten Apple's ever growing bottom line, but that is what managerial accounting is all about.  Click and read the article to see how Apple did it.

Alan Greenspan

Alan Greenspan's book The Age of Turbulence is out.  Since he takes Bush to task and remarked that Clinton absorbed economic data like a sponge, he is of course featured on the cover of Newsweek.

Here is an article in Portfolio.com that takes a different view. The author points out that the FED was created to prevent calamity,not put the fire out afterwards.  You might go back and read my previous post about the Panic of 1907 which lead to the creation of the current FED in 1913.

As Jim Rogers observes, the FED Chair is a player but no longer THE Player. Now futures markets and other countries as well as currency levels play a big part in what the FED can realistically do.

Charlie Rangel aims on Tax Increases

Jack Kennedy lowered tax rates and the economy expanded.  Lyndon Johnson and Reagan continued the idea. Today the DOW is over 13,000.  Charlie Rangel has other ideas however. Click the hyperlink to read about it.  Some of you are taking the tax class.  What direction do you think tax rates should take.

Talk Like a Pirate Day

Okay let's have some fun, cruise to TLAPD.   It is coming Up Wed Sept 19 so ye had best arm yourself with some handy pirate phrases. You might be called to stand watch so best to bone up so to speak...on

spotting sailing ships.  In fact America has a long and colorful history with Pirates both real and imaginary. The Marine Hymn reference to the Shores of Tripoli recalls Jefferson sending US Marines to stop the imprisnoment and looting of Americans in the Med.  Andrew Jackson and Privateer Jean Lafitte defended New Orleans against the British in the BAttle of New Orleans in 1815.  Privateers have a rich history as naval mercenaries.  And as we observed in the previous post, piracy is rampant in China today.

So avast maties, align your compass rose with Wed, prepare to engage in Pirate Talk or else be taken prisoner like the land lubber ye must be!

China The Real Pirates

Wednesday Sept 19 will be Talk Like a Pirate Day. That will be fun, but what is going on with the real modern day pirates is anything but.

I am of course referring to the wholesale Chinese Piracy of Just About Everything. An accompanying article, suggests that the Chinese Brand is damaged goods in the eye of the American consumer.

Back in the 1950s Japan had a reputation for poor quality goods.  Adopting the ideas of Dr. Deming erased all that, just ask GM or Ford.  Can China do the same thing now?  i don't thinnk the Chinese quite understand the idea of property rights in a Communist environment, r ever will  After all, Intellectural Property and everything else belongs to the People, right?

Your take?

Materiality at Bear Stearns

Bear Stearns Ethics are on display in this article.  We study the meanin of Materiality in Intermed I and again in Auditing. This article points out that the outside auditors mention that the pricing of securities in BS Hedge Funds was at best an estimate, the difference between that and reality could be material.

Turns out it was material, so much so that the entire $1.6 B High Grade Structured Credit Strategies Enhanced Fund (can you say that without catching your breath) went  broke. Lawsuits are now flying. BS of course denies any guilt though investors say they promoted the scheme like a bank account.

I asked a few weeks back whether there was any difference in what Skilling Fastow Lay did at Enron and what BS did in this so called Hedge Fund, the results were the same, everyone lost everything.  Now Skilling is appealing his sentence and BS is denying their guilt, Can someone tell me the diference here?