Professor Elam

Ford versus Ferrari

Thursday Nov 28 2019

Finally a race themed movie with a real plot. Except this is not just any plot,

Ford versus Ferrari

features wonderful larger than life but real life characters that played out this famous battle for racing supremacy.

From a socionmics standpoint, it is inevitable this would ahppen in 1966, the first ever flirtation  of the DJIA with the never before seen level of 1.000.  As Iococca puts it in the movie, baby boomers don't want to drive Dad's car. Hence the Mustang was created.

Ford attempted to buy Ferrari but was rebuffed. And as Lee put it, that was just a show to get a bailout from FIAT, which is what happened.  Alerted to Ferrari's actual reacction and description of Ford, he replies, I  want to win, I don't care what it costs.  I would be hard to create a better line up of characters

Carroll Shelby - winner of LeMans in  1959 and car builder himself

Ken Miles - creator of the Cobra and made the GT 40 a real winner

The cast at Ford including Henry  and Bebee, both as arrogant as can  be, or as Enzo Ferrari put it, he is Ford II not Ford I

Enzo Ferrari - as Shelby put it in his eulogy to Enzo, the only guy who ever got to run his very own car company

We know nothing of the marriages of all the other men, but we learn a great deal about the family of Ken MIles, Mollie and son Peter. Mollie is very well played by Caitriona Balfe. I suspect this is to attract the wives and girl friends of guys likely to attend the movie themselves.

Yes go see this one at the theater, the Lucas Dolby sound alone is worth the admission. And the race scenes are great. Dozens of digital artists are in the credits as I am sure they could never find this many of the original cars.

The problem with the other big three race movies that come to mind

Winning with Paul ewman

Le Mans with Steve McQueen

Grand Prix with James Garner

is the lack of plot and character development, particularly in LeMans.Here the characters are everything, the cars are the props.

High Noon was the first western to win an Oscar for Best Picture. The reason was that it featured a real theme of Civil Obedience and real characters who reflected just that.  One by one the town deserts Sheriff Will Kane who tries to raise a posse at different locales. .Finally left alone, we see Kane hand write his last will and testament.

l wished for more technical detail but there is a good deal of that, particularly regarding the replacement brakes.

IMDB estimates the budget at $97 M and I do not doubt that.It has already grossed $62 M.

It rates a 8.3 on IMDB which is really really high.I quite agree.

Check out the Wiki 196 LeMans article for background

 

Pick an early matinee,  we went to the Huebner Oaks which has the best theater seats I have ever experienced.

Two Famous SA Restaurant File for Chapter 7 Bankruptcy

Thursday Nov 28 2019

SA Chef Tim Rattray filed for BK for himself, the Granary Cue and Brew at the Pearl, and Fontaine's Southern Diner.

Debt was perhaps ten times that of assets.

The irony is that the Granary had consistently been named one of SA's top restaurants.

As I have warned in ACCT 3301, restaurants do not go out of business because they do not know how to cook,

they do not know how to plan and compute break even and target profit.

Socionomics Institute Predicts Top in Meat Consumption

Friday Nov 22, 2019

An alert student in BUAD 3192 made a good presentation on the rise of plant based meat substitutes. And he noted it is not just in meat but across the board into dairy and other products.

I mentioned this to my frends at the Socionomic Institute, and guess what, they had already noted the completion of a multi decade five waves in meat consumption.

https://www.elliottwave.com/Social-Mood/Wheres-the-Beef-Heres-How-You-Couldve-Capitalized-on-the-Meatless-Mania

That led to an down A up B down C correction. And how, the Economist declared it the year of the vegan!

 

Social mood determines social action from the stock market to politics to yes how we eat.   Learn more at www.socionomics.net.

Emerson on Gifts

Posted Friday Nov 15, 2019

Emerson wrote this essay in 1844 but quite a few lines are as relevant today as then. I have posted this essay for many years but the last few were before Black Friday. Black Friday is of course our National Day of Orgy Shopping.   Shoppers line up in the early hours vying to get the bargains retailers set up by the hour. Violence and fights have been known to occur.

Arnold and Sinbad parodied this national main in 1966 Jingle All the Way

contrast the theme of that movie, the race to find a Turbo Action Man Figurine, with Emerson's suggestions below.

 

 

 

Essays

XIII. Gifts

1844

Gifts of one who loved me,—   ’Twas high time they came;   When he ceased to love me,   Time they stopped for shame.      IT is said that the world is in a state of bankruptcy, that the world owes the world more than the world can pay, and ought to go into chancery, and be sold. I do not think this general insolvency, which involves in some sort all the population, to be the reason of the difficulty experienced at Christmas and New Year, and other times, in bestowing gifts; since it is always so pleasant to be generous, though very vexatious to pay debts. But the impediment lies in the choosing. If, at any time, it comes into my head, that a present is due from me to somebody, I am puzzled what to give, until the opportunity is gone. Flowers and fruits are always fit presents; flowers, because they are a proud assertion that a ray of beauty outvalues all the utilities of the world. These gay natures contrast with the somewhat stern countenance of ordinary nature: they are like music heard out of a work-house. Nature does not cocker us; we are children, not pets. She is not fond; everything is dealt to us without fear or favor, after severe universal laws. Yet these delicate flowers look like the frolic and interference of love and beauty. Men use to tell us that we love flattery, even though we are not deceived by it, because it shows that we are of importance enough to be courted. Something like that pleasure, the flowers give us: what am I to whom these sweet hints are addressed? Fruits are acceptable gifts, because they are the flower of commodities, and admit of fantastic values being attached to them. If a man should send to me to come a hundred miles to visit him, and should set before me a basket of fine summer-fruit, I should think there was some proportion between the labor and the reward.	1
For common gifts, necessity makes pertinences and beauty every day, and one is glad when an imperative leaves him no option, since if the man at the door have no shoes, you have not to consider whether you could procure him a paint-box. And as it is always pleasing to see a man eat bread, or drink water, in the house or out of doors, so it is always a great satisfaction to supply these first wants. Necessity does everything well. In our condition of universal dependence, it seems heroic to let the petitioner be the judge of his necessity, and to give all that is asked, though at great inconvenience. If it be a fantastic desire, it is better to leave to others the office of punishing him. I can think of many parts I should prefer playing to that of the Furies. Next to things of necessity, the rule for a gift, which one of my friends prescribed, is, that we might convey to some person that which properly belonged to his character, and was easily associated with him in thought. But our tokens of compliment and love are for the most part barbarous. Rings and other jewels are not gifts, but apologies for gifts. The only gift is a portion of thyself. Thou must bleed for me. Therefore the poet brings his poem; the shepherd, his lamb; the farmer, corn; the miner, a gem; the sailor, coral and shells; the painter, his picture; the girl, a handkerchief of her own sewing. This is right and pleasing, for it restores society in so far to its primary basis, when a man’s biography is conveyed in his gift, and every man’s wealth is an index of his merit. But it is a cold, lifeless business when you go to the shops to buy me something, which does not represent your life and talent, but a goldsmith’s. This is fit for kings, and rich men who represent kings, and a false state of property, to make presents of gold and silver stuffs, as a kind of symbolical sin-offering, or payment of black-mail.	2
The law of benefits is a difficult channel, which requires careful sailing, or rude boats. It is not the office of a man to receive gifts. How dare you give them? We wish to be self-sustained. We do not quite forgive a giver. The hand that feeds us is in some danger of being bitten. We can receive anything from love, for that is a way of receiving it from ourselves; but not from any one who assumes to bestow. We sometimes hate the meat which we eat, because there seems something of degrading dependence in living by it.          Brother, if Jove to thee a present make,   Take heed that from his hands thou nothing take. We ask the whole. Nothing less will content us. We arraign society, if it do not give us besides earth, and fire, and water, opportunity, love, reverence, and objects of veneration.	3
He is a good man who can receive a gift well. We are either glad or sorry at a gift, and both emotions are unbecoming. Some violence, I think, is done, some degradation borne, when I rejoice or grieve at a gift. I am sorry when my independence is invaded or when a gift comes from such as do not know my spirit, and so the act is not supported; and if the gift pleases me overmuch, then I should be ashamed that the donor should read my heart, and see that I love his commodity and not him. The gift, to be true, must be the flowing of the giver unto me, correspondent to my flowing unto him. When the waters are at level, then my goods pass to him, and his to me. All his are mine, all mine his. I say to him, How can you give me this pot of oil, or this flagon of wine, when all your oil and wine is mine, which belief of mine this gift seems to deny? Hence the fitness of beautiful, not useful things for gifts. This giving is flat usurpation, and therefore when the beneficiary is ungrateful, as all beneficiaries hate all Timons, not at all considering the value of the gift, but looking back to the greater store it was taken from, I rather sympathize with the beneficiary, than with the anger of my lord Timon. For, the expectation of gratitude is mean, and is continually punished by the total insensibility of the obliged person. It is a great happiness to get off without injury and heart-burning, from one who has had the ill luck to be served by you. It is a very onerous business, this of being served, and the debtor naturally wishes to give you a slap. A golden text for these gentlemen is that which I so admire in the Buddhist, who never thanks, and who says, “Do not flatter your benefactors.”	4
The reason of these discords I conceive to be, that there is no commensurability between a man and any gift. You cannot give anything to a magnanimous person. After you have served him, he at once puts you in debt by his magnanimity. The service a man renders his friend is trivial and selfish, compared with the service he knows his friend stood in readiness to yield him, alike before he had begun to serve his friend, and now also. Compared with that goodwill I bear my friend, the benefit it is in my power to render him seems small. Besides, our action on each other, good as well as evil, is so incidental and at random, that we can seldom hear the acknowledgments of any person who would thank us for a benefit, without some shame and humiliation. We can rarely strike a direct stroke, but must be content with an oblique one; we seldom have the satisfaction of yielding a direct benefit, which is directly received. But rectitude scatters favors on every side without knowing it, and receives with wonder the thanks of all people.	5
I fear to breathe any treason against the majesty of love, which is the genius and god of gifts, and to whom we must not affect to prescribe. Let him give kingdoms or flower-leaves indifferently. There are persons, from whom we always expect fairy tokens; let us not cease to expect them. This is prerogative, and not to be limited by our municipal rules. For the rest, I like to see that we cannot be bought and sold. The best of hospitality and of generosity is also not in the will but in fate. I find that I am not much to you; you do not need me; you do not feel me; then am I thrust out of doors, though you proffer me house and lands. No services are of any value, but only likeness. When I have attempted to join myself to others by services, it proved an intellectual trick,—no more. They eat your service like apples, and leave you out. But love them, and they feel you, and delight in you all the time.

Jay Leno Interviews Ford's Alan Mulallly

Weekend Nov 9, 2019

Heir apparent Bill Ford realized he was not up to managing a global manufacturing company. This is of course unusual for some one who has inherited a position in family company. I am impressed that he publicly admitted this. So he set out to find the right guy.

That guy happened to be Alan Mulally. Alan had been passed over for CEO at Boeing.

In this wide ranging interview, Alandiscusses how he implemented some Deming Team ideas.

Jay mentions Dale Carnegie as I have in class as well. If you think about it, a lot of Deming is reflected in Dal e Carnegie.

Higher Stock Prices, More Scandals

Friday Nov 8 2019

Friday November 8, 2019

Another week, another few scandals emerge.

 

Mattel and its 145 year external auditor, PwC, hid accounting issues. The firm is under investigation.

 

Under Armour is under investigation for its revenue recognition practices.

 

McDonald’s CEO resigns over ‘an inappropriate relationship’ with a staffer.

 

If it were not enough to have riots from Moscow to Hong Kong to Santiago, , now we have fights breaking out at Popeye’s over a chicken sandwich.

 

This news prompted a headline in my Professor Elam weblog, Can’t Anyone Behave? (Scandals are a product of hyper social mood at market highs. Participants case aside behavior norms and take an anything goes stance.)

 

Finally a private equity group proposes to take Walgreens private. If so this would be the biggest private equity deal ever at $70 billion.   Social Mood is inclusive at market highs where most mergers and take-overs occur. With the DJIA at 27,600 it is fitting the biggest deal ever is proposed.

 

All of this has the stock market surpassing that pesky 26,400 DJIA level and moving today to 27,600 more or less.

 

Let’s consider stocks first.   Thee SPX set a new high at 3,093.   Ten-year Treasury yields are re testing their September high at 1.9%. While Trump has been scolding the FED for not lowering rates (why with a strong economy asks the Chinese), this looks like a 40-year low in rates to me.   In Dow Theory terms, Transports hit a new high at 11,163.

 

At the same time, defensive sectors of utilities and gold are pulling back. This is more confirmation of an industrial advance.

 

Emerging Markets fell throughout 2018. Now EEM, the emerging market ETF is nearing a break to the upside at 44. Again this reflects world market strength.

 

Regular readers will remember we have been calling for a low in oil prices recorded in August and October.   As I write this morning, crude oil is down 75 cent at $56.40. We look for a pullback in to mid to late November. That would create what chartists call a fourth higher low. The moving averages on the crude oil price chart are converging. This happens prior to a change in trend. All of this supports our view that given renewed industrial strength around the world, pil prices will be moving up. This of course is the opposite of what the mainstream media has been reporting, with slowdowns in energy markets across the board.

 

The bear market in energy service has done its job of clearing out the weak sisters who took on too much debt and lacked cash to sustain themselves. This past week beleaguered Chesapeake issued a going concern statement. This means CHK cannot pay its bills for the next year. Weatherford is in bankruptcy. Eagle Ford stocks are either at discount or below book value.

 

Keep your cash ready, an important low in energy shares is at hand.

 

Social Mood Goes Whacky Over Popeye's Chick Sandwich

Thursday Nov 7 2019

We track social mood for various asset classes.  Bit Popeye's Chicken Sandwich, is that an asset class?

 

As you will see on the videos, violence is breaking out over the sandwiches, or is this just a derivative of violent nature that has been under wraps to this point?

Under Armour Shares Plunge on Accounting Invetigation

Thursday Nov 7 2019

Under Armour under investigation for revenue recognition practices.

And they failed to mention the investigation in their latest earnings call.

 

Mattel and PwC Hid Accounting Issues

thursday Nov 7, 2019

Mattel and its auditor of 45 years PwC

apparently hid errors for rhe last two quarters of  2017.  They did not disclose to the CEO and the audit committee. A whistleblower revealed this. Those two quarters will be restated.

The chief Financial Officer gets teh boot as well.  There is a longer article in the WSJ today Thursday page B1.

 

WAG May be Biggest Private Deal Ever

Wed Nov 6, 2019

A private equity firm proposes the biggest equity deal ever, a $70 B take over of Walgreens WAG

This is precisely what one would expect at DJIA 27,000. Market highs are marked by inclusionary sentiment. There is a feeling of wanting to come together. And at $70 B that is a lot of want.

Even more expansive would be the decision to lend that much money for such a deal.