New Bookmarks
Year 2004 Quarter 2:  April 1 - June 30 Additions to Bob Jensen's Bookmarks
Bob Jensen at Trinity University

For earlier editions of New Bookmarks, go to http://www.trinity.edu/rjensen/bookurl.htm 

Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
This search engine may get you some hits from other professors at Trinity University included with Bob Jensen's documents, but this may be to your benefit.

Once again Trinity University receives a top ranking --- http://www.trinity.edu/departments/public_relations/news_releases/usnews_ranking2003.htm 

Choose a Date Below for Additions to the Bookmarks File

June 25, 2004     June 10, 2004  

May 15, 2004    May 1, 2004 

April 8, 2004     April 1, 2004     

June 25, 2004

Bob Jensen's New Bookmarks on June 25, 2004
Bob Jensen at Trinity University 

I am transitioning to the mountains of New Hampshire for an eight-month sabbatical leave.  Since this is a research leave, I'm not certain I will find the time to put out future editions of New Bookmarks until I return to teach at Trinity University in January 2005.

New:  
Year 2004 92 Spring Pictures from the White Mountains --- http://www.trinity.edu/rjensen/NHcottage/NHcottage.htm 

For my generation:  I especially remember "those?"  (Turn up your speakers full blast) --- http://www.singingman.us/DYR.htm 
The home page is at http://www.singingman.us (with more songs)

NOVA: World in the Balance (Population Time Bomb) --- http://www.pbs.org/wgbh/nova/worldbalance/

American soldiers are taking abuse --- http://www.chromedomezone.com/ 

Quotes of the Week

We should never believe statistics we didn't falsify ourselves.
Pierre Steffen, a Boeing VP, going for (and getting) a laugh at a Global Aviation RFID Forum in Atlanta.

What would life be if we had no courage to attempt anything?
Vincent Van Gogh

You can give without loving, but you cannot love without giving.
Amy Carmichael

It is the province of knowledge to speak and it is the privilege of wisdom to listen.
Oliver Wendell Holmes as quoted in a recent message from Mark Shapiro

For me, CBS has become "the enemy within", and I hope never to watch the network again. I think most Americans ought to reflect on the results of their irresponsible and unpatriotic behavior and perhaps narrow their viewing options by one network. The next time America or Americans suffer at the hands of terrorists, thank CBS.
Pat Boone, "CBS and 60 Minutes Modern Benedict Arnolds," NewsMax, May 24, 2004 --- http://www.newsmax.com/archives/articles/2004/5/24/132813.shtml 

The truth—as we all so bitterly know—is that the IT world is filled with certified, credentialed and accredited idiots. I bet you've hired a few. I know I have. The fact that someone has an aptly named BS from Harvard topped off with a misleadingly named master's from MIT does not a good developer (or employee) make. We have to ask ourselves why we make the assumptions we do about individuals with "elite" credentials. The answer says far more about our personal biases than their professional attitudes, aptitudes and skills. Shame on us.
Michael Schrage, "Hiding Behind Certification," CIO Magazine, June 15, 2004 --- http://www.cio.com/archive/061504/itwork.html 

Big Sellers From Wiley

The publisher (Wiley) said the year-on-year growth was partially driven by the strong second half performances of the publisher's U.S. professional/trade titles, which included bestsellers in finance (Hirsch & Hirsch/Stock Trader's Almanac and Mauldin/Bull's Eye Investing), real estate (Allen/Multiple Streams of Income), and leadership (Kouzes & Posner/Leadership Practices Inventory and Lencioni/Five Dysfunctions of a Team. In addition, Testosterone, Inc., an examination of CEO misbehavior by Christopher Byron, sold well.  Accounting and finance textbooks also contributed to the company's growth, such as Kieso/Intermediate Accounting, 11th edition and Kimmel, Weygandt, and Kieso/Financial Accounting, 3rd edition.
SmartPros, "Accounting Products Contribute to Wiley's Record Growth," June 17, 2004 --- http://www.smartpros.com/x43978.xml 

A countryman between two lawyers is like a fish between two cats.
Benjamin Franklin.as quoted by Mark Shapiro --- http://irascibleprofessor.com/comments-06-22-04.htm 

A California jury awarded a sixth grader $500,000 when school officials didn't silence a classmate's "lewd insults and threats." I'm all for disciplining obnoxious kids, but a half million bucks for an eleven-year-old's insults is ridiculous.
Peter Berger, "Hidden Costs - Education in the Age of Lawyers.," --- http://irascibleprofessor.com/comments-06-22-04.htm  

WordPerfect also has a few features Microsoft Office still lacks. For instance, when you are considering changing the font, size or alignment of a selected block of text, the program instantly gives you a preview, right in the document, of what the change will look like.  WordPerfect Office can also quickly and easily save any document in Adobe's PDF file format, a universal, cross-platform file type.  And WordPerfect maintains its famous "reveal codes" feature, which allows you to dig into any section of text and make minute changes to formatting by altering the underlying computer codes. I'm not a fan of this feature, but some types of users, especially lawyers, seem to love it, and Microsoft has nothing that really matches it.  Plus, WordPerfect Office is cheaper than Microsoft Office. Its student and teacher edition, which like Microsoft's is really aimed at any home user, can be bought for about $90.
Walter Mossberg, "Microsoft Office Rivals Include One to Avoid And a Good Alternative," The Wall Street Journal, June 24, 2004, Page B1 --- http://online.wsj.com/article/0,,personal_technology,00.html 

Tablet PCs have come a long way. Their fast processors and huge memory chips provide high-quality handwriting recognition. Funny thing, though, writes columnist Simson Garfinkel: just about every tablet PC on the market today has a keyboard hidden underneath the writing surface. Just lift up the screen, and—voilà!—you have a traditional (albeit expensive) laptop computer. In fact, Garfinkel notes, tablet PCs seem to "spend a large part of their lives serving as traditional laptops, with the stylus snug in its holster while the keyboard gets a vigorous workout."  
Simson Garfinkel ---  http://www.technologyreview.com/articles/garfinkel0704.asp?trk=nl 

Bob Jensen's April-June 2004 Updates on Frauds and the Accounting Scandals --- http://www.trinity.edu/rjensen/fraud063004.htm 

Bob Jensen's threads on scams and scam protections are at http://www.trinity.edu/rjensen/FraudReporting.htm 

Updates on the leading books on the business and accounting scandals --- http://www.trinity.edu/rjensen/Fraud.htm#Quotations 

I love Infectious Greed by Frank Partnoy ---  http://www.trinity.edu/rjensen/Fraud.htm#Quotations 

Fraud Detection and Reporting --- http://www.trinity.edu/rjensen/FraudReporting.htm

Charity Frauds --- Fraud Detection and Reporting --- http://www.trinity.edu/rjensen/FraudReporting.htm 

Most of us trash spam mail in less that the 0.4 seconds that it took for the Lakers to score a game-winning basket against the spurs.  Such is not the case for the blind when it comes to deleting spam.
"Blind Get Earful of Spam Daily," by Amit Asaravala, Wired News, June 18, 2004 --- http://www.wired.com/news/technology/0,1282,63934,00.html?tw=newsletter_topstories_html 

Question
How can an Excel spreadsheet be turned into a Flash file?

Answer from Richard Campbell

This is a link to a demo of a product called Excelsius. You can convert an Excel spreadsheet to a highly interactive Flash file. Each of the demos is powered by an underlying Excel file.

http://www.infommersion.com/demos.html 

Richard J. Campbell 
mailto:campbell@rio.edu 

Bob Jensen tutorial on how to convert Excel spreadsheets into DHTML interactive Web documents is at http://www.trinity.edu/rjensen/HelpersVideos.htm#Excel 

Question
What is Excel Macrame?

Answer from Richard Newmark

I clicked on a broken link and wound up on a really interesting blog at http://j-walkablog.com/blog. Here is some excel art. I did not know that there was such a thing as excel art.

 

Excel Art

This Excel file is worth a look. It's called excel_art.xls (for best results, right-click the link and download the file). The sheet uses 65,565 cells (279 rows and 235 columns), and the workbook has no data or macros. The image is formed by coloring the cell backgrounds. --- http://j-walkblog.com/blog/docs/excel_art.xls 

If you like that, you might also like superman.xls, which uses an entirely different technique: colored ASCII characters.

And finally, no discussion of Excel art would be complete without a link to Debbie Gewand's work.

--------------------------------------

Richard Newmark
Associate Professor of Accounting
Monfort College of Business
Colorado State University
Greeley , Colorado 80639
http://student1.mcb.unco.edu/phduh

Critical Shortage of Accounting Phds

June 12, 2004 message from Glen Gray

I though members of this list would find this article interesting. I find it particularly interesting because our state is trying to get to retire early.

Glen L. Gray, PhD, CPA
Dept. of Accounting & Information Systems
College of Business & Economics
California State University, Northridge
Northridge, CA 91330-8372

http://www.csun.edu/~vcact00f 

"Dude, Where's My Teacher?," by Jerry Ascierto, California CPA, June 2004

 With enrollment increasing, university officials face the daunting task of recruiting accounting educators as they combat budget cuts and a high cost of living. Who will teach the next generation of CPAs?

Sounding the Alarm Bludgeoned Budgets High Costs, Low Wages A Narrowing Pipeline Old Folks Home Clinically Speaking A Seller's Market Just like slide rules and inkwells, accounting educators are becoming a vanishing breed. While enrollment in undergraduate accounting programs has risen in recent years—and increasing numbers of candidates are sitting for the CPA Exam—the number of accounting doctorates awarded annually are at their lowest level in decades. Only 86 accounting doctorates were awarded nationally in 2002, according to the Hasselback Accounting Faculty Directory. That's a steep decline from 199 degrees awarded on average between 1992-94. The demand for educators looks to only increase in the coming years as a generation of baby boomer professors retires. This situation has reached what many in accounting academia believe to be crisis proportions. The Association to Advance Collegiate Schools of Business expects that by 2007, the shortage of business doctorates—including accounting—in the United States will be 1,142; by 2012, that shortage is expected to more than double to 2,419.

As business schools nationwide scale back doctoral programs, "the demand for accounting educators is going to get severe very quickly," says CPA Janice Carr, professor of accounting at Cal Poly San Luis Obispo and co-chair of CalCPA's Accounting Education Committee. 

The problem is exacerbated by California's high cost of living and vanishing state budget, which make recruiting accounting educators more challenging for the state's schools. 

And as the profession slowly begins to redouble its efforts to attract students to academia, many educators in California's schools are left to wonder: Who will teach tomorrow's CPAs?

Sounding the Alarm 
Carr has been sounding this alarm for several years at the state and national level, through her work on CalCPA's Accounting Education Committee and on AICPA Council. 

Undergraduate enrollment has steadied since its decline in the late 1990s, with the AICPA pouring significant resources in attracting the best and brightest into the profession, "and that's well and good," says Carr. "But if there's nobody there to teach them, we have a problem. As a profession, we've dropped the ball in terms of recognizing the need." 

When outlining career opportunities to accounting students, "we talk about becoming an industry accountant, a government accountant or a public accountant. But we haven't marketed academia as an opportunity over the years," Carr says. "We've overlooked it, and it's going to come back to haunt us." 

The profession is finally beginning to listen. The AICPA will soon partner with the American Accounting Association, an organization of accounting educators, and the National Association of State Boards of Accountancy to address the problem, says Beatrice Sanders, director of the AICPA's Academic and Career Development division. 

And CalCPA is re-instating its doctoral grant program, which was discontinued in the mid-1980s when demand for new accounting educators seemed low. A proposal is being finalized that would award up to three doctoral candidates enrolled in either California or out of state schools a $10,000 annual stipend, for a maximum of three years. The doctoral student would have to commit to teaching in a California college or university for two years after receiving their doctorate as a condition of the fellowship.

Continued in the article

June 17, 2004 Christine Kloezeman [ckloezem@GLENDALE.EDU] 

Is it only accounting doctorates or all business doctorates? 
There are so many more options out there now.

June 17, 2004 reply from Bob Jensen

Hi Christine,

I inserted the following module in the April 1, 2004 edition of New Bookmarks. It concerns business doctorates in general and steps the AACSB is taking to study the problem --- http://www.trinity.edu/rjensen/book04q2.htm 

Bob

Question
How bad will the shortage of doctoral faculty in collegiate business education become?

Answers
In September 2003, the AACSB issued the results of a survey that paint a pretty bleak picture of supply of doctoral faculty relative to increasing demand --- www.aacsb.edu/dfc 

Sustaining Scholarship in Business Schools
Executive Summary/September 2003

FINDINGS

Unless decisive action is taken to reverse declines in business doctoral education, academic business schools, universities, and society will be faced with an inevitable erosion in the quality of business education and research.

In recent years, the production of new business doctorates has decreased.  In the US, for example, business doctorates declined from 1,327 in 1994-95 to 1,071 in 1999-2000, or more than 19 percent.  The percentage of doctorates produced by AACSB-accredited institutions also has decreased, to 84 percent in 1999-2000 from 92 percent a decade earlier.  Today, the number of doctorates produced by accredited schools is at its lowest level since 1987.  Although there are some examples of new programs and marginal increases in enrollment in various parts of the world, local demand has outstripped supply in virtually all countries.

Within five years, the US shortage of business Ph.D.'s is expected to be 1,142; and in 10 years, the shortage will reach 2,419.  Although considerable uncertainty about these projections must be acknowledged, the findings take into account an in-depth review of current Ph.D. enrollments, projected demand for business education, faculty retirements, and the typical hiring patterns of Ph.D.'s by accredited and non-accredited schools.

The DFC concluded that doctorally trained individuals are the most essential element in assuring the continued rigor of business education and research conducted in academic, business, and public policy institutions.  Ensuring adequate supply must, therefore, be a primary concern from an industry-level perspective.  From a school perspective, many deans, department chairs, and program directors face unfilled positions after each hiring season.  They confront salary escalation that far exceeds market changes or salary trends in other academic fields and must deal with internal management challenges posed by salary inversion.

Demand for doctoral faculty will continue to increase as the number of MBA providers and students expands globally, business schools strive to meet global standards for quality, and demographic trends drive up undergraduate business enrollment and the proportion of faculty likely to retire.

Substantial increases in production are not expected because of funding and incentive issues.  A DFC survey of US program directors and deans suggests that about 80 percent of funding for doctoral programs derives from business schools' own resources.  Endowments and university sources, such as fellowships and assistantships, constitute the remainder.  Federal and corporate funding supports only a small fraction of the costs.  In some instances, costs are somewhat offset by assigning teaching responsibilities to Ph.D. students.  Funding models are more variable outside the US, but generally doctoral students are more likely to be self-funded or employed in junior faculty positions.

Unlike other business school programs, such as the MBA, there are few financial or reputational incentives to invest in Ph.D. programs.  The advantages to enlarging a Ph.D. program are intangible--increased faculty satisfaction, for example.

Spring 2004 Hiring Outlook

The average starting salary offer for accounting majors is $42,155, an increase of 1.9 percent over last year, according to a quarterly report published by the National Association of Colleges and Employers (NACE).  This is sumarized at http://www.smartpros.com/x43831.xml .  Additional salary information is at http://www.naceweb.org/info_public/salaries.htm 

Employers expect to increase hiring of college graduates by 11.2% --- http://www.naceweb.org/press/display.asp?year=&prid=191 

Also see http://www.naceweb.org/press/display.asp?year=&prid=192 

Bob Jensen's threads on accounting careers are at http://www.trinity.edu/rjensen/bookbob1.htm#careers 

I was fortunate to spend two years in the CASBS think tank just above the Stanford University campus (on Stanford land).  This is really a great place to reflect on your work and your life.

-----Original Message----- 
From: Cynthia Brandt [mailto:cynthia@casbs.stanford.edu]  
Sent: Wednesday, June 23, 2004 5:00 PM 
To: CASBS_Fellows-casbs@casbs.stanford.edu  
Subject: New CASBS website

Dear Friends of CASBS,

The Center has a new website! It is available at both www.casbs.org  and http://www.casbs.org/ 

We redesigned the site to provide more information about the Center's mission, programs, and impact for academic audiences as well as for the public.

For functions such as nominations and panel ratings, you will need to click on the link called "LOG-IN" at the top right corner. That will connect you to the Center's internal site.

I hope that you will take a few minutes to review the site and send us your feedback. As you will see on the pages under the tab called "News", we are making a real effort to keep up-to-date on your recent research and publications. Please send us a note whenever you have new research to report or when the media cover your work, and we'll post it on the site.

Many thanks to those of you who allowed us to use your photos or quotes on the new site. I think you'll agree that your words and images convey how special the Center really is.

All my best, Cynthia

Cynthia Brandt 
Director of Development Center for Advanced Study in the Behavioral Sciences 
75 Alta Road Stanford, CA 94305-8090

cynthia@casbs.org 
 (650) 321-2052

 

The Education Arcade 
It’s early afternoon on a Sunday at Boston’s Museum of Science. About a dozen young students are huddled in teams, peering at Pocket PCs, their parents listening nearby. There’s a palpable sense of urgency among the team members; everyone’s shouting at once. One self-assured fifth grader steps in and takes charge of her group. She has figured out what to do with the technology and begins organizing her troop into attack formation. These boisterous students are playing Hi-Tech Who Done It!, part of an MIT research project called the Education Arcade that aims to make computer and video games a valuable component of teaching. http://www.technologyreview.com/articles/atwood0604.asp?trk=nl 

Bob Jensen's threads on games and learning are at http://www.trinity.edu/rjensen/000aaa/thetools.htm#Edutainment 

An Exercise in Valuation

"Putting a Value on Google," by Scott Kessler, Business Week, June 11, 2004 --- http://www.businessweek.com/investor/content/jun2004/pi20040611_9275_pi076.htm 

S&P takes a hard look at the search giant's fundamentals -- and at the valuations of its peers -- to find an answer

Amid an enormous level of interest in the Google IPO -- from investors, the media, and seemingly every other person you talk to at cocktail parties -- we at Standard & Poor's Equity Research Services decided to take an unbiased look at the company and its competitive position (see BW Online, 6/11/04, "Google: What Lies Beyond Search?"), including commissioning a proprietary survey of Internet users (see BW Online, 6/14/04, "Search Users Weigh In on Google").

Continued in the article

Bob Jensen's threads on valuation are at http://www.trinity.edu/rjensen/roi.htm 

Emile Berliner and the Birth of the Recording Industry (multimedia history)  http://memory.loc.gov/ammem/berlhtml/berlhome.html 

Bob Jensen's bookmarks for history and entertainment are at http://www.trinity.edu/rjensen/bookbob2.htm#History 

"Pinsker on Office Hours," Guest commentary by Sanford Pinsker, June 15, 2004 --- http://irascibleprofessor.com/comments-06-15-04.htm 

I am surely not the only professor who has marveled at the fact that most students avoid coming to office hours -- that is, unless a paper has just been returned or one is due during the next class meeting. After a few years of, let us say, spotty office hour attendance, I learned to think of myself as Thoreau and my office as Walden Pond. I may have been "alone" but I was not lonely. There were books to read, book reviews to write, and not least of all, thoughts to think.

Still, I hoped to do better by my students. As it turns out, I didn't -- at least not for those who wanted to use office hours as a place to lobby, or if you prefer, plead, for a higher grade. Most of the time their supplications had little to do with the course at hand -- which is, after all, why I was there -- but with a few touches of ingenuity, I managed to make office hours, let us say, "interesting." What follows, then, are some of the most effective ploys I developed over the years -- for my students as well as myself.

With respect to discussions of papers that received a lower-than-expected grade, I let "model papers" do most of the heavy lifting. In each group of papers there is usually a stand-out job, one written by a student who combines talent with hard work. No doubt this student could have done a better than reasonable job by banging it out the night before the due date, but that is precisely what this student doesn't do. The thoughtfulness and dead-on writing makes it clear that this student takes a justifiable pride in the work he or she turns in.

I block out the student's name and before I return the papers I mention that a "model paper," one that may not be perfect (whatever that might mean) is available in the English department office. Students who would like to talk with me about their papers must read the model paper before our chat. Most of the time, I tell them, just reading the model paper will be enough, but if it isn't, I'm happy to have a face-to-face discussion, especially if it's aimed at improving one's work on the next paper.

I never cease to marvel at the number of angry -- and unproductive -- sessions I've avoided with this policy firmly in place. Occasionally a student will insist that his or her paper is at least as good as the "model paper," and possibly even better. There is really nothing to do for this student other than to point him or her toward the counseling office where there are people professionally trained to deal with delusion. For better or worse, I am not, and I need to save my time for students who want help in writing effective papers.

Continued in the article

June 22, 2004 message from Dan Stone [jis@uky.edu] 

I am pleased to announce the electronic release of the Spring 2004 of the Journal of Information Systems. Accessing the issue requires only a few mouse clicks: begin by going to: http://aaahq.org/index.cfm , then click on "publications," "AAA Electronic Publications," "browse publications," "Journal of Information Systems," "JIS Spring 2004".

This JIS issue features six main articles, two book reviews, and a discussant's and author's reply related to one article.

In "Accounting Information Systems Research Opportunities Using Personality Type Theory and the Myers-Briggs Type Indicator" Professors Wheeler, Hunton, and Bryant argue the usefulness of Personality Type Theory (PTT) for accounting systems research. More specifically, they argue for the value of the Myers-Briggs Type Indicator (MBTI) as a personality measure and "discuss how AIS researchers can use PTT to complement and extend current research initiatives."

In an extended reply to Professors Wheeler et. al., Professor Lampe concurs with the value of personality constructs to accounting systems research but argues that two personality measures that are not discussed in the Wheeler et al. paper (i.e., the Millon Inventory of Personality Styles (MIPS), and the Big Five Traits of Personality) are most frequently used in psychology and are stronger psychometrically. Professor Lampe's comments include a valuable discussion of psychometric issues in measuring personality. In their reply to Professor Lampe, Professors Wheeler et al. argue that the MBTI is the best personality measure available to accounting systems researchers.

In "Development of the Journal of Information Systems from the Editors' Perspectives" Professors Hutchison, Lee, and White interview current and former JIS editors and conduct content analyses to examine the creation and development of the Journal of Information Systems (JIS). In addition to providing historical analysis of JIS, the paper also suggests potential future directions for the journal and accounting systems research.

Professors Rose, Rose, and Strand Norman apply prospect theory to the evaluation of information technology (IT) investment decisions in "The Evaluation of Risky Information Technology Investment Decisions". Their experiment provides evidence that risk-seeking evaluators rate IT investment decisions more favorably than do risk-averse evaluators, and, that risk preferences, decision domain (a well or poorly performing division), and perceived outcomes (gain or loss) jointly effect the evaluation of IT investment decisions.

Professors Wright, Jindanuwat, and Todd present a comprehensive and integrated computational model for successful audit planning in "Computational Models as a Knowledge Management Tool: A Process Model of the Critical Judgments Made during Audit Planning". Their model, which is focused on the sales and collection cycle of a manufacturing client, opines "on a client's going concern status, applicable levels of inherent, control and planned detection risk, and appropriate levels of statement- and account-level materiality. Most importantly, the model validly identifies the cause of significant fluctuations given causal hypotheses."

Professors Weidenmier and Herron present a case study and analysis of the usefulness of two generalized audit software packages (ACL and IDEA) for classroom use in "Selecting an Audit Software Package for Classroom Use". They argue that effective classroom presentation of generalized audit software provides both practical knowledge and facilitates learning of audit concepts and procedures.

In "Accounting for the Development Costs of Internal-Use Software" Professors Savage, Callaghan, and Peacock critique existing accounting standards for internal-use software expenditures (i.e., Statement of Position 98-1). They argue that this standard undercapitalizes these expenditures and they propose an alternative that specifies "the conditions under which capitalization or expensing should occur for internally developed software."

Finally Cheryl Dunn (Book review editor) presents book reviews by Professor Robert Zmud of two classic books by C. West Churchman, and by Shawn Windle (a product manager at PeopleSoft) of "Business Process Management: The Third Wave".

Enjoy!!!!

Dan Stone, 
Editor of the Journal of Information Systems

 

June 14, 2004 message from Ethical Performance [list_admin@ethicalperformance.com] 

Five areas of social responsibility considered most important by Marks & Spencer's customers have been used as the basis for the retail company's first corporate social responsibility report.

The report, verified by Ernst & Young, focuses on key CSR subjects identified in a survey of the company's prime stakeholders as having the most impact on the Marks & Spencer brand.

The subject areas, each covered in detail in the report, are: ethical trading, animal welfare, community programmes, sustainable raw materials and responsible use of technology.

The web-based version of the report can be found at http://www2.marksandspencer.com/thecompany/ourcommitmenttosociety 

Question
What's "affinity fraud?"

Answer:  See below

A key fund-raiser for Harvard University used his connection to the school to defraud benefactors out of millions of dollars, showing how sophisticated professional investors can be just as vulnerable as amateurs.

"Harvard Parents Got a Hard Lesson In Investing Perils:  A Key Fund-Raiser for School Is Convicted of Bilking Wealthy Donors, Alumni." by Randall Smith, The Wall Street Journal, June 11, 2004, Page A1 --- http://online.wsj.com/article/0,,SB108690562744434417,00.html?mod=home_whats_news_us 

Karen Fleiss had good reason to trust Gregory Earls.

Both had children at Harvard College and they knew each other as donors to the Harvard Parents Fund, which Mr. Earls headed for a time with billionaire Robert Bass. Mr. Earls was a deal maker with a penchant for high-risk investments; Ms. Fleiss was a hedge-fund manager.

So when he asked her to invest in one of his companies in 1998 -- and intimated that Mr. Bass might, too -- she opened her hedge fund's checkbook, eventually putting almost $1.8 million into the venture.

"He had a Southern accent and a big smile, and he would say, 'Karen, I have a deal for you,' " she recalls. "By the time he was finished, it sounded like the deal of a lifetime."

It wasn't. When she cashed out, all she had to show for her investment was $50,000. Ms. Fleiss was one of three wealthy Harvard parents and alumni who recently testified about being bilked by Mr. Earls. The authorities say he stole much of the money they invested with him, siphoning off cash as he passed it through another company he controlled. In the ledgers, the skimmed funds were camouflaged as legal, management or accounting fees.

All told, prosecutors say, Mr. Earls defrauded more than 100 investors of $13.8 million. They say Mr. Earls diverted $1.2 million to an education trust fund for his own children, and $4.3 million more to other personal accounts.

The Harvard connection and other fund-raising activities gave Mr. Earls "access to a pool of potential investors who were very wealthy, and he knew how to talk those people into investing with him," prosecutor William Stellmach said at the trial.

In April, Mr. Earls was convicted of 22 counts of fraud in Manhattan federal court after one investor took his suspicions to prosecutors. In court, Mr. Earls acknowledged moving investors' money to various accounts he controlled -- which he attributed to "sloppy business practices" -- but denied stealing.

His lawyer, Barry Coburn, said in court that Mr. Earls couldn't have had criminal intent to steal because he kept records of the amounts diverted. The investors "lost their money because the Internet bubble expanded and expanded and popped," Mr. Coburn argued. They didn't have "some kind of money-back guarantee."

Mr. Coburn says his client declines to comment on the details of his case. "Mr. Earls has been convicted by a jury," Mr. Coburn says. "It would not be appropriate in my view for us to respond to particular factual allegations in this context given that Mr. Earls is facing sentencing."

As described by prosecutors, Mr. Earls's scam appears to be a variation of "affinity fraud," in which victims are lulled into dropping their guard by mutual ties to the same religious organization or ethnic group. Mr. Earls cultivated important contacts through his work for the Harvard Parents Fund and the Boys & Girls Clubs of Greater Washington, D.C. -- and used data supplied by Harvard to assess likely investors.

The case shows that sophisticated professional investors can be just as vulnerable as amateurs. Much of the money Mr. Earls stole came from a handful of wealthy Harvard benefactors, including a former aide to junk-bond impresario Michael Milken. Even Harvard found itself short-changed. Mr. Earls reneged on three separate pledges totaling $275,000 that he made while he headed the parents fund, a school official testified at his trial.

Mr. Earls, 59 years old, grew up in Bluefield, W.Va., and attended the University of Virginia. In the 1970s, after stints as a gym teacher, mutual-fund salesman and stockbroker, he recruited others to invest with him in projects including movies, theaters, apartments and microwave-oven retailers. The 1980s saw him organizing investment groups that bought stakes in numerous enterprises.

In the mid-1990s, Harvard's development office took notice of Mr. Earls as a potentially productive fund-raiser for the Harvard Parents Fund. He was a big donor to the school, and three of his four children eventually enrolled there. His lawyer says in an interview that recruiting investors wasn't the principal motive for his unpaid volunteer work.

Harvard fund-raising officials are angry about what happened. "The fact that someone would volunteer their time for a nonprofit and then use that opportunity to line their own pockets is an outrage," says Andrew Tiedemann, communications director for alumni affairs and development at Harvard. "We have never seen anything remotely like this in Harvard history."

One of Mr. Earls's most important fund-raising assignments was Robert Bass, one of the well-known Bass brothers from Texas, who had made numerous high-profile investments in the 1980s. The two men met in connection with Harvard Parents Fund activities, and Mr. Bass's daughter Chandler, who entered Harvard in 1996, became "good friends" with Mr. Earls's daughter Kate, Mr. Bass testified.

Continued in the article

Bob Jensen's threads on fraud are at http://www.trinity.edu/rjensen/fraud.htm 

Consumer fraud protections are discussed at http://www.trinity.edu/rjensen/FraudReporting.htm

Most derivatives like forward, futures, and swap contracts are acquired at zero cost such that historical cost accounting is meaningless.  The exception is a purchased/written option where a small premium is paid/received to buy/sell the option.  Thus if the derivative financial instrument contract is defaulted a few minutes after being transacted there are generally zero or very small damages.  Such is not the case with traditional non-derivative financial instruments like bonds where the entire notional amounts (thousands or millions of dollars) change hands initially such that enormous damages are possible immediately after the notional amounts change hands.  In the case of of a derivative contract, the notional does not change hands.  It is only used to compute a contracted payment such as a swap payment.

For example, in the year 2004 Wells Fargo Bank sold $63 million in bonds with an interest rate "derived" from the price of a casino's common stock price.  The interest payments are "derivatives" in one sense, but the bonds are not derivative financial instruments scoped into FAS 133 due to Condition b in Paragraph 6 of FAS 133.  In the case of bonds, the bond holders made a $63 million initial investment of the entire notional amount.  If Wells Fargo also entered into an interest rate swap to lock in a fixed interest rate, the swap contract would be a derivative financial instrument subject to FAS 133.  However, the bonds are not derivative financial instruments under FAS 133 definitions.

From The Wall Street Journal Accounting Educators' Review on June 16, 2004

TITLE: Calpine Raises Cash to Pay Debt, Turn Profit 
REPORTER: Steven D. Jones 
DATE: Jun 15, 2004 
PAGE: C3 
LINK: http://online.wsj.com/article/0,,SB108724453234036647,00.html  
TOPICS: Accounting, Cash Flow, Debt, Early Retirement of Debt, Asset Disposal

SUMMARY: Calpine Corp. has revealed a plan that will significantly change its balance sheet and statement of cash flows. Questions focus on evaluating the plan and the related accounting.

QUESTIONS: 
1.) Outline each economic event that is described in the article. For each event, briefly explain the economic significance of the event.

2.) Assume that Calpine Corp. continues with the plan that is described in the article. Explain how each component of the plan would impact the financial statements.

3.) Why would bondholders be concerned about disposing of assets?

4.) What is a hedge? Into what type of hedge transaction did Calpine Corp. enter? Why did Calpine Corp. enter into the hedge transaction? Is net income changed by changes in market value of the asset underlying the hedge transaction? Is net income changed by changes in market value of the electricity in Calpine's long-term sales contracts? Support your answers.

Reviewed By: Judy Beckman, University of Rhode Island 
Reviewed By: Benson Wier, Virginia Commonwealth University 
Reviewed By: Kimberly Dunn, Florida Atlantic University

"Outside Audit: Calpine Takes Basic Approach to Power Game," by Steven D. Jones, The Wall Street Journal, June 15, 2004, Page C3 --- http://online.wsj.com/article/0,,SB108724453234036647,00.html 

Calpine Corp., one of the main actors in California's long-running energy soap opera, is working from a script that sounds like it came right out of a business textbook: raising cash, reducing debt and aiming to put out a more profitable product.

As any soaps fan knows, however, plots can turn unexpectedly.

Calpine, based in San Jose, is raising nearly $1 billion in cash from asset sales, and in the bargain positioning itself to profit from more volatile electricity prices in the year ahead.

In a series of deals, including the sale of a large block of Canadian gas, Calpine will raise cash to finish power plants and meet obligations for maturing debt and hybrid securities that begin coming due this fall.

At the same time, the energy company is reducing how much electricity it has tied up in long-term supply contracts to 51% of output for the remainder of the year from 65% a year ago.

The change means that Calpine has more megawatts to sell on the open market this summer, when consumer demand is projected to grow 2.5% nationwide and swell as much as 6% in California

Combined, the moves mean Calpine is poised to boost cash from asset sales and increase cash flow if market prices for electricity move higher this summer. Calpine has 88 power plants generating 22,000 megawatts and another 10 plants nearing completion.

The strategy isn't foolproof: Those gas reserves are real assets, and thus are a comfort to bond holders, who may fret at their disposal. Also, if it is a cool summer, the market price for electricity would understandably suffer, and Calpine, which had a weak first quarter, would too.

The independent power generator burned through about $400 million in cash in the first quarter. It had $1.4 billion in liquidity at the end of the quarter, but it also plans about $900 million in capital spending and faces two maturing debt obligations totaling about $570 million in the next two years. In addition, the first $225 million of a type of hybrid convertible security that Calpine sold comes due this fall, and many investors are likely to want to cash out.

Calpine traded at nearly $50 a share when those hybrid securities were first sold five years ago. At 4 p.m. yesterday in New York Stock Exchange composite trading, it stood at $3.98, up five cents.

Wall Street and investors are acutely concerned with how Calpine manages its ready cash, as even the company notes. "The whole issue on Calpine has been liquidity," says Bob Kelly, the chief financial officer. "One way to get that off the table is to build our cash balance."

For Calpine, building cash is in large part about the difference between fuel costs and the price it receives for electricity it generates. For example, if it costs Calpine $35 for the gas to generate a megawatt of electricity that the company sells for $50, then it earns $15.

Five years ago, when prices and demand for electricity were high, Calpine prospered by selling long-term power contracts. To hedge those contracts, the company locked in fixed gas prices partly by purchasing Canadian gas fields.

Since then, gas prices have risen, but electricity demand and prices haven't kept pace. Sometimes Calpine customers, many of them utilities, could come out ahead by relying on Calpine's fixed-price power, shutting off their own generating plants and selling their gas for a profit on the open market.

Now Calpine is going back to customers with an offer to provide the generating capacity only. Or, as in the earlier example, the utility pays $15 for the generating capacity and provides the gas at its own expense. While that may appear to be a small change, it makes a big difference on the balance sheet, because Calpine no longer needs as much gas in the ground as a long-term hedge.

"Our profit margin doesn't change," says Mr. Kelly. "We get the capacity value of the megawatts just the same as we do now, but we have removed the energy side of the trade so we are long gas. That frees up the opportunity to sell the gas."

Calpine has 230 billion cubic feet of natural gas in Alberta on the block. Mr. Kelly estimates the company paid about $1.25 per thousand cubic feet for that gas and recent Canadian deals suggest the company could now get $2 per thousand cubic feet. At that price, Calpine's Alberta gas reserves represent a 60% return on a three-year investment.

But the deal looks even better from a balance-sheet perspective, since Calpine intends to pay off some bank debt and then use most of the proceeds to buy back bonds that are trading for about 60 cents on the dollar. Put it all together: Calpine bought gas for $1.25, will sell it for $2 and use the cash to repay nearly $3 of debt.

"We've doubled our money in 2½ to three years," says Mr. Kelly. "People ought to be happy."

Yet the enthusiasm on Wall Street has been restrained. Calpine shares have gained little since the plan was announced June 10, and its bonds have lost ground, trading down another 25 cents yesterday.

The tepid response is tied to the view that the gas on Calpine's balance sheet is a core asset, with some creditors seeing billions of cubic feet of gas as a cushion against a hard landing for their bonds.

"That's not the way to look at it," counters Mr. Kelly. "If anyone is looking at gas as security on the bonds, then they ought to sell the bonds."

The other key to Calpine's current restructuring is higher power prices that will spur cash flow, and for that Calpine could use a heat wave. Consumers weather cold with natural gas and other sources of energy, but most rely on electrically powered air conditioners to beat the heat. Too many cool and breezy days, however, and air conditioners get turned off.

Bob Jensen's threads on accounting for derivative financial instruments are at http://www.trinity.edu/rjensen/caseans/000index.htm 

PwC provides a summary of major issues in the hot debate over how to account for stock options --- http://www.pwcglobal.com/extweb/pwcpublications.nsf/docid/F108DCCEFCCF1D5385256E9A006C7005 

Bob Jensen's threads on accounting for stock options --- http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm 

Question
How can you download an entire Website?

One answer
HTTrack Website Copier 3.32-2 http://www.httrack.com/ 

HTTrack is a free (GPL, libre/free software) and easy-to-use offline browser utility.

It allows you to download a World Wide Web site from the Internet to a local directory, building recursively all directories, getting HTML, images, and other files from the server to your computer. HTTrack arranges the original site's relative link-structure. Simply open a page of the "mirrored" website in your browser, and you can browse the site from link to link, as if you were viewing it online. HTTrack can also update an existing mirrored site, and resume interrupted downloads. HTTrack is fully configurable, and has an integrated help system.

WinHTTrack is the Windows 9x/NT/2000/XP release of HTTrack, and WebHTTrack the Linux/Unix/BSD release. 

See the download page.

Peabody Essex Museum (art history site founded in 1799) ---  http://www.pem.org/homepage/ 

Where "Big Brother" still decides what you may read and learn!

"Vietnam Orders Net Clampdown," Wired News, June 8, 2004 --- http://www.wired.com/news/politics/0,1283,63764,00.html?tw=newsletter_topstories_html 

Vietnam has ordered local governments nationwide to closely monitor Internet use and enforce regulations aimed at cracking down on "bad information" sent or read on the Web, an official said Tuesday.

The move comes after the communist country sentenced several dissidents to long prison terms over the past two years for using the Internet to criticize the government and promote democracy.

Continued in the article

The official Viet Nam weekly news site is at http://vietnamnews.vnagency.com.vn/ 

Disney's Nemo is a big success in Viet Nam theatres --- http://snipurl.com/NemoInVietNam 

The Atlantic Online's Poetry Pages (history, literature) --- http://www.theatlantic.com/unbound/poetry/ 
Includes audio readings of poems.

THE ATLANTIC ONLINE ( www.theatlantic.com ) has a two-fold mission: first, to serve as The Atlantic Monthly's home on the Internet, presenting the magazine's digital edition and continually building a useful online archive; second, to serve as the home of Atlantic Unbound, an online journal that extends the magazine's coverage of books, literature, and culture. Each month The Atlantic Online offers the contents of The Atlantic's print edition—augmented with links to related articles, other Web sites, and/or special online sidebars—alongside a weekly update of original Web-only features in Atlantic Unbound. The site offers access to back issues of The Atlantic from November 1995 (when the magazine first appeared on the Web) to the present, as well as hundreds of articles selected from the magazine's extensive archive. The Atlantic Online is also home to an interactive forum, Post & Riposte. Below is an overview of the site, with links to all of its principal pages.

IBM recently completed its acquisition of PricewaterhouseCoopers' global management consulting and information technology services business, PwC Consulting. As a result, PwC Consulting is no longer a part of the PricewaterhouseCoopers network of firms, and is now a part of the IBM Global Services business unit.  IBM (including IBM Global Services) and PricewaterhouseCoopers are not the same organization, and neither governs or is affiliated with the other, or any affiliate, subsidiary or division of the other --- http://www-1.ibm.com/services/us/index.wss/home 

PwC, however, intends to enter new lines of consulting and continue tax consulting.  The PwC Advisory Service site is at http://www.pwcglobal.com/Extweb/service.nsf/docid/3EC79B0CC612B1D485256E6D00507050 

Question
Do you think this type of consulting meets the independence test?

"PwC Launches New Performance Risk Management Service," AccountingWeb, June 17, 2004 --- http://www.accountingweb.com/cgi-bin/item.cgi?id=99330 

PricewaterhouseCoopers announced this week a new Performance Risk Management (PRM) advisory service for CEOs, CFOs and board directors. The new PRM service will help corporations improve the quality and adequacy of management reporting, especially in the area of identifying risks that could impact short and long term performance. The service will be supported by risk management software licensed from Metapraxis Limited. PRM provides a fresh approach to reporting, analyzing, predicting, and monitoring key business and financial metrics, allowing management to focus their attention on steps to improve performance and thus shareholder value. The service introduces greater transparency between the finance and business communities through the adoption of common views of key metrics.

"US companies are aggressively evaluating their core processes to improve efficiency and enhance controls to meet the requirements of Sarbanes-Oxley. They now appreciate the need to sustain these core processes and evaluate performance risk. The monitoring of performance risks on a timely basis will become an essential business requirement," said Fred Cohen, a partner with the US firm of PricewaterhouseCoopers LLP.

June 22, 2004 reply from John Corless [corlessj@CSUS.EDU] 

Rather than focusing on other services provided to audit clients to determine independence, we should focus on how big the fees from any one client are to any one partner’s total fees. Even where only audit work is done, if the audit fee exceeds 20% of the total fees for any one partner, I think independence is compromised.

John Corless
Professor of Accountancy
CSU-Sacramento
Sacramento, CA 95819-6088

Bob Jensen's threads on PwC's auditing scandals are at http://www.trinity.edu/rjensen/fraud.htm#PwC 

"Make a Date, Meet a Mate Online," Reuters, Wired News, June 12, 2004 --- http://www.wired.com/news/culture/0,1284,63827,00.html?tw=newsletter_topstories_html 

Rick, a website developer from Columbus, Ohio, remembers his divorce nearly four years ago with an extra tinge of bitterness: His ex-wife remarried the same day to a man she met via the Internet.

"After we decided to split, we were still living together for awhile and she got online," Rick, 29, said. "They ended up meeting and two days after that, she was wearing his ring."

Rick later tried his own luck at a Web dating forum, but said a promising flirtation with a woman turned sour after several weeks of e-mail contact. He finally met a new love online, but not at a dating site -- the unsuspecting sweetheart sent him a message to compliment a music disc he had recorded.

"It's blossomed very naturally as opposed to anything else I've experienced online," he said.

While the Internet has arguably increased the chances of meeting potential mates, it carries its own share of heartbreak and growing complaints about false profiles, bad behavior and ill-suited matches.

A number of online daters and Internet sites are taking matters into their own hands, critiquing these services and warning their peers of the pitfalls of Web hook-ups.

Some review sites, like Date Seeker, compare the attributes of dating services, give tips for online dating safety and recommend ways to tweak a profile for better results. They distinguish between sites like Match.com or eHarmony, which purport to seek meaningful matches for the single gal and guy, versus more casual encounters at Lavalife or ethnically targeted sites like JDate for Jewish singles.

Online daters can find reader polls on favorite dating sites, a breakdown of broad and specialty sites and personal testimonies. At least 29 million Americans, or two out of five singles, used online dating services last year, and that market is expected to keep growing over the next five years.

But amid the triumphant tales of e-mails that end in wedding bells, a growing number of online daters are voicing complaints. At eDateReview, some of the most popular match-up sites garner lukewarm ratings.

The most frequent complaints are that far more men are online than women and a lack of protection against sexual predators or cheating lovers, said Michael Kantor, an information technology project manager in Arlington, Virginia, who runs the site.

"Men lie about their availability, whether they have a steady girlfriend or wife, and women tend to lie mostly about their looks," Kantor said.

One of 27 critiques of the site comes from a reviewer named Rich, who gives Match.com a two-star rating out of five potential stars.

"I've come to this conclusion -- there are not a whole lot of good-looking women on these dating sites," he wrote. "'Average' (in a profile) means fat, 'extra pounds' means bring a defibrillator to the date."

A reviewer identifying herself as Natalie closed her account at eHarmony after a match that didn't click, saying: "I'll take my chances on meeting my next date the conventional way."

Online dating sites say their membership rules require honest representation and prohibit harassment or abusive behavior. Some recognize that credibility problems could harm a business estimated to grow from $398 million in 2004 to $642 million within four years, according to Jupiter Research.

"We employ a lot of people that spend a lot of time reviewing the content posted on the site," said Tim Sullivan, chief executive of top dating site Match.com. "We're a brand that tends to attract people seeking a serious relationship."

Sullivan said that each month, as many as 3,000 profiles are rejected right off the bat, while another 2,000 are removed because of complaints of dishonesty from other members. A six-person "fraud and abuse" team investigates more serious breaches.

Sullivan said Match.com was testing a pilot program in Dallas this month offering members a chance to get a professional "certified" photo posted online, bearing a Match.com stamp with the date it was taken.

Nate Elliott, Jupiter Research's analyst of online dating, said the grievances were just a sign of how mainstream the practice has become.

"The things people do online to deceive people are the same things they do offline," Elliott said. "The point of connection is on a website instead of a bar or a gym."

From the Scout Report on June 11, 2004

The Kissinger Telcons (history, government) http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB123/index.htm 

The National Security Archive at George Washington University has developed a fine reputation for its electronic briefing books and other publications, many of which have arisen from requests filed under the Freedom of Information Act (FOIA). Released in late May 2004, this 123rd electronic briefing book in the ongoing series includes ten telcons (transcripts of telephone conversations) from the files of Henry Kissinger's collection at the Library of Congress. The subjects covered in these intriguing documents include talks on how to spin the My Lai massacre in Vietnam, the bombing of Cambodia ordered by President Nixon, and conversations with Alexander Haig. Some of the other telcons released as part of the electronic briefing book include conversations with Motion Picture Association president Jack Valenti and Chase Manhattan Bank chairman David Rockefeller. The final document of note here is a helpful finding aid to the Kissinger telcons, created by the Nixon Presidential Materials Staff of the National Archives and Records Administration.

 

Facing Up to Multivariate Data

The Future of Faces These days, all the hot-shot graphics folks are trying to figure out how to create realistic human faces with computer imagery. But photorealism can be pretty creepy. http://www.technologyreview.com/blog/blog.asp?blogID=1444&trk=nl 

In 1971 was at Stanford University when Herman Chernoff developed the interesting theory for depicting multivariate data as features of faces that could be compared visually by humans.  I later applied his computer program in a AAA monograph: Jensen, R.E. (1976). Phantasmagoric accounting: Research and analysis of economic, social and environmental impact of corporate business, Studies in Accounting Research #14 (Sarasota, FL: American Accounting Association, Chapter 6)

Shane Moriarity later applied this program in a financial reporting experimentr.  
Moriarity, S. (1979). "Communicating financial information through multidimesional graphics," Journal of Accounting Research 17, Spring, 205-224.

For more on this see http://www.trinity.edu/rjensen/00jensen/research/232wp/232wp.doc and http://www.trinity.edu/rjensen/00jensen/research/232wp/232head.doc 

June 11, 2004 reply from Jagdish Gangolly [JGangolly@UAMAIL.ALBANY.EDU] 

Bob,

 

Nowadays it is very easy to draw these faces. I give drawing them for financial data as a routine exercise

in my graduate statistics course (I usually ask the students to take paired samples of

companies that failed/did not fail, and try various permutations of features/data to determine which assignment

of data to features seem to produce reasonable fit.

 

There are many programs that help draw these (S-Plus, my favourite, has 'faces' routine; 'faces' in SAS even draws

asymmetric faces). Some standalone programs that   do the same include:

 

http://people.cs.uchicago.edu/~wiseman/chernoff/

http://hesketh.com/schampeo/projects/Faces/chernoff.html

 

Some tutorials on faces are:

 

Visualization Techniques of Different Dimensions http://seamonkey.ed.asu.edu/~behrens/asu/reports/compre/comp1.html

Scientific Visualisation: A Practical Introduction: A one day course http://www.epcc.ed.ac.uk/computing/training/document_archive/SciVis-course/SciVis.book_1.html

 

Jagdish

From Syllabus News on June 15, 2004

U. Miami Partners with Local K-12 for Online High School

The University of Miami has partnered with a local private K-12 school to start an online high school, the Miami Herald reported. The Sagemont School last fall approached UM with plans for a partnership that would let UM professors do research on online education, while Sagemont gets the benefit of the university's name on its program, officials at both schools said.

The newly inaugurated University of Miami Online High School now has 225 students in 40 countries, most of them professional athletes and performers who travel often and wouldn't be able to attend a traditional high school. The virtual school serves ninth through 12th grades, and next year will start to offer eighth grade as well. It is fully accredited and offers college-level courses that earn the students college credits.

---

Department of Kudos: Virginia Tech, MIT, eCollege Honored

Virginia Tech received a 21st Century Achievement Award in Science for its development of a 2,200 processor supercomputer from a cluster of 1,100 Power Mac G5 computers. Called System X, the system is currently the world’s third fastest computer. The award was sponsored by information tech journal Computerworld.

“The goal of the Virginia Tech project was to develop novel computing architectures that reduce their cost, time to build, and maintenance complexity. As a result, institutions with relatively modest budgets can now afford to build a premier supercomputer," said Hassan Aref, dean of Virginia Tech's College of Engineering.

Also, MIT and Sapient Inc. were also honored for their work to develop MIT OpenCourseWare (MIT OCW), which was named as the best application of IT in the field of education. MIT OCW offers free and open online access to the educational materials from 701 MIT courses, spanning MIT's five schools and all 33 of its academic disciplines. Anne Margulies, executive director of MIT OCW, said that since the launch of the MIT OCW pilot in 2003, the Web site has received traffic from users in more than 215 countries, city-states and territories, “making it a truly global initiative.”

Finally, course management system developer eCollege was named “Technology Company of the Year” by the Colorado Software and Internet Association, which has handed out the award for the last 10 years.

An independent panel of judges made up of 30 technology executives evaluated eCollege on the following criteria: Mission and Vision, Market Size and Strategy, Solid Business Practices, R&D, Product Innovation and Relevance, Influence on Industry Growth, Financial Growth, Culture, Employee Retention, Community Involvement, and Contributions to Customer Success. The 2004 CSIA award was presented during a ceremony held at the University of Denver.

 

On university campuses, students cherish their facebooks -- paper booklets that serve as student directories with mug shots. Now, a bunch of Harvard students are taking the concept nationwide with a student-focused social network --- http://www.thefacebook.com/ 

Thefacebook is an online directory that connects people through social networks at colleges. We have opened up Thefacebook for popular consumption at:

BC • Berkeley • Brown • BU • Chicago • Columbia • Cornell • Dartmouth • Duke Emory • Florida • Georgetown • Harvard • Illinois • Michigan • Michigan State MIT • Northeastern • Northwestern • NYU • Penn • Princeton • Rice • Stanford Tulane • Tufts • UC Davis • UCLA • UC San Diego • UNC UVA • WashU • Wellesley • Yale

Your facebook is limited to your own college or university.

You can use Thefacebook to: 

• • Search for people at your school 
• • Find out who is in your classes 
• • Look up your friends' friends 
• • See a visualization of your social network

"College Facebook Mugs Go Online," by Rachel Metz, Wired News, June 9, 2004 --- http://www.wired.com/news/culture/0,1284,63727,00.html?tw=newsletter_topstories_html 

Maya Chard-Yaron, 19, was poked about 10 times last week. But rather than getting annoyed at the unsolicited jabs, Chard-Yaron kind of enjoyed it -- especially since friends and acquaintances were doing the poking through a social-networking website, Thefacebook.

On Thefacebook, poking is a way of saying "hi" to would-be contacts, a method to strike up a conversation without adding the person as a friend.

And there's quite a bit of poking going on. Chard-Yaron, a Southern Californian who will be a junior at Columbia University in the fall, is one of about 250,000 students at 34 colleges across the United States intrigued by Thefacebook. Unlike social websites like Friendster and orkut, Thefacebook is meant only for college students and alums.

"I know it sounds stupid but when I log onto Thefacebook and I see this person poked me I think, 'Aww,' 'cause I miss them," she said.

Thefacebook is modeled after schools' traditional facebooks -- booklets with names, photos, interests and other information about students. The site started in February and is expanding rapidly. Engineered and initially intended just for students at Harvard University, Thefacebook's creators -- all five of them Harvard students -- hope to have their site available to about 200 American colleges by fall.

By registering on Thefacebook, students can compile lists of friends, send messages, list their classes and summer vacation plans, and divulge as much -- or as little -- personal contact information as they like.

Mark Zuckerberg, a 20-year-old Harvard student, came up with the idea in January. Harvard has facebooks for different residential houses, but students can't search those they don't belong to, Zuckerberg said. He said he thought it would be a good idea to put an all-school facebook online, where students could access others regardless of where they lived. By early February, after about a week of programming time, Zuckerberg's site was up and running at Harvard.

With an early pool of about 4,000 students, Thefacebook grew at the school to where it now boasts about 95 percent of the student population as members, Zuckerberg said.

"When it took off at Harvard I thought it'd be cool to make it a multi-school thing," he said.

In mid-February, Thefacebook's creators opened the site to students at other colleges, and the site's popularity kept rising.

"We've had to run to catch up with the number of users," said Chris Hughes, another Thefacebook collaborator.

Zuckerberg was surprised at his site's success initially.

"I expected that a few people would do it at Harvard and they'd tell their friends, but I didn't expect it would take hold as this all-inclusive directory," he said.

Some changes are also in store for Thefacebook users. Zuckerberg wants to enable users to offer more information about themselves, like extra pictures or their own websites. For now, however, students are just having fun discovering the site's capabilities.

Chard-Yaron is one of many whose friends e-mailed her a link to the site, asking her to join. At first, Chard-Yaron thought it was "weird" and "sketchy," but she created an online profile for herself anyway this spring, before exams and papers got underway. She said now she checks the site daily.

The site's founders are banking on its long-term health. Though the costs of running it have increased from about $85 to almost $3,000 a month, Thefacebook is now self-sufficient, thanks to an influx of ad revenue, Hughes said. Ads from search powerhouse Google will pay for the site for a while, Zuckerberg said.

The founders also aren't paying themselves, but they will hire a few people to help with the summertime expansion, Hughes said.

There have also been offers of outsider investments and even a few interested in buying the site, Zuckerberg said, but the founders turned down several buyout offers (they wouldn't say who made the offers or for how much). They aren't interested in cashing out just yet.

"We've had a few approaches," Hughes said, "but we like what we're doing to the site."

Question
What services are available to help you create a Weblogs and blogs?

Answer from Kevin Delaney

"Blogs Can Tie Families, And These Services Will Get You Started," by Kevin J. Delaney, The Wall Street Journal, June 10, 2004, Page B1 --- http://online.wsj.com/article/0,,personal_technology,00.html 

Online Web logs, or blogs, have long been a bastion of techy types, those prone to political rants, and assorted gossips. But now they're making inroads among families who want to keep up on each other's doings.

Blogs are personal Web sites where you can post things, including photos, stories and links to other cool stuff online. They resemble a journal, with information arranged chronologically based on when you post it. The simple form is a major virtue -- you don't have to think too hard about how to organize your blog.

I've used a variety of Web sites in recent years to share photos of my children with their grandparents and other family far way. Lately, I've wondered if it wouldn't be better to put photos, digital videos and other links I want to share with my family on one Web site, making it easier to manage and access them from afar.

With this in mind, I've been testing three of the most popular blogging services, which are available free or for a small monthly fee.

Blogger, a free service from Google at www.blogger.com, promises you can create a blog in "three easy steps." After selecting a user name and password, I chose a name and a custom Web address. Then I selected a graphic look -- "Dots," a simple design with a touch of fun that seemed right for a family site -- from 12 attractive templates. After that, Blogger created my blog. Within a few minutes, I was able to put a short text message on the site and have Blogger send e-mails to alert my wife and father of the blog's existence.

Blogger, like the other services, lets you further customize the organization and look of your site and put several types of information on it. Sending text to the blog is as easy as sending an e-mail. (In fact, Blogger and the other services I tested even let me post text to my blog using standard e-mail.) A Blogger button on Google's toolbar software, which must be downloaded and activated separately, offers the useful option of posting links to other Web sites on your blog as you surf the Web. Another nice feature lets you designate friends or family members who can post to the main blog.

To put photos on any blog hosted by Blogger, you have to download another free software package from Picasa called Hello. Hello blocks connections to computers operating behind what's known as a proxy server, which is a pretty typical corporate configuration. As a result, I couldn't upload photos from my work PC, though I was able to do so from home.

Blogger lacks some advanced features other services offer. But its main shortcoming is that it doesn't let you protect your site by requiring visitors to use a password to enter. I don't want strangers to look at photos of my kids or search notes I'm writing for family members. A Google spokeswoman declined to comment on any plans for such a feature, citing restrictions related to the company's planned initial public offering.

TypePad from Six Apart, at www.typepad.com, provides a higher-powered service for creating blogs that does let you password protect your site. You can also upload a broader range of files, including video clips. But the tradeoff is a level of complexity that is unnecessarily frustrating.

The company offers three monthly subscription rates starting at $4.95. It costs $8.95 a month for the version that allows you to create photo albums, a feature that I consider essential for a family blog. Albums allow you to avoid filling up the main blog site with strings of photos. If you choose to password protect your blog, though, TypePad won't let you link your blog directly to photo albums. It's a surprising shortcoming, and Six Apart doesn't disclose it on its site. Its support staff gave me complicated instructions for another way to make such a link, but they never worked for me.

Six Apart Chief Executive Mena Trott says the photo-album-linking problem is a bug the company is working to fix. She acknowledges that parts of the service could be easier to use, and says improvements will be made. She also says that in practice Six Apart lets most users exceed the company's miserly limits on blog storage space, which are 100 megabytes for the $8.95-a-month plan.

AOL's Journals service, which requires an AOL subscription, is about as simple to use as Blogger. It allows you to restrict public access to your blog and provides nice albums for grouping photos. If you do decide to restrict access, your visitors will have to register with AOL. That registration is free, though, and many people already have an AOL "screen name" because they use the company's instant messaging service.

But other advanced features, such as the button in Blogger for easy linking to Web sites, are missing. In addition, the layout templates aren't nearly as attractive graphically as Blogger's and TypePad's. AOL says it's working on all of these issues, and expects to add a Web linking button and phase out the registration requirement later this year.

I'm not completely satisfied with Journals, and I would be happy to use Blogger or TypePad if they manage to work out their issues with photo albums and passwords. In the meantime, though, I've chosen AOL's Journals to create my family blog.

"WEBLOGS COME TO THE CLASSROOM," by Scott Carlson, The Chronicle of Higher Education, November 28, 2003, Page 33

They get used to supplement courses in writing, marketing, economics, and other subjects

Increasingly, private life is a public matter.  That seems especially true in the phenomenon known as blogging.  Weblogs, or blogs, are used by scores of online memoirists, editorialists, exhibitionists, and navel gazers, who post their daily thoughts on Web sites for all to read.

Now professors are starting to incorporate blogs into courses.  The potential for reaching an audience, they say, reshapes the way students approach writing assignments, journal entries, and online discussions.

Valerie M. Smith, an assistant professor of English at Quinnipiac University, is among the first faculty members there to use blogs.  She sets one up for each of her creative-writing students at the beginning of the semester.  The students are to add a new entry every Sunday at noon.  Then they read their peers' blogs and comment on them.  Parents or friends also occasionally read the blogs.

Blogging "raises issues with audience," Ms. Smith says, adding that the innovation has raised the quality of students' writing;

"They aren't just writing for me, which makes them think in terms of crafting their work for a bigger audience.  It gives them a bigger stake in what they are writing."

A Weblog can be public or available only to people selected by the blogger.  Many blogs serve as virtual loudspeakers or soapboxes.  Howard Dean, a Democratic presidential contender, has used a blog to debate and discuss issues with voters.  Some blogs have even earned their authors minor fame.  An Iraqi man--known only by a pseudonym, Salaam Pax--captured attention around the world when he used his blog to document daily life in Baghdad as American troops advanced on the city.

Continued in the article.

Bob Jensen's threads on weblogs and blogs are at http://www.trinity.edu/rjensen/245glosf.htm#Weblog 

"Who's Seeding the Net With Spyware?  Young surfers pick up paychecks for posting misleading pitches armed with invasive programs.," by Emily Kumler, PC World , June 15, 2004 --- http://www.pcworld.com/news/article/0,aid,116512,00.asp 

It's tough enough sometimes to figure out where you picked up that spyware, but have you ever wondered who planted that digital parasite?

It's likely a young man, maybe a college student, just making a few bucks spreading pop-up ads that contain a package unwelcome by many. And it's a growing cottage industry

How It Works Spyware follows your Internet surfing habits and serves up advertisements. You typically pick up spyware by clicking on links, which may not make it clear that you're downloading a "bonus" program when you read an ad or download a program you want.

The Federal Trade Commission defines spyware as "software that aids in gathering information about a person or organization without their knowledge and which may send such information to another entity without the consumer's consent, or asserts control over a computer without the consumer's knowledge." The federal government and several states are considering antispyware laws, and Utah recently enacted one.

FTC and industry leaders have urged Congress to resist spyware legislation, instead pushing for the industry to adopt self-regulatory practices. They fear that proposed laws define the practice too vaguely, and would prohibit other marketing practices that benefit consumers. But some lawmakers worry that the tech industry will not regulate spyware aggressively enough to protect consumers.

Meanwhile, computer users continue to face the side effects of spyware on their systems: bogged-down Internet connections, identity theft, lost documents, system problems, and potential loss of privacy.

Who's Behind It The people distributing the links for spyware downloads are paid about 15 cents every time an unsuspecting surfer clicks on their misleading bait.

"Friends signed me up one night, after we'd been drinking," says one twenty-something man, who plants spyware for pay. "They said it was an easy way to make some money."

"All I had to do was sign up and post fake ads, saying things like 'to see my picture click here.' Then when they clicked, it told them they had to download software to see the pictures."

But the user downloaded no pictures; instead, they got the greeting, "Come back later to see my photo." The ad is bogus, but the contamination of the computer is real.

He says open forums and other unregulated sites are the best places to post ads, because large numbers of people are likely to click on the phony links.

"You have to move around," he says, noting that if users complain, he'll be kicked off a site, or a section of a site. For example, he will just move to a different part of a classified advertisement site, he says. "It's really easy, so reposting your ad is not a big deal."

At 15 cents per hit, he got checks every two weeks for a few hundred dollars each.

"I could have made a lot more," he says, adding that he really isn't doing it anymore. "All I had to do was put more ads up and I would have doubled or tripled my profits."

What's the Risk? The foot soldiers who spread spyware may also become victims of the companies behind the software.

Many companies paying individuals to spread spyware post a disclaimer on their own Web site. It often contains a clause telling readers that if they commit fraud the company has the right to pull their paycheck.

However, the new Utah Spyware Control Act and other privacy laws sometimes invoked to combat spyware consider posting spyware to be fraud.

The spyware spreaders may not be reading the disclaimer themselves. But they do understand the company is paying them to trick people into downloading software, the young man says.

Does he feel any remorse for contaminating the computers of naive users? "Look, they're perverts if they click on my ads," he says, noting that the ads imply pornographic pictures await. "I say some nasty stuff, so, no, I don't feel bad." Anyone online should have a spyware blocker, spam blocker, and a firewall anyway, he said. "If they don't, they're just stupid."

A Challenging Battle Placing ads online can be a tempting and easy way to make money from home, notes Ray Everette-Church, chief privacy officer for antispam product vendor Turn Tide.

"It is very successful," Everette-Church says. "Hundreds of thousands of dollars a month is generated in this tiered structural referral." He is serving as an expert witness for the plaintiffs in an ongoing adware case arguing against pop-up ads.

Millions of Americans online haven't protected their PCs, and pursuing perpetrators of spyware is more complicated than in other criminal investigations, according to Mozelle Thompson, an FTC commissioner.

"It's hard to identify how many companies are engaged in dangerous spyware, or spyware in general," Thompson says. "The definition of spyware is too broad."

The surreptitious nature of spyware makes it more difficult to track who, where, and how the spyware is disseminated, Thompson told a House subcommittee at a recent hearing.

"Consumer complaints, for instance, are less likely to lead directly to targets than in other law enforcement investigations, because consumers often do not know that spyware has caused the problems or, even if they do, they may not know the source of the spyware," he said at the April hearing.

How to protect against spyware intrusions into your computer --- http://www.trinity.edu/rjensen/ecommerce/000start.htm#SpecialSection 

June 23, 2004 message from Irv Gleim [irvin_gleim@gleim.com] 

The IMA will make substantial changes to the CMA Exam beginning July 1, 2004. These changes will include a new essay section that incorporates material from all four exam sections. In addition, CPAs will no longer be waived from the financial accounting and reporting material, and will instead be waived from economics and business applications topics.

However, there is good news; the current exam will be available until December 31, 2007, allowing plenty of time for completion. BUT, you must apply by June 30, 2004. In other words, APPLY NOW! Click the link below to open the online registration form.

https://www.imanet.org/forms/examregform.asp 

Gleim will continue to provide up-to-date materials throughout the current exam's duration. Gleim will also release a new edition for the revised exam this summer so that we will be able to meet all of your students' certification needs. You can view more information on Gleim's CMA Review and see how we will prepare your students to PASS by visiting the link below:

http://www.gleim.com/accounting/cma?lj062204

Bob Jensen's threads examination review courses are at http://www.trinity.edu/rjensen/bookbob1.htm#010303CPAExam 

From The Wall Street Journal Accounting Educators' Review on June 11, 2004

TITLE: Outside Audit: Goodyear and the Butterfly Effect 
REPORTER: Timothy Aeppel 
DATE: Jun 04, 2004 
PAGE: C3 
LINK: http://online.wsj.com/article/0,,SB108629544631828261,00.html  
TOPICS: Accounting Changes and Error Corrections, Pension Accounting, Restatement

SUMMARY: Goodyear Tire & Rubber has announced the amount of its restatement from problems identified in 2003. The company as well has announced further restatements due to changes in the discount rate it uses for pension liability calculations.

QUESTIONS: 
1.) For what reason is Goodyear Tire & Rubber restating earnings for the last five years?

2.) What accounting standards require restatements of past financial results? Under what circumstances are restatements required? What other types of accounting changes are possible? How are these categories of accounting changes presented in the financial statements?

3.) In general, what adjustment is Goodyear Tire & Rubber making to its accounting for defined benefit pension plans?

4.) Discuss the details of the change in accounting for the defined benefit pension plan. Specifically, define the discount rate in question and state how it is used in pension accounting.

5.) Had the company not uncovered the issues identified under question #1, do you think they would be making the changes identified in questions #3 and #4? Why or why not?

6.) Do you think that changes in the discount rate used in pension accounting are made by other companies? When do you think companies might change this rate? In general, what type of accounting treatment would you recommend for such a change? Support your answer.

Reviewed By: Judy Beckman, University of Rhode Island 
Reviewed By: Benson Wier, Virginia Commonwealth University 
Reviewed By: Kimberly Dunn, Florida Atlantic University

"Outside Audit: Goodyear And the Butterfly Effect:  A Valuation Rate Is Shaved By Half a Point and Presto, $100.1 Million Goes Poof," by Timothy Aeppel, The Wall Street Journal, June 4, 2004, Page C3 --- http://online.wsj.com/article/0,,SB108629544631828261,00.html

There's a costly oddity tucked into Goodyear Tire & Rubber Co.'s recent earnings restatement.

As part of a larger revision reaching back five years, the U.S.'s largest tire maker changed the interest-rate assumptions associated with its domestic retirement plans. The upshot: By slicing half a point off a rate used to value the company's obligations to its pension fund and other post-retirement benefit plans, Goodyear also lopped off a total of $100.1 million in earnings over that period.

This may be the first time a major company has restated earnings for this reason, although it was just one of several accounting issues the Akron, Ohio, tire maker addressed in its restatement announced May 19. Goodyear has identified a series of accounting irregularities over the past year and is the target of a continuing investigation by the Securities and Exchange Commission.

"I have a feeling that while they were scrubbing, they decided to scrub everything," says Jack Ciesielski, publisher of Analyst's Accounting Observer.

Keith Price, a Goodyear spokesman, says the change doesn't mean Goodyear sought to inflate earnings in the past by using an inappropriately high discount rate. Most of the reduction in earnings was the result of Goodyear having to record additional tax expenses, he notes. Mr. Price says Goodyear decided to change its methodology for calculating the rate it uses going forward and, since a broader restatement was already under way, chose to extend the new approach into the past as well.

The root of Goodyear's problem appears to be that it used an uncommon way of calculating the so-called discount rate it assumes for its traditional pension plan. A discount rate is simply an interest rate companies use to convert future values into their present-day terms. Companies calculate the pension-fund discount rate at the end of every year in order to project cash outflows in their retirement plans. The number changes from year to year. But it also tends to get buried in financial footnotes and overlooked.

The higher the discount rate, the less the current value of a company's future obligations to its retirees under its plans. So, in Goodyear's case, the older, higher discount rate lowered the company's projected benefit payments -- which also had the effect of raising its pretax income.

Goodyear's old method of setting the rate was to use a six-month average of corporate-bond rates. That's unusual, though not a violation of generally accepted accounting principles, says Mr. Ciesielski.

The more common and accurate approach is to pick a discount rate based on rates at a point in time near to when the calculations are being done. That provides a better snapshot of reality, especially in an era when rates are falling, as they have in recent years.

Sure enough, Goodyear's old methodology resulted in discount rates that were higher than those used by most other companies during the period in question. For instance, in its restatement, Goodyear cut the rate it used in 2001 to 7.5% from 8%. But a study by Credit Suisse First Boston notes that the median discount rate used by S&P-500 component companies that year was a far lower 7.25%. In fact, the study found only seven companies used rates of 8% or higher in 2001.

Goodyear's numbers are now more in line with other companies' and shouldn't require further adjustment, say analysts. But like many old-line companies with a relatively large cadre of older workers and retirees, Goodyear is expected to face pension problems for years to come, since its plans are underfunded by about $2.8 billion.

While Goodyear's pension concerns are not unique, Mr. Ciesielski says it is unlikely other companies will rush to restate earnings to reflect a new discount-rate assumption. Besides, coming up with the rate is still far from an exact science.

David Zion, CSFB's accounting analyst, says even companies that use identical methodologies can arrive at sharply different discount rates. Those with fiscal years ending in June would have different rates than those with years ending in December, for example. And multinational companies face another complication: "The discount rate for a Japanese pension plan will be different than the discount rate in Turkey," Mr. Zion points out.

In its restatement, Goodyear decreased overall pretax income by $18.9 million for the past five years as a result of its reassessment of the discount rate. And since Goodyear's pension plan is underfunded, the cut in the discount rate also magnified that negative condition. As a result, Goodyear had to add $160.9 million in liabilities to its balance sheet. The new liabilities forced Goodyear to record $81.2 million in additional tax expenses for 2002.

This restatement comes at a time Goodyear's accounting is still under heavy scrutiny. The company launched an internal probe last year after it said it found problems in internal billing and the implementation of a new computer system. It later said it had identified serious misdeeds by top managers in Europe and cases in which U.S. plants understated workers' compensation liabilities.

Bob Jensen' threads on accounting theory are at http://www.trinity.edu/rjensen/theory.htm 

Question
When is it unlawful for a legally married couple to file a joint tax return?

Answer
In response to an inquiry about tax filings, the Public Advocate  of the United States, Inc. received a letter from the IRS  confirming that it is unlawful for same-sex couples to file their taxes under any married status, even if the jurisdiction  in which the couple lives, recognizes such a union.

http://www.accountingweb.com/item/99326     

June 16, 2004 reply from Richard Newmark

Bob,

I wonder if Massachusetts same sex couples can file jointly on their Massachusetts state tax returns.

Rick

--------------------------------------

Richard Newmark
Associate Professor of Accounting
Monfort College of Business
Colorado State University
Greeley, Colorado 80639
http://PhDuh.com 

 

June 18, 2004 reply from Bob Jensen

It seems unlike that same-sex married couples can file Mass. Joint returns since the income tax in Mass. is based on the Federal Return where they cannot file joint tax returns.

California said no in AB 205

In 2003, California's legislators extended many of the state-granted spousal rights and responsibilities to domestic partners with Assembly Bill 205. The bill provides many of the rights and responsibilities heterosexual couples have to same-sex couples, including child visitation and custody rights and responsibility for debts to third parties. However, AB 205 does not include, for example, the ability for gay couples to file jointly on their state income tax --- http://www.californiaaggie.com/article/?id=2514 

Hi Robert,

I added your document to http://www.trinity.edu/rjensen/theory/WalkerToFarrington.htm 

I would not say that we are so much timid as we are squashed by lobbying pressures from industry.

Bob Jensen

Bob

I wish to ask you a favour again. I have written the attached as a submission to a review of the New Zealand Financial Reporting Act 1993. It is currently under review due to the imminent adoption of the IASB's standards. It has thrown New Zealand's application of differential reporting into confusion. My submission deals with the way in which accounting must be the pivot upon which creditor protection functions. What I would hope Americans find interesting is the degree to which we have played out your laws - the corporate solvency test and GAAP - in a way you are too timid to do.

The Government's discussion document to which the submission is a response is on this link:

http://www.med.govt.nz/buslt/bus_pol/bus_law/corporate-governance/financial-reporting/part-one/media/minister-20040315.html 

The letter is self-contained aside from the specific commentary at the end. Could you find space for it on your web-site?

Robert B Walker

Some old ones and some new ones forwarded by Auntie Bev

Ramblings of a retired mind

I was thinking about how a status symbol of today is those cell phones that everyone has clipped on. I can't afford one, so I'm wearing my garage door opener. Now everyone thinks that I'm cool, too.

I was thinking that women should put pictures of missing husbands on pop cans!

I was thinking about old age and decided that it is when you still have something on the ball but you are just too tired to bounce it.

I thought about making a fitness movie for folks my age and call it, "Pumping Rust".

I have gotten that dreaded furniture disease.... that's when your chest is falling into your drawers!

You know when people see a cat's litter box, they always say, "Oh, have you got a cat?" Just once I wanted to say, "No, it's for company!"

Employment application blanks always ask who is to be notified in case of an emergency. I think you should write, "A good doctor!"

Does a clean house indicate that there is a broken computer in it?

Why is it that no matter what color of bubble bath you use, the bubbles are always white?

Why do people constantly return to the refrigerator with the hopes that something new to eat will have materialized?

Why do people keep running over a string a dozen times with their vacuum cleaner, then reach down, pick it up, examine it, then put it down to give their vacuum one more chance?

Why is it that no plastic garbage bag will open from the end you first try?

Is it true that the only difference between a yard sale and a trash pickup is how close to the road the stuff is placed?

In winter, why do we try to keep the house as warm as it was in summer when we complained about the heat?

Why do old men wear their pants higher than younger men?

How come we never hear any "father-in-law" jokes?

If at first you don't succeed, shouldn't you try doing it like your wife told you to?

Why is it that men can react to broken bones as 'just a sprain' and deep wounds as 'just a scratch', but when they get the sniffles they are deathly ill 'with the flu' and have to be bedridden for weeks?

I was thinking about how people seem to read the Bible a whole lot more as they get older then it dawned on me, they were cramming for their finals. As for me, I'm just hoping God grades on a curve rather than pass/fail.

Forwarded by Auntie Bev --- Who's On First? --- http://susie1114.com/WhosOnFirst.html 

While driving to Concord, NH yesterday, Bob and Erika got silly in the car.  We dreamed up the following additions to the senior citizen's glossary.

Varicose veins = geriatric tattoos

Farts = prune tunes

Drool = cool

Nose pickin' = finger lickin'

I think we're losing it!

Golf quips forwarded by Auntie Bev

A man comes home from work and is greeted by his wife dressed in a sexy little nightie. "Tie me up," she purrs, "and you can do anything you want." So he ties her up and goes out for a round of golf. ++++++++++++++++++++++++++++++++++++++++++

A golfer asked his friend, "Why are you so late?" The friend replied, "It's Sunday. I had to toss a coin between going to church or playing golf and it took 25 tosses to get it right!" 
++++++++++++++++++++++++++++++++++++++++++

A gushy reporter told Jack Nicklaus, "You are spectacular, and your name is synonymous with the game of golf. You really know your way around the course. What's your secret?" Nicklaus replied, "The holes are numbered." ++++++++++++++++++++++++++++++++++++++++++

A young man and a priest are playing together. At a short par-3 the priest asks, "What are you going to use on this hole, my son?" The young man says, "An 8-iron, father. How about you?" The priest says, "I'm going to hit a soft seven and pray." The young man hits his 8-iron and puts the ball on the green. The priest tops his 7-iron and dribbles the ball out a few yards. The young man says, "I don't know about you father, but in my church when we pray, we keep our head down." ++++++++++++++++++++++++++++++++++++++++++

An American went to Scotland and played golf with a newly acquainted Scottish golfer. After a bad tee shot, he played a "Mulligan" which was an extremely good one. He then asked the Scot, "What do you call a Mulligan in Scotland?" "We call it hitting 3." 
++++++++++++++++++++++++++++++++++++++++++

Police are called to an apartment and find a woman holding a bloody 5-iron standing over a lifeless man. The detective asks, "Ma'am, is that your husband?" "Yes," says the woman. "Did you hit him with that golf club?" "Yes, yes, I did." The woman begins to sob, drops the club, and puts her hands on her face. "How many times did you hit him?" "I don't know, five, six, maybe seven times... just put me down for a five."

Forwarded by Dr. D

Actually Taken From Classified Ad's In Newspapers:

 FREE YORKSHIRE TERRIER. 8 years old. Hateful little dog.  Bites!

 ----------------------------------

 FREE PUPPIES: 1/2 Cocker Spaniel, 1/2 sneaky neighbor's dog

 -----------------------------

 FREE PUPPIES.. Part German Shepherd, part stupid dog

 ------------------------------

 GERMAN SHEPHERD 85 lbs. Neutered. Speaks German. Free

 -------------------------------------

 FOUND: DIRTY WHITE DOG. Looks like a rat ..... been out a while. Better be a reward.

 -----------------------------------

 COWS, CALVES NEVER BRED... Also 1 gay bull for sale

 -------------------------------

 NORDIC TRACK $300 Hardly used, call Chubby

 -------------------------------------

 GEORGIA PEACHES, California grown - 89 cents lb.

 -----------------------------------------

 NICE PARACHUTE: Never opened - used once

 -----------------------------------------

 JOINING NUDIST COLONY! Must sell washer and dryer $300

Received from Noelle

Physicians: a. The number of physicians in the U.S. is 700,000. b. Accidental deaths caused by Physicians per year are 120,000. c. Accidental deaths per physician is 0.171. (Statistics courtesy of U.S.Dept. of Health & Human Services)

Now think about this:

Guns: a. The number of gun owners in the e U.S. is 80,000,000. b. The number of accidental gun deaths per year (all age groups) is 1,500. c. The number of accidental deaths per gun owner is 0.000188.

Statistically, doctors are approximately 9,000 times more dangerous than gun owners.

Remember, "Guns don't kill people, doctors do."

FACT: NOT EVERYONE HAS A GUN, BUT ALMOST EVERYONE HAS AT LEAST ONE DOCTOR.

Please alert your friends to this alarming threat. We must ban doctors before this gets completely out of hand!!!!!

Out of concern for the public at large, I have withheld the statistics on lawyers for fear the shock would cause people to panic and seek medical attention!

Forwarded by Paula

A burglar broke into a house late one night. He shone his flashlight around, looking for valuables, and as he picked up a CD player to place in his sack, a strange, disembodied voice echoed from the dark saying, "Jesus is watching you."

He nearly jumped out of his skin, clicked his flashlight off and froze. When he heard nothing more after a bit, he shook his head, promised himself a vacation after the next big score, then clicked the light back on and began searching for more valuables. Just as he pulled the stereo out so he could disconnect the wires, clear as a bell he heard, "Jesus is watching you."

Freaked out, he shined his light around frantically, almost dropping it in horror. Looking for the source of the voice, his flashlight beam came to rest on a parrot off in the corner. "Did you say that?" He hissed at the parrot. Yep," the parrot confessed, then squawked, "I am just trying to warn you."

The burglar relaxed. "Warn me huh? Who the heck are you?" "Moses," replied the bird. "Moses?" the burglar laughed. "What kind of stupid owner would name a parrot Moses?"

The bird promptly answered, "Probably the same owner who named that large Rotweiller, racing towards you, Jesus..."

Forwarded by Dick Haar

Forwarded by Dr. B

• Grandparents are a lady and a man who have no little children of her own.
   They like other people's.
• A grandfather is a man grandmother.
• Grandparents don't have to do anything except be there when we come to see them. They are so old they shouldn't play hard or run. It is good if they drive us to the store and have lots of quarters for us.
• When they take us for walks, they slow down past things like pretty leaves and caterpillars.
• They show us and talk to us about the color of the flowers and also Why we shouldn't step on "cracks."
• They don't say, "Hurry up."
• Usually grandmothers are fat, but not too fat to tie your shoes.
• They wear glasses and funny underwear.
•  They can take their teeth and gums out.
•  Grandparents don't have to be smart.
• They have to answer questions like "why isn't God married?" and "How come dogs chase cats?".
• When they read to us, they don't skip. They don't mind if we ask for the same story over again.
•  Everybody should try to have a grandmother, especially if you don't have television, because they are the only grown ups who like to spend time with us.
• They know we should have snack-time before bedtime and they say prayers with us every time, and kiss us even when we've acted bad.

• A 6 year old was asked where his grandma lived.
      ''OH,'' HE SAID, ''SHE LIVES AT THE AIRPORT, AND WHEN WE WANT HER WE JUST     GO GET HER. THEN WHEN WE'RE DONE HAVING HER VISIT, WE TAKE HER BACK TO         THE AIRPORT.''

Forwarded by Charles Greulich

Forwarded by Paula

GREAT TRUTHS

GREAT TRUTHS THAT LITTLE CHILDREN HAVE LEARNED:

1) No matter how hard you try, you can't baptize cats. 2) When your Mom is mad at your Dad, don't let her brush your hair. 3) If your sister hits you, don't hit her back. They always catch the second person. 4) Never ask your 3-year old brother to hold a tomato. 5) You can't trust dogs to watch your food. 6) Don't sneeze when someone is cutting your hair. 7) Never hold a Dust-Buster and a cat at the same time. 8) You can't hide a piece of broccoli in a glass of milk. 9) Don't wear polka-dot underwear under white shorts. 10) The best place to be when you're sad is Grandpa's lap.

GREAT TRUTHS THAT ADULTS HAVE LEARNED:

1) Raising teenagers is like nailing Jell-O to a tree. 2) Wrinkles don't hurt. 3) Families are like fudge...mostly sweet, with a few nuts. 4) Today's mighty oak is just yesterday's nut that held its ground. 5) Laughing is good exercise. It's like jogging on the inside. 6) Middle age is when you choose your cereal for the fiber, not the toy.

GREAT TRUTHS ABOUT GROWING OLD

1) Growing up is mandatory; growing old is optional. 2) Forget the health food. I need all the preservatives I can get. 3) When you fall down, you wonder what else you can do while you're down there. 4) You're getting old when you get the same sensation from a rocking chair that you once got from a roller coaster. 5) Its frustrating when you know all the answers but nobody bothers to ask you the questions. 6) Time may be a great healer, but it's a lousy beautician. 7) Wisdom comes with age, but sometimes age comes alone.

THE FOUR STAGES OF LIFE:

1) You believe in Santa Claus. 2) You don't believe in Santa Claus. 3) You are Santa Claus. 4) You look like Santa Claus.

SUCCESS:

At age 4 success is . . . not peeing in your pants. At age 12 success is . . . having friends. At age 16 success is . . . having a driver's license. At age 20 success is .. . . having sex. At age 35 success is . . . having money. At age 50 success is . . . having money. At age 60 success is . . . having sex. At age 70 success is . . . having a driver's license. At age 75 success is . . . having friends. At age 80 success is . . . not peeing in your pants.

Pass this on to someone who could use a laugh.

Always remember to forget the troubles that pass your way BUT NEVER forget the blessings that come each day.

Forwarded by Paula

A story from Minnie sotah near Wes konson

One dark night outside a small town in Minnesota, a fire started inside the local chemical plant and in a blink it exploded into massive flames.

The alarm went out to all the fire departments from miles around. When the volunteer fire fighters appeared on the scene, the chemical company president rushed to the fire chief and said, "All of our secret formulas are in the vault in the center of the plant. They must be saved and I will give $50,000 to the fire department that brings them out intact."

But the roaring flames held the firefighters off. Soon more fire departments had to be called in as the situation became desperate.

As the firemen arrived, the president shouted out that the offer was now $100,000 to the fire department who could bring out the company's secret files.

From the distance, a lone siren was heard as another fire truck came into sight. It was the nearby Norwegian rural township volunteer fire company composed mainly of Norwegians over the age of 65.

To everyone's amazement, the little run-down fire engine, operated by these Norwegians, passed all the newer sleek engines parked outside the plant.....and drove straight into the middle of the inferno!

Outside the other firemen watched as the Norwegian oldtimers jumped off and began to fight the fire with a performance and effort never seen before. Within a short time, the Norsk old timers had extinguished the fire and saved the secret formulas.

The grateful chemical company president joyfully announced that for such a superhuman feat he was upping the reward to $200,000, and walked over to personally thank each of the brave, though elderly, Norsk fire fighters.

The local TV news reporters rushed in after capturing the event on film asking, "What are you going to do with all that money?"

"Vell," said Ole Larson, the 70-year-old fire chief, "da furst ting ve do is fix da brakes on dat damn truck!"

Forwarded by a distant relative Barb Hessel).  For Sven, Ole, and Lena stories, try the following:
       http://www.newnorth.net/~bmorren/olelena.html  (with music)

   Subject: Fw: Ole and Lena

   OLE & LENA'S HONEYMOON

   Ole and Lena got married. On their honeymoon trip they were nearing Minneapolis when Ole put his hand on Lena's knee.

   Giggling, Lena said, "Ole, you can go farther than that if you vant to." So Ole drove to Duluth.

   OUTHOUSE PROBLEMS

   When Ole accidentally lost 50 cents in the outhouse, he immediately threw in his watch and billfold. He explained, "I'm not going down dere yust for 50 cents."

   THAT'S HER!

   A Norwegian appeared with five other men in a rape case police line-up. As the victim entered the room, the Norwegian blurted,

   "Yep, dat's her!"

   SWIM COMPETITION

 A Swedish woman competed with a French woman and an English woman  in the Breast Stroke division of an English Channel swim competition. The Frenchwoman came in first, the Englishwoman second. The Swede reached shore completely exhausted. After being revived with blankets and coffee, she remarked, "I don't vant to complain, but I tink dose other two girls used der arms."

   FAMOUS INVENTIONS

The Swedes invented the toilet seat.

Twenty years later the Norwegians invented the hole in it.

   VE COULDN'T AFFORD MORE

   Two Norwegians from Minnesota went fishing in Canada and returned with only one fish. "The way I figger it, dat fish cost us $400" said the first Norwegian. "Vell," said the other one, "At dat price it's a good ting ve didn't catch any more."

   FINGERNAILS

   One day Lena confided to her friend Hilda that she had finally cured her nervous husband, Ole, of his habit of biting his nails.

   "Good gracious," said Hilda, "How did yew ever dew that?" "It vas really simple," was Lena's reply. "I yust hid his false teeth."

   THE RELATIONS

   Ole and Lena were getting on in years. Ole was 92 and Lena was 89.  One evening they were sitting on the porch in their rockers and Ole reached over and patted Lena on her knee. "Lena, vat ever happened tew our sex relations?" He asked. "Vell, Ole, I yust don't know," replied Lena.

"I don't tink ve even got a card from dem last Christmas."

   MUSIC SOLUTION

  Ole bought Lena a piano for her birthday. A few weeks later, Lars inquired how she was doing with it. "Oh," said Ole, "I persvaded her to svitch to a clarinet." "How come?" asked Lars. "Vell," Ole answered, "because vith a clarinet, she can't sing.

   THE PRANK CALL

 The phone rings in the middle of the night when Ole and Lena are in bed and Ole answers. "Vell how da hell should I know, dats two tousand miles from here" he says and hangs up. "Who vas dat?" asks

   Lena. "I donno, some damn fool wanting to know if da coast vas clear.

The younger genereration --- http://www.bottlejockey.com/ 

For my generation:  I especially remember "those?"  (Turn up your speakers full blast) --- http://www.singingman.us/DYR.htm 
The home page is at http://www.singingman.us (with more songs)

And that's the way it was on June 25, 2004 with a little help from my friends.

Jesse's Wonderful Music for Romantics (You have to scroll down to the titles) --- http://www.jessiesweb.com/

I highly recommend TheFinanceProfessor (an absolutely fabulous and totally free newsletter from a very smart finance professor) --- www.FinanceProfessor.com 

 

Bob Jensen's bookmarks for accounting newsletters are at http://www.trinity.edu/rjensen/bookbob1.htm#News 

News Headlines for Accounting from TheCycles.com --- http://www.thecycles.com/business/accounting 
An unbelievable number of other news headlines categories in TheCycles.com are at http://www.thecycles.com/ 

 

Jack Anderson's Accounting Information Finder --- http://www.umsl.edu/~anderson/accsites.htm

 

Gerald Trite's great set of links --- http://www.zorba.ca/bookmark.htm 

 

Paul Pacter maintains the best international accounting standards and news Website at http://www.iasplus.com/

 

The Finance Professor --- http://www.financeprofessor.com/about/aboutFP.html 

 

Walt Mossberg's many answers to questions in technology --- http://ptech.wsj.com/

 

How stuff works --- http://www.howstuffworks.com/ 

 

Household and Other Heloise-Style Hints --- http://www.trinity.edu/rjensen/bookbob3.htm#Hints 

 

Bob Jensen's video helpers for MS Excel, MS Access, and other helper videos are at http://www.cs.trinity.edu/~rjensen/video/ 
Accompanying documentation can be found at http://www.trinity.edu/rjensen/default1.htm and http://www.trinity.edu/rjensen/HelpersVideos.htm 

 

Click on www.syllabus.com/radio/index.asp for a complete list of interviews with established leaders, creative thinkers and education technology experts in higher education from around the country.

 

Professor Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134  Email:  rjensen@trinity.edu  

 

June 10, 2004

Bob Jensen's New Bookmarks on June 10, 2004
Bob Jensen at Trinity University 

I transitioned to the White Mountains of New Hampshire for an eight-month sabbatical leave.  Since this is a research leave, I'm not certain I will most likely put out fewer editions of New Bookmarks.  However, courtesy of Go-To-My-PC, I am issuing the first edition of New Bookmarks from the Sugar Hill where the absolutely beautiful Lupin Festival is now in progress --- http://www.trinity.edu/rjensen/NHcottage/NHcottage.htm

For my generation:  I especially remember "those?"  (Turn up your speakers full blast) --- http://www.singingman.us/DYR.htm 
The home page is at http://www.singingman.us (with more songs)

NOVA: World in the Balance (Population Time Bomb) --- http://www.pbs.org/wgbh/nova/worldbalance/

American soldiers are taking abuse --- http://www.chromedomezone.com/ 

Quotes of the Week

Faster horses, younger women, older whiskey, and more money --- I have a lot of happiness!
To be without some of the things you want is an indispensable part of happiness.
Bertrand Russell

While some American scientists worry that the United States may be losing some of its edge, there is a recognition here that something basic has to change if Europe is to regain the luster it lost some time ago.
Richard Bernstein (See below)

CDs and DVDs Not So Immortal After All --- 
http://story.news.yahoo.com/news?tmpl=story&u=/ap/disc_rot 

Experts continue to urge Congress to cut the growth of Social Security, warning that the nation faces unsustainable deficits if action isn't taken. What do you think?
"This certainly is bad news for the elderly, coming as it does on the heels of the Federal Aging and Ice Floes Act."
Julie Hunt, Teacher, The Onion --- http://www.theonion.com/wdyt/index.php?issue=4018 

In essence, the U.S. tax code gives [U.S. multinationals] more in tax breaks for foreign operations than it collects in revenues.
John D. McKinnon (See below)

We forget our faults easily when they are known to ourselves alone.
François Duc de La Rochefoucauld

A tragic indicator of the values of our civilization is that there's no business like war business.
Douglas Mattern

He is the most neglected, first because he was a relentless climber (and nobody has unalloyed views about ambition), second because he was a great champion of commerce (and nobody has uncomplicated views about that either) and third because his most bitter rivals, Thomas Jefferson and John Adams, outlived him by decades and did everything they could to bury his reputation. So there is no Hamilton monument in Washington, but at least we now have Ron Chernow's moving and masterly ''Alexander Hamilton,'' which is by far the best biography ever written about the man.
David Brooks, "'Alexander Hamilton': Rich Uncle of His Country," The New York Times, April 25, 2004 --- http://www.nytimes.com/2004/04/25/books/review/25BROOKST.html?ex=1084248000&en=1c2863909e077120&ei=5070 

In war-time, truth is so precious that she should always be attended by a bodyguard of lies.
Winston Churchill

Yet, seldom if ever does one feel there is anything mean-spirited in Gielgud's opinions. It's simply that he is gloriously, appallingly, hilariously truthful about those who practiced an art that he took with unerring seriousness -- and not least about himself, whom he variously accuses of having a ''beaky'' nose, of being insufficiently energetic to play Macbeth and of a tendency to '' 'hold the pose' and sit down with my knees together.''
Benedick Nightingale, "John Gielgud's Candid Correspondence," May 16, 2004 --- http://www.nytimes.com/2004/05/16/books/review/16NIGHTIN.html 

Should we say the same thing about audited financial statements?
Everything you read in newspapers is absolutely true, except for that rare story of which you happen to have first-hand knowledge.
Erwin Knoll

Bob Jensen's April-June 2004 Updates on Frauds and the Accounting Scandals --- http://www.trinity.edu/rjensen/fraud063004.htm 

Updates on the leading books on the business and accounting scandals --- http://www.trinity.edu/rjensen/Fraud.htm#Quotations 

I love Infectious Greed by Frank Partnoy ---  http://www.trinity.edu/rjensen/Fraud.htm#Quotations 

Fraud Detection and Reporting --- http://www.trinity.edu/rjensen/FraudReporting.htm

Charity Frauds --- Fraud Detection and Reporting --- http://www.trinity.edu/rjensen/FraudReporting.htm 

Question
How can hidden data be removed from WORD doc files, including hidden identifying information in papers sent out for refereeing?

Answer from Richard Campbell

Here is the link to a free Microsoft utility:

http://tinyurl.com/2qaax 

Richard J. Campbell 
mailto:campbell@rio.edu 

Bob Jensen's threads on network and computing security are at http://www.trinity.edu/rjensen/ecommerce/000start.htm#SpecialSection 

Grade Inflation versus course evaluations --- http://www.trinity.edu/rjensen/assess.htm#GradeInflation 

From the AACSB
Fall 2003 Business Faculty Mean Salaries by Faculty Rank and Carnegie Classification ---- http://www.aacsb.edu/publications/enewsline/Vol-3/Issue5/dd-salaries-rank-carnegie.asp 

Working Women 1870-1930 (History from Harvard) --- http://ocp.hul.harvard.edu/ww/ 

This is the prototype of the Open Collections Program Women Working project. This site will provide access to digitized books (over 2000), manuscripts (10,000 pages) and images (1,000) from the collections of Harvard University Libraries and Museums on the topic of women in the U.S. economy from 1870-1930

Women at Work in the 21st Century

"One-in-Five Women Are Paid Less and Have Fewer Career Opportunities," The AccountingWeb, June 7, 2004 --- http://www.accountingweb.com/cgi-bin/item.cgi?id=99267 

Pay disparity continues to be a concern for one-in-five women who say they are paid less than men with similar talents and experience. The same amount of women reported they have fewer opportunities for career advancement than men at their current organizations, according to a new CareerBuilder.com survey. The CareerBuilder.com "Men and Women at Work 2004" survey of men and women was conducted from April 6 to April 19, 2004.

When asked why they think men are paid more, four-in-ten women attribute it to favoritism shown by men in management to other men in the organization. Twenty-four percent of men say women are paid more because of their seniority on the job.

In terms of overall satisfaction with compensation, 54 percent of women say they are unhappy with pay compared to 49 percent of men. The desire to be better compensated may be why 63 percent of women and 57 percent of men say they are unwilling to accept a pay cut, even if it was in exchange for a more satisfying job.

How well one is paid often corresponds with how high one has climbed up the company ladder. While women feel they have fewer opportunities for career advancement than men, four-in-ten men and women agree that career advancement opportunities are lacking at their present employers.

While almost half of both men and women are satisfied with their career progress to date, three-in-ten men and women are dissatisfied.

"Thirty-one percent of both men and women are dissatisfied with their career progress, which is often measured by pay and title," said Rosemary Haefner, Vice President of Human Resources for CareerBuilder.com. "To enhance job satisfaction and retain key workers, employers need to ensure that their compensation is competitive within their industry and region and carve out promising career paths for their workers."

When asked about interactions in the workplace, around half of men and women said they are not bothered by behaviors of the opposite sex. However, ten percent of men say they are annoyed by women who talk excessively or gossip and 8 percent feel that women use their feminine attributes to their advantage. Eleven percent of women are bothered by men who exhibited some form of sexual harassment (inappropriate behavior, sexual comments or unwanted physical contact) and seven percent say they are irritated by men who act arrogant or superior.

Continued in the article

Things are a bit better for women in public accounting --- http://www.trinity.edu/rjensen/bookbob1.htm#careers 

"Can't stop the pop-ups," by Stefanie Olsen, Wired News, June 4, 2004 --- http://news.com.com/Can%27t+stop+the+pop-ups/2100-1024_3-5226273.html?tag=nefd.lede 

Google's pop-up blocker, included as part of the Web search engine's popular browser plug-in, "worked fantastically well for about two months, blocking everything," said Haigh, a photographer from the United Kingdom. "Then the odd pop-up started to appear, mainly on highly ad-displaying sites based in the United States."

"I know they are on the increase because they are annoying me again," he said, adding that he's received three this week.

Pop-up purveyors are finding ways around popular new filters that aim to stomp them out, the latest sign of an Internet arms race over one of the most effective and controversial Web advertising formats around.

Google, America Online, Yahoo, EarthLink, Microsoft and a slew of niche software developers have begun offering consumers easy-to-install, free blocking software. As much as 30 percent of the Internet population uses a pop-up guard, according to estimates from ad technology companies. That number is set to soar when Microsoft releases an update to its Windows XP operating system later this summer that is expected to include a pop-up blocker for its Internet Explorer Web browser, which serves about nine in 10 people who surf the Web.

Because IE so thoroughly dominates the browser market, ad executives and Internet watchers believe the changes could finally burst the bubble for pop-ups.

But marketers intent on preserving and extending the lucrative format have already developed workarounds that are duping existing blockers, setting the stage for a major battle for control over consumer PC screens.

"Relatively quickly (IE) will displace all other pop-up blockers, then people will try to figure out how to get around that," said Richard Smith, a privacy and security expert.

At stake is the future of a form of online advertising that many ad executives say is among the highest performers for Internet marketers--despite severe negative reactions from a majority of Web users.

Continued in the article

Future of the Web

The Web seems to have been with us for a long time, but its life story is just beginning. Where is it headed? A Wired News interview with IBM's Dr. Stuart Feldman

"The Unfolding Saga of the Web," by Michelle Delio, Wired News, May 12, 2004 --- http://www.wired.com/news/infostructure/0,1377,63419,00.html?tw=newsletter_topstories_html 

Arpanet was designed so people could share applications, not information. The idea was that I could sit in my office in UCLA and log on to use some program running on some big supercomputer across the country that was less powerful than your wristwatch probably is. But e-mail turned out to be the killer app, not application sharing.

Now we're moving back -- and forward -- toward sharing applications. The big change will be services, being able to do most of what you need and want to do in your life on the Web. We've already seen that happen with travel and banking. We're starting to see it with health care. Government Web services is about five years out. But eventually we'll be able to conduct much of the business of our lives online.

WN: Once our lives are online, will privacy become more of an issue, or will people just surrender the information because it makes their lives easier?

Feldman: People will definitely give up some control in exchange for convenience. But that will be an individual decision. It always amazes me how much information people are willing to give up just to get a discount or news of a sale. We give out so much information without really thinking about it, and for the most part it doesn't seem to matter much to that many people. But those who are particularly paranoid will be able to protect their privacy.

Privacy is something that each person needs to protect for themselves. It's a common-sense thing. You should know when to "pull down the blinds" when you aren't comfortable with certain information or activities being public. Security is something that probably has to be handled by experts, though. When regular people try to secure their network or computer they usually mess it up. So we'll see more security services as connectivity becomes ubiquitous and we move more and more critical information online. The underlying net will be much more secure, or at least portions of it will be.

WN: Just portions?

Feldman: Security in the future will probably involve ways of determining who or what your computer is connecting to. There will be "safe neighborhoods" online and not-so-safe ones. You'll be free to go where you want, but at least you'll always know where you are. Now it's sometimes hard to tell if you're in a good or bad neighborhood.

But it won't be all serious, I promise. There is meta fun coming too. The thing we don't know yet is what will happen when all these new features begin to interact. There are so many possibilities.

Some terminology such as ARPANet and World Wide Web are defined at http://www.trinity.edu/rjensen/245gloss.htm 

No Wires, No Rules
New wireless technologies will soon reconfigure the Web using radio spectrum that doesn't cost a dime

"No Wires, No Rules," by Heather Green, Business Week, April 28, 2004 --- http://www.businessweek.com/magazine/content/04_17/b3880601.htm?c=bwwireless_051304&n=link1&t=email 

High-speed Internet access has been as rare as sunshine in winter in Campsie, a tiny village on the northern coast of Northern Ireland. The town is located in a sparsely populated rural area, which makes it too expensive to install traditional broadband technology. And the town is too far from larger cities like Londonderry to use their Internet facilities.

The people of Campsie shouldn't give up hope, though. Earlier this year, British telephone giant BT Group PLC (BT ) invited about 100 Web surfers in the village and three other rural areas to sign up for a promising new wireless Internet service. BT has installed a series of radio towers that beam signals across the countryside to small antennas on the sides of customers' homes. The system is about as fast as traditional broadband but much cheaper to set up. Why? BT is using less-expensive equipment and a free, unlicensed part of the radio spectrum, avoiding billions of dollars in fees. If the test in Campsie goes well, BT may roll out the service to consumers across Britain by next year. "This will revolutionize society, just as mobile telephony revolutionized society in the 1980s," says Mike Galvin, director of Internet operations at BT.

It's just one example of how the unlicensed portion of the radio spectrum is turning into a hothouse of technological innovation. For years, these radio frequencies were neglected, the lonely domain of cordless phones and microwave ovens. In the past few years, however, engineers at institutions from Massachusetts Institute of Technology to Dutch giant Royal Philips Electronics (PHG ) have been hard at work on a grander vision for the unlicensed radio frontier. That tinkering is what sparked the creation of Wi-Fi, the wildly popular wireless Net technology that took off last year with the support of chip giant Intel Corp. (INTC ).

Wi-Fi is just the first step, though. Hard on its heels are four equally innovative technologies -- WiMax, Mobile-Fi, ZigBee, and Ultrawideband -- that will push wireless networking into every facet of life, from cars and homes to office buildings and factories. These technologies have attracted $4.5 billion in venture investments over the past five years, according to estimates from San Francisco-based investment bank Rutberg & Co. Products based on them will start hitting the market this year and become widely available in 2005. As they do, they will expand the reach of the Internet for miles and create a mesh of Web technologies that will provide connections anywhere, anytime. "Now you have a toolbox full of wireless tools that can help with each problem, whether it's reaching a couple of inches or a couple of miles," says Ian McPherson, president of Wireless Data Research Group, a market research firm in San Mateo, Calif.

These technologies will usher in a new era for the wireless Web. They'll work with each other and with traditional telephone networks to let people and machines communicate like never before. People in what have been isolated towns, be it in Ireland or Idaho, will find themselves with blazingly fast Net connections. Zooming down the highway, you'll be able to use a laptop or PDA to check the weather or the traffic a few miles ahead. Back at home, couch potatoes will be able to dish up movies from their PC and transfer them to the flat screen in the living room -- without any wires at all. And tiny wireless sensors will control the lights in skyscrapers, monitor utility meters in suburban neighborhoods, even track toxicity levels in wastewater. This will give rise to the Internet of Things, networks of smart machines that communicate with each other.

What are the technologies behind this vision of the future? ZigBee, along with its radio standard, is the technology that coordinates communication among thousands of tiny sensors. These sensors can be scattered throughout offices, farms, or factories, picking up bits of information about temperature, chemicals, water, or even motion. They're designed to use little energy because they'll be left in place for five or 10 years and their batteries need to last. So they communicate very efficiently, passing data over radio waves from one to the other like a bucket brigade. At the end of the line, the data can be dropped into a computer for analysis or picked up by another wireless technology like WiMax. Products based on ZigBee, which has been nurtured by giants Philips and Motorola, are expected to start hitting the market later this year.

HUGE HOT SPOTS
WiMax is similar to Wi-Fi. Both create "hot spots," or areas around a central antenna in which people can wirelessly share information or tap the Net with a properly equipped laptop. While Wi-Fi can cover several hundred feet, WiMax has a range of 25 to 30 miles. That means it can be used as an alternative to traditional broadband technologies, which use telephone and cable pipes. It's an early version of WiMax that's bringing the Net to Campsie. WiMax can't be used right now if you're moving, say in a car. But backers of the technology, including Intel and Alcatel (ALA ), plan to have a mobile version out within a few years. A similar standard, known as Mobile-Fi, will be available two or three years from now. It will let people surf the Net at speeds even faster than their home broadband links today -- while they're racing along on a train or in a car.

Ultrawideband serves a very different purpose. The technology lets people move massive files quickly over short distances. In the home, that will allow users to zap, say, an hourlong Sopranos show from a PC to the TV without any messy cords. On the road, a driver who has his laptop in the trunk receiving data over Mobile-Fi could use Ultrawideband to pull that information up to the handheld computer in the front seat. Although the standard hasn't been finished yet, Motorola already is selling chips based on an early version of the technology.

One reason for this flurry of innovation now is the nature of unlicensed spectrum. Traditionally, a big company like AT&T Wireless (AWE ) paid billions of dollars to the federal government for an exclusive license to use a swath of the radio waves. That allowed the company to provide mobile-phone service to its customers without any interference, but it blocked other players from using the same radio frequencies. By contrast, most of these technologies use unlicensed spectrum. That means that anyone -- really, anyone -- can try out any idea they can imagine on those frequencies. Think of it as open-mike night at the local pub. "The licensed world tends to move in this fairly ponderous way, but with unlicensed spectrum people can try out other things and learn there is a whole market sitting out there," says Kevin Werbach, an independent technology strategy consultant.

Wi-Fi set the pattern for stardom that these emerging technologies hope to emulate. A group of companies got together to establish a standard for the technology, touching off a virtuous cycle. High volumes brought the cost of Wi-Fi gear down, low costs boosted demand, and strong demand led to even higher volumes. Now, Intel, which stoked the frenzy with a $400 million marketing push last year, sells its Wi-Fi chips to computer makers for $20 each, down from $45 a year ago. Some 54 million laptops, PDAs, and other devices with Wi-Fi are expected to be sold this year, according to researcher In-Stat/MDR, four times as many as in 2002.

For all their promise, these new technologies face steep challenges. Giants are battling over the exact standards for Mobile-Fi and Ultrawideband, and a final resolution may not come before 2006. Until that happens, equipment makers won't be able to start mass production, meaning costs won't be driven down by economies of scale. Mobile-Fi, which is planned for licensed spectrum, may be subsumed by WiMax once it adds mobile capabilities.

What's more, these innovations aren't emerging in a vacuum. Cellular companies already are rolling out technology that will let their customers get speedy Net connections on their mobile phones or laptops. This third-generation, or 3G, gear will compete directly with WiMax and Mobile-Fi. Verizon Wireless installed its 3G networks in Washington, D.C., and San Diego last year, and it plans to add 98 more markets by the end of 2005. Other cellular companies are providing similar service in the U.S., Europe, and Asia. The 3G technology may be slower than WiMax, but it has the benefit of being reliable -- and available. "WiMax, all of a sudden, has caught a lot of attention, but we have been commercial for two years," says John Hambidge, senior director of marketing at IPWireless Inc., which makes 3G equipment. "We have a huge time-to-market advantage."

Even if WiMax and its brethren can compete with 3G, another challenge looms: a spectrum shortage. As all these devices begin chattering away over the same radio frequencies, they may begin to bump into each other. To avoid such a shortage, Intel (INTC ), Microsoft (MSFT ), and other tech companies are lobbying the Federal Communications Commission for more spectrum. Their target? The major TV broadcasters, including ABC (DIS ), NBC (GE ), and CBS (VIA ), which are sitting on vast amounts of spectrum for transmitting TV programs. The FCC long has supported the development of technologies for unlicensed spectrum, but it's unclear whether the commission wants to take on the powerful broadcasters, especially in an election year. "The broadcasters hate it, but as demand just keeps going up, it gets harder and harder to defend policies that are restricting supply," says Michael Calabrese, program director at the New America Foundation, a public policy institute in Washington that advocates providing more spectrum for these new technologies. "Over the long haul, I am optimistic."

AUTOMATION ACCELERATION
One reason for such optimism is that these technologies offer benefits that could ripple through the economy. The wireless Internet promises to spur productivity by collecting data that could never be tracked before and by making information available exactly when it's needed. It will speed automation, allowing people stuck behind, say, a cash register to do more productive work. Already, J.C. Penney salespeople use Wi-Fi to check inventory and prices. Now the technology is moving into construction, rescue services, health care, and other markets. Combined, these technologies are expected to reach $17.3 billion in sales by 2007, up from $3.3 billion in 2003. "The next wave of personal productivity at work is about mobility, people wanting to get access anywhere," says Sean M. Maloney, executive vice-president and general manager of Intel's communications group.

Continued in the article

Bob Jensen's threads on wireless technologies are at http://www.trinity.edu/~rjensen/245glosf.htm#Wireless1 

Congratulations to Paula Bevels Thomas, an accounting professor at Middle Tennessee State University, who is the recipient of the 2004 Distinguished Achievement in Accounting Education Award from the American Institute of Certified Public Accountants --- http://accountingeducation.com/news/news5121.html 

Past recipients are listed at http://www.aicpa.org/members/div/career/edu/winners.htm 

A Machine-To-Machine "Internet Of Things" Facilitating machine-to-machine communication could be a $180 billion business by 2008 -- and mobile-phone companies are scrambling for a piece of the action.

"A Machine-To-Machine 'Internet Of Things'," by Andy Reinhardt, Business Week, April 26, 2004 --- http://www.businessweek.com/magazine/content/04_17/b3880607.htm?c=bwwireless_051304&n=link2&t=email 

For years, tech visionaries have spun dreams of a world of connected, communicating machines -- what they call the Internet of Things. Some gurus predict that within a few years, there could be more gizmos chattering away over the Net than there are people. New wireless technologies such as Wi-Fi and ZigBee that can link computers, consumer electronics, vehicles, and millions of other devices are vastly speeding the process. "This is going to be very big," says Ian Barkin, managing director of researcher FocalPoint Group in San Francisco. By 2008, he figures, machine-to-machine (M2M) communication could drive a $180 billion annual business in hardware, software, and services, up from about $34 billion today.

These talkative devices need an on-ramp to the Internet to share their information. And that's where mobile-phone companies see opportunity. Equipment makers such as Nokia Corp. (NOK ) and Sony Ericsson Mobile Communications are churning out tiny cellular radios that cost as little as $30 -- half the price of a few years ago -- that can be built into everything from cars to home heart monitors. Once fitted, the devices could send status reports or cries for help. Large mobile operators such as Sprint PCS Group (PCS ) and Singapore Telecommunications (SGTSY ) are waking up to the market. FocalPoint thinks carriers could score $2.5 billion in revenues this year and $10 billion in 2008 from transmitting M2M data.

Nobody has pursued machine-to-machine communications harder than France Télécom's (FTE ) mobile subsidiary, Orange. On Apr. 8, the company rolled out an ambitious program called M2M Connect that offers lower data prices and a suite of software tools to help European companies jump on the M2M bandwagon. It's a big step from a few years ago, when overpriced services and immature technology made M2M a nonstarter for carriers. Philippe Bernard, vice-president of Orange Business Solutions, figures M2M applications could hit 20% of the company's data traffic in three years.

Large corporations already are discovering new applications for wireless. Nestlé (NSRGY ) is installing hundreds of ice-cream vending machines in France and England that send daily reports on their sales and notify drivers if they're running low on Maxibon sandwiches or Extrême cones. Canadian train and plane maker Bombardier Inc. (BBD.B ) has fitted 1,000 railcars in Britain with radio devices that transmit reams of preventive maintenance data. And Dutch giant Royal Philips Electronics (PHG ) wants to put wireless links in all of its products, from entertainment gear to medical systems. It's even developing technology that links light fixtures using ZigBee radios. That will let companies monitor and control usage without building costly wired networks. ZigBee systems can even be tied into the mobile network. That way, if the lights are left on over the weekend, the building manager could be notified with a text message on his mobile phone -- and he could message back to turn them off.

Making big M2M applications fly is still tricky. The toughest problem is tying scads of connected gizmos into legacy corporate-data systems. Solving this problem is spurring companies to collaborate. Software giant SAP (SAP ) struck a partnership with Coca-Cola Enterprises Inc. (CCE ) in February to help it link a new automated bottle-delivery system to its central databases. And Nokia is teaming with Hewlett-Packard Co. (HPQ ) to develop computer systems that are better able to track and manage wireless-enabled assets.

In the end, companies likely will harness a mix of wireless systems. Packages in the back of a truck might talk to the driver using a ZigBee network, sending a warning if something tips over or breaks. At the loading dock, signals could be gathered and sent to tracking systems via Wi-Fi. On the road, the data would phone home over the cellular network. It's that enticing mix of local and remote communications, all seamlessly linked together, that's inspiring a rush to construct the new Internet of Things.

Continued in the article

"US to ban up-skirt voyeur photos," by Lucy Sherriff, The Register, May 13, 2004 --- http://www.theregister.co.uk/2004/05/13/us_bans_knicker_shots/ 

The US moved closer today to banning so-called "up-skirt" photography, under the proposed Video Voyeurism Prevention Act.

The bill specifically bans deliberately taking pictures of an unconsenting "individual's naked or undergarment clad genitals, pubic area, buttocks, or female breast...under circumstances in which that individual has a reasonable expectation of privacy regarding such body part or parts".

Translating from the wonderfully colourful legalese, this means that if you go outside, no one is allowed to stick a camera up your skirt and take a picture. It also says you have a right to privacy in places where you would normally take your clothes off without being watched, such as hotel rooms, changing areas in gyms and clothes shops and so on.

It was proposed last year in response to the increase in covertly-taken snap of bums and cleavage posted to porn websites. Taking the pictures has become easier as camera phones and similar technology gets more accessible.

Voyeuristic photographers armed with camera phones have become such a problem in some areas that gym chains have banned members from using mobile phones.

Continued in the article

"Super-Scanner Sizes Up Clothes Horses," Information Week,  May 13, 2004 --- http://www.informationweek.com/story/showArticle.jhtml?articleID=20300757 

A new digital scanner plots 200,000 data points on a person to help produce, designers claim, better custom-made clothes than a human can create. By Jay Cohen, Associated Press

A five-by-nine foot box that resembles a small recording studio may symbolize the future of the troubled American textile industry. The machine--a digital scanner that can register more than 200,000 data points on the body--generates patterns for custom-made clothing that is faster and cheaper to make than any that could be turned out by a Hong Kong tailor.

Developed by TC2, a Cary firm funded by the textile apparel industry and taxpayers, the machine offers hope for an industry that has been devastated by free trade and lower overseas labor costs.

The idea behind the body scanner is to condition consumers to expect custom-fitted clothing delivered fast and cheaply - something that could make American-based apparel manufacturers more competitive with overseas manufacturers who are less equipped to respond quickly to American fashion trends.

"We're really providing value to the industry by showing them how to cut down that product development time," said Jim Lovejoy, director of industry programs at TC2. "We asked our board, I think it was about three years ago now, 'What can we do to help your business? What would be the key thing?'

Continued in the article

New England Ruins (photography, American history, travel) ---  http://photos.dobi.nu/ 

Bob Jensen's threads on travel are at 

Boston College Center for International Higher Education --- http://www.bc.edu/bc_org/avp/soe/cihe/ 

Bob Jensen's helpers for finding colleges are as follows:

     If you know the name of the college, type it in at http://www.google.com/advanced_search?hl=en 

     For college and scholarship finder links, go to http://www.trinity.edu/rjensen/bookbob2.htm#Scholarships 

     For distance education programs go to http://www.trinity.edu/rjensen/crossborder.htm 

I used an ADAM CD in one module of my dog and pony show on education technology --- http://education.adam.com/default.htm 
ADAM is still widely used in medical schools, college anatomy courses, and even in high schools.

Monitor on Psychology (helpful for finding careers in psychology) --- http://www.apa.org/monitor/ 

Question
Who seriously buys a fake diploma?

Answer
I previously noted how teachers sometimes by fake diplomas in order to get higher pay --- http://www.trinity.edu/rjensen/FraudReporting.htm#DiplomaMill 

Now it turns out that many of our bureaucrats are also shelling out for fake diplomas and transcripts.  More than 400 government employees, including many high-ranking officials, received fake degrees from diploma mills, according to congressional investigators. The findings spur calls for better means to vet academic credentials.

"U.S. Officials Sport Fake Degrees, by Ryan Singel, Wired News, May 13, 2004 --- http://www.wired.com/news/politics/0,1283,63436,00.html?tw=newsletter_topstories_html 

At least 28 high-ranking government officials, including three managers responsible for emergency operations at nuclear facilities, have fake degrees from so-called diploma mills, according to a government report issued Tuesday.

The General Accounting Office, Congress' investigative arm, told a Senate committee Wednesday that it found 463 government employees who received degrees from three unaccredited schools: Kennedy-Western University, California Coast University and Pacific Western University.

The investigation, which was prompted by a request from Senate Governmental Affairs Committee Chair Sen. Susan Collins (R-Maine), found that these schools -- which charge a flat fee for a degree -- received at least $170,000 in government tuition-reimbursement funds.

The GAO noted that although it was able to identify 28 high-level employees from eight different agencies who had degree-mill diplomas, "this number is believed to be an understatement."

The report (PDF) singled out three National Nuclear Security Administration employees who have top-secret security clearances and "emergency operations responsibilities."

One bought a degree from known diploma mill LaSalle University in Louisiana (not the legitimate LaSalle University in Pennsylvania). Another held a degree from the unaccredited Chadwick University, while the third received a Ph.D. in engineering administration from the unaccredited Columbia Pacific University in 1985, though he completed his class work at the fully accredited George Washington University.

Differences between diploma mills and legitimate though unaccredited schools are not easily defined.

The worst diploma mills simply sell diplomas and fake transcripts, typically for a fee of $1,000 or more. But unaccredited schools range from legitimate distance-learning programs that include course work, tests and teacher feedback to "schools" that grant degrees solely based on life and work experience.

Somewhere in between are schools that give substantial credit for life experience but require some course work, such as submitting book reports.

California officials shut down Columbia Pacific University, which was based in Marin County, California, in 1999, but California considers degrees awarded by the school before 1997 valid.

On Tuesday, during the first of two days of hearings before the Governmental Affairs Committee, Collins said the investigation calls into question the trustworthiness and character of these employees.

"We have clear evidence that tax dollars are being wasted on bogus degrees from unaccredited institutions that the federal government does not even recognize. It is also cause for great concern that federal officials who hold high-ranking positions, and security clearances in some instances, have degrees from diploma mills," Collins said. "It calls into question their qualifications and abilities to do their jobs."

Paul DeSaulniers, a senior special agent at the GAO, told the committee that high-level employees with fake degrees could also be vulnerable to blackmail.

The most recent high-profile diploma-mill scandal came in June 2003 when the Homeland Security Department put Laura Callahan, an associate deputy in the Chief Information Office, on paid administrative leave, pending an investigation into whether the Hamilton University bachelor's, master's and Ph.D. degrees listed on her resume were legitimate.

Hamilton University is a Wyoming-based diploma mill that claims to be accredited by the American Council of Private Colleges and Universities, an organization that shares the same server as the diploma mill and seems only to accredit that school.

Callahan has since resigned, according to the GAO report.

Continued in the article

Bob Jensen's threads on diploma mill frauds are at http://www.trinity.edu/rjensen/FraudReporting.htm#DiplomaMill 

May 13, 2004 message from Linda Kidwell, On Leave at Charles Stuart University, Australia [lkidwell@CSU.EDU.AU] 

What a great teaching moment we had in Australia last night! There's a reality TV series here, entitled My Restaurant Rules, that involves 5 couples opening their own restaurants. The producers paid the start-up costs, and the 5 compete for who gets to keep their restaurant at the end.

Of course the restaurants are doing a bang up business while they're on TV, but last night the three remaining couples each got a visit from the accountant. He asked for balance sheets, budgets, sample daily P&Ls, and various other information. All three couples looked totally at sea. Although they are apparently required to produce weekly profit statements, they have all fallen behind in their bookkeeping as they struggle to run their businesses, and they had no clue about some of the things he was talking about. He was explaining to one that if they win and keep the restaurant, their primary threat would be losing control of their finances. It was just a great lesson in the importance of understanding a little basic accounting. I just wish I had it on tape!

Linda Kidwell

Malicious programs called browser hijackers install a lot of nasty stuff on people's computers -- primarily hard-core, borderline-illegal pornography. Some victims are facing firings, divorces and even criminal prosecution.

"Browser Hijackers Ruining Lives," By Michelle Delio, Wired News, May 11, 2004 --- http://www.wired.com/news/infostructure/0,1377,63391,00.html?tw=newsletter_topstories_html 

Browser hijackers are doing more than just changing homepages. They are also changing some peoples' lives for the worse.

Browser hijackers are malicious programs that change browser settings, usually altering designated default start and search pages. But some, such as CWS, also produce pop-up ads for pornography, add dozens of bookmarks -- some for extremely hard-core pornography websites -- to Internet Explorer's Favorites folder, and can redirect users to porn websites when they mistype URLs.

Traces of browsed sites can remain on computers, and it's difficult to tell from those traces whether a user willingly or mistakenly viewed a website. When those traces connect to borderline-criminal websites, people may have a hard time believing that their employee or significant other hasn't been spending an awful lot of time cruising adult sites.

In response to a recent Wired News story about the CWS browser hijacker, famed for peddling porn, several dozen readers sent e-mails in which they claimed to have lost or almost lost jobs, relationships and their good reputations when their computers were found to harbor traces of pornography that they insist were placed on their computers by a browser hijacker.

In one case a man claims that a browser hijacker sent him to jail after compromising images of children were found on his work computer by an employer, who then reported him to law enforcement authorities.

"The police raided my house on Sept. 17, 2002," said "Jack," who came to the United States from the former Soviet Union as a political refugee, and has requested that his name not be published. "Nobody gave me a chance to explain. I was told by judge and prosecutor that I will get years in prison if I go to trial. After negotiations through my lawyer I got 180 days in an adult correctional facility. I was imprisoned for 20 days and then released under the Electronic Home Monitoring scheme. I now have a felony sex-criminal record, and the court ordered me to register as a predatory sex offender for 10 years."

Jack originally believed that the images found on his computer were from a previous owner -- he'd bought the machine on an eBay auction. But he now thinks a browser hijacker may have been responsible.

"When I used search engines, sometimes I got a lot of porn pop-ups," Jack said. "Sometimes I was sent to illegal porn sites. When I tried to close one, another five would be opened without my will. They changed my start page, wrote a lot of illegal porn links in favorites. The only way to stop this was turn the (computer's) power off. But when I dialed up to my server again, I started with illegal site, then got the same pop-ups. There were illegal pictures in pop-ups."

Several of the URLs that CWS injects into Internet Explorer's favorites list also appear in the arrest warrant and other materials from Jack's hearing. CWS works as Jack described -- changing start pages, adding to favorites, popping up porn. But CWS was first spotted several months after Jack's arrest, so it seems unlikely that this particular hijacker is the cause of his problems.

Security experts who were asked to review Jack's claims said it is possible that a browser hijacker could have been the reason porn images were found on Jack's computer. But they also pointed out some discrepancies in the story.

Some of the images were found in unallocated file space, and would have to have been placed there deliberately since cached images from browsing sessions wouldn't have been stored in unallocated space.

Continued in the article

May 3, 2004 reply from Andrew Priest [a.priest@ECU.EDU.AU] 

There are numerous software tools around to combat this sort problem. Personally I use Ad-aware but there are others. For example you will find a range at http://www.tucows.com/webbrowser_adwarecleaner_default.html .

Cheers Andrew

You can also download free from http://download.com.com/3001-8022-10214379.html 

May 11, 2004 reply from Richard Campbell [campbell@RIO.EDU] 

"Six Steps to Greater Computer Security"  (with audio)

See http://www.virtualpublishing.net/compswf/step1.html 

Richard J. Campbell 
mailto:campbell@rio.edu 

This following reply from Paula may be of interest to some of you. She tells how she protects her computer. Paula retired from Trinity's development office and now lives online almost as much as I live online. You can thank her for much of the humor in New Bookmarks.

I must warn you, however, that my security site she refers to is not kept up to date very well. Please do not rely on this for the latest and greatest news.

Bob

-----Original Message----- 
From: Paula 
Sent: Tuesday, May 11, 2004 4:48 PM 
Subject: FW: How Nasty Stuff Gets Into Your Computer

How does nasty stuff get into your computer? How can you protect your computer from "browser hijackers," spyware, Cookies that collect your personal information, etc.? Also, learn how to "opt out" of DoubleClick's cookies and how to send e-mail anonymously. This website was created by Bob Jensen, who is a distinguished professor at Trinity University in San Antonio: A Special Section on Computer and Networking Security http://www.trinity.edu/rjensen/ecommerce/000start.htm#SpecialSection  Yes, there is a lot of information here! 

What I do personally to protect my computer: I have Norton Anti-Virus, BlackIce Firewall, and Ad-Aware installed. Norton and Ad-Aware can be scheduled to run daily, weekly, etc. 

In addition, my ISP provides a firewall, spam blocker, and pop-up blocker. If you have any questions about computer security, you should be able to find answers on Bob's website. 

Paula 
"Kwitchyerbellyakin." - Irish saying

May 12, 2004 reply from David Coy [dcoy@ADRIAN.EDU] 

I received the following from out IT guys here at Adrian College. FYI

David Coy 
Adrian College

----- Original Message ----- 
From: Brad Maggard 
To: David Coy 
Sent: Wednesday, May 12, 2004 12:05 PM Subject: 
Re: How Nasty Stuff Gets Into Your Computer

There is no way to actually defend yourself against such programs other than simple smart web browsing. Whenever a window pops up that asks you to agree to any sort of disclaimer or install any sort of program, you must read carefully - and I would only suggest agreeing to the major players (Microsoft, Macromedia, Quicktime, etc)

Once your computer has fallen victim to a browser hijacker, it must be removed using several utilities available on the net. there is a program called "CWShredder" that takes care of "CWS" (cool web search) which is probably the most destructive of them all. Other hijackers can be taken care of by a program called "Hi-Jack This" which removes several of the known hijacking aplications on the net.

Ad-Aware, available at www.lavasoft.de , is another tool to remove Mal-ware and Ad-ware.

All of this stuff can be found by doing a google search on the aforementioned removal utilities.

-Brad

May 12, 2004 reply from Scott Bonacker [lister@BONACKERS.COM] 

I would also suggest using a HOSTS file.

See links at: http://www.smartin-designs.com/ 

Scott E Bonacker, CPA 
820 E. Primrose 
Springfield, MO 65807 
Phone 417-883-1212 Cell 417-830-3441 Fax 417-883-4887

May 11, 2004 reply from computer scientist John Howland [jhowland@ariel.cs.trinity.edu] 

It is a never ending source of amazement to me that millions of people put up with this kind of problem when none of it is necessary if you use a Unix system such as Mac OSX or Linux.

Why do you do it? Suppose that when you bought a new Toyota or Ford or BMW you also had to go out and buy all these (sometimes) expensive accessories and (sometimes) have to pay someone to install them just in order to be able to use (drive) your new car. Moreover, these accessories become obsolete (sometimes in a few months/days/hours) and need to be re-purchased and installed.

In the automotive field we have laws which protect consumers. Where are the computer consumer protection laws?

Microsoft says that security fixes are a couple of years away. Do you believe they will meet that schedule? They have been significantly late on every major project introduction in the history of the company.

Again, it is a no-brainer to simplify one's digital existence by avoiding Microsoft products completely. Plus, there is a hidden bonus for those that so choose. It is significantly less expensive!

John

May 13, 2004 reply from David R. Fordham [fordhadr@JMU.EDU] 

Bob, I really like John Howland's analogy with the cars.

So I'll answer John: the reason I put up with it is, the places I want to go are accessible only by car. My migrating to Linux or other "non-Microsoft" operating system would be like my buying a boat! Sure, I suppose there are restaurants, shopping malls, vacation spots, and other "applications" which I can get to by boat, some of which are every bit as good as the shopping malls, restaurants, and so forth that I can drive to. But there are many more choices accessible by car, and what's more, the upkeep on a boat has its own headaches, and I'd have to learn marine navigation, which is probably similar to, but still different from, navigating by car. I don't mean to denigrate boat owners, they are some fine people, and they have their reasons for preferring the marine way of life. But given the national network of roads, the interchangeability and standardization, I'll put up with some flat tires, potholes, alignment troubles, and dusty dirt roads for the convenience of occasionally getting on the Interstate and boogying to the huge selection of applications I can get to by car but not by boat...

Follow the analogy?

(Ironically, one of my greatest pleasures is canoeing around the Okeefenokee Swamp Wilderness Area, a place accessible only by boat!)

And the "R." in my name stands for Ronald... as in "Captain Ron", for those of you who remember the movie...

David R. Fordham 
PBGH Faculty Fellow 
James Madison University

Bob Jensen's threads on computing and network security are at http://www.trinity.edu/rjensen/ecommerce/000start.htm#SpecialSection 

"Microsoft to Battle Spyware," by Amit Asaravala, Wired News, May 13, 2004 --- http://www.wired.com/news/technology/0,1282,63440,00.html?tw=newsletter_topstories_html

Nearly half the world's computers may soon have built-in protection against debilitating infections of spyware and other unwanted software, thanks to Microsoft's update of the Windows XP operating system.

Expected to be released this summer, the Windows XP Service Pack 2 update will contain no fewer than five new security features designed to ward off the unauthorized installation of software via the Internet, according to Microsoft officials. The company hopes the features will not only quell the growing number of complaints from consumers about Windows XP's susceptibility to spyware, but will also save businesses millions of dollars in tech support calls.

Almost 50 percent of the world's computers run Windows XP, according to IDC Research. The operating system's users have been hit especially hard by spyware and some versions of adware, which collect information about computer users and, in some cases, use that information to pepper the desktop with advertising. The programs often work their way onto computers by hitching rides with unrelated software packages or exploiting security holes in Microsoft's Internet Explorer browser.

"People are feeling out of control and frustrated," said Jeffrey Friedberg, Microsoft's director of Windows privacy. "Millions of dollars are being spent" by Microsoft and other companies to help consumers remove spyware and other deceptive software from their computers, he said. "It's a huge support issue. People have problems and they call their support staff, they call us, they call their ISP."

In an attempt to cut down on calls like these, Microsoft will upgrade Internet Explorer to make it more difficult for users to accidentally download and install spyware programs. The most noticeable of these changes will be the addition of a pop-up blocker, a feature that has existed in competing Web browsers for years.

The blocker will prevent websites from opening new windows on users' computers without permission. Opening new windows on top of other windows is one way malware developers trick Internet users into downloading software that they don't want. It is also the primary technique used by some spyware programs to serve ads to users.

Other changes to Internet Explorer will focus on the security of ActiveX objects, programs that can access almost any portion of the operating system, including the hard drive and user settings. Spyware developers often use ActiveX objects to write files to users' Start folders and to add advertiser-sponsored toolbars to their desktops.

One update would make it more difficult for users to downgrade their Internet security settings to the lowest setting. This will prevent ActiveX objects from being downloaded without first displaying a warning. Another update will suppress downloads of ActiveX objects unless the user explicitly initiates them. Current versions of the browser let website developers initiate downloads.

Other updates include a redesigned security warning and the addition of a Never Install option that allows users to permanently ban a software publisher's ActiveX programs from being downloaded. "This is a change we're making because of the feedback we've received," said Friedberg. "We have had an Always Install option, but users didn't have a way to completely block a software publisher that they don't trust."

Security experts generally welcome the changes, but some wonder why they took so long. "Why this was never in there in the first place, I don't know," said Russ Cooper, editor of the popular NTBugtraq security mailing list and "surgeon general" of TruSecure. "Why somebody could bury something in your desktop setup that you couldn't find, I never understood in the first place."

Still, Cooper said he believes the changes are a step in the right direction. "I do think it'll have an effect on spyware," he said. "You're not going to get rid of it altogether, but at least we'll be able to say to people, 'Look, just install Service Pack 2 and your problems will go away.'"

Bob Jensen's threads on computing and network security are at http://www.trinity.edu/rjensen/ecommerce/000start.htm#SpecialSection 

"Online intrusions more than criminal," by Hiawatha Bray, The Boston Globe, May 10, 2004 --- http://www.boston.com/business/technology/articles/2004/05/10/online_intrusions_more_than_criminal/ 

You should never put any personal information on the Internet that you wouldn't want to see in the newspapers. That's the government's job.

With hardly any fuss, federal, state, and local governments routinely publish on the Internet a variety of sensitive information about us. File for bankruptcy lately? It's probably on there. Did you contribute money to John Kerry's campaign? That's online too. Here's hoping you paid up your property taxes and haven't fallen behind on child support; otherwise there may be an Internet page with your name on it.

As the state's courts wrangle over whether to publish the names of sex offenders online, it's just as well to remember that sex offenders are not the only ones who are forfeiting a measure of privacy. Of course, hardly anyone sheds a tear for the released rapist whose criminal record will be on public display for the rest of his days. Sex offenders rarely know when to quit, and keeping people safe from them matters far more than the offenders' right to be let alone.

Yet it sometimes seems that the convicted creeps have a stronger lobby than the rest of us. The Committee for Public Counsel Services, an organization of Massachusetts public defense attorneys, has fought like a tiger against listing the state's sex offenders online, as 42 other states do. Indeed, the committee persuaded a judge last month to order a halt to the practice.

There's not nearly as much complaint about the other instances in which government agencies publish data that many would rather keep under wraps. Chalk it up to a healthy ambivalence. Americans instinctively favor open government. We want the public's business done out in the open. And so a vast amount of information about the government's dealings with citizens has always been made available to the public, at courthouses, tax assessors' offices, and other such places. Anybody could read the stuff. To read all about the travails of your friends and neighbors, you just had to show up.

Only now, thanks to the Internet, you can forget about the showing-up part. Just log in. It's like having the county clerk's office in your living room. Or your own set of stocks--those wooden hitching posts that 17th-century Puritans set up on public streets. People found guilty of minor crimes were locked in the stocks for a few hours of humiliation.

Throughout the country, governments have reverted to the Puritan custom by running what might be called shame sites-- Web pages that list names and photos of various miscreants. Delinquent property taxpayers, for instance, or deadbeat parents. Last week Massachusetts posted the names of nearly 1,500 individuals and businesses owing at least $25,000 in taxes. And like many other states, Massachusetts has a website listing those who haven't kept up with their child support payments. 

Continued in the article

From The Wall Street Journal Accounting Educators' Review on May 14, 2004

TITLE: Yahoo, Google and Internet Math 
REPORTERS: Scott Thurm and Kevin J. Delaney 
DATE: May 10, 2004 
PAGE: C1 
LINK: http://online.wsj.com/article/0,,SB108415195909406432,00.html  
TOPICS: Earnings Quality, Financial Analysis, Financial Statement Analysis, Internet, Revenue Recognition, Accounting

SUMMARY: Differences in accounting at Yahoo Inc. and Google Inc. make it difficult to compare the financial performance of the two companies. Questions focus on revenue and expense recognition principles.

QUESTIONS: 
1.) What is revenue? What is an expense? Describe the revenue recognition and matching principles.

2.) Explain the primary and secondary qualities of decision usefulness. What property (or properties) of decision usefulness is (are) being compromised by different accounting methods at Yahoo and Google?

3.) Explain the different accounting methods being used for revenue and expense recognition at Yahoo and Google. What differences result in the financial statements?

4.) Explain the difference between recognizing revenue at the gross amount and recognizing revenue at the net amount. Using authoritative guidance, explain when each method is appropriate.

Reviewed By: Judy Beckman, University of Rhode Island 
Reviewed By: Benson Wier, Virginia Commonwealth University 
Reviewed By: Kimberly Dunn, Florida Atlantic University

"Yahoo, Google and Internet Math," by Scott Thurm and Kevin J. Delaney, The Wall Street Journal, May 10, 2004, Page C1 --- http://online.wsj.com/article/0,,SB108415195909406432,00.html 

Revenue Is Counted Differently By the Web-Search Powerhouses, Creating Confusion for Investors

Yahoo Inc. reported first-quarter revenue of $758 million. Looked at another way, Yahoo said revenue totaled $550 million. Rival Google Inc. said its first-quarter revenue totaled $390 million. Or maybe it was really $652 million.

Confused? Pity the investors trying to place a value on Google for its highly anticipated initial public stock offering.

For guidance, many look at Yahoo, another Internet company with a similar business to Google's and which has been public since 1996. But Yahoo and Google don't count revenue the same way, making it hard to compare many aspects of the two companies' finances. Google uses a more-conservative definition that has the effect of damping its revenue and increasing its profit margins.

The differences demonstrate that accounting standards may be "generally accepted," but they aren't always uniformly interpreted. And details about revenue-recognition policies buried in the fine print of financial statements can trip up less-than-seasoned investors.

In this case, the difference revolves around the way that Yahoo and Google treat revenue from small-text advertisements that they place on other companies' Web sites. The two Internet companies effectively act as technological intermediaries and quasi-advertising agencies, bringing together Web publishers and advertisers. Yahoo and Google get paid each time an Internet user clicks on an ad, then give some of that money to the Web publisher on whose site the ad appeared. (Yahoo and Google also accept ads for their own sites, and both companies account for them in the same way.)

In accounting terms, however, that is where the similarities end. Yahoo counts as revenue the "gross" amount it is paid. It counts its payment to the publisher as an expense, labeled as a "traffic acquisition cost." Google, by contrast, counts as revenue only the "net" amount remaining, after it pays the Web publisher.

Here's how it works in practice: XYZ Corp. places ads on the sites of UVW Corp., through Yahoo, and RST Corp., through Google. Both ads generate $5 in revenue, with $3 going to the publishers. Yahoo would count $5 revenue and book a $3 expense. But Google would record only $2 in revenue.

Experts say the difference shows how accounting practices are still evolving in relatively new forms of commerce such as the Internet. There isn't a universal right answer, they say; the proper accounting depends on the specifics of the advertising contracts.

"Financial reporting in this area is fluid right now," says Paul R. Brown, an accounting professor at New York University's Stern School of Business.

Indeed, until Jan. 1, the same distinction between "gross" and "net" revenue could be seen within two units of InterActiveCorp, the New York-based Internet company.

InterActiveCorp's Expedia travel-agency unit reports revenue on a "net" basis, after paying airlines and hotels. But InterActiveCorp's Hotels.com unit traditionally reported revenue on a gross basis, recording the entire price of a hotel room, including the portion it paid to the hotel operator. Hotels.com switched to reporting net revenue beginning this year, according to a filing with the Securities and Exchange Commission.

In the case of Yahoo and Google, the proper accounting treatment depends on whether the company is merely an "agent" facilitating a deal, or a "principal" that stands to lose money, if, for example, an advertiser fails to pay.

A Yahoo spokeswoman says the company reports gross revenue "based on our interpretation of the accounting guidance and our contractual terms." In SEC filings, Yahoo says it must use gross revenue because it is "the primary obligor" to the publishers.

Although it uses "gross" revenue in its financial reporting, Yahoo stresses its "net" revenue in presentations to analysts and investors. The spokeswoman says Yahoo considers the net figure "of more transparent economic value to investors."

Analysts generally agree. "We actually take a net revenue perspective on their numbers," says Jeetil Patel of Deutsche Bank Securities Inc. Mr. Patel says using net revenue makes it easier to understand Yahoo's different businesses and compare current with past results.

Continued in the article

Bob Jensen's threads on revenue accounting are at http://www.trinity.edu/rjensen/ecommerce/eitf01.htm 

From The Wall Street Journal Accounting Educators' Review on May 27, 2004 

TITLE: Google Search: How Does It Value Its Shares? 
REPORTER: Scott Thurm 
DATE: May 13, 2004 
PAGE: C1 
LINK: http://online.wsj.com/article/0,,SB108439355400909719,00.html  
TOPICS: Financial Accounting, Financial Analysis, Financial Statement Analysis, Stock Options

SUMMARY: Jack Ciesielski, publisher of Analysts' Accounting Observer, used Google's disclosures of compensation expense and deferred compensation from its employee stock option plans to estimate the value corporate officers place on their soon-to-be-issued stock.

QUESTIONS: 

1.) In general, summarize the two ways in which Mr. Ciesielski estimated the value placed on Google shares by corporate officers.

2.) What disclosures did Mr. Ciesielski use to estimate the value placed on Google shares by corporate executives? In general, what standards and laws require these disclosures? What specific SEC requirement provided useful information in the disclosures for the first quarter of this year?

3.) Focus on the method of estimation using the deferred compensation account and the SEC requirement reflected in the accounting during the first quarter of this year. Where is "deferred compensation" under stock option plans included in the financial statements? What amount is included in that account? How could Mr. Ciesielski determine that Google added $75.4 million to that account?

4.) Focus on the estimation using the Black-Scholes formula. What is that formula designed to estimate? What inputs must be used to make this estimate? How could Mr. Ciesielski, and Professor Larcker, run this model "backwards"?

5.) What advantage in the marketplace can an analyst obtain by being able to use accounting information in such a clever way as Mr. Ciesielski has done?

Reviewed By: Judy Beckman, University of Rhode Island 
Reviewed By: Benson Wier, Virginia Commonwealth University 
Reviewed By: Kimberly Dunn, Florida Atlantic University

Bob Jensen's threads on valuation are at http://www.trinity.edu/rjensen/roi.htm 

Bob Jensen's threads on employee stock options are at http://www.trinity.edu/rjensen/theory/sfas123/jensen01.htm 

The Banker's Glossary --- http://www.capitalaccessarkansas.org/glossary/bankglos.doc 

While some American scientists worry that the United States may be losing some of its edge, there is a recognition here that something basic has to change if Europe is to regain the luster it lost some time ago.
Richard Bernstein, "Halls of Ivy May Receive Miracle-Gro in Germany," The New York Times, May 9, 2004 --- http://www.nytimes.com/2004/05/09/international/europe/09HEID.html 

But there is also a recognition that Heidelberg University, founded in 1386, is not as great as it used to be, and that illustrates a problem becoming more and more widely acknowledged in Germany and elsewhere in Europe. Over the last few decades, on the higher rungs of higher education, the United States has been outpacing pretty much everybody, especially in science and technology.

While some American scientists worry that the United States may be losing some of its edge, there is a recognition here that something basic has to change if Europe is to regain the luster it lost some time ago.

"It is definitely the case that we have not kept up the reputation we had in the past," said Peter Hommelhof, Heidelberg's rector. He quickly added that Heidelberg did a good job of educating its students, despite classes that are too big and financing that is too low, and that it had had major successes in the sciences, medicine and law, three of its strongest areas.

Still, there are many signs that at the very elite level, the international upper crust, Heidelberg, like the rest of Germany, has fallen behind.

In recognition of that problem, Chancellor Gerhard Schröder and the education ministers of the 16 German states have announced a plan to form a group of what are being called elite universities (and elite departments at other colleges) with about $300 million from the German government, starting in 2006.

"It is our common goal to raise the performance of German universities and research to an international top level in the next few years," said the federal education minister, Edelgard Bulmahn, acknowledging that in fact, they are not at the international top level at the moment.

In other countries such a proposal might seem like either a good idea or an inadequate one, but the principle of it would not shake the foundations of the culture. In Germany, where an egalitarian ideal has an almost theological status, the very idea of an elite has a subversive tinge.

"This became especially predominant in university policy in the 1970's, based on Supreme Court decisions that meant there was a development toward mass universities," Mr. Hommelhof said, speaking of the egalitarian ideal.

In 1972, the German courts ruled that any graduate of a gymnasium, the more academically oriented part of the German high-school system, had a right to a university education entirely paid for by the state. At Heidelberg this led to a jump in enrollment, from fewer than 10,000 students to more than 30,000, before it settled to its current level. "The whole notion of an elite was practically taboo," Mr. Hommelhof said.

Not everybody is happy with the idea of elite institutions, in large part because the government's proposal would involve not just money but, in the sharpest departure from the egalitarian ideal, also a much higher degree of selection of some students over others.

That idea has produced a few scattered demonstrations and placards like the one declaring, "Elite for Everybody." But there is little of the continuing, vociferous opposition that other changes, like cutbacks in pensions or medical benefits, have provoked, probably because of a dawning realization that the country has, academically speaking, been living on its past glories.

"The B-School at Company X," by: Sharon Shinn, BizEd from the AACSB, May/June 2004, pp. 32-37 (not free online)

Corporate universities are focused, committed to employee education, and here to stay.  Traditional business schools must learn how to work with them in creative and productive partnerships.

About ten years ago, when corporate universities were exploding onto the scene, sentiment was deeply divided between fear that such institutions would rob business schools of all their students and conviction that corporate universities would be a brief and passing phase.  It turns out that neither expectation was true.  Today's corporate university is an entrenched part of the business landscape, working hard to satisfy both its students and the CEOs of its parent organizations by providing targeted education that can demonstrably improve performance in the workplace.  Today's corporate university also draws heavily on the expertise of traditional four-year universities--and some people believe that broader and stronger partnerships between schools and businesses will shape the future of company-based education.

While the phrase "corporate university" has been used to mean everything from a revamped training department to a degree-granting branch of a major corporation, it's possible to come up with a more exact description.  One good definition comes courtesy of Mark Allen, director of executive education at the Graziadio School of Business and Management at Pepperdine University, Culver City, California, and co-author of The Corporate University Handbook.  He believes a corporate  university must be a strategic tool that helps the parent organization achieve its mission through educational activities.  What's key, he stresses, is that whatever training or learning is involved be tied directly to the strategic mission of the company.

In other words, nobody goes to Corporate U just to kill a few hours.  Such a school offers learning with a purpose--improving a specific employee's performance in a specific area of the job in a way that's measurable.

THE CORPORATE GOALS

Corporate universities exist to fulfill four main goals: to teach topics like leadership and communication to executives; to standardize skills and knowledge for certain jobs within the company; to help the company as a whole develop a unified culture; and to develop strong networks among employees.

Developing "soft skills" is something corporate universities do very well, says Mike Morrison, dean of associate education and development at University of Toyota in Torrance, California.  "Part of it is, we have to," he says.  "Once people are in the work environment, they see that the work world is very relational.  Problem-solving skills, creativity and innovation are in much higher demand, and the ability to self-design work is critical."

Also critical is the ability to provide mission-specific education with instant relevance.  Tom Doyle, director of Menlo Worldwide's Menlo University in Dayton, Ohio, says, "Each of our courses is aligned with the strategic products, services, or value propositions that we take to the marketplace.  There are no electives.  You don't have to have a physical education unit to get through."

Just as important to many corporations is that their universities help them create a single image of the company or a standardized protocol.  Sometimes, as with Menlo University, the school is a consolidation of a disparate collection of training programs that used to be centered in different departments or physical locations.

Continued in the article

Bob Jensen's threads on education are at http://www.trinity.edu/rjensen/000aaa/0000start.htm 

I encountered two BizEd sites.  Only one of these seems to be from the AACSB.

• AACSB's BizEd Magazine --- http://www.aacsb.edu/publications/bized/default.asp
  Although BizEd is not free, the AACSB does have a great deal of free resources --- http://www.aacsb.edu/resource_centers/  
  
  
  

• The Other BizEd Website from the U.K.--- http://www.bized.ac.uk/ 

A service for students and educators on business and economics related subjects. The site contains:

Current Topics
A magazine style section with features, daily economics and business news, sample exam questions and a searchable archive of key economics and business issues and events.

Learning Materials
Subject by subject resources including notes, worksheets glossaries and more.

Data
Data sets and data skills materials.

Company Info
Frequently asked questions about various companies, company data and links to company case studies.

Virtual Worlds
Large-scale learning resources developed exclusively by Biz/ed including a Virtual Factory and Virtual Economy.

Internet Resources
A searchable and browsable catalogue of over 4300 quality checked Internet resources.

Educators
A section specially designed to help support teachers and lecturers in schools, colleges and higher education.

Bob Jensen's threads on resources for educators are at http://www.trinity.edu/rjensen/000aaa/0000start.htm 

From the ECCH newsletter called ECCHO, Spring 2004, Page 1 --- http://www.ecch.cranfield.ac.uk/europe/pdffiles/about/ECCHO/ECCHO32.pdf 

 

ECCH IS PLEASED TO ANNOUNCE THAT agreement has been reached with Harvard Business School Publishing (HBSP) to include inspection copies of HBS cases, enabling users to preview them on-line from 1 April 2004. This development marks a significant enhancement of COLIS, ECCH’s on-line case bibliography. In addition to Harvard Business School cases, registered, authorised, COLIS users will be able to view inspection copies of article reprints from Harvard Business Review, including HBR OnPoint editions, as well as HBSP newsletters: Balanced Scorecard Report, Harvard Management Update, Negotiation and Strategy & Innovation. Features 4 Insight into the world’s most comprehensive case collection A new series presents the ECCH collection and how to access it 6 Case development in Europe – An historical perspective Part two of our series about the origins of case studies 16 Drawing out the characters in cases – the ‘cartoon series’ Using cartoons to accentuate the role of the individual in corporate decision-making 18 Developing European cases – A Polish perspective Dr Mariusz Trojanowski of the Faculty of Management, Warsaw University highlights.

The ECCH home page is at http://www.ecch.cranfield.ac.uk/ 

You may or may not like Google's search results. You may disagree with its search methods. But with Google, the search results you see are strictly those that its search methodology yields. By contrast, at major competitors like Yahoo and Microsoft's MSN, the first search results you see are there, at least in part, because companies paid to place them there.
Walter Mossberg (see below)

"Clean Image Is So Key To Google's Success, Why Take Gmail Risk?," Walter Mossberg, The Wall Street Journal, May 6, 2004, Page B1 --- http://online.wsj.com/article/0,,personal_technology,00.html 

Truckloads of ink and gigabytes of Internet space are being devoted these days to discussing the merits of Google, the Web's leading search engine. Most of these articles aren't focusing on how Google functions for its users but on its value as an investment in light of the company's announcement last week that it is going public.

I don't give stock tips, and I have no idea whether investing in Google is a good idea. But I want to focus for a few moments here on why Google's stock offering is a big deal in the first place: It's because the company has created a service that works brilliantly for consumers.

Google's initial success was built on its breakthrough search technology, which produced more useful search results, much more quickly, than anyone else. Some analysts believe that edge is waning or is gone. I still think Google is the best, but in any case, there's another secret to Google's success: honesty.

Of all the major search engines, Google is the only one that's truly, scrupulously honest. It's the only one that doesn't rig its search results in some manner to make money.

You may or may not like Google's search results. You may disagree with its search methods. But with Google, the search results you see are strictly those that its search methodology yields. By contrast, at major competitors like Yahoo and Microsoft's MSN, the first search results you see are there, at least in part, because companies paid to place them there.

Google makes money in a traditional way that users understand. It sells ads. These ads are clearly labeled and easily distinguished from the real, unbiased search results. They are triggered by whatever search term a user enters, and they run down the side of the page and, occasionally, across the top. The ones across the top are shaded in color, just to make extra sure nobody confuses them with search results.

This separation of advertising and editorial content is the same one that has been used for a couple of hundred years in newspapers and magazines. People get the distinction.

Continued in article

Bob Jensen's search helpers are at http://www.trinity.edu/rjensen/searchh.htm 

Chaos Seems to Aid Learning
A computer simulation shows that chaotic nerve signals may play a key role in learning motor skills, providing a potential boost for robotics and communications technologies.
http://www.technologyreview.com/articles/rnb_050304.asp?trk=nl

Feelings, for all my life I'll feel it.
Feelings, wo-o-o feelings, Wo-o-o, feelings again in my arms. Feelings... --- http://www.theromantic.com/lovesongs/feelings.htm 

"A Killer Amp -- for Your Desk Chair," by Walter Mossberg, The Wall Street Journal, May 12, 2004, Page D9 --- http://online.wsj.com/article/0,,SB108431409770808574,00.html?mod=gadgets%5Fprimary%5Fhs%5Flt 

Device Attaches to a Seat To Let Users Literally Feel The Vibes of Music, Games May 12, 2004; Page D9 Is this a great country, or what? Thanks to technology, you soon will be able to not only hear your favorite music and the sound effects of videogames, but to actually feel these sounds, and not just in your heart and soul.

An outfit called Guitammer Co., from Westerville, Ohio, has developed a $150 home gadget that actually transmits sounds as vibrations through your body, starting from the bottom up. The product's name says it all: the ButtKicker Gamer. This gizmo attaches to the bottom of your chair and sends low-frequency sound waves from music or games through the chair's back and, especially, its seat -- hence the name.

If you've ever been in or near a car with an obnoxiously powerful sound system, or if you've ever stood close to the stage at a rock concert, you know what these vibrations feel like. This thumping sends rippling beats throughout your body, sometimes rattling your bones -- and it's especially noticeable in songs with a prominent bass line.

The ButtKicker started as an onstage device to help musicians, especially drummers and bass players, follow the bass line at rock concerts. An expensive and very powerful home-theater version already is being sold in some Best Buy and specialty outlet stores for installation in couches, chairs and even floors.

On August 1, Guitammer will release a more mainstream version of its product: the ButtKicker Gamer. The Gamer is considerably smaller and lighter than the home-theater version and will be sold in a $149.95 package that includes its separate amplifier. Last week, my assistant Katie Boehret and I got an exclusive opportunity to try it out. We tested the ButtKicker Gamer with some input from friends and visitors around the office.

The ButtKicker has a clamp on one end and a bulging electronic piece on the other. The clamp portion resembles an extra-large wrench -- a nine-inch straight piece with a tightening clasp at one end. This piece wouldn't open far enough to screw onto the thick center posts of our office chairs, so Guitammer shipped a chair to us that had a thinner post and we used that. The company insists most office chairs and desk chairs people use with PCs at home have the thinner type of post.

Continued in the article

Good accounting career information magazine --- http://www.newaccountantusa.com/default.html 

Bob Jensen's threads on accounting careers are at http://www.trinity.edu/rjensen/bookbob1.htm#careers 

May 5, 2004 lead from Jim Borden
Macromedia Breeze --- http://www.macromedia.com/resources/education/special/breeze/hed_ctr.html?trackingid=DMYD_ABPV 

Sometimes technology that's supposed to help you ends up complicating your life. But not Breeze. With Breeze, you can use Microsoft PowerPoint to create engaging multimedia presentations for your students and publish them on the web.

With student and session tracking tools, and a centralized, searchable content library, Breeze makes it possible for anyone on campus to develop materials that reach students whenever and wherever you need.

What's more, the Breeze Live module extends the Breeze platform with capabilities such as live and recorded video and audio, screen sharing, and application sharing, so you can hold meetings and deliver lectures over the web.

May 5, 2004 reply from Richard J. Campbell [campbell@RIO.EDU] 

have had a demo – it is good but verrrrrrrrrrry pricey. A hint of that is the absence of pricing info on the MACR web site.  I will be doing a demo using www.webtrain.com later (after grading exams) next week. Webtrain is much more affordable.

Richard J. Campbell
School of Business
University of Rio Grande
Rio Grande, OH 45674

Bob Jensen's threads on course authoring software are at http://www.trinity.edu/rjensen/290wp/290wp.htm 

High-profile events are triggering a rush of gamblers to legal and illegal Internet gambling sites that have sprouted on the Web.
"More Gamblers Flock to the Web," by Peter Grant, The Wall Street Journal, June 8, 2004, Page D6 --- http://online.wsj.com/article/0,,SB108664760388431004,00.html?mod=gadgets%5Fprimary%5Fhs%5Flt 

High-profile sporting and racing events are triggering a rush of gamblers to legal and illegal Internet gambling sites that have sprouted on the Web.

Although it is illegal in the U.S., about $85 million is expected to be bet online on the National Basketball Association playoffs now under way, according to Christiansen Capital Advisors LLC, a market-research firm that tracks gambling. That's up from the $74 million bet on the playoffs last year, partly because of the popularity of the Los Angeles Lakers, who are playing the Detroit Pistons for the championship.

Meanwhile, Web bets poured in amid the hoopla over Smarty Jones's pursuit of horse racing's first Triple Crown since 1978, which culminated in the colt's second-place finish in the Belmont Stakes on Saturday.

But even without Smarty Jones and the Lakers, online gambling is booming. The 1,800 or so Internet gambling sites world-wide are expected to rake in $7.46 billion this year after paying out winnings, up from $5.69 billion in 2003, according to Christiansen Capital. About half of that comes from the U.S.

Currently, the only online gambling that's clearly legal is betting on horse races in the 18 states that have passed laws specifically allowing it. Betting on basketball, baseball and other sporting events online is against the law. The legality of Internet casino games and other online gambling is murkier, though the U.S. Department of Justice has taken the position in both the Clinton and Bush administrations that practically all of it is prohibited.

Even so, betting possibilities have greatly expanded since Internet gambling was first introduced in the mid-1990s. Back then most of the wagering was on professional sports such as football, baseball and basketball, and the bets were limited to which team would beat a point spread. Now bets can be placed on a wide range of casino games such as poker and blackjack, and such obscure sports as sumo wrestling and hurling.

During this year's Super Bowl, BetonSports.com gave gamblers 735 different options for placing their bets, including the length of the national anthem, number of yards rushed, the most successful advertisement and who would win the coin toss. BetonSports.com also has been accepting bets on the winner of the TV's "American Idol," as well as the presidential election. (President Bush currently is a 3-to-2 favorite.)

All online gambling businesses, except many horse-racing sites, are based offshore and out of reach of the Justice Department. But regulators have figured out ways to make betting from the U.S. more difficult. American Express Co. and some banks that issue MasterCard and Visa cards refuse to let them be used for Internet gaming. Regulators also have put pressure on companies that advertise sports betting and casino sites. Earlier this year, Google Inc. and Yahoo Inc. banned the ads.

Last year, the House of Representatives and the Senate Banking Committee approved different bills that would prohibit electronic payments for online gambling. The legislation has been bogged down by disagreements among mainstream gambling factions, like Indian tribes and casino owners. But backers predict it will be resurrected next year.

I doubt that you really want to know this!  Do you suppose they would also be interested in accounting videos?  Maybe I no longer have to give mine away for free at my Web site.

Pornographers to Ring Up More Profit, International Herald Tribune, May 4, 2004 --- http://www.iht.com/articles/518178.html 

Amsterdam, home of one of Europe's most renowned red-light districts, is not a surprising location to exhibit X-rated products for sale.  But there were some strange bedfellows at a conference there last month: executives from some of the world's largest and most respected mobile phone companies mingling with sex-shop owners, publishers of pornography and producers of hard-core videos.

Until recently, risqué mobile phone services have been limited mostly to racy pictures and "adult" chat, both by text and by voice.  But now that third-generation networks and cellphones that offer video are on the European market, established mobile carriers are looking to make money from pornography.

At the Amsterdam conference, called Adult Online Europe, executives from Vodafone, Orange, mm02 and Virgin Mobile, among others, explored how to get involved while remaining good corporate citizens and fencing off the content from young people.

Gartner, an industry research company, estimates that sexual content over mobile phones will generate $1.5 billion in revenue in Western Europe next year, or about 5.1 percent of the total market for mobile data.

Vodafone Group, the British company that is and one of the world's largest mobile operators, has introduced what it calls "risqué" content via its Vodafone Live portal in 10 out of the 16 markets where the portal is available.  Other mainstream mobile phone operators and content providers are gearing up.  For Vodafone, content now ranges from off-color jokes to photos of topless women, but more hard-core material is expected to follow.

"It is a big commercial opportunity, so it is fair to say that commercial operators will have to exploit this opportunity in some way," said Tina Southall, head of content standards for Vodafone.  Her position was created nine months ago to help the company develop a responsible approach to racy fare.

Sexual content represents "one of the few possibilities for mobile operators to make significant revenues, even if they don't want to admit it," said Berth Milton, chief executive of Private Media Group, a Barcelona company that distributes pornography.

"Operators have put billions of euros into 3G networks, so they need to generate revenues even more than the content providers," Milton said.

Netcollex, a British company that offers both soft and hard pornography over cellphones, said that in 12 months it had signed up 67,000 customers, who pay $2.65, plus transmission charges, to see a short video clip.

Pricing for such services is on a par with other mobile data services, but demand is expected to be higher than many other categories.  Already, Mobitel, whose 3G phone service started in December in Slovenia, said that its most popular content in February included sports, erotic videos and film clips.

What a sham it is!

In essence, the U.S. tax code gives [U.S. multinationals] more in tax breaks for foreign operations than it collects in revenues.
John D. McKinnon (See below)

From The Wall Street Journal Accounting Educators' Review on May 7, 2004

TITLE: U.S. Overseas Tax is Blasted
REPORTER: John D. McKinnon
DATE: May 05, 2004
PAGE: A4 LINK: http://online.wsj.com/article/0,,SB108370777246501914,00.html 
TOPICS: Tax Laws, Taxation

SUMMARY: A study undertaken by Congress's Joint Committee on Taxation concludes that the U.S. government, if it were to switch to a territorial approach to taxation, would collect "$60 billion more over 10 years than the current system would raise." "In essence, the U.S. tax code gives [U.S. multinationals] more in tax breaks for foreign operations than it collects in revenues..."

QUESTIONS:
1.) What is the overall objective of current U.S. tax law with respect to multinational corporations? What is the objective of tax breaks and deductions allowed against income earned by multinationals in other countries?

2.) How is it possible that the current status of U.S. tax law results in a system which costs the U.S. government more than it collects in tax revenues from this system? How would a "territorial approach" to taxation differ from this current system?

3.) Tax law is designed not only to raise revenues for the government but also to encourage behavior beneficial to society and the economy. How do some argue that current tax law influences corporate decisions in locating operations and resultant job growth prospects?

4.) Others argue that changes to current tax law would do more harm than good in influencing job growth in the U.S. economy. What are the factors that argue against changing the current tax law in this area? Specifically comment on how these factors influence U.S. job growth prospects.

5.) A spokesman for Eli Lilly, the pharmaceutical company, says his employer considers a variety of factors in deciding where to locate operations. Suppose that you are a top manager considering opening a new operation to serve a foreign market that covers several countries. List all factors that you expect to consider in your decision making process.

6.) What "added bonus for companies' reported profits" comes with income earned in low-tax countries which management commits to reinvest in those countries? Through what mechanism does this decision influence reported profits? That is, specifically describe what income statement accounts are influenced by this decision and why the accounting reflects this influence.

Reviewed By: Judy Beckman, University of Rhode Island
Reviewed By: Benson Wier, Virginia Commonwealth University
Reviewed By: Kimberly Dunn, Florida Atlantic University

--- RELATED ARTICLES ---
TITLE: Review & Outlook: Export Tax Follies
REPORTER: WSJ Editors
PAGE: A14
ISSUE: May 05, 2004
LINK: http://online.wsj.com/article/0,,SB108371159350602084,00.html

Bob Jensen's threads on the sham called the U.S. Corporate Tax code are at http://www.trinity.edu/rjensen/FraudRotten.htm#TaxAvoidance

NASA, We Have a Problem

PricewaterhouseCoopers, the agency's auditor, issued a disclaimed opinion on NASA's 2003 financial statements. PwC complained that NASA couldn't adequately document more than $565 billion — billion — in year-end adjustments to the financial-statement accounts, which NASA delivered to the auditors two months late. Because of "the lack of a sufficient audit trail to support that its financial statements are presented fairly," concluded the auditors, "it was not possible to complete further audit procedures on NASA's September 30, 2003, financial statements within the reporting deadline established by [the Office of Management and Budget]."

[The General Accounting Office] said the Arthur Andersen audits were audit failures," says Gregory Kutz.  "They had given NASA clean audit opinions for five years."

"NASA, We Have a Problem," by Kris Frieswick, CFO Magazine, May 2004, pp.54-64 --- http://www.cfo.com/article/1,5309,13502,00.html?f=home_magazine 

Can Gwendolyn Brown fix the space agency's chronic financial woes?

The National Aeronautics and Space Administration has long been criticized for its inability to manage costs. During the 1990s, faced with flat budgets and ambitious program goals, NASA adopted a management approach of "faster, better, cheaper." But by the decade's end, the approach was blamed for a number of mission failures. Meanwhile, the cost of the International Space Station (ISS) spiraled billions of dollars over budget. Embattled administrator Daniel Goldin resigned in 2001 after nearly 10 years on the job, and NASA named Sean O'Keefe, a self-described "bean counter," as Goldin's replacement. Fourteen months later, the loss of the Columbia space shuttle and its seven astronauts shook the agency to its core.

Then, last January, President George W. Bush unveiled a grand "vision" of landing astronauts on the moon by 2020, and on Mars sometime thereafter. The vision gave NASA a new sense of mission, lifted its morale, and raised expectations of steadily increasing budgets. But the vision also came under fire from critics who wondered fire from critics who wondered why the country needed to go to Mars, and how it could afford it.

Two weeks later, troubling new doubts were raised about NASA's financial management. PricewaterhouseCoopers, the agency's auditor, issued a disclaimed opinion on NASA's 2003 financial statements. PwC complained that NASA couldn't adequately document more than $565 billion — billion — in year-end adjustments to the financial-statement accounts, which NASA delivered to the auditors two months late. Because of "the lack of a sufficient audit trail to support that its financial statements are presented fairly," concluded the auditors, "it was not possible to complete further audit procedures on NASA's September 30, 2003, financial statements within the reporting deadline established by [the Office of Management and Budget]."

Ironically, the PwC audit report was posted on the NASA inspector general's Website on March 11 — the same day that O'Keefe testified before a Senate appropriations subcommittee regarding the agency's FY 2005 budget request. But no one seemed to notice, or care.

NASA says blame for the financial mayhem falls squarely on the so-called Integrated Financial Management Program (IFMP), an ambitious enterprise-software implementation. In June 2003, the agency finished rolling out the core financial module of the program's SAP R/3 system. NASA's CFO, Gwendolyn Brown, says the conversion to the new system caused the problems with the audit. In particular, she blames the difficulty the agency had converting the historical financial data from 10 legacy systems — some written in COBOL — into the new system, and reconciling the two versions for its year-end reports. Brown says that despite the difficulties with both the June 30 quarterly financial-statement preparation and the year-end close, the system is up and running, and she has confidence in the accuracy of the agency's financial reporting going forward.

Continued in the article (this is a very long article)

Bob Jensen's threads on Andersen's audit failures are at http://www.trinity.edu/rjensen/FraudEnron.htm 

DERIVATIVES JUNKIES ARE YOUR BANKERS

In spite of the history of enormous losses in speculation in derivative financial instruments and the newer corporate and banking policies restricting the use of derivatives to safe speculations, many companies still cannot resist the temptations to gamble big time in derivatives markets.

"When Bankers' Bets Go Bad:  With a load of derivatives to unwind, banks may face serious trouble from rising rates," by Mara Der Hovanesian, Business Week, June 14, 2004, pp. 78-79 --- http://www.businessweek.com/@@y4MltmUQz2Pg7RMA/premium/content/04_24/b3887084_mz020.htm 

Has your conservative commercial bank suddenly become a day trader placing big bets on interest rates? These days, the odds are it has. At the end of last year banks had a gross $71 trillion worth of derivatives on their books, based mostly on interest rates, according to the Office of the Comptroller of the Currency (OCC). That's double the amount of five years ago. Much of the activity is designed to protect the value of the mortgages they hold. But increasingly, banks are trading simply to make some money on the side.

The tactic can be rewarding. National City Corp. (NCC ), a Cleveland bank, said it earned $295 million pretax from interest-rate swaps in the first quarter. Winston-Salem's BB&T Corp. (BBT ) began hedging its mortgage servicing business with derivatives last summer. It posted a $4 million loss in the first quarter, a tenth of what it would have been without the hedging. Meanwhile, the nation's largest thrift, Washington Mutual Inc. (WM ), also has been "opportunistic" in its buying and selling of mortgage securities, says bank analyst David A. Hendler of CreditSights Inc.: "It was trading Treasury and mortgage-backed securities and taking gains when it could."

The gusher of easy money could be drying up. Earlier this year many banks arranged their portfolios to benefit from low interest rates, betting that those rates would stay down most of the year. So they were caught off guard when rates spiked from their March lows. Many were left holding low-yielding securities and were hit by losses on complex derivative contracts that take time to unwind. "They played the trading game for quite a while, and it worked," says Ron Papanek, market strategist for New York's RiskMetrics Group. "Now they're looking down the barrel of a Fed move." Adds Peter Nerby, a senior bank analyst at Moody's Investors Service (MCO ): "It's going to be a lot tougher for people to make money."

Or worse. The runup in rates in 1994 wreaked havoc on banks' securities holdings. Banks were socked with losses totaling about $16 billion, according to the OCC. Big regional banks such as Chicago's Bank One Corp. (ONE ) and PNC Bank Corp. (PNC ) of Pittsburgh took sizable hits. Cleveland-based KeyCorp (KEY ) lost $865 million, mostly in interest-rate swaps, by the third quarter of that year.

DAMAGE REPORTS
Similar strains are starting to reappear. Shares of New York Community Bancorp Inc. (NYB ), the nation's third-largest thrift, have been in a tailspin because of higher rates. The bank had doubled profits in the past year via a string of successful mergers, but on Apr. 21 it reported that its securities portfolio had unrealized losses of nearly $131 million. The company's shares have fallen 11%, to $23, since then, and it has hired investment bankers to shop the bank around. "We're considering strategies that make the most sense if rates are going up much more aggressively and sooner than anticipated," says the company's chief executive, Joseph R. Ficalora. "The [securities] portfolio is very large, and there's a large amount of leverage. We're looking at ways to deal with it."

Banks are loath to talk about their use of derivatives before they have to do so. So until second-quarter results are released in July, even institutional investors will be in the dark about how badly April's runup in rates hurt bank profits. "It's hard for an outsider to analyze all these derivative positions," says James K. Schmidt, portfolio manager of the $2.4 billion John Hancock Regional Bank Fund (FRBAY ). "We have to take it on faith that these are sophisticated institutions, and presumably they are using derivatives in a rational manner."

Although Warren E. Buffett once complained that all derivatives were "toxic waste," they do fulfill a useful function. Federal Reserve Chairman Alan Greenspan argues that their widespread use spreads risk among different market players, including nonfinancial companies, making the financial system a lot safer. All the same, Greenspan reminds banks that they need to keep pace with changes in the market and "readjust accordingly." Bank executives who aren't nimble enough to sidestep rate shocks could find themselves facing big losses or, worse, a quick sale to a larger -- and savvier -- competitor.

Bob Jensen's threads of derivatives financial instruments scandals are at http://www.trinity.edu/rjensen/FraudRotten.htm#DerivativesFrauds 

Bob Jensen's tutorials on derivatives financial instruments accounting are at http://www.trinity.edu/rjensen/caseans/000index.htm 

From the Scout Report on May 7, 2004

World Bank: Anticorruption ---  http://www1.worldbank.org/publicsector/anticorrupt/index.cfm

In its many different guises, corruption around the world tends to affect the poor, who are often the most reliant on the provision of public services, and are also least likely to be able to pay the extra costs associated with bribery and fraud. The World Bank has identified corruption as "the single greatest obstacle to economic and social development," and thusly has set up this anticorruption website to serve as an online resource for policy-makers, non-governmental organizations (NGOs), and other interested parties. On the site, the World Bank lays out its strategy for combating corruption, which includes increasing political accountability, strengthening civil society participation, and improving public sector management. The site also contains a number of helpful resources, such as toolkits for assessing government performance in this area, and information and reports on various regional and country-based approaches to dealing with corruption. The site is rounded out by a calendar of events and key strategy documents, such as "Reforming Public Institutions and Strengthening Governance, A World Bank Strategy."

May 5, 2004 message from 

Here's a webzine for those who want "real poetry" - of all sorts except blank verse:

http://www.poetryrenewal.com/ 

Their Mission Statement: Poetry Renewal will refresh and renew the standards and disciplines that have been lacking in much of poetry in the last fifty to 150 years. We will give an outlet for more disciplined verse that has been disrespected by late twentieth century academics. We will not be iconoclasts. We will uphold the poetic traditions and disciplines that sustained our civilization for thousands of years. We will be praising and featuring those who make a study of and apply the art and craft of poetry.

Roberta Lipsig 
Professor Emerita 
Formerly at SUNY Oswego now in Gainesville FL (
Hey Bob, I went in the opposite direction from you.)

 

Five Killer Patents
Technology Review selects five of the most important U.S. patents issued in 2003. These inventions—which range from a safer lung biopsy technique to software for fighting telephone-transaction fraud—will profoundly influence their fields for years to come.
http://www.technologyreview.com/articles/patents0504.asp?trk=nl

Question
What is moral hazard?  How is a new reward policy by Microsoft creating moral hazard?

Answer
Moral hazard arises when a system or policy within government, corporations, families, law, or elsewhere creates an opportunity to gain from being immoral and/or unethical.  In many cases the hazard invites an illegal act for personal gain.  The best known moral hazard is an insurance contract.  For example, during the S&L crisis it was reported that some owners of luxury cars who had lost their jobs and could no longer afford high car payments were leaving them parked on San Antonio streets in high crime areas with the keys in the car.  This was an open invitation to have the cars stolen just to collect insurance money in a city where thousands of cars are stolen each month and disappear south of the Rio Grande.  

Where's the moral hazard?  The moral hazard arises when it was more profitable to simply collect insurance money than to take the time, cost, and risk of selling in a down market.  Arson is frequently committed because of the moral hazard of fire insurance.  Life insurance sometimes creates a moral hazard for murder or faked suicide.

Much of the recent looting of corporations by top management was caused by moral hazard arising from lax oversight by "gatekeepers" such as auditors, audit committees, and boards of directors.  Lax punishment of white collar crime is a huge source of moral hazard --- http://www.trinity.edu/rjensen/fraudconclusion.htm#CrimePays 

Another similar type of moral hazard is caused by lax law enforcement.  Near the south Texas border, children from Mexico who steal vehicles in Texas are seldom prosecuted.  Instead they are returned to Mexico and reappear the next day attempting to steal more vehicles.  Adults use very young children in organized gangs because children are less likely to be prosecuted.

Microsoft is creating somewhat of a moral hazard with a new policy of offering rewards for the capture of hackers.  The reward $250,000 is probably pretty good pay for teenagers in countries where penalties are very lax for first-time teenage offenders.  Germany is one of those countries with lax penalties.  

If I were a teenager hacker in Germany, I might think about raising some hell for Microsoft and then have my friends or parents turn me in for the reward.  Chances for probation are very high, and the reward collected may be enough to finance my college education.

It is not clear that Microsoft really "won one."

"In Virus Wars, Microsoft Wins One," by Nick Wingfield, The Wall Street Journal, May 10, 2004, Page A3 --- http://online.wsj.com/article/0,,SB108401726263605863,00.html?mod=home_whats_news_us 

Firm's Cash-Reward Offer Yields Its First Arrest Sasser Suspect in Germany

Microsoft Corp. claimed a breakthrough in the war against computer viruses, after the software company's cash-reward program led to the arrest of a German teenager believed to be responsible for the disruptive "Sasser" and "Netsky" programs.

After a whirlwind three-day effort to validate a tip from informants, authorities in the German state of Lower Saxony on Friday arrested an 18-year-old engineering student at a local technical school. The suspect, who wasn't identified by name, later confessed, German police said.

Microsoft said its Munich offices received the tip by telephone from acquaintances of the suspect. Executives at the Redmond, Wash., company said the informants will together collect a $250,000 reward from Microsoft if the suspect is convicted. The company wouldn't identify the informants or give much additional information about them, other than to say there was more than one person and fewer than five.

"For us, this is something of a defining moment in demonstrating our ability to combat malicious code in collaboration with the authorities," said Brad Smith, Microsoft senior vice president and general counsel.

The arrest is the first time a suspect has been nabbed under a reward program that Microsoft launched in November, setting up a $5 million fund, in conjunction with Interpol, the Federal Bureau of Investigation and the Secret Service. Writers of viruses, worms and other disruptive programs typically target computers running Microsoft's dominant Windows operating system and other software. The increasingly debilitating impact of the malicious programs has started to hurt Microsoft's software sales to corporations.

Security flaws in its software have proved difficult for Microsoft to eliminate. But if more hackers prove willing to snitch on each other for money, virus writers could be deterred by the threat of jail time from releasing their creations. Files found on suspects' computers also could lead to additional arrests, and provide other information to help security experts block malicious code.

Sasser began infecting computers across the Internet just over a week ago. Unlike other malicious programs, which typically infect computers after users click on attachments to e-mail messages, Sasser doesn't require a user to take any action. Instead, the worm scans the Internet for vulnerable computers, infects them and uses those machines to search for other potential targets. Sasser doesn't erase files on a user's computer, but it does slow down computers, causing them to crash in some cases.

Security experts believe Sasser has infected millions of computers globally on the Internet. Last week, it infected a third of Taiwan's post-office branches, and 20 British Airways flights were each delayed about 10 minutes Tuesday due to Sasser troubles at check-in desks, according to the Associated Press.

Despite the arrest of its suspected creator, Sasser is expected to continue its disruptions. "It's a bit like Pandora's box -- once the box has been opened, you can never put it away," said Graham Cluley, a senior technology consultant at Sophos Inc., a security software firm in Lynnfield, Mass. "We believe the worm will carry on infecting people for months to come."

Early yesterday, not long after the German suspect's arrest was announced, a new variant of the Sasser began infecting computers in Portugal, France and other European countries, according to executives at PandaLabs, a security software firm. "This fact confirms our fears that he is not the only person programming the Sasser and Netsky worms, but rather it is an organized group of delinquents," said Luis Corrons, head of PandaLabs.

Security experts had previously suspected that a group called Skynet was responsible for both Sasser and Netsky, a program released early this year that has been followed by many variants. A message contained in a recent variant, Netsky.AC, claimed responsibility for the group.

Microsoft said it received the tip Wednesday from the informants, who were aware of the reward program. Company investigators in Europe and the U.S. began working feverishly to verify technical information provided by its informants to prove that the suspect was the creator of the Sasser worm, the company said. Once it verified the information from the informants, which it declined to describe, Microsoft said it notified German police.

Continued in the article

Bob Jensen's threads on moral hazard and white collar crime are at http://www.trinity.edu/rjensen/fraudconclusion.htm#CrimePays 

Interest rate swap derivative instruments are widely used to manage interest rate risk, which is viewed as a perfectly legitimate use of these hedging instruments.  I stumbled on to a rather interesting doctoral dissertation which finds that firms, especially banks, use such swaps to manage earnings.  The dissertation from Michigan State University is by Chang Joon Song under Professor Thomas Linsmeier.

"Are Interest Rate Swaps Used to Manage Banks' Earnings," by Chang Joon Song, January 2004 --- http://accounting-net.actg.uic.edu/Department/Songpaper.pdf 

This dissertation is quite clever and very well written.  

Previous research has shown that loan loss provisions and security gains and losses are used to manage banks’ net income. However, these income components are reported below banks largest operating component, net interest income (NII). This study extends the literature by examining whether banks exploit the accounting permitted under past and current hedge accounting standards to manage NII by entering into interest rate swaps. Specifically, I investigate whether banks enter into receive-fixed/pay-variable swaps to increase earnings when unmanaged NII is below management’s target for NII. In addition, I investigate whether banks enter into receive-variable/pay-fixed swaps to decrease earnings when unmanaged NII is above management’s target for NII. Swaps-based earnings management is possible because past and current hedge accounting standards allow receive-fixed/pay-variable swaps (receivevariable/ pay-fixed) to have known positive (negative) income effects in the first period of the swap contract. However, entering into swaps for NII management is not costless, because such swaps change the interest rate risk position throughout the swap period. Thus, I also examine whether banks find it cost-beneficial to enter into offsetting swap positions in the next period to mitigate interest rate risk caused by entering into earnings management swaps in the current period. Using 546 bank-year observations from 1995 to 2002, I find that swaps are used to manage NII. However, I do not find evidence that banks immediately enter into offsetting swap positions in the next period. In sum, this research demonstrates that banks exploit the accounting provided under past and current hedge accounting rules to manage NII. This NII management opportunity will disappear if the FASB implements full fair value accounting for financial instruments, as foreshadowed by FAS No. 133.

What is especially interesting is how Song demonstrates that such earnings management took place before FAS 133 and is still taking place after FAS 133 required the booking of swaps and adjustment to fair value on each reporting date.  It is also interesting how earnings management comes at the price of added risk.  Other derivative positions can be used to reduce the risk, but risks arising from such earnings management cannot be eliminated.

Bob Jensen's threads on FAS 133 and IAS 39 are at http://www.trinity.edu/rjensen/caseans/000index.htm 

An elaborate game created last year by the McCombs School of Business at the University of Texas at Austin teaches students about handling the delicate balance of business and ethics, and the sometimes high moral price of too much cost cutting.

"A Delicate Balance," by Scott McCartney, The Wall Street Journal, May 10, 2004, Page R7 --- http://online.wsj.com/article/0,,SB108379356955403126,00.html?mod=gadgets%5Fprimary%5Fhs%5Flt 

For one business-school class, a simulation game provided
a painful lesson in the price of obsessive cost cutting

For the young executives at computer-maker InfoMaster Ltd., the company budget was on the line. Terrorism threats were swirling in Jakarta, Indonesia, and the company had to either shut down production there for one quarter and harden security or keep churning out hot-selling products.

The executives opted for production over protection. Soon after, a bomb exploded at the plant.

"I just killed 350 people," said a dazed David Marye, InfoMaster's 25-year-old chief ethics officer. "I made a bad call, and people died. It's going to be hard to sleep tonight."

Luckily for Mr. Marye, both InfoMaster and the terrorist attack were fictitious, part of an elaborate game created last year by the University of Texas at Austin's McCombs School of Business. Three made-up student-run companies competed in the cutthroat computer-hardware industry, all trying to maximize revenue, keep costs down and beat back competitors. But the prizes -- $11,000 and the chance to perform in front of a high-level, real-world executive panel -- were real.

While the Sim City for the business world appeared to be about the bottom line, the real intent was to teach students about handling the delicate balance of business and ethics, and the sometimes high moral price of too much cost cutting. The results were eye opening -- and painful. Idealistic students, who started the game preaching virtue, succumbed to the everyday challenges of making their numbers and whipping the competition. Buying cheaper components or hiring cheaper workers would allow more production. Not spending resources on training or quality control would let them get new products to markets faster, but there might be a price to pay down the road. The game proved so realistic that some students were stunned that, under pressure, they readily chose corner-cutting paths they had vowed never to take.

The Texas program was created after the WorldCom scandal broke, as officials looked for ways to teach better behavior to M.B.A. students. The academics knew that while students talk like angels in ethics classes, they behave avariciously in finance classes. "Ethical issues aren't being addressed in financing, marketing and accounting classes," says Steve Salbu, the associate dean for graduate programs and founder of the school's business-ethics program. "We needed to try to do something we think might be effective."

Applying Pressure

Steven Tomlinson, a finance lecturer who has a background in theater, pushed to put students under pressure and throw choices at them. He hired Allen Varney, an Austin-based designer of video and board games, and consulted with a soap-opera scriptwriter and corporate executives. Scripts were written, rules devised and software created to track decisions.

The result was the Executive Challenge, a three-day game played late last year, where teams of about two dozen students were divided into three companies, with each given a limited amount of production capacity and a set of workers with varying skills. A company could borrow money, and it could spend cash to increase capacity or add products or workers. But it also had to take care of existing projects and decide whether to spend precious resources on corporate-culture projects such as diversity training and quality programs.

A three-month financial quarter typically lasted 30 minutes, forcing companies to communicate and make decisions in rapid-fire fashion. The game offered both individual and corporate shortcuts and lures. Early on, players might get away with ignoring problems and postponing expenses, but then the problems grew like weeds. A team could opt for lower quality for a quarter or two, only to discover later that its computer batteries exploded -- a scenario taken from Dell Inc.'s history.

"The game is all about temptation," Mr. Varney says. "Business-school students, as a breed, are overconfident, and the game really plays to that."

Going in, students suspected that the game would likely test their ethics since they had just come off a week of traditional ethics training. On the first day, all three made-up companies -- InfoMaster, General Data Machines Inc. and Starr Computing Co. -- spent money on corporate-culture initiatives at the expense of new products, surprising Mr. Varney, the game designer. "All those goody-goodies are doing the corporate-culture initiatives," he said, "which makes no sense in dollars and cents."

Textbook Traits

Indeed, the teams created their companies around textbook traits like collaborative decision making and promises to share prize money equally. Fearful of repercussions, executives decided to pay themselves little if any salary. "They were remarkably socialistic," Dr. Tomlinson says.

InfoMaster even created an ethics team with leaders from different departments, headed by Mr. Marye, who worked as an analyst for Houston-based Enron Corp. before seeking a master's degree.

Yet as the revenue race tightened, behavior changed. On the second day, each company learned that it had hired an employee who had stolen software from a competitor and that the stolen code was now used in the company's highest-margin products. General Data and Starr both opted to turn themselves in and try to negotiate licenses. InfoMaster, despite its ethics team, took the path of least resistance, hoping not to get caught.

General Data proved consistent with its choices -- for the most part. Faced with a toxic-waste issue at a river near one of its plants, it opted to dredge the river and make the issue public, even though it didn't believe it was responsible for the pollution. But doing the right thing came at a price. The company was in last place in revenue after the first day.

"Ben and Jerry would not do well at this game," Mr. Varney says, referring to the socially concerned ice-cream entrepreneurs.

Much as the game's creators expected, student executives began routinely opting for less-expensive options by the end of the second day. General Data was hit with a sexual-harassment complaint against its vice president of sales, and it chose to postpone action while investigating the allegation. At the time, the company was short of cash and was trying to aggressively ramp up product development to catch competitors. Besides, a previous complaint had turned out to be unfounded.

This time, though, the investigation discovered that the complaint was credible, and major. "We thought we did the right thing," said Jay Manickam, a former consultant for Andersen and Deloitte & Touche who was General Data's chief executive. "But this is apparently going to be a hit."

Continued in the article

Bob Jensen's threads on edutainment and learning games are at http://www.trinity.edu/rjensen/000aaa/thetools.htm#Edutainment 

Google is now beta testing a News Alert System that includes news alerts about scams in various regions of the U.S. --- http://www.google.com/newsalerts?q=%22Better+Business+Bureau%22&hl=en 

Better Business Bureau Sets More Records, Releases Its Top Ten --- http://www.dayton.bbb.org/topten2004.html 

Financial services is new to the top ten lists with a dramatic 900% increase in complaints. The 90 complaints in this industry can all be contributed to one company in our service area, which does business nationwide. The complaints against this company concern a wide variety of issues, including advertising, sales, delivery, repair or service, guarantee or warranty, product quality, refund or exchange, contract, customer service and credit or billing issues. Donna Childs, CAE, BBB President & CEO, says, "It is vital that consumers read contracts and ask questions. If you don't know what something means, ask for clarification. And, always read the fine print."

Mortgage companies and brokers continue to be high on both lists. This can be contributed to the fact that interest rates are still attractive. The 36% increase in inquiries on companies in this industry is due to consumers checking around to find reputable companies to do business with. Unfortunately, complaints are up 50% in this industry also. This increase may be attributed to a high demand in this industry. Companies are having a difficult time keeping up with the volume of business.

The home improvement industry and related industries like heating & A/C, windows, plumbers and roofing contractors continue to be among the most complained and inquiried about industries. Though they are still on the top ten lists, some of these industries have seen a decrease in activity. Donna Childs says, "Roofing contractors have seen a 29% decrease in the number of complaints filed in their industry and a 33% decrease in the number of inquiries. This can be attributed to the fact that the majority of roofing jobs generated from the 2001 hail storms have been completed and the activity in this industry is falling back to normal levels."

Work-at-home offers were new to the top ten complaint list. Again, this was due to one company operating in our service area. The company involved has a pattern of unanswered complaints concerning unfulfilled contracts, selling practices and advertising practices.

Donna Childs says, “Ads promoting assembly work, chain letters, envelope stuffing, multi-level marketing, online business and medical insurance claims processing are tempting, but many people are victimized by work-at-home schemes like these and are losing more money than ever. In fact, the Federal Trade Commission reports work-at-home schemes were one of the top ten consumer frauds that it received complaints about in 2002." She continues, "It’s important to keep in mind that any work-at-home offer requiring an upfront fee or purchase is probably not legitimate. If you send money to one of these, you will probably never see your money again or earn money by working at home. Avoiding work-at-home opportunities is the easiest way to save your money. But, if you are considering an offer, investigate before you commit or pay fees. Ask questions and get ten references from people successful in the venture in your area. Don’t feel pressured to make a decision."

Also new to the lists are tree cutting and trimming companies and home furnishing stores. Complaints against tree cutters and trimmers varies from missed appointments, incomplete work and failure to call customers back. Donna Childs says, "One of the common complaints the BBB hears involves stump removal. One of these contractors may cut down a tree in a yard and promise to come back and take out the stump. Time goes by, call after unreturned call, the stump is still in the yard, leaving a frustrated consumer."

Home furnishing stores complaints involve warranty issues. For example, a customer has a couch delivered and the customer notices it is ripped upon arrival. The customer is upset because instead of replacing the couch the company sends someone out to fix it. This action may be covered by the warranty, but the consumer is upset because they wanted a new couch, not one that has been repaired.

Donna concludes, “The bottomline is you need to know who you are doing business with. So, before you do business with a stranger, check with a friend…your Better Business Bureau." Put the BBB to work for you by visiting www.dayton.bbb.org or calling (937) 222-5825 or (800) 776-5301, 24/7.

Additional information about the industries on the Better Business Bureau's top ten follows.

The Better Business Bureau of Dayton/Miami Valley, Inc. is a private, nonprofit association founded in 1925. The Bureau serves the Miami Valley, including Montgomery, Greene, Clark, Darke, Miami, Preble, Shelby and northern Warren Counties.

Bob Jensen's helpers for frauds and scam prevention are at http://www.trinity.edu/rjensen/FraudReporting.htm 

James Joyce: The Brazen Head ---  http://www.themodernword.com/joyce/index.html 

From Syllabus News on June 8, 2004

UC Irvine Computer Science School Gets Extreme Make-Over

The University of California, Irvine, said its School of Information and Computer Science will be renamed the Donald Bren School of Information and Computer Sciences, honoring the Orange County businessman and philanthropist who made a $20 million gift to ICS last December that equaled the largest gift ever to UCI.

The school will celebrate its new name and the promise of a new dedicated computer science building, today at a June 9 campus ceremony.

At the ceremony, ground will be broken for the school's new, six-story, 138,000-square-foot research and classroom facility. The building is being financed by the recent passage of the state’s Proposition 55 and Proposition 47 initiatives, which authorized funds to build, repair and improve the state's public education facilities. It is scheduled for completion in 2006 and will be named Bren Hall.

The $20 million gift, from Bren, who is chairman of the Irvine Co., provides more than $18 million to create 10 endowed chairs for distinguished faculty, and enables ICS to compete for the world's top computer scientists. The balance of the gift creates an endowed fund for excellence, enabling ICS to develop and advance interdisciplinary and university-industry collaborations emphasizing new research and enhanced technology transfer efforts.

 

"Pfizer to Pay $420 Million in Illegal Marketing Case," by Gardiner Harris, The New York Times, May 14, 2004 --- http://www.nytimes.com/2004/05/14/business/14drug.html?adxnnl=1&adxnnlx=1084625069-/wSuN5bzAP1sLrmecAbZvw 

Pfizer, the world's largest pharmaceutical company, pleaded guilty yesterday and agreed to pay $430 million to resolve criminal and civil charges that it paid doctors to prescribe its epilepsy drug, Neurontin, to patients with ailments that the drug was not federally approved to treat.

Of that settlement, $26.64 million will go to a former company adviser who brought a lawsuit under a federal "whistleblower" law.

The company encouraged doctors to use Neurontin in patients with bipolar disorder, a psychological condition, even though a study had shown that the medicine was no better than a placebo in treating the disorder. Other disorders for which the company illegally promoted Neurontin included Lou Gehrig's disease, attention deficit disorder, restless leg syndrome and drug and alcohol withdrawal seizures.

Although doctors are free to prescribe any federally approved drug for whatever use they choose, pharmaceutical companies are not allowed to promote drugs for nonapproved purposes. Neurontin was initially approved to treat epileptic seizures in patients who had failed to improve using other treatments, but it has become one of the biggest-selling drugs in the world, with sales last year of $2.7 billion. Nearly 90 percent of the drug's sales continue to be for ailments for which the drug is not an approved treatment, according to recent surveys.

"This illegal and fraudulent promotion scheme corrupted the information process relied upon by doctors in their medical decision-making, thereby putting patients at risk," said the United States attorney in Boston, Michael Sullivan, in a statement yesterday.

Pfizer, in a statement yesterday, said that the illegal marketing had been conducted by Warner-Lambert before Pfizer acquired that company in 2000.

"Pfizer has cooperated fully with the government to resolve this matter, which did not involve Pfizer practices or employees," the company said.

Pfizer took a $427 million charge in January against its fourth-quarter 2003 earnings to pay for the expected settlement. The government calculated that the company's illegal promotions brought it $150 million in ill-gotten gains. A standard multiplier was used to come up with the $430 million fine.

The case is one of many undertaken in recent years by federal prosecutors in Boston and Philadelphia who are examining efforts by drug companies to market their drugs for unapproved uses and pay doctors for prescriptions. And while the pharmaceutical industry recently adopted voluntary guidelines that have eliminated many of the gifts and payments once routinely dispensed to doctors, the industry's aggressive promotions continue.

Continued in article

Bob Jensen's threads on corporate fraud are at http://www.trinity.edu/rjensen/Fraud.htm 

May 6, 2004 message from Mike Gasior [mike@afs-seminars.com] 

LIVING IN A WAL-MART WORLD

Let me first say, that in the past five years or so, I have grown into a total and complete fan of the Wal-Mart experience. It has now come to the point that if I know Wal-Mart sells a particular item; I won't even bother to shop around for the lowest price. I'll simply head on over to Wal-Mart and make the purchase with reasonable confidence that I'm getting the best deal.

I've grown somewhat sick of the cultural elitists who look down their noses at both Wal-Mart and the people who shop there, claiming the costs to society outweigh the benefits of cheap motor oil and dog food. Frankly, I wish these complainers would keep their whiny opinions to themselves and continue to purchase their Brie and Chardonnay wherever they do their shopping while allowing me to accumulate cheap TV's, DVD's and CD's to my hearts content. After all, cheap stuff is cheap stuff.

To understand what a monster Wal-Mart has become, consider the following facts:

--Wal-Mart produces EIGHT times more revenue every year than Microsoft.

--That amount of revenue is a teeny bit more than the Gross Domestic Product of Sweden.

--Wal-Mart now has as many supercenters (stores that combine a complete regular Wal-Mart with a complete supermarket) as it has regular retail stores and Wal-Mart is now the largest grocer in America. Wal-Mart is also the third largest pharmacy in the U.S.

--Wal-Mart intends to open another thousand of these supercenters during the next five years.

--Arkansas has a population of about 2.7 million people and has more than 85 Wal-Mart stores.

--The New York City Metropolitan area has over 8.0 million people and no Wal-Mart stores.

--Los Angeles has a population of around 9.0 million people and has one Wal-Mart.

--Wal-Mart sells more stuff every year than Kmart, Sears, Target, Walgreens, JCPenney and Kroger...COMBINED!

--82% of everyone in the United States bought at least SOMETHING at Wal-Mart in 2002.

--One out of every three diapers sold in America is sold at Wal-Mart.

--If Sam Walton were still alive today (he died at 74 in 1992) he would easily be the richest person in the world with a fortune about double the size of Bill Gates.

--In 42 years of operation, Wal-Mart has NEVER grown less than 10% in a year and their sales are already up 11.6% in 2004.

So there may always be those people who look down on lowly Wal-Mart, but they should spend more of their apparent free time looking for a better run business than this one.

Added comment by Bob Jensen

I think there is one Wal-Mart store in Northern New Hampshire ( Littleton ) that serves northern Vermont , parts of Maine , and southern Quebec .

The parking lot is nearly always filled to capacity. 

Shoppers have to take turns to go down the aisles. 

You might as well take a book along while you’re waiting to check out.  

Over half the shoppers are from outside New Hampshire partly because this is the only Wal-Mart in the region and partly because New Hampshire has no sales tax.

Sigh from http://www.trinity.edu/rjensen/NHcottage/NHcottage.htm

May 5, 2004 reply from Bob Jensen

Hello again Roberta,

I've no objection to your having moved to Florida in retirement (where you can keep your driver's license even if you go blind and/or gaga), but I'm real sorry that you became a Gator.  Now you will have to do undignified things on Saturday afternoons during football season.

I wish you all the very best health, happiness, and losing seasons.

Here are a few starting lines that you might work into poems

• Sarbanes-Oxley Maxim:  Accountants are now top dollar!
  

• Worldcom Maxim: When you make a mistake of adding fiction to the right side of the accounting statement, you may then add it to the left side too.
  

• Enron Maxim:  Accountants work their assets offshore!
  
• Economists are people who work with numbers but are not as creative as accountants.
  
• With these losses we're expecting an accounting miracle from you Lipsig.
  Lipsig:  I'm an accountant...and a magician!

********************

This one was published in a Canadian Journal, but the author is from your (former) home state.  Good thing you left New York

First rule of accounting --- http://www.camagazine.com/index.cfm/ci_id/6181/la_id/1.htm 

Accounting is boring so says everyone,
I beg to differ, once you've begun.
The theory makes sense, it's merely a tool,
Debits equal credits, that's the first rule.
Debits and credits are names for location,
It's really that simple, not cause for vexation.
A debit goes on the left, in dollars, not sense,
An increase to assets or an expense.
A credit goes on the right, that's its position,
A liability or income, by definition.
Cash is an asset, most folks would agree,
Though it can't be replenished by plucking a tree.
So start with the cash or similar thing,
For the hint it provides so your hands you won't wring.
"It's not quite that simple," you protest, you demur,
"You're positively right," I allow, there's more to be sure.

Barb Babij, New York

Forwarded by Dick Haar

A man staggers into an emergency room with a concussion, multiple bruises, two black eyes and a five iron wrapped tightly around his throat. Naturally the doctor asks him what happened.

"Well, it was like this," said the man.  "I was having a quiet round of golf with my wife when at a difficult hole we both
 sliced our balls into a pasture of cows. We went to look for them and while I was rooting around I noticed one of the cows had something white at its rear end.  I walked over and lifted up the tail and sure enough, there was a golf ball with my wife's monogram on it------stuck right in the middle of the  cow's butt.  That's when I made my big mistake."

 "What did you do?" asks the doctor.

"Well, I lifted the cow's tail and yelled to my wife. Hey, this looks like yours!"

"I don't remember much after that," he moans.

Forwarded by Team Carper

A tough old cowboy once counseled his grandson that if he wanted to live a long life, the secret was to sprinkle a pinch of gunpowder on his oatmeal every morning.

The grandson did this religiously and lived to the age of 110.

He left behind 4 children, 20 grandchildren, 30 great-grandchildren, 10 great-great-grandchildren - and a fifty-foot hole where the crematorium used to be.

Corporate lessons forwarded by Inga Munsinger

Corporate Lesson 1

A man is getting into the shower just as his wife is finishing up her shower when the doorbell rings. After a few seconds of arguing over which one should go and answer the doorbell, the wife gives up, quickly wraps herself up in a towel and runs downstairs. When she opens the door, there stands Bob, the next door neighbor. Before she says a word, Bob says, "I'll give you $800 to drop that towel that you have on." After thinking for a moment, the woman drops her towel and stands naked in front of Bob. After a few seconds, Bob hands her 800 dollars and leaves. Confused, but excited about her good fortune, the woman wraps back up in the towel and goes back upstairs. When she gets back to the bathroom, her husband asks from the shower, "Who was that?" "It was Bob the next door neighbor," she replies. "Great!" the husband says, "Did he say anything about the $800 he owes me?"

Moral of the story: If you share critical information pertaining to credit and risk with your shareholders in time, you may be in a position to prevent avoidable exposure.

Corporate Lesson 2

A priest was driving along and saw a nun on the side of the road. He stopped and offered her a lift which she accepted. She got in and crossed her legs, forcing her gown to open and reveal a lovely leg. The priest had a look and nearly had an accident. After controlling the car, he stealthily slid his hand up her leg. The nun looked at him and immediately said, "Father, remember Psalm 129?" The priest was flustered and apologized profusely. He forced himself to remove his hand. Changing gear, he let his hand slide up her leg again. The nun once again said, "Father, remember Psalm 129?" Once again the priest apologized "Sorry sister but the flesh is weak." Arriving at the convent, the nun got out gave him a meaningful glance and went on her way. On his arrival at the church, the priest rushed to retrieve a bible and looked up Psalm 129. It said, "Go forth and seek, further up, you will find glory."

Moral of the story: If you are not well informed in your job, you might miss a great opportunity.

Corporate Lesson 3

A sales rep, an administration clerk and the manager are walking to lunch when they find an antique oil lamp. They rub it and a Genie comes out in a puff of smoke. The Genie says, "I usually only grant three wishes, so I'll give each of you just one. " Me first! Me first!" says the admin. clerk. "I want to be in the Bahamas, driving a speedboat, without a care in the world." Poof! She's gone. In astonishment, "Me next! Me next!" says the sales rep. "I want to be in Hawaii, relaxing on the beach with my personal masseuse, an endless supply of pina coladas and the love of my life." Poof! He's gone. "OK, you're up," the Genie says to the manager. The manager says, "I want those two back in the office after lunch."

Moral of the story: Always let your boss have the first say.

Corporate Lesson 4

A crow was sitting on a tree, doing nothing all day. A small rabbit saw the crow and asked him, "Can I also sit like you and do nothing all day long?" The crow answered: "Sure, why not." So, the rabbit sat on the ground below the crow, and rested. All of a sudden a fox appeared, jumped on the rabbit and ate it.

Moral of the story: To be sitting and doing nothing, you must be

sitting very high up.

Corporate Lesson 5

A turkey was chatting with a bull. "I would love to be able to get to the top of that tree," sighed the turkey, but I haven't got the energy." "Well, why don't you nibble on some of my droppings?" replied the bull. "They're packed with nutrients." The turkey pecked at a lump of dung and found that it actually gave him enough strength to reach the lowest branch of that tree. The next day, after eating some more dung, he reached the second branch. Finally after a fourth night, there he was proudly perched at the top of the tree. Soon he was promptly spotted by a farmer, who shot the turkey out of the tree.

Moral of the story: Bull$hit might get you to the top, but it won't keep you there.

Forwarded by the Cha Cha Lady

Did you hear about the two blondes who froze to death in a drive-in movie? They went to see "Closed for the winter," ***************

Why did the blonde resolve to have only 3 children? She heard that 1 out of every 4 children born in the world was Chinese. ***************

Bambi (a blonde) goes to the local novelty shop and finds a pair of x-ray glasses. She checks them out, and isn't fully convinced, but as usual, the store assistant comes along and closes the deal. On her way home, Bambi puts on her new x-ray glasses and, bingo! She sees everyone in the street naked. She takes them off for a moment, and everyone has their clothes on. Puts the glasses back on...everyone is naked! "Cool!" As she arrives back home, she is eager to show her new toy to her husband, but can't find him. She goes up to the bedroom and finds her husband and the young woman from next door naked in bed. She takes the glasses off, and the two are still naked. She put them back on, and they are still naked. Bambi then says: "Darn, I just paid fifty bucks for these and they're already broken!" 
****************

A blonde hurries into the emergency room late one night with the tip of her index finger shot off. "How did this happen?" the emergency room doctor asked her. "Well, I was trying to commit suicide," the blonde replied. "What?" sputtered the doctor. "You tried to commit suicide by shooting your finger off?" "No, Silly!" the blonde said. "First I put the gun to my chest, and I thought: I just paid $6,000.00 for these breast implants, I'm not shooting myself in the chest." "So then?" asked the doctor. "Then I put the gun in my mouth, and I thought: I just paid $3000.00 to get my teeth straightened, I'm not shooting myself in the mouth." "So then?" "Then I put the gun to my ear, and I thought: This is going to make a loud noise. So I put my finger in the other ear before I pulled the trigger." 
*****************

Did you hear about the near-tragedy at the mall? There was a power outage, and twelve blondes were stuck on the escalators for over four hours. 
*****************

A blonde was driving home after a game and got caught in a really bad hailstorm. Her car was covered with dents, so the next day she took it to a repair shop. The shop owner saw that she was a blonde, so he decided to have some fun. He told her just to go home and blow into the tail pipe really hard, and all the dents would pop out. so, the blonde went home, got down on her hands and knees and started blowing into her tailpipe. Nothing happened. So she blew a little harder, and still nothing happened. Her roommate, another blonde, came home and said, "What are you doing?" The first blonde told her how the repairman had instructed her to blow into the tail pipe in order to get all the dents to pop out.

The roommate rolled her eyes and said, "Uh, like hello! You need to roll up the windows first." 
****************

A blonde went to an eye doctor to have her eyes checked for glasses. The doctor directed her to read various letters with the left eye while covering the right eye. The blonde was so mixed up on which eye was which that the eye doctor, in disgust, took a paper lunch bag with a hole to see through, covered up the appropriate eye and asked her to read the letters. As he did so, he noticed the blonde had tears streaming down her face. "Look," said the doctor, "there's no need to get emotional getting glasses." "I know," agreed the blonde, "but I kind of had my heart set on wire frames," 
****************

A blonde was shopping at a Target Store and came across a silver thermos. She was quite fascinated by it, so she picked it up and brought it over to the clerk to ask what it was. The clerk said, "Why, that's a thermos.....it keeps things hot and some things cold." "Wow!" said the blonde, "that's amazing....I'm going to buy it !" So she bought the thermos and took it to work the next day. Her boss saw it on her desk. "What's that?" he asked . "Why, that's a thermos.....it keeps hot things hot and cold things cold," she replied. Her boss inquired, "What do you have in it?" The blonde replied, "Two popsicles, and some coffee."

Forwarded by Mindy Brent

SPELL CZECH

Eye halve a spelling chequer. It came with my pea sea. It plainly marques four my revue miss steaks eye kin knot sea.

Eye strike a key and type a word and weight four it two say Weather eye am wrong oar write. It shows me strait a weigh.

As soon as a mist ache is maid, it nose bee fore two long And eye can put the error rite. Its rarely ever wrong.

Eye have run this poem threw it, I am shore your pleased two no. Its letter perfect in it's weigh. My chequer tolled me sew.

source unknown

Over the Hill Swingers (Set to Music) --- http://webs.lanset.com/lindenschmitt/epix/OverTheHillSwing.htm 

How To Tell If You're Over The Hill (forwarded by The Cha Cha Lady)

You no longer laugh at Preparation H commercials.

Your arms are almost too short to read the newspaper.

You buy shoes with crepe rubber soles.

The only reason you're still awake at 2 A.M. is indigestion.

People ask you what color your hair used to be.

You enjoy watching the news.

Your car must have four doors.

You no longer think of speed limits as a challenge.

You have a dream about prunes.

You browse the bran cereal section in the grocery store.

You start worrying when your supply of Ben Gay is low.

You think a CD is a certificate of deposit.

You have more than 2 pair of glasses.

You read the obituaries daily.

Your biggest concern when dancing is falling.

You enjoy hearing about other peoples operations.

You wear black socks with sandals.

You know all the warning signs of a heart attack.

You dance slow to this song --- http://webs.lanset.com/lindenschmitt/epix/OverTheHillSwing.htm 

 For my generation:  I especially remember "those?"  (Turn up your speakers full blast) --- http://www.singingman.us/DYR.htm 
The home page is at http://www.singingman.us (with more songs)

And that's the way it was on June 10, 2004 with a little help from my friends.

Jesse's Wonderful Music for Romantics (You have to scroll down to the titles) --- http://www.jessiesweb.com/

I highly recommend TheFinanceProfessor (an absolutely fabulous and totally free newsletter from a very smart finance professor) --- www.FinanceProfessor.com 

 

Bob Jensen's bookmarks for accounting newsletters are at http://www.trinity.edu/rjensen/bookbob1.htm#News 

News Headlines for Accounting from TheCycles.com --- http://www.thecycles.com/business/accounting 
An unbelievable number of other news headlines categories in TheCycles.com are at http://www.thecycles.com/ 

 

Jack Anderson's Accounting Information Finder --- http://www.umsl.edu/~anderson/accsites.htm

 

Gerald Trite's great set of links --- http://www.zorba.ca/bookmark.htm 

 

Paul Pacter maintains the best international accounting standards and news Website at http://www.iasplus.com/

The Finance Professor --- http://www.financeprofessor.com/about/aboutFP.html 

 

Walt Mossberg's many answers to questions in technology --- http://ptech.wsj.com/

 

How stuff works --- http://www.howstuffworks.com/ 

 

Household and Other Heloise-Style Hints --- http://www.trinity.edu/rjensen/bookbob3.htm#Hints 

 

Bob Jensen's video helpers for MS Excel, MS Access, and other helper videos are at http://www.cs.trinity.edu/~rjensen/video/ 
Accompanying documentation can be found at http://www.trinity.edu/rjensen/default1.htm and http://www.trinity.edu/rjensen/HelpersVideos.htm 

 

Click on www.syllabus.com/radio/index.asp for a complete list of interviews with established leaders, creative thinkers and education technology experts in higher education from around the country.

 

Professor Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134  Email:  rjensen@trinity.edu  

 

May 15, 2004

Bob Jensen's New Bookmarks on May 15, 2004
Bob Jensen at Trinity University 

I don't know just when you will next hear from me!
I am transitioning to the mountains of New Hampshire for an eight-month sabbatical leave.  Since this is a research leave, I'm not certain I will find the time to put out future editions of New Bookmarks until I return to teach at Trinity University in January 2005.  I have scheduled getting a cable connection to the Internet on May 17, but who knows how long it will take to get me back online again.  I will be traveling a great deal on my sabbatical research project on macro hedging.  Plus there's a year's backlog of "honey-do's" waiting for me in the White Mountains --- http://www.trinity.edu/rjensen/NHcottage/NHcottage.htm 

My threads on grade inflation and teaching evaluations are at http://www.trinity.edu/rjensen/book04q2.htm#GradeInflation
I have a recommendation for Trinity University that I placed in two new paragraphs added to my previous conclusions.

For earlier editions of New Bookmarks, go to http://www.trinity.edu/rjensen/bookurl.htm 

Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
This search engine may get you some hits from other professors at Trinity University included with Bob Jensen's documents, but this may be to your benefit.

For my generation:  I especially remember "those?"  (Turn up your speakers full blast) --- http://www.singingman.us/DYR.htm 
The home page is at http://www.singingman.us (with more songs)

Frontline: The Invasion of Iraq --- http://www.pbs.org/wgbh/pages/frontline/shows/invasion/

Links to Terrorism:  Build a Web site, go to jail --- http://www.reason.com/sullum/043004.shtml 

NOVA: World in the Balance (Population Time Bomb) --- http://www.pbs.org/wgbh/nova/worldbalance/

Quotes of the Week

Faster horses, younger women, older whiskey, and more money --- I have a lot of happiness!
To be without some of the things you want is an indispensable part of happiness.
Bertrand Russell

Marketers held a conference to find out what women do online. The answer: everything except the one crucial thing -- look for cleaning products.
Katharine Mieszkowski, "You surf just like a woman" Salon, May 5, 2004 --- http://www.salon.com/tech/feature/2004/05/05/just_ask_a_woman/index_np.html 

Even Porn Addicts Are Suddenly Afraid To Go To Porn Sites (although you can get hit from elsewhere)!
Known as bot software, the remote attack tools can seek out and place themselves on vulnerable computers, then run silently in the background, letting an attacker send commands to the system while its owner works away, oblivious. The latest versions of the software created by the security underground let attackers control compromised computers through chat servers and peer-to-peer networks, command the software to attack other computers and steal information from infected systems.
Robert Lemos , CNET News.com, April 30, 2004 --- http://news.com.com/2100-7349_3-5202236.html?tag=nefd.lede 
How can you protect against  bot software and spyware?  Go to  
http://www.trinity.edu/rjensen/ecommerce/000start.htm#SpecialSection 

Finally, thanks to Alan Greenspan for coining the phrase "infectious greed" in July 2002, just as I was abandoning hope of finding a pithy title that captured both the financial theme and the viral metaphor of this book.  
Frank Partnoy in Infectious Greed:  How Deceit and Risk Corrupted the Financial Markets (Henry Holt Company, 2004, Page 460)
Note:  The above book by Partnoy is a great place to learn more about modern corporate fraud, including Enron.  I suggest that you first read his U.S. Senate testimony at http://www.senate.gov/~gov_affairs/012402partnoy.htm 

An infectious greed seemed to grip much of our business community. ... It is not that humans have become any more greedy than in generations past.  It is that the avenues to express greed have grown so enormously.
Alan Greenspan, testimony before the Senate Banking Committee, July 16, 2002 

Behind every fortune there lies a great crime.
Honore de Balzac  (as quoted by Frank Partnoy in Infectious Greed:  How Deceit and Risk Corrupted the Financial Markets (Henry Holt Company, 2004))  
More quotations Honore de Balzac (1799 - 1850) from are at http://www.quotationspage.com/quotes/Honore_de_Balzac

In all, four months in a minimum-security prison seemed like a small price to pay for the millions of dollars Mozer made. In 2001, Mozer was enjoying his wealth--relaxing, and raising his eight-year-old daughter. He spent much of his time managing his own money and playing golf. Mozer's treatment raised an interesting question: what would most people have done in his situation--assuming they knew in advance they would be caught and spend four months in a low-security prison--if they also knew that, afterward, they would retire as a multimillionaire, all before their fortieth birthday?   Compared to Mozer, his supervisors received mere slaps on the wrist. Gutfreund, Strauss, and Meriweather paid fines of $100,000, $75,000, and $50,000, respectively--just a few days' pay, at their salaries.
Frank Partnoy, Infectious Greed (Henry Holt and Company, 2004, Page 109) with respect to derivatives fraud at Salomon.
Bob Jensen's threads on slaps on the wrist for white collar crime are at "White Collar Crime Pays Big Even If You Get Caught" at http://www.trinity.edu/rjensen/fraudconclusion.htm#CrimePays

Most of us enter the investment business for the same sanity-destroying reasons a woman becomes a prostitute:  It avoids the menace of hard work, is a group activity that requires little in the way of intellect, and is a practical means of making money for those with no special talent for anything else.
Richard New, The Wall Street Jungle (as quoted by Frank Partnoy in FIASCO:  The Inside Story of a Wall Street Trader (Penquin Books, 1997))

Viagra is Not Holding Up as Well as Expected
Pfizer's net income fell 50% from the year-earlier quarter, when the No. 1 global drug maker benefited from a big one-time gain. Revenue rose 47%, although sales of Viagra fell 12%.
The Wall Street Journal, Page A1, April 20, 2004 --- http://online.wsj.com/article/0,,SB108238804574686629,00.html?mod=home_whats_news_us 

The most solid pleasure in this life is the empty pleasure of illusion.
Giacomo Leopardi

Begin somewhere;  you cannot build a reputation on what you intend to do.
Liz Smith

Hey, I'm King Bob When I Do the Hula
Claiming to be Hawaiian royalty, a Pennsylvania woman has become a thorn in the side of the IRS, which has repeatedly sent her refunds and personal information belonging to the rightful heir. In the latest blunder, the IRS sent the Pennsylvania woman a $2.1 million tax refund that should have gone to the rightful heir. 
http://www.accountingweb.com/item/99095 

Nearly half of all privately held firms in the U.S. (10.6 million) are owned 50 percent or more by women, says a new Center for Women's Business Research study sponsored by Wells Fargo & Company. 
AccountingWEB, "Women-Owned Businesses Growing Twice National Average," May 4, 2004 ---  http://www.accountingweb.com/item/99089 

Pays to go bankrupt!
MCI predicted a net loss for this year and reported a massive $22.2 billion profit for 2003 as a result of accounting adjustments related to the bankruptcy.
Shawn Young, The Wall Street Journal, April 30, 2004, Page B3 --- http://online.wsj.com/article/0,,SB108327600038897861,00.html?mod=technology_main_whats_news 

Become the change you want to see in the world.
Mahatma Gandhi

Employers Expect to Increase College Hires by 11.2 Percent
AccountingWEB, April 27, 2004 --- http://www.accountingweb.com/cgi-bin/item.cgi?id=99045 

Freedom is hammered out on the anvil of discussion, dissent and debate.
Hubert H. Humphrey as quoted by Mark Shapiro at http://irascibleprofessor.com/comments-04-26-04.htm 

The wealth of the poor is represented by their children, that of the rich by their parents.
Massimo Troisi

A mathematician, a physicist, and an engineer were traveling through Scotland when they saw a black sheep through the window of the train. "Aha," says the engineer, "I see that Scottish sheep are black." "Hmm," says the physicist, "You mean that some Scottish sheep are black." "No," says the mathematician, "All we know is that there is at least one sheep in Scotland, and that at least one side of that one sheep is black!"
Courtesy of http://www.math.utah.edu/~cherk/mathjokes.html and forwarded by Malcolm McLelland 

The Museum of Bad Art --- http://www.museumofbadart.org/ 

Their new 'infrasized meals,' where you can get one-third the food for an extra 99 cents, are definitely a step in the right direction.
Donna Alexander, Lab Assistant on Food Testing at McDonald's, The Onion

The March for Women's Lives this past Sunday was the largest in American history. The power of the pro-choice movement, our strength in numbers and our energy and commitment can not be ignored! A million women and men, a third of who were under the age of 35, said no more!!! During the March, we pledged ourselves to creating a world where no one can question our freedom to choose, our access to abortion and birth control, our right to benefit from lifesaving research, or our medical privacy.
Jennifer Bilbrey in an email message on April 27, 200f from Nancy.Mifflin@ppfa.org 

AACSB sent out an e-mail yesterday announcing that it is moving its headquarters from St. Louis to Tampa after a recommendation from a consulting firm. It cites a board member saying, "St. Louis has served us well for a long time, but the location is no longer the right image and fit for the organization moving forward." Imagine the money that has, and will be spent, on that. And, the money comes from our dues.
Dick Burr, Trinity University

A Chinese man has paid the equivalent of $1.1m for a mobile phone number.  The unnamed buyer shelled out a whopping nine million yuan for 135 8585 8585, which is apparently pronounced as "let me be rich, be rich, be rich, be rich" in Chinese.
Lester Haines, The Register, April 13, 2004 --- http://www.theregister.co.uk/2004/04/13/mobile_phone_number/ 
Reply from Stephen Field at Trinity University

Hi Bob. In Mandarin, that list of numbers might be understood homophonically to mean: “Let me out, catch me, catch me, catch me, catch me.”

On the other hand, in the Wu dialect of Chinese (north of Shanghai) it means, literally: “Let me get (rich), me get, me get, me get, me.” The word for “rich” is not even there, but there is a common phrase fa-cai (fa-choi in Cantonese), that means “Get rich.”

As for your office number, only the 4 is unlucky. Chinese avoid it like the plague! My extension 7615 sounds like: “Chi remains and comes to me.” Chi (or qi), as you know, is the Chinese metaphysical concept of life energy.

Technology Tea Time
The same tannins in green tea that cause stains to form on your mugs and teapots could save the hard-drive manufacturing industry some serious dough, says a team of researchers.
Amit Asaravala, Wired News, April 29, 2004 --- http://www.wired.com/news/technology/0,1282,63268,00.html?tw=newsletter_topstories_html 

Chinese embrace on-line shopping.
The Globe and Mail, April 15, 2004 --- http://www.globetechnology.com/servlet/story/RTGAM.20040414.gtchina0414/BNStory/Technology/ 

Wealthy investors who bought questionable tax shelters to lower their tax bills are finding that they can't hide from state and federal regulators. The IRS and California tax regulators are going to court to obtain client lists from accounting firms or insurers to identify investors who bought the shelters. The strategy appears to be working. http://www.accountingweb.com/item/99022 

Is U.S. Losing the Innovation Race?
A report that Europe and Asia are forging ahead of the U.S. in scientific publications, and in the granting of science and engineering PhDs, raises troubling questions.
http://www.technologyreview.com/blog/blog.asp?blogID=1387&trk=nl

Bob Jensen's April-June 2004 Updates on Frauds and the Accounting Scandals --- http://www.trinity.edu/rjensen/fraud063004.htm 

Updates on the leading books on the business and accounting scandals --- http://www.trinity.edu/rjensen/Fraud.htm#Quotations 

I love Infectious Greed by Frank Partnoy ---  http://www.trinity.edu/rjensen/Fraud.htm#Quotations 

Fraud Detection and Reporting --- http://www.trinity.edu/rjensen/FraudReporting.htm

Charity Frauds --- Fraud Detection and Reporting --- http://www.trinity.edu/rjensen/FraudReporting.htm 

This one is vicious!
"IRS Warns Taxpayers of Fradulent Email," SmartPros, May 3, 2004 --- http://www.smartpros.com/x43425.xml 

The Internal Revenue Service on Friday warned consumers about an identity theft operation that tries to elicit personal information from taxpayers by sending emails alleging they're the subject of a tax investigation.

Neither the Treasury Department nor the Internal Revenue Service send emails to taxpayers about issues related to their accounts.

The official-looking email tells recipients they can dispute the tax fraud charge by logging onto a web site and providing detailed personal information like Social Security numbers, credit card numbers and driver's license numbers.

Identity thieves use individuals' personal data to create false identification documents, to purchase goods and to apply for loans, credit cards or other services in the victim's name.

The Internet service provider that hosted the fraudulent web site shut it down at the request of the Treasury Department's inspector general for taxes. The IRS warns that new versions could surface.

Taxpayers who receive suspect emails should call the Treasury Department toll-free fraud hot line at 1-800-366-4484, or the IRS at 1-800-829-1040.

Updated Warnings on Identity Theft --- http://www.trinity.edu/rjensen/FraudReporting.htm#IdentityTheft 

ACCPAC Accounting Software Free for Public Schools --- http://www.smartpros.com/x43386.xml 

"What's That Sneaking Into Your Computer?" by David Bank, The Wall Street Journal, April 26, 2004

New types of insidious programs called "spyware" are burrowing into PCs, wreaking all sorts of problems. These small programs that install themselves on computers to serve up advertising, monitor Web surfing and other computer activities, and carry out other orders are quickly replacing spam as the online annoyance computer users most complain about. Here's what's being done to combat them.

John Gosbee was sitting up in bed on a cold night, surfing the Internet with his laptop on his knees. Suddenly, the computer's CD-ROM tray popped open, seemingly on its own.

"What on earth is going on?" Mr. Gosbee, of Mandan, N.D., said to himself. "It was like it was possessed," he recalls.

His laptop emitted a high-pitched "Uh-oh."

Uh-oh is right. The pranks were a setup for the message that appeared on his screen: "Dangerous computer programs can control your computer hardware if you fail to protect your computer right at this moment!" That was followed by a plug for a program called Spy-Wiper that promised to clean out any rogue software.

As if that wasn't alarming and annoying enough, the very next day the computer at Mr. Gosbee's one-man law office was similarly hijacked. The CD and DVD trays both opened; only one closed. Then came the same ad for Spy-Wiper, which kept popping up on both machines.

"I was getting ticked," Mr. Gosbee says.

As Mr. Gosbee and countless other computer users have discovered: It's a war out there. While malicious hackers are spreading viruses all over the global computer network, advertisers and scam artists are propagating other pests that are arguably even more annoying. They're called spyware -- and the implications for consumers are only beginning to be felt.

Indeed, spyware -- small programs that install themselves on computers to serve up advertising, monitor Web surfing and other computer activities, and carry out other orders -- is quickly replacing spam as the online annoyance computer users most com- plain about. The outrage has grown to the point that politicians are threatening legislative controls on the tactic. But in their most benign form these programs have a powerful appeal to advertisers, and some marketers are banking on the idea that people eventually will grow accustomed to some use of such invasive software.

"Snoops and spies are really trying to set up base camp in millions of computers across the country," said Sen. Ron Wyden, an Oregon Democrat, at a March hearing on proposed legislation he is co-sponsoring to tackle the problem. A Republican co-sponsor, Sen. Conrad Burns of Montana, said at the hearing: "I'm convinced that spyware is potentially an even greater concern than junk e-mail, given its invasive nature."

Continued in the article

May 3, 2004 reply from Andrew Priest [a.priest@ECU.EDU.AU] 

There are numerous software tools around to combat this sort problem. Personally I use Ad-aware but there are others. For example you will find a range at http://www.tucows.com/webbrowser_adwarecleaner_default.html .

Cheers Andrew

Bob Jensen's threads on security are at http://www.trinity.edu/rjensen/ecommerce/000start.htm#SpecialSection

May 7, 2004 message from Todd Boyle

"The relationship stockholders have to the modern corporation looks very little like ownership. Stockholders have no tangible relationship to the thing owned, take no responsibility for its misuse, and play no part in its upkeep. As CFO magazine notes, only a quarter of market value for S&P 500 companies comes from tangible assets. So talk about "ownership" is more and more nonsensical, as our legal system has recognized. "Sophisticated lawyers these days don't use the "ownership" term," Margaret Blair of the Brookings Institution in Washington told me several years ago. "The corporation is a nexus of contracts. It's not a thing that can be owned."

What helped knock the ownership idea out of currency was the 1932 book by Adolf Berle and Gardiner Means, The Modern Corporation and Private Property, which first noted the separation of ownership and control in corporations. This separation dissolved the unity of private property, so no one "owned" the corporation any more, Berle and Means wrote. This "released management from the overriding requirement that it serve stockholders."

(quoted from Marjorie Kelly on http://www.teamproduction.us/Kelly.htm  ) see also http://www.divinerightofcapital.com/more.htm )

Now my 2 cents: until the externalities are booked in the ledger, the ledger is wrong,

Todd Boyle xcpa stuff that counts www.ledgerism.net 

Bob Jensen's threads on corporate governance are at http://www.trinity.edu/rjensen/Fraud.htm#Governance 

Part of a May 6, 2004 message from Roberta Lipsig, SUNY Oswego [rlipsig@OSWEGO.EDU] 

By the way, if anybody is interested, besides being an editor of Poetry Revival - and working (his family needs some income) my son published a poetry collection, Shake Hands With the Serpent. It's available at  http://books.lulu.com/lipsig /, as well as amazon.com, bn.com. 

Martha goes to jail for what amounts to shoplifting a bag of peanuts while the bank robbers make clean get away!

Rebecca Mark's Secret Recipes for Looting $100 million From Corporations You Manage --- http://www.trinity.edu/rjensen/fraudenron.htm#RebeccaMark 
Her Secret:  Have Very, Very Expensive Style in Private Jets and Offices Fit for a King (Queen?)

I accidentally stumbled on Julian Pye's Photo Diary --- http://www.photodiary.org/index.html 

At this point the diary contains 1741 entries, most of the earlier are done with Nikon Coolpixes (N950, N995, N4500), a Canon S110, and most of the later ones with a Canon D30 and a Canon 10D. The really old ones have been scanned in from older photos, mostly taken with my Nikon 801 SLR, even earlier ones with my dad's Canon F1 and my first own camera, a Minolta AF-1.... And I'll just add more and more as time goes along..... Please check back from time to time and also leave lots of comments if you want ;-)

Note the keywords at http://www.photodiary.org/keywords.html 

Actually I was looking for Websites on Enron's scandalous Rebecca Mark --- http://www.photodiary.org/ph_c_4837.shtml 

What eventually happened to Rhyolite and its past glory is similar to what happened to ENRON in 2001. Peter Cooper is now the administrator of the Houston based company which was headed by former Navy veteran Ken Lay, a swindler. Skilling made a killing. Remember Rebecca Mack.

Rebecca Mark's timely selling of her Enron shares yielded $82,536,737.  You can read 1997 good stuff about her in http://www.businessweek.com/1997/08/b351586.htm and 2002 bad stuff about her (with pictures) at http://www.apfn.org/enron/mark.htm 

Rebecca Mark-Jusbasche has held major leadership positions with one of the world's largest corporations.  She was chairman and CEO of Azurix from 1998 to 2000.  Prior to that time, she joined Enron Corp. in 1982, became executive vice president of Enron Power Corp. in 1986, chairman and CEO of Enron Development Corp. in 1991, chairman and CEO of Enron International in 1996 and vice chairman of Enron Corp. in 1998.  She was named to Fortune's "50 Most Powerful Women in American Business" in 1998 and 1999 and Independent Energy Executive of the Year in 1994.  She serves on a number of boards and is a member of the Young President's Organization.

She is a graduate of Baylor University and Harvard University.  She is married and has two children.
http://superwomancentral.com/panelists.htm

If Mark had taken a bitter pleasure in Skilling’s current woes—the congressional grilling, the mounting lawsuits, the inevitable criminal investigation—no one would have blamed her. And yet she was not altogether happy to be out of the game. Sure, she had sold her stock when it was still worth $56 million, and she still owns her ski house in Taos. Her battle with Skilling, however, had been a wild, exhilarating ride.
TIME TABLE AND THE REST OF THE STORY:
http://www.msnbc.com/news/718437.asp

Rebecca P. Mark-Jusbasche, now listed as a director, bagged nearly $80 million for her 1.4 million shares. Rebecca was just Rebecca P. Mark without the hyphenated flourish in 1995, though I shouldn't say "just" because she was also Enron's CEO at the time, busily trying to smooth huge wrinkles in the unraveling Dabhol power project outside Bombay. That deal, projected to run to $40 billion and said to be the biggest civilian deal ever written in India, hinged on a power purchase agreement between the Maharashtra State Electricity Board (MSEB) and Enron's Dabhol Power Corp. (a JV led with project manager Bechtel and generator supplier GE).

There had been a lot of foot-dragging on the Indian side and Becky was there to light a fire. A memorandum of understanding between Enron and the MSEB had been signed in June '92 – only two weeks, as it happened, before the World Bank said it couldn't back the project because it would make for hugely expensive electricity and didn't make sense.

According to the state chief minister's account given two years later, the phase-one $910 million 695 MW plant was to run on imported distillate oil till liquefied natural gas became available. By the time the phase-two $1.9 billion 1320 MW plant was to be commissioned, all electricity would be generated by burning LNG – a very sore point with World Bank and other critics, given the availability of much cheaper coal.

In the event, by December '93, the power purchase agreement was signed, but with an escape clause for MSEB to jump clear of the second, much bigger plant.

State and union governments in India came and went, and for every doubt that surfaced, two were assuaged long enough for Indian taxpayers to sink deeper into Enron's grip.

Soon they were bound up in agreements to go ahead with the second phase of the project -- which now promised electricity rates that would be twice those levied by Tata Power and other suppliers. Unusually for this kind of project, the state government, with Delhi acting as a back-up guarantor, backed not just project loans but actually guaranteed paying the monthly power bill forever -- all in U.S. dollars – in the event the electricity board, DPC's sole customer, defaulted.

"The deal with Enron involves payments guaranteed by MSEB, Govt. of Maharashtra and Govt. of India, which border on the ridiculous," noted altindia.net on its Enron Saga pages. "The Republic of India has staked all its assets (including those abroad, save diplomatic and military) as surety for the payments due to Enron."
http://www.asiawise.com/mainpage.asp?mainaction=50&articleid=2389 

From Pipe Dreams by Robert Bryce (NY:  Public Affairs, 2002, pp. 199-189)

It didn't work.  By the summer of 2000, Azurix's losses, once a torrent, were a geyser.  A few months earlier, an algae bloom in an AGOSBA water treatment plant had fouled the city of Buenos Aires's drinking water.  The entire city was in an uproar over the taste and smell of the tap water.  Revenues from Argentina, once a sporadic stream, were now a bare trickle.

The handwriting was on the wall.  And on August 25, 2000, Mark resigned as chairman and CEO of Azurix and gave up her seat on Enron's Board of Directors.  Her string of business failures has likely assured that she will never get another job in corporate America.  The woman who prefers clothes from Armani and Escada is all dressed up with nowhere to go.  Not that she needs to go anywhere, mind you.

Three months before she quit Azurix, she sold 104,240 Enron shares, a move that brought her total stock-sale proceeds to $82.5 million.  Counting all the salary, stock options, and no-payback loans that she got from Enron, Mark probably banked somewhere in the neighborhood of $100 million.  That's a truly staggering sum when you consider that her misguided deals in India, Argentina, and elsewhere cost investors at least $2 billion.

But those failures were in the past.  None of them mattered.  She was rich, gorgeous, and married again.  Her new husband was Michael Jusbasche, a rich Bolivian-born businessman.  The two were moving into her house in River Oaks and would continue supporting a few local causes.  The failure of Azurix was no longer a concern.  In early 2002, Mark told Vanity Fair that the company "wasn't a disaster.  We couldn't survive as a public company because we didn't have earnings sufficient to support the growth of the stock."

Oh.

So Azurix wasn't a disaster.  It just didn't have "earnings sufficient to support the growth of the stock."  That's a beautifully crafted phrase to describe a dog of a company that should never have gone public in the first place.  In the end, Mark's vision--the commoditization of water, water trading, yet more fawning profiles of her in the business press--landed with a stinging belly flop.  And Azurix, the company that was to "become a major global water company" lasted as a publicly traded entity for just twenty-one months.

The bath Enron took on Azurix would prove very costly.  Mark's debacle had been financed with--what else?--off-the-balance-sheet entities, so that Enron didn't have to reflect Azurix's debts on its balance sheet.  And those interlinked entities, called Marlin and Osprey, would play a pivotal role in drowning Enron.  There's no doubt the Azurix mess was poorly thought out, but Rebecca Mark and her team weren't really corrupt.  Misguided maybe.  They made some bad judgments and didn't pay attention to expenses.  Perhaps their idea was just ahead of its time.  But they never purposely misled investors or committed fraud.  That would not be the case at another overhyped Enron venture, Enron Broadband Services.

Bob Jensen's threads on Enron are now at http://www.trinity.edu/rjensen/FraudEnron.htm 

Also see Ken Lay's secret recipes for legally looting $184,494.426 from corporations you manage --- http://www.trinity.edu/rjensen/fraudenron.htm#SecretRecipes 

The Original Tipping Page --- http://www.tipping.org/TopPage.shtml 

This page is the first of its kind, and probably still the only one and the most complete. There is no right or wrong when it comes to tipping, just common sense. Also note that tipping is an option, not a must. There are circumstances that are obviously not as simple as black and white. Use your judgement when deciding to tip or not to tip.

Also check out How travel stuff works --- http://travel.howstuffworks.com/  

Bob Jensen's helpers for travel are at http://www.trinity.edu/rjensen/bookbob3.htm#Travel 

Is grade deflation hitting the Ivy League?  Not yet in most Ivy's, but yes at Princeton.

"Deflating the easy 'A'," by Teresa Méndez, Christian Science Monitor, May 4, 2004 --- http://www.csmonitor.com/2004/0504/p12s02-legn.html 

Princeton students fear that a tough stance on grades may harm campus culture - and limit their appeal to graduate schools.

When Adam Kopald exits Princeton University's gothic gates as a graduate in June 2005, he will not have a GPA. Nor will he be assigned a class rank. He may not even know the grades of his closest friends. 

It's this lack of competition, say Princeton students, that has made for a much less cutthroat environment than one might expect from one of the country's most academically elite universities.

Some students argue that that's been a good thing for their school, where they say they strive to do their own best work rather than to outdo one another - but it's a luxury they now fear losing.

A new grading policy, to go into effect next year, will reduce the number of A-pluses, A's, and A-minuses for all courses to 35 percent, down from the current 46 percent. A's given for independent work will be capped at 55 percent.

"There's definitely going to be a competition that didn't exist before," says Mr. Kopald, a history major. "Because any way you cut it, there are only 35 percent of people who are going to get A's."

At a time when campuses are clamoring to appear more interested in the whole person, students' mental health, and well-rounded development, some wonder if the message being sent by instituting quotas isn't contradictory.

School administrators, however, argue that grade inflation cannot be ignored. Princeton first examined the problem six years ago.

"Our feeling then was that we could just let it go, and over the next 25 years everyone would be getting all A's," says Nancy Weiss Malkiel, dean of the college. "But would that really be responsible in terms of the way we educated our students?"

According to Dean Malkiel, the goals of 35 percent and 55 percent will align the number of A's granted with figures from the late 1980s and early '90s.

Other schools have tried to address grade inflation, using measures like including contextual information on transcripts, says Malkiel. And in 2002, Harvard limited students graduating with honors to 60 percent. But as far as Malkiel knows, this is the first widespread move to stem the trend of upward spiraling grades that dates back to the 1970s.

What caused grades to inflate

Experts blame grade inflation on everything from fears of the draft during the Vietnam War to a consumer mentality that expects higher marks in exchange for steeper tuition.

But some professors say students today are increasingly bold about haggling for higher marks. Often it's easier to give an A-minus instead of a B-plus than to argue.

Malkiel also says a broader culture of inflation may be a factor. Everything from high school GPAs to SAT scores have been on the rise.

But not all see the phenomenon of rising grades as a bad thing. William Coplin, a professor at the Maxwell School at Syracuse University, feels strongly there are a number of reasons why grade inflation is not just acceptable - but good.

He says that students learn in the classroom less than half of what they need to know for real life. Distributing higher grades gives them room to explore other areas of interest and to develop as people.

"Most students do not see college as a place to develop skills. They see it as a place to get a degree and have a high GPA," he says. "The truth is, skills are more important than GPA." Professor Coplin worries that attempting to stamp out grade inflation is simply "making the kids even crazier about grades."

Annie Ostrager, a politics major at Princeton, isn't convinced that grade inflation is a problem either.

"I personally have not perceived my grades to be inflated," says the junior. "I work hard and get good grades. But I don't really feel like grades are flying around that people aren't earning."

But most Princeton students acknowledge there is a problem - although many doubt that quotas are the best solution.

Matt Margolin, president of the student government, estimates that 325 of the 350 e-mails he has received from Princeton students express frustration with the new grading policy.

Princeton isn't alone in the battle against inflated grades. A study last year found that A's accounted for 44 to 55 percent of grades in the Ivy League, MIT, Stanford, and the University of Chicago.

Will Princeton stand alone?

Yet by drawing public attention to Princeton in particular, students worry it may come to be seen as the most flagrant example.

"Putting it in the public light like this has really damaged the image of a Princeton transcript," says Robert Wong, a sophomore studying molecular biology.

Malkiel has assured students this isn't true. In conversations with admissions officers at graduate schools, employers, and fellowship coordinators across the country, she says she has been told "that they would know going forward that a Princeton A was a real A." They even suggested that tougher grading will ultimately benefit Princeton students.

But not everyone is convinced.

"I would like to go to law school, so my eye has been on this proposal very carefully," says Mr. Margolin, a junior and a politics major. "My understanding is that law school decides your fate based mostly on GPA and LSAT scores."

"A call for an end to grade inflation," by Mary Beth Marklein, USA Today, May 2, 2002 --- http://www.usatoday.com/news/health/2002-02-05-grade-inflation.htm 

At Harvard University, a recent study found that nearly half of all grades awarded were A or A-minus.

A tenured professor is suing Temple University, saying he was fired because he wouldn't make his courses easier or give students higher grades.

And now, a new report prepared by the American Academy of Arts & Sciences says it's time to put an end to grade inflation.

Concerns about grade inflation, defined as an upward shift in the grade-point average without a corresponding increase in student achievement, are not new. The report cites evidence from national studies beginning as early as 1960. And while it is a national phenomenon, authors Henry Rosovsky, a former Harvard dean, and Matthew Hartley, a lecturer at the University of Pennsylvania, say the phenomenon is "especially noticeable" in the Ivy League.

They blame the rise of grade inflation in higher education on a complex web of factors, including:

An administrative response to campus turmoil in the 1960s, and a trend, begun in the 1980s, in which universities operate like businesses for student clients.

The advent of student evaluations of professors and the increasing role of part-time instructors.

Watered-down course content, along with changes in curricular and grading policies.

"At first glance (grade inflation) may appear to be of little consequence," the authors write. But it "creates internal confusion giving students and colleagues less accurate information; it leads to individual injustices (and) it may also engender confusion for graduate schools and employers." They say schools should establish tangible and consistent standards, formulate alternative grading systems and create a standard distribution curve in each class to act as a yardstick.

Rosovsky and Hartley's report is available at www.amacad.org/publications/occasional.htm. 

May 4, 2004 reply from Hertel, Paula [phertel@trinity.edu] 

I just now heard on NPR an interview with one of the Princeton faculty who voted for the new policy to limit A’s to 35%. She (a professor of economics) pointed out that one of the biggest factors in establishing grade inflation is the perception of faculty that course evaluations will be lower if grades are lower. We should add that, even if the perception is wrong, it’s existence and influence does our students no favor in the long run.

It’s the nature of the course evaluations that must change!

Paula

May 4, 2004 reply from Bob Jensen

Trinity University professors may have too much integrity to allow student evaluations to inflate grades. However, we do have marked grade inflation caused by something. Research studies at other universities found that tough graders take a beating on course evaluations:

Duke University Study --- http://www.aas.duke.edu/development/Miscellaneous/grades.html 

Lenient graders tend to support one theory for these findings: students with good teachers learn more, earn higher grades and, appreciating a job well done, rate the course more highly. This is good news for pedagogy, if true. But tough graders tend to side with two other interpretations: in what has become known as the grade attribution theory, students attribute success to themselves and failure to others, blaming the instructor for low marks. In the so-called leniency theory, students simply reward teachers who reward them (not because they're good teachers). In both cases, students deliver less favorable evaluations to hard graders.

University of Washington Study --- http://www.washington.edu/newsroom/news/k120497.html

"Our research has confirmed what critics of student ratings have long suspected, that grading leniency affects ratings. All other things being equal, a professor can get higher ratings by giving higher grades," adds Gillmore, director of the UW's office of educational assessment.

The two researchers' criticisms, which are counter to much prevailing opinion in the educational community, stem from a new study of evaluations from 600 classes representing the full spectrum of undergraduate courses offered at the UW. Their study is described in a paper being published in the December issue of the Journal of Educational Psychology and in two papers published in a special section edited by Greenwald in the November issue of the American Psychologist.

Rutgers University --- http://complit.rutgers.edu/palinurus/ 

An article that drew a lot of responses in the media. Among other things, the author claims that "Some departments shower students with A's to fill poorly attended courses that might otherwise be canceled. Individual professors inflate grades after consumer-conscious administrators hound them into it. Professors at every level inflate to escape negative evaluations by students, whose opinions now figure in tenure and promotion decisions."

Archibold, Randal C. "Just Because the Grades Are Up, Are Princeton Students Smarter?" The New York Times (Feb 18, 1998), Sec: A P. 1.

A long article following a report on Princeton’s grade inflation. Includes a presentation of possible reasons for the phenomenon.

Goldin, Davidson. "In A Change of Policy, and Heart, Colleges Join Fight Against Inflated Grades." The New York Times (Jul 4, 1995), Sec: 1 P. 8. 

The article presents the tendency of elite institutions to follow Stanford and Dartmouth’s lead in fighting Grade Inflation. Brown stands out in refusing the trend by making the transcripts reflect achievements only. The rational: "'When you send in your resume, do you put down all the jobs you applied for that you didn't get?' said Sheila Blumstein, Brown's dean. 'A Brown transcript is a record of a student's academic accomplishments.'"

University of Montana --- http://www.rtis.com/reg/bcs/pol/touchstone/november97/crumbley.htm 

The mid-term removal of a chemistry instructor at the University of Montana in 1995 because he was "too tough" illustrates the widespread grade inflation in the United States. Grade inflation will not diminish until the root cause of grade inflation and course work deflation is eliminated: widespread use of anonymous student evaluations of teaching (SET). If an instructor calls a student stupid by giving low marks, it is unlikely the student will evaluate the instructor highly on an anonymous questionnaire.

 As more and more research questions the validity of summative SET as an indicator of instructor effectively, ironically there has been a greater use of summative SET. A summative SET has at least one question which acts as a surrogate for teaching effectiveness. In 1984, two-thirds of liberal arts colleges were using SET for personnel decisions, and 86% in 1993. Most business schools now use SET for decision making, and 95% of the deans at 220 accredited undergraduate schools "always use them as a source of information," but only 67% of the department heads relied upon them. Use of SET in higher education appears frozen in time. Even though they measured the wrong thing, they linger like snow in a shaded corner of the back yard, refusing to thaw.

 

Mixed opinions voiced in The Chronicle of Higher Education (not usually backed by a formal study) --- http://chronicle.com/colloquy/98/evaluation/re.htm 

CONCLUSIONS

Causes of grade inflation are complex and very situational in terms of discipline, instructor integrity, pedagogy, promotion and tenure decision processes, course demand by students, pressures to retain tuition-paying students, etc.  I suspect that if I dig harder, there will be a few studies attempting to contradict the findings above.  

One type of contradictory study does not impress me on this issue of grade inflation.  That is a study of the instructors rated highest by students, say the top ten percent of the instructors in the college.  Just because some, or even most, of those highly-rated instructs are also hard graders does not get at the root of the problem.  The problem lies with those instructors getting average or below evaluations that see more lenient grading as a way to raise student evaluations.

One thing is absolutely clear in my mind is that teaching evaluations are the major cause of system-wide grade inflation.  My opinion is in part due to the explosion in grade inflation that accompanied the start of anonymous course evaluations being reported to administrators and P&T committees.  In the 1960s and 1970s we had course evaluations in most instances, but these were always considered to be private information owned only by the course instructors who were generally assumed to be professionally responsible enough to seriously consider the evaluation outcomes in private.  

There are no simple solutions to grade inflation.  The Princeton 35% cap on A grades is not a solution if some members of the faculty just refuse to abide by the cap (and faculty are a know to be proudly independent).  Grades are highly motivational and, as such, motivate for different purposes in different situations.  Student evaluations of faculty serve different purposes and, as such, motivate faculty for different purposes in different situations.

I have no solution to recommend at the moment for grade inflation.  But I would like to recommend that my own university, Trinity University, consider adopting an A+ grade with a cap of 10% (not rounded) in each class.  For example, a class with 19 students would be allowed to have one A+ student;  a class with 20 students could have two A+ students.  The A+ would not be factored into the overall gpa, but it would be recorded on a student's transcript.  This would do absolutely nothing to relieve grade inflation.  But it would help to alleviate the problem of having exceptional students in a class lose motivation to strive harder for the top grade.  One of the problems noted in the Duke, Washington, and Rutgers studies is that exceptional students don't strive as hard after they are assured of getting the highest grade possible in the class.  Why not make them strive a little bit harder?

It was just plain tougher in the good old days.  Some sobering percentages about grade inflation --- http://www.cybercollege.com/plume3.htm 

In 1966 at Harvard, 22% of all grades were A's. In 2003, that figure had grown to 46%. In 1968 at UCLA, 22% of all grades were A's. By 2002, that figure was 47%.

The so-called Ivy League schools, MIT, Stanford, and the University of Chicago, averaged 50% A's (in recent years).

The most immediate effect of giving almost 50% A's is that exceptional students see little reason to try to excel. They know they can "coast their way" to an A without really being challenged.

Awarding students A's for C+ work robs the best and the brightest.
Prof. Roger Arnold --- http://www.cybercollege.com/plume3.htm  

May 4, 2004 reply from David R. Fordham [fordhadr@JMU.EDU] 

RIGHT on!

Back when I was program director, it was empirically demonstrable that grade distribution, (as well as time of day, number of empty seats in the classroom, and male-vs. female professor-vs. student, -- all individually, let alone collectively), were able to overpower individual identity when it came to student evaluations of faculty.

I never, ever, referred to them as Student Evaluations of Faculty. I always referred to them as “Student Perceptions”. I used them as ONE (and a minor one at that) of many factors in evaluating faculty. One of the more valid, in my mind, measures of faculty performance is feedback from 5-year+ alums. Although delayed, such feedback says much more about the quality of “education” than anything which could be generated contemporaneously. This is the major reason for my contempt for “assessment programs” of the form in which they are currently being promoted by the Asinine Administrators Compelling Sales of Bullexcrement… (I may not have the full name of the organization completely correct, since they recently changed their official moniker, but I’m hoping everyone will forgive my mistake and go with the acronym.)

As always,

Argumentative, Assertive, Contrary, Scathing, and Bullheaded,

David R. Fordham
PBGH Faculty Fellow
James Madison University

May 4, 2004 reply from Linda Kidwell from the University of Niagara (visiting this year Down Under)

I stumbled into a different approach here in Australia during my visiting year. There are percentage parameters for grade distribution at some universities. For example only a small percentage can be awarded HD (A), and there's a maximum percentage that can receive Fs. There's essentially a bell curve expectation. I had a bit of trouble first term here because my grade distribution was too high for the faculty guidelines.

I have mixed feelings about it. I consider it a violation of academic freedom in part, though perhaps suggested guidelines are good. And if I have a particularly good class, I don't want to artificially lower their grades. On the other hand, it does take some of the grade pressure off -- I never find myself tempted to curve a tough exam, and I don't automatically round upward for those borderline grades. So it's a mixed bag!

What I'd like to see is a bit more concern over the granting of latin honors in the US. When I was a student at Smith, only the top 2 students earned Summa Cum Laude, the next 25 or so got Magna, and next 50 got Cum Laude (I'm guessing at the latter 2, but you get the idea). So you really had to be among the best to earn it. At Niagara, my home institution, it is based on GPA. In business we have tougher grading standards (tougher courses too?) than other areas. As a result, a small percentage of our business students earn latins, but a staggering 70% of the education majors get them. Are all the brilliant students really in the school of education? Every year at commencement the business and arts & science faculty roll their eyes as those honors are announced. I think it cheapens the whole honor, and it is unfair to students in the areas that don't inflate grades. It's also unfair to those education students who really are top-flight.

Linda Kidwell

May 5, 2004 reply from Robert Holmes Glendale College [rcholmes@GLENDALE.CC.CA.US] 

Some time ago I mentioned to the list that I agreed to meet with some of the students in my on-line course for extra instruction. At least one of you said that since not everyone could come to my office, I was being unfair to the class by allowing the students who could come to my office to have added help. I thought at the time how could I be unfair by helping students? My school does not have a maximum or minimum limit on the number of A's or B's we assign to students. We are expected to assign grades based on mastery of the subject, not by rank in the class. When grades are assigned by rank in the class, then giving one student the benefit of my time and denying it to others is unfair. Those who can come to my office are better able to beat the students who can not come. I do not like the idea of the competitive model. I do not want to frustrate students who are eager for learning because it is not fair to the rest of the class. I would much rather see students helping each other to the benefit of both instead of withholding knowledge in order to beat their classmates. It is probably easier to assign grades when you just add up the points and the first X% get A's and so on, but I would hope most of us know what we want the students to get from our classes, and those who get it should be rewarded and those who don't get it should not be rewarded, no matter how many of each are in a particular class. As the college bound population grows, the "top" schools in the country should be having more high quality applicants to choose from, and they should find that more students are mastering the subject matter, and thus receiving higher grades on average.

May 5, 2004 reply from Bob Jensen

Hi Robert,

As usual, you raised an interesting point.  I think most of us are accustomed to motivating our top students to reach for the stars.  We want to graduate students who can get into the top graduate schools, leading CPA firms, top corporations, etc.  We want to bring honors to our university by watching students get outside honors such as Rhodes Scholarships and medals for CPA examination scores.

One of the best ways to motivate top students is grade competition. Top students generally strive for the top grade in a class and the highest gpa in the college. But they may not strive any harder than it takes to get the top grade in a class, at least that's what the studies from Duke, Washington, and Princeton are telling us.

Now the Australian system that Linda Kidwell describes with a bell-curve grade distribution and a limit of say 2% for that Highest Honors designation is aimed at motivating the best students in the class to obtain the highest honor possible on their transcripts.  These top students work night and day to earn their star designations.

Your grading system is not designed to motivate top students to be highest honor students.  There is no grade incentive for an exceptional student in your class work any harder than it takes to earn the same grade with half the effort that it takes an average student to work extra hours with you for the same A grade.  

But your system may have turned some student's life around, a student who never thought it was possible to earn an A grade in an accounting class.  You have thus met what is probably your main goal as an educator.  And you have not achieved grade inflation by simply dumbing down your course.

I guess what we conclude from your system is that there are different grading scales for different purposes.  Perhaps there is more student objection to grade inflation in the Ivy League schools because these students are reaching for the highest stars required to gain entry into elite graduate programs or some other elitist future where only the highest stars have an entry opportunity.

Your A students, on the other hand, may have a longer-run shot at the top because you helped coax them out of the starting gate.  

I guess I can't find fault with this except that I hope you kick ass when you encounter an exceptional student.

May 5, 2004 reply from Chuck Pier [texcap@HOTMAIL.COM] 

As a follow-up to my commentary on the number vs. letter grading system, when I first got to Appalachian State I was thrilled that we used the + & - system because I felt I could provide differentiation for the students and not lump the students with a acore of 80 with the students that scored an 89. However, what I have realized as I approach the end of my second year here is that the more divisions we have in the grading scale, the more boundary lines we create. The more boundary lines we create, the more students are disappointed about missing the next level and the more they will ask or pester you to help them. After all, "we are only talking about a point or two!"

This time of the year is always the most stressful for me. Does it get any better after we've been doing it for a while? (One of David's rhetorical questions.) ;>)

Chuck

Charles A. Pier 
Assistant Professor Department of Accounting 
Walker College of Business Appalachian State University 
Boone, NC 28608 
email: pierca@appstate.edu 

May 7, 2004 reply from Randy Elder [rjelder@SYR.EDU] 

I've followed the thread on grade inflation with much interest. It is a topic that I have great interest in, and here are some observations.

1. Relation between grades and evaluations - I think that the faculty perception that grades influence evaluations is a much greater problem for grade inflation than the actual relation, which I don't believe is that strong. An even greater problem is that bad teachers use grading difficulty as an excuse for their evaluations.

2. Student evaluations - I also believe that we place way too much reliance on student evaluations. Evaluations aren't going away, but there is minimal effort to evaluate the actual effectiveness of teachers.

3. Grading policies - Some of the discussion has focused on grading on the "curve". I find that professors either grade using some sort of curve, or using a fixed evaluation criteria. I much prefer the latter, as it does not place students into competition with each other. More importantly, it allows students to better know where they stand in the course, and attribute their performance to their own effort. My courses always have a fixed number of points, and I inform students of the minimum cutoffs for each grade level.

4. Sample exams - In the Syracuse University Whitman School of Management, it is policy to make some sample exam material available. The reason is to provide equal access, on the assumption that there are old exams floating around in frat houses. The theory is to give students an idea of the types of questions to be asked. I also encourage students to use it as a diagnostic tool. Unfortunately, I believe most students misuse the sample exams and focus on the answers, rather than the knowledge to be tested.

5. Grading information - At SU, we have historically not made much grading information available, unlike my experience at public universities. We are moving toward much greater availability of this information. I hope that this will eliminate some posturing about grades (prof who claims to be tough but isn't; belief that prof X gets good grades only because he grades easy, etc.) We also hope to provide some grading guidelines that will serve to reduce some grade inflation.

Randy Elder
Associate Professor and Director
Joseph I. Lubin School of Accounting
Martin J. Whitman School of Management
Syracuse University
Syracuse, NY 13244-2130
Email: rjelder@som.syr.edu 
Phone: (315) 443-3359
Fax: (315) 443-5457

After I asked Randy to elaborate on his Point 5 above regarding grading information disclosure, he replied as follows on May 10, 2004:

Bob,

Thanks for the compliment. I wasn't sure that my remarks were that thoughtful as I was reading AECM messages on a LIFO basis and discovered lots more good input on the subject after my post.

We do not make grade information available to students. However, I believe it may be helpful to do so as it eliminates misinformation that is passed around informally and on the web (you might want to check out the site www.ratemysuclass.com). This web site is spreading to other universities.

We make summarized grading information available to department chairs to share with faculty. We have tried to focus on courses by omitting faculty names. The accounting department has established grading guidelines by course level, and I expect the School of Management to do the same in the near future. I emphasize that these are guidelines, and faculty can deviate from them.

I have been a strong advocate of having such policies, and was influenced by my time as a doctoral student at Michigan State, and year visit at Indiana. As a doctoral student, I wanted to make sure that my grading conformed to grading by full-time faculty. I was directed to a file that had a complete grading history for every course. At Indiana, the department shared a 10-year grading history for every course. During my visit at Indiana, the AIS department adopted grading guidelines that we modeled ours after.

Randy

May 11, 2004 reply from Bob Jensen

Hi Randy,

I follow rate-my-class ( http://www.ratemysuclass.com/browse2.cfm?id=111  ) only as a curiosity.

It is an illustration of the evils of self-selection and bias. Some professors actually encourage selected students to send in evaluations. Naturally these tend to be glowing evaluations.

Most courses reviewed suffer from self-selection bias of disgruntled students. Most reviews tend to be negative. The number of students who send in reviews is miniscule relative to the number who take the courses. I mean we're talking about epsilon here!

Disgruntled students also seem to have a competition regarding who can write the funniest disparaging review.

Fortunately, the site seems to be ignored where it counts.

Bob Jensen

May 12, 2004 reply from David R. Fordham [fordhadr@JMU.EDU] 

Another one is:

www.ratemyprofessor.com 

I use it as an example of how gullible people are... taking Internet sites as Gospel without considering where the data comes from...

David R. Fordham 
PBGH Faculty Fellow 
James Madison University

May 5, 2004 reply from Jagdish Gangolly [JGangolly@UAMAIL.ALBANY.EDU] 

Bob,

I think it is important to provide incentives to be the best. It is also important to provide incentives to be NOT at the bottom.

In the old days, at Cambridge University, at least in the Mathematical Tripos, the students were graded into four classes: senior wrangler (only one student could be this), wranglers, senior optimes, and junior optimes. During the commencement, the student at the bottom of the totem pole would be required to carry the "wooden spoon" (for a picture of it click on http://www.damtp.cam.ac.uk/user/sjc1/selwyn/mathematics/spoon.html ), to signify that (s)he was good mainly for stirring the oats.

While draconian, the wooden spoon provided sufficient incentives to the students not to be the one to carry it. The tragedy is that nowadays many students might carry it with pride (to be called not-a-geek or nerd).

Jagdish

May 5, 2004 reply from Bob Jensen

Hi Jagdish,

I loved the link at http://www.damtp.cam.ac.uk/user/sjc1/selwyn/mathematics/spoon.html 

But I have one question:

Wooden spoon too quick 
Make student much to sick

Wooden spoon too late 
Make student out of date

Wooden spoon on time 
Make student want to climb

Main question when I teach a goon 
Where is it best to place that spoon?

Thanks,
Bob Jensen

May 5 reply from Jagdish Pathak

I find the very grades by themselves faulty in the scenario of those schools where very best are chosen to be privileged students, viz. ivy league ones. It is absolutely wrong to have more than one grade in such schools in my view. All of us are aware that these schools admit only the top rung of SAT and what value addition is done in four years by the school, if these students come out lesser than 'A' grade?
I believe there is a way to differentiate these all potential 'As' and that is by differentiating 'A' grade itself. The very best or the top 5-10% may automatically would acquire AAA, the major middle group would acquire 'AA' and the rest minority may get 'A'.There can be a theoretical provision for a 'B' or 'F' which will be a 'B' or 'F' like anywhere else and student may attempt in only one additional chance to make it into higher AAA or AA or A grade.

How does it sound? Please forgive me if I have sounded a bit judgmental.

Jagdish Pathak, PhD
Assistant Professor of Accounting Systems
Accounting & Audit Area
Odette School of Business
University of Windsor
401 Sunset
Windsor, N9B 3P4, ON
Canada

May 5, 2004 reply from Bob Jensen

Hi Jagdish,

I think a “rose by any other name is a rose.”

I’m not certain whether AAA/AA/A/B/C/D/F is much different that 6/5/4/3/2/1/0 in the eyes a student in a class.  An ordinal ranking with seven categories is an ordinal ranking with seven categories by any other name.

Other ordinal rankings by any other name may be somewhat different.  Whether ranks have two scales (P/F), three scales (H/M/L), five scales (A/B/C/D/F) or a ranking of N students (1/2/3/…/N) changes the nature of the competition.  The more ranking categories, the more intense the competition becomes to get the highest possible grade.  For example, in the U.S. Military Academy, the top ranking graduates down to the bottom ranking graduates are all determined, and this makes for some intense competition to be the top graduate (although the lower ten prospective graduates may decide to compete in a race to the bottom just for the distinction of being last after earning a decent rank becomes hopeless).

Another problem is one of aggregation across courses.  For example, an ordinal scale of A/B/C/D/F becomes a cardinal scale carried out to two decimal points when we transform a set of grades into a something like a gpa = 3.47.  We have thereby created a cardinal way to rank graduates on a continuum when the inputs to the cardinal outcomes are only ordinal A/B/C/D.F grades for every course.

Students are most interested in how rankings affect them in later life.  For example, suppose Big Four accounting firms will only interview students with a gpa of 3.30 or above.  In that case, weaker students will advocate more grade inflation so they can make the cut.  Top students will advocate grade deflation so that the pool of students having a gpa higher than 3.30 smaller.  For example, suppose grade deflation leaves a pool of 10 qualified graduates whereas grade inflation leaves a pool of 40 qualified graduates.  If only nine winners are going to be chosen from the pool, then top students have better odds with grade deflation.

One problem we are having at the K-12 level, is that students are aspiring for less.  I will forward Steve Curry’s opinion on this.

 Bob Jensen

May 5, 2004 reply from Steve Curry

The five letter grades were supposed to be a scale with C meaning average. A and B were above average, D and F were below average. The youth and college kids I work with at church are not interested in this scale. (Nor the related 100-point scale, nor the 4.0 GPA scale.) The parents want the A, the kids themselves are much more in the pass/fail mindset. It’s like the joke what do you call someone who graduated at the bottom of the class in medical school? Doctor. Whether this is an overall societal trend, I cannot say. It may be useful to find out. If so, our evaluations of them and their evaluations of us need to change.

When the mandatory faculty evaluations were introduced back in 1987, I heard one professor argue that there should only be one question: “Did you learn anything?” From what I’ve seen in the teens I know, this simple evaluation is what they want. When the pass/fail kids become the pass/fail parents and teachers, the various scaled systems may not survive. If change is to occur, it will be long and painful.

Another question arises: How important is evaluation in the first place? Certainly education that is preparing students for life needs to evaluate whether the student has learned what is necessary but what about the part of education that is learning for learning’s sake? Someone who wants to become a banker certainly needs to be taught amortization and there needs to be an evaluation to see if they understand the concept and its application before they are certified. But is it really necessary to evaluate a person who takes a history course simply because they love the story? Evaluating the former is easy. Give them some numbers and see if they get it right (pass/fail). The latter is more difficult. Which details does the instructor think are important? This subjectivity lends itself more to a scaled evaluation but the basic question is if evaluation is even necessary at all. Back to the simple question “Did you learn anything?”

All this may help explain the rise of technical training in our society where you either get the certificate or you don’t. Maybe Career Services may have some insight as to whether campus recruiters even look at the transcript. In my first job out of college, the phone company never requested a transcript, they just asked if I had a degree. Have our recent graduates encountered the same?

That we even have a concern over grade deflation (a few years ago we were discussing grade inflation and the Lake Wobegon Effect) draws into question the credibility of our current evaluation system in the first place. If average truly is average then the average grade should have been, should be, and should always be a C. If it isn’t, this suggests the evaluation system is not accurate or impartial. It also implies it is not fair.

Stephen Curry Stephen.Curry@Trinity.edu
Information Technology Services Phone: 210-999-7445
Trinity University   http://www.trinity.edu\scurry 
One Trinity Place 
San Antonio, Texas 78212-7200

May 5, 2004 response from akonstam@trinity.edu 

I have never understood faculty be interested in having lower grades in the class. Grade inflation might be caused by: 

1. Better students. Should not the better students at Harvard get better grades. When we change our average student SAT from 1000 to 1250 should they not get better grades.

2. Maybe teaching and teaching tools have become more effective.

3. Are all courses equally hard and should they be. Do we really think art courses and calculus courses need to be equally difficult?

With deference to Bob Jensen's studies their are two many variables in producing better grades to pin down the cause effectively.

 Aaron Konstam 
Computer Science Trinity University 
One Trinity Place. San Antonio, TX 78212-7200

May 5, 2004 reply from Bob Jensen

Aaron wrote the following:

****************

1. Better students. Should not the better students at Harvard get better grades. When we change our average student SAT from 1000 to 1250 should they not get better grades.
**************

Hi Aaron,

I think your argument overlooks the fact that the people raising the most hell over grade inflation are the best students currently enrolled in our universities, especially students in the Ivy League universities.  If 50% of the students get A grades at Harvard, the Harvard grade average becomes irrelevant when Harvard graduates are attempting to get into law, medical, and other graduate schools at Harvard and the other Ivy League graduate schools.  Virtually all the applicants have A grades.  Where do admissions gatekeepers go from there in an effort to find the best of the best?

The uproar from top students at Princeton was a major factor leading to Princeton 's decision to put a cap on the proportion of A grades.  

Some years back the Stanford Graduate School of Business succumbed to pressures from top MBA students to cap the highest grades in courses to 15% of each class.  This became known as the Van Horne Cap when I was visiting at Stanford (Jim Van Horne was then the Associate Dean).  The reason the top students were upset by grade inflation was that they were not being recognized as being the best of the best in order to land $150,000 starting salaries in the top consulting firms of the world.  Those consulting firms wanted the top 10% of the graduates tagged "prime-grade" for market by Stanford professors.  (Recruiters also complained that all letters of recommendation, even those for weaker students, were too glowing to be of much use.  This is partly due to fear of lawsuits, but it's also a cop out.)

*******************
And now, a new report prepared by the American Academy of Arts & Sciences says it's time to put an end to grade inflation.

"Deflating the easy 'A'," by Teresa Méndez, Christian Science Monitor, May 4, 2004 --- http://www.csmonitor.com/2004/0504/p12s02-legn.html  
*******************

May 6, 2004 message from Paul Fisher [PFisher@ROGUECC.EDU] 

The BBC did a small piece on the four-minute mile this morning. It is interesting that 30-40 years ago that barrier was thought to be impossible to break, yet now runners are not considered "world-class" unless they can do so regularly. Does that mean our tracks are shorter? Stopwatches slower?

We should be improving our instructing ability and our students grades should be reflecting that. I know that my courses are taught much better today than twenty years ago, and I would be surprised if any instructor would say that their teaching skills have degraded over the years.

That does not mean I don't see the internal problems with SAT and other measurements that may inhibit student learning, yet maintain instructor status.

Paul

May 6, 2004 reply from Bob Jensen

Hi Paul,

You said: 

***************************** 
"We should be improving our instructing ability and our students' grades should be reflecting that. I know that my courses are taught much better today than twenty years ago, and I would be surprised if any instructor would say that their teaching skills have degraded over the years." 
****************************

Near the bottom of this message you will read a less optimistic quote from Ohio State University: 

*************************** 
The massive number of undergraduates who are effectively illiterate (and innumerate) leads to a general dumbing down of the curriculum, certainly the humanities curriculum. 
***************************

It is absolutely clear that we are not "improving our instructing ability" in K-12 education where our TV-generation graduates are on a race for the bottom and are demonstrating an immense lack of motivation in public schools. They are winning a speed test in terms of hours spent in class (maybe 4-5 hours) per day vis-à-vis my school days when we spent nearly eight hours per day (8:00-12:00 a.m. and 1:00-4:30 p.m.) in class minus two recess breaks.

NB:  
Especially note the last paragraph at the bottom of this message which compares U.S. versus Japanese school children.  The last line reads "A little Japanese respect for hard work might work wonders for this generation of American slackers who refuse to recognize their own ignorance with anything other than praise."      

It is also doubtful for our college graduates when employers tell us how badly communication skills have declined in our graduates, especially grammar and creative writing skills of the TV-generation. I think the media has greatly expanded student superficial knowledge about a lot of things, but so much of it seems so shallow. Ask your college's older writing composition instructors if writing skills have improved over the years? Ask the instructor's in the basic math/stat course if math skills have improved?

I think that more of our graduates might be able to run the four-minute mile, and their term papers may be equally fast-paced Google pastes that set speed records but not quality records.

How well do you think our college graduates would do on this supposed 1895 test for eighth graders --- http://skyways.lib.ks.us/kansas/genweb/ottawa/exam.html 

If you get a chance, compare the reading book currently used in the fifth grade of your school district with the turn-of-the-century McGuffey Reader ---- http://omega.cohums.ohio-state.edu/mailing_lists/CLA-L/1999/12/0092.php 

The recent anecdotes about the inability of undergraduates to read what grade school students used to read before WW II should hardly come as a surprise. The new 1998 NAEP writing assessments, how available at the National Center for Educational Statistics, show in correlation with the reading assessments that the majority of US students lack the skills for reading any advanced literature.

In his press release, Gary W. Phillips, the Acting Commissioner for the NCES, stated that the average or typical US student is not a proficient writer (where "proficient" is a descriptive skill category of the NAEP) and has only partial mastery of the knowledge and skills required for solid academic performance in writing. This is true, he noted, at the national level for all three grades (4th, 8th and 12th). Only 25% had reached the proficient achievement level, while a mere 1% in each grade had reached the advanced achievement level. I note that the skills required for basic, proficient and advanced are very generous. By the English standards of a century ago, "advanced" would probably not even qualify for "basic."

Here is a summary of the percentage of students at or above each achievement level by gender:

Gender Advanced Proficient Basic

Male 0 14 70 Female 1 29 86.

The discrepancy between male and female proficiency should ring alarm bells throughout the educational world. The gap here nearly guarantees poor male performance at the university. As a gross description, the data show that 23-38 percent of US students fall below grade level in writing. If one compares the writing assessments with the reading assessments, a fairly close correspondence between the two is evident. Here is a summary of the percentage of students at or above each achievement level in reading by year of assessment:

Year Advanced Proficient Basic

98 6 40 77 94 4 36 75 92 4 40 80.

What this tells us is what everyone who teaches writing knows quite well: writing is a form of book talk. Failure in reading assures failure in writing.

It is, as a consequence, hopeless to tackle the writing problem without first solving the reading problem. Indeed, I'm quite confident that a massive improvement in reading skills would, by itself, produce a significant improvement in writing skills. The NAEP assessments suggest modest improvement in reading at the fourth grade level (though skewed by the failure of some states to include the results from students with learning disabilities), but they are far too small for the enormous amount of money that has been spent to improve the skill. Since private schools consistently outperform public schools by a large margin at all grade levels in both reading and writing assessments, there are clear advantages in relative freedom from the educational bureaucracy and greater control over discipline and content. It is very unlikely, in my opinion, that the public schools will ever work very well unless the socio-economic disparity between the poor and the middle class (shrinking though it is) can be eliminated or at least reduced. The NAEP results show another important correspondence, that between parental education and writing skill. Parents with a college degree impart more social capital--including discipline and higher expectations--to their children than parents with only a high school degree or no degree.

The massive number of undergraduates who are effectively illiterate (and innumerate) leads to a general dumbing down of the curriculum, certainly the humanities curriculum. Heroic efforts must be made simply to convey the semantic meaning of a passage children once read in McGuffy's Reader. A healthy respect for their own deficiencies coupled with the will to learn and a relentless courage to fight through to understanding would help these weak students enormously. Unfortunately, a very large proportion are simply disengaged from any kind of serious, disciplined and steady application to studies as a study by UCLA's Higher Education Research Institute shows (_The American Freshman: National Norms for Fall 1995_, ed. Sax et al. (Los Angeles: HERS, 1995)). More and more students entering college have spent less time at homework than ever before, talked less to teachers outside class, participated less actively in clubs and visited a teacher's home less frequently. They want everything presented to them in an easily graspable, attractive package--like a TV sitcom. Many claim to be bored in class and are hostile to long or complex reading assignments (whole classes indeed will revolt on occasion), but expect good grades for mediocre work. The alienated and disengaged are often proud of their ignorance. A student who claims to have read all of Othello I.i, which is after all a very modest assignment, without understanding a word of it has not availed himself of a good annotated edition, of dictionaries and of references works. He also lacks a decent sense of shame. More significantly, he hasn't displayed the will to keep working at the scene until some understanding breaks clear. 

In all my years of teaching Shakespeare at the undergraduate and graduate levels, as in my years teaching him in high school, I never encountered such a completely blank mind. Certainly not in Japan, where I'm currently teaching a seminar in Shakespeare with students who labor unremittingly to follow the syntax and meaning. A little Japanese respect for hard work might work wonders for this generation of American slackers who refuse to recognize their own ignorance with anything other than praise.

 

As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality.
Albert Einstein.
I suspect this quote could easily be modified to apply to academic accounting research.

How could a school district be unaware of such an important law?  The law itself is probably a poor law that will ultimately turn the Algebra course into a color-the-equation course for students not bound for college.  The fact of the matter is that the algebra coloring books could just not be printed by the time the law went into effect.

May 2, 2004 message from Dr. Mark H. Shapiro [mshapiro@irascibleprofessor.com] 

The Los Angeles Times recently reported that some 200 school districts in California had been granted waivers from the new graduation requirement that compels every high school student in the "golden state" to pass Algebra 1 before receiving his or her diploma. The school districts that were granted waivers complained that they were unaware of the new law, and that it would be unfair to penalize their students who were about to graduate because of the failings of these districts. 

For students not interested in going on to college, wouldn’t it be better to substitute the Algebra course for a course combining Excel financial functions with the basic mathematics of finance so that students would understand how interest rates are calculated on loans and the basics of how they might be cheated by lenders, investment advisors (read that mutual fund advisors), and employers? For those students, the best thing they could learn in my opinion is at http://www.trinity.edu/rjensen/FraudDealers.htm
The course could also include some basic income tax fundamentals like interest and property tax deductions and the calculations of after-tax costs of home ownership and the senseless cost of purchasing vehicles you cannot afford.

Students who change their minds, after graduation, and decide to go on to college will just have to pick up the Algebra later on when they have perhaps matured enough to see some relevance of algebra and other mathematics courses in their education.  I was an Iowa farm boy who did not take calculus, linear algebra, differential equations, finite mathematics, and mathematical programming until I was in a doctoral program.  This turned out to be a brilliant move, because I looked like a genius to some of my competitors in the program who forgot much of the mathematics they studied years earlier and had long forgotten.  For example, one of our statistics qualifying examination questions in the doctoral program required integrating the normal distribution (not an easy thing to do) by shifting to polar coordinates.  I looked brilliant because I’d only recently learned how to integrate with polar coordinates.  My engineering counterparts had long forgotten about polar coordinates --- http://mathworld.wolfram.com/PolarCoordinates.html

But please, please do not ask me anything today about polar coordinates?  Many things learned in doctoral programs are not relevant to life later on.

Bob Jensen

May 3, 2004 reply from Patricia Doherty [pdoherty@BU.EDU] 

-----Original Message----- 
From: Patricia Doherty 
Sent: Monday, May 03, 2004 9:12 AM 
Subject: Re: Mathematics versus Reality versus Curriculum

"…wouldn't it be better to substitute the Algebra course for a course combining Excel financial functions with the basic mathematics of finance so that students would understand how interest rates are calculated on loans and the basics of how they might be cheated by lenders, investment advisors (read that mutual fund advisors), and employers? …"

In order to understand these, a student needs many of the concepts taught in Algebra I, such as the way equations work. Algebra I is really a pretty basic math course where they spend a lot of the first months reviewing basic math like fractions and decimals. These seem to me like things students need to understand spreadsheets and compound interest. Perhaps a DIFFERENT algebra course should be offered for those who are college-bound, and those who may not be. The latter would take a course more oriented to the "practical" needs you cite, whereas the former (who also, by the way, need these things) would take a more challenging, accelerated course, more along the lines of the Algebra I you are probably thinking of.

p

I love being married. It's so great to find that one special person you want to annoy for the rest of your life. Author unknown.

Patricia A. Doherty 
Instructor in Accounting Coordinator, 
Managerial Accounting 
Boston University School of Management 
595 Commonwealth Avenue Boston, MA 02215

May 3, 2004 reply from Bob Jensen

Hi Pat,

Actually, I found that by using Excel's financial functions my students grasp the concepts and the models before they learn about the underlying equations. They are deriving amortization schedules and checking out automobile financing advertisements long before they must finally study the underlying mathematical derivations.

When we eventually derive the equations, the mathematics makes more sense to the students. Sometimes they claim that they understood it better before learning about the math. It's a little like learning to appreciate poetry before delving into such things as meter and iambic pentameter --- http://www.sp.uconn.edu/~mwh95001/iambic.html 

I'm not sure at the first-course level in high school that it is really necessary to delve under the hood and understand the equations like we teach them in college. I certainly don't think that many high school students who never intend to go to college get much out of learning how to solve quadratic equations and other topics in Algebra 1. They have less interest because they don't see much use to them unless they are proceeding on to calculus and college.

Thanks,

Bob

May 4, 2004 reply from Gadal, Damian [DGADAL@CI.SANTA-BARBARA.CA.US] 

-----Original Message----- 
From: Gadal, Damian 
Sent: Tuesday, May 04, 2004 9:07 AM 
Subject: Re: Mathematics versus Reality versus Curriculum

I thought about this most of last night, and what I've been advocating is not failing our youth. That to me means not dumbing down our education system.

The car analogy doesn't work for me, as cars were engineered with end-users in mind, as were phones, computers, radios, televisions, etc.

I don't think we should put the roof on the house before building the foundation.

DPG 
Waterfront Accounting

May 4 reply from Bob Jensen

I think the real distinction is whether you think failure to require Algebra I for all students is necessarily dumbing down the entire education system. Many nations (especially in Germany and Japan) have flexible educational curricula to serve different needs of different students.

Alternative curricula may be equally challenging without being a "dumbing down."  Dumbing down arises when a course in any given curriculum is made easier and easier just so more students can pass the course.

Having alternative courses is not in and of itself a "dumbing down." For example, replacing Algebra I with "foundations of the mathematics of finance" or "foundations of music composition" would not necessarily be "dumbing down." Dumbing down any given course means taking the hard stuff out so that more students can pass. Replacing one hard course with another hard course is not dumbing down and may improve education because the alternate curriculum is more motivating to the student.

If you want to read more about how to "dumb down" math couses, go to http://www.intres.com/math/ 

*********************************************** 
The Old Adobe Union School District in Petaluma, California has adopted a new math program: MathLand. The net result of this action is to dumb-down the math curriculum and turn the math program into a math appreciation program. This site is dedicated to informing parents in Petaluma, California about the issues involved.

Children grow older and the protest continues against the use of the CPM Algebra I program being used at Kenilworth Junior High of the Petaluma Joint Unified District. This program is so deficient it doesn't cover even half of the California State Content Standards for Algebra I.
**************************************

 

May 2, 2004 reply from Michael O'Neil, CPA Adjunct Prof. Weber [Marine8105@AOL.COM] 

As a teacher of Algebra A (yes, Algebra A: the first half of Algebra I) I can tell you that you do not even know how bad it is in public schools. I am also a CPA and teach an accounting and consumer finance class in high school. Yes, I fail most of my students. Most of my Algebra A students have already failed Pre-Algebra. They are very lazy, and given their low academic level, many of them are discipline problems.

Despite having standards and trying to TEACH them the material I was not given tenure and then told flat out by the principal (a young man with little teaching experience) that he did not have to give me a reason, and he would not give me a reason. This despite my yearly evaluation having no negative areas--satisfactory in all areas.

California will let schools use accounting as a math class but will not give me credit toward my Math credential. So in theory it might be that in a school accounting would be a 12th grade class, and I would not be able to teach it, despite a MPAcc and CPA.

It will be interesting when schools show a high pass rate in Algebra I and no correlation to the Exit exam.

Mike ONeil

May 5, 2004 reply from XXXXX

I won't even start the story of what the Headmaster told me about the Cs in my Spanish class I gave to three students missing most of the semester due to their parents' taking them on repeated ski trips to Colorado and the students not only not turning in assigned-the-week-before homework, but clearly (matching their tests to the key) failing two of the three exams in the class. My Cs were not even honest in regards to cumulative work done, and pushing the packet. 

These students, according to the Headmaster, needed at least Bs in the class, for reasons I did not need to know. I discovered, after that reason was given that these parents were funders of the new gym and were pledged to give more. Keep in mind that this private school, in (City X), was and still is known for having more students test higher on SATs than other private schools in town. This school also requires 5 years of Latin to get out, and it's a joke to see the helpless ones struggle with Latin the first time (of course never having taken a foreign language in school before) when their rich parents transfer them in from other private schools or HISD to begin to learn Latin and keep a required B in those classes to graduate. 

Their parents whine that the kids are having too much homework, etc. What a mess. And that was one of the very best schools (City X) had/has to offer. I, needless to say, did not return to teach there the next year. And to teach in HISD, although teachers are needed, requires a handgun license and proficiency in martial arts as well as private bodyguard just to be defended against the classroom population. This week's NewYorker has such a cartoon (copy over at the library; hysterical). 

Bob, thanks for letting me vent here. Community colleges offer some hope, but there is such a time delay because of remedial work needed. Home schooling early might work in some cases. And to think these people are our country's future leaders. In closing, I certainly know that it is more difficult to learn as an adult than as a child or adolescent...

Happy Wednesday...

Very best, 
XXXXX

April 30, 2004 message from Carolyn Kotlas [kotlas@email.unc.edu] 

"How do instructors learn to teach online? What are their perceptions as they enter this new learning environment for the first time?" To find out, Dianne Conrad, assistant professor of adult education at the University of New Brunswick, interviewed five instructors in a Canadian university who were teaching online courses for the first time. Her interviews showed that the instructors drew upon their fact-to-face teaching experience, but that they "revealed very little awareness of issues of collaborative learning, of learners' social presence, or of the role of community in online learning environments." The details of Conrad's qualitative study are available in "University Instructors' Reflections on Their First Online Teaching Experiences" (JOURNAL OF ASYNCHRONOUS LEARNING NETWORKS, vol. 8, issue 2, April 2004) at http://www.aln.org/publications/jaln/v8n2/v8n2_conrad.asp.

The Journal of Asynchronous Learning Networks (JALN) [ISSN 1092-8235] is an electronic publication of The Sloan Consortium (Sloan-C). Current and back issues are available at http://www.aln.org/publications/jaln/.

For an account of online teaching from a veteran instructor, see "Less is More: Designing an Online Course" (DEOSNEWS, vol. 13, issue 4, April 2004; http://www.ed.psu.edu/acsde/deos/deosnews/deosnews.asp) by R. Thomas Berner, professor emeritus of journalism and American studies at the Pennsylvania State University

YourLearning.com --- http://www.yourlearning.com/churchillreport.html 

The report may be beneficial for individuals who are involved in online learning developments in healthcare education in the USA and other countries. The institutions visited during the fellowship may find it useful to read own and others case studies, to compare and reflect on the developments and implications on teaching and learning in healthcare. The report may be useful for other institutions in the USA, to add to the picture of diversity in online learning developments within USA. .

How one business educator (in Organization and Management) more than doubled her salary by staying home.  She does not worry about tenure, but the work is very tedious and time-consuming.

"For Online Adjuncts, a Seller's Market Part-time professors, in demand, fill many distance-education faculties,"  by Dan Carnevale, The Chronicle of Higher Education, April 30, 2004, pp. A31-A32.

Ruth Achterhof won't say how many courses she teaches, for fear that her employers will think the workload is too much for her to handle.

But the work is enough to earn her about $90,000 per year, she says.

"I'm afraid my schools will go, 'Holy smoke!  How does she do that?'"

Because she does all of her teaching on-line, Ms. Achterhof can handle many more courses, at many more colleges, than she could face to face.  She is an adjunct professor of business and management at four institutions, in three states, moving among her teaching duties with the click of a mouse while her black Labrador lies curled at her feet.  She hardly ever sees a campus, spending much of her time at home here in a 100-year-old cottage next to a small lake.

Being a virtual adjunct, she says, means never having to play office politics or worry about ticking off her supervisors.  And if any gig goes sour, it's easy for her to pick up another one.

"It's good to have backup schools because you don't ever know if a dean is going to change or if I'll make a faux pas," she says.  "So it's OK if I lose one."

But she is in no danger of losing any of her jobs right now.  In fact, Ms. Achterhof and other online adjuncts are in high demand, as colleges increasingly turn to part-time faculty members to help expand their distance-education programs.

The strategy saves money for colleges, most of which are dealing with tight budgets.  Also, full-time faculty members are often reluctant to make the leap from the familiar setting of the lecture hall to the un-known arena of the virtual classroom.

Some critics say, however, that the quality of distance-education programs might be threatened by the presence of so many part-timers.  And faculty unions argue that increases in part-time faculty jobs, even if on-line, further limit the prospects of both full-time faculty members and adjuncts who want permanent teaching positions.

LONG HOURS

Ms. Achterhof is perhaps an extreme example of what some are calling a new breed of adjunct professor.  She did not start her career in academe.  She used to own and run a cafe called Andre's, in Grand Haven, Mich.  Later she earned her master's in educational leadership and her doctorate in organization and management and taught traditional courses for a few years at Baker College.  She was offered $35,000 a year to teach there permanently, but in the late 1990s she found that online teaching was a better fit--and more lucrative, too.

Now she makes more money and can set her own schedule, teaching courses like "Leadership Development" and "Negotiation and Dispute Resolution" to students who log on at their convenience.

Most of her days are spent reading e-mail messages in her small, wood-paneled home office.  A vast majority are students' responses to study questions, or student essays or other assignments for her to grade.

She quickly scrolls through the messages and types a response to each one.  Occasionally she takes a break to do laundry, wash the dishes, or fix her husband some lunch.

The quantity of her correspondence is impressive.  Her "sent" folder shows that she shipped out 2,554 e-mail messages between February 2 and March 18--an average of about 56 messages a day.  Just about all of them are sprinkled with typographical smiley faces or other emotions.

"Super great job.  Good use of terms," she tells one student.

It helps that she can type 60 to 70 words per minute and read 1,200 words per minute.  Otherwise she doesn't know how she could complete all of her work.

On Mondays and Tuesdays she starts her virtual teaching at about 8:30 a.m. and doesn't finish until around 11 p.m.  "On Mondays and Tuesdays I am in my computer chair 14 hours a day," she says.  "I tend to get grouchy as the day goes by."

The time she spends at her desk declines throughout the week, down to about four hours on Fridays and Saturdays.  "Saturday is the day I try to get my mood back," she says.  Sunday is a day of rest.  Then it's Monday again.

How does she juggle the tasks?  Organization.

She has lists of tasks for each class, and she makes check marks as she completes each item.  A rolling rack of file folders sits next to her, one for each course she teaches.  She has her tests and discussion questions ready to go for the whole semester, so she can cut and paste each one into the appropriate course Web site when the time comes.

Continued in the article

Some professors teaching at major universities are opting to teach online instead of going to classrooms.  For example, read about and listen to Amy Dunbar (University of Connecticut) by scrolling down the document at http://www.cs.trinity.edu/~rjensen/002cpe/02start.htm#2002 

Bob Jensen's threads on ideas for teaching online are at http://www.trinity.edu/rjensen/000aaa/thetools.htm#Ideas 

Bob Jensen's threads on resources for instructors are at http://www.trinity.edu/rjensen/000aaa/newfaculty.htm#Resources 

Bob Jensen's threads on tools and tricks of the trade are at http://www.trinity.edu/rjensen/000aaa/thetools.htm 

Bob Jensen's main education technology page is at http://www.trinity.edu/rjensen/000aaa/0000start.htm 

Tom Hicks brought me up to date on wireless home firewall computers.  He recommends Linksys products such as the one at http://www.linksys.com/splash/wcg200_splash.asp 

The Linksys Wireless-G Cable Gateway is the all-in-one solution for Internet connectivity in your home. The Cable Modem function gives you a blazing fast connection to the Internet, far faster than a dial-up, and without tying up your phone line. 

Connect your computer to the Wireless-G Cable Gateway via USB, or take advantage of the built-in 4-port 10/100 Ethernet Switch to jump start your home network. You can share files, printers, hard drive space and other resources, or play head-to-head PC games. Connect four PCs directly, or daisy-chain out to more hubs and switches to create as big a network as you need. The built-in Wireless-G Access Point allows up to 32 wireless devices to connect to your network at a blazing 54Mbps, without running cables through the house. It's also compatible with Wireless-B devices, at 11Mbps. The Gateway's Router function ties it all together and lets your whole network share that high-speed Internet connection. 

To protect your data and privacy, the Wireless-G Cable Gateway features an advanced firewall to keep Internet intruders and attackers out. Wireless transmissions can be protected by powerful data encryption. Safeguard your family with Parental Control features like Internet Access Time Limits and Key Word Blocking. Configuration is a snap with any web browser. With the Linksys Wireless-G Cable Gateway at the heart of your home network, you're connected to the future.

Personalized Pet Service
Petfinder will help you find a pet --- http://www.petfinder.com/ 

Potential adopters can search the site by type and/or breed of animal they're interested in, with results sorted by proximity to the searcher's ZIP Code.

Animal shelters and rescue groups create individual Web pages, usually with a photograph, for each available animal.

Experts say that the return rate for animals adopted through Petfinder is lower than for those adopted at a shelter, where it's easier for people to fall in love with (or take pity on) an animal that might not be right for them.

Free Press: Beginner's Guide to Media Reform --- http://www.mediareform.net/ 

Media must not be considered just another business: they are special institutions in our society. Information is the lifeblood of democracy — and when viewpoints are cut off and ideas cannot find an outlet, our democracy suffers.

From Syllabus News on April 27, 2004

Online University Consortium Flaks Traditional Degree Programs

A consortium of traditional universities has produced a report that – not surprisingly – indicates traditional universities are the preferred choice for online education and degree programs over for-profit providers. The Online University Consortium, whose members include Penn State, the University of Oregon, Ohio University, and the University of Southern California, said a survey it conducted showed companies prefer candidates with degrees from traditional universities two-to-one over for-profit providers. OIC also pointed to market research by Eduventures, a for-profit educational research firm, that concluded that, “as the market matures, brand strength will increasingly favor non-profit institutions.”

According to the report, traditional universities command significant brand equity, and will threaten market share of for-profit businesses, because students identify them as a familiar provider from which they will choose an online program for traditional reasons. “For-profit providers enjoyed an initial surge in popularity partly because of convenience," notes Greg Eisenbarth, the Consortium's Executive Director. "However, the market has shifted dramatically with the country's most respected universities now offering quality online degree programs for greater choice and flexibility."

The studies can be found at: http://info.101com.com/default.asp?id=6743 

Bob Jensen's threads on online training and education alternatives are at http://www.trinity.edu/rjensen/crossborder.htm 

"University of Illinois at Springfield Wants to 'Mirror' All Classroom Programs Online," by Dan Carnevale, The Chronicle of Higher Education, April 16, 2004, Page A32.

Officials of the University of Illinois at Springfield say they are working toward creating an online "mirror campus" that will offer all 39 of the degree programs that are available in the university's classrooms. The plan is one of the most ambitious online projects undertaken by a mainstream institution.

The Alfred P. Sloan Foundation gave the university a $1.21-million grant last month to pay for converting courses into online formats and for hiring more faculty members to teach them. The university is also spending at least $400,000 on the current phase of the project.

By fall the Springfield campus will have eight degree programs online, made up of about 175 online courses. The grant money will pay for eight more online degrees, to be available in three years. Officials hope to have all 39 degrees available online in about 10 years.

EXPANDING ACCESS

The Springfield campus is not, however, becoming a virtual institution. All on-campus courses and degrees will remain available. The mirror campus is meant to give students the option of taking any course either by going to a classroom or by lounging on a futon with a laptop.

"The key word here is access," says Burks Oakley II, the university's associate vice president for academic affairs. "One of the key things about this grant is keeping online in the mainstream."

While there are many virtual institutions in the United States, there appear to be no mainstream institutions that have tried to put all of their degree programs online. The Massachusetts Institute of Technology has promised to put teaching materials from all its courses online but not the courses themselves, meaning that outsiders may see the materials but not take the courses for credit.

The University of Illinois at Springfield is a midsize institution, with about 4,500 students. It has 20 undergraduate degree programs, 18 master's programs, and a doctoral program. Comparatively few freshmen and sophomores attend the institution, as most students enroll for upper-division and graduate courses.

Bob Jensen's threads on online training and education alternatives are at http://www.trinity.edu/rjensen/crossborder.htm 

"Virtual schools, real concerns," Amanda Paulson, The Christian Science Monitor, May 4, 2004 --- http://www.csmonitor.com/2004/0504/p11s02-legn.html 

Advocates of virtual learning say it opens new horizons, particularly for students in rural communities where choices are limited, or for those with special needs due to illness or serious involvement with athletics.

But critics worry about the lack of face-to-face interaction. Even more contentious, particularly with all-day virtual schools, is the difficulty of providing good oversight, and the question of giving state money to an outside district or charter school.

Continued in the article

Note that among the professions, women accountants are leading the way!  Let’s hope they clean up the messes left behind by the men.  Women physicians and business managers are on the move up.

Women are soaring in private business ownership and the accounting profession.  There doing better in management and salaries. 

But in the law profession it's somewhat downhill.  I guess women are just too honest.
"Do female execs have cleaner hands?" by Stacy Teicher (Stanford University), Christian Science Monitor, March 15, 2004 --- http://www.csmonitor.com/2004/0315/p14s03-wmgn.htm  Evidence suggests a link between women and ethical behavior. But they embezzle more often. In a post-Martha Stewart world, corporate America sifts conflicting claims. By Stacy A. Teicher | Staff writer of The Christian Science Monitor.

Women-Owned Businesses Growing Twice National Average --- http://www.accountingweb.com/cgi-bin/item.cgi?id=99089 

AccountingWEB.com - Apr-30-2004 - Nearly half of all privately held firms in the U.S. -- 10.6 million -- are owned 50 percent or more by women, says a new Center for Women's Business Research study sponsored by Wells Fargo & Company (NYSE: WFC).

According to the study, "Women-Owned Businesses in 2004," between 1997 and 2004 the number of women-owned firms with employees were estimated to grow over 28 percent, nearly three times the rate of all privately held firms, and twice the national rate of all firms. Employment grew over 24%, more than twice the rate of all firms, while revenues increased about 39%.

"Women-owned firms are growing, and increasing their employment faster than the general market," said Joy Ott, Regional President for Wells Fargo in Montana and National Spokesperson for Wells Fargo's Women's Business Services program. "These firms are driving growth in the American workplace, while generating revenues at a similar rate to all firms. This is a powerful statement about this fast-growing segment of American small business owners."

"Businesses that are 50 percent or more women-owned are growing at twice the rate of all firms, 17% vs. 9%. These businesses are a critical component of the national economy, not only in terms of their sheer numbers, but also in terms of their impact on employment and revenue generation," said Sharon Hadary, Executive Director, Center for Women's Business Research. "As employers of 19.1 million people, these women-owned firms spend over half a trillion dollars annually on just payroll and benefits."

The latest and most complete snapshot of women-owned businesses in the U.S. also highlights the top 10 fastest growing states for women-business owners. Based on an average rank 1997 to 2004 growth rates in the number, employment and sales among privately held, 50 percent or more women-owned firms, these states are:

1. Utah
2. Arizona
3. Nevada
4. Idaho
5. Kentucky
6. New Mexico (tied)
7. South Carolina
8. North Carolina
9. Arkansas
10. Oregon

The study results offer the most comprehensive view of the growth and expansion of women-owned businesses, tracking information like composition, spending habits and core industries of women entrepreneurs nationwide. It is the latest resource underwritten by Wells Fargo as part of its Women's Business Services program, an outreach and education program aimed at building relationships with women business owners by sponsoring key community organizations and market research.

Measuring its progress with a new public goal to lend $20 billion to qualified woman-owned businesses within ten years, Wells Fargo has lent more than half a billion dollars since re-establishing the goal in September 2003, and is now tracking at 150 percent of its pro-rated objective. Since the program's inception in 1995, Wells Fargo has lent more than $16 billion to women business owners nationwide.

May 4, 2004 reply from Don Mathis (Trinity University Library.

Very interesting. Have you seen this article? 
Don Mathis

http://money.cnn.com/2004/04/23/pf/women_occupations/index.htm 

CNN Money, 27 April 2004

Woman's work? Almost anything
Women continue to make headway in arenas traditionally associated with men.
By Jeanne Sahadi, CNN/Money senior writer

New York (CNN/Money) This year, for the first time in the history of Harvard University, the number of women offered admission to the incoming undergraduate freshman class outpaced the number of men.

That's just one indication of how far women have come in their quest to achieve educational and professional parity with men.

Women now earn more associate's, bachelor's and master's degrees than their male counterparts. In the academic year 2001-02, 57 percent of bachelor's degrees and 59 percent of master's degrees were awarded to women, according to data from the National Center for Education Statistics.

Women also earned nearly half of the Ph.D.s (46.3 percent) as well as first professional degrees (47.3 percent), which include medical, law and dental degrees.

In fact, women's presence is growing in a number of arenas that traditionally have been associated with men.

Counting the number crunchers

Accounting is a good example of a field where women have been reaching the majority both educationally and professionally.  According to the American Institute of Certified Public Accountants, 57 percent of undergraduate degrees in accounting were awarded to women in 2002.

Today, women account for roughly 59 percent of accountants, up from about 39 percent in 1983, according to data from the federal government's Current

Population Survey.

Accounting giant KPMG is recruiting accordingly. In 2003, 52.3 percent of KPMG's hires from college campuses were women and overall 48 percent of its new hires for its accounting and tax professionals staff were women.

That swell in the ranks isn't visible in the boardroom yet. But the numbers are improving.

Only 13 percent of KPMG's U.S. partners are women, but that's double what it was in 1998. And among the partners to be named this year, 22 percent are women, according to KPMG.

More women doctors on tap

In the field of medicine, women are also continuing to make large strides. Even though they only accounted for 25.2 percent of all physicians in 2002, that's up from 17 percent in 1990.

And given their growing numbers in medical school and graduate training programs, it's very possible women will make up roughly 45 percent of all physicians by 2025, according to Edward Salsberg, director of workforce studies at the Association of American Medical Colleges (AAMC).

In the 2002-03 year, women accounted for 45 percent of all medical school graduates. And this year, for the first time, women made up the majority of applicants to medical school, according to the AAMC.

Among the specialties, women in 2002 made up the majority of residents in pediatrics, family practice, obstetrics and gynecology, psychiatry and dermatology, according to the Journal of the American Medical Association.

Women lawyers see small drop

The picture in law is not quite as bright. Women account for roughly 28 percent of all lawyers, according to CPS data. But that's down from the 29 percent reported in 2002.

Also slightly down is the number of women enrolling in law schools. For a few years the percentage hovered around 49 percent, but for the 2003-04 year, that percentage slipped to 48 percent, according the American Bar Association.

Nevertheless, women accounted for 49 percent of summer associates in 2003, according to research from the National Association of Law Placement. And women earned 49 percent of the JDs awarded last year.

At the staff level, NALP found women attorneys account for 43 percent of associate or staff/senior attorney positions. But in terms of making partner, women account for only 16.8 percent of partners at law firms nationwide. Even though that represents a small increase from 2002, relative to total headcounts at the firms, women remain underrepresented at the partner level.

Businesswomen make big strides

In business, women's representation is stronger than ever, but the number of women at the top is still not proportional to their ranks.

They account for 50.5 percent of managerial and specialty positions, according the CPS. But among Fortune 500 companies, women only represent 15.7 percent of corporate officers, 13.6 percent of board directors, 8 percent of those with the highest titles and 5.2 percent of the highest earners, according to the research firm Catalyst.

And among Fortune 500 CEOs? Only 1.6 percent a total of eight - are women.

Among privately owned businesses, more women than ever are at the helm.

Nearly half (46 percent) of all privately held U.S. businesses are majority owned by women, according the Center for Women's Business Research.

On the earnings front --- http://money.cnn.com/2004/04/20/news/economy/women_earnings/index.htm 

Even though there still exists a significant wage gap nationally between women and men in the labor force, an analysis of Current Population survey data by the Employment Policy Foundation, a public policy research group, found that the proportion of women earning six figures tripled between 1991 and 2001.

The EPF found that in 2001, one in every 48 women working full-time earned over $100,000. That's up from one in 143 in 1991.

The number of women earning over $60,000 almost tripled during the same period.

The numbers of men earning more than $60,000 and more than $100,000 also rose, but at much slower rates.

At the same time, the number of women earning less than $20,000 dropped by one-fifth.

Bob Jensen's threads on accounting careers are at http://www.trinity.edu/rjensen/bookbob1.htm#careers 

Who is most likely to commit a fraud within an organization?

I found this KPMG study outcome most interesting.

The fact that most of fraudsters are males from the "Finance Department" (which probably includes accounting) does not surprise me.  What surprised me at first was their seniority and age, but then perhaps the internal controls are weaker at the higher levels of management.  

What may be a surprise to you is the fact that many persons who knew enough to blow the whistle did not blow the whistle.  This didn't surprise me, however, since whistle blowing has few rewards relative the trouble it can get you into.  Since Sarbanes-Oxley, however, there will be greater opportunities for anonymous whistle blowing.  However, Sarbanes-Oxley is not likely to change the corporate culture overnight (if ever?) as long as whistle blowing is not rewarded --- http://www.trinity.edu/rjensen/fraudconclusion.htm#CrimePays 

"Long-Serving, Male Execs Most Likely to Commit Company Fraud," AccountingWEB, April 27, 2004 --- http://www.accountingweb.com/cgi-bin/item.cgi?id=99078 

A study conducted by by KPMG has revealed some interesting information about the typical perpetrator of a fraud, why they steal and who they target. Seventy-two percent of cases involve men only. Over half of company fraud involves two to five people. Forty percent of fraud involves employees from the finance department.

The analysis examines 100 of the fraud cases that KPMG has been called in to investigate over the past two years, from which a profile of a fraudster has been created. Alex Plavsic, national head of fraud investigations at KPMG, said: “One of the alarming findings from the study was the seniority of the perpetrators - we found that directors or senior managers committed almost two thirds of the 100 cases surveyed." “Fraud can have a devastating effect on a business, both from a financial and reputational perspective, which is why most companies try to keep the discovery of fraudulent activity as quiet as possible.”

Who? The analysis found that many of the perpetrators were long serving employees - 32 percent of them had been working for their companies for between 10 and 25 years. And they were not operating alone - in more than half of all the cases (51 percent) two to five parties were involved in the fraud, compared with only one in three cases carried out solely by the perpetrator. The number of people involved in some of the cases (more than five people in ten percent of them) is indicative that fraud can be endemic within some departments and consequently more difficult for outsiders to detect. In one case analysed, 207 individuals were involved in a single fraud.

In 72 percent of cases, the fraudsters were found to be male-only. Female-only fraudsters were identified in seven percent of cases and both male and females were involved together in some 13 percent of cases. In the remainder of cases, no perpetrator was identified. The age of the principal fraudster was typically between 36 and 45 (41 percent of cases). 29 percent of cases involved those aged between 46 and 55. Those aged between 18 to 25 made up only one percent of perpetrators.

The finance department is the most likely business area that the fraudster targeted or was responsible for (40 percent of cases). Procurement was the next most likely area (12.5 percent), while one in ten frauds occurred in the sales area.

How? A weak control environment was the primary reason. In half of the cases surveyed, this was the weakness exploited by the fraudster. In nearly one in three incidents it was the perpetrator abusing their key authorities. Just over one in ten frauds were achieved by the fraudster operating in alliance with others to circumvent controls. While the finance department is often perceived as guardian of control, it remains the top opportunity and target for fraudsters.

And if company directors are hoping that their internal controls are robust enough to pick up fraud they are likely to be disappointed - only one in four were detected by a management review. 31 percent of frauds were discovered following an employee blowing the whistle, an anonymous tip-off or a report by an external third party. Whistle-blowing is an important weapon in the fight against fraud, despite this, the survey found that while four in ten employees were aware of or suspected that a fraud was occurring, they took no action.

Why? Personal gain was the most likely reason (41 percent) for committing fraud. External pressures were also a trigger for fraudulent activity with one in eight cases caused by the perpetrator getting into financial difficulties. In nearly 33 percent of the cases the amount stolen was more than £1 million while in 26 percent of the cases, it was more than £100,000.

How do companies respond? Dismissal of the perpetrator was the most common response with 55 percent of the fraudsters being fired. However, in just under one in five cases no sanction was taken and this may be because of concerns about the reputational impact of fraud becoming known.

This is borne out by the fact that in 69 percent of cases there was no publicity surrounding the investigation or subsequent sanction, while only six percent of companies chose to publicise the fraud.

On a positive note, in a third of cases, businesses had recovered or were taking action to recover cash or assets following a fraud. Alex Plavsic adds: “This study has highlighted some worrying findings, and particularly demonstrates the need for companies to continually review their internal controls. Regular testing of key controls against the risk of fraud will identify any weaknesses in the system, which could easily be exploited by potential fraudsters."

“Internal controls can only be effective if companies have the right culture in place. A breakdown in the control framework and the integrity of individuals, is when fraud is most likely to be perpetrated.”

Bob Jensen's threads on corporate fraud are at http://www.trinity.edu/rjensen/Fraud.htm 

I remind readers that women do not always have clean hands.  Read about Rebecca Mack at http://www.trinity.edu/rjensen/FraudEnron.htm 

Battle of the Sexes

A KPMG study found that “Long-Serving, Male Execs Most Likely to Commit Company Fraud.” AccountingWEB, April 27, 2004 --- http://www.accountingweb.com/cgi-bin/item.cgi?id=99078 

But women embezzle more often according to Stacy Teicher. "Do female execs have cleaner hands?" by Stacy Teicher (Stanford University), Christian Science Monitor, March 15, 2004 --- http://www.csmonitor.com/2004/0315/p14s03-wmgn.htm 

The highly superficial deductive conclusion would be that if we promoted more women to executive positions, higher-level frauds would increase in frequency.

Counter argument: If we paid women better there would be less need to embezzle.

I am seeking examples of interactive online testing prior to 1999.  A company is making an absurd claim that it's 1999 patent gives it exclusive rights to virtually every type of test given online.  We need to document examples of online testing prior to 1999.  Please send examples to rjensen@trinity.edu  

Ellen K. Waterman, director of distance learning at the Denver institution, says she was stunned to see that somebody claimed to own the rights to online testing itself. The patent claims made by Test Central are so broad, she says, that they seem to cover any type of testing in cyberspace.

The documentation describes the invention as relating "generally to a method of making a test and posting the test on-line for potential test-takers." The patent cites general examples of types of online tests that are protected, including multiple-choice and short-answer tests.

COMPANY CLAIMS TO OWN ONLINE TESTING
By Dan Carnevale
The Chronicle of Higher Education
March 26, 2004, pp. 31-32

You can read the article at http://www.trinity.edu/rjensen/OnlineTestingClaims.htm 

Also see http://www.trinity.edu/rjensen/260wp/260wp.htm 

May 1, 2004 reply from John Schatzel [jschatzel@STONEHILL.EDU] 

Hey Bob,

I believe that I have been doing online testing with TechTutor(tm) since 1995. I see it as an instructional technology enhancement to a course and not as distance education per se. The tool does, however, tutor students on several topics (including system basics, the Internet, operating systems, networking, establishing and authoring web sites, E-commerce, WebTrust, SysTrust, XML, Web services and XBRL). It also administers multiple choice questions in a random fashion and calculates grades. TechTutor(tm) works over the Internet using the same Shockwave technlogy that I used to develop my Real Audit (tm) simulation. I having been doing this stuff for a very long time and can't imagine how anyone would think that they should or in fact be able to patent Internet-based testing in general. If you need to see the software, go to http://realaudit.com  then the Tutorials menu, then click here to purchase (skip the ordering part of course) and just click Download here after order. After you download and install the software (there are two versions: basic (the first 6 topics) and advanced (the last 6 topics listed above)) just let me know and I will set up an account for you to check it out. Hope this helps,

John Schatzel 
Stonehill College

 

The U.S. patent system has reached its limits, says a new study from the National Research Council. The findings echo what critics of the system have been saying all along.
Wired News, April 28, 2004 --- http://www.wired.com/news/business/0,1367,63248,00.html?tw=newsletter_topstories_html 

Patent Litigation: The Sport of Kings
Patent litigation is a growth industry. During the twelve-month period ending September 9, 2003, U.S. patent owners filed 2,788 patent infringement lawsuits, a 13 percent increase over the same period five years earlier. Similarly, in 2003 the United States issued 187,487 patents, a 22 percent increase over 1999. Indeed, patent litigation has become the sport of kings. Sure, there are staggering legal fees and the risk of a company imploding. But Douglas J. Kline, a leading patent litigator, says that patent lawsuits are not as bad as you think.
http://www.technologyreview.com/articles/wo_kline042804.asp?trk=nl

May 1, 2004 message from Scott Bonacker [lister@BONACKERS.COM] 

This is from an anti-spam listserv.

"BTW - note the META and MISC in the subject line. They use these codes to let participants know what is in the message so if you aren't interested you can just skip reading it. See http://www.claws-and-paws.com/spam-l/posting.html#topics-how for key to topics."

Scott E Bonacker, CPA 
820 E. Primrose 
Springfield, MO 65807 

Most Companies Get an "F" in Fraud Prevention http://www.accountingweb.com/item/98709 

Enron had a code of conduct. Enron had a hotline. And in the end, Enron had fraud. Today, companies operate with a false sense of security because they either don't have a fraud prevention program or the program they have is a legal, yet ineffective "fig leaf." "One key to fraud prevention is to create an atmosphere where employees feel confident in reporting wrongdoing without being victimized, even if executives appear to be involved," explains Toby Bishop, president & CEO of the Association of Certified Fraud Examiners (ACFE), the largest anti-fraud association in the world. "If companies don't have effective fraud prevention programs, they are at risk of failure," says Bishop.

Years ago, working as a consultant, Bishop tested the effectiveness of an existing fraud prevention program for a major utility company. Management thought their program was working and wanted confirmation. Bishop's firm surveyed a statistical sample of employees to assess their feelings about management's commitment only to discover that employees in one division did not believe management wanted to "do the right thing," says Bishop.

"If employees perceive their company's fraud controls to be weak or if they think management is only giving lip service to ethical behavior, fraud is inevitable," Bishop warns.

In 2002 fraud prevention was one of the goals addressed in the Sarbanes-Oxley Act (SOX), legislation that affects how public organizations and accounting firms deal with corporate governance, financial reporting and public accounting. The effect of SOX has been far reaching, leading to voluntary changes in private companies and mandatory changes in public companies. But is it preventing fraud? "It may not be as effective as people expected," Bishop answers.

Over the past 18 months Bishop has taught several thousand participants how to use the ACFE's Fraud Prevention Check-Up, a tool that identifies major gaps in organizations' fraud prevention processes. None of the participants thought their organization would pass the test, which means they are at significant risk of fraud.

Bishop says while Sarbanes-Oxley invokes a basic framework for internal controls, including anti-fraud controls, additional specifics are needed to address controls to prevent fraud. "There is a definite gap in the standards used to establish fraud prevention controls, if companies use them at all."

Bob Jensen's threads on corporate fraud are at http://www.trinity.edu/rjensen/Fraud.htm 

Kurzweil's Rules of Invention
More than 30 years of experience have given prolific inventor Raymond Kurzweil a few insights into how to ensure that your inventions have their day in the sun. First, he writes, learn the seven stages in the evolution of a technology: precursor, invention, development, maturity, false pretenders, obsolescence, and antiquity. And focus above all else on getting the timing right.
http://www.technologyreview.com/articles/kurzweil0504.asp?trk=nl

Great feedback messages on SurveyMonkey.com as a tool for conducting surveys --- http://www.surveymonkey.com/

Are there any negatives?

Bob Jensen

-----Original Message-----
From: Davis, Charlene
Sent: Monday, April 26, 2004 12:44 PM
Subject: RE: SurveyMonkey.com

My senate subcommittee also used SurveyMonkey.com for a recent faculty survey and I can tell you that not only does the survey look sharp, the initial set up is fairly easy and the results are available in a variety of downloadable file formats.

Dr. J. Charlene Davis
Associate Professor of Marketing
Department of Business Administration
302 Chapman Center
Trinity University
One Trinity Place
San Antonio, Texas 78212

-----Original Message-----
From: Specht, Linda B.
Sent: Monday, April 26, 2004 11:40 AM
Subject: SurveyMonkey.com

You are probably already aware of this survey tool site, but I was not.  It is really reasonable and the resulting survey is very professional in appearance.  If you have not already answered the survey sent out by our DSS office, do so for an example of the site’s survey.  The pricing is also great.  See below.  I wish I had known about this site earlier this semester when my online survey of accounting programs went out.

Linda

Professional Subscription A professional subscription is only $19.95/month, and includes up to 1000 responses per month.  If you exceed 1000 survey responses in any given month, there is an additional charge of $0.05 per survey response.  There are no long-term contracts, and you can cancel at any time.  As a professional subscriber, you have access to all of the advanced features of SurveyMonkey.  You can create an unlimited number of surveys, with an unlimited number of pages and questions.  In addition, all of your surveys are completely unbranded.

Basic Subscription A basic subscription is totally free and includes all of the basic features of SurveyMonkey.  It's a great option for individuals, students, and anyone who doesn't need the advanced features of SurveyMonkey.  Unlike other services, there are no annoying banner ads on your surveys.  In addition, all of your survey responses remain absolutely private.  Please note that basic subscribers are limited to a total of 10 questions and 100 responses per survey.

April 26, 2004 reply from Kevin Kimball [KimballK@BYUH.EDU] 

Two weeks ago I had created a survey in MC Word that I was to use in assessing my student's perceptions of the BYU-Provo (Norm Nemrow) CD approach to teaching introductory financial accounting. Realizing what a pain it had been in the past to format a Word document to work with our Scantron testing facility (i.e. lining up the words with the bubbles) I decided to try out SurveyMonkey.

Within a couple hours, I was able to register for a one month license for >$20, create my survey, refine it, and make it available to my students on-line. Within 1/2 hour of making it available, I was already able to see the results from several students who had already taken it. This was much, much better than formatting my Word survey in a Scantron format, making copies of the survey, taking class time to administer the survey, running the survey over to the testing center, running back to get the results, etc. etc.

Not only can I review the results and download them for further analysis but I can also make them available to any other interested party through a web link.

So far I have found no negatives, I even saved a few trees and $.

Sincerely,

Kevin Kimball 
Assoc. Professor of Accounting 
Brigham Young University - Hawaii 
kimballk@byuh.edu 

 

April 27, 2004 reply from Dan Stone [dstone@UKY.EDU] 

I've used surveymonkey over the past year for research, departmental, and class surveys. Before surveymonkey I was designing and implementing surveys in Inquisite (which I do not recommend).

I like surveymonkey and will continue to use it. It is much more efficient than designing and implementing on-line surveys without this tool. Some important advantages: no browser compatibility problems + easy access to data in multiple formats.

Negatives:

1. copying and moving multiple survey sources into a single survey is a big pain. I've asked for this functionality from the surveymonkey developer. It is not there yet. Maybe in the next version? 

2. setting the parameters can be difficult. I've mis-set parameters and lost data because of this. But hey, this is my fault for inadequately testing my own survey!!!!

Best,

Dan Stone

"New BLS Guide Outlines Accounting Trends and Job Outlook," SmartPros, April 21, 2004 --- http://www.smartpros.com/x43328.xml 

An increase in the number of businesses, changing financial laws and regulations, and increased scrutiny of company finances will drive the growth of accountants and auditors, according to the Bureau of Labor Statistics.

The 2004-2005 Occupational Outlook Handbook for accountants and auditors outlines working conditions, employment, training, earnings and more.

The new edition emphasizes the impact that new legislation will have on the industry through 2012. BLS predicts an increased need for accountants and auditors "to address changes in legislation related to taxes, financial reporting standards, business investments, mergers, and other financial matters."

In addition, BLS says "the growth of international business also has led to more demand for accounting expertise and services related to international trade and accounting rules, as well as to international mergers and acquisitions."

Specific trends predicted in the handbook include the following:

• CPAs will be in high demand due to increased scrutiny of company finances and accounting procedures.
• Management accountants and internal auditors will increasingly be needed to discover and eliminate fraud.
• Government accountants should be in demand to make government agencies more efficient and accountable.
• Forensic accountants will be needed to detect illegal financial activity by individuals, companies and organized crime rings. ("As success rates of investigations grow, demand will also grow for forensic accountants.")
• Accountants will shift away from tax preparation due to the increasingly popularity of tax prep software and tax prep firms.

The handbook also reveals that accountants and auditors held about 1.1 million jobs in 2002 and earned an average annual salary of $47,000. Approximately 1 out of 10 accountants or auditors were self-employed, and one out of five wage and salary accountants worked for accounting, tax preparation, bookkeeping and payroll services firms.

For the complete guide, available online, go to http://www.bls.gov/oco/ocos001.htm 

Bob Jensen's threads on accounting careers are at http://www.trinity.edu/rjensen/bookbob1.htm#careers 

Commentary of the Day - April 26, 2004: Actualizing in Our Classrooms. Guest commentary by David B. Shields --- http://irascibleprofessor.com/comments-04-26-04.htm 

Let me pause and report that I'm no lightweight in "Robert's Rules of Order". Matter of fact in many quarters I am regarded right much of a guru in the House of Robert, and Rooster has been quick to seek me out whenever he encounters a bit of confusion in the performance of his duties as SOB parliamentarian.

I've also been trained extensively in the behavioral sciences and have been trying of late to employ more of Carl Rogers' 'client-centered', non-confrontational techniques, especially when dealing with Rooster. Rogers maintained that the human "organism" has an underlying "actualizing tendency", which aims to develop all capacities in ways that maintain or enhance the organism and move it toward autonomy. In Carl's mind then it only followed that the therapist should never be seen as a threat or to be judging, and the best way to do that was to sit listening and offering only an occasional "Hmmm" in the exchange. Each person thus, according to Carl, would wind up 'maximizing his or her fundamental mandate to fulfill his or her potential.'

In all fairness I might pause further to point out that the theories of Carl Rogers had a major impact on public education in America, and much of our schools' reluctance to expect much out of their students, much less demand it, can be laid squarely at Carl's doorstep. In fact, these Rogerian theories, along with their educational offshoots, in large measure account for the teacher we so often see sitting on his or her duff in the classroom handing out busywork and going, "Hmmm!" The kid will educate himself if we just don't get in the way don't you know?

Needless to say, parents of ignorant and unruly kids love this kind of teacher and point with pride to their offspring bouncing off the walls in the classroom "actualizing." And I don't need to tell you what these parents do if anybody attempts to discipline their children or call them down. But still I've found the Rogerian model especially helpful with Rooster. So I repeat: I often employ the technique with him.

Continued in the commentary

"The Kingmaker," by Alan Deutschman, Wired Magazine, May 2004 --- http://www.wired.com/wired/archive/12.05/mossberg.html 

Walt Mossberg makes or breaks products from his pundit perch at a little rag called The Wall Street Journal. 

Walt Mossberg is walking through a convention hall at the Consumer Electronics Show in Las Vegas when a man starts screaming at him. The screamer, Hugh Panero, blames Mossberg for his company's recent problems: falling stock price, a sudden plunge in consumer interest. Mossberg is annoyed but hardly intimidated. As the author of the weekly "Personal Technology" column in The Wall Street Journal, he's used to dealing with disgruntled execs. He lets Panero shout. A crowd is gathering. Finally, Mossberg yells back, "I don't give a fuck about your stock price!"

In truth, Mossberg liked Panero's company, XM Satellite Radio, which beams more than 100 channels of music - rock, hip hop, jazz, country, you name it - directly to cars nationwide. The early reviews were enthusiastic, and investors loved the stock. But Mossberg hated the special radios that drivers needed to buy from the company to get the signal. In his column, he slammed the spotty reception and said the radios were poorly designed, hard to use, and too expensive. On the morning the column appeared, just five days before the conference opened, XM's stock fell 8.5 percent. Reuters reported that Mossberg's column was driving down the price.

Waiting for a flight back to Washington after the conference, Mossberg is eating a Burger King breakfast at Las Vegas-McCarran International Airport when Panero walks by. This time the entrepreneur is calm. The two men realize they're on the same plane and arrange to sit together in first class. (Mossberg got his ticket using upgrade coupons.) Once they're in the air, Panero admits that Mossberg is right about XM's hardware. A few months later, XM rolls out a new line of price-slashed radios with better controls for scrolling channels, plus larger screens for identifying the songs and artists. A year after the original review, in January 2003, Mossberg writes a column wholeheartedly recommending the new offerings.

XM is only one of dozens of companies that have redesigned products in response to Mossberg's unsparing criticism. RealNetworks overhauled its RealJukebox player. Intuit revamped TurboTax. Mossberg even forced Microsoft to scrap Smart Tags, which would have hijacked millions of Web sites by inserting unwanted links to advertisers' sites. Few reviewers have held so much power to shape an industry's successes and failures. Mossberg evokes comparisons to Robert Parker on wine and Frank Rich during Rich's controversial tenure as the Broadway critic of The New York Times. At least one grad school thesis has been written on Mossberg's clout. "He's one of the most trusted and influential voices in technology," says Yahoo! cofounder Jerry Yang.

Disarmingly bright, blunt, fervent, and combative, Mossberg was an investigative reporter for two decades before becoming a tech pundit, and he has a heady sense of his ability to keep the industry chieftains in check. His MO: posing as the champion of the "normal" or "average" tech consumer, though he's hardly one himself. Close friend and Journal reporter Kara Swisher calls him "a freakish geek."

Still, his success comes from demystifying the digital realm for readers who aren't regular Slashdot contributors. He's on a mission to remake the tech world according to his own fetish for simplicity, reliability, effectiveness, and great design. Chances are he has influenced the look, feel, and performance of your laptop, mobile phone, and MP3 player.

Mossberg's been a fiery crusader since the opening line of "Personal Technology," which debuted in 1991: "Personal computers are just too hard to use, and it isn't your fault." His quest has earned him legions of fans, but he's also angered many, who think he's arrogant, curmudgeonly, and subjective - and who wonder how deeply he understands the nitty-gritty of technology. His latest enemies: open source partisans, who chafed when he picked Microsoft Office over StarOffice, an open source darling.

The detractors and the wounded multiply, but Mossberg keeps expanding his valuable franchise. Unfazed by a 1997 heart attack and subsequent quadruple bypass, he does three weekly columns in addition to a weekly appearance on CNBC's Power Lunch and a monthly column for Smart Money. And, with Swisher, he hosts D: All Things Digital, the annual $2,995-a-person, three-day executive conference in early June at the Four Seasons resort in Carlsbad, California.

Continued in the article

The main link to Walt Mossberg's writing is at http://ptech.wsj.com/ 

Remember when you could print pictures directly from the camera?  We are almost there once more with digital photography that does not require downloading to a PC.  I’m going to order the Epson PictureMate as soon as it becomes available online (sometime in May) --- http://reviews-zdnet.com.com/Epson_PictureMate/4505-3156_16-30732997.html

On balance, we thought the Epson's photos were a bit better, at least for the lighting conditions in our test. Features were crisper and more natural-looking. The Olympus photos were a little redder and darker, but still very good.
Walt Mossberg

"New Ways to Print Digital Photos on the Go," by Walter Mossberg, The Wall Street Journal, April 28, 2004, Page D4 --- http://online.wsj.com/article/0,,the_mossberg_solution,00.html 

Most inkjet printers aimed at consumers can make decent prints from digital photos, but the process is often a hassle. It can require buying various types and sizes of photo paper, and swapping out your printer's regular paper, or even its ink cartridges. And then there's the software you often need to master. The whole process can be discouraging.

But there's an alternative: little photo printers that churn out snapshot-size prints directly from a camera or a memory card, without involving a computer or software at all. These tiny printers have become so popular that people even bring them to parties to print pictures of the revelry right on the spot.

Last April, I reviewed two of these small photo printers -- the Hewlett-Packard Photosmart 230 (now upgraded to the 245) and Kodak's EasyShare Printer Dock 6000. Since then, other companies have jumped into the fray with dedicated snapshot printers of their own. This week, my assistant Katie Boehret and I reviewed two of the recent entries: the Epson PictureMate and the Olympus P-10. These two cost $199 each, the same price as the H-P but $50 more than the Kodak.

Like the Hewlett-Packard and Kodak photo printers, the Epson and Olympus use different printing technologies. The Epson, like the H-P, is an inkjet printer, and uses a printing process similar to most general-purpose home printers. The Olympus uses a process called dye-sublimation, like the Kodak that we reviewed a year ago, and its ink is applied via a colored ribbon.

Ink and paper costs for each of these printers are important to note because even though the printers themselves cost only $199 each, expensive supplies can add up. Epson and Olympus sell ink and special 4x6 glossy photo paper together in one package, but while Epson's pack of 100 sheets and an ink cartridge costs $29, the Olympus pack of 100 sheets and the ink ribbon costs $49. Both printers come with a small sample of ink and paper -- the Epson comes with enough of both for 20 photos, and the Olympus has supplies for five.

Continued in the article

Great site from the Science Museum of Minnesota

Robots + US --- http://www.robotsandus.org/ 

The April 22, 2004 edition of the Scout Report states the following:

Created by the good people at the Science Museum of Minnesota (with generous support from the National Science Foundation) the Robots and Us website is an interactive and multi-sensory educational teaching tool that helps young people learn about the ways in which robots (and humans) move, think, and exist throughout the process of experiencing the world. Visitors will start out their journey in the virtual Low Life Labs, where they can proceed to the main activities directly or get help. Upon entering the main activities area, visitors may move to one of the four main labs: Moving, Sensing, Thinking, or Being. Each area contains a series of activities for visitors, along with a brief description of the concept and idea that each activity is actively exploring. The Sensing section is quite good, as it contains a number of interesting and intelligent activities, such as CAPTCHA, which allows individuals to try out examples of programs that can generate and grade tests that most humans can pass, but current programs can't.

The New York Times History of New York City --- http://www.nytimes.com/specials/nyc100/contents.html 

"Watch for New Labels As You Go Shopping For a New Desktop PC," by Walter Mossberg, The Wall Street Journal,  April 22, 2004, Page B1 --- http://online.wsj.com/article/0,,personal_technology,00.html 

A big change is brewing in the way buyers will be shopping for Windows PCs. This annual spring buyer's guide to desktop computers will help you navigate the new territory.

For many years, Intel, the leader in making processor chips -- the brains of personal computers -- has mainly labeled its products based on one factor: the clock speed at which the chip runs. And for years, I have advised my readers that this speed rating is a poor gauge of performance or value.

Starting next month for laptops and in June for desktops, Intel is introducing a new processor-labeling system that will de-emphasize clock speed. Instead, it will rank processors by numbers based on a combination of clock speed and other factors that make some chips more capable or versatile than others. These factors include things such as the size of the chip's "cache," a special kind of onboard memory that helps make processing more efficient; and the speed of the "front-side bus," a data pathway inside the PC.

The main processor names, like Pentium and Celeron, will be retained. But various models of the processors will be assigned three-digit model numbers. Top-of-the-line chips will get model numbers in the 700s, midrange models will have numbers in the 500s, and low-end models will be numbered in the 300s. So, a label might say "Pentium 4 Processor 550," or something like that.

PC labels will still report the clock speed, but it will be a detail beneath the new model numbers. This naming change will roll out gradually, and won't cover most PCs until the end of the year.

Now on to the buyer's guide. This guide is designed to help buyers of Windows PCs wade through the confusing array of models and configurations on the market. Apple's Macintosh computers are also excellent choices, but there are too few models to require a buyer's guide.

As always, my advice is aimed at mainstream users doing common tasks such as word processing, Web surfing and e-mail, personal finance, simple home photo and video editing, digital music and basic games. Hard-core gamers or folks doing big video productions need bigger, faster PCs than those specified here.

You should be able to get a bare-bones, name-brand Windows computer for $400 to $500, without monitor. Brand-name Windows models with more ample features start at $600 to $700. Media Center models, with built-in TVs, are $1,000 and up.

Continued in the article along with a nifty glossary at http://online.wsj.com/article/0,,personal_technology,00.html 

Jim Maher's updated summary of finance and accounting articles --- http://www.financeprofessor.com/summaries/summaries.htm 

Mini Summaries (glorified abstracts) from past FinanceProfessor.com newsletters!  GREAT for class.  Note some links are no longer valid as once the articles are publish in paper format, some journals remove the link.  However, that said, the links are still worth your time!  Great way to stay abreast of what is going on!

• Corporate Finance
• Investments
• Financial Institutions (also Money and Banking)
• International Finance
• Accounting
  

Think of what this might do for grading records.

From MIT's Emerging Technologies on April 26, 2004

Microsoft’s Magic Pen
If Jian Wang had his way, everything would be digital. “I hate printers—they turn digital things into analog,” he jokes, wading through a sea of cubicles at Microsoft Research Asia in Beijing. Stopping at a desk, Wang picks up a rectangular, silvery pen about the size of a magic marker and scribbles some corrections on a paper document. But this is no ordinary pen. A few seconds later, his comments appear on a nearby computer screen—superimposed on the electronic version of the document in the exact spot where he wrote on the hard copy. Wang’s pen captures handwriting and lets users make changes to digital files—on paper. This “universal pen,” as Wang calls it, could transform the way people interact with computers. Wang’s digital pen also reflects an ongoing transformation in the process of invention at some large corporate labs—a hybridization of the lone inventor and traditional corporate R&D.
http://www.technologyreview.com/articles/huang0504.asp?trk=nl

Garfinkel: The Paper Killer
Optical character recognition software is finally good enough that it can reliably scan paper documents—and let you get rid of them. And the cost of OCR is far lower than that of the alternative: hiring a typist. Columnist Simson Garfinkel is sold on the technology.
http://www.technologyreview.com/articles/garfinkel0504.asp?trk=nl

Bob Jensen's threads on resources are at http://www.trinity.edu/rjensen/000aaa/newfaculty.htm#Resources 

Islamic Finance
From Jim Maher's many wonderful helpers --- http://www.financeprofessor.com/islamicfinance/islamic%20finance.htm 

Roughly 20% of the world's population is Islamic.  While some in the Western world think this population is only in the Middle East, the religion is truly global: from the Middle East, to Afghanistan, to the US, to Indonesia, and every where in between.  While the extremists are the ones in the news each day, the vast majority of Moslems are peaceful, respect other religions, and do not hate business nor finance.  Attention to Islamic finance obviously accelerated since 9-11, but it is worthy to note that an Islamic finance was  meeting was actually scheduled for 9-12 in the WTC and that the Islamic Finance movement was already growing very rapidly.   According to estimates in the Wall Street Journal Islamic finance is roughly a $150 billion dollar market. 

So what is Islamic Finance? and how is it different from the traditional Finance we are familiar with in the Western World?

There are two key differences: 

1. The first and most famous (and on which we will focus the bulk of our attention) is the no-interest rule.  That is, you can not earn interest on a loan nor be required to pay interest on loans. 
2. The second difference is that money is to be invested only in worthy causes.  This is largely equivalent to the western concept of socially responsible investing. 

The Quran is the holy book of Islam (you can think of it as their bible if it makes it easier for you).  In it, believers find the verses that forbid Riba (or interest).  Alarijhi Bank has created a site (in both English and Arabic) that has the 4 key verses upon which the no-interest principle is based. 

Many of the differences in Islamic Finance (especially Islamic banking) revolve around this no interest principle.  For example, Islamic banks must take equity positions in homes rather than taking a traditional mortgage.  Others examples include essentially profit sharing plans, leasing, and repurchase plans.  These allow the Financial Institution to make money while satisfying the no-interest principle. 

The second difference between Islamic finance and traditional finance is the emphasis on socially responsible investing.  While in the western finical tradition there are many investors who  invest in "socially responsible" means, Socially Responsible investing is not as wide spread as it is within the Islamic tradition. 

Islam takes a holistic view of the person.  Thus someone who is good does good things.  This includes investing responsibly to assure that the money does not go 
for "bad" purposes.  These "bad" purposes include the usual subjects such as drugs, weapons, alcohol , porno and of course terrorism.  Again this is really no different than traditional socially responsible investing. 

Continued in the article

Take Two Quizzes:  I passed Number 1 (I'm probably a psychopath).  I failed Number 2 (I'm probably a lousy manager.)

Quiz Number 1 (forwarded by Dick Haar)
Read this question, come up with an answer and then scroll down to the bottom for the result. This is not a trick question. It is as it reads. Most people do not get the correct answer, but I got this one..

A woman, while at the funeral of her own mother, met this guy whom she did not know. She thought this guy was amazing, so much her dream guy she believed him to be, that she fell in love with him right there but never asked for his number and could not find him. A few days later she killed her sister. Question: What is her motive in killing her sister? (Give this some thought before you answer)

Answer to Quiz Number 1
She was hoping that the guy would appear at the funeral again. If you answered this correctly, you think like a psychopath. This was a test by a famous American Psychologist used to test if one has the same mentality as a killer. Many arrested serial killers took part in the test and answered the question correctly. If you didn't answer the question correctly good for you. Since I passed, the evidence must be anecdotal.

Number 2 Quiz  (from the May 3 issue of Fortune Magazine)
"How to Encourage Bright Ideas," by Anne Fisher, Fortune, May 3, 2004 --- http://www.fortune.com/fortune/careers/articles/0,15114,611322,00.html 

Companies run on ideas, but how do you get people to generate them? Think you're adept at making the most of your employees' brainpower? Try this little quiz. (Answer true or false to each statement.)

1. Big ideas are where the action is.
2. Managers are in the best position to come up with ideas on how to do things better.
3. Small ideas aren't worth managers' time.
4. Without rewards, employees won't offer ideas.
5. The best way to encourage innovative thinking is to promise financial rewards based on the monetary value of the ideas.
6. An informal approach to gathering ideas works best.
7. Suggestion boxes are an effective way to encourage new ideas.
8. Creativity is essential to innovation.
9. Along with good ideas come a lot of bad ones that waste everyone's time.

 

 

Answer to Quiz Number 2

If you answered true to any of the above, think again. All those notions, while popular, are also wrong, according to Alan Robinson and Dean Schroeder, a couple of B-school profs who've done creativity consulting at hundreds of companies. In a new book, Ideas Are Free (Berrett-Koehler, $24.95), Robinson and Schroeder explain why, using short, vivid case studies from dozens of companies—maybe even yours.

What's the matter, you may wonder, with offering financial incentives for great cost-cutting or revenue-boosting ideas? Well, it seems that such schemes can backfire in all sorts of ways, sometimes by encouraging fraud and sometimes just by needlessly tangling with tender egos. Consider: A worker in a European wireless company stumbled across an error in the billing software that was costing $26 million a year. He suggested a simple fix, but his boss blocked it. Why? The company's reward system would have entitled the employee to a fat check and a lot of fanfare—and what boss wants that kind of attention drawn to his mistakes? "Money is an easy, measurable way to recognize people for good ideas," notes Schroeder. "But most people offer ideas because they want to see problems get solved, and they want to be perceived as valuable members of a team. You don't need to bribe them."

The widespread belief that blockbuster ideas are the only ones that matter is costing companies a wealth of competitive advantage, the authors say. "I've had CEOs tell me, 'I don't care about the small stuff,' " says Robinson. "It's like baseball. The home-run hitters get all the glory, but if you look at the stats, it's the singles and doubles that win the most games." And don't expect those hits to come only from the "creative" team; any practical-minded, observant player will have his share of RBIs. Okay, but if you're looking to encourage those singles and doubles, why not rely on the ol' suggestion box? "Usually the managers reviewing the stuff in the box aren't close enough to the work to know whether an idea is any good or not," says Schroeder. "Smart companies set up a forum where people can discuss ideas, so you get input from everyone who's actually involved. If you value employees' ideas, why not talk with them?" Now there's a novel idea.

Maine Folklife Center (history) --- http://www.umaine.edu/folklife/ 

The mission of the Maine Folklife Center at the University of Maine is to enhance understanding of the folklife, folklore, and history of Maine and Atlantic Canada, to encourage appreciation of the diverse cultures and heritage of the region, and thereby to strengthen and enrich our communities. The Center is a valuable part of the University's research and public service programs.

Bob Jensen's bookmarks on history are at http://www.trinity.edu/rjensen/bookbob2.htm#History 

An Oldie But Goodie About CAPM --- An Innovation that Won a Nobel Prize for Its Inventor(s)

"Revisiting The Capital Asset Pricing Model," by Jonathan Burton, Dow Jones Asset Manager, May/June 1998 --- http://www.stanford.edu/%7Ewfsharpe/art/djam/djam.htm 

Modern Portfolio Theory was not yet adolescent in 1960 when William F. Sharpe, a 26-year-old researcher at the RAND Corporation, a think tank in Los Angeles, introduced himself to a fellow economist named Harry Markowitz.. Neither of them knew it then, but that casual knock on Markowitz's office door would forever change how investors valued securities.

Sharpe, then a Ph.D. candidate at the University of California, Los Angeles, needed a doctoral dissertation topic. He had read "Portfolio Selection," Markowitz's seminal work on risk and return—first published in 1952 and updated in 1959—that presented a so-called efficient frontier of optimal investment. While advocating a diversified portfolio to reduce risk, Markowitz stopped short of developing a practical means to assess how various holdings operate together, or correlate, though the question had occurred to him.

Sharpe accepted Markowitz's suggestion that he investigate Portfolio Theory as a thesis project. By connecting a portfolio to a single risk factor, he greatly simplified Markowitz's work. Sharpe has committed himself ever since to making finance more accessible to both professionals and individuals.

From this research, Sharpe independently developed a heretical notion of investment risk and reward, a sophisticated reasoning that has become known as the Capital Asset Pricing Model, or the CAPM. The CAPM rattled investment professionals in the 1960s, and its commanding importance still reverberates today. In 1990, Sharpe's role in developing the CAPM was recognized by the Nobel Prize committee. Sharpe shared the Nobel Memorial Prize in Economic Sciences that year with Markowitz and Merton Miller, the University of Chicago economist.

Every investment carries two distinct risks, the CAPM explains. One is the risk of being in the market, which Sharpe called systematic risk. This risk, later dubbed "beta," cannot be diversified away. The other—unsystematic risk—is specific to a company's fortunes. Since this uncertainty can be mitigated through appropriate diversification, Sharpe figured that a portfolio's expected return hinges solely on its beta—its relationship to the overall market. The CAPM helps measure portfolio risk and the return an investor can expect for taking that risk.

More than three decades have passed since the CAPM's introduction, and Sharpe has not stood still. A professor of finance at the Stanford University Graduate School of Business since 1970, he has crafted several financial tools that portfolio managers and individuals use routinely to better comprehend investment risk, including returns-based style analysis, which assists investors in determining whether a portfolio manager is sticking to his stated investment objective. The Sharpe ratio evaluates the level of risk a fund accepts vs. the return it delivers.

Sharpe's latest project is characteristically ambitious, combining his desire to educate a mass audience about risk with his longtime love of computers. Technology is democratizing finance, and Sharpe is helping to push this powerful revolution forward. Through Financial Engines, Sharpe and his partners will bring professional investment advice and analysis to individuals over the Internet.

What do you think of the talk that beta is dead?

The CAPM is not dead. Anyone who believes markets are so screwy that expected returns are not related to the risk of having a bad time, which is what beta represents, must have a very harsh view of reality.

"Is beta dead?" is really focused on whether or not individual stocks have higher expected returns if they have higher betas relative to the market. It would be irresponsible to assume that is not true. That doesn't mean we can confirm the data. We don't see expected returns; we see realized returns. We don't see ex-ante measures of beta; we see realized beta. What makes investments interesting and exciting is that you have lots of noise in the data. So it's hard to definitively answer these questions.

Would you approach a study of market risk differently today than you did back in the early 1960s?

It's funny how people tend to misunderstand the CAPM's academic, theoretical and scientific process. The CAPM was a very simple, very strong set of assumptions that got a nice, clean, pretty result. And then almost immediately, we all said, let's bring more complexity into it to try to get closer to the real world. People went on—myself and others—to what I call "extended" capital asset pricing models, in which expected return is a function of beta, taxes, liquidity, dividend yield, and other things people might care about.

Did the CAPM evolve? Of course. Are the results more complicated shall just expected return is a linear function of beta relative to the Standard & Poor's 500-Stock Index? Of course. But the fundamental idea remains that there's no reason to expect reward just for bearing risk. Otherwise, you'd make a lot of money in Las Vegas. If there's reward for risk, it's got to be special. There's got to be some economics behind it or else the world is a very crazy place. I don't think differently about those basic ideas at all.

What about Harry Markowitz's contribution to all of this?

Markowitz came along, and there was light. Markowitz said a portfolio has expected return and risk. Expected return is related to the expected return of the securities, but risk is more complicated. Risk is related to the risks of the individual components as well as the correlations.

That makes risk a complicated feature, and one that human beings have trouble processing. You can put estimates of risk/return correlation into a computer and find efficient portfolios. In this way, you can get more return for a given risk and less risk for a given return, and that's efficiency a la Markowitz.

Continued in the interview

Gatekeepers Didn't Get It in the 1990s and Still Don't Get It

Brooksley Born, chair of the Commodity Futures Trading Commission --- suggested that government should at least study whether some regulation might make sense, a stampede of lobbyists, members of Congress, and other regulators --- including Alan Greenspan and Robert Rubin --- ran her over, admonishing her to keep quiet.  Derivatives tightened the connections among various markets, creating enormous financial benefits and making global transacting less costly --- no one denied that.  But they also raised the prospect of a system-wide breakdown.  With each crisis, a few more dominos fell, and regulators and market participants increasingly expressed concerns about systematc risk --- a term that described a financial-market epidemic.  After Long-Term Capital collapsed, even Alan Greenspan admitted that the financial markets had been close to the brink.  
Frank Partnoy, Infectious Greed (Henry Holt and Company, 2004, Page 229)

Throughout 1994 and 1995, Brickell (the banking industry's pit bull in Washington) and Levitt (Head of the SEC) worked to protect the finance industry from new legislation.  In early 1994, lobbyists waited for investors to calm down from the shock of how much money-fund managers and corporate treasures had lost gambling on interest rates.  When legislation was introduced, Brickell fought it and Levitt gave speeches saying the financial industry should police itself.  The issues were complicated, and the public --- once angered by the various scandals ---  ultimately lost interest.  Instead of new derivatives regulation, Congress, various federal agencies, and even the Supreme Court created new legal rules that insulated Wall Street from liability and enabled financial firms to regulate themselves.   Under the influence of Levitt and Brickell, regulators essentially left the abuses of the 1990s to what Justice Cardozo had called the "morals of the market place."
Frank Partnoy, Infectious Greed (Henry Holt and Company, 2004, Page 143)

One of the world's most widely known and respected economists, Henry Kaufman is almost single-handedly responsible for founding the spectator sport known as "Fed watching." He began a 26-year career at Salomon Brothers in 1962, when he was probably the only Wall Street employee with a doctorate. There he built one of the most prestigious securities research departments and became a senior partner and vice chairman. In the last 30 years, he has been one of the most vocal critics of insufficient financial oversight and regulation, and his pronouncements and prognostications have often moved markets. We interviewed Dr. Kaufman in his New York office, where he heads his own international economic consulting firm.
Wall Street Wisdom --- http://www.amazon.com/exec/obidos/tg/feature/-/41979/102-2649781-5248131 

"Remarks by Chairman Alan Greenspan Before a conference sponsored by the Office of the Comptroller of the Currency, Washington, D.C. October 14, 1999 --- http://federalreserve.gov/boarddocs/speeches/1999/19991014.htm 

Measuring Financial Risk in the Twenty-first Century

During a financial crisis, risk aversion rises dramatically, and deliberate trading strategies are replaced by rising fear-induced disengagement. Yield spreads on relatively risky assets widen dramatically. In the more extreme manifestation, the inability to differentiate among degrees of risk drives trading strategies to ever-more-liquid instruments that permit investors to immediately reverse decisions at minimum cost should that be required. As a consequence, even among riskless assets, such as U.S. Treasury securities, liquidity premiums rise sharply as investors seek the heavily traded "on-the-run" issues--a behavior that was so evident last fall.

As I have indicated on previous occasions, history tells us that sharp reversals in confidence occur abruptly, most often with little advance notice. These reversals can be self-reinforcing processes that can compress sizable adjustments into a very short period. Panic reactions in the market are characterized by dramatic shifts in behavior that are intended to minimize short-term losses. Claims on far-distant future values are discounted to insignificance. What is so intriguing, as I noted earlier, is that this type of behavior has characterized human interaction with little appreciable change over the generations. Whether Dutch tulip bulbs or Russian equities, the market price patterns remain much the same.

We can readily describe this process, but, to date, economists have been unable to anticipate sharp reversals in confidence. Collapsing confidence is generally described as a bursting bubble, an event incontrovertibly evident only in retrospect. To anticipate a bubble about to burst requires the forecast of a plunge in the prices of assets previously set by the judgments of millions of investors, many of whom are highly knowledgeable about the prospects for the specific investments that make up our broad price indexes of stocks and other assets.

Nevertheless, if episodic recurrences of ruptured confidence are integral to the way our economy and our financial markets work now and in the future, the implications for risk measurement and risk management are significant.

Probability distributions estimated largely, or exclusively, over cycles that do not include periods of panic will underestimate the likelihood of extreme price movements because they fail to capture a secondary peak at the extreme negative tail that reflects the probability of occurrence of a panic. Furthermore, joint distributions estimated over periods that do not include panics will underestimate correlations between asset returns during panics. Under these circumstances, fear and disengagement on the part of investors holding net long positions often lead to simultaneous declines in the values of private obligations, as investors no longer realistically differentiate among degrees of risk and liquidity, and to increases in the values of riskless government securities. Consequently, the benefits of portfolio diversification will tend to be overestimated when the rare panic periods are not taken into account.

The uncertainties inherent in valuations of assets and the potential for abrupt changes in perceptions of those uncertainties clearly must be adjudged by risk managers at banks and other financial intermediaries. At a minimum, risk managers need to stress test the assumptions underlying their models and set aside somewhat higher contingency resources--reserves or capital--to cover the losses that will inevitably emerge from time to time when investors suffer a loss of confidence. These reserves will appear almost all the time to be a suboptimal use of capital. So do fire insurance premiums.

The above is only a quotation from the speech.

UNEQUAL TREATMENT:  Rotten to the Core

"Playing Favorites:  Why Alan Greenspan's Fed lets banks off easy on corporate fraud," by Ronald Fink, CFO Magazine, April 2004, pp. 46-54 --- http://www.cfo.com/article/1,5309,12866||M|886,00.html 

The module below is not in the above online version of the above article.  However, it is on Page 51 of the printed version.

UNEQUAL TREATMENT

IF THE FEDERAL RESERVE BOARD AND THE SECURITIES AND EXCHANGE Commission pursue the same agenda, why were Merrill Lynch & Co. and the Canadian Imperial Bank of Commerce (CIBC) treated so differently by the Corporate Fraud Task Force--a team with representatives from the SEC, the FBI, and the Department of Justice (DoJ) set up to prosecute perpetrators of Enron's fraud--than were Citigroup and J. P. Morgan Chase & Co.?  After all, all four banks did much the same thing.

Under settlements signed with the SEC last July, Citigroup and Chase were fined a mere $101 million (including $19 million for its actions relating to a similar fraud involving Dynegy) and $135 million, respectively, which amounts to no more than a week of either's most recent annual earnings.  And they agreed, in effect, to cease and desist from doing other structured-finance deals that mislead investors.  That contrasts sharply with the punishment meted out by the DoJ to Merrill and CIBC, each of which not only paid $80 million in fines, but also agreed to have their activities monitored by a supervising committee that reports to the DoJ.  Even more striking, CIBC agreed to exit not only the structured-finance business but also the plain-vanilla commercial--paper conduit trade for three years.  No regulatory agency involved in the settlements would comment on the cases, though the SEC's settlement with Citigroup took note of the bank's cooperation in the investigation.

But Brad S. Karp, an attorney with the New York firm Paul, Weiss, Rifkind, Wharton & Garrison LLP, suggested recently that the terms of the SEC settlement with its client, Citigroup, reflected a lack of knowledge or intent on the bank's part.  As Karp noted more than once at a February conference on legal issues and compliance facing bond-market participants, the SEC's settlement with Citigroup was ex scienter, a Latin legal phrase meaning "without knowledge."

However, the SEC's administrative order to Citigroup cited at least 13 instances where the bank was anything but in the dark about its involvement in Enron's fraud.

As Richard H. Walker, former director of the SEC's enforcement division and now general counsel of Deutsche Bank's Corporate and Investment Bank, puts it, all the banks involved in Enron's fraud "had knowledge" of it.  Yet Walker isn't surprised by their disparate treatment at the hands of regulators.  "The SEC does things its way," he says, "and the Fed does them another."  *Ronald Fink and Tim Reason

Bob Jensen's threads on "Rotten to the Core" are at http://www.trinity.edu/rjensen/FraudRotten.htm 

Bob Jensen's threads on Derivative Financial Instruments fraud are at http://www.trinity.edu/rjensen/FraudRotten.htm#DerivativesFrauds 

"Continuing Dangers of Disinformation in Corporate Accounting Reports," by Edward J. Kane, NBER Working Paper No. W9634 --- http://papers.ssrn.com/sol3/papers.cfm?abstract_id=396694# 
 --- 

 

Abstract: Insiders can artificially deflect the market prices of financial instruments from their full-information or 'inside value' by issuing deceptive accounting reports. Incentive support for disinformational activity comes through forms of compensation that allow corporate insiders to profit extravagantly from temporary boosts in a firm's accounting condition or performance. In principle, outside auditing firms and other watchdog institutions help outside investors to identify and ignore disinformation. In practice, accountants can and do earn substantial profits from credentialling loophole-ridden measurement principles that conceal adverse developments from outside stakeholders. Although the Sarbanes-Oxley Act now requires top corporate officials to affirm the essential economic accuracy of any data their firms publish, officials of outside auditing firms are not obliged to express reservations they may have about the fundamental accuracy of the reports they audit. This asymmetry in obligations permits auditing firms to continue to be compensated for knowingly and willfully certifying valuation and itemization rules that generate misleading reports without fully exposing themselves to penalties their clients face for hiding adverse information. It is ironic that what are called accounting 'ethics' fail to embrace the profession's common-law duty of assuring the economic meaningfulness of the statements that clients pay it to endorse.

From techLEARNING News on May 4, 2004

HOT TOPIC: Technology and Cheating

Seventy percent of the 12- to 17-year-olds who participated in an ABCNEWS Primetime poll say at least some of their peers cheat on tests, with roughly 33% admitting that they themselves have cheated. Two in three students say that at least some students have handed in homework or papers copied from another student or downloaded from the Internet. Technology appears to make cheating easier. Take our InstantPoll: http://news.techlearning.com/cgi-bin4/DM/y/egsJ0FHYLa0E2V0B7Kk0AV

to tell us what you think about technology and cheating. Read more about the Primetime poll and news special at http://news.techlearning.com/cgi-bin4/DM/y/egsJ0FHYLa0E2V0CV820Al

Bob Jensen's threads on cheating are at http://www.trinity.edu/rjensen/plagiarism.htm 

From techLEARNING News on May 4, 2004

Laptops Replace Textbooks

The Forney (TX) Independent School District is joining the ranks of schools equipping students with laptop computers - with a slight twist. In the fall, every fifth and sixth grader at Johnson Elementary School will receive a laptop computer loaded with digital versions of the textbooks used throughout the district. Read more to see if you might want to use digital textbooks too.

Source: USA Today http://news.techlearning.com/cgi-bin4/DM/y/egsJ0FHYLa0E2V0CV8x0Av

"The Next Chapter In Electronic Books," by Arik Hesseldahl, Forbes, April 26, 2004 --- http://www.forbes.com/personaltech/2004/04/26/cx_ah_0426tentech.html 

The electronic book is one of those technological concepts from the 1990s that seems somewhat of a leftover. It's never really taken off the way it potentially could: It makes so much sense.

Books--especially the great beefy ones worth reading--are bulky. Their size makes them inconvenient. And with all this electronic equipment we lug around--laptops, personal digital assistants and the like--there's no reason they couldn't be used to carry the text of books.

 

Last month, Sony (nyse: SNE - news - people ) and Royal Philips Electronics (nyse: PHG - news - people ) teamed with privately held E Ink to announce the Librié, which is set to go on sale in Japan this month. It looks a bit like a PDA but its display uses E Ink's electronic ink technology that it says offers a "paper-like" reading experience comparable to newsprint.

Getting the display's appearance just right has been a key problem in the evolution of the e-book concept. Paper is ideal for most eyes, electronic displays simply aren't. Paper requires no technical knowledge; electronic devices invariably include instruction manuals--printed on paper.

E Ink's electronic paper display is reflective and can be read in the sunlight and in conditions of dim light. It presents a resolution of 170 pixels per inch, similar to newspaper. The gadget uses four AAA batteries but only uses power when a page is turned and the image presented on the display changes. The companies say a user can turn 10,000 pages before those batteries have to be replaced.

The device itself is about the size of a paperback book and can store the contents of about 500 books at a time. And therein is the basic strength of the e-book. While information is increasingly available in digitized form, we're still using a lot of paper, still buying books and still carrying them around. Cramming all our reading into a light electronic device that is easy on the eyes makes sense for the reader as long as it's easy to use. If nothing else, it would reduce the size of carry-on luggage on long flights.

Last year, BarnesandNoble.com (nasdaq: BNBN - news - people ) stopped selling e-books for download from its Web site amid underwhelming sales. Also last year, Gemstar (nasdaq: GMST - news - people ) stopped selling its Softbook e-book devices and discontinued sales of e-book content.

If the e-book is going to be a hit, a few things have to happen. First there has to be a good selection of material to read, and, for publishers, that means taking the risk that their best titles may wind up being distributed for free on the Internet.

PDA users are already downloading books. Palmsource (nasdaq: PSRC - news - people ) sells e-books for use on handheld devices running the Palm operating system. Bob Woodward's Plan of Attack is available for download for $14.99. Microsoft (nasdaq: MSFT - news - people ) also sells e-books for its Microsoft Reader software on PDAs running Windows Mobile. But last year the security on Microsoft's software was cracked.

The recording industry has struggled with this problem in ways both overt and subtle: It has sued batches of pirate downloaders but also circulated its own falsely labeled music files intended to frustrate and dissuade would-be pirates.

The right device--like an iPod from Apple Computer (nasdaq: AAPL - news - people )--coupled with a good music-download service--like Apple's iTunes Music Store--are proving to be a success. And while Apple has lately been chasing the creators of a software program called Playfair--which has defeated Apple's digital rights management scheme, dubbed Fairplay, and limits how music purchased from iTunes can be used--publishers learn a lot from the iTunes experience.

If Sony's new reading device turns out to be the iPod of electronic readers, then publishers will have to develop the reader's equivalent of iTunes.

Bob Jensen's threads on electronic books are at http://www.trinity.edu/rjensen/ebooks.htm 

How do instructors give "open-book" exams without giving students full access to other computer files and even the wireless Web?

This is a mixed blessing for students.  It makes storage, transport, and searching more convenient, but it is difficult to read page after page on the screen.  And printing the pages is expensive.  As pointed out in the article, there is not a used book market.

"College Books Move Online," by Charles Goldsmith and Jeffrey A. Trachtenberg, The Wall Street Journal, April 23, 2004, Page B3 --- http://online.wsj.com/article/0,,SB108266691905691021,00.html?mod=technology%5Fmain%5Fwhats%5Fnews 

Faced with mounting criticism that the cost of new textbooks is too high, and vexed by students who buy cheaper used texts, Pearson PLC is making 300 of its most popular U.S. college textbooks available in a Web-based format for half the price of the print versions.

Beginning this autumn, specialized texts such as "Educational Research" and "Social Psychology," which normally retail in hardback for about $100, can for the first time be bought online for about $50.

"A lot of students have affordability problems," says Will Ethridge, president of Pearson's college-text unit.

Such price resistance poses a threat to the $3.4 billion-a-year U.S. college-textbook industry -- as students either buy used versions, seek cut-rate deals through foreign Web sites or do without.

Pearson's new strategy, if successful, will transform the college-textbook industry, which has been under attack from parents and students stunned by the rising cost of higher education. Complaints about high prices have become so bad that at a recent annual meeting, the American Association of Publishers handed out a pamphlet justifying the industry's prices, and the issue has become a heated topic at educational conferences.

The prospect of online textbooks would seem to raise piracy concerns, but Pearson, which is based in the United Kingdom, is confident that the system is secure.

"There is a sophisticated security protocol developed two years ago that protects the intellectual content from file sharing or access by unauthorized subscribers," says Wendy Spiegel, a spokeswoman for Pearson Education, based in New York. "This is not downloadable. It is a Web-based book with the full function of the Web. You can print it section by section, but not at one sitting. It won't continuously print for you. We envision that students will print out the parts of the chapter that they need that day. If you are a crook, you could duplicate a printed book much easier."

Those who have seen early prototypes of the online texts describe them as attractive and intriguing, and note that publishers have a significant incentive to see that Web-formatted books go mainstream. The traditional four-color hardcover book already is loaded up with related CD-ROMs and links to additional Web sites -- thus boosting costs.

Web-based books may well provide the solution. By transferring content to the Internet, publishers will be able to slash inventory costs, eliminate returns, reduce shipping expenses, and perhaps put a significant dent in the used-textbook business. Further, if they are able to pass along those savings, they should be able to lure back budget-minded students.

Pearson last year generated 19% of its revenue and 30% of its operating profit from college publishing. But executives have expressed concern that price resistance poses a future pothole. By the company's research, about a third of students say they don't buy all of their required texts, while half say they are likely to buy a lower-cost version online assuming a savings of at least $25.

Although textbook prices have been rising 2% to 3% a year, well below college-tuition increases, texts are a conspicuous billboard of college inflation, given that students pay for them directly. According to the College Board, the average tuition and fees at a four-year private U.S. college was $19,710 in the 2003-2004 school year, up 6% from the previous year.

A spokeswoman for the National Association of College Stores, representing more than 3,000 college retailers, says the group didn't expect online versions to rapidly displace print editions. "Most students in higher education still prefer a physical textbook" given that they grew up on such texts since childhood, she says.

One book retailer suggests that interactive books won't represent a significant price break for students, who usually sell their books at the end of the semester.

Mark Oppegard, chief executive of closely held Nebraska Book Co., which sells used and new college textbooks, notes that a student who bought a $100 new textbook could sell it back for $50 at the end of the semester. A student who bought a used book for $75 could get $37.50 for it. "The interactive books don't represent a real savings," he says. "Let's see how well they are received."

Publishing-industry officials say educational publishers typically make between $15 and $20 profit from a book with a retail list price of $100, after subtracting costs for author royalties, printing, distribution and retailers' take. In a goodwill gesture to college bookstores, Pearson said it would offer retailers a cut of revenue from online sales if stores direct students to the publisher's Web site.

Continued in article

April 25, 2004 reply from Laurie Padgett, New Piper [padgett8@BELLSOUTH.NET] 

I have to say that I have both experienced the "memorize" for a test method in my undergraduate studies and the "open book" test method for graduate studies. If I were asked which method was better I would have to most definitely say the open book method. Yes, studying for a test is important but I really feel that cramming for a test to "memorize" material really did nothing and half the time I did not remember it. The open book method was a whole different approach. We had 4 to 7 days to complete the test which resulted in 7 to 10 pages of typed responses to open ended questions. It made me think, read, and learn much more than a standard regular exam. There is no comparison. I strongly feel that the open book method offered more learning.

Laurie

From Syllabus News on April 27, 2004

Pearson, O’Reilly, Stake Out Digital Textbook Market

Two educational publishing leaders have formed a joint venture to introduce to the college text book-buying market this fall a series of digital textbooks they claim will save students half off print prices.

Educational publisher Pearson Education and O'Reilly Media, Inc., famous for its computer reference titles, formed Safari Books Online. Under its SafariX Textbooks Online program, the firm will offer 300 SafariX WebBooks this year. The company said the WebBooks will offer the benefits of the Web, allowing students to print pages, make annotations, take notes, search the full text, and add bookmarks to organize their study, anywhere they have browser access.

Pearson said its decision to offer a WebBook alternative to printed texts is supported by research into the changing educational needs of college students, faculty and authors, as well as a recognition of their concerns about the rising cost of a college education. In preliminary findings of a Student Monitor survey conducted by the company, half of all the students said they are likely to purchase a low cost online text, assuming a savings of $25. Of those students surveyed, 31 percent said that they do not buy 100 percent of their required texts.

Bob Jensen's threads on electronic books are at http://www.trinity.edu/rjensen/ebooks.htm 

Problems in Marketing Electronic Books

May 4, 2002 message from TXeBookAuthor@aol.com

Dear Mr. Jensen:

I received a copy of one of your articles about eBooks from a friend who works at Trinity University. It was an excellent presentation and very insightful in all aspects except marketing. I thought perhaps you might want to hear a real world perspective from someone who has been through the eBook "wars" almost since their inception.

I am a Time Warner iPicturebooks author. My fantasy series, beginning with episode one, THE SCYTHIAN STONE, has done quite well both with mass marketers like Amazon.com (where it is currently ranked in the 3000 range) and in foreign markets like Mobipocket.com (#7 in their European fantasy eBook rankings). Sales figures are, by contract, confidential, but I can say that this title has done well despite the ups and downs eBooks have gone through over the last five years. During that time, I have learned some very important lessons about how to market electronic titles. I thought I would share my perspective with you and your readers.

Most eBook articles I have read forget to consider the most important aspect of this burgeoning concept--the MARKET for eBooks. Young readers are the market for them, as I see it, thus any eBook must be produced with that demographic in mind. Kids need colorful, fast reads with lively action and lots of character driven dialogue. Kids WANT to read, but most older books are written for the adult readers who have $24 to spend on a printed book. Most potential eBook customers are young, savvy Internet buyers who have their parents' credit card or $10 in their Paypal account or an Amazon coupon to spend. Price point thus becomes a huge issue along with this demographic. On the web, if you keep it cheap, kids will seek--that's where eBooks have their greatest advantage.

As for marketing to the rest of the web masses, another advantage is that you can post a new title for $8 retail and if it doesn't sell well, you can lower it by a dollar a month until you find its optimum price point. With the far lower cost of production and distribution per unit, you can market an eBook for as little as $1.00 if necessary to move it and there is never a problem with returns. Yes, they can be illegally copied. But then, is that really a bad thing for a kid to share a book with a friend or two who might BUY the next one in your series?

Sharing, in a way, actually builds a market that might not have been there before. I know. I've seen it firsthand. Emails I receive from customers attest to the fact that kids often send a copy of my first episode to a friend who is now waiting anxiously for the second book in the series so they can BUY a copy for themselves. These are readers I might never have attracted, if not for the lending effect. I'm sure, in the short run, this has cost me thousands of dollars in lost sales, but I prefer to look at this as a form of flattery, not thievery.

From my experience as a Time Warner eBook author, the great untapped market for electronic books is the 8 to 18 year olds who have Internet access from pl aces like Bangladesh, Bali, and Botswana where there are far fewer bookstores, limited copies of English language books and an exchange rate that makes the dollar king. The scary thing is, nobody yet knows the true size of this arena or where it will take eBooks in the future. I'm betting that with a good handheld reading device made available for under $50, within the next five years eBooks will become a staple addition to the entertainment and educational reading world.

Thank you for your article and your time. I look forward to your reply.

Jon Baxley
A Time Warner iPicturebooks
Author THE SCYTHIAN STONE series

http://www.amazon.com/exec/obidos/ASIN/B00005R217

http://hometown.aol.com/wasp1946/

Bob Jensen's threads on electronic books are at http://www.trinity.edu/rjensen/ebooks.htm 

From Syllabus News on May 4, 2004

Books-in-Print publisher R.R. Bowker said its Web site, ulrichsWeb.com, would offer users an option to search for any publication that is available via open access. The firm called open access publishing “a fast-growing trend that brings academic and scholarly research - much of it peer-reviewed - directly to anyone with an Internet connection.” Open access journals from SPARC, PLoS, Biomed Central, the Directory of Open Access Journals, and other sources will now be included in ulrichsWeb.com.

Bowker will create an "Open Access" icon that displays on the search results page to alert users that a particular publication is available via open access. To connect users to these new resources, Bowker has added a "Click for Open Access" button on full citation screens that gives users one-click access to that publication's full-text content on the Web.

The main link is at http://www.bowker.com/bowkerWeb/ 

This is a Great Article on How We Can All Author and Use XBRL:  The Future of Financial Reporting!
It is filled with references and links to applications.

"Tap Into XBRL’s Power the Easy Way," by Jeffrey W. Naumann, The Journal of Accountancy, May 2004, pp. 32-45 --- http://www.aicpa.org/pubs/jofa/may2004/naumann.htm  

XBRL—a specialized form of XML (extensible markup language)—is becoming more familiar to creators and users of electronic financial statements, but few people have actual hands-on experience with it. So, to bring XBRL to a wider business audience, Microsoft Corp. has released the Microsoft Office Tool for XBRL—a free, but important, enhancement—for the 2003 versions of Excel and Word. Along with the AICPA and more than 200 other organizations, Microsoft is a member of XBRL International Inc. (www.xbrl.org), a nonprofit group that promotes use of the extensible business reporting language to improve financial reporting.

This article explains how to obtain, install and use the tool to create an XBRL-compliant Microsoft Office file. It also explains what XBRL is and why it’s important to CPAs, their clients and employers (see “XBRL: A Business Reporting Standard” and “Why XBRL Matters”).

XBRL: A Business Reporting Standard To appreciate the tool’s usefulness, it’s important to have some understanding of XBRL, which is the XML-based standard for identifying—and improving the accuracy and electronic communication of—complex financial information. XBRL is a computer programming add-on that tags each segment of business information with an identification code or marker. XBRL International Inc., a nonprofit global consortium of more than 200 companies, associations—including the AICPA—and government agencies, has developed XBRL as a royalty-free, open software specification (www.xbrl.org/whatisxbrl). Version 2.1—the most current specification, or full description, of XBRL—is available for review and comment at the organization’s Web site, which also contains information on the different roles XBRL can play in various business contexts.

Users can download the enhancement from the Microsoft Web site (www.microsoft.com/office/solutions/xbrl) at no charge and easily install it. Immediately afterward, they can create or use worksheets and documents that employ XBRL to speed data input, ensure accuracy, eliminate ambiguity by specifying the precise nature of each data element and thus simplify the exchange of financial information. The tool benefits not just CPAs but all participants in the financial reporting process, including reporting entities, regulators, financial institutions, rating agencies and individual and institutional investors, and improves data sharing among the various systems—financial, tax and other—they use.

An example of the growing support for XBRL was the 10-year, $39 million contract the Federal Deposit Insurance Corp. awarded in 2003 to Unisys Corp., which, with the assistance of PricewaterhouseCoopers, Microsoft Corp., EDGAR Online Inc. and other technology companies, will use XBRL and other tools to modernize and streamline federal bank regulators’ collection, processing and distribution of banks’ quarterly financial reports.

Why XBRL Matters There are several reasons why CPAs—who often must follow relatively inflexible processes—could benefit from a new means of working with financial data. Among these motivations are their need for greater Accuracy. Imprecise, inconsistent and unreliable values are common results of transferring data in ambiguous formats, such as those in which values are separated by commas or other characters. Because XBRL transcends the limitations of such data formats, it eliminates errors that occur during data re-entry and it minimizes the risk of losing “metadata,” or verbal descriptions of individual data elements. Efficiency. Because XBRL data contained in one document or system can be easily shared with another without being rekeyed, exchanging information is swift, easy and error-free, resulting in immediate productivity improvements for all involved parties. In addition, XBRL can be used with software and data on any computer operating system or hardware equipment. Transparency. Due to the consistency of their formatting and identification, XBRL data do not vary from the time and place of their creation to their eventual destination and use—whether it be public record or another purpose. XBRL therefore can help CPAs play a strong role in helping public companies satisfy the strict financial reporting obligations the Sarbanes-Oxley Act of 2002 has imposed on them. Section 409 of the act requires companies to “disclose to the public on a rapid and current basis…information concerning material changes in the financial condition or operations of the issuer.” CPAs can provide a valuable service to their clients or employers by helping them implement XBRL-based reporting capabilities that automatically facilitate compliance by aggregating such information for review and distribution.

 

BE A CREATOR, A USER OR BOTH 
The Microsoft Office Tool for XBRL enables users to both create and use documents formatted in XBRL. Many participants in the financial reporting process likely will employ one of these functions more often than the other. For example, producers of quarterly earnings reports will benefit from the tool’s creation functions, such as those used to characterize earnings data by “tagging” them with a contextual format—known as a taxonomy—that corresponds to a series of principles or definitions, such as U.S. GAAP. On the other hand, analysts of existing financial information will find it advantageous to use the tool to, for example, compare several of a company’s earnings statements. Of course, both capabilities are available to everyone using the tool.

Exhibit 1 depicts the current way—without XBRL—electronic financial information flows from an organization’s finance department to regulators, analysts, investors and other interested parties. Companies first submit plain-text financial reports to the SEC. They then convert those documents’ data into hypertext markup language (HTML) format and post them on the Web for public viewing. Finally, companies reconvert those data into various formats that enable investors and financial analysts to scrutinize key performance indicators and other criteria. This fragmented process is both labor-intensive and error-prone.

Continued at http://www.aicpa.org/pubs/jofa/may2004/naumann.htm 

May 4, 2004 reply from Saeed Roohani [sroohani@COX.NET] 

Bob,

This is very timely and informative article, XBRL is moving towards implementation, slowly but surely. A few years ago, I remember Liv Waston at EDGAR Online saying that universal product code (UPC) standard, technology and infrastructure were all available almost 30 years PRIOR to UPC become a standard at local stores. As of now XBRL projects are being implemented by regulators in U.S, the U.K., Japan, Australia, South Africa, and Netherlands. Neal Hannon will demonstrate the new MS XBRL Tool discussed in the article, hands-on, at Bryant College XBRL Conference - May 27 (afternoon) - May 28 (Friday Morning) in Rhode Island.

Also, I would like to take advantage of the opportunity to remind interested individuals about the conference, http://web.bryant.edu/~xbrl/index.html . Participants in this conference are faculty, XBRL tool vendors, and firms interested in XBRL.

Saeed Roohani

Bob Jensen's threads on XBRL are at http://www.trinity.edu/rjensen/XBRLandOLAP.htm#TimelineXBRL 

May 3, 2004 message from Neal Hannon [nhannon@COX.NET] 

This just in from Microsoft.  I have the tool on my PC and will be writing a short tutorial for upcoming seminars in Mass, RI, Florida and Chicago over the next few months. 

The use of XBRL is taking off in three areas.  First, governmental regulators around the globe are looking to the business reporting markup language.  Projects are underway in the US, the UK, Japan, Australia, South Africa, and the Netherlands.  Projects are proposed for Canada, South Africa, Singapore, Korea, Germany and a few others.  Second, XBRL is very prominent in the adoption of International Accounting Standards, scheduled for over 90 countries in 2005.  XBRL has the power to automatically translate language and currency.  Third, internal projects are underway to convert corporate data into XML to feed business performance reporting into balanced scorecards and strategy maps.  See the web sites of Cognos.com and ipedo.com for verification.  In addition, the 4th quarter will see mandatory XBRL reporting for banks sending Call Report information to the FDIC.  (for more information on this project, visit http://www.ffiec.gov/find/ for more information.

 

In short, XBRL will soon be a major part of our thinking about all financial reporting, both externally and internally

for companies around the globe.

 

See http://nerc.imanet.org for information on the May 21 seminar in Worcester.

 

Neal J. Hannon, CMA 

XBRL Editor, Strategic Finance Magazine

University of Hartford   (860) 768-5810

(401) 769-3802 (Home Office)

 

---

From: Rob Blake [mailto:robblake@microsoft.com] 
Sent: Monday, May 03, 2004 3:33 PM
To: xbrl-int@yahoogroups.com; XBRL-US@yahoogroups.com
Cc: Jon Clemens
Subject: [XBRL-US] Microsoft Office Tool for XBRL Prototype Now Available!

I’m pleased to announce the availability of the Microsoft Office Tool for XBRL Prototype, an update to the XBR  add-in for Microsoft Office that we released to the XBRL community in November 2003 at the XBRL International Conference in Seattle . The primary site for learning more about the application can be found at http://www.microsoft.com/office/solutions/xbrl/default.mspx. This site also contains instructions on how to access and download the application, which can be found freely available on Microsoft’s BetaPlace site at http://beta.microsoft.com.

The Microsoft Office Tool for XBRL can be used with Microsoft Office Professional Edition 2003, specifically Microsoft Office Word 2003 and Microsoft Office Excel 2003, to create and analyze documents in XBRL format. It builds upon the November release by adding new and enhanced functionality including more complete Context support as well as new support for label roles and multiple languages.  The prototype is an application that Microsoft hopes will facilitate feedback from customers and partners about the XBRL needs in the market.  Upon hearing that feedback, Microsoft will make a determination on how best to deliver any follow-on to the prototype to most closely match the market’s needs.

Any questions or comments on the Microsoft Office Tool for XBRL should be directed to Jon Clemens (jclemens@microsoft.com), Planning Manager for the Microsoft Office Tool for XBRL, and me.  Thanks in advance for your interest in the software, and I look forward to seeing more than a few of you next week in New Zealand .
Cheers!

Rob Blake
Director, Emerging Technologies
Microsoft Corporation

Bob Jensen's threads on XBRL are at http://www.trinity.edu/rjensen/XBRLandOLAP.htm#TimelineXBRL 

Dan Gode (NYU) sent me the following link.

"XBRL: A case study in complexity A noble attempt to help expose financial dealings via XML asks too much of developers," by Jon Udell, InforWorld, April 30, 2004 --- http://www.infoworld.com/article/04/04/30/18OPstrategic_1.html 

Accounting isn't my strong suit. So I read Following the Moneyto learn what a team of financial academicians think really happened with Enron and WorldCom, and what should be done about it.

Subtitled TheEnron Failure and the State of Corporate Disclosure,the book introduced me to a realm of standards wonkery that's way outside my comfort zone. Will the Financial Accounting Standards Board (FASB) merge U.S. GAAP (Generally Accepted Accounting Principles) with the International Accounting Standards Board's (IASB's) IFRS (International Financial Reporting Standards), or will IFRS instead supersede GAAP? Beats me. Web services has nothing on these guys when it comes to slinging acronyms.

I reached more familiar ground when I read the authors’ recommendation that XBRL(eXtensible Business Reporting Language) should play a crucial role in future reform. Their proposed regulatory initiatives include “encouraging, possibly requiring, public firms to file their financial statements, prospectuses, and other relevant information in XBRL formats in order to accelerate the use of XBRL by companies, investors, and analysts.”

Speedier information flow, transparency — what’s not to like? I wonder, though, if the authors have actually read the 151-page XBRL spec. Here's a taste:

"4.10 Equality predicates relevant to detecting duplicate items and tuples. There are several different senses that are relevant to detection of duplicates in XBRL instances: Identical, Structure equal (s-equal), Parent equal (p-equal), Value equal (v-equal), [XPath]-equal (x-equal), Context equal (c-equal) and Unit equal (u-equal). These different equality predicates are polymorphic and formally defined in a recursive fashion. They are all symmetric predicates, i.e. the result of X (predicate) Y = the result of Y (predicate) X."

Uh-oh. I thought BPEL4WS(Business Process Execution Language for Web Services) was a brain exploder, but it's a walk in the park compared to this stuff. The XBRL spec describes how the parts of an XBRL instance interrelate, using state-of-the-art XML technologies such as XLink and XPointer. And it talks at length about the syntax and semantics of “taxonomies” that abstractly define chunks of financial reports. No sign of any actual financial data, though. And the link to a sample page at xbrl.org, returned a “404 Not Found.” I’m not surprised. The poor bloke whose job it was to produce that sample must have suffered a polymorphic recursive brain meltdown.

This isn’t what the authors had in mind when they endorsed XBRL. They’re right to point out that financial data published on the Web today in HTML and PDF formats resists transformation and analysis. And they’re right to say that “XML permits the tagging of individual data elements, and thus allows the users to rearrange or manipulate them.” But you can’t get from the Model T of today’s HTML and PDF reports to the intergalactic cruiser of XBRL in one turn of the evolutionary crank.

Consider RSS. In 1999 I published my first RSS feed. It was (and is) an XML format so simple that I could (and sometimes still do) write it by hand. Five years later, RSS is wildly popular, as XML formats go. But hordes of people who should be using it have yet to figure it out. If the RSS spec looked like the XBRL spec, nobody ever would — except vendors who regard Sarbanes-Oxley compliance as a growth industry. If we really want transparent data flow, let’s keep it simple.

May 8, 2004 reply from Roger Debreceny [roger@DEBRECENY.COM] 
Accounting data is complex -- and needs a complex standard (specification) or other guidance (eg FRTA) to represent it. But users will be hidden from the complexity by the tools. Don't expect to see "accounting data" explicitly stated in the XBRL spec .. it is the eXtensible Business Reporting Language that is designed to allow the representation of information including, but not limited to, accounting data.

It is always easy to be critical of standards .. But the test of standards is not the complexity of the standards themselves, but the ability of the standards to be turned into useable products. Here is part of ETSI TS 151 Digital cellular telecommunications system (Phase 2+); General Packet Radio Service (GPRS); Service description; Stage 2 (downloaded at random)

 

6.3.1 Administration of the SGSN - MSC/VLR Association

The SGSN - MSC/VLR association is created at the following occasions:

 

- Combined IMSI / GPRS attach.

- GPRS attach when the MS is already IMSI-attached.

- Combined RA / LA update when the MS performs IMSI attach and is already GPRS-attached.

 

Combined RA / LA update when an IMSI and GPRS-attached MS changes from an area of network operation mode II or III to an area of network operation mode I.

The association is initiated by the SGSN. The SGSN creates an association by sending a BSSAP+ message concerning a particular MS to the VLR. To get the VLR number, the SGSN translates the current RAI to a VLR number via a translation table. During a CS connection, an MS in class-B mode of operation cannot perform GPRS attach nor routeing area updates, only MSs in class-A mode of operation can perform these procedures. If a GPRS attach was made during a CS connection, the association shall be initiated by a combined RA / LA update after the CS connection has been released.

 

The association is updated on the following occasions:

- When an MS changes VLR.

- When an MS changes SGSN.

 

The association is not updated during a CS connection.

 

When the MS is in idle mode (see GSM 03.22), the association is updated with the combined RA / LA updates procedure.

 

In relation with a CS connection, the association is managed in the following way:

 

MS in class-A mode of operation:

An MS in class-A mode of operation makes RA updates but no combined RA / LA updates during the CS connection. In

the case when the MS changes SGSN, the SGSN (according to normal RA update procedures, see subclause "Inter SGSN Routeing Area Update") updates the HLR and the GGSN, but not the VLR, about the new SGSN number.

 

In the case when the MS changes MSC during the CS connection, the subscriber data still remains in the old VLR until the CS connection is released and a combined RA / LA update or LA update is made. The association is also not updated during the CS connection.

 

After the CS connection has been released, a combined RA / LA update is performed (if there has been a change of RA, or if a GPRS attach was performed and the new cell indicates network operation mode I), and the association is updated according to combined RA / LA update procedures, see subclause "Combined RA / LA Update Procedure". If the new cell indicates network operation mode II or III, then the MS performs an LA update.

 

I am pretty confident that the number of AECM subscribers that can provide a clear (or even unclear <g>) interpretation of this part of TS 151 or any other part of the standard is a null set. But I can buy a phone in Singapore that will effortlessly stream GRPS data and do that seamlessly in seventy or more countries world wide. The technology is complex -- the interface is not. 

 

Accounting data is complex -- and needs a complex standard (specification) or other guidance (eg FRTA) to represent it. But users will be hidden from the complexity by the tools. Don't expect to see "accounting data" explicitly stated in the XBRL spec .. it is the eXtensible Business Reporting Language that is designed to allow the representation of information including, but not limited to, accounting data.

 

Mr. Udell is just plain wrong in his analysis.

 

Roger 

May 8, 2004 reply from Paul Polinski [pwp3@CASE.EDU] 

Roger: I'm not sure that the argument is that simple. There are two transparencies at issue here - accounting transparency (which seeks to make more plentiful and representative disclosures to stakeholders) and data/information (d/i) transparency (which seeks to hide the complexity of the information system storing data and generating information, for the ease of use of end users).

Your point is well taken that in order to provide accounting transparency, the financial reporting system and its components must necessarily be complex. However, writing a standard in a way that fully reflects this complexity, and defending it in the name of data/information transparency, may not be the best way to win converts and encourage adoption.

The Internet and its related apps have been designed to largely incorporate d/i transparency for users. With this transparency indeed has come ease of use for many tasks. However, it has also created a lot of mistrust of the Internet and various apps because users are forced to, relatively blindly, rely on the programming skills and intentions of individuals and corporations. Some choose not to trust at all, and many others have found their trust misplaced, sometimes by presumably reputable individuals or companies. The latest controversy with electronic voting machines serves as a timely example.

I think the point the author wanted to make was that it appeared that the complexity of the standard appeared to 'fly in the face' of the notion of accounting transparency. Financial statement users, not being able to grasp in any way the reporting mechanism being used, would be put in yet another position of 'blind trust' of the developers of the standard and interfaces (who are adding another layer or two to the reporting process). They would have to trust that the data and information are tagged reliably and properly, and that the back-end applications that provide context for the numbers for analysis are also reliable. I'm not sure that this is an 'easy sell.'

Bob Jensen's threads on XBRL are at http://www.trinity.edu/rjensen/XBRLandOLAP.htm#TimelineXBRL 

TheEnron Failure and the State of Corporate Disclosure, by Robert E. Litan, The Brookings Institute, April 2002 --- http://www.brookings.edu/comm/policybriefs/pb97.htm 

The failure of the Houston-based Enron Corporation poses some of the toughest policy challenges of any financial collapse in recent memory. The current situation is not comparable to the savings and loan crisis or the banking disasters of the 1980s, which were nearly a decade in the making before Congress finally took action. By comparison, the disclosure problems that have surfaced in the Enron case have been apparent only in the past several years, especially the growing numbers of earnings restatements and the rising concern about "earnings management" expressed by the Securities and Exchange Commission (SEC) and others. More importantly, whereas in the savings and loan and banking cases there were clear policy options that Congress could implement (notably the system of prompt corrective action for enforcing capital standards), there are very few options in the current corporate crises, and there appears to be only a limited consensus on which ones ought to be adopted.

However, there are several steps lawmakers can take to ensure that the public is not left in the dark about a company's financial health. In addition to continuing its extensive fact-finding mission on what happened at Enron, Congress should revisit rules on standards-setting in the accounting industry, tighten up enforcement and monitoring of accounting practices of both firms and their auditors, and make sure that any future laws give broad guidance to the SEC to allow for future developments in a rapidly changing corporate environment.

 
POLICY BRIEF #97

Improving the disclosure system is a complex task with few clear answers. According to former Federal Reserve Board Chairman Paul Volcker, now chairman of the trustees of the International Accounting Standards Board, the growing complexities of business-reflected in a dizzying array of new financial instruments and corporate organizational structures-pose increasingly difficult challenges for any system of disclosure. The fact is that for many kinds of transactions, there are no single "right" answers, which helps explain why the Financial Accounting Standards Board (FASB) often takes so long to set new standards or refine earlier ones, and why International Accounting Standards are framed in a more generic fashion. The lack of specifics allows accountants greater discretion in deciding how to justify various transactions.

As it considers how to improve the setting and enforcement of disclosure standards, Congress should be mindful that markets and regulators have already engaged in extensive "self-correction" in the wake of the Enron affair. A number of companies (including General Electric, America's largest in terms of market capitalization) already have delivered more disclosure; corporate boards, and their audit committees in particular, are paying closer attention to accounting issues and the choice of auditors; accounting firms have tightened up on their audits; financial analysts and credit rating agencies, chastened by their past performance, have become more discriminating; and the SEC is apparently doing the best it can with limited resources to scrutinize corporate financial statements for possible problems.

What Should Congress Do?

So, is there any room left for Congress to act? One reason for it to do so is to ensure that market-driven improvements in disclosure remain in place after the furor over Enron dies down. Another reason for congressional action is that the Enron failure, coupled with several major accounting misadventures in earlier years, have exposed weaknesses in the disclosure system that call for correction.

But Congress should also tread carefully. Markets move fast, legislation does not. What gets adopted today will live for many tomorrows-until something new happens that motivates new legislation. For this reason, any legislation that Congress adopts should give broad guidance to the SEC, and in this way allow for significant flexibility for policy to adapt to constantly changing circumstances.

Accounting Standards

The immediate accounting problem exposed by Enron's failure was the weak consolidation rule prescribed for highly leveraged "special purpose entities" (SPEs), or partnerships that were formed to carry out various projects whose assets and liabilities were not shown in Enron's balance sheet. Enron failed in part because of losses arising out of the many SPEs that it had created.

The rule for some time has been that sponsors of an SPE need not consolidate it so long as outside investors contribute a majority of its capital and that investment constitutes at least 3 percent of the SPE's assets. Leaving aside the fact that Enron appears to have misled its auditor, Andersen, about the amount of outside investments in SPEs (thus wrongfully avoiding consolidation), it is now clear that the 3 percent test was much too weak. FASB has since rightly raised the threshold to 10 percent.

The more difficult, larger issue relates to FASB's standard-setting process itself. FASB is slow to set standards-although the incredibly quick revision to the SPE rule, announced in March, is a notable exception-and when it does, it is often subject to political interference. Changing the funding of FASB from its current practice of accepting voluntary contributions from accounting firms and companies to some sort of mandatory assessment system, as some have suggested, would solve neither of these problems, although it might diminish any perception that FASB must tailor its views to those of its funders.

FASB's slow standard-setting could be addressed more directly by having the SEC impose deadlines on rule changes, with the threat that the SEC would take action on its own by a certain date if FASB did not, an idea floated by former SEC Chief Accountant Lynn Turner. Of course, the option of SEC taking over the standards-setting function is not ideal, because it could interfere with the other functions the commissioners perform and could not guarantee better outcomes. But the simple threat of occasional SEC rulemaking could be a powerful incentive for FASB to remain vigilant and act faster.

The downside of more active SEC involvement, however, is that it could result in even greater political interference in FASB's activities than already exists. There is a respectable view that politics is inherent in any rulemaking process, including the setting of accounting standards, and thus it is something that the public should accept. At the same time, however, the main purpose of accounting standards-at least for publicly held companies-is to protect the interests of investors, not accountants and not the firms themselves. Accounting standards should help investors understand all relevant financial facts that will enable them to make projections about future cash flows. Where the standards are altered or not implemented out of concern for affected firms rather than investors, the outcome may not be socially desirable. In theory, putting more investor or public representatives on FASB could help rectify the imbalance. In practice, however, if Congress wants the rules to benefit narrow interests, then there is little that even a more balanced FASB can do.

Similarly, moving the standards-setting function to the SEC is not a panacea because Congress still oversees the SEC. The same would be true if FASB members were chosen directly by the Commission. As long as the SEC oversees FASB in some way and Congress oversees the SEC, it is virtually impossible to remove politics from accounting standards-setting.

In principle, the only option that would have a chance of at least making some difference is to move standard-setting to an international body like the International Accounting Standards Board and thus accept international accounting standards (IAS), which the United States thus far has refused to do, largely out of the belief that U.S. Generally Accepted Accounting Principles (GAAP) is superior to IAS. This is not the rationale for moving to international standards that is typically cited. Instead, the case for IAS rests largely on the view that a single set of accounting standards worldwide would eliminate discrepancies in accounting standards across countries, thereby facilitating cross-border movement of capital. In addition, removing sources of uncertainty generated by differences in national accounting conventions should reduce the cost of capital. In the wake of Enron, others also have argued that a system like the IAS that allows accountants more discretion is superior to the heavily rules-based system of U.S. GAAP, which seemingly invites circumvention.

But perhaps the most important potential advantage of replacing U.S. GAAP with IAS is that it would dilute the political power of narrow interests in this country to influence the outcome of the standard-setting process. Take, for example, the fight over expensing stock options, which FASB was about to implement several years ago before it was stopped by a powerful lobbying campaign from the U.S. high-tech community. If standards were set solely by the IASB, our high-tech firms would make their views felt, but they could well run into significant opposition from standard-setters from other countries. Unfortunately, it is for just this reason that moving toward IAS would almost certainly arouse strong opposition in this country.

A better approach would be "constrained competition" in standard-setting. Under this approach-which appears to be gathering greater support within the academic community-U.S. law would give firms listing their shares on our stock exchanges a choice between using U.S. GAAP or IAS. Once some of the key differences between the standards are substantially narrowed, there would be no need for firms that choose IAS to undergo the expense of reconciling the differences between the two standards. The remaining differences between the standards would continue to exist, but would be of lesser magnitude. Then the two standards would simply compete, but the discrepancies would not be so large as to produce widely divergent results for most companies. In that way, investors would get the benefits of both greater harmonization (but not complete identity) of the two standards and the benefits of competition.

Enforcement
However much accounting standards may be perfected, investors will not be protected if auditors do not properly enforce the standards. In light of the rising numbers of auditing problems in recent years, culminating with Andersen's widely publicized failures with respect to its audit of Enron, attention has been focused on verification of financial statements. Policymakers should concentrate on two basic approaches, which are not mutually inconsistent, but ideally should be reinforcing: improved monitoring or oversight of auditors and improved incentives for auditors to carry out their work properly.

Monitoring
The most frequently discussed reform of the existing enforcement system is the creation of an independent body reporting to the SEC that would set and enforce auditing standards. SEC Chairman Harvey Pitt has outlined, and the Bush administration has basically endorsed, a proposal for a new Public Regulatory Board (replacing the previous Public Oversight Board) that would have authority to set auditing standards and to investigate and punish wayward auditors, even while charges are pending. Most of the members of the PRB would be independent of the accounting industry, while the functions of the Board would be financed by assessments on accountants and the firms they audit. Critics have said the proposal does not go far enough.

A better option, for a number of reasons, is to lodge the investigation and enforcement functions within the SEC, while leaving the preparation and refinement of audit standards for the auditing profession to an organization like the PRB.

First, proponents of an independent body cannot credibly assert that the job of overseeing auditors is more complex than overseeing the stock exchanges, investigating fraud or insider trading, or carrying out the rest of the Commission's statutory agenda. If the reason for contracting out the supervision of auditors is that the SEC is short of staff and resources, as it clearly is, there is an easy answer to that problem: give it the necessary resources and finance it by an assessment on accounting firms, the firms they audit, and/or investors.

If the reason for creating an independent board is to shelter it from political interference, then that argument is not sufficiently compelling. The SEC has effectively contracted out the setting of accounting standards to the FASB, but that has not prevented affected interests from influencing what the FASB does. In fact, precisely because enforcement is an inherent government function that is carried out for other industries by federal agencies, Congress quite properly exercises its oversight responsibilities over those enforcement efforts. It would be no different if the SEC were to oversee the auditing profession directly.

The only potentially plausible argument for creating the PRB is that the enforcement of auditing standards requires an understanding of the intent behind the standards, and so the two functions should be lodged in the same organization. And since the thought of having the SEC write audit standards seems to many like a non-starter, better to have both jobs carried out by an entity like the PRB under the SEC's oversight. But this too, is faulty logic. Many regulatory agencies write complex rules that they then enforce, so SEC could do both. Or it could rely on an entity like the PRB, which it would oversee, to write a first draft

Continued in the article

Bob Jensen's threads on Enron are at http://www.trinity.edu/rjensen/FraudEnron.htm  

Let me begin this module with a paragraph from "The Good, the Bad, and the Ugly: World Bank Land Policies," Land Research Network, February 17, 2004 --- http://www.landaction.org/display.php?article=177 

The next rung on the ladder, or a rung associated with these two steps, is granting land titles that are alienable. Alienable means that you can sell the land, or you can use it as collateral at a local bank when you apply for credit, and therefore can also lose it if you default on a bank loan. It can also be your contribution to a joint venture with a private company, if you are a farmer or landholder—you’re investing your alienable land title, and most likely your labor, and the company is investing working capital. Of course if the business doesn’t work out, then everybody losses, including the farmers whose land titles are now alienable, and who lose their land. For the Bank, all of this is part of ‘facilitating land markets.’ When economies go through rapid growth ‘bubbles,’ land values can experience drastic short-term rises, inducing many small farmers to sell their now alienable land for what seems like a lot of money. Or when crop prices are depressed, farmers may sell because cash crop production is no longer profitable. All too often, however, the cash received for the land runs out quickly, and the family fails to find a substitute means of sustenance, rapidly becoming destitute. While they had the land at least they could eat, but without land or employment, they have nothing.

April 3, 2004 message received from XXXXX

Mr. Jensen -

I'm a young lawyer in Washington, D.C. I have been doing some research concerning SFAS 133. First, thank you for the wonderful material you have on the internet. It is both informative and helpful. As I am just learning to navigate the standard, I'm hoping you can answer an SFAS 133 question for me: when first dealing with the rules change, what benefit was there for an entity (say, a bank) to treat a security as alienable as opposed to inalienable? In other words, would the entity receive some sort of accounting benefit under SFAS 133 if the security was alienable (as opposed to inalienable)? Thanks very much for your time and help.

Best regards,

XXXXX

May 4, 2004 reply from Bob Jensen

Hi XXXXX,

Let me begin by saying that I am not an attorney.  Nor am I an expert on the question that you asked.  It would seem, however, that an alienable title is one that is pledged as collateral on a loan such that the land owner is no longer has a perfectly clear right to sell or otherwise pass that title along free and clear of the pledged value.

My bottom line opinion the distinction "security was alienable (as opposed to inalienable)" is of no consequence to hedge accounting alternatives, although it may affect footnote disclosures regarding credit risk.    Both alienable and inalienable securities may subject to fair value risk or cash flow risk due to changes in interest rates.  There can be hedge accounting relief for both types of hedged risk under rules of FAS 133, but these options do not vary with the distinction of alienable or inalienable.

Not once is the term alienable used in FAS 133.  A bank that made a loan that is pledged with with real estate collateral might be concerned about the fall in value of that collateral.  In a sense, the price of the real estate becomes an "underlying" if the bank decides to hedge the fair value of that collateral.  However, real estate is not subject to the typical underlying price risk conceived in FAS 133 where there is an implicit assumption that prices change frequently in trading markets such as commodity prices and interest rates.  

Real estate is different in many respects.  Whereas corn traded on the CBOT is standardized for each bushel traded, real estate is always unique and cannot be standardized.  Secondly, corn prices change hour-by-hour, whereas real estate values fluctuate much less frequently and are difficulty to monitor on a day-to-day basis.  

It would seem that banks would seldom hedge pledged real estate collateral.  They might hedge some other types of collateral such as pledged notes receivable that are subject to changes in value with underlying interest rates.  FAS 133 generally conceives of fair value hedging of notes receivable by the owner or by the prospective owner based upon some type of firm commitment to own them in the future.  It is somewhat different if a bank does not own the collateral but elects to hedge the value of that collateral on a loan outstanding.  I doubt that hedge accounting would be allowed for such a hedge under FAS 133 rules.  Changes in the value of the collateral would never be booked as long as the loan itself is not deemed a bad debt.  FAS 133 focuses on price and interest rate risk rather than credit risk.  Hence, any change in the value of a hedge of collateral value would have to be posted to current earnings in my viewpoint.  No hedge accounting would be allowed for a hedge of collateral.

Under the original Paragraph 531 of FAS 133, there is a requirement to make disclosures of concentrations of credit risk and collateral.  

Hope this helps a little.

Bob Jensen

May 4, 2004 reply from XXXXX

Thanks very much for your response. I've been trying to wrap my head around some of these accounting issues. I'm sure you're incredibly busy and breadth and depth of your response was very generous (not to mention, very helpful). Thank you.

I am looking at a situation where an entity was receiving a servicing fee from another party for servicing that other party's mortgage loans. By contract, the entity could not sell the servicing fee. But it seems as if that entity may have desired to treat that servicing fee as something that it could sell to a third party in order to get favorable treatment under SFAS 133. Does that make sense? When adjusting for the new SFAS 133 standard, is there favorable treatment under SFAS 133 if the entity could treat the servicing fee as something that it could sell (as opposed to something that it could not sell)? This is the last time I will bother you. Thank you again for being so very generous with your time. I very much appreciate your help.

With best regards,

XXXXX

May 4, 2004 reply from Bob Jensen

In the context that you now put it, it would seem that the above argument is probably correct if interest rate fluctuation risk is being hedged in a fair value hedge but not a cash flow hedge.  

If the fee itself varies with interest rates, then it is possible to hedge the cash flow risk due to changes in interest rates.  In that case, I think it would be possible to get hedge accounting treatment whether it was alienable or inalienable since the risk being hedged is cash flow.  But if the fee itself is fixed there is no cash flow risk to hedge.  The only risk in that case is fair value risk.

To be designated as a hedged item for fair value hedge accounting under FAS 133 rules, the fixed mortgaging service fee contract value itself could be subject to interest rate risk.  If interest rate fluctuations change the value of a fixed-fee service contract, then any fair value hedge of the interest rate risk might get favorable hedge accounting treatment.  But if the service contract itself cannot be sold at differing values, then it is not subject to value changes due to interest rate risk and cannot be a hedged item for hedge accounting  purposes.  

Footnote 8 to Paragraph 21 of FAS 133 notes mortgage servicing rights may qualify as hedged items.  However, I think the implicit underlying assumption is that the servicing rights be subject to value-change risk, which would not be the case if they could not be sold.

A firm commitment that represents an asset or liability that a specific accounting standard prohibits recognizing (such as a noncancellable operating lease or an unrecognized mortgage servicing right) may nevertheless be designated as the hedged item in a fair value hedge. A mortgage banker's unrecognized "interest rate lock commitment" (IRLC) does not qualify as a firm commitment (because as an option it does not obligate both parties) and thus is not eligible for fair value hedge accounting as the hedged item.  (However, a mortgage banker's "forward sale commitments," which are derivatives that lock in the prices at which the mortgage loans will be sold to investors, may qualify as hedging instruments in cash flow hedges of the forecasted sales of mortgage loans.)

Information Technology Sites, From Smart Stops on the Web, Journal of Accountancy, May 2004, Page 23 --- http://www.aicpa.org/pubs/jofa/may2004/news_web.htm 

THE INTERNET

SMART STOPS ON THE WEB   TECHNOLOGY SITES For IT Educators and Leaders www.techlearning.com Here, CPAs who specialize in IT professional development can find helpful resources such as tips on needs assessment for offices or classrooms and articles including “Data Can Drive Development.” Users also can read software reviews and find links to general search engines as well as to an encyclopedia with more than 20,000 IT terms. Free Online Resources www.eweek.com CPA IT professionals can register for free at this Web stop and enroll in gratis e-seminars on topics such as best practices for enterprise data integration, information security and wireless LAN deployment. Users seeking to advise clients on application storage management systems will want to give them the quick quiz “Do You Need to Automate?” before proceeding. Read to Keep Up www.technologyreview.com In addition to providing free either two hard copies of the magazine or a digital issue, Technology Review offers visitors to its Web site a free subscription to the newsletter Technology Review Update. Other gratis offerings include the sections Predictive Markets, where users can predict future outcomes of IT issues to win prizes, and Research News, which has links to information on industry innovations. Less Search Time, More Results www.keepmedia.com CPAs looking for IT articles from the past 12 years can register here for a free seven-day trial. Users can search more than 150 publications, store favorite articles directly online at this site, keep track of what they’ve looked at—saved or not—and let KeepMedia find other articles based on their previous choices. A general search on the word technology returned more than 14,000 results. Telecommuting Technology www.langhoff.com CPAs working from home or remote locations can find case studies and statistics on this trend through the frequently-asked-questions section at June Langhoff’s Telecommuting Resource Center. Also, visitors can look through the business travelers’ survival guide to find tips and links to airlines, ATM locations and business services for mobile users. Companies interested in starting a work-at-home program can research the costs and get links to model telecommuting agreements and policies. “The Silly Con Valley Report” www.mikeslist.com Don’t be fooled by this Web site’s light tone: Useful nuggets of information, including the latest reports on software designs, how to thwart spam and a 300-Gb hard drive, can be found beneath all the humor. Also, users can read up on the latest in broadband and handheld technology and Windows XP through the newsfeed links as well as join up for a free weekly e-newsletter.

Bob Jensen's education technology threads are at http://www.trinity.edu/rjensen/000aaa/0000start.htm 

Bob Jensen's accounting software bookmarks are at http://www.trinity.edu/rjensen/bookbob1.htm#AccountingSoftware 

Bob Jensen's threads on resources for educators are at http://www.trinity.edu/rjensen/000aaa/newfaculty.htm#Resources 

Also see http://www.trinity.edu/rjensen/000aaa/thetools.htm 

Count Us In --- http://www.abc.net.au/countusin/default.htm 

Australian Broadcasting Corporation's Online division provides games to help children understand numbers.

Children's Literature --- http://www.childrenslit.com/ 

The Children's Literature Comprehensive Database (CLCD) is an acquisition, research, and reference service that offers 900,000 MARC records and more than 150,000 reviews of children's books--all full text searchable from 27 review sources. CLCD B&N Bookstore As a subscriber to the CLCD you are entitled to an additional 5% discount on all of your bookstore purchase plus free shipping with the purchase of two or more items.

April 20, 2004 message from Ankita Mishra [ankita@chambal.com] 

We saw your website http://www.cs.trinity.edu/~rjensen/book99b.htm  on net and found it really informative in the field of books and related areas.You have listed some very useful book related websites like Amazon.com, isbn.nu, etc which are a very good resource for students and all book readers.

We are writing to inform you that we also have a similar web site , http://www.chambal.com  , where we compare prices of books across such major online book sellers in real time. We even find book prices on eBay.

We would appreciate if you could add our website link also to your collection of links. If you decide not to add our link for some reason, your feedback would be really helpful for us in making our site more informative and useful.

Best regards, 
Ankita

I posted the chambal.com link at the more current site module for finding books at http://www.trinity.edu/rjensen/searchh.htm#Books 

April 22, 2004 message from Rob [rob@coursejunction.com] 

Bob,

We’ve created a free site that allows anyone to search for a course or list a course for free. The name of the site is http://www.coursejunction.com . We offer a number of high quality courses and would appreciate a link from your continuing education contact page.

Our link instructions are here: http://www.coursejunction.com/link2us.cfm  . Please feel free to email me with any questions.

Thank you,

Rob

CourseJunction.com is an online community that brings course providers and course participants together. Any one can list their courses on CourseJunction.com and anyone can search for a course on CourseJunction for free. http://www.coursejunction.com 

I added this message to http://www.trinity.edu/rjensen/crossborder.htm#Training 

"Websites Tattle on Tax Scofflaws," Wired News, April 27, 2004 --- http://www.wired.com/news/business/0,1367,63238,00.html?tw=newsletter_topstories_html 

To those for whom civic duty alone is not enough motivation to pay taxes, states are rolling out a new weapon: shame.

A growing number of states are hoping to humiliate delinquent taxpayers by putting their names online. Used in at least 13 states and sporting zingy names like CyberShame and DelinqNet, the websites are giving state tax collectors a surprisingly useful tool for gathering old taxes.

"We're trying to shame people," said Danny Brazell of the South Carolina Department of Revenue, which attributes $5.5 million in newly collected taxes to its website, Debtor's Corner, started in 2001.

"To have your neighbors be able to see your debt, that would be embarrassing of course, and that's the whole idea."

Some of the state websites are getting thousands of hits a day. It's a bit of legal snooping designed to "out" tax evaders.

In Georgia, the latest state to try online shaming, the debtor's list includes two celebrities. The estate of the late rapper Tupac Shakur owes $85,260, and the estate of the late TLC member Lisa "Left Eye" Lopes owes about $550,000.

In two months, Georgia's list has brought in $1.2 million. It's a small sum for a state that estimates $1.6 billion in unpaid taxes, but every bit helps.

"We don't have the assets to go out and chase these 420,000 people ourselves," said Department of Revenue spokesman Charles Willey.

The public humiliation tactic isn't new, just in a new forum. Governments used to post debtors' names in town squares or newspapers.

"Humiliating folks to shame them into paying what they owe goes back a long time. It's proven to be fairly successful," said Sujit CanagaRetna, an Atlanta-based fiscal analyst for the Council of State Governments.

With many states in the red, "they're fishing for all kinds of strategies to reduce these shortfalls," he said.

Privacy advocates warn the tax-evader lists could harm the innocent. States do not post debtors' names until a lien has been placed against them in court, meaning they've ignored several notices to pay back taxes and their tax information becomes public record. But some fear there aren't adequate safeguards to make sure people get pulled from the list if they've settled up.

"There's always the question of what happens if the government is wrong," said Pete Sepp, spokesman for the Alexandria, Virginia-based tax watchdog group National Taxpayers Union. "This kind of information can ruin the financial reputations of people for years."

In Louisiana, home of the CyberShame site, people about to be listed are notified in advance. Fear of being on the website has brought in $315,000 over the last three years from people who settled up before being listed.

"These are people who have purposely avoided paying their fair share, and we've exhausted all options to collect," revenue spokesman Danny Brown said. "But once their minister, their next-door neighbor, brother, friends, all them know about it, they're much more amenable to paying what they owe."

May 2, 2004 reply from Saeed Roohani [sroohani@COX.NET] 

Bob,

I think we should take advantage of the Internet to cut down on illegal activities whether civil or criminal. Business information disclosed on the web has value to others, so as information about people who abuse the system and assume not many people will know. BTW, I could not use the sites, were unavailable.

To expand this a bit more, I think disclosures on Internet may discourage some professionals from unethical behavior. We should look for proper ways to do this.

Saeed Roohani
Bryant College.

"Hedge Fund Strategies Combining Futures & Options," by John Person, Chicago Board of Trade Newsletter, April 2004.

This article illustrates how professional traders, specifically hedge funds, utilize options to hedge investments and generate additional income --- http://www.cbot.com/cbot/pub/cont_detail/0,3206,1180+18713,00.html 

It is often said Bulls make money, Bears make money and Pigs get slaughtered, and sometimes spread traders take all of the money home!

In essence that is what hedge funds do at times - spread or hedge their investments in the derivatives markets.  Fund managers know how to leverage their leverage and manage risk by knowing exactly how to spread off positions and parlay profitable trades into huge winners.

Commercials are hedgers, they are using the derivative markets to reduce or eliminate risk. Speculators, on the other hand, accept that risk in return for big gains. Hedge funds, or large speculators, apply every technique in the realm of trading strategies to earn above average returns by implementing risk management trading tools. 

Spreading and the use of option strategies are just a few techniques used by hedge funds that can achieve these goals for the highest maximum returns with better risk controls.

The purpose of this article is to heighten your awareness to the various strategies, and to illustrate how professional traders, specifically hedge funds, utilize options as additional income trades by writing options to collect the premiums against underlying futures positions.  In addition, it will show you how they use options to hedge against adverse risk by using time to their advantage.  Strategy examples will be giving using CBOT®'s new 100% electronic mini-sized DowSM options.

Let me share with you some insights in the hedge fund world. In 2002, it was estimated that approximately $600 billion was invested in hedge funds, mostly because of strong performance and the sophisticated trading tactics used to trade money. Hedge fund managers can use any style and asset class. That gives them a lot of flexibility.

Historically, hedge funds do well in bear markets. In 1987, the year of a stock market crash, hedge funds returned 14.49 percent compared to an S&P 500 return of 5.24 percent. Part of that performance is attributed to the ability to short, or bet against, stocks.

Billionaire Warren Buffett, who some say is one of the world's smartest investor, is reported to have some of his personal fortune invested in the Bermuda-based hedge fund, West End Capital Management.

Unfortunately, there is a whole set of SEC rules and regulations written to keep smaller investors from participating in a hedge fund. According to the SEC rules, to invest in a hedge fund, investors must have an annual income of $200,000 if you're single and $300,000 if you're married.

Hedge fund managers are not restricted to a set style or disclosure of which derivative markets they use. In fact, they can short the market and often times use a basket of stocks known as exhange traded funds or ETF's and stock index futures. This style is in contract to that of mutual funds, which mainly are fully invested in stocks, bonds or in cash, and usually hold to the business model of being long the market.

Hedge fund pros know how to use equity options positions to generate extra income without selling. Some strategies include writing covered puts and calls, calendar spreads, collars, cross-market spreads, curve trades and synthetic futures option strategies.

These strategies can be a combination of just option positions or a combination of futures and options together. Remember that options are complicated to those who do not educate themselves on the subject. It takes time and practice. In fact, trading is complicated, life is complicated. The great thing about our society is that we have power. Each and every one of us has power. That is, the power to make choices and decisions.  We have the power to want to explore and expand our knowledge in any subject. If you are a trader you have the power to learn more about investing.

In the beginning of this article I stated that commercials are hedgers and they typically use the derivative markets, in this case the futures and or options markets, to reduce or eliminate risk.

Speculators, on the other hand, accept risk in return for potential gains. Most investors do not have a risk plan other than a stop. That can be a real order or a mental idea of where to exit a trade. The later is the worst as most speculators change their minds and thus can fall into the trap of letting losers ride.

I want to introduce you to the concept of implementing option strategies as a hedging vehicle, or an insurance policy, which can put you on the same level as a commercial or professional trader. After all, if a bank uses futures to spread off risk, why can't a futures trader use options to spread off risk and act like a hedger?

Hopefully this article will dynamically alter your perception and understanding of options. On the one hand, options trading can be a complex dimension and new universe due to the fact that options have many variables and there are so many choices to make. On the other hand, that is why they offer flexibility.

Options are multi- dimensional.   There is more to calculating the options value besides determining an opinion of the direction of price on the underlying market. As we know, markets only have three choices to move: up, down or sideways.

With options there are other elements to consider besides picking the right price direction. There is time and volatility to consider. Volatility is not just categorized as the change in price value, but also as the measurement of the percentage change in price.  There is implied volatility and historical implied volatility.

There are ways to hypothetically measure an options value by mathematical models as developed by University of Chicago 's Fisher Black (mathematician) and Myron Scholes (economist). They developed the formula that is standard in the pricing of options value.

Then there are other elements to help calculate various value changes, known as the "Greeks". For example, delta gives the percentage value the option will move in relation to the move in the underlying market. Theta gives the value change against time decay.  Vega measures the options price value on the change in volatility. Then there is gamma, which measures how fast the delta will change.

Directional trend strategies in options if one is bullish can include outright purchases of call options. This carries the characteristic of limited risk with unlimited rewards. There are many other combinations one can implement such as bull call spreads, ratio back spreads, vertical or horizontal calendar spreads. As you can see there are many names and variations one can mix and match to custom tailor a trading plan. The bearish strategies would use the opposite of these nomenclatures such as outright put purchases, bear put spreads and so on.

One specific strategy I wish to discuss is what is known as a "Collar". A collar is designed to reduce risk without putting your money up for protection. This is done by writing and buying an option against a futures position. The downside of this strategy is that it reduces your profit potential. It is a hedge strategy within a specific price target range.

Continued in the article

Bob Jensen's threads on accounting for derivative financial instruments and hedging activities are at http://www.trinity.edu/rjensen/caseans/000index.htm 

"What Did You Get From ERP And What Can You Get?" by Gregory J. Millman, Financial Executive, May 2004, pp. 38-42.  This will soon be online at http://www.fei.org/mag/ 

The evidence leaves little doubt that for most companies, ERP (enterprise resource planning) has failed to meet expectations or deliver on its value promise.  It's hard to find an expert who things otherwise.  "Based on our data, only a select few companies have gotten value out of their ERP implementations, and those are the world-class companies.  The value for the average company is still many years away," says David Hebert, who leads The Hackett Group's business advisory services program in application ROI.

The latest annual survey of financial executives by FEI and Computer Sciences Corp. found that "only a small minority, 10 percent, believe they are achieving a high return on technology investments."  Scott Phares, vice president of business services for the application software firm Business Engine says, "I hate to beat up on ERP, but it has the most visibility as the most expensive but least-value-derived kind of implementation.  There are tons of partly implemented or partly used products out there."

To be sure, the rap on ERP isn't entirely one-sided.  Peter Greffe, senior vice president for finance at the Bank of Montreal (BMO), says, "When you implement something new like this, it will relocate profitability to a certain extent.  Anybody that gets a positive impact will love the system, and anybody that gets a negative will not."

Jensen Comment:  ERP systems may have greater returns now that firms have to worry about Sarbanes-Oxley compliance.  Also, firms like Union Carbide claim that ERP has been a great help in FAS 133 compliance --- http://www.cs.trinity.edu/~rjensen/000overview/mp3/133summ.htm 

Bob Jensen's threads on ERP are at http://www.trinity.edu/rjensen/245glosap.htm 

Humanities Magazine --- http://www.neh.gov/news/humanities.html 

See the profiles of the ten recipients of the National Humanities Medal

Maxim Publisher Hits Poetry Circuit (Front Page of The Wall Street Journal)
Felix Dennis is a poet who also happens to be the multimillionaire publisher of the irreverent Maxim magazine, and he's on a crusade to challenge the obscurity of modern verse.

He Likes Meter and Rhyme,
Calls Free Verse a Crime
And Dog Poems Sublime

"Felix Dennis, No Pro, Has Spotted His Foe: Poetry's Status Quo," by Matthew Rose, The Wall Street Journal, May 3, 2004, Page A1 --- http://online.wsj.com/article/0,,SB108327280097297732,00.html?mod=home%5Fpage%5Fone%5Fus 

When he began reading his poetry in public, Felix Dennis, the publishing mogul behind Maxim magazine, usually arrived by helicopter. He dubbed a late 2002 12-city trip around England the "Did I Mention the Free Wine?" tour, on the advice, he says, of Mick Jagger, his neighbor on the island of Mustique. During the reading, young women in tour T-shirts handed out free glasses of wine from his own cellar.

As he read, his words were flashed on a screen and electronic music, especially written for him, provided a background.

"Never go back," Mr. Dennis growled into a microphone, starting the poem that kicks off and ends his readings:

Never go back.
Never return to the haunts of your youth.
Keep to the track, to the beaten track,
Memory holds all you need of the truth.

In a picaresque career, Mr. Dennis has played drums for Eric Clapton, gone to jail for publishing Oz, a crudely satirical magazine, and written a biography of Bruce Lee. In his newest chapter, the British multimillionaire is on a crusade to challenge the obscurity of modern poetry, by reclaiming old-fashioned values of rhyme and meter.

His flair for marketing, and his bankroll, are giving him unusual success. His first volume of poetry, "A Glass Half Full" got barely any attention from serious reviewers but sold all 10,000 copies printed in Britain.

For the American edition, due in September, Mr. Dennis, 56 years old, is upgrading his traveling show. He has hired a jet for about $300,000 to shuttle him to towns around the country where he plans to hand out a DVD of previous performances. Hoping to make a profit from Mr. Dennis's new passion, publisher Miramax Books, a unit of Walt Disney Co., has plans to print 25,000 copies. Most serious poets are lucky to sell 3,000.

"It would be nice if Mr. Letterman or Oprah gave me two minutes," Mr. Dennis says. "I'd blow their bloody socks off."

Mr. Dennis has let his hair grow long and shaggy since he started writing seriously in late 2000. He has completed 650 poems, at last count, in the four hours a day he devotes to them. Every few weeks, he sends what he calls a "wodge" of poems to his editor and to a lawyer friend, who stands in for the kind of ordinary reader Mr. Dennis seeks. Mr. Dennis then joins the other two in grading his poems. Those that get three As make the cut. Cs are discarded. Anything in between goes up for discussion or revision.

Mr. Dennis says in the next few years he's considering selling Dennis Publishing, owner of the highly successful Maxim, an irreverent men's magazine. He would like to concentrate on poetry and other interests, he says, such as accumulating enough land to plant a 50,000-acre forest in England, named the Forest of Dennis. He also has an idea to build retirement villages for baby boomers.

His poetry is intended for "people who appear to devour it as if they've been starved for 40 or 50 years, which, by the way, they have," he says. Easing into a leather armchair in his Manhattan apartment, Mr. Dennis accidentally sat on a slim volume of poetry by Ezra Pound, a poet known for being impenetrable in his later years. "That's what he deserves," Mr. Dennis snorted. "He used to write good poems."

Continued in the article

May 5, 2005 reply from Roberta Lipsig, SUNY Oswego [rlipsig@OSWEGO.EDU] 

Here's a webzine for those who want "real poetry" - of all sorts except blank verse:

http://www.poetryrenewal.com/ 

Their Mission Statement: Poetry Renewal will refresh and renew the standards and disciplines that have been lacking in much of poetry in the last fifty to 150 years. We will give an outlet for more disciplined verse that has been disrespected by late twentieth century academics. We will not be iconoclasts. We will uphold the poetic traditions and disciplines that sustained our civilization for thousands of years. We will be praising and featuring those who make a study of and apply the art and craft of poetry.

Roberta Lipsig 
Professor Emerita 
Formerly at SUNY Oswego now in Gainesville FL 
(Hey Bob, I went in the opposite direction from you.)

 

The Writings of Henry D. Thoreau (American Literature) ---  http://www.thoreau.niu.edu/ 

The Museum of Bad Art --- http://www.museumofbadart.org/ 

Bob Jensen's history and literature bookmarks are at http://www.trinity.edu/rjensen/bookbob2.htm#History 

How can a nasty neighbor help you save on income tax?

The answer is at http://www.aicpa.org/pubs/jofa/may2004/ftta.htm 

Forwarded by The Cha Cha Lady

1. Brain cells come, and brain cells go, but fat cells live forever.  

2. Transvestite: A guy who likes to eat, drink and be Mary. 

3. The difference between the Pope and your boss.... The Pope only expects you to kiss his ring. 

4. My mind works like lightning. One brilliant flash and it is gone. 

5. The only time the world beats a path to your door is if you're in the bathroom. 

6. I hate sex in the movies. Tried it once. The seat folded up, the drink spilled and that ice, well, it really chilled the mood. 

7. It used to be only death and taxes were inevitable. Now, of course, there's shipping and handling, too. 

8. A husband is someone who, after taking the trash out, gives the impression that he just cleaned the whole house. 

9. My next house will have no kitchen - just vending machines and a large trash can. 

10. A blonde said, "I was worried that my mechanic might try to rip me off. I was relieved when he told me all I needed was turn signal fluid." 

11. I'm so depressed. My doctor refused to write me a prescription for Viagra. He said it would be like putting a new flagpole on a condemned building. 

12. My neighbor was bitten by a stray rabid dog. I went to see how he was and found him writing frantically on a piece of paper. I told him rabies could be cured and he didn't have to worry about a Will. He said, "Will? What Will? I'm making a list of the people I want to bite!" 

13. Definition of a teenager? God's punishment for enjoying sex. 

14. As we slide down the banister of life, may the splinters never point the wrong way. 

15. When I was young we used to go "skinny dipping," now I just "chunky dunk." 

16. The early bird has to eat worms. 

17. The worst thing about accidents ! in the kitchen is eating them. 

18. Don't argue with an idiot; people watching may not be able to tell the difference. 

19. Wouldn't it be nice if whenever we messed up our life we could simply press 'Ctrl Alt Delete' and start all over? 

20. Stress is when you wake up screaming and then you realize you haven't fallen asleep yet. 

21. Just remember...if the world didn't suck, we'd all fall off.

The Cha Cha Lady informed me that the camel spider photographs are phony.

Bob, See: http://www.snopes.com/photos/bugs/camelspider.asp 

Paula

Forwarded by Auntie Bev

The following questions and answers were collated from the SAT tests given to 16 years-old students! Don't laugh too hard -- one of them could become president one day! You have to admit some are very creative, though.

Q: Name the four seasons. A: Salt, pepper, mustard and vinegar

Q: Explain one of the processes by which water can be made safe to drink.

A: Flirtation makes water safe to drink because it removes large pollutants like grit, sand, dead sheep and canoeists.

Q: How is dew formed? A: The sun shines down on the leaves and makes them perspire.

Q: What is a planet? A: A body of earth surrounded by sky.

Q: What causes the tides in the ocean?

A: The tides are a fight between the Earth and the Moon. All water tends to flow toward the moon because there is no water on the moon and nature abhors a vacuum. I forget where the sun joins in this fight.

Q: In a democratic society, how important are elections? A: Very important. Sex can only happen when a male gets an election.

Q: What are steroids? A: Things for keeping carpets on the stairs.

Q: What happens to your body as you age? A: When you get old, so do your bowels and you get intercontinental.

Q: What happens to a boy when he reaches puberty? A: He says good-bye to his boyhood and looks forward to adultery.

Q: Name a major disease associated with cigarettes. A: Premature death.

Q: How can you delay milk turning sour? A: Keep it in the cow.

Q: How are the main parts of the body categorized? (e.g., abdomen).

A: The body is consisted into three parts - the brainium, the borax and the abdominal cavity. The brainium contains the brain, the borax contains the heart and lungs and the abdominal cavity contains the five bowels, A, E, I, O and U.

Q: What is the Fibula? A: A small lie.

Q: What does "varicose" mean? A: Nearby.

Q: What is the most common form of birth control? A: Most people prevent contraption by wearing a condominium.

Q. Give the meaning of the term "Caesarian Section" A. The caesarian section is a district in Rome.

Q: What is a seizure? A: A Roman Emperor.

Q: What is a terminal illness? A: When you are sick at the airport.

Q: Give an example of a fungus. What is a characteristic feature? A: Mushrooms. They always grow in damp places and so they look like umbrellas.

Q: What does the word "benign" mean? A: Benign is what you will be after you be eight.

Q: What is a turbine? A: Something an Arab wears on his head.

And just think, one day our social security payments will depend on these kids!! !

Forwarded by Don VanEynde

1. Two vultures boarded a plane, each carrying two dead raccoons. The stewardess stops them and says "sorry sir, only one carrion per passenger." 

2. NASA recently sent a number of Holsteins into orbit for experimental purposes. They called it the herd shot round the world. 

3. Two boll weevils grew up in S Carolina. One took off to Hollywood and became a rich star. The other stayed in Carolina and never amounted to much--and naturally became known as the lesser of two weevils. 

4. 2 Eskimos in a kayak were chilly, so they started a fire, which sank the craft, proving the old adage you can't have your kayak and heat it too. 

5. A 3-legged dog walks into an old west saloon, slides up to the bar and announces "I'm looking for the man who shot my paw." 

6. Did you hear about the Buddhist who went to the dentist, and refused to take Novocain? He wanted to transcend dental medication. 

7. A group of chess enthusiasts checked into a hotel, and met in the lobby where they were discussing their recent victories in chess tournaments. The hotel manager came out of the office after an hour, and asked them to disperse. He couldn't stand chess nuts boasting in an open foyer. 

8. A women has twins, gives them up for adoption. One goes to an Egyptian family and is named "Ahmal" The other is sent to a Spanish family and is named "Juan". Years later, Juan sends his birth mother a picture of himself. Upon receiving the picture, she tells her husband she wishes she also had a picture of Ahmal. He replies, "They're twins for Pete sake!! If you've seen Juan, you've see Ahmal!!" 

9. A group of friars opened a florist shop to help with their belfry payments. Everyone liked to buy flowers from the Men of God, so their business flourished. A rival florist became upset that his business was suffering because people felt compelled to buy from the Friars, so he asked the Friars to cut back hours or close down. The Friars refused. The florist went to them and begged that they shut down. Again they refused.. So the florist then hired Hugh McTaggert, the biggest meanest thug in town.. He went to the Friars' shop, beat them up, destroyed their flowers, trashed their shop, and said that if they didn't close, he'd be back. Well, totally terrified, the Friars closed up shop and hid in their rooms. This proved that Hugh, and only Hugh, can prevent florist friars.  

10. And finally, there was a man who sent 10 puns to some friends in hopes at least one of the puns would make them laugh. Unfortunately no pun in ten did!!! 

Forwarded by Earl

A group of 3rd, 4th and 5th graders, accompanied by two female teachers, went on a field trip to the local racetrack (Churchill Downs) to learn about thoroughbred horses and the supporting industry (Bourbon), but mostly to see the horses.
     
When it was time to take the children to the bathroom it was decided that the girls would go with one teacher and the boys would go with the other.
     
The teacher assigned to the boys was waiting outside the men's room when one of the boys came out and told her that none of them could reach the urinal.  Having no choice, she went inside, helped the boys with their pants, and began hoisting the little boys up one by one holding onto their "wee wees" to direct the flow away from their clothes.
     
As she lifted one, she couldn't help but notice that he was unusually well endowed.  Trying not to show that she was staring the teacher said, "You must be in the 5th grade."

No, ma'am, " he replied. "I'm the jockey riding Silver Arrow in the seventh!"

Forwarded by Dick Haar

Color yourself into therapy..................

http://www.chinapaint.com/eng/flash/colorandme_en.swf 

Forwarded by The Cha Cha Lady

A mother enters her daughter's bedroom and sees a letter on the bed. With the worst premonition, she reads it, with trembling hands: