Clown-Free Zone... sorry, no clowns allowed Message Board

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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: benwood who wrote (96322)	4/19/2001 2:23:07 PM
From: pater tenebrarum	Read Replies (1) of 436258

i have long ago given up on worrying about the various borderline accounting scams...WS is full of them. we have some companies that for years have beaten estimates EXACTLY by a penny (CSCO was one of them, as long as the tech bubble was intact), which always struck me almost as an insult...until i realized that the duped WANTED to be duped. the episode of mass hysteria we have witnessed over recent years as the market mania ran from one improbable valuation extreme to the next, culminating in the invention of new "metrics" like e.g. "eyeballs" to help with valuing companies really has no peer in history...the Dutch tulip bulb madness looks almost rational by comparison. irresponsible accounting has been encouraged throughout...to wit, the many 'barter' deals that were booked as revenue, vendor financing using stock options (also booked as revenue), the accounting for ESOPs (book the tax credit as "profit", but account nowhere for an expense), the sub prime lenders practice of recognizing revenues without any assurance of their collectability (those were the firms some of which went from "record profits" to bankruptcy within one or two quarters), the milking of overfunded (via the mania) pension funds to manage earnings, the 'pooling of interests' scam, etc... interestingly, during the 80's, US accounting practices were well regarded in Europe for their superior transparency. now, when you talk to brokers and institutional investors over here you're often greeted with laughter and cynicism when US cos. accounting is debated. it's really quite a contrast.

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