are doomed to repeat it. The Bear Stearns story reminds me a lot of Enron's final days in a way. Both have executives saying everything was OK but seemed oblivious to market conditions and other issues surrounding their firms. Both faced liquidity issues and had lenders seem to lose confidence causing their stock price to have huge drops in short time frames. The government became a big player in the Enron case and seems to be stepping in that direction with the announcement that emergency funding from the Federal Reserve.
If you have never read Conspiracy of Fools I highly recommend it. Kurt Eichenwald's book is the fastest 660 page book I have ever read. The story of the collapse of Enron is similar in several ways to the Bear Stearns story from what I have read in my spare time about the situation.
I can only hope that Bear will be the only investment bank to go down. I happen to be employed indirectly by a similar firm to Bearand there are several rumors of the firm's liquidity issues out in the market. Although not as severe as Bear's situation, I think all investment banks with high exposure to the mortgage crisis will have someone question their liquidity in the next several weeks.
Saturday, March 15, 2008
Thursday, March 6, 2008
Sachse snow
Sike! Guess everyone else in the metroplex gets snow except for us. Sure have lots of rain, but it is funny to watch the news and see everyone freak out and leave work early. Funny stuff.
Interesting story about Sabanes Oxley
One of the reasons I got out of public accounting was the horrible law passed by Congress after the Enron debacle and other financial collapses in the late 90's/early 00's. This post on Dealbook I thought was pretty interesting regarding the decision of one company to delist its shares in order to attempt to avoid compliance with the law. It was by the company's estimate an attempt to save $750K in costs a year to comply with the law. However, some investors protested and the price of the stock dropped sharply.
To me, this shows two sides of this legislation. One, that the high cost to comply with these laws can be a big motivation to go private. Second, investors do like the transparency of financial reporting that comes with the law as evidenced by the drop in the stock price right away following the decision to delist. Somehow there has to be a happy medium to benefit both the needs of shareholders to know about their investment and the desire of management to reduce cost for the ultimate benefit of those shareholdings. I think this is an interesting paradox that as financial regulations become more complicated, at what cost is it worth to continue to comply?
I think the original authors of the legislation probably did not envision the results of the law for the long term, rather as politicians typically do, they just looked at the immediate benefits in the witch hunt following Enron. I definitely think this law should be reworked as to be more efficient in its application.
To me, this shows two sides of this legislation. One, that the high cost to comply with these laws can be a big motivation to go private. Second, investors do like the transparency of financial reporting that comes with the law as evidenced by the drop in the stock price right away following the decision to delist. Somehow there has to be a happy medium to benefit both the needs of shareholders to know about their investment and the desire of management to reduce cost for the ultimate benefit of those shareholdings. I think this is an interesting paradox that as financial regulations become more complicated, at what cost is it worth to continue to comply?
I think the original authors of the legislation probably did not envision the results of the law for the long term, rather as politicians typically do, they just looked at the immediate benefits in the witch hunt following Enron. I definitely think this law should be reworked as to be more efficient in its application.
Sunday, March 2, 2008
re: Texas Tech basketball
...oh yeah, we just beat the number 5 team in the country. 83-80. Don't you love being a fan of the most consistent team in the country?
A&M scored 10 points in the first half against OU on Saturday after blowing Tech out by 50. Weird.
A&M scored 10 points in the first half against OU on Saturday after blowing Tech out by 50. Weird.
Thursday, February 28, 2008
Texas Tech Basketball
Congrats to the Aggies on finally beating Tech in basketball or football. Man was that embarrassing. I expected to lose by 50 this weekend to Kansas, but not to A&M.
I must say I have been pleasantly surprised by Pat Knight so far. I think the players have really responded to him and played very hard. It is obvious that this team has been devoid of talent this season, but I see potential for the future if Pat will get out there and recruit.
Its hard to watch this season, but hopefully things will turn around with the new regime.
I must say I have been pleasantly surprised by Pat Knight so far. I think the players have really responded to him and played very hard. It is obvious that this team has been devoid of talent this season, but I see potential for the future if Pat will get out there and recruit.
Its hard to watch this season, but hopefully things will turn around with the new regime.
Tuesday, February 19, 2008
Jason Kidd - thumbs up
You play. To win. The game.
Win now. With this trade the Mavs have made a decision to worry about the future later and start worrying about the present. I loved Devin Harris' game, but him being the next Kevin Johnson someday will never be the same as having a 35 year old Jason Kidd today. I think this is a good move for the Mavs, but I wish they could somehow keep Diop. I think he was very underrated as far as what he brings to the table defensively and with rebounding.
The Mavs may not win it this year, but they have put their cards down on the table that it must be in the next 2-3 years with this current core of Dirk, Josh, JET, and now Kidd.
Win now. With this trade the Mavs have made a decision to worry about the future later and start worrying about the present. I loved Devin Harris' game, but him being the next Kevin Johnson someday will never be the same as having a 35 year old Jason Kidd today. I think this is a good move for the Mavs, but I wish they could somehow keep Diop. I think he was very underrated as far as what he brings to the table defensively and with rebounding.
The Mavs may not win it this year, but they have put their cards down on the table that it must be in the next 2-3 years with this current core of Dirk, Josh, JET, and now Kidd.
Monday, February 18, 2008
4 months old = newborn
Reid is now 4 months old, but taking care of him recently is more like he is 4 days old. He is still getting up a couple times a night and the second time he basically gets up for the day. I try to help the most on the weekends but that doesn't mean I am not up during the week too. I don't know how Kristy does it but you have to respect her ability to balance everything. She really does a great job with Reid and Westin on barely any sleep!
I used to have a roommate that would only sleep 3 hours a night. I never understood how he did it, because it is really hard. Now it feels like we are doing that and then working 16 hour days after that.
I used to have a roommate that would only sleep 3 hours a night. I never understood how he did it, because it is really hard. Now it feels like we are doing that and then working 16 hour days after that.
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