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How To Create More Jobs
TechDirt is spotlighting a call by Michael S. Malone, a columnist for ABCNews.com, for letting Silicon Valley create jobs once more. Malone argues that Sarbanes-Oxley and other attempts at accounting reform have done little to prevent fraud, but in fact have managed to kill off an entrepreneurship-venture capital-IPO cycle, centered in Silicon Valley, that has taken 30 years to nourish. Here's TechDirt: "...it's time to roll back SarbOx and other accounting rules that have acted more for theatrical purposes rather than any legitimate reason. Basically, all they've done is create new reporting requirements that do little to nothing to either prevent fraud or clarify a company's actual financial position (its intended purpose). I'm all for radical transparency in financial info, but that's not what has been done. Instead, we've made it burdensome to actually grow a company — and that doesn't help create jobs. It helps kill them."
As I said in a previous comment, the current model of entrepreneurship is broken. VCs have left. In 2009, capital will be really hard to find. But there is a silver lining: capital is no longer necessary to start companies.
Again, fairsoftware.net among others is allowing people who don't have any money and don't have any VC buddies to start businesses together.
It will work because for software at least, a few smart developers can beat established software giants. Groundbreaking software can now be built quickly and cheaply by reusing a lot of existing code. You can thank the Open Source community's efforts for that.
I have a lot of respect for Mike Malone, the author of the article. He wrote one of my favorite books: "Going Public: Mips and the Entrepeneurial Dream". If you have any ounce of entrepreneurship in you, this book will reveal it. I'm sure it started vocations. But in today's piece, I disagree that Sarbanes-Oxley is the main problem, although it did reduce the number of IPOs.
The best advice I ever received for starting a company? Drop Powerpoint and your VC pitch. Write code instead.
Why we need more Jobs? I think one instance is enough.
It created a whole breed of IT "professionals", people who creep out of the woodwork and latch onto the latest buzzword-compliant, (typically) Government-sponsored/mandated thing, and ride it until the next one comes along.
I want to delete my account but Slashdot doesn't allow it.
SOX is for publicly traded companies, not startups. By the time they are publicly traded, the need for VC is generally in the distant past.
There should be a unified Single tax. This way there would be a lot less paperwork to do. That tax should be a Money transfer Tax, for example 15% when you get paid, buy something, transfer money. etc. It would also promote saving which is quite good at this moment in time.
OH! IP cycle psyched out?
Previously: "Linux... Toward the Sunrise..." Now: "Linux... Toward the-- No, now, part of Every Sunrise"
Ummmm, that's been the plan for YEARS. The only thing that changes is the name of the company that you hope will buy you.
I could make the argument that it is "IP" patents that are the real problem.
Then they need to get rid of it because it isn't working, but they are going to need to replace it with something else that does work.
Currently, part of the problem is that the financial world is hidden. Oh just trust us, we know what we are doing. Well after 2 bubble bursts, people are really wary of investing in anything, because there isn't any reliable information and there isn't any repercussion if someone lies about financial dealings.
So I don't think repealing Sarbanes-Oxley is the answer, unless something is put in its place that will help give investors confidence in their investments.
I for one have pulled completely out of the market and I know of others that have also. Now the big question is if and when do we get back in. Right now there is nothing happening in the financial market, that indicates to me that things are going to improve. So why should I put my money into something that is going to crash again in 2 or 5 or 7 years.
He who said 1,000,000 monkeys on 1,000,000 typewriters would eventually type the great novel, never saw an AOL chat room
1: Cancel all H1/L1 programs indefinitely, but with a condition that they return at some point in a more regulated form. 2: Reclassify transplant manufacturers as import manufacturers of that particular nation and tax accordingly. 3: Zero taxes on businesses that would comply with a strengthened "Patriot Business" standard. That is, loopholes would be removed. 4: Domestic preference for education and funding thereof at all levels. 5: Put a moratorium on new fuel taxes or changes that effect an increase of any kind. 6: Revert all of the environmental standards for vehicles to 1980's standards.
I own a small business and have been considering hiring someone part time. Unfortunately I have no idea what paperwork needs to be filled out. What do I need to know as far as taxes, etc? If I could simply say, "I'll give you X dollars for N hours of work." It would be much simpler AND there would be one less out of work programmer.
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should be:
FASB's acc
I work in disconnects for businesses for a major telco, and we have a lot of auditing requirements due to SOx. I'd hate to think of what records would look like without these requirements. Sure people can still cheat, but it's also a CYA for the company that is doing the reporting.
There is still slamming now and then, but there are far fewer disconnects in error, where the telco is at fault. Usually it is the business customer not knowing which location they actually wanted to disconnect on their side, or not reading what they wanted to disconnect.
It would be nice to not have the reports. But you know if a business is not required to do it then there will be no tracking of any type done, which is where major abuses take place.
I don't mind doing the reports in addition my normal workload because I'd been able to go over others work that I am auditing and get it back on track if there is a mistake in it.
Yes, let's get rid of all those pesky regulations that just get in the way of business. Deregulation has done so well over the last 8 years that it makes sense to get rid of the last few impediments to a Perfect World of prosperity for all.
Oops, wrong button. The second quote should be:
FASB's "mark-to-market" accounting rules forced AIG and Bear Stearns to admit that their liabilities had exceeded their assets, instead of allowing the companies to invent a price for the assets until the assets were finally sold.
For too darn long, companies could just make up prices for assets they wanted to value. Forcing the assets to be valued at what they're actually worth (i.e., what somebody will pay for them) is just common sense.
Too many qualified Americans rejected so that H1Bs can replace them (for the same money). Makes no sense whatsoever. Cancel the H1Bs.
SOX was passed so that politicians could look like they were "doing something" after the whole Enron debacle. Okay, fine; politicians have to look like they're "doing something"--but unfortunately for us, "doing something" involves passing new laws, and every law that passes is a minor freedom that is revoked.
The real irony of Enron was not that it was a failure of having the right regulations in place, but a failure of enforcement: the guys running Enron went to jail for breaking pre-SOX laws.
That's the thing that irritates me the most: politicians always have to look like they're doing something, when in fact, the right thing for them to do is nothing, except, perhaps, hold a hearing to find out why enforcement failed. And sadly, enforcement fails more often than not because we don't spend enough money on enforcement because we're busy trying to figure out how to enforce the new legal requirements.
The whole legal framework is bug laden and a perfect example of the Lava Flow Anti-pattern. What we need is for politicians to go through and rewrite the law to simplify it, rather than to add more and more layers of nonsense.
As a footnote, every time someone says that some section of our economy is insufficiently regulated, I laugh out loud: nearly every aspect of the financial system (such as financial derivatives) exist as a side effect of the current regulatory framework. It's not that we don't have enough regulations--it's because the existing framework is buggy.
It can be said of most government regulation that they hurt entrepreneurship. Sarbox is the most worst of them all but there are many such things. Than we wonder why business is leaving the state and going oversea. This is no what the intention is but there is this thing call unintended consecuences. That is practically a physical law of nature on the same level as Nuton's third laws. Whenever government makes regulations, irregardless of what is the purpose, than there are unintended consecuences.
One sure way that would work is to mandate that all products sold in the USA have a particular percentage of American Content; and this does not refer to simple "value added" per se.
What I am talking about is the gross importation of finished, ready-to-use goods like automobiles and other big ticket items. If this mandate were in place, there would be thousands of jobs created across this great land.
There was talk that Boeing's 787 Dreamliner is more than 67% "foreign!" This is unacceptable. There was a report that if the liner were just 70% American made, this would create 27,000 jobs.
Can we even count the jobs that have gone to Mexico and Canada? GM's Silverado and Suburban are all made in Mexico. Those jobs would be right here.
SOX is a bit player in a giant swindle. The jobs problem has nothing to do with the lack of venture capital. The problem is the economy is up to its eyeballs in debt, and there's no money to pay the interest due.
This is due to the debt-based nature of our financial system. See Money and the Crisis of Civilization and I Want the Earth plus 5%.
If the congress wanted to create jobs, it would issue interest-free money (such as Abraham Lincoln's United States Notes) and spend it directly into circulation on worthwhile projects. The most worthwhile project today is renewable energy technology. Wind farms are probably the best candidate, with hydrocarbon synthesizers to use all the power generated.
R&D on cold fusion and other paradigm-busting energy technology should get some money too - a Japanese researcher held a demonstration of his Cold Fusion setup in May.
Fixing the banking system is a good first step for restoring rosperity.
Learn the rules so you know how to break them properly.
www.teslabox.com
By limiting the number of boards you could participate on, there are now more job available to serve on the Board of Directors.
Skip ------ See the latest from http://www.anArchyFortWorth.com
Simple as that. The boat sinks when you try to make it float with too much brass on board, and you don't win wars with more officers than soldiers. Likewise, you don't run a business sensibly when most of your workforce is concerned with administration and organisation instead of production. There are productive companies here (Siemens, I'm looking your way) that are already called "banks with a real estate branch, and a production department so they don't have to adhere to banking standards".
Get back to production. Produce something that the economy needs instead of administrating your own demise.
And to do that, I do agree with the original poster. Get rid of worthless "auditing standards" that didn't produce anything but new jobs for more beancounters. The SOX doesn't do anything. It is another standard to fulfill to the barest minimum whenever some auditing goon arrives, who in turn doesn't care jack whether the company's bosses embezzle money but who just wants to check whether the requirements are met. Tell you something: The requirements are pointless. There are already more than enough ways to circumvent them and go ahead with the old fashion ripping off of investors that always existed. Either start really auditing (but then, some companies would get into serious troubles...) or do away with it. What we have now is a band aid that does at best cover up the bleed, but only 'til it's soaked. Then we slap on another band aid and hope nobody notices that the wound does not close and needs surgery. Yes, that's expensive and it could kill the patient, but either is better than having a thousand people bleed for blood donations time and again.
Ok, away with bad analogies. I'm sick of seeing my taxes being poured into companies that should by all means crash and burn. If you want to save them, save them. Pick them up, fire everyone from management (NOT the workers, please, they're the one that MAKE money, management is what BURNS it!) and replace them with people who can do their job. I really don't understand why one would give people who have clearly shown they are incompetent and unable to handle the responsibility even MORE money to sink MORE money. Fire those fuckers, replace them with people who know their job, and you can have my tax money!
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Seems like an obvious solution.
Give a hand, not a hand-out.
Just let Steve and his wife get on with it.
C-x C-s C-x k
If only more companies followed the Ferengi rules of acquisition.
Rule of acquisition #35. War is good for business.
We are currently at war. If more businesses catered to the war effort there would be more jobs... Doesn't matter if it is in Silicon Valley or not.
Some days I get the sinking feeling Orwell was an optimist.
A refresh of the patent system, in the sense that the ownership of a patent could not be transferred away from the original inventor, might go a long way toward reinvigorating innovation. It's a personal thing, then -- making it worth your while to innovate knowing the patent trolls, law firms, HR policies and accountants can't take away your essential contribution, allowing you to stick your neck out without fear of some industry bullying you out of what's yours. Limit the transfer to licensing, but do not transfer ownership of the instrument itself, nor permit exclusive arrangements that are out of the original patent holder's control. This may or may not be how you do it, but people aren't going to invent if they can't reap the proceeds of their unique contribution to society. This may be excessively Horatio Algier, but dammit I have an idea to build something now and I'm afraid to commit it to paper.
Do not mock my vision of impractical footwear
Too many qualified Americans rejected so that H1Bs can replace them (for the same money). Makes no sense whatsoever. Cancel the H1Bs.
Same with the L1's and other areas. Have an indefinite moratorium on the practice on the condition that it can only return in a more regulated, transparent, citizen-friendly format.
How true, and it's a shame that they modbomb you in such a way.
could clients of banks somehow be able to make it so different levels of transparency were implemented electronically?
Look, I love Apple products as much as the next guy, but one Steve Jobs is more than enough for anyone.
The problem is how does one value an asset that one is holding and that one has not sold yet, since the real value of an asset is what I could get for it on the open market.
Mark to market simply says that I need to value that asset at the current going rate for similar assets on the open market.
Now here is where the banks got screwed, and the fun part about this example is that it is currently going on today. Say I bought a 10-year treasury bill for $70 five years ago which will mature in 10 years at a face value of $100, earning around 4% annual interest. What is that asset worth?
Well, you could say that the asset's value is growing at 4% compounded interest, so the bond is worth $85 today.
WRONG!!!
Mark to market says that the asset is worth what I could get for it if I sold it today on the open market. Well, in the open market there is such a rush for cash liquidity that people have been dumping their bond holdings (including treasury bonds). And as we all learned in Economics 101, high supply, low demand translates to depressed prices.
Which means that if I tried to sell that $100 treasury on the bond market, I may only get $50 for it.
So, according to mark-to-market accounting, my $100 treasury bought five years ago for $70, whose face value if I simply computed it's value by compound interest would be $85 is actually only worth $50. And it means if I have the regulatory requirement to have a certain asset to liability ratio, my treasury bonds, which are completely and totally secure--the U.S. Government so far has not defaulted on a single treasury--is insufficiently "secure" for accounting purposes.
It's the primary reason why some people want to do away with mark-to-market rules: because many mortgage backed securities were trading at perhaps 10 cents to 20 cents on the dollar, even when the most pessimistic default rates in the mortgage market would cause the underlying assets (the houses themselves) which comprise the mortgage backed security to be worth maybe 85 cents or 90 cents to the dollar. This 9x deflation in the face value of the instrument was what killed AIG: they had no choice but to value the asset lower than the underlying homes would have been worth in the event 50% of the land mass of the United States was destroyed in a nuclear exchange with the Soviet Union.
I mean, all those short-sighted boards focused on the next quarter to pacify greedy shareholders don't seem to be good for innovation or the long term.
Blar.
Everyone knows that taking in each other's laundry is the key to economic activity. We need a Federal law making it a crime to do your own laundry and a trillion dollars appropriated for the SBA to sudsidize laundry startups and soon we'll all have jobs.
What? You don't like folding laundry? Not to worry. The laundry industry will have to be properly regulated, of course: now that the free market has been discredited you'll be able to get one of the hundreds of thousands of Federal jobs inspecting and auditing licensed laundries. There will also be plenty of work policing the black market in home washers and supplies. Excess water consumption and/or too much greywater in your sewage will be grounds for a warrant. Plenty of work for all. Fill up the prisons, too. Boom time!
Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
The hell you say.
Problem: Americans are out of work.
Solution: More H1B visas!
Case closed.
How exactly is creating jobs a good thing ?
You believe the situation would be better without any public oversight and with large companies being controlled exclusively by select individuals (the people that own the company)? You don't want to see entrenched publicly traded companies challenged by newcomers? You honestly believe that publicly traded companies don't innovate?
You don't make the poor richer by making the rich poorer. - Winston Churchill
..this will create a LOT of *legitimate* jobs. Just think of all those 'coders' [more like Javascripters] who will be taking up arms.
Who *isn't* annoyed at all the 'senior developers' from Mumbai asking CHILDISH questions on LinkedIn and other places?
Who *isn't* annoyed at cleaning up basic student programmer mistakes as done by 'senior' programmers in Mumbai? Or their idea of so-called 'quality'?
Seriously. While Chinese, Filipinos and Eastern Bloc programmers/testers really bust their tails, is anyone going to miss the Indians or the Pakis? Or their 'cram schools'? Or their lackadaisical idea of schedule?
Demand is pretty much fixed. Wiping out cheap/shoddy/inferior labor supply is the way to 'fix' this problem.
War is a good way to do that. It's about time the Indians actually 'man up' and git'r done.
Seriously. A
Comment removed based on user account deletion
So . . . you have safe government bond that would return something in the neighborhood of 12% interest over five years if purchased for $50. I'll take as many of those $100 treasury bills that mature in 2014 for $50 as you can offer. In other words, this is totally ridiculous. And given the amount of my money that AIG has already gone through, I'd have to say those assets are probably overvalued at 20 cents on the dollar.
Step out the front door like a ghost into the fog . . .
"capital is no longer necessary to start companies"
That's right. Food is now free. Power and equipment is free. Rent has been abolished. Accountants are free.
Repeat after meee, everything is freee in the new economeee.
Progress would be the elimination of jobs. Then we sit back in leisure as our robot slaves toil for our benefit.
As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.
Price Waterhouse Cooper - one of the biggest SOX auditors - are also the brilliant investigators who audited Madoff.
If you can't find billions of dollars worth of fraud - the largest Ponzi scheme in history - I must question the purpose of audits.
Stop-Prism.org: Opt Out of Surveillance
...to lower the "taxes on the rich!"
The Left bitches about them getting tax breaks, but have you ever been employed by a person on welfare? No! It's the rich that invest, making jobs (when they're not taxed to death...)
It's no wrong to make money. George Soros does it all the time. And much of his stays off-shore. It's not widely known, but he's one of the biggest hedge-fund people of all time: "the greedy wall street".
But when a person makes more than his peers, it's 99.5% of the time, because of hard work. And when they invest it, they risk it, and almost always employ people.
Keeping ridiculous laws like this at bay are a big step...keeping it cheap to start a business in America is just as important.
What we need is fewer jobs to make more competition and get rid of the useless.
Engineering is the art of compromise.
That's exactly what happened a few weeks ago: a number of assets were being valued at a fraction of their face value and they're being dumped on the open market at fire-sale prices. It is precisely for this reason that the Treasury was looking at allowing banks to swap long-term bills for short-term treasury paper, in order to bolster the value of the treasury assets held by the banks.
Sadly many of these things seem only available to institutional buyers--otherwise, I'd go out there and start scooping up these cheap bonds myself!!!
Sarbanes-Oxley, generally hurts the economy because it places more restrictions and requires more bureaucrats and company employees to comply with.. but does little to actually prevent fraud.
There is a great myth out there that it's government that creates jobs or politicians that save jobs. The truth is, that where as it is possible for the government to provide someone with a paycheck, that is not a good thing for the economy because in order for them to get that paycheck they had to take the money away from the productive parts of the economy. Government doesn't have anything it did not take from someone else.
Government has a lot of power to do harm, but little real power to help the economy. For an example of this you can look at all the past stimulus and economic recovery packages passed in an attempt to prevent this current recession we are in. They fail at it not because they aren't trying or are trying the wrong things.. but because the economy is just too vast and complex for anyone let alone those economic wizards in Washington to control. Real economic forces are created by millions of real thinking people with real desires to do what they believe is in their own best interest, one would find it easier to map the human genome or remember all the stars in the galaxy than you would to be able to correctly predict market forces.
A government created job only makes economic sense if it is something people would have already paid for, and then if that is true.. then there is probbly no need to have them do it at all because private enterprise always does things more efficiently than government. The best thing government can do is get out of the way.
There are even cases where government prevents certain action by law to "save jobs". The following story from "The Adventures of Jonathan Gullible" of illustrates this:
--------
Jonathan walked for several hours without a glimpse of any sign of life. Suddenly, something moved in the thicket and a small animal with a yellow-striped tail flashed down a barely visible track. "A cat," thought Jonathan. "Maybe it will lead to me to other life." He dived through the thick foliage.
Just as he lost sight of the beach and was deep in the jungle, he heard a sharp scream. He stopped, cocked his head, and tried to locate the source of the sound. Directly ahead, he heard another shrill cry for help. Pushing up an incline and through a mass of branches and vines, he clawed his way forward and stumbled onto a wider path.
As he rounded a sharp bend in the trail, Jonathan ran full tilt into the side of a burly man. "Out of my way, runt!" bellowed the man, brushing him aside like a gnat. Dazed, Jonathan looked up and saw two men dragging a young woman, kicking and yelling, down the trail. By the time he caught his breath, the trio had disappeared. Certain that he couldn't free the woman alone, Jonathan ran back down the trail looking for help.
A clearing opened and he saw a group of people gathered around a big tree--beating it with sticks. Jonathan ran up and grabbed the arm of a man who watched the others work. "Please sir, help!" gasped Jonathan. "Two men have captured a woman and she needs help!"
"Don't be alarmed," the supervisor said gruffly. "She's under arrest. Forget her and move along, we've got work to do."
"Arrest?" said Jonathan, still huffing. "She didn't look like, uh, like a criminal." Jonathan wondered, if she was guilty, why did she cry so desperately for help? "Pardon me, sir, but what was her crime?"
"Huh?" snorted the man with irritation. "Well, if you must know, she threatened the jobs of everyone working here."
"She threatened people's jobs? How'd she do that?" asked Jonathan.
Glaring down at his ignorant questioner, the supervisor motioned for Jonathan to come over to a tree where workers busily pounded away at the trunk. Proudly, he said, "We are tree workers. We knock down trees for wood by beating them with these sticks. Sometimes a hundred people, working round-the-clock, can
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When you don't tax capital, it moves too quickly, and causes too much boom and bust. That's why western countries have rules against capital flight, and some european countries have a token tax - a fraction of a percent - for every stock transaction to slow people's overreactions.
Personally, I have a somewhat libertarian ideal - eliminate corporations as they are known, and remove the corporate veil of protection for most companies, except for special charters given to insurance companies and other temporary projects - bridge building, mass transit, internet service, etc. There's no reason to grant a corporation special status unless it is doing something beneficial for the community.
I think it would keep companies small and healthy, and keep large, sensible corporations very well regulated. Just require total transparency, and you'll keep the crooks out. But while the crooks are still ruling the White House, the rich are still making the rules.
...collectively, we need to realise that unemployment is a benefit of a technologically advanced society.
(props to, um, robert anton wilson maybe? or someone like him)
Genocide....
An SQL query goes to a bar, walks up to a table and asks, "Mind if I join you?"
Silicon Valley used to be about manufacturing. ICs were actually made here, along with many of the products that used them. Intel, National Semiconductor, and HP all had big manufacturing facilities in Silicon Valley. National Semi watches and HP calculators were made in Silicon Valley. Amdahl mainframes were made here. Dozens of disk drive companies made hard drives. Apple used to make Macs in Fremont.
When the manufacturing went offshore for cheaper labor, the production engineering followed. Slowly the fab technology industry moved to Japan and Taiwan. Then the actual IC design work went offshore. Now, the entire consumer electronics industry is outside the US.
Anyway, Sarbanes-Oxley doesn't apply at all while you're venture-funded. Only at the IPO stage does it matter. At that point, you have to provide a very detailed prospectus, which isn't a new requirement. Sarbanes-Oxley isn't that much of a hassle to comply with for a straightforward manufacturing company. Only when the financial structure is "creative", with special-purpose entities, multiple corporations under one parent, and similar gimmicks, is compliance a problem. That's why the WSJ is grumbling - it makes financial gimmicks less desirable.
Why we need more Jobs? I think one instance is enough.
I'm thinking more like "The Matrix" agents, but Jobs, all with black pullovers. About 300,000 of them.
They could come up with butt-loads of innovative, high tech devices, that we never before realized that we really needed.
Like, the iNose (helps you to avoid bad oysters), the iCrotch (helps you to avoid . . . um, never mind). And iSo-on.
The problem would be at the MacWorld keynote, when the announcer asked, "Can one of you Jobs come up here and give a speech?"
All 300,000 would charge up, and create conditions that the Large Hadron Collider could only dream about.
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
More soapbox wisdom from the aggrandizers at that shithole, Techdirt. It's in their charter to assemble flamebait out of rumor. Not news.
Often wrong but never in doubt.
I am Jack9.
Everyone knows me.
SOX was the reaction to a series of big financial scandals, with the Enron affair being the best remembered. But back then, the reaction of many financial experts was to point out the deficiencies of SEC oversight and the weaknesses of the American GAAP accounting rules. The suggested answer was to seriously improve SEC oversight and adopt international IAS standards for accounting.
Instead we got SOX, an only too typically American solution, which puts its faith in forms and auditing. I think at the root of this is the Protestant mindset brought along by the Pilgrim Fathers, which insists that if something is printed on paper it must be true. It is the same mindset that requires travellers to the USA to confirm in writing that they are not terrorists.
And we got -- yes! -- another big financial crisis, caused by lax SEC oversight and creative financial practices. Well, even bigger and badder, if that helps.
Some people never learn...
Ok, you've got my interest, but please state your affiliation. Are you involved with fairsoftware in any way? I read your previous comment, and that made me look the company up, but I didn't do anything at that point.
I've tried twice to start the same company (MMO games programming software house) in the last two years, but each time I've failed because the people who stated interest weren't really keen on the amount of work involved.
Skeptical I may be, interested I am, but I have a good memory, so be honest, are you affiliated? Or just a satisfied customer?
A learning experience is one of those things that say, 'You know that thing you just did? Don't do that.' - D. Adams
Bad example. Treasury rates have fallen. The mark-to-market value of your hypothetical bond would be something like $105.
A better example would be a corporate bond, where it's true that values have fallen dramatically. But then 'formerly solid' corporates (eg: GM & Ford, Bear & Lehman) are now revealing how risky they really are. The market isn't necessarily wrong in lowering the prices : risk premia have gone up for everything.
I might accept your argument for accrual accounting if the money funding the asset purchase was also long-term (match funded), since then the accounting artifacts wouldn't matter so much. But, basically the whole credit crisis has been caused by a fundamental funding mis-match : investors were funding 30-year mortgages using 3-month money (with the additional assumption that houses would continue to rise in value at 4% p.a. ad infinitum).
Something had to break.
Madoff leveraged auditors Friehling & Horowitz to pull off his scam. Where did you read PwC?
Wildfires, earthquakes, and floods do not time the market for the "right" time to liquidate. If AIG was hit by a large claim (they are an insurance company after all) that required that they dip into their assets, what value would they have gotten when they liquidated their hypothetical bond? The amount that they could sell it for that day. If AIG cannot raise the funds it needs to service its customers, it defaults and the US government picks up the tab. These are the reasons for regulations on insurance companies and for Mark to Market.
Well, what I have noticed is they changed the way they report total unemployment figures. A lot of people who are unemployed are not counted, and even then it is close to 7% now, with a half million job losses just in November. Real unemployment is probably a lot closer to 10% right now by the older rules, which is not "low". And in some states like in the rust belt, it is well into the teens already. They cook the books, man. Just like they decided to take food and energy costs out of the cost of living index, it makes it look better. Just like they stopped publishing the real M3 stats, they can play make believe that inflation isn't rampant.
You'll never roll back Sarbanes-Oxley. The accounting firms' own too much of Congress. It's all about funneling billions into the hands of accounting firms, so they can keep paying off Senators and Representatives. This is very little different than any other government intrusion regulating private enterprise - completely ineffective in it's stated goals, but funnels lots of cash into those that "contribute" to elections.
The first pillar of Basel II already addresses your issue regarding the risk of sovereign debt.
AIG was killed by ridiculous exposure to credit default swaps, not CMOs on their books. It was predefined how they were to pay out in response to mortgage defaults (which they failed to model accurately).
With regard to banks, it's ridiculous to say that they got "screwed" as they were using the value of overpriced assets to overleverage during the credit boom. That rule works to their "benefit" in boom and forces them to stay solvent (or close) in bust.
Frankly the problem isn't that MTM rules are being used too strictly, rather they are being applied too loosely--and we have walking dead banks that NEED TO GET CLOSED soaking up capital from the Fed and refusing to lend. The Japanese had this problem and are warning us not to repeat it.
This ain't rocket surgery, folks. Economics is really simple.
1. Repeal Sarbanes-Oxley
2. Pass the Fair Tax
3. Nationalize the Federal Reserve
4. Privatize Fannie and Freddie
5. Cut capital gains taxes to near zero (1% sounds fair)
6. Repeal the death tax
7. Cut spending, cut spending, cut spending!!!
You'd have to hide to keep from working and money would flow into this country the likes of which even God has never seen.
Oh, and I know I'm dreaming,, but I'd like to see the death penalty for politicians who betray the public trust.
Sarbox kills productivity. I have a customer who won't let me log in to do work because their auditor claims that if they ACTUALLY LET ME WORK, they'll have no control over, nor knowledge of, what I've done -- and Sarbox requires that they have both. It's an evil law and MUST DIE.
Don't piss off The Angry Economist
There are many bad things about SOX, PCI-DSS, HIPAA etc.
But let's not throw out jr. with the soapy water...
To some degree, writing and re-writing systems to meet the various strictures brings jobs to me and the slashdot groupies.
And in some cases, the regulations embody things that should have been common sense proper practice. By and large, the corporations that were doing things in a ludicrous, lazy and irresponsible way are the ones that forced the government to act and are complaining the loudest now. You don't believe the government likes to actually do anything do you ?
Nothing is all good or all bad in this world (outside of christian radio stations) and these regulations have good and bad in them.
Nullius in verba
Roosevelt famously saved the banking system in his first 7 days in office. On the 8th day, when asked what he was going to do next, he said "I think it's time for a beer," and got the ball rolling to repeal the alcohol prohibition. The newly refreshed alcohol industry was like a stick of dynamite to the economic log jam. How do you put people back to work? Legalize and tax America's number 1 cash crop and start teaching people how to grow.
Help us build a better map!
How much would you pay for swamp land in Florida? Those homes (and their mortgages) are worth as much as people are willing, or able, to pay. If you've got lots of homes that cost over a million to build, but you only have a few millionaires and most people with far less in assets and income, then only the nicest homes that can actually be sold to the millionaires are worth that much. The rest are only worth as much as people are capable of paying for them. So you can sit on them until inflationary pressures raise incomes to the point where the homes are affordable (and thus lose the value to inflation over time, and pay the property taxes during that time) or you can take the hit now and sell the homes at the price people can afford. At least then you can reinvest your remaining money in a different venture and maybe recoup part of your loss.
Those securities may be worth more than 20% of face value, but they're worth a lot less than 80% or 90%, because the values of the houses they covered was often hyper-inflated due to too easily accessible credit and occasional deliberate over-assessment by some involved in the house purchase cycle (realtors, mortgage brokers, speculators). The house prices those securities depend on are now adjusting to the real value of that real estate in a sane lending environment.
The reason why the mortgage-backed securities are at 20% of face value is that the banks or managing agencies don't want to have to pay the property taxes on empty houses for 10 years and yet there's no qualified buyers to sell to. Renting the properties isn't a solution because market rental prices can't cover the mortgage payments. If the defaulters can't pay the mortgage payment, then they won't be able to pay rent to cover the same so the owners will still take a partial monthly loss even if they managed to rent the place while looking for buyers. The boomers with cash are retiring and they don't want their money tied up for the 20 years it's going to take before those homes can be sold without taking a bath at even half of the last assessed value. Due to deregulation, the banks are over-leveraged, so they can't afford to take the loss over that long a period of time. So the house prices are dropping and they are going to continue to drop (in real terms initially or against inflation longer term) for quite a while and the value of those securities is reflecting that.
That's what you get when you try to treat a durable good as a commodity that people can play speculation games with. When enough speculators decide to leave the inflated market for some reason, market values readjust to their natural state. Have you checked the price of crude oil lately? An inelastic demand curve can account for some of the recent roller-coaster ride in that market, but oil demand isn't so inelastic as to account for >3x price fluctuations on relatively small consumption changes (percentage wise). Speculators who manipulate prices suddenly developing a need for liquidity and pulling out of the market on the other hand...
Laissez lire, et laissez danser; ces deux amusements ne feront jamais de mal au monde. - Voltaire
it's not as simple as you make it out to be. For one, you don't know how many homes in that bond will default. That's a huge landmine, and now the economy's starting to slump, many people can barely afford the homes now, and their rates are only going to go up for a large number of them... Meanwhile, housing prices are slumping 'cause the economy's taking a crap. So what you say, the people default.... the last thing you want is them to default.
You first have to kick the people out,that'll often take 6ish months to go through the courts. In the meantime you'll have to worry about the cost of homes going down further, marketing the home for sale, maintain it until it's sold, Get insurance on it, pay taxes on it, heating it so the pipes do not break, hope it's not vandalized, hope the people you kicked out of it didn't destroy it, and most importantly pay people to handle all the listed items, and god knows what else i missed.
I feel it's quite reasonable that people freaked out when they realized their risk exposure was MUCH higher than they were let to believe, so if anything, there should be more regulation requiring MORE transparency.
Troll, Troll, go away and flame again some other day
I am not quite sure how recycling lots and lots of existing code leads to "groundbreaking" software.
I am not even convinced that code is the roadblock.
Microsoft gambled on "the ribbon" and won.
But Microsoft has the money and manpower to study office work and the office worker in depth.
It can bring graphic and UI design teams into the picture. Experts in a dozen specialties. It can recruit thousands or tens of thousands of test subjects.
The developer living out his fantasies of independence on a diet of Jolt Cola and Ramen Noodles isn't going be able to do that.
Honestly, a lot of board members in companies are worthless. It's ridiculous when, say, a CEO of an airline company is a board member of a tech company. What does he know about it? The only reason they're there is because they know how to make their shareholders money, but nothing about the company they're sitting on. The lowest levels of corporate who actually do the work that keep the company going could probably innovate much better than the head honchos.
In times like massive economic fail like what we're going through now, I can only sit back and laugh at the tanking stock market and everybody running around like chickens with their heads cut off as if it was some surprise. What were they thinking? Oh, yeah, only short-term gains (like cutting labor in America), the consequence is a long-term slump and a lot of money lost. Maybe if they had nurtured their company instead of constantly worrying about immediate profit, they would've came out ahead.
... and mate it with another - preferably of the opposite sex and preferably married.
Viola. More Jobs. ;o)
Heh heh.
Yeah - I know - So that was just a tad bit too microsoft even for here. But hey - its Christmas Eve already and an hour ago I finished work for the year. :o)
'Creating jobs' isn't necessarily a good thing, no matter how many times people say it.
What really matters is output and a person's time. It's possible that more jobs will output more, whilst also offsetting the disadvantage of the time taken for that new job.
However, ideally, we should be looking to *reduce* jobs, whilst maintaining efficiency/output, or even increasing efficiency. When certain tasks become automated, that happens naturally, and it doesn't become a loss of output, but frees up someone's time. Which is a Good Thing.
In the end, we can use that time for socialising and become explorers, artists, composers, writers, thinkers, recreationists and scientists/researchers (that's not so easy to automate of course).
Leaving the work to robots/computers.
Why OpalCalc is the best Windows calc
Good God.
There are high schools that teach this stuff. Community colleges. It may be called "Adult Education" or "Community Outreach." Classes are to be found everywhere, including your local Senior Center and Public Library.
I agree with the author's proposal of deregulation (at least of the stupid parts of SarbOx).
But he's a journalist, not an economist or a lawyer; ergo, he doesn't really know anything about the subject about which he is pontificating. Why should we listen to him?
Is Capitalism Good for the Poor?
Which means that if I tried to sell that $100 treasury on the bond market, I may only get $50 for it.
I know you're just using it as an example, but you're flat-out wrong. You might get $101 for that $100 t-bill.
There has been enormous demand for t-bills, because there are large pools of money that want low-risk investments. Having been burned by AAA-rated securities guaranteed by large insurance companies that turn out to be worthless, there is a flight to quality. Demand for US t-bills has been so high that the return has actually went negative.
In this market, people are willing to loose money so that they are guaranteed the return of almost all their capital.
So, according to mark-to-market accounting, my $100 treasury bought five years ago for $70, whose face value if I simply computed it's value by compound interest would be $85 is actually only worth $50.
How else can you determine the value of an asset? What you are proposing is making up the value just because you think it is worth that much. You could be right OR wrong.
You think the guarantee of the US government is good, but other people might not think so.
Or, you think the guarantee of the US government is good, but you might think the US dollar is going to rapidly decline against other currencies, so the value of a US t-bill would be less on the world market.
Or, if interest rates shot up to 11%, the value of your t-bill paying 4% would drop significantly.
How can you judge the relative default risk of US t-bills, German t-bills, Equador t-bills? The market is usually good at that.
And it means if I have the regulatory requirement to have a certain asset to liability ratio, my treasury bonds, which are completely and totally secure--the U.S. Government so far has not defaulted on a single treasury--is insufficiently "secure" for accounting purposes.
Because they aren't totally secure. They are probably the most secure thing you can buy, but there is still a chance that the t-bill MIGHT not be paid. It is possible for the US government NOT to pay. After all, a year ago, would you consider that the government of Iceland wouldn't make good on its promises? Today that is a real possibility.
The way the US government has been spending huge amounts on TARP funds and other bailouts, and further problems with the economy, the default risk on t-bills today is probably higher than it has been in 15 years. While I doubt they would default on t-bills, who knows what the new US administration & congress will do?
It's the primary reason why some people want to do away with mark-to-market rules: because many mortgage backed securities were trading at perhaps 10 cents to 20 cents on the dollar, even when the most pessimistic default rates in the mortgage market would cause the underlying assets (the houses themselves) which comprise the mortgage backed security to be worth maybe 85 cents or 90 cents to the dollar.
Then I'm sure some bright person will swoop in, buy up the distressed debt, and make a killing when the markets return to sanity. Why don't you do that?
85 cents or 90 cents on the dollar? Ha! Real estate in many, many areas has declined by far, far more than that. In some areas real estate prices have fallen by 50% or more.
Add to that some of the ridiculous rules in some areas that make it difficult to foreclose on a house. In California, you can now live in your house for a year without making a single mortgage payment. That's nice for the homeowner, but lousy for whoever owns the mortgage.
It seems the only way to judge if a mortgage backed security is worth anything is to fully investigate the underlying assets, sinc
Then there's an opportunity for some Silicon Valley co to create great software to simplify the Sarb-ox. reporting so that it's not an impediment.
Table-ized A.I.
Republican dreaming....yawn. It just lets the greedy get greedier until they stumble and fall on the middle class in a nasty Ponzi crash.
Eliminate capital gains taxes. The total revenues raised by capital gains tax is around 117 billion a year, which makes an interesting comparison to the magnitude of bailouts already appropriated.
If cap gains tax was eliminated, there would be an historical market rally. The current strategy of trying to stimulate the economy with ever-larger doses of inflation can't work: see Zimbabwe.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
we have walking dead banks that NEED TO GET CLOSED
The worst part of having zombie banks around, is that as long as the Fed refuses to let them die, there's no way to tell who's solvent and who isn't. That being the case, the only prudent thing to do is sit on whatever cash you have.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
If complying with SEC rules is such a problem, there's an easy solution. Have the real (US) company owned by a corporation in a different country, and do the IPO in that country. US entities are allowed to invest in foreign countries and vice versa.
The fact that companies still prefer to have their IPO in the US means that it's not such a big problem, or that the extra trust engendered by the SEC is worth the extra cost.
-- Support a free market in the field of government
... As someone who works (as a regular peon) in a company that used to be a startup but then got sold to "the man" I couldn't agree more.
Our company was a far-ahead-of-everybody-else leader in our sector. Then, six years ago, we got bought by a large public company (finance industry). Ever since then, we have done NO progress whatsoever. The only thing we've been working on is various audit compliance, and implementing different obstacles in progress's place (Sarbanes Oxley being the main one).
We have long gave up the mantle of leadership to other companies. SoX needs to GO!!!
Posting as AC because I would still like to remain employed there (for time being)
One of the best things that we could do to promote new job creation, is to bring down the barriers to public equity for small businesses. As things stand today, it's just not realistic to go public until you need at least ten million bucks in funding, just because the regulatory requirements for public trading are so onerous.
If local businesses could sell shares to the public, then a lot of people would invest in their own communities, entrusting their capital to people they actually know and do business with, instead of handing it over to enormous mutual funds. For the small businessman, being able to raise private capital means he doesn't have to get bank funding and pay interest for his operating capital.
The SEC doesn't protect us from the likes of Enron or Bernie Madoff, and it's not at all surprising that they fail at their ostensible mission. The SEC has nothing to lose when they fuck up. No bureaucrat is going to lose his job for ignoring the warnings and red flags they should have acted on. In fact, just like the public schooling cartel, the SEC will probably get more funding because they failed to do their job.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Think about what you just said. As long as Congress is willing to fund the FDIC, might as well take 3.5% interest on your deposit at a questionably solvent bank.
You only need $10M to get in on the TALF offerings starting in Feb.
What? If you can't mark to market what can you mark to, fantasy? You sound like someone with self-interest in not marking to market.
The FDIC is another mistake, just like the FSLIC. It forces honest banks to pay for the crooks.
If people want deposit insurance, they should buy it separately from a private party, which will have an incentive to investigate the bank and set their premium accordingly.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
The fact is that Mark to Market generates false valuations, especially in volatile markets, which is what we clearly have and is (a) easily manipulated (b) daft. It is a BAD rule that only Americans would defend, and it needs to go, not to nothing but to a properly regulated "fair value" rule.
But it is not only MTM, but also the toleration of Naked Shorts, the abolition of the uptick rule that has set the stage for unprecedented volatility whereby the same people will extract fees and profits from the bailout money.
You need some regulators who arn't dishonest dumb or blind and prosecutors with a robust view of fraud and misrepresentation. That way walking dead banks can contribute to the infrastructure programs by having their management in road-gangs.
Believe me, the rest of the world, having been nagegged and bullied by the US have had enough so dont think that the EU and China wont insist that Obama establish a much more transparent system.
but.. but.. but.. Hasn't this collapse showed us that it doesn't matter if you've got insurance because its perfectly OK for your insurer to say "whoops, we cant actually cover that", declare bankruptcy and have the CEOs drown their sorrows on their private yachts? (I know bugger all about the bizarre and wonderful world of accounting, money and polities so please enlighten me to how insurance 100% guarantees my money)
I don't know how many of the people posting about Sarbanes in this thread have actually had to do implementation work in their companies because of it, but I can tell you as someone who has done extensive work on it that it's a way over the top for businesses without huge amounts of resources; that doesn't mean we should scrap it altogether. I've had to do work on change management, privilege separation, accounting, and data reconciliation to support S-O; it's extremely painful. The requirements are probably fine for companies with many hundreds to thousands of employees, but for ones that are 200, 100, or less, it should be seriously scaled down. There should be several levels. Something like:
S-O Max (5000+ employees)
S-O Large (1000-4999 employees)
S-O Medium (500-999 employees)
S-O Small (100-499 employees)
S-O Mini (99 or less)
Each one would have progressively more requirements. For example, at S-O Mini and Small, you'd have much more lax privilege separation requirements (sometimes the DBA is also the Systems Admin) but at S-O Large and Medium, you'd have to have a separate DBA, Assistant DBA, DB Backup operator, Systems Admin, and System Accounting people. The idea of S-O is good, and it seems fairly well thought out if you've read the documentation surrounding it and some of the checklists; the current blanket approach, however, is far too onerous.
please enlighten me to how insurance 100% guarantees my money
Nothing guarantees your money 100%, even if government pretends otherwise. If you buy deposit insurance from a private party, you should do the same due diligence as you would to protect any other transaction.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
At first I thought "How To Create More Jobs" meant they were cloning Steve Jobs. Well... then again... maybe they are...
If you don't think that SOX is necessary, then you don't understand what it does.
Sarbenes-Oxeley is forcing all public companies to formalize their financial processes. What it is akin to is forcing programmers to document their code, not just comment it, but to create product and design specifications. This is so that it creates transparency so that outsiders, such as investors or auditors, can understand the flow of finances throughout the company. For most large companies, it probably didn't make a huge impact, but where it did make the most impact was for small and medium-sized public companies. It sucks, but it protects investors.
Why did they implement it? Because of the widespread fraud from the dot-com boom/bust. Before some fly-by-the-night startup can go IPO and make billions of dollars, they will need to submit themselves to this formalization of financial processes so that people can understand exactly what is going on. It sucks, it is onerous, but it is necessary.
i've worked at two publicly traded tech companies in the sales department. it is way worse than this article describes. besides the larger trends described, there are opposite effects that drive innovation out of the google type firms the author says are centralizing technology. the revenue recognition requirements on newly innovated technology for a publicly traded firm is so onerous that publicly traded companies simply get out of certain lines of business rather than go through this. for those of us keeping score at home: a small company can't do it for reasons described in the article, and large companies can't do it for reasons i describe. the whole SOX debacle is revenge of the bean counters. THEY were at fault for not calling enron on their bullshit, and now THEY are punishing US to "ensure" it will never happen again. had they been doing their jobs honestly to begin with, enron, et al would never have happened. now bean counters are enriching themselves by being the "expert" that can get ordinary transactions approved by the auditors. forget the complicated stuff. we REALLY need to throw off the yoke of excessive regulation if silicon valley is ever going to take off again.
Whats up SmackDot! Sarbanes Oxley is the shit, I am lovin' it.
Personally, I think it's time some of these guys went to jail who are misusing public money. What we need is ENFORCEMENT of the laws already on the books. Not new laws that nobody goes buy.
Personally, if we have to do without startups is that the worst thing? You have to admit some of those businesses were going through cash like it was out of style. I heard something on tv that I think is very true, "bad deals don't get done during the bad times."
I think banks should only be in the business of making loans. Not selling them to other people. The "old fashioned" banks are doing well.
Value Added Tax already does what you propose, except it only applies to things you buy. Some countries has a VAT of 25%, eg. Denmark, but they do also give free healthcare and education to all their citizens.
that I can move out of my parent's place? That I can stop competing on freelance sites against Ishmar in the Middle-East who only needs .50 cents to live per day, and Mishmish from India who only needs $5.59 a day to eat five full meals AND feed her kid??
Thanks...
Where did you read PwC?
Reuters:
http://www.reuters.com/article/governmentFilingsNews/idUSBNG7477320081218
"Dec 18 (Reuters) - Fairfield Greenwich Group, the fund whose clients
stand to lose $7.5 billion in Bernard Madoff's alleged $50 billion Ponzi
scheme, is considering suing its accountants, PricewaterhouseCoopers
(PwC), for failing to detect the fraud, the Financial Times reported on
its website."
Stop-Prism.org: Opt Out of Surveillance
Here's what I'm wondering. The actual law that forces these financial institutions to close their doors is this one, that requires them to hold a certain amount of assets. Instead of loaning them money to pump up their assets, why not grant a temporary reprieve on the asset requirement?
You mean, how to create more Steve Jobs?
Buy yourself an apple!
w3woody:
Had there been such a nuclear exchange during the Reagan administration, 50% of the USA would have been left, and the rest could have been rebuilt.
The Bush administration has destroyed the financial system, the military, the international reputation, the civil liberties, the free press, the heavy industry, the high-tech sector, the economy, the Constitution and the heart of the USA. I doubt they will ever be rebuilt, because there is nothing left to rebuild them with.
I have travel around the world. I have been at places where there are 3-5 people behind one wicket (and one till) - ONLY ONE COULD WORK AT A TIME! I ask around and basically they all share in what would be considered a livable wage in the west. One person COULD do the job but then you would have the other people unemployed - in the policies of the government it is better to split that money up and have as many people working as possible.
Sarbanes-Oxley may be a factor, but I blame the corporate tax structure. Why do massive corporations pay 35% when medium sized ones pay 38%? It's almost like the government is actively trying to prevent innovation and growth.
One of our competitors trademarked the term "hypothesis". From now on, we will call them "boneheaded ideas".
Are there specifics? I have no doubt that it's difficult or impossible to sell non-governmental assets because (a) nobody understands them and therefore can't value them, and (b) any asset tied in any way to U.S. home prices or U.S. corporate success has no obvious bottom. What I don't believe is that I can buy 5 year treasury bonds (or the equivalent) that pay 10% or more.
On the other hand, I can totally understand why the Treasury would want to allow easy swaps from long to short term debt, just not at those prices.
Step out the front door like a ghost into the fog . . .
By lowering taxes.
---- Booth was a patriot ----
Remove the veil of corporate protection from officers and members of the board of directors. Make them, explicitly, jointly and severally, personally liable for all debts and obligations of the corporation. Make them criminally liable for any acts committed by the corporation.
Then you can eliminate SOX. There will still be problems, but you'll have asses to kick.
Is it just my observation, or are there way too many stupid people in the world?
it doesn't matter if you've got insurance because its perfectly OK for your insurer to say "whoops, we cant actually cover that"...
As opposed to the FDIC?
So, FDIC insurance is wonderful, unless there's an actual bank crash. To put things in perspective, Wachovia had 420 billion in deposits. A bank run would make the FDIC fairly meaningless, very quickly.
I'd much prefer private insurance - they aren't very efficient, but at least they aren't government. They also tend to spread the risk around a bit more.
Sure, California has its plesant climate for most of the year, but it is also one of the most expensive states to operate a business and to live in.
Not to appear to be thinking of myself (being a St. Louisian who is currently unemployed), but it is far cheaper to operate in the Midwest. I could understand operating on a coastal area if there was something to export, but a river can do just as well, just be sure to get out of its way when it starts to flood if you don't build in a proper place. (Tip: Building on bluffs is way better than building in a floodplain. I'm talking to you, New Town St. Charles!)
But the TCO in St. Louis is far less than the TCO in San Jose, San Francisco, or Los Angeles.
Best of all, we don't catch fire every few days!
The biggest concern of any Tech company on the West Coast that frightens the rest of the company is the concern that some of the big technology companies on the West Coast may be destroyed in a firestorm. I feared for my webhosting service provider's welfare this summer after the great fires that roared through Southern California. Though it did not suffer the damage of fire, the fact that smoke had creeped into their office building was reason enough to stay awake at night.
The Rapture is NOT an exit strategy.
This 9x deflation in the face value of the instrument was what killed AIG
AIG died because they wrote credit default swaps without having anything to back it if things went south. And things went south.
There are 0x40000000 types of people: those who understand 32-bit IEEE 754 floating point, and those who don't.
It sounds like scapegoating to blame SO. Silicon Valley has matured and is no longer going to grow like it did in its youth. Like any other mature industry it is not going to produce jobs or attract vc like it used to. Blaming SO for this is refusing to face reality.
While I realize that this article mostly concerns the impact of accounting rules on job creation in this "sluggish" economy, do other /. readers wonder--as I do--how much of a chilling effect can be attributed to laws unreasonably placing &/or removing 'IP' from the public domain?
Many have observed that these changes have had the effect of stifling innovation; wouldn't relaxing 'protections' help to stimulate job creation?
Here Here!
I have to run for the holidays, but here's my small opinion:
We have so much compliance in our 2 person financial planning business (I know we're talking about silicon valley) that it is OUT OF CONTROL. Either you have to work yourself into the ground to do a good job AND file all necessary compliance, or just be lax about actually doing a good job for clients in order to comply and make sure things look nicey-nice. That is, unless you're a big office with multiple staff and planners, which really just turns into sales anyway rather than job well done.
I KNOW we're talking about Silicon Valley, but I'm telling you it's happening all over. We are hobbling all sorts of industries with compliance issues at a time when we should streamline things. Yes, I know there's been fraud and we must protect workers' rights. I don't know how to deal with that part of the equation. It's going to happen no matter what as the big boys always seem to get a pass. Meanwhile the extra compliance and regulation is KILLING small businesses (who are actually trying to get the job done) like us.
SOrry to be a bit off topic, but I hope this brings a little perspective to the discussion.
Happy Holidays everybody!
-
Keynes never saw this coming, and Keynes couldn't explain it if he tried.
I spoke too soon.
Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of Society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.
John Maynard Keynes
Your brain is not a computer.
Low capital gains taxes create jobs and wealth. OK, why then, after eight years of capitalist policies and low taxes, do we have record unemployment and why is my 401k half of what it was before? Why hasn't the S&P moved an inch since Bill Clinton left office? Seems like low-tax theories show up everywhere except in investment returns.
I thought this was a cloning article.
blah
We all know that correlation isn't causality -- but the trouble with the argument put forth by Michael Malone (actually, echoed by him; it's an old argument) is that it doesn't even have correlation behind it. I have a hard time seeing correlation between the passage of Sarbanes-Oxley and the tanking of IPOs. IPOs tanked before SOX (and not surprisingly, just after the tech bubble burst). After SOX, they were on the rebound. This year they have tanked again (and not surprisingly, in one of the worst economic climates in recent times). Look it up. One may not like SOX, and there are certainly things about it that can be criticized, but it sure is hard to tie it to downswings in IPOs.
The high cost of gas this past year put a hurting on all of us, our economy and our society. We need to move forward as a society and utilize every available source of energy to lessen our use of foreign oil.It would cost the equivalent of 60 cents a gallon to charge and drive an electric car. The electricity to charge the car could come from solar or wind generated electricity. If all gasoline cars, trucks, and suv's instead had plug-in electric drive trains, the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of North Dakota. Why don't we use some of the billions in bail out money to bail us out of our dependence on foreign oil? This past year the high cost of fuel so seriously damaged our economy and society that the ripple effects will be felt for years to come. Why not invest in setting up some alternative energy projects on a national basis, create clean cheap electricity, create millions of badly needed new green collar jobs, and get out from under our dependence on foreign oil. What a win -win situation that would be. There is a great new book out called The Manhattan Project of 2009 Energy Independence NOW by Jeff Wilson. I highly recommend this book for anyone interested in alternative energy. www.themanhattanprojectof2009.com
I have got news for you: your agricultural produce will go to hell, your children and elderely will not be tended, you will not be served.
IANAL but write like a drunk one.
I totally agree with you on the naked shorts fraud, the crappy banks, and the very poor regulation.