Eliminate the Complexity

That’s my recommendation for the corporate tax:

Those advocating a cut in the corporate tax rate today generally ignore the tax on dividends, as well as many other provisions of United States and foreign tax law that may reduce the effective tax rate well below the statutory rate.

A recent study found that only . . . → Read More: Eliminate the Complexity

Perpetually Parsing Pensions

You know this whole debate over whether to get the pension fund to 50% funding may not matter as much as it may seem.  Or at least the problem may be so much worse than we think and that the numbers we assume are good turn out to be wildly optimistic.

The government accounting folks, . . . → Read More: Perpetually Parsing Pensions

Credit Restriction

From Prosperity and Depression: A Theoretical Analysis of Cyclical Movements, G Von Haberler, rev ed., 1939, published by League of Nations:

Prosperity comes to an end when credit expansion is discontinued. Since the process of expansion, after it has been allowed to gain a certain speed, can be stopped only by a jolt, theere . . . → Read More: Credit Restriction

Reintroducing the Enron Rule

I am bringing back an old thought that first occurred to me in 2001 after the collapse of Enron. Businesses exist to create real value for real people. Any business should be able to explain how the are adding value and for whom. Ideally, this should be a simple process; a sentence or at . . . → Read More: Reintroducing the Enron Rule

Fair Value Lying

Accurate, transparent, comparable and thorough financial statements are essential tools for performing mental calculations of value.  Being able to assess and weigh the performance of a going concern is vital for a holder of capital considering allocation to more productive uses which benefit humanity.  Trust in the accuracy, transparency, comparability and thoroughness of financial . . . → Read More: Fair Value Lying

Revenues accrued and booked, but never realized

Lok Housing & Constructions made the following disclosure during the just concluded Dec’08 quarter:

The global economy in general and the real estate industry in particular is passing through recessionary scenario, which has resulted in to financial melt down of un-precedential scale. From time to time the Company had entered several agreements for . . . → Read More: Revenues accrued and booked, but never realized