Tidbits on December 20, 2011
Bob Jensen at Trinity University

Happy Holidays
A link to some of my favorite cartoons received from friends over the years (Set 2)

www.trinity.edu/rjensen/tidbits/Humor/2011/Set02/Set02.htm

 

Humor Pictures Set 01 --- http://www.trinity.edu/rjensen/tidbits/Humor/2011/Set01/Humor2011Set01.htm

More of Bob Jensen's Pictures and Stories
http://www.trinity.edu/rjensen/Pictures.htm

December 15, 2011
Welcome to Paul's Photo Gallery --- http://www.whencanyou.com/index.htm

I received a holiday season letter from Paul Pacter. While sitting here like a frozen moose in the mountain woods, I dreamed with envy when he mentioned (Paul never brags) his recent visits to half the nations of the world (usually by invitation). That reminded me to look for recent additions to Paul's huge photo gallery on the Web that contains his outstanding photographs taken in so many, many countries. Paul is now a board member on the IASB such that he frequently has to take those long red eye flights between Hong Kong and London. He has apartments in both London and Hong Kong, but I think he mostly lives in hotels. He's a wonderful scholar of financial accounting and a shining star in the international accountancy profession. I've visited his bachelor pad in Hong Kong --- an expensive  pad truly to die for.

You can read more about Paul at
http://www.accountancyage.com/aa/interview/1807957/profile-paul-pacter-international-standard-setter

Added Jensen Comment
Years ago when I was finalizing my dissertation I arrived at my first full-time faculty position at Michigan State University. At the time Paul Pacter was already into his graduate studies at MSU where he eventually received an accounting PhD. Paul took the road less traveled in many ways. Although Paul has on occasion taught part-time since he graduated, Paul elected to go full-time with the Financial Accounting Standards Board, which is not at all common for a PhD accounting graduate facing so many more lucrative opportunities in universities in all 50 states and Canada. At the FASB he worked his way up across the years from "bag carrier" (his words)  to where he became project manager for various accounting standards.

Paul was never anchored down by marriage and children such that when an opportunity arose he moved to London and worked full-time on the staff of the International Accounting Standards Board. He was project manager on various international standards, including the controversial IAS 39 and more recently the SME standard. You can read about a historical presentation he made before IAS 39 was finalized ---
http://www.trinity.edu/rjensen/acct5341/speakers/pacter.htm in China. He located in the Hong Kong office of Deloitte where he later became employed by Deloitte while still performing his World Bank duties. Paul also became Webmaster of Deloitte's outstanding IAS Plus portal for Deloitte's technical Web resources ---
http://www.iasplus.com/index.htm
In addition to helping the IASB write some of its technical standards, Paul also helped the Chinese write their own accounting standards while trying to inch them closer to adopting IASB standards.

Then at long last Paul became a board member of the IASB. In his last letter to me, he mentions that he's beginning to think about retirement. Pow! It really makes me feel old when my students are contemplating retirement. In retirement it would be nice if Paul moved to the White Mountains and replaced me as an activist on the AECM. It would also be tremendous for the other AECM subscribers. But the AECM job is all work and no pay! Paul probably has better opportunities on the French Riviera.

Welcome to Paul's Photo Gallery --- http://www.whencanyou.com/index.htm

Paul mentions that this year he will be spending the Christmas season in Paris.

Sigh,
Bob Jensen

Blogs of White Mountain Hikers (many great photographs) ---
http://www.blogger.com/profile/02242409292439585691

Especially note the archive of John Compton's blogs at the bottom of the page at
http://1happyhiker.blogspot.com/

 White Mountain News --- http://www.whitemtnews.com/

 

Tidbits on December 20, 2011
Bob Jensen

For earlier editions of Tidbits go to http://www.trinity.edu/rjensen/TidbitsDirectory.htm
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.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.


Bob Jensen's past presentations and lectures --- http://www.trinity.edu/rjensen/resume.htm#Presentations   


Bob Jensen's Threads --- http://www.trinity.edu/rjensen/threads.htm

Bob Jensen's Home Page is at http://www.trinity.edu/rjensen/




Online Video, Slide Shows, and Audio
In the past I've provided links to various types of music and video available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/music.htm

David Attenborough Reads “What a Wonderful World” in a Moving Video --- Click Here
http://www.openculture.com/2011/12/sir_david_attenborough_reads_what_a_wonderful_world.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

‘A CHARLIE BROWN CHRISTMAS’: The gospel truth behind how a humble ‘Peanuts’ holiday classic defied the odds --- Click Here
http://www.washingtonpost.com/blogs/comic-riffs/post/a-charlie-brown-christmas-the-gospel-truth-behind-how-a-humble-peanuts-holiday-classic-defied-the-odds/2011/12/02/gIQA0NNPWO_blog.html

Jean-Paul Sartre Breaks Down the Bad Faith of Intellectuals --- Click Here
http://www.openculture.com/2011/12/jean-paul_sartre_on_the_bad_faith_of_modern_intellectuals.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

Ashland College Christmas Card ---   http://ecard.ashland.edu/2004admission/index.html

Happy Holidays from Auntie Bev --- Click Here

Flying By the Statue of Liberty --- http://www.youtube.com/watch?v=jZK5ip8ZIjY

Remembering Pearl Harbor --- http://www.navy.mil/ph70/index.asp?id=4

Two Pilots (African American and a White Guy) --- http://www.youtube.com/watch?v=agwnwqCdwl8

Animated Video Shows Curiosity, NASA’s Mars Rover, in Dramatic Action --- Click Here
http://www.openculture.com/2011/12/curiosity_in_action.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

Philosophy in Prison: Weighty Conversations about Right and Wrong --- Click Here
http://www.openculture.com/2011/12/philosophy_in_prison.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

Miniatur Wunderland: The World’s Largest Model Railroad --- Click Here
http://www.openculture.com/2011/12/miniatur_wunderland_the_worlds_largest_model_railroad.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

Crowded House: How the World’s Population Grew to 7 Billion People --- Click Here
http://www.openculture.com/2011/12/crowded_house_how_the_worlds_population_grew_to_7_billion_people.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

Stephen Fry Introduces the Strange New World of Nanoscience --- Click Here
http://www.openculture.com/2011/12/stephen_fry_introduces_the_strange_new_world_of_nanoscience.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

Conformity Isn’t a Recipe for Excellence: George Carlin & Steve Jobs (NSFW) --- Click Here
http://www.openculture.com/2011/12/conformity_isnt_a_recipe_for_excellence_george_carlin_steve_jobs_nsfw.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

DNA Replication Fork (animations) --- http://www.mcb.harvard.edu/Losick/images/TromboneFINALd.swf

NOVA: Journey of the Butterflies --- http://www.pbs.org/wgbh/nova/nature/journey-butterflies.html

Amazing Unicyclists --- http://www.youtube.com/v/BOjOGKu3jTc%26autoplay%3d1%26rel%3d0

Mountain Coaster (a little too long) --- http://www.youtube.com/watch?v=Kjw5GhyZUu0


Free music downloads --- http://www.trinity.edu/rjensen/music.htm

The Controversial Sounds of Silence: John Cage’s 4’33″ Performed by the BBC Symphony Orchestra --- Click Here
http://www.openculture.com/2011/12/the_controversial_sounds_of_silence_john_cages_433_.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

How Great it Is:  One-Man Quartet (remixed) --- http://www.youtube.com/watch_popup?v=dxCRIF0m79w&feature=related

Battle Hymn of the Republic (warning:  this music is too patriotic for children) --- http://www.greatdanepro.com/Battle Hymn/index.htm

The Lord's Prayer --- http://www.angelfire.com/ak2/intelligencerreport/bocelli_lord_prayer.html

Karita Mattila (spprano) In Recital At Carnegie Hall ---
http://www.npr.org/2011/12/09/143391909/karita-mattila-in-recital-at-carnegie-hall

The Poetry And Power Of Pianist Alessio Bax ---
http://www.npr.org/2011/11/09/142174929/the-poetry-and-power-of-pianist-alessio-bax

Web outfits like Pandora, Foneshow, Stitcher, and Slacker broadcast portable and mobile content that makes Sirius look overpriced and stodgy ---
http://www.businessweek.com/technology/content/mar2009/tc20090327_877363.htm?link_position=link2

TheRadio (my favorite commercial-free online music site) --- http://www.theradio.com/
Slacker (my second-favorite commercial-free online music site) --- http://www.slacker.com/

Gerald Trites likes this international radio site --- http://www.e-radio.gr/
Songza:  Search for a song or band and play the selection --- http://songza.com/
Also try Jango --- http://www.jango.com/?r=342376581
Sometimes this old guy prefers the jukebox era (just let it play through) --- http://www.tropicalglen.com/
And I listen quite often to Soldiers Radio Live --- http://www.army.mil/fieldband/pages/listening/bandstand.html
Also note
U.S. Army Band recordings --- http://bands.army.mil/music/default.asp

Bob Jensen listens to music free online (and no commercials) --- http://www.slacker.com/ 


Photographs and Art

Indiana University's Photo Archives (over two million pictures) ---
http://paper.li/businessschools?utm_source=subscription&utm_medium=email&utm_campaign=paper_sub  

Absolutely Fabulous 1939-1941 American History Photographs (most are not related to war) ---
http://extras.denverpost.com/archive/captured.asp

A Night in Macao --- http://www.youtube.com/watch_popup?v=uI2kO4qTi80&vq=medium

Sistine Chapel --- http://www.vatican.va/various/cappelle/sistina_vr/index.html
Move the mouse around

Shakespeare in the Parlor (Art, Illustrations, Drawings) --- http://www.americanantiquarian.org/Exhibitions/Printsinparlor/shakespeare/index.htm

The Baltimore Museum of Art --- http://www.artbma.org/

Aerial Photography: Florida --- http://ufdc.ufl.edu/aerials

Joplin Historical Postcards (Missouri) --- http://digital.library.umsystem.edu/cgi/i/image/image-idx?page=index;c=joplinic

Forgotten Detroit (buildings) --- http://www.forgottendetroit.com/

Kansas Collection Photographs --- http://luna.ku.edu:8180/luna/servlet/kuvc1kcp~1~1

Fifty Years of Bay Area Art: The SECA Awards --- http://www.sfmoma.org/exhib_events/exhibitions/437

San Francisco Cityscape --- http://www.sfcityscape.com/

San Francisco Historic Images ---
http://sfpl.org/index.php?pg=2000028501

Oz Collection --- http://special.lib.umn.edu/clrc/oz/index.php

Making a Difference Through the Arts [Asian Society] --- http://www.asiasociety.org/files/pdf/as_making_difference_report.pdf

Luminous: The Art of Asia [Flash Player] --- http://www.seattleartmuseum.org/luminous/index.html

Iran Chamber Society (information database about Iran_ --- http://www.iranchamber.com

Video:  5,000 Years of History in the Middle East --- http://www.mapsofwar.com/images/EMPIRE17.swf

West Texas --- http://player.vimeo.com/video/22132017?title=0&byline=0&portrait=0

Life of Flowers --- http://player.vimeo.com/video/27920977?title=0&%3bbyline=0&%3bportrait=0href=

HDR Skies: Beautiful Time-Lapse Film of the French Countryside --- Click Here
http://www.openculture.com/2011/12/ihdr_skiesi_beautiful_time-lapse_film_of_the_french_countryside.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

Bob Jensen's threads on history, literature and art ---
http://www.trinity.edu/rjensen/Bookbob2.htm#History


Online Books, Poems, References, and Other Literature
In the past I've provided links to various types electronic literature available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm

Center for the Book (Library of Congress) --- http://www.read.gov/cfb

High School Student Talks Symbolism with 75 Big Authors (1963) --- Click Here
http://www.openculture.com/2011/12/75_authors_talk_symbolism.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

Remembering George Whitman, Owner of Famed Bookstore, Shakespeare & Company --- Click Here
http://www.openculture.com/2011/12/remembering_george_whitman.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

Torn in Two: 150th Anniversary of the Civil War --- http://tornintwo.org/

Free Online Textbooks, Videos, and Tutorials --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm#Textbooks
Free Tutorials in Various Disciplines --- http://www.trinity.edu/rjensen/Bookbob2.htm#Tutorials
Edutainment and Learning Games --- http://www.trinity.edu/rjensen/000aaa/thetools.htm#Edutainment
Open Sharing Courses --- http://www.trinity.edu/rjensen/000aaa/updateee.htm#OKI




Now in Another Tidbits Document 
Political Quotations on December 20, 2011
http://www.trinity.edu/rjensen/tidbits/2011/TidbitsQuotations122011.htm           

The booked National Debt on December 20, 2011 was slightly over $15 trillion ---
U.S. National Debt Clock --- http://www.brillig.com/debt_clock/

From BBC News, December 13, 2011
Top Economists Reveal Their Graphs --- http://www.bbc.co.uk/news/in-pictures-16090055
Click on the Start Slide Show button

Crowded House: How the World’s Population Grew to 7 Billion People --- Click Here
http://www.openculture.com/2011/12/crowded_house_how_the_worlds_population_grew_to_7_billion_people.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

The January 2010 Booked National Debt Plus Unbooked Entitlements Debt
The GAO estimated $76 trillion Present Value in January 2010  unless something drastic is done.
Click Here |
 http://www.pgpf.org/~/media/PGPF/Media/PDF/2010/03/fiscalsustainabilityGAONationsLongTermFiscalOutlook03032010.ashx?pid={97E10657-8193-4455-871C-4E7A6A9EE084}
 

There are many ways to describe the federal government’s long-term fiscal challenge. One method for capturing the challenge in a single number is to measure the “fiscal gap.” The fiscal gap represents the difference, or gap, between revenue and spending in present value terms over a certain period, such as 75 years, that would need to be closed in order to achieve a specified debt level (e.g., today’s debt to GDP ratio) at the end of the period.2 From the fiscal gap, one can calculate the size of action needed—in terms of tax increases, spending reductions, or, more likely, some combination of the two—to close the gap; that is, for debt as a share of GDP to equal today’s ratio at the end of the period. For example, under our Alternative simulation, the fiscal gap is 9.0 percent of GDP (or a little over $76 trillion in present value dollars) (see table 2). This means that revenue would have to increase by about 50 percent or noninterest spending would have to be reduced by 34 percent on average over the next 75 years (or some combination of the two) to keep debt at the end of the period from exceeding its level at the beginning of 2010 (53 percent of GDP).

 

Peter G. Peterson Website on Deficit/Debt Solutions ---
http://www.pgpf.org/

Bob Jensen's health care messaging updates --- http://www.trinity.edu/rjensen/Health.htm




"Freakonomics: What Went Wrong? Examination of a very popular popular-statistics series reveals avoidable errors," by Andrew Gelman and Kaiser Fung, American Scientist, 2011 ---
http://www.americanscientist.org/issues/id.14344,y.0,no.,content.true,page.3,css.print/issue.aspx

The nonfiction publishing phenomenon known as Freakonomics has passed its sixth anniversary. The original book, which used ideas from statistics and economics to explore real-world problems, was an instant bestseller. By 2011, it had sold more than four million copies worldwide, and it has sprouted a franchise, which includes a bestselling sequel, SuperFreakonomics; an occasional column in the New York Times Magazine; a popular blog; and a documentary film. The word “freakonomics” has come to stand for a light-hearted and contrarian, yet rigorous and quantitative, way of looking at the world.

The faces of Freakonomics are Steven D. Levitt, an award-winning professor of economics at the University of Chicago, and Stephen J. Dubner, a widely published New York–based journalist. Levitt is celebrated for using data and statistics to solve an array of problems not typically associated with economics. Dubner has perfected the formula for conveying the excitement of Levitt’s research—and of the growing body of work by his collaborators and followers. On the heels of Freakonomics, the pop-economics or pop-statistics genre has attracted a surge of interest, with more authors adopting an anecdotal, narrative style.

As the authors of statistics-themed books for general audiences, we can attest that Levitt and Dubner’s success is not easily attained. And as teachers of statistics, we recognize the challenge of creating interest in the subject without resorting to clichéd examples such as baseball averages, movie grosses and political polls. The other side of this challenge, though, is presenting ideas in interesting ways without oversimplifying them or misleading readers. We and others have noted a discouraging tendency in the Freakonomics body of work to present speculative or even erroneous claims with an air of certainty. Considering such problems yields useful lessons for those who wish to popularize statistical ideas.

On a Case-by-case Basis

In our analysis of the Freakonomics approach, we encountered a range of avoidable mistakes, from back-of-the-envelope analyses gone wrong to unexamined assumptions to an uncritical reliance on the work of Levitt’s friends and colleagues. This turns accessibility on its head: Readers must work to discern which conclusions are fully quantitative, which are somewhat data driven and which are purely speculative.

The case of the missing girls: Monica Das Gupta is a World Bank researcher who, along with others in her field, has attributed the abnormally high ratio of boy-to-girl births in Asian countries to a preference for sons, which manifests in selective abortion and, possibly, infanticide. As a graduate student in economics, Emily Oster (now a professor at the University of Chicago) attacked this conventional wisdom. In an essay in Slate, Dubner and Levitt praised Oster and her study, which was published in the Journal of Political Economy during Levitt’s tenure as editor:

[Oster] measured the incidence of hepatitis B in the populations of China, India, Pakistan, Egypt, Bangladesh, and other countries where mothers gave birth to an unnaturally high number of boys. Sure enough, the regions with the most hepatitis B were the regions with the most “missing” women. Except the women weren’t really missing at all, for they had never been born.

Oster’s work stirred debate for a few years in the epidemiological literature, but eventually she admitted that the subject-matter experts had been right all along. One of Das Gupta’s many convincing counterpoints was a graph showing that in Taiwan, the ratio of boys to girls was near the natural rate for first and second babies (106:100) but not for third babies (112:100); this pattern held up with or without hepatitis B.

In a follow-up blog post, Levitt applauded Oster for bravery in admitting her mistake, but he never credited Das Gupta for her superior work. Our point is not that Das Gupta had to be right and Oster wrong, but that Levitt and Dubner, in their celebration of economics and economists, suspended their critical thinking.

The risks of driving a car: In SuperFreakonomics, Levitt and Dubner use a back-of-the-envelope calculation to make the contrarian claim that driving drunk is safer than walking drunk, an oversimplified argument that was picked apart by bloggers. The problem with this argument, and others like it, lies in the assumption that the driver and the walker are the same type of person, making the same kinds of choices, except for their choice of transportation. Such all-else-equal thinking is a common statistical fallacy. In fact, driver and walker are likely to differ in many ways other than their mode of travel. What seem like natural calculations are stymied by the impracticality, in real life, of changing one variable while leaving all other variables constant.

Stars are made, not born—except when they are born: In 2006, Levitt and Dubner wrote a column for the New York Times Magazine titled “A Star Is Made,” relying on the research of Florida State University psychologist K. Anders Ericsson, who believes that experts arise from practice rather than innate talent. It begins with the startling observation that elite soccer players in Europe are much more likely to be born in the first three months of the year. The theory: Since youth soccer leagues are organized into age groups with a cutoff birth date of December 31, coaches naturally favor the older kids within each age group, who have had more playing time. So far, so good. But this leads to an eye-catching piece of wisdom: The fact that so many World Cup players have early birthdays, the authors write,

may be bad news if you are a rabid soccer mom or dad whose child was born in the wrong month. But keep practicing: a child conceived on this Sunday in early May would probably be born by next February, giving you a considerably better chance of watching the 2030 World Cup from the family section.

Perhaps readers are not meant to take these statements seriously. But when we do, we find that they violate some basic statistical concepts. Despite its implied statistical significance, the size of the birthday effect is very small. The authors acknowledge as much three years later when they revisit the subject in SuperFreakonomics. They consider the chances that a boy in the United States will make baseball’s major leagues, noting that July 31 is the cutoff birth date for most U.S. youth leagues and that a boy born in the United States in August has better chances than one born in July. But, they go on to mention, being born male is “infinitely more important than timing an August delivery date.” What’s more, having a major-league player as a father makes a boy “eight hundred times more likely to play in the majors than a random boy,” they write. If these factors are such crucial determinants of future stardom, what does this say about their theory that a star is made, not born? Practice may indeed be a more important factor than innate talent, but in opting for cute flourishes like these, the authors venture so far from the original studies that they lose the plot.

Making the majors and hitting a curveball: In the same discussion in SuperFreakonomics, Levitt and Dubner write:

A U.S.-born boy is roughly 50 percent more likely to make the majors if he is born in August instead of July. Unless you are a big, big believer in astrology, it is hard to argue that someone is 50 percent better at hitting a big-league curveball simply because he is a Leo rather than a Cancer.

But you don’t need to believe in astrology to realize that the two cited probabilities are not the same. A .300 batting average is 50 percent better than a .200 average. In such a competitive field, the difference in batting averages between a kid who makes the majors and one who narrowly misses out is likely to be a matter of hundredths or even thousandths of a percent. Such errors could easily be avoided.

Predicting terrorists: In SuperFreakonomics, Levitt and Dubner introduce a British man, pseudonym Ian Horsley, who created an algorithm that used people’s banking activities to sniff out suspected terrorists. They rely on a napkin-simple computation to show the algorithm’s “great predictive power”:

Starting with a database of millions of bank customers, Horsley was able to generate a list of about 30 highly suspicious individuals. According to his rather conservative estimate, at least 5 of those 30 are almost certainly involved in terrorist activities. Five out of 30 isn’t perfect—the algorithm misses many terrorists and still falsely identified some innocents—but it sure beats 495 out of 500,495.

The straw man they employ—a hypothetical algorithm boasting 99-percent accuracy—would indeed, if it exists, wrongfully accuse half a million people out of the 50 million adults in the United Kingdom. So the conventional wisdom that 99-percent accuracy is sufficient for terrorist prediction is folly, as has been pointed out by others such as security expert Bruce Schneier.

But in the course of this absorbing narrative, readers may well miss the spot where Horsley’s algorithm also strikes out. The casual computation keeps under wraps the rate at which it fails at catching terrorists: With 500 terrorists at large (the authors’ supposition), the “great” algorithm finds only five of them. Levitt and Dubner acknowledge that “five out of 30 isn’t perfect,” but had they noticed the magnitude of false negatives generated by Horsley’s secret recipe, and the grave consequences of such errors, they might have stopped short of hailing his story. The maligned straw-man algorithm, by contrast, would have correctly identified 495 of 500 terrorists.

This unavoidable tradeoff between false positive and false negative errors is a well-known property of all statistical-prediction applications. Circling back to check all the factors involved in the problem might have helped the authors avoid this mistake.

The climate-change dustup: Rendering research conducted by others is much more challenging than explaining your own work, especially if the topic lies outside your domain of expertise. The climate-change chapter in SuperFreakonomics is a case in point. In it, Levitt and Dubner throw their weight behind geoengineering, a climate-remediation concept championed at the time by Nathan Myhrvold, a billionaire and former chief technology officer of Microsoft. Unfortunately, having moved outside the comfort zone of his own research, Levitt is in no better a position to evaluate Myhrvold’s proposal than we are.

When an actual expert, University of Chicago climate scientist Raymond Pierrehumbert, questioned the claims in Levitt and Dubner’s writing on climate, Levitt retorted that he enjoyed Pierrehumbert’s “intentional misreading” of the chapter. Referring to his own writings on the subject, Levitt wrote, “I’m not sure why that is blasphemy.” We’re not sure on this point either—we could not find a place where Pierrehumbert described Levitt’s writings in those terms. It is easy to be preemptively defensive of one’s own work, or of researchers whose work one has covered. Viewing alternative points of view as useful rather than threatening can help take the sting out of critiques. And if you’re covering subject matter outside your expertise, it pays to get second—and third and fourth—opinions.

Problems—and Solutions

2012-01MacroGelmanFB.jpgClick to Enlarge ImageHow could an experienced journalist and a widely respected researcher slip up in so many ways? Some possible answers to this question offer insights for the would-be pop-statistics writer.

Leave friendship at the door: We attribute many of these errors to the structure of the authors’ collaboration, which, from what we can tell, relies on an informal social network that has many potential failure points. In the original Freakonomics, much of whose content appeared originally in columns for the New York Times Magazine, the network seems to have been more straightforward: Levitt did the research, Dubner trusted Levitt, the Times trusted Dubner, and we the readers trusted the Times’s endorsement. In SuperFreakonomics and the authors’ blog, it becomes less clear: Levitt trusts brilliant stars such as Myhrvold or Oster, Dubner trusts Levitt, and we the readers trust the Freakonomics brand. A more ideal process for science writing (as shown in the illustration above) will likely look much messier—but it offers the promise of better results.

Don’t sell yourself short: Perhaps Levitt’s admirable modesty—he has repeatedly attributed his success to luck and hard work rather than genius—has led him astray. If he feels he is surrounded by economists more exceptional and brilliant than he is, he may let their assertions stand without challenge. Here it might be good to remember the outsider’s perspective so prized by Levitt: If you find yourself hesitant to ask questions that seem “stupid,” or if you feel intimidated, think of yourself as a “rogue.” Just don’t take it so far that you value your own rogueness over empirical evidence.

Maintain checks and balances: A solid collaboration requires each side to check and balance the other side. Although there’s no way we can be sure, perhaps, in some of the cases described above, there was a breakdown in the division of labor when it came to investigating technical points. The most controversial statements are the most likely to be mistaken; if such assertions go unchallenged, you will have little more than a series of press releases linked by gung-ho commentary and eye-popping headlines. Hiring a meticulous editor who can evaluate the technical arguments is another way to avoid embarrassing mistakes.

Take your time: Success comes at a cost: The constraints of producing continuous content for a blog or website and meeting publisher’s deadlines may have adverse effects on accuracy. The strongest parts of the original Freakonomics book revolved around Levitt’s own peer-reviewed research. In contrast, the Freakonomics blog features the work of Levitt’s friends, and SuperFreakonomics relies heavily on anecdotes, gee-whiz technology reporting and work by Levitt’s friends and colleagues. Just like good science, good writing takes time. Remembering this can help hedge against the temptation to streamline arguments or narrow the pool of sources, even in the face of deadlines.

Be clear about where you’re coming from: Levitt’s publishers, along with Dubner, characterize him as a “rogue economist.” We find this odd: He received his Ph.D. from the Massachusetts Institue of Technology, holds the title of Alvin H. Baum Professor of Economics at the University of Chicago and has served as editor of the mainstream Journal of Political Economy. He is a research fellow with the American Bar Foundation and a member of the Harvard Society of Fellows, and has worked as a consultant for Corporate Decisions, Inc. One can be an outsider within such institutions, of course. But much of his economics is mainstream. And his statistical methods are conventional (which, we hasten to add, is not a bad thing at all!). One of the pleasures of reading Freakonomics is Levitt’s knack for finding interesting quantitative questions in obscure corners, such as the traveling bagel salesman and cheating sumo wrestlers. Often such problems have not been extensively studied or even been noticed by others, and in these cases one is hard-pressed to identify any consensus or conventional wisdom. Often, in the authors’ writing, the “conventional” and the “rogue” live side by side. Chapter one of SuperFreakonomics, for instance, can be viewed either as a clear-eyed quantitative examination of the economics of prostitution, or as an unquestioning acceptance of conventional wisdom about gender roles. In exploring new territory, it’s especially important to be plainspoken about where your assumptions come from and what your primary ideas are.

Use latitude responsibly: When a statistician criticizes a claim on technical grounds, he or she is declaring not that the original finding is wrong but that it has not been convincingly proven. Researchers—even economists endorsed by Steven Levitt—can make mistakes. It may be okay to overlook the occasional mistake in the pursuit of the larger goal of understanding the world. But once one accepts this lower standard—science as plausible stories or data-supported reasoning, rather than the more carefully tested demonstrations that are characteristic of Levitt’s peer-reviewed research articles—one really has to take extra care, consider all sides of an issue, and look out for false positive results.

Continued in article

What went wrong in accounting/accountics research? 
How did academic accounting research become a pseudo science?
http://www.trinity.edu/rjensen/theory01.htm#WhatWentWrong

574 Shields Against Validity Challenges in Plato's Cave ---
http://www.trinity.edu/rjensen/TheoryTAR.htm


"Who Are the Top Technology Innovators in Higher Education?" by Marc Parry, Chronicle of Higher Education, December 12, 2011 --- Click Here
http://chronicle.com/blogs/wiredcampus/who-are-the-top-technology-innovators-in-higher-education/34638?sid=wc&utm_source=wc&utm_medium=en

This is only at the nominating stage at this point.
It is, however, informative to read the nominations already listed as comments to the above article.
I liked Paul Miller's nomination and try very hard year after year to serve accounting like Tom Bruce serves law.

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


"My Favorite Quotes About Teaching – Number One," by Joe Hoyle, Teaching Blog, December 9, 2011 ---
http://joehoyle-teaching.blogspot.com/2011/12/my-favorite-quotes-about-teaching.html

Jensen Comment
I like a teaching evaluation submitted to Tony Catanach in a course where Tony was using the BAM (forced self learning) pedagogy ---
http://www.trinity.edu/rjensen/265wp.htm

The quote goes something like this:
"Everything I learned in this course I had to learn by myself."

To which Tony replied:
"Case closed."


"Connecting the Dots: Finding Patterns in Large Piles of Numbers: A new program can find and compare relationships in complicated data without having to be asked specific queries," By Rebecca J. Rosen, The Atlantic, December 16, 2011 ---
http://www.theatlantic.com/technology/archive/2011/12/connecting-the-dots-finding-patterns-in-large-piles-of-numbers/250126/
Thank you Ramesh Fernando for the heads up.

Are there subtle patterns lurking in data that can foretell of a coming financial-system crash? What can explain the variations in sports-star salaries? How about the complex relationship between genes and certain diseases? Scientists in various fields have been searching for better ways to analyze large piles of data for such patterns, but the difficulty has always been that they need to know what they're looking for in order to find. A new software program, described in the latest issue of Science, is designed to find the patterns in data that scientists don't know to look for.

David Reshef, one of the scientists behind MINE, as the program is called, explains, "Standard methods will see one pattern as signal and others as noise. There can potentially be a variety of different types of relationships in a given data set. What's exciting about our method is that it looks for any type of clear structure within the data, attempting to find all of them. ... This ability to search for patterns in an equitable way offers tremendous exploratory potential in terms of searching for patterns without having to know ahead of time what to search for." MINE compares different possible relationships (including linear, exponential, and periodic)  and returns those that are strongest.

On MINE's website, the program is available for download.

Jensen Comment
Cluster analysis, pattern recognition, and multidimensional scaling in psychometric scaling have come a long way since the 1970s and 1980s when they were a major focus of my research life and publication. One of the highlights of my life was spending a year in a think tank with Roger Shepard. We even had a Cluster Analysis Society headed up by scientists from Bell Labs like Doug Carroll, Paul Green from Penn, and Roger Shepard from Stanford. Guys like Robert Sokal called themselves scientists in "Numerical Taxonomy." Statistical packages like SPSS and SAS added cluster analysis and pattern recognition modules.

But then the field commenced to fizzle due to a number of complications, not the least of which was computational inefficiency. If we knew the clusters or patterns in advance, we could zero in on them by choosing the right "closeness" metrics and partitioning algorithms. But when bootstrapping to find unknown patterns and clusters, the mathematical models became impossible to solve even on super computers and the results often were not robust in the sense that different orders of search led to different outcomes.

Now, in a something analogous to brute force integral calculus, the disciplines of cluster analysis and pattern recognition have been taken over by brute force data mining that is part and parcel to software like MINE. Mathematical elegance gave way to number crunching on a monumental scale. Such number crunching appears to be the wave of the future as elegance fades from the scene. Why require integral calculus these days in college curricula? Instead teach students how to achieve elegant results without the elegant analytics. I'm just a retired has-been reflecting on the good old days.

December 17, 2011 reply from Jagdish Gangolly

Bob,
 
The world has come a long way since the days of numerical taxonomy in many ways.
 
1. Recent efforts to axiomatise clustering. An example is the work of Jon Kleinberg who develops an impossibility theorem for clustering based on three axioms (scale-invariance, richness, and consistency). See http://www.cs.cornell.edu/home/kleinber/nips15.pdf
 
2. Developments on the shapes of the clusters and the probability distribution of points (model-based clustering), mainly due to the work of Adrian Raftery. See http://www.stat.washington.edu/raftery/Research/mbc.html
 
3.  Clustering is basically a model of unsupervised learning. But there are recent efforts to develop supervised clustering. See http://books.nips.cc/papers/files/nips23/NIPS2010_0427.pdf and http://citeseer.ist.psu.edu/viewdoc/summary?doi=10.1.1.168.2410
 
In addition, there is an effort to move beyond clustering (partitioning or hierarchical) which yield trees to models that are lattices. The most prominent is the Formal Concept Analysis due to Rodolf Wille. See http://en.wikipedia.org/wiki/Formal_concept_analysis. The mathematical foundation for FCA is in order Theory (Birkoff) and Galois connections (Evariste Galois).
 
Clustering and related areas are exciting fior the theoretician as well as from the point of view of those interested in applications. And, datamining has no pejoritive connotations especially these days when there is no other way to analyse most data.
 
I have hardly scratched the surface in the above remarks.
 
Jagdish S. Gangolly
Department of Informatics
College of Computing & Information
State University of New York at Albany
Harriman Campus, Building 7A, Suite 220
Albany, NY 12222

Phone: 518-956-8251, Fax: 518-956-8247

 

 

December 17, 2011 reply from Bob Jensen

Hi Jagdish,

Here are some references to accounting applications of cluster analysis.

"A practical method to estimate the cost of equity capital for a firm using cluster analysis", by Marcus Ingram, and Speros Margetis, Managerial Finance, 2010,  Vol. 36, pp.160 - 167

Accounting Anomalies and Fundamental Analysis: A Review of Recent Research Advances," by Scott Richardson, et al., September 2009 ---
http://mitsloan.mit.edu/jae/pdf/Session_V_Richardson_Tuna_Wysocki.pdf 

"A Cluster Analysis Study of Financial Ratios and Industry Characteristics," by Manak G. Gupta and Ronald J. Heufner, Journal of Accounting Research, 1972

"A Cluster Analysis Study of Financial Performance of Selected Business Firms," by Robert E. Jensen,  The Accounting Review, Vol. XLVI, No. 1, January 1971, 36-56.
 


'And here are some of my own other publications and presentations:

"A Dynamic Programming Algorithm for Cluster Analysis," by Robert E. Jensen, Mathematical Programming in Statistics, Edited by Arthanari and Dodge, New York, John Wiley & Sons.

"A Dynamic Programming Algorithm for Cluster Analysis," by Robert E. Jensen, The Journal of Operations Research, Vol. 17, No. 6, November-December 1969

"Isotropic Scaling of the Interior Components Inside Joiner Scaler Block Clusterings of Entities (Cases) and Variates (Attributes): An Application to United Nations Voting Records," by Robert E. Jensen, Presented at the University of Manchester, England, October 3, 1988.

"Seminar on cluster analysis," by Robert E. Jensen, The Institute for Advanced Technology, January 10 and 11, 1972, New York City.

"JENCAT Extensions: Prediction Models and Multivariate Analysis of Variance in Terms of Prediction Error," by Robert E. Jensen, University of Texas, October 29, 1971.


 

"JENCAT: A Multivariate Classification Model for Analysis of Categorical Predictor Variation in Terms of a Categorical Criterion (Dependent) Variate," by Robert E. Jensen, University of Iowa on October 22, 1971, and Stanfard University in November 1971. 

Classification Society Seminar, by Robert E. Jensen, The University of Western Ontario, London, Ontario, May 6 and 7, 1971.

Respectfully,
Bob Jensen

 

December 17, 2011 reply from Jagdish Gangolly

Bob,

And here are some of my ancient publications where we used clustering:

Harmonization of the auditor’s report", Jagdish S. Gangolly, Mohamed E. Hussein, Gim S. Seow, and Kinsun Tam, The International Journal of Accounting 37 (2002) 327–346

"International Similarities and Differences in the Auditor's Report", Mohamed E. Hussein, Vinod B. Bavishi, and Jagdish S. Gangolly, Auditing: A journal of Practice and Theory, 6 (1986) 124-133

There are one or two more, but I do not have the references handy.

Jagdish S. Gangolly
Department of Informatics College of Computing & Information
State University of New York at Albany
Harriman Campus, Building 7A, Suite 220
Albany, NY 12222 Phone: 518-956-8251, Fax: 518-956-824
7


"MIT Expands 'Open' Courses, Adds Completion Certificates," Inside Higher Ed, December 19, 2011 ---
http://www.insidehighered.com/quicktakes/2011/12/19/mit-expands-open-courses-adds-completion-certificates

The Massachusetts Institute of Technology -- which pioneered the idea of making course materials free online -- today announced a major expansion of the idea, with the creation of MITx, which will provide for interaction among students, assessment and the awarding of certificates of completion to students who have no connection to MIT.

MIT is also starting a major initiative -- led by Provost L. Rafael Reif -- to study online teaching and learning.

The first course through MITx is expected this spring. While the institute will not charge for the courses, it will charge what it calls "a modest fee" for the assessment that would lead to a credential. The credential will be awarded by MITx and will not constitute MIT credit. The university also plans to continue MIT OpenCourseWare, the program through which it makes course materials available online.

An FAQ from MIT offers more details on the new program.

While MIT has been widely praised for OpenCourseWare, much of the attention in the last year from the "open" educational movement has shifted to programs like the Khan Academy (through which there is direct instruction provided, if not yet assessment) and an initiative at Stanford University that makes courses available -- courses for which some German universities are providing academic credit. The new initiative would appear to provide some of the features (instruction such as offered by Khan, and certification that some are creating for the Stanford courses) that have been lacking in OpenCourseWare.

Video:  Open Education for an Open World
45-minute Video from the Long-Time President of MIT --- http://18.9.60.136/video/816

Bob Jensen's threads on open-share courses, lectures, videos, and course materials from prestigious universities ---
http://www.trinity.edu/rjensen/000aaa/updateee.htm#OKI


Cyberdeterrence and Cyberwar --- http://www.rand.org/pubs/monographs/MG877.html

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


"How Insiders Use the College Bowl System to Loot American Universities," by Pete Kotz, Phoenix New Times, December 15, 2011 ---
http://www.phoenixnewtimes.com/2011-12-15/news/how-insiders-use-the-college-bowl-system-to-loot-american-universities/
Thanks to Richard Campbell for the heads up.

By the time the 2009 football season rolled around, the University of Minnesota hadn't won a Big Ten title in 42 years. The Gophers largely spent those decades serving as target practice for the league's higher powers, yet they weren't without occasional bursts of second-string glory.

One arrived two years ago. Minnesota finished 6-6, collecting the minimum wins needed to earn a slot in the Insight Bowl in Tempe.

Their bragging rights would be slender. Every year, 70 of Division I football's 120 teams get bowl invitations, making faceless games like the Insight akin to summer camp participation awards.

Minnesota would face Iowa State, a 6-6 team from the Big 12. The teams were charged with providing three hours of TV programming for hardcore fans and shut-ins just before New Year's. The ratings would be measured in decimal points.

But within the U of M football offices in Minneapolis, there was cause for celebration, however muted. Though the game orbited well outside the realm of consequence, it was still a chance to reward players, boast to recruits, liquor up boosters, and feed a small army of university suits with a paid vacation in the Arizona sun.

The accounting office no doubt held a much different view. It surely knew that, like nearly all bowls, the Insight was designed to plunder all it could from a college treasury.

The bloodbath began the moment the contract was signed. Minnesota was obligated to write a check for 10,000 tickets, which were supposed to be resold to fans. Never mind that even the best of teams struggle to unload such sums. For middling squads like the Gophers, it was nothing more than a way for the men in funny yellow blazers who ran the Insight to grab piles of money from a public university.

Minnesota managed to sell just 901 seats. After kicking another 900 to the band, administrators, and cherished hangers-on, the school was forced to eat $476,000 worth of useless tickets.

The contract also required the team to show up a week early, if only to burn as much school money as possible at the restaurants and retailers of Greater Phoenix.

One would think school administrators would protest such gall. But one would be wrong. They were quick to see the advantages of a luxury vacation on the school's dime. So they happily signed off.

The school's traveling party was larded up with 722 people, including players, band members, and faculty. Airfare alone ran $542,000. Toss in hotels and meals, and the school had blown $1.3 million before the opening kickoff.

The ballsiest part of all: None of it was necessary.

Minnesota and Iowa State sit less than 200 miles apart. Their teams were providing the game. Their bands supplied the halftime entertainment. In fact, the Insight offered nothing — save for warm weather — that the schools couldn't have done better themselves.

Had the game been played in Minneapolis, the teams could have sold more tickets and put on a profitable game, since Big Ten matches typically generate $1 million to $2 million — not knee-bending losses.

Yet none of this was ever considered. Thanks to an alliance of unblushing incompetence and corruption, college football long ago decided to outsource its most valuable asset — its post-season earnings.

The scheme plays out each year on the ostensibly pristine fields of amateur athletics. Bowl executives grant themselves breathtaking salaries. The games, meanwhile, provide coaches, athletic directors, and the suits who nominally supervise them with an unending stream of bonuses.

Everyone else picks up the tab.

There's a reason cities hosting Super Bowls or rounds of March Madness bid with buffets of giveaways just to land the tourist traffic: If you want a taste, you have to pay.

College football is the only sport that gives away its postseason revenues. Its business model is akin to Walmart keeping its profits for the first 10 months of the year, then letting Value World host its holiday sales.

This is an especially hazardous form of capitalism for the nation's universities, which have been bloodied by ever-diving state funding combined with double-digit tuition hikes. And contrary to popular belief, their athletic departments just widen the damage.

Depending upon the year, only about 20 of the 120 athletic departments featuring Division I football actually pay for themselves. The rest require students and taxpayers to ride to the rescue.

Minnesota is typical. From 2006 to 2009, the Gophers went to three Insight Bowls. Their bill for unsold tickets alone was well over $1 million. At the same time, their athletic department needed a $25 million infusion over five years just to break even.

These kinds of losses could be allayed if college football simply cut out the middlemen — the bowls — and took its postseason in-house by adopting a playoff system. Instead, universities have chosen to hand their money away in a deal that's at best moronic, and at worst an epic swindle.

The racket works like this: Through required purchases of anywhere from 10,000 to 17,500 tickets, schools essentially pay for the right to appear in a bowl. The bowls keep the ticket and sponsorship money. Bowl execs also negotiate their own TV contracts.

After taking 50 percent to 60 percent off the top, the bowls then write checks to the teams' conferences. The conferences, in turn, split that money among their schools. (Profits from the five Bowl Championship Series games are spread to varying degrees among all conferences.)

Continued in article

December 18, 2011 reply from David Albrecht

Bob,

There are other factors to consider on this issue. College athletics is not all about the bottom line.

When I served as chair of the faculty senate budget committee at BGSU, I had faculty colleagues of all stripes on this issue. Some took the stereotypical view that universities are all about academics, and the school should not be contaminated with something as banal as athletics.

On the other hand, there took the view that university athletics represent learning activities for students.

In between, there were some faculty that viewed athletics as a social institution used to esprit de corps, PR, an opening into an alum's wallet, etc.

To view college bowl participation as an expense in isolation without considering all the difficult to measure benefits is dishonest, I think.

David Albrecht

 

Bob Jensen's Fraud Updates are at
http://www.trinity.edu/rjensen/FraudUpdates.htm


"The Most Satisfied Business School Graduates," Forbes, December 5, 2011 --- Click Here
http://www.forbes.com/sites/kurtbadenhausen/2011/12/05/the-most-satisfied-business-school-graduates/?feed=rss_home

The best teaching universities according to RateMyProfessor ---
http://www.ratemyprofessors.com/topLists11/topLists.jsp

 


"Boomers Wearing Bull's-Eyes Postcrisis:  Those Over 50 Targeted in Investment Scams; Problem is 'Rampant'," by Blake Ellis, The Wall Street Journal, December 13, 2011 ---
http://money.cnn.com/2011/12/13/real_estate/home_sales_revision/index.htm

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


Question:  Can you believe the following scenario about a 10-year old daughter named Karen and her father Ken?

Karen:
"Honestly Dad, a $1,000 per week allowance is just too much. I can get along on $5 per week plus whatever mom thinks is fair for new clothes."

Ken:
"But I make $1 million a week running the company, and $1,000 per week is mere chicken feed to me."

Karen
"But that might spoil me rotten and made me look bad among my closest friends who get even less than $5 per week Please, please Dad, just leave $5 per week on the kitchen table."

 

Point to Keep in Mind Below
The SEC is the plaintiff in this case and the defendant, Citigroup, allegedly damaged investors by more than $1 billion.
In most instances the plaintiff in a case like this would be overjoyed if the judge declared the preliminary out-of-court settlement is way too low.

The Judge
"I want to award you much, much more since the defendant criminally conspired one of the largest frauds in history and stole so much more than the relative pittance you agreed to in a preliminary settlement."  

The SEC
"Please don't make us settle for more than 30% of the damages. Who cares about what this bank cost investors? We worry more about retaliation from the banking industry on our government agency. To hell with what investors lost!"

 

"SEC Appeals Judge Rakoff’s Rejection of $285 Million Citigroup Settlement," by Joshua Gallu and Patricia Hurtado, Bloomberg News, December 16, 2011 ---
http://www.bloomberg.com/news/2011-12-15/sec-appeals-rejection-of-285-million-citigroup-settlement-1-.html

And in another unrelated case:

"Commissioner slams SEC settlement," SmartPros, July 13, 2011 ---
http://accounting.smartpros.com/x72323.xml

One of the SEC's five commissioners has taken the extraordinary step of publicly dissenting from an enforcement action on the grounds that it was too weak.

Commissioner Luis A. Aguilar said the Securities and Exchange Commission should have charged a former Morgan Stanley trader with fraud in view of what he called "the intentional nature of her conduct."

The dissent comes weeks after the SEC took flak for negotiating a $153.6 million fine from J.P. Morgan Chase in another enforcement case but taking no action against any of the firm's employees or executives.

Under a settlement announced Tuesday, the SEC alleged that former Morgan Stanley trader Jennifer Kim and a colleague who previously settled with the agency had executed at least 32 sham trades to mask the amount of risk they had been incurring and to get around an internal restriction.

Their trading contributed to millions of dollars of losses at the investment firm, the SEC said.

Without admitting or denying the SEC's findings, Kim agreed to pay a fine of $25,000.

Aguilar said the settlement was "inadequate" and "fails to address what is in my view the intentional nature of her conduct."

"The settlement should have included charging Kim with violations of the antifraud provisions," Aguilar wrote.

Continued in article

Jensen Comment
Maybe Jennifer also did porn. SEC enforcers like porn (daily).---
http://abcnews.go.com/GMA/sec-pornography-employees-spent-hours-surfing-porn-sites/story?id=10452544


"SEC Brings Crisis-Era Suits Fannie, Freddie Ex-Executives Face Cases Stemming From Subprime Disclosures," by Nick Timiraos and Chad Bray, The Wall Street Journal, December 17, 2011 ---
http://online.wsj.com/article/SB10001424052970203733304577102310955780788.html

U.S. securities regulators accused six former executives at mortgage firms Fannie Mae and Freddie Mac of playing down the risks to investors of the firms' foray into subprime loans.

The civil lawsuits, filed Friday by the Securities and Exchange Commission in Manhattan federal court, rank among the highest-profile crisis-related cases the government has brought. They are also the first cases against the top executives at Fannie and Freddie before their 2008 government takeover, which has cost taxpayers $151 billion.

The complaints name as defendants former Freddie Mac Chief Executive Richard Syron and former Fannie Mae CEO Daniel Mudd, who is currently chief executive of Fortress Investment Group LLC. The agency also accused four other high-ranking former executives at Freddie Mac and Fannie Mae.

The executives and their lawyers said they would vigorously contest the charges.

At the heart of the lawsuits is the government's contention that Fannie and Freddie executives knowingly misled investors about the volumes of risky mortgages that the companies were purchasing as the housing boom turned to bust. Documents

Complaints: SEC v. Fannie Mae | SEC v. Freddie Mac Nonprosecution Agreements: Fannie Mae | Freddie Mac

"Fannie Mae and Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was," said Robert Khuzami, director of the SEC's Enforcement Division.

The lawsuits come as the SEC and other law-enforcement agencies face rising political pressure to take more aggressive action against financial companies over the 2008 crisis. Federal authorities have a mixed record in cases tied to the subprime-mortgage bust, with no major cases having been brought in some of the highest-profile blowups, such as the September 2008 bankruptcy of Lehman Brothers Holdings Inc.

Continued in article

 

Jensen Comment
So why is the Department of Justice and the SEC backing off of bigger criminals like the banksters of Countrywide, Washington Mutual, Citigroup, JP Morgan, Merrill Lynch, Lehman Brothers, Bear Sterns, etc.?

The Justice Department can put criminals in jail, but the SEC can only go for fines. The problem is that when dealing with banksters the SEC has a track record of pittance, chicken feed  fines. Steal a dollar and the SEC will go after less than a dime from a bankster.

 

Another CBS Sixty Minutes Blockbuster (December 4, 2011)
"Prosecuting Wall Street"
Free download for a short while
http://www.cbsnews.com/8301-18560_162-57336042/prosecuting-wall-street/?tag=pop;stories
Note that this episode features my hero Frank Partnoy

Sarbanes–Oxley Act (Sarbox, SOX) ---
http://en.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act

 Key provisions of Sarbox with respect to the Sixty Minutes revelations:

The act also covers issues such as auditor independence, corporate governance, internal control assessment, and enhanced financial disclosure.

Sarbanes–Oxley Section 404: Assessment of internal control ---
http://en.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act#Sarbanes.E2.80.93Oxley_Section_404:_Assessment_of_internal_control

Both the corporate CEO and the external auditing firm are to explicitly sign off on the following and are subject (turns out to be a ha, ha joke)  to huge fines and jail time for egregious failure to do so:

Most importantly as far as the CPA auditing firms are concerned is that Sarbox gave those firms both a responsibility to verify that internal controls were effective and the authority to charge more (possibly twice as much) for each audit. Whereas in the 1990s auditing was becoming less and less profitable, Sarbox made the auditing industry quite prosperous after 2002.

There's a great gap between the theory of Sarbox and its enforcement

In theory, the U.S. Justice Department (including the FBI) is to enforce the provisions of Section 404 and subject top corporate executives and audit firm partners to huge fines (personal fines beyond corporate fines) and jail time for signing off on Section 404 provisions that they know to be false. But to date, there has not been one indictment in enormous frauds where the Justice Department knows that executives signed off on Section 404 with intentional lies.

In theory the SEC is to also enforce Section 404, but the SEC in Frank Partnoy's words is toothless. The SEC cannot send anybody to jail. And the SEC has established what seems to be a policy of fining white collar criminals less than 20% of the haul, thereby making white collar crime profitable even if you get caught. Thus, white collar criminals willingly pay their SEC fines and ride off into the sunset with a life of luxury awaiting.

And thus we come to the December 4 Sixty Minutes module that features two of the most egregious failures to enforce Section 404:
The astonishing case of CitiBank
The astonishing case of Countrywide (now part of Bank of America)

The Astonishing Case of CitiBank
What makes the Sixty Minutes show most interesting are the whistle blowing  revelations by a former Citi Vice President in Charge of Fraud Investigations

The astonishing case of Countrywide (now part of Bank of America)

I was disappointed in the CBS Sixty Minutes show in that it completely ignored the complicity of the auditing firms to sign off on the Section 404 violations of the big Wall Street banks and other huge banks that failed. Washington Mutual was the largest bank in the world to ever go bankrupt. Its auditor, Deloitte, settled with the SEC for Washington Mutual for $18.5 million. This isn't even a hand slap relative to the billions lost by WaMu's investors and creditors.

 No jail time is expected for any partners of the negligent auditing firms. .KPMG settled for peanuts with Countrywide for $24 million of negligence and New Century for $45 million of negligence costing investors billions.

Bob Jensen's Rotten to the Core threads ---
http://www.trinity.edu/rjensen/FraudRotten.htm

Bob Jensen's threads on how white collar crime pays even if you get caught ---
http://www.trinity.edu/rjensen/FraudConclusion.htm#CrimePays

"Should Some Bankers Be Prosecuted?" by Jeff Madrick and Frank Partnoy, New York Review of Books, November 10, 2011 ---
http://www.nybooks.com/articles/archives/2011/nov/10/should-some-bankers-be-prosecuted/
Thank you Robert Walker for the heads up!

 


Following up on David Fordham's questions about a particular Sony model camcorder, some of you may be interested in these recent links sent to me by Amazon.

Customers who have shown an interest in traditional camcorders might like to take a look at the best selling products this week.
  Canon VIXIA HF M41 Full HD Camcorder with HD CMOS Pro and 32GB Internal Flash Memory
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December 7, 2011 reply from Bob Jensen

When I want reviews, I normally begin with Amazon and then proceed to technical magazines and the WSJ (since I greatly respect Walt Mossberg)


I sometimes do not trust Amazon reviews, especially for books, unless there are some negative reviews that are probably not sent in by friends of the publisher or friends of the authors. Amazon's reviews are a bit like Wikipedia entries --- always be skeptical.


I'm usually amazed at the value added by Amazon's product reviews if there are any reviews, but I am always skeptical unless the reviews list positives and negatives. For example, my atomic clock (a gift from a neighbor) projects time and outdoor temperature over our bed. I became very fond of the clock last winter. But the outdoor temperature sensor only lasted one season. When I went to Amazon to replace the clock (about the same price as just replacing the sensor alone), sure enough Amazon's reviews all warned that the product had great features that tended to not be durable. Fortunately the complete clock set is not expensive.


In the case of Sony HDR-CX150 16GB High Definition Handycam Camcorder (Black), Amazon's reviews are somewhat mixed at
Click Here
 http://www.amazon.com/Sony-HDR-CX150-Definition-Handycam-Camcorder/dp/B0031RGL0C/ref=sr_1_1?s=electronics&ie=UTF8&qid=1323256677&sr=1-1
 

Customer Reviews

5 star (27)
4 star (15)
3 star (02)
2 star (04)
1 star (01)
 


 
 

The first review is especially good, and I don't know how I would even classify it with stars. It lists many of the good features of the camera. Then it lists many of the bad features. That particular reviewer did trade in the camera for a more expensive model.


What I find interesting is that on occasion Amazon's reviewers will spend a great deal of time and effort in writing reviews in the spirit of genuine open sharing. But then I almost always amazed at how much time Wikipedia open sharing scholars will spend writing and correcting Wikipedia entries. Nothing's perfect in life, but technology and open sharing seem to be getting better and better.


Respectfully,
Bob Jensen

 


No Other Encyclopedia Comes Close to Wikipedia
"Understanding collaboration in Wikipedia,"  Royce M. Kimmons, First Monday, December 5, 2011 ---
http://www.uic.edu/htbin/cgiwrap/bin/ojs/index.php/fm/article/view/3613

Abstract
Previous attempts at studying collaboration within Wikipedia have focused on simple metrics like rigor (i.e. the number of revisions in an article’s revision history) and diversity (i.e. the number of authors that have voluntarily contributed to a given article) or have made generalizations about collaboration within Wikipedia based upon the content validity of a few select articles. By analyzing the contents of randomly selected Wikipedia articles (n = 1,271) and their revisions (n = 85,563) more closely, this study attempts to understand what collaboration within Wikipedia actually looks like under the surface. Findings suggest that typical Wikipedia articles are not rigorous, in a collaborative sense, and do not reflect much diversity in the construction of content and macro-structural writing, leading to the conclusion that most articles in Wikipedia are not reflective of the collaborative efforts of any community but, rather, represent the work of relatively few contributors.

Wikipedia stands as an undeniable success in online participation and collaboration. By looking more closely at metrics associated with each extant Wikipedia article (N=3,427,236) along with all revisions (N=225,226,370), this study attempts to understand what collaboration within Wikipedia actually looks like under the surface. Findings suggest that typical Wikipedia articles are not rigorous, in a collaborative sense, and do not reflect much diversity in the construction of content and macro–structural writing. Most articles in Wikipedia are not reflective of the collaborative efforts of the community but represent the work of relatively few contributors.

Bob Jensen's search helpers ---
http://www.trinity.edu/rjensen/Searchh.htm


"ProfHacker 2011 Holiday Gift Guide," by Mark Sample, Chronicle of Higher Education, December 8, 2011 ---
http://chronicle.com/blogs/profhacker/profhacker-2011-holiday-gift-guide/37610?sid=wc&utm_source=wc&utm_medium=en

2012 Happiness Buttons (beautiful tech futures slide show) --- http://www.cs.trinity.edu/~rjensen/temp/TechFutures.pps

With a bit of sarcasm
"Yes, You Need More Gadgets," by Michael Schrage, The Harvard Business Review Blog, October 20, 2011 --- Click Here
http://blogs.hbr.org/schrage/2011/10/yes-you-need-more-gadgets.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date

Hooked on Gadgets, and Paying a Mental Price
You might want to examine the NYT feature while it is still free --- http://nyti.ms/9EegB2

Bob Jensen's threads on ubiquitous computing ---
http://www.trinity.edu/rjensen/ubiquit.htm

Bob Jensen's threads on gadgets ---
http://www.trinity.edu/rjensen/Bookbob4.htm#Technology


Question
Who was the first woman to be admitted as an audit partner in a Big Eight accounting firm?

Indiana University's Photo Archives (over two million pictures) ---
http://paper.li/businessschools?utm_source=subscription&utm_medium=email&utm_campaign=paper_sub  
 

Jensen Comment
I did a search on the term "Accounting." One hit was a 1936 photograph of an "accounting machine room" that in some respects resembles a computing lab room of modern times. I don't know why an "auto polo" site also showed up on the hit list for accounting. That photograph mentions Ernie Pyle, although I'm wasn't sure this is the famous Ernie Pyle. However, a check on Ernie Pyle showed at he was at Indiana University at that time ---
http://en.wikipedia.org/wiki/Ernie_Pyle

It was slightly more productive to search on the word "Business".

Here's a 1957 photograph of a computing machine in the school of business ---
http://webapp1.dlib.indiana.edu/archivesphotos/results/item.do?itemId=P0023310&searchId=3&searchResultIndex=21

Various photographs of Michele Fratianni (economics professor) show how men can truly disguise their appearances with glasses and a mustache. I wonder if the nose was attached to the glasses.

Cartoon:  Players may strut and players may fret but orators rave on forever ---
http://webapp1.dlib.indiana.edu/archivesphotos/results/item.do?itemId=P0022845&searchId=0&searchResultIndex=52

Here's a 1945 Careers for Women photograph ---
http://webapp1.dlib.indiana.edu/archivesphotos/results/item.do?itemId=P0023302&searchId=2&searchResultIndex=20
It would be interesting to investigate what female career opportunities were being promoted at the time by Indiana University. It was in some ways too early to suggest CPA firm careers. Most of the large CPA firms were not yet admitting women partners (at least not in any significant numbers), and women were not usually allowed to travel on audits and meet with clients. How times have changed now that CPA firms hire more women graduates than men in recent years.

In 1960 Mary Jo McCann became the first woman CPA in Kansas ---
http://www.kscpa.org/about/news/119-mary_jo_mccann_first_woman_cpa_in_kansas_passes
Fifteen years later she became Chair of the Kansas State Board of Accountancy

In 1977 Cheryl Wilson became the first woman partner of any Big Eight firm in Chicago (Coopers & Lybrand) ---
http://www.icpas.org/hc-media.aspx?id=7602 

In  the1960s Mary E. Lanigar, a Stanford University mathematics graduate and attorney and CPA, was the arguably first U.S. female to be made partner in any Big Eight firm (Arthur Young). She was a tax partner. In 1938 she'd worked as an accountant in the Stanford University Athletics Department.
http://articles.sfgate.com/2007-10-24/news/17264444_1_mills-college-santa-rosa-mary

In 1973 Marianne Burge became the first Price Waterhouse female partner. She was also a tax partner.
http://www.nytimes.com/1998/03/17/business/marianne-burge-64-expert-on-tax-issues.html

Ernst & Ernst acquired a woman partner in 1957, but I think she was inherited as a partner in a merger with a British accounting firm (Whinney, Murray, & Company) ---
http://www.spoke.com/info/p73cjmW/Aalso

It would be interesting to know when the first U.S. female audit partner was admitted in a Big Eight firm.
I suspect that Dale Flesher (Ole Miss. expert on accounting history) probably knows the answer to this one.

Bob Jensen's threads on accounting careers are at
http://www.trinity.edu/rjensen/Bookbob1.htm#careers


Do financial incentives improve manuscript quality and manuscript reviews?
December 12, 2011 message from Dan Stone

There seems to be a "natural experiment" in progress at accounting journals. Two "top" journals (JAE, JAR) have substantial fees for submission, a portion of which is paid to reviewers. Many other journals have low or no submission fee (e.g., AOS = $0).

Research questions:

1. Do submission fees improve the quality of manuscript submissions?

Theory - Ho yes: because authors with more financial resources produce better work. Ho no: because submission fees are, in relation to accounting professor salaries, still trivial.

2. Do submission fees improve the quality of manuscript reviews?

Theory - Ho yes: because $ increases effort and the quality of reviews is primarily a function of reviewer effort.

Ho no: because financial motivation is of "low quality" (according to self-determination theory) and reviews require insight and creativity. Money doesn't buy insight or creativity, it only buys effort.

Dan's remaining questions: 1. any existing papers on this topic? (here's a paper that argues that financial incentives will decrease cases of reviewer's declining to review, which could improve reviewer quality (http://jech.bmj.com/content/61/1/9.full) 2. if not, any volunteers to get this data and run this study? :)

Thanks,

Dan Stone

December 13, 2011 reply from Zane Swanson

Consider a control variable(s):

  What is the key metric(s) in an acceptable quality review?

  The reason for the aforementioned is that some informal convention discussions have occurred that editors preselect the acceptance by who becomes a reviewer.  Alternatively, some reviewers may reject about everything.  If an editor does not want a paper (too far off the current “research frontier”?), then the editor selects a reviewer who will just say no.

Stone wrote:

There seems to be a "natural experiment" in progress at accounting journals. Two "top" journals (JAE, JAR) have substantial fees for submission, a portion of which is paid to reviewers. Many other journals have low or no submission fee (e.g., AOS = $0). 

Research questions:

1. Do submission fees improve the quality of manuscript submissions?

Theory -

Ho yes: because authors with more financial resources produce better work.

Ho no: because submission fees are, in relation to accounting professor salaries, still trivial.

2. Do submission fees improve the quality of manuscript reviews?

 

Theory -

Ho yes: because $ increases effort and the quality of reviews is primarily a function of reviewer effort.

Ho no: because financial motivation is of "low quality" (according to self-determination theory) and reviews require insight and creativity.

Money doesn't buy insight or creativity, it only buys effort.

Dan's remaining questions:

1. any existing papers on this topic? (here's a paper that argues that financial incentives will decrease cases of reviewer's declining to review, which could improve reviewer quality

(http://jech.bmj.com/content/61/1/9.full)

2. if not, any volunteers to get this data and run this study? :) 

 

Zane Swanson

 

December 12, 2011 reply from Bob Jensen

Since many of the TAR, JAR, and JAE top referees are used by all three journals, it seems unlikely that variations in remuneration for the refereeing is going to affect the quality of the reviews. What remuneration might affect in a particular instance is a referee's acceptance of taking on the refereeing assignment in the first place. This might be something some referees (certainly not all)  will admit to in interviews and surveys.

Regarding the question of whether journal editors predetermine refereeing outcomes of some manuscripts, by choice of referees, probably can only be answered by journal editors, but they're not likely to admit to such unethical game playing.

Certainly with respect to submissions using advanced mathematics in what are classified  as analytical submissions, there are referees who are known to be much tougher about the realism of the foundational assumptions. Some referees don't get hung up on assumptions and are more interested in the quality of the mathematical derivations. Other referees are likely to be more critical of the lack of realism in the assumptions and/or questions about whether the resulting outcomes are truly relevant to accounting. My suspicion is that TAR, JAR, and JAE editors are going to shy away from the latter referees unless they themselves don't don't think in advance that the paper should have much of a shot. But that is an unproven suspicion.

With respect to "quality of a review," much depends upon the what constitutes "quality." To me the highest quality review demonstrates that the referee knows as much or more about the manuscript content and research as the authors themselves.


A high quality rejection in one sense is a rejection that lists reasons so convincing that even the authors agree that the paper should've been rejected. I've had some memorable rejections in this category.  You won't find them at my Website.

A low quality rejection in a sense is a terse one word "reject" or an editor's terse note that "this piece of garbage is not worth sending to our referees." One of the best-known editors of JAR was known for the latter type of rejection in those words. What such rejection feedback fails to tell us is how much time time and effort the referee/editor really put in studying the manuscript before writing a terse and useless reply to the authors.

A high quality acceptance or re-submit outcome is one that lists tremendous ideas for improving the manuscript before final publication or resubmission. It's nice if a referee really suggests helpful ways to improve the way the paper is written (apart from content), but we should not expect referees to rewrite papers and it's unfair to downgrade a reviewer for not doing so.


But referees can get carried away to a fault in suggesting ways to improve a paper. I was one of two referees of a submission published a short time ago by IAE. We both had resubmit suggestions, but mine were quite modest. The other referee submitted about 10 pages of "conditions" that if taken literally would've increased the size of the paper to over 200 pages and required that the authors completely re-run the field study with more questions to be asked in the field. As we sometimes say about some referee reports, "the road to hell is paved with good intentions."

Fortunately the referee who really got carried away with "conditions" did not insist upon meeting most of the original conditions after the authors resubmitted the paper three times.

Also it was fortunate that the authors did not simply throw up their hands in utter discouragement over all that the referee wanted in his/her first review.

When Steve Zeff was editor of TAR, I was given the task of adjudicating conflicting referee recommendations. I had the feeling that the adjudication cases Steve sent to me were those where he wanted to publish the manuscripts but needed some additional backup for his decisions. Or put another way, he really wanted to publish some manuscripts that did not contain the requisite equations demanded by nearly all TAR referees.

Of course when doing research on the refereeing process, it's risky to survey authors themselves. Most of us have had referees we thought were idiots and are likely to say so in surveys. We could easily be wrong of course. In my case the my three "big ones" that were flatly turned down are linked at
http://www.trinity.edu/rjensen/default4.htm

Please keep the dates of my three "big ones" in mind if you take the time and trouble to examine my big ones that got away. Also my secretary translated my original doc files into html files (before the MS word would do such conversions automatically). Hence the tables and exhibits and some other sections of the papers were degraded badly.

Only one of the papers was submitted to an accounting research  journal. Actually it was rejected by both TAR and JAR even after I took on co-authors to improve the paper. That was Working Paper 153.

 

 

Respectfully,
Bob Jensen

December 13, 2011 reply from Bob Jensen

Bob,

That was a breath of fresh air on a touchy academic subject.  There is an endless supply of material in guides to writing and examples of award winning publications, but little about reviewing.  I do suggest that your post is a keeper on your web site.

Regards,

Zane


December 13, 2011 message from Jim Peters

This week's Economist had an op ed piece that noted that American higher education is pricing itself out of the market and, in the process, creating a new class of indentured servants - college graduates burdened by heavy educational debts.  These debts are just one more drag on economic recovery.  As we all know, the unit cost of college education has gone up much faster than inflation; even faster than medical costs, which are also creating a huge drag on our economy.  While I know of no real systematic study on the topic, I doubt any one could make the argument that the quality of education has gone up at the same time.  Most anecdotal discussion I have been a party to since entering academics asserts the opposite, for a variety of reasons.  Certainly, no one could support an argument that the quality has gone up at the same rate as the cost.

The article cited two main reason for the cost increases - Ivy League envy and lack of use of technology to cut per unit costs of education.  Ivy League envy is evident as the research requirements for tenure have tighten over the years at all levels throughout higher education.  To compete, Universities have had to reduce teaching loads.  My former Dean at Maryland, who had a knack for one-liners, used to state that every business school in the US was working with a going out of business model by paying faculty more and more to teach less and less.  When I was Chair of the Accounting Department, I needed to offer a package pushing $200,000 per year to compete for top Assistant Professors that would only teach 3 classes a year, for a $66,667 per class just for the teacher, an unsustainable cost.  The main lack of technology the article mentioned was not moving more aggressively to distance education.

So, how do we cut unit costs of higher education in the US without cutting quality?  I am a little cynical about using technology to cut costs.  It actually adds to the per unit cost of education because it doesn't reduce the cost of the faculty member and adds the cost of technology.  However, that is just from the standpoint of the University.  Distance education eliminates housing and transportation costs, which are a big part of the costs for students.  Thus, technology might cut the per unit costs for students while raising, slightly, the per unit costs for Universities.

As accountants, I think we recognize some basics.  To cut unit costs, you either have to cut your input costs, the main one being faculty salaries, or you have to increase volume, i.e., class sizes, to take advantage of economies of scale.  My observation is that Universities are moving to do both by hiring more, cheaper teaching faculty and increasing class sizes.  However, to date, these moves have made little impact on the increase in the cost of higher ed.  Admittedly, that is a hard thing to measure because of the difficulty of determining what the unit costs would have been had these moves not taken place.

Another solution is to not cut costs, but raise revenues from other sources, another strategy that Universities are taking.  These other sources are grants and contributions, mainly.  However, again, these moves do not seem to be having much of an impact on cost increases to students.

My deepest concern is that we do not measure quality of education very effectively and, consequently, cost cutting will erode quality, reducing America's competitiveness in global markets.  Also, that increase dependence on contributions and grants will erode academic freedom and creativity.   Hiring cheaper teachers and increasing class sizes have measurable effects on unit costs, but what of their effects on quality?  One small example from New Mexico that I fear will trash quality here (which isn't all that great to start with).  The governor is pushing to alter the way Universities are funded to focus on graduation rates and class completion rates (i.e., not paying for students who take a W and leave a class before the term end).  I see a sharp reduction in graduation requirements and a watering down of curriculum to increase graduation rates and class completion rates.  If you put cash on the table, people will find the easiest way they can to pick it up.  Of course, the students and organizations will suffer when the students can't perform in the labor markets.  Hopefully, the labor markets will push back and stop hiring our students and, hopefully, policy makers will notice and adjust.  But, I am not too optimistic of that outcome and, in the meantime, a lot of damage will be done.

My other concern is that faculty do not seem to be working on solutions and merely fighting with administrations to maintain their salaries and class sizes.  I believe faculty need to be much more proactive in recognizing the problem and working to cut costs.  One common faculty argument is that the problem is not faculty costs, but administrative costs.  While administrative costs have also gone up, faculty need to realize the simple fact that their costs are part of the problem as well and not just point fingers.

My one thought is to continue the current trend towards fewer research faculty and more teaching faculty.  Particularly in accounting, I have never seen the need for a research faculty member in either an undergraduate or masters class in accounting.  While I believe that some research can inform the classroom at these levels, I don't see a need for a PhD to do that.  I do see a need for the research community to help create the curriculum and education non-research faculty in the use of research in the classroom.  However, we can accomplish that goal with fewer research faculty dedicated to PhD education only and better communication of research results for non-researchers.

Do any of you have suggestions on how faculty can help reduce the cost of higher ed for students, or do you feel that it isn't a problem?

Jim

December 13, 2011 reply from Bob Jensen

Whereas the super salaries for non-tenured and well as tenured research scientists in a university are paid for by research grants that they themselves bring into the university (along with generous overhead support), this science model does to work well for accounting (accountics) scientists since nobody seems interested in funding their research with outside grants for particular research proposals..

What helps support accountics scientists are the discretionary funds from alumni in big accounting firms who provide cash gifts to accounting departments--- plus partner gifts are usually are accompanied by matching funds from alumni employers. The R1 research universities generally have the most alumni accounting firm partners and, therefore, bring in the largest alumni and CPA firm contributions relative to non-flagship universities. Although the alumni would probably prefer that their discretionary funds be used for programs and scholarships directly of benefit to accounting majors, usually the firms do not raise strong objections to funding accountics scientists even when they are not much interested in the accountics  research harvests.

It has been a struggle for accounting departments to fend off business school deans seeking to tap into accounting firm donations, but in nearly all instances the donations come in with restrictions that accounting firm donations must be spent on accounting programs. Thus accounting researchers often have a greater chance for summer research stipends and research slush funds than their business school colleagues. Also professorships such as KPMG professorships may be used to increase base salaries of some accounting faculty even though such professorships are based on annual giving rather than income from fully endowed chairs/

The accounting firms thus make up for the lack of grant money available for accountics scientists. However, these welcomed gifts are nowhere close to the big money (including overheads) brought into a university by real scientists.

Bob Jensen's sadly neglected threads on program costs and faculty compensation are at
http://www.trinity.edu/rjensen/distcost.htm 

Bob Jensen's threads on Tools and Tricks of the Trade are at
http://www.trinity.edu/rjensen/000aaa/thetools.htm 

What went wrong with accountics science research?
http://www.trinity.edu/rjensen/theory01.htm#WhatWentWrong


Interesting Warranty to Gain Goodwill
You can apply for a full refund and keep the product whether or not there's anything wrong with it.

"Jawbone Recovers Goodwill After Tumble," by David Pogue, The New York Times, December 9, 2011 ---
http://pogue.blogs.nytimes.com/2011/12/09/jawbone-recovers-goodwill-after-tumble/


Marian E. Koshland Integrated Natural Sciences Center at Haverford College
Biography of an Experiment --- http://www.haverford.edu/kinsc/boe/

The Biography of Experiment Series is an ongoing cooperative effort between students and faculty at Haverford College to expose undergraduates to the stories behind influential manuscripts in the Natural Sciences.

Posted on this site are excerpts of original manuscripts, each of which has been annotated by undergraduates who have spent a semester critically evaluating the work and assessing the authors’ own perspectives.

By including their interviews with primary investigators, links to background information, and tips for understanding and critically interpreting data, these undergraduates have developed a unique pedagogical tool that should enhance their peers ability to navigate and understand the primary literature. Developing scholars will benefit from their colleagues’ insights as they are invited to explore the living history of a scientific inquiry.

Jensen Comment
Some of these are great learning modules for students in experimental science. Most of the cases are in the natural sciences.

However once case involves the psychology of prediction: 
On the Psychology of Prediction (Daniel Kahneman and Amos Tversky), 1973 ---
http://www.haverford.edu/kinsc/Biography/Psych/Armstrong/BOEhome.htm
This is one of the classic works that led to a Nobel Prize for Professor Kahneman

These resources might be especially useful to accounting students seeking to know what went wrong with accountics science ---
http://www.trinity.edu/rjensen/theory01.htm#WhatWentWrong


A Juicy Scandal at the University of Texas --- Almost as Complicated as Enron
Heads Roll

William C Powers
President of the University of Texas
Former Dean of the University of Texas Law School
Former member of the Board of Directors of Enron who chaired the Special Investigative Committee to investigate the causes of Enron's bankruptcy
http://en.wikipedia.org/wiki/William_C._Powers

Jensen Comment
When I was in Texas, my students hell bent on going to law school more often than not were shooting for the University of Texas Law School. I thus am very confused by all the turmoil (scandals?) going on concerning transpiring in this venerable law school at the moment.

I might note that the current University of Texas President (Powers)  and former Dean of the UT Law who instigated in the famous Powers Report in my judgment point went a long way toward exonerating the Enron Board. I honestly don't believe this report was a cover up or a white washing of any wrong doers in the Enron scandal, although some troublesome facts emerged after the Powers Report was completed. The general conclusion is that the top Enron executives really did succeed in deceiving the Board ---
The 208 Page February 2, 2002 Special Investigative Committee of the Board of Directors (Powers) Report--- http://news.findlaw.com/hdocs/docs/enron/sicreport/ 
Alternative 2:  http://nytimes.com/images/2002/02/03/business/03powers.pdf 
Alternative 3:  http://i.cnn.net/cnn/2002/LAW/02/02/enron.report/powers.report.pdf 
Alternative 4:  Part One | Part Two
| Part Three | Part Four
 

December 2011
Now President Powers finds himself in in the middle of another complex scandal. Much of this is being reported in The Austin American-Statesman newspaper and is also being logged into Paul Caron's Tax Prof Blog --- http://taxprof.typepad.com/

"University of Texas President Ends Tough Year With Yet Another Battle," by Reeve Hamilton and Morgan Smith, The New York Times,  December 15. 2011 ---
http://www.nytimes.com/2011/12/16/us/university-of-texas-president-ends-tough-year-with-yet-another-battle.html?_r=2&pagewanted=all#h[]

"Playing the "Gender Card" at Texas," Posted by Brian Leiter on Paul Caron's TaxProf Blog, December 16, 2011 ---
http://leiterlawschool.typepad.com/leiter/2011/12/playing-the-gender-card-at-texas.html

One of the ugliest, and most unjust aspects, of recent turmoil at Texas is that allegations of gender discrimination have surfaced. "Patriotism" may still be the first refuge of scoundrels, but at least at the University of Texas School of Law, the demand for "gender equity" has taken on that role.

There are women on the Texas faculty who don't perform any institutional service or committee work, who barely publish, who publish but whose work isn't very highly regarded, and/or who are poor teachers. There are men who fit those descriptions too, unsurprisingly. And in looking over the public salary data, I am struck by how equitable the under-performing men and women are treated, with a few exceptions in both directions (and of both genders). By the way, that is what "gender equity" means: it means faculty are treated equally without regard to gender, not that women are paid as much as men, regardless of their job performance or scholarly reputation.

What makes the fact that this charge has surfaced against former Dean Sager so outrageous is that nearly half the tenure-stream appointments during his tenure were women (and more than half were women or minorities), a higher percentage than any of his predecessors managed. The two Associate Deans during his tenure were both women, one of whom is now the Interim Dean. Most of his senior administrative staff and assistant deans were women or minority men. Any responsible journalist can determine, with not very much digging that, whatever problems led President Powers to ask for Sager's resignation, gender inequities had nothing to do with it.

 

"UT's Powers, law dean differ on circumstances of $500,000 loan," by Ralph K.M. Haurwitz, The Austin-American Statesman, December 14, 2011 ---
http://www.statesman.com/news/local/uts-powers-law-dean-differ-on-circumstances-of-2032971.html

"Former UT professor reflects on law dean’s ouster," The Austin-American Statesman, December 14, 2011 ---
http://www.statesman.com/blogs/content/shared-gen/blogs/austin/highereducation/entries/2011/12/16/former_ut_professor_reflects_o.html

"UT Law School Interim Dean Prioritizes Salary Equity," by Reeve Hamilton, The Texas Tribune, December 15, 2011 ---
http://www.texastribune.org/texas-education/higher-education/ut-law-school-interim-dean-prioritizes-salary-equi/

Prior TaxProf Blog posts:


On Sat, Dec 10, 2011 at 6:53 PM, Robert Bruce Walker <walkerrb@actrix.co.nz>  wrote:

Below are listed two links to a recent edition of the NYRB.

The first article is by Paul Volcker and discusses the need for (further) global regulatory reform of the financial systems of the world. Volcker isn’t really specific about how to achieve this. He does mention in passing the expansion of IASB standards and auditing reform. I disagree not because I am against regulation per se, but what it brings in its wake. Human institutions, such as laws, are created for good and proper purpose but no sooner are they in place than those arise to exploit them for their own gain. It is for this reason that human institution is cumulative and must, eventually collapse under its own weight.

As Nietzsche would have it in his oblique way:

For the good – cannot create: they are always the beginning of the end: -
They crucify him who writes new values on new law-tables, they sacrifice the future to themselves – they crucify the whole human future! The good – have always been the beginning of the end.

Verse 26 ‘Of Old and New Law-Tables’, Thus Spoke Zarathustra

http://www.nybooks.com/articles/archives/2011/nov/24/financial-reform-unfinished-business/ 

The second article should be of interest to professional academics. It is a wholly pessimistic survey of the current state of universities in the US. The author, a Princeton historian, says this in regard to some research in regard to the efficacy of university education.

‘… traditional subjects and methods seem to retain their educational value. Nowadays the liberal arts attract a far smaller proportion of student than they did two generations ago. Still, those majoring in liberal arts fields – humanities and social sciences, natural sciences and mathematics, - outperformed those studying business, communications, and other new, practical majors on the CLA [Collegiate Learning Assessment].’

Food for thought for those teaching practical based courses.
http://www.nybooks.com/articles/archives/2011/nov/24/our-universities-why-are-they-failing/

 

December 11, 2011 reply from Bob Jensen

Hi Robert,

I do not disagree with your conclusions, but I will mention a couple of concerns. Paul Volcker has never been one of my heroes. He could've done much more for Wall Street reform when he had some power, but he was just another pawn of the power brokers. As far as his stand on the IASB standards, he provides no evidence. The power brokers (the Big Four and their multinational clients) want out from under FASB standards, and Volker is once again playing into their hands.


As to the sad state of universities, I agree, but I tend to place the blame on the biggest disgrace in higher education --- teaching evaluations and grade inflation
http://www.trinity.edu/rjensen/Assess.htm#RateMyProfessor

I don't have much use for the Collegiate Learning Assessment (CLA) assessments. Typically, CLA samples are not random, so that selection bias is a huge concern in spite of some CLA studies that try to weasel out of that complaint. And the CLA folks contend their assessments are not "racially biased" after taking out ability differences based upon SAT and ACT scores. But SAT and ACT scores are heavily correlated with race, such that the CLA arguments become circular.

Also see
"In 'Academically Adrift,' Data Don't Back Up Sweeping Claim," by Alexander W. Astin, Chronicle of Higher Education, February 14, 2011 ---
http://chronicle.com/article/Academically-Adrift-a/126371/

Bob Jensen's threads on higher education controversies ---
http://www.trinity.edu/rjensen/HigherEdControversies.htm

 

 


"Episode 90: Growing Pains for ‘Clickers’," Jeffrey R. Young, Chronicle of Higher Education, December 7, 2011 --- Click Here
http://chronicle.com/blogs/techtherapy/2011/12/07/episode-90-growing-pains-for-%E2%80%98clickers%E2%80%99/?sid=wc&utm_source=wc&utm_medium=en

Classroom response systems, or “clickers,” have been around for years, but only a small percentage of classes use them. Competing and incompatible brands, faculty reluctance to try new technologies, and confusion about which campus group should provide support for the devices all contribute to a slow adoption, says Derek Bruff, director of Vanderbilt University’s Center for Teaching and author of Teaching With Classroom Response Systems. The Tech Therapy team looks at how those gadgets can be seen as an example of the difficulty in moving technology beyond the early-adopter stage.

Download this recording as an MP3 file, or subscribe to Tech Therapy on iTunes.

Each month, The Chronicle’s Tech Therapy podcast offers analysis of and advice on what the latest gadgets and buzzwords mean for professors, administrators, and students. Join hosts Jeff Young, a Chronicle reporter, and Warren Arbogast, a technology consultant who works with colleges, for a lively discussion—as well as interviews with leading thinkers in technology.

Jensen Comment
Response pads have a long history dating back over 20 years in the classroom. HyperGraphics was one of the first companies to shift from wired to wireless clickers using the old DOS HyperGraphics course (learning) management software. My first dog and pony technology shows featured my managerial accounting course in HyperGraphics. My first gig was at the University of Wisconsin.

It was October 4-5, 1990 when I made my first away-from-home dog and pony show on featuring HyperGraphics technology --- at the University of Wisconsin. HyperGraphics software pretty much died after Windows replaced the DOS operating system in PCs. I then shifted my managerial accounting and accounting theory courses to ToolBooks for the PC. My out-of-town dog and pony shows really commenced to roll when my university hosts invested in those old three-barrel color projectors that predated LCD projectors. I eventually made hundreds of presentations of HyperGraphics and then ToolBooks on college campuses in the United States, Canada, Mexico, Finland, Sweden, Germany, Holland, and the United Kingdom (where I lugged my full PC and LCD projector between five campuses as the European Accounting Association Visiting Professor). Many of my campus visits and topics are listed at http://www.trinity.edu/rjensen/Resume.htm#Presentations

Shortly thereafter Loyola's Barry Rice with his ToolBooks became a much heavier user of clickers than me in his large accounting lectures.

I think Bill Ellis at Furman University is a current user of clickers in his accounting courses.

You can read more about the history of clickers at
http://www.trinity.edu/rjensen/000aaa/thetools.htm#ResponsePads

Bob Jensen's threads on Tricks and Tools of the Trade ---
http://www.trinity.edu/rjensen/000aaa/thetools.htm


"Philosophers Put Their Minds to Expanding Their Role in Public Affairs," by Dan Barrett, Chronicle of Higher Education, December 11, 2011 ---
http://chronicle.com/article/Philosophers-Put-Their-Minds/130066/?sid=at&utm_source=at&utm_medium=en

Jensen Comment
Scholars are free to write and become active in most any academic discipline and societal activity even if it is outside their realm of expertise and job descriptions. But I would like to remind all members of the Academy that there are certain guidelines about course content that are spelled out by the AAUP and in some cases in a university's handbook. A teacher is not supposed to expound political and other social-cause content that lies outside the university's intent for the course in question. For example, a math professor is not supposed to expound political causes in calculus courses even though he/she might be societal activist or religious nut on a Website or a soap box beside a campus fountain. Within limits the university is more tolerant about a professor's Website content than course content. But I do know of one case where a professor making extreme anti-Semitic assertions on her university Website was forced to remove the controversial material.

I am familiar with numerous student complaints about a business law professor (actually a close friend of mine) who read passages from the Bible in nearly every class. University administrators eventually took action to change his ways in class.

Most colleagues that I've encountered later in life take pains to leave politics, religion, and sexual orientation outside their classrooms. However, this was not always the case decades ago when I was still a student in college. One of the things that perhaps changed this was making teaching evaluations by students available to administrators, promotion and tenure committees, and in some universities the campus community and even the public at large. Whereas the majority of faculty are alleged to be quite liberal (often anti-business), these same faculty in some universities discover that the majority of their students are more conservative and not afraid to complain about course content in their evaluations of instructors.


"Italy's Pension Reforms Complete With New System - Official," The Wall Street Journal, December 14, 2011 ---
http://professional.wsj.com/article/BT-CO-20111214-711266.html?mg=reno-wsj

The current Italian government measures reforming public pensions in effect signals the end of the changes to the system, said Antonio Mastrapasqua, head of the country's pension body INPS, Wednesday.

"They will end a very long itinerary [of reforms]," said Mastrapasqua in an interview with broadcaster SkyTG24.

At the start of the month, Prime Minister Mario Monti, who was appointed by parliament to introduce measures aimed at reassuring investors over Italy's towering public debt of about EUR1.9 trillion, announced a budgetary bill that included further unpopular reforms to pension.

The government's measures include hefty hikes to the retirement age, dropping indexation to inflation for pensions above EUR1,400 a month, universal adoption of the system in which the public pension is based on how much one has contributed.

Italy started major reforms to its generous pension scheme in the 1990s and ever since has introduced further restrictions.

Monti's pension reforms need to be approved by parliament and this is expected to take place before Christmas.

The reforms "protect pensions of young workers," said Mastrapasqua. With the previous system, in which payments were tied on your last salary rather than what you paid in, "young workers were paying the more generous pensions of older people," he added.

 


"Corporate Tax Avoidance Cost States $42 Billion," by Michael Cohn, Accounting Today, December 7, 2011 ---
http://www.accountingtoday.com/news/Corporate-Tax-Avoidance-Cost-States-Billions-61060-1.html
To say nothing about the strategies to avoid or defer Federal taxes when, often reducing tax payments to zero or seeking negative tax refunds.

Sixty-eight of the most consistently profitable Fortune 500 companies paid no state corporate income tax in at least one of the last three years, and 20 of the companies averaged a tax rate of zero or less from 2008-2010.

Nevertheless, the companies told shareholders they made nearly $117 billion in pre-tax U.S. profits during those no-tax years, and 16 of the companies had multiple no-tax years.

A new study from the advocacy group Citizens for Tax Justice and the Institute on Taxation and Economic Policy found that 265 of the most consistently profitable U.S. corporations cost states $42.7 billion over three years. If the 265 corporations had paid the 6.2 percent average state corporate tax rate on the $1.33 trillion in U.S. profits that they reported to their shareholders, they would have paid $82.6 billion in state corporate income taxes over the 2008-10 period. Instead, they paid only $39.9 billion.

Continued in article

Corporate Tax Dodging in the Fifty States, 2008-2010 ---
http://ctj.org/ctjreports/2011/12/corporate_tax_dodging_in_the_fifty_states_2008-2010.php


Best and Worst Run States in America — An Analysis Of All 50

From the AICPA CPA Letter Daily on December 7, 2011
For the second year, 24/7 Wall St. ranked the 50 states according to how well they are run. Factors included the state's financial health, standard of living, education system, employment rate, crime rate and how efficiently the state uses its resources to provide government services. 24/7 Wall St. determined that Wyoming is the best-run state and California is the worst run. 24/7 Wall St.
http://247wallst.com/2011/11/28/best-and-worst-run-states-in-america-an-analysis-of-all-50/

Jensen Comment
The best-run state is Wyoming. The worst-run state is California  Most of the Top Ten best-run states have relatively low populations. Small seems to be better in terms of state government efficiency, although social programs and cold weather in those states tend to repel welfare and Medicaid recipients from around the nation. It's difficult to draw liberal versus conservative explanations for best-run states since liberal states of Vermont and Minnesota are mixed in the Top Ten along with the conservative states of Wyoming, Utah, and the two Dakota states.

Minnesota has the least debt per capita, but the union-run state of Massachusetts has the most debt per capita. This is somewhat interesting because both Minnesota and Massachusetts are viewed as liberal states (more so in the days of Hubert Humphrey and Walter Mondale). The relatively conservative southern states tend to be below the median on state debt per capita. The western states are more variable. I accuse Taxachusetts of being union-run in part because Boston refuses to allow Wal-Mart stores until Wal-Mart becomes unionized.

When it comes to debt per capita there is less denominator effect than I suspected beforehand, although small populations become a huge factor behind the high debt loads per capita in Alaska, Rhode Island, and Delaware. Alaska can also afford a higher debt load because of vast untapped natural resources.

I watched two very liberal commentators from Boston on television last night arguing that more debt load in Taxachusetts to support increased spending for social programs was a good investment of that state's economy. This seems to be questionable given where Taxachusetts already stands in relation to debt per capita.

Bob Jensen's threads on state taxation are at
http://www.trinity.edu/rjensen/Bookbob1.htm#010304Taxation
You have to scroll down to find the state tax comparisons.

From Stanford University
Pension Math in California --- http://siepr.stanford.edu/

Also see http://taxfoundation.org/blog/show/27827.html


"GASB Plan Concerns Treasurers: NAST Members Share Qualms About Five-Year Projections," by Joan Quigley, The Bund Buyer, December 7, 2011 ---
http://www.bondbuyer.com/issues/120_234/gasb-state-five-year-projections-1033938-1.html

State treasurers voiced concerns about a proposal unveiled Tuesday by the Governmental Accounting Standards Board that recommends they provide five-year projections of cash flows and information about future financial obligations.

The concerns surfaced here at the Issues Conference on Public Funds Management, sponsored by the National Association of State Treasurers.

The NAST gathering coincided with GASB’s release of so-called preliminary views in a document entitled “Economic Condition Reporting: Financial Projections.”

The proposal, which GASB is floating for public comment and hearings, would require issuers to provide the cash-flow projections if they wanted a clean audit.

GASB said users of governments’ financial statements need this information to assess an entity’s financial health.

Several state treasurers at the conference who had not reviewed the board’s proposal and had only read about it in media accounts expressed reservations.

“We do have a basic concern about what sort of future fiscal projections are expected, with what detail and with what caveats they would be presented,” said Nancy Kopp, the treasurer of Maryland.

She noted that if such projections had been required in 2006, they would have proven wrong after the 2008 financial crisis.

“It’s when you get to projections and hypothetical information, we get most concerned,” she said.

The treasurer’s office of Maryland currently posts projections on its website based on present law and economic assumptions.

“But these are unaudited, best-guess assumptions,” Kopp said.

Another state treasurer, who moderated the pension panel, said she had qualms about the proposal’s impact on small municipalities.

Continued in article

Bob Jensen's threads about the sad state of governmental accounting ---
http://www.trinity.edu/rjensen/Theory02.htm#GovernmentalAccounting


Audio
Harvard Business Review's 2012 List of Audacious Ideas --- Click Here
http://blogs.hbr.org/ideacast/2011/12/hbrs-2012-list-of-audacious-id.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date


We hang the petty thieves and appoint the great ones to public office.
Attributed to Aesop

If the law passes in its current form, insider trading by Congress will not become illegal.
"Congress's Phony Insider-Trading Reform:  The denizens of Capitol Hill are remarkable investors. A new law meant to curb abuses would only make their shenanigans easier," by Jonathan Macey, The Wall Street Journal, December 13, 2011 ---
http://online.wsj.com/article/SB10001424052970203413304577088881987346976.html?mod=djemEditorialPage_t

Members of Congress already get better health insurance and retirement benefits than other Americans. They are about to get better insider trading laws as well.

Several academic studies show that the investment portfolios of congressmen and senators consistently outperform stock indices like the Dow and the S&P 500, as well as the portfolios of virtually all professional investors. Congressmen do better to an extent that is statistically significant, according to studies including a 2004 article about "abnormal" Senate returns by Alan J. Ziobrowski, Ping Cheng, James W. Boyd and Brigitte J. Ziobrowski in the Journal of Financial and Qualitative Analysis. The authors published a similar study of the House this year.

Democrats' portfolios outperform the market by a whopping 9%. Republicans do well, though not quite as well. And the trading is widespread, although a higher percentage of senators than representatives trade—which is not surprising because senators outperform the market by an astonishing 12% on an annual basis.

These results are not due to luck or the financial acumen of elected officials. They can be explained only by insider trading based on the nonpublic information that politicians obtain in the course of their official duties.

Strangely, while insider trading by corporate insiders has long been the white collar crime equivalent of a major felony, the Securities and Exchange Commission has determined that insider trading laws do not apply to members of Congress or their staff. That is because, according to the SEC at least, these public officials do not owe the same legal duty of confidentiality that makes insider trading illegal by nonpoliticians.

The embarrassing inconsistency was ignored for years. All of this changed on Nov. 13, 2011, after insider trading on Capitol Hill was the focus of CBS's "60 Minutes." The previously moribund "Stop Trading on Congressional Knowledge Act" (H.R. 1148), first introduced in 2006, was pulled off the shelf and reintroduced. The bill suddenly had more than 140 sponsors, up from a mere nine before the show.

The "Stock" Act, as it is called, would make it illegal for members of Congress and staff to buy or sell securities based on certain nonpublic information. It would toughen disclosure obligations by requiring congressmen and their staffers to report securities trades of more than $1,000 to the clerk of the House (or the secretary of the Senate) within 90 days. And it would bring the new cottage industry in Washington, the so-called political intelligence consultants used by hedge funds, under the same rules that govern lobbyists. These political intelligence consultants are hired by professional investors to pry information out of Congress and staffers to guide trading decisions.

Publicly, House members echo bill sponsor Rep. Louise Slaughter (D., N.Y) in saying things like: "We want to remove any current ambiguity" about whether insider trading rules apply to Congress. Or as co-sponsor Rep. Timothy Walz (D., Minn.) put it: "We are trying to set the bar higher for members of Congress."

On closer examination, it appears that what Congress really wants is to keep making the big bucks that come from trading on inside information but to trick those outside of the Beltway into believing they are doing something about this corruption. For one thing, the rules proposed for Capitol Hill are not like those that apply to the rest of us. Ours are so broad and vague that prosecutors enjoy almost unfettered discretion in deciding when and whom to prosecute.

Congress's rules would be clear and precise. And not too broad; in fact they are too narrow. For example, the proposed rules in the Stock bill are directed only at information related to pending legislation. It would appear that inside information obtained by a congressman during a regulatory briefing, or in another context unrelated to pending legislation, would not be covered.

At a Dec. 6 House hearing, SEC enforcement chief Robert Khuzami opined that any new rules for Congress should not apply to ordinary citizens. He worried that legislators might "narrow current law and thereby make it more difficult to bring future insider trading actions against individuals outside of Congress."

This don't-rock-the-boat approach serves the interests of the SEC because it maximizes the commission's power and discretion, but it's not the best approach. The sensible thing to do would be to rationalize the rules by creating a clear definition of what constitutes insider trading, and then apply those rules to everyone on and outside Capitol Hill.

If the law passes in its current form, insider trading by Congress will not become illegal. I predict such trading will increase because the rules of the game will be clearer. Most significantly, the rule proposed for Congress would not involve the same murky inquiry into whether a trader owed or breached a "fiduciary duty" to the source of the information that required that he refrain from trading.

Continued in article

From The Wall Street Journal Accounting Weekly Review on December 8, 2011

Congress Pushing Curb on Trading
by: Brody Mullins
Dec 07, 2011
Click here to view the full article on WSJ.com
Click here to view the video on WSJ.com WSJ Video
 

TOPICS: Disclosure, Ethics, Insider Trading, Securities and Exchange Commission

SUMMARY: The article describes the case behind enacting legislation to ban insider-trading by members of Congress and their aides. This initiative was spurred in part by WSJ reporting on the topic. The related video presents the case for why Congressional insider-trading doesn't matter as does the 2009 opinion page piece listed in the related articles.

CLASSROOM APPLICATION: The article is useful in classes covering topics in ethics or in the relationship between information and market responses.

QUESTIONS: 
1. (Introductory) What is insider trading?

2. (Advanced) In general, how does the Securities and Exchange Commission undertake enforcement actions against suspected violations of insider trading rules by corporate insiders?

3. (Advanced) On what basis are members of Congress considered not to be subject to insider-trading rules?

4. (Introductory) Who is Rober Khuzami? What is his suggestion for resolving questions of whether members of Congress and their aides are undertaking improper insider trading?

5. (Advanced) What is a blind trust? What role might blind trusts and disclosure practices provide in alleviating this issue?
 

Reviewed By: Judy Beckman, University of Rhode Island
 

RELATED ARTICLES: 
Panel Cancels Vote on Insider Ban
by Brody Mullins
Dec 08, 2011
Online Exclusive

Learning to Love Insider Trading
by Donald J. Boudreaux
Oct 24, 2009
Page: W1

 

"Congress Pushing Curb on Trading," by: Brody Mullins, The Wall Street Journal, December 7, 2011 --- Click Here
http://online.wsj.com/article/SB10001424052970204083204577082751846890664.html?mod=djem_jiewr_AC_domainid

Congress is pressing its most concerted effort in decades to curb improper stock investing by U.S. lawmakers and their aides, with a focus on preventing trading based on nonpublic information gathered in the halls of Washington.

A House bill to outlaw insider trading on Capitol Hill has the support of more than 180 lawmakers, up from nine a month ago. In the Senate, lawmakers introduced two similar proposals a few weeks ago that have won support of more than 20 senators.

In a House hearing on the matter Tuesday, lawmakers batted around other ideas, such as requiring lawmakers to hold their finances in blind trusts, and mandating near-simultaneous disclosure of stock trades.

The rules covering how lawmakers can trade stocks, and what constitutes inside information in Congress, are murky. Congressional ethics rules justifying stock ownership say lawmakers shouldn't be insulated from "the personal and economic interests" of their constituents. At the same time, lawmakers regularly pick up information through briefings with top officials that is not available to the investing public.

At Tuesday's hearing, the director of enforcement for the Securities and Exchange Commission gave the legislation a boost by saying it would make it easier for the agency to prosecute insider-trading cases against members of Congress, something that has never happened. House and Senate committee chairman have scheduled votes on the various proposals next week.

The moves, inspired in part by a series of articles in The Wall Street Journal, are gaining momentum on Capitol Hill as approval ratings for Congress nose-dive. The Journal analysis last year found that a total of 86 legislators and congressional aides on both sides of the aisle reported frequent trades of securities in 2009. One aide posted nearly 2,300 trades in his brokerage account.

The push received a boost after a recent report on CBS's "60 Minutes" also examined lawmakers' trading practices, and lawmakers say approving such legislation is a good way for Congress to help restore the faith of Americans in government.

"It is not right that Congress can benefit from information that is not available to other Americans," Rep. Tim Walz (D., Minn.) said at the House hearing. Mr. Walz is a chief co-sponsor of the Stop Trading on Congressional Knowledge Act, or Stock Act.

Despite the recent momentum, the legislation is unlikely to make it into law this year. Time is running out on the calendar and not all lawmakers believe legislation is needed.

A key player in the push is Rep. Spencer Bachus (R., Ala.), chairman of the House Financial Services Committee. Last year, the Journal documented that Mr. Bachus made more than 200 trades in stocks and options in 2008, according to congressional disclosure forms. He often made multiple trades per day in the depths of the financial crisis.

Among his transactions, Mr. Bachus made $28,000 on short-term trades involving a fund designed to profit on declines in the Nasdaq 100 index, the disclosures show. At the time, Mr. Bachus was involved in briefings with key Fed and Treasury Department officials about the government's response to the financial collapse.

Mr. Bachus told the Journal that he didn't trade on nonpublic information, and argued more lawmakers should invest in markets to better understand them.

Rep. Bachus last year made 28 trades, primarily in a portfolio of the largest Chinese stocks available to international investors, more recent disclosure forms show. He said he stopped trading after the Journal's articles appeared.

"After your articles and others criticizing my successful purchase of Apple, Focus Media and [ProShares UltraShort QQQ, an exchange-traded fund], the only way to avoid mischaracterization of my stock market activities was to stop all trading. I did so in October of 2010," he said Tuesday in a statement.

In a separate statement, Mr. Bachus said he believes SEC rules already prohibit insider trading on Capitol Hill, but that "legislation that clarifies and improves the existing law would be welcomed."

Under SEC rules, insider trading is defined as buying or selling stocks based on information that is market-moving and nonpublic. To enforce a case, the SEC must also show that an individual used the information in violation of a duty to keep it private. Many people say insider-trading rules don't apply on Capitol Hill because lawmakers don't have such a "duty" to anyone. By contrast, the SEC brings insider-trading cases against government employees at federal departments and agencies, because the executive branch has clear rules and employees have a duty to their bosses and the companies they regulate.

On Capitol Hill, the law is "not as clear as it needs to be," said Sen. Joseph Lieberman last week at a hearing in the Homeland Security and Governmental Affairs panel.

Testifying before the House, Robert Khuzami, director of SEC enforcement, said under current law a judge could throw out an SEC case on the grounds that lawmakers don't have a clear duty not to trade on information they pick up while performing their regular duties.

Mr. Khuzami said "if there is a law that says that a duty exists, that is pretty clear and removes the ambiguity."

Other ideas considered include requiring lawmakers to create blind trusts to hold their stock portfolios, an idea proposed by Rep. Sean Duffy (R., Wis.). Under Mr. Duffy's proposal, if a lawmaker chose not to create a blind trust, he or she would be required to disclose stock trades within three days.

Mr. Duffy said mandating the disclosure of stock trades by lawmakers would bring Congress in line with the rules for corporate insiders.

Continued in article

Answer (Please share this with your students):
Over the years I've been a loyal viewer of the top news show on television --- CBS Sixty Minutes
On November 13, 2011 the show entitled "Insider" is the most depressing segment I've ever watched on television ---
http://www.cbsnews.com/video/watch/?id=7387951n&tag=contentMain;contentBody#ixzz1dfeq66Ok

Jensen Comment

Watch the "Insider" Video Now While It's Still Free ---
http://www.cbsnews.com/video/watch/?id=7387951n&tag=contentMain;contentBody

THIS IS HOW YOU FIX CONGRESS!!!!!
If you agree with the above, pass it on.
Warren Buffett, in a recent interview with CNBC, offers one of the best quotes about the debt ceiling:"I could end the deficit in 5 minutes," he told CNBC. "You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election. The 26th amendment (granting the right to vote for 18 year-olds) took only 3 months & 8 days to be ratified! Why? Simple! The people demanded it. That was in1971...before computers, e-mail, cell phones, etc. Of the 27 amendments to the Constitution, seven (7) took 1 year or less to become the law of the land...all because of public pressure.Warren Buffet is asking each addressee to forward this email to a minimum oftwenty people on their address list; in turn ask each of those to do likewise. In three days, most people in The United States of America will have the message. This is one idea that really should be passed around.*Congressional Reform Act of 2011......
1. No Tenure / No Pension. A Congressman collects a salary while in office and receives no pay when they are out of office.

2.. Congress (past, present & future) participates in Social Security. All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system,and Congress participates with the American people. It may not be used for any other purpose..

3. Congress can purchase their own retirement plan, just as all Americans do...

4. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.

5. Congress loses their current health care insurance and participates in the same health care plan as the American people.

6. Congress must equally abide by all laws they impose on the American people..

7. All contracts with past and present Congressmen are void effective 1/1/12. The American people did not make this contract with Congressmen. Congressmen made all these contracts for themselves. Serving in Congress is an honor,not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.


If each person contacts a minimum of twenty people then it will only take
three days for most people (in the U.S.) to receive the message. Maybe it is
time.


PLEASE PASS THIS ON

Read more: http://www.cbsnews.com/video/watch/?id=7387951n&tag=contentMain;contentBody#ixzz1dfeq66Ok
 

 

The Most Criminal Class Writes the Laws ---
http://www.trinity.edu/rjensen/FraudRotten.htm#Lawmakers

Bob Jensen's threads on Rotten to the Core ---
http://www.trinity.edu/rjensen/FraudRotten.htm


Another CBS Sixty Minutes Blockbuster (December 4, 2011)
"Prosecuting Wall Street"
Free download for a short while
http://www.cbsnews.com/8301-18560_162-57336042/prosecuting-wall-street/?tag=pop;stories
Note that this episode features my hero Frank Partnoy

Sarbanes–Oxley Act (Sarbox, SOX) ---
http://en.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act

 Key provisions of Sarbox with respect to the Sixty Minutes revelations:

The act also covers issues such as auditor independence, corporate governance, internal control assessment, and enhanced financial disclosure.

Sarbanes–Oxley Section 404: Assessment of internal control ---
http://en.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act#Sarbanes.E2.80.93Oxley_Section_404:_Assessment_of_internal_control

Both the corporate CEO and the external auditing firm are to explicitly sign off on the following and are subject (turns out to be a ha, ha joke)  to huge fines and jail time for egregious failure to do so:

Most importantly as far as the CPA auditing firms are concerned is that Sarbox gave those firms both a responsibility to verify that internal controls were effective and the authority to charge more (possibly twice as much) for each audit. Whereas in the 1990s auditing was becoming less and less profitable, Sarbox made the auditing industry quite prosperous after 2002.

There's a great gap between the theory of Sarbox and its enforcement

In theory, the U.S. Justice Department (including the FBI) is to enforce the provisions of Section 404 and subject top corporate executives and audit firm partners to huge fines (personal fines beyond corporate fines) and jail time for signing off on Section 404 provisions that they know to be false. But to date, there has not been one indictment in enormous frauds where the Justice Department knows that executives signed off on Section 404 with intentional lies.

In theory the SEC is to also enforce Section 404, but the SEC in Frank Partnoy's words is toothless. The SEC cannot send anybody to jail. And the SEC has established what seems to be a policy of fining white collar criminals less than 20% of the haul, thereby making white collar crime profitable even if you get caught. Thus, white collar criminals willingly pay their SEC fines and ride off into the sunset with a life of luxury awaiting.

And thus we come to the December 4 Sixty Minutes module that features two of the most egregious failures to enforce Section 404:
The astonishing case of CitiBank
The astonishing case of Countrywide (now part of Bank of America)

The Astonishing Case of CitiBank
What makes the Sixty Minutes show most interesting are the whistle blowing  revelations by a former Citi Vice President in Charge of Fraud Investigations

The astonishing case of Countrywide (now part of Bank of America)

I was disappointed in the CBS Sixty Minutes show in that it completely ignored the complicity of the auditing firms to sign off on the Section 404 violations of the big Wall Street banks and other huge banks that failed. Washington Mutual was the largest bank in the world to ever go bankrupt. Its auditor, Deloitte, settled with the SEC for Washington Mutual for $18.5 million. This isn't even a hand slap relative to the billions lost by WaMu's investors and creditors.

 No jail time is expected for any partners of the negligent auditing firms. .KPMG settled for peanuts with Countrywide for $24 million of negligence and New Century for $45 million of negligence costing investors billions.

Bob Jensen's Rotten to the Core threads ---
http://www.trinity.edu/rjensen/FraudRotten.htm

Bob Jensen's threads on how white collar crime pays even if you get caught ---
http://www.trinity.edu/rjensen/FraudConclusion.htm#CrimePays


Rudy Ruettiger was a high school football star who lacked the size and talent to play for Notre Dame and yet became the nation's poster boy for a walk on player who never gave up and ultimately inspired the tens of thousands of Fighting Irish fans --- not with his accomplishments but rather his never-give-up attitude.

The movie Rudy brought tears to my eyes ---
http://en.wikipedia.org/wiki/Rudy_%28film%29

Rudy Ruettiger --- http://en.wikipedia.org/wiki/Rudy_Ruettiger

Now Rudy Ruettiger is bringing tears to investors eyes.

"SEC Says Rudy Ruettiger Is A Stock Scammer," by Nathan Vardi, Forbes, December 16, 2011 ---
http://www.forbes.com/sites/nathanvardi/2011/12/16/sec-says-rudy-ruettiger-is-a-stock-scammer/

To many football and movie fans, Daniel “Rudy” Ruettiger is a hero, an ordinary kid who overcame extraordinary odds through hard work and determination to become part of Notre Dame folklore.

The Securities & Exchange Commission, however, says Rudy Ruettiger has grown up to become a penny stock promoter and scammer. The former Notre Dame walk-on has agreed to pay $382,866 to resolve the SEC’s claim that he participated in a pump-and-dump, fraudulently inducing investors to bid up the stock of his sports drink company, Rudy Nutrition. He did not admit or deny the allegations.

According to the SEC complaint filed in federal court in Las Vegas, Ruettiger’s company sold only a small amount of a sports drink called “Rudy” and instead the company served as a vehicle for a 2008 pump-and-dump scheme that generated $11 million in illicit profits. The SEC revoked registration of the stock of Rudy Nutrition in 2008.

“Investors were lured into the scheme by Mr. Ruettiger’s well-known, feel-good story but found themselves in a situation that did not have a happy ending,” said Scott Friestad, associate director of the SEC’s enforcement division, in a statement. “The tall tales in this elaborate scheme included phony taste tests and other false information.”

What kind of tall tales is the SEC talking about? One example is literature mailed to potential investors falsely claiming that in “a major southwest test, Rudy outsold Gatorade 2 to 1.” While these sorts of promotions were going on, the SEC says promoters were artificially inflating the price of Rudy Nutrition’s stock while selling unregistered shares to investors.

Continued in article

Bob Jensen's Fraud Updates are at
http://www.trinity.edu/rjensen/FraudUpdates.htm


"Should Some Bankers Be Prosecuted?" by Jeff Madrick and Frank Partnoy, New York Review of Books, November 10, 2011 ---
http://www.nybooks.com/articles/archives/2011/nov/10/should-some-bankers-be-prosecuted/
Thank you Robert Walker for the heads up!

More than three years have passed since the old-line investment bank Lehman Brothers stunned the financial markets by filing for bankruptcy. Several federal government programs have since tried to rescue the financial system: the $700 billion Troubled Asset Relief Program, the Federal Reserve’s aggressive expansion of credit, and President Obama’s additional $800 billion stimulus in 2009. But it is now apparent that these programs were not sufficient to create the conditions for a full economic recovery. Today, the unemployment rate remains above 9 percent, and the annual rate of economic growth has slipped to roughly 1 percent during the last six months. New crises afflict world markets while the American economy may again slide into recession after only a tepid recovery from the worst recession since the Great Depression.

n our article in the last issue,1 we showed that, contrary to the claims of some analysts, the federally regulated mortgage agencies, Fannie Mae and Freddie Mac, were not central causes of the crisis. Rather, private financial firms on Wall Street and around the country unambiguously and overwhelmingly created the conditions that led to catastrophe. The risk of losses from the loans and mortgages these firms routinely bought and sold, particularly the subprime mortgages sold to low-income borrowers with poor credit, was significantly greater than regulators realized and was often hidden from investors. Wall Street bankers made personal fortunes all the while, in substantial part based on profits from selling the same subprime mortgages in repackaged securities to investors throughout the world.

Yet thus far, federal agencies have launched few serious lawsuits against the major financial firms that participated in the collapse, and not a single criminal charge has been filed against anyone at a major bank. The federal government has been far more active in rescuing bankers than prosecuting them.

In September 2011, the Securities and Exchange Commission asserted that overall it had charged seventy-three persons and entities with misconduct that led to or arose from the financial crisis, including misleading investors and concealing risks. But even the SEC’s highest- profile cases have let the defendants off lightly, and did not lead to criminal prosecutions. In 2010, Angelo Mozilo, the head of Countrywide Financial, the nation’s largest subprime mortgage underwriter, settled SEC charges that he misled mortgage buyers by paying a $22.5 million penalty and giving up $45 million of his gains. But Mozilo had made $129 million the year before the crisis began, and nearly another $300 million in the years before that. He did not have to admit to any guilt.

The biggest SEC settlement thus far, alleging that Goldman Sachs misled investors about a complex mortgage product—telling investors to buy what had been conceived by some as a losing proposition—was for $550 million, a record of which the SEC boasted. But Goldman Sachs earned nearly $8.5 billion in 2010, the year of the settlement. No high-level executives at Goldman were sued or fined, and only one junior banker at Goldman was charged with fraud, in a civil case. A similar suit against JPMorgan resulted in a $153.6 million fine, but no criminal charges.

Although both the SEC and the Financial Crisis Inquiry Commission, which investigated the financial crisis, have referred their own investigations to the Department of Justice, federal prosecutors have yet to bring a single case based on the private decisions that were at the core of the financial crisis. In fact, the Justice Department recently dropped the one broad criminal investigation it was undertaking against the executives who ran Washington Mutual, one of the nation’s largest and most aggressive mortgage originators. After hundreds of interviews, the US attorney concluded that the evidence “does not meet the exacting standards for criminal charges.” These standards require that evidence of guilt is “beyond a reasonable doubt.”

This August, at last, a federal regulator launched sweeping lawsuits alleging fraud by major participants in the mortgage crisis. The Federal Housing Finance Agency sued seventeen institutions, including major Wall Street and European banks, over nearly $200 billion of allegedly deceitful sales of mortgage securities to Fannie Mae and Freddie Mac, which it oversees. The banks will argue that Fannie and Freddie were sophisticated investors who could hardly be fooled, and it is unclear at this early stage how successful these suits will be.

Meanwhile, several state attorneys general are demanding a settlement for abuses by the businesses that administer mortgages and collect and distribute mortgage payments. Negotiations are under way for what may turn out to be moderate settlements, which would enable the defendants to avoid admitting guilt. But others, particularly Eric Schneiderman, the New York State attorney general, are more aggressively pursuing cases against Wall Street, including Goldman Sachs and Morgan Stanley, and they may yet bring criminal charges.

Successful prosecutions of individuals as well as their firms would surely have a deterrent effect on Wall Street’s deceptive activities; they often carry jail terms as well as financial penalties. Perhaps as important, the failure to bring strong criminal cases also makes it difficult for most Americans to understand how these crises occurred. Are they simply to conclude that Wall Street made well- meaning if very big errors of judgment, as bankers claim, that were rarely if ever illegal or even knowingly deceptive?

What is stopping prosecution? Apparently not public opinion. A Pew Research Opinion survey back in 2010 found that three quarters of Americans said that government policies helped banks and financial institutions while two thirds said the middle class and poor received little help. In mid-2011, half of those surveyed by Pew said that Wall Street hurts the economy more than it helps it.

Many argue that the reluctance of prosecutors derives from the power and importance of bankers, who remain significant political contributors and have built substantial lobbying operations. Only 5 percent of congressional bills designed to tighten financial regulations between 2000 and 2006 passed, while 16 percent of those that loosened such regulations were approved, according to a study by the International Monetary Fund.2 The IMF economists found that a major reason was lobbying efforts. In 2009 and early 2010, financial firms spent $1.3 billion to lobby Congress during the passage of the Dodd-Frank Act. The financial reregulation legislation was weakened in such areas as derivatives trading and shareholder rights, and is being further watered down.

Others claim federal officials fear that punishing the banks too much will undermine the fragile economic recovery. As one former Fannie official, now a private financial consultant, recently told The New York Times, “I am afraid that we risk pushing these guys off of a cliff and we’re going to have to bail out the banks again.”

The responsibility for reluctance, however, also lies with the prosecutors and the law itself. A central problem is that proving financial fraud is much more difficult than proving most other crimes, and prosecutors are often unwilling to try it. Congress could fix this by amending federal fraud statutes to require, for example, that prosecutors merely prove that bankers should have known rather than actually did know they were deceiving their clients.

But even if Congress does not, it is not too late for bold federal prosecutors to try to bring a few successful cases. A handful of wins could create new precedents and common law that would set a higher and clearer standard for Wall Street, encourage more ethical practices, deter fraud—and arguably prevent future crises.

Continued in article

Watch the video! (a bit slow loading)
 Lynn Turner is Partnoy's co-author of the white paper."Make Markets Be Markets"
 "Bring Transparency to Off-Balance Sheet Accounting," by Frank Partnoy, Roosevelt Institute, March 2010 ---
 http://www.rooseveltinstitute.org/policy-and-ideas/ideas-database/bring-transparency-balance-sheet-accounting
 Watch the video!

The greatest swindle in the history of the world ---
http://www.trinity.edu/rjensen/2008Bailout.htm#Bailout
 

Bob Jensen's threads on how the banking system is rotten to the core ---
http://www.trinity.edu/rjensen/FraudRotten.htm#InvestmentBanking

 


Forensic Accounting Helper Site

December 7, 2011 message from Emma

Hi Bob,

Thanks for getting back to me!

When I graduated from college I realized that forensic accounting was something that a lot of fellow students were really interested in. However, people knew very little about what it was or how their skills could be applied to a career in the field. Basically, I'm trying to create something that acts as both an educational resource and a primer/gateway for people who want to learn more about the academic and professional nature of forensic accounting. The site is located here: http://www.forensicaccounting.net , and I'd really appreciate any feedback you might have. If you like it, I'd be great if you could include it on your site as a resource for others.

Thanks again!

Cheers,
Emma

Jensen Comment
The University of West Virginia now has a "Graduate Certificate in Forensic Accounting and Fraud Investigation (FAFI)" ---
http://www.be.wvu.edu/fafi/index.htm 

Forensic accountants in demand

The widespread growth in white-collar crime and the increased need for homeland security have greatly raised the demand for forensic accountants, fraud investigators and for auditors who posses those skills. Federal, state, and local governmental agencies, such as the Securities and Exchange Commission, the Internal Revenue Service, and the Offices of Inspector General all need accountants with forensic investigation skills. In the private sector, recent legislation (Sarbanes-Oxley Act of 2002) and auditing standards (Statement on Auditing Standard No. 99) require companies and their auditors to be more aggressive in detecting and preventing fraud.

A unique program to answer the need

The Division of Accounting has responded to this demand by developing an academic program designed to prepare entry-level accountants and others for forensic accounting and fraud investigative careers. Although many schools have added a single graduate or undergraduate course to their curricula, very few offer a multi-course graduate certificate program. This program is the only one in the region.

The 12-credit graduate Certificate Program in Forensic Accounting and Fraud Investigation (FAFI) is offered during the summer. Students may take two paths to earn this certificate:

WVU developed the National Curriculum

Drs. Richard Riley and Bonnie Morris led the effort to develop national curriculum guidelines for fraud and forensic accounting programs for the National Institute of Justice.

Association of Certified Fraud Examiners --- http://www.acfe.com/

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


Credit Scoring Models in the U.S. --- http://en.wikipedia.org/wiki/Credit_score_%28United_States%29

FICO --- http://en.wikipedia.org/wiki/FICO

"A Credit Score That Tracks You More Closely," by Tra Siegel Bernard,  The New York Times, December 2, 2011 --- Click Here
http://www.nytimes.com/2011/12/03/your-money/credit-scores/corelogics-new-credit-score-exposes-even-more-of-your-financial-life.html?_r=1

Anyone who has recently applied for a mortgage knows that lenders are already looking much more closely at your financial affairs. But soon, they’ll be able to easily delve into the deepest recesses of your financial life, accessing information that never before appeared on your credit report.

This week, a company called CoreLogic introduced a new type of credit file, which is based on the giant repository of consumer data it maintains on just about everything that most of the traditional credit bureaus do not: missed rental payments that have gone into collection, any evictions or child support judgments, as well as any applications for payday loans, along with your repayment history.

The new report also includes any property tax liens and whether you’ve fallen behind on your homeowner’s association dues. It may reflect that you now owe more than your house is worth or if you own any other real estate properties outright. It also is supposed to catch mortgages made by smaller lenders that the big credit bureaus may have missed.

The idea, CoreLogic says, is to provide lenders with more details about prospective borrowers, supplementing what they already know through the more traditional credit reports furnished by the big three credit bureaus, Equifax, Experian and TransUnion. Moreover, CoreLogic has formed a partnership with FICO — the provider of one of the most popular credit scores used by lenders — which will formulate a new consumer score based on the new data.

Perhaps it’s not surprising that a company decided to pull together this information, since much of it is already publicly available. But because it comes on top of all the other information that’s being collected about you — your exact location at every minute, where you’ve been on the Web — you can’t help but feel that some of these companies know more about your activities than your spouse.

While the CoreScore credit report became available to all types of lenders on Wednesday, the actual score, which will be ready in March, is being created specifically for mortgage and home equity lenders, though it could eventually be developed for other types of credit.

For many consumers, the files are likely to reveal black marks that previously went undetected, which may damage an otherwise clean record. But the companies contend that it works both ways: The added information could help consumers with thin credit files by illustrating positive behaviors elsewhere, say making timely rent payments.

So why now? Clearly, the two companies saw a business opportunity. Lenders, who just a few years back looked the other way, remain particularly skittish about mortgage lending and are looking for more information about prospective borrowers’ ability to pay their debts.

“Lending is very constrained and origination volumes need to grow to make for a profitable mortgage business,” said Joanne Gaskin, director of product management global scoring at FICO. “So lenders are looking for ways to expand, but to expand safely.”

An estimated 100 million American consumers will have a CoreScore credit report, while more than 200 million people have traditional reports from the big three bureaus. Though the new information can influence a lender’s decision, the new score isn’t replacing the classic scores used in the automated mortgage underwriting systems kept by Fannie Mae, Freddie Mac or the Federal Housing Administration, which buy or back the vast majority of mortgages (though CoreLogic said it has let the agencies know what it is doing). But the added information may sway a lender to charge you more (or less) in interest on a mortgage. Lenders of all stripes, including auto lenders, have access to the reports, and they will be marketed to employers and insurers, too.

Ms. Gaskin said that FICO was still tweaking the credit score’s formula. But the next step is to build something that will try to get even deeper inside your financial mind: The company plans to create a more sophisticated tool that will predict how you might behave under different loan terms.

The reason all of this is such a big deal, according to John Ulzheimer, president of consumer education at SmartCredit.com, is that CoreLogic already has major inroads with many lenders. When lenders want to pull your credit file, they go to a company like CoreLogic, which collects all three reports from the traditional bureaus, cleans them up a bit and merges them into a more user-friendly report. “They already have this massive market of mortgage companies that buy these credit reports from them,” he said. “It’s not like they have to go out and convince the companies to work with them.”

Continued in article

Bob Jensen's threads on FICO Scores ---
http://www.trinity.edu/rjensen/FraudReporting.htm#FICO


"In defence of the dismal science:  In a guest article, Robert Lucas, the John Dewey Distinguished Service Professor of Economics at the University of Chicago, rebuts criticisms that the financial crisis represents a failure of economics," The Economist, August 6, 2009 ---
http://www.economist.com/node/14165405?story_id=14165405

THERE is widespread disappointment with economists now because we did not forecast or prevent the financial crisis of 2008. The Economist’s articles of July 18th on the state of economics were an interesting attempt to take stock of two fields, macroeconomics and financial economics, but both pieces were dominated by the views of people who have seized on the crisis as an opportunity to restate criticisms they had voiced long before 2008. Macroeconomists in particular were caricatured as a lost generation educated in the use of valueless, even harmful, mathematical models, an education that made them incapable of conducting sensible economic policy. I think this caricature is nonsense and of no value in thinking about the larger questions: What can the public reasonably expect of specialists in these areas, and how well has it been served by them in the current crisis?

One thing we are not going to have, now or ever, is a set of models that forecasts sudden falls in the value of financial assets, like the declines that followed the failure of Lehman Brothers in September. This is nothing new. It has been known for more than 40 years and is one of the main implications of Eugene Fama’s “efficient-market hypothesis” (EMH), which states that the price of a financial asset reflects all relevant, generally available information. If an economist had a formula that could reliably forecast crises a week in advance, say, then that formula would become part of generally available information and prices would fall a week earlier. (The term “efficient” as used here means that individuals use information in their own private interest. It has nothing to do with socially desirable pricing; people often confuse the two.)

Mr Fama arrived at the EMH through some simple theoretical examples. This simplicity was criticised in The Economist’s briefing, as though the EMH applied only to these hypothetical cases. But Mr Fama tested the predictions of the EMH on the behaviour of actual prices. These tests could have come out either way, but they came out very favourably. His empirical work was novel and carefully executed. It has been thoroughly challenged by a flood of criticism which has served mainly to confirm the accuracy of the hypothesis. Over the years exceptions and “anomalies” have been discovered (even tiny departures are interesting if you are managing enough money) but for the purposes of macroeconomic analysis and forecasting these departures are too small to matter. The main lesson we should take away from the EMH for policymaking purposes is the futility of trying to deal with crises and recessions by finding central bankers and regulators who can identify and puncture bubbles. If these people exist, we will not be able to afford them.

Continued in article

Bob Jensen's threads on the Efficient Market Hypothesis (EMH) and its critics ---
http://www.economist.com/node/14165405?story_id=14165405
Professor Lucas provides a brief, albeit interesting, summary of how Eugene Fama developed the EMH from cases to models rather than vice versa as in often advocated in journals like the TAR, JAR, and JAE that are heavily biased toward publishing models but not cases

How did academic accounting research become a pseudo science?
http://www.trinity.edu/rjensen/theory01.htm#WhatWentWrong


"Here I'm a 'Member,' Not an Adjunct," by Emma Thornton, Chronicle of Higher Education, December 11, 2011 ---
http://chronicle.com/article/Here-Im-a-Member-Not-an/130047/?sid=wb&utm_source=wb&utm_medium=en

Jensen Comment
Although this is not about accounting education, the article does make useful comparisons of the British versus England faculty life and work. You have to read down deep in the article to pick up such things as teaching students nearly 40 hours per week and being relieved of most research/writing pressures in England. This type of teaching load is unheard of in U.S. colleges and universities and even K-12 schools. The only thing that might come even close is online teaching where the instructor elects to have a lot of instant messaging with relatively large classes.

There are other comparisons that may not extend to all disciplines such as accounting, law, medicine, finance, economics, engineering, and science. But there may well be a larger U.K. teaching responsibility and lower research responsibilities for some instructors in those disciplines as well. In the U.S., most of our for-profit universities do not have research expectations of faculty. One Congresswoman recently claimed that for-profit universities are more efficient, but I'm not certain I admire this type of efficiency that eliminates research expectations of full-time faculty.

In England and many other European nations an accounting/business PhD program is much faster with a smaller research expectation. For example, in the North America there are no online accounting doctoral programs in AACSB-accredited universities, and the time-to-completion is 4-6 full-time years beyond a masters degree. In some countries like Germany, however, the time required to become a full professor may be much longer (e.g., 18 years) due to what are tantamount to longer apprenticeships.

 


  • From the Scout Report on December 9, 2011

    BuzzData --- http://buzzdata.com/

    The tagline of BuzzData is that it "lets you share your data in a smarter, easier way." BuzzData is a social platform that allows users to share a range of data with other interested parties in a way that is intuitive and easy to use. After signing up, visitors can upload their data to a dedicated home page, and attach visualizations, articles, and other documents that offer context to their work and information. Also, visitors can invite collaborators over to their site and track changes over time. This version is compatible with all operating systems.


    Pillarbox --- https://chrome.google.com/webstore/detail/lfpkiimneajkmcikgpihhiekhmeemacn

    At times, finding a place for distraction-free writing (especially when online) can be almost impossible. Pillarbox provides that place, and it is a fullscreen text editor. Features include a live word count, typewriter scrolling, and it also has a customizable feature. It is designed for use with operating systems with Google Chrome installed

    From the Scout Report on December 16, 2011

    Stixy --- http://www.stixy.com/ 

    What exactly is a “Stixy”? In short, it is an interactive and intuitive way to share information with friends and family that's a bit like a 21st- century online bulletin board. Visitors can sign up for an account and use one of their online tutorials to get started. Users will find that they can organize their family's schedule, drag and drop websites, graphics, and photos of note onto their “Stixy” board, and also share files. This version is compatible with all operating systems.


    Quick Screen Share --- http://quickscreenshare.com/ 

    Quick Screen Share is pretty much the easiest way to share a screen, and it doesn't require registration or installation. The program allows visitors to also remotely control the mouse and keyboard, and it is a great way to share information on a range of projects. This version is compatible with all operating systems, including Linux.


    As the 49ers search for a new home, questions abound about the future of
    the Hunters Point community
    Days are numbered for San Francisco's Candlestick Park
    http://www.sfexaminer.com/local/2011/12/days-are-numbered-san-franciscos-
    candlestick-park


    Santa Clara lines up financing for 49ers stadium
    http://blog.sfgate.com/49ers/2011/12/03/santa-clara-lines-up-financing-for-
    49ers-stadium/


    49ers stadium: S.F. mayor has slim hopes
    http://articles.sfgate.com/2011-12-06/news/30480947_1_49ers-stadium-jed-
    york-stadium-project


    San Francisco Redevelopment Agency: Bayview Hunters Point
    http://www.sfredevelopment.org/index.aspx?page=53

    San Francisco Cityscape
    http://www.sfcityscape.com/

    San Francisco Historic Images
    http://sfpl.org/index.php?pg=2000028501

     


    Free online textbooks, cases, and tutorials in accounting, finance, economics, and statistics --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm#Textbooks


    Education Tutorials

    10 Cool iPad Apps From Uncle Sam ---
    http://www.informationweek.com/news/galleries/government/mobile/232300178?pgno=1
    Thanks to Glen Gray for the heads up.

    Jean-Paul Sartre Breaks Down the Bad Faith of Intellectuals --- Click Here
    http://www.openculture.com/2011/12/jean-paul_sartre_on_the_bad_faith_of_modern_intellectuals.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

    Office of Science Education - LifeWorks --- http://science.education.nih.gov/LifeWorks.nsf/feature/index.htm

    I-STEM --- http://www.istem.illinois.edu/index.html

    NOVA: Journey of the Butterflies --- http://www.pbs.org/wgbh/nova/nature/journey-butterflies.html

    Try Engineering --- http://www.tryengineering.org

    Bob Jensen's threads on general education tutorials are at http://www.trinity.edu/rjensen/Bookbob2.htm#EducationResearch


    Engineering, Science, and Medicine Tutorials

    I-STEM --- http://www.istem.illinois.edu/index.html

    Planet Earth --- http://www.learner.org/resources/series49.html

    Office of Science Education - LifeWorks --- http://science.education.nih.gov/LifeWorks.nsf/feature/index.htm

    Energetics, Structure, and Kinetics --- http://saf.bio.caltech.edu/bi170a

    Anatomy and Physiology Learning Module --- http://msjensen.cehd.umn.edu/Webanatomy/default.asp

    DNA Replication Fork (animations) --- http://www.mcb.harvard.edu/Losick/images/TromboneFINALd.swf

    NOVA: Journey of the Butterflies --- http://www.pbs.org/wgbh/nova/nature/journey-butterflies.html

    Using Genetics Mini-lectures and Podcasts to Make Time for Active Learning ---
    http://scientificteaching.wisc.edu/materials/molecular/active_learning.htm

    Stephen Fry Introduces the Strange New World of Nanoscience --- Click Here
    http://www.openculture.com/2011/12/stephen_fry_introduces_the_strange_new_world_of_nanoscience.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

    Animated Video Shows Curiosity, NASA’s Mars Rover, in Dramatic Action --- Click Here
    http://www.openculture.com/2011/12/curiosity_in_action.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

    American Cetacean Society (ocean animals) --- http://www.acsonline.org

    Healthy Sleep --- http://healthysleep.med.harvard.edu/healthy/

    Alcohol Studies Database --- http://www2.scc.rutgers.edu/alcohol_studies/alcohol/

    Cryogenic Treatment Database --- http://www.cryogenictreatmentdatabase.org/

    Try Engineering --- http://www.tryengineering.org

    Research Techniques Workbook Modules [biology] http://biology.hunter.cuny.edu/tech/table_of_contents.htm

    Marian E. Koshland Integrated Natural Sciences Center at Haverford College
    Biography of an Experiment --- http://www.haverford.edu/kinsc/boe/

    The Biography of Experiment Series is an ongoing cooperative effort between students and faculty at Haverford College to expose undergraduates to the stories behind influential manuscripts in the Natural Sciences.

    Posted on this site are excerpts of original manuscripts, each of which has been annotated by undergraduates who have spent a semester critically evaluating the work and assessing the authors’ own perspectives.

    By including their interviews with primary investigators, links to background information, and tips for understanding and critically interpreting data, these undergraduates have developed a unique pedagogical tool that should enhance their peers ability to navigate and understand the primary literature. Developing scholars will benefit from their colleagues’ insights as they are invited to explore the living history of a scientific inquiry.

    Jensen Comment
    Some of these are great learning modules for students in experimental science. Most of the cases are in the natural sciences.

    However once case involves the psychology of prediction: 
    On the Psychology of Prediction (Daniel Kahneman and Amos Tversky), 1973 ---
    http://www.haverford.edu/kinsc/Biography/Psych/Armstrong/BOEhome.htm
    This is one of the classic works that led to a Nobel Prize for Professor Kahneman

    These resources might be especially useful to accounting students seeking to know what went wrong with accountics science ---
    http://www.trinity.edu/rjensen/theory01.htm#WhatWentWrong

     

    Bob Jensen's threads on free online science, engineering, and medicine tutorials are at --- http://www.trinity.edu/rjensen/Bookbob2.htm#Science


    Social Science and Economics Tutorials

    Stem Up (poverty youth in Boyle Heights of Los Angeles) --- http://www.stemup.org/su/index.html

    Practical Action (using technology to solve poverty problems) --- http://practicalaction.org/home

    Health Affairs (public health) ---  http://www.healthaffairs.org/

    Crowded House: How the World’s Population Grew to 7 Billion People --- Click Here
    http://www.openculture.com/2011/12/crowded_house_how_the_worlds_population_grew_to_7_billion_people.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

    Philosophy in Prison: Weighty Conversations about Right and Wrong --- Click Here
    http://www.openculture.com/2011/12/philosophy_in_prison.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

    Conformity Isn’t a Recipe for Excellence: George Carlin & Steve Jobs (NSFW) --- Click Here
    http://www.openculture.com/2011/12/conformity_isnt_a_recipe_for_excellence_george_carlin_steve_jobs_nsfw.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

    Bob Jensen's threads on Economics, Anthropology, Social Sciences, and Philosophy tutorials are at http://www.trinity.edu/rjensen/Bookbob2.htm#Social

    Iran Chamber Society (information database about Iran_ --- http://www.iranchamber.com

    Video:  5,000 Years of History in the Middle East --- http://www.mapsofwar.com/images/EMPIRE17.swf

    Jean-Paul Sartre Breaks Down the Bad Faith of Intellectuals --- Click Here
    http://www.openculture.com/2011/12/jean-paul_sartre_on_the_bad_faith_of_modern_intellectuals.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

    From the Scout Report on December 9, 2011

    The Connect America Fund hopes to give rural Americans broadband access, bridging the "digital divide". Sweet land of subsidy
    http://www.economist.com/node/21541061 

    Rural broadband access could be key to economic development
    http://www.wisbusiness.com/index.iml?Article=255010 

    New Research Shows Digital Divide Still Persists in the U.S. --- Click Here
    http://www.nonprofitquarterly.org/index.php?option=com_content&view=article&id=17531:new-%20research-shows-digital-divide-still-persists-in-the-us&catid=155:nonprofit-%20newswire&Itemid=986  

    Exploring the Digital Nation-Computer and Internet Use at Home ---
    http://www.esa.doc.gov/Reports/exploring-digital-nation-computer-and-internet-use-home

    Connecting America http://www.fcc.gov/encyclopedia/connecting-america 

    A Brief History of the Rural Electric and Telephone Programs http://www.rurdev.usda.gov/rd/70th/rea-history.pdf

     

     


    Law and Legal Studies

    Philosophy in Prison: Weighty Conversations about Right and Wrong --- Click Here
    http://www.openculture.com/2011/12/philosophy_in_prison.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

    Bob Jensen's threads on law and legal studies are at http://www.trinity.edu/rjensen/Bookbob2.htm#Law


    Math Tutorials

    "Incredible Mental Math Gymnastics on “Countdown” --- Click Here
    http://www.openculture.com/2011/12/incredible_mental_math_gymnastics_on_countdown.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

    Bob Jensen's threads on free online mathematics tutorials are at http://www.trinity.edu/rjensen/Bookbob2.htm#050421Mathematics


    History Tutorials

    A Night in Macao --- http://www.youtube.com/watch_popup?v=uI2kO4qTi80&vq=medium

    Sistine Chapel --- http://www.vatican.va/various/cappelle/sistina_vr/index.html
    Move the mouse around

    Center for the Book (Library of Congress) --- http://www.read.gov/cfb

    Remembering Pearl Harbor --- http://www.navy.mil/ph70/index.asp?id=4

    Absolutely Fabulous 1939-1941 American History Photographs (most are not related to war) ---
    http://extras.denverpost.com/archive/captured.asp

    Torn in Two: 150th Anniversary of the Civil War --- http://tornintwo.org/

    The War of the Rebellion Atlas (amazing Civil War atlas) ---
    http://contentdm.baylor.edu/cdm4/index_19wor.php?CISOROOT=/19wor

    Shakespeare in the Parlor (Art, Illustrations, Drawings) --- http://www.americanantiquarian.org/Exhibitions/Printsinparlor/shakespeare/index.htm

    Luminous: The Art of Asia [Flash Player] --- http://www.seattleartmuseum.org/luminous/index.html

    Making a Difference Through the Arts [Asian Society] --- http://www.asiasociety.org/files/pdf/as_making_difference_report.pdf

    High School Student Talks Symbolism with 75 Big Authors (1963) --- Click Here
    http://www.openculture.com/2011/12/75_authors_talk_symbolism.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

    Joplin Historical Postcards (Missouri) --- http://digital.library.umsystem.edu/cgi/i/image/image-idx?page=index;c=joplinic

    Mail Art (meaning art sent via the post office) --- http://ubdigit.buffalo.edu/collections/lib/lib-pc/lib-pc001_MailArt.php

    Kansas Collection Photographs --- http://luna.ku.edu:8180/luna/servlet/kuvc1kcp~1~1

    Fifty Years of Bay Area Art: The SECA Awards (California) --- http://www.sfmoma.org/exhib_events/exhibitions/437

    San Francisco Cityscape --- http://www.sfcityscape.com/

    San Francisco Historic Images --- http://sfpl.org/index.php?pg=2000028501

    Remembering George Whitman, Owner of Famed Bookstore, Shakespeare & Company --- Click Here
    http://www.openculture.com/2011/12/remembering_george_whitman.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

    The Baltimore Museum of Art --- http://www.artbma.org/

    Forgotten Detroit (buildings) --- http://www.forgottendetroit.com/

    Johnstown Area Heritage Association --- http://www.jaha.org/

    History: The Colonial Williamsburg Official History Site http://www.history.org/history/index.cfm

    Oz Collection --- http://special.lib.umn.edu/clrc/oz/index.php

    Flying By the Statue of Liberty --- http://www.youtube.com/watch?v=jZK5ip8ZIjY

    Jean-Paul Sartre Breaks Down the Bad Faith of Intellectuals --- Click Here
    http://www.openculture.com/2011/12/jean-paul_sartre_on_the_bad_faith_of_modern_intellectuals.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

    Indiana University's Photo Archives (over two million pictures) ---
    http://paper.li/businessschools?utm_source=subscription&utm_medium=email&utm_campaign=paper_sub  

    From the Scout Report on December 9, 2011

    The Connect America Fund hopes to give rural Americans broadband access, bridging the "digital divide". Sweet land of subsidy
    http://www.economist.com/node/21541061 

    Rural broadband access could be key to economic development
    http://www.wisbusiness.com/index.iml?Article=255010 

    New Research Shows Digital Divide Still Persists in the U.S. --- Click Here
    http://www.nonprofitquarterly.org/index.php?option=com_content&view=article&id=17531:new-%20research-shows-digital-divide-still-persists-in-the-us&catid=155:nonprofit-%20newswire&Itemid=986  

    Exploring the Digital Nation-Computer and Internet Use at Home ---
    http://www.esa.doc.gov/Reports/exploring-digital-nation-computer-and-internet-use-home

    Connecting America http://www.fcc.gov/encyclopedia/connecting-america 

    A Brief History of the Rural Electric and Telephone Programs http://www.rurdev.usda.gov/rd/70th/rea-history.pdf

     

    Bob Jensen's threads on history tutorials are at http://www.trinity.edu/rjensen/Bookbob2.htm#History
    Also see http://www.trinity.edu/rjensen/ElectronicLiterature.htm  


    Language Tutorials

     

    Bob Jensen's links to language tutorials are at http://www.trinity.edu/rjensen/Bookbob2.htm#Languages


    Music Tutorials

    The Controversial Sounds of Silence: John Cage’s 4’33″ Performed by the BBC Symphony Orchestra --- Click Here
    http://www.openculture.com/2011/12/the_controversial_sounds_of_silence_john_cages_433_.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCulture+%28Open+Culture%29

    Bob Jensen's threads on music tutorials ---
    http://www.trinity.edu/rjensen/Bookbob2.htm#050421Music

    Bob Jensen's threads on music performances ---
    http://www.trinity.edu/rjensen/music.htm


    Writing Tutorials

    Bob Jensen's helpers for writers are at http://www.trinity.edu/rjensen/Bookbob3.htm#Dictionaries


    Updates from WebMD --- http://www.webmd.com/

    December 8, 2011

    December 9, 2011

    December 10, 2011

    December 12, 2011

    December 14, 2011

    December 15, 2011

    December 16, 2011

    December 17, 2011

    December 19, 2011


    Howard LeWine, M.D.
    Leg clots (aka deep-vein thrombosis): an immediate and long-term health hazard
    Posted December 14, 2011, 2:59 pm Howard LeWine, M.D., Chief Medical Editor, Internet Publishing, Harvard Health Publications
    http://paper.li/businessschools?utm_source=subscription&utm_medium=email&utm_campaign=paper_sub

    When it comes to under-the-radar health conditions, deep-vein thrombosis is at the top of the list. Most of my patients have never heard of this common problem. Yet deep-vein thrombosis puts more than one-quarter million Americans in the hospital each year, and complications from it are responsible for upwards of 100,000 deaths.

    Deep-vein thrombosis (DVT) is the medical term for a blood clot that forms in a leg vein. Some DVTs cause no symptoms; others hurt, or make the leg swell. There are two big worries with a DVT:

    Pulmonary embolism. A piece of a clot can break away, travel through the bloodstream, and become lodged in the lungs. This is called a pulmonary embolism. Almost all DVT-related deaths are due to a pulmonary embolism.

    Post-phlebitis syndrome. A clot can permanently damage the vein it is lodged in. This problem, called post-phlebitis syndrome, causes persistent leg pain, swelling, darkened skin, and sometimes hard-to-heal skin ulcers. Up to 40% of people with a DVT develop post-phlebitis syndrome. Treating DVT

    Deep-vein thrombosis is initially treated with an anticoagulant such as heparin or fondaparinux. Anticoagulants can stop a DVT from getting larger and can prevent new clots from forming. Use of these drugs substantially decreases the risk of developing a pulmonary embolism.

    But anticoagulants can’t dissolve a clot that has already formed. That’s the job of drugs called thrombolytics (commonly known as clot busters), such as streptokinase and alteplase. Although you might think that using these drugs against DVT would be a good idea, studies have had mixed results. Thrombolytics don’t appear to improve survival or shorten hospital stays, and they increase the risk of bleeding. They do, however, appear to decrease the risk of post-phlebitic syndrome.

    A new study published online in The Lancet shows that delivering a clot-dissolving drug directly into the clot—instead of having it circulate through the bloodstream via standard intravenous delivery—is very effective in preventing post-phlebitic syndrome among people with large clots that are high up in the leg and/or in the pelvis. Direct delivery of the clot-buster allows the use of a lower dose, which decreases the risk of bleeding elsewhere in the body.

    Not everyone with a DVT needs direct clot-dissolving therapy. Anticoagulants, along with support stockings to reduce swelling and improve blood flow, are enough for most people. For those with a large clot, especially one high up in the leg or in the pelvis, direct injection of a thrombolytic agent will help protect the affected vein from post-phlebitic syndrome. Prevention is preferable to treatment

    Anyone can develop a DVT, although some people are more likely to have one than others. You are at increased risk if you or a close family member have had a DVT before, have an inherited condition that causes your blood to clot more readily than normal, have cancer, are immobile for a long time (confined to bed, long-duration plane or car trip, etc.), or use birth control pills.

    Here are some good ways that everyone can use to help prevent a DVT from forming:

    Stay physically active. At work or at home, get up from your chair frequently. Short walks contract the muscles in your legs that help pump blood back toward your heart. Avoid dehydration. This is especially important when you are going to be sitting for a prolonged time, such as in an airplane. Move your legs. If you are bedridden and can’t take frequent walks, contracting your leg muscles will help prevent blood from pooling and clotting. Maintain a healthy body weight. Obesity increases the risk of DVT. If you are hospitalized for some reason, ask your doctors and nurses to make sure you are receiving measures—such as wearing special stockings or getting low-dose heparin—to prevent blood clots.




    Paula's Recipe for Fruitcake

    Ingredients:

    * 2 cups flour
    * 1 stick butter
    * 1 cup of water
    * 1 tsp baking soda
    * 1 cup of sugar
    * 1 tsp salt
    * 1 cup of brown sugar
    * Lemon juice
    * 4 large eggs
    * Nuts * 2 bottles wine
    * 2 cups of dried fruit

    Sample the wine to check quality. Take a large bowl, check the wine again. To be sure it is of the highest quality, pour one level cup and drink. Repeat. Turn on the electric mixer. Beat one cup of butter in a large fluffy bowl. Add one teaspoon of sugar Beat again. At this point it's best to make sure the wine is still OK. Try another cup... Just in case. Turn off the mixerer thingy. Break 2 eggs and add to the bowl and chuck in the cup of dried fruit.

    Pick the frigging fruit up off floor. Mix on the turner.. If the fried druit gets stuck in the beaterers just pry it loose with a drewscriver. Sample the wine to check for tonsisticity. Next, sift two cups of salt. Or something. Check the wine. Now shift the lemon juice and strain your nuts. Add one table. Add a spoon of sugar, or some fink. Whatever you can find. Greash the oven. Turn the cake tin 360 degrees and try not to fall over. Don't forget to beat off the turner. Finally, throw the bowl through the window Finish the wine and wipe counter with the cat. Go to WALMART and buy cake.

    Bingle Jells!


    Political quotations forwarded by Eileen

    Those who are too smart to engage in politics are punished by being governed by those who are dumber.
    ~Plato

    The problem with political jokes is they get elected.
    ~Henry Cate, VII

    We hang the petty thieves and appoint the great ones to public office.
    ~Aesop

    If we got one-tenth of what was promised to us in these campaign speeches there wouldn't be any inducement to go to heaven.
    ~Will Rogers

    Politicians are the same all over. They promise to build a bridge even where there is no river.
    ~Nikita Khrushchev

    When I was a boy I was told that anybody could become President. I'm beginning to believe it.
    ~Clarence Darrow

    If God wanted us to vote, he would have given us candidates.
    ~Jay Leno

    I offer my opponents a bargain: if they will stop telling lies about us, I will stop telling the truth about them.
    ~Adlai Stevenson, campaign speech, 1952

    A politician is a fellow who will lay down your life for his country.
    ~Texas Guinan

    Any American who is prepared to run for president should automatically, by definition, be disqualified from ever doing so.
    ~Gore Vidal

    I have come to the conclusion that politics is too serious a matter to be left to the politicians.
    ~Charles de Gaulle

    Politics is supposed to be the second-oldest profession. I have come to realize that it bears a very close resemblance to the first.
    ~Ronald Reagan

    Politics: [Poly "many" + tics "blood-sucking parasites"]
    ~Larry Hardiman

    Instead of giving a politician the keys to the city, it might be better to change the locks.
    ~Doug Larson

    Don't vote, it only encourages them.
    ~Author Unknown

    There ought to be one day - just one - when there is open season on senators and congressmen.
    ~Will Rogers

    Jensen Comment
    The above Will Rogers' quote is no longer politically correct since Gabby Giffords was gunned down in her home district. But don't you wish, down deep, that Dick Cheney would invite Newt Gingrich on a hunting trip.



    Forwarded by Gene and Joan

    This is an article submitted to a 1999 Louisville Sentinel contest to find out who had the wildest Christmas dinners. It won first prize.

    As a joke, my brother Jay used to hang a pair of panty hose over his fireplace before Christmas. He said all he wanted was for Santa to fill them.

    What they say about Santa checking the list twice must be true because every Christmas morning, although Jay's kids' stockings overflowed, his poor pantyhose hung sadly empty.

    One year I decided to make his dream come true. I put on sunglasses and went in search of an inflatable love doll. They don't sell those things at Wal-Mart. I had to go to an adult bookstore downtown.

    If you've never been in an X-rated store, don't go, you'll only confuse yourself. I was there an hour saying things like, 'What does this do?' 'You're kidding me!' 'Who would buy that?' Finally, I made it to the inflatable doll section.

    I wanted to buy a standard, uncomplicated doll that could also substitute as a passenger in my truck so I could use the car pool lane during rush hour.

    Finding what I wanted was difficult. 'Love Dolls' come in many different models. The top of the line, according to the side of the box, could do things I'd only seen in a book on animal husbandry. I settled for 'Lovable Louise.' She was at the bottom of the price scale.

    To call Louise a 'doll' took a huge leap of imagination.

    On Christmas Eve and with the help of an old bicycle pump, Louise came to life.

    My sister-in-law was in on the plan and let me in during the wee morning hours. Long after Santa had come and gone, I filled the dangling pantyhose with Louise's pliant legs and bottom. I also ate some cookies and drank what remained of a glass of milk on a nearby tray. I went home, and giggled for a couple of hours.

    The next morning my brother called to say that Santa had been to his house and left a present that had made him VERY happy, but had left the dog confused. She would bark, start to walk away, then come back and bark some more.

    We all agreed that Louise should remain in her pantyhose so the rest of the family could admire her when they came over for the traditional Christmas dinner.

    My grandmother noticed Louise the moment she walked in the door. 'What the hell is that?' she asked.

    My brother quickly explained, 'It's a doll.'

    'Who would play with something like that?' Granny snapped.

    I kept my mouth shut.

    'Where are her clothes?' Granny continued.

    'Boy, that turkey sure smells nice, Gran,' Jay said, to steer her into the dining room.

    But Granny was relentless. 'Why doesn't she have any teeth?'

    Again, I could have answered, but why would I? It was Christmas and no one wanted to ride in the back of the ambulance saying, 'Hang on Granny, hang on!'

    My grandfather, a delightful old man with poor eyesight, sidled up to me and said, 'Hey, who's the naked gal by the fireplace?' I told him she was Jay's friend.

    A few minutes later I noticed Grandpa by the mantel, talking to Louise. Not just talking, but actually flirting. It was then that we realized this might be Grandpa's last Christmas at home.

    The dinner went well. We made the usual small talk about who had died, who was dying, and who should be killed, when suddenly Louise made a noise like my father in the bathroom in the morning. Then she lurched from the mantel, flew around the room twice, and fell in a heap in front of the sofa. The cat screamed. I passed cranberry sauce through my nose, and Grandpa ran across the room, fell to his knees, and began administering mouth-to-mouth resuscitation.

    My brother fell back over his chair and wet his pants.

    Granny threw down her napkin, stomped out of the room, and sat in the car.

    It was indeed a Christmas to treasure and remember. Later in my brother's garage, we conducted a thorough examination to decide the cause of Louise's collapse. We discovered that Louise had suffered from a hot ember to the back of her right thigh.

    Fortunately, thanks to a wonder drug called duct tape, we restored her to perfect health..

    I can't wait until next Christmas.




     

    Humor Between November 1 and November 30, 2011 --- http://www.trinity.edu/rjensen/book11q4.htm#Humor113011 

    Humor Between October 1 and October 31, 2011 --- http://www.trinity.edu/rjensen/book11q4.htm#Humor103111 

    Humor Between September 1 and September 30, 2011 --- http://www.trinity.edu/rjensen/book11q3.htm#Humor093011

    Humor Between August 1 and August 31, 2011 --- http://www.trinity.edu/rjensen/book11q3.htm#Humor083111 

    Humor Between July 1 and July 31, 2011 --- http://www.trinity.edu/rjensen/book11q3.htm#Humor073111

    Humor Between May 1 and June 30, 2011 --- http://www.trinity.edu/rjensen/book11q2.htm#Humor063011 

    Humor Between April 1 and April 30, 2011 --- http://www.trinity.edu/rjensen/book11q2.htm#Humor043011  

    Humor Between February 1 and March 31, 2011 --- http://www.trinity.edu/rjensen/book11q1.htm#Humor033111 

    Humor Between January 1 and January 31, 2011 --- http://www.trinity.edu/rjensen/book11q1.htm#Humor013111 

     




    Tidbits Archives --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm

    Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
    For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/

    Find a College
    College Atlas --- http://www.collegeatlas.org/
    Among other things the above site provides acceptance rate percentages
    Online Distance Education Training and Education --- http://www.trinity.edu/rjensen/Crossborder.htm
    For-Profit Universities Operating in the Gray Zone of Fraud  (College, Inc.) --- http://www.trinity.edu/rjensen/HigherEdControversies.htm#ForProfitFraud

    Shielding Against Validity Challenges in Plato's Cave ---
    http://www.trinity.edu/rjensen/TheoryTAR.htm

    What went wrong in accounting/accountics research?  ---
    http://www.trinity.edu/rjensen/theory01.htm#WhatWentWrong

    The Sad State of Accountancy Doctoral Programs That Do Not Appeal to Most Accountants ---
    http://www.trinity.edu/rjensen/theory01.htm#DoctoralPrograms

    AN ANALYSIS OF THE EVOLUTION OF RESEARCH CONTRIBUTIONS BY THE ACCOUNTING REVIEW: 1926-2005 ---
    http://www.trinity.edu/rjensen/395wpTAR/Web/TAR395wp.htm#_msocom_1

    Bob Jensen's threads on accounting theory ---
    http://www.trinity.edu/rjensen/theory01.htm

    Tom Lehrer on Mathematical Models and Statistics ---
    http://www.youtube.com/watch?v=gfZWyUXn3So

    Systemic problems of accountancy (especially the vegetable nutrition paradox) that probably will never be solved ---
    http://www.trinity.edu/rjensen/FraudConclusion.htm#BadNews

     

    World Clock --- http://www.peterussell.com/Odds/WorldClock.php
    Facts about the earth in real time --- http://www.worldometers.info/

    Interesting Online Clock and Calendar --- http://home.tiscali.nl/annejan/swf/timeline.swf
    Time by Time Zones --- http://timeticker.com/
    Projected Population Growth (it's out of control) --- http://geography.about.com/od/obtainpopulationdata/a/worldpopulation.htm
             Also see http://users.rcn.com/jkimball.ma.ultranet/BiologyPages/P/Populations.html
            
    Facts about population growth (video) --- http://www.youtube.com/watch?v=pMcfrLYDm2U
    Projected U.S. Population Growth --- http://www.carryingcapacity.org/projections75.html
    Real time meter of the U.S. cost of the war in Iraq --- http://www.costofwar.com/ 
    Enter you zip code to get Census Bureau comparisons --- http://zipskinny.com/
    Sure wish there'd be a little good news today.

    Free (updated) Basic Accounting Textbook --- search for Hoyle at
    http://www.trinity.edu/rjensen/ElectronicLiterature.htm#Textbooks

    CPA Examination --- http://en.wikipedia.org/wiki/Cpa_examination
    Free CPA Examination Review Course Courtesy of Joe Hoyle --- http://cpareviewforfree.com/

    Rick Lillie's education, learning, and technology blog is at http://iaed.wordpress.com/

    Accounting News, Blogs, Listservs, and Social Networking ---
    http://www.trinity.edu/rjensen/AccountingNews.htm

    Bob Jensen's Threads --- http://www.trinity.edu/rjensen/threads.htm 
    Current and past editions of my newsletter called New Bookmarks --- http://www.trinity.edu/rjensen/bookurl.htm
    Current and past editions of my newsletter called Tidbits --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm
    Current and past editions of my newsletter called Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm

    Online Books, Poems, References, and Other Literature
    In the past I've provided links to various types electronic literature available free on the Web. 
    I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/ElectronicLiterature.htm

    Some of Bob Jensen's Tutorials

    Accounting program news items for colleges are posted at http://www.accountingweb.com/news/college_news.html
    Sometimes the news items provide links to teaching resources for accounting educators.
    Any college may post a news item.

    Many useful accounting sites (scroll down) --- http://www.iasplus.com/links/links.htm

     

    Accounting  and Taxation News Sites ---
    http://www.trinity.edu/rjensen/AccountingNews.htm

     

     

    For an elaboration on the reasons you should join a ListServ (usually for free) go to   http://www.trinity.edu/rjensen/ListServRoles.htm
    AECM (Educators) http://listserv.aaahq.org/cgi-bin/wa.exe?HOME
    AECM is an email Listserv list which provides a forum for discussions of all hardware and software which can be useful in any way for accounting education at the college/university level. Hardware includes all platforms and peripherals. Software includes spreadsheets, practice sets, multimedia authoring and presentation packages, data base programs, tax packages, World Wide Web applications, etc.

    Over the years the AECM has become the worldwide forum for accounting educators on all issues of accountancy and accounting education, including debates on accounting standards, managerial accounting, careers, fraud, forensic accounting, auditing, doctoral programs, and critical debates on academic (accountics) research, publication, replication, and validity testing.

     

    CPAS-L (Practitioners) http://pacioli.loyola.edu/cpas-l/  (Closed Down)
    CPAS-L provides a forum for discussions of all aspects of the practice of accounting. It provides an unmoderated environment where issues, questions, comments, ideas, etc. related to accounting can be freely discussed. Members are welcome to take an active role by posting to CPAS-L or an inactive role by just monitoring the list. You qualify for a free subscription if you are either a CPA or a professional accountant in public accounting, private industry, government or education. Others will be denied access.
    Yahoo (Practitioners)  http://groups.yahoo.com/group/xyztalk
    This forum is for CPAs to discuss the activities of the AICPA. This can be anything  from the CPA2BIZ portal to the XYZ initiative or anything else that relates to the AICPA.
    AccountantsWorld  http://accountantsworld.com/forums/default.asp?scope=1 
    This site hosts various discussion groups on such topics as accounting software, consulting, financial planning, fixed assets, payroll, human resources, profit on the Internet, and taxation.
    Business Valuation Group BusValGroup-subscribe@topica.com 
    This discussion group is headed by Randy Schostag [RSchostag@BUSVALGROUP.COM
    FEI's Financial Reporting Blog
    Smart Stops on the Web, Journal of Accountancy, March 2008 --- http://www.aicpa.org/pubs/jofa/mar2008/smart_stops.htm
    FINANCIAL REPORTING PORTAL
    www.financialexecutives.org/blog

    Find news highlights from the SEC, FASB and the International Accounting Standards Board on this financial reporting blog from Financial Executives International. The site, updated daily, compiles regulatory news, rulings and statements, comment letters on standards, and hot topics from the Web’s largest business and accounting publications and organizations. Look for continuing coverage of SOX requirements, fair value reporting and the Alternative Minimum Tax, plus emerging issues such as the subprime mortgage crisis, international convergence, and rules for tax return preparers.
    The CAlCPA Tax Listserv

    September 4, 2008 message from Scott Bonacker [lister@bonackers.com]
    Scott has been a long-time contributor to the AECM listserv (he's a techie as well as a practicing CPA)

    I found another listserve that is exceptional -

    CalCPA maintains http://groups.yahoo.com/taxtalk/  and they let almost anyone join it.
    Jim Counts, CPA is moderator.

    There are several highly capable people that make frequent answers to tax questions posted there, and the answers are often in depth.

    Scott

    Scott forwarded the following message from Jim Counts

    Yes you may mention info on your listserve about TaxTalk. As part of what you say please say [... any CPA or attorney or a member of the Calif Society of CPAs may join. It is possible to join without having a free Yahoo account but then they will not have access to the files and other items posted.

    Once signed in on their Yahoo account go to http://finance.groups.yahoo.com/group/TaxTalk/ and I believe in top right corner is Join Group. Click on it and answer the few questions and in the comment box say you are a CPA or attorney, whichever you are and I will get the request to join.

    Be aware that we run on the average 30 or move emails per day. I encourage people to set up a folder for just the emails from this listserve and then via a rule or filter send them to that folder instead of having them be in your inbox. Thus you can read them when you want and it will not fill up the inbox when you are looking for client emails etc.

    We currently have about 830 CPAs and attorneys nationwide but mainly in California.... ]

    Please encourage your members to join our listserve.

    If any questions let me know.

    Jim Counts CPA.CITP CTFA
    Hemet, CA
    Moderator TaxTalk

     

     

     

     

     

     

    Bob Jensen's Sort-of Blogs --- http://www.trinity.edu/rjensen/JensenBlogs.htm
    Current and past editions of my newsletter called New Bookmarks --- http://www.trinity.edu/rjensen/bookurl.htm
    Current and past editions of my newsletter called Tidbits --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm
    Current and past editions of my newsletter called Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm

    Some Accounting History Sites

    Bob Jensen's Accounting History in a Nutshell and Links --- http://www.trinity.edu/rjensen/theory01.htm#AccountingHistory
     

    Accounting History Libraries at the University of Mississippi (Ole Miss) --- http://www.olemiss.edu/depts/accountancy/libraries.html
    The above libraries include international accounting history.
    The above libraries include film and video historical collections.

    MAAW Knowledge Portal for Management and Accounting --- http://maaw.info/

    Academy of Accounting Historians and the Accounting Historians Journal ---
    http://www.accounting.rutgers.edu/raw/aah/

    Sage Accounting History --- http://ach.sagepub.com/cgi/pdf_extract/11/3/269

    A nice timeline on the development of U.S. standards and the evolution of thinking about the income statement versus the balance sheet is provided at:
    "The Evolution of U.S. GAAP: The Political Forces Behind Professional Standards (1930-1973)," by Stephen A. Zeff, CPA Journal, January 2005 --- http://www.nysscpa.org/cpajournal/2005/105/infocus/p18.htm
    Part II covering years 1974-2003 published in February 2005 --- http://www.nysscpa.org/cpajournal/2005/205/index.htm 

    A nice timeline of accounting history --- http://www.docstoc.com/docs/2187711/A-HISTORY-OF-ACCOUNTING

    From Texas A&M University
    Accounting History Outline --- http://acct.tamu.edu/giroux/history.html

    Bob Jensen's timeline of derivative financial instruments and hedge accounting ---
    http://www.trinity.edu/rjensen/FraudRotten.htm#DerivativesFrauds

    History of Fraud in America --- http://www.trinity.edu/rjensen/415wp/AmericanHistoryOfFraud.htm
    Also see http://www.trinity.edu/rjensen/Fraud.htm

    More of Bob Jensen's Pictures and Stories
    http://www.trinity.edu/rjensen/Pictures.htm

    All my online pictures --- http://www.cs.trinity.edu/~rjensen/PictureHistory/

     

    Professor Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
    190 Sunset Hill Road
    Sugar Hill, NH 03586
    Phone:  603-823-8482 
    Email:  rjensen@trinity.edu