Wednesday, April 27, 2016

Words, words, words

FASB (the Financial Accounting Standards Board) wants to make it easier for corporations to withhold important financial information from shareholders. And they're doing it very simply by changing the word "could" to "would". Currently, corporations are required to make financial disclosures of information that “could” influence investors. FASB wants to change this so that corporate disclosure would be required only when there is a “substantial likelihood” that information “would” significantly alter investor decisions.

A related 2015 survey by researchers from Columbia, Duke, Emory and the National Bureau of Economic Research reveals that the nearly 400 financial executives surveyed believe 20 percent of firms intentionally distort their earnings figures by an average of 10 percent.

Can we pull it off?

Every empire has eventually failed. We are on the path to failure. Is this a step to forging a new path?

The Judge Rotenberg Center in the news again

I have been writing about the Center since 2006. It is "a special needs day and residential school located in Canton, Massachusetts licensed to serve ages five through adult". It features “aversive” therapy, using pain or other negative stimuli to change behavior; the pain is generated by electric shock. The Center has been charged by a number of government agencies, including the UN, of torturing children. The latest charge is from the FDA, which has accused the Center of under-reporting adverse effects from the device used, using flawed studies to defend its approach, and misleading families about alternative treatments. “FDA has determined that these devices present an unreasonable and substantial risk of illness or injury that cannot be corrected or eliminated by labeling".

The Rotenberg Center is the only place in the country to still employ such a device, which delivers a painful shock to residents’ skin when they engage in undesirable or dangerous behaviors. Currently, 56 of the center’s 251 residents can receive the shocks. Further, children have been tied down with leg and waist straps to punish them.

The FDA asserts that the devices can cause both physical and psychological harm, including risks of pain, burns, tissue damage, depression, fear and aggression. They may even have led a resident to enter a catatonic state, the agency said. The shocks can worsen the symptoms it purportedly treats. The FDA said peer-reviewed studies and experts make it clear that aversives have been largely replaced by more effective — and humane — approaches to managing behavior.

Tuesday, April 26, 2016

A Guantanamo Graduate

Times are tough in Venezuela

Shortage is one word for Venezuela today. There is a shortage of medicines and goods such as toilet paper and cooking oil. There is a shortage of power. The government is shifting its time zone forward by 30 minutes to save power by adding half an hour of daylight. There is a four-hour blackout in eight of the country's twenty-three states starting Monday and lasting at least 40 days. State workers are working fewer hours and have been ordered to lower their electricity consumption, along with shops and hotels.

A woman shopping


For years I've thought and said that chance plays a big part in people's lives. I haven't heard many people agree with me. So, I was shocked when reading The Atlantic yesterday to see that Robert Frank, a well-known economist, agreed with me. In fact, he has written a book on the subject. Chance affects us all as where, when and to whom you are born is probably the major determinant of your life. I feel that chance played a major role in perhaps the two most important aspects of my life - who I married and how I spent my working career.

Sunday, April 24, 2016

Penguin adopts man

From a Duncaster correspondent

Painting Net Income

In the old days (the 20th century) the use of Generally Accepted Accounting Principles (GAAP) by public corporations was commonplace. GAAP was a way to assess a company's performance, as it set a standard to which the vast majority of companies complied. While regulations have not changed and corporations are still required to report their financial results under accounting rules, corporations have devised ways to feature non-GAAP results. 

Almost all corporations are using non-GAAP results. According to a recent study in The Analyst’s Accounting Observer, 90 percent of companies in the Standard & Poor’s 500-stock index reported non-GAAP results last year, up from 72 percent in 2009. Why do they do this? Non-GAAP net income was up 6.6 percent in 2015 compared with the previous year. Under generally accepted accounting principles, net income in 2015 actually declined almost 11 percent from 2014. Some expenses omitted in non-GAAP presentations: restructuring and acquisition costs, stock-based compensation, write-downs of impaired assets, data breach, dividends on preferred stock, severance costs.

Friday, April 22, 2016

We're killing ourselves more often

42,773 people killed themselves in 2014; in 1999 the number of suicides was 29,199. So says a study by the National Center for Health Statistics. The 2014 number works out to a suicide rate to 13 per 100,000 people, the highest since 1986. It did not matter what group you looked at young, old, male, female with one exception - we old folk, the suicide rate for men and women over 75 declined.

Wednesday, April 20, 2016

Representing the people

This presidential campaign has the lowest caliber candidates I have ever seen. I'm not yet convinced that I should vote in November. (I can't vote in Connecticut's primary next week as I am registered as an independent.) Mark Penn, a Democratic pollster, has some interesting observations as to how we have reached this state.

The basic point he makes is that not enough of us vote. There are about 226 million of us who are eligible to vote. But the candidate who is nominated will have amassed only about 10 million votes in the campaign; this represents 4+percent of those eligible. For the election itself only 153 million will have been registered; about 130 million, a little more than half of those eligible to vote, will probably vote. So, it is the activist groups and the political extremes that will elect the president, and not the broad population of the country.

Penn has some ideas for improving the system:

  • When kids are born in the hospital, give them a voter card and not just a Social Security card. Leave no child behind when it comes to being registered to vote and having voting ID. 
  • Election Tuesdays come from the horse and buggy days — we need to move voting to weekends, allow voting from the internet or from secure accessible facilities like ATM machines. I am not a fan of early voting because it tends to mute the effect of the last two weeks of a campaign, which can be pivotal in many elections. I would rather have extended voting all day Saturday and Sunday. 
  • Third, caucuses need to be abolished. Often without even the secret ballot and open only to those with time on their hands, this is not a fair process for picking a president in the 21st century. Usually turnout to a caucus is only one-fourth of the turnout to a primary. 
  • Fourth, we need to rethink the party primary process to bring in far more voters, and we need to rotate the geographic order so that no one bloc of voters becomes a permanent gateway to the presidency. If we are going to have just two parties, then almost everyone has to be welcome to vote in one of them.
Something has to be done.

Let's fly to work

From our Pawling, NY correspondent

Tuesday, April 19, 2016

It's a deal

All you can say is "wow"

From our Plymouth correspondent

Return of the Dark Ages

That's what William Gail, a distinguished climate scientist, thinks. His argument is based on changing weather patterns, which we have relied on to continue. But things are changing in unexpected ways. Cycles that have been largely unwavering during modern human history are disrupted by substantial changes in temperature and precipitation. And most of our knowledge of the Earth has come largely from historically observed patterns.

"As Earth’s warming stabilizes, new patterns begin to appear. At first, they are confusing and hard to identify. Scientists note similarities to Earth’s emergence from the last ice age. These new patterns need many years — sometimes decades or more — to reveal themselves fully, even when monitored with our sophisticated observing systems. Until then, farmers will struggle to reliably predict new seasonal patterns and regularly plant the wrong crops. Early signs of major drought will go unrecognized, so costly irrigation will be built in the wrong places. Disruptive societal impacts will be widespread."