RB – Page 222 – Richard Bennett

WSJ on options

WSJ.com – Thinking Things Over discusses options today: To put it another way: The essential purpose of earnings reports is to help the market price stocks accurately, so incorporating the share price into earnings is circular and confusing. Earnings per share is a calculation with a numerator and a denominator. Options will already show up … Continue reading “WSJ on options”

WSJ.com – Thinking Things Over discusses options today:

To put it another way: The essential purpose of earnings reports is to help the market price stocks accurately, so incorporating the share price into earnings is circular and confusing. Earnings per share is a calculation with a numerator and a denominator. Options will already show up in the denominator as they’re converted into shares; they’re already included in “fully diluted” EPS. By what logic should they be factored into the numerator as well?

They also do us the favor of supplying the famous Black-Scholes Model that’s supposed to restore investor confidence in the market, to whit:

Now you feel better, don’t you?

IRS audits conservatives

Robert Novak, the Prince of Darkness, has the smoking gun proving that the Clinton White House used the IRS to harass its enemies. Since the Clintons left the White House, former IRS agents leaked Bill Simon’s tax returns to the press: A filing in the court last Jan. 7 indicates the documents were released by … Continue reading “IRS audits conservatives”

A filing in the court last Jan. 7 indicates the documents were released by lawyers from the Justice Department’s Tax Division. The government’s chief litigator against Judicial Watch has been a remarkable Washington bureaucrat named Stuart Gibson.

While serving as a civil service tax lawyer, Gibson also is a liberal activist in suburban Fairfax County, Va., where he was elected to the school board with Democratic backing. He was the lead litigator in the public disclosure of tax shelters by individual taxpayers — including Bill Simon, the Republican nominee for governor of California.

The legacy of sleaze and corruption is still upon us, but Simon didn’t make things any better for himself by playing cat-and-mouse with the press about his tax returns. He can either release them or not, but the game he played with the press the other day where he allowed reporters to look at thousands of pages without tax experts’ advice and copy nothing created the perception that Simon has something to hide.

Smart and liberal

This is why I read Talking Points Memo: by Joshua Micah Marshall: Maybe federal employees shouldn’t get the double protection of unions and civil service status. It’s not an unreasonable argument. If that’s what the president believes, he should send up a separate bill abolishing the civil service system. Although my preference would be to … Continue reading “Smart and liberal”

This is why I read Talking Points Memo: by Joshua Micah Marshall:

Maybe federal employees shouldn’t get the double protection of unions and civil service status. It’s not an unreasonable argument. If that’s what the president believes, he should send up a separate bill abolishing the civil service system.

Although my preference would be to abolish collective bargaining for government workers at all levels, because their civil service protection is enough, or should be in a country run by elected officials.

Patiently deconstructing Scheer

Ben Fritz of Spinsanity does yeoman’s work in taking apart Bob Scheer’s recent attack on Vice-President Cheney line-by-line: Two of Scheer’s accusations of “a slimy trail of conflict-of-interest questions” are similarly unfair. First, he points out that while Cheney was Secretary of Defense under the first President Bush, he “conveniently changed the rules restricting private … Continue reading “Patiently deconstructing Scheer”

Ben Fritz of Spinsanity does yeoman’s work in taking apart Bob Scheer’s recent attack on Vice-President Cheney line-by-line:

Two of Scheer’s accusations of “a slimy trail of conflict-of-interest questions” are similarly unfair. First, he points out that while Cheney was Secretary of Defense under the first President Bush, he “conveniently changed the rules restricting private contractors doing work on U.S. military bases, allowing the Kellogg Brown & Root subsidiary of his future employer, Halliburton, to receive the first of $2.5 billion in contracts over the next decade.” Conflicts of interest are not retroactive, however. Cheney’s future employment by Haliburton does not constitute evidence linking the two at the time and, thus, creating a conflict of interest.

The term also doesn’t apply to Scheer’s second example. He points out that “When Cheney left to become CEO [of Halliburton], he recruited his Pentagon military aide, Joe Lopez, to become senior vice president in charge of Pentagon dealings, which ultimately formed the most lucrative part of the otherwise ailing company’s business.” Taking a job dealing with the government after leaving public sector work is not a conflict of interest (though some have raised other legitimate questions about the common practice). Conflicts of interest only arise when one has two interests that clash at once, which is not the case in the hiring of Lopez.

I’m really bowled-over by Ben’s patience: when I read this Scheer thing on-line at The Nation, I just rolled my eyes and groaned. Scheer’s so predictable, so loose with the facts, so inclined to the smear, you have to wonder why anybody publishes him anymore. Grow up already, Bob.

An LA Times reader offered a good suggestion about Scheer’s column:

In the future I suggest that The Times should put a disclaimer on all of Scheer’s commentaries as “being out of touch with reality.”

That sums it up quite nicely.

Weblog tool survey

— John Hiler has his survey of weblog tools up at The Microcontent News Blogging Software Roundup – Part One of the Weblog Industry Report I’ve hoped for a while now that someone would sort out this weblog fruit basket, so we could compare apples-to-apples and oranges-to-oranges. So far, it hasn’t happened… so over the … Continue reading “Weblog tool survey”

— John Hiler has his survey of weblog tools up at The Microcontent News Blogging Software Roundup – Part One of the Weblog Industry Report

I’ve hoped for a while now that someone would sort out this weblog fruit basket, so we could compare apples-to-apples and oranges-to-oranges. So far, it hasn’t happened… so over the last few weeks, I finally broke down and took a crack at it myself.

If you want the job done right, sometimes you’ve got to do it yourself. As interesting as the survey is, it strikes me that the reason blogs took off around 2000 or so wasn’t so much the tools as it was the free services offered by Blogger and others. It’s not really that much easier to update a website with Blogger or Movable Type than with Netscape Composer, but with Blogspot you don’t need to own your own web site. Anyhow, the tools are getting better and better, and within a few months we’ll have some serious power, whether poor old John has been excommunicated or not.

Boycott Coca-Cola

A friend sent me this e-mail which was circulated around his company recently. As this was an internal document, I’ve elided the company’s name, but pass it on because it’s an excellent idea. If Coca-Cola wants to dictate employment practices to other industries, those of us who disapprove of their position can dictate back. Here … Continue reading “Boycott Coca-Cola”

—–forwarded message—–

TO: DL-All-California

FROM: Facilities Information

DATE: July 25, 2002

SUBJECT: [Company’s] ban of Coca-Cola

Coca-Cola Company recently announced their decision to expense their employee stock options. While their action appears to be benevolent to the investing public, Coke does not use options as extensively as the technology industry, and the impact to their financial statements is very small. Coke is also deviating from the Black Scholes model preferred by the accounting profession, further reducing the earnings impact of their decision. Their action was clearly propelled by their chief investor, Warren Buffett, who has campaigned against stock options for years.

The issues in this debate are complex, but the one fact we employees should understand is that if options are expensed then the number of options granted to workers in technology will go down dramatically. Options have helped [Company] and other companies in the volatile technology arena attract the best and the brightest. Options have given our workers a share of the growth that their extra efforts have generated for shareholders. Warren Buffett may not want to share that growth with you, but [Company] firmly believes that growth would not exist without you. We will continue to defend the current accounting for options, which provides full disclosure of option grants, and leaves it up to investors to decide the true impact to shareholders of stock options granted to employees.

As a symbolic gesture of our disdain for Coca-Cola’s recent grab for headlines, Coke and products of the Coca-Cola Company will be removed from [Company’s] vending machines and cafeterias. We would also urge you to write to Coca-Cola and tell them that you and your family will not purchase their products while they use their marketing power to try to deprive you of your opportunity to benefit from the technology we create.
—–end forwaded message—–

All of this makes me wonder why, if Jimmy Warren Buffett is such a genius investor, shares in his holding company Berkshire Hathaway (BRKa) are trading at 63,650.00, below its pre-bubble, 1998 level, and why, if he’s such a champion of the little guy, he doesn’t split the stock to a price that the little guy could actually pay. Jimmy Warren is most likely one of those “do as I say” guys.

Managing earnings by accounting for options

— More Than Zero explores some of the implications of expensing stock options: Another amazing facet of the public debate on this topic is that no pundit I’ve seen has considered what happens after the options have been expensed and they expire (as they sometimes do). Let’s imagine we have expensed $25 million of options … Continue reading “Managing earnings by accounting for options”

— More Than Zero explores some of the implications of expensing stock options:

Another amazing facet of the public debate on this topic is that no pundit I’ve seen has considered what happens after the options have been expensed and they expire (as they sometimes do). Let’s imagine we have expensed $25 million of options and given them to our CEO. The option term has expired, the options were worthless. Now we get to take the expense back (the books don’t balance if you don’t!). Companies could have a lot of fun with that by issuing a series of complex, long-dated deep out-of-the money options with impossible employment contingencies in order to create a reserve during flush times. Talk about managed earnings!

So expensing options creates the opportunity for more shenanigans than it forestalls. Sticking to real expenses and real earnings is the best route, no matter what Jimmy Warren Buffett has to say about it.

Where’s the beef?

— The Mercury News jumps on the latest trend in eating, the return of grass-fed beef to the United States: In the United States, grass feeding was the norm until the end of World War II, when gunpowder plants were converted into nitrogen fertilizer plants. The fertilizer was then applied to cornfields in the Midwest, … Continue reading “Where’s the beef?”

— The Mercury News jumps on the latest trend in eating, the return of grass-fed beef to the United States:

In the United States, grass feeding was the norm until the end of World War II, when gunpowder plants were converted into nitrogen fertilizer plants. The fertilizer was then applied to cornfields in the Midwest, tripling production and sending commodities markets into a tailspin, says Ernest Phinney, general manager of Western Grasslands Beef, a cooperative of six Northern California family ranchers.

After grain prices crashed, fertilizer companies began to offer farmers subsidies to use their fertilizers to grow corn. Eventually, corn replaced grass as the feed of choice for steers in their last months before slaughter because it was cheaper and it bulked up the animals more quickly — adding as much as three pounds a day, compared to grass’ one pound.

In the past few years, there has been a resurgence in grass feeding among some California ranchers who are trying to preserve their way of life by producing a more artisanal product, one that they argue is also more sustainable because cattle are eating what is natural to them, unlike corn, which is more difficult to digest and often leads to ailments that require antibiotics. Even so, less than 1 percent of the 30 million cattle raised for meat annually in the United States is primarily grass-fed, says the National Cattlemen’s Beef Association.

The story’s also been covered in the Chronicle and in the Santa Rosa Press Democrat. The appeal is pretty easy to see: beef that’s lower in cholesterol than chicken or fish, and high in healthy stuff like omega 3 fatty acids and conjugated linoleic acid, or CLA, both of which are thought to help fight cancer. And the animals aren’t over-dosed with antibiotics in feed lots, or subjected to months of diarrhea from eating a grain diet that their digestive systems can’t really handle. So order some grass-fed beef, from Marin Sun Farms like we do, or another local producer, and invite some vegetarians over for a barbecue. When they turn down the offer of juicy steaks, tell them it’s healthier than tofu, because it is. And watch them squirm.

Seriously, we just got our second annual order of artisan beef, this one a quarter of a grass-fed Angus/Hereford cross from Marin, after last year’s quarter of a Longhorn from Minnasoooda. Longhorns are too lean naturally to feed exclusively on grass, so we went for the local beef this year to get the higher Omega-3 and such. The fat from a grass-fed steer is yellow from all the beta carotene in their diet, and the meat has a more intense beefy flavor. Cooking requires some adjustment, unless you’re used to dry-aged prime beef, but properly-done steaks, stews, and chili are tender enough to eat with no hardship. And the beefs are trained to come when they’re called. My gratitude to the beef god for the steer who gave up his young life that we and three others may eat great curry for another year.

Flirting with bankruptcy

hasn’t stopped Salon from selling subscriptions to services it probably won’t be around long enough to provide. The latest is a blog hosting service, provided in concert with the charming Dave Winer, a guy who’s been blogging almost as long as I have. The first Salon blog is Scott Rosenberg’s Links & Comment, by the … Continue reading “Flirting with bankruptcy”

Blogs have become an Internet trend story — probably because there are so few other Internet trends right now, and most of those are too depressing to dwell on. Trend stories work best when reporters can drum up some conflict. Thus we have the War between the Bloggers and the Journalists.

Rosenberg understands trends. He engineered Salon’s acquisition of The Well, an on-line cult founded and shaped by refugees of Stephen Gaskin’s The Farm cult in Tennessee. Rosenberg has been a member of The Well since 1990, according to Katie Hafner’s account of the bizarre shenanigans that have taken place among the Wellberts for lo these many years.

Like Gaskin, Winer is a powerful and polarizing figure, and Rosenberg loves to bask in the glow of such people. Unlike Gaskin, the Well’s spiritual founder, Winer doesn’t seem to have too many nefarious plans, bastard children, kidnapped children, or suicidal corpses lying around him, so the worst aspect of the Winer/Wellbert partnership is what happens to subscribers when Salon finally goes out of business, which many suspect will happen in a few weeks. Presumably they can continue blogging on Winer’s iron, but Salon hasn’t clarified this to their potential customers.

Incidentally, I tried The Well for a few weeks, but they banned me for being a cult-buster, and banned my wife, a long-term member, for being married to me. Strange group, the Wellberts. Some of them are blogging now, but they don’t get much traffic, fortunately.

Double incidentally, I recommend Katie Hafner’s book The Well to anyone interested in the dynamics and power-relationships characteristic of cults.

Alexa foolishness

— The latest Alexa rankings put this site ahead of all the other warblogs except Sullivan, Reynolds, and Kaus, which is absurd, and ahead of all the tech blogs except Winer and Kottke, equally unlikely. Update, 7/25/02: I’m now ahead of Kottke, so world domination is within my grasp.

Update, 7/25/02: I’m now ahead of Kottke, so world domination is within my grasp.