The Money Supply Explodes: A Frightening Chart

I don’t arrive home from teaching my Monday night class till after midnight. After refreshment, I discovered a frightening chart showing the rapid expansion of the money supply. Is this the future chart of gold prices? Food? Gasoline? Australian pinot grigio?! I am afraid it will be. The usual lag between injection of money and [...]

Why AIG bonuses have to be paid

The AIG bonuses are a distraction from the real issue: no oversight in the shadow banking system, and Sen. Dodd in a conflict of interest.

Bernie Madoff for Social Security Commissioner

I was teaching Auditing in Fall 2008 when the Madoff story broke. When the students asked what I thought, my first reaction to them was to say, “Social Security is the biggest Ponzi scheme.” The Federal government has made promises it can’t keep. Go to the Financial Statements of the U.S. Government. See p. 41 [...]

Why should any business participate in the bailout?

Last Thursday (March 19, 2009), a pitchfork-waving mob in the House of Representatives passed a bill to have a 90% federal tax on bonuses to AIG and other recipients of bail-out money, if the recipients have over $250,000 in family income. Assume two senior accountants are married, earn over $250,000, and face 90% federal tax, [...]

The New York Times predicted the financial crisis in 1999

The New York Times published an article in 1999 that forecast the subprime mortgage crisis.

Two politicians do well by doing good

In all of the confusion of the financial crisis, two politicians, Rep. Barney Frank (D-MA) and Rep. Maxine Waters, are able to stay clear-eyed enough to enrich themselves. The Wall Street Journal has two stories: 1. Political Interference Seen in Bank Bailout Decisions: Barney Frank Goes to Bat for Lender, and It Gets an Infusion [...]

Fraud of the day

I taught two sections of Auditing in Fall 2008. I would accumulate fraud stories from newspapers, and bring them to class. I asked students to do the same. The rules were that it had to be a fraud involving manipulation of accounting records, not a fraud such as false advertising. I encouraged students to bring [...]