Saturday, April 14, 2007

April 14, 2007 Edition

Welcome to the April 14, 2007 edition of Corporate Vigilance.

Dr. Housing Bubble presents Irrational Housing: Insiders out Early and The Duesenberry effect. posted at Dr. Housing Bubble - How I learned to Love SoCal, saying, "Markets operate under the assumption that key players act rationally in most circumstances. Their premise is such that market stability is based on people acting to a set of according rules. Much has been debated about this because economics as a science is cold and aloof; it is a matter of simply stating the facts. Yet we have learned in the recent housing mania that market psychology and behavioral economics play a large role in how people interpret risk and what constitutes an investment. As most bubbles in the past, such as John Law’s Banque Générale and the South Sea Bubble, many bubbles burst and leap into another bubble. Why is this? The argument goes that in a bubble profit is a major driving force distorting stable growth for radical cancerous increases that are only supportable for a short time. After the glut of speculation is complete, those with a profit that cashed out on time feel the hunger for continued gains. This desire precipitates another bubble in whatever form it may be; technology stocks, real estate, commodities, or foreign investment. Either way, the pattern is such were a few successful insiders gut the system, leave burns on the psyche of a general public only to save up long enough to let the emotional scars to heal. Then they jump into the fire again with their resources ready to be distributed to those at the top again..."

Editor - Dave Prouhet presents Accounting Department Objectives posted at Business Advice Daily, saying, "A Business Advice Daily Top View Article!

It is easy for accounting departments to lose focus of their basic mission. The following is a top seven list for a well tuned accounting department."

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