Some girls like superheroes and some boys like princesses

From the mouth of a 3 year old. Brilliant.

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E&Y; auditors investigating massive 'errors' at Olympus

Whether it's Enron or Lehman or more recently the scandal at Olympus, somehow the auditors are always in the thick of financial scandals.

The audit firms like Ernst & Young are paid big money to audit the internal books of companies, large and small. In theory, they're supposed to be providing an outside look into the numbers and making sure that they're accurate. The workers tend to be very smart and meticulous people. The results of the audit are supposed to carry weight since they receive the official stamp of approval by one of the big firms. This means outside investors are counting on the books being accurate as well as outside business partners. When there's a mistake or they're inaccurate, the consequences can be severe as we discovered at Enron.

The inherent problem with the model is that the contracts for providing this outside audit are worth a lot. To cover a major corporate account such as Enron or Olympus, the annual cost can easily be worth millions of dollars. It doesn't take a rocket scientist to figure out that the loss of even one account can have a painful impact on the annual revenue of the auditor. Much like the conflict of interest between Wall Street and the ratings agencies, a similar conflict of interest exists in the auditing field. There's almost too much at risk for the auditors to find any significant problems because that will likely mean they will be replaced in the next cycle.

In the case of Andersen Consulting and Enron, Andersen was generating over $50 million per year with Enron before the collapse. That alone should have raised red flags but it didn't. Ernst & Young is now allegedly focused on auditing their audit at Olympus but one has to wonder what they were doing before. Again, these are clever people so it sounds hard to believe that they would somehow miss a nearly $2 billion accounting fraud. Mistakes happen, but when the mistakes are this large, one has to wonder. Should E&Y really be in business if they can't manage to locate an accounting scandal of this magnitude? How competent is any auditor who misses such an enormous amount of money? Bloomberg:

An Ernst & Young ShinNihon LLC committee said it’s still investigating whether the audit of Olympus Corp. (7733)’s accounting was appropriate after the Japanese camera maker admitted hiding investment losses. Olympus’s purchase of Gyrus Group Plc has complicated links to the company’s overall cover-up and will require more time to probe, the panel said today in a statement. ShinNihon, which signed off on Olympus’s 2010 results, formed the committee this month to verify an internal investigation that earlier found nothing wrong in its audit of the endoscope maker. Olympus, reeling from a $1.7 billion accounting fraud, restated more than five years of past earnings on Dec. 14, wiping out 70 percent of its net assets.

E&Y auditors have of course found no problems in an audit of E&Y but is that really a surprise? Read the rest of this post...

Congress gets richer while the rest get poorer

A government for the 1%, by the 1%. It's no mystery why Congress has allowed the 1% to get ahead while watching the middle class decline. It's a simple matter of self interest. Until the Occupy movement puts regular pressure on Congress, we're not likely to see any significant change. Even for the Democrats, the success or failure of the middle class is hardly an issue of interest beyond a few words of lip service. That may increase during the election cycle, but we know how big words during the election cycle mean little once it's over. NY Times:

What is clear is that members of Congress are getting richer compared not only with the average American worker, but also with other very rich Americans. While the median net worth of members of Congress jumped 15 percent from 2004 to 2010, the net worth of the richest 10 percent of Americans remained essentially flat. For all Americans, median net worth dropped 8 percent, based on inflation-adjusted data from Moody’s Analytics. Going back further, the median wealth of House members grew some two and a half times between 1984 and 2009 in inflation-adjusted dollars, while the wealth of the average American family has actually declined slightly in that same time period, according to data cited by The Washington Post in an article published Monday on its Web site.

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Who supports SOPA & PIPA, the "Kill-the-Internet" bills?

SOPA (Stop Online Piracy Act) and PIPA (Protect Intellectual Property Act) are bills before Congress and unattractive near-cousins. One is in the House (the more brutal of the pair) and the other is in the Senate. Both would end the Internet as we know it, in roughly the same way.

(For a backgrounder on why this is true, click here; there's a handy brief video for your perusal.)

The world of "greedy bastards" — Dylan Ratigan's elegant phrase for the Top 0.1% — loves these bills. The world of "increased state security" also loves them.

Geeks are generally opposed (though GoDaddy managed to step in it with their own support). Also on the opposition side are lots of Internet sites that feature user-content, everything from Reddit to Facebook to YouTube to DailyKos.

We'll let you make up your own mind — but don't wait too long; Big Money is racing to get these bills passed.

ACTION OPPORTUNITY — If you do decide to oppose these bills, here are a few things you can do.

1. You can contact companies and organizations that support these bills. The full list is here, along with contact info (h/t Gizmodo). There are some obvious entries (ASCAP, Comcast/NBC) you'll never sway — though don't let that stop you if you're so inclined. But there are also some interesting vulnerables. Here are a few that caught my eye:

Estée Lauder Companies: (212) 572-4200
Fraternal Order of Police (FOP)
Go Daddy: (480) 505-8800
International Brotherhood of Electrical Workers (IBEW): (202) 833-7000
International Brotherhood of Teamsters
International Union of Police Associations
L'Oreal: (212) 818-1500
Major League Baseball
Marvel Entertainment: (212) 576-4000
MasterCard Worldwide: (800) 622-7747
Minor League Baseball (MiLB)
National Center for Victims of Crime
National Crime Justice Association
National District Attorneys Association: (703) 549-9222
National Domestic Preparedness Coalition
National Football League
National Governors Association, Economic Development and Commerce Committee
National League of Cities
National Narcotics Offers' Associations' Coalition
National Sheriffs' Association (NSA)
Revlon
The United States Conference of Mayors: info@usmayors.org
Tiffany & Co.

A lot of these folks have IP "content" — the NFL, for example — but also fan vulnerability.

And what about the unions (IBEW, Fraternal Order of Police)? Also, why do organizations like the Sheriff's Association care about IP law? A little something extra in the retirement-fund Christmas basket? Or maybe groups like these just haven't heard from the rest of us.

Given who's on this list, I'm kind of waiting for the Catholic Bishops to weigh in.

2. My personal favorite way to complain — call these so-called "progressive" Senators. They're not just supporters; they're co-sponsors:

Sherrod Brown [OH] – (202) 224-2315
Al Franken [D-MN] – (202) 224-5641
Kirsten Gillibrand [D-NY] – (202) 224-4451
Amy Klobuchar [D-MN] – (202) 224-3244
Sheldon Whitehouse [D-RI] – (202) 224-2921

We'll be watching this closely, along with a great many others. This law really matters.

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Time Warner Cable raises prices well beyond rate of inflation

Other than a near monopoly, who else could jam through double digit price increases during the worst recession in decades?

When we first signed up for our fiber option connection here in Paris the cost was €40 per month, which again includes calls to 100 countries around the world, high speed internet (100MB) plus 140 TV basic channels. Even with the poor exchange rate, this translates to around $52 but in local purchasing power, it's really closer $40. The price today (five years later) is €33.90 which if my math is accurate, would be less, not more than before. If we had a TV and cared, we could add an 80GB DVR plus access to 150 movies for another €6 per month. The router and wifi is of course included and not an extra fee like the price gougers in the US.

A few years ago I met the director of a US cable company who was trying to build the local French market and he couldn't believe the prices that were offered in France. That company ultimately left as they weren't able to charge the French the same bloated fees that they can get away with in the US. What's odd is that in the US, more and more Americans are canceling their monthly subscriptions to cable TV, so the industry is now charging more for those who remain. Even worse, Congress let's them get away with it. The money they receive for campaigns is just too hard to turn down, apparently. LA Times on the price increases coming to Southern California:

Some rates will be significantly higher, such as a 27.4% increase to $17 from $13.34 just to receive local broadcast channels. Others will be modestly higher, such as a 9.5% increase to $69 from $63 for broadcast plus basic cable channels, or a 7.3% increase to $58.99 from $54.99 for the digital video package. Compare that with a 3.5% annual inflation rate as of October. "The cable industry maintains a near-monopoly over television services," said Doug Heller, executive director of Consumer Watchdog, a Santa Monica advocacy group. "Their prices are completely disconnected from the real lives of their customers."

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MoJo on why Newt is not going to be the GOP nominee

From Tim Murphy at Mother Jones:

Newt Gingrich is flying high. The former speaker of the House has rocketed to the top of the Republican polls, taking a 30-point lead in Florida and giving one-time GOP front-runner Mitt Romney a run for his money in New Hampshire. What's more, the competition around him seems to be collapsing. Herman Cain is history; Romney has slowly but steadily lost support nationwide; Rick Perry is still making fun of himself for a gaffe everyone else stopped talking about last month; Michele Bachmann fell in a crowded primary forest and never made a sound. Gingrich, for one, is ready to declare victory. As he told ABC's Jake Tapper on Thursday, "I'm going to be the nominee."

Well, Gingrich may be on a roll, but he's overlooking the one truly formidable candidate who stands between him and the nomination: former Speaker of the House Newt Gingrich. He is in many ways the perfect foil for the current GOP front-runner. Here, in 13 episodes, is much of the baggage you're likely to see aired soon in anti-Gingrich attack ads. For him, it won't be Christmas in Iowa.

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Team Romney is sure they’re going to win the GOP nomination

Mitt should talk to Hillary about that one.

But it was also born of a confidence in Team Romney so deep it borders on serene: that the nomination is, if not in entirely the bag, then about to stuffed there soon. “The dynamics couldn’t be better for us,” says a senior Romney strategist. “I don’t see any scenario where we’re not the nominee.”

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Arab League observers to visit Syria

If they come back with anything less than strong criticism of Assad, they might as well close shop. The days of giving excuses for other dictatorships are over. The violence has to stop in Syria but the only way that will happen is if Assad steps down. Al Jazeera:

The 50 observers will be split into five teams of 10, one of which is due to visit Homs on Tuesday, according to Reuters news agency. The teams will use government transport, according to their head, Sudanese General Mustafa al-Dabi. But delegates insist the mission will nevertheless be able to go wherever it chooses with no notice. "Our Syrian brothers are co-operating very well and without any restrictions so far," al-Dabi told the Reuters news agency. Other delegates said they expected to be able to "move freely between hospital, prisons and detention centres all over Syria".

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Communist party in China now accepting limited criticism

Well at least some criticism out in the country. For China, this is a big deal and an important change. It doesn't mean non party members will be choosing the central party leaders or be directing policy, but they will be able to have more influence. If China wants to continue its growth and maintain its grip when the bubble bursts, this is a necessary evolution. The Guardian:

The senior Chinese official who helped defuse a standoff with protesting villagers has told officials to get used to citizens who are increasingly assertive about their rights and likened erring local governments to red apples with rotten cores. Zhu Mingguo, a deputy Communist party secretary of southern Guangdong province, last week helped broker a compromise between the government and residents of Wukan village. Ten days of protests over confiscated farmland and the death of a protest organiser drew widespread attention as a rebuff to the government. Guangzhou Daily, the official paper of the provincial capital, quoted Zhu as telling officials that Wukan and other protests were not isolated flare-ups. "In terms of society, the public's awareness of democracy, equality and rights is constantly strengthening, and their corresponding demands are growing," Zhu told a meeting on Monday about preserving social stability, the paper said.

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