Tidbits on October 26, 2005
Bob Jensen at Trinity University 

Weather Report from Mt. Washington http://www.mountwashington.org/weather/index.php

06:05 PM Tue Oct 25, 2005 EDT   Drifts in the doorway...again! Just a quick storm update on this very busy day... Thus far we've recorded 7.8 Inches of snow with the storm, and while impressive, areas at lower elevations have much more impressive totals. We just spoke with the caretaker at Hermit Lake in Tucks; he has about 14" of freshies on the ground, and it's still coming down hard! Even more impressive are the hordes reportedly making the pilgrimages to the top of Wildcat to ski the powder dump over there! Winds have been right on line with those expected, but still impressive. Sustained winds remain E/NE at 70, and we've had some gusts to 100 mph. Gusts could increase overnight!

Erika is stranded in Sugar Hill --- http://www.trinity.edu/rjensen/NHcottage/NHcottage.htm
But she loves it and stays warm by the fireplaces.

My links on Medicare drug plan options are at http://www.trinity.edu/rjensen/FraudReporting.htm#Medicare
Under no circumstance should anybody sign up for a plan with a stranger over the telephone even if that person claims to be a Medicare representative or a licensed insurance agent who phoned out of the blue.

Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm
For earlier editions of New Bookmarks go to http://www.trinity.edu/rjensen/bookurl.htm 
Archives of Tidbits: Tidbits Directory --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm

Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

Lists of Bests --- http://listsofbests.com/

Bob Jensen's home page is at http://www.trinity.edu/rjensen/

Security threats and hoaxes --- http://www.trinity.edu/its/virus/

25 Hottest Urban Legends (hoaxes) --- http://www.snopes.com/info/top25uls.asp 

Heart Attack Coughing (it's a hoax remedy) ---  http://www.hoax-slayer.com/survive-heart-attack.html 

Music:

In the past I've provided links to various types of music available free on the Web. 
I created a page that summarizes those various links --- http://www.trinity.edu/rjensen/music.htm

Monty Python's Sound Page (includes The Accountancy Shanty) --- http://www.mwscomp.com/sound.html

Wow:  Some GREAT fiddle, banjo, and other folk music (all free)
The Florida Folklife Collection (over 5,000 audio and video clips) --- http://www.floridamemory.com/Collections/folklife/
Scroll down to the music clips.

Great country music from NPR: Three from 'Modern Sounds' 'Dry River' 'Rank Stranger' 'Burning House of Love' --- http://www.npr.org/templates/story/story.php?storyId=4951558 
Scroll down and look left.

The music features a robust horn section with xylophone accents and throaty vocals by Queen Esther, while the lyrics often evoke modern urban life. Hopkins wrote all of the songs, with Norah Jones and Madeleine Peyroux appearing as co-writers.
"'Under a Brooklyn Moon': New Jazz Ballads," NPR, October 24, 2005 ---
http://www.npr.org/templates/story/story.php?storyId=4968671
Scroll down and look left.

Photographs

Chaos umpire sits,
And by decision more imbroiles the fray
By which he reigns: next him high arbiter
Chance governs all.
John Milton, Paradise Lost

Great electronic "books" from the University of Texas and Princeton University
Dante Inferno, Purgatory, and Paradise (a multimedia learning experience) --- http://danteworlds.laits.utexas.edu/
Also see Princeton University's contribution (in Italian or English) --- http://etcweb.princeton.edu/dante/pdp/
          Princeton's versions have both lectures and multimedia!

No more light bulbs:  Discovery of the week
The main light source of the future will almost surely not be a bulb. It might be a table, a wall, or even a fork. An accidental discovery announced this week has taken LED lighting to a new level, suggesting it could soon offer a cheaper, longer-lasting alternative to the traditional light bulb. The miniature breakthrough adds to a growing trend that is likely to eventually make Thomas Edison's bright invention obsolete. LEDs are already used in traffic lights, flashlights, and architectural lighting. They are flexible and operate less expensively than traditional lighting.
Bjorn Carey, "Accidental Invention Points to End of Light Bulbs," Live Science, October 23, 2005 --- http://www.livescience.com/technology/051021_nano_light.html

World's First 10.1" Flexible Electronic Paper Display
LG.Philips LCD and E Ink have built a 10.1" flexible electronic paper display. Less than 300 microns thick, the paper-white display is as thin and flexible as construction paper. With a 10.1" diagonal, the prototype achieves SVGA (600x800) resolution at 100 pixels per inch and has a 10:1 contrast ratio with 4 levels of grayscale. The display will be shown at the FPD International trade show in Japan, attended by over 60,000 visitors each year.
"World's First 10.1" Flexible Electronic Paper Display," Physorg, October 21, 2005 --- http://physorg.com/news7463.html

The Complete Calvin and Hobbes --- http://www.npr.org/templates/story/story.php?storyId=4968065

Is technology destroying concentration abilities of our youth?

What's the impact of all this dependence on technology? I fear it's teaching kids they can't enjoy simple things like a baseball game unless they have their PDA or cell phone in use the whole time. I think we run the risk of making it impossible for kids to ever learn how to focus on one thing--like a baseball game--because they can never leave their gadgets at home. It's certainly a smart move for Major League Baseball to integrate its on-the-field product with mobile communications, text messaging, and other technologies that have become such a central part of our lives. I just wonder whether this is another indicator that technology is taking over. Do you think technology is becoming too ingrained in kids?
Tom Smith, "Information Overload," InformationWeek Newsletter, October 26, 2005

Rednecks can ring the bell
"How bad is your breath?" Nature, October 21, 2005 --- http://www.nature.com/news/2005/051017/full/051017-19.html
A bioelectronic sensor can now tell you to three decimal places.

India opens relief camp, but waits for Pakistani visitors
India opened its first relief camp Tuesday for quake victims on the Line of Control (LoC) in the Poonch district of Jammu and Kashmir, but there were no visitors as Pakistan is yet to decide to let them cross over. The borders were opened up after Pakistan President Pervez Musharraf said that people from across the LoC could come over to help the victims of the devastating Oct 8 earthquake that killed over 50,000 people and left an estimated three million homeless in the bitter cold. At the relief camp here, food and medicines for victims from Pakistan-administered Kashmir were kept in readiness.
Chakan Da Bagh, "India opens relief camp, but waits for Pakistani visitors," Web India, October 25, 2005 --- http://news.webindia123.com/news/showdetails.asp?id=146180&cat=India

What do you suppose Bob Jensen is costing accounting departments across the world?

What Blogs Cost American Business
What Blogs Cost American Business In 2005, Employees Will Waste 551,000 Work Years Reading Them --- Blog this: U.S. workers in 2005 will waste the equivalent of 551,000 years reading blogs. About 35 million workers -- one in four people in the labor force -- visit blogs and on average spend 3.5 hours, or 9%, of the work week engaged with them, according to Advertising Age's analysis. Time spent in the office on non-work blogs this year will take up the equivalent of 2.3 million jobs. Forget lunch breaks -- bloggers essentially take a daily...
Bradley Johnson, "What Blogs Cost American Business, Ad Age, October 25, 2005 ---
http://adage.com/news.cms?newsId=46494#

Bob Jensen's threads on blogs and Weblogs are at http://www.trinity.edu/~rjensen/245glosf.htm#Weblog

And God told the Devil, who was trying to grow new life in dirt, "Get your own dirt!"
Researchers in Robert Langer's lab have coaxed skeletal-muscle tissue growing in a lab dish to develop its own network of blood vessels. When the researchers inserted the small piece of tissue into the abdominal muscle of a mouse, they found that 41 percent of the engineered tissue's blood vessels connected with the mouse's vascular system. After two weeks, twice as much of the engineered vascularized tissue survived as did control tissue without blood vessels.
MIT Labs, "Engineering Tissue with Blood Vessels," MIT's Technology Review, October 2005  --- http://www.technologyreview.com/articles/05/10/issue/ftl_mit.asp?trk=nl

Why It Matters:
One of the biggest problems in tissue engineering is keeping cells alive after they've been implanted in the body. Researchers have had success implanting very thin layers of engineered tissue like skin, because they can use blood vessels from underlying tissue to deliver oxygen and nutrients and get rid of waste. Thicker engineered tissues like muscle, however, tend not to live long because they lack their own sets of vessels that deliver nourishment. Langer and his colleagues have taken an important step toward solving this problem: for the first time, they have gotten blood vessels to grow in a patch of engineered tissue before implanting it in the body. While the researchers focused on muscle tissue, a similar approach could work for other tissues that have a lot of blood vessels, such as liver or heart tissue.
 

It's hard to love lawyers
“Lawyers who make a living out of suing universities can have a field day with this,” said Sheldon E. Steinbach, vice president and general counsel of the American Council on Education, the chief umbrella group for higher education. “This basically provides a private right of action to individuals who want to sue under the Higher Education Act, and it dismantles verbally the mechanism that the Department of Education uses to dispense advice, in a way that could be devastating.”Particularly disheartening to college lawyers like Steinbach is that the short but pointed decision was written by Judge Frank H. Easterbrook of the U.S. Court of Appeals of the Seventh Circuit, a highly respected legal thinker who is also a     law professor of the University of Chicago, and therefore harder to dismiss in significance.
Doug Lederman, "Inviting a Flurry of False Claims Cases," Inside Higher Ed, October 24, 2005 --- http://www.insidehighered.com/news/2005/10/24/false

Repeated from the October 21, 2005 edition of Tidbits

It’s not just that respect for the awesome majesty of the law is now largely pro forma. Rather, in important regards the whole edifice has been gutted; before long, there won’t even be any nails holding the facade together.
See below

"Law and Ordure." by Scott McLemee, Inside Higher Ed, October 20, 2005 --- http://www.insidehighered.com/views/2005/10/20/mclemee

In The Law in Shambles — just published in the Prickly Paradigm series, distributed by the University of Chicago Press — Thomas Geoghegan offers an incisive criticism, from the left, of the idea that the expression “rule of law” is at all appropriate to the way we live now. His booklet is conversational, wide-ranging, and absolutely terrifying. It deserves a wide readership.

In saying that Geoghegan’s perspective comes “from the left,” I’ve made room for misunderstandings that should be cleared up right away. First of all, he’s not denouncing the whole concept of rule of law as a more or less streamlined way of carrying out the “golden rule” of capitalism, that he with the gold makes the rules. (That’s the paleo-Marxist position. Some of the International Socialist Organization activists on your campus might make this argument.) Nor is Geoghegan criticizing actually existing constitutional democracy (as we might call it) from the vantage point of some “original position” of fairness, A Theory of Justice-style.

The author is a labor lawyer (though he has also been a fellow at the American Academy in Berlin). He’s arguing from his own court cases, and from perceived trends — not from first principles. He once loved the work of John Rawls, and the dream is not quite dead; but really, that was a long time ago. “Ever since he wrote that book,” Geoghegan says, “it’s as if someone with a voodoo doll put a hex on his whole approach.”

No, Geoghegan’s criticism is less abstract, more crunchy. It’s not just that respect for the awesome majesty of the law is now largely pro forma. Rather, in important regards the whole edifice has been gutted; before long, there won’t even be any nails holding the facade together.

The increasingly robust and strident contempt for the judiciary expressed by the American right is only part of it, if the most bewildering for anybody who remembers the old conservative motto of “law and order.” Now the emphasis is just on order, plain and simple. And not in the sense conveyed by Jack Webb’s no-nonsense demeanor on Dragnet. More like Joseph de Maistre’s rhapsody over the hangman’s role as cornerstone of civilization.

Which is worrisome, no doubt about it. But Geoghegan is more concerned about the low-key, day-to-day degradations of the rule of law. Consider, for example, the case of the rat turds. Geoghegan worked on a brief on behalf of workers who had lost their jobs when a chicken-processing plant shut down — suing on their behalf under the Worker Adjustment and Retraining Notification (WARN) Act, which requires that a factory owner give employees 60 days notice that a plant will be shut down. To this, the chicken-processing guy had a ready answer: He had been shut down by the Department of Agriculture for health-code violations — an unforeseen contingency, he said.

He had an argument, says Geoghegan: “Yes, he may have done bad things, and let rats run wild, and let rats shit on the chicken meat. And yes, it is even true that the inspectors of the Department of Agriculture gave him ‘write-ups.’ But here is the issue: Was it reasonable for the owner to foresee that the DOA would enforce its own regulation?” After all, everybody in the business knows that you get the write-up and pay the fine.

Continued in article

October 24, 2005 reply from Paul Williams [williamsp@COMFS1.COM.NCSU.EDU]

Bob,
The University of Chicago strikes again! The law and economics movement produced the logic that law is obeyed when the cost of disobedience exceeds the benefit. "Rational" persons will frequently find it cheaper to pay the fines than to comply, thus the law is merely a business tool, an instrument to be employed to one's advantage. Lost in such logic is that the rule of law can't be sustained unless we all believe in it and act as if we do. There is reason for all to obey laws, even silly ones, for no other reason than the ritual value of expressing respect for the rule of law. One may certainly disobey unjust laws out of conscience, but must be prepared to suffer the consequences.

October 24, 2005 reply from Scott Bonacker [lister@BONACKERS.COM]

This sounds good, but I don't think most people are equipped for the consideration necessary to have integrity in such an act. At least not in a Martin Luther King sort of way. It would be better to encourage people to participate in the political debate to change the unjust laws, and to concede that not everything can be made just in each persons individual perspective.

Some place I think BF Skinner proposed that once you get over 1,000 people in a place, the opportunity for consensus is gone. Something to do with allonomian and autonomian culture I think.

Scott Bonacker
Springfield, Missouri

Tulane Eliminates 243 Full-Time Jobs
Tulane University announced on Friday that it was eliminating the jobs of 243 full-time employees — a mix of professional and support positions, none of which were faculty jobs. Many New Orleans employers have eliminated positions in the wake of Hurricane Katrina, and many colleges stopped paying for some part-time and temporary positions. But most have said until now that they were keeping full-time employees on payroll. A spokeswoman for Loyola University, for example, said that the university had pledged to keep all full-time employees on payroll until January and that no layoff decisions would be made until the university found out what enrollment it would have next semester.
Scott Jaschik, "Tulane Eliminates 243 Full-Time Jobs," Inside Higher Ed, October 24, 2005 --- http://www.insidehighered.com/news/2005/10/24/tulane

How to Slow Runaway Executive Pay
Finally, Mr. Woolard knocks down the notion that chief executives deserve their riches because of the shareholder wealth they have created. "During the 1990's with the stock market bubble and the major temporary wealth created for shareholders, this philosophy that 'I am doing so great for my shareholders, I certainly deserve a fairly significant portion of the benefit,' permeated across companies and boards," Mr. Woolard said. "Now, my concern is that the stock market bubble burst and many shares declined significantly but the base of C.E.O. compensation that was built during that artificial period is a base that is still used today. Because the surveys of the outside consultants are primarily built on compensation for the last five years, there's no way for those surveys to decline." In other words, a lot of these emperors have no clothes.
Gretchen Morgenson, "How to Slow Runaway Executive Pay," The New York Times, October 23, 2005

Bob Jensen's threads on white collar crime are at http://www.trinity.edu/rjensen/FraudConclusion.htm#CrimePays

It's also hard to slow executive's golden parachutes
American University may pay Benjamin Ladner, who was recently fired as president, a settlement of up to $4 million, according to an article in The Washington Post. Many students are outraged by the plan, which Ladner has still not agreed to, and another member quit American’s board to avoid having to sign off on such a deal.
Inside Higher Ed, October 24, 2005 --- http://www.insidehighered.com/news/2005/10/24/qt

For a follow up, see http://www.insidehighered.com/news/2005/10/25/american

Bob Jensen's fraud updates are at http://www.trinity.edu/rjensen/FraudUpdates.htm

What's the meaning of “commodification” in education today?
When asked to list the top 10 problems facing the academy today, I bet most professors would include the “commodification” of education. By that they mean a sort of creeping penetration of market-forces into the academy such that earning a B.A. is becoming increasingly indistinguishable from, say, buying a Camaro. As an adjunct I am not privy to the way this trend has altered the wider institutional structure of higher education, beyond noticing that that very little of the tuition my students pay finds its way back to me. However, as someone who regularly teaches service courses I have extensive experience with bread and butter teaching, and I am familiar with what “commodification” is supposed to mean in this context: the idea that professors are expected to produce “customer satisfaction” in their students, and students are supposed to actually “enjoy” the classes they take.
Alex Golub, "The Professor as Personal Trainer," Inside Higher Ed, October 24, 2005 --- http://www.insidehighered.com/views/2005/10/24/golub

I added the following tidbit to my new Web page:
Privatization, Commercialization, Media Rankings, and Other Problems of Higher Education,
Including Selling Out Education Quality to Athletic Spectaculars ---
http://www.trinity.edu/rjensen/HigherEdControversies.htm

Wikipedia has democratic and unrestrained scholarship in real time
The founder of the online encyclopedia written and edited by its users has admitted some of its entries are 'a horrific embarrassment'. What did our panel of experts think of the entries for their fields? Factually, the entry on the composer Steve Reich is sound. All the facts that I have cross-checked were correct, but some of the writing is unhelpful. Take the first line of the entry: "Reich is popularly regarded as repetitive and minimalist, but in some works deviates from a purely minimalist style, which shows some connection to Minimalism and the work of Reich's visual artist friends such as Sol Lewitt and Richard Serra."
Mike Barnes on the Steve Reich entry, "Can you trust Wikipedia?" The Guardian, October 24, 2005 --- http://www.guardian.co.uk/g2/story/0,3604,1599116,00.html
Jensen Comment:  My experience is that most Widipedia entries are excellent.  However, one would not expect these to always be perfect when democracy can run amuck with entries/edits written by idiots or worse (evil-minded scoundrels that want to make trouble).  Still I advise going to Wikipedia first when you want to quickly look something up in a multilingual encyclopedia --- http://www.wikipedia.org/

Fraud Prevention and Detection

I've been invited to go to the Dominican Republic in a couple weeks to make a presentation on fraud prevention.  As you probably know, I have a huge collection of documents on fraud --- http://www.trinity.edu/rjensen/fraud.htm
But I get lost in this maze of my documents like everybody else gets lost.

When commencing to prepare my presentation, I found the following documents useful for starters:

Association of Certified Fraud Examiners --- http://www.acfe.com/home.asp

• In particular note the Code of Business Ethics and Conduct ---  http://www.acfe.com/documents/code_of_business_ethics.pdf
• Fraud Resources Center --- http://www.acfe.com/fraud/fraud.asp
  Fraud Prevention Check-Up --- http://www.acfe.com/fraud/check.asp
  Fraud Prevention CD-ROM --- http://www.acfe.com/fraud/cd.asp
  How to Prevent Small Business Fraud --- http://www.acfe.com/documents/smallbusinessfraudexcerpt.pdf
  Other Downloads --- http://www.acfe.com/fraud/downloads.asp
• Also note the explosion of salaries of Certified Fraud Examiners ---
  http://www.acfe.com/documents/2005comp-guide.pdf
  CFE Career Center http://www.acfe.com/career/career.asp

PricewaterhouseCoopers - Global Economic Crime Survey 2003 --- http://www.acfe.com/documents/2003_PwC_CrimeReport.pdf

FraudNet the Government Accountability Office (GAO) --- http://www.gao.gov/fraudnet/fraudnet.htm 

The Institute of Internal Auditors --- http://www.theiia.org/

AICPA's Business Valuation and Forensic & Litigation Services Center (not free to the public) --- http://bvfls.aicpa.org/

Fraud Position Statement of the Institute of Internal Auditors of the UK and Ireland --- http://www.blindtiger.co.uk/IIA/uploads/48dc2e62-f2a7bd939a--7c26/2003FraudPositionStatement.pdf
I snipped this link to http://snipurl.com/IIAFraudStatementUK

The Fraud Detectives Consultant Network --- http://www.frauddetectives.com/ 
This is a helpful site, although I might add that accountants, attorneys, and others can list themselves free at this site with no filtering with regard to skills and experience.

It would be great for me to learn about some other great references in this area.  My email address is rjensen@trinity.edu

When are more females born than males"
The team found that 48.3% of babies were female in the least polluted areas, but 49.3% were female in the dirtiest parts of town. After measuring the ratio of boys to girls born in all the areas, they calculated that 1,180 more babies would have been boys in the polluted areas if they had the same sex ratios as the cleaner areas. The team reported their findings on 17 October at the American Society for Reproductive Medicine meeting in Montreal. It has been known for the past 60 years that, for humans, the ratio of males to females in newborns usually tips towards sons. Scientists are not really sure why this occurs, but certain conditions, such as those after the Second World War, have been found to alter this balance.
"Pollution makes for more girls The stress of dirty air skews sex ratios in Sao Paulo." Nature, October 21, 2005 --- http://www.nature.com/news/2005/051017/full/051017-16.html

Who wrote the Shakespeare works?  A new theory emerges
Some scholars just won't let Shakespeare be Shakespeare. A small academic industry has developed to prove that William Shakespeare, a provincial lad from Stratford-upon-Avon, could not have written the much-loved plays that bear his name. The ''real'' author has been identified by various writers as Christopher Marlowe, Francis Bacon and the Earl of Oxford, Edward de Vere. Now, a new book claims that the real Bard was Sir Henry Neville, an English courtier and distant relative of the Stratford Shakespeare. Shakespeare himself was simply a front man, claim Brenda James and William Rubinstein in The Truth Will Out: Unmasking the Real Shakespeare.
Jenn Wyantt, "Book on 'real' Shakespeare stirs up new tempest," Chicago Sun-Times, October 19, 2005 --- http://www.suntimes.com/output/news/cst-nws-shake19.html

Also see http://www.timesonline.co.uk/article/0,,2087-1817581,00.html

And here is a nice site above the controversy --- http://www.shakespeare.org.uk/homepage

Also see http://www.nytimes.com/2005/10/23/books/review/23simon.html

New drug found to be effective for rheumatoid arthritis
A new drug appears to offer pain relief and increased mobility to rheumatoid arthritis patients who have exhausted their other medical treatment options. A researcher at the School of Medicine led a six-month, multicenter clinical trial that found patients were more than twice as likely to have significant improvement with the new drug than with standard therapy. The findings were reported in the Sept. 15 issue of the New England Journal of Medicine.
Mitzi Baker, "New drug found to be effective for rheumatoid arthritis," Stanford Today, September 28, 2005 ---
http://news-service.stanford.edu/news/2005/september28/med-arthritis-092805.html

A new diabetes pill that was headed for government approval has been linked to deaths, heart attacks and strokes
A new diabetes pill that was headed for government approval has been linked to deaths, heart attacks and strokes, a medical journal reported Thursday in an analysis it said was rushed online. The study by leading heart researchers found twice as many deaths and cardiovascular problems in diabetic adults taking the drug Pargluva as those on dummy pills or a competing drug. Developed by Bristol-Myers Squibb and Merck & Co., the drug, known generically as muraglitazar, was endorsed by a Food and Drug Administration panel last month. It is a treatment for Type 2 diabetes, the most common...
Kansas City Star, October 21, 2005 --- http://snipurl.com/KCStarOct21

Dr. Misbin is one of a few FDA officials who have criticized the agency's decisions when they believed life-or-death health issues were at stake. These employees generally keep their jobs, since the FDA is wary of conducting what might look like a crackdown on whistle-blowers. David Graham, a safety official, has spoken out since last year accusing the FDA of failing to pay enough attention to drugs' side effects. Dr. Graham continues to hold his FDA post. Aside from his early-morning epistle, Dr. Misbin has twice given information to Congress about problems he perceived in FDA-approved drugs. Without telling his boss, he recently contacted Mothers Against Drunk Driving in an attempt to get publicity for Symlin's risks. The former University of Florida professor, who makes about $150,000 a year at the FDA, continues to review major drugs for diabetes and have a role in decisions with multibillion-dollar implications for pharmaceutical companies.
Anna Wilde Mathews, "An FDA Reviewer Battles the Drug His Boss Approved," The Wall Street Journal, October 26, 2006, Page A1 --- http://online.wsj.com/article/SB113028992607079538.html?mod=todays_us_page_one

Doom and Gloom Predictions for Africa:  Things Can and Will Probably Get Worse

"Grim Outlook for Africa's Future," Wired News, October 21, 2005 --- http://www.wired.com/news/planet/0,2782,69296,00.html?tw=wn_tophead_5

Deadly epidemics. Ruined crops. The extinction of some of Africa's legendary wildlife. The potential consequences of global warming could be devastating for the world's poorest continent, yet its nations are among the least equipped to cope. "It is our vulnerability that sets us apart from developed nations," said Luanne Otter, a researcher at the University of the Witwatersrand during a conference this week in South Africa on climate change.

Surface temperatures rose about 1 degree Fahrenheit in the 20th century — the largest increase in 1,000 years, according to the Intergovernmental Panel on Climate Change. 1998 was the warmest year on record, and 2005 could be even hotter.

Climate experts say the trend will continue as long as carbon dioxide from burning fossil fuels and other gases keep building up in the atmosphere, trapping heat like a greenhouse.

African nations account for a tiny percentage of the emissions but are already suffering the consequences, researchers say.

The ice cap is receding on Africa's highest peak, Mount Kilimanjaro. Desertification is spreading in the northwestern Sahel region. Droughts, flooding and other extreme weather events are becoming more frequent and severe. Numerous plant and animal species are in decline.

South Africa's environmental affairs minister, Marthinus van Schalkwyk, urged the United States and other holdouts to sign the Kyoto Protocol, which calls on the top 35 industrialized nations to cut carbon dioxide and other gas emissions by 5.2 percent below their 1990 levels by 2012.

But even if countries stop polluting today, researchers argue the effects will be felt for decades to come, posing what the African Development Bank has singled out as possibly the greatest long-term threat to poverty eradication efforts on the continent.

Some 770 million Africans — 63 percent — live in rural areas, and about 40 percent survive on less than a dollar a day. Most are small-scale farmers. Wood is their major source of fuel, and medicinal plants their main defense against disease.

Many are already subject to recurring droughts, floods and soil degradation that can wipe out their livelihoods. Any long term changes in temperatures and rainfall could fundamentally alter the landscape in which they live and the production potential on which they depend.

Hotter, drier weather in the semiarid west of South Africa could reduce production of maize, a staple, by up to 20 percent and generate a proliferation of pests, researchers said. In the moister areas to the east, where rainfall is forecast to increase, thickets are encroaching into productive grasslands, threatening livestock and wildlife activities.

Rising temperatures at higher altitudes could also quadruple the number of South Africans at high risk of malaria by 2020.

With weather becoming more erratic, communities are finding themselves with little time to recover from one disaster before being hit with the next. While the United States may be able to recover from Hurricane Katrina in a year or two, it could take Mozambique 10 years to recover from the catastrophic floods of 2000, said Roland Schulze, a hydrologist at South Africa's University of KwaZulu-Natal.

Continued in article

Meanwhile in Siberia palm trees may spring forth
In Bykovsky, a village of 457 on Russia's northeast coast, the shoreline is collapsing, creeping closer and closer to houses and tanks of heating oil, at a rate of 15 to 18 feet a year. Eventually, homes will be lost, and maybe all of Bykovsky, too, under ever-longer periods of assault by open water. "It is eating up the land," said Innokenty Koryakin, a member of the Evenk tribe and the captain of a fishing boat. "You cannot do anything about it."
Steven Lee Myers, Andrew C. Revkin, Simon Romero, and Clifford Krauss, "Old Ways of Life Are Fading as the Arctic Thaws," The New York Times, October 21, 2005 --- http://snipurl.com/NYToct21

Doom and Gloom Predictions for U.S. Pensions --- The Broken Promise
It was part of the American Dream, a pledge made by corporations to their workers: for your decades of toil, you will be assured of retirement benefits like a pension and health care. Now more and more companies are walking away from that promise, leaving millions of Americans at risk of an impoverished retirement. How can this be legal? A TIME investigation looks at how Congress let it happen and the widespread social insecurity it's causing.
James B. Steele and Donald L. Bartlett, "The Broken Promise," Time Magazine Cover Story, October 31, 2005 --- http://www.time.com/time/magazine/article/0,9171,1122017,00.html

BBC Science & Nature: Prehistoric Life --- http://www.bbc.co.uk/sn/prehistoric_life/

Mommy as a Role Model? Get Real (with audio),
Commentator Gwen Macsai is the mother of three children. And she's finding that their standards for motherhood are higher than hers. And while she doesn't want to be a hypocrite, mothers like junk food, unmade beds and swearing too.
Gwen Mascai, "Mommy as a Role Model? Get Real (with audio)," NPR, October 19, 2005 --- http://www.npr.org/templates/story/story.php?storyId=4965941

Rat-infested French jails likened to 'dungeons in Middle Ages',
FRANCE'S prisons are the worst in Europe and their cells are akin to dungeons in the Middle Ages, according to a watchdog's report yesterday. Hygiene is "deplorable", with inmates crowded into filthy, rat-infested cells, leading to an explosion in the number of prisoners with infectious diseases, the International Observatory of Prisons (IOP) said. It described conditions as "catastrophic" and condemned the French government for failing to improve matters. "The situation is totally unworthy of our level of civilisation. Conditions of detention are close to those of the Middle Ages," the Paris-based IOP said.
Susan Bell, "Rat-infested French jails likened to 'dungeons in Middle Ages'," Scotsman, October 22, 2005 --- http://news.scotsman.com/international.cfm?id=2127412005
Jensen Comment:  Over half the prisoners in French prisons were born in the Middle East.  However, most of those are in prison for common crimes (rape, murder, robbery, etc.) rather than religious war.

CBRN = Chemical, Biological, Radiation & Nuclear
Al-Qaeda’s pre-9/11 activities also display a sense of confidence in its preparation to use CBRN weapons.
Over the years, al-Qaeda has stepped up its efforts to seek justifications to conduct increasingly brutal attacks. Correspondingly, the group has attempted to frame the acquisition and use of CBRN weapons as the religious duty of Muslims. Al-Qaeda began the process of incorporating this dynamic before the U.S. intervention in Afghanistan. In response to the testing of Pakistan’s nuclear arsenal in 1998, Osama bin Ladin praised the efforts of the first Muslim state to defend itself through WMD and encouraged other Muslims to follow Pakistan’s example. Shortly after these developments, bin Ladin was interviewed by Jamal Isma’il in December of 1998 over U.S. charges that al-Qaeda was aggressively pursuing CBRN. Bin Ladin asserted that using the word “charge” was misleading in that it implies a wrong doing. Rather, according to bin Ladin, “it is the duty of Muslims to posses them [WMD],” and that “the United States knows that with the help of Almighty Allah the Muslims today possess these weapons” These events illustrate al-Qaeda’s early gravitation toward promoting CBRN weapons that the network was attempting to produce before the U.S. intervention in Afghanistan. Al-Qaeda’s pre-9/11 activities also display a sense of confidence in its preparation to use CBRN weapons. However, in response to the 9/11 attacks, the terror network came under increasing criticism from its Muslim audiences to more correctly follow Islamic traditions of warning, offers of conversion, and significant religious authorization before committing such highly destructive attacks in the future. Through a series of subsequent statements, al-Qaeda is believed to have sufficiently fulfilled these prerequisite obligations for high-impact attacks. The lesson of 9/11 has also been applied to its WMD strategy, in that further preparations have been taken to justify CBRN attacks prior to the actual events. Al-Qaeda seems to frame its argument around references from the Qur’an that they interpret as instructing Muslims to respond to aggression with equal aggression (Qur’an 16:126; 2:194; 42:40); similar to the expression of “an eye for an eye.”
Robert Wesley, "Al-Qaeda's WMD Strategy After the U.S. Intervention in Afghanistan," The Jamestown Foudation, October 21, 2005 --- http://jamestown.org/terrorism/news/article.php?articleid=2369811

Soon you will start your computer in mere seconds
In the world of technology, of course, a general lament is also a golden opportunity. For years, engineers have been trying to reduce the time it takes to turn on a PC. The most recent advance came on October 17, when Intel engineers at the Intel Developer Forum in Taipei, Taiwan, unveiled a prototype technology, codenamed "Robson," that reduces startup time in notebooks from "several seconds" to "almost immediate," according to a report on the demonstration at PCWorld.com. A notebook using Robson was also able to launch individual software programs much faster. For instance, Quicken started in 2.9 seconds, compared with 8 seconds on a standard notebook. (An Intel spokeswoman declined to offer speed enhancement specifications, but confirmed that "it's a noticeable difference.") Intel hasn't released details about Robson's inner workings. But the key to the company's research efforts -- as well as those by competitors such as Samsung and MSI -- is a type of Flash memory called NAND (for the Boolean "not and," a way of arranging transistors on a memory chip to perform certain logic functions).
Eric Hellweg, "Starting Your PC in a Flash," MIT's Technology Review, October 21, 2005 --- http://www.technologyreview.com/articles/05/10/wo/wo_102105hellweg.asp?trk=nl

Also see http://www.technologyreview.com/articles/05/10/wo/wo_102105hellweg.asp?trk=nl

The charcoal drawing called “Hermaphrodite"
The charcoal drawing called “Hermaphrodite,” which hangs in the Lesbian, Gay, Bisexual, and Transgender Center at the University of Michigan at Flint, is accurately named. It portrays a naked female body, with wings, and also with a penis. The drawing has been on display for more than two years, but if you go to see it now, you’ll find it covered with black paper and the word “censored” written over the paper. University officials ordered the drawing removed, saying that it was creating a hostile work environment for an employee who complained about it. Students at Flint have thus far complied only by covering up the drawing, and many are furious at the university for seeking to have it removed.
Scott Jaschik, "Censoring Art or Protecting Workers?" Inside Higher Ed, October 21, 2005 --- http://www.insidehighered.com/news/2005/10/21/flint

Is this a job interview or a debate at Columbia University?

"Columbia Plays Dirty Pool," by John Mateus, Columbia Spectator, October 25, 2005 --- http://www.columbiaspectator.com/vnews/display.v/ART/2005/10/25/435d9925a7632 

First, some background. At Columbia Law, the Career Services Office offers second and third year law students the opportunity to interview with prospective employers on campus. Columbia posts interview dates online, and students sign up online; generally, employers have limited time frames (one day, maybe two), and slots fill up quickly. Employers take these interviews seriously. Additionally, Columbia is currently locked in a Supreme Court case over the Solomon Amendment. The Amendment, which Columbia is seeking to overturn, prevents Universities that bar military recruiters from receiving certain funds. Columbia Law wants to ban the military because of the “don’t ask, don’t tell” policy; however, it doesn’t want to lose the money. While the suit is going on, the school complies with the Amendment, allowing military recruiters on campus to give interviews to those who sign up.

Now, the problem. A homosexual rights group at the Law School, OUTLAWS, wanted to protest the Air Force JAG recruiter working on Friday. It organized this by sending out a mass e-mail to the Law School. It encouraged students to come on Friday morning to a demonstration against the “don’t ask, don’t tell” policy. So far, nothing wrong here. But, buried at the bottom of the e-mail, Dynishal Gross, the vice chair, added: “[second and third year law students] may also sign up to interview with Air Force JAG through the career services Web site and express your opinion to the recruiter directly!”

As a second year student, I was concerned. This was a deliberate sabotage of an event designed for recruitment. It disturbed me for two reasons:

1. It misleads recruiters into believing a student was there to hear about the benefits of the position, and instead forces them to hear the whines and accusations of a self-righteous mob. Recruiters have no power to change policy; they are job recruiters, not policy makers.

2. More importantly, it took slots away from deserving students who wanted to interview. Like me. I hadn’t even known about the interview, and frantically tried to find a spot online. This was Thursday, the day before the protest. No slots were available, and I could only assume some self-righteous protester had taken it—sabotage.

I immediately contacted administration officials to let them know of the e-mail, and tell them I felt this would reflect poorly on the school. After all, if this were an unpopular private firm, say a big tobacco firm, would they allow this treatment? I expected them to stop it. The response was fascinating: “We are aware of this issue and work very hard with the recruiters and the students in order to make certain that everyone who wants to interview with this employer, for whatever reason, is accommodated.”

What OUTLAWS did was underhanded and sabotage. But the administration allowing it was unconscionable. It reflects poorly on the administration as a whole that it would allow such an action, and leads me to question its motives.

This was a job interview, not a debate. What would have sent a larger message is if no one had signed up for the interviews; it would have made more sense. Protesters are allowed freedom of speech, not freedom of sabotage. OUTLAWS has lost its integrity; and in its treatment of the issue and the recruiter, the Law School has lost some honor.

Continued in article

Death by Accounting
To get companies to participate in a flu vaccine stockpile the government is dangling tons of new funding. Cash in hand is usually a very strong incentive. But a Clinton administration SEC policy prevents the vaccine makers from recognizing the revenue until the vaccine is delivered to the doctors, countering the very purpose of a stockpile. The Department of Health and Human Services' National Vaccine Advisory Committee concluded in early 2005 that for the stockpile program to be successful, "the revenue recognition issue must be resolved as soon as possible." It all began in late 1999, when the SEC issued "Staff Accounting Bulletin 101," which it painted as a modest clarification "not intended to change current guidance in the accounting literature." But in reality it was a radical change to the way companies could book revenue from "bill and hold" orders. This change would, at its least, lead to hindrances for innovative new companies. At its worst, it would discourage production of lifesaving products like vaccines.
John Berlau, "Death by Accounting?" The Wall Street Journal, October 21, 2005 --- http://online.wsj.com/article/SB112985642561675193.html?mod=opinion&ojcontent=otep

Bob Jensen's threads on revenue accounting are at http://www.trinity.edu/rjensen/ecommerce/eitf01.htm

October 24 message from Tom Smith in the InformationWeek, Newsletter

There's a growing set of viable alternatives to Microsoft Office. That's a positive development for business customers and users alike. Perhaps the prospect of a meaningful competitive push will force Microsoft to focus on making Office easier to use for people who don't need dozens of unwanted features imposed on them when they simply need to generate a memo. An open-source group launched the final version of OpenOffice.org 2.0, a free suite that's drawn attention from governments interested in breaking away from Microsoft's office application bundles. Judging by Friday's strong reader response, this suite is drawing attention from a lot of your peers. Still, the claim by Sun president Jonathan Schwartz that "OpenOffice.org is on a path toward being the most popular office suite the world has ever seen" has little credence.   Reviewers, including those at our sister sites, are giving high marks to Sun's StarOffice 8, which shares a code base with OpenOffice.org. These experts find that the functional difference between Microsoft Office and these alternatives is shrinking, and with Google poised to begin promoting StarOffice, a real challenge appears likely for the first time in many years.   It's not just Sun and OpenOffice, but other alternatives that are now in the mix and worth considering.   Also in the new-competition-for-Microsoft space, Firefox has reached 100 million downloads, albeit amid findings that it's actually losing ground in the market-share war. Market-share losses or not, 100 million users are worth taking seriously.   Amid ongoing concern (by ongoing, I mean, since 2000) about the overall health of the IT sector, Google and Yahoo continue their breakneck growth, showing once again why they're the companies to watch when it comes to gauging the overall health of the tech sector.   My personal favorite development: "Famed" hacker DVD Jon's decision to get an honest job. It's great when kids take your advice. Tom Smith tsmith@cmp.com www.informationweek.com

Web Software Challenges Microsoft
A quiet revolution is transforming life on the internet: New, agile software now lets people quickly check flight options, see stock prices fluctuate and better manage their online photos and e-mail. Such tools make computing less of a chore because they sit on distant web servers and run over standard browsers. Users thus don't have to worry about installing software or moving data when they switch computers. And that could bode ill for Microsoft and its flagship Office suite, which packs together word processing, spreadsheets and other applications. The threat comes in large part from Ajax, a set of web development tools that speeds up web applications by summoning snippets of data as needed instead of pulling entire web pages over and over. "It definitely supports a Microsoft exit strategy," said Alexei White, a product manager at Ajax developer eBusiness Applications. "I don't think it can be a full replacement, but you could provide scaled-down alternatives to most Office products that will be sufficient for some users." Ironically, Microsoft invented Ajax in the late '90s and has used it for years to power an online version of its popular Outlook e-mail program. Ajax's resurgence in recent months is thanks partly to its innovative use by Google to fundamentally change online mapping. Before, maps were static: Click on a left arrow, wait a few seconds as the web page reloads and see the map shift slightly to the left. Repeat. Repeat again.
"Web Software Challenges Microsoft," Wired News, October 23, 2005 --- http://www.wired.com/news/technology/0,1282,69316,00.html?tw=wn_tophead_6

Sex Drive Daily Drive (Blog)
"Women of Porn Rock Stereotypes," Wired News, October 21, 2005  --- http://blog.wired.com/sex/

"Porn on Campus," October 25, 2005 --- http://blog.wired.com/sex/

"Hear, Hear for Audio Erotica," by Regina Lynn, Wired News, October 21, 2005 --- http://www.wired.com/news/culture/0,1284,69287,00.html

Computer Glitch Lets Prisoners Out Early,
A State audit shows a computer glitch let some Michigan prisoners get out early. That audit shows the State Department of Corrections is only moderately effective when it comes to accurate prisoner release dates.
"Computer Glitch Lets Prisoners Out Early," by Emily Zangaro, WLNS News, October 21, 2005 ---
http://www.wlns.com/Global/story.asp?S=4004197

October 21, 2005 message from Scott Bonacker [lister@BONACKERS.COM]

I remember a thread or two asking for information on historical figures or accounting heroes or something like that. I couldn't come up with the right key words to find it by searching the archives unfortunately.

When I saw this article, I thought this was someone that should be included:


"Mary T. Washington of Chicago stepped bravely beyond race and gender boundaries in 1943, becoming the first black female certified public accountant in the United States. Washington, 99 years old when she died in late July, first opened an accounting practice for African-American clients in her basement while working on her college degree.

Washington lived and led in a world not yet here, creating what her business partner later called an "underground railroad" for aspiring black CPAs.
...."

Read the rest at: 
http://www.sojo.net/index.cfm?action=magazine.article&issue=soj0511&article=051149
 

October 21, 2005 reply from Bob Jensen

Hi Scott,

Although there are probably various interesting sites such as those you mentioned, there are several sites that are of particular interest with respect to famous accounting practitioners and academics.

The OSU Accounting Hall of Fame
It should be noted that members elected to this Hall of Fame include famous accountants from around the world --- http://fisher.osu.edu/acctmis/hall/ 

U.K. Accounting Hall of Fame
Professors David Otley and Ken Peasnell of the Department of Accounting and Finance are two of the fourteen founding members of the British Accounting Association’s Hall of Fame. The ceremony took place at the British Accounting Association 2004 Annual conference at York in April 2004 --- http://www.lums.lancs.ac.uk/news/3806/ 

Michigan State Video Archive
I've not yet seen anything about other accounting Hall of Fame sites. Michigan State University has a video archive of famous accountants. These accountants were invited to campus and then taped live. I don't think any of this footage is available online, but it would be a nice thing to do now that digitization hardware is so inexpensive. Don Edwards (U. of Georgia) probably knows more about these videos than anybody else.

A few accountants who became famous in fields other than accounting are listed at http://www.educationwithattitude.com/catch/accounting.asp 

The above site missed my favorite accounting celebrity John Cleese
The Unofficial Monty Python Website --- http://www.educationwithattitude.com/catch/accounting.asp

Note especially The Accountancy Shanty (audio) at http://www.educationwithattitude.com/catch/accounting.asp 

Bob Jensen

October 23, 2005 reply from Tom Sentman [TSentman@MSN.COM]

Here is a historical figure for consideration. While not a CPA, Luca Pacioli is considered to be the father of accounting. Although he did not invent dual-entry accounting, he described the system as we know it today. I always use this question on my tests.

Visit http://acct.tamu.edu/smith/ethics/pacioli.htm  for more.

Cheers,

Tom Sentman

 

The great power games in the Middle East
Two years ago, the Rand Corporation, a think-tank close to decision-making circles in Washington, issued a 66-page report entitled Civil Democratic Islam: Partners & Resources, which identified three elements within the Islamic mix, "the traditionalists, the fundamentalists, the modernists and secularists". The document recommended a strategy that strengthens the latter, or those who are "closest to the West in terms of values and policies" and compatible with "the contemporary international order". The report did not hesitate in championing a policy of using the so-called traditionalists against the fundamentalists, and in favour of the so-called secular modernists.
Soumaya Ghannoushi, "The great power games in the Middle East," Aljazeera, October 20, 2005 --- http://english.aljazeera.net/NR/exeres/7BE451EE-4D86-4A12-8AE2-FAFCE2A2CB6F.htm

T.E. Lawrence's Middle East Vision (with audio)
One of the most popular books among American military officers serving in Iraq is Seven Pillars of Wisdom -- the accounts of T. E. Lawrence, the British colonel who rallied Arab tribal leaders during World War I. Lawrence wrote about unconventional warfare and the people of the region.
Deborah Amos, "T.E. Lawrence's Middle East Vision (with audio)," NPR, October 20, 2005 --- http://www.npr.org/templates/story/story.php?storyId=4967572

Fraud Beat
Federal auditors say the prime contractor on a $1 billion technology contract to improve the nation's transportation security system overbilled taxpayers for as much as 171,000 hours' worth of labor and overtime by charging up to $131 an hour for employees who were paid less than half that amount.
Robert O'Harrow Jr., "Contractor Accused Of Overbilling U.S. Technology Company Hired After 9/11 Charged Too Much for Labor, Audit Says," The Washington Post,  October 23, 2005; Page A01 ---
http://www.washingtonpost.com/wp-dyn/content/article/2005/10/22/AR2005102201437.html?referrer=email

Bob Jensen's Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm

Mao, it turns out, was really mean
For the last seven decades or so, Mao has been a focus of admiration among many on the Left. Many Americans have known Mao primarily through the work of sympathetic biographers who became champions of the Chinese Communist regime. For many others, Mao has remained a man of mystery, whose true character and legacy have been hidden from Western eyes. All that is about to change. The publication of Mao: The Unknown Story by Jung Chang and her husband Jon Halliday will force a radical reformulation of Western understandings of Mao--and the book is virtually certain to exercise a vast influence within China as well. Ms. Chang, author of the much-acclaimed novel Wild Swans, has--with her husband, historian Jon Halliday--produced a devastating analysis of Mao and his legacy. They do not present a pretty picture.
Albert Mohler, "Chairman Mao's Reign of Terror--Finally the Truth Comes Out," Crosswalk, October 20, 2005 --- http://crosswalk.com/news/weblogs/mohler/?adate=10/20/2005

Also see "'Mao': The Real Mao" --- http://www.nytimes.com/2005/10/23/books/review/23cover.html
The NYT calls this book a "magisterial work."

Expect the equity risk premium to be lower moving forward

From Jim Mahar's Blog on October 20, 2005 --- http://financeprofessorblog.blogspot.com/

It is not new, but we just covered it in class and I think many of you might be interested. It is a brief overview of the Equity Risk premium through time by Clark and Silva.

Short version: Expect the equity risk premium to be lower moving forward.

From the paper

Expectations for the long-run equity risk premium play an important role in asset allocation decisions because the policy asset mix between equity and fixed income depends on the tradeoff between expected return and risk. The higher the expected equity risk premium the more equity will be held in the portfolio. To give some perspective about what might be reasonable to expect in the future, we first show historical values for the U.S. equity risk premium. Second, we break the equity risk premium into its component parts and suggest some reasonable values for the components going forward. Finally, we present expectations from several other written sources.

I especially suggest you look at page two; the tables are excellent for class!

The Clark and Silva paper is at  http://www.oldmutualus.com/companies/templates/streammarket.asp?mm_id=317

Bob Jensen's tax helpers are at http://www.trinity.edu/rjensen/bookbob1.htm#010304Taxation

From The Wall Street Journal Accounting Weekly Review on October 21, 2005

TITLE: The Search for a Safe Tax Shelter
REPORTER: Rachel Emma Silverman
DATE: Oct 13, 2005
PAGE: D1
LINK: http://online.wsj.com/article/SB112916175691467278.html 
TOPICS: Tax Avoidance, Tax Evasion, Tax Shelters

SUMMARY: The article focuses on warning signs for possibly questionable tax shelters and emphasizes in its opening paragraphs that the current IRS crackdown is "forcing some taxpayers to re-evaluate whether the innovative tax-reduction strategies they are using will still pass muster with the IRS."

QUESTIONS:
1.) What is the difference between tax avoidance and tax evasion?

2.) What is the notion of economic purpose of a transaction? How does this notion influence the assessment of the difference between tax avoidance and tax evasion?

3.) What is the importance of control over an asset for establishing taxability of income generated from an asset?

4.) Why are life insurance policies useful in constructing tax avoidance strategies?

5.) What factors are highlighted as potential indicative of possibly innappropriate tax avoidance cases? Explain the reasoning behind each 'red flag" listed in the article.

Reviewed By: Judy Beckman, University of Rhode Island

"The Search for a Safe Tax Shelter:  As IRS Steps Up Scrutiny, Advisers Shift To Conservative Tactics, but Some Still Test Limits," by Rachel Emma Silverman,  The Wall Street Journal,  October 13, 2005; Page D1 --- http://online.wsj.com/article/SB112916175691467278.html

The tougher enforcement climate is also reinvigorating some time-tested tax strategies, such as charitable remainder trusts, which can be used to reduce capital gains, income and estate taxes. Big accounting and law firms are being more cautious than in the past, shying away from marketing aggressive shelters, especially those designed to generate losses.

"There is definitely a chill in the air," says David Handler, a tax and estate-planning lawyer with Kirkland & Ellis in Chicago.

The new climate is a response to the federal government's vigorous push in recent years to curb questionable tax shelters -- loosely defined as transactions with no real business purpose other than to avoid taxes. Regulators have made use of audits, court battles and new tax rules to attack a variety of tax gambits. Among these: using exotic financial-market transactions to create artificial losses to offset taxable income; receiving big charitable deductions for gifts that improperly benefit the donors; and setting up partnerships among family members that have no economic benefit other than reducing gift and estate taxes.

The government is also targeting the tax professionals who have helped to market these techniques. In August, accounting firm KPMG LLP agreed to a $456 million settlement with the Justice Department and admitted to criminal wrongdoing over sales of tax shelters to hundreds of wealthy individuals.

Tax professionals are also being hit from a different direction: former clients who are suing their advisers after being fined with interest or penalties for using questionable tax shelters.

Despite the hostile environment, some tax professionals are still putting forward novel ways to minimize taxes. One strategy being widely peddled involves combining trusts with so-called private annuities, which can help stretch out capital-gains taxes. It's being offered as a way to help save taxes on real estate that has soared in value. Some advisers are offering to combine these private annuities with life-insurance policies to further cut taxes, a type of transaction that the IRS is reviewing. The agency recently set rules limiting the use of other insurance products in which wealthy individuals can access hedge funds and alternative investments in a tax-efficient manner.

Some individuals are entering into arrangements with banks or trust companies, giving the firms control in investing assets for a period of time. Some advisers say this strategy, known as a restricted management account, can help reduce gift or estate taxes if the account's assets are transferred to children. But others say the tactic, which was developed in recent years, might not withstand IRS scrutiny.

For investors, there are several red flags that a tax-savings strategy might actually be an improper shelter. Steer clear if the transaction seems to take place only on paper and there is no real economic gain or loss. Investors also should be wary if they are asked to sign a nondisclosure agreement preventing them from discussing the tactic with others. They also should be extra-vigilant if the plan involves an offshore trust or partnership, or a foreign insurance or annuity policy, since offshore tactics involve detailed tax reporting. And make sure to seek a second opinion from a lawyer and an accountant who are independent of the transaction.

Many of the most sophisticated and aggressive tactics are being offered by boutique "tax shops" that keep a low profile and cater to specific clientele, such as the ultra-rich or owners of privately held businesses. As the number of wealthy individuals increases, there is growing demand for creative ways to save taxes.

Among investors with net assets of $10 million to $20 million, 70% said "tax mitigation" was more important than investment performance as a means for preserving their wealth, according to a survey done by Prince & Associates, a Redding, Conn., wealth-advisory firm. "It's not how much money you make, it's how much you keep," says Russ Alan Prince, the firm's president.

There is often a blurry line, however, between an improper tax shelter and more legitimate strategies that take advantage of the intricacies of the tax code to lead to big tax savings. A number of strategies questioned by regulators are composed of well-established, legal building blocks -- such as using different types of trusts, partnerships, retirement plans, annuities and life-insurance policies, all of which can have special tax advantages. However, these strategies are often pieced together in such a way that there ends up being little, if any, real economic purpose. Even applying some legitimate individual strategies too aggressively can violate the spirit of the IRS rules.

Life-insurance policies, for instance, have numerous tax advantages, so they are often a component of tax-savings plans. Assets inside a life-insurance policy can grow tax-free, and the death benefit is typically paid out free of income tax. And when an irrevocable trust owns a life-insurance policy -- a widely used estate-planning-tool -- the insurance payout can escape estate taxes, too.

In recent years, many advisers have been pitching what's known as private-placement life insurance to wealthy clients. In this strategy, affluent individuals in effect are able to invest in hedge funds and other alternative investments that are held within insurance policies, which helps shield investment gains from taxes. Other promoters have been marketing aggressive insurance plans in which individuals transfer their closely held businesses into offshore insurance policies. The business income then accumulates tax-free -- and the policyholder can access that income by borrowing money, also tax-free, from the policy.

Some of these insurance transactions have caught the IRS's attention and the agency recently issued regulations placing restrictions on how policies are invested. Still, advisers say that private-placement policies can be an effective tool, but must be used with caution.

There are numerous tax-saving strategies that are perfectly legitimate. Some tactics are as basic as putting money in a 401(k) or individual retirement account, in which the assets grow tax-deferred for many years, allowing investors to cut their tax bills now. Another big tax saver: Move from a high-tax state to one with no income tax. Moving from California to, say, Texas, can cut a capital-gains tax bill by as much as 40%, says Don Weigandt, managing director of J.P. Morgan Private Bank in Los Angeles. If a person doesn't want to move, setting up a trust with a trustee located in a no-tax state can also shave state income taxes on the assets in trust.

Forwarded by Auntie Bev on October 24, 2005

A Cup of Coffee

A group of alumni, highly established in their careers, got together to visit their old University of Notre Dame lecturer. Conversation soon turned into complaints about stress in work and life.

Offering his guests coffee, the lecturer went to the kitchen and returned with a large pot of coffee and an assortment of cups… porcelain, plastic, glass, some plain-looking and some expensive and exquisite, telling them to help themselves to hot coffee.

When all the students had a cup of coffee in hand, the lecturer said,
"If you noticed, all the nice-looking, expensive cups were taken up, leaving behind the plain and cheap ones. While it is but normal for you to want only the best for yourselves, that is also the source of your problems and stress. What all of you really wanted was coffee, not the cup, but you consciously went for the better cups and are even now eyeing each other's cups!"

"Now, if Life is coffee, then the jobs, money and position in society are the cups. They are just tools to hold and contain Life, but the quality of Life doesn't change. Sometimes, by concentrating only on the cup, we fail to enjoy the coffee in it."

Frank sounds like my kind of man
Frank is a feisty Manchester male who hogs the bed. According to his online dating profile, Frank is unemployed and spends his afternoons lazing around his apartment, chewing up pieces of paper. He enjoys long walks and loves to chase birds and small children. Oh, yeah; one more thing – Frank is a dog. Interested parties can find out more about Frank at DateMyPet.com, where his owner is looking for other animal lovers willing to spend time with her and her pets. The site is one of hundreds now available for people trying to find mates with whom they share...
Katherine Davidson, "Specialized dating soars," New Hampshire Union Leader, October 24, 2005 --- http://www.theunionleader.com/articles_showa.html?article=62230

The DateMyPet.com site is at http://www.datemypet.com/

Forwarded by Ed Scribner

Harvard was founded to ensure that the young men of America (just men in those days) received a proper Christian education. Decadence was perceived to have set in, so Princeton was founded to do it right.

Some time later, a Harvard man and a Princeton man were discussing the merits of their respective schools. “I’ll bet a hundred dollars that you Harvard men cannot even recite the Lord’s Prayer,” said the Princeton man.

“You’re on,” said the Harvard man.

“OK,” said the Princeton man. “Go ahead—I’m listening.”

The Harvard man thought for a moment, then began, “Now I lay me down to sleep; I pray the Lord my soul to keep… .”

“Darn,” said the Princeton man. “Here’s your hundred.”

Fraud Updates --- http://www.trinity.edu/rjensen/FraudUpdates.htm
For earlier editions of New Bookmark s go to http://www.trinity.edu/rjensen/bookurl.htm 
Archives of Tidbits: Tidbits Directory --- http://www.trinity.edu/rjensen/TidbitsDirectory.htm

Click here to search Bob Jensen's web site if you have key words to enter --- Search Site.
For example if you want to know what Jensen documents have the term "Enron" enter the phrase Jensen AND Enron. Another search engine that covers Trinity and other universities is at http://www.searchedu.com/.

International Accounting News (including the U.S.)

AccountingEducation.com and Double Entries --- http://www.accountingeducation.com/
        Upcoming international accounting conferences --- http://www.accountingeducation.com/events/index.cfm
        Thousands of journal abstracts --- http://www.accountingeducation.com/journals/index.cfm
Deloitte's International Accounting News --- http://www.iasplus.com/index.htm
Association of International Accountants --- http://www.aia.org.uk/ 
WebCPA --- http://www.webcpa.com/
FASB --- http://www.fasb.org/
IASB --- http://www.fasb.org/
Others --- http://www.trinity.edu/rjensen/bookbob1.htm

Gerald Trite's great set of links --- http://iago.stfx.ca/people/gtrites/Docs/bookmark.htm 

Richard Torian's Managerial Accounting Information Center --- http://www.informationforaccountants.com/ 

Professor Robert E. Jensen (Bob) http://www.trinity.edu/rjensen
Jesse H. Jones Distinguished Professor of Business Administration
Trinity University, San Antonio, TX 78212-7200
Voice: 210-999-7347 Fax: 210-999-8134  Email:  rjensen@trinity.edu