The accountants giveth, the accountants taketh away

KB Home (a builder) took a solid hit today. Accountants erased $514 million from the company's books. Zap. A half a billion dollars just evaporates.
How do they do that? Accountants in the past had computed that KB Home had tax credits worth $514 million that could be used to reduce their taxes, when and if they ever made any money. Accountants are allowed to enter potential tax breaks onto the company books as an asset. Wow. Add $514 million to the bottom line, that will make the company look profitable. Pumps up the stock too. Great.
Unfortunately the auditors decided that the chances of KB Home ever making any money were remote and they insisted that the $514 million be removed, 'cause it wasn't ever going to do KB any good.
Something like this happened over at GM last year to the tune of $39 Billion (yes, b for billion).
This kind of book keeping doesn't help investors evaluating the company or managers trying to improve the company earnings. It is a deceptive practice intended to make the company look more profitable than it really is. There oughta be a law agin it.

Hillary wins and confuses every pundit in the land

Going into yesterday's primary I, all the TV talking heads, and Hillary's people all expected Barack Obama to mop the floor with her. One pollster was giving Obama a 10% lead. Hillary staffers were crying in their beer with the media. Wall St Journal reported Hillary's people predicting a horrible loss, they were looking for jobs, a total wipeout.
Damn. I figured by 10:30 there would be enough election returns in to make turning on the TV worthwhile. And there she is, a solid 5000 votes ahead of Obama with only 65% of the vote counted. Then Obama clinched her victory by giving a gracious concession speech.
Wow. How did that happen? Pollsters completely blew it, predicted the wrong winner and everyone lapped it up.
One thing that threw the polls off was the speed of the thing. With only four days from the upheaval that was Iowa, the voters were still in a state of flux. Iowa changed Obama from a nice guy but too young to be a contender into a real contender. And it promoted Mike Huckabee from "Who is he?" to a second real contender. A huge bunch of voters started to think thoughts that they never thought before. Takes more than the alloted four days to settle voters down. The pollsters cannot poll as fast as voters can change their minds. The reported polls represented the voter's intentions as of Saturday or Sunday. By Tuesday a lot of voters had changed their minds. The pollsters just aren't fast enough to catch the mood shift before primary day.
Then Hillary allowed some of her emotions to leak out on TV. I watched it and before the election, said to my son," That is the most effective speech Hillary has given in the whole damn campaign." I saw Hillary's no-nonsense facade soften enough to let us voters see that she really cared about something. It must have changed some minds, the TV replayed it all day, you couldn't miss it.
So, on to super Tuesday.

Northrup to compete for next Humvee (WSJ)

Last year I posted about buying MRAPS armored trucks for $500,000 apiece. Todays WSJ has ar article about Northrup bidding on a new "Joint Light Tactical Vehicle" to replace the Humvee sometime in the future. Target price is $300,000. Cheaper than MRAPS, but that ain't saying much. The plain old Jeep which worked just fine in WWII, Korea and Vietnam, and is still in production after 60 years, has an MSRP of $20,000. The much bigger fancier Humvee goes for $56,000. This here Joint Light Tactical Vehicle has gotta be wonderful to justify its price.
The picture of it shows fat offroad tires, no mudguards. A four man closed cab with a light machine gun on the roof and a slanty armored bottom. Boxy windowless van body on the back.
Other bidders include Lockheed Martin, BAE systems, Boeing, and General Dynamics. Hellova lot of high techie aerospace companies to do an armored car/truck. Either the military airplane business is drying up, and they need the work, or they expect to design high tech Future Combat Systems digital radio stuff into the guts of the vehicle. Which is a boondoggle. The fancy electronics should not be custom designed to fit just one vehicle. Design one good package and use it on everything from jeeps to tanks. Cheaper that way and much easier to stock spare parts for, train for, and manufacture in real volume.
The article mentioned that the brand new MRAPS armored trucks, first of which are just getting out to Iraq, have a few "issues" . Like too big and heavy to go off road or into the narrow streets of Baghdad, where they get stuck going round sharp street corners.

Heavy turnout in NH

Or at least in my part of it. Franconia, about 981 registered voters, and heavily democratic. Voted at midday and the traffic was heavy, heavier than it was for the last general election in 2006. I haven't bothered to turn on the TV today 'cause I don't think there is anything to know until the polls close. Then we get the exit polls, for what ever they are worth, and the real results will trickle in all evening. Franconia just puts real paper ballots into a wooden ballet box and counts them by hand, after the polls close.

Science Fiction gets to GM (WSJ)

GM has a project to invent an automatic self driving car. Rick Wagoner, GM CEO, will give a key note speech at the Consumer ELECTRONICS show (Las Vegas). Wagoner is convinced that being the first with game changing innovations is the solution to one of GM's fundamental problems, its battered image.
Sell your GM stock ASAP.
Letting a micro processor drive in Rt 128 rush hour traffic would scare the hell out of me. I don't care how cool it is, or how much testing it passed, no micro processor is going to be as reassuring as my two hands on the wheel, and my foot on the gas. Plus decent engine power, strong brakes and good handling. Like my Deville gives me.
GM's problem isn't battered image. It's problem is crummy product. The only thing GM makes that anyone wants to buy is Corvette. The rest of their cars & trucks are so plain and boring they make the blandness of Toyota and Honda look exciting. GM's problem is a management of bean counters (Wagoner is an ex bean counter) rather than real car guys, engineers and salesmen. Only a bean counter would think you could sell an automatic drives-itself car.
Sell your GM stock. The company is doomed as long as this bunch of suits are running it.

McCain rally this morning

It was at 8:00 AM down at the Littleton VFW hall. It's warmed up here, and the snow is melting off the parking lots. Bunch of people were there, to hear, not McCain himself, but a bunch of old Hanoi Hilton comrades, and a US Congressman from Rhode Island. McCain himself was doing the more populous southern NH, and sending bunches of supporters out to the vote shy northwoods. It was a pep rally sort of affair, everyone was wearing stick on McCain badges, and the speakers quickly figured out that they didn't have to preach to the choir. After a couple of hours of schmoozing with neighbors, drinking Dunkin Donuts coffee, and listening to get-out-the-vote type speeches, the affair wound down and we all drove home. The McCain guys re boarded their bus and set off for their next stop. According to one of 'em, they planned to drive 385 miles today. Better them than me.
Tomorrow will tell, but McCain may do very well indeed.

Got my first push poll tonight

It was a robo call with enough voice recognition to under stand yes and no. When I told it I was for a candidate, the robo caller then said "Are you aware than Candidate So and So failed to vote for the Bush tax cuts". I played along, just for fun, and the push poller managed to deliver negative information on a couple of more candidates, it seemed to be an equal opportunity bad mouther. At the end the robo caller announced that it was not affiliated with any candidate and mumbled it's organization's name too rapidly for me to catch.
No sooner than I started this blogging about the robo caller than the phone ran again. Another robocaller who announced he was Tom Ridge and then proceeded to tell me about the goodnesses of Senator McCain's immigration policy.
At this rate all the telephone exchanges are gonna melt down from heavy calling.