No one bailed out Nortel. It closed this week at $0.48 per share on the Toronto Stock Exchange from a year old high around $16.00. This was after they contracted the numbers of shares 1 to 10 several months earlier. Such performance by executives. Yet free enterprise seems to insist that private business is more efficient than public.
What seems stunning in all this is that all these analysts have charted the decline of Nortel over the last decades since it was spun off from Bell Canada Enterprises (BCE on the TSX) which closed at $21.23 at week's end.
The major complaint of Nortel watchers has been the inadequate accounting department of the company. Now this accounting system had to have been instituted by its parent company prior to 1998. That company is BCE. Yet BCE's financial reporting has always been perceived as accurate. It appears that BCE was given a pass since so many investors had money in this company. BCE appears immune to the disease it gave Nortel.
1 comment:
Didn't you know, there's no such thing as "inadequate accounting"? There can't be. It simply isn't possible.
All accountants have to go to school for a very long time to learn their counting skills and then they have to work like slaves for a few years to perfect their counting skills, then they have to pass an extremely difficult counting test, given to them by older, established accountants.
Then, finally, after being severely ripped off for an extended period of time by people who are already accountants, they can finally earn an accounting designation like Chartered Accountant (CA) or Chartered Management Accountant (CMA) etcetera.
It turns out, if you call yourself a professional and convince some politicians to make a bunch of laws in your favor (campaign donations are gratefully accepted!), you are then allowed to imagine your own ethical and professional standards, much like doctors and lawyers. Essentially, you get to make up and enforce the rules by which you're governed.
Some people would consider this system utter nonsense because it makes accountants responsible to no-one but a bunch of other accountants. In that way, I guess counting is similar to say, surgery or lawsuits because apparently, people who haven't suffered through formal training in counting simply aren't qualified to judge the profession of counting.
We're currently suffering through the greatest financial melt-down in history. It seems to me, we should be particularly thankful to all of those accountants involved in keeping the books and all the external auditor accountants who audited those books, whose due diligence went a long way towards protecting the investing public from such an immense, impending financial disaster.
I mean, they must have at least noticed, right? They didn't mention it to anyone but you'd think they must have at least noticed?
Accountants are like hamsters, running around on one of those stationary wheels. The difference between accountants and hamsters is the accountants designed and built the wheel they're propelling to nowhere --- and they get paid handsomely to spin it.
Oh, yeah, according to the laws of the land (campaign contributions are gratefully accepted!), we're the ones who are eternally required to pay for the wheel.
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