Freezing in NH

Inquiry Assails Accounting Firm in Lender’s Fall

A sweeping five-month investigation into the collapse of one of the nation’s largest subprime lenders points a finger at a possible new culprit in the mortgage mess: the accountants.

Yeah, because accountants are just such edgy law breakers.  I suspect the finger (in all senses of the phrase) goes to the boss of the accountants. 

There are so many people who did things wrong here, it’s hard to pick just one.  In this case, the auditors signed off on some things they shouldn’t have.  But they didn’t make the decisions, just agreed they were okay.  And that makes them a total failure as auditors, but not exactly the main culprit. 

Imagine you’re driving down the road as the sun is going down with your headlights off and you pass a cop.  Now the cop really should pull you over, but if he doesn’t and you crash into a tree when the road curves, it’s still your fault.  You can blame it on him but you’re the one driving in the dark. 

New Century made a whole series of bad choices, some of which may turn out to be illegal.  KPMG audited them, and didn’t catch everything.  So while KPMG should have caught the problems, it was New Century that created those problems. 

I suspect this is far from the last article that will compare this mortgage mess to Enron.

Can Entrepreneurship Be Taught?  Interesting question.  I wish I had more education about financial stuff, and less about which president came in which order (and other things I could look up easily).   I mean, I’m not bad at math (as long as I have paper and pencil, or a calculator) so balancing my checkbook was easy, but I had no idea about taxes, retirement accounts, real estate, etc.  I’m not sure how you’d teach that sort of thing in school, but we could have had a few examples of compound interest in math class.  For example a couple questions about saving for retirement and a couple about how much you spend by paying the minimum on your credit cards.  If we had ten minutes of that every couple weeks for a few years, it might have sunk in. 

I also wish my college had an accounting course.  And maybe one basic business course as well.  I think they would have gotten enough students to fill it easily.  Doesn’t everyone dream of starting a business at one point or another?

I have a small business on the side with a couple partners.  We haven’t put much time into it yet (this year will be different) and therefore aren’t really making a profit.  But even though it’s a small amount of money we still should be paying attention to it.  So I’m taking an accounting class at a local college.

So far it’s been surprisingly fun.  I don’t think it would be as fun if I didn’t have the business, because I can relate lots of what we learn about to the business, and I can see how this is really going to help us understand what’s going on.

 However tonight during a class discussion our instructor admitted that at one point he’d used the courtesy checks that sometimes come with a credit card statement to pay the credit card itself.  So now I’m wondering if I should really be paying attention to the guy…