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PulteGroup, Inc. Message Board

  • gjluckboxx gjluckboxx Mar 25, 2002 9:59 PM Flag

    Cheaters

    ALMOST A CULTURE OF CORRUPTION AND FRAUD

    "This is almost a culture of corruption," said Senator Byron Dorgan, heading the congressional Enron hearing. To us, this seems a gross understatement. What happened at Enron was definitely a lot more than just corruption. It is the business world's single largest fraud in history. For sure, it is an extreme case of fraud. But the fact that an unprecedented number of American corporations are using ever more aggressive reporting and accounting tricks to deceive investors about their poor profit performance has been a regular topic in the media for quite a while. On May 14, 2001, BusinessWeek carried an extensive article titled "The Numbers Game." It was headed by a sentence in big letters: "Companies use every trick to pump earnings and fool investors. The latest abuse: Pro forma reporting." So the Enron case in itself was nothing to be surprised about. It was simply too big to be shrugged off.

    Executives, external directors, auditors, bankers, lawyers and market analysts all knew.

    Yet their common, overriding interest was to keep the stock market booming. We, ourselves, had no inside information, of course. But we noticed years ago the vast and soaring divergence between skyrocketing S&P 500 earnings computed from the corporate profit reports and the unusually poor profit performance as reflected in the government's national income accounts. The two differed like day and night. It was manifest for years that the companies and their CEOs were using many accounting and reporting tricks to deliver the continually rising sales and earnings per share that Wall Street wanted to see.......

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    • I think your too quick to blame the corps and their auditors. After all, the government created an accounting climate where this was possible, and actually required. The government is always to blame for these things.

      Also, investors bid prices way too high, no matter what earnings were being reported. Let's face it, if you had stuck to your discipline and had no more than 2-4% of your portfolio in any one security, it wouldn't be that big a deal.

      • 2 Replies to preecher_man
      • IT isnt the accountants as much as the lawyers;
        Not a new problem. The definition in Ambrose Bierce's "The Devil's Dictionary," is a lawyer is "someone skilled at circumventing the law; Also, someone who makes his living by being present when property changes hands."
        It is the lawyers who give us Latin terms for everything, in order to obfuscate, confuse , and in the meantime rip everyone off. Although we are supposed to be a country of laws, we have unfortunately become a country of lawyers. Tha would then mean we have become a ccountry of people skilled at circumventing the law. I say they should be held responsible becasue they should know better than to deceive and therefore, whenever a lawyer is convicted of a crime,via cheating or lying, their penalty should be doubled.

      • IT isnt the accountants as much as the lawyers;
        Not a new problem. The definition in Ambrose Bierce's "The Devil's Dictionary," is a lawyer is "someone skilled at circumventing the law; Also, someone who makes his living by being present when property changes hands."
        It is the lawyers who give us Latin terms for everything, in order to obfuscate, confuse , and in the meantime rip everyone off. Although we are supposed to be a country of laws, we have unfortunately become a country of lawyers. Tha would then mean we have become a ccountry of people skilled at circumventing the law. I say they should be held responsible because they should know better than to deceive and therfore, whenever a lawyer is convicted of a crime, their penalty should be doubled.

 
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