There are two sides to every story; Hinky knows. AlJazerra.net is publishing in english again, if you'd care to see another way to cover conflict in the middle east.
Don't expect to get stock quotes there, but here a footnote to swallow your morning: Healthsouth has been tee'd up (here too), but now, it's looking like their bankers (now at UBS, after crossing the street from Solly Smith Barney) might/maybe/could/are next up for the silver handcuffs and the perp walk.
Unemployment numbers remain unchanged, as America takes over Iraq'a Airport, which makes the economy look more robust for movies houses, coffee shops hard liquor and maybe soup kitchens.
Hinky 11:59 AM
Truely good to see Christohper Byron shed some NY Post light on the hinky World Wrestling Entertainment (WWE) share price, with its mono saturated P/E ratio of 785, as of this morning. He notes their revenues have dropped for the third year in a row for these good old boys from the Connecticut hills.
This, of course, is kids play compaired to what's in store this earnings season, which starts this week. If reform really is the order of the day, we are due to see some major hinkiness come to light. Option accounting is about due to cause balance sheets to bleed this quarter, if the financial accounting regulators can bring themselves to admit that Lieberman style accounting, where the hinky footnote contains information that swallows the page, is as out of fashion as Montecristo cigars. The New York Times hinted at the issue, burying the nature of the thing four paragraphs from the end the article:
"But accounting experts argue that options do have a cost and — like salaries, bonuses, direct stock grants and health care benefits — should affect the bottom line. Instead of giving options to executives, companies could instead issue new shares of stock to raise capital and expand their businesses."
Stated that way, it is easy to see the trouble with options, where companies use the funny money they print when they sell their shares to the public, to pay employees F.U. money salaries. They used to say: "who cares, as long as the price goes up." Well, yeah, but if your company can't budget in a new Lab because you paid the CFO with 4 million shares of treasury stock waiting in the wings for the day he and the little woman want to buy that Condo in the Caribean, things come into focus. When companies issue these options, and they become free to trade, it's as if there is a delayed underwriting, years after the investment bankers are done pumping up the volume to create a market for the shares, with their hinky P/E multiples. If company officers signed off to pay bankers outsized fees of 20 or 30 percent, everyone could see that such a fee is outsized at the expence of shareholders. Why don't they see options grants the same way? Lieberman should know, he blocked every attempt by accountants at the Financial Accounting Standards Board to bring the issue to light over the past 10 years. The phrase being used in the hinky better-late-than-never coverage of the issue by the press is "the true costs" of these grants.
These hinky options grants are weighing on share prices of many many companies, and such share prices are weighing on earnings of others, through the inflated price of shares in various company pension funds (which are also calculated three card montey style). Boston chicken was the day the market lost its cherry; that day, share prices popped from 14 to 41, and the banking syndicate walked away, which should have made Sammy the bull blush. Instead, the music played on, and there were more than enough chairs for every ass that wanted a seat at the day trader's desk. Well, the music has stopped, and there are only so many chairs.
Hinky 10:33 AM
