Masters in Bemoaning Accounting (MBA)

Began the second year of my MBA program earlier this week. One of my courses this quarter, Managerial Accounting: Strategic Cost Management, is needed for an accounting elective requirement. After taking Introduction to Financial Accounting the first year, it became quite clear that accounting was not an area that held much deep personal interest. Sure discretion and judgement play a part in the field, but for the most part, it remains a highly mechanical, rule-based discipline that limits innovation and creative thinking. Maybe that's why most of the professional accountants that I have met are self-effacing. For the next ten weeks, I'll have to bear with it. One bean, two beans, three beans... oye.

Roman War

Amused to read on the front page of today's Wall Street Journal that American watchmakers are campaigning against the recent use of the Roman numeral "IV" by luxury Swiss watchmakers Patek Philippe and Bedat & Co. Apparently, watchmakers have traditionally used "IIII" on the face as a means to counterbalance the visual weight of the "VIII" on the other side, and some of them view the use of "IV" as an affront to this age-old practice. In all my years of wearing watches with Roman numerals, I never even noticed the use of the "IIII". Somehow, it seems a bit wrong. In my numerous Latin classes, we were always taught to use "IV"; never, ever "IIII". The writer points out that London's Big Ben, the most famous of clock faces, also skirts the convention by using "IV". T and I were actually tipped off to the controversy earlier in the week by a saleswoman at the Kerns boutique in Burlingame as we were pricing some of their watches. We may actually go with the Bedats. Good thing too because, at $25,000 each, the Pateks may be a bit out of our price range.

$1.27 Million

Andrew Tilton had better be right about the decline in home prices. The San Francisco Business Times just published an article with the following statistic: "Statewide, the 10 cities and communities with the highest median home prices in California during August 2004 were: Beverly Hills, $1,445,000; Manhattan Beach, $1,400,00; Laguna Beach, $1,375,000; Los Altos, $1,350,000; Palos Verdes Estates, $1,325,000; Burlingame, $1,270,000; Newport Beach, $1,100,000; Saratoga, $1,062,500; Orinda, $950,000; Calabasas, $935,000." Burlingame/Hillsborough is the sixth most expensive housing market in the state. A median of $1.27 million? Yikes.

Warring Street, Berkeley

Reading this article in the San Francisco Chronicle (link here) reminded me of my own days living in a house on Berkeley's "Greek Row", the picturesque, tree-lined thoroughfare that runs down Piedmont Avenue and Warring Street connecting the eastern gate of campus, Hearst Greek Theater, Memorial Stadium, International House, and the Clark Kerr satellite campus. Friends of my aunt and uncle down in Ventura County were looking for someone to manage a large multi-unit house they happened to own in Berkeley; their son, a member of the Cal men's swimming team, had just graduated and would be moving out of the house along with his teammates (including Olympic gold medalist Matt Biondi, who lived on the second floor). So I jumped at the chance. Free rent with a small weekly stipend. The house and the setup was more than any college student could ask for. Room-by-room housekeeping twice a week, professional gardener, big screen projection television, leather lounge chairs, mahogany furniture, gourmet kitchen with a double oven, full size pool table, free income from selling parking spots along our driveway during football games, etc. Good times.

No, it's the Ritz

The weekend retreat at the Ritz in Half Moon Bay was just the ticket. It started off with a bang. On the way to the resort, we happened to spot one of our colleagues darting around in his new BMW M3 convertible. He shot us the "wanna race" glance and in no time, we were off to the races. Not much of a matchup given I was driving my lowly Subaru Outback. But one of my passengers knew of a shortcut through a local road bypassing a particularly nasty stretch of Highway 1, the route our bimmer friend took. Needless to say, the porter was carting our bags into the hotel just as the M3 roared into the valet station. Chalk one up for the underdog. Indeed, knowledge is power. Later that afternoon, we made sure to rib him plenty about the embarrassing defeat. The dinner in the Miramontes Room rocked. Grilled lobster tails and fresh raw bar served out on a clifftop terrace overlooking the Pacific Ocean during sunset... it had a dreamlike quality to it. Afterwards, everyone congregated around the fire pit for the ritual cooking of the smores. Others opted for cigars and cognac. The best part was going back to my room which came furnished with a large and inviting marble bath and had incredible views of the coastline and the nearby golf links. It all conjured up that classic scene in one of my all-time favorite movies, Field of Dreams, when Shoeless Joe Jackson surveys the pristine baseball diamond built on Ray Kinsella's wheat field... Shoeless Joe: "Is this heaven?"... Ray: "No, it's Iowa."

Retreat Hangover

The outside speaker at this year's retreat was Andrew Tilton, the senior economist at Goldman Sachs. His summary of the economy and the outlook for the near and medium term were sobering. The boost from the stimulus has ended, the federal budget deficit is growing, the need to devalue the currency is inevitable, the medicare system needs to be fixed, the Fed has only begun its tightening of rates, corporate profits are headed downward as productivity begins to decline, ad infinitem. He made a point of downplaying the effect of higher oil prices on the economy by pointing to a more troublesome issue, the huge effect that mortgage refinancings have had in boosting consumer spending and consequently, the business sector. Tilton and other economists view the drying up of the mortgage refi market as a more troublesome issue as the economic recovery tries desperately to gain traction. As for the one bright spot in the economy thus far, housing, Tilton believes the "bubble" (yes, he used the term "bubble") began six months ago when he and other economists witnessed the irrational rising of home prices soon after a rise in mortgate rates; this was on top of analysis showing the widening and untenable gap between income levels and housing prices. He and others believe that housing hotspots like the Bay Area are due for price declines but is of the opinion that such declines will be spread out over a couple of years.