From: Samantha Atkins (samantha@objectent.com)
Date: Mon Jul 01 2002 - 19:14:20 MDT
Harvey Newstrom wrote:
> An interesting twist to this question is given in the New York Times:
> <http://www.nytimes.com/2002/06/30/business/yourmoney/30TELE.html?pagewanted=
>
> 1&todaysheadlines>
> Trying to Catch WorldCom's Mirage
> By SETH SCHIESEL
>
> Apparently, big companies like AT&T were actually doing well in the
> Interent communications arena, but they didn't know it. They compared
> their success to the much higher claims that are now known to be false.
> AT&T says that it terminated working programs, penalized managers, and
> scrapped projects that seemed second-rate, but now appear to have been
> industry leaders.
Oh my, what a big mess! You know, instead of putting CEOs and
accounting firms on trial, or in addition to them, I want to see
top SEC heads on the line. Isn't getting the facts about the
state of companies and avoiding this kind of fraud part of what
the SEC is charged with? They obviously failed and we were
obviously harmed thereby.
On top of the world political and military insecurities and the
already running financial meltdown of the US and other
countries, we now have it that we can't trust even the biggest
and most established corporations to report accurately. A lot
of people will bail from stocks once this sinks in. Harm indeed.
>
> Besides questioning whether the Internet Boom was as big as we thought,
> we now have to ask if the Internet Bust was as big as we thought. Maybe
> all these "second-rate" companies were really leading edge, but didn't
> know it. Maybe AT&T really was beating WorldCom and Global Crossing if
> we remove the accounting tricks. Maybe Apple really beat Microsoft in
> recent years if we ignore Microsoft's subsidies from previously
> unreported profit. Maybe all these companies that jumped on the
> Internet bandwagon were really doing as well as anyone, and they only
> thought they were failing when compared to fictional claims from the
> real companies.
>
> It may be that both the Internet Boom and Internet Bust were both
> exaggerated by these accounting tricks. Instead of being such a
> roller-coaster, the growth curve may be more stable and consistent.
> Maybe business is continuing to grow at a normal and predictable rate,
> and it was only our measurements that got confused for the past decade.
>
Nope. There are half-a-million or so of us techies out of work.
That isn't business as usual. The DOW dropping from its peak
of around 16000 to the current level was not business as usual.
It has very real effects whether the numbers were all cooked
or not.
- samantha
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