was in my inbox today. Those of us who follow astrology will not be surprised to read from the Motley Fool that the corporate culture is collapsing under the influence of Pluto (breakdown and transformation) in Capricorn (business, achievement, capitalism):
Half a decade ago, the entire nation was shocked when award-winning “innovator” Enron turned out to be little more than a cash-shredding pyramid scheme. The crucial failing for investors was Enron’s use of opaque, “mark-to-market” accounting. The problem comes when the market is batty (or doesn’t exist), so you instead mark your assets to a model, especially one that’s wrong, either because you made an error or because you based it on exceedingly generous assumptions.
In the end, we learned that Enron’s accounting was pretty much mark-to-fairy-tale, with the company booking enormous gains from assumed future profits on schemes (like bandwidth trading) that sounded great, but had little chance of producing anything besides headlines.
You might think we’d learned our lessons about fantasy accounting after Enron, but you would be wrong. Things actually got worse. The infection moved to the comfy-sounding “homeownership” market. Against a star-spangled, feel-good backdrop touting the “American Dream,” our recent mark-to-model mania tripped up a lot more than one big company. In fact, it swept through the entire banking world. (Bear Stearns (NYSE: BSC) is not the first to choke on lousy, poorly modeled mortgage-backed securities “income,” and I’ll eat a Miami condo if it’s the last.)
I’ve been reading articles about the slowdown of big mega retailers, and I’m wondering if the coming transformation of the corporate world might bring about the return of independent business (when Uranus in Aries squares Pluto in Cap 2010-2013). Perhaps it’s just wishful thinking, but it […]