Re: FWD: The Biggest Risk to the Global economy in 2002

[Colin Danby <danbyc@xxxxxxx>]

Recent events have illustrated many PK points, including the importance
of cash flow, which is harder to lie about.  The difficulty in assigning
profits to particular time periods -- inherent in the firm operating in
historical time -- is the ground on which chicanery is built.

Another interesting point of the last few weeks is that some financial
fragility is being transmitted through the channel of doubts about past
information.  Once we realize how badly bond-raters and accountants have
been doing their jobs -- especially in cases where it really matters --
we begin to question a lot of other assessments, some of which may be
perfectly sound.

Best, Colin

Henry:

> The march is on to look critically at valuation.  For some time now,
> I have suggested that profit under financial capitalism is no longer
> the result of market forces but the result of accounting
manipulations,
> both legal and illegal.