Broken Symmetry

Small Steps Toward a Time-Series Graph of the Balance Sheet

From FlowingData:

In an effort to make Canadian government expense data more accessible, FFunction designed the Expense Visualizer. A slider on top lets you filter by time, and small graphs show spending by different departments. Rearrange panels as you wish, and select among several scaling options as absolute values or relative. Bookmark your custom views or send them to others.

Ask and Ye Shall Receive

Over two years ago, I put up a post called Cost Accounting and Lean Accounting as a Fourier Pair. That post has turned out to be one of the most popular on this blog. The point of the post (which is short -- go read it) is that the way accounting information is collected and reported through financial statements is not optimal. The post concludes with the following recommendation:

Financial statements should report average turnover rates for each balance sheet account.

And on Friday, the SEC unanimously passed a rule requiring something even better:

Under the proposed rule, all companies would have to disclose not only how much debt they have at the end of the quarter but also average and maximum figures during the quarter.

Technically, a turnover rate would give you the same information. But the average and maximum figures are easier to understand, and hence probably harder to game.

I like to think that somebody involved with the proposal -- directly or indirectly -- might have seen or heard about the post. Either way, I'm very happy. I think this is one of the most significant advances in accounting rules since the invention of double-entry bookkeeping.

Television is Addictive

From Television Addiction Is No Mere Metaphor by Robert Kubey and Mihaly Csikszentmihalyi:

What is more surprising is that the sense of relaxation ends when the set is turned off, but the feelings of passivity and lowered alertness continue. Survey participants commonly reflect that television has somehow absorbed or sucked out their energy, leaving them depleted. They say they have more difficulty concentrating after viewing than before. In contrast, they rarely indicate such difficulty after reading. After playing sports or engaging in hobbies, people report improvements in mood. After watching TV, people's moods are about the same or worse than before.

My wife and I have observed this in our two year old daughter, who lately begins each day begging to watch television. We're about to nip this in the bud.

SEC Demands More Real-Time Balance Sheet Data

It's about @#$@# time! WSJ reports: (see their graphic especially)

The agency's staff has been considering whether banks should be required to provide more frequent disclosure of their average borrowings, which would give a better picture of their debt throughout a quarterly period than do period-end figures.

See related posts: (by Nyquist-Shannon, quarterly balance sheet sampling permits only semiannual and longer term trends to be spotted)

What should the FTC and SEC do first to help consumers?

Great Suggestions for Financial Reform (from Lloyd Blankfein)

Why Accounting Information Should Be Reported in Real Time

Schapiro's remarks are still ringing in my ears:

"Rather than relying on carefully staged quarterly and annual snapshots, investors and creditors should have access to a complete real-life picture of a company's financial situation," the senators wrote to SEC Chairman Mary Schapiro, citing the Journal articles, among other things.

PACER Fee Diversion

Fee diversion isn't a problem only for the PTO:

The other issue with PACER -- and it's hard to ignore -- is cost. The reason why the courts charge money for these public domain documents is that Congress authorized them to. In the 2002 E-Government Act, Congress essentially said that they"re allowed to charge you their fees to recoup the cost of running this public access system, only to the extent necessary to recoup these costs. The courts determined at the time that that should be $0.07 a page and eventually upped that per page access rate to $0.08 per page. But if you look at their budgeting documents, we've found that they actually charge a lot more than the expense necessary to provide these documents. My colleague, Steve Schultze, has done a ton of work digging into the federal judiciary budget. We found that about $21 million every year looks like it's being spent directly on running the PACER systems. That includes networking, running servers, or directly to providing public access through PACER. Their revenue in 2010 is projected to be -- I believe -- $94 million. So there"s a $73 million difference this year in the amount of money that they"re collecting versus the amount of money that they're spending on public access. That $73 million difference is thrown into this thing called the Judiciary Information Technology Fund or the JIT Fund.

The JIT Fund is being used on other court technology projects, like flat screen monitors, telecommunications, embeddable microphones in court benches. I'm not opposed to these projects being funded and more technologies in courtrooms, but these projects are being funded at the expense of public access to the law, including the ability for researchers and others interested in our judicial process to access and study how the judicial process works, which I think is highly detrimental to society.

Via O'Reilly Radar blog.

Alexander Hamilton Redeemed

On a trip to D.C. in August, I visited the Old Patent Office, which is now the National Portrait Gallery, and encountered the 1806 Trumbull portrait of Alexander Hamilton, and this note on his biography:

I previously blogged about this here. I am pleased to report that -- thanks to the attention and sympathy of Peter Malkin and the museum's Director -- the note has been replaced by the following:

This is much an improvement on the old version, although not what I submitted as a suggested replacement, which is the following:

Alexander Hamilton -- “the most brilliant American statesman who ever lived,” as Theodore Roosevelt called him -- was born on an isle in the Caribbean to an unwed single mother. Driven by a voracious appetite for knowledge and insatiable professional ambition, Hamilton was sent on full-scholarship to college on the mainland after his poetry was published in a local newspaper. Not yet thirty, Hamilton quit his job as General Washington’s senior advisor during the Revolutionary War so that he could see combat. Hamilton, together with Madison, was a prime mover behind the summoning of the Constitutional Convention, and the chief non-judicial interpreter of the Constitution through his authorship and editing of the The Federalist. As the first Secretary of the Treasury, Hamilton laid the foundations for the nation’s financial system through charter of the first federal bank and the assumption of the states’ war debt by the federal government.

The new version takes small missteps. Hamilton was not actually orphaned until near the end of his life, when his father died on a small island in the Caribbean never having reconciled with his son. The description of Hamilton as part of Washington's "family" sounds strange to me, although Washington did in some ways take on the role of surrogate parent to Hamilton, and Hamilton's abrupt resignation to serve in combat does, in some ways, give the feel of teenage rebellion. Also, the "Federalist Papers" were published as "The Federalist," although that name for those documents is common enough so that I would not call it incorrect. More substantively, I wouldn't have mentioned Aaron Burr by name out of principle, although Hamilton's early death in a duel is a relevant fact that I had omitted from my version.

If you're interested in the early history of the United States, and in one of the most inspiring personal biographies from that period, then please read Ron Chernow's Alexander Hamilton, which was the ultimate impetus for the replacement of this note for the portrait.

When Choice Architects Turn Evil?

From the Food Educate blog:

One of the most important pieces of information in a nutrition label is the serving size. Many people look at the calorie count, and are happy to see low numbers. But what they don’t notice is that they are consuming twice or more than the stated serving size. Which means twice the calories, twice the fat and sodium, etc.. (but on the bright side – also twice the minerals & vitamins.

See earlier post on choice architecture here.