QUARTERLY EARNINGS OBSESSION
LED TO WALL STREET AND WASHINGTON CORRUPTION

From a Boston Globe book review of Alex Berenson's The Number:

The ''number'' of the title is earnings per share. Berenson documents how a ludicrous obsession with this one facet of corporate existence drove some executives to cook the books and inflate their quarterly earnings. Companies shouldn't ignore the number. Berenson cites Japan, once a model for its patient philosophy of investing for the long haul. Yet the Japanese economy has been in a coma for 10 years. ''Japanese companies don't have to worry about profits,'' he writes, ''so they avoid making difficult decisions to fire workers or close stores and factories.''

But in the 1990s, US markets went to the other extreme, not only demanding that short-term earnings always rise, rise, rise, but that the rise beat the predictions of Wall Street analysts. The analysts, unfortunately, dispensed harebrained advice that bore little resemblance to market reality. And they are not the most culpable in the depressingly expansive rogues' gallery in ''The Number.'' Jousting for that distinction are crooked executives, enablers in the accounting profession, and the politicians who neutered the Securities and Exchange Commission, starving the agency for resources it needed to keep the markets honest.

For more tales of capitalism's depravity, click here.

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$