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今天收到法学院一封信，说我的奖学金是从Covington & Burling捐的钱里来的。不知道若是搞诉讼的老爷爷在天上知道奖学金给我一个一年只上商法的人的话，会不会不爽。

教secured transactions的老爷爷教这门课可能40年了。今天讲人的有法律意义的名字是什么的时候提到他很多名字。Andrew Lee, Andrew L., Andy。还改过名字。原来他出生的时候父母一直期待是个女孩，名字、房间都是为女孩准备的。他出生了，父母完全不知所措。正名就取了Baby Boy。

If you get warm and fuzzy after reconciling a statement of cash flow with the income statement, you know you are destined to be an accounting professor.

My accounting professor has taught statement of cash flows problems for almost 40 years.  He still gets warm feelings when the net cash flow works out.

Other goodies from class:

1. CIMITYM—cash is more important than your mom.  This is what he teaches corporate executives that pay more than $60k for a crash course in business at Stanford.

2. When you throw away the doughnut, you throw away the hole.  When you sell something, you lose the depreciation.

3. There is only one joke in accounting.  It is the answer to the question what are the only numbers on a balance sheet that have no uncertainty?

According to Iris, that is what I have become after writing my third and last exam on the third day of examiniation period.

When I spotted Autumn at Langdell, she had a book open in front of her, but her mind was on something else.  She was focused on feeding her fish in a computer game.  Click.  Click.  Her mouth was shut and her eyes looked at the screen blankly.  Finally, she spotted me and showed an embarrassed smile.

“Autumn, that looks like a really stupid game.”

“Hmm, yeah.  Dragon Warrior, why do I feel the lights here are dimmer than the lights in my office?”

“Because you are not sitting directly in front of a lamp.  You can move to the seat on your right.”

“Hmm.”

She looked at the lamp intently, grabbed its base with her small hands, and tried to pull it toward her.

“What are you doing?  The lamp is fixed to the table.”

“Yeah.  Hmm.”

Studying during holiday time makes people crazy.  Pairing up with Autumn lessens the impact somewhat.  But I hope next year will be different.

Spring course registration is almost done.  Professor Warren, who seemed like a very kind and caring person, gave me permission to take Taxation and Corporate Tax in the same term.  Because he’s an early riser, once I file his permissions, I will look forward to having 8:20 classes Monday to Friday.

The benefit of separating research and investment banking is clear:  it avoids the conflict of interest problem.  But as this article in the New York Times suggest, unintended consequences really should raise questions:

It may be true that analysts now put a lot more sell ratings on stocks than they used to, clearly a result of Mr. Spitzer’s settlement. But sell ratings are only a small part of the story. Analysts were never supposed to be just stock pickers. Ask any big institutional investor about what makes good research analysts and the answer is rarely the buy, sell or hold ratings. It is the information they can provide, the details they model and understanding the nuance of the executives. Those aspects of research don’t always end up in reports, but that’s what separates the good analysts from the not-so-good.

The second problem — which is an even bigger one — is that it is hard to find good research on small companies. All the focus has moved to large companies where the big money is sloshing around. And that makes being a small public company a very difficult task, since nobody’s paying any attention to them.

On ratings agencies’ current underrating: “Our role is to get down the hill after the battle and shoot the wounded.”

Q: Don’t you wish everyone couldd be home owners?  A: “Yes, I also wish I could eat a lot and not gain weight.”

Criticizing withdrawing rental assistance after 5 years:  similar to Marie Antoinette — let people who cannot afford rent to become homeowners.

On CDS:  the analogy is writing life insurance on vampiers.  Then vampiers started to die.

On attractiveness of high-risk investments:  “If something’s growing like a weed, it’s probably a weed.”

On Fannie/Freddie: quoting Warren Buffet, “When the tide goes out, you see who’s been swimming naked.”

M&A is in.  Tax is in.  The Negotiations Workshop is out.

The Workshop is said to be one of the best courses at the law school so it pained me to drop it.  But, the better thing to do right now is probablly to take several tough, graded courses.  WIth essentially a deep-in-the-money put option, I welcome tough courses.

I’m again thinking about doing a semester abroad in Tokyo.  It will have to be in the spring of 2010 so that I can be here for fall recruiting.  But it will be a fantastic opportunity to learn and prefect my Japanese.

In the 1990’s, auditing was about making clients happy and winning consulting contracts. In response, the FASB, the standard setter in the United States, sent auditing satisfaction surveys to CFOs at corporations. The theory was that auditors should not make people happy. Happy CFOs raised red flags.

Of course no such surveys are needed now. After the demise of Arthur Anderson and Sarbanes Oxley, auditors went to the other extreme so as to cover their butts to the greatest extent possible. There are probably no happy CFOs anymore.