Inflating the SAT Scores for Rankings and Hoping No One Notices

Since 2005, Claremont McKenna, ranked #9 on U.S. News & World Report’s best liberal arts colleges in the country, has been lopping on a few points here and there to its entering students’ average SAT score before reporting those numbers to U.S. News & World report and rating organizations such as the Princeton Review. For example, in 2010, its combined median score was reported as 1410, rather than its actual 1400. And its 75th percentile was reported at 1510, when it was, in reality, 1480.

Oops! Turns out the academic world is darn near as competitive as Wall Street when it comes to rankings and ratings. In fact, so competitive are those Continue reading

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Cooking the Books for Advertising Dollars

Careful viewers might have noticed. During the last week of 2011, they were not watching “Good Morning America.” Nay, nay. They were watching “Good Morning Amer.” “Good Morning Amer” is a special program and would not be counted in the national Nielsen ratings. The last week of the year also happens to be the lowest rated of the year in terms of viewership. If you can knock that week out of your ratings mix, well, Continue reading

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“I was a coward. Later on I was greedy, regrettably. I was embarrassed and he signed my paycheck.”

James Davis, former CFO at R. Allen Stanford Co., in answering the question of a prosecutor in the federal fraud case against Allen Stanford, as to why he continued to work for Allen Stanford when he knew that the company was engaged in fraud to lure investors.

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“That’s a lot of money, dude.”

A supervisor of a Credit Suisse trader balking in response to the trader’s suggestion that the company should come clean and reflect the true value of the firm’s mortgage bonds.

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“I did this because I wanted to remain in good favor with my boss, Kareem Serageldin, and enhance my job performance.”

David Higgs, a former Credit Suisse investment banker who entered a guilty plea to criminal charges regarding his inflation of mortgage bond prices during the 2007-2008 decline in the market.

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Only Off By 13 Seconds – Principled Morton Thiokol/NASA Engineer Roger Boisjoly Dies

Roger Boisjoly was the engineer employed by Morton Thiokol, the company responsible for making the rocket boosters for the NASA Challenger launches. In January 1986, when NASA was faced with the decision of whether to postpone the launch of the Challenger (the one with teacher Christa McAuliffe aboard) yet a third time. The problem was that Florida was experiencing freezing temperatures, and Mr. Boisjoly had been studying the effect of freezing temperatures on the o-rings in the boosters. During a teleconference call between Morton Thiokol engineers and NASA, Mr. Boisjoly showed NASA executives photos of the damage cold temperatures did to the boosters and other Challenger shuttles. “How the hell can you ignore that?” was his question to the managers Continue reading

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Another Tantrum — Susan G. Komen Foundation and Planned Parenthood

Under internal foundation rules, the Susan G. Komen Foundation can no longer fund organizations that are under investigation. Such a rule is not unusual for charitable foundations. It just doesn’t advance causes or reputations much when you are throwing money at potential felons. Because Planned Parenthood is under congressional investigation, the Komen Foundation pulled its $700,000 annual donations to the group. There was resulting hoopla and grousing, “Grant- making decisions are not about politics,” say those who protest. Actually, here’s the deal. Those who run foundations are in charge of their money. Continue reading

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Stunning Contrasts – What We Miss When We Don’t Help

In a seminar the Barometer was conducting, a participant indicated that he was carrying the guilt from something he had done last year. On his way to an important meeting, he saw a woman with four small children along the side of the road trying to flag down a car to help her with her broken down vehicle. He said he did not stop to help because of time demands. He also said that he has felt guilty ever since.

On the same day as the seminar, the Barometer was at a tiny post office in a rural town. The agenda was mailing a package of laundry back home from a too-long road trip. The elderly woman at the counter ahead of the Barometer was trying to do a “Return to Sender” on a package because she said she did not think she had ordered the book in the package. The postal clerk explained that once you have opened the package the “Return to Sender” option is no longer available. The clerk explained to her that she could package it up and resend it. “Could I do it some way Continue reading

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Methinks Greenlight Doth Protest Too Much – Einhorn and Punch Taverns

The pattern is always the same. Bright young star, brilliant career, and then the edges begin to fray a bit. David Einhorn, the head of hedge fund, Greenlight Capital, got his first whiff of fraying last week. Mixed metaphors aside, the Barometer senses hubris overtaking reason.

Mr. Einhorn held a one-hour conference call with investors, media, etc. to explain how the British regulators, with whom he had just settled an insider trading case for £7.2 million (about $11 million), were out to lunch. The fine was settlement for civil charges related to Greenlight’s sale of shares in Punch Taverns immediately following an Einhorn conference call with management Continue reading

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“The louder he talked of his honor, the faster we counted our spoons.”

Ralph Waldo Emerson on those who tout their ethics. Remember, Lloyd Blankfein has reminded us about Goldman’s role in society, “We are doing God’s work here.” The Barometer wonders if God is aware of his agent’s claimed apparent authority.

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Ethics Tantrums

Ethics tantrums are on the rise, and they are troublesome. Ethics tantrums are the fits folks throw when they have an ideological bone to pick with an individual, a business, an industry, a state. . . Examples? James Lileks describes one beautifully: An employee at a design company begged his boss to “dump” a pesticide client, a client that the employee deemed to be of dubious ethics because, well, you know, pesticides and oil and all. Petrophobia is a crippling psychological impairment these days. The boss, having that bottom-line thing going on, refused, so the employee fixed them all: He did a “shoddy job” on the pesticide company’s design work. One imagines the cockroaches had the incorrect number of legs in the graphics or some such entomological faux pas. There you have it, right from the revenge is the best ethical tactic when you disagree with someone’s views, product, political leanings, etc.

There are two others from Ariel Kaminer’s New York Times, “The Ethicist.” An employee of a small start-up company supports the Occupy Wall Street movement but has come to realize that his employer’s start-up is financed primarily by one of Wall Street’s biggest companies. He wishes to know if he should resign immediately. By all means, quit your job and begin a search to find a company that has not been touched by a Wall Street company. He might join with the petrophobic to pool resources to see if they can find a company that does not have ties to oil in some way.
Then there was the grandma who did not want to take her granddaughter to a local production of The Nutcracker because she learned that David Koch’s foundation was one of the donors for the production. Mercy, you would not want your grandchildren exposed to culture when you have no idea where the funds used have been. That’s showing those Koch brothers!

Be prepared for the Super Bowl ads because the tantrums have already begun. A greyhound protection group is fixin’ to boycott Skechers because its Super Bowl ad shows a dog walking around a track in four tiny, red Skechers shoes. Are they protesting the indignity of a bulldog being forced to wear shoes? Nay, they are protesting the fact that the dog is walking on a track where greyhounds run and are allegedly mistreated. The Barometer knows that she would have recognized that track instantly and been nauseous at the thought of a company using such a backdrop to sell dog shoes? Skechers?

The mental gymnastics tantrumites go through atop their high horses are a wonder to behold. A recent photo in the Wall Street Journal showed the U.S. Park Police tracing an extension cord in the Washington, D.C. McPherson Square Occupy folks because the police discovered that the crowd had spliced wires Continue reading

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“Say you were standing with one foot in the oven and one foot in an ice bucket. According to the percentage people, you should be perfectly comfortable.”

Bobby Bragan, Atlanta Braves manager on the stats theory behind Moneyball. It’s a great deal like the reasoning of white-collar criminals — “I am doing the right thing all but 5% of the time.” The problem is that the 5% usually involves fraud.

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“From my personal political standpoint, I wish people got paid less. But my guiding star is not my political belief.”

Alan Johnson, owner of Johnson Associates, a financial compensation specialty firm with clients such as Credit Suisse and the late Lehman Brothers. No, one’s beliefs have no place as a guiding star.

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Levi’s 501 Jeans, Currency, and Customs

The Barometer was in a long and slow-moving line at the U.S. Post Office. A very pleasant woman in line, who was attempting to return items her guests from Norway had left at her home, struck up a conversation. How the guests from Norway loved to shop, said she. After all, current conversion rates put $1.00 USD at 5.96 krone. For example, one of this delightful woman’s guests had managed, with coupon savings, to score several pairs of Levi 501 jeans for $30 each at JC Penney’s. Back in the homeland, her young guest would have had to pay the equivalent of $110 for such a pair of jeans. Then came the remarkable disclosure, “Of course, they took all the tags off and just packed the jeans in their suitcases as if they were clothes they brought with them to the United States. Customs Continue reading

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