Weak Oversight Plagues Audits of Billions in Private Assets

Having seen the way that companies with debt are calculating EBITDA and cash flow this does not come as a surprise....Aivars Lode

"Research by the government and data from the auditing industry trade group show significant flaws in audits of private organizations, particularly those done by smaller firms.

This self-policing system covers the vast majority of U.S. audits, including more than 5 million private companies, some with billions in revenue, Labor Department data show. It also affects tens of thousands of pension funds, endowments, local governments, charities and billions in government grants, according to the auditing industry trade group. Investors in these companies, pensioners, donors to charities and local taxpayers are among those who could lose if auditors fail to detect problems."
Click to read full article: Weak Oversight Plagues Audits of Billions in Private Assets

By Jean Eaglesham and Coulter Jones from Wall Street Journal

Two Worlds: So Much Prosperity, So Much Skepticism

 Don’t know what this means for the stock market... Aivars Lode

The demand for forecasts grows after a surprise. It’s quite an irony. Surprises make you feel like you’re not in control, which is when it feels best to grab the wheel with both hands, listening to those who tell you what happens next despite being blindsided by what just happened.
That’s where we are with Covid and the economy. Ten months after the surprise of our lifetimes, everyone wants a clear map of the future. Who wins? Who loses? When will travel recover? Will work be the same? Have we learned our lesson?
But the most important economic stories don’t require forecasts; they’ve already happened. And they tend to be the most overlooked, because when everyone’s focused on the future it’s easy to ignore what’s sitting right in front of us.
I want to tell you two of the biggest economic stories that aren’t getting enough attention.
One is that household finances might be in the best shape they’ve ever been in. Ever. That might sound crazy, and it’s easy to overlook because of the second story: Covid has dumped kerosene on wealth inequality in ways we’ve yet to fully grasp.

To read this interesting blog by Morgan Housel click below:

https://www.collaborativefund.com/blog/two-worlds/

How Volkswagen’s $50 Billion Plan to Beat Tesla Short-Circuited

Interesting article and points to why Tesla may end up being like Amazon ... successful and dominant.  Aivars Lode

Five years and nearly $50 billion into the auto industry’s biggest bet on electric vehicles, Volkswagen CEO Herbert Diess and his guest, Chancellor Angela Merkel, stood in anticipation as the first ID.3, Germany’s long-awaited answer to Tesla, rolled off the assembly line.

The event at the company’s flagship EV plant just over a year ago marked a “systemic shift from the combustion engine to the electric vehicle,” said Thomas Ulbrich, leader of the ID.3 effort.

The car, however, didn’t work as advertised. 

It could drive, turn corners and stop on a dime. But the fancy technology features VW had promised were either absent or broken. The company’s programmers hadn’t yet figured out how to update the car’s software remotely. Its futuristic head-up display that was supposed to flash speed, directions and other data onto the windshield didn’t function. Early owners began reporting hundreds of other software bugs.

After years of development, Volkswagen decided in June last year to delay the launch and sell the first batch of cars without a full array of software, pending a future update, which is now scheduled for mid-February. Tens of thousands of ID.3 owners will have to bring their cars in for service to have the new software installed.

“After that the software will be regularly updated over the air,” Mr. Ulbrich said in an interview.