Soundings (7/12/05)

Guests: Randy Carroll, Bob Truner, Dave Bradley, Brian Cartwright, Marcia Papetti, Tim Correll, Gary Lindberg (Cy's brother), Melanie Merz (our club's ambassadorial candidate from WWU).

The membership committe and the board have both approved proposals for two people to become members of the club:
1) Stephanie Sadler, principal at St. Paul Espicopal School;
2) John Hulbert, financial consultant at Smith Barney.
Please report to Frank Zerline or Bill Unrein if you have comments or concerns.

Bucks in Bay
Orphalee - sad bucks for the passing Dick Metcalf and his role as a mentor to her;
Cy Lindberg - brother visiting from MN and a birthday;
Bob Rice - for passing of Dick Metcalf;
Stowe Talbot - for memory of Dick Metcalf as a friend and confidant to 3 generations of Talbots;
Robin Schmidt - "Youth of the Year" presentation at an upcoming Mariners Game with Lynn T;
Tim Jorgenson - became a grandfather;
Bill Geyer - to Dick as the ultimate Rotarian, and for finally closing on all 9 of his lots; Art - upcoming house-painting project Interfaith Coalition about Aug 10, more details soon;
Tonja - Back from DC with family, 4th of July on the Mall unforgettable!
Bob Moles - for Dick Metcalf, who never said a negative word about anyone;
Harold Scott - his father, now 85, bought a 30-ft sailboat.
Mimi- for Dick as friend to the Brooks family;
Bryant E - 36th birthday;
Lynn Templeton - for golfing with Cy, Hardy and Carol; they are to golf what heavy metal is to music;
Stan Dyer - update on Joel's wife who is home now, prayers for her recovery;
Dennis Archer - for memory of Dick Metcalf, who could also be very stubborn at times!

Sergeant-at-Arms - Pete Rittmueller
Front tables must be full, Bob Newell hole-in-one, golfers who have not had a hole-in-one, Rotary Convention next year in Sweden and Denmark, Dennis for Patti, everyone not wearing shorts, All board members who did not attend Induction, Mimi for lost propeller dry dock drydock.

Program - Orphalee introduced Michael Thomsett, author of financial books such as "Stock Profits: Getting to the Core". Lived in Bellingham for many years, now resides in Port Townsend.

Thomsett described how many blue chip companies have artificially inflated their incomes (by including future accounts receivables, omitting employee stock option expenses, and even reporting estimated investment income for pension assets). Why do companies get away with this? One reason is that the GAAP system allow aggressive interpretations of the numbers on the part of our publicly listed corporations. These flaws have enabled many companies to overstate sales and net earnings and even to deceive stockholders. He shows that applying "core earnings adjustments" to these companies will reveal a much more accurate financial picture.

European companies are forced to adhere to much more conservative financial reporting rules than the US. And ironically, even companies on the Chinese stock exchanges do a much better job of having "transparency" in their financial statements (because they state their earning in several different formats). The US and GAAP needs to require much better reporting standards for publicly traded companies here. Also, companies like Ford, GM and several major airlines need to deal with their unfunded financial liabilities (pension plans) - and the promises they have made to their employees which they cannot possibly keep. These impending problems are not currently shown on their financial statements.

Respectfully submitted, Stowe