| A.
R. Kakhsaz Company
an accountancy corporation
Member
American Institute of
Certified Public Accountants
International associates:
Tavana & Co.
Chartered Accountants
Toronto, Canada
Tel.416-229-2221
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America's credit rating of AAA
was announced to be in jeopardy
by Standard & Poor's in it's first
warning in 70 years because of
the county's public debts. The
news was not taken so seriously
by financial markets. Share prices
lurched downwards but soon
stabilized. Bond yields actually
declined. S & P didn't lower the
top rating of the U.S., it assigned it
a negative outlook-- a threat that if
debt remains on its present
course, a downgrade will ensue.
It puts the chances at one in three.
Changes in ratings are usually
lagging indicators. Moody's
stripped Japan of its AAA rating in
1998. S & P followed in 2001.
Further downgrades have come
since. But despite the rich world's
heaviest debt burden, Japan still
borrows at rock-bottom rates,
thanks to deflation and loyalty of its
savers. True, America depends
more than Japan on foreign
lenders. But it is not, as some
claim, a few steps behind
Greece on the road to fiscal ruin.
Greece has a greater debt burden,
a history of default and
book-cooking, and no control over
the currency in which it borrows.
America has stable, transparent
institutions and issues the most
dominant reserve currency. Most
investors care less about
America's credit rating than about
its low underlying inflation, loose
monetary policy and oddly weak
economic growth. They also believe
that its policy makers will eventually
find the political will to bring the
government's deficit under control.
Haven't they always?
According to World Bank, in
2010, public debt exceeded 100% of
GDP in many rich countries. In
Britain, for instance, it was four times
its GDP at the end of 2010.
My mechanic told me,
"I couldn't repair your brakes, so I
made your horn louder."
For more of the Generalist,
please visit ARKCPACOM.
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the Generalist, a
one-page monthly
publication of the accounting firm of
A. R. Kakhsaz Company, is in its 17th
year of providing information, presented
fairly and accurately, from sources we
can depend upon and trust.
British-based luxury cars:
Rolls Royce has a luxurious finish,
refined ride and an effortless
acceleration. It sold 2,711 last
year and 1,002 in 2009. That's
more than double the previous
high in 2008 since BMW took over
the company seven years ago.
In late 2009 Rolls launched a new
"entry level" model, Ghost, with a
huge engine and imposing
presence of its big brother, the
phantom, priced at $312,000.
Ghost has attracted a new set of
motorists. 80% of its buyers have
never owned a marque before.
One in ten Ghosts are sold to
women. From Beijing to
Bangalore the new Asian rich are
snapping them up. Sales in
China, now Roll's second biggest
market, after the U.S., surged by
600% and in India by 400%. Other
than interior wood and leather, the
engine and other parts and all of
the technology come from
Germany. In 2010, Bentley's
global sales grew by 11%, to more
than 5,000 cars. Bentley is owned
by Volks-Wagon. The Kuwaiti
consortium that owns Aston
Martin, which makes cheaper cars,
also expects business to pick up.
It plans to expand production and
last year opened a huge
showroom in Beijing.
Don't judge people by their
relatives!
The winner's edge is not a
gifted birth, a high IQ, or in talent.
The winner's edge is all in the
attitude, not aptitude. Attitude is
the criterion for success.
We see more in numbers
than just numbers...
Ali R. Kakhsaz
www.arkcpa.com
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