Tuesday, September 30, 2008

Reader's Digest Covers Its Ears

I, like the Dow Jones average, stupidly assumed the House would pass that bailout. Now I’m mad. I can overlook the fact that my kids’ college savings are melting faster than this town in Alaska, but knowing I wasted several hours reading a 110-page bill and drafting a blog post about it has jacked my Outrage Index up to Lou Dobbs levels.

This, BTW, is not that blog post.

If the House of Representatives can afford to take a day off from fretting about financial Armageddon, surely Proxyland can too. So this seems like a good time to post about a random SEC filing.

Apparently, talk of increased regulation is bad news for Reader’s Digest Association. According to its 10-K, filed yesterday, the mere utterance of the R-word threatens the firm's financial health:

"Our results could... be adversely affected because of public statements or actions by market participants, government officials and others who may be advocates of increased regulation, regulatory scrutiny or litigation. "

Given the number of lips now flapping on these particular subjects, poor Reader’s Digest could be in for some rough months. Fortunately private investors acquired the company last year, so the rest of us can’t further screw up our equity portfolios by investing in it.

OK, here comes a confession of ignorance. The sentence quoted above comes from a paragraph in the MD&A that seems somehow to relate to the performance of Standard & Poor’s. Despite applying my finely honed seat-of-the-pants research techniques, I still can’t figure out what on earth S & P, a McGraw-Hill subsidiary, is doing in this Reader's Digest 10-K.

The world is so confusing lately, and not just to Sarah Palin.

Image source: nbc.com

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