His Prices Are Crazy

Hewlett-Packard recently wrote down 5 billion of a 10 billion dollar purchase of the British Company Autonomy. This was just one quarter after writing off 11 billion for the purchase of EDS. Both EDS and Autonomy are computer science service companies. In the case of EDS it looks like a case of overpaying, but in Autonomy there may have been fraud: 

HP said on Tuesday it discovered “serious accounting improprieties” and “a willful effort by Autonomy to mislead shareholders,” after a whistleblower came forward following the ouster of Autonomy’s then-chief executive, Mike Lynch, in May.

Naturally HP stock is at a 10 year low. This might not affect you or me directly, but if, or as, more and more of these examples become known, it will cause trouble in the economy.  

How common are these kind of irregularities?

I never lived in the North East, so I never had a chance to shop at Crazy Eddies—known for their “crazy” commercials. “Eddie” was even crazier that the casual observer would have thought. The entire company was based on fraud. The CFO (Chief Financial Officer) and a convicted felon says that fraud is easier today than in the 80’s. He seemed almost envious of modern CFOs. Sam Antar is interviewed by Lauren Lyster on Capital Account: