It's great that Amazon has reported its first ever quarter's profit: that goes nicely with Intel, AMD, Sun and others all saying that rumours of absolutely horrendous figures have been grossly exaggerated. (By who, exactly? Their own financial people, briefing analysts saying 'expect the worst', last year?)
The big problem is that in the wake of Enron, there's a growing sense of mistrust of 'aggressive accounting', the sort of book-juggling that dot-coms and high-tech companies practically invented over the past febrile four years. There is an infinite morass of odd deals out there, and just standing up and saying "We're doing great!" may not cut the mustard when nobody can quite understand the books.
I predict a couple of things: there will have to be further very large adjustments of book values of many companies in the near future, and those who are bold and do it now will do the best in the long term. Otherwise, the trust will go out of the market and the auditors charged with looking after it -- after all, Andersen is identical to the other big four firms; they just happened to be holding the parcel when the music stopped. And then we really will be looking down a very long tunnel indeed.
(*) "What do you call a fear of palindromes"?
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