04.24.04

New server update

Posted in Sysadmin at 10:09 pm by Craig

Ok, so since last we met our hero, the following has transpired:
  • Replacing RAM and moving it around to different slots seems to have resolved the won’t POST issue. But, the hi-lo-hi-lo warble continues. I can actually boot the box, get it all up and everything, and the warble tone just continues. Sounds like maybe a temperature alarm or something, but temps of the CPUs and all other components are just fine. Could be a case-open alarm, but not sure. Hopefully MSI will know and help me stop it
  • I’ve decided to make this a 2.6 box – and lo! Gentoo is 2.6 now, so I’m gonna do that
  • Crap. ATA Raid is not really there in 2.6 yet. Bugger. Ok, well I guess for now one of my two 160GB disks will just sit idle, and once 2.6.x support ATA RAID, I’ll do the RAID-1 then, mirroring the existing drive.
  • Gentoo’s quite cool – they have x86-64 stuff very nicely done, with 2.6 kernel and all. Quite straightforward to get things all up and going in fullblown 64 bit mode
More to follow.

04.21.04

More computer woes

Posted in Sysadmin at 10:39 pm by Craig

So, got a new power supply. Now the stupid machine won’t post. Just gives a hi-lo-hi-lo-hi-lo speaker warble. All the BIOS POST code pages I can find which list this symptom claim that it’s due to the CPU overheating, which is clearly a crock in this case. However, after hours of trying all kinds of combinations of different components, I think the problem is with the RAM. I got DDR400 RAM, since the price was the same as the slower stuff, and I figured heck, worst case I’m underclocking and it’ll work fine. Not so. Seems like RAM got all smart all of a sudden since I last bought some. After not having any luck at all on the MSI support pages, nor on the various BIOS POST debugging pages, I finally searched AMD’s website, and lo, under “recommended motherboards”, this gem:
Motherboard Notes:
  • Supports registered DDR400 memory with Opteron™ 246 models and above.
Great. I, of course, sprang only for the 244s, not 246s. So I get to make trip #3 to Fry’s tomorrow, and either *downgrade* my RAM, or upgrade my CPUs. Probably the former, since the latter costs money. Damn, but that’s annoying though. You would have thought that DDR400 RAM could just be smart and run at 333 or 200 or something. But apparently not. Well, at leasty I hope that’s the problem. We’ll see in the morning when Fry’s opens.

Building new server

Posted in Tech/Geek at 7:50 am by Craig

So, while doing some work for a client, I’ve developed a need for a PCI-X slot, which on opening my existing box it turns out I don’t have. So I figured, in for a dime, in for a dollar – I’ll just go ahead and upgrade my server. Well, actually probably keep the old one, but build a new fancier one. Might as well go 64-bit while I’m at it. Went down to Fry’s and found a nice MSI dual-opteron motherboard, with onboard dual 10/100/1000, sound, and VGA. Added 2 opterons and a couple gigs of RAM, couple HDs, and a nice quiet-looking case. Get home, and of course as usual just after Fry’s closes, I discover the first problem. In this case, everything seems to go pretty smoothly, except that they’ve once again changed the shape of the power connector that goes from the PSU that came in my case to the MB. Looks like the power connector I need from the PSU is supposed to have 24 pins (and another with 8 pins, and another with 5 pins), but the one I have is an ATX one with only 20 pins (and another with 4 pins).
Ok computer spec designing jackasses, I have a simple question: It’s fucking power. It’s the same basic voltages that it’s always been. Why the fuck do you suddenly need more pins than you did before? Assholes, now I have to go back to Fry’s and get a PSU with the right connector. The perfectly fine-working PSU that I already have just became useless. Well, unless one of my readers wants it. It’s a 420W “Silent PurePower” ATX PSU – it’s yours if you’re in the bay area and either want to pick it up from my house, or buy me lunch/dinner somewhere near me, and I can bring the PSU to the food.
Hopefully with the new PSU, there will be no additional gotchas.

04.18.04

House remodel begins tomorrow

Posted in Remodel at 4:34 pm by Craig

Ok, so yet another new category has been added. This time, it’s the house remodel. The part that starts tomorrow isn’t actually construction or anything yet – just the architect is going to begin drawing the structure of the existing house. It’s built on a core that dates from about 1927, which probably included a stable or something downstairs, and what’s now the living room, upstairs bathroom, and two bedrooms, plus probably part of the kitchen. Over the years, pieces have been added on – the master bedroom and dining room, as well as a kitchen extension, and the downstairs areas have been semi-built out as livable space. I say semi because there are some walls in odd places. To get from one side of the downstairs to the other, you have to walk through the boiler room. The bathroom is on the far side of the house from the downstairs bedroom. It’s very odd indeed.
So the basic project will be:
  • Rationalize the downstairs area
  • Move the front entrance from what was the front of the house in 1927 to what’s now the front of the house, which is more of the side of the house at the moment (but faces the driveway); probably move the carport as well to make the new front of the house more visible and elegant
  • Raise ceilings, add skylights
  • Increase the size of all the windows
  • Upgrade plumbing, electric, etc
  • New kitchen
Additionally, we might do some landscaping on the hillside above the house – introduce some terraced veggie beds, possibly a path up the hill to the fire road so one can go up there without having to battle the poison oak. There’s a gate at the top of the property, and it looks like there might be some vestiges of previous terracing under the poison oak, brambles and periwinkle, so part of this work might be done already and it might be mostly just a matter of ripping out some of the greenery. Then we might do something with the “hottub” deck too.
So anyway, the architect comes in the morning, to do a detailed drawing of the existing stuff, and to start sketching out ideas for what the new stuff might look like.
Should be fun, at least until the actual construction gets started!
The architect selection process was pretty straightforward, once we got off our butts and actually decided to get going on the project. We visited a handful of architects to browse their portofolios, and the range of skill level is quite substantial. Most, even of the more expensive architects, basically will just knock out a cookie-cutter duplicate house of whatever variety (tudor mansion, tuscan villa, french chateau, etc). All very Los Altos Hills-y. Not really our thing. But then one architect we found seemed to actually have a little more style, and seemed to try and actually do something interesting with the projects he works on. He came to our house to show us his portfolio, rather than have us come to him. Very good salemanship, plus we liked him better anyway. So we signed him up on friday last week, and he starts monday. There seem to be a couple ways architects do things in terms of contractual arrangements, etc. Stan is involved all the way through the project, doing the design and drawings, and then also helping to select a contractor, and to ensure the contractor actually builds according to the design. He works on the basis of 12% of the total project cost, which seems quite reasonable, but is another one of those odd contracts like real estate buyer’s agent contracts, where they get paid more, the more they convince you to spend – which seems like an alignment-of-interest problem. We’ll see how it goes. With buying the house, it turned out OK.
I’ll post updates on this topic from time to time, as well possibly as copies of sketches, drawings, and photos, as they become available. Actually, I didn’t check with the architect who owns the drawings he’ll be doing; the contract didn’t mention copyright of works produced, or licensing rights if he’s the one who retains copyright. Presumably it’s standard for the drawings to belong to the house, since it’d be nice for us to be able to pass them on to any buyer if we ever sell the place. Or nice for us to have them in case we do additional remodels in the future. But then you never know.

04.14.04

Expensing stock options

Posted in Politics at 3:40 pm by Craig

So I’ve been complaining privately a lot recently about the idiocy of expensing employee stock options through a company’s P&L. I thought I’d lay out my thoughts here for a wider audience, and see if anyone can explain to me why I’m thinking incorrectly on this. Here’s an extract from the FASB publication on the subject (available here):
C13. The Board reaffirmed the conclusion discussed in paragraphs 74-91 of Statement 123 that compensation cost should be recognized for employee services received in exchange for valuable equity instruments, including equity share options. That cost should be recognized as the employee services received in exchange for the instruments are used in the issuing entity’s operations. Some opponents of required recognition of compensation for equity share options assert that because an award of equity share options results in neither an outflow of assets nor the incurrence of a liability, that award should not result in a recognizable cost. However, the Board believes that an entity receives assets - employee services - in exchange for equity share options. Because an entity cannot store services, they qualify as assets only momentarily unless those services are capitalized as part of another asset (as permitted by U.S. GAAP). An entity’s use of an asset results in an expense, regardless of whether the asset is cash or another financial instrument, goods, or services.
C14. Some opponents of required cost recognition also contend that the issuance of an employee share option is a transaction directly between the recipient and the preexisting shareholders. The Board disagrees. Employees provide services to the entity - not directly to individual shareholders - as consideration for their options. Carried to its logical conclusion, that view would imply that the issuance of virtually any equity instrument for goods or services, rather than for cash or other financial instruments, should not affect the issuer’s financial statements. For example, no asset or related cost would be reported if shares of stock were issued to acquire legal or consulting services, tangible assets, or an entire business in a business combination. Moreover, it is a longestablished practice that, even if a stockholder directly pays part of an employee’s cash compensation (or other corporate expenses), the transaction and the related costs are reflected in the entity’s financial statements, together with the stockholder’s contribution to paid-in capital. To omit such costs would give a misleading picture of the entity’s financial performance. C15. To summarize, accounting for assets received (and the related expenses when consumed) has long been fundamental to the accounting for all freestanding equity instruments except one - fixed equity share options that have no intrinsic value at the grant date and are accounted for under the requirements of Opinion 25. This Statement remedies that exception.
Ok. So this is the basic explanation from the FASB as to why they think this change should be implemented. As I understand the reasoning here, although there is no outflow of assets, nor an assumed liability when an option is issued, that because something is received in exchange for the option grant, that grant should be expensed. I just don’t follow this logic. Let’s say a company issues an option to someone, but does not require services in return. That is, they issue the option, but cannot be said to be receiving an asset in exchange. Did that option “cost” the company the same as an employee option grant would? Ok, what if the company issues a grant to an employee, but that employee slacks off? Same option grant to another employee who works really hard and creates a lot of value. Both options expensed the same way? In the words of Scooby Doo: “Hrrr?”
Ok, so I don’t think the FASB argument makes any sense. But beyond that, the FASB argues that this new rule will somehow increase accounting transparency. “Hrrr?”. This rule actually serves to violate the 3 primary tenets of accounting: consistency, conservatism, and material accuracy.
  • Consistency: Options are not a cash, or cash-equivalent medium. They do not in any sense affect the trading success or failure of a business. The effect of granting options on a company is to effectively dilute existing shareholders, not to reduce earnings. Having the issuance of options appear on the P&L will mean that it will be much harder to compare results for subsequent periods to each other – a quarter in which some options are granted might actually have been “better” for the company than another quarter which had a lower option-issuance “cost”, but worse trading results.
  • Conservatism: accounting should not create complexity when there is no need to. Altering the P&L so that an investor has to manually “add back in” the “loss” attributable to issued options in order to evaluate the real trading performance of the company is perverse.
  • Material accuracy: companies will be able to manipulate their earnings by issuing or cancelling options. This accounting manipulation essentially allows a company to depress earnings (for tax reasons, or for apparent consistency) in good years by granting options, and boost earnings in bad years by cancelling options. This can be used by companies which are private, but planning to become public in the future. Let’s say my new startup issues a huge number of cancelable options now – at super-low strike price. Fast forward 4 years to IPO time. Hmm, earnings aren’t great. I know! Let’s cancel some of those low-strike price options. Ah, much better. Now let’s get that prospectus out!
C4. Before 2002, most entities chose to continue to apply the provisions of Opinion 25 rather than to adopt the fair-value-based method to account for share-based compensation arrangements with employees. The serious financial reporting failures and allegations of misconduct by executives that came to light beginning in 2001 caused the attention of investors, regulators, members of the U.S. Congress, and the media to focus on accounting and financial reporting issues. Many of the Board’s constituents who use financial information said that the failure to recognize compensation cost for most employee share options had obscured important aspects of reported performance and impaired the transparency of financial statements.
This part also makes no sense to me – yes, the public at large, and investors, are pissed that executives were awarded huge pay packages while their companies tanked (or in the case of options, they were awarded huge pay packages while their companies continued to appear to do well). But how would expensing stock options, for example in the case of Enron, have prevented what happened, or made investors any happier? The problem at Enron was out-and-out fraud, not a lack of expensing stock options. Enron could have expensed all the stock options it wanted to, and just created more fictional revenue to make up the difference. From a historical point of view, can anyone enlighten me as to how these two issues (massive fraud vs options expensing) become co-mingled? I just don’t see the connection at all. I mean not at all at all.
So – can someone explain to me why I’m wrong and the FASB is right? I’m planning on performing the equivalent of civil disobedience on this one – I simply will not allow any business which I control to implement something that to my mind is perverse and obscures the true performance of a company from the shareholders. I don’t care how angry people are that senior executives make lots of money from stock options – that’s a fundamentally different issue from the way they are accounted for from the company’s side. If you don’t like the executive compensation plans awarded to executives by boards of directors’ compensation committees then elect directors who won’t do that. Dont just arbitrarily and stupidly change the accounts.