Z is for Zero

The Hindu concept of zero, the void, the circle. Graphic from pparihar.com.

A circle is an infinite number of points all equally distant from a single center. That definition came from Euclid, a Greek, although the Greek’s didn’t use zero. Aristotle was afraid to divide by the void because it wasn’t descriptive of the real world.

The Chinese and the Sumerians used placeholders in their counting, adopting different marks for the tens and the 60s digit, since Babylonians used base 60. But they didn’t have a zero.

The Mayans had a zero–they used base 20–which allowed them to produce large astronomical calculations that generated accurate solar and lunar calendars using only sticks. But their isolation prevented trade, which limited their civilization.

The Romans had zero, of course! Nulla. The Romans had sophisticated plumbing and developed roads that lasted for millenia. But Romans disdained to use nulla in their numbering systems, so even though their business records were hierarchical and detailed, they were limited. Growth is limited if a number like 397,654 is CCCXCVMMDCLIV.

The Arabs developed zero; they developed algebra. But the Arabs learned it from the Hindus.

https://i0.wp.com/1.bp.blogspot.com/-Rn5ziNDI1kk/UN4HBQcfF8I/AAAAAAAAAII/j746CCLUC6E/s1600/indian_zero.gif?w=525
Graphic from Pparihar.com.
Continue reading “Z is for Zero”

Y is for Yield Curve

The Yield Curve is a simple idea with surprising predictive power. The Yield Curve is a magic eight ball, which tells the interpreter what they want to hear. The Curve is a bunch of numbers. The Curve tells you everything that happened, but only in retrospect.

All of the above.

Basic yield curve shapes, colotrust.com.

People really wax poetic about the yield curve. There’s one guy at NPR that goes ga-ga over the yield curve and has done podcasts on it with clock-like regularity:

GARCIA: …I got to say, it is one of my favorite indicators.
SMITH: Cardiff, you love the yield curve.
GARCIA: Very much.
SMITH: Every time we talk about the yield curve, you kind of light up. And I have no idea why this is the case.

NPR podcast, Apr 6, 2021.
Continue reading “Y is for Yield Curve”

X is for XBRL

I didn’t know anything at all about XBRL last week, but it’s making my Excel Ninja fingers twitch. For every blogger handling the “A to Z Challenge,” this is the one that really gives us nightmares–X. (They’re out there…Xena, Xolotl…) I briefly considered “X-axis,” but that’s not really accounting-related, or “eXpense,” but that’s not really an “X.” I came across this newfangled thing: XBRL. Y’all, it’s the bees knees!

XBRL: Waddizzit?

You know how financial reporting produces paper? Lots of paper? Lots and lots? The computer revolution gave companies the ability to do all their financial data collection and reporting online. Spreadsheets–primarily Excel, but also initially Lotus 1-2-3 and recently Google Sheets–revolutionized the way companies can keep track of and analyze everything.

Financial statements, thanks to GAAP (see Letters E, and G) are also fairly standardized. Assets are on the what? (See Letter “D”–left!) Even the account names on the balance sheet and income statement are pretty standardized–Current Assets, Fixed Assets, Accounts Payable, and so on. It makes it easy for accountants to find and read other people’s statements.

Yet the devil is in the details.

Continue reading “X is for XBRL”