Monday, May 15, 2017

Commencement Season

We begin our eighth year of Rink Rats, thank you for reading.

Commencement address season has, well, commenced. Every spring, on every college campus across the nation, wisdom is blooming. And the cream of these graduation speeches rises to the internet for us all to glean and enjoy.

As with TED Talks, best man toasts and eulogies, there is a structure to these short addresses because the audience is well-defined by occasion. Graduates stand at one of the greatest moments of their lives (at least up to that point). They are excited, scared, purposeful or purposeless. They need a little celebratory push out of the nest.

In old school philosophy-speak, commencement addresses fall into a category Aristotle defined as epideictic oratory: the rhetoric of ceremony in which praise or even blame is laid at our feet and guidance is given on how to move forward. In most speeches the speaker cannot relate to their audience, thus a me, myself, and I theme is central to the address.

These speeches also contain inspiration, warnings, hope, calls to action, apologies for being an unworthy and/or boring speaker, inside jokes about the school or college life in general. Most addresses seize the spirit of the occasion, which is Janus-like in its need to simultaneously look forward and backward. The moment is called graduation (signaling the completion of an era) and commencement (the beginning of one), as President Ronald Reagan explained in his 1982 address to his alma mater, Eureka College in Illinois.

Graduation is a ritual of walking through a major threshold -- simultaneously leaving one room and entering another.

"Get in your car. You don't have a map, and you don't have a destination, you just flip a coin and get on the road," encouraged political operative Mary Matalin in a tandem one-two punch of inspiration delivered with her husband, James Carville, at the University of Maryland in 1999.

Screenwriter Aaron Sorkin's highly entertaining address to the Syracuse University class of 2012 urged active citizenship because "decisions are made by those who show up." It's a sentiment echoed by historian Howard Zinn, who reminded the 2005 class of Spelman College that democracy isn't handed down from the government but from "people getting together and struggling for justice."

So Commencement season is upon us, here are some of the notable speakers this season:

Arizona State University (May 8)  - Starbucks chairman Howard Schultz

University of Southern California (May 12) - Will Ferrell

Virginia Tech (May 12) - Facebook chief operating officer Sheryl Sandberg

University of Pennsylvania (May 15) - Senator Cory Booker (D-N.J.)

U.S. Coast Guard Academy (May 17)- President Donald Trump

Skidmore College (May 20) - Oprah Winfrey

Lafayette College (May 20) - Alexander Hamilton author Ron Chernow

St. Lawrence University (May 21) – Senator Susan M. Collins ’75 (R-Maine) &  Richard Guarasci (St. Lawrence Professor 1973-1992) President Wagner College

Harvard University (May 25) - Facebook founder (and Harvard dropout) Mark Zuckerberg

Wellesley College (May 26) - Former Secretary of State Hillary Clinton

University of La Verne (May 27) – Maria Contreras-Sweet

Brooklyn College (May 30) - Senator Bernie Sanders (I-Vt.)

Massachusetts Institute of Technology (June 10) - Apple CEO Tim Cook

Dartmouth College (June 11) - CNN anchor Jake Tapper

University of California, San Diego (June 17) - Dalai Lama

CASH - So much cash is raining on some U.S.-based corporations that they are at a loss on what to do with all the money.

With the $250 billion sitting in its bank account, Apple could comfortably go out and buy Chevron, the second-largest U.S. oil company, at today’s market price without borrowing a penny. The technology giant would still have $50 billion left to buy more than 700,000 Tesla model S electric cars or about four Gerald R. Ford class aircraft carriers.

Then there’s Microsoft. The Seattle-based software maker has the second-largest stash, at $126 billion, enough to buy a $100,000 home for 1.2 million Americans.

And the blizzards of green are not limited to the tech sector.
Legendary investor Warren Buffett will preside over his annual Berkshire Hathaway shareholder meeting this weekend in Omaha — known as “Woodstock for Capitalists” — while his company sits on $86 billion in cash. That’s enough to pay for New York City’s government operations for a year.

The cash hoards are coming to the forefront as earnings season is heating up. U.S. companies are reporting mostly robust profits, and the stock market, especially technology shares, are ballooning. Some investors have cautioned that equities are frothy in light of the geopolitical risks such as North Korea and the political divide in the country.

A big part of the reason behind the rich corporate caches is taxes — or unpaid taxes. Apple, Microsoft and many other U.S.-based international companies are sitting on well more than $2 trillion in cash from untaxed overseas profits, which could be brought back to the United States to be used for investment and dividends if lawmakers lower the U.S. corporate tax rate, which at 35 percent is one of the highest in the world.

“Apple is one of the best companies in the world, and a third of their value is sitting in vaults in Switzerland and Luxembourg and Dublin,” said Timothy Loughran, a finance professor at the University of Notre Dame’s Mendoza College of Business. “Isn’t that pathetic?”

The Trump administration has promised to lower the corporate tax rate significantly. Economists and politicians on both sides of the aisle have said a lower corporate tax rate or a tax holiday that repatriates money from overseas will unleash hundreds of billions of dollars, if not trillions, in dividends and business investments in the United States.

“Companies have been accumulating cash over many years,” said David Kass, a finance professor at the University of Maryland’s Smith School of Business. “The perverse disincentives of our current corporate tax system are discouraging corporations from bringing back international profits to invest in the U.S.”

Apple chief executive Tim Cook, in an interview with The Washington Post last year, said federal and state taxes on Apple’s cash reserves, the vast majority of which is overseas, is about 40 percent. Many U.S.-based companies leave their earnings overseas rather than pay the U.S. rate.

If the corporate rate is reduced or a holiday is granted, Apple, Microsoft and others could pay a special dividend, buy back shares or both. They could also make acquisitions, although Apple has preferred to grow organically by inventing new products such as the iPhone and iPad and investing in itself.

Apple earned $45.6 billion in profit in 2016 on revenue of $215 billion. It paid a handsome dividend of $2.18, although the rise in share price has cut its yield to about 1.7 percent and made the shares much less of a bargain than they once were.

If Apple chose a special dividend, its $250 billion would cover a $48 payment on each of its 5.2 billion shares. That is highly unlikely, although some lump sum dividend is possible, and it could touch nearly every American who has a retirement plan or owns taxable mutual funds.

“What is going to happen when Apple has $1 trillion in cash?” said Loughran, pointing out that the iPhone 10 is due out this year. “It won’t be that long. What are we going to do then? The way I think about it is the treasure of America sitting in a vault in Switzerland. We created $250 billion from profits and we are not using it. This is an obvious reform that is needed.”

Kass said he expects a major return by Apple to shareholders through several vehicles, including an increase in the Apple dividend, stock buybacks and a big one-time dividend. He said it is less likely that Apple would make acquisitions, given the company’s historic aversion to them. Berkshire Hathaway has little in overseas exposure because most of its profits are made in the United States. And Buffett has been reluctant for Berkshire Hathaway to pay dividends, arguing that he can make better use of the money by finding smart investments.

“His companies are sufficiently profitable, and he is very patient, that his cash has accumulated over several years,” Kass said. “But if the corporate rate is lowered from 35 percent to 15, 20, 25, it will result in additional profits for Berkshire and just about every other American-based corporation.

“If that takes place, then Warren Buffett’s pile of cash will increase much further,” he said.

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Barb Colley …famous ex-ROC administrator; Shelly LaMotte …famous hospitality manager; Tim McGraw (50) Memphis, TN.; Robb Suffredini …famous soccer Dad.

APPLE'S COMEBACK CAMPAIGN CONTINUES - Apple Inc. extended its rebound in the latest quarter with rising profit and revenue, but reported tepid iPhone demand that adds pressure on the technology giant to deliver a hit with its new 10th anniversary handset later this year.

Profit in the three months through April 1 rose 4.9 percent to $11.03 billion - Apple's first quarterly increase in earnings in more than a year. The overall performance adds evidence that the world's most valuable company has stabilized its business after a slump in its last fiscal year, during which weak sales of its core products and rising competition sent revenue and profit tumbling.

And its dividend has surpassed Exxon's major payout: There was a time when Apple investors were loath to call it a 'dividend stock.' Now it's the biggest dividend stock there is.

Apple announced after the bell Tuesday a 10.5 percent increase in its dividend to $13.22 billion annually, surpassing Exxon Mobil's $12.77 billion payout and making it the biggest-paying dividend stock in the world. ... The giant payout increase, a luxury made possible by the tech company's now $256.8 billion cash hoard, should help cushion the blow.

Shipments of its flagship product slipped 1% from a year earlier to 50.8 million iPhones, owing partly to continued weakness in China and to customers waiting for the forthcoming phone model, which is expected in the autumn. The overall performance adds evidence that the world’s most valuable company has stabilized its business after a slump in its latest fiscal year, during which weak sales of its core products and rising competition sent revenue and profit tumbling. The latest quarter’s increase in revenue was the second in a row, following three consecutive quarterly declines.

Apple's CEO, appearing on CNBC's "Mad Money" show last Wednesday, said his company will pump $1 billion - yes, with a "b" - into a fund to invest in advanced manufacturing projects here in the U.S. There's a lot to unwind with Cook's announcement and MT breaks it down for you:

While Cook didn't frame it as a concession to Trump, the new manufacturing fund is clearly aimed at the president, who's criticized companies for making products overseas and taken repeated shots at Apple in particular for producing iPhones in China. Apple joins scores of other firms, like SoftBank, that have sought to court Trump with new investments and job creation here in the U.S. (though unlike Apple, several of the firms appear to have recycled previously made plans to allow the president to take credit.)

The $1 billion for Apple's fund will have to be borrowed, Cook told "Mad Money" host Jim Cramer, because the company is up against "bizarre" tax rates that make it extraordinarily painful to bring home the considerable profits it makes overseas. Apple and other U.S. multinationals have hoarded billions of dollars abroad, so they can avoid the 35 percent top corporate tax rate if they bring that money home. Trump has proposed requiring companies to repatriate that money at a lower, one-time tax rate.

Tesla update - A few notes on Silicon Valley electric automaker Tesla, which saw a jump in revenue but posted a first quarter net loss of $330 million.

Big picture: The loss isn't what's important, it's how Tesla navigates a slew of upcoming projects, notably the launch of the Model 3 sedan later this year.

Few expect the electric car and alternative energy company to make a profit for some time. Its future now depends on the Model 3, which unlike the Tesla Model S and Model X luxury cars is aimed at a wider consumer base, with a stated entry price of $35,000.

RISKY BUSINESS - A wave of regulations aimed at cutting risk in China’s financial system is rippling through the country’s markets and sending banks and companies scrambling for funds. During the past month, Chinese shares have fallen nearly 5%, draining almost half a trillion dollars out of the country’s markets. Bond yields have shot up to their highest levels in two years, and bond defaults hover at record levels. Investors blame the volatility on a host of measures Chinese authorities have rolled out to curb runaway debt levels, from raising the cost of short-term funds to actions that are prompting banks to unwind hidden loans and securities. The market turbulence will test Beijing’s resolve to tackle China’s snowballing debt, especially if it looks like regulators’ clampdown is jeopardizing short-term growth.

FORMER POTUS FOR RENT - Rough speaking fees for former presidents who are on the circuit:

Bill Clinton: $250,000 (raised his fee to match Hillary's when hers went up after she was SecState)
George W. Bush: $200,000
Barack Obama: $400,000

Note: These are averages — it's more if speech is overseas; less if it's local.
Bonus scoop: Michelle Obama books for $200,000.

ONE NATION UNDERWOOD: "House of Cards" Season 5 trailer ...Kevin Spacey's sinister President Frank Underwood [shares] a disturbing vision for the next six terms ... with an Underwood in the award-winning drama's fictional White House. 'The American people don't know what's best for them. I do. I know exactly what they need,' says POTUS, [drawling] to Claire (Robin Wright), his running mate in the fictional 2016 election, which will continue in the upcoming season."

They're like little children, Claire. We have to hold their sticky fingers and wipe their filthy mouths. Teach them right from wrong. Tell them what to think, and how to feel and what to want. They even need help riding their wildest dreams, crafting their worst fears. Lucky for them, they have me. They have you. Underwood 2016, 2020, 2024, 2028, 2032, 2036. One nation, Underwood.

THE LEGEND OF THE OCTOPUS - we often think about some of the history, some of the superstitions and some of the lucky charms in hockey. One such item, particular to the NHL, is the throwing of an octopus onto the ice in Detroit. A strange sports custom if ever there was one.

For the true origins of throwing octopus onto the ice we must hearken back to the age of poodle skirts and The King of Rock and Roll himself, Elvis Presley.

Back in 1952 the NHL boasted a total of six teams, and because of the league’s diminutive stature it only took a total of eight wins (two best-of-seven series) to clinch the Stanley Cup. That’s a far cry from today’s NHL, where 16 wins secures a date with Lord Stanley, but I’m sure you can imagine what those guys would have looked like — what with the primitive protection and all — if today’s grueling playoff schedule was in place back then. It would have been a massacre, and instead of being awarded a trophy teams would instead be treated to free room and board at Detroit Receiving Hospital. It give me chills just thinking about it.

But I’m getting off the subject. It took eight games to win the Cup, so when Detroit swept the Toronto Maple Leafs and the Montreal Canadiens en route to their 1952 championship two Detroit area store owners — Pete and Jerry Cusimano they were — threw the eight-tentacled beast onto the ice and the Legend of Detroit’s Lucky Octopus was born.

Of course other fans around the league have put their own spin on the octopus toss, but none ever caught on like the one born right here in Michigan. In the ’95 series between Boston and New Jersey a fan of the Bruins threw a lobster onto the ice, and in ’96 fans of the Florida Panthers took to throwing thousands of toy rats whenever the Panthers scored. Unfortunately for Panthers fans that practice was short-lived due to both the lengthy cleanup time involved as well as the Panthers eventual implosion in the Stanley Cup Finals that year. There was also supposedly a guy who smuggled a 4-foot leopard shark into the HP Pavilion during the Detroit/San Jose series in 2007, but one has to question whether or not that was an inside job. Security can’t be that lax, right?



MLB Game of the Week (May 20) – Colorado Rockies (24-15) at Cincinnati Reds (19-18), two 2017 surprising teams, Rockies win this one 6 – 3.

GS 4 SA 2

Season to Date (36 - 16)

MARKET WEEK – Big Tech" is "Our Favorite Security Blanket" for stocks: Investors are flocking to tech stocks on worries that the economy may be rolling over. And all are waiting for the new iPhone.

At times like this, investors cling to what they fear could soon become scarce — robust growth.

We think Amazon [now $961] ... could reach $1,000 by summer and $1,100 within a year, for a gain of close to 20%, which, along the way, could make Amazon founder Jeff Bezos the world's wealthiest person.

By the end of the decade, Amazon's profits will balloon ... as revenues overwhelm costs and investments. That's the tricky part for long-term investors. ... The next downturn for Amazon stock might not come when profits disappoint, but when they become too obvious.

DRIVING THE WEEK - Trump meets with Crown Prince Muhammad bin Zayid Al Nuhayyan of Abu Dhabi on Monday ... Turkish President Recep Tayyip Erdogan visits on Tuesday and Colombian President Juan Manuel Santos on Thursday. Trump departs for his first foreign trip on Friday.

Can the president, famous for his homebody ways, pull off a grueling foreign trip without any major blow-ups? (And no, this is not like jetting around to friendly mega-rallies like the campaign) ...

Treasury Secretary Steven Mnuchin testifies before Senate Banking on Thursday at 10:00 a.m. to offer a "domestic and international policy update" ... House Ways and Means Committee has a hearing Thursday at 10:00 a.m. on tax reform ... Ways and Means Committee Chair Kevin Brady will sit down for an interview with M.M. Wednesday evening in DC ... Industrial production at 9:15 a.m. Tuesday expected to rise 0.4 percent.

Next Blog: Jack Ass of the Month, Words of the Month, Dear Rink Rats.

Until next time, Adios

Claremont, California
May 15, 2017

CARTOON OF THE WEEK –The New Yorker Cover

Monday, May 1, 2017

Radio Days

I am listing to the radio more these days; I find it soothing, less busy, and television programming stinks.

My Radio Day begins at 5:25 a.m. – NPR Morning Edition: yes NPR can at times be a tad to the left in political commentary, I find the morning news and stories informative.

6:30 a.m. – 8:30 a.m. – I listen to KUSC 91.5 with Dennis Bartel, a wonderful and entertaining time of the day for radio. The classical music is a nice escape from freeway traffic.

Noon – 3:00 p.m. – It is sports talk time with Christopher Russo, Sirius satellite radio channel 82, the “Mad Dog” has by far the best sports talk. Where most sports talk shows concentrate on the main sport of the day: NBA, NFL, that’s about it. Mr. Russo talks about golf, tennis, hockey, good books, as well as the main sports like MLB, NFL, and NBA.

3:00 – 6:00 p.m. – We end our radio day with KJAZZ 88.1, the Steve Tyrell show at 5:00 p.m. is great cocktail hour listening. The jazz and blues offer a nice end of the day atmosphere at the end of a hectic day.

A great radio channel to listen while traveling on long road trips is Sirius Satellite channel 148, Classic Radio. Half hour segments of great shows from the 1940’s and 50’s like Jack Benny, Bing Crosby, Bob Hope, The Shadow, Sam Spade: big time old school and it is wonderful.


Winning confirmation of Justice Gorsuch: Trump did it fast, with little drama and huge consequence. The win tipped the Court, invigorated conservatives, and bought him credibility with the establishment. It's the president's one achievement so far that will outlast him, regardless of what else unfolds.

Pro-business executive orders and regulatory changes: Nothing lifts a presidency (or increases the chance of reelection) more than a rising economy. Trump's early pro-business rhetoric and assault on regulations has boosted many industries. And the market "Trump bump" has given business a new spring in its step.

Encouraging CEOs to think more systematically about American jobs: Businesses talk openly about trying to "bait" a positive tweet from Trump (or insulate themselves from assault) by announcing factory openings or job expansions. These overtures aren't always all that they seem: Some were already in the pipeline, or may never come to fruition. But he has forced huge companies to reckon with the issue.

Operation Normal I: Installing experienced national-security and economic teams, obviating the fears of some Republicans that a Trump Cabinet would have a bit of a clown-car aura.

Operation Normal II: Post-Flynn, establishing a national-security decision-making process that has produced well-executed policies that have been regarded as sensible by mainstream Republicans. This includes the Syria strike, the embrace of NATO and the China state visit.


No significant new laws: He has full Republican control of Washington — and little to show for it. In retrospect, some White House aides think they screwed up by rushing into health care, and wish they had plunged into tax reform or an infrastructure package.

Little personal growth in office: His loose style, resistance to structure and amorphous views (and loyalties) leave White House aides insecure, and create internal inefficiencies and blind spots. This chaos contributed to the health-care debacle, provoking weeks of public butt-covering and finger-pointing. To this day, many aides tell us the West Wing reality is even worse than is publicly portrayed.

Failure to articulate a theory of the case, foreign or domestic: International allies and Congressional Republicans are left uncertain of what he believes, and opponents have an opening to define the vacuum on their terms.

Inability to get over it: The president hasn't kicked any of his bad campaign habits, all of which complicate governance — score-settling, name-calling, reckless tweeting, petty grievances, and unnecessary shots at allies and others he will one day need to succeed.

Resistance to reaching out to the 54% of 2016 voters who voted for someone else: Trump's low approval ratings make it harder for Democratic leaders on the Hill to make deals with him. Ditto his continued incitement of the Democratic base.

POTUS PLAN B? - President Trump brought his chaos-and-loyalty theory of management into the White House, relying on competing factions, balanced by trusted family members, with himself perched atop as the gut-instinct decider. He now realizes this approach has flopped, and feels baffled and paralyzed by how to fix it.

The chaos dimension has created far more chaos than anticipated. Come nightfall, Trump is often on the phone with billionaire, decades-long friends, commiserating and critiquing his own staff. His most important advisers are often working the phone themselves, trashing colleagues and either spreading or beating down rumors of turmoil and imminent changes.

This has created a toxic culture of intense suspicion and insecurity. The drama is worse than what you read.

POTUS WEEK -  MONDAY: The president will sign a "Law Day" proclamation, drop by a meeting of the Independent Community Bankers Association and have lunch with VP Mike Pence, Secretary of State Rex Tillerson and Defense Secretary Jim Mattis. He's also meeting privately with Tillerson.

TUESDAY: The president will present the Commander in Chief Trophy to the Air Force Academy.

WEDNESDAY: Palestinian President Mahmoud Abbas will be at the White House.

THURSDAY: Trump will return to New York for the first time in his presidency, and will give 
"remarks commemorating the 75th Anniversary of the Battle of the Coral Sea.

SOMETHING TO WATCH -- Will Trump Release the Missing JFK Files? Unless the president intervenes, we'll soon know more secrets about the Kennedy assassination. The nation's conspiracy-theorist-in-chief is facing a momentous decision. Will President Donald Trump allow the public to see a trove of thousands of long-secret government files about the event that, more than any other in modern American history, has fueled conspiracy theories - the 1963 assassination of President John F. Kennedy? The answer must come within months. And, according to a new timeline offered by the National Archives, it could come within weeks. Under the deadline set by a 1992 law, Trump has six months left to decide whether he will block the release of an estimated 3,600 files related to the assassination that are still under seal at the Archives.

WHERE EAGLES DARE - Air Force launches test missile off Central California coast to show nuclear deterrent capability: An unarmed intercontinental ballistic missile was launched just after midnight Wednesday April 26 from Vandenberg Air Force Base as part of an operational test to show the country's nuclear deterrent capability, according to the U.S. Air Force.


Purdue University, a flagship public institution in Indiana, is jumping into online education by buying for-profit Kaplan University with the aim of creating a new, public online university. The highly unusual acquisition will extend Purdue’s reach to more working adults while building an additional revenue stream at a time when state funding is uncertain. Purdue President Mitch Daniels said the school wanted to stay true to its land-grant mission of educating as many people as possible, but he recognized it couldn’t build an online presence alone. The venture highlights the shifting higher-education market as public funding declines, tuitions rise and college students grow older, busier and more indebted. Purdue said it plans to acquire Kaplan University’s 32,000 students, 3,000 employees and 15 bricks-and-mortar campuses and learning centers from Graham Holdings, which will maintain Kaplan’s international, professional and test-prep businesses.

TOP ALUMNI NETWORKS - College Rank, a website dedicated to evaluating and ranking college programs and experiences, has released its list of the Top 25 Best College Alumni Networks:

1). Colgate University
2). Stanford University
3). Gettysburg College
4). Texas A&M University
5). Virginia Polytechnic & State University

Notables: 12) St. Lawrence University
                    16). Claremont-McKenna College

Two words: “Hoot Owl”.

CAREER SERVICES 101 – Advice for new college graduates: The first would be to treat everybody with respect. The second thing is that it’s not a race. You cannot be CEO overnight. It takes a long time and part of that journey is fun. You have to enjoy the ride.

So don’t be aggressive. You can be assertive, but if you’re overly aggressive, you’re going to ruin your opportunities. Sometimes you have to let the organization pull you.

Some of the best jobs were given to me that I didn’t even realize were coming. Some of the worst jobs I’ve had were when I pushed for them, and I discovered that I wasn’t ready for the job.

FUTURE VALUE - This chart explains why Tesla's stock price is entering insane territory: With a total value of $48 billion, versus $51 billion for GM, Tesla is still considered by Wall Street the number two US automaker — Ford is at $45 billion.

The takeaway: When it comes to the whole massive-market-cap-thing, however, we have been reminded that Tesla sells a remarkably small number of vehicles, relative to the traditional US Big Three: GM, Ford, and Fiat Chrysler Automobiles.

Get smart fast: Tesla bulls argue that Elon Musk's enterprise will be legitimately bigger than GM's and Ford's in the future because electric transportation will displace gas-powered mobility over the next few decades and Tesla has the best brand and largest head start.

Why it matters: A market cap at Tesla's level signals an immense level of investor confidence in Tesla's future execution.

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Chris Krich ...famous golf swing and leader; Daniel Day-Lewis (60) Travis City, Michigan; Al Pacino (77) Southampton, N.Y.; Jerry Seinfeld (63) Manhattan, N.Y.

HISTORY IN PICTURES - Ralph Lincoln: 11th Generation Lincoln (creepy).

A SHULTZ HOUR - When George Shultz was secretary of state in the 1980s, he liked to carve out one hour each week for quiet reflection. He sat down in his office with a pad of paper and pen, closed the door and told his secretary to interrupt him only if one of two people called: "My wife or the president," Shultz recalled.

Shultz, who's now 96, says that his hour of solitude was the only way he could find time to think about the strategic aspects of his job. ... And the only way to do great work, in any field, is to find time to consider the larger questions.

THE SUMMER WHITE HOUSE -- Goodbye, Mar-a-Lago, hello, Bedminster: President Donald Trump's repeated weekend jaunts away from Washington have caused nonstop headaches for his South Florida neighbors this winter. But once his exclusive seaside retreat at Mar-a-Lago closes for the season, Trump is expected to shift his weekend plans north, to his Trump National Golf Club in Bedminster, New Jersey - and bring with him all the chaos that comes with being a preferred presidential destination.

RINK RATS AT THE MOVIES - A surprisingly fascinating documentary, "Obit," which last week began a two-week run in New York, calls artful death notices "a once-only chance to make the dead live again.

A review in the N.Y. Times, "Commemorating the Dead With Humanity and Delicacy": "We keep nervous, vigilant watch over our mortality and an expedient means for us to mark time is to keep up on who among the prominent, or even casually known, has checked out for good."

"'Obit' shapes the tension and tedium of the writing process itself into engaging narrative drama as it lets us watch the veteran writer Bruce Weber assemble a 2014 obituary of William P. Wilson, a media consultant who provided vital cosmetic and staging tips to the 1960 Democratic presidential candidate John F. Kennedy before his first televised debate with Richard M. Nixon."

See the trailer. ...  @OBITthefilm

BASEBALL PAYROLLS - The Los Angeles Dodgers topped the major leagues for the fourth straight Opening Day but dropped to $225 million, according to a study by The Associated Press. That’s the Dodgers’ lowest payroll since 2013.

Detroit Tigers are second at $199.75 million and the New York Yankees, in the midst of a turn toward youth, third at $195 million. The Yankees had not been outside the top two since 1993, and their Opening-Day payroll had not dropped this low since 2007, according to the AP’s calculations. New York topped Opening-Day payrolls from 1999-2013 before falling behind the Dodgers each year since 2014.

KEEPING SCORE -  World Golf Rankings as of April 27, 2017...

This week / Last week / End 2016 / End 2015
# 1 / 1/ 3 / 8 Dustin Johnson, USA
# 2 / 2 / 2 / 3 Rory McIlroy, N. Ireland
# 3 / 2 / 1 / 2 Jason Day, Australia
# 4 / 4 / 6 / 15 Hideki Matsuyama, Japan
# 5/ 5 / 5/ 1 Jordan Spieth, USA




MLB Game of the Week (May 6) – Houston Astros (16-9) at Los Angeles Angels (14-13), top two teams in the American League West, Angels win 5 – 4.

SCIAC Game of the Week (May 5) – SCIAC Softball tournament, round 1: Chapman University Panthers (20-18) at University of La Verne Leopards (27-11), regular season champs La Verne prevails 6 – 4.

Season to Date (30 - 16)

MARKET WEEK – On the first day of May today, the stock market is coming off strong monthly gains. In fact, the Dow and S&P were higher for the fifth month out six in April. The Nasdaq logged its sixth consecutive monthly advance.

Investors are hoping the old Wall Street cliche "sell in May and go away" won't apply this year. In fact, the Dow, S&P 500, and Nasdaq have not fallen in May since 2012.

In advance of Friday's March jobs report, the new month kicks off with March personal income and spending at 8:30 a.m. ET. The ISM's April manufacturing index and the government's March construction spending are out at 10 a.m. ET.

The Fed holds its two-day May policy meeting starting tomorrow. The market does not expect an interest rate hike this month, but the probability for a move at the June meeting is about 63 percent.

DRIVING THE WEEK - Treasury Secretary Steve Mnuchin speaks this morning at Milken at 10:45 a.m. EST ... Trump drops by the ICBA meeting today at 11:00 a.m. ... Palestinian President Mahmoud Abbas visits the White House on Wednesday ... Trump returns to New York for the first time in his presidency on Thursday and will give "remarks commemorating the 75thAnniversary of the Battle of the Coral Sea."

House Ways and Means Committee Republicans today continue their two-day policy meeting in the Longworth House office building on Capitol Hill on tax reform ... Senate Banking has a hearing Tuesday at 10:00 a.m. on "Examining the U.S.-EU Covered Agreements" ... Senate Budget Committee has a hearing at 10:30 a.m. on Wednesday on the economy ... House Financial Services expected to mark-up the CHOICE Act on Tuesday ...

FOMC announcement Wednesday at 2:00 p.m. not expected to include any changes ... April jobs report Friday at 8:30 a.m. expected to show a gain of 190K with unemployment at 4.6 percent and wages up 0.3 percent .

Next Blog: Jack Ass of the Month, Words of the Month, Dear Rink Rats.

Until next time, Adios

Claremont, California

May 1, 2017

CARTOON OF THE WEEK –Paul Noth, The New Yorker

Monday, April 17, 2017

Tax Season

We are back, enough of this spring break stuff – time to get back to what we like to do best…Rink Rats. We start off our spring season with what else? Tax Time.

On this date almost all of us have filed (except yours truly), but I have found when one tax year is complete and filed, now is the best time to prepare for the next. You have all your information and you have already completed one quarter of the current year.

Here are a few tips to help you with retirement tax planning 2017 and beyond.

A Slightly Different Tax Deadline for 2017

Did you know that you get 3 extra days for taxes this year? Duh!  This year April 15 is a Saturday and the following Monday is a holiday in Washington D.C.  So, tax day falls on Tuesday, April 18, 2017. That’s the deadline for filing taxes on income earned in 2016.

Are You Older than 70 1/2 and Still Working? Do a Reverse Rollover…

According to Pew Research, Americans over 70 are working at higher rates than ever before.  If this is you, then you might benefit from a reverse rollover.
A reverse rollover — transferring funds from an IRA into your company 401k or 403b program — is an interesting tax strategy if you:

Are over 70 1/2 and have money in an IRA account that will be subject to Required Minimum Distributions

Do not NEED or want to withdraw funds from your IRA accounts
Have access to a 401k or 403b program where you are currently working
Learn more about other ways to reduce the impact of RMDs.

Have Income?  Make it Nontaxable

If you are not yet retired, you certainly have income from work.  Already retired?  You may have taxable income from withdrawals, passive investments and more.
No matter your retirement status, retirement tax planning often means keeping your taxable income under certain thresholds.  To do this, you can take “deductions.”  Deductions are a way to turn taxable income into nontaxable income.

Here are a few ways to make your retirement income nontaxable:

Add to Retirement Savings: So long as your income is below a certain threshold, any money you put into a 401k, 403b or IRA (a traditional IRA, not a Roth IRA) will not be taxed.  For 2017, you can contribute up to

$18,000 into a 401(k) or up to $5,500 into an IRA

If you’re aged 50 or older, the maximums go up to $24,000 and $6,500, respectively.
Put Money in a Health Savings Account (HSA): Funding healthcare is expensive.  However, you can make your spending a little more efficient by utilizing an HSA.  Money you put in an HSA is deductible up to $3,400 for individuals and $6,750 for families in 2017.  Besides the savings being non taxable, distributions from the HSA are also tax free when they are used to pay medical expenses.

The One Advantage of Debt: If you itemize your deductions, then the interest you pay on some debts —  mortgages, student loans and more — is deductible.
The One Advantage of State Taxes: Like debt, state and local taxes can be deducted if you itemize.

Give a Little, Get a Little: Charitable contributions of up to 50% of your adjusted gross income are also deductible if you itemize and give to a qualified charity. Your donation can be in the form of money or property.

Watch Out for Lump Sum Benefits

If you are planning on getting a lump sum payment from a pension or other source, you could be facing a big tax headache.  The company paying your benefit is required — by law — to withhold 20% of the money for taxes.  (You can likely recover the taxes, but it is complicated and the lump sum distribution can trigger all kind of annoyances and the very real possibility of penalties.)
You may be able to avoid the problem if you ask your employer to deposit your pension directly into a rollover IRA.  The check can not be made out to you, it must be transferred directly into the IRA account.

Stay Flexible

After a couple of decades of working, you will most likely have several different account types, which may include a brokerage account, a traditional tax-deferred account like an Independent Retirement Account (IRA) or a 401(k) and a Roth IRA in which you can withdraw tax-free, explains Pamela Kornblatt, president of Tax Strategist, LTD, based in New York City.
“Conventional wisdom holds that you should start by drawing on the taxable assets and then move next to the tax deferred vehicles, saving the Roth, which is tax-free, for last,” Kornblatt says. “However it may not necessarily be advantageous to strictly follow this order, and it is in fact ideal to keep assets in each type of account to be able to tap into them throughout your lifetime.”
It’s a good idea to make sure you maintain assets in each of the three types of accounts, Kornblatt explains. “This allows for added flexibility to both help lower your overall tax burden and also spread taxes out over time so you don’t have to pay them all out at once,” she says.

Roth Conversions

There are two types of IRAs and 401ks — traditional accounts and Roth accounts.
In a traditional retirement account, you save the money tax free and then pay taxes when you withdraw the money.

In a Roth account, you pay taxes when you save the money and withdrawals are tax free.
You can rollover from one kind of account to the other and doing so can help you save on taxes.  When to do a conversion will depend on your current and future tax bracket, your time horizon, your estate plan, whether or not you can afford to pay taxes on a conversion and more.

Just Retired? Retiring Soon? You Need to Take More Control Over Taxes

A lot of retirees pay their taxes quarterly. When you leave the workforce, you may have to estimate your income and pay quarterly taxes ahead of the April deadline when most American have to file. This is because you are no longer paying federal taxes as you would while you are still in the workforce, which is typically taken right out of your paycheck.

Once you start tapping into your retirement accounts, Social Security benefits or pension, you will have to start submitting your estimated payments. You won’t have to pay estimated taxes on a quarterly basis if you opt to have taxes withheld from these income sources.

Working for Yourself?  Try This

Many retirees start their own businesses.  If this is you, did you know that you can deduct the premiums you pay for Medicare Part B and Part D plus the costs of supplemental Medicare or Medicare Advantage?

Be Mindful of Fees

Every investment firm wants to extract some of your money, and they have various means of getting to it, some with the small print, others with front or back loads, and the majority with an annual take on either returns or total assets or both.
As you move money around to try to avoid taxes, pay attention to these potential fees.  For many, this is more important than seeking lower taxes.

Consider Your Overall Retirement Plan as Well as Your Estate Plan

While minimizing your taxes this year and next is useful, you also want to think long term.
Estate Planning: If you plan on leaving any kind of estate, you will want to make sure you are taking advantage of the many different strategies that can preserve your wealth, reduce the tax burden on your heirs and strengthen your overall finances.

CPAs, financial advisors and lawyers can all help you strengthen your estate plan in a way that reduces your and your family’s tax burden. Above all else find an advisor you can trust.

Retirement Planning: Minimizing how much you spend on taxes is only one aspect of your retirement financial plan.  Taxes are annoying, but it is important for you to evaluate all aspects of your saving, spending and earning.

Consider using a retirement calculator that helps you plan for all aspects of your retirement.  Figure out what you want to spend for retirement happiness, how those expenses will change overtime and then find the best retirement strategies for making your dreams come true.

THE ROAD AHEAD FOR TRUMP - It doesn't get much easier after the health care failure. A potential shutdown looms on April 29th - Trump's 100th day in office. Senate Majority Leader Mitch McConnell on Sunday said he was confident the GOP could craft a deal to bring enough Democrats along in the Senate. But fights loom in both chambers over President Trump's proposed border wall, Planned Parenthood funding and military spending, to name just a few.

ELECTRIC SHOCK - Tesla Inc., the upstart Silicon Valley electric-car maker run by Elon Musk, has overtaken Ford Motor Co., the automotive pioneer that is exactly 100 years older, as the second-largest U.S. auto maker by stock-market value.

Market caps: GM $51.2 billion ... Tesla: $48.7 billion ... Ford: $45.5 billion.

THE NEXT GENERATION OF KENNEDYS - Three family members seem poised to step up on the national stage — with Trump as their foil.

Chris Kennedy — the eighth of Robert and Ethel Kennedy's 11 children, a Democrat running for governor in his adopted Illinois next year — is in "the vanguard of a Kennedy family comeback in American politics.

His cousin Ted Kennedy Jr., son of the late Massachusetts senator, is mulling his own 2018 gubernatorial run in Connecticut, where he's a member of the state Senate.

Then there's Joe Kennedy III, the third-term Massachusetts congressman, grabbing the national spotlight to help defeat Trump's health care plan — prompting big questions about his next move.

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Warren Beatty (80) Beverly Hills, CA., Gene Hasse …famous ruler of the clan, Norma Torres (52) Pomona, CA.

COLLEGE CHRONICLES - Outlook for Higher Education: Nonprofit higher education as a sector looks somewhat promising, at least through the lens of credit analysis. That’s because many colleges are beginning to meet challenges to their bottom lines with a more strategic approach, said Jessica Matsumori, a senior director and sector lead with S&P Global Ratings, a bond-rating agency.

In the past, many institutions tried to compete with their peers by doing the same thing as they did but doing it better, she said. More colleges these days have responded to competitive pressures by evaluating what unique programs or qualities they can offer, then making specific strategic moves to specialize, and enhance, their appeal to prospective students.

The increased nimbleness of some colleges has been aided by the decline in the number of tenured faculty members, which allows some institutions more adaptability to modify their offerings and to save money on salary and benefits. But colleges must perform “a balancing act,” regarding tenure from a financial standpoint, Ms. Matsumori said. Without it, they may not be able to recruit the faculty members they want.

STUDENT DEBT - Since 2010, when the government took over student lending, direct government lending to students has gone from approximately $200 billion to more than $900 billion – creating ... a population that is rightfully angry about how much money they owe.

SUNY IS FREE - State lawmakers in New York this week established a plan to provide free public-college education to middle-class residents. The Excelsior Scholarship, as the free-tuition plan is known, is to begin in the fall of 2017 for students whose families make $100,000 or less a year. By 2019 the income eligibility will increase to $125,000. There's a small catch: Students must stay in New York after graduation for as many years as they received the scholarship. Gov. Andrew M. Cuomo said on Monday that the requirement was added to ensure that students who receive the tuition dollars remain "an asset to the state."

CONSUMER BALANCE THE BUDGET - 1 in 3 Americans can't come up with $2,000. That's according to a new study released this week from The New York Fed. While 32.5% of survey respondents feel they might need $2,000 to cover an unexpected expense in the next month, almost exactly the same number, 32.8%, admit they could not come up with that sum in the next month if faced with an emergency. The financial vulnerability of Americans is a reminder that, despite historically low unemployment rates, many in the U.S. are still living paycheck to paycheck.

END OF AN ERA - Now that the Detroit Red Wings have been officially eliminated from this year’s playoffs, their glorious postseason streak has reached its conclusion. Twenty-five straight seasons of success is certainly something to celebrate. So are their four Stanley Cups and six finals appearances total since 1990 – both of which lead the NHL during that span.

Simply put, it’s the end of an era. Some argue that said era has been over since the 2009-10 season. But making the playoffs every year since has given the Red Wings a chance at yet another Stanley Cup and that certainly counts for something.

HUNTINGTON LIBRARY CHANGE - The Board of Trustees of The Huntington Library, Art Collections, and Botanical Gardens announced in an email this past week that Dr. Laura Skandera Trombley, president of The Huntington, has stepped down from her post effective immediately.

As the newest recipient of the Louis J. Budd Award for outstanding contributions in the field of Twain scholarship, Dr. Trombley will give priority to her scholarship as she immediately starts her next book-length study of Mark Twain, according to The Huntington’s Board.

“We wish Laura well in all her future endeavors and scholarship and appreciate all her fine efforts on behalf of The Huntington,” said Anne Rothenberg, chair of the Board of Trustees.

Dr. Steve Hindle, the W.M. Keck Foundation Director of Research, has been named the acting president as a search for a new president gets underway. Dr. Hindle specializes in social and economic history of early modern England, previously working at the University of Warwick where he was involved in many leadership positions. He began his role as Director of Research at The Huntington in July 2011.

Dr. Trombley will serve as an advisor to the Board of Trustees of The Huntington and has been engaged as a consultant to the Schiff Foundation and the Libra Foundation.

Dr. Trombley stepped into her role as president in July 2015, as both an admirer and frequent visitor of the grounds. As the eighth president of The Huntington, she was the first woman to lead the institution. Previously, she was president of Pitzer College in Claremont, where she is widely credited with dramatically improving the college’s standing in higher education.

Can you say “spin city.”

ESPN - Tough times at the Worldwide Leader in Sports: ESPN Has Seen the Future of TV and They're Not Really Into It"): ESPN has lost more than 12 million subscribers since 2011 ... and the viewership erosion seems to be accelerating. Last fall, ESPN lost 621,000 subscribers in a single month, the most in the company's history. ... As subscribers leave the network, and often cable altogether, ESPN is stuck with rising costs for the rights to broadcast games. Programming costs will top $8 billion in 2017.

COLLEGE HOCKEY PICK OF THE WEEK – Congratulations to the University of Denver Pioneers for winning the National Championship 3-2 over Minnesota-Duluth. Also congratulations to Red Berenson after thirty three years of coaching the University of Michigan, Mr. Berenson is retiring.     Final Season to date (9-9) …until next season.


Major League Baseball 2017 Season Picks:

American League:
East – Boston Red Sox,  Central – Cleveland Indians,  West – Houston Astros
Wild Cards – Detroit Tigers, Seattle Mariners
Detroit over Boston in the Championship Series

National League:
East – New York Metropolitans,   Central – Chicago Cubs,   West – San Francisco Giants
Wild Cards – Los Angeles Dodgers, St. Louis Cardinals
New York Mets over the Chicago Cubs in the Championship Series

World Series Champs – Detroit Tigers

Season to Date (30 - 16)

MARKET WEEK – Exchange traded funds attracted record inflows in the first three months of 2017 as investors continue to move out from traditional actively managed funds in protest against inconsistent performance and high fees.

Investors worldwide ploughed $197.3bn into ETFs between January and March, a quarterly record, according to ETFGI, a London-based consultancy. This follows 2016, when ETFs, which are famed for being low cost, gathered the highest ever annual amount of $390.4bn in new cash.

DRIVING THE WEEKEND - IMF and World Bank hold their spring meetings this week in DC ... President Trump heads to Wisconsin on Tuesday and hosts the New England Patriots (or at least most of them) at the White House on Wednesday ... Trump meets Italian PM Paolo Gentiloni at the White House on Thursday ... Special election Tuesday for a GOP House seat in Georgia with Dems hoping for a big pickoff. Republicans want to force a run-off.

Next Blog: Radio Days.

Until April 24, Adios

Claremont, California

April 17, 2017