Friday, March 30, 2018

Five Topics

Whenever someone asks “How are you doing?” If they know me they will know, stay away from those five topics. These five are currently on my mind and beware you will get an ear full.

1). The state of sports – Tiger is a prima donna; Division I college athletic administration is a disaster; No matter how slow, I still love to watch baseball; Red Wings miss the playoffs, so what, hockey is still the best sport; Golf, frustrating but a necessary evil.

2). Business management 101 – Don’t pass the buck.

3). Family – I wish I could see them all every day; It is not what we have in life, but who we have in our life that matters; I do not like to see any one in my family sad.

4). Higher Education - One of the unique features of an institution of higher education is that it is not run according to the traditional corporate management top-down model.  Critical to understanding how a college or university operates is to grasp the concept of shared governance. According to the American Association of University Professors (AAUP), governance of higher education institutions traditionally has been a responsibility shared by faculty, administrators, and trustees. Sure, and I am going to win the $502 million Mega Million Lottery this Friday evening.

5). Teaching – Students get it.

COLLEGE CHRONICLES - One of the most important charts about the economy the last ten years:

TAX TIME - Need some help this tax season? RR goes over whether a Roth or pre-tax 401(k) is right for you.

1. Taxes – pay them now or pay them later?

Both Roth and pre-tax contributions offer the benefit of tax-sheltered growth while you’re working. When you contribute with pre-tax dollars, qualified withdrawals in retirement are taxed as ordinary income. By contrast, Roth contributions invest post-tax dollars, meaning qualified withdrawals come out tax free.

There are calculators that can help you determine the tradeoffs—check to see if your employer offers one on your plan’s website. But one of the most important variables is your estimated tax rate during retirement. If you think your tax rate will be lower in retirement than during your working years, it may make sense to go with a pre-tax contribution.

Alternatively, you might choose the Roth option if you expect your savings to generate a higher income in retirement than you currently take home. And remember, the total amount you withdraw in retirement will likely be greater than any amount you contributed, given the power of compounding returns.

2. Will your choice impact how much you save?

The choice between a Roth or pre-tax contribution will make a difference in your take home pay. All else being equal, when you make a Roth contribution, your take home pay will be lower than the same contribution made with pre-tax dollars. If a larger paycheck today will encourage you to save more than you would otherwise, you may be better off sticking with a pre-tax contribution.

A recent study from the Harvard Business School, however, shows that most people contribute the same amount to a 401(k) regardless of which contribution type they make. This is likely because most of us invest based on a fixed percentage of our pay (such as 10%), rather than by trying to optimize both our take home pay and our retirement savings.

3. How important is future tax flexibility?

Perhaps the best choice you can make is to not pick one over the other, especially since future tax rates are hard to predict. If your employer offers both options, you can always divide your contributions between Roth and pre-tax. That can give you some tax benefit today while enabling you to diversify your potential sources of income—including how much is subject to tax—when you’re retired. Many financial planners refer to this as “tax diversification” and, like investment diversification, can pay dividends today and down the road.

Please note that regardless of which path you choose, any eligible employer match may be contributed pre-tax. Make sure to reach out your employer or recordkeeper for specific plan details.

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Lara Logan (47) Greenwich, CT.; Henry Paulson (72) Chicago, IL.

WHAT IS ON YOUR PHONE? – The author of this Blog was recently asked what is on his phone?

Favorite Instagram photo filter: None. Never use them.

Favorite emoji: 😎

Craziest place you’ve left your phone: Women’s wash room, don’t tell my wife! Seriously, I loaned it to a student to call her Mom for a ride, she left it in the wash room.

Alarm settings: 5:30 a.m.

Number of contacts in phone: 905

Favorite podcast: “Fresh Air” from WHYY, the Peabody Award-winning weekday magazine of contemporary arts and issues, is one of public radio's most popular programs. Hosted by Terry Gross, the show features intimate conversations with today's biggest luminaries.

Most-surprising app you depend on: SimplyRain for sleep. The app is just rain sounds, white noise that I fall asleep to almost every night. Silly, but it works.

At what battery percentage do you feel compelled to charge your phone? 20 to 30 percent.

Are there times when you try to stay off your phone entirely? I try to adhere to the 45-minute rule – when you wake up, wait at least 45 minutes to check your phone, and at night, take your last look at least 45 minutes before you go to sleep.

What is your phone wallpaper? 

THE END OF THE TECH BOOM? - Investors, always willing to believe in technology companies, spent the last three years piling into their shares with abandon. Now the intellectual underpinnings of that rally are being tested.

Exhibit A: Facebook, down 20 percent from its recent high.

Exhibit B: Nvidia, off 12 percent from its recent high.

Exhibit C: Tesla, not a tech stock but in the FANG+ (technology) index.

Concerns about Tesla’s ability to fund itself can also be seen in the trading of its debt.

Tesla can’t simply cut spending to solve its cash challenge if it hopes to ramp up production. The company has racked up about $10 billion in long-term debt and has $23 billion in total liabilities. To survive long term, Tesla needs to stop over promising and to scale back its ambitions to goals it actually can achieve. Right now, though, it just needs more money.

After the Uber incident in Arizona, those companies may take a more realistic look at what they have to spend to create a technology that is efficient and safe, and conclude that they have to pull out of the race or pare back. Users of social media and regulators may prevent social media companies from sharing so much of their data with advertisers, and that could restrain revenue growth.

And if the passion for two or three big tech companies wanes, the cooling may spread.

MARKET WEEK – Investors predicting an imminent boom in U.S. capital spending may be getting ahead of themselves.

Many economists have said that strong corporate earnings, borrowing costs that remain at historically low levels and the U.S. tax-code overhaul should encourage companies to invest more in growing their own businesses -- a boon for the broader economy.

Yet recent data suggest a murkier outlook for business investment in items like new machinery and vehicles. On Tuesday, for example, a survey released by the National Federation of Independent Business showed small-business owners’ plans for capital spending were unchanged in February.

This was despite an overall reading on business optimism that rose to a 35-year high. What's more, capital-spending plans remain below the level reached last summer before a string of hurricanes hit the U.S. in August and September.

“It’s very odd given that businesses are saying that they're super optimistic about growth,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “You would have thought that given all those conditions they would be rushing to invest in capital spending.”

Other data on capital spending have also sent mixed signals. A widely watched proxy for business investment--new orders for nondefense capital goods, excluding aircraft--fell in both December and January. Economists have noted that the metric tends to be volatile from month-to-month.

The outlook isn’t uniformly dour, though. The Business Roundtable CEO Economic Outlook report, a quarterly survey of CEOs of large U.S. companies, showed 68% of companies plan to increase capital investment, compared with 49% at the end of last year.

JACK ASS OF THE MONTH - Fox News host Laura Ingraham (Dartmouth ’85) taunted a Parkland shooting survivor in a Wednesday- ­morning tweet about his college applications being rejected: “David Hogg Rejected By Four Colleges To Which He Applied and whines about it. (Dinged by UCLA with a 4.1 GPA...totally predictable given acceptance rates.)"

Ingraham had faced immediate backlash over her original tweet Wednesday from those shocked by her attack on a teenager who had survived the mass shooting in Parkland, Fla. Some of them reminded Ingraham, simply, that she was a mother. Hogg’s 14-year-old sister accused the Fox News host of stooping to a “real low” to boost her ratings.

The shooting in Florida — one of several school attacks in 2018 — left 17 students and staff members dead, and it galvanized a new generation of activists, including many teenagers from Parkland.

Hogg has been one of the most vocal, speaking at the March for Our Lives rally against gun violence in Washington. Since the shooting, the teen has appeared frequently on television and rallied his growing number of Twitter followers to become civically engaged if they are frustrated with the status quo.

Within 24 hours, several companies responded — among them the pet food brand Nutrish and the home goods retailer Wayfair — announcing over Twitter and in media interviews that they would pull their ads from Ingraham’s show.

By Thursday afternoon, Ingraham apologized. “On reflection, in the spirit of Holy Week, I apologize for any upset or hurt my tweet caused him or any of the brave victims of Parkland,” she tweeted.

For this Laura Ingraham is the first Jack Ass of the Month winner for 2018, well done.

YOU CAN’T MAKE THIS UP: President Trump gave a speech in Ohio yesterday (Thursday). It was billed as remarks about his infrastructure plan. But he touched on a variety of topics that have nothing to do with the measures he's proposed:

- Advocated a war crime
- Ad-libbed major announcements about Syria and the Koreas
- Said he doesn’t know what community college is
- Mentioned Tiffany!!!
- Lied a lot
- Concluded with sitcom ratings


1). Houston Astros, will repeat as World Series Champions
2). New York Yankees – will lose to the Astros in the ALCS
3). Washington Nationals – will lose to the Astros in the World Series
4). Boston Red Sox
5). Chicago Cubs
6). Los Angeles Dodgers
7). Cleveland Indians


24). Chicago White Sox
25). Detroit Tigers
26). Atlanta Braves
27). Cincinnati Reds
28). Kansas City Royals
29). Tampa Bay Rays
30). Miami Marlins


College Hockey Pick of the Week – Thursday 4/5, 8:30 PM CT ESPN2: The National Semi-Final; University of Michigan Wolverines (22-14-3) vs. Notre Dame University Fighting Irish (27-9-2). An all Big Ten semifinal, The Irish win 5-3. Then they win the National Championship on Saturday (April 7) 4-3, over the Ohio State Buckeyes.  Season to date (11-6)

NHL Pick of the Week – Friday 3/30, 7:00 PM PT, FSW: Los Angeles Kings (42-28-7) vs. Anaheim Ducks (39-25-13), a battle for one of the final playoff spots in the Western Conference, Kings win in OT 3 – 2.  Season to date (11-3).

NBA Pick of the Week – Saturday 3/31 7:00 PM EDT, ESPN: Toronto Raptors (55-20) vs. Boston Celtics (52-23), who is the best team in the East? Tonight it is Boston, 92 – 87. Season to date (4-1)

SCIAC GAME OF THE WEEK – Baseball, Friday March 30: University of La Verne Leopards (16-9) vs. Occidental College No Football Program (14-9), a battle for first place in the SCIAC standings, La Verne win 6 – 3. Why? Three of the starters take Professor H’s Personal Finance class. They will be prepared.

Season to Date (11 - 5)

ON THIS DATE - Production started on the Ford Mustang in 1964. Introduced to the public on April 17, the first one was sold 3 days earlier to Captain Stanley Tucker of Newfoundland (pic). Car now resides in The Henry Ford Museum in Dearborn, MI.

DRIVING THE WEEKEND – The First Quarter 2018:

Until now, markets looked at President Trump, and at the tech sector, and saw good times. Now, markets are looking at Trump and tech and seeing risk.

With stock markets closed today for Good Friday, the first quarter of 2018 is in the books, with the Dow Jones Industrial Average and S&P 500 in the red for the quarter, and Facebook and Google down.

President Trump’s impulsive crashing around on issues has started to affect market psychology. The economy's fundamentals, and corporate performance, are strong. But he is the x factor.  

A tweet by Neil Irwin of the N.Y. Times Upshot captures the Street zeitgeist: "It seems like markets are settling into a new groove in which modest news creates outsized swings in prices, whether for tech stocks or companies vulnerable to a trade war. The baseline assumption that 'it will all be OK' isn’t there anymore."

Even before this week's swing by Amazon, The Economist was warning: "'Fasten your seat belts. It’s going to be a bumpy night.' Those famous lines of Bette Davis in 'All About Eve' may turn out to be the motto for the markets in 2018."

And The Wall Street Journal's Greg Ip sees a volatile new normal: "Since early February inflation, interest rates, Facebook problems, White House turnover and trade have all been blamed for investor anxiety. It may simply be that years of preternatural calm, induced by rock-bottom interest rates and symbolized by the market’s low 'fear gauge' (VIX), are over."

When the stock market was booming, Trump obsessed about it as a kind of applause meter for his policies. And Treasury Secretary Steve Mnuchin has referred to the markets as an economic report card for the administration. Rink Rats grades:

If so, I guess we'd call Q1 a gentleman's C.

Big stock takeaway from the quarter is that volatility is back, after having been absent for almost all of 2017.

Trump tweets or actual White House policy decisions seem to have much more potential to carry (at least short-term) Wall Street consequences than they did last year, when almost everything was met with a shrug and a buy.

SCIENCE - Stephen W. Hawking, the Cambridge University physicist and best-selling author who roamed the cosmos from a wheelchair, ... died earlier this month at his home in Cambridge, England. He was 76.

Michio Kaku, a professor of theoretical physics at the City University of New York: “Not since Albert Einstein has a scientist so captured the public imagination and endeared himself to tens of millions of people around the world."

"Dr. Hawking did that largely through his book 'A Brief History of Time: From the Big Bang to Black Holes,' published in 1988. It has sold more than 10 million copies and inspired a documentary film by Errol Morris. The 2014 film about his life, 'The Theory of Everything,' was nominated for several Academy Awards and Eddie Redmayne, who played Dr. Hawking, won the Oscar for best actor."

"As a graduate student in 1963, he learned he had amyotrophic lateral sclerosis, a neuromuscular wasting disease also known as Lou Gehrig’s disease. He was given only a few years to live."

Next Blog: Dear Rink Rats, Spring break.

Until next time, Adios
Claremont, California

March 30, 2018

CARTOON OF THE WEEK – Tom Cheney, The New Yorker

Monday, March 5, 2018


Our last blog was on January 22, yes January 22, I just broke one of my management rules, I have been LATE.

I preach to students, associates, managers, never be late. I have been very late.

The reasons why one is late: three - discipline, organization, awareness. I better start listening to myself.

It's March, meaning those New Year resolutions have utterly worn off and spring fever is about to set in: a good time to take inventory and manage better.

HOLLYWOODLAND -- Academy Award Winners 2018: The Complete List:

ON THIS DATE - Not exactly an uplifting anniversary, but it's now 448 years since what's believed to have been the first assassination using a firearm. (The victim, James Stewart - the first Earl of Moray, not the fictional Sen. Jefferson Smith who went to Washington - was the regent of Scotland, an illegitimate son of King James V and died after a power struggle with Mary, Queen of Scots, his half-sister.)

TELL ME SOMETHING I DON’T ALREADY KNOW - How internet usage has changed since 2000: A study from the USC Annenberg Center for the Digital Future finds that "total hours per week online has steadily increased from 9.4 to 23.6," since its first report more than 15 years ago.

MILLENIALS & MONEY - Bank of America has a new survey: Millennials are proving that they are just as good as or better than older generations when it comes to money management habits like saving and budgeting, according to the Better Money Habits® Millennial Report released ...

Millennials (ages 23 to 37) are saving (63 percent), and they are more likely to say they have a savings goal (57 percent) than members of Gen X (42 percent) and baby boomers (42 percent). ... Forty-seven percent of millennials have $15,000 or more in savings, and 16 percent have $100,000 or more in savings.

NEED A BUCK – The Treasury Department announced a hefty borrowing schedule for the next six months: During the January - March 2018 quarter, Treasury expects to borrow $441 billion in net privately-held marketable debt ... During the April - June 2018 quarter, Treasury expects to borrow $176 billion in net privately-held marketable debt, assuming an end-of-June cash balance of $360 billion. The government's borrowing needs have been rising as federal deficits have increased. The deficit for the 2017 budget year, which ended last September, totaled $665.8 billion.

The federal budget deficit is on track to blow through $1 trillion in 2019. If it does, it would be the first time since 2012 the U.S. economy will have to support a deficit so large, highlighting a basic shift for the Republican Party, which has traditionally prided itself on fiscal conservatism.

ON THIS DATE PART DEUX - It's also now been 59 years since a Texas Instruments engineer named Jack Kilby applied for a patent for "Miniaturized Electronic Circuits," also known as an integrated circuit. (Also known as a microchip.) The invention "gave rise to the information age and heralded an explosion of consumer electronics products.

VA TROUBLES - The chaos in the White House is overshadowing the chaos at Veterans Affairs — which is truly extraordinary, since what's happening at the VA right now is NUTS.

The short version: After the VA's inspector general reported that VA Secretary David Shulkin used taxpayer dollars to pay for his wife to go to Europe, the VA secretary has been telling anyone who will listen that Trump appointees in his agency are conspiring to undermine him. He started handling his own media relations because he doesn't trust the agency's communications staff. And he told Politico the White House gave him the green light to "purge" his agency (a senior White House official told me they did no such thing, and aren't letting Shulkin fire Trump appointees).

POTUS WEEK: Monday: Trump meets with Israeli Prime Minister Benjamin Netanyahu, and the president meets with U.N. Ambassador Nikki Haley. Tuesday: Trump hosts the Swedish Prime Minister Stefan Löfven. Thursday: Trump holds a Cabinet meeting. Friday: Trump meets with Defense Secretary Jim Mattis.

GOOD READ - "She Left Harvard. He Got to Stay," by Tom Bartlett and Nell Gluckman in the Chronicle of Higher Ed: "Did the university's handling of one professor's sexual-harassment complaint keep other women from coming forward for decades?"

BUSINESS STAT - India regained its status as the world’s fastest growing major economy in the October-December quarter, surpassing China for the first time in a year as government spending, manufacturing and services all picked up.

COLLEGE CHRONICLESJobs in Higher Education: Vice President for Finance and Administration - St. Lawrence University invites nominations and applications for the newly-reconfigured position of Vice President for Finance and Administration. The next Vice President must be a bold, entrepreneurial, intellectual, and collaborative leader with strong management skills and financial acumen and have the ability to reimagine the traditional structures for finance and administration at an institution of higher education.

Located in Canton, N.Y., St. Lawrence University is a coeducational, private, independent liberal arts institution of about 2,500 students. The educational opportunities at St. Lawrence inspire students and prepare them to be critical and creative thinkers, to find a compass for their lives and careers, and to pursue knowledge and understanding for the benefit of themselves, society, and the planet. Through its focus on active engagement with ideas in and beyond the classroom, a St. Lawrence education leads students to make connections that transform lives and communities, from the local to the global.

Reporting directly to President William Fox, the Vice President is the Chief Financial Officer of the University and provides strategic and operational leadership for all financial areas of university life, including the development, implementation, coordination, and oversight of new programs that will fit with the goals of strategic budgeting in diversifying revenue streams. These areas include: auxiliary enterprises, such as bookstore, hotel, and properties; enterprise risk management; current and future summer programs; and potentially additional campus services (to be determined in alignment with experience).

The Vice President’s responsibilities currently include financial planning, revenue and expenditure analysis for decision-making, development and execution of the operating and capital budget, supervision of all accounting and control, oversight of debt financing and the University’s investment portfolio, management of banking relationships and payroll, coordination with the Vice President for Community and Employee Relations of salary and benefits programs particularly in the area of health insurance and pension fund oversight, all financial audits, insurance programs, environmental health and safety, bookstore and purchasing, and enterprise risk management. The Vice President for Finance and Administration plays a central role in integrating fiscal planning with strategic program planning. The Vice President, along with a staff of approximately 35, oversees the University operating budget and endowment. As administration functions are added to the Vice President’s portfolio, the number of staff supervised by the Vice President will increase.

St. Lawrence University seeks an experienced financial professional with a record of achievement in positions of increasing scope. The ideal candidate would hold an MBA or other relevant advanced degree and would demonstrate many of the following: track record of success as a senior financial officer of a complex organization; high-level financial planning, modeling, and analytic skills; strong background in accounting, information technology, and financing capital projects and improvements; track record of excelling at making difficult, timely, and financially responsible decisions; experience with and knowledge of debt management, risk management, and financial audits; understanding of budgeting and finance models at liberal arts-based institutions; ability to effectively present complex financial information to varied audiences; appreciation for the role of shared governance, including the ability to engage with constituents in a consultative and collaborative manner; and demonstrated understanding of how sound financial and administrative management furthers the quality of education and services provided to students, faculty, staff, and other members of the University community.

The search process is currently underway and will continue until the position is filled. Nominations, inquiries, and expressions of interest should be forwarded, in confidence, to:
Susan VanGilder, Partner, Matthew Bunting, Managing Associate, Storbeck/Pimentel & Associates, LP

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Michelle Graves …famous government leader; Allison Krich … a milestone birthday; Maria Suffredini ….famous niece; Antonio Villaraigosa (65) Los Angeles, CA.;  Oprah Winfrey (64) Montecito, CA.

MARKET WEEK – The threat of a global trade war spooked stocks last week, but a market rebound on Friday illustrates how investors continue to brush off policy uncertainty to send U.S. indexes higher.

Stocks tumbled in early trading Friday as investors digested the Trump administration’s plans to introduce tariffs on foreign steel and aluminum imports. Markets had mostly recovered by the end of the day. The S&P 500 closed up 0.5% and the Dow Jones Industrial Average pared earlier losses to end down 0.3%.

Investors said that although the proposed tariffs are limited in scope, they could signal a ratcheting up in U.S. protectionism that could spark retaliation from trade partners.

European leaders Friday threatened to hit back at the U.S. with tariffs on American-made products such as Harley Davidson motorcycles and bourbon.

“Trade wars have the potential to destroy capital and punish markets,” said analysts at Voya Investment Management in a research note Friday. “It is predictable and probable that this will lower global trade and with it global growth.”

The U.S. tariffs are likely to benefit domestic aluminum and and steel producers such as Nucor Corp. and U.S. Steel Corp. but weigh on companies that use a lot of those metals, such as aviation giant Boeing Co. and carmakers like Ford Motor Co.. Those companies are are likely to face higher prices that they will either have to absorb, eating into their profitability, or pass along to consumers.

Still, many analysts saw the turmoil created by the tariffs as a chance to buy stocks at a cheaper price. A Credit Suisse report last week showed that spikes in the CBOE Volatility Index are typically followed by market strength.

Periods when the VIX rose above 25--a level the index eclipsed during intraday trading Friday--were followed by an average 6.9% return for S&P stocks in the next three months, according to Credit Suisse data.

SPORTS WORLD - Controversies big and small have taken over sports.

There’s the breaking news of the day, with the Arizona men’s basketball coach Sean Miller denying he ever talked about paying a recruit $100,000, despite a recent report saying the F.B.I. had him on tape doing so.

On Wednesday, the debate about how best to treat and prevent concussions infiltrated baseball via Yankees outfielder Clint Frazier. Feeling the effects of a concussion after twice running into the outfield wall in an exhibition game on Saturday, Frazier said he started to feel better after guzzling water on the advice of Seattle Seahawks quarterback Russell Wilson, who is in camp in pinstripes this week. It’s not clear why, or if, the water actually helped.

Of course, any talk of sports controversy these days has to include Russia. With the country’s newest Olympic medalists still basking in the glow of their success, the International Olympic Committee lifted Russia’s suspension stemming from a doping scandal. The country’s president, Vladimir V. Putin, said he wanted everyone to move on.

And no, we didn’t forget about football: N.F.L. Commissioner Roger Goodell is said to be demanding millions of dollars from Jerry Jones, the Dallas Cowboys’ owner, after Jones challenged Goodell’s new contract, and Papa John’s is football’s favorite pizza no more.

Good luck getting any extra rest before your days and nights belong to the World Cup in Russia this summer.


NHL Pick of the Week – Saturday 3/10, 7:00 PM EDT, TSN: Pittsburg Penguins (37-25-4) vs. Toronto Maple Leafs (39-21-7), Crosby v. Matthews (if he is healthy), Toronto wins 4 – 3. Season to date (10-3).

NBA Pick of the Week – Saturday 3/10 8:00 PM EDT, ABC: San Antonio Spurs (36-27) vs. Oklahoma City Thunder (37-28), Thunder over Pop’s crew, 94 – 87. Season to date (3-1)

Season to Date (6 - 3)

DRIVING THE WEEK - Internal White House war over the nature of the steel and aluminum tariffs will continue ... Senate takes up the bank regulatory reform bill on Tuesday with passage expected within a week ... Joint Economic Committee hearing on Wednesday at 2:00 p.m. featuring CEA Chair Kevin Hassett. Perhaps members will take the opportunity to ask about the tariffs.

President Trump on Monday meets with Israeli Prime Minister Benjamin Netanyahu ... ISM non-manufacturing survey at 10:00 a.m. Monday expected to drop to 58.8 from 59.6 ... February jobs report on Friday at 8:30 a.m. expected to show a gain of 200K, no change to 4.1 percent jobless rate and a 0.2 percent increase in earnings.

Next Blog: Dear Rink Rats

Until next time, Adios

Claremont, California
March 5, 2018

CARTOON OF THE WEEK – Sidney Harris, The New Yorker

Monday, January 22, 2018

Ha Ha Not So Funny

I have a friend who replies to my texts with her own humorless Ha Code.

A single “ha” conveys zero joviality. It’s basically a put-down. I write: “You really gobbled up that second dessert,” and she replies, “ha.” A double ha—“haha”—makes it seem as if she’s at least mildly amused, but she’s not. When she gets to triples and quads—“Hahahaha”—we’re into heavy sarcasm.

“Haha” and its keyboard counterparts shouldn’t be mistaken as substitutes for actual laughter. Ha Code is as empty of humor as “LOL”—which is the last thing you would say or write if you actually found yourself laughing out loud.

And what about “:)”? That’s at least a smile, right? Not really. It functions as a plea for sympathetic understanding of what might be an overly harsh communiqué. Pre-digital, when someone disagrees they used to say the meanest things to me, preceded by the phrase, “No offense, but . . .” Now, they just puts thoughts in an email with :) at the end.

Genuine laughter can’t really be written out, just as you can’t spell the sound of a sneeze, which is why writers settle for “achoo.” You could try “ah, ha,” but that’s an announcement of discovery, best delivered emphatically: “Aha!”

Is our current lifestyle slowly sapping our sense of humor? Or at least our likelihood of having a hearty, endorphin-releasing belly laugh? I picture sad souls typing “hahaha” or “LOL” while sitting alone in office cubicles, or in dreary dorm rooms, or surrounded by solemn strangers on the subway.

Life comes with its own laugh track. All you have to do is tap into it rather than type into it.

Laughter is contagious, which is why smart promoters hire a few good laughers to sit in the audience to get things rolling. It’s why TV producers use laugh tracks—“sweetening,” as it’s known—signaling viewers to stop texting long enough to laugh.

I don’t have research to back me up, but I’m convinced that the millions of people now streaming movies at home are laughing a lot less than folks in theaters.

I used to think the only people incapable of laughing out loud were TV network executives and enrollment managers. Many times I bet they sit in a room as they screened the funniest material, and they would not so much as grin. The best you’ll get from a TV exec when the lights come up is a vacant expression, an almost imperceptible elevating of one eyebrow, and the words, delivered in a monotone, “That’s funny. That’s really funny.”

I guess we all becoming TV execs or enrollment managers? :(

THE LATEST FROM SHUTDOWNVILLE - The Senate will vote at noon Monday on a bill to reopen the government through Feb. 8, though passage is not assured. Senate leaders Mitch McConnell and Chuck Schumer are continuing to negotiate on a deal to reopen the government and begin legislative work on protecting some young immigrants, but Schumer said 'we have yet to reach a path forward.' ...

Senators took a proposal to ... McConnell and ... Schumer after a 90-minute meeting Sunday afternoon. It would reopen the government through Feb. 8 and have McConnell commit on the Senate floor to holding an immigration vote before that date. McConnell and Schumer then met privately for more than 30 minutes.

Each week of shutdown would reduce real GDP growth in Q1 by 0.2pp, qoq annualized. The effects would be reversed the next quarter however. Shutdowns have also tended to have modest effects on financial markets.

Most of the notable shutdowns over the last few decades coincided with debt limit deadlines. Even so, those led to only modest and temporary declines in equities and even smaller effects in Treasury yields and the dollar. With the debt limit deadline farther away, we would expect a muted initial reaction in financial markets to a shutdown.

COLLEGE CHRONICLESThe following piece is from the Chronicle of Higher Education, January 12, 2018 –
Sometimes it takes the innocence of a child to point out the obvious, but occasionally the anger of an academic will do. This past week Christian Smith, a sociology professor at the University of Notre Dame, exclaimed that American higher education is drowning in BS. "The manure has piled up so deep," he wrote, "that I am not sure how much longer I can wade through it and retain my sanity and integrity."

Mr. Smith proceeded to list more than 20 distinct varieties of BS — academic jargon, the obsession with metrics, and the ascendant "culture of offense," to name a few — that he says are hurting higher ed and corroding society.

California State University turned away more qualified applicants than ever last year — 1 in 10 students, or 31,000 people — even though the state’s Master Plan for Higher Education says they should be admitted.

Now, as CSU prepares for disappointment at the 3 percent funding increase Gov. Jerry Brown is expected to propose this week for the university’s 2018-19 budget, university officials say that while money is critical, even a higher allocation would not immediately give the 23-campus system enough room for all the students who qualify.

“The last thing we want to do is admit students who we can’t provide with classes and services,” CSU spokesman Mike Uhlenkamp said.

Only six of the 23 CSU campuses have enough room to accommodate all qualified freshmen, while just seven can take all qualified transfer students. Meanwhile, state Education Department records show that the number of high school graduates who qualify for CSU has more than doubled in the past 20 years, to 194,689 students from 96,879. CSU applications are also on the rise.

The state’s higher education master plan directs CSU to admit the top one-third of all graduating high school seniors. But figuring out where to put everyone — and making sure they get a good education, said Uhlenkamp — is a math problem that goes beyond money and gets to where students are willing to live and how many years it takes them to graduate.”

FAIR WAGE FOR ADJUNCTS – A hot topic again these days is the impending negotiations between the City University of New York’s faculty union and administration may come down to a fundamental question: How much is adjunct labor worth?

The union’s answer is $7,000. That’s the minimum pay per three-credit course that it’s seeking for the roughly 14,000 adjuncts it represents — about double the minimum that adjuncts there now earn per course.

The current pay rate is "insulting to adjunct faculty and not commensurate with their experience," said Barbara Bowen, president of the Professional Staff Congress, which represents 30,000 faculty and staff members at CUNY. Increasing the pay for adjuncts, who teach more than half of the courses in the nation’s largest urban university system, would, she said, send an important message to students and the part-time faculty.

Efforts to win substantial pay raises for adjuncts have met with uneven success in academe. Even at CUNY, where adjuncts might celebrate workplace improvements in recent years, the union has, since 2000, repeatedly and unsuccessfully pressed for pay parity, Ms. Bowen says. This time, the union is organizing its advocacy around adjunct pay, calling it a campaign for "7K."

The union arrived at the $7,000 figure for adjuncts by reverse-engineering from the wage of a different group of contingent faculty — full-time lecturers. The salary of full-time lecturers at CUNY for a full teaching load of eight courses a year is about $60,000. A part-time adjunct teaching the same number of courses would earn only about $25,000 at the current minimum per-course rate of about $3,200.

Levels of per-course pay that are in line with what CUNY’s union is seeking have cropped up in recent years in cities with similar costs of living — but they have been at private institutions. Three years ago, Tufts University agreed to pay part-time faculty members at least $7,300 per course, and a new contract promises further pay raises.

And in New York, newly unionized adjuncts at Barnard College can now count on making $7,000 per three-credit course — a 3-percent increase. By the fall of 2021 that figure will increase to $10,000. Barnard makes a point of touting the pay on its human-resource department’s web page, calling the wages "among the best in New York City, and among elite, urban colleges and universities nationally."

Public institutions, however, have weathered years of austerity as state appropriations continue to supply less and less of their operating budgets. With such financial pressures, is the timing right for such an effort at CUNY?

CAR SALES DROP FOR FIRST TIME SINCE FINANCIAL CRISIS - The U.S. auto industry suffered its first annual sales decline since the financial crisis eight years ago, but a streak of strong profits is expected to overshadow a slowdown in dealership traffic.

Though sales fell 1.8% last year as pent-up demand declined and interest faded in sedans and compact cars, auto makers still sold 17.2 million vehicles in 2017, the first time the industry has cleared the 17-million mark three consecutive years, according to IHS Markit. Buyers took advantage of low gasoline prices and loan rates, flocking to pickups and sport utilities—a trend that delivers much higher margins to Detroit and its foreign rivals.

Vehicles now routinely sell for above $32,000, even with average incentives of $4,000 factored in, according to J.D. Power. That is 10% higher than what car buyers were dishing out when the industry’s rally began in 2010.

Still, industry executives remain concerned that last year’s decline could prove more than a modest blip.

Rising interest rates, less pent-up demand and a potential decline in the value of used cars—which buyers often trade in when buying a new vehicle—could further pressure sales. That could prompt car makers to scale back production even more and ratchet up discounts and rebates.

IHS expects sales to slip to 16.9 million vehicles this year, which is still historically strong for an industry long exposed to far more volatile boom-and-bust cycles.
GM and Ford, the two largest sellers in the U.S., are trying to manage a balancing act of maintaining strong margins while slowing production and spending big to offer bargains. GM, for instance, is offsetting incentive costs by selling a higher concentration of more-expensive models. The average price paid for a GM vehicle in December exceeded $38,000, a record for any month, the company said.

TOYOTA “WE MAKE IT EASY” - Toyota's announcement this past week of Alabama as the home for a shared factory with Mazda puts foreign car makers on pace to pass Detroit in U.S. production, per Wall Street Journal front page:

The stat: "In the first quarter of 2018, foreign makers are expected to produce 1.4 million vehicles in the U.S., projects, equaling their American rivals for the first time."

Why it matters: GM, Ford and Fiat Chrysler "are likely see their dominance in vehicle production entirely evaporate as rivals such as Toyota and Mercedes-Benz boost their American workforces and add new factories."

"Already, the Big 3 are being outsold by non-U.S. rivals, as their share of American sales dwindled to 44% in 2017."

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Nick Clooney (84) Columbus, Ohio;  Robert F. Kennedy, Jr. (64) Malibu, CA.; Jack Nicklaus (78) Palm Beach, FL.; Bill Plante (80) New York, NY.; Howard Stern (64) Darien CT.

POTUS HAPPY ANNIVERSARY - For the best commentary on President Trump’s first year in office, look no further than what people say he’s like in person. A president who is abrupt and even blunt when called for, persuadable on topics when tactfully approached, and ardently unapologetic. Year one saw an upending of foreign-policy norms, a reimagining of rules and regulations on business, roaring U.S. stock markets amid a rebound in global economic growth, and a series of initiatives on taxes and regulation welcomed by the corporate world. In the year since the president took office, Mr. Trump has shown that he simply isn’t bound by what had been seen as the previous conventions of the job. While other presidents have sought to tamp down controversy, Mr. Trump is as likely to stir it up or embrace it head-on, seeing it as a tool in effecting change. While past presidents have spoken off-the-cuff infrequently and carefully, Mr. Trump does it every day on a social-media platform never before deployed this way. While earlier presidents strained to show consistency lest they appear feckless and unprincipled, Mr. Trump shifts positions frequently and effortlessly and boasts that keeping foes guessing that way is an asset. But that attitude and governing style has yet to pan out in terms of positive public perception: He is the first president on record whose net approval rating—the percentage who approve minus those who disapprove—was in negative territory his entire first year.

MARKET WEEK - The market is floating on air right now.

The Dow Jones Industrial Average closed above 26000 for the first time ever last Wednesday. On the same day, the Nasdaq Composite passed its inflation-adjusted peak from the dot-com boom for the first time. And the S&P 500 closed above 2800, another fresh milestone in a market that's been full of them.

Despite a series of would-be landmines, like the government shutdown of this past week or the possibility of escalating tensions between North Korea and the U.S., there's very little pushing the market lower. In fact, by one measure, the last time there was this little downward pressure on the stock market was more than 50 years ago.

The economy accelerates in the U.S. and globally, corporate earnings grow for the sixth straight quarter, and rates stay low. That's all supported the stock market's rise and could continue doing so.

But it's also led to increasing talk of a so-called melt-up, in which stocks rise sharply as rapid-fire gains pull wary investors into the market. Those periods have often-times ended with sharp reversals.

As the lack of drag on the market shows, stocks are rarely as calm as they are right now. Enjoy it while it lasts.

APPLE TAX - Apple announced it would pay a one-time tax of $38 billion on its overseas cash holdings and ramp up spending in the U.S. to emphasize its contributions to the American economy and counter criticism it outsourced manufacturing to China. The tech giant said it would invest $30 billion in the country over five years. It plans to build a new campus and create more than 20,000 jobs, as well as expand investment in advanced manufacturing in the country. The tax-code overhaul signed into law late last year by President Trump included an incentive for U.S. companies to bring home offshore holdings, with companies required to pay a one-time tax of 15.5% on overseas profits held in cash and other liquid assets. Apple didn’t say how much of its $252.3 billion offshore cash pile it plans to bring home. The tax payment by the world’s most valuable company may signal a tipping point for U.S. corporate offshore cash hoards and set off a trend.

GOOD READ - - N.Y. Times Magazine (Sunday Jan. 21) cover story walks through where the cryptocurrency conversation began, and where it's going ...

"Beyond the Bitcoin Bubble ... Yes, it’s driven by greed — but the mania for cryptocurrency could wind up building something much more important than wealth," by Steven Johnson:

"Like the original internet itself, the blockchain is an idea with radical — almost communitarian — possibilities that at the same time has attracted some of the most frivolous and regressive appetites of capitalism."

"We have learned enough from this history to support the hypothesis that open works better than closed, ... But we don’t have an easy route back to the open-protocol era."

"Right now, the only real hope for a revival of the open-protocol ethos lies in the blockchain."

ADMIRED CORPORATIONS - Apple is the world's most admired company, as ranked by Fortune, for the 11th year in a row.

The editors write: "Everyone looks up to Apple. With a market value that recently sat around $900 billion, the iPhone maker is the world’s most valuable company. And for the 11th year in a row, it also ranks No. 1 on FORTUNE's annual list of corporate reputation — followed at No. 2, for a second straight year, by fellow tech giant Amazon."

"In less auspicious news, GE plunged from No. 7 to No. 30, as its stock plummeted 45% in 2017. But on the positive side, Adidas and Lockheed Martin made their debuts among the 50 All-Stars.

US 101 - This satellite image from last week shows U.S. Route 101 (the second ribbon from the ocean) after storms caused mudslides and flooding in Montecito, Calif.

L.A. Times: "As the search continued for more victims of the Montecito mudslides, officials said they hoped to have the 101 Freeway opened by today Jan. 22. "

"Officials have spent the last six days trying to remove tons of mud and debris from the roadway. ... [Last week's] heavy rains and mudslides .... left at least 20 people dead and destroyed dozens of homes."

NHL HALF YEAR REVIEW – We are half way through the 2017-18 National Hockey League season here are Rink Rats Top Five and Bottom Five teams through 42 games:

1). Tampa Bay Lightning (31-12-3) The deepest talent.
2). Las Vegas Golden Knights (30-11-4) By far the biggest surprise of the 2017-18 season, an expansion with this record, unheard of.
3). Nashville Predators (28-11-6) P.K. Subban on defense leads the way.
4). Washington Capitals (29-15-4) Always play well during the season, but wait until the Playoffs.
5). Winnipeg Jets (27-13-7) The NHL’s fastest team.

27). Detroit Red Wings (18-20-7) Time for a rebuild in Motown.
28). Vancouver Canucks (18-22-6) Injuries, injuries, and getting old.
29). Ottawa Senators (15-20-9) CBOT Ottawa is off the air.
30). Arizona Coyotes (11-28-9) Desert rats.
31). Buffalo Sabres (11-26-9) Hapless again.

OUT AND ABOUT – Congrats to Rink Rats friend Alexis Schiff (Univ. of La Verne ’17) for her good luck at the Santa Anita thoroughbred race track this past week. The $3 exacta bet proved good fortune.


NFL Football Pick of the Week – We await the Super Bowl. (Season to date 13-8).

College Football Pick of the Week – Congrats to the Alabama Crimson Tide on another National Championship and Cindy K. (Apple Valley, CA.) for winning the prestigious BCA Football Challenge.  (Season to date 11-7)

College Hockey Pick of the Week – Saturday 1/27, 7:05 PM CT HGTV: #5 University of Denver Pioneers (14-6-4) at #7 North Dakota Fighting Hawks (12-8-6). It will be chilly in Grand Forks this coming weekend as the Hawks upend the Pioneers 5 – 4.  Season to date (7-5)

NHL Pick of the Week – Thursday 1/26, 7:00 PM EDT, TSN: Winnipeg Jets (28-13-7) vs. Anaheim Ducks (22-17-9), the streaking Ducks head into the All-Star break with a win over the Jets, 3 – 2. Season to date (9-3).

NBA Pick of the Week – Saturday 1/27 10:00 PM EDT, ABC: Boston Celtics (34-13) vs. Golden State Warriors (37-10), Warriors win big 105 – 90. (season to date 2-1)

Season to Date (4 - 3)

DRIVING THE WEEK - How long will the shutdown go? ... Davos kicks off on Tuesday and Trump is scheduled to speak Thursday ... Senate Banking Committee has a nominations hearing scheduled for Tuesday at 10:00 a.m. ... Index of leading indicators Thursday at 10:00 a.m. expected to rise 0.5 percent. ...

First read on Q4 GDP on Friday at 8:30 a.m. expected to show a gain of 3.0 percent, which would give Trump bragging rights for three quarter of 3 percent growth in a row (unless it later gets revised lower).

Next Blog: Dear Rink Rats

Until next time, Adios

Claremont, California

January 22, 2018

CARTOON OF THE WEEK – Kaamran Hafeez, The New Yorker