Monday, March 25, 2013
Warren Buffett bluntly tells shareholders ... that if he can't increase Berkshire Hathaway's intrinsic value at a faster clip than the gain in the Standard & Poor's 500 index over a long stretch, there's little point in owning Berkshire stock. A low-cost index fund would be a better investment. ... All 10 of the CEOs on our list ... meet the Buffett test. The share prices of their companies have outstripped the S&P 500's return during their tenures. Some even have better annualized numbers than Buffett, although none can match Berkshire's total gain since 1965.
--Jeff Bezos, Amazon.com, CEO since 1994. Why: He changed the way people shop and read.
--Warren Buffett, Berkshire Hathaway, CEO since 1965. Why: A brilliant value creator for almost 50 years. Buffett's creation is one of the great achievements in business history. Investors fortunate enough to have gone along for the ride have enjoyed an 8,000-fold rise in the stock price since 1965. Berkshire is now the fourth-largest company in the market, with a capitalization exceeding $250 billion.
--David Cote, Honeywell, CEO since 2002. Why: Repaired and revved up Honeywell's engine. ... For Cote, 60, a man with more than 10,000 songs on his iPod, the music never stops. Now he has become a power player in Washington, too, working to fix the nation's budget woes.
--Jamie Dimon, JPMorgan Chase, CEO since 2006. Why: Savvy leader of the world's most important bank. As the world's leading banker, Dimon is a forceful advocate for his company and much-maligned industry. He defends size, saying multinational clients need the broad array of services that only big global banks can provide.
--Larry Ellison, Oracle, CEO since 1977. Why: Brilliant deal maker: Acquisitions helped lift profit 17% last year.
--Larry Fink, BlackRock, CEO since 1988. Why: This markets maven built the world's biggest money manager. A consultant to central bankers, politicians, and other power players, he was rumored to be leaving Wall Street for the Obama administration, but that didn't happen. 'I can't think of a better place to provide advice than from my seat at BlackRock,' he says.
--Leslie Moonves, CBS, CEO since 2006. Why: Resuscitated CBS and made network TV relevant again. If someone were to pitch Moonves, 63, an idea for a winning television show based on his life, the story line might go something like this: Actor-turned-TV-executive rises to the top of a big entertainment company just when the pundits have written off traditional TV programming and news. Not only does he make good but he also makes shareholders a bundle. ... Moonves' rich pay package -- $70 million in cash, plus stock, for the four years ending in June 2017 -- has drawn criticism. 'Clearly, my board thinks I'm of value to the company,' he says.
--Alan Mulally, Ford , CEO since 2006. Why: Rescued Ford from the brink, then hit the gas pedal. Mulally took Ford from a $17 billion loss in 2006 to a $5.7 billion profit last year, without so much as a penny from Uncle Sam. Along the way, he right-sized production to a recessionary market, cut costs, and planned new vehicle models. Ford regained an investment-grade credit rating, and did we mention, it doubled its dividend? For an encore, the 67-year-old CEO must groom a successor -- the smart money's on Ford COO Mark Shields -- before retiring, likely after 2014. He also needs to lift production to meet rising U.S. demand, and reinvigorate Ford's upmarket but moribund Lincoln brand.
--Larry Page, Google, CEO since 2011. Why: Google's market value is up $100 billion on his watch. The nerd who co-founded Google 15 years ago is turning out to be far savvier than anyone gave him credit for. Page, who turns 40 on Tuesday, has ruthlessly cut Google's side projects to focus on building revenue. YouTube, thought to be folly when the company paid $1.65 billion for it in 2006, is expected to rack up $4.5 billion in sales this year, and mobile advertising via its Android operating system could bring in $6 billion. ... Expect a slick new Google phone to heat up the smartphone wars by year end.
--Fred Smith, FedEx, CEO since 1971. Why: He continues to innovate in the industry he created 42 years ago. The sluggish global economy curtailed growth in FedEx's global air network, but its ground-delivery service has taken off. ... Smith got his pilot's license at 15 and flew on reconnaissance missions in Vietnam -- and at 68, he still isn't sitting still. His latest mission: to boost pre-tax profits 55%, to a record $4.8 billion, in three years by consolidating facilities, restructuring staff, and purchasing fuel-efficient aircraft.
END OF AN ERA - Daily Variety's era ends: Its last issue printed, the Hollywood news source now focuses on its website and weekly magazine: "Leslie Moonves has had the same morning routine for [30 years]. 'The first thing I do after getting out of the shower is pick up Daily Variety and have a cup of coffee,' the CBS Corp. chief executive said. ... Daily Variety is ceasing as a print publication after almost 80 years. Tuesday's edition is its last. ... Variety is doing what all aging Hollywood stars do when they want to feel better about themselves: It's getting an expensive makeover. The website has been redesigned and is now free to access. Starting next week, a revamped" print version will come out weekly, mirroring the successful 2010 glossy conversion by Variety's rival, The Hollywood Reporter.
LEW ARRIVES IN BEIJING - "Chinese leader Xi Jinping said Beijing wants strong ties with Washington as he held talks with the U.S. Treasury secretary last week in his first meeting with a foreign official since being appointed president. ... 'I attach great importance to China's relationship with the United States,' Xi told Jack Lew in a meeting attended by diplomats and finance officials from both governments. 'We stand ready to work with the U.S. side to continue to develop this China-U.S. cooperative partnership so that we will be able to open a path of cooperation between major countries.'
"The meeting was the first high-level contact between the two governments following a monthslong hiatus during the Chinese leadership transition that began with Xi being named Communist Party leader in November. He became president last week.
Lew's department said he would raise issues including North Korea's nuclear program, Asia-Pacific security and allegations of Chinese government-sponsored cyberspying during his two-day visit. ... 'The president is firmly committed to building a relationship of growing strength,' Lew said at the meeting in the Great Hall of the People, the seat of China's ceremonial legislature in Beijing."
FARM BUBBLE SET TO BURST? - "From the potato fields of Michigan to the high prairies of Kansas, farmers are receiving record prices for their land - but economists and banking regulators warn that this boom, like so many before it, could end badly. ... In places like Waco, Neb., and Chickasaw County, Iowa, where the boom-and-bust cycle of farming reaches deep into the psyche, some families are selling the land that they have worked for generations, to cash in while they can. Behind the rush is the age-old driver of farm booms: high crop prices. Corn, in particular, has been soaring, reflecting demand overseas and, domestically, for ethanol. High prices mean good profits for farmers, and many are using their growing incomes to bid for land. Sensing opportunity, investment firms are buying, too.
"In Iowa, despite the drought last year, farmland prices have nearly doubled since 2009, to an average $8,296 an acre, far surpassing the last boom's peak in 1979. In Nebraska, the price of irrigated land has also doubled since 2009. But if the price of corn falls - and many forecasters predict it will, particularly if the ethanol boom wanes - the price of farmland will fall with it. While many farmers have borrowed little money or used cash to finance their purchases, those who have over expanded could run into trouble, leaving banks and other creditors with their bad debts."
THE NEXT CLIFF - "Senate narrowly passes first budget in four years [at 4:56 a.m. Saturday, after 20 hours and 600+ amendments]. ... Possible fight over U.S. debt ceiling looms in summer: "The budget plan passed 50-49. ... The measure, which seeks to raise nearly $1 trillion in new tax revenues by closing some tax breaks for the wealthy. ... The U.S. Treasury is expected to exhaust its borrowing capacity around late July or early August."
BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Bonnie Bedelia (65), Zbigniew Brzezinski (85), Al Gore (65), Gordie Howe (85), Jim Lovell (85), Elle Macpherson (50), Steven Tyler (65), Bob Woodward (70).
COMING OUT - WILL PORTMAN, a junior at Yale, appears today as a guest columnist in the Yale Daily News, "Coming Out": "I came to Yale as a freshman in the fall of 2010 with two big uncertainties hanging over my head: whether my dad would get elected to the Senate in November, and whether I'd ever work up the courage to come out of the closet. ... In February of freshman year, I decided to write a letter to my parents. I'd tried to come out to them in person over winter break but hadn't been able to. So I found a cubicle in Bass Library one day and went to work. Once I had something I was satisfied with, I overnighted it to my parents and awaited a response. They called as soon as they got the letter. They were surprised to learn I was gay, and full of questions, but absolutely rock-solid supportive. ... I made a list of my family and friends and went through the names, checking them off one by one as I systematically filled people in on who I really was. A phone call here, a Skype call there, a couple of meals at Skyline Chili, my favorite Cincinnati restaurant.
"The following summer , the summer of 2012, my dad was under consideration to be Gov. Romney's running mate. The rest of my family and I had given him the go-ahead to enter the vetting process. My dad told the Romney campaign that I was gay, that he and my mom were supportive and proud of their son, and that we'd be open about it on the campaign trail. When he ultimately wasn't chosen for the ticket, I was pretty relieved to have avoided the spotlight of a presidential campaign. ... I had encouraged my dad all along to change his position [on gay marriage], but it gave me pause to think that the one thing that nobody had known about me for so many years would suddenly become the one thing that everybody knew about me. ... I'm proud of my dad, not necessarily because of where he is now on marriage equality (although I'm pretty psyched about that), but because he's been thoughtful and open-minded in how he's approached the issue, and because he's shown that he's willing to take a political risk in order to take a principled stand."
WEDDING BELLS: "Once a society decides that the law must treat a group of people equally in one area of life, it becomes harder-and, eventually, impossible-to justify discriminating against them in others. ... This week, we will begin to find out whether the Justices will impede or accelerate that process. ... When Theodore B. Olson and David Boies, the lead lawyers in the Prop 8 case, filed their lawsuit, in 2009, it appeared to many informed observers that they were taking a foolhardy risk. At the time, gay-rights organizations had been following a cautious, state-by-state approach, and it seemed that an adverse decision in a major federal lawsuit could set back the cause of same-sex marriage for a generation. But, whatever the Justices do, that's not going to happen.. ... Though the battles continue, the war is over."
JACK ASS OF THE MONTH – This month’s Jack Ass award goes not to an individual but a group of individuals. Individuals who promote themselves and their particular cause at the expense of the overall team and the entity they think they represent. No names are mentioned here because all of us have to deal with these Jack Ass types every day at work, athletics, and even in relationships. These individuals are totally clueless, and represent the true meaning of being a Jack Ass.
BARACK-ETOLOGY: D'oh! The President picked New Mexico over his law alma mater, but had Belmont. So far 34-18 in the tourney, The Swami 33-19, A. Stout (Ontario, CA) an amazing 37-15.
NCAA WATCH: EAGLES SOAR - Florida Gulf Coast crushed M.M. with its dazzling win over G'Town on Friday night. But the upstart Eagles have gone on to capture American hearts, becoming the first 15th seed to make the Sweet 16, dropping San Diego State, 81-71 in circus dunking style. FGCU gets in-state rival Florida on Friday.
COLLEGE HOCKEY PICK OF THE WEEK – Friday March 29, 2:00 PM ET, ESPNU: The NCAA West Regional from beautiful Grand Rapids, Michigan has #15 Yale Bulldogs (18-12-3) vs. #2 Minnesota Golden Gophers (26-8-5). A mismatch, the Bulldogs have lost three in a row, The Gophers in a walk, Minnesota 6 Yale 2.(Season to date (9-4)
THE SWAMI’S TOP PICKS: ice – (NCAA) Gophers 6 Yale 2, hoops – NCAA Final Four: Midwest: Louisville, West: Gonzaga, South: Florida, East: Miami. ULV Burbank Campus will not make their April 2 web site opening deadline, sorry (someone should check those logos). Season to date (64-32)
NHL POWER RANKINGS – a key indicator after thirty games, who are the best and worst in the National Hockey League: (1). Chicago Black Hawks, (2). Pittsburgh Penguins, (3). Anaheim Ducks, (4). Minnesota Wild, (5). Montreal Canadiens. Bottom Two: (29). Tampa Bay Lightning, (30). Florida Panthers.
DRIVING THE WEEK - Looks like a fairly light one. Congress is gone for two weeks and the debt ceiling debate won't heat up until well after they return. House Republicans seem set on their dollar-for-dollar cuts/debt limit increase, so drama seems guaranteed. Enjoy the fiscal fight respite while it lasts. ... Markets closed in the U.S. on Friday in observance of Good Friday. Bond markets close at 2 p.m. on Thursday.
Next week; baseball season picks and On the Cheap.
Until Next Monday, Adios!
March 25, 2013
Monday, March 18, 2013
Spring Break is upon us again; visiting eastern college sport teams trying to escape winter’s last gasp, serious work on one’s golf game, March Madness picks to be made, evening walks in the desert, and alumni events. Alumni events you say, that does not sound like Spring Break activity.
You got that right. As my continuing slow transition into the world of academia progresses from the world of corporate life, I have volunteered myself to coordinating alumni events. To those who do not have any experience with academia, let me just say one word: reality. Every individual, professor, department, College, are in their own little worlds and how dare you infringe on that world and how dare you know anything about that world. Example: in the corporate world your goal is profit, efficiency, organization – not so in the academic world; where organization, communication, and efficiency are not part of the strategic puzzle. The game is turf warfare, how many dissertations you can cite, and how many free plane tickets can I get to that conference this summer.
In the corporate world one works as long as it takes to get the job done, working as a team to better the product or service. Academic world: I am a scholar, a director, a teacher of the year, a strategic thinker, you are nothing – leave me now before I snob you to death. Cost accounting, lost in the pyramids. Multitasking, what is that – two classes a week, two hours of office hours, and one committee meeting. Damn, where is Jack Welch when I need him.
So how does this writer deal with this transition into this world, with a smile on my face, an evening glass of wine (or something stronger), and the knowledge that I am helping people I truly care about; students. To receive a thank you, a smile, or a pleasant email makes it all worthwhile. Now what time is that IT/CPBMAA/RCA/FIX meeting? Where is that wine?
DEAR RINK RATS –
I live in Southern California and would welcome a spring break trip to Las Vegas. Can you suggest a different place to stay in sin city?
Ready To Party
Dear Ready To Party –
A favorite place for Rink Rats is off the strip in Summerlin, Nevada. Just fifteen minutes from the strip, no traffic, easy access to golf and hiking. We like the Red Rock Resort and Casino; 11011 W. Charleston Boulevard in Summerlin. Outstanding pool and spa, okay sports bar, wonderful restaurants especially T-Bones Steak House. Five Dollar Black Jack a plenty in the Casino. You can’t go wrong here at about half the price of the strip hotels. Mention you know Rink Rats and you will get a free towel at the pool and a slap in the face.
BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Alex Ball …belated birthday to my niece, George Benson (70), Perez Hilton (35), Holly Hunter (55), Chaka Khan (60), Bobby Orr (65), Charlie Simmer (59), Vanessa Williams (50).
MEET THE NEW POPE - "Jorge Mario Bergoglio of Argentina, a 76-year-old Jesuit intellectual, greeted the world as Pope Francis on Wednesday evening, the first pope from the Americas and the first from outside Europe in more than a millennium. The new pontiff, successor to Benedict XVI, gained the required two-thirds majority on the fifth ballot on Wednesday, a day after the 115 voting cardinals had gathered to begin their conclave. Cardinal Bergoglio had been considered a longshot for the post. ... The unexpected choice of the little-known Cardinal Bergoglio appeared to shock the crowd, which initially greeted the announcement with near silence.
"But when he finally appeared above them dressed in papal white robes and looking almost as surprised himself, the crowd roared its approval, a few blue and white Argentine flags on display. The white smoke went up at 7:06 p.m. local time. Pope Francis appeared on the balcony to the cheering crowd 76 minutes later. Speaking softly in Italian, the pope said: 'As you know, cardinals were picking a bishop for Rome. It seems like my brother cardinals have picked him from the end of the world, but here we are.' ... He will on Thursday attend a mass in the Sistine Chapel along with the college of cardinals. ... He will hold a press conference and address the world's media on Saturday, while his inauguration mass is due to take place on March 19."
POPE OF THE AMERICAS: Francis, the first Pontiff from the New World, has a lot of old problems to deal with: Bergoglio will not stray from the conservative doctrines of the rest of the Vatican. ... His lifestyle is spartan compared with that of other princes of the church. He does not live in a Cardinal's palace, and in Buenos Aires, he takes the bus ... He will deliver much-needed oxygen to parts of the Catholic empire ... [a] great burst of energy that may sweep into Latin America. Mexico and Brazil have the largest Catholic populations in the world. Colombia is not far behind. The church has grown vastly more Latino over the past hundred years. But the Catholic Church has also enjoyed a 500-year monopoly on the region. ... Now that is changing, and Roman Catholicism is losing ground to the combined forces of secularism and Pentecostal Protestantism."
CPAC STRAW POLL (2,930 voters at the Conservative Political Action Conference; 41% were students): Rand Paul 25% ... Marco Rubio 23% ... Rick Santorum 8% ... Chris Christie 7% ... Paul Ryan 6% ... Scott Walker 5% ... Ben Carson 4% ... Ted Cruz 4% ... Bobby Jindal 3% ... Sarah Palin 3% ... Jeff Rouss 1%... Other 11%.
BOOK REVIEW – “Counterfeit Kids” by Rod Baird. To read this book will make your stomach hurt. Rod Baird, who recently passed away (St. Lawrence ’76), was an English teacher at a public school, his story, anecdotes and analysis are compelling, moving and thought provoking. Mr. Baird challenges us to rethink what we are doing as parents and educators and to change. The book challenges us to look at our teaching and parenting and think about the underlying message we are giving our children about learning, responsibility and what is truly important.
LOW-INCOME STUDENTS DON'T EVEN APPLY TO TOP COLLEGES - "Most low-income students who have top test scores and grades do not even apply to the nation's best colleges, according to a new analysis of every high school student who took the SAT in a recent year. The pattern contributes to widening economic inequality and low levels of mobility in this country, economists say, because college graduates earn so much more on average than nongraduates do. Low-income students who excel in high school often do not graduate from the less selective colleges they attend.
"Only 34 percent of high-achieving high school seniors in the bottom fourth of income distribution attended any one of the country's 238 most selective colleges, according to the analysis. ... Among top students in the highest income quartile, that figure was 78 percent. The findings underscore that elite public and private colleges, despite a stated desire to recruit an economically diverse group of students, have largely failed to do so. Many top low-income students instead attend community colleges or four-year institutions closer to their homes, the study found."
WALL STREET WEEK - A controversial bailout for Cyprus is virtually guaranteeing that Wall Street's week will not get off to a positive start, with stock index futures lower following a selloff in the Asian and European markets. That follows the end of the Dow's 10-session winning streak on Friday, along with its record of not falling on any Friday during 2013.
COLLEGE HOCKEY PICK OF THE WEEK – Friday March 22, 8:00 PM ET, NESN: The Hockey East semifinal #18 Boston University Terriers (20-15-2) vs. #5 Boston College Eagles (22-10-4). The age old rivalry hits an even bigger note with the retirement of BU Coach Jack Parker after 40 years, and 41 season BC coach Jerry York sitting the game out with a detached retina. BC is on the way to another NCAA crown: BC 6 BU 3. (Season to date (9-3)
THE SWAMI’S TOP PICKS: ice – (Hockey East) BC 6 BU 3, hoops – NCAA Final Four: Midwest: Louisville, West: Gonzaga, South: Florida, East: Miami. Season to date (64-31)
SPORTS BLINK - BRACKETOLOGY - "Louisville top overall seed in NCAA tournament, good luck filling out those brackets. The No. 1 seeds are set for the NCAA tournament, but very little has gone as expected in this college basketball season. ... Louisville received the top overall seed Sunday after romping through the Big East tournament, while Kansas, Indiana and Gonzaga claimed the other No. 1 spots. Yet, considering all the upsets that have prevented anyone from establishing themselves as a clear-cut favorite, there are plenty of teams that think they can run the table.
... Louisville (29-5) certainly earned it, impressing the committee with a 10-game winning streak capped by a stunning turnaround in the final Big East championship game as we know it. ... Now, they're what passes for a favorite in this wide-open field ...
"The tournament begins Tuesday with a pair of games in Dayton, Ohio, but things really get rolling on Thursday and Friday, when 64 teams will be in action. Everyone is trying to get to Atlanta for the Final Four, which starts April 6 at the Georgia Dome."
DRIVING THE WEEK - Fed announces its latest decision on interest rates at 2 p.m. on Wednesday with no change to the $85 billion in monthly asset purchases expected. Fed Chairman Ben Bernanke gives a press conference at 2:30 p.m. and is expected to continue to strongly defend the current pace of quantitative easing and signal no end in sight. Any change to that outlook could significantly unsettle markets.
The Senate is expected to vote on a continuing resolution funding the government today or Tuesday ... Democratic Senate budget expected to reach the floor midweek and get hit with a pile of amendments ... Dems really want to get the CR and budget votes done by the weekend so Appropriations Committee Chairwoman Barbara Mikulski (D-Md.) can keep her plans to meet the new Pope this weekend.
Treasury Secretary Jack Lew departed for China on Sunday evening and arrives in Beijing on Tuesday morning local time for meetings with the new leadership and senior economic officials. Lew will focus on cybersecurity, among other topics ... President Obama meets with Irish President Enda Kenny on Tuesday as well as greets First Minister Peter Robinson and Deputy First Minister Martin McGuinness of Northern Ireland ... Obama leaves for Israel Tuesday evening and will remain there through Thursday before heading to Jordan on Friday and back to Washington on Saturday ... Vice President Joe Biden heads to Rome to lead the U.S. delegation to the Inauguration Mass celebrating the Pontificate of His Holiness Pope Francis.
Next week; Jack Ass of the Month and the baseball season is here.
Until Next Monday, Cheers!
March 18, 2013
Monday, March 11, 2013
Roughly 1.8 million nonprofit board seats need to be filled each year, but competition among retirees is only growing: ego, influence, boredom, desire to serve are the culprits.
You have just retired from the peak of your profession or so you think, and are casting about for your next act. One day an online ad attracts your attention:
HELP WANTED – Make the world a better place! Our nonprofit organization is seeking a director to fill a board vacancy. Requirements: Must attend four meetings a year. Qualifications: Impressive Job Title, contacts among the wealthy. Compensation: Zero, but maybe one or two retreats per year. Instead, you donate $100,000, plus raise another $1 million from your friends.
Interested? An increasing number of baby boomers who have left their careers and are looking for something meaningful to do; for those with a comfortable nest egg, serving on a nonprofit board (or several) seems like a natural choice to leverage a passion or skill and give back to the community.
Trouble is, lots of baby boomers have the same idea. Foundations and charities are being bombarded with requests to sign on. A Bank of America survey found that 89 percent of high-net-worth individuals volunteered with nonprofits in 2011, up 10 percent from 2009. More than 60 percent served boards of nonprofits.
To get on a board, some are hiring headhunters. But once finding the right fit can make the hassles worthwhile. Now if only I had $100,000…..
KEY MOMENT IN THE RECOVERY - The major U.S. averages are coming off their second biggest weekly gains of 2013 as the new trading week opens, with the Dow coming off yet another all-time closing high and the S&P 500 now within about 14 points of eclipsing its own record close. The Dow has more than doubled since its nadir in March 2009 and is already up 8.8 percent for 2013.
In contrast to the heady days of 2007, the record largely went uncelebrated on the floor of the [NYSE]. ... Since the financial crisis, the Federal Reserve's aggressive efforts to prop up the economy and financial markets have kept stocks moving higher in the face of a troubled global economy. ... At the same time, corporate earnings have proved resilient despite the sluggish economy. In recent months, the battered housing market also has begun to recover. The result is that investors are warming to stocks after years of skepticism."
DON'T POP THE CHAMPAGNE YET - "The market's rise from the depths of the 2008-09 financial crisis, when the Dow bottomed out around 6,500, does not necessarily reflect the experience of average Americans.
Some of the rebound can be attributed to the Federal Reserve's relentless campaign of buying less risky assets and driving investors into equity markets, the so-called sugar high effect. Corporate revenues are soaring in part because companies drove down costs and strictly limited hiring, helping explain why unemployment remains stuck near 8 percent. And many of the big blue-chip companies that make up major stock market indices draw a growing amount of their profits from outside the U.S., meaning positive developments in Europe and Asia often outweigh any negative headlines out of Washington. ... Beyond the Fed's intervention and a decoupling of U.S. stocks from the U.S. economy, there are other reasons to remain skeptical of the current run-up in stock prices. And if markets do retreat from their current highs, as some think they will, the White House warnings will seem less alarmist."
U.S. COMPANIES PILE UP CASH OFFSHORE - "U.S. companies are making record profits. And more of the money is staying offshore, and lightly taxed. A Wall Street Journal analysis of 60 big U.S. companies found that, together, they parked a total of $166 billion offshore last year. That shielded more than 40 percent of their annual profits from U.S. taxes, though it left the money off-limits for paying dividends, buying back shares or making investments in the U.S. The 60 companies were chosen for the analysis because each of them had held at least $5 billion offshore in 2011. ... The law generally allows companies to not record or pay taxes on profits earned by overseas subsidiaries if the money isn't brought back to the U.S. ... Untaxed foreign earnings are part of a contentious debate over U.S. fiscal policy and tax code. The current system attracts criticism from many points of view. Business groups want the U.S. to tax profit based on where it is generated, as many countries do, rather than globally, as the U.S. does now."
LEVIN LEAVIN' - Sen. Carl Levin (D-Mich.) said he would not run for reelection next year, giving Dems another tough seat to defend. Levin was a zealous investigator of Wall Street banks and tax avoiders as chairman of the Senate Permanent Subcommittee on Investigations. From Levin's announcement: "Years of bipartisan work by the Permanent Subcommittee on Investigations that I chair have shed light on tax avoidance schemes that are a major drain on our treasury. The huge loss of corporate tax receipts caused by the shift of U.S. corporate tax revenue to offshore tax havens is but one example of the egregious tax loopholes that we must end. Thirty of our most profitable companies paid no taxes over a recent three-year period, although they had over $150 billion in profits. Tax avoidance schemes that have no economic justification or purpose other than to avoid paying taxes may be legal, but they should not be."
TECHWATCH - "Analysis: Google's star rises as Apple fades, Google has retaken the role of superstar of the tech sector with a stunning stock rally as rival Apple flounders. Google has hit fresh all-time highs in recent weeks, and closed Friday at $831.52, capping a nearly tenfold rise from its public offering price in 2004 of $85. The stock is up about 17 percent so far in 2013. Part of the explanation comes from the rise of its Android mobile operating system, at the expense of Apple. Android is free but gives Google the opportunity to deliver more services and ads to users. ... Apple, which traded as high as $700 last year, has slumped more than 35 percent and ended Friday at $431.67. ... Google now appears poised to beat Apple to the symbolic level of a $1,000 share price ... Google is under scrutiny on privacy and monopoly grounds in Europe, and China is also concerned about Android's dominance."
BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Frank Borman (85), Michael Caine (80), Billy Crystal (65), Dana Delany (57), Lesley-Anne Down (59), Barbara Feldon (80), Ruth Bader Ginsburg (80), James Taylor (65), Myrlie Evers-Williams (80).
SPORTS BLINK - "FOX announces FOX Sports 1 network" - Release : "Set to debut on Saturday, Aug. 17, just as FOX Sports kicks off its 20th anniversary year, FS1 is available in over 90 million homes ... At the outset, FS1 boasts nearly 5,000 hours of live event, news and original programming annually. ... A robust schedule of live events forms the backbone of FOX Sports 1's programming from Day 1, with college basketball, college football, NASCAR, soccer and [Ultimate Fighting Championship] ... The schedule on Aug. 17 features live events ... including a NASCAR Camping World Truck Series race from Michigan and 'UFC on FS1 1' in prime time. In 2014, [Fox Sports Media Group]'s new rights agreement with MLB takes effect, bringing regular and postseason games to FS1. ... When FOX Sports launched in 1994, late Sunday afternoon NFL on FOX games ranked as the 26th highest-rated program on television. Today, FOX's national doubleheader games rank No. 1 for three years running. ...
"FOX Sports 1 Programming Highlights ... RUSH HOUR, hosted by Regis Philbin, ... live weekdays (5-6 p.m. ET). Originating in New York City, Regis leads ... a panel of sports professionals, celebrity guests and die-hard fans ... Following RUSH HOUR live every day is FOX FOOTBALL DAILY (6-7 p.m. ET), an extension of FOX NFL SUNDAY, the most-watched NFL pregame show for 19 straight years. FOX FOOTBALL DAILY, hosted by NFL on FOX personalities, including Terry Bradshaw, Howie Long, Jay Glazer, Gus Johnson, Erin Andrews and Mike Pereira, provides a daily dose ... from pro and collegiate football worlds. Both ... expected to premiere at launch in August."
COLLEGE HOCKEY PICK OF THE WEEK – Friday March 15, 7:35 PM CT, SciFi; WCHA begins their playoffs with The Black & Gold Michigan Tech Huskies (12-18-4) visiting the University of North Dakota we wish we could call them the Fighting Sioux (19-10-7). On paper it looks like a mismatch, but the Huskies have being playing pretty fair of late and will be a tough opponent in Grand Forks. Nevertheless, North Dakota 5 Huskies 2. (Season to date (8-3)
THE SWAMI’S TOP PICKS: ice – (WCHA) North Dakota 5 Michigan Tech 2, (NHL) Pittsburgh 5 NY Rangers 3, college baseball – (SCIAC) Pomona College 7 Ithaca College 3, hoops - (Big Ten) Michigan 57 Indiana 55. Season to date (61-31)
STAR WARS FAN ALERT - George Lucas has hired screenwriter Michael Arndt, who won an Oscar for 'Little Miss Sunshine,' to begin work on the script for 'Episode VII.' ... Lucas started talking to members of the original Star Wars cast, such as Mark Hamill, Carrie Fisher, and Harrison Ford, about appearing in the films. In June 2012, he called [ABC CEO Bob] Iger. ... Asked whether members of the original 'Star Wars' cast will appear in 'Episode VII,' ... Lucas says, "We had already signed Mark and Carrie and Harrison -- or we were pretty much in final stages of negotiation. So I called them to say, "Look, this is what's going on."' He pauses. 'Maybe I'm not supposed to say that. I think they want to announce that with some big whoop-de-do, but we were negotiating with them. ... I won't say whether the negotiations were successful or not.
DRIVING THE WEEK – Rep. Paul Ryan scheduled to release his budget blueprint Tuesday (at which point Senate Democrats will declare it dead on arrival) ... President Barack Obama is to meet with both the Democrat and GOP caucuses in the House and Senate to discuss the possibility of a grand bargain as well as gun safety, immigration and other issues on his agenda. Most followers remain skeptical that Republicans will accede to the kind of revenues Obama wants or that Dems will swallow significant entitlement changes needed to get to a big budget deal. But hope springs eternal ... Senate takes up the House-passed CR on Tuesday and will likely debate it the rest of the week ... Senate Budget Committee expected to mark up and vote out its budget resolution by Thursday (imagine that!) with a bill to the floor next week ...
House OGR has a hearing Wednesday at 10 a.m. on transparency in government and Thursday at 10 a.m. on sequestration oversight ... The Fed on Thursday is scheduled to release the results of its Comprehensive Capital Analysis and Review and announce a decision on dividend and buyback requests from banks ... On Friday, Senate PSI holds its hearing on the "London Whale" trade. JPMorgan has not announced which of its executives will testify, but M.M. would be hugely surprised if CEO Jamie Dimon does not appear ... House Financial Services has a hearing on Wednesday at 10 a.m. on mortgage insurance and on Thursday at 10 a.m. on "too big to fail" and results of the GAO study of FSOC and the Office of Financial Research ...
Senate Banking has a hearing on Tuesday at 10 a.m. to consider the nominations of Mary Jo White to head the SEC and Richard Cordray to head the CFPB. White is likely to face some tough questions regarding her private-sector work defending financial industry clients but should ultimately be confirmed. Republicans remain likely to block Cordray, not over his record at CFPB (he is widely admired, even among banking executives), but over what critics describe as the unaccountable nature of the CFPB's structure.
Next week; movie, book reviews and Dear Rink Rats.
Until Next Monday, Adios!
March 11, 2013
Monday, March 4, 2013
The Oscar telecast is over for another year, the NHL is at the half way point of their shortened season, Downton Abbey is over until next winter, and Tony Villar’s days are numbered as mayor of Los Angeles. But the main reason there is such March sadness, this first week of March, is the dysfunctional mess of our federal government.
PRESIDENT OBAMA called for “smarter government” in his State of the Union address. But Congress is about to enact $85 billion in across-the-board budget cuts that could be called “dumber government.”
The so-called sequester is the latest fiasco as the country lurches from one budget crisis to the next. It would force government agencies to cut the biggest, most visible items in the budget, like the size of the Army. It would also cut long-term investments in people and research — canceling summer internships, new student hires, and training programs for federal employees. But the sequester won’t do anything to attack the real waste and inefficiency in government programs.
That’s because the national budget process has become completely dysfunctional. The executive branch undergoes an annual farce in which government officials prepare detailed estimates of how much it will cost to run their organizations. Congress ignores most of this effort, and instead, tapes together budgets based on the previous year’s spending. Federal agencies also conduct an elaborate process to evaluate how well they are performing. But Congress provides money almost regardless of the evaluation. To get around budget caps, which are supposed to limit the amount of spending each year, Congress uses a number of tricks. For example, it has appropriated trillions for the wars in Iraq and Afghanistan in more than 30 “emergency” supplemental funding bills, even though this mechanism is supposed to be used for events like Hurricane Sandy.
Worst of all, it’s impossible to keep track of what our tax revenue really buys. Federal accounting systems provide no management information and are unsuited to make decisions based on efficiency. Most agency budgets are simply long itemized lists of salaries and expenses. You can drill down to the cost of a pencil, but there is no mechanism for calculating costs by the type of service delivered, such as the cost of processing veterans’ benefits.
The so-called sequester won’t do anything to attack the real waste and inefficiency in government programs. That’s because the national budget process has become completely dysfunctional. The lack of a functional budget and absence of financial information has lowered the quality and increased the cost of federal government services almost across the board. Federal agencies operate in a fog of uncertainty, unsure how much money they will have for next year — or even next month. This short-termism also plays right into the hands of private contractors. Government agencies don’t have the leverage to negotiate long-term deals, so they rush to disburse unspent money in the last two weeks of the year. The interruptions in funding delay routine maintenance for roads, buildings, and equipment. They undermine employee morale, retention, hiring, and training.
Until every citizen takes the responsibility to notify their representatives in Washington this must end, it will never end. It could be a long 2013.
FROM THE 70-PAGE SEQUESTRATION ORDER that went out late Friday: "The law requires the president to issue a sequestration order today canceling $85 billion in budgetary resources across the federal government for FY 2013. Specifically, OMB calculates that, over the course of the fiscal year, the sequestration requires a 7.8 percent reduction in nonexempt defense discretionary funding and a 5 percent reduction in nonexempt nondefense discretionary funding. The sequestration also requires reductions of 2 percent to Medicare, 5.1 percent to other nonexempt nondefense mandatory programs, and 7.9 percent to nonexempt defense mandatory programs."
GREENWATCH! - "Australian climate on 'steroids' after hottest summer: The Bureau of Meteorology has confirmed the three summer months ending February 28 were the hottest season ever recorded in Australia, leading the government's Climate Commission to label it the 'Angry Summer' ... 'The Australian summer over 2012 and 2013 has been defined by extreme weather events across much of the continent, including record-breaking heat, severe bushfires, extreme rainfall and damaging flooding,' the report said. ... Australia experienced its hottest ever average national maximum temperature on January 7 of ... 104.5 Fahrenheit, while 44 sites, including Sydney and Hobart, recorded all-time high temperatures in the summer. The report said there have only been 21 days in 102 years where the average maximum temperature for the whole of Australia has exceeded [102.2 F] and eight of these happened in the summer just gone."
SIREN: CHINESE ARMY TIED TO CYBERATTACKS - "On the outskirts of Shanghai, in a run-down neighborhood dominated by a 12-story white office tower, sits a People's Liberation Army base for China's growing corps of cyberwarriors. The building ... is the headquarters of P.L.A. Unit 61398. A growing body of digital forensic evidence ... confirmed by American intelligence officials ... leaves little doubt that an overwhelming percentage of the attacks on American corporations, organizations and government agencies originate in and around the white tower.
"An unusually detailed 60-page study, to be released Tuesday by Mandiant, an American computer security firm, tracks for the first time individual members of the most sophisticated of the Chinese hacking groups ... to the doorstep of the military unit's headquarters. The firm was not able to place the hackers inside the 12-story building but makes a case there is no other plausible explanation for why so many attacks come out of one comparatively small area."
PROFITS UP; JOBS NOT - "With the Dow Jones industrial average flirting with a record high, the split between American workers and the companies that employ them is widening and could worsen in the next few months as federal cuts take hold. ... With millions still out of work, companies face little pressure to raise salaries, while productivity gains allow them to increase sales without adding workers. ... The result has been a golden age for corporate profits, especially among multinational giants that are also benefiting from faster growth in emerging economies like China and India."
CITIZEN GEITHNER: Beginning in early March, former Treasury Tim Geithner will conduct a series of university seminars on financial crises - all closed to press and off the record and done for no fee. The focus of the seminars will be on advancing academic research on crisis prevention -- and the craft of crisis response - so that future policy makers can draw on his ideas, and the public can use to better understand how and why governments act in crisis. Geithner has committed to do such sessions at Harvard, MIT, Northwestern, Princeton, and the University of Michigan. Additional schools will be added in the coming months.
"Geithner has retained the Harry Walker Agency to represent him in handling his paid speaking engagements. Beyond the university seminars and the paid speeches, he also expects to do some engagements for nonprofit organizations and charities for no fee.
2016 WATCH - Marco Rubio courts Wall Street: The rising GOP star ... has quietly met with some of the most powerful GOP backers in the world of high finance. The roster includes Blackstone Chief Executive Stephen Schwarzman, KKR CEO Henry Kravis and senior executives at Goldman Sachs and Barclays Capital ... Rubio has gotten backing from big Wall Street titans before, notably hedge fund manager and billionaire Paul Singer. ... 'It was a first date. And he's doing lot of them,' said a person familiar with Rubio's meeting with Schwarzman, who heads one of the biggest private equity firms on Wall Street. The person ... said Schwarzman was 'favorably impressed' with Rubio but remains uncommitted for 2016. 'Rubio has a very strong sense of himself and positioned himself very early on immigration reform, which Republicans desperately need,' this person said. ...
"Sen. Rand Paul was in New York City on Monday, meeting privately with a range of donors and political operatives before an appearance at the New York Meeting, a conservative gathering in Midtown where candidates have a chance to network. Rep. Paul Ryan of Wisconsin is expected [in NYC] in the coming weeks ... Ohio Sen. Rob Portman, in his role at the National Republican Senatorial Committee, has also been in New York meeting with donors. And Louisiana Gov. Bobby Jindal is due here for a Republican Governors Association fundraiser in a few weeks."
BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Melissa Duran …famous San Jose Shark fan, Alan Greenspan (87), Jim Rice (60), Sharon Stone (55, Shannon Tweed (56), Carrie Underwood (30).
AUTO BUFFS – The anticipated introduction of the new 2014 Corvette Stingray convertible will be released this Tuesday at the Geneva Switzerland Auto Show.
The drop-top model shares the dramatic body styling of the coupe, but with a folding fabric top. Underneath its skin is the new Chevy LT1 6.2 liter V-8 with 450-hp. No word yet on pricing or availability.
COLLEGE HOCKEY PICK OF THE WEEK – Friday March 8, 7:00 PM, ET, HGTV; the ECAC playoffs begin with a first round matchup in Canton, New York. Colgate University Raider’s (14-16-4) vs. St. Lawrence University Saints (16-14-4). St. Lawrence is the higher seed but will be in trouble without their captain, senior Kyle Flanagan. St. Lawrence has lost three in a row without their star. Still we like the Saints to win Game 1 of the best of three series, 3 – 1. (Season to date (7-3)
THE SWAMI’S TOP PICKS: ice – (ECAC) St. Lawrence 3 Colgate 1, (NHL) Boston 5 Toronto 3, hoops – (Big East) Georgetown 75 Syracuse 70. Season to date (59-30)
DRIVING THE WEEK - President Barack Obama holds a Cabinet meeting this afternoon ... House this week is expected to vote on a bill to fund the government through September (more on which below) ... ISM nonmanufacturing on Tuesday at 10 a.m. EST expected to dip slightly to 55 from 55.2 ... ADP employment on Wednesday at 8:15 a.m. expected to decline to 170K from 192K ... Initial jobless claims at 8:30 a.m. Thursday expected to rise to 355K from 344K ... BLS jobs report on Friday at 8:30 a.m. expected to show a gain of 160K with no change to the 7.9 percent jobless rate.
Senate Banking has a hearing on Thursday at 10 a.m. on the Bank Secrecy Act ... House Financial Services has a hearing Tuesday at 10 a.m. reviewing current monetary policy and Wednesday at 10 a.m. on GSE reform.
Next week; movie, book reviews and Dear Rink Rats.
Until Next Monday, Adios!
March 4, 2013