Tuesday, April 29, 2014

Where have you gone Double-Entry Accounting?

SOMETIMES it seems as if our lives are dominated by financial crises and failed reforms. But how much do Americans even understand about finance? Few of us can do basic accounting and fewer still know what a balance sheet is. In fact, when was the last time you balanced your checkbook? If we are going to get to the point where we can have a serious debate about financial accountability, we first need to learn some essentials.

The German economic thinker Max Weber believed that for capitalism to work, average people needed to know how to do double-entry bookkeeping. This is not simply because this type of accounting makes it possible to calculate profit and capital by balancing debits and credits in parallel columns; it is also because good books are “balanced” in a moral sense. They are the very source of accountability, a word that in fact derives its origin from the word “accounting.”

If we want to know how to make your own finances and companies more accountable, we would do well to study the Dutch. In 1602, they invented modern capitalism with the foundation of the first publicly traded company — the Dutch East India Company — and the first official stock market in Amsterdam. But it was through an older and well-maintained culture of accountability that they kept these institutions stable for a century. The spread of double-entry accounting to the Netherlands during the early 1500s made the country the center of accounting education, world trade and early capitalism. Well-accounted-for provincial tax returns allowed the Dutch to float bonds at dependable 4 percent interest rates. The Dutch trusted their managers to know how to keep good books and make regular interest payments, while paying off state debt.

Over the past half century, people have stopped learning double-entry bookkeeping — so much so that few know what it means — leaving it instead to specialists and computerized banking. If we want stable, sustainable capitalism, a good place to start would be to make double-entry accounting and basic finance part of the curriculum in high school, as they were in Renaissance Florence and Amsterdam. I teach a summer business program for high school business students. Many of them know nothing about bookkeeping let alone how to manage cash.

A population well-versed in double-entry accounting will not immediately solve our complex financial problems, but it would allow average citizens to understand the nuts and bolts of finance: balance sheets, mortgage interest, depreciation and long-term risk. It would also give them a clearer sense of what financial accountability really means and of how to ask for and assess audits. The explosion of data-driven journalism should also include a subset of reporters with training in accounting so that they can do a better job of explaining its central role in our economy and financial crises.

Without a society trained in accountability, one thing is certain: There will be more reckonings to come. So balance your checkbook, understand your debt, and above all else kiss an accountant.

A special thank you to Jacob Soll, a professor of history and accounting at the University of Southern California.

JACK ASS OF THE MONTH – A tough one this month, Donald Sterling. What a putz.

SPORTS TELEVISION -- Johnny Weir and Tara Lipinski are bringing their sense of style to the Kentucky Derby. NBC said last week the announcing team will comment on the fashion and party scene at horse racing's signature event next week. Their addition reflects how the Derby has become one of the most female-friendly televised sports events of the year. Last year's race was the second most-watched Kentucky Derby in 25 years; 51 percent of the viewers were women. Weir and Lipinski were rookie announcers covering figure skating at the Olympics. ... They subsequently commented on fashion coverage at the Academy Awards for 'Access Hollywood.' The Derby will also mark the NBC debut of Josh Elliott.

HAS GOLDMAN LOST ITS LUSTER? - Goldman Sachs remained a partnership long after its rivals went public. When it finally took the plunge, in 1999, it revealed almost absurd levels of profitability: returns on equity of more than 40 percent in some years ... A decade later, under chief executive Lloyd Blankfein, Goldman avoided the fate of Lehman Brothers, Merrill Lynch and Bear Stearns. ... Surviving the crisis and then immediately thriving was the crowning glory of an investment bank that has inspired more respect, envy, fear and loathing than any other. But over the past few quarters something strange has happened: Goldman is starting to look unexceptional.

Reporting first-quarter results last week, chief financial officer Harvey Schwartz was able to boast of a 'pretty dominant performance in investment banking,' a 'quite solid performance in fixed income; and a return on equity that was 'the highest in our peer group'. All true. But this is hardly setting investors' hearts racing or leaving rivals quaking in their boots."

A FORD IN YOUR FUTURE - After a more than seven-year run, Ford Chief Executive Alan Mulally will leave the auto maker earlier than expected, we report. His successor will be Mark Fields, a Ford veteran who survived management turmoil in the years before Mr. Mulally's arrival. Our story examines the impressive progress that took place at Ford under Mr. Mulally's tenure, and we report on the role Mr. Fields has played in the company over the past few years. We note that he is expected to step easily into his new position. One person familiar with the matter referred to him as the acting CEO, adding that Mr. Mulally has been playing an increasingly "ceremonial role." Meanwhile, we have an interview with Mr. Mulally—conducted before news broke about his successor—in which he talks about Mr. Fields, business in China and the new F-150 pickup truck.

COLLEGE CHRONICLES  - As concerns over tuition costs mount, the U.S. government officials are trying to rein in increasingly popular federal programs that forgive some student debt. At issue are two federal-loan repayment plans created by Congress, originally to help students with big debt loads and to promote work in lower-paying jobs outside the private sector. Under the faster-growing of the two plans, the unpaid balances for those working in the public sector or for nonprofits are forgiven after 10 years. The move to rein in the programs, we note, reflects concerns in the administration, not just about cost to the government but about the risk that promising huge debt forgiveness could make borrowers and schools less disciplined. For instance, colleges might charge more than they would otherwise, which would only lead students to borrow more.

The U.S. Supreme Court on Tuesday ruled 6-2 that states may end racial preferences without violating the Constitution, leaving in place the outcome of a 2006 Michigan ballot initiative where voters backed an end to so-called affirmative action at state schools. Our story examines the opinions of the justices, reports on the reactions from civil-rights advocates and other activists and provides background on the long-lasting debate over preferential treatment for minorities. While the ruling upholds the right of voters in states to bar racial preferences at public universities, justices are far from consensus on when affirmative action may be allowed—an issue that will probably return to the court in the coming years. For more information on the decision, here's a handy explainer.

CHINA KEEPS SLOWING - A Chinese manufacturing gauge signaled a fourth month of contraction, indicating that government efforts to counter an economic slowdown have had only a limited impact. The preliminary Purchasing Managers' Index from HSBC Holdings Plc and Markit Economics was 48.3 in April, matching the median estimate ... The reading rose from March's final figure of 48 while remaining below the expansion-contraction dividing line of 50. The yuan touched the lowest level since 2012 after the report, which followed data last week showing China's expansion moderated to the slowest pace in six quarters.

DOLE'S CRYSTAL BALL - The World War II veteran clearly remains sharp in his 10th decade, working hard to move around but still reeling off his patented one-liners and dispensing Sunday show-style political wisdom for the election year. "He expressed dismay at the failure of Congress to pass immigration reform to and said the next GOP presidential nominee must be 'somebody with a program' ... 'We can't be against everything,' the former senator said in a brief interview ... Dole said Republicans have a '50-50' shot at taking the Senate this year and singled out two members of Congress - former vice presidential nominee Paul Ryan and House Majority Leader Eric Cantor - as rare lawmakers offering constructive agendas."

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Judy Collins (75), Penelope Cruz (40), Chris Krich …The Coach, Harper Lee (88), Kosuke Nakamura …famous International Student, Jerry Seinfeld (60), Frankie Valli (80), Brian Williams (55).

LIVING HISTORY - "Pope Francis declares John Paul II and John XXIII as new saints" in front of a crowd of hundreds of thousands - BBC/Vatican City : "He praised his two predecessors as 'men of courage' at the Vatican service, the first time in history that two popes have been canonised at the same time. The Mass was attended by Pope Emeritus Benedict, who quit as pope last year, and roughly 100 foreign delegations. ... Francis is trying to balance the conservative legacy of John Paul with the reforming zeal of John. ... The ancient rite of canonisation unfolded under grey skies in a packed St Peter's Square. ... [O]rnate, silver containers holding holy relics of new saints were shown: a trace of blood from John Paul II, and sliver of skin taken from the body of John XXlll. ...

"At the climax of the service, Pope Francis said in Latin: 'We declare and define Blessed John XXIII and John Paul II to be saints and we enrol them among the saints, decreeing that they are to be venerated as such by the whole Church.' Relics of each man -- a container of blood from John Paul and a piece of skin from John -- were placed near the altar.


DOWN THE STRETCH THEY COME – The Swami’s Kentucky Derby picks:
Win – California Chrome, beat those east coast snobs; early odds 2:1
Place – Hoppertunity, Bob Baffert’s long shot becomes a favorite; early odds 10:1
Show – Candy Boy, a ULV connection will surprise; early odds 20:1

SCIAC GAME OF THE WEEK – SCIAC Golf Championships: (1) La Verne Leopards, (2) Claremont McKenna Republicans, (3). Redlands Bulldogs.

2014 Season to date (25-27), ouch!

Market Week - As investors await another meeting of Fed policymakers this week, the markets continue their longest period of indecisiveness in 7-1/2 years. The S&P 500 has alternated between weekly gains and losses for eight consecutive weeks, the first time that’s occurred since September 2006. This is a huge week for U.S. economic data and events, including GDP and the employment cost index ... for Q1, lots of monthly indicators for March and April and an FOMC meeting. We expect the growth data to signal reacceleration in Q2 after exaggerated weakness in Q1. ... We estimate real GDP rose at just a 0.9% annual rate in Q1, down from a 2.6% Q4-to-Q4 pace in 2013. ... Most of the sharp slowing appears to be due to the harsher-than-usual winter weather and other sources of volatility ... We continue to forecast a 3.5% pace for real GDP in Q2, followed by 3.3% in Q3 and Q4.

DRIVING THE WEEK -  President Obama continues his Asia trip in the Philippines ... House Financial Services holds a hearing on Tuesday at 10:00 a.m. with SEC Chair Mary Jo White on the agency's rule making agenda ... House Financial Services subcommittee on Tuesday will hold a business meeting to issues CFPB subpoenas ... Senate Banking on Tuesday will markup the Johnson-Crapo housing reform bill and vote on Fed nominations including Stanley Fischer to be vice chair ... Tons of big economic data including Case-Shiller home prices at 9:00 a.m. Tuesday which are excepted to rise 0.7% ... Consumer confidence at 10:00 a.m. Tuesday expected to rise trivially to 83.2 from 83 ... ADP employment Wednesday at 8:15 a.m. expected to rise 206K ...

Employment cost index at 8:30 a.m. Wednesday excepted to rise 0.5% ... Q1 GDP on Wednesday at 8:30 a.m. expected to increase just 1.2% ... FOMC announcement at 2:00 p.m. Wednesday expected to including another $10B taper to $45B per month. There is no presser ... Personal income and spending at 8:30 a.m. Thursday expected to rise 0.4% and 0.6%, respectively ... ISM manufacturing at 10:00 a.m. Thursday expected to rise to 54.3 from 53.7 ... April jobs report at 8:30 a.m. Friday expected to show a gain of 215K with the unemployment rate dipping from 6.7% to 6.6% ... Twitter releases Q1 earnings on Tuesday.

Next week: Shrinkage and movies.

Until Next Monday, Adios.

Claremont, CA

April 28, 2014

#V-2, 211

Monday, April 21, 2014

Spring Cleaning

Some news and notes for your personal and professional spring cleaning.

BOSTON STRONGER: MARATHON MONDAY -- Marathon looks to shake shadow of 2013 bombing, with some 36,000 people, the second-largest field in the race's 118-year history, will set out [tomorrow in waves, beginning at 8:50 a.m. for mobility impaired] from Hopkinton, a town west of Boston, for the 26.2-mile race that finishes on Boston's Boylston Street ... Hundreds of thousands of whom are expected to line the course ... A heavy police presence is planned and racers and supporters will face new restrictions including a ban on backpacks ... Race organizers, the Boston Athletic Association, admitted an additional 9,000 runners this year, in part to ensure that the roughly 5,000 people on the course when the blasts occurred get a chance to cross this finish line.

CALIFORNIA DROUGHT - This summer, Todd Allen’s only crop will be Pima cotton. He and his brother, Joel, usually also grow cantaloupes and, later in the season, winter wheat on about 600 acres or so. But this year, they and hundreds of others will get no water from the reservoirs that sustain farming in the Central Valley, where much of the nation’s fresh fruits, nuts and vegetables are grown. Mr. Allen says he will give his cotton crop just “one shot of water when it gets to a certain height.” So they will forgo melons. And a question mark hangs over winter wheat.

Heading into the third year of a prolonged drought, the Allen's are among the many California farmers forced to make dire choices that could leave as much as 800,000 acres, or about 7 percent of the state’s cropland, fallow. While some think that estimate may be inflated so early in the planting season, the consensus is that drier and drier seasons are on the horizon.

THE RENTS ARE TOO DAMN HIGH - For rent and utilities to be considered affordable, they are supposed to take up no more than 30 percent of a household's income. But that goal is increasingly unattainable for middle-income families as a tightening market pushes up rents ever faster ... The strain is not limited to the usual high-cost cities like New York and San Francisco.

An analysis for The New York Times by Zillow, the real estate website, found 90 cities where the median rent - not including utilities - was more than 30 percent of the median gross income. In Chicago, rent as a percentage of income has risen to 31 percent, from a historical average of 21 percent. In New Orleans, it has more than doubled, to 35 percent from 14 percent ... Nationally, half of all renters are now spending more than 30 percent of their income on housing.

MUSTANG, FIFTY YEARS - Ford to offer 50th anniversary Mustang. Ford is building a limited-edition Mustang GT to honor the pony car's 50th anniversary. The company will only build 1,964 special cars, honoring the year the Mustang first went on sale. The 50 Year Limited Edition will come in one of the two colors of Ford's logo: white or blue ... manual or automatic transmission. There are special chrome highlights around the grille, windows and tail lights. The Limited Edition will also be the only 2015 Mustang with a faux gas cap badge on the rear, where the original cap sat. ... Ford is showing the Limited Edition at the New York auto show ... Pricing wasn't announced.


All across America, in offices and airports, I see men in restrooms talking on their cellphones while standing at urinals or sitting in toilet stalls. This seems demeaning to the people on the other end of the line and unsanitary. Is it O.K. to talk on mobile phones in public bathrooms? Related question: Do women do this, too?

Nature Calls,
Potsdam, New York

Dear Nature Calls -

If you think talking is bad, consider a sign I spotted in a restroom in Denver: “No washing animals in the sink.” (Say, what?) I’m not concerned about demeaning people on the other end of the line. Some of my best phone chats have been conducted while soaking in hot tubs or deveining that vile goop from the spines of shrimp. (No one was the wiser.) Same with hygiene: Half the men I see in restrooms don’t wash their hands. Their filthy cellphones pose no greater health risks than their filthy hands do.

No, the hideous part about speaking on cellphones in cramped public spaces is subjecting everyone else to the banality of our daily lives. We should stop at once, but we won’t. And good luck asking others to disconnect. That ship has sailed. And I have it on excellent authority that women are chatty sailors, too.


MOVIE BLAST: CAPTAIN AMERICA CRUSHES JOHNNY DEPP - Team U.S.A. dominated Easter weekend as Disney's 'Captain America: Winter Soldier' fended off its competition at the box office, holding onto the No. 1 spot for the third week in a row by drawing in $26.6 million. ... The only story of disappointment came from Warner Bros.' sci-fi thriller 'Transcendence,' which stars Johnny Depp and took in a meager $11.2 million. The film cost $100 million to make and is yet another box-office stinker for Depp, whose last big-budget failure, 'The Lone Ranger,' famously tanked in 2013.

ECON 101 - The current economic expansion is proving to be one of the most lackluster in modern times. The U.S. jobless rate is the highest on record at this stage of recent cycles and gross domestic product has grown at half the pace of the previous three expansions. But while it won't go down in history for its strength, at least the recovery is still going. The current stretch of growth, we note, is poised to last longer than the average for post-World War II cycles. And the very weakness of the growth means there are few immediate risks of the kind of imbalances that usually produce a recession. "It's fair to say that we're not in a situation where people begin to worry" about the onset of a new recession, noted one economist. "There are pretty clear skies, but it's remarkable how quickly the skies can cloud over."

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Jim Douthit ...famous tennis player and cat lover, Herm Edwards (60), Queen Elizabeth II (88), Gene Hasse ....famous father and Detroit Tiger fan, Andie MacDowell (56), Shirley MacLaine (80), Jack Nicholson (77), Renee Zellweger (45).

COLLEGE CHRONICLES Summer Survival Strategies for Adjuncts: I’ve lived through enough adjunct summers to know that things get pretty difficult financially around late July. What little money you managed to scrape together during the school year is long gone, and you’re at least two rent cycles away from the next paycheck.

For adjuncts who aren’t lucky enough to score classes, the end of the summer can become a deeply stressful period of doing whatever it takes—borrowing, penny-pinching, scouring Craigslist for odd jobs—to keep the eviction notices at bay until the first paycheck of the new school year arrives.

My adjunct summer survival strategy consists mainly of selling my possessions—furniture, music, clothes. By the end of July, my apartment is significantly more roomy than it was at the beginning of the summer. Once the school year starts and the income returns, I restock what I’ve purged. It’s kind of like going to one of those payday lenders: a never ending cycle of borrowing and repaying, never earning enough to escape the pattern.

I’m also no stranger to the odd job. I’ve taken many a part-time gig to bridge the income gap between adjunct paychecks. I delivered pizzas for a few years during and after grad school, though I could never bring myself to deliver in the same town where I taught. The thought of ringing the doorbell of a current student was too much to bear.

I’ve also discovered the insalubrious world of Craigslist gigs. There’s money to be earned for doing all sorts of random tasks, from moving furniture to painting houses to, uh, posing for “tasteful” photographs. With the help of Craigslist, I’ve been a mover, a landscaper, a wedding photographer, and a ditchdigger. I was also invited to meet a potential employer at a remote location in the country, but I turned that gig down.

In fact, Craigslist is a lifesaver for poor adjuncts, and my secrets to surviving the adjunct summer mostly revolve around it. Each week during the summer break, I’m either selling my possessions or my labor in order to scrounge up enough cash to make it until September.

But I knew there had to be some other options for summer income. Tens of thousands of other teachers struggle through the dog days every year, and I was curious to hear more survival secrets. So I asked Twitter.

Based on the responses I received, it looks like the summer is pretty tough for most adjuncts. Some respondents reported trying to bridge the gap with part-time and odd jobs similar to mine.

- Josh Boldt, The Chronicle of Higher Education, April 25, 2014.


Rink Rats is traveling this week, so we took a break from our Swami picks. See you next week.
2014 Season to date (25-27), ouch!

Market Week - Wall Street is betting that Apple will offer investors tens of billions of dollars in new share buybacks this week, as long-awaited product launches remain locked inside its Cupertino labs.

Apple will also reveal the impact of iPhone sales through China Mobile when it reports second-quarter earnings on Wednesday, with an overall dip in revenues forecast in what is often a fallow period for the mobile phone market.

DRIVING THE WEEK -  It's make or break time for corporate profits, with dozens of companies—from Facebook to Ford— reporting in the week ahead.

The pressure is on for those earnings to support the market's current valuations, after weeks of choppy trading. It's also crunch time to see whether it really was the harsh winter weather that slowed profit growth—and the economy—or something else.

"Does spring make a difference? And in what industries does it make a difference? If that doesn't come across, it may raise some confusion about what the economic data is telling us," said Art Cashin, director of floor operations at UBS.

About 150 S&P 500 companies are scheduled to release quarterly results through Friday, in an earnings season that has been so far mediocre, though nearly two-thirds of companies are beating Wall Street estimates. On the economic front, there is housing data with existing home sales Tuesday and new home sales Wednesday, and durable goods are reported Thursday.

Congress still out on Easter recess ... President Obama leaves Tuesday for his Asia trip after traveling to Oso, Washington to view the devastation from the recent mudslide and meet with families ... Vice President Biden heads to Kyiv, Ukraine today ... Patriot's Day in Boston today features the first marathon since last year's bombing ... Index of leading indicators today at 10:00 a.m. expected to rise 0.7 percent ... FHFA house price index at 9:00 a.m. Tuesday expected to rise 0.5 percent ... Existing home sales at 10:00 a.m. Tuesday expected to dip 1.1 percent to 4.55M ...

New homes sales at 10:00 a.m. Wednesday expected to rise to 450K from 440K ... Durable goods orders Thursday at 8:30 a.m. expected to rise 2.0 percent, 0.6 percent ex-transportation ... Univ. of Michigan consumer sentiment at 9:55 a.m. Friday expected to rise to 83.0 from preliminary 82.6 ... Facebook reports earnings Wednesday

Next week: Jack Ass of the Month and Spring Gardening.

Until Next Monday, Adios.

Littleton, CO

April 21, 2014

#V-1, 210

Monday, April 14, 2014

The Last Minute


I owe taxes this year, what can I do at the last minute to avoid this tax bill?

Stressed in Covina


Consider an extension – All individual taxpayers are allowed up to an additional six months to prepare and file, which will extend the deadline for 2013 returns to October 15. To get this extension, taxpayers must file IRS Form 4868. Remember, that an extension to file the return is not an extension to pay your tax. To avoid penalties, you must pay the IRS at least 90% of what you owe by April 15. Interest – currently 3% a year, compounded daily-will be due on the underpayment.

Deductions available – Make tax-deductible contributions for 2013 to a regular retirement account by April 15. Make tax-deductible contributions to another pension plan before October 15, if you have a six month extension. Make tax-deductible contributions to a qualified Health Savings Account by April 15.

Check your Marriage Penalty or Marriage Bonus – For two-income married couples, especially those with similar incomes, being married can mean owing more in taxes than the partners would as two singles. In part, that is because the U.S. tax system “stacks” one partner’s income atop the other’s. If you are curious about your marriage penalty or bonus, The Tax Payer Policy Center, a nonprofit group in Washington, has a calculator at taxpolicycenter.org/mpc

If you can’t pay or don’t file – strapped taxpayers should be aware that it is impossible to outrun the IRS. You may qualify for an “online payment agreement” at IRS.gov that can be used to schedule payments. Don’t ignore, the IRS can help you work your payments out.

Good luck.


HAPPY TAX SEASON: HERE'S HOW TO SAVE $675M - In honor of our annual spring ritual, let me show you how utterly bizarre the American tax system can be, using a recent deal between two well-known outfits to illustrate my point. The deal involves Don Graham's Graham Holdings (formerly the Washington Post Co.) and Warren Buffett's Berkshire Hathaway, which are doing what's known in the tax biz as a cash-rich split-off.

It's a way that companies can dispose of holdings on which they have big gains and emerge with cash without technically selling anything, thus incurring no tax bill ... Cash-rich split-offs are specifically allowed by the Internal Revenue Code. Graham and Berkshire aren't pushing boundaries; they're using something that Congress has specifically allowed. It's absurd, but it's permissible.

OUT OF AFRICA - Nigeria becomes Africa's biggest economy, Nigeria ... became Africa's biggest economy, leap-frogging South Africa ... With 170 million people, Nigeria is about three times the size of South Africa and has enjoyed high rates of growth, notwithstanding widespread corruption ... Economists ... warned not to take the new figures at face value, given that South Africa -- the continent's only G20 member -- has fewer people and is way ahead in ... infrastructure and governance. ... For ordinary Nigerians -- most of whom still live on less than $2 a day - the [GDP] rebasing [will] have little effect, but it will improve the country's balance sheet and its credit rating.

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Ellen Barkin (60), Ashley Judd (46), Jessica Lange (65), Emma Thompson (55).

COLLEGE CHRONICLES – Harvard and Yale ... accepted about 6 percent of applicants, Columbia and Princeton about 7 percent, and [MIT] and the University of Chicago about 8 percent. Duke accepted only 9.9% of the 31,785 who applied to the school for the Class of 2017, the lowest acceptance rate in Duke history.

CBS LATE NIGHT – Comedy Central’s Steve Colbert has signed on to be the replacement to David Letterman’s Late Night show. Colbert's the real deal: in person, Colbert is a nice guy, but not as monologue-monomaniacal as Jay Leno. Colbert has lived the life of a suburban soccer dad and Catholic Church-going Sunday school teacher in Montclair, N.J., with a beautiful wife he's nuts about, Evie McGee, and three kids. He's not an ingratiating boy next door, like Jimmy Fallon, or a scorchingly candid curmudgeon, like Letterman. ... Carson was the Walter Lippmann of comedy, wielding enormous influence over the reputations of politicians he mocked. Stewart and Colbert took it a step further. They became Murrow and Cronkite for a generation of young viewers.

15 minutes prep
60 minutes refrigeration
Serves 10

How We Did It
We've taken a classic recipe and made it over by preparing it with JELL-O Vanilla Flavor Fat Free Sugar Free Instant Pudding, COOL WHIP LITE Whipped Topping and an angel food cake. We also eliminated the butter and powdered sugar in the chocolate topping. These changes will save you 170 calories and 11 grams of total fat, including 3.5 grams of saturated fat, per serving.
Make Ahead: Dessert can be made up to 4 hours in advance. Remove from refrigerator 30 min. before serving.

What you need
1 pkg. (1.0 oz.) JELL-O Vanilla Flavor Fat Free Sugar Free Instant Pudding
1-1/2 cups cold fat-free milk
1 cup thawed COOL WHIP LITE Whipped Topping, divided
1  round angel food cake (10 oz.), cut horizontally into 3 layers
1 oz. BAKER'S Semi-Sweet Chocolate, chopped

How to make it
Beat pudding mix and milk in medium bowl with whisk 2 min. Stir in 1/2 cup COOL WHIP.
Stack cake layers on serving plate, spreading pudding mixture between layers.
Microwave chocolate and remaining COOL WHIP in microwaveable bowl on HIGH 30 sec.; stir until chocolate is completely melted and mixture is well blended. Spoon over cake. Refrigerate 1 hour.

Rink Rats Kitchen Tips
How to Slice Cake Evenly
Mark the cake into 3 horizontal layers with toothpicks. Use a long serrated knife and gently sawing motion to cut the cake into the layers as directed.

CHAMPS – We like the San Jose Sharks to win the Stanley Cup Playoffs over the Boston Bruins which begin this week. Also we like the San Antonio Spurs to win the NBA playoffs over the Indiana Pacers.

COLLEGE HOCKEY PICK OF THE WEEK – Congrats to the Union College Dutchmen, a 2,200 student liberal arts D-III school (except for hockey) in Schenectady, New York, for winning the 2013-2014 NCAA D-I Men’s Hockey Championship. Final Season to date (8-5).


(MLB, April 19) Anaheim Angels (6-6) vs. Detroit Tigers (6-4). Tigers back home in Comerica after west coast trip, Detroit wins 5 - 4.

 (NHL, April 19) Chicago Blackhawks vs. St. Louis Blues, the best time of year for hockey fans, The Stanley Cup Playoffs. Western Conference Quarter-final Game 2, Hawks win 4 – 3.

SCIAC Game of the Week (Sat. April 19-softball) Redlands Bulldogs (24-10) vs. La Verne Leopards (12-18). First place Redlands visit the new Campus West field, Leos pull the upset 6 - 4.

2014 Season to date (24-26), ouch!

DRIVING THE WEEK -  Treasury Secretary Jack Lew this morning plans to meet with Ukrainian Finance Minister Oleksandr Shlapak at Treasury. Following the meeting, the Secretary and the Finance Minister will participate in a signing ceremony for a $1 billion loan guarantee for the Government of Ukraine ... Retail sales at 8:30 a.m. expeted to rise 0.9%, 0.5% ex-autos ... Empire State survey at 8:30 a.m. Tuesday expected to rise to 8.0 from 5.6 ... Consumer prices at 8:30 a.m. Tuesday expected to rise 0.1 headline and core ...

Fed Chair Janet Yellen at 8:45 a.m. Tuesday delivers remarks via video to an Atlanta Fed conference on financial markets ... Yellen on Wednesday delivers remarks at 12:15 p.m. to the Economic Club of New York on "Monetary Policy and the Economic Recovery" ... Industrial production at 9:15 a.m. on Wednesday expected to rise 0.5% ... Philly Fed Thursday at 10:00 a.m. expected to rise to 10.0 from 9.0 ... Markets closed Friday in honor of Good Friday and Easter weekend.

A joyous Easter and Passover to our readers.

Next week: Entitlement Part Deux and The Lie.

Until Next Monday, Adios.

Claremont, CA
April 14, 2014

#IV-52, 209

Monday, April 7, 2014

The Entitlement Trap

My experience in teaching and business is noticing an increasing behavior among students and employees, the sense of entitlement. That sense of I am entitled to an “A” in a course, a wonderful letter of recommendation, or a starting salary far above the market, all without the proper effort or professionalism necessary for those benefits and rewards.

Want to know what keeps the owners of the most successful family businesses up at night? The dread that their kids will grow up to be entitled.

That said, in reality, money turns out to be a less important factor than one might think in the development of entitlement. Some very wealthy kids turn out to be highly motivated and engaged – I see this in my work every day. My experience also suggests, however, that kids don’t mysteriously end up entitled; there are some common choices parents – all parents – make to a greater or lesser degree that substantially increase the odds that kids end up feeling that the world owes them a living. These choices are often made with the best of intentions, but they work against the long-term interest of our children.

How do you avoid the entitlement trap?  There are no pat answers. What I have learned from my work with family businesses is that you can start by asking yourselves questions.  This is not a scientific formula, but the more “no” answers that are scored, the greater the likelihood that you are putting your children on the path to entitlement.

Do they hold down jobs?  Kids that have jobs – even part-time or volunteer jobs – are more successful, both personally and professionally, than those who don’t. In an informal study of what people shared who made it to the C-Suite, one major American bank singled out height and summer jobs. There’s not much you can do about height, but work brings enormous discipline and learning. Jobs are also tremendously grounding, psychologically: they keep kids from being bored, one of life’s great vices. What I also see with glaring clarity in my work is that parents are blind to the strengths and vulnerabilities of their children. It’s hard to be objective. Jobs give your child the chance not only to gain experience, but also to get honest feedback. Reality is one of the best ways to combat a false sense of entitlement.

Can they build careers? Sometimes the next generation just can’t get traction, and they’re not entirely to blame. Alarmingly, in about a quarter of the client situations I work in, I see adult children being set up to fail. Owners sometimes give members of the next generation hopeless assignments – for example, they are asked to turn around a losing business that has no chance of becoming profitable.  Typically, this is done out of a desire to have the adult children understand, even relive, the experiences of the parents, who have almost always had to overcome tremendous challenges in order to succeed. The same thing can happen outside a family business, when adult children are forced into careers and professions in which they have no interest, and often no talent. Not surprisingly, they often don’t do well. Paradoxically, too much disappointment can also lead to entitlement. When even our best efforts are not good enough, it often seems better to just sit back and wait for life to be delivered to us on a silver platter.

Are they allowed to suffer? Life is like the stock market: it’s up and down, and there is risk involved. Don’t set your kids up to fail, but don’t  shelter them from fate’s hard knocks. Let your children feel the pain – it builds resilience. Indeed, research shows increasingly that resilience flourishes in an environment of tough love.  After that, everything else is the adult child’s responsibility. This discipline wonderfully concentrates everyone’s mind on the vital difference between wants and needs, and nips entitlement in the bud.

In my experience, the way that the most successful business families curb the next generation’s sense of entitlement is by staying involved in their kids’ lives.  If they fail to get some quality time, your children turn to money as the next best substitute. That sounds trivial, trite, perhaps even a platitude.  But every child is entitled to love. The rest is gravy.

Thank you Josh Baron and Rob Lachenauer for background information.
Next week the Entitlement Trap in older adults.

MILESTONE -- March Was The First Month Without A U.S. Combat Death In More Than A Decade: March was the first time since July 2002 that there were no U.S. combat fatalities anywhere.

SCOTUS TRIMS CAMPAIGN FINANCE RULES - The Supreme Court ... continued its abolition of limits on election spending, striking down a decades-old cap on the total amount any individual can contribute to federal candidates in a two-year election cycle. ... Wednesday's decision seemed to alter campaign finance law in subtle but important ways, notably by limiting how the government can justify laws said to restrict the exercise of First Amendment rights in the form of campaign contributions.

Last Wednesday's decision did not affect familiar base limits on contributions from individuals to candidates, currently $2,600 per candidate in primary and general elections. But it said that overall limits of $48,600 by individuals every two years for contributions to all federal candidates violated the First Amendment, as did separate aggregate limits on contributions to political party committees, currently $74,600.

McCUTCHEON MONEY - Big money's grip stronger than ever, the Supreme Court's decision in McCutcheon v. Federal Election Commission tore another hole in a regulatory framework so tattered that even ardent campaign finance regulators sigh over its impotence. ... There are still a handful of meaningful limits on political giving: Donors cannot give more than $5,200 directly to a single candidate over the course of an election cycle. Their contributions to party committees are capped as well. ... The money, however, is still there - just channeled from megadonors, corporations and heavily funded interests through a range of exotic independent-spending organizations, instead of through political parties.

It adds up to what many call a worst-of-both-worlds situation in which money pours into politics at a historic clip, but often to unaccountable outside entities that can push around candidates every bit as readily as the million-dollar party donors of old. In that sense, some campaign attorneys argue, finance regulations may have made the influence of money even more acute or at least less transparent, driving funds away from candidates and parties and toward shadowy outside groups.

COUNTRY MUSIC AWARDS -- The 49th Academy of Country Music Awards (in Vegas, airing on CBS). George Strait, Miranda Lambert, Keith Urban and Kacey Musgraves carried home the best trophies ... but Lambert's husband, Blake Shelton, and his co-host Luke Bryan may have been the biggest winners. ... Shelton joked that the show was their tryout for David Letterman's job ... Shelton and Bryan, who have given themselves the celebrity name 'Bluke,' suggest[ed] they recreate Ellen DeGeneres' selfie moment ... They went down the front row rejecting one star after another. They rejected Jason Aldean because he isn't 'big enough' and said of Tim McGraw in sing-song unison, 'Boring!' 'Honestly,' Shelton said, 'I think we're the biggest celebrities in the room.'

FOUR PRESIDENTS - Obama, Bush 43, Clinton and Carter - will be together Thursday in Austin at the LBJ Presidential Library's Civil Rights summit, which begins tomorrow and runs through Thursday. All four will speak in honor of the 50th anniversary of the Civil Rights Act.

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Gov. Jerry Brown (76), Francis Ford Coppola (75), Russell Crowe (50), Andy Garcia (58), Davis Love III (50), John Oates (65).

COLLEGE CHRONICLES – Since 1955, California has provided a vital funding bridge to higher education for needy students. The Cal Grant program, which has provided funding for more than 2.3 million students in the state since it was launched, is in jeopardy.

The 59-year-old program has always been a partnership between the state and its public and private colleges and universities, and that partnership has greatly expanded opportunities for the youth of this state. It has allowed students from low-income families to attend higher education institutions of their choice, whether they opted for a public university like UCLA or San Jose State University, or a private one like University of La Verne or Loyola Marymount University. Though I believe both public and private institutions still need to modify their Business Model to limit salary inequities and out of control overhead expenses (see AAUP report below).

That parity for public and private institutions was an essential part of the whole Cal Grant program, which was originally devised specifically to help enable qualified California high school graduates to attend private, nonprofit institutions if they so choose, rather than public ones. But that kind of choice is in jeopardy because of cuts to the Cal Grant awards available to students who choose private schools over state schools.

Over the last decade, the amount of grants offered to students attending private institutions has been severely eroded by inflation. More recently, state budget cuts have slashed the maximum award to such students by 6%. And for the 2014-15 school year, things will be even worse: Incoming students at private, nonprofit universities will face an additional 11% cut, which will bring the maximum grant to $8,056, the lowest in 16 years.

I invite you to consider signing an online petition addressed to the governor and legislature, requesting that Cal Grant funds remain intact. You can access the petition by visiting http://chn.ge/1hZ7L1P directly or by visiting www.studentsfirstalliance.org and clicking on the link to sign the petition.

AAUP, Annual Report on the Economic Status of the Profession, 2013-14:
The left side of table 1 provides the percentage change in average salary, which is a measure of the increase in the salary paid for a given faculty position rather than in the earnings of individual faculty members. The bottom row of the table indicates that the average salary for a full-time faculty member increased by 2.2 percent this year at those institutions that responded to the AAUP survey for the last two years. The table provides percentage change in the figures for the four upper faculty ranks at each type of institution surveyed and illustrates the variation among the different institutional categories and faculty ranks. As has been the pattern for a number of years, the increase at private-independent institutions overall was higher than that at public institutions, due almost entirely to the disparity in the salary change in doctoral universities for those two sectors.

The right side of table 1 presents a measure of changing salaries that is unique to the AAUP survey: the average change in salary paid to a continuing faculty member who has remained in his or her position at the same institution from the previous year. The percentage increases reflected in the table could be thought of as the “average raise” an individual faculty member received this year, and those figures include increases from all sources: promotions, merit raises, and across-the-board salary adjustments. In the aggregate table, all the figures are positive this year, meaning that salaries rose on average—but that is certainly not the case at every institution. The “bottom-line” overall average increase for continuing faculty members this year was 3.4 percent, and the pattern by type of institution was similar to that observed in average salaries. The continuing faculty figure is almost always higher than the overall increase in average salary, since the former includes only faculty members who have added a year of experience. The broader figures from the left side of the table reflect the continuous churning of faculty members through positions, as senior faculty members depart and are most often replaced by faculty members at lower salaries, keeping the overall averages down.

TAX TIPS – for freelance bloggers. If you write a blog for someone else and get paid for your work, then you need to claim that income on your tax return. Most freelance bloggers are not considered full-time employees. That means you may or may not have completed a W-9 when you started working for a client and you may or may not get a Form 1099 at tax time from that client.

But what are those forms and what should you do as a freelance blogger to make sure you have all the paperwork you need and take the right steps to file your tax return properly? Read on for help, and consult your tax professional to be certain you're following all the rules.

What's a W-9?
Some of the employers who pay you to write blog posts, particularly larger companies, will require that you fill out a Form W-9 when you begin the job. This form identifies your work to the IRS as being done as an independent contractor, and the employer is not required to deduct taxes from your pay. The IRS still wants that money though, so you're responsible for paying those taxes. Don't get stuck with a huge tax bill at tax time each year. Instead, check out these tax tips for freelance bloggers to make sure you're ready.

What's a 1099?
Those clients that require you to complete a Form W-9 when you begin freelancing for them may or may not provide you with a Form 1099 at tax time. This form documents the amount you were paid throughout the tax year, so you can include the amount in your tax return and pay the corresponding taxes through your annual tax bill (or quarterly tax bill if you pay quarterly estimated taxes). Keep in mind, not all employers that have you submit a W-9 are required to provide you with a Form 1099 at tax time. The onous is always on you to declare all of your income on your tax return and pay taxes on that income.

What Records Do I Need?
In addition to the 1099s you might receive when the tax season begins, you need to keep records throughout the year. Keep all documents related to the money you made throughout the year as well as all expenses you incurred that you can deduct on your tax return. Learn more about tax deductions for bloggers.

Should I Consult a Tax Professional?
The best answer to this question is - yes, particularly the first year you work as a freelance blogger. Not only can a tax professional help you classify your blogging business, but he or she can help you understand your individual tax situation and plan for future tax returns so you file your returns accurately while positioning yourself to receive the maximum refund or pay the lowest tax bill possible.

COLLEGE HOCKEY PICK OF THE WEEK – Thursday 4/10, 5:00 PM ET (ESPN2): NCAA Final Four semi-final, #1 Union College Dutchmen (30-6-4) vs. #3 Boston College Eagles (28-7-4). A great matchup for the National Semi-Final, Union wins in OT 4 – 3. Season to date (7-5).


(MLB, April 12) Boston Red Sox (3-3) vs. New York Yankees (4-2). Another season of The Rivalry, Yanks win this one 6 – 4.

 (NHL, April 12) Vancouver Canucks (35-32-11) at Edmonton Oilers (28-42-9), what better way to celebrate the end of the NHL season with Canada’s worst, Oilers win 4 – 3.

SCIAC Game of the Week (Sat. April 12-baseball) Whittier Poets (18-10) vs. California Lutheran Kingsmen (22-6). First place on the line, Kingsmen win 8 – 5.

2014 Season to date (22-25), ouch!


wamble \WOM-buhl, -uhl, WAM-\, verb:
1. to move unsteadily.
2. to feel nausea.
3. (of the stomach) to rumble; growl.
1. an unsteady or rolling movement.
2. a feeling of nausea.
“I'll have to take you there. It's a cheery sensation, you know, to find a man who has some imagination, but who has been unspoiled by Interesting People, and take him to hear them wamble.”
-- Sinclair Lewis, Our Mr. Wrenn: The Romantic Adventures of a Gentle Man, 1914

pérdida, noun
Pérdida is the noun from perder. It covers the range of meanings that loss covers in English, referring to both concrete and abstract things.
The phrase es una pérdida de tiempo means it’s a waste of time:
“Es una de pérdida tiempo y dinero.”
It’s a waste of time and money.

DRIVING THE WEEK - The White House and Democrats in the Senate this week will coordinate messaging on "paycheck fairness" and other issues (see more below) ... JPMorgan and Wells Fargo kick off bank earnings on Friday ... Consumer credit today at 3:00 p.m. expected to expand by $14.1B ... NFIB survey Tuesday at 7:30 a.m. expected to rise to 92.3 from 91.4 ... JOLTS report at 10:00 a.m. Tuesday will be closely watched for the quits rate, which dipped to 1.7% in January ...

FOMC minutes Wednesday at 2:00 p.m. may offer some detail on the decision to drop the 6.5% UE threshold for rate action ... Producer prices at 8:30 a.m. Friday expected to be up 0.1% headline and 0.2% core ... Univ. of Michigan consumer sentiment at 9:55 a.m. Friday expected to rise to 81.0 from 80.0.

Next week: Spring dessert and Dear Rink Rats.

Until Next Monday, Adios.

Claremont, CA
April 7, 2014

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