Monday, May 26, 2014


Memorial Day is a U.S. federal holiday wherein the men and women who died while serving in the United States Armed Forces are remembered. The holiday, which is celebrated every year on the final Monday of May, was formerly known as Decoration Day and originated after the American Civil War to commemorate the Union and Confederate soldiers who died in the Civil War. By the 20th century, Memorial Day had been extended to honor all Americans who have died while in the military service.

Memorial Day is not to be confused with Veterans Day; Memorial Day is a day of remembering the men and women who died while serving, while Veterans Day celebrates the service of all U.S. military veterans.

Memorial Day is more than the holiday heralding summer.  It is a time when our nation reflects with gratitude on the sacrifice so many in uniform have made. Flags will be lowered to half-mast until noon and communities will be holding services and parades to honor our military.

But what can each of us do to keep the true meaning and spirit of Memorial Day alive?   Here are a few suggestions:

1. Take part in the National Moment of Remembrance at 3 pm
Wherever you are, stop, and give a minute of your time for awareness or prayer.

2. Be a part of your community
Before firing up the barbeque, attend one of those parades or commemorative services. Most cities will hold concerts.  If yours doesn’t, you will be able to catch the televised National Memorial Day Concert on Capitol Hill Sunday evening.

3. Purchase a poppy from a VFW member
They usually sell them for a donation in front of shopping centers.  Tie a poppy to your purse or your lapel as a reminder to all of us that this isn’t just a day to find great deals on appliances.

4. Blast the Sousa
Make a patriotic music playlist and hang the red, white, and blue.  This is the day to fly our nation’s flag but don’t stint on the bunting either.

5. Keep your family’s personal military history alive
Over the picnic table, share stories of family members who served this country. Wearing the uniform calls for sacrifice but it is also an amazing adventure and one that deserves to be documented.  If you have someone willing to reminiscence, turn on a recorder or jot down notes.  Don’t let your family’s story disappear into the murky haze of memory.

6. If you are a Veteran, please, take a moment to write your own history
Some experiences you may not feel willing to share but as time passes, your perspective might change and we, as a nation, can gain from your insight.  Plus, those service ribbons and commendations and the insignias that you earned—gather them up and please keep them safe.  Digitizing letters written during that time or photos might not be a bad idea either.

7. Donate to a charity that supports our military in ways our government doesn’t.
A good list with information and ratings as to the effectiveness of the charity is at Charity Navigator.

8. Volunteer
If you feel called to do more, consider helping the USO in its mission to help active duty personnel and their families.  The VA Hospitals also always need volunteers.  For more information, you can contact the USO here.  You can learn more about volunteering at your local VA Hospital at

Please think about this today and think about your family and friends who came before you who sacrificed their lives for you. God Bless America.

A personal remembrance to Gene Hasse, Carl Hasse, Charles Hasse, David Hasse, Richard Lewis, Harry Bigglestone, Bill Bigglestone, and Dan Oldewage.

Claremont, CA

May 26, 2014

#V-6, 215

Monday, May 19, 2014


Do you have a series of systems in your life? I do.

Sunday – Farmers’ market, Sunday papers, garage, R&R, Mad Men

Monday – Starbucks, bureaucracy

Tuesday – Bureaucracy, and more bureaucracy

Wednesday – Roady’s, Rocky’s, home office bureaucracy

Thursday – Starbucks, bureaucracy, and more bureaucracy

Friday – Golf, cocktails/dinner in the Village

Saturday – Cleaning, laundry, garden, nap

AND there are systems within each one of these systems: where to sit, how to act, proper procedures, when to fluff and fold, social media, etc., etc.

I promise, someday, no systems. Can that be a possibility????

MUST READ - Promises That Can Bend Without Breaking

Bureaucracy Part Deux - But! This is the deal we make with the world. We interact within it. We move up with the help of great managers and are hindered by crappy ones. Sometimes we get recognized and sometimes we don’t. For women, that “sometimes” seems to happen all too often. But the key question is: What is the source of your power? And, what is the source of your joy?

Your power does not come from luck. Your power comes from you, and what you invest in it every day, in the work and the sweat and the giving a damn. That is what you carry around with you, even as you walk out of your fancy top job for the last time. That is what you carry into the next thing, and there will be a next thing, because you are good and because that’s what you do. That is your capital.

POLITICS 101, 2016 - "The Bush battle within," by Maggie Haberman: "Jeb Bush's decision whether to run for president in 2016 is being driven by competing impulses within his own family. On one side is his eldest son, George P., who's unabashedly and publicly supportive of his father's potential candidacy. On the other are Jeb Bush's mother and wife, who are clearly reluctant. In between is his older brother, George W., who is passively supportive but seems to friends to be more indifferent than enthusiastic. ...

"George W. has remarked that his brother knows how difficult a campaign would be - and ... it would mean yet another rehashing of a White House record that was struggling to regain some of its sheen. ... The proud, supportive father: 'I know his father would be thrilled to see him run,' longtime George H.W. Bush spokesman Jim McGrath told POLITICO. ... The reluctant spouse ... The even more reluctant mother ... The enthusiastic son."

COMMENCEMENT 2014 – The coming week notable Commencement addresses:

May 19 – Jill Abramson, former CEO New York Times Corp.: Wake Forest University
May 19 – John Kerry, Secretary of State: Boston College
May 22 – Susan Wojcicki, CEO You Tube: Johns Hopkins University
May 23 – Fareed Zakaria, CNN International Affairs journalist: Sarah Lawrence College
May 24 – Mary Carillo, former tennis professional and sports columnist: Elon University
May 24 – Ed Helms, Actor (“The Office”): Cornell University
May 25 – Diana Nyad, swimmer: Middlebury College
May 25 – Big Bird, Actor (“Sesame Street”) – University of Phoenix

COLLEGE CHRONICLES - A beginner's guide to repaying your student loans

CORPORATE CASH – Cash, besides being king, is seen as risk-free – one of the few numbers usually taken at face value. Recent moves by some of America’s biggest companies should force a rethink of that.

At the end of 2013, S&P 500 companies had parked overseas $1.9 trillion of the profits they made outside the U.S., more than four times the level of a decade earlier. Technology, health-care and industrial sectors dominate the cash holding firms.

That cash presents a problem: Because companies want to avoid a tax hit, many are loath to repatriate it, preventing them from returning it to shareholders or otherwise deploying it at home. Letting cash sit in the bank is not very productive. It can also attract the attention of activist investors, such as Carl Ichan’s recent tussle with Apple.  Firms also can face criticism if they use tax-avoidance tactics, such as transferring intellectual-property rights to low-tax countries.

One way of using overseas cash is with a big, foreign investment. Apple’s $151 billion in cash and equivalents, $132 billion is overseas. This is proving a challenge to firms, invest in risky foreign investments or pay the 33% tax bringing cash back to the U.S.

If investors are not applying some sort of haircut to the valuations of companies with hefty amounts of cash overseas, perhaps they should be.

BONDS ARE BACK - Many investors had expected that years of easy-money policies would have led to relatively strong economic growth by now, but the obstinately sluggish economies in Europe and the U.S. are throwing central bankers for a loop. As officials signaled their continued resolve in recent days to jolt the world's largest economies out of their malaise, we report that the prospect of more money being injected into the world's bond markets—as well as policies to keep interest rates low—has acted as a green light for the world's bond buyers. Global bond rates dropped to their lowest levels of the year Wednesday, with investors piling into U.S., German and British government bonds and driving down their yields. We note that the 10-year U.S. Treasury's yield dropped to its lowest level in more than six months, while yields on 10-year German bunds fell to their lowest point in a year. "Bond bears have eggs on their faces this year," noted one money manager. And this morning's latest raft of weak data out of the euro zone only underscores the fragility of the global economic environment.

ENVIRONMENTAL DISASTER LOOMS - A large section of the mighty West Antarctica ice sheet has begun falling apart and its continued melting now appears to be unstoppable, two groups of scientists reported ... If the findings hold up, they suggest that the melting could destabilize neighboring parts of the ice sheet and a rise in sea level of 10 feet or more may be unavoidable in coming centuries. Global warming caused by the human-driven release of greenhouse gases has helped to destabilize the ice sheet, though other factors may also be involved ...

The rise of the sea is likely to continue to be relatively slow for the rest of the 21st century ... but in the more distant future it may accelerate markedly, potentially throwing society into crisis. ... 'This is really happening,' Thomas P. Wagner, who runs NASA's programs on polar ice and helped oversee some of the research, said in an interview. 'There's nothing to stop it now. But you are still limited by the physics of how fast the ice can flow.

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Mark Bigglestone …famous Oakland Raider fan, Tommy Chong (76), Joe Cocker (70), Barbara Jean Hasse ….famous Mom, Jewel (40), Patti LaBelle (70), Jim Lehrer (80).


Verb 1. Ice Hockey. to deceive (an opponent) by a fake.

“Two boys on bikes came along, deked around..”.
-- Kim Moritsugu, The Glenwood Treasure, 2003

Origin: Deke originally was a Canadian English term. It's a shortening of decoy that arose in the 1950s.

Noun, 1. strike

Huelgas are a common phenomenon in some Latin American countries:
Se avecina dentro de tres días una huelga de médicos.
Within three days there’s going to be a doctors’ strike.


NHL Stanley Cup Playoffs: Round Three winners – Montreal Canadians over the New York Rangers in seven, Los Angeles Kings over the Chicago Blackhawks in six.

NBA Playoffs: Round Three winners – Miami Heat over the Indiana Pacers in seven, San Antonio Spurs over the Oklahoma City Thunder in seven.

2014 Season to date (33-32)

MARKET WEEK - Stocks are likely to take their cue from the bond market this week, as traders worry that low yields are a warning that the economy is not springing back. U.S. stock futures were lower today, as global stocks continued to fall.

DRIVING THE WEEK -  Latest FOMC minutes out Wednesday at 2:00 p.m. will be closely read to see how many members share Janet Yellen's recently expressed concerns about the housing market ... Existing home sales Thursday at 10:00 a.m. expected to rise to 4.68M from 4.59M ... Index of leading indicators at 10:00 a.m. Thursday expected to rise 0.3 percent ... New homes sales at 10:00 a.m. Friday expected to rise to 425K pace from 384K ... Senate Banking has a hearing scheduled for Thursday on transportation infrastructure ... House Financial Services has hearing Tuesday at 10:00 a.m. on the "dangers" of FSOC's systemically significant designation process ... HFSC also has a pair of CFPB hearings scheduled for Wednesday including a morning session on allegations of "discrimination and retaliation" at the agency and in the afternoon on proposals to "improve transparency and accountability" at the agency ... Big retailers including Target, Sears and Home Depot report earnings this week.

Next week: Jack Ass of the Month and Summer begins.

Until Next Monday, Adios.

Claremont, CA

May 19, 2014

#V-5, 214

Monday, May 12, 2014


The term “bureaucracy” refers to administration by a multi-tiered hierarchy of trained, nonpolitical professionals guided by written rules (thus minimizing discretion). Historically it referred to governmental administration, but nowadays the term is applied to the administration, in the characteristic bureaucratic form, of any institution.

An institution has a mission. But the people who compose it—the bureaucrats—have personal concerns: income, power, job security, promotion, easy working conditions. There are tradeoffs among these elements of a job; in particular, income is traded off against job security, easy working conditions, and other, often nonpecuniary, benefits.

A bureaucrat is someone who thinks they are an elitist but are not. Recently this writer has had numerous encounters with bureaucracy, both in a professional and academic environment. Bureaucracy tends to work well only when it is performing relatively simple, highly familiar tasks, far removed from the entrepreneurial risk common in highly competitive fields.

It is not obvious what the solution is, especially since bureaucracy is both a necessity of and a plague upon large private as well as public institutions, including corporations. It is well known that in successful private corporations staff tends to build up until an economic downturn or other shock forces the corporation to cut staff in order to minimize costs. Until that happens staff tends to swell. Managers, their compensation geared to the span of their control, push their superiors to authorize an increase in staff, while the managers’ subordinates seek to make themselves indispensable by hoarding information and fostering personal relationships with colleagues, or sometimes with influential suppliers or customers of the corporation. For in private as in public institutions the possession of critical information is a personal asset of great value, typically hoarded by its possessor. And so it may be very difficult for even able administrators to obtain the information they need for optimal management. The bureaucracy yields up its private hoard of information only reluctantly. in exchange for autonomy, security, and privileges.

Despite the problems of bureaucracy that I have been sketching, it must be on balance an efficient means of administration or it wouldn’t be so pervasive in both the public and the private sectors. This is a depressing reflection, because bureaucracy is a function of complexity, its pathologies are amplified by complexity—and complexity is growing throughout our governmental and commercial institutions.

Simply put, bureaucracy is a pain in the a _ _.

Thank you to The Becker-Posner Blog.

THANKS FOR THE MEMORIES – Mr. Ron Clark, City of La Verne Finance officer is retiring this year after 28 years of service to the community. We had the pleasure of hosting Mr. Clark to lecture one of our M.B.A. Finance courses not too long ago. His expertise and fiscal responsibility were evident. We wish him much health and happiness in his retirement.

THE BIG MONEY: HEDGE FUND RICH GET (MUCH) RICHER - The world's 25 best-paid hedge fund managers took home a combined $21.1bn, 50 per cent more than in 2012 ... At a time when rising inequality and corporate pay is generating increasing debate on both sides of the Atlantic, David Tepper, the founder of the US hedge fund Appaloosa Management, was the world's highest earning hedge fund manager last year. ...

He took home $3.5bn and topped the list for a second consecutive year after wagering on the recovery of the US airline industry, according to the annual survey by Institutional Investor's Alpha ... Steven Cohen, founder of SAC Capital, was the second highest earning hedge fund manager, in a year when his firm was forced to pay a record $1.8bn fine to settle an insider trading case and close his fund to outside investors.

ALIBABA FILES FOR GIANT IPO - The Chinese e-commerce behemoth AlibabaGroup filed paperwork last Tuesday in the United States to sell stock to the public for the first time, in an embrace of the global capital markets that represents a coming-of-age for China's booming Internet industry. ... 'Alibaba is the fastest-growing Internet company in one of the fastest-growing economies in the world,' said Sameet Sinha, an analyst with B. Riley & Company ... 'They are like an Amazon, an eBay and a PayPal.' In the filing, Alibaba said it intended to raise $1 billion in an initial public offering - a figure used to calculate its registration fee. But the company is expected ultimately to raise $15 billion to $20 billion, which would make it the biggest American I.P.O. since Facebook's $16 billion offering in May 2012.

When it makes its debut on the New York Stock Exchange or the Nasdaq market, Alibaba is also expected to have a share price that could value the company at roughly $200 billion - more than the market value of Facebook, or eBay, although still trailing that of Google or Apple. The immense size of the offering means that Alibaba shares will probably find a home in a broad swath of mutual funds and pension funds - and thus indirectly in the portfolios of small investors around the world.

Wall Street has been eagerly awaiting the Alibaba I.P.O., seeing it as perhaps the best chance yet to buy into China's growth.

NBC LOCKS DOWN OLYMPICS - NBC Universal agreed last Wednesday to pay $7.75 billion for the exclusive broadcast rights to the six Olympic Games from 2022 to 2032, highlighting with that staggering sum the supreme value that media companies are placing on live event programming in a market disrupted by modern viewing habits ... As more viewers consume media on their own schedules ... broadcasters regard live events as the only content that compels most viewers to watch in real time, as one vast audience, without filtering out advertisers.

The Olympics have long been NBC's most prized possession, but ESPN has used its billions of dollars in annual subscriber fees to build a portfolio of enormous deals for live sports, and Fox, CBS and NBC have long-term agreements with the [NFL] ... NBC is, to an extent, using its successful Sochi template and planning to adapt along the way. An average of 21.4 million viewers watched the Sochi Games in prime time. But there were also 62 million digital users and 10 million live online video viewers.

ALL-CASH MORTGAGE DEALS ON THE RISE - All-cash home purchases are on the rise again - buoyed by retirees instead of pure speculators - signaling a shift in the way Americans view homeownership and in the mortgage market. During the year's first quarter, 33 percent of the existing homes sold in the U.S. were purchased entirely in cash. That was up from 31 percent for all of last year and 29 percent in 2012 ... Cash sales began rising sharply in the aftermath of the housing bust, mainly due to the voracious appetite of professional investors using cash to buy heavily discounted homes to rent or flip.

Now, the all-cash sales reflect a fundamental change as the housing market continues to heal. Economists and real-estate agents say the rebound in all-cash deals is bolstered by retirees who are using the equity in their existing homes to buy different homes to downsize or for rental income ... Economists and housing-market observers say mom-and-pop investors remain active in the home market even as institutional investors rein in their buying.

SPRING GARDENING - Every season brings a different set of chores in the garden. Spring is an exciting time for gardeners as preparations are made for the bounty and beauty of the garden as it awakes from winter hibernation. It can also, however, be a bit overwhelming to know how to prioritize your gardening time at this time of year. Here is a helpful list of chores that should be tended to in the spring.

For early blooming shrubs such as forsythia and viburnum, prune them as soon as blooms have passed. Early spring is also an ideal time to prune your roses.

Remove spent flowers from bulbs, but leave the rest of the plant as is for the time being.

Pull weeds from your beds and borders before they have a chance to take hold and spread.

Tend to your compost if it has been neglected over the winter. If you do not have a compost bin, spring is a great time to start one.

Garage Refrigerator
Make sure there are plenty of “cold ones” in your garage refrigerator. We find that a nice lite beer is good for spring gardening chores. Our choice – Michelob Ultra Light.

Spring is a good time to prepare your tools for the oncoming gardening season and to make any necessary repairs or new purchases. You will be happy you have done so when summer sets in.

Spring is a great time to add new plants to your garden. Be sure, however, that all threat of frost has past. Plant such things trees, shrubs, hardy annuals, and summer blooming bulbs.

Fertilize & Mulch
Fertilize and mulch beds and borders. Spring is also a good time to fertilize fruit trees. If you applied heavy winter mulch for protection from the cold, you will need to clear it away.

Stake plants that may be prone to wind damage during the unpredictable spring weather.

Lawn Care
Spring is the best time to start a new lawn from seed. For established lawns, you should start mowing in the spring, but don’t initially cut the grass very short for the first few times.

Of course, whether you start these chores in early, mid, or late spring depends on the climate where you live, taking in to account such factors as when the threat of frost has past or when the ground is thawed enough to dig. I hope these tips will give you a good idea as to where to focus your attention in your garden this spring. Enjoy!


Dear Rink Rats:
What does it take for a new graduate to get hired at an Investment Banking firm?

Leveraged to the Max.

Dear Leveraged to the Max:
The odds are tough: entry level positions for undergraduates and MBAs this year amount to less than 3% of 100,000 applicants.

The first step is usually attending an on-campus networking session or getting an informal meeting with an alum who has connections at a firm. Don’t forget the thank you email!

The next step is getting invited to a first-round interview. Rink Rats advice: “Demonstrate a passion for financial services.” Then cross your fingers you will be invited to a “superday”.

What’s a superday? A day of one-on-one interviews with employees in a particular division or group. Do not be late. Do you know where your firm’s stock is trading that day.

Did you make it? The company calls candidates with job offers. Large investment banks such as Goldman Sachs typically pay first-year analysts out of college a base salary of $70,000. The annual bonus can be equal to that amount. Good luck.

Rink Rats.

COMMENCEMENT 2014 – The coming week notable Commencement addresses:

May 12 – John  Lewis, U.S. Representative: Emory University
May 16 – Michelle Obama, First Lady: Topeka, Kansas High Schools
May 16 – Tony La Russa, former manager St. Louis Cardinals: Washington University
May 17 – Terry Gross, NPR host of Fresh Air: Bryn Mawr College
May 17 – George Wynton Marsalis, musician: Tulane University
May 18 – Christine Lagarde, Director International Monetary Fund: Smith College
May 18 – Peyton Manning, Quarterback Denver Broncos: University of Virginia
May 18 – Cecile Richards, Planned Parenthood President: Barnard College
May 18 – Grace Potter, musician and Susan Talve, founding rabbi of the Central Reform Congregation in St. Louis: St. Lawrence University

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Stephen Colbert (50), Harvey Keitel (75), George Lucas (70), Jim Nantz (55), Mort Sahl (87), George Strait (62), Mark Zuckerberg (30).

RATINGS AGENCIES BOOMING AGAIN - Six years after getting a failing grade for their role in the financial crisis, credit-rating firms are at the top of the class. Riding a global bond boom, the two biggest U.S. firms, Standard & Poor's Ratings Services and Moody's Investors Service ... this month are expected to post record first-quarter profits. Fitch Ratings said in its annual filing this month that 2013 was 'one of its best years ever.' ... Beyond the spike in bond deals, the resurgence is due largely to the absence of major changes to the industry since the crisis: The business model, in which debt issuers pay for ratings, remains in place; regulations proposed years ago are yet to be implemented; and new competitors have gotten little more than a toehold.


NHL Stanley Cup Playoffs: Round Two winners – Boston over Montreal in six, Pittsburgh over New York Rangers in seven, Chicago over Minnesota in five, and L.A. Kings over Anaheim in six.

NBA Playoffs: Round Two winners – Indiana over Washington in seven, Miami over Brooklyn in five, Oklahoma City over L.A. Clippers in six, and Portland over San Antonio in seven.

TRIPLE CROWN – The Swami's Preakness Stakes picks: (1) California Chrome. (2) Dynamic Impact, (3) Ride on Curlin, (4) Danza, (5) Kid Cruz.

2014 Season to date (26-29), ouch!

MAJOR LEAGUE BASEBALL POWER RANKINGS – We are at the quarter pole of the MLB season, our top five Power Rankings of teams:

(1). Detroit Tigers – Cabrera an off year thus far, but still the best team in baseball.
(2). San Francisco Giants – the Dodgers wish they were this good.
(3). Baltimore Orioles – Earl Weaver would be proud.
(4). Milwaukee Brewers – Milwaukee Brewers…am I dreaming???
(5). Oakland Athletics – Top starting pitching at a cheap price.

The Bottom Three –

(28). Chicago Cubs – Hapless.
(29). Los Angeles Angels – Even with Mike Trout, they stink!
(30). Los Angeles Dodgers – Overrated and over paid.

MARKET WEEK - A busy week for economic numbers gets off to a slow start today, with only the federal budget statement for April on today’s agenda. Economists are looking for a $114 billion shortfall for the month when that number is released at 2 p.m. ET. 

The pace of corporate earnings slows down considerably this week, with few names of note on the agenda for this morning. Rackspace (RAX) and Elizabeth Arden (RDEN) are among the companies set to release their numbers after today’s closing bell. Later this week, quarterly numbers from Wal-Mart (WMT), Deere (DE), Macy’s (M), SodaStream (SODA), Kohl’s (KSS), Applied Materials (AMAT), and J.C. Penney (JCP) are out, among others.

DRIVING THE WEEK -  Treasury Secretary Lew arrives in Beijing this evening ... President Obama today will hold a bilateral meeting with President Jose Mujica Cordano of Uruguay in the Oval Office ... NFIB survey Tuesday at 7:30 a.m. expected to rise to 94 from 93.4 ... Retail sales at 8:30 a.m. Tuesday expected to rise 0.6 percent, 0.5 percent ex-autos ... Empire state survey Thursday at 8:30 a.m. expected to rebound to 6.0 from 1.3 ... Consumer prices at 8:30 a.m. Thursday expected to rise 0.3 percent, 0.1 percent ex-food and energy ... Industrial production at 9:15 a.m. Thursday expected to be flat ... NAHB housing market index at 10:00 a.m. Thursday expected to rise to 49 ... Housing starts at 8:30 a.m. Friday expected to be lilted changed at 982K ... Univ. of Michigan consumer sentiment at 9:55 a.m. Friday expected to rise slightly to 84.5.

Next week: The System and words of the month.

Until Next Monday, Adios.

Claremont, CA
May 12, 2014

#V-4, 213

Monday, May 5, 2014


What is shrinkage?

Shrinkage has multiple meanings, depending on the context.
* Shrinkage (accounting) - the loss of products
* Shrinkage (statistics) - a technique to improve an estimator
* Shrinkage (casting) - a casting defect brought about by the reduction in volume of the cast material as it cools and solidifies
* Shrinkage (slang) - slang term referring to the classic Seinfeld episode, “I was in the pool!” “I was in the pool!”

Daily newspapers to College Dean’s egos, shrinkage is rampant, but more importantly Shrinkage is a driving factor in consumer economics. For those who hate watching news videos on-line, the very short version is retailers are shrinking their products while keeping the price the same. This, allegedly, inadvertently games the inflation numbers. A candy bar may remain $1.25, but it is 80% of its original size. The bag of sugar at the market went from five pounds to two kilos, which is roughly 4.5 pounds.

That last trick is common with beverages. A fifth of liquor is now sold as 500ML. A fifth is roughly 25 ounces, while 500ML is 17 ounces. They will mess with the shape of the bottle so it tricks the eye. This may sound like a small thing, but consider this. The tax on alcohol is roughly $23 per gallon. That means the booze maker saves $1.30 on taxes, plus the cost of tax collection and the cost of manufacturing his product. (Cheap liquor is not distilled. It is mixed at plants using water, flavorings and commercial alcohol.) Multiply that over a million bottles and you have real money.

I have noticed this all over the grocery market. I’m not insane so I have a sensible diet composing mostly meat, fish, eggs and dairy products. This has been true for most of my life so I tend to buy the same supplies every week. I’m an eat to live, not live to eat person. That means I can have the same thing for breakfast every day for a year if it is convenient. It also means I notice when my grocery bill changes or when my food shrinks. Since the crash, my food bill has gone up close to 30%. I could get out for about $70 a week and now it is rarely under $100. Like the price of gasoline, food is much more expensive now than a decade ago, even though we are told there has been no inflation.

That’s the fundamental dishonesty at work. We live in a time when lying about everything is so common, no one notices. Ours is a dishonestly culture. The suits who came up with the idea to shrink the food are not the first to think of it. Long ago in a country far far away I was told about the pickle maker who hired a new plant manager. Soon, the plant was much more profitable so the owner went to see how it was done. The manager told him how he increased profits by removing one pickle from each jar. That means every ten jars netted him one free jar of pickles he could sell!

The owner fired his manager. The reason was the manager was not just cheating the customers, he was cheating the owner. The “savings” were eventually going to cost the owner business. In other words, they were not savings, they were accrued costs. Somewhere down the line that accrual would reverse out and someone would have to pay, most likely the owner. This is the most basic form of intergenerational theft. That’s spending tomorrow’s profits today. It creates a liability that has to be paid tomorrow, sound familiar.

It is comforting to think that there is a limit to this. You can only shrink the food so far. You can only hide the money creating and debt spiral for so long. Mathematics says there are limits and once those limits are reached, the game is up. I’m not so optimistic. It may be comforting to think there are still enough citizens willing to fight to keep the country, but that’s probably a fantasy. The overwhelming majority want the custodial state and will fight anyone who tries to stop them. No matter how much and how often the Cult lies to them, they will trust the Cult before they trust themselves.

NOT ANOTHER ONE – Another public radio/television fundraising drive now going on here in Southern California, this is getting ridiculous. When is there not a pledge drive? Stop the madness, please.

CHINA #1??? - China to overtake U.S. as top economic power this year: the US is on the brink of losing its status as the world's largest economy, and is likely to slip behind China this year, sooner than widely anticipated, according to the world's leading statistical agencies. The US has been the global leader since overtaking the UK in 1872. Most economists previously thought China would pull ahead in 2019. ...The figures [are] the World Bank.

DON’T FAKE IT, CONFIDENCE  IS THE KEY - If you're starting a new job, speaking at an event, or otherwise stepping into a situation where you need a confidence boost, the common advice is to "fake it til you make it." The hope is that by pretending to be confident, you'll eventually internalize it and actually become so.

However, in new book "The Confidence Code," authors Katty Kay and Claire Shipman say that's about the worst thing you can do. "Confidence isn't about pretending or putting on an act," they write. "Confidence springs from genuine accomplishment and work."
The authors say the "fake it" adage is a modern adaptation of a quote by Aristotle: "Men acquire a particular quality by constantly acting a certain way." But when it comes to faking confidence, they say it doesn't help and may actually make you feel less secure, because "knowingly masquerading as something we're not makes us anxious."

Moreover, Cameron Anderson, a psychologist who works in the business school at the University of California, Berkeley, says no matter how good you are at faking it, there are always "tells." Shifting eyes, rising voice, and other body language giveaways signal that you're not what you seem. Most of us have a pretty good radar for BS, says Anderson, so bluffing could make you seem more like a phony than the confident professional you trying for.

So how do you drum up a little courage when you need it? Kay and Shipman suggest taking action. We become more confident by trying things and learning that we'll either succeed or survive the stumbles.  "Do one small thing brave thing, and then the next will be easier. And soon confidence will flow," they write. "We know — 'fake til you make it' sounds catchier — but this actually works."

THE YOUNG AND THE RESTLESS - Under the U.S. Affordable Care Act, some demographic groups are more prized than others. The economics of the law depend on whether insurers can keep prices in check by enrolling enough younger, healthier people to balance out the bills that could be racked up by the elderly, who are more likely to get sick. Data released Thursday by the Obama administration show that about 28% of people picking plans on the state and federal insurance exchanges by April 19—after most states' enrollment deadlines passed—were 18 to 34 years old, generally considered a healthy group. And though higher than previous counts, the proportion, we note, is significantly below the 40% level that some analysts consider important for holding down rates. Major insurers have offered a mixed assessment of their exchange sign-ups with some saying they are in line with projections and others indicating they are older than expected. The age data will be a key factor, as insurers are currently setting rates for 2015.

TOYOTA LEAVES SOUTHERN CALIFORNIA - From the Detroit News, Toyota sent shock waves through Southern California when it announced this past week that it’s moving its North American sales headquarters from Torrance, south of Los Angeles, to Plano, Texas, north of Dallas. The move, which is part of a broader headquarters consolidation, will cost the city of Torrance about $1.2 million in annual tax revenue and affects about 3,000 employees.

Employees who relocate are in for a surprise. Contrary to the image promulgated by both critics and boosters, Texas is not an alien planet populated by barbarians with big hair. With its cheap suburban housing and good public schools, Plano in fact offers a 21st-century version of the middle-class California dream that built towns like Torrance. It’s just been updated, with more immigrants, better restaurants and a lot more marble countertops.

In contrasting Texas and California, politicians and pundits tend to emphasize taxes and business regulation. But for most people on a day-to-day basis, the biggest difference between the two is the cost of housing. Although Plano is one of the country’s richest cities, with a highly educated population and a median income of $85,333 compared to Torrance’s $70,061, it offers a much wider range of housing options. You can pay nearly $7 million for a 5-acre estate in Plano — $3 million more than the most expensive listing in Torrance — but the average home costs less than $200,000, compared to $552,000 in Torrance. A Redfin search for three-bedroom houses costing less than $400,000 turns up 149 in Plano versus four in Torrance; lowering the threshold to $300,000 cuts the Plano supply to 73, while yielding nothing in Torrance.

Plano’s combination of inexpensive real estate and excellent public schools has cultural consequences. It allows for more traditional lifestyles, since many families don’t need a second income to live a comfortable middle-class life. Many mothers choose to stay at home or to work, often part-time, for personal fulfillment and luxuries such as family vacations. For both men and women, a life oriented around work rather than family is less common than in coastal enclaves of similarly highly educated people.

Simultaneously cosmopolitan and traditional, Plano will undoubtedly turn off some Toyota transplants. The conversational assumption that everyone belongs to a religious congregation of some kind — if not Christian, then Jewish, Muslim, Hindu or Buddhist — will create culture shock. But a lot of people will discover that they can have a lifestyle they thought was a vanished American dream. As long as that’s true, companies are going to keep moving to Texas.

COLLEGE CHRONICLES  - After Rutgers students stage a sit-in to protest her selection as commencement speaker, Dr. Condoleezza Rice withdraws, saying in a statement: "Commencement should be a time of joyous celebration ... Rutgers' invitation to me to speak has become a distraction for the university community ... I am honored to have served my country. I have defended America's belief in free speech and the exchange of ideas. ... But that is not what is at issue here. As a Professor for thirty years at Stanford University and as its former Provost and Chief academic officer, I understand and embrace the purpose of the commencement ceremony and I am simply unwilling to detract from it in any way.

The federal Department of Education's Office of Civil Rights announced last week that 55 institutions of higher learning are being investigated for possible Title IX investigations related to their handling of sexual assault and rape allegations. Institutions included: Occidental College, University of Southern California, University of Colorado (Boulder), Boston University, Harvard, Hobart and William Smith Colleges, and Swarthmore College.

COMMENCEMENT 2014 – The coming week notable Commencement addresses:

May 9 – Joe Biden, Vice President of the United States: University of South Carolina
May 10 – Fedele Bauccio, Co-Founder and CEO of Bon Appetit: Albion College
May 10 – Sean “Puff Daddy” Combs, Entrepreneur and Philanthropist: Howard University
May 10 – Rick Mastracchio, Astronaut, Currently on the International Space Station: University of Connecticut
May 10 – George Stephanopolis, Anchor, “Good Morning America”: Franklin & Marshall College
May 11 – Martin Dempsey, General, Chairman of the Joint Chiefs of Staff: Duke University
May 11 – Jay Leno, Comedian: Emerson College

SUMMER MOVIES - Summer movie preview: This summer kicks off with 'The Amazing Spider-Man 2' [last Friday], Sony's second installment of its second Spider-Man series. With two sequels and two spinoffs (for Venom and Sinister Six) planned, Spider-Man proves the intensive, high-speed nature of franchise-making ... Among ... other ... potential blockbusters: the monster re-do 'Godzilla' (May 16), the time-traveling mutant thriller 'X-Men: Days of Future Past' (May 23), the warped fairy tale 'Maleficent' (May 30), the animated sequel 'How to Train Your Dragon 2,' the Clint Eastwood-directed musical 'Jersey Boys' (June 20), the gun-toting gorilla tale 'Dawn of the Planet of the Apes' (July 11), the demigod drama 'Hercules' (July 25) and Marvel's outer-space adventure 'Guardians of the Galaxy' (Aug. 1). ...

The other Jon Favreau [wrote and directed] 'Chef' (May 9), an independent film ... about a big-name restaurant chef who loses his job and opens a food truck. ... Seth MacFarlane's 'A Million Ways to Die in the West' (May 30) and '22 Jump Street' (June 13) will offer comic relief. In 'Neighbors' (May 9), Seth Rogen and Zac Efron star as next-door rivals.
Rink Rats summer picks will be May 26.

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Billy Joe (65), Peggy Redman …famous retired educator, Sula Vanderplank …famous scientist.

APPLE FINANCE - Apple reported strong iPhone sales that defied expectations of a slowdown, and, in a nod to restive shareholders, the company added $30 billion to its stock-buyback plan, raised its dividend about 8% and declared a 7-for-1 stock split. In an interview with The Wall Street Journal, Chief Executive Tim Cook said Apple expanded its buyback program because it views its shares as undervalued. After the news hit, activist investor Carl Icahn, who has been trying to get Apple to buy back shares, took to Twitter to praise the company. For a recap of Apple's earnings call, take a look at our Digits blog. And while recent headlines about tech acquisitions have come from Google and Facebook, we note that Apple has been active, too, purchasing two dozen companies in the past year and a half. "Obviously, we're on the prowl," said Mr. Cook.

POLITICS 101 - The U.S. Republican Party has full legislative control in 26 of 50 states and holds 29 governorships heading into 2014 elections—and there is room to gain more ground. "Republicans are at something of a high-water mark," said Tim Storey, who tracks elections at the nonpartisan National Conference of State Legislatures. "However, there are still a number of states where Republicans could flip chambers and come out even stronger than they came in." The outcome could have an important impact on policy issues across the country on matters such as energy regulation, gun control and same-sex marriage. We find that five state Senates would swing to the GOP with a gain of three or fewer seats, and the party is targeting four additional state legislative chambers. Meanwhile, the Democratic Legislative Campaign Committee plans to dispatch twice as many field organizers as it did in 2012 to counteract the traditional drop-off in participation of its voting base in midterm elections.


NHL Stanley Cup Playoffs: Round Two winners – Boston over Montreal in six, Pittsburgh over New York Rangers in seven, Chicago over Minnesota in five, and L.A. Kings over Anaheim in six.

NBA Playoffs: Round Two winners – Indiana over Washington in seven, Miami over Brooklyn in five, Oklahoma City over L.A. Clippers in six, and Portland over San Antonio in seven.

TRIPLE CROWN – Congrats to The Swami on selecting California Chrome to Win The Kentucky Derby. His early line is for the colt to repeat at The Preakness. But keep your handicapping eye on Ride on Curlin as a possible challenger.

2014 Season to date (26-29), ouch!

MARKET WEEK - The inconsistent year for U.S. stocks continues, highlighted by the S&P 500 alternating between weekly gains and losses for the past nine weeks. That last happened in September 2006, and if it continues that trend with a loss this week, it would be the first 10-week alternation streak in nearly 20 years.

DRIVING THE WEEK -  President Obama today, fresh off his comedy stylings at the White House Correspondents Dinner, meets today with President Ismail Omar Guelleh of Djibouti for a bilateral meeting at the White House. ... European Commission today announces growth forecasts for the region ... ECB meets Thursday ... Non-manufacturing ISM at 10:00 a.m. expected to rise to 54.0 from 53.1 ... Senior loan officer opinion survey at 2:00 p.m. expected to show standards continue to ease ... Intl'l trade data Tuesday morning expected to show deficit falling to $40B from $42.3B ... Federal Reserve Chair Janet Yellen testifies Wednesday at 10:00 a.m. before the Joint Economic Committee and will offer her assessment of the economy ... Yellen testifies again on Thursday at 10:00 a.m. on the economy before the Senate Budget Committee.

Next week: Bureaucrats,  spring gardening and Dear Rink Rats.

Until Next Monday, Adios.

Claremont, CA

May 5, 2014

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