Dog Days of Summer

A special mid-summer weekend edition of Rink Rats this week, we will be back to our normal Monday schedule on August 10 and then we are off for two weeks as we will be visiting the great Midwest of these United States. Look for our guest blogs on August 17 and 24.

PEOPLE MAGAZINE SYNDROME – In a brief lapse of sound thinking I purchased a People Magazine this past week. Why? In my ongoing desire to secretly be a professional at wasting time I thought People would be a viable tool.

One problem, from the cover to the back page I did not know anyone or anything on those pages. Who is Kendra? Channing Tatum? Lil’ Kim? Cody Simpson? Mario Batali?

I am sorry…not a clue. Am I that out of touch?

I have to start attending more faculty meetings.

CAPITAL PUNISHMENT -  The U.S. Federal Reserve sent a message to the largest U.S. financial firms this week: Staying big is going to cost you. The Fed stated that the country’s eight largest banks should maintain an additional layer of capital to protect against losses, its plainest effort yet to encourage them to shrink. It also offered a reprieve to General Electric’s finance unit from more-intensive regulation, after the company promised to cut its assets by more than half. Our Heard on the Street writer John Carney notes that even though the Fed took back some ground on stress tests, it also gave a little bit on a capital surcharge.

BIG BLUE, A HARD THINK -  International Business Machines is having a hard time trying to reinvent itself as a modern technology innovator. Despite efforts to scale back on legacy hardware and push into cloud-based software and services, the century-old tech giant posted its 13th straight quarter of year-over-year revenue declines. Investors are also still not sold on the idea that companies such as IBM can successfully transition to the cloud, said one analyst. Meanwhile, Qualcomm, the world’s largest maker of chips used in mobile phones, is expected to conduct a sweeping strategic review that will look at the possibility of a breakup, among other options, after an activist investor pushed for change at the company.

TRUMP - Donald Trump lifts the veil on his empire: Donald Trump's mammoth financial disclosure report, released on Wednesday, opened the curtain on Trump's $1.4 billion in assets and how he earned the $431 million he reported making over the past 18 months. "One takeaway: it appears that Trump is a golf magnate at least as much as a real estate magnate. Trump earned at least $176.4 million from 15 golf courses in Scotland, Ireland and across the Eastern Seaboard - about 41 percent of the low-end estimate of his income since the beginning of last year." Trump also raked in royalties from licensing his name to be used on everything from hotels to mattresses, and earned a $110,000 pension from the Screen Actors Guild.

FORTUNE GLOBAL TOP 500 -  U.S. companies claimed the most spots on this year's list with 128 ... China's presence on the Global 500 continues to grow with 98 members this year, up from only 19 companies a decade ago. Banking was the industry with the most number of companies on the list, with 55, followed by petroleum refiners with 38 and automakers/parts suppliers with 34.

Top 10: 1. Walmart Stores ... 2. Sinopec Group (China) ... 3. Royal Dutch Shell ... 4. China Natural Petroleum ... 5. Exxon Mobil ... 6. BP ... 7. State Grid (China) ... 8. Volkswagen ... 9. Toyota Motor ... 10. Glencore (Switzerland).  http://fortune.com/global500/

AND BEYOND - NASA has announced the discovery of an Earth-like habitable planet, identified as Kepler-452b, about 1,400 light years away. It's been 20 years since it was proven that other stars host their own planets, and this marks the 1,030th confirmed planet in that time: http://1.usa.gov/1TTX5DZ

CHINA RESEMBLES U.S. 1929 CRASH - Bloomberg: "Chinese stocks will decline by an additional 14 percent over the next three weeks as the market demonstrates a trading pattern that mimics that of the U.S. crash in 1929, according to Tom DeMark, who predicted the bottom of the Shanghai Composite Index in 2013. ... The benchmark for mainland stocks will sink to 3,200 after plunging 8.5 percent Monday to 3,725.56 in the worst selloff in eight years, DeMark said on Monday.

"That would extend its decline since a June 12 peak to 38 percent. The gauge's moves since March are tracking those of the Dow Jones Industrial Average in 1929 when the gauge lost as much as 48 percent."

CALIFORNIA'S TEACHER SHORTAGE - California school districts face a teacher shortage, and the state doesn't have a strategy for growing its supply of high-quality teachers, a new Bellwether Education Partners report says. Districts and charter schools should play a greater role in developing their own supply of high-quality teachers, the report says. And teacher preparation programs should reframe their work to better meet the needs of schools and prospective teachers. That can include sharing and analyzing district data on hiring needs and the outcomes of program graduates, or strengthening clinical fieldwork and treating student teaching as a way to recruit prospective teachers. States should also hold teacher prep programs accountable for how they meeting the needs of districts and prospective teachers.

BIG RED – average car ownership now at a high, 11.5 years.

Even though U.S. auto makers continue to lose domestic market share, a spike in demand for heavier vehicles is leading to sales of the higher-profit automobiles.  Rising demand for pickup trucks and sport-utility vehicles, spurred by lower gasoline prices, is propelling margins at General Motors and Ford to levels more typical of German luxury car makers. In Europe, industry rivals reported contrasting quarterly results today. Volkswagen announced a slip in earnings, while Peugeot said that it had turned a profit for the first time since 2011. In Japan, Nissan also beat estimates to report a 36% jump in its first-quarter net profit.

AS THE FED TURNS - The waiting game continues. The U.S. Federal Reserve kept rates near zero but cited progress in the job market. That means a rate increase in September remains on the table, though inflation is an ongoing concern. This week’s statement from the Fed reinforced analysts’ projections that further rate increases will likely be measured amid a sluggish global outlook, soft U.S. inflation and accommodating monetary policy around the globe. There may be one thing, however, standing between the Fed and higher rates: China. Market turmoil in the country could weigh on the Fed’s deliberations.

BIDEN WORLD MIND MELD - Lot of chatter about a Joe Biden presidential campaign over the weekend spurred by a Maureen Dowd column and subsequent NYT piece. This is from a person in close touch with Biden world, based on many conversations with insiders over two years: "The Vice-President is the ultimate political animal, and political animals are constantly evaluating their opportunities. The Joe Biden pictured in What It Takes, the classic presidential campaign book about the 1988 presidential race, is a guy who desperately wants the ultimate prize. ...

Biden came from a dynastic political family long before anyone ever heard of Hillary Clinton. Once that bug bites you, you have it for life. Despite West Wing staff attempts to clip his political wings, Biden has a core group of very capable loyalists who are ready to jump at the chance to make him President.

His senior consigliere, former Senator Ted Kaufmann, leads the pack, but he also has an experienced hand on staff in Steve Ricchetti, his current Chief-of-Staff and a former Deputy Chief-of-Staff for President Bill Clinton. There is no doubt that his family wants him to do it, and that he would like nothing more. Given the seemingly early Democratic Party consensus around Hillary's candidacy, he and his team decided to take a pass on an active race, but they always understood that if Hillary implodes, the alternative would not be Sanders or O'Malley. No one is paying more attention to her high negatives in key states than Biden and his people.

Later this summer the entire Biden family will be vacationing together, and topic number one will be whether Joe should run. ... If Hillary falters on her own (as she appears to be doing), Biden would escape the epithets hurled his way by her loyalists that would blame him for standing in the way of her historic candidacy. Instead, he becomes the hero who saves the Party from an electoral debacle. It's a tricky business that requires precise timing to work. He cannot afford to be perceived as the 'unseen hand' behind her collapse.

Beau Biden's desire to see his dad in the race has been campaign fodder for weeks now. Does anyone really think that leaking Beau's deathbed wishes is an accident? In the end, Joe may not run, but only a fool would think he is not actively considering it. Hillary is no fool. ... And Biden's folks see the anemic fundraising of Priorities USA, Hillary's so-called SuperPac, as an opening for their own fundraising.

POLITICS 101 - The latest NBC/WSJ poll explains the rise of Trump and Sanders and the big problems facing Hillary Clinton, Jeb Bush and every other establishment candidate. The economy is growing around 2.5 percent and creating jobs at a solid clip but people just don't feel like things are improving or that the U.S. is headed in the right direction. Slack wages explain some of it. But a lot of it is still hangover from the financial crisis and recession. The so-called "animal spirits" that drive better economic cycles - on both the corporate and consumer front - have just never emerged during this recovery. And they may never do so. It's hard to see any development likely to shake the national malaise. And a government shutdown battle and possible debt limit crisis loom this fall. Along with Fed rate hikes.

All this presents both big hurdles for Clinton, Bush and the rest as well as big opportunities. If any candidate can sell Americans on an optimistic vision for better days ahead they will likely sail into the White House. It's not going to be Donald Trump or Bernie Sanders. Trump's negatives are sky-high and Sanders is a socialist. But beyond them it is completely wide open. The GOP debate Thursday will be the first big chance for Bush, Rubio, Walker and the rest to take their shot at both exciting the base and convincing an angry electorate that America still has a new chapter and it's not far off.

COLLEGE CHRONICLES – Adjuncts at Whittier College gained some significant improvements to their working conditions in their first union contract, they announced late last week. They’ll see an increase in pay from $1,150 per credit hour to $1,550 by fall 2016, plus a $300 course cancellation fee within 21 days of the start of classes and pro-rated pay for any classes actually taught. A professional development fund also has been established.

 The Service Employees International Union-affiliated adjuncts also gained more job security, such as 1-year appointments starting with the second year of service (up from semester-to-semester appointments). The contract includes additional protections for reappointment and evaluation and a “just cause” standard for discipline and dismissal.

 Whittier adjuncts make up the third SEIU-related part-time faculty union to achieve a contract since SEIU began its Adjunct Action campaign, a major push to organize adjuncts across metro areas. Adjuncts at Tufts and Lesley universities saw similar gains in their first contracts. Dozens of other new unions are negotiating their first contracts.

Whittier President Sharon Herzberger said in an emailed statement that the college and SEIU "have been hard at work for about a year to reach a fair and mutually beneficial agreement. We look forward to continuing our constructive relationship with the union and our talented group of adjunct professors as we prepare to welcome our students in early September."

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this weekend to: Tony Bennett (89) New York, NY, John Landis (65) Los Angeles, CA, Tom McGuire …famous SLU alumnus & humanitarian, POTUS (54) Washington D.C., Martin Sheen (75) Malibu, CA.

RETIREMENT – Congrats to John Stewart’s final week at Comedy Central, he will be missed.

THE SWAMI’S WEEK TOP PICKS –

(MLB, August 8) Boston Red Sox (48-61) 4 at Detroit Tigers (53-55) 5

(Saratoga, Whitney Stakes August 8) $10.00 to win on Tonalist, John Velazquez the jockey

Season to date (63-32)

MARKET WEEK – U.S. stock futures were searching for direction to start the new month and new week, as Greek stocks finally reopened and promptly tanked. The S&P 500 gained nearly 2 percent in July. Investors looking for Fed clues await Friday's government employment report. The Athens stock market plunged today, reopening for the first time in five weeks. It dropped more than 20 percent at the open. Greek banking stocks were the worst hit.

Next week: College football preseason picks and time to get out of Dodge.

Until Next Monday, Adios.

Claremont, CA

August 6, 2015

#VI-9-271

CARTOON OF THE WEEKEND – Roz Chast