Wednesday, February 24, 2016


I am not a scientist, not even close, but I enjoy science; the wonder and mystery of it all. A recent scientific story has grabbed my attention: Gravity.

More than 300 years ago, Isaac Newton said that any two objects that have mass are attracted to each other and held together by a force.

And that force is what Newton called gravity. He could calculate it, but he couldn’t explain where gravity came from. That is how things have stayed for more than 200 years: Until Albert Einstein showed up.

Einstein thought about gravity in a fundamentally different way. Here’s where things get fun. I want you to close your eyes. Imagine a large rubber sheet, like a trampoline. Now drop a large metal ball onto it. The ball causes the sheet to bend beneath it, forming a dimple. The bigger the ball, the bigger the dimple.

OK, scale it up. Now the ball is the Sun, and it’s sitting not on a rubber sheet, but rather in a four-dimensional fabric — what Einstein called space-time.

Masses like the Earth or the Sun bend the space-time around them, and by bending the space-time around them, they effectively attract nearby objects. That is how Einstein understood gravity — gravity is what happens when objects bend space-time.

Einstein saw it as one of the four fundamental forces of our universe — including electromagnetism and the two forces at work inside atoms.  But even though gravity is the force that is most obvious in our lives, it turns out that gravity is the weakest. So to see its effect, you need something dramatic — something that creates massive ripples in space-time, like waves moving out from a rock dropped in a pond. In fact, Einstein called these gravitational waves.

If you were to turn up the amplitude of a gravitational wave beyond anything which we think is reasonable to expect, eventually you would feel it as something which would stretch you from head to toe while squishing you from side to side, and then reverse in polarity and squish you from head to toe and stretch you from side to side. But while Einstein predicted gravitational waves, he never observed them. The tools just didn't exist. Until today.

A couple of weeks ago, a team of some 1,000 researchers from the US and around the world announced the first ever direct detection of gravitational waves.

"It's just exhilarating," says Gabriela Gonzalez, a physicist at Louisiana State University and a spokesperson for the project called LIGO (the Laser Interferometer Gravitational-Wave Observatory). "Here, we detected the space-time around us wobbling, getting distorted, compressed and stretched for a fraction of a second. There’s so much to learn now!"

And how these gravitational waves were detected is nothing short of incredible. The LIGO team built two giant L-shaped detectors in Louisiana and Washington state. The arm of each L is two-and-a-half miles long.

The arms of this L are these concrete bunkers and under the concrete bunker, we have a tube so that we can suck all the air out — it’s a vacuum tube. The team have tested equipment for the LIGO project in their lab at MIT. The lab is about the size of a basketball court, and a giant metal tube with a laser in it travels its length. A lot of what’s here and inside the real bunkers is meant to keep the apparatus absolutely still. You can't have any shaking because the lasers measure the precise lengths of those two-and-a-half mile arms.

So if there were no gravitational waves, they would have the same length," astrophysicist Priya Natarajan says. "But if it turns out, because of gravitational waves causing a jiggle, one of the arms is going to have a slightly different length than the other." And that difference in length is really small. "We are talking about a fraction of the diameter of a proton," Natarajan says. "It’s that tiny." They’re trying to detect less than a proton difference across 2.5 miles — that’s why it’s so challenging.

And yet despite the crazy, they did it. The LIGO team used those L-shaped buildings to detect gravitational waves that were produced by a collision of two black holes more than a billion light years away. It's the first time we’ve observed this violent phenomenon in the universe — ever. It’s as if we had an enormous hearing aide, which let us pick up the sounds that the universe has been producing — we just have been deaf to these sounds up until now. In fact, you can actually convert a gravitational wave into a sound wave.

The collision sent gravitational waves rippling outwards at the speed of light. More than a billion years later, they passed through the Earth and made the arms of the detectors in Louisiana and Washington change their lengths ever so slightly.

OK, this is all cool to think about — bending space-time, shooting lasers down vacuum tunnels, colliding black holes — but beyond proving Einstein right, what’s the big deal?

Natarajan says, "It’s like opening a new window into the universe." You see, up until now, we’ve studied the stars and outer space using light or something related to it — radio waves, X-rays, microwaves. "But gravitational waves are the first step away from that to some completely new way of looking at the universe," Evans says. "It’s not a way of looking at things through light any more. It’s a way of listening to things through the disturbances they make in space-time."

"It reveals an entire new side to the cosmos," Natarajan adds. For instance, we might now be able to directly observe black holes. Because while black holes don't emit light, they do emit gravitational waves. "If you look at the universe just using gravitational waves, you’re likely to see all these jiggling black holes," Natarajan says.  And here’s the other reason this is a big deal. "Because gravity waves are not obscured by anything, we can see right through to the edge of the universe," Natarajan says. And that means we might be able to get closer than ever to observing the earliest moments of time, just after the big bang — and closer than ever to understanding how the universe came to be, and how it works.

"I actually never imagined that in my lifetime that window would open," Natarajan says. With that window now open, Natarajan says it may boost interest in another international collaboration — a joint NASA/European Space Agency project to look for different kinds of gravitational waves. All kinds of exciting possibilities lie ahead. But let’s return to today. Because it’s not every day that we get to hear (literally) the universe confirm something we first conjured up on paper a hundred years ago. "It is really hard not to be completely in awe of Einstein," Natarajan says. "Just to think that this theory came completely out of his pure thought."

KASHKARI DROPS A BOMB - Minneapolis Fed President (and ex-Goldman Sachs banker and George W. Bush Wall Street bailout mechanic) Neel Kashkari dropped a bomb on the banking industry on Tuesday with a speech in DC calling for breaking up "too big to fail" banks. In remarks at Brookings, Kashkari said the "biggest banks are still too big to fail and continue to pose a significant, ongoing risk to our economy" and promised a plan to end the problem by the end of the year."

Among possible actions, Kashkari listed : "Breaking up large banks into smaller, less connected, less important entities. Turning large banks into public utilities by forcing them to hold so much capital that they virtually can't fail (with regulation akin to that of a nuclear power plant): Taxing leverage throughout the financial system to reduce systemic risks wherever they lie.”

"Options such as these have been mentioned before, but in my view, policymakers and legislators have not yet seriously considered the need to implement them in the near term. They are transformational - which can be unsettling. The financial sector has lobbied hard to preserve its current structure and thrown up endless objections to fundamental change.”

WALMART SALES DROP - Walmart reported its first annual sales decline since at least 1980, underlining the stiff challenges it faces competing against Amazon in ecommerce while coping with the impact of the strong dollar and a loss of share at its UK Asda stores. The 0.7 per cent decline in revenue to $482.1bn* for the year ended January was due mainly to the strong dollar, without the impact of which sales would have risen 2.8 per cent. ... The fall, the worst in at least 35 years according to S&P Capital IQ data, came as the world's largest retailer said that ecommerce sales growth slowed for the fifth consecutive quarter to 8 per cent in the final three months of the year. The company blamed the deceleration on its UK, Chinese and Brazilian markets. By contrast Amazon's quarterly growth was 26 per cent despite its much larger base.

The company reduced its sales growth outlook for this fiscal year to flat from between 3-4 per cent, reflecting a worse than expected impact from currency fluctuations and loss of revenue from its store closures. Shares slid 3.1 per cent to $64.09 by close of trading in New York. The 54-year-old company, which grew into the world's largest retailer from a single store in rural Arkansas, is undertaking its biggest transformation since its inception as it tackles intensifying competition amid rapid shifts in the way consumers shop."

MOCKINGBIRD REVIEW - "When 'Mockingbird' Was New": The cover of N.Y. Times Arts section shows the full clipping of Herbert Mitgang's July 13, 1960, review of "To Kill a Mockingbird," by Harper Lee, who died last week in Monroeville, Ala., at 89: "The meaning in this novel runs even deeper because of the subject of injustice in the South. Miss Lee's original characters are people to cherish in this winning first novel by a fresh writer with something significant to say, South and North." See the image, read the review.

GOOD READS --"In Conversation: Antonin Scalia," by Jennifer Senior in the Oct 6, 2013 issue of New York Magazine: "On the eve of a new Supreme Court session, the firebrand justice discusses gay rights and media echo chambers, Seinfeld and the Devil, and how much he cares about his intellectual legacy ('I don't')."

--"Last Days," by William Finnegan in The New Yorker: "Preparing for the apocalypse in San Bernardino."

A SIGN OF THE TIMES - A group of guys, all age 40, discussed where they should meet for lunch. Finally it was agreed that they would meet at Hooters, because the waitresses had big breasts and wore short shorts.

Ten years later, at age 50, the friends once again discussed where they should meet for lunch. Finally it was agreed that they would meet at Hooters, because the waitresses were attractive. The food and service were good and the beer selection was excellent.

Ten years later, at age 60, the friends again discussed where they should meet for lunch. Finally it was agreed that they would meet at Hooters, because there was plenty of parking, they could dine in peace and quiet with no loud music, and it was good value for the money.

Ten years later, at age 70, the friends discussed where they should meet for lunch. Finally it was agreed that they would meet at Hooters, because the restaurant was wheelchair accessible and had a toilet for the disabled.

Ten years later, at age 80, the friends discussed where they should meet for lunch. Finally it was agreed that they would meet at Hooters, because they had never been there before.

Thank you to Dr. Seth Kogan (Detroit Country Day ’72) for the above piece.

MUST-READ -- "No direction home" -- From Capital & Main, a week long, in-depth look at the affordable housing crisis in California: "The scope of the problem is huge. California leads the nation in the number of severely rent-burdened households, and has the largest shortage of affordable rental homes. The Golden State has 21 of the nation's 30 most expensive rental markets -- yet at the same time, nearly a quarter of California residents live in poverty."

WOMEN AT WORK - Older women are reshaping the U.S. job market. They are working or seeking work longer than any previous generation as they look ahead to more years of life than men their age, with less accumulated wealth. Since the start of the recession in December 2007, the share of older working women has grown while the percentage of every other category of U.S. worker has declined or is flat. Overall, older Americans are better off financially than the previous generation, but would-be retirees had less time to rebuild their savings after the economic downturn. Yet the tie between financial insecurity and later retirement is difficult to prove: many working later in life are skilled workers earning higher incomes—though they do cite need for money as their reason for working.

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Jim Brown (80) Pasadena, CA; Cindy Crawford (50) Malibu, CA; Smokey Robinson (76) San Marino, CA; Cybill Shepherd (66) Studio City, CA; Maria Suffredini …famous photographer; John Travolta (62), his face is (6) Beverly Hills, CA.

HOT VIDEO - Watch the Cast of Hamilton Perform the Electrifying Opening Number-and Win a Grammy" - 4-min. video

OUT AND ABOUT – Last Friday night’s St. Lawrence vs. Yale hockey game, in New Haven, CT. (we lost 4-3), brought out some very famous Beta Theta Pi’s to the event:

From left to right: Teb Barnard (Carol Street, Franklin, Michigan), Kevin McGrath, John Greenwood, Hugh Lappe (famous hockey and baseball player and lover of The Doors).

COLLEGE HOCKEY GAME OF THE WEEK – Saturday 2/27 7:00 PM ET, HGTV: The last weekend of the regular ECAC season #12 Harvard University Crimson (15-8-4) vs. #19 St. Lawrence University Saints (16-12-4). Appleton Arena in Canton, New York will be rocking in this battle for third and fourth place in the ECAC. Saints win 5 – 3.  Season to date (6-7).


(SCIAC, Feb. 27) Baseball; University of La Verne Leopards (5-2) vs. Claremont-Mudd Republicans, Republicans prevail 7 – 4.

(NHL, Feb. 27) St. Louis Blues (35-18-9) vs. Nashville Predators (29-21-11), Nashville is fighting for a playoff, they win 2 – 1.

(NBA, Feb. 27) Miami Heat (32-24) vs. Boston Celtics (33-25), Celtics 90 – 86.

Season to date (20 -15)

DRIVING THE WEEK - Nevada GOP caucuses on Tuesday. Canada here I come, Trump Wins ... Treasury Secretary Jack Lew travels to Shanghai, China for the G-20 Finance Ministers and Central Bank Governors Meeting on February 26-27 ... House Ways and Means has a hearing at 10:00 a.m. Wednesday on the Global Tax Environment in 2016 and Implications for International Tax Reform ... House Financial Services subcommittee has a hearing at 10:00 a.m. Wednesday on "The Impact of the Dodd-Frank Act and Basel III on the Fixed Income Market and Securitizations" ... SEC has a meeting at 9:30 a.m. Thursday on small and emerging companies ... House Agriculture subcommittee has a hearing at 10:00 a.m. Thursday on review the G-20 swap data reporting goals ... House Natural Resources Committee has a hearing Thursday at 10:00 a.m. on "The U.S. Department of the Treasury's Analysis of the Situation in Puerto Rico" ... Case-Shiller home prices at 9:00 a.m. Tuesday expected to rise 0.9 percent ... Consumer confidence at 10:00 a.m. Tuesday expected to dip to 97.3 from 98.1 ...

Next week: Wall Street vs. Me Street

Until Next Monday, Adios.

Claremont, CA
February 23, 2016

CARTOON OF THE WEEK – “Pandora’s iPhone”

Monday, February 15, 2016

President's Day

President's Day, also known as Washington's Birthday. It not only honors George Washington, the first President of the United States, and Abraham Lincoln whose both birthdays are in February, but honors all the presidents. It is a federal holiday although most businesses are open (especially Heroes in Claremont, CA.), except the Post Office.

In 1879, it was originally implemented by an Act of Congress for Washington government offices as a federal holiday. It expanded to include all federal offices in 1885. It was first celebrated on Washington's birthday, February 22. Then in 1971 it changed to the third Monday of February. The first attempt to change the holiday to President's Day came in 1951 when the "President's Day National Committee" was formed. The purpose was to honor the office of the Presidency, not a particular President. It was not until the mid-1980's did the "President's Day" term appear in public.

Although George Washington's birthday is celebrated on February 22, it is observed as a federal holiday on the third Monday of February. To complicate matters, Washington was actually born on February 11 in 1731! How can that be? During Washington's lifetime, people in Great Britain and America switched from the Julian to the Gregorian calendar (something most of Europe had done in 1582). As a result of this calendar reform, people born before 1752 were told to add 11 days to their birth dates. Those born between January 1 and March 25, as Washington was, also had to add one year to be in sync with the new calendar. By the time Washington became president in 1789, he celebrated his birthday on February 22 and listed his year of birth as 1732. Upon entering office, Washington was not convinced that he was the right man for the job. He wrote, “My movements to the chair of government will be accompanied by feelings not unlike those of a culprit, who is going to the place of his execution.” Fortunately for the young country, he was wrong.

1.      George Washington (1789 – 1797)
2.      Abraham Lincoln (1861 – 1865)
3.      Franklin Delano Roosevelt (1933 – 1945)
4.      Thomas Jefferson (1801 – 1809)
5.      Theodore Roosevelt (1901 – 1909)

            44. Andrew Johnson (1865 – 1869)
            43. James Buchanan (1857 – 1861)
            42. Herbert Hoover (1929 – 1933)
            41. John Tyler (1841 – 1845)
            40. Millard Fillmore (1850 – 1853)

COLLEGE CHRONICLES – A $2 BILLION PELL BOOST? The Obama administration is proposing that Congress approve a $2 billion-a-year expansion of Pell Grants to finance year-round awards and a bonus for students who stay on track to graduation. Calling the $30 billion grant program for low-income students "the cornerstone of college affordability," officials said today that two new Pell proposals "will help students to accelerate progress towards their degrees ... increasing their likelihood of on-time completion." The first, "Pell for Accelerated Completion," would let full-time students earn a third grant award in an academic year. Nearly 700,000 students would receive an average $1,915 in additional aid. Some lawmakers have previously proposed making the Pell program year-round again because many full-time students exhaust their award eligibility after two semesters and can't afford to take summer courses. (The president and Congress eliminated year-round grants in a 2011 budget bill.) Legislation introduced in the House  and Senate last year went nowhere.

THE ROLE OF PLACE IN PICKING A COLLEGE: The first contribution to a new American Council Education research paper series explores how - despite the current dialogue about the importance of college choice - about 13 percent of students remain stuck in "education deserts." Such areas have just one community college or no broadly accessible public institutions at all located nearby. But for a rising number of students bound by work or families, particularly low-income ones, location is the only deciding factor: Nearly six in 10 income freshmen attend public four-year colleges within 50 miles of their permanent home.

WHEN BERNIE SANDERS' WIFE RAN A COLLEGE : When Jane Sanders was in charge of a small private college in Vermont for seven years, it sank deep into debt while trying to expand its campus. Many students took out tens of thousands of dollars in loans to attend, but their investment was questionable: Only a third of degree holders from Burlington College earn more than the average person with a high school diploma. Jane Sanders' husband, presidential candidate Bernie Sanders, has offered a higher-education plan that would make tuition at public colleges free. But it would do little to prod colleges, public or private, to keep costs down or ensure that a college degree is worthwhile for graduates.

- Jane Sanders, who led Burlington College from 2004 to 2011, spent millions on a new campus - 33 acres along the bank of Lake Champlain - to attract more students and donations from alumni. "The idea is very common: We're going to create a new campus, that's going to drive interest and alumni giving will go up," said Alexander Holt, policy analyst at New America. The problem is that as small, private colleges compete for prestige and students they may take on too much debt and wind up worse off, Holt said.

- Bernie Sanders' higher education plan focuses on an issue that's most palpable for college graduates and dropouts: their debt, which has ballooned in recent years to $1.2 trillion. In addition to eliminating tuition at public colleges and universities, he'd lower rates on student loans for new borrowers and graduates. But his focus could backfire, experts say, because it doesn't address the costs that are the root of the problem: Colleges and universities could continue spending money on programs and amenities to attract students.

- Sanders finds himself at the epicenter of a political youth movement more powerful than any we have seen since the 1960s. In New Hampshire, he won 83 percent of voters under the age of 30. Why is an aging, rumpled socialist from earthy-crunchy Vermont is so popular? For young Americans - even college-educated ones - the future looks bleak, the American dream all the more distant. That is key to Sanders' appeal.

When asked recently what Sanders would do to make college more affordable for students at private institutions, he said "I want to increase funding to them like Pell Grants and work study.

TRAILER OF THE DAY - "House of Cards - Season 4 - Official Trailer": "Frank and Claire continue their pursuit for power, battling everyone in their way, including each other." Hits Netflix March 4

TITANIC II - The Titanic sails again: Inside the lavish £300 million replica of doomed ocean liner, which is due to set sail in 2018: "The Titanic II will stick to the incredible detail of the original ship ... with a maiden voyage planned from Jiangsu, China, to Dubai ... [and has] a small swimming pool, Turkish baths, a gym with Edwardian equipment and a squash court." With 32 images on one page

TOP SCOTUS LIST – With the death of Associate Justice Antonin Scalia RR has put together a list of favorites: [1.] D.C. Circuit Judge Sri Srinivasan ... would be the first Indian-American Supreme Court justice ... [2.] Paul Watford ... is an Obama appointee on the 9th Circuit ... spent a decade as a federal prosecutor in Los Angeles. ... [3.] Patricia Ann Millett ... sits on the D.C. Circuit and is part of a slate of three nominees Obama put forward for that court in 2013 ... [4.] Merrick Garland ... is a politically savvy Clinton appointee on the D.C. Circuit who has long been discussed as a potential Supreme Court nominee. He's well respected by lawyers and lawmakers in both parties ... [5.] Attorney General] Loretta Lynch. [6.] California Attorney General Kamala Harris ... [7.] Minnesota Sen. Amy Klobuchar ... [8.] Utah Sen. Orrin Hatch… [9.] Jacqueline Nguyen, U.S. Court of Appeals for the Ninth Circuit ... [10.] Jane Kelly, U.S. Court of Appeals for the Eighth Circuit.

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Hugh Downs (95) Hilton Head, SC.; Matt Groening (62) Pasadena, CA.; Jim Kelly (56) Buffalo, NY.; Gretchen Pugliese …famous Hockey Mom; Jane Seymour (65) Woodland Hills, CA.

IF ANY ONE CARES – “Star Wars: Episode VIII' release delayed to Dec. 2017 [from May 2017]: Disney offered no reason for the delay, but rumors have recently swirled that writer-director Rian Johnson ('Looper'), who is taking over for J.J. Abrams, is rewriting the script. Production is set to begin next month in London.

PACKING IT IN: Good news for dry times - Sierra snowpack highest in 4 years: The snowpack in the Sierra contains more water than any year since 2011 on this date, according to the California Department of Water Resources. It's a good sign, but no guarantee that the four-year drought that has left the Golden State high and dry is coming to an end, officials said. Electronic readings of the Sierra snowpack Tuesday showed a water content of 18.7 inches, or 115 percent of the historical average for Jan. 26, water resources managers said.

GOOD READS - Who Poisoned Flint, Michigan?" by Stephen Rodrick in Rolling Stone: "A writer returns home to find a toxic disaster, giant government failure and countless children exposed to lead."

--"The Real Legacy of Steve Jobs," by Sue Halpern in the NY Review of Books: "Even as a multimillionaire, and then a billionaire ... Jobs sold himself as an outsider, a principled rebel who had taken a stand against the dominant (what he saw as mindless, crass, imperfect) culture. You could, too, he suggested, if you allied yourself with Apple."

FUTURECAST – As Apple Computer sees sales slow as the Chinese market weakens. Apple is predicting its first drop in revenue in over a decade.

Apple builds secret team to kick-start virtual reality effort: Apple has assembled a large team of experts in virtual and augmented reality and built prototypes of headsets that could one day rival Facebook's Oculus Rift or Microsoft's Hololens, as it seeks new sources of growth beyond the iPhone. The secret research unit includes hundreds of staff from a series of carefully targeted acquisitions, as well as employees poached from companies that are working on next-generation headset technologies.

NO ALMOND JOY: The price of almonds may have met a slippery slope: When the price of almonds rose from around $2.50 three years ago to over $4 per pound in 2014, farmers went crazy ... Many replaced their lower-priced crops, like grapes or cotton, with fields of almonds. That flooded the market, and the price dropped to around $3 per pound. The real kicker was the strength of the dollar in 2015. It began to cost more for places like China and India to buy almonds. In turn, Asian markets are shelling out less cash for the crop.

BILLIONS - For most of past year, Facebook’s spending outpaced its revenue growth. But in the latest quarter, that dynamic reversed. The social-networking site posted more than $1 billion in quarterly net income for the first time, reflecting its ability to quickly capitalize on its popularity. Behind the investor enthusiasm: Facebook still has many untapped revenue drivers at its disposal, including video, messaging and virtual reality, analysts say. There may be challenges ahead but it is hard to argue with results like these.

COLLEGE HOCKEY GAME OF THE WEEK – Saturday 2/20 7:00 PM CT, OSN: #8 Notre Dame Fighting Irish (18-5-7) at #5 Providence Friars (21-5-4). A large Hockey East match-up, we like The Friars 5 – 4. Season to date (5-7).


(SCIAC, Feb. 20) Baseball; League play begins for 2016, Claremont-Mudd Republicans (1-3) vs. Pomona-Pitzer Endowments (4-0). PP wins 7 – 2.

(NHL, Feb. 20) Tampa Bay Lightning (30-21-4) at Pittsburgh Penguins (28-14-7), Lightning win 3 – 2.

(NBA, Feb. 20) Golden State Warriors (48-4) at Los Angeles Clippers (35-18), Clips win 94 – 90.

Season to date (18 -13)

Next week: Words of the month and Gravity.

Until Next Monday, Adios.

Claremont, CA
February 15, 2016

CARTOON OF THE WEEK – “Bernie Sanders”

Friday, February 12, 2016


Thursday February 11, 2016 – 88 degrees in Claremont, the skies are crystal clear, the 210 freeway is its’ usual parking lot, and in the world of finance the 10 year United States Treasury yield hit 1.65%

As some of my readers know the 10 year U.S. Treasury is the risk free interest rate, the standard bearer for the best credit interest on money (capital). The yield has been dropping, why? Investors are pulling out of equities (stocks) and heading to safer venues.

Why? Oil – how low can it go?  China – the slowdown in their economy to better their own consumers.  Presidential Politics – The Donald has people now actually saying…can he be our next President? AND Bernie Sanders, Mr. increase taxes to stick it to The Man. U.S. Dollar – is still very strong making US exports expensive.

Major stock indexes around the world hit multiyear lows yesterday as bank stocks led the intensifying rout, amid concerns that global central banks struggling to boost growth will worsen an already tough environment for lenders. Investors also piled into gold, seeking shelter on fears that a turn toward negative interest rates in some countries is threatening to destabilize the global financial system. A rally in energy and banking shares lifted European markets today, with the Stoxx Europe 600 up 1.8% in early trade. Meanwhile, monetary-policy makers are coming to the grim conclusion that financial markets aren’t letting them tighten financial conditions gradually. The market turmoil speaks to deeper problems and could spark a recession, even as current U.S. economic data show no recession.

We certainly do not know where or when this stock market will finally bottom and would not be surprised if the S&P ultimately breaches the 1800 level before a sustaining rally commences ... However, we do think a bottom is nearing. ... The character of a market bottom is forming. Values have been significantly cheapened, investor sentiment has turned decidedly more fearful and a potential positive catalyst of better economic news may be on the horizon.

The market selloff has gotten pretty emotional, particularly among individual investors. Recent readings from the American Association of Individual Investors show that bullishness among small investors is at its lowest level since the 'flash crash.' Who can blame them? Since the beginning of the year the S&P 500 is off about 10 percent and the small cap Russell 2000 is more than 15 percent lower. Considering the lack of good news, it's heartening to see favorable action in the Smart Money index, which tracks stock market action in the first half hour of trading and compares it to the last half hour. ... For all the terrible headlines, it appears that market action before the closing bell is much more positive than morning activity, indicating that the pros are accumulating stocks.

The global equity bear market deepened in Asian trading, with Japanese stocks headed for their worst week since 2008 amid anxiety over central banks' ability to revive the world economy. U.S. crude rose from a 12-year low. The Topix index slumped 4.1 percent in Tokyo as traders returned from holiday, pushing the regional Asian benchmark toward its steepest weekly drop since gyrations in Chinese assets at the start of the year. The index pared some of its losses as the yen weakened for the first time this week. U.S. index futures indicated gains after losses there helped the MSCI All-Country Index cap a 20 percent slide from its May record. ... Japanese Finance Minister Taro Aso said regulators will respond to market volatility if necessary after a move to negative rates failed to assuage anxieties last month.

What does this mean for Wall Street, tough times are coming. What does this mean for Main Street, the economy will not get better and we hope not worse.

COLLEGE CHRONICLES – Is the bubble on the horizon?

With money tight, UC Berkeley must 'reimagine' its future: In a message to the Berkeley community, Chancellor Nicholas B. Dirks said a "new normal" of dwindling state support would continue to squeeze one of the nation's premier public research universities, prompting the need for a sweeping review likely to bring both painful changes and some positive investments.

ILLINOIS COLLEGES IN CRISIS: If the potential for layoffs, furloughs or even a full-blown shutdown didn't have Illinois colleges worried enough, now they're bracing for accreditation sanctions. Higher education funding in the Prairie State is still tied up in an eight-month budget battle, and Barbara Gellman-Danley, president of the Higher Learning Commission, recently told Gov. Bruce Rauner and top state lawmakers that the consequences could be dire. "A criterion for accreditation is demonstration of the availability of financial, physical and human resources necessary to provide quality higher education," she said. If there are no resources, a college could ultimately lose its accreditation - and, of course, its access to federal financial aid. HLC wants all the Illinois colleges it accredits to develop a plan for students if they believe they could shut down or suspend operations in the next few months. "The lack of state funding is putting Illinois colleges and universities at serious risk and jeopardizing the future of students."

ONLINE EDUCATION - Santa Clara University's Markkula Center for Applied Ethics is offering a free online course on how to run an ethical political campaign" from Feb. 15 through June 18....The course is for anyone involved in politics including candidates, campaign staff, political consultants, and even campaign volunteers.

-- Special guest lecturers: Tom Campbell, dean of Chapman University School of Law and former five-term Republican United States Congressman; Anna Eshoo, U.S. Representative for California's 18th Congressional District; Steve Glazer, California State Senator representing the 7th District; Joe Simitian, Santa Clara County Supervisor, has served at almost every level of government including school board, city council, California State Assembly and Senate; Richard Temple, co-founder of political consulting firm McNally Temple Associates, Inc.

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Lt. Geoff Ball …our Lt. Dan; Joe Garagiola (90) Scottsdale, AZ.; John Grisham (61) McLean, VA.; Sergio Mendes (75) Sao Paolo, Brazil; Nick Nolte (75) Malibu, CA.; Burt Reynolds (80) Boca Raton, FL.; George Stephanopoulos (55) New York, NY.

LAW AND ORDER - Former Los Angeles County Sheriff pleads guilty to federal corruption charges: Lee Baca, a media-savvy lawman who used his platform as head of the nation's largest sheriff's department to travel the world touting progressive policing policies, had largely been out of sight since leaving office a year early in January 2014. He consistently dodged questions about any connection to the corruption even as other former underlings pleaded guilty or were convicted.

WEEKEND READS - The 100 Jokes That Shaped Modern Comedy," by Jesse David Fox in New York Magazine: "From the Marx Brothers to The Simpsons, Richard Pryor to Amy Schumer: 100 bits, sketches, and one-liners that changed humor forever.

USA TODAY 28th anniversary Super Bowl Ad Meter, FUNNY BONE WINS OUT: Laughter was key in this year's rivalry for consumer approval: The main advertising formula for this year's Super Bowl ... boiled down to: ... Make 'em laugh. The winning streak ended for Anheuser-Busch InBev, a 14-time Ad Meter victor which won the last three years.

--TOP 10: "[1] Hyundai: Kevin Hart keeps tabs on daughter's date ... [2] KraftHeinz: Weiner dogs race to human ketchup bottles ... [3] Doritos: Baby responds to Doritos during ultrasound ... [4] Doritos: Dogs get creative to sneak into market ... [5] Hyundai: Women in car star struck by Ryan Reynolds ... [6] Hyundai: A couple escapes hungry, talking bears ... [7] Honda: Sheep sing Queen hit heard in a Ridgeline ... [8] Audi: Retired astronaut relives thrill sports car ... [9] Budweiser: Helen Mirren lectures on drunken driving ... [10] Toyota: Bank robbers discover joy of new Prius 90.

--BOTTOM 5: "[59] SoFi: Great people deserve great loans ... [60] AstraZeneca, others: A man struggles with his constipation ... [61] Persil: Stain fighter introduces new detergent ... [62] Valeant: Xifaxan diarrhea treatment ... [63] Valeant NFL greats beat toe fungus.

NFL PICK OF THE WEEK – Our NFL season is over, congrats to John Elway and his Denver Broncos, a popular victory in Super Bowl 50. A very mediocre season for Rink Rats but always fun.  Season to date (11-10)

COLLEGE HOCKEY GAME OF THE WEEK – Saturday 2/13 7:00 PM CT, Lifetime: #2 North Dakota Fighting Sioux (22-3-3) vs. #13 University of Denver Pioneers (13-8-5). A big weekend in the WCHA, ND is too tough, 5 – 4.  Season to date (5-6).


(SCIAC, Feb. 13) Women Hoops; California Lutheran Regals (17-5) vs. Claremont Mudd Scripps Republicans (18-4) – Scripps has won 13 in a row, they will make it 14,  58 – 48.

(NHL, Feb. 13) Washington Capitals (39-9-4) vs. Dallas Stars (34-15-5), Caps continue their season roll, but look out for that first round in the playoffs, 4 – 2.

(NBA) All Star weekend, adios to Kobe.

Season to date (17 -11)

Next week: Words of the month and Gravity.

Until Next Sunday, Adios.

Claremont, CA
February 12, 2016


Saturday, February 6, 2016

The State of Rink Rats

This is the time of year for The State of the Union, The State of the State, The State of the City, The State of Mind, The State of the University, The State of the NFL, The State of whatever. How are we doing? What we want? Do we have a clue?

What is the State of Rink Rats in February 2016?

Not bad, readership is up, our network of information grows every day, our reach into the world of You Tube is developing, and we are informing and irritating people every week. The Swami had a record of predictions in 2015 that was second to none.

But we have a way to go, writing needs to get better, timeliness of publication needs to improve and above all else our mission is an ongoing effort.

FINANCE 101 -  Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly.

As a result of inflation, the purchasing power of a unit of currency falls. For example, if the inflation rate is 2%, then a pack of gum that costs $1 in a given year will cost $1.02 the next year. As goods and services require more money to purchase, the implicit value of that money falls.

Monetarism theorizes that inflation is related to the money supply of an economy. For example, following the Spanish conquest of the Aztec and Inca empires, massive amounts of gold and especially silver flowed into the Spanish and other European economies. Since the money supply had rapidly increased, prices spiked and the value of money fell, contributing to economic collapse.

Today, few currencies are fully backed by gold or silver. Since most world currencies are fiat money, the money supply could increase rapidly for political reasons, resulting in inflation. The most famous example is the hyperinflation that struck the German Weimar Republic in the early 1920s. The nations that had been victorious in World War I demanded reparations from Germany, which could not be paid in German paper currency, as this was of suspect value due to government borrowing. Germany attempted to print paper notes, buy foreign currency with them, and use that to pay their debts.

This policy led to the rapid devaluation of the German mark, and with it, hyperinflation. German consumers exacerbated the cycle by trying to spend their money as fast as possible, expecting that it would be worth less and less the longer they waited. More and more money flooded the economy, and its value plummeted to the point where people would paper their walls with the practically worthless bills. Similar situations have occurred in Peru in 1990 and Zimbabwe in 2007-2008.

Central banks have tried to learn from such episodes, using monetary policy tools to keep inflation in check. Since the 2008 financial crisis, the U.S. Federal Reserve has kept interest rates near zero and pursued a bond-buying program – now discontinued – known as quantitative easing. Some critics of the program alleged it would cause a spike in inflation in the U.S. dollar, but inflation peaked in 2007 and declined steadily over the next eight years. There are many, complex reasons why QE didn't lead to inflation or hyperinflation, though the simplest explanation is that the recession was a strong deflationary environment, and quantitative easing ameliorated its effects.

Inflation is generally measured in terms of a consumer price index (CPI), which tracks the prices of a basket of core goods and services over time. Viewed another way, this tool measures the "real"—that is, adjusted for inflation—value of earnings over time. It is important to note that the components of the CPI do not change in price at the same rates or even necessarily move the same direction. For example, the prices of secondary education and housing have been increasing much more rapidly than the prices of other goods and services; meanwhile fuel prices have risen, fallen, risen again and fallen again—each time very sharply—in the past ten years.

Inflation is one of the primary reasons that people invest in the first place. Just as the pack of gum that costs a dollar will cost $1.02 in a year, assuming 2% inflation, a savings account that was worth $1,000 would be worth $903.92 after 5 years, and $817.07 after 10 years, assuming that you earn no interest on the deposit. Stuffing cash into a mattress, or buying a tangible asset like gold, may make sense to people who live in unstable economies or who lack legal recourse. However, for those who can trust that their money will be reasonably safe if they make prudent equity or bond investments, this is arguably the way to go.

There is still risk, of course: bond issuers can default, and companies that issue stock can go under. For this reason it's important to do solid research and create a diverse portfolio. But in order to keep inflation from steadily gnawing away at your money, it's important to invest it in assets that can be reasonably be expected to yield at a greater rate than inflation.

The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.1 percent in December on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics has reported.  Over the last 12 months, the all items index increased 0.7 percent before seasonal adjustment.
Over the last 12 months, the CPI-U advanced 2.0 percent, in L.A.

IS THE MARKET ACTUALLY RIGHT? - What makes these falling prices unnerving is that it's hard to tell a simple story about what is driving them. It could be that the markets are moving according to their own internal logic, driven by money managers' psychology, with their habitual toggle between fear and greed turning back toward the former. More frightening: The markets could be pricing in some darker facts about the outlook for the world that economists don't fully understand.

In the past, when signals were so negative, there usually was a clearer story to tell. In the summer and fall of 2011, markets were tumbling on fears that the union using the euro currency would dissolve; in 2008, it was fears that the global financial system would collapse; in 2000 it was on the realization that stock prices, especially for tech companies, had gotten out of line. ... China's once-blockbuster economic growth does seem to have slowed a good deal, though it's not clear why that should have enormous effects outside China.

This writer believes there are three issues with the market: 1). China, 2). Oil, 3). Donald Trump

OVERHEARD: Bob Dole, the nation's senior Republican, tells friends he is unhappy that Mike Bloomberg might run. Dole thinks that would just elect Ted Cruz, producing a dangerously right-wing government. Dole thinks a Bloomberg candidacy would divide moderate voters with the Democratic nominee -- providing a clear path for Cruz, assuming he's the nominee.

SHOULD I CALL IN SICK? - Is there a good litmus test for when I should keep away from the office?

If you have a fever, chills, or sweats, it’s advisable to stay home. But it really depends on how you feel. What I usually tell people is to stay home if you’re so weak you can’t get your head off the pillow.

If I do go in, how do I keep everyone else from getting sick?
Wash your hands carefully—that’s one of the key factors. Cough into the crook of your elbow, not into the palm of your hand, so you won’t spread germs when you touch things.
How long do germs stick around after I cough or sneeze?
They last on doorknobs and desks for several minutes minimum, but they can persist for several hours.

Will it help to wipe down my desk?

There is a benefit to doing that. Your desk does carry germs, especially when you eat on it, like I always do. Wiping it down periodically with an alcohol-based solution is a good idea.
What about more obsessive behavior, such as opening the bathroom door with a paper towel? Or refusing to touch the elevator buttons?

People use the towels to get out of the bathroom, because other people use the bathroom and don’t wash their hands. That’s not going overboard. But the elevator buttons stuff—I touch the buttons, and I haven’t died from it yet. There are germs around. What are you going to do, live in a bubble?

Disinfect Your Desk

Stock Your Desk (and Fridge) with:

The skins are full of vitamin E, which may enhance the immune system’s response to cold and flu viruses. Pack almonds in an empty Altoids tin for portion control. Other snacks high in E you can easily store at your desk: sunflower seeds, peanut butter, and fortified whole-grain cereal.

Green tea
The polyphenols in green tea are potent antioxidants that fight off infection. But don’t add milk: It binds to the compounds, hindering their benefit.

Berries, kiwi, carrots, and red bell peppers.

All fruits and vegetables have antioxidants, but the ones with the darkest, richest colors have the most.

Greek yogurt

The probiotics in Greek yogurt make it worth stashing in the office fridge; they help your digestive system and may reduce the severity of colds. Make sure to buy only brands that contain “live and active cultures.”

Hard-boiled eggs, orange juice, and milk

Vitamin D found in these foods helps stimulate the immune system. Sunlight’s the best source of D; try taking a 10-minute walk in the afternoon.

Yes, You Really Need a Flu Shot

Americans are flooding the government with appeals to have their student loans forgiven on the grounds that schools deceived them with false promises of a well-paying career. In the past six months, more than 7,500 borrowers owing $164 million have applied to have their debt expunged under an obscure federal law that had been applied only in three instances before last year. Since the law doesn’t specify what proof is needed to demonstrate a school committed fraud, the Education Department has begun a month long negotiation to set clear rules, including when the department can go after institutions to claw back tuition money. Officials say they are still trying to grasp the potential taxpayer bill, as the cost of forgiveness could ultimately be in the billions.

HIGHER ED TOP 10: State-led student loan financing programs, campus sexual assault and degree completion incentives are among the top higher education issues likely to dominate state debates this year, the American Association of State Colleges and Universities says in a policy brief looking at 2016. The No. 1 issue on the list should come as no surprise: keeping college tuition affordable. "With mounting public alarm over the growth of tuition rates and student debt burdens, state lawmakers will likely continue to negotiate tuition freezes or tuition increase caps with higher education officials in exchange for funding increases - or, at the very least, a promise not to reduce funding. State lawmakers will also explore other avenues to ease the burden of college costs, such as increasing financial aid and reducing textbook costs," the AASCU said. The brief:

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Christie Brinkley (62) Huntington, NY; Harry Wayne Casey (65) San Francisco, CA; Gene Hackman (86) Santa Barbara, CA; Curtis Strange (61) Alexandria, VA.

WORTH LISTENING -  KQED Radio's "California Report" now running The Guardian's devastating investigative series: "The County: The Story of America's Deadliest Police force,'' a close up look at Kern County -- where 13 were killed by police in 2015. "Among all U.S. counties with five or more officer-involved killings logged by the Guardian in 2015, Kern County saw the most deaths per capita."

GOOD READ - DIANE REHM BOOK OUT LAST WEEK -- WashPost Style section cover story, "Diane Rehm, loud and clear on life, love and death," by Karen Heller (online: "Diane Rehm's next act: Using her famed voice to fight for the good death"): "Her voice sounds ancient and fragile, as though dragged through shattered glass and gravel. She was diagnosed almost two decades ago with spasmodic dysphonia, a neurological disorder that causes spasms of the vocal cords and should have axed her career. Instead, it helped distinguish her from the dulcet chorus of NPR voices. 'The Diane Rehm Show' ... is heard ... on nearly 200 stations. ...

"Now 79, ... Rehm announced last month that she plans to leave the show ... Dec. 31, giving her time for an extended victory lap. ... Her new memoir, 'On My Own,' recounts her husband's decision to end his life in June 2014 after his physician was legally barred from helping. John Rehm was diagnosed with Parkinson's disease in 2005 ... The experience sparked her advocacy in the right-to-die movement.

OUT AND ABOUT – Rink Rats good friend Joe Zanetta hosted a dinner party the other night, at the dinner he named Franklin Roosevelt and Ronald Reagan as the two best Presidents of the Twentieth Century. After some discussion and some lovely Port, our good friend changed his view to Franklin Roosevelt and Theodore Roosevelt. Common sense has prevailed.  

SUPER BOWL SUNDAY - MARK LEIBOVICH on the NFL is N.Y. Times Magazine cover for Super Bowl Sunday -- "The Membership: How Roger Goodell and the 32 owners of the N.F.L. created the most powerful sports league in American History": "As with any empire, there is a sense that for all its riches and popularity, the league is never far from some catastrophic demise. You hear talk of the N.F.L.'s 'existential' challenges over player health and safety; the nation's growing concern over concussions and degenerative brain disease; the drop in youth-football participation; lawsuits, regulatory roadblocks and disruptions to the broadcast model that the league's modern business has been built on."

NFL PICK OF THE WEEK – Sunday 2/7 6:30 PM ET, CBS: Carolina Panthers (17-1) vs. Denver Broncos (14-4). It is simple give the points (6) and take the overs (+44), Panthers 27 Broncos 20. Season to date (11-9)

COLLEGE HOCKEY GAME OF THE WEEK – Saturday 2/6 5:00 PM ET, FSD: #5 Michigan Wolverines (16-4-4) at Michigan State Spartans (7-18-2), down year for Sparty, but they will give Big Blue a tough game, still Michigan wins 4-3. Season to date (4-6).


(NHL, Feb. 6) Chicago Black Hawks (35-16-4) at Dallas Stars (33-14-5), Chicago 5 – 3.

(NBA, Feb. 6) Oklahoma City Thunder (38-13) at Golden State Warriors (45-4), a big Super Bowl eve matchup, Warriors win 101 - 95.

Season to date (14 -10)

MARKET WEEK - A frigid January for initial public offerings is pointing to a hard winter for fledgling companies seeking to go public. Investors and analysts attribute the dearth to the global stock-market rout of the first two weeks of the year, which signaled a broad retreat from risk by investors. The news comes as some of the biggest names in the hedge-fund industry are piling up bets against China’s currency, setting up a showdown between Wall Street and the leaders of the world’s second-largest economy. Currency headwinds have also dogged the biggest names in the technology sector and once again loom large in the current earnings season.

Alphabet Inc. (GOOG) just knocked Apple Inc. (AAPL) off its pedestal as the world’s most valuable publicly traded company. The share price of the company formerly known as Google popped in after-hours trading Monday following a strong earnings report, sending its market capitalization to $550 billion. By comparison, Apple’s market cap is currently $538.7 billion.

Apple surpassed Google back in 2010 when each company had a market value of less than $200 million. That was before Apple released the first iPad and several successive generations of the iPhone, which has become the company’s dominant product, accounting for 66 percent of its revenue. The company’s stock has been hurt by flat sales and an unclear story about what will drive its next phase of growth.

Alphabet’s earnings report for the last quarter of 2015 represented the first time the company has broken out its so-called moon-shot ventures, such as Google Fiber and its self-driving car initiative. Those ventures have little or nothing to do with the company’s core search-advertising business, but they represent some of its biggest bets on the future. Alphabet’s new corporate structure now allows their performances to be judged separately.

Next week: Words of the month and The Bubble

Until Next Sunday, Adios.

Lompoc, CA

February 6, 2016