Monday, June 26, 2017


Character and Communication: define an institution’s culture. This has been a central theme to many institutions undergoing changes in their management structure these recent weeks. Organizations like Ford, Uber, Harvard University, Yahoo, and many more, are struggling to find that combination of character and communication to succeed in the marketplace, as well as internally.

FINANCE 101 – Five Cs of Credit:

The five C's of credit is a system used by lenders to gauge the creditworthiness of potential borrowers. The system weighs five characteristics of the borrower and conditions of the loan, attempting to estimate the chance of default. The five C's of credit are character, capacity, capital, collateral and conditions.

This method of evaluating a borrower incorporates both qualitative and quantitative measures. Lenders look at a borrower's credit reports, credit score, income statements and other documents relevant to the borrower's financial situation, and they also consider information about the loan itself.


Sometimes called credit history, the first C refers to a borrower's reputation or track record for repaying debts. This information appears on the borrower's credit reports. Generated by the three major credit bureaus – Experian, TransUnion and Equifax – credit reports contain detailed information about how much an applicant has borrowed in the past and whether he has repaid his loans on time. These reports also contain information on collection accounts, judgments, liens and bankruptcies, and they retain most information for seven years. The Fair Isaac Corporation (FICO) uses this information to create a credit score, a tool lenders use to get a quick snapshot of creditworthiness before looking at credit reports.


Capacity measures a borrower's ability to repay a loan by comparing income against recurring debts and assessing the borrower's debt-to-income (DTI) ratio. In addition to examining income, lenders look at the length of time an applicant has been at his job and job stability.


Lenders also consider any capital the borrower puts toward a potential investment. A large contribution by the borrower decreases the chance of default. For example, borrowers who have a down payment for a home typically find it easier to get a mortgage. Even special mortgages designed to make homeownership accessible to more people, such as loans guaranteed by the Federal Housing Authority (FHA) and the Veterans Administration (VA), require borrowers to put between 2 and 3.5% down on their homes. Down payments indicate the borrower's level of seriousness, which can make lenders more comfortable in extending credit.


Collateral can help a borrower secure loans. It gives the lender the assurance that if the borrower defaults on the loan, the lender can repossess the collateral. For example, car loans are secured by cars, and mortgages are secured by homes.


The conditions of the loan, such as its interest rate and amount of principal, influence the lender's desire to finance the borrower. Conditions refer to how a borrower intends to use the money. For example, if a borrower applies for a car loan or a home improvement loan, a lender may be more likely to approve those loans because of their specific purpose, rather than a signature loan that could be used for anything.

COLLEGE CHRONICLES - PORTRAIT OF A COLLEGE PRESIDENT: Despite efforts to diversify the field, the average college president is still a white male in his 60s, who spends most of his time fundraising, according to the latest annual snapshot of college leadership by the American Council on Education. Just 30 percent of college and university presidents were women in 2016, which was up four percentage points from 2011, when 26 percent of presidents were women. The percentage of minorities holding the top job was 17 percent in 2016, up four points from 13 percent in 2011, and from 7 percent in 1986. The average president was 62 years old - a decade older than when the ACE first published the presidential snapshot 30 years ago. Most presidents said fundraising and budget management were among their most time-consuming tasks. Nearly half of them also expect to see declines in federal and state funding over the next five years.

PAUL DRAKE - In keeping with its tradition of big-name and big-bucks investigations, the University of California will pay up to $210,000 for an independent look into allegations that President Janet Napolitano's office interfered with a recent state audit into its spending habits. UC will pay the law firm of Hueston Hennigan a 'blended' rate of $595 an hour for partners who work on the investigation and $395 an hour for associates. The tab will be capped at $165,000, unless the UC regents give the OK to spend more.

HISTORY 101 - Did you know Canada has its own Paul Revere-type figure from the War of 1812, who worked against the U.S.? Laura Secord, who was actually born in Massachusetts before moving to Canada and marrying a Loyalist, walked about 20 miles from territory controlled by the U.S. to warn the British of a looming attack on this week 204 years ago.

HAPPY 150th BIRTHDAY CANADA – We have many reader’s in Canada and we wish you all Happy Birthday this Canada Day July 1.

Canada celebrates its 150th year on July 1st with celebrations from coast to coast. Canada is an incredible, culturally diverse, and beautiful country. Canada is known for many things:  see below, also, an apparent need to apologize for things… and a very handsome and popular Prime Minister (Justin Trudeau).

Canada is a country in the northern part of North America. Its ten provinces and three territories extend from the Atlantic to the Pacific and northward into the Arctic Ocean, covering 9.98 million square kilometres, making it the world's second-largest country by total area and the fourth-largest country by land area.

Following several constitutional conferences, the 1867 Constitution Act officially proclaimed Canadian Confederation on July 1, 1867, initially with four provinces: Ontario, Quebec, Nova Scotia, and New Brunswick. Canada assumed control of Rupert's Land and the North-Western Territory to form the Northwest Territories, where the MĂ©tis' grievances ignited the Red River Rebellion and the creation of the province of Manitoba in July 1870. British Columbia and Vancouver Island (which had been united in 1866) joined the confederation in 1871, while Prince Edward Island joined in 1873.

Canada is known for: maple syrup, famous Canadian inventions include the games of ice hockey, sonar, canola oil, the snowmobile, snowblowers, poutine, walkie-talkies, the foghorn, the electron microscope, the pacemaker, the alkaline battery, garbage bags, the paint roller, plexiglass, peanut butter, the pager, the Java programming language, and the Blackberry. 

Also,  Canadian favourites include: Tim Horton’s “Double-Double”, Don Cherry, Molson and Labatt Breweries, Cat Morrison, a Loonie, Crown Royal, Canadian Bacon, Beaver Tails, Jacques Martin, Nova Scotia Lobster, Peter Blair,  Red Rose Tea, Bugsy Moran, and finally one of the best things about Canada is - Multiculturalism: The greatest single thing about living in Canada is the incredible mix of peoples and cultures they have and, specifically, the way people of all ethnic and racial backgrounds mingle freely, peacefully and happily throughout the country. At the core of all this is the continual arrival of new immigrants from all parts of the world and the cultural diversity and fine cuisine, among other things, that they bring with them. This is particularly apparent in places like Toronto and Vancouver, but you can also see it these days in smaller towns and cities as well.

The key word in the above paragraph is "peacefully". Anyone who knows anything about the horrific sectarian violence that is all too common in parts of Europe (particularly the Balkans) and especially India and Africa knows just how much we should cherish such peaceful coexistence.
So Happy 150th Birthday to all our friends in Canada this week!

ADIOS – The demise this week of Uber CEO Travis Kalanick, who resigned/forced out, underscores that real jerks can eventually be found out in an institution.

Over the years, there was "a sense of shiftiness about Kalanick, a can't-quiet-put-your-finger-on-it untrustworthiness that would irk some who deal with him.

Ilya Hykinson, a Kalanick colleague at an earlier start-up, recalls: "He'd write a large dollar figure on the whiteboard, circling it and outlining it for effect, just in case somebody came by and saw it ... That's kind of a weird, sleazy move."

"Kalanick ... seemed incapable, in public or in private, of holding back ... His widely quoted whoppers sometimes had an intellectually defensible ring to them. Yet they suggested a shocking lack of empathy or, at the very least, an inability to know when to keep quiet."

MANAGEMENT 101 or THEY DON’T GET IT - The values you project, whether they're intentional or not, will quickly pollinate through your organization. Know what they are, and make sure they're what you want.

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Paula Abdul (55) Malibu, CA.; John Goodman (65) Chicago, IL.; Nicole Kidman (50) Nashville, TN.; Kris Kristofferson (81) Aspen, CO.; Carly Simon (72) Nantucket, MA,; Meryl Streep (68) Darien, CT.

HAPPY TENTH BIRTHDAY iPHONE - The decade’s statistics are pretty impressive: more than 1 billion phones sold, over 2 million apps written, more than 130 billion app downloads, $70 billion paid to app writers.

But the cultural effects are even more dramatic. With the iPhone (and Google’s imitator, Android), we became, for the first time, a society of people who were online continuously—wherever we went. Our communications blossomed from text messages to video calls, Snapchat, FaceTime, and Skype. Billion-dollar businesses like Uber, Snapchat, and Instagram sprang into existence. Distracted driving, distracted walking, distracted eating, distracted dating, and even distracted sex became things.

Steve Jobs had unveiled the iPhone onstage in January 2007, but the phone he displayed wasn’t anywhere near finished. His presentation followed a carefully scripted series of steps that had been programmed to work just for the demo. It took six more months for Apple to finish the phone—and to bring it to market on June 29.

IPHONE - Today, the iPhone is made at a number of different factories around China, but for years, as it became the bestselling product in the world, it was largely assembled at Foxconn's 1.4 square-mile flagship plant, just outside Shenzhen. The sprawling factory was once home to an estimated 450,000 workers," Brian Merchant writes in a  book excerpt published in The Guardian ."If you know of Foxconn, there's a good chance it's because you've heard of the suicides. In 2010, Longhua assembly-line workers began killing themselves. Worker after worker threw themselves off the towering dorm buildings, sometimes in broad daylight, in tragic displays of desperation - and in protest at the work conditions inside."

NEW iPAD PRO - It's definitely the best iPad and is excellent for all the things the iPad is already good at. That means browsing the Web, checking emails and gaming, but also plenty of "productivity" tasks, like drawing, sketching, and photo editing.

Software: The most important thing about the new iPad Pro is it's actually only partially being released this week. You can buy it, for sure, but the software designed to fundamentally transform the iPad into more of a serious work machine is iOS 11, which doesn't come out until the fall.

With the new iPad Pro, Apple is hoping to change the narrative around the iPad as much as the economics. Its big economic move was really the introduction of a cheaper base-model iPad earlier this year. The iPad Pro in general, and this model in particular, is Apple's effort to show that tablets are good for more than just watching movies, playing games and doing light e-mail and Web browsing. It is Apple's best iPad, not its best-selling one.

The new iPad Pro adds a bunch of nice improvements to the iPad, including faster scrolling, improved brightness and a faster processor. But the biggest improvement is fitting a larger 10.5-inch screen into the same size case. (There's also a 12.9-inch version, which I didn't review, but in a brief hands-on it felt big for anything I'd want to do on a tablet.)

As for helping take the new iPad into new echelons of productivity, that will largely have to wait for iOS 11, which is due out this fall. The free software update has some great new multitasking and drag-and-drop editing features that could make the iPad Pro a much more credible alternative to a laptop for some.

Who it's good for: Anyone in the market for a new iPad who is willing to pay top dollar for a top-notch tablet. It makes far better use of its size, filling more of its frame with screen.

Who it's not: The new iPad probably won't fully replace a laptop (at least not until iOS 11 arrives) and may be more tablet than a lot of people need if their main goal is to watch some videos and browse the Web.

The practicalities: The 10.5-inch model starts at $649 and a 12.9-inch version starts at $799. Cellular capability costs an extra $130 with 256GB and 512GB versions also available. All models are available now for pre-order and start shipping this week.

THE FIRST AMENDMENT - ... the first Watergate story by Woodward and Bernstein — on June 19, 1972. Richard Milhous Nixon announced his resignation 780 days later.

The burglars had been surprised at DNC HQ in the early morning hours of June 17, 1972.

The Post's first Watergate story, on June 18 ("5 Held in Plot to Bug Democrats' Office Here"), was by The Post's legendary police reporter, Al Lewis, who had 15,000 bylines in 50 years.

The story was above the fold, but not the lead. That was: "Both Sides Claim Victory in N. Vietnam Offensive."

NCAA IN THE NHL DRAFT - Here's a look at the 60 players/recruits taken in the NHL Draft, sorted by NCAA team and round of each pick. No St. Lawrence University team members selected this year.

SPOTTED – At Roberta’s Village Grille in La Verne, California one morning last week, Joe Zanetta and incoming Univ. of La Verne freshman Johnny Clarizio: La Salle High School graduate, Clarizio, is planning his first year at La Verne.


MLB Game of the Week (July 1) – Cleveland Indians (39-35) at Detroit Tigers (33-42). A big holiday weekend four game series at Comerica, if the Bengals do not take three of four in this series, their season is history. Tigers win 6 – 5.

CFL (Canadian Football League) – begins their 59th season this weekend (June 22 – November 4). We like to Edmonton Eskimos to win the western conference and the Ottawa Redblacks to win the eastern conference. We pick Edmonton to win their 20th Grey Cup in November.

Season to Date (44 - 20)

ON THIS DATE – June 25, 1953 Al Kaline “Mr. Tiger” played his first major league game. 

A member of the Baseball Hall of Fame. Al Kaline played his entire 22-year baseball career with the Detroit Tigers (1953 – 1974).  For most of his career, Kaline played in the outfield, mainly as a right fielder where he won ten Gold Gloves and was known for his strong throwing arm. He was selected to 18 All-Star Games and was selected as an All-Star each year between 1955 and 1967. A Career batting average of .297, 3,007 hits and 399 home runs. After hitting .294 in 1971, Kaline became the first Tiger to sign a $100,000 ($591,372 in today's dollars) contract.

Near the end of his career, Kaline also played as first baseman and, in his last season, was the Tigers' designated hitter. He retired not long after reaching the 3,000 hit milestone. Immediately after retiring from playing, he became the Tigers' TV color commentator, a position he held until 2002. Kaline still works for the Tigers as a front office official.

RINK RATS NEWS QUIZ – the answer to last week’s Rink Rats Quiz:

            Thanks in part to the rising popularity of cocktails, world-wide sales of hard alcohol
            rose 0.04% last year. Which of these, in contrast lost ground?
A.     Wine
B.     Beer
C.      Both
D.     Neither

MARKET WEEK - The Long Unwind - The Federal Reserve said last Wednesday it would raise short-term interest rates and spelled out in greater detail its plans to start slowly shrinking its $4.5 trillion portfolio of bonds and other assets this year. The moves mark the latest test of the economy’s ability to grow on its own, as the central bank dials back unprecedented stimulus measures. The quarter-percentage-point increase brings the Fed’s benchmark federal-funds rate to a range of 1% to 1.25%. The central bank has penciled in one more increase this year if the economy performs in line with its forecast. The rate decision and balance-sheet strategy signal confidence in the economic expansion, which has been unspectacular but is also the third-longest on record.

"Transformers: The Last Knight" scored a franchise-low domestic debut with an estimated $43.5 million this weekend. But the fifth installment in the series booked $123.4 million at the box office in China.

DRIVING THE WEEK – Welcome to ObamaCare Repeal Week - The policy itself is generally not in the MM wheelhouse (though it includes a large tax cut). But the resolution certainly matters for tax reform as well as the general trajectory of President Trump's first term and the backdrop for the 2018 midterm elections. It's quite possible that if the Senate passes their Obamacare repeal bill this week and the House approves it and Trump signs it, Republicans will be in significant trouble in 2018.

If anything close to the predictions for lost/no longer affordable or useful healthcare coverage come true, the party responsible for the policy will get punished. Of course Republicans will face blowback from their base if they fail on Obamacare repeal after promising for nearly a decade to get it done. And Trump will be furious. But the damage from success could turn out to be significantly worse.

On the banking front, CCAR results come out Wednesday giving banks over $50 billion an assets the signal on capital distribution plans President Trump on Monday meets with Indian Prime Minister Narendra Modi at the White House.

Senate Banking has a hearing Thursday at 10:00 a.m. on housing market finance reform House Financial Services subcommittee has a hearing at 10:00 a.m. Tuesday on equity market structure Senate Appropriations subcommittee has a hearing Tuesday at 10:00 a.m. on the SEC and CFTC budgets. House Financial Services subcommittee on Wednesday at 2:00 p.m. has a hearing on "The Federal Reserve's Impact on Main Street, Retirees, and Savings" Case-Shiller home prices at 9:00 a.m. Tuesday expected to show a gain of 0.6%. Consumer Confidence at 10:00 a.m. Tuesday expected to dip to 115.0 from 117.9.

Next Blog: Summer holiday weekend.

See you on July 3, Adios.

Claremont, California

June 26, 2017

CARTOON OF THE WEEK – Kim Warp, The New Yorker

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