Thursday, August 31, 2017

The Good, the Bad, and the Clueless

We are back from our summer hiatus, as our blog title indicates we had a rather uneventful break. In regard to the “Summer To Do” list you can cross off leaking faucets, clean windows, fifteen student job recommendations. But still to do; clean carpets, organize storage, organize my office, golf game rehab, and what will never happen…the beach body.

Not very impressive.

As the temperature here in Clareville hits above 100 degrees for the fourth consecutive day, it is time to start another academic year. So, another year of wonderful students, committees, “reply all” emails, the ongoing struggles of real versus academic worlds, fundraisers, lousy meeting snacks, me, myself and I,  more stories from “The Brain”, and of course where is “Cersei Lannister” these days???

OUT AND ABOUT – Well the St. Lawrence University boys had their annual summer fling this past weekend at the Ken Brousseau (St. Lawrence ’76) compound in Whitby, Ontario.

Our first snap shot is the Stanley Cup paid a visit to the St. Lawrence crew: Jacques Martin, Assistant coach of the Pittsburgh Penguins (St. Lawrence ’75) brought the cup to Paul “Cape Bretten Island” Gallagher (St. Lawrence ’77), Jeff Dillon and Murray Cawker (St. Lawrence ’76) and Scotty “Lunar” Graham (St. Lawrence ’75).

Our second shutter is taken of the crew at a brewery, minutes before they were arrested by the Ontario Provincial Police: Scott Graham, Joe O’Rourke (St. Lawrence ’76), “Caper”, Ken Brousseau, Jeff Dillon, and “The Murph”. Noticeably absent Scott “Cat” Morrison (St. Lawrence ’76) cruising in Alaska with his lovely wife Millie.

COLLEGE CHRONICLES – Happy 125th birthday to Ithaca College, Ithaca New York as they begin their school year this past week.

-        -  Nicholas B. Dirks, a former chancellor at the University of California at Berkeley, will be paid $434,000 while on leave this coming year.

POTUS, WHAT WE MISSED – President Trump's undisciplined and incendiary style has left the most powerful man in the world with few friends — not one in the United States Senate, for instance.

Trump started with a pretty clean slate but has methodically alienated:

The public: Gallup has his approval at 34%, down from 46% just after the inauguration.

Republican congressional leaders — Senate Majority Mitch McConnell in particular are going their own way on tax reform. Hill sources believe his original targets, including a 15% corporate rate, are dead.

Every Democrat who could help him do a deal.

The media.

CEOs.

World leaders.

Europe.

Muslims.

Hispanics.

African Americans.

Military leaders.

The intelligence community.

His own staff.

And who's happy?

Saudi Arabia.

Breitbart.

David Duke.

GOOD READ – “The Liberal Crackup” By Mark Lilla Wall Street Journal August 12;
Liberals should reject the divisive, zero-sum politics of identity and find their way back to a unifying vision of the common good.

GOOD READ PART DEUX - "Harvey Wasn't Just Bad Weather. It Was Bad City Planning ... Houston exulted in sprawling, free-form growth, but laissez-faire isn't the way to prepare for natural catastrophes," Peter Coy and Christopher Flagella write in Bloomberg Businessweek's  cover story:

"No city could have with-stood Harvey without serious harm, but Houston made itself more vulnerable than necessary."

"Paving over the saw-grass prairie reduced the ground's capacity to absorb rainfall. Flood-control reservoirs were too small. Building codes were inadequate. Roads became rivers, so while hospitals were open, it was almost impossible to reach them by car."
"Sprawling Houston is a can-do city whose attitude is grow first, ask questions later. It's the only major U.S. city without a zoning code saying what types of buildings can go where, so skyscrapers sometimes sprout next to split-levels. Voters have repeatedly opposed enacting a zoning law."

The big picture: "It's a minor event for the $19 trillion U.S. economy, since most of the economic activity that was interrupted will be made up later. It was a light hit for insurers, because few underwrite flood insurance and the wind damage they do cover was minimal; insurers' stock prices barely fell. The refining and petrochemical industries lining the busy Houston Ship Channel also got off fairly lightly (this time), because they've invested heavily in storm defenses."

"The impact on taxpayers is more serious, because Harvey is likely to generate tens of billions of dollars in emergency federal aid and claims on the money-losing National Flood Insurance Program ... Above all, Harvey is a humanitarian disaster."

HOW HARVEY WILL CHANGE TEXAS: The storm's most lasting legacy might be the end of the Lone Star State's rugged individualism: Texans might pride themselves on their rugged individualism, but this time, they'll have no choice but to accept years of state and federal help for the recovery. By the time Harvey leaves the city on Wednesday, Greater Houston will have been drenched with 1 trillion gallons of water and an estimated 30,000 people will be living in temporary housing. [FEMA] expects to receive at least 450,000 claims for damage caused by the storm. And early estimates point to least $150 billion in total economic losses.

LA TIMES CHANGES - Ross Levinsohn named new publisher and CEO of Los Angeles Times as top editors ousted: "In a dramatic shakeup at the Los Angeles Times, the Chicago-based parent company has installed new leadership and plans to invest more resources in the news organization to move it more quickly into the digital age. Ross Levinsohn, 54, a veteran media executive who worked at Fox and served as interim chief of Yahoo, was named publisher and chief executive of the 135-year-old news organization. ...

Jim Kirk, 52, a veteran Chicago news executive, who was publisher and editor of the Chicago Sun-Times until last week, was named interim editor of the storied newspaper. The two men replace Davan Maharaj, who has served as both editor and publisher since March 2016. Maharaj was terminated Monday morning, along with a handful of other senior editors, including Managing Editor Marc Duvoisin, Deputy Managing Editor for Digital Megan Garvey and Assistant Managing Editor of Investigations Matt Doig.

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Sean Connery (87) Glaskow, Scotland; Alexis Schiff …famous Leo 

BANK PROFITS HIT RECORD - Banks are earning more money than ever, raking in $48.3 billion in profits the second quarter of this year, according to the FDIC. That's roughly 6 percent higher than the previous record high of $45.6 billion, reached in the third quarter of last year.
Banks' net income, released by the FDIC as part of its quarterly banking profile, was also up 10.7 percent from the same quarter a year earlier. The increase in profits was due largely to higher income from interest earned on loans, the FDIC said, in the wake of multiple rate hikes by the Federal Reserve.

DOLLAR BACK - A growing investor consensus that the dollar will keep weakening is rippling around the world, fueling rallies in assets from U.S. stocks to commodities. The dollar has been suffering through one of its worst stretches in years, weighed down by scant inflation and doubts whether the Federal Reserve will raise rates soon. Mr. Trump’s election sparked a brief dollar rally, as the market counted on the implementation of his policy agenda, which includes tax cuts and infrastructure spending, to buoy the economy and the currency with it. However, with gridlock in Washington putting those policies in doubt—or at least on hold—many believe the dollar stands to fall further. Investors last week held roughly $7.9 billion in bets on a weaker dollar, the biggest bearish position since early 2013, according to data from the Commodity Futures Trading Commission.

MARKET WEEK - Where we are investing the second half of 2017:

Stocks over bonds; the latest earnings season has affirmed our positive view on equity fundamentals, and we see solid equity returns ahead in the second half. At the same time, global economic expansion and monetary policy normalization point to a gradual rise in bond yields over the next five years. Long-term rates are being held down by structural factors including plentiful global savings, providing a favorable backdrop for equities. The earnings yield (earnings per share divided by the share price, or the inverse of the price-to-earnings ratio) still looks attractive versus real (after inflation) bond yields, meaning stocks may be cheaper than they look in a low-rate world.

Non-U.S. equities over U.S. peers: We like the U.S. market, but we think higher returns can be found in emerging markets (EM), Japan and Europe. We see opportunities in EM equities, assuming no sharp changes in currency, trade or other policies. Economic reforms, improving corporate fundamentals and reasonable valuations provide support. Elsewhere, we see a number of positives supporting the Japanese market, including more shareholder-friendly corporate behavior, ongoing ultra-easy monetary policy, low valuations and solid earnings. That said, a stronger yen is a risk.

European equities have done well this year, but they are still trading at a valuation discount to U.S. peers. We believe there’s further scope for this valuation gap to close, given the European economy’s strong fundamentals and a decline in populism. But a stronger euro could slow the pace of earnings growth among European companies, and other risks include politicians not delivering on reforms, the European Central Bank (ECB) winding back its stimulus too soon and renewed political instability in Italy.

SWAMI’S WEEK TOP PICKS

NCAA Football Preseason Rink Rats Top Ten:

1). Ohio State Buckeyes                    2). Florida State Criminals
3). Alabama Crimson Tide               4). USC Trojans
5). Oklahoma Sooners                      6). Clemson Tigers
7). Penn State Nittany Lions           8). Washington Huskies
9). Stanford Cardinal                        10). Michigan Wolverines

SCIAC Football Preseason Top Five:

1). Redland Bulldogs                       2). California Lutheran Kingsmen
3). La Verne Leopards                     4). Claremont-Mudd Republicans
5). Chapman Panthers

College Football Pick of the Week – Saturday 9/2, 8:00 PM ET, ABC: #3 Florida State Criminals vs. #1 Alabama Crimson Tide, we like Alabama in this early season slug fest, 31 – 27.

D-III Football Pick of the Week – Saturday 9/2, 1:00 PM ET: #21 Alfred University Saxons vs. Ithaca College Bombers, big E-8 matchup on South Hill. IC in an upset, 24 -21.

SCIAC Game of the Week – Saturday 9/2, 7:00 PM PT: Trinity (Texas) Tigers vs. #25 Redlands Bulldogs, Redlands is the team to beat in SCIAC this season, they win this out of conference tilt,  35 – 24.

MLB Game of the Week – Boston Red Sox (73-57) at New York Yankees (70-59), Yanks are hanging in there, they win this one in the Bronx, 4 – 3.

Season to Date (46 - 25)

ON THIS DATE – Today in 1981: IBM announces they will sell a desk top personal computer.

ON THIS DATE PART DEUX - Today marks a big anniversary for the U.S. automotive industry - it was on this day 115 years ago that Cadillac was founded and that then-President Theodore Roosevelt became the first president to make a public appearance in an automobile.

Next Blog: Jack Ass of the Month and The Swami’s preseason NFL football picks.

Until September 6, Adios

Claremont, California

August 31, 2017
#VIII-12-354


CARTOON OF THE WEEK – Charles Schulz

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