Monday, May 7, 2018

Green Thoughts


It is that time of year to finally shed the winter/spring doldrums of inconsistent weather and spend time in the garden. Be it a garden on the patio or a garden in a twenty by twenty-foot patch in the back yard. There is a lot to be said about the calming, relaxation of spending an hour or two working outside in the soil and weeds of a new garden.

I plant tomatoes every year, no big deal, but just those two or three plants bring a proper perspective to the stress of every day life. How much food, enough water, the proper light, all are decisions I welcome this time of year in the garden.

Gardening has long been a national passion in England and its traditions have influenced those in other countries, including America, Canada, France and even Russia. The design and study in designing a garden can be the best thing you do this time of year.

Chauncey Gardiner, the famous Peter Sellers character, in the 1979 film “Being There” explains; “… growth has its seasons.” And, yes, “there will be growth in the spring.” He explains further; “As long as the roots are not severed, all is well. And all will be well in the garden.”

You can learn plenty about dealing with life by being a gardener.

WORKPLACE - Congress: The most family-unfriendly workplace in America: The only institution constitutionally created to reflect our national values - Congress - is arguably the least family friendly institution in the country. The same people who set policy for millions of families in America serve in a job that literally splits families apart. If Congress had more family friendly rules, more women would run for office. And if more women were elected, our laws would be more conducive to the basic struggles most families face - housing, education, health and transportation.

Millennials vs. Boomers - Beset by big college loans, inherited wars and an uncertain work future, a majority of millennials say baby boomers made things worse for them — and a lot of boomers agree, according to a new Axios/SurveyMonkey poll.

Why it matters, if it persists, the generational divide could turn into political rivalry as the generations compete for limited tax dollars — millennials seeking government help as automation takes hold, and boomers insisting on promised levels of Social Security and Medicare.

The findings: 51% of millennials (18- to 34-year-olds) blame boomers (51- to 69-year-olds) for making things worse for their generation. Just 13% said boomers had improved things.

Boomers were split on the issue: 30% said policies created by their generation had made things worse, 32% said they had made things better, and 34% that they had done neither.

Days until the 2018 election: 183

CICLAVIA 2018 - People came by the thousands to enjoy the warm spring weather while bike riding with friends to celebrate the Ciclavia Earth Day on Sunday April 22. It was a fun event, with pit stops along the way in Claremont, Pomona, La Verne and San Dimas. With streets devoid of cars along the 6.5-mile route, bikers were in no hurry for the ride...or the day...to end. With hundreds of booths along the way, the festive atmosphere had something for kids of all ages.

Enjoy this video: https://youtu.be/mHA6eqPkZz8

CORD CUTTING - More customers are dropping cable TV as they turn toward streaming services like Netflix Inc., a fundamental shift in consumer behavior that was on display this week in painful earnings reports from cable and telecommunications companies.

As viewers flee traditional TV for streaming-video services, Netflix has arguably been the biggest winner, adding subscribers at home and abroad at a clip that has outpaced Wall Street’s expectations.

Other tech companies are also angling to capitalize on consumers’ changing habits. Amazon.com Inc. now has more than 100 million customers for its Prime subscription service, which includes a video offering the company has been pouring money into, including a deal on Thursday to keep streaming NFL games.

Google Inc. is ramping up its YouTube TV streaming service, an online bundle of cable channels that competes with the likes of Hulu Live and Sony PlayStation Vue.

And Facebook Inc. and Apple Inc. have each set aside as much as $1 billion for original programming meant to lure more viewers away from traditional TV.

Amazing stat: The upheaval in the pay-TV economy is stark. From the beginning of 2015 through the end of last year, nine million Americans have either cut the cord or chosen not to buy a traditional cable package when moving into new households.

KA-CHING, KA-CHING - CROSSING OVER: That new 21 percent corporate tax rate might have just landed its biggest fish so far.

The private equity power KKR announced Thursday that its board had unanimously voted to switch to corporate status in July after years as a partnership, in what Reuters called "the biggest shake-up" in the company's structure since it went public a dozen years ago. Ares Management, another private equity firm, also announced it was becoming a corporation a couple months back, though it has about a third of the market capitalization of KKR.

KKR's decision could start to answer one of the big questions set up by last year's GOP tax cut: Would more businesses become traditional C-corporations after the tax rate for those companies was slashed from 35 percent? Swarms of businesses - both small companies and titans like KKR and other big private equity firms - had increasingly been organizing as pass-throughs in the decades leading up to the new tax law, in no small part because organizing that way allows them to pay a single layer of tax. (Corporations absorb a second layer after paying out dividends to shareholders.)

KKR officials said the new setup was "designed to broaden our investor base , simplify our structure and make it easier to invest in our shares. We believe this change, together with continued strong performance, will increase our ability to generate significant long-term equity value for all of our shareholders." The firm's competitors will surely be interested in whether that's the case, but it remains to be seen whether other large pass-throughs will follow KKR's lead. The company's change "will provide a serious test case for peers Apollo Global Management LLC (APO.N), Carlyle Group LP (CG.O) and Blackstone Group LP (BX.N) as to whether the higher tax burden is offset by the market attributing a higher valuation to the stock," Reuters noted.

MICHIGAN STATE'S BOND RATING TAKES A HIT: Moody's Investors Service downgraded the university's bond rating - a move that could make it more expensive for the scandal-plagued school to borrow money it will likely need for settlement costs with 300 of Larry Nassar's victims, the Detroit Free Press reports . That could run costs into the hundreds of millions of dollars, according to the report. The ratings agency cited the unknown costs of the settlement, as well as ongoing uncertainty about senior leadership of the school, along with several investigations into the school by state and national agencies, including the Education Department.

SHARK TANK - Berkshire Hathaway bought 75 million shares in Apple — “an unbelievable company,” in Warren Buffett’s estimation — in the first quarter.

RICH GET RICHER - The largest U.S. companies found a new formula for success in the first quarter: larger pretax profits and smaller tax bills—mostly compliments of the cut in the corporate tax rate to 21% from 35%. More than half of the combined net income reported by 200 large public companies in the first quarter stemmed from a decline in their effective tax rates, a Journal analysis of quarterly financial data from Calcbench found. Through Wednesday, first-quarter after-tax earnings for S&P 500 index companies were on track to come in 25% higher than a year earlier, according to Thomson Reuters. That would mark the seventh straight quarter of per-share profit growth and the strongest gains in more than seven years.

Dear Rink Rats:

Before I married my wife two years ago, she had huge amounts of debt to her name, including large amounts of student loans. After we married, we diligently almost paid everything off, helped by my salary being three times that of my wife.

She recently asked for a divorce, saying she was taking the house and my retirement. My question is: Does the fact we paid off her debts she held before get spread evenly? Had I not paid all of her debts our net worth would be near the same with a better outcome for me.

We’ve only been married a few years, and frankly I can’t help feeling taken advantage of. The only advice I can find discusses whose responsibility the student loans would be, but now it just seems that she got me to pay all of her debts, and got some new stuff, while I threw away years of my life.

Please tell me there’s hope.

Squeezed in Fort Worth

Dear Squeezed,

I’m sorry you feel squeezed or played. But I can’t argue with that. After two years, that’s a tough break, especially given all the help you gave your wife with her student debt. That’s a particularly unusual kind of debt, in that it’s virtually impossible to discharge. So if your wife was planning to wipe out some debts with your help before she filed for divorce two years after your marriage, that was the one to wipe out first.

The good news: Texas is a community property state so, where you have not co-mingled your assets, you take out of the marriage what you brought into it. Unfortunately, that doesn’t include the money you gave your wife to pay off her loans. But if you had a home before you married, for instance, you will walk away with that. Document all your financial transactions with your wife. The court has discretion to divide community property in a way it deems fair and reasonable.

Another development in your favor: In Texas, judges don’t instruct one party to pay the other alimony if they’ve been married for fewer than 10 years. There are exceptions to this rule — if there is a minor child involved, whether there’s been domestic abuse and/or whether the partner in question has a disability — but it’s unlikely that a judge will tell you to pay your wife alimony. So whatever result you do get, from a financial perspective you will be free and clear.

Typically, the court will divide retirement plans equally between the two soon-to-be former spouses. Given the short length of your marriage and the help you gave your wife paying off her student loans, you certainly have a good chance of fighting this particular rule. You may not be entirely successful, but a good divorce attorney will advise you on how to approach this delicate matter. Your wife is divorcing you, after all, and where there is flexibility in the law, there is opportunity.

What is key is the short period of marriage, the importance of choosing a good divorce lawyer, the perils of mediation (given that you have a relatively strong hand walking into divorce court) and a forensic accountant to examine your retirement accounts both before and during your marriage.

The best thing you have going for you right now is your honest intentions going into this marriage and your (good) behavior throughout. Having examined all the details, the judge may not be able to say the same thing about your wife. Also, if I were you get out of Texas, any state represented in the Senate by Rafael Edward “Ted” Cruz is a state you want to avoid.

Sincerely, Rink Rats

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to James Baker III (88) Houston, TX.; Tony Blair (65) London, England; George Clooney (57) Santa Barbara, CA.; Chris Krich ….famous student mentor; Robb Suffredini ….famous brother-in-law.

COLLEGE CHRONICLES - The disappearing Chinese student visa, there was a 17% drop in international students in the U.S. last year — mostly due to a 28% decline in Indian students and a 24% decline in Chinese students receiving visas.

Why it matters: The downturn, which can be partially attributed to President Trump's immigration policies, could have a notable economic effect. Foreign students contributed $36.9 billion to the U.S. economy during the 2016-2017 academic year, according to the NAFSA Association of International Educators.

COMMENCEMENT 2018 –

Date                           Commencement Speaker                          Institution

05/06/18                   HANNAH STORM,  ESPN Anchor                 The Univ. of Portland

05/11/18                   OPRAH WINFREY                                            USC Annenberg

05/12/18                   CHRISTINE LAGARDE, IMF                          Claremont McKenna

05/13/18                   TIM COOK,  Apple CEO                                  Duke University

05/20/18                   DAVID McCULLOUGH                                   Providence College

05/25/18                   PRESIDENT TRUMP                                      U.S. Naval Academy

06/02/18                   ART ACEVEDO, HOUSTON POLICE           Univ. of La Verne
                                      CHIEF

06/15/18                   CONGRESSMAN JOHN LEWIS                      California Institute of Tech.

MARKET WEEK – California has reclaimed its spot as the world's fifth-biggest economy, passing the U.K. and trailing only the U.S. as a whole, China, Japan and Germany.

All economic sectors except agriculture contributed to California's higher GDP, said Irena Asmundson, chief economist at the California Department of Finance.

Financial services and real estate led the pack at $26 billion in growth, followed by the information sector, which includes many technology companies, at $20 billion. Manufacturing was up $10 billion.

California's strong economic performance relative to other industrialized economies is driven by worker productivity, said [UCLA economics professor] Lee Ohanian... The United Kingdom has 25 million more people than California but now has a smaller GDP.

Why it matters: The data demonstrate the sheer immensity of California's economy, home to nearly 40 million people, a thriving technology sector in Silicon Valley, the world's entertainment capital in Hollywood and the nation's salad bowl in the Central Valley agricultural heartland. It also reflects a substantial turnaround since the Great Recession.

As the yield on the 10-year Treasury note touched 3 percent for the first time since 2014, companies warned that the earnings cycle might have peaked. While 3 percent is meaningful on the 10-year, rates are still very low and not about to choke off growth. And it's not like we haven't been here before with people worrying that the bond vigilantes were about to exact vengeance.

Expect the 10 year Treasury yield to continue to rise gradually and to eventually climb to about 4% by 2020. ... We believe US growth will remain resilient. However, rising rates will put pressure on refinancing costs for highly leveraged companies and households.

RENT - In 2017, about half of American renters paid more than 30 percent of their income on housing, and a quarter paid more than half.

OUT AND ABOUT – SPOTTED at the Southern California Intercollegiate Athletic Conference (SCIAC) Baseball and Softball Championships this weekend at the University of La Verne: DeAnne Bland, Roger Auerbach, Kevin Marshall, Brian Clocksin, Alexis Schifff, Jennifer Dubow (Executive Director SCIAC), Jonathan Reed.

JOHN MCCAIN - As Sen. John McCain battles brain cancer and the debilitating side effects of his aggressive treatment, he's "reckoning with his history and the future, as he and a stream of friends share memories and say what needs to be said:

McCain, 81, ... has been leading conference calls with his staff in a strained voice, grinding out three-hour physical therapy sessions and rewarding himself most days with a tall glass of Absolut Elyx on ice.

No one is saying goodbye, not explicitly. ... But his visitors are telling him they love him, how much he has meant to them — and together they are taking care of unfinished business.

McCain is using a new book and documentary to reveal his regret about not selecting former Senator Joseph I. Lieberman as his running mate in 2008.

His intimates have informed the White House that their current plan for his funeral is for Vice President Mike Pence to attend the service to be held in Washington’s National Cathedral but not President Trump.

Some of his associates, though not his family, have started to quietly put out word that they want a 'McCain person' eventually appointed to fill his Senate seat, a roster that includes his wife, Cindy.

SWAMI’S WEEK TOP PICKS

MLB Game of the Week – New York Mets (17-15) vs. Philadelphia Phillies (18-15), the winner is next in line to battle the Atlanta Braves, Phillies win 6 – 2.

Season to Date (14 - 9)

DRIVING THE WEEK - House expected to pass a Congressional Review Act (CRA) bill to cancel the CFPB's "Indirect Auto Lending Rule," per Axios' Jonathan Swan ... President Trump holds a roundtable with auto industry CEOs on Friday where he is likely to get an earful on the impact of steel and aluminum tariffs and what could happen to supply chains if NAFTA blows up ...

House Science subcommittee has a hearing on blockchain on Tuesday at 10:00 a.m. ... Brookings has an event Thursday at 10:30 a.m. on economic mobility ... Consumer Prices at 8:30 a.m. Thursday expected to rise 0.3 percent headline and 0.2 percent core ... Univ. of Mich. Consumer Sentiment at 10:00 a.m. Friday expected to dip to 98.0 from 98.8.

Next Blog: Confirm or Deny.

Until next time, Adios

Claremont, California
May 7, 2018
#VIII-27-369

CARTOON OF THE WEEK – The New Yorker


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