In business, higher education, politics, everyday life, I have
a theory. One third of people are right on, one third have some idea what is
going on, and one third just don’t get it.
Entrepreneurs, managers, parents, teachers, and-at some point-everyone
have to explain goals and intentions to another person in order to enlist help
in achieving them. Too often, those brilliant explanations fall on seemingly
deaf ears. They just don't get it!
The dangerous ones are those who think they get it but do not.
Watch out for them.
We (the human species) worked out a long time ago how best to
get by in the world. And the theory is tantalizingly simple. It's the practice
that's a bitch.
We can quibble over who really said what (and when), but all
the major religions and schools of ethical thought (and many of the minor ones)
have come to a similar conclusion about the best way to live. Unfortunately,
most of them didn't stop at the Golden Rule, but instead tacked on a lot of
other junk about diet, fashion, and hygiene; because, let's face it, it's so
much easier to dress correctly than it is to be empathetic to another human
being.
There are some who have suggested that the propensity to think
of others helped to spur human evolution. And there's certainly a case to be
made that those who practice kindness were more likely to survive (and thus
pass on that trait). It's an interesting hypothesis, but it seems a bit of a
stretch to me, since we are one of the few species who kill and abuse our own
kind. Animals (at least within their own species) don't really seem to have a
need for the golden rule. In any case, humans probably did recognize early on
that constant retaliation rarely solved anything in the long run.
Of course, there is certainly room for debate as to whether
being "good to others" really is a rational strategy. And in our current
geo-political climate, we're not likely to agree anytime soon. But
interestingly enough, even game theory suggests that the best way to "get
along" is to lead with kindness and then respond in direct proportion to
how the other "player" reacts. Of course this strategy can still lead
to a spiral of violence, for which game theory suggests that a re-set can be
advantageous. That is, try leading with kindness again. You can sometimes catch
your opponent off guard.
So how do we deal with the one third who don’t get? Be nice,
even when they are jerks, be nice – so beware, you know who you are (I hope), I
am going to be very nice to you, deal with it!
IN SEARCH
OF BONDS - Money managers are worrying that when they need U.S.
Treasury bonds, there won’t be enough at hand. On the surface, the concern
might seem unwarranted: the U.S. bond market is the largest in the world and Treasuries
are among the most easily traded asset classes. But a buying spree by central
banks is reducing the availability of government debt for other buyers and
intensifying the bidding wars that break out when investors get jittery,
driving prices higher and yields lower. The squeeze could get worse if central
banks in Japan and Europe decide as expected to step up their stimulus efforts.
Among those feeling the worst pinch are pension funds and life insurance firms
in Japan, Europe and the U.S., but even central banks themselves are having
trouble finding all the bonds they need.
BIG BREW
- The
U.S. Justice Department has signed off on Anheuser-Busch InBev’s acquisition of
rival SABMiller, removing one of the last major hurdles standing in the way of
a roughly $108 billion deal to create a global beer giant. The antitrust
enforcers took limited action against AB InBev, putting restrictions on the
beer giant’s ability to pursue the fastest-growing part of the U.S. beer market
and limiting the Belgian-based brewer from creating incentive programs that
encourage independent distributors to sell and promote its beers over rivals.
Now AB InBev faces only one more regulatory hurdle—China—and then the deal
requires shareholder approval. But SABMiller’s board was expected to discuss
the possibility of seeking new terms from AB InBev now that the U.K.’s vote to
exit the EU has sent the pound plunging.
TECH'S
BIG LOBBYING TAB - Several tech and telecom-related groups were
among the top 20 lobbying spenders in 2016's second quarter, reports POLITICO
Influence
Here they are:
- Google (No. 9, at $4.24 million)
- AT&T (No. 10, $4.07 million)
- National Association of Broadcasters (No. 11, $3.61 million)
- Comcast (No. 13, $3.38 million)
- National Cable and Telecommunications Association (No. 17,
$3.04 million)
- Amazon (No. 18, $3 million)
BIRTHDAYS
THIS WEEK – Birthday wishes and thoughts this week to Tony Bennett (90)
Manhattan, NY; Kevin Gallagher ...famous football gambler; Wayne Knight (61) Pasadena, CA.; Tom McGuire … famous yachtsman, Donna Redman … always looks good in Pink.
COLLEGE
CHRONICLES - NEW RULES FOR ONLINE
COLLEGES: The Obama administration on Friday unveiled its long-anticipated
proposal aimed at pushing states to beef up their oversight of online college
programs. It would effectively require states to have a process for reviewing
and taking "appropriate action" on student complaints about online
programs that enroll their residents - even if the college isn't physically
located in the state.
- The department dropped from earlier drafts the most
controversial part: a provision that would have in effect required each state
to actively review and regulate each college that enrolled any of its residents
in an online course, even if the college is physically located in another
state.
- The plan also will accommodate the multi-state reciprocity
agreements aimed at making it easier for colleges that operate online programs
across multiple states to satisfy the regulatory requirements in various
jurisdictions. The largest, the National Council for State Authorization
Reciprocity Agreements, which counts 40 states as members, praised the
department's proposal:
PRIVATE
COLLEGES STRIKE BACK: The Hillary Clinton and Bernie Sanders' camps
may be celebrating their unification on a "debt-free" college
proposal, but private colleges and universities aren't breaking out the
champagne. Some are predicting dire consequences for their sector if Democrats
get their way on providing free public college. As Clinton's plan stands now,
families making up to $125,000 would be eligible for the free tuition. Patricia
McGuire, president of Trinity Washington University, said it puts small
institutions like hers "gravely at risk." She added: "We're
going to ruin some of the places where low-income students get the best
education, and are most likely to be successful."
- Sheila Bair, the president of Washington College in
Chestertown, Md., said the free tuition proposal is simply unaffordable, and
ultimately just shifts the burden to taxpayers. Bair, a moderate Republican, is
a former chairwoman of the FDIC who sounded an early alarm about the nation's
subprime lending crisis. If the Democrats' plan does move forward, Bair said
the funding should be in the form of grants to an institution of a student's
choosing - otherwise it would skew student choice away from the "unique
kind of environment" that private schools offer. "I think what would
happen is we would have to become more elitist because anybody who is not
really wealthy is going to go to take the free option," Bair said. "I
don't want us to be elitist. I want us to have a diverse student population.
GOOD READ - "Underwater in the Las Vegas Desert,
Years After the Housing Crash," by NYT's Jack Healy: "More than eight
years after rotten loans and plunging home values made Las Vegas the center of
the housing crisis, thousands of people have yet to recover." http://nyti.ms/2b1VkVn
APPLE
EARNINGS FALL - Apple Inc. said its quarterly profit fell 27
percent as the company grappled with the first prolonged slump in iPhone sales
since the product was introduced in 2007. Revenue fell for a second straight
quarter, along with sales of its flagship smartphone, which is awaiting an
expected refresh in September.
While the company reported strong sales of the smaller iPhone
SE launched in March, overall its current models have failed to meet the
booming sales of its first batch of large-screen iPhones, sapped in part by
cooling demand in China and U.S. customers holding on to handsets for longer
because of changes in carrier contracts. The results, and Apple's expectations
for the current quarter ending September, were better than what Wall Street
feared, and the stock rose more than 6 percent in after-hours trading.
PAYING
DIVIDENDS - Technology stocks that predate the internet bubble
of the late 1990s are hot again, thanks to a feature that many tech firms
deliberately avoided in those days: hefty dividends. The sight of big-name
technology companies paying large dividends is causing some double takes.
Executives and analysts often contended during the technology boom of the 1990s
that a company that paid a dividend was implicitly acknowledging limitations on
its growth potential. The wave of cash now pouring into older tech stocks
reflects investors’ willingness to pay up for investments that provide steady
income. Meanwhile, in the slowest year for U.S. IPOs since 2009, we report that
the downtrodden IPO market just can’t compete with buyers who are willing to
pay big to take potential listings off the board. More companies, from Dollar
Shave Club to oil company Centennial, are choosing a sale over a public
listing.
HOW MUCH
DOES HE MAKE??" -- State worker salary database: Now includes
2015 University of California pay, 2015 CSU pay, 2015 civil service pay, and
2014 state legislative pay. This database allows you to search the salaries of
California's 300,000-plus state workers and view up to eight years of their pay
history. http://bit.ly/2aDwxpI
REALLY? -
Paris
Hilton thinks she could be ISIS' next target. Paris Hilton says she worries a
lot about traveling the world, especially because she's a 'famous' person who
could be a 'clear target of an attack' by terrorists. Oh yes, and did I mention
Rink Rats has been nominated for a Pulitzer Prize.
REALLY?
PART DEUX – Early last week, Donald Trump picked a prolonged fight with
the parents of a dead soldier and said they shouldn't be permitted to criticize
him; he called Hillary Clinton "the devil"; said the November
election will be "rigged"; he falsely claimed he got a letter from the
NFL complaining about the debate schedule; and he said radical Islamic
terrorists are coming into the United States "by the thousands and
thousands." Trump then told a USA Today op-ed writer that he would urge
his daughter to quit a job if she were the subject of workplace harassment.
HARVARD
REPUBLICAN CLUB - won't
endorse Trump for president: The Harvard Republican Club won't be endorsing
Donald Trump, marking the first time in 128 years that the organization has not
backed the Republican nominee for president ... The organization said Trump's
platform would endanger Americans' security both at home and abroad, and his
views are not consistent with conservative principles. It also said Trump's
mocking and belittling of various groups and people is both bad politics and 'absurdly
cruel.
RIGGED – The Trump
Campaign’s full comments because they are so shocking and dangerous: "I
think we have widespread voter fraud, but the first thing that Trump needs to
do is begin talking about it constantly ... He needs to say for example, today
would be a perfect example:
"'I am leading in Florida. The polls all show it. If I
lose Florida, we will know that there's voter fraud. If there's voter fraud,
this election will be illegitimate, the election of the winner will be
illegitimate, we will have a constitutional crisis, widespread civil
disobedience, and the government will no longer be the government"
The Trump Campaign is laying the groundwork for Trump to
challenge the legitimacy of the 2016 election if he loses and suggesting there
could be a "bloodbath." To this writer this seems to come close to
the legal definition of fomenting insurrection against the US government. Short
of that, all of the talk of a "rigged" election - with no evidence
whatsoever and the election still months away - is deeply corrosive to a
political system already deeply polarized and under significant strain. The
last thing the US needs is for a sizable minority of the population to begin
2017 believing the election was stolen.
Such a scorched earth strategy from Trump would also have
major economic repercussions. Washington is already dysfunctional and further
damaging a weak economy. Should Clinton win, she would have at least some
window to try and pass meaningful economic legislation that could combine badly
needed infrastructure and tax reform. That could prove impossible if DC is even
more divided than it is now. There is also likely to be a recession at some
point in the next president's first term. The Fed will have little room to
fight it. Congress and the White House will have to be functional enough to
employ all available fiscal tools.
Al Gore recognized the critical importance of peaceful
transitions of power in 2000 when the Supreme Court ended the Florida recount
and awarded the presidency to George W. Bush. This year is not likely to be
that close. But if it is, and Trump loses, the possibility of significant
domestic unrest seems real. And that's a scary thought.
MUST SEE
VIDEO - "3 a.m.": "Marge and Homer Simpson wrestle with
the choice in this election." 2-min. video http://bit.ly/2aMma85
1968 vs.
2016 - On comparisons between George Wallace in '68 and Trump in '16
: Wallace tapped into an angry electorate ... the people in Washington were
making stupid decisions that ruined their lives. The more specific complaint in
1968, you had bussing policies, housing policies that Wallace was arguing
against, and those were more invasive than anything Donald Trump complains
about ... He doesn't have a list of particulars like Wallace did. One overlap
is trade ... The rhetoric is very similar, the sense of grievance and obviously
the law and order is a direct copy from Wallace. People think it's [Richard]
Nixon, but Nixon was trying to keep up with Wallace when talking about law and
order. And the idea there is to capture voters that are concerned about law and
order, full stop, that's it, and then others who have a broader fear of the
cities and for whom law and order is a way to tap into that fear.
--Is fact checking more important than ever? On the one hand, there are more challenges,
more spin, more that's not so that's said by politicians. So the fact checking
and all of that is more important than ever. The question of whether it's more
important gets into whether people are listening. Because there's a lot of fact
checking that's been done that has not changed people's mind. There are even
some studies that suggest the more they see contradictory information, the
harder they cling to the initial untruth. So it's been never more necessary;
whether it's beneficial and has the second part of it, which is, you hope help
people make a more reasoned decision based on the facts, that we're not sure
about.
Days
until the 2016 election: 92.
DINING – A must
have is the calamari at the Sea Chest on Moonstone Beach Drive in Cambria,
California. This writer has enjoyed calamari from New York to San Francisco,
from Boston to Boca Raton – the Sea Chest’s is the best.
SPORTS
BLINK -- In long-awaited comments, Tom Brady speaks softly: Tom
Brady speaks! Stop the presses. Freeze Twitter. Close the New York Stock
Exchange for 10 minutes. Interrupt all Trump coverage. Brady ended his
six-month silence Friday morning at Patriots practice when he took eight
questions from the local football media for approximately five minutes. It was
a shoutdown frenzy, and Tom found it easier to answer 'How much did you rely on
your family to get through the whole ordeal?'' than 'Why did you drop the
appeal when you did?
THE
SWAMI’S WEEK TOP PICKS –
Major League Baseball Game of the Week: Saturday
August 13, 8:05 p.m. ET, CSN: Detroit Tigers (61-50) vs. Texas Rangers (65-47).
Detroit has been one of the hottest teams in baseball after the All-Star break.
But they have difficulties always in Texas. Texas wins, 8 – 3.
Season to
date (55 -39)
MARKET
WEEK
- Per a Rink Rats favorite BlackRock Chief Investment
Strategist Richard Turnill: “Global stocks are up year-to-date, having shaken
off worries about the strength of the global economy in the wake of the United
Kingdom’s Brexit vote. Can they move higher into year-end? This week’s chart
helps explain why further gains require a meaningful improvement in company
earnings, particularly in developed markets.
The chart above shows how multiple expansion — or
rising price-to-earnings ratios — has been the main driver of equity returns in
many markets this year. This reflects a trend seen in recent years.
Fundamentals remain lackluster for the most part, with second-quarter earnings
growth in many regions flat to negative.
The worst of the U.S. profits recession does appear
to be over. Second-quarter earnings growth for the S&P 500 likely will
still show contraction from last year’s levels. Yet we find reasons to be
marginally more optimistic about the second half. Sales growth has been better
than expected, and is on track to turn positive for the first time since the
fourth quarter of 2014. We also see the energy sector’s drag on earnings fading
by year-end. The problem? High U.S. valuations and strong flows into U.S.
equities already appear to reflect part of the good news. A U.S. market
overweight has become a consensus trade, our analysis shows, raising the risk
of sudden reversals.
In Europe, analysts have slashed their expectations
for 2016 earnings growth since the beginning of the year on a collapse in
expectations for the banking sector. Earnings are set to contract in seven out
of 10 European sectors in the second quarter. The bright spot: global
multinationals with geographically diverse sales, in sectors such as health
care, materials and technology. In Japan, many companies are predicting a
weaker yen in the second half, surveys show. This increases the risk of
downward earnings revisions if the yen stays strong and hurts the overseas
earnings of Japanese companies.
The main takeaway for investors: Be selective. We
prefer quality companies that can increase earnings in a low-growth environment
or grow their dividends. U.S. stocks with high dividend payouts, by contrast,
look expensive and offer limited earnings potential at this time.” In other
words, go global.
DRIVING
THE WEEK - Donald Trump and Hillary Clinton are giving dueling
economic speeches in Detroit. Trump goes first tomorrow, and Hillary goes
Thursday.
Clinton campaigns in Florida on Monday and Tuesday ... Trump
is in North Carolina on Tuesday ... Treasury Secretary Jack Lew is in
Minneapolis on Monday "to meet with community and business leaders to
discuss the state of the U.S. economy" ... Labor Market Conditions index
at 10:00 a.m. Monday expected to rise to 1.5 from -1.9 ... JOLTS report
Wednesday at 10:00 a.m. expected to show openings rise to 5,675K from 5,500K
... Retail Sales on Friday at 8:30 a.m. expected to rise 0.4 percent and 0.2
percent ex-autos ... Univ. of Michigan Sentiment at 10:00 a.m. Friday expected
to dip to 91.5 from 92.0.
Next
week: We are going dark for two weeks, time for a summer break. See
you on August 29 with Higher Education, what next and our Football Season Swami
picks.
Until Next Time, Adios.
Cambria, CA
August 8, 2016
#VII-12-314
CARTOON
OF THE WEEK – Decision
2016
