Thursday, April 30, 2015

Git With It...

"You might as well git happy with life, 'cause we're all in this together by ourselves."

Wednesday, April 29, 2015


Think most folks get a kick out of "oxymorons"; those often hilarious words or phrases which generally are contradictory - or somehow just don't seem to make much sense. 

(Ease up, relax ! This one is not about NCUA;  although it... ...well, never mind.)

The word itself is fun since it is composed of two different parts:  "oxy-" meaning "sharp, acute" and "moron" meaning "dull". Oxymoron "a sharp/dull" idea or thought!!

You are probably familiar with the standards:  Holy war, cruel kindness, jumbo shrimp, honest lawyer, pretty ugly, educational TV and, of course, the ever favorite happily married!

But all that aside, wanted to point out an oxymoron I encountered last time I went to D.C. ....

Tuesday, April 28, 2015

Get Real....

"Anyone who doesn't believe in miracles is not a realist."
 - David Ben-Gurion

Friday, April 24, 2015

Well Don't Just Do Something, Stand There !

[April, 2015]

"We will be forming a committee to address those concerns."

    (That should help…!)

Thursday, April 23, 2015

"Best Practices"...

"Best practices" seems to be the favorite "be all, end all" justification for regulatory insensibility of late.  

The increasingly common answer to the legitimate question: "Why?" from a Credit Union Board or staff to a supervisory examiner is: "Best practices!"  

When pressed for where that little list of "best practices" might be found; and, who and how the "best practices" list was compiled, the supervisory examiner's memory inevitably becomes somewhat distant and vague.  Some have been known to become wild-eyed and to start "speaking in tongues" (that means "gibberish" for those of you who do not handle snakes in connection with your religious practices.)   

The vast majority of examiners are competent, reasonable, responsible human beings who realize that an honest answer would be: "I have absolutely no earthly idea;  that's all we were told".  

Unfortunately, too often the answer given is " a larry":  "They said" it was in the rules somewhere. "They said" everybody should know what "best practices" are. "They said" it wasn't our responsibility to keep up with "best practices", it was yours.  

So, just how are those "best practices" determined?  And, what is the thought behind not being transparent about these issues? Here are your five choices...

Wednesday, April 22, 2015

Conspicuous Consumption...

Lighting it up...!
WELL !!!  As they say, quite a few CU marketeers got "their boxers in a wad" last week over the "Credit Union Marketing... SOS!!!" post.  A few flashes of madness and originality would have been much, more interesting.  Instead, the "incoming" was just
 more of the "SOS"....

But, if you aspire to be a thoughtful and effective CU marketeer, it is probably wise and necessary for you to spend some time with Thorstein Veblen and his work "The Theory of the Leisure Class".

Perhaps you need to do so simply because, you would like to consider where your moral compass should lie, as a cooperative, non-profit leader in a for-profit, take no prisoners, "buyer beware" world.
Veblen, the economist who created the phrase "conspicuous consumption", will not only make you think; he will make you choose.  Capitalist or "progressive"; Republican or Democrat; conservative or liberal; for-profit or not-for-profit; sinner or saint; Mr. Veblen challenges you to consider the hard-edged realities of an
"WE-SELL" !!
impersonal, industrialized economy, juiced-up by advertising and consumption.
 Believe it or not; despite being an economist, Veblen's fun!

But even in 1899, Thorstein Veblen was not optimistic about the logical "endgame" of a race to the bottom in a marketplace, increasingly unrestrained by local accountability, uncertain ethical values, and flexible moral scruples.  Veblen predicted that marketing would eventually feature the following:

Tuesday, April 21, 2015

Trafficking in Slaves... Payday Lending

"The Rights of Man"

".... I object to wealth achieved through the misery and misfortune of others."

- Thomas Paine (1774)

Mr. Paine was commenting on the institution of slavery in America at that time; but it is little different - and equally inhuman - to steal a life, to break a spirit, to victimize and debase a person through the "paper chains" of financial servitude. 

Q:  Can one enter into a binding legal agreement to be robbed?

Monday, April 20, 2015

Future Leaders Should Go Bananas!

The sun was simply sweltering and I was sitting poolside at one of those golf-prison hotels, trapped between lost and found and nowhere. 

That's when the question first came to mind. It wasn't the result of any great thinking to be sure. And, the thought probably had no source other than the impatient infection of boredom, which arises from waiting on a "next-a.m." flight to someplace you'd rather be now. Comprendez? Done there, been that?

The cosmic question was "Does a banana float?" Not just any banana either. One of those large 16-ouncers which usually only come three to a bunch and end up being much more than your appetite. Well, let's stop right here for the quiz. What do you think? Does it or doesn't it?

"Does a banana float?"
Check the appropriate box:

 Yes  No  Maybe
☐ This is insane.
☐ None of the above.
☐ All of the above.
 Only in ice cream.

I will give you three bits of information which may help you with your answer: 1) you have no clue to the correct answer to that question, because this bizarre thought has never crossed your mind; 2) this is not a trick question; so don't over-analyze it; and 3) there are two important, related questions you must also consider in addition to the first one.

Those two questions are:

1). "If you peel the banana does the peel float?"

 Yes  No  Maybe
 This is really weird.
☐ Need NCUA ruling.
 A and B.
 Only in salt water.

2). "Does the fruit core float?"

☐ Yes No  Maybe.
☐  I’m telling!
 Yes, then no.
 No, then yes.
☐ Only in California.

Give those questions some serious thought. Mark your answers. Don't give up on me just yet; we are heading somewhere with all this! But first, let me finish telling you about that poolside experience....

Saturday, April 18, 2015

Gittin' Educated...

"Education:  That which reveals to the wise and conceals from the stupid, the vast limits of their knowledge."

- Mark Twain

Friday, April 17, 2015

D.C. United...

Kumbay-oink !!!

"When I go to Washington, it seems like distrust of banks is one area where politicians on both sides of the aisle agree.  It is heart-warming to see our ability to help bring our leaders together."

Mr. Michael Corbat
CEO, Citigroup
[... before the Greater Omaha Chamber of Commerce]

Thursday, April 16, 2015

Unconventional Opportunity.....

The High Country!
The three most beautiful States in the Country are your state, my state, and Colorado.  Colorful Colorado, the Centennial State really has it all!

But, without doubt; the best reason to go to Colorado is bugling.  Bugling?  Yes, bugling!  Haven't heard, huh.  Well, I found out about bugling one summer during a Rocky Mountain CUES Council meeting. (I use to be a member of the Bubba Council of CUES in North Carolina.)  At a dinner with some CU heavy hitters, I good-naturedly asked one CEO what Colorado people did for entertainment.  With great earnestness, he said he liked best to listen to elks bugle.  

Brownies or fruitcakes?
I started to ease away from him, figuring he had forgotten to take his medicine or had been munching on some of those "Denver brownies"; when his companion up and gushed that she, too, loved bugling!  I'll admit there was that momentary tinge of panic one feels, when outnumbered and surrounded in a strange place; but I held my ground.  "Oh, really," I managed.

Bugling!?  Well, it seems that in the Fall bull elks like to gather in Rocky Mountain National Park and bugle at the girls; and crowds of folks in Colorado flock to the Park to listen to that sonorous serenade. (Big city dwellers can get a sense of this experience by listening to the whistling around large, downtown construction sites at lunch hour -- different species, same idea.)  

Bugling, of course, marks the beginning of the rutting season for the elk.  The bulls seek to catch the eye of pretty little elkettes by stomping around, strutting their stuff, and bugling.  Southerners call this "talking trash"....

Wednesday, April 15, 2015

Problem Case Officer.....

 (Personality Case Officer...!!) 


"An examiner who identifies a problem you do not have, in a way that creates a problem you do not need, and then offers a solution which will not work."

And then wants to know...

Tuesday, April 14, 2015

Unsafe And Unsound...

The New York Times published an opinion piece recently (4/12/2015) headlined "Unsafe and Unsound Banks", but it doesn't take too much imagination to spot the equal threat to credit unions - except the threat is greater!

One classic example of
"a derivative" ...
The opinion piece is about the less than transparent manner in which American banks  [and credit unions!] account for those wonderful balance sheet instruments of mass destruction [to quote Warren Buffett] - derivatives!

This time the well-qualified critic of derivatives is
none other than Mr. Thomas Hoenig, current Vice-Chair of the FDIC and former long-term Federal Reserve president [Mr. Metsger is his equal on the NCUA Board].  Based on the just completed Fed stress tests, all TBTF banks passed with an average capital level of 12.9%.  Not so cautions Mr. Hoenig, who has released data which shows "those same banks actually averaged 4.97% capital at the end of 2014."   Not exactly a minor ["robust"] rounding error...

Monday, April 13, 2015

College Daze...

A recent post about being granted a college degree, conditioned upon a promise not to practice, brought forth many accusations of exaggeration from the less faithful readership. To which I can only respond: "Dude, it was the '70's.... given the choices, would you have gone to class?

But, as historical support, I offer the following letter home, in explanation of the remarkably abundant opportunities, available to "thoughtful undergraduates" at my alma mater.... the date March 2, 1890:
"Dear Father,... "

"Dear Father,

I am very sorry indeed that Dr. Battle [the University president] had to write to you about me, but think he has it a little larger than it was.  I will tell you just how it is and what I did...."

"You remember when I told you about shooting the gun, ever since then everything that is done he calls me up.  Once again I was beating on a tin tub in my room and Prof. Cain came in and asked me to stop; those two times are the only ones that I have been caught and about the only times I have done anything. "

"Again the night some boys wrung the bell, I was in my room... Thursday night a crowd of boys wrung the bell and made a fireball and went around to scare the boys by turning it around before the windows and crying fire.  I was downtown in Lee Woodard's room when they made the fireball."

" I came up in a little while and went around to see
the fun but did not touch it.  I hollered as everybody else did and this is about all I have done so far, the late at night, etc." 

"I don't know what he means unless it was the bell ringing and the fire ball... I am very sorry that I have caused you so much trouble and hope you will see it is not as bad as Dr. Battle makes out..."

                                       Your loving son,
                                       Jno. B. Stronach **

** By the way, the 1890 Yearbook notes that Stronach was "President of the Eating Club: Record, 31 bananas in 13 minutes."  [I tend to believe we are related.]

            (From the Carolina Alumni Review - Apr./2015)

Sunday, April 12, 2015

Government Surveillance...

Equipped with the latest
"AIRES-compatible" photo hi-tech....

Body cams were recently issued to all NCUA examiners during their annual, very "robust", top secret, confidential "hush-hush", deadly serious, highly specialized, "we really mean business" training conference.

The first live picture 
has just been released...

NCUA's Risk-Based Capital Rule....


Ya' think somebody ought to tell them 
how this might turn out?

Saturday, April 11, 2015

The Road Less Traveled...

The low road....

"When in doubt, take the high road. 

There's less traffic."

Friday, April 10, 2015

Credit Unions: Who Are You Leaving Behind....

The Smokies !!
The first thing which concerned me about the group was that everyone looked exceptionally fit and healthy. That observation alone should have been sufficient warning of a potential problem in the making. But, in life, at critical junctures; all too often, the very obvious is – unfortunately – much less than.

Our beshorted, knobby-kneed, intrepid little band had gathered in the lobby of a Gatlinburg hotel with ambitions of venturing up into the Smokies. We all had arrived an hour east of Knoxville to attend a conference.   The meeting brochure had announced “a hike of moderate difficulty into the Great Smokey Mountains National Park”, as a featured recreational event.   No golf, no tennis, no theme park tour; just a hike!  Finding that idea to be both darkly humorous and wildly outrageous, I signed up immediately.  The logic seemed infallible and compelling at the time.

My other major concern about the group was their very apparent youthfulness. They were much like a pack of playful puppies, jumping and bobbing up and down with excitement – downright frisky! Felt like petting a few on the top of the head to calm them down, but judiciously held back. Did wonder if it had ever occurred to them that older folks pack differently for hikes than younger folks. They were most concerned about the right shoes and gear, granola bars and chic sunglasses. I had focused on packing my Blue Cross/Blue Shield card, glycerine tablets, and living will – the truly important stuff that might be needed.  Don’t get me wrong; I’m not that old yet, but, I am now over forty. Well, actually I’m forty-eleven or forty-twenty or..., but then again, who’s counting?

Thursday, April 09, 2015

Sign Of The Times...

Go Heels !!

Since Duke got a little play earlier in the week, figured it would be best to give the University of North Carolina equal time. 

UNC is located in Chapel Hill, a university community of the first order. The Town is a hotbed of mostly leftward leaning liberalism, cultural diversity, and unabashed advocacy of political correctness.  First cousin to Madison and Berkeley.

Also happens to be my hometown and the
Grass roots campaign...
university from which I was granted an undergraduate degree ( a B.S.) on a split vote of the Trustees - issued and conditioned upon a promise never to practice in that field. More of a parole than a graduation; both parties were relieved.  It was something of a "robust" undergraduate career.

Returned to Chapel Hill last weekend for a wedding which was held at the N.C. Botanical Gardens - an environmentally sensitive wedding with Mother Nature much in attendance. Even the wedding cake was green - an unusual combination of goat cheeses, tofu, and Brussels sprouts.  Can't say how it tasted, but the champagne was very nice and abundant.

But Chapel Hill demonstrated its full glory of correctness in the center's restrooms! Above every toilet and urinal was a prominently posted informational sign - in English, Spanish, Chinese and Braille - which read:

" We have reclaimed water from the gardens for use in flushing.  Please ...

Wednesday, April 08, 2015

Do As I Say, Not As I Do...

Asteroid strikes
and NCUA IRR forecasts
- both can be disastrous !!!

Several commenters over the last year or so have railed (rightfully so from what I've seen first hand!) against the relentless "badgering" (68-63!) of credit unions by the NCUA over the issue of interest rate risk (IRR).

Give them credit where credit is due, the Agency at least has been consistent in its fear-mongering about soaring rates. That the oft-predicted, imminent, cataclysmic interest rate event has failed to occur is beside the point to NCUA - as are the lost investment opportunity costs to CUs following their advice.  The interest rate asteroidial strike is inevitable!  Heed or bleed in your annual NCUA exam report...  

Capital markets specialist
at work!
Even though the NCUA's forecasts have been wrong for 1 year, 2 years, 3 years, 4 years, 5 years.... seems to be irrelevant.  "Market discipline" (... in the real world economy - "you miss, you lose, you die"!) does not, of course, apply in an independent federal agency, which enjoys the good life with "market immunity".  No oversight, no consequences, no sweat... even required Congressional reporting appears to be optional! 

So let's take a look at how the NCUA uses its
superior IRR market wisdom to manage the $12 billion credit union-owned share insurance fund (the "NCUSIF" - your 1% of members' deposits)...

Tuesday, April 07, 2015

Like A Rolling Stone...

NCUA's very public display
of RBC competence...
Must confess that I've had a great deal of difficulty working up the enthusiasm to go another round on NCUA's miserable mess known as RBC2 - the risk-based capital rule.  The vast amount of time this regulatory disaster has wasted for folks in the credit union movement is simply unbelievable and unconscionable - beyond unconscionable.  

We all intuitively resent having to help clean up somebody else's professional embarrassments, especially when those errors appear to be unforced, unnecessary, and careless; perhaps more bluntly, just plain professional recklessness.
Just plain stinks!

There can be no rational excuse for the world-class regulatory cluelessness of RBC1, nor the "tough 's', no comment attitude" response that followed credit union calls for review and reason.  A "tough love" attitude which was then rubbed in the face of credit union leaders at the infamous "listening sessions" - go back and listen to the recordings of those meetings - again, unconscionable, beyond unconscionable.

And, the only thing, the only thing that finally halted this flagrant, belligerent mismanagement was 300+ Congressmen writing to NCUA "to prompt" them to reasonableness.

And, now NCUA is back, unapologetically, with RBC2 asking for greater authority and discretion which they certainly have not earned and clearly do not deserve.

NCUA, much to the discredit of the entire credit union family, now rightly enjoys the same level of full-faith professional credibility as...

Monday, April 06, 2015

Go Duke... !!

DOOK !!!

When you say !!! GO DUKE !!! today, guess most folks are thinking basketball, the Final Four, or Krysrhu.... Khachf.... Kzyreski.... or whatever the coach's name is....

But the cognoscenti of robusterian quantalytics know that Duke is as good off the court as it is on the court when it comes to statistics.  

Thought you might like to see a brief primer  on forecasting from Dr. Robert Nau from the Duke Fuqua Schoool of Business.  Any professor who leads with the following quote must be taken seriously:

"I have seen the future and it is very much like the present, only longer."
- Kehlog Aldbran

Sunday, April 05, 2015

At Easter...

Creed, not greed...

"Money has to serve, not to rule." 

- Pope Francis

Credit Unions should be part of the solution, increasingly we're not.


He had a lot of foresight...

Saturday, April 04, 2015

Credit Union Marketeers: Second Salvo........

Classic C.U. Mass marketing:

  "Blah.  Blah.  Blah."

Modern C.U. Mass Marketing:

  "Blah. Blah. Blah."

Prettier, but it's still... 
"Blah. Blah. Blah."

Thursday, April 02, 2015

Walking in the Woods....

Well, I was out walking in the woods again last week.  Historically that has meant you'll have to suffer the consequences!  

It was one of those crisp, sunny, Southern days.  Down here we call it early Spring; in Vermont, they call it Summer.  The mistake I made was in glancing up at the sun.  Y'know it sorta' got to bothering me to realize that I'd spent all last year orbiting the sun.  Somehow it didn't seem quite right nor fair to have spent all that time, going all that way, just to end up smackdab back at the same place (reading an RBC rule!!)

I had headed out last year with a strong sense of
purpose and a firm sense of direction; but, somehow something must have gone wrong. 'Cause here I am, right back where I started a year ago, same spot in the solar system - and not one cosmic frequent flyer mile to show for it!  What does all this mean?  Has somebody thrown us a curve?  Are we aboard some sort of universal merry-go-round?  

Is the shortest distance between two points no longer a straight line?  Is this why we build beltways and bypasses to travel ""around town"?  If a beltway has become a straight line, what does "inside the Beltway" mean?  Is this why we're having so many problems in Washington? Who should I call?

While I was blinded by the glare of the sun and this rude, spatial awakening, here are a few other thoughts that crossed my mind....

Wednesday, April 01, 2015

On Finally Getting Around to Reading The "New" RBC Rule...

"There is something fascinating about the NCUA's "logic" in  the "new" RBC rule.  One gets such wholesale returns of conjecture out of such a trifling investment in facts."

              - Mark Twain

And, quite frequently, "the conjecture"** is simply a...