The BAN Report: FDIC Quarterly Banking Profile / Inflation Boosts Loan Growth / The CFPB's Done with Overdrafts / New Wave of Entrepreneurs? / The 7MM Chicago Commercial Portfolio / The 7MM Chicago Resi Portfolio
FDIC Quarterly Banking Profile
The FDIC released its Quarterly Banking Profile this week. The Quarterly Banking Profile is the most comprehensive overview of the US banking industry, as it covers all banks. A few highlights:
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While banks grew their earnings by 35.9% from the same quarter a year ago, the decline in provision expenses accounted for the improvement. Many banks still have room to release reserves, but most have realized much of the benefit already.
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Can we finally call a bottom on Net Interest Margin compression? As we have predicted, Net Interest Margin finally began expanding, rebounding from several quarters of record lows. While it was only 6 basis points (and still down by 12 basis points from the prior year), at least its finally turning positive. We expect NIMs to continue to expand for banks for several quarters.
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Higher interchange fees and higher investment banking fee income helped banks see growth in noninterest income. Meanwhile, noninterest expense rose as well, but at a lower rate.
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Banks can justify releasing reserves because ALLL as a percentage of total loans and leases stands at 1.69% - significantly higher than the pre-pandemic level of 1.18%.
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While it was modest, loan growth was positive in the third quarter, growing by 0.6% from the second quarter. 1-4 family residential mortgage, consumer loans, CRE, and loans to non-depository institutions were key drivers.
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Deposits are still growing, despite stimulus programs wearing off. Deposits grew by 2.3% in the third quarter.
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There are now only 46 banks on the problem bank list – the lowest ever. Total assets of problem banks stood at 50.6 billion.
The picture is looking up for banks overall as margins should be start to turn the corner. Loan growth is starting to pick up. We do believe that the credit picture is not as pristine as the numbers suggest, and will get cloudier when the CARES Act relief from GAAP expires at the end of the year. Excessive stimulus has a way of covering up problems.
Inflation Boosts Loan Growth
The American Banker noted that loan growth often picks up right before rates begin to rise, as consumers and businesses accelerate borrowing.
Loan demand is already rising. Forty-five percent of the banks covered by KBW produced at least 5% year-over-year core loan growth in the third quarter, excluding Paycheck Protection Program loans, up from the year's low of 25% in the first quarter that saw at least 5% year-over-year growth.
The Red Bank, New Jersey-based OceanFirst Financial said loan demand is mounting, reflecting a strengthening economy and, likely, borrowers beginning to take action ahead of a year in which interest rates climb.
“I’m hopeful inflation is not a long-term issue,” said Chris Maher, chairman and CEO of the $11.8 billion-asset OceanFirst. “Though it’s sure to carry into 2022 and you have to start thinking higher rates are coming.”
Excluding PPP, he said the bank generated 7% annualized loan growth in the third quarter and anticipates it can maintain that rate. “We feel very bullish,” he said in an interview.
Matthew Reddin, chief banking officer at Simmons First National in Pine Bluff, Arkansas, echoed that sentiment.
Higher prices have benefited many corners of the economy, from energy companies to auto dealers, Reddin said. Those profits are fueling expansion efforts, and banks will finance more of those growth projects.
Inflation also results in larger loan amounts. For example, the almost 20% increase in home prices over the past year leads to larger loans to support bigger purchases. Nevertheless, inflation is not a good thing and remains the single biggest risk in the economy, especially with a slow-moving Fed. Alas, at least Fed Chief Powell finally retired the “inflation is transitory” argument this week.
The CFPB’s Done with Overdrafts
The CFPB is determined to eliminate a large source of noninterest income for banks – overdraft fees. In a report released this week, the CFPB called the banks out for relying too much on overdraft fees and seems determine to focus on banks who make too much money on overdrafts.
Banks continue to rely heavily on overdraft and non-sufficient funds (NSF) revenue, which reached an estimated $15.47 billion in 2019, according to research released today by the Consumer Financial Protection Bureau (CFPB). Three banks—JPMorgan Chase, Wells Fargo, and Bank of America—brought in 44% of the total reported that year by banks with assets over $1 billion. The CFPB also found that while small institutions with overdraft programs charged lower fees on average, consumer outcomes were similar to those found at larger banks. The research also notes that, despite a drop in fees collected, many of the fee harvesting practices persisted during the COVID-19 pandemic.
“Rather than competing on quality service and attractive interest rates, many banks have become hooked on overdraft fees to feed their profit model,” said CFPB Director Rohit Chopra. “We will be taking action to restore meaningful competition to this market.”
The CFPB will be enhancing its supervisory and enforcement scrutiny of banks that are heavily dependent on overdraft fees. In recent years, the CFPB ordered TD Bank to pay $122 million in penalties and customer restitution, and ordered TCF Bank to pay $30 million in penalties and restitution.
Capital One, feeling the heat from the CFPB singling them out, quickly folded and announced it was ending the practice in 2022.
Capital One says it will no longer charge customers a fee when their account balances dip below zero, making it the nation’s largest bank to phase out a practice that the regulators and advocates have termed “exploitative.”
Capital One chief executive Richard Fairbank said the move would help bring “simplicity and humanity” to banking, according to the company’s announcement Wednesday. The new policy takes effect in 2022 for customers who are currently enrolled in overdraft protection.
Ending the overdraft fees will cost Capital One about $150MM in annual fee revenue. It remains to be scene how effective the CFPB will be in getting other banks to follow suit, as it will not be easy for banks to replace this revenue. But, this is the clearest sign that the CFPB is flexing its muscle after being neutered during the prior Administration.
New Wave of Entrepreneurs?
Few would have predicted a pandemic would spur people to start their own businesses, but people are quitting their jobs and starting their own businesses at record levels.
The number of unincorporated self-employed workers has risen by 500,000 since the start of the pandemic, Labor Department data show, to 9.44 million. That is the highest total since the financial-crisis year 2008, except for this summer. The total amounts to an increase of 6% in the self-employed, while the overall U.S. employment total remains nearly 3% lower than before the pandemic.
Entrepreneurs applied for federal tax-identification numbers to register 4.54 million new businesses from January through October this year, up 56% from the same period of 2019, Census Bureau data show. That was the largest number on records that date back to 2004. Two-thirds were for businesses that aren’t expected to hire employees.
This year, the share of U.S. workers who work for a company with at least 1,000 employees has fallen for the first time since 2004, Labor Department data show. Meanwhile, the percentage of U.S. workers who are self-employed has risen to the highest in 11 years. In October, they represented 5.9% of U.S. workers, versus 5.4% in February 2020.
People are looking for flexibility, worried about COVID, avoiding vaccine mandates, or just sick of the office. For the bankers who read this publication, what are you doing to capture all the new businesses that are being formed today?
The 7MM Chicago Commercial Portfolio
Clark Street Capital's Bank Asset Network ("BAN") proudly presents "The 7MM Chicago Commercial Portfolio". This exclusively offered portfolio is offered for sale by one institution ("Seller"). Highlights include:
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A total outstanding balance of $6,761, 048 comprised of 21 loans
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Commercial loans secured by the first mortgages on Multi-Family (25%), Single Family Residences (22%), Residential Condominium Unit(s) (17%), Industrial (15%), Business Assets (11%), and Commercial Condo Unit(s) (10%)
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67% of the portfolio is non-performing, with 33% performing
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The portfolio is located entirely in the Chicago MSA
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The loans have a weighted average coupon of 4.85%
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All loans include full personal recourse
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The portfolio will be sold in its entirety to a single buyer
Files are scanned and available in a secure deal room and organized by credit, collateral, legal, and correspondence with an Asset Summary Report, financial statements, and collateral information. Based on the information presented, a buyer should be able to complete the vast majority of their due diligence remotely.
Timeline:
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Sale announcement: Friday, November 19, 2021
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Due diligence materials available online: Tuesday, November 23, 2021
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Indicative bid date: Thursday, December 16, 2021
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Closing date: Thursday, December 30, 2021
Please click here for more information on the portfolio. You will be able to execute the confidentiality agreement electronically.
The 7MM Chicago Resi Portfolio
Clark Street Capital's Bank Asset Network ("BAN") proudly presents "The 7MM Chicago Resi Portfolio". This exclusively offered portfolio is offered for sale by one institution ("Seller"). Highlights include:
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A total outstanding balance of $6,817,844 comprised of 21 loans
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The consumer loans are secured by Single Family Residences (85.38%), Condominium's (10.57%), and Townhome's (4.05%)
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The portfolio is located in the Chicago MSA
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89% of the loans are non-performing
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The portfolio has a weighted average LTV of 77%
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The portfolio will be sold in its entirety to a single buyer
Files are scanned and available in a secure deal room and organized by credit, collateral, legal, and correspondence with an Asset Summary Report, financial statements, and collateral information. Based on the information presented, a buyer should be able to complete the vast majority of their due diligence remotely.
Timeline:
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Sale announcement: Friday, November 19, 2021
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Due diligence materials available online: Tuesday, November 23, 2021
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Indicative bid date: Thursday, December 16, 2021
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Closing date: Thursday, December 30, 2021
Please click here for more information on the portfolio. You will be able to execute the confidentiality agreement electronically.
The BAN Report: Evergrande Defaults / OCC Nominee Withdraws / Traffic Back? / Firing by Zoom
Evergrande Defaults
Today, one of the major rating agencies declared that Evergrande was in default. With $300 billion in outstanding debt, this may be the largest non-sovereign default of all time.
For weeks, global markets have been watching the struggles of China Evergrande, a teetering real estate giant weighed down by $300 billion or more in obligations that just barely seemed able to make its required payments to global investors.
On Thursday, three days after a deadline passed leaving bondholders with nothing but silence from the company, a major credit ratings firm declared that Evergrande was in default. Instead of resolving questions about the fate of the Chinese behemoth, the announcement only deepened them.
The firm, Fitch Ratings, said in its statement that it had placed the Chinese property developer in its “restricted default” category. The designation means Evergrande had formally defaulted but had not yet entered into any kind of bankruptcy filing, liquidation or other process that would stop its operations.
It’s the nature of that next step — bankruptcy, a fire sale or business as usual — that remains unknown. In the United States and many other places, bondholders could push an unwilling company into some form of reorganization, usually in court, and divvy up the pieces.
That may still happen. But Evergrande is faltering in China, where the Communist Party keeps a firm hand on corporate meltdowns to keep them from spreading out of control. With Evergrande, the risk is high: A sudden unwinding of the company could hit the country’s financial system or, potentially, the many homeowners in China who have already paid for Evergrande apartments that are yet to be built.
So, now the ball is in China’s court. China’s central bank has blamed Evergrande for its problems, but also said there would be some sort of reorganization, but no bailout. We would be surprised if China didn’t at least cushion the blow, especially since there are millions of home buyers that have paid deposits for apartments that have not been delivered.
OCC Nominee Withdraws
As the primary regulator of 65% of the assets in the banking system, the Comptroller of the Currency is a big appointment in the banking industry. President Biden’s nominee Saule Omarova removed withdrew her name from consideration this week to the delight of the banking industry.
President Joe Biden’s nominee for comptroller of the currency, Saule Omarova, withdrew her name from Senate consideration for the post on Tuesday.
Omarova’s withdrawal came after concerns from Republican senators about the Cornell University professor’s writings as a legal scholar, as well as her background of being raised in the former Soviet Union.
“I don’t know whether to call you professor or comrade,” Sen. John Kennedy, R-La., said last month at her Banking Committee confirmation hearing, in a quip that was criticized by Democrats.
Her nomination generated strong opposition. To wit, the ICBA stated:
“ICBA and the nation’s community banks have concerns about Cornell University law professor Saule Omarova’s policy proposals to dramatically reshape the nation’s banking system.
“In academic papers, Professor Omarova has proposed migrating the retail banking system to the Federal Reserve, which would displace locally based community banking and restrict economic growth in local communities.
“Further, Omarova’s proposed government banking FedAccounts conflict with statements from Fed leaders, who have repeatedly said the Fed is not suited to offer direct accounts to consumers and is not legally permitted to do so.
Ms. Omarova was objectively qualified for the position, having worked for Treasury and practiced law in the Financial Institutions Group of Davis, Polk. But, her opinions as an academic were radioactive and it only takes one moderate Democrat to sink a nominee. Hopefully, the next nominee has more real-world banking experience.
Traffic Back?
Driving during the early days of the pandemic last year was so great. Places that were a special trip in the past were now a 15-minute drive. While traffic has returned, it is still lighter than before the pandemic, according to a report this week.
On average, U.S. commuters are on pace to lose 36 hours to congestion in 2021, 10 hours more than in 2020 but 63 hours less than in 2019, transportation analytics firm Inrix said in its 2021 Global Traffic Scorecard, released Tuesday. The analysis is based on data through October.
Commuting is still less time consuming in all but one of the 25 most-congested cities compared with 2019. Drivers in Las Vegas, site of a major interstate repair project, have lost more time to backups this year. Congestion dropoffs from prepandemic levels vary in other cities, from 19% in Miami to 65% in Washington, D.C.
“It’s very localized,” said Bob Pishue, a transportation analyst with Kirkland, Wash.-based Inrix. “Some of these areas with fewer restrictions, and destination-based places like Vegas and Miami, are seeing a little bit more congestion relative to where they were.”
In many cities, certain roads have reached pre-Covid-19 traffic levels during rush hour, especially in the evening, Mr. Pishue said. One difference now is the duration is usually shorter. Also, morning commutes tend to be speedier than before, he said, reflecting a shift in driving patterns with many people still working from home and taking nonwork trips in the afternoon.
Inrix collects billions of anonymous data points every day from sources like mobile devices, navigation units and publicly available information on incidents. Commute times are calculated by looking at the time it takes to travel between major employment centers and surrounding commuting neighborhoods. Total time lost is the difference in travel times during the peak periods compared with free-flow conditions.
The decrease in congestion doesn’t mean roads are free-flowing. Boston’s congestion is about half of 2019 levels, yet drivers will still lose 78 hours to traffic snarls this year—more than in oft-congested Seattle before the pandemic, according to Inrix. Only three U.S. cities fare worse than Boston in the 2021 congestion scorecard: Chicago, New York and Philadelphia.
As someone who has a short commute ever day into downtown Chicago, it does seem that traffic has returned to pre-pandemic levels during normal rush-hour times on the highways. Driving through downtowns though still is a lot easier and feels maybe half of pre-pandemic levels.
Firing by Zoom
The CEO of Better.com laid off 900 employees on a Zoom call and the video of the call has gone viral on various social media outlets.
Vishal Garg, the New York-based company’s CEO, struck an unapologetic tone when announcing the mass firings to affected workers on the now-viral call, a recording of which was later posted on TikTok, YouTube and other social media accounts.
“This isn’t news that you’re going to want to hear … If you’re on this call, you are part of the unlucky group that is being laid off. Your employment here is terminated effective immediately,” he said, adding that he does “not want to do this.”
“This is the second time in my career I’m doing this and I do not want to do this. The last time I did it, I cried,” Garg said on the call.
The CEO was later outed as the anonymous author of a scathing blog post that slammed Better.com employees on the professional network Blind.
“You guys know that at least 250 of the people terminated were working an average of 2 hours a day while clocking 8 hours+ a day in the payroll system?” the father of three wrote.
“They were stealing from you and stealing from our customers who pay the bills that pay our bills. Get educated,” he added.
On some level, you have to give the CEO credit for laying off the workers himself, rather than delegating it to the HR department. But, his tone was a disaster. Fortune found five ways he got it wrong, including Mass notification, Termination by Zoom meeting, Focusing on the wrong feelings, December layoffs, and Calling employees dumb dolphins.
From a practical standpoint, there was not an easy way to lay off 900 workers at various locations. No one seemed to like his smug, jerky tone though. Perhaps, he should have done it in smaller groups or did it audio-only. From the reaction from the internet, he did this in the worst way possible.
The BAN Report: Inflation Surges / Student Loan Payments Resume / What's After Cash / McDonald's Claws Back / Music Publishing Values Soar
Inflation Surges
In the month of November, inflation jumped to 6.8% - the fastest rate since June 1982.
Excluding food and energy prices, so-called core CPI was up 0.5% for the month and 4.9% from a year ago, which itself was the sharpest pickup since mid-1991.
The Dow Jones estimate was for a 6.7% annual gain for headline CPI and 4.9% for core.
Price increases came from familiar culprits.
Energy prices have risen 33.3% since November 2020, including a 3.5% surge in November. Gasoline alone is up 58.1%.
Food prices have jumped 6.1% over the year, while used car and truck prices, a major contributor to the inflation burst, are up 31.4%, following a 2.5% increase last month.
Allianz Chief Economic Advisor Mohamed El-Erian slammed the Fed for missing the rise in inflation.
The characterization of inflation as transitory is probably the worst inflation call in the history of the Federal Reserve, and it results in a high probability of a policy mistake,” the former Pimco CEO and current Queens’ College president said Sunday on CBS’ “Face the Nation.”
“So, the Fed must quickly, starting this week, regain control of the inflation narrative and regain its own credibility,” he added. “Otherwise, it will become a driver of higher inflation expectations that feed onto themselves.”
We concur that the Fed has been completely asleep at the wheel, going so far as to actively promote fiscal stimulus earlier this year. As Roubini and others points out earlier this year, the rise in US debt levels puts the Fed in a difficult position, as any meaningful rate increases will create credit problems.
Powell’s challenge is to try to curb price pressures without large costs to employment or growth, a move that would likely anger both political parties and blotch his record with the first Fed-assisted hard landing since the 1990-1991 downturn.
“They are in a difficult position,” said Jeremy Stein, professor of economics at Harvard University and a Fed governor from 2012 to 2014. If inflation is more persistent “and they really have to hike rates significantly, you can imagine what happens to asset valuations: There’s just a tremendous amount of interest-rate sensitivity in markets.”
During a Coleman Report podcast earlier this week, I was asked about how higher inflation impacts small businesses. Intuitively, small businesses seem to be more sensitive, as they may have less ability to hedge certain variable costs like fuel and more of their loans tend to be floating rate loans.
Student Loan Payments Resume
After nearly two years of relief from their obligations, student loan payments will resume on February 1.
As President Joe Biden's administration had promised, the payment process will restart for 41 million Americans in the month of February, White House Press Secretary Jen Psaki said last week during a press briefing. More details about how the restart will work will be released in the coming weeks, the Education Department said in a statement Wednesday.
Some borrowers have been hoping the pause on payments would be extended. There is precedent. Both former President Donald Trump's and Biden's administrations previously had extended the moratorium weeks before payments were expected to resume. Indeed, as recently as Wednesday, top progressive Democrats asked Biden to issue another extension, citing the economy and uncertainty around the omicron variant of the COVID-19 virus, Politico reported.
But the administration has long broadcast its plan to resume payments on Feb. 1. "A smooth transition back into repayment remains a high priority for the Administration," the Education Department said Wednesday.
While payments were paused, the nation’s $1.7 trillion student loan debt portfolio kept growing. Progressive lawmakers have been pushing Biden to use his executive power to forgive student loan debt en masse. Critics of loan forgiveness, however, say such a move would be a one-time solution and disproportionately benefit those with higher wages and loan balances.
The good news is cash balances are at an all-time high, so student loan borrowers have had time to prepare for this increase. Moreover, the pause in payments also froze the interest rate to zero, so there isn’t nearly 2-years of accrued but unpaid interest like there would be for any other deferral program.
What’s After Cash
The New York Times had a great Sunday Magazine cover story on the future of cash as we move closer to a cashless economy and embrace cryptocurrencies.
“We are at an interesting juncture,” Eswar Prasad, a Cornell University economist, told me. “It is a period of a great degree of concern about what happens to traditional forms of money and whether these technological developments we see around us are going to benefit us in some way or just create more disruption and turmoil.”
In much of Europe and East Asia you can go for weeks without touching paper money or coins. In 2013, a bank robber in Sweden was thwarted because the bank he targeted didn’t have any money to steal: The branch was a cashless location. Five years later, Cecilia Skingsley, at the time the deputy governor of the Sveriges Riksbank, the central bank of Sweden, told Financial Times, “If you extrapolate current trends, the last note will have been handed back to the Riksbank by 2030.”
The trend is the same, though not as advanced, in the United States. The share of Americans preferring to pay with cash fell to 18 percent in 2020, from 27 percent in 2016, according to a Federal Reserve survey, a trend accelerated by the pandemic. Americans ages 25 to 34 are less than half as likely to use cash as those 65 and older.
Last year, the New York City Council had to pass a bill requiring that food and retail establishments accept cash or face a $1,000 fine, in order to make sure people who don’t have credit or debit cards — people who are more likely to be poor, elderly or homeless — could continue to shop. There are similar rules in Philadelphia, San Francisco, Massachusetts and New Jersey. It’s a bad sign for a means of payment when the government has to force people to accept it.
The next stage in the evolution of money will be the rise of nonbank money, including cryptocurrencies, which are encrypted virtual currencies that exist in online ledgers. But the evolution could be rocky. In the United States, credit and debit cards are deeply entrenched. Bitcoin and other volatile cryptocurrencies, while popular as speculative investments, by and large, aren’t useful for everyday transactions, making them more akin to financial assets than to money.
Some economists believe there is a risk that we’ll someday find ourselves with nothing that is universally accepted as a medium of exchange. Even government-issued money, they fear, could someday fall under suspicion. Monetary systems depend on “a leap of faith,” the economist and law professor Neil Buchanan wrote in a 2013 blog post. People accept it because others accept it, making money one big “group delusion,” he wrote.
The US appears to be lagging western Europe in adapting to this shift. But, the pandemic seemed to accelerate the shift away from cash. I know of a few “cash-only” restaurants that finally caved to credit cards, although Peter Luger’s in NYC is still clinging to cash-only. The rise of cryptocurrencies, which has also been a speculative bubble, demonstrates that market participants believe that cash alternatives will prevail. There are still too many people without bank accounts, or credit cards to go completely cashless. Moreover, tipping at a coat-check, valet, etc. will be cash for the foreseeable future.
McDonald's Claws Back
In resolving its litigation with its prior CEO, McDonald’s announced yesterday that it has successfully clawed back $105 million in cash and stock from Steve Easterbrook.
McDonald’s had sued Easterbrook over his “misconduct, lies and efforts to impede investigation into his actions,” the company said in a statement. The clawback — one of the biggest in corporate America — matches the severance and compensation package Easterbrook “would have forfeited had he been truthful at the time of his termination,” company chairman Enrique Hernandez Jr. said Thursday in a memo to employees viewed by The Washington Post.
The announcement was accompanied by a statement from Easterbrook, who acknowledged he had “failed at times” to uphold the company’s values and fulfill some of his responsibilities as a leader. “I apologize to my former co-workers, the board and the company’s franchisees and suppliers for doing so.”
Easterbrook made his exit in November 2019, after admitting to a “nonphysical, consensual” relationship with an employee involving texts and video calls, in violation of corporate policy. At the time, Easterbrook said he had not engaged in any other relationships with subordinates. McDonald’s board had terminated his contract “without cause,” allowing Easterbrook to keep millions of dollars in compensation, and replaced him with Chris Kempczinski.
But an anonymous tip in July 2020 prompted an investigation that ultimately concluded that Easterbrook had “physical sexual relationships” with three employees in the year leading up to his termination, according to the lawsuit McDonald’s filed in August 2020. Not only did Easterbrook delete photos, emails and texts to hide these relationships from the board, the complaint said, he also approved a stock grant worth hundreds of thousands of dollars for one of the employees while they were involved.
Had Easterbrook been candid and not concealed evidence, the lawsuit said, the company would not have approved his multimillion-dollar exit package. “Accordingly, McDonald’s brings this action to redress the injuries it has suffered by virtue of Easterbrook’s fiduciary breaches and deceit.”
This is a huge win for companies in going after executives for bad behavior. CEOs of large companies have to be squeaky clean in their professional lives, and probably their personal lives as well. At the time of his firing, Mr. Easterbrook had a single consensual relationship with an employee he did not supervise, and the board had no choice but to fire him for violating company policy despite a strong track record as CEO.
Music Publishing Values Soar
In another sign that valuations are sky-high for almost everything, Bruce Springsteen this week sold his music rights to Sony Music Group at a record price and multiple.
The approximately $500 million valuation represents more than 30 times the annual royalties on the combined recorded music and songwriting catalog—an aggressive bid that kept Mr. Springsteen’s camp in exclusive talks with Sony instead of looking for a buyer on the open market, according to the people. Sony has been the Boss’s record label home for his entire career.
Mr. Springsteen’s sale follows an onslaught of other artists seeking to sell their music catalogs at valuations as high as 20 times their annual royalties as revenue from streaming music has grown with the popularity of services from Spotify Technology SA, Apple Inc. and Amazon.com Inc. Bob Dylan sold his entire music catalog to Universal Music Publishing Group in a transaction said to be worth $300 million to $400 million. Stevie Nicks sold a majority stake in her songwriting catalog valued at about $100 million.
According to an interview David Crosby did earlier this year, he decided to sell his catalog after prices jumped from their historical average of 10x yearly earnings to 19. Now, the Boss is getting 30X. And, no hometown discount either as Sony has been his record company for his entire career.