Thursday, April 30, 2009
Here is a view of the Trump building with other high rise buildings near sunset. Note a new angular building - that one was recently erected and it is very eye catching. The unique design is driven by the fact that someone on the street wouldn't sell out.
Here is a second view with the Hancock in the background along with the Rock N' Roll McDonalds in front.
This is a close up of Trump Tower with the IBM building in front. That IBM building is iconic - it was designed using the same theme as the IBM Mainframes and even the selectric type writer - no kidding. There was a funny article in the Chicago Tribune where a woman complained because she spent $925,000 (!!) for a ONE bedroom in the Trump tower directly across from the IBM building which doesn't turn out its lights because it houses a major law firm... which by coincidence is moving to the big building lit up and under construction in the photo. Here is the article and check out the commenters lambasting her for spending so much $ in the first place. Note that to finance that (say you put about 10% down) would be about $5500 / month... implying that with assessments and property taxes you'd have to rent that for $6500 / month to break even. YIKES.
Finally - here is a new building at 300 N LaSalle. I tried to take this with a quick shutter so it was less blurry because the top few floors feature a very cool staircase and the building has interesting lights that I usually can't make out in a typical photo. This building is 60 stories and houses another law firm, meaning that the lights are on at all hours, too.
All in all the gorilla tripod helped a lot and hopefully my pictures can get a bit less lousy.
Wednesday, April 29, 2009
Gunstock 1 was such a success last fall we have discussed all options in which to improve the upcoming annual LITGM autumnal firearm event. A committee was formed and recommendations were discussed during our many meetings.
We discussed options from hiring a clown, getting an inflatable moonwalk, a portable above-ground trout pond for the kids to fish in, a special appearance by Mr. Pierogi and even a Tilt- A Whirl for the older folks. The hard part was finding a way to fund any activity during this economic downturn.
After serious discussion and lobbying with my local congressmen, a White Sox fan that knows BHO (who owes him one for indiana going blue), we settled on what we think will be a boffo photo-op paid for by the federal government.
Click on the photo to enlarge.
This year at Gunstock ll, here at the family farm in northern Indiana, we have arranged to have Air Force One, along with two F16 United States Air Force Fighter jets perform a low altitude fly-by simultaneously as a recording of Wayne Messmer singing the Star Spangled Banner reaches the crescendo and the first large caliber gun shot is fired.
Mark your calendars for late September and buy some ammo before it all disappears.
God Bless America!
More info as it becomes available.
I walked by this display and did a bit of a double take.
It is an advertisement ABOUT an advertisement. The ad is telling you to advertise your product on Bravo, supposedly because it has a better demographic.
Who are they aiming this at, putting it on a bus stop? Are they hoping some brand executive drives by and says, hey, I need to start advertising on Bravo?
I recently bought an iPod Touch for a bit over $200 and find it to be great fun. It is like buying an iPhone except my monthly contract is ZERO, because it connects with my home wireless network and other wireless networks where I have a password.
One of the cool elements of the iPod Touch is the fact that it gives you access to the Apple "Store" where you can purchase new applications. The vast majority of the applications for the iPhone work on the iPod Touch, except for a few that require a microphone (the iPod Touch does not have a microphone because it isn't a phone).
In the Apple Store I saw this game - Castle Wolfenstein - and immediately had to buy it. The game was a few dollars which were very well spent.
CASTLE WOLFENSTEIN BACKGROUND
I had an Apple II in varying configurations growing up. We played a lot of games, including Wizardry, the pioneering D&D simulation, but we also really liked Castle Wolfenstein. The original Castle Wolfenstein featured an Allied soldier trying to escape from a German WWII castle - the game was notable because it was the first (I knew of) that used voices - the guards would yell at you in German and shriek when you shot them. The game today looks very primitive but at the time it was revolutionary - especially because it involved stealth (you snuck past the guards and they would follow you after shots were fired), and wasn't just a shoot-em-up. Here is a cool wikipedia page with history and some screen shots from the original.
Later, a 2nd version of Castle Wolfenstein came out where you attempted to escape from the castle but it was one of the pioneering "first person shooter" games. You could just see your pistol with a view of the solder in a small box... as he got more banged up there was blood on his face. At the time walking through the maze with pictures on the wall and secret passages was just amazing - it was such a jump over everything else out there at the time. The game also pretty much popularized the "boss" phase, where you came face-to-face with one of the toughest guys at the end, often with cool weapons. The game also led to DOOM, which of course spawned much else in the future. Here is another great wikipedia page with the history of the game.
Personally, I started playing the game and was surprised by how much of the mazes and details I remembered. Apparently my brain is still reserving a lot of cells for this type of information. Unfortunately, my carpal tunnel kicked in and I had to delete the game after finding myself playing it for a few hours at a time on consecutive days.
But BOY does that take me back, and is highly recommended for anyone wishing to re-live old gaming times in a very small package with a 100% faithful port of this game.
One of my missions in life is to discover and create delicious inexpensive food. You don’t need a recession to eat very tasty food on the cheap. Yesterday I made Carnitas from a pork shoulder, or the pork butt. This cut can be had for as low as 89¢ a pound. My sudden impulse for Carnitas caused me to pay $1.20 a pound for a five pound butt, not bad.
Pork butt is a very versatile cut if you have some time and know what you’re doing. I have at least five different recipes for this shoulder cut (besides making sausage) and no two will taste the same. It beats eating SPAM for $2.60 a pound.
It’s easy to buy some ground beef for $1.80 a pound, a packet of taco seasonings, come lettuce and cheddar and sit down for some damn good tacos in about an hour. That’s fine but there are times when my tongue likes to dance and I don’t mind a little extra work.
I took a 5 lb. hunk of butt and boned it. No, not what you’re thinking. I cut the meat away from the bone and sliced it into 2’ chunks while trimming as much fat as possible. The spice list is simple. 1t salt, 1t pepper, 1t cumin and 1t oregano. After tossing it all into a large dutch oven with 2 cups of water, an onion quartered and the juice from one lime and one orange it goes into the oven at 300 degrees for 2.5 hours. Have a drink or five.
When you pull it out of the oven the first thing to do is separate the meat from the juice. Remove the hard ingredients such as the bay leafs, onion and orange rinds. Next pull your big pork pieces into two pieces on a separate plate while the liquid in the dutch oven reduces into a thick sauce. Switch the oven from bake to broil and place a rack onto an oven set on broil. Place on second rack from the top.
Place the pork chunks into the sauce and coat it with the sauce and a bit of salt and powdered cayenne pepper. Place chunks on a wire rack over a pan and broil for a few minutes to char the outside.
I like to break up the chunks and top a small warm flour tortilla with the meat. Add cilantro leaves, some chopped raw onion, a few drops of taco sauce and a touch of shredded cheese.
Pig out. On the cheap.
Tuesday, April 28, 2009
Recently I was out with a friend of mine at a local bar in Roscoe Village, where he lives. A big crowd of people were milling around, apparently part of a pub crawl, and they called us outside to take a picture of them using their cameras (it was early in the night, and everyone seemed in pretty good spirits, and mostly functional).
It turns out it was a PBR pub crawl, meaning that they were drinking PBR at every bar they came to. They even gave us a bumper sticker which I lost somewhere during the evening but I found a photo of in my camera the next day.
MAN those people must have a stomach like a lizard or something. It is hard to imagine drinking PBR on purpose for hours on end. But shouldn't something like this be done out of a can, with the can kind of warm? That would give you the true PBR spirit.
Well, "suck" is probably relative. I should say that I suck relative to the other guys in my class who are better boxers than me. Sure, I am improving, but it is a very, very slow haul. The results don't really come to me as fast in the "sweet science" as they do kicking, or doing other things.
To that end, I have been trying to watch more boxing on TV to catch a tip here or there. I have found a fighter that I really like, Manny Pacquiao. Get a load of this guy.
His hand speed is just sick.
Well, I will keep working on the boxing, and I hope Manny wins his fight this weekend too. Too bad it is on pay per view - I just have never been a fan of the PPV stuff unless I am going in with a bunch of guys to split the cost.
Monday, April 27, 2009
The courage of those men on the "Tin Cans" blows me away. These little destroyers charged headlong into the teeth of much larger Japanese warships. Many paid the ultimate price. But I don't want to give too much away. "Tin Can Sailors" is one of my favorite all time books.
Once I get a good book by a good author, I tend to stick with that author. Hornfischer's "Ship of Ghosts" has been sitting on my "to read" shelf for a long time, and with a business trip I took last week I decided to take it with me to kill time on the plane. Another outstanding read.
Ship of Ghosts doesn't have a very happy beginning, middle or end. It is the story of the USS Houston and it's survivors. The Houston (CA-30) went down in the battle of Sunda Strait. Only 368 of her crew of over 1,000 survived. She went down blazing, which is consolation to me, but not to the families of those lost.
As if that isn't bad enough, many of the survivors were machine gunned by the enemy as they floated in the water. With great survival instincts and ingenuity, many made it to shore, along with many survivors of the HMAS Perth, which was sunk in the same battle at Sunda Strait. Unfortunately for those who did make it ashore, the Japanese had pretty much conquered Java and the surrounding areas. The men were captured, and sent to prison camps.
I think "camp" might be a gracious way of putting it. Conditions were horrific most of the time, and a large count of the survivors of the naval battles ended up working on making the Burma Railway, or Railway of Death. The final two-thirds of the book are about how those men toiled, got sick, and somehow made their way through three years of misery to survive and tell their tales. Not to mention the daily mistreatment (to put it lightly) by the Japanese. The death rate was astonishing - I can hardly believe that any of them made it through all of that.
The book is extremely easy reading, and I very much enjoy Hornfischer's style of mixing up short stories from survivors with official histories and action reports. I highly recommend "Ship of Ghosts" along with "Tin Can Sailors" if you enjoy WW2 Pacific theater history.
Cross posted at ChicagoBoyz.
As I walk through my neighborhood in the River North area of Chicago I often take photos of interesting building and various other things. But on the corner of Huron and Wells, at approximately 160 W Huron, is a building so fiendishly ugly that it wouldn't be out of place in Communist era Russia.
I can't figure out what the crap on the side of the building is - it appears to be bare concrete with windows that are barred - but it sure looks terrible. It seems beyond imagination that anyone with the city would have approved this building if they knew what it would look like, in a posh upscale district, to boot.
If anyone knows any history on this building, put up a comment. I used google maps to walk around the building and if you type in 160 W Huron and use the "street view" technology you can get a closer look at this building, if you dare. It looks worse from the Wells side than from the Huron side, by the way.
The sad part is that the real estate boom passed this place by. Now it will be another decade before anyone who doesn't have "cash in hand" financing builds ANYTHING in Chicago, so we will have to look at that damn ugly building that much longer. Unfortunately it appears to be sturdily made of concrete so we can't just wait for it to collapse and be condemned.
After I "scheduled" this post a few days out (I sometimes do this when I have a bit of time on my hands during weekends) I walked by the building again from a different angle and it is EVEN UGLIER! Look at the mismatched paint and other junk.
If you like to catch fish this is the best time of year.
After three weeks of trying the spring bite was finally on. As soon as the walleye and northern pike season opened last Saturday in Michigan the crappie went on a hot bite. When this happens you can’t keep them off the hook.
If you’re not familiar with the crappie it’s a delectable panfish if taken from cold northern waters. In the spring they can be easy to catch when you are able to locate them.
When you do these tasty little buggers are so easy to catch it’s the best time to take a kid out and show them how much fun fishing can be. It also allows you to bring home another limit, which is 50 per person in Michigan.
These guys weren’t kids but they were novices when it came to fishing. If you look to the right, onshore, you will see what a rabid Michigan State fan did to his front lawn. About half the cabins on the lake sport MSU flags or Spartan symbols. The other half? Notre Dame, since we were about 30 miles north of South Bend. Click on the photo to enlarge.
There were eight guys in the cabin this weekend. Saturday was the walleye and northern pike opener so everyone was excited to get out on what was predicted to be an 80 degree weekend. Starting this year Michigan also allows fishing for bass on a catch and release basis beginning the same day. In the past targeting bass was prohibited until Memorial Day weekend.
I was able to catch one bass that went 14.5”, not big but a keeper. None of the others were able to catch one bass on Saturday. My main interest is catching the best eating fish that will bite. The two young guys in the cabin caught five crappie on Saturday so I had my plan all set for Sunday.
By noon Sunday there were 30 very large crappie in the box. I was surprised at their size, most were over 10” which is very good. I remember only throwing two undersize fish back.
Then came the work – cleaning that mess of fish.
As soon as the weather clears I will head back for more, a hot bite like this won’t last more than a week or so.
Sunday, April 26, 2009
Way back in November, 2007 I notice an ad in the Chicago Tribune real estate section for a large condominium development with the wishful thinking advertisement that "the end is here" for reductions in condo prices in River North and I blogged about it because the ad was quite striking.
Well... obviously prices have gotten FAR lower. Now that condo association, after offering to pay condo assessments for a period of time (a year, I believe) now is essentially offering a "free" bedroom - or a 2 bedroom for the price of one, if you see the sign in front of the building.
This is why I never try to "call" the bottom...
In the April 27, 2009 issue of Barron's magazine is an article titled "An Alternative to Alternative Fuels" by Mike Hogan. Barron's is an offshoot of the WSJ and generally offers pithy and to-the-point articles, although sometimes even they go off the reservation.
The byline in italics does a pretty good job of summing up the REALITY (not the fiction, by both Democrats and Republicans) of our energy policy:
When you see more wind turbines and solar farms built, your first thoughts should turn to gas
Doesn't that sound counter-intuitive? But the article does a decent job of explaining why.
Gue just returned form the US Energy Information Administration's (EIA) annual conference, where he was puzzled by Secretary of Energy Steven Chu's focus on renewables - with scant mention of oil, gas, coal or nuclear power: "This is striking to me because these four sources account for nearly 93% of U.S. primary energy consumption: and, according to the EIA's own estimates, will still make up more than 90% of the total in 2030."
Chu is the presidents' new golden boy who is supposed to take the US energy policy into the new direction of alternative energy, even though as a scientist in charge of actual facts he must know that this is nothing more than window dressing, since renewables face a host of difficulties (they are unreliable, there is no transmission, and they are heavily dependent on subsidies).
As the article notes, oil, nuclear and coal are essentially pariahs. Don't believe the Republicans touting 100 new nuclear reactors - we might get 2-3, if all the cards fall just right. They likely cost $10 billion EACH, with power company balance sheets shriveled and no incentives, there isn't $1 trillion dollars ($10 billion * 100 reactors) just laying around for them to toy with.
As the article notes, then the only viable alternative for an actual, functioning economy is natural gas. Why? Because you can site a natural gas plant pretty much anywhere, they are cheap to construct, and are viewed as environmentally benign. This has been our de-facto energy policy essentially since the early 80's anyways - if you need generation, don't bother trying to build coal, nuclear, hydro or new transmission lines - just site a natural gas "peaker" plant near the demand and call it a day.
The PROBLEM with natural gas is that it is the most EXPENSIVE to run of all the items listed above. The plant is relatively cheap to construct and run (fixed costs), but the marginal cost of natural gas is much higher than the marginal costs of the other plants. If you really ran a peaker plant all the time, the cost will go up very quickly in most typical natural gas markets.
The price of natural gas is a roller-coaster. When I was in the industry in the 90's $2 / unit was a good price. There was some seasonality in the price - it would spike up during the winter months and also in the peak months of summer - and the price would go down as utilities re-filled their storage capacity in the "shoulder months" of spring and fall.
Nowadays natural gas prices spike wildly; they were recently near $14 / unit before they have fallen down below $4 / unit. At $14 / unit, your local natural gas peaker plant is a horrible blot on your electrical bill - at $4 / unit, probably not so much. In fact, if there was stability at around $4 / unit, that would be a good price for the industry.
Natural gas is essentially a local US and Canada market. We did add some LNG terminals that allow us to bring in foreign gas to the US - this is a good thing. The natural gas, however, competes with gas used for heating and is tied to our fickle environmental policies and tax policies which change by administration - for instance much of the best drilling area for natural gas is currently off limits and tax breaks for drilling (and other incentives) are at risk, while the prior administration was all for it.
The environmental debates are hype. Here are facts:
- Almost no new nuclear plants will be built - maybe 2 to 3 (optimistic) which won't even dent what is coming out of service
- Almost no new coal plants will be built - also not enough to keep up with old ones coming off service
- Since most of the renewables are low power in terms of MW and not sited where there are transmission lines, they won't make much of a dent in anything
- We don't have the will or the money to fix the transmission grid, that isn't going forward
- There likely will be some savings on the distribution (customer) side from more efficiency and perhaps smart meter benefits - these will reduce the rate of growth in usage
- Businesses don't rely on the grid if they need un-interruptible power - they will just keep on buying and installing backup generators, at a higher total cost than just building reliable baseload generation (making us less competitive overall, and frankly a bit third-worldish)
- Whatever gets built will be natural gas, and then our overall price (market rate) for power will essentially be set by the highest cost "peaker" units, which will be natural gas. Thus if prices stay low, we are OK, but if they rise, expect chaos in the markets
I wouldn't call that an "energy policy", since it essentially means let our base load units rot and make our policy dependent on the wildly fluctuating spot market for natural gas, but, there it is.
And don't believe the hype, from anyone.
Cross posted at Chicago Boyz
Saturday, April 25, 2009
As I walk to work in the morning I pass right by the headquarters of General Growth. General Growth is a corporation that owns over 200 shopping malls throughout the United States, along with other commercial properties. General Growth recently declared bankruptcy, stating that this filing will not impact operations at its properties. From their press release:
The decision to pursue reorganization under chapter 11 came after extensive efforts to refinance or extend maturing debt outside of chapter 11. Over many months, the Company has endeavored to negotiate with its unsecured and secured creditors to obtain the time needed to develop a long-term solution to the credit crisis facing the Company. Unable to reach an out-of-court consensus, the Company reluctantly concluded that restructuring under the protection of the bankruptcy court was necessary. During the chapter 11 cases, the Company will continue to explore strategic alternatives and search the markets for available sources of capital. The Company intends to pursue a plan of reorganization that extends mortgage maturities and reduces its corporate debt and overall leverage. This will establish a sustainable, long-term capital structure for the Company.
I am not an expert on the commercial property industry but am starting to learn more about it since it has an integral impact on the skyline of Chicago and many other cities around the country. Essentially the commercial property industry purchases properties mainly with debt, puts in a bit of equity, runs the properties, and then plans to sell them at a profit to another commercial property company. With low interest rates, easy lending terms, and many buyers, there has been an immense run up in commercial property, and companies like General Growth were flying high. GGP's stock traded near $80 over the last couple of years, before collapsing near zero as the debt markets seized up.
The downfall of the commercial property industry, however, is the fact that many of the loans need to be "rolled over" every few years. On your home, for instance, you may have a 30 year mortgage. The debt on the commercial property industry, on the other hand, rolls over usually within 5 years. Given that a typical company has many projects, in the next 12-18 months many of these sorts of companies are finding loans coming due and they have no way to raise the money (except at punitively high interest rates, if they can find money at all), so they are all starting to go bankrupt and fall like dominoes. It doesn't help that many of these enterprises bought properties in the go-go years of 2005-8, when prices were rising all the time and there were bidding wars - it is likely most / all of those properties today are worth less than they were purchased for which makes obtaining new financing even more difficult (try to refinance your home loan for more than the current market value of your home... it isn't happening).
The Chicago Tribune had an article in today's paper titled "Little Room to Operate - High debt load, declining revenue for hotels could bring glut of loan defaults". This article discusses hotel construction efforts that are likely to stay half-completed (see my post on this months ago, from November, along with links to a video of Thailand)and the fact that many completed buildings are likely to be seized by lenders.
While I knew that many of these commercial properties and hotels were purchased with lots of debt and very little sweat equity, even I was surprised by this quote from the article:
In 2007, you could buy a $100 million asset and put $5 million or $10 million of equity in the deal... that same $100 million deal today, you would need a minimum of $50 million of equity.
An entire industry was built on optimistic assumptions on revenues, expectations of instant access to credit, along with low interest rates - and now that industry is going to be in for an immensely painful crackdown.
Once whatever is built is completed, don't expect anything new and significant to come on line for many years to come, and those projects that do come will be built to meet known demand with well funded developers, not fly-by-night guys building on "spec" with a dream business plan.
As someone looking at a skyline, at least once it is built I am indifferent if the original builder loses his (tiny) equity stake and even if the bank gets hit with a big loss on the loan. I just don't want to look at a half completed building for the next decade. Once built, the building will be occupied, unless the cost of operations is greater than tenant income, which seems unlikely. Given the high up front costs of construction and debt in this industry, once those are removed (i.e. everyone goes bankrupt and the loan is sold at a loss) an office building should be able to generate positive cash flow.
These new buildings, especially if they come through bankruptcy with a light debt load, will in turn put immense pressure on existing, non-bankrupt commercial retailers. After all - would you rather stay in an older building at or near market rates when you can move into a brand new building that is offering you a discount (because any tenant is better than no tenant)? The older lower quality buildings will soon be in competition with the new buildings and will have to slash prices or lose tenants, which will impact THEIR ability to roll over their financing.
All I know is that the commercial real estate shake out is far from over and I would expect virtually all of the heavily leveraged players to fall into bankruptcy and then many of the other players who still have pretty high debt load to fall onto hard times as they compete with the buildings that have cleared bankruptcy and have new investors. Given the fact that bankruptcy doesn't "shutter" the competitor (just the company behind the operations), these markets are going to look a lot like the airlines, where the bankrupt companies just don't go away and keep dragging down their healthier competitors. The prices are going to go down and down, and it won't fix itself for many years until demand picks up again. Don't count on many of today's players to make it to that point, though.
Cross posted at Chicago Boyz
When I was out with a friend of mine when we ran into the PBR pub crawl (another post coming soon) I saw this sign and it brought back some hazy memories. The Cubs and the City of Chicago put these signs out in the neighborhood every year with the specific dates of the Cubs night games and restrictions on neighborhood parking (for non-residents). When I lived in Wrigleyville we stole one of these signs and the horse it was attached to and brought it up to our apartment, where it sat for a couple years, and I think there is a photo somewhere of all of us around our prized possession. Suffice it to say that women were not impacting our decorating techniques at the time - our furniture was whatever we garbage picked or scrounged from where-ever. I also remember getting a parking pass from Helen Shiller's alderman office - talking about a lunatic - she literally had a photo of Fidel Castro and Che in there. Among all the renovation in that neighborhood she courted public housing and extreme liberal causes. But that's where I had to go to get a parking pass. Another hazy memory involves Dan getting into a minor fender bender and going to the local police station to talk to them - and the visitor friendly cop just looked at Dan and said "what the f*ck do you want?"
As far as that apartment, what a steal. It had 3 bedrooms (although mine was the size of a closet, but I was never there) and it was $600 / month. The landlady wanted a $300 deposit - we just went to an ATM and gave it to her right there. That place was a dump, big and old, but a great bargain. I am getting old now, that was about 15-20 years ago.
Ah... hazy memories.
1. There are 20 million bloggers in the USA
2. 1.7 million are profiting from this work
3. 452,000 use blogging for their primary source of income
Per the article, which uses some information from Technorati, an online company that rates blogs, if you have 100,000 unique visitors a month you can earn $75,000 / year.
I find this to be very interesting. From Dan's experience (mine is more limited) and discussion with the guys at Chicago Boyz, which is a much bigger blog than ours, it seems like these revenue numbers are very high. From what I have heard, the typical blog gets peanuts from click-through revenues on ads.
There is a different world of people who care about their clicks, who sweat their search engine position, and intentionally TRY to gather viewers by posting about celebu-tards and the rest. That isn't us.
However, if we get 10,000 visitors a month, and say 5000 are unique (that's about right for where we are now), would we earn 1/20 of $75,000? I highly doubt it - the curve probably isn't linear, you probably get crumbs until you start getting a lot of viewers, but I don't really know.
If I really thought that this blog could earn 1/20 of $75,000, or say a bit around $4000 / year, then maybe we'd consider it and then donate the $ to some worthy charity, probably around veterans or the troops or something like that.
This is just a thought experiment, I really don't think we'd get more than scraps, but the numbers did catch my eye.
Friday, April 24, 2009
The municipal bond market is a critical source of funding for states and local government in the United States. These bonds are traditionally free of Federal taxes (assuming they meet some criteria, which most of them do) which allows them to raise money about 25% cheaper than equivalent taxable bonds of the same credit quality, all else being equal. Bonds are also often exempt from state taxes in the state that originated them, a concept that required a 2008 supreme court ruling because of allegations that it violated interstate commerce rights.
In general, municipal bonds have lower default rates than other equivalent bonds based on prior history, and the recovery rates for those bonds which DO default is higher, as well. As a result of these historical trends, municipalities are generally able to issue debt at lower interest rates and find buyers.
While history is important, I would be wary of the market right now. As you can see in this article, the governor of California is starting to request that the Federal government provide a backstop for their bonds. In a prior article, I noted that the entire issuance of an Illinois bond sale went to a single purchaser, who just happened to be a big bank receiving large amounts of Federal funds (it helps sometimes to have lots of people from Illinois in the White House, I guess).
One item to note is that sometimes when markets fail, they don't do it gradually, they do it as a grinding halt. For example, markets that municipalities used to refinance debt at short-term rates (auctions) failed in February 2008, as a predecessor to the big credit crunch which happened later in the year.
I don't have a crystal ball but there are many ominous signs today in the municipal bond markets, especially for states like California. Given the heavy democratic base in that state, I'd expect some sort of Federal intervention, which could get messy, and will lead to unknown consequences. I would check your portfolio and do some thinking about what a moratorium on interest payments, for example, would do to you. You can also see how the Federal government is treating debt holders of GM, for example, which is to say very badly.
Cross posted at Chicago Boyz
Thursday, April 23, 2009
Recently I needed a new pair of running shoes. I talked to someone who knows way more about the topic than I do and scribbled down her instructions of what to buy.
I have a few choices. There is a big sports supply store down the street, and there are various running stores within a couple of miles of my house.
Since it was crappy outside (it still is, but we have high hopes for this weekend here in Chicago) I did something else - went online to Zappos. Zappos is the famous online shoe store that is supposed to have great prices, service, etc...
I was able to pick out pretty much any type of shoe - they had the specific model I was looking for, along with online reviews of the shoe comparing it to its predecessors (and successors). I have wide feet and wanted a certain size, width and color, and no problem finding it.
The price was good and there was free shipping and no sales taxes. In Chicago, the retail sales tax rate is 10.25%, so that is a relatively big deal, it was about $12 savings relative to purchasing it in a store.
What stunned me, however, was the fact that the shoes arrived THE NEXT DAY. I don't know if they have some sort of warehouse here in Chicago or how it happened, but I was totally amazed to find the box at the front desk of my condominium the very next morning. FOR FREE.
I think that high sales taxes and the ease and selection of online commerce, combined with reasonable and fast shipping, is severely going to crimp retail here in the United States. I know that people have been talking about this for years but in an age of frugality and very high local sales taxes the allure of online shopping has increased significantly.
The search engines within these sites have also been improved. It is much easier to find exactly what you want, and many / most items have a lot of reviews. I figure if it is 2 or 3 reviews I am suspicious that they might have been "planted" by the online firm but when you have 40-50 reviews that are very detailed, saying the pros and cons of what you are looking at with some clarity and consistency, you can have more confidence that what you are buying is right for you. Here is the most fun search engine selector, by the way.
Another subtle thing about shopping online is that you get used to buying more and more items online. For example, if you go to Amazon, you can get pretty much anything from there. I recently bought a coffeemaker and coffee from there, something I would have thought of as ridiculous a few years ago (can't you just go to a store?) but the price was right and the reviews let me know I was getting exactly what I was looking for. Since Amazon already has my info, I didn't feel like I was giving my personal info out to another random web retailer that might not be there in five minutes. I also recently bought a big-screen TV from Amazon - free shipping, no taxes, and someone even came to set it up and take away the empty box ("white glove service" they called it) and it was a great experience, way better than going to now defunct Circuit City or Best Buy.
I realize that the "buzz" on online commerce has died down and everyone has moved on to the next faddish type item. However, it is important to note that the most significant impact of items like this happen over time and not always when it makes headlines.
The confluence of 1) high sales taxes 2) reasonable and fast shipping 3) vast selection 4) solid reviews and search functionality 5) comfort with the system 6) reasonable confidence in information security 7) ability to purchase setup and have them deliver heavier items to your door is going to really put a hit on high-cost and highly taxed retail.
Cross posted at Chicago Boyz
Wednesday, April 22, 2009
It's that time of year again. Earth Day. That annual celebration of dubious environmental hysteria is today.
Being an avid outdoorsman all my life everyday is Earth Day. Anytime I can get outside to fish, hunt or camp it is my intent to enjoy the planet and leave nothing behind. It sickens me to see beer cans in the field and fast food cups floating in the waterways. Not being an "environmentalist" I don't take it to extremes like the embarrassed hippies in the following video do. Fools, they are.
The environmental movement is nothing more than a leftist attack on progress, although many environmentalists call themselves progressives. They attack big oil, big chemical, big auto and anything else that's big. They are easy targets.
I am in favor of common sense environmental laws. Since the creation of the EPA many waters are cleaner and more fields are greener. That's good. But the latest cause du jour of man-made global warming is a joke and the supporters of this movement are power hungry politicians with an agenda. Since they're shameless and have a media and public education system to support their lies it's hard for the feeble minds to dispute. They make up stories about polar bears dying to fill our young with guilt and tell of rising oceans to scare coastal dwellers in populated urban areas into their fold.
Awareness has helped keep the highways, waterways and wilderness clean. But to a leftist, it's never enough. Placing unnecessary burdens on commerce with carbon taxes or cap and trade is a charade. The real agenda is to cripple American capitalism.
Anyone who claims to be an environmentalist is a fraud. It's nothing more than a bumper sticker or t-shirt to wear and express their false feeling of superiority and higher intelligence than the rest of us.
An excellent article on the subject is here:
Damn hippies can ki$$ my a$$!
Tuesday, April 21, 2009
The correspondent, Arthur Tenney Holbrook, recounts a tale of a tale.
Mr. Holbrook laments the fact that his son had to trek nine miles on foot to get back to his residence one night. Mr. Dennis, now 84, says - is that it?
Next time you drive to work, take a look at your odometer and measure out 9 miles. No short distance, that.
The next assignment is to see how far 65 miles is on your odometer. You see, that is the distance that Antoine Dennis carried the mail back and forth, over and over. This distance would take him two days. Oh yes, he did it carrying the mail, some pork, tea, a blanket in winter, and probably not much else. 65 miles is the distance between Superior, Wisconsin, and the city of Bayfield, Wisconsin. These cities are on the northernmost edge of the state, on the south shores of Lake Superior. For those not familiar with the geography, here is a simple look at that distance. It is still pretty remote, even today. This guy must have been one hard hombre to handle that.
No wonder he thought that Holbrook's son was a wuss.
Dennis would walk the mail between these two cities. He would leave Superior on Thursday and get to Bayfield on Saturday. Then he would leave Bayfield on Monday and arrive in Superior on Wednesday. He got paid double the going rate of the job he had at the time, working in a sawmill in Superior. So he quit the sawmill job and became a mail carrier - this was back in the 1870's.
Dennis became so familiar with the trails that he would cache his ax and pan along it so he didn't have to carry them.
I simply cannot imagine trying this - especially in winter. The bugs must have been literally insane in the summer. Dennis did make an interesting observation - he said that in winter the snow wasn't all that bad since the forests were so thick - that the open areas are where the snow really piled up and the wind really whipped. Still...
It is interesting to me to read about what people did just 130 years ago to make it by.
For those interested in this type of history, the article is well worth your time.
Cross posted at ChicagoBoyz.
I truly wish that I had video of myself when I started out. I see a little of that every time we get someone new at the gym and they are going through what I call the "feeling out process". They come in, stand in awe of the advance class members, don't know what to do, where to go, or how even to sign in to the class. Like I was back two years ago.
But the fact is that they are there, giving their free time for their art. Which earns them respect in my book. Until we spar, of course.
I look at my skills and how far they have come and think about how far I have to take them. I have about 4 years left until I receive my black sash, the ultimate achievement at our gym. I should be one bad azz mofo by then. If everything goes to plan. Which, at times, it doesn't.
I have learned a lot about myself in this short journey, and a lot about martial arts in general. And this is all good.
Over the past year I became an assistant coach for the fight team. I have also passed a few tests for my MT curriculum and last Saturday I passed my level 2 pad feeding test. I will soon be the best pad feeder in the whole state, of that I am pretty certain. Last night myself and one of the instructors ran through some drills that would make new people's heads swim - I wish I had that on videotape too. I need to get on that.
Times like this make me appreciate my wife as well. She is the one who takes care of the kids while I am able to make my time commitment at the gym, and for that I am VERY thankful. I tell her on occasion, but can't thank her enough.
I have another test in June, and the fight season will be in full swing here pretty soon. We get a new crop of fighters after that test as well. The head instructor will not let noobs into the fight class, they must have a good base in them first. This is great as I don't want to get hit, nor do I want to waste my pad feeding time explaining to a guy how to jab.
Looking back, I am amazed at how many people wash out of the fighters classes, and the curriculum classes as well. Sometimes a person will leave for 6 months and return. Some people show up once or twice a month. Life does get in the way of martial arts, I suppose.
Things will be ramping up for me before the next test, and I look forward to it. I will pretty much be putting my body into a program not unlike the fighters before a big fight - then I will have that glorious week in July where the gym will close, and I will get to relax, heal, and look back on my last six months of curriculum work. And look forward to the next.
The sky was amazingly blue and the colors were vivid. It looked very good out the airplane window and I managed to get none of the window frame in the shot and the glass didn't seem to interfere with it too much.
Since I figured that it is unlikely that I'll ever physically touch down in Greenland this would likely be as close as I'd get.
Monday, April 20, 2009
The mercury broke 70 for the first time this year on Saturday, so time to break out the bike. I had it at Cronometro for a tune up, so I headed down there to pick it up. I went home, suited up, and off I went.
I was only looking for 40 miles or so, to make sure the equipment was set up correctly and working fine. I also hadn't been out on the road yet, so just wanted a leisurely ride to get some miles into my legs. I brought my camera to take a few photos. You never know what you are going to see.
Early on, I saw this large vehicle. It seemed to be a husband and wife and kid, all in one long deal. They kicked a$$ on the flats, but any little hill was certainly a challenge for them.
This guy brought a weapon along, just in case. You never know what sort of animals you will find on the paths.
There were a lot of areas that had just had controlled burns. Ah, the sweet smell of ashes and smoldering grass in the afternoon, that hits just the right spot in the ol' lungs.
At one of my stops, there is a campsite and it was absolutely packed. As a matter of fact, everywhere I went there were tons of people outside, which is good. The bad part is that my paths were clogged more than usual, and traffic was pretty intense in the city. On top of the nice weather, the UW had their spring football game, which made my trip through campus pretty slow.
The only animals of note were these geese, just outside of the Alliant Energy Center (formerly the Dane County Coliseum) that you can see in the background. Note the one goose in flight. They weren't scared of me, they were running from a woman with two dogs on leashes.
I was at the Alliant Energy Center to see my wife and kids, who happened to be at the Midwest Horse Fair. More on that in the next post.
Click any photo for larger.
The Midwest Horse Fair was in town, and the crowd there was stunning. I have been to this Fair before, but never have I seen the turnout that I saw on Saturday. There literally was hardly a place to park, and people were doing the park and walk thing from pretty decent distances. I rode my bike in, and it was a bit more hazardous than your normal biking for obvious reasons.The horses didn't like my bike too much. This was a pretty cool looking one that made a lot of racket. I was the only guy there in spandex, by the way. Surprise, I know.
There were breeds of all shapes, sizes and purposes. It was mayhem with all the people and animals.
But I couldn't find my family (they were supposed to be around this barn) and my wife forgot to turn on her cell phone so I left. You can see my steed on the left.
Later in the ride, I came upon these guys playing Lacrosse. Look at the partially clothed guy in the middle. He either lost a bet or was playing a joke, as his teammates were chanting something as he ran around the field in that less than regulation outfit.
As is my luck, the skies darkened and I proceeded to get soaked. I headed home in the now cold, damp weather and only clocked in about 29 miles. No matter, it was still nice to get out for a bit.
Sunday, April 19, 2009
Each year at this time we get the boat ready to take advantage of every opportunity to get out of town for some fishing along with peace and quiet. One reliable place to get away is a cousin’s cabin on a small lake in southwest lower Michigan, about an hour’s drive from Valpo.
His cabin is on Magician Lake, which is connected to a chain of natural crystal clear lakes known as Sister Lakes. These lakes are nestled in the fruit belt east of St. Joseph MI about twenty miles east of I-94. The surrounding Michigan countryside is abundant with fruit orchards, vineyards and small produce farms. Lower Michigan is loaded with pothole farm ponds and lake chains that support abundant panfish, bass and pike populations. Seldom are we skunked but occasionally we run into a tough bite such as the past week.
Thursday and Friday the weather looked great with a rising barometer and warming temperatures so we went.
We go fishing for many reasons, #4 is catching a few dinners. #3 is getting together to share stories, #2 is to complain about the government and #1 is to get a good buzz on with a few friends. The past few days we scored 3 out of 4. No weather conditions guarantee fish in the box and this trip proved it. The warm weather brought out a lot of fishing boats and they all had the same idea, most were locals. As far as we could tell nobody was catching much but as they say, a bad day in the water beats a great day at work.
Over the decades there has been a rapidly shifting cultural influence on the lake. I have no problem with the nouveau rich but having money is no excuse for obnoxious behavior.
While drifting our favorite spots it was noticeable that many cottages on the shoreline had for sale signs displayed toward the lake. Twenty years ago was THE time to buy. A lakeside cabin with a 40-80’ shoreline frontage went for about $100,000 or less. Two years ago the same properties went for $500,000. or more. Most investors bought the property, not the rustic seasonal vacation cabins. A dwelling is worth so much less than the lakefront property it sits on. Location, location they say.
Last summer when fuel prices were at $4 a gallon it had little impact on boat traffic. It will be interesting to see if the economic downturn has an effect on wealthy summer cottage owners this year. I doubt that it will.
Here’s a fabulous log home built on property that once held two or three cabins.
The family who built it own a bank, they tell me. During the past five years we have yet to see a human being on the property. But what a nice job they did. The landscaping alone had to cost more than $100,000 with all the stone and Mexican labor.
Here’s another summer home that has been on the lake as long as I can remember.
It looks like a typical suburban Chicago home. Nothing like “getting away” from it all is there? I have never seen signs of human activity on this homestead either. Maybe they spend most of their time on the tennis courts in the back.
Over the past few decades we watched as small cottages were purchased, torn down and replaced with personal luxury vacation resorts. Temporary seasonal piers were replaced with permanent piers, which need no care or seasonal maintenance. Expensive, they are. It wasn’t unusual to see a Mastercraft waterski runabout (with the Ski Nautique decal emblazoned on the side) under a shore station canopy along with a fishing boat, a pontoon boat and a jetski or two tied up to the pier, all belonging to the same cabin.
Giving way to the next watersport fad those Mastercraft V8 inboard mid-engine ski boats were soon replaced by Mastercraft V8 inboard mid-engine Wakeboard boats. A fool and his money are…you know.
These wakeboard boats have the basic Mastercraft layout with an inboard center mounted V8 engine. They sport a much higher freeboard. What’s most noticeable is the stainless steel tubular structure which encompasses the cockpit area that supports a loudspeaker array, brackets to hold the wakeboards and a connection for the tow ropes. The cost of a Mastercraft Wakeboard boat can go for about $60,000. What you don’t see is the ability for this boat to hold water ballast.
From what I am told these boats take on water in onboard ballast compartments. The extra weight allows them to create a higher wake behind the boat. The wakeboarders then have a man-made wave from which they are able to perform their airborne acrobatic display. I guess this falls into the new “Extreme Sport” category. The speakers mounted on the framework provide a musical soundtrack that enhances their dubious folly along with disturbing and annoying anyone within 300 yards. Where are those Somali pirates when we need them?
It’s getting to the point that if we find a quiet and productive place on the lake to fish it wouldn’t take long for one of these jerk boats to enter the bay and destroy what would have otherwise been a peaceful day of fishing by roiling the water near our boat and acting like a$$holes.
Throw in a few jet-ski’s and you may as well be on the Chicago lakefront. Isn’t that what wealthy urban yuppie types are trying to escape?
Saturday, April 18, 2009
We almost won at the end of regulation but Noah made a bonehead foul that allowed the Celtics to tie the game (and almost win it) on foul shots. Other than that Noah played great. And Tyrus Thomas, that athletic freak who usually plays like he has a low basketball IQ, was playing great and hitting open jump shots, which surprised the heck out of everyone.
Rose fouled out right near the end of the OT period. His 36 points tied the most points in a first playoff game with Kareem. I assume he had a few more assists than Kareem, too.
At the end of the game Rose talked with one of the bonehead announcers. He seemed very humble and said he didn't know about that record (it is a bit obscure).
Even if we lose this series it really looks like Chicago got a winner with Rose and that is great. The game was well played, with actual defense on both sides, and frequent lead changes, rather than the 10 point leads and then big runs that the NBA is famous for. You didn't have to turn into the last 2 minutes to watch a good game.
I was recently in London walking through the exclusive Marylebone neighborhood when I came upon this building with a vaguely socialistic (hammer & sickle) flag. I walked up to the front door and noted that in fact this was the Embassy of Angola. I am not a real estate expert but my guess based on a cursory knowledge of rents in the area (the land underneath is usually owned by the Portman Estate) but I would guess that the rent for this location is probably somewhere around $75,000 USD / month. To put it in perspective it is very near to the Swiss embassy, but that is a country that can afford the rent.
This embassy sighting probably prompted me to buy the book listed above for a flight back to the states by Martin Meredith titled "The State of Africa - A History of Fifty Years of Independence". I was initially put off by the blurb in favor of the book by Bob Geldolf, but I flipped it over on the back cover and there were recommendations from more appropriate authorities, as well.
The book is an excellent read and it broadly covers the whole of Africa from the time of independence through the present day. At times it goes back further (such as the colonization of what is today the Democratic Republic of the Congo) but most of the focus is on the last 50 years, as it says in the title.
The overall thrust of the book is generally as follows:
- How the different colonial powers (Britain, France, Portugal, and Belgium) set up their regimes and generally how they handled the transition to local rule
- Some particular struggles (Algeria, South Africa, Rhodesia) are handled more in depth as they took longer and had more twists and turns
- The French colonies were more unique in that they voted (except for Ghana) to stay with France in more of a partnership (originally) - Ghana was cast out and everyone left at once
- The locally-run governments generally started in an era of euphoria and often were handed a reasonable level of infrastructure and a functioning economy (although not always, especially in the case where the entire European workforce left en masse)
- The local governments then began arbitrary political policies (like socialism, or industrialization) that did not leverage local strengths (like agriculture) and began the rule of the "Big Man"
- Where there were resources available (such as Angola, above), bitter and nearly insane struggles and civil wars erupted over control of these resources; almost invariably the riches of these resources were directed to a tiny political elite and not benefiting the entire country
- During the cold war the US and Soviet blocs favored different countries in proxy wars; France kept aiding their former colonies as a form of prestige
- The local governments contributed to famine through their uses of food as a weapon against rebel groups and through policies disruptive to the land (like forced collectivization in Ethiopia)
- Then AIDS came and struck across a wide range of their professional classes, leaving orphans and the elderly in countries already desperately in trouble
- There was sort of a "false spring" of new, less-corrupt regimes like Uganda under Museveni which then degenerated into a half-continent wide war over Rwanda and the Democratic Republic of the Congo, which was ably covered by Prunier in his book "Africa's World War"
On Angola in particular, ruled for years by dos Santos, Martin Meredith sums up the situation pretty well:
Throughout the rollercoaster years of war and peace, dos Santos and his entourage prospered greatly... Elite families also benefited from state scholarships for their children to study abroad, in secondary schools as well as university level, and from state provision of foreign medical treatment. Between 1997 and 2001 overseas scholarships accounted on average for 18 percent of total government expenditure on education, more than was spent within the country on technical education and higher education combined. Foreign medical expenditure consumed 13 percent of total government spending on health, almost as much as was spent on primary health care.
An indication of how wealthy they had become was provided in the Economist Intelligence Unit in 2003. It reported that there were 39 individuals in Angola worth at least $50M and another 20 reportedly worth at least $100M. Six of the seven wealthiest people were longtime government officials, and the seventh was a recently retired official.
The stark contrast between the rich elite and the mass poverty of the rest of the population was nowhere more evident than in Luanda. Its streets were packed with the latest models of Mercedes-Benz and Land Cruisers... but half the city's population of 4 million had no access to clean water... most Angolans subsisted on less than seventy cents a day.
Thus as you can see from the passage above, the Angolan embassy is perfectly placed to help the tiny circle of friends of the government to seek out the best possible schools and medical facilities, and is conveniently located near banks to enable them to invest their wealth offshore.
The book is generally apolitical. It doesn't call for a mass increase in aid to Africa, and doesn't even really blame colonialism for today's troubles, although many of the colonial powers behaved abominably. From the final chapter:
But for the most part, Africa has suffered grievously at the hands of its Big Men and its ruling elites. Their preoccupation, above all, has been to hold power for the purpose of self-enrichment... Much of the wealth they have acquired has been squandered on luxury living or stashed away in foreign bank accounts and foreign investments. The World Bank has estimated that 40 percent of Africa's private wealth is held offshore. The scramble for wealth has spawned a culture of corruption permeating every level of society.
Even when regimes have changed hands, new governments... have lost little time in adopting the habits of their predecessors... the British High Commissioner in Kenya said that the names of honest ministers and senior officials would fit on the back of a postage stamp.
After decades of mismanagement and corruption, most African states have become hollowed out. They are no longer instruments capable of serving the public good. Indeed, far from being able to provide aid and protection to their citizens, African governments and their vampire-like politicians who run them are regarded by the populations they rule as yet another burden they have to bear in the struggle for survival.
In my conclusion, I just felt sad that a continent with vast mineral and agricultural wealth is doing such a terrible job of serving its poorest citizens. The population of Africa is 880 million people, and hundreds of millions of innocent men, women and children are struggling to eke out the barest of lives among violence and rapacious governments. This isn't about aid or post-war politics or colonialism, it is about an utter failure of government to be part of the solution, instead of the problem.
Cross posted at Chicago Boyz
Friday, April 17, 2009
The masthead of this blog used to say that we "shill for no one" and it is true, no one that pays us, at least. But Dan and I are big fans of the magazine "Monocle". Monocle covers obscure topics - the first magazine covered the modern Japanese navy (which is why I picked up the initial issue on the spot and wrote about it here). The magazine has beautiful pictures from expert photographers and covers topics like the Falklands, Iceland, and other interesting spots around the globe. Fashion and art are also frequent and well-written topics.
I heard that Monocle was going to open stores so I stopped and took a photo as I walked past this shop in London. Unfortunately it was closed at the time but I wish them the best in their stand-alone stores. Dan bought me a subscription to Monocle for xmas which was much appreciated. I send the issues on to my nephew at college when I am done - even if he doesn't read them he will look cultured to whomever he brings back to his cinder-block dorm room.
Another favorite of the blog is the magazine Strategy and Tactics. This magazine covers military topics from the ancient world to WW2 to today. Every year when I renew my subscription I also buy one for Dan and now Gerry, as well (he might be wondering why that shows up in his mailbox every month). The magazine came from the era of physical (not PC) war games and they used to put a game in every issue - but now most of the magazine focuses on relevant articles.
I particularly like the "for your information" column where individuals write pithy articles of 2000 words or less on topics that I, at least, find fascinating. Here are some highlights from the latest issue:
- the statistic that 2008 was the first year that the US air force added more pilot less drones to the armory than manned aircraft
- an article about how the Israeli army used armored bulldozers to level enemy strong points in their wars in Gaza
- A very good article on Gerald Bull, the artillery genius who designed a long range 155mm cannon and worked on a gun large enough to launch satellites into orbit - he was assassinated (likely by the Mossad) as he worked on a project for Saddam
- an article about the survival of the battle cruiser Seydlitz, which barely escaped sinking after Jutland in 1916
It helps that I already know a lot about these topics, I guess (I added the part about Bull and the Mossad from my general knowledge - I think when he was shot he had tens of thousands of dollars on him that was untouched, which you'd figure an average assassin would have taken).
If you have some time I'd check out both of these interesting magazines. If anyone has shopped at the Monocle store, pop in a comment.
Cross posted at Chicago Boyz