Monday Morning Blues

Britain Revives Central Planning... for Electricity

This is the second of a series of posts on recent events in the world electricity & energy market. Here is Spain.

Britain's Energy Policy

Britain has a mostly de-regulated electricity market for generation. One item that must be considered with electricity is plain old geography; Britain is an island and must generate all their electricity locally. Thus they can have costs either significantly higher or lower than those found on mainland Europe, because it is difficult to use arbitrage (in the form of transmission) to resolve price imbalances.

Like most of Europe, Britain is in the thrall of the greens, and their favorite tool is to mandate a certain percentage of energy to come from "renewables" (wind and solar, for semi-practical purposes), while hounding coal on environmental grounds and nuclear on whatever grounds they tend to come up with at the time. Natural gas represents almost 50% of current energy today. This article from the Economist provides a good summary of the British market.

While Britain traditionally has gotten much of its natural gas from local drilling, LNG imports from overseas provide a higher percentage today. According to this article, LNG imports represent 25% of British usage, while locally drilled gas has fallen by 10% from the prior year. Britain traditionally has relied on the North Sea for its natural gas and oil production, but these fields are in long term decline.

In 2011, the UK initiated a surprise tax increase on North Sea oil and gas producers. The percentage of tax on profits increased from 68% to 80%, an increase of 12%, per this article. This sharp rise in taxation was a surprise under the supposedly Tory administration, because it is typical of more of a labor "carve up the pie" view of the world than one I would typically expect under the Tories that "incentives drive behavior".

This article discusses the impact of ever changing tax policies in the UK on investment in oil and gas rigs.

The hike prompted furious reaction from the industry. Mark Hanafin, director of Centrica Energy, told the Telegraph: "the North Sea is the second-largest oil-producing region in the world after Saudi Arabia. It's a national treasure for the UK. The government is utterly destroying that. I wish people would step up and say you just can't do this. Capital is leaving the country and going elsewhere".

Who could have predicted what would happen next? Oil and gas produced since the tax hike has dropped by the most since records have been kept, per this article:

UK natural gas production in the third quarter of 2011 slumped to the lowest level since records began in 1996, at 103TWh (terawatt hours), Department of Energy and Climate Change (DECC) data show. This also represented the largest year-on-year quarterly decrease ever seen, down 29.4pc on the same period last year.

Now that the British government has dis-incented investment and damaged their oil and gas industry through erratic and socialistic behavior, what's next? A central-planning, top down new "plan" for the electricity sector, of course.

As summarized in the Economist article (which failed to mention the negative impact of tax incentives on natural gas' decline, a serious oversight):

Renewable technologies account for a mere 7% of current supplies... government pledges to cut planet-heating (ed - their words) emissions and get 15% of energy from renewable sources by 2020... the industry regulator reckons that around $315 billion USD needs to be spent by 2020. Investment currently amounts to $6-9B USD / year. But the move to greener power in Britain must be achieved without infuriating voters already upset at high bills.

The government expects the private sector to finance the renewables (wind, solar and new nuclear) that they plan to have in place to meet the 15% target, while shutting down older nuclear plants and coal plants, as well. It is very difficult to entice the private sector to make these sorts of investments, however, unless they know in advance that they can recover the high and otherwise un-economical costs for these renewable power through the life of the facility (30 years or more). These costs, obviously, must in the end be borne by either residents or corporations (the business sector).

I would love to be a "fly on the wall" if you tried to convince any rational financial institution to invest in these sorts of projects, knowing that Spain just abandoned all their subsidies midway through (decimating their industry) and that the UK has a history of changing tax regimes with gas and oil extraction (see above).

Even the economist, which unfortunately is a cheerleader in this sort of central planning, sums it up dimly:

It is doubtful that the draft bill has enough detail to break the current hiatus in energy investments. It is still unclear how prices will be determined, how often they will be reviewed, and how contracts will be implemented. Uncertainty about the form of the contracts compounds existing investor fears about the durability of government price guarantees on energy.

While these government fantasies about supposedly rational private sector investors ploughing funds into un-economical renewables continues, a backup plan of sorts is occurring because they are extending the life of existing, older nuclear plants that they were planning to close. Keeping these plants alive defers the enormous (and likely significantly under-estimated) costs of building new nuclear plants, which are summarized here at wikipedia. From my perspective I would be willing to bet that none or perhaps 1-2 at best nuclear plants would ever be built going forward in the UK post the disaster in Japan; the greens are too strong and they will protest and drag the process out for an eternity. Other than one plant that came on line in the mid 1990's, all the plants are from the 1980's and 1970's and dreams of a nuclear renaissance in the UK ring just as hollow as they do in the US. Here is an article about re-licensing British reactors: Britain's ageing nuclear reactors, which were due to close in the next decade, are set to be kept open under a plan approved by the industry's regulator.

In a move that could have far-reaching implications for the government's energy policy, the Office for Nuclear Regulation has told the Guardian it is working with the country's dominant nuclear operator, the French-owned company EDF, to extend the life of its eight nuclear power stations in the UK, and that it is "content for the plants to continue to operate", as long as they pass regular safety tests.

Well there you go. Before the ink on the plans are dry, they've already backed down on one of the key tenets of their mad plan. I guess that is progress. But there is no way that their math can work as far as bringing new investment into the system since utilities and power generators won't 'add' to their investment in this climate at the level needed to mothball such critical elements of their power generating infrastructure.

It is quite sad to see that the UK, which had once been a leader in electricity de-regulation, with lower prices to show for it than most of their European counterparts, to propose to effectively nationalize or central plan out an entire industry. All this under a Tory government, too. It seems that cooler heads have prevailed by keeping the nuclear stations open longer, and the collapse of the renewables market in Europe will likewise be a precedent that the UK will not want to follow.

Cross posted at Chicago Boyz

Spain Renewables Market Collapses

There have been some major events in the world energy market lately. For the first update let's start with Spain.

Spain and Renewables:

Spain under-took a massive effort to embrace renewable energy technologies. Per Bloomberg:

The country generated 23 percent of its electricity from renewable sources in 2010... wind power in April covered 25 percent of electricity demand, a record that saved 270 million euros in fossil fuel imports. At one point on April 19, wind covered 61 percent of power demand.

How did Spain become a pioneer in wind and solar? Simple. Massive tax breaks for these sorts of installations.

In the 2000s, Spain copied the German clean-power aid model, as did nations from Portugal to Israel and Japan, increasing subsidies to a pinnacle in 2007. That’s when a law granted 444 euros ($556) a megawatt-hour for home rooftop solar panels feeding the power grid, compared with an average 39 euros paid to competing coal- or gas-fired power plants. By 2009, the consumer bill for clean-energy aid had risen to 6 billion euros a year, ahead of the 5.6 billion euros in Germany, whose economy is almost four times bigger, according to the Council of European Energy Regulators... Solar energy was the biggest drag on the system, accounting for almost half of the annual 6 billion euros of liabilities and producing just above 2 percent of the power

Let's do the math there again. Through state subsidies, the government was paying 444/39 = more than 11x the rate for solar panels. This understates the disparity because that 39 Euro per MWH on the other sides includes a much longer term investment horizon, while rooftop solar panels would have a correspondingly lower life span. To be fair, much of their renewable subsidies went to wind power, which while un-economic was less disastrously so than rooftop solar (with this level of subsidies). In addition to overpaying, the government was doing this on a massive scale, as noted above since the government largess was larger than Germany in absolute terms while their economy is much, much smaller.

The scale of over-building in these technologies was incredible. Per the article:

With peak electricity demand at less than half of capacity, the country doesn’t need more power plants, he said. Spain has a capacity of 99 gigawatts, and peak demand of 44 gigawatts.

This level of surplus power, (123%, or (99-44)/44)) is unprecedented. By contrast, in the United States in 2010, our surplus (summer) capacity is 19.2%, per the EIA document summarized here.

Recently Spain has undergone an austerity crisis and the government stopped subsidizing new energy installations. What happened? The industry immediately evaporated.

Saddled with a budget deficit more than twice the European Union limit and a ballooning gap between income and costs in its power system, Spain halted subsidies for new renewable-energy projects in January. The surprise move by Prime Minister Mariano Rajoy one month after taking office helped pierce investor confidence in stable aid for clean energy across Europe. “They destroyed the Spanish market overnight with the moratorium,” European Wind Energy Association Chief Executive Officer Christian Kjaer said in an interview. “The wider implication of this is that if Spanish politicians can do that, probably most European politicians can do that.”

In addition to halting the bleeding of government finances caused by the end to these massive subsidies for new installations, the "green jobs" immediately melted away.

The 75,466 renewable energy jobs that existed in Spain at the industry’s peak in 2008 shrank to 54,925 in 2010, according to the Renewable Energy Producers Association’s most recent data.

Likely this job loss will further accelerate since in 2010 there still were some subsidies available; now that the subsidies are completely gone, expect the industry to be virtually extinguished, as well.

It is important to note that this Spanish "investment" in renewable technologies often can't be leveraged by industrial producers because wind power is intermittent (and expensive) and much of the solar was implemented for individual households. By contrast, the US shale gas boom, tied with expansion of gas-fired plants making up a larger percentage of the total capacity base (and in particular the "base load" capacity base), has made America more competitive for industrial producers and led to economic growth (or a slowdown in relative decline) in energy-intensive industries. This document (by an industry source, but likely directionally correct) states the following:

The lower natural gas prices achieved with shale gas production will result in an average reduction of 10% in electricity costs nationwide over the forecast period. By 2017, lower prices will result in an initial impact of 2.9% higher industrial production. By 2035, industrial production will be 4.7% higher.

On a larger scale, Spanish "investment" in renewable energy didn't make the country more competitive from a manufacturing perspective nor did it reduce the cost of energy to the average homeowner. It created a class of economic parasites that evaporated as soon as the subsidies went away. The Spanish companies that thrived off the boom are now moving overseas to attempt to compete with local entities in other countries where subsidies still exist that could make renewables viable.

The Construction Bust

Alongside their "investment" in renewables at a massive scale, Spain also was part of a tremendous property boom. This property boom collapsed a couple of years ago and new construction was an over-sized part of the total economy. Per these official statistics (from the height of the boom):

The relative contribution made by the construction sector to the value added of the non-financial business economies of Cyprus (19.4 %), Poland (18.1 %) and Spain (17.6 %) was notably higher than for other Member States... In value-added terms, the least specialised Member States for construction were Germany (reflecting a rebound following the post reunification boom years), Slovakia and Hungary, the construction sector contributing between 4.7 % and 5.5 % of the value added of their respective non-financial business economies in 2007.

Note the contrast again between Spain and Germany; Spain's construction industry was 3 to 4 times larger as a percentage of the economy than Germany, and their subsidies for renewable energy were 4x larger on a per-capita basis when adjusted for the size of the economy as noted above. The Germans basically invested to make their economy more competitive, and the Spanish didn't (property and renewables don't help). It isn't that the Spanish didn't do anything, it is that what they did made little sense.

As the construction industry collapsed, unemployment soared.

Unemployment is more than 24 percent, the highest in the Euro zone, and for people under 25 it’s at a staggering 50 percent. Economists say the base figure could rise to 30 percent.

Countries where young people are unemployed at a 50% rate are a tinderbox ready to ignite, as deposed rulers in the Middle East can attest (perhaps to be replaced by new dictators, but still...) People often assume that revolutions "can't happen here" in a Westernized country but we are about to enter a dangerous phase if this level of youth unemployment goes on indefinitely.

It is important to realize the giant, lost opportunity that this mis-investment in renewable energy meant for Spain. Alongside the construction boom, Spain is now in a horrible box of low competitiveness and massive structural unemployment. And the young will suffer the most, unless they emigrate to other countries that chose to invest more wisely than in ephemeral "green jobs" and construction instead of industrial competitiveness.

Cross posted at Chicago Boyz

Unions and Illinois

Seeing a giant rat outside your business isn't exactly a red carpet for enterprises considering locating in the state of Illinois, especially while states right next door like Indiana are "right to work" states. Caterpillar is currently locked in a strike with their workers at a plant in Joliet.

Roughly 800 union members walked out of the Caterpillar Inc. plant in Joliet on May 1, rejecting a proposed six-year contract that would freeze their wages, double health care premiums and eliminate pensions and seniority rights.

Caterpillar has been battling unions in Illinois for decades. Caterpillar is very familiar with how to operate during a strike and they have retirees and trained engineers, replacement workers, and individuals who crossed the picket line to run the plant. Caterpillar claims that output hasn't been impacted by the strike. Caterpillar recently closed a Canada plant after workers refused to accept reduced pay and benefits and... moved those jobs to Indiana.

Employers are incredibly leery about adding jobs that might be unionized; while they are often leery of leaving behind assets and customers that are on the ground, new and incremental investment is another matter, entirely.

When you go to Michigan today you can see the beautiful homes and the world-class universities that were funded by the industrial powerhouse that used to be the auto industry. Today the growth in that industry all happens in the south, in non-union states. Someday those states too will have the long term wealth, since industry spawns an entire ecosystem that you can see running in reverse in the heavily unionized "blue" states.

Unions used to say that their members provided higher quality products than non-union workers; in Illinois the construction unions still tout these supposed advantages (not that there is evidence that construction quality is higher in Illinois than in the non-union south). Today, however, union arguments move more towards "fairness" and this is not a convincing argument - it might work with public employers that often shy away from a fight, but for companies like Caterpillar with global operations and global competitors they need to strike a hard bargain else their competitiveness will slip away to foreign competition.

Cross posted at Chicago Boyz

Cable and Roku

Disruptions often occur because businesses confuse their original mission with their current configuration. A great example is newspapers - while newspapers held the banner of "journalistic integrity", they made their fortunes on the fact that for decades they held a de-facto monopoly on advertisers in their home markets. If you wanted to reach the whole town, you had to put it in the local paper, and this was the engine for their growth and profits. As there started to be many more ways to reach the city (from local TV ads to the internet, etc...) and the monopoly eroded, the "tide went out" on their journalism model because no one was really paying for that, it was just a free ride atop the advertising. This was brought home to me when someone I know left working for a local newspaper in a midwestern city and started working for a non-profit; she noticed instantly how much more polite they were even when rejecting her requests for business; they truly hated the monopoly newspaper and their bile was due to that relationship. And of course the evidence for newspapers' abject decline is visible in the bankruptcy and stock prices of the remaining entities.

Cellular phone companies, too, are falling into this trap. Companies like Verizon provide a wireless network, and specialized companies like Motorola provided the phones. Between the network providers and the hardware providers, they thought that they owned the experience and would be able to capture large profits in the future. Today, other than when the situation is dire (AT&T), consumers are caring less and less about the particular phone network they use and the hardware, too, is going behind the scenes, as they care about the particular applications on their mobile devices. Apple and its brilliant iPhone took the profits from the network providers, who now are scrambling to hold customers and long-term contracts. And the iPhone itself over time will come under immense pressure on their long term profits as new entrants with similar functionality and access to applications can come in and bring commodity tools to the market efficiently. Originally the phone companies (AT&T, Sprint) and the hardware manufacturers (Motorola, Nokia, Blackberry) thought that they could control the network, user interface, and the content. While Apple is thriving against the new competition (for now) this entire "ecosystem" has not played out in the way it seemed a decade ago, and many of those that expected to capture above-average profits are now either commodity players (hardware) or struggling to keep up with capacity while not being able to leverage this spend into a long term guaranteed return (the cellular network providers). The value is going to those that can "monetize" the mobile advertising experience, which probably will be a group of software(Google) and social networking companies (Facebook).

Now we move onto cable. Cable existed as a foil to over-the-air television, an oligopoly like newspapers that bled its mission white until powerful intruders came and up-ended their business model. Cable started to buy content, and they built a parallel distribution network at huge cost to compete with what was available, for free, over the air. Cable today also is the primary mechanism for broadband internet service, which it links with its paid content (and a bit of phone), to charge large and growing fees.

This article at Bloomberg is titled "The Cable Industry Isn't Stupid, Right?"

The NPD Group put out a survey on Tuesday that suggested monthly pay-TV rates could reach $200 by 2020, up from the current average rate of $86. The analysts at NPD credit rising content-licensing fees and the average 6 percent rate increase that cable companies jam down users’ throats each year.

This is where the dis-aggregation of cable into 1) network provider (one amongst many) and 2) content provider becomes important.

I recently bought my parents a ROKU 2S box. The box is amazingly small, about the size of a mobile phone and a bit thicker. We plugged it in to an HDMI port on their TV and I connected it up to their wireless network (they have cable) and the software updated and the Roku box was working. In the picture below you can barely make out the small box to the right of the front channel speaker.

The Roku menu is very simple, as is the remote. There are a few channels pre-populated, and then you can pick other channels out of the list. The most popular are Amazon, Netflix, and Hulu, although there are many others (dozens or hundreds to choose from). Amazon was most interesting to me because I have "Amazon Prime", and with Amazon Prime I get free "Instant Videos" through devices like Roku or any other Blue Ray DVD player like my Sony (see here) that has internet access. There are a vast array of movies you'd actually want to watch through Amazon prime, and the streaming worked fine (their connection was about 2MB up or down in the TV Room). Streaming HD at that rate might be a bit choppy but we didn't notice it in the limited time I worked with it (at home I am able to stream 10MB through my Sony DVD player and it works great). You also can watch myriad TV series only available on cable, so my parents hopefully will like some of these. Today their TV is provided over the air and they like to watch network shows and also a lot of the BBC English TV which is provided over our local PBS channel (4 in fact, for Chicago). HBO GO is another fantastic channel, but I use Direct TV and HBO GO apparently hasn't struck a deal with Direct TV yet - when they do I will be sure to program that in for my parents, as well. From my perspective this isn't stealing because I am paying for HBO and Amazon Prime today and my parents are part of my family and each services allow a few devices on each service (not sure about HBO GO, but Amazon Prime allows 2 at a time).

The Roku box and interface is amazingly simple. The founder of Roku is Anthony Wood, who also invented the DVR (Tivo). In this article Mr. Wood discusses his goal:

Wood said the future of TV is in Internet streaming, and the Saratoga company makes simple, inexpensive devices that connect TV screens to a growing world of video - from Netflix movies to commentator Glenn Beck's show - that is stored out in the cloud.

The device is certainly simple and easy to use, and one of many, from game consoles (XBOX to DVD players to connecting a computer directly). Many new TV's have this functionality built in, as well. But Wood is aiming their product at people like my parents:

"Our customers are not early adopters," Wood said. "They're people who watch TV. We put a lot of effort into making it really simple."

One item that the Roku needs to include is a seamless interface between over the air HDTV and their channels, and integration of a channel guide with times for over the air TV. I don't know technically how this can be done but it would be great to have a single interface and remote for both types of television.

You can also play games on the Roku, if you have the 2S with the new controller. Here I am starting up Angry Birds, which looked great. They will have simpler type games like Angry Birds, those that a casual user can play, and the remote is WII-like in that the cursor follows the remote as you move your hand. There is a "free" version of Angry Birds and then you can buy extensions, just like you can on your iPad, once you complete the base version. I was thinking about buying Galaga too but didn't have enough time to play it yet.

If you are willing to pay a modest amount for Netflix or if you own Amazon Prime and have over the air TV (or someone who has HBO and isn't using their offline HBO account) you can get pretty much everything except live sports over a device like Roku / XBOX / DVD player / or you computer. Much live sports is available over the air, but there are some events that are only available on dedicated cable.

Cable will have to determine how to fight off these challengers. As cable raises prices, more people, whether strapped by the recession or disgusted with constant rate increases, will consider devices like the ROKU or some other way to get content cheaper. At this point the "bundling" of cable the network and cable the content provider will start to fray. As a network, this is a difficult business to make money as soon as challengers enter the market, given the massive capital needed to build out the network and the multiple years of income streams necessary to pay this off and earn a return for investors.

Content providers, too, are moving into the "cloud" such as You Tube! or just producing directly for the web, like GBTV or other types of artists. Since the costs of straight to the web are so much cheaper than dealing with networks, in the long term this type of service will become a much larger part of the overall ecosystem, in the same way that digital music usurped physical CD's.

There are new network providers, too. Condominiums are moving to microwave dishes and different connectivity methods than the traditional cable providers. The cable providers won't come to your building unless they can wire everyone up and push a triple-play package (cable, internet and phone) into every unit. There also are different fixed wireless options coming up for the future, and bandwidth is getting cheaper for major locations that are thoroughly "wired". The difficulty for the cable companies is that it is much cheaper and easier for them to saturate an existing market that they have wired than to wire up the world - they aren't the post office. Those saturated customers in the big city or heavily wired suburbs are the ones for which new solutions will be tailored; not the guys in the sticks that are a pain to get to for which there is little competition.

Those expecting ever rising prices for "bundled" cable services including the network component and the content component are likely going to be disappointed. There are many new entrants in this market on the horizon and a general disgust at the established options (at this price point). The future will be disruptive, and Roku is a small part of this equation.

Another element of this is that pulling the technology out of the TV makes it a "dumb box" like your computer monitor. Once you have standard HDMI ports, you can just upgrade your Roku or whatever is driving it and you only need to occasionally replace it when it fails or when a new TV is so compellingly cheap. The dis-aggregation of hardware and software (brains) will slow the growth of this industry, as well. How often do you replace your computer monitor? That will be the type of decision you will make, not buying a TV because of new features or upgrades.

Cross posted at Chicago Boyz

Monday Morning Blues

Meh, not today...

Hey Theo, How's It Working Out for you?

Unlike everyone else here at LITGM I do have a bit of a soft spot for the Cubs as well as being a big fan of the White Sox. I know that is strange but whatever.

When the goofy, nearly insane Ricketts family took over the Cubs, they failed to learn anything from history. They immediately proclaimed that it was "Year One" and that all the history of losing was finally over, because they took over from Tribune, I guess (I never really heard a rationale for their optimism). Soon the team went into an awful, abysmal slump, and I saw signs for tickets available on billboards in Chicago and had friends offering me decent tickets and games at face value as Wrigley Field emptied out in the heat and misery.

Anyone following sports even a little knows that Theo Epstein, the boy wonder who was a big part of eliminating the "curse" for the Boston Red Sox, is over at the Cubs as general manager, and seems smart enough that he has some sort of "plan" for turning the Flubs into winners. He did some obvious things, dumping or letting go some of the older and high priced players (even if he got little or nothing in return, it still made sense, just out of spite, to the average Cubs fan) although for some inexplicable reason Soriano is still with the team, and for a bit there the Cubs looked like they just might be on the far, far edge of respectable.

This Sun Times wrote an article when the Cubs losing streak reached nine along the same lines:

When new people come to the Cubs, it’s always the same: This time, it’s going to be different. This time, the club is going to turn into a winner. But you don’t whistle in the face of 103 years of futility. That kind of history has its own weight, and it tends to flatten anything in its path. We’re not talking about curses here. We’re talking about institutional badness. We’re talking about bad in bulk.

The Cubs losing streak now has reached 12. I saw a bit of the game at the health club and it seemed like they were absolutely getting blown out. Garza, their big free agent pitching acquisition a couple years' back, got shelled, and the lowly Pirates were up 10-0 at one point. While the flubs scored 4 runs in the 9th, you have to figure it was against the absolutely worst relief pitcher of the Pirates, which means you are mathematically likely talking about one of the worst pitchers in all of baseball. Yes, the Pirates are almost at .500, but you can't even count the games against the Cubs since they are free wins nowadays.

And while the Cubs are getting crushed and the Wrigley faithful are starting to leave earlier and earlier, if they attend at all, Theo is out thinking about the baseball draft, rather than suffer with the fans and watch this terrible baseball in person. The fans would probably prefer that he watch it with his eyes held open like they did in a Clockwork Orange, so he could finally embrace the utter futility that is the Cubs. From this article in the Chicago Tribune:

As the Cubs inched closer to tying the franchise record for consecutive losses, the architects of the team were back home focusing on next week's amateur draft. President Theo Epstein and general manager Jed Hoyer haven't traveled with the team on the road trip, leaving assistant to the GM Shiraz Rehman and assistant GM Randy Bush to watch Cubs history unfold.

The problem is, the baseball draft isn't like football. There are no Andrew Luck's or Cam Newton's that are going to join your team next year and turn things around - the baseball draft is part of a multi-year process of building up a farm system and then hopefully retaining the right talent when it hits the majors. And the fans really can't wait that long - last year I pretty much gave up on the Sox because they insisted on playing Dunn while he was having possibly the WORST SEASON IN THE HISTORY OF THE MLB. He was KILLING the team. The Sox may have paid too much for him and had to play him and hope that Dunn turned it around, but I couldn't stand to be part of watching it. And last years' Sox were like the '27 Yankees compared to how bad this years' Cubs are looking right now in the midst of this losting streak, which could challenge their worst losing streak EVER.

Theo - you don't have the time you think you have. Those nutso Ricketts can't just have 3 people and seagulls at the ballpark, especially when Cubs tickets are sky-high in price and amenities aren't cheap, either. You are going to have to try to start making moves this year, or get a bodyguard when you head to the bars in Wrigleyville. You'll need it.

Saturday Night Sixties

It’s Saturday night again. Time to relax. Let’s set the wayback machine for the 60’s, my favorite decade.

Wal-Mart Comes to Chicago

For many years Wal-Mart has been effectively frozen out of Chicago because of pro-union protests. Recently, however, opposition must have softened because now there are some Wal-Marts or "Express" versions located in the city core. This store just opened in River North and I must admit I was very excited to see it arrive.

The store has groceries and household goods. It is very compact and, per expectation, all the prices seem very reasonable. They have private-label brands that are significantly cheaper even than the already reduced prices on "name" brands. I tried a new laundry detergent because it was about 1/2 the price of what I usually pay, what the heck. Their check out lines were well-manned in addition to a large number of self-checkout kiosks - often in Chiago there is a fiasco as you try to leave the store with one hapless employee trying to mediate between 10 failed self-checkouts going simultaneously.

You can also order goods online and they will be shipped to the store at no charge to you - you just get an email when they arrive. I am plotting at what to order online - for me in the city, if I can't walk to it, it is an immense pain to drive - so this is a big luxury.

Garbage - Blood for Poppies

We have had fun here with the new "Famous People Gerry Has Met" category, getting a look at the interesting life Gerry has lived and the people he has met. I made a joke that I can probably count the famous people I have met on one hand, and of those famous people I have met, most aren't that famous to anyone outside of the fighting community. Did I mention that when I was little I met Colonel Sanders?

Anyway, driving to work this morning I was reminded of another relatively famous person I have met. She is the lead singer of the band Garbage, Shirley Manson. And I love her. I was listening to XM Alt Nation and the new Garbage song came on, called Blood for Poppies:
Not my favorite Garbage song, but it is growing on me. Sort of a pop tune but I like it.

My wife and I were invited to a party by our next door neighbor at the time, who was a fitness instructor. We went to the party (this was at the height of Garbage's popularity, I would say 13 or 14 years ago) and we ran into our neighbor. I said hi to her and mentioned that the beautiful woman over there looked a lot like Shirley Manson.

For those who don't know, Garbage is (or at least was) based in Madison.

The fitness instructor said that yes indeed it was Manson and that she was one of her students in her fitness classes. Manson was sitting on a couch watching a hockey game of all things with a couple random dudes.

 I sauntered over there and eventually found an opening and introduced myself. She was drop dead gorgeous and melted me with that Scotch accent of hers.

I wish to god I had a photo of that meeting but alas, no dice.

As a much less interesting side note, I have also met Butch Vig, the brains behind Garbage, and famous band producer.  I am pretty sure he still lives in Madison as I have talked to him several times in bars around here.  Of course I just want to be his friend so I can meet Manson again, but so it goes.

Excitement In Valpo

As I drove into town this morning the intersection of Vale Park Rd. Roosevelt Rd. and Calumet were blocked off by a fire engine AND police. Looked like a fender bender.

So I took a shortcut through a mini-all to see SWAT teams and police with AR-15’s and street sweeper shotguns getting positioned to fire on the building.

One cop looked at me and screamed, ‘get out of here…NOW!” So I went home to grab the camera.

Lemme see, Indiana State Police, check. Porter county Sheriff, check. Local Valpo cops, check. Choppers in the air, check. It's a big deal.

Some in the crowd claimed it was a hostage situation in the real estate office and shots had been fired.

This kind of crap rarely happens out here in Mayberry. More to come?


UPDATE

After releasing all hostages the gunman shot himself in the head. Twice.

Gulag Plants

Dan and I have the habit of sending boxes of books back and forth after reading them, and I recently received a large contingent of books which was much appreciated. We both are trying to stay away from military history reading to the extent we can because we've read so much of it over the years. In this instance I take the book "Gulag" which is an excellent history of that horrible system of jails and concentration camps that were used to repress the Russia people (and their satellites), and utilize its otherwise completely depressing contents to support our direct lighting system for tomato plants.

A positive use for this important but incredibly depressing book. On the other side I should balance it out with the Black Book of Communism.

Cross posted at Chicago Boyz

Hey Big Spender

For the Super Bowl last year Dan and I visited Reno and had a great time. Rather than deal with expensive, crowded Las Vegas, where we are definitely "low rollers", we went to Reno, where the very act of gambling craps at the $5 table made you a "high roller". The staff were very glad that we were here and, surprisingly enough, the food was EXCELLENT. Dan and I thought that the Chinese food we had at the Peppermill Hotel was among the best Chinese food we'd ever had, for instance.

I gave them my email address and, as Dan predicted, I get a bunch of what is normally considered junk mail and junk email. However, I am quite amused at this offer - you can stay at the Peppermill Hotel (remember, this is a nice place, with the best sports book in Reno) for NINETEEN DOLLARS a night. They also have an excellent health club. If you work out the price / month that I spend at my fancy health club here in Chicago and divide it by the number of times a month I go to the gym, it probably works out to about $19 / visit, so essentially if I go to the health club while at Reno (Dan and I went every day) I am breaking even and you throw in the room for free.

Facebook Hippies

What is wrong with today's hippies anyway?

The NATO protesters in Chicago last weekend were nothing more than cowardly, pathetic posers.

Back in my 60's day the hippie protesters at least put up a drug-and-alcohol-induced fight and were unafraid to throw a few punches before being arrested. Off the pigs, remember? Now those were the days.

These days while protesting, the modern hippie is most likely way too busy texting and playing with his costly digital device. It’s not easy giving the finger to the cops when it’s busy tweeting. He owns an expensive 2-year data plan. He exfoliates his skin at the hotel spa before eating a hearty vegan breakfast of free-range daffodils with his $4. Starbucks coffee for that pre-protest caffeine buzz.

Another observation I had is just what were these losers protesting? War? Peace? Poverty? Wealth? All of the above? What? Being so fragmented was a sure sign there was no real organization to this sad demonstration in futility.

After all, what democrat party operative or labor union goon wants any credit for organizing this embarrassment? Democrat party officials want to claim success for holding this glorious global summit while the Teamsters were busy making their time-and-a-half setting up McCormick place exhibits and the SEIU members were busy bussing tables and changing hotel linen for their time-and-a-half pay.

I spent Friday and Monday in the city, working and making some money. There was a minor inconvenience on Monday since I drove in (an extra ½ hour to the trip), not wanting to be stranded downtown by a public transportation service disruption due to an overzealous TSA security force on the way home.

The NATO protest in Chicago was a pathetic bust.

Today's hippies seem to be mostly young, wealthy, pampered suburban twits with an ideological affection for socialism, thinking it will cure all inequities and restore social justice. This NATO bunch were the garden variety white college kids that has plenty of money to spend and no purpose in life thanks to public education and their witless Gen-X parents. They’re all the product of that big liberal government entitlement mentality.

Not all of the protesters were young. Some hippies never go away, they just become more brain addled as time goes on. This one appears to be a detached aging boomer loner with a few screws loose longing for any excuse to look like a fool in public. Must have been all that acid he ingested way back when.

The Chicago cops had their way with these NATO protest since they outnumbered the kooks by at least 3-1 and looked very intimidating. They kept the kooks well contained. All that overtime pay had to be additional motivation for Chicago’s finest. That talk about how professionally the Chicago and Illinois State police handled this massive pathetic protest was good local political P.R. but far from the truth.

The media did their part in frightening regular citizens into staying home, all for nothing far as I could see.

Hippies lose. America wins. Again.

Serving for One

At the highly recommended Hub 51 restaurant in Chicago (51 W Hubbard Street, get it) they have very good food (I took Dan there) and great beer on tap (including Scrimshaw Pilsner in a pitcher for $17). However - this is dinner for one person, a nachos entree. It is immense. No wonder we are all going to die...