Wednesday, May 31, 2006

Life In The Great Midwest Fashion Tips


When lounging at the local pool, be sure to wear swimwear that projects a sense of confidence and style.

Tuesday, May 30, 2006

The Capper for a Bad Month

Tailgating during football season is one of my hobbies, so to say. I love the gameday atmosphere, the smell of smoke combined with the fresh, crisp autumn air and avoiding puddles of urine (or whatever) on that hike from our tailgating spot to Soldier Field. When at Wisconsin football games, the bar scene is unmatched along with many parking lots full of tailgaters - I always run into at least one person I know along the way. Usually many.

Last year was a great one for the Bears.

For those not in the know, the parking system at Soldier Field is, like anything else in Chicago that has to do with traffic, a joke. Every season ticket holder enters a raffle. You have to pay $10 to be in the raffle. If you are lucky, you get the parking pass for the South Lot. Then you get to pay $35 per game to park there. If you don't leave your seat before the middle of the fourth quarter, you have just guaranteed yourself an extra two to three hours of partying in the lot, as the entry and exit of the South Lot is a total and complete mess. They have two, count them, two lanes for entry of the lot and a total of two, count them again, two lanes exiting the lot. Add to this that the lanes are entering and exiting onto the perpetually busy Lake Shore Drive and you can see that you are going nowhere fast.

The parking passes are mailed after payment at the beginning of the year. When we go to the game, I always insist on arriving at the lot at 8AM for a noon start - otherwise you waste so much valuable tailgating time sitting there trying to get into the lot. Calamity was added for the playoff game. You don't pay for playoff parking when you receive your passes - the playoff parking is paid with cash at the gate of the lot. The calamity this process adds is indescribable. We arrived for the Bear playoff game this year four hours ahead of time as usual and still sat for about 30 minutes as the results of parking attendants trying to make change are very predictable. Tempers were flaring among the attendants as they struggled with the new system and the cars were absolutely locked in place from the delays in the cash booths. The way the lanes and the complete process was set up could literally have not been worse - and I knew it was going to be that way before I left my house up here in Madison. I am not sure if that is funny or sad. Lake Shore Drive was plugging up in the worst way. Total disaster. We did get in about 3.5 hours before game time. (un)Fortunately the Bears got their asses handed to them and we exited about halfway through the fourth quarter and sped away.

It was precisely this situation that led me to lose one of my most beloved tailgating toys, my flagpole - my kickass Sunsetter Telescoping Flagpole. The flagpole marks your car for easy location later on if need be. This used to be a bigger deal when we actually used to walk across the parking lot and use the portapotties. They have one portapotty for, I would estimate, every thousand persons. The results in these lines are very predictable. Those tailgating with me have since learned a new system for the relief of gameday beers which I will not discuss here. Lets just say it is very effective and doesn't cost you an hour in a portapotty line. But the flagpole also makes a statement - I always put up the First Navy Jack atop, with a Bears flag underneath. Quite a nice display.

During one game this year, the Bears were killing another team and Carl and I decided to leave mid-fourth quarter, to escape the South Lot. In our haste (I add here that neither of us were intoxicated at this particular game) we lowered the flags from the flagpole, got in the car and sped away, leaving my poor flagpole as a very expensive souvenir for some other lucky soul. Yep, we just left it there, standing amid all of the trash, empty beer bottles, smoking grills and chicken bones. This caused much distress among the tailgating faithful, and offers were made to replace it immediately, but there were only a few games left and we may not even get a pass for next year.

My second favorite tailgating toy is my Coleman Roadtrip grill. I was one of the first to have one of these at the Bear tailgates and it was a huge hit. It is propane powered (don't start the charcoal vs. gas thing here please) and takes about 10 seconds to set up and fire up. I usually bring food that only needs to be warmed or heated, rather than fully cooked as it is fairly small and at a tailgate I would rather relax than tend a grill where food is constantly flaring up, burning and causing a general mess.

Don't worry, I really am going somewhere with this post.

My grill at home was a Ducane natural gas model. It worked very well. For new years one time I got some nice steaks and shrimp and surprised my wife by saying after the kids are in bed, we could have some champagne and good food and celebrate New Years in style. She was thrilled. I went outside and fired up the grill to warm it up and it - smelled. Bad. Mouse shit. Apparently some mice had made the grill their winter home. There was a bigtime mouse firedrill on my deck. Needless to say, the sauteed versions of steak and shrimp were not as good as grilled, but they did the job. Quite a few laughs are still had about that. So I got replacement parts for the inside, gave the old girl quite a thorough cleaning and I was back in business on the deck. Then it happened AGAIN. This time chipmunks! OK, time for this grill to go. I shitcanned it and put a nice model on order from Home Depot. But it is now Memorial Day weekend and I don't have a grill. This is unacceptable. But wait...

The Coleman Roadtrip sits waiting for this day in my garage! I wheeled it onto the deck and had it set up in the customary 10 seconds and I was very happy. We had a great dinner of corn on the cob, burgers and sausages. Then as we were discussing how happy we were to finally have a nice grilled dinner we heard a "thunk". Hmmm...must have been a bird crashing into the window.

It is customary for me after taking the food off of the grill to turn up the burners all the way to burn off any excess grease or whatever is left on it so the grill doesn't have combined tastes next time. I did the same thing with the Roadtrip as I had cooked a lot of food on it, enough for lunch the next day. Remember that thunk? The grill had gotten so hot that the plastic on the handle had melted and that thunk was actually the handle hitting my deck after falling off.

But that wasn't the half of it. After I swore and turned the grill off I did some other things. Then I went back to inspect the grill after it had cooled down. Here is what I found:


@#$%^&*%$!!!!!!!!!!!!!!!!!






























So now I am in the market for a new tailgating grill and flagpole. Neither of which will get purchased if I don't get a parking pass for the Bears games this year. I do believe that the first Bears regular season tailgate next year will be in memoriam of my two favorite tailgate toys, both casualties in the last few months. I HAVE to have a better month this month than last. Or I may just lose my mind.

Monday, May 29, 2006

Memorial Day and Deconstruction

This post is about Memorial Day… even though it doesn’t sound like it from the top line… bear with me

When I was first starting out in school and becoming aware of potential careers I was inclined to become a writer.  I really enjoyed reading… when I would go to the library as a little kid I would take home a stack of books and the librarians scoffed because they assumed I was just looking at the pictures but really I read most of them cover to cover.

In high school I took various English and literature courses and the teachers, by and large, were excellent.  We would read the various texts, always fiction, most of which were generally depressing (“Moby Dick”, “Romeo and Juliet”, “Catcher in the Rye”, “To Kill a Mockingbird”, “All the King’s Men”, etc…) and then start to analyze the content of the text.

There were different types of analysis.  For example, I was very interested in the historical context in which books like “Romeo and Juliet” or “Julius Caesar” or “The Illiad” were written – what technology was being employed, which groups had historical or political grievances against the others, etc… because these really helped me both to understand the text and to learn more about history in the grand scheme.

I was completely un-interested in the subtle and non-fact based quest for meaning within the analysis that became more and more prevalent as I went up the chain of English through high school and into college.  The facts (for fiction, the narrative events and what happened to the characters and how they grew as a result of the experience) of the text became less relevant and the “symbolism” was the key element of the analysis.  In my mind, this is primarily due to the intellectual idea of “Deconstruction” that has taken over the social sciences in the university today (or at least ran the whole place while I was there).  From wikipedia:

“The term deconstruction was coined by French philosopher Jacques Derrida in the 1960s and is used in contemporary humanities and social sciences to denote a philosophy of meaning that deals with the ways that meaning is constructed and understood by writers, texts, and readers. One way of understanding the term is that it involves discovering, recognizing, and understanding the underlying — and unspoken and implicit — assumptions, ideas, and frameworks that form the basis for thought and belief. It has various shades of meaning in different areas of study and discussion, and is, by its very nature, difficult to define without depending on "un-deconstructed" concepts.”

By moving away from facts and to meanings, meanings that could essentially be anything to anybody, academia unmoored itself from reality and created a “virtual world” that was impenetrable to the un-initiated.  Don’t believe me?  Go and pick up any advanced humanities text and try to make sense of it.  Concepts that began as simply as the storyline to Mark Twain’s “The Adventures of Huckleberry Finn” devolve into point of view and symbolism nonsense that, frankly, isn’t even worth the thought it would take to pull the mess apart and understand it.  In one of the most famous pranks of academia, a physics student (now professor) submitted a wholly bogus article to a prominent humanities magazine combining various deconstruction concepts, references to prominent social theorists, and it was approved and published even though the entire article was clearly a parody and a sham.  In summary, even the supposed “experts” on the topic couldn’t even distinguish supposed fact from sheer nonsense.  Here is a great link to a summary of the issue and articles on the topic… also note that on the wikipedia page for the deconstruction topic there is a reference that the page is being re-written and there is a big debate about whether or not to include Sokal in the topic at all.

Let’s summarize my opinion of what happened:

  • Left wing intellectuals take over a topic and its underlying philosophy

  • Concrete, straightforward analysis grounded on facts and understandable concepts is replaced by a thicket of senseless terms, definitions, concepts and references that are unintelligible to anyone but the initiated

  • This smug alternate universe employs the left (on your tax dollars) and within this sphere they can opine down on the masses who can’t really respond effectively (because no one can grasp what they are talking about) but it sounds right and people are too impolite to point out that entire concepts and approaches are nonsense

  • The Sokal grenade pointed out for everyone that can’t be bothered to take them on in their own domain that, in fact, it is all bullsh1t… verifying that was everyone thought was true, was true

Let’s move on to a topic that is, in actuality, very closely linked to academic left wing elitism and theories that sound like they may have grounding in fact but are in reality, not true.

The forces against our effort in Iraq (it pains me to call them anti-war… because they are really anti-democracy and anti-freedom, but that is grist for another post) discuss patriotism and dissent.  Once again, from Wikipedia:

A peace movement is a social movement that seeks to achieve ideals such as the ending of a particular war (or all wars), minimize inter-human violence in a particular place or type of situation, often linked to the goal of achieving world peace. Means to achieve these ends usually include advocacy of pacifism, non-violent resistance, diplomacy, boycotts, moral purchasing and demonstrations.

If you scratch a leftist and an academic they will cite that “dissent is patriotism” and the “anti war movement is patriotic”.  In their world of words disconnected from meaning and where their interpretation of the facts based on their feelings or impressions, spiced up with impenetrable academic dogma, this is accepted as a fact.

BUT IT ISN’T TRUE.

The left wing is setting up a world where wars would meet an impossible standard, and that it is “patriotic” to fight everything the US stands for all the time and contributing nothing in return but resistance, boycotts, and demonstrations (from above).

From what I have been able to take out of their garbled logic, the primary dissent against the War in Iraq is as follows:

  • War is always wrong and diplomacy is always preferable, and war represents a failure of diplomacy

  • Iraq didn’t represent a threat to the US

  • Iraq didn’t meet the criteria for a popular war, a war we could all rally around with complete moral clarity in purpose to bring the whole country together

  • There have been failures in the way that the war was conducted

  • There have been failures in the way we treated prisoners and civilians

Let’s compare their criteria for military action against actual, recent US history.

For WW1, the US presence in that war unmistakably saved the tide for the Allies, being the French and British (the Russians were knocked out by 1917).  While there are many, many messy aspects of warfare at this time, including the fact that the British and French were running overseas empires that wouldn’t meet the moral standards of today, IN GENERAL without US intervention the Germans would probably have taken over the French and driven the British off of European soil and set back liberal democracy as we understand it today (which the British practiced, and the French too) into the grave, with the US and a denuded Britain being the last holdouts.

By all the criteria above WW1 would never have been fought.  The Germans were NOT an imminent threat to the US, because they couldn’t reach our soil without crossing the ocean.  Certainly, there were many, many, many failures in WW1, including the fact that our soldiers were being sent there un-equipped (basically) and they had to use French military kit, and the blunders of WW1 generals are so legion that it is pointless to cover them here.  If you don’t believe that the US contribution was significant, read this book by Mosier.

Let’s move on to WW2.  Don’t forget that WW2 was essentially three wars:

  1. A war with the Japanese

  2. A war with the Italians

  3. A war with the Germans

The war with the Japanese was pretty straight-forward.  By attacking us in Pearl Harbor, unprovoked, even the most left-wing dissenter and all of their garbled syntax couldn’t overcome the repulsion and rage that the Japanese incited.  Their subsequent insane barbarity to our troops and prisoners only fed the fire.

The war with the Italians was far more subtle.  The Italians were in alliance with the Germans, especially in North Africa, under Rommel.  The Italians committed atrocities in Africa, notably their use of poison gas and aircraft in Ethiopia.  On the other hand, there was an enormous Italian population in the US and while it was easy to hate Mussolini, he wasn’t representative of the Italian people.

As far as the Germans, since the left doesn’t recognize suffering of subjugated peoples to be a problem (no problem watching the Kurds suffer in Iraq) and the facts of the holocaust were not widely known, it certainly wasn’t a slam dunk to declare war on Hitler, although it was 100% the right thing to do in hindsight.  Was Germany an immediate threat to the US?  No, but they were getting close.  Einstein wrote about their development of an atom bomb to Roosevelt and their rocketry was extremely advanced by the time the war ended, and they were far ahead of the US in nerve gas and some chemical weapons.

As far as blunders during the war by the US, they were legion.  Critical ones would be letting our air force get caught on the ground in the Philippines after Pearl Harbor had been attacked, our completely inadequate armor and high silhouette of US tanks, and our lousy anti armor weapons for our infantry.  

The overall point of this is that you can’t have a war without mistakes, many of which will cost the lives of our soldiers and civilians.  However, I would argue that in fact we are getting better with each war, on both fronts, 1) the fighting of the war itself 2) mitigating the impact of the war on civilians.

If you look at Hanoi after the Vietnam war or Baghdad today vs. the completely flattened state of Tokyo or Berlin after WW2, you can see that we are taking pains to not kill innocent civilians.  As far as fighting the war itself, our performance in both wars in Iraq and Afghanistan has been exemplary, up there in the annals of warfare for quickly disabling and destroying an enemy force with few losses on our side.

HOWEVER, there is no war without mistakes, even “thousands” of mistakes.  Any occupation becomes essentially a civil war, which is an extremely difficult type of war to fight given the morals of today.  When your enemy is suicide bombers and they intentionally strike targets that are full of civilians and of religious significant to their enemies, you are meeting as ruthless an enemy as we have seen in decades.  This is not how the US fights, and we are trying to conduct a war with a minimum of losses to the innocent, while our enemy is doing their best to kill as many innocents as possible.

IN THE END, the US is the only country that is willing to fight for democracy and freedom and lead this fight EVEN WHEN THEIR INTERESTS ARE NOT DIRECTLY IMPACTED.  Britain must be given much credit but in WW1 and WW2 they were directly menaced by Hitler and fighting for their very survival.  The US, protected by an ocean, could have survived for decades against these enemies, even as democracy failed and the blackness of subjugation of fascism (and later, communism) fell across Europe, Asia and most of the world.

If left wing dissent means that the US is wrong for doing this, then I believe they are wrong.  The totality of democracies across the world DOES make the US safer, because democracies are far less likely to breed military dictators and madmen that ultimately WILL menace the US.  Our interests are larger than the immediacy of our threats, because if we don’t do our best to encourage a better world, it will ultimately wash up on our shores.

Listening to them now would be about as effective as listening to Joe Kennedy prior to WW2, when he was a Nazi sympathizer, or listening to the New York Times whitewash of the Communists’ crimes in the Ukraine.  They were wrong then, and they are wrong today.

War is hell, war is terrible, and it would be best if somehow we could solve the world’s problems without war.  But war is the only weapon, albeit a blunt and very imperfect weapon, for cracking open some situations that otherwise could rot indefinitely.

Don’t believe the convoluted rationales of the left, any more than deconstruction was shown to be a web of nonsense by Sokal.


Sunday, May 28, 2006

It's Tiki Time!

Posted by Picasa For some reason I have had a long affinity for tiki stuff. My rationale is... who is not having a good time at a tiki bar? No one!

I have been talking about getting a tiki bar for a while but given the space of my little balcony it isn't too practical (not to mention the high winds up here... I wonder if my grill is going to blow away some time, much less something ostensibly made of bamboo and fronds.)

A friend of mine had a birthday and we'd been joking back and forth on the tiki bar issue for a while and I decided to "pull the trigger". I bought it from Ace (see post below for story) and we brought it over in a car and another good friend and frequent reader of the blog got out his old van and helped us assemble and transport the tiki bar.

We set it up on his back porch (he has a house with an actual yard) and it fits great! In this post we are breaking it in you can see the blender ready to go, the glass with required umbrella and fronds on the top. Looking at the picture you can see the tag on it with the "limited warranty" - I don't know what the tiki warranty would be - replacement fronds?

Tiki Lifestylin'

Posted by Picasa Here is the tiki picture that pushed me over the edge and into the tiki lifestyle. This was on the cover of Ace hardware, no less.

I don't think that the ad helped Ace Hardware much because the location I bought it from was happy to get it off their hands... I got a discount for buying an already assembled display model which saved us a long time with an allen wrench, because this isn't made of bamboo strung together, after all.

Saturday, May 27, 2006

Tucker Max Wins - And So Do I

As I have grown older I have been taking a much greater interest in law. I don't have time for law school - or much spare time at all. To quench my thirst for more knowledge in this field I have been reading opinions of the Supreme Court, District Courts and others. On the sidebar you see a link for Overlawyered, a blog that concentrates all of its time to frivolous or notable lawsuits. It is written in a way that most people can understand, but I have to admit I still have to have a window open in my computer at a legal dictionary to comprehend a term that they use once in a while.

Yesterday a very important decision was handed down in a case that involves blogs.

Tucker Max is a self described asshole. Before I give you the link to his (wildly successful) site, a fair warning - there is a lot (A LOT) of gutter humor and off color language on the site. Fair waning, here it is. I used to link it on my sidebar, but the content is just so off color I didn't want kids or others that could be offended to come here, go there, then send me hate mail. On top of that, I feel that I want to remain at least a little above that sort of thing. I will have you know that Tucker Max is making a boatload of money off of his site and books. This guy has SERIOUS traffic and isn't linked by ANYBODY in the blogosphere. Content sells. Anyway.

Max was getting sued and the lawsuit got dismissed. You can read about it here. The person who was suing Max threw a party that Max attended. Max and the folks at his message board on his site savaged the man since the party was, apparently, a dud. The person who threw the party then sued Max over comments made on his site, also suing the ISP and others in the chain. As a blogger and blog proprietor I have been following this case with a lot of interest, and my growing interest in law has made it all the more interesting to follow. The judge in federal court threw it out, and the opinion is one of the funniest legal documents I have ever read. You can check it out here.

If this opinion had turned out the other way I would have had to seriously think about shutting down the comments section, something I really do not want to do. Most of the comments here are funny or add something to the discourse. As the person who runs this blog I have to delete comments at times, but not very often. I am not the type that takes kindly to people "peeing in my wheaties" so to say so I aggressively track nasty commenters to their originating systems and have been known to call places of business with exact URL's to offer those persons a little surprise at their cubicles from which they dispel their venom. If this blog ever gets to a point where I can't do this, however, I am basically at the mercy of the commenters. If someone would defame or belittle another I may be held liable - until that lawsuit was smacked down yesterday that was all up in the air. Now I can rest a little more comfortably now, seeing that the suit didn't even go to trial - not only that, the plantiff and his lawyer were totally smacked down by the judge.

So...comment away!

Friday, May 26, 2006

Something I Know Nothing About

What follows is one of those subjects that I know just enough about to get myself in trouble. The subject is the compensation of CEO's of large companies.

I am a business owner - and my pay is directly influenced by decisions I make every single day of my life, over and over and over. I set the margins, decide which customers are worth chasing or cutting, fix the level of employee wages, decide which vendors to do business with (or not), purchase goods and capital, and, at times, do collections. Oh, yes, I take turns with the other employees cleaning the johns too. I am not too proud. Pride is one of the most dangerous things I think you can have too much of, but that is grist for another post, on another day.

We see fairly often articles bemoaning how much corporate CEO's make. Usually they are Fortune 500 companies and the compensation packages that include all sorts of stuff like stock options and other things amount to tens (or hundreds) of millions of dollars a year. The Becker-Posner blog had a very interesting post and comment section today that discusses this.

I have always wondered how much worse I could do than a person like Carly Fiorina or, better yet, Michael Eisner. These are two people that pop into my head instantly as being overpaid in the most obnoxious sense as relates to the value of the company, or, more importantly, the shareholders. I used to have HP shares until Fiorina worked her magic, then I dumped it. I picked up Disney soon after they tanked a few years ago and still hold those shares today.

The point I am trying to make is that I could sit in an office somewhere for days on end and make stupid decisions and collect the money just as good as Eisner or Fiorina. On the other hand, I am talking about something I really know nothing about. I don't know how much pressure they were under by the board of directors of these corporations to make certain decisions or if they actually researched things before doing them. It is hard to believe that before buying Compaq that Fiorina actually talked to industry people beforehand. Then again, I just don't know.

I simply cannot grasp how Eisner brought over a quarter of a billion dollars a year worth of value to the company when he was at Disney. I mean, how much work can one man do?

Being the owner of shares of many of the Russell 5000 and Fortune 500 it has become more and more important to me to research the CEO's of these companies and find out just how many stock options they are receiving. Each option they receive dilutes my value. Especially on the day they decide to sell. So my question remains, how to quantify what CEO's are good and which are bad? And how much are they really worth?

I would submit that the level of management BELOW the board of directors is where the real value of a publicly held corporation comes in. I would imagine that the board is comprised of CEO's of OTHER CORPORATIONS and it would not be in their best interests to start pushing other CEO's to perform better or take fewer options.

Another good point was made in the original post over on Becker-Posner. It isn't like the head of a giant corporation can make spot decisions like I can do at my very small company. And it isn't like the CEO can control world events either. Then again, if the CEO at Exxon decides to take a gamble and explore for oil in a place that was possibly very risky and it turns out to be a big money maker for the company, dosn't that make the CEO's talents much more profitable than possibly $250 million per year? If the gamble pays off and Exxon's stock soars $10 per share per year, does it matter to the average Joe shareholder, like myself, if the CEO is getting a boatload of options? I suppose it really doesn't, but to larger brokerages that make very large investments in these companies it would make a very big difference. All very interesting to me.

Of course, I don't live in that world. I live in a world that rewards me or punishes me for each and every single thing that I do, for better or worse. I would be interested in any comments readers may have on the value of CEO's if they have seen them in action at some large companies.

This Weekend...

Inbetween the brats, burgers and beer...remember what Memorial Day is all about...
Photo credit here.

Wednesday, May 24, 2006

Where's Waldo

For our loyal or occasional readers I am going to start with a question I'll answer at the bottom of the post - What is the Only major US City that is not near a body of water or river?

Chicago, on the other hand, is blessed with a great location right in the center of the country. We also have the Chicago river, flowing right through town (as shown here) and Lake Michigan (where the Chicago river DOESN'T flow to, since it was re-directed so that all the waste goes downstate instead of fouling the water supply).

How many modes of transportation can you see in the above picture? Let me count the ways:

1) you can see the water taxi coming towards the camera. The water taxi starts by the train station and goes over to Michigan avenue. It is a lot of fun if you are visiting the town for the day. Just close your eyes if you see Dave Matthews' tour bus parked on a bridge above you
2) the METRA train, which runs on commuter tracks, runs alongside the river. The METRA lines go North, South and West out of the city on multiple lines. For a newcomer to the city, I highly recommend that you consider the METRA when you move because if you can take the train you can save a lot in parking and general sanity and the trains are generally clean and on time
3) you can see the bridge going over the river. The "L" train runs on top of the bridge. They are now working on the Brown line - it is about time - that line is over 100 years old
4) there are cars on the bridge below the "L" tracks - hapless commuters
5) there are a few people walking here and there, and probably bicycling, too
6) there are some kayaks on the river if you look closely - looks like fun!

The answer to my question is Indianapolis. They located it dead smack in the middle of the state just to be in the middle so no one thought anyone was being favored. There is no logical reason for it to exist where it lies except for that reason. Posted by Picasa

Life In The Great Midwest Fashion Tips

Always be prepared for a day of hot hard work wearing your best work clothes. *Inspired by Jonathan over at Chicagoboyz.Posted by Picasa

By the pricking of my thumbs, something wicked this way comes...

I have written several times about what a cesspool of worthless information the blogosphere has become, and also about how much good information decent blogs can bring into your life. Because I run a blog I force myself to read many of the big blogs every day, just to keep up on current trends and stories. The latest "blogswarm" centers around one Jesse Macbeth.

For those not in the know, Jesse Macbeth is a piece of garbage. That is the short version.

Here is the long version. Mr. Macbeth lied about being an Army Ranger. Here is his Ranger photo (credit here):


Right. To read everything wrong with the photo, you can click on the photo credit link for a thorough debunking - and that is just the photo, not what he said.


This guy is about as much a Ranger as this fella:








This is Ranger Rick. When I was a child one of my relatives subscribed me to this magazine. It was all about nature and animals and Ranger Rick would tell all the kids not to harm the animals and leave empty beer cans all over his woods and not to burn down the woods with roman candles, etc.

But I digress, ever so slightly.

Awesome Ranger Rick photo credit here.










So Jesse Macbeth, who is a fake Ranger, did an interview about his fake service in Iraq. He was adopted by IVAW (Iraq Veterans Against the War) and was featured on their website. He discusses his fake service, faking killing of civilians, and the fake slaughter of innocent women and children while he wasn't in Fallujah with his fake battalion. He also talks about his non-existent army "battle buddies" (I think if you called a real Ranger that you would be handed your head) . For gods sake, the kid is 20 and by his stories he has seen more action than George Patton himself.

Anyway, I am getting mad and I shouldn't. His story, even after the army has said that they have never had anyone in the service with that name ever (not even a cook, which would make more sense looking at that pastry chefs had he has on in the photo rather than the regulation beret) is still featured on the Socialist Alternative website.

Yes, the Socialist Alternative. dot org. So millions of people have witnessed the thorough debunking of this loser and yet the Socialist Alternative keeps his story up on their website. That is not surprising, to say the least. Why would they do this? Why do many blacks think the government blew up the levees in New Orleans? Why do people insist that there is a huge government coverup with regards to little green men in area 51? Why do people pay psychics to do cold readings? Because it fits, thats why.

Agreed, the reason that the Socialist Alternative keeps the Macbeth interview up on their front page is for a more nasty reason than the other examples - because they hate the United States and Capitalism. Simple as that. But it fits, too. Really now, don't you think they would print anyone who would come out with some fake creds that was going to trash the military and the US in general? But geez, guys, what's with the Socialism...can't we just give up on that already? Haven't you people heard of the Union of Soviet Socialist Republics? Or the National Socialist German Workers Party? It doesn't fucking work. Ever.

Buried in all of this is the relative insignificance of the blogosphere in, really, anything. I have yet to see a mention of any of this Macbeth dustup in any mainstream media outlet. That is because nobody cares. I am going to make a guestimate of how many people read blogs on a daily basis, just off of the top of my head. You have a small handful, maybe 5 or so that get over 100 k hits per day. Then maybe another 100 or so that have several thousand hits per day. Then everyone else, with 27 hits per day. So that makes, I am guessing a total of between 5 and 10 million hits per day that blogs get. Subtract out people that go to multiple blogs like me and that would put you at maybe 5 million people per day - I think that is even being too generous - that actually read blogs. What I am trying to say here is that I think the party was over before it started in the blogosphere. Blogs that acquired a following like Instapundit will retain their following, but the club at the top is closed for new applicants, unless someone famous like PJ O'Rourke or Bill O' Reilly starts a blog. Or Jessica Simpson for that matter.

It is good to be humble and to not take yourself too seriously - and not to blog for money. It takes out all the fun anyway, forcing yourself to keep those readers you so dearly depend on to keep your hit counter spinning - and maybe compromising your morals, ethics and tastes to do it. What an awful way to spend the day digging up the next screaming moonbat scandal.

Do you think you would have ever heard of Jesse Macbeth if the blogs would have just laid off the story and I would not have even mentioned it here? Who listens to IVAW or the Socialists? If blogging weren't a hobby of mine, I guarantee you I would never have heard of him.

Like the Onion says, Together, We Can Make A Negligible Difference. That applies to blogs too.

By the way, every once in a while I like to say thanks to our readers - you make doing this worthwhile by your return visits and comments soooo....THANKS!

Tuesday, May 23, 2006

Sod-powered car

I recently was in Wisconsin when I saw something that definitely caught my eye... and made me glad that I walk around with my throw away "blog" camera.

This car has sod on the roof! I have seen this in Chicago where they are encouraging plantings on the roof in order to minimize the heat gain on roofs in the summer. Here is a link to a National Geographic article on "green roofs" here in Chicago.

Really, while this may be a bit practical, it also strikes me as a bit nuts. How do you mow the grass up there? The questions are endless... Posted by Picasa

Reader Request

Can anyone on this blog figure out what this picture is, or where it was taken from?

There is no cash prize, just the knowledge of knowing that you are one well informed individual. Posted by Picasa

Physics Problem?

Recently I was baking cookies with a couple of friends and came upon this issue...

How can cookies start out square (out of the package) and end up round?

These are sugar cookies that come pre-made. They are little squares and you just put them on the baking sheet (left photo). After a while, when the cookies are in the oven, you can see that they still have a bit of "square" in them but are becoming "rounder". Finally, you see the cookies at the very end, when they are done cooking, and they are very round.

What gives? Can some reader of this blog enlighten me of the process that inexorably moves these cookies from a square to a round traditional cookie shape?

Admittedly, not a world shaking topic, but it is good to liven things up a bit from time to time. Posted by Picasa

The Wall Street Journal Gets it Half-Right

Journalists are an interesting bunch. Since I have been on this blog, I both have a new respect for the craft of journalism and a general bad taste in my mouth for how it is typically practiced.

The Wall Street Journal had an interesting called “Schools for Scribblers” in their May 19th edition (I don’t usually link to their articles because you have to pay for an online subscription). This article talks about the masses of people being churned out by journalism and communication schools, even while newspapers are cutting staff. From the article:

“So what do aspiring journalists learn in school… there’s a heavy emphasis on process and theory (of journalism)… the running theme is an emphasis on process and the ‘craft’ of journalism… yet this seems a waste of time. Schooling is expensive… instead of educating journalists on the nuts and bolts of journalism – it would make more sense simply to teach them things Facts, it turns out, are useful.”

The article goes on to talk about Columbia university and their attempt to inject core facts into the curriculum. Really, this makes a lot of sense. It doesn’t take much to learn the theory behind being a journalist. But to actually be an effective journalist, you need to understand the topic at hand, do research, and be able to get your point across effectively.

The advantage lots of bloggers like myself have over typical journalists (especially people right out of school) is that we KNOW THINGS. On this blog and many, many other good blogs we talk about what we know, and we are well versed in these topics because it represents items we have experience, opinions and facts on. If we talk about something where we have direct experience, our challenge is really to get our point across, not to 1) determine what the point should be 2) research the point, then get our point across. Part of the reason anyone can start a political blog is that most political research is a vast wasteland once you get beyond the mechanics of research and behavior… there still are a million Democratic activists and bloggers that are scratching themselves wondering how Bush won in 2000 and 2004.

OK, so the Wall Street Journal gets some “brownie points” there for calling out journalists (they are journalists themselves, after all) and point out via constructive criticism how they can improve.

But then… they go about disproving the theory by manifestly NOT knowing what they are talking about.

In an article titled “Lenders, Borrowers Hook up on the web” on Saturday, May 20th one of their writers describes a new online site where individuals can request non-secured loans (borrowers) and other individuals negotiate with them (through the web) and “bid” on at what rate and what amount they are willing to send the money (lenders).

This site is interesting, although I instantly saw these unsecured loans (secured loans are tied to the value of property like a mortgage or a business, while unsecured loans are just based on the creditworthiness and ability to pay of the other party) as HIGHLY risky investments. You can sue the person to try to get your money back but typically the rate of repayment is very low (and uncertain) but the high legal fees and general pain-in-the-ass elements of going after a deadbeat borrower across state lines are very certain.

Thus the author goes through the site, noting what rates are typically charged and what kinds of loans no-one wants to touch, such as wedding loans. The writer doesn’t say what is obvious… loans that don’t go to expanding a business or improving service of a business or personal cash flow (paying off high interest rate credit card debt, for example) are very risky – you shouldn’t loan money if it is going to be used for consumption. Probably, the author just doesn’t make this connection (too busy studying journalistic structure in school, perhaps?)

Finally – the crowning achievement of not getting it. From the article:

“So far, I have made more than 300 small loans at an average rate of about 21%. After factoring in Prosper's fees and the anticipated default rates on my loans, I hope to earn about 13% on my portfolio. In the three months since I began lending, no one has defaulted, although eight of my borrowers are late in their payments”

Uh… if 8 loans are late after 3 months, then they probably aren’t going to pay at all, and there are going to be many, many others joining. Typically, buyers don’t call you 5 minutes after the loan is closed and say “F**K paying you!” which is what you’d have to do to get a default in 3 months. Dead loans pile up over time, and you may get spotty payment, and then no payment at all.

I remember reading about debt issuances and they had a group called “NCAA”. This is an acronym everyone knows, obviously – but in this case it means “No coupon at all” or that the borrower defaulted before they even made the first interest payment.

In the end this person’s portfolio could turn out great – who knows. But debt repayment is a complex game, and they aren’t all going to bail out day one. No one knows what the return will be…. Also the fact that people who DEFAULT don’t just drag down the average interest rate you receive overall, they can drag the rate negative, because you not only are missing out on interest you also lost the principal, plus any costs of going after the deadbeat borrower.

I’d give the Wall Street Journal a 50% glass half-empty for this weekend…

Monday, May 22, 2006

Biking in Southern Wisconsin

Carl's post called "Deathwish" was pretty funny to me because I live in one of the biking meccas of the universe, Madison, WI. The state of Wisconsin has also put a lot of resources into making the state a biking destination, mapping out a lot of country roads for bikers to travel on as well as maintaining a large amount of paths. The state trails carry a $15 per year user fee. By the way, for those not in the know, Wisconsin is very hilly in places - so you can have a challenging ride if you want.

There are tons of bike paths in and around Madison.





























And we actually have biking lanes that are FOR bikes, rather than the City of Chicago's infamous "make the car lane smaller and paint some lines for bikes" lanes.

Biking Video


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I took this video holding my camera on the handlebar so there is some shake. The sound is true enough though - it was very windy on Sunday - and cold.

Saturday, May 20, 2006

View from the top

Near my building in River North in Chicago there is a "high end" building with some interesting architecture. It is called the "Contemporaine" and here is a link to it.

In this photo they are filming out by the reflecting pool in the penthouse. They have a camera crew up and are adding lighting for a better photo. They were also walking through the unit, taking photos of everything.

In the Atlantic Monthly (a great magazine) they had an article in the March 2006 issue about "House Porn" which is basically all of these incredible houses and finishes that the average person can never have, yet they buy the magazines anyway, just to gawk at the pictures.

I guess my neighborhood is contributing their share of hyped magazine photos, although nothing on the scale of New York, where not only are the units amazing the costs are some multiple of the Chicago costs. Posted by Picasa

A Classic

I am sitting here at the keyboard today racking my brain. How many things do we actually use that are over 20 years old? How about 30? Lets try 40. The challenge I bring to myself is to come up with several things that are over 40 years old that can be used effectively either for work or pleasure.

Classic cars. Tools like wrenches (not metric, of course). Firearms are timeless. Jewelry is nice. An old sailboat probably works just as good today as it did back in the early sixties. An old stadium, even though you would be hard pressed to find one really old that hasn't been completely redone on the inside (Wrigley excepted). Silverware, I suppose. There are probably a lot more, but not many if you think about it. Oh yes, one more thing:



I know the photo is fuzzy, so let me help:
Make: Tilt-A-Whirl
Year: 1962 RPM: 6
Mfr: Sellner
Serial No.: 1022








Yes, step right up one and all it is time for my yearly tribute to the Tilt-A-Whirl. And a little advance notice for everyone - be sure you aren't feeling queasy because later in the post a special treat to give you that old time feel for the ride. But first things first.

Last year I did most of the history on the Tilt-A-Whirl. If you are interested (and it is a pretty good post) you can read it first here. The links are pretty neat - hope they are still active. I am too lazy to check. More photos I took are here, here, and here. By the way, that Tilt-A-Whirl was different from the one we rode this year. It is interesting to see how they are designed differently (cosmetically) but if you look at the ride itself it is exactly the same.

I have always loved carnivals and fairs. We always start off the season at Fitchburg Days, which is right by my house. Last night was perfect, and there was much fun to be had at the little carnival and petting zoo they had set up. By the way, it was packed - easily the most people I have ever seen at the festival.

Here is a ride that my wife and I deemed "unsafe". It was called the Ali Baba:

Yikes.


Along the sides you can see some pipes connected with what look to be some sort of universal joint. Those pipes and joints actually spin - I can't imagine what would happen if one of those let go. But back to the Tilt-A-Whirl.











The one from this year was much better maintained than last years model. Note the relatively decent paint on the outside.


Nicely illuminated sign. Although the ride was oriented so the sign was pointing toward an open field, away from the rest of the park. Cows and pigs notice! Tilt-A-Whirl is here!











Most of the bulbs had been replaced and were functioning. Now that I have done some reading and know more about Tilt-A-Whirl's than 99.999999% of the population I notice these things.








Lawyers have invaded all facets of our lives when you see a notice like this in the pod of the Tilt-A-Whirl. Ride is in motion is the understatement of the year. I bet they had to put these stickers on in the eighties. You know that the cars didn't come off the assembly line in the sixties with one on them.








Having fun! Again, note that all of the bulbs are replaced and the paint job is looking pretty good.










The ride moves in a counter-clockwise fashion and the cars for the most part spin counterclockwise as well. I find the most fun being when you can shift your weight and get the ever-elusive clockwise (or inward) spin. Very fun. But enough talk! For $1.50 per rider you get several minutes of nausea-inducing spinning.

But wait! There's more! Always wanting to improve Life In The Great Midwest, I am proud to present our first "vlog" or video log below. And I can't think of any better way to start vlogging than a ride on the classic of all amusement park ride classics, the Tilt-A-Whirl. Please remain in your seats at all times!

Just a techie note - this video was taken with the same camera as the photos above, my Fuji F10. I just can't say enough about this camera and highly recommend it to anyone. On another side note, I was originally going to use "You Tube" for my videos, but they have a limit of 100 meg upload - this video is 124 meg. So a quick bit of google-fu found me Video Egg and it works great! It even has sound so you can hear me groan. Enjoy!

Tilt-A-Whirl Video


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Thursday, May 18, 2006

Deathwish

Posted by Picasa A lot of people champion bicycling as an eco-friendly way to get around. On a more practical matter, it can certainly save on gas and parking is often $20/ day in the heart of the city.

This photo shows one of the "bike lanes" that has been created in the city. This particular lane is on Wells Street, by the Merchandise Mart, with the "L" tracks above.

The lane is on the right side of the street. You can see who also shares this lane... the dreaded city bus. Anyone who has been in the city for five minutes knows that the bus can terrorize drivers. There are generally 2 types of bus drivers - those that just move forward and wheel out into traffic regardless of other cars (figuring, rightly so, that they are going to try to move out of the way so that they aren't crushed) and the "wimpy" kind that waits for people to get out of the way and takes about twice as long to get through city traffic. Cabs also frequent this lane, dashing back and forth trying to pick up passengers.

Really, they didn't add any space or amenities to "create" these bike lanes - they just painted lines on the street and said "let 'er rip". Doing a bike lane like this is kind of like trying to lose weight by erasing your weight on your drivers license and putting in a lower weight - pretty much wishful thinking.

The streets are already insanely crowded, even during the best of times. Thus adding bikes and having them share a lane with the already disrupting buses and often taxicabs is building a solution that is highly unlikely to work very well.

One time in Wicker park near North / Milwaukee / Damen avenue, I came across someone under the "L" tracks with a couple people nearby who looked like a bucket of red paint was poured over his head. Turns out that he was a bicyclist who got "doored" - this happens when someone opens a door without looking and the oncoming bike hits it head on and flies over it, with predictably nasty results.

There is NO doubt in my mind that riding a bike in the city is highly dangerous. I have seen many other accidents or near-accidents, and the problem has gotten exponentially worse with the profusion of drivers and cell phones. It even terrorizes me as a pedestrian (I walk to work, and I am on the damn sidewalk). In an accident, helmet or no, you are going to be on the losing side when a metal vehicle strikes an unprotected rider.

It is similar to the CAFE or fuel economy rules. The automakers responded by creating smaller cars to get better mileage, and smaller cars come out with a significantly higher death rate than larger cars in accidents (I know, SUV's have a rollover problem, but a bigger car has a much better survival rate than a smaller car). It is odd that liberals always are so willing to trade lives for oil, whether it is on bicycles or in cars. I am all for saving energy and giving people choices - God bless anyone who takes a bike or a small car - but it is a strange choice. Most of these same people travel far and wide to avoid chemicals on their food, wouldn't dream of smoking in front of their kids, and worry about pollution. All fine and good, but why then would they put their lives at risk in such a tangible way to bike through the city? I think that they are under-weighting REAL risks and over-weighting UNLIKELY risks.

Just my opinion... as someone who is too scared to ride a bike through city rush hour traffic, based on chronic near- death experiences he has witnessed...

You Can't Be Serious

I have to admit I am amazed every day that I see things on the TV or in my life that are so mind-altering, insanely stupid I have to get myself together to make sure I am not dreaming.

A few months ago I ran into a neighbors wife in the yard and we had a little smalltalk. The usual stuff - kids, house, job. Then she mentioned that she was having a birthday party at the house for herself - and featured at the party was a psychic reading. Before thinking about what was coming out of my mouth I instantly said to her "You Can't Be Serious...". I could tell she was mildly upset so I backpedaled and told her that as long as she found it entertaining that I didn't have a problem with it. Which is a bald faced lie. I couldn't stand it - I went into my soon-to-be-famous psychic mode. Now I really didn't know much about her besides she was from the Chicago area originally, liked the Cubs and still followed them and had two boys, a husband, a huge house and some nice cars. So here I go...I lightly grasped my temples, slightly tipped my head back as though I was summoning something or concentrating and laid it on her:



I am feeling a letter...an A perhaps, maybe an H...it is difficult to tell...the weather is poor, possibly rain...a trip...this event or person...it is difficult to get everything in...the number 3...and something about the mail...
Now most people would realize that I was so full of shit that every fly in Southern Wisconsin was being drawn to me at that moment, but not those who "believe". The cold reading, as described above is one of the oldest tricks in the book. It usually works well with many people and many possibilities in a room, but I wanted to try it on one person at one time to see if it would work. Of course it did. Look at all of the possibilities...

two popular letters of the alphabet
the weather is poor
a trip
an event
a person
the number 3
the mail

This bullshit could mean ANYTHING. Of course she rambled something about it was difficult for her to get everything done in her daily life because her kids were very busy, and the trip could be the one she took to Wrigley and the A could stand for her first sons name, blah, blah, blah, blah...

When in New Orleans once, my wife got a psychic reading from an astrologer (more bullshit) called the "Starlady". I have a photo of it somewhere. I will never forget it. I handed over my $25 (gritting my teeth so hard I though I was going to break my jaw) and the reading began. The usual nonsense. At the end I asked the Starlady if I could ask a question - will I catch a lot of fish this year? She looked at me and insulted me somehow and it was all I could do not to smash her table and take my $25 back.

I assume my neighbor still had the party. The point is that I just cannot fathom paying someone to come to my house and do stupid cold readings. I like magic though. Slight of hand takes lots of practice to do it well and in an entertaining fashion. I will always stop and watch a slight of hand guy on TV or at a park or wherever. Those big illusionists are boring to me, though. Watch me pull a helicopter out of the hat - Amazing - how did he do that? WOW how did he make the Statue of Liberty disappear? No, not for me.

While I am at it, have you ever read anything about Feng Shui? That has to be the most idiotic bunch of bullshit I have ever set my eyes on. In all the business classes I took in college I am still trying to remember how I get paid if my "money corner" is aligned appropriately with the rest of my house. And when you set everything up, are you facing east on a map? Or east as a global point of reference? I think I am jealous because people are making money on this claptrap. How can any sane adult think that some crazy folk bologna written two thousand years ago by some probably drunk monk stuck in a cave in Tibet is going to improve their lives? That goes for acupuncture too. Hmmm...lets see....western medicine based on science and experimentation or some made up crap that has to do with needles, auras and mysticism, mostly invented several millenia ago. How many things do you use on a daily basis are the same as they were back in the days when an infection in your toe would eventually cost you your life? For gods sake the Romans had better medicine than that acupuncture crap.

Martial arts is bullshit, too. I think it is a great way for people to workout and improve their general health. But for self defense, I think they take themselves a little too seriously. Like Steve over at Hog on Ice says:


A baseball bat is worth five years of karate lessons.
He goes on to say:


There are no temples full of magical monks who can walk on water and catch bullets between their buttcheeks. Sorry to break it to you. Did you notice what happened when skinny monks came up against the Chinese army? They bent over and smiled and said, "Here are the keys to the temple. We are now your bitches. Let us know if we can do anything to make your stay more comfortable." That's not how bulletproof monks act. And chi is bullshit, too. Those stories about little fat chi-exuding Chinese men who can't be pushed over, no matter how many people line up and try? Bullshit. Fly one of those little turds over here and let him try to stand his ground in front of Warren Sapp. They'll remove him from the scene with a mop.
True words of wisdom from a true sage.

My wife is pretty good at hustling me out of the company of people discussing psychics or any of that mystical b.s. because she knows it pisses me off and eventually I will end up flaming them.

I think as I mentioned before I am jealous because people are making money at it and I still have to trudge off to my day job and do it the old fashioned, honest way by busting my ass and doing better than any of my competitors that day that are doing the same thing as me.

But maybe if I practice I could have a new career with no stress, practically no education, no accountability, no job review, just collect the money and leave...no, no, no, not a journalist - a psychic!

Wednesday, May 17, 2006

A Waste of Paper??? Maybe Not...

I run some portfolios for my nephews and nieces. These portfolios invest in individual stocks.

As such, even though there are relatively few individual shares in each fund, I receive an annual blizzard of paperwork via "snail mail" as each company sends me an annual report, proxy, etc...

I generally think it is a waste to send paper this way when email / web site / etc... is so much more efficient. However, since I do feel an obligation as trustee to understand what is going on with the investments, I usually read them anyways.

In this case my supposition that this was a "waste of paper" turned out to be totally unfounded. For Amazon.com, the internet company everyone knows for selling books and every thing else under the sun via the web, the "shareholder letter" was excellent.

In the letter, the CEO (Bezos) cites a paper researching decision making. Here is a quote from the paper:

"Excessive attention by management scientists to operating decisions may well cause organizations to pursue inappropriate courses of action more efficiently."

I think that this is paraphrased as "doing the wrong thing, faster". I am also amused by the term "management scientist". What sort of qualifications are needed for this? A PhD in something in HR, I assume. Now that is funny - if those guys are scientists than I am a Renaissance Man (which I surely am not).

In the annual report he also re-posts the 1997 letter to shareholders in its entirety. This letter is an excellent summary of what went right and what went wrong during the internet "bubble". The letter's key points are under the title "It's all about the long term".

I like this line:

"We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions"

And this:

"When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we'll take the cash flows."

And this was way before Enron, the master of optimizing GAAP accounting while torpedoing future cash flows...

All in all the time spent reading and analyzing this annual report was time well spent. Maybe it is because I am of the age of MTV and not Grand Theft Auto but I still am more likely to read and study a printed document than a transient email or instant message. Perhaps it is because of the 100+ spam emails that come into my inbox each day that I am a bit jaded about the "permanent" nature of electronic correspondence vs. the potentially long-lived asset of a hard copy document. Posted by Picasa

Nasty

For the love of god it has rained for 10 day straight here in Madison. This is a nasty stormcloud that just went over my place of business. It brought hail and lots of rain - again. The photo is taken from my business looking west. Posted by Picasa

Buying A House

Posted by Picasa This blog post is titled "buying a house." So what in the heck does that have to do with the cool, souped up gull wing car to the left (a photo I snapped while walking to work a few days ago, when it wasn't raining) - we will get to that...

I often hear the phrase "buy a house". Really. Let's think about what that really means.

In the vast, vast majority of cases, people don't buy a house. Here is what happens:

- You enter into a contract with the seller
- You obtain financing from a financial institution
- This financing involves the bank loaning you the principal amount (sales price) in order to purchase the house, for which title moves from the seller's bank (usually) to the buyer's bank
- You agree to pay the bank interest in addition to repayments of principal
- You may pay fees for the mortgage, or title insurance, etc...
- The seller pays the real estate agent (you are neutral to this, except that you probably paid a higher price than you would have if you'd have bypassed the agent and purchased directly from the buyer, and you could have split the 6% savings and come out way ahead)
- The lawyer is paid for his work
- The city or municipality often receives a fee based on the sales price
- You owe and begin paying property tax on the residence owned by the bank
- You are responsible for upkeep and maintenance on the house, in accordance with the area you live in and your own goals for remodeling or enhancements

All of these items above are negative items, all financially injurious to the buyer. Here are the benefits:

- You no longer pay rent to someone else. You live "rent free" in your own house
- IF the property appreciates in value, AND you find a buyer willing to pay the higher amount, you may be able to sell the property (owned by the bank) to this buyer and you would pocket the gain on sale after paying off your loan. Note that this "gain" needs to take into account the "rent free" months you lived in the house, but then subtract all of the fees along the way and all fo the investment in terms of time and money that you put into the home
- Any interest that you pay (up to a high amount) is deductible on your taxes along with points and some other items, for both your regular taxes and the AMT (alternative minimum tax)
- Any property taxes are deductible for regular taxes but NOT for the AMT
- If you sell the house for a gain, you may be liable for taxes, but with the broad exclusions on gains for homes and the average person won't pay taxes on the home. Plus, capital gains rates are now very low (15%)

Many financial advisors point to the fact that people without houses (renters) have a very low net worth, and people with houses generally have a much higher net worth. Thus, they conclude, homeowning is a sign of wealth building and a recommended course of action.

This methodology or "common sense" idea that home buying builds wealth is probably true if you view it as a forced savings vehicle, assuming that the average person would consume rather than reinvest their savings. If, however, you assume that the average person would invest the savings and then these savings grow with the effect of compounding interest and gains on stocks, then the picture is probably different. As an asset class, there have been good returns on housing, but there also have been better returns on other sectors. Even though home prices have been going up, commodities, for instance, have been skyrocketing (such as oil from $20 / barrel to $70 / barrel, a 350% gain).

The real problem with the methodology is that this system and common perceptions of real estate in terms of your personal home being a "good investment" is that people tend to buy much more "house" than they would if they had to rent. You don't often see giant 4,000 sq. foot homes for rent, but open the Chicago Tribune and you will see page after page of McMansions for sale. Thus the whole "free rent" value, while substantial, is mostly nullifed by the fact that 1) you are buying much more than you'd likely rent 2) you are paying interest, property taxes and maintenance / upkeep on the property, costs that would be borne by the landlord, not you, if you rented (although no landlord is going to run a building for long at a cash flow negative level).

In fact, this game is getting riskier and riskier for participants, due to the following reasons:

- individuals are taking out riskier loan instruments to finance the "purchase" (their bank taking title, that is). These often involve "interest only" loans, often with a "teaser rate" that is low initially but moves up with future interest rates. Since there is less principal paid down each time, the odds are higher that in case of an adverse personal event (job loss) or market event (downturn in the local market) that the buyer could go negative in terms of equity at which point a lot of bad options, such as walking away from the loan and sticking the bank with the loss, come into play
- the market is very high already, so the risk of loss in a downturn is significant (which compounds the risks above). The bull market cannot continue forever, especially since it encourages more homebuilding which in turn accelerates the likely downturn due to excess supply on the market
- property taxes are going up rapidly, because both rates are going up (they never go down) and the assessed value (what the city thinks your home is work) is also increasing due to the market froth. Thus the cost to carry the home is getting worse every year
- the AMT wipes out a significant portion of the total deduction related to property taxes, which can add up to thousands of dollars in tax "shield" lost

Really, what it is, is what a friend of mine in the business said you need to do to MAKE money. You need:
1) concentration
2) leverage

In fact, a house meets both of these. If you have an interest only loan and put down almost no money, AND the market is frothy and you find a buyer, you can sell the house for a big gain even after paying all the fees and costs AND you get tax benefits, to boot. And the bigger the house you bought and the less money you put into the deal, the bigger your gain on what you DID put into the deal.

However, my friend is wealthy and his customers are wealthy. They can AFFORD to take these types of risks to get even richer, but the average person (who ties up all of his net worth into the house) CAN'T take those risks in a prudent way, because if it backfires they will be wiped out.

I'm not saying real estate can't work for a lot of people, and that it can't grow a lot of wealth. IT CAN. However, it is a risky crapshoot of an item, especially given the risks I lay out above. I don't think people are fully considering these risks, nor are they giving themselves much of an "escape hatch" should things go wrong. If you REALLY want to make money in real estate, buy a two flat and rent part of it and fix it up yourself, buy raw land, or get into commercial real estate. Note that none of these items involves buying yourself a giant house to live in and then pouring money down the rathole of expensive furnishings and finishes, which are essentially consumption, not investment. Another way to go is to buy your house outright, and live rent free. This method doesn't give you a tax advantage but is an excellent benefit, especially if you aren't earning a lot on your investments.

Also, it incentivizes the economy the wrong way. By giving a tax break on interest, it punishes those that own their homes outright. By shielding from taxes, it encourages people to "trade up" to more expensive houses, thus increasing an investment in a non-productive sector of our economy.

Back to the post - when most people talk about buying a home, they talk about practical things like schools, their sense of owning something in a community, the tax shield, and the financial benefits. This would be like buying a used Honda Accord for cash outright to get to work and run errands.

In reality, however, they are (mostly) doing the equivalent of the exotic car above in taking something that can be used for a practical purpose (a place to live) and making this the Trojan Horse for a sea of expensive upgrades and luxury living that really aren't cost effective (unless the market continues to go nuts, which it is unlikely to do over the next 3-5 years). You wouldn't rent those thousands of square feet, but you would buy it, and say it is because it is a good investment. But is it, really? And why is the government subsidizing you every which way so that you can stretch your budget to take out a bigger bank loan? It doesn't make sense.

But that is just my opinion... and it is a lonely one in these days of flimsy mortgages and sky high valuations...

Tuesday, May 16, 2006

What People Should Know

Dan pointed me to an interesting post recently regarding the technical prowess of the Celtic people at the time the Romans colonized Britain. The revisionist history, by a Monty Python alumnus, no less, was that in fact the Celts were pretty advanced, which flies in the face of the general consensus of history showing the Romans to be builders of civilizations while the Celts were pretty much barbarians.

The interesting point of this is that out of the millions of shards of facts in history, someone can build a case for virtually any position. These facts are painstakingly gathered and presented to advance an opinion that really is in abeyance with the overall reality of the situation. Since historians, by and large, are a polite bunch, they usually don't call hogwash unless you are trying to deny the Holocaust or something of that ilk, so these types of actually counter-factual analysis tend to not get that much negative press.

Historians get bogged down in fact checking and smaller areas of focus; pretty much any historian studies a narrow area and publishes on that specific arena. Most, but not all, are squeamish about wide and sweeping statements, especially with the seething political correctness that poisons actual debate on campus.

Thus, people miss the point. Our schools don't directly teach what is really going on in the world today, and what has been directly going on for the last century or so. Sure, there are exceptions to any rule, but by not at least stating the general rules, people are ignorant of what actually happened. Many people will call this "stereotyping" but showing only counter-factual, minor examples and ignoring broader trends really goes under the proper category of "propaganda".

So, let's get started. If people want to know about history, or what is really going on in the world today, and have some general "rules of thumb" or principles, here's where I'd start:



  1. Only developed, functioning democracies actually care about the environment and act to protect the environment. If you look at Africa, they have pretty much devastated the entire continent through overgrazing and burning everything that can be used for fuel, poaching and killing what could otherwise be a valuable natural resource for tourism. Russia and China completely foul their skies and rivers to a ghastly degree, and much of Eastern Europe was being ruined until the fall of communism in the late 1980's put the brakes on these trends. Mexico, South America and most of Asia are also ruining their fresh water and natural resources at an alarming rate. The US, Canada, UK and Australia, Japan, etc..., on the other hand, have generally put more and more land under conservation and are showing positive trends towards clean watespeciesnative pecies. This is the opposite of what they tell you in Hollywood or on all the blog boards, but they are basically and totally, wrong
  2. Only developed, functioning democracies care about the rights of women and act to protect their rights. Women are barely even allowed to exist in India and China... ultrasound is used to track newborn girls and they are outnumbered by 1000-600 in a lot of areas. The Muslim countries are particularly bad offenders. In Africa, where there is little rule of law, they generally fare even worse. Remember that the next time you see someone burning their bra or protesting against the injustice of it all
  3. Virtually everything that you use technologically was invented in the US, UK, Japan, Taiwan, Germany or France. While the world is a large place, virtually all advanced research occurs in just a few places. A large percentage comes out of the US - the cell phone, the computer, the integrated circuit, etc... and almost none of it comes out of Africa, South America, most of Asia, etc... as a rule of thumb, if "world music" comes from there, they aren't exactly winning Nobel Prizes for physics
  4. Dictators only respond to force, not negotiations - it is an old UN saw that you need to negotiate until the cows come home... talk, talk and more talk. But what comes out of these negotiations? Nothing. Darfur hasn't been helped at all by mounds of talk and celebrity discussion. Tibet is still under China's boot the last time I looked. Talk has a complete and utter history of failure. From time to time, it appears that talk works (like with Libya) but that is really just someone "blinking" before the fist hits them between the eyes
  5. Without capitalism and free markets, the standard of living is utterly terrible - free enterprise and free markets power the world economy, from Japan to the UK to the USA and Canada. Countries that hurt capitalism, through red tape and laws that strangle businesses, fall further and further behind, such as Argentina in South America, especially compared to countries like India and China that recently embraced free market reforms to feed the tens of millions of people that join their work force every year
  6. Life is extremely cheap in most of the world - a recent editorial in the Wall Street Journal cited a North Korean defector in China and the man that was holding her against her will said killing her would be no more difficult than "killing a chicken". Indentured servitude in India and Africa is widespread and the sums that bond people for life can be triflingly small. Over 100,000 workers were said to have died in industrial accidents in China in a recent year (none of these statistics can be proved because they are suppressed by the government). In the US we bend over backwards to save a life due to an obscure medical drug impact or asbestos, which is a very marginal killer of citizens. In most of the world lives are essentially throw-away and treated as such by their governments. With the massive rise in population, especially in the developing world, unless capitalism and free markets burst forth in a major way, this problem is going to get significantly worse
  7. Corruption is the rule in most of the world - corruption is endemic throughout China and Africa and the developing world. There isn't a concept of a "civil service" that works on behalf of the people; rather it is a malevolent world order of bribes and favors in order to provide what should be provided by the state, whether it is health, safety or customs. The public purse is to be looted; presidents and their cronies should become multi-millionaires; meanwhile, the public is shortchanged
  8. Most countries hate their neighbors - look at the Pacific, where China hates Japan, Korea hates China and Japan, North Korea and South Korea are still at war, and Indonesia is a powder keg ready to blow. These regional rivalries are from way back and often fanned by the flames of authoritarian rules, but it is still a serious situation. South America has come to blows a few times, and Israel and their neighbors are in a tinderbox situation. India and Pakistan are on hair triggers, and China has "beefs" with many of its neighbors

I hope this helps. Back to your reguarly scheduled propaganda...

Monday, May 15, 2006

Barron's - The Original Blogger

Barron’s is a financial weekly newspaper that focuses on stocks and investments. The newspaper is owned by Dow Jones which also owns the Wall Street Journal so it is kind of a sister publication. In this blog I frequently reference that I find the Wall Street Journal to be an excellent publication, both for financial news and the cutting edge of their editorial page.

The first page of Barron’s is an editorial page that I, frankly, find astonishing. The writing is free form to say the least, and is generally without obvious linkage to a democratic or republican slant. The editorials weave together trends, stocks, and dense financial analysis (a lot of times I can hardly even follow them, and I am pretty much a financial expert) in serpentine articles that just twist and turn.

In some ways this writing is a precursor for the blogs of today (the good ones, not the “crap” left / right blogs that Dan and I so frequently deride) in that it obviously doesn’t care what you think about an issue (not trying to rally the faithful) AND it assumes that you are highly literate about a wide variety of inter-linked issues (i.e. targeted to a narrow, very intelligent audience, the same way we like to think about this blog, whether or not it is true). Like a good Seinfeld episode (I try to do this, too, with modest success) they start with one topic and weave to their ultimate conclusion in a way that ties together all the threads without hitting the reader like a sledgehammer.

On May 1, 2006 the editorial page was titled “Back to the Future” by Randall W. Forsyth. This article starts with a discussion of one of the earlier conglomerates, Gulf + Western, that owned Paramount Pictures along with a host of other, unrelated assets that didn’t have any obvious synergies with each other. There was an era in the 1960’s and the 1970’s when conglomerates were (insanely) praised by Wall Street as a way for investors to diversify their portfolios with only one stock (i.e. if one part of the stock was on a down swing, like the movie studios, theoretically the manufacturing lines would pick up the slack and even things out). This is BEFORE someone thought about it for 5 minutes and realized that it was much more efficient for investors to simply purchase a basket of stocks to reach the same effect rather than to try to build all of that into a single stock. Today, about the only still-standing conglomerate is General Electric (GE), now that Tyco has imploded.

From the article (because they say it so well I don’t want to ruin it by paraphrasing it):

“The game (for Gulf + Western) ended with the bear market of 1973-4. Conglomerate fans, who thought one plus one somehow added to three, found the sum of the parts to be considerably less than two. And that continued to be true even after the market recovered ploddingly for the rest of the decade ad into the beginning of the bull market that lifted off in 1982.

That is, until the following year, when Charlie Bluhdorn (the CEO of Gulf + Western) made his great contribution to Gulf + Western’s shareholders. On a business trip in 1983, he dropped dead, which sent the stock soaring. Investors anticipated that Bluhdorn’s successor would sell the jumble of companies, which he had stubbornly resisted despite advice and counsel to do so.”

Wow. What an epitaph. Through his death, he brought value to his shareholders, because his presence was worse than, presumably, anyone else remotely qualified to take on the reins.

Barron’s created a mock “Charles Bludhorn Memorial Citation for Shareholder Value Enhancement” and nominated Sun’s CEO, Scott McNealy, for this honor, since his recent departure caused Sun’s stock to rise considerably.

Other notables whose departures caused a rise in their stock include Michael Eisner of Disney and Carly Fiorna of HP.

Now that is a good article… cutting to the quick, putting it all in perspective, and not dumbing it down for those unequipped to understand the context. And obviously not worrying about hurting anyone’s feeling with the truth.

It is a long way up for me to that goal, but I’m trying…