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    The Rise of “Conventional” Warfare

    Posted by Carl from Chicago on 15th August 2015 (All posts by )

    After WW2 and Vietnam there was an era of relative peace as the two major superpowers stared at each other, laden with nuclear weapons, through proxy states and alliances. During this era, the major powers continually upped their weapons’ capabilities, but rarely tested them, and not against one another.

    Certainly there was war of various sorts throughout the world, but the sort of “conventional” warfare analogous to WW2 battles with armor, air power, and crushing violence rather than guerrilla tactics was far from the norm.

    The additional, tacit, assumption was that many of the modern democracies were far removed from the front lines and as such they let their military traditions die. In fact, many openly scoffed at the military as wasted dollars, or used their military spending substantially for the purpose of protecting local jobs and / or technologies along with export markets (see Airbus and most of Europe).

    The world was on a hair-trigger of nuclear annihilation for so long that the thought of a conventional war became archaic and not normally contemplated. Alongside that was the general feeling that the borders of the nation state were inviolate, and while occasional splits would occur (Czechs and Slovaks, etc…) the vast majority would occur without violence and the transition would mainly involve economic concerns.

    While the US, Russia and China would be loathe to directly face off head to head due to the very real sense of potential world destruction, everything else has become fair game. Russia takes Crimea, parts of Ukraine, and threatens the Baltic states. Is it conceivable that Putin would move in and take over one or more of the Baltic states? Absolutely. This sort of thinking would have been viewed as the raving of a lunatic ten years ago.

    Read the rest of this entry »

    Posted in History, Military Affairs | 28 Comments »

    Who Is Buying That Crap?

    Posted by Carl from Chicago on 9th August 2015 (All posts by )

    Dan and I follow municipal bonds, which is a bit more exciting than it sounds. The State of Illinois, the City of Chicago, Cook County, and many other entities in which I am a semi-unwitting participant will likely soon be on the front pages of newspapers as it sinks in that we can never repay these debts.

    Back in late 2008, during the height of that financial crisis, the State of Illinois issued debt. In this post I basically asked the question “Who is buying this crap?” and the answer was JP Morgan, showing its solidarity (in a way) with the state of Illinois by buying the ENTIRE issue.

    Puerto Rico is the new problem child of debt failure, and as Dan calls it, a “gapers block” over the entire municipal debt market. There were a lot of good reasons to buy Puerto Rico municipal bonds for many years – it was tax exempt, it had high yields, some of it was insured and / or tied to revenue streams like power or water, and historically there had been few or no failures of large-scale municipal bond issuers. It was great to own this debt and collect the high interest rates, as long as you watched it and got out before it collapsed. In a way this is “momentum investing” of sorts – get in and enjoy the ride up, but make sure you clear the exit before everyone else runs out of the movie theater screaming “fire”.

    But the question in the back of my mind was always “Who is buying that crap”. Not sophisticated investors who knew how to ride the wave up and get out before it collapsed, but people who honestly believed that a set of statements by politicians and / or laws as they were currently constructed would magically allow a tiny and impoverished island to pay inordinate debts while their economy imploded around them.

    A recent NY Times article titled “Pain of Puerto Rico’s Debt Crisis Is Weighing on the Little Guy, Too” provided a timely answer to my question.

    To Lev Steinberg, it seemed like a good place to park his nest egg. Puerto Rico bonds offered high returns and tax-free income. And there was little chance, his broker assured him, that the government would default on its debt. So Mr. Steinberg went all in, investing more than 85 percent of his retirement savings in funds with large concentrations of Puerto Rico bonds.“They told me this was safe,” said Mr. Steinberg, a 64-year-old mathematics professor at the University of Puerto Rico, “that the legal protections to repay the bonds were strong.”

    The NY Times article describes how local brokers and banks created products that leveraged up these bonds with borrowed money and then they were sold to Puerto Rico citizens (they were illegal on the mainland). The article said that 20% of Puerto Rican debt is owed to local citizens, and they bought many of the most “toxic” issuances (those with the least protections, like pension obligation bonds).

    Thank you, NY Times, for helping to answer the timeless question “who is buying that crap”. The answer is gullible citizens, who believed in their government’s promises, and also thought that years and years of high returns could be manufactured endlessly out of thin air without corresponding risk.

    Cross posted at LITGM

    Posted in Big Government, Business, Economics & Finance | 15 Comments »

    Our Disastrous Energy Policy, Continued

    Posted by Carl from Chicago on 2nd August 2015 (All posts by )

    New Clean Air Act regulations have recently been proposed by the EPA.

    President Obama will unveil on Monday a set of environmental regulations devised to sharply cut planet-warming greenhouse gas emissions from the nation’s power plants and ultimately transform America’s electricity industry. The rules are the final, tougher versions of proposed regulations that the Environmental Protection Agency announced in 2012 and 2014. If they withstand the expected legal challenges, the regulations will set in motion sweeping policy changes that could shut down hundreds of coal-fired power plants, freeze construction of new coal plants and create a boom in the production of wind and solar power and other renewable energy sources.

    What is interesting is that the EPA recently had their ever-expanding mandate struck down by the Supreme court just a few short weeks ago, when their attempt to kill off coal through regulation of mercury and other pollutants was invalidated for not sufficiently weighing the cost of the proposed initiative.

    Read the rest of this entry »

    Posted in Big Government, Business, Current Events, Economics & Finance, Energy & Power Generation, Environment | 28 Comments »

    Oregon Road Trip Part I

    Posted by Carl from Chicago on 20th July 2015 (All posts by )

    Recently I went to Oregon for the first time. In my past work as a consultant and during vacations I’d been to 48 states – but not Oregon or Hawaii. We started out in Portland and traveled around most of the state and it was a good time, with a lot of odd insights.

    The architecture in Portland was spectacular. I am a fan of the “Dwell” type house; a modern look with lots of glass. Portland had many older houses (Victorians) along with a lot of great new construction, especially in the downtown area.

    Oregon in general had many older cars, often in pristine condition. I saw a lot of older pickup trucks off the main roads, still working hard for their owners. Not sure why but generally it must be that they don’t salt their roads.

    Read the rest of this entry »

    Posted in Economics & Finance, Personal Narrative | 8 Comments »

    The “Amazon-ification” of Retail

    Posted by Carl from Chicago on 3rd July 2015 (All posts by )

    A while back I was talking to a friend of mine and he said

    A package from Amazon shows up at my doorstep every day of the week

    At the time I thought my friend was exaggerating, or perhaps a little bit crazy. But now it has moved to the point where I usually receive 1-2 packages each week from Amazon and now the yellow “minion” boxes abound in my condo.

    What happened? I started to realize that with free shipping and the fact that my iPhone is usually nearby, whenever I am “out” of something around the house or need something that is unavailable, I just pick up my phone, type in a description in the App, and buy it immediately. Then I typically forget about whatever it is that I bought until I open up one of the regularly arriving Amazon boxes and go

    Oh, that’s what I needed

    You can buy pretty much everything that isn’t immediately perishable on Amazon, except for a few things like liquor. Thankfully I live near an enormous liquor store (but unfortunately not a high end grocery store, River North lacks a Whole Foods or Mariano’s) so that’s covered.

    Read the rest of this entry »

    Posted in Business, Economics & Finance | 17 Comments »

    Service Sector Productivity

    Posted by Carl from Chicago on 28th June 2015 (All posts by )

    Recently I went on a diet and began ordering specific drinks ordered a specific way – generally gin with a “splash” of tonic (because tonic has carbs and I want to minimize carbs, but need something to cut against the alcohol). This order, however, has become a running joke among my friends because no matter what I order I usually get the same drink every time – which is a “standard” gin and tonic (see below, the wrong order per usual).

    Unlike most people who would shrug it off or get angry, to me this is really an economics issue and not just a “bad order”. When you work with bars and restaurants and other similar industries, if you do anything “outside the norm” your odds of getting it “right” are often less than 50/50. Which leads us to the title of this post…

    Read the rest of this entry »

    Posted in Business, Chicagoania, Economics & Finance, Management | 20 Comments »

    Margie’s Candies Is Highly Recommended

    Posted by Carl from Chicago on 28th June 2015 (All posts by )

    Recently I was on the “606” Trail and visited one of my favorite spots in Chicago – “Margie’s Candies“. Margie’s makes incredible ice cream sundaes that must be seen to be believed – and they come with an actual silver pitcher of hot fudge that you can pour on the ice cream yourself. Usually I would start with a photo of the restaurant but I wanted to make sure that the “money shot” is above the fold.

    Read the rest of this entry »

    Posted in Chicagoania, Diversions | 10 Comments »

    25 Stories About Work – From College to Work

    Posted by Carl from Chicago on 21st June 2015 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    Chicago, early 1990s

    Today it seems like everyone goes into college after taking many Advanced Placement (AP) courses with a lot of college credits. When I did this in the late 1980s, however, it was much rarer. I was able to cut out an entire semester with credits from high school and with summer school and a heavy course load I was able to graduate with an undergraduate and graduate degree in accounting in four years.

    I remember finishing college at the end of May. Back then we didn’t have air conditioning in our house nor in the buildings on campus and I remember just sweating so much that my arms stuck to the coursework. In graduate school we had a number of group projects which were harder to schedule back in the day before email and cell phones; we had to pick a time and actually stick to it in order to collaborate. Exams were long and we had to turn in all of our projects and I was kind of exhausted.

    Immediately after completion of exams I took the CPA exam. Today the exam is much different and it is commonly taken “in pieces” but back then most people sat down and in two days tried to knock out all four sections at once; you needed a score of “75%” to pass each section and I passed all four the first time, although one of the sections was right on the edge with that “75”. The exam was in McCormick Place, South of the Loop, and on Friday around 6pm I decided to take side streets (Ashland) up from the South Loop to the North Side. That turned out to be a terrible decision; at that time Chicago was extremely dangerous and this was before gentrification of the South and West Loop; there were large groups of people milling about in the street and burning trashcans like that scene out of “Rocky”. I got through it but it was something I’d never recommend trying again.

    By the middle of June I was starting my first job. The accounting firm tried to get me to start in the fall, when the vast majority of new staff joined, and asked me why I didn’t want to just take the summer off.

    “Because I don’t have any money” was my answer.

    Read the rest of this entry »

    Posted in 25 Stories About Work | 19 Comments »

    On the 606 Trail

    Posted by Carl from Chicago on 12th June 2015 (All posts by )

    The “606” trail in Chicago opened recently. It follows an abandoned railroad track that starts in Bucktown / Wicker Park and heads west from there. I am very familiar with this track since I used to live in Bucktown a decade ago and stared at the crumbling bridges that split the neighborhood.

    The trail is named after “606” which is the first 3 digits of the zip code in these neighborhoods. I guess that is an OK name but it’s kind of an obscure reference. Does anyone even send mail anymore? The park is sometimes compared against the High Line trail in NYC but the High Line is way cooler since it moves through a heavily urban area. But the 606 is a massive upgrade from just a crumbling set of train tracks.

    Read the rest of this entry »

    Posted in Architecture, Chicagoania, Diversions | 3 Comments »

    A Car for $89 / month

    Posted by Carl from Chicago on 12th June 2015 (All posts by )

    For years I was proud to be the owner of a 1998 Altima which ran forever, never broke, and required no upkeep. I passed on the Altima (it is still going strong in our family) and eventually ended up with a 2011 Jetta that I purchased new.

    I knew I had made the right purchase decision when I saw this article in Bloomberg titled

    Jetta Leases as Cheap as Mobile Phones shows VW’s US Travails

    From the article:

    The $89 a month it takes to lease a Jetta at some U.S. dealerships is about as low as the price of using an iPhone on some mobile-phone plans. It’s also a sign of how Volkswagen AG is grasping to turn around its fortunes in the U.S.
    The bargain deal — available after a down payment of about $2,500 on the $17,325 Jetta — runs over a three-year term.

    I paid about $17,000 for my Jetta and it has been a great purchase. It is a roomy 4 door car with solid handling – one time I had to lock up the breaks at 65 mph when a lunatic decided to get off the highway from the left lane and exit – the car saved my bacon and stopped on a dime, straight and clear.

    When I drive people around in the car they are astonished at how nice it is for the money; in most instances a car is a terrible investment and minimizing your initial purchase not only saves you direct costs it also saves you on taxes, service costs, and insurance. Recently I had a tire issue (Chicago has terrible potholes) and I just went and bought all four tires and had them installed for $550 including taxes. I have friends where it costs almost $1000 for EACH tire… much less all four.

    There are many good reasons why you may have to invest a lot in a car; if you have to cart around a lot of kids, or need to transport a lot of equipment or materials in the bed of your truck. Most of the time, however, a car is a status symbol, and people pour money into their car because it seems cool or attracts attention. That logic is fiscally irresponsible and it is interesting to see how much cheaper this Jetta is against the competition when for almost all normal, functional commuting purposes, it functions identically to cars that cost 2-4x.

    Cross posted at LITGM

    Posted in Business, Economics & Finance, Human Behavior | 6 Comments »

    Use of Netatmo to Measure Wealth in Chicagoland

    Posted by Carl from Chicago on 6th June 2015 (All posts by )

    Netatmo is a personal weather station that you can buy which is wifi connected and “joins” the netatmo network worldwide so that your information contributes to the grid of stations. I wrote about my experience in detail here.

    Here is what Netatmo looks like on your phone – you can see the temperature inside and outside your house (it is also connected with weather alerts) and if you turn your phone sideways you can also graph data along many time series. I find it to be very cool and check it a lot on my cell phone or ipad when I am bored and want to kill some time.

    I started looking at the Netatmo weather map on my phone and it also becomes a visual map of wealth and technology adoption in Chicago. While you can’t see all the individuals who might buy an iWatch on a map, the Netatmo weather station becomes a clear signal and it is tied to a clear physical location. Note that when you “drill in” to the map you will see many weather stations in an area such as River North – however if an area is devoid of stations entirely it comes up blank. And there’s Chicago! You can see the stations in the north side, a completely barren west side, and a mostly barren south side, except for the dot along the lake which represents Hyde Park.

    Read the rest of this entry »

    Posted in Chicagoania, Society, Tech | 6 Comments »

    The End of the European Welfare State As a Comparison Point for the USA

    Posted by Carl from Chicago on 31st May 2015 (All posts by )

    For years articles about everything from family leave to medical benefits started with the premise that

    The United States is the only modern Western economy that doesn’t do or provide “X” for their workers

    Thus the premise was the our economies were roughly equivalent and the USA was “mean” or “backwards” because we didn’t provide all those benefits and worker protections that the other countries were (apparently) able to absorb.

    In the Sunday Business of the NY Times we can see where this has finally led, however – in an article about retraining European workers titled “Fake Jobs with Real Benefits” this is the end statistic:

    But in a reflection of the shifting nature of the European workplace, most are low-paying and last for short stints, sometimes just three to six months. Today, more than half of all new jobs in the European Union are temporary contracts, according to Eurostat.

    These jobs don’t have the famous protections for working mothers and stay-at-home dads and for medical benefits and pensions and everything else; they just set you up for a few months at a time and can just not renew your contract for any reason, including if you are legitimately hurt or ill. These are the ruthless “McJobs” that have been decried for years in the USA.

    In parallel, Spain is now lurching into a political crisis similar to what is happening in Greece. Here are some statistics on Spain per this Foreign Policy article:

    The Eurozone as a whole is a disaster. Whereas the United States’ economy is nearly 10 percent larger than it was seven years ago, the Eurozone’s is 1.5% smaller. And Spain is faring even worse; it’s economy is still 5 percent smaller. Nearly one in four Spaniards, and one in two young people, are unemployed. In the European Union, only Greece’s unemployment rate is higher. Many people have dropped out of the labor force (or immigrated to countries where there are jobs to be found). A lost generation is in the making.

    And the governmental statistics are sobering:

    Spain still has the largest fiscal deficit, as a share of the economy; in the entire EU: 5.8% of GDP last year. Public debt as a share of GDP rose by more last year than anywhere else in the eurozone and is set to top 100 percent this year.

    The few remaining permanent full-time jobs are often in the governmental sector; this is closely linked to corruption. In Spain the corruption of the ruling parties contributed to their drubbing in local elections.

    The net of all this is that comparing the USA to Europe is now mostly a fools’ errand. Not only has growth and productivity stalled across most of the EU, the cherished benefits that are held up as the “gold standard” are accruing to fewer and fewer workers as the young frankly have no work at all and many of the adults that do work are on these short term contracts where those protections rarely apply.

    Whether or not the USA should enact various protections to our workers is a good question, with pros and cons on both sides of the ledger. However, the blanket statements that we are the last modern economy to not do “X” should be tossed in the dustbin of history, because it doesn’t apply anymore.

    Cross posted at LITGM

    Posted in Big Government, Economics & Finance, Europe | 8 Comments »

    Trains are Indefensible

    Posted by Carl from Chicago on 17th May 2015 (All posts by )

    I remember as a kid watching “Lawrence of Arabia” where he led Arab raiding parties against the Turkish train lines in WW1.  Per this PBS article about Lawrence:

    With the Ottoman army spread thinly across the empty vastness of the Arabian Peninsula, the Hejaz Arabs found it relatively easy to strike and sabotage Turkish lines of communication and supply. With the Red Sea firmly in British hands, the Turks had no option but to use the Hejaz railway to move their men, supplies and munitions.  

    Lawrence and the Arabs spent much of their two years on the road to Damascus destroying sections of the railway. Small units of men laid charges on the track. Then as the Turks defended the track, Lawrence’s men formed large moving columns capable of rapid hit-and-run operations. 

    In the recent train crash in the East Coast there are discussions of a “projectile” hitting the train and distracting the conductor.  While this hasn’t been confirmed, it is relevant to consider how difficult it would be to secure train lines from attack or sabotage.

    This discussion is much more relevant in the context of “high speed trains”.  There is a broad theme among many that the US is behind because we have not invested large sums of public money in high speed trains, that we are “falling behind”.  Per wikipedia the Japanese high speed trains (similar to the Chinese high speed trains) typically have more than 1000 passengers on each of their trains.

    The USA has far larger distances than the Japanese trains.  If you built a train from Chicago to New York, for example, it would be almost 800 miles long.  This is for a single rail line.  Obviously to connect the major cities of the USA you’d have thousands of miles of train lines.

    How would these train lines be defended?  It would be easy for a terrorist to just cut through the fence somewhere and park a cement truck on the tracks, for instance.  The ensuing carnage would easily accomplish what 5-10 hijackings could accomplish.

    If you think that the Homeland Security plans are over-reaching, just wait to see what it would take to defend hundreds or thousands of miles of track.  Instead of having a bottleneck at the airport, the entire line would be a potential point of attack.  Even if defenses were erected, they would only have to overwhelm them at a single weak link in order to assault the train.

    No one is incorporating this into their cost estimates for high speed trains; they likely have fences and barriers but are not contemplating stopping a determined, armed attack by terrorists.  They should, because after one such attack a giant post-haste effort would emerge kind of like our early days of the TSA.  They should contemplate and include a giant, armed, unionized Federal bureaucracy in their midst and add this into their cost estimates and see how it compares against highways and aircraft.  The numbers, already dubious, would then be far, far in the red.

    Cross posted at LITGM

    Posted in Big Government, Business, Economics & Finance, Terrorism, Transportation | 25 Comments »

    Airline Competition Has Been Crushed

    Posted by Carl from Chicago on 16th May 2015 (All posts by )

    If you’ve flown much in the last few years, you’ve probably seen what I’ve experienced, as well – completely full planes, high prices, and aggravating extra charges for baggage, wi-fi, etc… This is really a symptom of what has actually occurred, which is that airlines have finally moved past an era of competition into an era of oligopoly.

    The real indication of their new status isn’t the high prices and full planes – it is in the stock price.

    Here you can see the major carriers which have survived and consolidated the US market – Southwest, American Airlines, Delta, and United / Continental. For years and years the stock prices of major airlines have languished – per Warren Buffet

    He said that a durable competitive advantage in the airline industry “has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down,” he joked. “The airline industry’s demand for capital ever since that first flight has been insatiable. Investors have poured money into a bottomless pit.”

    Each of the major airlines has predominantly broken their strong unions and taken medicine from bankruptcy to mergers in order to restore their finances. Instead of a focus on expansion, they are operationally focused in terms of filling every seat on every plane at the highest price possible, in terms of ticket costs and extra fees. Today they charge you for every sort of upgrade; “economy plus” which is a seat that you can sit in and get work done, costs extra, as well as for checking bags.

    There is absolutely nothing wrong with a company doing all they can to maximize profits, especially after savaging investors for many years with poor stock prices and a lack of dividends (and the high risk of total financial collapse). The airlines have finally figured out technology as well – if you want to upgrade any element of your flight experience, from business to first class to economy plus to a daily club pass – it is all right there as long as you are willing to give them your credit card number.

    The airlines have also figured out that their frequent flyer programs provide benefits but also can be a millstone. Rather than rewarding miles, they are looking at the prices of the tickets paid by each traveler which rewards those that actually provide the greatest benefits to the airlines. If you’ve tried to actually use your benefits (except for Southwest), you’ll find that seats are very limited and you need to plan far in advance to receive benefits from these perks.

    Read the rest of this entry »

    Posted in Chicagoania, Economics & Finance, Middle East | 12 Comments »

    25 Stories About Work – It’s All About Cash Flow (Part II, Large Companies)

    Posted by Carl from Chicago on 3rd May 2015 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    The USA, early 1990s to mid 2010s

    When we have new staff I usually orientate them on the concept that

    You should assume that many outside vendors who bill us don’t care about getting paid

    Although this concept seems astonishing and against basic capitalist principles, it is often the case.  While each vendor is different, a share of the vendors bill us months and months after the fact and often the bills are incorrect and  incomplete.  Sometimes we have to initiate the process and call the companies to demand the invoices, so that we can match them to the purchase documents and receipts, as well as check the taxes, quantities and costing components.  If we don’t reach out to these laggard vendors and push for complete and accurate billing, we will have a crisis on our hands quarterly when we attempt to accrue for what we are owed and sort through months and months of late and incomplete bills and partial payments.

    The only time some of the vendors start to care about collections is when the bills are so delayed that the sales teams’ commissions are at risk.  At that point the company typically springs into action and is “Johnny on the spot” attempting to reach out to resolve any issues because the sales teams at the vendor have significant power in the organization and complain with vehemence whenever their compensation is at risk.

    While some vendors are laggards on collections, they all are focused on closing deals at the end of each quarter so that they can “book” these deals as revenue per accounting purposes.  There are criteria that must be met (the hardware must be shipped from their dock) but the firms will generally stay up all night or jump through whatever bureaucratic hoops are necessary to complete the deals for that quarter.

    These notes specifically apply to public companies that aren’t in major financial distress.  These companies are aligned to GAAP principles, which focus on earnings and not cash collections, so they often don’t stress timely and accurate invoicing and collection of their bills.

    On the other hand – private companies or those that have been taken over by hedge funds and other sorts of shrewder operators, are completely focused on cash flow.  If you are a private company, earnings matter (especially if you are “prettying” it up for sale) but CASH IS KING.  Private equity investors like to pay themselves cash dividends out of the companies they acquire, so they definitely sweat the timing of payments and keep a close handle on cash flow.  These same private companies also work strenuously to minimize taxes which stand in the way of dividend payments to the owner.

    Read the rest of this entry »

    Posted in 25 Stories About Work | 5 Comments »

    Recent Stock Moves

    Posted by Carl from Chicago on 3rd May 2015 (All posts by )

    Over at Trust Funds for Kids I commented on some recent stock moves and the rally in China…
    Read the rest of this entry »

    Posted in China, Economics & Finance | 3 Comments »

    Chicago International Movies and Music Festival

    Posted by Carl from Chicago on 18th April 2015 (All posts by )

    There is a festival here in Chicago focused on movies about music which also has a bunch of bands playing as well.  It is our attempt to have a little “South by Southwest” action in the city of Chicago.  At least they have some nice weather this year – this weekend seems to be the start of spring and everyone is out side and on balconies and has a lot of positive energy.  Here is a shot from one of the movies on the cover of the Reader.

    Unfortunately I can’t go to any of the events because I can’t stand in lines for too long and I can’t be jostled or have someone step on my foot and that’s what usually happens at a concert.  I will look for some of these movies out there on the internet though later or if they come to an art house movie theater or something.  Here is the site listing what is going on and an interview with the founder on Chicago Tonight (a great program) and below are some of the ones I’d go to see if I was able to do so.

    • Danny Says” which is a movie about the manager of the Stooges and the Ramones.  That guy must have seen a lot of crazy stuff
    • 808” a story of how a device never intended to be a beatbox helped launch hip hop and modern music
    • Morphine – Journey of Dreams” one of my favorite bands of the 1990’s was Morphine and I was very saddened when their lead singer / bassist dropped dead at a show overseas.  Also the remaining members played a show under “Vapors of Morphine” as well
    • Jaco” is about the fantastic bass player Jaco Pastorius who was a little crazy and unfortunately died young after being beaten by a club bouncer.  At the festival the bass player from Metallica (who is from Suicidal Tendencies if you go way back to “Institutionalized”) talks about Jaco, as well
    • Local H is playing too.  They are awesome and one of the few survivors of the 1990’s.  See them when they come to your town

    Cross posted at LITGM

    Posted in Chicagoania, Film, Music | 8 Comments »

    The Internet of Things… Connected Weather Station

    Posted by Carl from Chicago on 14th April 2015 (All posts by )

    I have been laid up for a little while and like a good shut in I was shopping on Amazon for things to buy. One item that is always of interest to my parents and relatives is the weather. A while ago I bought them an Ambient Device weather forecaster which they still use today and they find very useful (sadly, that company went out of business).

    I recently spent about $150 to buy a Netatmo indoor and outdoor temperature / weather station. It is quite fascinating. Here is the indoor module that tracks temperature, sound (in decibels), CO2, humidity, and other elements. When you push the top button it will glow based on the CO2 levels (green is “good”). I plan to hide it behind a couch so you can’t see it. The indoor unit connected to my phone via bluetooth and then I was able to get it to sign on to my wireless network. It took about 5 minutes.

    Here is the outdoor component. This unit measures humidity and temperature and connects to the “base” station above. The outdoor unit is battery powered and all weather so once you put it outside (on our porch) you can ignore it and it will send readings to the base station.

    The really cool part is that you just download an app onto your phone and voila! you can have updates and graphs and charts and see your temperature in and out of your house anytime. They also have alerts so that you can be notified if there are temperature changes (such as below freezing weather outside or interior temperatures that drop enough to freeze your pipes) and also for CO2 alerts and other customizable features. It is all very easy to understand.
    Read the rest of this entry »

    Posted in Tech | 11 Comments »

    25 Stories About Work – It’s All About Cash Flow (Part I, Small Companies)

    Posted by Carl from Chicago on 12th April 2015 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    The USA, early 1990s to mid 2010s

    Recently I saw this little blurb in the NY Times business section which perfectly encapsulates one of the most important lessons I’ve learned in all my years of working – it is all about cash flow.

    The simplest measure of success for a business is bringing in more cash than you pay out and having a positive bank account balance at the end of the month. When you are in charge of a business and attempting to make your payroll these sorts of concerns should always be “top of mind”.

    Cash Flows in a Smaller Firm

    When we started our consulting firm you had to put up enough capital to pay salaries for a while (we took a small “draw” to keep us afloat, not our former total compensation) until we were able to bring in cash from customers. However, this is a longer process than you might imagine if you weren’t educated in the realities of all the crucial steps in the chain necessary to get paid. Since we were accountants and finance people we went into this with “eyes wide open” but I can only imagine the types of trouble that creative types meet up with when facing this same conundrum.

    Thus our sequence of cash flows at a high level when starting up a consulting firm looked like this:

    – Additions – capital contributions from partners. Based on the equity you wanted in the final firm, you needed to put in capital (that maybe you’d never receive back) to start up the firm
    – Additions – loans. We didn’t take out loans but we could have. Banks generally never loan you money unless you have collateral and we didn’t so it would have been credit card debt at the time
    – Reductions – office space and rent. We needed to start somewhere. Initially we just used a room in our boss’s house, which worked out fine, and later we rented a space near a bowling alley. Note that everyone you are renting from eyes startups with a rueful glance and you can’t expect to get much in the way of credit because they don’t want to end up holding the bag
    – Reductions – insurance, legal fees, taxes, office staff, computers. All the ephemera of an office needed to be purchased but we did it second hand. We also used our own skills rather than hiring third parties whenever possible (almost all of the time)
    – Reductions – payments to core staff. We used “draws” which were minimal amounts to cover life expenses and in a way were payments in advance of what you’d earn, not like a salary that you receive regardless of the end state of the enterprise and your personal contribution. For office staff we picked up later we needed to pay them a normal salary

    All of this happened before we even met a potential customer. Then we needed to fly out and meet customers (we already had a lot of connections; much of our early success came from bringing on existing clients from former consulting firms), convince them to sign us up, agree on a price and contract terms, and then begin doing the work.
    Read the rest of this entry »

    Posted in 25 Stories About Work | 14 Comments »

    25 Stories About Work – New Technology and Productivity

    Posted by Carl from Chicago on 10th April 2015 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    The USA, early 1990s to mid 2010s

    Oftentimes I can remember clearly the first time I was exposed to new technology. Unfortunately these stories don’t have “light bulbs” going off in my head like in a cartoon; it usually involves me being befuddled and trying to determine why this technology is innovative or even useful.

    In the early to mid 1990s I was at a client in Reno, Nevada when the manager on our engagement showed me their “calendar” application. This application let you set up meetings with other employees, or show if you were going to be out of office or unavailable. The interface was very simple (like a mainframe “green screen”) and I kind of stared at it for a while. Why can’t you just call around and set up a meeting at a particular time, I wondered aloud. However, we were consultants, so while we worked all day (and into the night), the client’s staff were forced to attend meetings during most waking hours. It still seemed like overkill to me to have a giant system just to set up meetings, however. Obviously history has proven me wrong and calendar applications are the “killer app” of the modern productivity suite.

    At around that same time I was at a client in Cincinnati, Ohio when another consultant showed me a PDF document format. He explained (very patiently, in hindsight) that if you created a PDF and then had a viewer application it would work on every kind of computer, whether or not they had the software that you created the document in. I was confused. Didn’t everyone have Microsoft office? Couldn’t they just open it in word? Once again I missed the big picture.

    Email was around for a while but it didn’t catch on fire in our profession (consulting). A lot of this was due to the fact that we spent our days at the client site and the client (where we did most of our work) was on a different email system from our consulting company’s email system. Thus the most useful email wasn’t your firm email, it was the client’s email, because this would let you know when meetings were occurring and get important data from the client’s directly (although we usually used shared drives). I do remember my sense of accomplishments when I sent my first marketing email to a known client in the mid to late 1990s… I was waiting like that kid in “A Christmas Story” who wanted his secret decoder package from Ovaltine for a response to my meticulously crafted email… and of course it never came because I was late to the party and the potential customer had already gotten used to be inundated with marketing email (and ignored it).
    Read the rest of this entry »

    Posted in 25 Stories About Work, Tech | 6 Comments »

    25 Stories About Work – When It All Goes Wrong

    Posted by Carl from Chicago on 4th April 2015 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    The USA, early 1990s to early 2000s

    During the course of my career I have been involved in many cases of companies dying, bankruptcy, and other negative corporate events. At times I was there until the bitter end; often I left before the final events occurred but could see evidence of encroaching doom. When you are first starting off as an employee with little experience these signs are harder to understand; as a veteran I can now unfortunately pick them up right away.

    One of my first memories as a public accountant was the day that they fired all the administrative assistants. Not the ones for the executives – the ones that helped the new staff get orientated. These women (they were all women it was the early 1990s) ran each of the floors and it was the first time I’d seen anyone get fired en masse. This was before email I think they left us all some sort of strange voice mail or something (voice mail was big back then). It seemed very sad at the time.

    In the early 1990s there was a lot of tension in the public accounting firms between audit / tax vs. the consulting side. I was a staff person and was invited to one of the partner meetings (because I played bass guitar but that is a different story) and I could see the vitriol between the two groups. When the audit partners’ asked “how could they help” the consultants the answer was to “get out of our way”. This was not the happy story that I was being fed as a staff person, for certain.

    Later that accounting firm went belly up but I was long gone by then. We started up a small consulting firm and it was fantastic for a while. However, it all started to fall apart as key founding members left after a dispute with the main owners over compensation and eventually I was one of those that departed. The departure was even more difficult since many of my friends and family members were also involved with that firm. Unlike most of the other companies in this piece, however, that firm thrives until this day. So we can conclude that I was not indispensable…

    At various points during my career I had a “choice” between two firms. Often I chose the wrong one. At the time I didn’t realize that right before you go public, you shave out all of your costs for a quarter or two and you accelerate all the revenue into the current period (to the extent that this is possible and legal, of course) in order to make your company look great for the IPO process. Living in a company that is doing this is very painful and I left but that was before the company became one of the first successful IPOs of the era (a completely unexpected and unprecedented outcome) and I missed out on an opportunity for those founder stock options.

    As the dot.com era came to a close there was a giant shake-out in the Internet and Consulting sector. I worked with three companies in succession that eventually went bankrupt. The first of them had an IPO (in the era of voice mail plus a bit of email) and I noted that it was odd that most of the IPO funds raised went to pay out one of the primary investors (they took the cash, we retained the stock). In hindsight of course this was another ominous sign.

    Read the rest of this entry »

    Posted in 25 Stories About Work, Business, Chicagoania | 2 Comments »

    NBA Bulls at Bucks Courtside

    Posted by Carl from Chicago on 4th April 2015 (All posts by )

    Recently Dan and I went to Milwaukee to attend a Milwaukee Bucks game against the Chicago Bulls. I decided to splurge for court side seats (the Jack Nicholson type seats) because watching the game is totally different down there. We were right behind the Bulls bench as you can see (there is coach Thibs). I also love this picture because I just happened to snap it as they had entertainment right behind the coach and you can see the guy overhead who jumped off a trampoline and dunks a basketball. Also note the security guy on the right giving me the stink eye.

    Watching the game from that low is a completely different experience. No matter what the score is, the game is interesting. The players move very quickly and it is hard to understand the plays as they develop (unlike when you look from overhead or up in the cheap seats where I would normally reside). While sometimes the fouls seem fake other times they take bona-fide hard fouls; when you are six and a half feet tall and jumping way over the rim and you end up getting thrown down on the court on your back, that’s a long way to fall. The way the players shoot is also very interesting – when they do jump shots they are almost eye level with the rim and as they do layups and dunks in warmups it often seems like they are barely jumping at all.

    Half the fans at the game were from Chicago. They ought to fold that franchise in Milwaukee or find something else to bring in fans; the upper deck was mostly empty vs. Chicago and you’d have to think this is one of their bigger draw games of the year. But there is no way that I am smart enough to explain sports economics…

    Cross posted at LITGM

    Posted in Chicagoania, Sports | 1 Comment »

    25 Stories About Work – Days Gone By

    Posted by Carl from Chicago on 31st March 2015 (All posts by )

    I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…

    The USA, early 1990s to early 2000s

    For over ten years I traveled mostly five days a week.  Back then we flew out on Sunday night so that we could be on site Monday morning at 8am, and we left the job site on Friday after 5pm which meant that typically I’d get home in the wee hours of the morning on Friday, since often we had to drive for hours to get to the airport before we could even fly home.

    Those years are a blur.  I joined the work force during a recession in 1990 and everyone was happy to have a job; no one was complaining.  Right as the dot-com boom ended in about 2001 we had changed our ways and most of the team was flying out Monday morning and leaving on Thursday and “worked from home” on Fridays.  This was viewed as “the good life”.

    However, for most of those years, life was a blur of travel, packing, unpacking, and working.  It would likely be impossible to motivate staff to work and travel like that nowadays; back then no one thought anything of it and we really didn’t even complain as people got divorced and their personal lives crumbled into dust.

    Going into the workplace in 1990 there were three things that you could count on:

    1. You were going to work all the time, very hard
    2. You were likely going to work for a bad boss who would drive you with a whip
    3. Often times everyone would go out and have some drinks and a good time
    With these expectations, it was hard to be disappointed.  We worked all the time and then we went out for dinner and drinks and then got up the next day and did it over and over again.  From our perspective, this was the way it always had been and the way that it always would be.  These sorts of expectations are built into the name of our blog “Life in the Great Midwest” and it sums up the world view and baseline of our careers.

    Certainly people washed out from this insane grind.  It was mostly a male-dominated profession, although there were a few women consultants and auditors who mostly found roles where they were able to minimize their travel.  This was a zero sum game, however – since they took the roles that didn’t involve much traveling, often you had to travel that much more.  Someone had to service all of the clients and many of them were located in cities with few local staff, and those local staff often didn’t have the skills that the client needed.  Thus the same road warriors showed up and did the work, and every year a few more of them fell off the team due to family reasons (or they just “wised up”) but were always replaced by new fresh faced kids eager to earn what seemed to be top dollar or a wizened ex-corporate type needing to make more money.  The kids often worked out but the older ones didn’t; it was difficult to adjust to a life of heavy travel midway through your career.

    The consulting firms went public – the biggest one was Accenture, but all the big names (with a few exceptions like McKinsey and BCG) eventually monetized and to some extent it was like the Silicon Valley of that era.  Many got rich and I had the opportunity to participate in a couple of the smaller ones but ended up taking the choice that didn’t lead to my own riches; but that’s my own (bad) luck.

    Consulting and auditing pale in comparison to investment banking; I never have seen people that put in more hours than investment bankers.  I have no idea how they do it; a couple of years ago I went out for dinner and a couple drinks with a good friend of mine who is an investment banker in his 40s, and afterwards he went back to his hotel room and worked for a few more hours on a “pitch deck” for a client meeting the next day.  Whether it is practical work or not isn’t for me to judge; but as a long term “road warrior” I can tip my hat to them as being completely off their rocker in terms of how much time they are willing to invest in a client.

    Perhaps the new “road warriors” are the Silicon Valley start up people.  I have been at a few of their companies and I can see the drive and stamina oozing from their pores as they stare at their computer screens, working to make their riches.  They are a bunch of young men as I was once right out of college as an auditor and they are hurling themselves into their careers and trying to make the immense riches of stock options and to be part of something great.  I’m sure that there are many women in there but the vast majority of the staff are men and they are attacking these opportunities like we used to as consultants.

    Cross posted at LITGM

    Posted in 25 Stories About Work, Business | 12 Comments »

    Technology and Mass Transit

    Posted by Carl from Chicago on 29th March 2015 (All posts by )

    I have not seen a formal study of the impact of technology on mass transit but I believe that it has made it profoundly more valuable and useful. And I accidentally participated in an experiment that partially proved this statement in the inverse.

    In Chicago they have a CTA “bus tracker” that tells you when a particular bus will arrive at your stop. Or you can program it so that you can see all the buses from various routes that are coming past your stop (this is useful because in Chicago you can often take many different routes that go to the same place over shorter distances). It works on your phone and many of the newer stops have the bus tracker programmed into the canopy so you don’t even need to look it up on your phone.

    Sadly enough most days rather than looking up the street for buses I check the bus tracker. I can usually get from my condo down the elevator and past the lobby in 2-3 minutes so 4 minutes is the cut off time. One morning I looked and I thought I had missed the bus entirely because the next one was ten minutes away on my phone. However, instead of just trudging off, I looked up, and a bus was right there!

    I got on the bus and it was completely empty! Not a soul was on the bus. While it was a nice day, usually this bus line was crowded during rush hour, often so crowded that I don’t even bother getting on because I have to stand right in the front past the yellow line where you aren’t supposed to stand and then get on and off with every stop (to let people on and off) until the crowd thins out.

    The driver was totally bewildered too. I sat with her up front and I guess they had changed the bus she was driving to this route (from another route) and they hadn’t updated bus tracker. I said that because she didn’t show up on my bus tracker. Thus no one was on the bus – because if it wasn’t on bus tracker, it didn’t exist.

    I am sure that the River North area is one of the most technologically sophisticated areas of the city and probably in other parts of town people just wait at the bus stop for the bus to show up. But in River North – everyone has been trained to use bus tracker and rely on it and they wouldn’t contemplate a bus existing that wasn’t on bus tracker.

    For me, the bus tracker has made the Chicago bus go from something marginally useful to a highly useful way to get around town. When I lived in Bucktown we used to wait for the #50 Damen bus and 3 of 4 times we’d give up and grab a cab after waiting 15-20 minutes and the 4th time 2-3 buses would show up in a big bunch full of angry riders. If you took the bus you weren’t happy about it; it was an unreliable and slow way to get around.

    However, bus tracker is very reliable and now you have visibility of what is coming and you can plan ahead so that you are whiling away your day standing outside in the rain or snow waiting in vain for a bus that seems like it will never come. I don’t have statistics but I would bet that bus tracker increases utilization of assets for the CTA and has become a known and reliable method of transportation for those that give it a chance.

    Cross posted at LITGM

    Posted in Business, Chicagoania, Customer Service, Tech, Transportation | 24 Comments »

    A Brave Author

    Posted by Carl from Chicago on 29th March 2015 (All posts by )

    I remember reading an article a long time ago about advice that an experienced journalist gave a new writer in the newsroom. He said to “never write anything bad about cats” because the paper would be bombarded with letters from irate cat owners in response.

    I thought of this as I read a NYT article titled “Pregnant, Obese and in Danger” by Claire Putnam (a doctor at a Kaiser Permanente hospital). From the article:

    One recent night on my delivery shift, 8 out of 10 of my laboring patients were too heavy, with 2 weighing over 300 pounds… obese pregnant patients are more likely to have elevated blood pressure, gestational diabetes and babies with birth complications. The are more likely to need cesareans. And the are more likely to have serious complications from the surgery, such as infections, hernias, or life-threatening bleeding.

    An extended family member of mine was a medical EMT and he mentioned how many of his co-workers were hurt while moving and assisting the obese and morbidly obese. This doctor agrees.

    In the last year alone, three of the doctors I work with have been significantly injured while treating severely obese women. One even dislocated his shoulder while performing a cesarean on a 400-pound patient.

    This author is incredibly brave because I can only imagine the vitriol that this sort of analysis will generate in the comments and on social media. They will say that you are making fun of women for whom their weight is out of their control! You are contributing to negative body image in the media!

    The story of the negative impact on health care workers of the obese and the extra costs on society should be factually driven and discussed openly. In the same way that the addicts in Drugs, Inc pose huge challenges on the system through their lifestyle choices (which are universally panned, unlike the obese), these sorts of behaviors should be questioned as well.

    Cross posted at LITGM

    Posted in Medicine | 12 Comments »