Chicago Boyz

                 
 
 
 

Recommended Photo Store
What Are Chicago Boyz Readers Reading? Click here to find out.
 
Make your Amazon purchases though this banner to support this blog:
 
  •   Problem? Question?
  •   Contact Contributors:
  •   Please send any comments or suggestions about America 3.0 to:

  • CB Twitter Feed
  • Lex's Tweets
  • Jonathan's Tweets
  • Blog Posts (RSS 2.0)
  • Blog Posts (Atom 0.3)
  • Incoming Links
  • Recent Comments

    • Loading...
  • Authors

  • Notable Discussions

  • Recent Posts

  • Blogroll

  • Categories

  • Archives

  • Author Archive

    The Restaurant and Bar Business

    Posted by Carl from Chicago on 27th September 2014 (All posts by )

    I am far from an expert on the Restaurant and Bar Business segments but as a long time resident of Chicago in various areas packed with these establishments from Wrigleyville to Bucktown to River North I am at least a frequent regular qualified to throw my 2 cents in. I hadn’t thought too much about the economics of this until I talked to a friend who recently opened two great pizza places where he is the owner about what you get when you buy a used restaurant.

    You get nothing… you have to re-model and start over the food concept. And when you sell, the next guy does the same.

    What makes a good restaurant as a business? There are a lot of variables and I am only speculating, but certainly timing and location are key elements. For instance you have the Twisted Spoke, a bar on Grand Avenue in what used to be a pretty sketchy part of town that is rapidly gentrifying, and they have the iconic “skeleton on a motorcycle” on permanent rotation in front. This bar has survived for a long time with a mix of hipster / biker cool, an astoundingly good drink / beer mix, and surprisingly good food and interesting / witty / iconic employees. I’d bet that back in the day this place was actually full of bikers but nowadays the crowd looked like the usual hipsters in plaid shirts. And don’t forget the enormous benefit of a rooftop – it astounds me how many bars / restaurants ignore the fact that Chicago people LOVE to sit outside during the few nice days that we receive every year and they drink like fish and eat until they can’t even move.

    Read the rest of this entry »

    Posted in Business, Chicagoania | 35 Comments »

    Sign of a New Peak for Stocks?

    Posted by Carl from Chicago on 20th September 2014 (All posts by )

    Back in the woeful years of the dot.com boom and bust I worked for a company with a dubious distinction. The value of that company in the stock market was less than the value of the cash we had on our books. What the market was essentially saying is that the sum total of all our efforts as employees was NEGATIVE – we would be worth more if we just shut down immediately and gave back the cash to investors. The fate of that company, of course, was to go bankrupt.

    Today there are some other major signs of froth in the market. Yahoo is a classic web / advertising / technology stock with a solid market capitalization of $40 billion. Yahoo’s CEO, Marissa Mayer, was a Google alumna and has been receiving a lot of press for her intelligence and drive to change the company, as well as her good looks.

    Screen Shot 2014-09-20 at 8.43.59 AM

    However, all is not as it seems.  The primary value for Yahoo isn’t its online advertising, email, or users – it is the stakes that they amassed in the hot Chinese e commerce company Alibaba (NYSE: BABA) and also Yahoo Japan.  In fact, the value of Yahoo is less than the value of these stakes, which are approximately $45B, partially due to the reason listed in this Bloomberg article:

    While the market value is large for Yahoo’s Asian assets, that doesn’t necessarily reflect the value available to investors and the company because of taxes, said Ben Schachter, an analyst at Macquarie Securities USA Inc. Yahoo, which would have made $8.3 billion by selling Alibaba shares at the IPO, only reaped around $5.1 billion after taxes.

    Taxes are ‘‘one of the big issues,” Schachter said.

    While it is true that $45B in investment value isn’t worth $45B because of the after-tax implications, it certainly implies that the market isn’t valuing Yahoo at very much at all.  It is also possible that the market thinks that Alibaba is over-valued at its current price of near $100 (after a huge run-up from its IPO price of $68, another huge sign of froth in the market) but the two stocks will generally track closely together now.  Yahoo is sort of a broken “tracking stock” for this value.
    Read the rest of this entry »

    Posted in Business, Economics & Finance | 7 Comments »

    Riot Fest Chicago 2014

    Posted by Carl from Chicago on 16th September 2014 (All posts by )

    Riot Fest in Chicago was held over three very cold and rainy / muddy days in Chicago’s Humboldt Park in September. I went with a friend on Friday which was cold, rainy, muddy and insane and on Sunday when the weather was nice (still cold) and the mud had somewhat hardened. Riot Fest is more of a fan-friendly (cheaper) Lollapalooza with a bigger dose of punk / emo bands and without any of the EDM flavor that you get from Lolla (and get on a massive scale elsewhere). It was also held in Humboldt Park which is relatively far afield for the more gentrified classes but actually is closer to where the younger fans of this music might actually live and work. For me, it was an opportunity to see some of the bands I like such as Social Distortion, Mastodon, Slayer, Primus, Weezer and the Afghan Whigs. Definitely skewing a bit older for certain.

    Here is Gwar! I wasn’t a huge fan of Gwar before seeing them live but they put on an awesome show that needs to be seen to be believed, where they kill a giant dinosaur and banter with the crowd in a completely disturbing manner. At one point they wanted everyone to put their heads down for a moment of silence (their former front man died recently) but then their deranged emcee said that everyone was looking down for a crack rock that the band had dropped since they couldn’t do this sort of stuff sober. They also sprayed everyone near the front with fake blood which is their trademark – many fans throughout the park for the rest of the day looked a bit sunburned from the residue of their pinkish hue thanks to Gwar.

    Riot Fest had great food and it was very reasonable. They had a Cevapcici stand where I had a great Serbian sausage for about $7 and all kinds of different items, not just the usual “festival” type stuff. Fortunately they set up most of these stands on the roads that curve through the park so they didn’t sink into the mud.
    Read the rest of this entry »

    Posted in Chicagoania, Music | 6 Comments »

    Massive Disruption to the Cable Industry Coming – Part II

    Posted by Carl from Chicago on 9th September 2014 (All posts by )

    Recently I wrote about the impact to the cable industry that is coming in the form of Microwave Fixed Wireless here.

    While on vacation in Door County I noticed a small store front office in Bailey’s Harbor for Door County Broadband. The first thing I thought of is how would a company like this operate out of a small storefront with just one truck (parked outside)? Then I realized that this firm is the local upstart providing Microwave Fixed Wireless against the incumbent phone / cable company in that region, Frontier. Unlike the local phone / cable company (who really are one and the same nowadays), you can run a microwave fixed wireless broadband company with few employees because you don’t have to pay for all the same physical infrastructure (telecom poles, physical connections) when you are doing a wireless model; you just need to 1) get the physical infrastructure (towers) in place and then 2) hook up the dish in the homes and point it at the tower. This model needs far fewer “boots on the ground” than the traditional model.

    While researching this further, I came across this document called

    America’s Broadband Heroes:
    Fixed Wireless Broadband Providers
    Delivering Broadband to Unserved and Underserved Americans

    This document is clearly biased in favor of the upstart fixed wireless providers, but has many interesting and sourced facts about the industry and is highly recommended reading.

    While wireline and mobile wireless carriers focus on regulatory gaming and manipulation of the Universal Service Fund to benefit their bottom lines, many Americans are left without access to broadband services because they reside in places that are deemed to be unprofitable by traditional carriers. Even more Americans have substandard or overpriced broadband access and no alternatives for obtaining better service because of the lack of competition in the broadband market. It is clear that the current system is broken, and the absence of competition, abuse of USF and the lack of access to critical network facilities for competitive entrants puts our nation into a position of disadvantage compared to other OECD countries.
    Read the rest of this entry »

    Posted in Big Government, Business, Economics & Finance | 10 Comments »

    Lazy Sunday – And Paperbacks As Early Web Pages

    Posted by Carl from Chicago on 2nd September 2014 (All posts by )

    While on vacation I stumbled across a bookstore with new and used books.  There are so few bookstores nowadays that I went inside and they had an excellent selection of bestsellers and obscure choices.  I paid for my purchase and, on the way out, noticed a big box full of the Ballantine’s Illustrated History books that originally retailed for $1 (I have some that must have come from England because they were one pound) and had to select a few for lazy Sunday reading.

    These books come from a series and I have read many of them over the years.  I picked up the Barbarossa 1941 book and it appears to be one of the first titles written by John Keegan, the famous author of “The Face of Battle” and many other works.  For such a small book it is able to distill the essence of that fateful year with great maps, photos, pithy text, and diagrams.

    Certainly not all of these books hit that high mark; but many are fantastic.  Since they use every inch of the paperback for superb graphics and well placed text, to some extent they should be considered a work of art.

    I looked a bit and Ian Ballantine was a visionary; on Wikipedia they mention that he was one of the first businesspeople to realize the power of the paperback book and how it could open the world to so many more readers.  He produced the first softcover of “The Lord of the Rings” and helped to popularize modern science fiction.
    Read the rest of this entry »

    Posted in History, Internet | 10 Comments »

    Massive Disruption To The Cable Industry Coming

    Posted by Carl from Chicago on 28th August 2014 (All posts by )

    Things that are often obvious in hindsight don’t seem so clear at the time. For instance I didn’t understand why anyone would want to send around a PDF file when you had Microsoft Word. And it wasn’t obvious to me that mobile phones would completely displace land lines.

    We are about to see something similar happen to the cable industry, which is at its oligopolist apex right now.  I don’t know when or how long it will take to have an effect, but in the end I believe that the outcome will be significant.

    MICROWAVE FIXED WIRELESS

    For large condominium buildings in Chicago, it is now the norm, not the exception, to go with Microwave Fixed Wireless for internet in the building, rather than fiber. Here is one company (I just found them on the internet, don’t know anything about them) that attempts to describe the benefits:

    Telephone and cable companies have been positioning fiber optics as the ultimate internet technology for some time, but the truth is that fiber has some inherent disadvantages that have been addressed by wireless microwave-based internet solutions. Experts across the globe are starting to acknowledge what the engineers at JAB Broadband have long been touting: microwave is a faster, lower latency, lower cost alternative to fiber and you don’t have to wait until someone decides to light up your building.

    Not to be confused with the appliance you use for heating your leftovers, microwave wireless networks transmit and receive radio signals through the air enabling high-speed data transmission with very limited latency. Benefits include:

    Limited infrastructure required on site
    Faster speeds because data travels over a direct path (point-to-point)
    Low logistical and operation costs
    Expanded availability
    Low latency

    There are many companies in Chicago that provide this service for condominium buildings and businesses. You need to have a rooftop with line of sight access to a provider and you put a dish on the roof. This dish connects to the main network of the building and is distributed just like internet service that you’d receive from a standard fiber optics provider (such as a cable company). The traditional downside of microwave transmission was unreliability – if the line of sight was obscured by heavy rain, for instance, then you don’t receive any signal. This happens today with DirectTV if the weather is bad – you receive the “all or part of this program did not record” message when you pull it up on your DVR (or it is jumpy and impossible to watch if you are looking at “live” programming). Note that DirectTV has a much more complex problem to fix with its satellites than a condo building does in Chicago because their satellites are in orbit rather than nearby with simple line of sight needs, so these problems are conceptually similar but actually very different in terms of difficulty to solve.

    The reliability issue has mostly been solved and barring catastrophic weather, your point to point wireless internet is as reliable as fiber brought into your building. Don’t forget that fiber, too, can be cut by local construction crews and other means and is also susceptible to failures of various sorts.

    Once you cut over to Fixed Wireless (microwave transmission), you have effectively moved out of the cable orbit as far as internet service.  Many facilities offer 10 meg, 50 meg, and even 100 meg connections for each condo unit, which means that the provider needs to bring that speed times the number of units with some overall reduction since everyone won’t be using the full internet all the time.
    Read the rest of this entry »

    Posted in Business, Chicagoania | 10 Comments »

    Head in the Sand on Dams and Hydropower

    Posted by Carl from Chicago on 24th August 2014 (All posts by )

    The popular (untrue) image of the ostrich as a bird that puts its head in the sand came to mind as a I read a recent NY Times article titled “Large Dams Just Aren’t Worth the Cost“. This article describes the usual culprits that plague dam construction:

    1. Cost overruns
    2. Dams take much longer to construct than originally planned
    3. Dams displace local residents (many in impoverished third world countries) who rarely thrive in their new locations
    4. Dams that are paid for with foreign loans (for many years the World Bank provided funding) often do poorly because the dam revenues come back in local currency and the loans are denominated in dollars; thus even if they hit their “nominal” returns, they don’t reach their “planned” returns when adjusted for currency depreciation

    These are all true objections to dam construction. However, these same criteria can be applied to virtually any energy construction project, from coal plants to nuclear plants to major LNG efforts.

    One key point that the article completely misses is that dams don’t require spending for “fuel” once they are up and running, and often it is fuel and distribution of fuel that bankrupt energy companies in the third world. The dam requires rain / water to generate power, and if this changes significantly, it can change the amount of power provided, but this is still generally better than “nothing”.

    There simply would not be electricity in many areas of the third world without hydropower, and the choice really isn’t between other alternatives and dams, it is a choice between power and no power. Once a dam is built they often can be run with a few individuals and if there are major problems you can bring someone in to fix them. You don’t need to find coal or fuel oil (which moves in price and is denominated in dollars that the country often doesn’t have). On the other hand, complex machinery and distribution systems can’t be left in the hands of areas with revolutionary governments and broken economies because in short order they are often taken apart and destroyed.

    Read the rest of this entry »

    Posted in Economics & Finance, Energy & Power Generation, United Nations | 23 Comments »

    Florence, Italy – Il Duomo

    Posted by Carl from Chicago on 18th August 2014 (All posts by )

    In April I travelled to Italy. We landed and took off from Florence. I was astonished by the beauty and cleanliness of Florence, at least in the places we visited near downtown and in the hills above the city.

    While in Florence the size and scale of Il Duomo is staggering. I recommend reading in detail about the construction of this amazing cathedral since it took centuries and was extremely complicated and advanced for its time.

    Read the rest of this entry »

    Posted in Europe, Photos | 9 Comments »

    Investing Related Items

    Posted by Carl from Chicago on 3rd August 2014 (All posts by )

    Over at Trust Funds for Kids I’ve been updating the portfolios and researching relevant topics for detailed analysis.

    One interesting item to me is ADR’s or American Depository Receipts, which represent foreign stocks trading in US markets. “Sponsored” ADR’s trade on NYSE and NASDAQ and “unsponsored” ones trade on the OTC or “pink sheet” markets. Recently one of my stocks (Siemens) went from a sponsored to non-sponsored ADR status and I started researching it here.

    I also researched the impact of currency moves on a portfolio, focusing on the Australian dollar vs. the US dollar and its effect on a particular Australian Bank Westpac. It is interesting to view the two elements in an intertwined fashion, since the US dollar was a poor performer over the last 5 years relative to many other currencies.

    Finally I look a bit at performance over the last year and marvel about how easy it is to assess performance these days with free graphing and overlay tools, compared to the manual effort in past years’. It still is difficult to always properly factor in dividends and the timing of cash flows (investments), but that’s a different story.

    Cross posted at LITGM

    Posted in Business, Investment Journal | 5 Comments »

    Indonesia’s New President is a Fan of Metal

    Posted by Carl from Chicago on 26th July 2014 (All posts by )

    I’ve had a long relationship with heavy metal. I remember being a kid for a show at the Aragon Ballroom back in 1986 – I think it was Yngwie Malmsteen (who is often known as Yngwie “F@cking” Malmsteen for his reputation as being a jerk) and we waited outside all day for a general admission show. At that time the Uptown neighborhood was dangerous and populated at all hours by drunks and bums. Some of the more clever fans had stolen lawn chairs along the way so they’d have something to sit on during the long hours of waiting. We watched the minutes click by oh so slowly at a big bank across the street. And of course everyone in line was drinking or smoking or doing something else to pass the time. Many people passed out not once but twice in line, shook themselves off, and went back to what they were doing (one guy in a big mud puddle). Later a kid had a limo drop him off in front of the venue and walked out towards the line. That was a big mistake as the entire crowd was jeering him as one. A few homeless people came by asking for change and someone had the idea to toss a quarter at them and soon the whole line was hurling their change in a shower. Towards the end they installed barricades to segment the crowd so that the entire line of a couple thousand people wouldn’t all surge forward at once when they began letting people into the venue. At that point you were penned in like veal in a cage packed next to other leather jacketed rowdy and drunk fans. The grizzled Chicago street cops eyed the crowd with disdain… you could tell that if they had their way this whole bunch of bums and idiots would get taken into custody…

    Over the years I don’t go to as many metal shows as I used to and won’t spend all day in line, obviously. But I still feel affection towards the music and the no-compromise attitude of those that have stuck with it regardless of the fact that it gets no radio airplay, little iTunes action, and is on the fringes of the “general” entertainment landscape. Of all the genres of music, metal can live on because it doesn’t need any of these things, just fans who are dedicated, and these fans revel in the fact that they are outsiders.

    Indonesia just elected a new president, a “man of the people” named Joko Widodo who took on the establishment tied to the former dictator. I am astonished to see that he is apparently a fan of metal, and even a fan of bands like Lamb of God, whom Dan saw recently in Madison and described their show as “insane and sonic”. All of this comes from this Noisey article (Noisey is part of the awesome Vice media empire). It is unthinkable that a US presidential candidate would ever admit to being a fan of metal, especially the non-cartoony metal bands like Lamb of God. Lyrics are NSFW (if you can understand them). Here is a clip

    Cross posted at LITGM

    Posted in Music, Personal Narrative | 2 Comments »

    High Rise Construction Views – And Taking Down A Crane

    Posted by Carl from Chicago on 21st July 2014 (All posts by )

    In River North, during the many years we’ve lived here, the skyline has been transformed with the addition of new high-rise buildings. Construction slowed after the 2008-9 crash, but is back now with a vengeance. A new apartment building is being built near my condominium. This is a view of the building while the construction workers were pouring concrete on the roof (you can see the concrete pouring arm) the same night of the “Derecho” storm which hit Chicago at the end of June.

    I’ve always wondered how they take down the crane and we got a chance to see it up close and personal. The process took all weekend, and they closed down a nearby street on Saturday and Sunday while they dismantled the crane. They put the metal “box” (it is steel colored) with three sides around a vertical crane “segment” and then the crane pulls that segment out through the gap. You can see the crane holding the segment if you look closely – which it then lowers to the ground.

    Read the rest of this entry »

    Posted in Chicagoania, Real Estate | 2 Comments »

    Adding to Illinois’ Debacle

    Posted by Carl from Chicago on 17th July 2014 (All posts by )

    This billboard is in my River North neighborhood in Chicago. It is an advertisement for a mall and entertainment location in Rosemont, a small city near O’Hare airport.

    Rosemont was profiled by the Chicago Tribune in this excellent article. A single family has run Rosemont for generations, and they benefit from a levy on taxi rides from O’Hare and spend this money on no-bid contracts for friends, family and politicians as well as large entertainment complexes underwritten by large amounts of debt.

    The suburb is digging itself deeper into debt to subsidize a new bar district, professional softball stadium and outlet mall. With $370 million in taxpayer-backed loans outstanding, Rosemont has one of the top debt loads in the Chicago region.

    Another Chicago suburb, Bridgeview, hosts a stadium for the Chicago Fire, a major-league soccer team. Their debacle is chronicled here, in a typically great Bloomberg article.

    The mayor of Bridgeview, Illinois, said building a taxpayer-financed arena for the billionaire owner of Major League Soccer’s Chicago Fire would bring hotels and restaurants to his suburb. Instead, the town has more than doubled property taxes and may raise them again to pay more than $200 million in stadium debt.

    One of the big problems in Illinois is that we have so many various overlapping public bodies, many with the ability to issue debt and all of whom have expensive board members, employees, and often public contracts doled out to associated cronies. This article, from the “Illinois Policy” web site, describes the myriad overlapping public entities in the State of Illinois and how we dwarf ALL states and especially neighboring (and much better managed) states like Indiana.

    Illinoisans suffer from the second-highest property tax rates in the nation.

    Their state is the third most corrupt in the nation.

    And driving this expensive and corrupt reality on the local level is the fact that Illinois has more units of local government than any other state in the nation. With 6,963 units of local government, Illinois beats its nearest competitor by more than 1,800.

    When Illinois finally hits the wall, and we won’t be able to issue new debt (and thus an immediate fiscal crisis will occur), we will have to have a reckoning with all of these various entities, each of whom has their own debt problems and the ability to create NEW problems by issuing MORE debt. On one hand, the market will constrain their ability to sell debt by the fact that these insolvent entities survive through the “implied” promise that they will be bailed out by some higher power, whether that is a county, state, or Federal government.

    The act of unwinding all of the problems of the inter-related corrupt and insolvent entities will be a herculean task, made even more difficult by the fact that there will be little incentive for the politicians to solve the crisis if the end result is that they won’t have these same public entities for no-bid contracts, jobs for themselves, and their campaign workers and donors once the clean-up is complete.
    The only thing for certain is that the lawyers in the state will feast at the trough of lawsuits from all parties. They just need to make sure that they find a way to get paid themselves on a timely basis…

    Cross posted at LITGM

    Posted in America 3.0, Big Government, Chicagoania, Illinois Politics | 11 Comments »

    Incentives and Economics

    Posted by Carl from Chicago on 14th July 2014 (All posts by )

    A few years ago I went to Norway and had a great time. In this post I described how expensive everything was in Norway due to their highly valued currency (tied to oil riches) combined with the relentless decline of the US dollar (tied to ZIRP and other dubious economic moves). In the simplest terms, a fast food meal or a beer in Norway cost over $20 USD which is complete madness.

    Business Insider discussed the Scandinavian economic experiment, where high taxes are applied to goods and services in order to fund a vast social safety net. From the article:

    In Norway, a burger and fries at a fast food joint will set you back $23. A six-pack of warm grocery-store beer is nearly $30.
    These hefty price tags are due, in part, to high wages for low-skilled service jobs. But high taxes play a role too.
    Most products have a 25 percent value-added tax, which means that $5.50 of the cost of that burger goes to fund Norway’s generous social programs.
    As a visitor, you get little for the added price. But, as a resident, your daily spending helps to fund an expansive package of benefits, including health care, child care, high-quality education, pensions, and unemployment insurance.

    Some are now proposing this high-cost method, with large taxes embedded in everyday prices, as a solution to the inequity in incomes and wealth that is discussed widely in politics and economics today.

    From the perspective of someone who is highly interested in economics and tax policy, my two rules of thumb are:
    1) that the tax policy raise the money that it intends to raise
    2) that the tax policy not significantly distort economic activity

    Any society that implements high taxes such as Norway needs a comprehensive surveillance model in order to collect these taxes. It is difficult to avoid taxes that are broadly assessed on fast food, for instance, because each corporate location will set up cash registers and controls to remit these taxes onto the state. The same types of processes can be installed in liquor stores, formal bars and nightclubs, grocery stores, and restaurants.

    In a less-homogeneous society such as the USA, we already have major problems with tax evasion on cigarettes and likely liquor, and these are in responses to our sales taxes. The problems would be compounded if we placed value added taxes on all goods at a higher level and on services such as restaurants, hair care, etc… Smuggling would become rampant and informal or barter methodologies would increase in size and scope. These sorts of costs would have to be applied across the USA or some areas would become uncompetitive and see an out-migration of economic activity, starting with incremental additions (no one has opened a new manufacturing plant in Illinois in years, for instance) and eventually leading to the lock, stock and barrel out migration of existing industries (such as the exodus of car manufacturing out of the Midwest and California to the American South).

    Read the rest of this entry »

    Posted in Big Government, Economics & Finance, Public Finance, Taxes | 33 Comments »

    Parrot AR.Drone 2.0

    Posted by Carl from Chicago on 21st June 2014 (All posts by )

    Recently I had a chance to operate a Parrot AR.Drone 2.0. The drone is a “quad” helicopter with four rotors that you can control through your iPad. I was extremely impressed with the technology and had a lot of fun operating the drone. Below is a photo of the drone in flight.

    And below is a picture of the drone at rest. The “bumpers” that protect the rotors are not being used because we are operating the drone outside free of obstructions.

    The drone represents a remarkable confluence of various technological capabilities into a small and cost efficient package. The drone has its own wi-fi network that you use to connect your iPad to the device. Thus you are basically leveraging wi-fi to provide a network and this is a likely range limitation on the helicopter, although due to other more pragmatic concerns this is not as significant a problem as it may appear (the craft does not do well in modest or high winds, and only has about 12 minutes of battery time so long range flight is effectively infeasible).

    By using your iPad as a control, the manufacturing and costs of the quad helicopter have dramatically been reduced. You do not need a dedicated device with unique controls to master – simply load software onto your iPad and you are off and running. You are also able to easily upgrade the controlling software on your device (just like updating an app) as well as update the quad helicopter itself via that same method.
    Read the rest of this entry »

    Posted in Diversions, Tech | 2 Comments »

    My Books and the End of My Printed Books

    Posted by Carl from Chicago on 7th June 2014 (All posts by )

    An important event in my household is the spring planting of everything that is going into our garden on the balcony of our condo. They are grown inside under a grow light (mostly, except for items like lettuce and carrots) and then they get put outside.

    The tomato plants grow by leaps and bounds! So what is used every day to keep up with their vigor? Why my old books, of course.

    There you can see the usual suspects on my nightstand… some WW2 (Van Der Vat is a great author), of course America 3.0 by our good friend Michael Lotus, and “Africa’s World War” on the Congo. Then you have a couple of architecture books and finance books like the classsic “The Myth of the Rational Market”.

    I’ve switched over (mostly) to the kindle now and haven’t been buying new books in hardcover. I bought a book on New Yorker cartoons in hardcover since I figured that would be the type of coffee table book that people might actually pick up and look at. I also might buy an occasional architecture or infographic book in softcover or used, as well. But that’s about it.
    Read the rest of this entry »

    Posted in Blogging, Book Notes, Business | 18 Comments »

    I Give Advice… And They Don’t Take It

    Posted by Carl from Chicago on 1st June 2014 (All posts by )

    For many years I worked as a consultant across a variety of industries. While there are many ways to describe the type of work I did, my favorite (when talking to a teenager or child) was

    I give advice, and they don’t take it

    This article from Today’s NY Times titled “Why You Hate Work” provided a pithy antecdote that summarized this situation:

    Several years ago, we did a pilot program with 150 accountants in the middle of their firm’s busy tax season. Historically, employees work extremely long hours during these demanding periods, and are measured and evaluated based on how many hours they put in.

    Recognizing the value of intermittent rest, we persuaded this firm to allow one group of accountants to work in a different way — alternating highly focused and uninterrupted 90-minute periods of work with 10-to-15-minute breaks in between, and a full one-hour break in the late afternoon, when our tendency to fall into a slump is higher. Our pilot group of employees was also permitted to leave as soon as they had accomplished a designated amount of work.

    With higher focus, these employees ended up getting more work done in less time, left work earlier in the evenings than the rest of their colleagues, and reported a much less stressful overall experience during the busy season. Their turnover rate was far lower than that of employees in the rest of the firm. Senior leaders were aware of the results, but the firm didn’t ultimately change any of its practices. “We just don’t know any other way to measure them, except by their hours,” one leader told us. Recently, we got a call from the same firm. “Could you come back?” one of the partners asked. “Our people are still getting burned out during tax season.”

    This brief example has it all:
    1) the client has diagnosed the situation (people are getting burned out and quit)
    2) the consulting firm develops an alternative course of action
    3) the pilot was successful
    4) the client disregards the recommendation (over some period of time) and is back where they started

    While there are many jokes about consultants such as “they borrow your watch and tell you the time” it is important to note that every consultant needs a client and the clients are the “root” of the problem. Why commission a study if you don’t intend to follow through on the results?

    Lots of reasons. For starters – the act of “trying to do something” or “conducting an analysis” buys time and inaction, which is a precious commodity at most companies. It is very difficult to get something done, and it is even MORE difficult to get something done when an alternative hypothesis is under way (such as a consulting effort). In the end, usually the client knows how to solve the underlying problem, but the effort that it would take and the corresponding rewards to those managers tasked with carrying out the solution is too meager to justify the organizational resistance that will occur.

    All of these organizational problems are compounded by short-term thinking; executives want results NOW, this quarter, not improved performance 2-3 years down the road. They may talk about the long term, but the short term consumes 90% of their waking hours, and the next quarterly earnings release. Changing a culture or implementing a wrenching solution that differs from the status quo 1) is hard 2) takes time 3) is met with systemic and subtle resistance at every turn. The final bullet in change internally are external events; even if you can somehow make progress against your current ills, a “new” external shock will take away the focus and organizational oxygen from YOUR issue unless you can implement a rapid and permanent solution (i.e. close something down, sell it, “burn the ships”) before your organizational capital melts away.

    Here’s the part where someone often asks “what’s the solution?” and tries to summarize it all up. I don’t know. It is hard enough to figure out the long term arc of consulting, a multi billion dollar business, and how it survives jibes and efforts to extinguish it, without trying to think about how to make it better.

    Generally the types of corporations that rely on consultants to do their thinking for them don’t last long, unless they are somehow protected from competition (government, non-profit, unionized, utilities, much of financial services, etc…). It is these sorts of enterprise, along with the dying, that provide much of the consultants’ income. You don’t hear Google and Amazon or even GE talk about how consultants are helping them; they solve their own problems. I guess this is the underlying solution – be a better company.

    Cross posted at LITGM

    Posted in Business | 4 Comments »

    Baseball’s Chance to Come Back from the Dead

    Posted by Carl from Chicago on 25th May 2014 (All posts by )

    Baseball is dying. Usually I include a photo of a game with a post on baseball but I haven’t been to a single game yet in 2014, and the season if more than a quarter done. It is poor form to extrapolate from your own experience across the entire population but for the topic of baseball, I think it is appropriate.

    The buzz on baseball here in Chicago is zero. Absolutely zero. I don’t hear people talking about baseball, or even mentioning baseball.

    There are some semi-unique circumstances in Illinois tied to the fact that the Blackhawks are still in the playoffs and there is a lot of excitement about the Bears. On the other hand, NBA basketball suffered with the loss of Derrick Rose (again) and college football here is nothing compared to what you’d see in SEC country (Division Zero as Dan and I refer to it).

    Not only are the games for Chicago mostly terrible (the White Sox are more competitive than expected, and the Cubs’ fate is worse than expected, but neither are close to being contenders), the games usually seem to be very long and on late at night. When I check my mobile in the morning I can see the updates that I get every 3 innings and at the conclusion of the game and they often end after midnight, especially if the games are on the West Coast. There seems to be a lot of bad, slow moving, cold and night baseball being served. As a fan, that’s an awful concoction.

    Some good news for Chicago fans is that Mark Buehrle, a great former pitcher for the White Sox, is now tearing it up for the first place Toronto Blue Jays. He is 8-1 with a great ERA. He had a rough couple years with the disaster down in Miami but Toronto is doing well and so is he. I hope that he makes it to the Hall of Fame in the end, even if it isn’t with the White Sox.
    Read the rest of this entry »

    Posted in Sports | 17 Comments »

    Calling All Photographers…

    Posted by Carl from Chicago on 24th May 2014 (All posts by )

    I am looking for an online site to store and edit photos. I switched one of my main machines from PC to MAC but I still run a 50% PC environment at home and now I’ve given up with the share drive model and am considering the cloud.

    Google+ seems like a strong option. Today I use Picasa for photo editing (it’s free and works on MACS and PC’s) but I think Google is phasing it out and users are being encouraged to move to Google+ for photos. There is an app for IOS so they can be uploaded from phones and iPads too.

    There are other tools out there, too. I used to use Shutterfly but I don’t really like how hard it is to get your photos OUT of there. It is more for making books rather than just storing everything from all your sources.

    I also use Google for some other things like Blogger but don’t want to link the two. Blogger is also pretty crummy (we use at at LITGM) and probably at some point we will just move that over to hosted word press (which is awesome), but that’s a different (boring) story. I’d get another ID.

    Since many, many of the photographers here are probably in the same boat I am looking for advice. I know that the pros will always have photoshop on a hard drive so I am thinking more of the advice for amateurs like me ;)

    This WSJ article discusses photo storage and also likes Google+, but there are other contenders as well.

    Posted in Photos | 9 Comments »

    An Unmentioned Fact on the Crimea Situation

    Posted by Carl from Chicago on 16th May 2014 (All posts by )

    As someone who has studied WW2 history for over 40 years (on an amateur basis), as soon as the Crimean situation occurred I went over to my bookshelf and pulled out my favorite book that covered the Crimean campaign – “Stopped at Stalingrad” by Hayward. The book is highly recommended and covers air / ground coordination in that era and has an excellent overview of the ground campaign in the crucial 1942-3 time period.

    The scale of today’s troop movements and activities is so small relative to that era. Only a few thousand troops can decide an entire campaign. The days of millions of soldiers on all sides of the wire have been relegated to the past.

    While this volume focuses on the military aspects of the campaign in WW2, many other books talk about ideological motivations and logistics, notably the horrifying “The Wages of Destruction” by Tooze.

    The contrast between today’s situation and the “total warfare” that existed really from the end of WW1 and through the civil war in Russia as well as the horrors in the Ukraine in the 1930′s and then on both the German advance and Russian re-capturing of the various regions is very instructive on one key dimension – as Putin takes over Crimea, he actually intends to FEED the population.

    It is important to realize how poorly civilians have always been treated in these Eastern campaigns by all sides. To say that people were viewed as an afterthought is a giant understatement. Civilians were second to territory, resources (oil), or ideological objectives.

    Today by most accounts Putin realizes that he needs to actually administer the region and needs to take steps to build up morale, keep the economy functioning (on some level), and that this will be a financial burden on Russia. The days of just stripping off assets, turning locals into slave labor, and siphoning off any agricultural products (I am not just talking about “surplus”, I am talking about everything) are apparently past us. I am no fan of Putin and in no way want to appear to be in favor of his activities, but feel that this is a fact worth mentioning.

    By the abysmally low standards of twentieth century Eastern warfare, the Crimea incident likely had the least impact on civilians.

    Unfortunately the situation in Western Ukraine has the potential to be closer to a “typical” historical Eastern event with mass bloodshed, significant disruption to the economy and population, with civilians caught in the middle and having their needs ignored.

    Cross posted at LITGM

    Posted in Russia | 28 Comments »

    Glassware Synergy

    Posted by Carl from Chicago on 21st April 2014 (All posts by )

    Dan and I often go back and forth with awesome (or awesomely awful, such as a great beer in a Coors Light cup) glassware synergy. Recently I was in Brooklyn, New York and found two great examples.

    This glass is from a “Kolsch” beer. The guy next to me at the bar started telling a story that in Germany, Kolsch is barely even considered beer, and you have to put your coaster atop your glass else they will just keep filling it indefinitely. Funny I was able to “authenticate” that story on the ol’ intertubes here. I really like that Kolsch beer and would be glad to find somewhere around Chicago that has it on tap; I also really dig getting Kronenbourg 1664 on tap, as well (a French beer).

    The second is from Ommegang Abbey Ale. I took the photo from my mobile so it isn’t perfect on the logo but you can definitely make out the dancing monks.

    Cross posted at LITGM

    Posted in Diversions, Photos | 2 Comments »

    Bohemian Hall in Queens

    Posted by Carl from Chicago on 19th April 2014 (All posts by )

    Over the years I’ve traveled to New York City many times but never the borough of Queens. In your head you have a mental picture of the NYC map as if Queens has a “hard” border but really it is just attached to Long Island which goes out to the East.

    We met a friend in Queens and went to Bohemian Hall which is one of the best beer gardens in New York City. It is over 100 years old and was built by immigrants from Eastern Europe. We went straight outside since it was a beautiful day in 70 degree weather (one of the first nice days of the year in mid April) so I didn’t see the interior of the building.

    It opened at noon and soon was full of young and trendy new York types – not the downtown all-in-black types, but the borough crowd that was forced out by incredibly high costs and also those with young children. We saw a lot of strollers and kids running around, it sort of reminded me of Wicker Park over the last few years.
    Read the rest of this entry »

    Posted in Photos, Urban Issues | 10 Comments »

    On the Internet

    Posted by Carl from Chicago on 18th April 2014 (All posts by )

    Recently a few loose threads have come together on the Internet and some “old school” high tech companies.

    Yahoo! – Yahoo! (I guess I need the exclamation mark) has a value that is less than the sum of its component parts. The market capitalization of Yahoo! comes in the fact that it owns a significant portion of two Asian internet companies. Per this pithily titled article “How Is Yahoo So Worthless“:

    Yahoo is huge. It is the fourth-biggest Internet domain in the United States. It is the fourth-biggest seller of online ads in the country. It is the most popular destination for fantasy sports, controls one the most-trafficked home pages in news, and owns the eighth-most popular email client. In the last three months, it collected more than $1 billion in revenue. It’s very rich.

    It’s also totally worthless.

    Technically, it’s worse than worthless. Worthless means without worth. Worthless means $0.00. But Yahoo’s core business—mostly search and display advertising—is worth more like negative-$10 billion, according to Bloomberg View’s Matthew C. Klein.

    The math: Yahoo’s total market cap is $37 billion. Its 24 percent stake in Alibaba, the eBay of China, is worth an estimated $37 billion (Alibaba hasn’t IPO’d yet, so this figure will vary), and its 35 percent stake in Yahoo Japan is worth about $10 billion. That means its core business is valued around negative-$10 billion.

    This isn’t just a random business article; there is some actual financial science behind this analysis. At my trust fund site Yahoo! is one of the stocks I selected since I believe that their new CEO Marissa Meyer is a badass but according to the math she is still losing the battle.

    At one point in my career I worked for a public company that had $300M in cash on hand and a market value of $200M. Your business plan could be to fire everyone and drink in a bar all day and you’d be much closer to $300M than $200M (after all, how much can you drink). The market is anticipating that bad things are going to happen or that Yahoo! won’t be able to successfully sell and repatriate the cash for these investments. It is like that famous postcard my relatives in Montana had that said “If I won a million dollars I’d just keep ranching until it was all gone.” That is what the market today thinks of Yahoo! – even if they successfully extracted the cash from these investments, they’d invest it into something of less value (by $10B or so, apparently).
    Read the rest of this entry »

    Posted in Business, Economics & Finance, Tech | 16 Comments »

    The “Grand Budapest Hotel” and History

    Posted by Carl from Chicago on 30th March 2014 (All posts by )

    Today I watched the movie “The Grand Budapest Hotel” by Wes Anderson. While the movie was not intended to be an historical record, in some ways a fictionalized representation of life in the 1930′s and early 1940′s is a better way to humanize the elements of the conflict that can be lost broader sweep of the cataclysmic events known to all. The movie also works to include the postwar elements and even the post-communist years into a long a complicated narrative.

    After the movie was done I started explaining how I saw the movie to fellow movie-goers and, to them, I almost seemed like the narrator that the movie didn’t include. I just overlaid my own understanding of the participants in that era and, since it is fiction, my own interpretation is likely as sound as anyone else’s.

    I will try to limit the “spoilers” in this post and recommend that anyone interested in Zweig (to whom the movie was dedicated) and / or that era in history go to see the movie. You have to be a fan of the Wes Anderson style of movies and his set pieces are clearly not supposed to be realistic but they are tools for great visual cues and inspired situations.

    The protagonist in the movie, Ray Fiennes, plays a concierge for a major hotel in the capital city of a declining empire in the 1930′s as war time approaches. He mainly seduces older women but also is open to other sorts of encounters with men. Ray is plainly an intellectual and stickler for protocol and process in an era where that is reaching the end of the line. He and his fellow concierges represent the type of society that Zweig would fondly recognize (as does the process-following attorney who runs into serious trouble later).

    The country could be an Austria or Czech type republic that is about to be swallowed by Germany. The borders are in the process of being closed to adjacent countries due to political challenges and incipient war. In an early scene, soldiers in grey accost and check the papers of the concierge and his “lobby boy” (who is non-white and obviously from one of the provinces) on a train and start to beat them up when they are stopped by Edward Norton, who plays an aristocratic officer who recognizes the concierge. To me this officer clearly represented the orderly and (relatively) law abiding German army. He even wrote a note giving safe passage to the lobby boy.

    In the early scenes the soldiers are in Grey and when they stop the train their have early model armored cars. They are not intended to be realistic per se but they seem like vintage 1930 era inspired vehicles.

    During the contesting of the will, a lawyer who also represents the old era brings a process and fairness to the executor’s role (along with a Kafka-esque level of bureaucratic documents) until he meets up with a thug in a black trench coat who clearly represents the evolving SS. That individual, played by Willem Defoe, engages in more and more grotesque crimes throughout the movie and is not impeded by morals or the rule of law. At one point the Edward Norton character orders the civilian Dafoe away from an investigation that Norton is running, but it is clear that Dafoe is not intimidated and is part of the (hyper violent and aggressive) new order.

    Later the protagonist against the concierge is seen to be in a long leather coat and is obviously a civilian leader of the Nazis. They have 2 letter flags and armbands in the SS “style” but the movie does abstract them so as to not be completely blatant. The hotel becomes a barracks for the military regime, and the standards of the staff decline as the hotel is militarized.

    When the train is stopped again later in the film the “death squads” are taunted by the concierge with results that are far less pleasant than the early encounter with Norton. The soldiers in black and the more sinister looking hulking vehicles (which seem to be gun mounted half tracks) are also in black and this clearly represents the SS militarized and not the old nobility-led military.
    Read the rest of this entry »

    Posted in Europe, Film, Germany, History | 4 Comments »

    Your English Major Kids May End Up Serving Tables In Chicago

    Posted by Carl from Chicago on 8th March 2014 (All posts by )

    I live in the River North area of Chicago, which is full of restaurants of every type and description. There is also intense competition among many of the smaller restaurant groups, since apparently some level of scale (5+ or more restaurants) is helpful and these restaurants tend to have very high levels of food quality and service, based on my experience.

    When you interact with the bar staff, hostess, and server you can usually tell if you are working with someone who is “going through the motions” or someone “who is good at their job”. There are many subtle details that are much larger than “getting your order right” – they include knowledge about the food and presentation, recommendations based upon your input, and generally anticipating needs and solving problems without having to be prompted many times.

    Recently I’ve come to the preliminary conclusion that many of the waitresses and servers in these higher end restaurant groups must have gone to college and are well educated. When you talk with them they are very sharp and quick and they seem to have the type of drive or energy that could make them successful in a variety of careers. I would never ask them directly because that’s none of my business and it could embarrass them.

    This article form Bloomberg titled “College Graduates Taking Low Wage Jobs Displace Less Educated” confirms at least my anecdotal impressions here in Chicago.

    She got a job as a hostess at Blackbird, a One Off restaurant, while pursuing a bachelor’s degree in Germanic studies and communications at the University of Illinois at Chicago in 1999. “The formality of classes, papers and grades did lend a hand in where I am today because I had a broader sense of cultures, interactions and interpersonal skills,” said Galban, who is now also a partner at the restaurant Nico Osteria, one of seven Chicago restaurants managed by One Off. Of the company’s more than 700 employees, more than 60 percent hold college degrees or higher, yet fewer than 10 positions require a degree, Galban said.

    The willingness of college educated adults to take on these jobs will likely cause at least three side effects, one of which was the “main” topic of the Bloomberg article I linked to above:

    1. These restaurants will be more competitive than typical restaurants, because the higher educated and higher skilled workers will drive customer satisfaction and drive efficiencies within the food and drink serving processes. As these workers move “up the chain” at the restaurants, they will also offer career paths for other college degree holders as well
    2. Less-skilled workers will have less opportunities because they won’t be able to compete with these individuals. It would be a simple “screen” to give preference to individuals with a degree who apply for jobs, even if it isn’t a requirement of the job. In the past the assumption was that if someone “over-qualified” would work at your restaurant or business, they would leave immediately when a new opportunity arises, but in today’s stagnant economy (especially in Illinois) there don’t seem to be a lot of opportunities for them to “jump to”.
    3. Since the cost of higher education is so high today, parents need to think of how they will feel when their liberal arts (or lackadaisical business) degree holding children are potentially serving them in a restaurant, and if this is worth the vast expense and financial impact of the degree that they are seeking

    Another side effect to consider is that these restaurants are not just randomly seeking out applicants from the pool. Their employees are not only young, they are disproportionally above-average looking. Perhaps if you aren’t college educated you can make up for it in attractiveness.

    Cross posted at LITGM

    Posted in Business, Chicagoania, Education | 17 Comments »

    In Another Era, She’d Be a Gigantic Star

    Posted by Carl from Chicago on 25th February 2014 (All posts by )

    At the Gene Siskel Film Center in Chicago they have a lot of great films. In addition to interesting and artistic films, I also enjoy the fact that they have very few previews and no commercials as well as the fact that you can buy a beer while you are watching a movie.

    Bettie Page Reveals All is a documentary about the iconic fashion / fetish model Bettie Page. For me, the most interesting facet of the movie was not discussed at all; what would have happened had Bettie Page been a modern celebrity instead of one who retired from public life in the late 1950s.

    When Bettie Page stopped doing photo shoots, she simply fell off the face of the earth. In those days it was easy to hide; records weren’t online, the web doesn’t provide a central place for people to (inadvertently) pool information, and it doesn’t take an instant to upload a stalker photo to twitter. She never provided any other photos after her shoots, so that’s how the world knows her today. As George said in Seinfeld, she “left on a high note”.

    Bettie Page, however, had actual skills and intelligence. In the documentary they showed her high school transcript and she barely missed being the valedictorian of her high school class which would have given her a college scholarship. Unlike modern “celebrities” who became famous solely due to a “s*x tape”, Bettie Page designed and sewed many of her own costumes. She also had a lot of personality and took control of the photo shoots and could (sort of) act. Compared to 99% of the “celebrities” today, she had talent.

    Alas, like many of the modern celebrities we wouldn’t name her because we don’t want the traffic, she was bi-polar and ended up spending several years in a mental institution after she stabbed her landlord in a psychotic episode. In the end her story had a semi-happy ending because Hugh Hefner found her a lawyer who got her royalties for all the various things being made with her iconic image on it so that she at least had some money in her retirement years.

    Cross posted at LITGM

    Posted in Biography | 6 Comments »