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    Tax Reform Impact – Capital Gains and Investment Income

    Posted by Carl from Chicago on 21st January 2018 (All posts by )

    Recently I was at Powell’s bookstore In Oregon when I came across this book which attempts to be an introduction to the complexities of taxation. I thought that this was in the spirit of what I was going to try to do as I start to review the 2017 Tax Reform act and its’ myriad impacts on the economy and individual incentives.

    As an individual investor, I started with looking at capital gains and investment income. Some thoughts:

    1. The same general split applies; long term gains are taxed at favorable (lower) rates, and short term gains are taxed as ordinary income. The ordinary income tax brackets are always higher than the capital gains brackets

    2. The tax rates for capital gains are 0, 15% and 20%. These are the same as under the previous tax laws.
    Here is a brief article from the Motley Fool

    3. The rates on ordinary income have gone down a bit, so the average person would pay less on gains, all else being equal (but this gets into your state and the standard deduction, a different topic). Thus there is no significant impact on investments here, it should be slightly favorable

    4. Although there was talk of changing the way stock sales are accounted for to limit “tax loss harvesting”, these changes did not occur. I believe that you can still deduct up to $3000 in losses against ordinary income, but I haven’t been able to find that yet to confirm either

    5. The 3.8% surtax on gains if your income is above $250,000 remains the same; this does not seem to be impacted by the law

    6. While there were changes throughout the code that impacted REITS (real estate limited trusts) and MLP’s (Master Limited Partnerships), these changes didn’t fundamentally impact their value to classes of high income investors (they still have favorable tax characteristics)

    7. There was some discussion of eliminating the Federal tax free nature of municipal bonds, but that deduction remained intact

    8. There also was some discussion of changing the 401(k) deductions; this too, remained intact

    Thus for investors, the basics of investing for individual investors (not the super wealthy) and the impact of taxation did not see significant changes under the new tax law. The types of tactics you would use under the prior tax law mostly moved into the new environment intact.

    Cross Posted at LITGM

    Posted in Taxes | 10 Comments »

    Disruption – MoviePass

    Posted by Carl from Chicago on 7th January 2018 (All posts by )

    MoviePass is a service that has gained a lot of new users lately – it allows you to see unlimited movies (only one a day) each month for $9.95, which is essentially the price of a single ticket. How it works is that they give you a Mastercard that is connected to your mobile phone – when you get to the theater, you connect with them at that time and they authorize the card specifically for the amount needed to pay for the movie and then you pay and go inside. The process is set up so that theaters can’t deny MoviePass at the box office because it is basically just another Mastercard and the only way to disable it would be to disable accept MasterCard, which is impractical or likely impossible for a host of reasons. The movie theaters receive the full price of the ticket through MoviePass, even if it is more than the $9.95 subscription fee (movies can cost almost $20 in Manhattan, for instance). In the short term, this is a “boon” for movie theaters because Wall Street investors are subsidizing their full price tickets.

    Here is a NYT article on the growth of MoviePass. Per the article, they are adding 1 million subscribers a month. The ostensible play (what they say) is that they plan to “break even” on the cost of the service (if you see roughly one movie / month) but then they will make their money on using data from customers in an aggregated fashion to sell to the movie studios for marketing and targeting. They believe that this data and targeting consumers can add 5-7% to the box office gross. Note that the guy who helped found MoviePass was an executive at Netflix and RedBox named Mitch Lowe and he is very sophisticated financially and connected so he is a serious rival to the movie industry in general.
    Read the rest of this entry »

    Posted in Economics & Finance, Tech | 6 Comments »

    Disruption – Amazon Basics and Amazon Essentials

    Posted by Carl from Chicago on 2nd January 2018 (All posts by )

    “Amazon Basics” is a line of low cost products created especially by Amazon. “Amazon Essentials” is an apparel line created by Amazon. This picture has a “basics” speaker and a low cost “essentials” product (the notebook):

    – a portable wireless bluetooth speaker for $19.99

    Essentials dot matrix notebook for bullet journal for $9.92

    I was impressed by both of these items. When you go to Amazon and either the basics or essentials section there is a wide array of products to choose from at amazingly low prices.

    Amazon is choosing which markets and products that they want to compete in directly and they offer what appears to be reasonable quality products at low price points. If you cycle through the product list you can see a lot of everyday products or items that don’t normally have a strong branding component.
    Read the rest of this entry »

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    Posted in Business, Tech | 21 Comments »

    Disruption – Delivery

    Posted by Carl from Chicago on 28th December 2017 (All posts by )

    Traditionally the big companies that handle “last mile” package delivery are Fed Ex (ticker: FDX), UPS (ticker: UPS), and of course the US postal service. These companies have hundreds of thousands of employees (often unionized) and billions of dollars of planes and trucks and other transportation assets.

    Amazon (ticker: AMZN) recently began expanding their transportation capabilities, both in the form of their own airplanes and leveraging an “Uber-like” workforce of contractors leveraging an app to deliver packages in their own cars with a program called “Amazon Flex“.

    Read the rest of this entry »

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    Posted in Economics & Finance, Tech | 17 Comments »

    Chromecast, Roku and Cutting the Cord (Potentially)

    Posted by Carl from Chicago on 26th December 2017 (All posts by )

    It’s Christmas time and we don’t have a fireplace in our high rise apartment. So what’s the next best thing? A video showing the Yule Log (there also is a Nick Offerman 45 minute one where he watches you and drinks whiskey and someone looped it for 10 hours, look it up on You Tube). This is playing through my Chromecast ($20) via Youtube and could be done through my Mac, iPad, or iPhone. And it looks great.

    We finally gave up on our old Samsung TV and bought a new 55 inch “smart” TV from TCL with Roku included. The sound quality is great I got rid of my front speaker and subwoofer when I took my old TV to Goodwill and don’t plan to buy a new one (maybe I will with Xmas gift cards). Once we connected it to our router I was surprised at how high quality the TV picture was and how fast it booted up. You can quickly go into either Roku or something like the Chromecast (below) or just turn on the cable box directly (we have xfinity). Right here at the intersection of huge amounts of online content, high bandwidth, and seamless performance you can see how cable dies (although cable provides our Internet service, but this is a parallel question).
    Read the rest of this entry »

    Posted in Tech | 12 Comments »

    Apple MacBook, Planned Obsolescence and AirPods

    Posted by Carl from Chicago on 23rd December 2017 (All posts by )

    Apple has been in the midst of a long term inter-operability / consolidation of its IOS and MacOS environments. When I first started using my MacBook and converting over from a PC in 2012-2013 there was almost no ability to communicate / transfer between my phone or iPad and my MacBook. I remember being bewildered that there wasn’t even an app on MacOS to read Kindle books that I had on my iPad (and even today the MacOS app is a bit wonky).

    Today there is some ability to use my MacBook from 2011 alongside my iPad and my iPhone. The key elements of inter operability include:

    – Apple Messages works well between the devices. This is probably the biggest single unlock for my MacBook by far
    – Apple Photos now work pretty seamlessly between all the devices. After Apple Messenger this is the next biggest “win”
    – if you use iCloud you can share across all devices
    – Facetime and answering calls works across all devices, depending on whether or not you want to turn it on (can be annoying when your computer “rings” when your iPhone rings)
    – Notes works well across all devices and has been getting more powerful with each release (for items like to-do lists, etc…)

    The apps on the MacOS still lag far behind those available for the iPhone. I don’t know what the long term plan is for this. I know that apps function differently on each environment; common apps like “Bitmoji” work great on my iPhone, kind of OK on my iPad (I have an attached keyboard so it is strange and locks in portrait mode), and not at all on my MacOS (or I haven’t really even tried it.
    Read the rest of this entry »

    Posted in Tech | 5 Comments »

    Apple Pay for Better Security

    Posted by Carl from Chicago on 11th October 2017 (All posts by )

    Over the last year I’ve had several opportunities to drive to remote parts of Oregon. Often we stop by a local grocery / convenience store to pick up groceries or a snack. These stores are small and often with a single check out lane and a very quaint atmosphere of old-time store goods.

    A bit of fun for me is to walk up to the credit card reader which usually has the icon for near field connectivity (NFC) and I surreptitiously use my Apple Watch with Apple Pay enabled to quickly pay for groceries without taking out my credit card. The cashier gets flummoxed and wonders what happened, and I show them my Apple Watch with my card image and they laugh.

    What is sad is that Apple Pay works “out of the box” at most of these remote grocery stores but it doesn’t work at many of the large retailers in the city. Instead of encouraging Apple Pay or similar google technologies, the retailers want to control the experience and the data and so they turn off this feature. You have the unfortunate alternative of putting your credit card in the chip reader and waiting for 5-10 seconds which slows the line for the whole process. Worse than the inconvenience is the fact that Apple Pay is much more secure than any card reader – Apple Pay doesn’t provide your “real” credit card to the store, instead it uses a “token” for the transaction.
    Read the rest of this entry »

    Posted in Business, Economics & Finance, Oregonia, Tech | 11 Comments »

    Apple Photos Integration

    Posted by Carl from Chicago on 8th October 2017 (All posts by )

    I’ve gone all in on Apple through a series of semi-random decisions.  I bought a MacBook Pro back in 2011 and, thanks to my friend Brian who upgraded the memory and hard drive to an SSD, that machine still works great in late 2017 and I was able to upgrade to the latest Mac OS High Sierra without a challenge.  I have had several iPhones over the years and am on an iPhone 7 now.  My current iPad is an iPad Air 2 which also seems to have several years of life left in it.  Finally, I bought an Apple Watch and recently upgraded it to Watch OS 4.

    I’ve also been moving everything to the cloud slowly.  I looked at my MacBook and it said I hadn’t done a backup in over 1000 days.  I don’t really care because I put the (relatively few) documents that I care about in iCloud (and can access them across any Apple device), my contacts are in the Apple Cloud, while my photos (the core of most of this post) are already in the Apple cloud and I gave up on physical music and moved almost solely over to Apple Music.  My email is in the cloud with various providers, as well.  So what’s on the device that I really care about, anyways?  Cloud storage is also pretty cheap… I think I spend about a dollar a month on it for Apple (plus $9.99 for Apple music).  The only high space items I have (in terms of MB or GB) are photos, since I’ve given up on music.

    It is a hard decision to put all your photos in the Apple cloud.  You need to make the move to put your photos up in the cloud and have that be the primary location, not the ones on your hard drive or your phone  While someone with more technical expertise might tell you that is not an irrevocable decision, from my perspective it seems like it would be exceedingly difficult to “go back”.

    I came to this decision because I love the features that Apple Photos provides.  Specifically:

    • Once you tag faces to names, any new photos that you take are automatically linked to those same individuals.  The accuracy of this service has been increasing over time, both in terms of 1) matching different angles to people and also in 2) picking faces out of the crowd in the first place so that you can link them to people
    • Apple photos now synchs across devices so that if you link photos to faces on your iPhone it carries those same links over to the photos on your MacBook and on your iPad.  Incredibly, until the latest OS upgrade (on the iPhone / iPad as well as Mac OS) you had to do these independently (3 times).  I am also starting to play with synching to my Apple Watch with Watch OS 4 but this is in progress (and would be partial in any case)
    • Apple photos now has built in photo features that were present on typical photo editing software years ago, like auto-feature touch up (magic wand) and more tweaks.  I’m sure to a photo expert these features are minimalistic but to the vast, vast majority of photo users they are likely enough.  These features just came through with the latest upgrades
    • Apple photos makes it easier to synch faces to contacts and also appears to act more reliably across devices.  For instance, if I take a photo on my iPhone it won’t appear on my iPad or Mac until I connect that phone up to wifi somewhere and put it in a charger.  But then they all appear right away (in a reduced quality image, when you tap on one it “fills in” the remaining elements to a high quality image.  This used to be spotty, at best, and unreliable (I would have to start and restart my devices sometimes for it to work)
    • Now that synchronizing works reliably across devices, I can use my Mac for more heavy duty tasks like editing and changing the date on old photos (for example I take iPhone pictures of old photos from my physical photo albums and then I edit them and change their date on the Mac so that they are in the proper sequence and don’t show up at the top of your photo queue by date)
    • If you load older photos into iCloud it takes a while (probably faster now) because it attempts to add in all the AI (faces, locations, etc…) so be a bit patient.  I was an early adopter of this and somehow I had lots of duplicates that I am in the process of deleting but it probably is easier now
    • I tried making a physical photo book from Apple (to give to parents and in laws) and it worked great.  Now it is much easier to bring photos into the physical book or however you want to print them, and you have a huge variety of photos (edited, even) to choose from

    Read the rest of this entry »

    Posted in Photos, Tech | 7 Comments »

    Rolling Stone Reviews Top 100 Metal Albums

    Posted by Carl from Chicago on 2nd July 2017 (All posts by )

    For whatever reason this is the music of my childhood and I couldn’t resist taking the opportunity to take apart this ranking by Rolling Stone magazine, which was reasonably good (other lists have been terrible in the past). If you are interested at all head over to our other site and check it out. I would put it here beneath the fold but there are tables and the like and it takes a while to re-format from Blogger to Word Press.
    If not hope you are having a good summer…

    Posted in Music | 7 Comments »

    Electric Six at Dante’s In Portland

    Posted by Carl from Chicago on 17th June 2017 (All posts by )

    Last night I went to see one of my favorite bands, Electric Six, at Dante’s in Portland on Burnside Avenue. They played a fun show and the band sounded great (my ears are still ringing). Here is their iconic singer “Dick Valentine” on stage. The band delivers hilarious onstage banter and are highly recommended. The crowd at Dante’s was also great and everyone seemed to be in good spirits.

    Read the rest of this entry »

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    Posted in Music, Oregonia | 2 Comments »

    Book Review – “Blitzed”

    Posted by Carl from Chicago on 13th June 2017 (All posts by )

    Blitzed is a book by Norman Ohler about drugs and Germany during WW2. The book also appears to comprehensively demonstrate how these drugs impacted military tactics and operations for the German troops and also how they altered strategy at the highest levels.

    From a tactical and operational perspective, I can see how the narrative of the use of drugs to push troops to move faster and work at night aligns with my understanding of the early years of WW2. The Germans did cover ground rapidly during the early years of the Blitzkrieg and absolutely outfought the Allies (overall) at night. They also managed more sorties for their air force per plane and were more effective at leveraging their military assets (also through battlefield recovery at night of damaged equipment). Compared to WW1, especially, the distances that the German troops covered during the Blitzkrieg phases of 1939-41 were amazing and their combat power remained strong.

    From a strategic perspective, the book attempts to align the delusional attack known as “the Battle of the Bulge” in late 1944 to the use of drugs by the supreme commander, which would account for his thoughts that this shock attack could break the will of the Allies to fight. This is an interesting line of thought and if we had perfect information we would attempt to match the various drugs he was prescribed on top of the decisions that were made during different battles and campaigns during WW2.

    I have seen a number of reviews of this book and most of them seem to think that there is a strong basis of fact. However, there are often bitterly contested reviews, especially with regards to the more sweeping generalizations that were translated as “everyone was on drugs”. Those discussions, to me, are more of a “corner case” of the key findings related to 1) the impact of drugs on the combat power of early war German formations 2) the impact of drugs on decision making at the highest levels of command. I would love to hear from other authors interested in this topic to see how it aligns with their opinions.

    Cross posted at LITGM

    Posted in Book Notes, History, Military Affairs | 2 Comments »

    USS Jackson at Portland Fleet Week… and Disruption Hits the Navy

    Posted by Carl from Chicago on 10th June 2017 (All posts by )

    Portland, Oregon hosts “fleet week” where navy ships (including from Canada) dock alongside the river right next to downtown and offer tours and set up booths and the like. This year I was excited because USS Jackson, an Independence Class Littoral combat ship was arriving and I would get to see what an advanced combat craft looks like up close. I also found out a key link to “disruption” which has been a theme of my recent analysis and posts.

    The first thing you notice is the unique hull (compared to traditional warship designs). This design is supposed to let it operate in shallow waters near coastlines and also deliver very high speed – up to 50 knots – although the top speed is classified. The navy had a chain link fence up and armed guards with M16 weapons and a sign saying “use of deadly force authorized” so they were not kidding around.

    That same day I received my copy of “Modern War”, a magazine published by Strategy and Tactics Press (and I highly recommend that you subscribe to their publications, they are a solid and interesting publishing house) which just happened to profile the Independence Class ships on p68-70 of their July – August issue. Some highlights:

    They are controversial because of their limited basic armament and expensive construction costs. Senior naval leaders argue the mission flexibility and extensive automation provide a vast array of capabilities with fewer personnel and platforms than traditional designs. Construction and operating costs dominate budget discussions and headlines because they come ‘up front’. Today, however, personnel costs constitute 62% of the annual Department of Defense Budget.

    Read the rest of this entry »

    Posted in Economics & Finance, Military Affairs, Tech | 37 Comments »

    Yngwie F’ing Malmsteen

    Posted by Carl from Chicago on 27th May 2017 (All posts by )

    When I was in high school Yngwie Malmsteen hit the metal scene like a hurricane. That was back in the day when you would have long and furious arguments about who was the “best” guitarist (remember, we didn’t have the internet and had to fill our time with something other than social media). When Yngwie emerged the term “shredding” became the norm and Yngwie was the apex of that style of guitar playing – almost the photo that you would put adjacent to that term in the dictionary.

    His debut album “Rising Force” was a classic in that genre – mostly instrumental and filled with probably just about the recommended dose of Yngwie for most non die-hard fans. The hand raising his iconic guitar above the fire is the image of Yngwie that jumps into my mind first and foremost.
    Read the rest of this entry »

    Posted in Music, Oregonia | 3 Comments »

    Planning for Failure

    Posted by Carl from Chicago on 23rd May 2017 (All posts by )

    When I worked in the power industry everyone understood that the cost of a power outage was high, but it was impossible to put a precise value on it. There is the reputational damage, the specific costs of payouts to businesses and residences that are impacted (depending on your jurisdiction), the cost of restoring service (typically it is “all hands” in terms of available personnel and equipment), and finally the loss of trust by your all-important regulator when you come back later and ask for an inevitable price increase for your customers.

    The other, more subtle, cost of outages is the fact that businesses and residents must plan for unreliable power sources, and invest in backup generation which includes fuel, testing, etc… I would call this “planning for failure”. Over time, this also causes businesses to consider exiting the grid entirely in one form or another when they are large and capable enough, causing the remaining fixed costs to be borne by the remaining customers.

    Here in Portland right now we are dealing with a major outage, as a fire caused a power outage to over 2000 customers downtown near the Pearl district. This isn’t 2000 customers… most of these meters are large businesses and buildings and not individual houses. In practical terms, the downtown Target is probably closed, Powell’s bookstore (a major tourist attraction) is closed, and many, many other smaller businesses and restaurants. It would be similar to a power outage taking out most of River North in Chicago where I used to live.

    Luckily I live in a building with a backup generator, and they have fuel for 3 days, so we likely will be unaffected. That’s what you get when you pay more for a recently built class A apartment rather than an older vintage walkup. But many, many folks are going to be impacted by this (it was over 90 degrees yesterday) and many restaurants are going to have to throw out their food on top of losing a couple of days’ worth of customers.

    As we re-think electricity and the grid entirely it is important to consider reliability in the equation. I believe that many individuals and businesses just take power for granted until it isn’t there anymore. This challenge will likely be exacerbated by renewables and solar power… in this outage it is a distribution system failure, but intermittent generation of power is another variable in the reliability equation.

    Cross posted at LITGM

    Posted in Energy & Power Generation, Oregonia | 20 Comments »

    Book Review – Shattered

    Posted by Carl from Chicago on 29th April 2017 (All posts by )

    This really isn’t a traditional book review. “Shattered” is a book about the last presidential campaign from Hillary’s advisors’ perspective. I bought it on Amazon and read it and it was just an amazing view into the mechanics of that doomed campaign. Highly recommended.

    First of all, I want to commend her camp for getting the basics so right. They reviewed the 2008 campaign which failed for her and took all the tactics of the winning side. They consisted of:
    1. Focusing solely on the super delegates. Apparently this is much more technical than you’d expect and if you don’t carefully understand each state and district and how everything works you may win a lot of votes but receive few delegates
    2. Play the long game and ignore distractions. When Bernie blew her out of a lot of states they just waited to get back to states with large minority populations so she could cover over those losses. This generally ignores the fact that Bernie was competitive in states which were critical to the electoral college and “in play” which made a difference in the general election but not in the primary election
    3. No one was going to change their mind about her. Their campaign strategist, a guy named Robby Mooks, didn’t spend any money on “persuasion” because those that hated her weren’t changing their mind and the more she was in the news tied to the email scandal or her health or the DNC leaks the worse it got. At one point they said they were considering not putting more money into a state (Michigan) right up before the election because they believed that they were just inflaming the other sides’ base
    4. No matter what happened, she soldiered on. She was unflappable.

    Read the rest of this entry »

    Posted in Book Notes, Politics | 14 Comments »

    Disruption – Liquor

    Posted by Carl from Chicago on 14th April 2017 (All posts by )

    “Disruption” is a word usually reserved for hyped sectors of the economy like technology and “Uber” is the ubiquitous example that even a child would recognize. However, there are other components of the economy ripe for disruption, especially those that are heavily regulated, which generally causes significant distortions, monopolistic behavior, regulatory capture, high prices, and a lack of innovation.

    The liquor industry is a heavily regulated industry, with layers of distributors and obscure rules which enforce local monopolies, entrench incumbents (often with inferior products), and provide many opportunities for the government to extract tax income and solicit donations from favored groups. Typically liquor uses a “three tier” system, where there is a producer, a distributor, and a retail outlet (a store or a bar). This is a system ripe for disruption.

    Alongside this archaic regulated system (which works for the benefits of the government and the local monopolies), there was a multi-decade process of concentration within the liquor industry, as local beer manufacturers were bought up by massive multinationals, culminating in the InBev company which controls a huge chunk (28%) of world-wide beer sales. If it wasn’t for the craft beer counter-revolution (see below), the epic consolidation of the liquor industry would have gone on indefinitely, bringing out “innovations” like Bud Light Lime.

    Some of the components of the disruption of liquor in Oregon include:
    1) Craft breweries or brewpubs which brew their own beer (and cider) and can sell it onsite
    2) Distilleries able to make their own spirits and sell themselves out of their facility
    3) New technologies such as Growlers or Crowlers which enable customers to fill directly from a keg into a re-usable container and take the beer home to drink
    4) This is all in addition to the vast wineries (seemingly everywhere) that can sell directly and even ship to many states

    Craft Breweries:

    Portland and Oregon have been leaders in the craft beer movement, enabled by laws (passed against the political power of the beer distributors) which allowed for the brewpubs to sell their own alcohol.
    This article describes how the modern brewery was instituted in Oregon.The “beer culture” is everywhere, with 116 breweries within an hour of Portland, as evidenced by the cover of this recent magazine I picked up. Here is a link to the magazine online.

    Read the rest of this entry »

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    Posted in Economics & Finance, Oregonia | 11 Comments »

    Obama’s “Nuclear Renaissance” Hit Again By Bankruptcy

    Posted by Carl from Chicago on 29th March 2017 (All posts by )

    Since it was first announced almost a decade ago I’ve followed the “nuclear renaissance” that Obama touted and noted that it would likely end in failure due to the poor economics of these projects given our current, failed regulatory climate. The Federal government provided loans to get some of these projects off the ground. Now, with the bankruptcy of Toshiba’s Westinghouse unit, the whole process is collapsing and leaving half-built reactors and rate payers (and investors) in many jurisdictions likely to hold the bag for huge investments that aren’t going to generate power any time soon.

    Toshiba Corp’s U.S. nuclear unit Westinghouse filed for Chapter 11 protection from creditors on Wednesday, just three months after huge cost overruns were flagged, as the Japanese parent seeks to limit losses that threaten its future. Bankruptcy will allow Pittsburgh-based Westinghouse, once central to Toshiba’s diversification push, to renegotiate or even break its construction contracts, though the utilities that own the projects could seek damages. It could even pave the way for a sale of all or part of the business. For Toshiba, the aim is to fence off soaring liabilities and keep the group afloat.

    These partially built reactors in Georgia and South Carolina were commissioned because local laws and regulations allowed for the costs of these investments to be passed on to the rate payer (local folks paying electric bills). In other states with different sorts of regulatory models, these sorts of investments would have been uneconomic, which is the primary reason why everyone else in the USA balked at the nuclear renaissance, even when it was partially underwritten by the Federal government with loans.

    There are now two problems for rate-payers in Georgia and South Carolina:

    1) the companies now have to build these reactors without price guarantee from Toshiba, meaning that the (likely) giant costs of the overruns will be borne by local ratepayers or the companies themselves. If the unit is in bankruptcy and walled off from the funds of the parent corporation (which is the purpose of the bankruptcy, I am assuming), it seems unlikely that anyone else would step up and backstop such a guarantee.

    2) this bankruptcy is likely to cause significant delays in construction, meaning that the long, miserable process of getting certified to start up the reactor is going to be pushed out further into the future. This means that it will be that much longer until the unit starts generating power and “earns back” the investment, and all the costs of the reactors will accrue interest and financing charges for that much longer while construction proceeds (rate payers)

    Note that there is precedent for taking gigantic write downs and abandoning abandoned reactors. Here is a link to the abandoned reactors in Washington and the famous Shoreham debacle in New York.

    None of this seems to be impacting the stock prices of Southern Company (SO) and Scana (SGC) this morning so maybe the market knows something that I don’t. Scana is holding a press conference to describe their next steps in the process today and I didn’t seen anything yet scheduled on Southern Company’s web site.

    Cross posted at LITGM

    Posted in Energy & Power Generation, Obama | 15 Comments »

    Mid-Life Crisis and Alternate Universes

    Posted by Carl from Chicago on 25th March 2017 (All posts by )

    One of my favorite Onion jokes of all time is “Alternate-Universe James Hetfield Named Taco Bell Employee of the Month“. This genius post encapsulates the randomness of the world we live in, since the likelihood of James Hetfield being a guy who does odd jobs, plays guitar in a basement, and loves metal is so much infinitely higher than the odds are that he becomes a rich superstar as the singer of Metallica.

    This philosophical view is somewhat similar to Taleb’s theories in “The Black Swan” and his other books where, if you did your life over and over, you would get vastly different results and individuals attribute too much of their luck and good fortune to their specific actions and experience. We are all dealing with the “Survivor’s paradox”, where those who did well get to tell their tale and those who didn’t fare so well are essentially erased from the common consciousness.

    I saw this car down in my garage in Portland and thought to myself “This is the alternate universe for Carl” which is to just keep my prior job and old way of life and buy a shiny new expensive car (this is a Bentley, I would have bought a new BWM 7 Series, but who’s counting) as a distraction. That would have been a fine life, a life I understood, and the car purchase would have been a modest but visible change and distraction from what was otherwise a quite predictable path.

    Instead, however, I changed everything, by moving jobs and careers and physically relocating away from my entire ecosystem of family and friends to the Pacific Northwest. This was a vast change, much larger than cosmetically purchasing a new conspicuous automobile. Starting a new job forced me to change everything, from the way I listened and studied, to the way I interacted with the environment around me. I went from walking to work to commuting by car (like 90% of the world) which is a primary negative, although at least I have been listening to podcasts which turn that driving time which was initially pure frustration into at least a positive learning experience.

    Read the rest of this entry »

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    Posted in Business, Economics & Finance, Personal Narrative | 10 Comments »

    Windows 10

    Posted by Carl from Chicago on 24th March 2017 (All posts by )

    Recently I updated to Windows 10 on my work computer. I have worked with windows products for decades now, starting with the early DOS based versions and remembering the “Big Bang” of Windows 95 with “Start Me Up” by the Rolling Stones in the background. What I really thought was cool back in the days of Windows 95 was seeing the Weezer video for “Buddy Holly” through the windows media player since it was installed with the operating system. It was a first glance at actually useful video integrated with the device (or downloaded) rather than played through a CD or ultimately DVD.

    I was dreading this Windows 10 upgrade because many of my co-workers were having various problems with it on their devices. These weren’t problems with Windows 10 per se, they were tied with the way applications run as we move to more of an online mode. For example, if you are saving data on BOX in the cloud or using Office 365 (run from the cloud), your machine performance is more variable, tied with all the hand offs and routing up and down and depending on your network connection at the time. Many co-workers use tablets and a variety of machine types so there wasn’t a lot of common threads in some of the issues. Also, Microsoft now includes the “Edge” browser as default as they try to get rid of Internet Explorer (the worst browser) and many folks seemed confused because the links and bookmarks didn’t automatically port over to Edge.
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    Posted in Tech | 12 Comments »

    Iron Maiden’s “The Number of the Beast” is 35 Years Old

    Posted by Carl from Chicago on 21st March 2017 (All posts by )

    I was listening to “Boneyard” the XM Radio station whose one-time motto was “the station of road-trippin’ and binge drinking” and they said that “The Number of the Beast” by Iron Maiden was turning 35 years old. In that moment, I felt old, too.

    “The Number of the Beast” is the first album by Iron Maiden featuring singer Bruce Dickinson with his soaring vocals. The prior singer, Paul Di’Anno, had a much lower, punk sort of voice range that was a bit less commercially successful. This was also the album that made them giant in the United States, with their videos such as “Run to the Hills” being played incessantly on MTV.

    I took a snapshot of the album cover from Apple Music on my iPhone – I’m sure that somewhere there is a cassette, album, and CD of this disc somewhere that I’ve purchased and lost over the years. This is one of their best covers, with the mascot “Eddie” pulling the strings on the devil (who has his own little Eddie on a string).
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    Posted in Music | 8 Comments »

    US Infrastructure Will Be Broken Forever

    Posted by Carl from Chicago on 11th March 2017 (All posts by )

    Recently I visited Cathedral Park in Portland, which lies beneath the St. Johns Bridge.  The St. Johns Bridge is a magnificent structure, built in 1931, during the height of the depression.

    Portland is a city of bridges.  These bridges were mostly built long ago, when construction projects were feasible in terms of costs and delivery time frames were measured in years, not decades (when approvals, funding, environmental contingencies, etc… are factored in).

    Today the Portland metropolitan area, which includes large Washington communities north of the city, faces severe constraints on traffic and there is widespread local agreement that commute times are growing longer and in some instances intolerable.  I know individuals in Chicago, LA or NYC that would laugh at commute times that aren’t 2+ hours but that is little consolation to the locals who previously had been able to drive around the metro area with relative ease.

    Many of these bridges need to be replaced for multiple reasons – the Pacific Northwest is an earthquake zone and most of these bridges are not built to survive a quake, traffic on the bridges is soaring and causing delays throughout the system because they function as bottlenecks, and frankly bridges cannot last forever without collapsing.

    And yet… it will never happen.  I am confident that we won’t be able to raise the billions that it will take to build these bridges and lawsuits and environmentalists would create innumerable roadblocks (with accompanying cost increases and delays) so that even difficult projects will become impossible. There is an utter breakdown in funding, public will, solid execution, and all the fundamental components that make infrastructure possible.  While China has built giant, soaring cities, we can’t even replace bridges and roads built 100 years ago.
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    Posted in Economics & Finance, Oregonia, Transportation | 54 Comments »

    Apple Photos

    Posted by Carl from Chicago on 3rd March 2017 (All posts by )

    I moved my life over to Apple products over the last few years. I used to use Picasa by Google and Shutterfly for photo books and canvas wraps but over time I’ve leveraged Apple photos to a greater degree and this post describes my experiences and some tips and tricks.

    Apple photos is complicated. For most people, Apple photos is your camera application on your iPhone. With recent iOS upgrades, however, there is a new photos application that is cross platform (I can see my photo stream on my Mac, my iPad, or my iPhone). However, there is a catch. You need to use iCloud and back up your photos to the cloud, rather than just leaving them on your phone.

    It took a while to synch up photos across all my Apple devices and I had to google technical support questions a few times and turn on and off iCloud. However, I eventually got them synched up and it has worked great ever since.

    There are some great features. One feature is facial recognition. You can select a person and then link them to your contacts and Apple automatically selects all the photos of that individual. For photos where Apple is not sure, they ask you “is this so-and-so” and you can say yes or no, and then it organizes all the photos by individual.
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    Posted in Photos, Tech | 4 Comments »

    Ethan Russell and Iconic Rock Photos

    Posted by Carl from Chicago on 26th February 2017 (All posts by )

    Growing up I was a big fan of The Who. Since I didn’t always have a lot of money for records I tried to “stretch” my budget often times by buying “greatest hits” albums. Initially I thought that “Who’s Next” by The Who with the iconic photo of them pissing on some sort of concrete slab WAS a “best of” album simply because almost every track had been played to death on the radio with the exception of “My Wife” by Entwistle (which was a song I liked a lot) and “Love Ain’t for Keeping”.

    Recently I saw a presentation by the photographer Ethan Russell who took that classic cover photo along with an amazing amount of other images you’d recognize instantly, from the pictures of the Beatles on the “Let It Be” album to some great Rolling Stones’ photos from their classic late 1960’s – early 1970’s era. If he comes to your town I would highly recommend that you go out and hear him talk.

    I bought a signed print of that Who’s Next cover and sent it on to a friend of mine who also was a big fan of The Who growing up. I’m sure he’ll like it.

    Cross posted at LITGM

    Posted in Music, Photos | 5 Comments »

    The End of Accounting Book Review – Part One

    Posted by Carl from Chicago on 8th January 2017 (All posts by )

    Recently I read an excellent book called “The End of Accounting and the Path Forward for Investors and Managers” by Baruch Lev and Feng Gu. I highly recommend this book for investors, analysts, accountants, and those with a general interest in business. The book is very well written and researched in that it:

    1. Describes the current situation in depth
    2. Aligns the situation across an historical context and with relevant research
    3. Makes specific recommendations about how to improve the situation

    If you’d like to read more about this topic on your own (will help to frame out these posts), here is an excellent Wall Street Journal article titled “The End of Accounting” (if the link doesn’t work because you don’t have a subscription you can probably find it elsewhere on the internet). Here is a link from Accounting Today and an interview with the author from CFO magazine.

    The first post in this series is going to be my personal insights and journey in the area of accounting information, financial and investor relations analysts. This context is relevant because I, too, have seen the problems that the authors outline in the series and come up with my own “hacks” to attempt to gain better information and insights.

    I started out my career as an accountant, and I used to help create the footnotes that you see at the end of the financial reports. This wasn’t creative work per se – you would start with last year’s footnote as a template and insert new numbers, unless it was a new requirement, in which case it was a lot of work and we would turn to specialists. At that time (20+ years ago) there were only a few footnotes and the financial statements themselves weren’t that long; you would be able to read from the Chairman and CEO’s letter all the way through to the last footnote in a couple of hours.

    This was also before the internet; we would go into the company library and look at microfiche sometimes to do research or you’d pull up the hard (printed) copy from the files. At that point an annual report was also somewhat of a marketing document; companies put a lot of thought into the cover, for instance.

    At various points in the history of accounting there has been a focus on the balance sheet (assets and liabilities), the income statement (earnings per share and price / earnings ratio) and on cash flows (cash generated from the business). Each of these views are important and have their merits and their drawbacks. The statements were generally the “GAAP” view which focused on financial statement presentation and used taxes at official rates (many companies pay almost nothing in taxes in actuality by deferring them indefinitely) and held assets at historical costs. Both of these assumptions made the financial statements less useful for certain types of companies and industries.

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    Posted in Book Notes, Business, Capitalism, Economics & Finance | 3 Comments »

    A Great Concert – SRV at Champaign IL 1987

    Posted by Carl from Chicago on 7th January 2017 (All posts by )

    Dan is much smarter than me and he holds on to all the ticket stubs for concerts and sporting events that he’s attended over the years.  He recently sent me a rug and a coffee mug that he created based on the ticket stub for a special concert we attended almost 30 years ago when we were at the University of Illinois.  The show was Stevie Ray Vaughan at Foellinger Auditorium.

    At the time I was in college and had almost no money.  I saw that Stevie Ray Vaughan was coming to campus and thought I would get up early and stand in line to purchase tickets before class (I rarely got up early in those days when I could avoid it).  Alas, the line was already long and I pretty much gave up right away.  There was a guy who was scalping tickets, however, so I went up to him and bought two tickets for what I remember was about $50.

    The tickets were up front in the first couple of rows as it turned out but way, way on the left side of the stage.  Dan and I got rip roaring drunk before the show (which was the custom, back in the day) and we headed to Foellinger.  Note that Foellinger was a lecture hall and I had many classes in that room – the room had bolted-down desks with the fold out panels that you could write on, so it was kind of odd that they had concerts at that same room (I also saw the punk band Husker Du in that same lecture hall, which seemed even odder).

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    Posted in Music | 4 Comments »