Restaurants: The Ups ... the Downs

Many Midsize Restaurant Chains Fight to Stay Afloat as Food Costs Soar, Young Customers Get Pickier


Younger people once were among the most reliable customers for less-expensive chain restaurants. These days, though, many of them have less in their pockets, forcing them to eat at home more and to be pickier when they do grab a bite elsewhere.

"When I get home from work, the first thing I do is make lunch for the next day," says John Karwacki, a 22-year-old who works at an investment bank in Chicago.

That shift in habits is just one of many problems leaving some smaller and midsize restaurant chains, such as Friendly's, Chevys and Quiznos, grasping for enough profit.

On top of the weak economic conditions that have challenged restaurants for the past several years, commodity costs have spiked.


  • Friendly Ice Cream Corp. filed for Chapter 11 bankruptcy protection in October
  • Real Mex Restaurants Inc., the owner of Chevys and other sit-down Mexican-food chains, also filed for bankruptcy protection in October
  • Quiznos ... in trouble

McDonalds is the only restaurant stock I own. It's not an exciting restaurant but it is solid performer

Improving Airplane Boarding Time

The Cattle Call at Gate 15 Is Taking Longer and Longer


So it should be no surprise that boarding has become one more frustrating step in airline travel. Or, as Mark DuPont, the vice president for airport planning at American Airlines, put it: “Boarding can be like driving behind a slow-moving truck that you can’t overtake.”

Boarding time has doubled over the last decades, according to research by Boeing. It now takes 30 to 40 minutes to board about 140 passengers on a domestic flight, up from around 15 minutes in the 1970s.

Comment: Some pretty cool interactive features associated with the article.

Relying on Social Security

Social Security Becoming Bigger Source of Retirement Income


MSN/Money reported recently in “More Rely on Social Security” that in 1962 social security represented 30% of people over 65′s income – in 2010 it had grown to 38%. Today more than 66% of retirees get 50% or more of their income from this source, and 35% rely on it for 90% of their income. Income from investments has declined in recent years, which now makes up only 11% of retiree income.

Comment: My calculation is that Social Security will be 31% of our aggregate retirement income.

Greece to Hold Referendum on Eurozone debt deal

Greece to Hold Referendum on New Debt Deal


Prime Minister George Papandreou announced Monday night that his Socialist government would hold a rare national referendum on a new debt agreement for Greece that was hammered out with the country’s foreign creditors last week, raising questions about Greece’s ability to follow through on its part of the hard-won deal to stabilize the euro.

The surprise announcement, made to lawmakers in Athens, again chained the health of the European Union to Greek domestic politics. Standard & Poor’s 500-stock index fell almost 2.5 percent and the Dow Jones industrials fell about 2.3 percent. European markets, which closed before the announcement, were also down sharply on Monday.

Mr. Papandreou said that the decision on whether to adopt the deal, which includes fresh financial assistance for the country but also imposes unpopular austerity measures, belonged to the Greek people. “Let us allow the people to have the last word, let them decide on the country’s fate,” he said, describing the vote ahead as “an act of patriotism.”

The move effectively pushes responsibility for painful economic choices from the Socialist party onto the public.

Comments: Image source. Score card for Eurozone debt crisis. Screen shot below

Prediction: Referendum will fail. Crisis will escalate.

Fun with Spam ... Respond or else I will be "charged for money laundering"



We, office of the international police authority (IPA) hereby write to inform you that we caught a diplomatic lady by the name Mrs. Vernon Wallace at (John Kennedy International Airport) here in New York with a consignment box filled with United States Dollars.

Base on our interview to the diplomat she said that the consignment box belongs to you and that she was sent by one Edward Somto to come deliver the consignment box to your doorstep not knowing that the content of the box is money.

Now, the diplomat is under detention in the office of (IPA) security, and we cannot release her until we carry out our proper investigation on how this huge amount of money managed to be yours. So, in this regards you are to reassure and prove to us that the money you are about to receive is legal by sending us the Award Ownership Certificate showing that the money is not illegal.

Note, that the Award Ownership Certificate must to be secured from the office of the Nigerian Senate President, because that is the only office that will issue you the original Award Ownership Certificate of this funds, this is because the fund originated from Nigeria.

You are advised to forward immediately the Award Ownership Certificate if you have it with you, but if you do not have it, we urge you to contact back the sender of the diplomat to help you secure the Award Ownership Certificate if at all you do not have it.

Below is the contact information of the person that sent Mrs. Vernon Wallace as provied by her;

Name: : Edward Somto
Email: edwardsomto@gmail.com or edwardsomto@aol.com
Phone: +2348088034788

Furthermore, we are giving you only but 3 working business days to forward the requested Award Ownership Certificate. Please note that we shall get back to youafter the 3 working business days, that if you didn’t come up with the certificate we shall confiscate the funds into World Bank account then charge you for money laundering, but if you forward the Award Ownership Certificate then we will release diplomat with your consignment box also gives you every back up on the money.

Thanks for your understanding and co-operation

Yours Truly,

Agent. Douglas H. King
Tel: 813-322-4833


CC: Canadian Police
CC: Asia Pacific Group on Money Laundering (APG)
CC: Egmont Group
CC: European Bank for Reconstruction and Development (EBRD)
CC: Financial Action Task Force (FATF)
CC: International Monetary Fund (IMF)
CC: International Organization of Securities Commissions (IOSCO)
CC: International Banking Security Association (IBSA)
CC: International Air Transport Association (IATA)
CC: Institut de Formation Interbancaire (INSIG)
CC: World Customs Organization (WCO)
CC: Inter-American Development Bank (IADB)
CC: Offshore Group of Banking Supervisors (OGBS)

Comment: Nice touch ... all the CC's

MF Global loses bet on European sovereign debt

MF Global files for bankruptcy after deal unravels


MF Global Holdings Ltd, the futures broker run by former Goldman Sachs chief Jon Corzine, has filed for Chapter 11 bankruptcy after a tentative deal with a buyer fell apart.

The firm's meltdown in less than a week is a stunning setback for Corzine, who sought to turn MF Global into a mini-Goldman. Corzine became CEO last year after losing his governorship of New Jersey, and his big bets on euro-zone debt sealed the company's fate.

The bankruptcy filing came after talks to sell a variety of assets to Interactive Brokers Group Inc broke down earlier Monday, a person familiar with the matter said. Earlier, central banks and exchanges had slapped the broker with suspensions.

The bankruptcy makes MF Global the most prominent U.S. casualty yet from the euro-zone debt crisis, and harkens back to 2008 when Lehman Brothers collapsed at the height of the U.S. financial crisis.

Comment: Probably a company many have never heard of! But one of the top 10 Bankruptcies Ever! Harbinger of future Euro-zone fallout? Stock now trading near a $1.


Tax lessons from Scrooge McDuck

How the Death Tax Hurts the Poor - It encourages the rich to pick extra fruit, leaving the trees a little barer for the rest of us.


The death tax sends a powerful message to rich people: "You can't leave everything to your heirs, so spend now, before it's too late. Burn more fuel. Demand more timber for your mansions, more steel for your private planes, and more fiberglass for your yachts.''

Then all those resources—the fuel and timber, the steel and fiberglass—become unavailable to build factories, so the rest of us get worse jobs at lower wages. Those resources are unavailable to build farm equipment, so we all pay higher food prices. They're unavailable to build roads and schools and hospitals.


We're all living on other people's inheritances and investments in our economy. Just five generations ago, the average American worked 60 hours a week, took no vacations, and earned less than the modern-day equivalent of $6,000 a year. He or she rarely traveled more than a few miles from home, had no central heat or running water, and died at age 50.

... you don't need rich parents to be a victim of the death tax. You don't need to own a family business or family farm. You only need to be someone who works in a factory or shops in a grocery store or gets sick and goes to the hospital.

Now you might say that if we abolish the death tax, rich people will consume less but their heirs will consume more—so what's the point? To this there are two answers.

First, delayed consumption is still better than immediate consumption. If Scrooge McDuck forgoes a private jet so his nephew Huey can have a private jet 20 years from now, we get 20 years of additional production from the factories that can be built in the interim.

Second, don't be so sure Huey ever gets that private jet. He will, after all, be splitting Scrooge's estate with his brothers Louie and Dewey. A hundred million dollar inheritance, split among three children, and then nine grandchildren, and then 27 great-grandchildren, gets whittled down in just five generations to less than half a million per heir—and that assumes that nobody spends anything along the way! So when Scrooge forgoes his private plane, it's likely to be for the benefit of descendants who fly coach.

I'm not just making this up. One of the great insights of modern economics is that taxes are often most harmful when they encourage overconsumption.


Every tax discourages work, and every tax discourages risk-taking. That's sad but true, and it's a reason to hesitate before you raise any tax. But the death tax is a double whammy, compounding the damage by encouraging overconsumption. (The same is true, incidentally, of taxes on interest and dividends.) So my message is this: If you must tax the rich, please do it in a way that minimizes the collateral damage to the poor.

Comment: A thoughtful article. I had never viewed the dangers of estate taxes in this way. On Scrooge McDuck

Harrisburg: The national museum of bad government ideas

How Harrisburg Borrowed Itself Into Bankruptcy


The Harrisburg case raises fundamental questions about the way cities and states increasingly use debt to finance speculative development that private investors or lenders won't touch. From minor league stadiums to arenas, museums, downtown redevelopment and waste plants with unproven technologies, billions have been spent on schemes of questionable value. Some projects are backed by unrealistic economic projections, which leave taxpayers on the hook for bond payments or operating subsidies. These deals are one reason why state and local debt outstanding has ballooned from $1.3 trillion to $2.5 trillion in the last decade, according to the U.S. Federal Reserve.

Perhaps the country does need a national museum of bad government ideas. Harrisburg would be a good place for it.

Comment: There is no real "Museum of Bad Government Ideas"! Image above is the famous Frank Lloyd Wright Ennis House which provided the exterior facade for the House on Haunted Hill, a 1959 B movie


Squatters tired of shirkers!

Occupy Wall Street kitchen staff protesting fixing food for freeloaders


The Occupy Wall Street volunteer kitchen staff launched a “counter” revolution yesterday -- because they’re angry about working 18-hour days to provide food for “professional homeless” people and ex-cons masquerading as protesters.

For three days beginning tomorrow, the cooks will serve only brown rice and other spartan grub instead of the usual menu of organic chicken and vegetables, spaghetti bolognese, and roasted beet and sheep’s-milk-cheese salad.

They will also provide directions to local soup kitchens for the vagrants, criminals and other freeloaders who have been descending on Zuccotti Park in increasing numbers every day.

Comment: I'm sick of them all!

Greek "Haircut"

EU Sets 50% Greek Writedown, $1.4T in Rescue Fund


European leaders cajoled bondholders into accepting 50 percent writedowns on Greek debt and boosted their rescue fund’s capacity to 1 trillion euros ($1.4 trillion) in a crisis-fighting package intended to shield the euro area.

The 17-nation euro and stocks climbed while bond spreads narrowed after leaders emerged early today from a 10-hour summit in Brussels armed with a plan they said points the way out of the quagmire, albeit with some details still to be ironed out.

“Overall the outcome is better than we anticipated one week ago,” Laurent Bilke, global head of inflation strategy at Nomura International Plc in London, said in an interview. “There are several issues left open, but I do believe that getting a more necessary debt relief for Greece is a pretty important step.”

Last-ditch talks with bank representatives led to the debt- relief accord, in an effort to quarantine Greece and prevent speculation against Italy and France from ravaging the euro zone and wreaking global economic havoc. Greek Prime Minister George Papandreou will address the nation at 8 p.m. in Athens to outline the summit’s ramifications for the country at the eye of the two-year sovereign debt crisis.

Merkel: 50 pct haircut to cut Greek debt by 100 bln euros


Private owners of Greek bonds will accept a 50 percent writedown on their investment, enabling both a 100 billion euro cut in Greece's sovereign debts and allowing a new Greek programme of aid of 100 billion euros, German Chancellor Angela Merkel said on Thursday.

"Our goal is that the debt of Greece by 2020 is 120 percent (of GDP)," Merkel told journalists after a meeting of euro zone leaders.

"A nominal haircut of 50 percent has been agreed. On the basis of this, we will have a new programme for Greece with a value of 100 billion euros."

She said the public sector would make a further 30 billion euro contribution towards private sector participation.

Comment: The operative word is "cajoled". Of course 50% is better than nothing!


Driving back on Hwy 169

I drove back from Des Moines to Plymouth along U.S. Route 169

  • I left Des Moines at 1:00 p.m. I had to use On-Star once. I was at the entrance to I-235 and didn't know whether I should have gone East or West. Turns out the answer was East. (I was here)
  • I exited I-35 at Ames, bought an Iowa map and gassed up
  • Took US Hwy 30 West through Boone and onto Ogden where I picked up 169
  • Now North on 169: Through Fort Dodge (the Hwy by-passes the town) and then onto Humboldt. I stopped at a convenient store / gas station and bought a Mountain Dew. There was a sign on the door: "High School Seniors, 10% off". I trying to claim the 10% discount for being a Senior. The checkout clerk was not amused!
  • Onto Algona. The last "big town" in Iowa.
  • Finally the Minnesota border and Elmore (the boyhood home Walter Mondale)
  • Then Blue Earth. I stopped for a break and called Kathee to advise her of my progress. 5:00 p.m.
  • I stopped again for a break at a rest area 25 miles N of Mankato. 50 miles left to go. Getting tired
  • Arrived home at 7:12 p.m. Kathee had a nice dinner awaiting!

Comment: I love Iowa! I love Minnesota. I could live in some of these towns


Obama's student loan give-a-way

Obama Taps Taxpayers For Student Stimulus


Obama has broad latitude in this area – certainly broader than the first two parts of his western campaign trip, underwater mortgages and subsidies for hiring veterans – because one of his early legislative initiatives was to have the federal government take over the student lending business in America.

Obama argued for the measure in 2009 as a cost-savings initiative, saying that the old system of privately issued, government secured loans reduced the amount of available money for needy students and also prevented the feds from making the system more efficient.

But Obama is now seeking to use that new power to obtain a taxpayer-financed stimulus that Congress won’t approve. The idea is to cap student loan repayment rates at 10 percent of a debtor’s income that goes above the poverty line, and then limiting the life of a loan to 20 years.

Take this example: If Suzy Creamcheese gets into George Washington University and borrows from the government the requisite $212,000 to obtain an undergraduate degree, her repayment schedule will be based on what she earns. If Suzy opts to heed the president’s call for public service, and takes a job as a city social worker earning $25,000, her payments would be limited to $1,411 a year after the $10,890 of poverty-level income is subtracted from her total exposure.

Twenty years at that rate would have taxpayers recoup only $28,220 of their $212,000 loan to Suzy.

The president will also allow student debtors to refinance and consolidate loans on more favorable terms, further decreasing the payoff for taxpayers.

Comment: This will be hugely popular! I'm not sure how the President has the power to give it away like this!

The Dreamliner

The 787 takes flight, and lives up to its promise


ABOARD ALL NIPPON AIRWAYS FLIGHT 7871 (AP) -- It's the plane that is supposed to change the experience of flying.

No more stuffy noses, dry throats or severe fatigue. Larger windows to provide a stronger connection to the world outside. And mood lighting that can either ease jet lag or turn the plane into a nightclub at 40,000 feet.

And for the most part, Boeing's 787 succeeds. Flying it is more enjoyable. But it's still flying. Just because the plane is new doesn't mean the food will taste better or you won't be stuck in front of a kicking kid.

There has been plenty of hype surrounding the 787, a long-range plane marketed as The Dreamliner that carried its first passengers Wednesday on a four-hour flight from Tokyo to Hong Kong. It has been called "revolutionary" and "a game-changer."

And, indeed, a sleek design makes the plane stand out the moment you step on board. A higher ceiling -- at least the perception of one -- reduces claustrophobia. And natural light pours in, creating a welcoming feeling.

Maybe that 10-hour flight won't be so bad after all. Maybe.

Comment: Not sure why Boeing can make money but the airlines cannot (eg American). A broken business model I guess. (One of my investments is in BA)

Des Moines trip

I'm in Des Moines for two days on business. Des Moines is one of the cities I just drive through (eg on the way to or from Dallas). I have to say it is a very beautiful city.

We are downtown. I spent the night at the very nice Embassy Suites Des Moines - On the River . Last night we had dinner at the Dos Rios. Today having lunch at the Raccoon Brewing Company.

I will be driving home later this afternoon.


Will Blacks hold Obama accountable for his policies?

Vote For Obama Because He's Black


Some of his strongest, high-profile supporters in the black community are now saying that Obama's race, alone, should be enough for black voters to vote for his re-election.

Krissah Thompson of The Washington Post reports that on "The Tom Joyner Morning Show," which has an estimated 8 million radio listeners, Joyner, who is black, said, "Stick together, black people." The show reaches one in four African-American adults.

Rev. Al Sharpton, who also has a radio show and a gig on MSNBC, admonished blacks who have been critical of the president, "I'm not telling you to shut up. I'm telling you: Don't make some of us have to speak up."


In the same week the memorial to Dr. Martin Luther King Jr. was dedicated in Washington, Joyner and Sharpton are saying that Barack Obama should be judged not on the content of his character and policies, but rather on the color of his skin. How sad. How racist.

If a black president cannot be held accountable for his policies and must receive the votes of African-Americans solely because of his race, then all of the marching for equal rights has been for nothing. The question ought to be this: are African-Americans, indeed, are all Americans, better off than they were when Barack Obama took office? By any objective standard, the answer must be "no." How do black people expect their circumstances to improve if Obama is elected for another four years? If they conclude they will not, why not vote for someone who can create the conditions under which more of them might get a job, for example? Black unemployment is 16.7 percent, the highest it's been in 27 years.

Comment: To answer the question: "Will Blacks hold Obama accountable for his policies?" ... I doubt it!

Occupy Minneapolis has cost Hennepin County over $ 200K

Sheriff: Box of rocks, bricks found at Mpls. protest site; protesters say it was planted


The Hennepin County sheriff's office says its costs of patrolling a downtown Minneapolis protest have topped $200,000 in just over two weeks.

As of Sunday, the sheriff's office says the OccupyMN protest has cost it more than $128,000 in overtime and $71,300 in regular pay since the protest began Oct. 7.

Comment: Freedom of Speech and Freedom of Assembly doesn't mean that one can disrupt society and run up these kind of expenses!

Vandalism at St. Joseph's cemetery

Vandals topple dozens of gravestones in Plymouth cemetery


More than 40 headstones at an historic church cemetery in Plymouth were toppled and broken over the weekend, including limestone tablets dating from the 1870s, some of which are so fragile that they can never be repaired.

Father Terry Rassmussen, pastor at St. Joseph Catholic Church of Plymouth and New Hope, said the vandalism left him shocked, saddened and angry.

"I know people do Halloween pranks, but this was more than a prank," said Rasmussen, who lives next to the picturesque church with its white steeple, built on a hill only a dozen years after the Civil War. "This was such destruction of property and desecration of graves that it's an awful thing."

Plymouth police said on Monday that they don't have any suspects or leads in the case, which caused up to $15,000 in damage and has left church officials trying to notify family members of those buried in the vandalized graves. The church said it would do its best to repair the ones it could.

Rassmussen suspects that the headstones were damaged Friday evening between 9 p.m. and 11 p.m. An outdoor light illuminates the church parking lot and the edge of the cemetery, and he noticed just before going to bed that one or two markers had fallen. That happens occasionally, and he resolved to check the stones first thing in the morning.

On Saturday, he found that several of the oldest headstones, their weathered engravings worn nearly smooth, had been snapped off. Thicker column-shaped markers adorned with stone crosses on top had been pushed down and lay cracked and separated into three or four pieces. Large granite headstones had been tipped off their bases. Pieces of four or five gravestones were thrown into the woods. One stout marker in the shape of a cross, engraved only with "Our Baby Boy," had been yanked from its spot and dragged 25 feet into the high grass.

Comment: Shocking and tragic. Such a beautiful cemetery.

The not-so-peaceful Hare Krishnas

Swami Bhaktipada, Ex-Hare Krishna Leader, Dies at 74


Rooted in ancient Hindu scripture, the movement was begun in New York in the mid-1960s by an Indian immigrant, A. C. Bhaktivedanta Swami Prabhupada. It advocates a spiritual life centered on truth, simplicity and abstinence from drugs, alcohol and extramarital sex.

But by the mid-1980s, New Vrindaban had become the target of local, state and federal investigations that concerned, among other things, the sexual abuse of children by staff members at its school and the murders of two devotees.

The resulting federal charges against Mr. Bhaktipada, a senior spiritual leader of the movement, and the ensuing international publicity did much to contravene the public image of the gentle, saffron-robed acolytes who had long been familiar presences in American airports.


In the mid-80s, former members began to accuse Mr. Bhaktipada of running New Vrindaban as a cult of personality. The Hare Krishnas’ governing body excommunicated him in 1987 and New Vrindaban itself the next year. But, proclaiming the community independent of the larger movement, he refused to step down.

In May 1990, a federal grand jury indicted Mr. Bhaktipada on six counts of mail fraud, including using the mail to send followers the counterfeit souvenirs they were to sell, and five counts of racketeering. The most serious racketeering charges centered on the murders of the two devotees, Charles St. Denis, killed in 1983, and Steve Bryant, killed in 1986.

According to court records, Mr. St. Denis was believed to have raped the wife of a New Vrindaban member and to have been killed in retribution. Mr. Bryant, the most vocal critic among the community’s ex-members, had publicly accused Mr. Bhaktipada of condoning the molestation of New Vrindaban’s schoolchildren and of having had sex with under-age boys.

A New Vrindaban member, Thomas Drescher, was convicted of murdering Mr. St. Denis. (Another member, Daniel Reid, pleaded guilty to voluntary manslaughter in exchange for testimony against Mr. Drescher.) In a separate trial, Mr. Drescher was convicted of murdering Mr. Bryant.

Comment: Remember when the Krishnas would swarm in the airport concourses ... looking for handouts and selling religious junk!? Swami Bhaktipada (birth name = Keith Gordon Ham) was the son of a Baptist minister. Website of the Palace of Gold (mentioned in the article). Wiki for Palace of Gold

Muammar Gaddafi: Rotting in State

Libya ends public showing of Gaddafi's body


Fighters guarding Gaddafi's darkening body and that of his son Mo'tassim and his former army chief had placed plastic sheeting under them as fluids leaked into the market cold store in Misrata where they had been taken after their capture and killing near Gaddafi's home town of Sirte on Thursday.

With the door constantly opening to allow a procession of onlookers, the refrigeration unit failed to stop rapid decomposition. Guards handed out surgical face masks against the stench and had sprayed disinfectant over the corpses overnight.

Comment: Barbaric

Proposed DIAPER Act - Rush: "I'm not pooping you"

U.S. Rep. Rosa DeLauro proposed offering free diapers in day cares


DeLauro (D-3rd District) proposed an economic recovery bill that proposes that the federal government distribute free diapers through daycare centers. It's called the Diaper Investment and Aid to Promote Economic Recovery Act -- or DIAPER Act. She cited the cost of diapers, $100 per month, as too much for some families.

“No family should have to choose between buying diapers for their child or buying groceries—but that is exactly what is happening today," wrote in a recent news release.

Limbaugh brought the bill up on his show last week, and said, "I'm not pooping you," and "Here's the story. I kid you not."

"(M)y generation did not go to daycare, and we wore cloth diapers that were washed and reused. But I mean this is taking indoctrination to steps I never dreamed of. Indoctrinate babies early and often in daycare, and you get 'em in daycare by promising free diapers."

Comment: Fill the landfills!

Give Zygi Wilf the Metrodome .... take it or leave it!

Vikings stadium: Let's inject fiscal sanity into the debate


Zygi Wilf and the Vikings are attempting to make their Ramsey County stadium deal sound like a run-of-the-mill, routine proposal. It is not. The Vikings are asking for the No. 1, all-time, biggest taxpayer subsidy of any sports franchise anywhere in American history!

At a time when many families are struggling to pay their bills, the Vikings and their political allies want Minnesotans to put up more taxpayer money than any other community ever — think about that — to subsidize a team owner.


Giving the Metrodome to the Vikings is not a perfect solution, but one that reflects fiscal responsibility and fairness for both the Vikings and the taxpayers of Minnesota. We are by no means alone in wanting a fair resolution. Minnesota voters oppose the use of public money for a new Vikings' stadium by more than 3 to 1 (22 percent favor using public funds, 74 percent oppose). Yet the Ramsey County Board and some state officials are talking seriously of a taxpayer subsidy of over $650 million.


... let's compare this Metrodome transfer proposal to the Los Angeles options. The best of the Los Angeles stadium proposals is to give Zygi Wilf the land on which to build his own stadium, at his expense. We would give him the land with a stadium already on it, and he could improve, enhance, or rebuild it as he desires.

Los Angeles offers no public subsidy. We offer no public subsidy.


This Minnesota option is a reasonable, competitive alternative. And, under our proposal Wilf avoids a $250+ million NFL "relocation fee," and he gets to keep his integrity and a truly loyal fan base.

At a time when most Americans, including people from Occupy Wall Street and the Tea Party, are angry at outrageous corporate bailouts, some politicians want to force Minnesotans to pay for the biggest corporate subsidy in sports history. That's incredible.

Comment: Seems like a reasonsable approach.


It’s All Connected: An Overview of the Euro Crisis

It’s All Connected: An Overview of the Euro Crisis

Comment: Interactive NYTimes graphic. Image Source

Fall of the House of Siegel

The Wild Ride of the 1%


The Siegels' dream home, called "Versailles," after its French inspiration, is still a work in progress. Its steel-and-wood frame rises from the tropical suburbs of Orlando, Fla., like a skeleton from the Jurassic age of real estate. Ms. Siegel shows off the future bowling alley, indoor relaxing pools, five kitchens, 23 bathrooms, 13 bedrooms, two elevators, two movie theaters (one for kids and one for adults, each modeled after a French opera theater), 20-car garage and wine cellar built for 20,000 bottles.

At 90,000 square feet, the Siegels' Versailles is believed to be the largest private home in America. (The Vanderbilt family's Biltmore house in North Carolina is bigger at 135,000 square feet, but it's now a hotel and tourist attraction). The Siegels' home is so big that they bought 10 Segways to get around—one for each of their eight children.


Versailles sits half-finished and up for sale. The privately owned Westgate Resorts was battered by the 2008 credit crunch and real-estate crash. It had about $1 billion in debt—much of it co-signed by the Siegels.

The banks that had loans on Versailles gave the Siegels an ultimatum: Either pay off the loans or sell the house. So it's now on the market for $75 million, or $100 million if the buyer wants it finished.


The Siegels' Versailles may be the nation's most extravagant monument to the debt-fueled, status-crazed real-estate binge of the past decade. Like many Americans, the Siegels borrowed too much, spent too much and bet that values could only go higher. Even in the age of excess, Versailles was excessive.


The Siegels show how the cycle of high-beta wealth plays out in the lives, values and economy of the rich. Before 2008, Mr. Siegel's company, Westgate, was earning hundreds of millions of dollars a year for the family. The Siegels poured $50 million into Versailles, which seemed reasonable at the time. When friends asked David why he wanted to build the largest home in America, he had a simple answer: "Because I can."

"I was cocky and I didn't care what the house would cost because I couldn't spend all the money I was making," Mr. Siegel says.

When Westgate couldn't roll over its debts, he had to bail out the company with hundreds of millions of dollars of his own. He fired half of his workforce of 12,000 people and sold off assets. Mr. Siegel says that today, Westgate is "highly profitable" and demand is strong, but revenues are still half their peak levels due to lack of financing.

The Siegels took their first hard look at their own lifestyle. They fired 14 of their 15 housekeepers and lost their private chef, named "chef Jeff." They pulled their kids out of private school and put them in the local public school.


Ms. Siegel ... does miss one luxury—the Gulfstream. After they defaulted on the $8 million jet loan, the banks seized the plane. The Siegels can use it only occasionally, with the banks' permission.

Recently, the family boarded a commercial flight for a vacation, making for some confusion. One of the kids looked around the crowded cabin and asked, "Mom, what are all these strangers doing on our plane?"

Comment: Not feeling sorry for them. More on: David Siegel’s Unfinished Mansion Raises the Bar on Excess. Photos from the WSJ

HSA plans on the rise

Choosing the Right Health-Care Plan


At General Electric, rising costs are helping drive a conversion to high-deductible plans, which tend to have lower premiums and may prod employees to seek out cheaper forms of health care. One plan, for instance, has a $1,600 annual deductible for a single person, along with premium contributions and annual caps on out-of-pocket payments that vary according to the employee's income.

All of the plans offered by GE are paired with accounts that workers can use to cover the cost of the deductible, either a health reimbursement account to which the company contributes, or a health savings account (HSA) to which the employee contributes. Both can accumulate money tax-free.

Next year, such plans will be the only option for the roughly 300,000 active employees and dependents who receive coverage from GE. "We needed to do this to remain competitive" by starting to rein in health-care costs, says Ginny Proestakes, director of health benefits at GE.

Smaller employers like Watauga County, N.C., are following suit. The county will put all of its 280 employees and retirees into high-deductible plans. The county has seen a falloff in revenue from sources such as sales taxes because of the slow economy, while health costs continue to mount. "It's fundamental economics," says Deron Geouque, county manager. "We can't continue to absorb those increases."

The transition to a high-deductible plan can be abrupt for people like Debbie Jankowski, 38 years old, a school counselor in Racine, Wis. When a new contract with the school district kicked in July 1, the deductible for her family of five went from zero to $4,000. The midyear changeover didn't allow a chance to add more money to her tax-free flexible spending account or start up an HSA, she says: "It was such a shock."

Comment: My company's 2012 plans are high deductible.


Prosper - 4 year experience wraps

My 4 year experience with Prosper.com ends this week. Conclusions first .... details second.


  • I made money. Not as much as I had hoped.
  • I learned a lot and I had fun! I had my own bank. I made mistakes but it was a worthwhile education
  • Would I recommend this to another investor? Answer: YES!
  • Why am I ending "the experiment"? Answer: I've moved on to equity investing. I think that an investment in 100 shares of AT&T is a better investment than an equal amount in Prosper.

Details with screen shots:

  • I deposited $ 4,238.34 and withdrew $4,458.23 for a gain of $ 219.89.
  • My guestimate is that my average loan period was 24 months (some went a full 36 months ... many paid off early). So my gain was 2.6%.
  • An explanation of the 83 notes sold: I invested in 83 loans at $ 25 each. When I decided to get out of Prosper.com I sold all 83. Some sales were net positive and some were at a minimal lost (a matter of cents). These 83 were basically a wash.
  • 79 loans were paid off (the report shows 78 but one of the ones that defaulted finally paid off in full
  • 11 loans defaulted. One of those later paid in full (see Deadbeat list - below)

Deadbeat list (partial ... click for larger)

Would I do it again and recommendations
  • I would like to do it again. I would like to invest $ 10,000 as Prosper experiment # 2.
  • I would only invest in AA and A loans.
  • With uber-diversification of $ 25 per loan. 400 loans of $ 25 teach
  • I think that such an investment strategy would provide returns of between 5 and 7%
  • For borrowers with average credit Prosper.com is a good way to borrow at a rate that bests the bank


Steve Jobs gave up Christianity at age 13

Jobs questioned authority all his life


The book says Jobs gave up Christianity at age 13 when he saw starving children on the cover of Life magazine. He asked his Sunday school pastor whether God knew what would happen to them.

Jobs never went back to church, though he did study Zen Buddhism later.

Comment: Feed my starving children (one of many Christian social agencies)


Blue Dog bites on way out the door

Announcing Retirement, Dem Congressman Bashes Obama


Rep. Dennis Cardoza, D-Calif., announced his retirement from Congress this afternoon -- and he issued a scathing parting shot at President Obama's track record on his way out.

In a statement explaining his decision, Cardoza, a leader of the centrist Blue Dog Coalition, said he was "dismayed" by the administration's "failure to understand and effectively address the current housing foreclosure crisis."

"Home foreclosures are destroying communities and crushing our economy, and the Administration's inaction is infuriating," Cardoza said.

A former chairman of the moderate Blue Dog Caucus, Cardoza also bemoaned the increasing partisanship in Washington, and blamed the media for fueling the ideological divide in the country, not giving enough attention to moderates.

Comment: I'm a fan of the Blue Dogs!

The new capital of Pennsylvania is .... Pennsylvania

Governor Moves to Take Fiscal Control of Pennsylvania Capital


The fate of Pennsylvania’s financially troubled capital, Harrisburg, took another twist in a long road on Thursday, when Gov. Tom Corbett signed a bill permitting him to place the city into receivership.

By signing Senate Bill 1151 into law, Mr. Corbett opened the way for him to declare a fiscal emergency in Harrisburg. The move was an attempt by the governor to wrest control of the city’s finances away from local government, which has been stuck in a standoff for months. The City Council has repeatedly rejected efforts by Mayor Linda Thompson to impose a financial recovery plan, and last week, it filed a Chapter 9 petition in federal bankruptcy court, a move that Ms. Thompson and Mr. Corbett immediately declared illegal.

Kelli Roberts, a spokeswoman for the governor, said Mr. Corbett planned to file a petition in state court to place the city into receivership but probably not this week.

The city’s troubles stem from a failed trash incinerator project that has saddled it with $310 million in debt, more than quadruple its annual budget.

Members of the City Council who have opposed Ms. Thompson’s plans have also fought the bill, saying it robs Harrisburg of self-rule.

Comment: Normally when one thinks of government mismanagement Detroit, Chicago, Illinois, and California come to mind.


Message to the N.B.A. - "Nobody cares!"

The NBA standoff pits the elite vs. the elite


Kevin Garnett, 35, the Boston Celtics forward who has had a stellar career, was with the Minnesota Timberwolves in 2004 when a teammate, Latrell Sprewell, augmented the national stock of unfortunate pronouncements. Dissatisfied with a three-year, $21 million contract extension offer, Sprewell said: “I’ve got my family to feed.”

Remembering the ridicule that Sprewell received, Garnett must know the players’ public relations problems as their union, with his emphatic support, tussles with team owners over, among other things, the players’ share of the National Basketball Association’s almost $4.5 billion in revenue last season. With 25 million Americans unemployed, underemployed or too discouraged to seek employment, why should anyone care that fewer than 450 jobs are jeopardized by a labor dispute? The jobs are those of America’s highest-paid professional athletes. NBA players’ average salary is $5.1 million, and even those receiving the NBA minimum ($474,000) are in the highest tax bracket.

Bryant Gumbel compares David Stern to “plantation overseer”


Stern’s version of what’s been going on behind closed doors has, of course, been disputed. But his efforts were typical of a commissioner, who has always seemed eager to be viewed as some kind of modern plantation overseer treating NBA men as if they were his boys. It’s part of Stern’s M.O. Like his past self-serving edicts on dress code or the questioning of officials, his moves are intended to do little more than show how he’s the one keeping the hired hands in their place.

Comment: As my wife (not even an NBA fan) said yesterday - "nobody cares!". The NCAA is a better sport anyway!

The Armed Citizen

Clerk in Fla. kills would-be robber, saves baby


A convenience store manager grabbed a gun from under the counter and shot a robber in the knee when the man scooped up the clerk's infant daughter, deputies and family members said Wednesday.

The robber tried to get into the cash register Tuesday afternoon at Del's 24-Hour Food Store in Naples but he couldn't open it. He grabbed a stroller with Elizabeth Easterly's 1-year-old in it and headed for the door, according to a sheriff's report and family members. Easterly shot the man and he died at a hospital.

Comment: Because the cops aren't everywhere (and nor should they be!)

"I Hate Stuff"

Comment: A less than coherent message. Sent to me by Dan Stahl (thanks Dan!)

Things I hate:

Note to Rick Perry

Las Vegas GOP debate: Rick Perry says Mitt Romney hired 'illegals' for his home


Rick Perry just turned to Mitt Romney and accused him of being a fraud on immigration issues, saying, "“Mitt, you lose all of your standing, in my perspective, because you hired illegals in your home … The idea that you stand here before us … is on its face, the height of hypocrisy.”

This is a reference to a Boston Globe story from 2007 that a company that Romney used for years for land-scaping had used illegal immigrants.

Romney has clearly gotten testy and close to angry, asking for time intervention from moderator Anderson Cooper, and saying he's never "hired an illegal in my life...It's been a tough couple of debates for Rick, and I understand that, and he's gonna get testy."

Comment: Rick, you're losing your credibility here. I'm just a small guy but by your calculation I've probably hired illegals myself. I've had my house re-roofed twice. I don't think one of the roofers spoke English. I tried to offer them a cold Coke and it did not translate. I have yard workers in my yard about 5 times a year. The major time is when they do the Spring cleanup. A crew of workers arrive and work in my yard for several hours. They don't speak English. How do I know if they are legals or illegals. I go to the car wash (won't name it) and all the workers appear to be Mexicans. So make your points but don't twist the truth!

The world's first megawatt-size wind turbine

Oct. 19, 1941: Electric Turbines Get First Wind


The American windmill, as it was called, was simple and Western and rugged. Its shape hardly changed after key 1880s experiments by Thomas Perry resulted in the founding of the Aermotor company, which dominated the industry thereafter.

But that’s not the kind of turbine that Putnam had in mind. After looking into the designs of the past, he immediately decided that the economics of scale dictated that he build a wind turbine with 75-foot blades, the largest in the world. It would generate more than a megawatt of power and feed it on to the grid, working in tandem with a hydroelectric plant to even out the intermittency of the wind and the seasonality of water generation.

No one had ever pulled off that balancing act before, and most people working in the wind industry were probably too sane to try.

It’s important to understand how ridiculously grand the project really was. Its scale — 10 times as powerful as the very largest turbine and a thousand times more powerful than most of them — was almost unimaginable.


“Vermont’s mountain winds were harnessed last week to generate electricity for its homes and factories,” read the Sept. 8, 1941, issue of Time, jumping the gun a bit. “Slowly, like the movements of an awakening giant, two stainless-steel vanes — the size and shape of a bomber’s wings — began to rotate.”

The turbine ran through hundreds of hours of testing up to 1943, often pumping power onto the Central Vermont Public Service Corporation’s electrical grid. The project’s engineers were sure that, technically, the machine worked.

The Smith-Putnam wind turbine stood as a testament to the power of human — and American — ingenuity. A decade before, Soviet engineers had built the world’s largest wind turbine, a 100-kilowatt machine. Now the Yanks had constructed their own, 10 times more powerful.

Time concluded its article on the project with a hopeful half-prediction, “New England ranges may someday rival Holland as a land of windmills.” This was, after all, merely the prototype for whole lines of turbines that would be more resistant to German bombs than a centralized coal plant.


At exactly 3:10 a.m. on March 26, 1945, after more than 1,100 hours of operation, the Smith-Putnam turbine experienced an epic failure. One of the turbine’s blades broke clean off and went sailing 750 feet through the night.

Comment: Wiki article. Interesting articles.


Worst Ads

And the Worst Ad of 2011 Is...

Comment: Click link above for other "stinkers"

Who are the 1 percenters?

Who are the 1 percent?


the top 1 percent of American households had a minimum income of $516,633 in 2010 — a figure that includes wages, government transfers and money from capital gains, dividends and other investment income.

That number is down from peak of $646,195 in 2007, before the economic crisis hit, all adjusted to 2011 dollars, according to calculations by the Tax Policy Center. By contrast, the bottom 60 percent earned a maximum of $59,154 in 2010, the bottom 40 percent earned a max of $33,870, while the bottom 20 percent earned just $16,961 at maximum. As Annie Lowrey points out, that gap has grown wider over time: “The top 1 percent of households took a bigger share of overall income in 2007 than they did at any time since 1928.” (And in New York City, it’s even more skewed: the top 1 percent have an average of $3.7 million in income.)


By contrast, the poorest households were experiencing declines in net worth even before the recession hit. In 2007, the bottom 20 percent of households had an average (negative!) net worth of –$13,800 in 2007, which fell further to –$27,200 in 2009. Altogether, “average wealth of the bottom 80 percent was just $62,900 in 2009 — a dropoff of $40,900 from 2007,” EPI writes. That means the wealthiest 1 percent held an average of 225 times the wealth of the average median household in 2009 — a ratio that was 125 in 1962.

Interestingly, just as Occupy Wall Street is bringing their grievances about this growing gap to a broader public, the Democratic Party is re-adjusting it’s definition of “rich.” As my colleague Lori Montgomery reports, Senate Democrats have ditched President Obama’s plan to raise taxes on households who have more than $250,000 a year for a proposal to tax those who earn more than $1 million a year. Those who have a household income of $250,000 wouldn’t fall in the top 1 percent. But those who have incomes of more than $1 million would — at least outside New York City.

Where Do You Rank as a Taxpayer?


One percent of taxpayers reported almost 17% of all taxable income. But that same tiny group also kicked in 37% of all the taxes paid. How much do you need to make to be in the top 50% of earners? Just $32,396.

Comment: Calculate where your income ranks: How Your Income Stacks Up. The ultra-rich are easy targets. We (I'm not near there) seem to think they should always pay more! Brings to mind the famous Adrian Rogers quote:

Financial Quote from Adrian Rogers

Friend, you cannot legislate the poor into freedom by legislating the wealthy out of freedom. And what one person receives without working for, another person must work for without receiving. The government can’t give to anybody anything that the government does not first take from somebody. And when half of the people get the idea they don’t have to work because the other half’s going to take care of them, and when the other half get the idea it does no good to work because somebody’s going to get what I work for. That, dear friend, is about the end of any nation.”


Wells Fargo earnings: Deposits up ... Loans weak

Profit Rises at Wells Fargo


San Francisco-based Wells missed analyst earnings expectations for the first time in over two years, and two measures closely watched by investors—revenue, or the income a bank accrues before expenses, and net interest margin, or the spread the bank earns between the funds it borrows and the money it lends out—declined from a year earlier.

The disappointing quarter from Wells, the fourth-biggest U.S. lender by assets, is the latest sign of a banking industry struggling with a weak economy that saps loan demand and low interest rates that constrain profit opportunities from deposits. Bank shares, which have been under pressure throughout 2011, tumbled anew amid signs European leaders won't be able to fully resolve by next week the sovereign-debt problems that have weighed on markets.

Shares of Wells Fargo, the most valuable U.S. financial firm by market capitalization, dropped $2.25, sliding 8.4%, to $24.42 in 4 p.m. New York Stock Exchange composite trading.

Wells Fargo's Margin Slips


Wells Fargo & Co.'s first disappointing quarterly results in more than two years are a particularly bad omen for other banks because of a continuing slide in the company's net interest margin.

Net interest margin, or the spread earned between the funds borrowed by a bank and the money it lends out, is one of the U.S. banking industry's biggest earnings engines.

At Wells Fargo, based in San Francisco, net interest margin fell to 3.84%, the fourth consecutive decline. Wells Fargo blamed the problem on its inability to lend enough of the deposits pouring into the bank. The decline overshadowed a 21% jump in third-quarter net income, which rose to $4.1 billion, as Wells Fargo's deposit base expanded and nonperforming assets fell. It said its growth in loans and capital was "solid."

Wells Fargo shares sank 8.4%, or $2.25, to $24.42 in New York Stock Exchange composite trading at 4 p.m.

Analysts and investors were particularly surprised because Wells Fargo long has been considered one of the least vulnerable banks to margin pressure because of its low-cost deposits and steady lending.


Wells Fargo's net interest margin still is better than the 3.59% average of banks with more than $1 billion in assets, according to the latest figures from the Federal Deposit Insurance Corp. In last year's third quarter, Wells Fargo's net interest margin was 4.25%.

Analysts at Keefe, Bruyette & Woods Inc., a research firm, expect net interest margins to be down across the board in the third quarter. The biggest declines are projected at regional banks such as U.S. Bancorp, PNC Financial Services Group Inc. and KeyCorp.

Deposits at Wells Fargo jumped 10% from last year's third quarter to $850 billion, but total loans rose just 1%.

The strongest loan growth came from loans to businesses. Outstanding business loans surged 7.3% compared from last year's third quarter, but the yields on such loans fell.

Wells Fargo executives said the latest deposit growth is a sign of strength that will pay off when the economy recovers.

Comment: We have limited exposure to WFC.

Bloomberg: "The Constitution doesn’t protect tents"

Bloomberg Says ‘Tent City’ Goes Beyond Free Speech


“The Constitution doesn’t protect tents,” he said at a news conference in Queens. “It protects speech and assembly.”

The mayor expressed concern that those exercising a “right to be silent” might be getting drowned out amid the din of the protests.

“We can’t have a place where only one point of view is allowed,” he said. “There are places where I think it’s appropriate to express yourself, and there are other places that are appropriate to set up Tent City. They don’t necessarily have to be one and the same.”

Comment: Zuccotti Park is private property - owned by Brookfield Office Properties


Bert and Ernie

We have 2 of them! Kathee still being tolerant. She says if she sees any more that WWIII will ensue (beatings with a broom, shop vac, etc). Pics taken last night at about 8:00 p.m. Click on images for larger


Collection of OWS videos and photos

Occupy Highlights


The vision for OWS has crystallized, synthesized, and otherwise materialized. In a nutshell, the participants are angry. At everything (but especially Wall Street).

And so if flows that they should set up camp in public parks, beat drums, create mounds of stinking garbage, smoke pot in public, scream at people who make money, break the law, ridicule Jews, demand we abolish the military, and just about everything else under the sun.

Comment: "a collection of videos and photos that depict a cross section of the OWS useful idiot". Perhaps there are Zombies! Just one video (above) posted. One more ... "Pay my college tuition"

California's toxic business environment

How California Drives Away Jobs and Business


A suffocating regulatory climate has a lot to do with the state's bad business numbers. Writing in the California Political Review this summer, Andrew Puzder, chief executive of California-based CKE Restaurants—which operates 3,000 eateries nationwide—called his company's home state "the most business-unfriendly state we operate in."

CKE, which runs Hardee's and Carl's Jr., has stopped opening restaurants in California, where the regulatory process can take up to two years. But it plans to open 300 in Texas, where the start-up time can be six weeks and opening costs $200,000 less than in California.

Comment: There's more to job creation than low taxes .... legal and regulatory reform is important too.

Soldiering from Viet Nam to Afghanistan

The Old Soldier Who Didn't Fade Away


Staff Sgt. Don Nicholas disproves the old refrain: Old soldiers do not, in fact, fade away. They re-enlist.

At 59, Sgt. Nicholas is the oldest of the 6,000 soldiers in the 25th Infantry Division in eastern Afghanistan, the Army says. And he is probably one of the very few Vietnam vets now back for more in Afghanistan. He's certainly the only one who saw first-hand the ugly end of that war from the roof of the U.S. embassy in Saigon.

"It's really not a fascination with war itself," Sgt. Nicholas explains. "It's more trying to keep people from getting killed. I'm taking the spot of some 19-year-old."

Raised in Magnolia, Ohio, Sgt. Nicholas dropped out of high school and joined the Marines in 1971, expecting—almost hoping—to go to Vietnam. At the time he was a believer in the domino theory. He remembers telling a local TV reporter at the recruiting station that he didn't want his children "living under communism."

The Marines sent him to the Vietnam War, but not to Vietnam. He was stationed on an aircraft carrier in the Tonkin Gulf, watching planes take off to bomb a shore he couldn't quite see.

"It was kind of disappointing that the war was winding down," he says. "I was a Marine rifleman, and I didn't get to do what I was trained to do."

The U.S. withdrew its combat forces from Vietnam in 1973. The following year Sgt. Nicholas re-enlisted and maneuvered his way to the Marine detachment at the Saigon embassy.

Comment: You have to admire the guy! My own son started with the Marines and now is in the Army reserves

The first Zombie

How an obscure Haitian bogey rose from the dead to conquer literature and popular culture


Journalist William Seabrook introduced zombies to the American mainstream in his 1929 best seller "The Magic Island," which purported to be an eyewitness account of Haitian voodoo practices. Seabrook was a larger-than-life adventurer-explorer-drunk-blowhard: He joined the French army for World War I, was awarded the Croix de Guerre, hung out with Aleister Crowley, dabbled in witchcraft and indulged in minor cannibalism (if you must know: "like good, fully developed veal").

In "The Magic Island" he reported on how in Haiti, "a soulless human corpse . . . is taken from the grave and endowed by sorcery with a mechanical semblance of life" for the purpose of "setting it dull heavy tasks, and beating it like a dumb beast if it slackens." In Seabook's story the entity profiting from the necromancy wasn't some witch doctor, but an American sugar company, whose cane fields were tilled by the undead. The critique of such companies' treatment of Haitian labor could hardly have been sharper. The original zombie wasn't a predator, but a brutalized laborer.


The first zombie movie, "White Zombie," premiered in 1932 (zombies were thought of as black, so a white zombie was a novelty).

Comment: I'm not a fan of Zombie movies but I have seen one and I thought it was funny: Shaun of the Dead