Wednesday, August 16, 2017

We Know What We Are Talking About

The revelation that U.S. consumer debt is nearly a record $13.0 trillion made for fevered commentary, but Matt Drudge's blaring headline prompted a chuckle:

If you see the absurdity of showing the ".00", then you, dear reader, have a feeling for significant digits.

Here's an accounting joke that reflects the same concept:
An accountant visited the Natural History museum. While standing near the dinosaur, he said to his friend, “This dinosaur is 2 billion years and 10 months old.” “Where did you get this exact information?” the friend asked. “I was here 10 months ago, and the guide told me that the dinosaur is 2 billion years old.”
We give out precise information because people then think that we know what we are talking about.

Tuesday, August 15, 2017

Another Fusion Place

Tugboat Fish & Chips is a small chain restaurant in California. The Lincoln outlet, in a creative effort to maximize uses of the inventory, offers sushi as well as fish & chips. We ordered one of each; both were good--and 20% lower than Bay Area prices.

You may sniff at the mixed menu, dear reader, but just think of it as another Asian fusion place.

Monday, August 14, 2017

Recycling: But We Meant Well

Foster City, August, 2016: not the tidiest business
Fans (hi, Mom!) of this blog know that every few months we bag up our cans and bottles and turn them in for cash. It was always mystifying how the process made sense economically---the consumer pays 5 or 10 cents per bottle CRV ("California Redemption Value") going in and gets a little of it back if he bothers to haul them to the recycling centers. The difference supposedly pays for the operating costs of the recycler, who also gets revenue from selling the used bottles and cans and a subsidy from the government. It turns out that the house of cans is about to topple.

The resale value plus the government subsidy are still not enough to keep the recyclers in business: [bold added]
the value of recyclables has decreased in recent years, meaning [recycling business owner Ors] Csaszar makes less on the collected bottles and cans he sells. On top of that, state subsidies meant to offset the cost of recycling have failed to keep pace with the rising costs of doing business.

Hundreds of recycling centers have shuttered in the past two years across the state, resulting in millions of plastic, aluminum and glass containers going to landfills. In the past two years more than 500 recycling centers closed their doors, leaving 1,650 throughout the state, according to the California Department of Resources Recycling and Recovery, or CalRecycle.
To sum up, recycling is a government-mandated environmental program that:
  • adds $millions to the cost of consumer products;
  • created an industry that is unable to survive without a government subsidy;
  • is so uneconomic that even with the subsidy nearly a quarter of the locations have closed (so far);
  • doesn't accomplish what it set out to do anyway ("millions...going to landfills").

    But wait, it gets worse: the government extracts penalties from businesses.
    The law also requires stores that sell the beverages to have a place for consumers to return their bottles and cans within a half mile. If not, the stores themselves are required to either allow customers to recycle there, or pay a $100 a day fee.

    Many stores opt to pay the $36,500 annual fee, saying they are unable to set up a recycling center at their location.
    Consumers lose, businesses lose, the recyclers lose, the environment loses anyway.

    I can't wait to see how California runs single-payer.
  • Sunday, August 13, 2017

    Window to the Future

    As noted in May the 100+ year-old stained glass window (left) over the altar has been replaced. The new window (right) probably won't last as long as version 1, but its longevity is of little concern to me.

    I was baptized in the family church during the Eisenhower Administration. My mother bought me a spot in the columbarium, a few feet from the new stained glass window. Cradle to grave, will I return for my final days?

    I am not a salmon, I am a free man!

    Saturday, August 12, 2017

    Before A Word Has Been Uttered

    (Image from
    In a hypothetical criminal case developed for an experiment, judges went easier on a "remorseful" defendant who was trying to make amends. (Their decisions should have been based on the law and the facts, not the defendant's characteristics.)
    While 87% of the judges upheld the conviction of the extremist Serb, no matter what the precedent, only 41% did for the remorseful Croat. In other words, rulings were driven by the defendant’s personal attributes rather than by legal precedent.

    Even more interesting were the judges’ explanations for their decisions. Did they write about how legal precedent is one thing, but at the end of the day the most important thing is the individual on trial? No. Most cited the precedent if it supported their decision. Others discussed legal or policy matters.
    In other words they made their decision based on emotion or other non-legal factors, then used legal reasoning to support the decision.

    There's a strong suspicion that that is how most of us behave: base a decision on whether we like a person (sometimes merely whether he is in or out of our "tribe"), then justify the decision based on "facts", "reason", and "logic." That is why we usually know what a politician, reporter, or judge will say on a subject before a word has been uttered.

    Friday, August 11, 2017

    In the 21st Century We Still Care a Lot

    One of the running off-camera jokes in Star Trek was the follically challenged Captain Picard: [bold added]
    (Photo from
    At a press conference about Star Trek: The Next Generation, a reporter asked Star Trek creator Gene Roddenberry about casting Patrick Stewart, commenting that "Surely by the 24th century, they would have found a cure for male pattern baldness." Gene Roddenberry had the perfect response.

    "No, by the 24th century, no one will care."
    Finding the causes and cure for hair loss has been slow. While a few men embrace the condition by shaving their remaining hair,
    most men who suffer from male pattern baldness are extremely unhappy with their situation and would do anything to change it. Hair loss affects every aspect of their life. It affects interpersonal relationships as well as their professional life. It is not uncommon for men to change their career paths because of hair loss.
    Minoxidil (brand name: Rogaine) has regrown hair in about 40% of patients. Other sufferers resort to hair transplants and toupees.

    Your humble blogger has long suspected that a hirsute maternal grandfather was the reason he is able to retain his hair past middle age. The science confirms:
    androgenetic alopecia....affects around 80% of men by the time they are 80 years old (and about 50% of women, though it’s less obvious), and is characterized by thinning at the top of the head and receding at the front. Genes are primarily to blame, says [UCLA professor Carolyn] Goh. The most consistent is found on the X chromosome, “which means it came from your mother’s side,” she says.
    But why do I have more hair than my younger brothers? As I was saying, progress has been slow....

    Wednesday, August 09, 2017

    Quiet Diversions

    The North Korean regime may seem completely alien to First-Worlders, but it must have an instinct for self-preservation. North Korea is in the position of the hostage taker who is completely surrounded by a SWAT team; he knows that if he fires a single shot--which may or may not kill his hostage--he will be dead in a second. That's why I'm not worried....much.

    On my list of havens from the world are art museums. Viewing an artwork online is an imperfect substitute for visiting one, but the advantage is that virtual escape is but a click, not a plane ticket, away.

    The Daughters of Edward Darley Boit

    The Wall Street Journal to its credit will occasionally devote space to a lesser-known work of art, in this case ‘The Daughters of Edward Darley Boit’ (1882) by portrait artist John Singer Sargent (1856-1925).
    He set his large-scale composition just inside the main door of the Boits’ Paris apartment. The girls, in the foreground, are in a theatrically lighted space that melts into a darkened interior. Much of the painting’s allure lies in its careful balancing of color. Warmth slips in sparingly, through the caramel tones of a wall and the red of a dagger-shaped screen. Blackness holds the center, drawing the eye beyond the riddle of these four self-possessed children.

    The most we can be confident of is their relative ages. The youngest, seated on the floor, holds a large, pink-cheeked doll and glances slightly away. The eldest stands in the shadows, in profile, next to her second-born sister. Daughter number three, distinguished by her blond tresses, is planted on pipe-cleaner thin legs at the far left, and seems to gaze inward. It is only the second-born daughter, dead center you suddenly realize, who truly looks back, her eyes alert with expectation.

    Her older sister leans against an outsize vase, one of a pair. Flanking the passage into what appears to be a well-appointed parlor, the vases lend a sculptural quality to the three standing figures. A ruffle at the neck of the blond child echoes the fluting on the vases.
    The WSJ art reviewer points us to a Velázquez from two centuries prior:
    He borrowed his structure from Diego Velázquez’s “Las Meninas,” which he had copied on an 1879 visit to Madrid. Both works feature young girls and, unusually, are large and square. Like Velázquez, Sargent overcomes the square’s potentially deadening symmetry with a pleasing off-balance arrangement enhanced by deep space. And, also like him, he upends the conventions of group portraiture by giving each figure room to breathe. A viewer of the Boit daughters could seemingly join 4-year-old Julia on the carpet.
    Las Meninas
    There are beautiful aspects of the world that will long outlive our current "urgent" concerns. Quiet diversions can remind us so.

    Tuesday, August 08, 2017

    Riding the Wave

    We get real estate flyers in the mail and on our doorstep every day. Bay Area houses that once cost $500,000 early this century have tripled in value, which of course means tripled commissions if the 6% standard rate holds.

    Brokers have become increasingly brazen, offering to lower the commission rate a little or saying that they have buyers lined up to buy in our neighborhood (right!). Other companies (see flyer) offer cash for homes; no contingencies mean a quick close for an eager seller.

    We have seen this frothiness before in the stock and commodity markets, not just real estate. The only practical way for the homeowner to take advantage of this real estate bubble is by selling. (Larger investors have financial techniques such as options, partnerships, public offerings, and loans whereby they can "monetize" hard assets.)

    High prices do allow homeowners to take out a large refinancing, but unless they can earn a rate of return that exceeds their new mortgage rate this strategy is unwise. As for us, we have ridden the wave up, and (sigh) we will ride the wave down.

    Monday, August 07, 2017

    De-fanging Mueller

    Inside the Beltway the tempest du jour is whether Special Counsel Robert Mueller will find the smoking gun that will bring down Donald Trump.

    Your humble blogger, for the record, thinks the President was set up. Mr. Trump thought that the special counsel would clear him of charges of Russian collusion (whatever that means). But Mr. Mueller's expansive charter, executed by high-priced Democratic lawyers, threatens not only the Administration but also Mr. Trump's business empire, his friends and his family. Given enough time and money they will find something on someone (such as lying to a grand jury about a workplace affair, the basis for the impeachment of Bill Clinton).

    The Beltway folks say that he can't fire the Special Counsel, though the Constitutional arguments why he can't are above my pay grade.

    Another part of the Constitution, Article 2, Section 2, can effectively fire Mr. Mueller by negating all his activities. That section grants the President unlimited power to pardon anyone of any crime against the United States. Imagine:
    I, Donald J. Trump, will pardon any and all persons indicted by the grand jury(ies) convened by Special Counsel Robert Mueller. If you are indicted for failing to produce documents, I will pardon you. If you are indicted for not answering a question, I will pardon you. If you are indicted for not appearing as a witness, I will pardon you. Let's end this farce and move on.
    It seems too simple, and that's why it will never happen.

    Teachable Moment for the Wealthy

    Presidio Terrace is 4 miles from the Golden Gate Bridge
    I know I'm being unkind, and it's wrong to mock the woes of probably-decent people whom I don't know anything about, but the owners of thirty-five (35) San Francisco mansions are at the mercy of two San Jose residents who paid off a delinquent $14-per-year property tax bill on their private road (bold added):
    Tina Lam and Michael Cheng snatched up Presidio Terrace — the block-long, private oval street lined by 35 megamillion-dollar mansions — for $90,000 and change in a city-run auction stemming from an unpaid tax bill. They outlasted several other bidders.

    Happy street-owners Tina Lam and Michael Cheng (SFGate)
    Now they’re looking to cash in — maybe by charging the residents of those mansions to park on their own private street.

    ...San Jose residents Cheng and Lam wound up with the street, its sidewalks and every other bit of “common ground” in the private development that has been managed by the homeowners since at least 1905. That includes a string of well-coiffed garden islands, palm trees and other greenery that enhance the gated and guarded community at the end of Washington Street, just off Arguello Boulevard and down the hill from the Presidio.
    Periodically we read about an elderly person being thrown out of her home because of a small unpaid property-tax bill. Rich people can fall victim to the same process; they won't be in danger of losing their homes, just being able to access them.

    Teachable moment: you gotta pay attention to what's happening--or not happening--at your homeowners' association.

    Sunday, August 06, 2017

    Year 72: The Mushroom Cloud's Silver Lining

    (Image from Atomic Heritage Foundation)
    Horrible though it was, Hiroshima probably saved more lives than it took. As I wrote two years ago,
    There's a good chance that I owe my existence to the bomb. My father, who celebrated his 90th birthday in June, would have been part of the invasion of Japan. (Dad served in the post-War occupation.)
    Hiroshima and Nagasaki demonstrated the bomb's awesome destructive power to such an extent that nuclear weapons have never again been used in wartime. The fear seems to be receding, however, and our vacation from history may be ending.
    “We knew the world would not be the same. A few people laughed, a few people cried. Most people were silent. I remembered the line from the Hindu scripture, the Bhagavad-Gita; Vishnu is trying to persuade the Prince that he should do his duty, and to impress him, takes on his multi-armed form and says, 'Now I am become Death, the destroyer of worlds.' I suppose we all thought that, one way or another.” ― J. Robert Oppenheimer

    Saturday, August 05, 2017

    Over My Head

    The solar-panel and battery system that we saw in last week's visit to the Tesla showroom was intriguing. But the disruptive product just may be Tesla's solar roof.

    Replacing a conventional roof can run into the tens of thousands of dollars. Tesla's solar-roof tiles cost about the same as conventional tiles (see Bloomberg chart above), so why not get "free" solar energy if you are going to replace the roof anyway?
    Tesla’s basic premise is to make solar ownership more attractive and affordable by eliminating the need to install both a roof and solar panels. Tesla says it will manage the entire process of solar roof installation, including removal of existing roofs, design, permits, installation, and maintenance. The company estimates that each installation will take about a week.
    How Elon Musk keeps coming up with these ideas---and executing them---is over my head.

    The tiles look attractive (CNet image)

    Friday, August 04, 2017

    ...They Just Evaporate Away

    Yesterday we noted that an iconic San Francisco beverage company will be bought by a large foreign rival.

    A similar event occurred 32 years ago. Headline: Nestle Acquires Hills Brothers Coffee.

    Back in the 1970's, before there was a Starbucks on every corner, specialized "coffee shops" didn't exist. Coffee was served as an accompaniment to breakfast at Howard Johnson's and Denny's (there was also a pretty good pancake chain called Sambo's that went out of business for reasons having nothing to do with its food).

    Most Americans bought cans of ground coffee and made the brew at home in a percolator. General Foods' Maxwell House ("good to the last drop") was the largest seller, and Hills Brothers was a strong regional brand. As late as the 1980's the smell of roasting coffee filled the air along the Embarcadero.

    Its claims to fame are two-fold: in 1900 the company reportedly invented vacuum-packaging, which enabled coffee suppliers to maintain freshness when shipping product long distances; the "taster"--an Arab (some believe he's a Turk) drinking coffee--is one of the most distinctive logos in the food and beverage industry.

    32 years later one has to look hard to find any Hills Brothers products. Let's hope that a similar fate does not befall Anchor Steam.

    Thursday, August 03, 2017

    Another San Francisco Brand Gets Bought

    Iconic San Francisco company Anchor Steam will be acquired by Sapporo:
    Anchor Brewing Co. is considered the leading pioneer of the craft beer movement, and is credited with reviving and modernizing some of today's most popular American beer styles. The price of the deal was not disclosed....

    Anchor Brewing has proven itself as a company of firsts. Established in 1896, it bills itself as America’s “first and oldest” craft brewery and has long been San Francisco’s homegrown pride. It weathered the 1906 earthquake and is the inventor of the California common style of beer, which it trademarked as steam beer.
    Tasting Anchor Steam during the 1970's was a revelation. American beers, e.g., Bud, Miller, Coors, were okay (in those days your humble blogger didn't regard any beer as bad). European beers were complex, had character, and were costly. Anchor Steam had a sharper taste than American bland; I liked it--didn't love it--but it was nice to have a choice that wasn't too expensive.

    Both companies say that Anchor will retain its distinctiveness. We've heard that before, but here's hoping.