Understand One of the Local Teams is Playing This Sunday....

We Are All Corporations Now

Owners and advisors of small businesses are always monitoring the costs of expansion. Renting additional space and buying a new computer system are examples of familiar cost-benefit calculations that need to be performed.

Federal corporate income tax rates (Form 1120)

But there are many costs that accelerate with size. Examples are the San Francisco tax on payrolls larger than $150,000, higher Federal tax rates on higher corporate income (much like the rate schedule for individuals), or even mandated e-filing for eleven or more tax returns.

One number that is likely to influence decision-making is the 50-employee threshold for company-paid health insurance under the Patient Protection and Affordable Care Act, aka "Obamacare". (Failure to comply can result in fines of up to $2,000 per employee.)

We will bet our bottom dollar that there will be thousands of small businesses that will avoid having 50+ employees like the plague, not only because of the out-of-pocket health-care cost but also because of the regulatory headaches.

One IT entrepreneur foresees a dramatic restructuring of small business because of the PPACA:

"Going protean" offers a better strategy for many businesses. Owners of protean companies create a core of strategic employees who manage the big-picture elements of the enterprise—the culture, business model, product mix, vision, strategy, etc. This core then outsources the business tasks to other corporations. [snip]

It's not about replacing employees with contractors, but about replacing employees with corporations.

These new contracts will be a mix of large corporations, small businesses, micro-corporations and even nano-corporations (an individual doing business as a corporation). But to be a protean solution, it must involve a corporation-to-corporation relationship. Any substitute—e.g., a sole proprietorship—is only a time bomb because eventually the government will pressure you to turn any so-called 1099 contractors into employees.

The IRS is already aware of simple work-arounds, such as using temp agencies and part-time workers, to escape the 50-employee rule. It has threatened "anti-abuse" rules and penalties, the thrust of which will be to examine the substance, not the form, of working relationships between the hirer and the hired.

However, the "protean" corporate-to-corporate system that is forming before our eyes involves real changes in rights and responsibilities of all parties and is very likely to withstand legal challenges. Many of us, as owners of companies, will become our own bosses. And we will have President Obama to thank for setting us free. © 2013 Stephen Yuen

G-o-o-l-l-y!!

Hawaii resident Jim Nabors married his longtime male partner earlier today. Although his sexual orientation was known by seemingly everyone in Hawaii since he moved there over three decades ago, Jim Nabors, surprisingly until now, "has never confirmed to the media that he is gay." (His reticence seems quaint, does it not?)

Jim Nabors played the title character in Gomer Pyle, U.S.M.C., one of the nation's most popular comedies in the Sixties. Gomer was a naive, good-hearted private who unintentionally got the better of drill Sgt. Carter, who never could drum him out of the Corps. On a few occasions Jim Nabors would step out of his bumbling character and belt a ballad in a powerful baritone. His singing talent led to a successful musical stage and TV career, but to the public at large he will always be Gomer Pyle. We hope that he and his partner have much happiness.

Heads They Win, Tails You Lose

The shysters are at it again. Wall Street firms have been marketing bonds---traditionally a conservative investment--that have yields souped up by derivatives in Apple stock. These "equity-linked structured products" carry hidden risks that are manifested when Apple drops more than 20% (it has plunged nearly 40% since September). One example:

Consider the "trigger yield optimization notes" issued by UBS on Sept. 26. The face value of each note was set at $700.71, almost precisely Apple's closing price three days earlier. The one-year notes pay monthly interest at an 8.03% annual rate, or about eight times what the average short-term bond fund offered at the time, according to Morningstar.

The notes are structured to repay the full $700.71 when they mature this Sept. 26, with one big exception. If Apple's stock closes below $595.60 on Sept. 23, then investors don't get their original principal back. Instead, they get one share of Apple. But Apple hasn't closed above $595.60 since Halloween.

For investors to get all their money back, Apple's shares must climb 35%. As of now, investors would lose at least 30%, even after counting the income they will earn.

As the article notes, the loss isn't certain. If Apple gets back above $595.60 by September 26, 2013, the investor will recover his principal and keep his interest payments.

One may not feel too sorry for bond investors, who are supposed to be wealthy and financially sophisticated. But if they were indeed that knowledgeable, they could have put together the instrument themselves at much less cost.

Let's assume that you wanted to construct a high-yield investment in the amount of $450 (approximately today's closing price of Apple).

1) purchase a $450 one-year Treasury bill that yields 0.16% (72 cents).

2) sell a one-year Apple $405 put option for $30.35. The risk is that the put will be exercised if Apple drops more than 10% from $450, i.e., below $405, in one year.

January, 2014 Put prices on 1/28/2013.

If Apple closes above $405 in January, 2014, the put expires unexercised. The total income ($31.07) of the structure produces a yield of 6.9%.

If Apple falls, say, 20% to $360, then the loss on the deal, net of the income, is $360+$30.35+$.72 - $405 = $(13.93), which is (3.1%) of the investment.

Under the Wall Street structure, the investor receives one share of Apple instead of his principal; effectively, he is "put" Apple at $450, not $405 as in the self-constructed example. His loss would be $58.93, or (13.1%).

Obviously, the difference was pocketed by the structurer. Perhaps calling them shysters was being too kind. © 2013 Stephen Yuen

Multistate Tax Quandary

Phil Mickelson's $7 million house in San Diego.

Last Sunday golfer Phil Mickelson committed the sports version of the Kinsley political gaffe ("A gaffe is when a politician tells the truth - some obvious truth he isn't supposed to say.") Phil Mickelson, a resident San Diegan, commented on the Federal and California tax hikes that are hitting high-income residents:

“I’m not exactly sure what I’m going to do yet,” said Mickelson, who tied for 37th at PGA West. “I’m not going to jump the gun, but there’s going to be some drastic changes for me, because I happen to be in that (tax) zone that has been targeted federally and by the state. It doesn’t work for me right now, so I’m going to have to make some changes.” [snip]

“I’ll probably go into it more next week,” he added, “but if you add up all the federal and you look at the disability and the unemployment and the Social Security and the state, my tax rate is at 62 to 63 percent. So I’ve got to make some decisions on what I’m going to do.”

Obviously, Phil has to be considering a move to a no-tax state like Florida, emulating Tiger Woods, Michelle Wie, and Venus and Serena Williams. It seems that one of the few remaining social taboos is for rich people to complain about their taxes, so it's not surprising that Phil stopped digging a deeper hole and promised no longer to talk about the subject.

Nevertheless, I'd like to add another word of sympathy, but for a problem that has received much less publicity than high tax rates: tax complexity at the state level. Professional golfers must pay taxes in each state where they win; a busy golfer must file dozens of tax returns, allocating winnings and expenses to each state. The states try to be "fair" by trying not to double-tax income, but somehow state tax boards always seem to decide gray areas in their own favor.

The real bonanza for high-tax states lies in being designated the state of residence, which gets assigned the intangible income (interest, dividends, royalties, etc.). A veteran superstar like Phil Mickelson or Tiger Woods has endorsement and investment income that greatly exceeds his annual golf winnings.

If Phil moves to Florida, say, but leaves a condo in California to visit his kids who may wish to finish school there, you can bet that California will ask for an accounting of days spent in Florida versus days spent in California and contest the domicile change. (For a good overview, see Hodgson Russ' article "The Multistate Tax Quandary for Professional Athletes".)

Phil Mickelson appears to be a good, successful family man who gives something back through charitable works but is spending more and more time worrying about the problems of wealth, which he can't talk about. No, we don't feel sorry for him, but we do sympathize. © 2013 Stephen Yuen

Still Under Investigation

The monkey mind is easily distracted. It had plans for Saturday morning when it came across this article:

Phelan - A naked drunk woman was arrested early Thursday morning after driving into her naked fiance, according to the California Highway Patrol.

Around 12:40 a.m., the 22-year-old Hesperia woman and Alberto Giovanni Bravo parked a 2008 Honda Civic east on Phelan Road west of Baldy Mesa Road, according to a CHP news release.

For reasons still under investigation, Bravo, 30, of Victorville, got out of the car and the woman moved into the driver’s seat, CHP officials said. Both were naked.

Bravo walked in front of the car before the female driver accelerated forward and struck him, causing him to land on the hood of the car, according to the release. She abruptly applied her brakes and lost control.

The car veered across Phelan Road and crashed into a chain-link fence north of the street, officials said. The car continued along the fence and hit two trees before it came to a stop.

Bravo was thrown off the hood and fell to the ground, suffering major injuries. He was airlifted to Antelope Valley Hospital.

The woman was transported to Desert Valley Hospital for treatment of minor injuries. She was arrested for felony driving under the influence causing injury and booked into the Victor Valley jail, according to the CHP.

The CHP wouldn’t release the name of the arrested driver. CHP spokesman Matt Hunt said the driver and Bravo were engaged.

“Part of this investigation is of a sensitive nature and still under investigation,” Hunt said in an email. “Until that portion of the investigation is cleared up, we will be holding off on releasing the name.”

Traffic was not affected by this collision.

Comments:

1) The temperature in Phelan (north of LA) after midnight was in the 40's. A naked man must have been strongly motivated to step out of the car.

2) The couple (safety first!) could have been switching drivers because he was inebriated, and she was arrested for DUI.

3) They're engaged. Hope that this incident doesn't derail their plans. Pray for their recovery. More importantly, pray for their children.

4) It was indeed important that "traffic was not affected by this collision." Glad that the article mentioned it.

Magic Enough

Sophisticated moderns don't believe in talismans ("an object, typically an inscribed ring or stone, that is thought to have magic powers and to bring good luck" and yes, talismans is the proper plural form).

Hundreds of the unsophisticated, bedecked in orange and black, patiently waited in downtown Redwood City for a chance to be photographed with the Giants' 2010 and 2012 World Series trophies.

We arrived at 10 a.m., but there was no need to have been early. The line moved quickly, especially since no fan cameras were allowed inside the tent. The photographer took our picture in under a minute, and we bought a souvenir print.

No magic powers were in evidence after we left. In 2012 the Giants faced six elimination games in the National League playoffs and won each one before sweeping the Tigers in the World Series. That was magic enough.

A Wild Ride

Since its high of $705 reached in early September, Apple's share price has fallen nearly 40%. (Sometimes percentages don't resonate, so look at it this way: if you owned a hundred shares, you have lost the value of an average new sedan in a scant 4 ½ months) I won't bother to link to the hundreds of articles--new ones are posted every hour--that run the gamut from Apple-is-permanently-broken to great-buying-opportunity. Some scattered comments:

Despite its recent share price collapse--including another 12% today--AAPL at $450 is $4 above its price of a year ago (see graph).

The psychology regarding losses is completely different, depending on one's entry point. Your humble observer has invested in too many losers than he cares to remember: frustration, regrets, anger....negative emotions come to the fore when prices plummet after a purchase. But if he's just giving back some gains, then it's easy to be complacent. Both emotional states need to be fought in order not to compound one's mistakes.

The $10.60 annual dividend won't be in jeopardy for the foreseeable future given Apple's $137 billion cash balance, and annual earnings per share of $45, even if they don't grow, comfortably support a $450 share price. I would probably buy some shares if I didn't own them already, so in my case it's a HOLD.

Perfectly Understandable

Patriots quarterback Tom Brady was fined $10,000 for kicking Baltimore defenseman Ed Reed at the end of a play in last Sunday's AFC Championship game.

I appreciate the fact that the NFL must be seen to apply the same rules to its greatest stars as well as its everyday players, but there's not a man alive who wouldn't raise his leg in self defense if a hard-hitting free safety who was previously suspended for dirty play was about to crash in the family jewels. Sure, Ed Reed is supposed to pull up when the quarterback slides, but would you be 100% confident, with only a split second to decide?

No one's crying for Tom Brady:

For a guy who's scheduled to make about $14 million next season, $10,000 is virtually nothing (it'd be like having to pay a fine of about $36 for a guy who makes $50,000 a year). But hey, Brady did something the league has deemed illegal, and he'll have to pay for it.

Nevertheless, what he did was perfectly understandable.  © 2013 Stephen Yuen

"Two-and-a-Half-Buck Chuck"

A bygone era

There are signs that the economy is improving, but an important bellwether offsets the good news.

Headline: "Trader Joe's 'Two Buck Chuck' now goes for $2.49 a bottle"

After an 11-year run, the $1.99 price of a bottle of "Two Buck Chuck" wine has disappeared from Trader Joe's in California. Now it's $2.49 a bottle, but "Two-and-a-Half-Buck Chuck" doesn't roll off the tongue quite the same way.

Gas, health care, tuition, food prices, and taxes have all gone up with hardly a shrug. But two-buck chuck? Now we're concerned!

So He Does Have a Sense of Humor

Jim Harbaugh, comparing his own playing skills to those of his quarterback:

"the way Colin runs, the gracefulness of his stride, the ground he covers, it reminds me of me when I run - and then I wake up."

Hypochondriacs Know Best

The WSJ reports on two promising developments in brain science:

1) Some children with autism appear to grow out of their symptoms and recover fully.

researchers last week reported that they had identified 34 people who had all been diagnosed with autism by age 5 but years later were indistinguishable from peers on language, socialization and communication skills.

2) Animal studies show that neurons can be turned off and on by using beams of light, possibly leading to cures for psychiatric disorders like depression and drug addiction.

researchers have found they can instantly modify animals' behavior, suppress memories and lay bare the biological underpinnings of psychiatric disorders—all by illuminating neurons primed with light-sensitive proteins...."You can play the brain like a piano."

There are obvious privacy and philosophical concerns about free will and the manipulation of an individual's actions by other human beings, but to the many who must contend with mental illness and diseases like Parkinson's, development of such drug-free treatments seems like a godsend.

Advances in medical science are proceeding at such an astounding pace that one can't be blamed for being hypochondriacally vigilant about one's health. We should all try to stay alive as long as we can; conditions that portended an unhappy future a few years ago have much better prognoses today. Truer than ever: if one has life, one has hope.

Posey:Giants = Kaepernick:49ers (?)

Buster Posey

In 2010, his second year in the major leagues, Buster Posey took over the starting catcher position from an experienced veteran in the middle of the season and led the San Francisco Giants to a World Series title. He made the cover of Sports Illustrated and was the toast of San Francisco.

In 2012, his second year in the NFL, Colin Kaepernick took over the starting quarterback position from an experienced veteran in the middle of the season and led the San Francisco 49ers to the Super Bowl against the Baltimore Ravens.

Colin Kaepernick

 © 2013 Stephen Yuen
He made the cover of Sports Illustrated and was the toast of San Francisco.

Will the parallel play out all the way to a Super Bowl title?

Who knows...for some of us it will require extra effort to focus on work during the next two weeks.

An Exemplary Life

When I was nine, I got a Stan Musial bat. It was big and weighty, just like the man himself. If truth be told, it was a little too heavy for a kid a year out of T-ball, but it became the weapon of choice when I hit the ball past the outfielders a couple of times. His name invested the wood with magic power.

Most baseball teams in the early 1960's had one superstar who stood head and shoulders above the rest of the players. The Giants had Willie Mays, and the Yankees Mickey Mantle. For the St. Louis Cardinals Stan Musial was the face of the franchise.

Stan Musial retired 50 years ago, led an exemplary life after his playing days, and died Saturday at the age of 92. For many St. Louis fans he was still the face of the franchise. R.I.P.

Barely Noticeable

On Thursday afternoon the lagoon waters were so still that it's barely noticeable that this photo is upside down....

Where Delicate Subjects Were Discussed

The Friedman twins, aka Abigail Van Buren and Ann Landers

When there were two newspapers in every town, the Friedman twins were two of the most famous women in America. Esther Friedman Lederer and Pauline Friedman Phillips wrote the daily advice columns "Ask Ann Landers" and "Dear Abby" , respectively. Esther (Ann) died in 2002, and Pauline (Abby) succumbed yesterday at the age of 94.

It may be difficult to imagine, but there was a time when most delicate subjects--the ones that piqued our curiosity--were not talked or written about very much. We certainly wouldn't discuss such matters with our parents, teachers, or clergymen, so we turned to Abby and Ann Landers out of curiosity, perhaps leavened by a dash of schadenfreude.

I used to be a regular reader of Ann Landers in the morning Advertiser and Abby in the evening Star-Bulletin. Now their common sense and moderate sensibility are viewed as relics from a bygone age, like the newspapers that carried them.  © 2013 Stephen Yuen

We Don't Know Anything

Manti Te'o (SI photo)

This is the age of instant analysis, snap judgments, and speaking before thinking. Manti Te'o's fictional girlfriend-who-died-of-leukemia is one of those juicy stories that deserves but won't get silent circumspection.

There is no urgency to solve this mystery. There is no apparent crime involved, nor does "justice need to be served."

We're eager to explain nearly every situation through a moral prism, but our judgment is paralyzed over the uncertainty about whether Manti Te'o is victim or hoaxer. We would do well to acknowledge that we're in the same spot as Sports Illustrated writer Michael Rosenberg: "I don't know anything."

Let's not waste any more brain cells on the saga of Manti and Lennay. Wake me when there's some new, solid information, not speculation.

An Ineluctable Trend

Facebook earlier today announced Graphic Search, a quick way to search various subjects (e.g, photos of certain events, favorite restaurants, etc.) across one's circle of friends or even the vast Facebook community. The announcement met with only mild enthusiasm amongst investors.

The social network’s shares have fallen 3.1% since it announced Graph Search, a service that allows Facebook users to search for information from their friends’, and other users’, profiles.

Analysts say they broadly like the product, but most weren’t ready to adjust their views on Facebook just yet. As of Wednesday morning, no Wall Street analysts had changed their stock recommendations or their estimates for the company’s performance, according to Thomson Reuters.

As a user of tech products but not a fanboy, I stopped being an early adopter decades ago. Let someone else iron out the bugs and prove out the benefits, not to mention drive down the price as the product gains acceptance. Cellular telephones, digital video recorders, and flat screen TVs were all purchased by your humble observer years after they were introduced.

There's no out-of-pocket cost to being a member of Facebook, so the only investment for most users is the time spent posting original materials such as photos, writings, and videos to the network, as well as learning to use it. However, Graphic Search does not yet appear to be the obvious "killer app" that draws in new members or induces current users' eyeballs to linger.

More likely, the great Facebook attractor will be economics, as more employers perceive benefits from its use. One example is in the seemingly staid world of accounting, according to Mark White, Chief Technical Officer of Deloitte:

social tools such as microblogs, wikis, internal social networks, instant messaging applications and threaded discussion forums can help CFOs improve finance organization performance. “The financial close-the-books process is an example of how social software can drive improvements in finance’s decision-making and processes, by making the close more transparent, efficient, repeatable and defensible,” he says.

Much as we are fond of the old ways, the use of social tools and social networks is an ineluctable trend, even to accountants, who must keep up or be left behind.  © 2013 Stephen Yuen

The Price of a Good Night's Sleep

"Dial a number" and "tape a program" are phrases that have been relegated to the dustbin of history (what's a dustbin?). "Paper trail," sadly, is also on the verge of losing its meaning due to the tidal shift toward electronic record-keeping.

As an auditor who cut his teeth in the days before electronic documents, your humble observer was always taught that, no matter how fancy the reports, compilations, and analyses, the basic data for important work (e.g., financial statements, tax returns, property listings) should always be traceable to a signed piece of paper. Sure, the electronic revolution has made life easier, faster, and cheaper, but sometimes the price is too high. I'm not a believer in electronic voting, for example, because of the risk of fraud.

Now it turns out that the move toward e-filing tax returns has resulted in an explosion in tax-return fraud:

Tax fraud, amazingly, is now the third-largest theft of federal funds after Medicare/Medicaid and unemployment-insurance fraud.

Tax-identity theft exploded to more than 1.1 million cases in 2011 from 51,700 in 2008. The Treasury Inspector General for Tax Administration last summer reported discovering an additional 1.5 million potentially fraudulent 2011 tax refunds totaling in excess of $5.2 billion.

The IRS markets e-filing as being not only green but beneficial to the taxpayer due to faster processing of refunds. Of course, most of the benefit really inures to the government, which doesn't have to re-input data into its computers and can flag returns much more quickly for audit.

Your humble observer prepares and files each family member's tax returns the old-fashion way. As a licensed tax-preparer, he also does the same for his clients, the number of which he is careful not to expand beyond ten (10) to trigger the IRS' e-filing requirement. Yes, he produces a lot of paper and foregoes some business, but that's the price of a good night's sleep.

We Won't Wait Forever

It's been 15 months since Walt Isaacson released his bestselling biography of Steve Jobs, and non-Apple-insiders are still puzzling over this enigmatic passage [bold added]:

And he very much wanted to do for television sets what he had done for computers, music players, and phones: make them simple and elegant. "I'd like to create an integrated television set that is completely easy to use," he told me. "It would be seamlessly synced with all of your devices and with iCloud." No longer would users have to fiddle with complex remotes for DVD players and cable channels. "It will have the simplest user interface you could imagine. I finally cracked it."

Now comes an intriguing observation from last week's Consumer Electronics Show:

Longtime tech observer Rich Doherty of Envisioneering tells me that he saw numerous Apple employees wandering the floor in Las Vegas. "They were here not to glean ideas but to make sure the company is not blindsided," he tells me. It is a matter of when, not if, Apple will offer its own smart set, Doherty believes. But, he notes, it is also in Apple's interest to bide its time, keeping a muddled market guessing, until it sees what things really work in this new world of social television.

We are one of the thousands (millions?) who have been tempted by low prices to buy a second flat-panel TV. But we have held off to avoid the buyer's remorse we are certain to feel when Apple announces its TV product. C'mon Apple, we say unconvincingly, we won't wait forever.

Aaron Who?

SI photo

"Colin was nimble, Colin was quick, Colin ran wild at Candlestick."

Three future members of the pro football Hall of Fame--quarterbacks Peyton Manning, Aaron Rodgers, and Tom Brady--entered this weekend's playoffs.

None of them ever had a game like second-year Niner QB Colin Kaepernick, who ran for 181 yards and passed for 263 yards in a 45-31 49er victory over the Packers.

The Price of Paradise

Many baby boomers approaching the age of 65 don't have the savings to retire. The reasons are legion: spending beyond their means, too much debt, marriage dissolution and other family issues, unemployability following a layoff, poor health, living in a high-cost region, etc. For those at the margin of self-sufficiency, one possibility has been the option of moving to a lower-cost-of-living, lower-tax state. Now that escape hatch may be closing:

Some states are starting to have second thoughts about the tax breaks they give older people.

For decades, state governments have been generous with those breaks, perhaps because older Americans tend to show up at the polls to vote. But mired in budget deficits, some states are starting to limit or even rescind tax exemptions for these residents—and experts say others may follow. [snip]

For retirees contemplating relocating to a state with a lower tax burden, the trend highlights an emerging risk: The retiree tax exemptions on the books today may be gone tomorrow.

States where taxes have recently gone up are in red, down are in green (WSJ graphic)

The National Conference of State Legislators has published an interactive table that shows how specific taxes have changed on a state-by-state basis. My home state of Hawaii, where we're thinking of retiring, has recently raised the following taxes according to the table.

In our particular case, state taxes won't be the key factor in determining where we eventually rest our weary heads. However, at the margin surely some wealthy retirees will decide that the price of paradise is too high.

The bigger problem is that younger, high-income producers who currently pay into the system much more than they take out will move away or stay away. Hawaii, which is the most expensive state in which to live but is ninth in median income (according to the U.S. Census Bureau) can ill afford to widen the disparity, but that appears to be the direction that it's headed.  © 2013 Stephen Yuen

The Greatest Play in Bay Area Sports History

Dwight Clark's career moment.

Today is the 31st anniversary of the Catch, the greatest play in Bay Area sports history. The 49ers beat the Cowboys and went on to win the 1982 Super Bowl.

(Cal fans may rank the Play higher because of the lift it gave to their desperate, impoverished lives.)

The Catch was the moment that it all came together for the Niners, who would become the dominant NFL team of the 1980's.

A Person on His Person

A Marin resident claimed that his corporation was another "person" who qualified him to use the car pool lane:

Jonathan Frieman, a local activist and nonprofit consultant, was ticketed Oct. 2 for driving in the carpool lane during restricted hours; the officer apparently wasn't impressed when Frieman showed him his incorporation papers. A traffic court hearing is scheduled for Monday afternoon.

The fine for such a violation is $478, but Frieman, 59, of San Rafael, says that if the court rules against him Monday, he's prepared to appeal the case all the way to the California Supreme Court in an effort to expose the impracticality of corporate personhood.

The shocking aspect of this episode is that he actually got caught. I witness at least one car-pool violation--and never has anyone been ticketed--every time I've been on the road during rush hour.

[Update: Mr. Frieman lost his case. Apparently, he had been looking to pick this fight but, as the saying goes, couldn't get arrested:

He said he has driven solo in carpool lanes for years, hoping to be pulled over so he could argue about the rights corporations have accrued through more than 125 years of legal precedent.

To assuage the pain of losing, Mr. Frieman can console himself with the knowledge that for years he got to his destination a lot more quickly than the law-abiding saps who didn't use the car-pool lane. ]

It Creeps Up on You

This week I went in for my annual physical, postponed from November when I had to tend to a busted water heater.

The fasting blood glucose levels were measured at 105 mg/dL, which is "prediabetic" according to the American Diabetes Association. If the reading were 126 or higher, I would be considered to have diabetes.

The cholesterol numbers (total of 164 mg/dL) were in the safe zone (below 200), thanks to 10 mg of atorvastatin (Lipitor) that I take every night. However, triglycerides of 194 mg/dL were "borderline high", with "high" being in the range of 200-499.

Not surprisingly, the doctor recommended that I lose weight. It creeps up on you--eating the wrong and too much food, lack of exercise and sleep, stress--I thought I was doing well to keep the weight gain after I started working to under a pound a year. Of course, school was in the 1970's....

Like Schools of Fish

Berkeley and MIT researchers tracked 350,000 Bay Area drivers using their smartphones and found that a relatively small number of commuters are the source of most traffic congestion.

These commuters aren't necessarily slow or bad drivers. Instead, they come from a few outlying neighborhoods and travel long distances together in the same direction like schools of fish -- clogging up not only the roads they drive on, but also everyone else's.

Bay Area traffic seems to abide by the 80-20 rule (80% of the problem is caused by 20% of the cars), so solutions will be aimed toward managing cars coming from critical neighborhoods.

By targeting those drivers to reduce the number of vehicles on Bay Area roads by just 1 percent, drivers would see the time they spend fuming in traffic drop by 14 percent -- nearly 8 minutes saved per hour, the study concludes.

The civil liberty/privacy concerns are obvious. Yet, if tracking large numbers of drivers (without their consent) can knock off 16 minutes from a two-hour commute each day, many people would willingly pay the price.

O cruel, needless misunderstanding! O stubborn, self-willed exile from the loving breast! Two gin-scented tears trickled down the sides of his nose. But it was all right, everything was all right, the struggle was finished. He had won the victory over himself. He loved Big Brother. --Orwell, 1984

Afternoon Walk

Deer were more numerous than I remembered.

For the first time in six months I had a few extra hours to spend on the trails of Rancho San Antonio Park. Travel, illness, and business had kept me away from the South Bay.

Now it's a New Year, when we can banish bad habits and (re)start some good ones.

Pedestrian Topic

It's a truism of environmentalism that the automobile has blighted America's landscape. San Francisco, home to the Critical Mass bicycle movement, has struck another blow against the car by encouraging the creation of parklets throughout the City.

Parklets replace curbside parking spaces with benches, artwork, and greenery. They add to the pedestrian-friendly ambience of San Francisco at the cost of higher through-traffic congestion and less parking-meter revenue. (Perhaps the City making up for lost revenue is one reason why suffering car owners now have to feed the meter on Sundays.)

Individuals and businesses pay for construction of parklets, which must get permits like any other construction project. And if all the T's aren't crossed, remedies can be expensive, as one parklet creator has learned.

Parklets are in vogue partly because the wealthy City can afford them. Let's hope that times never become so difficult that San Francisco has to think about taking them down.  © 2013 Stephen Yuen

The Time of Plenty

Most of our family lives in Hawaii.

Thanks to Christmas, we won't have to buy coffee for a while.

Thanks to dozens of charity mailers, I won't have to buy personalized return-address labels, ever.

Thanks to our tankless water heater, we don't have to worry about running out of hot water.

Thanks to our high-capacity DVR that adds hours of TV programs each day, we can always pull up something we want to watch.

Our (and most people's, despite the PR) taxes have gone up, but this truly is the time of plenty. And, yes, we're easy to please.  © 2013 Stephen Yuen

"The Finest Athletic Leader I Have Ever Met"

Soon-to-be Hall of Fame baseball manager Tony La Russa said of him: "He is the finest athletic leader I have ever met in my life, and I admire him to the nth degree." Yet, few outside of the Bay Area know his name.

Football coach Bob Ladouceur is retiring from De La Salle High School after 34 seasons.

Ladouceur took over at De La Salle in 1979 as a 25-year-old with no head coaching experience. His teams have gone on to win five mythical national titles, five state championships and 28 North Coast Section titles, including the past 21. De La Salle hasn't lost to a Northern California team since 1991.

Ladouceur, who also teaches religious studies at De La Salle, has coached several players who have gone on to NFL careers, including Amani Toomer, Maurice Jones-Drew, Derek Landri and D.J. Williams.

But getting the most out of players with far less talent is considered to be his greatest gift. [snip]

A movie on Ladouceur and the De La Salle football program starring Jim Caviezel is currently in the works. The film is based on Neil Hayes' book, "When the Game Stands Tall," which chronicled the 2002 season.

Coach Ladouceur retires with 399 wins, a total that is meaningful not only for its magnitude (an average of 12 wins per year over 34 years) but also for what it reveals about a man who is not interested in hyping his record to a win #400.

He will also be the second Bay Area high school coach about whom a movie will be made. (Charlie Wedemeyer, who coached at Los Gatos High for nearly a decade while suffering from Lou Gehrig's disease, died in 2010.)

At 58, Mr Ladouceur is a bit young to be fully retired, and we suspect that he's not done teaching. We look forward to seeing his second act.  © 2013 Stephen Yuen

The Flotsam of Authorship

One of my perennial resolutions is to clear the clutter. However, if I were ever to become a famous writer (or merely just famous), I might come to regret acting on that resolution. Broker Ken Lopez sells the "flotsam of authorship" to libraries:

[Norman] Mailer sold his 1,062 boxes for $2.5 million in 2005 and died in 2007. In 2003, Bob Woodward and Carl Bernstein sold 83 Watergate boxes, also to the [University of Texas], for $5 million. After 20 years of marketing for the likes of William S. Burroughs (dead) and Peter Matthiessen (alive), Mr. Lopez puts prices for interesting paper piles at $30,000 to $300,000.

While the likely reason for inaction is lassitude, the article has come up with two convenient rationalizations for not cleaning up the detritus of creativity: 1) The piles of papers may be worth money some day; 2) Future researchers will be keenly interested in studying the processes of a unique mind. One such posterity-conscious author is Ronlyn Domingue [whose novel is ranked #504,217 in Amazon at this writing]:

Ms. Domingue, who is 43 and lives in Baton Rouge, has one published novel with two on the way. She writes in longhand, types it up, makes changes by hand, and dumps it all into a box in her closet marked "Archive." She has willed the box to Louisiana State University, her alma mater. "I never thought of asking for money for it," she says.

One of the advantages of being older than Ms. Domingue is that illusions about self are easier to recognize and dispel. The clutter resolution stays.  © 2013 Stephen Yuen

River Rock Casino, Geyserville

The line to the buffet stretched past the Megabucks machine.

Our sojourn to the North Bay included a stop at the River Rock casino in Geyserville. Like other tribal casinos in California, River Rock, IMHO, doesn't measure up to Nevada standards: Indian slots are tighter, their "comps" less generous, and the buffets less spectacular. But a mediocre gaming experience is to be expected when the establishment has a captive audience and the nearest competition is over an hour's drive away.

Indian casinos have another drawback: Section 19, Article 4 of the California constitution allows them only to offer card games, such as blackjack, but not dice or roulette.

Some casinos try to circumvent this restriction by adding cards to a prohibited game. The craps shooter rolls two die, which come up, say, as a 5 and a 6. Then the fifth and sixth cards are selected from two stacks, revealing the point to be, for example, a 4 and a 1. Thus the numbers showing on the dice are totally unrelated to the card total used for paying off the crap bet. It's singularly unsatisfying to be rooting for a number, see the dice hit it, then have the cards produce a different result. I played "card craps" once at another casino; never again.

The minimum bet at blackjack was $10. I killed time with the basic strategy (diagram), which a player can use to make a modest stake last for hours if he's not tempted to increase his bet size. After dinner and three hours of play, the others in our party had had enough.

We were home before midnight. For all his grousing about tribal casinos, your humble observer must concede that they have one huge advantage over Vegas and Reno: they're only a two-hour drive away.  © 2013 Stephen Yuen

Happy New Year!

After a sedate New Year's Eve, we took a day trip north. Traffic was light everywhere, except for the roads leading to the Golden Gate Bridge. It took us half an hour to traverse the last three miles. Near the bridge we finally spied the problem: cars entering traffic from the left lane were trying to swing over to the last San Francisco exit on the right. It's a New Year's blessing that there were no accidents.

We stopped at an In-N-Out near tony Belvedere. The parking lot was filled. Perhaps the wealthy Marinites were beginning to assess the impact of the fiscal-cliff compromise that will soon crimp their discretionary income. In-N-Out, which provides an excellent burger for under $3, is the right product for the new austerity.