So we’ve got an old friend from college visiting Seattle for this next week. We took Sunday to show her around some things in Seattle that she hadn’t seen before. A highlight was the Sub Seattle tour. A sister tour to the renowned Seattle Underground walking tour, the Sub Seattle tour keeps the lighthearted feel of the underground tour and puts it on a bus. The bus makes the rounds of several touristy highlights in and around downtown Seattle accompanied by some colorful commentary from the tour guide. It was expensive at $30/person, but it really was a fun time and we saw a lot of parts of Seattle that even we as locals had never seen.
I also spent part of the weekend setting up my new home theater receiver. Before we moved to Seattle I owned an entry-level Sony receiver that worked great, but of course when you’re moving across the country you have to sell as much as possible. So the Sony was sold and I just never got around to buying another one until now. I spent well over a month researching the latest receivers and trying to match price with features with dimensions that would actually fit in our entertainment center. I had been looking at Denon’s latest models but the prices were a little high and Denon is notorious for not getting the online discounts of other manufacturers. In my research of the Denon AVR-1909, I found myself in the AVS Forum where a thread had been started regarding the launch of the model and that J&R was offering a “phone-in” price for the unit. So I called J&R sales and found out that the phone price of the unit was $150 less than any online price I had seen and had free shipping. I ordered it on the spot.
I had read in a lot of reviews that Denon equipment is very close to Audiophile grade and that their setup process did not have the layman in mind. I consider myself pretty good with technology so I really didn’t give the reports much weight – but after spending the past few days toying around with the Denon – I can say with certainty that they weren’t kidding. The feature set is exhaustive, the menus confusing and downright fugly compared to Sony’s Xross UI, and the manual is pretty close to useless. But I’m willing to forgive all that for the best qualities of this receiver. The sound quality and build quality are absolutely awesome and significantly better than my previous Sony. Lately, the auto-configuration of sound measurements has been the “must-have” feature for receivers. I’ll say this, Denon’s Audessey setup does work, but it’s by no means perfect. You’ll still be tweaking individual speaker output levels to your liking after the wizard runs. If there were a company that matched the ease-of-use of Sony with the sterling quality of Denon in the mid-range segment, home theater enthusiasts everywhere would be in heaven.
So, would I recommend the Denon AVR-1909. Honestly, no. If you’re regularly changing components and settings as most audio enthusiasts do, Denon’s UI is a deal-breaker. I would gladly give up a little sound quality (because let’s face it, not everyone can tell audiophile-quality from “very good” quality) for an interface/menu system that it easy and fun to use. But for now, I’m keeping it because it really is the best feature set for the money.
If you watch the news at all, you saw today the collapse of two more financial institutions amidst the mortgage meltdown. Both Lehman Brothers and MerrillLynch went under today. Lehman Brothers to bankruptcy and Merrill Lynch in a forced sale of the company to Bank of America. These two join countless other victims of the mortgage industry collapse. You may have heard of the other big-name institutions but rest assured that many many other small/medium financial and mortgage companies are going under due to their exposure to the subprime market. I can’t give the whole story of what happened in the mortgage industry here – I just don’t know enough about it – but I would like to share a story that is very closely linked to the financial disasters we’ve been seeing lately.
In late 2005 while living in Miami, I began working in the IT department of one of the nation’s largest homebuilding companies. This company did business and built communities in 13 states around the country, and at their peak had almost 12,000 employees. Early on things were great. Homes were selling, the real estate market was hot in almost every metropolitan area around the country, investors started to dive headlong into properties in need of a little work in hopes of turning them around for a quick profit. Even television producers got into the act and throughout 2006 the top-rated shows of HGTV, TLC, and other similar networks were about “flipping” real estate. But something was very wrong with the economics of this latest real estate buzz. It simply wasn’t sustainable.
Throughout 2005 and the first three quarters of 2006 things were great at this company. Revenues were up, profits were up and morale was high. But then something started to happen. As part of the IT team I presided as the on-site tech for many of the management meetings that brought together regional managers from territories around the country to Miami to meet and discuss the state of the company. At one of these meetings in the Fall of 2006, managers began to stand up and describe slowing sales in their area and concern that prices were inflated.
These meetings were generally run by the company’s CEO and CFO, and as the conversation went around the room, the regional managers would give a short description of themselves, their sales area, and the state of business there. Many managers got up and spoke to slowing sales at which the CEO simply scoffed at their lack of salesmanship and continued to repeat the idea of more creative ”incentives” - which would later become the craze of homebuilders nationwide as a hail-mary idea to bring in buyers. What struck me was the level of sarcastic arrogance by the executives to the national market conditions and where they seemed to be heading. In their minds, it wasn’t the market’s fault that sales were slowing it was the fault of sales managers for not being able to create a convincing arguement to buy.
The one manager that I specifically remember was the regional vice president from Las Vegas. When it was his turn to speak he stated how Las Vegas real estate has undergone explosive growth (much of it through investors and speculators) not much different from what Miami real estate seemed to be experiencing. His question was whether the company executives were concerned about the level of growth as a possible “real estate bubble”. The CEO snapped back at the manager, “I keep hearing this talk about a ‘bubble’. I don’t want to hear it.” He pointed to the CFO and called to him, “..what do we say about the ‘bubble’”? The CFO shot back almost laughing and he said, “Bubble Schmubble!” The CEO echoed him, “That’s right! Bubble Schmubble!” It sounds corny, and it was, but what you have to also know is that the phrase was a part of the company’s propaganda hung in and around the headquarters on posters. It was designed to ingrain in employees that despite all common sense, the idea of a real estate bubble was actually nonsense.
I left the company in early 2007 when I moved to Seattle. As I left the markets were beginning to see that very earliest signs of mortgage troubles. In the months immediately following my departure the company’s stock price dropped nearly 40% as the fallout began, massive strings of layoffs occurred, and morale nose-dived. Looking back on that meeting it still blows my mind how dismissive the top executives of the company were to the concerns of managers who were right there, in the very markets being hit, and raising real concerns. It was a scary level of detachment from the everyday business of the company that does nothing but reinforce to me the commonly held belief that executive compensation is egregiously high. These executives rode a waveof market-indifference straight into the ground. The company’s stock now sits below $14/share and has taken billions of dollars in write-downs and losses since that prophetic meeting. It’s number of employees has fallen to below 4000 and sadly the Las Vegas market that inspired the CEO’s phrase has experienced arguably the largest collapse of real estate in the nation.
Update: In light of a report issued on February 19, 2009 I’m not holding back the details of this story any more. You can read the report here. The company I worked for was Lennar Corp. whose shares are now trading below $6. Wall Street executives have been the target of investor ire for both their excessive compensation packages and reckless abandon towards running their companies. The leadership team of Lennar was no different then these Wal Street firms’. The above story is just one of many examples that have convinced me that the current state of our economy is the result of blatent greed and indifference of those in the financial and real estate industries. In many ways I regret my former association with these people. I have since returned to working in the non-profit sector and could not be happier with my work.
If you’re like me you’re probably channel-surfing between CNN and the other new networks watching the coverage of hurricane Gustav as it approaches the Gulf Coast. As someone who lived in Miami for eight years and went through many hurricanes, including the record 2005 season, I can attest to the hype surrounding Gustav. It’s refreshing to hear the media taking this category 3 storm seriously. I’m sure some people think that he media is being overly dramatic about the storm and sensationalizing - so I thought I’d share what is probably my favorite picture from the record breaking 2005 hurricane season. The damage you see in the picture if from hurricane Wilma which was actually the strongest (in terms of pressure) hurricane ever recorded in the Atlantic basin. When it passed through Miami and Ft. Lauderdale it came through as a very strong category 3 (almost a category 4) storm. While the hurricane intensity scale goes up to five, it’s important for people to know the kind of damage that just a category 3 storm can do. New Orleans and the rest of Louisiana is in for a rough ride.
The building above is an office building in downtown Miami. While it look like the damage is isolated to the top floors I can assure you that the damage continues down the building blocked by the other building in the foreground. This happened to be the most devastated building in downtown but countless others were damaged in similar ways. As we walked around downtown immediately after the storm we found every street in downtown Miami covered in 1-inch thick skyscraper window glass that had been blown out of Miami’s skyline. It took more than six months before most building windows were replaced and more than a year for all of downtown Miami’s building to return to their normal appearance.
Update:
Gustav has since made it’s run through Louisiana, and now Ike has hit Texas also as a category-2 (borderline category-3) storm. If you pull up pictures of the Chase Financial tower in downtown Houston, it’s eerily similar to my pic from Miami. A hurricane does not have to be a cat-4 or 5 to do severe damage.
Leah and I returned from Michigan this week. We were out there for an annual friends-and-family golf tournament that my parents hold in Elk Rapids. The weather was absolutely beautiful and perfect for the three straight days of golf. I hadn’t been out of the course even once thise year leading up to the tournament so I knew it was going to be a little hairy getting back into the swing. In anticipation of tournament I found a local golf shop having an unbelievable clearance special on a set of clubs that I’d had my eye on for a while. I picked up a new set of Wilson Ci6′s and a Taylor Made Burner 3-wood. My current clubs were actually the very first clubs I ever owned and they were ok for a starter set 11 years ago but they just didn’t match well with my skill level now. The first day out on the course with the new Wilsons I knew I made a good choice. My first shop with the irons was an approach shot from 215. I pulled out a 5-iron, let ‘er rip, and actually flew the green! Amazing, I never would’ve hit my old irons like that. The first day I shot 96. The second day I shot a 92 – a personal best. The third day was a scramble format but I played great and I’m sure I could’ve bettered my 92. The tournament day was a blast. Our team came so close but wound up losing by one stroke. The putts just weren’t falling for us even when we hit 15 greens-in-regulation.
It was great to see everyone again and Leah and I had as much fun off the course as on. Spa days, Torch Lake kayaking, and good food highlighted the rest of the trip. Now that we’re back in Seattle we finally get some long-awaited down time at home. At work though, I’m as busy as I’ve ever been. Big projects coming down the pipeline.
I really wish I had the time to post more commentaries. There’s so much interesting stuff going on right now. Politics, technology, the Olympics, it’s hard to keep up. As soon as I get over the project hump at work I’ll be posting a lot more.
This year Warren Buffett officially surpased Bill Gates to become the richest individual on the planet. It’s hard to imagine just how much money these two men have individually, but what’s even more amazing is the partnership that they have in their philanthropic efforts. In 2006, Mr. Buffett announced that he would be donating almost 83% of his fortune to the charitable efforts of the Bill & Melinda Gates Foundation. As such he also earned a place as a co-chair of the foundation. In 2008 he attended the annual meeting of the foundation and sat down with the other co-chairs for a Q&A session from the foundation’s employees. Below is a transcription of his responses to two questions asked of him. It’s rare that you get to see such insight into the mindset of a person as influential as Mr. Buffett. His responses are certainly not what you would expect, and it’s for that reason that I wanted to share them here.
Why did you make the decision to donate to the foundation?
“Since we have small, intimate, discrete group here I’ll make a confession that I normally wouldn’t … I don’t work very hard at my job. At Berkshire Hathaway we have 255,000 people out working and then we have about 19 of us that just fool around at the office and – I like it that way – all I really do is I allocate capital and I align myself with outstanding managers and organizations, that’s all I do at Berkshire Hathaway. I decided two years ago to do the same thing in philanthropy. I allocated the capital and I aligned myself with terrific managers that.. I don’t want to do what they do, but I want done what they do. And all I can say is two years later I feel a hell of a lot smarter than I felt then even.”
How do you feel about your investment in the foundation so far?
“I feel terrific about it. I’m used to evaluating often large projects. When the facts just hit me in the face I have no problem making the decision. This is done exactly what I expected, it will continue to, and in fact it will probably exceed my expectations and it’s a perfect answer of what to do with a lot of money to benefit the most people in the world. We’re two years into it now and I’m looking forward to observing it for a long time.
I have never given up one thing in this world that I wanted in order to make somebody else’s life better. Now, I given up surplus to do it, but so what? I have not denied myself anything in life and I’m not denying myself anything now. Somebody that goes to church on Sunday and puts $5 in the collection plate that otherwise would have meant a movie or an extra toy for their kid, or a different dinner they might order; to me that’s real charity. What I’m doing is just logical. My older sister was on C-SPAN on Sunday with Brian Lam and my sister, who’s 80, is spending 10 hours a day doing what I call retail philanthropy and she gets involved in people’s lives, she helps them, and she was describing all of this. She is giving up some significant things in her personal life in order to make other people’s lives better. I’m giving up a lot of surplus and I’m delighted to do it and society has treated me sensationally, but it’s not real charity, it’s really just sort of the logical disposition of money to a society that’s handed it to me in a crazy way.”
Leah and I celebrated our 1-year anniversary on Monday. Amazing that it’s been a year already. So much has happened in that time, but suffice to say that it was a great first year. Leah and I are just suckers for trying new things so to celebrate our anniversary we decided to have dinner at the Space Needle. I know what you’re thinking – the Space Needle? Isn’t that just a tourist trap with a view? True, it is a touristy place, but what we found out about the restaurant at the Space Needle is that it is not your typical tourist attraction fare. The restaurant is located on the floor beneath the observation desk and rotates giving you an ever-changing view of the skyline and surrounding scenery. It’s a little disconcerting stepping on to the rotating deck at first. The motion of the deck and the rotating view throws your stomach for a loop. Leah and I both felt queesy for about 15 minutes until our stomach adjusted to the motion.
The food at the restaurant is actually extremely good. It’s also extremely expensive. They know that it’s a million-dollar view as you eat and they price accordingly. The fact of the matter is that the drinks were great, food was delicious, and the service was wonderful – even offering to take pictures throughout the dinner as the view behind us changed. It was a great night and a great way to celebrate our first year.
I’m definitely behind in posting what I’ve been up to the past few weeks. Two weekends ago was a camping trip to Central Washington with friends. It was as much fun as one can have camping. Leah and I are just city people who enjoy city life. The highlight of the trip though was Leah’s first time on a jet ski. She handled it like a pro.
Last weekend was a kayaking trip around San Juan island. It was a three hour tour along the shorelines of the island which was relaxing and beautiful but I think everyone in our group wanted to see orcas while we were there and you just are not going to see orcas kayaking around the shorelines. Surprisingly three hours was the short tour (the longer one being five hours). By the time we got back to shore asses were numb, legs were stiff, and every muscle was sore. It was fun though and we managed to get up close and personal with harbor seals, giant lion’s mane jellyfish, and even a bald eagle that perched itself on a low branch and let us paddle right up to it.
This weekend Leah and I are traveling to Michigan to visit family. We’ll actually be crossing over to the Canadian side of the Detroit river to stay at the family condo on Boblo Island. This weekend is also the annual Jazz Festival held on Boblo Island which should be a blast. I’ve got lots of content queued up, but it’ll have to wait until I return from Canada as wi-fi is still a foreign concept in Windsor. And yes, there are pictures from all of this if I could just get the damned shadowbox working on the site. Oh well.
Summer blockbusters are the quintessential grab-bag of movies. They’re usually more style than substance, but since the American public and its collective two-second attention span can’t seem to deal with deeper fare year-round it’s become somewhat of an expectation to have an entire season full of fun put-your-brain-on-cruise-control eye candy. So enter Wanted. Yet another comic book adaptation, about an apathetic guy struggling to discover who he is amidst “panic attack” episodes that keep him cowering from the world around him. When it’s revealed to him just what these episodes really are he suddenly realizes that the world is not the fear factory he once thought but rather a playground for him and others like him. I can usually smell a stupid juvenile shoot-‘em-up movie from a mile away but Wanted seemed to be getting enough good reviews to keep me interested. It took me forever to convince my wife to go see it (and she like Angelina Jolie) but I finally got her to go and figured that at least it would be summer popcorn fun. How wrong I was.
The movie started strong with a crazy opening scene and sharp humor, but everything started to run out of steam about 30 minutes in. And sure there’s the premise of curving, colliding bullets, which could have been really interesting if it weren’t used as a crutch for such a shitty script. I’m not going to get into the storyline but suffice to say that it dumbs down really fast. By the time the climax limps around I found myself watching a movie where the hero takes out the villain’s base with exploding rats – yeeaaah. Even the last line in the film, where the hero challenges the audience with, “What the fuck have you done lately?” got a theater-wide groan and roll of the eyes. Well, let’s see, I wasted the last two hours watching you stumble around like a retarded choirboy trying (hard) to look cool holding a gun. But hey, congrats on becoming the next cliché’ of American stupidity. Did I mention that Angelina Jolie stars in this movie? You get to watch her kick ass and see her bare ass – and I still want my money back. Enough said.
1 out of 5
Not worth renting
Not worth buying