Tuesday, September 23, 2008

Go Cubs Go

I enjoyed this synopsis on the My Baseball Fantasy blog of the origins of the Cubs' postgame victory tune, "Go Cubs Go."

If you don't know the full story, definitely check it out. It's almost playoff time...

Saturday, September 20, 2008

Golden Parachutes

Last week in the financial sector was crazy. Stocks, of which I own several just for fun, were nuts.

Huge companies have failed, and the major investment banks have quickly shrunk in number. I have been struck, though, by the fact that CEOs of these failed companies are still walking away with wealth. Even if stockholders and the average employee are not, the leaders seem to be doing alright.

In an article called How the Masters of the Universe ran amok and cost us the earth, explaining the Lehman Brothers failure, The Scotsman details the walkaway pay many of these CEOs garnered:

Fuld [Lehman's CEO] joined the bulge bracket. He was paid $34.5 million in 2005, comprising a base salary of $750,000, a $13.8 million cash bonus, and stock and options worth $19.94 million.

So how does his demise compare with the other fallen idols who have now fled the crashing debris in Wall Street? They may have driven their banks – and their shareholders – into enormous losses. But the former Masters of the Universe will never know what it's like to live in a subprime home.

By the end, 62-year-old Fuld was Lehman's biggest individual stockholder. Despite the crash, he stands to leave with about $65 million, based on Lehman's Friday morning stock price of $3.73. This tally includes 8.6 million unrestricted shares worth some $32.1 million as of Friday morning – though they had been worth $582 million last November before the credit crunch hurricane struck.

Chuck ("I'm still dancing") Prince left Citigroup with a package said to be worth $40 million. He also received a pension of $1.74 million and another one million stock options – worthless at the time of his departure. Merrill Lynch's Stan O'Neal spent much of last summer perfecting his golf swing, confident that his trusty lieutenants at Merrill could avoid those subprime bunkers. It turned out to be a bad call.

HE WAS ousted last October as the first waves of the credit crunch struck, with a retirement package reckoned at more than $160 million.

Jimmy Cayne, 15 years at the top of Bear Stearns, was said to be on the golf course in June 2006 just as the bank dropped the first of many clangers, with a 10 per cent dive in profits. Worse followed, with the bank having to put up $3.2 billion to try to rescue its imploding hedge fund.

By mid-March last year, when the bank collapsed, Cayne, who would rush from Wall Street by chopper to the private Hollywood Golf Club in New Jersey to play 18 holes before dark, had already relinquished the reins, handing over the chief executive's role to Alan Schwartz.

When Schwartz went cap in hand to the New York Fed for a $30 billion bail-out, Cayne was said to be competing in the North American Bridge Championship in Detroit.

Cayne and his wife, Patricia, sold all their 5.6 million shares in Bear Stearns – worth as much as $1.2 billion in January 2007 – for $61.3 million at the end of March this year. The couple recently bought two adjacent apartments in New York's plush Plaza building for $28.2 million.

He left with a $30 million "golden goodbye" – enough to do up his Park Avenue property and a mock Tudor mansion in Greenwich, Connecticut. But it emerged that the mansion, set in 2.3 acres of land, was surplus to requirements. "It no longer meets his needs,'' said the local estate agent, trying to sell it for $6.15 million. He was forced to cut the asking price.

That's how tough it gets at the top in Wall Street.

Hmm, something about this doesn't seem right. So here we have a bunch of companies failing miserably. The person who was paid to make sure exactly that was not the case is still being rewarded handsomely. Sure, they've lost money, but they've still gained much. I think Mark Cuban nailed it when he said,

There is one major problem on Wall Street, that until solved, will result in meltown after meltdown in future years. I can’t say if the meltdown monkey will hit every 2,3, 5 or 10 years. But I can say with certainty that it will happen again. Why ?

Because Risk and Reward have been decoupled for CEOs on Wall Street.

If you are the CEO of a major public company, once you qualify for your golden parachute there is absolutely no reason not to throw the Hail Mary pass, and do high risk deals every chance you get.

The excuse for such high levels of pay is that these are jobs high in risk, and so there needs to be a high reward so people can accept the risk. But if the risk is still worth millions of dollars, I think it's fair to say that the risk is gone. And thus, the incentive not to fail is greatly removed.

I was glad to see Newseek this week analyze the levels of pay of more of these CEOs and give a fantastic rundown. They asked what the CEOs heavily involved in the events of the past week went away with financially.

So what can we do? Is this a problem? I personally would not be opposed to legislation requiring publicly traded companies to cap CEO pay at something like 100 times the average worker at their company's salary. Thoughts?

Monday, September 15, 2008

Sunday, September 14, 2008

Urban Jesus

This is pretty neat. My church is currently doing a series called Urban Jesus. We're talking about how,

The city changes you. In many ways the city becomes you and you become the city. The church at Corinth allowed the city to change them, even their view of God.

Paul writes the first few chapters of I Corinthians focused on the person of Christ and how Jesus should change even how we live in the city. Urban Jesus is a study on how city dwellers should be transformed by the Gospel of Jesus even more than their city.

I think the graphic for the series is pretty cool too.

Being a part of a church that is continuing the discussion begun by Tim Keller, Ray Bakke, and Bob Lupton, among many others, is pretty fun.

Saturday, September 13, 2008

Thursday, September 11, 2008

What's the best show on TV ever?

Jason Kottke wants to know.

And if you know us, you know we're happy about the results so far.

Wednesday, September 10, 2008

The Suburban Dream

So, after basically taking two months off, I'm back. Or at least I hope to be.
What better subject to kick things off with than a spiel on the collapsing suburban dream.

So a couple months ago, CNN ran an interesting article asking whether, "America's suburban dream [is] collapsing into a nightmare?" They noted,

This change can be witnessed in places like Atlanta, Georgia, Detroit, Michigan, and Dallas, Texas, said Christopher Leinberger, an urban planning professor at the University of Michigan and visiting fellow at the Brookings Institution, where once rundown downtowns are being revitalized by well-educated, young professionals who have no desire to live in a detached single family home typical of a suburbia where life is often centered around long commutes and cars.

Instead, they are looking for what Leinberger calls "walkable urbanism" -- both small communities and big cities characterized by efficient mass transit systems and high density developments enabling residents to walk virtually everywhere for everything -- from home to work to restaurants to movie theaters.

The so-called New Urbanism movement emerged in the mid-90s and has been steadily gaining momentum, especially with rising energy costs, environmental concerns and health problems associated with what Leinberger calls "drivable suburbanism" -- a low-density built environment plan that emerged around the end of the World War II and has been the dominant design in the U.S. ever since.

Thirty-five percent of the nation's wealth, according to Leinberger, has been invested in constructing this drivable suburban landscape.

But now, Leinberger told CNN, it appears the pendulum is beginning to swing back in favor of the type of walkable community that existed long before the advent of the once fashionable suburbs in the 1940s. He says it is being driven by generations molded by television shows like "Seinfeld" and "Friends," where city life is shown as being cool again -- a thing to flock to, rather than flee.

"The image of the city was once something to be left behind,"

Continuing on that theme, the Freakonomics blog ran a quorum on the subject. They asked, "What is the Future of Suburbia?" Answers ran the gamut from 'apocalyptic utopianism' to 'brutal reality.

I then read a great article which talked about this trend featuring, of all places, Chicago. In The New Republic, in an article called Trading Places, Alan Ehrenhalt wrote about the demographic inversion of the American city. He notes,

In the past three decades, Chicago has undergone changes that are routinely described as gentrification, but are in fact more complicated and more profound than the process that term suggests. A better description would be "demographic inversion." Chicago is gradually coming to resemble a traditional European city--Vienna or Paris in the nineteenth century, or, for that matter, Paris today. The poor and the newcomers are living on the outskirts. The people who live near the center--some of them black or Hispanic but most of them white--are those who can afford to do so.

I'm not necessarily sure what to think of this trend. While part of me doesn't want to be part of a trend, I'm completely on board with the benefits of 'New Urbanism'. One of the things we love about the city is the walkability and the option of accessible public transit. Being part of a densely populated area seems to lend itself to a dynamic level of life in a neighborhood that is very appealing to us.

At the same time, there is no doubt that choices are being made. As noted, cost of living is higher. And certain amenities are being chosen over others. And I suppose it does come down to what you matter most. But I guess what most matters to me is that people make that choice not based on false reasons, like schools, but on what they actually are choosing between.
We must ask ourselves, do we want a big yard or a walkable community?