NFL Star Joe Montana's Investment Firm: A Cautionary Tale

Joe Montana
Image:profootballhof.com

If you were to ask what Joe Montana, Ronnie Lott, and Harris Barton have in common, most Bay Area residents and pro football fans would say "San Francisco 49ers." And that would be a correct answer, but not the only answer. The NFL trio also founded a tech investment firm called HRJ Capital during the go-go days of the initial Internet stock boom. (We are experiencing the second, equally feverish Internet IPO wave now.) According to the interesting reporter Peter Delevett's story in siliconvalley.com, Joe Cool and his pals at their zenith managed two billion dollars in assets. However, when the Internet gold turned to dust, HRJ Capital encountered severe financial issues. Given that two of HRJ's clients were Barry Bonds and Peyton Manning, the firm's fiscal crisis must have generated some interesting conversations (particularly with the notoriously surly Bonds). In 2009, Lott, Harris, et al., sold the business to a Swiss enterprise called Capital Dynamics. (Montana had jumped ship in 2005.)

Apparently, the yodelers did not perform sufficient due diligence. The Swiss ended up on the wrong end of expensive litigation. Recently, the opposing sides reached a settlement that cost the European mountain men a mere nine million dollars. As was often the case during the 49ers run to glory, Montana and his two teammates were not penalized, not even for holding.

110-Year-Old Holocaust Survivor -- RIP

Alice Herz-Sommer
Image: newyorker.com

Alice Herz-Sommer, a Jewish-Czech pianist who survived concentration camp incarceration during World War II, passed away recently at age 110.

Her remarkable story became the subject of a book and is currently the focus of an Oscar-nominated documentary. Details about Herz-Sommer's life and perspectives on her experiences were included in the Associated Press obituary that was picked up in today's sfgate.com.

Intriguingly, as a young girl, she met Franz Kafka, who was a friend of Herz-Sommer's brother-in-law. Apparently, she "enjoyed the stories that (Kafka) told." Unstated was whether the author's stories included references to a castle.

Sole "Made in France" Beret Manufacturer Making Last Stand

OK, here's a quick quiz for you: what's the difference between a genuine French beret and impostors? If you answered (a) made from wool, (b) weatherproof and (c) includes a leather interior ring to snugly fit one's head, you win. If you added (d) doesn't smell when wet, you get extra credit. (I suppose you can use that in the afterlife.)

Image: laulhere-france.com

According to a Bloomberg News story picked up by the Chicago Tribune, the traditional, authentic "made in France" beret is in danger of becoming commercially extinct. Only one manufacturer -- Laulhere -- remains from a once-thriving industry. France's issue is that cheaper Asian competitors produce berets for a fraction of what the real thing costs. (Full disclosure: I own two black impostor berets.)

The notion of a Frenchman or Frenchwoman wearing a cheap beret made 10,000 miles from Paris is a tough one to swallow. The French have historically protected firms from foreign acquisition. The government also subsidizes "strategic corporations," such as its aerospace enterprises. Sometimes national pride has a price. Is it time for the French government to protect a symbol of its Gallic identity?

USPS Planning Steve Jobs, Jimi Hendrix Postage Stamps

A Steve Jobs postage stamp
from Mozambique, circa 2011
Image: shutterstock.com

The United States Postal Service used to produce simple stamps for a simpler time. The current USPS regime has decided to "engage" postal service users by creating groovy, somewhat celebrity-driven stamps.

According to a Washington Post article, the cherished dead who will appear opposite lickable stamp surfaces include Steve Jobs, Jimi Hendrix, and Johnny Carson. I like the idea of placing these figures on some "forever" postage stamps, although I'm trying to imagine any of the three actually mailing a letter.

Washington State Swamped With Pot Growing License Applications

Image: justice.gov

While Wall Street analysts and ambitious politicians grasp at nearly any job creation straw, there's one industry that can't keep up with demand. Pot growing entrepreneurs have inundated Washington State with applications to grow weed. The Pacific Northwest state recently legalized the regulated cultivation and sale of pot. According to an article in today's Seattle Times, Washington's Liquor Control Board (LCB) had initially assumed a cap of two million square feet would be sufficient for the state's marijuana planters. The LCB misjudged demand by approximately thirty-three million square feet. Oops.

In fairness, the Seattle Times story noted that the Obama Administration influenced Washington State's planning. Essentially, the Feds didn't want extensive fields of pot plants, as DC bureaucrats didn't want Washington State to export its product to adjacent states where weed remains illegal.

Scottish University Elects Edward Snowden as Its New Rector

The University of Glasgow elects a rector every few years to represent its students and to help administer university resources. That's the theory. In practice, students use the vote and the candidates to make a statement about some aspect of world affairs. No one expects the elected officials, who are often highly visible, globally known figures, to be involved in the academic institution's daily operations.

Edward Snowden

If history is any guide, the Glaswegian students are a feisty lot. According to a Financial Times article, the U's voters have nominated and elected figures such as Winnie Mandela to the rectorship. This year, the University of Glasgow student body has outdone its predecessors by electing none other than Edward Snowden as the university's next rector.

One can only wonder what the American government, which has branded Snowden a traitor, thinks of this development.

World Press Freedom Index: For the USA, no Gold, no Silver, no Bronze

A French-origin organization called "Reporters Without Borders" (or RSB, to follow the French acronym) recently released its "World Press Freedom Index." The measure calculates, in the venture's words, "the negative impacts of conflicts on freedom of information and its protagonists." The index does not offer Americans much solace: The United States ranked #46 in RSB's roundup. In fairness, a number of the 45 countries above the USA, such as Andorra and Cape Verde, have marginal global gravitas. However, America's press freedom -- a bulwark of our nation's Constitution -- seems to have eroded, thus reducing respect for information freedom here and around the globe.

Image/ad created by Publicis Brussels

Naturally, the Snowden affair loomed large in RSB's unflattering evaluation. And overall, the Obama Administration's ruthless intimidation tactics against whistleblowers and leakers (though not against its own sanctioned purveyors of privileged information) lowered RSB's estimate of American press freedom.

Our nation ought to be ashamed by the RSB report. Liberals, in particular, should look in its collective political mirror. The American left has reluctantly criticized the Administration for its blunt attempt to muzzle bad news through punitive jail terms, intimidating enforcement tactics, and Mafia-like silence. In fairness, news organizations, including strange bedfellows such as Fox News and The New York Times, have pushed back against 44's intent to silence those who attempt to illuminate his administration's darker corners. Alas, the champions of press freedom are diminishing in number and clout, while there is greater national comfort with corporate, political, and governmental secrecy.

PS. Thanks to the financial blog zerohedge.com for bringing this story to its readers' attention.

Verizon Pushes FCC to Turn Off LA Office Tower's Lights

Yesterday, I did not realize fluorescent lights could disrupt wireless communications. Ah, what a difference a day makes. A piece in today's theverge.com reported on issues Verizon has experienced with a Los Angeles office tower illuminated with the offending light bulbs. Initially, Verizon had to identify the source of the service disruption. After some sleuthing, the wireless provider determined the Ernst and Young Plaza structure was the culprit. Verizon complained to the FCC, and the Feds began to hondle with the building's owners.

Image: gelighting.com

The problem has not yet been resolved, according to theverge.com's story. What's curious about the episode is the FCC's involvement. At first blush, one would assume wireless cases would naturally fall into the Federal Communication Commission's purview. Not so fast. Sometime in the FCC's history, the agency became the regulatory agency for fluorescent light bulbs. According to theverge.com's piece, these particular lights "are regulated by the FCC since they fall under 'industrial, scientific, and medical (ISM) equipment.'"

You can't make this stuff up.

Bay Area's Young Tech's "Clusters of Affluence" Rattle Established Neighborhoods

The local impact of Silicon Valley's gold rush attained unwanted publicity in late 2013. At that time, some San Francisco and East Bay residents protested Google commuter buses whisking away young, prosperous tech engineers to their Valley employers. Beyond the free, employer-sponsored transportation, residents cited how the young tech crowd drove up rents, transformed working-class areas into hipster enclaves, and seemed largely disconnected to their established neighbors.

Mission Dolores
Image: Michel Mintaka/Flickr Creative Commons,
found on missionlocal.org

The Mission district, home to a large Hispanic population, has become a favored bedroom community for the young, the tech, the proud. A generation ago, I briefly lived adjacent to the Mission district. The area had the singular advantage of being in San Francisco's sun belt, which I enjoyed. My apartment's kitchen window looked out over the neighborhood and the Bay. Mission Dolores, after which the neighborhood is named, was a short walk from my residence. Very, very few of the homes or apartment buildings (and certainly not mine) seemed made to order for $10,000 per month rents.

Times change, and $10K per month is what a two-bedroom in the Mission neighborhood can now command. Who can afford them? You guessed it: the "I-can-have-it-all" tech employees. And are they paying? Yes, they are. The disruption to an established community such as the Mission's is palpable, ongoing, and in some circles, desirable.

Today's sfgate.com includes an article in which a data specialist identifies San Francisco's "clusters of affluence." The Mission neighborhood is among them. The story notes how legislation called the Ellis Act was used by some San Francisco landlords to shoehorn out lower-paying (but paying) tenants and welcome prosperous techies at substantially higher rents. (Ah, the "rule of law!")

Image: sfgate.com

The "clusters of affluence" notion makes a great deal of sense. New York (Manhattan and Whole Foods Brooklyn), Seattle, and Chicago, for example, include neighborhoods where the young, affluent, and tech-savvy can keep themselves company. Long-tenured residents? Well, they can move elsewhere, often drab inner-ring suburbs, can't they.

This phenomenon is making American cities more akin to European urban areas, in which the central city is home to the affluent and the suburbs (with certain elite exceptions) are for everyone else. It's an apt symbol of two Americas that does not bode well for the future.

GOP Faction Launches Fake Democratic Party Websites

Image: ajc.com

The political mayhem known as "dirty tricks" has again emerged in our nation's electoral process. The current iteration of this phenomenon was the subject of a recent Chicago Tribune story. The article noted that the National Republican Congressional Committee (NRCC) purchased web domains identical with the names of Democratic members of the House of Representatives. The NRCC created content for these domains, including negative information about the congresspeople. The NRCC also put its hand out for a donation, often under the guise of financially supporting the Democratic representative.

The NRCC claimed its approach to political communication was a legitimate, useful form of expression. An NRCC spokesman, according to the Trib's piece, will "continue generating the fake websites, saying the organization now owns 'hundreds of URLs that the Democrats chose not to purchase.'"

Unstated was the NRCC's commitment to transparency.

Facebook Heckler Gives Fine Art Photo the Finger -- My Response

A few days ago, a photographer posted a landscape image on Facebook. One person commented that it was a shot a 12-year-old could have taken. (For the record, I believe the picture in question required considerable imagination and skill to envision and produce.)

The comment about the image reminded me of an episode shortly after I graduated from college. I was visiting someone who was far wiser to the ways of the fine art world than I was. In an attempt to show off my undergraduate knowledge, I spotted a Norman Rockwell work and made a snide observation about it. My host presented a different perspective. He pointed out Rockwell's ability as a draftsman and that one should respect skill, even in unfashionable works.

For decades, some visual artists have endured similar "a monkey could do it" potshots as the photographer experienced on her Facebook site. For artists to resist coarse opinion requires strength of purpose and a healthy self-regard. Unfortunately, the temptation to believe that unflattering commentary is limited to provincial show-offs does not correspond with the varieties of human nature. There are plenty of professional reviewers, for example, who cynically or thoughtlessly believe pithy smart remarks demonstrate wit worthy of Voltaire. It's fair to say some Philistines dress in all-black New York outfits, talk a good game, and are savagely ignorant.

Martin Scorsese once sagely observed about his own craft that the more he produced, the more he realized he didn't know. Scorsese learned to embrace exploration and learning, qualities not always highly valued in the movie business. Artists from all visual disciplines have independently arrived at the same conclusion.

Scorsese grasped how fleeting and precious the chances to expand one's intellectual horizons really are. When one compares accomplished creation to the level of a pre-teen's guesswork, a much greater opportunity for inquiry, for understanding, for enrichment, has been given the finger. That's sad. However, I have the consolation of returning to the photograph and appreciating its quiet confidence, observational skill, and simple beauty. I'm thankful for that.

Canada to Give IRS Tax Info on Americans Living North of Border

The Obama Administration has distinguished itself as relentless in its efforts to close offshore tax havens. The Cayman Islands, Costa Rica, even Switzerland have agreed to work with the US Treasury to illuminate dodgy bank accounts. The administration's latest triumph of revenue accumulation is an agreement with Canada. The accord, according to an article in the Toronto newspaper The Globe and Mail, opens the door for the Canadian government to "start routinely (share) vast amounts of financial data about Americans living in Canada with U.S. tax authorities."

Image: passport.gc.ca

"The scope of the agreement," the story noted in an interview with an accounting professional, "is much broader than most people realize...virtually all companies in Canada -- from small family-run businesses to multinationals -- will soon be asked by their banks to provide more information on the tax status of their shareholders."

Approximately one million Yanks or dual US/Canadian passport holders live north of the American border. Oh, Canada!

Wall Street KOs Puerto Rico Bonds: Why You Should Care

Standard and Poor's delivered a blow against Puerto Rico's key bond grade today. The commonwealth's general obligation bond rating is now below Wall Street's version of the Mendoza Line. Why does this matter? Many investment funds' charters allow purchases of those securities that make the investment grade, so to speak. Considering that, according to a story in today's Financial Times, nearly seven of every ten municipal bond funds include Puerto Rican bonds, the market is poised for a Humpty Dumpty-style great fall.

The Puerto Rican general obligation bonds possess two virtues: they're triple tax-exempt and they offer high yields. In a one-percent or two-percent yield environment, Puerto Rico's nine percent-and-climbing annual reward delivers a powerful incentive to invest. Today's S&P announcement questions the island's ability to repay its debts.

For all the happy talk about the recession being over, we now face the reality of municipal bankruptcies and political entities that require serious financial restructuring. Detroit and a posse of mid-sized California cities have cried fiscal "uncle." Philadelphia, Puerto Rico, and Chicago are not far behind. (By the way, Puerto Rico, unlike Detroit, cannot declare Chapter 9 bankruptcy.) It's an ominous trend for Americans contemplating mid-term Congressional elections and a lame duck presidency.