Bay City Wheelers

San Francisco is a city of marvelous contradictions - with a hip, active, and progressive youth culture surrounding a more staid, though worldly, up-class core, The City By The Bay continues that duality in the way it's people get around. 

More than most other large cities in the US,  San Francisco embraces two wheels.  Even bursting at the seams with options like buses, trolleys, light rail, cable cars, and taxis, the people of The City like to ride their motorcycles, scooters, and bicycles.

Walking just one four block area there recently, I counted 3 bicycle shops.  I was passed by at least a dozen motorcycles, and I passed more parked in the street.  And there were scooters parked up on sidewalks everywhere.  And this in a city with tight traffic, slippery tram rails, and steep hills - all nasty things to deal with on two wheels, whether powered by fossil fuels or your own flesh pumps.

Maybe it's the commuting and parking challenges residents face that lead them to two wheeled alternatives in greater numbers than elsewhere.  It's not an easy thing to find a space to park a car in San Francisco.  I once spent the better part of an entire evening stubbornly searching out a spot near a friend's house to park my car.   Any local would have given up and parked illegally and accepted a ticket, but that idea didn't register with my LA-trained brain.

It could be the hassle of driving and parking a car, but I don't really think so.  I believe I know the real reason two wheeled travel is so popular in San Francisco:  it's just plain cool.  And fun. 

For bikes with motors, the hills are like ramps to the heavens, a rush-up to the precipice of Knievel-like jumps.  For pedal pushers, they are a personal Everest or Tour de France hill climb.  For both the downhill run is like, well, a downhill ski run, or a parachute jump.  If you hit the right sort of bumps it could be like flying. Thrills, fun.

If there are more reasons to be found for San Francisco's two-wheeled love affair, I don't need to find them.  It's simply cool to see.  From tattered 70's era Honda CB550 Fours, through the latest Ducati superbikes, from Vespas to Made-in-China unknown scooters, from exotic $4,000 bicycles to ancient Schwinns, it's a visual (and aural) treat for lovers of things two-wheeled.

If you travel on two-wheels, or hope to, visit The City By The Bay.  Sit outside a coffee shop in North Beach, or hang out in the Haight, and observe.  You will be inspired...

Mergers and Collisions

Waking this morning to the news that yet another drug-maker has taken over yet another drug-maker, I spilt my coffee, coughed a chunk of bagel out of my right (I'm sure) lung, developed a pounding headache, and went in search of drugs.

Not that long ago, Pfizer, the unstoppable Borg collective of pharmaceutical companies, assimilated Wyeth.  This time around Merck is swallowing Schering-Plough.  It won't be long before New Jersey is just one giant drug company, it's only a matter of which one - Pfizer or Merck.  I wouldn't bet against the Borg.

But wait. Mergers are good, do I hear you saying?  They focus resources to best effect? Mergers are inevitable and necessary in this economy?  Are you crazy? Are you Jim Cramer?

True, ideally a merger could just possibly result in a combination of the best qualities of two companies rolled into one streamlined company shed of the worst qualities of the previous two.  In the biopharmaceutical space, it could mean more resources to get needed drugs to market.  Sadly, the result is often more like a focused collision that slices away jobs, dumps potential drug candidates, and gives upper management of either company who wish (or are asked) to leave magnificent parachutes of silver and gold.  Mostly gold.

You can be sure that jobs at Schering will be lost.  Maybe a few at Merck as well.  Some drugs with potential to help disease sufferers will be dropped to focus the line.  With luck these will be licensed out for development by smaller companies (if there are any left), but some will be shelved and forgotten.  And some patients will never see relief.  

But that's business.  Only blockbuster drugs with the potential for billions in sales will do for a truly large pharmaceutical company.  That promising but costly to develop treatment for the distressing disease with only the potential for maybe 50-100 million in sales?  Not worth the time or capital. We've got stockholders to please.  Sorry.

Man, do I ever have a headache...

Chicago Hope

Not the old TV series of that name - the one in which Mandy Patinkin performed one of his patented disappearing acts after the first season.  No, I'm talking here about the Hope which has come out of the City of Big Shoulders in the person of Barack Obama, now deep into his first 100 days as our President.

Hope is critical.  Hope is what we need most at the moment, as a Nation, and it sure seems the World needs it too.  And the World seems to be looking at us - at President Obama, if not for answers, then at least leadership in Hope.  

We and the World haven't received much more from America's leaders in the past 8 years than admonitions to be very afraid, but trust in them to do what is necessary.  Being very afraid was easy to do, but trust in Bush and his people was a hard ask given their obvious self-serving, condescending take on governing.  And trust became all but impossible after the lies used to justify Iraq began collapsing one by one.

Barack Obama has our trust, and that of the World, for now.  His brief tenure hasn't been perfect, with missteps here and there due to, perhaps, inexperience, but just as likely the result of the complexity of the challenges that face his administration.  There have been those mistakes, both in substance and in tone, that have given pause to us and encouragement to those who wish him to fail.  Even so, the Hope he has brought with him from Chicago continues to hold sway.  We are forgiving and resilient in our support - for now.

If President Obama appoints Mandy Patinkin for any critical post, however, all bets are off.

Instant Depression

Just when you think it's gotten about as bad as it can get ...

The Federal Deposit Insurance Corporation (FDIC), the folks that ensure you can get your money out of the bank when you need it, have just told US banks that it needs to raise the fees they pay for the coverage or else the fund will become insolvent.  Seems the brilliant idea of raising the protection limit for individual accounts from $100,000 to $250,000 turned out to be something of a miscalculation, leading to a more rapid drawing down of the fund than expected as banks have failed.

To you and me all this means our savings would be at risk should the fund be exhausted and our banks fail.  Instant Depression.

Odd thing is, why isn't this being dealt with in the gigantic stimulus package just approved?  Surely you could fit another $22 billion or so into that massive bill?

And why is this particular dirty laundry being announced publicly by the FDIC?  Is this a case of too many threads for Obama's crew to tie? Entrenched bureaucracy trying to get attention from the new boss? 

It doesn't make sense to burden the banks further just as we are adding to the bailout funds, and it surely makes no sense to shout this from the media mountaintops, unless some brinksmanship politicking is being played out, and the exposure and resultant citizen terror is a key tool.

Perhaps this is just a routine government misstep that will be quickly smoothed over? Let's hope so, or else, with Citi dropping below a buck in stock value and other banks getting close to the precipice, depositors (that's us) will be very uncomfortable letting our money stay put without confidence in FDIC protection.

Babble-On 14

Hump day musings on news that may have slipped under your radar. Don't panic, there's not a jot of economic grousing in the lot.  Well, maybe a jot.

Panic at 30,000 feet - Cheapo CEO Michael O'Leary, wants his Ireland-based airline Ryan Air to charge passengers to use the toilet.  Not content to charge for baggage, food, drink, and pillows, the no-frills service seeks to boost profits by taking advantage of the weak bladders of older fliers.  This action will be followed by the in-flight sale of adult diapers.  What's next? Charging for seat belts and air?

Panic at ground level - For those stalwart travelers somehow able to avoid wetting themselves on Ryan Air, there's bad news when you arrive at your destination. Diseases. Lot's of 'em. From well-known killers like Malaria, Typhus, and Yellow Fever, through less fatal but nonetheless tiresome plagues like 'Montezuma's Revenge'.  Some have unfamiliar names, like Norovirus, or Chikungunya (also a virus), and you will want them to remain unfamiliar.  Hey, how's this for a Ryan Air moneymaker?  In-flight innoculations!  (With every shot you get a token for the toilet).

Panic at TED - So, you aren't planning to fly Ryan Air or travel to some disease-ridden destination anytime soon?  Feeling left out?  Bill Gates has got your back.  The Microsoft founder and all-around Geek God opened a suitcase full of mosquitoes at the Technology, Entertainment, and Design (TED) conference back in early February.  Gate's aim was to publicize the dangers of Malaria, which mosquitoes transmit from human to human, but his actions resulted mostly in lame (and systematically incorrect) quips about Microsoft and 'bugs'.  [Note for non-entomologists: mosquitoes are not bugs.  Remember - all bugs are insects, but not all insects are bugs. So there.]

Don't panic, but keep your head well down until the weekend.

Visiting The Wrecks

[as intro, cue the theme from the movie 'Titanic' - or maybe 'The Abyss'...]

Sitting at the bottom of oceans around the world, are the wrecks of once proud sea-conquering ships.  Visiting these monuments to the ultimate preeminence of Nature over Man requires a willingness to expose oneself to darkness, pressure, cold, and death.

Not dissimilar to investing in the fallen behemoths of industry ...

Diving into the financial depths takes the bravado of Mike Nelson, the dedication of Chatterton and Kohler, and the audaciousness of Buffet (Warren, not Jimmy).

If you take the plunge you will see, as you approach the bottom, apparitions appearing from the ghostly dark.  The broken hulks of financial goliaths like the Lehman, the Bear Stearns, and the Washington Mutual resolve into view, ruined 'instruments' spewing out of ruptures in their fiscal structure.  An enticing panorama drawing you in...

Think before penetrating these wrecks, though.  

Inside, the tangle of failed machinery will confuse and entrap the unwary diver.  And the most valuable parts were already salvaged by the good ship JP Morgan Chase, before the rest was consigned to the depths, so there is little reason to risk a distressing death by entering.  You may find only worthless common stock, bled out from investors forced overboard before the salvage.

But wait, you ask, what of those ships only wounded?  Those that lie only half-submerged in the world's fiscal seas, foundered only partially by the economic perfect storm?  The great ships AIG, Fannie Mae, the Citi, and the Bank of America.  The dreadnoughts GE, Ford, and GM.  The fast cruiser Chrysler.  Can these be safely visited by plucky and ever-hopeful investment divers?

Personally I would rather dive a single tank to the Andrea Doria, but for a less depressive answer look to the world's top wreck divers.  If as properly trained and well-equipped with the right gear and tools as those daring souls, the truly adventurous investor might visit the grounded vessels and shallower wrecks safely.  

Just watch out for the sharks that circle...

[cue 'Mac the Knife' for the outro, as performed by Bernie Madoff ... ]

Poetry Break: Opportunity Knocks

[In disaster there is often opportunity - hideously disguised, true, but opportunity nonetheless]

When Opportunity Knocks

You should listen

Not hide in the closet, or

Run for your life

Not imagine the worst, and

Fear disaster and strife

When Opportunity Knocks

You should listen with care

Listen with ears, with eyes, 

Even with hair!

Listen with everything you've got

Listen like there's no tomorrow

'Cause if you miss the knock, knock,

Knocking at your door

If you wail with dread

If you fall on the floor and cover your head

If you hide and miss this knock at your door,

Opportunity might not come back - 

and Knock, anymore!

[Of course the trick is knowing whether what's knocking is Opportunity or The Wuggly Ump]