Thursday, November 29, 2007

Negative Energy?

Singles is one of my favorite movies. How can you go wrong with big cameos from Eddie Vedder, Stone Gossard and Jeff Ament? Plus there are priceless scenes like this one that you can relate to your own life. Love it.

Tar Sands

I'm a little behind on my New Yorkers but came across a cool article on oil production in Canada. The article by Elizabeth Kolbert, who has been on a serious environmental writing roll by the way, details an oil extraction process that takes a tar like substance found in Canada and magically turns it into oil. The drawbacks are environmental damage and it takes a lot of energy to go through the process. Kolbert estimates it takes about a barrel of oil energy to produce 3 barrels of oil. Not an amazing yield, but with oil at $100 a barrel, it makes economic sense.

I first became aware of this type of oil production technique when a company I invested in, Newmont Mining (a gold miner), bought a huge track of land in tar sands country. The purchase was about 4 years ago, before Oil prices went crazy. Management of Newmont saw their energy costs going crazy and decided it would be a great hedge. Turned out they were right and turned something like a $100M investment into a $1B return and effectively immunized the company from rising energy costs for about 50 years. Not too shabby. That's what good management does.

Wednesday, November 28, 2007

Finance Nerdiness

One of the complicated structures we worked on in my Tax Finance class at Kellogg were these inventions called DECS. They basically looked like a debt or preferred equity security, but were effectively a combination of buying stock while also buying and selling Puts and Calls on a stock. Essentially, the investor in the DECS trades upside in the stock (selling a Call) for an enhanced dividend or interest payment. Well, it had been a while since I thought of this instrument, until Citigroup issued a big stock offering yesterday.

On the surface, it looked like a terrible deal. Why would Citigroup raise a bunch of money at an 11% Preferred Dividend Rate? Way too expensive and must mean they're in trouble. At least that is what I thought. Then I came across this analysis of the security by Andrew Clavell and realized it was a DECS, just like the ones I studied at Kellogg.

It was actually a pretty cheap way of raising capital for Citigroup. I felt a little dumb for not seeing this right away. Thanks for passing it on Paul Kedrosky.

Tuesday, November 27, 2007

Weddings Are Special

I think my favorite part of weddings are the first dance. Matt Belloni passed this sensitive moment on to me.

Monday, November 26, 2007


Some of Kenny Kellogg's faithful readers have been asking for more perspective on the decline in the housing market. I've been a little gun shy on this because I don't want to be seen as jumping on the downturn bandwagon and it's a sensitive topic because a lot of my friends have bought pads in the last couple years.

Well, the good news is that all my friends have bought in places that figure to retain value - like San Francisco, Downtown Chicago, immediate East Bay suburbs of SF (not to be confused with outer suburbs), Santa Monica, etc.

The bad news is that a housing decline affects us in unpredictable ways. Check out the article below from Paul Kedrosky's blog. California is facing a monster deficit this year. Imagine cutting the state budget by 10% - that is going to be hard and very ugly. Last time we were in this position, we floated a bond that may have been technically illegal because California is not really allowed to go into a deficit. Crafty lawyers found a way around the problem last time, but can we really do that again? 10% is a lot of healthcare, school and transportation programs that are just going to disappear.

I'll leave you with an image from Kedrosky's Blog. This shows that we're still working our way through the sub-prime and adjustable rate mortgage problem. We've got a long way to go.

California State Revenues: Into the Housing Abyss

While I had been expecting that California would see a state revenue shortfall in 2008 of around $8-billion (up ten-fold from this year), Governor Schwarzenegger announced today that the situation will be even even more dire. Fueled largely by housing's collapse, the California state budget is now forecast to have a $10-billion shortfall in the coming fiscal year.

Gov. Arnold Schwarzenegger on Monday ordered all state departments to draft plans for deep spending cuts after receiving word that California's budget is plunging further into the red -- largely because of the troubled housing market.

Sunday, November 25, 2007


I had the pleasure of dining at Mikuni last night. My bro, his wife and his buddy Mike and I ate and drank our fill. Mikuni is the go to Sushi restaurant in Sacramento. It's hip and the food is unbelievable. Definitely hit it up if you are passing through or just in Sacto.

By the way, for the longest time, my buddy Krantz, who grew up in Sacto and was a busboy there in high school, would wear a Mikuni shirt to Saturday hoops. We had no idea what it meant so we would always ask him. Krantz's response, "Oh, it means fertile young male." That always brought the house down.

True story.

Friday, November 23, 2007

What He Said

Fred Wilson writes one of the best blogs on the Internet. He's a NYC VC but he mixes in a lot of content about music (we have similar tastes) and technology. He figured out that writing a blog gave him a competitive advantage in venture investing because entrepreneurs can follow his thought process and "get to know him" via the blog. Stopping right there, he's a smart and very successful dude.

But every once in a while he mixes in a really cool political point that serves as icing on the cake. He did just that this morning with his entry, "Technology Trumps Government Again." It's worth the 2 minutes it will take you to read.

I'm a big believer in technology. In fact, if someone asked me what my true religion is, I think I would respond with faith in humanity's creativity to improve ourselves. No where is that better demonstrated than in technology markets where devices, services and new ideas are constantly bubbling up to make out life better. It's nothing against Government. I believe it's better that Government is less creative, and Government programs often lay the foundation for discoveries that change the world.

Anywhoo, Fred doesn't really address this, but there is some ideal balance between Technology and Government and I think the U.S. is pretty good at managing it. But we have an Ace up our sleeves. We have those tireless entrepreneurs that Fred and others like him are funding. Willing to chase their dreams for the benefit of all of us. People are pretty cool.

I suggest adding Fred to your must read list.

Thursday, November 22, 2007


I'm not a big nature guy, but my nephew passed this onto me. Cool stuff. Research scientists deserve a lot of credit for such a thorough experiment.

Thanks from Kenny

Just a quick shout out to all my friends across the country - actually world - on this fine Thanksgiving Day. Last year this time, I was having the time of my life living in London with Lisa and Dan, attending London Business School and hanging out with the Walm and his crew.

Today, I'm back in the Bay Area and as Fred Larson's photo to the right shows - it's been great. Thanks everyone who helped make the last year amazing and special thanks to the huge amount of people who have helped me on my job search! It feels great to have such great friends.

Let me leave you with a cool Jeff Tweedy (Wilco) song about Thanks. It's a catchy sing along tune that Tweedy used to defuse a touchy situation in Oregon on his last tour. My favorite part of the the song? The "we can make it better" lyric.

Thanks to everyone for a great year, and let's make it even better next year!

Wednesday, November 21, 2007

Stone & Brad

Stone Gossard is cool for many reasons. He has one of the coolest names, "Stone," that i can think of. He's rhythm guitar for Pearl Jam and wrote songs like Elderly Women and Daughter. And finally, he plays in Brad, which is fronted by Shawn Smith, and made some amazing records about 5-10 years ago.

Here are a couple samples. Day Brings is my favorite.

Unfortunately, Brad isn't huge on the Internet, so check out Secret Girl, Buttercup, and Screen among others.

Finally, Stone Gossard popped into my mind because I saw this interview he did recently. Brad is getting back together and will be releasing a new album soon. Pretty cool. Brad is also playing at Webster Hall for a benefit, which Stone was promoting in the interview. Check it out.

Tuesday, November 20, 2007

Friday Night Horses?

One of my favorite new CDPublish Post's is the Band of Horses' Cease to Begin. These horses were originally recommended to me by Mr. Bryan Kenna and Mr. Matt Ziser. Their last album Everything All the Time is pretty good too, but I really dig Cease to Begin.

They're playing the Fillmore in SF this Friday night. I'm going to try to make it, anyone with me?

Here are some of my favorite tracks.

Band of Horses on The Late Show at Culture Bully

The transformation is complete : Band of Horses at It's hard to Find a Friend

Band of Horses Hit the Right Notes at Glorious Noise - Rock and roll can change your life

Monday, November 19, 2007

Chuck Norris Approved

Reader Beth passes on this NY Times article about Chuck Norris endorsing former Arkansas governor, Mike Huckabee. It's an amazing video you can find below or on the article page.

Personally, I love it. Why can't politics be fun? And who dares to disobey Chuck Norris?

Sunday, November 18, 2007


Recently, the Head of NBC Entertainment claimed he was “...bum-rushed by a journalist operating unfairly.”
That journalist? My friend Matt Belloni. Matt wrote a great article in Esquire's Best and Brightest issue on Ben Silverman, the entertainment guru at NBC. It's hard to believe that someone in such a high profile and powerful position could ever get fooled by a journalist who is nothing but professional and honest.

The NY Times picked up the story and that is where the bum rushed quote comes from. Pretty neat for Matt that his story got so much play.

Matt is as good as it comes. Check out the articles.

Tuesday, November 13, 2007

Cool Photo

I'm feeling a little saucy today so I thought I would post this awesome picture I found recently. It's from the blog, Daily Dose of Imagery, which I really enjoy. Check it out.

Friday, November 9, 2007

NPR Goldmine

Ladies and Gentleman, here is a scoop straight from Greg Mercer, check out NPR Music: All Songs Considered. It's a neat portal on up and coming bands that have appeared on NPR recently, but the real gold mine is the Podcast link to the right of the page. NPR is publishing concert podcasts so you can listen to them on your Ipod or other music playing device (are there any others?). The whole concert, live and sounding good. Wow.

I'll be listening to the New Pornographers, or maybe Andrew Bird. Wait, what about Death Cab, or the Yeah Yeah Yeah's, or Spoon. Options abound!

Wednesday, November 7, 2007

The Enemy

It's a big week in college football for CAL Fans. We're playing USC this weekend and even though both teams have under achieved, CAL is still dying to beat them. For some, Pete Carroll, USC's head coach, is the bad guy. Others dislike their stable of High School All American players.

I know it's deeper than those two groups though. I firmly believe that it all starts with those USC cheerleaders. The recruiting brainwashing begins early. Would-be football players are watching ABC at the age of 10, trying to decide where they want to go to school some day, and then the camera flashes the Dance Squad and it's all over. That kid is going to USC, no if's, and's or but's. It's a done deal.

It's ugly, I know. But it's the truth.

Taylor, a newly converted CAL fan, has infiltrated their secret society and provides this link. Do your research people. We need to know the enemy.

Sunday, November 4, 2007

Feedburner & Customer Service with a Laugh

Chicago isn't known for producing kick butt tech companies, but it did just that when Dick Costolo (his Twitter feed and his Ask the Wizard Blog) and his pals started Feedburner a few years back.

I'm a big fan of Feedburner and use it to tell how many people read this blog daily and how many loyal subscribers I have (people who read through an RSS feed subscribe to the feed, it's much easier then remember to click on Kenny Kellogg). The company was acquired by Google in May for about $100M. Mad props to Dick.

While I was at Kellogg, he was kind enough to drop by once with one of his VC's to answer about a million questions from budding entrepreneurs at school. He then followed that up by having dinner with about 10 of us where he was asked another million questions. He answered every single one directly and honestly, and I think I learned more in those 3 hours spent with Dick then in a lot of my classes at school. He's the man.

One great thing about talking to Dick, reading his blog and following his twitter stream, are that he has a really funny, dry sense of humor. Even when it comes to customer service. His entry today made me laugh. Making customer service fun, now that is a talent.

November 04, 2007

Saturday Subscriber Count Drop?

If you saw your subscriber count drop precipitously in your Saturday, November 3rd summary from FeedBurner, the reason is that specific subscriber stats from Google Feedfetcher were offline because this service was apparently out late with friends on Friday night, and well, it completely slept through Saturday. It appears to have rallied, however, and amid firm declarations of "I'm never doing that again", Feedfetcher has started diligently reporting subscriber numbers to us, early this morning Pacific Time. FeedBurner publishers' subscriber counts should be closer to what you'd normally expect starting with reports that will be available on Monday morning.

Posted by Dick at 11:05 AM

Saturday, November 3, 2007

Happy Birthday

A special birthday wish to two of Kenny Kellogg's favorite people. First, the lovely Cathie Kaiser had her 29th b-day today. Cathie has been a friend from the minute I got to know her while traveling with her, Kaiser, and Schweif in Croatia. It was the beginning of a fantastic trip and a life long friendship.

Another happy birthday goes out to Mr. Gust Funnel himself. I'm sure he and the boys are celebrating properly in Chicago this weekend. Wish we could be there. Those of us on the West Coast will get our chance though, as our favorite beard sporting, red-head will be hosting a little get together before CAL vs. USC. Care to wager on which witty t-shirt he'll be sporting on gameday?

Friday, November 2, 2007


My dad was a fireman for about 30 years so I know how dangerous open wildfires can be. I watched the situation in San Diego with concern for friends and their houses, but also for the firemen who were risking their lives.

The losses were severe and life changing for many people. In my search for a silver lining, I stumbled upon this photo of the fire charging towards downtown San Diego and this New Yorker cover.

Both images capture some of the fear that the fire brought us. But the images themselves are beautiful. They can help those affected by diffusing the fear and bringing many more of us into the conversation. Art is cool like that.

Thursday, November 1, 2007

Ames Bros

Anybody who is anyone knows I'm a Pearl Jam fan. But only those who have been to my various apartments knows that I collect PJ concert posters. Those very posters, are designed by Ames Bros.

Today, Ames Bros in conjunction with Pearl Jam announced they are publishing a book with all the cool PJ posters from the last 13 years. Pretty neat stuff. Check it out here.

In the meantime, here are some of the cooler posters that I impress girls with.