JJ Abrams & Lost

In honor of Lost coming back tonight, I'm reposting a speech that JJ Abrams did at the TED conference. Abrams is the creator of Lost. I originally found this on Dutch Evans blog. If you aren't reading him regularly, you're missing out. He also has a top notch Best Music of 07's list up right now.

Tumblr

There is a relatively new blogging/messaging service out there called Tumblr. It's evolving rapidly and something I've been playing with. Hegarty uses it. Bain uses it. I hope to incorporate it into Kenny Kellogg soon.

Tumblr makes it super easy to publish images and and it is translating into an explosion of images on the web.

Pitfall was one of my favorite video games as a kid and this image, posted on a Tumblr blog just caught my attention.


Here is another interesting picture from the Nevver Tumblr Blog. Anyways, Tumblr is going to accelerate image posting on the web. It's the Twitter of Imaging, or maybe it will overtake Twitter in the short messaging category. It's unclear but Tumblr is a company to watch.

Drunk History 2

This series of Drunk History is amazing. Jack Black is in this one. Reminds me of my days at Berkeley, except history was never this fun.

Interview with Michael K. Williams

Another great Fresh Air Podcast interview from Terry Gross. This one is on Michael K. Williams, better known as Omar on the Wire. Omar is one of my favorite TV characters of all times. Lot's of great background on Michael K, how he got the gig and some pretty crazy anecdotes from his life. Definitely worth your time.

By the way, the Wire was just incredible this week. I've successfully converted about 4-5 Kenny Kellogg readers into Wire viewers and these folks inevitably send me emails saying they've "watched two seasons in 1 week" or "I'm completely hooked." Folks, start watching it, beginning with Season 1. It's that good.

Lost

I'm practically giddy that Lost is coming back tomorrow (Thursday). I will be glued to the TV on Thursday evening at 9pm. Tim Goodman wrote a great article on Lost in the SF Chronicle. Check it out.

Vampire's

I bought Vampire Weekend's new disk last night and have been listening non-stop all day. Here are two of my favorites. These guys are pretty freaking awesome.

Vampire Weekend - Cape Cod Kwassa

Vampire Weekend - The Kids Don't Stand A Chance

Abandoned

Deep thoughts from Paul Kedrosky on the "emptying out of suburbs" because of the mortgage mess.

I've felt some of the same things driving through Stockton, Antioch and Brentwood. Money quote: "These developments went from half-built and merely quiet, to progressively abandoned."

Experience

I stumbled upon this post by Nabeel Hyatt, a tech CEO and investor. He does a much better job saying what I was trying to say in my Hilary vs. Obama post. My favorite quote:

"This is about respecting those around us more for what we believe they can make happen than for what has happened to them."

Scary

60 Minutes weighs in on the sub-prime loan problems. My contention is this isn't just a "sub-prime" problem, but a "mortgage loan problem." The sub-prime people are just the canaries in the coal mine...

The Internet by Gabe & Max

Funniest thing I've seen in a while. Courtesy of Marc Andreesen's Blog (of Netscape fame).



His headline was hilarious too: "Pretty Sure These Guys Pitched Me on an Angel Investment Last Year."

Interview with Clark Johnson

NPR's Fresh Air Podcast is a really great interview show. Recently, the host, Terry Gross, interviewed Clark Johnson. Johnson directed the first few episodes of the Wire and has come back in Season 5 to star in it as one of the editors of the Baltimore Sun. He has a lot of interesting insight into making tv shows and some cool but a little sad storied from his family life. Check it out.

Friday Chill Music

It's a rainy day Friday so today's version of Friday Music will be very chill. These are all B-Sides that I've discovered on their albums after a couple listens. Enjoy, stay dry, and if you're in the mood, add your Friday Chill Music recommendation in the comments.

Radiohead - House of Cards
Perfect Radiohead. Great rhythms, melodies, just a great chill song off the new album, In Rainbows.

Band Of Horses - Detlef Schrempf
Almost my favorite song off the new Band of Horse disk, Cease to Begin. There is something very "Seattle in 90's." I can't place it, but it belongs on the Singles Soundtrack, and that is a high compliment in my book.

Cat Power - Metal Heart:
This song isn't quite chill. It's more "smoldering" but it's a good song off the new Cat Power disk, Jukebox. It jumped out at me on my first listen.

Choice

Must read essay by George Packer in the New Yorker on the choice voters have between Clinton and Obama. It's a fantastic article rich with details and great anecdotes.

After reading the article, it seems as though the author is trying to draw a distinction between Clinton (the person who will fight the battles to get things done) and Obama (the person who inspires others to get the things done). In my mind, it's the question you face when you are hiring someone. Do I take someone with experience who knows the job and is probably much safer, or do I take someone dynamic who could be someone truly special? Personally, I skew towards the dynamic person with huge upside, but the President of the United States is not someone you can fire six months into the job because it didn't work. It's a tough decision, and something I'll need to think about, along with McCain, if he get's the nomination.

There are other great discussions in the piece like the concept of "Clinton Fatigue", McCain's ability to play off the audience and how would give him an advantage over Clinton, and some cool Bill Clinton anecdotes.

The Checklist

As you can probably tell with the frequency of posts on the subject, I’m catching up on my New Yorker issues. The New Yorker is my favorite magazine and I hope it solves its business problems so it can remain viable. Call me crazy, but great journalism has to have a few wins, right?

In the December 10^th episode, Atul Gawande wrote a fantastic article on how intensive care units are trying to improve survival rates. I invested in Life Sciences companies before Kellogg and even interned at Becton Dickinson, a company that makes and sells a lot of hospital products. Those experiences taught me how deeply care providers and really anyone in the Life Sciences industry cares about patients. Folks, they care about their jobs and the good they do on a daily basis more than many of us could ever imagine.

You would expect an article on improving survival rates to be centered on a new miracle drug or a new medical device that allows doctors and nurses to do their job better. Well guess what, the innovation in question is a checklist. It turns out that the checklist helps standardize the incredibly complex care an Intensive Care patient must receive. One stat jumped out at me:

“A study of forty-one thousand trauma patients found that they had 1,224 different injury related diagnoses in 32,261 different injury related combinations for teams to attend to.”

Talk about complexity! Gawande compares this to the complexity an airplane pilot faces and says that would be like a pilot knowing how to fly 32,000 different airplanes. Wow.

The subject of the article, Peter Pronovost, a critical care specialist at John Hopkins Hospital who designed the checklist, and his innovation saved the state of Michigan over $175M and fifteen hundred lives in just over 18 months. As the article points out,

“[Pronovost] work has already saved more lives than that of any laboratory scientist in the past decade.”

However, rolling the checklist out across the country is incredibly difficult given the way government Healthcare delivery organizations are setup. If it was a new drug, there would be reps pounding down the doors of physicians, and company execs calling on insurance companies and hospital administrators. This is the crushing part of Healthcare delivery, it’s difficult to get attention and those on the front lines are often disconnected, doing their best to triage the situation.

I don’t have an answer for this problem, but awareness of "miracle checklists" and innovations in delivery is the first step…

Fake Steve on Reloading Options

Fake Steve Jobs is still one of my favorite blogs. I read his book over the holidays and it was good, not "Best Ever", but a solid read. He's on fire with this market collapse though. Here is a great post related to loading up the options of Apple's Management (Fake Management) with lower strike prices because the market is down.

My favorite line:

I think this might be a golden opportunity for a handful of top insiders to make some quick money. Ideally we'd like to see the stock get down below $100. Keep your fingers crossed! Daddy needs a bigger jet.

Ledger Obituary

Very well written obituary on Heath Ledger by Mick LaSalle of the SF Chronicle. Love that he acknowledges the press circus that will surely come. But he takes a step back and examines what made Ledger a great actor.

Teller Talks

From Paul Kedrosky's Blog, a great clip of Teller explaining magic tricks. Yes, that Teller, from Penn & Teller, and he really is talking. Very cool stuff on the art of misdirection.

My favorite quote: "make the intention so overpowering that people will follow that, instead of looking at the slight of hand."

Adams

Our friend Alex Bain brought the new HBO Film, John Adams to our attention today. Looks very cool. Somehow the link has disappeared from his blog, or I'm not very bright and can't find it. You can find John Adams here but may I humbly suggest making Alex part of your daily read?

Belloni's Best of 07'

Every year my buddy, Matt Belloni, sends a list of his favorite songs of the year. They're arranged mix style and I look forward to Belloni's Best every year. This year I asked him to write a quick blurb on each song so it could be shared with you, Loyal Reader. If you want to catch Matt's work, he writes and edits for Hollywood Reporter and for Esquire. A couple highlights:

• Interview with Diablo Cody, the writer of Juno.
• Article on Head of NBC Entertainment, Ben Silverman
• Internet Movie Piracy...in Pornography
  
• Lot's more cool stuff to come

Belloni's Best of 07'

1. "Spring and By Summer Fall," Blonde Redhead - This is the song of the year for me. Makes you want to drive really fast and roll down the windows and smoke cigarettes and change lanes without even signaling.

2. "Fa-Fa-Fa," Datarock - These guys are Norweigan (and the album was released two years ago there) but they sound like Jamiroquai to me (that's a compliment).

3. "Four Winds," Bright Eyes - The new album doesn't match his last two, but this song is as good as anything on Lifted or I'm Wide Awake. As Becker would say, it's incendiary.

4. "Myriad Harbour," The New Pornographers - As you know, my unhealthy obsession with Neko Case usually means I gravitate toward the Pornographers' songs with her on lead vocals. But this one is so weird and cool it stands out.

5. "Cold Hands," Black Lips - Despite the garage-band sound, I get an REM vibe from this band (an they're southern!).

6. "The Underdog," Spoon -- The horns never sound right when I listen to this song, but it's still a great representative track from another great Spoon album. Can't wait to see them in Austin.

7. "Tears Dry On Their Own," Amy Winehouse - True story: At SXSW in March, I heard this song coming from one of the showcase venues on Sixth St. I popped my head in and couldn't see the stage, so I just assumed it was a middle-aged black soul singer in town for one of the retrospective shows. About a month later I almost couldn't believe it when I saw who that voice belonged to.

8. "Antichrist Television Blues," Arcade Fire - A tough choice from this album ("Keep the Car Running" is great too) but this feels a little more anthemic, like it will endure for a while.

9. "No Relation (MTV Song)," The Procession - An LA band I really like, no pretention or hipness, just fun, well-made songs.

10. "Until You Leave," Stoney - Nic Harcourt (the KCRW host) gave me this CD when I interviewed him for Esquire, and it's a really interesting mix of conventional pop songs and unconventional instruments and sounds.

11. "I Feel It All," Feist - She's more of a Sunday Morning type, but even us non-sensitive types can get sucked in by that voice.

12. "All Coming Back to Me," Intercooler - These guys are Australian I think. Shows that pure pop music doesn't have to be embarrassing to listen to.

13. "Stronger," Kanye West - And even if it is a little embarrassing, it's still worth it.

14. "Bodysnatchers," Radiohead - I paid zero dollars for this.

15. "Hunting for Witches," Bloc Party - These guys could record the "Grey's Anatomy" theme song and I'd probably buy it. Some people didn't like the second album, but I did. Especially this song.

16. "Fluorescent Adolescent," Arctic Monkeys - Another under appreciated follow-up to a deservedly appreciated first album. They'll be around a long time, I think.

17. "Hard Sun," Eddie Vedder - This whole soundtrack is fantastic (the movie too).

18. "Let's Duet," John C. Reilly and Jenna Fischer - Besides being hilarious, this song really makes me miss working at the Lair. Not because it would be great to see Patrick Nagle and Emily Forbes perform it on stage (though it would). I'd just love arguing all summer long over whether we could get away with performing it on stage (answer: sadly, I don't think we could).

Moral Hazard

The stock market has gotten crushed in the first few weeks of 2008 and we've actually given up all of the gains of 2007. It stinks to lose those hard fought gains, but if you are a hedge fund investor it get's worse. James Surowiecki highlights the problem with incentive structures at hedge funds in this great, short New Yorker piece.

Letting hedge-fund managers keep a chunk of their winnings gives them an incentive to do well for their clients: in theory, they get rich only if their clients do. In practice, though, things don’t always work that way. Fund managers get bonuses at the end of each year, and they keep those performance fees even if the fund eventually goes south.

Surowiecki goes on to compare incentives for Corporate Executives to the folks at Hedge Funds and finds they are remarkably alike. It's no wonder the lending bubble got so out of control, two of the major players in our financial system were incented towards short term performance.

There is still a lot of dot connecting to go, but this is a start.

Friday Music Break

We all need that mid-Friday afternoon chill time. Take five minutes and watch this Wilco clip from Austin City Limits. ACL is one of my favorite TV shows. They record sweet bands who make the trip to Austin for the Austin City Limits Festival or South by Southwest. The bands are usually up and comers and by the time the episodes hit the air, the bands are already on their way to stardom.

Wilco has been a big band for a while, but they keep doing these shows. They're keeping it real...

Enjoy Impossible Germany

Michael Lewis

Michael Lewis is one of my favorite writers. Moneyball is in my all-time top 5 because of the brilliance with which he describes the statistical model the A's use and because of the personal stories intertwined with the stats. I loved that book and it changed the way I thought about a lot of things, like pharmaceutical drug development, for instance.

Lewis writes a column for Bloomberg (too infrequently for my tastes) and he covers Goldman Sachs' reaction to the credit bubble. A few smart traders made the firm billions, with a "b", instead of losing billions like the rest of Wall Street. Cool stuff and well and entertainingly explained by Lewis.

Watching Weird Fishes

My friend Dutch Evans forwarded (actually Shared it via Google Reader) an amazing Radiohead video to me. The video was originally posted by PSFK.

The video shows the boys in the studio just jamming out, playing their new album In Rainbows. I love the album, especially the first song in the video, Weird Fishes. Give it a play. I'm a big fan of music DVD's because I think there is something magical about watching the band members play off each other. The emotion builds and you can see everything they put in the song. Cool stuff.

Obama & Reagan

Interesting to see Obama endorse Regan. I found this at Mick LaSalle's blog and he has some great points about what Obama get's out of comparing himself to Regan. One addition to Mick's ideas, Obama is setting the stage to woo the moderate Republicans in the broader election.

Links

Short on time today but I read two of the best posts I've seen in a long time. I want to share them and when I say "share" I mean these are must reads for you.

Fred Wilson on personality types and managing a business (or a country in this case). I'll talk more about this at a later time. Let's just say that my experience in the family business (my mother's Elegant Clutter), investment banking (Hambrecht & Quist), business school (Kellogg) and working with startups in venture debt at Lighthouse has given me access and insight into these personality types. Fascinating stuff.

Seth Godin on Workaholics, but the good kind, if there is such a thing, and I believe there is. Many of my friends, and family members, and myself fit this description perfectly. If I were to name my 10 most successful or likely to be successful friends, they would all fit this description. And I'm not defining success as wealth accumulation, but happiness. However they often go together.

Listen to this song while you read. Just a cool song.
Rilo Kiley - Silver Lining

401k Credit Cards?

Sometimes people ask me why I own a bunch of Gold or Silver or when should they sell theirs? Both are pretty good questions cause it's definitely a little weird to be so into precious metals and selling is an important part of investing.

Well, the short answer to these questions is that when I stop seeing crazy things like this - a credit card for borrowing money from your 401k - I'll feel a lot better about things and will probably sell.

My favorite quote:

"There's a lot of interest in what we're doing," says Young. "It's a unique and logical solution to an archaic process."

It's so archaic to save for your retirement. So archaic.

Pumpkins

Love the simplicity of this song. It's in my All-Time Top 10.

Smashing Pumpkins - Drown

Google in the New Yorker

Interesting article on Google in the January 14th issue of the New Yorker. The subject is supposed to be about Google being more politically aware and active, but after reading it I came away thinking the author found the interactions between the two founders and Schmidt, the CEO, much more interesting. I think he was trying to show that cracks are beginning to emerge in their relationships. Setting the groundwork for a follow-up article a year or two from now if Google falters.

Now, I'm sure everything isn't perfect there but let's get real here. Those guys are two of the richest guys on the planet and they created one of the greatest businesses...ever. Plus, the network effects are so strong they keep picking up Search market share and lock-in's within Adwords and AdSense are so strong that I can't see how a challenger will beat them without a massively disruptive technology emerging. And yet, a reporter from the New Yorker expects these guys to pay extreme attention in a basic engineering meeting? It's so noteworthy that they aren't participating that it deserves a few columns in an article centered around political pressures?

Come on. This company is an unstoppable force right now. Trying to create fire where there is no smoke is a waste of time for the New Yorker.

P.S. I thought this quote from Andy Grove nailed why Google is so amazing.

Andy Grove, the former chairman and C.E.O. of Intel, who was an enthusiastic supporter of Google’s founders when they started the company, in 1998, believes that there may be more worry about Google than there was about Microsoft. “Microsoft’s power was intra-industry,” he told me. “Google’s power is shaping what’s happening to other industries.” Because of this, he says, Google is increasingly seen as a company “on steroids, with a finger in every industry.”

Ouch

Citigroup is going to write down another $24B and raise another $15B from mostly foreign sources? Wow. Mortgage mess just keeps getting worse. This is why I thought acquiring Countrywide was so dumb for BofA. There will be more of these massive write downs too.

My favorite line from the article:
"By raising so much captial (their typo), Citigroup CEO Vikram S. Pandit is hoping layoffs can be kept to a minimum."

Now, the line is not attributed to anyone directly but it's laughable. This company doesn't care about saving jobs. They're using that line as air cover so they aren't criticized for accepting so much foreign investment. Remember how everyone flipped out when foreign investors were going to own the ports? Well, how do you think people are going to react about these same investors owning a very material portion of the largest financial institution in the U.S?

Conchords

via Fred Wilson's Blog

The Flight of the Conchords do a performance at the big consumer electronic show in Vegas. These guys are amazing. I ordered his sign immediately.

Warning, it's tailored to nerdy technology people.

Can't Stop Listening to This

Jenny Lewis has been rocking my iPod for the last week. I highly recommend you check her out. Two suggestions:

A great song that made it onto Sunday Morning 11 (sorry about the tease). Jenny Lewis with the Watson Twins - Rise Up with Fists

One more, a little more rockin' from Rilo Kiley, the band she leads on the side...
Rilo Kiley - The Moneymaker

Things That Make You Go Hmmm

This whole BofA buying Countrywide deal has me perplexed (he said "perplexed"). My first thoughts were that this thing smelled really bad. Why would you try to catch a falling knife? Countrywide was going to $0B so why pay $4B? I'm sure the Fed put some pressure on BofA but can political favors and recognition as a market savior be worth $4B?

With this deal BofA get's to save face on it's earlier $2B investment in Countrywide and also get's to protect some bank loans it made to Countrywide at the time of the investment. However, those loans were senior so probably not that risky. Also, if you're BofA, how do you get your head around the mortgage portfolios and what about the potential liability from lawsuits, crazy asset backed securities Puts and everything else that I'm not smart enough to think about?

My guess is that there are some serious skeletons in the closet between the two companies but the merger postpones the day that those skeletons will see the light. How would like to be the accountant who is trying to determine "materiality" on disclosures around this merger, Countrywide's bookkeeping and loan valuations in general? In a typical merger, general practice is to charge every expense and write down everything you can so you can start with a fresh plate. After all, Wall Street looks through merger accounting. However, with these companies already in bed with each other before the merger, I bet there will be a tremendous amount of pressure to make things look as good as possible. Would love to be a fly on the wall in those meetings.

Yes, BofA is getting a world class mortgage lending platform, but don't they already have one of those? Plus, how much mortgage business is there really going to be in the next few years and couldn't BofA have taken share from a vulnerable Countrywide?

I hate to think the worst, but I think the fraud and liability in the mortgage sector is going to turn out to be monumental. Why increase your exposure to it? It will probably take a few years for the skeletons to come out...if there are any. It will be a fun look back. Best of luck BofA.

Furniture

It's been so long since we had a recession, you kind of forget what they look like. Well this is what they look like...except there are many more articles like this. Still, it's a start and something to remember/think about.

Update: Some people haven't been able to access the site for some reason so here is the text. Thank you Contra Costa Times.

Home market stifles furniture dealers
# Housing crash, lack of consumer confidence cause stores to close
By George Avalos

STAFF WRITER
Article Launched: 01/11/2008 03:08:42 AM PST

The collapse of the housing market has begun to produce some collateral wreckage, with the shutdown or downsizing of some home furnishings stores in the East Bay, including Thomasville Furniture.

Furniture Brands International Inc. has closed three Thomasville stores in the Bay Area, including two in the East Bay. Heritage House Galleries has shut its doors in Concord. Levitz Furniture has declared bankruptcy, is liquidating its operations and has decided to close its furniture stores, including five in the East Bay and one in San Joaquin County. Furnishings Concepts will close one of its two Pleasanton stores.

The housing troubles also have forced some developers to shift the focus of their retail centers. A shopping complex in Pleasanton has a number of home furnishings retailers, and the developer is seeking different kinds of tenants for some spaces.

"Home prices and home sales are declining, and that is bad news for a furniture retailer," said Laura Champine, a home products analyst with Morgan Keegan, an investment firm. "The struggles for the furniture industry are due to housing. The issues in housing are affecting home products pretty much across the board."

The Thomasville stores that closed locally were in Walnut Creek, Antioch and San Rafael. Thomasville will keep its stores in Dublin and San Jose open, the company said.

"The housing market is a factor insofar as it has an effect on overall consumer confidence and the desire by consumers to
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make those purchases," said Lynn Chipperfield, a senior vice president with Furniture Brands, the owner of the Thomasville stores.

Furniture is the type of purchase that wary consumers can postpone, he said.

"We find that the furniture business is not so much affected by any single economic issue as it is by overall consumer confidence," Chipperfield said.

Levitz is closing all its stores, including its area showrooms in Dublin, Hayward, San Leandro, Pinole, Concord and Stockton, according to the company's Web site and local employees.

"Furniture-related tenants are all being affected," said Sandra Weck, a Colliers International realty broker. "But the housing problems have not affected restaurant or apparel tenants."

The difficulties have forced some developers to recast their marketing strategies. The Rose Pavilion center on Rosewood Drive near Santa Rita Road in Pleasanton is one such case.

"Some of the furniture stores are struggling, so the owner is looking at that as an opportunity to bring in new tenants," said Hilary Parker, a Colliers broker. "He wants to bring in retail or restaurant tenants that are not in furniture or home improvements."

One prospective tenant for Rose Pavilion, Broyhill Furniture, initially had decided to enter that project. But Broyhill, owned by Furniture Brands, never occupied the space it had been planning to rent, according to a December report by the city of Pleasanton.

Despite the difficulties in housing, Parker said she believes Rose Pavilion can be successfully reoriented.

"The location is great and the demand is there," Parker said.

In large part, that's because the housing epidemic has infected only one slice of the retail market, she said.

"Retail is doing well, but furniture is the only sector that seems to be dragging," Parker said.

George Avalos covers jobs, economic development, commercial real estate, finance and petroleum. Reach him at 925-977-8477 or gavalos@bayareanewsgroup.com.

THOMASVILLE STORE SHUTDOWNS

Thomasville has closed three Bay Area stores, but its Dublin and San Jose stores will remain open. People with consumer purchase questions should call Thomasville at 510-441-6070.

The locations of the three stores that closed in December were:

# Antioch: 5875 Lone Tree Way

# Walnut Creek: 1450 N. California Blvd.

# San Rafael: 530 Francisco Blvd. West

Come Back

Sorry Kenny Kellogg has been gone for so long. I've been trying to get a few things squared away on the personal side. Until then, please enjoy this PJ clip. "Come Back" is a great PJ song and made Sunday Morning 11 (which will be out soon).