Tag: food

HOW TO FEEL RICH

You know Ben Stein? Matthew Broderick’s teacher in ‘Ferris Bueller’s Day Off’? (And a well known financial columnist, among other things?) We disagree on a lot, but I sure agree with him on this. It’s a good column to send loved ones this holiday season, especially if you plan on downsizing the largesse. (You got them a wide-screen TV last year, are getting them fluffy socks this year.)

HOW TO KEEP YOUR EAR GLANDS FROM BURSTING

You have the fluffy socks all packed and ready to go – it’s a fare you locked in months ago – and now you have the kind of winter cold that makes flying . . . landing, to be specific . . . really painful. You get this feeling just behind your ears, like someone is sticking an ice pick into the joint of your jaw and your ear gland (and didn’t they just make it legal again to carry ice picks on planes?). I know there are no such things as ear glands (are there?), but that’s how it feels. There is not enough Dentyne Ice in the world to keep you from breaking into a pain sweat as you approach the runway. OK? So click here. I’ve used them. To my surprise, they seem to work. At $6.50 each, you might even want to get a few extras as fluffy stocking stuffers. (Thanks, Elizabeth!)

CARROTS

If carrots have as much sugar as everybody says they do, how come they only taste sweet to horses? Is it like dogs being able to hear really high-pitched sounds we can’t? Think about it.

CREDIT CARDS

Doug Olson: ‘You ask, ‘How many columns can you write urging people to pay off their credit cards?’ One thing you could point out is that Warren Buffett became the world’s richest stock investor by earning an average 23% return over five decades. Since many people pay about that much interest on credit cards, they’re losing their money as fast as Warren Buffett made his.’

GOLD

Jim: ‘Warren Buffett was asked about gold at his annual meeting. ‘See’s Candy is better. We prefer useful assets, that produce real dollar returns,’ he said. I would rather have 100 acres of farm land, or an apartment building, or an index fund. From 1900 to 2000 gold went from $20 to $400, but the Dow went from $66 to $12000, not including dividends and carrying charges. If you’re worried about paper money, there are better stores of value.’

☞ Berkshire Hathaway stock could even be one of them. (I have never bought it, as regular readers know, because having missed the chance at $300 a share – thinking it was ahead of itself – I couldn’t bring myself to buy it at $3,000 or $30,000, either, let alone last night’s $84,800.) But October isn’t over yet (a tough month for the market) – let alone the Bush Administration (a tough five years for the market, with iffy prospects for the next three) – and gold certainly could do better than stocks for a while. Just not over the long run.

HONEST TEA

Georgia: ‘You might alert your readers that Honest Tea makes regular tea too…not just the bottled kind. I was surprised to see the tea bags in the coffee/tea section at Whole Foods. The green tea is very good!’

☞ Green is good.

NTMD

It’s drifted down below $19 again. The fact that some state Medicaid plans have agreed to cover BiDil has not led to the explosion in pent-up sales some bulls had hoped. If you add up the IMS daily numbers for the week ending September 30, there were an estimated 772 BiDil prescriptions written (this is the week before several states put BiDil on the Medicaid formulary), while for the week ending October 7 (the week after these states started covering it), there were 732 – a small decrease. Meanwhile, new scrips on Tuesday were 47, down from 54 on Monday. For all of September, IMS reports 2,439 BiDil prescriptions written. The rolling 7-day average as of October 11 was 87.

With annual expenses projected by the company at $120 million or so, breakeven would be around 70,000 patients at full price. (The company has estimated $1,800 a year from each patient.) It’s hard to see how they will get to 70,000 patients at this rate. Or why, long-term, insurers will go along with covering the two generic components of BiDil at six times the cost of the generics covered separately.

If you own December or March puts (and, as always, if this is money you can afford to lose), I’d hold on.

TIPS

John Stockman: ‘Would this be a good time to buy Treasury Inflation Protected Securities? You haven’t mentioned them for several months.’

☞ As a very safe core holding, maybe. I have about a quarter of my retirement plan in 20- and 30-year TIPS – but bought at par or a little below (99 or 100 cents on the dollar), so psychologically easier to hold at this price than to buy (even though holding amounts to much the same decision as buying).

They’ve gotten a little cheaper in the last week or two, so better to buy today than a couple of weeks ago. Right now, the 20-year TIPS yield slightly over 2% on top of inflation and the 30-year TIPS (which actually have 27 years to run) yield slightly less. Click here (and then scroll down) for current prices. But remember several things. First, both the 2% you receive and the inflation accretion you do not receive until you sell are taxed as current income, so these are best owned within a tax-deferred retirement plan. (Otherwise, consider a TIPS mutual fund that pays out the full yield.) Second, the price you see quoted is not the price you pay, because these bonds, which, like most bonds, started out at a $1,000 face value, have been appreciating with inflation. To keep the numbers simple, figure that the 30-year bond is now a $1,100 bond, and because it’s selling for 129 or so – 129 cents on the dollar – each bond will cost you 129% of $1,100 (plus accrued interest and a little something for your broker). Also, if we should have deflation for a while, that $1,100 could fall back to $1,000 (though not below). My guess is that this would be a short-term situation – one way or another, we’re likely to have a fair amount of inflation over the next 27 years. But it could be a long and winding road.

DIPS

Three things the stock market has going for it right now are, first, the glimmer of hope that the Sunnis will vote and things will gradually begin to go better in Iraq than most of us expect. Second, that the Dow is lower today than it was five years ago – a rare feat in American history – which could be seen as an indication that valuations have had a chance to catch up with themselves. Third, a general level of pessimism (it often being better to buy when people are glum than when they’re optimistic).

But the list of countervailing factors is at least as long. The housing boom that has fueled so much of the economy these last few years seems to have passed its peak. Huge gobs of dough will be taken from consumer pockets and sent abroad to fuel our cars and furnaces. And Detroit, still a source of significant employment, seems to have set itself up to be rolled over by Toyota – yet again. The Prius is just so much cooler and smarter than the Chevy. Add to this the neat trick by which we’ve turned the largest surpluses in history into the largest deficits . . . our increasing dependence on the goodwill of the Chinese and our other creditors . . . all the other debt consumers have racked up . . . and an environment in which a huge majority of the country feels we’re on the wrong track (being that, well, we are) – these are the kind of things that could throw the economy into a funk. Add to this Katrina, Rita, Pakistan, floods in New Hampshire – New Hampshire? – indictments and subpoenas flying in Washington, with Halliburton just getting richer and richer, not to mention threats of Avian flu and loose nukes, and you could have the stuff of a loss of confidence . . . a general ‘hunkering down.’

Or not.

Maybe the market has discounted all this. But I don’t mind holding some TIPS. And it may not be dumb to have some cash on the sidelines, should opportunities present themselves.

QUIPS

Tom Knapp: ‘Did you hear about the woman who refused to pay the contractor who installed new windows?’

☞ Yes. He said her bill was way overdue but she said the salesman had told her that the windows would pay for themselves in a year.

David Bruce: ‘I wanted to become an atheist, but I gave it up – they have no holidays. – Henny Youngman.’

David D’Antonio: ‘A man goes into a bar, sits down and orders a beer. He’s sipping the beer when a beautiful woman sits down next to him. After a couple of minutes, she turns to him and says, ‘I’ll do anything you want for $100, provided you can say it in three words.’ The guy is taken aback by this but sits and thinks for a bit and replies . . . ‘Paint my house.”

Matt Todaro: ‘Did you hear about the new pirate movie? It’s rated ARRRRRGH!’

Have a great weekend.

Sorry I missed a day . . . today is the day a sailor aboard the Pinta sighted the Bahamas thinking it was China, so today is the day I should have skipped.

CMM

Jerry Minkoff: ‘For truly long-time holders of CMM, it’s been a long, strange trip. I bought it in the mid-1980s on the recommendation of a Merrill Lynch broker who touted it as a high-yield investment, at the time something like 10%. I think I was interested in zero-coupon bonds but I don’t exactly remember what I told him when I spoke to him at the Merrill Lynch booth in Grand Central Station. So for several years my $2,000 was throwing off about $200 a year. Then it became a stock, paying a high dividend, if I’m not mistaken, and that went on for a while, and then Merrill called some of the mortgage-backed securities CMM had parked with them and the company had to declare bankruptcy. Well, I stuck with them through thick and thin, and my current 27 shares, at twenty bucks each, are going to be worth $540. [The same money compounding at even 5% over those years would be worth $5,306.] Lessons of the story: Trusting brokers can be an expensive proposition. Buy-and-hold isn’t always the best idea. Index funds are your friends.’

Helene: ‘Every now and then you talk about stocks and when ‘we’ should sell and what is happening to ‘our’ profits. I feel left out as I am not sure what you are referring to. Do you have a recommended portfolio?’

☞ No, but every so often over the last 2,380 columns, I’ve – gently! – suggested a stock or two. And every so often I update those suggestions. In the early years, there was much more about personal finance. But how many columns can you write urging people to pay off their credit cards? (Really: pay off your credit cards.)

HONEST TEA

Anne O’Connor: ‘My favorites were Peach Ooh-La-Long and Lori’s Lemon, but yesterday I tried Pearfect White Tea – a new favorite. I don’t buy sugar, so my own iced tea is always strong and harsh, and I would never dare serve it to anyone. Thank goodness for Honest Tea, which is forcing me to be more civilized towards myself and my guests. The labels are so simple and elegant that the bottles can hold flowers on your kitchen table.’

Mike Schumacher: ‘Our new supermarket has been offering Honest Tea on sale (8 for $10). I tried it and enjoyed it a lot. I looked to see if it was public and couldn’t find anything.’

☞ It’s a private company started by a Yale B-school professor and one of his students. In hindsight, the valuation at which we invested was probably too high (the investors should probably have held out for a bigger slice of the pie). But we could still wind up doing nicely – and it’s fun, in any event, to be backing something with such good karma (and so few calories).

JIM CRAMER’S CASE FOR GOLD

Several of you sent me this, which I had clipped, too. I’m not a big fan of gold (its value derives from its scarcity – what good does it do the world to dig up more of it?), but the big picture Cramer paints rings all too true.

MORE JOKES

Linda Tam: ‘My son is 7 and here is the joke he told me:

Him: Knock, knock.
Me: Who’s there?
Him: Interrupting Cow.
Me: Interrupting Co–
Him: MOOOOOOOOOOO!!!!!!

‘I’d never heard this one when I was knock-knock-joke age and it cracked me up.’

Gray Chang: ‘I liked the joke about the rabbi, but it could come across as anti-Semitic. You might have mentioned that you’re Jewish.’

Jonathan Levy (who is probably also Jewish): ‘A rabbi, a priest, and a minister are playing poker when the game gets raided by the police and they get hauled before the judge. The judge says, ‘I feel really bad about this and since you are men of the cloth, I don’t think we need a full trial. I am simply going to ask you whether you were gambling and accept your answers.’ He turns first to the priest and says, ‘Father, were you gambling?’ The priest replies, ‘Well, it depends on your definition of gambling. There was money on the table but it remained to be seen whether it would change hands at the end of the night or if it was just a convenient way to mark the progress of the game. So, no, I was not gambling.’ The judge says, ‘Ok, case dismissed.’ Turning to the minister, he says, ‘Reverend, were you gambling?’ The minister says, ‘Again, it depends on your definition of ‘gambling.’ Does the amount involved have to be enough to affect your life or is it otherwise just sort of a variable entrance fee into the game so, no, I was not gambling.’ ‘Ok, case dismissed,’ the judge says. ‘Rabbi, were you gambling?’ The rabbi looks to his left, then to his right, and says, ‘With whom?”

VOTE FOR ME

Well, not for me, exactly, but my prosperi-tea.

Long-time readers of this column know that I have a small stake in Honest Tea. It continues to grow. Most recently, Whoopi Goldberg was on the Martha Stewart show describing the poker parties she hosts.

Martha: “What do you serve to drink?”

Whoopi: ‘Well, I have alcohol for folks who drink. I don’t drink, so I have something called Honest Tea. Which is what I drink these days. Which is kinda great. It comes in bottles. Very nice.’

Whoopee!

Honest Tea is in the running to receive Co-op America’s People’s Choice Award for the Most Green Business. Please consider taking 15 seconds to vote for Honest Tea. (We are so green, even some of our teas are green.)

CMM

The twists and turns with this one over the years (preferred stock, reverse splits, and so on), have been almost too complicated to calculate, as those of you who bought it know. But the bottom line is that there’s an offer to acquire it at $20 a share – which might even get bid up a couple of bucks before the dust settles – and the story should soon be over. Depending on where you bought it (and assuming the deal gets done, as now seems likely), you will have made anywhere from a decent profit to a five-fold return on your money. If only they were all this good.

NTMD

This one could work out very well, also, but there’s no guarantee.

I thought few insurers would cover the company’s sole product, BiDil, because it’s so expensive. (The FDA-approved label says to take two tablets three times a day – six in all. With the tablets priced at $1.80 to the wholesaler, that’s around $4,000 a year . . . yet BiDil is simply the combination of two generic ingredients which, if purchased separately, cost one-sixth as much.) Instead, some of the state Medicaid plans are covering it, and with low co-pays. At least for now.

Supporters of the stock argue that there is no generic alternative to BiDil, because one BiDil tablet contains 37.5 milligrams of hydralazine and there is no generic hydralazine offered in that dosage. (And, for some reason, they can’t imagine a generic drug manufacturer ever offering one, either.) It’s available only in 25 mg and 50 mg doses.

But hang on a second. You’re supposed to take two BiDil tablets at a time, which means a total of 75 mg of hydralazine. So why not just take one 25 mg and one 50 mg generic hydralazine pill for a total of 75 mg? Whether your body gets that 75 mg from two BiDil pills or from two generic pills, it’s still 75 mg.

Those of us betting against the stock believe your body will not notice the difference.

The other BiDil ingredient is 20 mg of isordil, which is available generically in exactly that dosage.

So to replicate exactly the components of the two BiDil pills you’re supposed to take, you’d take two isordils and two hydralazines.

It may sound wildly complicated – taking four pills instead of two. But if it saves $3,000 a year, perhaps it’s a complication worth enduring.

Meanwhile, my guru writes, ‘by all rights there should be a significant increase in prescriptions based on the states that reimburse BiDil for Medicaid, and refills of prescriptions written in July and August. So far we have not seen prescriptions surge. I continue to expect sales to fall well short of analysts’ projections.’

CULTURE OF CORRUPTION

The New York Times has begun charging for on-line access to its superb columnists, but it doesn’t charge much – nothing, if you subscribe to the print edition – and maybe the New York Times is worth supporting with a few bucks now and then, just as NPR and McDonald’s are (don’t tell me you’ve never tossed a few coins into McDonald’s’ coffer). I just now caught up with Frank Rich’s column from October 2. In part:

. . . It’s not just Mr. DeLay, aka the Hammer, who is on life support, but a Washington establishment whose infatuation with power and money has contaminated nearly every limb of government and turned off a public that by two to one finds the country on the wrong track.

But don’t take my word for it. . . . Listen instead to Andrew Ferguson, of the conservative Rupert Murdoch magazine, The Weekly Standard. As far back as last December in a cover article on the sleazy lobbyist Jack Abramoff, Mr. Ferguson was already declaring ”the end of the Republican Revolution.”

He painted the big picture of the Abramoff ethos in vibrant strokes: the ill-gotten Indian gambling moolah snaking through the bank accounts of a network of DeLay cronies and former aides; the ”fact-finding” Congressional golfing trips to further the cause of sweatshop garment factories in the Marianas islands; the bogus ”think tank” in Rehoboth Beach, Del., where the two scholars in residence were a yoga instructor and a lifeguard (albeit a ”lifeguard of the year”). Certain names kept recurring in Mr. Ferguson’s epic narrative, most prominently Ralph Reed and Grover Norquist, Republican money-changers who are as tightly tied to President Bush and Karl Rove as they are to Mr. Abramoff and Mr. DeLay, if not more so.

The bottom line, Mr. Ferguson wrote, was a culture antithetical to everything conservatives had stood for in the Gingrich revolution of 1994. Slaying a corrupt, bloated Democratic establishment was out, gluttony for the G.O.P. and its fat cats was in. Mr. Abramoff and his gang embodied the very enemy the ”Contract with America” Congress had supposedly come to Washington to smite: ”’Beltway Bandits,’ profiteers who manipulate the power of big government on behalf of well-heeled people who pay them tons of money to do so.” Those tons of Republican money were deposited in the favors bank of K Street, where, as The Washington Post reported this year, the number of lobbyists has more than doubled (to some 35,000) since the Bush era began in 2000. Conservatives who once aspired to cut government ”down to the size where we can drown it in the bathtub” — as a famous Norquist maxim had it — merely outsourced government instead to the highest bidder. . . .

The DeLay and Abramoff investigations are not to be confused with the many others percolating in the capital, including, most famously of late, the Justice Department and S.E.C. inquiries into the pious Bill Frist’s divine stock-sale windfall and the homeland security inspector general’s promised inquiry into possible fraud in the no-bid contracts doled out by FEMA for Hurricane Katrina. The mother of all investigations, of course, remains the prosecutor Patrick Fitzgerald’s pursuit of whoever outed the C.I.A. agent Valerie Wilson to Robert Novak and whoever may have lied to cover it up. The denouement is on its way.

But whatever the resolution of any of these individual dramas, they will not be the end of the story. Like the continuing revelations of detainee abuse emerging from Afghanistan, Iraq and Guantánamo, this is a crisis in the governing culture, not the tale of a few bad apples. Every time you turn over a rock, you find more vermin.  We’ve only just learned from The Los Angeles Times that Joseph Schmitz, until last month the inspector general in charge of policing waste, fraud and abuse at the Pentagon, is himself the focus of a Congressional inquiry. He is accused of blocking the investigation of another Bush appointee who is suspected of siphoning Iraq reconstruction contracts to business cronies. At the Justice Department, the F.B.I. is looking into why a career prosecutor was demoted after he started probing alleged Abramoff illegality in Guam. According to The Los Angeles Times, the demoted prosecutor was then replaced by a Rove-approved Republican pol who just happened to be a cousin of a major target of another corruption investigation in Guam. . .

Power corrupts.  The Republican Party has power in spades.

Yesterday‘s column was posted late, so today just two quick life-changing items to give you time to go back and read about gummers and Hummers and puts and shorts.

INDEX FUNDS

Doug Olson: ‘I just saw last Tuesday‘s column that contained a reader critique of index funds. My own objection to them (although they are the basis of my 401k) is that almost all are market-cap weighted, so you own 50% too much of anything that’s 50% overpriced.’

☞ And, come to think of it, too little of anything that’s underpriced.

You’ll still do better than most folks, and most mutual funds. But an alternative may be coming out this fall that I will be telling you about as soon as it does. In the meantime (continues Doug), ‘What do you think of the Rydex Equal-Weight ETF (RSP) that holds 0.2% in every one of the S&P 500?’

I think it’s fine. You give up an extra two-tenths of a percent a year or so for its higher expense ratio, but could more than make that up if your thesis, above, is correct, and/or if small cap stocks outperform big cap stocks.

INTERESTING SALT

No, this is not about the book President Bush has been reading this summer, Salt: A World History, although I’m glad he’s found the time.

Salt is the spice of life, direct from the grease/salt/spice food group (which I actually prefer to the sugar/chocolate/cream food group*), and for reasons no one has yet been able to explain, it is incredibly cheap. As insanely expensive as it is to desalinate water, that is, unaccountably, how remarkably cheap it is to buy a pound of Diamond Crystal salt at the Piggly Wiggly. Yes, I know Diamond doesn’t produce its salt by desalinization, it digs it out of the salt mines – as in, ‘back to the salt mines’ – where the wages, I would guess from the context, are slavishly low. But think about it. A pound of salt is bulky and has got to weigh, oh, at least a pound – and yet they can get it to you all the way from Utah, clean as a whistle, packaged with a little metal spout, all for considerably less than a dollar? How do they do that?

Well, my point is this. Maybe you can’t afford your own jet or even a new car. Maybe you’re prudently funding a Roth IRA rather than a Rolex. But when it comes to salt, you can afford anything Bill Gates can. You can have the very best.

And even apart from the snob appeal of a fine salt – Charles and I are partial to the 48-ounce box of Morton’s Coarse Kosher salt for $1.79 a carton – there is the granularity or, in the case of Maldon Sea Salt, which we also like, the flakiness. And the taste! The taste! Bring on that tomato, Baby.

Here is a site you can make your own. Give that man or woman in your life a jar of Maine apple smoked salt this holiday season. Go crazy and make it a whole case of coarse Ittica d’Or Sicilian Sea Salt. If they like it, they’ll think of you every time they eat something – for years.

Of course, as with so many things in life, the priciest brand may not be the one you like best – witness this telling saline taste-off. But whatever your preference, what a feeling to know it’s, at most, just a few pennies a pinch. Go for it. Live a little. And no, no need to thank me. That’s what you pay me for.**

*You can tell the group toward which you are genetically predisposed by taking this simple test: Close your eyes and imagine a slice of greasy, thin crust sausage pizza on which you’ve liberally sprinkled garlic salt . . . beside a slice of chocolate cake. Which do you, in your imagination, instinctively reach for? For me, it’s not even close – get that ugly cake out of my way: I’m going for the pizza.

** No need to tell me about high blood pressure, either – ‘taste it before you put salt on it!’ I hear my mother wail, in vain – I leave that part to you and your doctor.

President Bush is an oil man. His pappy is an oil man. His VP is an oil man. His pals and his family’s pals are oil men. His virtual brother, Prince Bandar ‘Bush,’ and the Saudi Royal Family generally, to whom the Bushes are closely tied, are oil men.

So when you say ‘energy crisis,’ what exactly do you mean? This is a great time to be an oil man! All those guests at the early Cheney energy meetings – the ones whose names the White House would not reveal even after a subpoena from the General Accounting Office? Most of them are likely reveling in this so-called ‘crisis.’

The solution to the ‘crisis,’ according to this administration, is to drill for oil in the Alaska National Wildlife Refuge, not to promote conservation. Drilling for oil is what oil men DO. Conservation hurts oil men two ways. First, they sell less oil. Second, because of that lessened demand, the oil they do sell fetches a lower price.

With oil at $55 a barrel instead of $30, as I have pointed out before, the Saudis are making (roughly) an extra $250 million – extra! – a day.

Meanwhile, that other ‘energy crisis’ that came and went – the one in California that was engineered in no small part by Enron (the President’s biggest campaign supporters), as told in The Smartest Guys in the Room – is about to hit the silver screen in a documentary by the same name. Don’t miss the part maybe two-thirds of the way through where the Enron guys come out to confab with Arnold before the recall process gets going. The crisis – which disappeared as soon as the manipulation stopped – sure helped to undermine the governor of the largest Democratic state in the country.

My point is, you may think high gasoline or heating oil prices are becoming a hardship. But one man’s crisis is another’s bonanza. It is a grand time to be rich and powerful in America.

Have yourself a double latte.

STARBUCKS

Brendan Segraves: ‘Just a quick confirmation that we’ve had a similar experience with our Starbucks machine (a Digital Italia). The seals busted after three months and they sent us an entirely new machine ($999 retail) instead of making us wait the standard 8-12 weeks to repair the machine. Oh, and the espresso is excellent.’

Jack Rivers: ‘And don’t forget Starbucks pays its workers a fair wage, gives even part time employees health insurance, and supports progressive causes. A Goliath maybe, but definitely not coffee’s version of Wal-Mart.’

Joanna: ‘I’ve never liked their coffee much, but in their defense, I cart off buckets of their used grounds every week for my gardening and composting attempts. Not only do they give me this “gardener’s gold” for free, but they also package the used grounds neatly back into the bags they came in, sealed with a cute sticker telling me what the grounds are good for and how to use them, and set the bag into a basket by the door. I walk in, pick up my bag of free grounds, and leave. And all those bags of grounds end up in my garden instead of in a landfill. I love them.’

☞ Yes, but even at today’s prices, oil is cheaper.

APPLES

Linda Tam: ‘I used to have Quicken 98 on the PC and it was everything I wanted it to be. When I got a PowerMac G5 last July I bought the current Mac Quicken and it’s true, it’s not as nice. Quicken 98 on the PC would make educated guesses about data entry (which were usually correct). For example, when reconciling a bank statement, it would automatically fill in the statement date (guessing based on the last statement date and how long this account usually goes between statements, I guess) – but the version on the Mac makes me fill it in myself. Blah! The point of a Mac (to quote my other favorite Andy blogger, Andy Ihnatko) is to be so awesome that the hair on the back of your neck stands on end. Quicken fails that, and how! I use it anyway, though. Whatcha gonna do?’

SPROUTS

Ray Harney: ‘In the Two Thousand Year Old Man routine with Carl Reiner, the following occurs: Q. You’re two thousand years old; how do you look so good? A. Brussels Sprouts. Q. [astonished guffaw] Brussels sprouts? A. That’s right; I never ate them.’

COFFEE

This saga comes by way of a retired financier who insists he be identified only as ‘Hal, the Croquet King of Canada.’ I like it because, in the end, it says we Americans sometimes do things right.

Grab a mallet or, more appropriately, your morning brew, and off you go. Herewith, writing from Miami, Hal, the Croquet King of Canada:

So I woke up one morning a couple of weeks ago, marched to my Krups $99 espresso maker which I’ve had for eons and went to have my morning crack. Sorry, espresso. Flipped it on, it burped, then died. Kaput.

I had been expecting its death for weeks, given the random steam shooting out of it at odd times, but I was sad nonetheless. Great opportunity I thought to finally get one of those super-cool-Jetson-looking machines in a fabulous designer color. Orange would be really hot. Or lime green. Or maybe stainless steel.

Marched to my IMAC, sitting next to my IPOD, and started to surf the net looking for consumer reviews of the latest and greatest espresso machines. I knew I had found the right spot when I got to coffeegeek.com and saw an online chat taking place regarding ‘Priming Your Pump.’ Scanned the reviews and noted to great dismay that 1) I would have to fork out at least $400 for something half decent and 2) Starbucks ‘Barrista’ kept getting rave reviews.

Starbucks? Forget it. They are the enemy. I hate the fact that they have made a mockery of the simple ritual of great espresso (cappuccino for breakfast, espresso any other time) and turned it into a half-decaf/half-soy/low-foam-vanilla-moccacino experience. Not to mention that I would have to chisel off the Starbucks label emblazoned across the front of the machine and even worse, a 1-800 number on the water tank. Never.

So I decided to go for the #2-rated machine – some super-duper Italian number with levers, spouts, and knobs that would clearly look to my friends as though I had hauled it back from my last trip to Positano.

And it was orange. Hot.

It arrived a week later. I opened the box and it looked as if it had been dropped off the back of a pickup and driven over. Twice.

There was a sliver of bubble wrap and two foam chips. And it had been shipped like this from Italy. Please. It went back.

Back to coffeegeek.com. This time the chat was about ‘Crema and Water Hardness.’ Hot. Picked the 3rd rated machine – again from Italy with lots of bells and whistles, but in stainless steel. Not so hot, but at this point I really needed my damn coffee.

It arrived a week later. Foam chips were peeking out of the corners of the box so I felt confident. It was perfect. Set it up and then attempted to interpret the half Italian/half Spanish/half French manual. I gave up and just fired it up. All I could get was steam. And occasionally some light brown fluid. It went back.

Now I was desperate. I needed my espresso. I was going through withdrawal and it wasn’t pretty. My housekeeper insisted she could put masking tape over the Starbucks label if I got that machine. Esthetics are not her forte. I relented and trudged down to the local Starbucks, wearing my designer shades in case any of my friends saw me. Walked up to the counter and asked to buy a ‘Barrista’ – how faux-Italian is that! Ughh! The young lass behind the counter said, ‘Just a moment, Sir; I’ll get the manager.’ Two seconds later, a perky young thing bounds out the swinging door and says, ‘Sir, I’m the manager and I hear you want to buy a Barrista – do you have five minutes by any chance?’ What the heck, I thought, just give me the damn machine before the meter runs out. But I smiled and said, ‘Of course’. So she hauls me behind the swinging door and takes me back to where she’s got one of the machines all set up, unpacked, plugged in with a pitcher of frosty fresh milk sitting next to it. She then proceeds to teach me step by step how to use the damn thing, steam the milk, clean it, descale it in case my water was hard (aha!) and prime the pump (aha!!). Then she asked me how I like my espresso and made me a cup. One of the best I’ve ever had. Then she tells me about the two-year return policy, about how she’s giving me $150 off because they’re about to have a sale, and then insists on carrying it to my car for me in the hot Miami sun. I love her. I want her to bear my children.

The thing makes the best espresso I’ve ever had (other than that little café in Positano). I am willing to put Starbucks bumper stickers on my car. I am a convert. And I didn’t put masking tape over the name.

PERSPECTIVE

Here’s the President’s house, as seen from outer space. (Be sure to click the + sign a couple of times to enlarge it, and push the map up with your mouse to center it.) Type in your own address to see your own roof the same way. Only smaller, I should think.

CYBEVERAGE

And as if that topographical Google treat were not enough, it looks as if my Peach Oo-la-long Honest Tea has competition from Google as well. (Could this link have only worked on April 1? No, still seems to be up.)

CLEVER MARKETING

Click here. A more effective way to sell books than the same money spent on a print ad? Happy Passover, in any event.

EVEN BETTER BUY

Ed Biebel: ‘It looks as if rebates may be nearing the end. Business Week says Best Buy is ending rebates after listening to consumer complaints. The cynic in me wonders if it has less to do with making the customer happy than with the lawsuit that the Ohio AG filed against them.’

THE BALANCE

‘Capitalism tries for a delicate balance. It attempts to work things out so that everyone gets just enough stuff to keep them from getting violent and trying to take other people’s stuff.’ – George Carlin

THE BUBBLE

Ernest Ostrander: ‘In parts of the country where the bubble isn’t in prices, it may be inventory. My house in Memphis is currently for sale. Since banks will lend money to anyone with lint in his pockets, my nice neighborhood is being acquired by first time home buyers. They get their down payment and closing costs paid by grant programs (with no income restrictions), and if a seller wants to have any hope of selling, he must pay points toward the buyer’s loan. I’ve been told by my realtor and neighbors that if I don’t pay the full 6 points allowed by law, I’ll never sell. After paying a 7% commission plus 6 points and some closing costs to sell, I’ll be lucky to have a 10% gain after 13 years in this house. And of course, when the new owners want to move, it’s likely that they’ll just walk away. After all, they’ll have to pay over $15k out of pocket to sell, if they get an interest-only loan. I seem to recall, from about 15 or 20 years ago, economist Lester Thurow citing the Japanese asking when our nation would quit borrowing so much money, and that he replied by asking when they’d wake up and quit lending it to us. A good question for our own banks!’

Trisha: ‘In San Diego – where we live – you can rent a nice but not spectacular two-bedroom apartment for over 1800/month . . . or you can buy down the street new condos in the $460K-$480K range, paying an additional $55/mth school, $183 homeowners’ association fee, and 1.04% taxes – this is for the smallest 1226 sq ft unit! There are more condos being built diagonally across the road from these. If I recall correctly, they cost around $400K and up, but the homeowners’ association fees are much, much higher.

‘The thing is, even if you have a zero % loan to pay for the house, the monthly payments are huge, and way out of proportion to what people earn. It has been beyond me how people have found the money to pay each month for several years now. Still, most people clearly do.

‘Prices are so damned high here that crappy old condo complexes – 100% occupied by renters – are being sold to the occupants and this isn’t just happening at one or two complexes, but quite a few of them. Some of them don’t really have adequate ventilation, and thus are susceptible to mold because you can’t open all the windows and get a breeze through. As a renter, you can just move out when you’ve had enough, the maintenance people slap on some new paint, and – boom – no mold problem. Some of the units don’t have enough parking spaces because the intention was one unit, one family, not three or four college kids doing whatever they needed to, to make the rent.

‘Real estate companies likely wouldn’t be selling those rental condo complexes as units if they thought that they were going to keep on going up in value. It is this more than anything else in our insane situation which makes me think prices will stop going higher. I used to think prices might fall – but I’m sick of being wrong.’