Thoughts on Reno, Nevada

I just got back from Reno, Nevada. Some thoughts on my short vacation:

1. Not including the more isolated Peppermill and Atlantis hotels, the best downtown Reno buffet is El Dorado, especially if you have a sweet tooth. Their dessert options were incredible. Fruit tarts, cakes, little chocolate pies, flan, more tarts, and gelato.

2. When factoring cost, the best overall Reno restaurant is Harrah's Cafe Napa. I had a wonderful steak and shrimp scampi there ($9.99) and a rib-eye steak the next day. (The Peppermill would be a close second, but it's not really on the downtown strip).

3. I discovered a new drink, the "Brandy Separator." I don't usually drink at all--I order virgin pina coladas and mineral water with lime when gambling--but when I saw this milky concoction, I had to try it. Absolutely yummy. Otherwise known as "Gorilla Milk," it's 1 1/4 parts brandy, 3/4 part Kahlúa liqueur, and 3/4 part heavy cream.

4. The first two rounds of 2009's March Madness were fantastic. At one point, two games were in OT, and then one of them went to double OT. That, my friends, is why you want to be in Nevada during March Madness. You can watch all the games on the multiple casino screens instead of relying on CBS to switch you to a particular game.

One complaint? I hated the refereeing. Some calls were atrocious. Not to take anything away from Siena, but one foul call against an Ohio State player during the last twenty seconds might have cost Ohio State the game. (The player never touched his man.)

Best coached team? Utah State. Every single play was perfectly executed. If their two best players hadn't fouled out at the last minute, they would have won. (See comment about refereeing above.)

Softest team? Wake Forest, i.e. this year's bracket buster. Wake Forest had no defense whatsoever. They could shoot well, but couldn't guard anyone. Wake hasn't produced a Final Four team in several decades, despite counting Tim Duncan and Chris Paul as alumni.

Biggest heart? University of Northern Iowa. After barely making it to the dance (they had to mount a miraculous comeback in an OT conference game to get an invite), they pushed Purdue to the limit. If some calls had gone UNI's way, we'd be looking at a potential Cinderella.

UNI also has the player with the coolest name: Ali Farokhmanesh.

MVP so far? UNC's Ty Lawson. Without him, UNC would be at home right now, watching the games on television. At one point, he was the only UNC player who scored in a four minute time span, which stopped the other team's run.

5. Best Reno sportsbook? Club Cal Neva (not to be confused with Tahoe's CalNeva). Club Cal Neva, during March Madness, had everything a guy and his buddies would want. Two girls in skimpy outfits offering jello shots; huge nachos for five bucks; multiple pitchers of beer everywhere; three rooms of television screens and plenty of seating; and drawings for sports memorabilia. If it wasn't March Madness, though, I'd probably go to Harrah's. They have a classy joint, and it shows.

America's Defense Spending

Military-industrial complex, anyone? President Eisenhower is rolling in his grave.

Source: The Economist

Hat tip to http://nahnopenotquite.com/

No Posts from March 20 to March 22, 2009

I will be in Reno, NV enjoying March Madness. What's my Final Four, you ask?

Bracket 1: Missouri, Pitt, Michigan State, and Illinois.

Bracket 2: Villanova, North Carolina, UConn, and Louisville.

I have a good feeling about Missouri, which, given my horrible track record, means they will probably get bounced in the first round. I spent years choosing Kansas to go all the way, and then the one year I didn't pick them, they got the crown. Sometimes, life's funny like that.

Anyway, I will return to California on March 22, 2009 and will begin posting again.

Update on April 4, 2009: All the teams in my brackets above, except for Illinois, made it to the Elite Eight.

Paul Wolsfeld's Website

I am leaving for Reno, NV to watch March Madness in the comfort of a hotel room and/or sports book. I will be staying at Circus Circus and will return on March 22, 2009. Before I go, I wanted to introduce readers to Paul Wolsfeld. He has an interesting website, Corporate Trivia. If you click on the "Introduction" tab, you'll get some interesting facts, like these:

The headquarters of Federal Express (Memphis, TN) was an unmarked building near the airport.

No outside signs let you know you've found the headquarters of Warren Buffet's Berkshire Hathaway in downtown Omaha, Nebraska.

Most CEO's don't have a computer in their office. "Seven out of ten CEO's DO NOT have computers."

Enjoy, and have fun cheering for your favorite college basketball team!

Immigrants May Save Housing

Yesterday's WSJ had an excellent article from Richard Lefrak and A. Gary Shilling about America's housing problem. If you assume the problem is collapsing housing prices, then the solution--offering accelerated permanent residency in exchange for foreign housing investment--makes sense. We already sell stocks, preferred shares, leases, and government bonds to foreign countries to keep our markets liquid. Lefrak and Shilling's proposed program just adds an individual-to-individual option to increase liquidity.

Public Pensions Bills to Surge, Taxpayers on the Hook

The WSJ's Craig Karmin has an interesting article on pensions ("Pension Bills to Surge"):

http://online.wsj.com/article/SB123716064273635495.html

Everyone acknowledges we have to hire good teachers, police officers, and firefighters; however, to prevent the public sector unions from taking more taxpayer funds than necessary, taxpayers need to be ever-vigilant. After all, that's our money and our children's money they're investing and taking.

Public pensions are an especially difficult issue to resolve, because they represent a long-term taxpayer liability. Thus, taxes and services do not need to be immediately raised or cut even if a pension's actuarial projections are incorrect. This absence of a short-term trigger makes it harder to alert taxpayers to the slowly ticking time bomb of pension liabilities.

California's problems are acute because even if pension assets decline substantially, payouts do not change. For example: if a California public pension loses 20% of its assets in one year, retirees still get paid the same amount, even though the pension has to dip into its assets to make the payouts. Why is this a problem? Dipping into a pension's assets usually means the pension is underfunded and will need higher-than-normal returns or more taxes to keep paying retirees. So either taxpayers are on the hook for ever-expanding retiree benefits, GM-style, or pension funds have to take risky investing strategies to bridge the gap between payouts and assets. No incentive exists for prudence. It doesn't have to be this way.

Wisconsin has a prudent policy "of adjusting the amount of benefits paid based on the pension fund's performance." Although this policy causes to retirees receive a benefit reduction, it also creates incentives for conservative investments and fewer tax hikes. If a pension doesn't do well, at least retirees will complain and hopefully cause some changes to be made to sustain the pension without a call for higher taxes (yes, this is partly wishful thinking, but at least someone becomes accountable more immediately). The WSJ also points out that some state employees could be switched to 401k plans, which is something I've advocated in the past. (See here.)

No matter what the solution is to the pension liability problem, action needs to be taken. More of the same isn't acceptable.

Bonus: Shelby Steele writes a very interesting article on Republicans and race:

http://online.wsj.com/article/SB123716282469235861.html

Financial Transparency

Daniel Roth had an excellent piece in Wired ("Road Map for Financial Recovery") promoting financial transparency:

http://www.wired.com/techbiz/it/magazine/17-03/wp_reboot

But the volume of data obscures more than it reveals; financial reporting has become so transparent as to be invisible. Answering what should be simple questions—how secure is my cash account? How much of my bank's capital is tied up in risky debt obligations?—often seems to require a legal degree, as well as countless hours to dig through thousands of pages of documents. Undoubtedly, the warning signs of our current crisis—and the next one!—lie somewhere in all those filings, but good luck finding them...

That's why it's not enough to simply give the SEC—or any of its sister regulators—more authority; we need to rethink our entire philosophy of regulation. Instead of assigning oversight responsibility to a finite group of bureaucrats, we should enable every investor to act as a citizen-regulator. We should tap into the massive parallel processing power of people around the world by giving everyone the tools to track, analyze, and publicize financial machinations. The result would be a wave of decentralized innovation that can keep pace with Wall Street and allow the market to regulate itself—naturally punishing companies and investments that don't measure up—more efficiently than the regulators ever could.

Transparency and citizen-advocacy? Sounds positively American.