Entertainment

2008: The Year Apple Becomes a Studio?

/ Adam Nash / 1 Comment

It’s the end of the year, and this is generally the time when journalists will put out sensationalist headlines about their predictions for the upcoming year, decade, millennium, etc.

Well, I’m not a journalist.  But I do have a blog.  So let me indulge here in at least one crazy projection that might actually make strategic sense.

Is 2008 the year that Apple decides to become a studio?

This might sound far-fetched.  After all, Apple is a technology company, not an entertainment company.  But I’ll argue that the same forces that pulled HBO into the innovative strategy of creating original content, now being emulated by every cable network from Showtime to FX, could also apply extremely well to Apple.

Let’s walk through this carefully.

First, can Apple move in the direction of producing original content? 

The answer here is clearly yes.  Apple now has the most important asset in entertainment – wide-spread, inexpensive distribution.  Apple has tens of millions of iTunes customers who have proven themselves more than willing to download content, even at a price.

Right now, roughly 2/3 of the cost of Apple’s service is actually royalty payments to the content providers.  If Apple produced their own content, those costs are replaced with actual production costs. HBO began their original content push with documentaries and short, 1/2 hour episodic comedies.

Apple currently has $16B in cash, and a market cap of $170B.  HBO put $30M into its 2-season run of Rome.  Apple could easily afford those budgets, and offset their costs with free distribution through iTunes.   The question is how much is a premium content brand worth?  The answer is billions, and Apple has the capital to invest against that opportunity.

Second, should Apple become a studio?

I’ll argue yes here, but with a number of caveats.

First, like HBO, they’ll have to walk a tight line between the need to license content from other major studios, and their own competitive efforts.  HBO managed to use original content to differentiate their offering, and Apple could do the same thing with iTunes.  HBO established itself as a premium brand and experience with their content and series, and Apple has similar brand elements.  HBO, however, had initial success with licensing movies from most studios before moving to original content – Apple right now is only tight with Disney.

Second, Apple has to be careful with pricing.  If their content is free, or cheaply priced, it might upset the difficult negotiations Apple continues to have around flat pricing on both the music and video sides.  You could argue that Apple would offer studios the same deal – cut your licensing fee and we’ll cut the price, but it’s a problematic area for Apple given their position on pricing.

Third, Apple has to watch out for their broad demographic.  HBO has a particular demographic – adult, high income, educated.  They used their platform (paid cable, commercial free) to produce content that better met the needs of that audience.  iTunes is completely mass market at this point, so it’s unclear what type of content Apple would build – maybe they would need multiple “studios” to address different markets.

Despite those caveats, the advantages of leveraging their lead with the iTunes distribution channel into a premium content play is extremely appealing, economically.  Just like in-house brands are economically too valuable to be ignored for a retailer, the huge fees paid to the content houses for video are extremely attractive when you own the distribution channel.

A quicker path for Apple would be to potentially buy HBO off of the ailing Time Warner, or possibly even NBC from GE.  That last option would have the added benefit of letting Steve relieve the current NBC executive staff of their current, difficult salaried positions.  🙂

Like the iPod/iTunes combination, unique Apple content that can only be accessed through iTunes could potentially boost the value of iTunes, and boost the potential success of the content by special access to the iTunes channel.

So, file this away in your bookmarks for crazy Apple predictions.  We’ll see what happens.

Goodbye, Journeyman. How I Would Have Liked The Series to Go.

/ Adam Nash / 9 Comments

I’m getting a little tired of this.

Is it just me, or is the failure rate of new series going up?  I’m not sure, but I’m getting a little tired of investing hours into a new series, only to find out that it’s cut off before it really gets somewhere.  Maybe I should bag the whole thing and move to purely watching good series on DVD or iTunes (once NBC realizes they are completely off-base taking their content off iTunes).

Well, I had been meaning to post this all season, and now, I catch this article on BuddyTV, which indicates that NBC has passed on filling the last 9 episodes of Journeyman this year, basically putting the nail in the coffin for the series.

So this Wednesday, December 19th, the show is basically over:

The series suffered from low ratings and the network allowed its option for a full season order to lapse by the December 11 deadline for renewal.  While there has been no official announcement from NBC, such an action effectively implies that the series has been cancelled.

So, before the sun sets on this series, let me explain, with two days of potential relevance, how I would have liked to have seen the series evolve.

The rationale for Dan’s time travel that I would have liked is as follows:

  • Dan, Livia, and other time travelers are all linked in some sort of master plan to alter the time line, or rectify it, for some reason.
  • Each “mission” that they take are a set of carefully orchestrated minor changes that each feed on each other to create bigger and bigger effects.
  • We’d start to see people or changes that Dan and/or Livia have made snowballing – the boy saved doesn’t just create a technology to help the blind see, but a blind man helped by the technology becomes Governor, etc.
  • In the end, there is a major, world-ending catastrophe, like in Heroes, that all these micro-changes compound to avoid.

I care less about the exact “orchestrator” of these micro-changes, and how it ties in with Dan, Livia, and other potential travelers.  It could be the scientist found a way to project the future, saw the disaster, and orchestrated this exact path to prevent it.  Why micro-changes?  To limit collateral damage from butterfly effect issues.  I’m thinking of something like Asimov’s time managers from End of Eternity.

Here is what would have made me shut off the show immediately:

  • Anything that indicated they were taking a Quantum Leap direction, with good & evil orchestrators of time travel
  • Anything that indicated this was a mystical or magical phenomena vs. science-based (got close tonight on this, by the way, with the psychic)
  • Anything that sounded like Dan was there to “just do good” and “fix things that went wrong”.  I’ll take my karma from “My Name is Earl”, thank you very much.

HBO better get moving on some new series.  I just don’t trust the major networks to do any of this well, ever.

If you are one of the few people also watching the show, let me know what you think.

Activision Blizzard: New Video Game Giant, More MBA’s per Square Inch?

/ Adam Nash / 4 Comments

Sorry, I don’t know how I missed this news for two days.

Activision, maker of the hit series Guitar Hero, is merging with Vivendi Universal Games, which owns Blizzard, maker of World of Warcraft.  Blizzard, as I’ve posted here previously, is in my opinion the best video game studio of the past decade, bar none.

According to this New York Times article, the combined gian will roughly match Electronic Arts in revenue and size:

The deal announced Sunday will essentially leave Electronic Arts neck-and-neck with the newly combined entity, called Activision Blizzard (named for the biggest studio at Vivendi Games, Blizzard Entertainment). Electronic Arts is projected to have around $3.7 billion in sales this year, while executives of the merging companies said Activision Blizzard should have around $3.8 billion.

Investors seemed to applaud the deal. Activision’s stock was up 20.7 percent for the week on Tuesday at $26.74. Vivendi said it would pay $1.7 billion, or $27.50 a share, and wind up with a 52 percent stake in Activision Blizzard.

The deal is a little worrisome to me, given the fact that Activision has had significant ups & downs in its history.  Blizzard, on the other hand, seems to bat 1000 year after year with every game they release.  (I am soooo looking forward to Starcraft 2 in 2008)

This part of the article gave me pause:

“Activision has more M.B.A.’s per square inch than anybody,” said Michael Pachter, an analyst with Wedbush Morgan Securities. He argued that Mr. Kotick had taken a disciplined approach to running Activision, almost in the spirit of a packaged goods company like Procter & Gamble. “They run the company like a business.”

Is that a good thing?  Really?  Call me a hypocrite (since I do, in fact, have an MBA), but something about this line gave me the shivers.  In fact, just re-reading it now gives me the shivers.

More MBA’s per square inch than anybody.

Ugh.  That cannot be a good thing for a video game company.  I’m not sure that’s good thing for any company outside an investment bank, private equity firm, or a management consulting firm.

It’s like I just felt their ability to recruit rock star engineers fall through the floor.  Can you imagine the pitch:

Recruiter:  “Come join our engineering team!  We have free drinks, video games, great benefits, stock options, and more MBA’s per square inch than anyone else!”

Engineer:  “That sounds… ew.  oh.  geez.  sorry.  You’re breaking up.  I’ll call you right back.”

Ugh.

Sub-Prime Mortgage Humor: The Richter Scales

/ Adam Nash

OK, so as I poke around the creators of the very funny Bubble 2.0 video I posted last night, I discovered a couple of things:

1) They seem to be a group of former Stanford Fleet Street a cappella singers (thank you, Rebecca, for this tidbit.  It explains Jerry Cain appearing in the previous video).

2) There are other Richter Scale videos on Youtube

For example, here is one that is specifically about the Sub-Prime Mortgage mess.

You can subscribe to all of their videos on YouTube here.  Here is a link to their website.  Yes, they have a blog too.

Blu-Ray vs. HD-DVD: The Microsoft Conspiracy Theory

/ Adam Nash

This article was funny enough that I had to share.

Engadget: Michael Bay’s format war conspiracy theory: it’s a Microsoft fix

Here is a tidbit:

Responding to a commenter angry over Paramount’s decision to burn Optimus and friends onto HD DVD only, Bay claims to have the inside track on the “corporate politics” at play here, suggesting that “Microsoft wants both formats to fail so they can be heroes and make the world move to digital downloads.” He goes on to claim that Redmond has only been financially backing HD DVD over “superior Blu-ray” to create “confusion in the market” until such time as high def digital downloading goes prime time.

I love it. This is fun stuff, if you are into meaningless format wars.

Truth be told, Blu-Ray should be king of the hill by now. HD-DVD was almost knocking on death’s door based on studio support, with most studios either deciding to support both or just Blu-Ray. That would have killed HD-DVD quickly, since a typical consumer would have just said, “buy the Blu-Ray, and get access to all movies”. This is on top of the fact that Blu-Ray offers higher storage capacity, and had early support from PC manufacturers like Apple. (Yes, I know the Blu-Ray players cost more, but I assume that problem gets solved quickly)

HD-DVD managed to prevent this fate this year by paying literally a $150M spiff to Paramount and Dreamworks to make their movies HD-DVD only. That pulled Shrek & Transformers into the “must have HD-DVD camp”, and thus the war rages on.

I could have some sympathy, as a result, for Bay’s theory, except for the fact that if there is any subsidy war in this market, Sony takes the cake. They are subsidizing a Blu-Ray player into every single PS3, plus some free movies, in order to get the expensive player technology into the market. That may not be $150M spiff, but it’s actually far more dollars when you assume hundreds of dollars of losses over millions of PS3 boxes.

Microsoft could have done the same with HD-DVD in the Xbox 360, but they chose not to, and made it an add-on product.

In any case, you can put me in the Blu-Ray camp. The minute the spiff runs out, Paramount & Dreamworks will rush back to Blu-Ray, and PS3 growth in 2008 should start to move the right direction. People want to buy movies, and as HD becomes the standard, they will demand high def DVD products. I wish I could promise you that iTunes will have an HD TV & Movie solution in 2008, but I think the big studios are running neck & neck with the music companies in trying to fight their customers instead of giving them what they want. (Right, NBC?)

Update (12/5/2007):  Ugh.  Engadget has an article today quoting an analyst projecting no end to the format war.  Stalemate.  Some of the comments make a case for cheap HD-DVD players and dual-disc production in China turning the war in HD-DVD favor.  I hope not.

Craigslist: To the Gentleman Who Called Me a Depreciating Asset

/ Adam Nash / 1 Comment

Just a quick update here.  It turns out that the woman who originally posted to Craigslist looking for tips on how to land a man making $500K+ per year actually responded.  I found the article on Best of Craigslist.

Since that post continues to be one of the favorites on this blog, I decided to add the content there as an update.  But since many people only consume the new articles via RSS, I’m putting this post up here as a quick link to the update.

Enjoy.

The Writers’ Strike: Why We Fight

/ Adam Nash

Since I got some attention with my last post, here is the YouTube video put out to explain why the Writers Guild of America is striking.

The argument in the video is largely predicated on what other artists get (authors, song writers), as well as the idea that there was an agreement to raise residual rates eventually in the 1980s agreement.  Mostly, it plays to the issue of “what is fair” by making the amounts sought by the writers as really trivial (always good to show little bars vs. big bars in these type of diagrams).

It’s really well done.

Why Do Writers Get Residuals? (Writers’ Guild of America Strike)

/ Adam Nash / 12 Comments

This post was inspired by a short, two line snippet in John Lilly’s blog today.  There has been a lot of press about the current writers’ strike, and it’s impact on TV this fall.  I hadn’t originally planned to write anything about it here, but one comment in John’s blog made me think (italics are mine):

But it’s one of those things, i think. for the studios, this feels, to me, like their waterloo, their napster. we’re in a period of incredible creativity in the world, incredible connectedness. Putting down the hammer on the creatives — in other words, not letting them share fairly in the proceeds from the distribution of their work — isn’t likely to help the television and motion picture industry, in my own, admittedly uninformed opinion.

I’m an outsider to the entertainment industry, so my apologies if this question is hopelessly naive.  But there is something about this entire strike that doesn’t make sense to me, sitting up here in Silicon Valley.

So, here is my question.  A lot of this strike seems to revolve around the Writers’ Guild, and their belief that they deserve royalties (aka residuals) on versions of their content that are distributed digitally (DVDs, downloads, etc).  Apparently, this was one of the big mistakes, in their opinion, of the late 1980’s agreement with the union.

(For those of you not familiar with the term, a “residual” is a micro-payment that you are entitled to every time one of your contributing works is resold.  Just think of a book author getting a small payment every time their book sells another copy, or a music band getting a small payment every time they sell another album.  Revenue sharing.)

Now, I’ll be the first to admit – I’m not sure why you’d deserve a residual on a re-run and not on a DVD.  But my question really is more fundamental:

Why do writers get residuals at all?

I guess, to be less confrontational, let me rephrase the question this way:

Why don’t software engineers get residuals?

I don’t want to sound stupid here.  I’ve heard many reasons given for why residuals are given to writers and other creative contributors to media products.  But most of them don’t really hold water with me:

  1. Comedy is a creative enterprise, and people can go for years in between gigs.  Residuals on past success are a way of funding the down times, so great writing can happen in the down time between gigs.
  2. Historically, authors have always been paid per-copy sold, as a form of risk-sharing between the publisher and the author.  It’s a classic alignment of incentives – more books sold mean more profits for the publisher and more income for the author.  This leapt from book authors to musicians to other forms of entertainment as the industry grew.
  3. Writers deserve their “fair share” of the profits made from their work.  Residuals represent that fair  share.

I’m sure there are others, but those are the big three I’ve seen in the press.

The problem is, with the exception of (2), these reasons could just as well apply to software engineers, who in general never get paid through residuals.

Software engineering is a creative process, where people with unique talent and skill create content (code) that is protected by copyright and signed over to their employer (the company).  There are highs and lows in the industry, and rapidly changing tastes/technology that can lead to low times for an engineer as well as good times.

In software, it’s much more common for an engineer to get paid in a mix of salary, bonus, and stock.   No residuals.

  • The salary is the company recognition of the value an engineer needs to get immediately in exchange for their work.
  • The bonus is the company recognition of short term goals being hit, which allow the company to share the benefits of good performance of the individual and/or the company.
  • The stock is a way for the engineer to share in the long term upside of the product of their work.  They become part owner in the company, and so when the company makes money, they reap some of the benefit.

The stock is really the key to alignment between the owners of the company (shareholders), management, and the individual engineer.  It’s the way of saying, “If this works, we’ll all make money together.”

So, in theory, I guess you could replace the stock component with residuals.  You could argue that there are too many factors that play into stock price, and that residuals are a clean way of rewarding people for their contribution to a product with long term success.  (I’m not sure I’d ever trust the accounting behind residuals, but I guess that’s why lawyers and union leaders make a lot of money.)

Maybe the problem is that writers aren’t really treated like co-owners and long term employees at all, and residuals represent that broken trust.  Maybe studios don’t treat writers like co-owners and long term employees because the compensation system is set up to pay them like mercenaries.  Maybe there is no real concept of a studio – just an aggregation of 1000s of entertainment efforts, each with their own finances, and each writer is just a mini-shareholder of that effort.

Maybe the problem is that the entertainment industry is, for the most part, stagnant, and their isn’t sufficient growth to really provide the upside benefits provided to engineers as stock-holders.

Maybe this is the difference between a unionized approach to compensation and a non-unionized approach?

I guess I’m still at a loss to explain the difference however.  Let’s take a large company like Microsoft.  Should they be paying their engineers like writers?  Or should the studios be paying their writers like engineers?

Mr. Angry & Ms. Calm. A Tale of Email & Digg

/ Adam Nash

I got an email this weekend forwarding a cool optical illusion.  I thought I’d share it here on my blog:

If you are near to this picture, Mr Angry is on the left and Mrs Calm is on the right. If you view it from a distance, they switch places!

For me, stepping away from my computer and looking at the image from about 8 feet away did the trick.  Your mileage may vary.

CREDITS This illusion was invented by Philippe G. Schyns and Aude Oliva of the University of Glasgow. It is featured on this web page: http://cvcl.mit.edu/gallery.htm , listed under ‘Dr Angry and Mr Smiles’. It is taken from Schyns and Oliva’s paper, “Dr Angry and Mr Smiles: when categorization flexibly modifies the perception of faces in rapid visual presentations, Nov 1998”. It is a copyright image and if they tell me to take it off this web page, I will.

I didn’t use to do this, but now when I receive these emails, I tend to go online to see if I can ferret out the source.   I did a Google search for “Mr. Angry Ms. Calm” and I found this very illusion was a Digg front page post… 2 years ago!    Digg was pretty young back then, as you can tell from the comments that people left on the post, debating whether it merited “front page status” or not.

The original post is located here, if you are interested.

Interestingly, it was also on Boing Boing at the same time, and the original image creators actually commented:

The illusion works by manipulating the spatial frequencies of the image.  The low spatial frequencies (the rough, fuzzy shape information of an image) from one image (e.g. Mr. Angy) are combined with the high spatial frequencies (the sharp edge information of an image) from a different image (e.g. Mrs. Calm).  When viewing this hybrid image at a close distance, our perceptual system is able to extract and process the high spatial frequencies and thus we see the image where the high spatial frequencies were taken from.  When viewing the hybrid image at a distance further away, our perceptual system can no longer extract the high spatial frequencies meaning we only see the low spatial frequency information, thus we see the other image.  You can also get a switch in the hybrid image by squinting.”

For me, this is an interesting commentary on the speed and distribution of “unique content” around the web.  It took two years for a front page Digg post to make it to my inbox.

It’s also a really cool special effect. 🙂

Craigslist: What Am I Doing Wrong?

/ Adam Nash / 42 Comments

Silly post this evening.

I don’t usually post or forward urban legends or humor emails I receive. Truth be told, I don’t get many of these any more – it’s as if the world went through 10 years of forwarding silly email as they got used to the medium, and that silliness has past.

I thought this email was fake, but I did this Google search, and I was able to verify that this was, truly, a legitimate Craigslist posting recently, and a legitimate response. So enjoy… it has exactly the right mix of humor, social commentary, and financial reference for my tast.

Here is the original Craigslist posting:

What am I doing wrong?

Okay, I’m tired of beating around the bush. I’m a beautiful
(spectacularly beautiful) 25 year old girl. I’m articulate and classy.
I’m not from New York. I’m looking to get married to a guy who makes at least half a million a year. I know how that sounds, but keep in mind that a million a year is middle class in New York City, so I don’t think I’m overreaching at all.

Are there any guys who make 500K or more on this board? Any wives? Could you send me some tips? I dated a business man who makes average around 200 – 250. But that’s where I seem to hit a roadblock. 250,000 won’t get me to central park west. I know a woman in my yoga class who was married to an investment banker and lives in Tribeca, and she’s not as pretty as I am, nor is she a great genius. So what is she doing right? How do I get to her level?

Here are my questions specifically:

– Where do you single rich men hang out? Give me specifics- bars, restaurants, gyms

-What are you looking for in a mate? Be honest guys, you won’t hurt my feelings

-Is there an age range I should be targeting (I’m 25)?

– Why are some of the women living lavish lifestyles on the upper east side so plain? I’ve seen really ‘plain jane’ boring types who have nothing to offer married to incredibly wealthy guys. I’ve seen drop dead gorgeous girls in singles bars in the east village. What’s the story there?

– Jobs I should look out for? Everyone knows – lawyer, investment
banker, doctor. How much do those guys really make? And where do they hang out? Where do the hedge fund guys hang out?

– How you decide marriage vs. just a girlfriend? I am looking for
MARRIAGE ONLY

Please hold your insults – I’m putting myself out there in an honest
way. Most beautiful women are superficial; at least I’m being up front about it. I wouldn’t be searching for these kind of guys if I wasn’t able to match them – in looks, culture, sophistication, and keeping a nice home and hearth.

it’s NOT ok to contact this poster with services or other commercial interests
PostingID: 432279810

Alright. Funny, right? Sick? Disgusting? Ridiculous? Hilarious? New York? Yes. Yes. Yes. Yes. Yes.

This post received a number of responses. However, this one is worth reading.

THE ANSWER
Dear Pers-431649184:

I read your posting with great interest and have thought meaningfully about your dilemma. I offer the following analysis of your predicament.

Firstly, I’m not wasting your time, I qualify as a guy who fits your
bill; that is I make more than $500K per year. That said here’s how I see it.

Your offer, from the prospective of a guy like me, is plain and simple a crappy business deal. Here’s why. Cutting through all the B.S., what you suggest is a simple trade: you bring your looks to the party and I bring my money. Fine, simple. But here’s the rub, your looks will fade and my money will likely continue into perpetuity…in fact, it is very likely that my income increases but it is an absolute certainty that you won’t be getting any more beautiful!

So, in economic terms you are a depreciating asset and I am an earning asset. Not only are you a depreciating asset, your depreciation accelerates! Let me explain, you’re 25 now and will likely stay pretty hot for the next 5 years, but less so each year. Then the fade begins in earnest. By 35 stick a fork in you!

So in Wall Street terms, we would call you a trading position, not a buy and hold…hence the rub…marriage. It doesn’t make good business sense to “buy you” (which is what you’re asking) so I’d rather lease. In case you think I’m being cruel, I would say the following. If my money were to go away, so would you, so when your beauty fades I need an out. It’s as simple as that. So a deal that makes sense is dating, not marriage.

Separately, I was taught early in my career about efficient markets. So, I wonder why a girl as “articulate, classy and spectacularly beautiful” as you has been unable to find your sugar daddy. I find it hard to believe that if you are as gorgeous as you say you are that the $500K hasn’t found you, if not only for a tryout.

By the way, you could always find a way to make your own money and then we wouldn’t need to have this difficult conversation.

With all that said, I must say you’re going about it the right way. Classic “pump and dump.”

I hope this is helpful, and if you want to enter into some sort of lease, let me know.

New York is a magical place.

Update (12/1/2007): I’ve been meaning to post this for a while. It turns out that this woman ignored the obvious right thing to do, and decided to respond. Her use of technical financial terms is bizarre and incorrect, but I’m guessing she was paraphrasing with some help from friends who had more knowledge about high end finance. In any case, I’ll let you judge for yourself.

From the “Best of Craigslist”, the post titled “To the gentleman who called me a depreciating asset”

To the gentleman who called me a depreciating asset
Date: 2007-10-11, 8:23AM EDT

Dear Sir,

I must confess that I was somewhat taken aback upon reading your email. Indeed, it has taken some time for me to sufficiently recuperate from my surprise. Lest your confidence quickly inflate for little reason (as we know is the predisposition for Wall St. types), allow me to hasten to reassure you that the source of my surprise was neither your candor nor the accuracy of your perception. Indeed, it is your “claimed” success in light of your poor grasp of economics which has me baffled. If the standards required to meet with financial success on Wall St. have sunk so low, perhaps I should indeed “make my own money”, except for the fact that the effort/reward ratio is far too high for my liking – especially when so many of your ilk have displayed a far more cogent grasp of market realities than you have.

By now you are likely scratching your ever-vanishing hairline in confusion, so allow me to elaborate, dear man. To build some credibility I will tell you a bit more about yourself. Though you did not mention the details of your occupation, it is clear that you are an investment banker and not a trader, as any good trader would understand that human courtships are based upon a semi-efficient open market, and not an investment banking cartel. However, your inability to grasp the realities of the dating market is not surprising, given that 90% of the population are senior singles in maturity to you. Not to mention that you have successfully employed the tools of collusion and market manipulation rather that true acumen in your supposed wealth generation.

If your grasp of finance were not a minority partner with your ego, you would realize that the “outflows” associated with my depreciating “assets” are quite certain, and therefore subject to a low discount rate when determining their present value. In addition, though your concept of economics evidentially failed to move past the 1950s, advancement in plastic surgery is not subject to the same limitation. Thus, with some additional capital expenditure, the overall lifetime of “outflows” generated by these assets is greatly increased. Sad that Ashton Kutcher has demonstrated understanding of the female asset class which you, in all of your financial “wisdom”, have not.

You, on the other hand, are, given the uncertainty of the Wall St. job market, more of an inflation-indexed junk bond with an underwater nested call option. Though you may argue that you are more of an equity investment, my monetary minimums required from you do not change, and if you are unable to pay them, I will liquidate you without the benefit of a chapter 11, just as you would me.

Because your outflows are so much more uncertain with respect to mine, I require additional compensation in the form of a underwater nested call option on your future assets. I say underwater because, even taking into account the value of your junk bond coupon payment to me, the value of my “outflow” is in excess of the market price of your equity (which is quite low due to its riskiness associated with your poor grasp of finance and my existing claim upon your junk bond coupon).

I must thank you though for raising the question, despite the reputation cost of subjecting your weak logic to such widespread scrutiny. This took either considerable courage or ignorance on your part- and we’ll give you the benefit of doubt, just this once. My current boyfriend (a trader who lives in Central Park West, of course) and I thoroughly enjoyed discussing your response and we wish you the best of luck in your unhappy pursuit of that elusive market inefficiency.

Since it’s on best of craigslist, once again, I have to assume it’s legit. Ah, New York.

Avenue Q Was Phenomenal at the Orpheum Theater in San Francisco

/ Adam Nash / 2 Comments

It takes a lot to get me up to San Francisco.  But last night was worth it.

For our anniversary, Carolyn & I went up to the city to catch the last night of Avenue Q.  It was phenomenal.

I think it goes without saying that every musical would be better with dirty puppets.  But I honestly don’t think that five seconds went by at the musical where I wasn’t thoroughly enjoying myself.

If you haven’t seen Avenue Q, you need to find a way to see it.  It’s that funny.

As a side note, there was one unrelated, surreal experience at the Orpheum Theatre last night.  At intermission, there was literally no wait for the women’s bathrooms (there are three).  But there was  a line at least fifty guys long for the one and only men’s bathroom in the basement.  I barely made it back to the show on-time.

More that one woman commented on how strange it was to see no line for the women’s room, and this huge, wrapping line for the men’s room.  There was visible and audible snickering, and I think some form of revenge fantasy play going on.  I have to admit, I was immensely frustrated.  I guess I’m just an “equal opportunity” rather than an “equal outcome” kind of guy.

I’m sure the Orpheum was well intentioned, and  decided to alter their design to accomodate women, but they over-shot.  For all I know, maybe they’ve decided their most important customers are women, and making them happy is the top priority.

In any case, Avenue Q was phenomenal.