Quote of the Week (NFL Edition)

Shortly after former NFL linebacker Junior Seau's tragic suicide in May, I published a post here regarding concussions and the NFL. In that post, I argued that most NFL players are well aware of the risks of football (not just concussions, but of injuries of all types), but that they choose to play anyway because the rewards are so large.

My argument was lent serious credence over the weekend by former running back (and one-time Patriot) Curtis Martin, who may have said more than he realized during his Hall of Fame induction speech in Canton (which, incidentally, was incredible in its candor and is definitely worth watching in its entirety). In discussing his mentor, Bill Parcells, Martin cited this line from the legendary coach:

This week's QUOTE OF THE WEEK

"I've always believed one thing... You should never come out of the huddle, because you never know who's going in the huddle."
                                      - Hall of Fame football coach Bill Parcells, via Curtis Martin

Martin went on to describe his takeaway from Parcells' message—in the NFL, you're always replaceable. There's always some rookie somewhere who's right on your heels, itching for the opportunity to take your job (Drew Bledsoe, meet Tom Brady). Martin later admitted that nearly every year in training camp there was someone on the Jets roster who had more ability than him, but that he kept his job simply by "out-working everyone".

With all due respect to Martin's legendary work ethic, it's probably not the only reason he kept his job—a consistent willingness to shake off injuries and even concussions couldn't have hurt his case. Indeed, Martin would follow up his Parcells story by recounting a tale of having been knocked silly during one game, leaving him so dazed that he ended up inadvertently wandering into the Oakland Raiders' defensive huddle.

I wouldn't be surprised if Martin was back on the field later in that same game against the Raiders, not to mention the next week and the week after that. In fact, given his incredible durability in his career (he missed only 8 regular season games in his 11-year career, 4 of which were in his final season), I'd be almost certain that was the case.

The uncomfortable truth is that if he hadn't found a way to get back on the field, somebody else would have, and the fear of being replaced is never far from a professional athlete's mind. It's never easy to make the decision to step aside and take a few plays off, especially when in the heat of the battle. And yet, despite all of this, and knowing all of the risks inherent in football, Martin still says that he would let his own children play football, because he believes that the risks are worth the potential rewards (be they tangible or intangible).

Honestly, I find Martin's honesty in this regard to be refreshing. We all engage in behavior in our lives that is "risky", but we do it because we happen to assess the situation as "worth it", whatever the potential rewards from the situation may be. So we smoke, we drink, we eat red meat, we play the lottery, we invest in the stock market, we buy houses in Las Vegas in 2005 with interest-only mortgages, whatever. The point is, we're all adults here, and as such we're entitled to make our own decisions about which risks are and are not acceptable in our lives.

I'm fine with all of this, right up until the time that those same people try to blame others when the risks inherent in their actions blow up in their faces. Sure, the bank ripped you off, but it's your fault for not reading and understanding your mortgage documents. Yes, you have a serious brain injury, but it's your fault for rushing back onto the field when you couldn't actually see straight.

I sympathize with those players who played back before there was a full appreciation of the seriousness of brain injuries (concussions), and I certainly don't mean to be callous with respect to players like Seau and Dave Duerson, whose deaths were tragic by any definition. But we're seeing more and more athletes admitting that they know (and knew) the risks of playing through injuries, and decided that the risk of not playing was in fact greater than the risk of continuing to play. That's life in the NFL, and we fans know it just as well as the players do. As long as there's another rookie willing to step out on that field, we'll keep seeing veterans who are willing to sacrifice their health in order to keep their jobs. That's just football.

[Deadspin]

"Criminality" in Oregon

What is this, L.A.?

Gary Harrington, an Oregon man, will be spending a month in jail, after being convicted on nine misdemeanor charges. His crime? "Illegally" collecting rain water on his own property.

Harrington, who lives in Eagle Point, Oregon, has been fighting for the right to collect rain water since 2002.

Now a decade later, he has been sentenced to 30 days in jail and fined over $1,500 for the man-made ponds he has built on his 170 acres of land. For filling “three illegal reservoirs” on his property with runoff water, Harrington has been convicted on nine misdemeanor charges in Circuit Court.

According to authorities, Harrington broke the law by collecting natural rain water and snow runoff, that landed on his property. Harrington said he stores the water mainly for fire protection.

According to officials with the Medford Water Commission, the water on Harrington's property, whether it came from the sky or not, is considered a tributary of the nearby Crowfoot Creek. Thus it is subject to a 1925 law, giving Medford Water Commission full ownership and rights to the water.

Due to this, prosecutors were able to argue in court that the three man-made boating and fishing ponds on Harrington's property have violated the law.

For what it's worth, in this case (unlike this case) I can at least begin to understand what the original purpose of the law in question was (or may have been). But this isn't 1925 anymore, this guy obviously doesn't have any ill intentions, and this whole thing just doesn't make any sense.

Then again, this is 21st century America, where one class of people can rip everyone off (and even admit to violating federal law) all they want and just pay a small fine, but another class gets thrown in jail for collecting rainwater. Sounds fair. Does anybody care?

[Digital Journal]

How Facebook could (help) bankrupt California

I wrote briefly last week about the troubles over in Facebookland (I shed no tears for Mr. Zuckerberg) and the company's incredibly shrinking stock price. Unfortunately for some of us—especially the California schoolteachers among us—there's some collateral damage here (isn't there always?). Per Bloomberg:

Facebook Inc. (FB)’s declining price may cost California “hundreds of millions of dollars” in revenue expected from taxes on capital gains, the state’s fiscal analyst said.

The owner of the world’s largest online social network, touched $19.82 today, the lowest price since the Menlo Park, California-based company first offered shares to the public at $38 on May 17.

The most populous U.S. state’s $91.3 billion budget, signed by Governor Jerry Brown in June, counted on $1.9 billion in income-tax revenue from company insiders such as Chief Executive Officer Mark Zuckerberg exercising options or sell shares, assuming an average price of $35. Facebook, which touched $45 May 18, has averaged $29.49 on the Nasdaq stock market.

“Facebook share prices have fallen far below levels assumed in the state’s revenue projections,” the nonpartisan Legislative Analyst’s Office said yesterday in a report. If “the lower share prices persist through November and December, hundreds of millions of dollars of income-tax revenue assumed in the state budget plan are at risk.”

Perfect. Let me put this as simply as possible—if your budget is only "balanced" based upon assumptions of one-time revenue streams from viciously overvalued assets (whether those assets are internet stocks or McMansions or marijuana farms or whatever else), then your budget isn't actually balanced and you need to go back to the drawing board. That's true whether you're an individual, a corporation, a credit union, a babysitting co-op, or the world's largest local government. Math doesn't care who you are, and it can't be fooled (or manipulated) for very long.

The simple and uncomfortable truth is that this is why our nation has developed the unprecedented culture of bailouts and financial market manipulation that we now have, a culture that's robbing us all of our prosperity by warping and manipulating the underlying infrastructure of our economy. We've all been led to believe by any number of politicians and economists that deflation is our enemy, and that we need inflation (and $5/gallon gas) in order to prosper. This is, of course, obvious bullshit, but the party line actually makes a lot of sense when you dig a little deeper.

Simply put, almost every government in our country—whether local, state, or federal—depends upon high asset valuations in order to maintain anything in the ballpark of a balanced budget. Property taxes, capital gains taxes, sales taxes, even excise taxes, all of these are significantly higher when asset prices are inflated. When the housing bubble burst in 2007-08, it blew a gargantuan hole in state and local budgets nationwide, a hole that still hasn't been adequately plugged. Politicians will be damned if they're going to let this happen again, even if their actions guarantee that the next bubble will be bigger and uglier than the one that preceded it.

For more than a decade, governments made overly rosy assumptions about current and future tax revenues—and therefore made overly aggressive financial commitments—entirely because they believed that house prices could never decline. Then they did, significantly, and tax revenues dried up, but the financial commitments remained. Oops. And despite all of our government's best efforts, we haven't been able to reflate that housing bubble, so here we remain, in a position of constant stagnation.

When a state like California has its budget riding on Facebook's stock price, is it at all far-fetched to assume that California politicians will do whatever is necessary to prop up that stock, unintended consequences be damned? Of course not, and that's why we've got the system we've got. It sucks, but thousand of California pensioners now "need" Facebook's stock to rally. So won't you be a good neighbor and buy a few thousand shares?

[Bloomberg]

P.S.- For another cute example of how individual taxpayers end up on the hook to effectively (or directly) subsidize the corporations in their communities, check out these two recent posts from Deadspin, showing how the Kansas City Chiefs and Royals have been oh-so-cleverly using taxpayer dollars to pay ordinary operating expenses. This is yet another reason why we should never have conceded to the concept of taxpayer-funded stadiums and arenas. We pay for the company's expenses (as taxpayers), and then we pay for the company's product (as fans). Sweet business, huh? Beats stealing cardboard.

Gone Fishin'

I'm heading up to the old stomping grounds in New England for a couple of weeks (a long-awaited summer vacation), so my posting here may be a little sparse. I'll be enjoying some lobster and chowder and all the other good stuff, and I figured I'd post this up in honor of my upcoming trip. Be good, people.

Clip of the Week (Olympics Week 1)

As promised, this week's Clip of the Week is coming from jolly old London, where the first week of the Olympics hasn't disappointed.

So with apologies to this trick shot from John Daly (not Olympics-related), and this crazy buzzer-beater in women's basketball, and this rant from former TARP Inspector General Neal Barofsky (also not Olympics-related, but read his book if you liked it), and this world record from Dana Vollmer, and this amazing vault from McKayla Maroney in the women's gymnastics team final... this week's Clip of the Week is going to Nathan Adrian, who won the 100 freestyle in what may have been the race of the Olympics so far.

Unfortunately, I can't figure out how to embed NBC's videos on my page (I'm pretty sure they made it impossible, and I'll save my long list of gripes about NBC's coverage for another time), so you'll have to go to their site to watch the clip (click here). Congrats to Nathan and the rest of the American gold medalists; it's been a fun week.

CLICK CAPTION TO WATCH VIDEO

My next business venture... who's in?

Things are getting a little tough in the markets these days, and I'm thinking of switching vocations. Anybody got any good ideas for me?

For most people navigating the sidewalks of New York, the corrugated-cardboard bundles that stores put out for recycling are either an obstacle or nothing at all – invisible stitches in the city's zippy visual drapery. 

But for a subset of underground scavengers, they represent a drool-inducing resource, something to be urgently carried away to a recycling plant in exchange for cash money. 

"Cardboard poaching," as it's become known, is a multimillion-dollar cancer growing in the diseased corpus of recycling crime. Though the media have lately zeroed in on scrap-metals theft and restaurant-grease rustling, the stealing of cardboard still hovers below most people's awareness level. That might change soon as the bandits become even more brazen and as recyclers bear down on the papery perps who propagate this unusual black market.

Excellent! Of course, this is all technically illegal (all part of the "diseased corpus of recycling crime", apparently) because there are already companies who have been licensed by the city to do this hauling, so this cardboard is officially stolen goods... but hey who's counting? The only thing I'm gonna be counting is dollar bills, just like Homer and Bart.

The way it's supposed to work is that approximately 150,000 commercial establishments in New York contract with waste-removal companies who are licensed with the Business Integrity Commission, which among other duties is responsible for helping fight corruption in the city's garbage-management trade after the Mafia's intrusion in the 1990s. These authorized haulers schedule pick-up times with the businesses and whisk the waste away in professional-looking trucks. 

The thieves, on the other hand, drive in trucks rented from U-Haul and Penske or even unmarked Econolines. They cruise slowly down the street manhandling bales of cardboard into the vehicles. Or they'll dodge behind a large store like Costco to retrieve spoils left outside by the Dumpsters.

Oh, right. That's why it sounds like such a great racket... it's Mafia business. Makes sense. Still... who's coming with me, huh?

... the city's recyclers estimate that they're losing anywhere from $8 to $10 million a year. They argue that this loss hurts consumers as well, because haulers who can't make as much profit are less likely to grant discounts to business owners. Those businesses might then resort to raising their prices on consumers, and so on.

Sounds like a load of crap to me, honestly. But hey, $8 to $10 million? Sign me up. Beats investing in government bonds, amirite?

[The Atlantic]

Quote of the Week (Facebook edition)

This week's Quote of the Week comes from the world of Facebook, that ever-shrinking titan of social media. Things haven't been going so well for the company ever since they went public, as the increased scrutiny seems to have uncovered a number of pretty serious warts, none more serious than these most recent allegations as reported by PCMag.

A New York-based startup is ditching Facebook after it discovered some questionable activity on the social network's ad platform. 

Limited Run, which develops e-commerce platforms for musicians and labels, claims that 80 percent of the clicks for which Facebook was charging came from bots, not real Facebook users. 

The company said it discovered the problem several months ago in preparation for the launch of the new Limited Run. "We noticed some very strange things. Facebook was charging us for clicks, yet we could only verify about 20 percent of them actually showing up on our site," Limited Run said in a blog post.

I'd recommend reading the whole blog post for the gory details, but the long and short of it is that there are some potentially serious issues with the way that Facebook is reporting and charging for its ad clicks. There may be no ill will intended there—Limited Run, for their part, doesn't think there is—but the issue may be indicative of a serious lack of internal controls at Facebook, and that's a huge problem for a company that relies on advertising revenue to succeed.

But it is a secondary allegation by Limited Run that is the source of this week's Quote. The company claims that Facebook refused to let them change the name on their page (from "Limited Pressing" to "Limited Run") unless the company agreed to dramatically increase their advertising expenditures—not surprisingly, that didn't go over too well with the folks at Limited Run.

This week's QUOTE OF THE WEEK

"Damn we were so pissed. We still are. This is why we need to delete this page and move away from Facebook. They’re scumbags and we just don’t have the patience for scumbags."
                                  - Limited Run

In the wake of Limited Run's allegations, Facebook scrambled to clarify that it is not company policy to charge to change names, and that they would address the situation. While that's the correct move, this is yet another indication of a general lack of internal controls at the company.

Simply put, Facebook's executive team doesn't seem to be ready for prime time, and they are going to seriously need to get their act together if they are going to remain a public company. This kind of scrutiny is only going to get worse for them, and each "unfortunate" incident like this will continue to have a negative impact on Facebook's stock price.

The spotlight is shining, and so far Facebook has wilted. For a guy like Zuckerberg who hasn't made too many friends along the way, they can't afford too many of these hickups before the whole world simply revolts. The world is watching, and the clock is ticking.

[PCMag]