The World & Beyond

The writings of a global transient.

Tag: Life

Apple Watch Will Fail Because Nobody Want Another Device In Their Lives

I haven’t posted for a month and a half and thus didn’t have time to make my Apple Watch prediction before it’s release.  Since the jury is still out, however, I predict it will be an overall failure.

Simply put:

The great success of the smart phone owes to it’s eliminating the number of devices that one needs to carry, keep track of, and/or charge.

Whereas once upon a time one needed a phone, a watch, a calculator, a notepad, and perhaps a street map in one’s life, now all one needs is a smartphone.

Take a look around at the kids today… they don’t wear watches.  I myself stopped wearing my watches last year.  I’ve never been a fancy watch guy.  However I have  a number of great watches from Mistura.  I love my Mistura watches.  However, prior to my six month trip to Panama that started last September all of the batteries were dead.  I had “get new watch batteries” on my to-do list as I was preparing for the long journey, but finally decided “screw it, what do I need a watch for”?

mistura

We can see the desire of people to eliminate the number of devices in their lives by the evolution of the I-Phone as well as the successful introduction of the smart-looking Galaxy 6 Edge.

After the introduction of the I-Pad, people started to realize that with a large enough screen and enough capabilities in their phone  they didn’t have to carry their laptops around with them as much.  Still, however, the I-Pad itself was an additional device to be gotten rid of it possible.

The desire by consumers to carry as few devices as possible is so great that after literally decades of phone sizes shrinking they are now actually getting larger so that consumer can cut I-Pads and similar devices out of their lives.

Now comes along the Apple telling us that we need a new device for, well, no apparent reason.  Yes there is some cool functionality for some specific applications, but remember:  cell phones got relentlessly smaller year after year after year until consumers realized that by making them bigger they could eliminate another device from their lives.

Apple Watch is now telling them to add another device to their lives.

It’s not going to fly.

Getting Things Done: The Importance of a System

Most of us suffer at one point or other with procrastination and putting things off.  It is a terrible trap to fall into, as a days worth of hard work allows for a week of mental relaxation while a day of slacking leads to a week of mental anguish.

The proper response to that is to have a system.  You can’t trust your gut.  Pilots and Surgeons use check lists for a good reason, and so should you.

A good place to start with this way of thinking is David Allen’s Getting Things Done:

When it comes to personal hygiene I seriously doubt that many of us have problems, even if we suffer occasional procrastination problems in other areas.

Why? Because we have a system.  We wake up, shower, brush teeth, put on deodorant, brush hair, (in my case apply Rogaine), etc.

We don’t even think about it.

Well here at the surf camp I broke the system.  I arrived at the camp last Saturday afternoon.  Sunday morning I woke up about to start my “system”.  I balked at the shower because I was about to go surfing anyway,and continued with the rest of my system.  As I was in and out of the ocean my whole stay I didn’t actually shower until the night before the 7 hour bus trip back to Panama City.

Playa Venao

As I was in and out of the ocean I don’t think I smelled bad.  To the extent that I did smell bad nobody would notice because everyone was doing the same thing,

Here is what is interesting:

You know when you are procrastinating surfing the web or whatever? You know what you have to do… but it’s just a chore to do it?

Well once I broke my daily hygiene system I suddenly would realize that I didn’t brush my teeth this morning or didn’t apply Rogaine, etc.

Once I realized that I didn’t do something, I went and did it, but it felt like a chore.  It was something I needed to do but I had to think about it and then get up and actually do it, and the whole time it felt like a burden.

Those of you who know me know I don’t have personal hygiene problems.

I don’t even think about it.  I have a system. Normally I wake up, brush teeth, shower, etc.

This idea of a system where you simply do what you need to do every day can also be applied to work.  To be productive you need a method of operating where you do what you have to do without even really thinking about it.

Then it won’t seem like a chore.

On a side note, my skin has never been better. (I occasionally suffer from mild eczema) though that could be a result of the relaxation instead of the multiple days of not showering.

NY Fed Chief William Dudley: Guilty as Charged

Last week I wrote about how you can tell who is correct in an argument simply by the response to an allegation.  Specifically I wrote:

“Any time one side of the debate says: “This proposal  has X effect”, and the response by supporters of the proposal  is to say “What we are trying to do is to Y” you always know invariably that the person alleging X is correct”

You also get a strong sense that someone is in the wrong when they are indignant about their motives being called into question.

I was reminded of this from an article in today’s NY Post.   It is about Carmen Segarra, who recorded over 46 hours of conversations with her fellow regulators which showed how the NY Fed has too cozy of a relationship with the banks it was supposed to regulate.

This quote in the article from NY Fed Chief William Dudley (a former Goldman man, of course) is pure gold:

“I don’t think anyone should question our motives or what we’re trying to accomplish,”

That’s really all you need to know that the accusations are spot-on.

Musings on Arguments, Global Warming, Aubrey McClendon, and Harold Hamm

Weighing arguments without knowing the underlying facts is a useful skill. I first learned it many years ago when I was on the Greenwich Representative Town Meeting.

Although I was very active in town politics and hand strong opinions on many issues I quickly learned how to judge arguments where I didn’t have a strong grasp of the underlying facts.

Case in point:

Any time one side of the debate says: “This proposal  has X effect”, and the response by supporters of the proposal  is to say “What we are trying to do is to Y” you always know invariably that the person alleging X is correct.

This approach to issues has a strong impact on my views on Global Warming, Climate Change, or whatever it is called these days. There is a public campaign against global warming “skeptics”. Apparently I am one of them.

One way I know that I am one of them is that what exactly it means to be a global warming skeptic is never defined. So, for example, someone who believes the absurd proposition that no warming has occurred at all over the last 100 years is lumped into the same group as a scientist who believes that there has been warming, that, human activity is likely the cause, but that given that the models have been totally wrong for the last 20 years perhaps we don’t fully understand what is going on and should tread carefully with policy proposals.

Thus, we end up in a situation where serious scientists or other academics who question the more alarmist global warming pronouncements are the subject of repeated assaults on their reputation while ego-maniacs like Michael Mann who conspire to hide data, keep his opponents from being published, lie about his credentials, and then later blatantly lie in court filings is feted.

Before anyone writes in to tell me that the vast majority of scientists believe in “Global Warming”: don’t bother. I know. They are probably right. But the tone of the argument and the behavior of the participants on both sides leads me to label myself a “skeptic”.

Oklahoma City’s famous Aubrey McClendon recently gave a strong tell in a public spat that he is having with Chesapeake Energy.

There is an article last week about CHK founder Aubrey McClendon with his new company American Energy Partners being sued by and countersuing Chesapeake.

Here is the article:

http://newsok.com/chesapeake-sues-founder-mcclendon-fires-back/article/5394170

Major point:

Chesapeake says that after McClendon found out he was leaving Chesapeake, McClendon took over 20 terabytes of data including information about the Utica shale that he has since used to grow American Energy Partners.

McClendon countersues on the basis that he has not been provided info on the existing wells that he still has an interest in with Chesapeake.

The two key points, however, are as follows:

1. McClendon is indignant!. From the article:

“It is beyond belief that the company that I co-founded 25 years ago and where I worked tirelessly to build it into one of America’s largest and most successful oil and gas producers has now decided to add insult to injury almost two years to the day after my resignation by wrongly accusing me of misappropriating information,” McClendon said in a statement.”

I’m pretty good at reading people’s responses to accusations. The second I read this I figured McClendon was in the wrong. People who are right about an argument typically point that out rather than complaining about how they are being treated.

McClendon adds “Under my agreements with Chesapeake, I am entitled to possess and use the 20 terabytes of information I own,”

Let’s see: McClendon put up a site where he posts all the relevant documents (he claims) to the case: http://aelpvchklitigation.com.

Let’s look at the separation terms documents:

http://aelpvchklitigation.com/docs/agreed-terms.pdf

“Continued Services: In addition to the continued accounting support provided in 4.7, the company will provide the data, licenses, and services, including administrative, engineering, IT, and software, necessary to facilitate the efficient exchange of land, well, title and other information kept in the Company’s well files, previously provided to Mr. McClendon in written form on a routine basis or requested by Mr McClendon and development of reserve reports in connection with oil and gas interests acquired under the FWPP, or jointly owned by any affiliate of Mr. McClendon’s and the Company.”

It seems that the basis of the disagreement comes down to how exactly this is being interpreted. Let’s look at it two different ways (bold added by me):

It seems Mr. McClendon is reading it this way:

“…the company will provide the data, licenses, and services, including administrative, engineering, IT, and software, necessary to facilitate the efficient exchange of land, well, title and other information kept in the Company’s well files, previously provided to Mr. McClendon in written form on a routine basis or requested by Mr McClendon and development of reserve reports in connection with oil and gas interests acquired under the FWPP, or jointly owned by any affiliate of Mr. McClendon’s and the Company.

While CHK is reading it this way:

“Continued Services: In addition to the continued accounting support provided in 4.7, the company will provide the data, licenses, and services, including administrative, engineering, IT, and software, necessary to facilitate the efficient exchange of land, well, title and other information kept in the Company’s well files, previously provided to Mr. McClendon in written form on a routine basis or requested by Mr McClendon and development of reserve reports in connection with oil and gas interests acquired under the FWPP, or jointly owned by any affiliate of Mr. McClendon’s and the Company.”

I emailed the media contact person at McClendon’s litigation website if that was the basis of the disagreement but so far have received no response.

Perhaps McClendon’s argument is that as long as he was still at CHK on his last day he had a right to the data.

Given McClendon’s long-standing treatment of CHK as his own personal company the main issue is most likely that deep down he was entitled to whatever he wanted from the company that he built.

His outrage to a factual accusation probably means he is wrong.

Either way, this is a good lesson in how expensive lawyers can still botch things up. While it’s easy to make the argument that CHK would never have agreed to give McClendon information in perpetuity, the fact is that this clause in the separation agreement could have easily been more clear by simply starting it with “In connection with oil and gas interests acquired under the FWPP, or jointly owned by any affiliate of Mr. McClendon’s and the Company” instead of ending it with that clause.

I was prompted to write this essay because of this item on seeking alpha: “Russians financed U.S. anti-fracking movement, Continental’s Hamm says”

My friends all know that I am very bearish on the drilling stocks, Continental included. In short, while production and inventories rise, many investors still believe that an oil rebound is near. It could be, nobody can really tell you or I what the price of oil will be one month from now, but there are a lot of reasons to believe oil will stay down for a long time. If so, the leveraged Exploration and Production companies are in big trouble. Already most of them are living on their credit lines, and I don’t believe that those lines are as secure as oil bulls think.

I think these companies are in big trouble. When the CEO of one of the largest starts complaining about the Russians (whether it is true or not) that is a sign of desperation and I am taking it as a sign that I am right.

Musings on Elton John, Zurich, and Hotel California

My daily workout routine is about 45 minutes. I usually watch a VH1 “Behind the Music” on youtube while I work out as they are typically about 45 minutes.

I’ve been through a lot of them. It’s sort of interesting when you realize that in almost every case bands fail because of ego battles and in the end most of the members probably wish they had just gotten along and continued to churn out the bucks.

One exception to that is Sting who is a lot happier and better off now.

Of all the ones I have watched the only band where the major players are both sane and normal people are Hall & Oates, although I am not really a fan of the music with the exception of “You Make My Dreams Come True”

(Both my brother and my friend Andy always complain that I like my songs live. Well, too bad for you guys.)

In any event, like everyone else my age of course I know who Elton John is and I know all his big songs, but I can’t say I ever bought any of his albums except perhaps a greatest hits tape in high school. Like most people I think Rocket Man is a great song. In fact, it’s one of the few songs everyone likes that I have never really gotten sick of as opposed to, for example, Hotel California which was a great song the first three or four thousand times I ever heard it but not any more.

The best version of Hotel California I ever heard was in Zurich at a place called restaurant Sonne. I wasn’t important enough to get a nice corporate apartment so I had a studio apartment (paid for by Kerr Mcgee) right by the red light district. To be fair it was pretty close to city center and I could walk to work, etc.

Zurich (and Switzerland in general) is a great place. The Kerr-McGee HR guy (a German guy, who got fired a few weeks later) told me: “Look, you can do whatever you want here, nobody cares, just don’t steal or hurt anybody and you are good. If you do steal or hurt someone they will lock you up and you don’t have the rights you Americans seem to think you have everywhere you go”.

Don’t hurt anybody and don’t steal. That’s pretty much how it should be instead of the schools to prisons model that is prevalent in the US. In any event I went into this bar called restaurant Sonne one night that was a block or so away from my apartment. There was this very bizarre display of an asian woman in a hot pink skirt, heels, and lipstick backed by a band of asian guys with century 21 style yellow jackets, white shirts, black thin ties, and black pants. They had just started playing Hotel California.

I bought a beer and was shocked when it was like 8 francs. Then I kept getting “hit on” by a variety of women.

I thought “What the F**K is going on here?” This was my first ever (and only) experience in a prostitute bar (Although I suppose every bay in Nairobi is at some level) Meaning, it’s just a bar. It’s not a whore house but the customers are all men and prostitutes.

So I watched this amusing display of Hotel California followed by a just as amusing Achy Breaky heart while various prostitutes came up to me trying to get me to go back to their apartment with them for 100 francs, which of course I never did.

Just writing this now I googled restaurant Sonne and found this video.

YouTube

This is exactly, precisely, the location with the singer and band in same place. The whole thing is utterly absurd. (The video should open at the two minute mark.)

Only, you can tell this one is filmed during the daytime. Imagine it at night with about 30 prostitutes roaming around.

(I just watched it again.. one of those two ladies might actually be the one I singing Hotel California).

Anyway, back to Elton John:

I was a metal guy until around 16-17 at which time I added in Neil Young, Hot Tuna, and Led Zeppelin. So, I was never really a follower of Elton‘s career while it was going on except I remember as a kid the video for “I’m still standing” which is ok.

My image of Elton John was early 70’s subdued stuff like “Rocket Man” and “Daniel”, and then the current slightly obese and mellow Elton John.

I learned form VH1 that in late 70’s and early 80’s he was this wild and crazy flamboyant guy who spent a number of cocaine fueled years churning out wild concerts. I’m sure this isn’t news to any of you but for some reason it is to me.

Anyway, I found this recording of him singing rocket man in a much more “flamboyant” way. There are higher notes in certain parts of the verses and especially the chorus. It is really great. It is sung with a great deal of energy.

It should open at 1:16:19.

To be clear though, his extended rambling after the end of the studio version I am not a fan of.

I Went to a Panamanian Baseball Game

While American baseball fans get ready for spring training, I had the opportunity to go to a baseball game in Panama two weeks ago. It was the best game I have ever been to.

There are, it seems, 3 leagues in Panama.

Fedebeis runs a “juvenile” league and a Major league. ()

There is also a pro league.

The pro league ended in January. The major league is rumored to start up at the end of the month. However you will notice from the web page that they don’t actually tell you when it starts which is par for the course in these parts.

I went to the semi-finals in the juvenile league. The players didn’t appear to be “juveniles” i.e. little league but are seemingly at least 17 or so. You can read the rules for the league on the website but I sure can’t find what the age limit is.

Arriving at the game is not very difficult. The Stadium is not far outside of the city center, although on a Friday afternoon on the day before Carnvinal starts it took an hour in the taxi to get there as everyone was leaving the city for the holiday. It should normally take 20 minutes.

At the game were a buddy of mine, his taxi driver, and two German tourists we had met a few days before at my restaurant and who and wanted to come as they had never been to a baseball game.

Anyway, onto the game. It was Panama Metro versus Chiriqui Occidente. The game was a good one with Panama Metro winning 2-1. While the stadium itself was not up to american standards

 

What was special was the atmosphere:

First of all, there were no commercial breaks. The game moved along at it’s natural speed. The more important point however was the Panamanian flair brought to the experience.

I have often made the point that baseball is a lot like soccer. Now, before you choke on what you are eating let me explain:

For most of my life growing up and living in the United States although I played soccer as a kid I thought watching it on TV was boring. That all changed for me on my first trip to Africa. I had a 12 hour layover in the airport in Accra. While there Ghana was playing in the World Cup. I was sitting at the bar with another American guy I met and every time Ghana scored the airport basically stopped as everybody celebrated and airport employees ran through the airport jumping up and down and hugging each other. This was the first time I understood how passionate some people were about soccer and I wanted to understand why.

I finished watching the rest of that world cup with friends in Kenya. Later on, while watching matches on TV in restaurants or cafes in Italy, Albania, and now Panama I have come to like and enjoy soccer.

In essence, it’s a cultural thing. It’s something you do with your friends and your family and that you follow and talk about at work, at the bar, etc.

In that sense, baseball is the same thing. Although the nature of the game is totally different than soccer it is by and large something learned culturally that you learned from your father and talked about with your friends.

Just as Americans don’t understand why anyone would watch 90 minutes of Soccer, Europeans don’t understand why anyone would sit through a baseball game.

Both games suffer from long stretches of nothing really interesting happening. Baseball makes up for this with it’s obsession over stats to fill the gap, soccer does it with drinking, crowds singing songs, and the like.

Here’s what’s great about Panamanian baseball:

It’s a baseball game with a soccer crowd, only instead of singing there are bands. Two of them. Each team brings it’s own band – and the bands don’t ever stop playing. In fact, they usually play at the same time.

Here is a video of the Chiriqui Occidente band close-up:

 

 

And here is a video that captures the effect of the two bands playing at the same time and also shows a few pitches:

 

The beers are a dollar, and when the beer guy comes he leaves you the cooler.

 

Here is what happens when the game ends… flying beer:

 

 

And here is the must see post-game celebration out on the concourse. I’ve never seen anything like this at a baseball game in the US:

When all is said and done, it was a great time and it is a reason why baseball fan should consider Panama for their winter vacations, especially when you consider the prices.

 

Ticket: $4 Beer: $1 Hat: $5

Here’s my obligatory selfie wearing my new hat:

 

 

Things desperately needed in the U.S.

So as I travel around the world I sometimes encounter things that I have never seen in the U.S.

First, I give you the ability to “recall” a elevator button push by pushing the floor number again.  Ever get into and elevator and some jerk has pushed all the buttons?  Ever accidentally push the wrong button?

At this elevator in my old apartment building in Panama those things aren’t a problem.  Watch:

 

I would be curious to know if there is any reason why elevators in the US don’t have this.  Perhaps there is a fire code reason or some such thing.  I’ll tweet Otis Elevator and ThyssenKrupp and report back if I get an answer.

I suppose this next idea isn’t desperately needed, but when I went to Medellin for thanksgiving the fridge in the apartment that we rented on AirBnb had a built in beer holder:

 

fridge beer holder

The Gamesmanship behind the famous $975 million check

If you don’t follow oil stocks you are probably at least familiar with social media images of the $974,709,317.77 check the majority owner of Continental Resources, Harold Hamm, wrote his now ex-wife, Sue Ann Arnal, after a lengthy divorce trial.

At first she refused to cash it but changed her mind a few days later. Underlying the decision is an interesting story of legal gamesmanship.

Harold-Hamm-Divorce-Check

Fortunately for you the reader I was previously married to and later divorced from an Oklahoma City divorce lawyer.

The entire case is fascinating and through the documents publically available we get a look at Continental and the life of Mr. Hamm through numerous witnesses both inside and outside of Continental.

The focus of the trial was to determine what was a part of the marital estate and what Hamm and Arnal owned separately.  Assets that were not a part of the marital estate would go to whomever they belonged to while marital assets would be divided in a “fair and just” manner, which usually means 50-50.

The relevant Oklahoma Statute is 43 O.S. 121(b) which states:

“The court shall enter its decree confirming in each spouse the property owned by him or her before marriage and the undisposed of property acquired after marriage by him or her in his own right…. As to such property, whether real or personal, which has been acquired by the parties jointly during their marriage, whether the title thereto be in either or both of said parties, the court shall, subject to a valid antenuptial contract in writing, make such division between the parties as may appear just and reasonable, by a division of the property in kind, or by setting the same apart to one of the parties, and requiring the other thereof to be paid such sum as may be just and proper to effect a fair and just division thereof.”

In short:  Separate property is separate, marital property can either be split or it goes to one party he/she then has to pay the other party for half of the value.  We will see later that the judge decided that some of Hamms’ Continental Resources stock was separate property and some martial property, and that he had to pay Ms. Arnal half of the value of the stock that was marital property.

An important question becomes “What is separate property”?

From the judge, separate property may be one of six types:

A.  Property owned by a spouse prior to the marriage, which retained its separate status during the marriage because it was maintained as separate property.

B.  Gifts to one spouse from a third party during the marriage, and gifts from one spouse to the other during the marriage.

C.  Descents or devises to one spouse during the marriage, maintained as separate property;

D.  An exchange during the marriage of property, in which the owning spouse exchanges separate property for other separate property;

E.  The owning spouse’s purchase of other property with his/her separate funds during the marriage; and

F.  Compensation received by one spouse for personal injury

So where does Hamm’s Continental stock fit into this?

Hamm started the company that is now Continental Resources long before the marriage.

However,

In Thilenhaus v. Thielenhaus, 1995 OK 5,8920 P.2d925,931 the Oklahoma Supreme Court held:

“Where as here a spouse brings separate property to the marriage, its increased or enhanced value, produced by investment managed by neither spouse or by appreciation, inflation, changing economic conditions, or circumstances beyond parties’ control, cannot be treated as a divisible marital asset unless, of course, there by proof that the increases resulted from efforts, skills, or funds of either spouse.  The non-owning spouse’s interest in the increase estate of the other, when established through efforts, skills or expended funds, stands confined to the enhanced value of that separate property.  The burden is on the upon the non-owning spouse to show that the enhancement is the result of either spouse’s endeavors.”

Thus we have the peculiar circumstance of Ms. Arnal having to prove that her husband was an excellent oilman who is the reason for Continental’s incredible rise in value since the marriage, and having to prove it, while Mr. Hamm (one of the world’s great oilmen) tries to show that really he didn’t have anything to do with the increase in value, but rather that it was due to the rise in oil prices, other executives, inflation, and advancements in technology.

In order to make her case Ms Arnal hired numerous expert witnesses including Dr. Kenneth Button, a former economist from the US Department of Commerce and the Treasury Department, Dr. Glenn Hubbard, currently Dean of the Business School at Columbia University and formerly Chief Economic Adviser to the President of the United States and author of the textbook Principles of Economics, Stephen Hurley, formerly president of Hunt Oil Company, Dr. Kenneth Lehn, former Chief Economist at the U.S. Securities Exchange Commission and currently a professor at the University of Pittsburgh, and Dr. Joseph Bower, a professor at Harvard Business School for 51 years.

In order to estimate which portion of the rise in value of Continental was likely due to active rather than passive forces, Mr. Button compared Continental to a peer group, going back to the date of marriage and that the outperformance of Continental versus the peer group reflects the value added by Mr. Hamm.

Hamm countered that Button’s approach did not account for the asset mix or capital structure of the differing companies. Namely, that Continental had a larger reserve base than the peer group and thus Continental’s price would have increased more than the peer group as the price of oil rose. The judge dismissed Button’s work, saying “Dr. Button’s analysis may show Continental stock to be a good investment, but it does not address of quantify the skills or efforts of either party in this case, that resulted in the increased value of Continental during the marriage.”

Dr. Lehn took a different approach. He determined how much Hamm’s money would have been worth had he sold all of his Continental stock during the marriage and invested the proceeds in any one of three other types of investments represented by various stock, bond, real estate, and commodity indexes and/or a mixture thereof. All outperformance of Continental over those indexes he attributed to Mr. Hamm as the controlling shareholder. Lehn asserts that all employees were paid the value of their services and that therefore there is no additional value to be attributed to their contribution. If an employee was worth more than his pay package he would leave for employment elsewhere.

The judge dismissed this argument by pointing out that Continental employees are paid a competitive salary in the industry and that employees are precisely paid to create value for a company.

Dr. Lehn did also not consider the composition of assets owned by Continental at the time of the marriage.

Dr. Glenn Hubbard compared Continental’s performance to three specific groups (court documents do not say what these groups were) and that Continental outperformed all three. As the controlling shareholder all strategic decisions were Hamm’s, and thus all outperformance of Continental can be attributed to him. The Judge, however, dismissed this claim (as he did with Lehn’s) by noting that the trial evidence demonstrated that a number of employees contributed to or were credited for key strategic decisions at Continental.

Mr. Hurley concluded that Continental’s growth was due to Hamm’s “unique and extraordinary leadership skills” and that Hamm deserved all of the credit as “Captain of the ship”. His approach was less analytical than the others and only broke out reserves as “marital” or “non-marital” which the judge dismissed as ignoring the legal distinction between Continental as a corporation and Hamm as a shareholder.

The judge summed up Dr. Bower’s testimony as “Respondent has been remarkable and therefore all increase in Continental’s value should be attributable to the Respondent (Hamm)”.

continental resources logo

Testifying on Hamm’s behalf, Devon Energy Chairman Larry Nichols testified that advancements in technology created an “Energy Renaissance” allowing drilling where companies were never able to before.

Energy investment banker Thomas Petrie testified that neither Hamm nor Continental had control over the technological breakthroughs that led to the energy boom in the United States.

At the end of the day, the judge largely agreed with Hamm in a decision Arnal’s lawyers describe a “shocking”.

Per the Memorandum Order With Findings of Fact and Conclusions of Law:

“Respondent (Hamm) owned Continental Stock on the date of the marriage.  The Value of Respondents Continental stock he owned on the date of marriage has become enhanced during the marriage.  This stock contains both separate and marital property character.  The value of the stock must be apportioned before the marital portion can be isolated and then divided between the parties.  Based upon the evidence presented at trial, the enhanced apportioned value of the Continental Stock which resulted from efforts, skills, or expended funds of either spouse, the marital portion of 122,010,608 shares of Continental Stock, is the sum of $1,398,43,783 which is awarded to Respondent. The remaining value of these shares is awarded to Respondent as his separate property.

That is, only 1.4 billion out of as much as $17 billion of Continental stock was deemed to be marital property, of which Arnal was entitled to half of the value.
Including everything (not just Continental stock) the judge awarded marital assets to Ms. Arnal of $25,066,031 and assets to Hamm of 2,016,029,715.  With 1,990,963,684 more awarded to Hamm than to Arnal, Hamm owed her $995,481,842, however he has already paid her 22,750,000, leaving a balance of $972,731,842.  Hamm was ordered to pay 322,731,842 by December 31, 2014, and then $7 million per month thereafter, with the balance accruing at the statutory 5.25% interest.
Arnal launched an appeal on December 5th 2014 over a number of issues that led to Only 2.04 billion of the total 20 billion of Hamm’s assets as part of the marital estate subject to division.

Meanwhile, she was strapped for cash having been awarded a number of non-income producing properties and had already expended millions of dollars on legal expenses and expert witnesses, with more expenses to come.

With the first installment coming due on 12/31/14, on 12/22 Arnal‘s lawyers filed a “motion to clarify” with the court. She wished to accept $266,201,692 of the money owed to her as payments for assets that were subject to her appeal and to do so without jeopardizing her right to appeal.

Under Oklahoma law if one party accepts the benefit of a judgment, he/she waives her right to appeal unless her appeal is limited to issues that the court could only result in a more favorable judgment to her with no risk of a less favorable judgment.

In spite of Hamm’s previous statements that the original divorce decree was “fair and equitable” Hamm responding by filing an appeal that included the marital property division that Arnal was not appealing.

This meant that even if Arnal was granted the right to accept the $266,201,692 without jeopardizing her right of appeal Hamm would now not have to pay her anything at all until his appeal was resolved.

Hamm then increased the pressure on Arnal by presenting her the famous check for the entire $975 million and releasing it to the press. He obtained the money by pledging a portion of his Continental stock as collateral. This put extreme pressure on Arnal to either take the full amount and risk losing her right of appeal or take nothing and not have the money to fund her appeal or her lifestyle.

So she deposited the check. Now, of course, Hamm is arguing that she has waived her right of appeal.
The judge has not ruled on this yet, but I will keep you updated.

Kidnapping, Inefficiency, & Significance

Most mornings I have coffee and an empanada at Pasteleria Noel.  I have been meaning to write a post complaining about some of the inefficiencies there but held off as I suspected something bad had happened to the owner who seems like a nice guy.

I noticed a Mercedes parked in front of the place at an odd hour and thought “that must be the owner’s car”. My first thought – as it always is when I see a fancy car in Panama was “why would you make yourself such a target?”  As I passed by later in the day I snapped the following picture:

noel

Well now I was pretty certain that something bad happened and it was probably the owner.  There was nothing in the news for a few days but from today’s newspaper we learn that the owner of this Mercedes was kidnapped but has since been recovered.

Se sospecha de un grupo de venezolanos y colombianos que lo interceptaron el pasado jueves por el área de Bella Vista, en donde fue encontrado su vehículo. Durante este fin de semana la Policía hizo operativos para ubicar al resto de la banda.

I still am not sure if this is the owner of Pasteleria Noel but I suspect it is.  In any event, now that it is either A. Not him, or B.  It is him and he’s ok now, let me proceed to rant about the inefficiency of the place:

When you sit at the counter and eat and have a coffee you can’t actually pay at the counter.  You have to pay in the main checkout line.  The main checkout line is often crowded and is full of people buying a whole bunch of cakes and/or pastries for an event they are having that night.  I have long ago accepted that the 3rd world isn’t good at making lines move smoothly, but here is something easy that can be easily fixed:

While the desserts and cakes made every day differ, there are the “bakery staples” made fresh every day such as croissants, baguettes, and the like.

When you go to buy a croissant (as I do from time to time to eventually make a ham sandwich with it) it is not as simple as saying “un croissant por favor” and then paying for it.  Baked goods all very slightly in size and shape.  This is no big deal and the variance is always small.  At Pasteleria Noel, however, instead of just having a set price for a croissant they weigh every single one and charge accordingly.  This adds multiple extra steps to the process of buying a croissant.  Let’s compare the “normal” vs. Pasteleria Noel process for buying a croissant:

Normal:

Me:  One croissant please

Bakery worker:  Here you go.

Cashier:   75 cents please

Me:  (pays) Thank you!

Cashier: Thank you!

Pasteleria Noel:

Me:  One croissant please

Bakery worker:  Do you care which one?

Me:  No

Bakery worker (weighs the croissant, writes the price on the bag)

Cashier:  How much?

Me: (Shows the bag)

Cashier: 72 cents! (or 71, 76, it varies)

Me:  (needs to count out 72 cents  I spend my changed here.  I couldn’t just have 75 cents locked and loaded and ready to put in her hand.)

Cashier:  Thank you

Now, if this sounds inefficient, it is even worse when dealing with some customers because they will waste time picking out the exact croissant or loaf of bread that they want.

Back to the kidnapping:  Driving a Mercedes around Silicon Valley isn’t likely to make you the target for a kidnapping or robbery.  In Panama City it is.  So why do people drive Mercedes in Panama City?

I reached out to my good friend Stephen Hilgart.  Steve is the most insightful person I know on human behavior.  Check out his website:  http://stephenhilgart.com.  I had the fortune of sharing an apartment with Steve in Riga for 6 weeks or so in which time I learned more about human behavior and thus myself than in my prior 41 years combined.  Steve explains that it is all about significance:

Everyone wants to feel like they are a part of someone and they want to be loved and all but at the same time we all want to be different and unique and special.  The challenge in labeling it “significance” as I do is that not everyone uses that word to describe it.  They might use unique, special, or different.

My own advice is to search for significance outside of  material goods.  This is one of the reasons I write this blog even though nobody really reads it (yet!).

When in Rome, Avoid the Americans

Since I travel a lot and have been to a lot of unusual places it is fairly routine that I get emails from people saying “my cousin, sister, son, etc is traveling to country X.  Do you have any advice?”.

My first piece of advice for traveling to any country is always as follows:

Find out the yahoo message board or subreddit on Reddit where Americans in that country congregate.  Write a post that says “I’m an American traveling to your country.  What is a good part of town to live in?  Are they any good cafe’s or bars where Americans hang out?”

You now have a list of places to avoid.

I don’t hate my country or countrymen, but the fact remains that Americans overseas are without a doubt the most obnoxious group of people you will every encounter on your travels.

The general behavior of American expats is as follows:

1.  Separate yourself from the local culture.

2. Do nothing to learn the language or customs.

3.  Hang out at all the same cafes or bars.

4.  Bitch and moan endlessly about why this country is not as good as America

5.  Condescendingly tell the locals why they should do things more like Americans do.

This is particularly true in Panama where Americans believe that Panama owes America an eternal debt for building the Canal.

I was prompted to write this blog post because of an exchange that happened yesterday on the Americans in Panama yahoo message board.  I am a subscriber to the board (although I have never posted) because sometimes there are some good posts about how to accomplish one or another task when dealing with the Panamanian government or where/how to buy something that is difficult to find.  90% of the posts are mostly people just complaining about how living in Panama is not as good as living in the U.S.  I typically don’t read them because when I do my blood pressure increases and i get the intense urge to respond “SO FUCKING GO HOME ALREADY” but so far I have managed to keep my cool.

Yesterday a Panamanian wrote a post titled “Rude Gringo” about a bad experience she had in a traffic jam with a Gringo trying to cut her off.  One single reply to this post perfectly encapsulates everything that is wrong with Gringos and their mentality.  The post is as follows:

Gringo

Newsflash:
1. Panama was a Province of Columbia
2., Theodor Roosevelt paid $10000 to Columbia upon request of Panamanian separatist in order to have a independent country. Without US payment no Independent state of Panama.
3., US engineering and medical know how help to eradicate: malaria, yellow and dengue favor in order to built the canal.
4., I fail to noticed that without the “ugly gringos” that would happen.
5., US liberated you and other Panamenos of the cruelty of Noriega
6., Pres. Carter stupidity to give you the Canal “gratis” even though it cost a lot of money for US people to build.

Even though , I am not Panamena, however, I have manner, graces and very high level of education which enables me to tolerate even your “ugliness”. Moreover, without my money and other “ugly gringos” money being invested in your country, some of progress what you are experiencing would not occur, just because you are Panameno.

In other words:  You owe us.

This person also just had to write about her “manner, graces, and very high level of education”.  That is:  We are better than you.

The sad thing is that the poster doesn’t even realize just how rude and condescending she was being – but that is the very nature of Americans overseas.  They really have no idea.

Assuming for a second that her post is accurate (I have some quibbles about it), she is missing the larger point about dignity.  Without dignity, a man has nothing.  You can take away a man’s land and his riches, but when you take away his dignity he has nothing left and he will hate you and want to kill you.

An entire world war was fought over dignity.  After the Archduke Franz Ferdinand received a well deserved bullet to the chest the Austro-Hungarian Empire made a list of 10 demands upon the Kingdom of Serbia.  These demands were written precisely so that Serbia had no choice but to reject them and therefore provide Austria-Hungary a Casus Belli for war.  Serbia, desperate to avoid war for a change actually accepted 9 of these ridiculous demands.  The only demand rejected was giving Austrian police the right to operate in Serbia.  This is an indignity no sovereign people can endure.  War was chosen over indignity.

The Serbs, a people fighting for everything, ultimately suffered total military and civilian losses of 1,1 million people, including 60% of the entire male population of Serbia.

If you treat people with a lack of dignity and tell them that they owe you for everything good in their life they are going to hate you, whether there is any truth to the matter or not.

You have no idea how many times I have heard expats in Panama explain how we are the only reason this country isn’t a total shithole and that we deserve to be treated better.  Whether or not it is true or not doesn’t matter.  This attitude isn’t going to win you any friends.  And, of course, the person saying it most likely had no role whatsoever in anything good happening in Panama and still isn’t adding anything positive to the society.

In any event, hanging around with expat Americans gets old pretty quickly which is why I don’t live near them nor hang out in the places that they frequent.

Americans overseas also mistakenly believe that segregating themselves off makes them safe.  In reality it makes them a target.

When I lived in Kenya I lived on Ralph Bunch road.  It is a nice quiet street near the Presidential compound, the Ministry of Defense, and the Russian Embassy which amusingly is on a hill above the Ministry of Defense looking down on to it.  Pretty much every American in Kenya however lived on the other side of town in Westlands.  Why?  That’s just what you do as an American.  If you ask an American where to live they will all say “Westlands”.

Whereas I never had any security issues where I lived people were constantly  getting robbed or carjacked in Westlands.  Of course they were.  If you were a criminal and you were looking for a target where would you go?  To Westlands.  Plus, traffic in Westlands was terrible and everything was more expensive as well.

westgate mall

When the Westgate mall attack occurred in Nairobi I was surprised that there were no Americans killed as Westgate Mall is where Americans all hung out and did their shopping.

A few years prior when there were attacks in Uganda one of the targets was a  restaurant frequented by Americans.

 “Uganda Police Force Inspector General Kale Kayihura stated, “The information we have indicates the people who have attacked the Ethiopian Village were probably targeting expatriates.”

Here in Panama, I won’t live anywhere near Clayton where the Americans will tell you to live. I also don’t go to Allbrook mall nor drink 5 dollar beers where the Americans hang out.  I live in a low-key building where I am the only American and it’s walking distance not only to my own restaurant but also to restaurants and bars where I am likely to be the only Gringo there.  It is a much better way of living.

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