Another sad story of a jock blowing his millions. Lenny Dykstra, who loved the Atlantic City casinos when he played for the Phillies, sought protection from creditors under Chapter 11 of the bankruptcy code, Bloomberg reports. Since retiring in the 1990s he has put his money in the dumb places typical of jocks: A "lifestyle" service for athletes, a magazine, a car-wash chain and a Web-based stock-picking service. What, no restaurant?

The players unions really need to do a better job of educating retiring athletes. A diversified portfolio of stocks, bonds, commodities and real estate is what these guys need. But they have already beaten the odds by making it to the majors, and they are accustomed to thinking of themselves as exceptional. They figure they'll get to the bigs in business, too. Rarely happens.

July 8 (Bloomberg) -- Lenny Dykstra filed for Chapter 11 bankruptcy protection in a petition that says the former Major League Baseball All-Star owes $10 million to $50 million.

The former center fielder for the New York Mets and Philadelphia Phillies has less than $50,000 worth of assets and 50 to 99 creditors, according to a petition filed with the U.S. Bankruptcy Court for the Central District of California in the San Fernando Valley.

Dykstra, 46, already faces about 20 lawsuits stemming from his entrepreneurial work, including The Players Club, an athletes-only magazine start-up. He owes JPMorgan Chase & Co. $12.9 million, according to the filing, and Bank of America Corp.’s Countrywide and credit-card units a combined $4.2 million.

Dykstra also owes almost $1 million to jet charter services, about $342,000 to celebrity lawyer Daniel Petrocelli and $229,000 to literary agent David Vigliano.

UPDATE: I missed this last month. Former Cleveland Browns QB Bernie Kosar filed for Chapter 11.

Posted by Jay Hancock at 12:06 PM | Permalink | Comments (1)
Categories: Personal Finance
        

The star of Ned Kelly, who sold Baltimore's Mercantile Bankshares to PNC Financial, seemingly continues to rise at troubled Citi. Kelly had been head of global banking at the New York financial giant up until March, when he was named chief financial officer to replace Gary Crittenden. Now Crittenden, who became chairman of Citi Holdings, is out. And Kelly is becoming vice chairman. From AP:

Crittenden is leaving the company to spend more time with his family and pursue other business interests, Citigroup said in a statement.

Aside from his departure, Citigroup said Edward Kelly, who had been serving as CFO since Crittenden switched positions, will become vice chairman of Citigroup. Kelly will take on responsibilities for strategy and mergers and acquisitions in the new position.

John Gerspach will assume the role of CFO, becoming Citigroup's third CFO this year. Gerspach previously served as controller and chief accounting officer at Citigroup.

Hard to tell what it means. Often promotion to vice chairman is actually a demotion, a way of putting out to pasture whom you don't want to fire. The CFO slot at Citi is still one of the most prestigous positions in finance. But if Kelly really does have power to steer strategy instead of just sitting in meetings where strategy is discussed, he'll be a player.

Posted by Jay Hancock at 10:45 AM | Permalink | Comments (0)
Categories: The Great Recession
        

Agence France-Presse wrote this earlier this week:

Some Democrats have hinted they may favor a second stimulus measure, drawing sharp attacks from Republicans that the giant package approved months ago had demonstrably failed to create or save jobs and turn the US economy around.

"I think it's certainly too early right now... to say, you know, it's not working. In fact, we believe it is working," said Hoyer, who hails from Virginia.

Maryland is not Virginia. This column says so.

Posted by Jay Hancock at 8:15 AM | Permalink | Comments (0)
        

Jeffries & Co. published a report today saying that a rejection by the Public Service Commission of Electricite de France's proposal to buy half of Constellation Energy Group's nuclear energy business would prevent CEG from building new generators. CEG owns Baltimore Gas and Electric. Some highlights:

If the JV [joint venture] were not approved, the balance sheet of Constellation and BG&E will not support new investment. Instead, the companies will need to use surplus cash to pay down debt.

• BG&E would be unable to build or contract for new generation
because of balance sheet constraints. Although the electric utility
re-regulation proposal would require BG&E to build new power
plants, the utility would need to dedicate its surplus cash generation
to debt pay-down in order to preserve its credit rating.

• Among the projects which BG&E would likely have to abandon
would be the proposed new nuclear power plant at the Calvert
Cliffs site.

I don't know why they're confusing BGE and CEG. The proposed Calvert Cliffs nuclear unit would be built by Constellation, not BGE. But the overall analysis stands. Constellation, after its near-death experience last year, needs outside capital to build plants. Or an order from the PSC that would build capital costs into BGE's rates for residences and businesses.

Posted by Jay Hancock at 12:37 PM | Permalink | Comments (1)
Categories: BGE/electricity
        

From This Is Why You're Fat. HT Carla.

Posted by Jay Hancock at 10:15 AM | Permalink | Comments (1)
Categories: Health Care
        

Alec MacGillis asks the crucial question in today's Washington Post:

The bills being written would put new emphasis on evaluating treatments according to their "comparative effectiveness," or weighing the risks and benefits of different types of treatment for the same illness, but the bills stop short of incorporating cost-benefit analyses into the findings or of requiring that providers abide by conclusions.

Lawmakers are also considering ways to reform Medicare payments to emphasize the overall quality of care over the quantity of treatments. But lawmakers are not going as far as Massachusetts did; it is considering shifting entirely from a fee-for-service model to one where salaried physicians would be paid an overall annual price for covering a given person or family.

Posted by Jay Hancock at 10:04 AM | Permalink | Comments (4)
Categories: Health Care
        

I'm sorry. Gmail may be out of beta. Google Docs most definitely is not. That is all.

Posted by Jay Hancock at 8:33 AM | Permalink | Comments (0)
Categories: Technology & Innovation
        

The Federal Energy Regulatory Commission has done a state-by-state analysis of the potential for "demand response" mechanisms to cut peak electricity use. Demand response involves incentives and other measures to get people to use less juice. Part comes from agreements like BGE's Peak Rewards plan, which pays households that allow BGE to cycle off their air conditioning at critical times. Demand response will also eventually come from response to price signals. Peak-use electricity is very expensive; on really hot days the price for electrons can jump 20- or 50-fold for a few minutes. Yet the customer has no sensitivity to these spikes because the meters aren't sophisticated enough. The AC stays turned on no matter how expensive the electricity gets.

Eventually "smart" meters will put households at risk for incurring high charges for peak-demand electrons. Adjusting and cutting down shouldn't change you lifestyle much. You should be able to program your meter/thermostat to shut down the AC when megawatt hours reach a certain outrageous price -- say, $100 per megawatt hour. In theory that would leave your unit off for only a few minutes and not enough that you would notice much. And if everybody does it it makes a huge difference for pressure on the grid.

The FERC study finds that Maryland has enormous potential to cut peak demand by virtue of the fact that it already has some peak demand programs in place and the fact that it has a high concentration of central AC among households.

Says FERC:

Ranked by demand response potential as a fraction of peak demand, Connecticut, Maryland and Maine are highest; each has substantial amounts of existing demand response, Maine has an above-average share of peak demand in the Large commercial and industrial customer class, and Maryland has a relatively large amount of residential central air conditioning.

Maryland, the agency says, could cut peak demand by 28 percent by 2014 and an amazing 32 percent by 2019. Not only will that reduce pollution. It will ease upward pressure on electricity prices and reduce the need to build generators.

Posted by Jay Hancock at 8:13 AM | Permalink | Comments (1)
Categories: BGE/electricity
        

Despite the death, horror and heartache he sowed across two nations, I respected and appreciated Robert McNamara's attempts to question and ultimately condemn what he had done. Self-doubt is a hallmark of the honest man. Penitence is a foundation-stone of religions, a lesson to others and a way toward spiritual peace. From the NYT obit:

In 1995, he took a stand against his own conduct of the war, confessing in a memoir that it was “wrong, terribly wrong.” ...

Most public officials will never come close to being so candid. I certainly never expect it from Dick Cheney.

Posted by Jay Hancock at 11:17 AM | Permalink | Comments (7)
        

I have received a fair amount of email about last week's column that said:

You don't need to be a lawyer to understand how Gov. Martin O'Malley's Public Service Commission is flouting the law. Rarely is the difference so bright between what is permitted and what is perpetrated.

The law, signed by O'Malley in April 2008, lets the commission review deals by electric utility owners only if a transaction would give somebody at least a fifth of the shares or a fifth of the board seats at the owner corporation. The red, octagonal "STOP" sign at the end of my street is a similar example of clear legal language.

But the commission claims the power to reject Electricite de France's plan to invest in BGE parent Constellation Energy even though the French company would get only one out of more than 10 board seats and owns fewer than 10 percent of the shares. The decision demonstrates stunning bad faith by Maryland as well as O'Malley's increasing desperation to be seen as keeping campaign promises to lower electric prices.

Readers want more legal background. Here is the full language of the law passed last year by the General Assembly. Here are the relevant paragraphs:

(2) FOR THE PURPOSES OF THIS SUBSECTION, A PERSON MAY NOT BE CONSIDERED TO HAVE ACQUIRED, DIRECTLY OR INDIRECTLY, THE POWER TO EXERCISE ANY SUBSTANTIAL INFLUENCE OVER THE POLICIES AND ACTIONS OF A GAS AND ELECTRIC COMPANY IF THE PERSON: (I) AFTER ANY ACQUISITION OF VOTING INTERESTS OF A COMPANY THAT OWNS OR CONTROLS A GAS AND ELECTRIC COMPANY, DIRECTLY OR INDIRECTLY, OWNS, CONTROLS, OR HAS THE RIGHT TO VOTE, OR DIRECT THE VOTING OF, NOT MORE THAN 20% OF THE OUTSTANDING VOTING INTERESTS OF A COMPANY THAT OWNS OR CONTROLS A GAS AND ELECTRIC COMPANY; AND (II) DOES NOT HAVE THE RIGHT TO DESIGNATE MORE THAN 20% OF THE BOARD OF DIRECTORS OR OTHER GOVERNING BODY OF A COMPANY THAT OWNS OR CONTROLS A GAS AND ELECTRIC COMPANY.

Here is the full text of the commission's order that begins:

In this Order, the Public Service Commission finds that Electricité de France International, SA (“EDF”)1 would, upon completing a proposed transaction with Constellation Energy Group, Inc. (“CEG”), “acquire, directly or indirectly, the power to exercise … substantial influence over the policies and actions”2 of CEG’s wholly-owned subsidiary, Baltimore Gas and Electric Company (“BGE”).

Here is how the commission lamely explains its decision to take jurisdiction even though the law says it lacks it:

CEG argues that the “safe harbor” ends our review of this transaction because EDF is acquiring neither voting interests that would take its holdings above 20% nor the right to designate more than 20% of the CEG Board of Directors. We find that the plain language of (e)(2) compels exactly the opposite conclusion: because EDF will, in the proposed transaction, acquire rights and assets other than voting interests in CEG, the “safe harbor” does not and cannot apply. Once a proposed transaction includes elements other than acquisition of stock and board designation rights, it no longer is eligible for the (e)(2) exception.

Stock ownership and board votes are the alpha and omega of substantial control. All corporate law is predicated on the notion that the people who own companies and the boards that supervise them are the controlling entities. This PSC sentence -- "Once a proposed transaction includes elements other than acquisition of stock and board designation rights, it no longer is eligible for the (e)(2) exception." -- is Orwellian in its casual assertion of omnipotence. By such logic, if Constellation wanted to give an ice cream party for EDF or another business partner, the PSC could block the deal.

Judge Berger's dismissal last week of Constellation's challenge to the PSC's authority does nothing to change this argument. He didn't rule on the merits of the case.

Posted by Jay Hancock at 10:44 AM | Permalink | Comments (3)
Categories: BGE/electricity
        

BGE has posted its monthly update for natural gas prices. The price edged up from 57.05 cents per therm in June to 61.71 cents for July. At 62 cents it's only 40 percent of its price from last July, which was $1.58.

Last month I published a column saying that energy prices might be heading up and that you might want to sign up for WGES's fixed-price natural gas deals, even though they're substantially pricier than what BGE has been charging month to month. But the column was wishy washy.

"Based on what we're seeing so far, we would expect this winter's gas to probably be a little lower than last winter, but it's going to be higher than what we see right now," said Ronald T. Jennings, BGE's director of gas supply.

Is that reason enough to lock up your own supply, separate from what BGE will offer? (BGE is always your electric and gas delivery company, but suppliers can vary.) The best natural gas deal out there is from WGES (see phone number above), letting you buy for a year at 73 cents and two years at 84 cents.

While substantially higher than today's price, those deals - especially the two-year package - will look good if the economy recovers in a robust way. If prices of $1.20 or $1.50 per therm would make a distressing dent in your budget, the two-year WGES deal is the way to go.

I haven't locked in with WGES or anyone else for natural gas. I'm betting the economy will continue to be weaker than many expect. And I'm betting against another Hurricane Katrina, which disrupted gas production and shipment and caused prices to spike for the winter of 2005/2006. But energy prices seem to be sensitive to even subtle signs of economic growth, and it's not a clear call.

Posted by Jay Hancock at 9:19 AM | Permalink | Comments (2)
Categories: BGE/electricity
        

The always-astute Megan McArdle offers the best explanation I've heard.

I find it hard to believe that none of the liberal commentators breathlessly celebrating Wal-Mart's "capitulation" on national health care have even entertained the most parsimonious explanation: that Wal-Mart is in favor of this because it raises the barriers to entry in the retail market, and hammers Wal-Mart's competition. Yet somehow, this appears nowhere in any of the analysis.

Posted by Jay Hancock at 8:33 AM | Permalink | Comments (1)
Categories: Health Care
        

Mike Allen reports:

For $25,000 to $250,000, The Washington Post is offering lobbyists and association executives off-the-record, nonconfrontational access to "those powerful few" — Obama administration officials, members of Congress, and the paper’s own reporters and editors.

The astonishing offer is detailed in a flier circulated Wednesday to a health care lobbyist, who provided it to a reporter because the lobbyist said he feels it’s a conflict for the paper to charge for access to, as the flier says, its “health care reporting and editorial staff."

Posted by Jay Hancock at 9:31 AM | Permalink | Comments (4)
        

Today's column begins:

You don't need to be a lawyer to understand how Gov. Martin O'Malley's Public Service Commission is flouting the law. Rarely is the difference so bright between what is permitted and what is perpetrated.

The law, signed by O'Malley in April 2008, lets the commission review deals by electric utility owners only if a transaction would give somebody at least a fifth of the shares or a fifth of the board seats at the owner corporation. The red, octagonal "STOP" sign at the end of my street is a similar example of clear legal language.

But the commission claims the power to reject Electricite de France's plan to invest in BGE parent Constellation Energy even though the French company would get only one out of more than 10 board seats and owns fewer than 10 percent of the shares. The decision demonstrates stunning bad faith by Maryland as well as O'Malley's increasing desperation to be seen as keeping campaign promises to lower electric prices.

Here is the relevant language from the law. Like I said, clear as day:

FOR THE PURPOSES OF THIS SUBSECTION, A PERSON MAY NOT BE CONSIDERED TO HAVE ACQUIRED, DIRECTLY OR INDIRECTLY, THE POWER TO EXERCISE ANY SUBSTANTIAL INFLUENCE OVER THE POLICIES AND ACTIONS OF A GAS AND ELECTRIC COMPANY IF THE PERSON:

(I) AFTER ANY ACQUISITION OF VOTING INTERESTS OF A
COMPANY THAT OWNS OR CONTROLS A GAS AND ELECTRIC COMPANY, DIRECTLY
OR INDIRECTLY, OWNS, CONTROLS, OR HAS THE RIGHT TO VOTE, OR DIRECT
THE VOTING OF, NOT MORE THAN 20% OF THE OUTSTANDING VOTING
INTERESTS OF A COMPANY THAT OWNS OR CONTROLS A GAS AND ELECTRIC
COMPANY; AND

(II) DOES NOT HAVE THE RIGHT TO DESIGNATE MORE THAN
20% OF THE BOARD OF DIRECTORS OR OTHER GOVERNING BODY OF A COMPANY
THAT OWNS OR CONTROLS A GAS AND ELECTRIC COMPANY.

Posted by Jay Hancock at 10:26 AM | Permalink | Comments (10)
Categories: BGE/electricity
        

Nexis, the news and legal database company (to which The Sun has a subscription) has helpful hints!

Under the category, "How Do I Find Negative Information in the News?", Nexis says to enter the name of a person or company and then try the following search terms. (The "!" sign is a wildcard for truncation searches. For example "investigat!" hits on investigated, investigation, investigate etc.):

Enter abus! or accus! or alleg! or arraign! or arrest! or assault! or attack! or bankrupt! or beat! or breach! or brib! or ( chapter pre/1 7 or 11 ) or charg! or conspir! or co-conspir! or convict! or corrupt! or court! or crime or criminal! or critici! or deceiv! or decept! or defendant or defraud! or denied or deny or disciplin! or discrim! or distort! or embattled or fraud! or guilt! or harass! or illegal! or incriminat! or indict! or inside! info! or insolv! or investigat! or judgement or judgment or launder! or liquidat! or litigat! or manipul! or misappropriat! or misconduct or misdeme! or mismanag! or misrepresent! or negligen! or offen! or probat! or prosecut! or racketeer! or revocation or revoke* or risk! or sabotag! or sanction! or scam! or scandal! or separat! or steal! or stole* or sued or suing or suspen! or terroris! or theft or threat! or unlawful! or verdict or violat! or violen! in the blank search field directly below the previous drop-down boxes

They left out scumba! and slimebuck! and sleaz!

Posted by Jay Hancock at 1:38 PM | Permalink | Comments (0)