March 21, 2018

RM3: Just say NO to the deeply flawed San Francisco Bay Area $3 bridge toll hike measure.

San Francisco Bay Area Proposed $3 Toll Hike.

Just say no to stupid.  And this measure - RM3 - awaiting Bay Area voters at the June polls is really, really stupid.

San Francisco Bay Area voters get to vote on yet another California-government-needs-more-and-more-revenue measure at the June 2018 primary polls.  Regional Measure 3 – otherwise known as RM3 – would hike tolls on state-owned Bay Area bridges by $3.

But in perspective, this $3 toll increase would increase the Bay Bridge toll to $9. 
Wanna guess what the Bay Bridge Toll was when I moved here in 1994?

Yes.  $1.  So RM3 represents a 900% toll increase from the $1 I paid when I moved here.

Just say NO to Regional Measure 3 (RM3)
It will NOT relief any traffic.
But it WILL relieve weight from your wallet in the form of a $3 bridge toll hike!
Wanna know what’s even worse?  Almost none of the money from SB3 will be spent on Bay Area Bridges.  Ya know, those same bridges that demand the tolls to pay for the measure for which the bridges receive almost no benefit.  (That’s a mouthful, isn’t it?)  Here is a breakdown of where the money from SB3 will – ostensibly – go:

To add more looniness to this discussion, the Editorial Board from the East Bay Times (my supposed local newspaper, although the EBT is generally anything but local for me in reporting anymore) is supporting this wackadoo measure.  Even though the newspaper's own analysis shows that SM3 is "deeply flawed".

Got that?!  (Read the EBT's editorial in support of this admittedly "deeply flawed" measure, and many online comments, here.)

To summarize the EBT Editorial Board's support for SM3, they more-or-less advocate voting for this - as they admit - "deeply flawed" bill because it is an easy way to suck more money out of Bay Area bridge commuters.  (Requires only a simple majority of yes votes to pass, rather than a supermajority.)  The Editorial Board advocates voting on this - as they admit themselves - "deeply flawed" bill simply "[b]ecause we must do something".

Has the EBT Editorial Board lost its collective editorial mind? Apparently so.

Bay Area Public Transportation is Worthless Joke
And Money from SM3 Will Not Force People Out of their Cars and into Public Transportation

And no, increasing bridge tolls will not automatically equate to more people taking public transportation, as the EBT Editorial Board promotes.  Reason?  It's really very simple:  Bay Area public transportation often does not take you where you need to go. It often does not take you where you need to go when you need to go there, or otherwise do so in a timely manner. Take this morning, for instance.  Two BART train stations shut down in SF.  How's that for "reliable" public transportation?

Take this public transportation example from today at 10 AM.   If I need to get to the County Courthouses in Martinez from my Pleasant Hill home (distance = 11.1 miles), the trip by car would take an estimated 19 minutes.  If I solely use public transportation, the same trip would take an estimated 1 hour and 21 minutes to 1 hour and 41 minutes.  The public transit trip (depending on the route) would involve 1 to 1.75 miles of walking, and multiple bus and/or BART rides.  That is simply crazy!

More California Loony Politics!  Will be barrel ever get empty?

About Mary Rae Fouts, EA

Mary Rae Fouts, EA provides tax, insurance consulting, and expert witness services to clients who have technical or complex concerns.  For more information visit

Mary Rae Fouts

March 20, 2018

Toys 'R' Us Bankruptcy Moves onto Chapter 7 Liquidation. Once again, history repeats itself with disastrous private equity firm ownership.

Toys 'R' Us Chapter 7 Bankruptcy.

The once-storied American toy store Toys 'R' Us declared Chapter 7 liquidation bankruptcy last week.  Today is the company's first hearing in Bankruptcy Court, where Toys 'R' Us will attempt to defend its bankruptcy plan from a hurricane force list of objections from creditors.  The top three unsecured creditors are reportedly Bank of New York (owed $206.3 million), followed by Mattel (owed $135.6 million), and Hasbro (owed $59 million).

Heck, Toys 'R' Us was even brazen (or dumb) enough to open a brand new store near me in Concord, CA ... in late October 2017, shortly after declaring Chapter 11 bankruptcy.  And the brand new Concord, CA Veranda Mall where the store opened was just as inept to allow a store in Chapter 11 Bankruptcy to move in as a prime tenant.

I forecasted Chapter 7 Liquidation Bankruptcy for Toys 'R' Us last year, after the company declared Chapter 11 Reorganization Bankruptcy; my September 20, 2017 blog post is pasted below.  And I didn't need a crystal ball to forecast the Toys 'R' Us Chapter 7 Bankruptcy, either.
" ... I just don't see Toys 'R' us staying away from a future Chapter 7 liquidation bankruptcy."   -- Mary Rae Fouts; September 20, 2017
What happened?  Well, history simply repeated itself.  Once again, nothing much good happened to public company - in this case, Toys 'R' Us - after it was taken private by a private equity company and a real estate trust.

For background on the all-but-certain-to-happen demise of Toy 'R' Us, read my blog post from September 20, 2017 below.
﹏  ﹏  ﹏  ﹏  ﹏  ﹏  ﹏  ﹏  ﹏  ﹏  ﹏  ﹏

Did competition in the toy industry drive Toys 'R' Us into Chapter 11 bankruptcy, or was the main culprit something else?

Sure, toy industry competition play a part.  But I think the main culprit was something else.

And that something else is private equity firm ownership.

Contrary to some people's belief that Toys 'R' Us is a publicly-traded company, it is privately held by an investment group consisting of private equity firms.  Toy 'R' Us was a publicly traded company from 1978 through 2005, when an investment group (Bain Capital Partners LLC, Kohlberg Kravis Roberts & Co., and real estate investment firm Vornado Realty Trust) took the company private by purchasing it for $6.6 billion.

Notice the purchase participation of a real estate investment firm?  Much of Toys 'R' Us' acquisition was based not on the chain's store operations and sales, but rather on the value of the company's real estate.

What has happened to Toys 'R' Us since then?  Not a lot of good.

Since Monday's Chapter 11 (reorganization) bankruptcy, the company has been very careful with its selection of words to explain its actions.  It has stated it "expects" to continue honoring warranties, return policies, and gift cards.  Expects?  Expects is not a very comforting word for those on the other end of a bankruptcy proceeding, including the company's 60,000 plus employees.

And about those employees, they have previously been given the middle finger by Toys 'R' Us' private equity owners.  Heck, 2 years ago, 67 New Jersey based Toys 'R' Us employees, skilled employees who worked primarily in the company's accounting division, were fired and replaced by imported workers from India using H-1B Visas.  To add to the indignity of being fired, the New Jersey based Toys 'R' Us accountants  were forced to train their Indian replacements before being shown the door.  Read about this crass stick-it-to-loyal-employees move in this New York Times article.

And I concur with analysts who have deep concerns about the future viability of Toys 'R' Us.  The company is drowning in a whopping $5 billion in acquisition-related debt.  Much of this debt obligation was due payable this year, which likely helped triggered the Chapter 11 bankruptcy filing.  Then, of course, there is the hyper online and brick and mortar competition in the toy industry.  With that combination of factors, I just don't see Toys 'R' us staying away from a future Chapter 7 liquidation bankruptcy.

Toy manufactures seem to concur, too.  They are demanding cash payment up front ... cash, baby, cash ... before shipping any toys to Toys 'R' Us.  This demand recently required Toys 'R' Us to secure $1 billion in financing for pre-payment of toy orders.  And with the upcoming holiday season, this prepayment demand debt is only going to get worse.

Is the Toys 'R' Us situation unique?  Nope.  Similar situation happened to the former San Francisco Bay Area based clothing chain Mervyn's.  Mervyn's was taken private when it was acquired by a group of private investment firms including Sun Capital Partners, Cerberus Capital Management, and real estate investment firm Lubert-Adler Management.  But you see, the investment group didn't purchase Mervyn's based on the company's store operations and sales, but rather for the value of Mervyn's real estate portfolio.

Yep, for the value of the Mervyn's buildings.  Notice the similarity to the Toys 'R' Us privatization?

And what happened?  You guessed it.  A mere 4 years later, Mervyn's filed for Chapter 11 bankruptcy, followed by full liquidation through a Chapter 7 bankruptcy.

Mervyn's.  Toys 'R' Us.  Equity firm ownership.  Value of company's real estate.  Sounding familiar?

Ah, history.  Those who fail to learn from history are doomed to repeat it.

About Mary Rae Fouts, EA

Mary Rae Fouts, EA provides tax, insurance consulting, and expert witness services to clients who have technical or complex concerns.  For more information visit

Mary Rae Fouts

March 12, 2018

Sourdough Pizza for Dinner Tonight!

Sourdough Pizza.

Stuffed Crust Sourdough Pizza for dinner tonight.  Just what I needed after not feeling well today.

Pizza baked on Lodge cast iron pizza pan.  Dough made with my stiff sourdough starter (unbleached bread flour and spring water), Caputo Soft Wheat Flour Tipo 00 (first time working with this flour), spring water, local honey, kosher salt, Italian seasoning.  Dough spent 72 hours in the fridge.

Finished pizza included a stuffed crust (Swiss cheese).  Crust par baked at 350*F Convection oven, then topped with Sugo di Pomidoro pizza sauce, bacon, sauteed organic green onion and red bell pepper, fresh organic spinach, dry salami, mozzarella cheese.  Baked until done.

My husband and I both agreed this was the best Sourdough Pizza I've ever made.  The Caputo Soft Wheat Flour is a winner; paired exceptionally well with the nutty Swiss cheese in the stuffed crust.

Want some?  

Finished Sourdough Pizza.

Stuffed Crust Sourdough Pizza before placing in the oven.

Par baked pizza crust before topping.

Bacon and sauteed organic green onion and organic red bell pepper.

The Caputo flour I used.  A winner!

About Mary Rae Fouts, EA

Mary Rae Fouts, EA provides tax, insurance consulting, and expert witness services to clients who have technical or complex concerns.  For more information visit

Mary Rae Fouts

March 9, 2018

Amazon's Alexa Goes Down ... How did people survive?


Amazon's Alexa
Last week, Amazon's popular electronic gadget Alexa went down during a widespread Amazon Web Services outage.   Yes, Alexa was silenced; read about the outage here.  I had to laugh about the social media panic-fueled coverage Alexa's outage prompted.  I mean, do some people actually need Alexa (and social media) to even function in life?

Not me.  I'll stick with my paper planner and hand written notes, thank you very much.

About Mary Rae Fouts, EA

Mary Rae Fouts, EA provides tax, insurance consulting, and expert witness services to clients who have technical or complex concerns.  She does not own an Alexa or any other similar talking device.  For more information visit

Mary Rae Fouts

March 7, 2018

America's Productivity Problem: Turns out that Bitcoin is just part of the problem.


Turns out that people's addiction to Social Media isn't the only reason for problems with America's productivity.

We can blame Bitcoin, too.

This fascinating New York Times article (read it here) looks at the crypto currency Bitcoin and its influence on America's productivity, as well as Bitcoin's enormous use of electricity.  The article also points out another startling statistic:
Roughly 20% of adults in the United States, who are in their prime working years and are not otherwise disabled, are neither working nor actively looking for work. Those people are not included in the published federal unemployment rate.
Just think about that.  If we were to include that 20% segment of the United States adult population, the true unemployment rate would not be 4.1 % (the latest available government published national unemployment rate, as of October 2017), but nearly 25%.

Yes, a true United States federal unemployment rate of nearly 25%.

And to think I grew up with a rotary dialed telephone and a small TV with an attached antenna and manually dialed channel selector.  And we actually walked to school.  Today's younger generations probably wonder how us 50 plus year olds survived!

About Mary Rae Fouts, EA

Mary Rae Fouts, EA provides tax, insurance consulting, and expert witness services to clients who have technical or complex concerns.  For more information visit

Mary Rae Fouts