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WHEREVER IT TAKES: A $.25 Execution: San Francisco's Musee Mecanique

Witnessing an execution in San Francisco only costs a quarter. For the paltry fee you’re placed steps away from the guards, the creaking wooden doors and the hangman himself. Lest you think the scene a bit morbid, remember to bow your head when the friar administers last rites to the poor soul about to meet his maker at the end of a rope. Before you can blink, the scaffolding trap door falls, the criminal drops, the line goes taught and the lights go out — quite literally. 

As you step back from the grim scene, now shrouded in darkness, you’re not thinking about the fragility of life or the consequences of wrongdoing. You’re simply wondering what else $.25 can get you in the Bay Area.

Conveniently enough, right next door to the execution are hundreds of possibilities. How about a game of baseball? A trip to a shooting range? Or even a private serenade by a mariachi band composed entirely of monkeys?

Fisherman’s Wharf tickles every sense but no experience does so with such unexpected nostalgia and eerie sense of humor as the Musee Mecanique (The Mechanical Museum for all you non-Parisians). This waterside warehouse is lined from front to back with mechanically operated old-fashioned arcade games, musical instruments and miniature scenes. Music boxes from the 1890s, gypsy fortunetellers from the 1930s and The Bimbo Box, a 1958 jukebox from Germany that plays “Tijuana Taxi” while a chorus of sombrero-clad monkeys strum along.

Or if your comically sadistic side comes out (as mine did), pop a quarter into one of the several mechanical miniature execution scenes. Having just been to London, I of course chose the probably historically inaccurate Tower hanging, but by all means don’t hesitate to check out the French guillotine a few rows away.

The first of my four days in San Francisco afforded the opportunity to explore at a relaxed pace. The Golden Gate Bridge could wait; the nighttime Alcatraz tour was scheduled for tomorrow. We strolled along the waterfront Embarcadero all the way to the famous Pier 39, taking in the barking sea lions and the smell of Boudin’s sourdough. We even sat along the water with a Boudin’s loaf and a cup of clam chowder from a stall on what I call Crab Row.

Around the Wharf the salty smell of the sea battled with the savory smell of bread and the sweet smell of Ghirardelli square for nasal dominance.

But it was the dusty, old wooden scent that caught my attention most. Skirting the front of Pier 45, before the working section of the Wharf juts out into the bay like a pair of arms waiting to grab the day’s catch, sits an unassuming white warehouse. A small sign above the door just says “Arcade” and if you weren’t looking you might not see the banner that says, “Musee Mecanique” high up on the building’s façade. But it was the smell that made me wonder at what was inside. It reminded me of my grandparent’s attic. When I peeked in the door and saw the old fortuneteller stand, like the one in the movie “Big,” I immediately lapsed into my favorite travel philosophy.

When you think you should bypass something, when you think no is the right answer, go in and say yes. Sometimes it backfires (restaurants are a good indicator at how good your spontaneous judgment is). But more often than not, you stumble into the best experience of your day.

In our society of overpriced time-wasters, the level of entertainment inside the Musee Mecanique comes at a virtual clearance sale bargain. There is no admission fee but plenty of change machines. You’ll have to dodge the children running for the newer arcade games at the rear of the warehouse room. But it frees up the endless rows of tinkering, hand-painted wooden and metal machines.

The interactive pieces are resolutely intriguing, absolutely entertaining. I hit a double in a pinball-esque baseball game and scored 10 points in the Junior Deputy Sheriff shootout. I cringed at some of the creepy dolls behind glass and there wasn’t a chance I was putting a coin in to see what they did. If I wasn’t two days away from my first wedding anniversary, I might’ve peeked into one of the numerous early-1900s, peep show Cali-O-Scopes that show risqué pictures of clothed women. I’d say that their definition of XXX is a bit outdated.

The only hint of disappointment was that the 1920s version of Rock-em Sock-em Robots was temporarily out of order.

After the wistful wooden aroma, the first thing that awes you is the craftsmanship. The intricate detail laced throughout the old Western scene or the elves in Santa’s workshop come straight out of a Norman Rockwell painting. When you put a coin in and you hear the mechanisms shift, the metal parts invisibly clanking inside, it’s hard not to be amazed that these hundred-year-old gears still turn.

This city is famous for the massive, man-made bridge spanning the bay. But the real wonders of San Francisco are the smaller ones that span generations.

When the lights clicked off on the execution site, a puppet had lost its life for the thousandth time. And for another quarter, the sombrero-clad monkeys next door played him a tinkering funeral march.

Mike Hartigan, a graduate of St. John’s Prep (class of 2000) lives in Saugus. Mike is a writer and traveler and goes wherever it takes to find a good story.Follow along at http://www.whereverittakes.com or on Twitter @WhereverItTakes.

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WHEREVER IT TAKES: A $.25 Execution: San Francisco's Musee Mecanique

Strategy Snapshot: Budget Rental Coinstar Bull Vertical

In front of tonight’s earnings release, shares of coin and DVD kiosk outfit Coinstar (NasdaqGS:CSTR - News) were up about 2.15% in volatile trade. Analysts expect profits of $0.64 per share compared to the year ago period’s $0.68 on sales of $498.48M versus $391M. At the same time, the latest action from those pros has boutique Compass Point cutting shares to “Neutral” today due to Coinstar’s joint venture with Verizon which looks to add both cost and uncertainty near-term as its business approaches saturation and eventually falls victim to an obsolete technology.

Despite such headwinds, bulls have been putting fresh coin into the options and feeding the February contract. Calls have outpaced puts by a 3-to-1 margin on heavy overall volume approaching 25,000 contracts. The action has forced at-the-money implieds to rise towards 100% and their highest levels in more than two years. That said, premiums are prone to a volatility crush that we’d conservatively estimate in the mid-40s to 50% IV.

Figure 1: Coinstar (NasdaqGS:CSTR - News) Implied Volatility

For traders feeling optimistic and aligned with today’s order flow in Coinstar’s options, a short-term budget rental position of sorts that’s obviously not a keeper in the family library, but one which makes better sense and cents of the situation, is a bull vertical spread.

By executing a vertical, the fore-mentioned crush risk can be easily averted or cut down radically depending on the position’s strikes in relation to each other, as well as the underlying shares of CSTR. With 2.5 point strikes there’s more than a handful of variations to for the softer long delta strategy when mulling calls or puts and keeping the strikes to the nearby or surrounding money variety.

Figure 2: Coinstar (NasdaqGS:CSTR - News) Bull Call Vertical

One illustrated variation of a short-term bull call spread is the February 50 / 52.5 vertical. This particular vertical will require a bit of upside from shares but flattens out vega risk to nearly zero with the stock near 50.80. The current cost is $1.15 per contract which yields a max payout of $1.35. This return of nearly 117% could be realized if shares rally by about 3% and remain above 52.5 at expiration. At the same time, a breakeven of 51.15 would need just 0.8% of upside from CSTR shares.

For sizing on a hypothetical $20K portfolio, given the potential for undesirable gap risk, we see 1% rather than 2% to 3% of one’s capital as more approachable when considering an earnings situation. As this relates to our bull vertical above, this works out to two spreads. In the end, this type of standalone budget rental agreement won’t produce a profit blockbuster in the trading account. However, its sparing use and some consistency with its execution can add to the bottom-line over the course of the trading year—and without having to sweat the occasional dud that’s all but unavoidable for this sort of thing.

 

Chris Tyler
Senior Options Writer, former Market Maker & fulltime Option Hedge Hog Advocate
Optionetics.com ~ Your Options Education Site
Visit Chris Tyler’s Forum
 
The information offered here is based upon Christopher Tyler’s observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual. 

 

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Strategy Snapshot: Budget Rental Coinstar Bull Vertical

Manx2 Offers to Help Southampton Passengers

by Isle of Man Advertising

Following the shock news that the Isle of Man will lose its direct Southampton service and its Brussels connection at the end of this month, Manx2.com is stepping in to ensure visitors from the South of England can still get a direct flight to the Isle of Man.

Any passengers who were booked to travel to the island from Southampton are being offered the opportunity to re book onto a Manx2.com flight from Gloucester (M5) airport or onto its new London Oxford service for £1 less than they originally paid for a ticket from Southampton.

Manx2.com Managing Director, David Buck, said: "Protecting access to the Isle of Man and maintaining visitor numbers is crucial to the economy in these difficult times. We want to ensure that no one has to cancel their plans to visit the Island and both Gloucester (M5) and London Oxford airports have great, fast, road access. Gloucester also has 20 minute check-in and free parking.  So, with our offer to rebook passengers onto one of our direct flights for £1 less than their original fare, we hope to save visitors time and money and get every trip to the Isle of Man off to a great start."

To rebook tickets, passengers should email their booking confirmation to reservations@manx2.com and Manx2.com will take it from there.

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Protecting access to the Isle of Man and maintaining visitor numbers is crucial to the economy in these difficult times."

David Buck, Manx2.com Managing Director

In Other Isle of Man News

If you'd like to send any information or news releases to us then please feel free to do so and we would be more than happy to consider sharing your news with the Isle of Man!

Send your Isle of Man news to:webmaster@manx.net

© Manx Telecom Ltd 2012

Manx Telecom Ltd, Isle of Man Business Park, Cooil Road, Braddan, Isle of Man IM99 1HX
Registered in the Isle of Man Reg no.5629V Vat Reg no GB 003-2919-12

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Manx2 Offers to Help Southampton Passengers

Another World Champion to Guest at Sports Awards Ceremony

by Colin Brown

Former World Superbike Champion James Toseland is to be the Guest of Honour at the 2011 Sports Awards sponsored by Isle of Man Bank.

James – who lives on the Island – had a successful career in Superbikes before graduating to MotoGP which is the cream of motorcycle racing.  Unfortunately, he injured his right wrist, badly, early last year in a crash while testing at Aragon in Spain.  This ultimately led him to announce his retirement from the sport last September.

Before bowing out of motorcycling James ensured he would go down in history as one of the ‘greats’ by becoming the youngest-ever Superbike World Champion and securing the title for Ducati in 2004.  He said goodbye to World Superbikes after again lifting the World crown in 2007 and moved up to MotoGP.

Geoff Karran, executive chairman of Isle of Man Sport – which hosts the sports awards ceremony – said: ‘We are delighted to have James as our Guest of Honour.  We do try and make sure we attract sportsmen and women from different sports and it is appropriate that at long last we will have a motorcyclist as guest on this most important night for sport.  I am sure James will be an inspiration to all our young sports people and will join us in making this a wonderful celebration of sport – where we can all be proud to be Manx.’

James (31) is an accomplished pianist and singer and, before his motorcycle successes, had considered a professional career in that form of entertainment.  He is now expected to resume the musical side of his life – particularly as he is engaged to singer Katie Melua.

John Lindon, Isle of Man Bank’s Community Investment Manager, said Isle of Man Sport continued to attract the biggest names in their fields to be the official guests of honour.  He added: ‘James will be the first motorcycling star to grace the event.  Given the Island’s reputation, not only as a mecca for motorcyclists but also as a production line for locally-grown talent, I am certain his presence will be eagerly anticipated.

‘James is well known as a very fine musician and it will be interesting to see whether he drops some hints as to the way his music career might develop now he has retired from the motorcycling scene.’

Doncaster-born Toseland announced his retirement in a letter, to his fans, on his website.  He explained that during his first meeting with his consultant after the crash in Spain he was warned that the damage to his wrist could be career-threatening.  Following a further crash at Nurburgring in Germany he returned to the consultant and was given the bad news.

He said: ‘The easiest way to explain it is that I don’t have enough range of movement in my wrist to race professionally and no amount of physiotherapy is going to improve that.  It all led to the verdict that it was no longer safe for me to continue a career in motorcycle racing.  I have to put the safety of the other riders on the track first, as well as thinking about my own.’

The sports awards evening takes place at the Villa Marina on Thursday March 29th with the usual categories and culminating with the presentation of the Sports man and woman of the year trophies.

Said Mr. Karran: ‘Last year was another great year for sport on the Island with the hosting of the Commonwealth Youth Games and more and more successes for our talented athletes.  The panel will have its work cut out to even agree on the nominees for awards in all the categories, let alone finding actual winners.’

- Ends -

In Other Isle of Man News

If you'd like to send any information or news releases to us then please feel free to do so and we would be more than happy to consider sharing your news with the Isle of Man!

Send your Isle of Man news to:webmaster@manx.net

© Manx Telecom Ltd 2012

Manx Telecom Ltd, Isle of Man Business Park, Cooil Road, Braddan, Isle of Man IM99 1HX
Registered in the Isle of Man Reg no.5629V Vat Reg no GB 003-2919-12

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Another World Champion to Guest at Sports Awards Ceremony

Julius Baer ready to pay fine to avert U.S. probe

By Martin de Sa'Pinto and Katharina Bart

ZURICH (Reuters) - Julius Baer (VTX:BAER.VX - News) is prepared to pay a fine to escape an escalating U.S. crackdown on offshore bank accounts after last week's indictment of smaller rival Wegelin raised tension among Swiss private bankers.

"We expect we will probably have to pay a fine, but have the resources to satisfy a solution," Baer Chief Executive Boris Collardi told a news conference as the bank announced 2011 results and a share buyback on Monday.

"We've taken an early, proactive approach with the U.S., taken measures including the U.S. exit in 2009 at our own decision, and have an ongoing constructive dialogue," Collardi said, adding he did not expect the bank to be indicted.

He did not say when a resolution was expected, nor how much Baer might have to pay.

U.S. officials have in recent months been piling pressure on Swiss private banks like Baer whose clients include wealthy Americans with hidden offshore accounts. That culminated in the indictment on Thursday of Wegelin, Switzerland's oldest private bank, which had broken itself up the week before in anticipation in order to protect other parts of the business.

Shares in Julius Baer fell 4.8 percent to 37.05 Swiss francs at 1100 GMT, underperforming a 1.2 percent slide on the European banking sector index (:.SX7P).

Dirk Becker, analyst at Kepler Capital Markets, noted that Baer traded at a significant premium to other banks at 1.7 times book value compared to a sector average of 0.6 times.

"Julius Baer is one of the most defensive in our coverage of European banks, but also not free of problems," he said. "The resolution of the U.S. tax matter could potentially be very expensive."

Larger rival Credit Suisse, which reports 2011 numbers on Thursday, is also caught up in the U.S. investigation. The bank said in November it had taken a 295 million Swiss franc charge against third-quarter earnings in connection with the probe, but noted that the final settlement could exceed that.

Baer financial head Enkelmann said after paying 2011 dividends and buying back shares the bank still has roughly 900 million Swiss francs in excess capital, from which Collardi said any fine would be paid.

SOARING FRANC CRIMPS PROFIT

Baer said 2011 net profit fell 27 percent on the year to 258 million Swiss francs ($280.72 million), hurt by lackluster client trading, restructuring costs and other expenses including a one-off payment to resolve a tax dispute with Germany.

Baer cut its profit margin target and raised its cost income ratio forecast as a soaring Swiss franc kept the bank's mainly franc-based costs high but capped foreign-currency revenues.

"Two-thirds of costs are in Swiss francs, while two-thirds of revenues are in non-Swiss franc currencies," Enkelmann said in a earnings call.

"We can still work on costs, to move out some costs from Switzerland and to better match costs and revenues, but this is not short term and will take some time."

Vontobel analyst Teresa Nielsen said the revised targets suggested that restructuring expenses would come in "higher than previously expected."

In what Nomura analyst Jon Peace called "a show of capital strength," the bank also launched a new share buyback of up to 500 million Swiss francs and announced a special dividend of 0.40 francs per share to its ordinary 0.60 franc dividend, returning a further 200 million francs in total to shareholders.

After losing out to Swiss-Brazilian Bank Safra in an attempt to buy Bank Sarasin (:BSAN.S) late last year, the bank said it continued to hunt for acquisitions in Switzerland as well as in its growth markets.

"The board clearly wants to give priority to the mergers-and-acquisitions market ... The second priority is to return additional capital to shareholders via repurchasing shares," Enkelmann told the news conference.

Clients added 10 billion francs in net new money in 2011, ahead of expectations, balanced by falling investment values and the negative effect of the Swiss franc which kept total assets steady at 170 billion francs. Growth markets like Asia and South America yielded strong inflows, as did Switzerland and Germany.

($1 = 0.9191 Swiss francs)

(Additional reporting by Caroline Copley; Editing by Emma Thomasson, Hans-Juergen Peters and Sophie Walker)

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Julius Baer ready to pay fine to avert U.S. probe