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Hilarious Video: The Federal Reserve Explained: Understanding the Central Bank of the United States
Kudos to Omid Malekan, who created this amazing video explaining quantitative easing to the average person to understand. This comes on the on the heals of a great video about why mobile phone consumers are so dumb the company has come . In this new video the two characters discuss the Federal Reserve's quantitative easing policy. The present it as a desperate and hopelessly misguided effort to save the world economy. One issue I have with the short film is that it also places the blame on Goldman Sachs which I don't agree with. They are simply helping to execute and should not be brought into this.
The Federal Reserve, often simply referred to as "the Fed," is the central bank of the United States. Established by Congress in 1913 with the enactment of the Federal Reserve Act, its primary purpose is to provide the nation with a safe, flexible, and stable monetary and financial system. Understanding the structure and functions of the Federal Reserve is crucial for comprehending how the U.S. economy operates and how it is managed.
Structure of the Federal Reserve
The Federal Reserve System is comprised of several key components, each with distinct roles and responsibilities:
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Board of Governors: Located in Washington, D.C., the Board of Governors consists of seven members appointed by the President and confirmed by the Senate. These governors serve 14-year terms, ensuring a degree of independence from political pressure. The Board oversees the operations of the Federal Reserve Banks and sets key monetary policies.
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Federal Reserve Banks: There are 12 regional Federal Reserve Banks located in major cities across the United States. Each bank serves a specific geographic area and functions as the operating arm of the central banking system. These banks handle various financial services, including clearing checks, distributing currency, and supervising and regulating member banks.
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Federal Open Market Committee (FOMC): The FOMC is the body responsible for setting monetary policy, including interest rates and the growth of the money supply. It comprises the seven members of the Board of Governors and five of the 12 Reserve Bank presidents. The FOMC meets regularly to assess economic conditions and make policy decisions aimed at achieving maximum employment, stable prices, and moderate long-term interest rates.
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Member Banks: These are private banks that are part of the Federal Reserve System. They hold stock in their regional Federal Reserve Bank and are subject to its regulations. Member banks play a critical role in the implementation of monetary policy by lending to and borrowing from the Federal Reserve.
Functions of the Federal Reserve
The Federal Reserve performs several essential functions that help maintain the stability and health of the U.S. economy:
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Monetary Policy: The Fed controls the nation’s money supply and interest rates to achieve macroeconomic objectives such as controlling inflation, managing employment levels, and maintaining financial stability. It adjusts the federal funds rate, which influences overall economic activity, inflation, and employment.
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Financial Stability: The Federal Reserve monitors and addresses risks to the financial system. It acts as a lender of last resort to banks and other depository institutions during times of financial distress, helping to prevent panic and maintain trust in the financial system.
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Regulation and Supervision: The Fed regulates and supervises banks to ensure the safety and soundness of the nation’s banking system. It establishes and enforces regulations that promote consumer protection, fair lending practices, and the stability of the financial system.
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Payment Systems: The Federal Reserve operates the nation’s payment systems, facilitating the secure and efficient transfer of funds. This includes overseeing electronic payments, check clearing, and wire transfers, ensuring the smooth functioning of the financial infrastructure.
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Consumer Protection: The Fed enforces laws and regulations designed to protect consumers in their financial dealings. This includes regulations on credit, mortgage lending, and the transparency of financial products and services.
Impact and Importance
The Federal Reserve’s actions and policies have profound effects on the economy. By influencing interest rates and regulating the money supply, the Fed plays a crucial role in shaping economic conditions, impacting everything from consumer spending and business investment to inflation and employment rates. Its decisions are closely watched by investors, policymakers, and the general public, as they can significantly impact economic growth and stability.
In summary, the Federal Reserve is a critical institution in the U.S. economic system, tasked with promoting economic stability and growth. Through its various functions and regulatory powers, the Fed helps ensure a stable and efficient financial system, supporting the overall health of the economy. Understanding its operations and objectives is essential for anyone looking to grasp the dynamics of the U.S. economy and its financial markets.
Video: SNL Skit on US Debt to China at G20
In a world where political satire often provides a mirror to societal issues, Saturday Night Live (SNL) has once again captured the public’s imagination with its latest skit. This time, the focus was on the US debt to China, a subject that remains a critical point of contention and debate in global economic circles. The skit, set against the backdrop of the G20 Summit, cleverly intertwined humor with serious undertones, offering a satirical yet thought-provoking commentary on the state of international finance and diplomacy.
Ben Bernanke has Purchased Double D's
The new $600B of quantitative easing goes into the banking and corporate sector of the economy who is largely sitting on the largest cash balance in business history. They don't need the money at all and it's not the sector of the economy who is going to take our unemployment rate down from 10-15%. Those who need the stimulus money the most, small business & private investors, can't get it. Seeing a company like General Motors go public again makes me want to puke. I can think of 100 other companies who deserve to be public companies before GM and that creates far more future value, jobs and innovation in our economy. GM going public is simply private equity, government money, and investment banker Ponzi scheme.
I was an apart of one of the largest business boom cycles in the late 1990s and there were a lot o great things about that time the US Government, FDIC, and Fed have forgotten. Investors were pouring money into Venture Capital funds that were providing funding to companies who were providing real long term jobs and creating new markets of innovation. Much of this money came from the Government in the form of FDIC subsidies and they made lots of money for taking this risk. Once the bubble burst and hedge funds drove the market 80% lower there was no optimism or money left in the VC industry to spark new growth. The VC industry has shrunk drastically in the last decade and almost 80% of the VC funds not based in Silicon Valley are virtually out of business (aka "the living dead funds").
Capitalism in general is kind of a Ponzi scheme but it can be done organically if the IPO market is fair and open. Capitalism also works when Government regulatory agencies stay out of our way and don't favor big business monopolies. I think if $100B in stimulus for struggling VC funds this would create another boom of optimism that we need. The Fed and FDIC should also consider an Emergency Fund to fund to solve the overweight population epidemic that is slowing the US economy down. Here are a few other ways President Obama could help create jobs.
Health & Wellness Venture Capital Funds
This is one reason I think the health and wellness category could emerge as a new investment category that could garner lots of FDIC or government subsidy money. Are there any funds out there that have the thesis? If there are I want to know about them because exercise is a passion of mine. The types of companies a specialized fund would look for would be the following:
1) Running, triathlon, and race organization groups (Marathons, Ironman, 10K Races)
2) Health Food Manufacturing, Distribution & Marketing Companies
3) Exercise Equipment Manufacturing, Distribution & Marketing
4) Adventure & Health Travel Marketing and Organizations
5) Natural supplements and vitamin companies. No drugs allowed
6) Internet publishing - coaching, counseling, advice, therapy
7) Physical therapy, employee health, and chiropractic groups
8) A healthy diet and meal marketing & distribution
9) Software & mobile applications
10) Restaurants (maybe)
How About Some QE for Venture Capital?
It really makes me sick to hear that $600 billion dollars is going to be pumped into the banking system when these are the same "bone heads" along with the Hedge Funds that got us into the mess. What is the last time you heard a story about a Bank giving money to a company that really needs it? All bankers do is lend money to companies who don't need it because they are risk averse. All these morons do take your money and the Feds at 0% and "try" and lend it at 5-15%.
Venture Capital and small business is what drives the US economy and this sector of the economy is still being overlooked. Organic growth is the ONLY thing that will get the US out of this recession and create jobs. Why not give $100B dollars to some VC Fund Managers or Private Equity Groups at no cost and require them to invest it in the next 12 months? I guarantee you they will get a return on this investment. The Venture Capital industry has shrunk drastically in the last decade and I think this is the sole reason why we are still in a recession and will be until politicians recognize this. VC fund managers cannot raise money from LP (Limited Partners) because the returns have been horrible as a result of the IPO market being virtually closed. Sometimes I think the Federal reserve spends too much time listening to politicians and not enough time in Silicon Valley, Boston, New York, Chicago and Los Angeles where new ideas are created and organic growth is created.
Catalina Classic Race is a Mental Challenge
This is a story of my first channel crossing on a paddleboard in the Catalina Classic race Sunday, August 29, 2010. 32 miles of open ocean from Catalina Island to the Manhattan Beach pier using your hands and no paddle. 24 miles to the first checkpoint at the R10 buoy and 8 miles along the coast to the finish line at the Manhattan Beach pier.
When people ask me, "do you ever worry about sharks?" my response is always a dismissive laugh and here is why . . . Racing in the open ocean is more of a mental than the physical game as you compete against the elements that you can’t control. Fog, sun, clouds, wind, cold water temps, cold air, swell, current, boat waves, ships, and maybe even sharks if you’re lucky. As my paddling friend Matt Walls describes what it's like to race in the channel on race day, “When you wake up in the morning you don’t know if you are running the Catalina Marathon or the LA Marathon”.
I have done many grueling physical endurance races in my life on land but nothing that has challenged me mentally like a paddling marathon on the ocean. My endurance racing resume up until August 29, 2010, consisted of 15 running marathons (26.2 miles), a 50 mile Catalina double marathon, a 50K race (30 miles with 12,000 ft of climbing), and 2 Ironman triathlons (130 miles).
The euphoria experienced during each finishing line experience cannot be explained in words but here is my best attempt to try it once on my first voyage across the channel. As I paddled during the race I promised myself I would write about the emotional highs and lows during the Catalina Classic race in order to savor the experience for my kids, family, and friends. I was asked on the beach at the finish line by a friend, “was it fun?”. Without hesitation, my answer was, “NO and I will never do it again”. However, as I write this story a few days later I can’t say all of it wasn't fun.
Some parts of the race were fun but it was mostly a brutal mental test that I will remember for the rest of my life. I am very proud to have finished the race and now be apart of an elite crew of crazy watermen who make the journey each year and make the sport look so easy. I am truly humbled by the race pioneers and guys and gals who have finished before me.
I met my wife a few weeks before my first marathon in 1998 and she asked me a very simple question only a few days before it. Why do I do it? My answer to this day is still, “for the mind”. I do love the competition and the goal-setting but most of all I love the euphoric feeling after finishing the race. Competition drives me to train and push harder but most of all I love the camaraderie amongst the competitors. Endurance races can push your body to the limits but at the same time, it cleanses the mind and gives you renewed perspective, appreciation, love, and happiness. I guess you can officially call me an endorphin addict and this is why I seek mental race therapy once a year to clear my mind.
I have always loved swimming laps in the pool for cross-training exercise but I quickly get bored doing flip turns in the pool and I can’t swim for more than an hour. Open water ocean swimming is fantastic as well but it's uncomfortable to be in the ocean by myself swimming alone. Growing up my Dad introduced me to the ocean very early and he would frequently take my brother and I sailing out of Marina Del Rey. We never made the sailing voyage to Catalina but often discussed how dangerous it was if you were caught in bad weather in the channel.
When I first saw a paddleboard on the ocean and I learned that people were crossing the channel to the Catalina it sounded like a challenge I wanted to do someday. I quickly fell in love with the concept of having my own board to discover the ocean and it was the perfect combination of swimming, boating, surfing, and endurance into one sport . . . paddleboarding.
I was introduced to my first paddleboarding experience about 6 years ago after borrowing an old downwind paddleboard and thinking “Ironman me” could do a 3-hour 12-mile race, “cold turkey”. I had never been on a paddleboard in my life and I decided to do my first race of 12 miles which was really stupid. The race was 6 miles upwind to the R10 buoy from the Hermosa Beach pier and 6 miles downwind back. I made it about 4 miles offshore into a cold headwind and with cold water crashing on my body and quickly decided I was too cold to go on. I hailed the lead Body Glove boat as it was passing by to pick me up as it was escorting the race leader back from the R10 buoy. Ok, I failed at my first race and this sport was harder than I thought and now had a new challenge to overcome . . . the ocean elements.
I waited about two years before I finally got the bug to try it again and I purchased my first 17-foot paddleboard from a guy in Malibu. I was hooked and spent a few years learning the technique with the South Bay Donkeys (paddleboard group). Tips like pinkie first to preserve your shoulders (Kyle Daniels), how to catch the tiniest of bumps in water (Matt Walls), how to choose a board that is right for you (Scott Rusher), and finally how to master balance on my knees.
For three consecutive summers, I was always asked by the Donkeys, “are you going to do the Classic this year”? My response was always, “I will do it when my escort boat crew falls easily into place”. All the stars became aligned in the winter of 2010 as I learned that a good friend Ken Deemer was going to store the Katie B, 45-foot boat in Huntington Beach for the Summer, up from Mexico. I had to take advantage of the opportunity and I no longer had any excuses not to try the race with Ken Deemer as my boat crew. My escort boat was booked and now I had to find the time and discipline to put the training miles in before the race.
I am an avid runner and usually log a minimum of 35 miles per week over about 4 days. I try and do some running crossing training throughout the week on the off days to keep my running legs, lower back, and knees functioning properly as I near the age of 37. Getting older isn’t easier on the body for recovering and paddle cross-training is a key element to recovery. Running is fairly easy to do in Southern California over 365 days per year and there are very few times that the weather was a factor limiting my training.
As a runner, you have much more control over the elements by how you dress and prepare for a marathon. Run in Phoenix and you know what you will get dry hot temperatures. Run in the mountains and the temperatures will have predictable extremes and the oxygen levels will be low. Race in Kona and you know it will be windy, humid, and hot. Physical and mental training preparation is predictable and fairly easy to simulate to give you confidence prior to a race. However, ocean racing is unpredictable and you must be prepared for hundreds of different types of conditions. No day is ever the same on the ocean which makes it exciting but also a challenge.
For almost a century watermen have been crossing and racing in the Catalina Channel to the mainland. Some have success and many have failed. Sharks? Nope, the elements! Fog, sun, clouds, wind, water temp, air temp, swell, current, boat waves and ships. It's a lot to worry about and you don’t have control over anything. The ocean is a highly unpredictable beast and virtually impossible to accurately forecast. It can be brutal on the mind if you are not prepared for the conditions dealt.
Ask any Catalina Classic veteran to describe their channel crossing experience and they always seem to have a sparkle in their eye. The conversation always ends with, “You gotta do it, Jeff”. After three years of trying to master the techniques and learning from all the locals (Donkeys) in the water, I finally could register for the longest race in the US which finished near my home. The Catalina Classic is 32 miles from Two Harbors on Catalina Island to Manhattan Beach pier. The race starts at 6 am and the cut-off time is 3 pm at Manhattan Beach pier. Why does the race start in the dark and so early? Elements.
My race weekend started out with a boat ride over to Emerald Bay on the Katie B which is a 45-foot fishing boat with 5 bunks and 2 bathrooms. We strapped my paddleboard to the starboard railing of the boat to save room. On the way over we happened to see several grey whales and a couple of very large blue whales which is extremely rare for Southern Califonia. Was it the colder water possibly keeping them here? As we motored over the water temperatures were reading 59 degrees in the middle of the channel and my fear started to set in. Did I pick the wrong year to do the race?
My nerves really started to creep up after I arrived on the island and began to get a feeling for the cold water and air. My first night's sleep was awful even after a few beers and laughs with my crew to calm the nerves. I am not sure if I even slept more the two hours the entire night tossing and turning in my bunk. The next day Ken and I went for a two-hour hike to check out the island which was helpful to take my mind off of the race for a while. It worked for a while but probably wasn’t a good idea considering I had to hike four miles in the hills with flip-flops. I forgot my running shoes but needed to get off the boat for a while and stretch my legs.
That evening the pre-race dinner didn’t do a whole lot to calm my nerves sensing the anxiety in the other paddlers. After one night of no sleep, I was still thinking, “This is crazy, this is crazy, this is crazy”. The logical right side of my brain kept questioning if this race is so fun then why are only 85 guys doing it this year and 50% of the field were rookies? It became apparent that not many people returned to do the Catalina Classic twice and I was about to discover why. Millions of people have done running marathons each year and a few hundred thousand people have done Ironman triathlons. I would bet only a couple of thousand people have ever done the Catalina Classic race. Was I crazy and is there something I don’t know?
I tried to eat the Mexican dinner provided to all of the racers and the boat crew but my stomach was already too nervous to digest anything. After the race directors gave their safety and rules speeches, each racer introduced themselves around the courtyard one by one. “Jeff Cohn from Hermosa Beach and this is my first Classic”. Only a handful of women were in the race and the total race numbers were down from previous years to only 85. Perhaps veterans were taking the year off due to the cold weather. I almost threw up at the end of the safety speech as one of the race directors said with fear in his voice, “There are only two things that scare me in this race . . . fog and hypothermia. Be safe and escort boats keep an eye on your paddler because hypothermia can set in quickly and it's hard to reverse.” Wow, something new to worry about before another horrible night of zero sleep.
The next morning I crawled out of my bunk on the boat after not sleeping for the second night in a row. I tried everything to get my mind off of the race but I just couldn’t stop thinking about what if I am too cold? Should I wear a wetsuit or will I be too warm in it? I had all the confidence in the world that the race was not going to be as physically demanding as a running marathon or Ironman. During training, I had successfully completed a 24-mile paddle three weeks earlier and we averaged 4.8 MPH and my confidence soared. Recovering from this paddle only took a day or two because there wasn’t much impact unlike running.
The fatigue factor during the race shouldn’t be anywhere close to the pounding experienced during a running race. However, I still had many questions about the unknown elements of the race I could not control. Could my body and mind withstand almost 8 hours laying down on the board with a wetsuit top and booties and what would happen if I got cold? Could I digest the food and drink properly?
I woke up at 5am and at 5:45 am my boat stopped in the harbor a few hundred yards offshore. I dropped my board into the water in the middle of the darkness and heard a loud “crunch” as it hit the water. That crunching sound was the bottom of my board landing right on top of the boat ladder which was still out on the landing. It sounded like my board hit the ladder and broke the fin but I checked it and it seemed ok and still functional. What I didn’t know was my board hit the ladder causing a 3-inch gash under my board that could take on water and slows me down. I am so glad I didn’t see the gash on my board before or during the race as I probably would have had another excuse to drop out.
I had two water bottles on the board, some food (Power Gel blocks) in my wetsuit top and my phone in a waterproof case (just in case) as my escort boat dropped me off in the harbor at 5:45 in the dark. As I paddled through the harbor without my prescription glasses to the beach starting line I could see escort boat lights coming at me out of the harbor and I had to quickly dodge them. I glided up to a calm beach in the dark and immediately went to sign in and stand by the bonfire to stay warm.
Looking around the bonfire was quite intimidating seeing all of the ghostly faces with sunscreen staring into the fire with a look of fear. While I was warming myself against the “fire of fear” the 5-minute warning from the race director megaphone was given by Kyle Daniels who has won the race multiple times. I could even sense the nervousness in his voice as he was giving the countdown instructions. Kyle wasn’t doing the race this year but was responsible for 85 lives trying to make the crossing and it was going to be a cold day. That would scare the hell out of me as well.
I walked to my board on the beach and stood in knee-deep water before the race started not knowing I had a 3-inch gash in the bottom of the hull. I found a spot next to 27-time finisher Joe Bark who had a board with tiger stripes. Joe was the same person who shaped my board about 12 years ago. The horn went off at 6am sharp and we were off flying in-between the boats in the harbor. The pace was ridiculously fast as the race leaders were all jockeying for the lead position and the other paddlers behind followed in their wake. We were quickly outside the harbor and into the open ocean which was not looking smooth.
If you are in the lead or near the front of the pack the water is smoother and you can carve out your own path in the non-drafting race. However, if you are in the middle of the back of the pack you have to deal with the chop from other paddlers in front of you and the 100 escort boat waves. Every race I have done it has been annoying to have to deal with the chop from the faster paddlers and I can’t seem to get to my knees comfortably without feeling like I am going to fall off in the waves. Usually, the chop clears up after a few miles as the spacing between the racers increases.
However, this race was different because it had 100 escort boats creating chop and moving all over the channel. Not to mention the headwind and the swells that were converging. Shorter races near the shore usually don’t have this problem in the morning with only one lead boat and a couple of emergency boats if needed. Another element I forgot to consider that might create some issues with trying to stay warm. It was bumpy and I couldn’t get a good rhythm in the cold sloppy water. I surrendered the fact that I was going to stay paddling on my stomach for a few hours and quickly gave up the idea of trying to stay with the guys around me. I was getting tired of being in the same position on my stomach and typically spent 50% of my time or more on my knees in training.
The boat waves were difficult to deal with because they were spaced too closely together and it became impossible to gain any momentum going over the top of them. There were big boats and lots of small boats creating the chop and they were mostly all ahead of me. Boat chop makes it extremely difficult to get to my knees and use my running legs and quads to go faster. However, swell waves are great regardless of direction because they are spaced farther apart and I can ride up and down them for momentum. The only way to deal with boat waves is to go through them if you have a "knifey" board nose. Some of the faster guys just seem to go over them. After about two hours of choppy boat waves, I began to realize there was also a headwind building into my face.
Wind can be your best friend and also your worst enemy in the ocean. A tailwind is amazing if it’s blowing in the direction you are going and can be a lot of fun. However, a side or headwind can be horrendous and cause you to lose significant speed and body heat. In my case, warmth was my biggest concern as the wind splashed 59-degree water right on my legs, face, and arms. It also leaked right into my wetsuit top and into my biking shorts with ease. I was getting cold quickly and with every paddle stroke, another splash of cold water hit my entire body. After about two hours I started to shiver on the board and began thinking about what the race directors said their biggest worry was . . . “hypothermia”.
Hypothermia starts with the body shaking and ends in death if you don’t get your temperature regulated quickly. The rational right side of my brain kept saying, “Jeff stop and put on the wetsuit so you can see your wife and kids again”. The irrational ego left side of my brain kept saying, “Jeff you are not paddling hard enough to stay warm, a wetsuit might be too warm and might take you 15 minutes to put on and your goal is seven hours”. I soon realized I was torturing myself and wanted to try and have good memories of the race. Maybe this is what waterboarding prisoners in Guantanamo Bay were like?
During the second hour, my memory became a little foggy but my math skills were still pretty sharp. My boat crew looked concerned as it took me about two hours to go eight miles and I was only through one-quarter of the race. I was going to be in the water for eight hours. My boat crew explained to me that we had only gone eight miles in two hours and averaged only 4 MPH. This was very discouraging considering my target was 4.8 MPH after numerous training paddles where I had averaged well above 4.5 MPH for many miles. A 7-hour goal of 4.5 MPH to average seemed very reasonable during training if conditions permitted. I became extremely upset and kept wondering what I was doing wrong.
The winner of the race typically averages 5.8 MPH which gets him to the finish line in 5 hours and 30 minutes. The difference of 1 MPH in the race is well over an hour in this long-distance race. Every .1 MPH speed is a big deal in a sport where board shape, training mileage & technique play a big factor in speed. It finally hit me about two hours into the race and I was expending more energy trying to stay warm versus propelling myself forward through the water and it was time to put the wetsuit on. No matter how hard I paddled on my knees I could not forget about being cold and wanted to drop out of the race. However, I knew I would regret it and have to come back to attempt the race again.
Unfortunately, I trusted my training experience more than I trusted the common sense of my boat crew and I didn’t put on the full wetsuit before the race started. However, I did compromise with them slightly and put on my booties to try and keep my extremities warm which helped for a while. I kept telling myself that I had paddled in the middle of the winter without a wetsuit in 55-degree water with the sun out and wind for hours and wasn’t cold until I stopped. Just keep going and the energy you create by paddling will keep you warm. Also, stop looking at your boat captain who is sitting up on the top deck with a ski hat and winter jacket on looking very warm and cozy.
Being cold is an awful feeling and I may be scared forever based on this experience in the cold ocean. I knew I was starting to get incoherent when my boat crew asked where my wetsuit was and I said to them “You have it”. They found my suit finally and it took me almost 15 minutes to put it on while shivering. After ten minutes of paddling in the wetsuit, I felt my body temperature come back to normal as I continued on the journey to the mainland.
Wearing a wetsuit can be great to keep you warm but it reduces your mobility, reach and requires more energy with each stroke. Unfortunately, I had not trained with a wetsuit on and I was using my Orca triathlon swimming wetsuit that fits perfectly 5 years ago when my upper body was not bulked up from paddling. The wetsuit is also designed to work best with a small amount of cold water flowing through it during a swim. The fit was way too tight and restricted my reach with each stroke on my stomach. Getting to my knees was even harder with the restrictions the wetsuit created on my lower body.
I prefer paddling a few hundred strokes on my knees, followed by a few hundred strokes on my stomach. Paddling on your knees relieves my shoulders and arms temporarily while using the strongest muscles in my body my running legs. It does require more energy and typically you can go a lot faster having two hands enter the water at once. It is similar to the butterfly stroke in the pool.
While paddling on my stomach (which I hate) there were times I would lay my head on the board and only look up every few minutes just to see where I was going. My boat kept telling me that when my head was on the board I would speed up a few tenths of a MPH and I was going faster for some reason. I tried keeping my eyes closed for a while and while taking mini naps while paddling to shut my mind down and relax. I tried napping during a race while paddling which I thought was cool at the time. The lack of sleep from the previous two nights was creeping up on me quickly and I was mentally exhausted from all the pre-race anxiety.
Sometime during the third hour of the race, my body went from freezing to now sweating in my wetsuit. I started getting overheated and my mind quickly shifted to thinking about hypothermia to dehydration in the fourth hour of the race. I tried removing the wetsuit from my upper body as I started chafing around my chest and started slowing down a lot with the restrictions. It was easy to remove from my arms and chest while stopped and I tied the sleeves around my waist. As the suit was tied around my waist it bunched up around my stomach and made me have a hard time digesting food and drinking. I also didn’t realize that the wetsuit had rubbed off all of the thick sunscreen I put on at 5:30am.
I was near the breaking point again and sobbing on my board. I was exhausted by the changing conditions and not being able to decide what to wear to make me comfortable paddling for the remaining four hours. Should I stop and put sunscreen on my back again that was frying off the sun and reflection from the ocean? Tears were streaming down my face and I wanted to drop out in the fourth hour but this time I started throwing up my drink and couldn't eat anything that tasted good to give me energy. I felt like I was going insane.
All I wanted to do was hug my wife and kids. I couldn’t get my family out of my mind which made even more tears flow down from my face. Crying on the ocean is not exactly recommended as a solution for someone trying to stay hydrated and already surrounded by saltwater. I have a history of getting migraine headaches from stress and dehydration and I could feel one coming on.
I decided to call my wife with the phone on the front of my board to get some motivation to finish. I had used my mobile phone several times while on speaker in the waterproof case before and I could do it without using my hands. My wife loves it when I call on the ocean and it makes her feel better to know when I will be home and where I am. I pushed the phone to dial and hit the speakerphone. Then I thought twice and hung up because if she hears me suffering the sadness in my voice she is going to worry even more and question my boat crew. Maybe even send the Coast Guard helicopter. Not a good idea and I quickly hung up. My lonely journey through the open ocean continued on.
Paddling alone in the ocean for more than a couple hours when you are not feeling well is like being in hell. Typically when I go out to paddle on my own I stay close to shore and find people to chat with on the water. I do this partly for safety but it’s also more comfortable with more people around you. Everyone in the small paddle community of the South Bay knows each other and it's just not that fun to paddle by yourself for more than an hour. Music helps cure boredom and fatigue but it will only get you through a couple of hours alone. After the first four hours alone my motivation quickly turned to complete the damn race. I thought to myself I never want to do this again!
During the fourth hour of the race, the temperatures continued to rise and the wind changed direction. My Orca triathlon wetsuit was too thick and I was really starting to dehydrate as the temperatures continued to get warmer. The wind had permanently changed direction and finally started helping me go faster with less effort. I had to take the suit off and wrap it around my waist and throw a rash guard on to keep from chaffing on my chest. However, this was not comfortable because when I tied the sleeves around my back, the bunched-up wetsuit pressed on my stomach as I lay on it. I tried wearing half of the wetsuit but the water was 59 degrees and as I got closer to Palos Verdes my body temperature quickly dropped again.
Now I had to stop for the third time and put the wetsuit back on my arms and chest again to keep from freezing. After two nights of zero sleep and mental exhaustion, I was in race survival mode. All of my race priorities and goals were thrown out of the window. The ocean was winning the battle and had taken my mind to a deep dark lonely place of frustration as I wondered why no one else seemed to be having the same problems as they paddled through the cold channel.
My questions were finally answered when fellow South Bay paddling friend, Kevin Kody came up on my tail at about mile 20 which was about 5 hours into the race. I could tell he was all business and quickly picked up the pace to try and drop me since this was his 12th time doing the race. He had a full wetsuit on, GPS, food, and drink onboard while his boat crew was relaxing peacefully on their sailboat. Kevin seemed to have the race formula down and I told myself I had to stick with him as long as I could to get to the finish line.
I have never been so happy to see someone on the ocean as I was on this day. I felt like I had been alone paddling on the ocean for a month and just wanted to see someone to talk with and say hello to remove me from my insanity. I was in a deep dark place for much of the race but now I had someone to talk to and keep my mind focused on the finish line. Kevin was helpful and listened to my whole experience during the last 5 hours. Somehow talking to him for a few minutes made me forget what I had just come through.
We finally made it to the R10 buoy around noon which was six hours into the race. The clouds, chop, and wind were all completely gone and it was getting very hot. It was a brand new day and a whole new race. The euphoric feeling I had getting to the R10 was great and my boat cheered loudly. It was my first crossing of the channel and that was an accomplishment in itself. I was starting to get dizzy on the board and vertigo was likely setting in. I told Kevin that if I had to drop off between the R10 and the pier at least I made it across the channel. I was mentally much stronger after crossing the R10 checkpoint. I had accomplished one goal and that was my first crossing of the channel and I had someone to share it with.
Paddling alone in the ocean is not very fun and this is one epiphany I had during the race. Much like running in a group, it's easier to pass the time and share your experiences if you have someone or a group to do it with. The repetition and the monotony of doing the same thing for hours are taxing on the mind. At times during the race, I would sing to myself during a 311 song just to pump me up. I had an iPod Shuffle playing in my ears for most of the race which helped some. I didn’t have an appreciation during training for how hard it was to paddle by yourself for a long period of time. It's easy to get relaxed when you are alone and start thinking too much about how cold you are or how far you have left to go. Going slower by yourself is inevitable.
Most of the experienced paddlers recommend that rookies do the Rock to Rock race in June. This race is a warm-up to the Catalina Classic in order to learn about the potential conditions and elements. The R2R race is 22 miles from Two Harbors to Abalone Cove off of PV and typically only takes a little of four hours. Most people use this race as their first channel crossing to learn about temperatures and nutrition but not stubborn me. I always said if I have a bad first channel crossing in the R2R race I will never do it again. So I might as well do the big Catalina race first and not test the waters to see if I can handle it.
After leaving the R10 buoy with Kevin I felt like the sun beating on my wetsuit and the wind seemed like it was going to be at our backs for the rest of the race. I was getting too warm in the wetsuit and was more worried about dehydrating as I was sweating profusely and losing a lot of water. Kevin Kody who was a Catalina Classic veteran for the 12th time explained to me that he had only had two water bottles in the last 5 hours. What was I doing wrong if I had 5 water bottles? Was I drinking too much? I was now warm enough that I had to take the wetsuit and booties off and finish the race comfortably on the board. Unrestricted in the heavy think wetsuit.
For about a sixth time during the race, I had to stop and make a change that I was wearing. This time I took the wetsuit and booties completely off. By now I think I wasted about thirty minutes changing and figuring out the most comfortable thing to wear and just complete the race. I was no longer focused on racing but just enjoying the company and completing the thirty-two-mile adventure. Taking the wetsuit off rejuvenated my spirits and it seemed like a whole new race. I was able to spend a more comfortable time on my knees which is essential to going fast and staying warm. However, I soon realized the sun was beating down on my bare skin I had no sunscreen on anymore. I was frying in the hot sun reflecting off of the water.
One thing veterans tell you during training is to never look at the Redondo Beach power plant mural or the marina jetty because it will seem like it never gets any closer as you paddle north to Manhattan Beach. However, the clouds were gone and visibility was great to see the smokestacks of El Segundo and the red roof of the Manhattan Beach Pier. The eight miles from the R10 buoy to the Manhattan Beach pier were extremely fast and it went by like a flash. All I could think about was my wife and kids on the beach anxiously waiting to see me. I had been waiting three years to do the race and I was finally about to accomplish a goal that I had feared for so long.
I was inside the last half mile and I could see the large crowd on the beach and on the pier. Kevin counted down the number of strokes left and we were both up on our knees hammering away and gliding into the runners. My adrenaline was pumping hard so I didn’t have to take many strokes before I was launched into a runner. I wanted to finish the race with Kevin because he had helped me come through such a bad patch. Kevin was getting close to one of his personal best times and I wanted to help him achieve it.
My body was shivering on the warm beach in the 75-degree air. My body stopped generating its’ own heat by paddling. As I looked around the beach with bloodshot eyes I began to realize this race is kind of crazy. Everyone looks like a zombie and their brain probably feels much like mine . . . “MUSH”. After being on a boat for 3 days the brain still thinks you are on a boat and keeps rocking back and forth to compensate for your balance. Vertigo is what they call it.
As I write about my emotions and experiences during the fifth day of my recovery, my brain still feels mush and my equilibrium is off. I still have the sensation of being on a boat when I wake up in the morning and many times throughout the day. A friend of mine said to me on the beach it will take a while to go away but 5 days is kind of crazy.
Despite having vertigo my mind feels fresh and free of any negative “cobweb” thoughts I might have had prior to the race. The race was one giant brain cleansing and I am still on a high from the finish. I am definitely enjoying the post-race honeymoon and hope it lasts for a long time.
The ocean can take your mind and body to the deepest and darkest of places when it decides to growl. The cold ocean water can strip your body of heat and make you beg for mercy. But when the sun comes out and a friend comes along to keep you company somehow family and friends come vividly into perspective.
Angel & Venture Capital Shareholder Liquidity
One huge government obstacle that stifled startup investing over the last 10 years was Sarbanes Oxley. This new financial regulation created a decade of virtually no IPO's and caused thousands of private companies to think twice about going public due to the high costs. Has Sarbanes Oxley done anything to protect shareholders in public markets? No, but accounting firms like PWC and Deloitte have sure benefited.
Southern California Ad Networks & Publishers
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These digital media companies will likely have between $10-250M in annual revenue in 2009 and are great M&A / IPO candidates. The combined list of companies has raised in aggregate of well over $1B of capital and employs 2000+ people in Southern California. These companies will ultimately spawn new entrepreneurs when liquidity is realized for shareholders. Soon Southern California just might have had a sustainable ecosystem of investors and entrepreneurs to compete with regions like Silicon Valley and Boston. This list is ranked in order of capital raised from investors. SoCalTech.com and Crunchbase.com were the sources of investment information.
Demandmedia.com - 1333 Second Street, Suite 100 Santa Monica CA 90401 - Owns and operates 1) a network of 65 destination websites 2) a content and social media marketplace connecting content creators, users, and publishers on a mass scale, and 3) the second-largest domain name registrar. Most recently, Demand Media launched
Livestrong.com in partnership with the Lance Armstrong Foundation.Total Funding: $355.00M Investors: 3i Ventures Generation Partners Goldman Sachs Lance Armstrong Foundation Oak Investment Partners Spectrum Equity Investors
Oversee.net - 515 South Flower Street, Suite 4400 Los Angeles CA 90017 - Operates an advertising network, services for parked domain name holders, and a series of consumer-focused websites. The company uses search engine optimization and other techniques to increase revenue from parked domains and other websites. Total Funding: $150M Investors: Oak Hill Capital Partners
Specificmedia.com 4 Park Plaza Ste. 1900 Irvine CA 92614 is developing technology that helps online advertisers target audiences through advanced behavioral, contextual, geographic and demographic technologies. 200M Monthly Total Funding: $110M Investors: Enterprise Partners, Francisco Partners, Shepherd Ventures
Hulu.com 2312 W. Olympic Blvd., Los Angeles, CA 90065 is currently the third-largest video provider on the web. The site focuses exclusively on professional content and does not take on YouTube directly as a viral video destination. Hulu videos are played in their own embeddable branded player. Content from at least a dozen TV networks and two major film studios is promised. Initial distribution partners include AOL, Comcast, MSN, MySpace and Yahoo. Total Funding $100M Investors: Providence Equity Partners, Disney, Fox.
Adconion.com1322 3rd Street Promenade, 2nd Level Santa Monica, CA 90401 Performance-driven online advertising and content syndication network. Investors: Index Ventures & Wellington Partners. Total Funding: $80M
Veoh.com 10180 Telesis Court Suite, San Diego, CA, 92121 is an Internet TV service that gives viewers the power to easily discover, watch, and personalize their online viewing experience. Total Funding: $69.8M Investors: Intel, Adobe, Shelter, Spark, Goldman Sachs, Time Warner
Reachlocal.com 21700 Oxnard Street, Suite 1600, Woodland Hills CA 91367 Brings order to the fragmented local Internet by connecting advertisers, publishers, and creative solutions providers together on one platform. Wherever customers are online, ReachLocal helps businesses find them with the broadest reach of local digital media, a dedicated force of local Internet Marketing Consultants, and technology that continually optimizes results. Total Funding: $67M Investors: VantagePoint Venture Partners, Rho Capital Ventures, Galleon Special Opportunities Partners, LP
Adknowledge.com 3003 Expositio 1st Floor Santa Monica CA, 90404, (Headquartered in Kansas City, Mo) Performance-based advertising network that utilizes powerful predictive technology to connect advertisers with consumers across multiple channels, including email, search, and social networks. Investors: Technology Crossover Ventures. Total Funding: $66.3M
Gorillanation.com 5140 W Goldleaf Circle Floor 3 Los Angeles CA 90056 An online ad sales rep firm represents over 500 leading web publishers and offers integrated media and promotional programs to Fortune 500 brand advertisers. Total Funding: $50M Investors: Great Hill Partners
Rubiconproject.com 1925 S. Bundy Drive Los Angeles CA 90025 - Yield Management Optimization platform, REVV for Publishers™, is engineered to accelerate revenue for premium Web publishers. Total Funding: $42M Investors: Clearstone Venture Partners, Mayfield Fund, IDG Ventures and GE/NBC Universal's Peacock Equity Fund
Openx.com Pasadena CA - Ad server for web publishers. OpenX offers a vast community of publishers comprehensive, customizable and free-to-use ad serving technology. The OpenX ad server empowers a community of more than 150,000 websites across the Internet with the ability to take control of their ads and maximize their ad revenue and relevance. The OpenX ad server products are translated into 25 languages, used in more than 100 countries around the world, and serve more than 300 billion ads each month.. Total Funding: $31M Investors: Accel Partners DAG Ventures First Round Capital Index Ventures Mangrove Capital Partners O'Reilly AlphaTech Ventures Miller, Jonathan
Break.com 311 North Robertson Dr. Beverly Hills CA 90211 - Break Media is the Internet’s premier entertainment community for men. Break Media consists of wholly-owned branded properties such as Break.com, Cage Potato, Chickipedia, Holy Taco, Wall Street Fighter, Screen Junkies and All Left Turns as well as a publisher network, the Break Media Network, that counts over 95 member sites. Total Funding: $21.4M Investors: Lions Gate Entertainment
Mahalo.com 902 Colorado Avenue Santa Monica CA 90401 - Human-powered search engine where results are generated non-algorithmically by a team of profile builders who create pages for search terms. Mahalo includes the most appropriate hand found links and information for about 10,000 unique queries. Total Funding: $21M Investors: Sequoia
Hydranetwork.com 8800 Wilshire Blvd, 2nd Floor Beverly Hills CA 90211 Performance-based ad network that distributes cost-per-acquisition (CPA) and cost-per-lead (CPL) campaigns through online affiliates. Named by Inc 500 as the fastest-growing advertising company in the U.S. in 2009. Total Funding: Unknown Investors: Unknown
Connexuscorp.com 2141 Rosecrans Avenue, Suite 2020 El Segundo CA 90245 Connexus is an online marketer and pay-for-performance ad network. Result of the merger of Vendare Media and Netblue. Investors: Insight Venture Partners & Oak Investment Partners Total Funding: Unknown
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