Friday, April 25, 2008

Korver

Great article from the SL Trib about Kyle Korver. I didn't know any of this stuff about him. What an awesome person and example. I'm even more excited now to keep watching him drop 3s throughout the playoffs.

Wednesday, April 23, 2008

Culinary Dreaming

One of my top five dream vacations to take with my sweet wife is to take our bikes and appetites to the Napa Valley for a week of biking by day and dining by night. Neither one of us drinks, but the Valley is so full of restaurants I'd like to enjoy that I don't really care. Vineyards make beautiful scenery for biking.

The top places I'd like to visit are Terra, Mustards Grill and the French Laundry. These are some of my favorite cookbooks. We cook from Mustard's Grill a lot. The French Laundry takes way too much time to cook from - Bryn gave me that one year because she figured they'd have great French toast. The only downside of the Napa Valley is that I'd really like Jean-Georges to be there, but his best restaurants really require a trip to NYC.

That said, he's now given me another reason to want to go to Istanbul (was once Constantinople).

Monday, April 21, 2008

Another perspective on FLDS

Being a Mormon in Texas, I'm a bit closer to this FLDS thing than I care to be. I have to admit (sorrowfully) that my reaction for the most part has been to keep my head low and hope it will pass without disgracing me and mine. Not very Christlike.

I've read a blog or two lately that have made me rethink this a bit. Undoubtedly a polygamist compound is at least eery and probably criminal in some regards. There's unquestionably abusive, illegal and unconscionable behavior. However, does this mean that the children should be taken from their moms? The moms are widely viewed as too young and too weak, but I don't think anyone thinks the moms have been abusive. So why are they removed from their children, or their children from them? Thousands of kids were abused by thousands of their Catholic priests. Did this mean they should be taken from their moms?

I'm more than a bit worried that when the government concludes that a religion is "cult" it can then remove human rights so readily. Will they come for my kids when they realize I have food storage and don't watch rated R movies? If I ever do something horrible and they associate this with my religion, will they take the kiddos from Katie? The logic here is disturbing to say the least.

We may cringe at the philosophical or religious beliefs of another, but holy cow it seems to me we have to be careful that such an aversion doesn't lead to blatant discriminatory behavior. Who will history judge as the most abusive - the FLDS men or the State of Texas?

That said, could we get the FLDS to change their name once more? Perhaps something more clear like "We're Not Mormons"?

CrossFit


For the last couple of years I've been studying a workout regimen and lurking on sites that talk about it. Since we moved to Dallas we've bought a lot of the equipment required and I've started fitting in a workout a few times a week. Here's a shot of my little garage gym. Here's hoping that after a month or two of it I won't feel like I'm going to die by the end of the workout. After a few years of mostly cardio workouts, these more varied workouts are kicking me.

Graham Green


It isn't home until Katie paints a wall green. I hope this means we're home now.

Tuesday, April 15, 2008

Wear Your Helmet


Mason got hit by a car this morning on the way to school. He's ok.

You can see in the picture a few things - the crumpled handlebars, the pieces of his shirt on his brakes, and the smashed bike helmet. He wasn't wearing the helmet - it was on his handlebars.

Wear your helmet!

Monday, April 07, 2008

Life as a paradox

I have been struck lately by a paradox we all live with every day and that because of my genetics I am very keenly aware of this more than most.

On one hand, we should live each day as if it is our last. Seize the day. Carpe diem. Dead Poets. My dad got sick when he was 27 and spent the next 27 years dying, eventually passing away at 54. I can't tell you how relieved I was to celebrate my 28th birthday in good health - definitely my favorite birthday (even if Mason spoiled the surprise! :-) ). Growing up in a convalescent center, I was always cognizant of the need to live each day as though it could be my last.

On the other hand, I was born into one of the more frugal families that's ever lived. My dad was perhaps the greatest miser known to man, but my mom has also been very good with a dollar and now my brother has shown a keen ability as well. It's our family's unique talent. Why do we do this? If we should live for today, why bother? Well, the reality is that we might not die today. In fact, odds are we won't. Odds are we'll live for a long time.

So each day we're faced with a set of choices and depending upon our mindset we'll behave differently.
* Save or spend?
* Eat or diet?
* Study or play?
* Work or golf?
* Chase your dreams or be responsible?

The carpe diems of the world are now in foreclosure. Others live to regret all that time they spent at the office. Either way the temptation is to some day live with regret.

Everyone has to come to their own conclusions, but when all is said and done I've chosen to live each day as though it won't be my last. In fact, I'd like to believe that there is no 'last', which is why I celebrate Easter. Either way, since regret is inherent in the paradox, it seems worth setting aside as much as possible and replaceing it with joy in the good choices made.

Seize the day, that you might enjoy the next, and the next, and the next.

Tuesday, April 01, 2008

A Tax Fable

Suppose that everyday 10 men go to PJ's for lunch. The bill for all ten comes to $100. If it were paid the way we pay our taxes, the first four men would pay nothing; the fifth would pay $1; the sixth would pay $3; the seventh $7; the eighth $12; the ninth $18. The tenth man (the richest) would pay $59. The 10 men ate lunch in the restaurant every day and seemed quite happy with the arrangement until the owner threw them a curve.

"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20." Now lunch for the 10 would cost only $80. The first four are unaffected. They still eat for free. Can you figure out how to divvy up the $20 savings between the remaining six so that everyone gets his fair share?

The men realize that $20 divided by 6 is $3.33, but if they subtract that from everybody's share, then the fifth and the sixth man would end up being paid to eat their meal. The restaurant owner suggested that it would be only fair to reduce each man's bill by roughly the same amount that each paid and he started to work out the amounts each should pay.

And so the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of $59. Outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20," declared the sixth man pointing to the tenth, "and he got $7!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got seven times more than me!"

"That's true," shouted the seventh man. "Why should he get $7 back when I got only $2? The wealthy get all the breaks."

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor."

Note: I have not checked the math on this, but believe it is directionally correct. The numbers I've seen from the Congressional Budget Office show that the top two guys in this fable would actually pay $85 at the outset, not $77 (which is coincidentally $2 higher than it would have been before Bush's tax cuts "for the rich".

Best of October 2007

We're now under a week from a very relaxing and generally inspirational weekend in front of the TV. Six months ago I reviewed my highlights from April 2007. Here they are again this time around. Here are my top five discourses I will most want to remember and review as the years go by, in reverse order.

The Only True God and Jesus Christ Whom Thou Hast Sent - Holland

"So any criticism that The Church of Jesus Christ of Latter-day Saints does not hold the contemporary Christian view of God, Jesus, and the Holy Ghost is not a comment about our commitment to Christ but rather a recognition (accurate, I might add) that our view of the Godhead breaks with post–New Testament Christian history and returns to the doctrine taught by Jesus Himself."

The Great Commandment - Wirthlin

"The most cherished and sacred moments of our lives are those filled with the spirit of love. The greater the measure of our love, the greater is our joy. In the end, the development of such love is the true measure of success in life."

God Helps the Faithful Priesthood Holder - Eyring

"But it is never going to be easy for you or for those you serve. There will always be pain in service and in the repentance necessary to bring the power of the Atonement to change hearts. That is in the nature of what you are called to do. Think of the Savior, whose service you are in. At what point in His mortal life can you see an instance when it was easy for Him? Did He ask easy things of His disciples then? Then why should it ever be easy in His service or for His disciples?"

O Remember, Remember - Eyring

"Tonight, and tomorrow night, you might pray and ponder, asking the questions: Did God send a message that was just for me? Did I see His hand in my life or the lives of my children? I will do that. And then I will find a way to preserve that memory for the day that I, and those that I love, will need to remember how much God loves us and how much we need Him. I testify that He loves us and blesses us, more than most of us have yet recognized. I know that is true, and it brings me joy to remember Him."

Slow to Anger - Hinckley

"I plead with you to control your tempers, to put a smile upon your faces, which will erase anger; speak out with words of love and peace, appreciation, and respect. If you will do this, your lives will be without regret. Your marriages and family relationships will be preserved. You will be much happier. You will do greater good. You will feel a sense of peace that will be wonderful."

Honorable Mentions

Blessed Are the Pure in Heart - Clayton
Mothers Who Know - Beck

Reflections:
Amazing how many of my favorites are from the Saturday evening session - is it because I pay closer attention or is it unfair to women?
Grateful to get more than one talk out of Eyring each time. I wish Holland and Bednar could also be in the First Presidency.
Grateful to be on this side of the ocean - Sunday afternoon had some great talks, given in the middle of the night in Joburg
I love talks that make me think - I think Beck wins this award for me and most.
It won't seem quite right without Pres. Hinckley behind the podium he grew and built, but I expect widows to be well taken care of during the next decade or so which is a good thing.
I'll go with H David Burton for $1200.

Dumb politics, on energy

Five executives from Big Oil are set to be grilled today by Congress on why it is that they are so greedy that even though they made record profits last year they still think they qualify for tax breaks of $18B.

Unquestionably, these are great times to be in the oil business. Sunk investments from the past are now reaping high rewards as the developing world has pushed oil prices over $100/barrel. However, let's think just a bit about what's really going on here.

Say you got a raise last year and made more money than you ever have. (By the way, the whole idea of things is that each year you try to make more money than last year since things just keeping getting more expensive, so one hopes that every year is a record year.) You did well last year, perhaps even collected a handsome bonus at the end of the year for your hard work. Now the IRS calls you in for an audit. They'd like to reneg on deducting your charitable donations and your mortgage interest. "Wait a minute," you say, "I played by the rules and was planning on those deductions. Without them I'm going to have a hefty income tax bill."

"Well, that's only fair. You made good money last year. You should pay more."

"But I did pay more. I pay a percent of my income, and that percent goes up as I make more."

"Yeah, but it's still not enough..."

Let's strip apart what Big Oil has really done.

If you held Exxon Mobil for the last five years, you'd be really happy. Their stock price was around $36/share five years ago and is now over $82/share - over a 100% increase over five years or 18% per year - that's very good.

However, if you'd held their stock for the previous five years you would have bought at $35/share - a $1 increase over five years. Pretty miserable. So in the most recent five years things went well, but over the entire ten year period you would have had a return of 9%, which is basically the market average.

And those record profits? Exxon Mobil made $39.5B last year!!! To calibrate that, you have to know they are the largest company in the world, with revenues of $377B, which means their net margin is 10%. AT&T made 12%. Kraft made 8%. Is 10% unreasonably high? Should they give some back?

My concern with these profit witch hunts that happen from time to time is that they undermine one of the things I like about capitalism and that is that it basically follows the law of the harvest. That which you sow, so shall you reap. Or better said in this case, as you explore and drill, so shall you pump and refine. If you take away later returns, you stifle earlier investment. As (yet another) aside, this is precisely the logic that comes down from time to time when a pharma company makes huge profits off a blockbuster drugs. After billions of dollars of R&D and ten years of regulatory hoops, they hit the jack pot and then everyone gets mad, often even those whose lives and lifestyles they are improving.

So Congress would apparently like Big Oil to do one of two things (in the name of Big Government):
1) Give money back to the government, give up on the tax breaks. All of you that would decide to give a little something extra to the government if you get a good bonus this year, please raise your hands. Anyone? How about $18B? Where's the love? Where's the gratitude?
2) Cut price and give money back to the people. Supply and demand are balanced by price. If you cut price you increase consumption. Do we need to consume more oil? Is higher consumption something we want to encourage?

I do agree with one assumption underpinning this procedure. If someone wastes the people's money - they should give it back. After wasting all this time and money, shouldn't members of Congress take a pay cut? And as long as we're at it, I feel they should void their pensions after their baseball steroids probe.

Saturday, March 29, 2008

Dumb politics, v. 2.0

Can I rant once more this week?

I've spent a lot of my adult life with people or in places where there is a decidedly liberal bent. I've routinely been in cultures or climates where a conservative American viewpoint is unfathomably naive and foolish. Only the uneducated, those who muscle their way past one another to quarrel on Jerry Springer or watch tractor pulls, could possibly follow such a backward worldview.

I've also spent most of my overall life living in one of two of the most conservative states in the US - Utah and Texas. This week I was in a conversation with two guys I admire a great deal and one of them expressed his opinion that the only way someone could become liberal is to simply not be fully educated in the truth.

So it is very clear to those centered in either American party that if people were simply fully educated, they would clearly see the world their way.

My impression is that the good thing about a multi-party system is that sometimes two or more truths may intersect at an issue where they become mutually exclusive so we have to choose the better of two truths, which is rarely simple unless you don't think too long about it, reduce it to sound bites and slogans, or hold one of the truths far more strongly than the other (and expect that others should as well).

A prime example of this for me is the abortion issue. For most, this is reduced to a sound bite and a slogan. For some, either choice or life is so clearly more valuable than the other that this is a non-issue. However, I think for most, when we think deeply about this, there's truly a paradox in play. Even someone who is ardently pro-life would agree that choice is important and there is a point at which choice is paramount, even if that is before conception (e.g., a woman should have a choice of who she sleeps with and when. She should not be a victim - she has choice). Even someone who is ardently pro-choice would agree that life is important and there is a point at which life is paramount, even if that is after birth (e.g., a woman should not have a choice about killing her three day old infant). So at the extremes we can agree that early on, choice prevails and later on life prevails. But when does that switch get flipped? For some it is at conception, for others it is shortly thereafter, for others at "quickening", for others during first trimester, for others at birth, etc. So we are not pro-choice or pro-life, but we are all both, with a disagreement over timing. Lawyers who are active in this debate know that the whole question is about timing - very few of the rest of us understand this, or at least acknowledge it.

My point in this is not really to debate abortion, a topic so visceral, but to make a point using a visceral topic, that politics is beautiful when it creates tension between truths and makes us stretch our minds to comprehend those tensions and make choices and trade-offs, individually and collectively.

Unfortunately, politics is rarely beautiful or philosophical. Instead of marrying a tension between two truths, it is generally a tension of two falsehoods or criticizing one another's truths. Somehow I got on Planned Parenting's mailing list and routinely get letters asking me to donate so they can fight against the "anti-choice" zealots. So you are either anti-choice or anti-life. Nice. The pro-life lobby could never have convinced me so well of their validity and usefulness as the Planned Parenthood did, though entirely unintentionally.

A Sunday School teacher I admire greatly once taught me that ethics and truth are rarely interesting when they lie along lines that are well-established. The interesting parts come about in the gaps between these truths. I would simply add that they are also interesting when they intersect and sometimes oppose one another. Perhaps my liberal and conservative friends might take solace in knowing that many times they are both right.

Friday, March 28, 2008

Dean's ring

Here's an mpg of Dean's ring from his earlier post.

Dumb politics


So everyone's convinced that we're headed into recession. All sorts of indicators are lining up in its favor. I'm positive we are because I hold the keys to the most correlated indicator - I'm making a push for partner. :)

At any rate, I'm a bit exhausted this week with the political rhetoric I've been listening to on the way to and from work and have to vent a little. I feel like I've heard at least 50% of our congress say the same line this week - "If this administration can rush to bail out a big, fat, greedy Wall Street bank, why can't they spend some energy finding ways to bail out mortgage holders who now may lose their homes through no fault of their own to the big, fat, greedy mortgage companies." Pffft.

I'm actually quite sure the politicians that are saying this know what they are saying but say it anyway. Just want to make sure you do.

Let's dissect this just a smidge and understand it. So the big, fat, greedy Wall Street bank in question is Bear Stearns. Even by Wall Street standards they really are big, fat, mean and greedy and had more than a few enemies. A few weeks ago their stock price was around $100/share. They only had a few 1,000 employees in New York - most of this value was held by the public markets - index funds, 401ks, pension funds, etc. Some hedge funds (also mean, fat and greedy) recognized that Bear had a lot of exposure to the subprime mortgages and start to short the stock (read: sell it). As the value of Bear Stearns started to drop, something happened that completely destroys a trading company - people lost trust that they were going to make it. If what you do for a living is trade, and people don't trust that you can make good on your trades, and no one wants to trade with you, you're dead. This is called an abrupt shift in trading liquidity. Their stock plummeted. On Friday they closed at ~$35/share. Monday morning it was clear they would be bankrupt ($0/sh). JPMorgan offered to keep the company alive and buy it for $2, but only if the Fed would back up the credit in the company to the tune of $30B, if I remember correctly. So the net effect was that the owners of Bear Stearns basically lost everything -98% of the value- in a matter of about a week. What was $18B in value fell to $240M.

Who lost 98% of their money? Mostly pensions, 401ks, investors, and the employees that had shares in the company. You, the reader, probably lost some of that value somewhere deep in one of those Fidelity mutual funds in your 401k. James Cayne, chairman of Bear Stearns, had been one of the wealthiest men in America (#388 on Fortune's Top 400 Wealthiest Americans), worth $998M two weeks ago. He sold his stake today for $61M (still a lot of money, admittedly).

I lived through a very similar situation a few years ago. I'm amazed no one has talked about the parallels between this situation and the Enron trading situation. I believe the reason is that no one really wanted to understand what happened at Enron. Kinda like this time. Everyone wanted to blame all those lost pensions and employee fortunes on big, fat, mean and greedy Ken Lay. I need to be careful here not to defend the guy because he really was big, fat, mean and greedy. However, the collapse of Enron was not about shady deals or off-balance sheet vehicles, at least not directly. Those were the stimuli that created a loss of confidence in a trading company (energy trading instead of mortgages). Shady deals were to Enron what subprime mortgages were to Bear Stearns. People lost confidence in Enron (who was #5 on the Fortune 500 at the time), so they couldn't trade.

Let's step back and give an example of what happens. If Bobby owes June $100 and June owes Billy $100 and Billy owes Jake $100 and Jake owes Bobby $100, everyone's comfortable because everyone's going to get their $100 and no one's too worried about it as long as everyone trusts each other. But if suddenly everyone realizes that June doesn't have $100 and is moving to Buenos Aires, the system is shocked. Jake freaks because he realizes Billy isn't going to get $100 from June to pay him with. The whole system starts to fall apart. Now realize that trading companies by their nature have a lot of obligations like this, but they are all "closed" - I've lent from company A and to company B. If I put $100 in the bank and they turn around and use that $100 to give someone a loan on their home, you see how this works. I don't have "open" trades unless I borrow without lending or lend without borrowing. I can have some open trades, but not many, before I need an awful lot of cash to cover.

After Enron collapsed, I worked for one of the Jakes or Billys of the energy industry. They had done nothing wrong, but their portfolio was now in utter disarray because all the trades on their books were now open and exposed (by the way, these are trades where revenue has already been booked due to mark-to-market accounting). We worked feverishly for a month to try to save the company and unwind deals the best we could. That entire industry basically unravelled. Everyone knows about Enron, but people outside of energy generally don't realize that the damage cascaded through the entire industry, destroying people's retirement plans and causing hundreds of thousands of layoffs.

What the Fed did in saving the skeleton of Bear Stearns is they tried to keep this from happening. The fat, greedy guys lost 98% of their value. Many of them had already lost their jobs. The trick was to make sure this did not roll through Wall Street. It wasn't a bailout of greedy, fat guys unless you think Americans are fat and greedy. It was an attempted bailout of the financial sector - remember, asset-light energy trading effectively evaporated.

Should the government bail out homeowners as well? Some of the same logic applies, but there are a few differences.
1) Incentives - if you bail people out (see: hurricanes and home insurance), they have no incentive not to take undue risk. Take on risk and the government will save you. The counterargument is that now businesspeople have the same incentive problem. Um, the owners of Bear Stearns lost 98% of their value and the credit managers long ago lost their jobs. I think they have a pretty strong incentive not to do this again.
2) Bear Stearns shareholders lost everything, or at least 98% of everything, but can keep people employed and the machinery working if they don't go away. Bailing out homeowners keeps them from losing anything. In many cases they don't have much to lose since their home is a borrowed asset. They go from little net worth to little net worth and bad credit living in an apartment. They don't lose everything - the creditors just take back what never was theirs, or at least only marginally so.
3) The mortgage crisis isn't a loss of faith in large trading partners, it is a reduction in faith of many. The banks never trusted mortgage holders, they just mistrusted them less than they should have. Credit management is about estimating how many people will reneg on their commitments. They were wrong in their estimates, but no one is saying, "Wow, I've been trusting the public all these years and now the public is going away. I best not trade with the public anymore."
4) I think most importantly there's a massive difference in the real value of what the Fed would have to do. In the case of Bear Stearns they put up a large guarantee, but hope not to have to exercise the guarantee. It should cost the taxpayer nothing, but could cost $30B. They just lose a bit of interest because the Fed reduced the borrowing rate. The Economist estimates the loss of value from mortgage defaults will be about $300B - real money. It's hard to come up with that kind of cash. (By comparison, the current estimate for the war in Iraq so far is over $500B)

Let's be clear. The Fed is not in the business of saving anyone, private or corporate, for sympathetic or ethical reasons. They do it to stave off economic shocks. They saw Bear as a shock that the economy could not weather, with a relatively low cost to acheive, but so far believe mortgages do not have that same precipitous impact. Perhaps the mortgage crisis needs some intervention, but it is NOT because of some sort of equitable treatment thing between mortgage holders and Bear Stearns. It is also worth considering that today's interest rates, at a nearly negative real yield, are effectively a bail out - homeowners with equity can refi at an awfully low rate and save their homes. (if they have equity - if not, again, they aren't losing THEIR house)

That, undoubtedly, is the longest most rambling post evar. I'd edit it down (same content, half as long) but I gotta get to work.

How To Be Mugged

I heard this story on NPR this morning on the way to work and had to share it. I was mugged once and guarantee I did not have Julio's perspective or quick thought.

Click here.

Wednesday, March 26, 2008

Ready for the big game

I believe January is the best month for high-end TV sales in the US, even higher than the Christmas season, due to preparations for Super Bowl parties.

We bought our TV before moving to Chicago in 1996 because we knew we would be starving students without a way to buy one later. The logic was to buy a TV right away before we had no money and would decide raman would be more prudent. Good move - we didn't starve and it became the mecca for watching Jazz/Bulls Finals and the Utes' trip to the Final Four. It has lasted through about nine moves, several generations of video game consoles and a lot of Super Bowls, most of which we probably didn't watch.

Well last week we finally replaced the TV. Yesterday Katie brought home the new couch to complement the TV, rounding out my ability to successfully avoid exercise and watch reruns of Arrested Development instead.

As I plopped down on the couch last night and took the remote lovingly in hand I thought about the fact that there's a big game coming up. It's not the Super Bowl. It's not even March Madness since the Utes are irrelevant this year. Nope, this year and this time the big game is coming up next weekend. When I sustain Pres. Monson as the new leader of the church, I'll be able to see every pore in his face. Then I'll snuggle into the cushions of my new couch until time to make Conference Brunch and lament being so far from family for Katie's favorite time to be with family. The waffles and bacon never taste quite the same when it's only (!) the eight of us.

By the way, Boo asked us to call JB and invite her to come over for conference, so consider yourself officially invited. Just drop by. We've got a big screen and plenty of room on the couch.

Moore's Law's Effect on Education

Will technology blow up the classical concept of education? Ty and Aaron are probably closest to this. Cool article by Cringely.

Monday, March 24, 2008

Sunday, March 23, 2008

Friday, February 22, 2008

Martin Marty

Never heard of him. Apparently the Institute for the Advanced Study of Religion at my alma mater is named after him. The Institute has a pretty cool little service they call Sightings that I'd never heard of but think I'll be paying closer attention to now that I just read two articles published therein.

My friend (at least I consider her my friend) Kathleen Flake's essay on President Hinckley's funeral.

An article rebutting the hate speech leveled at Mormon's during Romney's campaign.

Both well-written, respectful and uplifting. If all of their articles are of this caliber I think I may have found a new "regularly read".

Thursday, February 21, 2008

Banging, cont.

So I thought the story was outstanding, but tonight it got even better.

I was on my way home from work and called to see how things were going in our sweet corporate apartment. "Well, I just said goodbye to a policeman". Hmmm. Our neighbors now called the police. Surely the police would look at the situation and realize these guys were hypersensitive, right? Nope. He watched Lucy practicing her new two footed hop and Porter running across the room and confirmed that we could indeed receive a citation for the local noise ordinance for that. Huh? This is the state that gave us Kelli Clarkson and my five year old running or my two year old learning to jump with two feet is citable? Good grief. The oppression of electric fence in Joburg suddenly feels less onerous.

So there are only a few ways to respond to this sort of thing:
1) Retaliate. Light a bag full of human feces on fire on their doorstop and run for it.
2) Avoid. Move the kids to the other apartment and pray the second floor neighbor is less extreme on that side of the building.
3) Apologize.

Guess whose ideas these belonged to. Katie won with #3 by a hair over my favored approaches. As it turns out the people below us are very nice. We had a long talk. I thought for sure he'd be some ornery, feeble old fart. Actually, they're from Brazil, had really crappy neighbors right before us and have been deathly ill. He also works at 2 am and goes to bed at 7 pm. We apologized, as did they. We'll try harder. They'll lay off the 911 for seven days so we can get out of their hair.

As always, Katie was right. I've got to believe that even cops in Texas would have appreciated the flaming poo bag though.