The Hyper Creative Soul: Ginsberg, Dingman & Lazaroff

Allen Ginsberg

By Michael Hooper

The artist is the sum of multiple parts. As they develop their own style, the students of art borrow from the masters of their craft, emulating techniques and ideas that will help them achieve their artistic goals.

My friend artist Joe Mettenbrink said there is a person behind my recent immersion into oil painting: The spirit of Arlen Lazaroff, a Nebraska poet and friend of mine for 20 years.

I was shaken by the thought, but Joe is probably correct. I made a turning point in my portrait drawing after I painted Arlen, his spirit was with me as I drew and painted him. I loved Arlen's total devotion to art and poetry, making paintings, found art displays, poems, stories and books, he was committed to art 24 hours per day, seven days a week. He worked on the art to the exclusion of everything else, including his health, like Vincent Van Gogh (Arlen died at age 46 in 2005). Arlen's artistic activism was sometimes crude but made a statement. His End of Sex is the Beginning of a Family was censored in Fremont, Neb., along with another piece by Margery Coffey. Arlen wrote the ghost town is a metaphor for the world's abandoned and forgotten people and places.

Photo of Arlen Lazaroff by Eadweard R. York

Arlen said he wanted to live as a poet and work on poetry 100% of the time. He failed at most of his jobs until he finally found his dream job selling records for Kanesville in Council Bluffs, during the final two years of his life.

Another influence in my life is Harry Dingman III, my brother-in-law, an artist and musician completely devoted to an artistic lifestyle. Harry showed us a way to make art in everything, including family, food, friendships, exercise, yoga, travel. Sketchbook always nearby, he documents life with drawings and paintings; everything Harry does is an opportunity for an artistic experience. His guitar style is distinctive yet versatile in the bands For Against and The Millions and Battleship Grey. When For Against toured Italy I was fortunate to go along and see this La Dolce Vita, the sweet life. The band was showered with affection. One night we had dinner with a group of artists, poets, writers, journalists and musicians and talked for three or four hours and ate all this fabulous food, one course after another all night with great wine and beautiful conversation. This was Food and Dining as Art. I met an Italian poet who was writing a book about Robert Smith's poetry in The Cure. WTF? This is way too cool.

Harry Dingman and Jeff Runnings in Brooklyn, NY. Photo By Michael Hooper

Harry and I toured The Vatican and saw the sculpture called the Pieta by Michelangelo, the luminescent Mother Mary with Jesus. The sculpture of granite is lifelike. All of this art left an indelible impression on me.

Meeting Allen Ginsberg was life altering in the early 1990s. He and I had a brilliant conversation together in the short time that we talked, he signed my book of his poetry and he drew a picture of a flower. He exuded art. He was art. He is an icon. He inspired a generation of radicals, beatniks and fairies. My encounter with him still lives. He asked me what brought me to Lincoln, Neb., and I said you, I've always wanted to meet you. He asked me what I did and I told him I was a reporter at the Grand Island Independent writing about rural life in 14 counties in central Nebraska. He said he once lived in a commune in a rural part of upstate New York with his lover Peter Orlovsky. Beatniks followed them there, and they had parties and worked on poetry and art projects. I especially remember how Allen Ginsberg looked into my eyes and down into my soul. I felt a lasting connection. That is why I want art with a soul, with eyes looking back at me.

I admired Ginsberg's way of gathering up a storm of poets and artists to march for causes that were important to him including fighting censorship, civil rights, the legalization of marijuana and saving the environment.

I learned a lot from these people. In a way I'm still emulating and learning from them while trying to come up with my own voice, my own distinctive style. This is perhaps the hardest challenge for every artist. They say there is nothing new under the Sun. Yet we create anyway, perhaps for the joy of creating, for the meaning it leaves behind. I think the artist must take chances in order to be independent, free, unique and an enlightened soul.

Life is short. Time is our most precious resource. I couldn't think of a more meaningful way to live than an artistic life devoted to the highest and best achievement in work, family, friends, art and life. It is the art of conversation, the engaging with all things in nature, people, animals, trees and land. We learn that to achieve great art, we must love deeply and profoundly. The greatest art is made with passion, desire and love. And that is the art of life.

Security Benefit Is Todd Boehly's Bank For Deals

By Michael Hooper


Security Benefit has become Todd Boehly's source of cash for investment deals.

Similar to Warren Buffett at Berkshire Hathaway, Boehly is using an insurance company's cash to make bets on other investments.

Security Benefit has invested in assets managed by Eldridge Industries, including real estate in Los Angeles like the Beverly Hilton, media companies like Dick Clark Productions and the Hollywood Reporter, plus the Los Angeles Dodgers. Eldridge also has invested in NPC International in Overland Park, Kan., which owns 1,237 Pizza Huts, plus 394 Wendy's Restaurants. NPC was founded by Gene Bicknell of Kansas.

Boehly, 45, is chairman and chief executive officer of Eldridge Industries LLC, which owns Security Benefit and SE2, both based in Topeka. He is also a 20% owner of the Los Angeles Dodgers. 

Eldridge Industries  describes itself as a private investment firm that manages businesses across diversified industries, headquartered in Greenwich, CT, with offices in New York, London, and Beverly Hills. 

Boehly and Guggenheim Partners invested some $400 million into Security Benefit in 2010 when the company was struggling during the financial crisis that began in 2008. Now Security Benefit earns nearly that amount of money in profit every year. Boehly later bought Security Benefit from  Guggenheim and put it inside of Eldridge Industries, effective Feb. 1, 2017.

The proceeds from the sale of annuities sold by Security Benefit are used for investments. The strategy is to make a high enough return to cover the expenses and obligations of each annuity with profit leftover for Security Benefit. The income from mortgages, bonds and investments provide cash flow to pay for annuity obligations.

In 2018, Security Benefit earned $370 million. And in 2017, the company earned $388 million (which does not include the month of January 2017, when it was still controlled by Guggenheim), according to the company's filing with the SEC. That document shows Security Benefit has a book of $3.2 billion in "related-party transactions," mortgages and investments in media, hotels and real estate in Los Angeles and Europe.

Page 98 of the SEC filing says the $3.2 billion in "related-party transactions" are investments in related parties, and are also included in mortgage loans and fixed maturity investments under consolidated balance sheets.

For example, Security Benefit listed investment of $215 million to American Media & Entertainment, LLC, a Los Angeles-based media group. Security Benefit owns a piece of KLAC-AM 570 in Los Angeles.

Security Benefit also provided $351.6 million to American Media Productions, LLC, a startup media firm launched by the Los Angeles Dodgers. Security Benefit began its partnership with the Los Angeles Dodgers in 2014. The Security Benefit Field Level includes 11,000 seats in the stadium.

Security Benefit provided $595 million to Cain International LLC, a real estate investment group that owns the Waldorf Astoria Beverly Hills and the Beverly Hilton, as well as properties in Europe.  

Many of the Security Benefit investments are to CBAM LTD, an Eldridge Industries company that is an alternative investment adviser and manager of collateralized loan obligations. CBAM has about $11 billion of assets under management, a lot of it from Security Benefit.

The book of $3.2 billion in investments/mortgages is just under the $3.3 billion in equity in Security Benefit. That seems a bit high of insider-related loans relative to the total assets and total equity in the company, said David Tangeman, a Houston accountant and native of Kansas. It's not a problem if the securities perform well.

Eldridge Industries is named after the Eldridge Hotel in Lawrence, according to an article by Barrons. When Boehly first came to Topeka in 2010, the hotel where he was supposed to stay was closed at the front door, when he arrived in the dark, early morning, the article said. So he went across the street and got a room at another hotel. But that room was smoky. So he took some blankets and spent the night on a park bench. The next time he came for a visit, he got a room at the Eldridge Hotel in Lawrence, the article said.

Another way Eldridge Industries benefits from Security Benefit is by offering financial advisory services, for which Security Benefit paid $93.9 million in 2018 to Eldridge. Eldridge also has received $30 million in dividends in 2018 and $20 million in dividends in 2017 from Security Benefit. Despite these payments, Security Benefit has received about $950 million in new capital from Eldridge in the past two years, to support the growth of Security Benefit and improve its ratings.

The improvement of the balance sheet has earned the company excellent financial strength ratings by Standard & Poor's and A.M. Best, both offering A- ratings. The ratings have steadily improved since 2009 during the financial crisis.

Security Benefit also filed financial information to regulators in Kansas.

Security Benefit has about 1,300 employees with about 1,100 in Kansas. The firm focuses on the U.S. retirement market with fixed, fixed-indexed and variable annuities and mutual funds.

The Standard & Poor's 500 Index did not perform well in 2018 dropping -4.38%. And while stocks didn't do well in 2018, most bonds didn't fair much better. Long-term bonds and intermediate-term bonds lost value in 2018 because of rising interest rates implemented by the Federal Reserve Board. Short term bonds actually performed best in the bond sector, posting modest gains in 2018. Security Benefit owns a lot of bonds, including government and commercial securities.

In 2019, so far, the value of intermediate and long-term bonds have recovered somewhat as the Fed has slowed down its projections of raising interest rates and may curtail or even cut interest rates. However GDP grew 3.2% in the first quarter of 2019, blowing away estimates by analysts, raising concerns that the Fed may consider more interest rate hikes.

Security Benefit has $37.4 billion assets under management. Annual revenue was about $4.2 billion in 2018. SE2 has about $90 billion of assets under administration.

When retirees consider how to fund retirement, sometimes they turn to mutual funds or annuities, or a combination of both. Security Benefit is in a great position to offer multiple products in the retirement sector including mutual funds and fixed and variable annuities. Security Benefit's SE2 subsidiary takes care of administration of annuities for a variety of clients and financial firms.

Mike Kiley has been CEO of Security Benefit since September 2011.

David Tangeman contributed to this article.

Flooding Hurts Railroads

Crews repair flood damage at a rail crossing in Plattsmouth, Neb., on March 22, 2019. Photo courtesy of BNSF Railway

By Michael Hooper

Damaging floods hurt railroads in the first quarter of 2019, contributing to a decline in traffic at Union Pacific and BNSF Railway.

Carload traffic at Union Pacific (UNP) was down 5% in first quarter 2019 compared to first quarter 2018 but saw a gain of 4% in intermodal traffic. Overall traffic in the first quarter was down 1% through week 13 at Union Pacific, according to weekly carload reports published on the company's web site.

Overall traffic at BNSF Railway was down 5% in the first quarter, with declines in coal, grain, and food but nice gains in the movement of petroleum, according to BNSF Railway's weekly carload reports.

BNSF Railway, owned by Berkshire Hathaway (BRKB, BRKA), moved 2.48 million car loads and intermodal units in the first quarter, down from 2.62 million in the first quarter 2018.

And Union Pacific moved 2.10 million car loads and intermodal units in the first quarter, down 1% from 2.13 million in the year-ago quarter.

Both UNP and BNSF suffered millions of dollars in losses due to flooding in the Midwest. There are places where rails  alongside rivers were wiped out, the ballast completely washed away. The railroads responded with a high degree of professionalism, helping people get to safety and rerouting traffic around the damaged rail lines.

BNSF and Union Pacific used technology like drones to inspect flooded railyards and bridges. 

The Association of American Railroads says that waters rose to historic levels in more than 40 locations in the Midwest, due to melting snow and ice and rain.

"BNSF and Union Pacific continue to work day and night to restore service as quickly and safely as possible," AAR said. "Collaborating with local and government agencies, the railroads are rerouting shipments, communicating with customers, assessing and repairing damage, and supporting local communities. For example BNSF recently used drones to keep employees safe while inspecting bridges and UNP used high rail vehicles to move evacuees out of the Missouri River Valley to a local shelter."

Meanwhile traffic at East Coast railroads and Canadian National Railway were less affected by floods. Canadian National Railway actually saw an increase in rail traffic of 13,400 car loads/intermodal traffic or an increase of 0.9% in the first quarter.

Norfolk Southern saw a small increase of 7808 carloadings/intermodal units in the first quarter to a total of 1.31 million.

CSX saw no growth in the first quarter, moving 1.5 million carloadings in the first quarter, the same as first quarter 2018.

It is likely the damage to Union Pacific and BNSF Railway will hurt earnings in the first quarter. Another factor that may affect them this year is the flood damage to farms.

Many farms in the river valleys saw destruction of grain from the floods. Some of that grain was stored on the ground and will be a total loss. Livestock also suffered from the floods. This may affect the amount of grain and food products that railroads move from the Midwest in 2019.

Railway Age reported significant damage to UNP and BNSF Railway. Here is what the rail media company said,

"Union Pacific has suffered widespread service disruptions from flooding and track washouts in the Iowa-Kansas-Missouri-Nebraska four-state area. Five subdivisons (Omaha, Blair, Columbus, Lincoln, Falls City) suffered substantial damage in the flooding. Service is expected to be restored soon on the Blair Subdivision. But in other areas, including Falls City, where water remains over portions of the rail, it’s just too soon to estimate when service might be restored.

"Meanwhile, BNSF Railway reported track closures in the same area, along with additional closures in North and South Dakota, and Illinois near the Mississippi River. “We are now confronting major flooding issues in the region, particularly in eastern Nebraska and western Iowa, as multiple subdivisions are currently out of service due to track washouts,” the railroad said. More significantly, much of the BNSF main line in South Dakota and from Alliance to Omaha, Neb., was out of service," Railway Age reported.

I have been buying stock in Canadian National Railway (CNI) lately, picking up shares at $86, $87 and $90 per share. CNI is the only transcontinental railway in North America with connections to the Pacific, Atlantic and Gulf of Mexico. Canadian National's net profit margin is an outstanding 30%. And management has been getting 15% return on invested capital.

Disclosure: The author of this article owns stock in Union Pacific (UNP), Canadian National Railway (CNI) and Berkshire Hathaway (BRKB, BRKA).