Friday, December 31, 2010

Shower the people you love with love.................

What is right in the residential real estate world?

Affordability:  Been doing this for a long time now.  I don't
remember a time when buying a house was more affordable.
Between falling prices, stupid low interest rates, and lots
of selection, I'm not sure what a potential buyer is waiting
for.  Time to get in the game.

Activity:  This is sort of like Goldilocks. In 2005 the
market was too hot.  In 2009 the market was too cold.
In 2011 the market should be just about right.  Time to get
in the game.

Acceptance:  I am not in the front lines of selling houses,
but I am an interested observer.  Looks to me like most
people have accepted that things have changed and that
the values of 2006 are gone, gone, gone.  No sense
waiting for the glory days to return.  The question to
answer now is, "what is the next right step."  Time to
start rebounding and rebuilding.  Time to get in the game.

Advantage:  For the first time since I was licensed in 1977
an investor can buy a single family house, finance it with a
nominal down payment, rent it, and have the rental income
make the mortgage payment.  It never quite worked that
way before.  It really is time to get in the game.

Makes sense to me...................

"The most radical revolutionary will become conservative the
day after the revolution."
-Hannah Arendt

"The man who never alters his opinion is like standing water,
& breeds reptiles of the mind."
-William Blake

"The chief cause of human error is to be found in prejudices
picked up in childhood."
-Rene Descartes

"The guiding motto in the life of every natural philosopher
should be, 'seek simplicity and distrust it.' "
- Alfred North Whitehead

"Marxism is the opium of the intellectuals."
-Edmund Wilson

"Liberty has never come from government.  Liberty has
always come from the subjects of government,  The history
of liberty is the history of resistance."
-Woodrow Wilson

"Bureaucracy, the rule of no one, has become the modern
form of despotism."
-Mary McCarthy

Speaking of card tricks................

Just master this trick and you can wow your friends tonight!

Thanks George

How sure are you about that.............?

"Sovereignty lies in me alone.  The legislative power is mine
unconditionally and individually."
-Louis XV        1766

"Remember, the German People are the chosen of God.
On me the German Emperor, the spirit of God has descended.
I am his sword, his weapon, his vice-regent."
-Kaiser Wilhelm II       1914

"My good friends, this is the second time in our history that
there has come back from Germany to Downing Street peace
with honour. I believe it is peace for our time. We thank you
from the bottom of our hearts. And now I recommend you to
go home and sleep quietly in your beds."
-Neville Chamberlain        September 30, 1938

"Lying is forbidden in Iraq. President Saddam Hussein will
tolerate nothing but truthfulness as he is a man of great honor
and integrity. Everyone is encouraged to speak freely of the
truths evidenced in their eyes and hearts."
-Mohammed Saeed al-Sahhaf, "Baghdad Bob"   2003

A whole lot of rigging going on....................

This blog has commented on the "well worn path", or revolving
door if you would prefer, between the temples of finance on Wall
Street and the corridors of power in Washington D.C.  If you
have been following along, you know my bias is that this is not
a good thing for 93% of our country.

The Boston Globe looks at this business of inappropriate use
of government service in a similar, but slightly, different vein:

"In some years, the move from general staff to industry is a
virtual clean sweep. Thirty-four out of 39 three- and four-star
generals and admirals who retired in 2007 are now working
in defense roles — nearly 90 percent.

And in many cases there is nothing subtle about what the
generals have to sell — Martin’s firm is called The Four Star
Group, for example. The revolving-door culture of Capitol
Hill — where former lawmakers and staffers commonly
market their insider knowledge to lobbying firms — is now
pervasive at the senior rungs of the military leadership."

It hasn't always been this way.  It can't be a good thing.
Full post here

Thursday, December 30, 2010

Joy Ride...................

Practice, practice, practice...........

"Repeated practice is one of the most basic principles of most
spiritual and meditative paths.  In other words, whatever you
practice most is what you will become.  If you are in the habit
of being uptight whenever life isn't quite right, repeatedly
reacting to criticism by defending yourself, insisting on being
right, allowing your thinking to snowball in response to
adversity, or acting like life is an emergency, then,
unfortunately, your life will be a reflection of this type of
practice.  You will be frustrated because, in a sense, you have
practiced being frustrated.

'Likewise, however, you can choose to bring forth in yourself
qualities of compassion, patience, kindness, humility, and
peace - again, through what you practice.   I guess it's safe
to say that practice makes perfect.  It makes sense, then, to
be careful what you practice."

-Excerpted from Don't Sweat the Small Stuff by Richard Carlson

We are capable of doing.............. much more than we know.

Thanks Sean

Oil and Water, continued.........

A few more excerpts from  What Went Wrong?  by Bernard
Lewis. The hardback book, published in 2002 but written before
9/11, has the sub-title Western Impact and Middle Eastern
Response.  The paperback edition, published a year later, has
the sub-title The Clash Between Islam and Modernity in the
Middle East.

"The status of women, though probably the most profound
single difference between the two civilizations, attracted far
less attention than such matters as guns, factories, and

"According to Islamic law and tradition, there were three
groups of people who did not benefit from the general
Muslim principle of legal and religious quality - unbelievers,
slaves, and women."

"Nevertheless the struggle for the emancipation of women
made some progress in the socially and economically more
advanced parts of the region and has become a major target
of different schools of militant Islamic revival.  The Ayatollah
Khomeini, in particular, gave it a prominent place in his
indictment of the misdeeds of the shah and the crimes of his
regime.  From a traditional point of view, the emancipation
of women - specifically, allowing them to reveal their faces,
their arms, and their legs, and to mingle socially in the school
or the workplace with men - is an incitement to immorality
and promiscuity, and a deadly blow to the very heart of
Islamic society, the Muslim family and home.  The battle

Who is being unrealistic..............?

While reading through the National Association of Realtors
"Realtors Confidence Index"  (here), I was struck by the
following Realtor quote,

"Appraisers are using recently sold foreclosures and short
sale properties as their comps for non-distressed listings.
They are unwilling to make obvious adjustments needed
and thus end up with values that are totally unrealistic."

A question:  if foreclosures and short sales make up a significant
percentage of the real estate being sold, and if those sales are via
an open bid or auction setting, doesn't the general trend of those
sales, over time, begin to establish the true value of comparable
real estate?

A question:  if I am in the market for a four bedroom house with
a finishable basement (I am), and I knew that by buying a fore-
closure or a short sale I could save a significant amount of money,
why wouldn't I?

A question:  since buyers in a buyer's market tend to be a pretty
crafty bunch, and since buyers are most generally aware of the
huge selection of homes available via the foreclosure and short
sale process at enticing prices, are houses that are "non-
distressed" and are being offered with 2007 pricing strategies
truly on the market?

Tough time to be an appraiser.   Good time to be a buyer.

Wednesday, December 29, 2010

Stop, look, listen.................

Linky goodness............

Tom Asacker on living life with passion"Face it: We are either
breaking out of our spirit-sucking routines and breaking
through to new insights and experiences, or we are breaking
down."  Full post here.

Alan Webber on a different lesson from Wikileaks:  "So far,
WikiLeaks is a Rorschach test of how far America has
traveled down the road to national paranoia."  Full post here.

Michael Wade on taking time:  "And there's the time-tested
way to trigger insights about your career.  Do something
completely unrelated to it."  Full posts here, here and here.

Seth Godin on being misunderstood: "Plan on being
misunderstood. Repeat yourself. When in doubt, repeat
yourself."  Full post here.

Pirate Equity on debating Paul Krugman: "Saving and investing
in productive capacity is what creates prosperity. Educating
our citizens to be at the top among developed nations in the
disciplines that will lead in the future is what creates
opportunity. Not just when we’re young, but throughout our
entire careers. Education should be a lifelong pursuit in this
country and it isn’t."  Full post here.

Path 1 or Path 2...................

"I’m a big believer in goals. I’ve found that there’s a
shocking correlation between setting them and achieving
them. I’ve also found the inverse of this be true. No goals
often translates into the second path of the image above.
Living every day like today no major disappointments but
no major progress either."
-Bryce Roberts.  Full post here

Like oil and water..........

"The idea that any group of persons, any kind of activities,
any part of human life is in any sense outside the scope of
religious law and jurisdiction is alien to Muslim thought.
There is, for example, no distinction between canon law and
civil law, between the law of the church and the law of the
state, crucial in Christian history.  There is only a single
law, the shari'a, accepted by Muslims as of divine origin
and regulating all aspects of human life: civil, commercial,
criminal, constitutional, as well as matters more specific-
ally concerned with religion in the limited, Christian
sense of that word."

-Excerpted from What Went Wrong  by Bernard Lewis

What we have here...................

Tuesday, December 28, 2010

Another nominee for E.'s Cool Hall of Fame...

Roundabouts?........we don't need no stinkin' roundabouts..........

Roundabouts seem to be gaining popularity with engineering and
planning types.   The first ones have appeared in Central Ohio.

Growing up, about the only time my mild-mannered father
consistently lost his temper was when we drove from Philly to
our cousins' house in New Jersey. 

The cause:  "those damn traffic circles."

How about we just do it the way the Indians do.................

Jim Rohn taught about..........

.."the set of the sail" for most of his adult life.  An excerpt from his
book,  The Five Major Pieces to the Life Puzzle:

"...the winds of circumstance blow on us all in an unending
flow that touches each of our lives...........What guides us to
different destinations in life is determined by the way we
have chosen to set our sail.  The way that each of us thinks
makes the major difference in where each of us arrives.  The
major difference is not circumstance, the major difference
is the set of the sail.........."

Sean Carpenter, a local sales trainer, has become a new teacher
for me.  His recent blog post picked up on Rohn's message, but
then he adds his own twist:

      When you take control of your sails in 2011,

       You will take control of your sales in 2011.

Thanks for the reminder Sean.

Would somebody please do something.............

Thanks Sean

I'm going to hazard a guess.......

.....that the only way to change your child's attitude, behavior, &
character in five days, is to first change yours.  Haven't read the
book, though.

Fun with snow......................

.........especially because it didn't hit Ohio.

December 2010 Blizzard Timelapse from Michael Black on Vimeo.

Thanks Chris

Monday, December 27, 2010

Take Five.................

A classic!   Enjoy...................

Thanks to Nan at WJPP

Let's get the heart pumping............

We are a strange and wondrous breed.   A theologically
minded friend once told me that the one question that God will
not answer is "Why?"   I have often told my kids, who were
great askers of the question "why", that the only answer is
"because!"   Enjoy!

Thanks Gerard

On the imperative of getting a BB gun for Christmas.........

While checking out the book shelves, my unconscious mind
reached out for the old paperback copy of Jean Shepherd's
 In God We Trust: All Others Pay Cash. When I was in junior
high school, Shepherd had a late night radio gig as a "radio
raconteur" on WOR in New York City.  When the atmospheric
conditions were just right, my little GE radio/alarm clock could
pull the signal all the way from NYC to Philadelphia. Listening to
Shepherd was always a treat.  Reading Shepherd is OK too.

He sets the story:

"You won't believe it, Flick, but the other day, in New York,
I'm sitting in the H & H....."
"The H & H?"
"The Horn & Hardart. The Automat."
"Oh yeah.  I heard about those.  You get pie right out of the
"That's right, that's the H & H.  Anyway....":
"You know, I've never been to New York.  I'd like to go there
some day.  I hear it's a rough place to live, but...."
"Anyway, Flick, I'm in the H & H and this lady comes in and
sits down, and she's got a button on that says, 'Disarm the
Toy Industry' on it."
"Disarm the Toy Industry?"
"I guess she meant BB guns."
"Fer Chrissake, its getting nuttier and nuttier."  Flick's native
Indiana humor struck to the core.
"Anyway, Flick, I'm sitting there talking to her, and I suddenly
remember that BB gun I got for Christmas.  Do you remember?"

Shepherd adds some local color:

"Disarm the Toy Industry?"  I asked.
"It's an outrage!" She barked, causing two elderly gentlemen
at the next table to spill soup on their vests.  Loud voices are
not often heard in the cloistered confines of the H & H.
"It's an outrage the way the toy makers are forcing the
implements of blasphemous War on the innocent children,
the Pure in Spirit, the tiny babes who are helpless and
know no better!".........................
A single word floated into my mind's arena for just an
instant - "Canal water!"- and then disappeared,  I
thought on:  As if the Toy industry has any control over
the insatiable desire of the human spawn to own Weaponry,
armaments, and the implements of Warfare.  It is the
same kind of mind that thought if making whiskey were
prohibited people would stop drinking.

Shepherd then establishes the necessity......

I imagined innumerable situations calling for the instant
and irrevocable need for a BB gun, great fantasies where I
fended off creeping marauders borrowing through the snow
toward the kitchen, when only I and I alone stood between
our tiny huddled family and insensate Evil.  Masked bandits
attacking my father, to be mowed down by my trusted clover-
leaf-sighted deadly weapon.  I seriously mulled over the pos-
sibility of an invasion of raccoons, of which there were several
in the county.  Acts of selfless Chivalry defending Esther Jane
Alberrry from escaped circus tigers.  Time and Time again I
saw myself a miraculous crack shot, picking off sparrows on
the wing to the gasps of admiring girls and envious rivals on
Cleveland Street.  There was one dream that involved my
entire class getting lost on a field trip in the swamps, wherein
I led the tired, hungry band back to civilization, using only
my Red Ryder compass and sundial.  There was no question
about it.  Not only should I have such a gun, it was an
absolute necessity!"

It is hard to imagine.............

........a better blog- here.

A poem for Monday..........

Pat Conroy's The Prince of Tides is a powerful story well told.
The linchpin of the tale is Savannah Wingo, an accomplished
poet, sister of Tom and Luke Wingo, a haunted soul, and a
multi-attempt failed suicidist.  Here is Conroy channelling
Savannah Wingo:

I blaze with a deep sullen magic,
smell lust like a heron on fire;
all words I form into castles
then storm them with soldiers of air.

What I seek is not there for asking.
My armies are fit and well trained.
This poet will trust her battalions
to fashion her words into blades.

At dawn I shall ask them for beauty,
for proof that their training went well.
At night I shall beg their forgiveness
as I cut their throats by the hill.

My navies advance through the language,
destroyers ablaze on high seas.
I soften the island for landings.
With words, I enlist a dark army.
My poems are my war with the world.

I blaze with a deep southern magic.
The bombardiers taxi at noon.
There is screaming and grief in the mansions
and the moon is a heron of fire.

Sunday, December 26, 2010

August Burns Red...................

Opened up the Christmas music thread with Carol of the Bells.
Figure that closing it with O Come, O Come Emmanuel would
be appropriate, even if it is a day late.

Sunday's Verse......

1.  Jesus was born in the town of Bethlehem in Judea during the time when Herod was king.   When Jesus was born, some wise men from the east came to Jerusalem.

2.  They asked, "Where is the baby who was born to be king of the Jews.  We saw his star in the east and have come to worship him."

3.  When King Herod heard of this, he was troubled, as well as all the people in Jerusalem.

4.  Herod called a meeting of all the leading priests and teachers of the law and asked them where the Christ would be born. 

5.  They answered, "In the town of Bethlehem in Judea.  The prophet wrote about this in the Scriptures:

6.  'But you, Bethlehem, in the land of Judah, are important among the tribes of Judah.  A ruler will come from you who will be like a shepherd for my people of Israel.' "

7.  Then Herod had a secret meeting with the wise men and learned from them the exact time they first saw the star.

8.  He sent the wise men to Bethlehem, saying, "Look carefully for the child.  When you find him, come tell me so I can worship him too."

9.  After the wise men heard the King, they left.  The star that they had seen in the east went before them until it stopped above the place where the child was.

10.  When the wise men saw the star, they were filled with joy.

11.  They came to the house where the child was ans saw him with his mother, Mary, and they bowed down and worshiped him.  They opened their gifts and gave him treasures of gold, frankincense, and myrrh.

12.  But God warned the wise men in a dream not to go back to Herod, so they returned to their own country by a different way.

Mathew 2: 1-12
The Devotional Bible, New Century Version

Friday, December 24, 2010

Holy Night..............

Required reading...................

...........for anyone interested in improvement, growth, happiness,
and a revitalizing breathe of fresh air.   An annual subscription
makes a wondrous Christmas gift for those you love.   HERE.

Maybe Santa will bring me a new blackberry.............

Thanks Wendy

Dueling charts...........

A recent Keeping Current Matters post (here) leads one to
believe they think housing prices are still falling.  I concur.  They
then look at the first chart below and conclude that prices today
are lower than they should be based on the historic trend line.
Thus, they anticipate future appreciation in values:

"Once we return to the factors which normally determine
property values, prices should appreciate nicely."

I am not going to pretend to know the answer.  But, when I look
at the second chart below, the trend line that I would extrapolate
indicates prices have to fall another 5% or so to reach the historic
trend line. So does that mean we will reach stabilization, followed
by slow growth?

The beauty of our economic system is that we each get to look at
the data and make our own decisions.  In investing you "pays your
own money and takes your own chances."

The first chart
The second chart

Pat Conroy...............

The Mighty E. had a post the other day about Pat Conroy.  Here.
Got a copy of one of my all time favorites, The Prince of Tides,
off the shelf and thumbed through it again.  There are many a
quote worthy passage.   Here is one:

    "With two minutes left in the game, we stopped Clemson
at their own twenty-yard line.  And I heard one of the assist-
ant coaches yell to Coach Bass, 'Let Wingo take this punt.'
    'Wingo,' Coach Bass screamed, and I ran up to him.
    'Wingo,' he said as I adjusted my helmet, 'do it again.'
    I had turned golden that day and Coach Bass had uttered
magical, incantatory words and I tried to remember where in
my life I had heard that phrase before as I took a position on
our thirty-five-yard line, shutting out the extraordinary noise
of the crowd.  As I watched the center snap the ball to the
punter, I remembered that distant sunset when I was three
and my mother had walked us out on the dock and brought
the moon spinning out from beneath the trees of our island
and my sister cried out in a small ecstatic voice, 'Oh, Mama,
do it again!'
    'Do it again,' I said as I watched the spiral tower far above
the field begin its long descent into the arms of a boy turned
golden for a single day of his life.
    As I caught the ball I looked upfield.
    I took the first marvelous step of the run that would make
me the most famous football player in South Carolina for a
year I will cherish as long as I live.  I caught the ball on our
forty-yard line and raced up the right sideline, but all I could
see was a movable garden of orange heading my way.  Three
Clemson players were moving in for the tackle from my left
side when I stopped dead and began running the other way,
back toward our own goal line, trying to make it to the other
side of the field.  One Clemson lineman almost caught me at
the seventeen but was cut in half by a vicious block by one of
our linebackers, Jim Landon.  Two of them were matching me
stride for stride when I turned upfield.  When I looked up the
far sidelines, I saw something amazing happening in front of
my eyes.  Our blocking had broken down completely after the
punt, but each of my teammates trailing the play had watched
me reverse my field with eleven Clemson players in healthy
pursuit.  I was looking down a lane of blockers that stretched
for fifty yards downfield.  A Clemson player would be about
to catch me; then I would see a South Carolina player step
between me and the tackler and cut him down at the knees, 
it was like running inside a colonnade.  It was a fine life I was
leading that day and I felt like the fastest, sweetest, dandiest
boy who ever breathed the clean air of Clemson.  When I hit
their thirty-yard line running faster than I ever thought I
could run, there was not a Clemson player left standing on the
field.  When I crossed the goal line, I fell to my knees and
thanked the God who made me swift for the privilege of
feeling like the king of the world for one glorious,
unrepeatable day of my young life."

Conroy can flat out write.

Couldn't agree more...............

The current problem with eminent domain is "cheapness."

One of the powers of government that supersede  individual
property rights is eminent domain.   When government needs land
for a public use, the government has the legal authority  to take
(buy) it.  The process is well defined, although the 2005 Supreme
Court Kelo v New Haven decision and recent eminent domain
activity for Columbia University in New York have surely roiled
the waters by bringing private economic development into the game.

Watching the State of Ohio operate recently over takings for road
widening projects, we were struck by how cheap the State was
being.  They were doing everything in their power to pay the
property owner as little as  possible.  While tax payers may
applaud such behavior, it is extremely adversarial to private
property owners' rights and and a forced sale at a low price
is generally unfair and unjust. 

Maggie's Farm led me to an interesting essay by James DeLong
on "just compensation."  Full essay Here.  Excerpt here:

"In the eminent domain context, the problem is that land-
owners are not being paid enough. The standard of “just
compensation” is usually interpreted as the market value of
the property as determined by dueling appraisers. This
standard can be unfair, as Loyola Law School Professor
Gideon Kanner has long argued. It skimps on costs of
relocation and upset, and excludes consideration of damage
to businesses, which can considerably outweigh the value of
the real estate. Tenants, especially businesses, are often
seriously short-changed."

Eminent domain is a fact of life in the real estate world.  Just
compensation, which involves more than what two appraisers
agree is the property's fair market value, should be an
integral part of the process.  After all, the State is not only
taking the present, but, against an individual's will,  they are also
taking the future.    Pay up!

Thursday, December 23, 2010

A Classic...........

Hey, if you want to watch/listen to Bing sing White Christmas,
go here.

I don't remember it happening that way.............

As all good governmental entities do, our Congress, under the guidance of the Fraud Enforcement and Recovery Act of 2009  created a commission to figure out the whys and wherefores of the recent economic crisis.  This Commission was appropriately titled the Financial Crisis Inquiry Commission.  A week ago the Republican members of the Commission issued their own report, calling it the Financial Crisis Primer.  I've been spending some time reading it. Full document here. While it is well written and understandable, its accuracy is suspect.

For instance:

"We will likely never have a complete explanation of why there was a housing bubble, but we have some clues.  First, even without a big change in the costs of building a home, a sharp increase in demand can cause rapid price increases, until new homes are built, bringing prices back down."

While that paragraph may be true, I don't believe it is accurate description of what happened - a subtle, but important distinction.

If you harken back 2002, "housing starts" were all the news.  Our economy, recovering from the crash and what might have been a mini-recession in 2001-2002,  had become more and more developer driven.   Across the country, as subdivision after subdivision was created, land development boomed and the production building industry boomed.  Following the growth of residential development, the retail development industry also boomed.  The only issue on the employment front was finding enough workers.  But there was a problem looming on the development front.  The builders were running out of buyers. 

I am not an economist, but I suspect that a "cooling off" period was needed for the housing industry.  But, as the "engine" for the economy, too many people had a vested interest in keeping the production building machine running flat out.  The solution: expand the pool of buyers to include people who could not afford the product.  The rocket scientists on Wall Street, needing sexy products to securitize and sell to investors seeking high returns, started creating in 2003 exotic mortgage products that defied common sense.  A whole raft of mortgage brokers, many working directly for the production builders, started selling these products.  Voila!  More new home buyers!  Thus, the slow down  that might have had a long term salutatory affect on the housing market was avoided in 2003,  The stage was set for the train wreck that arrived in 2007. 

I believe the Republican Commissioners have this part of the story told wrong.  Housing prices did not go up because of a shortage of product.  Indeed, local statistics - repeated across the country - show that production home builders were building far too many homes for far too long for the normal absorption patterns.  I would contend that it was the amazingly easy access to money, for all comers, made possible by Wall Street's ravenous appetite for trading vehicles, that sparked the frenzy that became the housing bubble.

Just for grins, here is a repeat of a Calculated Risk chart showing housing starts.  Do you think the trend line from 2000-2006 was sustainable?

Other short comings in the Republican Commissioners' report will be discussed at a later date.  Stay tuned

The best of yesterday's e-mails..............

To My Democratic Friends:
Please accept with no obligation, implied or explicit, my best wishes for an environmentally conscious, socially responsible, low-stress, non-addictive, gender-neutral celebration of the winter solstice holiday, practiced within the most enjoyable traditions of the religious persuasion of your choice, or secular practices of your choice, with respect for the religious/secular persuasion and/or traditions of others, or their choice not to practice religious or secular traditions at all. I also wish you a fiscally successful, personally fulfilling and medically uncomplicated recognition of the onset of the generally accepted calendar year 2011 but not without due respect for the calendars of choice of other cultures whose contributions to society have helped make America great. Not to imply that America is necessarily greater than any other country nor the only America in the Western Hemisphere . Also, this wish is made without regard to the race, creed, color, age, physical ability, religious faith or sexual preference of the wishee.

To My Republican Friends:
Merry Christmas and a Happy New Year!

Thanks Dr. Dick

Moon, moon, and more moon.............

Fascinating pictures for those of us who like our moon orange.

"While an orange moon hung in the sky..."

I confess to having slept through the lunar eclipse the other night.
Several blogs have posted about the event, none better than
the View from the Ledge.  Full post here.  Excerpt here:

"Old Pepper made several stops along the route and each
time I stared upward and studied the moon. I knew it was
something important, something that should be seen, although
the enormity of how it was happening overwhelmed me.
Enough to see something that people hadn’t seen in some
years and wouldn’t see in years hence. I felt a boy’s anxiety,
that if I thought too hard about it, the moon might fall out
of the sky."

Wednesday, December 22, 2010

The Mighty E. tells me to pay attention..... Jet Boy & My Dog Skip.  I do what I'm told.  Jet Boy had
this one posted they other day.  Enjoy!

Professor Green shows some frustration...........

Richard Green is a professor at USC.  His blog, which I read
regularly, would tend to make one think he is of the liberal
persuasion.   He has been watching a "government project"
under construction and is not impressed.  Full post here.
Interesting excerpt here:

"I continue to believe that we need government to do certain
things (rail tunnels under the Hudson and a more modern
power grid, for starters) for the economy to perform well. 
But when government doesn't perform well, it turns positive
NPV projects into negative NPV projects, and it undermines
political consensus for the necessity of government."

"No quick and easy solutions".........

The researchers analyze small business borrowing, and note
that home equity borrowing is an "important source of
capital for small business owners and that the impact of the
recent decline in housing prices is significant enough to be a
real constraint on small business finances."

Excerpted from Calcluated Risk.  Full post here.

The Poet's guide to surviving winter..........

Today is my Mother's favorite day (well sort of) of the year, as
the daylight hours now begin to lengthen.

Nan at Jade Page Press reminded us yesterday that, "Today is
the winter solstice, the shortest day and longest night in the
Northern Hemisphere."   She then added this:

Poets over the ages have proffered plenty of advice for the
coming months. Poet Pietro Aretino, born in the 15th
century, said, "Let us love winter, for it is the spring of
genius." William Blake wrote, "In seed time learn, in harvest
teach, in winter enjoy." There's a Japanese proverb that says,
"One kind word can warm three winter months."

Full post here.

One helluva paragraph..........

Fred Cordova, whose blog I follow (here), wrote this:

Our message is, "buy quality" and understand risk. Whether
you are a core buyer or an opportunity buyer, a conservative,
well funded capital structure that can weather 3-5 years of
job tepid growth will be the key to optimizing returns. If you
are a seller with a core asset and are thinking of harvesting
value or have a property with a capital structure that is
misaligned with market fundamentals that is inhibiting
disposition or recapitalization, we would recommend that
you give some serious thought to monetizing now. It is
unlikely that CRE fundamentals will grow before the
capital markets blow.

The first two sentences I understand and agree with, especially
the "understand risk" part.

That third sentence is a doozy.  I'm going to take a stab and
say that "...a capital structure that is misaligned with market
fundamentals that is inhibiting disposition..." means you owe
more than the property is worth.  There is a bit of that going
around.   I'm further going to guess that "monetizing" means to
add some cash to the deal.  If it were only that easy.

Tuesday, December 21, 2010


Linky goodness............

Tom Asacker on boxes.  "Forget the bull about 'thinking
outside the box.' If you want your passion to return, you've
got to start living outside the box.'   Full post here.

Bernard Goldberg on those darn genes"Stop whining already.
It’s boring. We don’t need more excuses; we need people to
take personal responsibility.  Full post here
(thanks to Maggie's Farm)

Mathew Ferrara on having fun at work. "smart companies today,
as always, find ways to have fun at work. People who enjoy
what they do affect those around them. Tough times demand
you have more fun at work. And not just posting a cute  You
Tube videos to Facebook. Having fun doesn’t mean throwing
a party; it means doing little things that can make people’s
day. Lending a hand. Praising someone’s work. Reminding
them you’re there if they need help. Simply saying thank you."
Full post here

The Hammock Papers on fly fishing and listening"....It's
beautiful. it's poetic, and it pleases me.  And it opposes
the intoxicative verbosity of an over-rated positively
mundane self-absorbed culture."  Full post here

The Friendly Anarchist on living an interesting life.  Full post here
"As far as I can see it, most of us want to live our lives
something like this:

But because we try so hard, because of attempting to
'play it safe', we unintentionally drown our interestingness
levels, and end up with a life like this:"

Thanks Penelope

Risky business............

"Some people think self-employment is risky, but the real
risk lies in deriving your security from an external source."

-Chris Guillebeau,    The Art of Non-Conformity

"What, then, is the meaning of it all?"........

     "What, then, is the meaning of it all?  What can we say
to dispel the mystery of existence?
     If we take everything into account - not only what the
ancients knew, but all of what we know today that they didn't
know- then I think we must frankly admit that we do not know.
     But, in admitting this, we have probably found the open
     This is not a new idea; this is the idea of the age of reason. 
This is the philosophy that guided the men who made the
democracy that we live under.  The idea that no one really
knew how to run a government led to the idea that we should
arrange a system by which new ideas could be developed,
tried out, and tossed out if necessary, with more new ideas
brought in - a trial-and-error system,  This method was a
result of the fact that science was already showing itself to
be successful venture at the end of the 18th century.  Even
then it was clear to socially minded people that the openness
of possibilities was an opportunity, and that doubt and
discussion were essential to progress into the unknown,  If we
want to solve a problem that we have never solved before we
must leave the door to the unknown ajar."

-excerpted from  What Do You Care What Other People Think
by Richard P. Feynman

The enemy of the good..........

"The perfect is the enemy of the good.  When you spend so
much time looking for the 'best' choice that you never
actually do anything, you're sabotaging yourself.  No matter
what you're trying to accomplish, simply starting the process
plays a larger role in your success than any other factor."

-Excerpted from Your Money: the missing manual quoting
The Paradox of Choice

Monday, December 20, 2010

Fun and Politically Incorrect Christmas Carols..............

Monday's Poem..................

Twas the night before Christmas, when all through the house
Not a creature was stirring, not even a mouse.
The stockings were hung by the chimney with care,
In hopes that St Nicholas soon would be there.

The children were nestled all snug in their beds,
While visions of sugar-plums danced in their heads.
And mamma in her ‘kerchief, and I in my cap,
Had just settled our brains for a long winter’s nap.

When out on the lawn there arose such a clatter,
I sprang from the bed to see what was the matter.
Away to the window I flew like a flash,
Tore open the shutters and threw up the sash.

The moon on the breast of the new-fallen snow
Gave the lustre of mid-day to objects below.
When, what to my wondering eyes should appear,
But a miniature sleigh, and eight tinny reindeer.

With a little old driver, so lively and quick,
I knew in a moment it must be St Nick.
More rapid than eagles his coursers they came,
And he whistled, and shouted, and called them by name!

"Now Dasher! now, Dancer! now, Prancer and Vixen!
On, Comet! On, Cupid! on, on Donner and Blitzen!
To the top of the porch! to the top of the wall!
Now dash away! Dash away! Dash away all!"

As dry leaves that before the wild hurricane fly,
When they meet with an obstacle, mount to the sky.
So up to the house-top the coursers they flew,
With the sleigh full of Toys, and St Nicholas too.

And then, in a twinkling, I heard on the roof
The prancing and pawing of each little hoof.
As I drew in my head, and was turning around,
Down the chimney St Nicholas came with a bound.

He was dressed all in fur, from his head to his foot,
And his clothes were all tarnished with ashes and soot.
A bundle of Toys he had flung on his back,
And he looked like a peddler, just opening his pack.

His eyes-how they twinkled! his dimples how merry!
His cheeks were like roses, his nose like a cherry!
His droll little mouth was drawn up like a bow,
And the beard of his chin was as white as the snow.

The stump of a pipe he held tight in his teeth,
And the smoke it encircled his head like a wreath.
He had a broad face and a little round belly,
That shook when he laughed, like a bowlful of jelly!

He was chubby and plump, a right jolly old elf,
And I laughed when I saw him, in spite of myself!
A wink of his eye and a twist of his head,
Soon gave me to know I had nothing to dread.

He spoke not a word, but went straight to his work,
And filled all the stockings, then turned with a jerk.
And laying his finger aside of his nose,
And giving a nod, up the chimney he rose!

He sprang to his sleigh, to his team gave a whistle,
And away they all flew like the down of a thistle.
But I heard him exclaim, ‘ere he drove out of sight,
"Happy Christmas to all, and to all a good-night!"


Attributed to Clement Clarke Moore, this poem, first
published in 1823, established the image and story of Santa
and his reindeer that still dominates the Christmas season.

Socrates on "wisdom"....................

"My hearers always imagine," Socrates declares, "that I myself possess the wisdom which I find wanting in others; but the truth is, O men of Athens, that God only is wise; and by his answer he intends to show that the wisdom of men is worth little or nothing; he is not speaking of Socrates, he is only using my name by way of illustration, as if he said, He, O men , is the wisest, who, like Socrates, knows that his wisdom is in truth worth nothing."  Again in the Phaedrus, Socrates refuses to call any man wise, "for that is a great name which belongs to God alone."  For men, "lovers of wisdom or philosophers is the modest and befitting title."

-excerpted from  Great Ideas: A Lexicon of Western Thought
by Mortimer J. Adler

Ziggy leads the way.................

Who am I to argue with these guys...............

It's tangible, it's solid, it's beautiful. It's artistic, from my
standpoint, and I just love real estate.
-Donald Trump

Look at market fluctuations as your friend rather than your
enemy; profit from folly rather than participate in it.
-Warren Buffett

Don't wait to buy real estate. Buy real estate and wait.
-Robert G. Allen

Don't wait to buy land, they aren't making any more of it.
-Will Rogers

The land is good. Be not hesitant to go, and to enter to
possess the land.
 -Judges 18:9, Old Testament

The major fortunes in America have been made in land.
 -John D. Rockefeller

Landlords grow rich in their sleep.
-John Stuart Mill

Ninety percent of all millionaires become so through owning
real estate.
-Andrew Carnegie

He is not a full man who does not own a piece of land.
-Hebrew Proverb

God, please just give us one more real estate boom.
-Steve Hewson

Sunday, December 19, 2010

Merry Christmas, my friend

On seeing.................

"From my long walks through the forest I discovered the
sky, the sky that formerly I believed I had seen every day,
until one day I did see it."
-Auguste Rodin

Hobbes: one of my heroes.........

a thank you to Mr. Sullivan

My brother-in-law is a................

.............really good guy who has taught me much about the truly
important things in life.  He will occasionally make some
welcome, but challenging, comment to these blog posts.  His
latest such comment followed my saying Richard Green had a
valid concern about this:

         "I worry that the extraordinary increase in unevenness
         in wealth is not the result of merit, but the result of the
         game being more and more rigged."

His comment was this:

     "Unevenness of wealth is straw man unless you view
      society Marxian eyes. When you look at the history of
      this country (much less the rest of the world) we're not
      at time of much unevenness. In New York there is the
     "Tenement Museum" where you get a glimpse of the
      life of the working poor in the 18th and early 19th
      century. Today's poor are rich by those standards. And
      the rich of  those days were named Vanderbilt,
      Rockefeller, and Carnegie. Wealth beyond imagination."

My first reaction was that I really wasn't talking about "uneven-
ness of wealth," I was thinking about the "riggedness" of the
game.  About 20 seconds later the thought occurs that perhaps
the folks of those eras thought that Rockefeller had rigged the oil
business, that Carnegie had rigged the steel business, and that
Vanderbilt had rigged the steamships and rails.

All of those Titans clearly knew how our political system worked
and were not afraid to get involved in its rough and tumble ways.

So, are things really different today than they were in 1900?

After explaining to you that I am unwilling to do the research, I
am willing to take a stab at the answer.  No and Yes.

No: things are not different in this "unevenness of wealth" thing. 
Dennis is correct.  Historically, regardless of era or governmental
form, "some pigs are more equal than others" and great wealth
disparities have always existed.  It is just a part of the great
human experience.  It is not likely to change.

Yes: the game is "more and more rigged.'  Vanderbilt and his ilk
were not above trying to buy the New York State legislature, but
that was a fleeting thing.  The legislature didn't always stay
bought.  New blood - new money- showed up and things could
become unrigged.    The Wall Street of today may correspond
with the "robber barons", or Titans if you prefer, of the by-gone
era, but the political institutions and bureaucracies in Washington
today are much more powerful and pervasive than any
government in 1900.

Where I get the sense of "riggedness" is from the well worn path
back and forth between "The Goldman Sachs" (not exclusively
mind you but as a bright and shiny example) and the corridors of
power in Washington.  It is one thing to dominate an industry. 
It is entirely another when you add domination of the levers of
power of government as well.

Like I said, this is not a research project, but follow this link and
see if you agree, here.  Here is a really fun excerpt from the
linked article  (this may be the only time in my life I was rooting
for Maxine Waters):

       "In March, Geithner was questioned by Congresswoman
        Maxine Waters about the appearance of conflict of
        interest by Goldman Sachs insiders:

      "I am just asking the questions," Waters said, "because
       the talk is...that this small group of decision makers at
       the center of it is Goldman Sachs and that's what's
       causing a lot of the distrust, because people are thinking
       or believing that Goldman Sachs, because of the con-
       nections, have had a lot to do with the decisions that are
       being made."

       Geithner responded: "I think it's deeply unfair to the
       people who are part of these decisions to suggest that
      they were making judgments that in their view were not
      in the best interest of the American people."

As Danny used to say, "that cracks my head up."

Faithful readers will know my bias:  the vast majority of our
citizenry participated in, or benefited from, the late great housing
bubble.  We all get a share of the responsibility for the state of
our economy.  However, to the extent that there are any villains
in the story, they resided on Wall Street.  Now, their cronies
are making and implementing policy in Washington. Creating
policies that certainly seem supportive of entrenched power and
interests like those banks deemed "to big to fail", yet at the same
timeare highly burdensome to smaller businesses like your
neighborhood Savings & Loan and/or community bank.

As Deep Throat told Bob Woodward many years ago, "follow
the money."  It sure looks like a rigged game from here.

Sunday's Verse.......

Now it came to pass in those days,  that there went out a decree
from Caesar Augustus, that all the world should be taxed.

2.  This taxing was first made when Quirinius was governor of

3.  And all went to be taxed, everyone into his own city.

4.  And Joseph also went up from Galilee, out of the city of
Nazareth, into Judea, unto the city of David, which is called
Bethlehem, because he was of the house and lineage of David,

5.  To be taxed with Mary, his espoused wife, being great with

6.  And it was, that, while they were there, the days were
accomplished that she should be delivered.

7.  And she brought forth her first-born son; and she wrapped
him in swaddling clothes, and laid Him in a manger, because there
was no room for them in the inn.

8.  And there were in the same country shepherds abiding in the
field, and keeping watch over their flock by night.

9.  And, lo,  the angel of the Lord came upon them, and the glory
of the Lord shone round about them; and they were sore afraid.

10.  And the angel said unto them, "Fear not; for behold,
I bring you good tidings of great joy, which shall be to all people.

11.  For unto you is born this day in the city of David  a
Saviour, which is Christ the Lord.

12.  "And this shall be a sign unto you: Ye shall find the babe
wrapped in swaddling clothes, lying in a manger."

13..  And suddenly there was with the angel a multitude of
the heavenly host praising God, and saying,

14.  "Glory to God in the highest, And on earth peace, good
will toward men."

Luke 2:1-14
The Holy Bible
King James version

The wisdom of Hugh MacLeod.........

"Biblical verse tends to be a bit rigid and stern, after all, it
was written as serious business.

So, even the good stuff doesn't always sound so good.

Here is an angel that is lovable, a little goofy and full of
goodness and godliness - not the way they would have
depicted it in renaissance times, but hey, it's 2010."

Fear Not

Since we're talking favorite TV theme songs...............

Execupundit offers three classic TV theme songs- here.  No
complaints about his choices.  May I suggest  three more?

Saturday, December 18, 2010

.....make the season bright........

Who knew being manipulated.................

..............would be this much fun.  Debt Management posts
ten credit card advertisements that she believes mislead the
viewer about the basic nature of credit cards.  Well, yeah.

Unless you have credit addiction issues, viewing these ads will
lighten your spirits.  They are well done.  Follow the link for all
ten.  A quick sampler here:

The perfect gift...................

.......for your favorite wood worker.  This is for you Patrick.
I couldn't identify half this stuff.

Thanks Kaching

I've never met him, but I think..........

......I'd like to have a beer with Steve Felix.  He is into institutional
real estate, making music, and thinking about life.  He blogs here.

He's been working on his goals for 2011.  Here is a sample from
his latest post (which also includes an update that he may be
playing music with a band called Maple Station Express out of
Calistoga, CA as well as an update on his company's holiday
bowling party at some lanes off of Times Square):

        Walk more slowly. Basically, don't rush.

        Keep my expectations modest. Then I'll be pleasantly
        surprised more often than disappointed.

        Keep myself open to serendipity.

        Make time to work on personal projects and not keep 
        putting them off.

       Remember "The Four Agreements": 1. Be impeccable 
       with your word; 2. Don't take anything personally; 
       3. Don't make assumptions; 4. Always do your best.

       Don't ever forget who and what are most important to
       me in my life.

When it comes to productivity, his counsel is simple:

"as someone once told me, be gentle with yourself.  And if
you want to be more productive, let's say step up the amount
of calls you make each week, remember this:  the difference
between making zero calls and making one is 100%! "


"Don't fight forces, use them."
-Buckminster Fuller

"Never let the fear of striking out get in your way."
-Babe Ruth

"Always do sober what you said you'd do drunk.  That
will teach you to keep your mouth shut."
-Ernest Hemingway

"Balancing your budget is like protecting your virtue.
You have to learn to say, 'No.' "
-Michael Levine

"Be careful what you set your heart upon, for it will
surely be yours."
-James A. Baldwin

"If you can find a path with no obstacles, it probably
doesn't lead anywhere."
-Frank A. Clark

"We will either find a way, or make one."

"If your ship does not come in, swim out to it!"
-Jonathan Winters

"If you are seeking creative ideas, go out walking.  Angels
whisper to a man when he goes for a walk."
-Raymond Inmon


Friday, December 17, 2010

You better be good for goodness sake...........

A key piece to the puzzle................

"So, the financial industry eager to trade in Mortgage
Based Securities needed to find a way around those
recordation requirements, and this is how MERS was
born to replace public recordation with a private one."

The time:         Mid 1990's
The place:       Wall Street
The problem:   Massive amounts of capital are seeking
                       investments that would generate high rates of
The solution:    Turn the secondary mortgage market into a casino
                       and a traders' paradise by creating a never-ending
                       stream of fabulous new mortgage backed security
The problem:   Every time a mortgage was sold, the mortgage's
                       new owner's name would need to be recorded at
                       the appropriate County Recorder's office.  A
                       tedious, time consuming bit of paper work that all
                       by itself would have acted as a "governor" on
                       trading volumes.
The solution:    MERS

MERS (Mortgage Electronic Registration System) was created
in 1995.  A privately held company (their web site shows the very
interesting list of shareholders), MERS has been very busy.  If one
were to go to the Licking County Recorder's web site, one would
find over 43,713 documents recorded in the name of MERS. 

It is actually a fairly slick system.  MERS serves as a nominee
for the original lender at the closing of the loan, and then records
the mortgage under its own name.   At the same time MERS gives
the mortgage an 18 digit MIN (mortgage identification number).
Then the MIN and MERS's computers track the mortgage as it
gets securitized and traded hither and yon by the folks on Wall
Street.  There is no public record at the County Courthouse of
any owner of the mortgage but MERS.   If you call the nice
people at MERS and give them the MIN, they will tell you the
current holder of the mortgage. 

This will come as no surprise to those who looked at the share-
holders list,  MERS charges a fee at closing to the borrower,  and
is a profitable venture.

So what does it all mean.  Once MERS was established, and
high priced legal talent gave high priced opinions that it was all
on the up and up, mortgages had a personality change.  They
were no longer just pledges of property to secure a loan.  They
were now grist for the Wall Street trading mills.  The rocket
scientists became ever more inventive in creating trading vehicles
out of mortgages.  If you want to have your head spin, go here
and just scroll down and see the variety of collateralized
mortgage obligations (CMOs) they created.

The casino was open for business and business was very, very
good.  For a while.  As Warren Buffet famously opined about
derivatives, the CMOs eventually became "financial weapons of
mass destruction."

To be continued.................