Saturday, June 12, 2010
here, from Jonathan Miller is worth the read. Here are
problem causer = desire for "quick money":
"Dealmakers have been frustrated that conventional wisdom
hasn’t started to play out by now and they begin to question
whether the chance for quick money will be attainable at all
problem solver = prudent investing, not speculating:
"Real estate investors might be better served to stop looking
for the holy grail of outsized quick trading hits. We’re just not
going back to the good old days of 2005 anytime soon. At this
market bottom, you should be orienting around building
lasting core portfolios of well-leased income producing
properties, and looking to achieve year-in, year out returns in
the high single digits where annualized real estate returns
average out anyway.
Friday, June 11, 2010
deduction will have a negative impact on housing values.
Rather than just defending their sacred cow to the death,
wouldn't it be refreshing if the Realtor leadership said, "Ok,
let's talk about what is best and important for our country.
Let's put ALL of the sacred cows on the table. Let's make
some real structural changes to the tax code. Rather than
using the Code to reward some, punish others, and generally
manipulate social policy (all while making the Code mostly
incomprehensible), how about we simplify things. Everybody
pays something, no deductions, four or five rates, simple and
Call me simple minded if you will, but a man can dream,
Thursday, June 10, 2010
forth its proposal that banks report the fair value of loans on
their books and accelerate recognition of credit losses. If that
rule was in force now you know what it would mean: no
more pretend and extend, a lot more distress. For borrowers
the former would have made a painful period a lot worse;
for opportunistic funds, it would led to more buying
opportunities. Indeed the Wall Street Journal reported this
week that many of these funds are returning money to
investors as their commitment periods end because they
haven't found anything in which to invest."
Full article here.
From a related story:
"FASB's proposal 'presents significant problems, not only for
banks, but also the general economy,' Edward Yingling,
president and CEO of the American Bankers Association, said
in a statement Wednesday. 'If implemented, the proposal
would greatly undermine the availability of credit by making it
difficult to make many long-term loans, the value of which,
even if performing perfectly, would likely be reduced on the
day a loan is made.'" Full article here.
Faithful readers of this blog will know that, in my opinion,
the recent buying frenzy pushed investment real estate
values into unsupportable and non-sustainable realms.
One could logically assume that I believe a price correction
is necessary. But that would only be partly true.
Most real estate did not sell during the "bubble" years and
most property owners did not overpay for their real estate.
It is only the excesses that need to be squeezed out, not the
The critical questions are how? and when?
A question: If the Federal Accounting Standards Board
rules take effect in 2013 as proposed, and the rules require
the banks to report the fair value of their loans today,
does that mean re-appraising ALL of their loans?
That's a lot of appraisals. Wonder who'll be paying for them?
Appraisals are merely one person's opinion, based on their
interpretation of available data, of a property's fair market
value. It is not etched in stone that their opinion accurately
reflects its true value.
I don't know if the Federal Accounting Standards Board has
looked at the appraisal business lately, but as a not-so-
casual observer I would say that confusion reigns. New
regulations on the appraisal industry now make it more than
likely that an out-of-town appraiser will be doing the
appraising. With no local knowledge, the appraiser will be
relying on dry "comparable sales data". With the freeze up
in the lending markets, and the current abeyance of a real
marketplace of buyers and sellers, a significant percentage
of those comparable sales will be distress sales and
foreclosures. Using this type of comparable sale means that
appraisals will trend ever lower, which will force more
currently performing loans to be classified as non-performing,
which will in turn cause the banks to be less willing to loan,
which in turn......well, you get the picture. It becomes a
self-reinforcing downward spiral.
One of the troubles with having financial institutions that are
"too big to fail" is that those who have to guarantee the losses
when they do fail then pass all kinds of fancy regulations to
try to keep them from failing again. As a firm believer in the
law of unintended consequences, I know that well meaning
regulations always cause more problems than they solve-
like the recently created appraisal regulations- and that the
burden of following the regulations usually falls on those
whose solid and steady business practices did not need
regulating in the first place.
Wouldn't it make more sense to limit the size of these
financial giants so that they were not too big to fail? Then
let failure be the punishment for making too many bad loans.
Market discipline is surely more efficient and effective than
Why can't we just muddle through for a while longer
without any well meaning regulations that just make it
more difficult for prudent business people to do business?
If we are ever going to get the employment numbers back
where they belong it will be because prudent business people
feel confident that they will be able to profitably do business
again. It is only then that they will begin to expand and grow
and add employees.
The prime rule for regulators should be: First, do no harm.
The FASB "mark-to-market" rules will do significant
harm without any apparent significant benefit.
But, then again, I'm a borrower and maybe that bias is
Wednesday, June 9, 2010
Johnny John will be missed.
His family rightly called tonight
a 'Celebration of his Life'.
There was never a friend more true.
There was never a man who cared more for his community
and its people.
There was never a man more Alive.
wrote some of my parents' most loved music. So In Love,
Begin the Beguine, C'est Magnifique, Could It Be You, I Get
a Kick Out of You, Wunderbar, In the Still of the Night, and
I've Got You Under My Skin just scratch the surface of his
Enjoy a little Day and Night. First for the piano, then for
the dancers amongst us.
Tuesday, June 8, 2010
In 1970, my sophomore year in college, I was introduced to
Black Hand Gorge by some upper-class friends. I suspect at
that time it was private property we were traipsing around
on, but we had an awful lot of fun.
The history of the Gorge, or the Licking River 'Narrows' is
the history of our community. Opened up by the Ohio & Erie
Canal, the Gorge was a focal point of early transportation.
The Inter Urban Electric Train system ran along the north
side of the Licking River. The Central Ohio Railroad ran
along the south side of the River.
Significant amounts of stone were quarried from the area
for use in local construction and manufacturing.
When the Dillon Dam was built down river in the 1940's, the
gorge became part of the dam's flood reservoir, and was no
longer suitable for any use other than recreation.
Today it is a State of Ohio Nature Preserve with a bike
path running along the south side of the river. It is a great
place to walk or bike ride. Last weekend there were several
kayakers coming down the river. Not a trip for the faint
at heart when the water is up, but a great time.
It is truly a treasure. We are fortunate to be able to enjoy it.
This old log cabin greets visitors to the Nature Preserve
The water is up. The Licking River flowing east from
the Toboso Bridge.
"Black Hand Rock"
The laid stones at the bottom of the rock are the
remains of the stone tow path from the Ohio and Erie Canal.
The rock had to be blasted to make room for the path.
The 'black hand' was destroyed during the blasts.
A view from the
Quarry Rim Trail.
The water is a quarry
In the late 1800's
The Everett Glass
Works in Newark
quarried here for
sandstone which was
then crushed for
use in the
The 'Deep Cut'. In 1850-51 workers blasted and dug
this cut through a wall of solid rock 64' high and 700'
thick. Trains ran through the 'Deep Cut' until the
1940's, when the construction of Dillon Dam forced
the re-location of the rail tracks.
survive, let alone thrive. Capacity, interest, and mental
endurance all wax and wane. Plan accordingly."
"Someday is a disease that will take your dreams to the
grave with you."
"It is far more lucrative and fun to leverage your strengths
instead of attempting to fix all the chinks in your armor."
"Fear comes in many forms, and we usually don't call it by
its four letter name. Fear itself is quite fear-inducing.
Most intelligent people in the world dress it up as
something else: optimistic denial."
-Timothy Ferriss, The 4-Hour Workweek
Monday, June 7, 2010
Halo of the Cat's Eye- here
The Whale and the Hockey Stick- here
The Horsehead Nebula- here
The Chameleon's Dark Nebulae- here
The Pillars of Eagle Castle- here
A Beautiful Trifid- here
"I'm scrambling an egg for my daughter.
"Why are you always whistling?" she asks.
"Because I'm happy."
And it's true,
Though it stuns me to say it aloud;
There was a time when I wouldn't
Have seen it as my future.
It's partly a matter
Of who is there to eat the egg:
The self fallen out of love with itself
Through the tedium of familiarity,
Or this little self,
So curious, so hungry,
Who emerged from the woman I love,
A woman who loves me in a way
I've come to think I deserve,
Now that it arrives from outside me.
Everything changes, we're told,
And now the changes are everywhere:
The house with its morning light
That fills me like a revelation,
The yard with its trees
That cast a bit more shade each summer,
The love of a woman
That both is and isn't confounding,
And the love
Of this clamor of questions at my waist.
Clamor of questions,
You clamor of answers,
Here's your egg."
Last Night As I Was Sleeping
"Last night as I was sleeping,
I dreamt - marvelous error! -
that a spring was breaking
out in my heart.
I said: Along which secret aqueduct,
Oh water, are you coming to me,
water of a new life
that I have never drunk?
Last night as I was sleeping,
I dreamt - marvelous error! -
that I had a beehive
here inside my heart.
And the golden bees
were making white combs
and sweet honey
from my old failures.
Last night as I was sleeping,
I dreamt - marvelous error! -
that a fiery sun was giving
light inside my heart.
It was fiery because I felt
warmth as from a hearth,
and sun because it gave light
and brought tears to my eyes.
Last night as I slept,
I dreamt - marvelous error! -
that it was God I had
here inside my heart."
(translated by Robert Bly)
Sunday, June 6, 2010
of Kurt's posts, wrote the following:
"In teaching kids to write, I try to inspire them to be still long
enough for these opportunities to be realized. It takes a while.
Persistence pays. Creative work, after all, is still work...........
As a father and as a teacher I have a responsibility to show
kids the world and guide them through the process of making
the decisions that influence their existence in the world.
Be aware of perception.
Try to understand."
Reading his post, I thought, 'I bet he is a great teacher'. Made
me think of some of my great teachers. People who made me
want to stretch, to grow, to think for myself, to be different
today than I was yesterday.
Made me think of Bob Toplin, who years ago taught a course
at Denison University called Latin America, Evolution or
Revolution. Twice a week Toplin would lecture on a topic for
two hours. The first hour he would present the right-wing
viewpoint on a specific political or economic topic. The second
hour he would present the left-wing viewpoint on the same topic.
Bless his heart, each point of view was delivered with the passion
and enthusiasm of a true believer. His arguments for each side
were well-reasoned, supported by evidence, and believable
enough to be the TRUTH.
A conundrum for students who had spent a career of
regurgitating professors' beliefs and feeding those beliefs
back to them. With Toplin, we never knew what he believed.
Most importantly, he did not care what we thought.....as long as
we did the actual hard work of thinking for ourselves. A great
My other son Connor just finished his junior year at Tri-Valley
High School. While very ready for school to be over for the
summer, he happily acknowledges that his junior year was his
best year (he adds, 'so far'). I suspect that one of the reasons
for this is Mr. Stillwell. Mr. Stillwell gave his Chemistry class
an unusual assignment. They had to make a video for class
presentation that, while including some things that they had
learned about Chemistry, was not limited to Chemistry. Lots
of latitude was given. If I understand the situation correctly,
Mr. Stillwell was asking them to stretch, to grow, to be
different today, to 'color outside the lines'.
So, Connor and friends created their video. If you are
waiting to learn Chemistry, be patient. I got captured by the
creativity, the free thinking, and the notion that learning is
often exploration- who knows where it leads. Mr. Stillwell
did as well- he gave them high marks.
God bless a generous and supportive teacher. Here is the
video. Enjoy. (click on the video to enlarge it or click here
if there are issues with viewing)
encyclopedia's knowledge into a single sentence, 'this too shall
That's not a bad moral. If you want a single sentence
you could do worse. What is my sentence?........Frankly, I'm
not sure what my sentence is....Maybe it'd be better to try a
few sentences, and see what sticks. Here goes:
I know that everything is connected like a worldwide version
of the six-degrees-of-separation game.
I know that history is simultaneously a bloody mess and a
collection of feats so inspiring and amazing they make you
proud to share the same DNA structure with the rest of
I know you'd better focus on the good stuff or you're
I know that the race does not always go to the swift, nor the
bread to the wise, so you should soak up what enjoyment
I know not to take cinnamon for granted.
I know that morality lies in even the smallest decisions,
like whether to pick up and throw away a napkin.
I know first hand the oceanic volume of information in the
I know I know very little of that information.
I know I've contradicted myself a hundred times over the
last year, and that history has contradicted itself
thousands of times.
I know you should always say yes to adventures or you
will lead a very dull life.
I know that knowledge and intelligence are not the
same thing- but they live in the same neighborhood.
I know, once again, firsthand, the joy of learning...."
-A. J. Jacobs, taken from The Know It All: One Man's
Quest to Become the Smartest Man in the World
is not the eternal Tao.
The name that can be named
is not the eternal name.
The Tao is both named and nameless.
As nameless it is the origin of all things;
as named it is the Mother or 10,000 things.
Ever desireless, one can see the mystery;
ever desiring, one sees only the manifestations.
And the mystery itself is the doorway
to all understanding.
First Verse, Tao Te Ching