Friday, May 20, 2011

A good time to be an investor...............

Mathew Ferrara looks at some of the problems in the world of
the first time home buyer, and suggests that more and more of
the "first timers" will be renting, not buying.  Full post here
Excerpt here:

"Stricter credit requirements, high unemployment and the largest graduating debt-load in history could keep significant numbers of first-time home buyers out of the purchase market longer than in the past. Smart agents should consider other ways to engage the 80 million-plus Generation Y consumers in America. Why not help them take the first same steps many of them did on their journey toward home ownership. It’s likely to be the first step – and only revenue – they’ll be taking with many younger consumers in the housing market for quite some time to come."

Mathew would appear to be saying that the continuing bear
market in single family home sales will be creating a bull market
in single family home rentals. 

The housing rental business is by no means easy, but, when
well managed, it can be very profitable. With the housing prices
still falling slightly (in our market anyway) and with very
reasonable interest rates, for those who choose to invest in
real estate (in the hands-on fashion), now is a very
good time to get at it.

Sippican Cottage................

Read it regularly.  Learn from it regularly.  Or risk becoming an
"auger handle."  Excerpted from yesterday's really fine post:

It occurs to me that we're pretty much all auger handles now. Standing on the shore, clueless and timid, waiting for someone --someone else, mind you -- to risk his hide out in the torrent while we stand on the shore and pretend to work, wait for lunch, and tell them they're doing it wrong once they're done and we've picked them clean.

A timepiece..................

On false choices............

Justin Wehr operates a blog that I greatly admire.  He had a
post a few days ago trying to identify the difference between
liberals and conservatives.  In the post he asked the question:

   Which is more important for a child to have...

       Independence or respect for elders?
       Obedience or self-reliance?
       Curiosity or good manners?
       Being considerate or being well-behaved?

It would appear that his bias is that liberals place more
value on the independence, self-reliance, curiosity, and
considerate sub-set.  So by default, conservatives must
then all choose the respect for elders, obedience, good
manners, and well-behaved sub-set.

It will be interesting to see if he changes his mind in a
few years.  As a parent, I would suggest that the correct
answer is that these are false choices.  I want my children
to learn both independence and respect, both obedience
(don't cross the street without looking both ways) and
self-reliance, both curiosity and good manners, and both
being considerate and being well-behaved.

I suspect the world can be divided into two groups.
Those who believe you can divide the world into two
groups and those who believe you can't.   Oh, wait.......

Virtually a choir........................

Thanks Nan

Where'd she go....................

In the fall of my senior year in high school, a neighbor friend
and I ventured to the fairly new Spectrum in Philadephia to see
my very first rock concert. Big Brother and the Holding
Company, the Chambers Brothers, and the Vanilla Fudge.
Man, was I in over my head.

Thursday, May 19, 2011

On listening...............

"To listen well is as powerful a means of influence as to talk
well.” – Chinese Proverb

Jeff Turner has completed three parts of his five part series on
listening.  My kids think I have the first three parts down pat.
They are interested in my completing Jeff's series.  Me too. 
I might have also heard something about a hearing aid, but
I'm not certain.

Part 3:  listening to reply    here

Part 2:  listening for reinforcement    here

Part 1:  listening by not listening, or filtering  here

Good stuff worth reading.

It still hard to gain traction.............

From Calculated Risk comes another interesting chart.  This
one tracks architectural billings for non-residential construction. 
Since the architects have to do their thing before the building
industry can do theirs, this is a significant indicator of what the
commercial building industry will be doing, or not doing, over
the coming year.

Full post here.  Excerpts here:

"The architecture billings index fell almost 3 points last
month to 47.6, a level that indicates declining demand for
architecture services, according to the American Institute
of Architects (AIA)

"The majority of firms are reporting at least one stalled
project in-house because of the continued difficulty in
obtaining financing," said AIA Chief Economist Kermit
Baker. "That issue continues to be the main roadblock to
recovery, and is unlikely to be resolved in the immediate

According to the AIA, there is an "approximate nine to
twelve month lag time between architecture billings and
construction spending" on non-residential construction."

Editorial comment:  I suspect that the "continued difficulty in
obtaining financing" is not a result of a "credit cruch", but is
more likely a result of lenders re-imposing some standards 
on development lending- like requiring signed leases for a
significant percentage of the building before approving the
loan.  Banking the old fashioned way.

To thine own self be true.................

Thanks Jeff

Jetboy plays the waiting game..........Hang in there son.....

Jetboy"It's a waiting game at least for the short time being.
One must take the good, the bad and the inbetween, that's
life. This song and this performance though - Brilliant
in a word..."

They call her Mississippi
But she don't flow to me
Spends her light on the Bayou
But she don't come to see
She's the one that makes my dreams
They call her Mississippi
But she don't flow to me

The shape of her horizon
Makes the morning sun
When she puts her eyes on
Each and anyone
She's the one that makes me fall
Midnight moon shines through it all

She's the one that makes me fall
Midnight moon shines through it all
She's the one that makes my dreams
They call her Mississippi
But she don't flow to me
They call her Mississippi
But she don't flow to me

Marching Orders..................

Some wisdom in matching pairs from Nicholas Bate:

In business: think big, think long term.  Have a vision.  But
                  be excellent today.
Personally: act on your vision, but live in the moment.

In business: build a business you truly, passionately believe in.
Personally:  do what you love, nothing less.

In business:  nothing is easy, but do choose; don't just react.
Personally:   It is down to you.  Choose

In business:  decide to be an awe-inspiring organisation.
Personally:   decide to be your own legend.

In business:   turn decisions into actions.
Personally:   nothing happens until you start.

In business:  stay lean, mean, and fast, however big you get.
Personally:   break patterns; stay flexible.

In business:  things will go wrong;  it's how you respond 
                   which is the important point.
Personally:  getting stuck and making mistakes is part of
                  the learning process

In business:  don't complain about the lack of integrity in
                    the business world, have integrity instead.
Personally:   be brilliant in all you do

Excerpted from Chapter 48 of the Instant MBA

Ringo goes along for the ride.....................

Wednesday, May 18, 2011

Life is glorious..........Hug your dad........


  "Get a life in which you are not alone.  Find people you
love, and who love you.  And remember that love is not
leisure, it is work.  Each time I look at my diploma, I
remember that I am still a student, still learning every day
how to be human. Send an e-mail.  Write a letter.  Kiss your
mom.  Hug your dad.

     "Get a life in which you are generous.  Look around at
the azaleas making fuchsia star bursts in the spring; look
at a full moon hanging silver in a black sky on a cold
night.  And realize that life is glorious, and that you have
no business taking it for granted.  Care so deeply about
its goodness that you want to spread it around.  Take
the money you would have spent on beers in a bar and
give it to charity.  Work in a soup kitchen.  Tutor a

     "All of us want to do well.  But if we do not do
good, too, then doing well will never be enough."

-Anna Quindlen
excerpted from A Short Guide to a Happy Life

Taking from the rich and giving to the poor............except what they keep for expenses

Redistribution and school funding.  Probably comes under the
heading of "things I really don't want to think much about."  This
Sunday's Dispatch ran this column from Tom Suddes.  It is sort
of interesting.......the way car wrecks just have to look.

"When house prices rebound, as someday they will, voters in suburban Ohio - as in, "taxpaying" voters - may be primed for a full-scale tax revolt, based on school-finance rumbles. Here's why:

State taxes are "redistributive." When you pay Ohio's gasoline tax (28 cents a gallon) at a Sunoco pump, your money doesn't necessary fill any potholes in the street that leads to the service station.

Same goes with Ohio's income tax. You pay up, then the 132 traffic cops in the General Assembly re-ship that money wherever.

For a long time, what that means didn't register in suburbia. Homeowners there often pay top dollar in state income tax - and, also often, top dollar in property taxes for local schools.

But earlier this year, a light bulb went off in some suburban rumpus rooms, when Republican Gov. John Kasich's proposed budget, unveiled in March, hinted at one of Ohio's powerful political secrets.

As the budget was written (Ohio's Republican-run House has since revised it), state aid to suburban school districts - in truth, never all that great to begin with - was leaner than it had been, even allowing for the end of the Obama administration's "stimulus" funding.

Suburban school superintendents and suburban school boards howled, because the only way to make up sparser state aid - again, never lush to begin with, but still ... - is to try to pass more local levies. Good luck with that.

As it happens, Ohio's Taxation Department tracks how much state income tax is collected within each school district. And the legislature's nonpartisan research staff compiles estimates of how much state aid every school district will get as Ohio's state budget bill now stands. (It's still a work in progress.)

So consider some of Ohio's better-off school districts, how much state income tax their residents paid for 2009 (latest year available) and each district's currently projected 2011-12 state aid. Keep in mind that a district's total state subsidy depends on how many pupils it has, local property wealth, etc. (Yes, comparing income tax to school aid can be like comparing kumquats to kitty cats, except that the numbers show, in concept, how Robin Hood rules state government.)

In greater Cleveland, Rocky River district residents paid $27 million in state income tax and are projected to get $1.33 million in state school aid. Solon paid $44 million and is projected to get $11.7 million for schools. Westlake paid $56 million and is projected to get $4.2 million.

In metro Columbus, Bexley paid $24.7 million in state income tax and is projected to get $3.6 million for schools. Dublin paid $114.9 million and is projected to get $19.3 million. Olentangy paid $127 million and is projected to get $8.1 million. Upper Arlington paid $73 million and is projected to get $3.2 million.

In the Miami Valley, residents of Kettering's city school district paid $43 million in state income tax and are projected to get $17.8 million for schools. Oakwood residents paid $19.8 million and are projected to get $5.1 million.

Now consider two "property poor" school districts, Trimble (north of Athens) and Scioto County's Northwest district, which Democratic former Gov. Ted Strickland attended. In 2009, residents of the Northwest district paid $3.2 million in state income tax are projected to get $12.8 million in school aid. The Trimble district paid $1.15 million and is projected to get $6.3 million.

Is this the way "redistributive" taxation - Ohio's school-aid setup - is supposed to work? Yes. But does suburban Ohio know what the deal is? Usually, no. When voters figure things out, stand back."
Thanks Rick

The beautiful game................

When art and sport combine.........Pele.  Enjoy.

On leadership and bureaucracies.......

Walter Russell Mead revisits von Clausewitz.  He highly
recommends we take his classic, On War , off the shelf
and study it a bit.  Two excerpts from Mead's essay:

"The relationship of individual genius and vision to bureaucratic routine is a serious strategic problem in the modern world. The virtues that make a great military commander are, as Clausewitz notes, intensely personal: imagination and moral courage being perhaps the rarest and most valuable. These are perhaps the worst qualities for an aspiring bureaucrat to have."

"Yet it is not, in the modern world, enough to be a lone visionary. Under modern conditions, strategic genius must necessarily be linked with bureaucracy. The greatest genius needs a military machine and a state structure. More, as Henry Kissinger discovered to his frustration, a hostile bureaucracy can frustrate and sabotage a brilliant leader’s initiatives in many ways. Commands given by a great general or initiatives envisioned by a great diplomat must under modern conditions be executed by great throngs of non-genius employees and functionaries. There is no other way."

Full essay here.

Speaking of von Clausewitz...........

Here are a few quotes attributed to him......

Principles and rules are intended to provide a thinking man
with a frame of reference.

Everything is very simple in war, but the simplest thing is
difficult. These difficulties accumulate and produce a friction
which no man can imagine exactly who has not seen war.
Pursue one great decisive aim with force and determination.
All action takes place, so to speak, in a kind of twilight,
which like a fog or moonlight, often tends to make things
seem grotesque and larger than they really are.  

If the mind is to emerge unscathed from this relentless
struggle with the unforeseen, two qualities are indispensable:
first, an intellect that, even in the darkest hour, retains some
glimmerings of the inner light which leads to the truth; and
second, the courage to follow this light wherever it may lead.

Although our intellect always longs for clarity and certainty,
our nature often finds uncertainty fascinating.

Courage, above all things, is the first quality of a warrior.

It is even better to act quickly and err than to hesitate until
the time of action is past.  

Never forget that no military leader has ever become great
without audacity.

Politics is the womb in which war develops.

War is not merely a political act but a real political
instrument, a continuation of political intercourse, a
carrying out of the same by other means.

The backbone of surprise is fusing speed with secrecy.

The political object is the goal, war is the means of reaching
it, and the means can never be considered in isolation form
their purposes.

War is not an exercise of the will directed at an
inanimate matter.

A conqueror is always a lover of peace.

Wonder what would have happened if......

.....he had stayed at the London School of Economics instead
of leaving to be a singer in a rock and roll band?

Tuesday, May 17, 2011

The future of libraries............

This is still one of my most valued possessions.  Used it twice in
the past week. Robert Crais has a new book out as does David
Baldacci.  Sleep time may be imperiled over the next few days.

 Seth Godin points out remarkably well,
there are some problems, some competition.  As usual Seth
doesn't point out a problem without offering a solution.  His
full, and important, blog post is here.  Excerpts here:

"The library is no longer a warehouse for dead books. Just
in time for the information economy, the library ought to
be the local nerve center for information."

"We need librarians more than we ever did. What we don't
need are mere clerks who guard dead paper. Librarians are
too important to be a dwindling voice in our culture. For
the right librarian, this is the chance of a lifetime."

Whose deal is it..................?

Paul Cezanne and his card players have been hanging out at the
Metropolitan Musuem of Art in New York City.  The NY Times
review is here, a fun excerpt is here:

"The big players who dominate the art world today would
have a hard time identifying with CĂ©zanne’s peasants and
laborers: men quietly passing the time, happy enough with
the hand that life has dealt them."

...a place to hide away........

Got that right...........

Thanks Ka-Ching!

The moment that can change your life..........

Thanks Jessica

Monday, May 16, 2011

Take care of the pennies............

I recognize that foreign aid is a teeny-tiny part of the Federal
budget.   But.......if we made it harder for Congress to spend
money, like by requiring a debate for each bit of foreign aid
instead of lump-summing it, maybe they would spend it smarter
and slower.  Maybe they would do less.  Call me a dreamer.

Thanks Jon

A poem for Monday.......

The Very Short Sutra On The Meeting Of
The Buddha And The Goddess

Thus I have made up:

Once the Buddha was walking alone along the
forest path in the Oak Grove at Ojai, walking
without arriving anywhere or having any thought
of arriving or not arriving

and lotuses shining with the morning dew
miraculously appeared under every step
soft as silk beneath the toes of the Buddha

When suddenly, out of the turquoise sky,
dancing in front of his half-shut inward-looking
eyes, shimmering like a rainbow
or a spider's web
transparent as the dew on a lotus flower,

- the Goddess appeared quivering like a
hummingbird in the air before him

She, for she was surely a she
as the Buddha could clearly see
with his eye of discriminating awareness wisdom,

was mostly red in color though when the light
shifted she flashed like a rainbow.

She was naked except for the usual flower
ornaments Goddesses wear

Her long hair was deep blue, her two eyes
fathomless pits of space and her third eye a
bloodshot ring of fire.

The buddha folded his hands together
and greeted the Goddess thus.

"O Goddess, why are you blocking my path.
Before I saw you I was happily going nowhere.
Now I'm not sure where to go."

"You can go around me," said the Goddess,
twirling on her heels like a bird darting away, but
just a little way away, "or you can come after me.
This is my forest too, you can't pretend I'm not

With that the Buddha sat supple as a snake solid
as a rock beneath a Bo tree that sprang full-leaved
to shade him.

"Perhaps we should have a chat," he said.

"After years of arduous practice at the time of the
morning star I penetrated reality, and now..."

"Not so fast. Buddha.
I am reality."

The Earth stood still, the oceans paused,

the wind itself listened - a thousand arhats,
bodhisattvas, and dakinis magically appeared to
hear what would happen in the conversation.

"I know I take my life in my hands," said the
Buddha. "But I am known as the Fearless One
- so here goes."

And he and the Goddess without further words
exchanged glances.

Light rays like sunbeams shot forth so bright that
even Sariputra, the All-Seeing one, had to turn

And then they exchanged thoughts and the
illumination was as bright as a diamond candle.

And then they exchanged mind

And there was a great silence as vast as the universe
that contains everything

And then they exchanged bodies

And clothes

And the Buddha arose as the Goddess
and the Goddess arose as the Buddha

and so on back and forth for a hundred thousand
hundred thousand kalpas.

If you meet the Buddha you meet the Goddess. If
you meet the Goddess you meet the Buddha

Not only that. This: The Buddha is the goddess,
the Goddess is the Buddha.

And not only that. This: The buddha is emptiness
the Goddess is bliss, the Goddess is emptiness the
Buddha is bliss.

And that is what and what - not you are. It's true.

So here comes the mantra of the Goddess and the
Buddha, the unsurpassed non-dual mantra. Just to
say this mantra, just to hear this mantra once, just
to hear one word of this mantra once makes
everything the way it trule is: OK.

So here it is:
    Hey, silent one, Hey, great talker
Not two/Not one
    Not separate/Not apart
This is the heart
    Bliss is emptiness
    Emptiness is bliss

Be your breath, Ah
Smile, Hey
and relax, Ho
and remember this: You can't miss.

-Rick Fields
from Risking Everything: 110 Poems of Love and Revelation

Good neighbors and smart marketers..........

The Grill on 21st Street is a successful restaurant located in the
north end of Newark.  There are many reasons for its success,
but one of them is the relentless entrepreneurial instincts of Eric
Mason, the owner.   Recent readers of this blog will remember
that Ollie's Bargain Outlet (good stuff cheap) just opened a
32,500 square foot retail store in part of the former Big Bear
store in Newark.  The Grill is located directly across the street.

The good folks in Newark have a tendency to flock to anything
new.  The traffic at Ollie's appears to be strong.   The Grill took
the opportunity to post a "Welcome Ollies" sign on their
LED message board.  They follow that sign up with the one
shown below.  If it is hard to read, it says:
                          10% off
                          Ollie Cus
Not a bad idea.  Save money by buying "good stuff cheap,"
and then cross the street and save 10% on lunch or dinner
by showing your Ollie's sales receipt.

Thanks Eric

The Ollie's parking lot filling up at 11:00 on a Sunday morning.


I have no idea what this means.............

Professor Green says:

"Albert Saiz showed how rent is endogenous with respect to interest rates. At the urban fringe, where land has no value, rent is equal to construction cost multiplied by the interest rate. This pins down urban rents. When interest rates fall, so do rents at the fringe. Nevertheless, land values rise, because people want larger structures (because of falling rent), and so they demand more land. Consequently, rent-to-value ratios fall as interest rates fall."

Now, Albert Saiz is an Assistant Professor of Real Estate at
Wharton and is undoubtedly way smarter than your average
real estate broker.  But.....first he hurts my feelings by saying
that land at the urban fringe has no value.  Hey, I own some
of that urban fringe land.  I'm sure hoping it has value.

Anyway, the current construction cost for twenty one-bedroom
apartments, exclusive of land, in our little corner of the world is
$40,000 per unit.  If we follow Saiz's formula and multiply that
by a 6.5% interest rate we get a projected rent per unit of $2,600. 
Market rent for those same one-bedroom units locally is $425.00
per month  or $5,100 per year.  There is a disconnect or a
misunderstanding here somewhere.

As near as I can tell, there is zero relationship between falling or
rising interest rates and rent.  The history of our market for the
past ten years would indicate that making mortgage money
available to those who traditionally would not have qualified
causes rents to fall.  Constrictions in credit, which make it difficult
for developers to build new units, seems to enable rents to rise. 
Employment/unemployment rates also seem to factor greatly in
the rise or fall of rents.  In other words, the greatest single
determinant for rents rising or rents falling is the vacancy rate.
Many factors influence the vacancy rates, but interest rates
do not appear to be one of them.

It is the last sentence that really gets me. "Consequently,
rent-to-value ratios fall as interest rates fall."  Maybe I'm
just old-fashioned, but I was taught that the rent-to-value
ratio - or the cap rate - was a measurement of the risk
inherent in the investment and was independent of financing.

While it is true that many people have overpaid for investment
real estate during this period of falling interest rates, the
current turmoil in the commercial real estate world seems to
indicate that is not a particularly smart choice.

Sunday, May 15, 2011

A blog worth following..........

The Ragamuffin Ramblings.........  here

      We’re wanderers trying to make sense of this weary land
          Wondering if the cries of the oppressed go unheard
                             If injustice will ever end
          Because in a place of neon lights and endless mirth
    We are the spiritual exiles who’ve been homeless since birth

                    Clear-cut answers aren’t forthcoming
                      And destructive solutions abound
                        We trip and fall with every step
                     Because there’s darkness all around

      I can’t see where the end is and I’ve lost sight of the start
         The line between good and evil is becoming blurred
                  Because it cuts through my own heart

               I ask for answers by what I really seek is You
                  And in all the chaos, one thing I hold onto
   Is the fact that You walked through the wilderness before me
                         You’ve been homesick too

                And though the cause seems hopeless
                   And the night just seems so long
                              I keep going on
     Glimpsing before me the image of a wanderer, an exile
                         A fellow pilgrim in this land
                Because the hope of the whole world
            Rests on the shoulders of a homeless man

                   And though my vision grows dim
                               All I hold on to
                               All I hold on to
                         Is You, is You, is You…

Thanks Nicole

Sunday's Verse.......

22   Then Paul stood in the midst of Mars' hill, and said , Ye men of Athens, I perceive that in all things ye are too superstitious.

23   For as I passed by , and beheld your devotions , I found an altar with this inscription , TO THE UNKNOWN GOD. Whom therefore ye ignorantly worship , him declare I unto you.

24   God that made the world and all things therein , seeing that he is Lord of heaven and earth, dwelleth not in temples made with hands;

25   Neither is worshipped with men's hands, as though he needed any thing, seeing he giveth to all life, and breath, and all things;

26   And hath made of one blood all nations of men for to dwell on all the face of the earth, and hath determined the times before appointed , and the bounds of their habitation;

27   That they should seek the Lord, if haply they might feel after him, and find him , though he be not far from every one of us:

28   For in him we live , and move , and have our being ; as certain also of your own poets have said , For we are also his offspring.

29   Forasmuch then as we are the offspring of God, we ought not to think that the Godhead is like unto gold, or silver, or stone, graven by art and man's device.

30   And the times of this ignorance God winked at ; but now commandeth all men every where to repent :

31   Because he hath appointed a day, in the which he will judge the world in righteousness by that man whom he hath ordained ; whereof he hath given assurance unto all men, in that he hath raised him from the dead.

32   And when they heard of the resurrection of the dead, some mocked : and others said , We will hear thee again of this matter.

The Holy Bible
Acts 17:22-32   King James Version

On friendship.....................

Thanks Tyler

".....and live differently......."

Life changing lessons learned while waiting for the plane to
crash into the Hudson River.  Well worth viewing.

Thanks TED

...don't allow the day.......

Visiting with Emmet Fox..........

May 15

"God is infinite perfection and he is not concerned with our limited ideas about time and space and matter.

      For thus saith the high and Lofty One that inhabiteth eternity, whose name is Holy;  I dwell in the high and holy place, with him also that is of a contrite and humble spirit, to revive the spirit of the humble, and to revive the heart of the contrite one (Isaiah 57:15).

God is not progressing or improving.  What improves is our understanding of Him, and as this happens all our conditions necessarily improve too.  There was never a time in your history when God was not all that He is today, and there never can come a time when God will be any more than He is today.

God is continually expressing Himself in new ways - but this in to improvement; it is unfoldment.  Your life is simply part of this unfoldment, and that is the only reason for your existing at all.  You are the living expression of God now -  and to understand this is salvation."

Emmet Fox
Around the Year with Emmet Fox:
A Book of Daily Readings