I'll first begin by saying that I have thought about the Rat often over the year but I just can't seem to get my act together. Where do I start this rant? I'll begin by listing a few of my favorite things: the Mac, the state of US politics, the markets, the US economy, the Helsinki protocol, and female ejaculations.
I love the Mac. I finally bought one this winter after only really using a PC. The Mac is pure elegance and intuitive design. The OS is completely superior and one has to love and appreciate the design and attention to detail on the hardware. Also the big complaint with Mac is that there aren't enough programs. While I would concede that on a few points, for the most part there is everything that one needs. I'll expound on the virtues of the Mac in a later Mac-only blog.
The republican party is getting worser and worser over the last 11 months. They won the Nov election and many a person has considered fleeing to Canada, Australian, and NZ. Maybe a little over- reacting but maybe not. The pres. thinks he has this great mandate and all these pundits have piled on the mandate and political capital bandwagon but really, where's the mandate? I mean the guy won by about 20 electoral votes and just a couple percentage points on the popular vote. By the way, I don't believe or trust the new electronic voting methods. I used one in FL but who knows what monkey business can go on. Speaking of elections, this year's FL was OH. This time the repubs didn't want to wait for the courts so they just prevented a bunch of urban voters from making it to the booths. The smugness of victory of these repubs is enough to make me vomit. Anyway I won't hash out the rants of my pre election thoughts, except suffice to say that the Pres is an idiot and bankrupting every aspect of country and most of the people deserve what they are getting because they reelected the moron.
Since then: we have the Republican Congress and President getting involved in the Schiavo case, which is clearly a state matter; a quest to overhaul Soc Sec, which I think is overall a good thing except that of course with Bush you can't trust anything he does. All private accounts will do is expand the deficit and allow the money management industry a new revenue track. If the president and congress really wanted to fix the solvency problem, they would do the following: set up the accounting of the "fund" separately - this would make the currents budgets honest because currently the quoted budget deficit includes FICA receipts as revenue so the deficit is understated, and then utilize a mix of stock's and bonds and alternative investments to increase the investment performance. 50 states do this and most countries, but for some reason we have chosen not to. Now that said, the private account idea is not a bad one, it's just that given our current deficits and what this admin has done in Iraq and with Medicare, I don't trust anything about it.
BTW Iraq is a never ending mess that we will not be getting out if anytime soon. There may or may not be a democracy there in 10 years, but there was never any WMD and that was the excuse given for war. Our troops our seriously under trained (I was in the Nasty Guard and if we are using the troops that I worked with, it's no wonder the insurgents are doing so well).
The markets: I don't know so I won't comment. I think in general a safer mix is incorporating global securities into the mix. Those of you who know me will conclude the following: this is more an indictment of what I think of the future state of the US economy rather than any new found belief in other countries' economies.
I think our economy is not doing well. The weak dollar is not a good thing; the deficit and the debt are not good things; our schools blow; we are debating whether evolution is a fact or creationism (intelligent design is the euphemism du jour), we have the pres basically dismissing science in favor of religious cockamamie; and in our quest for "homeland security" we have taken our eye of the global competitiveness ball. It's all in the quest for Bush and Cheney and their friends to amass more lucre.
Before I forget, I love Bush's comments about frustration w/ high gas prices: "I have asked Congress for an Energy Bill" Well his idea of a bill is one in which more oil pumped out of the ground and nothing is done about consumption. But the thing with Bush is, he may speak the words but that absolutely means the actions won't follow, and in fact the opposite will happen. Cynicism at its highest point. Western civilization in general and our country in particular is completely dependent on oil and we need to eliminate it completely. Using oil is enriching and empowering the most corrupt and dangerous parts of the world: the Middle East, Nigeria, Venezuela, Russia, Texas, etc.
Okay I'll quickly get to the last two points: first Helsinki Protocol. This is a protocol I have established to govern dropped cellphone calls. If a call is dropped, whoever made the original call should redial. This solves the uncertainty around calling back and repeatedly going into voicemail. Why Helsinki? Because I wanted to name if after a city to sound legit, and since Helsinki or Finland is closely associated with cellphones in general (and Nokia in particular) I chose Helsinki. My idea, my protocol, my choice.
Next female ejaculation. I really don't want to go into it here because I don't have any video exhibits, but you just got to see it to believe it! A 10.
Saturday, May 07, 2005
Friday, June 25, 2004
A Brief Commentary on the State of the Asset Bubble
Since I am commenting on bubbles, let me share with you a few observations I have made after doing a little research on this phenom known as Interest Only mortgages. As you may have picked up from our various conversations over the last year, I have concluded that the cause of the run up in real estate values has been not just the reduction in rates, but more importantly the new loan structures that have been popping up . The most prevalent of these have been the Interest Only loans. In places like CA and FL, and other major markets, these loans are easily 50% of the volume in the last 6-12 months. Also increasing have been what are called Stated Income mortgages (where the borrower does not need to document his income); we also have another name for these mortgages - Liar Loans.
Anyway, let's look at the numbers, shall we ? (as I have also said over the years, based on my vast level of commercial banking experience, "Numbers don't lie - people do!") As of this past Spring, the payment on a 3-yr ARM I/O was approximately 51% of a what the payment would have been on a 30-yr fixed fully amortizing mortgage (3.5% rate on the 3-yr ARM I/O vs. 5.5% rate on the 30-yr fixed); and the I/O payment was 65% of a similar rate amortizing 3-yr ARM. It gets scarier. In three years when the I/O begins to amortize (over the remaining 27 yrs. rather than 30 yrs.), assuming that the rate bumps up to its cap of 2% over the start rate, the rate is now 5.5% and the payment is double what it had been. Assuming that these borrowers qualified for these loans with what we call a front-end ratio of about 28-30% (to be fair, the numerator in this fraction includes not only P&I, but also taxes and insurance, which will probably not double in cost but can certainly rise), then this doubling of the payment will now mean that the new payment is between 50 and 60% of the borrower's gross income. Ouch! That's gotta hurt! Interestingly, the MI companies have not been charging any additional premium for I/O loans versus amortizing loans. To paraphrase a song title from the great and late grunge rocker Kurt C, "smells like a shorting opportunity." As an offset to massive defaults, the other trend it may portend, is another refi boom beginning in a couple years as the I/O's start amortizing. Think about it.
Let me move on to something a little more light-hearted (since I also promised when I started this blog some current events and culture). I saw the movie "Dodgeball" a couple days ago and it was great. I really need to take a notebook with me if I am going to comment on these movies since I seem to have the memory of RR in his golden years, but basically, you all know the plot, right? Group of lovable losers needs to play a rival group of steroid induced, Teutonic specimens to save their lowly gym from certain destruction by a demonic psychopath (sort of like "The Country Bears" without the great music and dance numbers). Anyway, the promos mention Ben stiller and V. Vaughan, and they are pretty good, but movie is made by a couple other characters, including Jason Batemen, and Rip Torn (even Lance Armstrong has a great cameo).
Anyway, let's look at the numbers, shall we ? (as I have also said over the years, based on my vast level of commercial banking experience, "Numbers don't lie - people do!") As of this past Spring, the payment on a 3-yr ARM I/O was approximately 51% of a what the payment would have been on a 30-yr fixed fully amortizing mortgage (3.5% rate on the 3-yr ARM I/O vs. 5.5% rate on the 30-yr fixed); and the I/O payment was 65% of a similar rate amortizing 3-yr ARM. It gets scarier. In three years when the I/O begins to amortize (over the remaining 27 yrs. rather than 30 yrs.), assuming that the rate bumps up to its cap of 2% over the start rate, the rate is now 5.5% and the payment is double what it had been. Assuming that these borrowers qualified for these loans with what we call a front-end ratio of about 28-30% (to be fair, the numerator in this fraction includes not only P&I, but also taxes and insurance, which will probably not double in cost but can certainly rise), then this doubling of the payment will now mean that the new payment is between 50 and 60% of the borrower's gross income. Ouch! That's gotta hurt! Interestingly, the MI companies have not been charging any additional premium for I/O loans versus amortizing loans. To paraphrase a song title from the great and late grunge rocker Kurt C, "smells like a shorting opportunity." As an offset to massive defaults, the other trend it may portend, is another refi boom beginning in a couple years as the I/O's start amortizing. Think about it.
Let me move on to something a little more light-hearted (since I also promised when I started this blog some current events and culture). I saw the movie "Dodgeball" a couple days ago and it was great. I really need to take a notebook with me if I am going to comment on these movies since I seem to have the memory of RR in his golden years, but basically, you all know the plot, right? Group of lovable losers needs to play a rival group of steroid induced, Teutonic specimens to save their lowly gym from certain destruction by a demonic psychopath (sort of like "The Country Bears" without the great music and dance numbers). Anyway, the promos mention Ben stiller and V. Vaughan, and they are pretty good, but movie is made by a couple other characters, including Jason Batemen, and Rip Torn (even Lance Armstrong has a great cameo).
Saturday, June 05, 2004
Saturday June 5, 2004
Don't you love my optimism? Like this Blog will still be holding my interest in 2005.
Anyway, it was a good news day to comment on (I'll skip Tenant resigning opinion since that was yesterday's news, literally). Reagan died and Smarty Jones lost.
Reflecting on Reagan and his legacy has been building over the last couple days as rumors were leaking from CA that he was nearing the end. I have to say that it has been interesting to compare/contrast our current Pres with RR. They both were looked down upon by the intellectual elite, but at the core I think there is truly a profound difference. RR may have come across as a simpleton, but his core ideas - Ending the Evil Empire, recognizing that government had limits, i.e. shrinking Gov't, including tax reduction, rebuild defense - as it turned out really worked, and were born from years of real life experience.
On the other hand, we have the current President. He is launching ideas that are straight out the Democrat playbook. Unfunded mandates that expand the federal government, like no child left behind. Nice idea, doesn't work in real world. Schools are clearly an area that work more effectively on the local level. I suspect if there are problems with some schools on a national basis it is funding driven rather than what should the children be taught. Medicare expansion through the prescription drug benefit. Incredible expansion of the welfare state, and the budget deficit. And lastly the war in Iraq. The current occupant has ideas that he only communicated after launching this illconceived war in Iraq, i.e. he wants to remake the middle east as a paragon of democratic virtue. Yeah right, like anyone here at home would have signed on for that when he proposed launching the proactive war 18 months ago. I guess he thinks that since Israel is a democracy, than the rest of the middle east can become one. An then he wraps everything in these blatant evangelical Christian overtones, like he is on a mission from God. Very scary. And lastly the sheer incompetence of the senior civilian management coming out of the Pentagon. Between thrusting the urgency of launching the invasion because Saddam had his finger on the button and he was itching to push it, and thereby bypassing diplomacy with Turkey to let our troops launch from there for a northern front, to concluding that the 135,000 number was more than enough to secure a country the size of California. I mean how naive can they be. There were more people at the Belmont Stakes than that, which leads me to my next topic....
Smarty Jones lost his chance for the record books. Truly was sad because everyone wanted him to win and they seemed to need this Seabiscuit-like story to reach completion. My Mom and aunt and sister were all very disappointed, and it seemed that even the winning jockey and trainer were disappointed. I did notice that based on the odds before post time, that if one had placed a bet on all of the other eight horses, if any of them had won (except for Hard Luck Ten, which was 7-1) you would have made at least twice your money back. Almost a can't lose bet (unless the favorite wins, but clearly those were great odds). As it turns out the winner was something like 36-1, so he paid $72. Therefore, if you had bet $10 on each of the other eight horses, then you would have bet $80 and received $360. Too bad for Smarty Jones, but more importantly too bad for me for not noticing these outrageous odds until it was too late to do anything about it. Also, it would have been the classic hedge for me. Bet the opposite way of what my heart wants. If Smarty Jones wins, well emotionally I am happy, even though I just lost $80. If he loses, well than counting my winnings helps to heal a broken heart. This is pretty much what I do every time the Buckeyes play Michigan.
Anyway, it was a good news day to comment on (I'll skip Tenant resigning opinion since that was yesterday's news, literally). Reagan died and Smarty Jones lost.
Reflecting on Reagan and his legacy has been building over the last couple days as rumors were leaking from CA that he was nearing the end. I have to say that it has been interesting to compare/contrast our current Pres with RR. They both were looked down upon by the intellectual elite, but at the core I think there is truly a profound difference. RR may have come across as a simpleton, but his core ideas - Ending the Evil Empire, recognizing that government had limits, i.e. shrinking Gov't, including tax reduction, rebuild defense - as it turned out really worked, and were born from years of real life experience.
On the other hand, we have the current President. He is launching ideas that are straight out the Democrat playbook. Unfunded mandates that expand the federal government, like no child left behind. Nice idea, doesn't work in real world. Schools are clearly an area that work more effectively on the local level. I suspect if there are problems with some schools on a national basis it is funding driven rather than what should the children be taught. Medicare expansion through the prescription drug benefit. Incredible expansion of the welfare state, and the budget deficit. And lastly the war in Iraq. The current occupant has ideas that he only communicated after launching this illconceived war in Iraq, i.e. he wants to remake the middle east as a paragon of democratic virtue. Yeah right, like anyone here at home would have signed on for that when he proposed launching the proactive war 18 months ago. I guess he thinks that since Israel is a democracy, than the rest of the middle east can become one. An then he wraps everything in these blatant evangelical Christian overtones, like he is on a mission from God. Very scary. And lastly the sheer incompetence of the senior civilian management coming out of the Pentagon. Between thrusting the urgency of launching the invasion because Saddam had his finger on the button and he was itching to push it, and thereby bypassing diplomacy with Turkey to let our troops launch from there for a northern front, to concluding that the 135,000 number was more than enough to secure a country the size of California. I mean how naive can they be. There were more people at the Belmont Stakes than that, which leads me to my next topic....
Smarty Jones lost his chance for the record books. Truly was sad because everyone wanted him to win and they seemed to need this Seabiscuit-like story to reach completion. My Mom and aunt and sister were all very disappointed, and it seemed that even the winning jockey and trainer were disappointed. I did notice that based on the odds before post time, that if one had placed a bet on all of the other eight horses, if any of them had won (except for Hard Luck Ten, which was 7-1) you would have made at least twice your money back. Almost a can't lose bet (unless the favorite wins, but clearly those were great odds). As it turns out the winner was something like 36-1, so he paid $72. Therefore, if you had bet $10 on each of the other eight horses, then you would have bet $80 and received $360. Too bad for Smarty Jones, but more importantly too bad for me for not noticing these outrageous odds until it was too late to do anything about it. Also, it would have been the classic hedge for me. Bet the opposite way of what my heart wants. If Smarty Jones wins, well emotionally I am happy, even though I just lost $80. If he loses, well than counting my winnings helps to heal a broken heart. This is pretty much what I do every time the Buckeyes play Michigan.
Thursday, June 03, 2004
Opening Salvo
Welcome to my forum to rant, postulate, digress, and generally comment, without any repercussion, on anything that happens to move me. I expect this will cover politics, pop culture, sports, books, social interactions, and anything else that happens to bug me that day. Hopefully this Blog will be humorous, long-lived, irreverent, prescient, and occasionally thought-provoking. If anyone ever happens to read any of this, feel free to comment on anything (except spelling and grammar) without any fear of physical reprisal.
I will open by saying I just returned this evening from a nice five-day vacation in SF with my family. Generally, had a great time. Took in a Giants game (they really know how to market a team). Saw most of the sites. Cruised the Bay. The kids had a great time. We rented these talking go-cart things one afternoon (www.gocarsf.com), which was really the highlight of the trip. Went to Napa one afternoon with the kids. Big mistake. Not really anything for them to do, so they went a little berserk in the car on the way back. Very hot up there in the summer. If anyone from SF needs a reprieve from the cold wet summer in the city, just drive an hour north, and you'll be is hot as Ali Baba and his forty thieves. Great City. Wish I lived there (along with a half-dozen other places).
A few observations:
I hadn't really followed the Scott Peterson case at all except for one article in VF about six months ago. The SF paper is covering it closely and the opening arguments began this week. I'm no attorney, but based on what I read in the paper, he may be a cad and a real scum but it doesn't sound like they have any real evidence that he killed his wife. He certainly isn't the first dude to cheat on his wife, but that doesn't make him a murderer. It sounds like the Modesto police really f'd up the investigation and pretty quickly eliminated all other suspects, and so now they are stuck prosecuting a case with a lot of coincidences but no physical evidence. I will definitely be following the case now.
I noticed a few fat people out there. I thought the major cities would be free of serious obesity but I was wrong. Definitely less than here and other places, but still there nonetheless. I just don't know how these fat people can get through the day. They truly have no shame.
Well that is it for my opening statement. As I get more comfortable with the forum, I will become more provocative.
I will open by saying I just returned this evening from a nice five-day vacation in SF with my family. Generally, had a great time. Took in a Giants game (they really know how to market a team). Saw most of the sites. Cruised the Bay. The kids had a great time. We rented these talking go-cart things one afternoon (www.gocarsf.com), which was really the highlight of the trip. Went to Napa one afternoon with the kids. Big mistake. Not really anything for them to do, so they went a little berserk in the car on the way back. Very hot up there in the summer. If anyone from SF needs a reprieve from the cold wet summer in the city, just drive an hour north, and you'll be is hot as Ali Baba and his forty thieves. Great City. Wish I lived there (along with a half-dozen other places).
A few observations:
I hadn't really followed the Scott Peterson case at all except for one article in VF about six months ago. The SF paper is covering it closely and the opening arguments began this week. I'm no attorney, but based on what I read in the paper, he may be a cad and a real scum but it doesn't sound like they have any real evidence that he killed his wife. He certainly isn't the first dude to cheat on his wife, but that doesn't make him a murderer. It sounds like the Modesto police really f'd up the investigation and pretty quickly eliminated all other suspects, and so now they are stuck prosecuting a case with a lot of coincidences but no physical evidence. I will definitely be following the case now.
I noticed a few fat people out there. I thought the major cities would be free of serious obesity but I was wrong. Definitely less than here and other places, but still there nonetheless. I just don't know how these fat people can get through the day. They truly have no shame.
Well that is it for my opening statement. As I get more comfortable with the forum, I will become more provocative.
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