It's getting warmer

Beyond a tipping point?

Seven...Hundred...Billion

I heard two practical numbers that are easier to wrap ones head around than 700B. Apparently, it breaks down to about $10000 per family or, put another way, $2000 per person. We USians already owe $32000 each in future revenue. Do we really want to pile on another $2000?

I believe debt is indentured servitude. When you go in to debt, you are promising away part of your future earnings which means you are also promising away future freedoms. Just work through a few compound interest scenarios. For example, compare a 15 year mortgage with %20 down against a 30 year mortgage with nothing down. Then compare saving up including interest on those saving for 20 years to buy a house with cash even after figuring in a modest rent. Do it for any price house. It's amazingly sad how people, organizations, and governments are willing to voluntarily surrender their financial liberty for years to come simply for a quick financial fix today. Suze Orman's personality annoys me a little but, in my view, her financial message is pretty good. Dave Ramsey's is even better.

Joe Heller is so good at his job. Here's his excellent commentary on the president's speech pushing for the $700B bailout. I don't know much about this Paulson guy except that he is Secretary of the Treasury, a Scientologist, and used he used to run Goldman Sachs which Warren Buffet just bailed out. Even if Secretary Paulson is the right guy to fix the current situation, I don't particularly like handing him a blank check for $700B with next to no guidelines and oversight. On the other hand, I don't want to see financial disaster any more than anyone else. So what can we do?

Mark Cuban is a guy who struck it big in tech. He has an idea too. I gather he's saying we should repackage this housing debt and it's revenues for individual investors to buy chunks of at a part of something called an exchange-traded fund. He's willing to buy $50M worth. Interesting idea.

I have a few thoughts too:

* ARMs and balloon mortgages are STILL driving people out of their homes. We need to cap interest rate increases on loans on a primary residence at 1% a year. Don't let the lenders replace them with fees. Make it retroactive for anyone still in their home-- retroactive for, say, three years-- and discount future payments by half until the retroactive portion is paid off. Many more details would have to be worked out, but you can't go wrong with ruthlessly supporting folks trying to stay in their homes. These loans were irresponsibly made and the investors who purchased them did not do their due diligence. I'm OK with them losing out on profits. Let's remember, they're still looking for the principal back too and no one pays on a home they give back.

* Loan the fat cats enough cash to tide them over temporarily but do it in such a way that the taxpayers will almost certainly get their money back. These business who dug themselves in to a hole deserve to dig their own way out or go under. Isn't this situation exactly why we have laws covering companies reorganizing and restructuring and/or being disassembled and sold off through bankruptcy?

* Mitigate the harm of anyone who does go under by giving local banks and credit unions access to this money to lend. They actually get to KNOW their clients and have relationships with them. Give these local establishments a commission on loans as they are repaid and a penalty (against that commission) on loans that aren't. The local establishment services the loan and no reselling because Uncle Sam holds the note. The upsides to families, neighborhoods and local economies of this system seem obvious to me. I wonder if this is what Fannie and Freddie were supposed to be?

This whole mess occurred because the risk of lending was totally detached from the rewards of lending. When you put multiple layers of financial devices between the folks loaning and the folks borrowing, you are going to make more bad loans. When you add ratings companies giving bogus ratings to win business in to the mix, the investor has absolutely no idea what risk they are taking on. The people working for S&P and Moody are as responsible for this mess as anyone. Heads should roll there, big time.

Speaking of consequences, I'm a big fan of feedback loops in organizations. For example, when an insurance agent writes a policy on a house and that house that later burns down, that agent loses some or all of their quarterly or monthly bonus. If I were running an insurance agency, the goal would never be to write the most coverage. The goal would be to write good coverage. Personally, I don't want my insurance company insuring some dude with a box of rags next to the hot water heater when the agent walks through because that agent can earn a commission today. I want to incentivize (I hate buzzwords, but there you go) agents to skip writing that policy because it will cost all stakeholders over the long term.

Sorry this turned in to an essay instead of just one link. That seems to be occurring more and more. This current mess, the lack of grown up behavior that caused it, just kept rattling around in my head and I had some time between working with a customer. Forgive the bad writing and thanks for reading if you made it this far. We must legislate responsible behavior when gross irresponsibility hurts other people trying to do the right thing.

When you hold an event, plan to pay for the coffee!

Apparently these Obama guys weren't aware of that. I would like to hear they offered the 10 bucks or promised to come back or something...

I'd also like to hear their side of it.

Family in Boot Camp

I think of him often.

Presidential Candidate Tax Plans

Which bracket are you in?

Now competing in 49 states!

I can understand why Obama wouldn't bother, but you would think McCain and campaign might bother to jump through the requisite hoops for 34 reliably republican electors.

Bob Barr of the Libertarian party has filed suit to have both major party candidates thrown of the TX ballot. No idea on the actual merit of Mr Barr's case but his press release feels compelling and fact based. Taking 34 votes away from McCain would effectively hand the election to Obama. I wonder how many Obama supporters are sending checks to the TX libertarian party to support this lawsuit?

Economy Issue

Is it possible to execute Mark Cuban's suggestion in soundbites that will penetrate the media enough to get through to the voters? He does point out something obvious. Any detailed economic plan presented today will probably be totally outdated in January. Guests on MTP this morning suggested it's time for the candidates to link themselves to economic experts. Mr Warren Buffet and NY Mayor Michael Bloomberg were mentioned. I'd look at dragging a Vanguard alumnus with decent speaking skill out of retirement. Vanguard group has a prudent, workmanlike financial philosophy and still retain their solid reputation. From what I gather, they've been among the grownups while the teenagers have gleefully clogged the financial system with bad debt.

We're printing money to finance at least some of these bailouts. Isn't the U.S. devaluing it's currency by doing this? As these new dollars work their way in to the economy they will make the dollar buy less. The part I don't know is how much money got printed compared to how much is out there and what inflationary impact that will/should cause. Anyone seen reputable reporting on this angle anywhere? If so, can you shoot me a link?

While I'm talking about the media, has anyone out there seen *any* coverage on the fact that low end rents are going up because low end rental supply is going down? You see, banks don't rent out properties after gaining ownership of them with the high bid on court house steps after a foreclosure. The cause of the real estate crisis comes down to a disconnection of short term incentives and long term risk. If you have cash to invest there are some outstanding bargains out there on real things like real estate. Now's the time. You'll take that defaulted loan off of some banks books and get that unit back in to circulation. Unemployment, while not great, is still in reasonable shape. I believe there are opportunities to be had in this environment. There are opportunities in any market, especially in turbulent markets.

Government is now attempting to mitigate a huge financial set-back in the midst of presidential election crunch time. No doubt we'll dig out of all this bad debt eventually but it's going to take years, not months. Since the problem was caused by the insane unlinking of profits and consequences, perhaps the presidential candidates could talk about how we can all work to shelter our own neighborhoods by investing one rental and/or flip at a time. Since credit is at a stand still perhaps it's time for individual investors to offer land contracts to buyers who would normally get a loan for a house. Local banks, credit unions and savings and loans with assets could be having a field day by selling reliable mortgages in this market while the big banks are too chicken. I'd wager that the folks offering land contract or mortgages these days might bother to ensure that there's a good chance that they'll get their money back before making the deal.

125 down, 75 to go

This fat guy is posting again.

Better somewhere, worse elsewhere

Congratulations to Habitat for Humanity International, Thrivent Financial for Lutherans and most especially the Torres/Avila family!
Wish I could come to the presentation.

Sending toxic waste to other countries who cannot or will not perform proper cleanup is unacceptable.

gov.palin@yahoo.com

Cracked. Apparently there is enough there to raise questions about doing public work through a private email account. This is what is in the commons so far. Is it wrong of me to hope the white hatter who locked the account down didn't do it until after someone got a copy of everything? I'll keep an eye out on the nether regions of cyberspace to see if anyone posts any significantly more content.


Which is worse? Being so out of touch with the American public that you never bothered to learn to use email or having a running-mate who uses it recklessly?


From my perspective both are big negatives to me.

Bureaucratic incompetence or persecution?

I'm sure there are mid-wives and parteras both around who have lied about birthing paperwork at various times. Fine. Then investigate and review them. It doesn't make sense to effectively retroactively invalidate citizenship of folks born in the United States as this article indicates is going on.


For example, David Hernandez joined up, served in Germany, and now can't get a passport because a mid-wife filled out his birth certificate. That's an outrage.

US DHS Database Prowess

I feel safe now.


While a new wrinkle, the total bogosity of the terrorist watch list isn't news. There have been copious valid criticisms in the past.

Minimalist Traffic Control

Just get rid of everything.

Electoral College Guesses

No idea who's guesses are best but I find them all interesting.


http://www.electoral-vote.com/


AbuWiki


Rasmussen Reports


270towin.com

"Illtyperacy is the bastard incest child hiding in the [I.T.] industry's basement." - Steve Yegge

I took keyboarding in college because it seemed a logical skill for a programmer to have and I admired one of my instructors who typed like a whirlwind. Over the years my skill has increased. I type fast. So fast that I was recently jotting down a note while on the phone and the person on the other end accused me of just banging my hands against the keyboard. They actually thought I was play typing. Doing my day job right requires my thoughts and ideas go through a keyboard far more often than any other communication channel. So of course I'm going to master that skill.

Steve Yegge does a rant on how programmers should know how to type. Most folks may not realize it, but he's right. There are programmers out there who cannot touch type and they are almost always held back by this. (Note to rookies from a dot bomb guy who kept his job: Hunt and peck programmers are often laid off first when that reorg comes around.)

It seems to me this lesson is more broadly applicable. I am an expert at many parts of my computer job. It's my other job, voters willing, where I will continue to identify, improve and/or master the needed and useful skills for years to come. Whatever it takes to serve my district, this city, the larger community and the world. No illtyperacy allowed, especially in this endeavor.

Hypocrisy

Both parties position and posture themselves in to rhetorical corners. The Daily Show and Colbert Report are national treasures because they do a fantastic job pointing this phenomenon out.

Dissing Community Organizers

I guess that about covers it.

On Change

This video can't lay out the whole story in a few minutes but the broad strokes it does show tug at the heartstrings. The Smithsonian can't find 3M in it's budget to buy this guys 50M collection?! I wonder if he has some additional conditions that aren't mentioned... It would be a horrible historical loss to not losslessly digitize this stuff for future generations.