Archive for February, 2008

It all comes down to the money

The dollar is falling, the dollar is falling, scream the headlines even as millions of Americans continue to park their cash.  1.3 trillion dollars were sitting in American savings accounts, CD and Money Markets according to an industry chart shown last week on Jon Taplin’s blog.  Yesterday, the fed continued the fall when Chairman Ben Bernanke described the economy as a no growth, financially frozen, and inflation-risen wasteland.  Wow! talk about your politics of hope.  Gold prices, silver, and platinum have doubled, and no one knows for sure what’s under the mattress or in the coffee can in the cupboard.

Looking for the cause of this wonderful circumstance?  Take a look, Pogo.  We are the ones who applauded as the real estate market provided us with a seemingly endless supply of equity to use on new cars, vacations, and just about any exported items our heart desired.  We are the ones who made millionaires out of the authors who tempted us to seminars where we all learned how to be the next millionaire.  We are the ones who voted in the politicians who took us to war.  We are the ones who suddenly are flocking to the polls to elect someone we hope can bring our country back under control.

Well, as any surfer can tell you, sometimes it takes a long time for a wave to form but this one looks like the ninth wave to me.  Around our house we have had long discussion as to what is really happening.  One thing that stands out to us is the cognitive dissonance caused by reading/watching the news and then looking out the window at a world that seems remarkably untouched.  The streets are still clogged with traffic, the parking lots in front of Target, Office Depot, and Linen and Things are jammed, and the price of real estate, though dropping, is still way beyond the reach of us ordinary two salary per household folk. 

The conservative folk in our midst will tell you that this is all nay-saying from the defeatist liberal left.  We are just fine, the surge is working, the jobless rate is, well who worries about those folks, right?  But if that is so true, why are they all taking their tax cut dollars and putting them into savings?  Aren’t we supposed to see those dollars reappearing in the economy as retooled industry, and more and better paying jobs for Americans?  We know the corporate heads are falling but they all seem to be landing softly on pillows of buy out cash and stock options.  Do I have to be liberal and left to notice this?  And then there’s the war, where Senator McCain claims we will be fighting Al Qaeda for the rest of this century.  Again, some of those left leaning anti-American liberals (boy that is some oxymoron) are calling it the $3 Trillion Dollar war but what do they know, right?  It’s money well spent if it will secure our country and lock in our oil.  The thing is, as Senator Obama points out, there was no Al Qaeda in Iraq before we went to war there and quite rightly I think there won’t be any Al Qaeda there once we end this war and bring our troops home.   But that hope – bringing our troops home, ending the war, forcing the Arab states to solve the problem of Al Qaeda – doesn’t really fit with the plans of corporate conservative Blackwater Haliburton does it?  After all, where’s the money in that?

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Why should I turn off my TV more?

The recent writer’s strike had major side effect at my house.   We have two TV sets, one in the living room and one in our bedroom.  Until recently, both sets were connected to VCR/DVD players so we could watch TV and tape shows.  But just before the strike started the living room player went on the fritz.  No problem, I thought.  But when I went shopping for a replacement, I found that my choices had been limited by the changing nature of the recorder business. 

Not only is new technology replacing the old,but competing technologies were making it hard to decide which way to go with a new setup.  This was before Walmart’s Blu-ray deal. I was looking for something sensibly priced so the one I picked was inexspensive and capable of recording and playing but when I got it home I discovered that it didn’t have the required coaxial cable connection.  Luckily for me this turned out to be one of the situations where stopping and thinking let me realize that maybe I didn’t need to buy. 

So I took it back and got my refund. 

 And then the writer’s strike hit and the networks began running out of shows and then substituting reality junk shows and reruns and we discovered that we didn’t miss the taping and watching that much.  We both read a lot anyway.  Now we began to take longer walks and plan things that didn’t have us running back to the house in order to catch a show.  Or worse, planning our love life around which show we just had to watch first.

 I know, even saying that makes me realize that here we were two adults and we were scheduling our lives around some TV show.  What’s more what I found myself looking at the shows differently.  When a show wasn’t available, I found myself wondering about what I actually missed about the thing.  Was it really valuable to me to find out how the writers had twisted the plot on Heroes?  Was I adding anything to my knowledge of how the world works by watching the series of innuendos that form the basis of Desperate Housewives?  Sure I like the humor of House and the sexy interplay between the cast on Bones.  But did I need them when I could find a 1000 books that would do the same thing for me and more. 

While I was pondering this, I also began to recognize that the cable networks actually made TV watching a lot more sensible by making their shows available on a replay schedule.  The networks just started trying this out over the last couple of years in response to their continued loss of viewers.  The networks are stubborn though.  They still cram in the commercials, and act like children by scheduling their show to overlap the hourly break in hopes of keeping us from switching to another channel.  What?  Do they think we don’t notice or care?

Of course, the one thing we did keep watching is something we both love.  Professional basketball, Go Lakers and Clippers.  But spending more time on our computers these days and not having to worry about the TV is actually quite a great relief.  Now when we do watch, we can be surprised and entertained because we’ve been on vacation and frankly, it feels damn good.



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Mortgage relief for the military

Yesterday, I posted about a story in the LA Times revealing the details of the 2003 Service-members Civil Relief Act.  A law that allows military service personnel to claim relief from high interest rates on mortgages, credit cards, car loans, and more. It prohibits foreclosures, caps the rates at 6%, and its affect lasts until three months after the tour of active duty.  I thought that the story was quite newsworthy and posted it as soon as I could.

But since then I have been thinking more and more about the circumstances.  First of all, in these sub-prime and real estate market crashed days, this seems to me to be front page news.  Yet it was on page 3 of the real estate section.  Second, as the war in Iraq becomes more and more political, with the troop forces there and in Afghanistan reaching their tour ends again, this item seems to be just in time to help with the reenlistment problems the military is having.  And third, if the mechanism for enforcing this statute is already in place, then why is congress having so much trouble enacting a similar law to govern the rest of our citizens?  Not that I think it should.  I’m just wondering?

If congress is going to really deal with this crisis, then its inquiry should focus on the bloated house sizes, unrealistic price structures, the sales practices, and the lobbying effect of the real estate and banking industry that led to this situation in the first place.  If the congress wants to provide relief for borrowers in trouble then it should be concerning itself with a second tier lending program that allows a borrower to refinance into a fixed rate that is negotiated between the current lender and the borrower.

Meanwhile, back to the top.  Do you suppose the military actually knows about this program of assistance?  If so, why are so many military families I know in such dire financial straits

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News flash!

For those of you who don’t get the LA Times on Sunday or don’t read the news papers or don’t check the business section of the Internet provider you use then this should come as NEWS!!!

Mortgage Relief for MILITARY service members

According to the story, the 2003 Service-Members Civil Relief Act allows reserve and National Guard members and other military personnel whose mortgage obligations pre-date their active duty to cap their rates at 6% while they are on active duty.  Other benefits of the act include a prohibition on lenders foreclosing on the homes of affected military personnel during, and for three months after, their tours of active duty.

This act actually limits the amount of interest that may be collected on all debts – not just mortgages – to 6% per year during the period of military service.  This includes ARMS and credit cards, car loans, and other debts. 

For more information on the relief act programs call (888) 446-6434 (option 4)

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Should I just go ahead and give up on newspapers?

Now on the surface this seems like something that is inevitable.  As the world turns to the Internet, my home page flashes the headlines, offers news article, DIY articles, gossip columns, and sports.  It offers, via links, a cross reference of reports from all the sources that are covering any event.  I can get the comics.  I can search for information and definition.  I can research back to previous news.  In some cases I can even comment on the story and thus become a part of the story,  shades of Farenheit 451 or Farenheit 451.

But there are several things about this arrangement that are worrisome.  First, in order for this system to work I always have to bring my computer to breakfast.  So even if it’s the new  Apple Macbook Air, that’s a pretty bulky appurtenance to add to my table setting.  I know, I know, you’re saying to yourself “Why doesn’t he just use his Blackberry?”  Probably, I answer, “Because I don’t own one.”  See there’s the news right there.  Some of us are still in a sort of faux-neo-luddite phase of our lives.  We use computers but long for more simple days when everything didn’t have to move with the speed of light.

Which brings me to the way I actually read a newspaper.  From front to back, unless I am looking for something specific.  I  take each section, usually starting with the Sports section, followed by the Front Page section, then the Entertainment section.  Unless it’s Sunday, I usually skip the rest since I am not overly interested in cramming my already dazed and confused brain pan with anymore trivia than it already contends with.  By front to back I mean I read each item on the first page of the section and then as I work my way south, I read each successive continuation of the article as I come to it.  I like doing this because it is a great way to keep my reading and memory skills sharp.  I, also, like to take my time with a newspaper.  Sometimes I take several days to complete the task or in this case, it’s more like to savor the reading.  I, also, like to clip articles and sort them into folders for later reference.  Of course, my computer lets me bookmark these days, and I like the service, so I don’t clip as much as I used to.

So what was the question?  Should I give up on the folded page, the sometimes illegible printed word, the feel of the thing that reminds me of the first time my Dad sat me down and read me something.  Well, when I put it that way, I guess not.

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What is my most effective way of making decisions?

I go with the feel.  That is, if I am feeling anything.  Sometimes it is like trying to find your rhythm, you know that sense that all your moves are in sync.  But one thing I know is that when I try to make a decision on a conscious level then there are no guarantees that it will work out the way it’s supposed to.

But I do have some techniques I use for getting into the decision making zone.  One thing I like to do is to list my options.  I like lists anyway because they are such a random way of getting things to start to make sense.

Today’s list:

Make out a list of things I need to finish 

Read the sport’s section 

Make coffee 

Workout at Y

Watch Bill Maher rerun

Set up the corporation tasks for the fair

Finish off the left over filing

Enter new receipts in QB


Now comes the fun, prioritizing.  I have a natural tendency, doesn’t everyone, to procrastinate so looking at the list for urgent items forces me to face myself.  I like to read too much, I like to take advantage of the sunny days to ride my bike and hit the beach.  Oh yeah, I just remembered an important element of listing.  For my list to work, I have to include the starting date.  Today is 02/24/2008.

Now some people might rewrite their list in order to prioritize but frankly I still like the random too much to let that element go.  As I said earlier, I go with the feel.  And one of the things I like feeling about a random list is that there is no boss telling me what I have to work on first.  Just me and my feeling for what I want to do.  Of course, as you should be able to tell some things are easier to check off than others.

Another thing about lists is that once I have made one I can let it sit, say while I finish my coffee and the sports page, then go back to it and add the things my mind has thought up in the interim. 

Check my email

Read the blogs where I have an ongoing interest

Write my post for the day

Pick tomorrow’s writing idea

Write my email replies

Think – Is there anything else?

Yes, actually, I have a decision I need to make.  Three days ago, I received an offer from a site to run an ad for their services, on this blog.  The offer was couched in very flexible terms.

Most of our customers are making ends meet on a small budget and require short-term loans and may not even qualify for more traditional loans. I appreciate that your stance on our industry may be negative, but assure you that we are not out to editorialize or sway you in any way. To be frank, even a post about reasons to avoid payday loans would probably prove beneficial, while of course not vilifying our company in any way.

I am ultimately interested in getting an article/paid post up that links to our site. I’d be happy to provide a post/article (with your approval, of course) that links to our site or you are welcome to write your own.

If you feel that a paid post/article is not for you, I’d be happy to discuss the possibility of just a text link or blurb.

I am open to discussing cost at any point.

I’d love for this to be as mutually beneficial as possible, so if you have any other ideas that would work for both of us, please feel free to mention them.

The site itself carries on with the same reasonable tone you see in the quote above but still it is a site that ultimately needs to be looked at with extreme caution.  If you are already in financial straits then think of this as taking a ride down the rapids.  However, with that said, the site sticks to its guns.  It offers relief but it tells you up front what the costs will be.  $25 per $100 borrowed up to a max of $600.  And then if offers this is one feature I really think sets it apart.  It takes the opportunity of your visit to teach you how, through a series of short but sensible articles, to take control of your finances through budgeting strategies, credit card payoff snowballs, and financial education about other borrowing plans that might be available.

So here’s the deal.  How do I want to handle this.  Getting a loan against your paycheck is a desperation move especially if the amount you need is so large that you clearly won’t be able to repay it in time.  Then you are looking at a vig that compounds exponentially.  It seems to be a sure road to bankruptcy.  Do I want to place this opportunity on my blog as an ad?  Do I want to just leave it with this post as a story readers may peruse and then choose for themselves?  Right now my feeling is to go with the post and contact Travis at Payday about some of the options he listed above.

One last thing – another aspect of my listing decision making technique is that sometimes, just like in this post, the thing I really need to work out isn’t on the list, it’s in my head getting ready to be decided.

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What do I think the war in Iraq is really about?

It’s about:    Old men letting boys and girls do the fighting while America is on its way to the mall.  Control of the oil that powers our days and lights our nights, that fuels our consumerism past satiety.  Proving once again that our way is the best way if “they” would just see the truth in our words not our behavior. 

It’s about:  The oligarchy putting more money in its pocket.  The munitions makers continuing their relentless march to making the world need more and more weapons.  Fear in the populace that doesn’t want its  life “style” disturbed by something unless its shown on TV.  The need in our President to one up his Dad, to outdo his bro, and to out smart his friend, Bin Laden.  The use of fear as a political bludgeon to control the voter, to manipulate the outcome, and to keep the Repugnants and Democants in perpetual power.

 It’s about:  The real inequity that the government of Iraq, under Hussein, visited on its people.  The wonderful belief that a democratic government is a fair and balanced entity.   The powerful belief in the saving grace of Christianity.  The real doubt that people felt when confronted with the reality of the Twin Towers. 

It’s about:  The denial that all of us seemed to be gripped by.  The willingness to blame someone else for our problems.  The selfishness that keeps us consuming while a large portion of humanity goes hungry.

And it’s about this election and what our choice for President will say about our future.

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Does cooking at home mean that I have to cook?

Strange that you should ask that since just yesterday after my workout at the Y, I was dealing with that question in my usual way.  I was hungry for bacon and eggs and home fries with sourdough toast.  And in the short time it takes to ride to the corner where I turn left to head home or right to go down into town, I must have had a thousand thoughts about what to do about this bit of irrationality.  If I went home I could have the eggs and potatoes sans the grease of the bacon because at home I don’t cook meat anymore.  It takes about 10 minutes to boil several of the small red irish potatoes I like.  I could shower while they cook.  Then I could scramble the eggs whites in skim milk, dice up a mushroom, slice the potatoes and finish it all off together in one frying pan.  If I wanted bread, I could toast up a slice of whole wheat and I’d be set.

On the other hand, down town I get to sit at the counter and watch while one of several really good cooks fried up my eggs and grilled my potatoes with green peppers and onions.  I get some of the local news from either B or his wife, C.  Or maybe hear about what I’d missed on the surf line this morning ‘cuz I’d chose the Y instead of the sea.  And the bacon they serve is the best, fried just crisp, and lean yet thick enough to chew.  Man oh man, what a choice.

So left and up the hill to the crest, I get to cook and I’d probably get on the computer.  Right and I’m with friends I’ve known for 20 years and someone else is serving up the cholesterol.  Damn. 

What decides this twin horned dilemma is the sight of the ocean stretching blue to the horizon.  I can hardly ever resist its pull and I know if I go that way I can hit the beach for a walk and talk with the waves after I eat.  So right it is but even as I pump my pedals my mind is already thinking that my body still doesn’t need the calories so I end up across the street from my original destination at another counter where one of the specialties is Irish Oatmeal with raisins and brown sugar and milk.  Which I order and then proceed to eat while watching some old guy in denial douse his sausage and eggs with enough salt to cure a hide.

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How much help should I actually give to people in my family?

When I was seventeen, I moved out of my parent’s home and into a small apartment hotel.  I put myself through college with scholarships and loans and a lot of part time jobs. When my first son was 18, I arranged for him to move out and start his life in Santa Barbara.  In fact, all four of my kids have followed this independent path to where ever they are today.  That being said, this post is not about them or me directly.  It is about my partner and wife, T, and her plan to help her consistently unwealthy sister find the path to making money and therefore (T hopes) happiness.

Here’s the plan:  T is a successful investor.  She has rental properties that cash flow and a stock investment strategy that earned her 9.9% on her money in 2007.  She has gotten to this stage in her life by learning as she earns.  She puts in the work to understand each business she is a part of.  Speaking of which, we, also, own a very successful small corporation that has increased its income each year since 2002 by 30%.  Still, family is family to her  and so against all the advice that’s out there right now she has decided to help her sister by buying a rental property that they then intend to flip.  No matter that the real price of resaleable real estate property is falling at a continuous rate of about 2% a month.  No matter that remodelling costs are going up at about twice that rate.  No matter that it is going to be T’s money for the down, her FICO for the loan, and her credit rating on the line if the project goes under.  No matter because, after all, family comes first.  No matter that I can see this for what it is, a way for T to somehow earn the respect that she feels she doesn’t get from the sister, and the family.

But now that I’ve said all that I have to face the fact that now T is my family and no matter what if this is what she wants then I have to do whatever it takes to make sure she succeeds.   Does that answer the question?

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Does my bank make me happy?

Right off the top I’d have to say no.  I just got finished changing banks this last month so that should give you a clue.  Changed from B of A to my local credit union and changed my savings account to an ING.  The thing is I never did like all the rules that bankers throw out to explain that they have all the power.  You know like charging you a monthly fee to store your money for you while they collect the interest and use it for their own purposes.  And then the way they act like they couldn’t wait for the DEA and then the Home Land Security people to come in and give them the right to invade your private information.  It reminded me of the way schools work their disciplinary policies.  5% of the population are law breakers but the other 95% are punished anyway.  Checked at the gate like a criminal, the ordinary student is being prepared for the greater world outside.  The place where fear is KING.  So no, I can say I definitely that happiness and bank are not together in my vocabulary. 

On the other hand, I still find my bank useful.  After all, now that I’ve learned through my readings of the personal finance blogs about how banks work and where the best place to put my money to work for me is, I can say I am pleased about that.  And if you take a look at the link above, I guess you’d have to agree that I’m not the only one.

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