I wonder if they'll ever get it...

I know I've bitched before about the fact that free market capitalism works very well for every aspect of the economy except the money side (banks, brokerages, insurance...the entire financial sector), and on occasion I stumble across a similar sentiment, like that expressed by David Ignatius here.

There are many metaphors possible, but when it comes to the financial industry there are two real workable options, both regulatory in nature: make them smaller and competitive, or federalize the banking and probably insurance sides and let the rest fail on occasion as is their wont.

I'm pretty sure neither will be played out because it is in the financial interests of those in charge of this crap to do neither.

Must Make Bacon Explosion

Yea, the site is called "This is why you're fat"and it is full of pictures of supposedly disgustingly bad for you foods. The link I took to get there warned not to go if you had just or were about to eat. It made me hungry.

Yes, many of the items shown are heart-attack inducing globs of all things bad for you (like the bacon cheeseburger on a Krispy Kreme donut), and some are kind of disturbing and not very tempting (bacon cookies?), but many are acceptable as part of a meal, and some could even be healthy. Case in point: the Super Tuber, which is a hot dog in a baked potato, sliced up and covered in chili...except the pic shows that the chili is almost entirely beans, and even with the hot dog in there, if you prepare that at home, appearance aside, it could be a very healthy meal (if you could buy said from a vendor it likely has too much salt and sugar, but that's often true).

Mostly, however, they are just funny. A Tombstone pizza vending machine, a corndog pizza, and my favorite: the Bacon Explosion. I fully intend to make that one some day, if only so that I can do a basket weave of bacon.

While most of the items listed are very reflective of the title, the main reason why we are fat is not what we eat, but how much, and that is reflected in the most disgusting pics on the site. A slice of chocolate dipped cheesecake on a stick is fine is fine on occasion, four after a huge meal? Not so muich.

Michael Phelps Should Retract His Apology.

Seriously. He smoked pot; who cares? I can't believe this crap is news. Real problems abound (even absent the economy) and people actually care that some famous person took a bong hit? And for that matter, marijuana is still a schedule 1 narcotic?

This phrase is overused and generally toxic to productive dialog but...

Anyone who still believes that marijuana should be illegal is an idiot.

I like Krugman more each time I read him

Maybe it's because he agrees with me (or, as he is the Nobel laureate economist, I should say I agree with him, or most accurately that our opinions are in agreement as there is no one from another here).

This stimulus is tepid at best, and is as weak as it is because Obama (whom I voted for and support) decided that the fanciful notion of "bipartisanship" was more important than being effective and, as far as the American people are concerned based on how they voted, correct.

(And, yes, I know other economists have issues with Krugman, and I don't blame them, but he does do something I wish more academic/science types did: leave the academic side out of mass media public discourse. Incidentally I really don't think that either the free market people or Keynesians are correct, but that there is a happy middle ground between them.)

Problem:

This person. Yes, she is losing her house, and yes, the agreement she is offering the bank is probably a better deal for them than forcing her into foreclosure, but there is quite a bit of effort placed in getting an emotional reaction (sympathy for a hand-out) for what was a bad, bad, horrible, business decision on her part. The living near her daughter, and talk about "that's what houses cost" in the area, and how others did this, and probably worst of all that this "isn't about money. It's about closed off hearts," is utter crap, to put it nicely.

Now, I can appreciate people--the large majority of whom are not financially savvy--being convinced that it is a good idea to finance an $800k home with 10% down using an interest only ARM and a HELOC* to cover the difference by crooked banks, realtors and brokers. But someone who claims to be a capable businesswoman should know better. This was a gamble. She lost. Of course the banks did too, and it probably is in their best interest to take what she is offering, but with all of that emotional crap in her arguments, I really just think she is trying to game the system.

There are real victims of this economic downturn. She is not one of them.

*ARM = adjustible rate mortgage, HELOC = home equity line of credit

I'm soon to be a homeowner

So that's it. Not terribly large, but plenty of house for me (or really for a family of 4). There was about zero chance that I would get a price I wanted for anything but my lease is running out, rates are low (which makes prices higher) and the whole homebuyer credit thing, which is being sweetened by the stimulus package bouncing between houses of Congress. In the end I'm happy enough with the price to buy.

Like I've said before, I do not expect this place to jump by 20% in value in one year, or even five. I will build equity the old fashioned way: by paying down the principle on the mortgage. Crazy, I know. I'll also probably make a few changes/do some work on the place, though nothing big right away. I have to figure some things out and recover my losses from the sale first.

It's a good time to buy if you want to buy a house in large part because it's still a crappy time to buy if you are an investor. The credit thing possibly becoming permanent will sweeten the deal, but it will also inflate prices (much like low interest rates do). If the Senate version is the final one then it will really inflate prices--it's bigger and can be claimed by all (primary) home buyers, not just first timers. Fortunately it still shuts out investors (I think).

I will probably have more pics to put up, and changes that will happen and such as time goes by, but the blog title still applies (though my long absence seems to have lost what readers I had).

$10 for a meal is cheap???

So CNN has a crazy little thing on family meals for under $10.

I know, it is family meals, not for one, but still. The idea that a home cooked dinner for 4 that cost $10 is really cheap is a bit dicey. There are so many good, tasty, healthy meals that can qualify at that cost that it really isn't much of a hurdle to get over. In fact, go through and see that some include a glass of wine or shrimp and you know that they were far more concerned with a price that allowed luxury than they were with really keeping the cost down. Maybe that was the point but still...

Carrots (or bell pepper), celery, and onion are cheap and can serve as the foundation of a vast variety of meals: soups, stir fry, pasta dishes, salads. Carbs are almost always inexpensive too, and if you go with brown rice instead of white, sweet potatoes instead of regular, and other good grains like oats, bulgar (wheat), barley then you get good nutrition along with the calories. Protein is the pricey bit. Generally your options are legumes (beans, lentils--really cheap--peanuts less so) eggs, canned something (like tuna), or some deal on an already inexpensive cut of meat (pork shoulder, whole chicken/turkey), but on the other hand you don't need much protein in any given meal. One pound of meat is 4 servings worth. Cutting that meat into a soup with beans or lentils can make it go even further.

If you are looking for luxury in your meals you are not likely too concerned with cost because cheap meals can be very tasty without adding high cost ingredients.

We Have a Shiny New President

Horray!

Of course, the economy sucks, we are in two wars in a very unstable part of the world, the previous administrations torture of detainees could result in the freeing of more terrorists than any pinko-hugging, liberal hippie ever would, and energy is no where near being solved.

On a different note: Barak Obama does not really want to hear from you, or me, or any of the majority of Americans. There are just too damn many of us, and plenty of us are out of our friggin minds, so really, he doesn't. He wants ideas, and good ones too, though any of those will die in Congress because that's what DC does to good ideas. He will end up dismissing many good ideas as untenable or impractical, and some mediocre to bad ideas will get through for some b.s. reason or other (like "spirit of compromise").

I hope that his presidency will be a dramatic turn around from the past 8 years. I hope that good things come. It will have to be better, but in the end, I anticipate that things won't change as much as I want. But, hey, I'm just one person. Maybe my ideas and notions would not be better for this country. Doesn't change that I have them.

Open letter to sellers and (their) realtors,

I can no more predict the market and its fluctuations over the next few years than anyone else. That said there are things I know:

• The economy is not good now, and no one knows how long recovery will take.
• Home prices will not recover until after the economy does
• Low interest rates now depress future home values by making higher priced homes seem more affordable than they will be if/when interest rates rise.
• Prices now are still high when compared with historical price:rent and price:income ratios.
• Comparables that were sold between ~2006 and summer 2008 are invalid as those sales were in an overinflated/overleveraged market, they can be used only if the seller can acknowledge at least a 10% depreciation from that value and likely 20%+.
• No matter closing price, I cannot expect any house I purchase now to recover value beyond breaking even within 5 years, longer if the economy does not recover.
• I cannot expect any changes/improvements I make to the house to increase its value enough to cover the cost of said changes/improvements.

I want to no longer rent. I want a portion of my monthly payments to be “saved” in equity. I want to have a place where I can work on projects, renovate, garden. I want to be able to work on my car at my residence. I want a place to come home to that is mine. These are the reasons I am buying.

I could be very wrong…I hope I am, but I will not forfeit my future for a house that I expect to drop in value, and I will not increase what I will pay based on artificially low rates, further depressing the future value of the house. I cannot expect to live off my home if trouble strikes so I must have a greater cushion in my budget to weather whatever may come.

Sincerely,
Jacob Ketter

House Hunting

It's always funny to hear people ask "Is now a good time to buy?" because the answer always seems to be "Yes!" To a certain extent, provided that two specific conditions are met, it really is always a good time to buy. Those two conditions are important, however. The first is that you are going to live in/own the property for an extended period of time. Normally this is at least 5 years, right now it could well be longer.

The second condition is that the buyer must be able to afford the payments. Since this option pretty much eliminates ballooning rate type mortgages, it would have applied even during 2006-7...it's just that many of the people that bought then would have been precluded from buying because the exotic loans were necessary to produce an initially affordable rate.

I'm looking for a house. I've always wanted one, and now that I have a job that pays enough in a market that is getting back to sensible prices, I can afford one. I have known better than to get some bizarre financing option (and now, apparently, banks do too) but I am in a minority of Americans who are good at and enjoy mathematics. I also expected and am glad to have been correct, that prices were inflated beyond what real incomes could support.

At a median home income of $50k/yr (a bit high) after taxes is ~$36k/yr or around $3000/mo. Good banking practices use gross income to figure max payments and for the imaginary middle person here it would lead to <$2000/mo in total debt payment. That would include mortgage, car loan(s), student loan(s), credit card debt, and anything else. A minimum down (3.5%) FHA loan at a very good 5% interest, for a $300k house is $1550/mo without taxes and insurance, which could add between $100 and $700 /mo depending on location/risk/whatever. People were getting loans for more expensive houses on less income that were greater risks.

I like the idea of banks restricting the mortgaged amount to 3x annual income or less. If they were to impose that restriction, no matter what, then housing prices would be forced into a much better place. People would have to save (possibly by building equity in their current home) to front a larger down payment to buy a home that cost over that.

Of course banks aren't restricting like that, and between location and other factors I may have to go over. I'm still going to do my best to stay under 3x, but I've put a limit of 4x. In practice, the real limit comes in monthly payment amounts, which are tax and insurance dependent as well, and I've set a hard limit of 33% with a desire to have total payments be at or under 25% of gross.

We'll see.

Ode on the POTUS Departing

would that i could
forgive the conceit
that favors action with inadequate knowledge

but i can't
so i won't
i'll just lambaste the dope
who should have learned some while he was in college

Happy New Year

I am one of the ~60% of adult Americans who did not make a New Year's resolution. It isn't because I count on failing (as most do) or because I think they are wrong headed, but because I don't feel as though I need the motivation of a resolution to try and improve myself.

Like everyone else on the planet, I am a flawed human being. There are faults I know of and those I don't, those I want to improve and those I really don't see as worth fretting over. The category of faults that I know of and that I want to improve upon is the one that typical resolutions fall under. But resolutions are a temporary thing, and life is daily, weekly, yearly. Nothing that I would resolve to do for a new year is anything that I wouldn't (and don't) resolve to do every day: treat others with courtesy and respect, broaden my knowledge and understanding of the world and the people in it, be healthy with respect to what I eat and activities, and keep a positive outlook and have fun.

Those are things I try and do every year, every month, every week, every day. I don't always succeed. Sometimes I am exhausted physically and mentally and end up eating a bag of chips and half a pizza for dinner rather than cook. Sometimes I get angrily frustrated with our representative government and expend energy labeling the majority of the populous idiots. Sometimes I get despondent about relationships (or lack thereof) and question my choices in life.

Mostly, though, I do fine. I do what I should, and I have far less to complain about than a large number of people in this country and in the world at large.

The Financial Industry Sucks

Yea, I know, that is abundantly clear to everyone now. But it really isn't. Krugman has a little article that scratches the surface. It still doesn't go far enough. Capitalism has some serious upside for innovation, job creation (low unemployment), and development. The benefits of capitalism and the free market begin to disappear as companies get larger. Mega banks being able to spread across the whole of the financial industry and gobbling up smaller banks/investment banks/anything else that makes money producing nothing is a bad trend, and while that should be obvious now, that has been accelerated by this economic crisis rather than reversed.

Large companies can more easily exploit workers, squeeze out competition and engage in behavior that serves their and not their customers' needs. The horrible working conditions in factories around the turn of the (last) century, and the conditions in third world manufacturing plants today are among the results of this. In banking it is not as obvious because their "production" comes not from workers actually producing anything but from people--nominally customers--giving (lending) them money. Bank customers are the equivalent of the manufacturers in productive industries. In return the bank gives very modest service (you can withdraw some of it--though seldom all--you may receive a pittance in interest payments, etc.).

Banks have never been particularly noble institutions (and for you Christian types out there the Bible does not have nice things to say regarding their practices). Insurance companies are even worse. Investment banks, which are a strange hybrid of casino and banking, are right out. All of these institutions, however, have become necessary to our country and lifestyle. In the case of Insurance, their lobbying has been so effective that it is illegal to drive without contributing to the profit of a private industry.

I have a similar knee-jerk reaction against the notion of government getting bigger and providing more services as many others have, but if the government is going to mandate that we have insurance, then they should also mandate, or charter, a not for profit institution that provides such. In banking we actually do have those--credit unions, which are wonderful things that more people should use--but they are being drowned out of the market by the mega banks. Investment banking will never have such due to their nature, but should also never be even remotely considered for a bailout.

The financial industry provides the grease for the wheels of capitalism, and so it cannot be allowed to fail. There are only two ways to ensure that happens: government control, or government breakup. As it is, we have privatized profit while placing the burden from loss on the taxpayers, if we don't reap the rewards, we cannot afford to foot the bill for the losses.

Voting and Intellectualism

First, for all the talk of intellectualism that exists on the left, most people clearly do not know what it is. Barack Obama is thoughtful, intelligent, capable, educated, open mined, but NOT, in the purest sense, an intellectual. He is concerned with getting elected, and affecting change. Neither of those are intellectual pursuits, and in fact both--particularly the former--are more often counter-intellectual.

Many people in the progressive movement believe that there is a logical/rational "correct" side on many given issues and that they occupy it, as is evidenced by the abundance of highly educated and intellectual types on their side.

There isn't. There is no such thing as a purely rational/logical position. None. There is always an emotional underpinning.

It is overly simple, but the emotional underpinnings for the generic left and right in this country can be boiled down to: "People have inherent dignity and worth which supersedes their actions," and "People have no value that their actions do not make real," respectively.

If you think that people have great inherent worth, then you probably vote Democrat. If you believe that people make their own worth you likely vote Republican. If you believe that life is more complicated than that, you probably vote for the most competent candidate, you are also in a tiny minority and likely very frustrated by both sides. If you don't even begin to concern yourself with such thoughts then you are one of the group of idiots who are actually swayed by campaign advertisements.

Policy and Practice

I gave up on Republicans a while ago. Simply because of their policies. But Republicans do not apologize for who they are, what they want/believe in, and they are willing to go to the mattresses to accomplish their stated goals. Regardless of policy/platform/issues, every political party should behave like this. There are different points of view in this country. All of those views are, to the extent possible, represented by two political parties. If one of those parties fights tooth and nail for its issues and the other acquiesces and tries to play nice and get along with everyone, only one party's set of views gets well represented.

My real dislike of Democrats in Washington is not with policy but practice, their unique ability to cave to any Republican pressure, despite overwhelming public opinion against Republicans, is laughable, lamentable, and downright depressing. I voted for Obama, but he gets very little slack from me. If he doesn't get this country out of the rabbit hole--and fast--I'll be ready for some new leadership. I won't vote Republican because their views are just too often wrong, but if voting for Democrats doesn't actually mean anything, then I will "throw my vote away" on third party candidates and write-ins in future elections.

(I'm glad I'm not the only one who feels this way. From kos at Daily Kos:

1. Republicans ask for the absurd, threaten nuclear/economic armageddon if there's no action.

2. Democrats cower in fear.

3. We try to talk some sense into them.

4. We get scolded for being unserious, and wanting the terrorists to win/people to lose their jobs.

5. Democrats promise oversight!

6. We roll our eyes.

7. Democrats cave on every single point, but pretend to win anyway.

8. We wonder what we ever did to deserve this sorry bunch of representatives.

9. Republicans do whatever the hell they want.

10. Democrats pretend that no one could've ever predicted Republican outrages and express "outrage". Sometimes, they even write a sternly worded letter!

11. We make "no one could have foreseen" jokes and wonder what we ever did to deserve this sorry bunch of representatives.

12. Rinse, lather, repeat.

...

Both parties suck, but one does it with their stated ideology and the other does it by being too damn weak to stand up.

Deserve's got nothing to do with it

I love the questions and polling about whether this group or that "deserves" a bailout. The answer is so simple: Not a single one of 'em does. None. Of course that hasn't a damn thing to do with whether it is necessary or not. It is. For reasons which should be abundantly clear to anyone paying attention. That doesn't make it good, or right or fair or any of a number of other adjectives you can throw at it. More job losses in a recession won't make things better. More financial meltdowns and mergers won't make banking safer. More foreclosures won't make markets adjust in a sane way (though, this one really makes me less than happy).

I too have entertained fantasies about the end of the world as we know it, and doing nothing would lead to at least one of those (the "as we know it" is very important there). I'm fairly sure I would be fine, but I know how to create fire and won't die if I have to go through winter without power. Seriously, though, it is not fair or justified, but necessary. For my Christmas list, let's forget the not gonna happen "peace on earth" and "goodwill toward all" (or men, if you aren't crazy PC).

Dear Santa,

I would like to limit total compensation for execs on bailout money receiving groups to <$100k...not gonna happen.

I would like for financial institutions to be broken up into smaller entities to produce better competition and an eye toward sanity...not gonna happen.

I would like for the big 3 bailout to be accompanied by the government telling them that 27 mpg is a required minimum for any vehicle produced, and that the fleet average must be >40 mpg...not gonna happen.

I would like for people who got mortgages they can afford to have their student loan debt forgiven (as education apparently worked for them, and this does not include me, as I couldn't afford to buy w/o some dumb ass exotic mortgage)...not gonna happen.

I would like for insurance companies (AIG) that receive bailout aid to be restructured as non-profit entities...not gonna happen.

I would like for the execs at companies that lead us down this road to be imprisoned--starting with our very own (thankfully for not much longer) POTUS, his veep, and all their cronies...not gonna happen.

Goodwill toward others is a whole lot easier when "others" doesn't include "them."

The reason I'm voting for Democrats...

Go here and read.

The reason is that pretty much every Republican advocated policy is stupid, even when they have good intentions. The latest is the whole "drill, drill, drill" meme that is being pushed as a real solution to gasoline prices.

I'll admit I'm a bit up in the air about the price of gas: Does the good that high prices do offset the hurt that it causes lower income families? I really don't know the answer, but I do know that the Republican solution will do no good to anyone but oil companies, yet people--in large numbers--are falling for it...again.

Scott Adams on Economists

The gist of the article (linked below) is that Scott Adams wants to keep his money, and so will present the data he himself collected in such a manner as to justify his greed...

I like Scott Adams. I usually find Dilbert funny and his books are an amusing read. CNN posted an article he wrote about a poll he funded asking economists about the presidential nominees. It is not funny, it is a little sad.

Now he is honest enough to admit that he is a greedy wealthy person. One of the tiny percentage of this country that will actually be taxed more by Obama (while most of us get bigger tax breaks). His rationale is the same as most greedy people: the dirty government will mismanage/waste it, and (not explicitly stated) he earned it.

Taking issue with the second point first... Wealthy people earn more than poor, not because they are harder working or more deserving, or even more capable/smarter. They earn vast quantities of money because of luck. It happens that their talents had the good fortune to be developed, discovered and are more in demand. But they do have a tendency to think it is because of some sense of deserving. Hard work, ability, can get you a decent living, depending on location and your specific line of work that may mean $50k/yr, or $150k/yr, but that's about it. People making several hundred thousand to millions a year are not more deserving, just more fortunate. Of course they also have the most to spare for funding campaigns, so guess what often happens...

As far as his first point: government does have waste, but also funds the military, education, research, infrastructure, law enforcement... Waste other than military gets lots of attention but it is a tiny portion of the US budget. Cutting taxes to rich people doesn't mean less waste it means less for good programs. Of course, they can afford to send their children to school w/o government support and get health care without government support, and can even hire bodyguards, so have less need for police, so why should they give a damn? About the only thing they can't do is hire an army, so it's always okay to fund the bejeezus out of that cash cow.

The biggest problem though, is that, because of his belief, he does his damnedest to talk up the partisan nature of the economists. So I wonder: are economists views based on politics or are their political views based on economics? I would guess the latter in which case, the partisan divide is not only moot, it's idiotic. Scott Adams is a smart guy, and a funny fellow, but he wants his money so badly that he is pushing hard against the rather overwhelming opinion supported by the economists he paid to have polled:

Obama is better for the Economy of this nation.

Whither blows the GOP?

she is woman, hear her roar,
he is POW, hear them snore.
to think that those who’d run our land
would deign to look down on us, to stand
there lying bald-faced, with little recompense.
is everything republican, now lacking common sense?

Yea, I'm not sure republicans ever did what they said. I liked some of the libertarian ideas they espouse, but they never follow through. At least they used to just bend and stretch the truth rather than outright lie. I don't like the whole of the Democrat platform, but I like enough of it, and I certainly trust them tons more.

I am such a science geek

I was deliberately arranging apples in an HCP array, not for fun, but because I wanted to fit as many in the box as possible and they were too big for me to use a cubic packing and get three wide. Moreover, I realized that some of the apples were larger than others, and I thought that, if the size difference were great enough, and I had the proper ratio that maybe a BCC would work out better. Of course this lead to a web search on close packing while eating one of the apples. Suffice to say that either HCP or FCC (or CCP) would pack the best, but since I only have enough apples for 1 layer plus a bit, there is no way to distinguish the two.

I think I need more apples.