Dan Melson: January 2007 Archives
NATO, U.S. neglect "psychological warfare": report
"Insurgents and jihadists have proved adept at conducting successful information campaigns that reach a global audience and foment violence elsewhere," the International Institute for Strategic Studies (IISS) said.
"But Western militaries have shown insufficient capability in their own attempts to carry out information and psychological operations, its annual report, "The Military Balance," said.
Ya think?
Of course, it doesn't help that most of our mass media are actively rooting for the US to lose.
I won't hide that I am have never been a big fan of Hillary. But it just became even less likely that I will vote for her next year: Hillary Clinton and the Politics of Resenting History
I haven't heard George Bush say one word about having to clean up the mess Mr. Clinton left. If Hillary seriously thinks it's beneath her dignity, or just not part of the job description if she happens to the the next president, to be continuing the job that she has aided in boosting the size and complexity of, she shouldn't run.
Michael Barone on the political situation in the Middle East - and how the Bush Administration policies have improved it.
Captain's Quarters on the Executive Order requiring oversight of agency rule making.
A while ago I did an article entitled Debt Consolidation Refinance - Pros and Cons. It's a good article, if I do say so myself. Nonetheless, I think there's more to say on the subject, not just from a point of view of cranking some numbers, but on a meta level as well.
The most concrete lure of debt consolidation refinance is cash flow. Specifically, lower payments. The trap is that you are spreading principal payments over a much longer time. You refinance your home to pay off your car loan. Instead of paying the car off over three or five years, now you're paying it off over thirty. Instead of having it paid off when you go to buy another car, you still owe most of what you borrowed, and unless you saved the cash in the meantime, now you're layering more debt on top of what you already owe. So instead of having a paid off $25,000 automobile that's still worth $10,000 and no debt, you now have the forgoing plus $20,000 of debt that you still owe, and you are still paying interest on, on a car that you aren't going to get any more use out of. The fact that the security is your home rather than the vehicle changes nothing except the exact terms of the loan. You added $25,000 to your balance and $20,000 of it is still there, you're still making payments on it, and you are still paying interest on it.
Low payment is one of the best ways to sucker people into doing stupid things that I know of. Maybe that explains why I'm not rich; I want to figure out whether I'm actually helping the situation, and by the time I've worked it through, the folks are off calling the guy who's selling them the Option ARM who doesn't mention downsides or what is really important. As far as I can tell, low payment is the entire advantage of renting, for crying out loud. People think in terms of cash flow while flushing their financial future down the toilet in the name of lower payments.
There is a reason why that Statement of Cash Flow is the least important of the financial statements corporations are required to file, and Wall Street only discusses cash flow when there's something wrong. Unless they've got a large proportion of clients that don't pay their bills, the Income Statement is a lot more important. Corporations don't think of their facilities only in terms of the payments on their loans. Neither should you.
When you pay off a loan, of whatever nature, you are essentially transferring money from one pocket to another. Furthermore, once you have paid it off, you are no longer paying interest - the real cost of the money - on the balance. It's only the interest charge that you are really paying and that is costing you money. Paying off principal is paying yourself. Stretching the loan term from three years to thirty does not alter the amount of principal you pay, but it does greatly increase the amount of interest you pay. Even if you cut the interest rate from 10% to 6% and get a tax deduction to boot. Paying attention to payments is for suckers. You have to be able to make your payment, as I've said before, but so long as the payment is one you can make, concentrate on the real cost of the money - interest rate - and the cost of the loan, or how much you have to spend in order to get the loan funded. Weigh this against the benefits and how long those benefits last.
If all you are paying attention to is cash flow, and you consolidate your debt because it lowers your payment so that you can spend more money, don't be surprised if you find yourself in the same situation a little while down the line. This is a real world illustration of the law of diminishing returns. Each time you do it, you dig yourself in deeper, and there is less additional spending needed to get you to the point where you have to consolidate again. You consolidate your $1500 house payment and $40,000 in debt, and your new payment is $1800. Then you consolidate that and $30,000 in debt, and your new payment is $2100. Then you consolidate that and $20,000, and your new payment is $2400. What do you do when you can't consolidate any more, and you can't afford the payments, either?
If, on the other hand, you consolidate because it lowers your cost of interest and gets you a tax break and you still keep making the same payments as before, then you're miles ahead. If you're using debt consolidation to lower your payment, you are doing it wrong. If your choices are bankruptcy or debt consolidation, well, if you've got a nice stable home loan that you're not going to need to refinance for a couple of years, I might actually consider bankruptcy, particularly if I only need to shed one or two lines of credit. Obviously, talk to bankruptcy attorney first, but once you've rolled it into your home loan, those higher costs are a part of your life for as long as you own the property and haven't paid the loan off. If you can't afford them and you're a serial consolidator, eventually you're going to get to point where you lose the property.
If you consolidate in order to cut your interest costs, and you don't roll excessive loan fees in to your balance, and you keep making the same payment as before and don't take on any more debt until the balance on your home loan is at least as low as it was before you consolidated, then you come out ahead. Way ahead. You're a little bit ahead due to the lowered costs of interest, and you're a little bit further ahead due to the tax break from interest on home loans, and after you get to the point where you were before, every payment you make without adding new debt pays off much more of your balance. In my original Debt Consolidation Refinance article, I used the example of rolling $75,000 debt into a preexisting $300,000 mortgage. It raised the minimum payment by about $400 and cut the overall minimum payment by $1100. If that minimum payment is the reason you did it, you just hosed yourself. But if you cut your overall cost of interest, and kept making the same payments, you've accelerated your payoff schedule. Make the same payments as before, and you're even in less time than it would have taken to pay the consumer credit down. Keep making those same payments after you've brought yourself even, and it can pay the entire debt load off in half the time or less that your home loan would have taken. Even if you don't make it all the way to zero before you need another car, debt consolidation can set you years ahead in just a few short months - but only after you've paid your balance down to where it was before.
In short, debt consolidation refinance is not some magic wand to get out of debt free. There are pitfalls into which the overwhelming majority of people fall, because they do it for the wrong reasons, and afterwards, they keep doing it again and again until some disaster happens and they lose the property. However, correctly handled, it can significantly enhance your financial situation.
Caveat Emptor
UPDATED here
A co-worker sent me this.
It's that time of year to take our annual mental acuity test. Exercise of the brain is as important as exercise of the muscles. As we grow older, it's important to keep mentally alert. If you don't use it, you lose it! Below is a very private way to gauge your loss or non-loss of intelligence. Take the test presented here to determine if you're losing it or not. The spaces below are so you don't see the answers until you've made your answer. OK, relax, clear your mind and begin.
1. What do you put in a toaster?
2. Say "silk" five times. Now spell "silk." What do cows drink?
3. If a red house is made from red bricks and a blue house is made from blue bricks and a pink house is made from pink bricks and a black house is made from black bricks, what is a green house made from?
4. It's twenty years ago, and a plane is flying at 20,000 feet over Germany (If you will recall, Germany at the time was politically divided into West Germany and East Germany.) Anyway, during the flight, TWO engines fail. The pilot, realizing that the last remaining engine is also failing, decides on a crash landing procedure. Unfortunately the engine fails before he can do so and the plane fatally crashes smack in the middle of "no man's land" between East Germany and West Germany. Where would you bury the survivors? East Germany, West Germany, or no man's land"?
5. Without using a calculator - You are driving a bus from London to Milford Haven in Wales. In London, 17 people get on the bus; In Reading, six people get off the bus and nine people get on. In Swindon, two people get off and four get on In Cardiff , 11 people get off and 16 people get on. In Swansea, three people get off and five people get on In Carmathen, six people get off and three get on. You then arrive at Milford Haven. What! was the name of the bus driver ?
How did you score?
0: Al Sharpton, Jerry Falwell
1: Nancy Pelosi, Dennis Hastert
2: Barbara Boxer, Pat Robertson
3: Marginally functional, but don't drive in freeway or rush hour traffic
4: Probationary adult. Don't let it go to your head.
5. Congratulations, you're good to go for another year.
Now pass this along to all your friends and pray they do better than you.
PS: 95% of people fail most of the questions!!
A few days ago, another agent in my office got an offer and brought it to me for feedback. The listing was range priced over a $30k range, and priced correctly, so there was a lot of activity on it. The offer was for $30k beneath the bottom of the range, with a note saying that this was for a single dad with three kids, and that was all they could afford, but they really loved the property, and were so excited that that they were each going to get their own room, and so on, gushing for several paragraphs.
In logic circles, this is called the appeal to pity. "Please take pity on me." However, we had every reason to believe that we would be seeing better offers on the property very soon - it hadn't even hit its first weekend on the market, and there had been roughly 15 viewings and six phone calls from agents whose clients had seen the property.
I advised them to counter hard at the high end of the range pricing. It's no concern of current owners what that buyer can and cannot afford. The first two things that ran through my mind were the large amount of activity at an early date, and the likelihood that this was a low-ball flipper's offer. It's not like there's any criminal penalties for creative fiction accompanying an offer. The next two thoughts were if they like the property that much, come talk to me about ways to stretch what you can afford. Two ideas: Mortgage Credit Certificate and Municipality based assistance programs, and both could have been applied to this property, as in it was eligible, there was available money in the program budgets, and each of them stretched the buyer's ability to pay by at least enough, let alone if applied for together. If both were already accounted for, bid on something less expensive; it's not like there is any shortage of properties for sale. Maybe somebody has to share a room; maybe there are fewer amenities, maybe they just don't love it quite as much. None of these is the owner's problem.
Yes, I'm always looking for hidden bargains, but this time I was on the side of the owner, or rather, the owner's agent, and furthermore, the property was correctly priced and seeing strong activity. Neither of those are characteristic of hidden bargains. Furthermore, appeal to pity is a bad negotiating tool.
So here's the situation: Somebody comes up to you and asks you to sell your property for far less than you can get, because they are so deserving, and you want this underdog to succeed against the odds. "Help me, I'm really in need." The appeal is no different at the root than a pan-handler's pitch.
I've given money to panhandlers in my time, too, and doubtless will again. I'm a complete sucker for the ones with kids. But that's maybe $5 or $10, possibly even $20 at the most. Panhandlers are not effectively asking for $40,000 or so out of my pocket, much less my client's pocket. My client has neither a Red Cross nor a Salvation Army Shield on their door. They are not obligated to settle for much less than they could get for a valuable property. In this case, the difference was for something like 70% of their actual net equity, and it is a violation of the fiduciary trust that my client has placed in me, and I have accepted, not to point this out. If it were several months on, and this was looking like it might be the best offer the property would get, that would be one thing. But it was a brand new listing with strong enough activity that there was even hope of a little bit of a bidding war. It's not like the prospective buyer was homeless, and even if they were, there are more logical things to do first than buy a four bedroom detached home, not to mention it would be tough getting verification of rent, which all lenders are going to want.
But I also counseled the other agent not to reject the offer completely, and not to counter until the third day. The high counter signals, in no uncertain terms, that the owner's bargaining position is very strong. It's even a good idea to explain why it's very strong. But in this market, especially, you get buyers looking for a bargain because they might be able to get one. My buyers do it. Why not others? By the third day, there might be another offer on the table. Not that the absence of other offers stops some agents from pretending that there are other offers, but I've always found that the best policy is not to lie when the truth will do, and the truth will always do, because you should tailor your response to what the truth is. This may sound strange coming from a member of the profession that describes condemned buildings as "needing a little TLC", but if you want to do well in negotiations, never overplay your hand (and tell the buyer that the building is condemned. Condemnation is a recorded instrument, so it's not like you can plead ignorance). Real estate is almost entirely public information. If there is a dissonance between how you act, what you say, and what the public information says, good agents will pick up on it. This is not poker. The other side can see most of your cards, and has the option of getting up and walking away from the table at any time, and good agents will counsel their clients to do exactly that if the situation calls for it. The idea is a willing buyer and a willing seller coming to a mutually beneficial arrangement.
So the other agent took the offer to the client, and jointly they decided to mostly follow my advice. The prospective buyer walked away, they got two more offers before the third day. And a couple days later, well, remember that first group of two thoughts I had? Well, we found out that that particular prospective buyer was buying with intent to flip; he had flipped at least four properties in the previous year or so. His low offer and all the histrionics surrounding it was simply a ploy for more profit.
Caveat Emptor
UPDATED here
Carnival of Personal Finance
Carnival of Real Estate
Carnival of Investing Recommended: My Money Blog (Why You Should Ignore Stock Market Predictions), Genius Types (Keep Your Cool, in stocks and dating)
Carnival of Debt Reduction
Carnival of the Capitalists
RINOs want problems solved, not perpetuated. Our illustrious temporary Commissar submits the first entry with Nine ER's Closed In 5 Years In LA; Unpaid Care Costs Of $1.6 Billion A Year - A Case Study In Stupidity, which talks about perpetuating versus solving problems.
Techography has much much more, including specific details, on the illegal immigration picture.
In the same vein, Generic Confusion submits Bush's Health Care Proposal, an analysis of the advantages and limitations of the president's health care plan. I find myself actually sorry that it's politically DOA as he seems to have taken a sane approach grounded in economic reality.
RINOs won't tolerate nonsense. Your host covers some contradictions in a poll. Apparently, few people think they are racists, but a considerably larger number thinks that everyone else is. "I'm Not Racist But Everyone Else Is". Racists aren't gremlins who appear out of nowhere and return from whence they came, unfortunately.
On the Foreign Relation Front, Decision '08 is strongly in favor of a realist (as opposed to Realist) approach to Iran in Upping the Ante, discussing the Iranians sponsorship of Iraqi violence and the consequences to Iran.
All Things Jennifer tells us about the 2008 Presidential Ticket Quiz. Her candidates are about what you'd expect of a RINO. So were mine.
Tinkerty-Tonk injects a bit of common sense to some hype on the Devlin incident, in which a pizza store manager kept an abducted teenager for four years, in He was a quiet man. Of course he was. Criminals have to avoid calling attention to themselves.
Enrevanche wants to foster a discussion of political dynasties in Talk amongst yourselves. I'd cite not only the Kennedys (at least since April 1968) on the debit side of the ledger, but the Tafts (US President and Ohio Governor), the Harrisons (President, Senator, and President), and at least one local South Bay clan. On that note, Barry, I hope your mom is doing better - neither one of you is in politics.
RINOs have no patience with political games: Danegerus covers John Kerry trying to get as close to the constitutional definition of treason as possible without actually touching the line.
Matter of fact, RINOs have no problem with telling the government to butt out completely, as illustrated by The Nose on Your Face
RINOs demand equal accountability for all, as Don Surber's submission shows.
RINOs have a sense of humor, but want to see some indication that lunacy is actually intended as a joke. Extensive research by Classical Values fails to yield conclusive evidence whether a group that wants the British to pay 31 trillion pounds is serious. My guess is that they're not intentionally funny. There is no shortage of lunatic nutjobs.
RINOs have no sacred cows. Pigilito analyzes the French role in the Rwandan Genocide. The French do not come out looking like anyone whose approval the United States should want.
RINOs don't suffer fools gladly: Mind of Mog on our most recent failed presidential aspirant, seemingly determined to punish America for rejecting him but still seeking the approval of France.
RINOs have no patience for wrong priorities: Right Thoughts covers the FBI (Maybe it really does stand for Female Body Inspector), and inappropriate priorities. Warning, Language Not Safe For Work or Families.
Another story of one determined person making a real difference. Flat tire? Looks like a job for Nigeria's 'Lady Mechanics'
The Republicans could do worse: Hunter Touts Experience, Conservatism in Bid for Presidency
He's local to me, and although I don't live in his district, he's always impressed me as a rational conservative, and his Armed Services Committee experience is a very strong calling card, given the international situation we find ourselves in. He's another Republican I could really support, along with Giuliani, Gingrich, and even McCain, if he stops trying to repeal the first amendment. Unlike Giuliani and McCain, Hunter doesn't have problems with the Republican primary voters, and he might be able to sell a large majority of centrists outside the party if he gets the nomination. Unlike Gingrich, he's still in government, which is a very powerful advantage to visibility. I'd like to see him get some traction, at least.
Q and O on the progressive disintegration of the secular Turkish state.
neo-neocon and Peter Mulhern on the threat we face.
neo's ending Churchill Quote bears repeating:
If you will not fight for right when you can easily win without blood shed; if you will not fight when your victory is sure and not too costly; you may come to the moment when you will have to fight with all the odds against you and only a precarious chance of survival. There may even be a worse case. You may have to fight when there is no hope of victory, because it is better to perish than to live as slaves.
I am well aware that with my politics, I alienate a considerable number who might pay attention to my area of primary expertise, and people who might do otherwise business with me who are turned off by my disagreement with their politics. I am nonetheless a citizen with children - two daughters to be precise. If I can not provide for them a world that is at least as good as the world my wife and I got from our parents, then I have failed, as a citizen and as a father, far more important than any economic failure I might possibly experience.
The Universe knows I have agreed to any number of debates when the opposing side wanted merely a diatribe. They talk, I listen, they get their way. One twit sent me an hour and a half of media; I did her the service of refuting the first, she sent me another propaganda piece that tried to make exactly the same points without responding to my refutation of the first. That's not how it works. In order to have a debate, both sides have to respond both intellectually and honestly, acknowledge the points made by the other side, and get on with the hard intellectual work of overcoming them, or acknowledge that perhaps you were mistaken. It is not enough to send copies of the propaganda to which your side subscribes to proponents of the other. That's not debate, that's shouting down. You must prove that you can stand up to and intellectually refute the best argument that the other side can make. The true test of debate is not tearing down the other side, it is in showing that even though they may have some things in their favor, you've got something better.
We've got the Enlightenment and the US Constitution and Bill of Rights and the scientific method and the study of logic and the experiences that brought our Western Civilization to the highest point that has yet been attained upon this planet, that wants to continue climbing while expanding out its privileges to the rest of the world. It isn't us, at least not as individuals; we're standing upon the shoulders of giants so immense and so powerful that those who would bring us down have only the hope that we will stand idly by why they tear us down to comfort them. Sadly, they have almost seduced us as a society into doing so.
I need to spend some more time thinking about this subject in order to articulate my thoughts sufficiently, but I;ll try to follow up within the week.
A devastating critique of Arnold's health care proposal.
My opinion is that The Pledge is entirely one sided, and yet, it is better than nothing at all. Of course, when was the last time anyone withheld a donation from a Democrat for failing to support the war effort? Nonetheless, the effort would be worthwhile.
I signed. So should you if you want victory, even if you're a die hard Democratic partisan.
Assuming you don't want to live in an Islamic theocracy in your old age. Also assuming you're not one of the ones they kill right off.
There is no acceptable substitute for Victory.
Top Ten Myths of the Iraq War (via Instapundit)
A couple of weeks ago, I got an email asking Save For A Down Payment or Buy Now?, and I wrote a two part article on the subject. Part 2 of Save For A Down Payment or Buy Now? gave an alternative strategy to make affordability accelerate faster. But there was an obvious, related concern that I let go because it was a very complex calculation, and that was, "What's the effect of waiting to buy on my financial situation down the line?"
This wasn't an easy problem to program, even in a spreadsheet. I'm decent with spreadsheets, but for a lot of the calculations I had to do it by brute force repetition. Had I been able to do certain functions on spreadsheets that I used to do with matrices back in the really dim times, it would have been far easier, but the area I ended up using was three sheets totaling about 60,000 cells. Most of it was change one thing, copy and paste a row or column segment, then change another. It wasn't that hard mentally, but the finished product certainly makes a microprocessor work for a living!
I also had to make some simplifications to the problem. In order to make the problem manageable, I had to assume that you hold onto your home, once you have bought, at least until the end of the scenario, and also that you never refinance. I had to program it with smooth inflation, smooth appreciation, smooth increases in federal income tax standard deductions, and smooth increases in auxiliary prices. Anyone over the age of thirty ought to know how dangerous that is. But adding those random elements made the problem beyond the scope of what I could realistically do. I also had to postulate no major changes in income or property tax law, and I had to ignore the effects of state income taxes. Besides, the idea was to isolate the effects of the variable under consideration, how waiting to buy a home influences your financial situation down the line. I also had to choose a set period to terminate at, and arbitrarily chose 30 years.
Actually, this is two discrete problems when you really look at it, and they really are disjoint, and no matter how much the folks who sell Reverse Annuity Mortgages might try to link them, they are separate cases. What happens if you keep living there, versus what happens if you decide to sell and move somewhere else when you retire.
Nonetheless, the following simulations are all as representative as I can make them. Except for the effects of state income tax, they are in line with current California computations.
Example 1: Suppose you're talking about a San Diego Condo. $300,000 present purchase price, no down payment but you can save $500 per month for a down payment in the future if you don't buy now, and this amount increases proportional to salary increases. The property continues to appreciate at 4.5% whether you buy or not, association dues are $250 per month and general inflation is 4%, and you can get 7.2% return, net of taxes (10% minus an assumed marginal tax rate of 28%), on the money you save for a down payment. Whenever you buy, you can get a 6% first mortgage, and a 9% second if you need it. I'm also going to assume that in order to see any financial benefit, you're going to have to sell at a cost of seven percent of value. Furthermore, you're stable in your profession, seeing a 3% compounded annual raise in income, and equivalent rent is $1400 per month currently.
| Year 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 | purchase price $300,000.00 $313,500.00 $327,607.50 $342,349.84 $357,755.58 $373,854.58 $390,678.04 $408,258.55 $426,630.18 $445,828.54 $465,890.83 $486,855.91 $508,764.43 $531,658.83 $555,583.48 $580,584.73 $606,711.05 $634,013.04 $662,543.63 $692,358.09 $723,514.21 $756,072.35 $790,095.60 $825,649.90 $862,804.15 $901,630.34 $942,203.70 $984,602.87 $1,028,910.00 $1,075,210.95 $1,123,595.44 | still owe * $24,489.73 $46,429.89 $67,745.37 $88,445.34 $108,534.07 $128,010.82 $146,869.63 $165,099.15 $182,682.37 $200,029.06 $217,296.63 $233,893.12 $249,747.93 $264,783.31 $278,913.68 $292,045.12 $304,074.62 $314,889.39 $324,366.10 $332,370.01 $338,754.10 $343,358.06 $346,007.30 $346,511.78 $344,664.85 $340,241.87 $332,998.90 $322,671.15 $308,971.35 $291,299.48 | housing* $1,354.26 $1,514.40 $1,659.59 $1,801.37 $1,939.80 $2,074.91 $2,206.72 $2,335.19 $2,460.26 $2,581.85 $2,702.41 $2,822.91 $2,939.80 $3,052.67 $3,161.06 $3,264.47 $3,362.35 $3,454.09 $3,539.04 $3,616.45 $3,685.54 $3,745.43 $3,795.18 $3,833.75 $3,860.02 $3,872.76 $3,870.64 $3,852.21 $3,815.90 $3,760.00 $3,680.93 | waiting $0.00 $160.15 $305.33 $447.11 $585.54 $720.66 $852.46 $980.93 $1,106.01 $1,227.59 $1,348.16 $1,468.65 $1,585.54 $1,698.41 $1,806.80 $1,910.21 $2,008.09 $2,099.84 $2,184.78 $2,262.19 $2,331.28 $2,391.17 $2,440.92 $2,479.49 $2,505.76 $2,518.50 $2,516.39 $2,497.96 $2,461.65 $2,405.75 $2,326.67 | savings* $3,186.50 $3,026.35 $2,881.16 $2,739.39 $2,600.96 $2,465.84 $2,334.04 $2,205.57 $2,080.49 $1,958.91 $1,838.34 $1,717.85 $1,600.96 $1,488.09 $1,379.70 $1,276.29 $1,178.41 $1,086.66 $1,001.72 $924.31 $855.22 $795.33 $745.58 $707.01 $680.74 $667.99 $670.11 $688.54 $724.85 $780.75 $859.82 |
*Still owe 1 final payment after thirty years if you buy today. "Housing" is how much your costs of housing will be in 30 years if you bought at the indicated time is, and assumes you refinance for zero cost into the same rate you have now. Waiting cost is as opposed to buying now. Finally, the savings column has to do with how much you are saving per month over what the equivalent rent will be in 30 years, namely $4540.76 in this case.
Please keep in mind that the table is the net result 30 years out; the only time variable in the equation is precisely when you bought the exact same condo. Now there is some mildly strange stuff that goes on. For instance, starting 25 years out, there's a period where, under the stated assumptions, your saving for a down payment actually starts to increase in value faster than the property. But by that point, you've missed the optimum time to buy by, well, 25 years. Keep in mind that money will be worth less than a third of what it is today in thirty years ($1 then will be worth 30.8 cents now), but you are still saving significant amounts of money on your future housing payments by buying as soon as practical.
Now let's look at the situation if you decide to sell your home and go live somewhere else:
| Year 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 | purchase price $300,000.00 $313,500.00 $327,607.50 $342,349.84 $357,755.58 $373,854.58 $390,678.04 $408,258.55 $426,630.18 $445,828.54 $465,890.83 $486,855.91 $508,764.43 $531,658.83 $555,583.48 $580,584.73 $606,711.05 $634,013.04 $662,543.63 $692,358.09 $723,514.21 $756,072.35 $790,095.60 $825,649.90 $862,804.15 $901,630.34 $942,203.70 $984,602.87 $1,028,910.00 $1,075,210.95 $1,123,595.44 | net equity $1,043,032.82 $1,020,454.03 $998,513.87 $977,198.39 $956,498.42 $936,409.69 $916,932.94 $898,074.13 $879,844.61 $862,261.39 $844,914.70 $827,647.13 $811,050.64 $795,195.83 $780,160.45 $766,030.08 $752,898.64 $740,869.14 $730,054.37 $720,577.66 $712,573.75 $706,189.66 $701,585.70 $698,936.46 $698,431.98 $700,278.91 $704,701.89 $711,944.85 $722,272.61 $735,972.41 $753,644.28 | liquidation $7,079.98 $6,926.72 $6,777.79 $6,633.11 $6,492.60 $6,356.24 $6,224.03 $6,096.02 $5,972.28 $5,852.93 $5,735.18 $5,617.97 $5,505.32 $5,397.70 $5,295.64 $5,199.72 $5,110.59 $5,028.93 $4,955.52 $4,891.20 $4,836.87 $4,793.53 $4,762.28 $4,744.30 $4,740.87 $4,753.41 $4,783.43 $4,832.60 $4,902.70 $4,995.69 $5,115.65 | net benefit $594,459.84 $531,782.24 $526,736.25 $495,140.59 $448,046.96 $435,547.19 $407,644.83 $380,733.08 $354,624.01 $329,944.53 $301,836.93 $269,957.25 $239,420.18 $210,196.49 $182,428.96 $155,944.29 $130,741.38 $106,921.94 $84,296.01 $63,087.55 $43,073.74 $24,442.68 $7,100.56 ($8,932.23) ($23,548.85) ($36,736.02) ($48,455.14) ($58,627.44) ($67,101.14) ($73,746.48) ($78,651.68) | waiting cost $0.00 $22,578.79 $44,518.95 $65,834.43 $86,534.39 $106,623.13 $126,099.88 $144,958.69 $163,188.21 $180,771.43 $198,118.12 $215,385.69 $231,982.17 $247,836.99 $262,872.36 $277,002.74 $290,134.18 $302,163.67 $312,978.45 $322,455.16 $330,459.07 $336,843.15 $341,447.12 $344,096.36 $344,600.84 $342,753.90 $338,330.93 $331,087.96 $320,760.21 $307,060.41 $289,388.54 |
Net equity is what you have left after 7% costs of selling, liquidation assumes that you are taking out 360 equal monthly payments based upon the same return I assumed your money could earn before you bought. Net benefit is the number of dollars difference it makes to your financial position in the future 30 years from now if you buy at the indicated time. Notice that starting 25 years out, it actually hurts you to buy from then on out, as opposed to just letting the investments you were saving for a down payment run. Waiting cost is how much it hurt your future financial position to delay purchase by that much, so if you wait five years, you end up with over $100,000 less in your pocket.
Now let's do a second example: Still in San Diego, but you're going to buy a starter single family residence that would cost $450,000 today. Nudge assumed appreciation up to 5.5%, cut association dues out but raise property taxes and insurance costs appropriately. Oh, and the equivalent rent now starts at $2000, and general inflation I'm going to assume to be 3.5%. Actually, based upon the past seventy years, everything that has happened has been, over time, more favorable to home ownership than this.
Once again, let's look at the situation if you keep living in the property after 30 years first.
| Year 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 | purchase price $450,000.00 $474,750.00 $500,861.25 $528,408.62 $557,471.09 $588,132.00 $620,479.26 $654,605.62 $690,608.93 $728,592.42 $768,665.01 $810,941.58 $855,543.37 $902,598.25 $952,241.16 $1,004,614.42 $1,059,868.21 $1,118,160.97 $1,179,659.82 $1,244,541.11 $1,312,990.87 $1,385,205.37 $1,461,391.66 $1,541,768.21 $1,626,565.46 $1,716,026.56 $1,810,408.02 $1,909,980.46 $2,015,029.38 $2,125,856.00 $2,242,778.08 | still owe * $37,403.63 $72,247.27 $107,464.64 $143,121.84 $179,283.73 $216,014.10 $253,375.62 $291,429.94 $330,237.68 $369,858.41 $410,350.66 $451,771.89 $494,178.40 $537,625.32 $582,166.43 $627,908.86 $675,787.71 $724,872.44 $775,183.89 $826,740.19 $879,556.33 $933,643.75 $989,009.82 $1,045,657.39 $1,103,584.13 $1,162,781.95 $1,223,236.28 $1,284,925.33 $1,347,819.27 $1,410,482.12 | monthly $1,151.93 $1,404.15 $1,641.99 $1,883.05 $2,127.79 $2,376.60 $2,629.93 $2,888.18 $3,151.75 $3,421.06 $3,696.50 $3,978.46 $4,267.34 $4,563.52 $4,867.37 $5,179.28 $5,499.92 $5,834.96 $6,178.89 $6,531.86 $6,894.07 $7,265.65 $7,646.73 $8,037.44 $8,437.84 $8,847.99 $9,267.92 $9,697.62 $10,137.03 $10,586.05 $11,036.15 | Wait cost $0.00 $252.22 $490.06 $731.13 $975.86 $1,224.68 $1,478.00 $1,736.25 $1,973.99 $2,178.71 $2,388.07 $2,602.37 $2,821.91 $3,046.98 $3,277.86 $3,514.85 $3,758.46 $4,013.04 $4,274.35 $4,542.51 $4,817.67 $5,099.93 $5,389.39 $5,686.13 $5,990.21 $6,301.66 $6,620.52 $6,946.75 $7,280.32 $7,621.14 $7,962.68 | savings $4,461.66 $4,209.44 $3,971.60 $3,730.53 $3,485.80 $3,236.98 $2,983.66 $2,725.41 $2,461.84 $2,192.53 $1,917.09 $1,635.12 $1,346.24 $1,050.07 $746.21 $434.31 $113.67 ($221.38) ($565.30) ($918.28) ($1,280.48) ($1,652.06) ($2,033.15) ($2,423.85) ($2,824.25) ($3,234.40) ($3,654.34) ($4,084.03) ($4,523.44) ($4,972.46) ($5,422.56) |
Equivalent rent would be $5613.59. Once again, the last three columns are all monthly streams, and they do have a steady worsening the entire time, mostly because your saving for a down payment does not start to catch up to the increase in property values during the simulation period. In other words, the longer you wait, the worse it gets. Indeed, affordability is monotonically decreasing the entire time. That's math geek for "Quit waiting, it only gets worse." Even though a dollar then is only worth 35.6 cents now, wouldn't you like as many 35.6 cents in your pocket as possible?
Now let's examine if you decide to sell this starter home in retirement, and go live somewhere else.
| Year 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 | purchase price $450,000.00 $474,750.00 $500,861.25 $528,408.62 $557,471.09 $588,132.00 $620,479.26 $654,605.62 $690,608.93 $728,592.42 $768,665.01 $810,941.58 $855,543.37 $902,598.25 $952,241.16 $1,004,614.42 $1,059,868.21 $1,118,160.97 $1,179,659.82 $1,244,541.11 $1,312,990.87 $1,385,205.37 $1,461,391.66 $1,541,768.21 $1,626,565.46 $1,716,026.56 $1,810,408.02 $1,909,980.46 $2,015,029.38 $2,125,856.00 $2,242,778.08 | net equity $2,082,917.20 $2,048,379.98 $2,013,536.35 $1,978,318.97 $1,942,661.78 $1,906,499.88 $1,869,769.52 $1,832,407.99 $1,794,353.67 $1,755,545.93 $1,715,925.21 $1,675,432.96 $1,634,011.73 $1,591,605.21 $1,548,158.29 $1,503,617.18 $1,457,874.75 $1,409,995.90 $1,360,911.17 $1,310,599.72 $1,259,043.42 $1,206,227.28 $1,152,139.87 $1,096,773.79 $1,040,126.22 $982,199.48 $923,001.67 $862,547.34 $800,858.28 $737,964.35 $675,301.50 | liquidation $14,138.60 $13,904.16 $13,667.65 $13,428.60 $13,186.56 $12,941.10 $12,691.78 $12,438.17 $12,179.86 $11,916.44 $11,647.50 $11,372.64 $11,091.48 $10,803.63 $10,508.72 $10,206.38 $9,895.88 $9,570.89 $9,237.70 $8,896.20 $8,546.24 $8,187.73 $7,820.59 $7,444.77 $7,060.25 $6,667.05 $6,265.23 $5,854.87 $5,436.13 $5,009.21 $4,583.87 | net benefit $1,681,408.70 $1,527,603.06 $1,482,514.85 $1,390,228.98 $1,262,990.98 $1,218,788.65 $1,139,516.49 $1,064,002.28 $991,242.90 $921,953.98 $854,914.46 $790,327.87 $728,045.15 $667,919.78 $609,807.59 $553,566.46 $498,733.07 $440,202.91 $383,770.99 $329,344.94 $276,837.21 $226,165.09 $177,250.78 $130,021.48 $84,409.45 $40,352.17 ($2,207.48) ($43,321.12) ($83,034.61) ($121,387.80) ($156,994.47) | wait cost $0.00 $34,537.22 $69,380.85 $104,598.23 $140,255.42 $176,417.32 $213,147.68 $250,509.21 $288,563.53 $327,371.27 $366,991.99 $407,484.25 $448,905.47 $491,311.99 $534,758.91 $579,300.02 $625,042.45 $672,921.30 $722,006.03 $772,317.48 $823,873.78 $876,689.92 $930,777.33 $986,143.41 $1,042,790.98 $1,100,717.72 $1,159,915.53 $1,220,369.86 $1,282,058.92 $1,344,952.85 $1,407,615.70 |
Now it is to be noted, as you may have seen under the first table, a point in time exists starting 26 years out where you will be better off just keeping your down payment money socked away in alternative investments, as opposed to actually using it to buy your home.
I'm planning to start using this sheet with prospects, under assumptions they can set - If they think inflation is going to average 7%, or appreciation only 3%, the sheet can accommodate that. I've played with the sheet over a few dozen simulations, and due to leverage, the numbers appear quite powerfully in favor of buying the best home that you can actually afford, right now. Interestingly enough, however, these number also strongly suggest that as close to 100% financing as you can manage initially will outperform larger down payments, and that's something that seems quite counter-intuitive to the usual run of financial planning. Instead of using it for your down payment, financing 100% of your purchase if you can seems to make your money work harder. Well, I can put a lot of caveats on that, because metaphorical bumps in the road happen, and nobody knows exactly when or how these disasters will strike. If you do, you can plan for it, and could you please drop me an email in warning? When you're just looking at the raw numbers, however, the advice they give is quite strongly to buy the best property you can afford as soon as you can, putting down as little of a down payment as you can, and making the minimum payments while salting away the rest for a rainy day. But be very careful not to stretch too far, because one thing you can count on, even in Southern California, is that it will rain sometimes.
Caveat Emptor
UPDATED here
I've seen some fairly intelligent people completely fail to understand the value of estate planning, how easy it can be, and what it can accomplish.
To start with, there are some issues that happen when you die. The first is probate. This is a process whereby the state approves the distribution of your assets. Whether the state has any business putting their big nose into the process is not the discussion we're having here. The current fact is that they do, and this doesn't look likely to change. In the case of things like a home, where the family is living in it already, it's usually not too obnoxious as the state will typically allow the family to continue living in it, pending resolution of probate.
But liquid assets - the money you left - are tied up in the probate and cannot be accessed without court approval unless you titled the account correctly. This can be a major issue to a family that's just lost their major breadwinner - or either breadwinner in the case of a two income family. Unless you don't want your family to get it right away, titling accounts jointly in both your name and your spouse's as joint tenants with rights of survivorship is one way to deal with this. In the case of most accounts, there is the TOD, or Transfer on Death option of naming a beneficiary (or beneficiaries) for the account. The money then transfers upon your death to that person outside of probate. Estate and inheritance taxes are still potentially applicable, however.
The minimum charges for probate are about seven percent of the amount of estate under probate. If this includes your house and other major assets, it gets expensive quickly. A surcharge per year the probate is in effect is also usual. Probate sometimes doesn't get settled for several years - and some unusual ones have gone over twenty years, and with increasingly complicated family relationships, increasingly complicated probate becomes more likely. While probate is going on, your heirs will not have access to the money without court approval, and the court's priorities are not likely to be the same as your family's.
The number one tool for effective estate planning is not a will. That's an important component, especially if you have children and need to determine who their guardians will be, but for distribution of your assets, it falls woefully short. Everything disbursed by the will goes through probate, and estate and inheritance taxes as applicable. Wills can be and are challenged successfully every day, and the cost of the fight drains the estate even if the challenge is unsuccessful.
The most important tool for effective estate planning is the trust. There are varying kinds of trusts, so consult an attorney in your area. A trust is not a corporation, but if that helps you in your understanding, use it. A better way to think of it is as a robot that takes control upon your death and acts according to your instructions. When you create (or alter) the trust, you wind the robot, but (if written correctly) it acts like a string marionette during your life. You don't technically "own" the assets you transfer to the trust, the trust does - but you control the trust, and it dances upon your strings. Once the strings are cut by your death or incapacitation, the robot takes over and does what you told it to do in those circumstances. You might have told it to attach itself to someone else's strings, or you might have told it to disassemble itself, or both, as well as many other things. The important thing to remember about trusts is that they do not go through probate and they are (if written correctly) outside of estate tax as well. Remember, the "robot" owns this stuff, and the robot didn't die!. There may be a successful challenge to a trust on record somewhere, but I've never heard of one and (although not a lawyer) I can't see an angle for doing so. I do know of people who wanted to challenge them, and who appeared to have much better claims on the surface than the person who the trust had been instructed to deliver its assets to, who got their legal noses bloodied in a hurry. Ethical lawyers will generally tell potential clients seeking to challenge a trust "I'll look at it if you want, but if it's written correctly there's not a thing I can do except spend your money."
Next, life insurance. There are so many uses for Life Insurance in estate planning that it is hard to conceive of a good plan that doesn't use life insurance, and by that I don't mean term life insurance either, but one of the cash-value variety. Term life gets so expensive after age 60 that 97 percent of it gets cancelled before it pays benefits. For estate planning purposes, life insurance is useless if it doesn't stay in effect the entire rest of your life. Many people will tell you to buy term, but that's a particularly short-sighted, short-term solution that presumes your need for life insurance will vanish as soon as you've got some decent assets or your kids graduate college. Neither is likely to be the case for anybody middle class today.
This is most deeply rooted in straw-man arguments that claim term insurance is better by comparing it to whole life, ignoring the superior cash value life insurance types, and claim to have refuted the value of all cash value life insurance when they have only refuted whole life, and only within the set of parameters they have set. For older people (age seventy and up at time of plan) universal life is likely the way to go, while with younger people (definitely anyone under 50) it is difficult to come up with a scenario where Variable Universal Life does not outperform its term competitor in every way.
It appears that the difficulty of estate tax is likely to come soon, but there are issues. Even if a permanent repeal takes place, there is nothing to say it could not be re-imposed later. Second, it does nothing about state levied estate taxes. Third, some states have started re-exploring inheritance taxes as a consequence, which would be a disaster. Since estate tax is levied strictly on assets you own when you die (albeit with some recapture of stuff up to three years previously), it is avoidable to such an extent as to render it basically a volutarily paid tax on denial. All I can say is that the people paying it must have wanted to pay it, because there are legal ways not to owe the tax and all you have to do is plan ahead.
I want estate tax gone, mind you, but if I have to choose between complete and permanent estate tax repeal, or say, indexing the Alternative Minimum Tax (AMT) to inflation and putting estate tax back to where it was pre-2000, I'll support the latter option unreservedly. So just because the sentiment is there for repeal doesn't mean it'll happen, or that it'll be permanent if it does. So I suggest planning for estate tax as if it's going to effect you, and some of the methods of estate planning can actually increase the size of your gross estate beyond what it would have been without planning.
Will. Trust(s). Life Insurance. A good plan will have all of these, as well as others (Durable Power of Attorney for Health Care, to name one). I'd say Caveat Emptor, except it's more a case of "Be careful what you wish for. You may get it."
U.S. troops may protect selves from Iranians
I wasn't aware that there was any doubt. If there was, shame on the entire chain of command, but particularly Mr. Bush.
He spoke after The Washington Post reported that U.S. forces have the authority to capture or kill Iranian agents active in attacking American soldiers inside Iraq, a story Bush and other U.S. officials did not deny.
"It makes sense that if somebody is trying to harm our troops or stop us from achieving our goals or killing innocent citizens in Iraq, that we will stop them," Bush said. "It's an obligation we all have to protect our folks and achieve our goals."
All well and good, but
U.S. troops would not go into Iran.
I understand the political situation that leads to this, but don't be surprised if the opposition uses this rule against our troops. If Iran doesn't want incursions, and they shouldn't unless they are co-operating with the rebels - which they unfortunately are - they should have troops on the border ready to contest entry.
People Unclear On The Concept Department: ElBaradei calls for timeout on Iran nuclear program
International Atomic Energy Agency head Mohammed ElBaradei said Friday he was calling for a timeout regarding the Iranian nuclear issue, hoping that talks on the matter can resume.
ElBaradei told CNN International that the timeout would mean Iran would freeze its nuclear program, while the United Nations would temporarily suspend the sanctions package against Iran that took effect last month.
Dear Mr. Clueless IAEA Honcho:
Time is precisely what Iran wants. They may even say that they will freeze their program, but whether they actually do so is another matter entirely. See both their president and religious ruler's stated goals. Such a "Time Out" has a very high probability of giving Iran exactly what it really wants: the time and opportunity to develop nuclear weapons at a much lower economic cost.
Sanctions for hiring illegals worry firms
Under the provision, offered by Sen. Jeff Sessions, R-Ala., companies caught hiring illegal workers while on a federal contract would be banned from government work for 10 years. Other companies discovered with illegal workers would be prohibited from getting federal contracts for seven years.
The ban would not be subject to appeal in court, but the federal government could waive it for national security reasons. Companies that use a pilot electronic employment verification system would be exempt from the sanctions. Business groups complain the verification system is flawed.
Hurray!
Let's get real here. If businesses were really worried about sanctions being unjustly applied, they have an easily available safe harbor. All they have to do is use the verification system and they are in the clear. But if what they really want is to be able to hire illegal aliens without sanctions, which is the present system, then they would be doing, well, precisely what they are doing. Complaining and trying to get the proposed law changed.
Just as I have no patience for people in authority not enforcing the laws on the books, neither do I have any for corporations who actively work to frustrate the will of the electorate so that they can take advantage of people who have no avenue of complaint, and they want to keep making money from the very government they are defying.
In short, business as usual. (deleted expletive)
Flight delays hint at troubled system
I think there should be a bid system for the right to depart and land at impacted airports when traffic levels exceed certain targets. Yes, it will raise the price of tickets. But I've seen afternoon air traffic in the LA Basin too many times, and it's worse now than it was twenty years ago. AOPA opposes it because it'll mean that the pilot of a four seat single engine aircraft would have to bid against 747s for the right to land at LAX at 5 PM Friday, while I think that pilot should probably just plan to use any of the dozen or so airports in the area that are functionally equivalent for general aviation, or arrive and depart when the airport isn't quite so busy. If you want an idea what it's like, imagine that you were driving a Mini at freeway speed down a one lane road on which there is a continuous traffic of tractor rigs doing over twice your speed, and they don't even have to actually hit you to wipe you out due to wake turbulence. That's general aviation on final for LAX when it's busy.
I just went out doing some general market scouting. Looked at ten properties, and at least three were of a sort that I've started calling "vampire properties." One more reason you want a good buyer's agent.
Like a mythical vampire, these properties are very charming on the surface, luring in the innocent victims with brand new flooring, new roof tiles, and new paint. All the relatively cheap stuff that inexperienced buyers love. There might even be a new spa in the back yard. They call the listing agent and fall in love with the property. They put in an offer, which is quickly accepted, buy the property and move in.
Then the troubles start. Those brand new roofing tiles get ripped off the rotten substructure the first time a good wind comes up. The new owners notice that the travertine floor tiles are separating, and eventually, when one comes loose, find that there's a two inch wide crack in the foundation that runs the width of the house. That beautiful new tile in the bathroom has to come out because they discover the green board is rotten, and the framing boards as well.
It'd be better if the property was sucking your blood. At least that's covered by health insurance if you've got it. But it's got its fangs permanently embedded in your bank account, instead. None of this stuff is covered by home owner's insurance, new home warranties, or anything else. Your home owner's insurance might replace the roof tiles (pulled off by wind, which is usually a covered peril), but the rotten structure underneath is your problem, caused by the normal wear of time.
In most cases, I find it hard to believe that the previous owners didn't know about this stuff. That's what the brand new facade is about. They figured a quick surface fix - the home owner's equivalent of a cheap paint job over a rusted car body - and they unload the lemon on some unsuspecting chump and walk away. Quickly.
For any of those sort of people reading this, I've got to tell you that the lawyers will find you. But for the buyers in the situation, the lawsuit - which will take years, even assuming that they win and if the judgment is paid - is a poor substitute for not getting into the property in the first place. Particularly if, as seems to be the usual case, they stretched to the extreme limit of their budget or beyond in order to afford the property.
It is far preferable, to all parties, to have the issues dealt with before the sale is consummated.
Now most buyer's agents aren't licensed inspectors, and I'm not one of the few. You still want an full-on building inspection. That doesn't mean agents can't spot stuff before you have a purchase contract, come up with a deposit, and spend hundreds for an inspection. All of this is called "buy in," and works off of a phenomenon psychologists call cognitive dissonance. You've said you want it, you work really hard and jump through all of these hoops to get it, and when you find out how bad it really is, you keep going because you are so mentally committed, because you've done all this stuff. If it's something I can spot, wouldn't you rather find out before you do all of that work?
The listing agent certainly won't tell you. They'll have you sign a standard disclaimer advising you to get an inspection. Yes, they have to help fill out the disclosures, but if they're not licensed inspectors, they can't be blamed for not knowing, can they? Their responsibility is to get the best possible deal for the sellers. They have very little responsibility to the buyer. You can't blame listing agents for doing their job (You can blame them for lying).
It's almost inevitable that the owners of vampire properties price the property like something out of Big Al's Discount Used Car Lot. "Cream puff, baby! One owner, a little old lady who only lived in it on Sundays." They want top dollar and then some. I understand, but I'm not going along and neither are my clients if I can help it. I saw one today where the list price was $40,000 more than it should have been if it wasn't a vampire. The agents should know better, assuming they are not deliberately "buying a listing." Price it to market if you want to move, and that includes a hefty discount for not being the one who has to hassle with fixing it. If you want that money in your pocket yourself, fix the problem yourself. You'll also interest a better grade of potential buyer, not to mention more buyers than just the simpleton who happened to win the lottery.
I'd rather deal with a property where the issues are out in the open. I also found one property today that has a crack across the living room floor, out in the open due the aftermath of an obvious flood, but I can find buyers who know how to deal with that (If the lot is level, it's not such a big deal, and can often be fixed surprisingly cheap). You don't have a listing agent pretending to drool over beautiful flooring that is going to have to be replaced anyway. Furthermore, it indicates that the listing agent, at least, doesn't have their head stuck in the Land of Wishful Thinking, so if I take a client who is interested despite the flaws out to the view the property, we're all pretty much on the same page as to what's going on with the property, and we have the makings of a reasonable negotiation. If the listing agent is in the Land of Wishful Thinking, I'm wasting my time to look and the client's also if I show it to them.
Vampire properties are out there. In markets such as this one, they are both increasingly common and deadly to your financial future. You want somebody whose job it is to look past the beautiful surface to the very real issues beneath. If you buy a vampire, it's worse than a disastrous marriage, because the financial consequences are likely to follow you long after your abusive partner is history.
Caveat Emptor
UPDATED here
Michael Barone on the State of the Union Address
Michelle Malkin's take
I am amazed at the refusal of the "get out now!" crowd to consider the question of what happens next if they get their way.
Speaking of Iraq:
Lefty Business Insults Troops
SGT Hess,
We do not ship to APO addresses, and even if we did, we would NEVER ship to Iraq. If you were sensible, you and your troops would pull out of Iraq.
Bargain Suppliers
Discount-Mats.com
Q. How much extra effort does it take to ship to an APO?
A. Basically zero.
Dear Bargain Suppliers,
Dear Discount-Mats.com,
Go bankrupt.
Sincerely,
Dan Melson
Evidently, the sergeant has all the help he can handle with the problem. Good.
"I represent a majority black district. Maybe I should join the Congressional Black Caucus to find out how to better serve my constituents."
Never mind.
Racist scum, and I'm not talking about Representative Cohen.
More perspective here.
These two reporters theoretically saw the same testimony: JOHN HOLUSHA and Ann Scott Tyson.
official DOD site version here. Can't find a transcript yet. I know which version seems more likely to me.
Nothing regular readers should be unaware of, but it bears repeating: The Vietnam history you haven't heard
In other words, the story that the leftist consciousness is pushing around the world is so full of lies, omissions, and inaccuracies that it bears essentially no relationship to what actually happened. The communists successfully manipulated the public's perceptions of the entire thing, and the media still won't admit that in their zealousness to be independent of the American power structure, they became the tools of an enemy one. Willingly, in some cases. Blindly, in others.
Those who do not remember the past are condemned to repeat it. George Santayana
What's negotiable on a purchase?
The short answer is everything.
There may be standards and traditions in your area, the same as there are in mine. That doesn't mean they are not subject to amendment by specific negotiation. Once you get outside legal requirements, anything is subject to negotiation. As long as both (or all) parties concerned agree to it, that's the way it's going to be.
This is not to say that some things aren't better left alone. For example, if I was buying a property and the seller didn't want to pay for the policy of title insurance, as is traditional, I'd certainly think long and hard before continuing with the transaction. Furthermore, such behavior would certainly cause the price I'd be willing to pay to drop dramatically. If I'm helping clients, the same applies even more strongly. I'm going to tell them that this may mean the seller may not be able to deliver clear title.
This is also not to say that there may not be consequences as the result. For example, if I or my client is selling the property, and someone asks for a $10,000 credit towards closing costs, the lowest offer I'd accept would be at least $10,000 higher, probably $11,000, maybe more. Why? Because commissions and transaction costs are based upon the official sales price, not the sales price less that rebate to the buyer. The bottom line is that it costs at least $10,000 to rebate $10,000 thusly. A $400,000 offer that requires $10,000 in rebates isn't a $400,000 offer. It's a $390,000 offer at best.
In order for it to be a valid contract, the two parties have to agree in every particular. If there is not complete, total, 100 percent written agreement as to what is going to happen, there is no contract. Two parties haggling over whether one light bulb gets replaced do not have a valid contract any more than two parties haggling over whether the price will be $200,000 or $500,000.
Nonetheless, except for those very few things mandated in law, it's all negotiable. Specific negotiation can change anything that's not legally mandated, and most things with defaults specified in law. If you've got a gold bathroom faucet that you want to keep, a normal sales contract says that it stays by implication (it's a furnishing attached to the property and required for the property to function normally). But you can change this by specifying that you have the right to remove it in the contract. Now if they buyer is only buying the home because of that gold faucet, they can walk away or counter offer that it stays. Let's say you eventually agree that it will be replaced by another gold faucet. That's specific negotiation. The replacement will be required to be installed, equal in functionality and free of defects - unless you change this by more specific negotiation.
I've seen negotiation for personal property to remain, furnishings to leave, the disposition of existing tenants, allowing leasebacks to the prior owners, and just about everything else under the sun. If there's something about the standard contract you don't like, or something specific to this situation or this property, specific negotiation is how you deal with the issue. Furthermore, even if you don't want to change anything, the other side might. Indeed, probably more properties have further negotiations due to problems or issues raised by inspections than don't. Something is revealed to be not quite right, and the seller either has to make it right or negotiate with the buyer for acceptance in the current state.
This is not to say that as long as the transaction records the seller is golden, by the way. If the buyer can show reasonable evidence that the seller knew of the issue but failed to disclose it, that's a bone for the lawyers to fight over when it's discovered. Some sellers fight a losing battle over issues like this for years - and it ends up costing them far more money in the longer term. The buyer finds out something you should have told them after the transaction, that's a bad situation for a seller to be in. Better to disclose right away and be done with it. When the seller can prove the buyer knew the full extent of the issue and bought anyway, that's much better protection.
So make sure that if there's some issue you want resolved, the purchase contract resolves it completely and unambiguously. That contract is how the transaction is going to happen. If it's not there, you're at the mercy of the other party. They might see it your way. Then again, they might not.
Caveat Emptor
UPDATED here
RINO Sightings Eric did a wonderful job via Salvador Dali (Not Quite Safe For Work, if your boss doesn't understand that it's Art) Recommended: Digger's Realm (illegal immigrant sex offenses, but I seem to recall that includes some truly insignificant crimes as well, such as public urination), Web Economy BS Generator
Ship from 8th Century Found in Mediterranean
I didn't know where Dor Beach was; search engine results led me to believe it's Israel. The period in question would correspond to the Byzantine navy dominating that area. On the other hand, I also found a "Cala d'Or" in Majorca, which, given the political situation in the Western Mediterranean, could also be it. I find it difficult to accept that they've only found one wreck from that period in the eastern Med, but would find it much more credible pertaining to the Western portion, where my best understanding has maritime traffic much lower at that point in time, both due to the Vikings and the general state of the world. On the other hand, 'twas the Israelis at Haifa studying it. Fascinating article, though.
If his lawyers wanted a strategy guaranteed to backfire and harm their client, and keep on doing so even if he does get acquitted despite those lawyer's best efforts, it would be hard to beat this: Lawyers Paint Libby As Sacrificial Lamb
Top White House officials tried to blame vice presidential aide "Scooter" Libby for the 2003 leak of a CIA operative's identity to protect President Bush's political strategist, Karl Rove, Libby's defense attorney said Tuesday as his perjury trial began.
Say what? He's on trial for perjury for lying to investigators under oath, as even the article mentions:
Rove was one of two sources for Novak's story. The other was then-Deputy Secretary of State Richard Armitage. Nobody, including Rove and Armitage, has been charged with the leak. Libby is accused of lying to investigators and obstructing the probe into the leak.
Now if Richard Armitage was charged, I might believe they were protecting Rove. But the power structure in Washington won't stand for charging Richard Armitage, who is a powerful insider with ties to both sides of the aisle, and FitzGerald
didn't charge him, despite him being the only one possibly guilty of a primary offense.
Fitzgerald said Libby learned from five people - from Cheney to members of the CIA and State Department - that Wilson's wife worked for the CIA. Libby discussed that fact to reporters and others in the White House, Fitzgerald said.
"But when the FBI and grand jury asked about what the defendant did," Fitzgerald said, "he made up a story."
Whoops. What does the "I was set up" thing have to do with this, unless he was instructed to lie by his superiors? Even if he was instructed to lie, and Vice President Cheney bears this out in his testimony, Libby is still guilty. Nor will he be in a position to ask for or receive clemency after this trial tactic. Furthermore, he'll never get another job offer, ever again, either in Washington (either party) or the corporate world. All that's left is a book deal. Meantime, he's a convicted felon. He could have pulled the Bill Clinton defense and likely gotten away with it, or he could have just fought it straightforward, on the evidence, and had an excellent chance of clemency, even on the chance he was convicted.
I am not a lawyer. But If I were "Scooter" Libby, I'd be looking for another one.
I wasn't there, but as the father of two young children, I've got to say it looks like the airline got it right. Toddler's Temper Ousts Family From Plane
"The flight was already delayed 15 minutes and in fairness to the other 112 passengers on the plane, the crew made an operational decision to remove the family," AirTran spokeswoman Judy Graham-Weaver said.
and
She was removed because "she was climbing under the seat and hitting the parents and wouldn't get in her seat" during boarding, Graham-Weaver said.
In other words, the parents couldn't or wouldn't control her. The rules and regs are hardwired and the airline doesn't have a choice about whether it's going to comply.
The mother's excuse?
Julie and Gerry Kulesza, who were headed home to Boston on Jan. 14 from Fort Myers, said they just needed a little more time to calm their daughter, Elly.
"We weren't given an opportunity to hold her, console her or anything," Julie Kulesza said in a telephone interview Tuesday.
They had at least fifteen minutes, in addition to whatever time before boarding they should have needed. Nor would it have hurt her to be belted in to her seat. Yes, she would have cried. Sometimes you have to let them. I'm sorry for the surrounding passengers, but that's the least bad alternative if the child is going on that flight. But the parents weren't willing to do that. What is the airline supposed to do? Delay the flight and everyone else on it for as long as it takes, be liable for costs incurred by those people and the resulting bad will, delay the folks waiting for the plane's next flight, etcetera, etcetera, etcetera?
If I thought I had to, I'd drive across the country and back to prevent this sort of thing with my girls. Or whatever else needed to happen. But when you engage in communal transportation, you are making the statement that you believe that you can comply with the rules set down for it, and if you can't, you have no gripe coming when the carrier deals with the situation appropriately. It was not even vaguely reasonable to expect a planeload of other folks to wait however long it took, as well as forcing the airline to eat major delays and possibly be on the hook for payments to everyone else. At the very least, I'd voluntarily take the next flight to give me a chance to get her calmed down. Blaming the airline is avoiding the issue, which is that it was the parent's fault for not prepping the child, plus not being willing to deal with the necessities of the situation.
The Orlando-based carrier reimbursed the family $595.80, the cost of the three tickets, and the Kuleszas flew home the next day.
They also were offered three roundtrip tickets anywhere the airline flies, Graham-Weaver said.
Far beyond the call of duty, in my book, in addition to delaying the entire flight fifteen minutes to give them the opportunity to do what they should have done in the first place. The airline bent over backwards, at the expense of their other passengers, and the parents spat in their outstretched hands.
Yes, I complain about bad customer service when it really is bad customer service. But this isn't a customer service issue, except from the point of view of the other passengers, who also paid for their tickets on the flight, and the passengers who were waiting for that plane's next flight, etcetera. This is just plain rudeness on the part of the parents, who should have had some understanding of the situation they were putting the airline and the other passengers into. I went into my regular barbershop the other day, and people were stacked up so that I would have missed a meeting if I took my turn. It would not have been reasonable to expect to be accommodated ahead of others already waiting; instead I told the owner it was not his fault and that I'd be back in a few days when I had another chance. Any other response would have shifted the responsibility for the situation from where it belonged: on my shoulders. Nor is this any special virtue; it's just an acknowledgement of the fact that the conditions weren't right for what I hoped for: a quick haircut in time for my meeting.
I would like to ask these folks one question: Are there any other people on the planet they come from, or just two-legged anthropoid puppets that move around and get in their way?
I'd drop the last two letters: Clinton says spouse will be an 'asset'
If elected president, Hillary Rodham Clinton says her spouse and former Oval Office occupant will be a "tremendous asset," but she's the decider.
Why is it so bad when Bush is the decider, but worthy of writing in glowing terms when the candidate is one the writer approves of?
Excellent article: Retirees up against debt
Seniors in and approaching retirement -- such as the oldest baby boomers -- are carrying "debt loads that their parents would not have considered," says Sally Hurme of AARP, the advocacy group for people 50 and older. "This does not bode well for financial health."
The one and only measure of wealth that makes sense is "How long can you live without any income from outside sources?"
The Speech George Bush Should Make Tonight
(via Tinkerty Tonk)
INDC Journal is in Iraq, and contributing such reports as this one (concerning corruption and rooting it out).
Poll: 79% Will Vote for African-American President
Seventy-nine percent (79%) of American voters say they're willing to vote for an African-American presidential candidate. However, the latest Rasmussen Reports national telephone survey found that just 55% believe their family, friends, and co-workers are willing to do the same.
See also, "I'm not sexist, but everyone else is"
Earlier, we asked a similar question about voting for a woman and found similar results. Seventy-eight percent (78%) say they'd vote for a woman but just 51% said their peer group would do the same.
The question I'd be asking is how many people don't agree with their positions on the issues, but would vote for them because they're black, or female?
Obama seems a decent senator for his consituents, albeit so left wing I'll never vote for him for President, unlike Hillary, where I might be persuaded to vote for her if the Republicans offer something even worse.
However, the country is 51% women voters, and I suspect a lot of them will vote Hillary despite her stance on the issues simply because she is female and they want to prove that a woman can be president. Ditto Obama and black, but there are more women than blacks, especially when you consider the numbers who actually vote.
(I have voted for a black for President: Alan Keyes, before he went crazy, and I'm willing to consider a woman on the merits of her candidacy, but not "because she's a woman." That's every bit as much a bigoted as voting for Hillary's opposition, if you do so because Hillary is a woman, and not because of their relative stance on the issues.)
Loans are declined, or actually, the next thing to it, all the time. It is pretty rare for a loan to be outright rejected; I do not recall ever having had a loan outright rejected. That's a sign of a loan officer who wasn't paying attention to guidelines when the loan was submitted. What happens is that the underwriter puts conditions on it which cannot realistically be met. Documentation for more income than you make is probably the classic example of this. What usually causes this is that the underwriter finds a debt that didn't show up on the credit report and that you didn't tell your loan officer about, and so a loan with a marginal but acceptable Debt to Income Ratio became unacceptable. Or the appraisal comes in low, raising the cost or lowering the cash out due to a higher Loan to Value Ratio than the loan was priced for. Sometimes there is something that can be done about it; sometimes there isn't. If your loan officer can't think of anything to do about it, he'll tell you the loan was rejected. Sometimes they'll tell you that the quote that got you to sign up was rejected, also, but they have this other loan over here "that isn't much more expensive" that you do qualify for. Telling you that a loan was rejected is one of the best ways there is for a loan officer to do bait and switch.
Unfortunately, there really isn't anything you can do to verify that your loan was rejected, as opposed to bait and switched, or just couldn't meet underwriting guidelines. (Whether it had any chance of meeting underwriting guidelines is a subject for many more essays).
The first thing to do is realize that the fact you cannot meet guidelines for the loan that got you to sign up means that it is time to start shopping around again. That loan that got you to sign up does not exist as far as you are concerned. It's not like they are suddenly going to discover that the guidelines allow 5% higher debt to income ratio. If your loan officer is not a complete bozo, they will have gone over alternatives with the underwriter before telling you about the difficulty. If there's something they can do with a little bit more paperwork or a little more income, they're going to ask you if maybe you have the paperwork, or if you make $500 per year in some other fashion. A good loan officer told you about the loan because he believed you would qualify, but you don't. A bad loan officer told you about the loan because he thought he could use it to get you to sign up, and then pull a switcheroo on you once he had the originals of all your paperwork and control of the appraisal that you've already paid for. There really is no good way to tell for sure. In either case, you are back to square one - shopping your loan. I would also think twice about staying with the same loan provider. He's told you about one loan he couldn't do to get you to sign up. Why not two? At a minimum, I'd want a good back up loan.
So being told you don't qualify for the loan you thought you were going to get is always a sign that you need to start shopping your loan around again. That's why you don't ever give a loan officer your originals of anything. Even if somebody brings me an original, a copy is just fine and I can hand the original back. The only paperwork I need the originals of is the loan paperwork - the application I fill out and have you sign, and the disclosures associated with it.
Now I mentioned the appraisal, and you need to be careful here too, so that you don't end up paying for two appraisals. Now every time I write something about controlling the appraisal, some appraisers who want you to pay for two appraisals come on to the site and start defending their interests (i.e. $ in their pocket). Well, a good loan provider who fully intends to deliver the loan he talks about has no problem promising in writing to release the appraisal if he can't do the exact loan he talked about. Once the appraisal is released, it only costs a re-typing fee (about $100), not a whole new appraisal fee, to take your loan somewhere else. Without a release, you have to pay for a whole new appraisal - so you're out the money for two appraisals. But don't choose an loan provider because they will front money for an appraisal. I've dealt with Loan Providers Who Will Pay For Your Appraisal before. One way or another, you are paying for that appraisal. Not only are you paying for that appraisal, you are paying for the appraisal of everyone who canceled their loan, too, and a good margin on top of that.
Caveat Emptor
UPDATED here
Carnival of Personal Finance Recommended: 1st million at 33 (thinking about money other than college in a 529), Ask Uncle Bill (how to get through college debt free - but speaking from experience, it is work!)
Carnival of the Capitalists
This must be some new definition of the word free with which I was previously unacquainted: Venezuela's Chavez tells Washington "go to hell"
A State Department spokesman on Friday described Chavez's proposal to allow presidents to rule by decree as "a bit odd" in a democracy.
"That is a sacrosanct legal authority of Venezuela. Go to hell, gringos! Go home! Go home!" Chavez said during his weekly Sunday broadcast. "We're free here, and every day we'll be more free."
Free to follow Chavez' decrees, no doubt, and if they don't desire to do so, free to be beaten, imprisoned, or shot.
Chavez also plans to alter the nation's constitution, rewritten in 1999 following a campaign Chavez himself led, to boost state control over the economy and remove a two-term limit for presidents.
Free to do whatever Chavez wants this week, free to do his bidding as long as he lives and the bidding of his chosen successor after that...
Murder of outspoken journalist tests Turkey's democratic gains
Turkey's Islamists have been fighting a battle against the secular constitution since it was enacted in the 1920s. Furthermore, Kemal Ataturk was a remarkable man, but he was also a proud Turk, and those secularists fighting both the Moslem hard-liners and Turkish pride are having a rough go of it:
The journalist, Hrant Dink, was a vocal critic of Turkey's treatment of its religious minorities and had been particularly outspoken against the government's policy of rejecting claims that the mass killings of Armenians by the Ottoman Turks in 1915 was genocide. He was shot in broad daylight just outside the offices of the bilingual Turkish-Armenian newspaper Agos, where he served as editor.
"A bullet has been fired at democracy and freedom of expression. I condemn the traitorous hands behind this disgraceful murder," Prime Minister Tayyip Erdogan said on television soon after Mr. Dink was murdered. "This was an attack on our peace and stability."
So at least the Prime Minister said the correct words after the incident, and it sounds like he intends to follow through. Turkey is the Islamic country which has most confronted the issue of separation of church and state, and also one of the countries in the region where minorities are the most free (they can't say as much about minority civil rights in some european countries).
I wish them well.
A very serious accusation: More evidence of Taliban leader hiding in Pakistan
A captured Taliban spokesman says Mr. Omar is hiding in Quetta, the capital of Pakistan's Balochistan Province, under the protection of Pakistan's intelligence agency, the Inter-Services Intelligence (ISI).
I am inclined to believe it, given Pakistan's political situation, as well as previous reports.
Why some Democrats worry that Clinton can't win
The problem both parties face today is that in both sets of primaries, the odds are stacked against the candidate that has a better chance in the general election. I don't think there's anybody but Hillary that can stop Hillary from getting the Democratic nomination, but the top Republican candidates (McCain and Giulani) outpoll her among the electorate at large. Problem is, I don't think either McCain or Giulani will be the Republican nominee when the dust settles. I don't think I've made any secret of the fact that I disapprove of Ms. Clinton, but there are people in the race that could cause me to vote for her if they won the Republican nomination.
What could she do to convince me she's worthy of being president? Something unpopular with her core voters but nonetheless necessary for the country. Defend the vote she made authorizing the Iraq attack. Champion social security and entitlement reform. You get the idea. In eight years, her husband failed to lead the country where it needed to go once. I'm not happy with the prospect of another four to eight years of go where the media blows, and in the case of entitlement reform, we are at a stage where further delay may move us from something that is economically survivable to something that is not.
Related: Clinton Won't Take Public Funds for Presidential Race
``No serious candidate for president in 2008 is going to accept public funds,'' Toner said.
It's just saying that she can attract more in financing without the federal limits. Seems rational to me.
If you live where you can buy Murphy Oil products, you might want to thank them with your wallet: Co. Pledges Millions for Scholarships
Iran Bars 38 IAEA Nuclear Inspectors
"The IAEA has about 200 inspectors it could send to Iran, so stopping 38 of them will not impede its ability to carry out inspections, at least in the short term," he said. The move "demonstrates Iran's unwillingness to accept the U.N. Security Council mandate that it suspend enrichment."
Really? Next somebody may be thinking that they might want nukes of their own or something...
(Yes, I'm being sarcastic, as it's been obvious to everyone that Iran will do anything it must to create its own nuclear weapons for at least a year)
Dinosaur May Have Resembled the Biplane
WASHINGTON (AP) -- When the Wright Brothers first took to the sky in a biplane, they were using a design nature may have tried 125 million years earlier. A new study of one of the earliest feathered dinosaurs suggests it may have had upper and lower sets of wings, much like the biplanes of early aviation.
Fascinating. Designed properly, biplanes do increase lift, but there are issues that mean monoplanes will replace them above certain weight-cost-power-lift tradeoff points.
"what happens to your equity when the bank forecloses" was a question I got.
The answer is that most, if not all, will be dissipated by the foreclosure.
Let's say you own a home currently valued at $500,000, that you owe $200,000 on it, and that you have a 6% loan. Now, for whatever reason, you can't make the payments, and for whatever reason, you don't sell while you have the opportunity before the trustee's auction.
In California, you are going to be four months behind before the Notice of Default happens. So that is four payments of $1200. Furthermore, when you are fifteen days late you owe a 4% penalty, or $48, and when you are thirty days late, the missed payments start accruing interest. So at the point that the Notice of Default is possible, you owe $204,777.83.
From Notice of Default to Notice of Trustee's Sale is another 60 days, but before that happens, the bank is going to hit you with $10,000 to $15,000 in administrative fees for going into default. Check your contract; it's in there. Let's say $12,000, and now you owe $216,777.
Add another two months of delinquent payments, and penalties as of 15 days after. So as of the time the Auction actually happens, you owe $219,447. Furthermore, to make the auction happen, they will charge you about another $15,000. This covers the expenses of making the auction happen, of which the most noteworthy is the appraisal. At this point, you owe $234,447.
The appraisal bears special mention. Not only is there zero pressure to get a good value, the bank wants that appraisal to come in nice and low. They want the property to sell at auction, and if nobody bids 90% of the appraisal price, then they own it and have to go through the rigamarole of hiring an agent and selling it. So that appraisal is going to come in as low as is reasonable, to maximize the chance of it selling at auction. Every once in a while questions about low appraisals at trustee sales hit the site. The short answer is Microsoft Standard: "It's not a bug, it's a feature!" and from the bank's point of view, it is. So even though the property might sell for $500,000 in the normal course of things, the appraisal might come in at $440,000, meaning that someone has to bid $396,000 in order to buy the property at auction. The appraisal might be even lower, but let's say $440,000.
If someone bids $396,000 at auction (assuming they actually are able to consummate the transaction), they own the property. Less transfer costs, the bank gets maybe $380,000, of which the note is now for $234,000, and $300,000 of equity has dropped to $146,000.
But that's not usually what happens. What's usually happened is that the owners have financed it out to at least $375,000, hoping to be able to stave off foreclosure, and by similar math, they now owe roughly $425,000. How much do they get when the bank only got $380,000?
If the property doesn't sell at auction, the bank now owns it. Now they have to hire a listing agent, and offer a cooperating buyer's broker percentage, and while the listing agent looks for a buyer, the money owed keeps earning interest. Let's say the property eventually sells for $410,000, and the bank spends 7 to 8 percent of that getting it sold, so that their net is maybe $380,000. Even if you originally owed $200,000, by the time everything is said and done, you might owe $250,000 or more, leaving perhaps $120,000 coming back to the original owner.
Now, if the owners were to short-circuit the whole process by selling successfully for that same $410,000 (almost 20% less than comparable properties might sell for) before the trustee's sale happens, and if they spend that same 7.5% to get it sold, they get about $380,000, of which they'll get to keep approximately $160,000, more than it is likely they will keep under the best possible outcome if the property went to trustee's sale.
So if you cannot afford your payments, and you're looking down the road at a trustee's sale, it is usually in your best interests to get the property sold before that happens. The lenders will generally be as accommodating as they reasonably can if you ask them and keep them in touch with what is going on. They don't make money on foreclosures; they don't want to foreclose. Thanks to California's Home Equity Sales Contract Act, once the Notice of Default hits, you are unlikely to be able to do business with investors except on an "emergency sale for 60% of value" basis (that being about what the those "Cash for houses" folks offer), so the sooner you act, the more money you will likely come away with.
Caveat Emptor
UPDATED here
Q and O has two excellent articles detailing the flaws in the proposed resurrection of the fairness doctrine. The first goes into details on the political games at the heart of why they want to do it, but the second dynamites the dynamic completely. Given an individual issue, there are usually a lot more than two opposing points of view. So depending upon the political preferences of the station management, you could see a rational response that's definitely on the Republican side of the question balanced with a right wing kneejerk nutjob. Or a rational idea on the democratic side balanced with a complete raving lunatic leftwing idiot (okay, so I repeat myself - twice). If the station management is a little more sophisticated (as many liberal television stations and networks have been), they get some reasonably mainstream viewpoints on their side, then balance it with some complete extremist on the other, alienating their audience from what may be a stronger, better argument if presented with equally mainstream dressing. If an issue is "non-partisan" as so few are, editors and producers can simply pick the opposing viewpoint that either disagrees with theirs the least, thus framing the debate in terms of whether they should get 95% or 100% of what they want, or by choosing the opposing viewpoint from the extremists that can always be found, who express their disagreement in such a way that turns the vast majority of the audience away from their viewpoint.
Ronald Reagan was correct to get rid of the Fairness Doctrine. Let's leave it where it belongs.
Mindboggling. 22% of polled Americans want the "surge" to fail, and 15% more don't know if they want it to succeed. I can envision precisely five explanations:
1. Those polled did not understand the question
2. Those polled understood the question, but are so politically partisan that they believe the casualties to 150,000 American troops are less important than having George Bush's strategy fail.
3. Those polled included 37% non-citizens, or 37% with loyalties to some other place on the globe, not the United States. If they were somehow in the United States, our illegal immigration problem must be worse than we thought (Remember that if they were here legally, INS would know about it and report their numbers).
4. The polling was conducted in Al-Qaeda headquarters, the UN General Assembly, or some other non-representative sample of places.
5. Those polled thought the question had to do with political approval, not actual success if implemented.
If I had to bet, my money would be on number 5, those who don't realize that the President already has all the authority needed to actually implement the surge proposal, but wants to "sell" the rest of the nation to give it the best possible chance.
Given what I have encountered in the way of "civil debate" lately, 2 remains a real possibility.
I'm truly ambivalent about the surge. If there is some real difference the extra troops can make by being there for a few months, yes, I'll support it. But my best understanding is that they would just increase the number of available targets, and that the important change that may lead to success has been getting the Iraqi government to sign off on new rules of engagement while cracking down on the militias and extremist clerics, such as Sadr, instead of sheltering them because they have friends inside the government. Since that's already happened, that is most likely why we've gotten all the good news from Iraq these past seven days or so.
(click for Part 1 of Save For A Down Payment or Buy Now?, which deals with the basic question of how well saving for a down payment increases affordability)
But suppose, instead of waiting because you can't afford the payments now, you buy a $250,000 condo now - and then sell it for your down payment later. In other words, you buy what you can afford right now instead of waiting and saving until you can have the home of your dreams. Then at some later time you sell the condo for the down payment on the home you really want.
Let's look at the trade-offs for the condo. I'm going to assume that the condo's equity is the sum total of the saving you are doing, and I'm going to manipulate rents until I get $833 per month cash flow difference (you $10,000 per year savings). This yields a monthly rent of $977.46. You can't rent $250,000 condos around here for $1000 per month, but we'll stick with the situation I figured even though the argument in favor of buying the condo is far stronger. Let's also assume it costs 7% of the value to sell the property, make allowances for property taxes, HOA fees, etcetera. It'd be a bear if I didn't already have the spreadsheet done, but here are the results:
| Year 0 1 2 3 4 5 6 7 8 9 10 | Value $250,000.00 $262,500.00 $275,625.00 $289,406.25 $303,876.56 $319,070.39 $335,023.91 $351,775.11 $369,363.86 $387,832.05 $407,223.66 | Monthly Rent $977.46 $1,016.56 $1,057.22 $1,099.51 $1,143.49 $1,189.23 $1,236.80 $1,286.27 $1,337.72 $1,391.23 $1,446.88 | Equity 0.00 15,431.56 31,674.53 48,772.18 66,770.15 85,716.58 105,662.21 126,660.56 148,768.08 172,044.30 196,552.03 | Net Benefit -17,500.00 -13,443.41 -9,518.73 -5,769.20 -2,244.10 1,000.56 3,901.27 6,386.11 8,373.86 9,772.91 10,480.08 |
Now, I have to admit this seems marginal. You've only got an extra $10,000 in your pocket after 10 years. So you sell the condo and buy your house, and plugging these numbers into the affordability spreadsheet improves the affordability of the house you really want by 8% in only 8 years. Nonetheless, this is 2.5 times the affordability increase afforded by investing the money.
Now let's consider the situation as it really exists. That $250,000 condo rents for about $1300, which makes a big difference to what you save. It's like taking the previous situation, and adding $322 per month to your investments as well. Here's the numbers for the condo, adding the investment, and coming up with a total.
| Year 0 1 2 3 4 5 6 7 8 9 10 | Value $250,000.00 $262,500.00 $275,625.00 $289,406.25 $303,876.56 $319,070.39 $335,023.91 $351,775.11 $369,363.86 $387,832.05 $407,223.66 | Rent $1,300.00 $1,352.00 $1,406.08 $1,462.32 $1,520.82 $1,581.65 $1,644.91 $1,710.71 $1,779.14 $1,850.31 $1,924.32 | Equity 0.00 15,431.56 31,674.53 48,772.18 66,770.15 85,716.58 105,662.21 126,660.56 148,768.08 172,044.30 196,552.03 | Savings $0 $4046.11 $8515.91 $13453.74 $18908.64 $24934.73 $31591.84 $38946.03 $47070.31 $56045.30 $65,960.08 | eq+sav $0.00 $19,477.67 $40,190.44 $62,225.92 $85,678.79 $110,651.31 $137,254.05 $165,606.59 $195,838.39 $228,089.60 $262,512.11 |
Now let's paste these last numbers into the affordability sheet and see what we get:
| Year 0 1 2 3 4 5 6 7 8 9 10 | available $0.00 $19,477.67 $40,190.44 $62,225.92 $85,678.79 $110,651.31 $137,254.05 $165,606.59 $195,838.39 $228,089.60 $262,512.11 | price of house $500,000.00 $525,000.00 $551,250.00 $578,812.50 $607,753.13 $638,140.78 $670,047.82 $703,550.21 $738,727.72 $775,664.11 $814,447.31 | payments $3,631.97 $3,670.64 $3,709.34 $3,747.86 $3,786.00 $3,823.49 $3,864.42 $3,928.79 $3,993.62 $4,058.65 $4,123.58 | affordability 1.00 1.02 1.04 1.06 1.08 1.10 1.12 1.14 1.15 1.17 1.18 |
So we see that this strategy has increased the affordability of the house you really want by 12% over only 6 years, holding background assumptions constant. This is twice again the affordability increase rate from the last example (2%/year as opposed to 1), and so almost five times the affordability increase rate of just saving for a down payment. Furthermore, those payments on your condo are mandatory, and the increases in value happen of their own accord, whereas most saving programs run by individuals falter a bit over time, nor is there any such thing as a 10% return per year tax free. In short, I'm comparing a real world real estate investment with a hopelessly idealized other investment. Saving for a down payment makes comparatively little sense unless you are not yet in a position to buy, either due to stability, insufficient income to buy anything, or because your situation does not permit 100% financing.
Taken all together, this forms a powerful argument for not waiting until you can afford your dream house, but buying what you can afford as soon as you are in a position to do so with the intention of trading up later. Delaying means you cut the later years off of the results, not the earlier. The benefits to real estate don't start until you put your foot on the ladder. If I had known this when I was in my twenties, I'd be millions of dollars better off today. So plan ahead, and start working towards your goals now. You can never go back in time with what your figure out later, or with the effort you expend later.
Caveat Emptor
UPDATED here
Okay, so it's not really schadenfreude, because it's not misfortune - these people did it to themselves.
Today's Wall Street Journal has a story (page d6 maybe - I got it from a fax)
If you are a subscriber, go to the WSJ site and search for "Ruling Faults Lender in Option ARM suit"
I won't repeat more than the high points lest I violate copyright, but basically this bank was selling negative amortization loans by pretending that it was a fixed rate loan at the nominal rate. The ruling makes clear that the lender had a responsibility to make it clear that only the payment is fixed. The court ordered the mortgage rescinded. Observers anticipate many similar lawsuits in the future (no kidding!)
I have had a number of people bring me sales pitches that they thought were for other types of mortgage due to the way the loan officers phrased things, but were really pitches for negative amortization. I wrote about one such couple in Games Lenders Play (Part IV). These people had no clue that these mortgages they were being pitched were negative amortization, with all their problems. Given my comparatively low traffic level and the fact that people keep being conned to themselves, I somehow doubt that these are the only people out there who have been burned.
Flying their own planes saves time
Well, if you have to get to the airport 3 hours early for commercial aviation, that puts you 500 miles away in a small aircraft - much further than it sounds if you're thinking driving distance - and then you lose another 45 minutes to an hour getting your luggage. Not counting connecting flights and waiting for them.
On the other hand, general aviation is much more difficult than driving, and mistakes that will make you have to pull off to the side of the road in a car can kill you in an airplane. You need to be involved every minute with the plane, and maintain it, and prepare painstakingly for every flight. Buying the plane is also not for the weak of wallet. Back to the first hand, flying is not only rewarding, but fun, even while you're working your backside off.
U.S. plane manufacturers shipped 2,024 single-engine piston planes in 2005, up 19% from 2004. The industry expects an increase when 2006 numbers are tallied, and the same number or more this year.
But that's a long way from 35 years ago, where they delivered something like 20,000 per year. The ending of VA benefits for learning how to fly played a role in the decline, but thing that killed the industry was unlimited liability of the manufacturers. Cessna, Piper, and Beechcraft were once the three largest manufacturers of light aircraft in the world. No longer. Cessna and Piper shut down production of single engine aircraft completely in the eighties due to liability issues. When you're liable for the result when somebody buys the plane running it into the side of a mountain 12 years later, it makes it tough to do business. I'd guess that the costs of litigation still forms a large part of the price tag of new aircraft, as the prices I remember are much lower, and the article tends to confirm.
"Well, the Anvil is falling at Mach speed and half a second from smashing everything, maybe I had better say something":
Bernanke: Budget action needed before "storm"
Calling the coming entitlement disaster a "storm" is like calling a Cat V Hurricane "a little wind"
An email asked a question I should have thought to answer a long time ago, and the answer may surprise a lot of folks. I've been vaguely aware of this for a couple of years, but I was amazed how strongly the numbers solidified my views!
My wife and I aren't ready to buy a property yet, but we are trying to plan how much to save for our down payment. You've mentioned that there's a spectrum from nothing down to 20+% down broken down by 5% increments, but how do you choose where to be on that spectrum? I can see that there are tradeoffs between the amount you have to save, the cost of your mortgage and the like, but I don't have a good way of thinking about those tradeoffs. And, since we're in the DELETED area, 20% down could easily get into the six figures, so it can be quite intimidating.
Given the way leverage works in even a slightly appreciating market, it is generally to your advantage to buy as soon as 1) You are sufficiently stable in your employment and expect that you're going to be in the area at least another three to five years, 2) You have enough of a reserve that the first minor bump in the road will not lead to disaster, and 3) You make enough to afford the payments. However, what usually happens is that people get a raise, a promotion, or a new job, or more often, they get married or have a baby and that is what sets their thinking on the road to buying a home.
Let's consider a $500,000 property and an 80% first trust deed with an appropriate piggyback 30 due in 15 second if needed, since that is generally returning more favorable rates than a Home Equity Line of Credit right now. Picking a random lender from a couple days ago and thirty year fixed rate loans, I've got 5.875 for about 9/10 of a point plus closing costs, or about $7100 total cost. But there are potential adjusters - and relevant to this situation, having subordinate financing for 100% CLTV adds one full discount point ($4000 in this case) to the first mortgage, or you can drop down to 6.25 for the same cost. 95% financing only adds 1/4 of a point in the same situation, or you can get a 6% even for the same cost. At or below 90% CLTV, there is no add to the first mortgage. If we're at 80% with a $100,000 (20%) down payment, the 5.875 first is all there is. Taking dead average credit scores (720) with this same lender, the closing costs are $500 (flat) when you do the second concurrently. 85% CLTV would be an 8% second on $25,000 for a down payment of $75,000 (15%) plus closing costs. 90%CLTV would be $50,000 down payment (10%) and leave you with a $50,000 second at 7.375%, benefiting from a bump down in rate for hitting a certain dollar value. 95% CLTV requires a $25,000 down payment and leaves you with a $75,000 second at 7.75%. 100% CLTV (no down payment) leaves you with a $100,000 second at 8%. It would be 8.25, but you've hit another economy of scale break point.
Here's a table:
| CLTV 80 85 90 95 95 100 100 | 1st TD 5.875 5.875 5.875 5.875 6.000 5.875 6.25 | 2nd TD n/a 8.00 7.375 7.75 7.75 8.00 8.00 | Cost $7100 $7600 $7600 $8600 $7600 $11600 $7600 | 1st pay $2366.16 $2366.16 $2366.16 $2366.16 $2398.21 $2366.16 $2462.87 | 2nd pay $0 $183.45 $345.34 $537.31 $537.31 $733.77 $733.77 | interest $1958.33 $2125.00 $2265.63 $2442.71 $2484.38 $2625.00 $2750.00 |
So you see that having a down payment is a very good thing. Now this is for a fairly ideal situation. If you are in a stated income situation, the rates are slightly higher and step somewhat more steeply. If your credit is significantly below average, the rates start higher and step up more steeply still. It gets rough if both apply.
However, this doesn't take place in a vacuum. Let's say you can save $10,000 per year, and earn 10% tax free on what you save. But while you do, housing prices are still going up. Let's assume 5% per year on average. We will also assume that you can get a 6% for the first and 8% for the second whenever you buy, and that taxes at 1.2% of value per year, here's the projected situation:
| Year 0 1 2 3 4 5 6 7 8 9 10 | down $0.00 $10,500.00 $22,050.00 $34,755.00 $48,730.50 $64,103.55 $81,013.91 $99,615.30 $120,076.83 $142,584.51 $167,342.96 | price $500,000.00 $525,000.00 $551,250.00 $578,812.50 $607,753.13 $638,140.78 $670,047.82 $703,550.21 $738,727.72 $775,664.11 $814,447.31 | CLTV 100.00% 100.00% 100.00% 95.00% 95.00% 90.00% 90.00% 90.00% 85.00% 85.00% 80.00% | payments $3,631.97 $3,736.52 $3,842.45 $3,949.44 $4,057.11 $4,165.04 $4,272.73 $4,379.60 $4,484.99 $4,588.14 $4,694.16 |
Where payments is the total of mortgage and monthly tax payment pro-rated when you buy. Examining that column, we see that this is an argument against waiting. In fact, assuming a 3% (compounded) raise per year, the property is only 4% more affordable in year 10 with a $167,000 down payment! This neglects rises in rents and other costs of living!
UPDATED here
(Here is Part 2 of Save For A Down Payment or Buy Now?, which tells one way to increase affordability more and faster)
Observation: There is an urban legend about how if you throw a frog into boiling water, he'll jump out, but if you put the frog in while it's cold and gradually heat it, he'll stay and get cooked. This isn't true, of course. If you throw a frog into boiling water, he will die a terrible, agonizing death. Nor will the frog stay in the slowly heated water past the point at which it begins to be uncomfortable. Frogs aren't that stupid.
But people are! Cases in point: terrorism, illegal immigration, our creeping nanny state, tax withholding, welfare, the maze of regulations that we live under that make it impossible for any person to live within all of them, all of the wealth transfer and rent seeking behaviors that our government enforces upon us... How many do you want?
Evidence against allegations that we live in a police state: Bush won't reauthorize U.S. eavesdropping program
The president has determined not to reauthorize the Terrorist Surveillance Program when the current authorization expires," Gonzales wrote in a letter to congressional leaders that disclosed the administration's shift in approach.
Bush has reauthorized the program every 45 days, and the current authorization is mid-cycle, a senior Justice Department official said. Gonzales said a recent secret-court approval allowed the government to act effectively without the program.
No matter how effective the alternatives are, police states do not do this.
Death Spirals are "stable" Castro successors keep Cuba on stable track. So are dead people, dead economies, dead animals...
Conservatives? On network TV? It's true. but the story also notes that the writers are having trouble maintaining the character's conservative orientations.
Armies of Liberation reports on yet another legacy of dictatorial rule in Yemen: Malnutrition in children.
A while ago a reader gave me a heads up that Illinois HB 4050 was hurting residents of certain poverty stricken Illinois Zip Codes. Now I have to pick on my own state:
California law generally requires special handling of sales transactions to protect homeowners in foreclosure. This law, called the Home Equity Sales Contract Act, generally applies to transactions that meet all of the following four conditions: the property is one-to-four family dwelling units; the owner occupies one of the units as his or her principal place of residence; there is an outstanding notice of default recorded; and the buyer will not use the property as a personal residence. The Home Equity Sales Contract Act does not apply if one of these four conditions is unmet. If, for example, a seller occupies a property in foreclosure, but the buyer will be occupying the property as his or her personal residence, the home equity sales law does not apply.
If all four conditions are met, however, the buyer must use a home equity sales contract, such as the C.A.R. standard form "Notice of Default Purchase Agreement" and attachments. This agreement gives the seller, among other things, a five-day right to rescind the contract. Furthermore, the home equity purchaser cannot be represented by an agent. More accurately stated, the law requires a buyer's agent to be bonded by an admitted surety insurer, but C.A.R. is unaware of any insurer currently offering the bond.
Actual Code Here
This is so brain damaged it has to be the idea of some clueless person out to save the world without first stopping to consider the Hippocratic Injunction to "First, do no harm."
Now, in the business, the term "equity sale" or "equity purchase" is most commonly used in conjunction with a sale subject to existing trust deeds. So this is a significantly different meaning to a similar phrase. Keep in mind that there are four conditions that need to be met:
1. Residential property (1-4 units)
2. Owner occupies one unit
3. Notice of default recorded
4. Buyer does not intend to occupy.
But what happens with such properties? Who buys them? Investors, that's who. Guess what? The owners want them sold! What happens if they don't sell? They go to auction, and the owner basically gets nothing, whether the property sells at auction or it doesn't, in which case the lender now owns it.
Furthermore, they're requiring that the buyer's agent have a bond that is not available, and has not been for ten years. So if whether they're working with a shark or with an investor who is actually going to give the people a decent price, the buyer's agent cannot be compensated. So what are most buyer's agents going to do? Answer: Wait until after the trustee's sale! As the buyer's agent, they have no fiduciary responsibility to that seller, and no ability to get paid. But the owner wants to sell before the trustee's sale. The chances of them getting anything from a trustee's sale or afterwards are about equal to one my grandfathers giving birth to triplets.
Now, this does theoretically create an opportunity for certain people who might be willing to live in the property to buy for lower prices, since investors are (mostly) out of the picture. So we are robbing Peter (the current owners) to pay Paul (in search of new housing). There are also some truly outstanding issues. What happens if my buyer client is lying to me about whether they intend to live there? The contract is already written, the terms of the transaction set, and the buyer's agent can't back out at the last minute when they change their mind about whether they're going to live there. Also, what happens if everything is fine when the contract is written, but the lender drops a Notice of Default on the sellers they day we're set to close?
In the current market, most of the folks in default do not have large amounts of equity. Matter of fact, the typical seller who is delinquent is really hoping that the lender will sign off on a Short Payoff. This is not shark investors swooping in and buying granny's $500,000 property for $80,000. With the number of people there are pushing Reverse Annuity Mortgages, that's not going to be the case any time in the foreseeable future. Granny can get a RAM, after which she can last long enough to sell for a good price. Instead, what's going on is that the properties are going to foreclosure, costing the lenders more money, adding to the fees the owners pay, and lengthening the odds against the current owners coming out of the situation with anything. They want buyer's agents on the job, finding these bargains for their clients so that the sale gets made before the trustee's sale. Keep in mind that the seller is always allowed an agent, and the seller can always say "no," to the offer. Which is preferable: Not getting as much as you might have gotten for a sale under ideal conditions, or getting nothing?
Henry David Thoreau had some words on this situation:
If I knew for a certainty that a man was coming to my house with the conscious design of doing me good, I should run for my life, as from that dry and parching wind of the African deserts called the simoom, which fills the mouth and nose and ears and eyes with dust till you are suffocated, for fear that I should get some of his good done to me -- some of its virus mingled with my blood. No -- in this case I would rather suffer evil the natural way.
Caveat Emptor
UPDATED here
Real Clear Politics: Sandy Berger: What Did He Take and Why Did He Take It?
Maybe it's because I live in San Diego, and my father started taking me to the zoo before he taught me math or chess, but I pay attention to things like this: Scientists try to save world's rarest creatures.
Here is the EDGE home page. Being lucky enough to have the San Diego Zoo, Wild Animal Park, and Sea World all within an hour means I've been lucky enough to have seen 27 of the 100 species on their list. I was disappointed to not to see the Guam Rail on their list. It was extinct in the wild; when I did a web search I found that page that indicates it has been re-introduced, much like the California Condor, so when we pass the San Diego Zoo's in the future, now I can tell my girls that this may be a success story like the California Condor someday, rather than to take a good look as it may be one of the last anyone gets.
We are not owners, but stewards. Whereas historically species have been going extinct since the beginning of life on earth (one example that had nothing to do with Western Civilization), the demands humans place upon earth's environment mean that we need to do what we reasonably can to preserve the other species that share the planet with us.
The next time somebody puffs out their chest for having "spoke truth to power" for having insulted George W. Bush, consider that he has done exactly nothing to political opponents and critics of the administration in six years. Then compare and contrast to this news from Venezuela.
Chavez says he fully respects freedom of speech, and that turning over the channel's frequency to a "community" station will help democratize the airwaves, providing "communication power to those who almost never have a voice."
Venezuela's radio dial now includes hundreds of mostly state-financed and Chavez-friendly "community" stations, and three state-run TV channels have been launched since Chavez took office. They feature musicians singing songs about "El Comandante," segments calling opposition leaders CIA agents and documentaries about Argentine-born revolutionary Ernesto "Che" Guevara. Cuban-produced cartoons feature peasants who prevent invading soldiers from seizing a palm-dotted island.
Funny how all these "community" stations just happen to hew to exactly the line Chavez most wants them to.
Two of those four channels have since toned down their criticism, while RCTV and Globovision have stayed their course despite sometimes-violent demonstrations. During pro-Chavez protests in 2004, an Associated Press reporter watched as a Chavez supporter fired shots at RCTV's studios while others rammed an ice cream truck into the wall, then set the truck afire.
Somebody should tell those other two channels about the definition of appeasement: Being nice to an alligator in the hopes it will eat you last.
House votes to lift reverse mortgage cap for FHA
Not the dollar value, but the number it's permitted to manage, according to the article.
Hong Kong limits pregnant Chinese women
Many come to evade China's one-child policy, take advantage of higher quality health care or earn Hong Kong residency rights for their babies.
See also Anchor Babies
No softies in Canada's campy Pillow Fight League
The bigger picture involves a TV deal. Case says he has already turned down bids that didn't offer the mix of attention to the action and characters that he says makes the league more of a draw to the arts community than the mud-wrestling crowd.
Television always aims for the lowest common denominator, even the networks have to divide by zero. Assuming it really is an "art-house movie" crowd, if they were willing to watch what's on TV for free, that's where they would be.
Carnival of The Insanities Recommended: 10 things to think about for 2007
Carnival of Personal Finance
Carnival of The Capitalists Recommended: Econbrowser (Whether the New Deal prolonged the Depression), Execpundit (issues with diversity versus EEO and Affirmative Action
On the other hand, some of the ignorance I saw this week causes me to re-issue my standard warning: Just because it's posted to a carnival doesn't mean the advice contained in a carnival is worth anything.
Let's be careful out there: Do-it-Yourself Phishing Kit Found Online
If you get a "problem with your account" email, it should mention you by name. Even if it does, never click the link, and taking sanitation measures is advisable. If you must check out your account, close your browser first, then start it back up and go to the site via your usual method (bookmark or URL entry).
Seems to me that I get at least half a dozen "problem with your account" spams per week, and it is rarely for places that I even have accounts, but for people who have more accounts on line than I do, it may be more likely. When I can debunk 99% with "I don't have an account there," and 99% of what remains with "They don't know about this email address" it makes it less challenging to resist the urge to panic when I get one allegedly from a place where I do have an account and to an email address they know about.
One of the ones that's becoming standard is the eBay complaint. Somebody sends an email alleging someone has complained about your business practices to the eBay tracking. Once again, do not click the link in the email. Open the URL yourself via bookmark or manual entry. It is comparatively easy to make the link looks like it goes to one place and actually sends you somewhere else - which then mimics the appropriate website. People wouldn't be willing to buy such a do it yourself kit if it weren't profitable. Don't be one of the people that gets burned.
This is something that often happens with highly appreciated properties where the owner can no longer keep up the payments, they get hit with a notice of default, and along comes Joe or Jane seemingly riding to the rescue on a noble white steed, offering to buy the owner out of the property "subject to" existing deeds of trust.
This is a terrific position for the buyer to be in, and a rotten position for the seller. Nor are the prices usually very good for the seller - that white knight usually ends up looking a lot more like a thief. So why does it happen? Why does the seller agree to it?
Here they are sitting on this highly appreciated asset, with loads of theoretical equity, and they cannot make the payments. If they go through the foreclosure process, chances are better of flying to the moon by flapping your arms than of getting any of the equity back out. Yes, in California it's got to sell for at least 90% of appraised value or it doesn't sell at auction, in which case the lender owns it. But those appraisals are intentionally low, because the lenders don't want to own them. Furthermore, all of the payments that weren't made, and the interest on them, all gets piled into the loan, as do fees for the default process and the trustees sale. If you have a mortgage loan, read your contract. Sight unseen, I'll bet you a penny there's a clause in there saying they can sock you for "reasonable" fees in the event of default or foreclosure.
So you have a $450,000 property which you paid $120,000 for and owe $320,000 on, but something has happened and now you can't make the payments. You put it on the market for $450,000 and don't get any takers. Then along comes someone and says, "I'll take over your payments and pay you $20,000 if you sign the property over to me."
This is certainly a gray area, legally. The loans have "due on sale" clauses, and the lender can call the notes as due in full in such situations. The buyer basically tells them, "tough", knowing that if they foreclose, the lender ends up in the situation they didn't want to be in in the first place, of owing the property, not to mention that the person who bought "subject to" can cost them a lot more money by delaying it in court, and there's a good chance they can win the case. Meanwhile, if they don't act quite so hard-nosed, this new owner is making the payments. They have the option of refusing the payments, but then we're dealing with the foreclosure process, and in the meantime, the checks for payment are there every month. What do you think most lenders will do? They will accept the payments!
Notice, however, that I didn't say the payments get there on time. This is the second raw deal that the seller has to swallow. The buyer's cash flow is a little tight, and the payment gets there 40 days late on a consistent basis. Who gets marked late? Whose credit gets dinged every time this happens? Not the buyer's. That buyer never applied for a loan with that lender on that property, the lender doesn't have their signature on a contract that says, "I agree to pay..." It's the seller's credit that gets hit. Kind of a nice situation to be in, no? Make a late payment any time you feel like it and your credit doesn't suffer! Not only that, but since the loan is still in the seller's name, the payments don't hit the buyer's debt to income ratio, allowing them to qualify for more loans, with larger payments, than they really should. Trying to leverage their investments like that is one reason why the folks who make a habit of "subject to" deals usually have tight cash flow. They don't want to let the property go into default, but as long as they don't get to the stage of being 120 days late (90 in some places), they have the best of all possible worlds!
Suppose, for whatever reason, it becomes a short sale? Well, since the seller is the one that violated the loan contract, there will be recourse on them, not the buyer. Many times the buyer makes side deals for "pay me" type stuff and manages to make money, or at least get their money back, even though the property doesn't sell for enough to pay off the existing liens.
If you are getting the idea that agreeing to a "subject to" deal isn't the smartest thing in the world, why do buyers agree to them?
Desperation and Panic. They listened to the agent that told them that they could get more money than was likely by market conditions, or they listed with the cheap bump on a log agency that really doesn't do anything to market the property, or they just sat in denial until far too late. Nothing happens instantly in real estate; it always takes several weeks at a minimum to get a property sold, even if you get a fantastic offer on the very first day. In some cases, I can get a loan done in one or two days, but that's not a situation you want to be in, because I don't know anyone who won't charge more in such a situation, and all of the usual loan caveats apply. But for whatever reason, the owners let the situation go too long, let themselves get behind the power curve, and suddenly realize that they are not going to catch up. They are looking at losing the property and getting nothing, so they panic. This is only one of the many reasons why staying ahead of the situation in real estate is so important. At the point where you're looking foreclosure square in the face ten days from now, there's not much else that can be done. I can offer you entire supertankers full of sympathy, and it won't make any difference. So if you're in this kind of situation, get the property on the market quick, price it attractively, and find an agent who will market it effectively, so that you avoid getting into the situation where the shark's offer is the best one you're going to get.
Caveat Emptor
UPDATED here
If that title seems to be damning with faint praise, it's accurate. I'm not going to issue any kind of blanket endorsement for them, but they aren't as bad as I feared when I first heard about them. They are definitely not something that will actually benefit most property owners, no matter how attractive the idea is.
Here's the press release: California Company Announces 'No Mortgage Payment for 12 Months'. Basically, they are promising a period of no payments that can be as little as three months or as long as 36.
So I called and checked them out. I can't find any evidence of the sort of attitude that are present in people who make a habit of selling negative amortization loans, and no evidence of legal shenanigans either (although I'd want to do more research before selling it myself, as I may do in March 2007 when they broaden the availability to brokers).
What appears to be going on is this: You refinance for an amount of money that covers not only what you need for pay off current bills, your current mortgage, put whatever cash in your pocket, etcetera, but also the prospective payments for however many months. The payments are based upon the increased amount, of course! Also, because it's for a larger amount, and hence, underwritten based upon a higher Loan to Value Ratio, as well as possibly Debt to Income Ratio (due to the higher principal amount), it might bump you down one or more categories in the quality of loan, and there will very probably be increased costs attributed to the increased loan amount, including addditional adjustment charges and the fact that these are always cash out refinances, might bump your costs half a point or possibly even more.
The excess goes into an escrow account, administered by a third party, where it earns interest while disbursing the monthly payments to the lender. The account has to be funded with enough to pay principal and interest for however many months you want to be free from payments, of course, and if you're expecting it to earn as much interest as it is costing you, well, I have a bridge in Brooklyn you might be interested in...
It appears that you can attach one of these to basically any loan from any lender. The only requirement is that the period of fixed payments has to be at least equal to the amount of time you want free from having to make payments. This is a very different thing from period of fixed interest rates, and the person I talked to on the phone offered me a negative amortization loan to go with it. I was quite proud of myself for being polite to him after that.
While I was on the phone, I did some price comparison between what's available to me and what they offered. I gave them a scenario of an 80% loan of $280,000 for a 720 credit score on a thirty year fixed rate loan. I've got 5.75 with one point total; they were talking about 5.875 with one and a quarter to one and a half points, although they were pretty slippery about being locked into any kind of actual quote. Considered in the context of the loan I was talking about, that's about an extra $1400 up front, not considering any possible junk fees, and approximately another $440 per year for what is otherwise the same loan. But even if they inflated that at signing by some reasonably standard amount, it's better than a lot of the other loans people are being sold right now.
Yes, it's higher than what I have available. Actually, I expected the difference to be greater. They are not selling great rates at a low cost with this program. What are they selling? Freedom from responsibility! Free Money (or so people think)! No mortgage payments for a year! Let the Good Times Roll!
I've kvetched enough about negam loans, and these really aren't any different in principle, but there is a large difference of degree. The underlying loans really are no different at the root from whatever type of loan you might care to name. At least if you make the underlying loan a good one, you're not being raked over the coals for 8% when you can have less than 6.
This program is, however, taking example of the fact that many people don't think of equity as "real money." But if you wanted to do one in conjunction with a purchase, you'd have to make a down payment at least to match the deferred payments. Is that money "real" enough for you? If you sold the property instead or refinanced for the cash out to make those payments, that money would be in your pocket instead. Is that "real" enough for you?
What does it cost? from their website
5. What is the cost for 12MoDef?
MPD, Inc. will submit a demand to Escrow for the 12MoDef service fee. The fee is $995 for 12 month deferral, $1495 for 24 month deferral or $1995 for 36 month deferral. This cost is typically paid by the borrower.
So in addition to all the regular costs for the loan, and of course, setting aside the equity to make the payments, and the increased interest costs down the line due to your loan amount increasing, this costs $1000 to $2000. I keep saying this, but I was expecting worse.
I am not enamored of some of the marketing tricks they are using to sell these, either. from their website
Miller notes that for clients close to retirement age, the freedom of 12MoDef, allows them to take advantage of "maxing out" their 401K contributions as well.
This must be some new definition of "advantage" with which I was previously unacquainted. Given their logic, this being for short term additional savings just prior to retirement, you're not adding that much, due to the short term nature of the issue in investment terms, you only have only a short period to compound, and in fact, the last time I checked, NASD rules specifically prohibited a licensed investment firm accepting your money in such circumstances. Not to mention it increases your future housing cash-flow requirements by more than the increase in your monthly income might reasonably be. After hauling out a spreadsheet, I couldn't find a reasonable scenario that worked, both in the sense of expected return and being sufficiently low risk to literally "bet the farm" on.
Delay is Denial digging you in deeper. If you can't afford the payments for the house you are living in, you probably need to do something else instead.
What uses do I see for this product? Primarily 1031 Exchanges, where someone may have restricted cash flow but does have a chunk of cash, and similar investment property situations. For investors and speculators, this would be a good way to stretch you leverage, albeit at a significantly increased risk, as should be plain to everyone reading this site by now. The current market is not really right for it, but being able to use equity in properties this way in rapidly appreciating markets might certainly be a way to make more money.
Perhaps there might be other times when it would make sense as well, but I can't think of another situation where it would be something I'd make a habit of considering. Of course, if someone asks me for it, once they're released to brokers, I'm more than libertarian enough to say, "Sign this saying that you acknowledge being told about these downsides and being advised to consult a financial advisor, and certainly I'll do it for you."
Caveat Emptor
UPDATED here
Punitive damages awarded in Katrina case
The Broussards sued State Farm for refusing to pay for any damage to their home, which Katrina reduced to a slab. The couple, who wanted State Farm to pay for the full insured value of their home plus $5 million in punitive damages, claimed that a tornado during the hurricane destroyed their home. State Farm blamed all the damage on Katrina's storm surge.
The article has a picture. That is not a house destroyed by wind, if you'll compare it to the pictures at this website, for instance. Notice how the components are still mostly there, even if they've been turned into matchsticks? here's another. more here. Still more. In every case, the components are still mostly there. In order to get the foundation scrubbed clean like that requires a massive surge of water. It may be possible with sufficiently strong, sufficiently sustained winds, but much more powerful storms than Katrina have failed to produce that sort of result. Katrina wasn't even a particularly powerful hurricane when it hit land - it's just that the levee failed.
As I have said before, Homeowner's Insurance does not cover flood damage. Furthermore:
State Farm and other insurers say their homeowner policies cover damage from wind but not from water, and that the policies exclude damage that could have been caused by a combination of both, even if hurricane-force winds preceded a storm's rising water.
Senter, however, ruled that State Farm couldn't prove that Katrina's storm surge was responsible for all of the damage to the Broussards' home. The judge also said the testimony failed to establish how much damage was caused by wind and how much resulted from storm surge.
This is a standard policy form, and should have been made clear to them at purchase, especially living in a flood zone. If it wasn't, the correct place to file a claim would be with the Errors and Omissions Insurance of the agent who sold them the policy. Of course, that's not "deep pockets", and that agent could be just as sympathetic a figure as the claimants, meaning the jury might not award anything.
The clause on "combined damage with excluded perils" is supposed to prevent wasting money paying lawyers on exactly this sort of charade. The homeowners hypothesize that there was some sort of tornado that did the initial damage, but the fact is that their home would have been destroyed by the storm surge in any case. They needed flood insurance and decided not to purchase it. Sure, the house might have been knocked over first by the wind, but the fact of the storm surge renders that all moot.
Now, I've got loads of sympathy for the folks who lost their homes, but that's no excuse to make insurers liable for things they did not agree to insure when the policy was purchased. Had they known they were insuring that, they would have charged more money for the policies. Had the victims bought a policy of flood insurance, the entire point would be moot.
If you're wondering why homeowner's insurance is so expensive, particularly in areas subject to this sort of concern, court cases like this are exactly why. If you're looking for reasons why insurers cancel policies, refuse coverage, leave the state, or even get out of the business entirely, this sort of case is it. I predict that in a few months, there will be articles all over the place about how hard it is to get homeowner's insurance in the Katrina hit areas, and people whose policy was not renewed, was canceled, or left without coverage when the company stops doing business in the state. Furthermore, no other company will want to step in, and prices of those few who are will be much higher. All of this hurts the people who actually need homeowner's insurance in the area. If you can't get homeowner's insurance on a property, lenders will not lend on it. This impacts property values in a major negative way. It's bad enough for many kinds of construction without this additional hit. If nobody will lend on it, you are limited to loaning the money yourself, or taking whatever cash the buyers have. I don't know what home values are like in the area, although I imagine they're not anywhere like California prices, but whatever they are, I'll bet this is going to cause at least a 50% hit.
I'm certain that this will be a popular decision. "Yeah! Sock it to those (expletive) (expletive) insurance companies!"
It is nonetheless wrong. It will cause major reductions in home values in the area, make homeowner's insurance more difficult to obtain and more costly if it is available, and leave many of those in the area unable to obtain, or unable to afford, homeowner's insurance.
Nor are the insurance companies in any way, shape, or form, the "bad guys" here. That was the Army Corps of Engineers, which failed to do their jobs in properly constructing the levee to withstand things that were within the design specifications. The levee was not over-topped; it crumbled. Nonetheless, from my studies of riparian and littoral rights about ten years ago, my guess is that there is no case against the Army Corps of Engineers or the federal government here.
I hope that the court of appeal has the presence of mind and intestinal fortitude to to overturn both the judge ordered damages and the jury ordered punitive damages. It's a hard case decision to make, but the correct one if they do not want to sabotage the entire system of casualty insurance we have developed in the United States, and along with it, the property values and peace of mind of everybody in the region.
Other information:
According to this place, Allstate already pulled out.
Reminder: My seminar on First Time Home Buyer Programs is tomorrow night, Thursday January 11, at 7 pm.
Judging from reservations (less than 1/4 of the small space), most people know everything important about local first time buyer programs.
This was sent to someone in my office:
Subject: Denver Weather Bulletin
Up here, in the "Mile-Hi City", we just recovered from a Historic event--- may I even say a "Weather Event" of "Biblical Proportions" --- with a historic blizzard of up to 44" inches of snow and winds to 90 MPH that broke trees in half, knocked down utility poles, stranded hundreds of motorists in lethal snow banks, closed ALL roads, isolated scores of communities and cut power to tens of thousands.
FYI:
George Bush did not come.
FEMA did nothing.
No one howled for the government.
No one blamed the government.
No one even uttered an expletive on TV.
Jesse Jackson or Al Sharpton did not visit.
Our Mayor did not blame Bush or anyone else.
Our Governor did not blame Bush or anyone else, either.
CNN, ABC, CBS, FOX or NBC did not visit - or report on this category 5 snowstorm. Nobody demanded $2,000 debit cards.
No one asked for a FEMA Trailer House.
No one looted.
Nobody - I mean Nobody demanded the government do something.
Nobody expected the government to do anything, either.
No Larry King, No Bill O'Rielly, No Oprah, No Chris Mathews and No Geraldo Rivera.
No Shaun Penn, No Barbara Striesand, No Hollywood types to be found.
Nope, we just melted the snow for water.
Sent out caravans of SUV's to pluck people out of snow engulfed cars.
The truck drivers pulled people out of snow banks and didn't ask for a penny.
Local restaurants made food and the police and fire departments delivered it to the snowbound families.
Families took in the stranded people - total strangers.
We fired up wood stoves, broke out coal oil lanterns or Coleman lanterns.
We put on extra layers of clothes because up here it is "Work or Die".
We did not wait for some affirmative action government to get us out of a mess created by being immobilized by a welfare program that trades votes for 'sittin at home' checks.
Even though a Category "5" blizzard of this scale has never fallen this early, we know it can happen and how to deal with it ourselves.
I hope this gets passed on.
Maybe SOME people will get the message. The world does Not owe you a living.
Carnival of Personal Finance Recommended: One Year Exit Plan
Carnival of Investing
RINO Sightings Recommended: Armies of Liberation (Yemeni collaboration with Iraqi Ba'athists)
Ancient Roman road found in Netherlands
The stretch of road discovered in Houten is believed to have connected two forts - Traiectum, which gives its name to the modern city of Utrecht, and Fectio, modern Vechten
I just love history and how it layers!
Breaking the Hold of Hegemonist Doctrine
This guy makes sense.
Still don't feel much like writing. The article I wrote earlier this evening, Just Because You Don't Believe In an Antropomorphic Deity Doesn't Mean You're Not Religious, was written in a pique of severe annoyance with some sanctimonious twits who want to appoint themselves the chosen guardians of public debate. I'm not Christian and I've certainly been annoyed and exasperated by some pigheaded examples of that religion in the past, but just because someone is annoyed does not remove anyone's constitutional rights or the reasons for those rights. Depressed as I am right now, I have even less patience for weak minded selfish fools than usual.
I still miss my little symbiont. Perhaps even more than my parents were, he's a hard loss to take because he and his antics were so much a part of my daily life. I'm coming back; it's to the point now where I can see where jokes might be funny, and by the end of the week I think I'll probably be ready to laugh at some of them. I'm so grateful to my wife for helping me through this that words fail.
One item I could use some help with: Our other dog, Mellon, who is several months younger than Thing was. Dogs are social pack creatures by nature. Mellon has never been by herself in her life, and she's crying when she gets lonely. Neither getting another dog nor allowing her to sleep with us is on the list of options right now. I need to buy a new pillow anyway and I'm considering giving her the old one, because it smells like her favorite human. Anyone have any other ideas, or experience with this particular problem?
Atheists challenge the religious right
"I am attacking God, all gods, anything and everything supernatural, wherever and whenever they have been or will be invented," declares Dr. Dawkins, the famed Oxford professor who wrote "The Selfish Gene."
These offerings are so intolerant of religion of any kind - liberal, moderate, or fundamentalist - that some scientists and secularists have critiqued their peers for oversimplification and for a secular fundamentalism.
Seems to me they are confusing "no evidence for" with "proven false."
The way to approach arguments of a spiritual nature, where there is no objective evidence on any side of the equation, is to require all sides to use data that can be demonstrated. I've cut down more than one fundamentalist who insisted upon, "my holy book tells me..." as a method for building an argument by telling them they are begging the question. I may or may not believe what your holy book says on that particular point, but unless everyone believes it, it's not an acceptable method for constructing an argument. This is one of the reasons I am against allowing religions the use of any force. Furthermore, even if everybody does believe it, the truth does not necessarily adhere to democratic principles. There was a time when everybody believed the world was flat and at the center of the universe. Neither one of those beliefs happens to be true.
But neither is it an acceptable argument to argue against a proposition by saying, "Brand X religious fruitcakes believe in this, and therefore I have successfully discredited it by association with those religious fruitcakes." For one thing, overtly religious fruitcakes have no monopoly upon crazy beliefs, as anyone who has studied the adherents of either communism or fascism will tell you. For another, it's possible that upon this one point, the fruitcakes are correct, no matter how messed up they are otherwise.
Faith is what we believe in the absence of evidence. But when there is evidence, the belief can either be true or it can be false, or it can be in some middle ground between the two. Moslems believe that a man named Mohammed lived on this earth about fourteen centuries ago. No matter how crazy I may believe some of their other beliefs, I'd have to say that on that point, their religion is pretty darned accurate, as documented by any number of outsiders. The existence of the Christian Jesus, under considerable cloud of scientific doubt when I was young, has acquired sufficient collateral evidence to be considered highly likely. Neither one of these proves a thing regarding the rest of the doctrine of either of those two large world religions, but their respective founders appear to have been real people. Neither one of these facts means they were in any objective sense chosen by the higher powers of the universe. I may respect them and their heirs to varying degrees, but that is based upon my personal beliefs, and I don't hold any kind of monopoly over deciding what beliefs are and are not valid. If I am not willing to consider the possibility I am mistaken, evaluate the evidence available, and modify my beliefs where they conflict with that evidence, then I place myself in the the same camp as the Inquisition, those who created the Hindu Kush, and most followers of the various brands of Marxism as a religious nutcase. No deity, no altar, and no worship is necessary; the evidence is incompatible with what they would like to believe, and they have chosen to disregard the evidence. Of course, I happen to believe that if there is some force running the observable universe, then the evidence of what we have managed to observe must be compatible with their intentions and desires and what they want me to believe. This is faith. I am unaware of any evidence against this belief, but faith it remains. I am also unaware of any conclusive evidence in favor of it. When what the holy books or the high priests tells me conflicts with what observable reality, I choose to believe observable reality. When the choice is, as the saying goes, "What are you going to believe, me or your own lyin' eyes?", I'll choose "my eyes" every time. The high priests or those who wrote the holy books most likely misunderstood somehow.
But those who would have us believe that no religion can be correct would have us ignore a large number of undeniable good things and truths that many religions have contributed over time. I object to this sort of thing:
The SCA intends to lobby the new Congress to override a presidential veto on stem-cell research and to repeal land-use legislation and other laws seen as "privileging one religion over other religions or over those who don't follow religion."
every bit as much as I object to school teachers leading a prayer, of whatever religion. I happen to believe that sacrificing potential humans to research potential medical cures is no different in kind from the research performed by Doctor Mengele upon the Jews of Europe in concentration camps. Different in degree, yes. Different in kind, no. I can very much see the point of those who do not wish to have tax money extorted from them at the point of a metaphorical gun (What happens when you don't pay your taxes in full?) to pay for something they see as murder. Here's something else to consider: If you think this research is so worthy, why don't you put your own money where your mouth is? Why don't you convince others to do so voluntarily? There is no law that says the research cannot take place, merely that the federal government won't fund it, with taxes taken at the point of a metaphorical gun, if the life was destroyed after the federal government made its policy known. The State of California alone has allocated three billion dollars, though, through one of the regular mechanisms for such allocations. Methinks the real issue is much closer to rent-seeking ("The federal government has to fund me because I can't convince anyone else to do it, and I need this grant or I might have to go get a real job doing something other people see as economically useful!")
Not all religions worship things they call gods. Some worship the doctrine that there are no gods, and there is no more evidence in favor of that than there is of the opposite viewpoint. I have encountered many people who worship Marx, or the doctrine that there is no god (or are no gods), every bit as irrationally as the most fundamentalist Christian or Moslem.
Their "blasphemy challenge" calls on young nonbelievers to create videos in which they renounce belief in the "sky God of Christianity" and upload it on the site; in return they'll receive a free documentary DVD, "The God Who Wasn't There," which includes interviews with Dawkins, Harris, and others. RRS is publicizing its campaign on 25 popular teen websites.
Question: Why are they explicitly selecting christianity for this? Is their offer good for those who renounce belief in Islam or Judaism? In the pantheon worshipped by the Hellenistic peoples? Buddhism? Hinduism? Odin, Thor, and all that lot? How about if I forever renounce any belief in The Cult of John Platt or The Flying Spaghetti Monster? It does not appear to be the case. Why? I cannot be certain, of course, but it does appear to me that these people feel threatened by Christians, but not by any of the other sects I named. I am not a member of any of them, but fundamentalist Moslem scares me a lot more than fundamentalist Christian. The Christians, you see, have become Westernized or even Americanized. You might have to listen to them pray, and you might have to tolerate them voting to outlaw a few practices they see as morally reprehensible, along with others who aren't Christians, but simply happen to believe things like theft are immoral. Oh, wait, that's illegal now despite the fact that it's against one of the Christian commandments. Isn't that Unconstitutional? Hmm. I seem to recall murder being both illegal and against one of the Christian commandments as well. Bearing False Witness, aka perjury? We're getting in deep. Plainly, by this logic, we are already living in a Christian Theocracy, and the Supreme Court had better act quickly! Perhaps a military coup by those officers who have sworn to uphold and defend the Constitution? But wait a minute! The Jews subscribe to these same beliefs! So do the Moslems! So are we victims of the World Zionist Conspiracy, have we all become dhimmi, or is there some other explanation?
Isn't it possible that the Christians, Moslems, Jews, and certain others simply agree that theft, murder, and perjury happen to be against the best interests of this civilization that we are all members of, and that it has therefore become illegal to commit those acts because they have legally voted, in either direct or indirect fashion, to make committing those acts contrary to law? I happen to agree that theft, murder and perjury should be discouraged, and to aid in the discouragement, subject to criminal penalties. Am I, then, a Christian nutcase, a Wahhabist screwball, or a Jewish supremacist? Does it really matter that a Christian casts their votes against theft out of belief in the Bible, the Wahhabist in the Koran and Haditha, or the Jew in the Torah? All of these approaches yield the same answer as mine. Is my decision, reached through my best understanding of scientific, logical, and psychological principles, somehow contaminated by agreement with Christian, Islamic, and Jewish doctrine? I happen to believe mine is the correct, rational approach that we can use to convince the overwhelming majority of rational humans, whether or not they believe in any deity. But to say these approaches are prohibited by the Constitution is to not only invalidate the ability of believers to participate in the political process, violating the principle of all persons being created equal under the law, but also the part of the first amendment that immediately follows the part that those arguing for hard line separation of church and state so love to quote - namely the part about restricting the free exercise of religion. "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances." It's all down there in black and white. If the first amendment is so sacred that it cannot admit of any compromise, we certainly cannot compromise the part that says those who subscribe to a religion are free to practice it - which includes the right to speak and act, and even, vote, in accordance with those religious principles. I seem to recall something in Section 1 of the 14th Amendment about "No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States." If we are going to start disenfranchising followers of organized religion on the basis of irrational belief, then we have to start disenfranchising Marxists (more than half of the population of the globe lived under Marxist principles in the 1970s. Not once has it resulted in a beneficial result), Conspiracy Theorists (Kennedy Assassination was a government plot, 9/11 was a government job), and those who deny principles enshrined as the very basis of economics. At the very least, every citizen would have to have their beliefs tested for adherence to verifiable truth prior to obtaining the right to vote, or freedom of speech to influence those who might be able to vote. Pardon me if I suspect that a higher proportion of Christians would be able to pass those tests than most other segments of the population. Might be more people who pass the tests in Utah than New York or California, so that (under the Section 2 of 14th Amendment) Utah becomes the state with the most electoral votes and the state with more representatives in Congress than any other. We'll never know until we actually try the experiment, will we?
Near the beginning of this article, I mentioned that there was a time when everybody believed not only that the Earth was flat, but that it was the center of the universe. Suppose we treated that as an immutable truth, and made it an offense worthy of disenfranchisement, banishment, or even worse, to disagree? How would those who (correctly!) believed that neither was the case have convinced the rest of us of the error of our ways? Actually, as most schoolchildren are aware, worse has happened. Until it became permissible for them to attempt to convince others who did not share their views upon these very basic truths, the rest of us could make no progress.
This is not to say that every nutcase idea is worthy of your time. Actually, most of them have been so thoroughly discredited that only fundamental ignorance or the hope of being able to coerce their opponents, either through direct force or operation of the law, keeps the adherents going. The right to be heard, as one Supreme Court Justice famously observed, does not include the right to be taken seriously. It does, however, include the right to make the attempt to convince others by logic, persuasion, or even common beliefs, that your interpretation is correct. You won't get very far by appealing to logic if the audience doesn't share your devotion to it, you won't get very far with persuasion if the audience doesn't share your basic interpretation, and you won't get very far with an appeal to common beliefs if there aren't any, but this does not deprive you of the opportunity to try. When some faction, be it the historic Inquisition, Islamist fundamentalists, global warming true believers, or atheists wants to be able to pre-empt debate by means of silencing their opposition, it points me to a weakness in their world view, a flaw in their argument, and a fundamental fear that whatever they have to say to the world cannot stand up under the stress of disagreement.
November 18, 1992 to January 6, 2007
Thing was a gift to me from my step-mother, but it would be more accurate to say that he gave himself freely. He spent fourteen years, fifty days in the little shell that is no longer part of our lives; of those, he devoted himself to me, and later, my wife and children as they joined us, for fourteen years and three days of that time.
His name was an English translation of Domovoi, the somewhat animistic slavic god of the house, and such was the place he occupied until my wife entered the picture. He accepted his demotion without noticing, except that there were now four hands to accomplish the rituals of worship, petting and filling the food bowl.
The thing that stands out in my memories of Thing was always his energy. Newton's laws were modified for him; A Thing at rest did not tend to remain at rest. That and his utter devotion to his human, and as that human developed other attachments, he added them without hesitation to his pack. I was single at the time, and going through a bad period. I was depressed. This little dog snapped me out of the depression, gave me things to look forward to every day, and got me believing, once again, that maybe I had something to offer those around me. Why else would this wonderful little creature worship the space I occupied?
I credit him with the fact of my marriage to the world's only perfect woman; had he not taught me again how wonderful the world is, I would not have been the person she married.
He always was my dog, almost exclusively. He'd cuddle up to my wife and ask her for attention if she was home alone, but as soon as I got there, he was Daddy's Dog. I called him my wizard's familiar, an appellation with more truth than even I foresaw. A wizard, legend had it, was vulnerable to damage done his familiar, and now that he's gone, there's a Thing shaped hole that I don't think will ever go away. It's not the first such hole, but it is the newest and rawest. I don't presume to tell the universe how it should be run, but if there's anything to this concept of the immortal soul, he will be among those waiting when it's my turn. Faith is that which you believe without any evidence, and I have faith that his is one of the souls mine shall meet again.
In his earlier years, he was a crazed ball-dog. He'd chase a ball as long as I'd throw it for him. When I stopped, he'd chew on it. Dachshunds have very strong jaws; indeed they are half the ancestry of Dobermans (along with Rottweilers). It took me years to find a ball he wouldn't destroy in zero seconds flat. In recent years, he slowed down to where he'd only go after it a few times before he'd hunker down and start with the gnawing. Squeek! Squeek! Squeek! Squeek! You always knew when Thing had his ball. He gave concerts that lasted for hours.
He was a gorgeous little dog, perfectly proportioned. I could always tell how much people knew about dogs from which of mine they noticed first. Mellon caught your eye because of her unusual coloration. Thing would have been a champion show dog if I'd had the time and inclination. He was very happy being just Daddy's Dog, and I enjoyed the time spent playing with him too much to want to waste any of it on unnecessary training. Go outside or on the paper, come when I call you, stop what you are doing when I give the command. That was about all the training I needed him to have. The rest of the time we had was too precious to spend teaching him stuff to impress other people I didn't know.
He was also bright. It took him about three seconds to figure out that if he climbed the stairs behind the couch, he could walk down onto it, and that was only one of his many exploits. He tied much bigger dogs up with their own leash twice that I saw.
The last couple of years, he had become much more sedentary. He lost a lot of his teeth despite my best efforts, and eventually, most of his appetite with them. He also developed a bad heart murmur, to the point where the vet was concerned about sedating him to clean his teeth.
He had always been something of a Tongue Monster, but when the heart murmur prevented him from chasing his ball for us as much as he wanted to, he got to the point where he'd lick as long as you allowed him to. I was concerned that it might be a mineral deficiency, but the vet said not to worry about it. On the other hand, he became, if anything, a more dedicated petting sponge, and he was always willing to chase the ball as much as he could. Little dog, big heart described him perfectly.
A few months ago, the vet saw indication of kidney failure in some blood tests. We put him on a high-protein, low bulk diet to see if we could turn it around or at least keep it at bay, and he perked up a little, but even so his appetite wasn't reliable and he kept losing more weight. A month ago I still had hope that we weren't just fighting a delaying action, but by Christmas I knew he wasn't going to be with us much longer. He wasn't in pain, but he wasn't the active joyful little dog he had always been. Just as devoted, just as appreciative of attention, but the special spark of joyful light in his eyes began to flicker. A few days later, his appetite decreased further and he started bringing his food back up. Yesterday, he brought up everything he tried to eat, and even had trouble keeping water down, and I knew it was time to perform the duty I had agreed to in my heart the day I brought him home. I couldn't make him better; I could only make his misery stop. I spent the night on the couch with him, perhaps selfishly absorbing the last time I could with him. He seemed to appreciate it, cuddling right in, and it seemed to help a little. This morning I called the vet. I held him and cuddled him and petted him and praised him while he left this world. Hopelessly inadequate, but all I could do.
Goodbye, little one. I can only hope that we shall meet again.
Hussein's carnage averaged 70 to 125 civilian deaths every day for the 8,000 days he reigned. His 20,000 civilian deaths a year (on average) were considered "peace" while last year, under war, there were 14,298 civilians deaths.
Nixon vowed to 'ruin Foreign Service'. Except for Bill Clinton, I'm not certain that there's been a president whose foreign policy wouldn't have benefited if he'd been successful. State has become a bureaucracy with a momentum all its own, looking out for its own comfort, and where it hasn't actively worked to frustrate foreign policy aims (our current president) it has definitely worked at cross purposes (Reagan). Mind you, it might have saved us from the worst Carter could do, but when we have had focused, dynamic presidents, it has mostly hurt them or detracted from the message.
Coming from Nixon, the president with strongest foreign policy credentials of any since FDR, this is damning:
Winston Lord, a top aide to Kissinger during the 1970s, said Nixon looked on the Foreign Service as dominated by liberals and as generally "cautious, unimaginative, slow-moving and risk-averse."
He said Nixon was given to hyperbole and his "extreme" comments about dismantling the Foreign Service should be seen in that light.
Kind of lends credence and weight to this story that headlines Negroponte's replacement as National Intelligence Director, but mentions the facts that Negroponte is one of our current president's "go to" folks.
Negroponte, who took over in April 2005 as the nation's first intelligence chief, has held a series of tough posts in the Bush administration and has been at the center of the Iraq debate since before the U.S.-led invasion in March 2003. He served as U.S. ambassador to the U.N. from 2001 to 2004 and ambassador to Baghdad until March 2005 before becoming intelligence ch
How to go to MIT for free
By the end of this year, the contents of all 1,800 courses taught at one of the world's most prestigious universities will be available online to anyone in the world, anywhere in the world. Learners won't have to register for the classes, and everyone is accepted.
The cost? It's all free of charge.
The OpenCourseWare movement, begun at the Massachusetts Institute of Technology (MIT) in 2002 and now spread to some 120 other universities worldwide, aims to disperse knowledge far beyond the ivy-clad walls of elite campuses to anyone who has an Internet connection and a desire to learn.
Online courses for free from MIT! If free time weren't something I just read about once, if I actually had any, that would certainly be a productive use.
Things that make you go "Hmmm." Google says bought stake in China's Xunlei
Would they have been able to if they hadn't "played ball" with the Chinese censors? Doubt it.
Explicit payoff? Don't think so, but Google certainly got along for going along.
More than 80 million users have installed Shenzhen-based Xunlei's software and its Web sites attract more than 50 million visitors a day, the China Daily said.
Baidu.com Inc. (Nasdaq:BIDU - news) controlled nearly 57 percent of China's search-engine market at the end of June, according to Analysis International, a Beijing-based IT research company.
Sources have said both Baidu and Google, which has only 16 percent of the China market, are exploring options to expand their online video services in the world's fourth-largest economy.
Warm body: Check, but not at 37 degrees centigrade! Bank issues credit card to cat
Time to revoke the dogs' internet privileges.
via Tinkerty Tonk, Political Quiz
I'm sceptical of anything that wants to put political leanings on a single scale, but I came out a 33. Questions where there wasn't any kind of a good answer:
More to guarantee competitive elections: Public financing or term limits? Neither of the above. Getting rid of gerrymanders for this purpose or that, or any reason at all other than equal population among districts.
More extreme, Jocelyn Elders or Pat Robertson? They needed a "both", but I'll grudgingly take Pat Robertson, as Jocelyn Elders is occasionally rational. Entirely by accident, I'm certain, but it's a claim Pat Robertson can't make without every adult in the room laughing.
A quiz on the past year from Bill O'Reilly. I got 10 of 20, mostly from stuff that might be construed as actual news. (Anybody that pays attention to Barbara Streisand's politics obviously has too much of that "free time" I keep hearing about).
Slow day at work, what can I say?
There are many ways of suckering real estate consumers, and cash as an inducement to get people to swallow a raw deal is one of the most common.
From sellers (usually developers), "free" upgrades are one of the most common. They overprice the property by $50,000, and make you feel like you're getting a deal with "$10,000 worth of free upgrades" that really cost much less. In many cases, they're pre-installed and if you wanted to buy one without the upgrades, they would be unable to accommodate you. But if you're not working with a good buyer's agent who is looking out for your interests, you'll never hear about better properties offered for less.
From agents, they offer commission rebates or reduced price listing packages. But to pretend that these packages offer the same level of service as more expensive packages is ridiculous. If you're looking for a cheap MLS listing service, I've seen them for less than $100. But if you want someone to market your home, look for the buyers you really want, or negotiate on your behalf, you are going to be extremely disappointed. When you are dealing with a strong sellers market like we've had for most of the last decade and don't care if your property sells for the best possible price, discount listing services may be the way to go. If you are dealing with a buyer's market, if you have some issues with the property, if you really want someone to market it in such a way as to find your ideal buyer and get the best price, the more expensive agent who does more work is likely to get you enough more money to more than pay their increased compensation.
Agents who offer a portion of the buyers agents commission back are not likely to be the most active agents out there. They do not typically advise you as to the state of the market and whether there is a better buy out there. They aren't looking for the better bargain, they don't know enough about the state of the market to be strong negotiators, and they're certainly not out scouting properties looking for issues before you make an offer. They do the minimum necessary to get a commission. It is trivial for a more involved agent to get you a better overall bargain.
Some sellers will offer cash back to the buyers. This needs to be distinguished from paying the closing costs you would normally pay as the buyer, which is legal and acceptable, providing it is disclosed to the lender. When the seller offers to put cash back in your pocket, you have the choice of either disclosing it to your lender or not disclosing it. If you don't disclose it to the lender, congratulations! You have just committed fraud, and lenders do get their dander up over it. If you do disclose it to the lender, they will base their loan off (at most) the net sales price, which is the official price minus the rebate. This shoots yourself in the foot other ways, as well, because it will likely increase your tax assessment, and could increase your cost of insurance.
Cash back from a loan provider is most often an intentional distraction, so that they don't have to compete on the real price of the loan. They tell you you're getting $10,000 cash back instead of how much the loan is costing, they can hit you for an extra $2000 in closing cost markups and three points of origination, not to mention that what they are really doing is adding all of that money AND the $10,000 to boot to your balance, where you'll not only owe the money, but pay interest on it for years. Plus it's likely that they stuck you with a higher than market rate of interest as well, because you were distracted by what you thought was free money, so they make more money there, also. Shop your loan by the terms, rate, and total cost to you. All of this can trivially eclipse the $10,000 they put in your pocket - even if they weren't adding it to the balance of the loan.
Offers by a lender to pay your appraisal fees are most often trying to lock up your business from their competition. They're not competitive on price, so they apparently offer you a $400 freebie, while charging you $2000 extra in marked up closing costs, those same three points of origination I talked about, and then they ding you $500 for the appraisal on the final paperwork. This is one of the best ways to get a very high markup on a loan that there is. If you like paying more for a loan than you need to, a "free appraisal" is one of the best ways to go about it.
Finally, this article wouldn't be complete without mentioning several of the ways that quoting low payments for a loan can mess you up. The average consumer may know better in other contexts, but they still shop for real estate loans by which one has the lowest payment. This is basically financial suicide. There are so many loan providers out there pushing negative amortization loans, in which your balance owed increases from month to month in order to allow you to make lower payments, that even when I warn potential wholesalers that I don't want to hear anything about negative amortization loans, at least half of them get themselves thrown out of my office by trying to get me to sell them. They also have higher real interest rates - the price you should pay the most attention to - than many other loans. Right now, you can most likely get a thirty year fixed rate loan at a significantly lower real interest rate than the equivalent cost for a negative amortization loan.
Nor is this the only game played by quoting low payments, merely the most prevalent and most egregious right now. Even if you manage to dodge that bullet with those who quote you low payments in order to sell you a loan (unlikely), there are still all of the standard games that get played with payment. They fudge the math, they "forget" to include the costs in the computations, they pretend you are going to pay the costs of the loan out of pocket when they know good and well that you intend rolling them into the loan, they just lie about their rates and the costs to get them, or, to be able to quote a low payment, they quote you the rate that costs so much that you will never recover the costs of that loan over its entire lifetime. The payment is determined by how much you borrow, at what rate, with what length repayment schedule. The math is the same regardless of the lender. You need $X for the obligations - either the current loan or the purchase. Adding the least cost and being charged the lowest interest rate (always a trade-off between the two) makes for a lower real cost to the loan. Remember, when you refinance, or buy another property, you're paying for your loan rate all over again, so all that money you paid to get a lower rate is gone when you let the lender off the hook by refinancing or selling the property.
Greed is good, Gordon Gecko not withstanding. But let's make it rational greed, because thinking that you are getting a freebie and not asking what it really costs is likely to cost you many times the amount of what you think you're getting for free.
Caveat Emptor
UPDATED here
Must you sell if you list at a specific price and the broker comes up with a qualified buyer?
in the US in general, no you do not have to sell, but you could still be liable to the broker for their commission. You might also need to justify why your decision was non-discriminatory (assuming that it wasn't), but if (for instance) your broker brings you someone you have had business dealings with in the past, and they have tried every manouever possible to scam you after reaching agreement in those past dealings, you are (usually) quite justified in refusing to do business with them.
Talk to a lawyer, but generally speaking, if you do not have complete and perfect agreement between the parties on the contract, you do not have a valid purchase contract, and if you didn't want to do business with (say) Bill Clinton or George W. Bush, such is your right as long as you refuse to do so on the basis of them being a particular individual, not based upon them being members of a class protected under anti-discrimination law.
In general, nobody can force you to sell. But it can be expensive not to. I am not familiar with any cases where a real estate agent, listing or buyer's, was awarded a commission even though there was no transaction consummated, but that doesn't mean it couldn't happen. Refusing to sell on the basis of race, sex, religion, sexual orientation, or lifestyle is setting yourself up for a lawsuit.
On the other hand, just because someone offers you full list price does not mean you have to accept it. If the other terms are onerous, if it comes attached with conditions you don't care to accept, or if it is merely from an individual who you have done business with in the past and are unwilling to be involved with again, you are usually within your rights to refuse the offer.
Caveat Emptor
UPDATED here
Carnival of Personal Finance
Carnival of The Capitalists Recommended: Sox First (top ten business shenanigans for 2006)
Carnival of Investing Recommended: Ask Uncle Bill (cutting interest rates on student loans)
I may not be myself for a while. I've got a very sick little dog who has been very important to me for the last fourteen years. Just by being himself, he pulled me out of a funk when I had basically lost faith in the whole idea of friendship. There's not much you can do for kidney failure in a dog. We've been treating it by controlling his diet, but it has become increasingly obvious that that was a delaying tactic only, as he has become progressively thinner. He's not in pain, but he has become unwilling to eat almost everything. This evening he only ate half of what I gave him of one of his favorite foods, so I have to accept at this time that I'm probably only going to have him for a few more days, at most. Tomorrow actually marks 14 years since he came to live with me, and without him and the restoration of my attitude that he worked, I would not have been the person my wife married. I'm going to keep him as long as he's not in pain, but I don't know how long that will be. I'm going to spend as much time as I can with him while he's still here, and I still have to work. So if there's not a lot left over for new articles here for a while, please understand.
THERE is sorrow enough in the natural way
From men and women to fill our day;
And when we are certain of sorrow in store,
Why do we always arrange for more?
Brothers and Sisters, I bid you beware
Of giving your heart to a dog to tear.
Buy a pup and your money will buy
Love unflinching that cannot lie--
Perfect passion and worship fed
By a kick in the ribs or a pat on the head.
Nevertheless it is hardly fair
To risk your heart for a dog to tear.
When the fourteen years which Nature permits
Are closing in asthma, or tumour, or fits,
And the vet's unspoken prescription runs
To lethal chambers or loaded guns,
Then you will find--it's your own affair--
But . . . you've given your heart to a dog to tear.
When the body that lived at your single will,
With its whimper of welcome, is stilled (how still!).
When the spirit that answered your every mood
Is gone--wherever it goes--for good,
You will discover how much you care,
And will give your heart to a dog to tear.
We've sorrow enough in the natural way,
When it comes to burying Christian clay.
Our loves are not given, but only lent,
At compound interest of cent per cent.
Though it is not always the case, I believe,
That the longer we've kept 'em, the more do we grieve.
For, when debts are payable, right or wrong,
A short-time loan is as bad as a long--
So why in--Heaven (before we are there)
Should we give our hearts to a dog to tear?
-Rudyard Kipling
If you've had a dog, you know the answer. But that doesn't make it any easier when the time comes.
Next big test of power to seize property?
Owner gets plans for the property approved by planning commission. But developer named for the redevelopment area demands $800,000 or 50% of the business, and sues to condemn.
The developer, Gregg Wasser of G&S Port Chester, told Didden he'd have to pay $800,000 or give G&S a 50 percent stake in the CVS business. If Didden refused, Mr. Wasser said, he would have Port Chester condemn and seize his property and instead of a CVS he'd put a Walgreens drugstore on the site.
There actually is another side to this story. The developer spent $100 Million redoing the area in exchange for the profits. Furthermore, although it's not raised by the article, without that developer coming in to spend their money on redevelopment, I'd wager the guy's plan would not have drawn an interested chain. But 1) I can't see that one brand name or the other of drugstore makes a significant difference to the plan, and 2) Who says the municipality that benefitted from having the developer come in and redevelop cannot pay for the rights of this person that have been abridged? Seems to me that municipality got a large amount of benefits for not much in the way of expenditure by curtailing those property owner's rights.
For decades Port Chester tried to persuade various developers to launch urban renewal projects in the village. None did. Then in 1999, G&S agreed to undertake the challenge - and risk. The company proposed a 27-acre, $100 million project to replace run-down buildings with new retail stores, new roads, utilities, and a multiplex movie theater.
In exchange, the village agreed to give the developer exclusive power to decide which properties within the redevelopment zone would be acquired through negotiation and which would be seized by eminent domain. It also gave the developer the exclusive right to build - and profit from - the project.
In other words, the bad guy here isn't the developer, who was promised certain benefits in exchange for spending their money to benefit the town. The bad guy here is the municipality who curtailed the rights of the property owners without just compensation while benefiting greatly.
As I keep saying in eminent domain, the issue is money (or actually, wealth transfer). This is an abuse of power not by the developer, but by the municipality. It isn't politically popular to make this observation, but it remains the correct interpretation.
Now any award from the town to the property owner should be offset by the value added to the property by the redevelopment zone, but the gentleman in question should nonetheless be entitled to an award of cash.
Purchase Money: This is a loan that enables you, in combination with your down payment, to actually purchase the property. If you spend cash to buy the property and get a loan the next day, that is not a purchase money loan.
Rate/Term Refinance: This is a refinance that does not put money in your pocket for other purposes. As it is more usually defined, this is a refinance that does not put significant numbers of dollars in your pocket. These loans typically have the best rates of the three purposes. For A paper, you are allowed to pay off existing loans, you are allowed to borrow enough money to "seed" a new income account, you are allowed enough money to pay up to one month of prepaid interest, and you are allowed up to 1% of the new loan amount, or $2000, whichever is less, to be put into your pocket for other purposes. In order to qualify as rate/term, A paper cannot do anything with an existing second (or third) mortgage, unless every last cent of that second (or third) mortgage was spent in acquiring the property, a fact which can force you to either do a cash out refinance or to subordinate your existing second mortgage to a new first trust deed. Sub-prime may have more forgiving definitions regarding other debts, but choosing sub-prime loan because it allows your new loan to be defined as a rate/term refinance is like voting Cthulu for President because you're tired of voting for the lesser of two evils. Sub-prime loans have pre-payment penalties by default, and generally carry higher rates.
Cash Out Refinance is any refinance that does not meet the definition of rate/term. It puts cash in your pocket, it pays off other debts, it includes or combines or refinances a home equity loan or home equity line of credit that you took out for improvements or to pay other debts. Cash out refinances will usually have the least favorable set of rate and cost trade offs, what the uneducated think of as "highest rates" of these three purposes, at least at higher loan to value ratios. Depending upon the lender, loan to value ratios under seventy to sixty percent may have the same rate structure as rate term refinances. Cash out refinances also usually have slightly tougher underwriting guidelines than either of the other two categories.
Caveat Emptor
UPDATED here
Michelle Malkin extensively researches pro and con of the alleged Israeli ambulance attack. After looking at the evidence presented, I have to come down firmly on the side of "It sure looks staged to me."
Saddam Hussein Executed
I would like to say I'm sorry that he's dead, but that would be a lie. There's a horrible mean little voice inside of me singing "Ding Dong, the witch is dead!" but I'm certain I'll pay for that karmically somehow. No matter how evil he was, to rejoice at another's death is wrong.
The man was evil. In order to move Iraq forward and bring closure to his horrible regime and the horrendous crimes perpetrated by it, he had to die. Either by execution or by waiting for him to die in prison, and this way removes one very concrete incentive for continued violence by his supporters (which are few) or those who might use him for their own ends (which are many). The Iraqi people and government did precisely the right thing in putting on an admirably restrained trial, and carrying out the verdict and sentence quickly.
It doesn't begin to do justice for his victims. It certainly doesn't bring them back. It certainly doesn't end the current insurgency, which has little to do with die-hard Ba'athists. It does close, once and for all, the brutally repressive Ba'athist chapter in Iraqi history.
Iraq the Model has the view from a much closer observer.
Don't remember where I read it, but we may end up wishing we had treated him like the Nuremburg defendants after WWII: Those found guilty were cremated after execution, and their ashes scattered at sea, to forestall their graves becoming rallying points for German resistance. The Ba'athists are essentially gone. But those remain who could pervert Saddam Hussein's memory to their own ends.
Now that Saddam Hussein is dead, Scrappleface notes the release of a Woodward interview with him.
via willisms, America's Red Ink
Tigerhawk on the nature of risk and the value of being able to take it.
Riehl World View has some perspective.
Mark Steyn wants some resolution, or resolve.
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