Google - Is the Tide Turning?

America is a funny place. It's a place where you can become wildly successful in a relatively short amount of time. But as soon as you get to the top, people find a way to tear you down. America seems to love the rise and fall story. I think next in line is everyone's favorite search engine, Google.

2005 was Google's year. The stock has been on an absolute tear this year. Google keeps releasing great and wonderful services. Obviously I'm a fan of their Blogger service. I use their Google Maps service, and their mail service, and pretty much everything else that Google throws out there. Their mantra of "Don't Be Evil" is admirable and speaks to a lot of ordinary people tired of the Enrons and WorldComs of the world. But the tide may be changing.

Google has been wildly successful. But for some reason people don't want to see others be too successful. There was a time when people all loved Microsoft, Wal-Mart, Starbucks, etc. But at some point, these companies became pariahs. When a company gets big enough to dominate its space, people start complaining about the company being too big and too powerful for its own good. You are slowly starting to see people who don't like Google. They complain about how it is too powerful in deciding who comes out on top in search. There is the Book Scanning controversy, and very soon there will be even bigger uproar of Google's Video plans.

Is it jealousy? Fear? I'm just not sure. I will be interested in seeing the evolution of this company to see if it suffers from the same fate as other market dominators.

The Housing Bubble

Most of the readers who read my blog know that I believe there is a housing bubble going on right now. I believe the top has been reached and that we are going to start to see price declines over the next year. How steep those declines will be remain to be seen.

What is interesting to me is the talk on the other side of the isle by those who do not believe a bubble is formed, who believe that prices will rise or stagnate.

I am a huge fan of real-estate. I believe it is normally an excellent investment. You get to live in the asset while the price appreciates. It is tax-favored so you can realize large captial-gains without having to fork anything over to Uncle-Sam. But what has gone on over the last three years is bordering on mania.

Economics is called the dismal science and it is a aptly named. You see, economics is not kind. We are witnessing a huge asset bubble that, when it burst, is going to hurt a lot more people than anything before it. Most everyday American's don't own stocks, and certainly didn't participate in the internet stock bubble. But most American's do own homes. And many new home owners have bought homes on exotic mortgages. It would be like all these Americans not only buying Microstrategy and Pets.com at the height of the bubble, but buying them on margin!

Of course the naysayers say that houses aren't stocks. Well stocks aren't tulips either, and we all know how that one ended up. An asset is an asset. And any asset can be prone to speculation. It is true that housing is more illiquid than stocks, but that may just compound the problem as pepole will be unable to get out of their homes and thus be upside down in their mortgage. The problem with the dot-com bubble was that the assets were illiquid. When everybody went looking for the way out, nobody was left to buy. They had to dramatically drop the price because the asset wouldn't sell. It wasn't liquid.

During the Dot.com bubble it seemed like any idiot could become a millionaire. He just needed an idea, a web-page, and Bam! he would issue an IPO and make millions. Well the same thing is going on in real estate. Idiots are making money. People who have no experience in housing, who wouldn't know a closing statement is or a 1031 exchange is, are making lots of money.

Near the top of any bubble, you will see that even idiots can be richly rewarded. But it can not last. You see, housing prices can not rise indefinitely, no asset can. Housing prices can not diverge from its underlying fundimentals for long, and real estate has. Stock prices are tied to the earnings the company is able to produce. Over the long haul, stocks MUST be tied to the earnings created. The price of a house MUST be tied to the rental income that it could generate if rented out. Over the long haul, a renter must be cash-flow positive, no one can sell at a loss forever. There is no magic behind it. It just must be. It's simple economics. Ignore reality at your own peril.

Because of the above facts, most recent homeowners are in for a scare. Wages have not increased. Rents have not increased. How can housing prices be justified? The answer, they can't be. When people realize the game is up, don't be standing in front of the door; you will get trampled. When nobody is left stupid enough to pay what you paid for your asset, what are you going to do?

People are hopeful. They always want to believe that this time is different. Economics tells us that it never is. Believe me on this one. The housing market is on the cliff, and its about to take a dive.

Reality Real Estate

I should be a journalist. At the very least I'm starting to think like one.

The other day I was sitting on my couch flipping through the channels when I came across a real estate show on HGTV. I don't remember exactly what the show was titled but basically it was about people trying to sell their homes and all the hassles that they face when doing it. They weren't getting as much as they thought they were going to and the process was much harder than they realized so they were extremely frustrated.

I thought to myself, "If this doesn't signal a Housing Bubble I don't know what does." I mean reality TV about sellling a home? Have we hit a point where we are actually interested in how others are doing selling their property? Are we that real-estate crazed? That can only say one thing to me. The bubble is about to burst.

Then I flip to the Washington Post and there is an article on the exact same thing I was thinking about. Maybe I should be a journalist. Then again, maybe its just that psychic thing kicking in again.

A Muted Christmas

I didn't have much of a Christmas this year. My girlfriend got me a gift but that was about it. I gave gifts to a few people but otherwise, I didn't really give gifts out this year only because I find it is a big hassle. I usually give gifts because other people are getting me a gift and out of a sense of guilt, I do it too. Other people tell me its the thing to do this holiday season so I have always begrudgingly done it so that I don't look like some sort of Scrooge. I believe in giving gifts to those who are close to you like my family and my girlfriend. I even believe in giving gifts to the people who work for me because its important to show you appreciate all their hard work during the year. But this year, I have no one left reporting to me, so that part of it was easy.

But in the end, if I'm honest with myself, I find that I wish people wouldn't get me a gift so that I wouldn't have to get them a gift. It's not that I'm cheap, it's just I find it to be extremely stressful during the holidays to try and get gifts for everyone. I hate crowded malls and I hate spending hours trying to come up with the right gifts for everyone. When you add that to all the other stress that comes around this time of year it can be overwhelming.

So this year I decided to do myself and others a favor. No gifts. This helps me out because I don't have to worry about shopping, and I hope it has helped my friends out by letting them do the same for me. It probably has helped them more than me since I'm told I'm notoriously difficult to shop for.

The funny thing is, I'm not alone this year. It seems to me that most of my friends also didn't do much gift-giving this year. For one reason or another, most of my friends couldn't give gifts this year. This is probably a bad thing because many are just facing financial difficulties. I'm not sure if this is an epidemic or what but I certainly hope it is not. Anecdotally, you can probably chalk this up to increased energy bills, sky-rocketing home prices, etc. But I'm curious, what are other people seeing this year? Was your gift-giving or gift-receiving impacted this year and if so why?

Merry Christmas

One thing I love about Christmas is that the freeways are always clear right before and right after Christmas. I came into work today and there was almost no traffic on the freeway. It was beautiful. If only Los Angeles could be like that all the time.

Of course there is the flip side that I hate. I can't step into a mall for month before and several weeks after Christmas. If anyone is going to brave the malls either tomorrow or on Monday, please don't get crushed.

I hope everyone has a safe and wonderful Christmas, Happy Hanukkah, or whatever else you may celebrate in this Holiday Season!

NYC Subway Strike

It looks like the NYC Subway Strike may be over. I don't really take either side on the issue as I think both the city and the workers are wrong. Here's why.

I don't like unions but I also beleive they have a right to exist so long as it is a voluntary association. If a group of workers wants to strike to gain concessions in wages and benefits, I have no problem with that. My only beef with them is there fairly unrealistic expectation. An operator can expect to make on average in $63,000. Even in NYC that's a lot of money for relatively low-skilled work (Yes you can live in the city on that. I did with much less). They then want to insure that they can retire, with full benefits, at 55. Compare this with Private-sector employees and the gap is just huge.

However, I think Bloomberg's comment that the workers are being "selfish" is dead on; I just don't think that's a bad thing. People have to do what people have to do. If you believe you are not getting paid enough for your job, you need to be able to leave the job. The $1 million fine is pretty ridiculous. Forcing these workers to work because of some "public need" is just outrageous. Is it making it harder to live in the city? Yes. Is it hurting the city economically? Yes. But tough. If you are going to live in a city that depends so much on its public transportation, and then allow the operator of said system to unionize, then you run the risk of this exact thing happening. Nobody should be allowed to compel someone else to work just because they "need" them to. Slavery ended a long time ago.

I guess my big problem is (big surprise) the Federal government. The federal government mandates that workers are allowed to strike, and that employers can hire temporary workers to replace them. The problem is that the employer MUST take back the striking workers after the strike has ended. This is just stupid. If you want to strike you forefit your job. Why on earth should I take you back?

Of course labor loves this law but it is now backfiring in their face. Again, just another perfect example of what happens when government makes up illogical laws to try and "protect" a class of citizens. How did it backfire? Simple. NYC just made it illegal for public employees to strike. That is why they are now being fined $1 Million a day. That is why union leaders are facing criminal charges. They have made it illegal for someone to leave their job. Doesn't that scare anybody else?

You give government an inch, they will not only take a mile, they will take serveral miles.

Cute Overload

If you want to say "awww" go check out this site, Cute Overload. I won't still the sites thunder by posting one of its pictures here but they have found some seriously cute critters over there.

Should The Lakers Go After Ron Artest?

The Indiana Pacers are trying to trade Ron Artest. For those who don't follow basketball closely, Ron Artest is Indiana's very volatile but very talented forward. In my opinion, Ron Artest is a top 15 player in the league. He is an absolute beast on the defensive end and he has a pretty decent offensive game as well. He has won a Defensive Player of the Year award which is extremely difficult from any perimeter position.

But Ron Artest has his issues. He makes Dennis Rodman look almost sane. He was the main player in the whole Detroit fiasco where he went into the stands to fight the fans. He was the player who asked for some more time off so he could work on his rap album (which by the way flopped). But like in all sports, the more talented you are the more people are willing to forgive you. In fact, it isn't just like that in sports, its like that in all aspects of life.

The question becomes, should the Lakers go after a player like Ron Artest and what should they give up for him if they do pursue him. There is no denying is on-court performance. But is a potential time bomb worth it. If I'm the Los Angeles Lakers, I have to think it is. I say that only because the Lakers have the best coach in the history of the game, Phil Jackson. Players like Ron Artest are few and far between. I greatly value defensive ability and few can bring it to the table like Artest.

But what is he worth? In my mind there are only two untouchable players Kobe (duh) and Lamar Odom. Many pundits however think the Lakers should part with Odom to get Artest. I am not one of those people. Lakers have gone one a decent little run as of late, going 5-1 on a recent 6 game road trip. The team looked horrible at the beginning of the season but seems to have turned it on as of late. If Artest didn't have his head problems, I do the trade in a second. But the fact remains that he does have mental issues which means you just can't depend on him. You can depend on Odom. He is inconsistent scorer but he is by far the Lakers best rebounder and playmaker. He is a matchup nightmare for the opposing team.

Is Artest worth some of the Lakers young players, namely Andrew Bynum? I think Bynum is going to be a great player. For an 18 year old kid, he has shown tremendous ability. But I think this is one instance where the gamble might pay off. There is no doubt that Artest is a top-tier player when his head is on straight (the problem is it is so rarely on straight). Andrew Bynum may never be as good as Artest is right now, so it may be worth the gamble.

Stanley "Tookie" Williams Executed

Tookie Williams, founder of the notorious L.A. gang The Crips, was executed last night for the murder of four people in 1979. Over the last several weeks, there has been a call for clemency from various groups because Tookie is a reformed man. While incarcerated, Tookie has worked to write books and encourage youth to turn away from the gang life.

Let me say first that I'm opposed to the death penalty as it is actually practiced in the United States. In theory, I support the death penalty. I have no problem with the execution of a person who has taken the life of another. It is not that I'm a vengeful person, actually quite the opposite, but I do believe that ones life becomes forfeit when they take the life of another. It might be better said that I don't necessarily care what happens to someone after they commit the most unforgivable of sins.

However, I do not condone the death penalty as practiced. My reasoning is thus:

• It needs to be applied uniformly and fairly and it is not. Minorities and the poor face a much larger percentage of executions.
  
• Mistakes happen. Innocent men have been executed. And as soon as you execute someone, there is no taking it back. I believe that if one innocent man is executed it is one too many.
• I don't think its all that bad. Maybe it's because I don't really fear death, but to me, it would be much worse to waste away in prison for the rest of my life.

But that being said, I have no problems with the execution of Tookie Williams. While he maintains his innocence in this particular case, there is little dispute that he founded an organization that is responsible for hundreds if not thousands of deaths in the last 25 years. It matters very little for me that he is a "redeemed" man. It is easy to reform when you are locked up away from society and facing certain death. Regardless of his reformation, the facts remain that he is responsible for numerous deaths. And as I stated before, in my mind a person's life becomes forfeit the moment they take another's life. It doesn't matter what happens after that point.

Christian groups have been calling for compassion. But if we as a society are going to condone the death penalty, I see little reason why the state should show compassion. If Tookie is indeed reformed, than these Christian groups should take solace that he will find compassion in the eyes of God. But lets let God make that determination, not the state.

Owner vs. Workers

Jennifer made a comment on my last blog about how McDonalds depends on needing to have access to its workers 24/7 or else face bankruptcy. This came on the heels of a discussion I had with someone else about the importance of executive compensation so I might as well touch on the subject.

I'm not sure exactly how McDonalds and access to their workers even got into the conversation, but the argument that McDonalds would go bankrupt without their workers is specious at best. Are workers at the lowest levels important to the success of any company? Absolutely. No company can succeed without the people doing the work that makes a company run. But, are they more important than executives and company owners? No. I feel I do very important work at my company, am I more important than the CEO or the shareholders? Hardly.

Now, where would the McDonalds' workers be without McDonalds? They wouldn't have a job. Now if the counter argument is that they could easily find another job somewhere else, the logical next question is why don't they? If working at McDonalds is so miserable, and other jobs are so plentiful and easy to come by, wouldn't all the McDonalds' workers leave en masse?

It is much easier for a company to find low-skilled labor in this country than it is for a low-skilled worker to find a willing employer (I believe the opposite is true for high-skilled workers). Further, it is much more difficult to start, finance, and maintain an new enterprise than it is to provide low skill labor. So the employer is faced with the more difficult job and easier replacement than the low skilled employee. Now who is dependent on whom?

I am not trying to diminish the importance of working Americans. I'm a working American. But the idea that employees are somehow more important than executives and owners gets a lot of traction in this country and it is a notion that is simply untrue. Is it true in some circumstances? Are some executives and owners idiots? Absolutely. But idiot executives do eventually get replaced. And owners? Well its their money to lose, if they want to take a big pile and money and burn it for heat, its perfectly within their right.

Providing capital and executive and strategic direction is hard. If it were easy, everybody would be doing it. Can a company function without either this or its low-skilled labor? No. They are both important. But one should never make the argument that the worker plays a more important role or is somehow more crucial than his employer.

Digital TV - A Right?

George Will has an interesting Op-Ed about Congress and its $3 billion bill to ensure that all Americans will have access to television when the Digital revolution comes around. I had a chance to have dinner with George Will once when I was at Princeton. I won a drawing, one of the few things I have won in life, but passed on the opportunity. Don't know why. I wish I hadn't.

Anyway, the switch will actually mean very little to most people. The only people it means anything to are those who have neither cable nor satellite TV. Of course, the people this most likely affects are the poor, those who can't afford cable or satellite TV.

Why no doubt this would not be fair to the poor, the question becomes should it really matter? I have to agree with George Will on this one. For me, it isn't the specific question of digital television. The problem I have is with the general sense of entitlement. I have a very limited view of what government should and should not do. Clearly there is no "right to television" outlined in the Constitution but where does one draw the line?

What's next? The right to video games? I mean the Xbox 360 just came out, so very soon, game publishers will stop making games for the old Xbox. Should we force them to make all the video games compatible with the old Xbox? Don't laugh. Video games are slowly but surely becoming ubiquitous, at least as much as television was in the mid 20th century. Someday soon, we might get to see a "No Video-Game Left Behind" act and then we will really know we have all gone straight to hell.

Why I Don't Buy Gas at Arco

Someone the other day asked me why I don't get gas at Arco. Besides the fact I believe the gas is of inferior quality, I have my own personal reasons for never getting gas there.

About 4 years ago I stopped by an Arco to get gas. It normally has the lowest posted price for gas and I was running low so I said what the heck. I walked up to the center isle to pay for my gas using my credit card, filled up my tank, and then left. I remember, I only put in $9.00 of gas. But when I checked my credit card a week later, I noticed I had been charged $9.35. I knew for sure I had not put in $9.35 so what the heck? I suddenly realized I was charged $0.35 for the privilege of using my credit card.

Now, I for one have no problem with companies charging people who use their credit cards more than people who use cash. It cost the business more money and why should the cash customers subsidize the credit customers? However, the policy should be clear and readily apparent. Nowhere was their a sign that I could find that told me I would be charged the $0.35. Maybe there was a small one somewhere near the credit station, but it was clearly not apparent to someone like me who tends to be fairly observant.

So I have never gone, and will never go back, to Arco. All because they charged me $0.35 and didn't let me know about it. With so many other options I would just rather not bother with this company. Just goes to show you how one little thing can really set off a customer.

What's With Restaurant Service Lately?

In the last few weeks, I've been to several restuarants where the service was severely lacking. I was even forced to not leave a tip on two occasions and only reluctantly left one in another instance.

I like to tip, even though I do not believe tipping should be mandatory. But the service at these places was just atrocious. In one instance, they got the order wrong. Then, they didn't bring out all the food at once but insisted the rest was coming. The food that did come was spicy and my girlfriend was drinking lots of water. Did they come by to fill her glass? No. She ended up drinking my glass. Fifteen minutes later they had still not brought the rest of the order. So I asked again. They hadn't even started on the food so I canceled the order and left hungry.

Now, I can be a pretty patient guy. I can understand if the place was busy then the service might be slower. But seriously, we were there at lunch and there were two other tables of two there! And there were two servers. So two servers, three tables, six guests. Doesn't sound like impossible odds to me. To make matters worse this was a sushi place, you write down your own order. How do you mess up an order when the customer checks what he actually wants? I use to go to this place regularly just because it was conveinent. I won't go back again. It is Woomi Sushi in the Santa Anita Mall. I suggest you don't go there either if you like a restuarant that actually has service.

Expensive Jeans

My one guilty pleasure, the only thing I really waste money on, is designer jeans. Since I have bought my first pair of designer jeans, I have never gone back. The other day I was in the store with my girlfriend and we saw a beautiful pair of jeans from Citizens for Humanity. They were however $200. I don't mind spending $160 but $200 is starting to be a little ridiculous. Still, I was so tempted to buy them. Besides, what is $40 when you are already paying $160

I'm not the only one though. Here is an article about expensive jeans. It seems there are some jeans that retail for $10,000. Makes my $200 seem little in comparison.

Trade Imbalance? Look in the Mirror

I always get a kick when politicians rant about the trade deficit. It's one of those easy political topics that everyone can agree with and the only enemy are those bastard Asians and their cheap products.

I have an idea for America. Why don't you quit blaming other countries low wage workers and look squarely at yourself. There is little doubt that there are some disadvantages that the United States faces when it competes with cheap foreign labor but that is hardly the whole story.

The United States discourages savings. It discourages companies from doing business here and provides foreign competition a tax break. It puts American companies at tremendous disadvantages in the global market. How? By having an absolutely horrendous tax structure.

Want to save money? Good. We will tax you on anything you earn from saving your money.

Want to do business here? Good, we will put a tax on your corporate profits.

A foreign company doing business here? Guess what, you don't have to deal with taxes because the US only taxes corporate and income taxes and you are responsible for neither here.

Are you a U.S. company and want to business abroad? Guess what, you owe the US taxes even if that good was never made or sold here.

All this does is make foreign goods cheaper here and U.S. goods more expensive abroad. You add to the fact that all U.S. goods have income taxes built into them, and you can see why they are more expensive abroad.

America has some of the brightest, hardest-working people around. We have the advantage of higher-education, more capital, and the experience to use all of them. Let's quit whining about how unfair it all is and deal with the reality of the situation. Globalization is here and it isn't going away.

The Greeting Card Industry

This industry must make money hand over fist and yet if you Think About It it isn't very practical.

Americans buy millions of cards in a given year. I went to buy a few cards the other day and they cost me $3.00 each. Seriously, what the hell is that? These are pieces of paper with cute sayings on them but we are willing to pay $3.00 for each one? And these are items whose useful lifespans are approximately 15 seconds. They are read once, and probably never thought of again a majority of the time. And people give cards for so many different occassions. Birthdays, anniversaries, get well, Just-Thinking-of-You, Happy-Second-Tuesday-of-the-Month, etc. This has got to be the industry to get in if you want to make tons of money. Hallmark is privately held and has sales of approximately $4.4 billion (some of that is non card related products). That's a whole lot of happy wishes.

I'm Becoming Psychic

Seriously, something strange is going on. It started a week ago in the Best Buy parking lot. My girlfriend and I play the license plate game. It's a game where you are supposed to call out any out of state plate. She had called out some state, I think it was Arizona. Not wanting to lose, I jokingly called out Kansas. She knew I was joking but as we turned the corner, right in front of us was a Kansas license plate. What are the odds of finding a Kansas State License plate?

While shopping in Brookstone this weekend, I came across a card shuffler with a deck of cards in it. My girlfriend reaches into the deck and pulls out a card. I am about to say something like "10 of clubs" but instead I say, "3 of spades". She looks at me like I'm crazy or something, I think she is joking that I got it right. She proceeds to look at the rest of the deck just to make sure its a real deck, sure enough it was.

Now I can chalk up the license and the cards to random coincidence but the next story is just strange. In an extremely freaky occurrence, I asked her about 3 hours before her GRE if she had read any of the book I recommended, The Fountainhead by Ayn Rand. It's about architecture which is what my girlfriend wants to go to school for. I tell her I like to read another book by Ayn Rand, Atlas Shrugged, before I do something important because it pumps me up. It pumps me up because the book is about celebrating heroes and the greatness of men. Instead of tearing down men who achieve greatness, like our society and the media do, the book celebrates man's ability to achieve. I pointed to how the media took someone like Kobe Bryant, who before his scandal was considered the poster child for what was right with the game, and tore him down for his act of infidelity (which he is amittedly a bastard for doing). They seem to take great pride in blaming him for every little thing from destroying the Lakers to the outbreak of the avian flu even though little had do to with his infidelity. They seem to draw energy in tearing down because he had risen so high.

When she sat down to take the test, the essay question was, "Do you believe our society likes to tear down its heroes?"

I seriously think I need to go buy a lottery ticket.

Happy Thanksgiving 2005

I hope everybody has a happy Turkey Day. I am usually not a very big fan of Thanksgiving even though I do think it is probably good for people to reflect back on their lives and see what is good in it. We spend so much time focusing on the negative that every once in a while it is important to take a step back and realize just how great life can be. I figured it was appropriate to give the reasons I'm thankful this year.

• I am not spending Thanksgiving alone with Bandit and having a Turkey sandwich. (even though I am going to miss the fact I won't be with him)
• I get to spend Thanksgiving with a wonderful girl who complements me in so many different ways.
• I have some great friends who take the time to read my daily ramblings.
• I am happy and healthy in both mind and body.
• One of the biggest things bothering me lately was that I turned down a job offer that would have paid me a lot of money but I still didn't think it was enough. A problem I'm sure plenty of people would love to have.
• I have the courage to finally not buy Christmas gifts this year.
• I have enough extra money that I actually worry about what to do with it rather than worry that I don't have enough.
  
• I have the courage and ability to take charge of my own life and not settle for something less than I want.
• I have the capacity and desire to learn something new every day, even though sometimes I get so preoccupied with it, I feel overwhelmed.
  
• Even though I'm getting older, I still have hopes and dreams as if I were 15.
  

I hope everybody has as many things to be thankful for as I do. Everybody have a safe and wonderful Thanksgiving whatever you may be doing!

Xbox 360 Launch

So Microsoft released the Xbox 360 last night at midnight. Thousands of eager gamers waited in the cold and the rain so they would be the first to get one of the coveted machines.

Seriously, don't these people have a life? I mean, I love video games, but is it really necessary to wait in line with all these other people just to be the first to get it? I just don't get this mentality at all. The same thing happened with Harry Potter and I didn't get it then either.

I for one am waiting on getting a next generation console system. I think I'm going to wait until the Sony Playstation 3 comes out (although I'm hesitant to buy any Sony product anymore). I had an Xbox rather than a PS2 and was happy with it but the Playstation 3 is going to have a lot more horepower on it than the Xb0x 360 does. It will output a 1080p signal for an HDTV and it will come with a Blu-Ray DVD player. Blu Ray players are expected to cost a thousand dollars when they first come out but Sony will most likely sell its PS3 as a loss leader for around $400, and you will get to play games to boot.

I was also told by a friend that you really need an HDTV to enjoy an Xbox 360 (he works for a gaming network and got to play with it first hand). Since I don't plan on getting an new TV until sometime next year, I can definitely wait it out if I have to.

GM to Close Plants

GM announced today that it would close a dozen plants and eliminate about 30,000 jobs. This is of course devastating to a lot of workers, their families, and the communities they live in but it is probably the right thing to do.

However, what caught my eye was the UAW's response to the news. They called it, "extremely disappointing, unfair and unfortunate." I'm not sure what the UAW expect to happen. It is quite clear to me that GM, with its huge pension obligations and outdated cars, simply can't compete with the Japanese auto manufacturers. You can hope and pray that Americans want to buy more expensive, less reliable, and less stylish cars in order to keep your business running but in the end, it probably won't help.

No doubt, that management at GM has screwed up in the past and is a major cause of this current contraction but the past is in the past. Is it fair that they got to screw up the business and the workers have to pay for it? Probably not. But there is something I learned when I was eight. Life isn't fair. If GM doesn't have the capacity to support all these plants and workers they simply don't have it. You can't keep running a business at a lost, because sooner or later everyone suffers.

I speak from experience. My company has had to go through several layoffs in the past few years. Each time, it was not the fault of the people getting laid off, just the reality of the business. In fact, if the owner would have just had the foresight to lay people off sooner than he did, he might still have his business and saved the jobs of many people who got laid off at the end.

Cell Phones In the Bathroom

Please, do not use your cell phone in the bathroom. It is disconcerting enough for the other users of the bathroom to hear you chatting away. It certainly can not be any better for the person on the other end of the phone to hear toilets flushing or the sound of pee falling into the urinal. Just don't answer your phone while you are in there. Certainly don't bring a conversation from outside into the bathroom. The call can wait. It's not that important. People spent hundreds of years going to the bathroom without chatting to someone who wasn't there, I'm sure you can survive too.

Paying off the Mortgage: A Bad Idea?

Here is a myth that many Americans believe in that isn't necessarily true. Paying off the Mortgage early is a good idea. It just isn't true. I'm almost sure this is a myth perpetuated by the Banking industry themselves.

Why on earth do I, the ultimate saver, say this? Isn't it safer to pay off your house just in case? In fact, it may be one of the more risky things you do. Why?

Think About It. In times of crisis, the most important thing is to have liquidity. That is, you need to have an easy and fast way to get cash out of whatever investments you own. By paying off your mortgage early, all you are doing is locking your money into the house. I know what you are thinking; can't I just take out a home equity loan against the equity in my house? No, not necessarily.

Let's say you lose your job. Almost no bank will loan you money if you don't have a job, even with your house as collateral. Banks don't want your house, they want to be paid back. If you don't have a job, they can't be paid back. But it gets worse. You still have to pay back your mortgage, even if you have been paying it off early. Banks expect their check every month, and if you start to fall behind banks get nervous. If they foreclose, you are very likely to lose everything, including all that built up equity.

What makes this problem even more insidious is that the bank is more likely to foreclose on you if you have paid off more of your mortgage. Huh? Let's just say the market tanks and interest rates rise so that the bank has a number of foreclosures on its hands. What house are they going to foreclose on first? The house with the smallest amount of debt. Why? Because in all likelihood they will not receive full market value for the house. They will only get up to the value of the mortgage, and all other funds will be directed to other lien holders and then the former owner. They can only recoup the money left on the mortgage and in a depressed market that will only happen to houses with a small debt ratio. In fact, if you have a high ratio they will most likely work with you to delay payments and allow you to live in the house until you can resume payments. Kind of ironic isn't it?

I am not advocating just going out and spending the money you would otherwise use to pay off your mortgage early. Quite the contrary. I highly suggest that people put the money aside in a liquid account and allow the money to earn interest. Given a mortgage rate of about 5.7% and a tax bracket of 25% that means the money cost about 4%. There are plenty of investments that make 4% that are relatively safe. If the time ever comes you can't make a payment you can use the funds built up on your liquid account to make the monthly payment. At worse, if you have to walk away from the house, you still have the money that would have otherwise evaporated when the bank sold your house. When the amount in this side account equals the payoff amount of your mortgage, that is when you should pay it off.

Of course, the above course takes tremendous discipline. Most people don't have the will to be able to put money aside and not touch it. I'm also not saying it is never a good idea to pay off the mortgage early, it just isn't the no-brainer people make it out to be.

WTF is Wrong With Sony?

In case you haven't heard, Sony released a CD that has a rootkit on it. Basically a rootkit is a virus that attempts to mask itself from standard means of detection. It can basically hide from antivirus and malware. It is a truly insidious tactic.

Now there is news that Sony may have lead a price-fixing scheme to charge online retailers more than brick-and-mortar stores. Granted, a few other companies are named and this is only a complaint and not a conviction, but even so Sony isn't making a very good name for itself lately.

I love Sony products. But I don't like companies that do nefarious things. I will have to think long and hard the next time I am going to make a major electronics purchase. Treating your customers like criminals and trying to ensure they can't get a good deal is pretty much a recipe for losing any sort of customer loyalty it took years to cultivate.

Instant Messaging Through a Web Browser

Found a cool site that lets you IM through a web browser. Particularly useful if you are in a location where you can't install IM software or you are behind a firewall that doesn't allow IM protocols through. The site is meebo.com. I've used it at my work because our firewall blocks MSN and a few others. It works pretty well. It's not perfect and doesn't work exactly the same way you would expect an IM client to work but it is at least functional.It's based on AJAX technology (much like Goolge Maps)which is changing the way we interact with the Web.

Stupid Americans: example #5

In a perfect example of what is wrong with this country, I heard a women say on the local news.

"Facts are Facts. You aren't indicted in this country unless you did something wrong."

I don't remember the exact story or what was going on but are you joking me? Are people so stupid to think that this is true? Whatever happened to innocent until proven guilty? Plenty of people get indicted without having done anything wrong. And to call it a fact that you did something wrong just because you are indicted? I just don't know what to say to that.

Nissan to Move It's Headquarters

In one of those stories that gets some coverage but maybe not as much as it should, Nissan announced it would move its North American headquarters from California to the Nashville area. It had been in the Gardena area for over 45 years and hired 1300 people.

Why do I care? Well, this is just one more example of why we in California really need to worry about our economy. The main reason given for the move is lower real estate cost and lower business taxes.

I have harped over and over in this blog about why California is not a good place to do business. It's really a shame because it really does have a tremendous advantage in that it is so close to the budding Asian economy and that it is an attractive place for young people to live.

But California is just too expensive. This point hit very close to home for me. When my company was bought out and one of the recurring themes I heard was how expensive our facility was here compared to the facility in Ohio. They have something on the order of 3x or 4x the square footage for about the same cost as we do. Add on top of that that California has some of the highest taxes in the country to pay for its numerous social programs and the picture gets bleaker.

Then my very successful friends told me how they would probably not move to California. Housing prices are too high for someone just getting started to afford anything decent. And California imposes an average of 7% tax (more on high income individuals) on income compared to many states 0%. These are people who will be earning six-figure incomes and they are telling me it is too expensive to live here?

Terrel Owens is an Idiot

Yesterday, Terrell Owens apologized for being a jerk. For those that don't know, Terrell Owens has been complaining since the beginning of the season about his contract situation. He was in the SECOND year of his SEVEN year contract. A contract that was set to pay him over $49 Million. Yes, you can start crying for him and how awful the contract is. He then made comments deriding the Eagle's quarterback, Donnovan McNabb, and reportedly got into a fight with Hugh Douglas. Late last week, the Eagles had enough and suspended him for the rest of the season. He won't wear an Eagles uniform again.

The Eagles gave T.O. a chance to apologize but he decided that his pride was more important and snubbed the chance. And please, all the T.O supporters. Don't tell me he deserves a second chance. He got his second chance. That's why he is on the Eagles and not the 49ers. And did you see the apology? Both of them? Was there ever a more insincere apology than that?

I hate this guy. I hated him when he played for my team, the 49ers. I hated him when he was traded to the Eagles and demonstrated what an ass he is by calling Jeff Garcia a homosexual. There is no doubt he is a great athlete, and performs on the field. But he causes way too many headaches for his teammates. He just isn't worth it.

You know who he needs to blame? The worst agent in the world, Drew Rosenhaus? It is very clear that he has a conflict of interest with his client. Drew Rosenhaus got T.O. as a client this year. That means, he does not get paid unless TO signs a new contract. Don't you think he is going to push his client to get a new contract?

Why the Income Tax Will Never Work

There is something fundimental that a lot of people don't understand. The income tax will never work. It doesn't matter how much you try and tax the rich; they will find a way to avoid it. You could tax all income over $1 million at 100% and it still wouldn't matter. Case in point. Warren Buffet.

Warren Buffet doesn't earn his wealth the same way most Americans do. He gets an annual salary of $100,000. That is not a typo. That's it. Than how on earth is he the second richest man in America. It's because he earns his wealth differently. He owns approximately 33% of Berkshire Hathaway. When he wants cash, he just cash's in some of his shares. This wealth grew tax deferred for however long he has held the shares, on the order of 40 years in some cases. He then only pays the 15% tax on capital gains rather than the 35% on regular income. Oh but it gets better. He has an advantage even most wealthy investors don't have. Since he controls Berkshire Hathaway, he also controls how and when he receives his money. Berkshire does not pay any dividends, which would trigger a huge tax for Buffet every year. This is a gigantic, and perfectly legal, tax shelter.

You can't blame the rich. Warren Buffet isn't doing anything illegal. Most of the super rich are just taking advantage of the rules the game presents. They just are better at the game and have more resources than most.

Being a Doctor Isn't What It Used to Be

It used to be that if you wanted to become wealthy than becoming a doctor was the way to go. You studied hard, got good grades, went to Med School and some day would be rewarded with great wealth.

Growing up people always assumed I would be a doctor. I was smart and I was Asian, so it was natural that I would be a doctor. I had thought about it but when I got to Princeton and saw just how much studying was involved in Pre-Med is I was a little turned off. Then I started to Think About It and realized it wasn't where I wanted to be. The medical profession was getting commoditized by the HMO's and I didn't see a bright future for doctors.

A few months ago I was talking to a friend of mine who just graduated from a prestigious medical school. He was about to move in to his New York apartment and start his residency. I asked him how much he and his fiancee (also recently graduated) could expect to earn. He replied that he had a base salary of about 45K and his fiancee about 50K (she was in a more lucrative field). Here is another website that confirms this.

Now to me, that is just ridiculous. I've lived in NYC. 45K is not all that much. You put on top of that the hours you need to put in as a MD and the 4 years and great expense of medical school, and I just don't see how it works out. It will take years before they earn anywhere close to a decent salary and even then they will most likely have to work long hours to achieve it. Considering they were in school for four years, all the time I was earning money, and the picture gets bleaker.

Of course many of my friends will wind up having very fine careers and earn lots of money so there is little to feel sorry for. But still, when did it not become as lucrative to be a doctor.

Lakers: Opening Day

Today is opening day for the Lakers. I'm here to give my prediction for the season. They are a very interesting team that may be as bad as most of the experts say or they may end up surprising a lot of people.

Count me in the group that thinks the Lakers will shock a lot of people. I'm predicting 48 wins, and if things go well maybe more.

The Lakers won 34 games last year. Many think it will be just as bad. They look at the Lakers, see that they lost two of their starters, and got back an unproven player, and think it can only get worse. I think they are wrong. Here is why.

Kobe Bryant: I predict a monster year for Kobe, if only because he has such a huge ego and needs to prove to everybody that he is the best player on the planet. There is little arguing that he is a top 5 player in the NBA. It's hard to see how such a talented player can have two horrendous years back to back.

Lamar Odom: His play will make or break the Lakers. He is returning to his more natural position of SF where I believe he will take his game to another level. He also will have primary ball-handling duties which will relieve the pressure off Kobe and allow Kobe to do what he does best, score.

Phil Jackson: Look, can anybody be worse than Rudy Tomjanovich? The guys idea of an offense is run down the floor and chuck up a three as fast as you can. Then, he quits half way through the season. But the Lakers didn't just get anybody, they got the best coach of all time. Phil brings with him 9 championships ring, you better believe he wants the 10th and you better believe he wants to prove to people that he didn't just ride MJ and Shaq's coattails. Phil brings with him the triangle offense which I believe is the perfect fit for this team. It will allow palyers to do what they do best and limit what they can do wrong.

Kwame Brown: This guy is a physical beast. Fast, agile, strong, tall, he has the complete physical package. Problem is he never has been able to be consistent. He had a horrible time under the thumb of MJ and I believe he just needed a change of scenery. The guy has all the tools, and Phil Jackson is just the man to bring him out.

Defense: The Lakers scored last year. The problem was they couldn't stop anybody. This is where the departure of Chucky "the matador" Atkins will be of biggest benefit. The Lakers may miss his scoring ability, but they won't miss all the PGs running wild in the lane. Call it addition by subtraction.

The Bench: Easily the weakest part of the Lakers team. But I think they will surprise a lot of people if only because there are a lot of guys on the last year of their deals. They will play hard if only to get another pay day. Devean George is pivotal off the but but so is Aaron McKie and Brian Cook. It doesn't speak well for your team if you are going to depend on these guys off the bench, but I think there will be some surprises.

Add it all up, and I think there are easily 14 more wins in this team. I just hope the Lakers make me a smart man.

Women Are Too Sensitive

Pete Newell runs a Big Man's camp. It is a camp designed to teach basketball players who play in the front court about foot work, post position, etc. Many famous NBA big men from Shaquille O'Neal, Hakeem Olajuwon, James Worthy, etc have gone to his camp at one time or another.

Pete also runs a "Tall" Women's camp. I'm assuming they call it "Tall" because they don't want to offend some women by calling them "Big". Come on, isn't that just being a little sensitive? Do women who play either collegiately or play professional basketball for a living really get offended by being called "big"? Look at Margo Dydek, the tallest WNBA player. She is 7'2" for heaven's sake. Let me tell you something, if you are 7'2" you are big whether you are male or female.

Maybe its because I'm a guy and I just don't get why its derogatory to be called "big".

Yes, all my female readers may now tell me how insensitive I am.

Retirement: The Impending Doom

In the spirit of Halloween I thought I would write about something truly scary, the impending retirement crunch.

The first of the Baby Boomers turned 59 1/2 this year. This is a significant age because they are now able to withdraw from their 401K and IRA's without penalty. With the impending retirement of millions of America, do people realize the serious problems our country faces in the next decade or two?

It use to be that Social Security would be enough. We all know that isn't going to be the case. Then there were those who could depend on their employer's Pension plan. But even those promised benefits are now being attacked, thanks in large part to our own government who are not only allowing employers to reneg on their promises, but are in many ways actually encouraging it. Airlines like Delta and Northwest found it easier and advantageous to pass on their plans to the PBCG. Auto parts maker Delphi (and maybe even GM eventually) will likely follow suit. And these are the lucky people. There are those like Joy Whitehouse whose husband died on the job for Pacific Intermountain Express who gets absolutely nothing.

But of course now most American's have 401K plans. After all, your employer can't cut that right? Well, lets forget the fact that the average amount in a 401K plan is only $61,000. It gets even worse if you look at the median which is only $18,000 (meaning there are some with very large accounts. These are the same people who probably don't need the 401K). The problem is that most Americans have no idea how to actually manage their investment portfolio. People are told to diversify and forget it but most don't really even know what this means. Most people don't even know what Asset Allocation is and are thus in for a nasty surprise.

I'm not sure what is going to happen when all these people start retiring, and there just isn't enough to support them. Is the government going to step in and make sure these people are taken care of? This poses a very difficult problem because there will be a lot less workers for a lot more retires. The only thing government can do is start more programs and thus raise more taxes, but that has the effect of driving out business and making the working even poorer. This would feed on itself, causing more to lose their jobs, meaning less workers and tax revenues, and thus a need to raise taxes again.

Sometime soon, we as a country need to stare this problem right in the face and figure out how we are going to solve it. Otherwise, there are going to be a lot more stories like Joy Whitehouse.

Why Some People Will Never Be Rich

I was talking to my girlfriend the other day and she was telling me how she knew someone who was planning a child's birthday party. This person was by no means a wealthy person but planned on spending upwards of $2,000 on the birthday party, complete with a Jump House and all.

I would probably be considered by most to be a wealthy person but I have rarely in my life spent $2,000 on any single thing or event. I have bought my car, and paid for my Lasik surgery, but that's about it. I have had some huge birthday parties myself, with enough alcohol to supply an army, but have never come close to spending that much on a party.

What sense does it make to spend that much money on a child's birthday? What does that teach the child? The problem that most people have is not that they don't make enough money, it is that they spend too much. Even if they made more money, these people would find a way to spend it. They see what the Jonses have and they want it too, even if they can't afford it. (chances are the Jonses can't afford it either). They want their child to "have everything they never did" so they shower gifts and parties on them when the more prudent thing to do would be to save the money. Kids learn by watching their parents and it is a shame that the thing most American's teach their kids is that spending beyond your means is the thing to do.

Thanks A Lot

My girlfriend always teases me that Asian men are destined to be single. The main reason behind it is because the media always portrays Asian men in an unflattering light (when they portray them at all). Asian men are always asexual. They are always the wise old Confucius type or the nerd.

These two Chinese students certainly aren't helping the image. Watch the whole thing. Pay close attention to the facial expressions and the coordination. Thanks for making sure all Chinese men stay celibate.

Wal-Mart: Raise the Minimum Wage

In a page from the "Good PR , really underhanded move" Book, Wal-Mart CEO Lee Scott will ask Congress to raise the Minimum Wage.

Most of you know that I am not in favor of raising the minimum wage as I believe it actually hurts those it is trying to help. But this move by Wal-Mart is disingenuous at best.

Wal-Mart is the world's largest retailer and the world's largest private-sector employer. It has an effect (but admittedly limited) on the wages in this country. Most of it's employees are low-paid workers. If Wal-Mart wants to raise the standard of living for the poor in this country all it has to do is look in the mirror. If Wal-Mart makes a unilateral move to raise the wages it pays its low-cost workers than the other employers will follow or risk losing their workforce. There is no reason they have to wait for a government fiat to accomplish this.

Now Think About It. Why does Wal-mart really want to do this? I tend to think they have an ulterior motive other than trying to be nice guys. First, like I stated, it is a good PR move. But underneath that there may be something more sinister. This wage hike may put out of business the Mom-and-Pop stores Wal-Mart competes against. The Mom-and-Pop stores already face tremendous price pressures against Wal-Mart. They can't negotiate the same deals with suppliers that Wal-Mart has nor do they have the tremendous infrastructures that helps Wal-Mart keep prices down. Force them to raise their labor cost, and you just might be able to squeeze the very last competition that Wal-Mart faces. Of course, what is Wal-Mart going to do when it doesn't face any more competition?

Ben Bernanke: The New Fed Chair

Bush announced today that Greespan's successor will be Ben Bernanke. I personally think this is a fantastic announcement but for very personal reasons.

Ben Bernanke was chairman of the Princeton Economics department while I attended. Hopefully, being trained as a Princeton Economist under his watch will give me some insight to what he is thinking when he starts messing around with iterest rates. In reality, I'm sure this will mean very little to me but it still is a source of pride.

I never took a class with Professor Bernanke. Several of my friends did of course as he taught one of the introductory Economics course. It's funny. I remember people then talking about him maybe one day becoming Fed chair. I didn't think anything of it at the time but it is funny to see it come true. It makes me kind of wish I took better advantage of Princeton's very liberal open door policy for its professors. I wish I would have taken that opportunity to invite him to lunch and speak with him about his thoughts.

Home Loans: More Regulation

The Office of the Comptroller of the Currency is about to make it harder for people to qualify for interest-only loans and other exotic mortgages. They still will not admit that this will cause a fall in housing prices but say that there might be a "slowdown or even stop some price appreciation".

Aren't these people a little late to the party? I for one would love to see a precipitous fall in housing prices as I'm not in the market and would love to be. I also would love to see them tighten lending requirements as I don't know if the people who are taking out these loans actually know the inherent risk involved with them. But why now? They keep claiming that this won't hurt the national housing market because these types of loans are most prevalent in the high price housing markets out west.

Are these people just dumb or plain ignorant? I am not saying I know that housing prices will tank. I'm saying that can't be so dumb to think it can't happen if they do what they say they are going to do. Markets that have seen this tremendous growth are fueled by expectations. People now expect housing to continue to appreciate at a 10-20% rate year over year. In California, people's expectations are even higher. Markets like these follow a mob mentality. People see how rich their neighbors are getting and joy in on the fun causing even greater demand. When the slightest sign of problems arise, they will be the first to get scared and run for the exit. This causes the exact opposite problem as people see demand softening and try to cash in on profits before its too late.

So now they want to change the rules mid-game. They don't like what the market is doing and want to "fix it". Where were these people earlier when thousands of Americans jumped into these types of loans in the first place? I swear this feeds right into my conspiracy theory of how the rich get rich and stay that way. I'll have to post about it some other time though.

"Investing" On Faith

To stay on the topic of retirement plans does anyone else worry that I'm the only one in my company who asked to see the prospectus of the mutual funds that are available in our new 401K plan? The company eventually sent out a link to everyone so everyone could read them but if it weren't for me continually asking it would have never happened. I'm certain I will be the only one who actually reads it and contemplates how each investment fits with my retirement goals.

This should worry everybody whether you are invested in the stock market or not? Why? Because I believe this will have really bad consequences down the road for the entire U.S. population. The government decided to make people responsible for their own retirement by allowing IRA and 401k plans. This moved employers from Defined Benefit plans (pensions) to a Defined Contribution plan. The problem was that they didn't teach anybody about investing. You can legislate a plan, but if you don't teach people how to use it becomes a very dangerous weapon. The forced people to invest but they didn't teach anybody to become investors. Don't people see the problem with this?

I liken it to playing basketball. I love basketball. I feel totally comfortable playing with people who know how to play the game. However, any idiot can lace up a pair of sneakers and call himself a "player" but that doesn't mean he actually knows what he is doing. The problem in playing in games like this is that people get hurt. These "players" don't have good body control and don't know what they are doing so they just run into people. The chance of injury skyrockets when these types of players are on the floor.

The same can be said with these retirement plans. People have been blindly told to invest in the plan, save for retirement, etc. but not really taught how to do it. As a perfect example of this, during the 401K meeting an older worker complained about how her portfolio was losing a lot of money. All I could think to myself was, "Why on earth are you in investments that have high volatility?" What happens if the stock market crashes and doesn't recover for 10 more years. It has happened before and it will happen again. What happens to these people? The investment strategies they preach are good if you have a LONG investment horizon (even then there are problems but I won't get into that).

I was further dismayed when I asked during the meeting about moving into a money market account. Everyone at the meeting looked at me like I was crazy. Why would he invest in a money market account? Doesn't he know he needs to be in stocks? There is no return in a Money Market. I can easily say that I was probably the most financially astute person in that room. I know perfectly well why I wanted to be in a money market fund and how it fits into my overall strategy. Nobody else in that room knows my personal situation, financial goals, or my investment strategy yet they are willing to blindly believe I have no idea what I'm doing. This coming from a group of people who have no interest in reading about where they are putting the money that will supposedly secure their future and wouldn't understand what they read even if they did. This is not an indictment on these people. The government created this problem by mandating a program and then not teaching people how to properly use it.

All these people playing a game they have no idea how to play. It's dangerous. It's dangerous for everyone.

The Global Shift

We live in a new world economy. Globalization has produced huge benefits to all making products cheaper, quality better, and taming the beast known as inflation.

That is not to say that individuals have not been hurt by this trend. Many workers, both active and retired, are waking up finding out that they are not worth as much as they thought they were. Just yesterday, GM announced they had reached an agreement with their union to slash health care benefits. GM claims it has a cost of $65 an hour for each hourly worker it employs (when health care, retirement benefits, etc. are factored in). In contrast, Delphi's operations (a fromer subsidiary of GM) in China cost it only $3 an hour per worker. We have moved from the industrial age to the information age and it just isn't cost effective to pay the guy who assembled the widget more than the guy who designed it in the first place.

Here is the reality. You can not depend on any one thing or entitity for your financial security. These people are dependent on the health of American auto industry for their livelihood and they are quickly finding out that the American auto industry simply can't compete. Those that are in retirement are now reliant on GM and Delphi to honor its retirement benefits (which they can shed if they declare bankruptcy). What happens to all these people who are too old to reenter the work force yet the benefits that were promised to them are all of a sudden gone?

Here is a lesson for everyone. Don't put all your eggs in one basket (by the way, I hate this advice when it is given to people and their 401K plans but that is another story). This is your financial well-being we are talking about. Don't plan on the government, your company, or anyone else for that matter to be there when you retire. Heck, I would be wouldn't depend on your 401K either. You need to have a broad comprehensive plan, not just a bunch of hope and prayers.

Real Estate: Oh Crap

I feel like all I speak of is the doom and gloom of the financial markets. Here is another tidbit.

Tom Barrack, one of the wealthiest real estate investor in the world, is getting out of the U.S. market. He states, ""I feel totally safe playing polo on a field full of pros. But when amateurs are all over the field, someone can get killed. They have more guts than brains. They charge after every ball and don't know when to hold back." It's the same with the U.S. real estate market right now: "There's too much money chasing too few good deals, with too much debt and too few brains.""

Seriously folks. The peak has been reached. Get out now. The bubble is about to burst. I wasn't as adament about calling the top before but I am now. When the smartest minds declare its time to get out, you best listen up and pay attention.

Talk Radio - I'm Getting Old

I have found that I almost exclusively listen to talk radio now. First, it was just sports talk radio but lately I've been listening to things like shows about money and health. I'm not sure when this happened, but I use to think that only old people listened to talk radio.

I just find it much more interesting to listen to talk radio, which is always different, than listening to the same 20 songs over and over again on the music stations.

Why Social Security Tax is Evil

I hate Social Security. I hate the idea of the government taking money form me in order to serve my "best" interest in the belief that I'm too stupid to be able to save my own money (Probably true for most Americans but I should not be punished for the actions of stupid people). But this is not what this post is about. This is about the Tax that they take from you every paycheck. It is a truly evil tax.

1. It is the largest tax most people pay - Yes it is, even higher than most people's federal income tax. That's because not only do you have to pitch in your 7.5% but so does your employer, effectively making it a 15% tax. And it isn't a marginal rate. (You have to earn just under $35,000 for it to break even)

2. It's a stealth tax - You probably don't think about the above reason and thus, completely ignore how large the tax really is.

3. Taxing you multiple times - You pay income tax on your contribution to social security yet NEVER see the money. That's right, your social security contribution is not taken away from your taxable income, thus you pay taxes on it even though you never saw the money. Then, when you actually receive your Social Security check, (if you get that old) you are taxed again.

4. It encourages the government to overspend - since the government currently takes in much more in Social Security than it pays out it is an incentive for the federal government to spend more now since the deficits don't look as big as they actually are. Of course all this does is delay the inevitable, taxes must always equal government expenditures either now or later.

5. It's regressive - That's right. It hurts the poor, the very people the program is supposed to help. How can this be? Because there is a cap on the maximum amount you can be taxed on, about $90,000. After that, you stop paying social security tax. That effectively drops your tax rate by 7.5% as soon as you enter this income bracket (even more considering your employer doesn't have to pay his half either)

This system just keeps giving me more reasons to not like it.

The NBA Dress Code

This upcoming year, the NBA is instituting a dress code for its players. Players will be required to wear a suit for all team events which includes travelling with the team. Many NBA players have come out against the dress code. Some of the choicest quotes include:

"It sends a bad message to kids. If you don't have a suit when you go to school, is your teacher going to think you're a bad kid because you don't have a suit on?" - Allen Iverson

"I don't see it happening unless every NBA player is given a stipend to buy clothes," - Marcus Camby

I usually support NBA players and sports athletes in general. Remember, I'm the one who thinks athletes are not overpaid. But the NBA players make it very hard to defend them.

If Allen Iverson thinks that it sends a bad message to a kid because he WEARS a suit he has to get a clue. It's a fact of life. People judge you by the way you look but what kid is going to think to himself, "Gee I don't wear a suit to school. I suck." What? This kid doesn't see other people wearing suits on TV all the time? What is to prevent the kid from feeling bad because Iverson wears $100,000 earings. What about that huge diamond studded necklace he sports? Are kids going to feel bad because they don't wear THAT to school?

But Marcus Camby just takes the cake. This guy is going to make $7 Million this year and about $40 Million over the next 5 years. He thinks the NBA should give him more money to buy clothes? Hello! Get a real job and ask them to give you a stipend to buy some clothes.

Imagine not being able to wear whatever you want to work! In almost every place of work there is a dress code. I can't come to work in tattered clothes or open-toed shoes. I am required to look presentable. My company doesn't compensate me for these clothes. If you really don't like the new NBA policy I suggest you go find another job.

Fewer Can Afford California Homes

A "recent" study shows that fewer and fewer Californians can afford the median California home. (I emphasize "recent" because everyone who lives here has known this for quite some time).

The median price of a California home is now $568,890. To afford a traditional mortgage you would need to earn an income of $133,800. This means that 14% of California households can qualify for a traditional loan. This of course assumes you can put down 20% of the purchase price which amounts to about $115,000. Now how many households have that much cash lying around?

How on earth do people think this can be sustained? When only 14% (if that) can afford to buy a house in an area something is wrong. What I view as the real problem is that the people this really prices out are those that are younger and just entering the job market. This will cause more and more younger families to look elsewhere when deciding where to settle. This will have serious long term effects as the working population will age and the infusion of young (and cheap) talent will erode California's economy.

What Are the Knicks Thinking?

He might just be the stupidest man on earth. What makes him more dangerous is that he wields a huge checkbook.

Yesterday, Isiah Thomas, GM of the New York Knicks, traded for Eddy Curry. In case you don't know, Eddy Curry was formally of the Chicago Bulls. He had a very contentious fight with the Bulls over his heart (not that he has shown any heart in games but that is a different story). Eddy Curry had to miss the playoffs last year because of heart problems. One heart specialist has suggested that Eddy Curry undergo a DNA test to see if he is prone to heart problems. Eddy has steadfastly refused and demanded to be traded. No Insurance company will touch the contract so if any team signs him, they are on the hook for the FULL amount of the contract.

Now, I back Eddy Curry on his refusal to take the test. It all seems like a scene straight out of Gattaca for me, requiring you to take a DNA test to see what your potential (both good and bad) really is. But there is no way I do what Isiah Thomas does. Give a man with a potential heart problem a GUARANTEED 6 Years and 60 million dollars.

In Isiah's small defense, the contract is reportedly only guaranteed for six years if Curry can play for three years. But my real concern is that Eddy Curry is

• Fat
• has a poor work ethic
• He is a horrible rebounder
• He is a horrible defender
  

My concern if I'm Isiah is not that Eddy Curry will have heart problems. It's that Eddy Curry is going to suck and I will have to pay him for six years (The contract only becomes void after three if Curry can't play, not if he sucks). What's worse, Eddy has an out in four years. So if Eddy turns up to be any good he walks after four years. So you take a huge gamble on a guy, it works out, but when you start reaping the benefits the guy can leave you.

But wait, it gets worse. Since Curry's contract is uninsured he is essentially untradeable. No other team is going to take on such a huge contract when insurance won't cover it, the Knicks are the only team with that kind of money. So you are definitely stuck with Curry no matter how bad he is. Add that to the fact that the Knicks essentially traded a bunch of draft picks that will only get better the WORSE Curry is than you have a really bad deal.

Look up idiot, and Isiah Thomas may have a picture there.

I'm Going to Be Rich

I've decided I want to be rich. I'm serious. I made the decision last night.

I know what you are saying. Everyone says they want to be rich. But few people actually understand what it means to be rich and even fewer go out and do anything about it.

I realized something about me. I have an fear of being poor. This fear of being poor is probably holding me back from being rich. Strange huh? But I have almost nothing to be afraid of. I easily take in more in income than I spend. This is due in large part because I have the discipline to control my spending (which by the way is one of the keys to becoming rich but that is a topic for another day). I also have no debt so even if I lose all my savings it's not like they are going to start repossessing my belongings. Even if they did, I wouldn't care since I, unlike most Americans, do not base my happiness on my material possessions.

So why do I hesitate to take risk and go for broke? I have so little to actually fear but we are taught from such a young age to go to school, get a good job, save money, and play it safe. If I stay on the course I am on now I could be moderately wealthy in about 20 years all the while working hard, saving diligently, and not enjoying myself very much. Is that what I really want? How many really rich men got that way by playing it safe? When in life can you be successful without first failing? Sure, I'm going to take my lumps but isn't that what life is about?

Food Portions

I had lunch the other day at Denny's. I'm not a huge fan of the restaurant but it was conveinent to somewhere else I had to go. I ordered the meat lovers special for $5.00. It seriously had enough food to feed 3 as I only ate about 1/3 of it. Two eggs, two strips of bacon, two sausages, hash browns, a slice of ham, and 3 pancakes. That is just way too much food.

How delusioned are we all in the U.S.? For a mere $5 we get a meal with all that food that we couldn't possibly eat. And then I read a story like this which talks about how americans are overweight. Is their any confusion why this is the case? American food portions are just too big.

The problem is that restuarants have a big incentive to overfeed us. The incremental cost of a restuarant to provide more food is small but the incentive to do so is huge because people's ratings of restaurant are due in large part to how satisfied they feel when they leave. Feeling full is one sure way to make the customer feel satsified. So restaurants cater to the greatest common denominator and make sure that the person who can eat the most feels satisfied while someone like me, who can't possibly eat as much, also leaves feeling full.

It isn't the restaurants fault. Americans are taught to finish their plate because there are starving kids in Africa. (as if your food can be boxed up and sent to them) So we dilligently eat all the food that is placed in front of us, even if we have past the point of being hungry. I'm not sure what can be done. I don't expect restaurants to change their policy and I really don't see American's being more concerned about it either.

Online Dating

I have now dated my girlfriend for a little over 5 months and I thought it was time to put down my thoughts on online dating, and specifically the service I used, eharmony.

First let me say that I'm very happy in my relationship. The girl I'm dating is wonderful and we are very compatible. Other than the fact that she is a USC Trojan she is great, but hey, not everyone can be perfect. I'm actually shocked with how well we get along and how much are interest and beliefs match.

I think most can understand that I was a little hesitant to try the whole online dating thing. Even in this day and age I felt it smacked of a little bit of desperation. But I figured that I was a pretty normal person and there must be other normal people contemplating such a move. I just had problems meeting any new people as doing the whole bar thing isn't for me (even though I have a knack for being able to just talk to complete strangers). In the end I reconciled it by just chalking it up to a change in our society that technology has enabled. After all, why is it any better to meet someone in a complete stranger in a bar than to meet a complete stranger through the internet?

So I took the plunge and signed up. The process is long but I suppose better than say Match.com which just feels like a meat market.

So what is the final verdict? I can't recommend it. What? How can that be if I met someone wonderful online? Well I think I was one of the lucky ones. Of all the people I was "matched" with this is the only one that worked out. I talked to a few people and went on a few dates but didn't really feel like I was all that compatible with any of them except for my current girlfriend. Most of my dates' experiences were the same. They weren't really meeting a lot of compatible people. I think for a few of them it made them feel even worse as if they couldn't make it work with someone online, how hopeless must they be?

Also, just like in the real world, you get a lot of fake people. People who say they are looking for one thing, but really aren't. My girlfriend is guilty of this. She put she was open to meeting anyone from anywhere but rejected anyone she met who lived to far away. You have an option to specify how far away someone can live that you would consider dating, so why even put "anywhere in the world" if you really only mean "within 100 miles"? I also found that a lot of women who think they are open minded aren't. Most women don't think they are racist but more than a few women did not want to date me simply because I was Asian.

I also don't like how Eharmony will match you with people who can't respond back to you. I had my account closed for months but still received "request for communication". These request just remain unanswered and you have no idea what is going on on the other end. They do this to maximize the number of matches they provide to people but don't let communication happen unless both sides are paying members. This can be somewhat frustrating.

But I guess it only takes one, and thus far it is working out for me. Dating is a process, and just like anything else, you probably have to have a few failures before you finally have success. So if you set your expectations low, and treat online dating as just one part of your dating strategy, it might work out for you.