28

Today I turn 28. 28 is actually a lucky number for me. It is not only the day of my birthday, but it is also the day my sister and brother were born. In fact, every child born with my family name in America is born on the 28th. Kind of strange huh?

It has been quite a year. It really doesn't seem like a year ago I was taking a break and visiting Jenny in Princeton. A year ago I wasn't living with my girlfriend, I hadn't even met her yet. I was still living in California and I was still at my previous job.

So much has changed, and I must say it has all been for the better. I'm much happier in this time and space than I have been in a long time.

[sappy]

The largest contribution to that change in attitude is no doubt the girlfriend who always manages to put a smile on my face. I love that I have someone to share my day with after a long day at work. I love that she always takes such good care of me, even when I am a pain in the ass. I love that I never feel lonely anymore because I get to wake up next to her everyday

[/sappy]

Also a major factor is the change of job. The job isn't perfect but its a vast improvement over the previous employer. The work is just a lot more interesting. It's good to try and solve problems that actually matter to a large majority of people. I joke about it at work but here is the sad statistic. I spent 4.5 years at my previous employer. In that time I worked on several small projects but spent most of the effort on 2 major products. By the time I left, we had sold exactly 1 unit each of those products. ONE EACH!!

Compare that to the more than 1,000,000 subscribers we will in all likelihood reach with my next product and you can see the vast change in scope I am working on. True, my indvidual role is much more limited in my current job. But even so, it isn't 1,000,000x less.

What a year. I can't imagine that my 29th year on this planet can bring about any more change than my 28, but hey you never know.

Aftershave

Wearing lots of aftershave is bad.

Wearing lots of aftershave to work is worse.

Wearing lots of aftershaves to work when you work with mostly men is unexcusable.

Fixing Ikea Furniture

I found a great way to fix cheap Ikea furniture. One of the problems with buying Ikea furniture is that it is often quite fragile. The dowels and the screws they give you to put together the furniture is bound to fall apart. The joints just won't hold when put together with this cheap solution.

I have a table I bought from Ikea. Despite the fact that it was one of the more expensive pieces that they have, it too suffered from the "Ikea Wobble". I've own this table for well over 4 years and have never been able to tighten the joints tight enough to prevent it from wobblign. Sick of this, I decided to try and fix it. So I bought this glue called Gorilla Glue. It works great. I used it on all the joints of the table and now the thing is sturdy as a rock.

Must Resist ...

I'm not sure what is going on but I am slowly starting to use products made by Microsoft. Most of you know, I hate Internet Explorer, or more precisely I hate IE 6. I much prefer browsers like Firefox because of tabbed browsing, which in my opinion is a must-have feature.

But in the spirit of helping out, I dowloaded and installed IE 7 which currently is a public beta. I figured I would give it a try because it has things like tabbed browsing and pop-up blocking and I have to stop believing that Microsoft is the evil empire. Further, there are still many sites that just don't render correctly on Firefox, specifically ones with more multi-media. However, I refuse to use a product I don't believe is any good just because the company I work for may happen to create it. If Microsoft can't make a good product, I will be happy to use a competing one.

Well I'm here to say that IE 7 is a big improvement. So far, I don't have any real complaints. I'm not ready to endorse it over Firefox, but Microsoft is closing the gap. It's funny though, I still have some reluctance to help out Microsoft even though I am now Microsoft. I don't trust myself :) Some of my willingness comes from the fact that I know in my product, there is a ver concerted effort to protect users privacy.

Wait. Did you hear that? I swear someone just said, "Resistance is futile."

Seattle Rain

Coming from Southern California, you can take for granted that when it isn't rainng, it most likely is not going to rain in the next few minutes. No such luck in Seattle.

I walked out of my apartment today. It was a nice day, somewhat overcast but not too cold and not raining. I only left with the sweatshirt on my back and not much else. I then got to work and decided to check out the library. Again, no rain and the library is only down the street, so I decided to walk.

It wasn't raining so I took for granted that it wouldn't rain on my way back. Mistake. Of course, this is Seattle, not Los Angeles, and sure enough it was raining on my way back in. Somehow, I'm going to have to try and remember that no rain now is no guarantee for later.

Jelly Belly's Deceptive Marketing

I love jelly beans, especially the Jelly Belly brand, but they just did something that really pisses me off.

I bought a box of Jelly Bellys. They are expensive, and I recognize this, but I like them enough to buy them anyway. But I bought a box which was a fairly good size, probably 8" x 5". Now it was clear that the box didn't contain all jelly beans and there would be somewhat less than a full box but when I opened the box I was greeted by a bag that wasn't even half the size of the box.

Now why on earth do you package a bag of candy in a box that is twice its size. There is only one good reason, to trick your customer. It's bad marketing and bad business. Even though its my favorite candy, I may have to think long and hard before I buy any more Jelly Belly branded Jelly beans.

Sugar

In the category of "one of those small things that makes you really happy."

I come into work today and go get my standard 1/2 cup of coffee to start the morning. I am the type of coffee drinker who goes light on the cream but HEAVY on the sugar. One of the most annoying things about it is that I have to open lots of little packs of sugar to get my coffee just right. It's trivial, I know, but doing it every time I want a cup of coffee can be really annoying.

Well the miracles of all miracles has happened. I now have sugar which I can pour from a can. I'm very excited.

Orientation

I finished my orientation today. It was orientation so it wasn't very interesting but it wasn't as bad as it could be. It lasted a day and a half and went over various topics like corporate responsibility, diversity, leagal affairs, and IT. They made the most of the session and one of the highest compliments I can give such an event is that it didn't temper my enthusiasm for my new job.

What may have though is that I had some issues setting up my computer and connecting to the corporate network. You would think at such a high power tech company and with a tech saavy employee like myself, there shouldn't be too much of an issue. Oh well, nothing is perfect.

One of the most impressive things about going from a small company to a large Fortune 500 company is the sheer number of benefits you never realized you don't have. One of the things I kept saying to myself throughout the whole orientation was, "What? Yet another benefit?" Things like charity matching, discounted services, and paid activity fees. These things don't really show up on your bank statement but they really make a big difference.

Like in my other blog, I won't be talking much about work in this space. In all likelihood this might be might last post about it.

Seattle - First Impressions

So far, so good. I like Seattle a lot. The only negative thing so far would be the weather. It has rained 2 out of the 3 days we have been here and it has been very chilly, but so far nothing I can't handle. My girlfriend is even adjusting well and she has never lived outside of Southern California. We decided to drive around during rush hour and it wasn't that bad. It wasn't good but coming from L.A. it wasn't anything I couldn't handle.

Yesterday we went into downtown Seattle to do some touristy type things. We went to the Seattle Space needle which was pretty cool. We even had Cotton Candy which I hadn't had since I was 10. We were all excited to take the Monorail but found out that it was broken. Bummer. So we ended up walking the 8 or so blocks into the retail core to do some shopping.

I am still debating where to live but I am leaning toward the Bellevue area. It's close to work and there are some things to do there. I didn't really like Redmond because it seemed to quiet and I didn't really like downtown because it suffers from what all downtowns do. It was too busy and I hate living in places that have no parking or where you have to pay for parking.

Think Taxes Don't Matter?

Yes, in case it isn't clear, I'm moving. I'm moving out of the great state of California and to the gloomy state of Washington. Why on earth would I do that?

This is due in no small part to one of my favorite subjects, taxes. You see, California has an absolutely horrendous tax system. It has an astounding 9.3% levy on income over $56,642. To make matters worse, it has a pretty high sales tax and the gas tax doesn't help either. Now in comparison, Washington has NO STATE INCOME TAX. Of course it has to generate revenue somehow which it does so through sales, gasoline, cigarette, and property tax. But guess what. Everyting except the Cigarette tax is lower in Washington than in California!

Even if they weren't higher it would make little difference to me since I tend to save a great deal of my income rather than spend it, I don't smoke, and I don't own (and will not own for the time being) property. Now, I surely pay the property tax indirectly through rent but considering I can get a much nicer place for much cheaper than I can get in California, I think I can live with it.

Now I had a competing offer on the table with a company in California. The money was about the same but in the end it was pretty clear that the Washington offer was better simply because I would not be paying state income tax on it. Washington had a built in 10% edge. (There were other reasons I took the job but it's not like I ignored the effective 10% raise).

Ever hear of the Laffer Curve? It is basically the idea that you can only collect so much in taxes before the revenue drops off because people stop working or move to avoid the tax. Believe me, it's true. And the story isn't isolated to just me. I know plenty of other people who make a great deal of money who decided not to come to California in no small part to the rather unfair tax burden.

So instead of getting some taxes from me, and getting the productive work that well-paid workers provide, California will get nothing from me. But hey, you have the beaches and sunshine right?

Moving: The Good

Sometimes moving is a real pain in the ass. But I actually like moving. The thing about moving, is that I take it as an opportunity to clean house. It is amazing how much crap you can accumulate the longer you live at a place. I haven't moved in over 3 years, the longest amount of time I have lived in a place since I left my childhood home on my way to college. As I start going through things, I'm realizing how much crap I have that I probably don't need, and I'm starting to throw it out. I have old magazines, brochures, receipts, etc. things that I have absolutely no use for and end up taking space in a corner somewhere.

Out with the old in with the new. I did it with the job, now I need to do it with my stuff.

How Not To Grow A Company

Here is a quick list about how to not grow your company

• Pay less than the prevailing market wage.
  
• Give less than average raises. (which compounds the above problem two fold)
• Do not have a bonus structure that rewards your top employees.
• Do not give stock to key employees thereby eliminating incentive to see the company do well.
• Give your top employees assignments that are completely uninteresting.
• Do not communicate to your employees how you plan on allowing them to grow their careers.

It's funny. If your stated goal is to grow the company, and grow it quickly, then you have to be willing to pay the piper. Good talent does not come cheap. Good talent does not come simply to help YOU make money. Good talent needs an incentive. Those incentives are normally either money, good opportunities, or interesting work. By doing the above, you eliminate the possibility of ever finding good people. This problem compounds itself because good people want to work with other good people. Working at a company like the one above has to make you wonder about the people who still work there.

I am one who believes you should not complain about your current work situation because if you think you are underpaid, overworked, etc. it is up to you to prove your employer wrong. We live in a free society where one is free to work or not work for any given employer. I have had opportunities to leave before. In every case there was more money, more stock, better work etc. There was always some incentive to work hard to see the company do well. (I did not leave until now because even though the offers were good, I knew I could do better and I was not looking to leave my company, even if it was bad, for just any other opportunity)

I'm just not sure what delusion top management is under to believe that they can grow a bad company to a great company with talent that is below the competition. I am not advocating that a company goes overboard. I'm not suggesting you should pamper your talent or give them excessive perks. I am simply saying that you have to provide some incentive for top talent. Hoping top talent wants to work for you "just cause" will never work.

Silence

It's odd. Even though I have more time on my hand now, I have less time to do things like Blog. Sorry for the sudden silence that has suddenly overtaken this blog. I will update a little more as it becomes a little more firm.

Everyone have a great Superbowl weekend! My pick? My future hometown!

Change Is In the Wind

Change is good. Change is exciting. Sometimes you have to have change to just get away from a bad situation. Sometimes change is good in and of itself because it opens up new and wonderful opportunities. Sometimes its a combination of both. I have never been scared of change. Maybe it's because I handle it well; I've rarely if ever felt so overwhelmed I needed to quit. I believe that if you don't accept change you become like the dinosaurs, and I am not about to be going the way of dinosaur. I am going to not only accept change as it comes, but seek it out.

Small changes can be a Microcosm of the much larger picture. Seemingly insignificant events can cause a chain reaction, the butterfly effect. This chaos can be frightening, but if you navigate it correctly, you should be able to come in for a soft landing.

Time to Cancel Blockbuster?

I've been thinking more and more that it is time to cancel my Blockbuster subscription. Lately, its felt more like a chore to watch all the movies I get from them then something I really want to do. I still get about 3 movies a week from them, but in all honesty, I watch them somewhat reluctantly.

I'm also not crazy about the service. The movie turnaround time is pretty bad considering I'm not a heavy user anymore. Most of my movies don't get scanned in as "returned" until about 2 days after I send it. This despite the fact that their are "distribution" centers all over the L.A. area.

Also, they do really funny things with my queue. I get movies I don't really want that are like 5th or 6th on my list of things I want. I'm not a heavy user anymore. I should be able to get one of the top 5 movies in my queue. I know Netflix throttles its users and determines priority this way, and I'm pretty sure Blockbuster does it as well, but this should not be happening to me considering I'm a relatively light user.

Maybe I'll give it another month. But I'm starting to think it might just be worth it to just rent movies the old fashion way.

Kobe Bryant Scores 81 Points!

It was one of those games you talk about where you were when it happened. I happened to be in the car with my girlfriend after having a great dinner at Houstons. I had missed the previous two Laker games traveling and I didn't want to miss this one, but it was a special occasion so I made an exception.

On the way back from the restaurant I tuned in to see if the Laker game was over. I had caught the first quarter of the game and the Lakers were down by double digits and playing really bad. I wasn't expecting much.

Much to my surprise, I heard the announcer say that Kobe had scored a career high 67 points. I thought I must have misheard. There was no way he could have gone off for 67. Then I thought, the game must be almost over. But there was still five minutes left in the game!

I started to drive quicker, in an attempt to get home to see the end of an historic night. Kobe didn't disappoint. He would go on to score 81 points. 81 POINTS!!!! Do people realize how insane that is? It's the second most points scored in an NBA game ever, second only to Wilt Chamberlain's 100 point game. (which will never be beat. Then again, why bet against Kobe?)

Some people will say Kobe shoots to much, and needs to pass more. But I play a lot of basketball. I've played in games where I thought guys are shooting the ball way too much. But I also have played in games where a guy is just on fire. And if a guy is on his way to score 81 points in a game, you shut up and you pass him the ball. You do everything you possibly can to make sure that he gets as many looks as possible. It's not often you get to witness history.

Lies That HR Tells

I was in my company meeting the other day and the HR lady told people they made a mistake about how a charity we are running would work. Instead of the money being taken out of on a pre-tax basis, it would be taken out post-tax. But she assured everyone it would be OK because you can just take care of it at the end of the year on your tax return.

I couldn't believe the crap I was hearing. If you know anything about taxes (and you really should if you don't) you know that THIS IS NOT THE SAME THING! I can't believe any HR person can get away with saying that it is.

What am I talking about? Most people DO NOT itemize their tax bill. Most people take the standard deduction which is $5000. That means, you are better off taking the standard deduction until you have at least $5000 in deductions. How many people have $5,000 in deductions ($10,000 if you are married)? Fully 2/3 of all Americans take the standard deduction. That means they get NO tax benefit from donating to charity, having a mortgage, or having any business expenses. Zip, zilch, nada. All those tax breaks you supposedly get (my favorite being the mortgage deduction) actually don't benefit you unless you have $5,000 in other deductions.

Now, should the #1 concern about giving to charity be your tax break? Of course not. But for an HR person to say that it is equivalent is just a flat out lie.

Maryland Overrides "Wal-Mart" Bill

Yesterday, the Maryland Senate overrode the veto of a bill that would require employers to spend at least 8 percent of its payroll on employee health care or pay the difference to the state in taxes.

This is effectively a "Wal-Mart" bill because it is the only company in the state that currently hires over 10,000 employees and does not pay the minimum 8 percent.

Now any regular follower of my blog knows on what side of this issue I fall, but I am not here to argue that. I just wish, just once, that a company like Wal-Mart would say, ok, if that is the cost of doing business, so be it, and then pick up and walk out.

It will never happen, but boy do I wish I could see it. Then we would really get to see who needs who. Maybe Wal-mart really does need to have a presence in Maryland. Maybe they need the of revenues that state represents to Wal-mart's bottom line (my guess would be that I would fall in less than 1%). Maybe the states would realize that some jobs are better than no jobs, even if the state has to foot some of the medical bills. Maybe then, the citizens of a state could decide once and for how important Wal-mart is or isn't.

It may be sick and perverse, but the economist in me would love to see the experiment.
It's funny. As much as Wal-Mart doesn't think about , or just discounts, the negative effects of its policies on the state's economy, the Wal-Mart critics don't think about the positive effects Wal-Mart brings either. We as a society are so compartmentalized. We see things for what we want to see them as and how they directly affect us without thinking about the larger consequences.

GPS - where is the line?

On the radio today, there was a story about Sprint refusing to release the location of a GPS phone which would have helped find the location of a child which was mistakenly taken when a thief stole a SUV in Riverside. Sprint has a procedure to allow law enforcement to obtain the information, but apparently this did not take place. In response, Riverside politicians threatened to now allow Sprint to put up any more Cell Phone towers.

Are you kidding me? First off, I'm not entirely sure Sprint did the wrong thing. While I can sympathize in this particular case, the life of a child was at stake, there is no way that Sprint cna just release the position of one of its phone for whatever reason. But T, how can you be so heartless? The life of the child was at stake!

Think About It. What happens the first time a person calls screaming that their child is missing and in fact the phone is on the person of their ex-girlfriend who they are now stalking? She is trying to hide from him, but he clevely concocts a story and bam, he finds her and kills her. Maybe this example is a little extreme but the point remains, you can't just be giving out the position of these phones without proper clearance from law enforcement.

I mean really, clearly this is a stunt by the idiot politicians of Riverside to win a few brownie points with their constituents. Their threat of not allowing any cell phone towers is hardly a stiff penalty considering that Sprint probably has coverage throughout most of Riverside already.

401K - The Lie

There is so much crap spewed about the 401K plan it drives me nuts. This was painfully evident to me when we last had our 401K meeting. I for one do invest a great deal of money into my 401K but I do it full well knowing how it fits into my overall financial strategy. (I am however about to drop my contribution to 0% for the next few months) Many people do not.

1. 401K plans make less sense for high-income individuals - How can this be? I mean don't the rich save more in taxes? It depends. If you remain a high income individual retirement, which is likely, than you will pay taxes at your personal income level. However, if you were to invest in the stock market instead, you would only have to pay the capital gains tax instead. This stands at 15% rather than the 35% you would otherwise get taxed.

2. You may end up paying more in taxes later - The US has historically low tax rates now. If you believe, like me, that the budget deficit, the trade deficit, aging baby boomer population are areas of major concern, than you probably believe that at some point, the U.S. will raise taxes again to cover the shortfall. That being the case, it is better to pay taxes NOW rather than pay higher taxes later. Also, in all likelihood, you will have less deductiosn than you do now. You will most likely have your mortage paid off, no child deduction, have less business expenses, etc.

3. Diversification - Most people just don't understand what diversication really is. It's kind of frightening really. They think diversification is just picking lots of the different funds in a 401K plan and that will handle diversification. This concept is just flat out wrong! In fact, people may be exposing themselves to much more risk than they expect when they follow such a strategy.

4. People who are investors who shouldn't be - Could you imagine if the government mandated everyone had to drive their own car to work but nobody had to take a driving test? There are enough crazy people on the road as it is, can you imagine if there were even more people who had no idea what they were doing. That is essentially what they did when they started 401K plans. Millions of people started investing in it but have no idea what they are really doing.

5. Your money is not liquid - Most people vastly underestimate the need for liquidity but it can be very important in times of financial crisis. The problem is that you are not able to withdraw funds in a 401K plan until you reach 59 1/2 without paying some significant penalties. If you were to take the money and invest it yourself instead, in the exact same financial products, you would be able to pull out your money at any time without penalty.

6. You have much more limited choices - You are at the mercy of your 401K plan in terms of what you can invest in. If you have your own IRA or just money in a taxable account, you have a lot more options in terms of what you can invest in. Maybe all the funds and investment choices in your 401K plan just suck, and you would be better off diverting your money into different vehicles.

Again, my advice is not to not invest in your company's 401K plan, my advice is to really Think About It. Don't just do it blindly because you think you should. However if the alternative is to save in the 401K plan or not save at all, then, of course, save in your company's 401K plan.

Pat Robertson is an Idiot

If there is a reason I will never believe in any particular religion it's because of idiots like Pat Robertson and statements like this.

The callous way so called religious leaders can throw around the idea of divine retribution is just appalling to me. If God is so worried about smoting people who do bad things how come there are lots of murderers, child molestors, rapists, terrorist, etc. running around? Where is the line? How does God determine who he is going to smote and who he doesn't? If he hasn't smoted the murderers and child molestors, is he impliciting saying that those things are OK?

Blogging Dropout Rates

I have been blogging now for almost 3 years (My exact first post was Jan. 8 2003 in my old blog). I have blogged on and off but for the most part have been pretty consistent, trying to get out 3 or 4 post a week.

I wonder how long the average blog runs. I wonder how many blogs are already abandoned. If you try and get some of the more popular names on blogspot you will find many blogs that are simply abandoned. I wonder why blogspot doesn't just go and reclaim dead blogs. Maybe for posterity? Couldn't they just archive the pages somewhere else to free up the urls? I would think they could send an email to the blog owner telling them they need to confirm they still want the blog, and then delete it when there is no response. This could happen after a period of inactivity, say 6 or 12 months.

I found some statistics here and here but nothing I would say as definitive. My bet is that the average blog only last a few weeks before someone gets bored and decides they no longer want to do it. I bet that the percentage of dead blogs must be very high, my guess would be about 85% of blogs that were once started are now dead. Anybody else have some guesses.

My New Years

It was rather uneventful. My actual New Year's Eve was spent watching 24 with a bunch of friends. Pretty good show. But I can no longer stand Elisha Cuthbert, and I use to think she was kinda cute.

The next day was a little more exciting. My girlfriend and I walked down the Rose Parade Route. I had forgotten how much I don't like large crowds, especially rowdy ones, which is the case with those lining up for the parade. We ended up walking all the way to Orange Grove to see the floats up close, and that was well worth it. I had never been that close to the floats before, so it was great to see them.

However, the walk back wasn't so much fun. It started to pour right when we turned around to walk back home. To make it worse, we didn't realize how far we had really walked. All told, we walked 8 miles from my house, to the end of the route, and back. Needless to say, I got home very tired and very wet.

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.