Thursday, September 30, 2010

It's Starting (To Go Off Point)

The candidates for the California Governor race are starting to generate mud slinging with only thirty days until the election.  And of course it isn’t going to be a discussion about solutions to the economy, or jobs, or the foreclosure crisis.  Meg Whitman is just today defending her having fired a housekeeper who revealed to Whitman and her husband that she was undocumented.  Whitman is alleging that the housekeeper is being manipulated into “coming out” against her, so to speak.  The rabid Gloria Allred is accusing Whitman of having known for a long time that the housekeeper was an illegal immigrant, and that Whitman and her husband simply got rid of her at the last minute to protect her campaign.

And all of this, really, to keep everyone off point.  With this circus going on in the media, how are we supposed to make an informed choice about either of these candidates to run our State; the most populated of states in our nation?  Because in reality, neither one of them is going to address the illegal immigration issue if elected to office.  That is for sure.  So why even bring it up in any form at all?

I hate to seem so negative, but California’s finances are royally messed up.  It's a "shit-storm" to use a Vic Mackey phrase.  A nineteen billion dollar deficit with a current government that can’t get a budget out on time.  Great going Mr. Austrian Oak!  Jobs flying out to Texas and Arizona as fast as those states’ chambers of commerce can shop for and lure them out of the Sunshine State. 

And seriously, who would want to be governor at this time?  Can either of these candidates really make a difference?  Does Jerry Brown really think that making green jobs right now, with this economy, will help us out of our hole when green jobs currently make up 3% of the work arena?  Does Meg Whitman, who has pretty much no experience in government at all, think she can buy her way in with $120 million dollars and actually straighten things out like a publicly traded company?

How can we possibly know anything about them when both are wrapped up in media-candy such as why their maid was fired?  We’ll never know if either really does have a good plan for California if they go on like this, with each trying to derail each other and only hitting their talking points during debates while not answering any specific questions, and most assuredly, they will.  For that’s the game of modern politics.

Just a note that for the photo above, I went into PhotoShop and painted them with a really broad brush!

Waiting in the Wings

President Obama is having a bad time trying to right the US economy; Hilary is no doubt waiting maybe six months past the mid-term election to decide if she will make her move for 2012.


Southern California has just gone though an incredible few days of first, really dry heat, breaking all time records in downtown with 113 degrees, and then a few more days of extremely humid heat producing thunderstorms.

Quentin Tarantino’s editor, Sally Menke, went hiking in Griffith Park on Monday, the day of the heat records, and she got lost, passed out and died.  She was found Tuesday morning with her extremely dehydrated dog having survived by her side.

It’s a terrible thing and I feel for her family, but at the same time, all of the media was warning people for a couple of days that Monday would be an extremely hot day.  I can’t imagine what would have possessed her to go hiking; this being written by a person who has run 25 marathons and numerous races, but who would never have gone out hiking that day.  Well, however it happened, it was tragic. connected to the....

Inevitably, the "housing market bone" is connected to the "jobs bone."

The housing market is still tanked, sitting, not much moving but a few sales here and there.  The housing market is connected to the jobs market. The jobs market is quiet, or maybe the better word is decimated.

I’ve been hearing a lot about layoffs and something like a 12.5% unemployment rate when all are considered; newly graduated people looking for work, undocumented people, those whose unemployment insurance has run out, and those who were never eligible for unemployment insurance to begin with for one reason or another.  So really, it’s something like 25% unemployment, or 1 out of 4 people are without a job.

Tuesday, September 28, 2010

Old Bar Joke

This is a joke that my friend, Tony Matthews, told me about ten years ago.

A patron walks into a bar and asks the bartender for three glasses of beer.  The bartender obliges and serves him three glasses, which he lines up in front of him, and drinks, one after another.

For the next few weeks, he continues to order his beers this way.  One night, the bartender says, "You know, you can just order your beers one at a time, and I can give them to you successively."

The patron says, "Oh, I know it's kind of strange, me ordering my beers this way.  You see, I grew up in Ireland, and my two brothers and I would go to our local pub each night and drink our beers together.  It was a tradition.  So when I moved to America a few months ago, missing the camaraderie with my brothers, I decided to order three beers each night to help me feel like we're still drinking together."

The bartender nods with understanding and accepts his explanation. 

After another few weeks of his regular pattern, the patron comes into the bar, sits down and orders two beers, not three.  He proceeds two drink the two beers.  Everyone in the bar who knows him starts to stare and wonder what has happened. 

Finally, the bartender gathers up the courage and says, "Hey friend, I just want to offer my condolences to you."  The patron looks puzzled?  "Well, you ordered only two beers.  I assume that one of your brothers has died."

The patron responds with delight and understanding, "No, my brothers are all fine.  It's simply that I quit drinking."

Sunday, September 26, 2010

Where's Alfred?

Brenda and I are currently watching a string of Alfred Hitchcock movies each night over the next week or so, and I had forgotten that Hitchcock did a cameo in each of them.  We’re having a great time keeping an eye out for his appearances.  It’s nice to watch films which were so carefully planned out by a master craftsman.

A Chevrolet In Orbit

I thought of this recently.  The moon has no atmosphere, which means that there is no resistance to objects passing anywhere near the moon’s surface.  So you could take a Chevrolet Tahoe and put it into orbit around the moon at a few thousand miles per hour, and at say, 500 feet above the surface, without it's orbit degrading.

What a sight that would be. You’re standing on the moon on a cool night, just looking up at the twinkling stars with maybe a gently setting Earth, when a 'shooting car' crosses your line of vision from one horizon to the other as it does every few hours.

Addendum 3/2/11:  If you were standing on one spot on the moon, and the SUV were orbiting in a perfect East/West path 500 feet above you, the Chevy Tahoe would float by at about 1 mile per second and would pass overhead about once every two hours.  If it were in any other orbit, it would appear once every two weeks.  Thanks for USC Physics Dept Alums, Siddhartha Santra and Christopher M. Gould for helping me figure that out; I wouldn't have known where to even start.

Friday, September 24, 2010

The World Could Use Another Great Janitor

There was a radio psychiatrist back in about 1990, who did a daily show on KABC 790AM in Los Angeles.  I don’t recall if his radio show was syndicated around the country or not, but his name was Dr. David Viscott, and he was pretty liberal in his views on politics and public services. 

His talk show mostly consisted of taking calls and trying to come up with solutions in the average ninety-second allotted time that each caller got.  He usually steered callers towards realizing that they were empowered to at least some degree in whatever situation they found themselves in.  The “patients” simply needed to start taking responsibility for what they had the power to control in their lives and on some level, even realize that they had contributed, at least to some degree, to their current life.

He was generally warm and caring to callers, and yet often sounded harsh because he was not willing to let people remain mired in helplessness.  He wanted them to start taking control right there on the radio by admitting what they hadn’t been doing in their lives and what they could start doing immediately to change their situation.  I thought he was only as effective as the "patient's" ability accept responsibility. 

I liked him and I even met him once when he did a show from the university that I was attending (U.S.C.), and he ended up sitting next to me with his arm around my shoulder and a microphone in my face answering some question I had asked on the air.  He talked to me in a kind, knowing, fatherly way, like we had been friends for years.  I must confess, I have generally not liked psychology talk shows throughout my life.  But indeed, I admired him.

Whatever you might think of these types of shows or their effectiveness, he used to say something that I always took to heart.  When people called in describing their profession or their aspirations in a way that showed some embarrassment or admission that their work might not be the most critical of societal roles, Dr. Viscott used to help them re-frame how they saw the work that they were doing.

For instance, if someone called in, and they said that they were helping support a family through their nighttime janitorial job, David would say something like, “Look, put your heart and soul into your cleaning work.  The world needs another great janitor.  We don’t need an unmotivated janitor, or a mediocre janitor.  We need a great one.” 

Or if someone called in saying they had been in the same job for the past ten years, and that they wished they could go to school to learn to be an accountant, David would ask them what they needed to do, the very first steps they needed to take, to be able to being to make this happen.  Because, “the world could use a great accountant.”

Dr. Viscott died in 1996, but this sentiment has always resonated with me because so many people go through their jobs, either knowing only partially the full spectrum of information needed for the job, or with an uncaring and bored attitude.  We’ve all experienced the customer service representative who just wants to be rid of us and is watching the clock.  Dr. Viscott’s idea that one should strive to become the best at whatever one is doing, no matter the level or status, I think is a valuable one and should not be forgotten.

This leads me to the issue of people bettering themselves.  There are so many on-line tutorials, schools, night classes and extension courses that are out there for each one of us to learn more about the world and to grow our knowledge and skills, and yet so many don’t take advantage of these things.  A few years ago, I took a digital photography course, and also several PhotoShop courses for like $20.00 at my local adult school.  It cost almost nothing, and when I finished, presto!  I had a much wider arena of knowledge in these areas than just a few weeks before.

Maybe mine is bordering on a Utopian view, but I think that United States, which was once a manufacturing nation, and is now a consumer one, would benefit greatly if everyone contributed their best efforts for the things they do every day.  Our lives are hard; we have jobs, relationships, kids and obligations, and most people would say that they just do their best. 

But I disagree.  Most of what I see is mediocre, and I include myself in this.  How often does one really apply one’s blood, sweat and tears into something; creating a new or excellent “thing,” whatever that may be?  The answer is, not often enough.  We should all be applying ourselves to the fullest that we can to all of our responsibilities. 

I think this is what our nation needs at this time.  Creators, inventors, writers; people who make things, and an attitude of trying to use that other 90% of our brains.  We all have something to give, create, or something to say; even jobless people.  Some of that spare time can be used doing or making something productive, even if only for their own personal use or pleasure, such as a garden or a painting.  Because it's the habit of doing, making, and going as far as one can that I think we have fallen out of, and that in some big sense, has had an effect on our both our personal fulfillment and our nation's well-being.

And I think everybody should try, if even just a little bit each day.  When people are at work, say doing the midnight shift for the Port Authority, or gathering data for a city study, or restocking inventory at a department store, they should do those things the best they can and shoot for gaining the maximum knowledge about that job.  Because if we, as a nation, were 85% productive, 90% productive, 95% productive, we would make a very rich place in which to live in so many ways, and we would be unstoppable.

Saturday, September 18, 2010

One of Those Moments

I recalled today as I was driving through the 101 & 405 interchange, a story my friend Eric told me about an experience he had many years ago when he was on his way to a temp job.

He was driving in his little Volkswagen Golf, or something to that effect, from the 101 West to the 405 South.  This particular transition consists of a lengthy feeder road in the shape of one-forth of a cloverleaf, taking you in a clockwise turn as you descend from the overpass to an underpass. 

The transition is very busy because it is one of the most heavily used freeway exchanges in Southern California getting celebrities and the like from the mundane San Fernando Valley over to the more exciting Westside and beyond, which include areas such as Brentwood, West Los Angeles, Santa Monica and the South Bay.

Eric was putt-putting along in his VW, rolling through this interchange, when his car started to fail.  It began sputtering and choking, and was losing power very quickly.  So he pulled over to the shoulder, along where the feeder road straightens out to join the 405, and the car came to a rest just before the underpass of the 101.

In his words, he just sat there…for a minute…for two minutes…for five minutes….in disbelief that of all the places for his car to completely die, he was smack in the middle of one of the noisiest, busiest, and grungiest parts of the Southern California freeway system, where cars fly by you, turning out of the way just in time to avoid hitting your conked-out car.

But he didn’t do anything; not right away.  He didn’t call AAA, he didn’t call the California Highway Patrol, he didn’t call a friend (me for instance), he didn’t get out and try flagging someone down.  He just sat there.  He sat for those moments and looked down at his speedometer and tachometer, both of which read zero, and pondered.

It was one of those moments.  When you say to yourself, this can’t be happening.  Not here, not now.  In an instant, what was a normal few minutes of his life getting from one place to another, had become an ordeal of how to get help and how to tolerate the wait for assistance to arrive.  One of those times when industrious technology, which makes life so easy, suddenly becomes a grand burden.

You can’t just leave the car there and walk away.  Or can you?  No, you really can’t.  And so now, it is all about patience, and about saying to yourself, in a few hours, or at least by this evening, it will all be a sordid story to describe while eating dinner and then retiring to the television or to one’s bed.  Just one of those moments.

Tuesday, September 14, 2010

America on Credit

My friend pointed me to an article in Time Magazine, the September 6, 2010 issue (also available on-line), called, “The Case Against Home Ownership,” in which the journalist, Barbara Kiviat, proposes that there are some valid reasons for not wanting to own a home in this day and age.  The article sounded like an interesting piece, and so I chased it down at my local library.

Her main points are that, most often, owning a home has more costs than one would first assume, and that ownership hasn’t been a sound investment for many people in the last few years given the terrible downturn in home prices, unpaid mortgages, and foreclosures abounding.  She also mentions that there is a higher percentage of the general population who lease as opposed to those who own property in many other countries, and that these people lead content lives doing so.

I didn’t find her claims to be backed up with many good examples.  The pains of failed mortgages, the slip in value and how hyped up the market was a few years ago are now all known and felt by everyone, and this recession is already a five year-old phenomenon. I didn't get any real sense of why homeownership may inherently be a bad idea from her article, the last five years not withstanding.

In fact, in Kiviat’s noting that she doesn’t think that it has been a good idea for the government to promote homeownership as being part of the “American Dream” by giving home owner tax breaks, she works against her own argument.  Tax breaks definitely are positive advantages of owning property, and in the final analysis, she never supports her opinion with any real benefits of renting, with the exception that one could more easily relocate for new job opportunities if one is leasing.

I felt that she wrote this article to appeal to the masses because a lot of people are finally understanding what happened with the mortgage meltdown; the bad lending practices, the inappropriate loans written by loan officers who didn’t understand the loans themselves, and the pressure on lenders to get people into loan contracts so that the loans could be diced up, packaged and sold on Wall street. 

However, Kiviat, as a journalist, should be writing on the cutting edge of what’s happening in real-time. She ended her article with the thought that she would think again before purchasing a home at this time.  I don’t expect anyone, male or female, to have ‘crystal balls,’ but really, her article should have been written five years ago; now that would have been TIMEly.  And in fact, if one has a lot of cash lying around, I think now would be a good time to invest in property while things are on the skids.  There are just not a lot of cash buyers coming out of the woodwork right now.

However, I do believe that Kiviat wrote a well-intentioned piece, which brings up some important issues.  The article got me thinking deeply about our society’s dependency on credit.  Because, ultimately, once one peels back all of the layers of the onion on any major negative issues of home-ownership, it’s really an issue about credit.

Banks and lenders make huge profits on interest rates; we know that.  The money you’ve borrowed for whatever product you’ve purchased via credit ends up being enormously more costly than it’s initial price.  I think that most people still have a limited awareness of this, even if by denial.  Yet, most people are aware that banks make even more from overzealous late penalties and overdraft charges in our personal accounts than even their interest rates.  So there is definitely an intention to not only profit, but to deliberately gouge you.

If you buy a house for, say, $500,000 with 20% ($100,000) down with a 4.5%, 30-year fixed loan, you will end up paying $329,626 in interest on the $400,000 you initially borrowed by the end of the loan's life cycle; that's an 82% increase on what you borrowed).  So your house will actually end up costing $829,626, or 65% more than it would have had you paid cash for it.  Think about it.  That would be like going to buy a blouse on sale for $19.99, and then because you used credit for it, paying and extra $12.99 of compounding interest for an end charge of $32.98 for the blouse.  That doesn’t seem like a bargain to me.  It’s a slow-motion robbery in progress, like the gradual boiling of frogs.   But people want to own a home so badly that they strap themselves to this kind of commitment when they really shouldn’t.  Are you surprised to hear this from someone who works in the real estate industry?  I can see how the system works much more clearly now that I have been in the business of home and lending transactions.

It’s not that no one should ever get a loan to buy a house, but rather that even now, after home prices had fallen off a precipice, I still witness a push to get people to borrow money towards the top whatever range they have been approved at with little to no concern of what that will mean for their daily lives.  It’s been drilled into their heads that they should own a home or to get a “great deal” in this market, that they don’t know what they are getting themselves into.  There is no real advocate for them to make a sensible decision based on what would actually work for them in comfortable monthly payments.  Instead, people still get into lending contracts that require them to keep up a more than hardy pace on the hamster treadmill. That is why I always suggest to my clients that they work backwards, thinking about what kind of payment would be comfortable for them, and then finding the right priced home that would fit into their life needs.

And honestly, prices of homes in Southern California are still so high, not in regard to their valued proximity to great things such as the Pacific Ocean, the mountains and the desert, but with respect to the cost that they were originally built for.  Many of the wood and stucco homes in the San Fernando Valley, built in the pre to post war years, originally sold for $10,000, and even $6,000 in many instances.  So even before the real estate bubble burst, one has to wonder how those same structures could possibly be valued at upwards of $700,000.  With 20% down (140,000), one would be stuck with a $560,000 loan.  That just seems unreal for the actual dwelling that they are getting married to.  I have to note here that in 2005, I went into an 1100 square foot home in Burbank listed for sale, 3 bedroom, 1.5 baths, no pool, nothing special, near a major street with an asking price of $1,100,000.  Clearly, minds had been lost.

My friend Eric, who initially pointed me to the Time article, and with whom I bantered emails on the subject back and forth for a day or so, also feels that having a large mortgage is ultimately too costly for many people. 

Eric writes, “The other thing I would like to have read about was the actual meaning of "home ownership." I mean, if you think about it, what does a homeowner actually "own?" If a homeowner loses his job and can't pay his mortgage, he will find out very quickly who really owns his home. The bank. The people whom I really see making the money from all of this home ownership are not the home owners, but the banks (and maybe in some cases the developers).”

“For me, this article added more weight to some ideas I've been thinking about for the last couple of years about home ownership. What I have observed is that for average middle to upper middle class people, owning a home is very, very important, despite the tremendous financial sacrifice they make. What I see is that this class of people are usually salaried employees who have a 30-year mortgage.”

Eric continues, “So making monthly mortgage payments is a huge chunk of their income. The rest seems to barely be able to cover other necessities, such as food, insurance, car payments, telephone, cable, etc. So much of their income and their life-focus go into their house -- the mortgage, upkeep and maintenance, and remodeling projects. They have very little money left over to live an interesting and exciting lifestyle. Most of these people lead very unglamorous and boring looking lives.  I just keep thinking, is there a better way? A sort of "third" alternative that the majority of people don't know about.”

I think, in particular, the point that Eric makes about quality of life as one grinds away, trying to make enough for his or her mortgage payments and have maybe a little cash left over, is far more illuminating and thoughtful than any that Kiviak included in her article.  I think the quality of life is the key to all of this.  If one can’t create and have interesting experiences because they are trying to make their payments each week, then what is the sense of it all?  And if you lose your job and have no income, it all comes crashing down pretty quickly, and you’ve got nothing left.

I was just saying to my girlfriend how I can't understand how so many people have mundane jobs that they just do year in and year out with no hope of growing into anything or achieving some dream.  They have a job that basically pays the mortgage and allows them to go do something two weekends out of four.  Most people don’t go to night school or extension classes in order to pick up new skills that might help them expand themselves. And at the same time, right now, while money is hard to come by for so many people including me, that stability seems somewhat attractive, if only temporarily, until opportunities blossom again.

When Kiviat is critical about the government promoting home ownership as being part of the American dream, one must think about how strong the banks’ and lenders’ roles are in our society.  You only need look at the fact that the government bailed out some very large lenders to know how entrenched credit is in our society.  For instance, just think about making a flight reservation, a hotel accommodation, or reserving a rental car. It is a much more difficult thing to do, if not impossible, without a credit card. We’re told that we must have a good credit score...”Always keep your credit average 700 or above!” So, in essence, we're being told by our infrastructure that we must always operate, at least to some level, on credit.  I don’t mean this in any conspiratorial way; I simply state this because it illustrates how most of our daily interactions have evolved into those, which either require or rely on credit.  The benefit to you is the ease with which one can have something.  The cost in little bank charges to you here and there is directly proportional to the profits that the lenders make over huge expanses of time.

I seldom if ever hear anyone in my business say, "You should just see if you can work the deal out with cash." Most people just don’t, and will never have enough cash to buy a $500,000 home straight out. The auto response of real estate agents is to get buyers hooked up with a lender and get them signed onto a mortgage.  And do you know how many people buy cars on credit?  I was actually surprised.  It turns out that for the last fifteen years, car dealers make more money from the interest rates of auto loan financing that they offer their customers, than on the mark up price on the vehicles they sell.

With what I have been seeing and learning, I am becoming more committed getting in the habit of paying cash and not credit for many of my transactions. There’s something much more immediate and tangible when you hand over a Federal Reserve Note to a vendor, then when you swipe your credit card.  One actually witnesses the trade of the earned money for the product. I just don't have any ‘interest’ in giving lenders extra money out of my pocket.

At the risk of this all sounding like some nutty manifesto (too late), I truly think that, as Americans, we all really need to rethink and readjust our prevailing relationship and dependency on credit.  We will greatly benefit from breaking the mindset of ‘swipe and spend’ purchasing when it’s done to a degree that we become disconnected from our own financial condition.  Little by little, it’s eating up our money and ultimately, as Eric said, our quality of life.

Saturday, September 11, 2010

A Growing Mind

I was at a family get-together tonight with my girlfriend, and among those there was a four year-old son of my cousin.  After some time of playing quietly, he became very vocal telling me everything his little head could think of. 

He built a puzzle, he likes the rain, thunder scares him, he’s happy with his toy truck even though it’s missing a back window, dinosaurs eat kids but not pizza, and so on.  He was adorable.  And in his one-sided monologue with me, I heard him use the word, “otherwise” several times, correctly and in full sentences.

I told the other people, the adults at the table, how this impressed me.  “I’m amazed that he uses the word, ‘otherwise,’ here and there like he does.”  My table-mates seemed to note my appreciation of this, but I don’t think they thought much more about it.  And I too wasn't exactly sure why it had impressed me.

Yet, while driving home with my girlfriend and pondering why his use of the word made such an impression on me, I was able to isolate what it was that indicated that this is some sort of milestone in any child’s development.

His correct use of this word, "otherwise," in sentences meant that he had a clear grasp of 'cause and effect.'  He understood that for something to happen to one’s satisfaction, a separate variable had to come into play, or it might not result in what one wants.  That is, in order for “A” to happen, “B” is needed, ‘otherwise’ C could be the result.

In order to eat cereal in the morning, I will need milk, otherwise I’ll have to find something else to eat.  In order to see the completed picture of the puzzle, I need to get all of the pieces in place, otherwise the puzzle will look wrong.  If I want to watch the rain comfortably, I need to stay in the house and look out the window, otherwise my clothes will get wet.

It seems quite simple, but when I thought to myself that his little mind had been on this planet for only four years, and yet he could clearly vocalize cause and effect, it made me appreciate yet again that the human brain is amazingly efficient at soaking up this world that we’re living in at lightning speed.  And by the way, he understands two languages.

Wednesday, September 8, 2010

Decoys Love Company

One Christmas when I was about twelve years old, we were all sitting around our Christmas tree even though both of my parents were Jewish, and I was the only one with any possible excuse for having a tree given that I was Catholic before I was adopted.  And I wonder why I'm mixed up at times. 

Our family friend had brought a good-sized present for my parents.  It was sitting in one corner winking at them, and all the while, our friend was giggling to herself.  She was always clever with presents, and I knew this one had to be a whopper of some kind.

At the end of the summer before the holidays, my parents had completely remodeled their back yard putting in an extended brick patio where there had been plain concrete, making more interesting flower beds, and painting the bottom of their pool a deep, dark blue, so that it would create the feeling of a pond among their newly landscaped garden.  It was tranquil and pleasing to the eye and soul.

So here we all were on Christmas morning immersed in paper and bows.  My parents' curiosity finally got the better of them and they opened up their Christmas present.  Out of the package and wrapping came six decoy ducks, the kind that one would use for hunting.  But these were meant for their new pool-pond.  We all immediately went to the back yard and chucked the ducks into the pool where they began bobbing and floating in disarray.  Our small runt German Short Haired Pointer, “Pepper,” upon seeing these new foul, ran to the edge of the pool and, well, "pointed" at them.  It was just amazing.  Pepper had never even seen a duck in her life, and here she was, genetically predispositioned to show us where our game was in the backyard.

A month or so went by, and this same friend happened to be over one morning.  We were walking and talking in the living room, when we looked out to the pool and saw nine or ten ducks in the pool.  This could be right.  We only had six decoys.  Well, upon more careful observation, we discovered that three or four REAL ducks had apparently spotted the decoys and decided to join them.  One of the funnier epilogues to an event that I can recall.