Saturday, December 20, 2014

Search and SEIZURE (Criminals are Dumb!)

Many criminals willingly let the Police search their cars - even though they don't have to give consent.  And many criminals do this, knowing that there are drugs or other contraband in the car!

If you watch "COPS" or read the paper, you may be continually amazed at the stupidity of criminals.  It is almost like they want to get caught.

On one episode of "COPS" the policeman, on camera, after pulling over a suspect, asks if it is OK if they search his car.  Stupidly, the suspect says, "Sure!"  Inside are kilos of marijuana wrapped as Christmas presents - which the Police open up and find.   The suspect is under arrest.

The whole time this is going on, I am shouting at the television (I did that a lot), "You don't have to consent to a search!  You freaking idiot!"

Not that I am condoning drug smuggling.  But where do they get these people?   People complain about abuses by the Police - but then fail to assert even their most basic rights.

By consenting to the search, anything found in the car is fair game.  If the person said, "Gee, no, I'm kind of in a hurry, so just give me the speeding ticket and I'll be on my way!" the Police could not legally search the car - or charge him with anything other than a traffic violation.

If they did search the car, any evidence found would likely be throw out in court, as the search was illegal.   Sure, you'd get arrested, but you'd get out on bail and there probably wouldn't even be a trial.

But criminals are not very bright - or at least the ones the police can catch are not very bright.


...this illustrates the risk to you, if your husband or brother or roommate is dealing drugs out of your home.   The door may be busted in, and not only your house - but your place of business - may be searched, and everything confiscated.

Consider this case, recently on I-95 near our town.   A fellow is traveling to Miami with nearly a quarter-million dollars sewn into his backpack.  The police pull him over for a very minor traffic infraction and then ask if they can search the car.  He consents.

They find a back pack with nearly a quarter-million dollars in cash sewn into the lining.  Now, while this is "suspicious", it is not illegal.   As the driver of the car, you could say it was your life's savings, or that it was the money you were going to use to buy disposable cell phones to ship overseas (which he claimed was his business) and that you sewed the money into the backpack because you were worried it might get stolen.

Instead, the driver says he doesn't know who the money belongs to, and says a "friend" gave him the backpack to take to Miami.   So the police seize the cash and are holding it, and likely will eventually confiscate it.

Now consider his fate.  If he was a "mule" tasked with driving this cash to Miami for some drug lord, how long do you think his life will be, when he shows up without the money?   Yea, he'll be found floating in the bay, for sure.

He didn't have to consent to the search.   And when the backpack was found, he didn't have to make up some wild story about not knowing who the money belonged to.   It isn't against the law to carry money around and in fact, a lot of immigrants, mistrusting banks, rely instead on the old mattress to store their money.   A friend of mine works with local immigrants, and they buy trailers here (to live in) and bring tens of thousands of dollars in cash to the closings.  They are called "the unbanked".

Drug seizures of cars, cash, and other assets are somewhat disturbing.   You can read in the paper, every day, the "Official Notices" of such seizures.  In one recent case in our town, a couple's home in "the projects" was searched, and artificial cannabanoids were found.   They also searched the couple's local business and found about $15,000 in cash, described as being in "denominations typically used in the drug trade"  (what is that, exactly?  There are like only five denominations of cash!).  For some reason, they felt they should take the couple's flat-screen televisions as well.   Very odd.

In another seizure case, the police claim to have found, in the kitchen, "containers and instruments typically used in the drug trade for repackaging drugs for resale.   I have a Daisy seal-a-meal in my kitchen - and drawer full of Glad-bags.   Does this make me a drug dealer?   Of course, they did catch the "perp" after a high-speed pursuit, and when he fled the car, he tossed a bag of cocaine (wrapped in the containers used in the drug trade) into a ditch.  They seized about $24,000 in cash from his house.

Sadly, this has become a very profitable venture for local law enforcement, all across the country.   Of course, since they are seizing money and goods from criminals, not too many people give a damn.   But this illustrates the risk to you, if your husband or brother or roommate is dealing drugs out of your home.   The door may be busted in, and not only your house - but your place of business - may be searched, and everything confiscated.

From what I can make out on Google Maps and from the newspaper report, the couple owned a used-furniture store, which are quite popular in the ghetto.   The denominations of cash found were also "consistent with those used in the used furniture business".   In other words, the seizure was bullshit.   But now I sound like a defense attorney.

Why are criminals so dumb?   Well in part, these are the ones the Police can catch.   The more clever criminals are perhaps more elusive and less likely to be so obvious as to be caught.   And if caught, they are more likely to assert their Constitutional rights - and hire an attorney - to defend themselves.  Of course, that is one sort of odious aspect of this "seizure" deal - if they seize all your money as part of the arrest (and yes, bank accounts can be seized) then how do you pay your attorney?   And the answer is, you don't and you end up with a public defender, who plea-bargains your case down to a few years in jail and you lose everything.   Of course, if you were guilty this is not such a tragedy.   

On the other hand, if you were just cohabitating with someone who sold drugs, this could be devastating.   And yes, there are some cases where the druggies have agreed to testify against the non-drug user, claiming that they were the "kingpin" of the drug empire.  Throw Momma from the train - or at least set her up for a felony conviction, while you walk.

So, what does this all mean?   Well, you have every right to assert your Constitutional rights.   The Police may lie to you (it is legal) to get you to consent.  "If you just let us search your car, we can then let you go and you can be on your way" - they like to say things like that, which sound appealing, when you are stopped by the side of the road.   You don't have to consent.   And if there is a dashboard camera on the Police car, be sure to face it and say loud and clear, "I do not consent to the search of my vehicle!"

But an even better tactic is just to not have anything in your car that the Police can arrest you for.   Drugs may seem like an awful lot of fun, but they do cause a lot of heartache, and a small part of this is their illegal aspect.   Drugs are also expensive, not only to purchase, but in terms of what they do to your personal finances.   Once you start doing drugs, the oddest things (like Bling Rims) seem desirable, and most drug users fail to save for tomorrow, or to invest, but rather just blow all their cash for the here-and-now.

But if you are reading this blog, I assume you are not doing drugs.   So what is the point?   Well, think long and hard about hanging out with people who do drugs, including siblings, children, parents, relatives, roommates, life partners, etc.   If you get pulled over in the car, and it is searched - and their drugs are found - you may be charged and your car may be seized.   Maybe you can clear it all up in court, eventually.   But is it really worth the hassle?

If your son is living in the basement and doing bong hits all day long, it is not some "harmless pastime" but one that could get him into serious trouble  which could cost you a lot of time, money, and aggravation.   And if he starts dealing drugs you could end up the victim of one of these overly-aggressive drug seizures.  Parents have lost their homes, when their sons were arrested for drug dealing.

Myself, I saw the problems with drugs and walked away from them.  The biggest problem wasn't the hassles with the Police (I never had any) but how drugs sapped the life away from me.  All my friends using even pot were going nowhere fast and that didn't strike me as how I wanted to live the rest of my life.

Since those days (the 1980's) much has changed.  Mandatory minimum sentences, asset seizures and forfeitures, as well as more aggressive enforcement, have made drugs even less appealing.  And the real risk, is that you could be caught up in this, even if you are not directly involved.

Friday, December 19, 2014

Smart Phones, Dumb People

Handheld access to the greatest database known to mankind, and the typical user is texting, "Wassup?"

Some friends of mine got smartphones.  If you've read this blog, you know I am in no hurry to get one.   It is not that I don't appreciate the technology, only that I find it is too expensive at this time ($600 for the phone and $100 a month for service is not in the cards for me).  Also, it pays to wait until the technology settles out.  Probably in a year or so, I will buy a last-years-model on eBay and try to find some cheap plan for it - maybe one that uses WiFi for data.   I am not interested in texting and becoming OCD in yet another area of my life!

What is amazing to me is that the people who have smart phones are, well, really dumb in how they use them.
I'll give you an example.

We were out to dinner and I told my friends to stop texing obsessively while we ate.   So we were having an actual conversation and were discussing food.  I mentioned pecans in something, at which point my Southern friend (who was actually born in Florida, which is not really part of the South!) said I was saying "pecan" like a Yankee - as in "pee-cahns."  He likes to do that - accuse me of Yankeeism.

Pee-Cans or Pee-Cahns?  Which is right?  And do Yankees really say it "wrong?"   I grab his smart phone and Google "pecan v. pecahn" and find an interactive map that displays how the word is pronounced in different parts of the country.

I show him the map, which illustrates there are four pronunciations of the term, and that the demarcation is not "North versus South" but actually a series of regions, which - if you'll excuse the pun - are all over the map.

The greatest database in the history of mankind - all the palm of your hand!  And most people use it to look for sex or to send snarky texts or tweets to each other.   It is like giving a Nuclear Reactor to an idiot.

Now, my friend got all over me for using the phone at the dinner table and also saying, "See, you like smart phones!"

And I pointed out to him that I was not furiously texting with a smart phone in my lap while pretending to pay attention to others, but using the device constructively as part of the conversation and also as a learning tool.  It does have constructive uses besides looking for dick on the Internet.

And what really browned him was I knew how to use the phone better than he did, and I don't even own one!  (Sorry, I'm an Engineer).

These are useful devices, but people choose to use them in the most idiotic way - sending little notes to each other and updating their Facebook pages.  It is as if someone was given a Ferrari and they used it as a golf cart.

Not only that, with all this information and data in your pocket there is no excuse to be ignorant about so many things.

As I noted in an earlier posting, a lady made a mocking comment that the dealer wanted to replace the Evaporative Emissions Canister in her car, "whatever that is" she said snarkily.  Yet, with just a few clicks of a mouse or just by asking Siri you can find out what it is and not be stupid and ignorant - and be proud of your ignorance.

And I find this all the time with my "Smart Phone" friends.  We are having a discussion and someone says something really stupid, or someone says, "Gee, I wonder if..."   And I say, "Give me your Goddam smart phone for Chrissakes - there is no point in wondering or not knowing if you have the greatest database assembled in the history of mankind in you fucking pocket you moron!"

OK, I say it a little more diplomatically than that.   But it begs the question - with so much access to data, why do people continue to embrace ignorance?

The answer is simple.  Texting - like watching mindless sitcoms - is stupid and fun and requires no thinking.  Looking up something and learning it is HARD and no one likes hard things - at least not native-born Americans who want every Goddam thing handed to them on a platter as a matter of course.

We have these "Smart Phones" now - why are so many people still so Stupid?

Sarcastic Nation

 Television tells us that insults and sarcasm are the norm.

Most people watch a lot of TeeVee.  If you don't watch TeeVee, the behavior of others may puzzle you.

For example, extreme sarcasm and insult humor are the staples of the TeeVee sit-com.   And talking trash behind someone's back is the staple of the "reality TeeVee" phenomenon.

So what do you expect heavy TeeVee watchers to do?   Exactly.

So you see Mrs. Jones, and the first thing out of her mouth, is "What's up with that hat?  Were they having an ugly sale at the Goodwill?" and you wonder what you did to piss her off.
But she lives in TeeVee world, and in TeeVee world, the audience laughs uproariously at this comment.  "Haw, Haw, Haw!"

So you get through the "pleasantries" which amounts to an exchange of insults.   And I've learned the hard way, with people like this, that if you are actually nice to them, they fell insulted.   Saving being "nice" for the "heartwarming episode" - the only place on TeeVee where people are actually civil to each other.  Grampa is in a coma, and the whole family comes together and learns a valuable lesson about... whatever.  Next week, on an all-new special "Blossom"!

Now, on to the dirt!   They've insulted your appearance, the clothes you wear, and the state of your housekeeping.   Let's talk trash about people who aren't here!

Yes, this is what passes for conversation among the plebes.

And in a way, it is kind of "safe" - this kind of superficial trash-talk.   Why?  Because you are really not saying anything at all.  You are just making bad jokes and being sarcastic about everyone.  But nothing of real importance gets said.

When you try to discuss something seriously, everyone gets uncomfortable.  This isn't in the script!  Well, maybe once a year, when the series does an "issues" show.   But there is a time and a place for that!

It is possible we can move beyond this sitcom mentality?  I am beginning to think not.  Insult humor has become more popular than ever before, and it seems like the "social media" only encourages this sort of trash talk.

I suppose it is all just harmless fun and all.   But why is being nice to other people viewed as a bad thing?

Hunting and Gathering versus Shopping

You cannot shop your way to wealth.

I get a lot of hits on this blog from other blogs.   And a number of these other blogs are written by women, who are sharing tips on how to save money.   Some of these blogs almost appear to be in code, as they discuss various coupons, rebates, cash-back offers, BOGOs, sales, membership discounts and the like in a format that is all numbers and abbreviations.

For example, one might say, "Special Offer, Rite-Aid, shampoo 12 oz, mfg. coupon, BOGO, membership cash-back, cost -0.12" or something to that effect.   They stacked coupons and offers and sale prices and whatnot, and ended up not only getting a bottle of shampoo for free, but 12 cents back in cash.

While it is a good idea to seek out good bargains, oftentimes such "shopping" can actually distract you from the bigger picture.   You cannot spend your way to wealth, just as you cannot eat your way to slimness.   Women in particular seem to try to do both, an awful lot.   I don't know how many women I have met who tell me that, thanks to Acacia berries, they can "eat all they want, and still lose weight!" - and yet they don't appear any slimmer, even after months of this.

Now, I am not beating up on women here (like some NFL player, right?) but I think there may be some biological imperative at work here.   In the caveman days, the women would quietly gather nuts and berries (so we are told) while the menfolk made a big deal out of chasing down a mastodon.  Both activities were important to survival.   Only one was immortalized on cave paintings.   Not much has changed in 4 million years, has it?  Today, men still make a big, noisy deal about whatever it is they are doing.

But I think "shopping" has replaced gathering nuts and berries, and it is mostly women who engage in this pastime.   There are a few men shoppers, of course, but they are a rare breed.

And I know a number of women who like to regale me about their big kills in the mall.   They got a special deal, on sale, or a BOGO with a coupon and with cash-back, hardly paid anything at all!   "I got a pair of shoes that cost $250 for only $25!!" they chirp, not realizing that those shoes cost less than $10 to make in China (including shipping).  And women's shoes are particularly poorly made, too.

I have another friend who likes to seek out fantastic bargains - buying things that cost dollars for mere pennies.   Thrift shops and tag sales are her haunt, and she regularly comes home with piles of loot for mere pennies.   Problem with this model is, of course, that you end up with a house full of stuff in no time, and unless you have a garage sale of your own, it starts to burst at the seems.   And the specter of hoarding (and it is a specter or ghost!) is always on the horizon.

The bottom line, of course, is that those shoes didn't "cost" $250, but rather had an arbitrary price tag put on them with that number.   Whether the price paid or not is a bargain is another question.

But regardless of how much you "save" in shopping techniques like this, you can't make money at it, no matter how hard you try.   There have been a plethora of couponing shows on Cable television as of late.   They like to show "extreme couponing" where some white trash diva walks out of the grocery store with cartloads of yummy delicious food, and pays little or nothing (or gets money back!).

Carloads of food, by the way, are a high-index Pavlovian response item, just like the aluminum briefcase full of hundred dollar bills, which is always a prop in every action movie made (although lately, the black duffel bag of money seems to be on the rise).   We salivate at the thought of all that food, just as we drool over the money.   The TeeVee people know this, so they use these props a lot, to get a reaction out of us.   The reaction they want, of course, is for us to watch.   I could make a television show that would have spectacular ratings.   It would consist of scantily clad women walking around with their boobies poking out, pushing shopping carts full of food and carrying briefcases full of money.   People would watch, too.

But getting back to shopping.   The problem with gathering nuts and berries today is that they are no longer free - you have to pay for them.  So even if you get a "great deal!" at the mall, the grocery store, or the drug store, you still took money out of your pocket and spent it.  They win, you lose - never forget that.

And the same is true for frequent flyer miles, cash back bonuses, rebates and other distracting nonsense.   In order to get these things, you have to spend money and spending money is not saving money, even if they advertise "Savings Galore!"

It is one of those weird English Language things.   Quite frankly, I don't know how foreigners ever learn our language.   We have 100 different words for the same thing.   And we have many, many words that have multiple meanings - which are often contradictory.   "Saving" is one of them.

When I talk about "Saving money", I mean taking money and putting it in the bank or into an investment, so you have it for the future.  These are concrete savings.

Retailers talk about "Saving money" by allegedly paying less for a product that you otherwise would have.   These are often illusory savings.   Taking money out of your wallet isn't "saving" anything - it is merely spending.   Yes, maybe you are spending less than you would have, but in many instances, these "savings" are very illusory - and often used to induce you to spend.

How many times have we heard (or said), "Well, at these prices, who can afford not to buy?" 

But it is a game - and one that you can't win except by not playing.

For example, Tommy Bahama (who used to sell Hawaiian shirts, but now seems to have gone off in other directions) sends me a "free gift card" for $50.   Problem is, nothing in their store costs $50.   Even just buying a cocktail shaker or a cigar box (neither of which I need) means taking $15 out of my wallet (which is likely more than they paid for these things).

And of course, they are hoping you spend more than that.  "If you spend $200, you get a gift card good for $50 - next month!"   So they want you to come back next month, spend another $200, to get the "free gift card" for next month.  It is very clever marketing, but if you followed this plan, you'd end up spending well over $2500 a year there - and end up with a lot of clothes in your closet!

As painful as it might seem, sometimes it is just best to walk away from deals like this.  Free Isn't!

"Excuse me, sir...!" (Beggars)

Beggars in the USA use different tactics than in other countries.  For the most part, these folks are not "needy" and in fact may be dangerous.

Traveling by car can be tiring, and when you enter a gas station, well, you can be vulnerable.   All your valuables are in your car - maybe your wallet, cell phone, camera, and the like.   You are tired, disoriented and distracted.

You try to pump gas, but the gas pump wants you to "log in" and determine whether you want a car wash, a soda pop,  or a gas additive - and then asks for your zip code, your frequent fueler card, and a host of other nonsense, before it will dispense gas (when did that happen and why did we allow it?).   You are distracted, and then someone comes up right behind you and says, right in your ear, "Excuse me, sir!"

You jump about ten feet.  Why do they do shit like that?  To disorient you.  Perhaps distract you.   They want money, of course.   Either by taking it, or having you give it to them.  And they have a long-winded story about a blown alternator or needing a gallon of gas to get back to the Army base or whatever.

The reality is, they are professional beggars.  They go around with these "stories" and try to get you to give them money.  They usually have props, too.  The empty gas can is a good one for the "I'm in the Army and they'll say I'm AWOL if I don't get back to base soon!  Can you spare me a few bucks for gas?" rigamarole.

Babies and children - preferably dirt-smeared - are helpful and in 3rd world countries, people actually rent them so they can beg.

Of course, the cardboard sign "Just Evicted" is always useful - particularly if no one questions why the sign looks so worn, even though you are "Just Evicted".

Locals, of course, see the same beggars on the same street corners for months or years at a time, and understand they are not "just evicted" or just anything.  They are professional beggars, usually drug addicts, and what they want is money to buy beer and drugs.

I had a funny one the other day.  The Ghetto Shell station is tied into the Winn-Dixie gas promotion, so to get 50 cents off a gallon, after buying hundreds of dollars of groceries (they throw pennies at us, hoping we spend dollars!)  I go there to get gas.

A lady driving a Lexus, wearing much nicer clothes than I have, with a very nice hair-do with very expensive extensions, drives up and asks me, "Can you help a lady in need?" - she talks softly, so I have to walk to her car to hear her.  I tell her (truthfully) that I don't have any cash.

By the way, make sure your car is locked when you pump gas - people do this to distract you, while an accomplice loots your car.

I assumed, since she was driving a nicer car than mine, wearing nicer clothes - and did I mention her perfect nails? - that she just wanted directions.  It floored me that she was begging for money - in a Lexus!

When I said, "no" - she drove to the other pumps to ask other patrons.   Apparently, begging is a drive-by sport now.   Or was she selling something?   I doubt the latter, as she did not seem to be a prostitute.  She was too nicely dressed for that.

But it is funny - begging is a big deal for a lot of folks - and many engage in it as a pastime.  Going to the store?  Beg.  Going to the gas station?  Beg.   Wherever you go - Beg.   Someone might give you a dollar, or two, or more.   It adds up, in a perverse sort of way - and if you put that money into savings (instead of crack) wow - you'd could be rich.   But I think most are investing in other things......

How do you handle these sort of folks?   Don't engage them at all.   As soon as you say, "What?" in response to "Excuse me, sir!" you will get the whole "story" and the beggar won't leave you alone until you hand over some cash.  They can get aggressive and even violent.

And often they work in pairs.  One distracts you while the other walks around to the other side of your car, opens the door and takes whatever is in sight.

Sorry, but this sort of thing makes me lose what little sympathy I have for beggars.   Many of these people are not needy or homeless, but just trying to prey upon the ignorance of others - as well as the need some people have to show they are better than everyone else by "caring about the homeless" by aggressively panhandling.   And aggressive they get - oftentimes a panhandling plea can escalate into an assault, particularly if the panhandler is mentally ill or on drugs (which is often the case).  Laws have been passed regulating panhandling as a result of such incidents in places like Key West or Washington DC.

These sort of panhandlers are like the American version of Gypsies.  They seem harmless enough..... at first.

Thursday, December 18, 2014

Hedge Funds - How Capitalism is Supposed to Work?

A hedge fund has taken a position in Darden Restaurants and is turning it around.  Isn't this how Capitalism is supposed to work?

Darden restaurants made a lot of news earlier this year, when talk emerged of spinning off the Red Lobster brand.  The eventually did that, after Starboard Value took a stake in the company and made a 294-slide powerpoint presentation on what was wrong with the chain.

The CEO was forced out, along with a lot of top management.   The the use of private jets was discontinued - and the company announced they will sell off the fleet shortly.

Capitalism at work.

What happens in a lot of companies - and other organizations - is that over time, the people running things start to think it is all about them and what is really important is what they can get out of the company in terms of salaries, perks, and whatnot.   Shareholders are treated as peasants, not to mention the lower employees.

Or worse yet, as at GM, they pander to the employees, so that no one "rocks the boat" and then they sweep long-term liabilities and other chronic problems under the rug.   What really killed GM in the long run was the reliance on SUVs for profits in the 1990's - and management's caving in to the UAW by signing a contract that guaranteed a fixed number of workers per plant, even if they weren't needed.  They didn't want to "rock the boat" and kill off all that lucrative SUV sales profits.   When the market tanked, they were screwed, big time.

Darden, like any other company, had some good fundamentals.   The real problem was, no one was paying attention to the details.   And like with McDonanld's, they had way too many menu items - a sure sign of flop sweat in the restaurant business.  Other than Chinese restaurants, a good restaurant shouldn't have more than a dozen entrees (if that).   Do a few things and do them well.  Trying to do too many things and you will do them all poorly.

Darden restaurants also owns high-end chains like Seasons 52. I went to visit one in Jacksonville and the line was out the door.  Valet parking.  There was a Ford GT-40 parked out front.  This was not "Lobster for Rednecks" - they were attracting an upscale clientele.   Clearly the chain knows how to make good food and a good profit.

UPDATE:  I went there again this afternoon, which is a good time to go as they have drink specials  and tapas-like appetizers.   While Red Lobster struggled to open a bottle of wine, Seasons 52 has wine flights.   This time a new Lamborghini and Ferrari were parked out front.   The food was good, although it is still a chain - and the target market is the "strivers" - people who think they are rich but really aren't.  The last time we went, we sat at the bar by the wait station, and you'd be surprised how much white zinfandel they sell there.   Yes, you can lead a horse to water, but they still want lobster for rednecks - served on a fancy plate with valet parking.

I bought Darden stock at the nadir.  There seemed to me to be good basic fundamentals here, and dumping Red Lobster freed them up to concentrate on the remaining chains and also their other brands.  Now that it has gone up, of course, it is too late to buy.   But all the plebes will buy, hearing how the chain is turning things around.   The same plebes sold, back in June, when they heard about all the problems with the chain.   Buy high, sell low - go bankrupt.

I am not a chain restaurant fan.   I probably still won't go to Olive Garden, even if the food is better.   But I know a lot of people who live and die for these chains.   And the parking lot at the local store is full again.

I think they are in turnaround.

Of course, they still have a long way to go.  With a P/E ratio of 90, they obviously have to get earnings up (and they are up from 0.81 to 0.82, but that is just a start).  They are paying a dividend of about 4% which is stellar - but more than actual profits would justify.   Someone, it seems, was trying to keep the stock price artificially high - no doubt some executive whose compensation was based on stock options.

What will be interesting to see is whether the new Red Lobster can turn around as well, now that it is privately owned.   Funny thing, but when you own something, you tend to take better care of it.

Buy low, sell high.  And the time to sell high is when the folks at Starboard start to sell their stock....

Wednesday, December 17, 2014

Viewer Mail - How Much for Down Payment On Home?

More viewer mail....

A reader writes:

I am thinking about buying a home in the next couple years and have been trying to figure out what makes sense to do so for a down payment and interest paid over the term of the mortgage.  Obviously the more you can put up front the better, but paying for a house in cash is a little out of reach for most people.

Secondly, I will be spending money on rent for the next 5+ years which is money that I will never see again. I am wondering where the tipping point for rent paid vs interest paid or if you have any advice for how I should go about thinking about this. Most blogs I've read recommend saving 20%, but still that's paying interest on a 15-30 year mortgage which still adds up to a ton of money. To me its a question of math. I'm just not sure what the equation is.

As I have noted before, I don't give advice here.  I just put forth my ideas, and if they work for you, great.  No warranty expressed or implied.  You have to make your own decisions in life.  I only suggest using a calculator rather than slogans or beliefs.

The traditional rules about home buying (pre-bubble) were this:

1. Don't buy a home unless you plan on living in it for FIVE YEARS.  That is the time it takes to break-even on the transaction costs of buying the house and selling it.  I detailed this in a posting.   The house may appreciate at 2% a year, and the transaction costs (at both ends) total about 10%.

2.  Put down 20% if possible, to avoid Mortgage insurance (PMI) and to avoid ending up "upside down" on a home.  My first house I bought in the bubble of 1989.   I put down 20%, and was never "upside down".  Others, who were not so lucky (or smart) did funny-money deals with little down, and ended up being stuck with houses, going bankrupt, or having to pay cash at closing when they sold.   Put as much down as you can afford, if you can't save up 20%.  Don't be suckered into low-money-down deals if you can - they usually have higher interest rates.

3.  Buy as much house as you NEED, not as much as you WANT.   If you are starting a family and plan on having two kids, a one-bedroom condo is not a smart choice.  But a six-bedroom mini-mansion with a four-car garage, that you can barely afford, is not a smart choice either.   The first choice means you will end up selling in short order (see #1 above) and the second choice means you will be house-poor and more likely to be upside-down (See #2 above).  If  a Real Estate agent tells you to "buy as much house as you can afford" then find a new agent.

4.  Avoid Condos - they swing wildly in price and are very expensive for what you get.  Also, if you are starting a family, you may outgrow them in a short period of time.  Condos may work in a few specific situations.  But read my blog posting on this, and when the bad shit happens, don't act surprised.

5. Do the math - if it is cheaper to rent, then may you should rent.   In today's market, there are bargains out there.   But just a few years ago, in places like Florida, people were paying four times as much per month to own, than to rent.  Pretty dumb, in retrospect.

I tend to think those "old school rules" are pretty smart.   During the 2000's people said they were "old hat" and we all saw what happened.

There is no fixed equation - it depends on you, your income, the market you are in, the price of the house, the finance rates, property taxes, etc.

I think in general the more you can put down the better.  Avoid that PMI, get the best interest rate you can (and rates today are staggeringly low - a good time to lock in on a good rate!).  But buy as much house as you need - in a decent neighborhood.  Location is key.

Granted, not everyone can put down 20%, particularly when buying that first home.  But the more you can put down, the lower your overall costs will be and the less chance of being "upside down" if housing prices tank.   And traditionally, that is why banks required large down payments in the past.

Buying more house than you need (but you think you can afford) is generally a bad move.  Giant houses cost a lot of money, cost a lot to heat, cool, and maintain, and the property taxes can be staggering.  A house is not an "investement" but a place to live - it is an expense, not a savings plan.  So ignore real estate agents who suggest becoming house poor.

I think if you are thinking about all of this rationally and hard, you will do well. 

Most folks walk into a "dream home" and say, "Ohhhhh!  Granite Countertops!  Where do I sign?"

And that, in short, explains the housing bubble of 2008.

With regard to down payment, we were fortunate that my partner had some money left to him by his Grandmother and his parents were willing to kick in some as well.  That, combined with our savings, put us over the 20% mark and we avoided PMI.   Some parents don't mind "helping out" a child with their first home, but it depends on how wealthy your parents are, etc.  Marks parents helped us out.  Mine said, "go fuck yourself."  That's OK, we did well anyway.

The only time I did a "nothing down" deal was on a $400,000 town house office in Old Town Alexandria, that I bought for $210,000.  I sold it two years ago for $680,000 - and the mortgage payments were paid for by tenants during the 10 years I owned it (and I took a $200,000 depreciation deduction on my taxes, for ten years as well).  Commercial Real Estate is a whole different deal than private homes.

Those were the days!  But that was an investment property, and your home is really not an investment per se, although you will do better than renting, if you stay there 5 years or more.  The longer you stay, the better off you will do.

Good Luck!

America Falls in Love with Public Transit? Maybe

Causation and Correlation are two different things.

CNN recently ran a piece claiming that "America is falling in love with public transit" - and they use statistics to back up this claim.  Public transit use is up by almost 2%!!!!
"From July through September of this year, total U.S. trips on commuter rail, subways, buses, streetcars and trolleys topped 2.7 billion. That's an increase of 1.81%."

The world population is increasing, as is the population in the United States.   And as cities grow larger and more crowded, more people ride public transit.

In a normal environment with increasing populations, the use of public transit would increase.   More people = more people riding public transit.

America's population increases by about 0.7- 0.8% a year.  So about 1% of this 1.8% increase in public transit use (the amount varies by cities cited in their survey) is just due to population growth, period.

The rest of it?  I think it has less to do with a "love" for public transit than the fact there are no alternatives for many folks these days in crowded cities.

When I lived in Alexandria, Virginia in the late 1980's and early 1990's (that seems long ago to some, but it was like yesterday to me) you could drive to downtown DC in about 20 minutes - and a parking space at my office was either free or only $100 a month or so.   Driving was affordable, and using the Metro, as I noted before, could take hours back then, as the trains only ran every half-hour off-peak and they did not coordinate train schedules, much less bus schedules.

Many parts of Alexandria were abandoned, unused land.   Where the U.S. District Court House, the Patent Office, and acres of office buildings and condos now stand, was at the time, an old railroad roundhouse, a dilapidated lumber store, and just acres of unmowed grass.   Eisenhower avenue didn't even connect all the way to Van Dorn street.   In 30 years, all of that has been "built up" and I watched this happen.

Today, the idea of a quick drive to downtown, from where I lived near Mt. Vernon, would be a joke.  And finding parking would be far more difficult - and expensive.   The government increased in size - under Bush and Obama - and many more people live in the area now.   I left.

Most cities across America (other than Detroit) followed a similar pattern.   People are moving to cities and thus, they are using public transit more.

In addition, as the article notes, many cities are building new trolly lines, bus routes, and subway lines.  This means a lot more public transit is now available and in view of this, you would expect an increase in the amount of public transit use.   You would expect an increase of more than a mere 1.81%, however.

Is America really "falling in love" with a bus or subway?   I am less sure of this.   I think it is more a matter of what is convenient to them in a lifestyle and a changing environment - plus the inevitable growth in population in general and urban population in particular - as well as increased availability of public transit.   In view of those factors, a 1.81% gain in ridership is low.

The other statistic cited by CNN is that Americans are driving less.  The reason for this is simple and has nothing to do with public transit.   The reason is telecommuting.   Many of the folks living in or near big cities are now telecommuting.  The entire U.S. Patent & Trademark Office now telecommutes at least a few days a week - if not more.

And that one or two days a week they do go to the office?   Well, they are more likely to use public transit, as paying for an expensive monthly parking permit to go to work a couple days a week makes no sense at all.  I was paying about $100 a month when I worked at the USPTO.  I can't imagine how expensive it is now.

And then there are folks like me, who telecommute all the time, and rarely leave the house.   Taking out the 10,000 miles I drove this summer on my annual sojourn, we drove a combined 15,000 miles this year, if that - or an average of 7,500 miles each - about half the national average.  When you stop commuting entirely, the amount you drive drops off the map.

CNN, sadly, has decided to go on this "progressive" route, and try to be a left-leaning alternative to Fox News (but not as left-leaning as NBC news).  And as such, it slants all their news stories to fit a narrative they want to sell.

And that is the key word - sell.   They want to capture eyeballs to sell you products.  So they report the news they think their viewers and readers want to hear - and will click on.

Tuesday, December 16, 2014

Eternity - Why It Doesn't Exist

Many religions promise eternal life.  How would that actually work out?

Almost every religion on the planet is based on the fundamental principal that if you do good in this life (i.e., obey the leaders of the religion in question) you will get some sort of better life after you die.

In Western Religions (Judaism, Christianity, Islam) this promise is eternal life in heaven, where life will be perfect, you will be perfect, and things just go on forever.


Let's do a little thought experiment.   You die and go to heaven.   Right off the bat, you can see a problem.   You see, not all your friends and family get to go with you.   Some religions even say your dog Rusty won't be able to join you there (The Pope has let up on this recently, however).   How can heaven be "perfect" if you are not with your loved ones in the afterlife, simply because they cursed out loud and ate shellfish?

But let's let that slip.   Think for a moment about eternity and what it really means.   They say the human mind cannot contemplate infinity - which is why religions get away with this "eternity" nonsense.

Well, first thing is, you'd party.   I mean, this is heaven, right?  So you could do whatever you want.   Do all the drugs you want, all the sex you want, and drink all you want.  Your perfect body would never die.   And for a few thousand years - maybe a few hundred thousand years, maybe this would be kind of fun.   But eventually, that would become boring.

Ever wanted to drive a Lamborghini?  Well in heaven you could - and wreck it every time.   And since you live forever, you can drive all the great cars they invent in the future.   You could just consume in excess amounts every day, all day.   And maybe after another 100,000 years, you'd be bored with that.

So maybe then, you'd get serious.   Read all those books you wanted to read all your life but never had time for.   Heck, now you have infinity - eternity.   You can read every book every written, from cave paintings to the latest trashy detective novel.   Heaven has a heck of a book club - and you can meet most of the authors in person, too!

Maybe after a few hundred thousand years of that, you'd get bored.  Maybe you could write your own books.   Sure, you'd suck at it, initially, but after 200,000 or 300,000 years, you'd probably be quite an author.  And you could consult with Charles Dickens or Mark Twain - as they would literally have all the time in the world to tutor you.  After writing every possible book there is to be written (which is an awful lot of books) you'd be bored again.

And music - you could take lessons from everyone from Beethoven to Jimi Hendrix - and eventually have more skill than both combined.  After all, you have eternity to practice.   You could write - and mathematically speaking - will write every piece of music ever conceived by mankind.   Eternity is a long enough time to do this.

Maybe you'd learn languages - all of them - an become fluent in everything from Aramaic to Esperanto.   I'll bet that was quite a fad in heaven for a million years or so - speaking Esperanto and all.   

Now let's see - how much time do you have left.  Oh, right, eternity.

So you do what most people in heaven do - you watch what people are doing on Earth.   And you can watch the entire history of human civilization, until the sun burns out, if you want to, maybe 400,000 or 500,000 times - or an infinite amount.  Infinity times infinity equals infinity.

Given all the time in the world - an infinite amount, actually, you will eventually learn all, know all, and do all.   Once you reach that point, there is little to distinguish you from God himself.   How could you exist in heaven, live an infinite lifespan, eventually know all the secrets and powers of the universe, and still exist as subservient to God?   Logically, it is a mess.

What makes life worth living is the fact it is finite in length.  You can't be expert in everything.  You can't own every kind of car, do every kind of drug, have sex with every super-model.   You have a limited time, limited budget, and limited talents.   In that time period, with the resources you have, you have to forge a life for yourself.

And what makes life relevant is that it is fixed in length and you can only do so much - and yet do so much.

Eternal life?   As I noted, logically it makes no sense.    If everyone lived an eternal life, we would all end up as Gods.   And not only that, it would be boring as hell, as with infinite time to waste, nothing would be a challenge and everything - being perfect - would be too easy to do.

The concept literally makes no sense.   It is like dividing by zero.   The answer is indeterminate.

As I noted earlier in this piece, the human mind cannot conceive of infinity.  We try to, but we always try to fit a beginning, middle, and end into it - and it doesn't work that way.

To people living in olden times, when living to age 40 seemed like an impossibility, "eternal life" must have seemed like a good deal.  That would be like what, 80 years or so!   Like the robin who cannot count more than three eggs in her nest (and thus doesn't notice the fourth being stolen) primitive man could not conceive of numbers greater than 50.

To them, "eternal life" in a "perfect body" seemed like a swell deal, particularly compared to the short, brutal lives they lead, in a disease-wracked and pain-filled imperfect body, toiling from sunrise to sunset, as serf for some nobleman.

Today, however, we have more leisure than in the past - and live much longer lives.   We have a better education and more time to think.   And many people are starting to think that the empty promises of religions are just that - stories told to keep the plebes in line, so they don't start a revolt and overthrow the power structure in the here-and-now.  The power structure that profits handsomely by making promises of eternal life in the there-and-later.

Myself, I don't buy it.   And it seems to me that many people don't bother to think through how this eternal life deal is supposed to work.   Because it can't.   A life without end is a life without meaning.

Farm Share

Kelly's take on Farm Share - from The Onion.

Farm Share is a poplar trend, and a good deal provided you actually eat the food.  We have participated in two, one in New York, and one here in Georgia, and both have been great.   We actually cook though, and this makes a big difference.   A lot of Yuppies buy into a Farm Share to make a political statement, and just let the food rot, as they don't know what to do with it.

Mark used to work at a wine shop (actually a small winery) in New York, and it was a "drop off" point for the local Farm Share.   What was interesting is that a lot of people wouldn't pick up their share, and he had to call them to remind them their share was rotting in the walk-in.  They had a local rule - if you didn't pick up your share the first day, the berries (which rot within a day) were fair game for the staff.  Those who are tardy, do not get fruit cup.

The fact that several of the Farm Share members (mostly wealthy people who drove brand-new BMWs or Mercedes and lived in "look at me!" mini-mansions) consistently forgot to pick up their farm share, was a sure indication to us that a lot of people were doing this to "make a point" rather than to "make dinner."

After a few cocktails, one Farm Share member confided to us that most of her share "just rotted in the fridge" as the kids didn't like kale or daikon radish and moreover, her cooking skills were largely limited to microwaving hot pockets for her kids.

Most Farm Shares come with recipes that give you ideas on what to do with your bucket of Swiss Chard or various oddly shaped root products such as sun chokes (which are good).   I like the Farm Share concept, as it forces me to try new things (that are generally healthy for me) and is a break in our regular kibble.

The local farmers who run the local Farm Share are really cool.  The other customers, though, can be real assholes.   I'm kind of learning that I have to keep to my own self these days, as it is just isn't profitable to be "nice" to others.

I was picking up our share today and a lady roars up in a "Luxury SUV" with a St. Simons plate on the front.   As she walks by me, I say, "Hi" and she glares at me.   I go to pick up my share and try to make small talk.   "Isn't this great?" I say.  Silence.  "Have you tried any of the recipes that come with the share?  We've tried them all!  We made cabbage potato latkes,  last week! They were great!"

She looks at me for a second, and then says, with a condescending sneer, "We don't eat potatoes!"

So I said, "Well, fuck you bitch!"  Well, not exactly.  I think I said something like, "Well, it had cabbage in it, too..." and then quietly slunk away.

OK, discussion over.   People who live on St. Simons island think their shit doesn't stink and they also have a big stick up their ass.   Funny thing, too, their island actually has a ghetto (and a crime rate), and yet they look down as us poor Jekyll folk as if we were all Hillbillies.   Oh, well, you know the type - just better off not to engage them.  I imagine her crisper is filled with last week's rotting Farm Share.  She'll just jam this week's in on top of it - sort of like composting.   I'm sure it is a designer fridge, too.   Why are people like that so unhappy?  They have all those material things, right?  Oh, right.  That's why they're unhappy.

You know, she could have just nodded her head and said, "You don't say!  Bless your heart!"  She chose not to.

So what do you do with all these vegetables and roots?   Well, if you are stumped, just make a refrigerator pie.  Take a pie crust, line it with shredded cheese, then take every leftover in your fridge, chop it all up, add a few cloves of chopped garlic, some leftover rice, and a few eggs to bind it all together, and then put it in the pie crust and bake.   Kinda gross, but it beats hot pockets!