Monday, May 30, 2011

Memorial Day

Summer.  Though it doesn't officially begin until June 21, it begins early, and unofficially, with Memorial Day and ends early with Labor Day.   Two holidays that too easily become associated with three day flankings of summer and without a true understanding or honoring of spirit of the holiday. 

While leaving my neighborhood to meet the other transport volunteer coming from Williamsburg, I ran over a neighbor's dog.  I did not know the neighbor nor the dog.  I'm a careful driver, and the only dog that I have ever run over is my own.  She was a miniature poodle that came running out on  dark rainy evening.  Something she had done a hundred times before, but somehow she ended up under my front wheel.  The anguish that I felt in hitting this lovely dog was no less.  At least she was killed instantly, and I can say in all honestly, there is not another driver out there that could have avoided the outcome.  She came flying out of a wooden fence enclosure (intent on chasing/confronting whatever vehicle she heard) where there are tractors housed (so I had no chance of seeing her movement sooner nor even anticipating that an animal would dart out).  She then stopped right in front of me.   There was no place to go, and veering right or left would have had a more noxious and gory outcome as she would have been pressed beneath a wheel.
There I was kneeling beside this jumbled body sobbing in anguish, " No, no, no." The owner obviously heard me and the nature of my lament would have been unmistakable.  He came out, knelt on the other side of her.  After a minute, he straightened her out and said, "This is going to be very hard for them." He  offered some comfort to me, as he was overcome as well.  He picked her up, and carried her across the street to her home. 

I left to meet my transport.  I was so overcome (and I'm generally pretty calm during disasters), but I was deeply shaken.  I managed my transport--a beautiful Brittany named Phoebe.  But I ended up with a stress induced headache and a general sick feeling in the pit of my stomach that did not abate until yesterday.  The irony of the day did not escape me.  Dogs, cats and children are no match for a car--and try as we might, those cruel intersections of time and space create grievous emotional wounds. 

I stopped by the home of the dog later, but they were not home.  I went home and wrote a heartfelt note and delivered a basket of flowers.  In my note, I mentioned that I wished I could have turned back the hands of time and expressed all of my heartfelt sadness--knowing their own sadness would be amplified even more so.  I also mentioned that I wished I had known her name to mention it in my letter.  I put my e-mail address on the letter.  I received a kind acknowledgment of the note and the flowers, as well as their concern for my own feelings.  Her name was Roxy, and they had 8 good years with her.  Their note back meant much to me.

With Memorial Day, the names of the fallen should also be known.  I had the opportunity to watch "Taking Chance:"  It is not a movie I had seen before, and Kevin Bacon plays the lead character beautifully.  It was a fitting movie to see on this weekend of remembrance.  The movie is based on a true story.  Rather than my telling you about it, you can read about it here. I hope that you'll take a minute to do so. And if you have a chance to see the movie, I think that your time will be rewarded.

Our fallen warriors and our workers on whose sweat 'stuff gets done'...they bookmark the time of the year where procreation and recreation fill the long days. I've not looked at one stock chart this weekend, and I'm happy for that.

Saturday, May 28, 2011

Notes from my Life: Fawn!

I heard that my next door neighbor was caring for a baby deer.  It was found near his pond by a young man who was fishing.  It wasn't a case of the mother depositing it and foraging.  He was dehydrated/starved and had a major tick infestation in his ears. Tim believed that it was no more than a day old, and he was likely a triplet runt left behind.

I wandered over there just now.  They've made a safe enclosure with straw bedding.  As he lay there in the straw (I'll get pic), I marvelled that he wasn't as big as an adult cat. Of course his legs were tucked under him, but even then he is tiny. He is being fed from a bottle.  He enjoys being held, and I got to both hold him and feed him.  They had him inside, and he was laying with Lacy, his lab mix.   Those oft-circulated photos of deer and dogs are no anomalies.

Spring is often a cruel time of year where the helpless emerge into the world and do not find it hospitable. We recently had a wood duck pair make a poor nesting choice, that had no other possible outcome than fatal disaster for the hatchlings.

Since the rapture did not come to pass, I guess the harsh realities of life will come to pass.  Why that person got any air time, I will never know. 

I'll be helping out the Brittany Rescue today, and shuttling a dog a short bit up the road.  It is nice to lend a hand.

Friday, May 27, 2011

Real Estate Woes

My daughter is ready to spread her wings and purchase a home.  She had an offer in on one Fannie Mae home.  She had quite a saga.  She pre-qualified for a loan.  Found a home.  Made an offer.  Verbally said yes.  Then said best and final.  Then copper was stolen from home. She was strong armed to pay for 1/2.  Financing became difficult due to property age and new underwriting standards.  Owner couldn't wait 48 more hours for my daughter to get the second financing secured (she had verbals that the next lender would underwrite).  My daughter's offer was 15k more than the offer taken.  She was treated pretty shabbily for being a first time home buyer.  She learned a few lessons.

While it was a neat, old property, there were some real issues with it.  In preparing it for sale, the painters just scraped all of the lead-based paint off and let it collect around the perimeter of the home.  All of the windows were oversprayed on both the inside and out.  The windows were painted shut, and the kitchen cabinets were rolled--doors shut and all of the hardware covered in paint.  But he property was charming, and she was willing to remediate those items.  She was heartbroken when it fell through.

To be fair, they did ask her to give them a $2K non-refundable deposit.  It was a pretty crappy thing to ask for, because she had already agreed to pay 1/2 for their plumbing mishap (when she had no legal requirement to do so).  She also fixed 11 panes of glass to satisfy her underwriter to meet the deadline. Otherwise, they would have piddled about and likely made her pay for 1/2 of some exorbitant price. Oh well...the new owners have at least 11 panes of glass that have no overspray. She didn't give it to them because she had no way of controlling what the new underwriter would opine even though they had verbally said it looked doable.  It looked doable to the other one too!  She's not in a position to lose $2K to the whims of the mortgage gods. She said no, resubmitted her offer in 48 hours when she got a yes in writing and gave them the $2K non-refundable.  Too late---they had settled for $15K less.  Sigh....

There is no shortage of homes available.  My daughter is moving onto other properties.  I've been in research mode, having not visited real estate too much since my exhaustive work back in 10-2006 and throughout 2007.  I used to keep a list of the trustee sales on each Friday.  It was an informal way of chronicling the snowball of foreclosures.  I used to split the note amounts between < than and > than $90K.  At first the foreclosures were mostly in the lower range, and then they moved higher.

Now, it has been a while since I tiptoed into that work.  But the real madness in escalating home prices began in 2005 and continued through 2009.  The snapshot to the left shows the issue that I'm seeing quite starkly--that any poor schmuck that bought a home in 2007-2009 is potentially underwater.  This home is assessed at $315K, but Fannie Mae took a fanny-whacking and has a note of $458K--the assessment is not even 70% of the note that was taken back.  In fairness, the home is listed at $255K and will likely make a nice purchase for someone.
However, I'm seeing plenty of Fannie Mae homes that are listed higher than the assessment.  Good luck with that.  There are sublime homes, and there are "oh-my-god-can-you-live-in-that homes".  Assessments kept up with the madness.  Here's a look at an assessment history that is the norm for newly built homes. 

No fun paying $569,835 for a home that now sports an assessment of $437,600.  While the absolute numbers above are not representative (that happens to be an expensive property), the relative relationship between assessments and purchase price is representative.

For one nearby county, here is the history in a lovely middle-class neighborhood that is represented by attractive homes on large lots. 

When we ask the question,  "When is the bottom in real estate?" I would hazard a guess that the answer is nested in an assessment table.  If we were in the froth in 2007-2009,  I've got to believe that it is somewhere in the 2003-2005 valuation area. But that is a guess, hazardous or otherwise.  An average of those assessments puts us at about 69% of current assessed values.

If you have voyeuristic tendencies as I do yet don't know where to look, you can peruse the Fannie Mae listings in your area by going to  Select your state and the city/county that you are interested in.

I also dug up an old study that I did when I was convinced that this was never about subprime but rather something larger. Simply put, all housing had been bid up in a way that it outstripped earnings.  And for lenders to lend, they had to come up with fanciful (and fruitcakesque) ways to lend money.  Here's my little nebbish chart.

It was my grand ah-hah! I still believe that this big ball will get unwound further. 

The other thing that I'm seeing are homes coming onto the market as part of estate settlements. These are homes where the carpet is old, bathrooms are gross, kitchens sorely in need of updating, peeling paint, rotten trim, roof rot and HVAC repairs.  These are not homes that can get financed through FHA due to their requirements AND these are homes where there is not much available money from cash-strapped heirs.  On top of our current stressors, we have the bolus of older folks who are dying and leaving behind homes that are nearly uninhabitable. (I'm talking about ordinary middle-class folks, and not the monied class).

I'm not really posing any questions, and I surely have no answers, but these are 'things' to ruminate upon and think about how their dynamics will shape our current woes.

Thursday, May 26, 2011


With Mark Haines' recent passing, CNBC reporters spent yesterday remembering their colleague. It was a visceral reminder of the importance of the binds that tie us.  My last group of colleagues used to make fun of me a bit in the reverential way in which I regarded colleagueship. Yesterday's tribute to Mark Haines by his colleagues was a reminder that I'm not in a minority.

Good colleagues anchor us when we need to be grounded and push us to step in the tenuous ground of the unknown.  They laud our talents and tactfully help us reflect on our lesser traits.  They have our back and are not looking for a tactical place to insert a dagger.  The very best thing that we can have in our work lives are true colleagues.  They are often our true friends, too.

Yesterday's remembrances of Mark Haines' rich legacy at CNBC was a reminder of the importance of colleagueship.  Colleagueship is both the personal and the collective.  It does not exist without individuals who embrace that grand ideal of "all for one and one for all."  Yesterday's remembrances demonstrated how much purchase in practical life a grand ideal such as colleagueship can gain on the slippery slope of workplace dynamics. 

Colleagueship should not be relegated just to our off-line lives. Though one not oft-practiced; it is a useful ideal in on-line life as well. On-line life gives us a chance to express our opinions no matter how sublime or noxious.  We can instantly vote up or down on just about anything.  Being able to say something is not the same thing as having something (of merit) to say--I suppose that is the difference between blather and discourse, and I'm quite sure that there could be several indictments against me on the former.

As part of our on-going professional growth, cultivating the quality of our colleagueship in our on-line and off-line venues is a worthy endeavor.

Sunday, May 22, 2011

Notes from my Life: 05/22/11

If I had any great ideas about stocks, I'd share them with you. Alas,  I'm finding the market's current apoplexy unnavigable; therefore, I exercising my right just to stand aside.  But there are a few things going on outside of the market, so I thought I would write a small bit on them.

Yesterday's mail brought Howard Marks' book:  The Most Important Thing:  Uncommon Sense for the Thoughtful Investor.  I'm three chapters into this well written, sensible and accessible book.  Marks' conversational style, presented thoughtfully (as you would expect from the title!) make for a very enjoyable read.  As most of what I've read so far reflects many of my own thoughts, I'm finding that it tickles my sensibilities--and articulates them so much better than I've been able to do!  I'll write more later, but it is definitely going to go on my recommended reading list.

We have been invited to a 50th birthday party for someone billed as "The Queen of Shooters".  The moniker is apt, as she always concocts great shooters for parties she attends.  I've never made a shooter in my life.  Guests are asked to bring a shooter to the party--which will be judged by the birthday girl.  Well, I consider this a culinary challenge, as well as a chance to venture into a food frontier.  As I want to ensure that I don't end up with too much of a mess, and I have something easy to transport and share, I elected to get these injectors.  I ordered extras...I can see these being featured (responsibly) at an entertainment event at my home. 

My serendipitous excursion into finding shooter recipes led to something called molecular gastronomy.  You did not expect to read about that here, now did you?  Using food-stuff (think pureed olives or creme brulee) that is bathed in a solution of alginate (and then rinsed in calcium lactate solution), it creates an exterior that gels, while the interior remains soft so that it explodes into your mouth.  Though tempted, I've not ordered any alginate or calcium lactate.  But if you are interested, you can go here,, (and photo credit goes to them too) and learn more.

My next serendipitous milestone took me to whip creamers that use nitrous oxide cannisters to whip the cream. I was watching America's Test Kitchen, and they featured the Liss model on their gadget segment. Well, in doing some research, I learned that in addition to whipping cream, you can make mousse and foams and you can infuse oils and alcohol with all sorts of flavorings...habanero vodka or rosemary/garlic olive oil.  The N2O creates a pressurized environment that allows cream to be extruded.  As much as I cook--particularly desserts--you would have thought that I would have his gadget in my arsenal of cooking tools.  Alas, that is not so.  But, I did order two of them, along with the necessary cartridges.

I'm coming full circle here, as I believe that watermelon shooters with a hot pepper bite might just be the ticket for the upcoming party!  I still have to wrap my head around my final offering, but the possibilities are starting to gel.

Our weekend weather was beautiful here...soon it will be hot, humid and just plain miserable.  But for now, it is great to see the flowers, hear the birds, and watch the garden grow.

If you are looking for a beautiful cake to take to any summer outings, let me suggest Chef John Folse's Summer Lemon Pound Cake. It is divine on its own, but with glazed mixed berries (creme de cassis and orange marmalade on the stove, then pour over berries; toss gently) and some premium vanilla ice cream, you will delight many and use nature's bounty in a most delicious way.

Saturday, May 14, 2011

Notes from my Life: 05/14/11

This place has been a wasteland of late, for which I apologize.  I have experimented with writing a few articles directly for Seeking Alpha.  They have a program that if you submit directly to them, they pay you a penny per page view.  I've written three articles, and they were kind enough to publish all three.  Of all the stuff that I have written over the years, both here and other places, it is the first time that I've been paid for it.  So, it is a bit of a milestone.  If you have an interest in reviewing those articles, you can find them here.

In this interregnum, I was busy helping my daughter purchase a home.  It was not successful.  Everything that could go wrong did--none through any fault of her own.  It was a good lesson for her in negotiations, risks and rewards.  Unfortunately, she had her hopes set on acquiring this property.  Learning to deal with the bitterness of disappointment was a central lesson as well as the perils of dealing with others when they are not engaged in good faith negotiations.  Something we all must learn to do.

I have also been digging out of a pile of undone things that have been accumulating in my life.  Needful things, that bite you in the ass if left undone too long or trip you up if piled about.  Putting stuff in a Goodwill bag was just so difficult.  How does one become inextricably tied to an article of clothing?  I have such a good eye for utility, that the someday/maybe nature of most things in my life make it difficult to let go.  I need to practice non-attachment.. . . and exercise, and better diet.  There is no end of things that I need to improve upon.  At least I confine the practice of that trait to myself, and operational processes!

I hope that your own life matters are in good balance or that you are in a process to restore that balance as well as you can.

Thursday, May 12, 2011

Fact or Opinion?

My daughter is a special education teacher for 4th and 5th graders. One learning task was to help her charges determine the difference between fact and opinion. She created an enjoyable slide show to engage them in this important task.  She chose the recent royal wedding, something with which they were all familiar. Each slide had a statement requiring them to answer fact or opinion.

"The queen wears silly hats."  Fact.  No, uhhmmm, opinion.

As she was sharing with me this enjoyable exercise, I was reminded that in market life we must keep our wits about us and ensure that we discern between fact and fiction.  Insofar as I know, there is no one that can divine the future.  Accordingly, statements of certitude about the direction of the market or your favorite stock, are just an opinion.  It is a fact, and not my opinion, that depending on your position in the market, you will overweight opinions of others who support your position.

While the future is unknowable, it is defined by probabilities assigned to possibilities.  Nevertheless, it is a fact that only one outcome will be achieved--and it may not be the highest weighted probability. Do not mistake an emphatic embrace of an outcome as a fact.  It is comforting to follow those that are so certain that the next bear market lurks behind every bump down, or that the bull market gallop is sustainable in perpetuity.  Gold and silver and other commodities are the most recent entries into the fact box that nothing goes up forever.

Another fact about the market is that there are some very smart folks on both sides of any opinion about the market.  I learned long ago to discard the opinion of the perma B's (bulls/bears/buffoons). Worse is that when they finally get it right, they crow and chest thump. Avoid those people.  To be sure it builds camaraderie as we like to be around people who see things just as we do.  They are so smart!  Be careful of the consensus opinions.  If everyone has bought or sold, who is left?  The very smart people on the other side of your trade. The market goes through enough cycles to make even an imbecile look like a genius at one point or another.  I forget who said that the the crowd is right during most trends (up/down), but generally wrong at the turns.  It's the turns that are a bitch, and that's where most drivers become acquainted with ditches and trees in a way they would rather not.

I've had my own idiot/savant moments. My work is to tip the scales toward savant.  I managed to almost top-tick (a fool's game!) silver on a short via ZSL.  Such a beautiful trade.  It reminded me of when I was 5 or so riding my bike.  I let go of the bars to show my parents that I could ride with no hands.  I promptly crashed.  While that example seems like a more fitting story for one that BOUGHT silver at the top, it is nevertheless a poorly managed trade when it is closed too early.  I need a push broom to sweep up all of the money that I left under the table and on the lawn. Sniff!

Equanimity in the market is the most precious commodity of all. Unlike other commodities, this is one that you pay dearly for if you do not have it, and once you possess it, it will pay you. Like my exercise and diet regimens, my practice of equanimity is a spotty one. Having a balanced view of the market and your position in the market is critical.  

It is a fact that the market closed down yesterday.  It is a fact that none of us knows with certainty what the market will do today. Though there will be many opinions about today's market and the market of a 1000 tomorrows, it is a fact that you must choose among outcomes and position in accordance with your risk profile and time horizons.  Understanding your risk profile and time horizons is the first step in your practice of equanimity.