Roughly the TRUTH

Violence flares, various parties battle for political control, and with a one-way ticket to the U.S. in hand, Al Qaeda waits patiently in the screening lines of Baghdad airport. A scary scenario? Hold on to your seat, but this isn’t what happens if the U.S. pulls out of Iraq, it’s happening right now.

However, there are some results of a U.S. draw-down we can confidently predict: increased dialogue in the region (similar to welfare reform in the 90’s), increased focus on developing alternative energy (in conjunction with the increased oil prices), greater wealth for the poor people in oil-rich nations (in conjunction with the increased oil prices), a dramatic cut in U.S. casualties in Iraq (duh) and a drastically improved budgetary picture (duh).

As Iraq spirals deeper into chaos, at what point will the crazy man quit doing the same thing and expect to get a different result? With elections drawing near, the U.S. congress will finally recognize the need to reign Bush’s policy in. With the start of a significant withdrawal, don’t be surprised to increasingly see headlines reading: peace & stability, prosperity, clean-energy and balanced-budget. Stories that are in high demand and short supply these days.

Then again, WWIII might be just around the corner.

Tracking my hours has never been this easy…

All it took was signing up on this free website and programming their number into my cell phone. It’s called Jott.com and it’s what keeps my head clutter-free and in a (more) Zen state of mind.

In a nutshell, here’s how it works:

Go to their website and sign up for free (you’ll need to provide your mobile phone number and an email address).

Save the number they provide in your mobile phone address book.

Call that number anytime, say something, and like magic, they’ll convert what you’ve said into text and deliver it to the email address you provided during sign-up (in case your voice comes across garbled, the email provides a link to your account where you can listen to the recorded audio message you left).

Daily, I use it to track billable hours, leave notes and send myself reminders. There are some more advanced features, but the basic function alone is truly a saving grace. I can’t remember the last time I found a web application so useful.

So there’s my sales pitch. Hope it comes in handy.

I’m illiterate, but should an English teacher really fail me? A growing number of Americans say no…

…At least when it’s the banks doing the grading. An informed public keeps the wheels of democracy and capitalism greased. However, financial illiteracy still plagues many in the “middle class.”

Underlining the need for reform in schools, disgruntled and desperate borrowers are turning to the courts for help in an effort which should serve as a warning; and if in doubt, just look south of the border where a wave of socialist reformers have recently been swept into power:

“Across the nation, anger and litigation are growing against the tactics of subprime lenders, who offer easy credit for homes that are turning out to be too expensive for millions of Americans now that mortgage rates are going up.”

The King of Consumption or the Queen of Denial
The recent run up in asset values was largely influenced by the easy money atmosphere which prevailed following the economic downturn in 2001. It’s really just a result of basic supply and demand:

1. Cheap money and loose lending standards flood the housing market with buyers (many of whom were never truly fiscally viable)
2. Multiple bidders compete for limited goods (homes) and prices rise
3. Builders struggle to keep pace, resulting in a supply glut once rates rise and standards tighten

A simple analysis by anyone looking at the loan types these “boom” buyers used, could’ve concluded with confidence just when all this trouble would begin.

Some of the most popular loans during this period were ARM’s. Such mortgages typically have rate adjustments (per terms of the note) based on some index plus prime after a fixed period of time (frequently 2 to 3 years). 2007 is the year during which many homeowners will feel that pinch according to various reports.

Coming to Terms
You could argue that many believed rates would stay low, but this is major folly at best. The simple fact that interest rates were at all-time lows should have given many pause. It wasn’t just laymen who fell into this trap; as the WSJ noted in an article last year; Lenders Try to Keep Mortgage Boom Alive:

“More than $300 billion of ARMs issued to borrowers with good credit will begin resetting over the next two years, according to Lehman Brothers Mortgage Research, with $718 billion more of these loans resetting in 2008 and 2009. An additional $507 billion of ARMs issued to borrowers with poor credit will reset over the next four years.”

This over-exuberance may just be a cultural thing, but the best way for government to impact culture is through our public school system, not with laws and regulations limiting democracy and capitalism.

Back in 2005, it could be argued, that even Greenspan got in on the irrational exuberance:

“Lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately,” he argued at the height of the housing boom.

While Mr. Greenspan may have been right about the ability of lenders, I guess that when a final decision is left to human beings, reason and reality aren’t always the best of friends. It must be said, when enough demand exists for something, you can be sure that some go-getter will be right there looking to make a quick buck; even to the detriment of others.

Strong Minds Break Chains
If you take the loan of your own volition, sign up for the class, the lender has the right and the responsibility to hold you accountable for your financial literacy, or lack thereof. Even with these challenges, we should not be deterred - Demand for things that society agrees are “unhealthy” can be minimized, but only to the extent we successfully use our resources to educate the public. In the end, it’s the responsibility of the individual to make the right choice - it’s society ’s responsibility to provide access to the tools for making that choice.

“Yet without a well-informed public, our liberty itself is in peril.”
- Thomas Jefferson

Related Resources
- Real Estate Finance In-Depth, a retrospective (.pdf)
- Annenberg Institute for School Reform
- TIME.com: How to Bring Schools Out of the 20th Century
- Federal Reserve | Personal Financial Education
- The Wall Street Journal Classroom Edition
- State of the Nation’s Housing 2006 | Harvard JCHS
- Residential Mortgage Market in 2007 | MBA
- The Fed’s Consumer Handbook on ARMs

[UPDATE - 3.22.07]
Debating government intervention on Kudlow & Company tonight was Robert Reich, former labor secretary under Bill Clinton. The falseness of his heart was abundantly clear; if not outright frightening - especially given the position he held…I suspect this may have had something to do with Hillary’s comments on the mortgage market.

Watch the debate between the Dynamic Duo.

Compassion is key…

Poor memory has plagued me at times in numerous relationships - at other times, a sharp memory has been a great asset. Recently, the former has been the case. This got me to thinking…”What factor has been the main contributor to these differences? What can I do to improve my memory?”

The importance of finding an answer to this question has increased due to the current circumstances in my life. I have been fortunate enough to meet a number of new people due to current job conditions and my social scene. Here’s what I came up with:

Cultivating compassionate thought is the missing ingredient
When we are fully compassionate we let go of our own concerns and fears, allowing ourselves to more deeply experience life in the shoes of the other person (the truest way to practice the golden rule). This has a much greater impact on our mind than does passive listening/conversing. In turn, the memories become more vivid and have staying power.

On the practical side, there are many books on techniques that can be used to accomplish this:
Dale Carnegie’s “How To Win Friends & Influence People” is one of my favorites. A summary of the book is available if you’re too busy to be bothered, although I recommend reading the entire thing.

The purpose for writing about this has been two fold:
1) It serves as a helpful reminder, a sort-of journal, and way to turn these recent insights into more concrete examples by putting them in writing.
&
2) Perhaps it will test my assumption, provide me with feedback and lead to a better understanding.

I hope to follow up on this article by discussing more ways to:
“Be More Compassionate.”

UPDATE [02.05.2007]
Fresh evidence: Loneliness link with Alzheimer’s | BBC News

“We need to be aware that loneliness doesn’t just have an emotional impact but a physical impact,” said Professor Robert Wilson.

Where memory is maintained, Compassionate relationships have trumped Loneliness. Where it fails, there’s some work to do. My experience tells me that this correlation exists, this article tells me that it’s probably a safe bet.

Don’t wish for an absence of enemies, only for the compassion that compels them to be friends.

I like.

Valuable insights are gained by Bill and Melinda Gates since embarking on a philanthropic mission via their foundation. They recently discussed this on PBS’ Newshour…

The Interview
Judy Woodruff posed challenging questions to the couple entrusted with billions in other peoples money:

“There’s been some improvement, but in terms of academic achievement, improved only slightly, and in math, it appears to have gone down. What lesson is there from that?”

From the mouth of Melinda:

“It would be great to work in just new schools or new models of schools, but we’re realizing that you have to work at the district and the state level. You have to have policy changes that support these 1,800 schools that we&