I've lived all over this country. It's not bad. It really is homogenous. I, initially left the cocoon of small-town Pennsylvania 45 years ago. Tourist- like travel is worthless. I can get as much by reading a travel book or watching a documentary. If you wanna know a place; live there, work there, make friends there, get high there. Be a brief, unwilling guest of a local county jail or play golf at a country club. Play some poker or a board game. Play pool. Get laid. I recommend all of those things but getting cuffed and stuffed isn't as nice as the country club thing. The buffet is no where near as good and the hired help in uniform is not as polite. I will say they always call you sir and mister in a county jail but you can tell they really don't mean it. The staff at a country club doesn't mean it either but they do try harder to hide it.
Here's something that's true. I can walk into a neighborhood bar in any corner of this country, as a total stranger and within a half hour either meet someone who will sell me marijuana or direct me to someone who can. The same is true of various forms of other drugs. That's uniform. That, also, is America. Any statement that doesn't acknowledge anyone who wants marijuana has been able to buy marijuana for decades is just silly.
That implies a decades long, logistic and supply system that rivals Johnson and Johnson or Bristol Meyers. It also implies an entrenched system of clandestine wealth and extensive graft that kinda boggles the mind. The truth is and has been that anyone who wants drugs can have drugs. Euphoria is popular. Go figure.
This is something people don't get: Generations now, have experimented with drugs. Anecdotally, I'd say about 1% managed to get into some sort of trouble. They were pretty spectacular about it but they were few. They were never the best and/or brightest of us.
Here's what the legalization of marijuana really means. They are watching, closely, how the issues of banking, taxation and transition from clandestine to mainstream income will be handled. They are also watching how authorities from the local level to the national level can be weaned from the graft and moved into legitimate profit. A guy like Bill Bennett wasn't the drug Czar to coordinate law enforcement activity. He was there to coordinate the graft. A national clearing house for bribery.
At the end of Prohibition the government changed the currency from the "foot longs" to what we are familiar with today. They didn't do that to save paper. They did that to bring the clandestine wealth from bootlegging back into the legitimate economy. Have your 100's, twenties, tens and fives changed lately? Do you really believe that was done to defeat the couple hundred millions that could account for counterfeiting? I'm thinking the couple trillion in the underground drug money was the real reason. As it should be.
In answer to your questions: No, I haven't been high in 15 years. I just got tired of it. I like scotch and a good cigar. But I also like money. This emerging, legitimate market looks like an investment opportunity to me. We'll see.
Sunday, February 12, 2017
Friday, February 10, 2017
The Minimal Approach
I was reading about economics today. I don't recommend it. I'm retired, 65, in good health and I have an internet connection. You'd think I'd be watching porn but no. I was reading about minimum wage laws. At this point I normally say something like, "It's really interesting." No, it's not. It seemed an awful lot like work. So, I took a nap. I did finish the little bit of research I'd set for myself. I'm much refreshed.
I became interested in the origin of minimum wage laws in general and in the United States in particular mainly because I wanted to advance a contrarian idea and didn't want to sound like too much of an ignoramus. I could put you to sleep with what I learned. Maybe I will. If this essay works as a sleep aid, recommend it to your friends.
One of the first things I learned confirmed my original thinking about the relations between management and labor. They're hostile; go figure. The original wage laws were actually limits on maximum wages paid. They came after the plague years when labor was scarce. Over time, those various Acts were amended to become a minimum wage. That's when Kings were Kings and legislative bodies knew their place. Not that I recommend that.
That evolution of thinking and those Acts were based in noble ideals. National minimum wage laws in the U S grew out of the revolution in thinking the Great Depression engendered. That circumstance makes a difference in conception. It saw the marriage of two ideas. 1: The value of labor needs to be recognized and protected. 2: We, as a society, do owe help and support to our fellow citizens as a way of providing for the common good. It seems so simple now but the decades of debate concerning just that issue will glaze your eyes over. Add in the recent (at the time) and final debate over income taxes and the whole thing will induce a coma. Apparently, the spectacle of the noble poor literally starving to death in the streets changed the consensus. So, the two ideas of providing for and serving the general welfare and the minimum wage were married. Like most marriages, the ideals didn't quite mesh but did get along. Let's talk about the offspring.
The offspring has been a form of socialist idea. Socialism just doesn't work. Before you start thinking about my political persuasion look up the term "Socialism". The way the term is used, at this time, in the United States is an insult to the term itself and an insult to intelligence. Puleese!
Here's the deal. Our goal is to have capitalism function in such a way as it provides profit to entrepreneurs and provides a decent living to labor. It can do that if we make it do that in the proper manner.
Here's the proper manner: ( I bet you knew I was gonna say that.) In the nearly 90 years since the Great Depression, we have had a debate about just how much help we extend to our fellow citizens to actually serve rather than harm the common good. I say it that way because that's what we have been really debating. We have realized that poverty for some of us does not serve prosperity for the rest of us.. I should say that twice but I won't. You should think about it at least twice. We have established what entitles our fellow citizens to our financial assistance in order to serve all of us. In that connection, there are inescapable questions: Why is the owner of a fast-food franchise driving a BMW while the rest of us are paying for his employee's food stamps and driving Chevys? Why are the Walton family the richest people in America while we pay for their employee's health care?
Abolish the minimum wage.
If you employ an adult at a wage that entitles that adult to so much as one dime of assistance from the rest of us you, as the employer, should be taxed dime for dime, dollar for dollar in the amount of that assistance. That would be capitalism! Things would cost what they actually cost to produce without government subsidy to payrolls. Government subsidy to payrolls and directly mandating levels of compensation is Socialism. Regulation of prices and wages by tying them directly to reality is Capitalism.
Capitalism = Good. Socialism = Bad. Corporate Socialism = an obscenity.
I became interested in the origin of minimum wage laws in general and in the United States in particular mainly because I wanted to advance a contrarian idea and didn't want to sound like too much of an ignoramus. I could put you to sleep with what I learned. Maybe I will. If this essay works as a sleep aid, recommend it to your friends.
One of the first things I learned confirmed my original thinking about the relations between management and labor. They're hostile; go figure. The original wage laws were actually limits on maximum wages paid. They came after the plague years when labor was scarce. Over time, those various Acts were amended to become a minimum wage. That's when Kings were Kings and legislative bodies knew their place. Not that I recommend that.
That evolution of thinking and those Acts were based in noble ideals. National minimum wage laws in the U S grew out of the revolution in thinking the Great Depression engendered. That circumstance makes a difference in conception. It saw the marriage of two ideas. 1: The value of labor needs to be recognized and protected. 2: We, as a society, do owe help and support to our fellow citizens as a way of providing for the common good. It seems so simple now but the decades of debate concerning just that issue will glaze your eyes over. Add in the recent (at the time) and final debate over income taxes and the whole thing will induce a coma. Apparently, the spectacle of the noble poor literally starving to death in the streets changed the consensus. So, the two ideas of providing for and serving the general welfare and the minimum wage were married. Like most marriages, the ideals didn't quite mesh but did get along. Let's talk about the offspring.
The offspring has been a form of socialist idea. Socialism just doesn't work. Before you start thinking about my political persuasion look up the term "Socialism". The way the term is used, at this time, in the United States is an insult to the term itself and an insult to intelligence. Puleese!
Here's the deal. Our goal is to have capitalism function in such a way as it provides profit to entrepreneurs and provides a decent living to labor. It can do that if we make it do that in the proper manner.
Here's the proper manner: ( I bet you knew I was gonna say that.) In the nearly 90 years since the Great Depression, we have had a debate about just how much help we extend to our fellow citizens to actually serve rather than harm the common good. I say it that way because that's what we have been really debating. We have realized that poverty for some of us does not serve prosperity for the rest of us.. I should say that twice but I won't. You should think about it at least twice. We have established what entitles our fellow citizens to our financial assistance in order to serve all of us. In that connection, there are inescapable questions: Why is the owner of a fast-food franchise driving a BMW while the rest of us are paying for his employee's food stamps and driving Chevys? Why are the Walton family the richest people in America while we pay for their employee's health care?
Abolish the minimum wage.
If you employ an adult at a wage that entitles that adult to so much as one dime of assistance from the rest of us you, as the employer, should be taxed dime for dime, dollar for dollar in the amount of that assistance. That would be capitalism! Things would cost what they actually cost to produce without government subsidy to payrolls. Government subsidy to payrolls and directly mandating levels of compensation is Socialism. Regulation of prices and wages by tying them directly to reality is Capitalism.
Capitalism = Good. Socialism = Bad. Corporate Socialism = an obscenity.
Wednesday, February 8, 2017
Walk Like An Athenian.
We've all been told that ancient Athens was the Cradle of Democracy. They had a chosen council of citizens that directed the city's affairs. We sure don't talk a lot about the descent into tyrannical rule by "Men on Horseback". We also don't concentrate on how those citizens were selected. First: Citizenship depended on wealth and class. Your parentage had to be right and you had to own property. Universal suffrage is a relatively new idea. The idea of selecting only on the basis of merit is a relatively new idea.
The most important aspect of the selection is overlooked. The members of the council were not voted for. There were no campaigns, campaign promises or appeals to the emotions of the crowd. I'm pretty sure all those things are at least, distasteful. Frankly, the more people we have voting on the basis of 30 second Charmin commercials the worse off we are. If you're clueless, do the rest of us a favor and don't vote.
In Athens, these council members were selected by lot. What this did was create a pool of responsible citizens who tried to inform themselves because at any time they might be called upon to make decisions for their fellow citizens and themselves. That's a nearly total reversal of what we have now. Most people think greed is the most corrosive motivation. Most people slept through their survey philosophy course and relied on detailed regurgitation to pass. In fact, the Will to Power is the most corrosive motivation. I can think of a dozen recent examples of the damage that has been done and there are hundreds in history from before the Greeks to us.
So, what should we do that we almost certainly are not going to? We should fill local offices by lot from the pool of available citizens. County and city council people and so on should be chosen by lot. Out of that pool of people who have gained some experience, higher state legislative offices would be filled, again, by lot. Congressional seats should be filled by members of that pool. Executive officers would still be selected by popular vote but you would have to think those candidates would come out of those various pools of governmental experience. That would all but eliminate greed and therefore corruption from the equation. How do you pick an individual to bribe from a pool of potentially thousands?
In a way, I am a Utopian. I actually believe, given the evidence, we live in, by any reasonable definition, Utopia. Hey, that doesn't mean we can't make it better.
That's why I think a detailed understanding of history is so important. By not knowing what the Athenians actually did we built systems with an easily avoidable flaw. That's pretty dumb.
October 11, 2018;
It turns out this is an idea and philosophy known as Sortition, that's been around for a long time. So I'm on the right track just a later train.
The most important aspect of the selection is overlooked. The members of the council were not voted for. There were no campaigns, campaign promises or appeals to the emotions of the crowd. I'm pretty sure all those things are at least, distasteful. Frankly, the more people we have voting on the basis of 30 second Charmin commercials the worse off we are. If you're clueless, do the rest of us a favor and don't vote.
In Athens, these council members were selected by lot. What this did was create a pool of responsible citizens who tried to inform themselves because at any time they might be called upon to make decisions for their fellow citizens and themselves. That's a nearly total reversal of what we have now. Most people think greed is the most corrosive motivation. Most people slept through their survey philosophy course and relied on detailed regurgitation to pass. In fact, the Will to Power is the most corrosive motivation. I can think of a dozen recent examples of the damage that has been done and there are hundreds in history from before the Greeks to us.
So, what should we do that we almost certainly are not going to? We should fill local offices by lot from the pool of available citizens. County and city council people and so on should be chosen by lot. Out of that pool of people who have gained some experience, higher state legislative offices would be filled, again, by lot. Congressional seats should be filled by members of that pool. Executive officers would still be selected by popular vote but you would have to think those candidates would come out of those various pools of governmental experience. That would all but eliminate greed and therefore corruption from the equation. How do you pick an individual to bribe from a pool of potentially thousands?
In a way, I am a Utopian. I actually believe, given the evidence, we live in, by any reasonable definition, Utopia. Hey, that doesn't mean we can't make it better.
That's why I think a detailed understanding of history is so important. By not knowing what the Athenians actually did we built systems with an easily avoidable flaw. That's pretty dumb.
October 11, 2018;
It turns out this is an idea and philosophy known as Sortition, that's been around for a long time. So I'm on the right track just a later train.
Tuesday, February 7, 2017
A Weak And Stupid God
I was thinking about this Quetzalcoatl guy and Montezuma and Cortes. It's really kinda interesting. This Quetzalcoatl was a feathered serpent god at the foundation of Aztec religion. There was a resurrection or return myth about him. That's interesting because it isn't all that frequent in religious mythology or dogma. Pick your term.
If you waste enough time thinking about it we're lucky there is no such myth in Islam. Imagine what that could be like. These people are crazy enough. We could have some guy running around claiming to be the son of Allah.
But we don't. I digress.
So, this is what happened. Quetzalcoatl was to return some day born on white wings with great power. Cortes shows up in ships with white sails and firearms. We still are trying to deal with gun powder so you can see how it could have been an issue in a society that had never seen it.
Montezuma is not just the head of the government but he's the head of the religion. Theocracy is a bad idea we're still trying to deal with.
Cortes meets all the prophecies. He must be the real deal. He must be god returned. Montezuma fatally agrees.
Montezuma is strangled by Cortes's men. It's a scene the drama of which has never been explored. It's a scene worthy of Sophocles, Euripides or Shakespeare. Imagine being murdered by god. The melancholy Mexican? Maybe not.
My thought was: What if Cortes was the reincarnation of Quetzalcoatl; was, in fact, a god and just wasn't very good at it? What if Montezuma had spent his life worshiping a weak and stupid god and in the end, got what he could have reasonably expected, if not deserved.
When Jesus fasted in the wilderness, Satan came to him and offered him dominion over the governments of the world. Jesus turned it down because he didn't wish to be under-employed. What kind of god needs something as puny and useless as a government to enforce his will? What kind of god needs children to be forced to senselessly mumble his praises by rote? What kind of god seeks dominion of these sad men's minds and wallets? That god doesn't believe in the power of a willing embrace.
What kind of omnipotent god is offended by a Mapplethorpe, a Flint or a Falwell or a Robertson? What kind of god is offended by Rushdie or me for that matter?
Those gods would have to be weak and stupid gods no better than Quetzalcoatl.
The God who has my faith doesn't need my poor support. He smiles on our lives even in our follies.
If you waste enough time thinking about it we're lucky there is no such myth in Islam. Imagine what that could be like. These people are crazy enough. We could have some guy running around claiming to be the son of Allah.
But we don't. I digress.
So, this is what happened. Quetzalcoatl was to return some day born on white wings with great power. Cortes shows up in ships with white sails and firearms. We still are trying to deal with gun powder so you can see how it could have been an issue in a society that had never seen it.
Montezuma is not just the head of the government but he's the head of the religion. Theocracy is a bad idea we're still trying to deal with.
Cortes meets all the prophecies. He must be the real deal. He must be god returned. Montezuma fatally agrees.
Montezuma is strangled by Cortes's men. It's a scene the drama of which has never been explored. It's a scene worthy of Sophocles, Euripides or Shakespeare. Imagine being murdered by god. The melancholy Mexican? Maybe not.
My thought was: What if Cortes was the reincarnation of Quetzalcoatl; was, in fact, a god and just wasn't very good at it? What if Montezuma had spent his life worshiping a weak and stupid god and in the end, got what he could have reasonably expected, if not deserved.
When Jesus fasted in the wilderness, Satan came to him and offered him dominion over the governments of the world. Jesus turned it down because he didn't wish to be under-employed. What kind of god needs something as puny and useless as a government to enforce his will? What kind of god needs children to be forced to senselessly mumble his praises by rote? What kind of god seeks dominion of these sad men's minds and wallets? That god doesn't believe in the power of a willing embrace.
What kind of omnipotent god is offended by a Mapplethorpe, a Flint or a Falwell or a Robertson? What kind of god is offended by Rushdie or me for that matter?
Those gods would have to be weak and stupid gods no better than Quetzalcoatl.
The God who has my faith doesn't need my poor support. He smiles on our lives even in our follies.
Sunday, February 5, 2017
Two Abortions
My first mother in law hated me. Considering how things worked out I'm not sure I blame her. Who knows? She forbade us to see each other so we did. We were in love and wanted to be together.
It being the late 1960's and it being the smallest of towns, we knew if my soon to be wife were to become pregnant her mother would insist we get married. So, no more trips to the gas station to buy rubbers for me! Work, work, work!
I have a 47 year old daughter as a result. She seems to disapprove of me but that's a different story. I'm not sure I blame her.
As a young married couple raising a daughter we had two friends in particular. They were in love. That's a life-long bittersweet story that I'm not going to tell today.
Her parents objected to their relationship. Not because he was a bad guy but because they had plans for her education and future and a young marriage didn't suit those plans. In the end, she fulfilled those plans beautifully. She's a wonderful person who has been a positive influence in countless lives. I think her parents were wrong. She would have been fine with a child and a man she loved. Too late to tell. Too late.
To be together they hit upon our plan. They knocked her up. They expected the usual shot-gun wedding. They did not expect the shot-gun abortion. It was 1971 in Pennsylvania. Abortion on demand was illegal unless certain conditions concerning the health and well being of the mother could be certified. For the tidy sum of 4,300, 1971 dollars the certifications were made and the abortion was performed by a OB/GYN in a clean, prominent hospital. No law proposed since Roe V Wade would effect that outcome. The price of the doctor's integrity was set and met.
In 1984 I met a beautiful, smart girl. We were both at the bottom rung of new careers. We both knew we would progress. We did by the way. She became an electrical engineer and, of course, here I am.
We enjoyed living together. We were in love. We planned to marry and start a family when we were more financially secure. To that end she took birth control pills. She was a detail oriented, motivated person. She took her pills as directed and we screwed away. It was a lot of fun.
She did have an occasional flare up of eczema. When it got bad the cure was a visit to the doctor for a shot of cortisone in those days. Now it's prednisone.
So, she had the flare-up, we went to the doctor, got her a shot and we continued to screw. Did I mention it was fun!
Then she turned up pregnant. This is what we thought: If all kids were planned there'd be about a third of the kids there actually are. We were young, motivated and we had families who were great support systems. Then we were told the cortisone shot had counteracted the birth control pills. The chances were the end would be a very painful miscarriage and if the baby went to term it would be profoundly affected. I don't know or care what your morality is. Our morality was to not threaten her health or to bring a profoundly affected child into the world. To act on our morality we went to Planned Parenthood and I wrote a check for $268. We were not happy and had someone confronted the woman I loved for that choice on that day they would have paid dearly for their convictions.
The only morally ambiguous thing I see here is the doctor who sold his integrity. I don't know that he was an immoral or amoral man. I doubt if he thought about it in those terms. I do know that we have never questioned our morally based decision and would dismiss as unwelcome any questions posed by others. I certainly think the decision imposed in the first circumstance was completely, in the end, immoral. Nor was that any of my business and that's the entire point.
It being the late 1960's and it being the smallest of towns, we knew if my soon to be wife were to become pregnant her mother would insist we get married. So, no more trips to the gas station to buy rubbers for me! Work, work, work!
I have a 47 year old daughter as a result. She seems to disapprove of me but that's a different story. I'm not sure I blame her.
As a young married couple raising a daughter we had two friends in particular. They were in love. That's a life-long bittersweet story that I'm not going to tell today.
Her parents objected to their relationship. Not because he was a bad guy but because they had plans for her education and future and a young marriage didn't suit those plans. In the end, she fulfilled those plans beautifully. She's a wonderful person who has been a positive influence in countless lives. I think her parents were wrong. She would have been fine with a child and a man she loved. Too late to tell. Too late.
To be together they hit upon our plan. They knocked her up. They expected the usual shot-gun wedding. They did not expect the shot-gun abortion. It was 1971 in Pennsylvania. Abortion on demand was illegal unless certain conditions concerning the health and well being of the mother could be certified. For the tidy sum of 4,300, 1971 dollars the certifications were made and the abortion was performed by a OB/GYN in a clean, prominent hospital. No law proposed since Roe V Wade would effect that outcome. The price of the doctor's integrity was set and met.
In 1984 I met a beautiful, smart girl. We were both at the bottom rung of new careers. We both knew we would progress. We did by the way. She became an electrical engineer and, of course, here I am.
We enjoyed living together. We were in love. We planned to marry and start a family when we were more financially secure. To that end she took birth control pills. She was a detail oriented, motivated person. She took her pills as directed and we screwed away. It was a lot of fun.
She did have an occasional flare up of eczema. When it got bad the cure was a visit to the doctor for a shot of cortisone in those days. Now it's prednisone.
So, she had the flare-up, we went to the doctor, got her a shot and we continued to screw. Did I mention it was fun!
Then she turned up pregnant. This is what we thought: If all kids were planned there'd be about a third of the kids there actually are. We were young, motivated and we had families who were great support systems. Then we were told the cortisone shot had counteracted the birth control pills. The chances were the end would be a very painful miscarriage and if the baby went to term it would be profoundly affected. I don't know or care what your morality is. Our morality was to not threaten her health or to bring a profoundly affected child into the world. To act on our morality we went to Planned Parenthood and I wrote a check for $268. We were not happy and had someone confronted the woman I loved for that choice on that day they would have paid dearly for their convictions.
The only morally ambiguous thing I see here is the doctor who sold his integrity. I don't know that he was an immoral or amoral man. I doubt if he thought about it in those terms. I do know that we have never questioned our morally based decision and would dismiss as unwelcome any questions posed by others. I certainly think the decision imposed in the first circumstance was completely, in the end, immoral. Nor was that any of my business and that's the entire point.
Saturday, February 4, 2017
Real Estate Reality
As a general rule the largest purchase a person makes in life is a home. This essay refers to that type of real estate transfer. It's surprising to me people don't understand it.
I'll bet you think a buyer and a seller engage in a negotiation and arrive at a price that satisfies them both and a transaction takes place. Fair market value is established by the famous "meeting of the minds". Yeah. That's bull.
Usually, a buyer gets some understanding of what type of monthly payment they can qualify for with a mortgage lender. That gives them a price range to shop in. Being optimistic for the future and their future advancement they shop at the upper end of their qualifications. They spend at their limit or even what they know to be slightly above. Optimism and approval are the keys to putting them in the "sold" category. The housing bubble from 10 years ago proves that. The optimism thing is a constant. It was the lack of caution in the approval thing that created the problem.
As for the seller. The seller, by some means or other determines what they might get for the property they own. Probably the largest concern is not really connected to the current market or economic reality. That concern is; what they need to fulfill their goals. That means what amount after they pay their existing mortgage will let them progress. That usually means local or national relocation and the purchase of another home.
These circumstances are so common as to remain unsaid in the process. In four years I only ever saw one cash sale for residential property. That was pretty funny.
I shared an office with a guy named Joe Thomason. He was a funny guy. He'd worked as a casket painter interestingly enough. He was very dry witted. One day he had this older couple in the office. They were interested in a particular piece of property he had listed. So, he put them thru the qualification process. Job, income, assets. All of their answers were wrong. At the end of the process Joe said, "I'm sorry but you just don't qualify for the mortgage."
To which the husband said, "Well, we were going to pay cash. Would that be all right?"
While he pulled a sales contract out of the drawer Joe said, without missing a beat, " Well, we can do it that way." It was all I could do to keep from laughing out loud. I guess ya hadda be there.
My point is; the purchase of a home involves a mortgage nearly in every transaction. The buyer and the seller have their famous "meeting of the minds" and then the buyer applies for a mortgage. The mortgage company sends out an appraiser to determine if the proposed loan is a good risk and he places a value on the property. He uses a set formula to arrive at this figure. Comparable sales, tax assessment, condition of the property, recent appraisals. Anyone knowing that formula comes up with the same number.
Now here's a hook. Pittsburgh is an average market. 2.5 million people in the metropolitan area.. There are maybe three guys doing the appraisals for all the mortgage lenders in this or any comparable area. They employ the same methodology.
If the appraisal comes in low and won't support the required loan the seller has to come down in his asking price or the buyer has to come up with more cash. The only flexibility is on the part of the seller. The buyer isn't coming up, he's already spending at his limit. He can't and why the hell should he? There isn't going to be a second opinion.
So, this is the reality behind realty. A piece of property is worth what can be borrowed against it. When the people involved don't get that we get a housing bubble like 2007-8.
It would take too long and you aren't smart enough to explain derivative markets to you. You would think the lesson is: Don't lend money to people who can't pay it back. The real lesson is: Regulate, rigorously who these guys can lend money to and get them all off commission.
I'll bet you think a buyer and a seller engage in a negotiation and arrive at a price that satisfies them both and a transaction takes place. Fair market value is established by the famous "meeting of the minds". Yeah. That's bull.
Usually, a buyer gets some understanding of what type of monthly payment they can qualify for with a mortgage lender. That gives them a price range to shop in. Being optimistic for the future and their future advancement they shop at the upper end of their qualifications. They spend at their limit or even what they know to be slightly above. Optimism and approval are the keys to putting them in the "sold" category. The housing bubble from 10 years ago proves that. The optimism thing is a constant. It was the lack of caution in the approval thing that created the problem.
As for the seller. The seller, by some means or other determines what they might get for the property they own. Probably the largest concern is not really connected to the current market or economic reality. That concern is; what they need to fulfill their goals. That means what amount after they pay their existing mortgage will let them progress. That usually means local or national relocation and the purchase of another home.
These circumstances are so common as to remain unsaid in the process. In four years I only ever saw one cash sale for residential property. That was pretty funny.
I shared an office with a guy named Joe Thomason. He was a funny guy. He'd worked as a casket painter interestingly enough. He was very dry witted. One day he had this older couple in the office. They were interested in a particular piece of property he had listed. So, he put them thru the qualification process. Job, income, assets. All of their answers were wrong. At the end of the process Joe said, "I'm sorry but you just don't qualify for the mortgage."
To which the husband said, "Well, we were going to pay cash. Would that be all right?"
While he pulled a sales contract out of the drawer Joe said, without missing a beat, " Well, we can do it that way." It was all I could do to keep from laughing out loud. I guess ya hadda be there.
My point is; the purchase of a home involves a mortgage nearly in every transaction. The buyer and the seller have their famous "meeting of the minds" and then the buyer applies for a mortgage. The mortgage company sends out an appraiser to determine if the proposed loan is a good risk and he places a value on the property. He uses a set formula to arrive at this figure. Comparable sales, tax assessment, condition of the property, recent appraisals. Anyone knowing that formula comes up with the same number.
Now here's a hook. Pittsburgh is an average market. 2.5 million people in the metropolitan area.. There are maybe three guys doing the appraisals for all the mortgage lenders in this or any comparable area. They employ the same methodology.
If the appraisal comes in low and won't support the required loan the seller has to come down in his asking price or the buyer has to come up with more cash. The only flexibility is on the part of the seller. The buyer isn't coming up, he's already spending at his limit. He can't and why the hell should he? There isn't going to be a second opinion.
So, this is the reality behind realty. A piece of property is worth what can be borrowed against it. When the people involved don't get that we get a housing bubble like 2007-8.
It would take too long and you aren't smart enough to explain derivative markets to you. You would think the lesson is: Don't lend money to people who can't pay it back. The real lesson is: Regulate, rigorously who these guys can lend money to and get them all off commission.
Thursday, February 2, 2017
Things You Can See. Things You Can't See.
The average person, world wide, lives and dies within 12 miles of where they were born. It takes a certain type of aggressive personality to strike out into the world and break that paradigm. I've always said that's why Europe isn't worth a squirt. Anyone with any gumption packed up and left to come here two centuries or more ago. The aggressive ones that were left killed each other in a couple World Wars or we went over and polished them off. That kinda gives the lyric, "we won't be back til it's over over there." a whole new meaning. It's over.
Here's something I've seen that you can see. I used to live across the street from a small store. You could buy snacks, drinks, handkerchiefs, reading glasses, post it notes. What nots and you can cash checks and send money orders from there. It's owned by a couple from Kenya. They claim to be brother and sister but who knows? I've notice strangers to a new place tend to alter personal details to fit their new, place based, identity. Nice people. Highly motivated.
The neighborhood is the center of Latin culture in Pittsburgh. That means a lot of Mexicans. Some legal. Others, not so much. We learn some low Spanish. They learn some low English. In ten years I haven't seen a rapist, murderer or drug dealer. It's been my experience that those types of people, no matter their origin, tend to be private about their intentions but over time their intentions become clear with or without a language barrier.
I have seen this on Friday afternoons. These immigrants crowd the little store to cash their paychecks. Never more than five hundred dollars; normally less. They then crowd the counter to wire a majority of that money home to family and loved ones at least a thousand miles away. These people's intentions are plain with or without a language barrier. Write when you get work.
My point is: If I see a guy who is willing to pack up, leave everything he knows behind to travel a thousand miles to a place where he doesn't know the language, doesn't fit the culture just to work to benefit his family, chances are I want that guy working for me. That is a literal, living expression of the American Dream. Inside he looks more like me and you; much more so than some people can imagine. The immigration laws are xenophobic in conception and completely un-American. Bartholdi's mother had a better understanding of our values than the average American. If you don't know who Bartholdi's mother was, stop now. This reading is too advanced for you.
To a certain extent I agree with the formulation , " If you can't speak the language get the fuck out of the country". English as the language of the United States is just common sense. I do not believe common sense should be common law. We have enough trouble and common sense isn't all that common. Nor do I believe in bilingual education. My step-father grew up in not just a Slavic speaking household but in a Slavic speaking neighborhood. When he and his peers went to public school the first six months was spent teaching them English. Then they were taught in English. I don't think I need to over sell the idea of being bi-lingual. He was an unintentionally, articulate man.
That entire episode illustrates what has happened over and over again in the American Dream. The first immigrant generation never becomes fluent in English . I remember someone saying how frustrating it was for a person who was witty and urbane in their original language to be forced to express themselves like an idiot in the language of their adopted country. Their children assimilate.
There is nothing new under the sun. Xenophobia and assimilation are common, perpetual, really quite interesting and assimilation is always beneficial.
Here's something I've seen that you can see. I used to live across the street from a small store. You could buy snacks, drinks, handkerchiefs, reading glasses, post it notes. What nots and you can cash checks and send money orders from there. It's owned by a couple from Kenya. They claim to be brother and sister but who knows? I've notice strangers to a new place tend to alter personal details to fit their new, place based, identity. Nice people. Highly motivated.
The neighborhood is the center of Latin culture in Pittsburgh. That means a lot of Mexicans. Some legal. Others, not so much. We learn some low Spanish. They learn some low English. In ten years I haven't seen a rapist, murderer or drug dealer. It's been my experience that those types of people, no matter their origin, tend to be private about their intentions but over time their intentions become clear with or without a language barrier.
I have seen this on Friday afternoons. These immigrants crowd the little store to cash their paychecks. Never more than five hundred dollars; normally less. They then crowd the counter to wire a majority of that money home to family and loved ones at least a thousand miles away. These people's intentions are plain with or without a language barrier. Write when you get work.
My point is: If I see a guy who is willing to pack up, leave everything he knows behind to travel a thousand miles to a place where he doesn't know the language, doesn't fit the culture just to work to benefit his family, chances are I want that guy working for me. That is a literal, living expression of the American Dream. Inside he looks more like me and you; much more so than some people can imagine. The immigration laws are xenophobic in conception and completely un-American. Bartholdi's mother had a better understanding of our values than the average American. If you don't know who Bartholdi's mother was, stop now. This reading is too advanced for you.
To a certain extent I agree with the formulation , " If you can't speak the language get the fuck out of the country". English as the language of the United States is just common sense. I do not believe common sense should be common law. We have enough trouble and common sense isn't all that common. Nor do I believe in bilingual education. My step-father grew up in not just a Slavic speaking household but in a Slavic speaking neighborhood. When he and his peers went to public school the first six months was spent teaching them English. Then they were taught in English. I don't think I need to over sell the idea of being bi-lingual. He was an unintentionally, articulate man.
That entire episode illustrates what has happened over and over again in the American Dream. The first immigrant generation never becomes fluent in English . I remember someone saying how frustrating it was for a person who was witty and urbane in their original language to be forced to express themselves like an idiot in the language of their adopted country. Their children assimilate.
There is nothing new under the sun. Xenophobia and assimilation are common, perpetual, really quite interesting and assimilation is always beneficial.
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