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Deadman’s A-Z Guide to Living: Fear

I mulled over a lot of options while thinking about what to write about for the letter ‘F’. Faith, friends, family, fun, freedom, forgiveness, fatherhood are all topics I want to expand on at some point during this process, but in the end I chose ‘Fear’ because overcoming one’s fears is probably the single most important thing one must do to live the fullest, most productive life possible.

In small, rational amounts, fears are generally fine things, and certainly serve their evolutionary purpose, alerting us to possible threats and dangers, and preventing us from attempting feats which could prematurely end our lives.

Alas, fears don’t often come in modest doses; they prefer to go big, to expand into paralytic phobias, wiggling their way deep into our psyches, crippling us from doing things that could dramatically enrich our lives.

It’s fear that will prevent you from asking your high-school crush to the prom.

It’s fear that will keep you from majoring in theater.

Fear will have you settle for the first job offer thrown your way. Keep you stuck in your hometown.

It is why you won’t buy that stock, start that business, kiss that girl, write that novel, visit that city, join that group, forgive that enemy, fight that battle, take that leap.

It’ll convince you to avoid a confrontation and refuse a challenge, to shirk commitments and shrink from changes.

Fear is the bitter-tasting wellspring for jealousy and hate and cynicism and regret.

In the end, fear will only leave you wondering what might have been.

Overcoming one’s fears, however, is no simple task; I certainly have few answers. This is strictly a ‘do as I say, not as I do’ piece.

I mean, I know how silly most of my fears are, how freeing it would be to rid myself of them, yet they still cast a very strong shadow in my life.

I may have outgrown or pushed aside out of necessity certain of my fears, but mostly I have failed thus far to do something which I know is of utmost importance.

It’s all quite sad, and I’m sure you’ll find more useful assistance within modern psychiatry or on the shelves of your local bookstore’s self-help section. Or perhaps conquering one’s fears merely requires accessing a reservoir of inner fortitude I don’t have or haven’t yet been able to reach. I only hope you will be more successful.

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Now for your amusement and education, I’ll quickly rundown a small sampling some of my more prominent fears – rating them on their intensity, rationality and impactivity (not a word I don’t think but should be) – and hopefully you’ll be able to see how destructive fears can be. Remember, this is merely a small taste of my fears, plenty more where these came from.

FEAR OF SNAKES, SPIDERS and OTHER CREEPY CRAWLY THINGS

Intensity – Low. So ever since I can remember, I’ve always hated bugs. Could never watch nature shows about creepy things, certainly couldn’t stomach it when such creatures dared enter my childhood home, dismantling its aura of safety and security in one fell crawl. If I would see in my room a spider (they were the most prevalent threat in suburban St. Louis living), my plan was always the same: Immediately flee the scene in search of my mother or father to have them get rid of the offending creature. If neither parent were home, I would not return to the scene of the crime for many hours, at which point I would just pray that the bug had the decency to crawl to my brother’s adjoining room.

Thankfully, over time, this particular fear has dissipated. Granted, I still get the chills and make that crinkled-up face when I encounter a bug. And I still strongly believe that civilized man and creepy crawly things should keep to their own natural habitats (thus my aversion to almost all outdoorsy activities, most notably camping).

But I now have a wife of my own, who is at least as averse to creepy, crawly things as I am, and removal of such creatures now justifiably falls to me, the supposed man of the house. I generally succeed in the task, with only minimal shrieking.

Rationality – Medium. True, those creepy, crawly creatures generally mean no harm, and most couldn’t do harm even if they had the desire, but a small number can be poisonous and/or spread disease. And let’s face it, all of them are rather unhygienic.

Impact – Low. Even at the height of this fear, it was never particularly paralyzing. It did perhaps prevent me from pursuing my dreams of becoming an exterminator.

FEAR OF FLYING

Intensity – Medium. I am still not convinced man should ever leave terra firma. I’m not a fan of the ocean, spooked out by its sheer vastness and by all the unknown, unseen things living in the blackness below (the fact I am not a strong swimmer doesn’t help), but my fear of the water pales in comparison to my fear of flying.

This fear has actually intensified over the years – I never enjoyed flying, but now I dread the days I must travel the friendly skies. For me, the worst part is takeoff, as the process of fighting gravity and achieving flight just seems totally unnatural and full of hubris to me, like it’s doomed to fail because we’re somehow disturbing nature’s laws or god’s will.

I think I’ve just seen one too many disaster flicks, but I just cannot fathom a more dreadful way of dying: Being trapped for several minutes in a plummeting, shaking vessel with nothing but the sound of screams and chaos to keep you company as you wait for the inevitable crash and the horror that will surely follow. (Well, perhaps drowning would be worse, but with some flights you have the chance of a water crash landing, making it a 2-for-1 special in worst ways to die).

Rationality – Medium. Now I know the stats that say flying is by far the safest mode of transportation, but I still believe the absolute horrific nature of what goes down in a plane crash justifies my fears on some level.

Impact – Low. So far, I’ve been able to just bear down and deal with the white knuckles. I’ve pretty much gone everywhere I’ve needed to go, including a couple of long trips to Europe and China. But with a new daughter, I sure do wish at least one set of grandparents lived within train distance!

FEAR OF DYING

Intensity – High. I’m pretty sure I was like most kids, completely unconcerned with my mortality. But ever since my maternal grandfather got sick some 20+ years ago, I began to be consumed by thoughts of death. Despite the fact that my paternal grandfather was the only close relative who died relatively early (mid-5os), I was convinced that I was going to die young. I think what I fear the most is the process – I don’t know what it’s going to feel like to die, but I assume there is going to be a lot of pain and suffering involved (I imagine it being like the worst flu you’ve ever had and you just don’t get better – though obviously a sudden death would be much different). I saw both my grandmothers die and it was an awful process, one that I think as a modern, evolved society we could handle a lot better. Many nights I keep myself up with thoughts of death and dying, often with me as the main subject. Unpleasant stuff, to say the least.

Rationality – Medium. You would think that this would be one of the more rational fears to have. Everyone does, in fact, die at some point. It’s likely to be quite painful. You don’t know the where or when, so there’s a disconcerting lack of control over the matter. And unless you’re a person of deep faith (in religion or science), what happens afterward is more than a little frightening to ponder. But actually, and partly because of all these reasons, death is a highly irrational thing to be afraid of – and certainly not worth wasting the precious minutes of living worrying about death often involves. It’s going to happen – you don’t know when or how but it’s likely going to suck – and you won’t know what comes next until it does, so why not appreciate your life and good health while you have them.

Impact – Medium.  Here’s the crazy thing – while the pain of death is certainly a major reason for my fear of it, at least a part of what I fear is that I will die with unfinished business and view my life as a waste of time and energy. But it’s my fear of dying, along with all of my other fears, that often prevents me from fully living. How utterly asinine.

The solution isn’t to ignore our mortality, either, which is what I find myself – and a lot of other people – doing, maybe as a kind of survival tactic (I know it’s somewhat contradictory for a person who fears death as much as I do, but even today, when I read about someone near my age who dies – an alarmingly more frequent occurrence – I feel oddly detached from the news, as if death was this surreal concept that won’t ever affect me or those closest to me). Instead, I need to respect death, come to grips with its finality, its inevitability, and its ultimate meaning, and use that understanding to better take advantage of the finite, glorious blessing that is life. Respice finem.

FEAR OF REJECTION/FEAR OF FAILURE

Intensity – High. These are actually two different fears but they’re closely related enough (and this blog is way too long already) that I’m lumping them together. Being rejected means being dismissed out of hand, without even being given the shot to prove yourself – think of the woman at the bar looking for the escape route, or the potential employer tossing the cover letter in the trash. Failing is even worse; It means you are given a chance but fall short of people’s expectations. Think of the woman several months later dumping you, or the boss firing you. In the former case, you fear people think you’re a fraud. In the latter, you know people think you’re a fraud. And in my life, both fears are omnipresent, and hugely paralyzing.

Rationality – Low. The worst part is these fears make little sense. First of all, only the rejected can give rejection its power. Who cares what other people think of us, our looks, our personality, our talents? You will never please everyone so you shouldn’t take rejection personally. Dismiss it. Scoff at it. Reject rejection. And as far as failure is concerned, it’s virtually a prerequisite for success. I defy you to find a successful person who hasn’t been waylaid by a significant failure at one point in their lives. The only trick is not letting failure stop you, which is, of course, a trick much easier said than done.

Impact – High. No fears have done more damage to me than these two. And while I won’t ever know the full extent of the opportunities that I may have lost because I was too afraid of rejection and/or failure, I do strongly believe I never reached my full potential because of these fears. In the words of the Rev. Sydney Smith: “A great deal of talent is lost to the world for the want of a little courage.”

Deadman’s A-Z Guide to Living: Charity

I basically do everything ass-backwards when it comes to charity.

They say you should give generously. I don’t give nearly enough. I’m not religious, but there is a laudable Judeo-Christian tradition of tithing, which means giving up 10 percent of one’s income to charity (Well, the original intent of the tithe meant giving 10% of one’s income/production to God via the temple – and still means that for many Christians – but has now evolved to encompass charitable giving more broadly). I have no clue if the tithing is meant to be before or after taxes (I’m thinking post-tax), though I often fall well short of that 10 percent goal in either scenario. Heck, many years, I probably don’t tithe my tithing obligations (1 percent, for those not good at math).

They say you should give eagerly. With joy, even. I almost always give reluctantly, feeling a lot like Oda Mae Brown in Ghost when she is forced to give up that million-dollar check to the nuns on the street. I also get more than a little annoyed when people call my house to ask for donations. I try to be polite and respectful as I know these people are just doing their jobs (or even volunteering) and following their scripts, but I find the intrusion terribly annoying. It’s particularly galling the way they keep badgering you when you tell them ‘No, thanks,’ and they just keep moving their requested donation down in increments, to the point where you feel like the cheapest schmuck in the world when you tell them, ‘No I cannot give you $5. Now, please leave me alone.’

The truth is, though, these telemarketing calls are usually quite successful – I am a sucker who has trouble saying no, and usually wear down and give up something just so I can get off the phone. But this surrendering makes me even madder because I feel like I’ve been beaten at a game somehow, and I just know these yeses will only lead to more calls in the future. Which it does – barely a week goes by where I don’t get somebody calling me up asking for money. I now try to avoid answering any number which isn’t recognizable on caller ID, as these bastards always know to block or disguise their names, but once these guys have your number, they will NEVER stop calling until you pick up the phone.

They say you should give anonymously. This makes a ton of sense, as publicizing one’s charitable contributions is more than a bit gauche and tawdry. If the sole purpose of charity is to help others and do good in the world, then you should have little need of attaching your name to donations. But me, I always want to make sure people know when I have given and if at all possible (and impressive a figure), how much. When friends or family ask me to give to a cause, I have never once checked the ‘Donate Anonymously’ box that often accompanies the online forms. And when there is a donation number that will get my name in some sort of stupid brochure, I try and make sure to hit it.

Giving anonymously also prevents the recipient from feeling indebted or humiliated upon receiving aid. A noble idea, and yet one of my favorite ways of giving charity is giving dollars (or worse, pocket change) directly to panhandlers on the street. Why? Because it gives me an immediate sense of satisfaction, hearing their ‘God Bless Yous’ and seeing their genuine looks of appreciation. But do I stop and think about what little good those dollar bills or quarters are actually going to do and how low and beaten down these people must feel that they’ve been forced to beg for my meager assistance in the first place. Yeah, perhaps they are just happy to have the money to find their next meal (or their next score – I make no judgments about how a homeless person finds whatever small happiness he can get in his life), but surely they must also at times feel a tremendous loss of dignity at what they are being forced to do, and the fact that I am getting self-satisfaction out of the small gesture basically negates any of its inherent goodness.

They say you should give more than money. Money definitely helps, but donating one’s time and effort often provides a much more meaningful impact. I fail miserably here as well. One time about a decade ago, I sponsored an inner-city student to help him attend a well-run Catholic school. My brother provided the majority of the financial assistance while it was my main job to help guide him and his family through the process, and make sure the kid was adjusting and succeeding in the new environment. But I was a single guy living it up in Manhattan, and here too, I gave the minimum amount necessary. I made little effort to help him improve his faltering grades, or to give him advice on how to get into college, or to make any kind of lasting impact that could have affected his life beyond his graduating high school. It was yet another example of good intentions gone bad, and I have regrettably lost touch with the student and his family. I also have rarely volunteered my free time for charity since then.

Yet, despite my numerous shortcomings in charitable giving – my poor track record, my questionable motives, my begrudging attitude – I just don’t feel you can do charity wrong. You can do it in better or worse ways, and I resolve hereby to try and keep improving my technique with each passing year – to give bigger and smarter and eagerer.

On the other hand, I am not embarrassed to acknowledge that giving charity also makes me feel good.  The desire to give of oneself to help others is one of the things that separates and elevates us as a species. Whether it’s done because the Bible says doing it will get us into heaven or because natural selection has made empathy a defining human trait, charity is a key ingredient of a successful and well-lived life.

MOFT: Episode 14 (The soon-to-be Mrs. Deadman)

Sorry for my extended absence the last couple of weeks, but the excuse is a good one: I’m engaged!!

So as much as I may have wanted to make the clementine My One Favorite Thing of the Week – I mean, really, it’s got all the health-filled, sunshine-y goodness of the orange but with more sweetness, less seeds and in an adorable little easy-to-peel package to boot – it’s only fitting that I bestow that honor instead on the amazing girl who finally convinced me to give up 35 glorious years of singlehood.

The soon-to-be Mrs. Deadman is sweet, smart, sensitive, silly and sexy (yes, she too comes in an adorable little easy-to-peel package). Even though we’ve been together for just under 2 years, it is tough to imagine my life without her. She has a very caring soul, is incredibly nurturing (you should see her coddle our dog – and to think she wasn’t a dog person when I first met her) and totally trustworthy. Her smile and laugh are infectious. She keeps me entertained and challenged. She supports me in every way imaginable. She gets along beautifully with my family and friends (and as a big bonus, I love her family and friends, too). I really could go on and on about how great my fiancee is (we both hate that word and have stolen her sister’s use of the word beyonce instead), but suffice to say, she is a catch.

Now that I’ve made all the readers sick with my saccharine description, I will begrudgingly admit we’re not perfect. We have our scraps. But that’s OK. We know we love and care about each other a great deal and we start with that premise whenever one of those thankfully rare disagreements arise.

At some point, I will probably discuss my qualms over the institution of marriage in general and how I got past them. But for now I just want to keep this (mostly) romantic!

The bottom line is that I’ve found someone who makes me laugh, who makes me think, who makes me horny, who makes me dinner (on the rare occasion!), who makes me happy … who just makes me better.

And I feel like a very lucky man.

Let’s Get (A Real) Physical …

Earlier this week, I went to my doctor to get a physical.

What a joke.

Nurse came in, took some blood and, because I have a heart condition, administered an electrocardiogram (EKG). After a few minutes, doctor entered, looked in my ears and mouth, listened to me breathe for a bit, asked me a few questions about my general health and the back/leg pain I was experiencing last time I saw her, and then sent me on my way to deposit some urine and check out. All in all, it took less than 25 minutes from the time I entered the doctor’s office to the time I paid my rather exorbitant $35 co-pay, and that’s including the waiting time.

Sometime early next week, I will get the results back from my blood and urine tests, and the numbers will all likely come back within the ‘normal’ ranges, suggesting I am the rather healthy 35-year-old male I appear to be.

But the question will remain, am I really healthy??

I firmly believe we will one day soon regard the current diagnostic procedures and preventative methods of our health system as incredibly rudimentary and insufficient. I mean, people tend to get their cars checked out with much greater detail and frequency than they do their own bodies. Airlines inspect their airplanes after every flight, and the most we do is get a doctor to take a quick look-see at us every so often (and maybe get the occasional mammogram or colonoscopy when we get a lot older)?

It makes no sense. The no. 1 killer in the world is cardiovascular disease, and cancer is expected to overtake the top spot by 2010, according to the World Health Organization. In both diseases, early diagnosis is an extremely important factor in determining whether treatment is successful, and yet symptoms often don’t appear until it is too late. How many people have you known or heard about who seemed perfectly healthy, only to find out later they suffered a heart attack or developed late-stage cancer?

We spend billions and billions of dollars every year on cures and medicines for all sorts of diseases, many of which end up being ineffective … when an earlier diagnosis would often result in much simpler, cheaper and more effective treatment options.

If only we could develop a safe way to comprehensively examine our internal systems on a regular basis, to see if tumors are spreading, arteries are clogging, etc.

Oh but wait! We pretty much have done just that…

Magnetic Resonance Imaging machines, or MRIs, actually do take detailed, accurate pictures of a person’s entire insides. Unlike X-Rays or CT scans, which use radiation to complete a similar function, MRIs are generally considered safe (if a bit difficult to endure for anyone who’s even slightly claustrophobic). Yet despite the MRI’s impressive capabilities, they are still only used after symptoms present themselves and even then with some reluctance because of their high cost.

Around a decade ago, private clinics started popping up all over this country, offering full-body scans using either CT or MRI technologies. Given Americans’ obsession with fighting aging and staying fit, you’d think these clinics would have done quite well. Yet they started going out of business almost immediately, thanks in large part to the high cost of the machines (several million dollars) and the uninsurable exams ($600 to $3000), as well as some extensive negative lobbying by traditional health care providers, including an HMO industry that was likely very worried they would one day be asked to reimburse patients for these tests.

The full-body scans were unnecessary and dangerous, most health-care experts argued, saying that in addition to the radiation of the CT scans, the tests can’t accurately diagnose all diseases, resulting in a lot of false negatives as well as false positives.

False negatives can certainly lead to unhelpful patient complacency, but since cost is what drives almost every medical decision nowadays, I’m guessing it is the false positives and all the subsequent expensive and invasive follow-up tests that most disturb the insurance companies.

But meanwhile, the technology in an MRI machine has since gotten a good deal more powerful and effective. Could it be that the early diagnosis of treatable diseases would end up saving the health industry money in the long run?? Has anyone done a detailed study on that cost/benefit equation?? And what, exactly, is the ‘cost’ of a life, anyway? Shouldn’t that matter??

A German university did a study a few years back where they gave full-body MRIs to 298 ‘healthy’ patients and found something ‘relevant’ in 169 cases, 75% of which were confirmed by follow-up exams. Among the problems discovered included twelve colonic polyps, nine pulmonary lesions, and two previously undiscovered heart attacks. Twenty-one percent of the patients demonstrated atherosclerotic disease, while 12 percent had peripheral vascular disease.

Only one false positive was found in the study. And yet the researchers still concluded that full-body MRI scans ‘should not be performed outside of a research setting due to the uncertainty of whether the benefits outweigh the risks.’

Like I said, what a joke.

ENOUGH!!! …

I’ve had it.

This country has been on engorging on a cheap credit binge for the last decade, stuffing itself on the sugar highs and empty calories provided by ultra-low interest rates and fancy derivatives and zero-down mortgages. Now the chickens are coming home to roost, and everyone is looking for a way to get their butt saved.

It’s bad enough that Congress already spent $150 billion earlier this year on a fiscal stimulus plan that did nothing but allow us to buy IPhones and XBoxes for a few more months. The American people now want more, and it looks like Congress is going to give it to us with another huge stimulus package. It’s money we can’t afford right now and which won’t do anything but provide another very temporary boost to an economy and consumer that needs to retrench for an extended period of time before they can begin to reflate.

But spending money one doesn’t have is the American way. Just ask the country’s beleaguered homeowners now drowning under onerous interest payments, the folks who were too busy picking out Ikea furniture to read the fine print of those adjustable-rate, no-doc mortgages they were signing.  They, too, are soon going to get plenty of help from our friends in Washington.

You see, everyone says we need housing to rebound in order for the economy to recover, so by god, we are going to make the housing market rebound, even if it means the government has to buy up all those nasty little mortgages and restructure them, as Senator John McCain has so magnanimously offered to do (and to hell with the free market and the natural laws of supply and demand).

But really, who could possibly blame the American people for wanting to be spared the pain of an economic downturn?? They’re just following the lead of our most esteemed industry and financial leaders and watching with green eyes as the government tosses around hundreds and hundreds of billions of dollars like so much loose change.

How fitting that the first ones at the government trough were the Wall Street pigs who cooked up this unhealthy smorgasbord slop and fed it to the ravenous, greedy (but mostly unsuspecting) crowd of American consumers.

Oh, it may seem unseemly that the ones largely responsible for creating this mess would be the first to come begging for help, but The Powers That Be knew the financial system that Wall Street had so cleverly manufactured was so fragile that many of these banks couldn’t fail. They knew that the pyramid scheme would have to be unraveled slowly or the entire economy would shut down.

So in order to prevent exposing the rot in the system to the public, regulators forced Bear Stearns into the hands of the relatively well-capitalized JP Morgan Chase, guaranteed the losses with a $29 billion loan and then lowered interest rates in an emergency session.

But that was just the start. You know the rest of the story. The scope of the problems became obvious, and it was clear the cancer had metastasized to every corner of our financial system. Housing in particular was a disaster, so we nationalized Fannie Mae and Freddie Mac (which should never have been privatized in the first place, as one of the only things scarier than capitalism gone mad, is capitalism with implicit government backing gone mad ).

AIG, too, needed help since it had gotten caught insuring a lot of these failing institutions, so we rescued that firm with $85 billion (and then watched as some of that promised money was immediately spent on a lovely sales retreat, replete with a $23,000 spa bill).

And yet all that government assistance still wasn’t enough, so the Treasury and the Fed went to Congress and pleaded for another $700 billion, and only after getting that pork-laden package passed have they begun figuring out exactly how they are going to use that money to save our banking system and economy.

It is all just so very frightening, but the last straw for me was reading an article about some of those poor, poor folks in the hedge fund industry who are now hoping they’ll also see some of that bailout money. Treasury Secretary Paulson insists the money is just for banks and thrifts, but that ‘plans could change’.

You’ve got to be kidding me!!

I mean, for crying out loud, it was only a decade ago when the government and a bunch of banks bailed out a hedge fund company named (ironically enough) Long-Term Capital Management.

Long-Term Capital, with its use of insane leverage (at least 25x) in highly illiquid, poorly regulated financial instruments, including some of the very same derivatives and mortgage-backed securities that are now causing us grief, was in many ways Version 1. 0 of the current Wall Street mess. And yet we ultimately learned very few lessons from that clear early warning sign (This Working Group document has some great background on the LTCM debacle as well as a number of generally ignored conclusions and recommendations).

Frankly, we missed a golden opportunity to increase supervision and disclosure requirements to help rein in some of the industry’s excesses.

Even worse, the LTCM bailout (and the subsequent lowering of interest rates by then-Fed Chairman Easy Al Greenspan) helped fan the flames and foster the environment that we now find ourselves in by encouraging more ill-advised risk taking while institutionalizing the idea that the government will always be there to cover up for our mistakes.

But there is a price to be paid for that largess. Eventually, we’re going to have to pay for this misguided philosophy. I’m just worried that it’s too late, that we’ve dug ourselves into a hole so deep it will take a generation or more to climb out of.

So it’s time to stop the capital injections and bailout plans, the incessant pumping of liquidity into the markets and the careless printing of money, the debt issuance and the interest rate cuts. We’ve done enough to unfreeze the markets and prevent a systemic collapse. It’s time to let the brutally effective corrective mechanisms of capitalism take care of the rest.

As Obama said during the most stirring moment in his Denver keynote convention speech:

‘Enough!’

How The American Dream created this American nightmare …

You hear a lot of conservatives nowadays wanting to place blame for the country’s current economic crisis on the Community Reinvestment Act of 1977, which encouraged commercial banks to lend money to borrowers in low-income areas.

The implication is that the CRA, enacted and significantly expanded under two different Democratic administrations, led to the creation and proliferation of the risky subprime mortgages that have brought the U.S. banking system to the brink of collapse.

Never mind the fact that CRA-regulated commercial banks originated less than half the total subprime mortgages or that at least as much share of the blame for how things got out of hand has to be placed on the Republican-led repeal of the Glass-Steagall Act, which allowed investment banks and other less regulated institutions to engage in similarly risky lending (and to do so without the leverage restrictions placed on commercial banks).

But conservatives do have a point (even if it’s not the one they really intend to make): This country’s myopic focus on home ownership as the be-all and end-all of The American Dream did indeed help spawn the housing and credit bubble, and the CRA is just another in a long list of government policies that have encouraged home ownership as an important component of economic development and societal stability.

OK, maybe I’m just a bitter renter who’s trying to justify his lifestyle and puny net worth, but I do wonder … is home ownership really that important?

The National Association of Realtors certainly thinks so, and some of their rationale makes sense. For society as a whole, home ownership may in fact offer some advantages, as people who buy their homes are more likely to be invested in their communities and neighborhoods than renters. However, I would think these benefits have diminished over time as the nation has developed and become more settled.

Encouraging broad home ownership probably also acts as an alternative means of reducing income inequality in a capitalist economy, and at the same time instills in citizens the importance of private property rights, both of which lead to increased stability in our society. Given that our national savings rate is negative, home ownership also encourages people to invest and save funds they might otherwise not.

But that capital comes at a cost, an opportunity cost. Homes are static entities, non-productive investments. By themselves, homes don’t create anything of tangible value.

And homes are not particularly good investments, either. Robert Shiller did a hundred-year study and found that homes increased in value about 3% a year on average, not much more than the rate of inflation, with only a couple of temporary periods of dramatic outperformance.

Another study by two professors, Roger Ibbotson and Jack Clark Francis, found that housing increased in value about 8.6% a year from 1978 to 2004. Not bad, but not as good as commercial real estate at 9.5% and well behind stocks at 13.4%. (Granted, you can’t live in a stock).

The math gets a bit better when you account for the substitution costs of renting, but a lot worse when you include the other costs associated with home ownership – and there are plenty of them, such as mortgage interest, insurance, upkeep, refurbishing and property taxes. The WSJ estimated that a $300,000 house could end up costing an owner more than $1 million over 30 years. And that excludes the costs of buying and selling a home, which can add up to as much as 10% of the transaction value and make moving to a location that better suits one’s needs or skills a much more expensive prospect than it’d otherwise be.

A good trader friend of mine, who used to live in a rented NYC apartment, described his St. Louis home as a ‘money pit’ and usually wishes he was still renting.

Unlike with stocks, where diversification is possible and laudable, owning a home often requires a person putting almost of his or her eggs in one basket. And if you bought a home in the last couple of years, that’s a much smaller basket now.

Bottom line: Obviously, every locality is a bit different, but I think owning a home can make sense for people who plan on staying in the same place for about 5-10 years, or who enjoy the responsibilities of upkeep and maintenance (I, however, recoil at the prospect of lawn mowing and do-it-yourself repair projects).

But even in the best of scenarios, home ownership is rarely the best path to getting rich. And as we’ve found out in recent months, making it a key goal for a society – at the expense of other worthwhile goals and values – can lead to a rather unwise deployment of capital and some really nasty unintended consequences.

Some perspective on a Gray Monday …

So, the market is down 555 points, almost 5 percent. Yet so far this is no October Black Monday, like when the market dropped 13 percent on October 28th, 1929 or when it dropped 22% on October 19, 1987. (Note: Things are moving fast, market down more than another 100 points since I started writing).

This is, in many ways, even worse – just another Gray Monday, where we get the continued, orderly drip-drip-drip of a market with no confidence, and no idea of where we are headed.

Did you know in the Great Depression the market fell 89% from its 1929 peak? And that it took us three years to get there? I’m not saying that’s what is going to happen now. The world is very different. The genesis of this crisis is very different (whether that’s good or bad, who knows?). But it’s something to consider. I think we’re headed toward that panic sell-off … but we’re not there yet, and even if we have it, I don’t expect to get the immediate recovery we got in 1987.

Things will likely get worse before they get better. Good people will suffer. But to complain seems rather silly when so many people around the world have much bigger problems. As far as I know, I’m healthy. My family is healthy. i have so much love in my life. I know how I’m going to find my next meal. I live in a country where I can speak my mind, and vote my conscience.

Yes, even on Gray Mondays, life goes on.  I walked my dog in Central Park this afternoon and the sun was still shining. It was a beautiful early fall day, and I enjoyed every moment, watching my cocker spaniel search for any bits of food left by careless picnickers and chase squirrels he’ll never catch and wouldn’t know what to do with even if he did.

This election both presidential candidates have been tossing out words like Hope and Change as if they were cheap plastic political buttons, offering very few specifics about how we are going to get out of this mess. But Hope and Change are powerful concepts, and if applied correctly can help people get through tough times.

Today, I’d like to add one more:

Gratitude.

One $700B bailout coming up…

OK, the market’s up big. The bailout plan is about to be unveiled. What does it all mean? Here are my immediate thoughts.

  • Of course, the bailout plan is coming. Talk earlier this week that Democrats or hard-core free-market Republicans would torpedo the agreement was totally asinine. Very few politicians in their right minds would say no to this deal and risk being seen as the ones who put the final nail in the economy’s coffin, creating nightmarish scenes of bank runs and bread lines. What is smart and totally predictable is for politicians to raise a lot of hay and ask a lot of questions, so they can a) try to get things added or subtracted from the bill which they find disagreeable and b) blame others if the deal doesn’t work. This week was truly the American political system working as it always does, with plenty of good, bad, and ugly (or at least messy).
  • One of the last sticking points to getting to a compromise on the bill appears to be related to the Democrats wanting the ability for bankruptcy judges to amend mortgages for primary residences. I’ve said in earlier posts that I don’t think a lot of people understood what they were signing (or were deliberately misled) when they entered into these adjustable-rate mortgages and bought houses they couldn’t afford. So I do feel like it’s OK if we help people stay in their homes even if they were the ones who made bad decisions, as long as we are talking about primary residences – and not second homes or investment properties. However, I also feel this country has for too long encouraged an unhealthy focus on home ownership as being a key element of that mythical American Dream, a subject I will soon expound upon in a future post.
  • There is now talk that Nancy Pelosi and the Democrats want to bring another stimulus package up for debate in the House as early as tomorrow. Please don’t. The first stimulus package didn’t work, and this one won’t either. Again, I understand their political appeal, esp. when Congress is authorizing hundreds of billions to help bailout the banking system, but these stimulus packages offer about the same benefit as energy drinks provide for someone who’s woefully short on sleep. The rush ends way too quickly and the problems end up being worse than before. If we’re going to further burden our already troubled balance sheet, it’d be so much better if we take any money for a stimulus package and use it to help displaced workers acquire new skills or go back to school, or if we used it to invest in our country’s deteriorating infrastructure, or for public transportation projects, or alternative energy development. (anything that will increase American employee productivity or lead to real, lasting tangible benefits, neither of which stimulus plans accomplish).
  • The announcement of the bailout package will hardly signal the end of the story. The details haven’t yet been revealed, but I can assure you if the process goes down anything like the S&L crisis of 20 years ago, there will be plenty of bumps along the way. I’m assuming whatever deal gets signed into law will leave a lot of leeway for the Treasury Dept. and the Federal Reserve in figuring out how to handle the situation, but Congress will be watching closely and they ultimately control the purse strings. Whichever candidate takes over the White House will probably be preoccupied with this issue for at least the first year or two of their term. Plus, financial institutions aren’t the only ones that will be needing financial assistance from the government, esp. if the credit markets don’t unfreeze very soon. I expect the next industry expecting a handout will be the automotive industry, which is struggling badly and loaded with debt. And because Michigan is such a key battleground for the November elections, it would be in their interest to come a-callin’ to the government kitty as soon as possible. (Actually, speak of the devil, the House just passed a $25 billion loan package for the auto industry. Ugh.)
  • Again, I wish I could say with certainty that this bailout package will solve our problems over time and that we’ve seen the worst of this crisis. The problem is, we are dealing with unprecendented events. The world is a lot more complicated than it was in the 1920s and 30s. The world’s economies are more intertwined, and the financial instruments at the heart of this mess are much more complex. I expect a prolonged global slowdown, with the only good news being that we may be further along the road than a lot of other markets, including the high-flying emerging economies that will likely see sharp downturns.
  • The market is up big today on the news of the impending announcement, but we’re nowhere near where we were even last week when the bailout plan was first bandied about. As investors start to realize what a long, hard slog this is going to be, I believe the enthusiasm will wane very quickly (let’s not forget we’re still working under the ill-advised SEC short selling ban, which is surely keeping the market at artificial levels). Even if we’ve seen the market lows this year (something I am not totally convinced of), we won’t revisit our old highs for a few years.

Change in slow motion …

Man* is an unbelievably resilient creature.

He can go from riches to rags and be OK, as long as he didn’t lose his fortunes overnight. He can go from being happily married to bitterly divorced and manage, as long as his love wasn’t betrayed in an instant.

I believe life can throw anything at us, and we will find a way to deal… as long as we have time to adapt.

Take the aging process … Is there any greater cruelty man must endure?? We can fight it, of course, but any victories we earn are merely temporary. There are no surprise endings, no upset specials, in the battle versus mortality.

Eventually, our hand-eye coordination will deteriorate, our physical beauty will fade, our most vital senses will fail. If we live long enough, our minds, too, will likely betray us, jeopardizing even the rare positives associated with aging – the nuggets of hard-earned wisdom, the accumulation of sweet memories – turning them into nothing more than fragile question marks.

And yet, as a rule, we handle all this deterioration with remarkable aplomb. The reason, of course, is that getting old literally takes a lifetime, so we have time to get used to all the changes, to watch them gradually pile up like so many tiny wrinkles. We can adjust. We can adapt.

In many cases, we can even deny aging’s worst effects until we are more prepared to deal with their reality. I mean, I was certainly upset when I realized about eight years ago in a Foxwoods casino bathroom that I was losing my hair, but I’m sure the agony would have been much worse that night if I could have somehow looked into a mirror from the future and glimpsed my current hairline. It would have been too much to deal with.

I still to this day will see an older person walking slowly down the street, struggling with each step, cane in hand perhaps, and be completely unable to imagine myself ever being like that. But one day, if I am fortunate to live that long, I will look into a mirror, and that is what I will see.

And by that time, it will probably be OK.

*I am not referring to the specific gender when I say Man. It’s just more poetic that way …

Best-laid plans ….

Quick post from the countryside (gotta love WiFi) …

So my girlfriend and I (and the dog) left the city late last night to head to the Poconos to celebrate our one-year anniversary (boy, time flies!). We were going to stay at a house owned by my friend’s parents, and we were almost finished with the two-hour trip – driving in the fog-shrouded middle of nowhere, the perfect setting for your typical city-slickers-get-lost-and-then-get-dismembered horror film – when I asked my girlfriend if she had the keys.

After a few seconds trying to figure out which keys I was referring to, she finally revealed the shocking, regrettable answer: Sorry, Charlie. The house keys are in New York. After a moment of shock, we started laughing and didn’t stop for quite a while. What the fuck we were going to do??

It actually reminded me of the time in college – right before Thanksgiving sophomore year I believe – when I was sharing a cab to the airport with a couple of other dormmates. We were all settled down in the backseat, and about ready to get going, when one of my friends suddenly remembered he forgot his plane ticket in his room.

After he had left to go get the ticket, the other two of us laughed at his foolishness but after about twenty seconds the girl remembered she, too, had forgotten her ticket. I couldn’t believe it and was now absolutely cracking up … until I realized several moments later, sitting alone in the cab watching the girl run back into the dorm, that I didn’t have my ticket either. The cab driver must have thought we were either the biggest morons, or playing a huge prank, and I’m guessing the former since he stuck around until we all came back, tickets sheepishly in hand. (Thank god for e-tickets!!!!)

Anyway, back to last night, all worked out well. My friend (whose parents own the Poconos house) told us to head to this cute town called Milford, where he found us a couple of cheap lodging options. But while driving through Milford, we noticed an adorable little place called Hotel Fauchere and checked it out. Unbelievably, they had an available room AND accepted dogs. The cost was somewhat reasonable and the service was great, so I highly recommend the place for New Yorkers looking for a romantic getaway. The room even came with a complimentary bottle of wine!

And then today we picked up an extra key to the house and are now relaxing in the piece and quiet of the Pennsylvania woods. Time to stop blogging and enjoy it!

Manipulated Olympic ceremony makes for perfect China metaphor

So apparently, the Beijing Olympic opening ceremony wasn’t exactly what it seemed. A firework display kicking off the countdown was generated by computer graphics, and a little girl performing a popular Chinese nationalist song was actually lip-syncing to the voice of another girl deemed not cute enough for prime time.

How truly appropriate and how terribly unsurprising.

It’s unsurprising because China has always been overly concerned with its image, worried about its standing in the world and whether it was getting appropriate respect among more established powers. It’s like the little brother finally starting to come into his own and wanting to make sure the entire family knows it. And because the government is so used to controlling how its people get their news (this is a country that denied the extent of the SARS virus problem for months, after all), it’s no wonder that they tried to extend that control to the opening ceremony.

Yet the manipulation was also appropriate because it provided a perfect metaphor for modern China, a nation that is undoubtedly a growing global power, accomplishing many amazing feats, but one that still feels compelled to shape perceived reality, to try and project an even more impressive image. It glosses over the fact most of its billion-plus citizens are still living in abject poverty. It hides the fact it treats animals in horrible ways. It ignores the fact its people are denied basic human rights.

For China, reality has always been what it makes it, as something under its control.

Dog eating is considered barabaric? Then we’ll take it off the menu for a couple of weeks. Our air is considered unhealthy? Then we’ll take the cars off the road for a while. Our weather is considered too dreary? Then we’ll shoot the clouds with iodine-filled rockets and make it rain outside the city.

So forgive me for not being surprised or offended by the fact that China decided to enhance an already impressive fireworks display with computers, or to replace a cute little Chinese girl with an even cuter one. I’m actually glad … because most of the world is being introduced to China for the first time, and now they’ll be sure to know the truth: China has come a long way, but it still has a long way to go.

Edwards, thy name is hypocrite …

Thrilling swimming races and scary Cold War flashbacks have snatched our collective attention from the John Edwards affair bombshell, but before moving on completely, I just wanted to make a couple of quick comments.

First, Edwards is a sleazebag. But not so much cause he first lied about the affair and in the process slandered the writers who reported the news – his entire political career was on the line so it’s easy to understand why he tried so hard to deny the story (and why he probably did much worse to keep the story hush-hush).

And not so much cause he cheated on his wife – I’ve been stung hard by infidelity and it’s a truly awful thing to do to someone you love, but we are human beings, capable of failure and not necessarily designed for monogamy, so I’m not about to judge him solely for falling to temptation.

And not even cause he allegedly cheated on his wife as she battled cancer, which is most certainly tough to stomach, but again I don’t want to judge, because I don’t know the whole story and because then I’d be JUST LIKE HIM.

It’s Edwards’ hypocrisy that truly bothers me. Edwards was never one to shy away from judging others’ conduct. At a primary debate this spring, Edwards scolded Obama and Clinton for bickering with each other, declaring he was from the ‘grown-up wing’ of the Democratic Party.

In an interview with Katie Couric, Edwards said he made the decision to rerun for President after finding out the extent of his wife’s disease, and implied that he would be a morally superior candidate – “I think every single candidate for president, Republican and Democratic, have lives, personal lives, that indicate something about what kind of human being they are. And I think it is a fair evaluation for America to engage in to look at what kind of human beings each of us are, and what kind of president we’d make.”

A few years earlier, Edwards couldn’t resist commenting on President Bill Clinton’s infidelity: “I think this President has shown a remarkable disrespect for his office, for the moral dimensions of leadership, for his friends, for his wife, for his precious daughter. It is breathtaking to me the level to which that disrespect has risen …”

Edwards’ whole political persona was premised on the idea of fighting for the little guy, the poor, the disenfranchised. Just please try not to notice his multimillion dollar mansion or fancy beach house, the $400 haircut, his $55,000 fee for giving a speech on poverty, his disturbing record on tort reform legislation.  The fact that anyone ever bought his spiel amazes me; He always reminded me of a used car salesman. or more accurately, like the slick trial lawyer/politician he is.

Edwards, who loved to speak of his faith,  once said that Jesus would be appalled at “our ignoring the plight of those around us who are suffering and our focus on our own selfish short-term needs”

Amen, brother.

p.s. after writing this, i watched on my DVR the Daily Show-edited version of Edwards’ Nightline confession, and can now honestly say calling him a hypocritical sleazebag is an insult to hypocritical sleazebags.

In the interview, he apparently felt it was necessary to say that none of his family were ‘responsible for (his affair)”; said he didn’t want to talk about other politicians’ affairs and yet brought up McCain’s infidelity, and then pointed out that his wife was actually in remission during his affair (Jon Stewart joked that Edwards “was just celebrating’ and ‘wanted to shoot off fireworks but they were illegal’).

Here are some YouTube links to the full Nightline interview -
Part 1- http://www.youtube.com/watch?v=tCc7x4z52o0&feature=related

part 2- http://www.youtube.com/watch?v=WbL-vj-RKxQ&feature=related

Skipping ads could get a whole lot easier …

Over the weekend, I wrote a post about how product placement and alternative forms of marketing will become more important, partly because technology will make it easier to skip over ads. A New York Appeals Court ruling this morning increases that threat significantly.

The case centers around Cablevision’s wish to offer its consumers DVR functionality (including ad-skipping features) at the network, or ‘cloud’ level, as opposed to solely on individual set-top boxes. An initial court ruling agreed with content owners who charged that the feature amounted to copyright infringement, but the appeals court overturned the decision, saying basically that a network DVR is nothing more than ‘a DVR with a long cord.’

A story on Barron’s Online notes that Bernstein Research analyst Craig Moffett believes if the decision sticks (another appeal is likely), DVR penetration could rise from 25% levels to more than 60% in a very short time, and with more DVR-enabled outlets per home.

The article goes on: “Moffett contends the media companies should have settled the case by agreeing to network DVRs in return for a commitment to block ad skipping. ‘By failing to settle,” he writes, “the media companies now face the bleak prospect of a massive increase in ad-skipping.'”

‘Yes, everything you see on this show is for sale’

Truman Burbank is agitated. The main character from the movie The Truman Show is increasingly suspicious that something’s terribly amiss in his made-for-TV world, and his ‘wife’ tries to calm him down with a cup of ‘mococa.’

“All natural,” she tells him, holding the package of cocoa up to one of the millions of hidden cameras filming Truman’s life without his knowledge. “Cocoa beans from the upper slopes of Mount Nicaragua … I’ve tasted other cocoas. This is the best.”

“What the hell has that got to do with anything?!?” Truman responds, incredulous. “Tell me what’s happening!!”**

Well, Truman, it’s called product placement, and you might as well get used to it.

Product placement may be a truly insidious form of advertising – a sneaky, virtually subliminal, almost always uncredited form of marketing that’s often directed at children – but it’s also wildly effective. And it’s going to continue to explode in popularity because new technologies are making the practice an absolute necessity.

Intentional, paid product placements are not a new phenomenon. A New York Times article suggests it can be traced all the way back to the 19th century, when a film created by August and Louis Lumiere featured the Lever Brothers’ Sunlight soap.

Product placements gained steam in the movies through the ’50s (The makers of Gideon’s Gin paid to have Katherine Hepburn’s character throw their product overboard in The African Queen), and not surprisingly, the television industry adopted the practice almost immediately (soap operas are named as such because they were sponsored by soap companies, whose products were often also integrated into the shows).

Perhaps the most successful use of product placement in history occurred in the 1982 movie E.T., when producers agreed to change E.T.’s favorite candy from M&Ms to Reese’s Pieces, and sales of the new candy exploded.

Not surprisingly, the product placement market has ballooned in recent years, growing from $280 million in 1979 to about $3 billion in 2007, according to PQ media, and the compound annual growth rate from 2002-2007 was almost 41 percent, vastly outpacing the overall advertising market. And the numbers are probably understated given that much of the market consists of hard-to-value barter and other services often provided in lieu of cash by manufacturers seeking to have their products used or highlighted.

We’re not just talking about movies and television anymore, either, because product placement has crept its way into books, songs, videogames and the Internet (the paid search market is in some ways nothing more than a form of product placement, although at least sponsored links are noted as such).

And things are going to get a lot worse. The reason: Technology. The digitalization of content has made it possible, even easy, for people to skip over or delete any content they find intrusive or irrelevant. The DVR will make the 30-second commercial virtually obsolete. Ad blocking software on Web browsers will cripple the effectiveness of display and banner advertising.

It’s quite simple – marketers will have to integrate their messages and brands with the actual entertainment content or they won’t get heard.

Now I’m not a naif or an idealist. Marketing is an inevitable, inescapable fact of capitalism, of perhaps life itself. It greases the gears of business, subsidizes the content that entertains and numbs us, makes the world go round. We are bombarded with ads from nearly the moment we leave the womb until we shuffle off our mortal coils. A Tivo box is not about to stop them from reaching us.

And product placement may be creepy, but it could be worse. One of the latest new new things in alternative marketing is word-of-mouth, or buzz, advertising, where regular folks and with-it trendsetters alike are paid by corporations to spread the gospel about certain products. In ‘Raj, Bohemian,’ a short story in a recent New Yorker, the protagonist is dismayed and disillusioned when he realizes that almost all of his hipster friends (including his lover) are actually paid shills.

Now that’s something I truly find disgusting and unsavory. Even talking about the idea makes me want to take a shower and cleanse my palate by indulging in a delicious Lean Cuisine BBQ Chicken frozen pizza. Unlike most microwaveable pizzas, the crust in a Lean Cuisine pizza gets crispy when you cook it. And it’s low in fat too. Mmmmmm-mmmmm.

**The scene from The Truman Show was taken from a shooting draft of the script i found on the Internet; I didn’t have the actual movie with me to see whether that was actually how the scene went down.

One Woman’s Trash …

So my girlfriend is moving in with me at the end of the week (oh yeah, I’m feeling a whole lot of ‘YAY!’ and just a little bit of ‘(gulp)’), and I was at her apartment yesterday waiting for a couple of guys from the Housing Works charity organization. They were going to pick up some furniture that she needed to get rid of and couldn’t manage to sell.

Apparently, Housing Works only caters to high-end hard cases because they wouldn’t take any of her items that weren’t in top-notch shape (one of the guys scoffed, “We usually don’t take anything Ikea”). But everything needed to go, so I gave them each $20 and asked them to take whatever they didn’t want and put it on the curb downstairs.

As soon as they left, I noticed they had left a few big items, so I reluctantly started to move them downstairs myself, starting with a rather cumbersome bookshelf.

When I got to the lobby, I noticed this group of Asians hanging around my girlfriend’s stuff on the curb, examining it closely, even sitting on the entertainment center. They backed away as I approached, worried that I had come to reclaim the items. I tried to explain that they could take whatever they wanted.

“And there’s more, too, coming,” I said, putting down the bookcase. “Even a TV.”

They didn’t seem to speak much English, but they nodded and grinned enthusiastically. I went back upstairs, hoping they had understood me.

When I returned about five minutes later, struggling to maintain my grip on my girlfriend’s heavy TV, I saw that everything but a wobbly glass coffee table had been taken.

“I guess they understood,” I thought, and set the TV down on the ground as gently as I could.

I went back upstairs, picked up the VCR and DVD player and all of the remotes, and immediately headed back down.

Sure enough, the TV was already gone. And there wasn’t a soul around.

‘Where the hell are these people coming from?’ I wondered. I mean, I knew people liked free shit, and I didn’t really think the furniture would last until the morning, when the NYC trash department would pick it up. But the speed with which her stuff was disappearing amazed me, almost as if i were watching a magic trick.

It was then I turned my head and noticed, sitting near the back of a neighboring sushi restaurant, a group of about six or seven Asians, all with their heads pressed up against the glass, staring at me (or more accurately, at what I had just put down on the ground). They were presumably workers at the restaurant on their lunch break, and they all grinned again when they saw me look their way, a few of them giving me the thumbs up sign.

I couldn’t help but laugh. It made me almost giddy, seeing how much these unwanted items had made their day. It was better than giving to charity. I was getting tired, but I decided to go upstairs and make one more trip, bringing down a ten-year-old microwave. One of the Asians, this one dressed in a white kitchen outfit, greeted me and looked at the machine.

“It works?” he asked.

“It works,” I said, and he took it from me, and walked back into the restaurant, his co-workers waiting for him.

Just another quintessential New York moment.


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