Oh Shut Up and Read the Whole Statement!

OK, so here's one more instance of people getting excited after apparently reading a soundbite. People are blasting William Bennett for suggesting that we should abort black babies to reduce crime. That, my friends, is the exact opposite of what he said!

OK, here's what I understand happened. A caller asked about some book that suggests that the reason crime is down is because abortion is up. Bennet, a pro-lifer, pointed out that the ends do not justify the means. As an example, he asked rhetorically if it would be ok to abort black babies to reduce crime? He then went on to say that it was morally reprehensible in this case, just as it is always morally reprehensible to abort a baby for economic reasons. His point was you cannot justify a moral wrong with economic reasons.

Now, you may be for or against abortion, you may like Bennett or not - I for one know little about him. You may even argue with his implication that black people are responsible for most crime. I do not question anyone arguing on this issues. What I do get pissed off about is people trying to suggest Bennett called for the abortion of black babies!!

One more liberal show ...

I sat with a group of friends to watch the premier of 'Commander-in-Chief' on ABC. If you haven't heard about it, it's a show where a woman VP becomes President when the incumbent dies. We watched it because a friend acted as a Nigerian woman, and it was indeed very exhilarting to see someone you know on network TV.

Having said that, I'm tired of one more liberal show bashing conservatives, which is what my early radar suggests this is going to be about. I mean, the woman's an independent, and the Speaker and others are power-hungry insensitive Republicans. So what I suspect we'll see is Geena Davis kicking some ass as she improves welfare, reduces pollution, bashing money-hungry companies, and allows gay marriage and abortion (though it'll probably be called "choice"). What they won't tell you is what she's really doing is throwing money into that sinkhole called Big Government, implementing meaningless policies independent of whether it truly helps the environment, kills job-creating industries, and allows for the murder of unborn babies. (Yes, it's debatable when, but certainly at some point, a fetus is a life, and that's a lot before it comes out of the mother's womb, so let's not cloak it as "choice"!)

Incidentally, just how retared the producers of this show are is from how they botched facts a young kid could have found Googling. As my Nigerian friend Femi pointed out, Nigeria does not have a Prime Minister, the lady about to be stoned by a Sharia court should wear a purdah if she's Muslim, and why would she be jailed in Christian Lagos if Islamic courts (which are in the North) sentenced her to be stoned for extramarital sex?

Get in Shape!

Folks, I heard from a friend of mine that she was suffering from a rather undesirable ailment. While researching it today, I was struck to see a risk factor that seems to be omnipresent - obesity. It really is time to get our act together, and if you're not convinced, imagine yourself with one of the many ailments you are exposing yourself to.

Just for the record, I'm not suggesting weight caused my friend's condition. Myriad factors influence the diseases we are exposed to, including genetics, diet, exposure to environmental stressors etc. But weight and diet are the two you can control.

Why do I list weight and diet are independent? Because even if you are skinny, your diet can kill you. Don't be complacent that those saturated fats wont harm you because you aren't fat - those arterial walls are clogging up as you chew those fried potatoes.

So get in shape, cut back on fats and salt, start some yoga (pick a studio or class where they emphasize the breathing and mental aspects) and plan to live a long healthy life.

Stay Away from the Java?

The problem with running computer models is that when they are running, you tend to surf the Net. And increase your probability of reading something like this - Mens' Health magazine reports that researchers at the University of Athens measured coffee consumption and aortic stiffness in 228 people and found that caffeine junkies displayed twice as many signs of abnormal arterial pressure as their less-caffeinated counterparts.

Well, guess I need to start thinking of cutting down... don't get too excited! This may be the time for one of those ambitious Five-Year Plans!!

Rita Evacuation from Texas

On my way in, I was hearing on the radio an interview with someone on NPR who said she was tired of the traffic from Houston to Austin, and so was planning to turn around and head back!! This is crazy indeed! You would have thought Katrina taught people to get the hell away from a hurricane. It is also worth asking why it is that people have to evacuate with cars. Can the goverment (state or federal) not provide train or bus services to evacuate large masses of people quickly. Only buses should be allowed to use the carpool lane - that would be incentive enough for people to leave their cars behind and get the heck out!

Everbank MarketSafe

Everbank has a fantastic new product called a Marketsafe CD. Essentially you can choose either an S&P-based or gold buillon-based CD for 3 or 5 years, and you are guaranteed the greater of the S&P/gold appreciation or 100% of your principal. So for example, if you get the S&P-based account, and the S&P 500 gains 50% over the next 5 years, you make 50% in 5 years. But if the S&P 500 loses 10%, you still get back your initial investment (although it's now lost money because of inflation).

I don't care so much for the S&P-based account as I do for the gold-based account. For one, it should act as an inflation-hedge (we got a lot of it coming) and I actually like gold in this time when we are evidencing generally weak currencies - the dollar's heading south, the euro is a currency based on a failing political ideology and the Asian countries are desparately trying to force their currencies cheap.

Everbank also offers currency-based CDs, including offerings such as a Commodity CD, which is a CD based on currencies of four commodity-producing countries.

I wouldn't put a large part of your portfolio in any of these CDs, but I think such products offer the individual investor a great way to hedge against economic events.

Cramer v Coin Flip

If you know anything about investing, you've heard of Jim Cramer. He's the loony who hosts Mad Money on CNBC, and is revered as a virtual investing guru by many small investors. And yet, I was shocked to find out by reading Jason Zweig's commentary in Benjamin Graham's 'The Intelligent Investor' that Cramer's record is several notches below stellar, heck several notches below decent even. Well, now a fellow blogger pointed me to this analysis of Cramer's record that shows he's about as accurate as a coin flip! That is, if you made your decisions to buy and sell by tossing a coin, you'd do about the same as you would have under him! (OK, there are some slight caveats, but you get the point).

Folks, Wall Street and the world is full of hype. If you don't train yourself to ask critical questions about the "experts", well, train yourself to get burned!

Chavez and His Oil Games

When will we realize that our oil consumption is supporting thugs like Hugo Chavez? Fortune had this story about how he is indimidating business leaders into rewriting contracts, and also wants to jack up the price of oil. It's time to reduce our dependence on oil by conservation, pursuing alternate sources and new technology development. If we create the right incentives, the private sector will respond with new technology.

Oh, and talking of alternate sources, isn't it time to look more seriously at nuclear power. Despite the safety issues, this remains in the short-term the most likely candidate for large scale power development, and is relatively safer. I hope to see even cleaner options emerge, but we need to recognize we aren't there yet (which after all these years, you wonder why)

Goodbye Simon

Our time with Simon Wiesenthal has come to an end. The Nazi war criminal chaser passed away yesterday. For those of you who wish to know more about this man, please read this story on CNN. I only wish to add that if any of you happen to be in LA, the Simon Wiesenthal Center and Museum of Tolerance is an incredible experience. I certainly didn't have an appreciation for the horrors of the holocaust till I visited this museum, and in my opinion, it's an absolute must-see. I noticed on the Simon Wiesenthal Center website that they have also opened a Tolerance museum in NY, so you may want to include it on your next trip to Yankeeland.

Born Into Brothels

This weekend, I saw the wonderful documentary, Born Into Brothels, a moving story of children born in the world's oldest brothel, Sonagachi in Kolkotta, India. I often found myself tearing up, and was swept off my feet by the kids featured. It's essentially a tale of Zana Briski, a NY-based photographer who teaches the kids of the brothel photography and tries to use their art to get them out of the brothels and into a decent school. It was truly a wake-up call for me for the needs of so many children, for school, for a decent life, for love ... the children we forget while focussing on meaningless crap from movies to sports. This movie moved me, but I only hope I can keep it in mind rather than allowing myself to drift into the same old habits.

You can learn more about the movie and the kids at the Kids with Cameras website

I-Bonds

I recently learned about a great offering from the US Department of Treasury called I-bonds. They offer a certain percentage over the inflation rate (currently yields a total of 4.8%), i.e. they are inflation-indexed (indexed to the CPI to be more precise). You can redeem it after anywhere from 1 to 30 years. If you do redeem it before 5-years, you lose 3 months worth of interest, which is still a lot less punitive than most 5-year CDs.

Interest earnings are exempt from state and local taxes. If you are saving for college, you definitely should consider I-Bonds, since an I-Bond used for education purposes is some cases federal tax-free!

Learn more about this at the I-Bond page at the Treasury Department.

Baghdad Burning

Thought I'd post the link to one of the blogs I regularly read - the Baghdad Burning blog. While I don't agree with her views, it's still nice to get an Iraqi's perspective.

But here's my war pitch - the reality is that as much as people say they don't want America to interfere, they really want to criticize the US. Look at Rwanda or Sudan - people cried that the US had blood on their hands to not doing enough to prevent the massacre of innocent lives! The reality is when you are your big brother, you sometimes have to protect your lil bro from bullies, even if he doesn't want it.

Have there been American excesses? Sure there have. The reality is that no army in the world can complete a mililary mission without collateral damage... no, let me not use that euphemism - death ... innocent lives! It's easy for us to sit back on our smooth asses and judge how military forces are doing, but we don't walk the corner thinking our balls are going to blown off, a bullet's gonna end it and the like.

When I was an undergrad working in a research lab, I had the opportunity to interact with an Indian captain who had been commandeering troops against an insurgency in Kashmir before he came back for grad school. His accounts were incredible, and his honesty in acknowledging that it's hard to always be rational after so many near-death exercises refreshing. It's part of why I would hate to second guess troops or even law enforcement officers sitting back on our cushy couchs sipping warm Starbucks coffee!

Healthcare Costs Out of Control!

No surprise, but a reminder today that health care costs are out of control, from this Kaiser study. Healthcare costs are also a large part of why American manufacturers, especially automakers, are struggling. A fix is needed fast! To the extent that liability may be causing defensive medicine, we need to address this issue. But we really need to study all structural issues that may be causing this problem. Or else, our pursuit of a perfect medical system would have caused a collapse of the system we have!

Bush an Armstrong

My latest fascination is biking. No, I don't do it, but it is one of those things I'd love to do. I live in a wonderful place to enjoy the outdoors exercises. Anyway, I was trying to remember the name of President Bush's bike (just for fun - no way I can EVER afford it!) and while Googling, came across this tidbit of information - President Bush rides 18-milers burning 1200 calories, getting his heart rate up to 4x his resting heart rate - in the same range as Tour-de-France veteran Lance Armstrong!! Jeez!!That just blows my mind away!

Brown a Phony?

There are few worse things than second-guessing a public official during a crisis, and yet I was sufficiently concerned about this story Time did questioning Michael Brown's creds. For those of you who have been oblivious to what's been happening, MB is the FEMA chief who some claim botched up the emergency relief ops after Katrina. In all fairness, I think the devastation after Katrina would have been too much for any FEMA chief to handle, but the questions about his credibility don't help.

Ouch!

OK, I confess as an engineer, I'm obsessed with numbers. I just have to crunch them. I'm a numeroholic!! So as my MRI machine warms up, I crunched some numbers in Excel using publically available (and reliable) information, and produced the following graphs.

The first one is what you are likely to see any time someone convinces you that the road to wealth is by buying their newsletter, investing in the stock market or whatever. In this case, it's to show how rich you'd have been if you had invested in real estate.


Wow, how can you argue with that, right? Well, turns out that little thing we rarely think about these days, inflation makes a big difference. Here are the same numbers in 2004 dollars.


Still good, but certainly doesn't look like the pathway to Mackena's gold! Well, then there is that little thing called risk. You only have to read the works of Benjamin Graham and William Bernstein to realize that the path to higher returns is often associated with higher risk (see, those newsletters promising to make you money never tell you how much you lost. The master investor Warren Buffer always said rule 1 of investing was - never lose money! Rule 2? Always pay attention to rule 1!!)

Looking at changes in new home prices over 5 years reveals something quite interesting - it bursts the myth that home prices can never go down. BTW, this is based on new home prices - you will have to include a discount for the house being 5-yrs old, and that discount actually increases when the market crashes.

Add in the fact that a house is highly leveraged and you could really lose your shirts. Planning on holding on to your home for a longer period does mitigate these risks somewhat. The figure below is the percentage change in value over 10 years.

My point is not to bash the act of buying a house. Heck, I sure hope I can do it someday. My mission is rather to educate, because I've encountered a shocking number of people who invest substantial sums of money without asking some rather basic questions about the risk or returns of their investment! I have heard people say that real estate is an investment, and yet not apply the same critical analysis to real estate markets as they would to the stock market.

Are Hybrids Really Cool?

I am a HUGE fan of the hybrid car concept, but I was a little disappointed to read this story. Turns out not all hybrids do very well in achieving gas mileage - heck, the Chevy Silverado and GMC Sierra get a measly 1-2 mpg over their gasoline version. Good ol' GMC needs to go - I can't say I'd shed any tears for the loss of an American icon - what good are icons of yore when they are such bad role models of today?

This story also left me curious about one thing - who on earth buys a hybrid that gets 21 mpg? I mean, if you love a mean road machine, I guess you live with your conscience, but how stupid do you have to pay a premium for a vehicle that gets 1-2 mpg. Consumers of hybrids don't mind paying a premium for a cleaner vehicle, but 1-2 mpg extra is what you'll get if you take a few things out of your trunk!

Median Price Falls

This story points to the fact that the first prick of the real estate bubble might have already occurred. I have reproduced a graph from one of the links in the story - one of median new home price. This is consistent with what I had been expecting - in fact, compare the chart here with the one on my posting on July 29. Sure looks like a correction is in progress. Folks, if you own a home, aggressively pay down your loan ahead of schedule. The gains of real estate are because of leverage, but leverage works both ways, so don't be caught owing a lot more than your house is worth! (This is especially true for people who work in jobs that may require them to relocate, or who are in the early years of their career where they would be better off being flexible about relocating)

Katrina's Fury

My thoughts and prayers are with those affected by Hurricane Katrina. It is truly amazing how even in the most developed country in the world, people's engineering prowess doesn't compare to nature's fury. Talking of which, does anyone else feel there are too many damn natural calamities off late. I mean, I'm starting to wonder where global warming fits into all of this!

Katrina also exposed what a screwed-up energy system we have. For all those who thought conservation was a dirty word, $5 gas and talk of rationing should help convince them what dire warnings of global warming couldn't. I was shocked to read that major airports might run out of jet fuel by next week!