Tuesday, May 31, 2005

Opinion/Position - The Mommy State

No one died on the roads of Southern Wisconsin over the holiday weekend. It was a reason to .... be glad. However, every news station ran a story last night that layed the "blame" right at the foot of a marketing campaign, "Click it or Ticket". The "new" enforcement of seat belt laws that have recently been moved from secondary to primary reasons for a traffic stop. If you missed it, just about everywhere, the cops can now stop you if they see you are not wearing a seat belt.

In "progressive Dane", my county, this morning while driving our daughter to school, I looked at the cars going in the other direction....less than half were wearing a seat belt, meaning every one of those dozens and dozens of cars could have been stopped and ticketed. Who to choose? How about a little stereotyping? We recently had a client, he had 7 traffic stops in the last 2 years, 5 were for seat belt violations. He was 20. Given that no other ticket was written, exactly why does anyone think he was stopped? For NOT wearing a seat belt?

Lawn yarts were banned, couple of people died. ATCs were banned (the real ones, the tricycle version), couple died, others seriously hurt. Where is the ban on guns, cars, knives....ladders?

Helmet laws for motorcyclists AND bicyclists. Seat belt laws. And it is not just these "mommy" laws....we have all these laws designed to protect us, from ourselves. It seems the law thinks we are all a bunch of imbeciles that can not make responsible decisions. Of course, the overabundance of legal cases where stupid people have received money for lawsuits because they were STUPID does give the argument some weight. I recommend a subscription to the Stella Awards (free).

Where is the reasonable man when you want him.

Position - laws designed to protect the stupid from the irresponsible should be eliminated.

If you haven't figured it out yet, I am a big fan of the Darwin Awards also.

Monday, May 30, 2005

Memorial Day

Many will speak eloquently today about those that sacrificed for our freedoms, please listen.

Opinion - Hello, Republicans? YOU IDIOTS

You will not know what hit you and that will make it twice as bad.

I believe that the GOP is going to lose the Senate in 06, if it does not, the count will be 52-48. Worse, they are likely to lose seats in the House also, I am less willing to specify a number there however.

While the Democrats are losing ground on the Judge issue, spending has gotten so out of control that many are wishing a return to Democratic control just to cut some of the pork. When Democrats give 50 projects with price tags of $1-5 million, we lament the stupidity of some of them, but when Republicans green light only 5 projects - with price tags of $50 million EACH....Come on....both sides of the aisle are giving away our tax dollars like it was candy...the Dems used shovels, but the Repugs are using SKIP LOADERS!

There is NO indication that the GOP is making even the slightist nod towards fiscal restraint.

And the bankruptcy law change and their unwillingness to reign in Freddie and Fannie, show that they are TRULY more pro-business than they are pro-responsibility.

Presidential Race, 2008: Check out Polipundit, I like the analysis

Both parties should just put it in their by-laws, Senators can not run for President.

Thursday, May 26, 2005

Opinion - Triple Net

We are in the hunt for new space for our office. The 5 year lease on our current space expires in July and for several reasons, we have decided to move to slightly less expensive space. Don't get me wrong, our rate $12 nnn is very competitive and all three location, location, location requirements have been wonderfully met. But, with the uncertainty of the near future, we did not want to get into another long term commitment knowing problems are coming - construction in the area will SERIOUSLY impact out clients ability to get to us for the next two years.

$12 nnn....or triple net, means we pay a fixed dollar amount for the square footage, but we also pay for our own utilities, a proportional share of the taxes and a proportional share of the maintenance costs. But there is another kind of triple net that is about to explode on the economy as a whole that people need to be prepared for...

N1 - housing prices. The concern that a bubble has formed in housing prices has gotten a little boost from none other than Alan Greenspan who suggested that there was a little "froth" in the marketplace, but more likely in specific areas rather than nationwide. Given the concerns with Fannie and Freddie, a stagnation or worse in housing prices nationwide would have a serious impact on the economy because of what it would do to consumer spending.

N2 - interest rates. No one expected interest rates to stay where they were, so the increase over the last 2 years has not had much overall effect on the economy. That could change with another % or more of increases. Many home loans over the last 3 years were purchased with adjustable rate mortgages and those rates are just starting to adjust. Many will lock in rates slightly higher than they have been paying by converting to fixed rates but many will be unable to because of the higher cost or other personal economic conditions The government's announcement that it was re-introducing the 30 year treasury has also helped to actually stabilize things. However, with energy prices climbing over the last year, inflation has popped up some. A further increase in interest rates above what was planned in order to deal with an increase in inflation would further add to pressures on rates. I think most everyone expected a fed rate in the 3-3.5% range and if that were to occur, few would be worried. But if it pushed over 4 heading to 5%....both long term and short term rates would rise....

N3 - Consumer costs/prices. Anyone will tell you that despite the low rise in CPI over the last couple of years, the cost of living has risen strongly. The rising cost of fuel has been given the most attention, but food, insurance, utility and educational expenses have all grown much faster than inflation. (see previous post on the CPI) . Credit card companies are increasing the payments required under their plans as we move into fall, and it is expected that as many as a million people will be facing reduced pension payouts by the end of the year.

Now, despite the doom and gloom here, and in the media, the economy is showing some serious strength. The issues raised here, rising fuel prices, rising interest rates, increases in the payment requirements on credit cards, rising housing costs are stresses on the system. That said, all that is missing is something to spook the consumer and we could set a triple net threat to our economy tightening like a noose.

Monday, May 23, 2005

Opinion - On a related note: Education funding

Tomorrow, our local government is asking two questions by referendum: to raise the cap on spending for education AND to raise property taxes for the school budget.

From Friday WisOpinion:

Between 1999 and 2004, the statewide number of K-12 students in Wisconsin fell by over 1,200. That didn’t stop us from hiring more teachers: over the same period, the number of teachers in Wisconsin public schools grew by 2,300. We hired nearly two new teachers for every student we lost. The Madison Metropolitan School District (where officials say they desperately need more money) added 46 teachers while losing 48 students. Their spending per student is over $12,500, yet they say they don’t have enough money.
I had a conversation with a father at our kids "Spring Strings Concert" last week. A program for 4th and 5th graders to get music teaching that is "threatened with cancellation" if the referendum does not pass. I was undecided until speaking with him, now I am firmly opposed. The School Board often uses popular programs as "examples" of programs that will have to be cut to push financing increases. Frankly, I am willing to call the bluff.

One more quote from WisOpinion:

We’ve had TABOR-like limits on schools for 12 years, and we are spending nearly $11,000 per child. I wonder how much we would be spending without revenue controls. K-12 taxes make up roughly half your property tax bill, and nearly all of your income taxes. Without controls, do you think we would be spending more?

Time to stop the "it's for the children" blackmail....

Position - Tax and Spend

As reported in the WSJ, tax revenues at the federal level are booming. Individual revenues are up 15% and corporate revenues are up 48%. After a series of tax reducing measures, federal revenues are rebounding sharply.

For over 15 years I have promoted (when someone would listen and NOT roll their eyes) a federal spending freeze. There have been several different variations on it: freeze spending for two years; freeze spending for two years with allowances for emergency appropriations; base spending on the previous fiscal year's revenues - my current preference.

The problem with any federal spending is the habit of Congress to off load expenditures onto states, forcing them to raise tax rates...the net result being increased taxes on consumers. I have supported the idea of a flat tax, and a mandated sales tax (the rate only changeable by popular vote - every 4 years). But any change has to be done at the state level also. My current property tax rate is 24 mil....in a state with +10% income tax, a one-two punch that effectively doubles my federal tax rate.

As WSJ pointed out, the problem is not how much the government raises, that has almost NEVER been the problem...it is how much the government spends and right now that is 2.5 times as much as 15 years ago.

Position - freeze federal and state funding at previous years revenue levels - allow borrowing for emergencies

Thursday, May 12, 2005

Speaking of witch...

It wasn't really...she was a he and he was a creditor but his opinion as a "banker" was:

"People should be made to get rid of their stuff and pay their debts. It is too easy to file bankruptcy, this was a long time coming. They don't need cable or cell phones, or boats, or guns or more than one car, or more than one TV."

He was dumbstruck when I told him we would be recommending to all clients with cars less than 2.5 years old to surrender them. Given his attitude, he should not be surprised when debtors start returning cars, boats, furniture...houses...

A conversation with another Trustee was also interesting. We told him that we would be filing two sets of personal property lists. One exempt and the other not. He didn't understand why we would. I said, as long as the requirement to value personal property at retail existed, too much of the wildcard exemption would be needed to protect household goods. Easier to pick a stack to surrender to the Trustee than to lose otherwise exemptable goods that debtors really want to keep. He said, "what do I want with a bunch of worthless goods?". We smiled and said, offer them to credit card companies as recompense.

Got it?!

Wednesday, May 11, 2005

Opinion - Without fear of retribution

Posted at Agnostics Unlimited first, but here, under law:

Does the idea that a lack of Divine Retribution makes it harder to have a civil society have merit?

Is it possible that as a lack of "religious faith" grows civil laws lose their ability to enforce behavior?

If you know that the odds of getting caught doing something wrong are pretty slim and if you 'know' there is no Divine accounting, are you more likely to act wrongly?

If you have no fear of God, no fear of the law....what is to stop you from doing whatever you damn well please?

Opinion: yes. When prison is a place where you can sleep, get fed, medical treatment and relax, in other words, a better place than not in prison, exactly what is the punishment?

Monday, May 09, 2005

Position - Inflation

The Wall Street Journal today had a piece on the construction of the CPI. I have always hated it and as someone with an economics background I can tell you that the artifice is like much of economics - something that generally works, but don't look too deep.

The vast majority of us do not buy a car, house, move and rent somewhere new, buy a refrigerator, a computer, furniture, stop in an emergency room EVERY MONTH. But those are part of the Index. A lot was made of hedonics and frankly, that is just another system by which people who are supposed to know why something works (but don't) use to explain their explanation to those that think they know that they know why things work the way they do.

Get it.

Here is the basic problem with economics. Take 5 families, each with two parents and three kids (two boys and a girl), working for the same company, living in the same neighborhood, earning exactly the same income, driving the same cars, having the same education. Now, follow one family for 6 months, account for every single penny they spend, how they spent it and use that information for two purposes: predict (with reasonable certainty) how they will spend their next 6 months of income AND, use the info to determine how the other 4 families spent their last 6 months of income. You know what you will find? You will be able to predict next month, and maybe most of the next month with the family you have specific information about, but the other 4 families....way off, not just with one, but with all 4. Now try it with 140 million....

Here is my inflation: our property taxes went up $55 per month this year, milk costs $2.89 a gallon (last year $2.29), eggs were .99, now 1.49, bread was 1.89, now 1.79, my favorite ham was 3.89 a pound, now 4.89 a pound, gas was 1.78 a gallon, now 2.18.

CPI should have 3 reported rates: established (for those whose life this year will be mostly like last year); initial (for those starting out) ; and transitional (for those with declining needs).

Opinion - Respect and Honor

Ok, over the weekend I watched a favorite movie - just the last 90 minutes - The Last Samurai. Acknowledging for the moment that an overly dramatic and sanitized version of Samurai honor is portrayed, I do have a problem with the COMPLETE LACK of either respect or honor in today's society.

I like having a door held open for me damn it. Is it so much to ask for some respect in conversations? I am a firm believer in the idea that respect is earned, but a lack of even basic respect when you first meet someone is DISRESPECTFUL. And I am not talking the 'dis'ing that people complain about....most of those people are looking for others to fear them, and anything less than abject debasement is considered dis'ing.

Our daughter is in karate. She has attained black belt status after years of working for it. Black belts are called Sir or ma'am. Even lower belt adults must use the honorific when addressing a child black belt. Respect, earned. We bow when we enter or leave the dojo, even us un-belted parents. Respect and honor.

I served my country. I volunteered at 19 back when it was very unpopular to do so. I felt I had a moral obligation to serve. My nephew is serving in Iraq, he joined last year because he felt an obligation to serve. Honor, respect.

For my entire adult life I have tried to consider the opposing viewpoint. I have considered even things said in anger might have a basis in truth, and I have tried to see what that truth was (no matter how small). I have not always been successful, but I have tried.

This weekend I was asked what I wished for from people (it was more specific but you will get the point) and I said, more thank you's. We are a less polite people than when I was growing up....and that is a lack of respect too...for ourselves.

Wednesday, May 04, 2005

Position - Marriage

Can marriage be between two consenting, non-biologically related adults?


Does the governmnet have a place determining which adults can or can not enter into contracts?


Why does government think that limiting the actions of consenting adults to enter contracts is acceptable?

Because EVERYONE knows marriage is between a man and a woman...right....?

The government should not use marriage as the basis for determining who will receive government benefits and who should not. A civil license can and should be a license for two people to form a contractual union in the eyes of the state. If a couple wishes to get married, they can find a church and have their union blessed by a religion.

Tuesday, May 03, 2005

Opinion - May Rant #3

Inflation is too low. With real interest rates this low, no one is making interest income. Inflation has to go up so interest rates will increase so interest income grows. Those that rely on interest income have had it bad (unless you are a credit card company and then, your rates have nothing to do with inflation so who cares). What would be the impact of higher rates? Recognizing for a moment that step-wise increases the Fed has imposed....

From : Freddie Mac http://www.freddiemac.com/news/archives/afford_housing/2005/20050429_dc.html

  • Specifically, in 1997 2.4 million working families spent more than half their income on housing, but by 2003 this number had grown dramatically to 4.2 million. This comprehensive study also compares immigrant working families to their native-born counterparts and reveals that immigrant working families are 75 percent more likely to pay more than half their income for housing. Working families are defined as low- to moderate-income families that work the equivalent of a full-time job and earn from the minimum wage of $10,700 and up to 120 percent of the median income in their area.


  • Through November, ARMs accounted for 34 percent of the conventional purchase-money market in 2004. This marks the highest annual share since 1994 when the ARM share was 39 percent. The highest annual ARM share occurred in 1984 at 62 percent, the same year Freddie Mac began its Annual ARM Survey.
  • Over the last several years, annually adjusting ARMs with an initial "fixed-rate" period of more than one year, known as "hybrid" ARMs, have grown in popularity. According to the FHFB data, hybrid ARMs accounted for the majority of purchase-money ARMs by 2002. Within that product type, ARMs with an initial fixed-rate period of five years, known as "5/1" ARMs, have been the dominant choice of consumers. "In 2004, two-of-five ARMs, and three-of-five hybrids, were 5/1 ARMs," commented Nothaft.
  • "Hybrid ARMs provide the consumer the comfort of knowing that the interest rate will be fixed over the first five years of the loan. However, the interest rate may jump as much as five percentage points on the fifth anniversary. Thus, the product has been popular with families who plan to have the mortgage for five years or less," Nothaft observed.
A client recently complained that her mortgage company raised her payment, she wanted to know if they could do that. Well, yes. Turns out she had an ARM and after 3 years, her rate could go up...from 5.75 to 8.99%...a 37% increase....already in a chapter 13 bankruptcy, she will be moving this summer after the foreclosure is completed.

Over 20,000 people in Wisconsin were foreclosed on in 2004. It is not slowing down. And as those ARMs purchased in 2001, 2002 and 2003 come due for their adjustment rate, the percentage of people already over 50% of their income on housing is going to jump and so will foreclosures....

Oh, yea, but the way....did you know that credit card companies will have to raise their minimums later this year? Effectively doubling them....care to consider what the impact of that will be on minimum paying consumers?

The new bankruptcy law takes effect on October 17th.....to use a marketing phrase..."what's in your wallet"

Opinion - May Rant #2

Americans are idiots. Sorry, how else to explain politicians.

Ok, that is too harsh. Politicians THINK Americans are idiots. First....it seems everyone is up in arms about the Senate filibuster. The Repugs want to end it (supposedly) and the Demo-crats whine about tradition. First...when was the last time anyone of either party actually DID a filibuster? The last couple of years it has only been a threat....

Second: 10 years ago when the Stock Market was screaming, Demo-crats wanted private accounts for Social Security....now they are strongly opposed?

Third: Repugs think Hillary Clinton is the candidate for the Demo-crats in 2008. Don't know why they are worrying, they don't have anyone that could beat Paul Wellstone in a race in 2008.

Opinion - May Rant #1

Word has it that Bankruptcy Judges have lists of attorneys that perform bankruptcy pro bono. Not sure what planet the spokeswoman from Senator Grassley's office is on, but it is not in the 7th Circuit. Exactly how many clients does she think attorneys can take pro bono? ALL OF THEM?

Yesterday we were at 341 hearings. A pro se (without attorney) bankruptcy filer was in front of the Chapter 7 Trustee. Almost every schedule and form necessary for the filing of the bankruptcy was either completely blank or incorrect. The Trustee adjourned the meeting and told the debtor to find an attorney. His response: "I was told that filing bankruptcy was easy". I laughed out loud, the Trustee smiled at me and said, "if you know what you are doing". The man had ONE creditor and $10,500 in unsecured debt to it.

We were covering for another attorney and the client said, "I got this in the mail last week but don't know if it is important." It was a statement, an account with $35k in it....something she conveniently forgot to inform her attorney about. Under the new law, that attorney would be in very big trouble right now...as it is, the debtor is in deep do-do.

Finally, in the same MSNBC report quoting the Grassley spokeswoman, an attorney insurer suggested that liability rates would not be adjusted until after 7 years of experience under the new law...we are unsure what he is smoking but we can be sure that if he was speaking the truth, I'd sell his stock now....