Tuesday, December 19, 2006

Self reliance

Over the weekend I watched the Lord of the Rings: Return of the King. I read the books decades ago, own the DVDs and still love watching it. It was an amazing work putting it on the screen.

There was a scene when the men of Rohan were riding off that pulled together a thought that had been dwelling in the depths of Moria. Realizing that this story is fiction and not a docu-drama(!) I still couldn't help but think the following:

There was a time when men were self-reliant. Their allegiance to their Lord was not a "job". Their sustenance was the work of their own hands...and the hands of their wives and family. Today, men rely on a paycheck for their sustenance but it is not the same. Their allegiance is/was never offered, never received, never honored.

This is not to disrespect the women of that time. Many were as strong of character as their menfolk. Have we lost something as we have advanced? I can't help but think so. I am comforted by only one hope: that when faced with a situation like Katrina or the tsunami, a noticable percentage of the population will resume their place at the front of the lines. Maybe, that is what is behind the huge numbers of men and women enlisting in the military and serving.

I hope so, because it seems today there are many Grima Wormtongues actively trying to influence us...

Sunday, December 10, 2006

The false doctrine of too many choices

Cross posted to Agnostics...

This morning's sermon at church reflected, in part, upon the problem of too many choices. Although not directly related to the subject matter, the Pastor commented on how we in America have such a bounty of, well, everything, that we lack the emptiness necessary for a longing for God.

Ignoring the religious issues she was trying to pinpoint, she noted that Tofler in his Future Shock predicted that our society would reach a point where people would recoil from the excess of choices. Over the years, his point of view has been regurgitated over and over again to promote either an economic or political position usually supporting some kind of restriction on freedom.

What was interesting to me was the echo I heard of Joe Biden this morning on TW. His concern was that people in the Middle East didn't have the same kind of definition about freedom that we did, and we might not like the kind of freedom they want. He feared that President Bush, naively, thought they did.

I want to be clear, if my subject title failed to be, that the very concept of too many choices is false. Let me start with an example:
It is 10:30pm tonight. You can go to bed and get some sleep; stay up and watch TV, stay up and read; stay up and have some intimate time with a spouse/partner; stay up and play a game; stay up and blog; stay up and eat; go out and party; what you say? too many choices?

Nonsense, the choice is to go to bed or stay awake. If you choose to go to bed, sleep is soon to follow. If you choose not to, then you have other choices.

A second example (one used on me many years ago by someone that wanted to impose limits on the number of cereals available (I kid you not...)
Walking down the cereal aisle there are literally a hundred different choices. No one can reasonably make an informed choice on each one. Therefore, we need to limit the number of cereals to one or two in each category.
I have three criteria for a morning cereal: it has to have sugar already on it (I hate having to add my own); it has to have at least 5 servings (and since I average 10oz each morning, that means more than 50oz) and it has to cost around 10 cents an oz. There are three that meet those criteria, Frosted Flakes, Frosted Cheerios and Kellogg's Raisin Bran. It takes me about 10 minutes a year to verify that nothing has changed in the aisle and those three remain viable choices. On sale, Frosted Mini Wheats and Lucky Charms add some variety.

The first thing I listen to when someone tells me there are too many choices, is what choices I have available to me, they want to limit. This morning, my Pastor wanted us to consider spending a little more money on church campaign items rather than presents to friends and family. We have so many competitors for our dollars, shouldn't we limit the ones that make us feel good, and help those more unfortunate than ourselves? (Didn't like the construction of that sentence? Preferred, "less fortunate". Tough, my choice!)

The problem most people have that complain there are too many choices is they don't like the choices other people are making. Rather than complain about their choices (and in doing so question their freedom to make their own choices), they complain there were too many choices to begin with. If we limit the choices to a few, then more people would choose their choice.

What makes people feel overwhelmed by choices? Lack of purpose. I walk into the cereal aisle with a clear idea of what I am looking for. The vast number of choices fail my criteria on more than one issue. Knowing what I am looking for helps me to make my choices easily.

The money I earn has a specific purpose. Demands on me to spend it a particular way fail to sway me at all because I already know where it is going. Bush chose to deal with Iraq, many on the left offered up "other choices" so as to distract from his purpose. When that failed, the next argument was "too many choices" expressed as "We can't be the world's policeman."

Externally, there can never be too many choices. With 6 billion people on the earth, every option will have some that prefer it. The more choices, the more freedom people have. It is only the lack of will, the lack of purpose that create in people a frustration with the choices available to them. And for others, the cornucopia of choices means less people will join them in their choice, and that freedom isn't the same freedom they wish others to have.

Monday, December 04, 2006

Two Points

What to do when you have a small following and two posts....?

Item 1. John Bolton has resigned (before being fired...hey, that is what it is when you are not renewed...fired). Bush should NOT name a replacement. The argument can be the best person for the job already had it....second best is not appropriate for the first among equals.

Item 2. A civil society. I am tired of the vulgarity that passes for dialogue. On Thursday I was picking up Victoria from a function and a regular participant had an IMPEACH BUSH pin. I tapped it and suggested he needed to do something illegal first. She then pointed to the IMPEACH CHENEY FIRST pin next to it and exclaimed "I was kinda hoping someone would, you know, shoot him on this trip." My response was "That is very rude, and very unChristian of you to desire the murder of someone just because you dislike them."

The reality is that she wasn't kinda hoping...she was PRAYING for it. I listen (not by choice) to comics and their routines are packed with vulgar, profane tirades. People walking down the street, standing in line at the store, lace their conversation with profanity and vulgarity as if it were a sprinkling of powered sugar on feces. (Yes, I was thinking sh**, but am trying to make a point.)

It has become unacceptable to be polite. It has become acceptable to be vulgar in virtually any company or setting. And it should stop.

I am not asking for a "Victorian" purge. Can each of us, as individuals, strive to call out vulgarity when it occurs, state profanity is unacceptable in our conversations with others? Can we not be polite to others? I like, and thank when it happens, a door held open for me. No one has held a chair for me in decades so I don't hold out much hope there!

Last week a Judge told opposing counsel that his actions had disrespected the Court and debtor's counsel (Victoria) and put him on warning that it would not be tolerated. He then imposed fees against him, something he seldom does.

Respect for ourselves, each other and strangers we meet is the first step in a civil society. We must begin to strive for it, or the culture rot we all see clearly will destroy all that we have accomplished.

Monday, November 13, 2006

Green space

I snippet of conversation overheard:

"we are fast running out of greenspace...we need more aggressive action against the developers..."

If Texas had the population density of Manhattan NY, we could fit 17 billion people into Texas. In other words, one state in the United States could hold the entire population of the planet and their children, and probably their children's children.

How much greenspace do we need?


Wednesday, November 01, 2006

Slander? Mistake?

John Kerry has stated:

"If anyone thinks that a veteran, someone like me, who's been fighting my entire career to provide for veterans, to fight for their benefits, to help honor what their service is, if anybody thinks that a veteran would somehow criticize more than 140,000 troops serving in Iraq and not the president and his people who put them there, they're crazy," he said.

Well, I served in the military and I am not stupid Senator. My brother served in the military and he is not stupid. My nephew has served in Iraq and he is not stupid. But apparently the only one that is crazy is you Senator:

"I would like to talk, representing all those veterans, and say that several months ago in Detroit, we had an investigation at which over 150 honorably discharged and many very highly decorated veterans testified to war crimes committed in Southeast Asia, not isolated incidents but crimes committed on a day-to-day basis with the full awareness of officers at all levels of command....

They told the stories at times they had personally raped, cut off ears, cut off heads, taped wires from portable telephones to human genitals and turned up the power, cut off limbs, blown up bodies, randomly shot at civilians, razed villages in fashion reminiscent of Genghis Khan, shot cattle and dogs for fun, poisoned food stocks, and generally ravaged the countryside of South Vietnam in addition to the normal ravage of war, and the normal and very particular ravaging which is done by the applied bombing power of this country.

Our experience is that you will, hand have disparaged the troops fighting in the field.

Apologize for a botched joke. You and your supporters have demanded President Bush admit to a mistake in Iraq and apologize when you can't even do so for a botched joke?

Tuesday, October 31, 2006

Last call...

We are a week from election day. It is Halloween. At least the scary people I see today will make me smile.

I have addressed this issue twice and I do it here for a final time. I will not vote for any incumbents. And I am asking you to do the same. For most of us here in my home state that means voting for Republicans.

My rep, Tammy Baldwin(D) has been an OK rep. She hasn't done much, hasn't stirred any pots, caused any scandals and apparently been a good person serving in Congress. Her opponent is agoofus . I can't imagine him actually doing any good in Congress. After 6 years, of doing nothing much, it is time to give someone else a chance. Bye Tammy.

One of my senators, Herb Kohl(D) is also one of those non-descript Congress people. Year after year of nothing bad, nothing good...just putting in their time servants. Kohl is rich, doesn't need a lot of money for his campaign. His opponent is so unremarkable, I can't even remember who it is. (The Green candidate I saw on TV for 5 minutes and he should NEVER been allowed to be in public again.) Bye Herb.

Our governor is Jim Doyle(D) and he has been caught dirty. Too bad his challenger, Mark Green (R) has been caught equally dirty. For the first time ever I got called to respond to a poll (on stem cell issues). Basically, I said I was for it, and Green's position was unlikely to change my position. Bye Jim.

There are a couple of other local races but of no national consequence. And that is my problem. The Republican leadership (WH and Congress) have so thoroughly screwed their base that their only mantra right now is "you have to vote for us, or else it isPelosi". How pathetic is that?

IF I had the opportunity to vote on a National basis next week, I would give the Democrats both House and Senate. Virtually every issue the Democrats can cause trouble about, doesn't affect me directly. What happens in Iraq will damage us for decades, will probably cause more attacks on US soil - BUT not here in Wisconsin. Gay marriage, I oppose it (despite being in a lesbian relationship) because I don't believe the State has any business sanctioning a religious union. Democrats have already voted forDOMA so where is the issue there? Supreme Court: I'd rather have a deadlock court (going 5/4 on every decision) than an ideologically pure left or right court.

The only issue nationally for me is tax cuts. With the economy in it's current condition (sick but not showing any major symptoms), Democrats will face opposition to any effort to let the tax cuts end.

Sorry guys, but when someone misbehaves, they must be punished. Anything else sends a message of acceptance, even at some minor level.

The national Republicans have abandoned their base, their principles. Democrats are likely to find having power is not nearly as enjoyable as wanting power. Right now we have a Charlie Brown populace and a Charlie Brown political leadership. I am tired of watching for the Great Pumpkin.

This country NEEDS to get off the f**king fence.

Monday, October 30, 2006

Once more, with enthusiasm!

After extensive comments regarding BARF (to those familiar with the Bankruptcy Reform Act of 2005), a year of dealing with the consequences and reading written judicial opinions thereof, I have had the displeasure of reading analyses by those given a platform by which they can spew their lack of knowledge.

Unfortunately, another such analysis has seen the light of a fog-covered, dreary October morning.

What's our review of BR law on its 1st B-Day

Martin Segal has started his review with this clear point:

Like any new law of such importance, it was controversial and the reviews are mixed. Credit card companies and other business supporters say it has been a success because it reduced allowable debt cancellation under Chapter 7 liquidation bankruptcy and increased the number of debtors who had to repay creditors under a Chapter 13 payment plan.

Ignorance is bliss. Few laws are written and passed in this country that so
completely ignore all the professional opinions of those likely to have to deal with such laws. Professors that teach law, especially bankruptcy law, opposed this abomination by a huge margin. Trustees that would have to implement the law, opposed it almost unanimously. Bankruptcy judges opposed it. NONE of these groups would benefit from the passage of the law, or by it's demise. Strictly on the merits and
the likely consequences was it opposed and that opposition was IGNORED by the Congress and the press.

And given the opinions being written by judges that have to deal with this "law", there have been no mixed reviews, at all.

Of course, one of the preferred outcomes of the enactment was the drastic reduction in bankruptcy filings. And to say it was a success in this regard ignores all the signs and statistics. Filings have already returned to levels seen just 7 or 8 years ago.

Take the number of filings that occurred last year and subtract the average of the
previous two years and you will find almost 700,000 filings that could be attributed to the new law. Those 700,000 filings, assuming they were spread out over a 2006 without the law would have resulted in approximately 1.2m filings. A figure not far below the 1.35 million estimated for 2006 had the 2003-2004 trend continued.

Another "consequence" hoped for, predicted and claimed by the pro-BARF lobby was the reduction in cost to the average American consumer. It was estimated that bankruptcy was adding $400 to every Americans interest burden. Well. With the implementation of the law and the 'vast' reduction in filings....has ANYONE seen a reduction in interest rates by credit lenders???

Opponents argue the law fails consumers for these same reasons. A true evaluation probably lies somewhere in between.

No. And a true evaluation you are not going to get from Mr. Segal.

Formerly, a judge would determine if a case qualified for Chapter 7 based on a petition filed by the debtor asserting insolvency. Now debtors must
qualify their income under a complicated ''means'' income test based on their state's median income level. If they don't qualify, Chapter 13 repayment is required.

Spoken like a true academic. Having never sat through bankruptcy hearings (I'll bet - but hey, I could be wrong, I don't actually KNOW Mr.Segal....wonder if he is friends with Todd Zwyicki?) Mr. Segal doesn't even know how filings are handled. Judges seldom get involved in the vast majority of cases. The trustee assigned the case makes any initial determination that there is an issue regarding the
appropriateness of a filing. And the 'complicated means test' only comes into play when the debtor household earns over the state median income. But we have found that 97% of filers do NOT earn over the state median.

Of course proponents of the law felt judicial discretion was inappropriate and therefore mandated a means test to eliminate any pesky application of ...you know...fairness.

Chapter 13 filers must repay amounts for five years based on stricter IRS living standards. Before a judge set three-year repayment schedules based on what a debtor could reasonably afford to pay.

Mr. Segal compounds his obvious ignorance with a flat out distortion. If 97% of filers do not meet the state median income and chapter 13 filings are about 40% of the filings, then 97% of the chapter 13's are by people that CAN file a chapter 7, are below the state median and DO NOT have to repay for 5 years or use the 'stricter' IRS guidelines. And the ignorance of the "Before a judge set..." is just astounding. Plans were proposed by the debtors and if no one objected, confirmed. In our district and in many others, 80-85% of all cases were routinely confirmed. Those proposed by experienced bankruptcy attorneys were often confirmed at a 95% or
better rate.

Attorneys for debtors can be personally fined for inaccurate filing information in schedules of assets and liabilities.

This is just so false it borders on malpractice...oh wait...Mr. Segal is a legal academic...he doesn't actually PRACTICE law. There are no fines for attorneys. There are however new liability issues for attorneys. If a trustee or creditor makes a motion in the bankruptcy case and it is determined that a debtor provided false information and a court determines a reasonable inquiry by the debtor's attorney should have found the false information, THEN the debtor's attorney is liable for the trustee or creditors expenses including court costs, without limit.

What Mr. Segal and the supporters of this little provision envisioned was debtor attorneys, so used to flagrant abuses of the law and living large, would flee in abject terror of the prospect of such unlimited liability. If a criminal retains an attorney and tells the attorney he is innocent and it is determined that the criminal was in fact guilty - he was caught on tape committing the crime - might some legislator decide that the attorney should be held accountable for the court costs and the legal costs of the state for the trial? Wouldn't a reasonable attorney, upon investigating the information provided by their client, determine his true guilt and force the criminal to a plea....to avoid the litigation?

Don't bother them with details.

Formerly,Chapter 7 homestead exempt property was determined by state law. Florida allowed a ''millionaire's exemption'' of unlimited value even if the property was bought shortly before a bankruptcy filing. Now debtors can only exempt a maximum $125,000 of homestead value if the property was bought within 40 months before filing.

I am not going to spend a lot of time on this. It affects only a couple of states but what is interesting is that it affects retired people more than any other group. How? You see, most retired people sell their paid for homes in the states they lived and worked in for years and then moved to states like...Florida. For whatever reason....say their former employer goes bankrupt and voids the retirement plan....the retirees face bankruptcy. That newly purchased Florida real estate is
no longer protected in bankruptcy...but you didn't hear that possibility in Senate debate...

Before secured auto loan debts were repaid based on the full unpaid loan balance. Now repayments are reduced to actual vehicle value.

If previous points were misleading or distorted, this is a flat out lie. Prior to BARF fair market value was the maximum for auto loan repayment. There was considerable legal wrangling about what was fair market value, but under the new law, if the auto was purchased in the previous 910 days, the full loan must be repaid (or vehicle redeemed/surrendered). If purchased more than 910 days prior to filing, replacement value applies.

So much for the legal analysis....let's get to his analysis of the consequences:

As predicted, the number of Chapter 7 filings has greatly decreased
because of stricter requirements and Chapter 13 filings have correspondingly increased.

There is NO research to indicate that the 'stricter requirements' have caused a
decrease. As indicated above, it is likely that the rush to file prior to the law's enactment had a direct impact on the decline. As 97% of those that have taken credit counseling (and some 40% have not yet filed) qualified for chapter 7, it would seem some other factor(s) have had an impact on the number of filings. Could it have been the 43% increase in the court costs? Could it have been the $100 cost to do credit counseling and credit management mandated by the law? Could it have been the 50 to 100% increase in attorney fees caused by the increased liability, extensive new requirements for documentation and verification? Could it have been the press (and attorneys) that relentlessly pounded home the idea that "you better file now before the law changes" that left a lasting impression of the 'impossibility' for filing now? Nah....

Also, we must note this "...Chapter 13 filings have correspondingly increased." As a percentage of filings, chapter 13s are up. In actual numbers, way below the previous 2003-2004 average. But if 97% of filers qualify for chapter 7, why are 40% of them filing chapter 13? There must be a reason...

Primarily, people file chapter 13 to save an asset such as their home from foreclosure. And lo and behold, nationwide, foreclosures are up 50% this year. Maybe, just maybe, the increase in foreclosures are driving more people to file chapter 13...could be...ya know... (ps, foreclosures are likely to exceed 1 million for the first time ever this year...)

Chapter 7 applicants are permitted to tithe up to 15 percent of their income to charity as an expense. Some suggest this opens a loophole that allows
people who are otherwise over the means income limit to lower their net income under the allowed ceiling and preserve their filing. Many people have done this to stay in Chapter 7.

IF a debtor is below the median, there is no means test and the amount they tithe is basically irrelevant. If they are above the median though, they can't tithe in a chapter 13...per a recent ruling in NY. This so put Senator Hatch, the leading cheerleader of bankruptcy reform, in such a bad place (being from Utah, many, most of his constituents tithe) that he has introduced AN AMENDMENT to the reform. Something he opposed stridently during debate.

Mr. Segal's claim that "Many people have done this.." lacks ANY support. There have been NO studies done yet on such a claim.

Applicants who couldn't technically qualify for Chapter 7 debt liquidation have had some success claiming ''special circumstances'' beyond their
control forced the filing. Hurricane Katrina victims were given this privilege.

I am uncertain where this comes from. I am unaware of any "special circumstances" that prevent above the median income filers from being forced into chapter 13. There have been some allowances made for Katrina victims but I believe they applied to deadlines and documentation requirements. And to suggest ANY privilege was obtained just because a hurricane DESTROYED YOUR HOME AND EMPLOYER...well, there ya go!

New credit counseling requirements, originally thought to be oppressive, have worked fairly well. There are approved agencies that charge reasonable fees of $50 to $100 for the requiredprefiling and post-filing services, and judges can waive payment for lowincome debtors.

Yea, so well. Judges can waive court filing fees for low income debtors (generally only those that are not represented by an attorney - filing pro se - not a good choice given the complexities built into the new law). The agencies can waive their own fees, judges have no say in them....stupid.

The old law allowed a discretionary ''hardship discharge'' to Chapter 13 debtors before their completion of their five-year payment term. They had to prove that income problems were caused by unforeseen difficulties such as job downsizing, illness and accident, and that creditors had already received as much as they would have been paid under Chapter 7. Now many debtors are testing the time limits of early discharge by broadening their claims of payment difficulty.

The law is one year old....how much testing of the time limits do you think could be going on? The average plan pays secured and priority debts in the first years and unsecured debts in later years....plans started this year haven't had a chance to even begin paying ANYTHING towards unsecured debts. And where is the support for his "...many debtors are testing..." claim? WHERE?

Some experts have pointed out an inherent flaw in the current law. Debtors who can't qualify for Chapter 7 because their income is too high may also be
barred from Chapter 13 relief due to its eligibility ceilings of $307,675 for unsecured debts and $922,975 for secured debts. Critics suggest the new law should have either greatly increased or totally eliminated these Chapter 13 limits.

This is just stupid too. We call these clients chapter 11 clients. You know...like Donald Trump...serial filer....practically untouched under the new law. Do you want to waste some time to calculate the approximate percentage of the population with sufficient income to fund a 900,000 mortgage and 300,000 in credit cards? Less than 1 percent? And how many of them have filed this year, 1, 2?

Mr. Segal. No where on your website do you claim any particular knowledge with regard to bankruptcy so maybe you should avoid answering questions outside your legal specialty.

Disclaimer: I am not an attorney and nothing posted here should be considered legal advice. Seek knowledgeable legal counsel if you are considering bankruptcy and take no referrals from Mr. Segal!

Wednesday, October 25, 2006

Bankruptcy Reform - One year later...

There have been many stories in the press about the anniversary of the bankruptcy reform act and it's impact. In general, the reports are holding to party line. I say that because one of the goals of the reform was to reduce bankruptcy filings and filings are down significantly. Although some are calling the current level "historically low", you need only to go back 7 or 8 years to reach monthly filing levels comparable to the previous quarter.

Let me take some of the talking points and address them specifically.

Significantly lower filing rates. The first goal of the legislation was to reduce the number of bankruptcy filings. I want to offer an analogy: a medical clinic is seeing 1000 patients a month with minor to major wounds. The clinic supporters, faced with increasing costs to serve patients, decide to charge everyone coming in according to their income. Activists complain that will cause some patients to not come to the clinic but supporters claim those that can afford to pay, will pay
their fair share and those that do not will continue to get free or close to free care. After instituting the plan, admissions drop to 600 a month.

Now the question is, did the number of people that got injured drop? Did fewer people get hurt because of the possibility they would have to pay for medical care?

The number of bankruptcy filings in 2004 was lower than 2003. Absent the reform act, it is likely that the trend would have continued. As many supporters of the reform pointed out, the economy was getting better. Assuming a similar drop from 2004 to 2005 as 2003 to 2004, about 1.4 million people would have filed. As about 2.1 million did, we can say that 700,000 people filed either: because get while thegettin was good; or they were going to file anyway and getting in under the old law was a rational choice. Adding 90% of the rush filers to the probable filers in 2006, would have given us about 1 million filers this year, roughly a 30% drop. How
much of that drop could be attributed to different factors will be left up to researchers in the future but let us look at the possibilities:

Fewer people filed bankruptcy in 2006 because:

The law made it more difficult for above median income debtors to file chapter 7

This is the reason most commonly cited by the pro reform groups/supporters. However, it generally fails to acknowledge one fact ignored IN THIS CONTEXT, the number of chapter 13 filers grew by as much as 50%. Why? These are people that are BELOW the median. They, theoretically, can file chapter 7 but CHOOSE to file chapter 13.

The cost to file bankruptcy (regardless of chapter) has increased, pricing many of the most needy out of the ability to file.

This was the reason most opponents gave for opposing the reform act. Attorney fees increased across the board and across the nation. In many areas, attorney fees had been capped by courts and kept at artificially low levels for years. In our area, fees had remained steady for more than 10 years. The increase in documentation requirements and the requirement that attorneys VERIFY AND ATTEST to the accuracy of information provided by the debtor, resulted in courts allowing higher fees. The court costs to file a chapter 7 rose by 43%. The requirement that all debtors take and pay for credit counseling added another $50 to the costs (effectively increasing the filing costs by 67%). For some people, especially the least able to afford it, the court cost increase was/is prohibitive. [Before some moron claims that the very poor can get the fees waived, they should be aware that - in general - a person represented by an attorney that gets ANY fee, is generally NOT able to get the court
costs waived. The court believes if you can afford an attorney, you can afford the court costs, even if the attorney is working for a substantially reduced fee. Given the requirement that attorneys verify and attest to the accuracy of debtor information, such a situation will become very rare, the liability issues alone cause attorneys nightmares.] Finally, many attorneys allowed clients to pay part of
their fee upfront, and the balance after filing. This gave clients relief and although most courts (when presented the issue) denied attorneys the balance of their fees post filing, bankruptcy attorneys took the risk. Under the new law, that risk is unacceptable and very few attorneys (none we know of) provide payment plans, instead requiring the full fee to be paid in advance of filing. The significant increase in attorney fees, the significant increase in court fees and the addition of secondary fees has made filing more expensive for those people most in need of bankruptcy - DESPITE claims by reform supporters that it would not hurt below median filers at all.

The means test will either weed out those that do not really need to file or force them to file chapter 13.

Reports from credit counseling services indicate that 97% of the people taking credit counseling have insufficient income to pay their bills. But only about 60% of those that have taken the counseling have actually filed. Any argument that suggests that those that have not filed after taking credit counseling were potential abusers under the old system and too scared to face the new system ignores the 97% claim. More likely, the people that don't file CAN'T AFFORD TO. Again, if 97% of the people
that take credit counseling can't afford to pay their bills and chapter 13 rates INCREASE, then people are filing chapter 13 despite the fact they will probably fail. In the past, 40% of chapter 13 filers fail to complete their plan. The reasons are many, but chapter 13 budgets are usually very tight (even under the old law) and leave little room for unexpected expenses. Failure rates will take years to determine under the new law, but if the 97% number is accurate, expect failure rates to climb.

So, why would someone with little hope to pay their bills, and below the median income, file chapter 13? And to do so increasingly under the new law?

Chapter 13 is most commonly used for people that wish to retain an asset, such as a home. People facing foreclosure can file chapter 13 and reorganize their debts allowing them to keep their home. When foreclosure rates increase, so do the number of chapter 13 bankruptcy filers. And what has happened to foreclosure rates recently? Up 50% nationwide so far this year. For the first time ever, foreclosures will number over 1 million....historical. The number of chapter 13 filers is increasing because the number of people facing foreclosure is increasing (IMO). Despite the changes in the law, the number of chapter 13 filings is down considerably LESS than chapter 7 filings.

Some words on the law itself (rather than it's consequences). When debated, Todd Zywicki, a primary drafter of the law, sat in front of a Senate committee and claimed the law was just fine, no amendments were needed. After 8 years of trying to get through Congress, the draft bill addressed all the "real" concerns of those opposing it. In action however, the law has left many judges andtrustees frustrated. In a rare display of displeasure, judges around the country are noting their frustration in written opinions. On judge cited Mr.Zywicki's testimony disparagingly. Mr. Zywicki cried foul, but the overwhelming response to his complaint that he had been taken out of context was one of dismissal. Attorneys almost unanimously felt the Judge had not erred. Recently, Senator Hatch offered an amendment to the reform law...apparently, the 'perfect' law had a consequence that hit too close to home for the Senator from Utah (the state with the highest percentage of bankruptcy filers and one of the largest percentage of charitable givers) when a judge ruled that chapter 13 filers could not continue charitable contributions.

Lastly, bankruptcy fraud. One of the chief complaints of pro reform advocates was the claim that 10% of bankruptcy cases included fraud. This percentage was thrown about very often in the debate but NO support for it was ever given. First, let me give you an example of "fraud", hiding assets: A client appeared at a bankruptcy hearing wearing a stud earring. The trustee noted that there was no jewelry listed in the personal property schedule and required the petition be amended to include the stud earring. Value, $5. This was fraud, caught by a trustee, under the old law. REAL bankruptcy fraud is so rare, that when cases were brought, the FBI issued press releases! This year, the Justice Department and the FBI investigated cases in 36 bankruptcy districts and of the 250,000 cases filed, they found 18 with fraud. 18.

How much fraud has occurred?

From 1988-1995: 1474 cases referred, 355 convictions (~7.5 million cases filed)
From 1995-2001: 6090 cases referred, 482 convictions (~7 million cases filed)

14.5 million cases, 7600 cases referred .05% fraud rate. Where oh where did 10% come from? By the way, only 837 convictions came out of those 7600 cases, or .0058%

The most recent report on the 18 cases out of 250,000 filed indicates .072% fraud rate...gee...under the new law, the fraud rate, WENT UP! We'll see what the actual conviction rate is much later.

By every measure, the number of bankruptcy filings is increasing post reform enactment. It may take time to reach previous levels, but there is no doubt it will happen. Reform promised several things: fewer filings - CHECK; more chapter 13's - CHECK; less fraud -OOPPS; continued availability for those most in need - OOPPS; lower credit interest rates for everyone (oh, you didn't hear that claim...sure, it was right there when they said that loose bankruptcy rules were costing everyone $400 a year in extra interest paid, suggesting that everyone would be paying $400 less per year when the law was changed - your interest rates on credit cards and other loans have gone down this year...haven't they?) -OOPPS.

Remember this next time some paper or news station reports that bankruptcy reform has worked, the only ones bankruptcy reform has helped, were the credit card companies that did not report a SINGLE quarter of losses due to the 2.1 million bankruptcy petitions filed last year.

Tuesday, October 24, 2006

Is there any reason to rehash this?

Those opposed to voting to return the GOP to Congress provide a long
list of failures by the GOP. A failure of leadership both in the
Congress and by the White House.

It is clear that a Democrat
controlled Congress certainly will not address GOP/Conservative
concerns so voting for them as punishment will only make matters worse.

that Democrats will make things worse is not a good reason to vote for
Republicans. Ground your teenager to his room and he will be unable to
do hislawnmowing chores. Your punishment to others, hurts you. Classic cutting off your nose to spite your face.

Or is it?

bad behaviour is never an appropriate response. But if the punishment
is likely to cause more problems than continued bad behavior - how do
you stop the bad behavior?

I don't have a good answer to that, but I am sure that grounding the Republicans, isn't it.

Friday, October 20, 2006

Numbness...or short attention span?

A suggestion has been made that Americans are numb to the death and destruction impaled on our psyche daily by the press. Ya think?

In the United States in 2005 there were:
16,927 murders
417,122 robberies
93,934 forcible rapes

Meaning, everyday in the United states there are 46 murders, 1,142 robberies and 257 rapes. Put that next to the droning of how many people were slaughtered in the name of Allah in Baghdad today.

Now, in this country, no matter how "numb" we are to the daily carnage we hope that the criminals are punished and we are saddened for the victims. Ok, not really unless it is close to home, but you can be pretty certain, NO ONE IS CHEERING!

No preacher is standing in front of his flock and telling them to go forth, murdering and raping! (Unless that preacher happens to be MUSLIM...then I am not so sure.)

People are not NUMB to the carnage in Baghdad (and make no mistake, despite the occasional car bomb in Mosul or Basra the main problem is in Baghdad and it's suburbs) they just recognize two minor facts: A larger percentage of the population is actively supporting the carnage; and it is a DAMN WAR ZONE! Duh!?

Wednesday, October 18, 2006

Bankruptcy Fraud: a review

The Justice Department and the FBI have jointly announced a significant nationwide sweep of bankruptcy fraud criminals.

Yep, you can read how after investigations in 36 districts the sweep netted:

18 cases, and 78 people.

Out of over a quarter million cases.

MAN that new law is great!

Monday, October 16, 2006

A call to dis-arm

I know that I have a small readership, and generally you do not make comments, but I am asking now.

Please leave a comment: agree or disagree (additional comments are welcome)

In passing I have answered the anti-war group that we should recall all military personal, no matter where stationed, home.

I AM NOW MAKING THAT REQUEST. I want every single military member currently assigned to ANY station overseas, returned to US soil within 90 days. From South Korea, from Japan, from the Philippines, from Diego Garcia, from Afghanistan and Iraq, Kuwait, Saudi Arabia, from Europe, from England, from South and Central America.

Recall however that military troops also guard our embassies and consulates the world over. They are to be returned also. Recall ALL embassy staffs and ambassadors. Given that we are leaving, I expect the world to respond in kind. As some countries may be reluctant, I ask that the creditials of every diplomat currently in the US be revoked. All embassies are to be closed and vacated within 10 days. No asylum will be granted to anyone currently here on diplomatic creditials. Further, as the UN constitutes a 'foreign' presence, it is also to be vacated within 7 days. All foreign nationals on diplomatic work at the UN are to leave within 7 days.

All deployed naval groups are to return to home ports. All deployed air units are to return to their home fields.

Effective immediately, all vessels not under the US flag are to be boarded prior to entry into US navigational waters. All aircraft requesting landing in the US must provide personal information on ALL travelers at least 3 hours prior to DEPARTURE or the planes will be turned away, militarily.

The left has been screaming for this for more than a year. Step up now and support this request.

Wednesday, October 04, 2006

What's a moderate to do?

Rep. Mark Foley resigned. Too bad he didn't have a democratic PR person on the payroll, it may have helped him keep his seat.

Right now, if I were the democrats (I use the small d to denote all of that particular political persuasion), I'd keep my mouth shut about Foley and what anyone might have known, when. The democrats might not have noticed, but they are standing in the finest of crystal chambers holding big, heavy rocks.

Rep. Mark Foley resigned. Apparently, he has some semblance of character remaining. There are many examples of less notable Democrats.

Just to the right of this post is a little icon RESET. It is a link to my website that suggests we should not be voting for incumbents. Several noted essayists have recently penned that however disgusted we find ourselves with the current Republican majority, having Democrats running Congress (or even half of it) is a far greater potential disaster. I find their arguments compelling. However.

Rep. Mark Foley resigned. I accept that we elect humans to Congress. With all their faults and personal deficiencies. I am however troubled by the unseeminglyness that seems to pervade the very pores of those that have held office for (apparently) more than a few hours. There is a war on and the 'prisoners' we have captured receive better food, medical treatment and personal services than just about every American EXCEPT those in Congress. According to some human rights stupidity, I heard that the significant weight gains experienced by the 'detainees' in Gitmo is "evidence" of their mistreatment. The GOVERNMENT of the United States is fighting a war EXACTLY as the British fought our 'war of independence'. Marching with drums in bright red coats onto a field of battle, all but saying, "shoot ME! Please!"

Rep. Mark Foley resigned. The man charged with finding Osama bin Laden in the CIA a week ago stated: "Richard Clarke, Sandy Berger and President Clinton LIED." And was he pissed when he said it. Mr. Clinton stated the week before that he tried very hard to get bin Laden, but failed. Mr. Clinton was right, he FAILED. He failed to protect US in 1993 at the World Trade Center, in Africa (in Somalia and the embassies), in Yemen and he contributed mightily to 9/11. George Bush Sr failed us in Iraq in 92 and contributed to WTC in 93. Reagan failed us in Beirut. And George Bush Jr has failed us. But Bush Jr will be leaving soon enough, unable to continue his failures. However, Congress has failed in it's duties and has every appearance of continuing to do so. On virtually EVERY topic, our government is failing and spending obscene amounts of money doing it.

Rep. Mark Foley resigned. Not because of 9/11, not because the FBI found $90,000 wrapped in foil in his freezer, not because he has an intern 'service' him in his office, but because of words written on a computer screen.

If Congress and the Administration had ONE OUNCE the integrity of Rep. Mark Foley, they would resign too. I don't expect it and therefore, I continue to support, NO TO INCUMBENTS.

Friday, September 22, 2006

It's the third round and ...

he has them right where he wants them. All summer he has played their music and the little rats have followed him down to the ring. This week, the ring leader stood in front of all the little rats who were drooling over his every word...ah, the ROP A DOP

Religion of Peace a Destroyer of Peace

Friday, September 15, 2006

A letter to Senator Hatch

In response to the NY Bankruptcy judge's findings that above median income debtors can not provide money to charity, Senator Hatch's spokesman Peter Carr said that they would be looking into an amendment to the bankruptcy reform act, I have sent the following to Senator Hatch:

To Mr. Peter Carr and Senator Hatch regarding the finding of a NY Bankruptcy judge that above median income debtors can not propose a chapter 13 bankruptcy and allow for charitable contributions: Sen Hatch. Todd Zywicki sat in your committee and proclaimed the law needed no amendments. You stood on the floor of the Senate and claimed that after 8 years of compromise and changes and adjustments, amendments were only being offered by those that would oppose the bill in any form. Sir, the chickens have come home to roost. By almost all accounts rendered in the written opinions of bankruptcy judges faced with dealing with 'perfect' bill, it is an abortion. Initial reports are that over 97% of the people going through credit counseling have NO means to make any repayment. That is a HIGHER percentage of chapter 7 than existed prior to the BARF of 2005. Further, the argument that only a small portion of people would be affected by the 'reform' ignores the $90 rise in filing fees, the $50 cost of credit counseling and the higher attorney fees due to the substantial increase in reporting, documentation and liability issues. All increases in costs on the backs of those least likely to be able to afford them. Congrats Sen Hatch on a bill you helped shepherd for 8 years. The Trustees, judges and attorneys that have to deal with the aftermath will remember you kindly when you attempt to amend your pinnacle of bankruptcy legislation to cover your butt with those churches that rely on charitable contributions...oh wait...the impact is on so few people....why bother with an amendment....if they are above the median...they can afford to pay their bills, before giving money away.

Tuesday, September 12, 2006

Debunking Bankrate's 12 Myths of Bankruptcy

Bankrate.com has posted 12 Myths About Bankruptcy. As we have a page on our site called 6 Myths of Bankruptcy I thought it would be an interesting read. After all, maybe there are some additions we could make to our page!

So imagine my surprise(not) when I started reading myths about the myths. Shall we?

1. Everyone will know I've filed for bankruptcy.
Unless you're a prominent person or a major corporation and the filing is picked up by the media, the chances are very good that the only people who will know about a filing are your creditors. While it's true that bankruptcy is a public legal proceeding, the number of people filing is so massive that very few publications have the space, the manpower or the inclination to run all of them.

This is our #4. In reality, most counties do publish the names of people or businesses that file bankruptcy. In our area, they are published in the one of the daily papers and in the monthly business magazine. It has been our experience that with few exceptions the names are published regularly. In Chicago, there is a separate legal publication that publishes all legal filings, including bankruptcy. The point trying to be made is that few people actually READ such notices. The three groups most likely to read the listings: creditors, advertisers (people selling credit repair scams) and the terminal (those people without a life).

2. All debts are wiped out in Chapter 7 bankruptcy.
You wish. Certain types of debts cannot be discharged (erased). They include child support, alimony, government-issued or government-guaranteed student loans, and debts incurred as the result of fraud. It's also very unlikely that a judge will discharge legal settlements you've been assessed, such as money you've been ordered to pay to someone who sued you.

They start off great, but end terrible. Judgments (what they claim to be legal settlements) are often dischargeable. If a credit card company gets a judgment against you, it is discharged in a chapter 7. Some judgments where you are assessed criminal damages to pay someone you have harmed do stay after bankruptcy. Only a good bankruptcy attorney can determine which judgments are dischargeable. Where fraud is concerned, talk to an attorney. Of course the biggest omission in their list is SECURED debts. Your personal obligation gets discharged, but plan on continuing to pay the mortgage or car loan if you want to keep them because the liens still exist against the property.

3. I'll lose everything I have.
This is the misconception that keeps people who really should file for bankruptcy from doing it, says Chris Viale, chief operating officer of Massachusetts-based Cambridge Credit Counseling Corp.

"They think the government will sell everything they have and they'll have to start over in a cardboard box," Viale says.

While the bankruptcy laws vary from state to state, every state has exemptions that protect certain kinds of assets, such as your house, your car (up to a certain value), money in qualified retirement plans, household goods and clothing.

This is our #6. There are some states that do not have exemptions. In those states, FEDERAL exemptions apply. Ok, maybe I am just being picky here. But, what can be exempt was seriously curtailed with the new bankruptcy law. Among other things, the federal exemptions now limit you to ONE TV, one radio, one computer and one DVD/VCR (and clothing and household goods). Paintings bought at a store, golf clubs, guns and bikes (adults) are also more exposed under the new law. Although there are ways to deal with this change, a good bankruptcy attorney is necessary!

4. I'll never get credit again.
Quite the contrary. It won't be long before you're getting credit card offers again. They'll just be from subprime lenders that will charge very high interest rates. "There are innumerable companies that will provide credit to you," says California bankruptcy attorney and trustee Howard Ehrenberg. "I don't advise any of my clients to run out and run up the bills again, but if someone does need an automobile, they can go and will be able to get credit. You don't have to go underground or something to get money."

However, if you're planning to buy a house or a car, you might want to do that before you file. Those loans will be tough to get and the higher interest rate on such a large purchase would make a significant impact on your payments. Also, if you have a credit card with a zero balance on the day you file for bankruptcy, you don't have to list it as a creditor since you don't owe any money on it. That means, you might be able to keep that card even after the bankruptcy.

Our #5. First they are correct about getting credit in the future. Heck, we even have Chapter 13 clients getting refinanced while IN bankruptcy. But it does have an impact on your credit rating, history and the rates you will be offered. Be very careful with credit offers, scams are rampant. Oh, and their suggestion to obtain debt before filing, such a suggestion is ILLEGAL if made by anyone offering bankruptcy advice. However, this is one of the perversions of the new law. Example: Two single men, one earning $45k a year, the other earning $90k a year. Both wanting to file a chapter 7. Assuming the median income in their area is $40k a year, at initial glance, both have to file chapter 13 instead. Let's now compare debts. Our $45k earner rents, has a beater car and $80k in credit card debt. Our $90k earner owns a home, a new Hummer, a Harley, a Snowmobile, a $2k computer and all new furniture - all purchased with secured debt, and $25k in credit cards. After all calculations are done, our $45k earner has to pay $450 a month into a chapter 13 plan, but our $90k earner qualifies for a chapter 7. Sounds fair? It is the new law.

5. If you're married, both spouses have to file for bankruptcy.
Not necessarily. "It's not uncommon for one spouse to have a significant amount of debt in their name only," Hargrave says. However, if spouses have debts they want to discharge that they're both liable for, they should file together. Otherwise, the creditor will simply demand payment for the entire amount from the spouse who didn't file.

We ignore this one because we are a community property state. Debts are usually community property (there are exceptions - talk to a good bankruptcy attorney!) and therefore filing as a married couple makes sense. There are several community property states, check yours. But even here, we get one spouse filings. Give them this one.

6. It's really hard to file for bankruptcy.
It's really not. You don't even technically need an attorney. However, it's not recommended to go through the procedure without one.

Technically you don't need a dentist to pull a tooth. Technically you don't need an attorney to buy a home. Technically you don't need a doctor for a 104 fever. It is not hard to file bankruptcy at all! It is however very hard to get a discharge that covers all the debts that can be discharged without a good bankruptcy attorney. I'll give them this one, technically.

7. Only deadbeats file for bankruptcy.
Most people file for bankruptcy after a life-changing experience, such as a divorce, the loss of a job or a serious illness. They've struggled to pay their bills for months and just keep falling further behind.

Our experience is that over 90% of people that file bankruptcy have had at least one of the 'life-changing experiences'. We have had gamblers, and an occasional "I'm going to beat the system' types (which we send packing BTW). But my nit-pick here is the 'struggled for months'. In almost every case, the time frame is years. On average 2.5 years. No credit here, they are adding a myth.

8. I don't want to include certain creditors in my filing because it's important to me to pay them back someday and if the debt is discharged, I can't ever repay them.
Bless you for even thinking about such a thing. You're no longer obligated to repay them, but you always have that opportunity. If your conscience won't let you sleep nights because you didn't pay your debts, there's nothing in the bankruptcy code that prevents you from doing that once you're back on your feet. But bankruptcy is an all-or-nothing deal, so you have to include all your creditors in the petition.

Bless you? Credit extension was a BUSINESS decision, appealing to your religious guilt is a way creditors coerce people to keep paying even at the expense of family or health. For decades businesses have used the bankruptcy card to justify higher interest rates. Anyone see interest rates GO DOWN this year? Nope. How many businesses get the government to bail them out of a bad decision? After 8 years of trying the credit industry got just that plum. Exactly how many $600 million dollar a year in profit businesses do you know care one bit about YOU? Bless you...HAH! No credit on this one just for pissing me off....

9. Filing for bankruptcy will improve my credit rating because all those debts will be gone.
That sounds like an ad for a bankruptcy lawyer trolling for clients. Filing for bankruptcy is the worst 'negative' you can have on your credit report. Unlike other negatives, which stay on your report for seven years, bankruptcy can be there for 10 years.

Oh, those nasty bankruptcy lawyers.....trolling for clients....while credit card companies send out 5 BILLION OFFERS this year.... Yep, bankruptcy is a bad thing on your credit report...so is a repossession, a foreclosure, judgments and continued lates on payments....so when a bankruptcy is filed...the judgments go away, the lates stop and you get back on your feet financially. While there will be some hemming and hawing from the credit REPORTING side of things, all things being equal, if you take two people in exactly the same terrible financial shape, have one file bankruptcy and let the other continue struggling, guess who's credit score will be higher next year? You got it...the person that filed bankruptcy. And remember their #4? Never get credit again? Who do you think the credit issuers will give lend to next year? The person that filed bankruptcy, or the one still struggling?

10. You can't get rid of back taxes through bankruptcy.
Generally speaking, this is true. However, there is such a thing as tax bankruptcy, says tax educator Eva Rosenberg, known on the Web as Tax Mama. To get a shot at it, you have to file all your returns and the taxes owed need to be at least three years old.

It is not easily done, and as stated, there are conditions, but taxes can be discharged. Credit them this one.

11. You can only file for bankruptcy once.
You can file for bankruptcy more than once, but the bankruptcy law that went into effect in October 2005 lengthened the required wait between filings. You can only file for Chapter 7 bankruptcy once every eight years. You have to wait two years to repeat a Chapter 13 filing and four years between a Chapter 7 and a Chapter 13 case.

Of course, that doesn't make it a good idea.

"Multiple bankruptcies are really bad," Rosenberg says. "Many people get into the habit of once they've done it, it becomes a way of life. This is not good for your karma." Or your credit rating.

Actually, the time frames with regard to Chapter 13 are more ...pliable... than that, but generally speaking they are right, you can file more than once. Prior to the law, we often filed twice for a particular type of client: homeowners. We would file a chapter 7 to get rid of unsecured debt, then a chapter 13 to deal with secured debt. It is still possible to the same under the new law, with some qualifiers and conditions. But I will call your attention to one repeat filer many will be familiar with: Donald Trump. There are reasons for bankruptcy, and damn it, leave religion out of it.....karma....shheesssh.

12. I can max out all my credit cards, file for bankruptcy and never pay for the things I bought.
That's called fraud and bankruptcy judges can get really cranky about it. The trustee in your case will review all your purchases right before your filing. The trustee knows what to look for.

Ah, now the credit industry wants to let bankruptcy judges and trustees watch for fraud. See, before the new law passed, it's supporters claimed that the judges and trustees practically NEVER caught such fraud despite it's obvious widespread nature. And for many people that do file bankruptcy, many of them, maybe a majority, maxed out their credit cards in the year before filing without any problem in bankruptcy.

So. There are myths about bankruptcy, mostly promoted by the credit industry to keep you from filing. If you have these danger signals, you should be talking to a knowledgeable bankruptcy attorney. Because the most important myth to debunk is the one you read about somewhere.

Friday, September 08, 2006

Score one for Hatch

Dear Senator Hatch,

Congrats on the passage of the Bankruptcy Reform Act. According to the Federal Bankruptcy Court, Northern District of New York, your constituents that earn over the median income will no longer be able to deduct charitable contributions in calculating the required means test. Given that Utah has a significant Mormon population that actively tithes, their future inability will likely piss off the Church. No worries though...that vast reduction in the number of bankruptcies filed will have little impact on the Church receipts (oopss...filings are increasing and expected to reach pre-reform levels sometime next year)!

Again, congrats on a job well done for the banking industry!

Sunday, September 03, 2006

Sectarian? Actually, religious war...

There has been much made over the Rumsfeld speech and the military report on Iraq over the last several days and I wanted to add a few words.

First: sectarian violence. This is members of one sect of Islam killing members of another sect of Islam. It is exactly the same as Protestants killing Catholics. What you say? Protestants are not killing Catholics? Yes, well, they were in Ireland. The scale is smaller but I don't recall the MSM calling it civil war....maybe the scale has something to do with it. The actual point I want to make is that the "sectarian violence" in Iraq is not calling for a split of the country. We do not hear of 'spokesmen' saying that if the Sunnis get their own country, they will stop killing people. We do not hear of Shite 'spokesmen' saying that if they get their own country, free of Sunnis, they will stop killing people. Hell, we don't even hear Kurdish 'spokesmen' saying if they get their own country...well, they are not killing anyone so what's the worry there. There is no civil war, there is ongoing religious based mass murder. Quit calling it sectarian violence...it makes it sound so, clinical. Call it what it is, Islamic violence. This is about two groups of Moslems killing each other over who has the right God sense. There is nothing civil about it.

Second. Fourteen of the eighteen provinces in Iraq are generally speaking, quiet. No more dying is going on in those provinces than goes on in Washington, New York, Detroit or Los Angeles on any particular day. The four provinces still fighting battles are those that were predominately Sunni controlled. Gee, surprise. Of course, we are not exactly on great terms with Shites..given their fawning over Iran. Still, there does appear to be a real political life in Iraq and we need to be more on that side than any other.

Third. Bush lied crowd: grow up. Joe Wilson has been so discredited, I surprised Mastercard hasn't hired him. No plan to win: we won already. The war to dispose Saddam was won and accomplished. Getting Iraq to the point of stability and ability to defend itself, we're working on it. Takes time.

Fourth. War on terror. I keep hearing that the left agrees we have a war on terror. However, their suggestions on how to deal with it all seem to revolve around talking to our friends and talking to our 'enemies' (and we shouldn't call them that because it just makes them mad and more prone to being angry...). Talking is so great....If we could have just talked to Atta...maybe he would have landed instead.

Last: Powell convinced the rest of the Administration that France was on board, right before France appeased Saddam. Rice convinced the rest of the Administration that France was on board, right before France appeased the Arabs. Does anyone else think that the State Department should get billing as the latest reincarnation of the home of the body snatchers? I want to know: does the State Department cafeteria only serve Perrier?

Victoria has been listening to Air America a lot over the last 10 days or so...therefore, of course, so have I. If Air America is any indication of the current mentality of the left, half this country has already surrendered.

Tuesday, August 29, 2006

A job...

I am looking for work I can do at home. If you need administrative help of virtually any kind, please let me know. Resume available upon request.

Now, as I think this post is generally off topic and a request for help, I think it is only fair I give something of value back to you. Below is a list 'definitions' I wrote the last time I was looking for work...

Entry Level Low pay, lotsa work, no future
Ability to work independently No support staff, you're on your own
Experienced No training provided
Team player Boss gets credit, you get blame
Salary history required We don't want someone we have to pay a lot for
Salary requirements We don't want to read all the resumes we'll get...note: see above
Salary negotiable We don't know how much to pay, or the more you can do, the less we can pay
Excellant benefits The salary is below average
Flexible hours Overtime and weekend required with no notice
Self starter You must know the job in the first week
Room for advancement We want to replace your future boss but pay less for the position
Casual environment 1. Dress down on alternate Fridays

2. Personnel reviews done in company lunchroom or at company parties

Supervisory position We'll blame you for the other people's screw ups
Leadership abilities Your boss wants someone to cover for him while he golfs
Ability to take charge Your boss works 60-70 hours a week and has been looking very pale lately
Boss' right hand 1. Boss has two left hands, or...

2. Boss needs someone to do his work also

College grads encouraged We hope you'll take anything to pay off your loans
Re-entering work force You earn the same as you would as a stay at home mom without the cute smiles....or

We'll pay you entry level rates and expect managerial experience

Managerial experience You'll be expected to supervise a bunch of children
Diverse environment We have one of everything here
Experienced only You'll be the only one that can do the job
College degree required We want to say that we have a college degreed person doing this menial job
Customer service You'll have to answer the phones when the Receptionist is at lunch
HS Diploma or equvalent required We need a warm body
Some college required Teenagers need not apply
Advanced degree required We mean it...you have to know something about this
MBA We want a fast track program and you're it!
No experience required, we'll train It's our way or no way
Some experience We'll let you do the grunt work
10 years experience You teach us
Support busy manager You make the coffee and pick up the laundry
Family environment Babysit the bosses kids

Saturday, August 26, 2006

A good economy?

My friend Tom over at BizzyBlog and I have slightly different opinions about the state of our economy. His opinion is that the economy is doing great and the doomsayers are taking molehills and making mountains out of them. I am by nature an optimistic person but because of our business, we see a lot of molehills.

First, foreclosures. When a family faces foreclosure, their financial condition is usually in very serious distress. Many people facing foreclosure have judgments against them for non-payment of credit cards, utilities or medical bills. The foreclosure is usually the last in a long line of non-payments. Still. Foreclosures occur even in the best economic conditions, so in and of themselves, they do not indicate a systemic problem with the economy. Despite the 70% increase in foreclosures nationwide during the first quarter of 2006, we are talking about less than one million foreclosures in a market of over 75 million. A relatively small percentage. In our area, we saw a similar foreclosure rate in our area, but it has settled down to about 30% increase for the 2.66 quarters of this year. Based on previous history, it will probably finish the year nearer 50% increase. A troubling issue, but we are talking about 2500 foreclosures in an area of about 850,000 people. Of those 2500 foreclosures, about half will actually be able to come up with the money to stave off the loss and keep their homes. This will of course lead most reasonable people to dismiss the issue as a molehill. But I do want to use one more stat to suggest it is a bigger problem. Last year about 14,000 homes were sold in the area, meaning about 10% were foreclosures. There is a current unsold inventory of almost 5,000 homes in our area. Foreclosure increases will lead to additional inventory and because of their nature, pressure on pricing.

The impact of foreclosures will not show up in many econ stats: people still need a place to live and most people evicted by foreclosure will end up in rental housing. Based on a general opinion, most people will net a reduction in housing costs freeing up money for other expenses.

Foreclosures and housing bubble? Markets that had significant investor involvement were getting very overheated last year and those markets are the ones experiencing 'bubble' like results. Other markets with moderate increases in values and sustainable growth seem to be weathering things just fine. Regional housing recessions are likely but not expected to spread - IMO.

Second issue: gas prices. We have several truck drivers as clients. Over the last 18 months, they have experienced almost 100% increase in fuel costs. Even average drivers have seen significant increases in fuel expenditures. Miles driven have not decreased (though the increase is minor) over the last year. I will be interested to see how the 'vacation' areas did over this summer.

I think we have a good economy. Two million people filed bankruptcy last year with practically no impact on the economy (or the profit margins of the credit issuing industry...kinda makes you wonder why they were all in a huff to get the law changed). Katrina practically wiped out New Orleans and parts of the Gulf Coast also with little or no economic impact to the country. However, there ARE problems.

...cash-outs from refinancing to total $162 billion for the year but, as rates continue to rise, the figure would fall back to $69 billion for the whole of 2006. In 2004 homeowners extracted $140 billion in equity through refinancing their homes.

Based on the refinancing, there was a net pre-tax savings of over $31 billion in 2003. That number was certainly higher in 2004 and 2005. Equity refinancing added almost $200 billion to the economy in each of the last three years, not an insignificant change. If however many of the refinancings were to ARMs or other non-standard mortgages (interest only for example) then interest rate increases will make it harder to refinance in the future and increase the demand upon family budgets. 3 year ARMs sold in 2003 are coming due for their increases and we are seeing contractual limit increases (2-2.5%). On a $150,000 mortgage, payments are jumping as much as 28%. Those that can, are selling their homes when faced with stiff increases, but the market has slowed. Home sales are down almost 5% over last year. This situation is worse in those markets that had active investor involvement driving prices.

Over the last 5 years, real estate has driven a lot of our economy. A slowdown in housing sales and construction, already underway in many markets, will lead to increased unemployment as the fall progresses. Unable to refinance and faced with higher gas and maybe mortgage payments, retail sales may slow also - though there is little indication of that occurring yet. Consumers are getting pinched.

We have a good economy, but certain pillars of that economy are showing serious signs. High fuel prices are going to force prices in many parts of the economy higher. Unable to refinance and facing higher mortgage payments, consumers will be unable to sustain their current spending habits. A slow down in housing will increase unemployment. Every good economy ended, sometime. In hindsight, the writing was on the wall.

Remember this: By the end of the year, 500,000 families will have lost their homes.

The question for us optimists is: are we looking at the wall now, or keeping our backs to it...

Thursday, August 10, 2006

Give me liberty or give me...

Plenty of people are writing about the foiled plot, I shall not add to the din.

I have heard, after some shock has worn off, the same refrain from the left about liberties and security:

"He who would trade liberty for some temporary security, deserves neither liberty nor security"

And I am really tired of the thought process that thinks that any attempt to protect people is a slippery slope to a police state. So, I sat down with the above saying and let it roll around in my pretty little head and I now have some responses to the dweebs:

1. He who would sacrifice security for liberty, seeks to act against his neighbors freely.

2. Liberty without security is like freeing the tiger from his cage, he will neither thank you, nor withhold his hunger.

3. Liberty is not freedom without security.

4. The monster at your door is not seeking security and sacrificing liberty, it is seeking your life; open the door at your peril.

5. Liberty without security is anarchy.

6. My security establishes a limit on your liberty, not mine.

Although 6 is my favorite, I leave you with the following thought:

Every night I lock my doors, I trade liberty for temporary security; do you want to give up YOUR locks?

Tuesday, August 08, 2006

It's the premise...

I was taught a long time ago that when debating someone, the first person to agree with their opponent's premise, loses.

1. What military purpose do the rockets fired by Hezbollah serve? None. They are random shots into civilian areas. They are too rudimentary for anything other than 'terror'.

2. Hezbollah says they will continue to fight until every single Israeli is off Lebanese soil. That's great, but Hezbollah currently is holding two Israeli soldiers hostage in Lebanon. Israel would be HAPPY to leave if Hezbollah would just return their two soldiers - UNHARMED.

Every single sentence out of official Israel should start with the question in #1 and end with Israel's agreement to leave as soon as the two soldiers held by Hezbollah are returned. My preference is that nothing be said between those two points.

Thursday, August 03, 2006

If it bleeds, it leads...

...but where is the blood?

In the top of the hour news on Fox at 11 am central, a report was aired about an Israeli 'incursion' into Gaza in the early morning hours. Near the end of the report, we are treated to the usual people being rushed into a hospital for treatment. Flash to a little girl (10-11yr old) with a red print dress. She is on a bed and the doctor/nurse/attendant puts a clump of gauze on her forehead right at the hairline and begins wrapping her head. As everyone KNOWS, a head would bleeds profusely. Yet, there is no blood on her face, her dress or in her hair. There is no indication that her hair is even wet. The picture lasts 3-4 seconds and then we see her again being carried by someone, her head wrapped in gauze. Again, we see no blood in the dressings.

I have often wondered about news coverage. But the coverage of the events in Qana have made me very suspicious of 'injury' coverage. This report from Gaza appears to be an attempt to claim another 'unwarranted' injury of a child.

BTW, the little girl was alert, looking right at the camera and not crying.....curious no?

Sunday, July 30, 2006

The right time for a cease fire?

Israel should consider a cease fire the second Nasrallah of Hezbollah publicly pleads for one,


Thursday, July 20, 2006

Has it gotten quiet?

The reporting out of Iraq has gone almost silent. Either the fighting is over or all the press has left. Hmmmm.....

Take a short breather guys, the fighters have no one to play too so they will probably sit back and wait. Done with the break....time for a quiet push...

I support our troops and their efforts, whether or not the camera is on.

Wednesday, July 19, 2006

War is hell

People have been complaining about the heat here....it is 30 degrees hotter in Iraq and Afghanistan and our troops carry packs and body armor. Quit complaining.

Did you know people die in war? NO? It happens. Every day unfortunately. Most of the time, it is the bad people, and sometimes a few of the good people, but too often, it is the people trying to get out of the way. It is not right, not good, not nice. But war is hell and as long as people give aid by allowing bad guys to hide among them...well, more people than ought are going to get hurt.

Now, I am not saying that every time a fighter runs into a residence the people are aiding them, but you do have to wonder how many times an IED goes off on the same section of street before someone quietly turns in the house where aid is really give.

I hope it happens more than I hear. It does appear to be happening more. Apparently, the Sunnis that have been calling for insurrection and terror against our troops for the last 3 years have gotten the message that when you keep the lion's cage in your bedroom, it is not safe to dangle your feet off the bed....

I support our troops and hope they soon can get out of hell....because sooner than you can imagine, it is going to be freezing there again...

Tuesday, July 18, 2006

Sacrifice and honor

It will come as no surprise that our troops serve every day with honor. With very few exceptions, I have refrained from any discussion of situations where a or a couple of soldiers did not do so. I acknowledge that a few of OUR soldiers have violated the law, on the battlefield and off and have done so with dishonor. They have and will be punished as it appropriate. I have refrained because those that do not honor our troops use every such opportunity to smear our troops and I do not wish to give them any ground to stand on.

For the few times it has occurred, I would remind my 3 readers(!) that the sacrifice and honor of our troops is NOT diminished by such acts, but reinforced by the willingness to air the issue and adjudicate appropriately. The other side of this conflict has no such honor or willingness, instead proclaiming their vile acts as something worthy of praise.

I prefer to praise the sacrifice and honor of our soldiers and do so daily.

Monday, July 17, 2006

Our war

I do not want to get overly caught up in what is going on with Israel right now. It is absolutely part of the war on terror, but for now, it is not our fight. If Syria and/or Iran get overtly involved (IMO they are covertly involved now) then it is a different story. For now, I want to concentration on our battles, our piece of the global war.

I support our troops and their efforts.

Sunday, July 16, 2006

The United States in Bankruptcy?

Although I am very interested in economics and intended this blog to cover certain economic issues, I have not written very much on the topic. This morning, a Google alert informed me that the Federal Reserve announced that the United States was headed for bankruptcy. Now everyone knows I have a soft spot for bankruptcy, so I read with interest the story. First, the story indicates that the headline comes from a paper written by a researcher from the Federal Reserve Bank of St. Louis. Although the paper does not indicate any association by the author with any Federal Reserve Bank. Be that as it may, the initial story points to the paper here and off I went.

Laurence Kotlikoff is a Professor of Economics at Boston University and a research associate at the National Bureau of Economic Research.

Kotlikoff makes the following issue a central premise to his findings:

"..whether or not technology will continue to advance is an open question."

His scenario/model:

The amount of corn produced is determined by the labor and capital available. Capital is determined as the amount of corn that can replanted for future harvests. Of course, a certain amount of corn is necessary to feed the aging population that no longer contributes to the labor required to produce the corn.

By restricting productivity increases, only labor changes are going to have an impact on his two cycle process. The need for more people to increase production is a long term failure as at some point the number of people that have aged out of the production cycle will grow well beyond the ability to obtain more people to feed the labor pool. This is of course analogous to the retiring baby-boom generation that he seeks to model. The simplicity of the model is consistent with his need to constrain almost all the variables except the ones he is most interested in:
labor productivity and capital.

These limitations doom the 'society' he seeks to model. Such a restricted model is not capable of mimicking even the most basic issues facing our economy and government. Any model seeking to deal with labor must include some way to deal with technology issues. Kotlikoff's initial premise clearly defines both his bias and his failure.

Kotlikoff understands the issue, but refuses to consider it: "The point at which a country goes bankrupt depends, in general, on its technology and preferences as well as it's openness to international trade."

Once Kotlikoff makes his case that the increasing non-working population dooms society, he addresses the only issue left to him: capital. I found the leap he makes to be very unsatisfying. First, he considers the elderly population to be the 'creditors' in his scenario. He takes his formerly open economy allowing trade and credit flows and closes it. This little slight of hand includes the change of creditors from inside the economy to outside it. Now we have foreign creditors and his model restricts their ability to fund our economy. He supports this by asserting that foreign creditors will have no incentive to lend to the government because it has already proven its inability to produce sufficient for its own growing needs.

Of course, his original creditors subsist on the production and they have an interest in its continued existence. Failure is not an option, they can not just cut their losses and move to greener pastures. Conceptually, Kotlikoff can not allow the continued expansion of capital in his model if he seeks the conclusion he first set out to prove. The creditors have no alternatives to his 'economy'. By moving the creditors outside the closed economy, he can allow them the freedom of choice his original creditors (the non-working elderly population) do not have.

Kotlikoff further complicates matters by assuming the government will have been told by it's constituents (the soon to be or already elderly) to set their cut of production as high as possible. There is no feedback on this position, nor limits. While I might agree our social security system has certain similarities to Kotlikoff's model on this issue, it does not consider that some elderly will have hoarded some of their earlier production and have an alternative source in their non-working years. As the non-working population grows and demands an ever increasing cut of production, younger workers rebel, cease working, capital can not be borrowed and the system fails, bankruptcy.

He uses Argentina as an example of a country at or near bankruptcy for almost a century. He makes no attempt to address any systemic differences between the US and Argentina over the last 100 years. An analysis that would probably render the comparison useless and might even call into question the structure of his model.

In his first note, Kotlikoff uses the phrase "steady-state". This caught my attention because it indicates he is aware of attractors and non-linear/chaotic behavior in economic systems. He further acknowledges that the initial conditions determine whether the system will establish a steady state or crash. Only the elderly's cut of production determines the results of his model and only an increasing or very high cut produces the result his is concerned with.

The next section of Kotlikoff's paper concerns debt as a benchmark. He objects. It is the future production burdens that concern him. But in his original model, it was the elderly and their production burden as creditors he waves out of existence in favor of creditors with claim on production in the form of debt. As long as the debt is being serviced, investors will continue to lend. Consider that my opinion, but the billions lent to the US economy over the last 20 years would seem to give me some support.

Kotlikoff finally exposes himself:

"unfortunately the focus on government debt has no more scientific basis than reading tea leaves or examining entrails. To see this, let us return to our small open and entirely bankrupt Country X, which,when we left it, was setting h [cut of production] at the maximally expropriating value (1+r)w/r. Can we use Country X's debt to discern its insolvency?

"Good question, particularly because the word "debt" wasn't used at all in describing Country X's fiscal affairs. Neither, for that matter, were the words "taxes" or "transfer payments". This, by itself, indicates that the value of "debt" as a precursor or cursor of bankruptcy, namely zero."

This is simply amazing. Because he didn't use the word debt in his analysis, debt has no meaning to it.

Kotlikoff stated early in his paper that "government must further limit what it can pay it's creditors." I am unsure what Kotlikoff would classify as "pay it's creditors" other than as a debt. Whether it is in the form of usury or a cut of production, a demand upon the production of a country is a debt owed. Using a number to keep score is actually more consistent in these days of digital notes and agreements than it might have been, say in Mesopotamia.

Kotlikoff opens his paper with a paraphrase definition of bankruptcy from the Oxford English Dictionary: "is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors?"

The answer is of course no. The paper could have ended in the first paragraph, but that is not what and Kotlikoff has determined. Kotlikoff believes countries can go bankrupt, but debt is not a factor, only the burden on production can determine a country's bankruptcy state.

I have addressed only the initial premise of Kotlikoff's paper and it would take many more pages to do so to the rest, but let me leave you with the following quote and some final comments:

"...the proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy."

Kotlikoff does not address insolvency and the United States. His concern is unfunded obligations and their increasing size. I and a great number of conservatives share his concern but his claim of bankruptcy while ignoring every facet of its definition prevent any serious consideration of his recommendations to 'solve' the problem. (And I agree with two of the three he makes.) Is the United States bankrupt is a catchy headline and would surely scare some, but after 16 pages, Kotlikoff failed not only to answer the question but to even address it.

Finally, please consider me a complete idiot. Trillions of dollars is big numbers so let me use smaller ones. If my annual income was $12,000 a year and I had $33,000 in assets, how much in future obligations would be ruinous. Not current obligations, but future ones. If I had $6,000 in current debt, could I add $500 in debt per year? According to Mr. Kotlikoff I am bankrupt. I am sure Todd Zywicki would be interested.


Disproportionate response? Sorry, I am all for overwhelming destruction to rain down upon the heads of those STUPID enough to stick a sleeping bear with a stick with the INTENTION of pissing it off.

When what's his name got dumped on with a 500 lb bomb, some here said that was overkill....frankly, I wondered why they didn't use 1000 lbs. Shock and awe.....you stick a beehive and you will not get a couple of bees chasing you, it is the whole hive.

Fighters in Afghanistan and Iraq have learned that it is much safer to set a bomb and run than stand and fight. Hezzbollah is learning the same lesson.

Overwhelming force. Anything less is toying with a defeated animal....put it out of it's misery.

Thank you to our troops and for your service.

Saturday, July 15, 2006


Our daughter was playing with neighbor kids, they were shooting each other with those heavy duty squirt guns that carry....a gallon?! It is very hot and a good way for them to cool off. I stepped out onto our deck to watch them for a moment when my daughter dropped her depleted gun and was continued to be drenched. She called for the mom of the other kid to get her kid to stop. I yelled at her not to complain. We talked a little later and I said, if you are going to play the game, then when you start losing, you need to surrender, not complain to a higher authority! Teach them Uncle and surrender when you are beaten. She didn't like the prospect of having to surrender but I reminded her, she wants to play the game, she has to accept the consequences.

Hezzbollah has a bunch of 'friends' that are complaining. Hezzbollah started the game, they have to accept the consequences. Frankly, if Israel wants to turn southern lebannon into a waste land, I have no problem with it.

Our troops understand that the game has consequences, I haven't heard a peep out of any of the soldier bloggers complain about the unfairness of IEDs or their positions. I also don't expect anyone to cry uncle.

My support is 100%.

Friday, July 14, 2006

Our troops and the glare

The glare of the anti press is off our troops in Iraq and Afghanistan. For the moment, it is on Lebannon and Israel. Hopefully, while the press is occupied, the fighters in Iraq will get a more intense look at the dark end of our barrels: don't worry, won't be dark for long...

I support our troops and their efforts. Despite the lack of press, our attention is not diverted from your efforts.

Thursday, July 13, 2006

Not our troops, but it is our fight

They sneaked over the border, killed a bunch of soldiers, took two as hostage. They might not have been our troops, but they are fighting the same fight.

I doubt they will live, but if Gaza is any indication, Hezzbollah is about to get a world of hurt on them.

Leave no man behind. Honor demands nothing less.

I support our troops, and I support Israel's right to honor.

Wednesday, July 12, 2006

Supporting our troops

Can it be that less than 4 in 10 of us really support our troops? I know it should matter, but the reality is that like any sports team, our military only gets support when they are 'winning'. And that is why I am only a little surprised: we are winning! Yes, some of our troops are dying, but almost NONE from combat. IEDs do most of the damage, the most common other death not related to accidents is sniper shots. Almost every single time our troops meet head on with gun toting fighters (insurgents, terrorists, jihadists, mufsid) it is a clear rout. Our side: 2 wounded; their side: 12 dead.

I do not object to the other side using IED's or 'guerilla tactics'. However, I do object to someone claiming hiding in hospitals, mosques and behind children and in residences constitute 'guerrilla tactics'. Those are the acts of cowards.

When that happens and innocents are hurt, our troops feel more pain than if they were wounded physically. I don't agree they should feel that pain, but I understand it. I support our troops, unconditionally.

Tuesday, July 11, 2006

Your support of our troops

Some have accused me of using cheap talk in supporting our troops, that anyone can SAY they support the troops, but to actually do it requires more.

First, those that are complaining the loudest, seem to be those that in fact do NOT support the troops.

Second, actions do speak louder than words, however I make two points: one, what my family does to support troops is more than just posting here. We contribute to groups sending supplies and materials to troops; we have sent toilettries and phone cards through other groups and we remain in contact with troops directly in the field.

But the issue that I want to address is the purpose of these posts: to speak out and proclaim our support of the troops. These posts, while scarcely noticed in the world, are in fact tangible evidence of our vocal support. Telling some 'safe company' friends that you support the troops is nice, but saying it when those that disagree have the opportunity to voice their distain takes it to a slightly different level.

I support the troops. I am not a lone voice, but our troops need to hear from the chorus loud and clear. Add your voice so that at least in a small way, they KNOW people are not just paying lip service to their sacrifice.

Monday, July 10, 2006


First you claim it can't happen,
when it does, you claim we deserved it,
when some question you, you question our surprise,
when that simmers long enough, you argue our complicity,
and finally, when few, the unaware, are listening,
you teach it never happened...

First it was the holocaust, now it is 9/11.

The left's hand wringing continues apace....

Of course we are...

In a conversation on rights the other night in a chat room, I was confronted with the old saw about Nazi's coming for first the communists and no one complaining, etc...

So, while sitting in church yesterday contemplating yesterday, today and tomorrow, I recalled the conversation and offer this in response:

First the illegal immigrants came
and the left demanded their right to work
and the right was called racist for disagreeing,

then the hate preachers came
and the left demanded their right to freedom of speech
and the right was called bigoted for disagreeing,

then the jihadists came
and the left demanded their right to freedom of religion
and the right was called intolerant for disagreeing,

then the hijackers came and killed thousands
and the left demanded their right to protest
and the right was called oppressors for complaining.

Is there any reason why the world should not believe we are a
nation of illegal, hate preaching, religious warmongers?