Sub Ubi

I spent a lot of time in the past few weeks reading about sub-prime mortgages. You see, I’ve just entered into a mortgage, and I wondered what my risk was. Was I in danger, in some way, because of all of this financial foolishness? Well, of course: everyone on the block around me could loose their shirt, and my home purchase would be devalued. I don’t think that’s going to be the case, however, so lets just say that my largest risk is probably general economic collapse.

But what if I were in a different situation? Say I had purchased a condo for around $200K. I purchased it with a short-term ARM (perhaps a 5-year) about four years ago, and I now need to decide what to do. The rate is about to jump, I don’t want to sell just yet, but at the same time, I don’t want to watch my monthly payments double in the next few years. Because I’m in a good financial position (right now), I decide to refinance. There are two ways I could do this.

It’s fine!

I used to live at 3 Woodland Way in Canterbury, England. In this house, we had a saying: “It’s fine!” Usually, this is said forcefully while something is on fire. Typically, that particular thing (whether it is a microwave or a coffee machine) should not be on fire. It was an assertion, not an assessment, intended to calm any housemates who may be witness to the unfolding disaster.

I could look around at my local economy, and declare “It’s fine!” I might, then, refinance with another 5-year ARM. Doing a bit of reading:

Under this model, an ARM that starts at 5.75 percent can increase to 7.75 percent in the second year, to 9.75 percent in the third year, and 11.75 in the fourth year. This means monthly payments will nearly double.

So, if I believe that my local economy will outshine the global economy, and that I will be able to refinance and sell within five years without substantial loss, then I should go ahead with the 5/1 ARM. Why? Because I pay less interest now, offload my property in three years, and save money in the process.

We’re screwed, Cap’n

I heard my housemate Ed say this more than once: this was often stated in aftermath of declaring “It’s fine!” The US economy is fcuked. We are in recession. We are getting hit hard on jobs, oil, and the ongoing debacle that is the subprime crisis. Hell, people have even stopped buying Hum-Vees.

No economy in the US will weather this well. I take that back: small, isolated micro-economies (rural towns, etc.) will continue to do as poorly as they ever have. In other words, they won’t be effected by large wiggles in the economy, because they run on a lower baseline and the ripples aren’t felt as fiercely. So, arguably, small economies will do better as the fecal matter hits the rotating blades.

Large economies (cities) cannot fare well. Cleveland is already being gutted (charts and graphs) by the subprime scandal, and we haven’t yet seen the fallout from this. To claim that any one market will do better than another is crazy-talk; certainly, I’d want data to support such crazy-talk, but… oops! That data comes from the future. So, I guess I won’t be seeing that data.

Snark aside, there would seem to be only one option: financial conservatism. The safest move is to refinance on a stable, 30-year mortgage. A 30-year fixed at 6.25% will involve a monthly payment of roughly $1200. This is a bit higher than the ARM, and yes, you pay $250K in interest over the life of the loan. However, the life-of-loan figure is a lie. We can refinance later if the rate comes down—not to buy a new car, but to jump from a 30-year to a 15-year mortgage, thus saving substantial cash. (We avoid the 15-year now because of the higher monthly payments; the 30-year gives us more breathing room right now.) Or, we can pay on a bi-weekly basis to cut the 30-year to a 22-year mortgage… if we’re making a steady flow of serious cash. (Remember the golden rule: the bank will always take your money.)

But again, if the goal isn’t to keep the property forever, it is simply a matter of “when” we are going to sell, not “if”. Hence, we shouldn’t care about the interest, or refinancing, or anything else for that matter. Instead, we should just care about getting into the safest financial position we can find now, and make sure that it is a position from which we can weather any coming crisis. If we manage to sell in three years, we paid a relatively small amount more (per month) for the safe 30-year loan over the unsafe 5/1 ARM. If the economy is in such dire straits in three years we cannot sell, and we’re lucky we’re employed and still have a place to live, then we want to make sure that our loan doesn’t yank that stability out from under our feet—which a 5/1 could easily do.

Keep in mind, I don’t actually know anything about long-term finance, but I am having a hard time finding ways to argue for the higher-risk strategy unless you’re prepared to loose. I, myself, would not be in a position to see base housing costs double.

Of course…

The safest-est move is to dump the property while/if there is a local economy that is in the mood to buy. Then, the whole discussion becomes moot, and the financial burden is covered by an SEP field… it becomes Somebody Else’s Problem.

If this were me, selling right now would mean I’d have to move in with my parents for a while, and it would be inconvenient… but I’d sleep better knowing that a clean, empty condo sells better than one with people in it. However, prepping a property for sale so that prospective buyers want to buy it as soon as they see it is another post entirely.

In case the situation isn’t clear:

1. NJ county buys electronic voting machines.
2. Princeton prof offers to help independently verify the vote from said machines.
3. Maker of machines threatens to sue if independent verification occurs.

Would anyone like to tell me when corporate interests trumped democracy? How is this different than some goon with a baseball bat standing at the voting station telling me “Don’t worry… we’ll make sure your vote gets counted.”

Closed, unverified electronic voting machines are a threat to democracy.

From the Star-Ledger:

Union County has backed off a plan to let a Princeton University computer scientist examine voting machines where errors occurred in the presidential primary tallies, after the manufacturer of the machines threatened to sue, officials said today.

A Sequoia executive, Edwin Smith, put Union County Clerk Joanne Rajoppi on notice that an independent analysis would violate the licensing agreement between his firm and the county. In a terse two-page letter Smith also argued the voting machine software is a Sequoia trade secret and cannot be handed over to any third party.

For tax purposes, I need to know the start and end of every trip I made to the USA.

Why? And, mercy, I don’t have that information easily to hand. This is a nightmare.

Weather widgets are fun.

At home, it’s just below freezing. Here in the SouthEast, it’s not much warmer—but the world shows signs of impending spring.

My former housemate, Dr. Ed, is currently in Bangkok. It is 32 degrees Celcius at around 6PM (his time). If you can’t do the math’s, that’s around 90 degrees Fahrenheit.

It’s a big world, made small by weather widgets.

I flew from London to Cleveland in December.

I flew from Cleveland to London in January.

I flew from London to Houston in February.

I flew from Houston to London in March.

I flew from London to Los Angles in April.

I flew round trip LA to Cleveland in May.

I flew from LA to London in May.

I flew round-trip London to Faro in June.

I flew from London to Cleveland in July.

I fly, Cleveland to London, before the end of the month.

I have never watched ZeFrank’s video podcast before; very succinctly, he makes clear the way I feel about the US response to terrorism.

Even with the risk of airplane bombings, it is still more dangerous to drive your car—or smoke cigarettes.

As long as a small group of people can inflict mass panic across a large population, the tactic itself will remain viable. One way to deal a blow to the effectiveness of terrorism is to deal with the terror itself. London’s police deputy commissioner Paul Stevenson’s report said that the plot was “intended to be mass murder on an unimaginable scale.”

No. It is imaginable. Between three and ten flights out of thousands would have resulted in the terrible loss of human life.

Bush today said this country is safer today than it was prior to 9/11. Personally, I don’t think he knows. Whether we like it or not, terrorist attacks on Americans are now part of the global reality. They will continue to happen.

The entire spot is 2 minutes, 21 seconds. It’s rational, and straight-forward.

If a terrorist makes you live in fear, shame on them.

If your government makes you live in fear, shame on you.

Schneider said Sheehan had worn a T-shirt with an anti-war slogan to the speech and covered it up until she took her seat. Police warned her that such displays were not allowed, but she did not respond, the spokeswoman said. (LA Times, Google News Search)

So now you can be arrested, in the capital (and Capitol) of the United States of America, for wearing a T-shirt with an anti-war slogan. She was arrested under the charge of “campaigning in the Capitol building”.

Explain to me which “political campaign” peace is part of?

The United States has 4.6 percent of the population of the world but 22.5 percent of the world’s prisoners.

I’m reposting this Guardian article in full. Someone will yell at me, if necessary, to pull it.

American troops in Baghdad yesterday blasted their way into the home of an Iraqi journalist working for the Guardian and Channel 4, firing bullets into the bedroom where he was sleeping with his wife and children.

Ali Fadhil, who two months ago won the Foreign Press Association young journalist of the year award, was hooded and taken for questioning. He was released hours later.

Dr Fadhil is working with Guardian Films on an investigation for Channel 4’s Dispatches programme into claims that tens of millions of dollars worth of Iraqi funds held by the Americans and British have been misused or misappropriated.

The troops told Dr Fadhil that they were looking for an Iraqi insurgent and seized video tapes he had shot for the programme. These have not yet been returned.

The director of the film, Callum Macrae, said yesterday: “The timing and nature of this raid is extremely disturbing. It is only a few days since we first approached the US authorities and told them Ali was doing this investigation, and asked them then to grant him an interview about our findings.

“We need a convincing assurance from the American authorities that this terrifying experience was not harassment and a crude attempt to discourage Ali’s investigation.”

Dr Fadhil was asleep with his wife, their three-year-old daughter, Sarah, and seven-month-old son, Adam, when the troops forced their way in.

“They fired into the bedroom where we were sleeping, then three soldiers came in. They rolled me on to the floor and tied my hands. When I tried to ask them what they were looking for they just told me to shut up,” he said.

When the rest of the world starts waging a war on terror, we’ll call them terrorists… because they will be attacking us, instead of us attacking them.

Bias is reporting 11 dead instead of 125.

The headline from the New York Times “International” section:

The headline from the Scotsman “International” section:

This is called bias, boys and girls. It is how you help an administration brainwash a nation. The 11 US soldiers who died volunteered to be in the military, for good or bad. Through action or inaction, the US voted to support this war; the 114 innocents who died today on the streets of Baghdad did not. The US brought this war to them.

Update, later same day:

I was just quickly skimming the news before heading off to a meeting this morning, and only had a chance to quickly skim headlines and some content. The apparent discrepancy that I noted is (in part) because the Times reported (yesterday) Attacks in Iraq Kill 120 as Post-Election Violence Escalates. In other words, the Times headline from today should be seen as a logical continuation of yesterday’s news. Still (RBK), taken in isolation, juxtaposed as they are, I think one headline speaks (more) clearly to the scope of the human tragedy, while the other does not.

I love coming home to things like this (and followup). So did rep. John Boccieri:

My name is State Representative John Boccieri (D-New Middletown) and I’m a legislator near Youngstown. I’m also a C-130 pilot who returned from my last rotation a few weeks ago in Operations Iraqi Freedom and Enduring Freedom, and my unit will be demobilized this month.

As I return to the Statehouse and my legislative duties, I’m so disgusted to be met with the majority party’s answer for election reform. I flew the Iraqi Governing Council, members of our military who specialize in International Elections, and private groups who were fighting to ensure there were fair and safe elections in Iraq and the Middle East. Little did I know that upon my return we would have to fight for fair and safe elections here in the Midwest.

Is it ironic that we would spend so much time and money ensuring Iraqis’ had the unfettered opportunity to vote, yet we would create barriers to access Democracy here in the U.S.?

We flew election ballots into Baghdad under armed guards, yet after reading The Conyers Report “What Went Wrong in Ohio” by Congressman John Conyers (D-Michigan), it appears that there were systemic problems with ensuring the safety and integrity of our own voting processes.

The legislation floating through the General Assembly is designed to frustrate and selectively disenfranchise citizens in this state from voting.

For example, my 82 year old great aunt votes regularly, and she doesn’t drive nor does she have a state driver’s license. She will be restricted from voting if this legislation passes because she doesn’t have a driver’s license or another picture ID. Even if she did have a license, if she had to move to a nursing home and her address didn’t match the license, she would be unable to cast a provisional ballot. Worse yet, if she became disabled and couldn’t sign her own name at the local board of elections, she would have to execute a power of attorney in order to vote.

Funny thing-all the Iraqis had to do was dip their finger in ink.

I put my life on the line and went to Iraq because my country asked me too, and the very freedoms we are attempting to deliver in Iraq are being challenged here in Ohio.

The Republican candidate for Secretary of State Representative Jim Trakas said that “Democracy shouldn’t be easy,” during the Ohio House debate on election reform. It is clear to me that if we don’t stand up and fight for our own freedoms and rights, they will erode slowly by apathy created from a sense of inability to change our political landscape.

I will fight this legislation and any other attempt to restrict our freedoms and I need your help too.

In the Ukraine, they voted again when they felt their process had been compromised. In the US, the courts appoint the President—a court that is, of course, appointed by the President. I really don’t care whether someone claims they are a Republican or Democrat in the USA: everyone should care about a democratic process that is open, fair, and just.