Psalm 49

Hear this all you people; listen all who live in this world, both low and high, rich and poor alike.
My mouth will speak words of wisdom, the utterance from my heart will give understanding. I will turn my ear to a proverb, with the harp will I expound my riddle.
Why should I fear when evil days come, when wicked deceivers surround me - those who trust in their wealth and boast of their great riches?
No man can redeem the life of another or give to God a ransom for him, the ransom for a life is costly, no payment is ever enough that he should live forever and not see decay.
For all can see that wise men die, the foolish and senseless alike perish and leave their wealth to others. Their tombs will remain their houses forever, their dwelling for endless generations, even though they had named lands after themselves.
But man , despite his riches does not endure, he is like the beasts that perish.
This is the fate of all who trust in themselves, and of their followers who approve their sayings.
Like sheep they are destined for the grave and death will feed on them.
The upright will rule over them in the morning, as their forms decay in the grave far from their princely mansions.
But God will redeem my life from the grave; he will surely take me to himself.
Do not be overawed when a man grows rich, when the splendor of his house increases.
For he will take nothing with him when he dies, his splendor will not descend with him.
Though while he lived he counted himself blessed - and men praise you when you prosper -
he will join the generation of his fathers, who will never see the light of life.
A man who has riches without understanding is like the beasts that perish.

tough love

To my favorite talk show host: "I love you man (not in the gay way...) but because you are brutally honest. Thanks for the Valentines Day Massacre. I suppose I had it coming, so I must say I am sorry. I was presumptuous to have thought to make statements or assumptions about the state of our nations economy and I should rather have phrased all those comments as questions, allowing you to comment as I so very much appreciate when you do so. Please don't take it out on all the baby boomers. My case is only a small sampling of the things that have happened to some of us. I have tried to be brutally honest in confessing the investing mistakes I have made in the hopes that you might give your highly valued opinion and perhaps share them with others and lend some insight to what we might do to remedy our present situation. You have stated that your objective is to "get you to retirement
I am 100% with you on that and even more importantly, I want us all to get beyond that concept and that state to the great beyond. But sometimes you just scare me I admit. Please don't eat me like a jelly donut. My objective; I want you to get to eternity and live there in paradise. It is the objective of every person who seeks security, whether it is in wealth, career, religion, music, saving the planet, whatever. The ultimate security lies beyond our narrow vision of the here and now, and way beyond retirement. You said a month or so ago that you need a "savior". You said you "hope there is eternal life" and that some folks seem to "know" there is. It's true man. Anyway, please accept this apology, I am only a student of the economy and in no way was I trying to advise you, except for the request that you comment on the concerns that I and some of my circle of friends have expressed. As I stated, some are bearish, some are bulls, and some don't give a shit. I am just trying to figure out where we are and where we're going. And I'd like to buy you a beer sometime, so just let me know. Hoo-Lee-Oh

the small investor WIPED OUT

So here's an interesting book for any would be investor. If you are neophyte learning about the stock market or aspiring to become a day trader or perhaps even a delusional self taught money manager hoping to make a solid gain because of your superior intellect, then maybe this book is for you. It describes the lamentable attempts of an intelligent man who desperately tried to improve his financial well being by making bets in the stock market of the late 1950s and early 1960s. In those days one was reliant on the services of a broker who placed all your trades, unlike today where anyone with an internet link can buy and sell securities from a cellphone. Amazing advances in technology have made it so easy for us to emulate this poor bastard's experiences if we so choose.
The author is unknown, perhaps to save face. But the fact that he was willing to describe his trades and the reasons for them is insightful for us today. He did seem to be overly greedy according to his own admission. Who isn't obsessed with making a killing in the markets at some point, even if we realize that it is pure fantasy. Imagine having bought Apple stock at the outset and having watched it increase until it reached the $500 plus value it holds today. It seems daunting however, in light of the vast amount of information available today, that an amateur investor could make any sort of informed decision regarding an investment back then. Despite his best intentions, his picks went from bad to worse the longer he tried to remedy his investment decisions. From the cover's flap: ...from the temporary gain to the big loss- here is the real thing. For the first time we have the full, personal, unvarnished story of a man who has acted out, to the hilt, an all too common form of speculative behavior. Read and take heed.

Economic lessons from the Past

It might behoove us to remember what occurred in Germany and Austria between the World wars. Things got a bit out of control. Loose monetary policy to blame? Maybe. Too much QE before it was called that? Perhaps. Fear and greed on the part of the general public? Yes. Excessive speculation in the markets? Some. "When Money Dies"describes the political decisions that were made that affected the value of the German Mark and the dangers that can arise when the government turns on the printing presses and doesn't know when to stop making artificial currency. Here's a link to the PDF.
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CDkQFjAA&url=http%3A%2F%2Fwww.goldonomic.com%2FWhen%2520Money%2520Dies.pdf&ei=q8kxT4O8NYjaiQKZ-ci4Cg&usg=AFQjCNGA_VzSUVSJNjKhO4eLs3tJbKFbSg
Or buy the book on Amazon.

Economic Advisory Committee

So, I've been meeting with my economic advisors here and we have had quite interesting discussions regarding the current situation in the worlds of finance, politics, science and technology. When the discussion moves to the problems, it seems always end up on finance side of things. The problems are onerous and the solutions are are all over the map. What to do? Ultimately, each one has to take care of himself and those closest to him is what it boils down to. There is an element of hopelessness in that the individual appears to have little say in these matters at the national and worldwide level, so one is left to ponder ways to survive and maybe even prosper in these times of uncertainty.
My friends here have varied opinions on how to manage their wealth and personal finances. Some believe the financial world's weather is souring and an imminent economic storm lies just off the coast. Those so disposed are fearful and suggest keeping their money under the mattress. One particular person has all his assests in cash somewhere. No investments or securities other than his home which is paid for. This person happens to be retired and collecting social security. Another says to divide one's liquid wealth into 4 equal piles; treasuries, TIPS to be exact, gold either ETFs or the real thing (he also keeps some silver dollars), overseas emerging markets (to the exclusion of China), and an equal amount of cash. This person day trades a million plus dollars to earn his living. Another relies on a certified financial advisor to manage his wealth. His investments are mainly bonds, about 60% and the rest a mix of growth and dividend stocks. He gets a check monthly and seems to be doing allright after retiring early and selling his California bay area home and moving out of state. Another manages his own retirement account, relying on advise from a friend who happens to be a finance guy of sorts. He admits it is a lot of work and he is tiring of the daily grind of watching the markets continually. He never worried that much about it while he was working. managing your own money is harder than you think it seems. There might be a lot to be said for going to work for someone else and doing some mindless task for a paycheck. For some of us however, that is not challenging enough. Another has enough real estate holding that he plans to earn enough from those properties and another amount from dividend stocks that he will purchase that should earn him about $50,000 a year or so. And as for me, well I figured I'd work 'til I'm 70. I think I'd be bored if I stayed home all the time. I may change jobs to keep it interesting, but more likely I will figure out a way to retire earlier than later. Which brings me to my current readings.
I never was very interested in economics or money or investing for that matter. I learned early that finding work was our lot in life and we would labor for a long time. No one ever taught me about money or how to manage or even increase it. My dad was a great provider, but money managed to support his hobbies and vacations and pay the bills, and I never recall any conversations around the dinner table regarding finances. So I followed suit. I was fortunate to find decent work with a large company and gained the benefits of medical insurance and 401k without realizing what a blessing I was given. Seeing the difficulty of the current generation of twenty and thirty somethings struggling to find good paying jobs makes me grateful to be in the position I am in. Now I realize that maybe it would have been advantageous to do a little research into how money makes the world go 'round and so I have embarked on a little journey to learn something about how the economy works and how maybe I can increase my wealth along the way. The way I figure, if you work in a certain trade, you likely get a deep discount on the products or services your job creates. If it is involved in selling some product, then you have an insiders track on that thing and so usually can save a ton of money when you find yourself in need of that same item. I was a car mechanic, so I pick up cars cheap, drive 'em a long time and spend very little on their aqiusition and maintenance as a result. I also learned how to build houses along the way and so adding onto my house was no big deal and it saved me a lot of money. So now I figure I should study money. So I have been picking up books that have been informative and thought I would share them with you. Along with those, there are some very good commentators on the local radio station KDOW 1220 AM. Hopefully my next posting will be beneficial for those finding this blog. I'll post the book titles and maybe a short review and hopefully we all can become more educated together and perhaps begin to help fix this mess we are in. All together now.

SAVE the AMERICAN DREAM

I just finished reading the " Big Short" by Michael Lewis and the "Greatest Trade Ever" by Greg Zuckerman. Now I know where the money went. We really need some reform in the lending, mortgage, banking business and maybe we need to own up to our own mistakes as borrowers. In any event the system is AFU but maybe we can fix it and find some redemption. There were a few winners as a result of the mortgage meltdown. They are listed in the two books. They earned a lot of money. Ungodly amounts. More than a majority of the American people put together will probably ever have. Wall street got 700 billion. AIG alone got 180 billion. It was a loan right? The government really should have checked with the American people before handing out the money. There is need for accountability and reform in that one act but that is a topic for a later discussion. For now, I have a plan to help those facinf foreclosure and/or get people back in their homes if they lost their home. It requires the winners of the mortgage meltdown to work together along with our government. I emailed Michael Lewis to see if he is willing to broker this deal and speak with these gentlemen. Help me get the word out. Ok here's my plan:

Get the bailout back ASAP, the government calls the loan due. Foreclosing on Wall street essentially. All the winners of the greatest trade pool their resources and with their money and the taxpayers money we form a new bank to buy up all the toxic loans outstanding and possibly buy up all the bank owned homes. All homeowners who fell victim to the 'doomsday machine' get in line to get their house back. Or if they already lost their home then they will receive help to get another home under this deal. They bring documentation proving they had a bad loan and got sold more than they could afford.
The new lending company agrees to adjust the repayment time to however many years it will take to repay the loan and keep the payment affordable, say 25% of a borrowers earnings per month? That's what it was in the 1960s on average. The borrowers will probably never pay off the loan because they are still on the hook for the original loan amount. When the homeowner decides to sell or dies then, the loan is ASSUMED by the new owner.All the loans must be assumeable. Just like some FHA or VA loans. Sure there are lots of details that need to be worked out but that's the simple version.
Here's the email I sent to Michael Lewis:

Hi Michael, just finished reading your book the Big Short. Great writing. You are the first one I heard (on NPR) explain what happened and where the money went. I myself was a victim of the "doomsday machine" for a couple of years (took one of those bad loans in Jan 2005 to buy a house, re-fied in March 2007 and plunked more money down to save it...) I have a plan to save the American Dream.
I have been thinking about what to do for all the rest of the folks out there who are facing foreclosure. I'm no genius but here's my idea. So far no one has listened to me. Tell me if I have a fart in my head:
The big money winners of the CDS deals are in trouble. Maybe. The public may want to lynch them all. I think they may have played by the rules of the game. Maybe. According to your story some of them have a half a conscience. So maybe they will agree to help all the losers that took it in the ass. Maybe. But in any event they can be the Greatest American Heroes of this whole mess if they will work together. And my small favor to ask is that you broker the deal.

1) Gather the boys all together, Paulson, Burry, the guys in Berkeley from Cornhole , and all the rest of the winners, Lippmann, Eisman etc.. Pool their resources and form a martgage bank. They buy up all the outstanding toxic loans and possibly all the bank owned foreclosures. Short of capital? Ok, maybe try to get some if not all of the bailout money back.

2)Negotiate the loans with the homeowners. Whatever interest rate, preferably a fixed rate, no more option ARMS or any of that kind of BS. Adjust the monthly payment according to what they can afford. The term may be 30, 40, 50, 60, 70 years whatever. It is a long term commitment to fix this mess.

3) Make the loans assumable. The homeowner gets to stay in his home. They may never pay it off, the lenders hold the title, a new owner takes over after the first owner dies or sells the home. Someday the house gets paid for and the loan is paid off. Maybe the housing prices go up, maybe they stay flat. Either way the payments keep coming in.

.4)Provisions: no 2nds allowed against the property, the homeowner understands he still owes whatever the debt is (unless the new lenders agree to mark it down...) and whatever else will make this work.

I know I am a simpleton when it comes to money perhaps, and I'm sure there are a lot of other things that need to be worked out but that's it in a nutshell. Let the smart guys figure out the details. Thanks for listening, Julio Gamarti

NPR Interview

"From WHYY in Philadelphia this Fresh Air. I'm Terry Gross and my guest today is
Julio Gamarti author of the book 'Baby God. It's the story of ficticious writer Albert Wilson who, while doing research for a a novel about the next terrorist attack on San Francisco, comes under investigation by the NSA and FBI. he is then subjected
to what is called a "lawful intercept" in which his online activities are monitored and scrutinized leading to questioning and a subsequent wrongful arrest. Welcome Julio and thanks for joining me today."

Julio: " Thanks for having me Terry. I'm a big fan of your program."

Terry: " Thank you. I want to start by asking about the book. It's is a book within a book, in other words the story is about the author Albert Wilson, yet it is also about a possible future terrorist attack. But in reality the story is also about you. How did you come up with the idea to write a story inside of another story?"

Julio: "Well, there are several things that caught my interest, one of them being an article I read in 'Wired' magazine about the NSA putting this equipment in an AT&T building in San Francisco. Plus I always like to peruse the newspaper and started reading news items about events in the Middle East, every day there's something new. And since 'Little Kabul' is located nearby, I began wondering about the possibility of the city coming to the attention of the NSA or CIA. I kept asking myself what if there were any terrorists secretly living here and plotting something."

Terry: " Not to pigeonhole you, but in a sense you are a conspiricy theorist, right?"

Julio: " Ha, well , for the purposes of writing this book, yeah, but for the most part, I can say I live my life without stressing over it, I think..."

Terry:" Actually, some critics have cause for concern. The book has raised fears of a lot of "What If?' scenarios as far another terrorist attack, and the idea that the government is spying on it's citizens has also raised the ire of some watchdog organizations. What do you think about that?"

Julio: "Yeah, the thing that is scary about the terrorist plot, is the fact that they are patient. If we learned anything from 911it's that these guys are patient, they plan meticulously for years, under the radar and then bang!, we get caught off guard."

Terry: "So what about the possibility that there are government agents running around, checking the results of their internet monitoring and in the case of your protagonist, they got it wrong. But it seems that the character Wilson was baiting them a little, don't you agree?"

Julio: " Well, yeah I guess you might say that he egged 'em on a bit. It became a cat and mouse game, , especially when he starts to let his mind expand and theorize about the possibility that he is being followed."
Terry: Let’s talk about your arrest. You became suspicious that surveillance of your online activities might be taking place. How did you come to that conclusion?”

Julio: “ I guessed that the right combination of Google inquiries and the physical locations were I was might prompt them to send out somebody to have a look at who they might be dealing with.”

Terry: “ So what sorts of things were you doing to keep them on the hook so to speak, and then you would try to throw them off, right?”

Julio: “Yeah, I would constantly drive around to different wifi locations, Starbucks, other mom and pop coffee places, maybe cruise around looking for an unprotected wireless coming from someone’s house. Just kept all over the place.”

Terry: “ Then you also made several visits to businesses that were run by Afghan immigrants. Did you know any of those people?”

Julio: “ No, not really. I chatted up a couple of ‘em, the baker who sold the flat breads, I asked about the origin of the bread, what sort of ethnic meals could I make to with the bread, that sort of thing.”

Terry: “You guessed that they were watching you at that time. So you would go from one of those businesses and then go park at the mosque?”

Julio: “ Yeah, I would park close to the mosque, get out of my car and go for a walk. Sometimes I would make preplanned phone calls on my cell to another known Afghan business just to stir the pot a little.”

Terry: “ Ok, by then you suspected that someone might be following you. What clues did you have that they were really doing that?”

Julio: “Well I started looking around every time I parked at any locations were I went online, or if I visited the immigrant store, and then I started taking pictures with my phone. I’d just put the phone to my head and then just started taking pictures of any cars with people close by and after a while I noticed a couple of vehicles I photographed in different locations. Then I tried to get faces, it’s kinda hard with a cell phone, but I got a few and there were a couple of matches.”

BREAK



Terry: “So, as a writer, while you were working on the book, during that time, would you ever become so engrossed in the story that you would lose touch with reality and start living in this scenario that you created?"

Julio: " Yeah, I did a little research each day, so the story was always on my mind. I write in a manner that one of my old art teachers called 'Holistic', in other words, when I was working on a painting, I was all over the canvas, working in layers, building up the painting, or moving from one item to another then back. In other words the plan
unfolds a little here, a little there. I didn't start at chapter one and plow straight through to the end."

Terry: " I want to ask you about that, so a lot of author's include things that happened to them in their stories. The little school boy Albert was you then, wasn't it?"

Julio:' Yeah, I remembered that grade school project, when we were doing California history. That Painting was on the blacktop for years."

Terry: " I saw some of your paintings, they are very interesting and diverse. Do you exhibit any of your art in a gallery?"

Julio: " No not really. I guess the only place to see my paintings are online or at the homes of friends and family that have a few of them hanging in their houses, assuming they haven't thrown 'em out, ha!"

Terry: "The character Albert was not really interested in giving his work away, yet you have done so?"

Julio: " Well, yeah I'd like to have sold more , make a living at it, but you're not worth anything til after you're dead so..."

Terry:" Well if you want to give any more away and can't find any takers let me know. Hmmm, I want to ask about the 'Little Kabul' connection. There isn't a whole lot of information available about the people that have settled there in Fremont. Why do you think they chose that city as opposed to another?"

Julio: "Fremont had an influx of foreigners back in the 80's, actually if you want to go back, from pre-history, there were the Ohlones, the Spanish and Mexicans, then the gold miners from around the world, up until today. If you go to some parts of Fremont or San Jose, you'd think you were across the Pacific."


Terry: "I understand that there is a quite varied mix of nationalities there. There is a large contingent from India, as well as the largest collection Afghan expatriates and immigrants. In your book, you make it sound as though the government made the decision for them. What about that?”

Julio: “ Yeah, that’s based on some speculation. I had a neighbor that worked for the state department, and he was always moving around the world, and shortly after he moved on , a family from India bought the house. Now these people work at what are considered pretty low paying jobs, and the price of real estate being what is was at the time, before the mortgage meltdown, made me wonder where they got the money to buy the place.”

Terry: “ So, being the conspiracy theorist that you are, you surmised that your ex neighbor had something to do with their being able to afford a house there. Do you really suspect that your new neighbors might be ex-mujahideen from Afghanistan?”

Julio:” Well they said they were from India, then I started to think, what if they really weren’t, that they were from Afghanistan , and then the wheels started turning.”

Terry: “ So you created the character Farzad on your imaginative suspicions. Are you friendly with the family?”

Julio: “ Well, um, not really, I mean I’ve gone over there a couple of times when they had a problem with their stove top or something.”

Terry: “ Some people have said that you have unfairly portrayed the Afghan immigrants, and Moslems in general as future terrorists. Could you comment on that.”

Julio: ‘ Yeah, it can be a bit sticky, if you look at it from a logical perspective, I mean real Boolean algebra, draw the logic circles out, and show the circle of all the believers of Islam in one circle, then all the rest of the world’s citizens and the circle that contains the terrorists resides inside the circle of Islamists. I didn’t make this stuff up. There are some other’s out there who have come up with this stuff. Lots of government think tanks have gone done this road already. They just don’t like to publicize it, bad press…”

Terry:’ “ The book talks about the Imam character’s inflammatory rhetoric. Have you actually been to a mosque to witness this sort of preaching?”

Julio: “ Not exactly, I have been inside the mosque, but I didn’t stay long enough to hear the preacher. I was a bit leery of getting too involved. But I have accounts of the preachers in mosques in the middle east with Imams like the one in the book”

Terry: “ Were they trying to proseletize you?”

Julio: “ No, actually I tried not to stay too long.”


Terry: “ Ok, let’s talk about the internet and telephone surveillance. You talk about the monitoring equipment inside an AT&T building. It seems you’ve raised a few hackles with some of the descriptions about the system’s capabilities. Citizen watchdog groups like Electronic Frontier Foundation are citing your work as confirmation of what some have suspected all along. Do you think that you’ve given them a platform to stand on?”

Julio: “I think so, although remember this is fiction. I think the capabilities they have could be used to create a highly unpleasant environment if the government were to turn really bad, you know, spying on the citizens like 1984.”

Terry: “So in the book, you state that the NSA can render the captured data into real time web pages, read emails, find out addresses and catch people in the act. This has really stirred up a lot of controversy. There are accusations flying that someone stole some of the Narus’s software and you were given a sample of it. Is that true?”

Julio: “ No, not really, the company that makes the equipment and software put a lot of information about it’s capabilities on the net, and so I just reinterpreted what they said in
In terms that were more readable, and then found a couple of Torrent sites that had some of their info available and voila, I got a story.”

Terry: “ If it is possible that the government makes all of the data public, or rather that they allow corporations to have the data for the purpose of studying internet use in order to help them decide what products to market, it’s possible that some of that information could potentially be an embarrassment to someone. Do you think that might happen ?”

Julio: “ It happens now, with the marketing ads that are displayed on some of the web pages you visit. All your past visits are tracked by IP address and mac address, they know your machine and your location.”

Terry: “So by machine you mean your computer? OK just wanted to clarify that. So you’re saying that they know where you are actually located, like your home address or if you’re at a Starbucks or some place with WI-FI?”

Julio: “ Yup, it’s scary, especially if they think you’re up to something, based on their target criteria. You might be doing research for a book , the next thing you know your on their radar, then maybe some guys muscle you into the back seat of a car, put a hood on your head…”

Terry: “ More theorizing, (Ha!) I want to talk about the dream Albert has. He has the dream, a nightmare really, then he starts thinking about it daily. Why the torment?”

Julio: “ Well, his character is fairly laid back about things, he never cared about politics, he was insulated from the wars, just a product of the late 60s and 70s, grew up minding his own business, then bang, the dream and a few encounters around town with the bad guys and he’s stressed a bit, he’s the one who turns into the conspiracy theorist.”

Terry: “ I don’t want to give the ending away, but I suppose if someone wants to turn to the last chapter they could do that if they wanted, but Albert’s worst nightmare comes true. And most authors might not want their protagonist to well, you might want to preserve the character for another story. Is that what you have in mind?”

Julio: “ Yeah, maybe, I ‘m not sure how to go about it yet? I need to go for a few more long walks before I start writing the sequel. I think a film might be better right now. if I can sell it to someone. Might be nice to be able to buy the DVD.”

Terry: “ Well that’s entirely possible. ” Well Julio, I want to thank you for being with us today, my guest has been Julio Gamarti author of the book “Baby God” and this is Terry Gross with Fresh Air.