Friday, August 25, 2006

The Trash is Your Friend

No. That is not an antique photograph. Those are 2 cans of spices that I recently found in a nameless family member's kitchen.

So how old are they?

That's right, the curry powder expired 27 years ago. Since things like spices have long shelf lives (!), I'll bet that it was purchased at least 30 years ago.

Those spices are indicative of what most people will find in their older friends'/family's homes. And every artifact I find rouses the memory of my clutter post.

Contrast 49 cent spice cans from the 1970s with what I just did. Pictured above is a 5.5 year old, 17 inch flatscreen Dell Trinitron monitor. I haven't used it in 2 years and it works fine. I saw it trading on ebay for around $40-$50. I tried to sell mine on Craigslist for only $20. I got nary a response. So I trolled Craigslist and saw people trying to sell similar monitors for $15. I had thought that I was giving it away for a mere $20.

Since I am a multi-thousandaire and value the space in my house more than $15, I posted a new ad the other day.

17 inch Dell Trinitron Monitor - FREE

I tried selling this for $20 a few months ago and got no responses. It is FREE now, you just have to pick it up - otherwise it's going in the trash this week.

I got no responses and watched it get thrown in the garbage truck this morning.

Somehow I don't think my (or your) older friends and relatives could have stomached doing such a thing.

Monday, August 21, 2006

Your House Is Not An Investment

An accomplished real estate investor once told me that,

"A house is like a gold mine on the moon... impossible to harvest."

If a house is an investment, then for many of today's home buyers, it should at least be qualified as a highly leveraged one. I know that over long periods of time homes have appreciated enough to justify a mortgage, and that may offer solace to some, but I can't get over the notion that if you need an 80%-100% mortgage, then common sense seems to be hollering that you can't afford the house you are buying. Would you invest in the stock market with 10-to-1 leverage?

Seriously think about that for a second. If you have to borrow 90% of the cost, consider that maybe the house is out of your budget. What if you don't get paid for 3 months? What about six months? Can you still cover your expenses? Isn't assuming that your income won't fluctuate or stall for 30 years a reckless egotistical gamble?

I know many people that were earning a few hundred grand 15-30 years ago and now work for 40k and 50k. As a self-employed securities trader, my income has always been all over the place so I am used to it. But I fear for some people that I know who have made decent income every year and have recklessly parlayed that presumption into expensive lifestyles. Imagine your career takes a dive, you have to sell your house at a loss, and move into a smaller place perhaps in a less desirable neighborhood. To most people, this would be unthinkable - not to mention psychologically devastating.

Last year I linked to some alarming articles about the high usage of adjustable rate mortgages - particularly in California. Well today, still roughly 25% of mortgages are opting for the adjustable (or interest only) route. Unless these people have a wad of cash in their bank accounts (or their mortgage is small relative to their income), I certify them as insane. I'd say this 25% is a big reason why home prices haven't crashed yet as well. As I mentioned in a recent post,

The worst case scenario is playing out for real estate. Instead of a quick 20-25% correction, the market is just stagnating, staying overbought, and sucking more buyers in at these nosebleed prices. It's most certainly going to make the eventual correction more severe.

Incidentally, my hometown of Newton, Mass heads the Ziprealty Price Reduction Index. They obviously don't have a presence everywhere, but nevertheless, as of this week, 54.3% of Newton homes have reduced their sale price.

Remember I have been tracking for home listings in Newton.

April 26, 2006 704
May 18, 2006 724
June 21, 2006 776
August 15, 2006 685

Why are the listings down after that springtime uptick? Are homes selling? Or are people taking their houses off the market?

Who knows? But regardless, I think it is safe to say that prices are dropping in Boston as well as everywhere else. I am still in Southampton, NY and let's just say that if I had a nickel for every "for sale" sign I drove by, I would likely be able to buy a house on Dune Road in East Hampton.

In the past I have done the math on Rent versus Buy and Invest for my apartment but I would like to extend that a bit. As I said above, there are tons of homes for sale in the Hamptons (because there still is plenty of farmland for development) and always plenty to rent for the summer months. Some quick and dirty math has revealed to me that it's almost always better to rent a house for the summer than to own one - and that is at every price point. I'll spare the details of the analysis but after factoring in lawn care, insurance, pool maintenance, realtor rental fees, the risk of not being fully rented, and the short rental season, I have come to the conclusion that a Hamptons house really is a luxury. Summer renting is far and away the wiser choice (and much less hassle). The same likely applies to your local vacation destination.

Seemingly everything is cheaper to rent. Consider jet-skis. Paying $50 to rent one for 30 minutes may seem like a rip, but do the math on how many times you have to rent one to outspend a jet ski purchase (and remember as well upkeep, storage, and the fact that you'll feel obligated to use it a lot, just to justify the original purchase). Renting, rather than owning, a car is also a mathematical no-brainer for Manhattanites who could spend $4,000-$5,000 a year just on parking.

Almost every house I look at screams "maintenance costs" right back at me. I am so happy renting, not having to worry about leaky pipes, new heating systems, lawn sprinklers, landscaping, getting the roof done, paying an exterminator, paying a 5% real estate commission to move, or worrying where interest rates go. (Also not to go unmentioned is my outright apathy towards local politics. I simply don't have to get involved, I can easily move when my son comes home from kindergarten and starts talking about civil unions.)

Given my druthers, I think I'd rent forever.

Remember, borrowing at 6% to buy a house implies that after the income tax deduction, your home has to appreciate around 4% per annum, JUST TO BREAK EVEN on your "investment". Now that rates are more like 6.5%, you need appreciation a half point higher, ANNUALLY, FOR THE LIFE OF THE MORTGAGE, JUST TO BREAK EVEN. If mortgage rates climb to 8%....never mind.

Another savvy entrepreneur once told me,

"Real estate is the ultimate investment...because it has a yield and is protected for inflation."

Theoretically he seems to be right. But practically, today's yield on real estate, i.e. rental income, is paltry (less than 4%). As for inflation protection, owning real estate is a hedge ONLY against real estate inflation. Owning a house won't help you pay escalating healthcare inflation, college tuition inflation, local tax inflation, and its value will actually decrease with energy cost inflation. Mark my words, the next cold winter's heating bills will decimate real estate in New England.

Speaking of real estate and Massachusetts Morons, look at this rich headline.


Now who would want to halt a "boom", especially in your own town?

This bespeaks of the gross economic illiteracy in Boston. The fact that an elected representative can publicly clamor against the development that has likely made more money for South Bostonians than anything in decades tells you all you need to know about how economically illiterate not only he is, but also his supporting constituents.

Whenever dunderheads talk about the housing market, they bandy about terms like supply, demand, and investment. Allow me to interject a more germane one - valuation.

Mostly valuation is used to talk about stock prices in terms of multiples of earnings. Google is trading around 37 times this year's expected earnings. Its PE ratio is 37.

For financial assets, valuation is the most important price determinant. The example I like to give is this,

Imagine a stock of yours climbed up to $100 per share. Clearly demand was outstripping supply for your stock and the market was pushing its valuation higher. It could stay highly valued for a long time, perhaps even go much higher. But one day, your stock may open at $50. For some reason, slowing earnings, a competitor's innovation, deleterious legislation, a market crash, natural disaster, accounting irregularities, etc. all of a sudden the market decided to value your precious stock at a much lower number.

This may seem like a circuitous, if not over-nuanced, way to simply say that the stock got ripped but bear with me.

Owning shares of a stock gives you nothing more than a sheet of paper. House ownership is nothing but a plot of land and some wood and cement. Unlike gold, these are soft assets whose values really are derivative in nature. The only part of a house that approximates a hard asset is the potential rental income which offers a floor for prices.

As I have said in prior posts, rental yields are less than money market rates. Real estate prices would have to fall near 35% for new real estate investors to be able to cover their cost of capital with rental income and that is with rates at the still benign 6-6.5%. If mortgage rates hit 8%, you'd need a 50% decline in real estate prices for the rental business to become cash flow positive.

Okay enough of my impending doom screed.

The last five years have been a boon for contractors as anyone who has tried to get some house work done cheaply and quickly can readily attest to. In fact I read somewhere that two-thirds of job growth in the last 3 years was in the construction biz (so much for Bush not creating low end jobs). It's been a perfect storm for contractors with the real estate boom, low interest rates, spread of home equity loans, and overall speculative investment. But one of the most favorable variables for them is the new mass of novice homeowners.

Just as real estate agents have been able to slide their "non-negotiable" 6% fees into the back pockets of inexperienced first time sellers, contractors also are in the fortunate position of servicing an entire generation of rookie homeowners who haven't the slightest idea how to manage a contractor.

One simply can't pay a contractor in full upfront. Too many people do this. Pay half upfront and don't pay the other half until well after the work is done and stood the test. Also, definitely have any "handy" friends check out the work.

Though I have many, I'll give just one anecdotal example. Three people I know just put new fences up - and all three got jammed. One just didn't shop around and got bamboozled on the price. The other two had the same little trick pulled on them. A price was agreed upon, the contractor said they would cement the fence posts in, but in both cases the contractor "couldn't" cement them in when the job was actually done. In neither case did the contractor lower the price for a fence that will be uneven in no time. He is under no obligation to "lower" it for you, you must ask him to.

Here is the crux of the econo-illiteracy problem. Most people don't understand the realities of an economic transaction, i.e. that self-interest also has its grip on the person they are paying. Just don't forget that everyone from a cab driver to your financial adviser to the mortician who's going to bury you, is actively trying to separate you from your money.

The lumpen masses think that because their homes have recently appreciated that they are "investments". It reminds me of a common stock market trap. Many times a trader will buy a stock that's dropping - but just to trade a bounce. But what happens all too often is that the beat up stock drops further and the trader decides to hold the position for a while, ergo a "trade" has turned into an "investment". But it is no investment, just a losing trade contorted by ego. It's really depressing to think how much money I have squandered on this familiar story.

So again, since you have to live somewhere, your house is necessarily not an investment - it is a sunk cost and perhaps a liability.

Devil's Advocate - Yeah, but who wants to piss away money on rent?

There's no difference between pissing away money on rent and pissing it away on mortgage interest? At today's prices I'm opting for the one year commitment over the thirty year one.

Right before the Nasdaq peaked in 2000, I was taking a cab at 6am to the train station in Philly. The driver, making small talk, upon hearing that I worked in the market asked me what I thought about Qualcomm (a darling of the tech bubble). If that wasn't a sign of the market top, then I don't know what was. It certainly smelled like the shoeshine boys giving stock tips before the 1929 Crash.

Back in the tech bubble, I couldn't so much as get out of a doctor's office. All the docs wanted to run their stock tips by me. Thirty minutes would run by and I'd interject, "Hey doc, what about my back?"

One guy I knew, an experienced professional trader, asked me if he should buy JDSU because he was getting a tip from a neighbor. I asked him, "What does JDSU do?". He said he didn't know (they are in fiber optics). Now here was a professional thinking about investing in a stock based only a tip and he hadn't even taken 10 seconds to research what the company did. Hindsight crystallizes everything, but the signs of an impending bubble burst were all around.

Six years later, real estate is playing out the same tragic script. Ask people about the relative costs of renting versus buying - they don't know. Ask them how much their mortgage deduction really saves them - they don't know. Ask them when the last real estate bull market ended - they don't know (1988 and it took until 1998 to make a new high). Ask them how much money they should be saving for future repairs like a new roof - they don't know and definitely aren't doing it. I am not exaggerating at all when I say that NOBODY is armed with this basic information. Forget about asking them about the solvency of their town or state - that's way too advanced of a question. States like New Jersey and California are bankrupt now - how do you think they are going to perform in a recession? People and businesses move quickly these days. Is your state or town headed for a tax death spiral (rising taxes, shrinking tax base)? Remember New York City was essentially bankrupt in the 1970s. There will be bumps again, and that is when I will buy.

Just like the last bubble this one is going to end with lots of pain. Soon there will be an army of unemployed mortgage brokers and real estate agents trolling for jobs. They will be the day-traders of five years ago.

And a lot of real estate investments will look awfully like previous ones made in the Munder NetNet Fund.

Sunday, August 13, 2006

Government Schools Suck - By Design

Any self-conscious fool, at least intuitively, knows that public schools are a joke but thankfully we have John Taylor Gatto to explain why.

I found his profound essay, Against School - How public education cripples our kids and why and it really provoked my brain.

Normally I would pull some highlights from his paper but that might deprive the lazy of reading the entire article. Seriously, if you have or are planning one day to have children, you'd be intellectually and parentally irresponsible to not heed Gatto.

In fact, I enjoyed his article so much that I clicked on his site. I found out that not only has Gatto artfully expounded on his theses in a book, but that I could read his entire book on his website for free.

Who would put a book on the net for free?

Well, the guy cares more about America and children than money. That should give you a hint about his probity. I started reading his book (currently on chapter 4) and let me tell you that it is even better than his essay. I am going to buy his book anyway because it is that important. When I am done reading it I will consolidate my thoughts and post a more thorough blog on what I have learned.

Click here to read the book.

Saturday, August 12, 2006

Hamptons Hodgepodge

Most adroit shoppers know that yard sales are often gold mines of cheap goods. Whether it’s antiques, a baby stroller, golf clubs, or an Oriental rug, many a good deal (for the buyer) has been struck on a driveway near you. It almost goes without saying that the shopping cognoscenti all race to the yard sales before everyone else. “You just have to go early”, they say.

So I had to laugh at sign I saw this week in Southampton, New York. It was advertising a flea market that opened at 9am. General admission was $2 but early bird admission, from 7am to 9am, was $20. Hey why not? Price discrimination is a tool at everyone’s disposal. This amounts to nothing more than the flea market operator grabbing a slice of the best deals.

On the subject of the Hamptons, summer playground of the wealthiest people in the world (and multi-thousandaires like me), since so many of my acquaintances are dying to make a visit and check out this part of Long Island, I will give a primer.

First of all, the “Hamptons” is a large geographical area. It encompasses Hampton Bays, West Hampton, Southampton, Bridgehampton, and East Hampton. (I’d include Amagansett and Montauk too). As a big area, there’s an entire range of people out there, from 22 year old Manhattan summer house renters, to the townies that have lived there for generations, to the $50 million estates in East Hampton. There are also tons of people from all over the country that rent a house for a month (anywhere from $6,000 to $200,000 for a summer month). Many times it's for the mother and the children. Maybe Dad takes a full week and drives out or flies up on weekends.

There’s one road that traverses them all. Route 27 moves at a snails pace on busy days and is a veritable parade of contractors, landscapers, and illegal immigrants coming out each morning and then going home each night. There’s so much work to do and so much money to pay for it, all of the smart plumbers, contractors, etc. are out there cleaning up – literally and financially.

Despite the expansive area, the Hamptons is not a vacation destination for everyone. Some of the activities can be very expensive. Restaurants in particular price food at Manhattan levels – but many of them lack NYC quality. There used to be a Thai restaurant called Chinda’s between Southampton and Sag Harbor that I have had the unfortunate experience of dining at. Pad Thai was $18 and it was the worst I’d ever had in my life. I also remember at $15 omelot at a diner that I never revisited. We ordered takeout recently, two pizzas and a side of spinach - $50. Last night I saw $27 fajitas on the menu at the Driver's Seat. Ritzy beach towns everywhere have their share of rip-off restaurants. If you can’t cook or operate a grill, be prepared to spend some dough eating out.

As for bars, about tens year ago I was appalled when I saw the price of beer at The Drift Inn (Hampton Bays) and the Surf Club (Westhampton) …… I was acquainted with paying $5 for a beer in Manhattan, but at these bars, $5 didn’t get you a Heineken or a Guinness draft, it got you a CAN of Miller Lite. As for the swankier places like Jet East in Southampton, don’t be shocked when people that come 30 minutes later get in before you. The bouncer subjectively picks who gets in next. If you go, dress up, bring the best looking girls you know, and don’t forget your wallet. I am not sure what the exact prices are, but it works like this. You don't order by the drink, instead you order a bottle of Absolute or Kettle One for like $300 (it could be more) and they give you the mixers, tonic, juice, etc. on the side.

Speaking of bars, if anyone needs some spare cash, I would highly recommend becoming a gypsy cab driver in the Hamptons. When the bars let out at 4am, there are plenty of drunk kids in need of transport home. You buy a van or Cadillac, pick up some drunk girls and charge them $150 for a 20 minute cab ride home. Believe me, they can and will pay whatever you ask of them. Drunk guys pay as well.

As to the politics out on the so-called East here for a hint.

Now it's not like California, but look at some of the whackiness I found in the local paper.

An ad for Organic Cleaning, another for Organic Poison Ivy Removal, and an ad for Personal iPod Consultation - which is clearly for those old Luddites with the groupthink gene. Hey fossils, if you can't figure out an iPod, then you probably shouldn't have one.

All mockery aside, I am all for the proprietors of these businesses. I have nothing but the utmost respect for capitalists that separate rich fools from their money.

The paper also had this inane listing on the Kid Kalendar.

LEARNING ABOUT MARINE CONSERVATION - 8/13 - 9-10:30am. Patricia Paladines will use English and Spanish to talk about life that inhabits the oceans, encouraging multi-cultural discussion of ocean conservation. The group will then make a papier machee sea turtle and prepare to send as a greeting to the children of the sister church in Havana, Cuba. There will also be jelly fish cupcakes, sea turtle veggie munchies, and green algae tea for refreshments. At the First Presbyterian Church of East Moriches, 389 Montauk Hwy. 631-878-4175.

A "multi-cultural discussion of ocean conservation"???????

And how do you get a turtle into a "veggie munchie"?

Devil's Advocate - It's probably shaped like a turtle, but still made of vegetables...

Well in that case, the kids will still be eating something that looks like an animal. Seem to be slipperly slope, no?

Someone asked me the other day if I was a vegetarian. My response,

C-Nut - No. But many of the animals that I eat are...

Here's another good one.

If God didn't want man to eat animals....then why did he make them out of meat?

Back to Dan's Papers, the Hamptons' local paper.

A few years ago, I was skimming the classified section and came upon an ad something like this,

Two young professional women from Manhattan willing to house sit in the Hamptons on weekends....

So I picked up my cell phone and called the number provided.

ProfessionalWoman - Hello.

CaptiousNut - Hi, I am calling about your ad in Dan's Papers.

ProfessionalWoman - Yes.

CaptiousNut - I have a rather large house in East Hampton but I am going to be away this summer. I don't want to rent it out but would like someone to watch over the property. Is this the type of service you'd be willing to provide?

ProfessionalWoman - Yes. (probably getting excited)

CaptiousNut - My house is on Dune Road. Do you know where that is?

ProfessionalWoman - Yes. (probably jumping up and down)

CaptiousNut - So let me get this straight. You'd be willing to come out and house sit my beach house each weekend. How much would I have to pay you?

ProfessionalWoman - Well. Uh,....


It was so funny. The other passengers in the car at the time of my call, my future wife and future mother-in-law, were in such hysterics that we almost had to pull off the Long Island Expressway.

Here's what "Dune Road" looks like,

It's a sandbar on the ocean - with no starter homes. That house pictured above is known as "The Castle". I've heard that it has shark tanks and 27 bathrooms.

What I absolutely love about the Hamptons is the sheer beauty. There are so many farms, mansions, deer, and water all around. The Shinnecock and Peconic Bays are almost as stunning as the ocean. I have to say that, by far, the southern shore of Long Island has the most gorgeous beaches I have seen. For one thing, the beaches don't end in either direction. You could walk forever. All you will see is a few people and bold mansions every few hundred yards (perhaps some topless women to boot!). I generally go to a beach in Bridgehampton that only has about 20 parking spots. You either have to get dropped off or get in line and wait for someone to leave - which could be a while if you go on a weekend. The Southampton beach does have a parking lot, but even that isn't very big, it fills early up as well, and it costs $30 to park. As far as I am concerned, that is a very cheap price for spending hours in such a spectacular setting. There are no boardwalks, no funnel cakes, and no blaring salsa music - Robert Moses would be at home.

What the heck is a "Justice Center"???

Anyway, after enduring 20+ inches of rain in April/May up in Boston, the weather here has been a pure godsend.

In 4.5 weeks, it hasn't rained once.

Thursday, August 10, 2006

The Future of Video Media Has Arrived

Do you know what YouTube is?

Most people do now and I can tell by the increasing numbers of hyperlinks to it that are showing up in my inbox.

Essentially it's a free video hosting website. Users upload video clips, YouTube hosts them their servers, and organizes them - allowing tags, comments, ranking metrics, and searching functionality.

Here, an example transcends all literal description. Below is the first clip I saw from YouTube. It's just a photo montage some Georgia girl made for her boyfriend set to Keith Urban's "Making Memories Of Us" - nothing fancy. Click on the video.

As I type this, that video has been viewed over 200,000 times which blew me (and I am sure its author "Holley") away. These videos are getting very easy to make. She used Pinnacle Studio. One just throws some pics together, adds music, and uses the video transitions from the software. Everyone is doing this now. I just made a similar video for my wife using Microsoft Movie Maker (which came with my version of Windows XP) - but instead I used Kenny Rogers' "Through The Years". Sorry, it's on my son's site - not YouTube.

Everything imaginable is on YouTube except porn and gross vulgarity. Kids dancing to music, funny clips from The Comedy Channel, news clips, funny commercials,......

Obviously, there are few ads on the site thus far and YouTube must spend a ton of money on servers and web hosting to be able to handle all of the videos people keep uploading. Whoever owns it must be trying to build up the critical mass even more before selling or partnering out (think CraigsList).

Where is all of this content coming from?

Like the example above, it's all user generated. If a clip is particularly funny, entertaining, shocking, or clever, the virtual word spreads virally and there's no limit to how many people will eventually view it.

This is not just kids dancing to music. I did a google video search on "golf" and found clips of golf tips - and these clips were really actually cleverly disguised ads for golf schools i.e. info-mercials.

Who would sit at home and voluntarily watch commercials? Well that is a dumb question in 2006. Consider that MTV is all commercials. The videos are just ads for the albums.

Back in probably the 1960s, when Coca-Cola first put its logo on a red t-shirt, critics blathered,

"Now who is dumb enough to buy a Coke shirt and pay them to advertise their product?"

Well, if it's a sharp looking and reasonably priced shirt, people will buy it no matter what. And they did.

A lot of the video content on the internet is ripped from television. This is done by,

1) Getting a DVR (Tivo).
2) Getting a FireWire card and cable for your computer.
3) Plugging it into the back of your DVR.
4) Grabbing some free ripping software off the net.

I tried this recently but it didn't work. I think I bought too cheap of a firewire card. Hopefully I will figure it out soon. Too many times I see something on tv and think, "Now, that is blog material". Plus it would be better to put my fisking of Bill O'Reilly side-by-side with video clips of him.

But the impact of pervasive file sharing and cheaply generated user content will be as revolutionary as the advent of the radio. The current TV pipe is just too narrow to satisfy the appetite of media consumers who are also tired of commercials and $60 cable bills. I can't find the link but I read recently that teens are spending twice as much time on the internet as they do watching television now. Sure a lot of it is instant messaging but they are also big consumers of YouTube and the like.

I have been following YouTube for a bit now but one clip I saw really got me thinking. It was a clip on a Boston Celtics blog (I am a huge C's fan) of highlights from a recent summer league game. Now summer league games are barely on television but someone was able to tape the game and put the highlights together. Then they posted it on YouTube. Who needs SportsCenter? What's fascinating about this is that diehard Celtic fans all over the globe were able to see obscure content that technology (and economics) would never before have permitted.

Consider that hour-long evolution lecture video that I linked to in my last post. Very soon, the net will be littered with educational clips. Perhaps some dynamic Calculus teacher will record and publish a year's worth of their lectures? Home schooled kids will be able to sit at home and learn limits, differentiation, and integration from their homes AND at zero cost. Forget "perhaps", that WILL happen, many times over, and on every conceivable subject.

The internet stock bubble may be long over, but the net's impact on every facet of society is just getting going.

Okay, I have been emailed this clip three times already. It's a parody of rap videos - only with white "WASPS" to drive home the point. Having never seen a rap video, my mother-in-law only got half of the joke - thinking it just a mockery of the blue-blooded. At first I didn't think it was that funny, but subsequent views got me laughing harder.

What do I know? It's been viewed a mere 400,000 times in its first week on YouTube.

Here's one of the links I couldn't find earlier.

Study: Only One in Four Teens Can Name Broadcast Networks

Wednesday, August 09, 2006

Every Generation Blames the One Before

As a new parent, I'm spending more time around families socially these days and noticing things that could never penetrate my old bachelor tunnel vision. For instance, I take my son to a nearby school playground in Brookline and am appalled at how many lunch boxes, mittens, jackets, and backpacks get left behind on the schoolyard each day. My gut reaction for a while was "stupid rich kids". But that has evolved to "stupid rich parents who don't teach their kids to value anything". How can I blame 7-12 year old kids for anything? Shouldn't a parent notice that their kid came home from school without the coat they wore in the morning?

This was by no means a situation-specific epiphany. As I alluded to above, my burgeoning experiences with other parents has opened my eyes to pervasive parental incompetence.

I laughed really hard the other day at a Drudge headline of "Israel on Time Out" - or something to that effect that obviously was a story on the 48 hour air raid break the Israelis gave Lebanon. Nowadays kids don't even get punished; they are put on "Time Out". Apparently life is one big game with 20 second, full, and "TV" timeouts. Heck, let's just grant the poor Hezbollah terrorists a "time out" - anything else would be crudely judgmental.

Everyone knows a government school teacher and has likely heard their incessant complaints about the students' parents. It used to be when little Billy sassed his teacher; his parents would clean his clock (Billy's, that is). For the last few decades however, Billy's parents have rushed in and defended their son against every indictment, notwithstanding evidence and fact. In the convoluted world of Baby Boomer induced logic, an aspersion cast at the child is more importantly, a de facto aspersion towards his parents as well.

Sometimes, for brief nanoseconds, I wish I had a job that gave me more Moron blog material. For example a friend of mine teaches fifth grade reading on Long Island and I just can't believe the stories she tells me. For instance, her class hands out some bullcrap Citizen of the Month award. The mother of one little girl who was yet to win the award came into school to complain. She was thoroughly pissed that her little "Sally" hadn't won the award despite her stellar grades. The teacher tried to explain that it was a "non-academic" award but it 'twas to no avail. Sally's mother righteously demanded to know the grades of the most recent three winners of the award. The teacher calmly explained that she couldn't discuss other kids' grades and said maybe she should go complain to the principal. Sally's mother was actually delighted and enthused that she could take this frivolity up the chain of command.

Let's take a Time Out here. If I were the teacher I would have laughed so hard in this woman's face. I would have mocked her with all my might - as she clearly deserved. Remember, this is all over some STUPID MEANINGLESS AWARD IN FIFTH GRADE.

My teacher friend also told me that many parents demand that she,

"...not correct my child because it's bad for their self-esteem."

That reminds me of these asinine parents who won't say "no" to their kid. This is hardly a unique cavil of mine. Patricia Dalton wrote in the Washington Post,

I've talked to many parents who are so influenced by psychological theories about child rearing that they disregard common sense. Some are critical of the way they themselves were raised, and are searching for another model to guide them. Then there's the romantic, New-Age view: Children come into the world uncorrupted, and therefore are best raised using principles of noninterference. From this viewpoint, "no" is a dirty word, children should be given choices and provided with explanations; punishment and adverse situations should be avoided as much as possible because they might harm the child's fragile self-esteem. There is an unspoken assumption that a child who feels good will never need to behave badly.

Read that whole article. I think she really hit the nail on the head by saying that these incompetent parents opt for "theory" over "common sense". And as I explained in the comments of my last post, these parents have the psychological baggage of guilt leading them astray. Remember, Morons are not necessarily or categorically dumb, but whether the issue is "global warming", taxes, or disciplining children, otherwise clear heads falter. My only addendum to Miss Dalton's piece would be that many parents can't use common sense as a guide for the simple reason that they have none themselves.

My teacher friend gave me a few more nuggets.

She said that her school has a "nutrition committee" to monitor "obesity". This is a hardly a new topic for my blog. From a prior post,

I remember being screened for scoliosis, lice, and cavities in elementary school. But today in Pennsylvania they may send a kid home with a note informing his parents that he is hunchbacked, bug infested, has rotten teeth, AND is FAT. That is right, public schools there are now "screening" the brats for obesity.

Okay, this so-called nutrition committee has banned the cupcake birthday parties that we all grew up with. Remember when it was your birthday, your mom baked and frosted 35 cupcakes for you to distribute to your classmates? Well due to the exploding obesity epidemic, more than a few schools have ended this tradition. What's wrong with a cupcake here and there? Well, my teacher friend said it's chaos with 35 kids' b-days crammed into a 9 month school year - making it one per week. Yeah, the kids with summer birthdays all bring in cupcakes as well, lest they be left out and suffer another jarring blow to their self-esteem.

The nutrition committee has decreed that only one day per month are birthdays to be celebrated. No longer do the kids get their own day, instead they have to share it with the entire month's celebrants, and here's the kicker - ONLY HEALTHY SNACKS ARE ALLOWED.

As I said in the past, soda, Doritos, and cupcakes are probably 1,000th in the hierarchy of government school problems but that isn't slowing down the Obesity Police in your local schools.

It almost goes without saying that the Obesity Police are flexing their muscles in schools all over the country. A local dingbat pol here in Cambridge, Massachusetts tried to actually ban the FlufferNutter sandwich from government school cafeterias. He was roundly (and deservedly) mocked all over the country. People even started mailing him jars of Fluff.

Okay, say they ban all tasty food from cafeterias.... are they going to start searching lunchboxes and lockers for Twinkie contraband? Will they limit what kids can brownbag in?

Enough with this school lunch Fluff. I'll end it by saying that when it comes to school lunches, I am staunchly pro-choice.

I have so much more to say on parental incompetence, government schools, and the Obesity Police that I am going to have to leave it for future posts.

I want to apologize (yet again) for the lack of posting. I happen to be mired in the Hamptons this summer as we are taking full advantage of my wife's maternity leave. I lugged my computer down and am still trading up a storm (these days in the futures markets: gold, silver, oil, natural gas, and Nasdaq futures) but most of my free time is expended at the beach or in the pool.

I have also been reading quite a bit these days - almost all modern history books. I would say that it's completely impossible to hold strong intelligible opinions of the issues of the day without a thorough understanding of relevant context. The salient example du jour is the Israeli/Hezbollah fighting in Lebanon. Any Moron calling for a ceasefire or "peace talks" would be wise to look at the empirical history of such suggestions. (Hint: that has never worked, ever.)

I remember reading my high school American history book and littered throughout the text were non sequitur paragraphs with constant updates on the roles that Native Americans, blacks, and women played in the chronicled events. Usually it went like this,

...And Native Americans, women, and blacks didn't participate, get a vote or a say in [fill in this blank].

While on the subject, did you hear that the California Legislature passed a resolution last week,

... that since women and minorities weren't present at the writing of the US Constitution....they've declared the Constitution, "un-Constitutional"?

By the way, that was a joke - but who would really be surprised if it wasn't?

The older, wiser, and more well-read I get, the more I realize how much complete BS has been propagated and dissembled as "fact", "education", or "news". For instance, take the theory of evolution, a subject that quite frankly I have never thought about since my freshman year of high school. Even then it was only a chapter in a book whose bullet points had to dwell in my short-term memory only until the test. But one thing I did remember is the white moth/black moth study that proved the theory of evolution. Perhaps some of my young readers remember this from school as well. Here's the problem,


Now frauds are perpetrated in every field, so why am I so mad?

Because my textbook was written long after the fraud was exposed. In other words, the author had his story and he was sticking to it. The publisher didn't care about factual accuracy. The school board didn't care. Your teacher likely didn't care either. Now bear in mind that most states have laws demanding factual accuracy in school textbooks.

I was intending to provide two examples of fallacies from my education - the moth evolution fraud and the gross mischaracterization of Senator Joseph McCarthy - but some googling research has opened up Pandora's Box on this subject.

Here is an hour-long video lecture on the lies and utter falsehoods propagated by scientists, particularly on evolution theory but also touching upon geology and a few other areas. I absolutely dare you evolution theory subscribers to watch it (though I am quite confident you won't). Some Morons have already labeled the video under "crap" and "lunatic".

Did you know that there is no way the Colorado River carved the Grand Canyon?

Yet the entire scientific world bleats that it was carved over millions of years by said river?

Why would people have to lie about the origin of a canyon?

Really, find the time to watch that video.

The best part about the video is when the scientist tells the story about bringing his daughter to a museum. Looking at a diagram of the earth's rock layers, the guide pointed to one and claimed it was 70 million years old, the girl asked the museum guide how its age was known. He said it was a good question and answered that they could tell the age of the rock layer by the age of the fossils found in them.

Next they went over to a dinosaur fossil. It too was described as, say 100 million years old. The curious girl again asked how they could tell the age of the dinosaur fossil. The unconscious museum idiot again said "good question" and explained that they can date a fossil by the age of the rock formation that it is found in.

"Whoa, isn't that circular reasoning?", the young girl asked.

After all, he used the fossils to date the rock and then he used the rock to date the fossil. Circular Reasoning couldn't be a more obvious Moron tactic but it's got to hurt when pointed out by a little girl.

One last thing on evolution theory (for the time being), remember that "survival of the fittest" is a tautology.

Q: Why did these species survive?
A: Because they were the fittest.

Q: How do you know they were the fittest?
A: Because they survived.

But my favorite Moron tautology remains,

"rich people have more money..."

The black moth fraud doesn't itself disprove the theory of evolution anymore than "Enron" disproves capitalism as a viable economic model. (Though most other "proof" of evolution has imploded as well - e.g. the Piltdown Man was another complete hoax.)

Back to the more general subject of textbooks. I am hoping that in the future, those politically correct non sequiturs about women and minorities are replaced by addendums more along these lines.

Yes. Joseph McCarthy accused some Americans of being covert Soviet agents. But he was dead right. For over 50 years, educators and media gatekeepers suppressed, distorted, and lied about what transpired. Consequently, the public, has been recklessly ignorant of a vital period of American history.

The media whitewashing remains a huge untold and untaught part of American history.

Everyone knows that history is written by the "victors". Winston Churchill himself even said,

"History will be kind to me, for I intend to write it."

In short, less government involvement in education would remove a lot of the ignorance-inducing text books as ideologues will have no leverage to force them upon the privately educated and the home schooled. And heck, the kids may actually learn something.

Consider this,

According to a 2000 American Council of Trustees and Alumni study, "Losing America's Memory: Historical Illiteracy in the 21st Century," not one of the top 50 colleges and universities today requires American history of its graduates.

Believe me, American History is not dismissed at the collegiate level because the kids master it in high school.

Most people know what "McCarthyism" is, or is supposed to be, but hardly anyone knows about the Venona Papers which, despite the obvious waffling from that Wikipedia link, clearly corroborate the almost entirely forgotten and obfuscated point,

That in the 1940s and 1950s, Communists were in high US government positions. And these weren't just innocuous ideologues who thought the rich should be taxed to the hilt, they were actively collaborating with the Soviet Union.

Joe McCarthy didn't want Communist sympathizers jailed, burned at the stake (The Crucible), stamped with pink C's, or deported. He just didn't think they should be working for the government and handling sensitive information.

So what's the really radical position? The converse? An apathy towards the allegiances of government workers privy to, say the Manhattan Project?

That Wikipedia link on the Venona Papers is borderline pathetic. Towards the end of it, they talk about Julius and Ethel Rosenberg and how,

Venona has added significant information to the case of Julius and Ethel Rosenberg, making it clear that Julius was guilty of espionage and that Ethel was an accessory, although their contributions to Soviet nuclear espionage were not as vital as was alleged at the time. The information Julius passed to the Soviets related to the proximity fuze, or detonation device, not the actual process of nuclear fission.

Now we are splitting hairs here. Saying that Julius only passed the Soviets info on the detonation device is tantamount to arguing that Bin Laden only killed 2,900 Americans on 9/11 instead of 3,000. What's the point really?

I wasn't alive back then, so forgive my forward suggestion that maybe he shouldn't have been passing anything to Soviet agents. Furthermore, I posit that academics' and media organs' failure to accurately report on Cold War espionage has been at least a gross injustice to the American public and perhaps treasonous itself.

In summary, you may not think you've been influenced by or even retained anything from your 12 year sentence in government schools, but the stuff you weren't taught is actually more important than the deliberate distortions they did throw at you. This process of relearning science and history in which I am amidst, is in no way entertaining. If anything it gets me very angry and invokes that expression, "if you aren't pissed off, then you aren't paying attention."

Like more than a few parents, I want to give my kids more than I had growing up. Not to say that I was deprived or abused, outside of the canned lima beans and the different behavioral standards for my sisters (sorry Mom, therapy can only exorcise so much), but I want my children to have far superior educational experiences than I had, among other improvements. The more I reflect on my own schooling, the more deficiencies I see. There really is no mystery as to why home schooling is gaining momentum all over the nation.

I contend that today's children are comprehensively coddled by society - to everyone's detriment.

Consider that in the last 100 years we have gone from a country that sent nine year olds to work in coal mines to one today where 22 year olds won't take out the trash. Americans, not so long ago, used to get married at age 17. Today, even a most perceptive individual wouldn't be able to tell if that grey, balding man pushing a stroller in Brooklyn Heights is the infant's father or the grandfather. I in no way consider myself a young husband or young father. But at 32 years old, everywhere I go around Boston the parents of similarly aged children are seemingly all 5-15 years older than my wife and me.

The coddling starts with government school. Since parents don't directly pay for schooling, they have very little control over the quality of their children's education. Big Education cares more about protecting their monopoly and playing politics than imparting practical knowledge to its captive students.

School vouchers would be a marginal improvement BUT not a permanent or ideal solution. Sure it will introduce much needed competition amongst abutting school districts. Competition is ALWAYS beneficial - even if not many students switch schools, it will light a fire under most schools to get their act together somewhat.

But vouchers likely won't help lower the cost of schooling. Nationwide vouchers would just recreate Medicare for schooling - let's call it "Educare". After all, patients can pick and choose their doctors and healthcare facilities but medical cost inflation remains largely out of control thanks to Medicare making government the largest buyer. Vouchers will slowly increase in magnitude and when they start to dwarf the out-of-pocket parental tuition contribution, education price inflation will spiral up again.

Don't like my Educare analogy? Well look at college tuitions. There already is a de facto voucher system for higher ed, yet college kids still don't learn anything AND their parents pay through the nose for the privilege of donning those rear windshield stickers.

It'd be one thing if college was expensive but the kids graduated with marketable skills. However, today college is costing $160,000 or more yet kids who go straight into plumbing, landscaping, or police work are out-earning the English majors from Dartmouth. Forget those studies that "prove" college grads out-earn others by wide margins over their lifetimes. That's just educrat propaganda not to mention completely backward looking sophistry. In the past, college was never so expensive nor was it such a joke academically.

(Pictured above: Locust Walk at my alma mater the University of Pennsylvania, perhaps the most beautiful urban campus in America.)

Here's a glimpse into the future of college education. Forbes profiles Neumont University,

Physically and philosophically, there's no confusing Neumont with a traditional university. It is housed in a glass-and-steel reflective office building. Students live in nearby apartments - no campus quad, football games, frat houses or keg parties.

Doxey aims foremost to please employers - not students, not parents, and certainly not the educational establishment. Produce what business needs, he figures, and graduates will win good jobs, which in turn will attract more paying students.

He's onto something. The school's first batch of 27 graduates this past spring all had jobs waiting, with an average starting salary of $61,000 - some 20% more than the average computer science grad and 50% more than DeVry University graduates' starting pay. After a year Neumont's graduates should be able to command $70,000 - $90,000, predicts Joshua Steimle, chief executive of Salt Lake City Web design firm MWI, which hired two grads.

The connection to industry goes beyond job placements. Most of Neumont's profs were recruited from corporations.

At elite liberal arts colleges, the profs disdain practical skills and pontificate about theoretical topics suited to their academic journals. Not here. At Neumont students spend only 30% of their time on theory and 70% learning the newest technology, mostly working in groups on projects. That's the way complex software is written today, in groups.

Neumont's tuition last year was $28,000. Earning the money described above makes Neumont seem like a bargain compared to spending almost $45,000 per year at a school like Boston College and having to scramble for a job upon graduation. A few years ago, while my cousin was in medical school he moaned incessantly about the 250k he'd owe when done. At least he was getting a six-figured secure job for life. Today undergraduate Philosophy majors from Holy Cross will be out 160k, so $250,000 in the hole doesn't look so bad from where I am sitting.

I want to repeat the most important sentence from that link,

Doxey aims foremost to please employers - not students, not parents, and certainly not the educational establishment.

Preparing kids for the real world.....what an earth shattering, profound notion!!!

Let me try to tie some of this hodgepodge together.

Consider embryonic stem cells. Polls today show that around 60% of Americans are in favor of government funding of embryonic stem cell research. Of course those polled weren't vetted to see if they actually understood the slightest about stem cells. And I doubt these polls allowed for respondents to inveigh against government investment in research that the private sector is well-equipped to fund. Anyway, the potential of embryonic stem cell research (not to be conflated with adult stem cells) is pure science fiction at this point. Furthermore, "groundbreaking" studies, used to push the embryonic stem cell prop-agenda have been outed as frauds.

Michael Fumento says it best in an attack on Science magazine, which had to retract some of its ESC cheerleading. In a round indictment of what he calls PsuedoScience magazine, Fumento concludes,

The journal wants to flood unpromising ESC research with taxpayer dollars because private investors know just how very unpromising it is.

Let's see...Fraudulent studies, championed by scientists, that reek of agenda-driven politics....does that remind anyone of the Piltdown Man or the Black Moth experiment?

A month or so ago, I clicked on a Drudge link about how Al Gore and his "Let's not burn oil and fry the Earth" entourage drove a mere 500 meters from one place to another at the Cannes Film Festival (instead of walking). First of all, it was a Reuters news story - that is no longer listed on their server. What I mean is, Drudge didn't write the story - Reuters did. But that point was lost on the Drudge haters and they quickly said that the Gore story was false and accused Drudge of a "smear".

The green blogosphere exploded with vitriol towards Drudge, as if he has the ability to confirm every story he links too. If the story was false, their anger should have been aimed at Reuters. Since Reuters is a green (Commi and terrorist) friendly organization they went after a preferred bogeyman in Drudge. Anyway, I found some lengthy and active blog thread that was discussing the entire controversy and was very surprised to find in the comments, a bunch of homosexual epithets hurled at Drudge from what one can safely assume were liberals/progressives. The most common bleat was,

"Drudge likes fudge..."

Now I had heard once before a rumor that Matt Drudge was gay. But how can the same side that trumpets "gay marriage" and routinely colors its opponents as "homophobic" logically also hold gayness as a pejorative trait. Oh, never mind, hypocrisy scorekeeping gets boring after a while.

Now the other day, a new website called was launched. See it for yourself. It's sponsored by the Democratic Senatorial campaign and endeavors to mock the Drudge Report with another less than subtle swipe at Matt's alleged homosexuality.

How does this tie in?

Well let's go back to so-called McCarthism. It may surprise the historically illiterate that the smearing of Communist whistleblowers McCarthy, Chambers, Jay Edgar Hoover, etc. all accused them of being homosexuals ("queer").

History, regardless of who writes it, still tends to repeat itself.