Thirty-three years after Watergate

In June of 1972, five men were arrested breaking into the Democratic National Headquarters at the Watergate office complex in Washington, D.C. They were there to make repairs to electronic bugs they had planted previously.

In the months that followed, Washington Post reporters Bob Woodward and Carl Bernstein would eventually link the breakin to the White House while being fed inside information by a source identified only as "Deepthroat" named for pornstar Linda Lovelace. We now know that Deepthroat's true identity is W. Mark Felt, a high-ranking FBI official in the 70's.

The political dirty tricks of the 1972 election and the coverup in the aftermath would ultimately force Richard M. Nixon to resign the Presidency in the summer of 1974.

Questions: How big was Watergate, really? If it were to occur today, rather than in the early 70's, would it be enough to force a President to resign?

Pajaro Dunes sunset

Our close friends, Pat and Jeff, invited us to their beach condo near Watsonville, CA for some great companionship, food, sun, sand and, OK, maybe just a little wine. A fine way to spend part of our Memorial Day Weekend. Thanks guys!

Sunday evening we stepped out onto the beach to watch the sun go down and I took the opportunity to snap a few pix. I had already clicked off two or three fine sunset photos when Mrs. THC suggested that she might do a better job. I handed over the camera and she took just one photo. It is displayed above. She has a pretty good eye, huh?

Happy Anniversary!

Nineteen years ago, nearly to the minute, Mary walked down the aisle and we said our vows to become Mr. and Mrs. THC. Happy anniversary, dear.

Short your house

What if the U.S. housing market really is a bubble? And what if it is about to take a big nose-dive? What then?

Even though many economists and loads of homeowners agree that today's housing market bears remarkable resemblances to tech stocks five years ago, there's just not much that most folks can do about it. If your exposure to real estate is your own home, you're not likely to sell now just so you might be able to buy a bigger or better one in a couple of years. Where do you live in the meantime? And if you're waiting for prices to fall to buy a home, how do you know where the bottom is? What if a correction never comes and your dream home just keeps getting farther away?

Robert Shiller, a Yale finance professor and author of "Irrational Exuberance" just might have the solution. He is a lead figure at Macro Securities Research.

The New York research group has developed financial instruments--called "MACROs"--–that will be tied to a housing index that tracks property values in certain cities. By purchasing Up MACROs or Down MACROs, investors would be able to place bets on whether a property market is going to keep rising, or whether it's going to fizzle.

In effect, speculators could play the bubble: They could short the City of Angels and go long on the Big Apple, or vice versa. Homeowners in bubbly markets could hedge against a pop. They could stand to gain if the value of their homes go down. If property values keep rising, of course, the homeowners lose on their MACRO investments -- but at least their homes would be worth more.

MACRO has filed plans for the new securities with the Securities and Exchange Commission and hopes to have them begin trading on the American Stock Exchange later this year.

Anyone interested in hedging the value of your house? What markets would you short, betting values will fall and which markets would you go long, betting prices will rise?

Hot weather and barbeque

Memorial Day weekend, the ceremonial start of summer. Since moving to California a few years back, there are two things that I miss about summertime in Kansas City, hot weather and barbeque.

Now I do appreciate the mild temps of the Bay Area most of the year, but in the summertime I crave the kind of weather that gets folks to dust off the sunscreen and shorts. And as Mark Twain said, "The coldest winter I ever spent was one summer in San Francisco." The forecast for San Francisco today is 59 degrees. That's just wrong!

When it comes to barbeque, Bay Area folks don't really get it. Tossing a few burgers on the grill is not "having a barbeque", that's just grilling.

barbeque n 1: meat that has been barbecued or grilled in a highly seasoned sauce.

It's all about the sauce and there's just not a good selection in stores here. Gonna have to get back to K.C. and fill a suitcase.

Anyway, enough of this rant. It's Memorial Day weekend, enjoy! And I hope you have some hot weather and barbeque to help you celebrate.

The housing market--what will kill the boom?

At Berkshire Hathaway's shareholder meeting earlier this month, Warren Buffet commented on the housing market:

People go crazy in economics periodically, in all kinds of ways. Residential housing has different behavioral characteristics, simply because people live there. But when you get prices increasing faster than the underlying costs, sometimes there can be pretty serious consequences.

So much has already been said, written, predicted, speculated and surmised about the possibility of a "bubble" in housing, why not add even more rhetorical kindling to the fire? Here goes.

The most widely held belief has been that higher interest rates would bring about the demise of the boom. But Greenspan's Fed has tripled short-term rates in their last eight meetings and long-term rates have barely budged. So, if mortgages stay cheap, could the bubble still burst?

UCLA economics professor Edward Leamer believes such a scenario is already in the works: a flattening yield curve.

With long-term rates as sluggish as sea cows and Greenspan & Co. relentlessly raising short term rates, the gap between the two has tightened to nearly nothing. When the spread was very wide, banks raked in profits by borrowing at super-low short-term rates and then lending at high long-term rates. When the spread narrows, their margins get pinched, and they have less incentive to lend. Also, they have less extra cash to cover defaults, so they scrutinize new borrowers more carefully.

Fewer borrowers mean fewer buyers, and you don't need a UCLA economics professor to figure out the rest.

There are so many similarities between the housing market of '05 and tech stocks in early 2000. Are we headed for a bust? Is there anything we can do to stop it?

Right on the left coast

From the SF Chronicle:

Thousands of public employees staged the biggest political rallies of the year at the state Capitol and in Los Angeles on Wednesday, charging that Gov. Arnold Schwarzenegger's policy agenda shortchanges schoolchildren and undermines the fabric of California's poor and middle class.

Darren, a Sacramento area teacher was there and has this account of one of his experiences at Right on the Left Coast: Views from a Conservative Teacher. It's disgraceful that off-duty police officers would threaten someone for disagreeing with them politically.

KSU slackers

Along the banks of the Kansas River in Manhattan, home of Kansas State University, is an interesting sight. There, amid the lush green foliage, are the giant white letters "KS". Now, not a rocket scientist myself, but I'm inclined to think that the hillside initials are incomplete. Just where is the "U" that should follow the "S"? Did the artists run out of rocks or white paint? Perhaps the semester ended before they could finish? Or, as my friend Jim at The Shaggy Dog suggests, maybe they're just slackers.

As a graduate of the rival University of Kansas, I like the "slacker" explanation.

Click here for the Google aerial photo.

Thanks, Jim!

Give yourself a big raise

So what do you do, as a California state legislator, when the coffers are $22 billion in the red and the forcast for next year is an additional $5 billion shortfall? You give yourself a raise, of course!

On Monday, an independent state commission granted legislators a 12 percent pay increase, boosting their annual salaries for the first time since 1998. Beginning in December, lawmakers in both houses will see their salaries increase from $99,000 to $110,880 — the highest compensation in the country for state legislators.

Massachusettes arrogance

Back on January 30th, John Kerry promised to sign Form SF 180 to allow the release of his military records during an interview with Tim Russert on "Meet the Press". Well, he's finally signed the form...he just hasn't submitted it to the Navy yet.

From the Boston Globe:

'I have signed it," Kerry said. Then, he added that his staff was ''still going through it" and ''very, very shortly, you will have a chance to see it."

Six months after Kerry's loss to George W. Bush, it feels somewhat gratuitous to point out how hard it can be to get a clear, straight answer from Kerry on this and other matters. But as long as the Massachusetts senator is thinking about another presidential run, the candor gap remains on the table, because he puts it there.

His arrogance and disdain for Americans continues to overwhelm.

Cashing out?

It's quite tempting, when you know that your house could sell for 50-60% more than you paid for it a few short years ago. But what then? If you want to stay in the same city, everything around you has skyrocketed as well.

The California Association of Realtors has released sales figures for March and East Bay prices are way up again.

From the East Bay Business Times:

Alameda County saw its median home price hit $549,500 in March, up from March of last year's price of $441,500. The county's 24.5 percent price increase in a year's time outpaced the state's average of 15.7 percent, according to CAR's figures.

The only way that you can really win in this game is if you're willing to move to a less expensive part of the country. It's getting tempting...

Blogging Islam

The very thought that Americans might be desecrating the Koran created riots and murder while a report last week from Al-Qaida that killing innocent women and children was acceptable in the name of jihad, barely drew notice. It's no wonder confusion abounds. Does Islam really promote violence and hatred or is it just radical groups of Islamic extremists that cause comparisons to Nazism?

Three of my favorite bloggers have been engaged for the last couple of days in a debate over Islam and the ignorance many Americans have about the faith.

The discussion at Bloggledygook started with Taking Islam Seriously and has now migrated to a new post today, Seriously Responding to the Respondents.

Jim, at The Shaggy Dog, expresses his frustration in this post.

Finally, my good friend Vavoom at Tedrow Drive, describes what it is like to be an American Muslim and to feel the hatred and prejudice first hand in this post.

Read all of these posts and the accompanying comments and you are sure to come away with a broader knowledge of the problem and a better understanding of the spectrum of emotions people have. Regardless of your own feelings, I believe this is the most powerful example I've seen of the thoughtful expression and debate blogging can foster.

Clyde for Governor?

What is it about showbiz folk and politics?

Academy Award-winning actor-director Warren Beatty delivered a devastating critique of Arnold Schwarzenegger at a UC Berkeley commencement Saturday, and refused to rule out a Democratic run for governor -- saying that he would "think about it" if Schwarzenegger continues to endorse "a totally unnecessary special election."

And with her political experience, Annette Bening (Beatty's wife) would make a great first lady of California.

I'm an enterpriser

The Cafeteria Catholic links to this quiz developed by the folks at the Pew Research Center that analyzes your political typology. I took the quiz and I'm an Enterpriser.

DEFINING VALUES: Assertive on foreign policy and patriotic; anti-regulation and pro-business; very little support for government help to the poor; strong belief that individuals are responsible for their own well being. Conservative on social issues such as gay marriage, but not much more religious than the nation as a whole. Very satisfied with personal financial situation.

While my values don't match those of the group exactly, it's an interesting exercise. Take the quiz. There are nine typology groups. Which one are you?

(Sorry about the photo, I couldn't resist).

Common sense, part II

On March 19th I posted this about Elisa D. Cooper who was being sued by Kaiser Permanente for publishing patient information on her blog in apparent retaliation for being fired by the health care giant. Late yesterday I received this email from Elisa.

Hi -

I'm the person that's been "squaring off" against
Kaiser.

I did not sell, or attempt to sell, any patient
information on eBay. The reporter fell for an
insinuation Kaiser made in the lawsuit. I pointed out
to the reporter, Henry Lee, and I have complained to
the Chronicle about the error. The same reporter made
several major errors in a subsequent article as well.
They refuse to correct it despite the fact they
supposedly have an "immediate corrections" policy.

Your blog shows how when people read this stuff in a
reputable newspaper like the Chronicle, they just
assume it's true. From my own recent experience, I'm
never going to believe anything I see on the news and
read in the paper again. While you have no cause to
believe me one way or the other, I hope you will keep
your mind open to the idea that some reporters may be
choosing their "hot button issues" in advance, and
they look for the evidence to support that story -
even when that evidence isn't there.

--- Elisa

Today I took some time to read other publications' accounts of the story and learned that it is much more complicated than the San Francisco Chronicle made it appear. She had discovered patient data on a Kaiser website that was not firewall or password protected. She linked to it on her blog in an attempt to show how cavalier Kaiser was being with internet security.

As for trying to sell patient information on eBay, the Chronicle just might have made it up. It wouldn't be the first time.

Good luck with your battle, Elisa.

No swiping

According to this Associated Press story:

JPMorgan Chase & Co. said Thursday it will offer a new credit card that allows users to pay for items by holding the card near a terminal instead of manually swiping it.

As I read this story I was immediately reminded of something I saw while on the elevator in my office building recently. As you get off of the elevator, you have to hold a security card up to a reader to unlock the heavy doors leading out of the elevator foyer. We've all used cards like this and I've often seen women just hold their purses up to the reader. But the other day I saw a man hold his wallet up, only without taking it out of his back pocket. He just turned around and put his butt up to the card reader.

Imagine what life might look like if these new credit cards catch on.

English?

Am I the only one bothered that, here in the United States of America, I have to tell the ATM that I want my instructions in English?

Roth 401(k)

Beginning in January of 2006, employers will have the option to offer employees a Roth 401(k). That is, a 401(k) plan with the features and benefits of Roth IRAs.

Employees would have the option of contributing up to $15,000 per year ($20,000 for those over 50) on an after-tax basis. The kicker, like in a Roth IRA, is that all of your money could be taken out tax-free. For example, let's say you contribute $10,000 to a Roth 401(k) next year and never contribute another dime. We'll assume a 7% annual return and it stays invested until you retire in 30 years. Your account is now worth over $76,000 and you can take it all without paying a dime in income tax--you receive $66,000 that Uncle Sam never gets his mitts on.

In a traditional 401(k) plan, your contributions are not taxed as income when you earn it but it are taxed, along with all earnings, when you take it out. A $10,000 contribution could save you $2,800 (28% tax bracket) today, but, using 7% for 30 years like above, your $76,000 will all be taxed in retirement.

Too much of a good thing? Here are a couple of things to know. Most employers don't know about it and will not likely offer it to employees unless they are aware of an interest--talk to your employer. Also, this is part of a tax act that expires at the end of 2010, so unless Congress extends it, it's gone after five years.

Power outage

Electrical power was lost for much of downtown this afternoon including my office building. I hung around for awhile but, as it turns out, I really can't address many of my responsibilities without a phone, computer or lights to read by. Great excuse to leave early.

There was one elevator running on emergency power but I didn't want to risk being stuck in a dark box if it failed and, being a bit of a fitness nut, I decided to hike the stairs. Twenty-two floors. My legs were a bit wobbly for awhile.

Sicker and sicker

This whole Wendy's chili finger thing just gets more and more bizarre.

The Las Vegas man whose severed fingertip ended up in a cup of Wendy's chili gave his mangled digit to a co-worker to settle a $50 debt -- but had no idea it would be used in an alleged scheme to swindle the fast-food chain, the man's mother said Tuesday.