Finally: Operation Home Improvement

After a 6 month hiatus of doing any work on the condo, I broke that streak with a vengeance this weekend. I purchased a new dresser (Art Deco style).

I took a series of measurements to see if the new dresser could fit in the corner of my room, as it stands currently that space is not being used (dead space). The angles of putting a dresser in that space did not work out, so in lieu of angling the new dresser I thought of re orientating the bed room entirely.

When I first moved in the bed room looked like this:

 It was front centered, thus if you were looking in at the bed room, the bed was facing you. As I expand my furniture collection more room was demanded. Since I put in the roller shades a year ago, the two shades in my room are hardly ever opened. So, I decided to place the bed against the window to take advantage of the space, the dress will go under the 'Waiting-Watching-Dream' poster sequence.

(Ignore the cat). The orientation of the room has changed. I'll post full photos once the new dresser is placed.

My lovely GF, Jessica helped me put a 5th coat of paint on the red wall today. It finally looks complete and finished.

Notice the lack of roller streaks. Gaze upon this mere mortals and despair!

Conspiracy Theories

Neil Armstrong died over the weekend from complication related to heart surgery. The first man to walk on the Moon now belongs to the ages.

 

Just 3 weeks ago I got into a minor row with some of my friends over a stupid topic. One of my coworkers at Bank of America was a regular reader of the website ‘Prison Planet’ which promotes a series of strange and odd conspiracy theories. One of the more insidious theories that gets heavy play on Prison Planet is the 9/11 as a ‘False Flag’ attack (a false flag attack is when the Government attacks itself and places the blame on an outsider to consolidate political power: the burning of the Reichstag and placing the blame on Communists by the Nazis is the classic example of a ‘false flag attack’). At any rate, I mentioned that I have no respect for anyone who harbors any suspicions that the Moon landing was faked. One of my friends stated that she ‘could see how and I would not be surprised’ if the Moon landing was faked. Obviously, I took a position that anyone who believed that garbage was beyond dumb which then led to a minor argument about the nature of Truth.

 

Truth is objective and verifiable outside of your own mind. In the case of the moon, the flags, foot prints and the landing craft are easily identified on the Moon. Further, we have video and transmissions from the Moon landing from verified 3^rd parties. But yet, anywhere from 6% to 20% of the American population BELIEVES the moon landings were hoaxes.  That is an unreal percentage of people, and it speaks volumes in American’s lack of faith in humanity.

 

At times humanity is transcendent, humanity built the great pyramids and sent men to the moon. With the proper motivation and tools there is little mankind cannot do. These insane conspiracy theories underscore the deep psychological fear in most people that you are not as smart, strong or gifted as you think. All conspiracy theories are assumed that mankind cannot reach the moon, build the pyramids  or develop writing without the aid of an outside force (like aliens). Humanity can achieve great things, when some of the achievements feel like miracles, many people cannot locate the greatness in themselves that  produced the great event. And so, they invent a sophisticated series of lies to  show that the great achievement is a lie.

 

I have no tolerance for Conspiracy Theories, the truth is knowable, obtainable and logical, to believe otherwise is false.  

 

Gentrification

For the last year or so I’ve been thinking heavily about the phenomenon of gentrification in Los Angeles. Since I bought a condo in an ‘area in transition’ gentrification is major concern for me. Personally, I want the gentrification of the Fashion District to occur rapidly so that the value of my property increases faster than the rate of inflation (property ownership is an inflation hedge in finance). Gentrification raises property values based upon an improvement in the neighborhood’s quality of life; think of the difference between Silverlake and Pico-Union. In the 1990’s both neighborhoods had similar rates of crime, gang violence and property ownership. But 20 years later, Silverlake is considered a desirable neighborhood, while Pico-Union is, well, still gang infested territory. In 20 years the difference between the two neighborhoods is stark. Silverlake gentrified while Pico-Union did not.

 

I don’t know why Silverlake gentrified while Pico-Union did not, all that needs to be known is that one area gentrified while the other did not. The quality of life difference between the two is stunning. If you were lucky enough to buy in Silverlake in the 1990’s the property that you purchased for $100,000 could be worth over $500,000 now. From 1/5/2001 to today the DOW Jones Industrial average is up 71.54%, if you bought in Silverlake the money you put into your property would be up over 500%. This is a HUGE wealth benefit to anyone who purchased cheap in an area that Gentrified.  As you can anticipate, I hope this happens to me. I also hope it happens to other people as well, but, gentrification can be a double edged sword.

 

President Bush once spoke about creating an ‘Ownership Society’ in America, many of the topics he touched on was property ownership. His reasoning (which is sound) is that people who own property tend to be invested in their neighborhoods, thus they take an active interest in the schools, parks, more generally owners improve the quality of life in their neighborhood. As bad elements are priced out of the market that is in the process of gentrifying, many poor long time renters will see their rents increase and they could find themselves pushed out of the market as well. At this point, it should be worth noting that, in the long run, renting is much less economically beneficial than owning property (no equity is being earned by rent, since property is an inflation hedge as long as there is no rent control rent should be keeping pace with property values so you do not get the long term benefit of a long time low rent). As a matter of public policy, the CRA was placed to help low income borrowers buy property. As in my previous post, housing discrimination was once thought to be the root cause and barrier of minorities entering the middle class. The CRA addressed that issue (editorial side: many conservatives wrong blamed Fannie, Freddie and their low income borrower initiatives for our current mortgage crisis; this article completely disassembles that argument http://www.ritholtz.com/blog/2011/11/fannie-freddie-and-the-foreclosure-crisis/ ).

 

A public policy which promotes ownership and conversion of apartment buildings into multi-unit buildings (ie. Condos) with financing options for the people already living there is absolutely required. How that can be obtained without infringing on the rights of the apartment building owner is an open question. I don’t even know if it can be done. I have some thoughts on this issue, however, I imagine that no investor would something so risky (perhaps I will explain my idea in a future post).

 

The flip side to gentrification is the NIMBY movement (not-in-my-back-yard). My favorite story of the year is an activist home owner in Holby Hills who is suing Metro over an Environmental Impact Report regarding a bike lane. A FUCKING BIKE LANE. NIMBY-ism is a huge problem in older established neighborhoods that have no increasing housing stock to oppose any development they feel threatens their property. People have a legal right to due process for  any property taking, but sometimes I think there should be a streamlined process for beneficial development that does not involve the seizing of actual property (the Metro is using an old right of way to construct the light rail to Santa Monica).

Neighborhoods ebb and flow, gentrification is simply part of the process in which cities grow, destroy themselves and rebuild. I can only hope that I can invest in the growth part of that equation and avoid the destruction part.

Poor as a Culture

My girlfriend got me hooked on reading Gawker. It’s an entertaining website that mixes news with some social commentary. My favorite part of this website is the commentators, some websites have a lot of trolls (CNN and Yahoo for example). While other web sites have well thought out commentator with no trolling (The New Republic and Atlantic Cities are really good ones); but I digress…

 

Gawker has been running a series of letters from their readers about their unemployment experiences. To be honest, some of the letters seem far too fantastical to be true, example being an ivy league lawyer who was earning $250,000 a year who now can’t get a job. I don’t know what to think of that, it seems almost impossible to think that someone with an advanced degree and a long career could fall into long term unemployment without the aid of Alcohol or Drug Dependency.  

 

These Gawker unemployment letters frighten me. Unemployment is a scary thing, unemployment coupled with losing everything that you’ve built over the last decade is incomprehensible. Thinking about these articles has provoked another series of thoughts; what does it mean to be poor? In the case of the ivy league lawyer, she’s broke, but, I would venture to say that she is poor.

 

Being poor is a cultural issue. The libertarian noble prize winning economist once stated that being poor is a function of not having enough  money, which is like saying someone is wet because they are covered in water. The Atlantic Cities ran an interesting article about board game from the 1970’s called “Blacks and Whites” (generally, the game was about Housing Policies in the 1970’s known as Red Lining when a certain type of person could not get a mortgage in a certain neighborhood, these neighborhoods were marked in red ink in broker’s offices’), the game had no end, in fact if you chose to be ‘Black’ then you would have no chance to move out of the cycle of poverty.

 

http://www.theatlanticcities.com/housing/2012/08/discrimination-housing-and-board-games/2979/

 

Being poor is a cultural issue, a deep binding culture that is almost impossible to shake off. ‘Black and Whites’ ‘s main issue of housing discrimination was addressed in the mid-1970s with a law called the Equal Credit Opportunity Act which, among other things, banned red lining. Even with the housing discrimination issue fixed, African Americans still have not made great strides toward economic prosperity. Why?

 

Anecdotally, I know of two cases in which men from poor southern back grounds rose to become successful and wealthy. In both cases, they become lawyers; and, most importantly, they struggled to divest themselves of their Southern Accents. Their Southern Accent was a relic and a badge of shame of their poor rural backgrounds. If you are to lift yourself out of poverty, then you must release the symbols of your poverty. In this case, their Southern Accents would be looked down upon at a Northern Ivy League University.   

 

The culture of poverty surrounds us, it’s more than the food purchased with public assistance or rent stabilization checks received by land lords or energy coupons redeemed at gas stations. I’m fairly certain the only way to get out of the cycle of poverty is home ownership and gentrification (not wholesale redevelopment). I’m not sure there’s any other way to break the cycle…

Self Sacrifice and the Pursuit of the Unattainable Dream

We have Olympic fever. The Games are everywhere, previously obscure 'sports' like ping-pong are now news worthy items (North Korea is playing South Korea in the Gold Medal game of ping pong). I loves sports, it's war without the bloodshed, a liberal version of human competition where the winners are gracious and the losers win a piece of silver metal.

I was struck by a story that recently ran about a Chinese diver who was told (after she won a Gold Medal) that her Grandparents had died a year ago and that her mother had been battling breast cancer for the last 7 years. A couple of quick caveats, from the stories that I've read in the media, the diver in question was in a 'State Sanctioned' athlete school where she practiced or worked out for 10 hours a day (China is a fascist-communist government after all). And, from these media reports, it was her father's choice not to inform his daughter of these events. This is an important distinction for me, as it appears it was NOT a government order to keep her ignorant, but rather a conscience choice by her own father. The rest of what I say is based on that assumption.

14 years ago HBO ran a mini-series called 'From the Earth to the Moon.' Simply put, it was about the American space program. One scene stuck out in my mind, in one of the later Apollo missions, an Astronaut returns home to his family after a successful journey to the moon. Little Johnny, the Astronaut's son, causally mentioned that his tonsils were removed 3 years ago. Little Suzy then chimes in to say that her appendix was removed 2 years ago. The Astronaut turns to his wife and said, 'You didn't tell me?!' His wife, says, 'No, it wasn't important' the Astronaut replies, 'thank you.'

I didn't understand that exchange; why wasn't the Astronaut upset that he was left out of his children's life? So I asked my mother what happened. She pointed out that the children's ailments were minor and would have served no other cause than to concern and distract the Astronaut from his mission. So his wife decided to not tell him. The Mission was what was important. Getting to the moon and returning safely was the Mission. Both people, the wife and the Astronaut made sacrifices to achieve that mission.

The ultimate question is an individual one, what is important to you? Are you willing to sacrifice everything, even your life (as the Astronauts of Apollo 11 did) to achieve the mission? I can not judge the choices of the Chinese diver, her family made the sacrifice to help her achieve the mission of winning gold. I think there's a lesson there, sometimes the goal that you try to achieve is more important than the people in your life. It's a harsh lesson, but, sometimes, and rarely, it's a correct lesson.       

Business

I switched jobs again, this time I moved from Penny Mac to Prospect Mortgage in Sherman Oaks. Prospect is much closer to home and the job opportunity is much better than at Penny Mac.

Besides the new job Business is booming. Year of the Water Dragon my friends. It's a very auspicious year.

I just bought a small piece for my bath room, it's a tooth brush holder from the 1940's. I found it at a vintage hardware store on La Brea. Operation Bath Room upgrade is close to fruition, my economic reserve is nearly complete so I can start on the bath room in a month or two. Pictures to be posted soon.

Reflection on 20 years

I meant to get around to posting an article on my thoughts about the 20 year anniversary of the LA Riots, but, work and life interfered with my writing time. Today, I had some free time so I've decided to do the post, it is especially relevant to talk about the riots today as the LA Times just reported that Rodney King was found dead in his home a few hours ago.

I was in the third grade when the riots occurred. My parents were divorced, every other weekend my Dad would pick up me and my sister from Thousand Oaks and take us to Long Beach. Some times, we would take the 101 to the 605 freeway to Long Beach. If you know anything about the geography of Los Angeles, these routes go through some of the areas hardest hit areas of the riots.

For 7 days the city of Los Angeles consumed itself. In 1993, a year after the riots the murder rate in the city was 21.1 per 100,000 this was the height of the crack epidemic. As a point of contrast, the murder rate of the city in 2008 was 9.6 per 100,000 less than half that of 1993.

The riots were an accident of history, they were nothing more than the perfect combination of an aggressive out of touch LAPD, a depressed post cold war economy and an idiot drivers piss poor decision. In 2002 the LA Times ran a 10 year retrospective on the riots. Many of the people interviewed were certain that a riot could happen again. Another 10 years down the road and I don't think that anymore. I live downtown, such a thought to my 3rd grade self would be nearly impossible. The city is on an upward path, I'm glad to be here.