Paint Your House

Recently my wife and I decided to paint our home. For us it was really a no brainer. We just moved into our new home in September 2006. We just had a one year warranty inspection and all the settlment cracks and nail pops have been fixed. So we are in no particular hurry since we aren't planning on going anywhere. Doing the painting ourselves will allow us to maximize the earned equity since we are only paying for supplies. So far we've done a bathroom, the office, the sitting room and have started the stairway walls. I guess this puts us at less than 25% complete. This is no small undertaking, but we are finding that it can be a rewarding way to spend time together. If you are considering painting your house or a room yourself there are a few key things that I would recommend. First, consult an interior designer and pick a palate. We are fortunate that one of our best friends is a designer and picked all of our color schemes for each room. I cannot emphasize enough how important this is to the final product. I never knew there were so many considerations to make when picking colors! Second, use premium paints and brushes. We went with Behr paint, which was highly recommended by Consumer Reports. Behr is sold at Home Depot, so it's easy to find. The finish looks great and it is easy to clean. It's also a great value. Third, take the advice of those who know. Everytime I've gone to Home Depot the representatives in the paint department have given me priceless information. If they tell you to use a primer with a particular color selection, then I would suggest you listen to them.
When each room is complete there is a sense of satisfaction that only comes from getting your hands (and most of the rest of my body) dirty. We're looking forward to being finished, but in the meantime we're enjoying working toward our goal. C'mon guys think about it... painting your house equals improving your home, increasing equity, and making your wife happy (except when you paint her arm accidently on purpose).... what's to think about ?

Movie Review: Untraceable

Diane Lane stars in this cyber crime thriller. I came in biased because I hated her so much for cheating on Richard Gere in Unfaithful. Think - Silence of the Lambs meets Dateline: To Catch a Predator. Strange bedfellows I'll admit, but intriguing nonetheless. A killer on the loose, torturing victims, and you can watch live by logging on to the streaming feed. The more people that log on and watch the faster the victim dies. Genious. Plot twists are believable, production values rate a B. Commits the cardinal no-no of having a plot line that goes nowhere, but all-in-all worth seeing. A touch of corny on the ending. I'd give it 3 1/2 kernels of corn out of 5. Wasn't bad for the Valentine's Day dinner and a movie ensemble with the wife. It was a decent compromise situation between Juno and Step It Up 2. If you go see Fool's Gold I will personally come by your house and smack some sense into you. JJ out.

The Bias of Economic Reporting

I regularly watch Kudlow & Company on CNBC. The host, Larry Kudlow, has been involved in economics and politics for decades and his show is a reflection of his experience. What I enjoy the most is his optimistic outlook that is backed up by common sense data and graphics that make sense. In my last post I discussed the alarmist mentality surrounding foreign investments in the U.S., Kudlow pointed out on tonight's show that 25% of our GDP is currently in exports. In my post I'd indicated that foreign investment in our assets isn't a bad thing and that the current trend is actually a part of the natural business cycle. I was pleased to hear Kudlow reinforce that. Kudlow indicated that while the building industries and retail are taking a beating right now.... exports, railroads, and "smokestack" industries are gaining ground. The ebb and flow. Most news sources are discussing the economy as if the sky is falling yet the most dependable and frequently used economic indicators prove otherwise. The current state of the economy is one of stagnation. A product of the economy catching up to the anti-inflationary actions taken by the Fed. Kudlow suggests that the first round of fed cuts late last year are just now affecting the market. If Kudlow (and his panel) are correct, we can expect an economic jump start within the coming months and leading out of the Spring. The bottom line here is that we as consumers should seek multiple sources of information to base our economic decisions. Some news sources present information in a biased manner. At the end of the day it is wise to remember that television news still has a responsibility to be entertaining. Sometimes the effort leads to sensationalism. Kudlow is one of the least sensational (and probably least viewed), but his fact based insight into the economy is reassuring and very informative. BTW, the best book I've read lately that really describes the business cycle is "Mad Money - Sane Investing in an Insane World" by Jim Cramer. Give Kudlow & Company a chance on CNBC at 7pm, you'll enjoy it. I'll end with a Kudlow quote, "Kudlow and Company aims to be right on business, right on America, and right on the Money. We believe that free market capitalism is the best path to prosperity."

Foreign Interest in American Assets

One of my favorite blogs that I read daily is All Financial Matters. Today JLP shares an excerpt from an article by Geoff Colvin in the recent issue of Fortune.

http://allfinancialmatters.com/

I think this is a little bit alarmist, but it displays perfectly the power of compounding. Anyone with a high interest savings account or reinvesting dividends back into stock accounts will agree that over time compounding shortens the distance between you and personal wealth. Same principle applies to the foreign holdings in the U.S. It also shows that the interests we are invested in abroad are not appreciating at the same rate. Is this contibuting to the decline of the strength of the dollar and leading us toward inflation? I think that it is more realistically attributable to the normal ebb and flow of the business cylcle. Even though they are getting slammed right now, stock portfolios heavy in emerging markets have performed exceedingly well over the past 12 months. Before you run for the hills, look for a reversal of that trend. Reversal, not correction (>10% decline). Something else to think about ... why send all of our money overseas when it is still so profitable for us to invest here as well? Those are the things that occurred to me while reading the article.

Get Low

Tonight I went back to the gym. By gym, I mean the "fitness area" of the "community center" in my neighborhood. There are a handfull of machines and some cardio equipment. All I can say is thank God for Lil' Jon and the Eastside Boys because after 20 minutes on the eliptical machine I wanted to throw in the towel. But then it happened...."From the window - to the wall !!" Lil' Jon screaming out across the rooftops. Comin' for to carry me home. I made it to 30 minutes before it felt like my quadriceps were going to blow out the front of my legs. Time to hit the showers, or eat tacos.... I couldn't decide which to do first so I did a drive-by with a water pistol on the local Taco Bell. In a way what Lil' Jon is trying to say is it's okay if the market goes through a correction from time to time. Those in the game for the long haul and who've seen a correction or two aren't bailing out. In fact, they doing their homework and spotting deals on great companies with great balance sheets. Come on in the pool folks, the water is fine. At least that's what occurred to me during those last 10 minutes of cardio.

Steroids in Baseball

Let me go on record as saying that I do not condone the use of anabolic steroids. Being an athlete and gym rat for the majority of my life I have been exposed to their use by teamates and training partners. I witnessed the negative effects on mood and their addictive properties. I guess what I'm saying is that in the world of sports, especially professional athletics, steroids are commonplace. This doesn't make it acceptable and it shouldn't be overlooked. They are illegal after all. I'm having a real tough time understanding how the use of steroids in professional baseball has become an issue requiring the full attention of the United States Congress. Today I read that Roger Clemens former trainer claims to have injected Debbie Clemens (Roger's wife) with anabolic steroids and HGH prior to a 2003 Sports Illustrated photo shoot. Does anyone really care? If the Clemens' want to risk their health and prosecution then they aren't very smart. Surprised? After all, he is "the rocket", not the "rocket scientist". The point is, I don't need Congress to tell me that professional athletes use steroids anymore than I need them to tell me that hippies smoke weed, or crackheads love crack. What I'd like for Congress to do is draft and pass legislation. I'd like them to pass legislation that makes sense and serves the American public not legislation so full of earmarks and pork for their supporters "pet projects" that the term scandalous barely begins to describe it. Here comes the daily cliche.....Congress has "bigger fish to fry". Steroids in baseball is a matter better left to law enforcement officials and Major Leauge Baseball to handle.

Economic Stimulus Plan ?

The plan congress has passed will give an injection of $600 cash to taxpaying individuals and $1200 to married couples. The plan will also temporarily increase conventional loan limits from $417,000 to $729,750 until the end of 2008. For those homeowner's with Jumbo loans this is great news. This will enable loans that are currently in Jumbo status to be refinanced at a lower interest rate. Or will it? Lenders are still hesitant to make residential loans of that size and have enlisted extremely stringent guidelines and underwriting practices in order to offset their risk. The largest obstacle is LTV (loan to value). Since the subprime mess began to heat up it has become impossible to find lenders willing to fund loans in excess of 95% of the home's value. To further complicate matters, even those with equity find themselves between a rock and a hard place (obigatory geological reference) due to decreasing property values. There is a home in my neighborhood that recently appraised for nearly $200,000 less than it did 2 years ago. In that scenario, the homeowner has lost all equity and will not qualify to refinance their jumbo loan into a conforming loan with the increased conventional loan limit. I think there are many people in this situation who purchased homes with little or no money down with Jumbo loans and have since experienced a decrease in their homes value. It will be interesting to see if lenders are forced to loosen up their guidelines in order to reap the windfall of profits from the hundreds of thousands of refinance opportunities to offset the huge losses incurred since the subprime mess began. Stay tuned.