Saturday, December 31, 2011

Buses are another matter

From Matt Turner:

First, two commonly suggested responses to traffic congestion—expansions of the road and public transit network—do not appear to have their desired effect:  road and public transit expansions should not be expected to reduce congestion.  Second, traffic levels do not help to predict which cities build roads. Therefore, new roads allocated to metropolitan areas on the basis of current rules are probably not built where they are most needed, which suggests that more careful reviews of highway expansion projects be required. Third, reductions in travel time caused by an average highway expansion are not sufficient to justify the expense of such an expansion. Whether or not other benefits of these expansions may justify their expense remains unresolved. In any case, expansions of the bus network are more likely to pass a cost–benefit test than expansions of the highway network

No wonder he can't understand benefit cost analysis.

In his advocacy for California High Speed Rail, Will Doig can't even get the population of California right.    He says during the century, the population will more than double from 25 million to 60 million.  Well, at the beginning of this century, the census population was around 34 million.

Of course, you can find this out in thousands of places.  He might start here--at the Census web site.  But of course, it is a lot easier just to make stuff up, which is something that rail advocates enjoy doing.  They are about as reliable as the intelligent design people--just cuddlier and not as dangerous.

Choice words from William Black (h/t Rik Osmer)

He writes:

If one had to pick one person in the private sector most responsible for causing the global financial crisis it would be Wallison.  As I explained, he is the person, who with the aid of industry funding, who has pushed the longest and the hardest for the three “de’s.”  It was the three “de’s” combined with modern executive and professional compensation that created the intensely criminogenic environments that have caused our recurrent, intensifying crises.  He complained during the build-up to the crisis that Fannie and Freddie weren’t purchasing more affordable housing loans.  He now claims that it was Fannie and Freddie’s purchase of affordable housing loans that caused the crisis.  He ignores the massive accounting control fraud epidemics and resulting crises that his policies generate.  Upon reading that Fannie and Freddie’s controlling officers purchased the loans as part of a fraud, he asserts that the suit (which refutes his claims) proves his claims.

The piece is long, but worth reading in its entirety. 

Stegman as Geithner's Advisor on Housing

The news that Michael Stegman will be taking a leave from MacArthur to advise Tim Geithner on housing is very good.  It is important for three reasons: (1) Mike has been a leading sensible voice on housing issues for at least 30 years; (2) Treasury has recognized the importance of having an in-house housing person at a senior level; (3) Mike will remind Geithner than users of housing are at least as important as those who lend for housing.

Friday, December 30, 2011

Home Bloggers & Happy New Year!

When I started this blog, I didn't know a thing about a "niche" or even that my blog would someday fall into some type of category.  I started writing simply because I was going through lots of changes in my life like being newly married, pregnant, and building a home.  To top it off, I suddenly decided that I wanted to stay at home when my baby arrived and quite unexpectedly left my job.

I needed a place to connect with other women and was delighted to find this world of blogs and bloggers who were interested in the same kinds of things as me.  Welcome to the world of home bloggers.

It wasn't really until I went to Blissdom that I even realized how many different types of blogs there were.  Basically, if there's a hobby or business or sport, there are people who blog about it.  At Blissdom, the "home bloggers" were definitely in the minority.

I have come to have a special place in my heart for the "home blogger."  A home blogger graciously and courageously opens her home (which is synonymous with her heart) and shares it with the world.  We share our not only our decor failures, successes, and dilemmas, but also can't help but letting pieces of our relationships leak out into our blog too.

And we get to know each other.  

I feel like there is a special intimacy and closeness in the relationships we've formed with the home blogger through our readership and comments because of the intimacy of looking into each other's homes.  It's as if we are being invited in for a cup of coffee and a chat.  I know that when life gets busy and I haven't had a chance to "stop by" I miss it.  Like I miss seeing a friend in real life.

Our homes are decorated with love, and although we may not be trained interior designers, we rock some pretty great personal design.  We bounce ideas off of each other and take comments to heart.

To all you home bloggers and home creators and home lovers,

Wednesday, December 28, 2011

Our Christmas 2011

Our Christmas this year was so fun with James, who is now 21 months old.  Christmas Eve we always spend with my sister-in-law and her family, eating, playing with kids, and decorating cookies for Santa.  These small cousins in their Christmas pj's melt me:)

James loves to sit on this couch in his cousins' play room.  He's got his best Gabba Gabba friends with him. 

We began Christmas morning with our traditional sour cream coffee cake.

We didn't overwhelm James with gifts, but he definitely understood the concept of opening presents this year.

We had a low-key Christmas dinner at our house, complete with crab cakes, beef tenderloin, sautéed mushrooms, and roasted carrots, onions and potatoes.  Dessert was fudge, brownies, and assorted cookies.

  I hope you enjoyed your holiday too.  Are you looking forward to the new year?? 

Tuesday, December 27, 2011

Channing & Co. Giveaway WINNER

Hi all!  Hope your holidays were wonderful!  I wanted to pop in and announce the winner of the Channing & Co. giveaway.

Thank you to everyone who entered!

Jeremy Stein for Fed Governor (reprise)

Personally, I am a big fan of Stein's work. The shortest way to explain why is to list the titles of his five most cited papers:

  • Herd Behavior and Investment
  • A Unified Theory of Underreaction, Momentum Trading and Overreaction in Asset Markets
  • Rick Management: Coordinating Investment and Financing Policies
  • Bad News Travels Slowly: Size, Analyst Coverage and the Profitability of Momentum Strategies
  • Internal Capital Markets and the Competition for Corporate Resources.

Stein has spent his career trying to figure out how capital markets really work instead of pledging fealty to models that don't work very well.  I can't think of a better intellectual qualification for a Federal Reserve Board member.

Sunday, December 25, 2011

Joe Nocera nails it

He writes:

...Peter Wallison, a resident scholar at the American Enterprise Institute, and a former member of the Financial Crisis Inquiry Commission, almost single-handedly created the myth that Fannie Mae and Freddie Mac caused the financial crisis. His partner in crime is another A.E.I. scholar, Edward Pinto, who a very long time ago was Fannie’s chief credit officer. Pinto claims that as of June 2008, 27 million “risky” mortgages had been issued — “and a lion’s share was on Fannie and Freddie’s books,” as Wallison wrote recently. Never mind that his definition of “risky” is so all-encompassing that it includes mortgages with extremely low default rates as well as those with default rates nearing 30 percent. These latter mortgages were the ones created by the unholy alliance between subprime lenders and Wall Street. Pinto’s numbers are the Big Lie’s primary data point.

Two things: First, Pinto and Wallison's definition of "subprime" is any loan that goes to a neighborhood they wouldn't live in or  to a person they wouldn't have lunch with.  According to the American Housing Survey, there were around 52 million mortgages outstanding in the US in 2009.  This means that according to Wallison and Pinto,  the median borrower is a subprime borrower.  I guess this means they think that that half of homeowners with mortgages should be renting in Potterville.

Second, Nocera should in his piece put quotes around the word "scholar."

Friday, December 23, 2011

Simon Johnson underlines a problem..that could point to a solution.

He writes:

Santa Claus came early this year for four former executives of Washington Mutual, which failed in 2008. The executives reached a settlement with the FDIC, which sued them for taking huge financial risks while “knowing that the real estate market was in a ‘bubble.’ ” The FDIC had sought to recover $900 million, but the executives have just settled for $64 million, almost all of which will be paid by their insurers; their out-of-pockets costs are estimated at just $400,000.
To be sure, the executives lost their jobs and now must drop claims for additional compensation. But, according to the FDIC, the four still earned more than $95 million from January 2005 through September 2008. This is what happens when financial executives are compensated for “return on equity” unadjusted for risk. The executives get the upside when things go well; when the downside risks materialize, they lose nothing (or close to it).
Just thinking aloud here, but if bank executives were compensated based on return on assets (i.e., the returns to both debt and equity), rather than return on equity, a lot of the misaligned incentives in their pay packages would go away.  Among other things, it would discourage races to the bottom.

Why Fannie and Freddie will likely last

I was talking with SF Chronicle columnist Kathleen Pender yesterday, and she shared a trenchant observation:  now that Congress has figured out a way to use the GSEs to raise revenue (via raising G-fees), it will always have an incentive to keep them.  Specifically, Congress has now tied itself to the GSEs, because it will take awhile for increased G-fees to repay the cost of the payroll tax cut.

Thursday, December 22, 2011

Christmas Tree Lovin'

I have so enjoyed seeing all the Christmas trees that everyone linked up to our Christmas Cheer Blogosphere link party last week.  Trimming the tree really brings out the creativity and love of the Christmas season.  For many of us, putting up the Christmas tree and decorating it with ornaments we've collected over the years signifies love and puts us in the holiday mood.  I especially loved seeing y'all going to the tree lot to choose your tree and then the photos of the little babes hanging ornaments.  So special and sweet.

I had so many favorites that I had to narrow it down to 20.  You can go HERE to see all the links, nearly 200!  Thank you again for linking up!  Enjoy:)

11 Magnolia Lane  I adore the outdoor tree and the view of the lake. 

Peas and Crayons.  Her ornaments and photos were so bright and clear!

The Yellow Cape Cod. Such a pretty color combination for her young daughter's tree.

The Yellow Cape Cod.  The red is so festive.

Modern Maizy.  This flocked tree is the perfect compliment to the chic living room.

Songbird.  Rustic chic at its best.

Modern Jane.  Her full aqua and silver tree is simply stunning.

Diapers and Divas.  My heart melted at daddy lifting up son to put the topper on the tree. Daddy- don't fall off that chair! :) 

Forever 88.  Oliver stole the show:)

House Pretty.  This contemporary tree on branches is just awesome.  (not to mention the gallery wall)!

Decorgreat.  Love, love, love.

The Lovely Cupboard.  I adore the purples in the tree and the lovely wrapped presents.

Note Songs.  This bright tree with the bold ribbon really caught my eye.

Swanky Chic Fete.  Lilli's lime tree is beautiful all lit up.

Worley House.  I thought Andrea's photograph of the ornaments on her tree and the lighting was beautiful. And I liked seeing her reflection in the ornament.

Redhead in Ruffled Flats. How cool is this photo?!  Her ornaments were really cool too.

Plum Patchwork.  Holy cow!!  That's a 12-foot tree they trimmed to fit under the 9-foot roof!

Markham Street Design.  So pretty and I love the skirt and the natural wrapped presents.

The Family Room Design Studio.  The vibrant aqua and limes in this tree are awesome.

Mommas Me Time.  Stole. My. Heart.  
Look- in that first picture, little Ethan has his saw ready to help dada cut down the tree!

Thank you again for sharing your holiday memories, via your trees, with us!  


There is still time to enter to win $100 to Channing & Co. (handcrafted jewelry).  Enter HERE!

Wednesday, December 21, 2011

Why to worry about Chinese house prices.

Getting good data from China is problematic, but it is pretty clear house prices there are falling (see here, here and here).  At first blush, this shouldn't cause too much worry, because the Chinese use far less leverage to buy houses than Americans, and so the probability of being upside down there remains pretty low.

The problem, however, is that municipalities in China have lots of debt.  The actual amount is controversial, but the fact that it is a lot is not.  Chinese municipalities service debt using land sales.  So if property values fall a lot.....

Amanda Carol Interiors

Several months ago I met a local blogger, Amanda, when I hosted a blogger get together in our city.  Amanda attended the luncheon and we've kept in touch since and gotten to know each other better.  Her blog is a daily read for me and I just love her work and photographs.  She is so down-to-earth and a complete sweetheart.

Here we are last summer with Kristen (Fit 2 Feel Better)

After growing up with a love for interior design, Amanda is finally realizing her dream and has become an interior designer working with local and online clients.  I want to help spread the word about her incredible talent.  If you are looking for a designer to work with, I really encourage you to check out her blog and portfolio and get in touch with her!

Her home tour alone will inspire you.  Or have you seen her Christmas decor?  Simply stunning!

I wanted to share a few of Amanda's design boards with you.  Which one do you like best?

A sophisticated sitting room that is both masculine and feminine.  

A rustic-chic master bedroom.

A Restoration Hardware inspired dining room:

Bachelors Apartment in the City: