How Los Angeles works better than you think

One of the keys to maintaining one's sanity when living in LA is to know how and when to avoid freeways.  When the 110 runs clear, it takes about 15 minutes to drive from my house to USC; when it is clogged, it can take an hour.  But that is OK, because I have a (largely) non-freeway route home that takes at most 35 minutes.

One of the reasons surface streets (outside of the West Side) in most of Los Angeles run pretty well, even at rush hour, is that 90 percent of the traffic lights in LA are synced.  By the end of the year, all lights will be synced.  As a conseqeunce, despite its traffic, in most parts of LA, one needs to wait for only one light cycle to get through an intersection.  Again, this is usually even true on downtown streets during rush hour.

The cost of syncing all the lights in Los Angeles will come to $350,000,000.  Let's do a back-of-the-envelope here.  If syncing saves the average Angelino (there are 4 million) even one minute per day, and time is worth $15 per hour, syncing basically pays for itself within a year.  That is government spending everyone should be happy supporting.

I Heart Organizing Contributor

A few weeks ago, Jen at I Heart Organizing announced that she was looking for contributors on her blog in an effort to free up some time to focus on projects she's working on and to give her more family time this summer.  This is the same Jen you may have seen on Pinterest with the awesome playroom she created for her kids.

Isn't that gorgeous, bright, and oh, so perfectly organized?!  You really need to check out the whole thing to get the full details and see the rest of the room.



So, when I heard Jen was looking for contributors, I happily volunteered, and was thrilled to learn that I will be one of eight fabulous women writing for I Heart Organizing for the near future.

I'm especially thrilled to get to be included with some of my best girlfriends, and I'm looking forward to getting to know the whole team.  You can click on the blog header below to visit each site.

* * * * * 

And I wanted to say 

to my readers and Followers!

You can Follow my blog, by clicking the "Join this site" icon on my sidebar. 

 Or you can Subscribe via email, by entering your email address in the box on my sidebar.

You can follow me on Pinterest (my favorite pastime) by going HERE or clicking the icon below.

* * * * * 

Those who own their houses with equity also get a tax break.

Matthew Yglesias, who wrote a terrific piece on the benefits of off-shoring yesterday, also wrote a piece on why Mark Zuckerberg has a mortgage:

Bloomberg writes that "wealthy individuals often choose to finance a home purchase rather than pay cash because of the overall low cost of mortgage debt and the additional access to liquidity," which is true but I think only scratches the surface. Another important issue is that interest payments are tax deductible, which is a very big deal if you have a very high income and live in a high-tax state like California.

But owning with equity gives the same tax break as owning with debt--the return one earns on her house (the rent she pays herself) go untaxed. Consider the following experiment: suppose you and your neighbor own your houses free-and-clear. Now you swap houses and charge each other market rent--you are now responsible for paying income taxes on that rent. The value of the tax break by staying in your own home is your marginal tax rate multiplied your return on equity. The return on equity is generally called net imputed rent.

The mortgage interest deduction places debt and equity on a level playing field when it comes to homeownership. Thus the many countries without a mortgage interest deduction, such as the UK, Canada, and Australia, still subsidize owner housing--they simply encourage people to own with equity instead of debt. This may be a very good idea.

End of the Bed Bench (under $300)

I mentioned a few weeks ago that I was looking for a bench to put at the end of the bed, and ended up finding one for under $300 at Overstock.  It's the Renate Coffee Table, which isn't actually a bench, but a coffee table as the name states.  That being said, it's a little wider than I expected, but I still think it works.  I did try it in the living room too, to see if it looked better there, but decided I liked it in the bedroom better.

I'm impressed with the quality, but am thinking of spray painting the black legs gold or silver.

The fabric is an oatmeal colored linen that has a nice texture and I love the tufting. 

I still want to change out our bedside tables for (I think) mirrored pieces, but haven't taken the plunge yet. 

You might remember our bed is also from Overstock and the bedding is from Restoration Hardware (except for the Target throw).  I made the grey/blue zebra pillow cover.  I still need to add some pillows to active the fuller, more layered look. 

I'd recommend this table for a coffee table too if you're in the market for one.  It's cushy at the top, yet still has the open feel underneath. 

* * * * * 

4th of July Favorites

Hi all!  Hope your weekend was fabulous!  I spent the weekend at home organizing, organizing, organizing- feels very refreshing!!  I'll be showing you soon.  In the meantime, I was so happy to see you link up your 4th of July posts in the link party recently.  I got a kick out of seeing all the creative images and have lots of new ideas to implement next year!  I know the 4th has come and gone, but Labor Day is just around the corner, so keep these ideas in mind.



You can go HERE to see all the links, but here are a few that caught my eye.

Hi Sugarplum

Elizabeth Ann's Recipe Box

Moonpie Dreams

Calypso in the Country

Ten June

The Sweet Survival

A Thoughtful Place

Old Town Home

Cre8tive Designs Inc.

Our Fifth House

Faith and Pearl

Swanky Chic Fete

Fresh and Fancy

Coleen and Keith

Moonfield Lane

* * * * * * 

Have you heard, Natasha of Schue Love had her little baby, a gorgeous boy named Ethan!  Go HERE to see some serious cuteness of this 2-week old!  And you can check out my guest post where I gushed about life with my little guy his first year:)  I still can't believe he ever looked like this!

What would game theory say about LIBOR?

On days like to day, I wish I were a game theorist.  The I could figure out what a Nash game would predict about LIBOR reporting, and how that would vary from honest reporting.

The rules of the game are well set out and mostly symmetric, although it is the mostly part that creates a problem.  Suppose there are N reporters and the LIBOR that is produced is based on the interquartile mean of what is reported.  Each bank is then seeking to maximize some objective function that depends on that interquartile mean, over which it has some influence.  If all banks have the same objective function, then symmetry will mean they all choose the same rate, which is not particularly interesting.

But each individual bank is gets some draw from a distribution, that it turn determines its optimal play.  This will produce heterogeneity in rates chosen.  Alas, I am not good enough at math to go any further than that...

[update: found a paper that does the exercise here.]  

Let's push 15 year refinances.

If someone refinances a 30 year 6 percent mortgage (with 27 years of payments left on it) into a 15 year 2.86 percent mortgage, the payment goes up by 10 percent, which is not nothing.  But within 5 years, more than 25 percent of the principal  on the 15 year mortgage is paid down.  For those who can afford the payment, this would largely solve the underwater mortgage problem.