The Upside Down Show on NicJr

I am always on the look-out for inspirational shows for Ravi. I want the time he spends in front of the TV to be inspirational and rewarding. While there are many educational shows that help to teach basic numbers and letters, and general knowledge, there are very few shows that focus on creativity and imagination. I think the main reason for this is that it is much easier and structured to teach content, but much harder to teach and develop creativity. Young kids are very creative. They spend tons of hours making up games, imagining themselves doing weird and wacky things, and, in general, just exploring. This creativity tends to become diminished as they grow up. Our educational system is designed to impart fundamental working skills and concepts; you learn a lot of ‘facts’ and apply them. You don’t spend a lot of time being creative. I’m hoping to help foster and encourage creativity within young Ravi. I’m fairly confident that numbers and ‘stuff’ will come with time and practice, but creativity needs to be supported throughout his life.

The Upside Down Show on NicJr is a commendable advocate for creativity and is a show I actively encourage for young Ravi to watch. The show consists of two actors- Shane Dundas and David Collins who play two brothers that engage in wild and wacky games. They spend time ‘playing’ with their action fingers and giving baths to imaginary elephants. Each episode revolves around the two brothers making stuff up and just ‘imagining’ crazy things. From sticky rooms to underwater environments, the brothers explore and play games. This type of freestyle imagination show is super awesome for Ravi. I want him to spend time just tinkering and trying cool and different things. Every time it is on NicJr, I let Ravi watch. We’ve even gotten into doing and trying some of the crazy things that Shane and David do. We’re learning to knock before opening a door, and we also wave our hands up in the air when we’re upside down just like Shane and David. In a couple of years, hopefully he’ll have enough language skills to actually start making up stuff like they do and we’ll get even more creative in our games.

If you ever get the chance, check the show out. I know that more experienced shows like Sesame Street help teach kids things, but I’m not so sure that is as important as being creative.

Mario.

Basics of Accounting

Hi Ravi,

I believe I’ve procrastinated on this subject for as long as I possibly can. Today, I’m going to talk about accounting. I’m going to define it, address the basic principles, and show you how to understand it. I don’t expect a single blog post to make you totally proficient with Accounting (high school and college classes are for that), but I do hope that you can appreciate the finer points of accounting and how the subject can add practical value to your life. I consider the basics of this post part of a basic body of material that is good to know and understand so that you don’t get swindled in life. From my 30 years of living, I’ve come to realize it’s much more important to not be swindled and maintain your fair earnings than being a 1 in a million kind of person. Even 1 in a million people can make financial mistakes that ruin the rest of their lives.

Enough of an introduction and onto accounting. First off, what exactly is accounting? If you look through a textbook the standard response is that accounting is a process of identifying, measuring, and communicating events in value terms, to provide information for economic decision-making. While this statement is accurate, I think the more simple description of accounting as a method of counting positive and negative things in terms of money to determine the proper financial value of an entity is just as valid. Accounting is typically performed to determine the financial standing of a company (it’s required for publicly traded companies), but can be applied to any entity that owns goods and services and is liable to another entity (usually through a contract) to provide goods and services to another entity. You can do an account statement for a professional baseball player, an independent contractor, etc. In fact, there are products available that help you track and build accounting statements for your own personal use (such as Quicken and TurboTax).

Accounting documents generally consist of four statements (called accounting statements): Balance Sheet, Income Statement, Statement of Cash Flows, and Statement of Owner’s Equity. While we’ll explain what these four statements are meant to convey, we’ll first talk about how to classify entries on an accounting statement. Accounting entries are either an Asset, a Liability, or Owner’s Equity. What are assets, liabilities, and owner’s equity? Let’s start with assets. Assets are objects or things that (a) you or the company owns, (b) the ownership is based on a past transaction or event, and (c) has a probable future economic benefit. A car is an asset. I bought my car in some past transaction. I have a title that states I own it, and it helps me get to work every day making sure I earn a paycheck. I can also consider my savings account an asset. It satisfies the same three criteria as the car (with the future economic benefit being the interest on the account). What is a liabilities? It’s the exact opposite of an asset. A liabilities is something that (a) you or the company owes, (b) owing is based on a past transaction or event, and (c) it has a probable future economic sacrifice. My student debt is a liability. I owe the government a certain amount of money. The debt is based on my past school tuition cost, and it has a future economic sacrifice (repaying the money and owed interest).

Finally, what is owner’s equity? To explain owner’s equity it is easier to introduce the basic balance sheet equation my accounting professor taught me. A Balance Sheet states and satisfies the following equation: Assets = Liabilities + Owner’s Equity. We’ve defined assets and we’ve defined liabilities. So what is owner’s equity? Basically, it is the leftover value of assets minus all liabilities that you are left with.In some account statements you might here it called net worth or shareholder equity, but the names essentially mean the same thing.

Even though accounting consists of only one algebraic equation (Assets = Liabilities + Owner’s Equity), there are some structural forms that help to visualize this equation. The first visualization is a balance sheet t-account. It is shown below:

The statement above is called a t-account because it looks like a T. On the left side are assets. On the right side are Liabilities and Owner’s Equity. A t-account is a ledger that must balance. That means that everything on the left side in value equals everything on the right side. If it doesn’t, you’ve made an arithmetic error, which the t-account structure is meant to help you catch. Let’s take an example. You’ve recently bought a car (actually you bought a 2010 Lamborghini Gallardo LP560-4 Coupe M.S.R.P. $198,000 … WOW!!) which you’ve decide to finance 100% with a loan. Your Balance Sheet t-account would look something like:

On the left side we’ve labeled the asset you currently have (Lamborghini Gallardo) and it’s value. On the right side we’ve labeled the loan and summed up both sides (at the bottom). You’ll notice both sides equal $198,000. This is what t-accounts help with most. An easy identification of sums so that you can error check. The t-account also encompasses a very important subtle nuance about life. Let’s see if we can figure it out, shall we? Question: How much is the car worth to you? Answer: $198,000. This is the purchase price you paid for the car and is shown on the left side. Question: How much is it worth to the people who loaned you money? Answer: $198,000. This is what the car loan was written for and is on the right side. How much of the car do you own? Answer: $0.

Zero dollars? That can’t be right. The car’s worth $198k. Well that is true, but you have a car loan for the same amount that is pledged against the asset. The above balance sheet has a zero for owner’s equity (the difference between all listed assets and all listed liabilities) and basically states that you don’t own any part of the car. The residual difference is what you actually own. This point is subtle and yet so important in life. Ownership is what you are working towards. You’re not striving to grow your assets; you’re striving to grow your owner’s equity. People with high net worth (owner’s equity) are wealthy. They may not have tons of visible assets, but if they own them free and clear, they are wealthy.

Ravi, please think about this concept carefully. This will be one of the most important things you will ever learn. You absolutely have to learn to distinguish between what an asset is and what owner’s equity is. I have seen very very smart people (much smarter than your dad) lose fortunes because they don’t understand this basic principle. I’ve also seen very simple and frugal people live very good lives because they do understand this principle. One day, when you’re older, we’ll talk in-depth about the great recession and what we did to survive it. We’ll talk about internet bubbles and housing bubbles and how to spot these. While the history lesson will be invaluable, the more practical aspect will be showing you some simple financial tools. Today’s lesson is one of the most important.

We’ll keep talking about the difference in assets, liabilities, and owner’s equity so that you’ll see the terms on a regular basis. For now, just look at the car example and make sure that you understand how we got our ownership share. When we talk about stuff, we’ll keep referring to the above terms and to t-accounts. Hopefully some basic concepts like this one will help you make better business decisions in the future.

Daddy.

Weekend Adventures, Oct’24 2010

Last Sunday we attended Nicolas’ third birthday party at Dragonfly DuLou in Los Angeles.  There were about two dozen kids of all ages, with a gigantic enclosed trampoline, half a dozen plasma cars, basketball hoops, balloons…etc.  There were even a disco dancing session just for the kids.

I could imagine myself really enjoying all the fun things to do there if I was a kid.  But what about Ravi?  He rather play by himself.

Ravi didn’t show much interest in the party or what the other kids were playing.  He went and got a ball and played by himself in the alley way away from all the other people.  He liked climbing the ledge to reach the dirty windows, chasing the balls.  He played with daddy’s empty water bottle for good half an hour, trying to fit the mouth of it into a hole on the bottom of a toy wagon.

For a little while, a little girl just 3 months younger came by and sat in the wagon with him.  Ravi was extremely gentle and didn’t make a fuss, and she just stared at him.  Eventually when all the kids went to the disco dancing class, Ravi even tried the trampoline all by himself for about two minutes.  He got off as soon as another kid tried to get in.

I worry about Ravi sometimes.  Earlier when we first arrived, an older kid pushed Ravi and took his ball.  I think that’s why Ravi didn’t want to play with anyone after that.  I hope he had fun.  I can’t wait for him to talk so he can tell me how he feels.  In the meantime, I can only trust his daddy when he keep re-ensuring me that Ravi did have fun at the party.

-Flo.

Gymnopaidia

I don’t like to look back into my life in my 20s.  Not that I am ashamed of my immaturity, just that the me back then was so different from what I am now.  Okay, maybe just a little bit ashamed of my selfishness back then.  I still think back to those days sometimes, most of times unwillingly, and it still bothers me very much.  Specially how I treated people who cared about me then, I could have treated them with so much more respect if I knew better.  I am sure it will always bother me, but I have the rest of my life to redeem myself.

I love my life now.  I have a confidence I never felt in my 20s, and I am happy in whatever I do.  I don’t want to go back to those days even if all the lines on my face disappear and I fit back into size 2 clothes.  I was not happy in my 20s;  I felt empty and alone even with a roomful of people.  I was desperately searching for inspiration to justify my existence.

One of the inspiration I’ve found is a poem named “Gymnopaidia” written by George Seferis in 1935.  I must have read it hundreds of times in my 20s.  Reading it now still makes my blood boil!  It made me want to run away to a desolate tropical paradise to spend the rest of eternity being tortured by my own thoughts.

I guess I can still connect with my younger self, I still like this poem as much as I did then.

-Flo.

——————————————————————————

GYMNOPAIDIA

I. SANTORINI

Bend if you can to the dark sea forgetting

the sound of a flute on naked feet

that trod your sleep in the other, the sunken life.

Write if you can on your last shell

the day the name the place

and fling it into the sea so that it sinks.

Naked we found ourselves on the pumice-stone

watching the rising islands

watching the red island sink

into their sleep, into our sleep.

Here naked we found ourselves, holding

the scales that tilted towards

injustice.

Heel of power, barefaced will, calculated love,

schemes that ripen in the midday sun,

course of fate with a new hand

striking the shoulder;

in the land that was scattered, that can’t bear any more,

in the land that was once our land

the islands – rust and ash – are sinking.

Altars destroyed

and friends forgotten

leaves of the palm tree in mud.

Let your hands travel, if you can,

here on time’s curve with the ship

that touched the horizon.

when the dice struck the flagstone

when the lance struck the breast-plate

when the eye recognized the stranger

and love went dry

in punctured souls;

when looking round you see

feet harvested everywhere

dead hands everywhere

eyes darkened everywhere;

when you can’t any longer choose

even the death you wanted as your own –

hearing a cry,

even the wolf’s cry,

your due:

let your hands travel, if you can,

free yourself from unfaithful time

and sink –

whoever raises the great stones sinks.

II. MYCENAE

Give me your hands, give me your hands, give me your hands.

I have seen in the night

the sharp peak of mountain,

seen the plain beyond flooded

with the light of an invisible moon,

seen, turning my head,

black stones huddled

and my life taut as a chord

beginning and end

the final moment:

my hands.

Whoever raises the great stones sinks;

I’ve raised those stones as long as I was able

I’ve loved those stones as long as I was able

those stones, my fate.

Wounded by my own soil

tortured by my own shirt

condemned by my own gods,

those stones.

I know that they don’t know, but I

who’ve followed so many times

the path from killer to victim

from victim to punishment

from punishment to the next murder,

groping

the inexhaustible purple

that night of the return

when the Furies began whistling

in the meagre grass –

I’ve seen snakes crossed with vipers

knotted over the evil generation

our fate.

Voices out of the stone out of sleep

deeper here where the world darkens,

memory of toil rooted in the rhythm

beaten upon the earth by feet

forgotten.

Bodies sunk into the foundations

of the other time, naked. Eyes

glued, glued to a point

that you can’t make out, much as you want to:

the soul

struggling to become your own soul.

Not even the silence is now yours

here where the millstones have stopped turning.

——————————————————————————

It Doesn’t Pay to be a Fiscal Conservative…

I recently read a blog post by the eminent economist Simon Johnson over at the Baseline Scenario lamenting about the lack of fiscal conservatives in the United States.  He also states that fiscal conservatives within the US don’t care about the current fiscal situation and that we’re busily too happy to care what occurs within America. This can not be further from the truth. Before I get to my feelings about being a fiscal conservative and a response to Simon’s critique, let me highlight out a few select quotes from his article and also a reference link so that you can read more by him. Also, if you don’t know of Simon Johnson, he is an incredibly intelligent faculty member of MIT and is a world-renowned economist. I have the utmost respect for him and have learned a lot from him over the years. He blog’s over at the Baseline Scenario and the article I’m quoting from is “There Are No Fiscal Conservatives In The United States.”

By Simon Johnson:

The United States stands out as quite different.  No one is yet seriously proposing to address our underlying budget issues.  There are certainly people who claim to be “fiscal conservatives” – some of the right and some on the left – but none can yet be taken seriously.  The implications are very bad for our fiscal future.

The unfortunate fact is that “fiscal conservatives” largely stayed on the sidelines during the financial reform debate.  And the problem of “too big to fail” was absolutely not addressed adequately either by the Dodd-Frank legislation or by the subsequent Basel III framework. There is no way to handle the failure of a global megabank – the management of such banks know this and so do their creditors; this is carte blanche for further uncontrolled expansion of risk-taking.

“Fiscal conservatives” (and everyone else) will likely ignore this advice.  In that case, we’ll soon face a major fiscal crisis in the United States – again as a direct result of financial sector irresponsibility.  Then watch your taxes go up while your social security benefits fall sharply and unemployment rises far beyond current levels.

I actually disagree with all of these sentiments. I think what Simon Johnson is forgetting to consider is that there are plenty of people who would be fiscal conservatives within the US; it’s just that they’ve been marginalized by the current US administration. One can point to people like William Black, Elizabeth Warren, Paul Volcker and Ron Paul as shining examples of current fiscal conservatives that care about Americans. Each of them has been marginalized by the current and past administrations. Pres. Obama went even so far as to deny appointing Dr. Warren as the head of the Bureau of Consumer Financial Protection; a department that she nearly single handedly helped to create. Paul Volcker was brought out in Obama’s darkest hour to help endorse financial reform and then marginalized afterwards, with even his signature Volcker Rule being watered down. So far this administration hasn’t been “of the people, by the people, for the people”, but more like “of the banks, by the banks, for the banks.” Which also isn’t really that different from the Bush administration’s clear and unwavering message.

The sad reality of the current American situation is that the current incentive system doesn’t actually reward fiscal conservativeness. Banks aren’t looking for someone who is responsible with credit; they’re looking for someone who is partially irresponsible so that they can charge you interest. If you were responsible, you’d never get an overdraft fee, or an interest fee, or whatever other random fee they tack on to credit cards these days. The same situation applies to all other types of credit. From houses, to cars, to health care, to you name it, when it involves credit the average American is enticed to push their personal safety limit and go just a bit further. And when reality doesn’t live up to the hyped up sensationalist fantasy, you get stuck with either an overpaid asset or never ending interest fees. Worse, the government has decided to step in and help the average American live in a Keynesian fantasy land for just a little bit longer, hoping that your vote is secure. The Heritage foundation’s Index of Dependence on Government is at an all time high since it’s creation in 1962.

The American government has placed an implicit call option for the financial stability of its citizens that has removed a large amount of downside risk. This has allowed the American people to leverage their current financial situations. During the growth years of 1982 to 2007 this worked splendidly and allowed for increased profits. It also allowed the spread of Ponzi schemes and an increase in the Bezzle within the current financial system (but that is a topic for a different post). The problems arise when the American economy doesn’t grow or declines. Leverage then works in the opposite direction and can cause instant financial ruin. This is exactly what we’re currently seeing. There has been a tremendous amount of financial (and real) wealth destroyed within the last three years, and, by all accounts, this wealth destruction will continue for some time to come. The real problem is that people’s thoughts are slow to change and adapt. We’ve only been in a depression for three years, with the last great credit contraction lasting over ten years and culminating in a world war. People still believe that good times will come within the next couple of years. If this is true, the correct response would be to re-leverage your current financial situation (by taking on over burdened debt loads) in anticipation of increased profits and higher asset prices. In such an environment, there is very little incentive to be fiscally conservative. I happen to believe that Americans are very rational beings; when given a free lunch, their standard response is to take it. In this environment you can not be fiscally conservative; it won’t pay off.  “Fiscal conservatives” aren’t ignoring the situation or merely in name only. They are a marginalized minority of the American population and members of the current government. The basic reason is the US government’s implicit call option. Take that away and you’ll see people change quite quickly.

Mario.

Do You Know How Much Daddy Loves You?

Dear Ravi,

A few nights ago, you had a bad night of sleep.  You woke up many times and couldn’t fall back to sleep.  Like any little kid reacting to uncomfortableness, you cried and cried.

That night you happened to be sleeping with daddy.  I was in the next room but I was also woken up by your cry.  I became concerned when I heard the crying didn’t go away, so I made my way to your room.  I picked you up and tried to comfort you but my usually tricks didn’t work very well.  Even you wanted to go back to sleep.  You were so tired and pointed to your bed demanding I put you down, but every time I did you cried again even though you were half a sleep.  Both me and your daddy were frustrated and harsh words flew.  It ended up with daddy picking you up angrily and storming out of the room.  I followed, angrily too, blaming the whole thing on him.

In the living room, I sat and watched your daddy putting your head on his shoulder and pacing back and forth the length of the room.  He walked fast initially.  You still cried out every few seconds.  He kept pacing.  After about 20 minutes, my anger had cooled down.  I thought, I would never have done this for you, I would have stopped this walk a long time ago.  But daddy still walked on.  His pacing became much slower now, and you made less sound.  I had not a single ounce of anger left, and all I could do was to admire the tender picture of daddy gently holding his baby.  This made me remember back when you were a new born; your daddy and I stayed up every night and took turns to rock you to sleep.  Your daddy always took over when I became frustrated like tonight.  He never failed to put you to sleep because he would just walk on and on, till he was too tired to walk anymore and you were for certain deep in sleep.  It was like he’s in another world with just you in it, nothing else mattered.  I felt an overwhelming love envelope me and warmness fill up the room, just like I felt back then.  All that’s important to me is right here with me and I didn’t want to be anywhere else in the world at 1:30AM in the morning.

I went over to your daddy and slowly guided him back to the bed.  When daddy put you down you remained sleeping peacefully.  I kissed you both good night many times and went back to bed where I spent the rest of the night sleepless thinking how much I love you both.

Ravi, someday you will be a man and will have earned your own place in the world.  Please don’t ever forget how much daddy loves you.  He may never tell you, but his love for you is endless and deeper than you could ever imagine.

Love,

Mommy.

A Quick Run-Down of Foreclosuregate

Mario here. This post is the basis for a speech I’m giving at Toastmasters. The speech requires us to research a topic and then present it to an audience. My topic is the current foreclosure fraud issues that are sweeping the nation. I’m not going to create any new content; all of the content for this speech was gleaned from other more notable sites. Since this is the structure and content for a speech, the content will be light and interspersed with quotes and phrases to help me follow the speech. As this post is mostly to capture a speech topic, you’ll notice that a lot of the content is broken down into more manageable concepts, i.e. talking points. The main reason to post this here is that it is actually a nice summary of the events that are transpiring and helps me to organize the info into a speech format. I hope you enjoy it.

A Quick Run-Down of Foreclosure Gate

  1. Intro about myself – Slug vs. Snail commentary (why I care about the housing market)
  2. What has happened so far
    1. Quick run up in house prices to generational highs
    2. Slew of mortgage products Alt-A, Subprime, Adj. Rate
    3. Slow down and drop in house prices
    4. Elevated level of foreclosures
  3. What is new this last week: Fraud
    1. A Bank of America official acknowledged in a legal proceeding that she signed up to 8,000 foreclosure documents a month and typically didn’t read them.
    2. Further irregularities were found- including potential forged signatures, lack of proper documentation (including some mortgages with no documentation), and MERS taking actions against borrowers on behalf of lenders without legal authority
    3. Financial institutions were hiring just about whoever they could find, including hair stylists and Wal-Mar employees, as “foreclosure experts” to help them rush through the massive backlog of foreclosures that were rapidly piling up
  4. Why this matters: Fraud Prosecutions
    1. There is soon going to be a colossal legal scramble to figure out who actually owns millions of US mortgages
    2. Pushback from MBS investors for banks to eat losses due to fraud
      1. There was fraudulent claims made in prospectuses that can be legally fought.
    3. Pushback from borrowers for banks to eat losses due to fraud
      1. There is the potential to sue a lender who illegally foreclosed on a borrower
    4. Pushback from title insurers for banks to eat losses due to fraud
      1. Incorrect owner/mortgage issues typically get settled with title insurers, but title insurers are protected against fraudulent documents
  5. This mess could be more widespread than anyone would have dared to imagine.
    1. At first it was only GMAC/Ally Bank, then it was JP Morgan, BofA, and Chase
    2. At first it was only foreclosure proceedings within judicial foreclosure states (23 in the US), then it was a halt to foreclosures in all states
    3. At first only 23 state attorney generals who were investigating, then 40, now 50.
  6. Missing paperwork requires costly legal proceedings to clear up. This can force a re-evaluation of mortgages on banks’ balance sheets.
  7. Lastly, renowned investor Jim Sinclair is actually warning that the collapse of securitized mortgage debt could be the “final shot” that will wipe out many financial institutions across the US (including the Fed Reserve which owns $1 trillion in MBSes out of a total holding of $3 trillion).
  8. Where to from here?

Weekend Adventures, Oct 16’2010

Grandpa and Grandma have finally settled into their new home and all the renovations are coming to an end.  This means grandpa had time to take Ravi to the local park for the first time during the weekend.  We enjoyed various different slides, including the really tall and spiral ones.  Ravi was extremely brave, he even tried the really scary slides at least three times.  Ravi also enjoyed playing along side with other kids, even though he still maintained his loner self.

Ravi had so much fun, he refused to go back to the car.  It took quite a lot of persuasion on our side and crying on his side to get him back into his car seat.  Of course this means we will be back to the park again next week.

Back at home, Ravi found Grandma busy trimming off extra branches off trees and bushes.  He had a great time finding little fruits that look like grapes.  He even put a couple into his mouth and found out it didn’t taste like grapes.  I was glad to see him spitting it out since I wasn’t sure whether or not it is poisonous.

At night, Ravi had fun forcing everyone to sit on the foot of the stairs.  Every time grandpa tries to leave to go back to his favorite TV show he would cry.  So we all ended up spending at least an hour sitting together clapping hands and giggling to each other.  What a fun way to end a day!

-Flo.

Lego Duplo

Our trip to Albany back in September was a great cultural and knowledge exchange.  It was also a great exchange of goods; we brought varieties of really good Trader Joe’s chocolate and other Chinese snacks, and in return we got heaps of children book and toys.  In fact, we had to buy another luggage to put all those things in and still exceeded the weight limit.  In retrospect, we were light on the giving and heavy on the receiving, but who’s counting.

One of the toys we brought back were two big boxes of Lego Duplo.  We actually bought a $30 box a few months back and were amazed at how plain, expensive, and few pieces contained in the box.  I didn’t know something so simple could cost so much money.  So when my sister offered to give us Do and Jo’s old set, we were very happy to accept.  Apparently Do and Jo have moved on to smaller Lego pieces, so those Duplo were free to find a new home.  We were thrilled to find all the specialty pieces contained in this set.  There are knights and ladies, dinosaurs and alligators, truck and houses…etc.  Too cool!

We can tell from early on that Ravi is a Lego fan.  He can’t quite put the pieces together yet, but he’s a great destroyer of Lego structures.  Once Mario and I have built something, he will eagerly grab it from us and start to pulling it apart.  He also loves to pull out his Lego boxes and dump all the pieces onto the floor and “swim” in it.

I can’t wait to see Ravi growing up with his new Lego set.  Thanks aunt Lei, Do, and Jo!

-Flo.