Sunday, May 31, 2009

$0 First Mortgage – I Wish

Checking my bank statement online, I verified that my refinancing has gone through. The existing first mortgage has been paid in full and my account statement shows a ZERO balance. Alas, the new mortgage should be showing up any day now.

On the bright side, I replaced my 5 year ARM with a 30 year fixed mortgage. Although I didn't pay any closing costs, my new mortgage is at a slightly higher rate than the ARM (I had a great rate). Furthermore, my payments will be based upon a 30 year term instead of the 25 year term. At first, I was going to "pretend" I had a 25 year mortgage and pay enough to have the home paid off in 25 years. After further review, I have decided to pay all the extra money towards the HELOC. My goal is to pay off the HELOC in 5 years. Once that occurs, I will take my Heloc payment and apply it to the first mortgage.

Goodbye Comcrap – Hello U-Verse

Yesterday, I had the pleasure of 5 hours with the U-Verse guy in my home. For reasons that baffle me (probably related to the age of my home), they could not get the service to work in my office. Otherwise, things are generally working fine.


  1. The package I got has way to many channels. After I get through the summer, I'll cut down the number of stations.
  2. I get significantly more HD channels with U-Verse. Since I rarely watch regular D anymore, it is nice.
  3. Comcast has better "on demand" options.

Customer Service: For reasons they were unable to explain, I cannot get one of the stations I was promised. (Apparently, they are doing an "upgrade" and I should have it back in a few weeks.) Without prompting by me, they gave me a $5 account credit to compensate me for the inconvenience. At Comcrap, they would probably have charged me $5 for taking my call.

Friday, May 29, 2009

GM Shares - Worthless

With General Motors likely to declare bankruptcy on Monday, the common shares should be worth ZERO. Every time a major company goes under, people end up buying common shares for pennies in hopes they will end up with something. They will NOT. The shares are worthless. If you own any, try to sell them for anything you can get to some other sucker.

Thursday, May 28, 2009

Inflation Fears

With the government basically printing money, it is difficult to decide how to allocate funds. Should I save it at horribly low rates? Should I invest in real estate at depressed prices?

Right now, our plan is focused on getting past the Summer. With my wife working as a teacher, I summer income plummets.

Thursday, May 21, 2009

GM = Government Motors

Looks like General Motors will end up being the biggest failure in the US auto industry. Ford managed to avoid government intervention and seems likely to thrive. Chrysler is owned by its unions an Fiat. Not good, but there is hope.

Since our government could not profitably sell oil, Government Motors (and the taxpayers) are in for a long slow ride.

Tuesday, May 19, 2009

California - Armageddon

Voters in California are going to the polls to approve (or not) a series of propositions the Democrats and Arnold . From what I have read, they are unlikely to approve a plan based upon massive tax increases and additional spending. Sadly, the pols in California do not get it. People are tired of being told the sky will fall if budgets are actually cut.

Tomorrow, I predict the pols will go public with plans to "shock" the voters with "scary" plans to release prisoners and/or fire teachers. That is their first choice for budget cuts?

Monday, May 18, 2009

Trump’s Net Worth Fraud

Today's Wall Street Journal has a fantastic story on how Donald Trump has repeatedly lied about his net worth. The Donald doesn't seem to understand borrowing a billion dollars does not make someone a billionaire. Frankly, I suspect if we used current real estate valuations less his outstanding debt, he might be in the hole.


Source: Trump on Trump: Testimony Offers Glimpse of How He Values His Empire


It's one of the great mysteries of the business world: How much is Donald Trump really worth?

The world famous real-estate developer and television personality has consistently said it's in the billions. A 2005 book citing anonymous sources said it was between $150 million and $250 million. Mr. Trump sued the writer for defamation. He alleged damage to his reputation that caused him to lose out on future deals in locales from Philadelphia to Kiev.

A hearing in that case will take place Monday in a state court in Camden, N.J. As part of the proceedings, the Donald, as he's known to fans and detractors alike, has provided under oath the secrets to how he values his wealth and treasure. In one case, he says, he does "mental projections."

"My net worth fluctuates, and it goes up and down with markets and with attitudes and with feelings, even my own feeling," he told lawyers in the December 2007 deposition.

The deposition, marked "Confidential," comes to light at a time when some of Mr. Trump's projects, including several condominium developments that bear his name, are struggling. Among the problems are anemic sales, lawsuits, sharp declines in value and troubles with creditors.

In a telephone interview Sunday, Mr. Trump disputed that these are tough times for him. "We have a lot of cash right now. We're starting to buy things," he said while taking a break from playing golf at a Trump course in Bedminster, N.J. He said he stood by the statements he made in the deposition.

In the deposition, given to lawyers representing the book's author, Timothy O'Brien, and its publisher, a unit of French-based Lagardere SCA, Mr. Trump described his public persona. "I'm not different from a politician running for office," he said.

Trump on Business Operations


Scott Olson/Getty Images

A city of Chicago flag flies in front of the Trump International Hotel & Tower in the Chicago's business district.

In the deposition, Mr. Trump said that his 2007 estimate of his net worth -- over $4 billion -- is "a very conservative number, in my opinion." He also said $6 billion is a good number, counting his brand value. (In the interview Sunday, he said he was worth $5 billion, not counting brand value.)

Mr. Trump was asked whether he has ever exaggerated in statements about his properties. "I think everybody does," he said in the deposition. "Who wouldn't?"

A follow-up question: Does that mean he inflates the value of his properties in general, nonfinancial public statements? "Not beyond reason," he said in the testimony.

The deposition reveals he told his bankers and New Jersey casino authorities in 2004 and 2005 that he was worth approximately $3.6 billion. In 2005, Deutsche Bank evaluated his net worth as part of underwriting a $640 million construction loan it made to Mr. Trump's Chicago condo and hotel project. The bank said his worth was $788 million, according to information presented by the author's lawyers present during Mr. Trump's deposition.

In his testimony, Mr. Trump discounted that and other low-ball evaluations as "ridiculous." And he noted, "They [Deutsche Bank] still come up with numbers that are many times" what the book's author, Mr. O'Brien, reported. In his interview Sunday, he said Deutsche Bank looked at some of his assets, not all of them, and didn't do independent appraisals. A Deutsche Bank spokesman couldn't be reached.

Mr. Trump said Sunday that Mr. O'Brien, author of "TrumpNation: The Art of Being the Donald," will "wish he never heard of that God damn book" and predicted that "the publishing company will pay me hundreds of millions of dollars" as a result of the suit.

Mr. O'Brien, who is an editor at the New York Times, declined to comment through his attorney, citing the ongoing litigation.

In the deposition, Mr. Trump discussed how he determined the value of a residential development on old rail yards on Manhattan's west side. According to the deposition, when a newsletter reporter writing about the project's 2005 sale for $1.8 billion said Mr. Trump had a "small interest," Mr. Trump wrote him a note. "You're a real loser. Thanks for the nice story. Is 50% small?"

But Mr. Trump had a 30% limited-partnership interest in the project, according to legal documents. A group of Hong Kong investors were the owners. Asked about this during the deposition, Mr. Trump explained that, in his eyes, he owned half because he gets paid fees for managing the buildings and because he didn't have to put up cash in the deal. "In my own mind I've always felt that," he said. "That 30% is equated to 50%," he said. In his interview Sunday, Mr. Trump said he had owned the equivalent of "more than 50%."

Mr. Trump often licenses his name to other developers in return for a fee or a cut of the sales. During the deposition, Mr. O'Brien's lawyer, Andrew Ceresney, noted that Mr. Trump had claimed publicly that he had a major ownership in one such project.

For example, in a November 2007 Wall Street Journal interview cited by Mr. Ceresney, Mr. Trump said he had sold out units at an eponymous condo-hotel project in Hawaii. "The building is largely owned by me," he said in the interview. But in the deposition, Mr. Ceresney produced the licensing agreement for the project. Mr. Trump wasn't a major equity holder in the project, it showed, a fact Mr. Trump didn't dispute.

"Because this is such a strong licensing agreement that I consider it to be a form of ownership," Mr. Trump said. "I'd rather have this than own the building," he said. Moments later he said: "I would say that it could be interpreted to be a form of ownership in the building."

In the deposition, Mr. Trump is asked about the Bedminster, N.J. golf course, which financial statements showed had a net loss of $4.6 million in 2005. Has he ever done a financial analysis of his investment there?

"Yes, I've done mental projections," he said, figuring he'd eventually make $120 million. He never put them down on paper. "You don't really have to," he said. Mr. Ceresney, asks: "Have you discounted in your mind for the risk that you won't sell [memberships] at the prices you are anticipating?"

"I think I will, but it's possible I won't. But I think I will," Mr. Trump said.

At one point during the deposition, Mr. Trump explained the importance of putting his projects in the best light possible. "Would you like me to say, oh, gee, the building is not doing well, blah, blah, blah, come by, the building -- nobody talks that way. Who would ever talk that way?"

Write to Alex Frangos at

Corrections & Amplifications: In the initial version of this article, the Las Vegas and Hawaii properties were misidentified as the other property. The captions now identify the correct property.

Sunday, May 17, 2009

Inexpensive Dinner – Rice & Beans

For the price of a value meal at Micky D's, my wife and I had a delicious, healthy dinner of rice and beans. Frankly, pinto beans are one of my favorite foods. On a cold or rainy Sunday, I enjoy cooking a pot of something all day long on the stove. With the possible exception of seafood gumbo, a pot of pinto beans is my favorite comfort food. Reminds me of Texas roots.

2 cups of Pinto Beans - $.50 (maybe)

1 cup of Basmatic Rice - $.25-50 (maybe)

1 ham hock - $1.50 (Used to flavor the beans. We didn't eat it)

Well Water – Free!!

Thursday, May 14, 2009

I May Be Running for Office

Anger me and I take action. If the local party accepts me (and I think they might), I will be running for our local planning and zoning board in the Fall. Do I "want" to run for office? No. Why will I run? Yesterday, I received a certified letter providing me notice of a zoning hearing to change the zoning of a nearby property. Not only do they want to go from residential to business, they want a "special permit" to open a gas station and a convenience store.

Frankly, the property in question is in a difficult location. Because of traffic, it is unlikely anyone will build a home on the property. Nevertheless, the property is in a on the corner of a residential area and would add to our traffic woes.

Wednesday, May 13, 2009

Taxing College Students?

News reports indicate the Mayor of Providence, RI wants to impose a $150 per semester tax on local college students. Allegedly, the tax will generate $6-8 million per year for the city. Simply put, it is a moronic idea. By supporting 9,000 jobs, the students support their fair share of city services.

Tuesday, May 12, 2009

No to the NY Yankees

Looking for a little fun, I considered going to a NY Yankee game to check out the new stadium. After determining it would take at least $300 (including parking, gas, food, tickets off stubhub) for two of us to attend a game. Instead, we will probably do something local and cheaper.

Sunday, May 10, 2009

Big Mistake - Paid Wrong Credit Card

Oops. I accidently paid my large Amex payment to Citibank. As a result, I have a large credit on the Citicard and had to scramble to find the money to pay Amex before I incurred a finance charge.

Moral – Be careful with bill payments.

Tuesday, May 5, 2009

Should I sell the stock?

As per my prior posts, my employer had a very difficult time the past two years. Our stock fell from the 80's to under 3 dollars. Of course, I had a small position and took a loss during the ride down. Luckily, I became convinced it was worth risking some money to get in. Ultimately, I purchased 400 shares for under $5 per share. With our stock price back above $10, my enormous loss has become a very small gain as our stock tripled in the past few months.

This is my conundrum. Part of me says take (at least some of) the profit. That is a huge move and my $6,000 position is the largest individual position I have ever had in one stock. Nevertheless, most of my portfolio is invested in a diversified basket of mutual funds. Since I think the stock has the potential to double again (if the economy improves), I am going to keep it for now.


Moved Homeowners Insurance

Although it will cost me about $20 per month extra, I moved the homeowners insurance from State Farm to USAA. Why? USAA offered broader coverage and the convenience of having one bill. I have been very happy with USAA's service and moved my Umbrella policy as well.

Monday, May 4, 2009

Comcast Out – Worst Company in America

Over the weekend, I noticed my upstairs TV no longer received HD channels for Fox and CBS. This TV is in our bedroom and doesn't have a cable box. Basically, we use it to watch network TV before bed. Why pay for a cable box?

When I looked into my "technical problem," Comcrap informed me that they were "encrypting" the HD signal and I would need a cable box to receive FREE TV. Basically, they could have cared less. They want to force subscribers to pay a monthly fee for a box and remote and "HD" gives them a way.

Unfortunately for them, I was able to get a better deal for cable/internet from Uverse. In a tough economy, one would think Comcast would try to keep customers happy. Not give them the shaft.