Ace Wisdom

This blog was originally intended as a “financial forum” and has evolved into everything from a personal diary to a document of family history. Today is “financial”.
The stock market dropped 400 points today. The alleged reason was that there is “uncertainty” in the money markets with reference to “sub-prime” loans. What the hell does that mean?
For many years, if you wanted a loan to buy a home you needed 20% down. To get favorable rates, your still need 20% down. Once you reach that level of equity good things happen. You avoid mandatory insurance paid and you get preferred interest rates.
In recent years, you could buy a home with 0% down and marginal credit history. You do pay for it with higher interest rates and imposed financial conditions. The penalties for default of a monthly payment are assessment of “late” fees, potential eviction and surrender of your first born child.
And then of course, the financial markets got creative. Adjustable rate mortgages were offered to get you a low rate initially after buying a home and then the rate would adjust with market conditions following “prime rate” or the clever “LIBOR indicator”. This means you can afford the house initially but if your friendly lender increases your monthly payment because interest rates went up, you could find yourself unable to make payments.
Don’t forget the home equity loan. This says that as the appraisal of your house slides upward over a period of time, you can borrow money on the house equity including increases. The home equity loan is at a higher rate than your mortgage interest rate and people find themselves with 0% equity in their house after taking a home equity loan.
The stock market is in turmoil because tighter money seems to be happening. The loan companies are making it tougher to qualify for loans. The demand for 20% down is increasing. “Home equity” loans are becoming tougher. Appraisals of home value are tightening up. Most important interest rates are rising.
There have been more foreclosures recently evicting owners. A large mortgage company holding low quality loans recently went bankrupt. People expecting to refinance their home after a grace period of 5 years at a low rate are finding unbelieveable “high” new loan rates.
It will take time for the mortgage market to settle down. Maybe 2-5 years. The result will be continued uncertainty. Trust me! Big money banks and loan companies will survive. The person with a difficult loan situation will not.
The advice Grasshoppers is keep the mortgage you have. Don’t take out home equity loans. Plan to put a significant amount into your home (20% downpayment) in order to get favorable interest rates. Then go to a movie (preferably in the afternoon at discount rates) and enjoy the day. This too shall pass.
Love,
Dad

Grasshopper No.4 blogs about his dis-satisfaction with Barry Bonds. No worry! There is a solution. Read on!
I played golf last week with an enjoyable group of seniors. No matter that our group was so slow that as we approached the last hole that we were 3 holes behind everybody because we were so slow. Does it bother seniors that they are holding up many, many other golfers? Hell no.
I shot a 51 because of very slow play. I found out the next week that it had been reported as a 57. Normally I’d get upset as a matter of pride. Then I figured no, the 57 gets figured into my handicap and I will get more strokes in future match play. With seniors this is nothing to get upset about.
Then as I was about to tee off yesterday, one senior came running to the tee just in time for his turn to hit his first ball. It seems that he drove to the wrong golf course and had to hustle once he discovered his error. Wrong golf course? Yep. Remember he is a senior.
Which brings me back to Barry Bonds. He might hit the home run that gives him the all time record but who cares. Everybody is destined to become a senior eventually and nobody will be able to remember the event anyway. Isn’t that the perfect solution. Nobody will ever remember.
WTMJ was running a contest on “calling” the record home run on the radio. If you were the announcer, how would you describe Barry’s historical shot? There were lots of creative ideas. One dealt with marking the home run with an “ass-terisk”. One “call” broke to a commercial sponsored by Monsanto and promoted chemicals that enhance the performance of everything (the reference here that Barry took chemical steroids allowing him to play better). The final “call” has the record home run ball being thrown back onto the field by a fan, chased by a stray dog and unrinated upon. It in fact is a record “foul ball”.
The lesson here Grasshoppers is that Barry Bonds record home run is “much ado about nothing”. As the population ages and they become seniors, they will forget. In the sands of time it means nothing. So don’t get your shorts in a bunch. This also will pass. Think like a senior.
Love,
Dad

Years ago, when I was a kid at the City Club, I heard stories about “free lunches”. If you came into the City Club and paid a nickel for a beer, you could get free food. Apparently large “spreads of food” were prepared like a buffet and you could eat all you wanted. The amazing part of the story is that for one small nickel you could have a 16 ounce beer and free food.
There are old pictures of the City Club with a big advertising billboard painted onto the side of the building proclaiming “5 cent beers and all you can eat”.
Apparently in the early 1900’s this promotion of food with alcohol was a national practice. The National Restaurant Association claimed that it was unfair. The restaurants felt they were losing business because taverns where stealing customers by giving away food with alcohol. Unfair, unfair, unfair.
In the early 1930’s, legislation was enacted that stopped the practice of advertising a free lunch with purchases of alcohol. Many States (I don’t know about Wisconsin) enforced the law disallowing deceptive promotions.
The truth of course is that there is no free lunch. Taverns such as the City Club had to make enough money on the beer purchases (along with other things) to cover the cost of food. If the tavern didn’t charge enough, they would eventually go out of business. Restaurants weren’t smart enough to create there own promotions to compete with taverns.
So again, the City Club was part of history. It’s practice to promote free food with nickel beers was ahead of the rest of the world.
The lesson Grasshoppers is that nothing in life is “free”. If something seems to be to good to be true, it probably is. I can’t imagine what you’d have to charge for a 16 ounce beer today to cover the cost of beer and a “free lunch”. Probably about $10. Believe me, there is no free lunch!
Love,
Dad

We live in a big world!
The U.S. has somewhere around 3-4% of the world population. Last year we passed the 300 million mark as far as U.S. population. Don’t ask me if those are just official citizens or if the number actually includes illegal immigrants. It doesn’t matter.
That means 96-97% of the world population lives somewhere else in the world.
Which brings me to China. You hear a lot about products being made in China. China also buys our products. Walmart. McDonalds. Caterpillar tractors. Kohler fixtures. So there is huge financial reward for both the Chinese and American companies.
China has a huge rural population. 800 million people live away from the major metropolitan areas. Think about it. 800 million people living in the country in China compared to the total U.S population of 300 million. By the time they all buy TV’s, cars, gasoline, lawn mowers and toilets they want and need, somebody is going to make a lot of money. That does’t take into account all the people that live in the Chinese cities.
China is the immediate opportunity and will occupy conversation for a long time. It represents jobs and foreign opportunities for many companies.
After China, it will be South America. After South America, it will be some place else in the world.
The lesson Grasshoppers is that there is a lot going on in world and the U.S. with all it’s technology and great products stands poised to profit. So when you hear about manufacturing jobs disappearing, there are many jobs and opportunities being created. We have 97% of the world’s population to sell to. Now there is a picture. 800 million Chinese driving Buicks. Keep the faith.
Love,
Dad

An acquaintance named Hector came to visit recently. I hardly know Hector but I must have made a favorable impression on him.
Hector was born into a large family. Lots of brothers and sisters. It didn’t take long for him to “fend” for himself. He missed a formal education but his “street smarts” were incredible. He ate discarded food and accepted handouts whenever possible. Eventually he retreated to the country to escape the confusion that goes with city living.
Just outside town, Hector found the serenity he was looking for. In his exploration, he found a huge mound made of limestone with lots of open holes. Upon climbing the stone, there was a cave that provided shelter. So Hector made himself at home. Over time Hector married and started his own family.
When Hector arrived on my doorstep, I told him I didn’t want him or his type around. He ignored me and and I just couldn’t get rid of him. So I called in some help.
You see Hector is a fricking mouse. He climbed the front stone facade of our house and burrowed into a crack where the mortar had deteriorated. He pulled out the insulation and left little brown droppings all over a cement ledge. The mouse is living in my house. I’ve got a mouse in the house.
I had a mason repair some of cement between the limestone in front of our house. He found the mouse opening. It is now sealed up and hopefully Hector is not able to get in.
The question is “when the mouse opening was sealed”, did we trap Hector inside the house? If we did, we just might encounter a mouse during one of our trips down a hallway at night. We are armed with four mouse traps in strategic locations. Hector is on our wanted list.
I will win the battle with the little bastard (if he is in the house). He may be cute but he is creepy. There will be a dead mouse in the house.
I guess living in an area where there was an empty farm field only 15 years ago encourages critters indigenous to the area to take up lodging.
The lesson Grasshoppers is that you don’t have to tolerate vermin in your life. Throw them out. Surround yourself with friends that you love.
Love,
Dad

I have tried to post on this Blog all day and have been denied access from the Web. The site finally seems to be responding.
I called my “site manager” in Minneapolis. She acknowledged that she also was unable to enter my Web site. Her advice was “wait it out”. Apparently host computers have problems from time to time and they eventually get fixed. What I want to know is, how come it takes days to get ahold of Grasshopper No.5 except when I have a computer problem? She answered my e-mail in less than 5 minutes. Go figure!
My Uncle Bob in Florida apparently will be starting treatments for prostate cancer. The prognosis is very good. As with most cancers, the treatments are difficult. Bob is 83. My dad Bucky (his brother) would have been 87.
We had heard that the new movie release on DVD, Premonition, was very good. Upon visiting with Grasshopper No. 4, we found out he had a copy of Premonition. So we get to see it free.
I played golf on Monday in my Senior Golf League. Have you ever said something really stupid and then wished you’d kept your mouth shut. Last year I played golf with Clarence and his buddy Don. They are both over 85. Don was rather fragile last year and he actually fell over making a swing at the golf ball. So Monday during my round I asked about Don with “how is he doing”? Another golfer said he died. I replied I was sorry to hear that. Another golf said “he apparently is doing very well”! The whole group of golfers broke out in uproarious laughter. There was no disrespect. It just added a little humor to a sad situation.
Collin’s last soccer game for the summer takes place Thursday. I am still the good luck charm. Every match I go to he scores a goal. When I miss a match (I’ve missed two), he doesn’t score. Last week he scored a goal on a windy, windy day but his team got “creamed”. A player on the opposing team had 4 goals. I have learned that speed is leathal. The opposing player was very, very fast and once he broke free towards the goal with the ball, it was all over.
Being suspicious as I am (no you say), while having our Camry serviced including rotation of tires, I got a call from the service manager indicating that one of my tires had a nail in it. He asked if they should fix it? Dah! What he wanted was authorization to exceed the dollar limit I had imposed. $25 to fix the tire. He handed me a threaded screw when I picked up the car indicating that it had caused the low tire pressure. Now the question is “did the tire really have a screw” or did they pull the screw from the garbage and never really fix the tire. Maybe they screwed me! Naw. They wouldn’t do that. Would they?
So the Summer marches on. So far our transplanted trees are surviving. We are too!
Love,
Dad

A good job is a cherished thing. A great job is rare.
The Milwaukee Bucks drafted a Chinese basketball player named Yi Jianlian. He is seven foot tall, thin like a greyhound and can shoot soft jump shots. He stands to make the rookie maximum of $4 million the first year.
Guess what? Yi don’t want to play in Milwaukee and he refuses to talk to his new employer (the Milwaukee Bucks organization). He wants to play in a big “chinese populated” city like New York, Los Angeles or Atlanta.
It is good thing that his name is Yi rather than (Ying Yang) as in “up yours”. Worse yet would be Long Duck Dong (the exchange student in Sixteen Candles).
Now my rant! Who does Yi think he is? The National Basketball Association makes the rules, pays outrageous salaries and generally provides a fantastic standard of living. Yi has been offered a job and he essentially has said “stick it”. If I owned the Milwaukee Bucks I’d move on and tell Yi to stuff his attitude up his ying yang and go live with Long Duck Dong.
I guess it is a sign of the times. There is this attitude that the world owes me a living. What ever happened to being grateful for a $4 million per year job. It buys a lot of Chinese rice. Theoretically, Yi could play for one year, save most of money and never have to work again. Am I missing something here?
I know I don’t understand the Chinese culture. If the merge of Chinese and American cultures proves difficult, it seems $4 million per year to start with the prospect of $15 million per year in the future should solve many problems.
The lesson here Grasshoppers is that if somebody offers you a job for $4 million a year, take it. You are one of the chosen few to make that kind of money. Better yet quit whining.
Love,
Dad