Weekends

Last weekend Allison and I got out of town for the first time in a while.

A fair percentage of the bulb-based flowers in the US are grown about an hour north of Seattle in the Skagit Valley. Vast fields of daffodils, and then tulips, bloom here every spring.

It looks kinda like this: http://en.wikipedia.org/wiki/Image:Skagit_Valley_1.JPG

Except we got there before the tulips bloomed, so there were a few vast fields of yellow daffodils, then lots of green soon-to-be-tulips. Pretty, but not as spectacular as the billing. (yet)

At which point we drove over to Whidbey Island and took a ferry over to the Olympic peninsula. After a quick lunch in Port Angeles we drove up to Hurricane Ridge.

Basically, it's the Alps, in North America - nice winding road, no guardrail, 5500 ft up in the mountains - huge views out over the valley to the mountains. The view from the top definitely lives up to the expectations. It is probably the most spectacular place in the US. (HW1 in Big Sur comes close - and there are restaurants there so you can sit and drink wine and enjoy the view for hours - possibly better for that reason)

Pics are here: http://www.facebook.com/album.php?aid=2134065&l=97ea7&id=36620541

Took a more southerly ferry back to Seattle in time for dinner. Not a bad day at all.

Sunday we were back under the clouds - time to catch up on nerdiness - played Crysis some - it's the best approximation yet of a first person action movie - not much in the way of story, but fun - big explosions, so on.

Portal on the other hand is better in my opinion - good sense of humor, smart puzzles - interesting.

This weekend - depends on the weather - lots of parks to explore.

Nick's Tip of the Week: never use the front brake on a mountain bike going down a really steep hill. It can result in a spectacular incident. Requiring band-aids.

A Day in the Life

First thing - it's been nearly a year since the wedding. The life situation for Allison and I has changed somewhat in that year - new jobs, new cities, we're still exploring and having fun.

It was overall a typical weekend day - shops and market in the morning... split a piroshky (cinnamon cardamom raisin) and the just-out-of-the-fryer tiny cinnamon donuts at the Daily Dozen... pick up some fresh veggies and fruit for the week... back home for lunch.

Walked around the Seattle Center and walked a few errands (new camping 3L pot and sporks at REI) in the afternoon... then cooked dinner.

Mushroom ravioli with a browned butter/thyme/vegetable/reggiano parmesan in a vegetable stock sauce. Side of broiled asparagus. This was one of the simpler/better dinners I've cooked lately.

Allison made a strawberry granita for dessert, and we split a bottle of Pommery champagne.

All in all - good day, good food, time to fall asleep watching a movie.

Updates

Well, my mom is recovering - the first week after surgery is pretty dicey though - lots of monitoring for brain swelling and small strokes and such - signs are pointing to a full recovery - at least she's able to get up and walk around a bit already - and she sounds normal enough - moreso than after the back surgery last year.

In other, more upbeat news - due to lack of seating here I bought a Sumo Omni - freakin huge (5' square) pillow/urban lounge bean bag thingy - it arrived yesterday and I immediately proceeded to fall asleep in it - good sign.

It's comfy, and foldable and feels durable enough. Priced cheaper than more traditional, less comfortable seating too.

Link http://www.sumolounge.com/omni.shtml

Also - for the musically inclined - Helio Sequence - Keep Your Eyes Ahead - still thinking it's the best album I've found in a while.

Yikes

The Bad - my mom's in the hospital with a brain aneurism.

The Good - she's generally fine - it's minor and operable - should be back to normal in a month.

Operation to fix it is tomorrow morning - think positive.

Better answer:

After trying to think through the current economic situation and well, not knowing enough - here is someone that fills in the gaps - good article, not too technical.

http://www.annsjournal.sampasite.com/Wall-Street-s-House-of-Cards.htm

Economics

As someone that just made a financially risky move - left large corporation for small corporation 3000 miles away, downsized materially - sold a house, car, lots of furniture and stuff, I'm wondering what the ramifications of that are. I seem to be doing alright - but what does the future hold economically - is buying a residence with the proceeds from the last one a smart decision right now - what about going back to school, how will the job market fare - these are rather expensive questions to ask.

For all the reasons given in the news for why the US economy is in trouble, here is my attempt (as someone who has er, just over a year of business class experience) at summarizing what's happening. I may miss things, but hope to explain the basics somewhat correctly.

- The home value question.
Are home prices simply supply vs. demand?
This seems to be a local issue and not a national one - if the economy in a city is strong then it is a desirable place to live and home values will be higher than an economically depressed city (i.e. Detroit). However there seem to be national forces at work here as well: value of the dollar and the availability of credit. Basically - where does the money come from for people to mortgage a home, and how much is that money worth.

Mortgage market problems - what's the deal?
Pretty much anyone that buys a home does so with a mortgage. So the bank gives you money to buy a house, and expects that you'll pay it back with interest over some period of time. Assume you have a fixed rate mortgage at 6% - the bank then generally knows what payment to expect and when it will receive it. This is pretty predictable. (mortgage prepayments and defaults being the risk, however the riskiness is tied to how much interest they charge to make it worth their risk)

The issue at work here is where does the money come from that the bank loans you. People deposit money in savings accounts or CD's - so the bank pays them say 3% for their reduced liquidity and then loan that money out to other people at 6% (even if after some of those loans are paid down early or default the bank only gets 5% on average) - yay profit. Sounds nice and simple however it's a bit more complicated than that.

The loans that the bank creates can then be bundled and traded as mortgage backed securities - basically banks bet between themselves and other trading houses on how much of the full value+interest of the loan portfolio they'll get back based on the riskiness of the group of mortgages - 30 year fixed conforming loans are low risk, something like a 3 year ARM is on the risky side.

If the economy slows down people may choose not to buy a house or may be laid off and not be able to pay their mortgage. The result of that is lowered values on those mortgage backed securities. If the properties are foreclosed on, the end result of the bank sale may be far less than the value of the loan. Each individual loss may average under $100k, but after a few thousand, or few million, of those small losses it adds up to a fairly large loss of value. The holders of those securities may find themselves in need of lots of cash to cover the difference. Recently Countrywide, Carlyle Capital, and a few others, are companies that forgot that there had to be sufficient cash to cover that possibility and ran into trouble.

Also involved in the 'where the money comes from' is the Fed, and the value of the dollar. But it's quitting time.

More thoughts to follow...

Updates

Had some visitors over the weekend - Tim, Sarah and John were in town before Tim ships out to various ports around the world. So Allison and I put together a standard weekend in the city for them - beer, more beer, and lots of walking around to see the sights. Went well - dinner at Etta's was good - well executed fresh seafood - if less experimental than the other restaurants in that family.

This week/weekend should be quieter - need to finish up taxes and grad school prep stuff.

In other news - I'm finally mostly stable under 200lbs. Granted 198/9 isn't much different statistically from 202/3, but it's a trend in the correct direction. There's something to this fresh food and lots of walking lifestyle after all.

More concert

Bela Fleck, the Flecktones and the Seattle Symphony

Great show - very smart music.

Also - it's like NPR's audience was all in one place at the same time. Very eclectic mix of people.

Travels

Interesting notes from the weekend - first weekend completely out of town since the move.

- Washington has a pretty if quiet state capitol (Olympia) - the requisite large stone building surrounded by a large city park - neat main street with small coffee shops.

- Dancing Goats coffee gives away the burlap coffee bags in which their beans arrive in exchange for a $1 donation to a local childrens' charity - we thought that was neat and now have a huge burlap sack - will be useful for protecting the trunk of the car when carrying home potting soil and such this weekend.

- Portland is a neat place - same general northwest-y character as Seattle - very eco-conscious, walkable, pro independent business, pro local food - just on what feels to be about half the scale of Seattle. It also is much cleaner and better organized for the difference in scale. Also - their Pearl District is a great example of new urbanist planning and execution in the US. Not only for the design but the fact that it's all about the same age, less than 10 years old in this case - props to their urban planning department for being able to completely level and redevelop a whole city (warehouse) district in such a short time. For that reason though it looks very similar to the post WW2 districts in Germany - 6-10 story flats with shops at street level. Hopefully it ages as well as those have. My current neighborhood in Seattle could learn a lot from their example.

- Gosser beer - find it at Clyde Common in downtown Portland - only place I've yet found it. It's one of the major Austrian brews. Tasty.

- Best recent music find - Helio Sequence - Keep Your Eyes Ahead album - interesting sound, and surprisingly upbeat for music from this region.

Next up... ???

House closed today.

The earnings are enough for a down payment on an in-the-city place here, though given the economy presently I'm going to wait a bit and see what happens.


Quick estimate using nice round numbers.
Purchase price -170,000
Home Improvements -10,000
Interest Paid -20,000
Tax Benefits +14,000
Sale Price -Fees +203,700

Total Earnings +17,700 over 1.75 years
Earnings Per Year +10114
Approx Percent ROI +5.95

Over most of the period of home ownership, my 401k was earning a similar percentage, and even the HSBC online savings account was over 5%, so the earnings on a single family home in one of the most-positive real estate markets in the country were better, but not exceptionally so, than traditional investments.

Next up - more detailed numbers and how it would have compared to renting.

Weekend

It was a nice, sunny weekend out here. We spent Saturday driving the length of Lake Washington, stopping at a few of the parks along the way to wander and see the sights.

Sunday we hit the markets and came home with a lot of vegetables, then went to check out a small sailboat - sailing is apparently the weekend thing to do around here when the weather is decent. And, like my car decision last fall, if used only occasionally, the two options are rent, or buy cheap. I took the cheap car route, and probably will pick up a cheap boat as well.

The house closing is on Tuesday - still no decision on the market here. It looks stable enough that purchasing might not be a bad idea, but I should probably give it 6 months and see what sells during the prime part of the year, and what doesn't.

Well, time to start the day here.

General Update

1) House is under contract and the closing date of the 21st is fast approaching. Everything looks good thus far.

2) What to do with the cash... short term is obviously an online savings account, but given the fractional at best appreciation from real estate, is buying another place the best solution right now?

Two ways of thinking here: looking at the economy, inflation is coming, odds are sooner rather than later, and having a fixed rate, fixed amount, mortgage is an interesting way of benefiting from inflation.

The other way of thinking is to rent for 2 years while getting a degree and saving money enough to make a larger leap then. Interest rates will have to rise to control inflation... it is a bit more of a gamble having a fair amount of cash in that situation, even if it is invested safely.

Currently in the city rent+parking on ~750ft^2 is ~$1500/mo. To buy an equivalent size and location place with 20% down the mortgage + taxes will be ~$2000/mo with another $300-400/mo for condo dues. That is a massive difference that currently negates any tax benefits to owning.

I'd like to say - oh, I'll be taking classes that teach me how to turn this into a win win situation - but one thing that I have already learned from business classes is that predicting the response of the economy does not tend to give accurate results.

3) Seattle - still cool. The winters here are quite grey. It's already February, so that should be improving soon enough. At least there's still a lot of green - few trees lose their leaves it seems.

4) The mushroom selection and quality at Uwajimaya is awesome. From spicy Honshimeji to really meaty Shiitake it's no wonder I wasn't that into mushrooms in NC - even the Fresh Market ones were already dried up and well, stale.

5) Apparently the far out suburbs and mountains are getting a lot of snow this winter - haven't seen any of that apart from some flurries in the city. People complain about traffic or the weather... it is really nice not having to deal with any of that anymore. Just throw on a jacket and within a mile anything's available. Tons of food of any nationality in both grocery and restaurant form, live music, shopping (bargain and nice), books, movies. Seems like the ideal way to live imo.

6) The job has been busy lately, but I seem to be staying afloat - this is good. And not working weekends anymore is a great change. Falling asleep at 9PM is kinda weak, but getting adjusted to the early schedule will pay dividends once classes begin in the fall. (UW evening MBA program is my aim at this point - going through the application presently)

Experience #2

iTunes movie rental - downloaded 1.5GB (2hr) movie in 65 min. And that was for a generally new release (Ocean's 13 - better than 12 - bit campy as usual, but entertaining). Not bad!

So, from someone that hadn't rented/gone to a movie in ah 5 months, I've now rented 2 in the past month. Apple has thus succeeded in capturing the lazy movie watcher demographic.

w00t

The house is under contract. Closing date of Feb 20-something. At which point NC is entirely in the past.

From the 'It's about time' files:

I think the house has sold (counteroffer accepted). I should be getting paperwork tomorrow that finalizes this.

It was a learning experience if anything. And I'll be sure to post a full financial analysis including tax benefits, to assess the annual rate of return and see if I would have been better off just putting the money in mutual funds, once I get the final check after closing. Initial estimates only point to a 7% per year gain... we'll see how right that is.