Kaulapi World

Thinking about backdating this entry in part to memorialize a very busy and eventful November 2009.  As it turns out the end of 2009 presented another set of crossroads for sure.  I had figured there would be a handful, starting with a new division, enjoying my first fall in 4 years in a non-evening student capacity, getting my bar results, and some other normal life developments.

My transfer to my new division has worked out great so far.  Also have had an opportunity to compare and contrast with the old one, and based on comparisons on many levels, my new peers, work topics, middle and upper management philosophies, working styles.  I can say that it’s been almost like working at a new place entirely.  Although its only been a few months, I can say that I have no regrets in requesting the transfer earlier this year.  I’m working in a topic area that I think fits me better now, an area I had an interest in for a while, but never really got into it until law school.  Although I can’t point to direct evidence, I got a sense that my JD helped make a compelling argument for my transfer, which in a backhand way was something that I think was missing from my old division, an overall recognition of the value that my 4-year investment could bring to the job.

Being a normal joe, non-evening student has been a refreshing change of pace.  I’ve been able to catch up on a lot of netflix movies, come home at a decent hour, spend time with Hana, not worry about having to read for class, or even go to class anymore.  It’s also given me some time to read up on the changing nature of the profession that was going on while I was in school.  Some sobering facts about the relative value of my legal experience and others around the country and at different points of their careers.

Then there are my bar results, I missed the cut by a very thin margin, either by a handful of MBE questions, or one higher grade on a single essay question, I probably would’ve made it.  This would put me definitely within striking distance should I decide to fire up the books again but there have been a few game changers which actually put into question whether I’ll be back in study mode anytime soon, or will be better off just putting a hold on it.  Looking back on the experience I can say that I’m more irritated than disappointed by the outcome, it was pretty clear after about a week of bar prep that the exam was just another example of like a lot of other things in the legal profession, another round of intellectual hazing, although this one is clearly more of a test taking performance test than a legal competency test.

The reasons to put retaking the bar on hold seem to be mounting lately, there is the deteriorating economy in general, and the trade-offs between being fully employed in a non-legal capacity, with decent salary and benefits, sane work hours, and several years of consecutive work experience.  There is also the reality that the legal profession may be undergoing massive structural changes right now that have put a lot of well credentialed and experienced attorneys in the job market.  But the main thing on my mind is that we learned recently that there will be a little one coming in 2010.  At least for now I’m ok with putting that first in priority above all else.  The law can definitely wait.

Geocities shut down last week, this was my last post on the kaulapi site:

Probably the last post on this site before Geocities goes poof. I’m just about moved over to the mirror site, although I’m kind of wondering what kind of format this journal should take on from here on. Since I’ve wrapped up school and the bar exam I’ve been keeping pretty busy just enjoying the change of pace. I started my new division at work a few weeks ago, and have been wrapping up my last assignment to make for a smooth transition.

Bar results should be coming out shortly, but with the job market the way it has been, I’m relatively calm as my current job situation will not be changing anytime soon, pass or fail. I’d like to pass the first time and get it over with but I’m fortunate in my situation that there is about zero pressure. Stepping away from the study of law has given me a moment to reflect and reaffirm some of the fatal flaws of our legal education system, which I think can be summed up as 3-4 year long intellectual pissing match between very competitive and bright personality types.

All in all I’m just enjoying life, amazed at just how quickly chapters close, others open. More on this later on the other side. It’s been an interesting decade years on this geocities site. Hopefully be many more.

It’s September and its been a nice change of pace not being a student. No case books to read, no late night lectures to attend. It seems like I’ve been in the student mindset for ages now, at least 23+ years now, not counting pre-school. I suppose it was a long journey, from time to time I glance at the freshly framed diploma I have leaning against the wall, being that I’m not sure yet where exactly to hang it up. I need to figure out how the shelves and other furniture in the room line up first.

So in the meantime I’ve been just going to work, coming home, catching up on some netflix movies, cooking, being domestic, and cleaning up a few hefty piles of paper that I’ve collected over the years. Been coming up with some random finds and notes from my grad school years and before. I seem to be a true packrat when it comes to notes and other thoughts put down on paper.

Some interesting and vivid dreams lately. One a few nights ago, in my dream I was talking to a senior congressman at a fundraiser in a large reception ballroom. The conversation itself was very trivial at first, covering various small things, random thoughts here and there. There are a number of people milling about, socializing, networking what not, the occasional politico would stop by and say high, name drop and ass the member’s ass. I recall being somewhat interested in the conversation, but for the most part I was a little bored. Suddenly the member decisively turns to me, announces that he is about to address the crowd that had gathered in his honor, and asks me what I think he should say to them. Caught a little off guard at first, I pause a moment and then tell him that he could talk about his usual promises and commitments he is setting to the people for the new election year, the programs, the federal money that he is bringing his home state. Then I mention briefly that he could talk also talk about the oath of public office that he took many years ago to uphold the U.S. Constitution, to defend and protect it against all enemies foreign and domestic. The old man nods in silent agreement and then speaks aloud with a booming voice. The crowd is suddenly silent, and all eyes are focused on him, listening attentively. I slowly step backwards into the crowd and listen to his speech.

Pretty quiet for August, still recouping from the mini-marathon that is the July bar exam. Plus I’ve been pretty busy with work. More developments, some good, some just so-so. Meanwhile this past weekend I went up to Wilmington and the Brandywine Valley, saw some gardens, and another part of the country. Drove down the Delaware shore to Rehobeth and Bethany Beach, ate some mean Blue Crabs and Fried Chicken. Burned through several hundred miles of country side.

Vivid dreams lately. Going to an ancient temple, and was passing through an enormous stone courtyard full of religious statues and gardens. Along the way saw a lot of old friends from way back, some of whom I haven’t seen in years, all sort of hanging out in the courtyard. I recognized a lot of old wrestling buddies, some sparring in a stone lined ring practicing grappling or sumo, others just hanging out with other friends. Didn’t have time to stop and talk, but promised myself that I would stop by and catch up with them on my way back.

I think vivid nature of these dreams have bad something to do with the fact that I’ve been bogged down in bar prep, lots going on on many fronts. Cut down my work hours to about half time, allowing me more time to study and get back into somewhat of a regular work out schedule.

Was thinking about having a deep and insightful post for this entry, but honestly, I’m still recuperating and just chilling out from my last round of finals and readjusting back to work. Enjoying the new apartment, and life after night school. I just went to the school today to pick up my cap and gown, got borderline assaulted by the career center staff seeing what kind of prestigious sounding attorney position I had snagged post graduation.

As for me, I’m going to tough it out and reassess as appropriate, maybe after tha bar exam results come out, then a few months later, no matter what the circumstances may be. In the meantime, I’ve got a degree, and will see how far it’ll take me, either at my current agency or another. In the interim while I’m studying, I’ll be counting on Kina’s songs (as accompanied by her family) to keep me company.

Finished my last final a few days ago.  It hasn’t sunk in just yet, but barring some suddenly stringent grading policy, I should be a Juris Doctor officially now.  Part of me hasn’t accepted it just yet, thinking that I’ll believe it when I get that diploma in my hand.  In the meantime, I’m just enjoying not having to read any thick red/green/blue/brown books a t least for the time being.

Last day of classes today as a 4E, that is evening law student.  Kind of a numb perspective really, having gone the part-time route for close to 4 years now.  I ended up taking a lot of summer classes, which makes it almost 4 years straight with no breaks in between.  Wrapping up things for the semester mostly, I’m doing course evaluations and getting ready for my last round of review sessions and finals.  Then it’ll be off to bar prep class for about two months.  Looking forward to being pau for real come August.

Probably  due for an update since my last entry in march.  I’ve actually moved to a new place, a couple of stops along the metro line.  So far still getting used to apartment living.  Its an upgrade in many ways, much bigger space, lots of natural sunlight during the day, and a closer commute to work due to the closer walking distance from my place to the metro station.  The thing is that I still feel like I’m living in a hotel suite or something, and will have to move out in about a week.  I suppose it takes some time to get used to it.

I was able to take advantage of the zipcar fleet to move all of our stuff, used some old boy scout knowledge to pack up and tie down a cargo load in a pickup truck.  I’d say we moved everything in about 6-7 trips total, not bad at all.   Since our last place was furnished, the concept of buying furniture was completely foreign one.  We also got some pretty good deals on furniture given the slowing economy.  IKEA is pretty amazing.

Ides of March, just got through some of my taxes for 2008.  In many ways its been a sign of getting older in that filing has gotten more complicated as opposed to years past.  It seems as the income slowly creeps upward there are additional forms to fill out, calculations to double check, and accepting the fact that some deductions and credits simply don’t apply anymore.  In a strange way I actually enjoy the number crunching part of it, Hana jokes that maybe I should’ve considered accounting instead of law.  The other part of the madness this time around is the nagging issue of the market uncertainty the world has been seeing, and the begging question of how to plan for savings and retirement account contributions with all the market volatility.

Personal finance and overall economic stability has been a major distraction for much of the last 6 months now.  In every angle of analysis I come to the conclusion that we’re in decent shape, and could weather a storm or two, should something happen.  However there is that uncertainty of not being fully prepared for the possible sudden downturn, or major event that turns everything upside down, like a black swan event or something.  I’ve read a bit about personal risk tolerances when it comes to finances, and I’m relatively risk adverse in many aspects.  This could be reflected why I’ve decided to work on my law degree part-time, while working full time, why I purposefully minimized the amount of student loan debt I took on over the past four years, and the fact that I’ve made every effort to live well below my means, even paying off interest and principal while still in school.  Still I worry that even with all the preparations, it might not be enough to survive sometime that comes along and blindsides us.

One conclusion that I’ve come to is that there is really no such thing as a safe asset class, given this uncertain environment, and the unprecedented steps that the government is doing, you can’t pump in Trillions of dollars one way or another without having some kind of unintended consequences, any of which could be disaster to the overall market confidence.  I hear people talking about this environment as being the time to buy, with many blue chip stocks at historic lows, and housing prices plummeting, mortgage rates also very low, especially for those with good credit.  The thing is that all of this stuff is really a form of legalized gambling, and that there is always a form of risk here and there, it all depends on how much you can first of all afford, and can stomach.  There’s also this concept that paper price asset reflects an actual value of a stock, regardless of the production power it may have in the form of the company’s profitability, or fiscal health.  Who cares how much the stock price is relative to the price you purchased it if it doesn’t produce any income as dividends?  After all the only way you can profit from a surge in a stock price is to sell it, and then get whacked with the capital gains taxes. By this rationale, real estate at any price in general is not an investment at all, its just a form of shelter.  I think that the sooner people start to recognize these things, maybe it’ll mark the beginning of the the long road to recovery and stabilization.

Meanwhile in the other March Madness, Wisconsin got in at a low end, 12-seed in the Eastern Division, up against a surging Florida State, hopefully it won’t be a mirror of the bowl game this past football season.  If Bucky can pull off the upset, then they’ll probably have to face a tough road, likely facing Xavier and then Pitt.  Who knows, typically Wisconsin does better when no one is expecting them to go anywhere.  The final four bid from a few years back was an example of that.  I’ve filled out a bracket or two, just for fun, been pretty distracted this year so I can’t say that I know much about the strength of picks.

Keeping an eye on the markets today, as I have been a lot lately, and noted that the DOW checked in just about 50% of the peak we saw this past summer 2008.  That’s a pretty significant statistic, 50% down now if your portfolio tracked the major stock indexes.  Before I shutdown my workstation for the day I took a look at a few of my account balances and cringed the thought of what the latest -3% drop might do for some of my long term accounts already in a sea of red for the year.  I’m sure that I’m not alone in this boat, a lot of people I talk to are talking about painful losses, others just don’t bother to check in since they know that its bad bad bad.

All this got me thinking about a possible breaking point for 401k contributions, and the start of what might just be an overall downward trend, if things were to continue going this way.  In breaking point I mean that at some point I could see a significant number of 401k participants might just fold their cards down and refuse to play.  It goes to the statutory structure of 401k deferred tax retirement plans.  You pay a portion of your paycheck tax free into a retirement account that you can’t touch without penalty, until you are of retirement age.  To sweeten the pot, your employer matches a certain percentage (1%, 5%, 10%, 15%, etc.) as part of a benefit package.  Depending on the setup, you can then invest this money into regular securities on the market, or certain designated index funds proscribed by your employer.  The additional benefit is that any gains you make on your account are tax deferred until retirement, at which every withdrawal from your account is subject to income tax.

Logically, there are several benefits to participating in a 401k program, but most powerful are the tax deferred incentive for contributions, and the tax-deferred status for gains.  However both of these benefits are tied to a single assumption that has been challenged in the recent market trends – an aggregate positive rate of return over time.  Everything is fine when the market is appreciating at an exponential rate in boom time, but in prolonged recessions marked by triple digit losses in almost all sectors on consecutive days, weeks, at some point the incentives for contributing to a 401k, will be canceled out by compounding losses in the stock market.

I’m getting a sense that what might be coming up, could be a breaking point for 401k contributions to zero, or at the very least, to the minimum employer match.  Depending on each company’s set up, and fund allocation, we’re most likely looking at a 10%-15% drop on the year so far across the board, given the drops in the major indexes.  With a SWAG estimate of 20%-25% tax rate, you can see that if the mounting losses continue, at some point in the near future they’ll meet or cancel out any tax benefit from a 401k contribution.  If and when this happens, I could see a shift in behavior for those who are able to scraped by to meet the max ($15,500 for 2008, $16,500 for 2009) for the past few years, even despite all the economic turmoil in the markets, to one of cash savings and liquidity.  In other words, things are so bad that even the most aggressive 401k contributors would conform to 401k deposits of 5% or lower.

One would think that a change in investment strategy of this magnitude would surely have a significant affect the overall market, which would indicate an accelerating or a market sell off.  From a very basic sense, I think this makes a lot of sense.  I’ve been looking at what has been happening lately with the markets, and have been feeling more and more discouraged, thinking “whats the point?”  Why save the money for later when it can just depreciate by double digits in a single day?  I’d be better off putting that money into cash, and then eventually into US treasuries or some kind of short term CD.  This might lose against inflation, but at least it wouldn’t go down in value.  Then again, maybe the best strategy for this market in the short term is to simply not play.

Lame disclaimer: I own some publicly traded stocks, bonds, and other securities in the market, some in regular investment accounts, others in tax deferred accounts and others in retirement accounts none of which are doing particularly well so for in 2008 or 2009.  Therefore, none of this commentary is intended to, or should be taken as investment advice in any shape or form, express or implied.  These are all just random thoughts and observations that a novice could do in these interesting financial times.