Kaulapi World

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.

Sticking with almost an annual tradition for me, MLK day has been a day of personal reflection generally, kind of a like a new year of sorts.  For the most of the past several years it has come at the start of a new spring semester, still in the new calendar year, it seems fitting to take a look back and forward.  Looking back I still reflect on the significance of MLK Jr. in general to me in terms of a historical figure and human rights activist.  This year around there are constant reminders of the historic inauguration of the first black president one day after the holiday that has been designated to honor the MLK.

The talking heads have been at it all day making comparisons between MLK and Obama 24/7.  I still think that many of the comparisons are being disregarded, while others are being played up too much.  Unsurprisingly they are so obsessed by the racial backgrounds of both men, careful to mention every other word that we are witnessing history in the making as the first black president takes the oath of office.   Looking forward I’d like to see more realistic take on what BO can and cannot do for the nation and the world. I think it does the American people a disservice to draw simplistic comparisons between historical figures and current leaders, it sets up an expectation gap which inevitably leads people astray and down the wrong path.

The thing is that as inspirational and unifying as the memory of MLK was, I don’t think it would’ve been a good idea for him to be elected president, or being in charge of any political office.  I think his role in history was to get people thinking about what was possible in American society, what could be, if we broke out of the box and started judging each other by the content of our character instead of the color of our skin.  The similarities between Obama and MLK are really two fold, first is the color of his skin, and the style of his oratory, which is very preacher-like.  Neither of which by themselves qualify him for being the president.

I say like any other elected official, Obama should be given the opportunity to really change the country and take charge, but when he screws up he should be scrutinized and judged and resisted just as much as Bush.  The real danger of making premature comparisons to historic figures is that it stifles legitimate discussion about policies and overall dissent, as dead men can’t respond, and instead are given the benefit of history to tell their stories.  Obama should not be compared to MLK, FDR, or Lincoln, and other dead leaders, all this amounts to is noise and static to difficult road ahead.

Looking back to the last four years, I have to say that I am not in the same mind set that I had visioned, I was thinking that this time of year in 2009, I would be finishing up law school, getting ready for the next step, optimistic about the change of the guard from 8 years of Republican rule.  I remember being hopeful for how much more knowledge about the system and the world I would have gathered, and again, positioning myself and my family for the next step, whatever that might be.  This time around I feel a lot more uncertainty than ever before about the future of the nation and the world in general.  I am seeing and reading a lot of signs that cause reason for worry in the near and distant future.

After a busy but tough 2008, the new year is already in full swing.  This year brings a lot of things to look forward to, a new assignment at work, a new division chief,  new semester of law school, and of course the ever present buzz around the district these days, a new administration taking on white house.

One of the good things about my work is that it allows for some flexibility on job assignments, so that if one assignment doesn’t work out for the better, either because of the subject matter, the workload, or the personalities on the team, it’s really just temporary.  Not uncommon in staff management at my agency, I’ve been going through the grueling transition period between assignments, which means that I have multiple sets of bosses and work styles to adjust to.  In the 5 years I’ve been at the agency I’ve never experienced a clean transition from one job to the next.  It really puts you at a tough spot, you want to get some closure on the old assignment, but you want to get off to a good start on the new one.  I’ve also noticed that I prefer to do short-term and periodic projects as opposed to being bogged down on one long-term project, even if it means that I have to multi-task.

My courses this semester started last week and are looking pretty good so far, and they are shaping up to be a good final set to close out at least the classroom portion of my legal education.  I have Professional Responsibility and Practice, which is basically a course on the rules of professional conduct and ethics that all lawyers are supposed to be versed in before entering practice.  My Bar prep course for the semester is Sales & Leases, basically a continuation on commercial transactions law and contracts law, looking into the application of the Uniform Commercial Code (UCC).  On the elective front I’ve got Debtor and Creditor Rights, a course that I think is pretty contemporaneous to the meltdown on wall street and the consumer credit markets.  My last elective course is White Collar & Business Crime, something that I think might come in handy again, given the times we are living in.

The entire DC metro is in an inauguration frenzy mode, it seems like daily we get new announcements or updates on the developing security plans, road closures, metro service outages.  I’ve gotten a kick at the uptick on the Obama merchandising and lyrical symbolism and imagry around town.  The street vendors that usually sell bottled water and FBI shirts are all decked out in Obama gear, the metro fare cards now have his smiling face printed on the card stock.  And there are the obvious corporate bandwagoners like IKEA and Pepsi. There is talk around town about who has gotten tickets to the ceremony and the balls, and whether the tickets are to THE ball that Obama and Biden are making an actual appearance at.  All in all I hope that most of the 2M+ estimated people coming to the district for the inauguration are coming with an open mind, its going to be a logistical mess out here with the crowds.

Meanwhile for the policy wonks and politicos, there is the talk about how the new administration will be replacing the old, what changes will be made, and I mean real structural change to the federal bureaucracy, not the campaign slogan, which so far is appearing more and more to me to be just that, a catchy phrase to run an election on, nothing more.  I happen to be in that category of people skeptically optimistic, but really waiting to see how if he can effective transition his administration from one that ran an effective campaign to one that can run the federal government.

One indication that this might not be the case is the decision to open this office of the president-elect, supposedly to assist with the transition period between the election and the inauguration, and to respond to the historically unprecedented challenges the nation is facing.  The fact is that the president-elect does not have any of the executive powers until he is sworn in on Jan 20, it really is dishonest to putting himself out to the American people as if he can do anything in the interim.  Presidents are human beings, they are not super humans that we make them out to be, they rely heavily on their cabinet and staff in the executive branch agencies to get their job done, that is, run the federal government.  As of November 5, 2008 when the office of the president-elect was established, there were no cabinet members confirmed by the senate, and therefore no means to do anything at all but plan for the transition.  Maybe there’s a reason why the Constitution doesn’t provide for an office of the president-elect?

The other point to consider is more of a tactical, and that is that really one of the risks of establishing the first office of the president-elect is that you automatically open yourself up to criticisms with how you and your staff conducts themselves in the interim period, perhaps even before you’ve established your system of spin doctors and public relations.  I think the whole mess with Ill. Gov and the Treasury Secretary nominee not paying taxes might not have been as prominent had the office of the president-elect been pumped up.  Almost like a damned if you do, damned if you don’t, it may have been a better idea to keep a low profile, do things behind the scenes and then take the White House by storm on Jan 20.

Still stuck in the middle of my finals month, week 2 of 4, I’d like to say. Drawing from past semesters I thought I’d use this journal as a source of taking mental breaks from here and there. We’ll see how far this goes from here on out – and how often I’ll actually do it.

Another part of the dream I was calmly walking in an crescent shaped atrium with large glass windows worried that my cover had been blown, I knew I was being pursued by a young military officer. He was tailing close that I figured he probably knew something was up. As I turned around the bend I jumped maybe 60 feet in the air and wedged myself between the archways on the ceiling and the glass panel. When he passed I descended down only to see him reaching for his sidearm. What happens next was a little fuzzy, but I overpowered him with a jiu-jitsu arm lock and ran off with his weapon. I’m not sure if this part of the dream precluded the dinner meeting or came after.

Got read the riot act so to speak at a bar prep meeting on Friday. Pretty much ruined my looking forward to the weekend, but I guess I needed it with a few months left of the semester, and pre-pre-bar activities coming up around the corner. In some sense it seems like its the usual scare speech for the sleep deprived evening students in the room, but then again it was very necessary to hear the level of work and time commitments that we’ll be embarking on very shortly. My one comment is that I think a lot of this information probably would’ve been helpful like 1, 2, 3 years ago. I guess in some respect many of us would’ve just brushed it off, but still it might’ve been helpful to hear this with some advanced notice instead of all at once on a Friday evening.

Oh well, back to the books. And back to work tomorrow morning. And on to class in the evening.