Rusty Law

In The Game

If linebackers did not wear helmets, they would not block with their heads.  Helmets were designed to prevent serious immediate injury like skull fracture.  A helmet was not meant for head-on collision, and a mortgage was never intended to back a security.  

Head injury is an occupational hazard for football players the way getting sued is for attorneys.  While criticism about concussions resounds from too much head in the game, criticism of mortgage-backed securities arises from not enough skin in the game.  

Banks sold risk and the risk kept being divided and resold until risk was so diluted the banks became cavalier at levels to equal the greed of investors.  Banks had very little skin in the game, which left a lot of people shirtless.  

Football is not about to go away.  Neither is mortgage lending, despite its difficulties.  Risk analysis is running high in both arenas with long-term considerations a major proponent of discussions.  Lenders are undergoing massive changes in regulation, and there is a recommendation to disallow NFL linemen to go into a three-point stance before the play to prevent players from springing head-on into the game.  

Strong Spring

Spring cleaning is still a few months off, but the tax credit extension for first-time home buyers will uphold housecleaning for the real estate market through the winter.  

The first-time home buyer tax credit is valued up to $8,000 and does require certain income; also it has expanded eligibility to provide $6,500 to those who have lived in their homes for at least five consecutive years, again with income qualifications.  This tax credit, scheduled to sunset in November, has been extended into spring, stipulating you must have a signed contract by April 30, 2010 and be closed by June 30, 2010.  (Military service personnel have a year beyond those deadlines to take advantage of the tax credit.)  

I like the idea of the program because it activates the market.  Even if there are more investors than first-time home buyers, it is creating real estate transactions.  However I do not like the idea of fake stimulus.  Those funds came out of the Treasury.  It is a transferring of wealth and it messes with Invisible Hand.  The government is trying to stimulate behavior, but we are going to have to pay.  

The tax credit will create a strong spring for the real estate market, but the seasoning may weaken the dish as a whole.  

Home Owners' Association Dues

The only way to defeat a home owners' association claim is to outsue.  That costs a lot of money and takes a lot of tenacity.  Do not withhold association dues though, because that gives them an incentive to put a lien on your property.  

With a home owners’ association, there are two contracts in play which are not connected.  The first contract is an acceptance of the property along with the responsibility to pay the association dues.  The second contract is that the home owners’ association will do certain things.  With a home owners' association dispute, you are dealing with a debt situation versus an action situation, and you have to consider whether the debt attaches to the person or the property, depending on the contract.  

Keep your maintenance fees current.  Even in a foreclosure situation, keep the home owners’ association fees current because if they are not current, the judge might rule against you.  Also, if you withhold fees, really you are affecting your neighbors.  Things can get very emotional, which is why attorneys are needed to keep emotions out of it.  

To dispute a home owners’ association, you have to outsue and outlast, but in the meantime, pay the dues.  

Rich Man, Poor Man, Paradigm Shift

Edison did not have an iPhone.  Nor did he have a house in foreclosure and his bank account swamped in credit card debt.  In short, he does not meet the standard profile of today’s average American.  

Thomas Edison literally lit the modern era of technology with the light bulb and all sorts of other inventions.  He did not have the best testing capabilities for his ideas and computer modeling was not available, but he had a tremendous capacity for tinkering.  Such tinkering has been rediscovered in colleges across the country with a rise in the enrollment for mechanical engineering over computer engineering.  

High tech tools and materials have taken a back seat to a hands-on approach to education in this current economic crisis, giving rise to the value of tangible applications over abstractions.  Computers are integral to modern machining, but “hackerspaces” are carrying screw drivers and wrenches as well as keyboards.  

The down economy has reopened mechanical aptitude, perhaps placing “tinker” back at the top of the list of job possibilities, and re-sublimating “lawyer” right after “thief.”  

O. J. Simpson's Homestead

Constitutional Homestead rights attach once you own the home, live there, and plan to live there.  How that affects O. J. Simpson domiciled in Nevada is another issue when it comes to homestead exemption.  

Homestead is very powerful, especially in Florida, attracting celebs with big debts like O. J. Simpson and Bernie Madoff, because it does not put a dollar cap on the exemption from creditors.  Everything in that house is exempt because of homestead exemption if constitutional homestead is established.  This may be further strengthened in the case of a blood relative living there or a spouse, but if the glove does not fit….

Debt Collection Defense

The Florida Deceptive and Unfair Trade Practices Act is in place to protect consumers from unfair trade collections, and I have run across two companies consistently in violation of this Act.  If you are dealing with Midland Funding or Arrow Financial, I would like to review your paperwork.  You may have a counterclaim that could reduce or eliminate your debt, and pay for attorney’s fees.  

The more these companies have to pay out, the more likely they are to stop unfairly collecting.  We have laws in place to protect our rights as consumers and as citizens.  These companies need to play by the rules.  Each defense against unfair collection practices ensures the liberty our laws are written to uphold.     

Every once in a while I defend someone in small claims court, usually for a credit card debt.  I sit in judge’s chambers among other defendants.  The plaintiffs’ attorneys always appear by phone because they are in Ft. Lauderdale or another city working for a big law firm representing the financial companies.  While opposing counsels are being contacted, the judge advises the defendants that they have a right to dispute their debt.  Sadly, none of them do.  

I hear defendant after defendant say, “Yeah, I owe that money,” and start negotiating terms of payment.  I sure as heck want to make sure the person trying to collect is really the party who owns the debt!  You may owe the money, but you need to pay the appropriate collector. 

Bamboozled

The Federal Trade Commission has found greenwashing in the spin cycle of the bamboo textile industry.  Bamboo fabric is luxuriant and soft…it is rayon!  

The 1958 Textile Fiber Products Identification Act requires that clothes be labeled according to their content, and not as “biodegradable” or “antimicrobial” if they have been dissolved in toxic chemicals.  Sure bamboo can be grown without irrigation, pesticides or fertilizers, but after you chop it into little bits and put it through the same solvents used to make rayon, the all-natural part left the building.  Stem to store, bamboo fabric is a synthetic.  

A giant panda eats about 30 pounds of bamboo per day which is 10,950 pounds per year, exceeding the chocolate intake per Swiss citizen by 10,927.64.  It is not known if pandas prefer chocolate bamboo fondue, or if they like chewing gum.  What is known is that judicial robes are available in a cotton-poly blend, and labeled as such.  

Bankers' Hours

Bankers’ hours have been reduced by 122 failures this year.  Banks are folding faster than paper money, but they have not reached the 179 savings and loan record closings of 1992.  It is November, hurricane season is nearly over, and the FDIC may not have time this year to address the 400 plus “problem” lenders they tallied in mid-2009. 

Yes, the FDIC has made a list, they are checking it twice, and they are going to find out which lenders are naughty and nice.  Furthermore, for the first time in history they are mandating that premiuims be paid in advance.  This will help replenish their recent rapid outpouring of insurance funds by about $45 billion.  

Do not count on extended lobby hours any time soon, but at least we have online banking.  

Improving Traffic

I was pulled over for doing 59 in a 40.  That is what the officer told me.  I was not going to argue because he has the taser.  

Traffic schools encourage better driving through education.  What you missed in driver’s ed you can make up for and take points off your record.  In some states, traffic school is no laughing matter, but in Florida and California, there is a greater variety of driver education available.  Comedy was on a collision course with traffic schools in California due to the abundance of actors.  Who better to keep an audience’s attention than a professional entertainer?  The first comedy traffic school opened in the mid 1980’s in California, and the concept has maintained popularity.  

Regardless of whether you find a traffic safety course that steers toward entertainment as well as education, the ticket and the traffic school are going to cost you money.  You can save yourself time and expense by paying attention while driving, and obeying the rules of the road.  

The officer gave me a warning, which is what I am passing on to you.  Be safe as you head into the holiday season.  

Economic Indicators

Caterpillar is inching out of recession.  As a producer of construction equipment, Caterpillar Inc. is an indicator that the economy is emerging from the cocoon of corporate spending.  

Google is another indicator of uptick.  Unlike its competitors, Yahoo and AOL, Google advertises more consumer products.  In other words, what is good for Google means there is good in the economy.  Revolving credit that had lately stagnated has been reactivated and is showing up on how may clicks Google ads receive.  

If you can predict inches of snow from cricket pulses, why not market trends with Caterpillar and a web crawler?  There are bugs in the system, but these two might not be so bad.