Out of the frying pan

Last night, Lori and I saw a commercial for a new prescription drug called Mirapex. This drug is intended to address Restless Leg Syndrome (RLS). As with all drug advertising, the commercial voiceover has to dedicate about half of the air time to reciting the litany of side effects one may encounter when using the medication. We've all become familiar with these much-lampooned warnings for other drugs: Nausea. Dizzyness. Greasy bowel movements. Four-day boners.

Some of these are included in the warning list for Mirapex. However, my favorite sequence in the TV commercial includes "...if you drink alcohol, are taking medicines that make you drowsy or if you experience increased gambling, sexual or other intense urges..." Lori and I both did a double take.

At what point does our pharma-fixit culture go overboard? When does the cure become worse than the disease?

"Since I've been using Mirapex, my legs are more relaxed so I can get a good night's sleep. Each morning I wake up feeling refreshed with an uncontrollable urge to kill my boss and dry hump a slot machine. Thanks, Mirapex!"

The suite life

Lori and I both commented last night on the sensation that we feel like we're staying in someone else's home. Someone else's really nice home. Housesitting or visiting for the holidays. Padding across tile under the warm, dramatic lighting in our bathroom, it feels downright resort-like.

I keep worrying that we'll wake up in the morning to find our Express Checkout bill slid under the front door.

32 hours, 32 thoughts

Greetings. This blog comes to you from the new OCMehls news desk, replete with little nurgles of static-attracted styrofoam. After a second, labor-intensive day, my wife collapsed to an early slumber, I have decided to blog about the first 32 hours of full-time living in our new house.

Rather than some lame attempt at an integrated narrative, here are 32 random thoughts, memories and highlights, in no particular order (and probably of no particular interest):

1) Almost as much as the new house itself, the new furniture we've been purchasing, accruing and storing over the past four months is providing much joy. Our family room is entirely new, from entertainment center and flat screen, to new sofas, occasional tables and counter stools.

2) Syd's new bunk bed arrived this evening. Our last piece of furniture to be delivered, I believe. She LOVES it!

3) Lori masterminded a phenomenal job on the girls' rooms. She has more brainstorms brewing for the bathrooms, too. She should have her own HGTV show.

4) It's amazing how the few pieces of furniture we had in the old house that made the move here now look either a) shabby and dilapidated (i.e. our old sofa, now sagging sadly in our living room) or b) tiny. Our king-size bed, in particular, astounds me at how it seems to have shrunk. It dominated easily 80% of our old master bedroom, forcing you to walk sideways around it, the nightstands wedged to either side. Now, it looks like a kid's bed in our master. Seriously, there's so much room in there, it's obscene. But, in a good way.

5) Paying $500 to have movers do all the work on Friday was the best $500 we ever spent.

6) I've met two interesting characters in this move. Ed, the head of our three-person moving crew on Friday, was a largely unintelligible Mexican guy (spoke English, just in a slurred kind of way) who maybe had four teeth and wore a black dog collar embellished with two dozen or so inch-long silver spikes. I'm not sure what was stranger – the fact that he was wearing it or the fact that he didn't even bother to comment on it. I was waiting for the "I'm the big dog" joke, but apparently it's part of his standard uniform.

He informed us at several times that he's been moving for 17 years. When questioned about how his back has withstood all that wear and tear, he recounted how he fell out of a tree six years ago and was in traction for months – out of action for a year. Told he'd never move furniture again, he went to the Arizona desert where he met with a "90- maybe 100-year old shaman" who he's known for years. After four days in the shaman's care, Ed emerged from the kiva a new man. He tapped the lump beneath his t-shirt – an apparent bag of some Indian mojo curios that he claims to have worn around his neck every day since. He seems to literally believe he's invincible now.

Later in the day, I met Pat. Pat is a roving drywaller who was sent over by the builder to patch a few errant holes left behind by our A/V installer (a World of Warcraft addict himself, nonetheless). Pat is a pretty imposing sort of guy. Large, barrel chested, with an intense stare from deep-set eyes. The ferret-like Lennar rep who brought him over to the house spoke with the tone of a parole officer. "Now remember what I said about customer service, Pat." to which Pat replied, "Shut the hell up, it's 3:00 on a Friday." Chris laughed nervously and skittered away.

Pat has fiery strawberry blonde hair, much of which climbs up his neck and descends from his unibrow along the bridge of his nose, leaping like lemmings from the tip into the sea of his untamed mustache and beard. I've never seen so much hair grow, with length, down someone's actual nose.

Pat liked to talk. For the 45 minutes he was here, I think he worked 20. The majority of the other 25 were spent telling me about his stint in the '83 invasion of Grenada. For someone who admits to being in Grenada for merely 12 hours (in a conflict that lasted only two days), you would've sworn he was at Normandy. Deployed with the 82nd Airborne, his helicopter was three miles off target when it was shot down into the ocean by a Stinger missile. After his CO got killed, he was next in charge and had to lead his troops ashore. Many of those in his command were picked off by snipers in the trees. He, himself, was hit by mortar fire and lost an inch of his right leg near the hip. This launched him into a rant about the VA's inadequacies followed by his advice to never leave the resort compound when you go to Jamaica for fear of getting beat down by the locals. His eyes were a little hazy when he thought back on "the days when you could check a gun onto a plane." He was never vulgar or menacing, but there's something lurking underneath the surface that's a little...intense. Under different circumstances, I'd be really concerned to hear him say he's "coming back Monday to finish the job."

7) Apple TV is the coolest freaking thing. Even cooler than Blu-Ray...which is no slouch.

8) Finding things we've packed is like some insane game of Concentration. We probably spend two hours a day roaming the myriad boxes looking for crap. "Bar soap...bar soap...I think I packed that....HERE! Crap, spatula set. Okay, com'on Ethernet cable...Daddy needs some Cat 5..."

9) There is a gang that roams our neighborhood. I've seen them, much to my dismay, for a few weekends now. They dress in all-black and like to walk in our front yard – kicking around in the grass. They're crows. Big ass, backwoods crows. And I think one of them has it out for me. They like to pick seeds or some other unseen critters out of our grass. When I show my face at the window or open the door, five or six of them fly away to other developments. But one always stays. Maybe he hops a few times, but he decidedly stares me down. I'm not exaggerating. Sure, I can't be certain it's the same crow each time, but there's always one who wants to be the hero. The gauntlet's been thrown down in this human/avian turf war. Me and that crow? Yeah, something bad's gonna happen soon, I can feel it.

10) I have a love/hate relationship with that cling wrap packing crap. Lori must have stock in the company who makes it, because she wrapped EVERYTHING in the stuff. I admit, its utility is clear. But the only things that hurt worse than my upper back and shoulders right now are my fingertips...numbed from clawing and pulling at that confounded stuff. Why can't they make some sort of antidote for it? Some kind of spray that deactivates the static tension and lets it all fall to the floor. Lori claims that I need to be more patient, find an end of the wrap and lovingly reverse its course around each piece rather than tear at it violently. I think I'm going to create some fusion technology that's one part Saran Wrap and one part the Clapper. "Wrap on, wrap off, Unwrapper."

11) Wood floors are awesome. Distressed wood floors are even better.

12) Our side yards are like a parallel universe right now. Looking through the windows is like looking through a time portal to when the Earth was young and dinosaurs were king. The day we get that landscaped and can enjoy a space that amounts for 5,600 more square feet of our lot will be a great day. An expensive day, no doubt, but a great one.

13) The girls have instinctively begun a daily practice of finding every hidey-hole in the house. The fact that I haven't quite gotten used to the acoustics in here either makes finding them tricky. I hear them snickering from what sounds like one room and then they spring out from a space between the couches. I can't let on that I'm unable to accurately track them. That will only encourage their wild behavior further.

14) When we hear noise in our house, it's because we make it. Not because someone on the other side of a wall is.

15) No one here misses the condo. Visiting it is a bit like leaving Hotel Rwanda to tour the surrounding countryside. Okay, I exaggerate, but you get the point.

16) Having a entertainment center full of cutting edge electronics: good. Five remotes that each resemble a NASA mission control panel: not so good. A future universal remote: priceless.

17) Can we actually have too much storage space?

18) The garage floor. To epoxy or not to epoxy, that is the question.

19) I want to write a symphony for all the button noises the electronics in this house make. The TV, the fridge, the stove and microwave, the washer and dryer, the dishwasher...they all have various, musical alert sounds that, while kind of novel and cool, will undoubtedly lead to a schizophrenic, Pavlovian confusion over whether our sheets are dry or the turkey is on fire.

20) I wonder if one of those streetsweeper trucks could take fit down our front hall.

21) For the kind of money we just put down to buy this house, and the kind of paperwork we had to complete, you think we wouldn't have to fill out additional forms and wait two weeks for a friggin' pool key. What kind of stuff goes on at that clubhouse anyway? It better be like a Eyes Wide Shut party to make this wait worthwhile.

22) Why did I sign myself up for 32 thoughts? I should've written this 10 hours ago. Then I'd be done.

23) There was a distinct moment yesterday when I felt a tear come to my eye and a lump surge in my throat. Lori was off picking up the girls from school. The movers had left and then the painters. Suddenly, I was alone in the house. I went upstairs to where I knew a bathroom window was open. Upon closing it, the sound and/or the pressure in the air just changed. Like the vacuum created when a plane door closes. And at that moment, I realized that this was all ours. That was the first moment of quiet pause I had to realize the fact that it was a done deal. The drawbridge was up and the castle secured.

24) If I'm not careful, people are going to think I'm simple. if anyone were to observe me over 20 of the past 32 hours, they'd see me walking around with this chimp-like grin. It's totally involuntary. This feels that good.

25) Temporary blinds. You gotta love them.

26) In case you should wonder, our email addresses and phone number remain the same.

27) I haven't parked in a garage in 9 years. Frankly, I didn't when I lived in Lori's house, either. Come to think of it, I don't think I've parked in a garage since high school! And until we unpack the boxes now squatting in half of our new garage, I still won't. What's another week or two, right?

28) It's amazing how having a house actually motivates you to have people over. Since we've lived here, we've never felt compelled to have friends stay and visit. That's all about to change.

29) First it was albums. Then it was CDs. I'm amazed that I've now packed my CDs away since most of my collection is ripped and distributed between my iMac, iPod and, now, Apple TV. In fact, I gave one of our moving guys our CD wall. This coming from the dork who compulsively alphabetized every new CD he bought. Time's they are a'changing.

30) It cracks me up to see Lori worry and fret over the unpacking of every box with almost equal intensity as she did packing them. I figure four weeks in, four weeks out.

31) The sound of my girls laughing and playing in this house is a beautiful thing. And the fact that they're doing it in parts of the house not directly under foot is even better.

32) I have no regrets.

Maintaining radio silence

To any and all interested parties, OCMehls.com will be in a state of cryogenic suspension through this weekend. I had to move the iMac to the new house this morning since the cable guy was hooking up TV, phone and Internet. As such, I won't be posting new house pics or blogging until probably Saturday or Sunday. (I'm posting this from work.) We also won't be receiving email. However, Lori did call to say that the iMac is up and running at home now, albeit on the floor of the office.

Suffice to say, we've got a lot going on in the next few days. The delusional me that likes to believe people tune in to the daily goings-on of the OCMehls felt compelled to broadcast that we'll be back online by this weekend.

And so begins the final push. Stay tuned!

A new vantage

Today, I painted Emelie's room. As I was edging each of her five windows, moving the step ladder from window to window, I began to wonder what was responsible for the palpable joy building in me. Yes, there was clearly mounting excitement about moving in. There was the lingering sense of accomplishment. But this felt more physical.

As I looked out the window that faces the front of the house, looking across our lawn and upward to a large cloud formation contrasting a brilliant blue sky, I realized from where the joy came. It was from the sky itself. Through the 49 windows in the house, you can see sky and mountains and skylines everywhere. The way our house sits on our wedge-shaped lot, views surround us. Despite the fact that there are houses on all four sides, our home seems to actively clear elbow room, affording unobstructed views everywhere.

That in itself isn't amazing. It's the realization that, for eight years in this condo, we've had no such visual luxury. Out of the few windows in the condo, the only thing we see is other condos. Maybe some trees. A sliver of sky, perhaps. But nothing you would ever dub a vista or panorama.

If this move didn't need another symbolic affirmation, it just got one. It's like you can feel the lithium seeping in with the sunlight, regenerating pores and eyes and spirits that have for too long been deprived of the simple view of endless sky.

We own a home!

Days come and days go, but this day will always be significant. Today, we took possession of our first home. True, Lori bought a home by herself before we were engaged, but this is my first home purchase and our first as a family. And it's been a LONG time coming.

The anticipation was drawn out as long as possible. We went to the house today at 10am in order to verify that all of last week's final touchup requests were, indeed, completed. We were also expecting to get the keys at that time. However, we learned that the final paper we signed accepting the state of the home needed to be faxed to the escrow company and then walked to the County Recorder's office for a stamp signifying the transfer of title. That took until 5:15 pm.

Beyond the excruciating, prolonged, "how long can this possibly stretch out/are we ever going to get this freaking house?" suspense, the delay in getting the keys actually cost us a painting day. Looking back, perhaps we jumped the gun a bit, but our painters were scheduled to come in and tape the house this afternoon. That schedule was predicated on the belief that we'd have the keys in hand at 10am. Lori had to turn away a van full of painters much to both parties' chagrin.

But they'll be back at it tomorrow. And that starts the march to the real move-in next Friday.

Tonight, we had our inaugural McDonalds picnic on the floor of the master bedroom and the girls took a shower in the master shower, traipsing around in towels squealing before and after like my little babies.

I'm sure I'll have myriad reflections over the next days, weeks and months...probably years. But today, my greatest sensation is profound peace. Peace because I finally earned a significant reward for my hard work. Peace because my girls have a home and yard to enjoy while they're still young enough to paint the walls with their dreams. And peace because I finally gave my wife a home. After I asked her to sell hers and join me on this quest to build a business. After she willingly said "yes" and picked up our lives and left, placing her faith in me. Now, finally, peace...a home for my amazing, beautiful wife.

A good day.

The home stretch

After doing our final house inspection and signing loan documents yesterday, it's a natural time for reflection on the entire home buying process. Who am I kidding? We've done nothing but reflect for the past four months. The actual and symbolic significance of buying this house are clear, both in the comforts it will afford the family and the calm it brings my soul.

If we were self-important or delusional enough to feel inclined to name our home in the tradition of colonial estates, I think this house would be called Kismet Manor. I've written previously (and spoken even more frequently) of the amazing good fortune we had in visiting the neighborhood the day we did -- back on April 1. I recall the specific segment of road on which we were driving and the color of the sky when I suggested we "take a drive by Cantara and see what we liked so much about that house." If I had never put that offer out there, or Lori protested, or the kids got cranky, or it was 30 minutes closer to dinner, or I had weekend work to do or it was raining...anything...we wouldn't have discovered the final phase of the development opened three weeks ahead of schedule and gotten the jump on the universe in selecting our lot. Lori and I still marvel at that galactic gift.

But now, on the closing side of the affair, another case of good luck has come our way. Our mortgage broker has been tinkering numbers for us for two or three months. We were always inclined to use Lennar's mortgage division, having succumbed to the seduction of the flooring incentive dangled so carrot-like in front of us. The numbers calculated back in May were pretty encouraging. If we bought two points down on our primary loan (we're doing an 80-10-10, 30-year fixed), we could get a 5.875% rate. But, unable to lock in anything until 30 days out from closing, we soon determined that those original good faith estimates had bad mojo working.

The heat of the summer set the suspicion stewing in the subprime lending market to boil. When our thirty-day milestone arrived, our mortgage guy, Carlos, informed us that rates were going up. Dramatically. With some coaching from him and bookmarks of key market indicators, we spent two to three days waiting to pull the lock-in trigger. Waiting for the CPI report to come out one Tuesday or Wednesday, Lori and I watched the tickers on CNNMoney.com fluctuate and oscillate. Like homeless people ogling slot machine wheels. "Come on 10-Year Bond, Daddy wants a low yield, now. Come'on big four-point-nine-seven! Stop, you sunnuvabitch!"

Once we hurriedly submitted paperwork to lock in our rate (deciding on paying one point and getting a 6.75% fixed rate), we thought all was good. But in the few weeks that followed, as we waited for the title company to come a'callin, there was trouble in the air. Lori's soothsayer superstition that forbade her to believe the house was ours until we signed on the bottom line was becoming seemingly more valid.

After a few Eggo emails (you now, waffley) from the financial food chain, a call early this week from Carlos confirmed that a storm was coming. As Carlos put it, "the past two weeks have been a bloodbath." Seems the subprime fallout is coming down Skylab style. Since we put 10% down on the house, and no one will give a jumbo loan worth more than 80% of the cash value of the home, we needed to sign up for a 10% second. In our case, a HELOC. Well, for banks, no-doc second loans have taken on all the appeal of buying waterfront property in New Orleans or listening to Paris Hilton recite Tennyson. Banks are apparently running scared and no one is buying loans out there. For anything. From anyone. Good credit, bad credit. Warren Buffet would probably need to provide five years of pay stubs and a semen sample to get a home loan now.

Speaking to Carlos Tuesday afternoon, he told me that he had been on the verge of vomiting all morning. Seems he had a list of twelve buyers for whom he was going to have to raise their second rates. Our name was on the top of the list since our closing date was only nine days out. After he told me about the bloodbath, he shared this internal email with me:

Tom Lefebure/Mia/FL/Lfs
08/06/2007 09:58 AM


To

UAMC BranchMgrs, UAMC SalesMgrs, UAMC ClosingMgrs, UAMC Center Managers, UAMC OperationsMgrs

cc

UAMC SecondaryMarketingAll, UAMC Regionals, Joe Martinez/Mia/FL/Lfs@Lfs, Arlene Polifroni/Mia/FL/Lfs@Lfs, Jimmy Timmons/Mia/FL/Lfs@Lfs, UAMC UnderwritingAll, Gail Piche/Mia/FL/Lfs@Lfs, Becky Moore/Mia/FL/Lfs@Lfs

Subject

Loan Program Update: all UAMC second liens

UAMC has made changes to our lending polices for second liens.
These policies are across the board, for all investors and all loan programs.

-- UAMC will only provide second lien financing with full documentation, effective with new locks immediately. UAMC no longer provides second lien financing for any documentation type less than full documentation. Second liens without full documentation that are already locked-in may close; no extensions allowed.

-- Maximum full documentation second lien financing is limited to 95% CLTV. UAMC will attempt to honor full doc second lien applications with CLTVs greater than 95% if the application has already been taken, based on investor guidelines. No new applications for full doc second liens with CLTVs over 95% (i.e. "100%" second liens) will be accepted.

Division Managers and Production Managers: please explain these changes to your associates.


Thanks,
Tom Lefebure
Products Manager
Universal American Mortgage Company
700 NW 107 Avenue Miami, FL 33172

Carlos went on to tell us that most of the people on his list would be elevated from 7 or 8% second rates to 12-13%. He fully believed that, for some of the families, it would prevent them from making their payments. Some of those families had already sold their homes. He claimed that he prayed to the mortgage powers that be that morning and got them to approve our second, with Lennar even eating 1.5 points just to close the deal. We're in at just under 9%, which we'll attempt to re-fi in a few months.

Carlos concluded our call saying that he'd probably always remember our name because he thinks we'll get the last no-doc second for a long time to come. He went on to give an awkward kind of confession that he had partaken in questionable lending activities to "be competitive" in the market...overstating incomes and blurring the lines of financial reality for some applicants.

Well, that scavenger behavior has come home to roost, and the bones of this crazy lending environment are going to be picked clean. After the S&L bailout, and the dot-bomb, and the MCI and Tyco scandals, it appears that the mortgage industry is the next den of avarice and deceit to be exposed to the light.

Lori and I always carry some "coulda, shoulda" baggage about missing out on the buying frenzy that followed 9/11 -- when interest rates were in the fours and house prices were half what they are now. While we were forced to watch that window of opportunity slowly close, I get great satisfaction now realizing that we climbed in one side of this new window the second it opened and got our nails trimmed pulling our fingers in before it slammed shut.

Welcome to Kismet Manor.

National intelligence

Few things that traverse the world of forwarded emails compel me to share them. This is one of them. Fascinating insights...


A Global Intelligence Briefing For CEO's by Herbert Meyer

Herb Meyer served during the Reagan administration as special assistant to the Director of Central Intelligence and Vice Chairman of the CIA's National Intelligence Council. In these positions, he managed production of the U.S. National Intelligence Estimates and other top-secret projections for the President and his national security advisers. Meyer is widely credited with being the first senior U.S. Government official to forecast the Soviet Union's collapse, for which he later was awarded the U.S. National Intelligence Distinguished Service Medal, the intelligence community's highest honor. Formerly an associate editor of FORTUNE, he is also the author of several books.

Currently, there are four major transformations that are shaping political, economic and world events. These transformations have profound implications for American business owners, our culture and our way of life.

1. The War in Iraq
There are three major monotheistic religions in the world: Christianity, Judaism and Islam. In the 16th century, Judaism and Christianity reconciled with the modern world. The rabbis, priests and scholars found a way to settle up and pave the way forward. Religion remained at the center of life, church and state became separate. Rule of law, idea of economic liberty, individual rights, human rights all these are defining points of modern Western civilization. These concepts started with the Greeks but didn't take off until the 15th and 16th century when Judaism and Christianity found a way to reconcile with the modern world. When that happened, it unleashed the scientific revolution and the greatest outpouring of art, literature and music the world has ever known. Islam, which developed in the 7th century, counts millions of Moslems around the world who are normal people; however, there is a radical streak within Islam. When the radicals are in charge, Islam attacks Western civilization. Islam first attacked Western civilization in the 7th century, and later in the 16th and 17th centuries. By 1683, the Moslems (Turks from the Ottoman Empire) were literally at the gates of Vienna. It was in Vienna that the climactic battle between Islam and Western civilization took place. The West won and went forward. Islam lost and went backward. Interestingly, the date of that battle was September 11.

Since then, Islam has not found a way to reconcile with the modern world. Today, terrorism is the third attack on Western civilization by radical Islam. To deal with terrorism, the U.S. is doing two things. First, units of our armed forces are in 30 countries around the world hunting down terrorist groups and dealing with them. This gets very little publicity. Second we are taking military action in Afghanistan and Iraq. These are covered relentlessly by the media. People can argue about whether the war in Iraq is right or wrong. However, the underlying strategy behind the war is to use our military to remove the radicals from power and give the moderates a chance. Our hope is that, over time, the moderates will find a way to bring Islam forward into the 21st century. That's what our involvement in Iraq and Afghanistan is all about. The lesson of 9/11 is that we live in a world where a small number of people can kill a large number of people very quickly. They can use airplanes, bombs, anthrax, chemical weapons or dirty bombs. Even with a first-rate intelligence service (which the U.S. does not have), you can’t stop every attack. That means our tolerance "for political horseplay” has dropped to zero. No longer will we play games with terrorists or weapons of mass destructions. Most of the instability and horseplay is coming from the Middle East. That's why we have thought that, if we could knock out the radicals and give the moderates a chance to hold power, they might find a way to reconcile Islam with the modern world. So when looking at Afghanistan or Iraq, it's important to look for any signs that they are modernizing. For example, women being brought into the workforce and colleges in Afghanistan is good. The Iraqis stumbling toward a constitution is good. People can argue about what the U.S. is doing and how we're doing it, but anything that suggests Islam is finding its way forward is good.

2. The Emergence of China In the last 20 years
China has moved 250 million people from the farms and villages into the cities. Their plan is to move another 300 million in the next 20 years. When you put that many people into the cities, you have to find work for them. That's why China is addicted to manufacturing; they have to put all the relocated people to work. When we decide to manufacture something in the U.S., it's based on market needs and the opportunity to make a profit. In China, they make the decision because they want the jobs, which is a very different calculation. While China is addicted to manufacturing, Americans are addicted to low prices. As a result, a unique kind of economic codependency has developed between the two countries. If we ever stop buying from China, they will explode politically. If China stops selling to us, our economy will take a huge hit because prices will jump. We are subsidizing their economic development; they are subsidizing our economic growth. Because of their huge growth in manufacturing, China is hungry for raw materials, which drives prices up worldwide.

China is also thirsty for oil, which is one reason oil is now at $60 a barrel. By 2020, China will produce more cars than the U.S. China is also buying its way into the oil infrastructure around the world. They are doing it in the open market and paying fair market prices, but millions of barrels of oil that would have gone to the U.S. are now going to China. China's quest to assure it has the oil it needs to fuel its economy is a major factor in world politics and economics. We have our Navy fleets protecting the sea lines, specifically the ability to get the tankers through. It won't be long before the Chinese have an aircraft carrier sitting in the Persian Gulf as well. The question is, will their aircraft carrier be pointing in the same direction as ours or against us?

3. Shifting Demographics of Western Civilization
Most countries in the Western world have stopped breeding. For a civilization obsessed with sex, this is remarkable. Maintaining a steady population requires a birth rate of 2.1. In Western Europe, the birth rate currently stands at 1.5, or 30 percent below replacement. In 30 years there will be 70 to 80 million fewer Europeans than there are today. The current birth rate in Germany is 1.3. Italy and Spain are even lower at 1.2. At that rate, the working age population declines by 30 percent in 20 years, which has a huge impact on the economy. When you don't have young workers to replace the older ones, you have to import them. The European countries are currently importing Moslems. Today, the Moslems comprise 10 percent of France and Germany, and the percentage is rising rapidly because they have higher birthrates; however, the Moslem populations are not being integrated into the cultures of their host countries, which is a political catastrophe. One reason Germany and France don't support the Iraq war is they fear their Moslem populations will explode on them. By 2020, more than half of all births in the Netherlands will be non-European.

The huge design flaw in the post-modern secular state is that you need a traditional religious society birth rate to sustain it. The Europeans simply don't wish to have children, so they are dying. In Japan, the birthrate is 1.3. As a result, Japan will lose up to 60 million people over the next 30 years. Because Japan has a very different society than Europe, they refuse to import workers. Instead, they are just shutting down. Japan has already closed 2000 schools, and is closing them down at the rate of 300 per year. Japan is also aging very rapidly. By 2020, one out of every five Japanese will be at least 70 years old. Nobody has any idea about how to run an economy with those demographics. Europe and Japan, which comprise two of the world's major economic engines, aren't merely in recession, they're shutting down. This will have a huge impact on the world economy, and it is already beginning to happen. Why are the birthrates so low? There is a direct correlation between abandonment of traditional religious society and a drop in birth rate, and Christianity in Europe is becoming irrelevant. The second reason is economic. When the birth rate drops below replacement, the population ages.

With fewer working people to support more retired people, it puts a crushing tax burden on the smaller group of working age people. As a result, young people delay marriage and having a family. Once this trend starts, the downward spiral only gets worse. These countries have abandoned all the traditions they formerly held in regards to having families and raising children. The U.S. birth rate is 2.0, just below replacement. We have an increase in population because of immigration. When broken down by ethnicity, the Anglo birth rate is 1.6 (same as France) while the Hispanic birth rate is 2.7. In the U.S., the baby boomers are starting to retire in massive numbers. This will push the "elder dependency" ratio from 19 to 38 over the next 10 to 15 years. This is not as bad as Europe, but still represents the same kind of trend. Western civilization seems to have forgotten what every primitive society understands; you need kids to have a healthy society. Children are huge consumers. Then they grow up to become taxpayers. That's how a society works, but the post-modern secular state seems to have forgotten that. If U.S. birth rates of the past 20 to 30 years had been the same as post-World War II, there would be no Social Security or Medicare problems.

The world's most effective birth control device is money. As society creates a middle class and women move into the workforce, birth rates drop. Having large families is incompatible with middle class living. The quickest way to drop the birth rate is through rapid economic development. After World War II, the U.S. instituted a $600 tax credit per child. The idea was to enable mom and dad to have four children without being troubled by taxes. This led to a baby boom of 22 million kids, which was a huge consumer market that turned into a huge tax base; however, to match that incentive in today's dollars would cost $12,000 per child.

China and India do not have declining populations; however, in both countries, there is a preference for boys over girls, and we now have the technology to know which is which before they are born. In China and India, many families are aborting the girls. As a result, in each of these countries there are 70 million boys growing up who will never find wives. When left alone, nature produces 103 boys for every 100 girls. In some provinces, however, the ratio is 128 boys to every 100 girls. The birth rate in Russia is so low that by 2050 their population will be smaller than that of Yemen. Russia has one-sixth of the earth's land surface and much of its oil. You can't control that much area with such a small population. Immediately to the south, you have China with 70 million unmarried men - a real potential nightmare scenario for Russia.

4. Restructuring of American Business
The fourth major transformation involves a fundamental restructuring of American business. Today's business environment is very complex and competitive. To succeed, you have to be the best, which means having the highest quality and lowest cost. Whatever your price point, you must have the best quality and lowest price. To be the best, you have to concentrate on one thing. You can't be all things to all people and be the best.

A generation ago, IBM used to make every part of their computer. Now Intel makes the chips, Microsoft makes the software, and someone else makes the modems, hard drives, monitors, etc. IBM even out sources their call center. Because IBM has all these companies supplying goods and services cheaper and better than they could do it themselves, they can make a better computer at a lower cost. This is called a "fracturing" of business. When one company can make a better product by relying on others to perform functions the business used to do itself, it creates a complex pyramid of companies that serve and support each other. This fracturing of American business is now in its second generation. The companies who supply IBM are now doing the same thing, outsourcing many of their core services and production process. As a result, they can make cheaper, better products. Over time, this pyramid continues to get bigger and bigger. Just when you think it can't fracture again, it does. Even very small businesses can have a large pyramid of corporate entities that perform many of its important functions. One aspect of this trend is that companies end up with fewer employees and more independent contractors.

This trend has also created two new words in business, integrator and complementor. At the top of the pyramid, IBM is the integrator. As you go down the pyramid, Microsoft, Intel and the other companies that support IBM are the complementors. However, each of the complementors is itself an integrator for the complementors underneath it. This has several implications, the first of which is that we are now getting false readings on the economy. People who used to be employees are now independent contractors launching their own businesses. There are many people working whose work is not listed as a job. As a result, the economy is perking along better than the numbers are telling us. Outsourcing also confused the numbers. Suppose a company like General Motors decides to outsource all its employee cafeteria functions to Marriott (which it did). It lays off hundreds of cafeteria workers, who then get hired right back by Marriott. The only thing that has changed is that these people work for Marriott rather than GM. Yet, the headlines will scream that America has lost more manufacturing jobs. All that really happened is that these workers are now reclassified as service workers. So the old way of counting jobs contributes to false economic readings. As yet, we haven't figured out how to make the numbers catch up with the changing realities of the business world. Another implication of this massive restructuring is that because companies are getting rid of units and people that used to work for them, the entity is smaller. As the companies get smaller and more efficient, revenues are going down but profits are going up. As a result, the old notion that "revenues are up and we're doing great" isn't always the case anymore. Companies are getting smaller but are becoming more efficient and profitable in the process.


Implications of the Four Transformations
1. The War in Iraq – In some ways, the war is going very well. Afghanistan and Iraq have the beginnings of a modern government, which is a huge step forward. The Saudis are starting to talk about some good things, while Egypt and Lebanon are beginning to move in a good direction. A series of revolutions have taken place in countries like Ukraine and Georgia. There will be more of these revolutions for an interesting reason. In every revolution, there comes a point where the dictator turns to the general and says, "Fire into the crowd." If the general fires into the crowd, it stops the revolution. If the general says "No," the revolution is over. Increasingly, the generals are saying "No" because their kids are in the crowd.

Thanks to TV and the Internet, the average 18-year old outside the U.S. is very savvy about what is going on in the world, especially in terms of popular culture. There is a huge global consciousness, and young people around the world want to be a part of it. It is increasingly apparent to them that the miserable government where they live is the only thing standing in their way. More and more, it is the well-educated kids, the children of the generals and the elite, who are leading the revolutions. At the same time, not all is well with the war. The level of violence in Iraq is much worse and doesn't appear to be improving. It's possible that we're asking too much of Islam all at one time. We're trying to jolt them from the 7th century to the 21st century all at once, which may be further than they can go. They might make it and they might not. Nobody knows for sure.

The point is, we don't know how the war will turn out. Anyone who says they know is just guessing. The real place to watch is Iran. If they actually obtain nuclear weapons it will be a terrible situation. There are two ways to deal with it. The first is a military strike, which will be very difficult. The Iranians have dispersed their nuclear development facilities and put them underground. The U.S. has nuclear weapons that can go under the earth and take out those facilities, but we don't want to do that. The other way is to separate the radical mullahs from the government, which is the most likely course of action. Seventy percent of the Iranian population is under 30. They are Moslem but not Arab. They are mostly pro-Western. Many experts think the U.S. should have dealt with Iran before going to war with Iraq. The problem isn't so much the weapons, it's the people who control them. If Iran has a moderate government, the weapons become less of a concern. We don't know if we will win the war in Iraq. We could lose or win. What we're looking for is any indicator that Islam is moving into the 21st century and stabilizing

2. China – It may be that pushing 500 million people from farms and villages into cities is too much too soon. Although it gets almost no publicity, China is experiencing hundreds of demonstrations around the country, which is unprecedented. These are not students in Tiananmen Square. These are average citizens who are angry with the government for building chemical plants and polluting the water they drink and the air they breathe. The Chinese are a smart and industrious people. They may be able to pull it off and become a very successful economic and military superpower. If so, we will have to learn to live with it. If they want to share the responsibility of keeping the world's oil lanes open, that's a good thing. They currently have eight new nuclear electric power generators under way and 45 on the books to build. Soon, they will leave the U.S. way behind in their ability to generate nuclear power.

What can go wrong with China? For one, you can't move 500 million people into the cities without major problems. Two, China really wants Taiwan, not so much for economic reasons, they just want it. The Chinese know that their system of communism can't survive much longer in the 21st century. The last thing they want to do before they morph into some sort of more capitalistic government is to take over Taiwan. We may wake up one morning and find they have launched an attack on Taiwan. If so, it will be a mess, both economically and militarily. The U.S. has committed to the military defense of Taiwan. If China attacks Taiwan, will we really go to war against them? If the Chinese generals believe the answer is no, they may attack. If we don't defend Taiwan, every treaty the U.S. has will be worthless. Hopefully, China won't do anything stupid.

3. Demographics – Europe and Japan are dying because their populations are aging and shrinking. These trends can be reversed if the young people start breeding. However, the birth rates in these areas are so low it will take two generations to turn things around. No economic model exists that permits 50 years to turn things around. Some countries are beginning to offer incentives for people to have bigger families. For example, Italy is offering tax breaks for having children; however, it's a lifestyle issue versus a tiny amount of money. Europeans aren't willing to give up their comfortable lifestyles in order to have more children. In general, everyone in Europe just wants it to last a while longer. Europeans have a real talent for living. They don't want to work very hard. The average European worker gets 400 more hours of vacation time per year than Americans. They don't want to work and they don't want to make any of the changes needed to revive their economies.

The summer after 9/11, France lost 15,000 people in a heat wave. In August, the country basically shuts down when everyone goes on vacation. That year, a severe heat wave struck and 15,000 elderly people living in nursing homes and hospitals died. Their children didn't even leave the beaches to come back and take care of the bodies. Institutions had to scramble to find enough refrigeration units to hold the bodies until people came to claim them. This loss of life was five times bigger than 9/11 in America, yet it didn't trigger any change in French society. When birth rates are so low, it creates a tremendous tax burden on the young. Under those circumstances, keeping mom and dad alive is not an attractive option. That's why euthanasia is becoming so popular in most European countries. The only country that doesn't permit (and even encourage) euthanasia is Germany, because of all the baggage from World War II.

The European economy is beginning to fracture. The Euro is down. Countries like Italy are starting to talk about pulling out of the European Union because it is killing them. When things get bad economically in Europe, they tend to get very nasty politically. The canary in the mine is anti-Semitism. When it goes up, it means trouble is coming. Current levels of anti-Semitism are higher than ever. Germany won't launch another war, but Europe will likely get shabbier, more dangerous and less pleasant to live in.

Japan has a birth rate of 1.3 and has no intention of bringing in immigrants. By 2020, one out of every five Japanese will be 70 years old. Property values in Japan have dropped every year for the past 14 years. The country is simply shutting down.

In the U.S. we also have an aging population. Boomers are starting to retire at a massive rate. These retirements will have several major impacts:

-- Possible massive sell-off of large four-bedroom houses and a movement to condos. An enormous drain on the treasury.

-- Boomers vote and they want their benefits, even if it means putting a crushing tax burden on their kids to get them.

-- Social Security will be a huge problem. As this generation ages, it will start to drain the system. We are the only country in the world where there are no age limits on medical procedures. An enormous drain on the health care system

-- This will also increase the tax burden on the young, which will cause them to delay marriage and having families, which will drive down the birth rate even further.

Although scary, these demographics also present enormous opportunities for products and services tailored to aging populations. There will be tremendous demand for caring for older people, especially those who don’t need nursing homes but need some level of care. Some people will have a business where they take care of three or four people in their homes. The demand for that type of service and for products to physically care for aging people will be huge. Make sure the demographics of your business are attuned to where the action is. For example, you don't want to be a baby food company in Europe or Japan. Demographics are much underrated as an indicator of where the opportunities are. Businesses need customers. Go where the customers are.

4. Restructuring of American Business – The restructuring of American business means we are coming to the end of the age of the employer and employee. With all this fracturing of businesses into different and smaller units, employers can't guarantee jobs anymore because they don't know what their companies will look like next year. Everyone is on their way to becoming an independent contractor. The new workforce contract will be, "Show up at my office five days a week and do what I want you to do, but you handle your own insurance, benefits, health care and everything else."

Husbands and wives are becoming economic units. They take different jobs and work different shifts depending on where they are in their careers and families. They make tradeoffs to put together a compensation package to take care of the family. This used to happen only with highly educated professionals with high incomes. Now it is happening at the level of the factory floor worker. Couples at all levels are designing their compensation packages based on their individual needs. The only way this can work is if everything is portable and flexible, which requires a huge shift in the American economy.

The U.S. is in the process of building the world's first 21st century model economy. The only other countries doing this are U. K. and Australia. The model is fast, flexible, highly productive and unstable in that it is always fracturing and re-fracturing. This will increase the economic gap between the U.S. and everybody else, especially Europe and Japan. At the same time, the military gap is increasing. Other than China, we are the only country that is continuing to put money into their military. Plus, we are the only military getting on-the-ground military experience through our war in Iraq. We know which high-tech weapons are working and which ones aren't. There is almost no one who can take us on economically or militarily. There has never been a superpower in this position before. On the one hand, this makes the U.S. a magnet for bright and ambitious people. It also makes us a target. We are becoming one of the last holdouts of the traditional Judeo-Christian culture. There is no better place in the world to be in business and raise children. The U. S. is by far the best place to have an idea, form a business and put it into the marketplace. We take it for granted, but it isn't as available in other countries of the world. Ultimately, it's an issue of culture. The only people who can hurt us are ourselves, by losing our culture. If we give up our Judeo-Christian culture, we become just like the Europeans. The culture war is the whole ball game . If we lose it, there isn't another America to pull us out.