Sitecore blogging song

This is a song about Sitecore blogging woes, with the answers to the woes at Sung to the tune of the Scout camp song “I met a bear”.

I have a blog
About Sitecore
I can’t find time
To write the blog

I like to write
About Sitecore
I don’t know what
To write about

I have a blog
About Sitecore
Nobody wants
To look at it

I like my blog
About Sitecore
MVPs want
To talk to me

I’ve got a blog
About Sitecore
It wastes my time
I need it short

Doctoral update

I have significant updates on doctoral progress for my wife and me. No, we’re not imminently graduating, but still good news.

Jennifer completed all her major doctoral steps before Ethan was born. That means all she has left is being hazed putting in her research time until it is considered “enough,” whatever that means. Then she does the dissertation.

The dissertation is around 200 pages but not as hard as it sounds. Huge swaths are already in Jennifer’s prior papers and reports. I’ll be $1 she’ll graduate in a year or less; she’s not as confident.

I am finally progressing on my own praxis. I finished all coursework in December 2007 and then accomplished nothing in the next 1½ years. Well, I did do things, including aborting an impossible praxis topic and considering switching to a PhD program.

The PhD would have been in Civil Engineering with emphasis in Traffic Management. My M.S. Computer Science and D.E. coursework matched up almost perfectly. All I would have had to do is two more 3 hour courses and a dissertation. But it is not the great deal that it may sound like.

First, I am genuinely interested in traffic operations. However, I have no other civil engineering background, so I would not have been very employable as a traffic engineer. Even then, I am not sure I want to work in a transportation department. Career-wise, it didn’t make much sense.

Second, it is enough of a challenge just to do the 12 hour praxis for my Doctor of Engineering. This is the first time in my life that I’ve had to say “no” to so many invitations for events or volunteer activities. My free time crunched a little with the arrival of the second kid (but not as badly as everyone says it does!), and praxis work easily expands to gobble any leftover time. Not only is a PhD dissertation twice as many hours, the topic is completely original–as opposed to the praxis’s practical orientation–so the work is more difficult. On top of that add 6 more course hours, and I just don’t know if it would have been achievable.

Third, the largest difference between a PhD and Doctor of Engineering may be eligibility for tenure-track professorship. My department chair likened it to the “union card” of tenure. Since I do not aspire to that, PhD has no additional professional merit for me over the D.E.

What’s my praxis topic? I am studying whether there is a statistically sound way to correlate trends in ticketwriting, motorist behavior, and safety. For example, does writing a lot of tickets cause a safety benefit? All prior studies appear to be highly localized, like trying to answer how long after seeing enforcement activities do motorist revert to non-compliant behaviors. I am attempting a broader or systemic approach. I hope my research may be good enough quality to be published in transportation journals and meaningfully guide jurisdictions.

I am collecting data on all traffic tickets written by Dallas County’s 33 jurisdictions. This includes 31 cities with boundaries in the county, the county itself, and the Texas Department of Public Safety. So far I have data from 10 jurisdictions, and several more are currently working on my request.

Most cities have been amazingly helpful. I’ve had a few frustrating sticks in the mud, but they are the exception.

Jennifer and I have come a long way, but we still have a year or so in front of us. Wish us luck!

Did I get my math right?

In my post Manufactured American financial crisis: all thanks to borrowers, I surmised that investors can get most their money back on creative mortgages.

But I forgot something: the loans were repackaged as securities and sold off. This changes the dynamics of the first point.

Simple model

Under a really simple model, a bank lends cash to a borrower. The borrower uses the cash to buy a house. The borrower pays the bank a series of identical payments over many years. These payments will repay the principal and provide a profit.

Suppose the borrower defaults. If the bank can recover its investment, including the principal and expenses of dealing with the default, it is out nothing except anticipated profits. It retains profit earned to the point of default, and recovered principal can be used towards a new investment.

Securitizing the loan

The problem is when you securitize a loan, where you convert it into a financial instrument. Its price will mimic bond pricing, where the bond’s price is based on expected future payments from the bond issuer.

For example, suppose a bank lent someone $200,000 at 7% yearly interest payable monthly over 30 years. That means the borrower owes $1,330.60 per month for 360 months. In nominal dollars, this is $479,016 over the life of the loan.

For the right amount, an investor can purchase the rights to this series of payments. This can be a win-win: the bank doesn’t have to wait 360 months to get all its money back, and the investor can be assured a fixed income with a known risk for 360 months.

Further suppose someone has investments returning 4% annually. Using a financial calculation called “present value,” this person would break even by purchasing the rights to the mortgage payments for $278,709.13. That is, after 360 months, the investor would end up with the same end result regardless of whether he left the $278,709.13 it in the 4% account or used it to purchase the rights to the mortgage payments. (Obviously, the investor would purchase the rights to the mortgage payments for less than “present value” to come out ahead.)


Here’s a key point: the investor paid way more than the loan’s value.

Suppose the borrower for the $200,000 7% loan defaults right after the investor purchased the loan. The most the investor could recover from foreclosure is the value of the loan. That means in a best case scenario, the investor loses almost 30% of his investment!

In real life, these investments are backed by some kind of insurance. But if masses of irresponsible borrowers default, insurance may have too many losses to pay out.

But politicians exaggerate

It’s obvious that mortgage investments could be more risky than investors anticipated. But does that added risk mean much more than lower return or a modest loss? Nah:

  1. The mortgages are still backed by homes. You can recover most of the outstanding balance of the mortgage.
  2. The vast majority of borrowers will properly pay the loan. I have yet to see any reason to believe that the vast majority of borrowers would be unable to pay their mortgages.
  3. The mortgage investments appear to be in a mix of mortgages. Mixed in with the risky loans will be a ton of perfectly good loans.

I don’t believe the hype, which is why I don’t support the “bailout.”