TTR was originally created by Nate True for hacked iPhone and iPods and it was a huge hit. We came along and kidnapped him, tied him down, and held his bird hostage until he agreed to work with us on a new and improved version. Luckily for his bird, he came through with something awesome. I think the video speaks for itself, but go have a look and see if it appeals to you.

I think the compelling thing about Twitter is that it can replicate, in a small way, the feeling of camaraderie of being in a room with your friends while not actually being in a room with your friends.

This past week I was in Palo Alto and got to spend some quality time with my coworkers all together in one small office - it was great. And while I’d kind of like to have that experience everyday, I’m also glad I don’t as it makes the occasions when we do all get together something more of an event. Plus, as much as I liked it out there in California, I don’t want to move.

What Twitter allows is a small slice of that in-person group experience where you can toss out jokes, random thoughts, or even bits of important information that may have little to nothing to do with what everyone is personally working on at the time. As a remote employee, that is the single aspect of the office experience that I miss the most while working alone from home. Right now I see Twitter as a potential way to maintain a little bit of that.

Incidentally, that kind of usage for Twitter essentially turns it into a lightweight email list or chat room of a sort. Although in many ways, it serves an entirely different niche than either of those. With it’s message size limit, it is virtually useless as a chat medium or as a way to express long thoughts (such as this entire blog post). However, it is perfect for the stray random thought that you might blurt out loud while hanging out with friends or as a way of sharing some funny video you just watched, etc. And since it’s not a “live” medium such as a chat room, it doesn’t carry with it the expectation that all comments deserve a response, which is pretty neat and perhaps part of it’s charm.

If you use Twitter or want to try it or whatever, you can follow me and I may follow you back. Using the web interface sucks, though, so if you really want to try it out, be sure to check out one of the many Twitter clients for Windows or MacOSX, etc. as it makes the entire thing a lot more useful.

From what I gather, when the Fed adjusts that number you always hear about in the news, they are effectively controlling the value of money itself. The rate they usually adjust is the cost for a bank to borrow money from the Fed. The reason this is important is because that indirectly affects all the usual rates of interest you’re used to hearing about - like credit cards, some mortgages, car loans, etc. If the Fed rate is high when you get a loan, your interest rate will be similarly high and vice versa.

The interest rate the Fed charges cuts into the profits the bank can make by loaning more money, so in order for the bank to make a profit, they have to charge their customers more to use the money they borrowed themselves in order to lend out again. Borrowers are the real customers of banks - this is why they are always so eager to loan money.

Banks pay interest on savings accounts because they are using the deposited money and loaning it out to others. The saver gets paid for that service because the money is actually a commodity they are consuming in order to do business with the people who want more money than they have. When interest rates go up, banks start wanting more people to save with them and so they start offering CDs and other savings vehicles with higher interest rates. Why? Because it becomes cheaper to get money from the public than it is to go to the Fed!

It’s not to say that a person with money wants higher interest rates, though. It’s much more complex than that because the rates paid by banks are much lower than other investment types - such as the stock market. Since companies use money too, they are affected by the cost of it in ways similar to banks. The difference for them is that higher interest rates may mean they cannot afford to borrow as much which means they may not be able to grow as quickly as they’d like. This naturally results in a decrease in profits and/or growth which affects their stock prices which in turn adversely affects how much an investor in that company’s stock can ultimately make over time.

Often the news will report that the Fed is cutting interest rates in order to fight inflation. Inflation is bad, of course, because it means that $1 yesterday was worth more than $1 today. Obviously it is in everyone’s interest to avoid inflation. So what is inflation, exactly? I understand there are several schools of thought, but the one that seems to make sense to me is that inflation is something like the absolute value of the difference between goods people want to buy and money available to buy it. What this means if that if there’s more money than there are things people and companies want to buy, prices go up because companies see this surplus of money and start increasing their profits by taking more of the customer’s money. On the other hand, if there’s not enough goods to meet the demand (think oil), the prices go up because it’s harder/more expensive to get and therefore worth more to the buyer. In order for this to make sense, you have to think of money itself as a commodity that also takes part in the supply and demand equation.

So from what I can tell, for the last year or two the Fed has been operating under the assumption that the problem in our economy was being caused by a lack of goods and so they cut interest rates in order to promote people to buy more, companies to make more, etc. The theory would be that if there’s more stuff to buy, then inflation will go down and the economy will get moving again. But it hasn’t been working. So they have two options now: 1) raise the interest rates, or 2) leave them alone.

Raising interest rates means the cost of money goes up and production would likely drop. If this is what the Fed does, then it is my theory that they are suggesting that the system has too much money available rather than too many goods and services. Increasing interest rates should cause people and companies to borrow less and thus reduce the amount of money available for purchases in the system. It should also encourage people and companies in debt to repay those loans before the rates go up even higher. My theory is that this is the action we need to fix the current mess - as unpopular as that may be.

If they choose to leave the rate the same, then I think that suggests they are either playing political games (raising interest rates always seems “bad” in the public’s eye), or that they aren’t sure themselves and they want to play a wait-and-see game (which is a copout, IMO). I think the only way this could turn out well is if the ratio of money vs. goods isn’t teetering on the edge of balance that it appears to be.

My guess is that we’re on the verge of entering a time of stagflation - which is when inflation goes up, but there’s very little economic growth to show for it. Historically, they are apparently rather difficult to break because they are a bit like a self-sufficient cycle. Inflation causes prices to rise, and rising prices means it becomes too expensive to grow the economy, but since companies have to make a profit, they raise prices. Rinse and repeat. The only way out is to disrupt the balance or stop trying to grow. Since public companies have what amounts to a legal imperative to generate a profit, they have no choice but to keep trying to grow. This means something needs to change or else their attempts at growth will drive inflation to insane heights as they spin their wheels in the mud.

The Fed appears to be very conservative, so I suspect that at their next meeting they won’t change a thing. That means it’ll be another several months before anything changes unless they get lucky in their inaction and the market corrects itself. How could it correct? Well, one way is technological advance. Doing something old in a new, cheaper way is one way to create a profit without really growing. A genuine profit is created because you are simply using less money to do the same thing but you need not raise the price! Another method might be a decrease in the price of oil since it’s such a huge economic driver (which we may see soon, especially with the help of China’s recent elimination of internal price fixing). Another possibility is a reduction in the lifestyle of Americas which would mean less spending on luxuries which frees up money for essentials thus driving the cost of luxuries down and the money spent on producing luxuries drops and that causes a disruption to the balance just enough to kick start the growth again. (Seems like an unlikely scenario, though.)

Hopefully this isn’t too inaccurate. As written, it passes my “gut” test which means it feels somewhat right, anyway. I’m sure someone will tell me what I’ve got wrong eventually, though.

Of course I’m not immune to having done this… In fact, I find myself saying things like that a lot and I’m starting to think that I should try to keep myself from doing so. It’s not productive, adds no value, and just brings other people down. Who cares if it was done before? Who cares if it isn’t an original idea? What matters is if you (or someone else) act on the idea and prove it can work or that the idea is better or whatnot. What really matters are the results.

If you have a great idea, just do it. If you see a great idea that has been done, don’t assume you’re the only person on the planet with the immense intellect to notice it isn’t new - you might be missing something. It’s like that classic Mark Twain quote: “It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt.”

Next month would have marked two years of trying for a baby, so we were beginning to think it wasn’t going to work out. In fact, had she not got pregnant this month, we were going to start making appointments to get tested in case something was wrong with one or both of us - but obviously we don’t need to worry about that now. Yay!

People say that having a kid is probably the most impactful life event that there is. I suppose it’s a good thing that nature gives several months to get used to the idea first…

We’re planning on continuing to build this fund up more slowly over the next little while just to get a good buffer, but basically we’re going to move to the next step which is retirement investing and extra big mortgage payments. Without any car or student loan payments or hardcore emergency fund savings, it’s somewhat unsettling how much extra is there each month now…

I still have a hard time coming to terms with this new financial position given how recently it seemed we were in dire straits. The fact that the money is stored away in a different account, though, makes it seem as if it is gone - but it’s not, really. It’s there. We’re rich! ..ish…

This is clearly the most dangerous time when transforming your financial life. There’s some decent money around that appears to be accumulating for once… and you can’t use it. You have to hold back or else it won’t be there anymore and the whole cycle just ends up starting over. It’s really tough sometimes! If you’re stuck in a big debt hole and trying to dig your way out or whatever, it might seem stupid that having money could suck - but it does in its own way. When you’ve spent a long time digging out, it’s really hard not to want to “treat” yourself over and over and over again… And the kicker is, Melody and I have only been at this process for a year! Some people take many years to dig out. I can’t imagine how much of a desire there might be in that kind of situation to go crazy with your new-found wealth and end up blowing it all on one huge trip to Disneyland or something.

So, we’re now more wealthy than we’ve ever been - which isn’t saying a lot - but in some ways, it feels like nothing has changed, too. The saved money is mentally gone. The income now that no longer goes to loans or the emergency fund can instead go toward retirement or the house and that, too, will be mentally gone. So our lifestyle is not likely to change anytime soon - if it were, all of those things will not be able to happen. And we want them to happen. Building equity in the house is important because when we hit that magical 20% mark, we can get rid of PMI and thus build equity even more quickly! The more money we put into retirement funds, the greater the effect of compound interest. These are good things.

Still, though, it’s hard to escape the reality that, for the first time in my life, I could walk into a Best Buy and purchase any one thing in the store - no matter how expensive - and pay cash. Seriously. I wandered through one on Saturday and couldn’t find anything that cost more than our emergency fund stash. In fact, we could afford to pay cash for two of the single most expensive item I noticed while there. As far as I can tell, the same can be said for Wal-Mart, Target, K-Mart, or just about every store in the mall. It’s totally weird.

The kicker, though, is that while walking through Best Buy this weekend, I didn’t really want any of the big ticket items. The two things I was tempted by that day totaled about $75. I pondered it a bit and decided that was too much to spend all at once and walked out empty-handed.