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What Is Bipolar Disorder?

Posted by Kelly Chung on January 11, 2009

Bipolar disorder, formerly called manic-depressive illness, is a condition that affects more than two million Americans. People who have this illness tend to experience extreme mood swings, along with other specific symptoms and behaviors. These mood swings or “episodes” can take three forms: manic episodes, depressive episodes, or “mixed” episodes. The symptoms of a manic episode often include elevated mood (feeling extremely happy), being extremely irritable and anxious, talking too fast and too much, and having an unusual increase in energy and a reduced need for sleep. It’s also very common for someone to act impulsively during a manic episode.

Common signs and symptoms of mania include:
* Feeling unusually “high” and optimistic OR extremely irritable
* Unrealistic, grandiose beliefs about one’s abilities or powers
* Sleeping very little, but feeling extremely energetic
* Talking so rapidly that others can’t keep up
* Racing thoughts; jumping quickly from one idea to the next
* Highly distractible, unable to concentrate
* Impaired judgment and impulsiveness
* Acting recklessly without thinking about the consequences
* Delusions and hallucinations (in severe cases)

Here are the types of bipolar disorder:
Bipolar I disorder involves episodes of severe mood swings, from mania to depression.
Bipolar II disorder is a milder form, involving milder episodes of hypomania that alternate with depression.

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Andrea Bocelli & Hayley Westenra — Vivo Per Lei

Posted by Kelly Chung on January 11, 2009

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The underlying cause

Posted by Kelly Chung on January 11, 2009

Some medical journals indicated that having an abortion or miscarriage does not increase a woman’s subsequent risk of developing breast cancer.The following message I got it from bcpinstitute.org (Breast Cancer Prevention Institute.org) has a different point of view on this studies. The below message I directly quoted it from bcpinstitute.org’s website.

“If all women alive in the year 2004 were to reach the age of 85, then one in seven (14%) will have developed breast cancer. This is a number used to compare the impact of different risk factors associated with the likelihood of developing breast cancer. In general, most breast cancer risk factors, other than inherited genes and chemical or radiation injury to cells, are related to how much estrogen a woman is exposed to in her lifetime and how early she matures her breast lobules.

For example, women are exposed to elevations of estrogen levels with each menstrual cycle, so the more menstrual cycles a woman has, the higher her risk. This is why going through menarche at a very young age and menopause at a very old age will increase that woman’s breast cancer risk. Women are also exposed to high levels of estrogen in hormone replacement therapy and birth control pills, injections or patches. Many new drugs devised to prevent or treat breast cancer act by blocking estrogen receptor sites in breast cells (e.g. Tamoxifen), or cause our bodies to produce less estrogen (e.g. Arimidex). Women who have never been pregnant have approximately 75% of their breast lobules as Type 1, while women who have had a full-term pregnancy have 85% Type 3 lobules. This is why women who have children have a lower breast cancer risk than women who never had a full-term pregnancy. They have fewer places for cancers to start.”

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What are your New Years Resolutions? 新年新希望

Posted by Kelly Chung on January 11, 2009

“All change in life begins with a decision. Change is the only constant in life and will not change until you have decided to change, a decision. Have a vision of your life. Otherwise, you will go back to your old way.”

“Discipline is the bridge between thought and accomplishment” quoted by A.R. Bernard

A.R. Bernard suggests we should have 6 areas of focus for the 2009 one-year goal in the following priority:

1/    Spirituality    2/    Family   3/    Career    4/    Finance    5/    Health and Well-being     6/    Home

My tips on Setting Goals:
~ Express goals as positive statement
~ Set goals that are realistic and attainable
~ Distinguish between short and long-term goals
~ WRITE DOWN your goals
~ Be specific – set time frames or a target date
To develop a budget, here are some tips:
~ Determine your monthly income
~ List your fixed monthly expenses, i.e. car insurance payment, mortgages, car loan payment, tuition, child care, transportation, housing,
~ List your variable expenses, variable expenses change from month to month i.e. food, birthday gifts, medical expenses, donations,
entertainment, education
~ Compare your income with your expenses
Ask yourself: INCOME > EXPENSES ??? or INCOME < EXPENSES ???
~ Always keep an emergency fund

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“Cyprien Katsaris – Eine kleine Nachtmusik”

Posted by Kelly Chung on January 10, 2009

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Matthew Cameron is one of the world class pianists

Posted by Kelly Chung on January 8, 2009

“Cyprien Katsaris – Eine kleine Nachtmusik” is performed by the world class pianist Matthew Cameron. Matthew Cameron‘s talent was evident at age 3, when he was able to pick out melodies on the piano by ear with perfect accuracy. Shortly afterward he began composing his earliest pieces, displaying the most natural technique and memory. I never forget his elegant and graceful piano performance. The first time I met him in person this year. He is humble, funny, very friendly, generous, approachable and hardworking. He told me he sometimes works until 4a.m. Check it out: http://www.pianistmatthewcameron.com
and Nightingale

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Robert Stevenson is a Storage Pro

Posted by Kelly Chung on January 8, 2009

Robert Stevenson is a good friend of mine. I have known him since two years ago. He is an expert on storage. As a friend, I know he is always on business trips. He does presentations all over the world. He is a Managing Director of TheInfoPro’s Storage Sector. Robert is responsible for all research and consulting services covering the Storage and Storage Networking market. Prior to joining TheInfoPro, Robert worked for Nielsen Media Research as a technology strategist and storage architect, where he helped build out the company’s 1 PB SAN with over 1,800 ports.  He also worked for Sun Microsystems, as a managing consultant focusing on network storage and high-performance computing. Robert is a frequent contributor to leading industry publications including Storage Magazine, Network World, Forbes, and the London Financial Times.  He is also a favorite speaker at industry and vendor conferences, including Storage Networking World, Storage Decisions and Storage World Conferences.

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What is ABS?

Posted by Kelly Chung on January 7, 2009

Securitization is the transformation of an illiquid asset into a security.
Like, consumer loans(credit card debts) can be transformed into a publicly issued debt security (like corporate bonds). With credit enhancement in place, asset-backed securities (ABS) have became safe, liquid and high-yielding investments. For industrial, financial and other service sector companies capable of originating and servicing securitizable assets, ABS became a corporate finance alternative as equities, bonds and bank loans.
A lender originates loans, like homeowner or corporation. The bank or firm sells certain assets to the investors. Credit Agency (like Moody’s) reviews the company’s rating and credit enhancement.The credit agencies will update the rating based on the company inherent risks. Here are the factors agencies examine: – credit risk – liquidity risk – counterparty risk – legal risk – interest risk and currency risk – prepayment risk – cash flow structure

A financial guarantee (bond insurance) is used in ABS to enhance a security to the triple A level, based on the financial guarantee company’s triple-A rating. The guarantee is designed to ensure that investors will receive timely payments of principal and interest, regardless of whether the underlying collateral assets are able to support such payments.

Note: Credit enhancement means excess cash flow, third-party guarantees, Letters of credit, cash collateral accounts

AAA = High quality debt instruments, like US Treasury;   A = Strong to adequate ability to pay principal and interest;   B = Principal speculative;   D = Default

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Mortgage Securities

Posted by Kelly Chung on January 7, 2009

A mortgage loan is a loan which is secured by the collateral of a specified real estate property. The real estate pledged with a mortgage can be dived into two categories: residential and non-residential. Mortgage securities represent an ownership interest in mortgage loans made by financial institutions, for example, commercial banks or mortgage companies to finance the borrower’s purchase of a home or real estate. As the underlying mortgage loans are paid off by the homeowners, the investors receive payments of interest and principal. Residential properties include houses, condominiums, cooperatives, and apartments.  Non-residential properties include commercial and farm properties. The majority of mortgage securities are issued by an agency of the U.S. government i.e. Ginnie Mae, or by government-sponsored enterprises i.e. Fannie Mae and Freddie Mac.
Mortgage securities are often priced at a higher yield than US Treasury and corporate bonds. These securities may be sold at par, or at a premium or a discount to their face value. Their prices fluctuate in response to changing interest rates: when interest rates fall, prices rise, and vice verse.

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ARM

Posted by Kelly Chung on January 7, 2009

Adjustable Rate Mortgage (ARM) is a variable rate loan.  ARMs usually offer a lower initial rate than fixed-rate loans.  The interest rate can change at specified time periods based on changes in an interest rate index that based on current finance conditions, i.e. LIBOR index or the Treasure index. Common indices include the cost of funds for savings and loan institutions, the national average mortgage rate, and the most popular one-year rate for the government’s sale of treasury bills. The ARM promissory note states maximum and minimum rates.  When the interest rate on an ARM increases, the monthly payments will increase.  When the interest rate on an ARM decreases, the monthly payments will be lower.

For an ARM, the lender designates an index and then add a margin above this index. For examle, the T-bill (Treasury bill) index were 7 and the lender’s margin were 2.5 (= 250 basis points), the ARM would call for an interest rate of 9.5. A big problem in an ARM is the possibility of negative amortization.  When the index rises while the payment is fixed, it may cause the payments to fall below the amount necessary to pay the interest required by the index. The shortfall is added back into the principal, causing the principal to grow larger after the payment.
As of  Feb 3 2000, the ARM Indexes: Prime rate was 8.75%
As of Jan 22 2008, the ARM Indexes: Prime rate was 6.5%
As of Dec 16 2008, the ARM Indexes: Prime rate was 3.25%

Before choosing an ARM over a fixed-rate mortgage, compare the current index value plus margin (i.e. 3.54% one-year Treasury Index + 2.75% margin = 6.21%) to the current fixed-rate (8.25%).  The difference (2.04%) is the interest rate savings that you would get by choosing an ARM if interest rates were to remain the same.

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Who pay for the “Guarantee”? Have you?

Posted by Kelly Chung on January 7, 2009

Fannie Mae and Freddie Mac make loans and loan guarantees as well as handle the secondary mortgage market in the US. The other way Fannie and Freddie made money was when they began to repurchase their own mortgage-backed securities and to buy similar securities that were created by Wall Street without the G.S.E. guarantee, and hold them in a portfolio.  Fannie and Freddie pocked the difference – between what the mortgages yielded and the companies’ own cost of borrowing funds.

The mortgage-backed securities issued by Freddie Mac, Fannie Mae, and Ginnie Mae carry payment guarantees that transfer much of the default risk of these agencies. Freddie Mac guarantees the timely payment of interest on its Participation Certificates and also guarantees the ultimate payment of principal on the underlying residential mortgage loans by no later than the just ultimate payment of principal on the underlying residential mortgage loans by no later than the stated final payment date. It guarantees the timely payment (rather than just ultimate payment) of principal and interest on what are called its Gold Participation Certificates.

Fannie Mae guarantees the timely payment of interest and principal on its Guaranteed Mortgage-Backed Securities. The mortgages underlying the Ginnie Mae securities are either insured by the FHA or guaranteed by the U.S. Department of Veterans Affairs. Freddie Mac will receive a $13.8 billion cash injection from the government. Freddie Mac experienced heavy losses as its portfolio of mortgage securities  including risky sub-prime-backed securities. The securities lost value due to more borrowers fell behind or defaulted on mortgages.

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Buying Foreclosures from Federal, State, and Local government agencies

Posted by Kelly Chung on January 7, 2009

Federal, State, and local governments have a variety of residential, commerical and industrial foreclosed properties in their inventories.
1/ GSA = Government Services Administration Property Disposition Offices oversee the sale of real estate.  The list includes office buildings, vacant land, high-rise buildings… website: GSA.gov
2/ HUD = FHA = The U.S. Department of Housing and Urban Development foreclosures occur when a borrower defaults and the lender forecloses on an FHA loan.
3/ VA = Veterans Administration repossesses property from a serviceman who has been foreclosed on.
4/ FDIC = The Federal Deposit Insurance Corp is an independent agency of the U.S. governments.  The website:  FDIC.gov
5/ Freddie Mac = Federal Home Loan Mortgage Corp is publicly chartered agency that buys residential mortgages from lending institutions.  Freddie Mac sells its foreclosures through real estate brokers who manage the properties in each sate.
6/  Fannie Mae = Federal National Mortgage Association is the largest purchaser of mortgage in the secondary market.  Fannie Mae hires real estate brokers to sell the foreclosures in its inventory. Go to: Fanniemae.com

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A Shock with a Bigger Shock

Posted by Kelly Chung on January 7, 2009

Today’s crisis differs in complexity, speed and scale. We live in a complicated financial system. Almost every financial instruments connect to fixed income, especially, sub-prime loans. They are very complicated and not transparency. It is very hard to calculate the risks. The complexity of these financial instruments are not easy to comprehend.  I came from fixed income groups when I used to work for wall street firms.  The credit crisis and the downturn in world economies may offer a useful lesson: diversify your portfolios. You should have Treasury bonds, money market fund, corporate bonds, cash equivalents, currencies and gold in your portfolios. I got a call from my friend four months ago. He is an oncologist (cancer doctor). He wanted my opinion about his investments. His portfolio has some pharmaceutical stocks and REITS. Since he still receive income from his clinic, I suggested him to hold xyz (I can’t reveal it here!). Plus, he could sell his practice in one day. All his need is capital preservation. I suggested him that a good portion of his portfolio should be in stable, income-producing investments. Last year another friend of mine is an anesthesiologist. He told me he invested all his money in commodities. Looking back I thought it was a smart move. Now, I have a different opinion…As you know all commodities got crushed this summer due to slow growth in the global economy.

With a diversified stock portfolio, risk is reduced because different stocks rise and fall independently of each other. On a broader scale, combinations of different investment assets may well cancel out each other’s fluctuations in price, reducing the overall risk.

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Refinancing

Posted by Kelly Chung on January 7, 2009

A refinance mortgage is a financing of a property in which property ownership is not transferred. A refinance mortgage pays off existing mortgages and may even return equity (cash out) to the owner of the property. There are three main reasons why you might want to refinance your home mortgage:

1/ Saving money by paying lower interest rates 2/ Borrowing more money 3/ Changing from one type of mortgage to another

Should you refinance? You must know your current mortgage rate and amount, the mortgage rate for a new loan and your approximate refinancing costs. And ask yourself how long you plan to stay in your home. The largest cost item in refinancing are the points and other fees charged by your lender. Those fees generally range from 1% to 4.5% of your mortgage amount.
For example, the old mortgage rate is 10 percent. The new mortgage rate is 8%. The estimated refinancing costs are about $2300. The annual interest savings by using refinancing are about $1700.  Therefore, it takes a year and 4 months to recover the costs of refinancing. Th savings over 30 years would be $36,000. Lowering your interest rate by as little as 1 percent can save you thousands of dollars.  A prepayment penalty is a hidden cost of refinancing. A typical prepayment penalty might charge from 1% to 3% of your loan amount if you repay your loan less than 3 years. If it does, you may want to wait until the prepayment penalty period is over before refinancing. Check with your mortgage broker.Refinancing

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