Thursday, June 29, 2006

Is This Guy for Real?

Every now and then, I like to light up. Not often, but about once in a while or so, sometimes when I am super-stressed and haven't been able to make it to the gym, a cigarette really calms me down. A cigarette a month aint that bad, right? But the new Surgeon General begs to differ. I was shocked by just how toxic he suggested cigarette smoke, even second hand smoke, was, pointing to research that suggested cellular and arterial changes within seconds of exposure! You can watch his interview with Jim Lehrer here. I confess I find it a little hard to believe that exposure to such minor amounts of smoke can affect you if it's not on a consistent basis (I know I'm not a doctor, just a biased consumer!)

Wednesday, June 28, 2006

Protect Our Cyberspace

I was very disappointed to read of that the director of the National Cyber Security Division of the Homeland Security Department just quit, because (according to the pervasive anonymous sources) of his frustrations with the lack of attention and money allotted to the issue. Looks like another case of poor functioning by Homeland Security. While no one is equating a physical terrorist attack with an electronic one, we should realize we live in a time where the latter could cripple our economy. Viruses written by high-school hackers manage to inflict millions of dollars of damage; the day may not be far when highly-sophisticated terrorist groups do just the same. But in Washington, the philosophy is to wait till it actually happens, so I don't expect any movement until the first major attack. Call it the Windows syndrome - don't fix security flaws until after they have been exploited by hackers!

Talking of which, who is in charge of information security? Who takes care of the fact that everything from our social security numbers to our banking details and cell phone records are routinely stolen and sold on a thriving market. The fact that a news-aware person doesn't know this is a sign Washington hasn't made it a big issue. But to be fair, they had more pressing issues ... like casting symbolic votes on gay marriage, flag burning, troop withdrawal, even if they knew none of these measures would ever pass!

Tuesday, June 27, 2006

No Raise For You!

The Democrats' move to block pay raises for Congress was a brilliant one politically. How can Congress argue that wage increases at the low end of the scale would affect business climate, and yet fatten their hourly allowances by $15, on average? And for what? To sit in Washington and debate stupid non-issues like flag burning? Tell me one solid bill that has actually passed recently from Washington? Zilch! Nada! If our democracy is about being hostage to electoral concerns every two years, then God save us all!

About the hourly wage, I confess I don't like a fixed wage number. It will lead to retrenchment of low-skilled work, as automation and reallocation will ensure the total cost to business is unchanged. Some Republicans did propose an alternative, linked to tax initiatives, but they never showed any leadership on the issue. This is like Kyoto, where the Bush administration pulled out unilaterally (it did have some valid reasons) but failed to show leadership towards an alternative. But that is a topic for another day!

Sunday, June 25, 2006

Give It Away!

The world of philanthropy just have a second tremor - days after the world's richest man, Bill Gates announced that he would be taking up philanthropy full-time, the second-richest man, Warren Buffet announced he would be giving away his share of Berkshire stock to charities (especially the Bill & Melinda Gates Foundation) starting now. In doing so, he has reversed a long-standing disagreement with his now-late wife Susan, arguing that it was best for him to allow his money to compound at a high rate before giving to charity posthumously. I hope this is a start of more private giving to eliminate the ills that plague our world.

Interestingly both Gates and Buffet talk about how giving money is not only for others, it's actually also for the benefit of their kids. Here's Buffet in the Fortune article:
I still believe in the philosophy ... that a very rich person should leave his kids enough to do anything but not enough to do nothing.

May this be a phenomenon restricted to the super-wealthy, or will their example stir more of us to give to the needy around the world, rather than focusing on a consumption-driven lifestyle?

Monday, June 19, 2006

New AHA Guidelines

The American Heart Association issued new guidelines on trans fat, as well as many other recommendations. They recommend trans fats constitute less than 1% of the total calories consumed. The story has more of their recommendations, but I have reproduced some of them below with additional information from other sources:

  • Limiting trans fat: these are formed by combining liquid vegetable oil with hydrogen (hence partially hydrogenated oils) to form a solid. The problem? The solid oils clog up your arteries. (source)
  • Limiting saturated fats to no more than 7 percent of daily calories, down from the 10 percent formerly recommended and the 11 percent most Americans consume. The body in a strategy evolved from centuries of food scarcity stores saturated fat in your belly when the need should arise. Problem is, unless you plan to participate in some twisted new reality show, that need will probably arise, and instead the excess ab fat can kill you! (source) For more information on how fat works in the body, read this".
  • A half-hour of exercise a day. I can evangelize about this, having been a frequent victim to illness, until a daily exercize program has added a spring in my step. The founder of my university and a co-founder to the idea of America, Thomas Jefferson exhorted his students to spend two hours a day on the body to exercise the mind.
  • Adding little or no salt to food. Blood pressure causes an estimated two-thirds of all strokes in America, and about half of all heart attacks around the world. About 60 million Americans suffer from high BP. Most agencies studying the issue have recommended a maximum consumption of between 1100-2300 mg of sodium - the average American consumes 4,000 mg! (source)
  • Saturday, June 17, 2006

    Does the Convention Hold?

    Ok, I'm officially sick of hearing people criticize the Bush administration for not upholding the Geneva conventions. Let's pause from partisan rheoteric for a second and ask what the basis of the Geneva conventions is. Nearly 200 countries around the world agreed to abide by certain norms for treating prisoners beonging to other signatories. If you missed that, the key phrase is "other signatories". No terrorist group has ever signed the Geneva convention, and most of their activities involve targeting of innocent civilians and torture that goes against the spirit and letter of the convention. Finding fault with the US for not abiding by the Geneva convention is like criticizing a state for failing to keep up a ceasefire agreement the enemy didn't sign!

    Thursday, June 15, 2006

    Who's Fixing the Price Of Oil?

    Nowadays, it's hard for a day to go by without someone commenting on who's behind the high gas prices - price gouging by the gas stations (never mind they actually make less money when prices are high), the Saudis and OPEC, Big Oil, George Bush (who evidently is behind everything bad in the world for some people!), China and India consuming too much ... the list is endless. Well, blogger Dimitris Hatzopoulos in Greece argues that in reality, prices are set in a derivatives market that has nothing to do with the physical reality of oil production. He cites numerous examples to support his thesis that trade in "paper barrels", i.e. oil futures, determines the price of "wet barrels", real oil, while still being disconnected from true supply-demand considerations. Do read the link titled 'Oil Markets and Prices' for a better understanding of the subject.

    Wednesday, June 14, 2006

    The Bubble Will Pop ...

    It's now common consensus that the housing markets will correct, although still no consensus on if it will be gentle (stagnation in prices) or harsh (you see horror stories in the newspaper) I tend to be a believer that the scenario will be closer to the latter than the former. I wrote way back in September 2005 that the historical record suggests housing markets do correct harshly, with three giant nation-wide bear markets since 1967. Now, an article by Paul Lim in USNews argues along similar lines, and once again points to the historical record.
    The bottom line: Real estate prices eventually correct themselves. And unfortunately for homeowners, it often takes years before home prices start to rise again, especially after a big run up. National City recently studied 66 major metro regions over the past 21 years that suffered through a 10 percent or greater decline in prices for at least a two-year period of time. It found that home prices, once they begin to correct, tend to decline 17 percent on average before markets heal themselves. "And the average duration of these adjustments is 3.5 years," says DeKaser [chief economist at National City].

    And remember, your losses are exaggerated by the leverage you used (using Other People's Money works both ways!), so true losses are probably several times that percentage.

    As I pointed out in my piece back in September, time is your friend, so if you intend to stay put for 5-10 years, the odds are in your favor, but if you're a 20-something year-old flipper, God be with you, 'cos you're gonna need Him.

    The Motorcycle Diaries

    This last weekend, I saw the wonderful movie, The Motorcycle Diaries, a dramatization by Che Guevara of the roadtrip that changed his life. While I don't agree with all that Che did in his life, the movie is very moving, and gives pause even to a rabid capitalist like me. It helps to put in perspective the significance of electoral wins by Evo Morales, the indigenous cocoa-grower who won the presidency of Bolivia. Don't get me wrong - I think am a strong believer in free markets ... I have seen even modest reforms alleviate poverty in India, a poverty sustained by a bureaucracy for half a decase. In fact, governments in some cases can be far more ruthless than any corporation.

    Anyway, this thoughtstream has just motivated me to add yet another book to my "wishlist" of books I intend to read in the next few weeks/months - Hernando De Soto's The Mystery of Capital. I had heard de Soto a long time back being interviewed by Bill Moyers, and found myself riveted.

    Saturday, June 10, 2006

    Quote of the Day

    I read this in a column on investing, dealing with panic of the lay investor due to losses in the stock markets, but this quote by the Frenchman Joseph Joubert ring true for so many aspects of life:
    When you go in search of honey you must expect to be stung by bees.

    Vote Hyundai for Quality?

    This is huge ... the latest survey by J.D.Power & Associates rated Hyundai as #3 in initial quality, ahead of Toyota, Honda, Nissan, Mitsubishi and all those other brands you may think are better. Only a Porsche and Lexus ranked better. The Hyundai Tucson got the top rating for compact SUV or crossover. As someone who recently suggested a friend avoid a Hyundai, I was left feeling very stupid. A sign that conventional wisdom isn't so wise after all ...

    AfterthoughtLooking at the 2005 Vehicle Dependibility Study, the Hyundai performed very poorly, while (surprise surprise!) Honda and Toyota ruled the non-luxury segment! Maybe conventional wisdom aint so bad after all ...

    Thursday, June 08, 2006

    Killers Be Damned

    It is indeed a joyous occasion when a mass murder becomes the victim of his own game. Today, when US forces ended the life of Abu Musab al-Zarqawi, the murders of thousands of innocent Iraqi citizens was avenged. Just how significant is this?
    Over the last several years, no single person on this planet has had the blood of more innocent men, women and children on his hands than Zarqawi. He personified the dark, sadistic and medieval vision of the future, of beheadings, suicide bombings, and indiscriminate killings, a behavior pattern that has been rejected by the overwhelming majority of the Iraqi people, whether Sunni, Shias or Kurds, and certainly by the overwhelming majority of Muslims worldwide.

    - Defense Secretary Donald Rumsfeld

    Monday, June 05, 2006

    Garbage on Groceries

    I am a regular reader of Forbes magazine, but of their stock opinions. I don't expect to embrace healthy living or societal choices from reading this magazine. So when MSNBC reproduced this piece of junk, titled Healthier eating would raise grocery bills, I threw a fit! Gosh, did they get someone from the National Council of Chain Restaurants to write this crap? The article argues that healthier choices would spike up grocery bills, and disses Eric Schlosser's (author of Fast Food Nation) call to migrate to less processed foods. The author of this piece grudgingly acknowledges Schlosser's observation that the premium is small compared to the medical savings from avoiding Big Macs.

    But how can someone writing about a financial magazine be so blind to economies of scale. Here's one observation about organic food:
    Unfortunately, organic food is typically more expensive than industrialized food, usually costing 25 percent to 100 percent as much. That may explain why Whole Foods Market, which has capitalized on the public's interest in more natural foods, has been nicknamed "Whole Paycheck" for its high prices. An example: Last week in downtown Chicago, a dozen large regular eggs cost $1.79, while a dozen large organic, cage-free eggs sold for $3.39.

    Yes, but as more people embrace organic food, costs come down. Whole Foods Market sells the cheapest organic tofu in town, cheaper than the non-organic tofu at Kroger or other giant retail stores. How? As a WFM sales assistant told me, once they have enough scale, prices come tumbling down. Most of the prices aren't production-related, they are distribution costs.

    That's not to say organic food's gonna be cheaper anytime soon. It's to say I look forward to the day a tightwad like me can buy organic food. And with WalMart getting into the business, that day may not be too far away!

    Saturday, June 03, 2006

    Book of the Day

    My pick for Book of the Day is Suburban Nation: The Rise of Sprawl and the Decline of the America Dream - Andres Duany, Elizabeth Plater-Zyberk, Jeff Speck. The authors are architects who designed several sensible communities, and argue persuasively that the current design of suburbia is fundamentally flawed, and seek to take us back (and forward) to the days when communities were not zoned residential and commerical, where pedestrian-friendly designs meant you didn't drive to the store, where traffic jams are nonexistant because of the dispersion of the road network (where all traffic doesn't feed into a collector), accident rates are significantly lower, and most important, where residents can feel a sense of community, where rich and poor live in the same neighborhood. The book drives these points home with several photographs of communities good and bad, and had it not been the pangs of hunger, I may never have put the book down.

    Thursday, June 01, 2006

    Lip Service

    There are days when I feel excited about the prospect of the world's only superpower supporting free regimes all over the world. And then there are days when reality bites me in the ass. This is one of the latter days. Recently, that saint of democracy, Aung San Suu Kyi had her detention extended by the military junta in Myanmar. Suu Kyi has been under house arrest since 1990, after winning by a landslide a general election. And yet, the military has had no trouble detaining her for the last 16 years, ruling Myanmar with an iron fist.

    Are we truly serious about freedom? Yes, the US and Europe, as also many other countries, protest every extension, and have a representative to "conduct talks with" with the junta. And yet, precious little has come up. Surely the powers of the world can do better if they cared!

    Shame Shame Shame!