Discussion Divas

Strait Talk: Strait of Hormuz

Happy New Year. If you haven’t eaten any black-eyed peas yet this year, please try some. Seems the whole country could use an extra helping of good luck in 2012, and legend has it that these little beans can do the trick.

 

We certainly could use some good luck when it comes to the unemployment rate (clocking in at 8.5% on Friday, the lowest level in three years), both our economy and Europe’s economy, stability on the Iraq hand-off, the changing of the guard in North Korea, Egypt’s elections, and so on (pass the peas, please!).

 

I am surely hoping for the best, calm outcome when it comes to the Strait of Hormuz, three little words that have been ringing in my head since first hearing them a few weeks ago.

 

Tell me more

Seventeen million barrels of oil travel daily through the Strait of Hormuz, a waterway located between Iran and Oman. The U.S. Energy Information Administration calls it “by far the world's most important chokepoint” for oil transport. See map of SOH.

 

Iran--home to one of the four largest known oil reserves--is threatening to shut down the strait if the United States and Europe move ahead with threats to refuse to buy oil from Iran because of the country’s continued enrichment of uranium. Iran has long contended their uranium efforts are intended for civilian power use, while much of the outside world says they are building a nuclear bomb.

 

If the strait is closed, not only would oil prices spike--possibly by 50% according to some analysts--the situation could create world conflict (the U.K. signaled it would use military force to re-open the strait) and wreak economic turmoil globally, taking a big toll on the already weak European economy. The tensions have already tipped oil over the key $100 a barrel mark.

 

Ah, oil. Can’t live with you, can’t live without you.

Just to underscore that it’s oil that makes the world go round, U.S. car sales rose 8.7 percent in December, finishing the year on a high notefor Chrysler, Ford and General Motors. SUVs had a good year, too, as gas price stayed below the $4 mark.

 

For those looking for alternatives to traditional gas guzzlers, take note that sales of the electricChevy Volt popped 34% in December, despite warnings that the battery could catch fire (GM announced a fix) and despite little electric car infrastructure.

 

Putting it in perspective, there are approximately 10,000 each of the Nissan Leaf (also electric) and the Volt on U.S. roads, meaning they make up a mere fraction of the 13-plus million cars the big manufacturers each expect to sell in 2012.

 

Let’s leave it there

We could dive into a lot more on the energy front, starting with fracking (potentially causing earthquakes? yikes!). But you and I both know we like this email because it’s short :)

 

So be sure to eat some black-eyed peas. Tradition has it that you should eat them New Year’s Day, but I extend this to the first couple weeks of January. I put my recipe on the site if you need one. Goes great with Champagne, but what doesn’t?

Let's all have some brie

 

If you know me at all, you know I live, breathe and sleep cheese. My husband once joked that in our house we put it out like other people put out candies in little bowls. It sounded like a good idea to me. 

Fittingly, I’ve been eating brie (Fromager d’Affinois, a double-cream brie from France that tastes like a triple-cream) while trying to wrap my brain around this European debt crisis that has the U.S. stock market in such turmoil--this week the Dow lost 2.9%. Here’s what I’ve learned:

1. Many of the European countries are like little dominoes, independent but financially interconnected on a game board called the euro zone, consisting of 17 countries (see list).

Polka dot optimism

(photo credit Andrew Noyes)

Thank goodness for the Fall polka dot trend to invoke a little whimsy in an otherwise serious state of affairs.

I’ve been wearing them all week. And it’s not just me. I’m seeing them everywhere--polka dots paired with polka dots. And why not? Who couldn’t use a little cheer sprinkled in with the news these days.

Reviewing the week...
It began Monday with Obama’s speech on how to fix the deficit--raise taxes on the wealthy, cut spending. More specifically, meet the proposed “Buffett Rule,” named for uber-billionaire Warren Buffett who keeps saying it’s crazy that he pays less in taxes than his secretary (17.4% rate vs an average of 36%).

Under the Obama administration’s proposal, taxes would rise (or come more in line with what middle income earners pay) for the top one percent--people who earn over $1 million a year. The New York Times looked at Treasury Department data and said 238,000 households filed taxes with over one million in income in 2009. About 60,000 of those households paid less than 15% in taxes on that income.

Cue the “class warfare” rhetoric: Republicans say the wealthy are job creators who already pay more than their fair share in taxes. Obama responds: “This isn’t class warfare. It’s math.” Rather than “gut” education and medical research spending, it’s time to prioritize, make tough choices and have those who can afford it pay more. And if we do nothing...

Moving on, a few more highlights from the week...

• U.S. hikers imprisoned in Iran for two years are freed. Maybe soon we’ll understand exactly why they felt the need to hike along the border of Iran and Iraq, but we’re glad they are free. WSJ commenters were tough on these two.
• The United Nations met in New York where Palestinian leader Abbas lobbied for a seat in the United Nations, asking to be recognized globally as an individual state.
• Hewlett-Packard named former eBay CEO and California gubernatorial candidate Meg Whitman as CEO. Her appointment brings the number of women running Fortune 500 companies back to 12, which had dropped when Yahoo fired Carol Bartz a few weeks ago.

And finally...
On Thursday, Facebook rolled out changes to its site, introducing Timeline, a feature that lets you enhance your personal profile--to tell the story of your life and connect the dots. I covered the event, dressed in my polka-dot shirt, happy to be working in the excited, super-charged atmosphere created by the developers there. Silicon Valley these days feels like it exists in a carefree bubble, but the Facebook event was a welcome distraction from troubles brewing elsewhere in the world. Even as people partied it up, the Dow dropped a terrifying 500 points on worries that Europe’s debt crisis threatens a global recession.

Here’s hoping the polka dot optimism will see us through to the holidays.

 

For your digestion: Five news items from the week

Five things from the week (and all about food this week!)

Trading the pyramid for the plate

With a little help from Michelle Obama, the USDA replaced the food pyramid we’ve known but maybe not loved since 1992, with the new “MyPlate” this week. The new icon is a platedivided into four categories (grains, vegetables, fruits and protein), with a small side of dairy. The idea is to simplify the message about what and how much should fill a healthy plate: half should be made up of fruits and vegetables. MyPlate also urges smaller portions, low-fat dairy and less soda. 

Europe battles rare strain of E. Coli
A rare and deadly strain of E. Coli has sickened almost 2,000 people, killed 18, and left hundreds with kidney problems across Europe. Officials have yet to pinpoint where the rare and dangerous strain is coming from. Germany has taken the hardest hit, with the majority of cases reported there. Meanwhile, Russia has banned all imports of fresh vegetables coming from the European Union, a significant financial blow to farmers.

More Americans on food stamps
Just under 45 million Americans received food stamps in March, new data show, up from 40 million a year ago. The food stamp program, officially called SNAP (Supplemental Nutrition Assistance Program), cost $68 billion in 2010.How much money to allocate to the program next year is up for debate in Congress. Here’s a quick analysis of growth in use of food stamps.

Rice and corn prices set to double
There’s plenty of concern about the rising cost of food. Retailers say people spent less at stores in May due to rising food and gas prices; the United Nations reports global food prices are at a record high; and with some coffee bean prices up 99%from a year ago, chains like Starbucks are raising prices on consumers. Now, a new report says the cost of corn and rice will double over the next 20 years due to climate change. Look for conversation about stabilizing prices at the G20 meeting in France later this month.

U.S. considers food aid for North Korea
Some estimates say that due to a hard winter and its reliance on aid for food, North Korea’s food supply is running short, putting six million at risk. To assess the situation, the U.S. sent an envoy who is expected to offer a decision of whether to provide aid. But offering food aid to the isolated country is controversial--former President Jimmy Carter says it's a humanitarian must, others disagree.

Five things you (may have) missed this week

DSK and Arnold
Two men dominated headlines, and you probably couldn't avoid this news if you tried. IMF chief Dominique Strauss-Kahn resigned Wednesday amid sexual assault and rape charges related to an encounter with a hotel maid in New York over the weekend. He'll get a $250,000 severance and is free on $1 million cash bail, but apparently he's having a hard time finding somewhere to live while under house arrest. Meanwhile, Arnold Schwarzenegger put his come-back movie career on hold to deal with personal matters, namely the child he had with a member of his household staff. Paparazzi everywhere rejoiced. 

Arab Spring

On Thursday President Obama gave a 45-minute speech about the uprisings in the Middle East, known as the "Arab Spring," which began in December 2010 when a Tunisian cart seller set himself on fire. It later spread to Egypt, Libya and beyond (see interactive timeline of the uprisings). Obama's most important comments came at the end of the speech, when he said Israel's pre-1967 boundaries should be the foundation for any peace deal with the Palestinians. For background, in 1967 Israel and its neighbors (Egypt, Syria, Jordan) fought a six-day war in which Israel gained additional territories. Who that land ultimately belongs to is central to the decades-long Israeli-Palestinian conflict. The Israeli government was not particularly happy about Obama's remarks. (Good analysis of the speech here.)

LinkedIn goes public

Professional networking site LinkedIn (

LNKD) went public on Thursday, spiking above $120 a share before settling the day at $94.25 -- more than double it's initial offer price of $45. So far 63 companies have gone public this year--which is still a far cry from the 486 that hit the market in 1999 (see IPO chart). LinkedIn is the first of the social networks to go public, with Facebook expected next year. There's plenty of fresh talk about a bubble out there.

Circumcision on ballot in San Francisco

A group seeking to ban circumcision of boys under age 18 has succeeded in putting the initiative on the ballot in San Francisco. Proponents of the ban say it's an unnecessary and invasive surgery, which stands in stark contrast to the international effort to circumcise men to prevent the spread of AIDS. Some unconfirmed data show the number of babies circumcised at hospitals is dropping.

Ronald McDonald, "ambassador for good"

An open letter from some 550 health care professionals asked McDonald's to abandon using Ronald McDonald to market to kids. The CDC says 17% of kids under 19 are obese. CEO Jim Skinner told shareholders at the annual meeting no way, that Ronald McDonald is "an ambassador for good" and "going nowhere." In other related news... Man eats 25,000th Big Mac this week.

 

Awesome blog mention: Sites that make us smarter

Obviously we're thrilled to be included in this list of "Fab 5: Sites that make us smarter," along with some heavy hitters like the Library of Congress and the Smithsonian sites (love them too!). The CIA World Factbook is an amazing, amazing site and one we reference a lot. Check them out, and also check out www.dotcomsformoms.com, written by Rita Mauceri, who helps put information for moms at your fingertips quickly - something we like to do around here as well!

If you don't get the Diva yet, you should! Sign up - it's free and a quick read.

 

The Royal Wedding: Spotlight on the Monarchy - Costs & Future

Of course I’m writing this while wearing my fancy wedding hat, pondering if I’ll DVR the whole Royal Wedding or just watch endless news clips. It reminds me of the time an US Magazine subscription mysteriously appeared at our house and we (the newspaper household) did nothing to stop it--you know it’s a celebrity fest, but you just want to look! And who doesn’t love a wedding? 

But beyond the pomp and circumstance, some real issues and costs:

A day off in England costs the economy
Analysts say the national holiday for the big day could cost $10 billion in lost productivity. Souveneir sales and tourist spending aside, England’s economy is still recovering from a recession and unemployment hit a 17-year high recently with about 2.5 million people out of work (about 7.8%).

The monarchy in general costs the economy
While Will’s and Kate’s families are picking up the wedding tab, the royal family receives an annual allowance from the British government. Years ago the monarchy struck a deal to turn over revenues from royal properties (like Buckingham Palace) to the government in exchange for annual financial support. CNBC did a great break down of how this relationship works.

In 2009 the Queen received about $60 million (62 pence per taxpayer) from the government, which the monarchy highlights was lower than the year before thanks to cutbacks in chartered plane flights. The Queen’s official site says she pays taxes--voluntarily--and has since 1992. In terms of work, the Queen makes appearances as England’s Head of State and Prince William is a member of the military.

The government support is separate from the monarchy’s own personal wealth built on investments and properties. Forbes pegs the Queen’s net worth at $450 million.

The wedding also spotlights the monarchy amid questions about its role in a modern world
There are about 35 constitutional monarchies around the world. And while largely ceremonial in England, meaning the Queen has very few official duties, it’s controversial.

One pro-democracy, anti-monarchy group called The Republics is hosting a “not the Royal Wedding” street party on Friday in London. Per their Web site, they want three things: “a republican constitution, the right to a democratic head of state and an end to the monarchy.” Polls show a decreasing number of people believe the monarchy will exist in 100 years.

The face of the modern monarchy
If nothing else, the monarchy, which dates back to the 1600s, is trying to modernize itself. They have a host of informative Web sites, including one for Prince William and Prince Harry, an official wedding Web site, a YouTube channel, a Facebook events page, and of course, they’re Tweeting. Plenty of places to follow the pomp and circumstance.

 

Brilliant timing of a government showdown

Most annoying week ever or important exercise on spending?
The political theater reached a frenzy just before lawmakers dodged a crisis and kept the U.S. government open for business.

The timing was brilliant
The dramatic right-versus-left showdown allowed lawmakers to save face and look tough while ultimately avoiding a shut-down. Some are saying both Democrats and Republicans won and can’t be blamed in the next election cycle for bringing things to a grinding halt.

The economy was likely a key factor in averting a shutdown
The fragile, recovering economy would likely have suffered in the wake of a shutdown. How would the markets have reacted Monday if there had been an impasse? And how would the so-so jobs picture have fared? When parks and places, like the National Mall or the Grand Canyon, close, so do the small businesses that rely on their foot traffic. Not only would 800,000 federal employees be furloughed, but plenty of private sector jobs would be too.

Congress has one more week to finalize the details, with a vote expected on Thursday
Here are a few key points from the Friday compromise: 

1. Planned Parenthood and Title X (which we wrote about last week) are safe for now but part of the deal requires the Senate to vote on defunding both next week.

2. The Senate will also vote on if to defund health care reform.

3. The overall budget only lasts for six more months--September 30 marks the end of the 2011 fiscal year, so get ready for 2012 budget jockeying to begin soon.

4. The deal cuts $39 billion (which Obama calls the largest cut in history) from the budget, making the final budget $79 billion shy of what Obama had originally proposed. All of these reductions come against the backdrop of anexpected $1.6 trillion budget deficit this year.

For more details on the deal see this report and this one, and for a good look at what’s next, read this. 

Truth behind the fiction

If you were following the news on Friday it felt a little nutty watching the media and political aides and politicians scuttling all over Capitol Hill, giving press conferences, setting the scene for the dramatic last-minute saved-by-the-bell deal. But indeed there is some truth behind the fiction in this story. We do spend more than we bring in, and some economists argue that was necessary in a recession. David Brooks of the NYT argues it’s time to wake up and realize that if you want public services, there are consequences--because they cost.

Image from www.whitehouse.gov

Purse Points: The Week of 3/28-4/1

(New!) PURSE POINTS

Headlines from the week that you may have missed, zipped up here to tuck in your purse ahead of the weekend...

• Economy adds jobs, but not all rosy
  No fooling, the March jobs report came in a bit better than expected, adding 216,000 jobs during the month and lowering the unemployment rate to 8.8 percent. Still, some 13.5 million people are still unemployed and close to half are considered "long-term unemployed" - without jobs for over six months. (Here's a good visual of the unemployment situation since 2007.)

• Home prices are back near recession lows
  Home prices fell for the sixth straight month, bringing the average home price to $156,000, down 5% from a year earlier and leading to plenty of bargain hunting. That said, a Russian investor plunked down $100 million for a house in Los Altos, Calif., about 30 minutes south of San Francisco.

• Sorry KC, MO: Kansas City, KANSAS wins super-duper fast Internet
  If you want to experience the fastest Internet in the country, you'll have to head to Kansas City -- Kansas City, Kansas, that is! Google chose KC after asking cities to pitch them on where they should build a super-duper fast experimental network. Looks like it will be up and running early next year.

• The Tweeting Cobra 
  After a cobra went missing from the Bronx Zoo, one enterprising Tweeter set up an account, tweeting on behalf of the cobra who toured New York and ammassed over 200,000 followers within the week. A really fun read if you need a laugh. Alas, when the cobra was found, the Tweeting cobra, who had a Facebook page launched to try to host Saturday Night Live, began Tweeting from inside. Stay tuned it seems!

• Opening Day!
  Baseball season began Thursday--an early start this year.

The Gipper's Near Miss

I was only 7 years old, but I can distinctly remember being glued to the television set at my grandmother’s after learning Ronald Reagan was shot, watching the scenes and realizing even at such a young age that I was witnessing something historic. It’s hard to believe that was 30 years ago, but indeed we’ll mark that anniversary on March 30. 

Of course in the end it wasn’t as bad as it could have been. Reagan survived, served two terms as president, the free world was fine, and the Jodie Foster-obsessed shooter was locked up. 

What you may not know is just how close Reagan came to dying that day, and how the quick thinking of a secret service agent who threw the president into his limo ultimately saved his life. No one knew Reagan had been shot (seemingly not even he knew exactly) until once inside the car where he complained of trouble breathing and theagent saw blood on his lips.