Cabbage Shortage Causes Big Kimchi Problem in Korea

October 15th, 2010

In an interesting spin on food consumerism, Koreans are universally appalled at having to eat commercially-made kimchi instead of the homemade variety.

  • There’s a shortage of Napa cabbage in South Korea, and it’s threatening the national dish. Kimchi is a spicy fermented cabbage concoction used as a condiment, a main dish, and an alternative to salad. It’s eaten at pretty much every meal, every day.
  • The shortage is probably related to heavy rains this year, which reduced the cabbage harvest. To compound the problem, farmers may have planted fewer crops this year in response 2009′s overproduction (which resulted in lower profit).
  • Traditionally, kimchi is made by women at home. Whole heads of cabbage are salted and spiced, then buried in earthenware jars until they have pickled. When they’re opened – voila! – kimchi.

Facts & Figures

  • In 2009, the price of a head of Napa cabbage was about $1.40. Now it’s about $14.
  • Homemade kimchi can cost twice as much as pre-made.
  • A typical batch of kimchi includes cabbage, radishes, red chili peppers, salt, and garlic.

Best Quote

“The prices will go down. Sometimes they’re high, sometimes they’re low. Easy come, easy go. That’s life.” – Lee Young-ae, Food Vendor at Mo Rae Ne Market

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Forget Traditional Fundraising. Let’s Grow Weed!

October 13th, 2010

Everyone had a theory about what would happen when California legalized marijuana for medical use, but growing it to fund an art foundation probably wasn’t on the list.

  • Using a small plot of land in Sonoma County, Kirsha Kaechele is experimenting with a way to fund arts programs in perpetuity by legally growing marijuana.
  • Some growers are already donating some of their profit to charities and creative causes, but Life is Art is hoping to use the marijuana farm as a consistent source of funding for a lifetime of homegrown art projects.
  • In November, California voters will consider a proposal to make marijuana legal for recreational purposes. Marijuana supporters who oppose the measure worry that expanding use will allow corporations to step in, put small growers out of business, and eliminate the potential for charitable growing.

Facts & Figures

  • Selling marijuana is still technically a crime under federal law.
  • An ounce of medical-grade marijuana sells for about $200 in the San Francisco Bay Area.
  • Art is Life plans to generate $1 million next year to pay for art projects based on the farm and in New Orleans.

Best Quote

“The whole game of finding support just started to seem so childish. So I decided to grow up and became a marijuana farmer.” – Kirsha Kaechele, Director of Art is Life Foundation

The Real Value Of A Falling Dollar

October 13th, 2010

The value of U.S. currency has gone down nearly 10% against the euro in the past three months, but the impact on exports, tourism, the price of oil, and foreign investment may not necessarily be as bad as it seems…

  • When the value of the dollar falls, it means that $1 is worth less compared to one unit of another form of currency. So if $1 was once worth 1 euro, a fallen dollar might be worth only half a euro. That makes U.S. dollars cheap to euro-holders, and euros expensive to dollar-holders.
  • A cheaper dollar means that U.S. goods are more attractive to foreign buyers, so exports will likely rise. Since many American companies make a good portion of their profit outside the country, this could be a significant boost to the economy. A weak dollar is also an enticement for foreign tourist to visit the U.S. and spend lots of euros and yen!
  • The price of imported goods is going to increase. Of course, this could just encourage Americans to drive domestic industry by purchasing more affordable American-made goods. But not every product can be duplicated domestically.

Facts & Figures

  • In 2009, foreign tourists in the U.S. were responsible for $120 billion in revenue.
  • In July, an 8GB iPhone selling for $99 would have cost an Italian customer 78 euros. Today it would cost only 71 euros.
  • If they cashed out now, investors in the Euro Stoxx 50 index would be up 17% from 3 months ago simply because of the change in the dollar’s value.

Best Quote

“International finance isn’t pretty. If everyone focuses on exports, it’s a race to the bottom in exchange rates.” – Aroop Chatterjee, Currency Strategist at Barclay’s Capital

In Exhibition Soccer Matches, Everyone Wins

October 13th, 2010

Practice in new climates isn’t the only reason teams are playing in distant locales.

  • More and more, national soccer teams are playing exhibition games (called “friendlies”) in unusual places, often far from home.
  • The practice is basically a money-maker for everyone: the agents that manage a team’s exhibition games try to maximize profit for the teams, the game broadcasters, and sponsors. They manage to make a pretty neat profit for themselves, too.
  • Teams are sent to play friendly matches wherever they’ll get the biggest audience – live or on television. Brazil recently played a friendly in Derby, England that was viewed live by only 13,088 fans but broadcast to 120 different countries.

Facts & Figures

  • In October, Argentina traveled to a friendly match in Japan, Chile traveled to Oman, and Brazil played Iran in Abu Dhabi.
  • Since June 2007, only one of Brazil’s 18 exhibition games has been played in Brazil.
  • As a result of their deal with sports rights agency Kentaro, the Brazilian soccer federation receives approximately $3 million.

Best Quote

“This is the new landscape of international football. Friendly games used to be a chance to try out new players or different formations. Nowadays they’re about making money, which means going wherever you’ll get the biggest audience.” – Tony Cottee, Football Analyst and Former Player for the England National Team

Paying For A Single Year Of College: Waste Or Investment?

October 11th, 2010

Dropping out of college after only one year does more than anger parents. Some people are saying it’s a waste of taxpayer money, too.

  • A new study shows that between 2003 and 2008, states distributed about $6.2 billion to help a very special group of students pay for school. This group is made up of students who dropped out after one year.
  • Critics and regulators are generally of two opinions about this apparent waste of public education funding: one group says it shows that colleges are not doing enough to retain its students. Others say this problem makes it clear that too many students are being encouraged to attend four-year colleges.
  • There are two approaches as well: Ohio has started basing its funding decisions on how many students graduate from a university – not how many enroll. But the Obama administration and certain private funders have been focusing more on helping students get through life without a college degree.

Facts & Figures

  • In addition to the $6.2 billion states spent on higher education for dropouts from 2003-2008, federal and state governments spent almost $3 billion on grants for these students.
  • These figures represent 2-8% of states’ total higher education spending.

Best Quote

“We recognize an institution is not going to be perfect on graduation and completion rates. But at the same time, we know they can do better than they’re doing. And if you place the financial rewards around completion, then you will motivate that.” – Eric Fingerhut, Chancellor of the Ohio Board of Regents

Congressional Staff Profit From Suspicious Trades

October 11th, 2010

If you invest because you know a government bill benefiting a certain industry is going to pass soon, does that make you an inside trader?

  • You may be surprised to learn that insider-trading laws don’t apply to Congress. Some lawmakers have tried to change that with the STOCK (Stop Trading on Congressional Knowledge) Act, but there hasn’t exactly been a lot of momentum to get that law passed.
  • The Wall Street Journal went through financial records of Congressional aides and found that many were trading in stocks whose prices were directly or indirectly impacted by the legislative activities of their bosses. The finance and energy sectors were especially popular among Congressional traders.
  • Because aides don’t technically make the decisions that determine whether laws are passed, some say there is no real conflict of interest. But both members of Congress and the highest-paid Congressional aides (about 11% of all aides) are required to make the details of their personal finances public.

Facts & Figures

  • In 2008 and 2009, 72 Congressional aides have traded stock in companies overseen by their bosses
  • Some of the higher-paid aides earn salaries of $170,000 per year

Best Quote

“Congressional staff are often privy to inside information, and an unscrupulous person could profit off that knowledge. The public should be outraged there is no law specifically banning this.” – Vincent Morris, Spokesman for Rep. Louise Slaughter (D., N.Y.)

Microsoft Fights For Space On The Smartphone Stage

October 11th, 2010

Microsoft basically threw its old smartphone operating system out and tried again. Worth it? We’ll see…

  • Microsoft has just unveiled seven new smartphones it will be launching in partnership with several cell phone companies (AT&T, T-Mobile, Deutsche Telekom AG) over the next few months. So far, the new technology isn’t compatible with Verizon or Sprint Nextel networks.
  • The handsets are produced by different manufacturers, but they all run on the new Windows Phone 7 mobile operating system. The system has been totally redesigned in an attempt to compete with the more popular iPhone and Android.
  • Windows Phone 7′s interface is inspired in part by the company’s Zune mp3 player, and will feature an optional paid service (U-Verse) that allows users to watch cable shows on the device.

Facts & Figures

  • The seven new devices go on sale beginning November 8th
  • Three of the AT&T-branded phones are priced at about $200 with a 2-year contract
  • In the 2nd quarter of 2010, Microsoft’s piece of the smartphone OS market pie dropped to 5.5%

Best Quote

“The phones are always delightful, and wonderfully mine. This is a different kind of phone.” – Steve Balmer, Microsoft Chief Executive

An Annual Meeting is…

October 8th, 2010

An annual meeting in the investing world is a legally-mandated gathering of company leaders and its shareholders. The annual meeting (also known as the annual general meeting) is a place for shareholders to learn about and discuss past and future fiscal years. They also have the opportunity to elect directors for the company’s board. Basically, it’s an opportunity for any shareholders or partners of the company to review what happened in the past 12 months and plan for the year ahead.

U.S. Companies Buying Stock… In Their Own Companies

October 7th, 2010

It’s an easy way to make your shares look better, but is it the kind of long-term investment companies need?

  • Companies these days have a lot of cash on hand. Because of the recession, they’ve been scared to spend too freely and risk losing more money. So they’re doing something kind of unusual: they’re buying back stock they’ve sold to investors.
  • Buying up lots of your own company’s shares makes your stock look better to investors because of a statistic called earnings per share. If you reduce the number of total shares available to the public (by buying them back), you make that number go up.
  • Spending cash on shares means not investing in company infrastructure or workforce. Some people say it’s a bad long-term strategy because it’s based on short-term gains, not long-term growth.

Facts & Figures

  • Firms plan to buy back $273 billion of their own shares this year.
  • According to the Federal Reserve, companies (excluding financial firms) held $1.8 trillion in cash and other short-term assets as of June 2010.
  • Some of the companies buying back large amounts of their own stock include Hewlett-Packard, Pepsico, and The Washington Post Co.

Best Quote

“It’s totally wasted money. It does not do anything long-term for companies.” – William Lazonick, Professor and Director of the Center for Industrial Competitiveness at University of MA at Lowell

Air Travelers Pump Up The Crankiness

October 7th, 2010

See? Someone is listening.

  • The Department of Transportation received 8,797 complaints about airlines from consumers this year. That’s 32% more than last year.
  • This sharp increase in complaints is strange, since airline performance doesn’t seem to have decreased since last year. Planes are taking off more or less on time and keeping customers in their seats. This year’s complaint levels are at about the same level as in 2008. Airline service improved in 2009, resulting in fewer complaints.
  • The DOT explains that this year’s spike may be a side effect of an easier online complaint tool. Airlines blame bad weather. Customers blame the airlines. They say that when problems do arise, customer service is bad at best and hostile at worst.

Facts & Figures

  • Delta was the target of the most DOT complaints this year.
  • Complaints about airlines’ failure to provide alternate transportation have increased 82% this year.
  • “Misinformation” complaints have jumped 70%.

Best Quote

“This was so egregiously outrageous.” – Patti Sachs, burned United Airlines customer

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