Ski time!

On Thursday, Dennis and I went skiing in Wisconsin with two other friends. The drive to the ski resort, Devils Head, took over three hours. It was my second time skiing (my first time was in PA two years ago) and I was anxious because I remembered falling a lot the first time. I started out warming up on the bunny slope and you know what, I didn't fall once. I guess my body retained some basic moves. Maybe it's like biking, once your body learns the skill, it doesn't forget easily. In any case, I definitely felt more comfortable skiing; it was time to move on. The rest of the day, I skied on the green, the blue, and yes the black slope (although only once). I can't claim I'm a good skier yet (I fell 3-4 times), but I am definitely getting better. Skiing on the black slope was really scary. I was hesitant at first, but then I thought, well what's the worst that can happen? Falling down isn't fun but at least it doesn't hurt. I knew I would regret it if I didn't try it, and so I did. Wow! What a rush! All I can say is, I can't wait to go skiing again. 

Food cost: up, up, and...up?

These days whenever I go grocery shopping, I always come out thinking about how things used to be cheaper. The first time I really started paying attention to my grocery bill was during my second year of college (four years ago). That is only because I was on a meal plan my first year, meaning I didn't need to cook (I couldn't even if I wanted to since I didn't have access to a proper kitchen). To further illustrate, look at how much the price of these food has gone up in the past year alone:

-eggs up 43.9%

-milk up 21.3%

-meat up 6.4%

-poultry up 7.2%

So, why? After deducting inflation from the equation, the rising food price phenomenon can be directly accounted for by the law of supple and demand. To illustrate, countries like China (whose economy has been growing at a ferocious rate) are competing for the same commodities in the global market as the U.S. These commodities include food and energy. The U.S. is a major supplier of food but not of energy. This translates to rising food cost and soaring energy price.  Did I mention how soaring energy price directly contribute to rising food cost since the cost of transporting food is increased? The saying that oil is king is not an understatement. 

What can the U.S. do to become more self-sufficient? In comes ethanol...made from corn that is. 

It seemed like the perfect solution.  Instead of paying other countries for oil, we can pay our own farmers to make ethanol from corn. Moreover, burning corn-derived ethanol is a lot better for the environment. What a perfect way to kill two birds with one stone!

If only that was the case. Since we are paying our farmers more to use corn for ethanol, we are left with less corn for our own consumption. Not to mention all the corn-derived products including corn syrup and corn oil. Moreover, farmers frequently use corn to feed their livestock...well they used to anyways. To further poke holes at the rosy picture, corn-derived ethanol is not as efficient as crude oil. Although I am certain the energy efficiency will continue to improve with further research, I really doubt we will reach the point where all of our oil will come from plant. 

For now, this is a lose-lose situation. With time, in the best case scenario, our farmers will plant more corn to boost supply and our corn-derived ethanol will be a lot more energy efficient. Otherwise, the exorbitant prices will be unbearable, people will protest and government will probably have to subsidize the cost of food or energy. 

Northern California trip/family reunion

Dennis and me in front of the Golden Gate Bridge

Crashing waves of the Pacific.

Night time view of bridge.

Left to right: Carol, Dad and Mom, Fang and Susan, me and Dennis.

Another picture of the extended family.

Liang's family shot.

Us again.

I spent the Thanksgiving holiday in the Sunshine state with friends and family, far away from Chicago's winter (thankfully). California is a huge state with so much to see and do, where do I begin? Luckily, our gracious hosts, Susan and Fang, packed the four-days trip with their favorite Northern California destinations.

Some highlights of our trip include the Golden Gate Bridge (a must see), touring the Napa Valley wine vineyards (fantastic wine tasting opportunity), and driving through the 17-miles drive in Carmel (beautiful, beautiful, and did I say beautiful?). Needless to say, I was very content with all the places; what's more beautiful than the arts of Mother Nature? 

Thank you again for a fantastic time Susan and Fang. 

Seattle trip

(From top to bottom: view of Seattle from Space Needle Observatory, Pike Public Market, Space Needle, seafood stand inside market, restaurant featured in "Sleepless in Seattle," and the first Starbucks)

I spent the Monday and Tuesday before Thanksgiving visiting Seattle, WA. My first impression of the city (after leaving the airport) was that it was dark, cold, and gloomy. Having just left Chicago where the average temperature was in the 40s, I was disappointed to encounter similar weather in Seattle.  However, the drive through downtown Seattle soon cheered me up. It was only a 15 minutes ride from Seattle-Tacoma airport which I find very convenient. I find Seattle downtown to be very different from Chicago's.  For one thing, Seattle downtown is much smaller. I did not go to the shopping district so I cannot compare it with Chicago's Magnificent Mile. However, what attracted me to Seattle's downtown is the variety of shops, eateries, and markets. There is the famous Pike Place Market where one can find booths and stands selling everything from local crafts to fresh seafood and bakery. I find it really refreshing to have access to so many affordable multi-ethnic eateries including Russian, Turkish, Thai, Japanese, French, etc.... In short, I left with a good impression of Seattle. I don't think I would visit anytime soon but if I get a chance, I just might move here. 

Anticipated Federal Reserve rate cut tomorrow

Today, three major US market indexes ended higher as Wall Street bet the Fed will cut rate by at least 0.25 points tomorrow:

Dow Jones Industrial Average: up 0.5%

S&P 500: up 0.4%

Nasdaq: up 0.5%

Sure, this may seem like a rosy picture; a Fed rate cut is great, right? 

Not entirely. Let's look at some of the pros and cons of a rate cut. 

Pros

Fed rate cut will lower interest rate on loans. This is great for people/companies who need to borrow money or refinance existing loans. Since people have easier access to money, they are more willing to spend the money, thereby providing liquidity to the market which is needed to boost the economy. Similarly, companies can borrow money for their own investments (e.g. to expand business) as well as to complete transactions (e.g. mergers). Healthy companies lead to a healthy economy by providing employment and income for individuals (i.e. trickle-down theory).

Cons

Lowering the interest rate will further weaken the value of the dollar primarily because investors will not want to invest in a currency that is not yielding an attractive return. As of today, the exchange rate is approximately 1.44 euro: 1 dollar. Clearly, the European Central Bank (home of the euro) is a much wiser investment than the Federal Reserve (home of the dollar). Since the dollar is worth less, your buying power is reduced. A trip to Europe will be much pricier than before. It will cost you more to fill up on gas since the price of gas is pegged to the dollar. In other word, when the dollar weakens, the price of oil is cheaper for global investors since their currency remained the same. 

The declining dollar will help US exporters (since their goods will be cheaper in the global market) and harm importers (since they will have to pay more for the same items). In case you have not noticed, US imports heavily. Just think about how much of the stuff that Americans consumed were made in China. 

So there you have it, some basic points to keep in mind when thinking about the Fed's rate cut (I haven't even gotten into inflation yet!).

Now comes the big question, in anticipation of tomorrow's rate cut, should we cheer or fear?

Movie: Tony Takitani

I'm starting my blog over because I accidentally deleted my two previous entries.

Over the weekend, I watched an old Japanese movie titled "Tony Takitani." You may have already guessed, Tony Takitani is the main character in the movie. Tony is an artist, an illustrator to be exact. His mother passed away three days after he was born, leaving him with his father, a freelance musician.

As a child, Tony was a loner. His father, rarely home, spent most of his time traveling to and performing at various night clubs. Tony did not have any friends. Many people were suspicious of him because of his American name, an uncommon occurrence in post-Word War II Japan. It's no wonder then that Tony grew up all alone. However, Tony never thought about his loneliness, it just never occurred to him. And why should it, he's living like he's always lived. He was satisfied.

One day, Tony met a beautiful woman who was 15 years younger than him. He instantly fell in love with her and for the first time in his life, he realized how incredibly lonely he was. He was no longer satisfied with his life; he wanted her, he needed her. Although the woman was hesitant at first, Tony's persistence prevailed. They got married and were very happy together. Life was beautiful.

Unfortunately, Tony discovered that his wife was addicted to shopping for high end couture fashion. Tony's wife relishes in the presence of expensive clothes and accessories. Every day, she goes shopping and buys new outfits. Before long, they had to convert an entire room to a wardrobe for his wife. Finally, Tony approached his wife and asked if she could possibly stop shopping this frequently.

Tony's wife promised to control her addiction. For an entire week, she stayed at home, fearing that she would be tempted to buy things if she were to go out. She started spending more and more time in her wardrobe, staring at her large collection of clothes, shoes, and accessories. The more she stared, the more she yearned to buy new outfits. Finally, she could not take it any longer; she went shopping. She bought more clothes and returned home, satisfied.

Then, the guilt weighed in. She did love her husband. Did she love her husband more or her clothes? Of course she loves her husband more. She headed back to the store to return the purchased items and proceeded to drive back home. But alas, there she was stuck at the red traffic light. Why did it so long for the light to turn green? Why was it that all she could think about was the clothes that she had just returned? She was suffocating and could think of only one solution, to return to the store. Without further thought, she made a U-turn. The car hit something. She died.

As time passed, Tony learned to forget the entire episode. He never had a wife, he never fell in love.

The movie is a tragedy, or is it? True, Tony experienced a tragic loss at the end, but in exchange, he lived the happiest days of his life with his wife. Is Tony better off being a loner and never achieving bliss? Is it better to live a balanced life with ups and downs or is it better to live a flat life?

Perhaps the best answer to the first question comes from the answer to this question: is Tony dwelling on the past by repressing memories of his deceased wife?