What I Learned Today

The Guru Scene 2008

The Wall Street Journal’s Guru Scene 2008 ranks the most influential business thinkers based on media mentions, Google hits, and academic citations. The top ten are

Gary Hamel - Consultant
Thomas L. Friedman - NYT columnist
Bill Gates - Microsoft chairman
Malcom Gladwell - Author ‘The Tipping Point”
Howard Gardner - Harvard professor
Philip Kotler - Northwester professor (tie w/ Reich)
Robert Reich - Ex-Labor Secretary under Clinton (tie w/ Kotler)
Daniel Goleman -Psychologist
Henry Mintzberg - McGill professor
Stephen R. Covey - Author ‘7 Habits of Highly Effective People’

See the top 20 which include many non-traditional business experts like journalists and psychologists. But where are all the women?

Recognize that scarf? If you don’t, take one stop on the L train and you’ll see it all over the place. Or maybe you could just watch the news. You’ll likely catch a glimpse of it there.

So how did this turn into this?

Well, the scarves first became a popular fashion trend in the US during the First Palestinian Intifada in the 1980s. Now they’re back and being sold all over – TopShop, on the street on Broadway, and even in Urban Outfitters as the “Anti-War Woven Scarf.” Well, at least until controversy arose & they discontinued it, but then released the all too similar “Fringe Square Scarf.” Hipsters, Spanish leaders, even daughters of presidential candidates are all hip to the style.

So I get it – it’s cute, and is great with cutoffs and a wifebeater. Fold it in half and tie it around your neck so the triangle points down, right? Totes. But do they even know what they’re wearing? Perhaps. But perhaps not, as one NYTimes scarf-wearing interviewee says, “I’m not too up to speed in what’s going on in the Middle East.”

Here’s a bit of history about this great new accessory. It’s a Keffiyeh, and was originally the headwear of Palestinian peasants. It became the symbol of Palestinian nationalism and of class struggle during the 1936 to 1939 Great Arab Revolt against the British Mandate of Palestine when the insurgents forced upper-class Palestinians to wear it to show sympathy with the fighters. Later, in the 1960s when the Palestinian resistance movement began, Yasser Arafat adopted it. It now adorns the heads of the younger generation in the Middle East to show support of the Palestinian cause. The black and white keffiyeh is associated with the Fatah, the largest faction of the Palestinian Liberation Organization (PLO), and apparently the red and white keffiyeh is associated with the Hamas. You know, the terrorists?

But the Keffiyeh stands for many different things for many different people. For some, it stands for Palestinian solidarity, or “taking a stand against the state of Israel’s oppressive and racist policies toward Palestine” - the PLO scarf. For some, it stands for anti-Semitism while promoting terrorist groups. For others, it is an attempt to trivialize the Palestinian cause by making the symbol so ubiquitous that it loses its meaning. For some it is merely a practicality to shade one’s face from the sun and heat in arid desert nations. For others, it is a shemagh, the Anglicized name given to the scarf by British soldiers who wore them during WWII. For others, it’s just a fashion trend, an item of symbolic meaning marketed for the masses. Get your own at Talibanana.com!

In other news, “the swastika is the new black.”

twistori

is a really interesting social experiment. what did people do before they could express themselves on the internet for strangers to read?

The NYTimes delineates the percentage breakdown of consumer spending in 2008, and the percentage change (from March 07 - March 08) in components of CPI (Consumer Price Index, the average price of consumer goods & services purchased by households, a measure of inflation). Browse the interactive map for more details.

“I started this campaign because of the distorted way the media prioritizes between big and small world news. How can Paris Hilton make more front covers than the genocide in Darfur?”

In an effort to prove that a Paris Hilton-centric image would get more media attention than real-life Darfur victims, Nadia Plesner, a 26 year old student artist, drew this image of a Darfur victim holding a teacup style dog and toting an Louis Vuitton-inspired bag. 100% of profits from the shirts and posters she sells with this illustration that she calls “Simple Living” is donated to Divest for Darfur.

But Louis Vuitton is none too pleased with this “infringement [on their] Intellectual Property Rights” and, as of April 15, is suing Plesner for $22,000 per day that she continues her campaign.

Food Crisis for Thought

“A silent tsunami which knows no borders is sweeping the world,” says the head of the UN World Food Program. In Haiti, protesters shouting “we’re hungry” forced the prime minister to resign. Cameroon saw 24 deaths during hunger riots. Egypt’s president has ordered the army to bake bread. Hoarding rice in the Philippines is now punishable by life imprisonment. Riots in Côte d’Ivoire have caused the government to postpone elections. The World Bank believes 33 countries are in danger of being destabilized and food inflation will push over 100 million people into poverty. And the price of your box of wheat thins rose by 15 cents. Here are some reasons why (in no particular order)…

Population growth. More people = greater demand for food. Supply lags demand because it takes a season to grow more food, and farmers can’t necessarily just respond to the market because of this (if they grow more & demands declines, they lose. This is especially true for farmers in emerging markets).
China and India have started to eat meat. Increasing affluence in emerging economies means more people can afford more food (including meat). It takes 700 calories worth of animal feed to produce a 100-calorie piece of beef, so the demand for grains has increased.
Biofuels. The government subsidy of ethanol, which converts cereals (namely corn) into fuel, has spurred the demand for corn. The European Union will soon be implementing its own biofuels target, which will only aggravate this further. It takes 528 pounds of corn to fill the tank of one SUV. The same amount could feed one person for a year.
Oil oil oil. Farming is highly energy intensive (producing fertilizer, running tractors, etc), and becomes more expensive as the price of oil increases. Transporting food from farms to consumers is extremely energy intensive and costs more as oil (and gas) prices increase.
The commodities market. It’s booming and people are investing. After the subprime crisis, speculators and hedge funds have switched from investing in high-risk-of-default securities to investing in commodities, or “stores of value.” This investment pushes the prices up further (more people want to invest b/c they see others making profits. When more people invest, prices increase, so more people invest, etc).
Drought. China, Indochina and Australia have all experienced droughts recently. Australia has seen an epic 3-year drought causing its total rice capacity to decline by one third. It supplies rice to countries like Cameroon, Egypt, Ethiopia, Haiti, Indonesia, Italy, Ivory Coast, Mauritania, the Philippines, Thailand, Uzbekistan and Yemen, which have seen violent protests over famine this year. Countries like Senegal and Haiti each import four-fifths of their rice.
The chardonnay effect. Because of this drought in Australia, farmers received only 1/8 of the water they usually receive from the government (Australia’s water is allocated by the government, and the water rights can be traded thereafter). Thus, many farmers are abandoning rice, which requires large amounts of water, to plant less water-intensive crops like wheat or wine grapes. Some farmers have even sold their fields or their water rights to grape growers. Grape growers are thriving because it is more profitable to grow grapes, even with the increase in the price of rice. Wine grapes produce a pretax profit of $2,400 an acre where as rice produces $240 an acre. You can read a bit more about it here. We have seen this effect with other crops: as prices of corn rose, farmers abandoned their crops (including rice & wheat) to turn to corn or cattle raising, causing a decline in supply and thus higher prices of those staples.
Genetically modified crops. GM crops produce 10% less food than its conventional equivalent (per a new study of genetically modified soya). 85% of the US soybean crop and 45% of our corn crop is genetically modified.
Trade policies. Many countries have banned or curbed food exports to ensure domestic availability. This so called “starve-my-neighbor” policy distorts the flow of commodities across borders and exacerbates the food shortage in the world market.

World’s Oldest Tree! This spruce resides on Fulu Mountain in the Dalarna province of Sweden and has roots that are 9,550 years old. Prior to its discovery, scientists believed the oldest trees were 4,000 year old pine trees.

Common vs. Preferred. Stock, that is..

In brief, preferred stockholders get dividends but can’t vote. Common stockholders can vote but don’t get dividends.

Common stock is the most typical type of stock; when people refer to investing and trading stocks, they are usually talking about common stock. Common stock represents ownership in a company; each share gives the owner one vote on anything put to vote in the annual meeting, including electing the board of directors. Dividends (a fixed stream of income) may be paid to common stock owners, but are never guaranteed and depend on if the company is doing well in the market. Common stockholders have a residual claim, meaning they are last in line to receive assets and income of the corporation. But they do have limited liability, meaning they can’t lose any more than their original investment if the company were to fail or go bankrupt.

Preferred stock is also ownership in a company, but doesn’t have the same voting rights (you can’t elect the board, for example). Preferred stock is typically a more stable investment – it promises to pay a fixed stream of income each year in the form of a dividend and is not subject to market fluctuations. Dividends are always paid to preferred stockholders before anything is paid to common stockholders (because of that residual claim to common stockholders as aforementioned). Preferred stock is callable, meaning that if the company decides it wants to buy back the stock, it has the right to do so at any point.

Many companies do not issue preferred stock because it’s expensive to do so. Thus, companies may prefer to issue a bond (which pays out interest in pre-tax profits) than preferred stock (which pays out dividends in post-tax profits). Preferred stock is not usually held by individuals (you or me). Instead, it is held by other corporations because they receive a “dividend received” tax deduction of up to 80% of preferred dividend income. Individuals are not eligible for such a tax break.

Though preferred stock is a more stable investment, common stock yields higher returns in the long-term. No risk, no reward I suppose.