Our little Elizabeth Regina, now 19 months old, is enjoying her final days of being the only child and has no idea what’s coming. We are expecting our second child any day now. This past Sunday she took her first walk with her Dad to the supermarket without a stroller and behaved very nicely, even standing in line by herself. She also ate duck shit in the park and seemed to have survived that as well. Her TV exposure is limited to Teletubbies and she eats a very nice diet of fruits, vegetables, chicken, occasional fish and of course Treats. She really goes for corn on the cob, cherries and gelato. She sits at the table now, eats with a napkin and cleans up after herself. A bit scary how she is like her Dad. It is quite surprising just how fast she develops; each day is really a new adventure.
City Living…This month I came across an interesting comment by a Yale undergraduate about life in the suburbs as part of a speech I heard extolling the diversity of city life over the homogeneity of the suburbs:
“We’re big on lots of stuff; we have lots of churches, youth groups, para-church organizations, ecumenical movements, political coalitions. They fight abortion in the voting box and put up billboards besides the freeways explaining that abortion is murder but no one is helping single mothers or pregnant girls hold their life together. The churches are in suburbs with private daycares. They fight homosexuality but don’t care for people with AIDS. They want their taxes lowered, they want to fight a war on drugs, but they don’t want to support rehab centers. And they go to church and pray, and God is disgusted. What God wanted from them was justice, what he got was religion.” J.D. Wiley, commenting on the book of Isaiah, which in 58:2-7 discusses the fast the Lord desires….”Surely this is the fast I choose: To break open the shackles of wickedness, to undo the bonds of injustice, and to let the oppressed go free…Surely you should break your bread for the hungry, and bring the moaning poor into your home; when you see a naked person, clothe him and don’t hide yourself from your flesh.”
I thought this was an interesting point of view except that I feel that in the cities you can also be quite anonymous in a way you can’t when you live in the suburbs, at least if you are part of a religious community such as Orthodox Judaism where people notice if you don’t show up to synagogue and where you have to invite people over and be invited over to homes.
In Manhattan, the population of families with children under 5 has gone up over 50% in the last decade. The city has many new buildings going up with large family-style apartments. The prices are very high, but then living in the suburbs also has its costs, such as cars, property taxes and the time of commuting. Because both Karen and I have jobs in the City, we hope to continue to stay here for at the least the next 3-5 years but the cost of housing is so sky-high that even with a 20-30% drop in the market, it will be still be unaffordable to buy. Price per foot to buy in a new condo building approaches $1,500 per square foot. So far the market hasn’t dropped and has actually gone up quite a bit in the last 3 months, although I have noticed that people with huge real estate holdings have sold out all their buildings this year (when 3 years ago they wouldn’t even sell me one apartment) and a major player told a friend of mine that he thought the market could drop as much as 50%.
The Middle East….I’ve been holding off writing because I have this feeling that the sky is about to drop like it did last year but perhaps not. Last summer’s events in Lebanon were irrational and could not have been predicted; Nasrallah admits that he didn’t intend a war to break out and Olmert has been found to have acted without consulting and after his military told him that his objectives could not be achieved. The question this summer is whether Syrian and Iranian designs in Lebanon are going to spill out into the Syrian/Israeli frontier. My analysis is that, on the rational basis approach, the front will be quiet. The Syrians can at best hope for a draw and the unintended consequences could be very scary for the Assad regime, Hizbullah is not ready for a fight and is having trouble recruiting new soldiers, and the Israelis are also not ready on the homefront but are much better prepared militarily. That said, unless the Israelis are communicating to Syria that they are prepared to let the Assad regime fall, the Syrians are able to take a risk in starting a war with Israel that leads to anything short of that. That is possible but becoming less likely as all the talk this summer about Israeli preparedness has had to make him think twice. The Army would like the war to be sooner than later; everyone else wants it later but the army figures that on all fronts the longer it waits the worse it will be. As far as Palestine is concerned, the Israelis are making conciliatory moves toward Abbas but they really are afraid to place bets on him. Fayyad, the new prime minister, has little standing in the street and Abbas is virtually a lame duck. The more the Israelis embrace Fatah, the worse it will be for Fatah. In general, it is for Fatah to clean up its act and if it does then Hamas will be eclipsed. If not, it will be the reverse. The best thing the Israelis can do is give Fatah a chance to perform internally and show that it is the best way forward for the Palestinians. Fatah seems to have trouble controlling itself from its own corruption and it is a real iffy question as to whether it could possibly reform itself. A third-way party is positioning itself within the Palestinian territories but grass-roots movements without outside support tend not to get anywhere in this territory.
The Stock Market….Economists are questioning their earlier assumption that the problem in the subprime mortgage market would not carry over into the broader market. Problem is that many high-quality companies have invested in these risky securities forcing a downgrade of their securities due to their losses. The end of the takeover boom appears near and this is deflating stocks that were pumped up in anticipation of merger and acquisition activity. The lower US dollar is forcing oil producers to raise the price of oil because they have to buy stuff in Europe with Euros using dollars that are worth less (and oil is bought and sold with dollars) and if these countries shift to Euros it will further weaken the dollar. The higher price of oil hurts economies. I expect US economic growth in the second half of 2007 to be weaker and for the Fed to lower interest rates by at least 1/4 point in the next quarter. There is always the curve ball such as a terror attack to move the markets; many feel that the US is overdue for some of attack on its territory but the feeling is that the attack would not be as scary as 9/11 and would result more in anger and disappointment than fear due to the assessment that Al Qaida is not as strategic a threat as it was although it is certainly a tactical nuisance.
Pakistan — Musharraf looks set to bring back Bhutto and to coalesce in a government that keeps in around as president a while longer but which opens things up a bit….Zimbabwe’s Mugabe is still around because the people around him who can throw him out have too much to lose personally but doing so; therefore they keep him…..Japan’s Abe is on the way out but that’s pretty obvious….Also pretty obvious is that Libya was paid almost half a billion dollars and got an arms deal from the French to let the imprisoned medics and nurses go free but there is mutual interest in letting Libya off the hook; Europe wants to wean itself off Russian gas supplies and Libya offers the best chance to do it.
Iran...After having read the Economist survey this month and looking at the various options, I agree that the military option is a very risky one with too many long-range unintended consequences. However, the prospect of a nuclear Iran with this government is intolerable, mainly because it will force an arms race among all its neighbors who cannot live in a neighborhood dominated by a power such as this which geographically is destined to be a neighborhood player. The best path to pursue is heavy economic sanctions supported by all the major players including Russia, China and Europe including a lower price on oil supported by Saudi Arabia which will force the Iranians to conclude that it has no future in the nuclear business, much like Libya and North Korea. The only thing that will move the Iranians is money; therefore, we should stop thinking about the military and deal with the financial carrot and stick. I suspect that the US will disappoint the Kurds and back Turkey’s military moves to cut the Kurds down to size and this will cement Turkey’s role as a lever against Iran with US support. Everyone has to agree that short term economic sacrifices must be made viz Iran because the instability that will result from a nuclear Iran will cost 1,000 times what one can imagine spending right now. The US Treasury has been campaigning strongly to isolate Iran in the international banking system; it worked wonders with North Korea. Deutsche Bank and Commerzbank just announced they are pulling out of Iran in 2 months.
Future of Flying — The more I sit on runways and put up with lousy service on the plane as well as dysfunctional airports and reservation systems, the more I see the future being on fractional ownerships of private jets and all-business class airlines to secondary airports. People on the London-New York run like flying out of Stansted because you can get from the car to the plane in 30 minutes. I don’t know why people are crunched on 20 hour flights from New York to Sydney without any option between economy and business class at over $10,000 a ticket — premium economy hasn’t hit this market yet but Virgin Blue is to start competing in a year and it will put more rationality into the price on this duopoly run (United & Qantas). I suggested a family weekend to be held in Charleston, South Carolina and nobody wanted to go because everyone would have to connect via Atlanta and it was enough of a deterrent that even the offer of free tickets and hotel rooms couldn’t sway the jury at all. So, to me, fractional jets and air taxis are the wave of the future, especially as the economics are increasingly making sense.
