Friday, July 23, 2010

Is Hyper-Deflation next?

Since the cost of living has increased year after year for over five decades, people have come to expect inflation and anticipate it by being biased towards buying now while it is still “cheap”. Deflation on the other hand, has been rare and usually limited to some small geographic areas for short periods of time. The adults who experienced deflation and hyper-deflation in the great depression are no longer around. Most of us can’t imagine what it will be like for things to suddenly get vastly cheaper as the availability of money dries up.

Some of the factors that will contribute to an economy of hyper-deflation are:

  • Americans are earning less and continuing to lose their jobs. Government stopgap funding to keep police, fire departments, and teachers employed will ultimately come to an end which will cause more layoffs. States and local governments will be forced to do massive layoffs to balance their budgets. States must pay a portion of the unemployment benefits being funded by the federal government which is expensive for them to maintain and adding their financial shortages.
  • The government stimulus programs that paid Americans to buy houses, cars and appliances have ended. These programs emptied the market of buyers for the next 36 months and created artificially high prices. Now prices are dropping back to a non subsidized market level leaving many of the buyers in debt for overpriced houses and cars.
  • New higher taxes are about to be added to cash-short Americans. These taxes will further reduce American’s income and further depress consumer spending. The current six tax-rate brackets of 10%, 15%, 25%, 28%, 33% and 35% will be replaced by five new brackets with the higher rates of 15%, 28%, 31%, 36% and 39.6%. The maximum tax rate on long-term capital gains will go to 20% from 15%. Maximum rates on dividends will skyrocket to 39.6%. The marriage penalty tax will return and the death tax will jump to 55%.
  • Most State and local governments will have a harder time borrowing due their high debt and lower tax bases. The higher federal taxes will further decrease tax income to the States as they are deductible in most States. Less tax income will force many State governments to cut spending even more.

An extended period of deflation in the US may be similar to the deflationary cycle that Japan has been stuck in for the past 20 years. Japan has endured an almost continuous drop in real estate prices over the last 20 years. When Americans experience real estate and cars getting cheaper each month, they will delay their spending and wait for prices to become even cheaper, further reducing consumer spending. If hyper deflation gets started it may be as hard to stop as the seemingly permanent inflation cycle that the US economy has been in for the last 50 years.

Tuesday, July 20, 2010

Hawaii Foreclosures

We went to a foreclosure auction in Kailua-Kona this morning.  The sales are held at the flag pole at Hale Halawai in front of the mini Police department on Ali’i Drive. When banks foreclose on properties they sell them at foreclosure auctions, like the one at the Kona flag pole, around the State.

When a mortgage is in default, the bank will start the foreclosure action by notifying the owner and ultimately evicting the tenets and listing the property with a Foreclosure Commissioner, usually a local lawyer. A “Notice of Foreclosure Sale” or “Notice of Mortgagee’s Intention to Foreclose under Power of Sale” is advertised in the local newspapers with the terms and conditions of the sale. The property can be seen on advertised dates before the foreclosure sale date. In order to qualify to bid, a prospective buyer must bring 10% of the sale price in cash or cashier’s check as proof of payment. Even the bid is won, the court must confirm the sale by collecting the remainder of the money on an appointed date in the future. Anyone, including the bank, can bid more than the price agreed upon at the auction and overturn the sale or force the prospective buyer to bid more.  If the sale closes, the court provides a Commissioner’s Deed.  There is no warranty deed or title insurance, so if the title of the property has any liens against it, the buyer must get  it resolved and pay off other debts against the property to gain clear title to the property.

At the foreclosure sale today, three Foreclosure Commissioners presented their properties in Kona, Kamuela, and Waikoloa.  Many of the foreclosure sales were delayed to another date, which does not require a new ad in the newspaper.  Several of the sales had bids already submitted from the banks, which were accepted when no one in attendance came up with a higher bid.  The banks commonly  buy the properties they foreclosed at the auctions and then list them with an agent as an REO (real estate owned).

One sale did go through today for a property in Kailua-Kona.  The property that sold was a single family house with 3 bedrooms and 1.5 baths. On the surface it looks like the buyer got a pretty good deal. estimated its value in 2006 at $585,000 and the buyers won the auction at $120,000 which is about 20% of its 2006 estimated value.

This is a video of a Foreclosure Commissioner reviewing properties. They were either bought back by the bank or the sale postponed.

In this video Robert Kim, the Foreclosure Commissioner,auctioned a property for $120,000.

Friday, July 16, 2010

The challenge of diabetes diagnosis in Hawaii

Rates of people diagnosed with diabetes are growing in Hawaii and the United States. Over 110,000 people have diabetes and it is the 7th leading cause of death in Hawaii.

Diabetes is a disease which affects a person’s ability to convert food to energy due to problems creating or utilizing insulin.  Insulin is a hormone created by the pancreas that helps with the uptake of glucose (sugar)  by the body’s cells.  The symptoms include excessive thirst or hunger, unexplained weight loss or gain, frequent urination, extreme fatigue, blurry vision, sores that won’t heal and tingling or numbness in the hands or feet. There are many types of diabetes.
  • ·        Type 1 diabetes is diagnosed when the person has no ability to make insulin due to a failure of insulin producing cells of the pancreas.  People with type 1 diabetes must take daily injections of insulin and it is diagnosed most frequently in children and young adults. Its onset is often sudden and so diagnosis is rapid after the start of symptoms.
  • ·        The most common form of diabetes is type 2 which occurs when a person doesn’t  produce enough insulin or can’t  use it properly. Symptoms from type 2 diabetes can come on gradually over years making it a challenge to diagnose and hard to manage. 
  • ·        Other types of diabetes are gestational diabetes which occurs only during pregnancy and pre-diabetes which is a term used for people who have blood sugar levels which are higher than normal but not yet high enough to diagnose as diabetes.

Health risks of diabetes
The problem with diabetes are the complications that can result from the disease, particularly if insulin levels are not managed. Diabetics have a significantly increased risk of cardiovascular disease, kidney disease, nerve disease, blindness, and pregnancy complications.  Adults with diabetes are two to four times more likely to die of heart disease and stroke than adults without diabetes.  Diabetes is the leading cause of new cases of blindness among adults aged 20 - 74.  Diabetes is also the leading cause of end-stage renal disease,  which means the kidneys stopped working well enough for a person to live without dialysis or a transplant. Between 60% and 70% of people with diabetes have mild to severe forms of nervous system damage, contributing to leg, foot and toe amputation risk. People with diabetes are more likely to die of complications from flu or pneumonia and more likely to have  oral health issues and high blood pressure which increases the risk of stroke and heart attack. Uncontrolled diabetes can cause acute life-threatening events, such as diabetic ketoacidosis and coma.

Risk factors of diabetes
Risk for diabetes is determined by certain factors, including ethnic, genetic, physiological, and behavioral. Certain ethnic groups have higher rates of diabetes, including Native Hawaiians, Japanese, Koreans, Filipinos, and Chinese. Age also plays a major role in diabetes prevalence. The CDC estimates that nearly 1 in 5 adults over the age of 65 years has diabetes. Furthermore, nearly 80% of diabetes is diagnosed in overweight and obese individuals, suggesting a strong link between being overweight and the development of diabetes.

Life style component of diabetes
The growing prevalence of diabetes cannot be separated from the rising prevalence of obesity and physical inactivity. According to 2003 Hawaii Behavioral Risk Factor Surveillance Survey (BRFSS) data, adults with diabetes were overweight and obese more than adults without diabetes.  The fat stored around the abdomen, called the omentum, uses large amounts of insulin forcing the pancreas to over-produce insulin so the cells can still absorb glucose from the blood for energy. An oversized omentum is linked to insulin-resistance and type-2 diabetes because it uses so much insulin from the blood stream.  Losing fat around the waist and increasing activity and exercise are ways to minimize the danger of insulin-resistance and onset of type 2 diabetes.

Special problems with ethnic diagnosis of diabetes
Diabetes mellitus is diagnosed based by high levels of glucose (blood sugar) in the blood after fasting for 8 hours.  A level of 126 milligrams per deciliter (mg/dL)  or above, confirmed by repeating the test on another day, means a person has diabetes. The problem is that this method of diagnosing diabetes may only apply to a subset of people with insulin problems. A study on Japanese type 2 diabetics showed that they are typically not obese and their weights are similar to the general Japanese population.  This is contrary to the widely held view that type 2 diabetes is primarily the result of insulin-resistance and obesity.  A rise in obesity preceded the huge increase in type 2 diabetes among the Pacific Islanders, but in Japan there has not been an increase in obesity since the 1970’s and yet the population of diabetics has soared.  In the case of Asian populations, diabetes may be a result of a slowdown in insulin production rather than insulin resistance and diet and exercise may be of little benefit.  Worse, the diagnosis methods, which are based on obese patients, are showing to be inadequate for Asians populations.

Strange relationship between Alzheimers and insulin
One wonders if the slowdown in insulin production is a type of disease that has gone undiagnosed in the past.  Recently, researchers published results showing insulin drugs appeared to slowdown cognitive decline in Alzheimer patients.  Studies have previously shown that Alzheimer patients have reduced levels of insulin in their brain, so a team at the VA Puget Sound Care Center gave Alzheimer patients insulin for 4 months and the results showed they improved in memory tests.  

Stomach operations to treat diabetes
In 2002, a group of doctors in Australia reported that performing stomach LAP-BAND surgeries on their patients with type 2 diabetes put their disease in remission based on their patients’ improved blood glucose levels.  Now gastric bypass, an operation that reduces the size of the stomach and bypasses part of the intestine in order to limit the amount of calories that can be absorbed, is being touted as a cure to type 2 diabetes. It has shown results with 80% of obese diabetics, but surgeons are now doing it on normal weight diabetics.  However, diabetics often go into temporary remission when they sharply reduce their food intake which frequently occurs after surgery on the digestive system. No long term studies have been done yet, so it is unknown if lower levels of glucose may be just an artifact of the reduced number of calories being absorbed and the patient’s diabetes may be substituted for another insulin deprivation disease, like Alzheimer’s.

We wrote this blog to educate ourselves about diabetes because so many of our friends in Hawaii are daily challenged by the disease.  Considering the devastation to a body’s cells when short of insulin, we wonder if using blood sugar levels as the primary method of diagnosing diabetes makes sense. Ethnic differences may mask the disease exposing some in Hawaii to delayed diagnosis and greater health risks.   It may be more important to be attentive to the symptoms rather than rely on a blood sugar test.  And there may be other symptoms like memory loss, that have yet to be identified as the result of the body’s long term insulin shortage. 

Wednesday, July 14, 2010

Apple’s iPAD: A review of what I like and don’t like

I bought an iPAD about five weeks ago because I was impressed with the little iPOD’s usability and I wanted to type and draw on a bigger screen.

There are a lot of things I really like about the iPAD:  
  1. I love the Sketchpad application that I purchased from the iTunes store.  It has opened up a whole new way for me to do electronic art.
  2. I like Apple’s email interface (as I did on the iPOD) because  it is really easy for me to quickly read multiple email accounts.  I can pick it up throughout the day and read all my email without having to wait for a long PC boot up. 
  3. The iPADs keypad ( a separate piece of hardware that the iPAD plugs into) is the best keypad I have ever used. It has a great feel and the right amount of springiness in the keys.
  4. Apple’s Notes application is a good way to create and share documents and it has the best spelling checker I have ever used with a larger vocabulary and a great touch interface.
  5. The applications on iTunes are easy to download, low cost or free, and I find them useful. Why does a PC application costs 10 to 100 times more than an iPAD application?  As more applications become available, I  believe they will continue to increase the value of my iPAD.
  6. The iPAD’s battery life is long, and at 10 hours it seems to last forever.
  7. The iPAD’s screen light adaptation is wonderful.  It gets brighter in high light and dimmer in low light so it is always very readable without being overly bright.
  8. The touch screen on the iPAD (as well as the iPOD) allows me to make the text instantly large or small, which makes reading books and web pages much easier on my eyes.   I like the Kindle application and have been using the iPAD to read books.
  9. The quality of the iPAD’s screen graphics seems clearer and brighter to me and since I can hold it close to my face I can really see the details in photographs and charts.

There are some things that really bother me about the iPAD and they keep me from being able to replace my laptop with it. My issues are primarily with Apple’s Safari internet surfing application.
  1. For some reason Apple chooses not to support Flash (due to some spat between Apple and Adobe). So when I am surfing the internet with Safari, I am unable to see a large portion of the internet sites that I frequent.  It may not seem like a big deal but I estimate 90% of the sites I regularly visit are flash based and therefore not viewable with the iPAD which forces me to use my laptop to surf the internet.   Safari also limits my viewing of other things on web sites, such as Facebook videos, and in some cases blocks me entirely from some websites.
  2. If I select a link in my email, Safari intercedes to display the website. To get back to the original email, I have to click out of the Safari application and reopen my email. This process takes longer than it should and it seems like a strange interface to me.
  3. When surfing the web, sometimes selecting a link opens a new page in Safari and sometimes it replaces the existing page.  If it replaces the existing page, I can  return to the previous page with a single click. But, if it opens a new page, in order to return to the previous page, I have to find the page among the other pages that are currently open in Safari which is tedious and weird.
  4. The iPAD is difficult to hold. Though it doesn’t weigh much, it gets heavy when I am using it to read a book and eventually puts my hand to sleep. Hopefully, someone will invent an iPAD holder to solve this problem.

The price of the iPAD was $600.00 and so far its usefulness has been worth the money to me.  I hope in the future that Apple chooses to work with the other vendors providing web content, like Adobe, Google, and Facebook, and supports full access to the internet so I can replace my laptop with my iPAD.

Tuesday, July 6, 2010

Living with Hawaii’s volcanic emissions (VOG)

While living in Hilo we had some intense days of volcanic emissions (VOG) , usually when the trade winds were not blowing.  But in Kona, we have varying levels of VOG almost every day. The VOG, which consists of sulfuric compounds (like sulfuric dioxide), ash and particles, has been shown to cause health effects in children, whose lungs are still growing, and individuals with conditions like asthma or chronic obstructive pulmonary disease (COPD).  Many of the people with respiratory conditions have moved away from the heaviest VOG areas on the southern part of the island or to the mainland.

A study released in 2009 showed an increase in emergency room visits in Kona and Ka’u during days when increased SO2 and particulate matter were measured in the air. Studies of similar pollutants have shown that the types of aerosols being emitted by the volcano can degrade lung function and compromise the immune system. We were surprised to learn that mercury is also produced by Kilauea and has been detected as far away as Oahu.  Though some people have no reaction, heavy VOG days can bring on a range of physical symptoms for others including breathing problems, a prickly sensation, watery eyes, a feeling of pressure on the chest, bronchitis, headaches, low energy, and asthma attack.

On heavy VOG days in Hilo we saw our solar panel output cut by up to 50%.  In Kona, heavy VOG days can drop the temperature of the swimming pool up to 4 degrees and it seems to be keeping Kona much cooler overall.  VOG doesn't distribute itself evenly across Kona. We are fortunate that our location near the water tends to get less VOG build up than the higher altitudes above us.  On extremely heavy VOG days we know we should stay indoors and turn on the AC or use an air purifier.   We monitor the air quality and output of the volcano by looking at the island-wide SO2 monitor and the live web cam of the volcano.  

Kilauea shows no sign of letting up on its continuous eruption and elevated volcanic emissions.  We have come to accept the VOG as a part of living on the island of Hawaii and hope that more studies will focus on how to be healthy living near a volcano.

Friday, July 2, 2010

Big Island Grass-Fed Beef

Though cattle are raised throughout the State of Hawaii, the Big Island produces the majority of Hawaii’s beef. And fortunately for us, more Hawaii ranchers are raising free roaming cattle fed only grass and legumes without the use of antibiotics and hormones.  Though the drought on the Big Island has made it tough on many of the cattle ranchers, feeding cattle grass is substantially cheaper than importing grain from the mainland and the resulting grass-fed beef contains less fat, cholesterol, and calories than fatty grain-fed beef.

According to the USDA, Hawaii produced 41,540,000 pounds of beef in 2009 and beef cattle currently makes up 54 percent of the State’s total herd at 81,200 head. Hawaii's cattle industry produces calves that are exported to the mainland for finishing in feed-lots as well as cows raised entirely in Hawaii for commercial slaughter. However, USDA data for April 2010 showed that a fourth of Hawaii’s cattle were locally slaughtered, up seven percent from the same period in 2009.

The following ranches on the Big Island are producing cattle for grass-fed beef consumption:

  • Daleico Ranch-Ka'u
  • Ernest DeLuz Ranch-Hamakua
  • Ernest Pung Ranch-Hamakua
  • Kahua Ranch-Kohala
  • Kealia Ranch-South Kona
  • Kukaiau Ranch-Hamakua
  • Kukuipahu Ranch, North Kohala
  • Palani Ranch-North Kona
  • Parker Ranch-Waimea
  • RJ Ranch-Hamakua
  • Triple D Ranch-Hamakua

Hawaiian grass-fed beef is healthy and lean with half the total fat of grain-fed beef. Big Island grass-fed beef has half the calories of mainland grain-fed beef, making a Hawaiian 6 ounce steak 100 calories less than other 6 ounce beef steaks. Additionally, grass-fed beef contains up to six times more omega-3 fatty acid and substantially more Vitamin E, beta-carotene, and vitamin C. We have had good weight loss results by eating grass-fed beef, which has approximately the same fat content as skinless chicken.

The Big Island has two meat processing operations, Hawaii Beef Producers and Kulana Foods.  They provide Hawaii’s grass-fed beef to local grocery stores under several brands including KTA’s Mountain Apple, Hawaii Island Grass-Fed Beef, and Island Fresh. The Mattos family owns Paauilo based Hawaii Beef Producers and JJ's Country Market in Honokaa. They receive and process up to 350 head of cattle each month, the majority purchased from ranchers raising grass-fed cattle on the Big Island that are antibiotic and hormone free. Beef cuts can be ordered and picked up at JJ’s Country Market. The Yagi family owns Kulana Foods in Hilo.  Kulana Foods purchases cattle, pigs and sheep for processing and distribution to local supermarkets and restaurants. Kahua Ranch, Palani Ranch and Parker Ranch bring their cattle to Kulana Foods for processing and packaging for stores and restaurants around the island.

Hawaiian grass-fed beef is delicious and healthier than grain-fed beef. Hawaii’s cattle ranchers and meat processing businesses are providing Big Island residents an affordable source of healthy food.