HIGH COST-OF-LIVING IN THE BAY AREA HURTS WAGES

The Bay Area is known for its bustling life & top dollar tech sector jobs. However the high cost-of-living is putting pressure on wages. According to the Council for Community and Economic Research, the total cost of living in San Francisco is 62.6% higher than the national average.

* According to a recent study by job search site Indeed.com, an app developer in San Francisco could be earning an average annual salary of $108,000. However with a median house rent of $3,357 in San Francisco, the developer would be spending a whopping 37% of his income on housing.

* Compare these same figures with a city like Austin & the result is that even with a lesser salary, only 23% of the income would need to be set aside for housing.

As of May 2016, Software Developers in San Jose-Santa Clara-Sunnyvale earned an average hourly wage of $63.95 vs a national average of $50.14*. (Source: U.S. BLS, Occupational Employment Stattistics, May 2016.)

In March 2017, the unemployment rate in San Jose-Santa Clara-Sunnyvale was 3.5%. It spiked to 3.9% in August.

Despite high wages average annual spending for Bay Area residents continues to rise. Let’s take a look at spending across some key parameters.

Housing costs continue to be a dominant force by making up for 33.8% of the Western region’s annual expenditure in 2015*. (Source: U.S. BLS Consumer Expenditure Survey)

The cost of renting a primary residence in the San Francisco-Oakland-San Jose Area rose by 5.2% between August 2016 & June 2017. Housing costs in general rose by 5.6% in June 2017 from August last year. (Source: U.S. Bureau of Labor Statistics)

Electricity rates in California are among the highest in the U.S. According to the latest Consumer Price data from the U.S. Bureau of Labor Statistics, Electricity costs for the San Francisco, San Jose-Oakland belt increased by 5.2% in August compared to the same period last year.

* As per data available from the U.S. Energy Information Administration, average electricity price for end use consumers in California came in at 18.85 (Cents per Kilowatt-hour) in June.

* In comparison, consumers in Texas only paid 11.04 (Cents per Kilowatt-hour) in June.

A February 2017 LA Times investigative report states that Californians are paying a higher premium for their electricity from the past few years with close to a staggering 50% difference between the state & rest of the country. The charges are expected to rise further as power utilities look to recover costs for building new plants & maintenance costs according to the report.

Gas prices in California are the highest in America. According to gasbuddy.com it costs $3.079 per gallon of gas in California. California charges a 2.25% sales tax on gasoline; one of the six states to levy such a fee. The state also levies two slabs of excise tax on gasoline. Excise tax is adjusted based on gas consumption projections & prices.

There is more pain in the pipeline for commuters in California. Come November, gas taxes will rise by 12 cents per gallon & a 19.5 cents per gallon hike by 2020. The hikes are part of a plan to raise funds for fixing the dismal condition of the state’s highways.

According to the American Community Survey 2011-2015, an estimated 76% of Santa Clara County, California workers drove to work alone. The average commute time to work was 26 minutes according to the survey.

Food costs in the Bay Area are also a major pressure point for cost-of-living. According to a report by The Council for Community and Economic Research, the overall food costs in San Francisco is 23% higher than the national average. According to research website numbeo.com a pound of cheese costs a whopping 71% higher in the Bay Area compared to the national average. A gallon of milk in San Francisco costs $4.85 vs the national average of $3.82.

The high cost-of-living is driving people in the Bay Area to look for better & cheaper opportunities elsewhere in places like Texas, Oregon & Washington. According to the LinkedIn Workforce Report for the month of June, the number of workers arriving in the Bay Area decreased by 17% from February.

According to realty major Redfin’s latest migration report, The Bay Area ranked highest for net outflow for the second quarter in a row, which means the number of people in the Bay Area searching for homes in another metro was greater than the number of people in other metros searching for homes in the Bay Area.

Jobs continue to be added at a steady pace in the Bay Area. However finding an affordable living option & managing day-to-day expenses continues to be a challenge.

 

DAIRY SECTOR IN CALIFORNIA FEELS THE HEAT

The triple digit heat wave across California over the past couple of months is hurting the state’s Dairy Industry. According to a recent report by The American Farm Bureau Federation, milk production in the state could take a hit due to animal stress & extreme heat conditions. Production of dairy products such as cheese & butter is also expected to witness a decline.

To understand why is it a cause of concern if California’s dairy markets underperform, here are some key statistics.

* California is America’s top producer of milk, butter & ice cream.

* California is America’s second largest cheese producer.

* California makes up for 20% of the country’s total milk production.

* California produces 30% of the nation’s butter output on an annual basis.

* 33% of the country’s dairy exports come from California.

* Milk production generated cash receipts of $6.2 bn in 2016 for California.

(Data Source: American Farm Bureau Federation)

Milk production typically witnesses a decline in summer months. However the record heat this year has forced dairy farms to work overtime to keep cows cool. Despite providing for fans & ample shade for the cattle, farmers in the Central Valley are worried about decline in productivity & lost labor wages. Cows are more susceptible to heat in comparison to humans according to various studies.

The stress points are already visible.

* According to USDA data In June, California produced 207,170 pounds of cheese in June compared to 219,602 pounds in May; a decline of almost 6%(excluding cottage cheese)

* Butter production in the state witnessed a sharp decline of almost 12% in June compared to May.

* Ice cream production too declined by almost 13% in June compared to the same period last year.

A University of Davis, California study reveals that average temperatures of 100 degree Fahrenheit causes high humidity levels for livestock. High humidity can cause decreased milk production, infections to livestock & poor reproduction. The study further states that in extreme heat, animals eat less which in turn causes feed spoilage. Feed spoilage can result in diarrhea & intestinal upsets. Heat stress can also cause breathing & hormonal problems in livestock along with increased water intake.

Experts suggest that during extreme heat cattle should be provided with high quality fodder which are easier to digest & generate less heat during fermentation.

Extreme heat also causes changes in milk composition with a decrease in milk fat & protein. Butter contains at least 80% milk fat & the remainder is water, protein & salt according to the American Farm Bureau. Yield per pound of milk is directly linked to the milk fat content.

According to a paper published by Mary Beth De Ondarza, heat-stressed cows can become deficient in potassium. Decline in potassium levels can cause blood acidity in cows. Ondarza is an author & runs her own dairy consulting business.

Thousands of cattle have already died across the state with a staggering number of carcasses piling up at rendering plants. Rendering plants pick up dead livestock daily to convert their tissues into useful materials. If carcasses are not disposed properly it can cause various environmental hazards. Fresno County, one of the state’s top milk producer reported 4,000-6,000 livestock deaths on June alone, according to reports by various Bay Area news outlets.

Farmers in the state are investing in state-of-the-art cooling systems & more fans to keep their herd cool. According to Ondarza, maintenance costs for lactation dairy cows can rise by 30% during a severe heat wave. Reports suggest that during extremely hot days farmers are losing upto a gallon of milk output per day.

According to a report in King 5 News, farmers are spraying peppermint oil on their livestock to keep away flies. Flies get aggressive in the heat wave. The report further states that farmers are trying to avoid feedings in peak heat & providing for sawdust in livestock sleeping areas.

For California’s dairy sector it is a double whammy following a prolonged spell of drought. Water shortage in the Central Valley had forced farmers to import hay & other animal feeds from other states.

While consumers might not face a price hike in the near future for the farmers it’s a battle against Mother Nature’s fury. California’s economy will certainly feel the pinch with a loss of a few billion dollars.

 

 

HOUSING CRISIS IN THE BAY AREA

Apple, Google, Facebook & Oracle. If you are wondering what’s the common link between these tech firms, the simple answer is The Bay Area! Over the past few years with tech firms setting up shop in the Silicon Valley, California home prices have skyrocketed to new levels.

The Bay Area is officially the most expensive real estate market in America, outpacing New York. According to a recent report by Zumper (an online realty marketplace firm) the median rent for one-bedroom units stood at $3,420, while two-bedroom units stood at $4,500 as of August.

New York came in at second position. According to the report, rent for one-bedroom units stood at $2,940, while the median rent for two-bedroom units stood at $3,300.

According to a recent report by California Association of Realtors, median sales price in the Bay Area rose 7.9% year-over-year to $908,740 in June; edging closer to the million dollar mark.

However the Association has expressed deep concerns over inventory shortage in the Bay Area. According to the report, active listings in California came in at 13.5% lower than last June. Sellers are reluctant to sell their existing homes for the fear of finding a better house.

According to the California State Labor Department report, the Bay Area added 11,100 jobs overall during June with further growth expected in the coming months. In June, The San Jose City Council approved to exclusively negotiate with Google to sell 16 city-owned land parcels. The proposed Google village in Diridon, Downtown San Jose will add up to 20,000 new jobs. According to experts, the village also has the potential for development of approximately 3000 housing units.

Facebook has proposed a massive expansion of its Menlo Park campus. The tech giant intends to develop 1.75 mn sq ft of offices, 1,500 units of housing & 125,000 sq ft of retail space including a pharmacy & visitor center. According to the firm the mixed-use village will provide much needed office space & housing solutions.

Addition of new jobs creates pressure on the housing market. There are limited land parcels in the San Francisco peninsula thanks to coastal & environmental roadblocks. Hence land is an expensive commodity. With high-paying tech jobs coming to the Bay Area, property prices are climbing steadily since there are high income families ready to pay the top dollar.

There is also a mismatch between population & housing growth. According to the State’s Department of Finance, California has seen a 6% population growth since 2010. However during the same period the state only added 400,000 housing units; a mere 2.9% rise. The administration’s reluctance to approve new housing projects is hurting the market.

California & The Bay Area in particular has always been an attractive market thanks to its great weather, scenic beauty & of course booming economy. However with median price of a home in the Bay Area ranging at $500,000, first-time home buyers are finding it difficult to even finance their down payment.

According a research by Zillow, the median 20% down payment on a house in San Jose metro is $192,320. This figure is very similar to the nationwide median value of an entire house; $192,500. Zillow is an online database focusing on real estate markets. According to the report, to finance the down payment for a house in San Jose, a potential buyer needs to put in two years’ worth of earnings.

Mortgage rates are at a historic low but realtors are observing that majority of the new listings are in the higher-priced homes category.

California also has one of the highest income inequality ratio in America. According to a report released last year by San Francisco-based think tank The Public Policy Institute, income inequality in the Bay Area has gone up by 10% since 2007.

According to the 2017 City of San Francisco Homeless Point-In-Time Count & Survey, 69% of the people surveyed lived in San Francisco housing before becoming homeless. 55% of the respondents were homeless for a decade or more. Rising rents & shortage of houses are two factors contributing to the rise in homeless population.

San Francisco City has set aside an annual budget of $10 bn to combat the problem. Despite a high monetary allocation the city managed to reduce its homeless population by a mere 0.5% between 2005 & 2007.

Increasing demand for houses is putting pressure on the transportation system. A recent Silicon Valley Competitiveness and Innovation Project found that an average Silicon Valley worker spends an hour and 10 minutes commuting each day.

Input costs for housing too has gone up. Permit & development fees have consistently risen over the past few years. Building material & labor costs too have risen substantially. For example a brick worker or brick mason earns a median hourly wage of $42.95 in the Bay Area vs $23.65 in Fresno county according to data from California Labor Department. An Electrician in Bay Area earns a median hourly wage of $51.97 compared to a measly hourly wage of $23.96 in Ventura County.

According to California Housing Consortium, on an average it costs $300,000-400,000 to build an affordable apartment in California.

In order to address the housing crisis, California Senate has passed a couple of bills. The bills would force cities that have fallen behind on their housing production goals to reduce some of the essential regulations needed to approve developments. Additionally the bills would authorize a $3 bn bond to spend on low-income housing on the 2018 statewide ballot. The Assembly has to pass both the bills.

Experts have cautioned that in the long term job growth in the Bay Area can only sustain with sufficient housing supply at affordable rates.

 

UNDERSTANDING THE AMERICAN HEALTHCARE SYSTEM

The American healthcare system is quite different from the Indian one. I find it a tad complicated. Over the course of time I realized medical insurance is really important in America.

In India I could walk into my general physician’s clinic for a common cold or cough ailment without an appointment. However in America there is a certain protocol one needs to follow. You need to call up your medical providers’ helpline & explain to the duty nurse your ailment. The duty nurse will take a call on whether you need to come in & visit the doctor. In certain cases he/she might want you to try some over-the-counter medicines & wait for a few days to see how you faring.

Out-of-pocket healthcare costs in America are exorbitant. Hence medical insurance is a necessity in America. Your simple cold & cough ailment visits are also covered under insurance. The good thing about insurance is that preventive care like your vaccinations are free of cost.

In America broadly there are four different types of medical insurance plan which can be overwhelming to digest for a newcomer like me. Broadly the plans are as listed below

* Health maintenance organizations (HMOs)
* Preferred provider organizations (PPOs)
* Exclusive provider organizations (EPOs)
* Point-of-service (POS) plans.
* High-deductible health plans (HDHPs), which may be linked to health savings accounts (HSAs)

Insurance terms like co-pay, deductible, provider networks among others sounded alien to me.

As per The Patient Protection and Affordable Care Act, popularly known as Obamacare, Americans who do not have health insurance will have to cough up income tax of $695 per adult or 2.5% of annual income (whichever is greater). Thanks to the Trump regime, the fate of Obamacare hangs in balance; but that’s a story for another time.

Coming back to health insurance, in India we pay out of our pocket for normal visits to the doctor. When it comes to major things like surgery we claim the expenses through insurance.

The inability to pay Medical bills has been cited as one of the common reasons for bankruptcy in America. Bankruptcy in turn directly impacts the credit history of the individual, which is very important for your future purchase, loans among others.

Despite healthcare being so expensive in America, the World Health Organization ranked the U.S., 37th in healthcare systems as of 2015. A 2016 Commonwealth Fund Report states that 43% of low-income Americans went without medical care because of costs. The fund is a non-partisan health-care think tank.

Obamacare was established with the aim of gradually reducing healthcare costs in the country by bringing more people under its ambit. However the uncertainty surrounding it is forcing insurance players to hike premiums & pull out of it.

A former American Healthcare industry insider says that the sector spent a staggering $509.5 mn just in lobbying.

America is also one of the most expensive places in the world to deliver a baby. According to Castlight, the average national cost for a routine vaginal delivery in 2016 was $8,775. The national average for c-sections was $11,525. The costs are based on a combination of employee sponsored health plan coverage & out-of-pocket costs. Castlight Health is a health-care benefits information company. For the uninsured the costs would be triple of the national average. Despite the high costs America also has the second highest maternal mortality rate among high-income countries.

Pregnancy ultrasounds can cost up to $2000 if you paying from your pocket. Most insurance plans provide coverage for one or two pregnancy ultrasounds. Similarly if you opt for genetic testing of your unborn baby not all insurance plans provide coverage for the same.

According to a Harvard economist, one of the primary reasons for healthcare being so expensive in America is the high administrative costs associated with it. Various studies have also pointed out that Americans shell out more money for prescription drugs than any other country in the world. Healthcare costs also continue to soar in the country as hospitals spend money on acquiring the latest electronic gadgets. Unlike other countries prices of prescription drugs are not regulated by the American government. Approval of new drugs takes up to three years time.

While Obamacare’s future is in jeopardy, the system cannot improve unless costs are brought under control & all stakeholders focus on the service rather than outcome.

 

 

LEARNING DRIVING IN AMERICA

As I had mentioned in my earlier post I had absolutely no knowledge of driving when I moved to America. It’s very important to know driving if you would like to be independent in America.

While one does have the choice of public transport, the nearest train or bus station is a good couple of miles away from most residences. In the beginning when we lived in the apartment I could walk down to the grocery store, mall & even my dentist. I could also walk down to the nearest picnic spot.

Once we moved into our own house I knew it was time to learn driving. It took me almost a year after moving to America to get my drivers license. The nearest grocery store is located two miles away from our house; certainly not walkable. In case of an emergency it was essential I know driving because I couldn’t rely on my husband all the time.

I was really scared of driving. I didn’t even know the difference between first gear, second gear and so on.

In Mumbai where I lived, public transport was the best mode of travel for office commute. Even after I started earning, I never felt the need to invest in a car.

In order to get a drivers license here in California first you need to clear a written test. For the test they hand you a book of DMV rules & regulations. It was all Greek & Latin to me. I honestly found it very boring but literally mugged it. I cleared my written test after a couple of failed attempts. I found the questions very confusing despite solving multiple dummy tests online.

Once you clear the written test you get a learners license which is valid upto two-three months by which time I have to get my permanent one.

In America most households have two cars, one each for the husband & the wife. My husband owned a manual vehicle & initially he tried teaching me driving in his car. However it was very difficult for me. It was really confusing to put the gear as well as press the brake, accelerator at the same time. My husband was really patient with me but I just couldn’t understand when to put which gear.

We used to go to his office parking lot and practice. During one such session I got scared and goofed up. As a result I banged the car against a curb & we had to replace the tyres.

We decided that I should enroll for a driving class. We decided that if needed we could hire an automatic car for my drivers license test. The instructor was very patient with me but again I was at a loss. I just couldn’t understand & I kept berating myself for being so dumb. I even had a breakdown in front of the instructor which was very embarrassing. There were times when I wished I had learnt driving in India itself which would have made things easier here.

Most driving schools offer a three class session package of two hours each. By the end of three sessions your are supposed to be proficient in driving. However even at the end of three sessions I was still clueless. Also we didn’t have an automatic car in which I could practice after the class.

We decided to buy an automatic car. I was still scared of driving & thought I would end up crashing the car somewhere. Slowly and steadily my husband gave me the confidence that I can drive & it’s not rocket science. We used to practice almost daily in our community after he came back from work. My three month time was coming to an end. I had scheduled the drivers test couple of times but canceled it because I knew I wasn’t ready.

I went to the DMV & to my luck I got my
Learners license renewed for a year. Usually they do not grant an extension but I guess I just got lucky.

It took me a good six months to drive with a decent confidence in city streets in the automatic car. I was still scared of driving on the Freeway because of the high speed limit. I was warned I could fail the test for driving too slow.

There is also a fundamental difference between driving in India & America. In India we drive on the right whereas here in USA we drive to the left. It took me a while to get used to same. In the beginning while driving I used to automatically go more to my right.

There were ups and downs, disagreements with my husband, breakdowns but I knew it had to be done.

Time was running out. I had a part time job offer, but my potential employers wanted me to to come on site daily and work. (Within a year of my move to America, the Obama Government had enacted a legislation wherein certain category of H4 spouses would be eligible for a work permit.)

In a way they also encouraged me to get my drivers license quickly. I could travel to work by train, but I had to drive till the train station closest to home.

On the day of my behind-the-wheels test I was super nervous. Everything was going well until I made a critical mistake and I flunked the test. I was super upset because I had worked so hard for the same. My husband was very encouraging and told me not to give up.

On the day of my second attempt again I was really nervous. The driving test continued for a good fifteen minutes in which I did numerous left and right turns. The real challenge was to back up in a straight line without hitting the curb & thankfully I successfully managed to do it. If you hit the curb, it’s a critical error & you immediately fail the test.

After the test I received a lot of feedback to improve my driving from the instructor examiner. She wasn’t too friendly but she wasn’t bad either. Finally she uttered the golden words I was waiting to hear, “you passed.” My husband who was waiting for me to return was wondering what happened & why was my test taking so long. Generally driving tests wrap up sooner than twenty minutes.

Anyway I was glad I finally had my California drivers license; first step towards becoming self dependent.

Eventually I became more comfortable with driving as I started going to work daily on the freeway. In the beginning I was scared of driving on the freeway, changing lanes, navigating peak traffic & rash Bay Area drivers. Eventually I got used to it & today I can say that I am a decent driver.

For someone who didn’t know anything about driving it’s one of the life-changing experiences.

RAFAEL NADAL WINS HISTORIC 10th FRENCH OPEN TITLE

An Autograph from Nadal after winning his 8th French Open Title

Throwback to the time Rafael Nadal won his record 10th French Open tennis title at Roland Garros.

I think if one were to read my previous blog posts it’s no secret that I’m a big fan of Rafael Nadal. It was tough to see his poor form over the last two years mainly due to various injuries.

However 2017 began on a positive note for Nadal as he reached the Australian Open Final against his arch rival Roger Federer.

The Federer-Rafa rivalry is considered among the best in the history of tennis. Anyway Federer went on to win the title after a tough 5-set battle.

Move forward to the clay season and Nadal was at his best by sweeping titles in Madrid, Barcelona & Monte Carlo. He was tipped to be the favorite at Roland Garros. Many people questioned his busy clay court schedule & insisted he should take it easy. However Nadal didn’t want to take things for granted & decided to focus on getting enough match practice.

Observers had insisted that his aggressive style of play and taxing demands of the sport would put an early end to his career. However Nadal never lost hope & continued training under the tutelage of his coach & uncle Toni Nadal.

Federer withdrew from the clay court season to concentrate on the grass season and work on his fitness. In later interviews Federer confessed that Nadal was in great form and would have been difficult to beat on clay.

This years French Open witnessed one of Nadal’s most dominant performance in recent years. It was the third time he won a tournament without dropping a set.

In the final, Nadal crushed a strong opponent in the form of Stan Wawrinka, 6-2, 6-3, 6-1, in 2 hours 5 minutes. Wawrinka is a great player & a fighter. However even to my surprise the final was pretty one-sided with the Swiss getting frustrated at not being able to match up to Nadal’s stroke play. Wawrinka probably ran out of gas following a tough 5-set win over Andy Murray in the semis.

As an ardent fan of Nadal, I was taking it round-by-round. Every time he won a match & inched closer to ‘La Decima’ I was silently heaving a sigh of relief. I couldn’t watch the entire final but I was definitely a bundle of nerves & praying for Nadal’s victory.

The win also meant that Nadal’s three year title drought has come to an end. The Spaniard became the first player to win 10 Grand Slam singles titles at the same tournament in the Open Era. By winning his 10th French Open, Nadal broke a tie with Pete Sampras for second place for the most number of Grand Slam
Titles in the Open Era.

Last year was particularly painful for the Spaniard as he had to withdraw after two rounds in Paris thanks to an inflamed tendon in his wrist.

In his post match interview, the ever modest Nadal was quoted as saying, “Back in 2005, I thought in 2017 I’d be fishing on my boat in Majorca. Back then, of course, I couldn’t think even for a second that this would ever happen to me.”

The French Open organizers had pretty much anticipated Nadal’s victory judging by the showreel they presented at the prize ceremonies. The showreel depicted each of Nadal’s 10 victories in Paris, from his first victory as a 18-year-old to victories over familiar opponents like Federer & Djokovic.

Uncle Toni Nadal who has coached the Spaniard since he was a 3-year-old will no longer accompany him. Uncle Toni will delegate more of his time to grooming upcoming talent at the newly set up Rafael Nadal Academy in Mallorca. Nadal has added former Grand Slam Champion Carlos Moya in his coaching team.

So what does the future of 2017 hold for Nadal? Both Djokovic & Wawrinka have pulled out of tour for rest of the year due to injuries. So the battle for number 1 ranking & US Open title is going to be a straight battle between Nadal & Federer.

For now the ‘King of Clay’ sits firmly in his throne & by the looks of it, his clay court record will be unchallenged for a long time to come. It’s 2017, and the top two seeds in every tournament is Nadal & Federer. (Andy Murray is also sidelined due to injury concerns.) It feels like we back in 2008-09 when the duo were at the peak of their form. Hope these good times never end!

 

MY FIRST DAY IN AMERICA

In 2014 my life changed in unexpected ways. I got married & moved to the US of A; a country I had never set foot on before. I moved to America on a H4 visa. My husband is working in California on a H1-B visa.

So what exactly is a H4 visa? Family members of the H-1B worker are admitted to the United States in the H-4 category. Qualifying family members include only the spouse & unmarried children under 21 years old. As long as my husband finds an employer to sponsor his visa I can continue to stay here in USA on a dependent visa.

So I never imagined even in my wildest dreams that I would be moving to California; more precisely the Silicon Valley, the center of innovation. I must admit that California is a lovely place to be in. If it was some other place in the U.S., with the exception of certain places in the East Coast, I would have had my apprehensions.

I can never forget my first day in California. During the ride from the airport to our apartment I was a bundle of nerves. I was excited, nervous & homesick. After reaching home and settling down we decided to visit the grocery store next door to pick up a few stuff. At the store I fumbled with my husband’s debit card during billing and I burst into tears. I was just too nervous & suddenly everything around me seemed new and intimidating.

Before marriage I was a journalist by profession. When I moved to the Bay Area I quit my job & I knew I can’t work here in USA on a dependent visa.

I don’t remember how the rest of the day fared. My husband had to resume work the very next day. Luckily his office wasn’t too far from our house; a 15 min drive;certainly not a walking distance. The biggest thing in America is you need to learn driving or know it beforehand. In many cities most grocery & convenience stores are located a mile or two away from your home with limited public transportation options.

In India I wouldn’t worry if I suddenly ran out of milk or bread. All I had to do was run across the street and pick up essential items from the store.

The next day my husband was leaving for work & I was really nervous because I had to cook. Before marriage I never bothered to enter the kitchen or learn cooking. I was never really around at home much since my job involved a lot of late nights in office.

I didn’t even know how to cut vegetables. My husband was very sweet and guided me before going to work. He taught me how to cook the potatoes & how to use the rice cooker. Of course there was curd. So we managed with it for lunch. And that’s how I started cooking from scratch.

My mother-in-law handed me a hand written recipe book with basic South Indian recipes. She also ensured we have the basic mixes & powders essential to prepare South Indian food.

The apartment was situated in a gated community. However unlike India where you could just walk into your neighbor’s house, it was different here. I hardly knew anyone in the block and everyone kept to themselves unless of course they already knew each other.

Thankfully the grocery store & mall was located right across the apartment so I didn’t have to worry about driving! I didn’t know driving at the time of moving to America. In India (Mumbai, where I lived) I didn’t feel the need to ride a scooter or a car because public transport was very convenient.

And of course how can I forget the jet lag. The first few days were really hard thanks to the time difference. I used to feel sleepy through the day. It was very challenging to keep myself awake.

It was also a bit scary living alone in the apartment for the first few days. On hearing any strange sounds I would jump out of the couch in nervousness.

Thus began my new life in America far from the hustle and bustle of India.

MARIA SHARAPOVA CONFESSES TO FAILING A DRUG TEST

In some news from the world of sports…in Tennis…Russian player Maria Sharapova shocked the world last week by revealing that she had failed a drug test during the Australian Open earlier this year. This year’s Australian Open grabbed a lot of headlines after investigative reports claimed there was widespread match-fixing in the tournament with players willingly throwing in matches. This claim was quickly dismissed by the tournament organizers who insisted that the sport was clean.

In a press conference held in Los Angeles last week, Sharapova confessed to using a medication known as Meldonium which has recently been banned by the World Doping Agency. Meldonium is usually prescribed by doctors for patients dealing with magnesium deficiency. Sharapova also confessed to using the drug for more than a decade. The star player added that she didn’t bother to open an e-mail from the World Anti-Doping Agency (WADA) about the ban notification; an excuse perceived by many as frivolous.

Sharapova faces a lengthy suspension ranging up to 4 years along with a hefty fine. While some have called Sharapova’s confessions a brave move, others have labelled it as a smart public relations exercise. In fact many journalists who were invited for the hastily-called press meet thought the Russian player was using the platform to perhaps announce her retirement from the sport.

Sharapova is currently ranked number 7 in the world and hasn’t won a Grand Slam tournament in the past two years. Critics point out that despite WADA issuing multiple notifications about the proposed ban on meldonium, it’s baffling Sharapova was blissfully ignorant about the same.

Sharapova is a global brand in herself and is the face of many high profile endorsements like Porsche, Nike among others. Some of her sponsors like Nike have already distanced themselves from the star and have decided not to renew her contract.

Sharapova is likely to present her side of the case during a hearing in May before the International Tennis Federation. The Federation is likely to hand her a short suspension in order to maintain its credibility.

Sharapova is known to be one of the most-organized professional players on tour and a businesswoman with a successful candy line. She also doesn’t have many friends on the professional circuit and prefers being aloof most of the time. She is also considered as a role model for many young girls aspiring for a career in Tennis thanks to her rags-to-riches story. At the tender age of 6, Sharapova and her father moved to Florida with meagre savings of $700 and without knowing how to speak English, all in order to boost her Tennis career. Forbes has named her the highest paid female athlete in the world for 11 consecutive years. According to the magazine, Sharapova earned US$285 mn including prize money since she turned pro in 2001.

However it is hard to believe she missed the notifications on the proposed ban on meldonium for 5 successive times! Sharapova might not stop playing tennis altogether, but the drug test failure will definitely cast a shadow over her professional career.

 

 

 

 

CRUDE PRICES CONTINUE TO TUMBLE

At the beginning of the year crude was trading close to 100$/barrel, today it is close to 46$/barrel. Since June this year, global oil prices have witnessed a sharp decline with the main causes being weak demand for oil thanks to slow economic growth & a surge in U.S. Shale gas production. Experts believe the decline is here to stay with some of them predicting the next targets at 30-20$/barrel

Organisation of the Petroleum Exporting Countries (OPEC), the oil cartel has decided not to cut down on production in order to support prices. The UAE (United Arab Emirates), Saudi Arabia, Qatar among others are key members of the OPEC who control a majority of the world’s oil reserves & production. A majority of the OPEC members are oil-dependent economies who need oil to be trading at 100$/barrel levels to support their growth.

Tensions are surfacing among OPEC members with a few of them like Venezuela opposing the move to keep output levels unchanged. Venezuela which is among the world’s largest oil exporter is at the brink of a recession thus making it hard to cut down production.

Last month Russia, one of the world’s largest oil producers had to defend its currency by hiking interest rates overnight to 17% as a result of sliding crude prices. The struggling Russian economy is expected to contract further this year if oil prices do not recover.

Experts believe that Saudi Arabia which is one of the most influential OPEC member is resisting a move on output cuts in order to crush U.S. Shale gas output. Saudi Arabia has deep financial reserves & can resist a downfall in crude prices for a while. In the past during a similar downfall Saudi Arabia cut down production only to suffer huge losses in revenue & market share. Having learnt a lesson from their mistake the Saudis are not willing to burn their hands again.

According to Columbia University, U.S. oil production is at its highest level in 30 years. Discovery & drilling of Shale gas from rocks has become faster & inexpensive compared to the past thus boosting output levels. Echoing similar sentiments the U.S. Energy Department expects domestic crude production to rise this year though growth could witness a slowdown.

However experts believe in the long-term low prices will make Shale gas production unviable. Consequently investments will be scaled down & low-sized firms will be forced to wind up operations.

Another reason for the pressure on crude prices has been the strengthening U.S. Dollar. Since commodities like oil & gold are priced in U.S. Dollar it is expensive for consumers buying it with any other currency thus reducing its demand.

Meanwhile World Bank has cut its global growth outlook which is adding further pressure on crude prices. World Bank expects the world economy to grow by 3% this year compared to its earlier forecast of 3.4% for 2015.

DEFENDING THE ROUBLE: RUSSIA’S ECONOMIC WOES

Earlier this week the Russian Rouble hit a new low against the U.S. dollar sending the Russian economy into a tail spin & causing a panic in global financial markets. Falling oil prices & sanctions on Russia by western countries continue to weigh on the currency.

According to analysts since June this year, the Russian national currency has declined by 59% to the U.S. Dollar. A major currency crash can lead to inflation for any country & consequently imports become expensive.

Russia’s Central Bank has unsuccessfully tried to stabilize the currency by hiking interest rates twice to 10.5% & 17%. The emergency middle-of-the-night hike to 17% resulted in a big slide in the Rouble’s values. A higher interest rate means lending becomes expensive which in turn causes an economic slowdown.

In the wake of the currency crisis the Russian Government announced it would spend $7 bn to prop up the currency, which helped in calming the volatile fluctuations.

Russia is facing sanctions from Western powers for its support to Ukrainian rebels which is adding pressure on its oil-dependent economy. Oil & Gas makes up for 50% of the country’s revenues & 60% of exports. In the same week Brent Crude hit a five-year low of almost $60/barrel down from $105 levels at the beginning of the year. If oil continues to trade in the $60 range, Russia’s Gross Domestic Product (GDP) could contract by 4.5% next year. As per Russian Government’s own forecasts economic growth for next year is likely to be a meager -0.8%.

Oil prices continue to fall since demand in most advanced countries is tapering off thanks to weak economic growth & new efficiency norms for vehicles. OPEC, the world’s largest oil cartel has decided not to cut down production thus aiding crude’s free fall. Statistics from the International Energy Agency reveal that oil supply is expected to be much higher than actual demand.

Kremlin needs oil prices to continue an upward trend to maintain the country’s rising living standards. For the Russian middle-class imported goods & holidays abroad become unaffordable. According to analysts almost half of Russia’s population feed off the State Budget in the form of Government employees & pensioners among others. In the aftermath of the currency crisis many pensioners flocked to buy goods before prices increased in order to protect their savings.

Kremlin has banned food imports from the U.S., European Union (EU), Norway, Australia among others in response to the sanctions imposed on the country. Banned importers are being replaced by local suppliers who are located on the outskirts thus resulting in higher transportation costs. This is turn has caused a sharp spike in prices of vegetables & fruits. Russia’s declining agricultural sector needs time to cope up with the new crisis.

At his press conference Russian President Vladimir Putin accused the Western powers of creating a ‘virtual Berlin Wall’. There are whispers in Russia that the U.S. & Saudi Arabia have joined hands together to deliberately weaken oil prices to bring down Kremlin.

The biggest pinch of the currency fall is being felt by auto manufacturers with leading brands suspending deliveries to Russia. Manufacturers are finding it tough to adjust prices quickly enough to counter the wild currency swings. While for most European auto manufacturers Russia accounts for only 3% of global sales, any suspension will create a negligible financial dent in the balance sheets.

It remains to be seen how Russia will avoid slipping into a recession in 2015. Analysts believe the country could impose drastic capital controls in the near future which has been shot down officially by the Russian Government. Drastic spending cuts or tax hikes could have serious political implications for Putin.

Manufacturing & growth can only pick-up when corporates are assured of a stable & corruption-free environment. Unfortunately the country’s corruptions rankings have gone from bad to worse. Putin surely has his hands full.