Howzit Howard

Delousing the housing market

Realtors are telling me that they feel like unscrupulous people got into the real estate game during the recent boom times, selling home loans to people who couldn't afford them. Now, these more senior real estate agents assert, these other nasty people are moving on to greener pastures, where they will find some other way to enrich themselves at the expense of the financially semi-literate. I don't know about that, but I've noticed that some of the lending companies aggressively advertising for your refinance business are the same ones that got into trouble by getting too deeply into adjustable-rate home loans including subprimes. Now they want to make more money from the same people by replacing their soon-to-soar adjustable loans with new loans on different terms. The credit crisis isn't over, in case you were wondering. Fitch Ratings announced Tuesday it was placing Freddie Mac on credit watch following its $2 billion quarterly loss. Freddie Mac is a federally-sponsored company that charges fees for guaranteeing mortgages. Its guarantees are not, btw, backed by the federal government, though everybody seems to think so. Some people won't be able to renegotiate their adjustables before their rates reset in January, so expect more trouble then. Hawaii will continue to be mostly insulated from this because of the natural conservatism of its bankers and consumers, but the state will clearly be impacted if the West Coast economic slowdown starts to affect the affluent people who make up most of our repeat visitor traffic. But there was good news on this front Tuesday -- Nordstrom reported higher profits than Wall Street expected, and analysts read this as a sign that consumer spending by the affluent is continuing to be strong.

Mmm, mmm, good cooks

Alan Wong, Roy Yamaguchi and George Mavrothalassitis, three of the leading apostles of Hawaiian Regional Cuisine, are friends. They revel in each other's successes. So all three were doubtless happy Sunday night when Honolulu Magazine named Alan Wong's Restaurant, Roy's Restaurant and Chef Mavros the gold, silver and bronze Restaurant of the Year. In separate competitions for the best restaurants by county, with the overall winners not eligible, Best Oahu Restaurant went to Le Bistro. The other golds went to David Paul's Lahaina Grill (I believe Lahaina Grill just announced that David Paul's name is coming off the sign, btw), Kauai's Beach House Restaurant, and the Big Island's Merriman's (in Waimea-Kamuela). Best New Restaurant gold went to Nobu Waikiki (Stage came in silver and Cassis took bronze) and, for the neighbor islands, a Maui eatery called DUO. Just a couple hours earlier, at the Sub-Zero/Wolf Honolulu Showroom, the Tom and Warren Matsuda Culinary Scholarship Fund awarded top honors to Adina Guest, following a cook-off with Ayumu Matsutaka and Justin Nip. All three are KCC students and all three got scholarship funds. Adina Guest, who was born in Florida and grew up in Switzerland before going to high school in California and moving to Hawaii to attend KCC, served judges a meal that included a Big Island Goat Cheese Souffle.

Not a relaxing news development

There are several things that can go wrong with the Hawaii visitors industry in 2008, but one is of particular interest because it speaks to a problem we all face in modern society. We know Japanese visitor traffic is still soft in compare to years past -- though we still get 4,000 from Japan most days. We know that rival destinations, especially Mexico, are getting much better at soliciting the same traffic we've always counted on from California. We know that economic uncertainty on the mainland, which has mercifully not hit us directly, could hit us indirectly by deterring convention travelers from scheduling meetings here. But the new problem is a fascinating one. John Monahan, CEO of the Hawaii Visitors & Convention Bureau, brought it up in an appearance Friday on my public television show. "We're not just competing with other destinations," he said. "People are getting busier. We're competing for their time." As Monahan and his senior VP for marketing Jay Talwar see it, there are a lot of people out there who can sometimes break away for a week, but have a lot more difficulty than formerly taking two or three weeks off at a time. And while the Japanese never seemed to mind -- their average stay has long been one week -- mainlanders can be excused for thinking that Hawaii is a pretty distant place to fly to just to stay for a few days and their fly home. This actually breaks down into two separate problems. The first is that some people may not come at all because they decide it makes more sense to fly to Mexico or the Caribbean so their too-short vacation is bracketed by shorter flights. The crappier the experience people have at airports and the air, the more people will think like this. The second problem is that shorter stays mean less revenue. I can tell you how many humans have flown here this year -- we passed 8 million about a week ago -- but if 2 million of them are staying half as long as a group of the same size last year, than the number of visitor days will be way down. We've already seen diminished revenue for some tours, restaurants and others, as the increase in total visitor spending has been eaten up and then some by rising hotel room rates. Shorter stays will hurt tours even more as fewer visitors find themselves with the time to go snorkeling or whatever. Will we have to reinvent our vacation offerings to jam in more relaxation?

Dust-up over housework

My mother, an elementary school teacher until I was born, spent the rest of her years as a "homemaker," to use the preferred 1950s term. She lived into the 1990s without ever having a driver's license.She did what was expected of her as a mother of six, and that included a never-ending routine of cooking and laundering. As the eldest child I heard a lot of complaining about her work load. In later years she did manage to offload setting and clearing and washing and drying the dishes to the children, and vacuuming was also outsourced to us.Coming of age at the end of the Sixties, I was a feminist. All straight males were, if they wanted to get dates. When I married, I knew that I would be doing half the housework. After all, my first wife made more than I did. Also, Marilyn worked mostly regular hours while I worked radio hours (nights and weekends) so I was often home at the right time to be a househusband. (Thanks to two wonderful children, this was a joy.) While many male babyboomers found on marriage that they were expected to do half the housework, they simultaneously learned that their wives felt entitled to determine what level of cleanliness was acceptable. This was back when female babyboomers were still trying to maintain the same level of cleanliness their "homemaker" mothers had achieved. We also found that the wife considered herself the sole determinant of who did what, which worked out to the husband doing all the unskilled labor. My first wife was kinder than most, and allowed me to do some cooking, but my successes were quickly forgotten and my failures were vividly remembered and reported to anyone who would listen decades later. Babyboomer men never did lay down the law and demand an equal say in how much housework would be done, and by whom. What happened instead was that the women, moving up on the professional ladder and working longer hours while facing more chauffeuring and audience duties as the kids grew, lowered their standards to something they had a fair shot at achieving. The New York Times reported in the 1990s, in a front page article whose headline included the term "dust bunnies," that two-income households had grown accustomed to dirtier homes, cleaned up less for company, and made more perfunctory apologies to visitors for the mess. Now comes a University of Massachusetts study in the Journal of Marriage and Family. A researcher wanted to measure a working woman's willingness to do housework. The fascinating finding: married women do about one less hour of housework per week for every seven grand they earn as full-time workers outside the home.  The study doesn't specify whether the rest of the housework is handing off to a professional or simply left undone. It works this way regardless of how much or little the husband makes and regardless of how many children there are. The new study doesn't say anything about how much housework the husband does. But -- pay attention, men -- the more you help with the housework, the more time you and your spouse have for -- you know, other stuff -- and the better your wife's mood will be as well. This is generic advice. It doesn't necessarily accord with my own personal experiences. My wife Bernadette sometimes finds it hard to watch me doing some dishes because she leaps to the conclusion that she should have done them earlier. I haven't used this as an excuse to slack off but I confess it improves my own mood to have her care about it!

How fuel surcharges will affect you

U.S. consumer prices rose three tenths of a percent in October, and, let's face it, that doesn't sound so bad. After all, 1% looks like a tiny number. This is less than a third of that. But soaring crude oil prices are adding so many tiny numbers to the price of everything that it's going to add up to big money for you and everyone else in Hawaii. Matson Navigation, which ships more stuff to Hawaii than any other shipping line or air cargo carrier, will raise its fuel surcharge five full points to 29% in three weeks. This has been explained away as a penny on a head of lettuce. Again, a tiny number that doesn't sound so bad. But most people make at least a couple of supermarket runs per week and purchase at least 50 items from T-bone steaks to toilet paper. Then there's all that stuff you got at the mall. And the two or three items you get daily at 7-Eleven. The total impact of higher fuel surcharges on your pocketbook is better measured in dollars than in pennies. And remember that what Matson brings to Hawaii often must then travel to neighbor islands on Young Brothers, which recently began a fuel surcharge of its own. The impact gets a lot bigger in a great big hurry if you're buying a new home or condo, since transportation surcharges have ballooned the cost of construction materials from the mainland, and developers aren't going to eat that expense. Then there's the cost of flying to the mainland. Mainland news agencies reported this week that a fresh round of increases was going on and that many domestic airline tickets have gone up by a third or more since Labor Day. And more to come, because the average airline says fuel accounts for more than a third of all its costs, often more than payroll. Gasoline, of course, is easier to track -- when crude oil nears $100 you know exactly what will happen to the prices you pay. Remember those people who made a big deal of current oil prices being lower in real dollars than prices a generation ago? They said parity would come around $98 a barrel. We're almost there, brah. So far I've spoken only of the prices you pay. You're being nicked and dimed and it adds up. But there's also the potential impact of a cooling economy on tourism, hence on our economy. Repeat visitors to Hawaii already face sticker shock when they realize that the hotel that charged them $150 three years ago now wants $300 a night because (a) everyone's being hiking prices, and (b) the hotel renovated and now likes to think of itself as being in a higher tier of the industry. If the hotel room rate doesn't deter them, the mounting air fares may.

Icons and nocons of TV

The cable network TV Land, in conjunction with the magazine Entertainment Weekly, has "compiled" a list of the 50 top TV icons. Slapped together would have been more like it.But lists are great for starting public discourse, since everyone is likely to disagree vehemently about some of the rankings, so why I don't I go ahead and get my dudgeon on. Johnny Carson leads the list. He should be on the list, but higher than Lucille Ball or Walter Cronkite? I've got no problem with the fact that Late Night host David Letterman made the list while Jay Leno did not, but Jon Stewart, while funny, is not yet an icon. The list has no room for any of four men on whose shoulders these other guys stand: Dick Cavett, Jack Paar, Joey Bishop and Steve Allen. Carol Burnett, Ed Sullivan, Jackie Gleason and Flip Wilson made the list. I recently saw some old Flip Wilson shows and don't mind his inclusion. But I never cared for Milton Berle, and it's weird to see him listed but not the funnier and more pioneering Sid Caesar and Ernie Kovacs. Lucille Ball is joined on the list by Bill Cosby, Mary Tyler Moore, Dick Van Dyke, Andy Griffith, Carroll O'Connor, Bob Newhart, Alan Alda, and some others who aren't in the same class but did make powerful impressions on TV, including William Shatner, Henry Winkler (surely Jim Nabors' Gomer Pyle is more iconic than the Fonz!), Roseanne, Jerry Seinfeld and Bea Arthur. It seemed odd, however, to also see such names as Michael Landon, Heather Locklear, John Ritter, Sarah Jessica Parker, Sally Field and George Clooney, especially as the expensive of Raymond Burr from "Perry Mason" (not to mention "Ironsides"), James Arness from "Gunsmoke," which was on for 20 years for crying out loud, his brother Peter Graves from "Mission: Impossible" (not to mention "Biography") or even Donald J. Travanti from "Hill Street Blues." And have these people forgotten Jack Lord? The list includes Lassie, Homer Simpson, and Kermit the Frog, but I would like to have seen Rocky and Bullwinkle on the list as well. If you're raising children young enough to watch The Cartoon Network, you know how influential the Bullwinkle Show has been on contemporary animation writers. From the world of news, Walter Cronkite made the list, and should have, given his incredible influence on public opinion and on the style of television news presentation at a time when there were only three networks and his newscast was top-rated, but there is no spot for David Brinkley, who was almost as influential at the time and was in the game way longer -- he was also perhaps the best writer TV news has ever had. Barbara Walters, who pioneered lead roles for women in electronic journalism, belongs on the list, but so does Edward R. Murrow, who almost invented broadcast field reporting. From sports, the list includes Howard Cosell, the attorney who became an opinionated sports commentator (and -- trivia question -- hosted a variety show called Saturday Night Live for about five minutes, which is why the show we all know as Saturday Night Live debuted as NBC Saturday Night) but not John Madden, who is slightly less annoying and a lot more knowledgable than Cosell was, or Jim McKay of ABC's Wide World of Sports, whose smooth coverage of terrorism at the Olympics raised the bar for all sports journalists to come. The list includes Simon Cowell of "American Idol" but not Ralph Edwards of "This is Your Life." Dick Clark of "American Bandstand" is on the list but not Groucho Marx from "You Bet Your Life." Bob Barker is on the list but not Gary Moore from "To Tell the Truth" or John Daly from "What's My Line?" But it's Groucho's omission that bugs me the most. He was as sharp-tongued as Simon but way wittier. From daytime talk shows, Oprah made the list, and Ellen DeGeneres, but not Mike Douglas or Merv Griffin, who had the two pioneering syndicated talk shows, or Phil Donahue, who did the first major tabloid talk show, but at least they left off Jerry Springer and Geraldo Riviera. I'm not old enough to remember whether Mike Douglas or Merv Griffin came first but I'm old enough to remember that everyone who followed the two of them has repeated what they did first.

Profit and loss at Hawaii hotels

Hawaii hotels have never been more profitable. But in one respect, that's our loss. Joe Toy and the gang at Hospitality Advisors report this week that Hawaii hotel room revenues for the first nine months of 2007 topped $2.4 billion -- almost $1 million a day. Of course, hotel revenue in Hawaii is really well over $1 million a day thanks to room service fees, bar and restaurant tabs, spa fees, rents paid by on-campus retail vendors, and so on. The room revenue figure is 99% of what was coming in during the same nine months last year, despite occupancy that was down five percentage points to 76%. Room rate hikes actually kept pace with ebbing occupancy until sometime last spring. Since then, revenue has been lower, but not, as you can see, by much. Down by 1% is very good performance, especially considering current economic worries. Furthermore, room revenue is actually still higher than year-ago levels in Waikiki, on the Wailea coast of Maui, and in the Waikoloa area of the Big Island. So, if the picture is financially so bright, what's our loss? The problem is that hotels have become such cash cows that they have attracted flippers, the sort of investors who don't care much about what they buy -- so long as they reap a quick, easy, massive short-term gain. They're not interested in what shape a property will be in 20 years from now. They're not interested in the property's vendors, no matter how long they've been on the premises. They're not interested in service unless it declines so much that it impinges on their ability to quickly cash out. Labor negotiations at hotels are never an easy proposition, but one local union official told me that it gets even harder when a hotel has a new owner who knows nothing and cares less about how a hotel runs. It could be worse, though. For one thing, slamming people who buy a business and flip it carries the implicit assumption that longer-term owners aren't as cheap. I recently stayed at a hotel in Kona that has been under the same ownership for years and that ownership clearly doesn't believe in maintenance, much less renovation. One could sense the same mentality as the slumlord who won't fix anything unless she or he thinks it will make it possible to replace you with a tenant who will pay more. Second, we at least have a financial environment in which new hotels can't be built, because investors want the faster return that comes from time share condominiums. This is relieving some of the competition by mainland buyers with local residents who want to bid on a home.

Sing for your Supper

In a report that will be widely published because it supports the grabber headline "The REAL Da Vinci code," a guy has written a book asserting that Leonardo hid music in "The Last Supper." Giovanni Maria Pala, a computer technician and musician, laid a musical stave over the painting, aligning the bottom line with the edge of the table and treating as notes each hand and each loaf of bread. The resulting notes made no sense, he writes, until he remembered that Leonardo wrote from right to left. Reading the notes that way, they sound sad, like a requiem. Other experts say the theory is at least plausible, since Leonardo is known to have played a lyre (a handheld harp) and embedded symbols in other paintings. "The Last Supper" was painted on the wall of a church in Milan at about the same time Columbus was sailing. I have seen it in person twice, the first time in the early 1980s when its restoration was in its early stages, and the second time in 2005 when it was substantially restored. The unrestored sections were so faint as to be nearly invisible, and frankly the restored portions didn't look that much better. It brought tears to my eyes to see this, because the truth is that this masterpiece is, in a sense, gone. We see its ghost. That is nothing compared to the disappearance of ancient music. We don't even know what scales the Greeks used. We have the names of those ancient modes but all else is guesswork. If Leonardo designed "The Last Supper" to include a hidden elegiacal piece of music, it may be the first instance of this, but it would not be the only time someone has associated a visual image with melody. The 20th century Brazilian composer Villa-Lobos once composed a piece whose melody he derived from tracing the Manhattan skyline on a piece of staff paper.

 

Veterans Day news from the SBA

In fiscal 2007, the Honolulu District Office of the U.S. Small Business Administration made loans to 52 veterans -- a loan a week. But the SBA is now prepared to do more, thanks to a federal law that earmarks small business loan guarantees expressly for companies majority-owned by vets or their spouses. The program is called Patriot Express. Under it, loans of up to $500,000 are made by participating bankers, including most local lenders. The borrower negotiates loan terms with a banker, but the program limits the interest rate to a certain amount above prime. The program hasn't been used much yet, but recent developments have made it more attractive. Interest rates are lower because the Fed is fending off a credit crunch, and, to the extent that credit does become tight, it certainly helps to get a loan when your loan is guaranteed by the U.S. government. Small businesses create most of the new jobs in America -- big businesses are better known for slashing jobs -- and most businesses are small businesses. Of these, some 15% are owned by veterans. Small businesses are even more important to Hawaii's economy than to the economy on the mainland. A free workshop on how to access this capital will be held Thursday, Nov. 15, 9am-noon, at the Oahu Veterans Center, 1298 Kukila St. To tell them you're coming, phone Mary Dale at 808-541-2990, extension 212. Participating lenders in Hawaii:

• Bank of Hawaii.
• First Hawaiian Bank.
• American Savings Bank.
• Hawaii National Bank.
• Hawaii Community Federal Credit Union, Kailua-Kona.
• Honolulu Federal Credit Union.

The plague -- as a business story

For years I wrote, produced and anchored the radio year-in-review specials for United Press International, a half-hour show incorporating the most important and interesting news events of the year and showing off how good our coverage was. So in the mid-1990s I began looking ahead to the year 2000 and thinking it would be fun to do, not just a year-in-review, but also a century-in-review. And one day in the newsroom I remarked that maybe I would do a millenium-in-review, too. "It raises an interesting question," I said. "What are the 10 biggest news events of the millenium?" "Well," a colleague replied, "the plague would be right up there." The plague! Spread by rats and fleas, it marched across Europe, and though history books sometimes say it decimated the population, that's not true. Decimate is to reduce by one tenth. The plague wiped out a third of Europe's population. This all came to mind this morning with the news that some 30 people at the Grand Canyon were given antibiotics after the sudden death of a wildlife biologist in his thirties from what may have been the plague. Rodents in the Southwest do sometimes carry it. It's more treatable now than it used to be, but, yes, you can still die of it. The great plague, to get back to that, created one of the greatest economic expansions of all time and spurred the great age of exploration that led to the East India Company and Columbus's "discovery" of the New World. Here's why. A third of the people died. The other two thirds inherited. When the plague was over, Europe was populated by survivors who had all the housing and furniture they needed. They inherited valuable durable goods and property. This freed money up to be treated as what today is called "disposable income." It was in this economic environment that ships sailed for India to bring back spices and brightly-dyed fabrics. Churches had fewer parishioners to tithe, but tradesmen inherited shops and houses. Wealthy landowners and local royal personages could pay for house orchestras like the one Haydn controlled at Esterhazy. It would be generations before the muncipal symphony arose, or the freelance composer. Craft guilds in the Dutch low country could chip in to commission group paintings from the likes of Rembrandt and his lesser brethren. His "Dutch Masters" painting is a striking example of this because he placed some people in the background, barely visible, though they probably paid equal shares for something analogous to today's yearbook photos of school clubs. The Reichsmuseum in Amsterdam cleverly hangs the Rembrandt next to a painting of the same size and format by a hack, with each subject given equal light and focus, so you can see by comparison how outrageous Rembrandt had been. The lesson here isn't that the plague is good, but that everything has unintended consequences, and when the event is big the consequences can be far-reaching. For the student of history there is also this: everything leads to everything else. If you would learn history, start anywhere and keep reading.