John W. Kluge, the Founder of Metromedia, Dies at 95

Abstract: John W. Kluge , who parlayed a small fortune from a Fritos franchise into a multibillion-dollar communications empire that made him one of the richest men in America, died on Tuesday night at a family home in Charlottesville, Va. He was 95. The John W. Kluge Foundation confirmed his death. Mr. Kluge was the creator of Metromedia, the nation’s first major independent broadcasting entity, a conglomerate that grew to include seven television stations, 14 radio stations, outdoor advertising, the Harlem Globetrotters, the Ice Capades, radio paging and mobile telephones. An immigrant from Germany, Mr. Kluge (pronounced KLOOG-ee) came to the United States in 1922 and took his first job at the age of 10 as a payroll clerk for his stepfather in Detroit. He made his first million by the time he was 37. He made his first billion — it was actually almost two billion — in 1984, when he took Metromedia private in a $1.1 billion leveraged buyout and then liquidated the company, more than tripling his take. He sold the television stations, including WNEW in New York, for more than $2 billion to Rupert Murdoch, who was expanding his communications empire. Mr. Kluge’s sale of 11 radio stations brought close to $290 million. The outdoor advertising business went for $710 million. The Harlem Globetrotters and the Ice Capades, which together cost the company $6 million, brought $30 million. Critics complained that he had reaped the bonanza after having paid Metromedia’s stockholders too little when he took the company private. But Mr. Kluge maintained that the value of the company shot up afterward, when the Federal Communications Commission increased the number of television stations a company could own from seven to 12 and ruled that only two cellular telephone systems could operate in a given city. “That changed the price of poker,” he said. In 1986, Forbes magazine listed Mr. Kluge as the second-richest man in America (after Sam Walton, the founder of Wal-Mart Stores). By this year, after a bankruptcy of the Bennigan’s and Steak and Ale restaurant chains in 2008, Mr. Kluge had dropped to 109th on the Forbes list with a fortune of $6.5 billion. Mr. Kluge savored the chance to move into new areas of high technology. He had no patience for those he called “self-important corporation types cut out of the same cookie cutter” who tended to stick to what was safe. He often took Wall Street by surprise, but as the financial analyst Allen J. Gottesman said in 1986: “Whatever he does works out real well. You always assume there was a good reason, and you usually find out later that it was a good move.” Not everything he touched turned to gold. In 1965 he bought Diplomat magazine in Washington and tried to change it from a society sheet into a serious publication of world affairs. “I lost a million dollars before I ever knew I lost it,” he said. Three years later he negotiated a proposed $300 million merger of Metromedia with Transamerica only to join in calling off the deal “by mutual consent” in a two-paragraph statement months later, saying a merger would “adversely effect” the growth plans of both companies. But he never lost his zest for developing new businesses or his taste for complex financial deals. “I love the work because it taxes your mind,” he said in an interview for this obituary, one of the few he ever gave, after he turned 72. “Years ago, I could have taken a few million dollars and joined the country club and gotten into this pattern of complaining about the world and about the tax law.” He was critical of corporation executives who put themselves in the limelight. There were no public relations officers on his payroll. He liked to do business behind an unmarked door. “I think a great deal of publicity becomes an obstacle,” he said. “I’d love to be in the woodwork all my life. I enjoy it when I know who the other people are and they don’t know who I am.” But it was inevitable that people would come to know who he was, first in the business world as the man with the Midas touch and then as a generous contributor to schools and hospitals. In his later years his name appeared in the society columns as the host for charity parties that he and his third wife, Patricia, gave on their yacht, the Virginian, or as a guest at dinner dances. (He had taught dancing at an Arthur Murray studio when he was in college.) He grew flowers and collected paintings, African sculpture and Indian, Chinese, Greek and Egyptian objets d’art. But nothing gave him more pleasure than putting a deal together. And the creation of Metromedia, considered a triumph of financial structuring, may have been his greatest pleasure of all. The most satisfying day in his life, he said, was the day Barney Balaban of Paramount told him, “Young man, you bring me $4 million and you’ll be able to have the Paramount stock in the Metropolitan Broadcasting Company.” With that $4 million, Mr. Kluge got into the television business as chief executive of Metropolitan, which consisted of two stations — WNEW and, in Washington, WTTG — and two radio stations. He renamed the company Metromedia in 1961 because he intended to expand it beyond broadcasting. Mr. Kluge held to a simple maxim: make money and minimize taxes. He made it his business to study the tax code. In 1981, for example, he received tax benefits when he bought buses and subway cars from New York’s Metropolitan Transportation Authority and leased them back to the authority for a tax savings of $50 million over five years. He also found a way to enhance the company’s revenue by marrying the profits of broadcasting to the depreciation that came with billboard advertising. “I sold the banks the idea that the Ford Motor Company that advertises on radio and television would also advertise on billboards,” he recalled. “From a financial orientation, if you took the pretax profits of radio and television and the depreciation of outdoor advertising, you increase the cash flow. I impressed the bank so much that I borrowed $14 million and got our money back in 27 months.” John Werner Kluge was born Sept. 21, 1914, in Chemnitz, Germany. His father died in World War I. After his mother remarried, John was brought to America by his German-American stepfather to live in Detroit. The stepfather, Oswald Leitert, put him to work as a boy in the family contracting business. Mr. Kluge said he left home when he was 14 to live in the house of a schoolteacher. “I was driven to have an education.” He worked hard, and successfully, to lose his foreign accent and to get the grades he needed in high school to win a scholarship to college. He first attended Detroit City College, which was later renamed Wayne State University, and transferred to Columbia University when he was offered a full scholarship and living expenses. At college he distributed Communist literature. “I was never an official member of the Communist Party, but I was quite liberal,” he said many years later. But what got him in trouble was his card playing. At one point the dean called him in to warn that he was in danger of losing his scholarship. “I told him, ‘Dean, you will never catch me gambling again,’ ” he later recalled, “and it was then that I realized the dean of Columbia University didn’t understand the English language. I had told him he’d never catch me gambling again.” Mr. Kluge later channeled his fondness for gambling into high-stakes finance. “I don’t really get comfortable when I haven’t got something at risk,” he said. Even as a billionaire twice over, he borrowed money to leverage his next ventures. Mr. Kluge graduated from Columbia in 1937 and went to work for a small paper company in Detroit. Within three years he went from shipping clerk to vice president and part owner. After serving in Army intelligence in World War II, he turned to broadcasting and, with a partner, created the radio station WGAY in Silver Spring, Md., in 1946. “It cost us $90,000,” he recalled. “I went up and down the street on Georgia Avenue in Silver Spring to get investors.” In the 1950s he acquired radio stations in St. Louis, Dallas, Fort Worth, Buffalo, Tulsa, Nashville, Pittsburgh and Orlando, Fla. Meanwhile, he invested in real estate and expanded the New England Fritos corporation, which he had founded in 1947 to distribute Fritos and Cheetos in the Northeast, adding Fleischmann’s yeast, Blue Bonnet margarine and Wrigley’s chewing gum to his distribution network. In 1951 he formed a food brokerage company, expanding it in 1956 in a partnership with David Finkelstein, and augmented his fortune selling the products of companies like General Foods and Coca-Cola to supermarket chains. Mr. Kluge served on the boards of numerous companies, including Occidental Petroleum, Orion Pictures, Conair and the Waldorf-Astoria Corporation, as well as many charitable groups, including United Cerebral Palsy. His philanthropy was prodigious. About a half-billion dollars went to Columbia alone, mainly for scholarships for needy and minority students. One gift, of $400 million, was to be given to the university by his estate when he died. Mr. Kluge also contributed to the restoration of Ellis Island and in 2000 gave $73 million to the Library of Congress, which established the Kluge Prize for the Study of Humanities. Mr. Kluge and his third wife, the former Patricia Rose Gay, lived in a Georgian-style house on a 6,000-acre farm near Charlottesville called Albemarle House. He had another home in New Rochelle, N.Y., on Long Island Sound, and an apartment in Manhattan, where he kept much of his modern art collection, including works by Giacometti, Kenneth Noland, Frank Stella and Fernando Botero. He traveled to his houses in his plane and helicopter. Mr. Kluge became acquainted with the woman who would become his third wife at parties when she was in her mid-20s and he was about 60. “At one party,” he said, “she cooked the dinner and then she did a belly dance on the table and I said to myself, ‘Where have I been all my life?’ ” A small scandal erupted in 1985 when Mrs. Kluge was chairwoman of a charity ball in Palm Beach, Fla., attended by Charles and Diana, the prince and princess of Wales. The British press disclosed that a nude photograph of Mrs. Kluge had been published a decade before in a British magazine called Knave, which was owned by her first husband. To avoid embarrassment, the Kluges were traveling abroad on the night of the ball. Their marriage ended in divorce in 1991, and Mrs. Kluge received a big settlement as well as the Virginia estate. He married again, to Maria Tussi Kuttner, who survives him. Mr. Kluge is also survived by his son, John W. Kluge II; a daughter, Samantha Kluge, from his second marriage, to Yolanda Galardo Zucco; three stepchildren— Joseph Brad Kluge, whom he adopted, and Diane Townsend Zeier, Jeannette Townsend Brophy and Peter Townsend, the children of Mr. Kluge's first wife, Theodora Thomson Townsend; and a grandson. A convert to Roman Catholicism when he married his third wife, Mr. Kluge said he often went to church. He had planned to be buried in a crypt in a chapel he built on the grounds of Albemarle, but later changed his mind after the house was awarded to his third wife in the divorce. Mr. Kluge acknowledged that he had been ruled by his ambitions and traced them to the struggles of his boyhood. He recalled a conversation he had with friends in college about their aspirations. “One fellow said he wanted to be a lawyer, another a doctor,” he said. “I said one thing — that the only reason I wanted money was that I was always afraid of being a charity case and of being a ward someplace. That’s what really drove me all my life.”

Kluge John W
Outdoor Advertising
News and News Media
Deaths (Obituaries)


Mayor’s California Bid May Undercut Incumbents

Abstract: Mayor Michael R. Bloomberg visited California on Wednesday to stump for a measure that would prevent legislators there from redrawing their district maps, a practice that he contends is a self-serving way for lawmakers to keep themselves in office. Back in New York City, where Mr. Bloomberg is stumping for a measure that would allow him to keep his job as mayor for a third term, some saw a touch of irony. Or worse. “This is pure hypocrisy, plain and simple,” said Councilwoman Letitia James of Brooklyn, who opposes Mr. Bloomberg’s plan to revise New York City’s term limits law so it would allow 12 years in office instead of 8. Mr. Bloomberg was in Los Angeles to promote Proposition 11, a hotly debated ballot question that would require a panel of independent citizens, rather than elected officials, to periodically alter the borders of voting districts for state offices. The mayor contends that under the current system, elected leaders in California and across the country create districts with voters who are expected to support them, all but guaranteeing their re-election and encouraging partisan leadership that appeals to narrow groups of constituents. Some of the mayor’s critics said that his support of Proposition 11 — which he has backed with $250,000 of his own money — is starkly at odds with his plan to revise the term limits law in New York, which now bars him from seeking re-election to a third consecutive term. The California redistricting measure, these opponents say, is aimed at making it harder for incumbents to coast to re-election; Mr. Bloomberg’s term limits measure would make it possible to do just that. The California measure allows voters to decide if the current districting laws are appropriate; Mr. Bloomberg’s measure leaves the term-limits decision up to the 51 members of the City Council. “We have extraordinary news today that Michael Bloomberg does in fact support a referendum, but in California, not New York,” said Councilman Bill de Blasio of Brooklyn. “We’ve now gotten a new definition of irony and hypocrisy,” he added. Mr. Bloomberg, asked about what some saw as dueling positions on different sides of the continent, said that “putting everything before the public in a fair way is democracy, it is democratic governance.” Asked if his support of the California law undercuts his campaign to change term limits in New York, he said: “It is good governance to change term limits from two terms to three terms.” At times, his remarks in favor of Proposition 11 seemed to echo those of his opponents in New York, who say that his effort to revise term limits would deprive voters of a chance to elect a different mayor, especially given Mr. Bloomberg’s willingness to spend $80 million to win re-election. “It’s no surprise many legislators are against Proposition 11 — they’re afraid of facing a real opponent,” Mr. Bloomberg said. “They’re afraid of the voters.” Mr. Bloomberg has argued that there is not enough time to change term limits through a public vote in New York, and that the crisis on Wall Street requires leadership that he is best prepared to offer in a third term. He has also said that changing term limits would provide voters more choice, rather than less, by allowing incumbents to stand for re-election. The voters, he said, can decide if he should have a third term. Backers of Proposition 11 say that 99 percent of state elected officials in California “are re-elected to office,” according to a brochure published by Yes on 11 , a coalition of business leaders and good-government groups. “As a result,” the brochure says, incumbents “have very little incentive to be responsive to constituent concerns of make tough policy decisions.” Kevin Sheekey, New York City’s deputy mayor for government affairs, who was with Mr. Bloomberg in California, said, “It is a gross mischaracterization to suggest that an effort to prevent politicians from redistricting their districts to make them safe for themselves has anything to do with the debate back in New York, which has to do with empowering voters to make decisions.” He said that a mayor like Mr. Bloomberg, unlike a state legislator running for re-election in a district, “faces all of the voters” in New York City.

Bloomberg Michael R
Term Limits (Political Office)
Politics and Government
Reapportionment
Elections
New York City
California


U.S. Turns Off News Billboard Atop Its Mission in Havana

Abstract: MEXICO CITY — The Obama administration has pulled the plug on an electronic billboard outside the American diplomatic mission in Havana that was used to tweak the Cuban government with pro-democracy messages and became a symbol of the bad blood between the two countries. When the billboard went up in 2006, some saw it as an innovative diplomatic stick in the eye of the government of Fidel Castro. Others, though, considered the 25 electrical panels installed by the Bush administration in the fifth-floor windows of the American Interests Section to be fundamentally silly. Mr. Castro, who ceded the presidency to his brother Raúl last year, was clearly not amused by the bright red messages, many of which criticized his government for human rights abuses. In response, he blocked the message board with huge black flags hanging on 100-foot-high flag poles and erected billboards nearby that denounced President George W. Bush. Cuban security guards were also stationed in strategic spots to shoo away any Cubans who might gaze upward at the five-foot-high news ticker, which overlooked the Malecón, Havana’s coastal highway. President Obama, while keeping in place the economic embargo of Cuba , has taken a series of steps to improve relations with the government. The unplugging of the billboard, which was done quietly last month, follows a loosening of travel restrictions and the beginning of migration talks with the Cuban government. “We believe that the billboard was really not effective as a means of delivering information to the Cuban people,” the State Department spokesman, Ian Kelly, said Monday. He noted that the Cuban government had removed some of its negative billboards around the mission earlier this year, which he said the United States viewed as “a positive gesture.” The billboard’s messages ran the gamut. There were sports scores and news items that had nothing to do with Cuba. But there were also political messages, like the one tweaking the Cuban government’s elite for navigating the island in fancy cars while the masses were forced to hitchhike. The United States and Cuba broke diplomatic relations in 1961, but still engage with each other in various ways. “Taking down the billboard has permitted both sides to act like mature adults,” said Robert A. Pastor, a professor of international relations at American University. “That’s the most hopeful thing we’ve seen.” But not everyone viewed it that way. “The only people that are happy about having the news ticker turned off are the Castro brothers,” said Mauricio Claver-Carone, director of the U.S.-Cuba Democracy PAC in Washington.

Cuba
United States
International Relations
United States International Relations
State Department


Clinton Son-in-Law’s Firm Is Said to Close Greece Hedge Fund

Abstract: It was a hedge fund portfolio pitched by Hillary Clinton’s son-in-law, Marc Mezvinsky, as an opportunity to bet on a Greek economic revival. Now, two years later, the Greece-focused fund is shutting down, after losing nearly 90 percent of its value, according to two investors with direct knowledge of the matter who spoke on the condition of anonymity. Investors were told last month that the fund would close. The fund, Eaglevale Hellenic Opportunity, had raised $25 million from investors to buy Greek bank stocks and government debt. Eaglevale Partners, a Manhattan hedge fund firm founded by Mr. Mezvinsky and two former Goldman Sachs colleagues, raised money for the Hellenic fund at a time when some on Wall Street had hopes for a revival in the Greek economy. For a time, Mr. Mezvinsky appeared at hedge fund conferences promoting the Greece investment thesis. Mr. Mezvinsky is married to Chelsea Clinton , the daughter of former President Bill Clinton and Mrs. Clinton, the former secretary of state who is seeking the Democratic nomination for president. Betting on Greece has proved to be tricky — some investors have made huge gains while others have had their fingers burned, depending on the timing of their bets. And the last 17 months have been especially difficult for a number of hedge funds, even ones run by some of the best-known managers. This year, the Eaglevale flagship fund, which manages about $330 million and specializes in making macroeconomic bets, is down 1 percent. So-called macro hedge funds make trades based on global economic and political events. Last year, Fortress Investment Grou p and Bain Capital had to shutter hedge funds that had made bets on shifting macroeconomic trends. The average hedge fund was down 0.63 percent in the first quarter of this year, according to the HFRI Fund Weighted Composite Index. Mr. Mezvinsky and his partners began raising money in 2011 from investors for the firm’s flagship fund. Since then, that portfolio has posted uneven performance. A Stanford University graduate, Mr. Mezvinsky worked at Goldman for eight years before leaving to join a private equity firm. He left that job to form Eaglevale with two longtime Goldman partners, Bennett Grau and Mark Mallon. The hedge fund firm is named after a bridge in Central Park. Some of the firm’s earliest investors were Goldman partners , including Lloyd C. Blankfein, Goldman’s chief executive officer, who let Eaglevale use his name in marketing the flagship fund. It is not clear why Eaglevale waited until this year to close the Hellenic fund, which already had lost about 40 percent of its value by early last year. Last year was particularly tumultuous for Greece. The country neared the brink of economic collapse as the country’s leaders and its international creditors engaged in tense negotiations. Ultimately, the Greek government agreed to a number of economic reforms demanded by creditors in return for a new bailout. The economic situation in Greece is still tenuous as the country continues to squabble with other eurozone nations and its creditors about how to reduce its debt burden. Investors on Wall Street continue to promote investment in Greece nonetheless. During a recent Sohn Investment Conference charity event at Lincoln Center in New York, Richard Deitz, of the hedge fund VR Capital Group, told an audience of investors that he was betting on Greek banks and government bonds. In letters to investors in 2014, Mr. Mezvinsky and his partners expressed confidence that Greece would soon be on the path to a “sustainable recovery.” But by the end of that year, Eaglevale’s leaders began to acknowledge that their perspective on the situation in Greece may have been wrong. The fund had earlier stopped taking in new money. The one silver lining for the fund’s investors from all of this is that they will have a somewhat larger tax loss on investments to claim next year.

Eaglevale Partners
Marc Mezvinsky
Greece
Hedge fund
Lloyd C Blankfein
Euro Crisis
Government bond


Newark Man Found Fatally Shot in Car Outside His Home

Abstract: A man whom Newark ’s mayor called “the pride of our city” was shot to death behind the wheel of a car idling in front of his home early Sunday, the police said. The man, Khary Orr, 29, was an employee of the Newark Division of Public Buildings, coordinating maintenance projects, friends and relatives said. The police had no suspects and gave no motive in the shooting. Mr. Orr was shot about 4:30 a.m. in a Mercedes-Benz in front of his home on Eckert Avenue, the police and the Essex County prosecutor’s office said. The police said it was unclear if anything had been stolen. Mayor Cory A. Booker, interviewed outside the Orr home, said there were developments in the investigation, but he declined to give details on whose car Mr. Orr had been driving. The Mercedes did not belong to Mr. Orr, the police said. “He’s the baby,” Mr. Orr’s brother, Lindsley Orr, 49, said. “No way is he supposed to be the first to die. Especially like this, to this kind of violence in this city.” The director of Newark’s Division of Public Buildings, Marilyn Gaynor, said she had known Mr. Orr and his family long before he started working for the city. “This is a young man who went to college and did the right thing and was just a sweet, sweet spirit,” Ms. Gaynor said. She said Mr. Orr graduated from Lincoln University in Pennsylvania with a degree in physics. The death was the 98th homicide in Newark in 2007, down from 106 last year. “This is a brutal situation. It’s more problematic than you can imagine to see this relentless violence,” Mayor Booker said. “We’ve made some progress this year, but this is a terrible exclamation mark at the end of the year.”

Murders and Attempted Murders
Orr Khary
Newark (NJ)


Oil Price Drops Sharply as Global Agency Sees Demand Easing

Abstract: RIYADH, Saudi Arabia, Nov. 13 — The price of crude oil dropped sharply on Tuesday after a prominent energy group lowered its estimate for worldwide oil demand, saying high prices were harming consumption. Oil fell $3.45, or 3.7 percent, to $91.17 a barrel in New York. Last week, oil futures reached a high of $98.62 a barrel. Oil prices, which have more than quadrupled over the last four years, are close to the inflation-adjusted record of $101.70 a barrel reached in April 1980. With an editorial titled “$100, a turning point?,” the International Energy Agency suggested in its monthly report on Tuesday that high prices were changing energy use in the developing world and in developed countries. Despite reducing its consumption forecast by half a million barrels a day, the agency still expects oil demand to grow by 1.2 percent this year and 2.3 percent next year. Still, the lowered outlook pushed oil prices down. The oil markets were also responding to comments by Saudi Arabia’s oil minister, Ali al-Naimi, who signaled over the weekend that OPEC might consider increasing its production to stem the rise in prices. But Mr. Naimi quickly ruled out an imminent policy decision by the oil cartel as Saudi Arabia plays host to the summit meeting of OPEC heads of states this weekend. The leaders are expected to discuss the security of global oil supplies. The prospect of oil at $100 a barrel seems to have receded, for the moment. The drop in prices was welcomed in Riyadh, where the issue threatened to overshadow the summit meeting. But the question of oil prices remains a particularly sensitive one, especially for Saudi Arabia, the top oil exporter. The kingdom holds a quarter of the world’s proven oil reserves. During a news conference on Tuesday, Mr. Naimi carefully avoided drawing any conclusions linking the current high prices and a potential slowdown in consumption. He stressed several times that he believed that oil prices were set by free markets, not oil producers. Typically, he would not be drawn into talking about specific price levels. “We are not really interested in prices that negatively impact economic growth or cause less prosperity,” Mr. Naimi said. “The price needs to be fair to many players. That’s the difficult formula, to say what the price will be.” He added, “The fundamentals have nothing to do with prices.” After his earlier comments helped deflate the market, Mr. Naimi said OPEC’s oil ministers would not discuss production levels this week. But he left the door open to a new increase in OPEC’s cumulative output when the group meets in Abu Dhabi, the capital of the United Arab Emirates, on Dec. 5. After its last meeting, in September, OPEC decided to increase oil production by 500,000 barrels a day, a modest increase of 2 percent in the group’s total output. The measure, which became effective Nov. 1, did not curb prices. The stunning rise in energy prices, spurred by an increasingly volatile and unpredictable market, has happened despite warnings about the health of the American economy. Last week, Ben S. Bernanke, the Federal Reserve chairman, said the United States was headed for slower growth because of oil prices, among other things. The message prompted a sell-off on Wall Street and stoked new fears of a possible recession. Asked whether he was concerned that a slowdown could reduce demand for oil in the United States, Mr. Naimi said: “We do not wish any country to go into a recession, particularly the biggest consumer in the world. We hope it doesn’t happen, and we’re not planning on that happening.” Mr. Naimi said Saudi Arabia was pumping 9 million barrels a day and had increased its production capacity to 11.3 million barrels. He expects another 500,000 barrels of additional capacity within the next three months. Saudi Arabia, he said, is on track to raise its total production capacity to 12.5 million barrels a day by 2009. The OPEC summit meeting, which will include the leaders of Iran, Venezuela and Nigeria, will be held here on Saturday and Sunday. It will be preceded by a two-day conference on energy and environmental challenges for OPEC. Saudi Arabia and other oil producers have invested tens of billions of dollars to improve their ability to pump more oil on the assumption that demand will keep rising, especially in Asia. But at current prices, consumers are feeling the pinch and governments are becoming concerned about the weight of energy costs on economic growth, according to the energy agency. Over time, prices are changing the attitudes of consumers in developed countries. “The cumulative $70 rise in price since 2002 is, we believe, having a cumulative effect,” the report said. “Ultimately, whether $100 oil proves a turning point in consumer and government thinking toward energy efficiency is more significant than its direct impact on oil demand growth.”

Organization of Petroleum Exporting Countries


Bosnia-Herzegovina: Application to European Union Is Nearly Ready

Abstract: After years of lingering behind its neighbors on the path to European Union membership, Bosnia’s president has announced that his country will apply for membership in mid-February. Dragan Covic, chairman of the three-member presidency, said Tuesday that the formal application would be handed over on Feb. 15 and that by then Bosnia would try to have fulfilled the last two preconditions for the application to be considered as credible by the European Union. The country has to create an effective coordination mechanism for dealing with the bloc and to adjust a trade agreement with it. After Bosnia gains candidate status, it still will take years of reforms and negotiations before membership is granted.


Fast Start by Mystics Is Too Much for Liberty

Abstract: WASHINGTON (AP) — Matee Ajavon tied a career high with 32 points to help the Washington Mystics cruise to a 91-81 victory over the Liberty on Saturday night. Crystal Langhorne added 20 points for Washington (4-14), which set a season high for points in regulation and hit 28 of 29 free throws while snapping a four-game skid. Cappie Pondexter scored 21 points and Plenette Pierson added 20 for the Liberty (12-9), who lost for the fourth time in 12 games despite making all 18 of their free throws. “We’re focused,” said Ajavon of her team, which is three and a half games out of a W.N.B.A. playoff spot despite registering just its second victory over an Eastern Conference opponent. “We’ve dropped some games, and we just know that it’s not over.” Washington outscored the Liberty, 32-15, in one stretch of the first half, eventually pushing its lead to 44-25 when Ajavon hit a 3-pointer from the left wing. The Liberty closed to 50-38 by halftime, but the Mystics again seized control in the third quarter. Langhorne found Ajavon for another 3 to stretch the lead to 20 and a few possessions later redeemed an air-ball miss by Ajavon to make the score 68-46 with 2 minutes 57 seconds left in the third. It was Washington’s second-largest lead of the season. The Liberty edged no closer than 9 points during the fourth quarter. “We’ve been playing every other night with no practice time, and they haven’t, and they were at home,” Liberty Coach John Whisenant said. “I worried about all this — that’s what kept me awake last night. But it didn’t do much good.”

Basketball
New York Liberty
Washington Mystics
Pondexter Cappie
Ajavon Matee
Women's National Basketball Assn


French Pension Protests Continue, Though Smaller

Abstract: MARSEILLE, France — Several hundred thousand people demonstrated again on Thursday to protest changes in France ’s retirement age, but the numbers were down significantly from previous national days of protest, and it appeared that President Nicolas Sarkozy and his government had won an important victory. Mr. Sarkozy’s approval ratings are hovering around 30 percent, a historic low, but loyalists say he will now be able to contrast his firmness in carrying through a historic reform with the behavior of previous governments that backed down in the face of the “democracy of the streets.” In Marseille, where the strikes are thought to have had the greatest impact on day-to-day life, the streets and sidewalks are full of garbage, and the port remains blocked. Residents are a little exasperated that it is not clear when things might return to normal. In an uncharacteristic show of bipartisanship, local leaders from Mr. Sarkozy’s ruling party have been joined in recent days by opposition Socialists in calling for an end to the strikes. France’s unions had called for the day of strikes, even though the lower house of Parliament gave final approval on Wednesday to increase the minimum retirement age to 62 from 60 and the age to receive a full pension to 67 from 65. If the bill is approved, as expected, by the Constitutional Council, it should become law in mid-November and begin to take effect next July. Estimates of participation in Thursday’s protests varied widely, here and throughout the country. In Marseille, the police said 12,000 people turned out, while union leaders put the number at 150,000. In Paris, the police said that 31,000 people demonstrated, down from 67,000 on Oct. 19; the nation’s largest union, the C.G.T., said 170,000, down from 330,000. Nationally, the police put the figure at 560,000, the weakest figure yet and about half that in October; the C.G.T. said 2 million, down from 3.5 million last time. Union leaders said they would keep fighting. Bernard Thibault, the leader of the C.G.T., said: “Contrary to what the government thinks, the adoption of this reform is not bringing us any closer to the end of the conflict. And we’ll continue, tomorrow, as on Nov. 6, the date of another day of action, to ask for the nonapplication of the law. Adopted or not, the affair’s not over.” But he also conceded, in an interview with Libération, that “the way we contest it is shifting.” Air and rail traffic were disrupted on Thursday; news agencies reported that nearly half of the flights at Orly Airport near Paris were grounded, with around a third of flights at Charles de Gaulle and other airports canceled. As usual on strike days, most intercontinental flights took off as scheduled. The national railroad system said on its Web site that up to 80 percent of high-speed inter-city trains would run normally, but the proportion for slower and local trains was lower. In Paris, subway and bus services operated almost normally. The situation was tougher in Marseille, which has always been a union town. Since the end of World War II, the city’s dock and port workers and trash collectors have protested and struck with great regularity, and gained a great deal of local influence. The trash collectors alone have gone on strike about 20 times in the past three decades. For the last month, strikers have been blocking two major oil depots. Thousands of trash collectors returned to work on Tuesday after two weeks on strike, but the cleanup is expected to last days and cost almost $700,000. “It’s deplorable to give an image of such strong fanaticism,” Jean-Claude Gaudin, the city’s mayor and a prominent member of Mr. Sarkozy’s party, told France Info radio. “The unions completely blocked the city.” In the narrow Rue du Tapis Vert, local businesspeople were not happy. Mounds of bulging bags of putrid trash, old sofa cushions, cardboard boxes and bottles of all sizes and varieties were still waist high on the street. “You never get used to this system — it’s completely illogical,” said Laura Atlan, 22, marking packages in her mother’s wholesale clothing company, Basic & Cie. The store has been offering protective masks to clients, for the smell. The trash pile in front of the store was recently set on fire, charring part of the storefront and destroying the sign above the entrance. “It’s a pure and simple catastrophe,” said Ms. Atlan’s mother, Monique Amsellem, 46. She said the trash collectors “shouldn’t count on end-of-year tips this year.” Instead, she said, she might offer them an envelope stuffed with trash.

Organized Labor
France
Pensions and Retirement Plans
Demonstrations Protests and Riots


Arthur Miller’s Brooklyn

Abstract: When Arthur Miller first visited his country cousins in Brooklyn in the early 1920s, Midwood was not just a neighborhood, it was a description. Patches of woods stood thick enough near their East Fifth Street home that the boys could hunt squirrels, rabbits and other small game. There were muddy paths and tomato fields, and big sacks of potatoes in the cellar. Miller’s two salesman uncles — on whom he would base the character Willy Loman — were urban pioneers, planting roots in the borough just after World War I. The woods have been replaced by houses and streets, but much of what Miller loved and used as inspiration for his plays can still be found. The centennial of Miller’s birth on Oct. 17, 1915, has put his name front and center in the New York theater world. Among revivals of his work, a spare, searing British production of “A View From the Bridge,” has drawn stellar reviews; “The Crucible,” starring Saoirse Ronan , starts previews in a few weeks; and a centennial celebration reading will be held at the Lyceum Theater in Midtown on Monday. But nowhere is Miller more alive than in the streets of Brooklyn, from Ocean Parkway to Avenue M, to Coney Island and Brighton Beach, down the old Culver Line to Brooklyn Heights, over to the Navy Yard and the Red Hook piers. Miller was born in Manhattan and lived as a boy in Harlem in a spacious apartment overlooking Central Park. His father, Isidore, a Jewish émigré from Poland, owned a clothing business that allowed the family a certain level of luxury: three bathrooms, a chauffeur-driven car and a summer place in Far Rockaway. Before the stock market crash, the business began to fail, and so, in 1928, Isidore and his wife, Augusta — Izzie and Gussie — moved the family to the borough of churches and cheap rents. After a short stint at 1277 Ocean Parkway, the Millers bought for $5,000 a six-room house on East Third Street and Avenue M in the Parkville section, a couple of blocks from Gussie’s family. Image A defunct dry dock at the Brooklyn Navy Yard. Credit Emon Hassan for The New York Times In his 1987 memoir, “Timebends: A Life,” Miller writes about the wonder of moving to that dead-end street tucked between the Midwood and Gravesend sections. He was 13, an impressionable age, and was thrilled by the village-like feel of his neighborhood and its many characters. On weekends, he and his cousins would ride the wooden carriages of the elevated Culver line (now the F train) to Coney Island, where they would fish off the rocks for flounder and sea bass. In Holiday magazine, Miller wrote about his first job delivering bread for the local bakery for $4 a week, rising before the sun and riding his bike down Ocean Parkway, a wide, six-lane boulevard that had its own bridle path, used by people from the riding academy near Prospect Park. Miller spent $12 of that money on wood to build a back porch onto his family’s house, which did not quite connect to the kitchen. He planted tulips, roses, an apple tree and a pear tree. The tattered white clapboard and red brick house at 1350 East Third Street still stands, although the back porch is gone. The apple tree fell during a storm many years ago. Miller used it in his 1947 play “All My Sons,” his first hit, as a symbol for the family’s lost son. His sister, the actress Joan Copeland , 93, visited the house about 10 years ago, around the time Miller died, and was happy to see his pear tree had grown as tall as the house. The building needed a paint job. “But we needed one back then, too,” she said with a laugh in a recent interview. “It was a happy home,” Ms. Copeland said. “We loved our parents and they loved us.” Gussie also loved books and would read even when waiting in line in the neighborhood stores. One of Ms. Copeland’s first memories is of her brothers, Arthur and Kermit, bouncing her between them atop their feet. “They treated me like a little toy,” she recalled. Image The football field at Abraham Lincoln High School, from which Arthur Miller graduated in 1932. Credit Emon Hassan for The New York Times One time, at Gussie’s urging, Arthur took Joan for a walk in the baby carriage and, inspired by passers-by admiring his beautiful sister, offered to sell her for $3. Later, Miller would hoist her over the fence at the end of their street to the tennis courts, where he taught her to play, and to a field that he sometimes mowed for 25 cents. The courts and the field are still there, with Washington Cemetery stretching behind them. The neighborhood, once a mix of Jews, Italians and Irish, is now inhabited mostly by Orthodox Jews. Glatt Kosher delis, hat and wig stores and Moisha’s Supermarket dot Avenue M. The elevated train still rattles by, two blocks away. At Miller’s house recently, an Orthodox woman answered the door. She said that she remembered Ms. Copeland’s visit, but that Arthur’s pear tree was no longer alive, a victim of Hurricane Sandy. All that was left was a jagged stump. Nearly three miles away on Ocean Parkway in Brighton Beach stands Miller’s alma mater, Abraham Lincoln High School, built in 1930 and now surrounded by the Belt Parkway and towering Trump Village. Lincoln’s imposing classical facade has not changed much; inside, marble floors, walls and giant W.P.A. murals give it a stately air. Old wooden boards hang in the halls, with honor students’ names painted in gold for each year. Miller, class of 1932, is conspicuously absent. Ari Hoogenboom, the principal there now, said the head of the English department, who taught until 1965, would brag that he nearly failed Miller, giving him a 65 because he couldn’t spell. “Arthur Miller didn’t love Lincoln,” Mr. Hoogenboom acknowledged. Lincoln, however, loves Miller. “The Crucible,” a play about the Salem witch trials, widely seen as an allegory of McCarthy-era paranoia, and “A View from the Bridge” are required reading, and teachers make sure students know not only Miller, but also the novelist Joseph Heller, the Nobel laureate Arthur Kornberg and the singer Neil Diamond, other famous alumni. Many Moves, One Borough 6 Photos View Slide Show › Image Emon Hassan for The New York Times Miller kept a low profile at Lincoln. He didn’t write for its newspaper, The Lincoln Log. Beneath his yearbook photo he wrote that he would attend Stanford University, though his grades were not good enough. The entry also said he was in the French Club, was on the swim team and, like Biff in “Salesman,” had played football. It was on the school’s football field, now covered in artificial turf, that Miller ripped a ligament in his knee, which kept him out of World War II. There are 2,200 students at the school now. In the 1930s, there were as many as 7,000, forcing the administration to graduate two classes a year. (Miller got his diploma in January.) It was easy for a student to get lost in such a crowd, said Mr. Hoogenboom, especially during the Great Depression. Miller’s parents did not come to his graduation ceremony. As the Depression tightened its hold, worries grew in the small white house. Miller’s grandfather moved in and shared a room with him, adding to the tension. Unemployed young men played touch football on the side streets, and suicides were not uncommon in the neighborhood. Gussie played bridge for money. When the games were raided by the police, she would sweet talk them into letting her go home to cook dinner. Despite his grades, Miller persuaded the University of Michigan to accept him. Christopher Bigsby, one of his biographers, said Miller found his writer’s voice in Michigan, “though it was growing up in Brooklyn, during the Depression, with suicides on his street, that became a major influence on his work.” After graduating and marrying his college sweetheart, Mary Slattery, Miller returned to Brooklyn in 1940 and moved in with her and her roommates in a seven-room apartment at 62 Montague Street in Brooklyn Heights, an impressive Queen-Anne-style building. Built in the 1880s, the 10-story red brick, mortar and terra cotta building near the Promenade is now called the Arlington. The poet W.H. Auden lived around the corner at 1 Montague Terrace. “The neighborhood was a haven for artists because it was one of the cheapest places to live in New York,” said Stephen Marino, a professor at St. Francis College in Brooklyn Heights and editor of The Arthur Miller Journal , which celebrates his life and work. Back then, there was no Brooklyn-Queens Expressway separating Brooklyn Heights from the East River. Steps ran down a hill to the waterfront. It was here that Miller began writing his first Broadway play, “The Man Who Had All the Luck” (it closed after four performances in 1944), as well as his first radio plays, including his first broadcast, “Joe, the Motorman,” about a desperate subway driver who rides all day between Coney Island and Manhattan. Over the next decade and a half, the Millers moved four times, each place just blocks from the last. Dr. Marino attributes this to Miller’s state of mind. “He was unsettled,” he said. “He was still finding himself as a person.” In 1941, the couple moved to 18 Schermerhorn Street, one of the first single-family homes in the Heights to be converted into apartments. The newly remodeled flat ran through the whole floor and was spacious. From his “quiet, leafy village,” Miller watched the ships come and go in the harbor and observed the neighborhood diversity: Muslims ate in the garden behind his apartment, Mohawk Indians lived a few blocks away, working to build Manhattan’s skyscrapers and bridges. Though he was writing radio plays, Miller worked nights at the Brooklyn Navy Yard for nearly two years, repairing ships. During World War II, the Navy Yard was a center of America’s industrial might. It was a chaotic, clanking world of cobblestone streets crammed with 70,000 men — and women — pushing through its turnstiles with tin lunchboxes and thermoses, clocking in and out 24 hours a day, seven days a week. There were belching smokestacks, dry docks filled with damaged battleships and aircraft carriers, and the New York skyline and Williamsburg Bridge in the distance. Based on his time there, Miller wrote a short story in 1966, “Fitter’s Night,” about a man whose goal is to avoid work in the busy yard, but who ends up being a hero. “The shipfitter’s helper,” Miller wrote, “the burner, the chipper, the welder, painters, carpenters, riggers, drillers, electricians — hundreds of them might spend the first hour of each shift asking one stranger after another where he was supposed to report.” Image Montero, a longshoremen’s hangout on Atlantic Avenue. Credit Emon Hassan for The New York Times “Someone must know what was supposed to be happening,” Miller wrote, “if only because damaged ships did limp in under tow from the various oceans and after days, weeks, or sometimes months they did sail out under Brooklyn Bridge, ready once again to fight the enemy.” These days, the Navy Yard is an industrial park, with artisans and manufacturers occupying the original buildings. Though it is not nearly as crowded, Miller would recognize its warehouses and dry docks. In 1944, he moved to a wood-paneled duplex at 102 Pierrepont Street, where, coincidentally, Norman Mailer’s parents lived. Whenever he was home from war, Mailer lived upstairs. One day, Mailer approached Miller and said he had seen “All My Sons.” The play, his first Broadway hit, was about a factory owner accused of making faulty parts for wartime planes. “I could write a play like that,” Mailer bragged. Miller just laughed. After some financial success with the play, Miller, by then the father of two children, Jane and Robert, bought a four-story brownstone at 31 Grace Court in 1947. The Millers rented out the bottom two floors to the president of the Brooklyn Savings Bank. “Death of a Salesman,” which traces the last day in the failed life of an aging, regretful man, was conceived and finished on Grace Court, though the first draft was written in the family’s new country house in Roxbury, Conn., in a studio Miller built himself. While living on Grace Court, Miller took long walks over the Brooklyn Bridge and under it, to the working docks where he noticed graffiti that said, “Dove Pete Panto,” Italian for “Where Is Pete Panto?” “It was down near the piers that this mysterious question covered every surface,” he wrote in “Timebends,” adding, “it was not hard to guess that it was still more evidence of the other world that existed at the foot of peaceful, old-fashioned Brooklyn Heights, the sinister waterfront world of gangster-ridden unions, assassinations, beatings, bodies thrown into the lovely bay at night.” Image Miller, his first wife, Mary, and their daughter, Jane, pictured in a 1947 magazine article, from “Arthur Miller: His Life and Work” (2003). Credit “Arthur Miller - His Life and Work” by Martin Gottfried. Mr. Panto had been battling the International Longshoremen’s Association, and disappeared, his body eventually turning up in New Jersey. Miller read about Mr. Panto’s case in the press and tried talking to the longies, or longshoremen, on Columbia Street in Red Hook to write a screenplay. “He tried asking questions but people thought he was a company spy or some kind of cop,” Nathan Ward, author of “Dark Harbor: The War for the New York Waterfront.” said in an interview this month. With help from a local lawyer, Vincent Longhi, Miller got to know some of the longshoremen, visiting their watering holes and eventually their apartments. The only longie bars still standing are Montero, on Atlantic Avenue , and Sunny’s, on Conover Street. The bordello, the red building that some sailors would visit as soon as they stepped off their ships, still stands at the foot of DeGraw Street, not far from the cranes and modern, containerized port and marine terminals. Back then, foremen would organize the shape-ups near each pier and choose who would work that day. America ended, Miller wrote, on Columbia Street. “There were certain clothing stores and barbershops, even places to buy grapes for winemaking, even if you weren’t making wine, where you were ‘encouraged’ to go by the union,” said Mr. Ward, describing the union’s power over the workers. Before Mr. Longhi died in 2006, he told Mr. Ward about a trip to southern Italy he and Miller took in 1948. Mr. Longhi told Miller about the two illegal immigrants who became characters in “A View From the Bridge,” the story of a longshoreman’s taboo love for his niece. Mr. Longhi himself was the model for the narrator in the play. From his waterfront research, Miller wrote “The Hook,” a screenplay based on Mr. Panto’s life, which he pitched in Hollywood with Elia Kazan in 1951. The screenplay was never produced, but he met Marilyn Monroe on that trip west. Image Miller with his second wife, Marilyn Monroe, in 1956. Credit Carl T. Gossett Jr./The New York Times That same year, Miller, tired of being a landlord, sold the Grace Court house to W.E.B. Dubois. He moved with his family to their final home together at 155 Willow Street, a Federal-style, red brick house two blocks from where Truman Capote would soon live. Among the oldest in the neighborhood, the house was built in the 1820s. In his top-floor office, Miller wrote “The Crucible” and an early version of “A View From the Bridge.” Trying to be a good husband, and guilty about his feelings for Monroe, Miller installed kitchen cabinets and a tile floor in the hallway. According to Miller, the marriage was already floundering when he met Monroe. He moved from Brooklyn to Manhattan in 1955, where he spent time in a West Side brownstone and in Monroe’s Waldorf Tower apartment. They eventually moved to a house in Roxbury. In the spring of 1956, he briefly took up residence in Nevada, divorced his wife and promptly married Monroe. Their marriage lasted five turbulent years, during which he wrote the screenplay for the film “The Misfits” for her. Miller remained close to his children, who continued to live on Willow Street with their mother. After he married Monroe, Miller took her to meet his parents in the house where he had grown up. His sister remembers the neighborhood children climbing on one another’s shoulders to peek through the windows for a look. “My mother would open the window and yell at them to go away,” Ms. Copeland said. The Willow Street house is still owned by the family who bought it in 1982 from Miller’s first wife, who moved to nearby Monroe Place. On a recent visit, the owner offered a tour of the first floor, with its graceful archway in the entrance hall, and its black marble fireplaces in both the living room and dining room. The house, with its maid’s quarters and strip kitchen, had undergone a major renovation. Though Miller moved out of New York and lived in Roxbury for the rest of his life, his work and characters still have that accent that can be found only in Brooklyn, along with particulars of the borough: the Brooklyn Paramount, the bowling alley on Flatbush Avenue, St. Agnes Church and Red Hook, “the gullet of New York.” The actor Brian Dennehy first met Miller in Brooklyn in 1988 while performing in a production of Chekhov’s “The Cherry Orchard” at the Brooklyn Academy of Music with Miller’s daughter Rebecca (the child from his third marriage, to the photographer Inge Morath). Miller and Mr. Dennehy, who played Willy Loman in “Death of a Salesman” a decade later, hung out in bars together, though Miller wasn’t a heavy drinker. “He was a very serious man,” Mr. Dennehy said. But he loved to laugh and tell stories, and he told them “in a real Brooklyn accent,” Mr. Dennehy recalled, noting: “It was a very sophisticated version of the accent. He used big words. But the accent was still there.” Gregory Mosher, who directed a Broadway production of “A View From the Bridge” starring Liev Schreiber and Scarlett Johansson five years ago and is the director of the centennial reading on Monday, said that when we see Brooklyn, we see Miller. “Brooklyn is Miller’s waterfront, or the Loman house being dwarfed by new buildings, and that little garden he’s planting,” Mr. Mosher said. “He made us see a place differently, and that’s a trick not many artists can pull off.”


Do You Know the Way to Wuliangye?

Abstract: BEIJING — Feel comfortable flying into Johnnie Walker Airport? How about Wild Turkey International? That’s more or less what awaits travelers to two new airports in China , which local governments want to name after the country’s most celebrated liquors, Maotai and Wuliangye. It’s probably safe to say that, around the world, passengers, pilots and the aviation authorities would prefer flying to be associated with sobriety rather than drunkenness. So news that officials in the southwestern province of Sichuan want to name two airports for the liquor brands, which are headquartered in their cities, is provoking serious debate in China — and hilarity. Officials in Yibin, a city of 4.5 million, announced last week that they would name their new airport after the blindingly strong Wuliangye. Near the city of Renhuai, a foundation stone has already been laid for Maotai Airport, The Dongfang Daily has reported. Chinese spirits are eye-watering stuff. Wuliangye 68% is a 136-proof five-grain liquor, though most of the company’s products are around 108 proof. That’s still more than four times the strength of an average red wine. The sorghum-based spirits produced by Kweichow Moutai, known as maotai, are similarly strong. “Is it appropriate to name airports after famous liquors?” asked a stern editorial in Beijing News last Friday. Definitely not, the newspaper decided. “From an economic development point of view, it’s understandable if Yibin and Renhuai in Sichuan need new airports. But calling the new airports ‘Wuliangye’ and ‘Maotai’ is hard for the public to accept, as it clashes with people’s habits, culture and values,” said the editorial. Worse, “using famous liquors to name airports not only carries the suspicion of ‘bad habits’ on a cultural level,” it is also worrying if a major public facility like an airport is used to advertise a company, the editorial said. China’s indefatigable netizens quickly got to work lampooning the idea. With dozens of new airports planned around the country, why not just name them all after the hometown beverages? Qingdao, the port city that produces Tsingtao Beer, could have a “Tsingtao Beer Airport.” Beijing could build a “Red Star Erguotou Airport” after its local distillery, netizens riffed, naming half a dozen more examples. Indeed, Beijing is planning to start construction this year on what would be the world’s biggest airport, with nine runways and an annual passenger capacity of 130 million. Construction is estimated to finish in 2017 — no word on its name yet, however. “Reveling in the scent of alcohol rushing into our noses, we won’t worry about flight delays any longer,” the newspaper reported one netizen as saying, sarcastically. At a news conference in Yibin last week, officials refused to say if, or how much, Wuliangye Group had paid for the naming privilege. The company couldn’t be reached for comment, The Daily reported. Beijing News was not amused. “Of course well-known companies want things to be named after them, but local governments should be ensuring market fairness and dealing with all companies in the same way, not using public facilities to favor one company,” it wrote. Zhang Qihuai, a professor and aviation law expert at China University of Political Science and Law in Beijing, said the move violated both civil aviation regulations and customs. Airports should be named for their location, whether a city, county or other place, he told The Daily. Making the proposed names even more controversial, in recent years the two spirits — both considered luxury brands in China — have become identified with corruption among government officials and businesspeople, serving as a favorite gift as well as an aid to sealing deals at highly alcoholic banquets. “The practice of giving government officials gifts — by other government officials and, more commonly, by private businesspeople — is so widespread that luxury goods producers have come to count on it as an increasingly important revenue source,” Xinhua, the state news agency, reported in March. Partly as a result of the gift-giving, profits at the two liquor companies are soaring. In 2011, Kweichow Moutai reported a net profit of 8.76 billion renminbi, or $1.38 billion, up 73 percent over the previous year. Wuliangye Group saw its profit climb 40 percent to 6.16 billion renminbi, the state-run Global Times reported, though it predicted demand would start slowing along with the economy this year. In March, Prime Minister Wen Jiabao called on officials to stop spending public money on “high-end” liquors, among other luxury products. Mr. Wen’s comments caused an immediate 6.4 percent drop in the value of Moutai shares on the Shanghai Stock Exchange, and a 6.5 percent fall in Wuliangye on the Shenzhen exchange, Bloomberg News reported. The shares have since rebounded. Growth continued undaunted in the first quarter of 2012, with Wuliangye recording net profit growth of 46 percent and Kweichow Moutai growing 57.6 percent, Global Times reported. No matter how rich the companies behind the names, if Yibin officials insist on naming their airport Wuliangye, they must apply for permission to change the rules governing the naming of airports in China, warned Mr. Zhang, the aviation law expert. These, he told The Daily, are based on a simple but important idea — navigation. “When you’re flying,” he asked, “how do you fly to Wuliangye?”

Liquor
Aviation Accidents and Safety
Airports
China
Beijing (China)
Sichuan Province (China)


Test for Tomic After a Year of Tumult

Abstract: MELBOURNE — Despite Bernard Tomic’s impish reminder, Roger Federer did indeed manage to make it to the third round of another Australian Open. Tomic, Australia’s big talent with a mouth that is almost a match, will now get his fourth chance to play the game’s grand master, fully aware that the first three attempts did not work out too well. “He was too good for me last year,” the unseeded Tomic said after first using a more colorful expression to describe what Federer did to him last year. After winning a set in his first loss to Federer in the 2011 Davis Cup series between Australia and Switzerland, Tomic did not win a set in his two defeats in 2012: losing in the fourth round of the Australian Open and then in the Round of 16 in Cincinnati. But then 2012 was a year of regression for Tomic. He left Australians and others wondering whether he had the right stuff to live up to his top 10 potential. The low point (for now) came in December when Australia’s Davis Cup captain Patrick Rafter, who never had much time for divas during his playing career, announced that Tomic had been suspended for the Australian team’s first Davis Cup match in February against Taiwan. Tomic’s financial support from Tennis Australia, the sport’s governing body, was also cut. The reasons ranged from questionable efforts on the court and in the Australian team room to misbehavior off the court, which included an alleged rooftop brawl in the Queensland resort of Surfers Paradise to disputes with the police over traffic violations while driving his sports car. “You’ve got to try to do everything you can to educate people first before you get to this decision, and we had gone through everything we could possibly think of to help that scenario,” said Todd Woodbridge, the former Australian star who is now head of professional tennis for Tennis Australia. “Then it was, ‘O.K., this is it. This is what’s left. We’re at rock bottom and now you’ve got to turn it around.”’ For Woodbridge, the suspension was a necessary wakeup call for Tomic, 20, long coached by his father John. “Part of it was him being a young kid and enjoying some freedom for the first time, being a young bull who has got his father who has been a strong figure and is almost going head-to-head with his father,” Woodbridge said. “He was not really wanting to take direction from anybody, whether it be his dad, Pat, Tennis Australia or the police. That’s four fairly strong figures in this world and he was struggling to take any advice from any of them.” The tough-love approach appears to have had an impact on Tomic’s tennis, even if he has yet to concede the point. It is early — very early — in the season, but Tomic has now won 10 straight matches. He beat the top-ranked Novak Djokovic at the Hopman Cup team competition in Perth, Australia, which is not quite the same as beating Djokovic in Melbourne. Tomic then won his first tour title in Sydney last week and has reached the third round at the Australian Open after rallying to defeat Daniel Brands of Germany, 6-7 (4), 7-5, 7-6 (3), 7-6 (8), in searing heat Thursday. Brands, a qualifier ranked 120th, served under pressure like someone with a higher profile. “I thought Roddick retired,” Tomic cracked. Andy Roddick did indeed retire in September. In his place, Brands hit 23 aces and managed to fight off seven match points in the fourth set before Tomic finally earned himself some shade on a day when temperatures peaked at 40 degrees Celsius (104 degrees Fahrenheit) at Melbourne Park. Those gathered in the shade were most interested in talking about Federer, the 17-time Grand Slam champion who later Thursday defeated Nikolay Davydenko, 6-3, 6-4, 6-4. Speaking of the potential third-round matchup before the tournaments, Tomic reminded his audience that Federer had to get there first. Well here he is. “What a match it is,” Tomic said. “I feel so confident. This is the perfect time to play him. I think, you know, I’ve got a good attitude to win. I’ve beaten a lot of good players over the last two weeks, especially Novak. I think I can do it.” Federer, 31, has shown no signs of weakness in here. After playing exhibition matches in South America in December, he chose to skip his typical Australian Open warm-up tournaments and begin his season with the main event. He has yet to drop a set or his serve in two matches and looked like his typical, swooping self on Thursday night with the exception of his fluorescent pink shoelaces. “I like to play around with colors,” Federer explained before explaining his thoughts on Tomic. “I guess he’s learned a lot in the last year,” Federer said. “It’s been a year of a younger player on tour. I went through the same sort of thing you know, ups and downs, playing on the big courts, playing on the smaller courts, playing against all the different opponents for the first time. So it’s tricky. It’s nice he’s been able to turn it around after a tough end of the year last year.” Federer also senses that Tomic likes the big stage, which must come as a relief to Australians who are used to their best women’s player — Samantha Stosur — crumbling under the burden of home-country expectations. Tomic is clearly a less fragile character, one who is resisting for now, calls from Australian tennis officials to hire a former champion as an adviser or coach in imitation of Andy Murray’s decision to hire Ivan Lendl last year. Though Tomic may not be an administrator’s dream, his style of play is a different matter. His game remains a connoisseur’s treat, full of guile and slice; of abrupt changes of rhythm and strokes that look more artisanal than manufactured. Like Federer, he has the precious ability to hold the ball on his strings just a bit longer than usual before committing to a shot, which can leave opponents leaning the wrong way and shaking their heads. If the match on Thursday was a construction site, Brands was the jackhammer operator and Tomic the architect. Tomic’s languid style has certainly contributed to the impression that he sometimes does not try his best, because even on days like Thursday, when you can be certain he is fully engaged, there is a recreational quality to his tennis: a loose-limbed playfulness that is quite a contrast with the typical fare in this era of earnest, explosive baseline rallies. “I think if you look back, guys like Miloslav Mecir played like him in a different era,” Woodbridge said of Tomic. “But I love the fact of the way he plays because it’s contrast. And I’ve so missed contrast in this game, to have somebody play shots and mix it up and create points. That’s the thing I’ve enjoyed. But in Sydney, he also played a couple matches where he played a truly professional match. He played his variety, but when the right ball came, he dispatched it. He didn’t toy around and play cat and mouse or try to be smart. He just played the level of tennis that can dispatch a good player 6-3, 6-3 and move on to the next round.” But to move on Saturday, Tomic will have to beat a great player, one who has not lost before the quarterfinals of a Grand Slam tournament since 2004.

Tennis
Australian Open
Melbourne
Roger Federer
Bernard Tomic


Carl Pavano Comes to Terms With Painful Miscalculations

Abstract: SEATTLE — The scar still looks fresh, 15 months later, on the inside of Carl Pavano’s right elbow. Usually, after Tommy John surgery, it settles into a flesh-colored zipper, visible but not so obvious. Pavano’s wound is darker, surrounded by blisters caused by swelling after the operation. The appearance now is clinically meaningless, and Pavano is actually progressing quite well. The Yankees have won each of his three starts since he came off the disabled list — at last — on Aug. 23. But as a symbol, it is telling. As he comes to the end of his four-year, $39.95 million contract, Pavano is thrilled to be a pitcher and not a patient. But he also has wounds from a bitter comeback trail that are hard for him to forget. “A lot of times when I was in Tampa, I was really angry, because I’m away from my team, and I’m down there not getting the support that you feel you need to be successful,” Pavano said. “You know people are doubting you that should be helping you,” he added. “You know people are kicking you when you’re down, and they should be picking you up. That’s the nature of this environment.” Pavano said he was bruised by the belief among fans, reporters and some teammates that he was not dedicated to his craft. When he reflects on four lost seasons, he said he thought it could have been different if the Yankees’ team doctor, Stuart Hershon, had recommended reconstructive elbow surgery sooner. Hershon, like other Yankees doctors, is not permitted to speak with the news media. Pavano shares some of the blame. He said he should have reported his back problems early in the 2005 season, when he made 17 starts through the end of June. Those issues brought about everything else, he says. “I wish I had been smart enough to just get it right,” Pavano said. “Say something, make sure something was taken care of, instead of just keeping pitching and thinking it was going to get better.” A daily massage at his apartment helped for a while, Pavano said, but pitching with back pain affected his arm. He went on the disabled list that July, and the Yankees announced that he had right shoulder tendinitis. He made two rehabilitation starts after a month of rest and was re-evaluated by Hershon and Dr. James Andrews, whom Pavano had known and trusted for years. The new diagnosis was rotator cuff tendinitis and associated pain in the humerus. “When they reported I had rotator cuff tendinitis, I actually had a stress fracture in my humerus bone,” Pavano said. “It wasn’t rotator cuff tendinitis. It was just misdiagnosed until I got to Dr. Andrews.” The back pain flared up again the next spring, and it worsened when Pavano tumbled on a fielding play in his only exhibition appearance. The Yankees called it a bruised buttocks, a term they regretted because it came to highlight the absurdity of Pavano’s woes. Officially, he was still out with shoulder tendinitis. By May, Pavano was back on a minor league mound, but he left a start for Class AA Trenton with elbow discomfort. This, Pavano said, was a pivotal point. Six years earlier, when Pavano pitched for Montreal, Andrews had removed bone chips from his elbow. He did it again in May 2006, removing a chip the size of a marble. (Pavano kept it as a souvenir, he said, until it turned to mold and dust.) The procedure was a temporary fix. It helped for a while, but when Pavano broke his ribs in a car accident that August, he aggravated the elbow by trying to keep pitching without telling the Yankees about the injury. In hindsight, Pavano said, he could have had Tommy John surgery that summer, but the Yankees did not recommend it to Andrews. “I think I could have, but we’ll never know,” Pavano said. “He was told not to. He was told to take the bone chips out and rehab it.” Two starts into the 2007 season, the elbow pain returned, and Pavano insisted on major surgery as the only way to heal everything. It took four doctors — Hershon, Andrews, Lewis Yocum and David Altchek — to find one who agreed definitively. That was Altchek, the Mets’ team doctor. “They had to go through all that red tape; that’s why I had to go get all these opinions,” Pavano said. “It was crazy. And I had to walk around with my heart in my throat: ‘Are you serious? You’re messing with my career here.’ You think I wanted to have Tommy John surgery? But I knew I needed it and I knew I could come back from it. That’s why I was all for it.” Altchek told Pavano he had done everything he could to come back from the 2006 operation. His only choice was Tommy John surgery, in which a tendon from Pavano’s knee was used to replace an elbow ligament. It took place June 5, 2007, nearly two months after he had last pitched in a game. Pavano said he wished he had the operation sooner. “I would have been back seven weeks earlier this year,” Pavano said. “That would have been a considerable amount of time to help the team.” General Manager Brian Cashman said the fact that Pavano had bone chips in 2006 did not necessarily mean he should have had reconstructive surgery. “That doesn’t mean the ligament was gone yet,” Cashman said. “Bone chips usually mean there’s an unstable ligament, but that doesn’t mean you can’t pitch another 10 years without having Tommy John.” In any case, Cashman said, he does not blame Pavano for wondering what different steps he might have taken. If anybody can relate to Pavano’s frustration, it is Cashman, who championed his signing. “At the end of the day, he was hurt,” Cashman said. “People always say, ‘Why do you stick up for him? Is it because you signed him?’ I’m just being objective. The guy, I know, can pitch when he’s healthy. He just hasn’t been healthy. It’s not because he mentally wanted it that way. It just happened.” Now that he is back, there is little evidence of any hard feelings toward Pavano in the clubhouse. He laughs with teammates and has a spot in their fantasy football league. He is courteous with reporters. He trusts the pitching coach Dave Eiland, whose career ended when he came back too soon from Tommy John surgery. “I wasn’t healed; he’s healed,” Eiland said. “He’s in a little bit of a dead-arm period now, like guys go through in spring training. But as far as how he feels, and pain and that kind of stuff, that’s behind him. He’s still ahead of the curve.” Eiland has cut back Pavano’s work between starts, hoping to save his arm strength. Pavano has averaged five innings in his three games, but he knows he has been lucky at times. He tried to watch a replay of his second start, a six-inning victory, but turned it off after a few batters. “I was just horrendous,” Pavano said. Teammates recognize that his pitches are not as sharp as they will be, and they respect his approach. Pavano is challenging the hitters, and himself, with a fastball that has command but little pop. “Obviously, his stuff now is not that good, but he’s going out there and competing, he’s going after guys,” reliever Brian Bruney said. “There are guys with way better stuff than he has that don’t go after people like that. The guy’s got heart and he wants to win. I’ll take that any day.” Pavano will be a free agent after the season, and he could turn a decent September into a new contract with another team. He may succeed the way the Yankees hoped, just not for them. His time on the mound with the Yankees has been brief: he has made 22 starts, pitched 126 1/3 innings and compiled a 7-6 record. Cashman would not discuss Pavano’s future, and Pavano said he would not rule out a return. But mostly, he is thinking about simpler things. Pavano says he believes he will find a job for next season. Now he just wants peace of mind. “I haven’t gone into an off-season upbeat and feeling good about myself since I’ve been here,” he said. “I want an off-season where I know that when I pick up the ball, I’m going to feel good.”


With Updated Hubble Telescope, Reaching Farther Back in Time

Abstract: Astronaut repairmen had hardly finished tightening the last stubborn bolts on the Hubble Space Telescope last summer when astronomers set the controls on the refurbished telescope to the dim and distant past. The result was a new long-distance observing record. Astronomers announced in a series of papers over the fall and in a news conference last week that Hubble had recorded images of the earliest and most distant galaxies ever seen, blurry specks of light that burned brightly only 600 million to 800 million years after the Big Bang. The specks are clouds only one-twentieth the size of the Milky Way galaxy and only 1 percent of its mass, and seem to show the lingering effects of the first generation of stars to form in the universe in that they get bluer the farther back you go in time. The new galaxies, along with other recent discoveries like the violent supernova explosion of a star only 620 million years after the Big Bang, take astronomers deep into a period of cosmic history known as the dark ages, which has been little explored. It was then that stars and galaxies were starting to light up vigorously in larger and larger numbers and that a fog of hydrogen that had enveloped space after the Big Bang fires had cooled mysteriously dissipated. “These are the seeds of the great galaxies of today,” said Garth Illingworth of the University of California, Santa Cruz, who discussed the new galaxies last week at a meeting of the American Astronomical Society in Washington. “We are pushing Hubble to the limit to find these objects.” Richard Ellis of the California Institute of Technology, one of many astronomers who have been working with the observations, said, “We’re reaching the beginning where galaxies formed for the first time.” Dr. Illingworth and his colleague Richard Bouwens led a team that used Hubble’s new Wide Field Camera 3 , which was installed by the astronauts in May, to stare at a small patch of the southern sky over 62 orbits in what they call the Hubble Ultra Deep Field. The patch, known as the southern GOODS field, for Great Observatories Origins Deep Survey, has been observed by a variety of telescopes and satellites, including Hubble in 2004. The release of Dr. Illingworth’s observations in the fall led to a kind of gold rush in astronomy. In the last three months, several teams, using different ways to analyze the data, have produced 15 papers and articles about the new galaxies. Dr. Illingworth said in an interview that his team had identified 21 galaxies from 600 million to 800 million years after the Big Bang, and that other groups had found similar numbers. The most distant, he said, was about 600 million years after the Big Bang. The universe is about 13.7 billion years old, cosmologists agree, meaning that the light from these galaxies has been on its way to us for 13 billion years. In addition, some of the groups say they have identified possible galaxies as far back as 480 million years after the Big Bang, but they disagree on how many and which ones they are. The new wide-field camera has an infrared capability, which makes it well suited for probing the early universe. As the universe expands, objects farther away from us go away faster, shifting their light to longer, redder wavelengths. The most distant galaxies appear to be emitting almost all of their light at even longer wavelengths, as invisible infrared, or heat, radiation. Indeed, the James Webb Space Telescope , being built for a 2014 launch to explore the very earliest years of creation, will be an entirely infrared telescope. The galaxies are too far away and faint to be studied spectroscopically by even the largest telescopes on Earth, but by comparing their brightnesses in different infrared wavelength bands with optical images recorded by Hubble in 2004, astronomers could estimate how reddened the galaxies were. Some that showed up in the infrared images did not even appear in visible light. Unlike the graceful spirals and grandly round ellipticals that populate today’s universe, these baby galaxies are dumpy and irregular. Another clue that astronomers are getting close to the start of time is the blueness of the new Hubble galaxies when the effects of cosmic expansion are taken into account. According to theoretical models, the first stars were born about 200 million years after the Big Bang, and consisted solely of hydrogen and helium. Lacking the elements to make dust, which reddens starlight, these stars would be bluer than those today. The colors of these galaxies, Dr. Illingworth said, suggested the presence of stars born only 300 million years after the Big Bang. The new galaxies continue a recent trend in which the farther into the past astronomers look, the fewer and fainter and smaller galaxies they find, suggesting that the first billion years of history was a time in which galaxies and stars were rapidly increasing in number. The universe reached a peak in the birth rate of stars about 10 billion years ago, when it was a third of its present age. Astronomers still do not know, however, if they will find enough galaxies and stars in that epoch when the universe was only half a billion years old to have burned off the hydrogen fog. That process is technically known as reionization, in which electrons are stripped from the hydrogen nuclei, making intergalactic space transparent. More evidence that galaxies and massive stars were already going strong a few hundred million years after the Big Bang came last spring when NASA’s Swift satellite detected gamma rays from an exploding star that was traced to a galaxy only 625 million years from the Big Bang. Nial Tanvir of the University of Leicester and his colleagues called that blast “a glimpse of the end of the dark ages,” suggesting that similar gamma ray bursts from that era could be used to measure the rate of star formation back then and figure out if stars were enough to reionize the universe. Dr. Ellis said, “It does look as if galaxies could do the trick of causing reionization.” It could be that the new Hubble galaxies were just the tip of the iceberg and that many more galaxies are lurking just below the threshold of detection. “The new camera,” he said, “has revealed a bunch of little glowworms. The James Webb telescope will see the sky blazing with them.”

Hubble Space Telescope
Space
Stars and Galaxies
Astronomy and Astrophysics
Telescopes and Observatories


Explosions Kill 10 in Kenya as Western Embassies Warn of Threats

Abstract: NAIROBI, Kenya — Twin explosions hit a market area in downtown Nairobi on Friday afternoon, killing 10 people and injuring 76 others, officials said, adding to a series of deadly attacks in the country in recent months. The blasts came after a number of Western embassies had issued advisories against travel to Kenya because of fears of such attacks. British authorities were in the process of evacuating hundreds of tourists from the costal town of Mombasa even before the explosions in Nairobi took place on Friday. Image A crowd gathers in Nairobi where twin explosions claimed lives. Credit Tony Karumba/Agence France-Presse — Getty Images The authorities said that two explosive devices went off at 2:30 p.m., one in a minibus, and the other in the market nearby. Two suspects have been arrested and are being investigated, officials said. No group has claimed responsibility, but the authorities have attributed other attacks in recent months to a Somali extremist group, the Shabab. In response to the attacks, Kenyan authorities have undertaken a broad enforcement campaign, interrogating and arresting thousands of immigrants, refugees and members of Kenya’s large Somali community. Human rights groups have criticized the campaign as abusive and discriminatory, while Kenyan authorities have called it a legal reaction to what they call a recent escalation in terrorist activity in the nation. Officials immediately condemned the latest attack. “Many countries are faced with terrorism; it’s not a purely Kenyan issue,” President Uhuru Kenyatta told the nation address. “We must therefore unite to combat terror.” Image The scene of a twin explosion at the Gikomba open-air market in Nairobi on Friday. Credit Thomas Mukoya/Reuters Dozens of relatives of injured people gathered outside the Kenyatta National Hospital waiting for news about their loved ones. “We are told that he is not well,” Jonathan Kandu, 40, said of an uncle who was taken to the hospital. “We feel we are not secure at all.” Thomson and First Choice, a tour operator with many of its clients in Kenya, said the latest warnings of an enhanced threat had prompted it to cancel all its flights to Mombasa until Oct. 31 and “to repatriate all customers currently on holiday in Kenya back to the U.K.”

Nairobi
Bombs
State Department
Great Britain
Kenya
Al Shabab


Antidoping Agencies Wait as Lance Armstrong Decides Next Move

Abstract: The long wait for Lance Armstrong to admit his doping and deceit ended last week when he came clean, at least partly, in an interview with Oprah Winfrey. Now he is back in Hawaii with his family, without credibility, and also without a job, a cancer foundation to represent or any foreseeable income that would come close to the millions he once earned from the sponsors that abandoned him last fall. So what is Armstrong’s next move? Antidoping officials are hoping he has one thing at the top of his to-do list: to knock on their doors. Travis Tygart, the chief executive of the United States Anti-Doping Agency, and David Howman, the director general of the World Anti-Doping Agency, are eager to see if Armstrong will come to them to testify under oath about his doping. They want to see if he is willing to provide details of how he doped and got away with it for so long. With Winfrey, Armstrong failed to delve into any of the details of his doping, leaving many important questions unanswered. He did not provide names of the people who helped him dope. He never explained how he so masterfully evaded testing positive for more than a decade. By giving that information to antidoping authorities, Armstrong could help improve a sport fighting to rid itself of a dark cloud of doping. It also could hasten his possible redemption, according to Steven Ungerleider, a psychologist who wrote a book about the East German doping machine and has been a consultant to the Olympic movement for more than 35 years. “I support Lance and I support his disclosures,” said Ungerleider, who has been in contact with Armstrong’s team of advisers. “But coming forward on ‘Oprah’ was just a very tiny baby step for him. He has to realize that he could leave a tremendous legacy if he were to meet with the WADA folks and assist them in cleaning up the sport by putting everything he knows on the table. “I know he probably doesn’t think so now, but he could really come out of this with a positive legacy that he could leave for his children.” Ungerleider said he did not expect Armstrong to come forward right away, though, because Armstrong is “dealing with enormous grief, anger and denial” that will take a while to work through. Armstrong said Saturday in an e-mail that he would spend some quiet time with his family before deciding his plans. It is “highly unlikely” that he will be speaking to the United States Anti-Doping Agency, he said, but “anything is possible.” It is more likely that he will come forward with details about his doping past to a truth and reconciliation commission. The purpose of that commission, which might be formed this year, would be to elicit truthful confessions from riders in exchange for lenient sanctions or no sanctions. In his interview with Winfrey, Armstrong said he could not be the man to push for that amnesty effort because he does not have credibility in the sport, but that he would be a willing participant. “If they have it, and I’m invited, I’ll be the first man at the door,” he said. Armstrong began speaking with Usada officials last month, when he met them in Denver to discuss how he could mitigate his lifetime ban from Olympic sports. His goal is to compete in triathlons and running events, but most of those are sanctioned by organizations that follow the World Anti-Doping Code, under which he is serving a lifetime ban. If he does help officials build cases against others, his ban could be reduced to eight years. “My hope is that deep down, he wants to help the sport, and that’s why he would come forward with information,” said Jonathan Vaughters, one of Armstrong’s former teammates who testified against Armstrong. “I don’t know precisely what information he has, but he could potentially help the testing methods improve,” he said. “But under oath, he would need to be very specific with names and dates and times. He can’t just say what he said to Oprah. He needs to give up much more.” Before Armstrong decides if he will speak with antidoping authorities, he will very likely have to deal with several pressing legal issues, including one involving the federal government. The Department of Justice is mulling whether to join a federal whistle-blower case in which Armstrong is named as a defendant. That lawsuit was filed by Floyd Landis, one of Armstrong’s former teammates, and claims that Armstrong and his associates defrauded the government by allowing doping on the United States Postal Service team when doping was explicitly forbidden in the sponsorship contract. Armstrong has offered $5 million to settle the case, but the government has asked for more, said a person with knowledge of the case who did not want his name used because the case was sealed. How that lawsuit turns out is just one of the many questions that looms over Armstrong. And how it will be answered is as uncertain as his days ahead.

Lance Armstrong
Doping
United States Anti Doping Agency
World Anti-Doping Agency
Road Cycling
Biking


Riding High, Biotech Firms Remain Wary

Abstract: SAN FRANCISCO — The biotechnology industry tends to be overshadowed by the razzle-dazzle of high-tech companies like Apple, Facebook and Google, particularly in the Bay Area. Now, though, the biotech business is experiencing an almost unprecedented boom of its own. Money is flowing into the industry as never before. Stock prices are high, and drug approvals are up. And perhaps most important, some of the new drugs represent major advances against diseases like cancer, hepatitis C and cystic fibrosis. Buoyed by the recent success, some executives and investors are making the bold assertion that the industry has turned a corner and that improved scientific insights and new techniques are allowing drug developers to reduce their notoriously high failure rate and to take on some illnesses for the first time. Others are skeptical, saying that the current boom is a bubble that will burst. That mix of exuberance and anxiety characterized the J. P. Morgan Healthcare Conference, the industry’s most closely watched investor event, for which 9,000 executives and investors squeezed into the Westin St. Francis hotel here last week, navigating congested hallways and overflowing rooms to hear presentations from 400 companies over four days. “It is an incredibly exciting time for our industry,” Robert J. Hugin , the chief executive of Celgene , one of the largest biotechnology companies, said in the first presentation at the meeting. He later added, “This is not hype and smoke and mirrors.” But some executives still worried that share prices would fall and the flow of funding would slow. “I have my seatbelt and crash helmet on,” said the chief executive of a biotech company whose stock has tripled in price since last spring. The executive spoke on the condition of anonymity because he did not want to affect his company’s stock price by commenting publicly on the state of the industry. Biotechnology stocks have outperformed the overall market for several years. Last year the Nasdaq Biotechnology Index rose 35 percent compared with 11 percent for the Standard & Poor’s 500-stock index. Over 110 companies in the industry went public last year, far more than in a typical year, raising a record $9 billion, according to BioCentury , an industry publication. The amounts raised in other stock and debt offerings were also at or near records. And the $5.97 billion invested by venture capitalists in private biotech companies in 2014 was up 29 percent from 2013 and about equal with the record set in 2007, according to PricewaterhouseCoopers and the National Venture Capital Association. One factor lifting stock prices is the frenzied pace at which small drug developers are being acquired by larger ones. That is in part spurred by the need for big pharmaceutical companies to replenish their pipelines as top-selling drugs go generic. The Food and Drug Administration also seems to be more willing to approve drugs, industry executives say, relaxing the ultra-cautious stance it took after the pain reliever Vioxx was removed from the market in 2004 for raising the risk of heart attacks. The F.D.A. approved 41 new drugs in 2014, the most since 1996. Image Robert Hugin, chief of Celgene. Investor excitement and scientific success fuel what Mr. Hugin calls “an incredibly exciting time for our industry.” Credit Mike Segar/Reuters But the increase in approvals also seems to reflect the industry’s success at developing effective drugs. New hepatitis C drugs from AbbVie and Gilead Sciences can cure most patients in 12 weeks. Drugs that help the body’s immune system attack cancer, two of which were approved last year, have generated tremendous excitement among oncologists. Executives say new techniques for analyzing and manipulating genes and cells are leading to more insights about biology and innovative approaches to treatment. “The science has never been better, and the pace of progress has never been faster,” said Jeffrey Leiden , the chief executive of Vertex Pharmaceuticals , which is selling the first drug that counteracts a genetic cause of cystic fibrosis. “I do think there has been a fundamental change.” But others counter that drug development remains difficult, because human biology is extremely complex and largely unfathomable. “I don’t think in any way that we have licked the problem,” said Dr. Roger M. Perlmutter , head of research and development at Merck . “Since we don’t know how the machine works, we don’t know what to do when it breaks.” Even if the science is improving, investors might still be bidding up stocks too much. “There are definitely areas and companies that seem to be ahead of themselves, for sure,” said Misha Petkevich, portfolio manager at V2M Capital. Exhibit A, according to several investors and analysts, is the so-called CAR-T therapy, in which a cancer patient’s immune system cells are genetically engineered to attack tumors. There have been some substantial successes in treating leukemia and lymphoma. But the technique is still early in development and can cause severe side effects. Juno Therapeutics , a leading start-up in the field, raised $300 million last month in the industry’s largest initial public offering in memory. It now has a market value of about $4.5 billion. Kite Pharma, another start-up that went public last year, has a valuation of over $3 billion. Not surprisingly, others are scrambling to get into the field. Last week, two companies working together agreed to pay the MD Anderson Cancer Center $100 million in stock for technology that can be used in such therapy. They paid an additional $15 million in stock to persuade the cancer center to sign the deal in time for it to be announced at the J.P. Morgan conference. Expensive as that was as a public relations strategy, it paid off, at least in the short run. Shares of one of the companies, Ziopharm Oncology , went up 55 percent on Wednesday, the day after the announcement was made. Shares of the other, Intrexon , rose 31 percent. A setback in the development of CAR-T or other promising therapies could rapidly change sentiment. But the factor investors say could most curb enthusiasm is the increasing pressure from health plans and politicians to rein in what critics say are the exorbitant prices of drugs. Image George Scangos, chief of Biogen. Credit Mike Segar/Reuters Biotech stocks took a hit last month when Express Scripts , the nation’s largest pharmacy benefit manager, said it would not pay for Gilead’s hepatitis C drugs for most patients — only for a competing medication from AbbVie, which provided a bigger discount. That has set off a sort of price war as Gilead and AbbVie vie for the favor of other payers. Express Scripts next hopes to force such a face-off between two powerful new drugs for lowering cholesterol, which are expected to reach the market this year. The last time the biotech industry was so flush was around 2000, when companies promised, and investors believed, that genomics, particularly knowing the human DNA sequence, would revolutionize drug discovery. “We looked back at the slides we used in the I.P.O. — they are embarrassing,” said George A. Scangos , who ran Exelixis, a company that went public in 2000 based on the promise of its genomics technology. Stock prices eventually collapsed when genomics did not yield the promised bonanza. Some life science venture capitalists had such low returns that they effectively had to close up shop a few years ago. Exelixis laid off 70 percent of its staff last year after its best hope, a drug for prostate cancer, failed in a clinical trial. Mr. Scangos had moved on by then to run Biogen Idec , one of the industry’s most successful companies. This time, he said, is different, in that “a lot of the enthusiasm is based on substance” from clinical trials of drugs. Some of the industry’s seemingly sudden successes stem from years of research behind the scenes. One example is gene therapy, which involves replacing defective genes in the body with healthy ones. Early trials were unsuccessful, and the field was dealt a severe setback in 1999, when a teenager died in a gene therapy test being conducted by a leading researcher, Dr. James M. Wilson of the University of Pennsylvania. But techniques have improved, and there have been successes in various trials. So gene therapy has gone from pariah to rock star. The stock price of Bluebird Bio , whose experimental gene therapy for beta thalassemia appears to have freed a few patients from the need for blood transfusions, quadrupled in 2014. At least four gene therapy companies went public last year. Even Dr. Wilson was in San Francisco last week, talking to investors about a new gene therapy company he helped start, RegenXBio . “I would never have predicted what’s happened in the last 18 months,” Dr. Wilson said. Still, he said, investors and companies were underestimating the challenges. “We’re in a bubble, and gene therapy is at the center of it,” he said. “One learns humility. That’s what I learned.”

Biotech,Bioengineering
Pharmaceuticals
Stocks,Bonds
JPMorgan Chase
FDA
Vertex Pharmaceuticals
ZIOPHARM Oncology
Intrexon
Biogen Idec
bluebird bio