Fugitive’s Threats Against Police Drew Enormous Response

Abstract: LOS ANGELES — Christopher J. Dorner had a long list of grievances and potential victims, most of them police officers he had once worked with, and he was already suspected of killing the daughter of a retired police official and her fiancé. So law enforcement officials moved rapidly to protect their own, removing officers from the streets and setting up the largest security detail in any city in recent history. “I’ve not seen anything like this in my time anywhere,” said William J. Bratton, a former police chief in Los Angeles and former police commissioner in New York. “The threats being made against families, the actual commission of murder, that is a line that is not crossed in America. The department had to create a plan of historic proportions.” Some 50 police department officials each had as many as eight plainclothes officers assigned to protect them and their families by patrolling their neighborhoods — an unprecedented level of protection for such a large group of officers. The focus meant that hundreds of officers were taken off regular duties, leaving some nonemergency calls to go unanswered. And the presence of plainclothes officers transformed life in dozens of suburban neighborhoods, as the police stood guard on porches with shotguns and used dogs to sniff for bombs in backyards. Most of the officers stayed off the street, forgoing their normal work to protect themselves. Some had their children stay home from school, and several went out of state. In all, as many as 500 officers — roughly 5 percent of the entire Los Angeles Police Department — spent the last week focusing on protecting one another from Mr. Dorner, a former police officer and Navy reservist. Law enforcement officials said Wednesday that they believed that Mr. Dorner died the day before as he barricaded himself in a cabin in the San Bernardino Mountains. Image Police officers searched for Christopher J. Dorner on Tuesday at a checkpoint in Yucaipa, Calif. Credit Patrick T. Fallon for The New York Times “We believe the investigation is over at this point,” Sheriff John McMahon of San Bernardino County said at a news conference on Wednesday. Still, more than a dozen officers will remain under protection until the body is officially identified, a process that could take days, perhaps weeks. “We don’t just stop a murder case simply because we think the suspect in that case is no longer with us,” Lt. Andy Neiman of the Los Angeles police said Wednesday. Los Angeles officials would not comment on the details of the security force, for fear that it would compromise security. But interviews with several police officers, neighbors and crime experts suggest the vast scale of the undertaking and how seriously the city took the threats from Mr. Dorner, who was believed to be heavily armed. Mr. Dorner’s training and knowledge made the search even more complex, officials said. The police believe that Mr. Dorner, who was fired from the force in 2008, not only was listening to news media reports, but also would have known the right frequencies on the police radio. Image The condominium in Big Bear Lake, Calif., where Christopher J. Dorner allegedly hid. Credit Monica Almeida/The New York Times Patrol officers were pulled from regular duties like securing murder scenes, or from simply monitoring their regular areas, to provide extra officers for the security detail. In several cases, plainclothes officers were sent to crime scenes to protect the area because detectives in uniform feared being targets. The police believed that their marked cars would be targets themselves; Mr. Dorner is accused of shooting two Riverside police officers who were sitting at a red light last Thursday, as he continued to elude the authorities. One of the officers was killed, the other wounded. Hundreds of officers were put on overtime as they were asked to cover extra shifts. Officials say it is too early to measure the costs of the security precautions, but Mayor Antonio Villaraigosa estimated it would be around $2 million. “I told the chief to spare no expense,” Mr. Villaraigosa said in an interview Wednesday. Over the last week, the mayor spoke to nearly all of the officers who were under protection, and he said many of them felt “terrorized by this individual.” “Every one of us would put our body in front of our kids if we feared something would happen to them,” he said. “These people go into the line of fire every day, but they do not expect concrete danger for their families.” The department may have been forced to move officers from administrative desk jobs to the street, said Chuck Wexler, the executive director of the Police Executive Research Forum . The practice is routine for visits by heads of state, for example, but is otherwise rare. Image Mr. Dorner was the focus of the largest manhunt in Los Angeles Police Department history. Credit Irvine Police Department “This is about as traumatic an event as you can think of for a police department, when you have a former police officer looking to kill other police officers,” Mr. Wexler said. “They’re going to put anyone they can on it — everyone is vulnerable.” While officers who focus on gangs and organized crime are often threatened, Mr. Bratton said, it is unusual for such threats to be carried out and rarer still for family members to be targeted. On Tuesday, Mr. Dorner seemed to make it clear that he was focusing on those connected to law enforcement; he apparently did not harm the maids who entered the apartment he had been hiding in near Big Bear Lake, or the man whose truck he stole while trying make his getaway. Last week, after the police concluded that Mr. Dorner seemed to be hunting officers, they began to flood the neighborhoods of the assumed targets. There were patrol cars at nearly every intersection of the Long Beach neighborhood of Theresa Evans, Mr. Dorner’s former supervising officer who disciplined him and whom he later accused of kicking a mentally ill suspect. “We were sitting here, and all of a sudden 11 squad cars showed up all over the area,” said Arthur Chadbourne, a neighbor. “They blocked off the whole area. They hit every cross street, every exit. We had no idea what was going on.” In some cases, neighbors did not even know they had a police officer living among them until the plainclothes security detail showed up, many of its members wielding shotguns . While other law enforcement officials have said officers were understandably on edge, the Police Department has come under criticism for an episode last week in which officers shot two women in a pickup truck that they believed matched the description of Mr. Dorner’s vehicle. The tight security continued on Wednesday, even as the police believed Mr. Dorner had been killed the night before. At the funeral for Michael Crain, the Riverside Police officer Mr. Dorner is suspected of shooting last week, there were scores of police officers from as far away as San Diego and Las Vegas.

Christopher Jordan Dorner
Los Angeles Police Department
Fugitive
Attacks on Police
San Bernardino County CA
Murders
Los Angeles


Easy Money Isn’t That Easy

Abstract: GUY KAWASAKI, venture capitalist and business pundit, posited that it’s “easy” to become an Internet millionaire, as long as you have a good idea. You don’t even have to work hard: a couple of hours a day in your underwear should be enough. Mr. Kawasaki was host of a panel discussion June 14 at the Churchill Club, the Silicon Valley public affairs forum, titled “No Plan, No Capital, No Model ... No Problem: Companies That Defied What V.C.’s Will Tell You.” Video and audio of the event are available on Mr. Kawasaki’s blog, How to Change the World ( blog.guykawasaki.com ). Mr. Kawasaki said there were two “pivotal moments” in his professional life. The first was meeting Steve Jobs and seeing Apple’s Macintosh computer for the first time. The second was “hearing James Hong explain the model for Hot or Not.” Users of Hot or Not ( hotornot.com ), introduced seven years ago, look at pictures of people and vote on how attractive they are. It was, Mr. Hong told the group, “a joke of an idea.” But when people thronged to the site, he realized he had a business. And it has made him and his partner, Jim Young, rich. Mr. Kawasaki said his “hero” is Markus Frind, founder of PlentyofFish.com , a free dating site. “And by the way, he makes $5 million, $6 million a year with Google ads.” But is it really so easy? Maybe sometimes, says Glenn Kelman, the chief executive of Redfin , the online real estate broker, but it shouldn’t be. “Hard has gone out of fashion,” Mr. Kelman wrote on Mr. Kawasaki’s blog. “Does anybody remember the old video of Steve Jobs launching the Mac? He had tears in his eyes.” (The video is on YouTube .) Mr. Jobs wasn’t choking back tears just because of his success, Mr. Kelman wrote, but also because of the “tinkering, kvetching, nitpicking, wholesale reworking, and spasms of self-loathing that go into a beautiful product.” “It was all being paid back in a rush.” In other words, you can work to achieve greatness, or you can work in your underwear for two hours a day. The two rarely go together. Overseas Fees Some advice from Gadling, a blog for travelers: be careful when using your credit card while traveling abroad. “Some (if not most) credit card companies will charge you a premium for using their card in a foreign country,” writes Justin Glow. Visa and MasterCard charge a 1 percent currency-conversion fee. And often, the card issuer will add more fees “for the convenience of using their card while traveling,” according to Mr. Glow, who sends readers to a chart at Bankrate.com that shows how much major banks charge for overseas use. Some waive the fees altogether. “If you’re traveling long term, it might be a good idea to go with one of those banks,” he advises. Impulse Power Guilt, or the lack thereof, determines how impulsive we are as shoppers, says a study appearing in the August issue of The Journal of Consumer Research ( jcr.wisc.edu ). Two business school professors, Patti Williams of the University of Pennsylvania and Suresh Ramanathan of the University of Chicago, concluded that most people who purchase impulsively feel a mixture of elation and guilt. The pound foolish tend to hang on to the elation, and the penny wise tend to hang on to the guilt — and so are less likely to sin again. Within days, spendthrifts have “lost the guilt and regret entirely, and all they remember is how great it was to have indulged,” Ms. Williams told CBC News.

Kawasaki Guy
Millionaires and Billionaires
Computers and the Internet
Credit and Money Cards
Visa International Inc
Mastercard International Inc


Jozy Altidore Is Off U.S. Gold Cup Roster

Abstract: Striker Jozy Altidore was dropped from Coach Jurgen Klinsmann’s United States squad for the Gold Cup, and defender DaMarcus Beasley was added as the American team prepares for the knockout stages. The unbeaten Americans face a quarterfinal match Saturday at Baltimore against a yet-to-be-determined opponent in the Gold Cup, the biennial North American regional championship. Altidore has been bothered by a hamstring injury and did not play in a 1-1 draw Monday with Panama. ■ Garath McCleary tapped in a rebound in the 72nd minute, and Jamaica beat El Salvador, 1-0, to clinch Group B in the Gold Cup in Toronto. (AP)■ Canada’s involvement in the Gold Cup came to an end as the Canadians were held to a 0-0 draw by Costa Rica, which made the quarterfinals. ■ The Dutch striker Robin van Persie, formerly of Manchester United, signed with Istanbul-based Fenerbahce on a three-year deal in one of the most significant transfers by a Turkish team in recent years. Some 18,000 fans turned out at Sukru Saracoglu stadium in Istanbul to witness the signing ceremony. ■ Raheem Sterling became the most expensive English soccer player ever, joining Manchester City from its Premier League rival Liverpool in a drawn-out move costing 49 million pounds ($76 million). Sterling signed a five-year deal at City after forcing his way out at Liverpool after several fractious months. (AP)

Central American and Caribbean Association Football CONCACAF


Lavish Malls Sprouting Up to Attract Iranian Elite

Abstract: TEHRAN — The low rumble of powerful engines reverberated against the high-rises of Zaferanieh, an upmarket neighborhood, as Porsches and Mercedeses lined up to enter the multistory parking lot of a fancy new shopping mall, the Palladium, the latest addition to Tehran’s shopping scene. Iran may be facing a dangerous economic abyss, with an empty treasury, historically low oil prices and the continuing damage of Western economic sanctions, but one indicator is going through the roof: Developers have broken ground on a record 400 shopping malls across the country, 65 in Tehran alone. In part, the malls are a lagging indicator, a testament to a not-so-distant past when Iran was raking in record oil profits, earning more than $700 billion in the last decade. Awash in money, with a relatively strong currency, Iranians developed a taste for luxury, setting off a boom in construction projects to host new shopping experiences. But the mall-building boom also reflects other factors, as construction and investment companies affiliated with the Revolutionary Guards Corps and the police have led the way. “Under sanctions, with nowhere else to invest, building shopping malls is the only lucrative business in Iran,” said Jamshid Edalatian, an economist. “The Guards, the police and other institutions are the ones who have money, so it is logical for them to invest in what makes a profit.” Together with banks, wealthy individuals and powerful foundations, tax-exempt organizations that are supposed to care for the poor, Iran’s security forces are building malls with Western-sounding names such as Rose, Mega Mall and Atlas Plaza. Their bright neon letters stand in sharp contrast to the revolutionary slogans painted on murals in surrounding neighborhoods, labeling consumerism a Western illness and taboo under Iran’s rigid ideology. Not so long ago, shopping in revolutionary Iran was a dull experience, with hole-in-the-wall stores offering the same clothes, electronics and furniture. Shopping was considered a necessary evil meant to support a life of religious piety. Commercials, once banned on state television and billboards, are now allowed, but only for Iranian products. Image Kouroosh mall in Tehran has several cinemas and Western shops. Credit Newsha Tavakolian for The New York Times The new malls represent a departure from all this. Customers can stroll past Nike and Massimo Dutti stores, order freshly baked baguettes in the ground level supermarket or work out at the penthouse gym overlooking the city and its majestic Alborz mountain range. “We cater to what people desire to do: spending money, buying stuff and enjoying themselves as they shop,” said the owner of the Palladium, Hassan Raftari, who described himself as a shopaholic. The scion of a family famous for its kebab restaurants, Mr. Raftari led a business expansion into the construction of luxury apartment buildings. During his trips abroad, he said, he would always wonder why shopping in Iran was so boring. “So I decided to build my own shopping center,” he said, stressing that his mall is 100 percent private owned. He is now selling the mall’s 250 shops one by one, reportedly at prices of around $330 a square meter, or roughly $30 a square foot. “We have 1,000 parking spaces and my only mistake has been that I haven’t built more,” Mr. Raftari said. Malls comparable to the Palladium are mushrooming across the city. According to an industry website, Iranmall.ir , 65 malls and entertainment centers are currently being developed in the capital, and not just for the rich. Around Tehran’s southern bus terminal, one of the poorer areas of the city, three malls are under construction. The colossal Mega Mall has just opened its doors near Tehran’s Mehrabad airport. Less than a mile to the north is the Kouroosh mall, a massive glass building that is home to shops and cinemas. The décor is determinedly Western, in line with the tastes and lifestyles of their target middle- and upper-class customers. “It is just such a pleasant experience,” said Fatemeh Gholipour as she pushed her cart last week through the long and well-stocked aisles of the Palladium’s supermarket. “They have everything under one roof. It is just like the malls I have seen in Dubai and Turkey. I feel modern shopping here.” For urban Iranians, many of whom have seen their income dwindle during years of sanctions, the malls are a confirmation of their growing influence. Since the 1979 Islamic Revolution, the state has dominated public spaces, using murals, the morals police and state media to emphasize what officials say are unchangeable revolutionary values. In private, though, Iranians have moved on, embracing satellite TV and the Internet, widening their world views and comparing their lives to those of people in Turkey, Malaysia, Europe and other popular destinations. From that perspective, the ornate shopping malls stand out as middle-class outposts in the state-controlled economy, indicators of Iranians’ increasing desire to join the modern world, experts say. Timeline on Iran’s Nuclear Program Whether Iran is racing toward nuclear weapon capabilities is one of the most contentious foreign-policy issues challenging the West. “Nowadays, there are just so many urbanized, middle-class people in Tehran who aspire to Western lifestyles,” said Kazem Alireza, a history researcher working for the Parliament. “Their needs are met by developers who offer them consumerism, just like the Western patterns of urbanization and changing lifestyles. Shopping malls make people happy; at least for now they are satisfied with them.” The boom in shopping malls is just simple economics, insiders say. “Basically a group of 10 to 20 very wealthy individuals and state institutions are building all the malls,” said the chief executive of a design company that serves the shopping centers, who asked not to be named for fear of losing business. “They have moved from housing projects to malls. It’s just very profitable.” Many of the institutions catering to the consumers’ every whim are the same ones charged with enforcing public adherence to puritanical Islamic strictures on dress and behavior. A business magazine, Tejarat-e Farda, reported last year that Iran’s police have their own construction arm, the Saze Paydar Gharn, that is currently building the Rose mall in West Tehran. Under the “useful links” section, the police website provides a connection to the construction company . A bank affiliated to the so-called police cooperation foundation, the Ghavamin Bank, and the Mehregan Investment Company are the driving forces behind the Mega Mall, the magazine wrote. Mr. Edalatian, the economist and a member of the Tehran Chamber of Commerce, pointed out that there is very little land left for massive shopping malls in a densely populated city like Tehran. “Those are often owned by state foundations,” he said. He also noted that the state prefers the shopping malls to the chaotic bazaars, as it is easier to collect value added taxes from them, currently at 8 percent. “Try to get taxes from four million individual shops in our country,” he said. “The more centralized, the better.” In the Palladium, a couple dropped their child off at a playground in Bookland, and then went off to browse the shelves. Smiling attendants rushed to help customers at Electronic City, where tablets and iPhones lay on tables for all to test. “This mall is not only changing our shopping culture, it’s also a place where people are nice to each other. Most people you see here are smiling and not stressed out as they are elsewhere in this city,” said Mobin Cheraghi, who was recently promoted to assistant to Mr. Raftari. “It shows that Iranians can have a Western lifestyle.”

Iran
Tehran
Shopping mall
Retail
Economy
Construction


Dueling Guitars in Gameland: MTV and Activision Face Off

Abstract: The holiday season is when all the action takes place in the video game business, and this year has already pitted Microsoft’s Xbox 360 against Sony’s PlayStation 3, and sleek new software against sequels like Halo 3 . But one of the most watched rivalries is between two games that are not first-person shooters or movie tie-ins. Instead, Activision’s Guitar Hero III: Legends of Rock and MTV ’s Rock Band put players in the role of rock musicians and allow them to play along with songs by bands like Metallica and the Who. Both titles could be important to an industry that is trying to reach out to adults, women and anyone lacking interest in a fighting game. Like Nintendo’s Wii, the Guitar Hero games have found a receptive mainstream audience, and the earlier versions sold a total of six million copies. In its first week of release, Guitar Hero III had sales of $115 million. Rock Band was released last Tuesday. This virtual battle of the bands will also pit a mainstay of the industry, Activision, against MTV, a unit of Viacom, a relative newcomer to the game business but one with deep roots in the music world. In the long term, both Activision and MTV believe that the genre of “rhythm games” has the potential to attract a mainstream audience unmoved by the robots and race cars that have become industry staples. “We’ve never had anything like Guitar Hero in terms of appealing to a mass of people,” said Robert Kotick, the chairman and chief executive of Activision. “The game has been on ‘South Park,’ ‘Gossip Girl’ and ‘The Ellen DeGeneres Show.’ I don’t know the audience demographic for ‘Ellen,’ but it’s not your typical gamer.” Both games use controllers shaped like musical instruments: Guitar Hero III is played with a miniature plastic version of a Gibson Les Paul with buttons where the strings would be, while Rock Band uses a toy Fender Stratocaster, a faux drum set and a microphone. The object of the games is to hit the guitar buttons or drums in time, or sing with the right phrasing and pitch, in an experience akin to karaoke. MTV is looking for an additional benefit from Rock Band. At a time when its core demographic is spending more time with video games, the company wants to use this game as a starting point for new music and programming ventures. Rock Band and Guitar Hero both allow players using certain game systems to pay to download extra songs to play along with. Such sales would mean revenue for the beleaguered record labels. “We thought the opportunity was wide open, and it fit into our brand and our heritage,” said Van Toffler, president of the MTV Networks Group. “It will yield a whole bunch of ancillary businesses and revenue streams.” The rivalry between MTV and Activision is made more stark in that both Rock Band and the previous versions of Guitar Hero were developed by Harmonix Music Systems (the newest Guitar Hero was developed by another studio). MTV purchased Harmonix in September 2006 for $175 million cash, in a deal that did not include rights to the Guitar Hero franchise. To distribute Rock Band, it signed a deal with Activision’s main competitor, Electronic Arts. Like any battle of the bands, this one features its share of trash talk. “MTV trying to take on Guitar Hero is like us trying to go into the music cable business,” Mr. Kotick said. One of the largest video game makers, Activision is enjoying its best year ever, because of Guitar Hero II, several successful movie tie-ins and the latest entry in the action game Call of Duty. Both games have received positive reviews. Rock Band features more original songs instead of rerecorded versions by studio bands, but Guitar Hero III features the virtual likenesses of Slash, Tom Morello and Bret Michaels. Guitar Hero III, which is available for all the current consoles, is also less expensive, priced at about $100 with the controller. Rock Band will cost $160 for the Xbox 360 and the PlayStation 3, with a PlayStation 2 version due next month. In the next few months, analysts believe that of the two, Guitar Hero III will sell better because there will be more copies on store shelves. “Rock Band is going to do fine, but there are supply constraints,” said Michael Pachter, a game industry analyst at Wedbush Morgan Securities. When the publisher RedOctane put out the first version of Guitar Hero two years ago, it seemed remarkably fresh in an industry that has come to depend on franchises and increasingly sleek iterations of old ideas. Unlike most games, which take in a substantial percentage of their revenue during the first week of release, sales grew over the course of a few months. By February 2006, Harmonix’s chief executive, Alex Rigopulos, knew that his company had a hit on its hands when he entered the title on YouTube and, “I saw hundreds of people playing the game,” he said. Other companies saw the game’s potential as well. In May 2006, Activision paid $99.9 million in cash and stock to buy RedOctane, which owned the Guitar Hero franchise under the terms of its publishing deal with Harmonix. MTV bought Harmonix four months later. Rock Band is not MTV’s first foray into games. The company has run game-related programming on several of its channels and established the MTV Games division to participate in publishing deals. It also served as a marketing partner for the previous Guitar Hero games. But Rock Band is the first title that it will so fully integrate with the rest of its business. MTV has already featured Rock Band on “TRL,” “Real World” and “MTV News,” and VH-1 has done a “Behind the Music”-style “mockumentary” recounting the imaginary history of the Rock Band band. “We have a plan for three to five years,” Mr. Toffler said. Its first new business will involve selling music. Players who have the Xbox 360 or PlayStation 3 will be able to buy extra tracks for $1.99 each, as well as full albums, including “Who’s Next” and Nirvana’s “Nevermind.” Activision will also sell Guitar Hero III downloads, though only in packs of three. Both companies plan to make new content available on a regular basis. This download market could be good news for record labels, which will be paid for the use of original songs. (Songwriters and publishers, but not labels, are paid for rerecorded versions.) Downloaded tracks are not technically considered sales, since the music serves as part of the game, but record companies and performers will still collect money according to how well they sell. “These games allow people to discover and fall in love with music in a more impactful way,” said Paul DeGooyer, MTV’s senior vice president for home entertainment, music and games. “Part of what can happen out of this is an antidote to the disposable music era.”

Computer and Video Games
Guitars
Rock Music
MTV Networks
Activision Incorporated


Markets Are Coping (for Now) With Blows to Unity in Europe

Abstract: Losing one referendum crucial to the future of Europe may be regarded as misfortune, but, as Oscar Wilde might say, losing two looks like carelessness. Europe’s leaders are looking careless after forcing votes in Britain and Italy that went the wrong way, from their perspective, within less than six months. But you would barely realize that any of that happened, judging by the performance of European markets. Stocks plunged after the British vote in June to leave the European Union , and had a more muted decline, based on futures prices, after the Italian referendum last month, which strengthened the hand of politicians who want to take Italy out of the euro. Despite those short-term moves, the average fund that invests in European stocks ended 2016 not far from where it started, down 2.4 percent, according to the investment research firm Morningstar, mostly because of a decline in the euro. Popular exchange-traded funds, like Vanguard FTSE Europe and iShares Europe, lost 3.9 percent and 3.2 percent on the year, although dividend payments meant that shareholders just about broke even. European government bond yields have soared since the so-called Brexit vote, but they were still down for all of 2016, which means that bond prices, which move in the opposite direction, rose. The markets are taking political developments in stride, but that may not last. For while the people have spoken, they are not about to pipe down soon; national elections are scheduled this year in the two most important European Union states: Germany and France. There are populist parties on the ballot in each that could achieve enough support to ruffle the markets. Many Europeans are frustrated with decades of economic stagnation exacerbated by a failure by leaders to confront barriers to prosperity like high taxes and rigid labor markets. With so much at stake, investment advisers warn, it would be foolish to downplay the dangers. Europe is suffering from “the rise of populist backlash against the establishment,” said Paul O’Connor, head of multiasset for Henderson Global Investors, a British company that manages $12.5 billion in assets in American mutual funds. “It feels as if it’s in its infancy, and it’s going to overshadow the next few years quite significantly.” Populist governments often spend lots of money on infrastructure projects and other programs intended to curry favor with the public, market strategists say. That enhances growth in the short run, and it may provide a notable boost for Europe by accelerating a nascent trend away from the austerity that many governments imposed during the debt crisis a few years ago. But the spending programs are often financed with borrowed money, something that Europe owes plenty of already, and the damage from the added debt usually outweighs and outlasts the benefits from the growth. Stock buyers lately seem to be focusing on the positive growth factors, while bond sellers are looking further ahead. “Typically, when a populist government gets elected, one of the first things it does is fiscal expansion” to promote job growth and voter confidence, said Markus Stadlmann, chief investment officer of Lloyds Private Bank. “What happens in the next phase of fiscal expansion is that it’s financed by government borrowing.” President-elect Donald J. Trump and Prime Minister Theresa May of Britain have proposed programs of one sort or another that would serve this purpose, Mr. Stadlmann said. When the bill comes due, it is often in the form of higher interest rates or higher inflation. At that stage, he warned, “government is less in control, the deficit deteriorates, government spending is unsustainable, wages fall in real terms and there are capital outflows. That’s one of the reasons the bond rout has been really intense.” Another populist impulse that should worry investors is protectionism through tariffs or other curbs on foreign goods. The aim is to protect jobs, but most economists say that constraining trade limits competition and leads to higher consumer prices. One concern about Brexit is that Britain will lose access to the free-trade zone within Europe. Not only might British merchandise be hit with tariffs, but British companies might also have to pay more for European goods used in manufacturing. Mr. Stadlmann called the potential for trade disruptions “a big risk.” A potentially (if, at the moment, unlikely) catastrophic economic event that investment advisers say is not accounted for in asset prices is the departure from the European Union, or at least the euro, of the one indispensable member: Germany. If Germans wanted to leave the union — say, because of disenchantment with the influx of migrants or the assistance provided to weaker member states — it could do so. Germany has a more robust economy than its neighbors, and it runs a large current-account surplus with the world outside Europe (more money comes in than goes out), so it could replace the euro with a stronger currency, reducing the country’s debt burden, whereas a weaker country that left the eurozone might risk default. If Germany left, “the E.U. would be severely wounded, at best,” said William Porter, global credit strategist for Credit Suisse, adding, “Politics in the periphery is not what’s going to drive” developments in Europe. “It’s the core.” Mr. Stadlmann expressed similar thoughts, saying, “It’s not Spain and Italy that are different in the E.U., it’s Germany.” He added that he is “not very negative on the E.U. holding together at the moment.” What investment advisers are very negative on when they consider the impact of rising populism is European bonds. “The re-pricing in government bonds is incomplete,” said Mr. O’Connor at Henderson, adding, “It’s plausible the bull market in fixed-income has come to an end.” Mr. Stadlmann likewise noted that the reversal of bond yields is “continuing and gaining speed.” As for other assets, he encourages being “very, very selective.” In particular, he favors stocks of German retailers and real estate companies. John Maxwell, manager of the Ivy International Core Equity Fund, is more optimistic on European stocks, especially on multinational companies that are cheaper than rivals based elsewhere and that are comparatively immune to politics. “If something goes wrong, it doesn’t mean Procter & Gamble is going to do better than Unilever selling detergent in Italy,” he said. Unilever is one portfolio holding that illustrates his point. Others are the energy company Total, British American Tobacco, the health care concern Smith & Nephew and Reckitt Benckiser, which makes household goods. Mr. O’Connor of Henderson prefers market segments that do well when inflation rises, including financial services and economically cyclical sectors like natural resources and consumer discretionary. Among the 10 largest holdings in the Henderson International Opportunities fund on Nov. 30, the last date for which holdings had been disclosed, were the French carmaker Renault, the British insurance company Standard Life and the German tire manufacturer Continental. But Mr. O’Connor’s support for European stocks in general is lukewarm, and with the penchant that European voters have shown for making surprising decisions with ramifications that will remain hard to gauge, taking big investment risks may start to look like carelessness. “Equities are the place to be, but I think it’s going to be a bumpy ride,” he said. While he finds that “momentum is gradually improving,” the inability to find lasting solutions to what does not work in Europe ensures that there will be “no very powerful bull script.” “There is a more plausible path to growth” in Europe, Mr. O’Connor said, “but it’s not enough to dispel some of the political things that are flaring up.”

Euro Crisis
EU
Stocks,Bonds
Protectionism
Mutual fund


Airlines Give Some Thought to Food for the Health-Conscious

Abstract: In the late 1970’s, a first-class dinner menu for a Pan Am flight from New York to Tokyo offered a study in gluttony: beluga caviar, roast beef slathered in gravy, creamy potatoes, buttered vegetables, cheeses and ice cream with fudge sauce. Today’s first-class and business-class passengers can still find plenty to gorge on during long flights. But several international carriers recently began sharing with passengers nutritional information for some of their menu items. They are also offering lighter alternatives. Surveys have shown that many health-conscious fliers wish the airlines would hold the butter. “If you fly a lot, it does become an issue,” said Ian Ruddle, a partner at Deloitte Consulting in New York, who said he usually didn’t eat on shorter flights but would sample the offerings on longer journeys. Meals in coach class on domestic flights largely have vanished. But most airlines do offer a meal on flights longer than five hours. And in premium classes, especially on international flights, competition for higher-paying passengers has led some airlines to hire well-known chefs to improve the image. Several of these tie-ins have been in direct response to health concerns; British Airways, citing the “changing lifestyles” of its customers, is working with chefs from Thailand’s Chiva-Som spa resort to prepare meals with organic ingredients and a minimum of salt and saturated fats. The meals are offered only in first class on flights between London and major cities in the United States and Asia. The airline has low-fat and low-calorie options on its business-class menus as well, under the rubric of a “well-being” program; however, the menus do not provide an exact nutritional breakdown of the meals’ contents. Emirates does provide a calorie count for its healthy dishes on business and first-class menus. El Al said it was spending $200,000 to devise healthy menus with nutritional breakdowns. Many travelers would welcome some dietary guidance, said Heidi Turner, a dietician whose Seattle company, FoodLogic.org , has many corporate travelers as clients. She has studied some airline menus and estimates that a steak dinner with appetizers and dessert would total more than 2,000 calories. While many fliers can order diet meals in advance, business travelers often fly on short notice and cannot be bothered to order meals ahead of time. Besides, Ms. Turner said, the special meals are often “really boring.” At least one airline was prodded to develop its food choices because of one of its own executive’s frustrations with trying to stay fit on the road. Caroline Chung, an airline marketing executive and a self-described health food nut, said she wanted to put some ideas into practice when she joined MaxJet, the all-business-class airline. “I thought there must be lots of people out there who care about what they eat,” she said. The airline provides complete nutritional information for one menu item on each flight. One recent item was “chili sliced prawns” (240 calories, 9 grams of fat, 27 grams of carbs). But other choices were filet of beef with béarnaise sauce and jacket potato. Some passengers would rather indulge themselves, said Ramsey Nuwar, the head of catering. “For many people, when they board a plane, the diet tends to go out the window,” he said. Brian O’Loughlin, director of culinary development at the airline caterer LSG Sky Chefs, said prominent chefs had helped raise health consciousness for airline food. Alice Waters, the chef at Chez Panisse, in Berkeley, Calif., was until recently a member of an American Airlines chefs’ advisory panel. She persuaded the airline to put locally grown lettuce on its tray tables. The trend gained momentum when LSG conducted a survey of business travelers in the late 1990’s and found that 67 percent said they wanted foods lower in fat and cholesterol. But taste counted as well. Therein lies the challenge. A typical hot airline meal must be prepared hours in advance and chilled, then reheated later during the flight, said Marion Nestle, professor of nutrition, food studies and public health at New York University and the author of the recently published “What to Eat.” “Tasty food just can’t survive, so to make it more palatable, they just throw in the fat,” she said. On the other hand, she added, the comfort factor should not be ignored. “You’re in a tin can, and by the time you settle in you’ve been prodded and pushed and shoved,” she said. Her strategy: eat the appetizer and go straight to dessert. “Give me an ice cream sundae with nuts and whipped cream, and I can endure the flight,” she said. Some airlines still believe that when it comes to food, more is better. At Singapore Airlines, which serves as many as three meals aboard some of its long-distance flights over the Pacific, “our philosophy is that food is part of the entertainment,” a spokesman, James Boyd, said. American Airlines, which recently came up with new menus for business and first-class trans-Atlantic flights, features a “cowboy steak” by Stephan Pyles of the Dallas restaurant that bears his name. The same menu includes “lighter fare.” Delta Air Lines recently hired Michelle Bernstein, chef at Michy’s in Miami, to oversee its new premium-class international menus. Ms. Bernstein was trained as a nutritionist, and while she said the airline had not asked her specifically to produce any diet dishes, she did not use any butter and emphasized lighter ingredients. Both of those airlines will still offer premium passengers gooey hot fudge sundaes, tempting fliers like Peter Greenberg, a correspondent for “The Today Show” who recently wrote “The Traveler’s Diet,” a book drawn from his experiences trying to lose 70 pounds while logging more than 400,000 miles annually. “For many fliers, it’s an entitlement thing,’’ he said. “They’ve paid for their ticket, and they want their dessert!” He should know; when flying in first class out of Dallas recently, he had already decided he’d go off his diet for the expected ice cream treat. When it wasn’t on the menu, “there was a riot,” he recalled. The sundaes came back on later flights.

Airlines and Airplanes
Food
Health Foods
Dieting
British Airways Plc
Sky Chefs
American Airlines
Singapore Airlines
Delta Air Lines Inc


Opportunity Beckons in China Smog

Abstract: SHANGHAI — As China’s smog levels crept past record highs in early December, the phone lines at the pollution-busting kit maker Broad Group lit up with Chinese customers worried about the hazardous pollution levels that have gripped China this past year. China’s government is struggling to meet pollution reduction targets and has pledged to spend more than 3 trillion renminbi, or almost $500 billion, to tackle the problem, creating a growing market for companies that can help increase energy efficiency and lower emissions. “Recently, we haven’t been able to make products fast enough to keep up with demand,” said Hu Jie, a general manager at Broad Group, whose pollution-related products include hand-held monitors and environmentally friendly buildings. Sales about doubled in 2013 from the previous year, Mr. Hu said, without giving details. Pollution problems in China are by no means new. But heightened public anger and a growing political will to deal with the issue have created opportunities for companies with environmental knowledge to earn a slice of China’s clean-technology market, which is set to triple to $555 billion by 2020, the United States Department of Commerce says. Companies like the American clean-energy expert Fuel Tech, the design engineer WS Atkins, and others have seized the opportunity by increasing staff numbers and clinching contracts. “China has reached a saturation level which people can no longer tolerate,” said Feng An, president and executive director of the U.S.-China Clean Tech Center, which takes American clean technology companies to China to meet potential partners. “Five years ago people could pollute and get away with it. Now they can’t. This year you can really see the difference.” Pollution cost China’s economy at least 1.1 trillion renminbi in 2010, the environment ministry estimated in 2013 — equal to 2.5 percent of gross domestic product that year. Pollution has been tied to “cancer villages” and reduced life expectancy. Smog closed down the major northern city of Harbin in October. Acknowledging public anxiety over the issue, Prime Minister Li Keqiang said in March that China should not sacrifice the environment to pursue economic growth. For the American environmental engineering company LP Amina, which helps coal power plants reduce emissions by retrofitting burners to make them more efficient, China sales doubled in 2013, said the firm’s marketing manager Jamyan Dudka, without providing specific figures. Coal accounts for more than two-thirds of China’s primary energy consumption. China is pushing to reduce nitrogen oxide pollutants from power plant emissions and offering subsidies to get companies involved. The cost of retrofitting all of China’s power plants over a five-year period would be about $11 billion, Mr. Dudka said. Fuel Tech, which is listed in the United States and also focuses in this area, sees China at the forefront of its business development plans and has increased its China-based staff to more than 30 people, Doug Bailey, the company’s chief executive, said on an analyst call in November. Companies like Atkins of Britain and the Australian developer Lend Lease Group are also leveraging their global expertise in sustainable construction. Atkins is working with local governments to develop sustainable construction guidelines and will team up with two Chinese cities to put them into action. China’s contribution to the company’s 88 million pounds, or about $145 million, in Asia-Pacific revenues increased to 40 percent in 2013, it said. The region accounts for about 5 percent of global sales. “Unlike Europe and the Americas, which have already been built out, there’s still a huge amount of development going on in China,” said Mark Hewlett, an Atkins associate based in Beijing. About 300 million Chinese are expected to move from rural to urban areas over the coming decade as the government pushes ahead with an urbanization drive to lift domestic consumption. Vishnu Amble, Amsterdam-based principal at the private equity firm Global Cleantech Capital, said the positive trends had drawn fund managers back to China’s clean-tech market, focusing on energy efficiency, lighting, waste treatment and water. “People have been following China’s clean-tech market lightly the past year or so,” said Mr. Amble, whose firm manages about $200 million in assets and has as much as a fifth of its 2014 deal pipeline set to come from China. “Now they’re really diving in.”


Bush, Resetting Agenda, Says U.S. Must Cut Reliance on Oil

Abstract: Correction Appended WASHINGTON, Jan. 31 - President Bush offered the nation a modest menu of energy, health and education proposals and warned against the "false comfort of isolationism" on Tuesday in a State of the Union address that sought to reassert his control over the nation's agenda heading into a pivotal midterm election campaign. In one of his most striking declarations, Mr. Bush said "America is addicted to oil" and set a goal of replacing 75 percent of the nation's Mideast oil imports by 2025 with ethanol and other energy sources. But even that goal was less ambitious than it might have appeared -- the United States gets less than 20 percent of its oil from the Persian Gulf -- and the speech was notable largely for a lack of big new proposals from a president who for five years has not shied from provocative and politically risky initiatives. The president devoted nearly half of the 52-minute address to a restatement of his foreign policy. He called for freedom around the world, warned against the threat of "radical Islam" and again invoked the memory of the Sept. 11 terrorist attacks. To his familiar call about ending "tyranny in our world," Mr. Bush added a new framework that sought to address the anxieties created by a rapidly changing economy and an aging society. The answer, Mr. Bush said, was not to turn inward. "In a complex and challenging time, the road of isolationism and protectionism may seem broad and inviting, yet it ends in danger and decline," he said. "The only way to protect our people, the only way to secure the peace, the only way to control our destiny is by our leadership, so the United States of America will continue to lead." [Transcript, Pages A18 and A19.] The only alternative to American leadership, he said, "is a dramatically more dangerous and anxious world." But Mr. Bush was more tempered and less partisan than a year ago, evidence of his diminished political standing. On Tuesday night, in an echo of President Dwight D. Eisenhower's response after the United States was stunned by the launching of Sputnik in 1957, Mr. Bush called for initiatives to deal with a new threat: intensifying competition from countries like China and India. He proposed a substantial increase in financing for basic science research, called for training 70,000 new high school Advanced Placement teachers and recruiting 30,000 math and science professionals into the nation's classrooms. He warned that the two parties must find a way to work together to deal with the rapidly rising costs of supporting an aging society and called for a bipartisan commission to come up with proposals for Social Security, Medicare and Medicaid. He pushed his proposals to give individuals more control over and responsibility for their own health care costs through savings accounts and tax incentives. And at a time when high global energy prices are slowing the economy and pinching consumers, he pushed for greater energy independence. "Americans should not fear our economic future, because we intend to shape it," the president said. The speech was notable for what Mr. Bush did not mention. He offered no new ideas for rebuilding New Orleans in the wake of Hurricane Katrina, made no mention of his troubled Medicare prescription drug program and offered no proposal to clamp down on lobbying abuses in Congress that have led to the investigation of Jack Abramoff, a formerly powerful lobbyist and a major fund-raiser for Mr. Bush. Mr. Abramoff pleaded guilty on Jan. 3 to conspiracy, fraud and tax evasion, and prosecutors have said he used campaign contributions, lavish trips and meals to influence lawmakers and their aides. Mr. Bush delivered his address after one of the most difficult years of his presidency but on a day of political triumph, just hours after his nominee, Judge Samuel A. Alito Jr., was confirmed by the Senate as the 110th justice in the history of the Supreme Court. Justice Alito, dressed in the sweeping black robes of his new court, sat with other justices in the front rows of the chamber of the House of Representatives. The president strode into the packed chamber shortly after 9 p.m. for the traditional back-slapping, hand-grabbing, cheek-kissing walk down the aisle. The promenade under the bright television lights effectively kicked off Mr. Bush's last campaign as a sitting president to gain support in Congress for his party's agenda. He did so before an audience of dogged Democrats seated across the aisle from nervous Republicans, who find themselves mired in a contentious leadership battle and the influence-peddling investigation in their top ranks on Capitol Hill. In a vivid display of increasing assertiveness against the president, the Democratic side of the House rose to its feet in applause when Mr. Bush made what he intended to be a conciliatory reference to the defeat of his Social Security proposal last year. Mr. Bush appeared taken aback before finally wagging his finger at them and saying, "The rising cost of entitlements is a problem that is not going away." In foreign policy, Mr. Bush broke no new ground, and used language drawn from previous speeches. He held out the possibility of reducing the 140,000 American troops in Iraq over the next year, but made no promises. He grimly warned Iran not to pursue its nuclear weapons ambitions, calling it "a nation now held hostage by a small clerical elite that is isolating and repressing its people." And he called on the militant Islamic group Hamas, the overwhelming victor in last week's elections by Palestinians, to "recognize Israel, disarm, reject terrorism and work for lasting peace." Mr. Bush continued his vigorous defense of his administration's secret program of eavesdropping without warrants and suggested that it could have caught some of the Sept. 11 hijackers, although he provided few details. "We now know that two of the hijackers in the United States placed telephone calls to Al Qaeda operatives overseas," Mr. Bush said. "But we did not know about their plans until it was too late." The president built on the theme of his second inaugural address, and even in the face of the Hamas victory issued a strong call for democracy and elections in the Middle East. "In 1945, there were about two dozen lonely democracies on earth," Mr. Bush said. "Today there are 122." Mr. Bush also repeated that his administration's war on terrorism was not creating more terrorists, as critics of his policies contend. "In a time of testing, we cannot find security by abandoning our commitments and retreating within our borders," Mr. Bush said. "If we were to leave these vicious attackers alone, they would not leave us alone. They would simply move the battlefield to our own shores." On domestic policy, Mr. Bush offered a panoply of proposals in health care, energy and education that reflected the restrictions imposed on him by the growing budget deficit and a Congress that will be reluctant to take on divisive new legislation in an election year. Mr. Bush cast his education proposals as essential to maintaining American competitiveness in a world economy in which jobs are migrating to developing nations like India and China. "We must continue to lead the world in human talent and creativity," Mr. Bush said. "Our greatest advantage in the world has always been our educated, hard-working, ambitious people and we are going to keep that edge." In health care, Mr. Bush proposed changes in legislation to make it easier for employers to offer, and for individuals to buy, health savings accounts, which offer tax incentives to people to put aside money for medical expenses. "Our government has a responsibility to help provide health care for the poor and the elderly, and we are meeting that responsibility," Mr. Bush said. "For all Americans, we must confront the rising cost of care, strengthen the doctor-patient relationship and help people afford the insurance coverage they need." In energy policy, a major part of his address, Mr. Bush promoted the construction of nuclear power plants and renewed a call for the development of alternative fuel for automobiles, including ethanol, which is made from corn, as well as the development of fuel made from the waste of plant crops. Energy analysts also said Mr. Bush's goal to replace 75 percent of America's Mideast oil imports by 2025 was not as meaningful as it appeared because the bigger suppliers to the United States are Mexico, Canada and Venezuela. But for Mr. Bush, the emphasis on reducing foreign dependence on oil, particularly in the often volatile Persian Gulf, reflected a critical political dynamic this year: Republicans have been increasingly alarmed that escalating gas and home heating prices could prove a major issue in Congressional elections this year, particularly as oil companies are reporting record profits. The president returned to the issue of Social Security again on Tuesday, the proposal that collapsed under the weight of Democratic opposition and tepid support from his own party and the public last year. In contrast to last year, when he rejected similar proposals, Mr. Bush called for a bipartisan commission to examine ways to deal with Social Security, along with Medicare and Medicaid. Numerous commissions in the past two decades have looked at the problem, but none has been able to rally bipartisan support for either benefit cuts or tax increases to deal with the financial problems looming over the social welfare programs. Those three programs, Mr. Bush warned, would soon swamp the federal budget if Congress failed to act as millions of Baby Boomers turn 60 and prepare for retirement. "This year, the first of about 78 million baby boomers turn 60, including two of my dad's favorite people: me, and President Bill Clinton," Mr. Bush said. "This milestone is more than a personal crisis -- it is a national challenge. The retirement of the baby boom generation will put unprecedented strains on the federal government." STATE OF THE UNION: THE OVERVIEW Correction: February 2, 2006, Thursday A subheading with the continuation of a front-page article yesterday about President Bush's State of the Union address included an erroneous observation about topics not included in the speech. Hurricane Katrina was indeed mentioned by Mr. Bush.


Treasury Auctions Set for the Week of June 13

Abstract: The Treasury’s schedule of financing this week includes Monday’s regular weekly auction of new three- and six-month bills and an auction of four-week bills on Tuesday. At the close of the New York cash market on Friday, the rate on the outstanding three-month bill was 0.26 percent. The rate on the six-month issue was 0.41 percent, and the rate on the four-week issue was 0.19 percent. The following tax-exempt fixed-income issues are scheduled for pricing this week: TUESDAY Chesterfield County, Va., $90.1 million of general obligation bonds. Competitive. Memphis, $68 million of general obligation bonds. Competitive. Union County, N.J., $63 million of general obligation bonds. Competitive. WEDNESDAY Frederick County, Md., $90 million of general obligation bonds. Competitive. THURSDAY Chesterfield County Water and Sewer, Va., $56 million of revenue bonds. Competitive. Illinois, $550 million of general obligation bonds. Competitive. Monroe, N.Y., $55.4 million of general obligation bonds. Competitive. Orange County, Fla., $63.3 million of revenue bonds. Competitive. ONE DAY DURING THE WEEK Alameda County, Calif., Peralta Community College District, $155 million of general obligation bonds. Citigroup Global Markets. California Infrastructure and Economic Development Bank, $138.4 million of revolving fund revenue bonds. J. P. Morgan Securities. California, Lancaster Successor Agency, $51.8 million of redevelopment project refinancing bonds. Hilltop Securities. California, Santa Cruz County Redevelopment, $47.6 million of tax allocation refinancing bonds. Stifel Nicolaus. Connecticut, South Central Connecticut Regional Water Authority, $123.5 million of water system revenue bonds. Janney Montgomery Scott. Cook County, Ill., $300 million of general obligation refinancing bonds. Barclays Capital. Dutchess County, N.Y., Local Development Corporation, $378 million of health systems project revenue refinancing bonds, Bank of America Merrill Lynch. Idaho Health Facilities Authority, $45 million of revenue refinancing bonds. Piper Jaffray. Idaho, Red River Educational Health Facilities, $74.7 million of revenue bonds. Piper Jaffray. Indiana, Hobart Building Corporation, $67.2 million of mortgage refinancing bonds. City Securities Corporation. Maryland Economic Development Corporation, $333 million of light rail project revenue bonds, J. P. Morgan Securities. Metropolitan Washington Airports Authority, $375 million of system revenue refinancing bonds, J. P. Morgan Securities. New Jersey, Housing Authority of the City of Newark, $57 million of police facility revenue refinancing bonds. Morgan Stanley. New York State Environmental Facilities Corporation, $497.5 million of clean water and drinking water revenue bonds. Goldman Sachs. Oregon, Klamath Intercommunity Hospital Authority, $50 million of revenue refinancing bonds. Piper Jaffray. Rhode Island Commerce Corporation, $42.3 million of airport revenue bonds. Raymond James & Associates. Snohomish County, Wash., Lake Stevens School District, $70.5 million of general obligation bonds. D. A. Davidson. Spokane, Wash., Central Valley School District, $40.5 million of unlimited tax general obligation bonds. Texas, Arlington Higher Education Finance Corporation, $43.2 million of education revenue bonds. Robert W. Baird. Texas, Waco Independent School District, $48.5 million of unlimited tax refinancing bonds. Oppenheimer. Tucson, Ariz., $44 million of general obligation bonds. Morgan Stanley. Utah County, Utah, $57.3 million of hospital revenue refinancing bonds. Wells Fargo Securities. Utah, Jordan Valley Water Conservancy, $64.3 million of water revenue bonds. George K. Baum.

Auction
Municipal bond
Stocks,Bonds
Debt


Rare Cancer Treatments, Cleared by F.D.A. but Not Subject to Scrutiny

Abstract: When federal regulators permitted the sale of an unproved device that uses intense heat to combat cancer, they did so for a compelling reason, to give hope to some women desperately ill with cervical cancer. Over the next two years, however, the few hospitals that purchased the $500,000 device did not take part in a study of patients that the manufacturer agreed to perform as a part of the machine’s approval. Cancer experts also said they were surprised that the Food and Drug Administration had approved the machine in the first place. The reason: The group of women for whom the F.D.A. approved the treatment — those with advanced cervical cancer who are too ill for chemotherapy — is so small. “I see, like, one patient like this a year,” said Dr. Junzo P. Chino, a cancer expert at Duke University. A look at the F.D.A.'s decision to approve the device, which is called the BSD-2000, opens a window onto a little-known regulation known as the humanitarian device exemption. The program, even its critics agree, is based on the best intentions. Because companies have little incentive to run costly trials for products used by small groups of patients, the exemption requires a producer only to show that a device is safe and has a “probable” benefit, rather than prove its effectiveness, the usual standard. The rule, which is similar to one governing drugs for extremely rare diseases, also does not require the F.D.A., companies or doctors to collect the kind of data that could later show that an exempted device works. As a result, critics say, ineffective products approved under the exemption can be sold for years while potentially lifesaving ones may never prove their worth. Moreover, an exempted device can be employed by doctors in any way they want, a practice that is known as off-label use. Since the BSD-2000 got its exemption in 2011, the for-profit Cancer Treatment Centers of America has purchased two of the machines. The company declined to respond to written questions about the numbers and types of cancer patients it treated as well as what it charged for treatments. “The provision is a good one, but the structure to get good effectiveness data is weak,” said Larry Kessler, a former F.D.A. official who is now a professor at the University of Washington in Seattle. In an interview two months ago with The New York Times, Dr. William Maisel, the chief scientist at the F.D.A.'s device unit, defended the BSD study ordered by the agency. But in mid-November, the agency and the machine’s producer agreed to kill it in favor of a study intended to capture more patients, including some cancer patients on whom the device is expected to be used off-label. Image The BSD-2000 combines intense heat, or hyperthermia, with other cancer treatments. The new study is intended to capture only safety information rather than data about the treatment’s effectiveness. “There is no requirement that the device ever show more than a probable benefit,” said Dr. Maisel. The BSD-2000 uses microwave energy to raise the body’s temperature to as high as 113 degrees Fahrenheit (45 Celsius). The treatment, which is known as hyperthermia, is based on the concept that high temperatures can damage and kill cancer cells, usually with minimal injury to normal tissues. Studies have shown that raising cell temperature increases the effectiveness of radiation and chemotherapy, and hyperthermia is typically used alongside one or both of those treatments. BSD Medical, a small firm based in Salt Lake City, makes another hyperthermia machine called the BSD-500 that the F.D.A. approved in 1983 for the treatment of breast cancer and tumors that lie just below the skin. But while studies have pointed to the potential effectiveness of the BSD-2000, which was developed in the 1980s to treat deep-seated tumors like those in the pelvis, that device has failed for three decades to win medical acceptance amid changing cancer treatment strategies and unsuccessful clinical trials. Dr. Elizabeth Repasky, a hyperthermia expert at the Roswell Park Cancer Institute in Buffalo, said that she worried that the F.D.A.'s decision to approve the BSD-2000 without better data collection could set back the technology rather than advance it. “It is not helpful to hyperthermia to have yet another uncontrolled study,” said Dr. Repasky. Since 1997, when the device exemption program started, about 50 products — heart pumps, orthopedic implants, optical aids — have been approved through it. There is no question that patients have benefited; one recently exempted device enhances vision in the nearly blind. To qualify, products must be intended for conditions that affect fewer than 4,000 patients annually. But the exemption has also served as a loophole to market devices to far larger groups. In 2006, the F.D.A. moved to withdraw exemptions issued to two companies that sold implanted devices used to close a tiny opening in the heart based on data suggesting that doing so might reduce the risk of stroke. The exemption covered patients only with the condition known as a patent foramen ovale, or P.F.O., who had had two strokes despite taking drugs intended to prevent them. But P.F.O. patients who had a single stroke or never had one soon demanded the device. “It was like taking the genie out of the bottle because there was a presumption” that the devices worked, said Dr. John D. Carroll, a cardiologist at the University of Colorado in Denver. Facing F.D.A. action, the companies voluntarily withdrew the devices from the exemption program and ran clinical trials aimed at winning full approval. But by then, doctors were using other devices off-label to close P.F.O.'s. Recruiting patients for the clinical studies was difficult, said Dr. Carroll, who headed one trial. Image Cancer Treatment Centers of America in Philadelphia. The firm has two BSD-2000 devices, which have an exemption from the F.D.A. that allows their use without a study of the results. Credit Jessica Kourkounis for The New York Times Three studies, including the one headed by Dr. Carroll, subsequently failed to find evidence that the devices were better than drugs in preventing strokes. Under another exemption, doctors are also now using an implanted electrical brain stimulator made by Medtronic to treat patients with severe obsessive-compulsive disorder who have not responded to drugs. But Dr. Joseph J. Fins, a professor at Weill Cornell Medical College in Manhattan, said the development represented an uncontrolled medical experiment because doctors were not collecting uniform data about what happens to patients. “People use it and it begins to become part of the medical environment,” said Dr. Fins, who has been critical of the F.D.A.'s decision to issue the Medtronic exemption. A spokesman for Medtronic said that the company was running a study in Europe to gain data about the treatment’s safety and effectiveness. In 2007, the F.D.A. rejected giving a full approval to the BSD-2000 for the treatment of deeper-seated tumors after determining that the results of a company-sponsored clinical trial performed at two hospitals in Holland were inadequate to show that it was safe and effective. One group followed in the study, however — women with advanced cervical cancer unable to tolerate chemotherapy — survived longer if treated with radiation and hyperthermia than with radiation alone. As a result, F.D.A. officials urged BSD Medical to seek an exemption for that patient group, and the company did so. For BSD Medical, which has struggled financially for years, getting the exemption has meant an increase in BSD-2000 sales here and abroad. And some longtime advocates of hyperthermia say they believe that the exemption will lead to other trials that can shed light on the treatment’s value. Dr. I-Chow Hsu, a professor at the University of California, San Francisco, said that institution was buying a BSD-2000 to run such trials. One study may involve the use of hyperthermia in the treatment of soft-tissue sarcomas, an area where it appears to have benefit, he said. “People who have this machine are going to have to come up with other protocols,” other than the cervical cancer one, said Dr. Hsu. “Otherwise, it would be very hard to justify these machines.” Dr. Repasky, the hyperthermia expert in Buffalo, said she remained concerned that justifying the machine’s cost could lead facilities to use the BSD-2000 in differing ways on different kinds of cancers. And the results of that, she said, will very likely be of little value to anyone. “The one thing cancer patients want to know is whether a treatment might help someone else in their family some day,” said Dr. Repasky.

Medical device
Cancer
Research
FDA
BSD Medical
Regulation and Deregulation


Hotels Offer Bikes, Cars and Sometimes Boats to Its Guests

Abstract: Rolls-Royce, Segway or tuk tuk three-wheeled taxi? Hotels around the world are offering business travelers more ways to get to their meetings. While most business travelers still use car, limousine and shuttle van services provided by their hotel, there are a growing number of options. The Affinia Dumont and Affinia Shelburne in Manhattan offer complimentary teal and yellow bikes, complete with helmets and front baskets to stow briefcases. Business travelers use the bikes to maintain their fitness regimen on the road, do some sightseeing and to commute to meetings, said Alex Spektor, general manager at the Affinia Dumont. “Some tell me that biking to the meeting instead of riding in the back of a taxi helps them arrive with a clear mind,” he said. The hotel started the program with 10 bikes in May, will be adding 10 more this year, and is introducing the program at other properties. Bicycles can also be rented via Conrad Concierge at the Conrad New York near Wall Street and electric bicycles are available at the Conrad Miami . Four Seasons hotels in the busy cities of Mumbai and Guangzhou also lend bicycles to guests, along with guidance about roads to ride. For guests who want to move a bit faster, the Four Seasons Hotel Firenze in Italy rents Vespas and the Circus Hotel in Berlin offers hourly and daily Segway rentals to its guests. These alternative transportation offerings are not common, according to Scott D. Berman, who runs the United States hospitality and leisure practice at PricewaterhouseCoopers. “They are mostly a quirky differentiator to get customers’ attention and to have something to blog about.” To transport guests to and from the airport, the luxury Peninsula hotel chain “prefers Rolls-Royces whenever possible,” according to a spokeswoman, Sian Griffiths, and has for more than 40 years. The Rolls-Royce offers guests “a dramatic entrance to the city or a glamorous farewell,” she said. While the Rolls-Royce has become the signature vehicle of the hotel brand, some Peninsula properties go beyond the luxury car fleet. Their property in Bangkok features four riverboats and a tuk tuk, which is a three-wheeled open-air taxi outfitted in this case with Wi-Fi, drinking water and cold towels. Helicopters can take guests to and from the airport from the Peninsula hotels in Hong Kong, Bangkok and Manila. Chris Kilham, who recently returned from Africa as part of his work researching medicinal plants and establishing trade for nutrition and cosmetic companies, uses more rugged hotel transportation vehicles. His travels routinely take him to remote locations, where one lodge sent a speedboat to take him up the Amazon River, and another sent a bicycle rickshaw to retrieve him from the local bus station. At Espiritu de Anaconda lodge in Peru, a hotel employee arrived on an old motorcycle with bungee cords, Mr. Kilham said, so he could secure his luggage on the back. In big cities, Mr. Kilham finds his own way into and around town. “Some people feel more comfortable seeing a chauffeur holding a sign with their name on it when they arrive in a foreign country,” he said, “but that’s not me.” Mr. Kilham generally eschews the hotel transportation in these cases. “Unless it’s interesting and fun, I’ll get there on my own,” he said. “Sometimes finding my own ride can be a way to meet someone with local knowledge.” Hotel transportation services are also integrating new technologies. Four Seasons Hotel Los Angeles at Beverly Hills has rolled out “Meetings on Wheels,” an eight-passenger Mercedes van outfitted with electrical outlets, Wi-Fi and plasma screen TVs so groups can get business done while sitting in Los Angeles traffic. All hotel cars and contracted limousines at Four Seasons worldwide now come equipped with Wi-Fi. Back-seat multitasking is also growing. Rather than watch the scenery pass by the window coming in from the airport, guests can check in to their hotel room, book a massage or order meals through their chauffeur or the iPad waiting for them in the back seat. Some hotels include a car along with the room. The Peninsulas in Tokyo, Hong Kong, New York and Chicago offer Mini Cooper cars free to guests who book suites. At the Four Seasons in Los Angeles, guests who book the most expensive suites have free use of a car like a Maserati or Lamborghini. Since 2010, the Oberoi hotel in Mumbai has featured female chauffeurs, in a field dominated by men. “Sometimes a lady traveler prefers to have ladies look after them,” said Devendra Bharma, executive vice president of the Oberoi in Mumbai. “But holistically they fit in very well with both men and women.” For business travelers who need to rent a car while on their trip, but do not want to take the shuttle bus to the airport car rental lot, some hotels offer car rentals on site. The AKA brand , with properties in New York, Philadelphia, Washington and other locations, offers hourly or daily car rental at its properties through Zipcar and includes insurance, gas and reserved parking to streamline the rental process. Despite the variety of modes and gadgets, some travelers appreciate the basics — like a free ride to the hotel that’s convenient to board. Joe Shaffner travels almost every week for his job at SAP, where he manages a technical team that supports a sales staff. He prefers hotels that provide a simple no-frills airport shuttle service. “When I go to our headquarters in Chicago, I know I can walk off the airplane and onto the Renaissance or Marriott Hotel shuttle because they’re coming every few minutes,” he said. Car services and shuttle vans are expensive to run, though, said Mr. Berman, the hospitality and leisure consultant. “You need a consistently high revenue stream and a really good business case to justify their existence,” he said, to pay for the vehicle, maintenance, depreciation, staff and fuel. “I’ve seen many discussions between hotel owners and managers debating how to manage expenses by reducing service hours or shuttle runs.”

Hotels
Business travel
Travel,Tourism
Computers and the Internet
Tech Industry
Cars
Biking
Car Leases Car Rentals
Luxury good


A Web Shift in the Way Advertisers Seek Clicks

Abstract: Tyler Townsend, a digital media manager who plans online advertising for travel clients at Ypartnership, an agency in Orlando, had $150,000 to spend on behalf of a Caribbean island’s visitors bureau. And this client did not care about branding — it wanted action. So Mr. Townsend, who once might have made a simple buy on a site like Yahoo , created a complex campaign, which ran in March. He bought ads on Budget Travel, and he bought out Lonely Planet’s home page for a week. He used custom ad networks that included travel-themed sites, and another that would put the ads only on high-end sites. Last year, Mr. Townsend said, many clients were happy to spend money just to raise awareness. Since January, however, “everyone’s retail-oriented. They want as many clicks for the dollar as possible,” he said. So far, the threat of a recession has not slowed the migration of ad dollars to the Internet — as Google ’s strong results showed on Thursday, when it reported a 30 percent jump in net income for its first quarter. But as Mr. Townsend’s campaign suggests, the slowing economy might be changing where those ad dollars are being spent. Increasingly, marketers are looking to ad networks, which sell display advertising across groups of Web sites. Some networks offer targeted advertising; others, called vertical ad networks, include sites that focus on one subject, like travel or sports. Their growth could mean a lower share of advertising for portals like AOL and particularly for Yahoo, which is particularly strong in traditional display advertising. (Yahoo will report its quarterly earnings on Tuesday.) In 2007, United States revenue growth slowed at three of the four major portals (Yahoo, AOL and Google) according to an analysis by eMarketer. The fourth is MSN. Any downturn could also be bad news for media sites that attract a lot of display advertising, like CNN.com or nytimes.com , at premium rates. In the United States, $21.1 billion was spent on online advertising last year, up from $16.9 billion in 2006, according to eMarketer. Search advertising — Google’s stronghold — is the majority of that spending, according to Jeffrey Lindsay, an analyst at Sanford Bernstein. According to a report by Imran Khan, an Internet analyst at JPMorgan Chase, ad networks “are growing much faster than the general graphical advertising industry.” He estimated that the top 20 ad networks had earned $2 billion in 2007, or 14 percent of the display market. The reasons ad networks are thriving are price and improved technology. Ad networks charge much lower cost per thousand ads served (known as CPMs), as low as $4 on an ad network with some targeting, compared with $40 and up for some ads on premium sites like MSN or Yahoo. “While the home pages are still very effective media buys, the price tags on them have become a little outrageous for many advertisers. For all the growth that has gone on from a site standpoint, there are other ways to amass that type of audience fairly quickly that are more efficient,” said Margaret Clerkin, the chief executive of Mindshare Interaction, a media-buying firm. The improved technology has helped. Ad networks once served ads to pages where no advertiser wanted to be, like pages that get few hits or those with controversial content. Now, though, many attractive sites are not major home pages. Also, many ad networks now offer targeting (as do portals, for a higher price), matching ads to likely buyers. For example, if an airline wants to promote a flight from Dallas to Chicago, it can direct those ads to users with Internet addresses from those areas. Marketers can also direct ads by content: a reader on a cellphone ratings site is probably looking to buy a new phone, while another reader on the Yahoo technology home page might be browsing stories about Wi-Fi and not looking to buy anything. David Metter, chief marketing officer of MileOne/Atlantic Automotive, a group of car dealerships with over 3,000 employees, said that it was possible to “blow your spend” on a home page ad. “I would much rather get more specific and go to the customers and have maybe less eyeballs and higher quality eyeballs, or less leads and higher quality leads,” he said. Based on the success of ad networks, some big players are buying their way into the game. Yahoo bought BlueLithium for $300 million last September. Last July, AOL bought Tacoda for a reported $275 million, and in November, it bought Quigo Technologies for a reported $350 million. Last May, Microsoft bought aQuantive, which owns some ad networks through a subsidiary, for $6 billion. DoubleClick, which also owns ad networks, was acquired by Google for $3.1 billion. Dozens of other networks have sprung up — one tally at eConsultant lists more than 80. “There’s no slowdown in terms of a really targeted ad spend,” said Mitch Lowe, whose network, Jumpstart Automotive Media, handles ads for 12 automotive sites. (Jumpstart was sold to Hachette Filipacchi Media last year for $110 million.) However, the reliance on ad networks mean that two of their major attractions — that they are simple and that they are cheaper — are diminished. “These are the gold rush days now for ad networks,” said David Hallerman, senior analyst with eMarketer. “And that kind of counters the appeal of ad networks for advertisers’ agencies, which was to simplify the purchase of ads. And that’s why its unlikely that a great number of ad networks will survive.” Even given the choice of ad networks, the continued flow of dollars online means that prices are rising. Mr. Townsend says that his clients were happy with their campaign and want him to do a similar one. Except this time, they want him to hit the networks even harder. “We thought,” Mr. Townsend said, “for this amount of dollars, we can get you this many more impressions than we did.”

Computers and the Internet
Advertising and Marketing
Yahoo Inc
Google Inc


A Muckraking Magazine Creates a Stir Among Evangelical Christians

Abstract: In October, Mark Driscoll, the evangelical pastor and best-selling author, resigned from Mars Hill, his Seattle megachurch. This month, Mars Hill announced that it was dissolving its network of 13 satellite churches. In the aftermath of his fall, Mr. Driscoll, who was known for his autocratic management style, his quashing of dissent and his unusually frank talk about how Christian wives can please their husbands in bed, had himself to blame. In resigning, Mr. Driscoll admitted his failings, citing his “past pride, anger and a domineering spirit.” But Mr. Driscoll cannot take all the credit for his own downfall. For one thing, any faithful Christian would give Satan his due, for leading Mr. Driscoll astray. Then there is the role played by World, an evangelical Christian newsmagazine that broke one of the most damaging stories about Mr. Driscoll. In March, World reported that $210,000 in Mars Hill church funds had gone to a marketing firm that promised to get “Real Marriage,” a book written by Mr. Driscoll and his wife, on best-seller lists. World was not the only outlet to take on Mr. Driscoll. The blogger Warren Throckmorton, in particular, persistently chronicled concerns about Mars Hill for the website Patheos . But the story about best-seller lists was also not the first scoop for World, and Mr. Driscoll was not the first conservative Christian leader that the magazine had taken on. In October 2012, a World reporter, Warren Cole Smith, revealed that Dinesh D’Souza, the conservative author, filmmaker and activist, had attended a Christian conference with a woman not his wife — a woman he was introducing as his fiancée. Soon after, Mr. D’Souza resigned as president of King’s College in New York City. Founded in 1986 and based in Asheville, N.C., the biweekly World is edited by Marvin Olasky, the Bush adviser who helped popularize the term “compassionate conservatism.” Under Mr. Olasky, who became editor in 1994, the religious magazine has become one of the few that do investigative reporting. The Jewish newspaper The Forward gleefully reports on the foibles of communal leaders, and Commonweal, run by lay Catholics, publishes work critical of the Roman Catholic hierarchy. But evangelical Protestant journalism is generally more public relations than reporting; World stands out as an exception. “We’re a Christian publication but not a movement organ,” Mr. Olasky said. “So we can publicly criticize Christian leaders from other organizations. Other publications tend to be more within the camp” — published by a particular denomination, for example — “and they don’t want to engage in criticism.” Mr. Olasky said the founder of World, Joel Belz, regretted that it had been the secular press — led by The Charlotte Observer — that helped bring down the evangelists Jim and Tammy Faye Bakker , who were accused of misusing ministry funds in the late 1980s. “Joel said, ‘Gee, I wish we had done that,’ ” Mr. Olasky recalled. “We don’t want to leave it to the secular press to expose wrongdoing within the church.” Mr. Olasky said that there is no contradiction between Christian faith and reporting on the dark side of Christianity. “We don’t have to cover up, because we do have faith that God forgives and saves the sinner.” Mr. Belz is no longer editor, but he still writes a column for World. He said that he got the idea for a Christian newsmagazine from readers of a children’s publication that he had founded. After moving to Asheville to edit a small, failing magazine called Presbyterian Journal, he conceived the idea for a new venture, a Christian version of the old Weekly Reader that he had loved as a child in Iowa. “I thought if we could do something like Weekly Reader for the growing Christian private-school market, there might be a real market for that,” Mr. Belz said. The children’s magazine he founded in 1981, then called It’s God’s World, was a hit, and is still published in several editions. “Then the parents got back to us and said, ‘We like this, we read it with our kids, and when will you do something like this for adults?’ So it was the child of the children’s magazine.” When asked whether other evangelicals have criticized World for its investigative reporting, Mindy Belz, Mr. Belz’s sister-in-law and a top editor, recalled the response to a series about sexual abuse at a missionary school in Senegal run by New Tribes Mission. “We were accused of hurting New Tribes, the teachers, and the people who had already dealt with the past,” Ms. Belz said — in other words, it was over and done with, or so some believed, so why make news of it? “People will say it’s not right for Christians to talk this way about other Christians,” she said. “We just think there’s a real truth-telling component to any journalistic enterprise.” The members of the small staff at World are mostly evangelical Protestants, of varying denominations. But there is no statement of faith to sign, and at least one Roman Catholic writes for the magazine (he’s a music critic). Lynn Vincent , the evangelical ghostwriter behind the monster hit “Heaven Is for Real” and Sarah Palin’s autobiography, “Going Rogue,” wrote for World for over a decade, until 2009. One of her favorite World pieces was an article she wrote about sexual abuse of women by Protestant pastors — a story, she said, “directed by truths found in Scripture.” “This is no different than other major publications today, whose reporters are guided by generally settled orthodoxies,” Ms. Vincent said in an email. For example, she said, most journalists treat abortion as “a morally neutral medical procedure that ends an unwanted pregnancy.” By contrast, she said, her reporting on abortion “is based on the scriptural admonition to defend the weak, and the teaching that ‘children are a heritage from the Lord.’ ” (That is Psalm 127.) “Marvin believes that sometimes you have to tear the scab off for healing to happen,” Terry Mattingly, the founder of the blog GetReligion.org , which tracks representations of religion in the secular media, said of Mr. Olasky. “He is running Rolling Stone for cultural conservative evangelicals. It’s just that Rolling Stone isn’t going to tell you what their Bible is — maybe it’s the Kinsey Report?” he said. “Marvin will hand you one of his.”

World
Evangelical
Mark Driscoll
Mars Hill Church
Dinesh D'Souza
Magazine
Christianity


Facing Crisis, Congress Makes Sense

Abstract: Congress has an endless capacity to disappoint. A scandal erupts, and it rushes to pass legislation full of unintended consequences. Then, when no one is looking, it strips away regulations the country needs. Ideology too often trumps common sense. Partisanship too often gets in the way of practical solutions. It’s an old story, I know. And then there is a week like this one, a week that’s almost enough to restore your faith in the United States Congress.  Around 9:45 on Wednesday morning, William Frey took a seat in the hearing room of the House Financial Services Committee. Mr. Frey, 50, is a broker-dealer who trades mortgage-backed securities. A few weeks ago, he caught the attention of the committee chairman, Barney Frank , when The New York Times reported that he had sent letters to servicers of mortgages contained in mortgage-backed securities, threatening to sue if they dared to modify mortgages for struggling homeowners. Mr. Frank was livid. For months, he has been jawboning lenders to do more to prevent foreclosures, and it has been like whistling in the wind. Yet as slow as banks have been to get with the program (which they are finally starting to do), Wall Street has been worse, doing virtually nothing about the $2 trillion worth of mortgages trapped in securitized mortgage pools, those so-called toxic assets. Indeed, Mr. Frey’s letter seemed to suggest that the big boys on Wall Street actually wanted people to lose their homes. Within hours of reading the Times article, Mr. Frank and several other Democrats put out a news release demanding the scalp of both Mr. Frey and a second hedge fund manager mentioned in the Times article. Mr. Frank also demanded that Mr. Frey appear at a hearing to explain why he was unwilling to allow mortgage modification. At the hearing, however, Mr. Frey was not at the witness table. He was in the audience. At the last minute, Mr. Frank had decided to withdraw his invitation. Most people would view such a reprieve as a gift from the gods, but not Mr. Frey. When I met him not long ago, Mr. Frey explained that he wasn’t really trying to stand in the way of preventing foreclosures. In fact, he had devised a plan months ago to deal with securitized mortgages, by having Fannie Mae and Freddie Mac buy them at face value and then refinance them. This of course would cost the Treasury tens of billions of dollars, but as Mr. Frey saw it, it was the only possible solution. Anything else would have the effect, he believed, of violating the contract between the servicer and the investors, which never anticipated the housing meltdown and lacked language that would allow for mortgage modification. And interfering with contracts is bad business — that’s the road to Russia or Venezuela. Mr. Frey also believes that he is the only person in the business willing to speak this painful truth. When he learned that the other hedge fund manager called on the carpet by Mr. Frank, Harvey Allon of Braddock Financial, was now saying he’d been misunderstood, Mr. Frey was contemptuous. He wanted to testify, he said, because somebody needed to give the committee some straight talk about securitized mortgages. Having gotten to know him these past few weeks, I couldn’t help suspecting another motive, however: since that original Times article, he had discovered that he liked being in the newspaper. A juicy confrontation with a sharp-tongued committee chairman would surely provoke a headline or two. At first, I couldn’t understand why Mr. Frank wouldn’t want a foil like Mr. Frey on the panel of witnesses. Instead, he had invited four milquetoasts, including representatives from Bank of America and JPMorgan Chase, whose primary goal was to present their institutions as the homeowners’ best friends. (To give them their due, both institutions have mortgage modification efforts under way that are better than anything the government has going.) A third witness was a lobbyist for the hedge fund industry who said things like, “Bold, proactive steps need to be taken.” (Zzzzzz.) And then there was Tom Deutsch, a lobbyist for the securitization industry. His job, not surprisingly, was to play down the problem. There were eight times more securitized mortgages being modified today than there were a year ago, he said. The fear of lawsuits was wildly overblown, he insisted. “Industry participants have been and will continue to deploy aggressive and streamlined efforts to prevent as many avoidable foreclosures as possible,” he said. Mr. Frank wasn’t buying it. Nor should he have been. Yes, some securitization contracts allow for mortgage modifications, but most do not. At IndyMac, for instance, which the Federal Deposit Insurance Corporation has taken over, the agency has sent letters to 9,000 people who hold securitized mortgages it believes it can modify. But it has also found another 20,000 it can’t touch. “I would like to believe what you are saying,” a skeptical Mr. Frank told Mr. Deutsch. “But as Chico said to Groucho, ‘Who are you going to believe, me or your own eyes?’ ” In response, Mr. Deutsch told the committee that his organization, the American Securitization Forum, was working on a solution to the problem by bringing “all the parties together that own mortgage-backed securities to create a streamlined process.” In other words, all the investors were going to get in a room together and figure out how to redo the contracts to make mortgage modifications possible. Or so Mr. Deutsch seemed to be promising. That was exactly what Mr. Frank had been waiting for. He pounced. “Tell them that if they are worried we will intrude legislatively, they can make us go away. But only if their effort works, and is meaningful,” he said. And that is when I realized Mr. Frank’s intent. Earlier in his career, perhaps, he might have enjoyed a confrontation with Mr. Frey. But now, as the most powerful Congressional Democrat grappling with the financial crisis , he had more important things on his mind. He had called this hearing to deliver a message to the securitization industry. Mr. Deutsch was his appointed messenger. Afterward, surrounded by reporters, Mr. Frank sent the message again, even more strongly. “We cannot interfere with existing contracts,” he said. “And we are not going to spend a penny of taxpayers’ money buying up loans that should never have been made in the first place. But preventing foreclosures is at the top of the agenda. We’ll see if Deutsch can do what he says he can do. If not, we are poised to introduce legislation that they won’t like.” If that doesn’t move the securitization industry to do something to help homeowners, nothing will.  The next day, the scene shifted to the House Committee on Oversight and Government Reform, headed by Congress’s grand inquisitor, Henry Waxman of California. As a general rule, I don’t have much patience for Mr. Waxman’s accusatory style. He calls a hearing to investigate the cause of the cataclysmic bankruptcy at Lehman, and then spends the whole time berating the former chief executive, Richard Fuld, over his compensation. Hearings to him are blood sport, not fact-finding missions. Mr. Waxman’s hearing on Thursday was supposed to be an inquiry into the role of unregulated hedge funds in the credit crisis. To that end, Mr. Waxman had assembled five hedge fund billionaires, including Ken Griffin, head of the Citadel Investment Group; John Paulson, who made billions betting against mortgage-backed securities; and George Soros. With the exception of Mr. Soros, who arrived with a smile on his face and copies of his latest book under his arm, the hedge fund managers approached the witness table with expressions ranging from trepidation to dread. James Simons, who runs the hedge fund firm Renaissance Technologies, seemed to visibly shrink as the cameramen crowded around him. At first, it looked like Mr. Waxman was going to use the hearing the way he usually does: to hammer his unfortunate witnesses. Twice in his short opening statement, he pointedly mentioned that each of the five hedge fund managers had made more than $1 billion in 2007. But then Mr. Waxman asked his first question, and suddenly the tenor changed. “Do you believe that the collapse of large hedge funds pose systemic risk?” he began. “And does this justify greater federal regulation?” That question, in turn, provoked one of the most amazing hearings I’ve ever attended, not because sparks flew but because the hedge fund managers responded with answers I never thought I would hear in my lifetime. They all agreed with Mr. Waxman, and with the other Congressional questioners, that in certain cases hedge funds could indeed pose systemic risk. All but Mr. Griffin said they would favor at least some regulation of hedge funds. They all agreed on the need for more disclosure. They said they had no problem turning over now-hidden information about their portfolios to a federal regulator. Mr. Simons and several others (though, again, not Mr. Griffin) said that if Congress changed the tax laws in ways that caused them to have to pay more taxes, they would be O.K. with that. I almost fell out of my chair. As the hearing approached its end, Mr. Waxman happily ticked off all the things they had agreed to. Though they may all wake up tomorrow and wonder what had come over them during their testimony, what’s done is done. They can’t take their words back. And next year, as a new Congress and a new president begin the task of coming up with better regulations for the financial system, you can bet that the words of those hedge fund managers will be cited again and again. In fact, if you want to point to the day when hedge fund regulation became a foregone conclusion, it was this Thursday. Later, after the hearing was over, Mr. Waxman shook hands with Mr. Simons. “Thank you,” he said. “It was a good hearing.” Then he broke into a wide grin. “Very substantive,” he added. He sounded surprised.

United States Politics and Government
Subprime Mortgage Crisis
Frank Barney
Mortgages
Regulation and Deregulation of Industry
Waxman Henry A


Phoenix Counts $90 Million Loss Tied to Boycotts

Abstract: Boycotts threatened or carried out over Arizona’s new immigration enforcement law could cost the Phoenix metropolitan area $90 million in hotel and convention business over five years, Mayor Phil Gordon said Tuesday. The figure, which does not include incidental spending in restaurants and shops, was calculated after four organizations canceled conventions or conferences and a dozen others said they would abandon visits if the law was not repealed, he said. The fallout comes as the state, heavily dependent on tourism, struggles to right its economy. “I don’t think there ever would be a good time not to have $90 million,” said Mr. Gordon, a Democrat who opposes both the law and the boycotts. The law, scheduled to take effect in July, greatly expands the power of the local police to check the immigration status of people they suspect are in the country illegally and makes it a state crime, paralleling federal law, to not carry immigration papers. Several major civil rights groups have urged people to avoid the state in protest. Paul Senseman, a spokesman for Gov. Jan Brewer, a Republican, who signed the law on April 23, called boycotting the state “thoughtless and harmful” and said it was a distraction from the underlying issue of the federal government’s failure to control immigration and the border. “An economic boycott of Arizona just adds to the massive economic burden Arizonans have sustained for years due to the federal government’s failure to secure our borders,” Mr. Senseman said.

Arizona
Boycotts
Illegal Immigrants
Immigration and Emigration
Law and Legislation