By ANN SANNER, Associated Press Writer 1 hour, 17 minutes ago
WASHINGTON - History may treat former President Ford well, but two of his predecessors were not so kind in their private comments. Lyndon Johnson joked about Ford's intelligence. Richard Nixon asked whether anyone listened to him. ADVERTISEMENT
Johnson reportedly would tap his head in mock sorrow when asked about Ford, saying, "Too bad, too bad — that's what happens when you play football too long without a helmet."
And that's not all the Democrat said about Ford, who played center on the University of Michigan football team and was the Wolverines' most valuable player in 1934.
"Jerry's the only man I ever knew who can't chew gum and walk at the same time," Johnson is quoted as saying.
In his autobiography, "A Time To Heal," Ford recalled Johnson's comments and said he "brushed off" the gibes until his speech at the annual dinner of the Gridiron Club in March 1968.
"Someone found an old leather helmet that I had worn at the All-Star game in Chicago in 1935 and, dressed in white tie and tails, I tried to put it on," Ford wrote. "When the flaps didn't fit easily over my ears, I grinned and said it was because 'heads tend to swell in Washington.' That brought down the house."
Nixon was quoted by confidante Monica Crowley in her book, "Nixon Off The Record: His Candid Commentary on People and Politics."
Crowley wrote of a conversation she had with Nixon in July 1992, when he criticized Ford and others for earning money from giving speeches on their presidencies.
"Since Ford, they are out there accumulating a fortune by selling the office — or their experiences in the office, anyway," Nixon told her. "I know it's tempting but it's just not right. Besides, when Ford talks, does anyone pay any attention?"
Despite Nixon's opinion, Ford told The Washington Post last year that his long personal friendship with Nixon played a role in his decision to issue the pardon for Watergate wrongdoing.
"I looked upon him as my personal friend. And I always treasured our relationship. And I had no hesitancy about granting the pardon, because I felt that we had this relationship and that I didn't want to see my real friend have the stigma," Ford told Post reporter Bob Woodward.
Ford had asked that his remarks not be released until after his death.
Charles O. Jones, a Brookings Institution scholar on politics, said the remarks were just "talk."
"What you say in politics — goodness, if you held everybody to what they said, I don't think Nancy Pelosi would ever meet with George Bush," Jones said, referring to the incoming Democratic House speaker and the president.
"I think most people who were politically savvy had a very high regard for Jerry Ford," he said.
Monday marks the start of the New Year. We saw new highs in 2006, but what lies ahead in 2007? How do you feel about the New Year? Do you see 2007 as a fresh new start or are you still mulling over setbacks from 2006? Hopefully, you're ready to make this year your best. Why worry about the past? The start of the New Year can be a time to make exciting new plans. Why not decide right this moment to make a New Year's resolution to hone your trading skills further and work hard to reach a new personal best? You can do it. Don't just say it; make it happen. Set realistic goals, outline a detailed plan of action, and strongly commit to it.
Does it all sound too simple? Perhaps, research studies have shown that New Year's resolutions often fail, but if you know why people fail and avoid repeating their mistakes, you can succeed. Psychologists Drs. Janet Polivy and C. Peter Herman have identified the reasons people fail. First, people set goals that are too hard to reach. They don't set modest, achievable goals. It's as if they set themselves up for failure. They set unrealistic goals, they fail quickly, feel disappointed, and just give up. Second, people underestimate the time it takes to reach their goals. For example, novice traders assume they can trade profitably in a matter of months, whereas seasoned traders emphasize that fully mastering the markets may take years. Third, people are not willing to admit that it is hard to change. Most people think a minimal effort will result in astounding progress. Trading the markets is not easy, though. If it were easy, many people would be making huge profits with minimal effort. If you are willing to make the effort, you will be one of the few to succeed, however. As any seasoned trader will tell you, becoming a winning trader will mean getting beaten down over and over again. It will hurt, but if you learn how to pick yourself up, and keep fighting, you will succeed. It is all a matter of admitting your limitations, working around them, and beating the odds. Most people are not willing to take a good hard look at their limitations and even fewer are willing to make the commitment to master the markets, especially when the rules seem to change from market to market. But if you make the commitment to succeed, you will.
Digesting the cold, hard facts, and making a plan for working around them can spell the difference between stagnation and moving to a higher level of mastery. Rather than accept your current level of performance, why not work hard to make more profits this year? Make a realistic plan of action, and put in the time and effort to make it succeed. Why not make 2007 your most profitable year ever? http://www.innerworth.com
1) Trading affects psychology as much as psychology affects trading – This was really the motivating factor behind my writing the new book. Many traders experience stress and frustration because they are trading poorly and lack a true edge in the marketplace. Working on your emotions will be of limited help if you are putting your money at risk and don’t truly have an edge.
2) Emotional disruption is present even among the most successful traders – A trading method that produces 60% winners will experience four consecutive losses 2-3% of the time and as much time in flat performance as in an uptrending P/L curve. Strings of events (including losers) occur more often by chance than traders are prepared for.
3) Winning disrupts the trader’s emotions as much as losing – We are disrupted when we experience events outside our expectation. The method that is 60% accurate will experience four consecutive winners about 13% of the time. Traders are just as susceptible to overconfidence during profitable runs as underconfidence during strings of losers.
4) Size kills – The surest path toward emotional damage is to trade size that is too large for one’s portfolio. We experience P/L in relation to our portfolio value. When we trade too large, we create exaggerated swings of winning and losing, which in turn create exaggerated emotional swings.
5) Training is the path to expertise – Think of every performance field out there—sports, music, chess, acting—and you will find that practice builds skills. Trading, in some ways, is harder than other performance fields because there are no college teams or minor leagues for development. From day one, we’re up against the pros. Without training and practice, we will lack the skills to survive such competition.
6) Successful traders possess rich mental maps - All successful trading boils down to pattern recognition and the development of mental maps that help us translate our perceptions of patterns into concrete trading behaviors. Without such mental maps, traders become lost in complexity.
7) Markets change – Patterns of volatility and trending are always shifting, and they change across multiple time frames. Because of this, no single trading method will be successful across the board for a given market. The successful trader not only masters markets, but masters the changes in those markets.
Even the best traders have periods of drawdown – As markets change, the best traders go through a process of relearning. The ones who succeed are the ones who save their money during the good times so that they can financially survive the lean periods.
9) The market you’re in counts as much toward performance as your trading method – Some markets are more volatile and trendy than others; some have more distinct patterns than others. Finding the right fit between trader, trading method, and market is key.
10) Execution and trade management count – A surprising degree of long-term trading success comes from getting good prices on entry and exit. The single best predictor of trading failure is when the average P/L of losing trades exceeds the average P/L of winners.
2) Emotional disruption is present even among the most successful traders – A trading method that produces 60% winners will experience four consecutive losses 2-3% of the time and as much time in flat performance as in an uptrending P/L curve. Strings of events (including losers) occur more often by chance than traders are prepared for.
I love this. But I will disagree and say that it can sometimes be 6-7 consecutive losses. Do you know what that can do to a psyche? However, in time, all those big winners will completely cover these moments. Normally, these moments also indicate you are in a market where you should not be going long stocks. A lot of times the market will be trending down or moving sideways. That is a hint to not be going long a large amount during these times.
A good physician knows that, before cure comes a diagnosis. You cannot treat a problem before you identify what that problem is.
All too often, traders assume that their performance problems are due to a single cause: trading the wrong chart pattern or indicator, having the wrong mindset, etc. As a result, they seek out one trading guru or coach after another, only to see their P/L head steadily south.
The reality is that there are quite a few reasons why trading might be unprofitable. Figuring out which might apply to you is the first step is getting the right help.
Here's a fourfold scheme that I have found helpful in conceptualizing trading problems:
1) Problems of training and experience - Many traders put their money at risk well before they have developed their own trading styles based on the identification of an objective edge in the marketplace. They are not emotionally prepared to handle risk and reward, and they are not sufficiently steeped in markets to separate randomness from meaningful market patterns. They are like beginning golfers who decide to enter a competitive tournament. Their frustrations are the result of lack of preparation and experience. The answer to these problems is to develop a training program that helps you develop confidence and competence in identifying meaningful market patterns and acting upon those. Online trading rooms, where you can observe experienced traders apply their skills, are helpful for this purpose.
2) Problems of changing markets - When traders have had consistent success, but suddenly lose money with consistency, a reasonable hypothesis is that markets have changed and what once was an edge no longer is profitable. This happened to many momentum traders after the late 1990s bull market, and it also has been the case for many scalpers after volatility came out of the stock indices. Here the challenge is to remake one's trading, either by retaining the core strategy and seeking other markets with opportunity or by finding new strategies for one's market. The answer to these problems is to reduce your trading size and re-enter a learning curve to become acquainted with new markets and methods. Figuring out how you learned the markets initially will help you identify steps you need to take to relearn new patterns.
3) Situational emotional problems - These are emotional stresses that are recent in origin and that interfere with decision making and performance. Some of these stresses might pertain to trading, such as frustration after a slump or loss. Some might stem from one's personal life, as in a relationship breakup or increased financial pressures due to a new home or child. Very often these problems create performance anxieties by putting the making of money ahead of the placing of good trades. The answer to these problems is to seek out short-term counseling to help you gain perspective on the problems and cope with them effectively.
4) Ongoing emotional problems - These are emotional patterns that predate trading and that show up in areas of life apart from trading. They include depression, anxiety, anger, attention deficits, and substance abuse. Such problems skew how people experience themselves and the world and lead to biases in processing information. As a result, it is difficult to trade (and manage risk) with consistency. The answer to these problems is to seek out competent professional help from a licensed psychologist or psychiatrist, including (possibly) counseling and medication assistance.
The important point is that not all trading problems are psychological in nature. Sometimes we need to work on the markets, sometimes we need to work on ourselves, and sometimes we need to do both. But first of all, we need to identify what our problems are. If you seek help for your trading concerns, make sure you do so from an individual who is experienced in both trading and psychology. If people only possess hammers, they'll treat you like a nail. You want mentors who possess multiple tools and who can design the kind of help that will be right for you.
For the trader, as the physician, diagnosing problems is the first step toward cure.
They'll start an insurgency now? Do you fight fire with fire? Somali has its work cut out, but it does have a well equipped military force.
Success is a State of Mind - - Tommy Bahama Profits always take care of themselves but losses never do. The speculator has to insure himself against considerable losses by taking their first small loss. - - Jesse Livermore The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the man of inferior emotional balance, nor for the get-rich-quick adventurer. They will die poor. - - Jesse Livermore
BOSTON -- Bill Miller's 15-year streak of beating the Standard & Poor's 500 Index is coming to an end. Article Tools
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Miller's $21 billion Legg Mason Value Trust was up 6.7 percent as of Wednesday, trailing the 16.5 percent gain of the S&P 500. The mutual fund is the worst performer of 108 "multicap value" funds tracked by Bloomberg that buy stocks managers perceive as being cheap. Miller's fund, which holds fewer than 45 stocks, was hurt by Amazon.com Inc. and UnitedHealth Group Inc.
"It's not the right portfolio for 2006," said Jeff Tjornehoj, a Denver-based analyst at Lipper who tracks the fund industry. "Perhaps it will be the right portfolio for 2007."
The Legg Mason fund has beaten the S&P 500 every year since 1991, rising at an average annual rate of 15.8 percent, compared with 11.9 percent for the US stock benchmark. Miller also manages the $6.7 billion Legg Mason Opportunity Trust, which is lagging behind the S&P 500 this year with its 14.2 percent return. Miller, 56, declined to comment.
The 15-year streak has helped Baltimore-based Legg Mason Inc. draw publicity and money from investors. Miller's fund had $750 million of assets in 1990 and Legg Mason was better known for its regional stock brokerage.
The company now oversees $891 billion after buying Citigroup Inc.'s asset-management unit a year ago in exchange for its brokerage business, making the company the fifth-biggest money manager in the United States. The company has since been eclipsed by BlackRock Inc., which bought Merrill Lynch & Co.'s mutual-fund division in September for $9.4 billion.
Investors added $11.5 billion to Legg Mason funds in the first nine months of this year, down from $54 billion during 2005. Individual clients put $289 million into Miller's fund, compared with $1.34 billion last year, according to data compiled by Boston-based Financial Research Corp.
Shares of Legg Mason have declined 21 percent this year because the company was slow to produce promised cost savings from the Citigroup deal and fund sales decreased.
Miller, who has helped run Legg Mason Value Trust since its inception in 1982, buys shares of companies he considers inexpensive relative to potential earnings growth. He's known for picking stocks that are out of favor and holding them for years. The fund's performance is ranked with others that have no limits on the market value of the companies they can buy.
He held 43 stocks at the end of September. His biggest holdings included AES Corp., Tyco International Ltd., Qwest Communications International Inc., Sprint Nextel Corp., and UnitedHealth.
Lipper's Tjornehoj said Miller isn't the only well-known value investor who's trailing the S&P 500. Ronald Muhlenkamp's $2.9 billion Muhlenkamp Fund returned 4.6 percent this year. Manu Daftary, who has the second-longest streak of beating the S&P 500 at eight years, also is struggling. His $967 million Quaker Strategic Growth Fund was up 5.7 percent as of yesterday.
Four of Miller's 10 largest holdings fell this year, including wireless-services provider Sprint Nextel, health insurers Aetna Inc. and UnitedHealth, and online retailer Amazon.com.
About 20 percent of the Legg Mason Value Trust was invested in technology companies as of September, including shares of EBay Inc., Yahoo! Inc., and CA Inc., which each fell more than 15 percent.
Miller bought homebuilder stocks Centex Corp., Pulte Homes Inc., and Ryland Group Inc. in the second half of last year as they fell on concern that home sales are slowing. The Bloomberg US Home Builders Index has declined 14 percent this year. Miller said this year he initiated positions too early.
By Juliette Garside Last Updated: 11:53pm GMT 30/12/2006
Some 10 per cent of television will be soon be watched via the internet rather than traditional broadcasts, according to the BBC.
Ashley Highfield, who is overseeing development of iPlayer, the BBC's video-on-demand service, believes that the medium will take off by 2008, with the potential to attract an audience as large as that of a terrestrial television channel.
A home computer user Early trials of the BBC's on-demand service showed that users spent 10 % of their video-viewing hours online
The average viewer spends 25 hours a week watching television, which means that video via the PC could account for two and a half hours a week. BBC2 and Channel 4 each attracted an average of just over two hours of viewing a week, according to the most recent figures available.
Next year will see the launch of both the BBC's iPlayer and ITV's video-on-demand service, hosted at itv.com. Both will serve TV programmes via the internet to home computers, with a mix of new shows and archive material.
Five, BSkyB, BT and NTL/Telewest have already launched on-demand services, but the amount and quality of material offered by each varies.
Highfield said: "It's a massive lack of supply that has kept this from becoming a mainstream activity. Once we and others open the sluice gates, the demand will match the supply. advertisement
"The real killer will be the ease with which video can be got round the house. More and more PCs can be plugged into the TV now. In 2008, wireless technology will take off in the home, and that's when watching video over the internet will become mainstream."
Early trials of the BBC's on-demand service showed that users spent 10 per cent of their video-viewing hours online, and Highfield expects this to hold true when the iPlayer is launched. The figure includes internet video watched on the television or home computers, as opposed to TV services broadcast by more traditional means such as analogue and digital terrestrial or satellite.
"We think that this service will be of most appeal to the 16 to 34-year-old audience, who are watching less TV," said Highfield.
The iPlayer will initially offer for download all programmes on BBC TV and radio from the previous seven days, plus a limited amount of archive material. It is likely to be launched after March, when the BBC Trust completes a review of the service.
The corporation will also begin a trial for its archive, a store of 1.2m hours of material dating back as far as the 1930s, with a view to making it more widely available in 2008.
Meanwhile, ITV is planning to launch a 30-day catch-up service and release 1,000 hours of archive material via its itv.com website next March.
"As all the broadcasters start to release archive material, ie content you can't get on your TV, the market is going to explode," Highfield predicted.
As well as creating its own download site, the BBC also intends to make its shows available via other download services, such as those already provided by BT and NTL/Telewest.
Highfield brushed aside claims that placing the BBC's entire archive online would make rival commercial services unviable. He said: "We should create the demand and the standards that enable everyone to offer public services for free and commercial content under a variety of pay models."
Is It Time to Add a Parking Lot to Your Portfolio? Ryan Donnell for The New York Times
Servicing corporate jets, like this one in Philadelphia, is one of the infrastructure businesses run by a Macquarie investment trust.
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Article Tools Sponsored By By TIM GRAY Published: December 31, 2006
PHILADELPHIA
A PARKING lot near the Philadelphia International Airport offers a host of high-end services: valet assistance, online reservations, even a loyalty rewards program. But the niceties can’t hide an outback location. Tucked between Interstate 95 and a field of chemical storage tanks, it lies at the end of a boulevard lined with body shops and strip clubs. About a mile from the airport’s terminals, it’s an alternative to the more costly municipal parking choices there.
The lot and dozens like it around the United States are owned by the Macquarie Infrastructure Company, an investment trust directed by the Macquarie Bank of Australia. The trust, which buys entire businesses, is among three Macquarie affiliates — the others are closed-end mutual funds — that trade on the New York Stock Exchange.
This Aussie trio gives retail investors the chance to invest in infrastructure — a more formal term for workaday enterprises like parking lots, toll roads, bridges, airports and aviation services.
This year, the Macquarie Infrastructure Company returned 15.2 percent, compared with 13.6 percent for the Standard & Poor’s 500-stock index. Macquarie’s two closed-end funds in the United States are Macquarie Global Infrastructure Total Return, up 38.4 percent this year, and Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income, up 16.2 percent. (Macquarie Bank is the subadviser of the second fund for First Trust Portfolios of Lisle, Ill.)
All three have been listed in the last three years, and neither of the closed-end funds can hold shares of the trust. All three are distinct from the Macquarie Infrastructure Group, which trades in Sydney and has made several high-profile investments in American highways, including the Indiana Toll Road, the Skyway in Chicago and the Dulles Greenway in Virginia.
Macquarie Bank says parking lots and roadways are potentially as valuable as oil pipelines or electric companies. It views a private parking lot, for example, as operating much like a utility: throwing off lots of cash, increasing its rates as the economy grows and often chugging along with little direct competition.
Macquarie Bank holds a dominant position in this fledgling niche. It invests worldwide through more than 30 listed and unlisted funds and manages more than $35 billion worth of infrastructure equity. Its success has spawned imitators: such well-known firms as Goldman Sachs and the Carlyle Group have been creating infrastructure funds, typically geared to institutional investors.
Some analysts raise questions about the amount of debt sometimes carried by the Macquarie Infrastructure Company for acquisitions and the fees Macquarie Bank charges for the management and investment banking provided to its United States affiliates. Before a recent secondary stock offering, the Macquarie Infrastructure Company had a debt-to-equity ratio of 2.49, compared with 0.73 for the average company in the S.& P. 500, Reuters said. A higher ratio indicates potentially more risk for investors.
And Macquarie Bank charges its affiliates handsomely for its services, as when the Macquarie Infrastructure Company hires the bank when acquiring assets. The fund also pays a flat management fee as well as a chunk of its profits to the bank.
Ted Gardner, an analyst based in Houston for Raymond James Financial, compared the compensation arrangement to that of a private equity firm. “They’re definitely taking care of themselves on the advisory fees,” he said. But the Macquarie Infrastructure Company has a longer investment horizon than private-equity competitors. “They’re not trying to get out in five to seven years,” he said.
Even a fan said that the bank receives a lot for what it gives. “The fees are rich, but most of them are performance-based, and as a result, I think they earn what they get,” said Donald B. Gimbel, senior managing director at Carret Asset Management in New York.
Macquarie defends the fees and its use of debt, pointing out that the fees depend largely on its performance and that its steady assets generate plenty of cash for debt repayment.
No one questions Macquarie’s smarts in infrastructure. It was a pioneer in this area; Australia’s government was one of the first to privatize roads and airports, helping to create the niche. The company has grown into Australia’s largest investment bank on the strength of its international expertise.
“They’ve got people looking at deal flows worldwide, and they’re very good at locating deals,” said Babak Zenouzi, senior vice president and portfolio manager at Delaware Investments in Philadelphia. “Then they’ve got 450 or so people who help manage the assets.”
Macquarie executives say infrastructure is a new asset class, deserving a place in investors’ portfolios alongside the usual stocks, bonds, cash and real estate. According to this line of thinking, the durability and stability of the assets protect against the zigzags of stocks and bonds. In other words, London Bridge may fall down, but only long after Enron has crashed. Infrastructure can help to hedge a portfolio against inflation, said Martin A. Jaugietis, a senior consultant in the asset consulting group at Towers Perrin. “When prices rise, infrastructure assets tend to be able to increase prices in concert,” he said. “The cash flows are similar to the rent you’d get from a building.”
But Alan J. Marcus, a finance professor at Boston College, questioned whether infrastructure assets were “enough different that they warrant separate treatment” in a portfolio. “I doubt that this would be the case for most investors,” he said. “Gas versus electric utilities also are different, but would anyone make a case that they provide important opportunities for diversification?”
Macquarie’s work with toll roads and airports tends to grab attention, but its American mutual funds also own hefty stakes in utilities and related businesses like gas pipelines. At the end of August, for example, about three-fourths of the money in the Macquarie Global Infrastructure fund was invested in utilities or pipelines.
Although Macquarie says its closed-end funds belong to a unique asset class, some analysts see similarities to utility funds. “An easy way to think about Macquarie is as a utility player,” said Norman Young, an analyst at Morningstar in Chicago.
Jon Fitch, portfolio manager for Macquarie’s American closed-end funds, points out that utilities share a lot of characteristics with roads, bridges and airports. “If you look at what infrastructure is, it’s really the hard assets that provide essential services to a community,” he said. “It includes energy infrastructure like pipelines and power transmission. What we typically avoid are competitive types of businesses” like unregulated power generation.
Even the Macquarie Infrastructure Company trust, which collects much of its income from selling fuel for private aircraft, owns a natural-gas company in Hawaii.
A trait of Macquarie’s American offerings — and an attraction for income-oriented investors — is their high yield. Consider the Infrastructure trust. As a matter of policy, it pays out most of the cash its businesses generate, resulting in a yield of 6.2 percent. Each of the closed-end funds has a yield of more than 5 percent.
HOLDING little cash leaves scant room for mistakes or economic shocks, but it also disciplines Macquarie Infrastructure, said Josh Peters, editor of Morningstar DividendInvestor. “When they want to make acquisitions, they have to go to the capital markets, and that gives the market a veto,” he said. “If the market doesn’t like what the management has done,” the market “might be closed,” with investors unwilling to provide more money.
So far, the market seems impressed. This fall, Macquarie Infrastructure was able to raise $291 million in a secondary stock offering. It will use the money to pay off debt from a recent spate of acquisitions. And it will continue to prowl for future deals.
“People in the United States are used to infrastructure assets being in public hands, but that’s changing,” said Peter R. Stokes, chief executive of Macquarie Infrastructure. “Municipalities are challenged for tax revenues, and they’re evaluating what they’re spending money on.”
Published: November 27 2006 02:00 | Last updated: November 27 2006 02:00
I had the privilege last week of sitting close to Hank Paulson, the US Treasury secretary, as he told Wall Street's great and good how he intended to restore New York to its former dominance.
Mr Paulson started his speech to a lunch of the Economic Club of New York, as is customary, with a joke: "It's good to be in New York City, the financial capital of the world."
Ho-ho. Very dry. As his nervous audience knew, New York is not the world's financial capital any more than the US baseball championship deserves the title of World Series because the Toronto Blue Jays have a chance of qualifying. One of the world's leading financial centres, certainly, but not the only one.
Were Wall Street confident of its pre-eminence, Mr Paulson would not have been at the podium discussing the irritations of the Sarbanes-Oxley Act and corporate law suits. But the rush of companies to the Alternative Investment Market in London and the fact that London and Hong Kong now host many of the world's initial public offerings has dampened spirits.
As Mr Paulson spoke, big-wigs such as Tim Geithner, president of the New York Federal Reserve, and John Thain, chief executive of the New York Stock Exchange, were arrayed alongside him on a dais. From below, they resembled the disciples gazing at their Saviour in Leonardo da Vinci's "The Last Supper".
Wall Street has one of its own as Treasury secretary in Mr Paulson, the former chairman and chief executive of Goldman Sachs. After the eccentric Paul O'Neill and the ineffectual John Snow, his clarity and authority is a relief. He grasps the issues and their importance to New York and the US. He also has a sensible approach to making things better.
But I do not think Mr Paulson will be Wall Street's saviour. This is not simply because aiding millionaires and billionaires is now a low priority in Washington. Nor is it because his suggestions, such as culling regulators and switching from rules-based to principles-based accounting, are hard to implement, although they are.
Even if he could achieve them all, there are two reasons why the old order would not return.
First, the biggest foreign companies used to come to Wall Street because that was where the money was. They could tap into the US institutional and retail savings pool, and gain the attention of many New York-based hedge funds, only by obtaining a listing on the NYSE or Nasdaq.
This is no longer true. More money is managed in other financial centres, particularly London. In a report for the London Stock Exchange, the consultancy Oxera estimated that London had $7,600bn (£3,933bn) in equity assets under management last year, compared with $8,200bn in the four top US centres combined, including $3,100bn in New York.
Meanwhile, US money has flowed to companies abroad, rather than the other way around. The weaker dollar and the expansion in investment opportunities abroad led to Americans holding $3,100bn in foreign equities last year, compared with $700bn in 1995. Industrial & Commercial Bankof China did not need to list in New York to raise $19bn in its recent IPO; Hong Kong had the capacity.
Second, the expansion of US investment banks over the past two decades has exported Wall Street know-how to the world. I remember the awe and suspicion with which US techniques such as bookbuilding were greeted in the City of London in the mid-1990s. Even the term IPO was alien. Yet London is now at least equal to New York in innovation, particularly in derivatives.
London has been able to pick the best aspects of US practice and discard others. Underwriting fees for international IPOs remain much lower in London: they average 3.5 per cent on the LSE, compared with 7 per cent on Nasdaq and 5.6 per cent on the NYSE, according to Oxera.
These changes have amounted to a financial Marshall Plan, bringing US capital and expertise to the rest of the world. The US has been inept at exporting democracy, but it has done a fine job of spreading capitalism. "Sarbanes-Oxley has simply amplified a much broader trend," says Michael Tory, a senior investment banker at Lehman Brothers in London.
This has allowed companies in Asia to follow their inclination and list in Hong Kong, rather than having to trek across the world. Those from eastern Europe, Russia and the former Soviet Union, such as Kazakhmys, the Kazakh copper mining group, have been drawn to London, while big continental European companies have listed in Paris and Frankfurt.
The US government and regulators can do things to make Wall Street a more welcoming place for foreign companies. Among them are ameliorating the worst aspects of how Sarbanes-Oxley was implemented, and simplifying oversight. The NYSE and Nasdaq might also hold investment banks to account for charging far more at home than abroad.
None of this will alter the fact that the world is rebalancing. Last year is often cited as a particularly bad one for Wall Street: only one of the top 25 IPOs by value took place in New York. Yet Ernst & Young's global map of total IPO activity was not obviously distorted: 27 per cent by value took place in the US, 42 per cent in Europe, the Middle East and Africa, and 31 per cent in Asia.
Mr Paulson has the right idea about how to reform US financial markets and regulation, hard though that will be. Wall Street must do something tougher: become accustomed to its diminished place in the world.
Securities Fraud Lawsuits Fall to 10-Year Low in 2006 (Update5)
By Bob Van Voris
Dec. 29 (Bloomberg) -- Securities fraud suits fell to a 10- year low in 2006 due to a rising stock market, increased corporate controls and the indictment of one of the top investor law firms on charges it paid illegal kickbacks to clients.
Shareholders sued 120 companies for stock fraud this year through Dec. 29, according to data compiled by Bloomberg and the Stanford Law School Securities Class Action Clearinghouse. The total is the lowest since 1996, a year after Congress passed laws aimed at curbing securities fraud litigation.
The decline may stem from increased corporate governance rules and fraud prosecutions since 2002. That year, stock fraud suits hit a record-high of 267 after an accounting scandal forced Enron Corp. to file the second biggest bankruptcy in U.S. history. The collapse ushered in passage of the Sarbanes-Oxley law, which imposed stricter accounting rules.
``After the Enron period, there weren't going to be as many high-profile scandals,'' said John C. Coffee Jr., a securities law professor at Columbia University in New York. He said the stock market's performance this year, and the May indictment of New York law firm Milberg Weiss & Bershad, may have also tamped down the number of securities fraud suits filed. ``The stock market has been consistently up,'' he said.
Benchmark indexes are headed for their biggest annual gains in three years. The S&P 500 has climbed 14 percent in 2006, while the Dow Jones Industrial Average has gained 17 percent. The Nasdaq Composite Index has added 10 percent.
Artificially Inflated
Securities fraud suits often claim that companies hid negative information to prop up their stock price. Investors sue for losses that result when the information becomes public, and the artificially inflated share price drops. Most stock fraud suits, generally brought on behalf of all shareholders who suffered similar losses, are dismissed or settled before trial for a fraction of the claimed losses.
During 2002, when securities fraud suits were at their height, defendants included WorldCom Inc., Vivendi, Tyco International Ltd., Martha Stewart Living Omnimedia Inc., Adelphia Communications Corp., Merrill Lynch & Co. and Bristol- Myers Squibb Co.
Suits filed in 2006 targeted companies including General Motors Corp., Comverse Technology Inc., Rambus Inc., Apple Computer Inc., Dell Inc. and Pfizer Inc., according to Stanford Law School.
Options Backdating
The decrease comes in a year when at least 193 companies announced internal investigations or government probes of their policies for granting stock options to executives. The investigations have led to dozens of shareholder derivative suits, in which investors sue to recover money on behalf of the companies. Such suits are not counted among the securities fraud class action totals and often result only in mandated corporate governance reforms and payment of attorney fees.
Increased criminal prosecutions have led to a tightening of controls in corporate boardrooms, said Jacob Frenkel, a former U.S. Securities and Exchange Commission lawyer, resulting in more cautious accounting practices.
Robert Mintz, a white collar criminal defense lawyer and former federal prosecutor, said regulatory scrutiny has played a role as well.
```We are really beginning to see the impact of some of those changes as reflected in the decreased number of these class action lawsuits,'' Mintz said. ``The one-two punch of Sarbanes- Oxley and these flurry of high profile corporate criminal prosecutions has certainly changed the way corporations do business.''
Milberg Weiss
The number of 2006 filings was also restrained by the prosecution of Milberg Weiss, once the dominant firm representing shareholders, Coffee said. Since being charged, the firm has been losing attorneys and clients.
Milberg and two of its partners were indicted on charges they illegally paid clients to sue companies. The defendants pleaded not guilty in July. Anne Kosmoski, a spokeswoman for the firm, declined to comment.
``It's probably paralyzed, or at least constrained, the ability of that firm to bring new class actions,'' said Coffee. The prosecution may also have discouraged other firms from using ``professional plaintiffs,'' shareholders with ties to shareholder law firms who file numerous suits, to bring cases.
Milberg Weiss represented investors in half the securities fraud settlements between 1995 and 2002, according to a study published by the Stanford group. The firm split in two the following year.
To contact the reporter on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net . Last Updated: December 29, 2006 18:44 EST
Article Title: "Ironman Brett Favre Packs Plenty Of Gridiron Punch " Author: MICHAEL MINK Section: Leaders & Success Date: 12/27/2006 Brett Favre was handpicked in 1992 as the quarterback to lead the Green Bay Packers back to glory. But by 1994, it looked like the only place he was headed was to the bench.
Favre was a second-round pick of the Atlanta Falcons in 1991. When Ron Wolf became the Packers' general manager in 1992, he traded a No. 1 pick to the Falcons for Favre. Wolf had scouted Favre in college.
While Favre showed periods of brilliance in 1992 and 1993, he was plagued by inconsistency and threw too many interceptions.
The Packers came into the 1994 season with high expectations, but after seven games had only a 3-4 record.
Packer quarterback coach Steve Mariucci told Favre that head coach Mike Holmgren was thinking about replacing him, and that a couple of assistants felt the same way. Mariucci told Favre he'd fought for him, and Holmgren agreed to stick with him for at least one more game. Favre knew he couldn't afford to keep making mistakes.
He accepted the challenge. It was his defining moment.
"I don't know if Mike was just trying to get my attention, but it worked," Favre wrote in "Favre: For the Record," by Favre and Chris Havel. "I was (angry). We had that weekend off - we'd played (on) a Thursday night - and I went home to Mississippi. I did a lot of soul-searching, and when I came back I had one goal. I was going to be the best quarterback in the (National Football League)."
And he has been. The next year, Favre was named the NFL's Most Valuable Player, the first of three straight MVP awards.
Awards are impressive. But Favre knows where the real payoff is.
"To make my mark in Green Bay, we had to win. If you don't win, people don't notice you; I don't care how good you are. That's just the way it is," Favre said.
So how good is he? He's taken Green Bay to two Super Bowls and won one.
Yet Favre takes what he's achieved in stride.
"Brett's always been consistent in his approach to life and to football," Havel said in a recent interview. "He is a genuine guy. He's the same guy he was when he first started out. So money didn't change him; success didn't change him. Loyalty is one of (his) most endearing traits."
To Favre, his record of consecutive starts at quarterback (256 heading into the last week of the 2006 season) is his top statistic. It shows he'll play hurt and be there for his teammates and coaches.
"I've seen Brett on crutches after a game, through Thursday of a week, and he suited up on Sunday and had one of his better games," said Aaron Popkey, the Packers' assistant public relations director.
A quarterback must be a leader, and Favre works to be one.
"Brett really goes out of his way to be encouraging to guys. He very seldom chews people out," Havel said.
Favre shows respect to his opponents, and while opposing defenses try to punish him, they can't intimidate him. "I may get knocked down a lot, but I'll always get back up again," he said.
Favre shows confidence to his teammates by staying on an even emotional plane in a game.
"He's very smart. He makes good decisions. He's a leader, a playmaker; he's got it all. . Brett has an air about him that you know he's going to get it done. And we know we have a chance to win it all with him," said the Packers' offensive coordinator, Tom Rossley.
"I give 100% on the field," Favre said.
And he gives 100% in his preparation for game day.
"He is a tireless worker during the season," Wolf said. "Brett takes very good care of his body. He studies the game and has an inner desire to excel."
Said Popkey: "The energy he puts out on the practice field or in the meeting rooms is the same level that he takes out on to the field on Sunday. He loves practicing."
Favre has led the Packers to many come-from-behind wins. But his greatest comeback was personal. By 1995, Favre was addicted to the painkiller Vicodin.
He was taking 15 pills a night, stopping only two days before a game and starting up again after the game.
Vomiting and not eating became a regular part of his life. Taking responsibility and offering no excuses eventually saved it.
"I'm not going to blame my addiction on pro football. As an NFL quarterback I deal with pain constantly, but so does every other quarterback, and not all of them get hooked on painkillers," Favre wrote.
Pressure from his family, friends and his longtime girlfriend (now wife), Deanna Tynes, led Favre to make a decision. "It was a couple of days before Valentine's Day, and I thought, 'The best present I could give Deanna is to stop taking this stuff,' " Favre said.
He entered a rehabilitation center, where he stayed for six weeks. He also gave up alcohol. That season, 1996, he led the Packers to a Super Bowl triumph and won his second straight MVP award.
He was also on his way to fulfilling one of his goals: "When I came to Green Bay, I embraced that tradition. I figured that's what I'm here for, to be a part of Packers history. That means everything to me. Like winning MVP or the Super Bowl. I want to etch my name in this team's history."
This story originally ran Dec. 12, 2001, on Leaders & Success.
By Jan Paschal Reuters Monday, January 1, 2007; 8:05 AM
NEW YORK (Reuters) - When Wall Street returns to work after New Year's Day, stock investors will be in the mood to buy -- that is, if manufacturing and jobs data show modest growth.
After the U.S. stock market's surge in 2006, there may be an inclination to sell some shares and take profits early this week, said Muriel Siebert, the founder and president of Muriel Siebert & Co., a discount brokerage based in New York.
"It's only a three-day week. Since we've had such a powerful market, you could see people taking profits," said Siebert, who was the first woman to own a seat on the New York Stock Exchange.
Some clients who are retired have said they will examine their portfolios over the weekend to see which stocks to sell "so they start the year off with a cushion," she added.
But Siebert believes that pension funds and other investors will be shopping for equities next week.
"There's fresh money that comes in at this time of year," she said. "There's just so much money sloshing around. The hedge funds and the private equity people have put so much money into this market."
The U.S. stock market will be closed on Monday, January 1, for New Year's Day, and on Tuesday, January 2, to observe a national day of mourning for former President Gerald Ford, who died last week.
HOPING FOR FRIENDLY NUMBERS
U.S. stock exchanges will resume trading on Wednesday. The Institute for Supply Management will release its December manufacturing index on January 3rd at 10 a.m. EST (1500 GMT).
On Friday, the crucial monthly nonfarm U.S. payrolls report for December will be released at 8:30 a.m. EST (1330 GMT).
"The best-case scenario for the market would be for it to continue to get data that is moderate -- not too slow, to bring the economy into recession -- and not too strong, to bring the Fed back into tightening mode," said Keith Hembre, chief economist for First American Funds, a Minneapolis-based mutual fund group with about $70 billion in open-end funds.
"You're talking about data that's walking the line," Hembre said, adding that an ISM reading of 51 or above for December manufacturing activity would be "negative for the market because it would put growth back to a level that's too strong."
A reading below 49 would worry Wall Street because it would indicate the economy is weaker than expected, he added.
Economists polled by Reuters see the ISM's December manufacturing index at 49.9, just above November's 49.5 and a tick below the 50 threshold that separates expansion and contraction.
December nonfarm payroll growth is estimated at 110,000, according to economists participating in the Reuters poll. That would fall below November's reading of 132,000. The unemployment rate is forecast at 4.5 percent, unchanged from November, while average hourly earnings are pegged to go up 0.3 percent, not far above November's gain of 0.2 percent.
"If we get about 100,000 jobs in December, or maybe just a touch below, and a stable unemployment rate, that's a pretty favorable number," Hembre said. "That could stimulate trading.
"A lot of people will be coming back from vacation and they will be eager to put money to work," he added.
IT'S ALL ABOUT OIL
One caveat for the coming year, however, is the price of oil, Siebert noted.
"If oil stays where it is, then I think the increase in mortgage payments from the I-Os (interest-only) and adjustable-rate mortgages will not be as difficult for people," she said. "Our economy is pretty strong."
On Friday, NYMEX February crude oil (CLG7) settled at $61.05 a barrel -- just a penny above crude's 2005 closing price -- but down 22 percent from its July peak at $78.40.
"Oil is key because it triggers inflation," she said. "Oil goes into everything. It goes into gasoline and it goes into each can of canned goods you buy because it's delivered."
I remember these early years all too well ... my buds, and myself, tossed countless remote controls and other random objects in turnover anger ... now we worship this gun-slinger. Here in WI we all hope Brett comes back for another year ... though I would be content with his victory over the Bears headlining on New Year's Eve as his final NFL appearance -a great game/win over our arch rival, and true emotion at its completion by Brett ...
Article Title: "Ironman Brett Favre Packs Plenty Of Gridiron Punch " Brett Favre was handpicked in 1992 as the quarterback to lead the Green Bay Packers back to glory. But by 1994, it looked like the only place he was headed was to the bench.
Favre was a second-round pick of the Atlanta Falcons in 1991. When Ron Wolf became the Packers' general manager in 1992, he traded a No. 1 pick to the Falcons for Favre. Wolf had scouted Favre in college.
While Favre showed periods of brilliance in 1992 and 1993, he was plagued by inconsistency and threw too many interceptions.
This story originally ran Dec. 12, 2001, on Leaders & Success.
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