last decade

DealBook: E-Mails Cited to Back Claim That Equity Firms Colluded on Big Deals

October 11, 2012 by NewsMaker Leave a Comment

Keith Bedford/ReutersHamilton E. James, president of Blackstone Group.

The private equity giants Blackstone Group and Kohlberg Kravis Roberts are longtime rivals that compete for multibillion-dollar deals. But during last decade’s buyout boom, according to newly released e-mails in a civil lawsuit accusing them of collusion, the two firms appeared to be on much cozier terms.

In September 2006, for instance, Blackstone and K.K.R. were both circling the technology giant Freescale Semiconductor. After a Blackstone group outbid a K.K.R. consortium to buy Freescale for nearly $18 billion, Hamilton E. James, the president of Blackstone, e-mailed his colleagues about Henry Kravis, the billionaire co-founder of Blackstone’s rival.

“Henry Kravis just called to say congratulations and that they were standing down because he had told me before they would not jump a signed deal of ours,” Mr. James wrote.

Obama Set to Request $1.2 Trillion Increase in Debt Limit

December 28, 2011 by NewsMaker Leave a Comment

This would be the final increase allowed under the budget agreement reached in August after the government came close to default. Since signing legislation to codify that agreement on Aug. 2, Mr. Obama has obtained two increases totaling $900 billion.

The budget agreement largely pre-empts the partisan debate over federal deficits and debt that the request might otherwise have touched off in Congress.

While the House, controlled by Republicans, could try to block the proposed increase in the debt limit, the Senate, with a Democratic majority, is unlikely to go along. If both houses of Congress voted to block the increase, Mr. Obama could veto the legislation.

The government’s need for more borrowing results from the fact that it spends far more than it raises in revenue; it makes up the difference by borrowing 36 cents of every dollar it spends. In the fiscal year that ended Sept. 30, the government spent $3.6 trillion and collected $2.3 trillion.

Despite record debt, the Treasury still finds that it can borrow at extraordinarily low interest rates, contrary to predictions by some Republican lawmakers, who had warned that soaring deficits would require the government to pay more to lenders and investors in Treasury debt.

In the last decade, the government has borrowed record sums to pay for the wars in Iraq and Afghanistan, tax cuts adopted under President George W. Bush and economic stimulus measures enacted in 2009 to address the worst economic slump since the 1930s.

Since President Obama took office, the debt has shot up 42 percent, to the current level of $15.1 trillion. Of that amount, $10.4 trillion is borrowed from the public, and $4.7 trillion consists of special-issue Treasury securities held by Social Security and other government trust funds. Debt held by the public, considered by many economists to be the more significant indicator, is 65 percent higher now than in January 2009.

Treasury officials said the debt often increased at the end of the year because of large interest payments that the government makes to Social Security and other trust funds. These payments will total $82 billion this month, the Treasury said. Money not immediately needed by the trust funds is invested in the special Treasury securities.

In September, the House voted to block Mr. Obama’s request to raise the debt limit by $500 billion, the second increase. However, the Senate had already turned back a similar move.

Representative Tom Reed, a Republican from upstate New York, who led the House effort, said, “Dealing with this national debt is one of the primary reasons why I ran for Congress — to stop the endless borrowing of Washington, D.C., on the backs of our children and our grandchildren.” He said the debt was a “threat to national security.”

Four House Democrats have introduced a bill to eliminate the statutory cap on the public debt. “There’s no reason to have a debt ceiling at all,” said one of the four, Representative Hank Johnson of Georgia. “It doesn’t restrain spending, since the spending has already been committed. It just threatens our credit, and it weakens our country.”

If the government got close to the debt limit again before the elections in November, a Treasury official said, “we would be able to invoke extraordinary measures to extend borrowing authority beyond the elections.”

To avoid defaulting, the Treasury has sometimes delayed issuing certain types of debt held by federal trust funds and by state and local governments.

Under the new budget law, Mr. Obama could have requested a larger increase in the debt limit if Congress had agreed on a constitutional amendment to require balanced budgets or if deficit-reducing recommendations from a joint committee had become law. The amendment was not approved, and the committee could not agree on any proposals.

This article has been revised to reflect the following correction:

Correction: December 27, 2011

A Web site summary with an earlier version of this article incorrectly listed the amount of the debt limit increase sought by President Obama. It is $1.2 trillion, not $1.2 million.

Article source: http://feeds.nytimes.com/click.phdo?i=ae8aded019aeb6f568c0dce661740793

Filed Under: Economy News Tagged With: budget agreement, last decade, trust funds

Generic Lipitor Sets Off an Aggressive Push by Pfizer

November 30, 2011 by NewsMaker Leave a Comment

As it loses its patent for Lipitor, the top-selling cholesterol drug, on Wednesday, Pfizer is completing relationships and shoring up discounts — like a reduced co-payment of $4 a month versus the $10 customers would pay for many generic prescriptions.

Some deals require pharmacies to reject prescriptions for low-cost generics, starting Thursday, and substitute a discounted name-brand Lipitor. Some deals have blocked generic makers from mail-order services that account for an estimated 40 percent of all Lipitor prescriptions.

The company’s aggressive strategy may offer lessons for drug makers facing similar losses of patent protection for other blockbuster drugs over the next few years, and may chart a new path for shifts between the big pharmaceutical companies and generic rivals.

Lipitor was the first drug to exceed $10 billion a year in sales, and accounted for almost one-quarter of Pfizer’s revenue in the last decade.

With Pfizer’s plans to try to maintain brand loyalty for the next six months becoming public, industry analysts have raised the company’s earnings outlook by 2 to 4 percent, and now estimate that it could retain 40 percent of the market through next year. Pfizer officials declined to comment on that estimate.

Aiding its chances is a stumbling start-up by generic competitors. Ranbaxy Laboratories, the Indian subsidiary of the Japanese drug company Daiichi Sankyo, won the right to bring the first generic version to market. But Ranbaxy has disclosed it is under federal investigation. It has not yet received Food and Drug Administration approval. Ranbaxy’s president has said it will be ready by Thursday.

Watson Pharmaceuticals of Parsippany, N.J., is a second competitor with a generic version of the drug authorized and manufactured by Pfizer. But Watson has to give about 70 percent of its profits to Pfizer, according to the investment house Sanford C. Bernstein Company. And Pfizer’s own deals are undercutting both Watson and Ranbaxy on price.

“Pfizer’s tactic of dressing up as a generics company is pulling the rug under the incentive system created to foster the development of generic drugs,” David A. Balto, a lawyer for some generic makers and a former policy director for the Federal Trade Commission, said Tuesday.

Pfizer’s strategy so far is limited to the first 180 days after Lipitor goes off patent. During that period, under law, generic competition is limited and the first entries have historically charged fairly high prices to recoup their costs. After the first six months, any company can enter the generic market, and prices plunge.

Although Ranbaxy and Watson have not yet announced their prices, one top Pfizer official said on Tuesday that its new discounts could be adjusted to beat any tit-for-tat reduction in the expected generic pricing.

“They are a set contract but they could change,” said David S. Simmons, president and general manager of Pfizer’s established products unit. “I mean, it’s at the discretion of two parties. They could change.”

Mr. Simmons said the intention of Pfizer’s discount was to keep Lipitor “at or below generics’ cost to the health care system.”

The discount is also extending to many Medicare prescription drug plans that will dispense Lipitor even if patients ask for generics, according to a memo released by an advocacy group called Pharmacists United for Truth and Transparency.

The memo, from CVS/Caremark, a pharmacy benefit management company, and dated Monday, notified pharmacies that the generic form of Lipitor would not be covered for 29 prescription drug plans it managed for Medicare Part D. Instead, any prescription claims for generic atorvastatin will be rejected with a notice saying: “Brand Lipitor will pay at generic co-pay.”

The company’s memo did not disclose the financial terms.

The government may receive the rebates that drug manufacturers pay to benefit managers and insurers if they are fully disclosed and characterized as rebates, not fees, according to a March report by the Office of the Inspector General for the Department of Health and Human Services. But benefit managers’ records may not be accessible or auditable, it added.

Article source: http://feeds.nytimes.com/click.phdo?i=49ffe153070fde0164f5d059aad4e3a6

Filed Under: Business News Tagged With: indian subsidiary, industry analysts, last decade

Digital Domain: In the Post Office Crisis, a National Paralysis

October 2, 2011 by NewsMaker Leave a Comment

It was also short-lived. Established in 1860, it lasted only as long as the territory it covered lacked the telegraph. Humans and horses could not match the speed of electrical signals. So when the transcontinental telegraph was completed in 1861, the company’s three investors reacted swiftly. It was shut down after only 18 months.

Now, 150 years later, the United States Postal Service is engaged in another race with technology, one it can’t possibly win. But because the service is a quasi-independent government agency, it continues to maintain the huge human and mechanical infrastructure that was assembled for a pre-Internet age.

The Postal Service proudly proclaims just how big it is. It has 574,000 employees, making it the nation’s second-largest civilian employer, after Wal-Mart. The service runs 215,625 vehicles, the world’s largest civilian fleet. Those vehicles traverse 1.25 billion miles annually and consume 399 million gallons of fuel. Its carriers serve 151 million homes, businesses and post office boxes.

And the Postal Service can’t resist a tacit little boast at the end of that long list of big numbers: It receives zero tax dollars for its efforts.

Bravo! But one could point out that this is the same Postal Service that posted multibillion-dollar deficits in the 2007, 2008, 2009 and 2010 fiscal years; another is expected to be reported for the 2011 fiscal year, which ended Friday. It is curious that 2006, the year before this dismal run of losses, happened to be the very year when total mail volume peaked. In 2006, some 213.1 billion pieces were processed. In 2010, the total was just 171 billion.

Stamped mail is the category that has declined most steeply in the last decade — 47 percent since 2001. “Standard” mail, the official euphemism for junk mail that until 1996 was called third class, dropped only 8 percent over the same period.

The decline in mail volume has been accompanied by widening losses: $8.5 billion for 2010, and a projection of nearly $10 billion for 2011.

The Postal Service, to its credit, acknowledges that it faces what Patrick R. Donahoe, the postmaster general, calls a new reality. In releasing results for the quarter ended June 30, the service described how “electronic diversion continues to cause reductions in first-class mail.” Revenue from first-class mail declined 8.7 percent from the period a year earlier.

The postal unions avert their eyes. They say that the service ran into trouble solely because Congress has required huge payments for future retirees’ health care costs. Silly me: I thought funding benefits fully was a good thing.

On its Web site, the American Postal Workers Union disputes the notion that “hard-copy mail is destined to be replaced by electronic messages.” Mail volume was down, it says, because its principal component — advertising — had fallen in the recession. “As the nation and the world emerge from economic stagnation, hard-copy mail volume will expand,” it asserts. But that, of course, ignores the rise of the Internet, and its ever-growing use for checking bills or sending payments — with no need for that army of 500,000.

The Internet can’t be used to tele-transport packages, of course, and our use of package delivery services, including the Postal Service’s, has grown with e-commerce. But the Postal Service is running large deficits, bumping up against the $15 billion limit it is permitted to borrow, and is on the brink of default unless Congress comes to the rescue.

Is this where the Postal Service wants to make its stand, as a package delivery service, one among several providers? Does anyone really care whether the Postal Service or U.P.S. drops the package at the doorstep?

A. Lee Fritschler, a professor of public policy at George Mason University and a former chairman of the Postal Regulatory Commission, says our Postal Service should be viewed not as a communications medium but as a broadcasting medium, spraying identical messages, in the form of “standard” mail, far and wide. If Congress had to bail out the Postal Service, it would effectively be subsidizing the private interests that use the service to distribute advertising cheaply. “Why on earth should our government be subsidizing a broadcast medium?” Professor Fritschler asks.

Some say subsidies are perfectly defensible if the service fulfills a noble civic function. Richard R. John, a historian at the Columbia University Graduate School of Journalism, points out that the post office ran a deficit during most years between the 1830s and the 1960s. But today, when junk mail is predominant, “postal management is unable to articulate a compelling vision of the public good,” he says.

In 1861, it was easy to decommission the Pony Express, a technologically obsolete, privately owned delivery service. A century and a half later, we have a delivery service whose raison d’être is rapidly vanishing before our eyes. This one is owned by all of us, however, and we are paralyzed, unable to decide what to do.

Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: stross@nytimes.com.

Article source: http://feeds.nytimes.com/click.phdo?i=6ca3edb6f231fae983bd7652bb950b13

Filed Under: Business News Tagged With: boast, last decade, mail volume

You’re the Boss Blog: How Much Information Do You Share With Employees?

September 8, 2011 by NewsMaker Leave a Comment

Courtesy of TerraCycle

Sustainable Profits

The challenges of a waste-recycling business.

Do you tell your employees everything that’s going on? Or only what you think they need to know? I have grappled with this question since I started managing a business.

Early on, I leaned toward limiting the information as I didn’t want people worrying about something that wasn’t their job and becoming distracted and unproductive. The problem was that when challenges came up I felt pretty much alone on them — and the staff was left guessing what was happening. Predictably, the lack of information fueled rumors and damaged morale.

Over the last decade of leading TerraCycle, however, my mindset has slowly migrated to the other side of this question. Today, I’m inclined to give as much transparency as possible. I say as much as possible because we don’t really give total transparency. Human-resource matters (such as company payroll or stock options), legal matters (of all kinds) and certain financial matters (like merger deals we’re working on) are not shared with the entire team. Instead they are shared with those who have responsibility over them.

But outside of these areas, our transparency is proactive and constant. All of our employees see everything — from what we invoiced that month to positive and negative changes with our clients — and they see it in great detail. Two years ago, we started a weekly reporting structure that requires every employee to send a weekly report to his or her manager. The manager comments back to the employee and then compiles the reports into a master departmental report.

This master report is then sent to every employee in the business, every two weeks. One week we do our United States departments, the following week we do international. I review each report and write detailed feedback to each department — trying to be very frank — and send that feedback is also sent to every employee. As a result, Mechi, who manages public relations for TerraCycle Argentina, will receive the same reports as Michael, our global vice president of brigades.

The benefits of this method have been astronomical. All of our 100 employees know exactly what is going on and can learn from what other departments are doing. It has created a feeling of ownership and trust, and it has fostered communication. It also brings issues to the forefront much faster than ever before and serves as our critical feedback engine — the feedback given by myself and by managers is not just fluff. So employees always know how they are doing and how their performance compares to their peers. (A friend of mine, David Hassel, recently started a company called 15Five.com, which automates this process.)

For example, we had a major retail success in Mexico earlier this year that involved Colgate and Wal-Mart. We deployed oral care waste collection programs (for your toothbrushes and toothpaste tubes) in every Wal-Mart in Mexico. Because of the weekly report procedure, our employs in other countries were able to see the program progress from planning to execution and were able to keep their local Colgate contacts up to speed, creating excitement and opportunities to do similar programs in other countries.

While we have not yet achieved 100 percent transparency, we have turned a non-transparent system into one that is as transparent as I think we can go.

Tom Szaky is the chief executive of TerraCycle, which is based in Trenton.

Article source: http://feeds.nytimes.com/click.phdo?i=01328c7426200c4d091399590080ace0

Filed Under: Small Business Tagged With: challenges, entire team, last decade

Advertising: Sign of Arrival, for Xinhua, Is 60 Feet Tall

July 26, 2011 by NewsMaker Leave a Comment

Xinhua, the news agency operated by the Chinese government, is leasing a giant sign, known as a spectacular, on 2 Times Square, the building that is the northern anchor of the district. The new LED sign, 60 feet high by 40 feet wide, is being built for Xinhua (pronounced Shin-wa) and is scheduled to make its debut next Monday.

Xinhua, which has recently expanded its business presence in the United States, is taking over the space on 2 Times Square that had been occupied for the last decade by the HSBC bank. The HSBC lease expired and was not renewed. The sign for Xinhua, which means New China News Agency, will be underneath the sign for Prudential, an American company, and above signs for Samsung (South Korean), Coca-Cola (American) and Hyundai (South Korean).

Chinese brands have previously occupied signs in Times Square. For instance, in the mid-1990s the 999 Pharmaceutical Company leased a painted vinyl sign atop two buildings at the southeast corner of Seventh Avenue and 48th Street.

And in January, the Chinese government ran promotional commercials on six oversize screens in Times Square featuring celebrities like the retired basketball star Yao Ming and the pianist Lang Lang. The campaign, deemed the biggest such effort by Beijing, was timed to coincide with the visit to the United States by the Chinese president, Hu Jintao.

Also, Haier, a Chinese company that makes appliances, has its name on a building at 1356 Broadway, at 36th Street.

Still, the arrival of Xinhua on 2 Times Square is significant because of the building’s premier location in the so-called crossroads of the world. In the 1970s and 1980s, Japanese and South Korean marketers like Fuji, GoldStar, JVC, Sony and Samsung began leasing signs on Midtown Manhattan buildings like 2 Times Square and its sibling, 1 Times Square. It was considered a signal of their arrival in the global consumer marketplace.

“A lot of Chinese companies are coming, or getting ready to come, into this country with their own brands,” said Jeffrey Katz, the chief executive and principal owner of Sherwood Equities, a commercial real estate firm with properties that include 2 Times Square and 1 Times Square and that also owns the subsidiary Sherwood Outdoor, which oversees the spectaculars on both of those buildings.

In May, Xinhua moved its North American headquarters from Woodside in Queens to a tower in Times Square, 1540 Broadway, at 45th Street. And last year, Xinhua introduced a 24-hour English-language broadcast service, China Network Corporation, or CNC World, that seeks to reach 50 million viewers around the world.

Xinhua also recently began aggressively marketing its news wire service, particularly in the developing world, with a goal of competing with news agencies like The Associated Press, Bloomberg News and Reuters. (The Reuters building at 3 Times Square, on Seventh Avenue between 42nd and 43rd Streets, is decorated with huge video ad screens.)

Like the Japanese and South Korean brands that came to Times Square to better familiarize the United States with their products, the arrival of Xinhua is a prominent expression of its ambitions with Americans, many of whom are either unfamiliar with the state-owned news agency or associate it with relics like Tass, the official disseminator of government news releases in the Soviet Union.

Executives of Xinhua did not respond to questions sent last week by e-mail asking about their decision to lease the sign at 2 Times Square.

According to Brian Turner, president of Sherwood Outdoor, Xinhua signed a long-term lease for the space, which he described as “in excess of six years.” He and Mr. Katz said they hoped the lease would be a harbinger of other Chinese brands coming to Times Square.

Mr. Katz dismissed a suggestion that the presence of a Chinese brand in such a marquee location might discomfort some Americans.

“They’re leasing it,” Mr. Katz said of the sign. “They’re not buying it.”

“That’s good for the home team,” he added.

Mr. Turner echoed Mr. Katz, noting the continuing presence on 2 Times Square of Coca-Cola and Prudential.

“There’s nothing more American” than those brands, Mr. Turner said.

The last change of signs on 2 Times Square occurred in 2009, when Hyundai replaced Pontiac, a brand that was discontinued by General Motors.

Mr. Turner and Mr. Katz declined to discuss the financial terms of the lease for the Xinhua sign. However, signs in top-drawer locations in Times Square can rent for as much as $300,000 to $400,000 a month.

The expansion efforts by Xinhua are driven partly by a desire to counter what officials in the ruling Chinese Communist Party say is widespread bias against China in Western media reporting. The idea, Chinese leaders said, is to burnish the country’s image and give China a voice to match its newfound economic might.

Many media analysts, however, are skeptical that Xinhua will make much headway anytime soon in markets like North America and Europe, where residents are sophisticated and often look askance at information delivered by news agencies owned by governments — any governments.

Also, reports by Xinhua on topics like Taiwan and Tibet, which are of considerable political concern to its government bosses, are not necessarily known for being objective.

Andrew Jacobs and David Barboza contributed reporting.

Article source: http://www.nytimes.com/2011/07/26/business/media/xinhuas-giant-sign-to-blink-on-in-times-square.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: business presence, last decade, mid 1990s

Off the Charts: Striving for Productivity, Chasing Germany

July 22, 2011 by NewsMaker Leave a Comment

New figures released by the European Central Bank indicate that progress is being made, but it is slow.

The figures show that unit labor costs fell 3.3 percent in Greece during the first quarter, and were off 2 percent in Ireland. In Germany, the star economy of the euro zone, unit labor costs fell 0.7 percent.

Those reductions were won at a terrible cost, however. Greece’s economy continues to shrink, while Ireland’s seems to have stopped losing ground but has yet to grow. Unemployment is above 14 percent in Ireland and even higher in Greece.

The accompanying charts show the changes in unit labor costs in Ireland and Greece, as well as in Germany and four other large economies that use the euro — France, Italy, Spain and the Netherlands. The E.C.B. said similar figures for Portugal, the other bailed-out euro country, were not available.

The first set of charts show the changes from the first quarter of 2010, just before the first Greek bailout forced the country to agree to a harsh austerity program, through the first quarter of this year, the latest figures available.

During that period, Greek unit labor costs fell 7 percent, nearly twice as much as those in Germany. Ireland’s costs were down almost 6 percent.

But all the other major countries continued to lose ground to Germany.

The second set of charts shows the changes in unit labor costs since the end of 2000, when Greece joined the euro zone. The figures are astounding. Germany’s unit labor costs declined nearly 7 percent over the period, a remarkable performance. All the other countries had increases, ranging from 11 percent in France to more than double that figure in Ireland.

If there were no euro, other European currencies would almost certainly have lost value against the German mark over the last decade. Instead, Germany’s trade surplus in goods rose sharply, while the rest of the euro zone’s combined trade deficit approximately doubled.

The reconvergence of the economies might be easier if Germany were to accept inflation, but it shows little inclination to do that. Indeed, largely because Germany has been growing at a rapid rate with some signs of inflationary pressures, the E.C.B. has begun to raise interest rates.

Unit labor costs are not the only variable in a country’s trade performance, of course. But they are important. The rest of the euro zone still has a long way to go if it is to regain the competitive position it had only a few years ago.

Floyd Norris comments on finance and the economy in his blog at nytimes.com/norris.

Article source: http://feeds.nytimes.com/click.phdo?i=3ff02972e01b7d32ab72588b4b8450e2

Filed Under: Economy News Tagged With: greece, last decade, productivity

Off the Charts: Adding to Jobless Woes, Little Turnover in the Workplace

July 16, 2011 by NewsMaker Leave a Comment

The Bureau of Labor Statistics reported this week that the rate of discharges and layoffs rose a little in May, to 1.27 percent of the work force. But the rate, which reached a record low of 1.11 percent in January, remains lower than it was for most of the last decade.

Unfortunately, hiring also remains very slow, although it has improved a little in recent months from the lows reached during the depths of the recession and credit squeeze.

In normal times the American labor market is characterized by a strong level of turnover; more than 4 percent of all jobs change hands each month. But that turnover rate plunged during the recession and has barely started to recover, as can be seen from the accompanying charts.

The low turnover rate is probably one reason long-term unemployment has become a major problem. Most job openings occur because employees resign, presumably because they find a better job or believe they will be able to do so. The vacated jobs are available to be filled, perhaps by people who had been unemployed.

Presumably the number of employees unhappy with their current jobs has not declined, but over the most recent 12 months, 13 million fewer people quit jobs than did so during the year before the recession began at the end of 2007. Many of those who did not resign may be unhappy and frustrated that they are not able to change jobs.

The decline in the number of people switching jobs may be partly a result of the collapse in housing prices. There are no doubt some workers who would like to change jobs and who could get better ones if they were willing to move. But with many homes no longer worth the amount owed on them, a move could be much more difficult than it would have been when real estate prices were higher.

The figures are gathered by the Labor Department through the Job Openings and Labor Turnover Survey, known as Jolts. That survey began in 2000, so there is a limited amount of history. The survey comes out more than five weeks after the overall jobs numbers are released, so it normally gets little attention.

It is possible that the slow level of turnover in the labor market has distorted the normal jobs report. In June, the government reported that total employment rose by 376,000, but that after the seasonal adjustment the increase was a disappointing 18,000. This year, much as in 2010, the job market has appeared to strengthen early in the year and then fade in the spring and summer.

But if reduced turnover means there is less hiring during the months when employers are usually adding temporary help, and fewer job losses in months that are seasonally weak, that could mean the seasonal adjustments are currently overstated. The seasonal adjustments add the most jobs during the winter months of January, February and March and subtract the most during the summer months of June, July and August.

If that is true, then the job picture was neither as good as it appeared in the winter nor as bad as it has looked over the last two months.

Floyd Norris comments on finance and the economy in his blog at nytimes.com/norris.

Article source: http://feeds.nytimes.com/click.phdo?i=cc680319a19488457cec9193b4159786

Filed Under: Business News Tagged With: labor department, last decade, lows

This Land: Texas Still Has Its Rustlers, and Men in White Hats Chasing Them

June 6, 2011 by NewsMaker Leave a Comment

This was not the handiwork of some crack addict, risking a kick to the addled head for the low yield of a heifer or two. This was a cow whisperer, cattle people told themselves. One of us.

The reports started piling up across South and East Texas. On March 15, for example, 26 calves vanished from a sale barn in the Houston County town of Crockett — the same night that a livestock trailer was stolen in neighboring Walker County. On May 3, 18 head of cattle disappeared from a sale barn in Milam County. Two nights later and 160 miles away, 28 head went missing from a sale barn in Nacogdoches County.

Enough was enough; these cattle didn’t just wander off to take in the night air. On May 6, Hal Dumas, a special ranger for the unique Texas and Southwestern Cattle Raisers Association — part industry advocate, part law enforcement agency — joined the Milam County sheriff in sending out a be-on-the-lookout alert, telling ranching communities everywhere of the rustler among them:

Locations are being hit in the early morning hours. … Suspects will probably be hauling a long goose-neck trailer between midnight and 3:30 a.m. … The stolen cattle are generally calves weighing between 350 and 500 pounds. …

Though the vigilante, string-’em-up response to cattle rustling has faded into the sepia-toned past, livestock theft still carries the whiff of the low-down cur. In the last decade, special rangers for the cattle raisers association investigated more than 11,000 cases of livestock-related thefts, and recovered or accounted for more than 37,500 head of cattle.

Stealing a cow is like stealing a factory, ranchers say, given that a healthy, breeding cow can return dividends for years. Some ranchers even grow fond of the animals they raise, no matter how abruptly these relationships may end at the stockyard gate.

Most of all, livestock are living bonds of communal trust — precious things of value, grazing close to the road. And when ranchers are ready to sell, they often unload their cattle into the easily accessible pens of sale barns a day or two before auction. The barn might have a security camera or a night watchman; then again, it might not.

Still, you can trust your mother, but cut the cards. That is why the 15,000-member cattle raisers association, founded in 1877 by a band of rustler-weary ranchers, has 29 special rangers, including Mr. Dumas, all with the power of arrest, all wearing guns and white hats. Using sophisticated databases (including a file of more than 100,000 registered brands) and plain common sense (checking cow pies for tire tracks), these rangers investigate thefts of livestock and property and inspect millions of cattle a year.

The rangers have the respect of cattle rustlers; they know this because a rustler said so. A few years ago, they helped to pen Jerome Heath Novak, a clever, clean-cut cattle rustler from a proud ranching family in Brazoria County who was so audacious in his nighttime thefts that he even stole livestock from Nolan Ryan, the baseball legend and Texas icon. He was caught only after taking to auction a stolen calf with a distinctive barbed-wire scar, which someone noticed.

Before being sent to prison, a remorseful Mr. Novak, then 27, sat down with rangers to help them understand the mind of the cattle rustler. He confessed to not liking sale barns with motion lights or people living on site, and said he avoided ranches and sale barns that had the cattle raisers association’s blue membership sign on display.

“I tried to keep away from that because it’s a band of members that will hold together and push the issue,” said Mr. Novak, who goes by Heath. “Someone else is there, behind them, backing them up.”

When he was done explaining, one of the rangers asked the larger question: “Why? Why, Heath?”

Article source: http://feeds.nytimes.com/click.phdo?i=5c241cbf2ddfcc69c399f6a0cda2dab2

Filed Under: Business News Tagged With: houston county, last decade, livestock trailer

Bucks: Best Advice Is to Stop Losing Money

May 9, 2011 by NewsMaker Leave a Comment

Carl Richards

Carl Richards is a certified financial planner in Park City, Utah. His sketches are archived here on the Bucks blog and on his personal Web site, BehaviorGap.com.

I’m more convinced than ever that Mark Twain was correct when he decided that he was more interested in the return of his money than the return on his money.

A couple of weeks ago, we discussed how often people in their 60s and 70s say that their primary residence of over 30 years was their best investment. This belief exists despite the fact that home values barely kept pace with inflation. How can this be, given that during the same time period average annual returns in various stock market indexes ranged from 8 to 13 percent?

Because for most people, it was the only investment that didn’t lose money!

While the same outcome may not apply to housing in recent years, the principle still applies to investing in general. Most of us are chasing the highest return, because that’s what investing is all about, right?

But the experience of many people has been that the well-intentioned search for the best investment actually cost them money. They bought at the peak and sold at the bottom, and their overall returns ended up being meager. I suspect lots of these people would gladly trade their actual experience over the last decade or more with simply having their money returned to them.

So, what if the key to investment success is to start by making sure that you don’t lose money? Could it be that accepting a lower rate of return might result in having more money than continuing the wild goose chase of this magical 10 percent we hear that the stock market delivers over time?

Part of the problem is that we focus on the wrong thing, like finding the very best investment or beating a particular stock market benchmark. Both are a wild goose chase. Having the money for a dignified retirement, however, is not. By setting real financial goals, we can quit chasing investment performance and focus instead on creating a plan for the future that makes sense.

Once a plan is in place, it may very well be that the best thing we can do with our investments is to simply not lose money and take the time and energy we were spending in the chase and focus on those things that we have more control over. Things like finding creative ways to earn or save more, or just enjoying the one life we have to live.

Article source: http://feeds.nytimes.com/click.phdo?i=ce985644f20678c021f0e4e310bfe017

Filed Under: Your Money Tagged With: 10 percent, last decade, rate of return