A New Start

FT: Financial models are no excuse for resting your brain

Financial models are no excuse for resting your brain

By John Kay

Published: January 28 2009 02:00 | Last updated: January 28 2009 02:00

US universities have been widely admired in the past two decades for their investment performance. They were early supporters of private equity and hedge funds and the Yale model has attracted interest among sophisticated investors. But Yale reported in December that its endowment had lost a quarter of its value in the preceding six months. Other institutions are in worse straits.

The model seems to be in question. But the idea behind it - that careful diversification can combine good returns with low risk - is as valid as ever. The problem is that some supporters of that approach put too much blame on sophisticated modelling techniques at the expense of their own knowledge and judgment. Banks made the same error in their risk assessments: their value-at-risk models had similar structure and origins to those in portfolio planning.

Quantitative portfolio management relies on measures of correlations between asset classes. These historical correlations are not universal constants but the products of particular economic conditions. Unless you understand the behaviour that produced them, you cannot assess their durability. In 2007-08, assets that had been uncorrelated were strongly correlated and many portfolio managers were surprised when the diversification they sought proved illusory.

Underlying causal relations had changed, as they frequently do in business. In the new economy bubble of the 1990s, equities roared ahead while property languished. But during 2003-2008, the availability of underpriced credit, followed by its abrupt withdrawal, affected property and shares in similar ways. Anyone in the financial world knew these things: but computers, churning through reams of data, did not.

Asset classifications change their meaning. The alternative asset classes that yielded strong returns in the 1990s for Harvard and Yale were hedge funds and private equity. But the increase in the number of hedge funds and the volume of their assets meant that an investment in the sector - once a bet on an individual's idiosyncratic skills - became more similar to a general investment fund. Hedge fund returns were therefore increasingly correlated with those of other investments.

Private equity was once a punt on small entrepreneurs. A manager with good judgment could make money from a few hits in a diversified portfolio. But by 2006 the sheer size of private-equity funds led them to focus on well established businesses. Such investments were a geared play on the stock market. They no longer spread risk: they concentrated it. Worse, many uncorrelated assets appeared uncorrelated in the past only because they were thinly traded and infrequently valued. Pressures to "mark to market" revealed the underlying correlations.

But, during the credit crunch, traditional forms of diversification have done what they are supposed to do. Gold, trading at about $650 per ounce before the credit crunch, is nearing $850. UK government stocks show a total return of 23 per cent from conventional bonds and 15 per cent from indexed bonds from July 2007 to December 2008: for global sovereign bonds, the sterling returns are 75 per cent and 41 per cent.

Diversification is a matter of judgment not statistics. A model will tell you only what you have already told the model and can never replace, though it can enhance, an understanding of market psychology and the factors that make for successful business. As a student of finance, I never expected to see the efficient risk-return frontiers I drew on the blackboard feature in PowerPoint presentations to meetings of trustees: or that these trustees would view the numbers that emerged as statements of fact rather than illustrations of possibilities.

People who were persuaded by these analyses have been badly hurt. Some will never pay heed to quantitative investment analysis again. Others will place equally blind faith in some new and fanciful construction. Both reactions are mistakes. Financial models are indispensable. So is scepticism in their application.

John Kay's latest book on finance and investment, The Long and the Short of It, was published on January 20

www.johnkay.com

Copyright The Financial Times Limited 2009

FT: Alternative Korea

Alternative Korea

By Matthew Engel

Published: January 17 2009 02:00 | Last updated: January 17 2009 02:00

Huge flocks of ring-necked parakeets have made their home in the county of Surrey, in south-east England, over the past few years. These exotic Asian birds have either charmed the locals by adding colour and diversity to the landscape or irritated the hell out of them, bringing forth complaints about their noise, diet and toilet habits. This is the traditional split of opinion on immigrants.

Just up the A3 in New Malden, the exact reverse phenomenon has taken place. Thousands of migrants have arrived, but so quietly that it took years for people to notice. They are Asian but their plumage is drab and conformist. They make no noise and create no waves.

This bland and discreet commuter suburb has received the blandest and most discreet influx imaginable. Yet, as you walk down the high street now, the phenomenon is obvious. New Malden has turned into Koreatown.

It would be no surprise to see a Korean restaurant anywhere in London these days. But in New Malden there are at least 20, backed up by Korean travel agents, estate agents, beauty salons, supermarkets and herbal remedy shops. And in places, it's impossible not to notice the distinct whiff of pickled cabbage. No one knows exactly how many Koreans live here, though it is thought there must be at least 15,000 in New Malden and nearby. The Land of the Morning Calm has merged with the Land of the Morning Rush.

Yet the locals only really cottoned on in 2002, when the South Korean soccer team reached the semi-finals of the World Cup. As the tournament went on, the community descended on the Fountain pub, which erected a big screen in the garden. Then a strange thing happened.

"Afterwards, you wouldn't even have known there had been a major event," said Derek Osborne, the local Liberal Democrat councillor and now leader of Kingston upon Thames council. "They even picked up every cigarette end in the garden, and the Koreans are heavy smokers."

The resentment created when poor migrants take over traditional working-class areas is well documented right across western Europe. This is a bourgeois invasion. Korea and Britain could hardly be more remote and different from each other. Yet these two groups, the Home Counties British and the Korean newcomers, are astonishingly similar: self-contained, reticent, desperate to avoid offence and very bad at making connections, partly because they are both hopeless at foreign languages.

The newcomers started to accrete here from the 1980s because the South Korean embassy was in nearby Wimbledon but New Malden was cheaper. Then the Korean conglomerates - LG, Samsung, Hyundai - emerged and set up London offices, where managers would be posted on threeto five-year contracts. Naturally, they wanted a ready-made expat community and welcoming landlords. "The Koreans are the most popular tenants in the area," says Chris Lee of Jin's Letting agency. "They look after the houses and the companies pay the rent."

But the isolation in the early days was total. The first Korean restaurant owner in New Malden put up a notice saying "No English", meaning that no one there spoke any. He soon had a visit from the council dealing with a potential racial discrimination charge. Integration was pitifully slow. Korean families work on traditional hierarchical lines: the men took the train to the office, leaving their wives to draw whatever support they could from their compatriots. And that's still how it works. Local officials have only the vaguest idea what might be happening within the Korean community. "If there is something negative to report, we don't tend to hear of it," said Brigitte Pfender of Kingston council. "Any social services or child welfare issues are not necessarily known. To take council help would be considered shameful."

But what evidence there is suggests the children are fine, although - by local standards - somewhat overworked. They need intensive language tuition when they come into the schools but often emerge as high-flyers. The teachers get annoyed solely because they put in the hard slog only to see the children take wing academically and then return to Korea before they can bump up the school's SAT results and league table placing.

The British find the Korean work ethic terrifying. The children take extra classes every afternoon and go to Korean school on Saturday. And church on Sunday is also the norm.

Ken Myung, a shipping agent who has been in the area since 1997, and his wife Rachel are among the growing minority who have settled here and started to anglicise themselves (they're still Kyung and Seoung to old friends). Their son Joshua/Yu Meen is only four, has just started at Malden Manor primary school and is already taking extra Korean and taekwondo lessons.

Malden Manor has 60 Koreans out of 430 pupils but reports minimal problems and many playground friendships. It is clearly harder for older arrivals, who turn up at secondary school with no English. But that can lead to an intriguing sub-phenomenon, whereby the women - who often find it hard to settle initially - stay behind when their husbands go home to allow the kids to pass UK exams.

There may be another consideration."One thing I can tell you about Korean women," says Ken Myung, "is that after two or three years, they don't want to go back. They get a lot of family pressure back in Korea."

Behind the leaded windows and net curtains of New Malden's mock-Tudor homes, the lives led by neighbouring families are always mysterious. That is doubly true when those neighbours are Korean. The community's politics are also fairly impenetrable. The Korean Residents' Society, which once played the leading role in sorting out problems, appears moribund following a disputed election so vituperative that even local councillors now shrug their shoulders rather than try to understand the issues involved.

And as the Koreans embed themselves, there are the beginnings of an underclass working in the shops and restaurants - some of them North Korean refugees who have extra-strong reasons to keep their heads down and their noses clean.

Overall, New Malden feels like a success story, as is South Korea. But we should never forget the people's pain - imagine life in Britain if there had been almost no communication for decades with anyone north of the river Trent. And it is easy to forget the drawbacks of any exile, however comfortable.

To an Englishman, the supermarkets on the high street look and smell like Korea. Not to a Korean. "It's different," says Ken Myung. "The taste is different. At home everything would be fresh. English vegetables don't taste the same."

And it is easy to forget the low-level irritation felt by the locals every time a long-established shop closes and gets replaced by yet another Korean business. That does seem to be as bad as it gets, though. As one woman put it to me, "If you're going to have an ethnic group in your community, I recommend the Koreans."

engelintheFT@aol.com

NY Times: Alcohol and Animals and People

==

This wasn’t an unfair supposition to make on her behalf: A large variety of creatures consume alcohol in the wild, ranging from bumble-bees to elephants. Hooch finds its way into their diets via the fermenting fruit, sap and nectar of various plants, and many exhibit signs of inebriation after they’ve enjoyed a good feed. Their weakness for the substance au naturel is understandable: ethanol is a rich food, with 75 percent more calories than refined sugar, and its distinctive aroma makes it easy to locate. This natural thirst has been exploited by man since the dawn of history. Aristotle noted that wild monkeys were caught by setting out jars of palm wine — the creatures would drink, then pass out, leaving them easy prey. The same method of trapping was still in use in the 19th century and commented on by Darwin in the opening chapter of “The Descent of Man,” when drawing similarities between humanity and the rest of creation. Monkeys could get drunk like men. They also got hangovers: “On the following morning they were very cross and dismal; they held their aching heads with both hands, and wore a most pitiable expression: when beer or wine was offered them, they turned away with disgust, but relished the juice of lemons.”

Interestingly, a few species of mammals including the slow loris and the pentailed treeshrew (with which we share a common ancestor) not only have a predilection for alcohol but also a natural tolerance. When the latter species find an especially rich batch of fermented palm nectar in their native Malaysian rainforests, they’ll visit it several times each night and consume the equivalent, in human terms, of nine standard drinks, without any evident deterioration in their behavior. Perhaps we drank deep before we were fully human?

Pigs, however, don’t come across much alcohol in the wild. But what about the tame variety? The propensity of a variety of domesticated animals to drink is well documented. Clearly, it’s cruel to force alcohol on them — tantamount to poisoning them: Mad Jack Mytton killed one of his horses when he made it bumper a bottle of port after it had won a race. However, some, including dogs, goats, cows, and pigs, develop a taste for it on their own. Aristotle noted that Greek swine became inebriated “when they were filled with the husks of pressed grapes.” A similar phenomena was common in colonial-era New England, where cider production and consumption, in per capita terms, were colossal, and where hogs were fed on windfalls and pomace (the pulp from the bottom of the cider press) both of which ferment. Their subsequent inebriation was often a matter of comment, and may have been the inspiration for the term “hog-whimpering drunk.”

= = =

Economist: One Tough Yahoo

Excerpt

In fact, none of this reveals much about Ms Bartz as a leader, nor about the real reason why Yahoo!'s board chose her. Her main qualification is that Ms Bartz has been tested in life as few people in Silicon Valley have. Her trials have turned her into a hardened, disciplined, occasionally ruthless, but often inspiring boss—exactly the sort of leader, it could be argued, that Yahoo! now desperately needs... She was born in Minnesota but lost her mother when she was a child, so her grandmother raised her in a small town in Wisconsin. This early setback appears to have left Ms Bartz with insecurities that would forever motivate her to achieve... She worked her way through college by serving cocktails, maintaining a Spartan exercise regime in order to fit into the uniform—a red miniskirt and black fishnet stockings.

Ms Bartz then went to work at 3M, one of America's blue-chip companies, in the 1970s. But when she requested a transfer to headquarters, she was told that "Women don't do these jobs." She walked straight out of 3M and into the computer industry. Eventually this led to her big break, when she was appointed chief executive of Autodesk. But there was a catch... Just as she began her new job, Ms Bartz was diagnosed with breast cancer. She was 43 at the time, and decided to fight on all fronts. She took a single month off work for a mastectomy and reconstruction, and then went back to her new job full-time, while having chemotherapy for seven months on the side. She defeated her cancer, gained weight and lost it again, and launched Autodesk into a period of astonishing growth.

==

Face value

One tough Yahoo!

Jan 15th 2009
From The Economist print edition

Life has tested Carol Bartz far more than even running Yahoo! will

Reuters

WHO is Carol Bartz? This week Yahoo!, a huge but floundering internet company, appointed her as its new boss. Ms Bartz is one of only a few women at the top in Silicon Valley, now that the female bosses of Hewlett-Packard and eBay have departed. She is also a weathered Valley veteran. She ran Autodesk, a software company based just north of San Francisco, for many years. She sits on the boards of technology giants such as Cisco and Intel; she used to work at Sun Microsystems and DEC; and she has a nice house and garden in Atherton, the Valley's swankiest suburb. A very safe choice, it would seem.

Too safe, some say. Ms Bartz, at 60, is strikingly old to be running a "Web 2.0" company that, along with Google and Facebook and the rest, needs street cred among college-age kids like Ms Bartz's own daughter, Layne. The first computer that Ms Bartz touched was a punched-paper-tape IBM 1620 in 1967, the sort that Yahoo!'s programmers today might have read about in the palaeontology module of their computer-science curriculum.

Then there is the matter of her experience. Autodesk is a successful but smaller company (about half the size of Yahoo!) that sells software to architects and engineers to help them visualise underground sewers, skyscrapers or aeroplanes in three dimensions. This has nothing whatsoever to do with consumer e-mail, web search or financial news, with online advertising or page views—in short, with Yahoo!.

Ms Bartz takes over from Jerry Yang, Yahoo!'s co-founder, who stepped in as chief executive in June 2007 when Yahoo! was already in crisis. Mr Yang made things worse by rebuffing Microsoft, which wanted to buy Yahoo! last year for $33 a share, a valuation that now evokes nostalgia (its shares are trading around $12). Mr Yang will return to his previous role of "chief Yahoo" and will remain on the board; his number two, Susan Decker, having been passed over for the top job, will depart. The well-connected Ms Bartz knows Mr Yang, since they both sit on Cisco's board. Might she be so close to Mr Yang that she will not want to risk offending him by putting Yahoo! through the wrenching pain it needs?

In fact, none of this reveals much about Ms Bartz as a leader, nor about the real reason why Yahoo!'s board chose her. Her main qualification is that Ms Bartz has been tested in life as few people in Silicon Valley have. Her trials have turned her into a hardened, disciplined, occasionally ruthless, but often inspiring boss—exactly the sort of leader, it could be argued, that Yahoo! now desperately needs.

She was born in Minnesota but lost her mother when she was a child, so her grandmother raised her in a small town in Wisconsin. This early setback appears to have left Ms Bartz with insecurities that would forever motivate her to achieve. She became a homecoming queen and a mathematics star in high school. She worked her way through college by serving cocktails, maintaining a Spartan exercise regime in order to fit into the uniform—a red miniskirt and black fishnet stockings.

Ms Bartz then went to work at 3M, one of America's blue-chip companies, in the 1970s. But when she requested a transfer to headquarters, she was told that "Women don't do these jobs." She walked straight out of 3M and into the computer industry. Eventually this led to her big break, when she was appointed chief executive of Autodesk. But there was a catch.

Just as she began her new job, Ms Bartz was diagnosed with breast cancer. She was 43 at the time, and decided to fight on all fronts. She took a single month off work for a mastectomy and reconstruction, and then went back to her new job full-time, while having chemotherapy for seven months on the side. She defeated her cancer, gained weight and lost it again, and launched Autodesk into a period of astonishing growth.

Her discipline was iron—and possibly excessive. To keep her family in Atherton, she commuted to the office, which required a long, traffic-clogged drive across the Golden Gate Bridge. To regain these lost hours each day, she spent the whole time behind her chauffeur reading and working, often stopping several times along the way to throw up out of carsickness. Her driver knew all the best places to pull over along Highway 101.

Secateurs at the ready

All of which exemplifies Ms Bartz's general approach to "work-life balance". To Ms Bartz the very notion is nonsense. You can "have it all", as she does, but only by cutting life into compartments and then ruthlessly maintaining the boundaries. When her daughter, whom she had at 40, was a baby, Ms Bartz spent three days a week looking after her at home in Dallas, where she was living at the time. On Mondays she handed the baby to her nanny and flew to Silicon Valley for four days of work; then she flew home again at midnight on Thursdays.

Unlike a lot of men in her position, Ms Bartz kept her power in perspective. She had groomed a successor at Autodesk and became worried that he might leave if she stuck around too long. So she made way for him and became Autodesk's chairman. "There is a real difference between managing and leading," she once said. "Managing winds up being the allocation of resources against tasks. Leadership focuses on people. My definition of a leader is someone who helps people succeed."

How, then, is she likely to make Yahoo! succeed? It is hard to imagine her trying to be geekier than the Young Turks at Google, Yahoo!'s larger and far more successful rival. Instead, she may approach Yahoo! as she does her life, or her garden in Atherton, stuffed at various times with everything from heirloom tomatoes to bearded irises. "If you don't kill a lot of plants along the way, you don't know how to garden," she once said. In short, if there is one person tough and unsentimental enough to disassemble Yahoo!, sell parts of it to Microsoft and merge others with some media company, it is Carol Bartz.

Copyright © 2009 The Economist Newspaper and The Economist Group. All rights reserved.

NY Times: Listening to Schroeder: ‘Peanuts’ Scholars Find Messages in Cartoon’s Scores

Listening to Schroeder: ‘Peanuts’ Scholars Find Messages in Cartoon’s Scores

By APRIL DEMBOSKY

Published: January 13, 2009

SANTA ROSA, Calif. — In a “Peanuts” strip from the mid-1950s, Charlie Brown walks through the first panel and finds Schroeder sitting in front of an adult-size hi-fi, his ear to the speaker. “Shh,” Schroeder says, “I’m listening to Beethoven’s Ninth.” Charlie Brown inspects Schroeder’s outfit. “In an overcoat?” he asks. Schroeder leans even closer to the speaker and responds, “The first movement was so beautiful it gave me the chills!”

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“Peanuts”/United Feature Syndicate

Scholars have analyzed the scores played by the piano-mad Schroeder in “Peanuts” and have found real Beethoven, including the “Hammerklavier” Sonata. More Photos »

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Schroeder’s (and Schulz’s) Muse

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Times Topics: Charles M. Schulz | Ludwig van Beethoven

In the world of “Peanuts,” of course, Schroeder was the Beethoven-obsessed music nerd who lost patience when Lucy interrupted his practice and who called time-outs as a baseball catcher to share composer trivia with the pitcher. Yet musicologists and art curators have learned that there was much more than a punch line to Charles Schulz’s invocation of Beethoven’s music.

“If you don’t read music and you can’t identify the music in the strips, then you lose out on some of the meaning,” said William Meredith, the director of the Ira F. Brilliant Center for Beethoven Studies at San Jose State University, who has studied hundreds of Beethoven-themed “Peanuts” strips.

When Schroeder pounded on his piano, his eyes clenched in a trance, the notes floating above his head were no random ink spots dropped into the key of G. Schulz carefully chose each snatch of music he drew and transcribed the notes from the score. More than an illustration, the music was a soundtrack to the strip, introducing the characters’ state of emotion, prompting one of them to ask a question or punctuating an interaction.

“The music is a character in the strip as much as the people are, because the music sets the tone,” Mr. Meredith said. To understand what gave Schroeder chills, he said, you have to listen to the musical passage. “When you actually hear the symphony, the whole thing feels completely different.”

That linkage is the central theme of “Schulz’s Beethoven: Schroeder’s Muse,” an exhibition at the Charles M. Schulz Museum and Research Center here, which was jointly organized with the Beethoven center. (It continues through Jan. 26 at the museum and will reopen on May 1 at the center in San Jose.)

Mr. Meredith spent more than a year identifying the compositions, gathering recordings and reinterpreting the strips; Jane O’Cain, the museum’s curator, researched Schulz’s artistic process and music-listening habits.

In the resulting show visitors can gaze upon the Beethoven strips, then tap a number into their audio guide and hear the music Schroeder is playing.

In a strip from 1953 Schroeder embarks on an intensive workout. He does push-ups, jumps rope, lifts weights, touches his toes, does sit-ups (“Puff, Puff”), boxes, runs (“Pant, Pant”) and finally eats (“Chomp! Chomp!”). In the last two panels he walks to his piano with determination and begins playing furiously, sweat springing from his brow.

The eighth notes above Schroeder’s head are from the opening bars of Beethoven’s “Hammerklavier” Sonata (Op. 106), a piece so long, artistically complex and technically difficult that it is referred to as the “Giant” Sonata. When Beethoven delivered it to the publisher in 1819, he is believed to have said, “Now you will have a sonata that will keep the pianists busy when it is played 50 years from now.”

According to the exhibition notes, classical music was as much a priority for Mr. Schulz as drawing was when he attended art school in the 1940s. He once said of his classmates, “We all collected classical albums, which we frequently shared on evenings when we got together to listen to music and challenge each other in wild games of hearts.”

Sue Broadwell, who worked as Schulz’s secretary from 1963 to 1967, said he played classical and other records — “he had a weakness for country western,” she said — in his studio while he worked. “He encouraged me to take a music appreciation course, which I did,” she said. “Every once in a while, as I was learning different pieces, he’d whistle some for me and I had to guess them.”

Mr. Schulz also regularly attended classical music concerts here with his family.

“He could sit almost perfectly still the whole time, without squirming, without crossing his legs,” said Jeannie Schulz, the cartoonist’s widow, who helped found the museum and serves as president of its board.

During concerts, she said, “he would pull a notebook out of his breast pocket and write something down,” adding: “Later in the car, he would say, ‘How would it be if Marcie and Peppermint Patty were at a concert, and ...’ He was always thinking about his characters.”

Although Schulz greatly admired Beethoven, his favorite composer was actually Brahms. He simply found that the name Beethoven — the way it sounded and the way it looked on the page — was funnier, the exhibition notes remark.

Accuracy and authenticity are hallmarks of the strips, whether they deal with music, sports or medical conditions, Ms. O’Cain, the museum’s curator, said. “With figure skating, he would carefully study books to make sure the jumps or spins that he had characters portraying, that they were correct,” she said. He would add subtle twists or inside jokes for readers familiar with skating or surfing or shorthand.

Mr. Schulz also mined Beethoven’s life for material. He had numerous books in which he underlined details about Beethoven’s love life, clothing, even his favorite recipe (macaroni with cheese).

“I have read several biographies of Beethoven — being strangely fascinated by the lives of composers, much more so than the lives of painters,” he said in 1975. As a result, Schulz fans like to point out, the strips are as educational as they are entertaining.

“What you thought was a funny tagline was an absolutely true story out of Beethoven’s life,” said Karen Johnson, the Schulz museum’s director.

Beethoven’s birthday was a perennial “Peanuts” event. Schroeder appeared in “Peanuts” for 49 years, and the composer’s birthday was acknowledged in 27 of them. Sometime in the 1960s Mr. Schulz hosted a real-life birthday party for Beethoven in his home in Northern California, according to Ms. O’Cain’s curatorial research. He drew Beethoven sweatshirts for each of the guests, two of which have been tracked down. One with the composer’s portrait is in the show.

The other, owned by Lee Mendelson, the producer of the Peanuts animated specials, features a full-body drawing of Beethoven — in a Schroeder sweatshirt.

SF Gate, Track and Field: Cut Above

Penn Relays Women’s DM — Follmar

Stanford’s Alicia Follmar took a hard fall on the leadoff leg of the Penn women’s distance medley. While she was on the ground, Follmar took a spike to the head but got up to finish a gutsy 3rd, the same position in which her team ultimately finished behind Michigan and Tennessee.

T&FN correspondent Shawn Price took these photos.

Stanford's Follmar was a cut above

John Crumpacker

Friday, May 2, 2008

Looking like something out of a teen slasher movie, Alicia Follmar of Stanford gutted out the final two laps of her race at the Penn Relays with blood streaming down her face and the right side of her body festooned with strawberry abrasions to earn the respect of coaches and teammates while becoming an Internet sensation in the process.

Haven't seen the photos yet? Go to trackandfieldnews.com and search for "Alicia Follmar."

"I didn't really know it was that bad," Follmar said Thursday, her noggin a little sore but otherwise sound of body and training to run the 1,500 meters Sunday evening in the Payton Jordan Cardinal Invitational at Stanford's Cobb Track & Angell Field.

"My head hurt a little bit. I looked at my hand and there was blood on it and I freaked out but I kept running. I guess it was dramatic enough people paid attention to it. I think it looked worse than it was."

At last weekend's Penn Relays, Follmar ran the leadoff leg for Stanford in the women's distance medley relay - a 1,200-meter start followed by legs of 400, 800 and 1,600 meters.

The junior from Saratoga, a two-time California State high school champion, became entangled with the legs of another runner after completing the first of three laps and hit the deck at Franklin Field to sustain those vivid abrasions.

Worse yet, a trailing runner inadvertently spiked her where the scalp meets the forehead. In third place at the time of the fall, Follmar picked herself up and held onto third with a career best 1,200 split time of 3 minutes, 26 seconds (the Cardinal finished the race in 11:05.48 behind Michigan, 10:49.58, and Tennessee, 10:50.51).

Afterward she needed five stitches to close the gash.

"I've never seen an athlete get up from something like that," Stanford coach Edrick Floreal said. "I was giving her kudos for getting up, and to finish the race, it was certainly impressive. That's a phenomenal split by itself considering she fell. She's in great shape."

Floreal hedged a little as to whether Follmar would run on Sunday but the bloodied but unbowed runner herself said, "I'm definitely going to run. There's no reason not to run."

It's a competitive field for the 7:01 p.m.-scheduled race featuring former Stanford standouts Lauren Fleshman and Sara Hall, current California prep standout Jordan Hasay, San Francisco's Shannon Rowbury and No. 8-ranked American Alice Schmidt.

Follmar said she hopes to improve on her best time of 4:17.90 while remaining competitive with the others. Her 15 minutes of fame on the Internet may draw a few more fans to the distance-dominated meet in which the featured races are from 6:30-9 p.m.

"A lot of people from home, people I don't even know, have e-mailed and messaged me," she said. "It's weird so many people saw it."

Follmar's parents want to get copies of the photos enlarged and framed, but their daughter tried to discourage them, saying, "I asked them not to. It's gruesome. I feel I've seen it enough times."

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/05/02/SP9L10F93R.DTL

http://www.trackandfieldnews.com/wp/?page_id=256

FT: What Tesco knows and Woolies forgot

What Tesco knows and Woolies forgot

By John Kay

Published: January 6 2009 19:34 | Last updated: January 6 2009 19:34

The cab driver was bemoaning the closure of the local Woolworths. “The problem, guv, is Tesco.” That company, he explained, offered better quality and value in the goods people used to buy at Woolworths.

I suggested this was a problem for Woolworths, but not for him. He would only repeat that Tesco was too powerful. I tried to respond that the failure of Woolworths demonstrated the opposite: that the power of a giant retailer lasted only as long as its customers wanted it to. Then we arrived at the station.

The abrupt end to the argument let me feel I was winning. I did not think I was winning when I talked to a group of health and education professionals, upset about recent reforms. They explained that what people wanted from medicine was good treatment, not choice of treatment. Having your appendix out was not like buying a dress, where some people wanted one thing and others another. All parents want to send their child to a good school, and choice just means that the best schools are oversubscribed.

I countered that this did not make choice a bad idea: it was evidence of failure to act on the very obvious signals that choice was giving. If there are queues at Tesco and the Woolworths stores are empty, then Tesco expands and Woolworths closes. But when some schools outperform others, nothing much happens. Choice is not an end in itself, but a means to the good services everyone seeks. Choice is working best when no one wants to exercise it.

But those who defend the market system are often the system’s worst enemies. I recently listened to a group of businessmen deploring the anti-capitalist tone of much of what is taught in schools. They had a point. But they spoiled it by promoting a description of capitalism that was at once repulsive and false.

They talked about “wealth creation”, although most of what they described seemed to be a diversion of wealth for the benefit of particular individuals rather than the creation of new wealth. They thought private sector activities – such as securities trading and automobile manufacture – created wealth; while public sector activities – such as health and education – used wealth up. They stressed that financial rewards were the mainspring of innovation, apparently unaware that material gain was not even at the back of the minds of those who invented computers, discovered antibiotics or created green revolution crops.

They explained that in addition to the considerable salaries senior managers receive, large financial incentives were needed to persuade them to perform the duties that were attached to their jobs. In contrast, people who worked in the public sector mostly did so because they were too lazy or ineffective to get jobs in large corporations. They professed surprise that teachers did not relay these opinions to their charges. I understood why, and was relieved they did not.

The complacent sense of personal entitlement these corporate politicians expressed was deeply unattractive: as unattractive as the similar sense of personal entitlement displayed by the lazy teacher who knows he will not be fired. I do not think children should be taught that greed is the most powerful human motivation, because it is not, and if children are taught that greed is the most powerful business motivation we should be pleased, not disappointed, when business does not attract them.

Young people looking towards the world of work should understand that the greatest reward from a job is the satisfaction of doing it well. The people who are most successful in business in the long run are people who are passionate about business – whose aspirations are to bring new products and services to market, to serve customers better, to motivate their staff to greater efforts. And, by the way, you can make a lot of money in the process. That is why Tesco is prospering and Woolworths has failed. That is the lesson we should teach our kids, and which our cabbies should have learnt. It is a lesson that is as relevant to the public sector as to the private.

John Kay’s new book, The Long and the Short of It, is published on January 20

FT: Twaddle thrives amid the turmoil

Twaddle thrives amid the turmoil

By Lucy Kellaway

Published: January 4 2009 18:47 | Last updated: January 4 2009 18:47

Every January, I hand out awards to the world’s top purveyors of business twaddle for outstanding achievement during the past 12 months. This year, however, I was fearful that my ceremony would not be able to go ahead.

Last September, I wrote a column pointing out that the crash had made the bottom fall out of market in management bullshit; business people seemed to have renounced waffle and were being rather sober and sensible. While this might have been a good thing for the world as a whole, for my awards ceremony it was a catastrophe.

However, I have just looked in my 2008 twaddle cupboard and found, to my huge relief, that it is almost as well-stocked as usual. Not only are there some very fine twaddle entries from the first nine months of the year, but even in the past three months there has been much to commend. It seems that managers’ ability to create twaddle is so fundamental that, after a brief hiccup in September, it is now business as usual. Which means I am now delighted to announce that my 2008 Top Twaddle awards will go forward as usual.

● My first award this year is a new category called Rearranging The Deckchairs. The clear winner here is Citibank, which, just as its business was getting really tough last summer, sent a cheery message to all staff suggesting they download the Citi theme tune to their mobiles. “Citi’s audio brand was composed especially for Citi and ladders off our purpose of ‘Driving Success’,” the message said. The twaddle judges were particularly impressed by the phrase “to ladder off”, as they previously only heard the verb ladder used in connection with stockings.

● The second award is for Economists’ Twaddle. It seems that 2008 was a great year for economists getting it all entirely wrong and then being spectacularly wise after the event. But this year’s award goes to a World Bank economist who hedged his bets so cleverly it was impossible to know what his view was on anything. As he told the BBC World Service: “In our base case simulation there is an upside case that, er, corresponds on the flipside of the downside case in kind of an adverse direction.”

● Third is the award for Most Aggravating On Hold Message, which in 2008 was as hotly contested as ever. However, the clear winner was the UK’s Driving Standards Agency for a message that said: “Thank you for your call. The anticipated waiting time for this call is . . . longer than we would expect you to wait. In appreciation of your time, patience and cost implications to yourself, we are terminating this call.” And then it cuts you off.

● The next award is for the best new job title. The outstanding winner was Diageo, which in the closing days of the year put out an announcement saying Darren Jones was joining “the Diageo Way of Selling team as Design Director for Customer and Channel Profitability and Trade Investment”.

The judges noted an interesting new trend in this category: title inflation is no longer in importance but in word length. If there is no money to give people a rise, then the next best thing is to add words to the name.

● Another new category this year is an award for Treating Your Employees Like Animals. So many companies were eligible for this as a result of brutal mass sackings in the past few months that the judges decided it would be unfair to single out any individual entrant. They decided instead to recognise the achievement of Brent Council in London for treating its people like pets. It told staff to turn off computers at night arguing that it “can save dramatic amounts of energy and may earn you a chocolate treat”.

And now for the most eagerly awaited part of the awards: the jargon section.

● The first award in this group is for Nouns Moonlighting As Verbs, which was so popular that the judges are giving out three gongs. The 2008 Olympics introduced the world to the verb “to medal”. This entry medals with a bronze. The Silver medal in this category goes to “to auspice”, while gold goes to the verb “to sunset”. AOL used the verb to great effect last summer in declaring that it was canning some products. “Bluestring, Xdrive and AOL Pictures will be sunset. [They] have not gained sufficient traction in the marketplace or the monetisation levels necessary.” In other words, they were flops.

● In recognition of the economic climate the judges are giving a special award this year for Best Term For Sacking People. An honorary mention goes to the new phrase “dynamic rightsizing”, which means regular sackings, only more exciting and souped-up. The winner, for its sheer disingenuity, goes to “upgrade”. A reader reports that when she was fired by her US company in mid-2008 she was told: “We are going to upgrade you with immediate effect. We are going to allow you to move on in order that you can you use your talents and skills more effectively and thus upgrade your career and opportunities.”

● The final award is for Improving Existing Jargon. A silver medal goes to “to cascade around”. The judges liked the new egalitarianism of this: lest anyone be offended at the idea that a cascade falls from top to bottom, this new preposition makes the idea less hierarchical. Gold, however, belongs to the outstanding phrase “strategy staircase”. The judges felt this represented a step change on the existing strategy tree, and laddered the concept to a whole new level.

Copyright The Financial Times Limited 2009

BT: Waterford Wedgwood calls in receivers

World

Published January 7, 2009

Waterford Wedgwood calls in receivers Email this article Print article Feedback (DUBLIN) Ireland's Waterford Wedgwood, whose luxury tableware was once a mainstay of wedding gift lists worldwide, has called in receivers and placed two of Britain's most venerable china makers in administration. End of the line? Waterford Wedgwood said that a grace period given by its lenders had expired and not been renewed, but it remained optimistic that an investor would save the group The heavily indebted maker of Waterford crystal, one of Ireland's most famous brands, also asked on Monday that its shares be suspended from trading on the Irish Stock Exchange after failing to buy more time from creditors. The owner of British potter Wedgwood, founded 250 years ago by Josiah Wedgwood - one of the fathers of the industrial revolution - and whose tea and dinner services have graced royal tables ever since, had warned in December that it would not be able to pay interest to bondholders. Waterford Wedgwood said that a grace period given by its lenders had expired and not been renewed, but it remained optimistic that an investor would save the group, whose stable of brands also includes Royal Doulton, known for its fine china tableware and figurines. The group has some 8,000 employees worldwide, including 1,900 working in manufacturing and retail in the United Kingdom and 800 in Ireland. It also employs 1,000 workers at Germany-based porcelain maker Rosenthal. The company, which last year unsuccessfully sought a loan from the Irish government, has already cut or moved a lot of production to Asia. The group's receiver, Deloitte, said that a number of subsidiaries, including Josiah Wedgwood & Sons Ltd and Royal Doulton Ltd, had been placed in administration, meaning that they would continue to trade while buyers are sought. One Dublin-based analyst said that it would be very tough to find a buyer for the company, however. 'Even if there is a resurgence in the economy anytime soon, it's difficult to say Waterford Wedgwood will benefit massively from it,' said Killian Murphy of Goodbody Stockbrokers. Waterford Wedgwood was trying to modernise its product range just as the economic downturn in its main markets - Britain and the United States - and the strength of the euro hit earnings, while the credit crisis made talks with lenders more difficult. Top shareholders led by Anthony O'Reilly, whose media interests make him one of Ireland's richest men, have repeatedly pumped extra funds into Waterford Wedgwood. The company said on Monday that Mr O'Reilly and three other non-executive board members had resigned with immediate effect. -- Reuters

Business Times - 07 Jan 2009 MADOFF HEARING Madoff mailed jewellery to sons, violated asset freeze Prosecutors ask federal judge for bail to be revoked (NEW YORK) The sons of Bernard Madoff, who is accused of orchestrating a massive Ponzi scheme, alerted prosecutors last week that their father mailed them jewellery, watches and other items in violation of an asset freeze, his lawyer said. US prosecutors on Monday asked a federal judge to revoke Madoff's bail because he violated the freeze. US Magistrate Judge Ronald Ellis asked for legal briefs by today from the government and from Madoff, who remains free in his Manhattan apartment on a US$10 million bond. Madoff mailed five packages of items, including 'some very valuable jewellery', after his assets were frozen by a judge in a related civil lawsuit, said Assistant US Attorney Marc Litt in court on Monday. Defence lawyer Ira Sorkin said that the objects, which included pens and US$25 cuff links, were heirlooms innocently sent to Madoff's children and brother, Peter. 'We believe the children brought it to the attention of the government,' Mr Sorkin said in an interview after court. Madoff, 70, was accused last month of directing a US$50 billion Ponzi scheme out of his New York investment firm after his sons reported him to prosecutors. Madoff's sons turned him in on Dec 10 after he confessed to them, their attorney, Martin Flumenbaum, previously said. Madoff, who was arrested by Federal Bureau of Investigation agents the following day, is under house arrest and subject to electronic surveillance. Mr Litt said in court on Monday that the transfer of valuables is a 'changed circumstance' that warranted the revocation of bail. He said that one of the jewellery items may be worth as much as US$1 million. 'In the face of a direct and clear order of a court, he violated the order,' Mr Litt said. Mr Sorkin said in an interview and in court that he learned from Madoff and his wife, Ruth, on Dec 30 of their transfer of assets and instructed his clients to retrieve the items, which they are doing. The government now possesses some of the assets, he said. Mr Sorkin said that he also told the government about some of the transfers. The transferred items included a US$200 pair of mittens given to Madoff by his granddaughter, he said. Separately, prosecutors were told of the transfers last week by Madoff's children and by a New York City couple to whom Madoff sent some objects, Mr Sorkin said. The couple, who have not been identified, are now vacationing in Florida, he said. Mark Madoff, 42, ran Madoff's proprietary trading business and Andrew Madoff, 40, was a director of that unit. The sons have not been charged with wrongdoing. As Bernard Madoff fought to stay out of jail, his alleged victims continued to detail their losses with him and regulators sought to identify assets that they could use to repay customers. Bard College's president disclosed on Monday that the liberal arts school in Annandale-on-Hudson, New York, lost about US$3 million in investments related to Madoff. Harley International Ltd, a hedge fund run by Cayman Islands-based Euro-Dutch Management Ltd, invested all of its assets with Madoff, a person familiar with the matter said. The fund managed US$2.76 billion as at Oct 31. Last week, Rosenman Family LLC, managed by Martin Rosenman, president of Bronx-based Stuyvesant Fuel Service Corp, sued Irving Picard, the trustee appointed to supervise the unwinding of Madoff's firm, seeking the return of a US$10 million investment. Mr Picard has identified US$830 million in liquid assets in Madoff's defunct brokerage firm, Bernard L Madoff Investment Securities LLC, according to the Securities Investor Protection Corp (SIPC). The assets may be subject to recovery by Madoff's customers, SIPC chief executive officer Stephen Harbeck told a congressional committee on Monday in prepared testimony. Mr Picard sent 8,000 claim forms on Jan 2 to people who appeared to have invested with Madoff, and he published a notice telling them how to recover lost money. The forms were sent to people 'who appear to have been customers' of Madoff's firm 'with open accounts within the past 12 months', according to a statement. Madoff's advisory business was estimated to have had more than 4,000 customers, people familiar with the matter said last month. At Monday's hearing, Mr Litt said that the mailing of the valuables by Bernard and Ruth Madoff, which Mr Sorkin said began on Dec 24, violated an agreement to freeze Madoff's assets as part of a Securities and Exchange Commission lawsuit. Mr Litt said that the dispersal of the valuables was a risk to the public that justified imprisonment before trial. He also said that the likelihood that Madoff would eventually be imprisoned increased the risk of him fleeing prosecution. -- Bloomberg Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.