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class="post-title"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/09/08/bill-millers-really-bad-bet/" rel="bookmark" title="Permanent Link: Bill Miller’s Really Bad Bet">Bill Miller’s Really Bad Bet</a></h2> <p class="post-author">By <span><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/author/jnocera/" title="Posts by Joe Nocera">Joe Nocera</a></span></p> </div> <div class="post-content"> <p>Back in 2001, when Bill Miller was viewed as one of the world’s greatest investors, I edited a story about him at Fortune magazine. Mr. Miller, of course, is the manager of the Legg Mason Value Trust mutual fund, whose claim to fame is that he beat the Standard & Poor’s 500-stock index for 15 years straight. (It was 10 straight when Fortune published its story.) In the last few years, however, his fund has stumbled badly. Indeed, there are those in the investment community who whisper that Mr. Miller was never really a truly great investor. Rather, he was akin to the guy who flips a coin and it comes up heads 15 straight times — a product, that is, of randomness rather than skill.</p> <p>What brought that old Fortune story to mind this morning was the news that Mr. Miller was buying up boatloads of shares in Fannie Mae and Freddie Mac, even as the shares were cascading downward. According to Eric Dash in The New York Times today, “Legg Mason disclosed it had bought an additional 30 million shares” as recently as last week. </p> <p>“I am shocked how they missed this, and why, when it became clear that the problem was snowballing, guys like Bill Miller doubled down,” a short-seller named Douglas A. Kass told Mr. Dash.</p> <p>Shocked? I’m not even surprised. His Fannie and Freddie purchases are very much a part of Mr. Miller’s modus operandi. The reason he beat the market all those years is precisely because he liked to bet the rent on stocks that were not just out of fashion, or a little downtrodden. He embraced stocks that the media and Wall Street had openly turned against. He wanted stocks that other people were panicked about. Most famously, he bought Amazon right around the time that a Lehman Brothers bond analyst put out a widely publicized report that the online retailer was running out of cash. But he made tons of bets like that. <a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/09/08/bill-millers-really-bad-bet/#more-81">Read more …</a> </p> </div> <div class="post-tools"> <ul id="post-tools-81"> <li class="comments-tool"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/09/08/bill-millers-really-bad-bet/#comments" class="post-comment" title="Comment on Bill Miller's Really Bad Bet">Comments (10)</a></li> <li class="email-tool"> <form method="post" name="emailThis_81" id="emailThis_81" style="display: inline;" enctype="application/x-www-form-urlencoded" action="https://web.archive.org/web/20080909231800/http://www.nytimes.com/mem/emailthis.html"> <input type="hidden" name="type" value="1"/> <input type="hidden" name="url" value="http%3A%2F%2Fexecutivesuite.blogs.nytimes.com%2F2008%2F09%2F08%2Fbill-millers-really-bad-bet%2F"/> <input type="hidden" name="title" 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value="%3Cp%3EBack%20in%202001%2C%20when%20Bill%20Miller%20was%20viewed%20as%20one%20of%20the%20world%26%238217%3Bs%20greatest%20investors%2C%20I%20edited%20a%20story%20about%20him%20at%20Fortune%20magazine.%20%20Mr.%20Miller%2C%20of%20course%2C%20is%20the%20manager%20of%20the%20Legg%20Mason%20Value%20Trust%20mutual%20fund%2C%20whose%20claim%20to%20fame%20is%20that%20he%20beat%20the%20Standard%20%26%23038%3B%20Poor%26%238217%3Bs%20500-stock%20index%20for%2015%20years%20straight.%20%20%28It%20was%2010%20straight%20when%20Fortune%20published%20its%20story.%29%20In%20the%20last%20few%20years%2C%20however%2C%20his%20fund%20has%20stumbled%20badly.%20%20Indeed%2C%20there%20are%20those%20in%20the%20investment%20community%20who%20whisper%20that%20Mr.%20Miller%20was%20never%20really%20a%20truly%20great%20investor.%20%20Rather%2C%20he%20was%20akin%20to%20the%20guy%20who%20flips%20a%20coin%20and%20it%20comes%20up%20heads%2015%20straight%20times%20%26%238212%3B%20a%20product%2C%20that%20is%2C%20of%20randomness%20rather%20than%20skill.%3C%2Fp%3E%0A%3Cp%3EWhat%20brought%20that%20old%20Fortune%20story%20to%20mind%20this%20morning%20was%20the%20news%20that%20Mr.%20Miller%20was%20buying%20up%20boatloads%20of%20shares%20in%20Fannie%20Mae%20and%20Freddie%20Mac%2C%20even%20as%20the%20shares%20were%20cascading%20downward.%20%20According%20to%20Eric%20Dash%20in%20The%20New%20York%20Times%20today%2C%20%26%238220%3BLegg%20Mason%20disclosed%20it%20had%20bought%20an%20additional%2030%20million%20shares%26%238221%3B%20as%20recently%20as%20last%20week.%20%20%3C%2Fp%3E%0A%3Cp%3E%26%238220%3BI%20am%20shocked%20how%20they%20missed%20this%2C%20and%20why%2C%20when%20it%20became%20clear%20that%20the%20problem%20was%20snowballing%2C%20guys%20like%20Bill%20Miller%20doubled%20down%2C%26%238221%3B%20a%20short-seller%20named%20Douglas%20A.%20Kass%20told%20Mr.%20Dash.%3C%2Fp%3E%0A%3Cp%3EShocked%3F%20%20I%26%238217%3Bm%20not%20even%20surprised.%20%20His%20Fannie%20and%20Freddie%20purchases%20are%20very%20much%20a%20part%20of%20Mr.%20Miller%26%238217%3Bs%20modus%20operandi.%20%20The%20reason%20he%20beat%20the%20market%20all%20those%20years%20is%20precisely%20because%20he%20liked%20to%20bet%20the%20rent%20on%20stocks%20that%20were%20not%20just%20out%20of%20fashion%2C%20or%20a%20little%20downtrodden.%20%20He%20embraced%20stocks%20that%20the%20media%20and%20Wall%20Street%20had%20openly%20turned%20against.%20He%20wanted%20stocks%20that%20other%20people%20were%20panicked%20about.%20Most%20famously%2C%20he%20bought%20Amazon%20right%20around%20the%20time%20that%20a%20Lehman%20Brothers%20bond%20analyst%20put%20out%20a%20widely%20publicized%20report%20that%20the%20online%20retailer%20was%20running%20out%20of%20cash.%20%20But%20he%20made%20tons%20of%20bets%20like%20that.%20%20%3Ca%20href%3D%22http%3A%2F%2Fexecutivesuite.blogs.nytimes.com%2F2008%2F09%2F08%2Fbill-millers-really-bad-bet%2F%23more-81%22%3E%28more%26%238230%3B%29%3C%2Fa%3E%0A%3C%2Fp%3E%0A"/> 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class="post-info"> <small class="post-date2" id="day_5">September 5, 2008, 7:59 pm</small> <h2 class="post-title2"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/09/05/the-trials-of-arthur-blank/" rel="bookmark" title="Permanent Link: The Trials of Arthur Blank">The Trials of Arthur Blank</a></h2> <p class="post-author2">By <span><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/author/jnocera/" title="Posts by Joe Nocera">Joe Nocera</a></span></p> </div> <div class="post-content2"> <p>With the start of the new pro football season, <a href="https://web.archive.org/web/20080909231800/http://www.nytimes.com/2008/09/06/business/06nocera.html">my column this week</a> looks at the difficulties of a successful business executive in becoming the owner of a sports business. What’s hard is not the actual running of the business — new owners who have built businesses tend to be pretty good at that. The hard part is figuring out how to put a team on the field that will consistently win.</p> <p>This week’s case in point is Arthur M. Blank, the co-founder of Home Depot who bought the Atlanta Falcons seven years. As I note in the column, he’s had four losing seasons, been through four coaches — and of course had a truly nightmarish season last year when his star quarterback, Michael Vick, pleaded guilty to running an illegal dog-fighting operation, and his coach walked off the job with three games to go. </p> <p>Mr. Blank vows to turns things around — and has revamped both the front office and the team roster. The question the column asks is: does he have what it takes to do so? On that question, the jury is still out. Why is it that some businessmen, like Robert Kraft of the Patriots, build dynasties, while others, like Tom Benson in New Orleans, flounder forever in mediocrity? What do you think the answer is? I would love to hear. </p> </div> <div class="post-tools"> <ul id="post-tools-80"> <li class="comments-tool"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/09/05/the-trials-of-arthur-blank/#comments" class="post-comment" title="Comment on The Trials of Arthur Blank">Comments (7)</a></li> <li class="email-tool"> <form method="post" name="emailThis_80" id="emailThis_80" style="display: inline;" enctype="application/x-www-form-urlencoded" action="https://web.archive.org/web/20080909231800/http://www.nytimes.com/mem/emailthis.html"> <input type="hidden" name="type" value="1"/> <input type="hidden" name="url" value="http%3A%2F%2Fexecutivesuite.blogs.nytimes.com%2F2008%2F09%2F05%2Fthe-trials-of-arthur-blank%2F"/> <input type="hidden" name="title" value="Executive%20Suite%3A%20The%20Trials%20of%20Arthur%20Blank"/> <input type="hidden" name="full_text" 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href="javascript:document.getElementById('emailThis_80').submit();"><strong>E-mail this</strong></a> </li> <li id="share80" class="share"> <a onclick="javascript:showHideShareTool('sharelist80', 'share80');" id="sharebox80"> Share</a> <ul class="hide" id="sharelist80"> <li class="delicious"><a href="javascript:blogPostShare('delicious', '', 'September 5, 2008', '80');">Del.icio.us</a></li> <li class="digg"><a href="javascript:blogPostShare('digg', '', 'September 5, 2008', '80');">Digg</a></li> <li class="facebook"><a href="javascript:blogPostShare('facebook', '', 'September 5, 2008', '80');">Facebook</a></li> <li class="newsvine"><a href="javascript:blogPostShare('newsvine', '', 'September 5, 2008', '80');">Newsvine</a></li> <li class="permalink"><a href="javascript:blogPostShare('permalink', '', 'September 5, 2008', '80');">Permalink</a></li> </ul> </li> </ul> </div>  </div> <div class="blog_post home general "> <div class="post-info"> <small class="post-date2" id="day_5">September 5, 2008, 2:47 pm</small> <h2 class="post-title2"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/09/05/the-starbucks-egg-sandwich-double-cross/" rel="bookmark" title="Permanent Link: The Starbucks Egg Sandwich Double-Cross">The Starbucks Egg Sandwich Double-Cross</a></h2> <p class="post-author2">By <span><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/author/jnocera/" title="Posts by Joe Nocera">Joe Nocera</a></span></p> </div> <div class="post-content2"> <p>Remember early this year, after Howard Schultz reclaimed his troubled, beloved Starbucks, and promised to make radical changes? How he said he would recapture the old Starbucks experience? How he vowed to make Starbucks a warmer, friendlier place with a more consistent cup of coffee? And most importantly (from my point at least), how he vowed to get rid of those warm breakfast sandwiches that were a) inedible and b) smelling up the joint? I hear through the grapevine that he would tell people flatly: “The egg sandwiches are gone.”</p> <p>Ever since, I’ve kept my eye on those sandwiches, waiting for them to, well, go. They never have. At first, I gave Mr. Schultz the benefit of the doubt, assuming that, for reasons I didn’t understand, it took some time to make a change like that. But as spring turned to summer, and the egg sandwiches were still there, I began to wonder if Starbucks was ever going to get rid of them.</p> <p>So last week, I e-mailed my friend Vivek Varma — a terrific guy who spent years at Microsoft and is about to join Starbucks as its head of public relations — telling him that I was about to post a none-too-friendly blog about the fact that the sandwiches were still there; to me, it was a symbol of how hard it was to change a big public company like Starbucks. Mr. Schultz couldn’t even get rid of those sandwiches. <a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/09/05/the-starbucks-egg-sandwich-double-cross/#more-79">Read more …</a> </p> </div> <div class="post-tools"> <ul id="post-tools-79"> <li class="comments-tool"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/09/05/the-starbucks-egg-sandwich-double-cross/#comments" class="post-comment" title="Comment on The Starbucks Egg Sandwich Double-Cross">Comments (161)</a></li> <li class="email-tool"> <form method="post" name="emailThis_79" id="emailThis_79" style="display: inline;" enctype="application/x-www-form-urlencoded" action="https://web.archive.org/web/20080909231800/http://www.nytimes.com/mem/emailthis.html"> <input type="hidden" name="type" value="1"/> <input type="hidden" name="url" 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<small class="post-date2" id="day_4">September 4, 2008, 12:14 pm</small> <h2 class="post-title2"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/09/04/does-windows-still-matter/" rel="bookmark" title="Permanent Link: Does Windows Still Matter?">Does Windows Still Matter?</a></h2> <p class="post-author2">By <span><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/author/jnocera/" title="Posts by Joe Nocera">Joe Nocera</a></span></p> </div> <div class="post-content2"> <blockquote><p>“Chrome is not going to replace Windows. A computer requires an operating system such as Windows, Apple’s OS X or Linux to make the machine work. It does, however, have the potential to do what Mr. Gates feared: make the choice of operating system less important.”</p></blockquote> <p>So <a href="https://web.archive.org/web/20080909231800/http://www.ft.com/cms/s/0/5668cd82-79d4-11dd-bb93-000077b07658.html">writes </a>John Gapper, the fine columnist for The Financial Times in today’s paper. Chrome, of course, is Google’s new browser, which is pretty explicitly designed to be a Windows killer. As Mr. Gapper notes, that precise fear — that an Internet browser could become such a powerful platform for applications software that it would effectively take over the function of the operating system — is what caused Microsoft to start the browser wars in the 1990s, effectively putting Netscape out of business.</p> <p>But it seems to me that even without the browser-as-platform, Windows is already dying a death by a thousand cuts. Yes, Microsoft still makes billions by selling pre-installed Windows via computer manufacturers. But ever-so-gradually, the Internet is upending its business model just as surely as it has upended models for the music, television and newspaper businesses. It is also true, as Mr. Gapper notes, that Bill Gates saw this coming many years ago — and sounded the alarm in a famous memo to Microsoft’s executives. But in the subsequent decade-plus, the company has been unable to keep it from happening. <a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/09/04/does-windows-still-matter/#more-78">Read more …</a> </p> </div> <div class="post-tools"> <ul id="post-tools-78"> <li class="comments-tool"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/09/04/does-windows-still-matter/#comments" class="post-comment" title="Comment on Does Windows Still Matter?">Comments (180)</a></li> <li class="email-tool"> <form method="post" name="emailThis_78" id="emailThis_78" style="display: inline;" enctype="application/x-www-form-urlencoded" action="https://web.archive.org/web/20080909231800/http://www.nytimes.com/mem/emailthis.html"> <input type="hidden" name="type" value="1"/> <input type="hidden" name="url" value="http%3A%2F%2Fexecutivesuite.blogs.nytimes.com%2F2008%2F09%2F04%2Fdoes-windows-still-matter%2F"/> <input 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onclick="s_code_linktrack('Article-Tool-Email');" href="javascript:document.getElementById('emailThis_78').submit();"><strong>E-mail this</strong></a> </li> <li id="share78" class="share"> <a onclick="javascript:showHideShareTool('sharelist78', 'share78');" id="sharebox78"> Share</a> <ul class="hide" id="sharelist78"> <li class="delicious"><a href="javascript:blogPostShare('delicious', '', 'September 4, 2008', '78');">Del.icio.us</a></li> <li class="digg"><a href="javascript:blogPostShare('digg', '', 'September 4, 2008', '78');">Digg</a></li> <li class="facebook"><a href="javascript:blogPostShare('facebook', '', 'September 4, 2008', '78');">Facebook</a></li> <li class="newsvine"><a href="javascript:blogPostShare('newsvine', '', 'September 4, 2008', '78');">Newsvine</a></li> <li class="permalink"><a href="javascript:blogPostShare('permalink', '', 'September 4, 2008', '78');">Permalink</a></li> </ul> </li> </ul> </div>  </div> <div class="blog_post home general "> <div class="post-info"> <small class="post-date2" id="day_2">September 2, 2008, 12:40 pm</small> <h2 class="post-title2"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/09/02/theres-no-free-lunch-mr-lutz/" rel="bookmark" title="Permanent Link: There’s No Free Lunch, Mr. Lutz">There’s No Free Lunch, Mr. Lutz</a></h2> <p class="post-author2">By <span><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/author/jnocera/" title="Posts by Joe Nocera">Joe Nocera</a></span></p> </div> <div class="post-content2"> <p><i>From my colleague Micheline Maynard (my first guest blogger!):</i></p> <p>Robert A. Lutz, the vice chairman of General Motors, says the Detroit auto companies are “deserving” of as much as $50 billion in federal loan guarantees to help retool plants in the face of the new auto industry reality: buyers want more fuel-efficient vehicles. </p> <p>His <a href="https://web.archive.org/web/20080909231800/http://www.nytimes.com/2008/08/29/business/29lutz.html?ex=1377748800&en=b51937fcbd44e6d8&ei=5124&partner=permalink&exprod=permalink ">rationale </a>is that tight credit markets will not allow the auto companies to borrow the money they need for the overhauls that will be necessary to shift the plants from pickups and S.U.V.’s to building small cars and crossovers.</p> <p>Mr. Lutz and the other auto industry leaders pushing the plan need to be careful what they wish for. Federal loan guarantees did little to stave off bad times in the airline industry earlier this decade; in fact, several critics would argue that the loans may have prolonged the industry’s agony.</p> <p>Airlines got a two-part rescue package in the dark days after Sept. 11, 2001, amid enormous sympathy and a justifiable argument. United Airlines and American Airlines each lost two planes in the attacks, and the national commercial air system was shut down for a week, prohibiting the carriers from operating. The airlines received $5 billion in cash, divided by size, and were offered another $10 billion in guaranteed loans.</p> <p>But in the end, airlines were only granted $1.17 billion in loans, which went to America West, US Airways, American Trans Air, Aloha, Frontier, and two charter/cargo carriers, Evergreen International and World Airways. Nine airlines were turned down, most notably United, which tried three times for as much as $1.8 billion. <a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/09/02/theres-no-free-lunch-mr-lutz/#more-77">Read more …</a> </p> </div> <div class="post-tools"> <ul id="post-tools-77"> <li class="comments-tool"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/09/02/theres-no-free-lunch-mr-lutz/#comments" class="post-comment" title="Comment on There's No Free Lunch, Mr. Lutz">Comments (36)</a></li> <li class="email-tool"> <form method="post" name="emailThis_77" id="emailThis_77" style="display: inline;" enctype="application/x-www-form-urlencoded" action="https://web.archive.org/web/20080909231800/http://www.nytimes.com/mem/emailthis.html"> <input type="hidden" name="type" value="1"/> <input type="hidden" name="url" 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value="%3Cp%3E%3Ci%3EFrom%20my%20colleague%20Micheline%20Maynard%20%28my%20first%20guest%20blogger%21%29%3A%3C%2Fi%3E%3C%2Fp%3E%0A%3Cp%3ERobert%20A.%20Lutz%2C%20the%20vice%20chairman%20of%20General%20Motors%2C%20says%20the%20Detroit%20auto%20companies%20are%20%26%238220%3Bdeserving%26%238221%3B%20of%20as%20much%20as%20%2450%20billion%20in%20federal%20loan%20guarantees%20to%20help%20retool%20plants%20in%20the%20face%20of%20the%20new%20auto%20industry%20reality%3A%20buyers%20want%20more%20fuel-efficient%20vehicles.%20%3C%2Fp%3E%0A%3Cp%3EHis%20%3Ca%20href%3D%22%20http%3A%2F%2Fwww.nytimes.com%2F2008%2F08%2F29%2Fbusiness%2F29lutz.html%3Fex%3D1377748800%26%23038%3Ben%3Db51937fcbd44e6d8%26%23038%3Bei%3D5124%26%23038%3Bpartner%3Dpermalink%26%23038%3Bexprod%3Dpermalink%20%22%3Erationale%20%3C%2Fa%3Eis%20that%20tight%20credit%20markets%20will%20not%20allow%20the%20auto%20companies%20to%20borrow%20the%20money%20they%20need%20for%20the%20overhauls%20that%20will%20be%20necessary%20to%20shift%20the%20plants%20from%20pickups%20and%20S.U.V.%26%238217%3Bs%20to%20building%20small%20cars%20and%20crossovers.%3C%2Fp%3E%0A%3Cp%3EMr.%20Lutz%20and%20the%20other%20auto%20industry%20leaders%20pushing%20the%20plan%20need%20to%20be%20careful%20what%20they%20wish%20for.%20Federal%20loan%20guarantees%20did%20little%20to%20stave%20off%20bad%20times%20in%20the%20airline%20industry%20earlier%20this%20decade%3B%20in%20fact%2C%20several%20critics%20would%20argue%20that%20the%20loans%20may%20have%20prolonged%20the%20industry%26%238217%3Bs%20agony.%3C%2Fp%3E%0A%3Cp%3EAirlines%20got%20a%20two-part%20rescue%20package%20in%20the%20dark%20days%20after%20Sept.%2011%2C%202001%2C%20amid%20enormous%20sympathy%20and%20a%20justifiable%20argument.%20United%20Airlines%20and%20American%20Airlines%20each%20lost%20two%20planes%20in%20the%20attacks%2C%20and%20the%20national%20commercial%20air%20system%20was%20shut%20down%20for%20a%20week%2C%20prohibiting%20the%20carriers%20from%20operating.%20The%20airlines%20received%20%245%20billion%20in%20cash%2C%20divided%20by%20size%2C%20and%20were%20offered%20another%20%2410%20billion%20in%20guaranteed%20loans.%3C%2Fp%3E%0A%3Cp%3EBut%20in%20the%20end%2C%20airlines%20were%20only%20granted%20%241.17%20billion%20in%20loans%2C%20which%20went%20to%20America%20West%2C%20US%20Airways%2C%20American%20Trans%20Air%2C%20Aloha%2C%20Frontier%2C%20and%20two%20charter%2Fcargo%20carriers%2C%20Evergreen%20International%20and%20World%20Airways.%20%20Nine%20airlines%20were%20turned%20down%2C%20most%20notably%20United%2C%20which%20tried%20three%20times%20for%20as%20much%20as%20%241.8%20billion.%20%3Ca%20href%3D%22http%3A%2F%2Fexecutivesuite.blogs.nytimes.com%2F2008%2F09%2F02%2Ftheres-no-free-lunch-mr-lutz%2F%23more-77%22%3E%28more%26%238230%3B%29%3C%2Fa%3E%0A%3C%2Fp%3E%0A"/> <input type="hidden" name="description" value="From%20my%20colleague%20Micheline%20Maynard%20%28my%20first%20guest%20blogger%21%29%3A%0ARobert%20A.%20Lutz%2C%20the%20vice%20chairman%20of%20General%20Motors%2C%20says%20the%20Detroit%20auto%20companies%20are%20%26%238220%3Bdeserving%26%238221%3B%20of%20as%20much%20as%20%2450%20billion%20in%20federal%20loan%20guarantees%20to%20help%20retool%20plants%20in%20the%20face%20of%20the%20new%20auto%20industry%20reality%3A%20buyers%20want%20more%20fuel-efficient%20vehicles.%20%0AHis%20rationale%20is%20%5B...%5D"/> <input type="hidden" name="pub_date" value="20080902"/> <input type="hidden" name="author" value="Joe%20Nocera"/> <input type="hidden" name="section" value="Business"/> <input type="hidden" name="nytdsection" value="Business"/> <input type="hidden" name="nytdsubsection" value=""/> <input type="hidden" name="encrypted_key" value="4diUlN06aiC46QmKk34Fmg"/> <input type="hidden" name="encryption_partner" value="about"/> </form> <a class="post-email" onclick="s_code_linktrack('Article-Tool-Email');" href="javascript:document.getElementById('emailThis_77').submit();"><strong>E-mail this</strong></a> </li> <li id="share77" class="share"> <a onclick="javascript:showHideShareTool('sharelist77', 'share77');" id="sharebox77"> Share</a> <ul class="hide" id="sharelist77"> <li class="delicious"><a href="javascript:blogPostShare('delicious', '', 'September 2, 2008', '77');">Del.icio.us</a></li> <li class="digg"><a href="javascript:blogPostShare('digg', '', 'September 2, 2008', '77');">Digg</a></li> <li class="facebook"><a href="javascript:blogPostShare('facebook', '', 'September 2, 2008', '77');">Facebook</a></li> <li class="newsvine"><a href="javascript:blogPostShare('newsvine', '', 'September 2, 2008', '77');">Newsvine</a></li> <li class="permalink"><a href="javascript:blogPostShare('permalink', '', 'September 2, 2008', '77');">Permalink</a></li> </ul> </li> </ul> </div>  </div> <div class="blog_post home general "> <div class="post-info"> <small class="post-date2" id="day_29">August 29, 2008, 6:28 pm</small> <h2 class="post-title2"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/29/the-wall-street-journal-rip/" rel="bookmark" title="Permanent Link: The Wall Street Journal, R.I.P.">The Wall Street Journal, R.I.P.</a></h2> <p class="post-author2">By <span><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/author/jnocera/" title="Posts by Joe Nocera">Joe Nocera</a></span></p> </div> <div class="post-content2"> <p>This is the week when it hit me. I really miss The Wall Street Journal.</p> <p>Yes, yes, I know The Journal is hardly dead. Its new owner, Rupert Murdoch, is pouring millions into it, hiring reporters, beefing up its national and international reporting, preparing to release a new Wall Street Journal magazine, and much, much more. And yes, I know that this was the week of the Democratic convention. With its new orientation toward Washington and politics, The Journal was bound to overflow with stories about the presidential race, as indeed it did. Still, what struck me about The Journal this week — what struck me hard — was how little business news the first section of the paper contained.</p> <p>Every day the lead story, and the big photo, was devoted to the convention — stories that said more or less the same thing as everyone else’s. And most days, only one of the four front-page stories was devoted to business. Inside, it was even worse: pages of political and international coverage, which came at the expense of business. On Tuesday, in fact, there wasn’t a single mainstream business story in the entire first section. And the business stories that did run lacked the kind of nuance, analysis and wonderful story-telling that used to characterize The Wall Street Journal I loved. <a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/29/the-wall-street-journal-rip/#more-76">Read more …</a> </p> </div> <div class="post-tools"> <ul id="post-tools-76"> <li class="comments-tool"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/29/the-wall-street-journal-rip/#comments" class="post-comment" title="Comment on The Wall Street Journal, R.I.P.">Comments (39)</a></li> <li class="email-tool"> <form method="post" name="emailThis_76" id="emailThis_76" style="display: inline;" enctype="application/x-www-form-urlencoded" action="https://web.archive.org/web/20080909231800/http://www.nytimes.com/mem/emailthis.html"> <input type="hidden" name="type" value="1"/> <input type="hidden" name="url" 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onclick="s_code_linktrack('Article-Tool-Email');" href="javascript:document.getElementById('emailThis_76').submit();"><strong>E-mail this</strong></a> </li> <li id="share76" class="share"> <a onclick="javascript:showHideShareTool('sharelist76', 'share76');" id="sharebox76"> Share</a> <ul class="hide" id="sharelist76"> <li class="delicious"><a href="javascript:blogPostShare('delicious', '', 'August 29, 2008', '76');">Del.icio.us</a></li> <li class="digg"><a href="javascript:blogPostShare('digg', '', 'August 29, 2008', '76');">Digg</a></li> <li class="facebook"><a href="javascript:blogPostShare('facebook', '', 'August 29, 2008', '76');">Facebook</a></li> <li class="newsvine"><a href="javascript:blogPostShare('newsvine', '', 'August 29, 2008', '76');">Newsvine</a></li> <li class="permalink"><a href="javascript:blogPostShare('permalink', '', 'August 29, 2008', '76');">Permalink</a></li> </ul> </li> </ul> </div>  </div> <div class="blog_post home general "> <div class="post-info"> <small class="post-date2" id="day_29">August 29, 2008, 4:33 pm</small> <h2 class="post-title2"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/29/with-friends-like-carl-icahn/" rel="bookmark" title="Permanent Link: With Friends Like Carl Icahn….">With Friends Like Carl Icahn….</a></h2> <p class="post-author2">By <span><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/author/jnocera/" title="Posts by Joe Nocera">Joe Nocera</a></span></p> </div> <div class="post-content2"> <p>This week’s <a href="https://web.archive.org/web/20080909231800/http://www.nytimes.com/2008/08/30/business/30nocera.html?_r=1&ref=business&oref=slogin">column </a>recounts an obscure fight involving a company that few people pay attention to anymore, <a href="https://web.archive.org/web/20080909231800/http://finance.google.com/finance?q=xoho">XO Communications</a>. Once a darling of the telecommunications set — just like its competitors Global Crossing and Level 3 — XO fell on hard times, just like, well, Global Crossing and Level 3. After filing for bankruptcy protection in 2003 — a filing that cost Teddy Forstmann’s private equity firm its entire $1.5 billion stake in the company — XO emerged with a new chairman and majority shareholder: none other than Carl Icahn.</p> <p>It’s not quite right to say this is a reader-generated column — I’m not <em>that </em>much of a webbie! — but it is reader inspired. Several XO shareholders wrote to me recently, complaining that Mr. Icahn was, in effect, a hypocrite. He would go on and on about the sins of the directors of companies like Yahoo and others that he was targeting, they said, yet he would commit the exact same sins at XO, where the board was made up of Icahn cronies, who simply rubber-stamped his deals, even though they hurt the other shareholders.</p> <p>Back in the old days, when I was writing about my old friend T. Boone Pickens, people used to ask me if his rhetoric about shareholder rights was genuine, or whether those were just words he mouthed to make his corporate raiding sound more ennobling than it actually was. I always responded by saying that he meant every word he said — but that he never went after a company unless he thought he could make some money for himself as well.</p> <p>When Mr. Icahn takes after one of the big boys with a laggard stock — a Yahoo or a Motorola or a Time Warner — he too mouths pieties about shareholder rights that I’m sure he believes. But as this column explains, when he’s the man in charge, shareholders really ought to run in the other direction. Let’s face it: the shareholders’ rights that Carl Icahn fights hardest for are the rights of a shareholder named Carl Icahn.</p> </div> <div class="post-tools"> <ul id="post-tools-75"> <li class="comments-tool"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/29/with-friends-like-carl-icahn/#comments" class="post-comment" title="Comment on With Friends Like Carl Icahn....">Comments (10)</a></li> <li class="email-tool"> <form method="post" name="emailThis_75" id="emailThis_75" style="display: inline;" enctype="application/x-www-form-urlencoded" action="https://web.archive.org/web/20080909231800/http://www.nytimes.com/mem/emailthis.html"> <input type="hidden" name="type" value="1"/> <input type="hidden" name="url" value="http%3A%2F%2Fexecutivesuite.blogs.nytimes.com%2F2008%2F08%2F29%2Fwith-friends-like-carl-icahn%2F"/> <input type="hidden" name="title" value="Executive%20Suite%3A%20With%20Friends%20Like%20Carl%20Icahn%26%238230%3B."/> 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<input type="hidden" name="description" value="This%20week%26%238217%3Bs%20column%20recounts%20an%20obscure%20fight%20involving%20a%20company%20that%20%20few%20people%20pay%20attention%20to%20anymore%2C%20XO%20Communications.%20%20Once%20a%20darling%20of%20the%20telecommunications%20set%20%26%238212%3B%20just%20like%20its%20competitors%20Global%20Crossing%20and%20Level%203%20%26%238212%3B%20XO%20fell%20on%20hard%20times%2C%20just%20like%2C%20well%2C%20Global%20Crossing%20and%20Level%203.%20%20After%20filing%20%5B...%5D"/> <input type="hidden" name="pub_date" value="20080829"/> <input type="hidden" name="author" value="Joe%20Nocera"/> <input type="hidden" name="section" value="Business"/> <input type="hidden" name="nytdsection" value="Business"/> <input type="hidden" name="nytdsubsection" value=""/> <input type="hidden" name="encrypted_key" value="+DglJ3fhCYPPw/NBqNGuaA"/> <input type="hidden" name="encryption_partner" value="about"/> </form> <a class="post-email" onclick="s_code_linktrack('Article-Tool-Email');" href="javascript:document.getElementById('emailThis_75').submit();"><strong>E-mail this</strong></a> </li> <li id="share75" class="share"> <a onclick="javascript:showHideShareTool('sharelist75', 'share75');" id="sharebox75"> Share</a> <ul class="hide" id="sharelist75"> <li class="delicious"><a href="javascript:blogPostShare('delicious', '', 'August 29, 2008', '75');">Del.icio.us</a></li> <li class="digg"><a href="javascript:blogPostShare('digg', '', 'August 29, 2008', '75');">Digg</a></li> <li class="facebook"><a href="javascript:blogPostShare('facebook', '', 'August 29, 2008', '75');">Facebook</a></li> <li class="newsvine"><a href="javascript:blogPostShare('newsvine', '', 'August 29, 2008', '75');">Newsvine</a></li> <li class="permalink"><a href="javascript:blogPostShare('permalink', '', 'August 29, 2008', '75');">Permalink</a></li> </ul> </li> </ul> </div>  </div> <div class="blog_post home general "> <div class="post-info"> <small class="post-date2" id="day_28">August 28, 2008, 4:34 pm</small> <h2 class="post-title2"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/28/wall-street-research-a-new-low/" rel="bookmark" title="Permanent Link: Wall Street Research: A New Low">Wall Street Research: A New Low</a></h2> <p class="post-author2">By <span><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/author/jnocera/" title="Posts by Joe Nocera">Joe Nocera</a></span></p> </div> <div class="post-content2"> <p>There are lots of problems these days with Wall Street research. With compensation a third to a half of what it once was, the business is populated by green-behind-the-ears newbies who barely understand the industries they cover. Most of the smart, veteran analysts have moved to hedge funds. There is still too much coddling of company executives, and not enough serious analysis. Too many “buys” and not enough “sells.” Getting clients in to see companies is more important than giving them tough-minded news about their stocks. Indeed, in the wake of the Spitzer reforms of a few years ago– intended to eliminate analyst conflicts — the professional has actually gotten worse. </p> <p>How else to explain the curious recent case of plagiarism at Lehman Brothers. You heard that right: plagiarism, and pretty blatant, unambiguous plagiarism at that. In a lengthy report issued in March by a team of Lehman analysts on the subject of virtualization technology (don’t ask), language and complicated graphics were lifted directly from several reports by Toni Sacconaghi of Sanford Bernstein. <a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/28/wall-street-research-a-new-low/#more-74">Read more …</a> </p> </div> <div class="post-tools"> <ul id="post-tools-74"> <li class="comments-tool"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/28/wall-street-research-a-new-low/#comments" class="post-comment" title="Comment on Wall Street Research: A New Low">Comments (11)</a></li> <li class="email-tool"> <form method="post" name="emailThis_74" id="emailThis_74" style="display: inline;" enctype="application/x-www-form-urlencoded" action="https://web.archive.org/web/20080909231800/http://www.nytimes.com/mem/emailthis.html"> <input type="hidden" name="type" value="1"/> <input type="hidden" name="url" value="http%3A%2F%2Fexecutivesuite.blogs.nytimes.com%2F2008%2F08%2F28%2Fwall-street-research-a-new-low%2F"/> <input type="hidden" name="title" value="Executive%20Suite%3A%20Wall%20Street%20Research%3A%20A%20New%20Low"/> <input type="hidden" name="full_text" value="%3Cp%3EThere%20are%20lots%20of%20problems%20these%20days%20with%20Wall%20Street%20research.%20%20With%20compensation%20a%20third%20to%20a%20half%20of%20what%20it%20once%20was%2C%20the%20business%20is%20populated%20by%20green-behind-the-ears%20newbies%20who%20barely%20understand%20the%20industries%20they%20cover.%20%20Most%20of%20the%20smart%2C%20veteran%20analysts%20have%20moved%20to%20hedge%20funds.%20%20There%20is%20still%20too%20much%20coddling%20of%20company%20executives%2C%20and%20not%20enough%20serious%20analysis.%20%20Too%20many%20%26%238220%3Bbuys%26%238221%3B%20and%20not%20enough%20%26%238220%3Bsells.%26%238221%3B%20%20Getting%20clients%20in%20to%20see%20companies%20is%20more%20important%20than%20giving%20them%20tough-minded%20news%20about%20their%20stocks.%20%20Indeed%2C%20in%20the%20wake%20of%20the%20Spitzer%20reforms%20of%20a%20few%20years%20ago%26%238211%3B%20intended%20to%20eliminate%20analyst%20conflicts%20%26%238212%3B%20the%20professional%20has%20actually%20gotten%20worse.%20%20%3C%2Fp%3E%0A%3Cp%3EHow%20else%20to%20explain%20the%20curious%20recent%20case%20of%20plagiarism%20at%20Lehman%20Brothers.%20%20You%20heard%20that%20right%3A%20plagiarism%2C%20and%20pretty%20blatant%2C%20unambiguous%20plagiarism%20at%20that.%20%20In%20a%20lengthy%20report%20issued%20in%20March%20by%20a%20team%20of%20Lehman%20analysts%20on%20the%20subject%20of%20virtualization%20technology%20%28don%26%238217%3Bt%20ask%29%2C%20language%20and%20complicated%20graphics%20were%20lifted%20directly%20from%20several%20reports%20by%20Toni%20Sacconaghi%20of%20Sanford%20Bernstein.%20%20%20%3Ca%20href%3D%22http%3A%2F%2Fexecutivesuite.blogs.nytimes.com%2F2008%2F08%2F28%2Fwall-street-research-a-new-low%2F%23more-74%22%3E%28more%26%238230%3B%29%3C%2Fa%3E%0A%3C%2Fp%3E%0A"/> 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href="javascript:document.getElementById('emailThis_74').submit();"><strong>E-mail this</strong></a> </li> <li id="share74" class="share"> <a onclick="javascript:showHideShareTool('sharelist74', 'share74');" id="sharebox74"> Share</a> <ul class="hide" id="sharelist74"> <li class="delicious"><a href="javascript:blogPostShare('delicious', '', 'August 28, 2008', '74');">Del.icio.us</a></li> <li class="digg"><a href="javascript:blogPostShare('digg', '', 'August 28, 2008', '74');">Digg</a></li> <li class="facebook"><a href="javascript:blogPostShare('facebook', '', 'August 28, 2008', '74');">Facebook</a></li> <li class="newsvine"><a href="javascript:blogPostShare('newsvine', '', 'August 28, 2008', '74');">Newsvine</a></li> <li class="permalink"><a href="javascript:blogPostShare('permalink', '', 'August 28, 2008', '74');">Permalink</a></li> </ul> </li> </ul> </div>  </div> <div class="blog_post home general "> <div class="post-info"> <small class="post-date2" id="day_27">August 27, 2008, 6:35 pm</small> <h2 class="post-title2"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/27/the-big-ten-winssort-of/" rel="bookmark" title="Permanent Link: The Big Ten Wins…Sort Of">The Big Ten Wins…Sort Of</a></h2> <p class="post-author2">By <span><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/author/jnocera/" title="Posts by Joe Nocera">Joe Nocera</a></span></p> </div> <div class="post-content2"> <p>When last we left the new Big Ten Network — in a <a href="https://web.archive.org/web/20080909231800/http://query.nytimes.com/gst/fullpage.html?res=9B02E0D91639F935A35753C1A9619C8B63&n=Top/News/Business/Columns/Joe%20Nocera&scp=2&sq=Big%20Ten%20Network%20nocera&st=cse">column </a>I wrote last October — the new all-Big-Ten-sports-all-the-time network was in a long struggle to gain carriage with the big cable companies, starting with Comcast, Time Warner and Charter Communications. The cable guys were outraged because the Big Ten wanted a dollar per subscriber per month — nearly triple the price commanded by, say, CNN or the USA Network — and was further demanding a primo spot on extended basic, which is where everybody who starts a network wants to be. For their part, the cable companies wanted to relegate the Big Ten Network to a sports tier, where the fans who watched the games would also be the ones who pay for them. For the record, while I do not believe in a la carte cable pricing, I do think that sports should be treated as an exception: sports channels are so expensive — ESPN alone is some $3 a month a subscriber — that it is the single biggest reason your cable bill is so high. Putting sports channels on a sports tier makes sense, it seems to me.</p> <p>So here we are less than a year later, with the Big Ten football season about to start, and it sure looks like the Big Ten is the Big Winner. All three cable companies recently agreed to do carriage deals with the Big Ten Network — even agreeing to put them on extended basic in the eight states where the Big Ten universities reside. The cable companies did win some concessions, however: in the rest of the country the network will be on a sports tier, and the cost per subscriber is far more realistic than the original $1 demand. (I hear it is around 50 cents per subscriber, which is still pretty pricey.)</p> <p>Why did the cable guys fold? Pretty simple. Big Ten fans were adamant about wanting the network, and the cable companies, fighting competition from the Internet and satellite companies — aren’t in much of a position to tick off 25 to 30 percent of their subscriber base. So they swallowed hard and cut a deal. You can be guaranteed that cable bills in the Midwest will be going up as a result. And you can also bet that every other intercollegiate league — the ACC, the Pac Ten, the Big East and all the rest of them — will soon be drawing up plans for a league of their own, with the same sorry result for cable subscribers.</p> <p>There is still, of course, one big carriage fight that remains unresolved — the mother of all disputes between the NFL Network and the cable companies. That one, however, isn’t going to end anytime. The blood is too bad, NFL games are too available (even the eight games the NFL Network broadcasts are also shown in local markets), and last year, when push came to shove, the network decided to give away its last game, between the New England Patriots and the New York Giants, to the broadcast networks because fan interest was so intense. They blinked first. The cable companies are never going to let them forget it. </p> </div> <div class="post-tools"> <ul id="post-tools-73"> <li class="comments-tool"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/27/the-big-ten-winssort-of/#comments" class="post-comment" title="Comment on The Big Ten Wins...Sort Of">Comments (7)</a></li> <li class="email-tool"> <form method="post" name="emailThis_73" id="emailThis_73" style="display: inline;" enctype="application/x-www-form-urlencoded" action="https://web.archive.org/web/20080909231800/http://www.nytimes.com/mem/emailthis.html"> <input type="hidden" name="type" value="1"/> <input type="hidden" name="url" value="http%3A%2F%2Fexecutivesuite.blogs.nytimes.com%2F2008%2F08%2F27%2Fthe-big-ten-winssort-of%2F"/> <input type="hidden" name="title" value="Executive%20Suite%3A%20The%20Big%20Ten%20Wins%26%238230%3BSort%20Of"/> <input type="hidden" name="full_text" value="%3Cp%3EWhen%20last%20we%20left%20the%20new%20Big%20Ten%20Network%20%26%238212%3B%20in%20a%20%3Ca%20href%3D%22http%3A%2F%2Fquery.nytimes.com%2Fgst%2Ffullpage.html%3Fres%3D9B02E0D91639F935A35753C1A9619C8B63%26%23038%3Bn%3DTop%2FNews%2FBusiness%2FColumns%2FJoe%2520Nocera%26%23038%3Bscp%3D2%26%23038%3Bsq%3DBig%2520Ten%2520Network%2520nocera%26%23038%3Bst%3Dcse%22%3Ecolumn%20%3C%2Fa%3EI%20wrote%20last%20October%20%26%238212%3B%20the%20new%20all-Big-Ten-sports-all-the-time%20network%20was%20in%20a%20long%20struggle%20to%20gain%20carriage%20with%20the%20big%20cable%20companies%2C%20starting%20with%20Comcast%2C%20Time%20Warner%20and%20Charter%20Communications.%20%20The%20cable%20guys%20were%20outraged%20because%20the%20Big%20Ten%20wanted%20a%20dollar%20per%20subscriber%20per%20month%20%26%238212%3B%20nearly%20triple%20the%20price%20commanded%20by%2C%20say%2C%20CNN%20or%20the%20USA%20Network%20%26%238212%3B%20and%20was%20further%20demanding%20a%20primo%20spot%20on%20extended%20basic%2C%20which%20is%20where%20everybody%20who%20starts%20a%20network%20wants%20to%20be.%20%20For%20their%20part%2C%20the%20cable%20companies%20wanted%20to%20relegate%20the%20Big%20Ten%20Network%20to%20a%20sports%20tier%2C%20where%20the%20fans%20who%20watched%20the%20games%20would%20also%20be%20the%20ones%20who%20pay%20for%20them.%20%20For%20the%20record%2C%20while%20I%20do%20not%20believe%20in%20a%20la%20carte%20cable%20pricing%2C%20I%20do%20think%20that%20sports%20should%20be%20treated%20as%20an%20exception%3A%20sports%20channels%20are%20so%20expensive%20%26%238212%3B%20ESPN%20alone%20is%20some%20%243%20a%20month%20a%20subscriber%20%26%238212%3B%20that%20it%20is%20the%20single%20biggest%20reason%20your%20cable%20bill%20is%20so%20high.%20%20Putting%20sports%20channels%20on%20a%20sports%20tier%20makes%20sense%2C%20it%20seems%20to%20me.%3C%2Fp%3E%0A%3Cp%3ESo%20here%20we%20are%20less%20than%20a%20year%20later%2C%20with%20the%20Big%20Ten%20football%20season%20about%20to%20start%2C%20and%20it%20sure%20looks%20like%20the%20Big%20Ten%20is%20the%20Big%20Winner.%20All%20three%20cable%20companies%20recently%20agreed%20to%20do%20carriage%20deals%20with%20the%20Big%20Ten%20Network%20%26%238212%3B%20even%20agreeing%20to%20put%20them%20on%20extended%20basic%20in%20the%20eight%20states%20where%20the%20Big%20Ten%20universities%20reside.%20%20The%20cable%20companies%20did%20win%20some%20concessions%2C%20however%3A%20in%20the%20rest%20of%20the%20country%20the%20network%20will%20be%20on%20a%20sports%20tier%2C%20and%20the%20cost%20per%20subscriber%20is%20far%20more%20realistic%20than%20the%20original%20%241%20demand.%20%20%28I%20hear%20it%20is%20around%2050%20cents%20per%20subscriber%2C%20which%20is%20still%20pretty%20pricey.%29%3C%2Fp%3E%0A%3Cp%3EWhy%20did%20the%20cable%20guys%20fold%3F%20%20Pretty%20simple.%20%20Big%20Ten%20fans%20were%20adamant%20about%20wanting%20the%20network%2C%20and%20the%20cable%20companies%2C%20fighting%20competition%20from%20the%20Internet%20and%20satellite%20companies%20%26%238212%3B%20aren%26%238217%3Bt%20in%20much%20of%20a%20position%20to%20tick%20off%2025%20to%2030%20percent%20of%20their%20subscriber%20base.%20%20So%20they%20swallowed%20hard%20and%20cut%20a%20deal.%20%20You%20can%20be%20guaranteed%20that%20cable%20bills%20in%20the%20Midwest%20will%20be%20going%20up%20as%20a%20result.%20%20And%20you%20can%20also%20bet%20that%20every%20other%20intercollegiate%20league%20%26%238212%3B%20the%20ACC%2C%20the%20Pac%20Ten%2C%20the%20Big%20East%20and%20all%20the%20rest%20of%20them%20%26%238212%3B%20will%20soon%20be%20drawing%20up%20plans%20for%20a%20league%20of%20their%20own%2C%20with%20the%20same%20sorry%20result%20for%20cable%20subscribers.%3C%2Fp%3E%0A%3Cp%3EThere%20is%20still%2C%20of%20course%2C%20one%20big%20carriage%20fight%20that%20remains%20unresolved%20%26%238212%3B%20the%20mother%20of%20all%20disputes%20between%20the%20NFL%20Network%20and%20the%20cable%20companies.%20%20That%20one%2C%20however%2C%20isn%26%238217%3Bt%20going%20to%20end%20anytime.%20%20The%20blood%20is%20too%20bad%2C%20NFL%20games%20are%20too%20available%20%28even%20the%20eight%20games%20the%20NFL%20Network%20broadcasts%20are%20also%20shown%20in%20local%20markets%29%2C%20and%20last%20year%2C%20when%20push%20came%20to%20shove%2C%20the%20network%20decided%20to%20give%20away%20its%20last%20game%2C%20between%20the%20New%20England%20Patriots%20and%20the%20New%20York%20Giants%2C%20to%20the%20broadcast%20networks%20because%20fan%20interest%20was%20so%20intense.%20%20They%20blinked%20first.%20%20The%20cable%20companies%20are%20never%20going%20to%20let%20them%20forget%20it.%0A%3C%2Fp%3E%0A"/> 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onclick="s_code_linktrack('Article-Tool-Email');" href="javascript:document.getElementById('emailThis_73').submit();"><strong>E-mail this</strong></a> </li> <li id="share73" class="share"> <a onclick="javascript:showHideShareTool('sharelist73', 'share73');" id="sharebox73"> Share</a> <ul class="hide" id="sharelist73"> <li class="delicious"><a href="javascript:blogPostShare('delicious', '', 'August 27, 2008', '73');">Del.icio.us</a></li> <li class="digg"><a href="javascript:blogPostShare('digg', '', 'August 27, 2008', '73');">Digg</a></li> <li class="facebook"><a href="javascript:blogPostShare('facebook', '', 'August 27, 2008', '73');">Facebook</a></li> <li class="newsvine"><a href="javascript:blogPostShare('newsvine', '', 'August 27, 2008', '73');">Newsvine</a></li> <li class="permalink"><a href="javascript:blogPostShare('permalink', '', 'August 27, 2008', '73');">Permalink</a></li> </ul> </li> </ul> </div>  </div> <div class="blog_post home general "> <div class="post-info"> <small class="post-date2" id="day_25">August 25, 2008, 4:07 pm</small> <h2 class="post-title2"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/25/what-if-michael-phelps-had-said-no/" rel="bookmark" title="Permanent Link: What If Phelps Had Said ‘No’">What If Phelps Had Said ‘No’</a></h2> <p class="post-author2">By <span><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/author/jnocera/" title="Posts by Joe Nocera">Joe Nocera</a></span></p> </div> <div class="post-content2"> <blockquote><p><em>“Michael was the first outsider I talked to about it,”<br/> Mr. Ebersol said in an interview from Beijing, where he wrapped up NBC’s coverage of the Games Sunday. He said he wanted to make sure that competing in the morning would not harm the likely American star of the Games.</em></p></blockquote> <p>I’ve been saying for weeks now — well, two weeks, anyway — that putting so much of the Games on live television probably made the difference between a successful Olympics and an unsuccessful one, at least from NBC’s point of view. Live sports are simply more compelling than taped sports, as the ratings — and the NBC’s $100 million in Olympic profit — clearly proved. But given the 12-hour time difference between Beijing and the East Coast of the United States, I had assumed that the deal to move many key events to the morning so that we in the United States could see them live in the evening had been struck between the International Olympic Committee and NBC, which paid $894 million for the rights to the Beijing Games.</p> <p>Silly me. According to Bill Carter in The New York Times this morning, shortly after getting the support for the move from the I.O.C., Dick Ebersol, the chairman of NBC Sports, then went to see his good friend, the swimmer Michael Phelps, to make sure that he was O.K. with the move. Isn’t this just a little — I don’t know — offensive?</p> <p>It’s one thing for the suits to cut a deal — but for an athlete to have a say in whether the move will hurt his performance? Isn’t it a little like asking Michael Jordan what time he would prefer to start a playoff game, or Tiger Woods when he would prefer teeing up? We’ve become completely inured to having television dictate starting times for sporting events — it’s why nobody on the East Coast can stay awake for the World Series; they just start too late. But consulting with one athlete — and not others — about changing a starting time to make sure it doesn’t hurt his medal haul, that’s pretty low. Mr. Ebersol may be a terrific businessman, but a true sportsman, he’s clearly not.</p> </div> <div class="post-tools"> <ul id="post-tools-72"> <li class="comments-tool"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/25/what-if-michael-phelps-had-said-no/#comments" class="post-comment" title="Comment on What If Phelps Had Said 'No'">Comments (13)</a></li> <li class="email-tool"> <form method="post" name="emailThis_72" id="emailThis_72" style="display: inline;" enctype="application/x-www-form-urlencoded" action="https://web.archive.org/web/20080909231800/http://www.nytimes.com/mem/emailthis.html"> <input type="hidden" name="type" value="1"/> <input type="hidden" name="url" value="http%3A%2F%2Fexecutivesuite.blogs.nytimes.com%2F2008%2F08%2F25%2Fwhat-if-michael-phelps-had-said-no%2F"/> <input type="hidden" name="title" value="Executive%20Suite%3A%20What%20If%20Phelps%20Had%20Said%20%26%238216%3BNo%26%238217%3B"/> <input type="hidden" 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onclick="s_code_linktrack('Article-Tool-Email');" href="javascript:document.getElementById('emailThis_72').submit();"><strong>E-mail this</strong></a> </li> <li id="share72" class="share"> <a onclick="javascript:showHideShareTool('sharelist72', 'share72');" id="sharebox72"> Share</a> <ul class="hide" id="sharelist72"> <li class="delicious"><a href="javascript:blogPostShare('delicious', '', 'August 25, 2008', '72');">Del.icio.us</a></li> <li class="digg"><a href="javascript:blogPostShare('digg', '', 'August 25, 2008', '72');">Digg</a></li> <li class="facebook"><a href="javascript:blogPostShare('facebook', '', 'August 25, 2008', '72');">Facebook</a></li> <li class="newsvine"><a href="javascript:blogPostShare('newsvine', '', 'August 25, 2008', '72');">Newsvine</a></li> <li class="permalink"><a href="javascript:blogPostShare('permalink', '', 'August 25, 2008', '72');">Permalink</a></li> </ul> </li> </ul> </div>  </div> <div class="blog_post home general "> <div class="post-info"> <small class="post-date2" id="day_22">August 22, 2008, 5:35 pm</small> <h2 class="post-title2"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/22/what-should-we-do-about-fannie-and-freddie/" rel="bookmark" title="Permanent Link: What Should We Do About Fannie and Freddie?">What Should We Do About Fannie and Freddie?</a></h2> <p class="post-author2">By <span><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/author/jnocera/" title="Posts by Joe Nocera">Joe Nocera</a></span></p> </div> <div class="post-content2"> <p>My <a href="https://web.archive.org/web/20080909231800/http://www.nytimes.com/2008/08/23/business/23nocera.html">column</a> this Saturday is a mini-history of the sins of Fannie Mae and Freddie Mac, two entities that are supposed to help the country in times of financial duress, not add to its problems, as they have done. What got me going was an article I saw in The Boston Globe (which is owned by The New York Times Company), in which Freddie Mac’s chief executive, Richard Syron, made the absurd claim that the company’s troubles stemmed from his insistence that it reorient itself towards its mission of making affordable housing available to Americans. This — to put it nicely — is a crock, as I try to point out in the column.</p> <p>In the course of my reporting, I heard all sorts of suggestions for remedies. Some thought they should be nationalized, others felt they should be allowed to fail, and still others felt that the government should take over the companies during this housing crisis, but eventually split them into a dozen or so smaller entitities that would compete with each other for business. Lawrence Summers, the former president of Harvard, is a strong proponent of this approach, a position he makes clear in <a href="https://web.archive.org/web/20080909231800/http://www.ft.com/cms/s/0/b150d388-5bf8-11dd-9e99-000077b07658.html?nclick_check=1">this column</a> from The Financial Times. (Alan Greenspan favors this approach as well.)</p> <p>In my column, I didn’t delve into possible outcomes, though I may tackle the subject in a future column. Meanwhile, let me know how you would solve the Fannie/Freddie problem. I’m all ears. </p> </div> <div class="post-tools"> <ul id="post-tools-70"> <li class="comments-tool"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/22/what-should-we-do-about-fannie-and-freddie/#comments" class="post-comment" title="Comment on What Should We Do About Fannie and Freddie?">Comments (50)</a></li> <li class="email-tool"> <form method="post" name="emailThis_70" id="emailThis_70" style="display: inline;" enctype="application/x-www-form-urlencoded" action="https://web.archive.org/web/20080909231800/http://www.nytimes.com/mem/emailthis.html"> <input type="hidden" name="type" value="1"/> <input type="hidden" name="url" value="http%3A%2F%2Fexecutivesuite.blogs.nytimes.com%2F2008%2F08%2F22%2Fwhat-should-we-do-about-fannie-and-freddie%2F"/> <input type="hidden" name="title" value="Executive%20Suite%3A%20What%20Should%20We%20Do%20About%20Fannie%20and%20Freddie%3F"/> <input type="hidden" name="full_text" value="%3Cp%3EMy%20%3Ca%20href%3D%22http%3A%2F%2Fwww.nytimes.com%2F2008%2F08%2F23%2Fbusiness%2F23nocera.html%22%3Ecolumn%3C%2Fa%3E%20this%20Saturday%20is%20a%20mini-history%20of%20the%20sins%20of%20Fannie%20Mae%20and%20Freddie%20Mac%2C%20two%20entities%20that%20are%20supposed%20to%20help%20the%20country%20in%20times%20of%20financial%20duress%2C%20not%20add%20to%20its%20problems%2C%20as%20they%20have%20done.%20%20What%20got%20me%20going%20was%20an%20article%20I%20saw%20in%20The%20Boston%20Globe%20%28which%20is%20owned%20by%20The%20New%20York%20Times%20Company%29%2C%20in%20which%20Freddie%20Mac%26%238217%3Bs%20chief%20executive%2C%20Richard%20Syron%2C%20made%20the%20absurd%20claim%20that%20the%20company%26%238217%3Bs%20troubles%20stemmed%20from%20his%20insistence%20that%20it%20reorient%20itself%20towards%20its%20mission%20of%20making%20affordable%20housing%20available%20to%20Americans.%20%20This%20%26%238212%3B%20to%20put%20it%20nicely%20%26%238212%3B%20is%20a%20crock%2C%20as%20I%20try%20to%20point%20out%20in%20the%20column.%3C%2Fp%3E%0A%3Cp%3EIn%20the%20course%20of%20my%20reporting%2C%20I%20heard%20all%20sorts%20of%20suggestions%20for%20remedies.%20%20Some%20thought%20they%20should%20be%20nationalized%2C%20others%20felt%20they%20should%20be%20allowed%20to%20fail%2C%20and%20still%20others%20felt%20that%20the%20government%20should%20take%20over%20the%20companies%20during%20this%20housing%20crisis%2C%20but%20eventually%20split%20them%20into%20a%20dozen%20or%20so%20smaller%20entitities%20that%20would%20compete%20with%20each%20other%20for%20business.%20%20Lawrence%20Summers%2C%20the%20former%20president%20of%20Harvard%2C%20is%20a%20strong%20proponent%20of%20this%20approach%2C%20a%20position%20he%20makes%20clear%20in%20%3Ca%20href%3D%22http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fb150d388-5bf8-11dd-9e99-000077b07658.html%3Fnclick_check%3D1%22%3Ethis%20column%3C%2Fa%3E%20from%20The%20Financial%20Times.%20%20%28Alan%20Greenspan%20favors%20this%20approach%20as%20well.%29%3C%2Fp%3E%0A%3Cp%3EIn%20my%20column%2C%20I%20didn%26%238217%3Bt%20delve%20into%20possible%20outcomes%2C%20though%20I%20may%20tackle%20the%20subject%20in%20a%20future%20column.%20%20Meanwhile%2C%20let%20me%20know%20how%20you%20would%20solve%20the%20Fannie%2FFreddie%20problem.%20%20I%26%238217%3Bm%20all%20ears.%0A%3C%2Fp%3E%0A"/> 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href="javascript:document.getElementById('emailThis_70').submit();"><strong>E-mail this</strong></a> </li> <li id="share70" class="share"> <a onclick="javascript:showHideShareTool('sharelist70', 'share70');" id="sharebox70"> Share</a> <ul class="hide" id="sharelist70"> <li class="delicious"><a href="javascript:blogPostShare('delicious', '', 'August 22, 2008', '70');">Del.icio.us</a></li> <li class="digg"><a href="javascript:blogPostShare('digg', '', 'August 22, 2008', '70');">Digg</a></li> <li class="facebook"><a href="javascript:blogPostShare('facebook', '', 'August 22, 2008', '70');">Facebook</a></li> <li class="newsvine"><a href="javascript:blogPostShare('newsvine', '', 'August 22, 2008', '70');">Newsvine</a></li> <li class="permalink"><a href="javascript:blogPostShare('permalink', '', 'August 22, 2008', '70');">Permalink</a></li> </ul> </li> </ul> </div>  </div> <div class="blog_post home general "> <div class="post-info"> <small class="post-date2" id="day_22">August 22, 2008, 2:34 pm</small> <h2 class="post-title2"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/22/gene-upshaws-tunnel-vision/" rel="bookmark" title="Permanent Link: Gene Upshaw’s Tunnel Vision">Gene Upshaw’s Tunnel Vision</a></h2> <p class="post-author2">By <span><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/author/jnocera/" title="Posts by Joe Nocera">Joe Nocera</a></span></p> </div> <div class="post-content2"> <div class="standard190 right"><img src="https://web.archive.org/web/20080909231800im_/http://graphics8.nytimes.com/images/blogs/executivesuite/posts/upshaw190.jpg" alt="Gene Upshaw"/><span class="caption">Gene Upshaw in February, 2008 (credit: Chip Somodevilla/Getty Images)</span></div> <p>Eugene Upshaw, the 63-year-old head of the National Football League Players Association, died on Thursday morning of pancreatic cancer, and the football establishment spent the rest of the day singing his praises. “Gene Upshaw did everything with grace and dignity,” the NFL commissioner Roger Goodel said. Mr. Goodell’s predecessor, Paul Tagliabue, pointed to Mr. Upshaw’s “positive impact on the structure and competitiveness of the entire league.” Adam Schefter, an analyst with the NFL Network, called him “one of the most influential figures that has ever been involved in the sport of football.” Newsday’s football writer Bob Glauber: “There’s no question in my mind that his legacy will, in hindsight, be perceived as not good, but great.” And on, and on.</p> <p>There is no question that Mr. Upshaw was, as they say in football, a difference-maker. Taking over the union in 1983, Mr. Upshaw faced down the toughest, most stubborn group of owners in sports, who were determined not to give football players the same freedoms that baseball players and basketball players had won. Over time, he built the N.F.L.P.A into a force, using a series of shrewd tactical maneuvers to gain — yes — free agency for the players, just like baseball and basketball players, and made many of them immensely wealthy in the process. He also helped bring about long-term labor peace that had a lot to do with the N.F.L.’s staggering prosperity. <a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/22/gene-upshaws-tunnel-vision/#more-69">Read more …</a> </p> </div> <div class="post-tools"> <ul id="post-tools-69"> <li class="comments-tool"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/22/gene-upshaws-tunnel-vision/#comments" class="post-comment" title="Comment on Gene Upshaw's Tunnel Vision">Comments (2)</a></li> <li class="email-tool"> <form method="post" name="emailThis_69" id="emailThis_69" style="display: inline;" enctype="application/x-www-form-urlencoded" action="https://web.archive.org/web/20080909231800/http://www.nytimes.com/mem/emailthis.html"> <input type="hidden" name="type" value="1"/> <input type="hidden" name="url" value="http%3A%2F%2Fexecutivesuite.blogs.nytimes.com%2F2008%2F08%2F22%2Fgene-upshaws-tunnel-vision%2F"/> <input type="hidden" name="title" value="Executive%20Suite%3A%20Gene%20Upshaw%26%238217%3Bs%20Tunnel%20Vision"/> <input type="hidden" name="full_text" 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home general "> <div class="post-info"> <small class="post-date2" id="day_20">August 20, 2008, 10:15 pm</small> <h2 class="post-title2"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/20/a-tale-of-two-photos/" rel="bookmark" title="Permanent Link: A Tale of Two Photos">A Tale of Two Photos</a></h2> <p class="post-author2">By <span><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/author/jnocera/" title="Posts by Joe Nocera">Joe Nocera</a></span></p> </div> <div class="post-content2"> <div class="full-width"><img src="https://web.archive.org/web/20080909231800im_/http://graphics8.nytimes.com/images/blogs/executivesuite/posts/OldRuth533.jpg" alt="Ruth's Chris Original Location"/><span class="caption">Ruth’s Chris Steak House’s original location in the Mid-City neighborhood of New Orleans.</span></div> <p>The photograph above is of a building in New Orleans. It is located at 711 North Broad, in neighborhood called Mid-City, which is more inhabited than some other parts of New Orleans, but which still has long stretches of abandoned buildings. This, clearly, is one of them. Before Hurricane Katrina hit almost three years ago, however, 711 North Broad was a famous address, the home to one of New Orleans’s most storied restaurants: Ruth’s Chris Steak House.</p> <p>Ruth’s Chris is now a national chain, of course, with a publicly traded stock, although a large stake is still held by Madison Dearborn Partners, a Chicago-based private equity firm that bought it from Ruth Fertel in 1999. (She died in 2002.) This building above is where it all began: where Ms. Fertel, a woman with no formal business or culinary training, opened a restaurant that quickly became a New Orleans institution. Over time, she opened a handful of other Ruth’s Chris restaurants until she had a bona-fide upscale restaurant chain on her hands. As Ruth’s Chris went from being a restaurant to a company, it also had its headquarters in New Orleans, one of the city’s very few growing businesses.</p> <p>Literally days after Katrina hit, the management of Ruth’s Chris announced the it was moving its headquarters to Orlando, Fla., making it the first company to officially abandon the city. I wrote a <a href="https://web.archive.org/web/20080909231800/http://query.nytimes.com/gst/fullpage.html?res=9507E4DC1F3EF931A3575AC0A9609C8B63&sec=&spon=&pagewanted=1">column </a>about that decision, in which I lamented Ruth’s Chris decision, while sympathizing with its dilemma. Recently, however, a reader pointed out that Ruth’s Chris has reopened its New Orleans restaurant — not in Mid-City, but in a flashy new location near Fulton Street in the thriving Central Business District. That’s the picture below. Now I’m not so sympathetic.</p> <div class="full-width"><img src="https://web.archive.org/web/20080909231800im_/http://graphics8.nytimes.com/images/blogs/executivesuite/posts/NewRuth533.jpg" alt="Ruth's Chris New Location"/><span class="caption">Ruth’s Chris’s new location in the Central Business District of New Orleans.</span></div> <p>It’s not that I think the company should have reopened in the old location; though it would have been a wonderful gesture, I understand the economic difficulty of reopening in an area of the city that is still struggling. <a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/20/a-tale-of-two-photos/#more-68">Read more …</a> </p> </div> <div class="post-tools"> <ul id="post-tools-68"> <li class="comments-tool"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/20/a-tale-of-two-photos/#comments" class="post-comment" title="Comment on A Tale of Two 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class="post-info"> <small class="post-date2" id="day_19">August 19, 2008, 5:55 pm</small> <h2 class="post-title2"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/19/bill-ford-er-environmentalist/" rel="bookmark" title="Permanent Link: Bill Ford, er, Environmentalist">Bill Ford, er, Environmentalist</a></h2> <p class="post-author2">By <span><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/author/jnocera/" title="Posts by Joe Nocera">Joe Nocera</a></span></p> </div> <div class="post-content2"> <p>“I knew this day would come,” Bill Ford Jr., told Maria Bartiromo in the <a href="https://web.archive.org/web/20080909231800/http://www.businessweek.com/magazine/content/08_32/b4095018293942.htm">latest issue</a> of Business Week. “I’ve been an environmentalist my whole life, and I’ve fought a lot of battles during 30 years at Ford.” He continued: “I was viewed as a bit of a Bolshevik throughout my whole career because I knew this day was coming. So we built the Rouge Plant, which was the greenest plant on the planet and….we also launched the first American hybrid, the Escape. But gasoline prices were cheap, and customers were buying many more of our big F-150s than they were of our Escape hybrids.”</p> <p>Well, yes, I suppose that is the argument you would make if you were Bill Ford — just as Alan Greenspan is busy these days making excuses for being asleep at the switch during the housing bubble. But when you hear him say he knew this day was coming — this day of $4.00 a gallon gasoline and concern over global warming — you want to grab him by his expensive lapels and shout: “So why didn’t you do anything to prepare your company for this day?” </p> <p>A quick refresher: Mr. Ford became chairman of Ford in 1999, at a time when the company was making money, and chief executive in 2002, when it was in crisis. He did indeed tout his environmental credentials, and, after an explosion that killed a half-dozen workers, he also led the charge to turn the Rouge Plant into a green facility, with solar panels and all the rest. But do you know what the “greenest plant on the planet” manufactures? Would you believe those gas-guzzling F-150 trucks? Yep. (The plant is currently shut down until September, when it will reopen with two shifts instead of three.) <a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/19/bill-ford-er-environmentalist/#more-67">Read more …</a> </p> </div> <div class="post-tools"> <ul id="post-tools-67"> <li class="comments-tool"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/19/bill-ford-er-environmentalist/#comments" class="post-comment" title="Comment on Bill Ford, er, Environmentalist">Comments (6)</a></li> <li class="email-tool"> <form method="post" name="emailThis_67" id="emailThis_67" style="display: inline;" enctype="application/x-www-form-urlencoded" action="https://web.archive.org/web/20080909231800/http://www.nytimes.com/mem/emailthis.html"> <input type="hidden" name="type" value="1"/> <input type="hidden" name="url" 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value="%3Cp%3E%26%238220%3BI%20knew%20this%20day%20would%20come%2C%26%238221%3B%20Bill%20Ford%20Jr.%2C%20told%20Maria%20Bartiromo%20in%20the%20%3Ca%20href%3D%22http%3A%2F%2Fwww.businessweek.com%2Fmagazine%2Fcontent%2F08_32%2Fb4095018293942.htm%22%3Elatest%20issue%3C%2Fa%3E%20of%20Business%20Week.%20%20%26%238220%3BI%26%238217%3Bve%20been%20an%20environmentalist%20my%20whole%20life%2C%20and%20I%26%238217%3Bve%20fought%20a%20lot%20of%20battles%20during%2030%20years%20at%20Ford.%26%238221%3B%20%20He%20continued%3A%20%26%238220%3BI%20was%20viewed%20as%20a%20bit%20of%20a%20Bolshevik%20throughout%20my%20whole%20career%20because%20I%20knew%20this%20day%20was%20coming.%20%20So%20we%20built%20the%20Rouge%20Plant%2C%20which%20was%20the%20greenest%20plant%20on%20the%20planet%20and%26%238230%3B.we%20also%20launched%20the%20first%20American%20hybrid%2C%20the%20Escape.%20%20But%20gasoline%20prices%20were%20cheap%2C%20and%20customers%20were%20buying%20many%20more%20of%20our%20big%20F-150s%20than%20they%20were%20of%20our%20Escape%20hybrids.%26%238221%3B%3C%2Fp%3E%0A%3Cp%3EWell%2C%20yes%2C%20I%20suppose%20that%20is%20the%20argument%20you%20would%20make%20if%20you%20were%20Bill%20Ford%20%26%238212%3B%20just%20as%20Alan%20Greenspan%20is%20busy%20these%20days%20making%20excuses%20for%20being%20asleep%20at%20the%20switch%20during%20the%20housing%20bubble.%20%20But%20when%20you%20hear%20him%20say%20he%20knew%20this%20day%20was%20coming%20%26%238212%3B%20this%20day%20of%20%244.00%20a%20gallon%20gasoline%20and%20concern%20over%20global%20warming%20%26%238212%3B%20you%20want%20to%20grab%20him%20by%20his%20expensive%20lapels%20and%20shout%3A%20%26%238220%3BSo%20why%20didn%26%238217%3Bt%20you%20do%20anything%20to%20prepare%20your%20company%20for%20this%20day%3F%26%238221%3B%20%20%3C%2Fp%3E%0A%3Cp%3EA%20quick%20refresher%3A%20Mr.%20Ford%20became%20chairman%20of%20Ford%20in%201999%2C%20at%20a%20time%20when%20the%20company%20was%20making%20money%2C%20and%20chief%20executive%20in%202002%2C%20when%20it%20was%20in%20crisis.%20%20He%20did%20indeed%20tout%20his%20environmental%20credentials%2C%20and%2C%20after%20an%20explosion%20that%20killed%20a%20half-dozen%20workers%2C%20he%20also%20led%20the%20charge%20to%20turn%20the%20Rouge%20Plant%20into%20a%20green%20facility%2C%20with%20solar%20panels%20and%20all%20the%20rest.%20%20But%20do%20you%20know%20what%20the%20%26%238220%3Bgreenest%20plant%20on%20the%20planet%26%238221%3B%20manufactures%3F%20%20Would%20you%20believe%20those%20gas-guzzling%20F-150%20trucks%3F%20%20Yep.%20%20%28The%20plant%20is%20currently%20shut%20down%20until%20September%2C%20when%20it%20will%20reopen%20with%20two%20shifts%20instead%20of%20three.%29%20%3Ca%20href%3D%22http%3A%2F%2Fexecutivesuite.blogs.nytimes.com%2F2008%2F08%2F19%2Fbill-ford-er-environmentalist%2F%23more-67%22%3E%28more%26%238230%3B%29%3C%2Fa%3E%0A%3C%2Fp%3E%0A"/> 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class="post-email" onclick="s_code_linktrack('Article-Tool-Email');" href="javascript:document.getElementById('emailThis_67').submit();"><strong>E-mail this</strong></a> </li> <li id="share67" class="share"> <a onclick="javascript:showHideShareTool('sharelist67', 'share67');" id="sharebox67"> Share</a> <ul class="hide" id="sharelist67"> <li class="delicious"><a href="javascript:blogPostShare('delicious', '', 'August 19, 2008', '67');">Del.icio.us</a></li> <li class="digg"><a href="javascript:blogPostShare('digg', '', 'August 19, 2008', '67');">Digg</a></li> <li class="facebook"><a href="javascript:blogPostShare('facebook', '', 'August 19, 2008', '67');">Facebook</a></li> <li class="newsvine"><a href="javascript:blogPostShare('newsvine', '', 'August 19, 2008', '67');">Newsvine</a></li> <li class="permalink"><a href="javascript:blogPostShare('permalink', '', 'August 19, 2008', '67');">Permalink</a></li> </ul> </li> </ul> </div>  </div> <div class="blog_post home general "> <div class="post-info"> <small class="post-date2" id="day_12">August 12, 2008, 5:30 pm</small> <h2 class="post-title2"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/12/why-wont-china-trust-mr-market/" rel="bookmark" title="Permanent Link: Why Won’t China Trust Mr. Market?">Why Won’t China Trust Mr. Market?</a></h2> <p class="post-author2">By <span><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/author/jnocera/" title="Posts by Joe Nocera">Joe Nocera</a></span></p> </div> <div class="post-content2"> <blockquote><p>With sentiment on the A-share markets negative in spite of ongoing rapid growth in the underlying economy, the government may also introduce further measures aimed at combating excessive negative sentiment. Widely discussed policy measures include:</p> <p>- Reducing transaction costs by reforming the stamp duty from a 0.1 percent two-way tax to a one-way tax payable only on the sale of shares; and,</p> <p>- Establishing a stabilization fund for the domestic market.</p> <p>With the A-share market falling 57 percent year to date, the average premium of dual-listed A-shares over their corresponding H-shares has narrowed to a historical low of 18 percent. The A-shares for several major listed companies including Angang Steel, Anhui Conch Cement and Bank of Communications are now trading at significant discounts to their H-share counterparts.</p></blockquote> <p>So writes Jing Ulrich, who follows the Chinese equity market out of JP Morgan’s Hong Kong office, in her latest note to clients. (For the record: A shares are stocks of Chinese companies listed on the Shanghai exchange; H shares are Chinese stocks traded on the Hong Kong exchange.) Since last year, Ms. Ulrich has been following the steep decline of the Shanghai A shares — and the many steps the government has taken to stabilize the market. None have worked, and it is highly unlike that these two new proposals — reforming the stamp duty and establishing a “stabilizing fund” to help prop up the market — will work either. </p> <p>Why? First, the Shanghai market had been in serious bubble territory even before this year’s steep decline, and so this correction is actually a return to reality. Second, the Shanghai exchange is more a Potemkin market than a real stock market. Most of the shares of the listed companies are owned by the government, so the float is usually very small — and thus extremely volatile. The reporting requirements are — how shall we put this — a tad different than those required by the S.E.C. and the New York Stock Exchange, not to mention the European bourses and the Hong Kong Exchange. It is hard to know how real the numbers are, for example, in a banking sector that can keep quiet about bad loans — with the government’s approval. And what fuels the Shanghai market is not so much securities analysis as hot tips and rumors. In a market like that, when the psychology turns from positive to negative, it is almost impossible to turn it back. The government simply cannot will the market to go up again, much as it would like to.</p> <p>I take that back. It could get its market on track again — not by tightening control but by loosening it. Let more shares onto the exchange, privatize more of the big state-run companies, impose real reporting requirements, let more private companies list on the exchange (most of them go to Hong Kong, London or New York), and allow foreign investment banks to set up trading operations. And then get out of the way. That is what China has such a hard time doing — letting go. We see it at the Olympics, where it wants to control the Internet sites that can be seen by the foreign press; and we see it in the way it handles the crisis in Tibet. And we see it in the economy, too. For all the smart things China has done economically these last three decades, the government’s enduring distrust of the workings of the market hurts it in a hundred different ways. The unwillingness to let the Shanghai exchange become a real stock market is a small but telling example. </p> </div> <div class="post-tools"> <ul id="post-tools-66"> <li class="comments-tool"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/08/12/why-wont-china-trust-mr-market/#comments" class="post-comment" title="Comment on Why Won't China Trust Mr. Market?">Comments (10)</a></li> <li class="email-tool"> <form method="post" name="emailThis_66" id="emailThis_66" style="display: inline;" enctype="application/x-www-form-urlencoded" action="https://web.archive.org/web/20080909231800/http://www.nytimes.com/mem/emailthis.html"> <input type="hidden" name="type" value="1"/> <input type="hidden" name="url" value="http%3A%2F%2Fexecutivesuite.blogs.nytimes.com%2F2008%2F08%2F12%2Fwhy-wont-china-trust-mr-market%2F"/> <input type="hidden" name="title" value="Executive%20Suite%3A%20Why%20Won%26%238217%3Bt%20China%20Trust%20Mr.%20Market%3F"/> <input 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value="%3Cblockquote%3E%3Cp%3EWith%20sentiment%20on%20the%20A-share%20markets%20negative%20in%20spite%20of%20ongoing%20rapid%20growth%20in%20the%20underlying%20economy%2C%20the%20government%20may%20also%20introduce%20further%20measures%20aimed%20at%20combating%20excessive%20negative%20sentiment.%20Widely%20discussed%20policy%20measures%20include%3A%3C%2Fp%3E%0A%3Cp%3E-%20Reducing%20transaction%20costs%20by%20reforming%20the%20stamp%20duty%20from%20a%200.1%20percent%20two-way%20tax%20to%20a%20one-way%20tax%20payable%20only%20on%20the%20sale%20of%20shares%3B%20and%2C%3C%2Fp%3E%0A%3Cp%3E-%20Establishing%20a%20stabilization%20fund%20for%20the%20domestic%20market.%3C%2Fp%3E%0A%3Cp%3EWith%20the%20A-share%20market%20falling%2057%20percent%20year%20to%20date%2C%20the%20average%20premium%20of%20dual-listed%20A-shares%20over%20their%20corresponding%20H-shares%20has%20narrowed%20to%20a%20historical%20low%20of%2018%20percent.%20The%20A-shares%20for%20several%20major%20listed%20companies%20including%20Angang%20Steel%2C%20Anhui%20Conch%20Cement%20and%20Bank%20of%20Communications%20are%20now%20trading%20at%20significant%20discounts%20to%20their%20H-share%20counterparts.%3C%2Fp%3E%3C%2Fblockquote%3E%0A%3Cp%3ESo%20writes%20%20Jing%20Ulrich%2C%20who%20follows%20the%20Chinese%20equity%20market%20out%20of%20JP%20Morgan%26%238217%3Bs%20Hong%20Kong%20office%2C%20in%20her%20latest%20note%20to%20clients.%20%20%28For%20the%20record%3A%20A%20shares%20are%20stocks%20of%20Chinese%20companies%20listed%20on%20the%20Shanghai%20exchange%3B%20H%20shares%20are%20Chinese%20stocks%20traded%20on%20the%20Hong%20Kong%20exchange.%29%20%20Since%20last%20year%2C%20Ms.%20Ulrich%20has%20been%20following%20the%20steep%20decline%20of%20the%20Shanghai%20A%20shares%20%26%238212%3B%20and%20the%20many%20steps%20the%20government%20has%20taken%20to%20stabilize%20the%20market.%20%20None%20have%20worked%2C%20and%20it%20is%20highly%20unlike%20that%20these%20two%20new%20proposals%20%26%238212%3B%20reforming%20the%20stamp%20duty%20and%20establishing%20a%20%26%238220%3Bstabilizing%20fund%26%238221%3B%20to%20help%20prop%20up%20the%20market%20%26%238212%3B%20will%20work%20either.%20%20%3C%2Fp%3E%0A%3Cp%3EWhy%3F%20%20First%2C%20the%20Shanghai%20market%20had%20been%20in%20serious%20bubble%20territory%20even%20before%20this%20year%26%238217%3Bs%20steep%20decline%2C%20and%20so%20this%20correction%20is%20actually%20a%20return%20to%20reality.%20%20Second%2C%20the%20Shanghai%20exchange%20is%20more%20a%20Potemkin%20market%20than%20a%20real%20stock%20market.%20%20Most%20of%20the%20shares%20of%20the%20listed%20companies%20are%20owned%20by%20the%20government%2C%20so%20the%20float%20is%20usually%20very%20small%20%26%238212%3B%20and%20thus%20extremely%20volatile.%20%20The%20reporting%20requirements%20are%20%26%238212%3B%20how%20shall%20we%20put%20this%20%26%238212%3B%20a%20tad%20different%20than%20those%20required%20by%20the%20S.E.C.%20and%20the%20New%20York%20Stock%20Exchange%2C%20not%20to%20mention%20the%20European%20bourses%20and%20the%20Hong%20Kong%20Exchange.%20%20It%20is%20hard%20to%20know%20how%20real%20the%20numbers%20are%2C%20for%20example%2C%20in%20a%20banking%20sector%20that%20can%20keep%20quiet%20about%20bad%20loans%20%26%238212%3B%20with%20the%20government%26%238217%3Bs%20approval.%20%20And%20what%20fuels%20the%20Shanghai%20market%20is%20not%20so%20much%20securities%20analysis%20as%20hot%20tips%20and%20rumors.%20%20In%20a%20market%20like%20that%2C%20when%20the%20psychology%20turns%20from%20positive%20to%20negative%2C%20it%20is%20almost%20impossible%20to%20turn%20it%20back.%20%20The%20government%20simply%20cannot%20will%20the%20market%20to%20go%20up%20again%2C%20much%20as%20it%20would%20like%20to.%3C%2Fp%3E%0A%3Cp%3EI%20take%20that%20back.%20%20It%20could%20get%20its%20market%20on%20track%20again%20%26%238212%3B%20not%20by%20tightening%20control%20but%20by%20loosening%20it.%20%20Let%20more%20shares%20onto%20the%20exchange%2C%20privatize%20more%20of%20the%20big%20state-run%20companies%2C%20impose%20real%20reporting%20requirements%2C%20let%20more%20private%20companies%20list%20on%20the%20exchange%20%28most%20of%20them%20go%20to%20Hong%20Kong%2C%20London%20or%20New%20York%29%2C%20and%20allow%20foreign%20investment%20banks%20to%20set%20up%20trading%20operations.%20%20And%20then%20get%20out%20of%20the%20way.%20%20That%20is%20what%20China%20has%20such%20a%20hard%20time%20doing%20%26%238212%3B%20letting%20go.%20%20We%20see%20it%20at%20the%20Olympics%2C%20where%20it%20wants%20to%20control%20the%20Internet%20sites%20that%20can%20be%20seen%20by%20the%20foreign%20press%3B%20and%20we%20see%20it%20in%20the%20way%20it%20handles%20the%20crisis%20in%20Tibet.%20%20And%20we%20see%20it%20in%20the%20economy%2C%20too.%20%20For%20all%20the%20smart%20things%20China%20has%20done%20economically%20these%20last%20three%20decades%2C%20the%20government%26%238217%3Bs%20enduring%20distrust%20of%20the%20workings%20of%20the%20market%20hurts%20it%20in%20a%20hundred%20different%20ways.%20%20The%20unwillingness%20to%20let%20the%20Shanghai%20exchange%20become%20a%20real%20stock%20market%20is%20a%20small%20but%20telling%20example.%0A%3C%2Fp%3E%0A"/> 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He loves exposing the hurly-burly of clashing executive egos, the deal-making bravura, and the occasional (or not so occasional) stumbles that powerful executives make. But he also loves pointing out those (more than occasional) times when they get it right. Executive Suite offers his take on topics from Steve Jobs and iPhones to the future of General Motors — and much more.</p> <ul class="refer"> <li class="free"><a href="https://web.archive.org/web/20080909231800/http://topics.nytimes.com/top/reference/timestopics/people/n/joe_nocera/index.html" title="Joe Nocera Topic Page">Joe Nocera Topics Page</a></li> <li class="free"><a href="https://web.archive.org/web/20080909231800/http://executivesuite.blogs.nytimes.com/2008/07/11/birth-of-a-blogger/" title="Joe Nocera Topic Page">More about the blog</a></li> </ul> </div></div> <div id="blog_sidead">  <script language="JavaScript">  </script> <noscript> <a href="https://web.archive.org/web/20080909231800/http://www.nytimes.com/adx/bin/adx_click.html?type=cookie&pos=SFMiddle"><img 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title="Good Guys and Bad Guys: Behind the Scenes with the Saints and Scoundrels of American Business (and Everything in Between)">Good Guys and Bad Guys: Behind the Scenes with the Saints and Scoundrels of American Business (and Everything in Between)</a></h5> <p class="byline">By Joe Nocera</p> <a class="buy-button" title="Good Guys and Bad Guys: Behind the Scenes with the Saints and Scoundrels of American Business (and Everything in Between)" href="https://web.archive.org/web/20080909231800/http://www.amazon.com/Good-Guys-Bad-Scoundrels-Everything/dp/1591841623/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1214852757&sr=8-1&nyt-blog-20"><img alt="Buy This Book on Amazon.com" src="https://web.archive.org/web/20080909231800im_/http://graphics8.nytimes.com/images/blogs/common/amazon-buy-button.jpg"/></a> </div> </div><div class="side_tool"><h4 class="left">Monthly Archives</h4> <div class="selector"> <select name="archive_chrono" onchange="goToURL2(this); this.selectedIndex=this.options[0]"> 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