The Education Revolution: In China, Families Bet It All on a Child in College


Chang W. Lee/The New York Times


Wu Caoying studied English under her father’s watchful eye in 2006. She is now a sophomore in college. More Photos »







HANJING, China — Wu Yiebing has been going down coal shafts practically every workday of his life, wrestling an electric drill for $500 a month in the choking dust of claustrophobic tunnels, with one goal in mind: paying for his daughter’s education.




His wife, Cao Weiping, toils from dawn to sunset in orchards every day during apple season in May and June. She earns $12 a day tying little plastic bags one at a time around 3,000 young apples on trees, to protect them from insects. The rest of the year she works as a substitute store clerk, earning several dollars a day, all going toward their daughter’s education.


Many families in the West sacrifice to put their children through school, saving for college educations that they hope will lead to a better life. Few efforts can compare with the heavy financial burden that millions of lower-income Chinese parents now endure as they push their children to obtain as much education as possible.


Yet a college degree no longer ensures a well-paying job, because the number of graduates in China has quadrupled in the last decade.


Mr. Wu and Mrs. Cao, who grew up in tiny villages in western China and became migrants in search of better-paying work, have scrimped their entire lives. For nearly two decades, they have lived in a cramped and drafty 200-square-foot house with a thatch roof. They have never owned a car. They do not take vacations — they have never seen the ocean. They have skipped traditional New Year trips to their ancestral village for up to five straight years to save on bus fares and gifts, and for Mr. Wu to earn extra holiday pay in the mines. Despite their frugality, they have essentially no retirement savings.


Thanks to these sacrifices, their daughter, Wu Caoying, is now a 19-year-old college sophomore. She is among the growing millions of Chinese college students who have gone much farther than their parents could have dreamed when they were growing up. For all the hard work of Ms. Wu’s father and mother, however, they aren’t certain it will pay off. Their daughter is ambivalent about staying in school, where the tuition, room and board cost more than half her parents’ combined annual income. A slightly above-average student, she thinks of dropping out, finding a job and earning money.


“Every time my daughter calls home, she says, ‘I don’t want to continue this,’ ” Mrs. Cao said. “And I say, ‘You’ve got to keep studying to take care of us when we get old’, and she says, ‘That’s too much pressure, I don’t want to think about all that responsibility.’ ”


Ms. Wu dreams of working at a big company, but knows that many graduates end up jobless. “I think I may start my own small company,” she says, while acknowledging she doesn’t have the money or experience to run one.


For a rural parent in China, each year of higher education costs six to 15 months’ labor, and it is hard for children from poor families to get scholarships or other government financial support. A year at the average private university in the United States similarly equals almost a year’s income for the average wage earner, while an in-state public university costs about six months’ pay, but financial aid is generally easier to obtain than in China. Moreover, an American family that spends half its income helping a child through college has more spending power with the other half of its income than a rural Chinese family earning less than $5,000 a year.


It isn’t just the cost of college that burdens Chinese parents. They face many fees associated with sending their children to elementary, middle and high schools. Many parents also hire tutors, so their children can score high enough on entrance exams to get into college. American families that invest heavily in their children’s educations can fall back on Medicare, Social Security and other social programs in their old age. Chinese citizens who bet all of their savings on their children’s educations have far fewer options if their offspring are unable to find a job on graduation.


The experiences of Wu Caoying, whose family The New York Times has tracked for seven years, are a window into the expanding educational opportunities and the financial obstacles faced by families all over China.


Her parents’ sacrifices to educate their daughter explain how the country has managed to leap far ahead of the United States in producing college graduates over the last decade, with eight million Chinese now getting degrees annually from universities and community colleges.


But high education costs coincide with slower growth of the Chinese economy and surging unemployment among recent college graduates. Whether young people like Ms. Wu find jobs on graduation that allow them to earn a living, much less support their parents, could test China’s ability to maintain rapid economic growth and preserve political and social stability in the years ahead.


Leaving the Village


Read More..

'Blade Runner' Oscar Pistorius weeps as he faces murder charge









JOHANNESBURG, South Africa -- Olympic sprinter Oscar Pistorius, the double-amputee revered in South Africa for overcoming his disability to compete in the London Games last year, wept in court Friday as he faced a murder charge in connection with the fatal shooting of his girlfriend.

During the proceedings in Pretoria, Gerrie Nel, one of the National Prosecuting Authority’s most senior advocates, said he would argue the killing of model and law graduate Reeva Steenkamp was premeditated murder, the most serious category of offense under South African law.


Nel is known for prosecuting high-profile cases, including winning the conviction of former police chief and Interpol boss Jackie Selebi on corruption charges.


Pistorius, nicknamed the "Blade Runner" because of the carbon-fiber prosthetic legs he uses to compete, did not enter a formal plea and was remanded into custody at Brooklyn police station in Pretoria until Tuesday, when his bail application is to be heard.








Under South African law, a suspect charged with such a high-level offense would have to prove exceptional circumstances to be granted bail.


In a packed courtroom, members of Pistorius' family struggled to pass through a media scrum and to find seats. The hearing coincided with "Black Friday," a day when people were being urged to wear black to protest rapes and violence against women.


[Updated, 8:35 a.m. Feb. 15: The family and Pistorius' management company later issued a statement denying that the athlete had murdered his girlfriend, saying: "The alleged murder is disputed in the strongest possible terms."


Some details of Pistorius' argument and the state's case are expected Tuesday.]

The famed athlete's court appearance came as South African media reported that he shot Steenkamp, his girlfriend of several months, four times through a bathroom door.


Under South African law, a person who fatally shoots an intruder has to prove he or she had a reasonable fear that the intruder posed a real threat to his or her life.

South Africa has one of the highest rates of gun homicides in the world, with killings of women by intimate partners the leading cause of female homicide in the country. About 57% of female homicide victims were killed by their partners in 2009, according to a report last year by the Medical Research Council.


One-third of female homicides were committed by partners with a history of prior violence against their partners, according to the report.

Friends of Steenkamp and Pistorius mourned the incident on social media.

"Drained, confused, I just can't wrap my head around things," one of Pistorius’ close friends, Alex Pilakoutas, posted on Twitter.


Darren Fresco, who described himself as one of Steenkamp’s best friends said he was hoping to wake from a nightmare and hear her infectious laughter again.

"We were just goofing off the other day talking to each other in only the way that we could to each other. My heart is on the verge of exploding with the pain of such a sudden loss of one of my best friends," Fresco, who said he was one of the last people to exchange tweets with Steenkamp, posted on Facebook.

ALSO:

Oscar Pistorius remains in jail facing murder charge

Mexico finds fire-god figure at top of Pyramid of the Sun

Iranian general reportedly assassinated while traveling from Syria


robyn.dixon@latimes.com





Read More..

Fat Dad: Baking for Love

Fat Dad

Dawn Lerman writes about growing up with a fat dad.

My grandmother Beauty always told me that the way to a man’s heart was through his stomach, and by the look of pure delight on my dad’s face when he ate a piece of warm, homemade chocolate cake, or bit into a just-baked crispy cookie, I grew to believe this was true. I had no doubt that when the time came, and I liked a boy, that a batch of my gooey, rich, chocolatey brownies would cast him under a magic spell, and we would live happily ever.

But when Hank Thomas walked into Miss Seawall’s ninth grade algebra class on a rainy, September day and smiled at me with his amazing grin, long brown hair, big green eyes and Jimi Hendrix T-shirt, I was completely unprepared for the avalanche of emotions that invaded every fiber of my being. Shivers, a pounding heart, and heat overcame me when he asked if I knew the value of 1,000 to the 25th power. The only answer I could think of, as I fumbled over my words, was “love me, love me,” but I managed to blurt out “1E+75.” I wanted to come across as smart and aloof, but every time he looked at me, I started stuttering and sweating as my face turned bright red. No one had ever looked at me like that: as if he knew me, as if he knew how lost I was and how badly I needed to be loved.

Hank, who was a year older than me, was very popular and accomplished. Unlike other boys who were popular for their looks or athletic skills, Hank was smart and talented. He played piano and guitar, and composed the most beautiful classical and rock concertos that left both teachers and students in awe.

Unlike Hank, I had not quite come into my own yet. I was shy, had raggedy messy hair that I tied back into braids, and my clothes were far from stylish. My mother and sister had been on the road touring for the past year with the Broadway show “Annie.” My sister had been cast as a principal orphan, and I stayed home with my dad to attend high school. My dad was always busy with work and martini dinners that lasted late into the night. I spent most of my evenings at home alone baking and making care packages for my sister instead of coercing my parents to buy me the latest selection of Gloria Vanderbilt jeans — the rich colored bluejeans with the swan stitched on the back pocket that you had to lie on your bed to zip up. It was the icon of cool for the popular and pretty girls. I was neither, but Hank picked me to be his math partner anyway.

With every equation we solved, my love for Hank became more desperate. After several months of exchanging smiles, I decided to make Hank a batch of my chocolate brownies for Valentine’s Day — the brownies that my dad said were like his own personal nirvana. My dad named them “closet” brownies, because when I was a little girl and used to make them for the family, he said that as soon as he smelled them coming out of the oven, he could imagine dashing away with them into the closet and devouring the whole batch.

After debating for hours if I should make the brownies with walnuts or chips, or fill the centers with peanut butter or caramel, I got to work. I had made brownies hundreds of times before, but this time felt different. With each ingredient I carefully stirred into the bowl, my heart began beating harder. I felt like I was going to burst from excitement. Surely, after Hank tasted these, he would love me as much as I loved him. I was not just making him brownies. I was showing him who I was, and what mattered to me. After the brownies cooled, I sprinkled them with a touch of powdered sugar and wrapped them with foil and red tissue paper. The next day I placed them in Hank’s locker, with a note saying, “Call me.”

After seven excruciating days with no call, some smiles and the usual small talk in math class, I conjured up the nerve to ask Hank if he liked my brownies.

“The brownies were from you?” he asked. “They were delicious.”

Then Hank invited me to a party at his house the following weekend. Without hesitation, I responded that I would love to come. I pleaded with my friend Sarah to accompany me.

As the day grew closer, I made my grandmother Beauty’s homemade fudge — the chocolate fudge she made for Papa the night before he proposed to her. Stirring the milk, butter and sugar together eased my nerves. I had never been to a high school party before, and I didn’t know what to expect. Sarah advised me to ditch the braids as she styled my hair, used a violet eyeliner and lent me her favorite V-neck sweater and a pair of her best Gloria Vanderbilt jeans.

When we walked in the door, fudge in hand, Hank was nowhere to be found. Thinking I had made a mistake for coming and getting ready to leave, I felt a hand on my back. It was Hank’s. He hugged me and told me he was glad I finally arrived. When Hank put his arm around me, nothing else existed. With a little help from Cupid or the magic of Beauty’s recipes, I found love.


Fat Dad’s ‘Closet’ Brownies

These brownies are more like fudge than cake and contain a fraction of the flour found in traditional brownie recipes. My father called them “closet” brownies, because when he smelled them coming out of the oven he could imagine hiding in the closet to eat the whole batch. I baked them in the ninth grade for a boy that I had a crush on, and they were more effective than Cupid’s arrow at winning his heart.

6 tablespoons unsalted butter, plus extra for greasing the pan
8 ounces bittersweet chocolate, chopped, or semisweet chocolate chips
3/4 cup brown sugar
2 eggs at room temperature, beaten
1 teaspoon vanilla extract
1/4 cup flour
1/2 cup chopped walnuts (optional)
Fresh berries or powdered sugar for garnish (optional)

1. Preheat oven to 350 degrees.

2. Grease an 8-inch square baking dish.

3. In a double boiler, melt chocolate. Then add butter, melt and stir to blend. Remove from heat and pour into a mixing bowl. Stir in sugar, eggs and vanilla and mix well.

4. Add flour. Mix well until very smooth. Add chopped walnuts if desired. Pour batter into greased baking pan.

5. Bake for 35 minutes, or until set and barely firm in the middle. Allow to cool on a rack before removing from pan. Optional: garnish with powdered sugar, or berries, or both.

Yield: 16 brownies


Dawn Lerman is a New York-based health and nutrition consultant and founder of Magnificent Mommies, which provides school lectures, cooking classes and workshops. Her series on growing up with a fat father appears occasionally on Well.

Read More..

Robo-Signing Fraud Case Is Settled





The mortgage servicing company Lender Processing Services agreed to pay $35 million to resolve a federal criminal investigation into foreclosure fraud, the Justice Department said on Friday.


The settlement resolves allegations over the company’s involvement in what the government called a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage documents in property recorders’ offices nationwide from 2003 to 2009. The practice became known as robo-signing.


The accord also follows a guilty plea last November by Lorraine Brown, the former chief executive of the company’s now-closed DocX unit, to a felony charge of conspiracy to commit mail and wire fraud over the scheme.


Prior to DocX’s closure in 2010, Lender Processing Services had handled more than half of the nation’s foreclosures.


The company entered into a two-year non-prosecution agreement that requires it to meet many conditions, including cooperating in federal investigations, and alerting the government to any abuses in mortgage or foreclosure documentation services at the company.


The company said on Friday that it has a $223 million reserve that covers the Justice Department accord and prior settlements.


Foreclosure abuse became notorious in 2010 as borrowers, politicians and regulators accused lenders of pursuing cases that were based on defective or fraudulent documentation.


Many documents were found to have been signed systematically without being read.


Read More..

Former Bell official says he voted for pay raise out of fear









One of the former Bell city leaders accused of plundering the town's treasury by taking oversized salaries testified Thursday that the fat paychecks and other extraordinary benefits that came with the job were all but forced on him.


George Cole, a former steelworker, returned to the witness stand for a second day and testified that he voted for a 12% pay raise for a City Council board in 2008 only because he feared retribution from then-City Manager Robert Rizzo.


"He had shown himself to be very vindictive if you crossed him at that time," Cole said. "I was worried that if I didn't vote for this, if I voted against it, he would do whatever he could to destroy the work that was important to me and the community. I knew that was his character."





Cole said it was the most difficult decision he ever made while on the council but was in the best interest of Bell — a city, he said, where he had devoted decades to advocating for new schools and programs for at-risk youths and senior citizens.


Cole, along with Luis Artiga, Victor Bello, Oscar Hernandez, Teresa Jacobo and George Mirabal, is accused of drawing an inflated salary from boards and authorities that rarely met and did little work.


The pay increases for the authorities were placed on the consent calendar — a place for routine and non-controversial items that are voted on without discussion. Cole defended the practice and said the agendas, minutes and staff reports were always available to the public at City Hall and at the library.


"I never tried to hide what we were doing," Cole said.


He also testified that the minutes did not reflect work done for those authorities.


Cole justified his vote for previous City Council pay raises to allow for a more diverse pool of council candidates who could use the money. And when he voted for a council salary increase in 2005, Cole noted that Bell was in a "very strong financial position."


The 63-year-old also told jurors that when he discovered $15,500 had been deposited into a 401(k)-style account for him, he complained. Cole said Rizzo refused to remove the money.


Initially, Cole said, Rizzo was a first-rate city administrator, making improvements such as repairing and keeping streets clean and erecting a protective fence around the city's largest park.


"From the time he started, he was able to accomplish things other managers previous to him said couldn't be done or were unable to do," Cole said.


Cole said the two would sometimes meet for breakfast to discuss city matters. "It was business," he said. "It wasn't two chums getting together."


But when Cole decided to give up his salary during his last year in office, he said it fractured his relationship with Rizzo. When he learned about Rizzo's near-$800,000 salary from a story published in The Times in 2010, he said he felt sick.


"I just felt like the dumbest person in the world that this guy had just pulled one of the biggest cons I've ever seen on, not just me, but on the city of Bell," Cole testified.


Rizzo faces 69 felony corruption charges. He and his former assistant, Angela Spaccia, are expected to go on trial later this year.


Cole's top annual salary was $67,000, his attorney said. At the time, he was earning nearly $95,000 a year as chief executive of the Steelworkers Old Timers Foundation.


In 2004, the city paid the state pension system $36,648 to buy Cole an additional five years of service time. Cole was one of 11 Bell administrators for whom the city bought service time.


CalPERS — the state's largest public pension program — has disallowed the service time the city bought, saying the buy-ins were not council-approved and that a municipality cannot pay for them.


Cole also was among the 40 or so Bell employees who were scheduled to receive additional payments through Bell's own supplemental retirement plan, established in 2003. In combination with the CalPERS pension, the payout was among the best retirement plans for non-safety employees in the state. The council never approved the plan.


jeff.gottlieb@latimes.com


corina.knoll@latimes.com





Read More..

Doctor and Patient: Afraid to Speak Up to Medical Power

The slender, weather-beaten, elderly Polish immigrant had been diagnosed with lung cancer nearly a year earlier and was receiving chemotherapy as part of a clinical trial. I was a surgical consultant, called in to help control the fluid that kept accumulating in his lungs.

During one visit, he motioned for me to come closer. His voice was hoarse from a tumor that spread, and the constant hissing from his humidified oxygen mask meant I had to press my face nearly against his to understand his words.

“This is getting harder, doctor,” he rasped. “I’m not sure I’m up to anymore chemo.”

I was not the only doctor that he confided to. But what I quickly learned was that none of us was eager to broach the topic of stopping treatment with his primary cancer doctor.

That doctor was a rising superstar in the world of oncology, a brilliant physician-researcher who had helped discover treatments for other cancers and who had been recruited to lead our hospital’s then lackluster cancer center. Within a few months of the doctor’s arrival, the once sleepy department began offering a dazzling array of experimental drugs. Calls came in from outside doctors eager to send their patients in for treatment, and every patient who was seen was promptly enrolled in one of more than a dozen well-documented treatment protocols.

But now, no doctors felt comfortable suggesting anything but the most cutting-edge, aggressive treatments.

Even the No. 2 doctor in the cancer center, Robin to the chief’s cancer-battling Batman, was momentarily taken aback when I suggested we reconsider the patient’s chemotherapy plan. “I don’t want to tell him,” he said, eyes widening. He reeled off his chief’s vast accomplishments. “I mean, who am I to tell him what to do?”

We stood for a moment in silence before he pointed his index finger at me. “You tell him,” he said with a smile. “You tell him to consider stopping treatment.”

Memories of this conversation came flooding back last week when I read an essay on the problems posed by hierarchies within the medical profession.

For several decades, medical educators and sociologists have documented the existence of hierarchies and an intense awareness of rank among doctors. The bulk of studies have focused on medical education, a process often likened to military and religious training, with elder patriarchs imposing the hair shirt of shame on acolytes unable to incorporate a profession’s accepted values and behaviors. Aspiring doctors quickly learn whose opinions, experiences and voices count, and it is rarely their own. Ask a group of interns who’ve been on the wards for but a week, and they will quickly raise their hands up to the level of their heads to indicate their teachers’ status and importance, then lower them toward their feet to demonstrate their own.

It turns out that this keen awareness of ranking is not limited to students and interns. Other research has shown that fully trained physicians are acutely aware of a tacit professional hierarchy based on specialties, like primary care versus neurosurgery, or even on diseases different specialists might treat, like hemorrhoids and constipation versus heart attacks and certain cancers.

But while such professional preoccupation with privilege can make for interesting sociological fodder, the real issue, warns the author of a courageous essay published recently in The New England Journal of Medicine, is that such an overly developed sense of hierarchy comes at an unacceptable price: good patient care.

Dr. Ranjana Srivastava, a medical oncologist at the Monash Medical Centre in Melbourne, Australia, recalls a patient she helped to care for who died after an operation. Before the surgery, Dr. Srivastava had been hesitant to voice her concerns, assuming that the patient’s surgeon must be “unequivocally right, unassailable, or simply not worth antagonizing.” When she confesses her earlier uncertainty to the surgeon after the patient’s death, Dr. Srivastava learns that the surgeon had been just as loath to question her expertise and had assumed that her silence before the surgery meant she agreed with his plan to operate.

“Each of us was trying our best to help a patient, but we were also respecting the boundaries and hierarchy imposed by our professional culture,” Dr. Srivastava said. “The tragedy was that the patient died, when speaking up would have made all the difference.”

Compounding the problem is an increasing sense of self-doubt among many doctors. With rapid advances in treatment, there is often no single correct “answer” for a patient’s problem, and doctors, struggling to stay up-to-date in their own particular specialty niches, are more tentative about making suggestions that cross over to other doctors’ “turf.” Even as some clinicians attempt to compensate by organizing multidisciplinary meetings, inviting doctors from all specialties to discuss a patient’s therapeutic options, “there will inevitably be a hierarchy at those meetings of who is speaking,” Dr. Srivastava noted. “And it won’t always be the ones who know the most about the patient who will be taking the lead.”

It is the potentially disastrous repercussions for patients that make this overly developed awareness of rank and boundaries a critical issue in medicine. Recent efforts to raise safety standards and improve patient care have shown that teams are a critical ingredient for success. But simply organizing multidisciplinary lineups of clinicians isn’t enough. What is required are teams that recognize the importance of all voices and encourage active and open debate.

Since their patient’s death, Dr. Srivastava and the surgeon have worked together to discuss patient cases, articulate questions and describe their own uncertainties to each other and in patients’ notes. “We have tried to remain cognizant of the fact that we are susceptible to thinking about hierarchy,” Dr. Srivastava said. “We have tried to remember that sometimes, despite our best intentions, we do not speak up for our patients because we are fearful of the consequences.”

That was certainly true for my lung cancer patient. Like all the other doctors involved in his care, I hesitated to talk to the chief medical oncologist. I questioned my own credentials, my lack of expertise in this particular area of oncology and even my own clinical judgment. When the patient appeared to fare better, requiring less oxygen and joking and laughing more than I had ever seen in the past, I took his improvement to be yet another sign that my attempt to talk about holding back chemotherapy was surely some surgical folly.

But a couple of days later, the humidified oxygen mask came back on. And not long after that, the patient again asked for me to come close.

This time he said: “I’m tired. I want to stop the chemo.”

Just before he died, a little over a week later, he was off all treatment except for what might make him comfortable. He thanked me and the other doctors for our care, but really, we should have thanked him and apologized. Because he had pushed us out of our comfortable, well-delineated professional zones. He had prodded us to talk to one another. And he showed us how to work as a team in order to do, at last, what we should have done weeks earlier.

Read More..

DealBook: Confidence on Upswing, Mergers Make Comeback

The mega-merger is back.

For the corporate takeover business, the last half-decade was a fallow period. Wall Street deal makers and chief executives, brought low by the global financial crisis, lacked the confidence to strike the audacious multibillion-dollar acquisitions that had defined previous market booms.

Cycles, however, turn, and in the opening weeks of 2013, merger activity has suddenly roared back to life. On Thursday, Berkshire Hathaway, the conglomerate run by Warren E. Buffett, said it had teamed up with Brazilian investors to buy the ketchup maker H. J. Heinz for about $23 billion. And American Airlines and US Airways agreed to merge in a deal valued at $11 billion.

Those transactions come a week after a planned $24 billion buyout of the computer company Dell by its founder, Michael S. Dell, and private equity backers. And Liberty Global, the company controlled by the billionaire media magnate John C. Malone, struck a $16 billion deal to buy the British cable business Virgin Media.

“Since the crisis, one by one, the stars came into alignment, and it was only a matter of time before you had a week like we just had,” said James B. Lee Jr., the vice chairman of JPMorgan Chase.

Still, bankers and lawyers remain circumspect, warning that it is still too early to declare a mergers-and-acquisitions boom like those during the junk bond craze of 1989, the dot-com bubble of 1999 and the leveraged buyout bonanza of 2007. They also say that it is important to pay heed to the excesses that developed during these moments of merger mania, which all ended badly.

A confluence of factors has driven the recent deals. Most visibly, the stock market has been on a tear, with the Standard & Poor’s 500-stock index this week briefly hitting its highest levels since November 2007. Higher share prices have buoyed the confidence of chief executives, who now, instead of retrenching, are looking for ways to expand their businesses.

A number of clouds that hovered over the markets last year have also been removed, eliminating the uncertainty that hampered deal making. Mergers and acquisitions activity in 2012 remained tepid as companies took a wait-and-see approach over the outcome of the presidential election and negotiations over the fiscal cliff. The problems in Europe, which began in earnest in 2011, shut down a lot of potential transactions, but the region has since stabilized.

“When we talk to our corporate clients as well as the bankers, we keep hearing them talk about increased confidence,” said John A. Bick, a partner at the law firm Davis Polk & Wardwell, who advised Heinz on its acquisition by Mr. Buffett and his partners.

Mr. Bick said that mega-mergers had a psychological component, meaning that once transactions start happening, chief executives do not want to be left behind. “In the same way that success breeds success, deals breed more deals,” he said.

A central reason for the return of big transactions is the mountain of cash on corporate balance sheets. After the financial crisis, companies hunkered down, laying off employees and cutting costs. As a result, they generated savings. Today, corporations in the S.& P. 500 are sitting on more than $1 trillion in cash. With interest rates near zero, that money is earning very little in bank accounts, so executives are looking to put it to work by acquiring businesses.

The private equity deal-making machine is also revving up again. The world’s largest buyout firms have hundreds of billions of dollars of “dry powder” — money allotted to deals in Wall Street parlance — and they are on the hunt. The proposed leveraged buyout of Dell, led by Mr. Dell and the investment firm Silver Lake Partners, was the largest private equity transaction since July 2007, when the Blackstone Group acquired the hotel chain Hilton Worldwide for $26 billion just as the credit markets were seizing up.

But perhaps the single biggest factor driving the return of corporate takeovers is the banking system’s renewed health. Corporations often rely on bank loans for financing acquisitions, and the ability of private equity firms to strike multibillion-dollar transactions depends on the willingness of banks to lend them money.

For years, banks, saddled by the toxic mortgage assets weighing on their balance sheets, turned off the lending spigot. But with the housing crisis in the rearview mirror and economic conditions slowly improving, banks are again lining up to provide corporate loans at record-low interest rates to finance acquisitions.

The banks, of course, are major beneficiaries of megadeals, earning big fees from both advising on the transactions and lending money to finance them. Mergers and acquisitions in the United States total $158.7 billion so far this year, according to Thomson Reuters data, more than double the amount in the same period last year. JPMorgan, for example, has benefited from the surge, advising on four big deals in recent weeks, including the Dell bid and Comcast’s $16.7 billion offer for the rest of NBCUniversal that it did not already own.

Mr. Buffett, in a television interview last month, declared that the banks had repaired their businesses and no longer posed a threat to the economy. “The capital ratios are huge, the excesses on the asset aside have been largely cleared out,” said Mr. Buffett, whose acquisition of Heinz will be his second-largest acquisition, behind his $35.9 billion purchase of a majority stake in the railroad company Burlington Northern Santa Fe in 2009.

While Wall Street has an air of giddiness over the year’s start, most deal makers temper their comments about the current environment with warnings about undisciplined behavior like overpaying for deals and borrowing too much to pay for them.

Though private equity firms were battered by the financial crisis, they made it through the downturn on relatively solid ground. Many of their megadeals, like Hilton, looked destined for bankruptcy after the markets collapsed, but they have since recovered. The deals have benefited from an improving economy, as well as robust lending markets that allowed companies to push back the large amounts of debt that were to have come due in the next few years.

But there are still plenty of cautionary tales about the consequences of overpriced, overleveraged takeovers. Consider Energy Future Holdings, the biggest private equity deal in history. Struck at the peak of the merger boom in October 2007, the company has suffered from low natural gas prices and too much debt, and could be forced to restructure this year. Its owners, a group led by Kohlberg Kravis Roberts and TPG, are likely to lose billions.

Even Mr. Buffett made a mistake on Energy Future Holdings, having invested $2 billion in the company’s bonds. He admitted to shareholders last year that the investment was a blunder and would most likely be wiped out.

“In tennis parlance,” Mr. Buffett wrote, “this was a major unforced error.”

Michael J. de la Merced contributed reporting.

Read More..

Federal appeals court weighs overturning Barry Bonds' conviction









SAN FRANCISCO —A federal appeals court wrestled Wednesday with whether to overturn slugger Barry Bonds' felony conviction for obstruction of justice.


The three-judge panel of the U.S. 9th Circuit Court of Appeals weighed whether Bonds broke the law by being evasive in a 52-word answer he gave a federal grand jury in 2003. The grand jury was investigating illegal distribution of performance-enhancing drugs.


Bonds was asked in the grand jury session whether his personal trainer had ever given him a substance that required a syringe to inject. In his response, Bonds rambled on about his childhood and his friendship with the trainer before finally telling the grand jury that he had not received an injectable substance.





The grand jury eventually indicted Bonds, and he was tried in 2011 on three counts of perjury and one count of obstruction. The trial jury convicted him of obstruction of justice, based on that meandering answer, but it deadlocked on the perjury charges.


How the three-judge panel was leaning after Wednesday's hearing was nearly as difficult to parse as Bonds' answer. Judge Michael Daly Hawkins appeared troubled by the fact that Bonds eventually answered the grand jury query: "Can a grand jury witness obstruct justice by giving a series of evasive answers and then giving a direct answer that is not evasive?" Hawkins asked.


Assistant U.S. Atty. Merry Jean Chan, however, said Bond's rambling response was intended to deceive. She argued that the obstruction conviction was not limited to those 52 words but reflected evasion throughout Bonds' testimony.


Hawkins then questioned why prosecutors, if they thought Bonds was being evasive, did not go before a judge to ask that Bonds be ordered to answer the grand jury's questions.


Dennis Riordan, an attorney for Bonds, told the court that the grand jury was not troubled by the 52-word passage that led to the trial jury's conviction years later.


"There is one thing we know for sure," Riordan said. "This grand jury did not consider those 52 words were criminal activity.... That is a dagger in the heart of this conviction."


Chan countered that Bonds' testimony was "littered with multiple examples" of misleading testimony.


Bonds' conviction came at the end of a 12-day trial. He was sentenced to two years probation, 250 hours of community service, a $4,000 fine and a month of monitored home confinement, all of which have been put on hold pending his appeal.


The 9th Circuit panel, which included Judges Mary Schroeder and Mary Murguia, did not indicate when it might rule.


maura.dolan@latimes.com





Read More..

Well: Straining to Hear and Fend Off Dementia

At a party the other night, a fund-raiser for a literary magazine, I found myself in conversation with a well-known author whose work I greatly admire. I use the term “conversation” loosely. I couldn’t hear a word he said. But worse, the effort I was making to hear was using up so much brain power that I completely forgot the titles of his books.

A senior moment? Maybe. (I’m 65.) But for me, it’s complicated by the fact that I have severe hearing loss, only somewhat eased by a hearing aid and cochlear implant.

Dr. Frank Lin, an otolaryngologist and epidemiologist at Johns Hopkins School of Medicine, describes this phenomenon as “cognitive load.” Cognitive overload is the way it feels. Essentially, the brain is so preoccupied with translating the sounds into words that it seems to have no processing power left to search through the storerooms of memory for a response.


Katherine Bouton speaks about her own experience with hearing loss.


A transcript of this interview can be found here.


Over the past few years, Dr. Lin has delivered unwelcome news to those of us with hearing loss. His work looks “at the interface of hearing loss, gerontology and public health,” as he writes on his Web site. The most significant issue is the relation between hearing loss and dementia.

In a 2011 paper in The Archives of Neurology, Dr. Lin and colleagues found a strong association between the two. The researchers looked at 639 subjects, ranging in age at the beginning of the study from 36 to 90 (with the majority between 60 and 80). The subjects were part of the Baltimore Longitudinal Study of Aging. None had cognitive impairment at the beginning of the study, which followed subjects for 18 years; some had hearing loss.

“Compared to individuals with normal hearing, those individuals with a mild, moderate, and severe hearing loss, respectively, had a 2-, 3- and 5-fold increased risk of developing dementia over the course of the study,” Dr. Lin wrote in an e-mail summarizing the results. The worse the hearing loss, the greater the risk of developing dementia. The correlation remained true even when age, diabetes and hypertension — other conditions associated with dementia — were ruled out.

In an interview, Dr. Lin discussed some possible explanations for the association. The first is social isolation, which may come with hearing loss, a known risk factor for dementia. Another possibility is cognitive load, and a third is some pathological process that causes both hearing loss and dementia.

In a study last month, Dr. Lin and colleagues looked at 1,984 older adults beginning in 1997-8, again using a well-established database. Their findings reinforced those of the 2011 study, but also found that those with hearing loss had a “30 to 40 percent faster rate of loss of thinking and memory abilities” over a six-year period compared with people with normal hearing. Again, the worse the hearing loss, the worse the rate of cognitive decline.

Both studies also found, somewhat surprisingly, that hearing aids were “not significantly associated with lower risk” for cognitive impairment. But self-reporting of hearing-aid use is unreliable, and Dr. Lin’s next study will focus specifically on the way hearing aids are used: for how long, how frequently, how well they have been fitted, what kind of counseling the user received, what other technologies they used to supplement hearing-aid use.

What about the notion of a common pathological process? In a recent paper in the journal Neurology, John Gallacher and colleagues at Cardiff University suggested the possibility of a genetic or environmental factor that could be causing both hearing loss and dementia — and perhaps not in that order. In a phenomenon called reverse causation, a degenerative pathology that leads to early dementia might prove to be a cause of hearing loss.

The work of John T. Cacioppo, director of the Social Neuroscience Laboratory at the University of Chicago, also offers a clue to a pathological link. His multidisciplinary studies on isolation have shown that perceived isolation, or loneliness, is “a more important predictor of a variety of adverse health outcomes than is objective social isolation.” Those with hearing loss, who may sit through a dinner party and not hear a word, frequently experience perceived isolation.

Other research, including the Framingham Heart Study, has found an association between hearing loss and another unexpected condition: cardiovascular disease. Again, the evidence suggests a common pathological cause. Dr. David R. Friedland, a professor of otolaryngology at the Medical College of Wisconsin in Milwaukee, hypothesized in a 2009 paper delivered at a conference that low-frequency loss could be an early indication that a patient has vascular problems: the inner ear is “so sensitive to blood flow” that any vascular abnormalities “could be noted earlier here than in other parts of the body.”

A common pathological cause might help explain why hearing aids do not seem to reduce the risk of dementia. But those of us with hearing loss hope that is not the case; common sense suggests that if you don’t have to work so hard to hear, you have greater cognitive power to listen and understand — and remember. And the sense of perceived isolation, another risk for dementia, is reduced.

A critical factor may be the way hearing aids are used. A user must practice to maximize their effectiveness and they may need reprogramming by an audiologist. Additional assistive technologies like looping and FM systems may also be required. And people with progressive hearing loss may need new aids every few years.

Increasingly, people buy hearing aids online or from big-box stores like Costco, making it hard for the user to follow up. In the first year I had hearing aids, I saw my audiologist initially every two weeks for reprocessing and then every three months.

In one study, Dr. Lin and his colleague Wade Chien found that only one in seven adults who could benefit from hearing aids used them. One deterrent is cost ($2,000 to $6,000 per ear), seldom covered by insurance. Another is the stigma of old age.

Hearing loss is a natural part of aging. But for most people with hearing loss, according to the National Institute on Deafness and Other Communication Disorders, the condition begins long before they get old. Almost two-thirds of men with hearing loss began to lose their hearing before age 44. My hearing loss began when I was 30.

Forty-eight million Americans suffer from some degree of hearing loss. If it can be proved in a clinical trial that hearing aids help delay or offset dementia, the benefits would be immeasurable.

“Could we do something to reduce cognitive decline and delay the onset of dementia?” he asked. “It’s hugely important, because by 2050, 1 in 30 Americans will have dementia.

“If we could delay the onset by even one year, the prevalence of dementia drops by 15 percent down the road. You’re talking about billions of dollars in health care savings.”

Should studies establish definitively that correcting hearing loss decreases the potential for early-onset dementia, we might finally overcome the stigma of hearing loss. Get your hearing tested, get it corrected, and enjoy a longer cognitively active life. Establishing the dangers of uncorrected hearing might even convince private insurers and Medicare that covering the cost of hearing aids is a small price to pay to offset the cost of dementia.


Katherine Bouton is the author of the new book, “Shouting Won’t Help: Why I — and 50 Million Other Americans — Can’t Hear You,” from which this essay is adapted.


This post has been revised to reflect the following correction:

Correction: February 14, 2013

An article on Tuesday about hearing loss and dementia misidentified the city in which the Medical College of Wisconsin is located. It is in Milwaukee, not in Madison.

Read More..

Japanese Economy Contracts and Remains in Recession





TOKYO (AP) — Japan’s economy remained mired in recession late last year, shrinking 0.4 percent in annualized terms for the third straight quarter of contraction on feeble demand at home and overseas.


The government reported Thursday that growth for all of 2012 was 1.9 percent, after a 0.6 percent contraction in 2011 and a 4.7 percent increase in 2010 and a 5.5 percent contraction in 2009.


The figures were worse than expected, as many analysts had forecast the economy may have emerged from recession late last year as the Japanese yen weakened against other major currencies, giving a boost to Japanese export manufacturers.


Prime Minister Shinzo Abe, who took office in late December, is championing aggressive spending and monetary stimulus to help get growth back on track. He has lobbied the central bank to set an inflation target of 2 percent, aimed at breaking out of Japan’s long bout of deflation, or falling prices, that he says are inhibiting corporate investment and growth.


But the Bank of Japan was not expected to announce any major new initiatives from a policy meeting on Thursday. The current central bank governor, Masaaki Shirakawa, is due to leave office on March 19, and Mr. Abe is expected to appoint as his successor an expert who favors his more activist approach to monetary policy.


Last year began on an upbeat note with annual growth in the first quarter at 6 percent as strong government spending on reconstruction from the March 2011 tsunami disaster helped spur demand. But the economy contracted in the second quarter and deteriorated further as frictions with China over a territorial dispute hurt exports to one of Japan’s largest overseas markets.


Despite the dismal data for last year, many in Japan expect at least a temporary bump to growth from higher government spending on public works and other programs. An index measuring consumer confidence, released this week, jumped to its highest level since 2007, the biggest increase in a single month.


Read More..