Saturday, March 21, 2009

Palm Pre- Is this a new beginning or the end of Palm? FROM BARRONS

Interesting Article from Barrons-

Palm: Waiting For Opening Day
from Tech Trader Daily - Barron's Online by Eric Savitz

For investors in Palm (PALM), the company is now in a sort of spring training period - what matters is getting ready for opening day. No one really cares if the Yankees have the best record in in the Grapefruit League; and likewise, the Street has decided to simply ignore the absolutely nightmarish numbers Palm posted for the February quarter. Palm has one more free pass ahead; May’s report will be even nastier still, and investor won’t care unless there is an acceleration in cash burn. Palm is a company that, by design, is going down in flames, with every hope of rising Phoenix-like from the ashes.

Whether or not you believe in the stock here simply boils down to how you feel about the upcoming launch of the Palm Pre. If you think the Pre is a winner, and that the company has enough cash to see it through, you buy the stock. If you think the new handset might be late or disappoint, they you want to short it. There’s basically no intermediate position. It’s a two-outcome stocks: agony and ecstasy.

I will dispense with the usual post-earnings analyst rundown I might normally do, and instead sum up the current key debate points:

* The Palm Pre is expected to ship before the end of June; some analysts think it happen before the end of the May quarter, but most figure it will be later than that.
* The company insists that it now has enough cash to carry it through the launch; but if the Pre is at all late, it could be an issue. The company is burning close to $100 million a quarter, and now has a little over $300 million in the bank including the proceeds of a recent stock offering.
* The bulls think the Pre is a revolutionary device that will lure away iPhone and BlackBery users…
* …But the bears contends that there is so much competition in the smartphone space that the company will have trouble getting traction.
* The bulls also think there is a chance the company could end up getting acquired.

Price targets on the stock range from the low double-digits down to zero. It’s all or nothing.

PALM today is up 23 cents, or 3%, to $7.94.

Monday, March 16, 2009

Seattle Paper Goes Online Only

Seattle P-I Goes Online-Only Tomorrow
Peggy Watt, PC World
Mar 16, 2009 12:10 pm

Seattle's oldest newspaper is committing to cyberspace with an online only operation, announcing today that it will cease its print edition with the March 17 edition and become the first U.S. metro daily to switch to an online-only publication.

The Seattle Post-Intelligencer, known as the P-I, already operates a lively online edition that encompasses dozens of reader blogs as well as some written by the newspaper's columnists and editors. It has explored enhanced coverage online with multimedia and forums for years. Its metamorphosis to online-only is an experiment by owner Hearst Corporation, which in January announced that the P-I was losing money and was up for sale.

This leaves Seattle with the daily Seattle Times, which was in a joint operating agreement with the P-I, sharing business and advertising operations.

It's tough times for newspapers, which are seeing advertising revenue fall during a slow economy after experiencing new competition from online information outlets, most of which publish for free. However, many bloggers in particular rely heavily on the original reporting produced by traditional news outlets such as newspapers. In late February, the 149-year-old Rocky Mountain News published its last edition, and is not continuing its online operation. Hearst has also warned that its flagship San Francisco Chronicle also risks closure.

Hearst and other news organizations have been exploring other options in new technology, such as its recent work on a digital paper reader.

(More to come, after I catch up with some friends and colleagues in the P-I newsroom and around the Northwest.)

Cramer On How to Manipulate the Markets Using CNBC

Cramer On How to Manipulate the Markets Using CNBC

Jim Cramer’s 2006 interview on is now the stuff of legend thanks to John Stewart. But the most amazing aspect of the interview is something that didn’t come up in the course of Stewart ripping Cramer a new one:

Cramer advocated using the scrutiny-free airtime CNBC provided to manipulate the market.

Check out the transcript below. For context: Cramer’s recapping how to artificially drive down the shares of BlackBerry producer Research in Motion.

CRAMER: Who cares about the fundamentals? Research in Motion just blew out the quarter. But look what people can do. That’s the fabulous thing. The great thing about the market is that it’s got nothing to do with the actual stocks. Maybe two weeks from now the buyers will come to their senses and realize that everything they heard was a lie. But then again Fannie Mae lied about their earnings for $6 billion. It’s just fiction and fiction and fiction. And I think it’s important for people to recognize that the way the market really works is to have that nexus of: Hit the brokerage houses with a series of orders that can push it down. Then leak it to the press. And then get it on CNBC — that’s also very important. And then you have kind of a vicious cycle down. And it’s a pretty good game. It can be played for a percent or two.

OTHER DUDE: And then you go long before Mac World?

CRAMER: You drove it down, you certainly have to use the other side.

Why doesn't the UK have a Michelle Obama?

From The Sunday Times
March 15, 2009

Why doesn't the UK have a Michelle Obama?

Not since Jackie Kennedy has the White House had a style icon in residence. As Michelle Obama slips into the role of political pin-up, with designers fawning at her feet, Lesley White asks why No 10 can’t produce its own first lady of fashion
First Lady Michelle Obama during the Midatlantic Regional Inaugural Ball at the Washington Convention Center in Washington, DC, January 20, 2009.

They say that politics is show business for the ugly, but sometimes it’s just plain showbiz. When Michelle Obama appeared on the cover of the March issue of American Vogue, sleek as oiled mink in her magenta Jason Wu dress, the first lady was defying one of fashion’s most stubborn stereotypes. The publishing industry’s unofficial position when challenged on why more ethnic models don’t make the covers has been that black women don’t sell glossy magazines. Naomi Campbell and Iman were cover stars in their day, of course, but in general, café au lait is as dusky as the handmaidens of high fashion get, with the Sudanese model Alek Wek the ebony-skinned exception. And it is not simply tradition that shot Michelle onto the coveted front page — after Hillary Clinton, she is only the second presidential wife to be accorded the honour. It is more that fashion is minded to crown its new saviour. It owes her. Or at least it hopes it will.

In January, The New York Times ran a story entitled US Fashion’s One-Woman Bailout? Not to put the woman under pressure, but it seems she is an integral part of her husband’s $800 billion economic rescue mission. So far she has appeared in a tasteful array of outfits: charming in a floral Thakoon Panichgul dress when Barack won the Democratic nomination, dazzling on election night in Narciso Rodriguez’s red-and-black ombré dress, resplendent at the swearing-in in Isabel Toledo’s “cloth of gold” dress and coat. Then there were the 10 inaugural balls, starring Jason Wu’s sparkling ivory one-shoulder gown.

Washington’s new star is both fêted and burdened, a one-woman stimulus package to get a nation spending again. “There’s no doubt that a style-icon first lady sells clothes,” says Averyl Oates, director of buying at Harvey Nichols. “Look at Jackie Onassis and Princess Diana. The confidence and affirmation of a woman in power wearing a designer can catapult them to stardom.” In short, Michelle is her countrywomen’s commander-in-shift, of whom the expectations are vast.

And her remit goes further. With every picture she’s putting middle-aged women on the fashion map. And black women on the glamour spreads. And mothers in a new sassy spotlight. Oh, and curtailing anorexia in the process: each time she beams from a glossy, the broader broad wins the day. Last year, for the second time, Mrs O made Vanity Fair’s International Best Dressed List, an accolade that might have had more to do with cultivating friends in high places than her genius with accessories. But who cares when the cash tills are ringing? Her outfits, when available, have sold out. She is also careful to dress herself and her daughters from the American classic outfitters Gap and J Crew — nobody wants to looks snooty around the new Camelot. After the family sported bits and bobs from J Crew over the inaugural weekend, the company’s shares rose 11%. Nobody loves telling the world how much (or little) their dresses cost more than the canny recessionista Michelle.

But does this practical, outspoken lawyer, who was educated at Harvard and marched for racial equality, want to be the new Jackie Kennedy, adored for her darling dresses? While the fashion press twitter on about frocks, she talks of having a “platform”, by which (to the chagrin of Christian Louboutin) she doesn’t mean an elevated sole, but a place from which to address the nation about what matters to her. Most relevant in depressed times, perhaps, is her championing of the national volunteering programme Renew America Together. Her approach to the job is a sleeves-rolled-up realism, with straight talk about family values and social justice, far closer to home than the apolitical causes embraced by most high-profile wives, more Eleanor Roosevelt mothering the nation through austerity than Princess Di adorned with posh frocks and needy babies.

In our brief love affair with Michelle O she has taken the trouble to wear nice clothes, but she hasn’t looked particularly enthralled by them. Actually, I suspect her of being a fashion fraud — pretending to care about it more than she really does. This is a working woman, pleasant-looking but not the great “beauty” mythologised by her fawning commentariat, a polished power dresser with stroppy hair and hips who, before her bizarre rocketing into the celebosphere, wouldn’t have given her fashion-ambassador potential a second thought (or even a first one).

But Michelle is wise to play the game. The first black woman to rule the White House needs to make a visual impact, to seduce and appeal to those (Republicans, Obama-sceptics, Hillary fans) who never wanted her there. Her Democrat predecessor Hillary Clinton looked trapped by those matching coats and dresses: her lightning-quick change into black trouser suits when she left the White House seemed even more of a blissful relief to her than getting her own political career. She didn’t find a place in the great American heart, which is where Michelle needs to be. “Lemongrass is the new black,” proclaimed the fashionistas after she chose the colour for a state occasion. You can imagine her silent groan as the prospect of, possibly, eight years of obsessive interest in her life and leggings hit her, but she knows what is required.

At 45, Michelle Obama is the most striking first lady since Jackie Kennedy. She’s not the youngest (Hillary Clinton was also 45 when she got the job), but it feels as if she is.

Since Jackie’s departure nearly 50 years ago, there’s been a style interregnum peopled by women with neocon dress sense, stymied when they did make an effort by their thick ankles and weight-bearing hips, but mostly by the all-too-obvious fact that they found fashion trivial (Hillary) or for a younger generation (Barbara Bush). Fragrant Laura did better than her frumpy mother-in-law: chided by her daughters for her “helmet hair”, she moved from half-hearted “clothes”

in her first term to “fashion” in her second, but she pioneered no new looks and her low-key makeover seemed more dutiful than fun.

The exception to the mumsy procession of presidential wives was Nancy Reagan. She was 59 when she arrived in the White House but obsessed with fashion, greedy for its made-to-measure freebies, her extensive borrowing putting her in contravention of the Ethics in Government Act. Her defence was that she was promoting American fashion; but she needed couture more than the other way around. Her rake-thin Upper East Side look seemed a perfect embodiment of what Tom Wolfe called the “social x-rays”, ageing wives devouring girlish Oscar de la Renta dresses and minute portions of nothing much for lunch, teetering on candy-cane legs from charity dinners to Republican fundraisers. “Queen Nancy” was too stiff, too prissy-looking to inspire anyone but satirists of the “greed is good” bonanza championed by Ronnie.

Mrs Obama is more than a breath of fresh air: she will be a reason to stay cheerful as cynicism about her husband’s foreign policy inevitably creeps in. While Barack seeks to persuade that he is ushering in a new America — idealistic, young, modern — there is his wife helpfully looking all of those things in her emerald silk dress as the couple honoured Stevie Wonder recently. Her appearance won more column inches than her husband’s warning about the national debt. The more the media adores Michelle, the longer Barack’s honeymoon period.

These are tough times for fashion. The high street is losing shops, and in the UK, as in Europe and the US, the luxury market is shrinking and predicted to contract here by up to 7% in 2009. Mulberry’s sales sank 12% in the 10 weeks to December 6; even venerable Hermès has admitted that sales growth will fall “below expectations”. Public clotheshorses can help. Across the Channel, Carla Bruni-Sarkozy is thought to have earned Dior $2m in free advertising and sales by enchanting the world when she visited England last spring in her princess-perfect dove-grey ensemble. When she stepped from the plane in her Jackie-esque pillbox we swooned; she was restrained, exuding an all-purpose savoir-faire. Comparisons have been struck with Diana, but the people’s princess was angular and beaky, her hair never quite right, while Carla is a professional fashion plate.

And what of our own first lady? Sarah Brown looked chic in her purple beret from New Look at the state opening of parliament, but I’m not sure it would have staved off suicides in the depressed millinery industry. Brown is an experienced PR executive who understands the value of image, but like most women over a size 10, she isn’t comfortable with relentless scrutiny of her body. At the Elle Style Awards she looked stumped when asked about her silk jersey dress by Ben de Lisi. “A great British designer for a showcase of British talent,” she managed, sounding more like a trade minister than a fashion fan.

In France, while proud of Carla’s elegance, gossipy commentators sniggered at her attempt to look like a demure wifelet for the British royal family: Bruni, the former man-eating rock chick? Who is she kidding? “She’s had so much work on that face,” meows a Paris fashion editor, “they’re calling her ‘la femme bionique’.” But then the French are thrilled that she beats other first ladies hands down. Doesn’t her treasure-trove of gifted or borrowed finery make her look out of touch with le peuple? Mais non! “She’s the first lady of the French republic. Chanel, Dior? whatever she wants she must be allowed to wear.”

What do we want from a leader’s wife? Glamour, fashion, va-va-voom? A sense that she understands the everyday concerns of the Primark shopper? Across the pond the standard to meet is Jackie Kennedy, a woman whose “response to life”, in the words of the historian Arthur M Schlesinger, “was aesthetic rather than intellectual or moralistic”. She was indifferent to politics, but her shell-pink Cassini gown nonetheless eased the path of a tense diplomacy in Vienna in 1961 by dazzling a reportedly beguiled Nikita Khrushchev. With Jackie the look was the story: where she vacationed, how she wallpapered the Oval Office, belted her trench coats, were all elevated into an ideal of American style. She was criticised by Pat Nixon for her overly Francophile love of Dior and Givenchy, which she promptly reined in, employing the former Hollywood designer Cassini to create her most spectacular gowns.

For designers, the chance to dress the leader’s wife is a God-given break.

Who had heard of the Thai-American designer Thakoon before he hit the Obama jackpot? The most bizarre reason I ever heard for hoping a political party wins a general election was in the 1980s; an upcoming British couturier was rhapsodising over Michael Heseltine’s elegant wife, Anne, and the “dream” of dressing her if she became chatelaine of No 10. Few first ladies have ever fitted the bill (or the bias-cut satin evening dress), of course, but the Chanel-gazelle Carla has the happy advantage of having modelled for a decade before alighting on another job that wins you lots of free clothes and the gasping appreciation of the masses.

Carla doesn’t make it easy for her global counterparts. Imagine the humiliation of being photographed next to her, of trying to fly the flag on one of those painful wives’ excursions, like kimono-folding for beginners (seriously), offered at the G8 summits, with Carla stealing the show.

Meanwhile, female politicians themselves are learning the value of looking the part. And the price of getting it wrong. When they swept to power on a tide of sensible red suits in 1997, I doubt if one Blair babe could have spelt — let alone owned a pair of heels by — Manolo Blahnik. And who would have expected them to? Their job was putting Tony’s “new dawn” into practice, not prancing around looking cutting-edge or sexy. Unlike the wives, these women are elected public servants, paid from the taxes of people struggling to afford a winter coat. How they look has been deemed unworthy of comment. Tessa Jowell always looks elegant (good cheekbones, rich husband); but Theresa May’s liking for leopard-print kitten heels became all there was to say about her. While Caroline Flint’s high boots and slit skirts just make her look as if she’s trying too hard, an effort rewarded with the 2007 prize for “second sexiest MP”. Ouch.

English politicas just aren’t that good at image, something that frustrates Alexandra Shulman, the editor of British Vogue. “You can’t get a politician into Vogue because there is a fear that being in fashion makes you frivolous,” she says. “In the US and France it’s more egalitarian; it’s fine for everyone to be interested in looking good.”

Sarkozy’s wife is not the only looker in his entourage. The sacking of Rachida Dati, the French justice minister, who has been promised a safe seat in the European parliament, was no surprise. Teetering back to work on stilettos just five days after giving birth didn’t look heroic, it looked odd and a bit desperate. The woman Sarkozy once called “ma beurette” (my little Arab girl) was too sultry for her own good, too close to the boss and his ex-wife Cécilia, for Carla’s comfort. Women in French political life have always sought to be well turned out (Simone de Beauvoir was the pin-up of Les Deux Magots, after all), but Dati went too far. Did the citizens of the fifth republic really want the minister charged with rationalising France’s archaic courts appearing in Paris Match in kinky boots to chat about her love of Dior and Chanel?

Dati has risen higher than any other French North African woman; her personal allure has no doubt helped, but her attention to image has equally undermined her credibility. After Dati was caught on camera filing her nails at a Paris city council meeting and a Socialist MP joked about her “unbearable lightness”, the pencil skirts and high heels that got her noticed seemed ready to bury her, the definitive fashion victim.

The job of first lady (of which she maybe once dreamt) might have suited her better: more top-class swanning, less boring work. In general, though, politicians don’t marry high-maintenance mannequins. If they are lucky enough to net a beauty, she does well — in England at least — to tread carefully. Michael Howard’s wife, Sandra, a former model, understood perfectly that beauty can unhelpfully divide a political wife from the voters she needs to like her. When she announced that her dress for the Conservatives’ 2004 winter ball was a £75 Monsoon number, the nation applauded. For the French it would have been an inexplicable dereliction of duty, for their couture houses a missed marketing opportunity. Had things turned out differently at the 2005 election, Sandra would have taken her low-key glamour with her to No 10 to powerful effect. Samantha Cameron is similarly clever about democratic dressing, always on-trend but also in touch. Though she sells ludicrously expensive leather goods as creative director of Smythson, she likes to be known as a champion of the high street, wearing French Connection, Reiss and Topshop. Should she be enthroned next year, we can count on Sam to look the part.

That, indeed, will be her strength; and though she is thought to have “strong views” on certain issues, one doesn’t imagine she will scare the civil servants with her hidden policy agenda.

Co-ordinating a wardrobe, paying attention to proportion and colour, matching your scarf to your husband’s tie, all takes time, thought and energy. Yes, stylists, hairdressers and make-up artists can be hired, but unless your heart is in it, it will eventually show.

The times are unkind to political frock horrors like Cherie Blair: who cared if Mary Wilson looked provincial, or if No 10’s first working wife, Audrey Callaghan, cared more about her work on London county council than hats? Just before the 1997 Labour landslide, when the tabloids had begun their Cherie-baiting, John and Norma Major were on a train flicking through the papers. “Well,” declared the gracious Norma, herself panned for wearing the same royal-blue suit too often (ie, twice). “I think she looks perfectly lovely in her jumpers.” Somehow I knew then that Cherie’s knitwear would be the sport of the nation for a decade; as it turned out, the least of the poor woman’s problems would be getting dressed.

When Sarah Brown was snapped on holiday in Suffolk last summer in a navy Jaeger shift and a baggy old cardi, English women didn’t recoil in horreur. We probably sympathised, felt a vague sense that she was one of us, an identification worth more votes than goggling at her perfection. When she stole the show at last year’s Labour conference, introducing her husband with wifely pride, her Graeme Black skirt and jumper didn’t look exactly chic, but they looked unassuming, down to earth. And her trooper-like canvassing at the by-election in Glenrothes last November would not have worked so well — or at all — in a high-gloss package.

The truth is, it’s different here. In France and the US, the first lady is a political force, her status exalted, her celebrity extreme, her influence in spreading the creed of globalisation or of patriotic fashion-shopping — depending on the economic cycle — not to be underestimated. Here she is increasingly assumed to be a role model, but nobody is clear for what. Samantha Cameron might be young and pretty enough to influence younger women’s fashion choices, to promote a charity or two, but what will her example inspire them to do with their lives? Work in fashion, be a yummy mummy, marry a rich man? Nothing wrong with any of that. But it is her husband’s colleagues, rather than his wife, who could really help raise the aspirations of a celebrity-obsessed generation of girls.

You can see the need for fashion figureheads in a recession; what’s new is the idea that they might come from the House of Commons, a refuge for the defiantly uncoiffed, where Ann Widdecombe and Gwyneth Dunwoody looked absolutely fine, and Betty Boothroyd was considered rather racy for her weekly wash-and-set.

To the English, glamorous public servants are an alien concept. Kate Moss might have resurrected the pixie boot; Princess Diana might have launched a thousand galleon wedding gowns; but did anyone ever aspire to looking like Caroline Spelman or Ruth Kelly, even after her makeover? And yet maybe fashion’s role models do need to sober up with the times: the lunatic spending of model celebs, Wags and former Spice Girls seems grotesque as pensions crumble. The “must-have” beaver-skin thigh boots? Oh, go away.

“If we want to raise a generation of young women who don’t just want to be Wags and pop stars,” says Alexandra Shulman, “we’ve got to give them some glamorous role models, women looking great while doing serious things in the world.” She’s right. How amazing it would be to see the women of Westminster looking all polished and sharp for once. And how quickly would we begin, with the ingrained resentment of our chippy old nation, accusing them of letting down the staid-but-steadfast reputation of British politics with the wayward frivolity of owning something half-decent to wear? Or of being corrupt because they had accepted a designer discount or two? Whatever Michelle and Carla might do for their nations with their patriotic dressing, we sadly can’t expect our first ladies or our politicians to save our fashion industry, or inspire British teenagers with their workaday glamour. For the foreseeable future, at least, we’ve made invisibility a far safer option.

Getty Trust to slash budget as investments tumble

Getty Trust to slash budget as investments tumble

Los Angeles Times

By Mike Boehm
March 16, 2009

The J. Paul Getty Trust, envied as the economic Goliath of the museum world, is slashing its operating budget nearly 25% for the coming fiscal year, an emergency response to investment losses that have totaled $1.5 billion since July and nearly $2 billion since mid-2007.

President James Wood said the financial stability of the Getty, the world's richest arts institution, could "fall off a huge cliff" if it delayed drastic cuts and hard times continued.

The Getty relies almost exclusively on investment earnings to cover expenses for its two Los Angeles art museums as well as the research, art conservation and grant-making operations that extend the trust's reach around the world.

Its portfolio dropped 25% during the last half of 2008, from $6 billion to $4.5 billion. That still dwarfs the $2.1-billion endowment of New York's Metropolitan Museum of Art, which announced plans Thursday to lay off 10% of its workforce, partly because of an endowment loss approaching 28%.

The reductions at the Getty should focus on operations that can easily expand again, Wood said Friday. Cuts may well be in store for temporary exhibitions, which have totaled more than 20 a year. The Getty may also defer buying new works for its collections of ancient art, European art from before the 20th century, illuminated manuscripts and photography.

Wood said the core operating budget for the fiscal year starting July 1 would be $216 million, compared with the current year's budget of $284 million.

The Getty's financial statements show that overall spending has reached as high as $339 million in recent years, when added costs such as interest on $627 million in construction and art acquisition bonds are factored in.

The Getty Trust was established as an operating foundation in 1976 with a $700-million bequest (the equivalent of $2.6 billion today) from oil magnate J. Paul Getty. Since then, it barely has lifted a fundraising finger while covering 93% or more of expenses with its portfolio's earnings.

Its diminished nest egg is now about where it stood in 2002, at the height of the last recession. Then, however, the trust was operating only one site, the hilltop Getty Center in Brentwood, where the Getty Museum is the attraction. In 2006, the renovated Getty Villa reopened near Malibu.

Together, the museums drew 1.6 million visitors in 2008. Admission is free, although parking costs $10.

Wood said the Getty's leaders and trustees would decide by the end of May what reductions to make. Although declining to specify possible cuts, he said that maintaining free admission was "a terribly important priority" because charging would be "a nasty socioeconomic curve" to throw to the less-affluent visitors the Getty aims to include.

Also, Wood said, he is against the wholesale lopping off of any of the trust's nonmuseum limbs -- the scholarship, conservation and grant programs that he said magnify the Getty's global influence in ways not available to other art institutions.

It would be a mistake "to simplistically say we're going to stop doing that" and just run the museums, he said during an interview in his sparsely furnished office, which commands a panoramic view of the city. "I don't think that would be the best thing for the Getty or Los Angeles, because it's one of the many things that makes L.A. a cosmopolitan, exciting place."

The Getty's biggest expense by far is the combination of salaries and benefits, which totaled $124.6 million in 2006-07, according to its most recent available federal tax return.

Wood said it was an "absolute priority" to keep staffers who have special expertise, including curators, researchers, art conservators and even the gardeners who tend the spectacular grounds at the Getty Center and the Villa. But in a December memo about the investment losses, he warned employees that staff cuts were coming.

In a separate interview, James Williams, the Getty's chief investment officer since 2002, said there was no plan to change the investment strategy the trust has pursued since the middle of this decade, betting heavily on "alternative investments" such as hedge funds, private partnerships, raw materials and "distressed" companies trying to emerge from Chapter 11 reorganization. Williams said the Getty's approach, which de-emphasizes holdings in publicly traded stocks and bonds, was safer because it allows greater investment diversity.

The strategy is known as the endowment model or the Yale model, in deference to the university that pioneered it in the 1980s, reaping huge returns and begetting many imitators among universities and other nonprofit institutions that could afford to invest huge sums over a long term.

Williams said that over the last year and a half, the Getty had tried to minimize what he considered the approach's two pitfalls: investing in ventures that are loaded with debt and tying up too much money in assets that are hard to sell quickly.

The human factor in this unhappy numbers game is apparent at, where nervous and sometimes angry Getty staffers have been venting anonymously since Feb. 21. "The frustration and fear was palpable" after a round of layoffs last spring, the blog's pseudonymous founder wrote then, and had intensified since December, when Wood issued his memo that further cuts were coming. Wood said Friday that the layoff of 47 workers then, plus the elimination of 77 vacant positions, wasn't done to save money but to "reallocate" resources after a yearlong examination of the trust's priorities.

Staffing now stands at 1,395 full-time and 101 part-time positions.

Wood said he empathized with the anxieties evident on the blog. "I'm anxious myself, to some degree, although we're on the right path, hard as it is." He said he was bothered by the blog's "innuendo that people don't dare ask questions or they would suffer for that. That is not the operation we run."

The blog has suggested alternatives to layoffs, including asking the 11 volunteer trustees to contribute money and cutting the pay of top executives.

Wood, at $1.11 million, and Williams, at $1.28 million, were last year's top earners, with seven others making from $397,000 to $906,000, according to documents posted on the Getty website in keeping with the trust's policy, adopted in the wake of a mid-decade scandal over improper spending, of being unusually open and detailed about its finances.

"Everything is on the table," Wood said of the blog's calls for lower executive salaries and a toll on board membership, but he added that the Getty's problem was too big to be solved by such "piecemeal" measures.

A respected art historian and museum director, Wood ran the Art Institute of Chicago from 1980 to 2004.

The Getty lured him out of retirement two years ago to bring a steadying hand to an institution that had been racked by back-to-back scandals.

In 2004 and 2005, morale sank as allegations surfaced about financial impropriety and cronyism under then-president Barry Munitz. Munitz was ousted early in 2006, and his departure was followed by extensive turnover on a board that had been widely seen as unresponsive and out of touch.

It wasn't until September 2007 that the Getty emerged from the second scandal -- its past acquisitions of looted antiquities -- by returning 40 objects to Italy.

In a prosecution that has moved forward at a sluggish pace, Marion True, the museum's former antiquities curator, remains charged by the Italian government with conspiring to acquire looted items.


The Shadow of Depression- Samuelson

March 16, 2009
The Shadow of Depression
By Robert Samuelson

WASHINGTON -- We live in the shadow of the Great Depression. Americans' gloom does not reflect just 8.1 percent unemployment or the loss of $13 trillion worth of housing and stock market value since mid-2007. There is also an amorphous anxiety that we are falling into a deep economic ravine from which escape will be difficult. These worries may prove ill-founded. But until they do, they promote pessimism and the hoarding of cash, by consumers and companies alike, that further weaken the economy.

Our only frame of reference for this sort of breakdown is the Great Depression. Superficially, the comparison seems absurd. We are a long way from the 1930s, as Christina Romer, head of President Obama's Council of Economic Advisers, noted recently in a useful talk. Unemployment peaked at 25 percent in 1933. At its low point, the economy (gross domestic product) was down 25 percent from its 1929 high. So far, U.S. GDP has dropped only about 2 percent.

What's more, the Depression changed our thinking and institutions. The human misery of economic turmoil has diminished. "American workers (in the 1930s) had painfully few of the social safety nets that today help families," Romer said. Until 1935, there was no federal unemployment insurance. At last count, there were 32 million food stamp recipients and 49 million on Medicaid. These programs didn't exist in the 1930s.

Government also responds more quickly to slumps. Despite many New Deal programs, "fiscal policy" -- in effect, deficit spending -- was used only modestly in the 1930s, Romer argued. Some of Franklin Roosevelt's extra spending was offset by a tax increase enacted in Herbert Hoover's last year. The federal deficit went from 4.5 percent of GDP in 1933 to 5.9 percent in 1934, not a huge increase.

Contrast that with the present. In fiscal 2009, the budget deficit is projected at 12.3 percent of GDP, up from 3.2 percent in 2008. Some of the increase reflects "automatic stabilizers" (in downturns, government spending increases and taxes decrease); the rest stems from the massive "stimulus program." On top of this, the Federal Reserve has cut its overnight interest rate to about zero and is lending directly in markets where private investors have retreated, including housing.

Government's aggressive actions should reinforce some of the economy's normal mechanisms for recovery. As pent-up demand builds, so will the pressure for more spending. The repayment of loans, lowering debt burdens, sets the stage for more spending. Ditto for the runoff of surplus inventories.

So, are Depression analogies far-fetched, needlessly alarmist? Probably -- but not inevitably. Even some Depression scholars, who once dismissed the possibility of a repetition, are less confident.

"Unfortunately, the similarities (between then and now) are growing more striking every day," says economic historian Barry Eichengreen of the University of California at Berkeley. "I never thought I'd say that in my lifetime." Argues economist Gary Richardson of UC Irvine: "This is the first business downturn since the 1930s that looks like the 1930s."

One parallel is that it's worldwide. In the 1930s, the gold standard transmitted the crisis from country to country. Governments raised interest rates to protect their gold reserves. Credit tightened, production and trade suffered, unemployment rose. Now, global investors and banks transmit the crisis. If they suffer losses in one country, they may sell stocks and bonds in other markets to raise cash. Or as they "deleverage" -- reduce their own borrowings -- they may curtail lending and investing in many countries.

The consequences are the same. In the fourth quarter of 2008, global industrial production fell at a 20 percent annual rate from the third quarter, says the World Bank. International trade may "register its largest decline in 80 years." Developing countries need to borrow at least $270 billion; if they can't, their economies will slow and that will hurt the advanced countries that export to them. It's a vicious circle.

Just as in the 1930s, there's a global implosion of credit. What's also reminiscent of the Depression are quarrels over who's to blame and what should be done. The Obama administration wants bigger stimulus packages from Europe and Japan. Europeans have rebuffed the proposal. The United States has also proposed greater lending by the International Monetary Fund to relieve stresses on poorer countries. Disputes could fuel protectionism and economic nationalism.

What these confusing crosscurrents produce is defensiveness. No one knows how this epic struggle will end -- whether the forces pushing down the global economy will prevail over those trying to pull it up. Boom psychology gives way to bust psychology: The vague fear that something bad, call it a "depression" or whatever, is happening causes consumers and business managers to protect themselves by conserving their cash and slashing their spending. They hope for the best and prepare for the worst.

Copyright 2009, Washington Post Writers Group