Once More With Feeling

Since 2000, The New York Times Company has generated a respectable cumulative net income of $1,598,062,000. Yet management, over the same period, has paid out $2,779,601,000 for stock buybacks and dividends. This means, during the present decade, stock buybacks and dividends have exceeded cumulative net income by an astonishing $1,181,539,000. Is it any wonder The New York Times’ balance sheet is such a train-wreck? Operationally, this company has done well during the past nine years. Conversely, the company’s balance sheet has been hideously mismanaged by an incompetent executive management team – as supervised by a grossly negligent board of directors.

The New York Times, most certainly, is encountering a difficult operating environment. The internet has posed a serious challenge to companies involved in print media. Advertising revenues, moreover, are dropping dramatically due to the current economic depression. Nonetheless, had executive management been prudent and conservative with respect to balance sheet management, the Times would have had a war chest full of cash, strong working capital, and strong equity; thus, allowing it the financial flexibility to survive these very challenging times. As things stand today, in my opinion, the Times’ strategic alternatives are probably limited to either seeking an acquirer or reorganizing under Chapter 11 Bankruptcy.

In closing, it is appropriate to bring The New York Times’ op-ed columnist, Maureen Dowd, into the picture. She recently savaged executives from A.I.G., Bank of America, Citigroup, Merrill Lynch and the U.S. automakers; deeming them to be incompetent, self-serving charlatans. In this January 28, 2009 op-ed piece titled Wall Street’s Socialist Jet-Setters, she calls these executives “boobs,” “dumb,” “obtuse,” and “…careless ghouls who murdered the economy.” So Ms. Dowd, what do you think of the executives who “murdered” The New York Times Company’s balance sheet? What names would you like to call them?

The bottom line is that the civil rights struggle is over and it is won. At one time black Americans didn’t share the constitutional guarantees shared by whites; today we do. That does not mean that there are not major problems that confront a large segment of the black community, but they are not civil rights problems nor can they be solved through a “conversation on race.”

Black illegitimacy stands at 70%, nearly 50% of black students drop out of high school and only 30% of black youngsters reside in two-parent families.
Even though they’re just 13% of the population, blacks in 2005 committed over 52% of the nation’s homicides and were 46% of the homicide victims. Ninety-four percent of black homicide victims had a black person as their murderer.

Much of that pathology is precipitated by family breakdown and is entirely new among blacks. In 1940, black illegitimacy was 19%; in 1950, only 18% of black households were female-headed compared with today’s 70%. Both during slavery and as late as 1920, a teenage girl raising a child without a man present was rare among blacks.

If black people continue to accept the corrupt blame game agenda of liberal whites, black politicians and assorted hustlers, as opposed to accepting personal responsibility, the future for many black Americans will remain bleak.

1919 The AIG companies were one of the very few U.S. companies to have their origins in China when their founder, C.V. Starr, formed American Asiatic Underwriters in Shanghai.

1921 C. V. Starr founded Asia Life Insurance Company, the first foreign life operation to offer products and services to the Chinese people.

1931 International Assurance Company, Ltd was established. It was renamed American International Assurance Company, Limited in 1948.

1975 AIG former Chairman & CEO, Maurice R. Greenberg, made his first visit to Beijing and has since traveled many times to China.

1980 The AIG companies opened a representative office in Beijing, the first set up in modern China by a foreign financial institution. China America Insurance Company (CAIC) was formed as a 50-50 joint venture between AIG companies and the People’s Insurance Company of China (PICC). This was the first joint venture between a foreign insurance organization and PICC.

1990 The AIG companies organized, financed and chaired a major financial services conference in Shanghai to assist then Mayor Zhu Rongji in introducing the international financial community to investment opportunities in Shanghai.

1992 The AIG companies strengthened their presence in China through a branch office of AIA in Shanghai, the first foreign-owned life and non-life insurance business to receive a license from the People’s Bank of China.

1994 AIA-Shanghai and Fudan University jointly established AIA-Fudan Actuarial Center. AIA Information Technology (Guangzhou) Co., Ltd. was established.

1995 The AIG companies were granted life and non-life insurance licenses for Guangzhou by the People’s Bank of China.

1996 AIA signed a 30-year lease agreement on the building at 17 Zhongshan East No. 1 Road in the heart of Shanghai’s famous Bund. This special building was home to C. V. Starr’s original Shanghai insurance companies. AIA-Zhongda Actuarial Center was established in Guangzhou.

1997 On approval from the People’s Bank of China, AIA Shanghai General Insurance Division was re-named and established as AIU Insurance Company Shanghai Branch.

1998 AIA celebrated its historic return to Shanghai’s Bund.

1999 The AIG companies obtained licenses from the China Insurance Regulatory Commission (CIRC) to operate life and non-life insurance business in Foshan and Shenzhen. AIA and AIU Foshan sub-branches and Shenzhen branches were officially opened to operate life and non-life insurance. AIA-Keda Actuarial Center was established in Hefei, capital of Anhui province.

2000 AIA Information Technology (Beijing) Co. Ltd. was established.

2001 The AIG companies were granted approval from the CIRC to set up wholly-owned life insurance operations in Beijing and Suzhou, as well as two sub-branches in the cities of Dongguan and Jiangmen in Guangdong Province. A representative office was opened in Chengdu, Sichuan Province.

2002 AIA branch offices were opened in Beijing and Suzhou, and sub-branch offices in Dongguan and Jiangmen. AIG Consulting Services Co, Ltd. was established in Beijing. AIG Global Investment Corporation (Asia) established a representative office in Shanghai. AIA-Beida Actuarial Center was established in Beijing.

2003 The AIG companies acquired a 9.9% stake in PICC P&C’s outstanding share capital at its Initial Public Offering in Hong Kong, and reached a co-operative agreement with PICC P&C to develop the accident and health insurance market in China.

2004 AIG Global Investment Corporation, Huatai Securities Company Limited and three other participants were granted approval from the China Securities Regulatory Commission (CSRC) to start preparatory work for the establishment of AIG-Huatai Fund Management Company Limited. The compamy was approved to open business in November.

2005 Approved by the China Securities Regulatory Commission, The Ministry of Commerce and the State Administration for Industry and Commerce, AIG Global Investment Corp. raised its stake in AIG-Huaitai Fund Management Company Limited, from 33 percent to 49 percent. AIG Private Bank Ltd. received approval from the China banking Regulatory Commission to set up its representative office in Shanghai. It is the first foreign private bank to receive approval to open a representative office in Shanghai.

Reference: AIA in China

On Tuesday, Environmental Protection Agency Administrator Lisa Jackson agreed to reconsider her predecessor’s conclusion that greenhouse gas emissions are not subject to regulation under the Clean Air Act’s “PSD” program which governs emissions from large power plants and industrial facilities. As the Washington Post and New York Times report, this is likely the first step toward the EPA’s adoption of greenhouse gas emission controls under the Act. As the Times notes, EPA’s Jackson has already asked her staff to prepare the necessary documentation for the legal finding that would trigger regulation — regulation that (as I’ve argued before) is inevitable under current law.

Regulating greenhouse gases under the Clean Air Act will create a regulatory train-wreck. It will impose substantial costs, and yet fail to meet the President’s ambitious emission reduction targets (80% by 2050). For this reason, many believe that the prospect of loosing the Clean Air Act on carbon dioxide (combined with the unleashing of the Endangered Species Act as a consequence of the polar bear listing) will encourage Congress to enact climate legislation. That’s when the real fun will begin. If, as the President has suggested, Congress puts forward a cap-and-trade proposal, it will unleash a feeding frenzy of rent-seeking, as every conceivable industry and interest group seeks to protect its own or gain competitive advantage. This is one reason why I would prefer a revenue-neutral carbon tax, combined with policies to accelerate technological innovation and adoption — but I’m not holding my breath.