From Uzbekistan to a Desk at a Queens Library

Abstract: With 49,000 loans a month, the Queens Library at Broadway is a busy place in the busiest public library system in the nation — circulating more books, tapes and videos (23 million a year) from its 63 branches than its Brooklyn counterpart or the combined branches of the separate New York Public Library . The library, at 40-20 Broadway, where Astoria meets Long Island City, is scheduled to reopen Wednesday after nine months of renovation. In charge is Tatyana Magazinnik, 53, pianist, émigré from Uzbekistan and a librarian since 1996, like her husband, David. How she arranged the perfect name: It’s my husband’s name. It sounds like “magazine,” but in Russian it means “store.” Maybe somebody wanted me to be a librarian. Other parallels to “The Music Man”: I graduated from conservatory and was teaching piano. I performed sometimes until my daughter was born. My husband was a professor of piano in the Tashkent conservatory. Transplantation: When perestroika started, the future of our child was not there. We came as refugees in 1993. My husband had a sister here. She invited us. When we came to the country, we were looking for information. We came to the library. Learning the language: My daughter didn’t know English well; I didn’t know English. I was trying to teach her myself. The library was my life at the time. We took out children’s books to hear that language. We learned 30 words a day. We memorized them, put them on the wall. The next day, another 30 words. After half a year she didn’t need English as a second language anymore. I learned with her. She just graduated from Vassar, Phi Beta Kappa. The library was everything for us. We were in the library every day, me and my husband. The making of a librarian (couple): We went to Pratt for library science . It took me two and a half years, my husband two years — well, he didn’t sit with the child. I graduated in 1996, and in August I got the job at the library in Lefrak City. In ’99 I became manager of a small branch, in Maspeth. I loved Maspeth. I still have customers that still send me cards at Christmastime. Biggest relief: Before I got this position, people told me all those homeless people will come. I was starting to prepare myself so I’d be ready for something disastrous. But fortunately I don’t see that many problems. During the day they just sit there and read the newspaper. What she does, exactly: I make out a lot of reports, time sheets, assignments to staff. Also work with customers. I’m still a librarian. My office is in the children’s room. I call myself librarian. I like it. I can go to 641.5 and get you a cookbook. Proudest moments: At Maspeth, there was a lady with no job. I would give her books and talked to her, and after two months she said she got a job and brought me flowers. So touching. I had a kid whose first book was a graphic novel. He started to read every book. He became a writer. I had a Russian customer who didn’t speak the language. She took an E.S.L. program in the library. You don’t even pay for it. She went through two programs, spring and fall. After that she got a job in Tiffany’s and then became a secretary. What a librarian hates: People who don’t return books. I call them book-keepers. How she keeps fit: I run four miles every day. I run my stairs at work. It’s a free exercise machine.

Uzbekistan
Refugees
Queens Borough Public Library
Libraries and Librarians
Astoria (NYC)
Long Island City (NYC)


California Senate Race Is a Tale of Diversity and a Flailing G.O.P.

Abstract: LOS ANGELES — Kamala Harris made history when she became the first black woman to be elected attorney general in California. Now she is vying for the United States Senate, and she has managed to stay the front-runner in the race ever since she announced last year, just days after Senator Barbara Boxer, a fellow Democrat, said she would leave the seat she won in 1992. With the help of allies, Ms. Harris nudged aside other prominent Democratic contenders, including Antonio Villaraigosa, the former mayor of Los Angeles, and United States Representative Xavier Becerra. But as Tuesday’s open primary for the seat approaches, Ms. Harris’s chief rival is from her own party — Loretta Sanchez, a congresswoman from Southern California. And their competition says as much about California as it does about the candidates. In a state with one of the most diverse electorates in the nation, where Latinos are the largest ethnic group, a victory by either woman would be a milestone: Ms. Harris would be the first black woman in the United States Senate since Carol Moseley Braun , an Illinois Democrat who served from 1993 to 1999, and Ms. Sanchez would become the first Latina elected to the Senate. A recent Field poll shows the two leading a crowded ballot, including a pack of Republicans. The open primary — approved by voters in 2010 — will send the top two vote-getters, regardless of party, to the November election. That contest will offer insight into just how diminished the Republican Party is in this state. Polling suggests that none of the many Republicans in the race can draw enough votes to even make the final ballot. In a recent interview, Ms. Sanchez said she knew she faced a formidable obstacle because many of the state’s leading Democrats would back Ms. Harris — who, like most statewide elected officials, comes from the Bay Area. “I knew that I would not have the establishment with me — they sent a message to all of us in Southern California,” Ms. Sanchez said. “But I’ve been told ‘no’ many times, and go on to make it work.” Ms. Sanchez surprised many in the political world when she was elected to the House of Representatives 20 years ago, beating a Republican incumbent in Orange County, which for decades had been a Republican stronghold. Now, as then, Ms. Sanchez is counting on deep support from Latinos. Latino voter registration in California has nearly doubled this year, according to the secretary of state’s office, as voters also prepare to choose presidential nominees. Many believe those newly registered voters will turn out on Tuesday, driven in large part by anti-immigrant rhetoric from the Republicans’ presumptive nominee, Donald J. Trump. In a poll released in late May , Ms. Sanchez had the support of roughly 48 percent of Latinos, compared with 19 percent for Ms. Harris. “What’s the one thing that can motivate more Latino voters than ever before? Donald Trump,” said Dan Schnur , the director of the Jesse M. Unruh Institute of Politics at the University of Southern California. “The question will be how strong those loyalties are.” Far from ceding any ethnic voting bloc, Ms. Harris has spent much of her energy courting Latinos. She secured endorsements from Hilda Solis, a Los Angeles County supervisor who was President Obama’s first labor secretary, and Dolores Huerta, a farmworkers advocate who appears in a Spanish-language commercial for Ms. Harris. Image Representative Loretta Sanchez campaigned at the Grand Central Market in Los Angeles last week. Ms. Sanchez is trying to become the first Latina in the United States Senate. Credit Andrew Cullen for The New York Times Speaking recently to a crowd of union officials in Commerce, a city east of Los Angeles, Ms. Harris emphasized her own family’s immigrant roots and her support for overhauling immigration law. “Latino voters are my voters,” she said. “They care about people’s commitment to their issues, and I’d match my record against anyone when it comes to looking at my longstanding commitment to all communities, including the Latino community. I reject the notion that this race is going to come down to ethnicity. It’s going to come down to what you’ve actually done and what you’ve demonstrated you can get done.” For much of the race, Ms. Harris has largely ignored the rest of the field. She relies on the phrase “smart on crime” to convey her views on criminal justice and uses the label “fearless” in campaign advertisements . While her experience as the state’s top law enforcement official is her most important credential, she has never taken a position on a 2014 voter-approved measure to release thousands of inmates and reduce sentences for nonviolent offenders. Ms. Sanchez, who is running her first statewide campaign, points to her work in Congress to portray herself as the candidate most prepared to deal with national security. She has promoted her support from colleagues in the House, campaigning with several of them in recent appearances. Representative Filemon Vela, Democrat of Texas, released a statement late last month calling the California Democratic Party’s support for Ms. Harris “insulting to Latinos all across this country.” “Not one single Democratic Latina has ever been in the United States Senate,” Mr. Vela said in the statement, adding that the party’s position is "a disrespectful example of wayward institutional leadership, which on the one hand ‘wants our vote’ but on the other hand wants to ‘spit us out.’ ” Though both women have aired commercials in the expensive media markets of the Bay Area and Los Angeles, Ms. Harris has raised more than three times as much money as Ms. Sanchez — $11 million compared with about $3.5 million as of Friday, according to the Center for Responsive Politics . In the two televised debates, the three leading Republicans in the race focused much of their attacks on Ms. Harris. For them, the path to November relies on uniting Republican voters and a significant chunk of independents, who make up about a third of the state’s registered voters. “We have two people at the top of the national ticket who are really divisive,” said Duf Sundheim , a Republican candidate and a former chairman of the state party, who has not said whether he will back Mr. Trump in the fall. “I think it’s really important to have someone in the Senate who can really do things in the middle.” Tom Del Beccaro , another Republican candidate and former chairman of the state party, has called for a flat federal income tax and said Congress should focus on setting stricter immigration laws. Just as often as he talks about his positions on issues, Mr. Del Beccaro discusses the mechanics of Tuesday’s primary ballot. With 34 names spread across two columns, he said, the ballot is too complicated, making it more likely that voters will not check boxes correctly. “The top-two primary drives down participation and creates a lot of guess work,” Mr. Del Beccaro said. Though he has raised hardly any money and has spent little time on the campaign trail, perhaps no other candidate has more directly pursued supporters of Mr. Trump and Senator Bernie Sanders than Ron Unz , a software engineer and political writer who has endorsed both an increase in the federal minimum wage and more limits on legal immigration. Mr. Unz rose to prominence here more than a decade ago when he backed a ballot initiative opposing bilingual education. “The Republican Party in this state has almost been annihilated,” Mr. Unz said. “It’s going to be embarrassing for Republicans if they don’t even have a candidate in the fall, but this shows some enormous dissatisfaction with our respective parties that we will have to deal with in the future.”

California
Senate races
Loretta Sanchez
Kamala D Harris
Hispanic Americans
Black People,African-Americans


Mike Krzyzewski Earns 1,000th Win as Duke Tops St. John's

Abstract: No record was at stake Sunday afternoon. Duke Coach Mike Krzyzewski had already taken care of that, eclipsing Bob Knight’s mark for wins by an N.C.A.A. Division I men’s basketball coach, 902, in 2011 and chugging steadily onward. Still, an announced crowd of 19,812 at Madison Square Garden on Sunday had the chance to see four little digits align to represent one big, round number — and with it, a breakthrough into another echelon of the sport. Krzyzewski vaulted across the threshold of 1,000 wins — a faraway figure to all but a few coaches at any level of men’s or women’s college basketball — although it required some struggle by No. 5 Duke against a St. John’s team feeling somewhat slighted to be the afterthought in a nonconference game on its home court. A 15-1 run by the Blue Devils late in the second half sealed a 77-68 victory, and for the 1,000th time in his career, Krzyzewski shook hands with, and offered consolation to, a losing opponent at midcourt. A swarming contingent of cameras shadowed him as he went from one on-court interview to the next. The Duke players slipped on white T-shirts with “Coach K” on the front and “1,000 Wins and Kounting” on the back. They danced and huddled, then chanted, “Family!” “I’m honored,” Krzyzewski, 67, said. “I’m a lucky guy who has been at two great institutions, West Point and Duke. I’ve had unbelievable support. I’ve never had a day in 40 years where I’ve worried about my back. Not many people can say that.” Only two other men’s basketball coaches (Harry Statham of McKendree University, an N.C.A.A. Division II program, and Danny Miles of Oregon Tech, in the National Association of Intercollegiate Athletics) and one women’s coach (Pat Summitt, the former coach at Tennessee) have reached 1,000 wins. Herb Magee of Division II Philadelphia University, with 997 victories, will almost certainly be the next. But Krzyzewski, with a career winning percentage above .760 and four N.C.A.A. tournament titles, has come to redefine excellence and longevity in the modern era, even as the recruiting process has changed drastically and star prospects have begun to dash off campuses in a matter of months. One year with Krzyzewski, it is Kyrie Irving; another year, Jabari Parker; another year, Jahlil Okafor, a freshman who commanded the attention of more than a few of the 209 news media members to receive credentials for Sunday’s game. The 6-foot-10-inch Okafor, halfway through his first collegiate season, is already drawing comparisons to Tim Duncan and Hakeem Olajuwon. He is a tantalizing prospect for Knicks fans, which was most likely why the Knicks’ president, Phil Jackson, and forward Carmelo Anthony were on hand to watch him play. Okafor, 19, seemed to sense his opportunity to audition. He soared into the air for an offensive rebound, spun and softly deposited the ball through the rim for the game’s first basket. With Okafor scoring 8 points in the first eight minutes, the Blue Devils (17-2) built an 11-point lead. St. John’s (13-6) charged back. The Red Storm have beatific memories of playing Duke at the Garden; the last time the team faced the Blue Devils there, in January 2011, St. John’s won, 93-78. Image Krzyzewski, left, and the assistant Jeff Capel after Krzyzewski earned his 1,000th win as the Blue Devils beat St. John’s. Credit Anthony Gruppuso/Reuters That has stood as perhaps the biggest win of Coach Steve Lavin’s tenure. On Friday, St. John’s guard D’Angelo Harrison explained that the motivation to win this game was greater than usual. “We just don’t want them to celebrate on our court,” Harrison said. A layup and free throw by Rysheed Jordan with 3 minutes 40 seconds left in the first half gave St. John’s a lead, and after a Harrison 3-pointer with two seconds remaining, the Red Storm bounded into the locker room at halftime ahead, 43-39. The lead swelled to 10 early in the second half, with the team propelled by Sir’Dominic Pointer, who finished with 21 points, and Jordan (18). But Duke rallied. Krzyzewski inserted the bruising forward Marshall Plumlee alongside Okafor, a rotation he said had not been used all season. “I thought we made a mistake right away and we were going to lose by 30,” Krzyzewski said. “And then, boom. It just, boom. It was great.” A 3-point play by Okafor capped a 9-0 Blue Devils run that cut the Red Storm’s lead to 1. A 3-pointer by Quinn Cook gave Duke a lead. And a 3-pointer by Tyus Jones with 1:15 left made it a 7-point game, one that the Blue Devils could salt away. Okafor had 17 points and 10 rebounds, while Jones scored 22 points. Image Duke's Jahlil Okafor was defended by St. John's Chris Obekpa. Okafor scored 8 of Duke’s first 21 points, helping the Blue Devils build an 11-point lead in the opening eight minutes. Credit Kathy Willens/Associated Press “Duke made the decisive final run or final blow,” Lavin said. “We were not able to answer.” On Friday, Lavin looked to pop culture to summarize Krzyzewski’s achievement in coaching. Lavin mentioned the singer Tony Bennett and the television host Johnny Carson as comparable models of routine excellence — men at the pinnacles of their professions who kept performing, night after night, for decades. “That’s what puts him at the top,” Lavin said of Krzyzewski. Krzyzewski was asked how his energy remained, unwavering, after so many years. “Energy is not a matter of age,” Krzyzewski said. “It’s a matter of commitment to your position, to what you do.” Sunday’s game, he said, was a perfect example. He called the Garden’s atmosphere “magical.” And the game took on the likeness of a three-act play. “I’m not sure I’ve ever been a part of a game like that,” Krzyzewski said. “It’s kind of nuts, huh? You’re involved with 1,400 games or whatever I’ve been involved in, and to have one that’s different, that’s what makes the game so good.” Among the few people granted access to visit with Krzyzewski in the locker room before the game was Lou Carnesecca, the coach with the most wins in St. John’s history, the eponym of the Red Storm’s on-campus arena, and a cherished figure in New York college sports. Carnesecca, 90, brushed his hand against Krzyzewski’s cheek. He joked, “Just don’t take the chandeliers.”

Mike Krzyzewski
Duke
College basketball
Jahlil Okafor
St John's


Yogi Berra Calls ’Em as He Sees ’Em on McGwire

Abstract: LA QUINTA, Calif. — Yogi Berra , the host of the 2010 Bob Hope Classic, spent part of Tuesday squinting into television lights, smiling for cameras and shaking hands. His golf game is lousy, Berra said, but on the eve of the first round of the tour’s only five-day pro-am, the Yankees great handled reporters’ questions the way he did pitches from Whitey Ford some 50 years ago — deftly. Jackie Robinson did not steal home plate on him in the 1955 World Series. “He was out!” Berra said with emphasis. The home run by Pittsburgh’s Bill Mazeroski in the bottom of the ninth to win the 1960 World Series might not have happened if Manager Casey Stengel had not started Art Ditmar in Game 7. “He shoulda started Whitey,” Berra said. And should Mark McGwire , who last week admitted he used steroids during his record-breaking home run season of 1998, get into the Hall of Fame? “I think it’s going to be pretty rough for him to get in the Hall of Fame, I really do,” Berra said. “Just like Pete Rose, you know, he’s got tough sledding.” At 84, Berra moves slower, but his mind does not. Almost 12 years of denial by McGwire were just too many, Berra said. “I think he waited a little too long to announce it,” Berra said. “If he’d done it at the beginning, he might have a chance to get in.” Berra pointed to the Yankees left-hander Andy Pettitte and the former Yankee Jason Giambi, who were forgiven after timely admissions of drug use. “Say, like Pettitte did,” Berra said. “He admitted it. If you admit it, it would be all right. Like Giambi, the same way. You admit it right away.” Berra cheered when the Yankees won the World Series last year. He was circumspect about any comparisons to Yankees teams on which he played. “We won five in a row there,” he said. “I played 17 years, and I was in 14 of them. So we must have had pretty good teams.” Few people know that Berra was among members of the naval forces that fought at the beaches of Normandy in June 1944. He has never said much about it, but remembers it well. “It was like Fourth of July,” he said. “No kidding. I was only 18 years old. And the invasion was going and there was only five men and an officer on the boat. And we went in first.” Berra was a gunner’s mate in the Navy, and was based aboard the USS Bayfield, APA-33, which was the flagship for the landing at Utah Beach, according to Navy documents. “I know my officer told me, ‘You better get your head down here.’ ” Berra said. “I was looking up and it looked like the Fourth of July. I thought nothing could happen to me.” What happens to Berra most these days is that people come up to him and remind him of what he meant to them when they watched him play baseball. He does not mind this at all, he said, and he looks as though he means it. He was asked if he is remembered more these days for his appearances in television commercials for insurance companies, like Joe DiMaggio was for coffee commercials. When Berra smiled, it was genuine, and it was easy to see the gap between two front teeth that anchor a set that has never been capped. “Oh, maybe,” he said. “They certainly like to — I had fun doing that. That’s a live duck that was in front of me, too. They train them.” That elicited laughs from the reporters, but that was not his intent. “I’m not kidding you now,” he said. “He stops. They ring the bell and he stops. They train him for six months. And they had a couple of them, if you don’t do it right, they would bring the other duck in.” He would notice something like that about the ducks, because Yogi Berra came from an era in which ballplayers had to be versatile if they were going to stick around. That is something that still stands out to him about the old Yankees teams that played for Stengel. It was why Berra was standing in front of the left-field wall, instead of behind the plate, at Forbes Field in 1960 in the iconic black-and-white photograph of Mazeroski’s series-winning home run that said it all. “You love when guys can play different positions,” Berra said. “And we had three catchers. We all played the outfield and we all caught. We played three catchers in one game his last year. He liked that. Gil McDougald, he made the All-Star team in three positions: second, short, and third. And he could play all three of them.” Berra noted that Tony Kubek could play the outfield and the infield. “If you get a guy that can play a couple positions, it helps you out a real lot,” Berra said. “And I played right field and left field. When I first came up, I was an outfielder and catcher, but I was a lousy catcher. Until Bill Dickey came over in ’49 and he taught me — I owe a lot to him — he worked my butt off. And I enjoyed it.” Someone wondered what Berra was thinking about that afternoon in Pittsburgh in 1960. “I thought the ball was going to hit the wall,” he said. “I was waiting to play the bounce.” On Tuesday, he seemed more like everybody’s favorite uncle who is running for mayor, shaking hands, posing for pictures and signing everything he was handed during a ceremony at which the tournament distributed checks for $1.538 million to local charities. “Well, it makes me feel pretty good,” he said. “It does. I’m pretty good at that. I never seen so many pictures being taken, I know that. “But I get a lot of kick out of sometimes, at the airport, a guy comes up to me, says, ‘Boy, you look just like Yogi Berra.’ And I say, ‘Yeah, a lot of people tell me that.’ ”

Baseball
Berra Yogi
McGwire Mark
New York Yankees


Ex-Leader of Naral Pro-Choice New York Faces Civil Action on Misused Money

Abstract: ALBANY (AP) — The state attorney general’s office has accused the former leader of a prominent abortion-rights group of spending hundreds of thousands of dollars of charitable money on shopping sprees, a Hamptons vacation rental, fine dining, hotels and other personal luxuries. The accusation is included in a civil complaint filed in Manhattan on Thursday against Kelli Conlin, 54, who pleaded guilty a year ago to falsifying business records, a felony. Her criminal case closed without jail time after she repaid $75,000 in restitution to Naral Pro-Choice New York and its affiliated foundation, which she led from 1992 through 2010. But David Nachman, enforcement section chief of the attorney general’s Charities Bureau, said Ms. Conlin’s spending actually amounted to “hundreds of thousands of dollars in improper benefits.” The attorney general’s office is requesting that she repay all of it, with interest, and reimburse its own legal and investigative costs. Attorney General Eric T. Schneiderman has recused himself because his father, Irving, was the treasurer for a time of Naral Pro-Choice New York. His office appointed an outside counsel to investigate Ms. Conlin in March 2011. Naral and other abortion-rights groups were among Mr. Schneiderman’s supporters in his 2010 campaign for attorney general. Naral Pro-Choice New York and the National Institute for Reproductive Health said Friday that they applauded the civil action and had put new financial controls in place since Ms. Conlin was terminated in January 2011. The group said that it did an internal investigation and that it had cooperated with the attorney general’s investigation. Calls to Ms. Conlin’s attorney were not immediately returned on Friday.

Attorneys General
Conlin Kelli
Naral Pro-Choice America
Frauds and Swindling
Embezzlement
New York State
Abortion


Underbelly Project Visitors at Ghost Subway Station Risk Arrest

Abstract: The New York City police have arrested 20 people for trying to enter an abandoned subway station housing the formerly secret guerrilla exhibition of underground street art that was revealed to the public this month. The clandestine gallery has attracted urban explorers eager to catch a glimpse of dozens of provocative, large-scale installations created by more than 100 street artists who sneaked into the station over the course of a year. Several of these spelunkers, however, have encountered something else: a team of police officers, some in plainclothes, assigned by the city to monitor the site. Most of those arrested were charged with trespassing and a few were caught carrying spray cans and other graffiti paraphernalia, the authorities said. While the police are taking a hard line on keeping people away — “This is not an art gallery; this is completely illegal,” one officer said — the paintings in what the artists called the Underbelly Project are likely to live on. Subway officials said they had no plans to paint over the artwork, even if they sincerely hoped nobody ever got to see it again. “We have no intention of disturbing the works,” said Deirdre Parker, a spokeswoman for New York City Transit . Ms. Parker noted that the fiscally challenged transit agency would not want to devote resources to restoring a space almost entirely unseen by the riding public. “It’s in complete darkness and not really at all visible to anyone,” she said. The organizers of the project, who did not return a request for comment on Wednesday, have refused to disclose its location. So have transit officials. But first-person accounts, photographs and speculation around the Internet focus squarely on an abandoned station built in the 1930s atop the existing Broadway stop on the G line, near South Fourth Street in Williamsburg, Brooklyn. The exhibition was the subject of an article in The New York Times on Nov. 1, but without specifying the location. A comparison of current and historical photographs makes a convincing case for the Williamsburg station, and a spokesman for the police acknowledged that the site is in Brooklyn. But subway officials would not divulge the exact spot. “There are some bloggers who can pinpoint these places because they eat and sleep transit lore,” Ms. Parker said, “but officially, no, we’re not confirming anything.” So far, efforts by the authorities to secure the space appear to have been only partly successful. Evidence of recent visits to the site has been published on the Internet, including photographs that suggest some of the artwork has been defaced by graffiti. One blogger from Brooklyn, who said he explored the site in the early hours a week ago, posted photographs on his Web site that appeared to show vandalized works. “It does seem to only have been tagged by one person, and it’s actually kind of sad since some of the works are so amazing,” the blogger wrote in an e-mail. (He requested anonymity to avoid drawing attention from the authorities.) The blogger said part of a chain-link fence put up by the police had already been peeled open. “If you are industrious enough, you can still get up there,” he wrote. The South Fourth Street station was intended as a primary transfer point for subway lines that would have stretched from Lower Manhattan into Brooklyn and Queens, part of an ambitious expansion of the subway system planned by the city in 1929. The Great Depression forced officials to abandon the proposal, but not before bits and pieces of the proposed network had been built. Transit officials reiterated this week that getting to the site could be dangerous. “We really don’t want to encourage anyone to go near these places,” Ms. Parker said. She said the Police Department and transit officials were “working closely together to come up with short- and long-term solutions to the security problem.” Detectives have been looking into the project’s origins, a Police Department spokesman said, but the police often find it difficult to link individuals to cases of illegal street art.

Underbelly Project
Subways
Art
New York City Transit Authority
Brooklyn (NYC)


Plan to Bail Out ‘Too Big to Fail’ Banks Raises Skepticism

Abstract: In recent weeks, we have received the latest installment in the long-running — and some would say quixotic — attempt to explain how certain supersize American financial institutions would be addressed under the bankruptcy code if they were to fail. The Dodd-Frank Act, enacted in 2010 in response to the collapse of Lehman Brothers and all other near failures of 2008 and 2009, requires all large financial institutions, including the American units of foreign financial institutions, to prepare plans explaining how they would face their own “Lehman moment.” This exercise is consistent with the notion that Dodd-Frank’s “orderly liquidation authority,” an insolvency system in which the Federal Deposit Insurance Corporation would act as a receiver of a distressed financial institution, is to act only as a backstop to normal bankruptcy procedures. Some, particularly those abroad, consider this a fool’s errand. Banking regulators in particular seem to be skeptical about the role of a bankruptcy judge, who will obviously not have a pre-existing relationship with the financial institution, in the resolution process. The new plans are mostly notable for injecting intermediate holding companies into the banks’ organizational structure. This new holding company addressed the obvious bankruptcy law problems that would result from previous plans to have the bankrupt holding company transfer money to its venerable subsidiaries just before filing for bankruptcy. Nonetheless, there is something odd about trying to solve this problem by adding yet another legal entity to the already complex corporate structure of banks. But at heart, the new bankruptcy plans are quite similar to the prior drafts. They all turn on the notion that a large financial institution can be saved by efforts that focus only on the holding company at the top of the financial institution. The basic model involves the holding company issuing a lot of debt that is used to fund the operating subsidiaries. Because these new funds come in the form of long-term bonds, they cannot be subject to a run like bank deposits in the 1930s or repo or commercial paper in 2008. These bonds, called total loss absorbing capacity , would be exchanged for shares in the financial institution. Old shareholders would be wiped out. The “single point of entry” approach to financial institution bankruptcy posits that fixing the holding company’s balance sheet — by canceling debt, and thus rebalancing the balance sheet — would stabilize the entire corporate group. In a recent paper with Arthur E. Wilmarth Jr. of George Washington University, and forthcoming in The Florida Law Review , I argued that there are good reasons to be skeptical about this approach to financial institution failure. In short, we ask two crucial questions. First, who is going to buy these new bonds? And second, how likely it is that forcibly converting bondholders to shareholders will do the trick in a financial crisis? On the first point, the worry is that retail investors might be the ones most likely to hold this new debt. That means that the taxpayer may be left holding the bag once again. At the least, we will want to make sure that investors understand this up front and demand an appropriate return. On the question of the “single point of entry” approach, the basic issue is whether it is reasonable to think that the near failure of the American International Group in 2008, to take but one example, could have been contained by restructuring its holding company. We are doubtful and argue that the “single point of entry” approach is better viewed as one tool in the resolution toolbox. Thus, we reject pending “Chapter 14” proposals that would tie financial institution resolution under the Bankruptcy Code to the use of that approach.


Daily Report: Facebook Joins Fight Against Fake News

Abstract: Pope Francis endorsed Donald J. Trump for president. Hillary Clinton ran a child trafficking ring out of a Washington pizzeria. Both of these were actually fake news articles that circulated widely online, including on the world’s biggest social network, Facebook. Facebook is now taking steps to limit the misinformation on its site. On Thursday, Mike Isaac reports , the company began a series of experiments to better identify, flag and reduce the prominence of false articles, as well as making ad changes to hurt the bottom lines of fake news purveyors. If the tests are successful, they will be rolled out to a bigger audience, the company said. Image The new measures include partnering with groups that can help fact-check articles. If an article is deemed fake, it will carry a “disputed” designation on Facebook. If people still want to share it, they will see a pop-up that reminds them that the veracity of the information is in question. In an interview , James Goldston, the president of ABC News, which is one of the groups that will be doing the fact-checking, explained how the partnership would work. Facebook’s efforts are unlikely to stem the mushrooming of fake news, which also proliferates beyond the social network. And the company is walking a fine line of potentially discarding its position as a neutral player by intervening to ferret out fake news, some critics said. A Breitbart News article accused Facebook of working with “ partisan fact-checkers .” Facebook acknowledged the balancing act. “I think of Facebook as a technology company, but I recognize we have a greater responsibility than just building technology that information flows through,” Mark Zuckerberg, the company’s chief executive, wrote in a post on Thursday. “We have a responsibility to make sure Facebook has the greatest positive impact on the world.”

Facebook
ABC News
News media,journalism
Social Media


Bridgeport: Man Charged With Raping Girl He Met Online

Abstract: A Bridgeport man was charged on Wednesday with raping a 12-year-old girl he met through the MySpace Web site, the police said yesterday. The man, Bienvenido Garcia, 19, was arrested by United States marshals at his apartment at the P. T. Barnum complex, said Lt. James Viadero. The investigation, reported yesterday in The Connecticut Post, began last month when the girl’s mother presented the Bridgeport police with 16 pages of computer correspondence that was “sexual in nature,” Lieutenant Viadero said. Mr. Garcia was charged with first-degree sexual assault and risk of injury to a minor, the police said. MySpace officials said they did not comment on investigations in progress.


Fertilizer Maker Buys Rival for $4.1 Billion

Abstract: OSLO (Reuters) — A Norwegian fertilizer producer, Yara International, agreed on Monday to buy Iowa-based Terra Industries for $4.1 billion to increase its presence in the United States, as rivals look to join forces to gain size and reach. Last month, CF Industries Holdings withdrew its yearlong hostile bid to buy Terra. That battle, along with other acquisitions and speculation about mergers, has kept the fertilizer sector in the investor spotlight, despite a sharp fall in prices last year as the global economic crisis hit. Analysts and producers expect a major rebound in demand in 2010 as farmers rush to replenish their soil nutrient levels, which could lead to more mergers or acquisitions. The chief executive of Yara, Joergen Ole Haslestad, said on Monday that the all-cash acquisition of Terra “will create a clear global No. 1 in the fertilizer industry.” Energy-intensive fertilizer producers in North America have become increasingly attractive, Yara said, because of “structural changes” in American energy markets as a boom in unconventional gas output curbs natural gas prices in the United States. Yara’s offer values Terra at $41.1 a share and represents a premium of 23.6 percent compared with Friday’s closing price. The enlarged company will have about 30 percent share in the United States fertilizer market and a 8 percent global market share. Yara said it expected some $60 million annual savings from the deal. The chief executive of Terra, Michael L. Bennett will become an executive vice president of Yara and head the Norwegian company’s North America division.

Fertilizer
Yara
United States
Terra Industries Incorporated
Mergers Acquisitions and Divestitures
Norway


Big East Coaches Talk About Realignment, Not Basketball

Abstract: Notre Dame’s Mike Brey stood in a corner of an ornate banquet room on the ninth floor at the New York Athletic Club on Wednesday morning and attempted to talk about the Big East basketball season, even though few people seemed to be asking about it. The hot topic of conversation was how the Big East — which sent 11 teams to the N.C.A.A. tournament last season, including the eventual champion, Connecticut — would, or even could, survive the coming and potential defections of universities with Football Bowl Subdivision-level programs. Brey gestured toward another corner of the room, where Jim Boeheim, the 66-year-old Syracuse coach, was seated behind a table, framed by a large window that looked out on a gloomy Central Park — its treetops, fittingly, shrouded by rainclouds. “I don’t know if I can picture the league without him,” Brey said of Boeheim, who has been the coach at Syracuse since 1976, three years before the Big East’s inaugural basketball season. The Atlantic Coast Conference last month accepted Syracuse and Pittsburgh as new members, and Louisville and West Virginia are said to be candidates to jump from the Big East to the Big 12 as conference realignment continues its unpredictable shifting. The departures of Syracuse and Pittsburgh are not imminent, and Boeheim (whose team was picked to share first place with Connecticut in the coaches’ preseason poll ) said he planned to coach this season like any other. He said he would talk about a conference change afterward. “All I know is that we’re playing in the Big East,” he said. Connecticut Coach Jim Calhoun said, “Line them up, and whoever’s there, we’ll play them.” But he also said it was hard not to pay attention to speculation about realignment. It was an odd media day. The 16 coaches essentially were spokesmen for their universities’ athletic agendas. The players mostly sat off to the side, leafing through media guides or listening to their coaches talk about conference alignments. A day after he said on a teleconference that the Big East was looking to replace Syracuse and Pittsburgh, John Marinatto, the conference commissioner, stood in front of reporters and said, “I can’t tell you how happy I am to be talking about basketball this morning.” Five minutes later, he was talking about conference alignment again. “I don’t think anyone’s expected what’s happened over the last several months,” he said. Pittsburgh Coach Jamie Dixon sounded almost apologetic about leaving the Big East, saying the Panthers would not bolt until the time was right for everyone. “If you want to look for a bad guy, you can’t,” Dixon said, adding, “We wouldn’t get this opportunity to join another conference except for the Big East.” Dixon knows how important Big East basketball has become over the last three decades. He said his father, Jim, was upset when he heard that Pittsburgh was leaving the conference, and he needed to explain the reasons for leaving before his father settled down. “I hope I can settle down a few other people,” Dixon said, smiling. Louisville Coach Rick Pitino sat in front of a large fireplace, not far from a painting of a champion fencer, and drew the largest crowd of reporters. He said reports of Louisville’s uncertain future had not affected recruiting. He said he liked competing in the Big East, but he also said he understood there were factors other than basketball, or even tradition, that determined whether a conference had a strong future. He said he heard that the Liberty Bowl drew a larger television audience than a North Carolina-Duke basketball game. “Ten years ago, the Big East was all about basketball,” he said. Pitino sounded as if he did not like it that that was no longer true, but he had an idea of how to soften the blow. Double the $5 million penalty for universities that leave the conference, he said with a smile, “and each coach who stays gets a million each.” Boeheim would not be eligible for such a windfall because Syracuse is leaving, but he sounded as if he had other things on his mind — basketball being one of them. “No distractions,” he said.

Basketball
College Athletics
Big East Conference
Boeheim Jim
Calhoun Jim
Syracuse University
Basketball (College)
Football (College)


Thomas G. Stemberg, Who Joined a Rival to Found Staples, Dies at 66

Abstract: In 1985, Thomas G. Stemberg was looking for a new business venture, having just been fired as vice president of a supermarket giant. That Fourth of July weekend, he was also looking for a printer ribbon. A computer chain had none in stock. Most stationery stores were closed. The one that was open offered only an overpriced replacement. For want of a ribbon, a retailing behemoth was born. Not long afterward, Mr. Stemberg and a former grocery industry archrival, Leo Kahn, teamed up to found Staples , which would become the world’s largest discount supplier of office products. They opened their first store in Brighton, Mass., in May 1986, using money from a venture capital firm, Bain Capital, co-founded by Mitt Romney. Two decades later, when Mr. Stemberg retired as chairman, Staples had nearly 1,780 stores around the world, almost 70,000 employees and sales of $16 billion. He died on Friday at 66 at his home in Chestnut Hill, Mass. The cause was stomach cancer, his son William said. “I envisioned a Toys ‘R’ Us or Home Depot for office supplies,” the elder Mr. Stemberg told The New York Times in 2004. “That’s how Staples was born.” Through his dealings with Bain Capital, Mr. Stemberg also forged a long personal relationship with Mr. Romney. When Mr. Romney went into politics, Mr. Stemberg became a financial supporter and an adviser. He was credited with persuading Mr. Romney, as governor of Massachusetts, to create an affordable health insurance program. “He came to me and said, ‘If you really want to help people, you’ve got to get everybody health insurance — you can find a way,’” Mr. Romney recalled in a telephone interview on Thursday. “He was insistent. He pushed me.” Mr. Stemberg applied the same zeal when, at 39, he teamed up with Mr. Kahn, a marketing master who was 70 at the time and had competed with Mr. Stemberg in Boston’s supermarket wars. (Mr. Kahn was also a fellow Harvard alumnus.) The new partners did not immediately settle on office supplies in their hunt for a specialty retailing opportunity. First they combed New England shopping centers to discover which niches were most underserved and offered the greatest potential. They considered telephones, pantyhose, orthopedic products and pet provisions before deciding on office supplies — inspired in part by that pivotal Independence Day weekend, by Mr. Stemberg’s account — and selling them for as little as half the price that local stationers charged. “I’m thinking about names,” he recalled in an interview with Fortune Small Business in 2002. “Pencils? Pens? 8 ½-by-11? Staples? Staples! Staples the Office Superstore. That was it. The bad thing about the name was that when we started out, we had to explain to everybody what it was.” In its first two years, Staples opened 16 superstores in the corridor between Boston and Washington, which has the nation’s highest concentration of office workers. Staples spawned imitators, but the partners dominated through skillful marketing. They discounted prices for Staples cardholders to reward customer loyalty. They built mammoth warehouses to cut distribution costs. They charged for delivery to keep cash-and-carry customers from subsidizing shoppers who ordered from home or businesses. And they seized the opportunity presented by the Internet to woo online buyers. Mr. Stemberg was nothing if not adaptable, and ever the nonconformist. He majored in organic chemistry at Harvard but decided to pursue something else after managing only a C+ average. He considered law school and took a course but fell asleep in his first lecture. In the end, he decided on a business career. When his fellow students shaved their beards for job interviews, he grew one. Mr. Stemberg thought so far outside the box that after bypassing wholesalers, he even persuaded office supply manufacturers to repackage their stock so that consumers in his self-service superstores would not have to search through identical cartons to find, say, a particular variety of paper clips or envelopes. (Before big-box stores, those supplies would typically be shipped in bulk from a retailer to an office manager’s stockroom.) Thomas George Stemberg was born in Newark on Jan. 18, 1949, the son of Austrian immigrants who had fled Europe as the Nazis rose to power before World War II . His father, Oscar, a Jew, managed the restaurants in Vienna’s Hotel Imperial. His mother, the former Erika Ratzer, was a Roman Catholic who had been disinherited by her father for marrying a Jew. To obtain visas, the couple persuaded the authorities that Oscar Stemberg was a vital employee of a Canadian insurance company. They moved to Orange, N.J., where he opened a restaurant named Zig’s. After the elder Mr. Stemberg died when Thomas was 11, he and his mother returned to Vienna, where he attended the American International School and was junior all-Austria in basketball — “probably the only place in the world I could have been all-anything,” he later recalled. He won a scholarship to Harvard, graduated in 1971 and got a degree from Harvard Business School. He supplemented the scholarship by washing dishes; later, he endowed scholarships for Harvard students who had lost a parent, and he became an avid supporter of the university’s basketball team. After school, he was hired by the Jewel Companies, a Chicago grocery chain, where he became a vice president when he was 27 and introduced no-name generic brands. “My mother was incredibly offended that her son was trimming lettuce while learning how to help run the operation,” he told The Times. “She hadn’t spent all that money sending me to Harvard so that I’d end up in the produce section.” His first two marriages ended in divorce. He is survived by his wife, the former Katherine Chapman; six sons, William, Michael, Clyde and Thomas McDermott Stemberg, as well as Rylan Hamilton and Darrell Williams; three stepdaughters, Madison Eisler and Meghan and MacKenzie O’Gara; and three grandchildren. Mr. Kahn, his Staples partner, died in 2011. Before starting Staples and becoming chairman and chief executive, Mr. Stemberg was president of the eastern division of First National grocery stores. He was fired after he objected to the sale of the warehouse division, which he headed. It was sold to the Supermarket General Corporation, of which Mr. Kahn was chairman at the time. “His prior employer said he was fired because he was too bullheaded,” Mr. Romney said of Mr. Stemberg, “but he said he would invest in him because he was brilliant and would go through walls.” After leaving Staples, Mr. Stemberg founded the Highland Consumer Fund, which invested in start-ups, including Lululemon Athletica and David’s Tea. Mr. Stemberg, though a consummate salesman, was unable to persuade the Federal Trade Commission in 1996 to approve a proposed merger with Office Max, which briefly overtook Staples as the industry leader in 1993. He urged young entrepreneurs to find growing markets in which they could distinguish their new ventures, but he also urged them to learn people skills and management fundamentals, like motivating their employees, from a well-run company. “There are the rare birds like Bill Gates who have the talent to succeed without experience,” he told Inc. magazine last year. “But they’re like the guys who go straight to the N.B.A. out of high school. Works for some, but for the vast majority, it doesn’t.”

Staples
Office Supplies
Obituary
Thomas G Stemberg


Seahawks Pick Up Road Win

Abstract: Russell Wilson threw three touchdown passes, Steven Hauschka kicked two field goals, Marshawn Lynch scored on a 2-yard run, and the Seattle Seahawks beat the host Arizona Cardinals, 34-22, on Thursday night. The Cardinals (3-4) used a second-quarter rally to close their gap to 17-10 at halftime, but the Seahawks (6-1) started to pull away in the third quarter. After Arizona’s Jay Feely kicked his second field goal, from 52 yards, Seattle scored on a 1-yard pass from Wilson to Kellen Davis. Brandon Browner had an interception on Arizona’s next drive, stepping in front of Michael Floyd, and he returned it 49 yards to the Arizona 1. That set up Lynch’s touchdown, which put Seattle ahead by 31-13. The Cardinals sacked Wilson for a fumble deep in Arizona’s end for the second time late in the third quarter, but they had to settle for another field goal by Feely in the fourth. Hauschka matched that one to put Seattle ahead, 34-16. Arizona then scored on an 8-yard pass from Carson Palmer to Jaron Brown with 4 minutes 40 seconds remaining but failed to complete a pass for a 2-point conversion. Seattle dominated Arizona in the teams’ last meeting, in 2012, and picked up where it left off, with Wilson hitting Sidney Rice on a 31-yard touchdown pass and connecting with tight end Zach Miller on a diving 15-yard score in the back of the end zone in the second quarter. Arizona finally gained some momentum after Wilson was stuffed on a fourth-and-1 near midfield by Calais Campbell, who was back after being carted off the field with a next injury against San Francisco last week. Feely capped the ensuing drive with a 49-yard field goal. Two plays later, a Wilson fumble was recovered by Campbell at Seattle’s 3. Rashard Mendenhall then scored through a huge hole off right tackle for the Cardinals. A tight road game was nothing new for the Seahawks. Seattle has won 11 straight games at home, but its games have been a little tougher on the road. KEENUM TO MAKE DEBUT Case Keenum, who has not played in a meaningful game since January 2012, when he was in college, will start at quarterback Sunday for the Houston Texans in place of Matt Schaub, who has injuries to his right ankle and foot. In his first appearance in an N.F.L. regular-season game, Keenum will face the rugged defense of the undefeated Kansas City Chiefs at Arrowhead Stadium. He will try to help Houston (2-4) snap a four-game losing streak. “We’re struggling, and we’re looking for a spark,” Coach Gary Kubiak said. PETERSON BACK AFTER FUNERAL Adrian Peterson rejoined the Minnesota Vikings after attending the funeral for his 2-year-old son, describing the situation as devastating. Peterson was in Sioux Falls, S.D., on Wednesday for the private service for the boy, Tyrese Robert Ruffin, who died last week in what the authorities have called a case of child abuse. Peterson said that he did not know the child was his until about two months ago. Peterson saw Tyrese for the first time when he visited the boy in the hospital last Thursday. Tyrese died the next day, after the arrest of a man the mother was dating, Joseph Patterson, 27, who was being held on charges of aggravated assault and aggravated battery in the case. Peterson plans to play Monday night against the Giants.

Seahawks
Arizona Cardinals
Case Keenum
Houston Texans
Adrian Peterson
Minnesota Vikings
Football
Michael Vick
Philadelphia Eagles


Kosmos Says It Sold Ghana Oil Stake to Exxon Mobil

Abstract: Kosmos Energy, an oil explorer backed by private equity firms, confirmed on Monday that it had agreed to sell assets in Ghana to the Exxon Mobil Corporation . Greg Dunlevy, the chief financial officer of Kosmos, confirmed the agreement. He declined to disclose the price, but a person familiar with the matter said last week that the price was $4 billion. The sale requires the approval of Ghana’s government, whose state oil company said in July that it was interested in buying the assets. They include Kosmos’s 23.49 percent stake in the Jubilee oil field off the coast of Ghana, as well as its other assets in the West African nation. Ghana is set to become an oil exporter when Jubilee begins producing in late 2010. The Jubilee field may hold 1.8 billion barrels of oil and will produce 120,000 barrels of crude a day, according to Tullow Oil of London.

Ghana
Oil (Petroleum) and Gasoline
Offshore Exploration and Installations
Exxon Mobil Corp


Rachel Alexandra Returns to Churchill Downs in Search of Her Magic

Abstract: LOUISVILLE, Ky. — A year ago Friday, a buzz built throughout the afternoon about an extraordinary filly that was destined to do something spectacular in the Kentucky Oaks. Her name was Rachel Alexandra , and for weeks she had produced workouts that were both ethereal and supersonic and had put to shame the colts getting ready for the Kentucky Derby . And when the gates sprang open for the Oaks, a crowd of 104,867 barely caught its breath as Rachel Alexandra roared to a record 20 ¼-length victory. A star was not exactly born at that moment; after all, it was her fourth victory in a row. But a queen was given a proper coronation. Three hundred and sixty-four days later, Rachel Alexandra, now 4, remains the most compelling horse on the grounds at Churchill Downs, even with the 136th Derby about to be run. From that Oaks triumph, Rachel Alexandra went on to stamp herself as a superstar with four victories that were as momentous as they were stirring to behold. She beat the Kentucky Derby winner, Mine That Bird , in the Preakness Stakes two weeks after the Derby, then ran away from two other fillies in June in the Mother Goose Stakes with a 19 ¼-length victory that broke a record for that race set by the great Ruffian. In August, Rachel Alexandra whipped the colts again in the Haskell Invitational . In September, she turned back older male horses in the Woodward Stakes to end one of the most imaginative campaigns in modern thoroughbred history. It earned her Horse of the Year honors. “It was an arc of beauty,” her co-owner Jess Jackson said. But perhaps it was a costly one. In the sixth race here Friday, Rachel Alexandra will try to conjure her magic once more in the Grade II La Troienne Stakes . It will be her second start of the year, and among her five rivals is a mare named Zardana, who beat Rachel Alexandra by three-quarters of a length in the New Orleans Ladies Stakes last month at the Fair Grounds. It wasn’t so much that Rachel Alexandra lost her first race in 17 months, but it was how she lost it. When Zardana roared up to her in the stretch, Rachel Alexandra did not have that extra gear that last year took her into overdrive as she dared any rival to challenge her. That unsettling moment has raised a pair of questions that may well be answered in the La Troienne: Did Rachel Alexandra do too much last year? And can she ever return to the otherworldly form she held over eight flawless races in 2009? “Sure, I have a sliver of doubt over whether she can duplicate a year that I’m not sure any other horse has ever had,” her trainer, Steve Asmussen, said. Both Jackson and Asmussen take blame for the way Rachel Alexandra began training this year. After the undefeated mare Zenyatta dismantled the best male horses in the world in the Breeders’ Cup Classic last November, there was a clamoring for the two of them to finally meet on the track. Two months later, Oaklawn Park in Arkansas offered a $5 million purse if Rachel Alexandra and Zenyatta both showed up for the Apple Blossom Handicap in early April. Jackson accepted, and Rachel Alexandra’s training was pushed into high gear. She got in seven timed workouts, but Asmussen said he was unhappy with all of them. “We tried to pick the race for the horse rather than let her tell us when she was ready to run,” he said. After Zardana ran by Rachel in the Ladies Stakes, the filly’s camp became even more disheartened when she turned in two workouts that Asmussen kindly describes as subpar. They decided Rachel Alexandra needed a change of venue and brought her here to the racetrack where she has won three of six starts, including that romp in the Oaks . Almost immediately, she perked up, dragging her exercise rider Dominic Terry to the track each day like an old soul returning to her corner of heaven. “She’s back,” said the Hall of Fame trainer Bob Baffert , who has watched Rachel Alexandra turn in four timed workouts in recent weeks, each better than the last. “It was just a matter of fitness, and horses can sense stress, and she knew she was under pressure.” Jackson pleads guilty of trying to do too much with Rachel Alexandra too soon this year. He is confident she will run well in the La Troienne, but says she is perhaps two or three starts from her top form. “We need to run her into top shape,” he said. “And what we worry about is that she’s such a competitor, so eager to run, that she can push herself beyond her level of fitness. We’re a team here — Steve and his barn and me and Calvin Borel,” a reference to her jockey. “But Rachel is part of that team, too,” Jackson added, “and she has something to say about what we do. We need to listen to her.” Jackson will not concede that last year’s campaign might have been too taxing for Rachel Alexandra, especially her final race in the Woodward at Saratoga, where Borel went to the whip liberally in the stretch to withstand a late charge from Macho Again. Jackson did say, however, that this year’s campaign will be managed more like that of Zenyatta, in the hope the two could meet here in the Breeders’ Cup Classic toward the end of the year . Zenyatta, who is 6, has averaged about five races a year over a three-year span to reach an undefeated career mark of 16-0. Rachel Alexandra, by comparison, has run 15 times in two years. So no matter what happens in the La Troienne, Rachel Alexandra will race less this year and be rested for longer periods. As for last year, Jackson says it is in the books and there is no reason to look back. “I didn’t overwork her,” he said. “She was in peak condition and up to everything we threw her way and she handled it beautifully. No regrets.”

Kentucky Derby
Oaklawn Park
Rachel Alexandra (Race Horse)
Horse Racing
Churchill Downs Incorporated
Baffert Bob
Asmussen Steve


On Wall Street, the Rising Cost of High-Speed Trading

Abstract: For several years, the Wall Street wizards who built a faster, more fragmented stock market justified their creation by pointing to the benefits it yielded for investors in the form of lower trading costs. But as the speed and complexity of the markets have continued to change at a rapid pace — with trade times now measured in millionths of a second — a growing number of studies and market participants suggest that those benefits to investors have stalled or even started to reverse. Research from the broker Abel/Noser indicates that the total cost for an investor to get into and out of a single share of stock fell by more than half between 2000 and 2010, to 3.5 cents. Since then, though, the cost has leveled off and then ticked up in the most recent quarter to 3.8 cents, confirming a trend that has also been visible in recent data from Credit Suisse Trading Strategy and from Celent, a consulting firm specializing in financial markets. The advantages of the nation’s increasingly high-speed stock market are under the microscope after a number of recent trading malfunctions underscored the risks and instability that have come with the rapid changes. This month, one of Wall Street’s most important trading firms, Knight Capital , lost $440 million in 45 minutes after installing faulty software designed to keep up with an evolving market. As the battle to introduce more sophisticated technology continues, raising the specter of more problems like Knight’s, the diminishing returns flowing back to investors are making even longtime proponents of innovation question whether the competition to make the market faster and more efficient is now doing more harm than good. “They’ve reached the point where the competition is measured in microseconds and there are essentially no benefits to the public at that level,” said Lawrence E. Harris, the former chief economist at the Securities and Exchange Commission , and now a professor at the University of Southern California . High-speed trading firms have thrived in the computerized markets and now account for more than half of all stock trading, up from 26 percent in 2006, according to the Tabb Group, a financial markets research firm. But even many of them acknowledge that they are engaged in an arms race that is delivering diminishing returns. Manoj Narang, the founder of Tradeworx, said that the competition had become “a tax ” on computerized trading firms like his. Mr. Narang says he thinks that his competitors are dedicating fewer resources to the race as they see there is little more to be gained. But Mr. Narang said that investors had already enjoyed enormous benefits from the market’s increasing sophistication and were likely to see more in the future in ways that might not be immediately obvious. “The march of technology does not happen one step forward every year,” Mr. Narang said. The concerns about an evolving market have been around since the invention of the telegraph allowed cross-continental trading. But they entered another level with a series of regulatory changes beginning in 1998 that opened the market to computerized trading and new exchanges. When the so-called specialists on the floor of the New York Stock Exchange had to compete with computers, they had to lower their prices to stay in business, and the cost of trading for investors immediately went down. Technology also facilitated a sharp jump in the number of shares traded on a daily basis — a concept known in the industry as liquidity — making it easier for mutual funds to get in and out of stocks. Even the harshest critics of the current system say that many of the developments over the last two decades came with advantages for wide parts of the investing community. “No one is saying that we go back to the floor specialists,” said Clive Williams, the head of stock trading at T. Rowe Price Group . But the pace of innovation has not slowed. The new software that Knight rolled out so disastrously was only the most obvious sign of the feverish competition that is continuing to reshape the markets. Trading firms are constantly rewriting their software to keep up with the evolving rules of the nation’s stock exchanges. The exchanges, in turn, are making changes to the rules and systems to keep up with the dozens of unorthodox trading platforms that have sprung up as a result of the regulatory changes. All the industry players are also racing to update their physical infrastructure. The exchanges are consolidating their servers in data warehouses run by companies like Equinix so that the cables between them can be as short as possible and the trade data can travel faster. For trades that have to move between the financial centers of Chicago and New York, some firms have found that data moves too slowly through fiber optic cables. In response, several companies are currently developing networks to transmit data by microwave. The length of time that it takes to execute a trade on the New York Stock Exchange’s most popular platform has dropped from 3.2 seconds to 48 milliseconds, according to Celent. There have been obvious beneficiaries of these developments. There are the high-speed trading firms, which use fast data connections to detect tiny differences between stocks on different exchanges and can act much faster than long-term investors on market-moving news. The companies producing the cables and computers have also made profits, and the traditional exchanges have made more money by selling their own trading technology. But the risks of making such frequent changes have become increasingly evident. Before Knight’s problem, the third-largest exchange, BATS Global Markets, gave investors a jolt in March when new software for bringing companies public failed on the day BATS took its own stock public. When problems do occur they can spread more quickly, as they did during the so-called flash crash of 2010. These perils have been one factor scaring investors away from American stocks. They have also been put off by a market that has delivered almost no returns over the last decade because of asset bubbles and instability in the global economy. When attention has turned to the risks of the computerized market, the new trading sites and high-speed trading firms have managed to fend off critics by pointing to benefits that long-term investors have derived from the sophisticated markets. One of the most popular ways to gauge how investors are doing is the difference between the price at which a stock can be bought and sold at a given moment — the so-called bid-ask spread. When this goes down, day traders, mutual funds and other institutional investors pay less to move in and out of stocks. Credit Suisse Trading Strategy has tracked a long decline in the spreads paid on American stocks, except in periods of volatile trading, when spreads tend to temporarily rise. Several reasons have been given for the declining spreads, but much of the credit has been given to the competition between exchanges for customers, and the competition between high-speed trading firms to offer the best price. In recent months, however, Credit Suisse has found that spreads have been rising even under calm trading conditions. Studies of transaction costs, like the one conducted by Abel/Noser, incorporate both the bid-ask spread and the commission charged by brokers. Over time, these have generally moved down in tandem but they have leveled off recently. Analysts have only just begun to consider why these costs to investors have stopped going down, and do not have clear answers. Terrence Hendershott, a professor at the University of California, Berkeley , said he had been an advocate for technological innovation in the past, but had begun to wonder if the continuing battle for technological superiority had become too much. “You’ve got arguably too many people, in too small a space, and they just keep spending enormous amounts of money,” Professor Hendershott said. “Can I convince myself that we are really seeing a lot of benefits? No.”

BATS Global Markets
High Frequency Trading Flash Orders
Regulation and Deregulation
Knight Capital Group
NYSE
Stocks and Bonds


‘Brexit’ Talks Could Stretch 10 Years, British Official Warns

Abstract: LONDON — Struck off the guest list for dinner at a European Union summit, Britain’s prime minister, Theresa May, faced a second embarrassment on Thursday, over warnings that trade talks on quitting the bloc could last a decade, and even then might fail. Despite the June 23 referendum decision to leave the European Union, Britain remains a full member until the end of negotiations on British exit, known as Brexit, which Mrs. May aims to complete by the spring of 2019. Britain’s ambiguous, and increasingly isolated, position was underscored by the format for the gathering in Brussels on Thursday in which the other 27 leaders were to debate their own strategy for Brexit over dinner — and without Mrs. May. The awkwardness Mrs. May faced when she was politely asked to leave the room was compounded by a leaked warning from her own top aide in Brussels, highlighting the mind-numbing complexity of undoing four decades of European integration. According to the BBC, the advice, given to ministers in October by Ivan Rogers, Britain’s ambassador to the European Union, suggested that completing talks on a new trade relationship with the bloc could take 10 years — and even then might not survive a process of ratification by each of the 27 other nations. Mrs. May’s office did not deny the substance of the report, but said that the ambassador was reflecting the views of other member countries, not his own assessment of the situation. Nevertheless, it presents a stark contrast to some British assertions that a new relationship could be struck within the two-year timetable envisaged under the formal process for withdrawal, which Mrs. May intends to begin by the end of March. Even this timetable may be optimistic, because Michel Barnier, one of the European Union’s lead negotiators, has said that in reality, a deal would have to be done within 18 months to allow time for ratification. In the meantime, Britons remain fiercely divided over Brexit, with supporters encouraged by the fact that the economy has so far not suffered the dire fate predicted by some ahead of the referendum. Their opponents say the negative effects will become visible next year, after being delayed by the post-referendum stimulus injected into the economy by the Bank of England and a competitive edge gained by the depreciation of the pound sterling. While some of those who favor Brexit fret that they could be cheated of their referendum victory, many businesses worry about the apparent lack of a coherent government strategy, almost six months after the referendum. Their big fear is that two years of negotiation will fail to yield a trade deal, leading to a “cliff edge” plan in which import and export tariffs are applied with little time to prepare. On Wednesday David Davis, the minister responsible for negotiating British exit, suggested that a transitional arrangement might be possible to overcome the risk of such economic disruption, providing that the broad outlines of the final deal are settled by the end of the two-year period. “If you build a bridge, you need to have both sides established before you build the bridge,” he told lawmakers, while adding that it was “perfectly possible to know what the end game will be in two years.” Alongside the chancellor of the Exchequer, Philip Hammond, Mr. Davis is emerging as a more pragmatic force in the internal British cabinet discussions, for example, keeping open the option that Britain might be willing to continue making some budget contributions to the bloc after Brexit, in exchange for privileges. More surprisingly, Mr. Davis also referred to the possibility that Britain might, legally, be able to revoke its decision to quit the European Union, once it had ignited exit talks under Article 50 of the European Union’s treaty — though he added that this was not something he anticipated. Until now, the government has argued that once started, the process could not be reversed. Inside the British government, civil servants are working frantically to assess the potential economic impact of Brexit on different sectors of the economy, as their political masters struggle to assemble a strategy for Brexit talks. So far Britain has not said formally that it wants to leave the European Union’s customs union, which provides for tariff-free trade, or its single market, which removes non-tariff barriers, and Mrs. May argues that there need be no “binary choice” between being on the inside or the outside. Last week the government promised that it would present its outline plan for Brexit to lawmakers before the exit negotiations are triggered. But on Wednesday Mr. Davis said that this would not emerge before February. Moreover, it remains unclear whether this plan will yield real detail, or merely present a wishful opening bid that suggests Britain could jettison the things it dislikes about the European Union, such as the free movement of people, while keeping free trade in goods and services, for important sectors at least. The foreign secretary, Boris Johnson, once articulated this view, arguing that “my policy on cake is pro having it and pro eating it.” That notion has been rejected by a variety of European politicians, including Mr. Barnier and the German chancellor, Angela Merkel, both of whom have warned that Britain will not be allowed to cherry pick. There were some early signs of discord Thursday on the European Union side, with the European Parliament’s main negotiator on Brexit, Guy Verhofstadt, threatening to start parallel talks with Britain unless his institution is given a greater role in the Brexit talks. The European Parliament must approve a final deal but, in a Twitter post , Mr. Verhofstadt, a former prime minister of Belgium, accused the member governments of planning to “sideline” his fellow European lawmakers, adding, “If they want us to talk straight to British authorities, they’ve got it.” On the substance of the negotiations, the national governments of the 27 are trying to close ranks. In June, soon after the referendum, they declared that any agreement concluded with Britain “will have to be based on a balance of rights and obligations,” and that “access to the single market requires acceptance of all four freedoms,” which include the free movement of people as well as goods, capital and services. A similar refrain was expected to emerge Thursday from the informal dinner meeting of the 27. That sets the stage for the difficult negotiations predicted by Mr. Rogers. On Thursday his former colleague, Gus O’Donnell, once Britain’s most senior civil servant, and now a member of the House of Lords, supported that assessment, telling the BBC that it would take “at least five years,” to reach a final deal. Asked if he agreed that a transitional arrangement would be needed to smooth Britain’s exit from the bloc, Mr. O’Donnell replied: “I think that’s a statement of the completely, blindingly, obvious.”

Brexit
Theresa May
Referendum
House of Lords Great Britain
Legislature
Great Britain
EU


Wintry Blast Chills Sales of Houses

Abstract: WASHINGTON — Sales of new single-family homes fell more than expected in December, but lean inventories and steady price gains suggested the housing market recovery remained intact. Economists did not appear to be too concerned about the second monthly decline in home sales, attributing it to frigid weather in parts of the United States. Home sales for the full year hit their highest level since 2008. “It’s cold out there for the economy,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ. “The drop in new-home sales is not a sign the economy at large is starting to slow in a worrisome manner.” The Commerce Department reported on Monday that new-home sales fell 7 percent, to a seasonally adjusted annual rate of 414,000 units. Sales were at a 445,000-unit pace in November and economists had expected them to slow to only a 457,000-unit rate in December. Apart from the bitterly cold weather, last month’s decline in sales was most likely a continuation of a slowdown after October’s outsize 14.9 percent increase. Sales in the Northeast, which was hard hit by cold weather, tumbled 36.4 percent to their slowest pace since June 2012. Home sales are usually weak during the winter, but a cold snap last month could have exaggerated the scale of the slowdown. New-home sales stumbled in the summer after mortgage rates jumped, but economists said a lack of supply could also be curbing activity. “There has been some pause in sales, some of that may be supply-related rather than demand-related,” said Samuel Coffin, an economist at UBS. “If you look at the inventory data for new and existing homes, they don’t look consistent with a big falloff in demand.” Last month, the supply of houses on the market fell 2.8 percent to 171,000 units. That was the lowest since July. At December’s sales pace it would take five months to clear the supply of houses on the market. That was up from 4.7 months in November. A supply of six months is considered healthy. Housing is expected to have contributed significantly to economic growth last year, through residential investment and rising home prices that have increased the net worth of households, allowing for greater discretionary spending. “We expect new home sales activity should pick up in the coming year along with improving economic growth,” said Mark Vitner, a senior economist at Wells Fargo Securities. For all of 2013, a total of 428,000 new single family homes were sold, a 16.4 percent increase from 2012. The median price of a new home last month rose 4.6 percent from December 2012. For the year as a whole, prices were up 8.4 percent, the most since 2005.


An Online Shift in China Muffles an Open Forum

Abstract: BEIJING — For the past few years, social media in China has been dominated by the Twitter-like Sina Weibo, a microblogging service that created an online sphere of freewheeling public debate, incubating social change and at times even holding politicians accountable in a country where traditional media outlets are severely constrained. But in recent months, Weibo has been eclipsed by the Facebook-like WeChat, which allows instant messaging within self-selected circles of followers. The shift from public to semiprivate communication, accelerated by a government crackdown on Weibo, has fundamentally reordered the social media landscape for the country’s 600 million Internet users, curbing what had been modern China’s most open public forum. “This is a new phase for social media in China,” said Hu Yong, a journalism professor at Peking University. “It is the decline of the first large-scale forum for information in China and the rise of something more narrowly focused.” WeChat has its advantages and its defenders. It is less censored than Weibo, and some users say it allows them to speak more freely, knowing that their conversations are private. Many users relish its added functions, including voice messaging. In May, though, the government announced that WeChat would be more heavily monitored. Saying that instant messaging services were being used to spread “violence, terrorism and pornography,” the agency charged with policing the Internet said it would “firmly fight infiltration from hostile forces at home and abroad,” according to a government statement. In its heyday, Weibo promised much more. It came to prominence in 2011 after a high-speed rail crash killed 40 people. Weibo users detailed the mayhem and government shortcomings that led to the accident. It was a signal moment in the Internet’s coming of age in China, a reminder of how the medium could challenge even a formidable authoritarian government. Weibo is still important. Boundary-pushing news and commentaries are still more easily found there than in the more tightly controlled world of government newspapers and magazines. It also remains popular for following celebrities and gossip. It reported in March that it had 66 million daily users, up 37 percent over a year earlier. But government figures show that the overall number of microblog users, including those using Weibo and services from other providers, fell by 9 percent last year, with many migrating to WeChat. That shift, along with a general decline in technology stocks, contributed to a disappointing New York stock market listing in April for Weibo, which raised $286 million instead of the anticipated $500 million . “It’s far from what it used to be,” said He Weifang, a prominent lawyer and onetime heavy blogger on Weibo with more than a million followers. “You can still find facts on Weibo, or news reports, but the comments aren’t as interesting or deep.” One reason is the government crackdown on the so-called Big V accounts — prominent commenters, with verified accounts, who often had millions of followers. After hundreds were detained, most stopped posting on Weibo. Others quit because of the sharp tone of commentary on Weibo, which often devolved into nasty, ad hominem attacks. Some grew tired of the dizzying list of banned terms and the cat-and-mouse games with censors to evade them. For example, “June 4,” the date of the 1989 Tiananmen Square crackdown, was banned, so creative minds came up with “May 35” (which would work out to June 4), until that was also banned. Such wordplay amused hard-core users but confused ordinary readers. Image Li Bo uses WeChat to rally opposition to damaging infrastructure projects. A chat account QR code is reflected in his glasses. Credit Sim Chi Yin for The New York Times WeChat seized on the frustration. Its parent company, Tencent, claims 355 million active monthly users . The company does not make public the number of daily users, making a direct comparison to Weibo difficult. But few people disagree that WeChat is now more popular. “June 4” is banned on WeChat too, but other terms routinely blocked on microblogs, such as the name of the former security czar Zhou Yongkang, are allowed. Most observers ascribe this leniency to the fact that WeChat messages have a limited readership. More important, activists say, WeChat allows them to dig deeper into issues with like-minded people. The veteran environmentalist Li Bo has used WeChat for more than two years to rally opposition to damaging infrastructure projects, such as a controversial plan to dam the Nu River . Mr. Li is a participant in one WeChat group called Environmental Policy Advocacy that has more than 300 members, including, he said, open-minded government officials. Although officials rarely participate, they see the traffic and occasionally invite members to their offices to chat about policies. Some groups are smaller and narrower, such as one focused on a county in eastern China damaged by pollution. Others are task-specific, such as small committees for various campaigns and projects. These groups can be powerful as long as they are not too overtly political. In late April, factory workers used WeChat to organize strikes against a Taiwanese company that had failed to pay into a retirement fund. Around the same time, however, churchgoers trying to use WeChat to prevent their church from being torn down found that their WeChat circles were being used to track down opponents of the government’s action. A broader problem for activists, however, is that WeChat can become an echo chamber. When a charity for coal miners was trying to raise $500 this year to buy oxygen pumps for a miner dying of black lung disease, its initial appeal fell flat. On a hunch, an employee, Xue Yinhu, appealed to followers on WeChat and raised the money in an hour. “These people know you better, so they’re more willing to support you,” he said. “But sometimes you’re talking only to the same people.” WeChat also has built-in constraints that hobble its ability to replicate Weibo’s public sphere. WeChat allows the creation of public accounts that anyone can follow, but limits posts to one a day. In addition, access to public accounts is not possible on cellphones, making it more difficult, for instance, to launch an incriminating photo of a public official into the blogosphere. Comments are also deleted after a few days, making long-term discussions challenging and erasing a historical record. The government also monitors these accounts and recently deleted some covering social news and politics. Tencent declined to comment on how it decided which functions to offer users. Still, WeChat remains a powerful tool for activists, even if Weibo’s promise of an open online society has been frustrated. Hu Jia, who has worked on environmental and public health causes for 15 years, said that the advent of social media, despite its limitations, had produced a better-informed society. “Weibo and WeChat are gifts from God,” he said. “Despite all the government surveillance, the benefits we get are even greater for people trying to organize society.”

China
Social Media
Sina Weibo
Computers and the Internet
Tech Industry
Censorship


South Korean President Visits Disputed Islets

Abstract: SEOUL, South Korea — President Lee Myung-bak of South Korea flew to a set of islets locked in a territorial dispute with Japan on Friday, dismissing protests from Tokyo and making a trip that was bound to heighten diplomatic tensions between Washington’s two key Asian allies. Japan called Mr. Lee’s visit “unacceptable” and recalled its ambassador from Seoul in protest, Prime Minister Yoshihiko Noda told reporters in Tokyo. Adding drama to the simmering historical hostility that Mr. Lee’s surprise trip magnified, South Korea and Japan were set to clash in London on Friday for the Olympic bronze medal in men’s soccer, a game to be watched by millions of people in both countries. South Korea won, 2-0. Although South Korean cabinet ministers and national legislators had previously visited the barely inhabitable volcanic outcroppings in the sea between Korea and Japan, Mr. Lee was the first South Korean president to travel there to highlight his country’s territorial control. A squadron of armed South Korean police officers have manned the islets, called Dokdo in Korea and Takeshima in Japan, since the 1950s. An elderly fishing couple also lives there with government support. “Dokdo is truly our territory, and it’s worth defending with our lives,” Mr. Lee told the police officers, according to the national news agency Yonhap, whose reporter accompanied the presidential entourage. With his popularity plummeting amid corruption scandals implicating his associates, Mr. Lee is badly in need of a boost to his political leverage. Opposition politicians were quick to accuse him of making the unprecedented presidential trip to tap South Koreans’ deep-seated nationalistic sentiments against Japan for gains in domestic politics. Although Mr. Lee is banned by law from seeking re-election in the presidential vote scheduled for December, his governing party feared being labeled “pro-Japanese” so much that it forced his government in June to postpone the signing of an agreement to share classified military data with its rival. The dispute over the islets remains one of the most contentious unresolved issues from Japan’s often brutal colonial rule of the Korean Peninsula from 1910 until its World War II defeat in 1945. Mr. Lee made Friday’s trip by helicopter, staying 70 minutes on the main islet and sharing pizza and chicken with the police guards, Yonhap reported. His trip came after Japan angered South Koreans by reconfirming its territorial claim to the islets in its new defense white paper published late last month. Mr. Lee is scheduled to deliver his last major national speech as president on Wednesday, which South Korea celebrates as a major national holiday observing Japan’s World War II surrender and Korea’s liberation. The islets are surrounded by rich fishing grounds and natural gas deposits. South Koreans also hold deep emotional attachment to the rocks. To them, Japan’s territorial claim epitomizes Japan’s early 20th-century aggression and what they consider its refusal to atone for its colonial occupation of Korea, during which Koreans were banned from using their Korean names and language. The two countries are also divided over compensation for Korean women who historians said were forced or cheated into working as sex slaves for the Japanese military during World War II. In July, a South Korean man rammed his light truck into the main gate of the Japanese Embassy in Seoul. Mr. Lee’s government said his trip was intended to counter Japan’s increasingly pronounced campaign to highlight its territorial claim to the islets. Last year, three Japanese lawmakers who wanted to visit the islets to advertise their country’s claim were denied entry to South Korea. “We encourage good relations between both of our allies,” said Patrick Ventrell, acting deputy spokesman of the United States State Department.

South Korea
Lee Myung-bak
Japan
Dokdo Islands


California Scrambles to Prepare for Furloughs

Abstract: SACRAMENTO (AP) — State agencies scrambled Thursday to institute the first employee furloughs in California history, ordered by Gov. Arnold Schwarzenegger to save money in the face of a budget crisis. Many agencies tried to determine whether some employees might be working on Friday, the first day of the scheduled two-a-month furloughs. Others had not issued notices on their Web sites about their closings. The office of Mr. Schwarzenegger, a Republican, said about 90 percent of the state’s 238,000 employees were supposed to be off Friday. A Sacramento County Superior Court judge upheld the governor’s executive order last week. But on Thursday, the same judge said his previous ruling did not apply to employees of state constitutional offices, like the attorney general and treasurer. That decision came in response to an inquiry from the state controller, John Chiang, who wanted to clarify whether Mr. Schwarzenegger had the authority to force the furloughs on elected officials. The judge, Patrick Marlette, said his previous order did not address that question because the elected officials were not party to the lawsuit. All of the seven constitutional officers, other than the governor’s office, have said they will not comply with the furlough order. Mr. Schwarzenegger’s office has estimated the furloughs will save the state $1.4 billion through June 2010. For employees, the furloughs will amount to a 9.2 percent pay cut. Public safety and some other employees were exempt. Some workers will be on the job on Friday but will be required to take unpaid days off in the future.

California
furloughs
Government Employees
Layoffs and Job Reductions
Budgets and Budgeting
Schwarzenegger Arnold


Wild Hive, a Farm Where Grain Is Milled

Abstract: DON LEWIS, the owner of Wild Hive Farm , rolled open a door to reveal his milling machinery and shoved a somewhat aggressive goat named Annabelle aside. Inside stood a modern Amish-style stone-burr mill, with 20-inch pink granite grinding stones. “It’s basically the same machine that was used 100 years ago, with a few more bells and whistles,” he said. Mr. Lewis, a former professional beekeeper, has slowly built a modest empire of whole grains and organic flours amid the waves of grain in the rolling terrain of Dutchess County, in the mid-Hudson Valley. A rambling barn, still in the midst of renovations, marks a major expansion of his small-batch milling operation in Clinton Corners (“We’re about to bloom,” he said). Mr. Lewis is also planning a nonprofit program to educate the public about sustainable agriculture. His operation, properly called the Wild Hive Farm Community Grain Project, also includes a bakery, a store and a cafe showcasing his goods. Hard red spring wheat, soft white winter wheat, rye, spelt, triticale (a hybrid of wheat and rye), oats and corn are all grown nearby, with the bulk coming from Lightning Tree Farms, 10 miles away in Millbrook. Mr. Lewis also sells his neatly packaged goods at regional farmers’ markets and specialty food shops; a few restaurants devoted to local sources are loyal customers. To hear Mr. Lewis describe the scope of his business brings to mind the children’s story of the Little Red Hen, who could find no volunteers to help plant a grain of wheat — except that Mr. Lewis has more help than the hen did. “Community is very important to me,” said Mr. Lewis, who provides jobs to farmers, millers, carpenters, welders, drivers, salespeople, bakers, cooks, waitresses and dishwashers. “The best way to promote community is through food, and a meeting place.” The Wild Hive Store and Café, whose covered porch and banging screen door are reminders of the general store built on the site in 1901, is just such a place. On a recent Saturday morning, locals and weekenders happily tucked into cheesy yellow grits and praline challah French toast at tables draped with mismatched tablecloths. A refrigerator case was crowded with local bounty: milk in glass bottles, cheeses, radishes and mint. Cinnamon rolls, strawberry scones and raisin-walnut bread beckoned at the bakery counter. In the food world, “farm to table” is sometimes something of a ruse, but at Wild Hive, the commitment to the philosophy shows. The mill, of course, comes between the farm and the table. Before Mr. Lewis got his hands on it, the dairy barn and mill had been converted into a luxury home — with marble baths, hardwood floors and stainless-steel kitchen appliances — by a speculator who had hoped to subdivide the surrounding paddocks and pastures. “He went bust,” Mr. Lewis said matter-of-factly. A nearby landowner acquired the parcel, secured a conservation easement and agreed to lease the acreage to Mr. Lewis. That the land will revert to agricultural use suits Mr. Lewis just fine. Mr. Lewis plans to add cows and pigs to the chickens and goats that he grazes there now. The expansion, which Mr. Lewis hopes will be finished in the fall, includes rooms for wheat storage, dehulling, cleaning, grinding, sifting, packing and shipping (the site of the future loading dock is now a favorite hangout for Mr. Lewis’s goat herd). It also includes two 16-inch mills that are standing by, and a new 30-inch mill on its way from North Carolina. For advice on weight distribution and other milling matters, Mr. Lewis and his team of contractors relied on B. W. Dedrick’s book “Practical Milling,” first published in 1924. Mr. Lewis expects to double or triple his output, to 100 or 150 tons of grain, up from 50, and he is using his persuasive powers on local dairy farmers who, he hopes, will see the wisdom and profitability in cultivating some grain for human rather than bovine consumption. “This isn’t intended to grow into a giant processing center,” he said. “I’m expecting it to be more of an example of what can be done. I’m doing it on a shoestring — that’s how I do things — but it will be efficient.” The sleek kitchen and adjoining conference room will be dedicated to educating the public, especially schoolchildren. “Kids will be able to see the process and then bake a batch of biscuits with fresh-milled flour,” Mr. Lewis said. “I sometimes take a little mill to festivals, and when kids catch the grain in their hands, you can see the light bulbs go on. I want people to understand more about farming and where their food comes from, and there’s no better place to start than with children.” Wild Hive’s best-selling product is its all-purpose soft white winter wheat flour. Bran separated from the flour goes into the cafe’s muffins, and to a pastured flock of Cornish cross chickens, a sideline for Mr. Lewis, who was raised on a chicken farm in Orange County. “Bran is a great feed,” he said. “It makes the most beautiful broilers — moderate fat, juicy meat.” If bread flour is Mr. Lewis’s staple, coarse-ground polenta might just be his breakout fare. In recent weeks, the quality of the polenta, made with an old-fashioned variety of open-pollinated corn, has been noted in both the Dining section of The New York Times and “The Food Schmooze,” on Connecticut Public Radio. John Sharp, an owner at the two-month-old Birdsall House , in Peekskill, which uses Wild Hive Farm breads and grains, has discovered the upside of forging relationships with local producers. Mr. Lewis told him that the chef Mario Batali wanted to buy his polenta, Mr. Sharp said in a phone interview. But, he said, Mr. Lewis “said he’d always have enough for me. I was really touched.” At the Valley Restaurant at the Garrison , which has a zeal for local products, the pastry chef, Laura DiGiorno, uses Wild Hive Farm’s polenta to make a dessert called a cheesecake corn dog, a sweet salute to that beloved staple of carnivals and country fairs. “We discovered the polenta at a local farmers’ market,” Ms. DiGiorno said. “It has great texture, great flavor, great everything. I make a New York-style cheesecake in a sheet pan and freeze it, then cut it into rectangles, put it on a stick, dip it in polenta batter and deep-fry it. It sounds crazy, I know, but it tastes amazing, actually.” Her corn dogs are on the menu, just in time for summer, by popular demand.

Grain
Agriculture
Westchester County (NY)