1) Song of the week: "The Times They Are A'changing" by Bob Dylan 
2) Slate/Dear Prudence: Girl, Uninterrupted [Conseils sur la vie sentimentale et la vie tout court : Pourquoi tout le monde s'obstine à corriger les paroles des son interlocuteur ? Comment fêter les noces d'or de mes parents alors que personne ne veut les voir ? Comment me venger de mes voisins qui m'ont dénoncé pour le bruit que font mes animaux ? Tous les hommes sont-ils des nuls ?]
3) Slate/Chatterbox: Donald Rumsfeld's Whopper of the week [Le mensonge de la semaine, cette fois-ci une bonne de Donald Rumsfeld]
4) Slate/Jurisprudence: What's really undermining the sanctity of marriage? [Suite à la décision de la Cour suprême du Massachussetts favorisant le mariage des homosexuels, comment comprendre les propos des opposants qui disent que cela porterait atteinte à la nature sacrée du mariage?]
5) Forbes: Vive Beaujolais Vieux! [Il aime le Beaujolais mais pas le Beaujolais nouveau]
6) The Borowitz Report: Britney Spears face is everywhere [SATIRE: On voit la tête de Britney Spears partout, jusqu'à sur la tête de Christina Aguiliera] 
7) The Star Press: Mooreland man kills wife [Meutre-suicide d'un couple hyper-paumé]
8) The Economist: Mutual funds [Crise dans les fonds d'investissement aux Etats Unis] 
9) The Economist: Executive coaching [Le dernier truc pour les patrons: un coach perso]
10) The Onion: Pointless changes in the office [SATIRE: Discours du patron qui indique qu'il met en place des réformes sans intérêt] 
11) The Washington Post/Miss Manners: Open-and-Shut Case [Conseils sur les bonnes manières : Mes subalternes regardent les dossiers sur mon bureau ; J'en ai marre des profiteurs que j'invite chaque année à Thanksgiving] 

Come gather 'round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You'll be drenched to the bone.
If your time to you
Is worth savin'
Then you better start swimmin'
Or you'll sink like a stone
For the times they are a-changin'.

Come writers and critics
Who prophesize with your pen
And keep your eyes wide
The chance won't come again
And don't speak too soon
For the wheel's still in spin
And there's no tellin' who
That it's namin'.
For the loser now
Will be later to win
For the times they are a-changin'.

Come senators, congressmen
Please heed the call
Don't stand in the doorway
Don't block up the hall
For he that gets hurt
Will be he who has stalled
There's a battle outside
And it is ragin'.
It'll soon shake your windows
And rattle your walls
For the times they are a-changin'.

Come mothers and fathers
Throughout the land
And don't criticize
What you can't understand
Your sons and your daughters
Are beyond your command
Your old road is
Rapidly agin'.
Please get out of the new one
If you can't lend your hand
For the times they are a-changin'.

The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
The order is
Rapidly fadin'.
And the first one now
Will later be last
For the times they are a-changin'.

RETURN TO TOP

Dear Prudence,
When did it become "the norm" to routinely interrupt people in midsentence to correct their pronunciation or grammar? I began noticing this trend in co-workers, even employers and clients, in the mid-'90s. In my generation (born in the late 1940s), I was taught that to interrupt when someone was speaking was extremely rude. If it was necessary to correct a mispronounced name, I was taught to wait for a good opening to do so and to do it politely—and privately, if possible. I would never, ever correct someone's grammar unless it was my own children or grandchildren. I personally think the practice is insulting and humiliating, especially in a business setting. Is this just another sign of our changing and deteriorating culture? Thank you.

—Irked at Being Interrupted 

Dear Irk,
The issue you raise may well be another example of things going to hell in a handbasket. (What IS a handbasket, anyway?) Prudie is inclined to think, nevertheless, that well-raised people of any generation do not barge into someone else's sentence to play English teacher. Prudie agrees with you about correcting only one's nearest and dearest. What is the point, after all, of setting straight a casual acquaintance—particularly while he is talking and with other people present? An occasion comes to mind where, during dinner for four, a Harvard man mispronounced Amherst College (the "h" is silent), and an Amherst man corrected him. When that dinner was over, so was the two men's years-long friendship. The man just could not tolerate being corrected. Whether it had to do with thin skin or pomposity is hard to know. Usually, though, correcting someone is not that perilous. 

—Prudie, uninterruptedly 
-*-*-*-*-*-*-*-*-
Dear Prudie,
My parents' 50th wedding anniversary is coming up, and I am trying to think of something suitable to do to recognize the occasion. One of the problems is that my parents really don't have a very good relationship, and my sister feels that anything other than just a card would be hypocritical. Another problem is that my parents really don't like to do anything but sit around the house, so we don't think they would enjoy a party held somewhere else. The third problem is that many of our relatives (my parents don't have any friends) live a good distance away, and it's doubtful that many of them would make a lengthy trip for anything of this nature ... especially since it's not much fun being around my parents because of the way they treat each other. Any thoughts?

—J.

Dear J,
Ah yes, what to do for the couple who has nothing? No relationship, no interests, no friends. If your folks were big phonies encouraging you and your sister to go through the motions of a celebration, that would be a different story—though of the fairy tale variety. Prudie thinks you are actually lucky not to have to play charades. "Celebrating" a 50-year marriage that is in Chapter 11 could only be painful. Perhaps to mark what is, officially, a milestone, you and your sister could drop off a special dinner. Think of it as a drive-by anniversary party.

—Prudie, consolingly
-*-*-*-*-*-*-*-*-
Hi Prudie,
I have neighbors who have gotten together and formally complained to the city about the noise my dogs and birds make without talking to me first. For the record, my dogs sleep in the house, so there is no night disturbance, and the birds sleep sundown to sunup, so there are no night noises coming from my yard. I have been awakened, however, by these same neighbors' early morning lawn-mowings plus little kids crying and yelling in the backyard. These same people have had parties that kept me up. I have never said anything or called the police because I figure we've all bought our homes and have the right to different life choices, but now I am wondering if I should adopt the "neighborhood policy" and complain anonymously when I am disturbed. Some people say that to do so would be vindictive, but why should I have cops dropping by and leave the complainers who disturb my peace alone? Is that fair?

—Perturbed Neighbor

Dear Pert,
Now Prudie is curious: She is wondering how many dogs you have. And she's also guessing, when you talk about birds in the yard, that you are not referring to Tweetie in a little cage. You write that there is no "night disturbance" caused by man's best friends, but might there be epic howling all day long? Unfortunately, the police do not come because little kids are crying and yelling in the backyard. Ditto lawn mowers. (Rest assured that if audible lawn care were a crime, Prudie would have turned in, by now, roughly 200 folks with leaf-blowers.) Noisy parties and pets at night, yes; howling tots and weed-whackers, no. Alas, your chances of getting even are limited to high-decibel music and highly vocal drunks. The issue of public disturbance is a sticky one. It involves, essentially, two old axioms: "The freedom to swing your arms ends where the other guy's nose begins" versus "A man's home is his castle." Prudie hopes you and your neighbors can work out a solution. A willingness on your part to sort things out might be a productive beginning ... as in you make the overture. 

—Prudie, peacefully
-*-*-*-*-*-*-*-*-
Prudie,
I'm beginning to wonder if there is something wrong with me or if all men just like game-playing. I was married for 17 years, only to find out he was seeing someone behind my back. I tried to work things out but ended up divorcing him. Then, after six months, I began dating someone I trusted. After two years, I caught him in bed with another woman. I hate to be cynical, but what's wrong with this picture? About the only men I can trust, besides male family members, are my animals. 

—Sandra

Dear San,
It is not hard to see how you got into this frame of mind, but two rounders do not a statistical sample make. What happened in your life was an unlucky coincidence. Prudie hopes you will draw on these two demoralizing experiences to examine what attracts you to certain men. As for "what is wrong with this picture?": It is nothing more than the two men who did you dirt. Regarding the issue of trust: To enlarge the number who qualify as honorable, in addition to members of your family or your animals, take time with the next candidate to explore his values and his history. Fidelity is a component of character and maturity. And no, all men are not into cheating or game-playing, as you call it ... just the emotionally damaged ones, or the ones whom Mama ignored. 

—Prudie, hopefully 

RETURN TO TOP

—Defense Secretary Donald Rumsfeld, in a Sept. 25, 2003 interview with Sinclair Broadcasting.
-*-*-*-*-*-*-*-*-*-
Rumsfeld then:
Q: Do you expect the invasion, if it comes, to be welcomed by the majority of the civilian population of Iraq?
A: There's obviously the Shia population in Iraq and the Kurdish population in Iraq have been treated very badly by Saddam Hussein's regime, they represent a large fraction of the total. There is no question but that they would be welcomed. Go back to Afghanistan, the people were in the streets playing music, cheering, flying kites, and doing all the things that the Taliban and the Al-Qaeda would not let them do.

—Defense secretary Donald Rumsfeld, in a Feb. 20, 2003 interview with PBS's NewsHour.
 

RETURN TO TOP

Within nanoseconds of the Massachusetts Supreme Court's declaration that gay marriage is protected by the Constitution came predictions of the end of life as we know it: The president, speaking from London, warned: "Marriage is a sacred institution between a man and a woman. Today's decision of the Massachusetts Supreme Judicial Court violates this important principle." 

"The time is now. If you don't do something about this, then you cannot in 20 years—when you see the American public disintegrating and you see our enemies overtaking us because we have no moral will—you remember that you did nothing," said Sandy Rios, president of the Concerned Women for America, to her 1 million radio listeners. "We must amend the Constitution if we are to stop a tyrannical judiciary from redefining marriage to the point of extinction," Focus on the Family urged in a statement on Tuesday.

Extinction, no less. The institution of marriage—the one that survived Henry VIII, Lorena Bobbitt, Nick Lachey and Jessica Simpson—is suddenly going to become extinct?

Do you want to know what's destroying the sanctity of marriage? Phone messages like the ones we'd get at my old divorce firm in Reno, Nev., left on Saturday mornings and picked up on Monday: "Beeep. Hi? My name is Misty and I think I maybe got married last night. Could someone call me back and tell me if I could get an annulment? I'm at Circus Circus? Room—honey what room is this—oh yeah. Room 407. Thank you. Beeep."

It just doesn't get much more sacred than that. 

Here's my modest request: If you're going to be a crusader for the sanctity of marriage—if you really believe gay marriage will have some vast corrosive, viral impact on marriage as a whole—here's a brief list of other laws and policies far more dangerous to the institution. Go after these first, then pass your constitutional amendment.

1. Divorce
Somewhere between 43 percent and 50 percent of marriages end in divorce. If you believe gay marriage is single-handedly eroding a sacred and ancient institution, you cannot possibly be pro-divorce. That means any legislation passed in recent decades making divorce more readily available—from no-fault statutes to the decline of adultery prosecutions—should also be subject to bans, popular referendum, and constitutional amendment. 

2. Circus Circus
In general, if there is blood in your body and you are over 18, you can get married, so long as you're not in love with your cousin. (Although even that's OK in some states). You can be married to someone you met at the breakfast buffet. Knowing her last name is optional. And you can be married by someone who was McOrdained on the Internet. So before you lobby to ban gay marriage, you might want to work to enact laws limiting the sheer frivolousness of straight marriage. You should be lobbying for an increase in minimum-age requirements, for mandatory counseling pre-marriage, and for statutory waiting periods before marriages (and divorces) can be permitted.

3. Birth Control
The dissenters in the Massachusetts decision are of the opinion that the only purpose of marriage is procreation. They urge that a sound reason for discriminating against gay couples is that there is a legitimate state purpose in ensuring, promoting, and supporting an "optimal social structure for the bearing and raising of children." If you're going to take the position that marriage exists solely to encourage begetting, you need to oppose childlessness by choice, birth control, living together, and marriage for the post-menopausal. In fact, if you're really looking for "optimal" social structures for childrearing, you need to legislate against single parents, poor parents, two-career parents, alcoholic or sick parents, and parents who (like myself) are afraid of the Baby Einstein videos. 

4. Misc.
Here's what's really undermining the sacredness of modern marriage: soap operas, wedding planning, longer work days, cuter secretaries, fights over money, reality TV, low-rise pants, mothers-in-law, boredom, Victoria's Secret catalogs, going to bed mad, the billable hour, that stubborn 7 pounds, the Wiggles, Internet chat rooms, and selfishness. In fact we should start amending the Constitution to deal with the Wiggles immediately.

Here's why marriage will likely survive this week's crushing decision out of Massachusetts: Because despite all the horrors of Section 4, above, human beings want and deserve a soul mate; someone to grow old with, someone who thinks our dopey entry in the New Yorker cartoon competition is hilarious, and someone to help carry the shopping bags. Gay couples have asked the state to explain why such privileges should be denied them and have yet to receive an answer that is credible. 

The decision to make a marriage "sacred" does not belong to the state—if the state were in charge of mandating sacredness in matrimony, we'd have to pave over both Nevada and Jessica Simpson. We make marriage sacred by choosing to treat it that way, one couple at a time. We make marriage a joke by treating it like a two-week jungle safari. There is no evidence that gay couples are any more inclined toward that latter course than supermodels, rock stars, or that poor spineless bald man on Who Wants to Marry My Dad? There's good evidence that most of them will take the commitment very seriously, as do the rest of us. There will be more "sanctity" in marriage when we recognize that people of all orientations can make sacred choices. Good for Massachusetts for recognizing that truth.

RETURN TO TOP

This Thursday is Beaujolais Nouveau day, and I have to admit I have a hard time suppressing a yawn. 

Every year at about this time bistro owners the world over join forces with the Beaujolais industry to bang the drum as loudly as they can to announce with full fanfare that "Le Beaujolais Nouveau Est Arrivé!" 

This must be the second-most successful marketing campaign in wine history, right after the Last Supper, and if it helps my friends in Beaujolais sell a lot of the stuff, good luck to them. It's just that the wine doesn't appeal to me. 

I do, however, drink Beaujolais, just not Nouveau. There is a small but growing number of producers making more substantial, full-bodied wines that couldn't be more different from the light fruity stuff you will see promoted over the next few weeks. 

Chantel Brochier is one of them. "We wanted to break the image of Gamay as an easy wine, very light wine...we wanted to prove that you are able to get complicated more interesting wines," she told me as we sat tasting her wines on the sun-drenched terrace of her beautiful 17th-century Chateau Briante. 

This was her answer to my query as to why she had recently started making a reserve version of her Brouilly, and she went on to explain that about 10% of her land is planted with very old vines that produce lower yields of intensely flavored grapes. Before 1998 these simply went into the generic estate Brouilly, but now she's not only bottling them separately from her regular wine, she's vinifying the wine differently too. 

Since the rise of Nouveau in the 1960s, a unique winemaking procedure has evolved in Beaujolais specifically designed to produce light wine that can be drunk very young. If, however, you start with superior fruit, as Brochier does, then follow more traditional vinification methods, enhanced by a touch of oak aging, you end up with wines of real substance. 

Her Resérve du Chateau de Briante, Brouilly 2000 is my kind of Beaujolais. It has a deep ruby color, and a complexity of flavor that is totally unlike the region's standard-issue wines. A marked minerality that comes from the rocky, blue volcanic soil of Brouilly lends it a distinctive bite, and the use of large old-oak barrels enhances the bright fruit character without overwhelming it. 

The Resérve du Chateau de Briante could easily be mistaken for a village Burgundy in a blind tasting, such is its depth and complexity, and it presents a whole new image of the region--Beaujolais Vieux, perhaps? 
 

FORBES FACT
Although vines have been cultivated in Brouilly since they were planted in the first century B.C. by Roman soldiers, it was not until the late 14th century that wines from the region became distinct from those grown in neighboring northern Burgundy. In the tenth century, though, a Crusader named the Seigneur de May returned from Syria with cuttings from vines he had found in the Holy Land. He planted these near his manor, near the village of Gamay, the name by which the grapes soon became known. Easier to grow than Pinot Noir or Chardonnay, the traditional grapes of the Cote D'Or, the Gamay thrived. In fact it was so hardy and produced more wine with less training that it threatened to usurp lands on which the great grand cru wines of Burgundy were grown. The drawback was that the wine produced from the Gamay was considered inferior to Pinot Noir but was highly favored by the peasants. In 1395 Phillippe the Bold, the Duke of Burgundy, outlawed the Gamay grape, forbidding its cultivation in Burgundy in favor of Pinot Noir, ordering his men to eradicate "the very nasty and very disloyal plant named Gaamez." In Beaujolais, however, the preferred grape remained the Gamay, and its popularity is as great as ever. 
RETURN TO TOP

Pop Tart’s Promo Blitz Hits Fever Pitch

In what industry experts are calling the most aggressive marketing campaign in the history of the music business, pop tart Britney Spears’ face appeared today on the head of fellow chart-topping singer Christina Aguliera.

Ms. Spears, whose face has appeared on magazine covers, billboards, and even city buses to promote her new CD, “In the Zone,” is known for her relentless self-promotion, but few observers expected her to land her face on Christina Aguliera – including Ms. Aguliera herself.

“I woke up and looked in the mirror, and I was like, hey, what’s that on my face?” Ms. Aguliera told reporters today. “The girl knows how to work it, for sure.”

Ms. Spears’ marketing team confirmed that their client’s face might soon appear on the heads of other prominent singers such as Madonna, Avril Lavigne, and Clay Aiken.

If Ms. Spears’ efforts pay off, the new strategy of “face placement” could turn out to be the logical successor to the nineties fad of product placement, says Dr. David Cremmins of the University of Minnesota’s Lawrence Tate School of Advertising. 

“With all the clutter in the marketplace, Christina Aguliera’s head becomes a very valuable piece of real estate,” Dr. Cremmins says.

In other news, Pentagon sources said today that the voice on the latest tape attributed to Saddam Hussein is in fact the Iraqi strongman’s, but that the face on the tape resembles Britney Spears.

On the tape, the former dictator urges Iraqis to rise up against the infidel and also to purchase “my awesome new CD ‘In the Zone.’”

RETURN TO TOP

MOORELAND - A Mooreland man fatally shot his wife and then himself after he caught her chatting with another man over the Internet, Henry County authorities said Monday. Curtis H. Downs, 28, and his 25-year-old wife, Daleleen, were found dead in their home about 10:45 p.m. Sunday. Both had apparently died of shotgun blasts in the head. Police said Mrs. Downs had also been shot in the chest.

Moments before police had arrived, Curtis Downs had called emergency dispatchers and reported that he had just shot his wife and planned to kill himself. In the background, dispatchers could hear Mrs. Downs, apparently already wounded, screaming for her life, according to 911 tapes. "Please don't!" a woman could be heard shouting on the tape. "Please don't!" Seconds later, dispatchers heard a gunshot and the line went dead. Police believe that Curtis Downs shot his wife a second time, then killed himself after hanging up the phone.

The couple lived with Mr. Downs's father, Curtis F. Downs, at 4309 N. Henry County Road 550-E.

QUARREL OVER CHATTING

Investigators said Downs's father left the home Sunday evening after the couple began arguing over Mrs. Down's Internet activity. The elder Downs took two children in the house - the couple's 8-year-old daughter and 5-year-old niece - with him to a neighbor's home, where he called police. Authorities said the elder Downs reported there was a gun in the house and that his son was being violent. Neighbor Steve Reynolds was in his garage when the elder Curtis drove up and asked him to call 911. "He made a hard decision to let his son go and get his grandkids out of there," Reynolds said of the elder Downs. "He was very motivated to get them out of the area and leave."

When police arrived at the home, they found Mrs. Downs fatally shot in the living room and Curtis Downs in the kitchen with a shotgun near his body. "This wasn't the first time we had been out there," Henry County Sheriff Kim Cronk said. "In fact, we have been out there a lot."

HISTORY OF TROUBLE

Over the past three years, members of Curtis H. Downs's family - including his father, children, sister, wife and mother - had requested or been targets of protective orders filed by other relatives. Most recently, on Sept. 24, Curtis H. Downs filed a protective order against his wife, then living in a New Castle apartment. Weeks later the order was dismissed at Mr. Downs's request. The couple then moved in together at the Mooreland home, where Curtis had grown up. Both Mr. and Mrs. Downs had been arrested for domestic battery.

In March, Mrs. Downs was jailed after she allegedly ran over her husband with the couple's car. In May 2000, Mr. Downs - who has been arrested nine times - was jailed after he allegedly beat his wife with a tool.

According to police records, since January 1994, Mr. Downs had been involved in 15 family fights in which police were called. Most of those incidents involved a weapon. He was also the target of protective orders filed by his wife, father, mother and sister. In each case, the protective order was eventually dismissed at the family member's request.

ANGER PROBLEMS

Downs's mother, Cynthia, told The Star Press on Monday that she always believed her son had an anger-control problem and should have been on medication that he couldn't afford. Cynthia Downs, who divorced her husband three years ago, said she saw her son about four hours before the shooting. He had called wanting to borrow some noodles. She met him down the road from his house so she wouldn't have to see her ex-husband. They parked their cars next to each other along a dark county road. "He was in a good mood," Cynthia Downs said. "But anything could set him off. I knew he was angry and I knew he was capable of hurting someone, but I never thought he would use a gun to kill someone."

Cynthia Downs said that her daughter-in-law frequently chatted with men on the Internet, causing the couple to get into numerous fights. The couple - who were legally disabled and drawing Social Security - didn't work and all three of their children were legally in the custody of other family members. Cynthia Downs is the legal guardian of their 8-year-old daughter who was visiting her parents shortly before the shootings occurred.

The mother said she felt that couple's problems began when they married while still in their teens. He was 18 and she was 15. "They were just too young," She said. "Him and her never did get along very good."

RETURN TO TOP

ONE in every three Americans owns shares in a mutual fund. Sold as a low-cost way for the investor-in-the-street to own a stake in a portfolio of securities, the funds have grown at a phenomenal rate over the past decade (see chart 1). But a still-unfolding series of scandals suggests that beneath the industry's calm and trusted surface may lurk practices quite as unsavoury as any of those revealed last year at Wall Street's big investment banks, or the year before at the likes of Enron. 

Because Americans trust mutual funds so much, some fear that this could do more damage to American capitalism than any of the earlier scandals. Wall Street worries that it is yet another reason for the general public to be cynical about financial markets. John Thain, the chief operating officer of Goldman Sachs, a big investment bank, warns that what has appeared so far may be only the tip of an iceberg. 

The scandals first came to light this summer after Eliot Spitzer, New York's zealous attorney-general, turned his attention to the mutual funds following his high-profile investigation last year of the unresolved conflicts of interest inside investment banks. But even he could not have foreseen the extent of the mutual funds' abuse of their investors that has come to light since he and William Galvin, the state of Massachusetts' securities regulator, kicked off with an investigation into the mutual-fund sales practices of Morgan Stanley, an investment bank, on July 14th. Since then, the Spitzer probe has thrown up allegations of fraud and misdeeds that threaten to undermine and transform the whole industry.

ROLLING HEADS

Since September 3rd, when Mr Spitzer charged Canary Capital, a hedge fund, with illegal mutual-fund trading, hardly a day has passed without the emergence of new allegations of funds cheating their clients. The allegations have come from the funds' state regulators and (rather less forcefully) from the Securities and Exchange Commission (SEC), whose investment-management division is the mutual funds' primary regulator. 

On October 28th, the SEC and the state of Massachusetts charged Putnam Investments, America's fifth-largest mutual fund (with $272 billion under management), and two of its investment managers with civil fraud for allowing investors to buy and sell mutual-fund shares very rapidly, a practice known as “market timing”. Mutual funds are designed essentially as long-term investments. A rapid turnover of their portfolio forces them to remain more liquid than they would otherwise be and hurts their long-term investors.

On Monday this week, the head of Putnam, Lawrence Lasser, was forced to resign. The following day, the state of Massachusetts filed charges of fraud against five former employees of Prudential Securities' Boston office, also for allegedly improper market timing. Boston is home to several of the industry's biggest players.

On October 30th, Mr Spitzer's investigators said they were preparing a complaint against Richard Strong, the chairman and founder of Strong Mutual Funds, a firm of mutual funds based in Menomonee Falls, Wisconsin. Mr Strong allegedly engaged personally in improper trading activities and, two days later, resigned as chairman of the firm. 

Staff have also been fired from the mutual-fund operations of firms such as Citigroup, Merrill Lynch and Morgan Stanley. Fund managers stand accused of putting their own interests first, thereby violating their fiduciary duty to act in the best interest of the funds' investors. Each case that surfaces further tarnishes the once squeaky-clean image of an industry that had gradually clawed back its reputation for propriety after a spate of scandals during the Depression. 

To some extent the industry's troubles are a result of its extraordinary success. In 1949, mutual funds managed assets of $2 billion. By 1990 that figure had risen to $1 trillion. Since then, the industry's assets have mushroomed to $7 trillion, organised into about 8,300 different mutual funds belonging to some 95m investors. In 1949, equities accounted for 90% of the industry's assets. Today, only half of the mutual funds' money is invested in equities (see chart 1), but those equities account for 23% of all publicly traded stock. The other half of the funds' assets is parked in bonds and money-market instruments. 

Until the 1990s, most funds were cautious investors looking for long-term gains. Galvanised, however, by the enthusiasm of savers for the capital markets, they grew rapidly and became much more aggressive in their investment strategy. Some of them specialised in risky new-economy stocks. “Amassing assets under management became the industry's primary goal, and our focus shifted from stewardship to salesmanship,” says John Bogle, the founder of Vanguard, the second-biggest mutual fund. A long-standing critic of his industry's murky practices, Mr Bogle founded the only big fund that is mutually owned. The rest, despite their name, are legally constituted as companies.

As trillions of dollars poured into the funds, their managers became more cavalier with their costs. Mr Bogle reckons that last year the industry's operating costs amounted to a staggering $123 billion. The pay of the funds' top managers rose to match those of top corporate CEOs. Mr Lasser, who has earned more than $100m over the past five years, may, according to one analyst, be entitled to a further $89m on his departure from Putnam.

To meet these costs the funds charge their investors fees. These include management fees, administrative fees, custodian and transfer fees, shareholder-service fees, directors' fees, legal and audit fees, interest costs and so-called 12b-1 fees—named after an SEC regulation that created them. Some funds forgo some of these, so their fees vary considerably. For instance, not all charge a 12b-1 fee, which pays for marketing and advertising to attract new investors to the fund. And not all demand a shareholder-service fee, which goes to pay the bank, brokerage firm or insurer for servicing the investor's account. 

On top of these fees come charges for buying and redeeming shares in a mutual fund. And these vary widely too. Instead of a charge on purchase, a so-called “front-end load”, some funds impose a “back-end load”, a charge on investors when they redeem their shares early. However, about 45% of all equity funds have neither a front-end nor a back-end load. But they do charge fees for services and marketing.

A typical charge is 4.5-5.5% of the investment, though discounts are given for larger sums. On November 3rd, however, the National Association of Securities Dealers, owner of the NASDAQ stock exchange, revealed that mutual-fund investors had not received an estimated $86m of volume discounts to which they were entitled during 2001 and 2002. Regulators are planning to bring enforcement action against two dozen brokers for this overcharging. 

IMPERFECT TIMING

When the bull market turned sour, the funds' managers were tempted to find new ways to entice and hold on to customers. One way was to allow favoured investors to indulge in the two practices that are at the heart of the current scandals: late trading and market timing. 

These practices depend on the industry's antiquated way of pricing its products. When the first mutual fund, the Massachusetts Investors Trust, was established in 1924, it calculated how much it was worth (its net asset value—NAV) once a day based on the stockmarket's closing prices. It announced its NAV at the beginning of the next trading day, and deals were then done for the rest of that day on the basis of that price. But this meant investors were inevitably trading at out-of-date prices. 

In 1968, the SEC introduced the current system of pricing in which a fund's price is fixed at 4pm New York time, the closing time of the New York Stock Exchange. Orders placed after that time have to wait for the next day's 4pm fixing to know the price at which they will be executed. Meanwhile, of course, the underlying portfolio of securities owned by the fund can have fluctuated sharply in value. 

Allowing favoured investors to trade after 4pm, but at the previous 4pm's fixing, is called late trading and is illegal. Allowing investors to buy and sell funds rapidly to take advantage of short-term fluctuations in the funds' underlying portfolio (market timing) is not illegal unless a fund says it prohibits it. And most of them do. 

Late trading is hard to detect. Financial intermediaries—such as brokerage firms, insurers or administrators of 401(k) retirement plans, all of which invest heavily in mutual funds on behalf of their clients—may legitimately receive investors' orders before 4pm, but not pass them on to the funds' managers until after the 4pm watershed. The managers then (fairly) execute these orders at that day's prices. But the distinction between this arrangement and late trading is a fine one.

In testimony to Congress on November 3rd, Stephen Cutler, the SEC's enforcement director, said that more than 80% of all fund managers currently allow intermediaries to send orders in after the market closes at 4pm. The intermediaries' orders have supposedly been received before 4pm, but the system has given corrupt brokers the opportunity to hide illegal late trades in batches of otherwise legitimate orders. The SEC reckons that more than a quarter of top brokerage firms and 10% of mutual-fund groups may have knowingly allowed the illegal practice of late trading. 

In addition, Mr Cutler said that almost a third of intermediaries “indicate that they assisted market-timers in some way”. Fund managers disclose their funds' holdings to the public twice a year. Yet almost a third of them admit that they reveal their holdings to selected clients more frequently, giving them a clear advantage over other clients. 

IMPERFECT GOVERNANCE

The industry's structure is heavily influenced by the Investment Company Act (ICA) of 1940 which determines the funds' legal form. The ICA says explicitly that mutual funds must be organised, operated and managed in the interests of their shareholders. A fund's sponsor (usually a bank, an insurer or a specialist mutual-fund company like Fidelity or Vanguard) is required to register each new fund as a separate company with the SEC and with a state's securities division. The registration document is the prospectus that informs the general public about the fund's sponsor, its board of directors, its investment objectives and its fees. Each fund has its own board, whose members are in effect paid by the fund's investors to watch over their interests.

The funds do not manage themselves; rather, they hire external money-management companies which have their own separate sets of shareholders and loyalties. A fund's board is not only supposed to oversee its investments, it is also expected to approve the money managers' pay and to decide on the renewal (or otherwise) of their contract.

And herein lies a main cause of the industry's troubles. The boards of mutual funds are rarely, if ever, truly independent. They tend to rubber-stamp their money managers' activities and their contracts without question. Fidelity and other big sponsors often provide as many as two-thirds of the members of their funds' boards, and the chief executive of the sponsor is frequently the chairman of the board also. Most directors end up overseeing far too many funds to do a half-decent job at any of them.

The ICA demands that funds be set up legally as corporations, but in several key respects they do not behave like corporations. Their reports to their shareholders are far less transparent than company reports. For example, their prospectuses do not disclose how much individual money managers are paid, though they do reveal the compensation of the money-management firms as a whole. They also disclose the pay of the funds' board directors.

Don Phillips, the boss of Morningstar, an agency that rates mutual funds, says the ICA needs strengthening. The chairman of each fund's board should, he says, be an independent director who produces an annual report. Disclosure rules for mutual funds ought to be the same as the rules for quoted company shares. Managers of mutual funds should also be obliged to reveal how many mutual-fund shares they own. “As they have a corporate structure, mutual funds should be treated like companies,” he argues.

THE TIMING OF REFORM

Until the SEC was pushed into action by Mr Spitzer's probe, it had neglected increasingly obvious problems in the mutual-fund industry. Last week Mr Spitzer accused the agency of being “asleep at the switch”. “If it were not for state regulators, the ongoing investigation of mutual funds may not have been launched at all,” says Mr Galvin, the Massachusetts regulator. 

In some states, such as New York, securities regulation is part of the attorney-general's duties. In Massachusetts and other states, a state secretary is in charge. Mr Spitzer's jurisdiction is unusually large. Under New York's Martin Act, a 1921 state law, he is able to press civil and criminal charges. In Massachusetts, Mr Galvin can only bring civil charges. 

Despite their missionary zeal, neither Mr Spitzer nor Mr Galvin can change the way that mutual funds are supervised. It is up to the SEC and federal lawmakers to decide on amendments to the ICA, and William Donaldson, the chairman of the SEC, has promised to unveil his agency's proposals for new regulation this month. 

Reforms are being mooted throughout the industry. On October 30th, the Investment Company Institute (ICI), a trade group, endorsed a new rule that would oblige investors to put their orders into the hands of mutual-fund managers (rather than intermediaries) by 4pm in order to get the price of the day on which the order is placed. This would reduce the temptation for intermediaries to cheat on the time that orders are received. 

The ICI also came out in favour of a 2% redemption fee on shares sold within five days of purchase. The measure is intended to frustrate market timing since it makes the frequent selling of shares more expensive. Vanguard's Mr Bogle argues that the rules should go even further, with a 2.30pm deadline for orders and a 2% redemption fee on shares that are sold within 30 days of purchase. But he concedes that he can live with the ICI's proposal.

Mutual funds oppose the earlier deadline and the new fee, arguing that such simplistic solutions are not in the interests of mutual-fund shareholders. Led by Fidelity, they are campaigning for a more effective clearing house (the agency that processes buy and sell orders). An improved clearing house, they say, would use outside audits and new encryption technology to determine exactly when intermediaries receive buy and sell orders.

The spreading scandal will be expensive for the industry. Regulators and lawyers are trying to recover losses on behalf of mutual-fund investors in legal actions that could cost firms hundreds of millions of dollars as well as ending many a fund executive's career. On October 21st, Milberg Weiss Bershad Hynes & Lerach, a law firm, filed a suit against Putnam and its parent company, the insurance broker Marsh & McLennan, for alleged market timing in Putnam's international funds.

STAUNCHING THE FLOW

Many funds are finding that investors are deserting them. Bank of America, Bank One, Janus Capital and Strong Capital, the four fund sponsors named in the complaint that Mr Spitzer filed against Canary Capital, saw net withdrawals of $7.9 billion in September, and investors will probably have withdrawn billions more in October. Morningstar has already recommended that investors avoid Bank of America's Nations Funds, Bank One's One Group, Janus Capital, Strong Capital and the Fred Alger Management group. 

Putnam is also losing assets as a result of its dubious practices. On October 30th, the state pension fund of Massachusetts decided to take $1.7 billion out of Putnam's managers' hands. The next day public pension funds in New York, Rhode Island, Pennsylvania and Iowa together withdrew $2.63 billion. Other public funds have indicated they will follow suit. 

Even so, Morningstar's Mr Phillips thinks the withdrawals will be largely confined to the few funds whose abuse of investors' trust has been particularly egregious. Although investors have not been treated fairly, he says, they have not as a group been dramatically damaged. Research by Eric Zitzewitz at Stanford University's business school indicates that the total loss to investors caused by market timing and late trading might be about $5 billion a year, a handy sum but still less than 0.1% of the mutual funds' assets.

The ongoing scandal has many of the features of the crisis of corporate governance fuelled by the accounting scams of recent years and the sky-high pay of corporate CEOs. Again investors have failed to exert adequate control over the agents that they have entrusted to keep an eye on their money. Those agents—the directors of the boards of individual companies—have sided too much with management and chosen to ignore practices that are not in the best interests of the owners of their company. Should control not soon be re-exerted by shareholders (be they of companies or mutual funds) American capitalism could stumble as savers redirect their surpluses into the safekeeping of banks and mattresses.

RETURN TO TOP

IT ALL sounds alarmingly like the process of self-criticism that kept Chairman Mao's China on the ideological tracks. Your company hires an outsider to grill your boss, your staff and perhaps even your spouse on the shortcomings (and strengths) of your behaviour. The outsider confronts you with the findings and together you draw up a plan for self-improvement. Your boss and staff undertake to help you to keep to the plan. From time to time, the outsider returns to check on how you are doing. 

Yet top executives as self-confident as eBay's Meg Whitman and Unilever's Niall Ferguson have undergone “executive coaching”. This week the International Coach Federation (ICF), the largest trade group, is meeting in Denver for its annual conference. Its global membership has soared from about 1,500 in 1999 to almost 7,000 today. The coaching market is now worth around $1 billion worldwide, a number that Harvard Business School expects to double in the next two years. “It's going crazy,” says Brian Edwards of Optima, a British coaching firm that has been in business for five years. 

Coaching might seem an obvious second career for a former chief executive keen to profit from a little mentoring. Though a few coaches are ex-bosses, most have other skills, according to the ICF's recently completed first survey of members. Two-thirds are women, it finds; a substantial minority come from teaching or counselling backgrounds. Others are former mental-health workers. Jeremy Robinson, a coach from New York, began as a psychoanalyst and often counsels clients partly on their work problems and partly on those in their home lives. Many such workers are seeking fresh pastures as tighter government budgets and the trimming of the amounts which insurance firms spend on clinical psychology have taken a toll on their employment prospects, argues Edgar Schein, of the Massachusetts Institute of Technology's Sloan School. 

Some coaches come to the office. But half, according to the ICF figures, do their coaching mainly by phone. Val Williams, an independent coach who was once an executive at a big health-care group, coaches a client in Finland by telephone every month, discussing what progress he has made in meeting the goals he set himself during their previous conversation. 

Like personal physical trainers, some coaches work for individuals. Ms Williams reckons that a quarter of her clients pay their own bills. Five years ago, however, three-quarters did. Increasingly, firms are willing to pick up the tab.

SHRINK OR SWIM

Often, coaching is a way to give problem employees one last chance. Mr Schein says it is easier for managers to hire a coach than to give an unsatisfactory employee a bleak performance appraisal.

And yet such “derailment coaching” is not much fun for coaches either, and it rarely achieves much, so the coaching industry is increasingly trying to accentuate the positive, even urging companies to use their services as a perk to retain high-fliers. Judging by how some American executives brag at dinner parties about their hot new coach, this strategy has potential. 

Rohm and Haas, a specialty chemical company, picks half a dozen promising executives a year to go through a programme grandly called Leadership 3000. They undergo a battery of psychoanalytic tests, listen to feedback (“we like to call it feed-forward,” says Joe Forish, the firm's head of human resources) which the coach collects from colleagues and subordinates, and agree an action plan that is discussed with the firm's top executives as well as with the person's immediate boss. “We make it clear that this is an investment in people's futures,” says Mr Forish. At a cost of $15,000-20,000 for up to a year of the coach's time, an investment it clearly is.

Most coaches are one-man bands or tiny firms. But a few big human-resources consultancies are moving in: Hewitt Associates has teamed up with Marshall Goldsmith, a celebrity in the coaching industry, who has coached top executives at Boeing, Motorola and General Electric, and more than 50 chief executives. Together, the two have a network of about 200 coaches, all using a proprietary method developed by Mr Goldsmith. This allows them to win big contracts, such as a recent deal with one multinational to coach 200 of its top staff. The two brands spell higher charges: typically $30,000-70,000, and much more for Mr Goldsmith's personal services. But the venture also submits its bill only if the client agrees, a year after the coaching, that certain agreed goals have been met.

What does coaching actually achieve? Rigorous analysis of so touchy-feely an activity is probably impossible. Karol Wasylyshyn, a coach based in Philadelphia, has asked her clients to rate the “sustainability” of what they learned on a scale of one to ten. Over a third rate it nine to ten, she says proudly. However, this may reflect the attitudes of clients as much as real achievement. It seems that high-fliers compete as hard to improve their behaviour as in anything else. “They don't think I'm perfect? I'm gonna prove to them I am,” mimics Marc Effron of Hewitt Associates.

Nevertheless, the perception of success may be as important as the reality. One reason why coaches strive to involve an executive's peers and boss at every stage is so that they, too, feel some responsibility for helping to bring about change. Not only does this reinforce a better approach; it may also persuade them that they are seeing the alteration they want to bring about. 

The fact that the firm usually foots the bill for coaching has two big implications. First, says Mr Schein, it means that a lot of coaching is about “self-socialisation”: getting the individual to conform to patterns of behaviour acceptable to the firm. 

Then there is the issue of privacy. “I always tell people they have limited confidentiality,” says Mr Robinson. Coaches may find themselves in an especially awkward situation if coaching persuades a client that the best way to develop his career is to quit the firm paying for the coach. Ms Wasylyshyn has formulated a way to tell the human-resources department that a high-flier she is coaching is restive, without breaching confidence. “I think you might lean in and do a reality check,” she will say, with delicate circumlocution.

RETURN TO TOP

Daniel Wyatt: There are going to be some pointless changes around this office

All right, everyone, listen up. I have some announcements to make, and they affect all of you. I know that you received the e-mail I sent out, in which I detailed this meeting's agenda. I wanted to meet anyway and go over that e-mail in person, to prevent any misunderstandings. There are going to be some pointless changes around here, folks. The sooner we get used to them, the better off we'll be.

First, there will be no more taking pens directly out of the supply closet. This is not to say that you can no longer have pens, but from now on, we're going to keep track of who's taking what, with a register on the supply-closet door. Please list any supplies you remove from the supply closet on the supply-closet register for at least a week or two. The sheet will get old and tattered, and it will eventually fall off the door. After it gathers dust on the floor for a few days, I will pick it up and file it. This largely unnecessary new measure will be enforced rigidly. 

We will also be keeping track of your e-mail. You will find the spreadsheet I made in your in-boxes—from now on, the spreadsheet should be open on your computer at all times. Whenever you send an e-mail, log it into the spreadsheet. At the end of each week, e-mail the completed log to your supervisor. The last item on your list will always document the e-mail to your supervisor. This will be the only entry your supervisor cares enough to check for, so failure to document this e-mail will cast suspicion on your e-mail-record-keeping abilities in general, and may result in disciplinary action, as outlined in your new employee handbook.

Has everyone received the new employee handbook? Good. You should study it thoroughly. In order to drive home the importance of our new rules and guidelines, we will begin a series of personnel orientations this month. The orientations will be conducted by me on a department-by-department basis. That way, the work of an entire department will come to a standstill while I orient it. The orientations will take two full days, so block out your time accordingly.

We've also noticed that the sink is often full of dirty dishes. The only fair way to deal with this problem is for everyone to take turns washing a load. Even those who eat their lunch outside of the department will be expected to volunteer for kitchen duty. Check the calendar to see which week you will need to do kitchen duty, and also which week you will be acting as kitchen-duty manager.

On a more alarming note, we have reason to believe that there have been some abuses of telephone privileges in the office, particularly long-distance privileges. You have each been issued a telephone code. The 14-digit code must be entered to obtain an outside line. This way, we can track phone usage. We anticipate savings of close to $30 each month with this time-consuming new procedure.

Next on the docket: the water cooler. The water cooler will be moved to the back closet. The way the water cooler sits now, it juts out into the hallway. The new location will minimize delays for everyone, except those who need water. You're welcome. If some of the higher-ups had had their way, we would have gotten rid of the cooler altogether. I'm on your side here. I was fighting for you guys on this one.

What else do we have? Lunch hours. Lunch hours will be taken at set times from here on out. You must plan your day around lunch. If work prevents you from taking your lunch at your assigned time, you will have to make other arrangements for eating. Eat a protein bar. Oh, there will be no more eating at your desks, either. And whenever you leave your desk, your outgoing voicemail message should notify callers of your absence. Also, start thinking about whom you would like as a bathroom buddy. I'll explain what this entails at our next meeting.

I think that's all. We'll have monthly departmental meetings to discuss these changes and to hear your ideas on ways to improve efficiency. At least we will for the next couple of months, but we'll probably forget to schedule the meetings after a while. Not like that matters, though, because it isn't as though a single one of your suggestions will have been taken seriously, much less implemented. 

Oh, and don't forget that Thursday is crazy-shoes day, so go buy yourself the craziest pair of shoes you can find. Thank you for your attention.

RETURN TO TOP

Dear Miss Manners: 

As a senior manager in an office, I receive many employee visitors throughout the day. I encourage employees to stop by, as I have an open door policy. 

As most of these visits are impromptu, I am usually in the middle of a project or other task and have many documents on my desk. I am surprised at how many people will ask about the documents on my desk! Just today, as I was working on a confidential acquisition, a co-worker stopped by, saw the document on my desk, and started quizzing me on what I was working on. 

Miss Manners will not be happy to hear that my response was a question also -- "Do you have a habit of reading things on other people's desks?" 

Okay -- I know I was wrong. Is there a better response? Not only is this not their business, in many cases information needs to be confidential. 

ANSWER:
Shut the door.

Miss Manners realizes how shocking a shut-door policy appears to those who believe in the non-hierarchal workplace in spite of the obvious fact that there is no such thing. But your open-door policy isn't working. It is not a defense of this frank but rude snooping to point out that you are encouraging your employees to ignore boundaries.

The simple act of knocking reminds people that you are working, and makes your willingness to stop and listen to them all the more gratifying. It also gives you time to put your blotter on top of confidential papers.
-*-*-*-*-*-*-
Dear Miss Manners: 

My original proposal was to abolish Thanksgiving Day, but I have been talked into a compromise. I recommend that we rename this so-called holiday National Cheapskate and Freeloaders Day, which is what the holiday has evolved into. 

As I wrote to you once before, I gave up my so-called restaurant license at home and decided to stop patronizing all those invitees who never reciprocated in return. Their excuse often was, "Oh, you are such a good cook we could never prepare anything that might please YOU." 

Miss Manners, all they would have to do is invite us over and order a pizza and beer and soda and we would be happy. Hinting and being downright rude and demanding still does not get the message across to invite us over to their place for a change. Since there are so many restaurants out there that would appreciate our business, we will be patronizing them over the holidays. 

A message to all you freeloaders and cheapskate parasites whom we entertained all these years and were overlooked by in return: "The free ride is over! Celebrate on your own; your gastronomic chiseling days are over." We are tired of being hosts to such parasites. 

ANSWER:
Can I get you to agree with me on this very legitimate complaint? I am sure there are many people who feel likewise, but are too embarrassed to say anything. 

Or too tolerant or too sociable to become quite so bitter. Miss Manners remembers you, but was hoping you had gotten over it by now.

Mind you, she thoroughly agrees about the importance of reciprocation and shares your distaste for this particular excuse. But the sad fact is that most people really never learned to entertain, even simply, and you might make allowances for people you like who demonstrate their goodwill by inviting you out, doing you favors and otherwise trying to hold up their share of the friendship. When you find that they did give a Thanksgiving party -- which is to say, that they do entertain, they just don't entertain you -- it will be cause enough to give up on them.
 

RETURN TO TOP