America's Dirtiest Vehicles

These cars fall behind in fuel efficiency, carbon footprint and air pollution.

In Pictures: America's Dirtiest Vehicles

Starting in 2011 the Ford Focus electric sedan will be sold in 19 cities across the United States. It's built in Michigan, uses the same platform as the conventional, gas-powered Focus sedan, and can go 100 miles on a single charge of its zero-emission lithium-ion battery.
Compare that to the Buick Lucerne. The $29,730 sedan gets 15 miles per gallon in the city, and 23 mpg on the highway. All that burnt fuel dumps an EPA-estimated 10.4 tons of carbon dioxide into the environment yearly--significantly more than other cars in its class, like the Toyota ( TM - news - people ) Avalon (8.1 tons per year) and Chevrolet Impala (6.3 tons).

In fact, the Lucerne is so far behind the pack in terms of its environmental footprint that it landed on our 2010 list of the year's dirtiest vehicles, along with the GMC Yukon, Cadillac CTS and Toyota Sienna.

In Pictures: America's Dirtiest Vehicles

To be fair, all of these cars meet or exceed federal emissions standards, and are significantly cleaner than the heavy, loud, inefficient gas guzzlers our grandparents drove. Automakers are quick to defend their cleanliness: The Sienna, for instance, rates lower in terms of fuel economy because of a gas-hungry all- wheel-drive model, which competitors don't offer, according to a Toyota Motors spokesman.

Still, the cars on this list lag behind the rest of the market, and are certainly "dirtier" than other new models.
Behind the Numbers
To determine the dirtiest cars on America's roads, we looked at data from the U.S. Environmental Protection Agency for all 2011-model-year vehicles. Each car was scored for its performance in terms of air pollution, fuel efficiency and carbon footprint ratings.

Our air pollution score reflects the amount of tailpipe emissions a vehicle releases; vehicles with better scores emit fewer pollutants like hydrocarbon, carbon monoxide and formaldehyde. The carbon footprint score measures the impact a vehicle has on the environment, based on how many tons of CO2 it dumps annually. Those estimates are based on full fuel-cycles, combine all steps in the use of a fuel from production to consumption, and include carbon dioxide, nitrous oxide and methane, the three major greenhouse gases emitted by motor vehicles.
For each car, we supposed 15,000 miles driven annually, 45% on the highway and 55% in the city. The worst offenders in each of 10 automotive segments made our list.
We did not evaluate vehicles classified as "heavy duty," like the 3500 series of the Dodge Ram, which are exempt from federal fuel economy requirements. We also deliberately omitted some vehicles that rated higher on the particulate-emissions scale, including exotics like the Ferrari 599 GTO and high-performance variants like Mercedes-Benz's AMG. Many of those cars do have poor emissions and fuel efficiency ratings but are produced in such small quantities and are driven so infrequently that they don't significantly contribute to air-pollution problems.

How Many ETFs Do You Need?

Exchange-traded funds, which are fixed baskets of stocks that trade like shares of stock, are an explosively successful product, with assets in the category approaching $1 trillion. A lot of customers are making mistakes, though. By owning diversified ETFs they are missing opportunities to capture tax losses.
In a tax-deferred account like an IRA or a 401(k), carve-ups are irrelevant. Go ahead and buy a broad fund. Two excellent choices for U.S. stocks are the SPDR S&P 500 (SPY), with $82 billion in assets and an expense burden of only $9 a year per $10,0000; and the Schwab U.S. Broad Market ETF (SCHB), a tiny $360 million fund with a $6 annual cost per $10,000.
Outside your tax shelter, however, these are poor choices. You are better off chopping the ETF into bite-sized pieces. Vanguard has separate ETFs for large, medium and small companies, with separate growth and value portfolios for each. Get six ETFs instead of one. That way, if just one or two of these groups go down in value, you can capture a capital loss deduction by selling and reinvesting in a similar (but not identical) portfolio.
What about foreign stocks? If you have $25,000 or less to put in, Schwab’s International Equity fund (SCHF) is a bargain at $13 a year in overhead per $10,000 invested. If you have more money, buy Vanguard’s separate European (VGK), Pacific (VPL) and Emerging Market (VWO) funds rather than a tutti-frutti international ETF.
If you have more than $250,000 to put abroad and also have opinions about where the world economy is going, consider the iShares single-country funds. Expenses are higher, at about $55 a year per $10,000.
Don’t misunderstand. The point is not to lose money so you can get a deduction. Your aim is to have all your funds go straight up. But bad things happen. When they do, you want the federal government to share some of the loss.
You can use capital losses to absorb any amount of capital gains plus up to $3,000 of “ordinary” income (from interest, dividends, salary and so on). Unused losses can be carried forward indefinitely (but expire with you).
If you have unused losses carried forward from the recent crash, more losses won’t help you right away. But they could be valuable down the road. Don’t waste time when an opportunity to capture a loss presents itself. If your ETF sinks $1,000 or more, book the loss before it recovers.
Of course, you should get right back in with a similar ETF. Nothing worse than taking money out of the market to grab a tax benefit, only to see it rebound while you wait on the sidelines. You have to dodge the IRS rule against “wash sales”—selling something at a loss and buying back the same thing within 30 days before or after. Do that by switching into an ETF with a similar but not identical portfolio.
Someday you may be very glad you have loss carryforwards on hand. You may have capital gain distributions from funds, gains on stocks that get taken away in mergers, or a gain on a vacation home.
Avoid selling winning funds and stocks in a taxable account, unless they grow to an outsized fraction of your net worth. There are three better things to do with winners:
–Give winners to charity. If you pay $5,000 for ETF shares and donate them when they are worth $12,000, you get a deduction for the full $12,000 but owe no capital gain tax on the $7,000 profit.
–Give winners to a relative who’s in a low tax bracket—for example, your daughter as she is headed off to college. She inherits your tax basis. She immediately sells the stock or fund. The taxable appreciation is the same as if you had sold the investment, but her tax rate is likely lower than yours.
–Leave winners in your estate. Under the estate law likely to go back into effect in January, appreciated property gets stepped up fair market value when the owner dies. That means capital gain tax is forgiven.

Is Ireland Europe’s AIG?

Image by AFP via @daylife

The $100 billion bailout of Ireland currently being put together in Europe shares some frightening characteristics with the most infamous bailout that took place in the U.S., the taxpayer-funded bailout of American International Group.
The problem in Ireland is the banks. They are just about insolvent and the Irish government has already pretty much guaranteed all Irish bank debts. Many people saw the bailout of AIG as a backdoor bailout of its big bank creditors. It’s possible that the bailout of Ireland could turn into a backdoor method of helping German banks and other foreign banks that have mismanaged their exposure to Ireland’s banking system.
Two years ago the U.S. government made the politically unpopular decision to inject $180 billion of taxpayer funds into AIG even after letting Lehman Brothers fail. Some $60 billion of that money quickly passed through AIG to AIG’s creditors, big banks like Goldman Sachs, Bank of America and Société Générale, which had purchased insurance on mortgage-related securities from AIG that the giant insurer could no longer pay. The U.S. government payments came to be seen by many as a controversial backdoor bailout of the banks, especially because the U.S. government did not negotiate any sort of discount from the big banks that had mismanaged their counterparty risk.
German banks are Ireland’s biggest creditors, with $226 billion outstanding, according to the Bundesbank. Germany, the biggest and strongest economy in Europe, will probably be the single biggest contributor to the Irish bailout as it was in the rescue of Greece. As a German government spokesperson, Steffen Seibert, reportedly said recently: “The German government knows that German banks, above all I think Deutsche Bank, are considerably burdened by the Irish debt problems.” Banks in the U.K., France and Belgium also have large exposure to Ireland’s banks. So Britain is now committing $11 billion in bilateral aid to help rescue Ireland outside of the permanent bailout mechanism set up by euro-zone members.
The details of the Ireland bailout by the IMF and European Commission are not yet known, but the New York Times has reported that 15 billion euros will be used to backstop the Irish banks. There are fears about bank runs in Ireland and the New York Times has reported that Allied Irish Bank and Anglo Irish Bank have seen billions of euros get sucked out in recent months.
It seems possible that, like in the case of AIG, any bailout money that is transferred into the Irish banks will quickly leak out and be paid quickly to creditors and depositors, some of them foreign.
In Ireland, the financial rescue has been associated with a feeling of losing sovereignty and being forced into severe austerity measures, notions that have made the bailout deeply unpopular.  How will the Irish public feel about the bailout if they come to see it as a backdoor bailout of foreign financial firms? How will the financial rescue work if some of the money that goes into Ireland to prop up the banks goes flying out of the country moments later? The bailout of AIG seemed to work out much better for its creditors than the company itself.

Massive Case May Push The Envelope Of Insider Trading

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If the Wall Street Journal’s reports are correct, the feds have raided two hedge funds as part of a massive insider-trading case targeting the ecosystem of traders and the firms that supply them with hot tips on sales trends, the fate of drug trials, and other market-moving information.
The Journal today reported raids on the Connecticut offices of hedge funds Diamondback Capital Management LLC and Level Global Investors LP, both spinoffs from Steven Cohen’s SAC Capital Advisors. Based on the description of at least one of the purported suspects, Oregon tech analyst John Kinnucan, the feds are targeting traders and their consultants. These are firms that sift through the extended chain of participants in an industry, looking for information that in isolation might be meaningless but assembled with other facts presents the next great trading opportunity.
Financial analysts have a name for this: The mosaic theory. And according to that theory, it’s legal to assemble non-public, non-material facts into a material, non-public picture of what is going on.
That may be fine in theory, but it won’t stop an aggressive prosecutor intent on bagging the next Ivan Boesky, said Adam Hoffinger, a former federal prosecutor who now practices white-collar defense at Morrison Foerster in Washington.
“What you have to worry about is, even if the small piece you got is not material, a prosecutor looking through the glass darkly will piece it together,” said Hoffinger, who worked on insider-trading cases during his five years in the Southern District of New York in the late 1980s. “If I were counseling somebody ahead of time, I’d tell them don’t bank on it.”Instead of the mosaic theory, Hoffinger concentrates on the Pinkerton Theory. Named after a 1946 Supreme Court case involving a pair of brothers accused of evading federal liquor taxes, it lets prosecutors go after conspirators even if they don’t know all the other conspirators, participate in an actual crime, or understand the grand scheme of the plot. They can be liable for the crimes of their co-conspirators if prosecutors can prove they knew something illegal was likely to occur.

So long as the partnership in crime continues, the partners act for each other in carrying it forward. It is settled that ‘an overt act of one partner may be the act of all without any new agreement specifically directed to that act.’

Unfortunately for traders, to prove guilt prosecutors zero in on the very practices hedge funds use to prevent other people from acting on their information. Secrecy, code words, evasive actions all can protect a trading strategy — and convince a jury somebody was aware of a criminal conspiracy.
“They call it `badges of knowledge,’” said Hoffinger. “Is he secretive? Is he using private line instead of the office line?”
Insider trading theory has advanced from the time when the crime was limited to insiders who had some kind of duty not to disclose the information they possessed. Instead of directors tipping their mistresses to an impending takeover, now prosecutors are going after people who stumble across market-moving information and act on it, regardless of their relationship to the company. The wide-ranging probe described by the Journal appears to target networks of traders who paid certain consultants for information, some of it derived from people like technology resellers who can offer their insights into how a particular line of products is selling. What one person might call fundamental analysis, another might call a fraud on the market.
“Some of these are getting complicated and frankly pushing the limits of the theory,” said Hoffinger. “That’s what prosecutors do, and what we do is hold their feet to the fire and keep ‘em honest.”
Hoffinger represented former Westar Chief Executive David Wittig, who was convicted of violating federal “honest services” law, a fuzzy statute the Supreme Court later hemmed in in a case involving former Enron Chief Jeffrey Skilling. Wittig’s conviction was overturned on appeal and prosecutors dropped the case after the Skilling decision came down.
The best defense against vague charges of belonging to an insider conspiracy may be showing you were open the whole time. That certainly helped Bear Stearns executives Ralph R. Cioffi and Matthew M. Tannin, who were acquitted of charges they lied to investors about the impending collapse of a $1.6 billion mortgage fund by arguing the e-mails prosecutors used to accuse them of hiding facts from investors openly discussed their own confusion about which way the market was headed.
Thus Kinnucan, the Oregon analyst, may have shown a flair for criminal defense work by blasting an e-mail to his clients describing how FBI agents tried to bully him into wearing a wire. As evidence of criminal intent, that behavior won’t fly with any jury.

The Biggest Names In Business

Bill Gates No Longer World's Richest Man

Carlos Slim Helu takes No. 1 spot on Forbes World's Billionaires list as a record 164 10-figure titans return to the ranking amid the global economic recovery.

In Pictures: The 20 Richest People In The World

For the third time in three years, the world has a new richest man.
Riding surging prices of his various telecom holdings, including giant mobile outfit America Movil ( AMX - news - people ), Mexican tycoon Carlos Slim Helu has beaten out Americans Bill Gates and Warren Buffett to become the wealthiest person on earth and nab the top spot on the 2010 Forbes list of the World's Billionaires.
Slim's fortune has swelled to an estimated $53.5 billion, up $18.5 billion in 12 months. Shares of America Movil, of which Slim owns a $23 billion stake, were up 35% in a year.
In Pictures: The 20 Richest People In The World
That massive hoard of scratch puts him ahead of Microsoft ( MSFT - news - people ) cofounder Bill Gates, who had held the title of world's richest 14 of the past 15 years.
Gates, now worth $53 billion, is ranked second in the world. He is up $13 billion from a year ago as shares of Microsoft rose 50% in 12 months. Gates' holdings in his personal investment vehicle Cascade ( CAE - news - people ) also soared with the rest of the markets.

The World's Billionaires

Buffett's fortune jumped $10 billion to $47 billion on rising shares of Berkshire Hathaway ( BRK - news - people ). He ranks third.
The Oracle of Omaha shrewdly invested $5 billion in Goldman Sachs ( GS - news - people ) and $3 billion in General Electric ( GE - news - people ) amid the 2008 market collapse. He also recently acquired railroad giant Burlington Northern Santa Fe ( BNI - news - people ) for $26 billion.
In his annual shareholder letter Buffett wrote, "We've put a lot of money to work during the chaos of the last two years. When it's raining gold, reach for a bucket, not a thimble."
Many plutocrats did just that. Indeed, last year's wealth wasteland has become a billionaire bonanza. Most of the richest people on the planet have seen their fortunes soar in the past year.

Guy Kawasaki Inspires WordPress Creator

One Investor's Global Hunt For Worthy Startups

David McClure's venture capital strategy: place small bets on lots of companies.

Just listening to David McClure recap his recent travel schedule is exhausting. From the start of October through mid-November the 44-year-old venture capitalist addressed entrepreneurs at 14 conferences from Toronto to Nanjing, China. During one stretch he flew from New York to Dublin, where he landed at 6 a.m., gave a speech at 8 a.m. and talked startups with Twitter founder Jack Dorsey at a club until 3:30 a.m.; 36 hours later he was trick-or-treating with his two kids in Palo Alto, Calif.
Many investors scour specific arenas looking for big winners. That model hasn't worked so well for many VCs, thanks to a dearth of acquisitions and initial public offerings in recent years. As of June 30 the VC industry had posted a -4.2% annualized return over the previous decade, versus a -1.6% for the S&P 500, according to the National Venture Capital Association.

McClure's strategy: Place small bets on a lot of companies--wherever they are--and flip enough of them quickly to larger acquirers or other investors. Hence the ambitious name of his fund, 500 Startups, launched in March and now with some $15 million under management and 60 tech-flavored outfits in its portfolio. Rather than try to find one Google ( GOOG - news - people ) in 100 tries, McClure is aiming for at least 10 good "exits"--in the $50 million to $150 million range--for every 200 companies he bets on. "I want to be Ichiro Suzuki, not Barry Bonds," says McClure, who favors T-shirts, sneakers and spicy expletives.
McClure says he has flown roughly 100,000 miles this year--including three trips to Asia, three to Europe and one to South America--looking for targets. In some cases his picks are as much about doing research as about placing considered bets. In September McClure bet on China Net Cloud, a cloud-computing-services company in Shanghai. "It's an opportunity to put a toe in the water and see what could be interesting in China," he says. McClure took a similar approach in Austin, Tex., where he plunked down $250,000 for 2.6% of OtherInbox, an e-mail management company. The founder, Joshua Baer, also runs Capital Factory, a nearby business incubator. "It's basically a twofer," says McClure. "It helps me understand the Austin startup scene."

McClure was a Web developer and consultant before heading PayPal's marketing division from 2001 to 2004--long enough to meet a rash of Silicon Valley players and snare enough stock options to buy his mom a house and write checks to 13 startups. One of them, Mint.com, a personal-finance website, got picked up by Intuit ( INTU - news - people ) for $170 million in 2009.
Jody Sherman, founder of Ecomom, an online retailer of green baby gear, doesn't mind his backer's itinerant approach. One meeting took place walking between conferences in San Francisco; during those 20 minutes McClure fired off six e-mails and introduced Sherman to a potential investor and a Web designer who could smooth Ecomom's interface. Says Sherman: "People take the time to talk to you when Dave makes the introduction."

Business VIDEO part 4

Business VIDEO part 1

Business VIDEO part 3

International Sales Key For Consumer Staples To Keep Pace

The sector has been outperforming, but slow growth at home means even more needs to come from emerging markets.

In Pictures: Ten Consumer Staples Stocks Set Up For Success

In the hunt for elusive profits in a sector that relies on consumer demand, the companies poised to outperform are those that are less dependent on slow-growing developed markets and more exposed to faster-growing emerging markets.
Despite the challenges facing the U.S. and Europe, consumer staples companies have outperformed the broader market this year. Accounting for 11.3% of the S&P 500, the sector has risen at a 5.7% clip in 2010, better than the 3% advance for the index as a whole. Looking ahead, analysts think the biggest winners are going to be the companies that have moved aggressively into Asian and Latin American that are poised to lead the way in consumption growth for the next several years.

"Most emerging markets are healthier now than they were 10 months ago," says Citi analyst Wendy Nicholson. For companies like Avon Products ( AVP - news - people ), which has invested more than 90% of its business in emerging markets and 50% in Latin America alone, the potential to offset weaker profits in developed economies with strength from newer markets is good.
One of the biggest benefits to U.S. companies with strong operations abroad has been the decline of the dollar, and the correlation between rising consumer staples stocks and the sliding greenback is readily apparent. As just one example, Avon shares are up 32% since June 1, while the dollar is down 12% against the euro. "That the dollar has fallen over the last 6 months is a huge positive for these companies. Now they owe us an update in the way this has affected their top and bottom lines," Nicholson says.
In Pictures: 10 Consumer Staples Stocks Set Up For Success

BATS Real-Time Market Data by Xignite

Morningstar analyst Philip Gorham recommends looking at companies with "broad geographic footprints" for the best performers this earnings season. The largest consumer staples companies, like Coca-Cola ( KO - news - people ) and PepsiCo ( PEP - news - people ), have focused in markets like Latin America and Asia for 30-40% of their top lines. Emerging markets generate higher operating margins than the U.S., thanks to stronger currencies and lower production costs

Business VIDEO part 2

Emerging Market Bonds Still A Buy

Should you invest in emerging market bonds?

Kristin Ceva says emerging markets are likely to keep creditors happy.

Americans have poured billions of dollars into emerging market bond funds this year in their global search for high yields. Are they setting themselves up for disaster as developing countries revert to their bad old habit of stiffing foreign creditors?
Not likely, says Kristin Ceva, comanager of the $635 million (assets) Payden Emerging Markets Bond Fund. Ceva, who holds a Stanford Ph.D. in international politics and studied Mexico's financial system as a Fulbright scholar, undoubtedly has an interest in talking up emerging markets. But she also makes an impressive case that they offer attractive fixed-income deals relative to the U.S.

The balance sheets of many developing countries' governments, she notes, are far healthier than Uncle Sam's. Total emerging market government debt averages less than 50% of gross domestic product, compared to more than 100% for the G3 (the U.S., Europe and Japan). Meanwhile sovereign emerging market bonds (about half of which are investment grade) are paying around three percentage points more than the 2.5% investors can earn from the comparable ten-year U.S. Treasurys.
"On any measure of debt sustainability, whether it's GDP, overall debt levels or GDP growth, the emerging countries are about twice as good as what you're seeing in developed markets," says Ceva.
There are risks, of course. Many of the countries Ceva is investing in have defaulted or restructured debt in recent years. The Asian financial crisis sent the value of emerging debt into a tailspin in 1997. A year later Russia defaulted on its domestic debt and halted bank payments to foreign creditors. The Dominican Republic restructured its foreign debt a mere five years ago.
Another reason for caution is that the popularity of emerging market bonds itself increases the risks. Americans have hiked their holdings of emerging market debt nearly sevenfold over the past decade to $34 billion, including a $5 billion inflow this year alone, according to Lipper Analytics. It's probably no coincidence that during that time emerging market bond funds have returned an annual average of 11.5%, or more than twice the 5.2% bond fund average.

Investing

As prices have risen yield spreads over Treasurys have narrowed for sovereign emerging market bonds. Their three percentage point yield premium means the emerging bonds are hovering close to their long-term average but double where they were during the frothy precrash days of 2007.
Pricing may not yet be flashing red, but there are other concerns. Foreign investors have gotten fleeced in the past as inflation in places like Brazil and Turkey has undermined the value of local currencies relative to the dollar. Investors can limit such risk by buying greenback-denominated "dollar pay" bonds. Owners still get burned, of course, if the issuer fails to come up with the dollars to honor its debts. That helps explain why spendthrift Venezuela was forced to offer a whopping 15.25% coupon in August to unload $3 billion worth of dollar-pay bonds.
So far, the dollar-pay pool is shallow, with only about $500 billion worth outstanding. That compares to $2.5 trillion worth of local denomination emerging market bonds, Ceva says.

Why Your State Income Tax Bill Could Change In 2011

Republican gains in states could mean an end to new millionaire taxes and possibly rate cuts.

In Pictures: 10 Highest State Income Tax Rates For 2011

Do you know if your state income taxes are going up or down next year? The results of the midterm elections provide some clues and one clear answer--wealthy residents of no-income-tax Washington State won't be facing a new tax, since voters there nixed a ballot initiative, backed by Bill Gates Sr. (and his son Bill Gates, the cofounder of Microsoft ( MSFT - news - people )) that would have imposed a 9% tax on income over $1 million per couple. (The initiative was opposed by Microsoft itself, Microsoft CEO Steve Ballmer, Amazon.com ( AMZN - news - people ) CEO Jeff Bezos, and such major corporations as Boeing ( BA - news - people ) and Weyerhaeuser ( WY - news - people ).)
Clues as to what might be in store for tax rates elsewhere come from Republicans' sweeping gains in state capitols and from the promises of some of the governors-elect. Pay close attention if you're thinking of retiring to another state, if you live in a multistate metropolis, or if you're self-employed, independently wealthy, or otherwise have options as to where you live. Before you make any retirement moves, check out the special rates some states offer retirees. For more tips for tax refugees, click here.

So just what have the new governors-elect been saying?
--Sam Brownback, Republican Governor-elect in Kansas (replacing a Democrat) is talking about using his party's big majorities to cut the state's income tax rate, which now tops out at 6.45%.

-- Maine's Republican Governor-elect Paul LePage has said he'd like to cut the state's top income tax rate from 8.5% to 5%. (Maine's legislature flipped from Democratic to Republican too.)
--Illinois incumbent Democratic Governor Pat Quinn (who narrowly beat Republican Bill Brady) is calling to increase the state's flat 3% income tax, but Democratic House Speaker Michael Madigan is skeptical that a tax hike has enough support to pass.

--Minnesota Democratic Governor-elect Mark Dayton (unless a pending recount reverses the results) ran on a platform of higher taxes, saying in his campaign ads, "We're going to make the rich pay their fair share of taxes." That's despite the fact that Minnesota, with a top rate of 7.85%, is already on Forbes' list of the highest state income tax rates for 2011.
To be sure, Dayton's tax the rich rhetoric echoes what's happened in other states during the last three years of state budget crisis and tax hikes. Just this past January, Oregon voters approved (over the opposition of Nike ( NKE - news - people ) founder Philip Knight) an increase in the tax on income over $500,000 per couple from 9% to 11%.
But with Republicans increasing their control of both governorships and state houses (they will have single party control in 20 states), that trend has likely peaked.

The Best Business Schools

Where your investment in an M.B.A. pays off the most.

Our sixth biennial ranking of business schools, based on the return on investment graduates have achieved after five years, shows that alumni of the best programs still command huge salaries with their degrees. Graduates of our five top-ranked M.B.A. programs typically earn more than $200,000 once they're five years out of school. But rising tuitions and higher pre-M.B.A. salaries mean it's taking longer for them to get a solid payback on their investment in going back to school.

IN PICTURES

Best U.S. Business Schools

The Top Non-U.S. One-Year Business Schools

The Top Non-U.S. Two-Year Business Schools

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• Rank
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• Tuition
• 5-Yr Gain
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Making The M.B.A. Worthwhile

Kurt Badenhausen

The financial crisis has business schools under pressure to teach their students something tangible and worthwhile.

How To Get Into Business School

Matt Symonds

It's more competitive than ever, but you can give yourself advantages.

Insead: Entrepreneur U

Christina Settimi

With its massive alumni network, Insead is becoming a breeding ground for global entrepreneurs.

Merck’s New Drug Could End The Stent Business

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AHA 2010
Millions of heart patients have gotten cardiac stents placed in their arteries to stave off chest pain from angina and open dangerously-clogged arteries. The multibillion dollar business is dominated by companies such as Johnson & Johnson and Boston Scientific.
But if a new drug from Merck lives up to its early promise, it could put much of the stent industry out of business.
The drug, called anacetrapib, showed a remarkable ability to prevent the need for stent operations and bypass surgery in a preliminary study  presented today at a big meeting of cardiologists in Chicago. In the 1600 person study, the drug slashed the number of such procedures by an astonishing 70%, with no apparent major safety risks.
The results could revive hopes for a notorious class of drugs that aim to boost good cholesterol particles, which help clear cholesterol out of the arteries.  The Merck compound is in the same class of drugs as a Pfizer drug called torcetrapib that was hailed a few years ago as the next big heart drug. Then it turned out to cause heart attacks and deaths in a giant trial. The colossal failure cast a pall over the good cholesterol field and raised questions over whether doctors  understand how good cholesterol works.
Reassuringly, the Merck drug showed no signs of  raising blood pressure, altering electrolytes, or interfering with the hormone aldosterone, top cardiologists said–problems that occurred with the Pfizer drug. Patients on the drug showed a tendency towards a slightly lower rate of heart attacks and unstable angina, although this was not statistically significant.
“It is very reassuring and very encouraging,” said Harvard cardiologist Christopher Cannon, who led the Merck-sponsored trial. Merck plans to move into a definitive larger trial based on the result.
Overall, Merck and Harvard researchers calculated that they could rule out with 95% certainty the possibility that anacetrapib could cause  the 25% increase in heart attacks and other cardiovascular events seen with torcetrapib. But the current study cannot rule out that the Merck drug increases other causes of death, as the Pfizer drug appeared to do. In the big Pfizer study, there appeared to be higher rates of deaths from both cancer and infections in group of patients who got torcetrapib. It is not clear why this happened, but HDL has been theorized to play a immune system role; interfering with this could cause problems.
In the Merck study, there were 11 deaths in patients on the study drug and 8 deaths among patients who got placebo. This difference was not statistically meaningful.
In the trial, the Merck drug caused a remarkable 138% increase in good cholesterol, pushing people up into supernormal levels above 100. A typical level is more like 50 or 60. “It is just off the charts HDL levels,” said Harvard’s Cannon, a cardiologist at Harvard’s Brigham and Women’s Hospital. “Lots of people are trying to work on raising good cholesterol, but this drug is way more potent than anything we have seen.” Other companies testing good cholesterol drugs include Roche (which has a directly competing medicine in final trials), and tiny Resverlogix, which is working on a totally different mechanism to  alter good cholesterol.
Based on the study Merck said it will move ahead with a massive 30,000 patient study led by Oxford University to prove that anacetrapib can lower heart risk without causing other adverse effects. This will take around five years and will likely cost hundreds of millions of dollars.
“It is a sizable risk that Merck is taking,” said Merck vice president Yale Mitchel. “We are confident we are not going to see the same types of problems that were seen with torcetrapib. But we don’t know whether the drug will work or not.” Only by doing the giant trial can it get an answer.
There have been questions raised whether torcetrapib-style drugs make larger amounts of defective good cholesterol particles that can’t do the job properly.  Cannon noted that recent lab studies appear to indicate that anacetrapib makes “big and puffy” HDL particles that seemed to function properly in removing cholesterol from the arteries.
Today’s Merck study was also published in the New England Journal of Medicine.

How Taxpayers Win Even If GM Doesn’t Pay Them Back In Full

GM's Detroit headquarters

General Motors prepared to return to the public markets Thursday after pricing its initial public stock offering at $33 a share late Wednesday. The IPO, likely to be the largest-ever, will allow the federal government to recoup about $13.6 billion of the $49.5 billion in bailout funds it provided to keep GM afloat in 2009.
But the Center for Automotive Research, in a study published Wednesday, concluded that even if the U.S. Treasury doesn’t recoup its entire $80 billion investment in the auto sector, the economy will still be better off than if it had allowed the companies to collapse.
Of course, it’s impossible to know precisely what would have happened if the Bush and Obama administrations had chosen not to bail out General Motors and Chrysler. But CAR takes a shot at measuring the magnitude of the economic disaster averted and whether it was worth the cost.
The Ann Arbor, Mich.-based non-profit, which made headlines in 2008 and 2009 for its dire predictions of economic catastrophe should one or both automakers fail, now has the benefit of time to look back at what really happened. It compared the impact of the $80 billion in aid provided to the auto industry with actual economic performance for 2009 and 2010.
As it turned out, the economy performed better than CAR had expected, and although automotive sales were weaker, U.S. automakers’ market share held up better than anticipated. Thus the bailout “was clearly a very successful policy intervention at a critical time,” said Kristin Dziczek, director of CAR’s labor and industry group.
By allowing for swift and orderly bankruptcy proceedings (as opposed to a drawn-out liquidation), the federal aid to Detroit averted the loss of 1.14 million jobs in 2009, and another 314,400 in 2010, the study found.
Jobs disappeared, for sure, during the government-brokered bankruptcies. Using historical employment and economic data, CAR estimates that 23,900 jobs were lost at GM and Chrysler by the end of 2009, and, although there has been some new hiring this year, a net of 21,900 jobs will have been shed at these companies by the end of 2010. For every auto job lost, many others are lost in related industries. Overall, CAR estimates the economy will have lost 171,000 jobs as of the end of 2010, which is less than the nearly 180,000 it had projected in a quick bankruptcy.
But several million jobs would have been lost if the carmakers had failed, CAR says. So the government intervention prevented the loss of $96.5 billion in lost personal income. The net impact to the federal government—in terms of changes in transfer payments, social security receipts and personal income taxes—was $21.6 billion in 2009 and $7.0 billion in 2010.
“To date, $13.4 billion in principal has been repaid on the government’s $80 billion U.S. investment in the automotive industry. This study shows that $28.6 billion in net losses to the U.S. Treasury were averted by the policy to provide federal assistance to General Motors and Chrysler,” said Sean McAlinden, executive vice president of research and chief economist at CAR. “With this in mind, CAR’s analysis shows the government need only recover $38 billion of the remaining $66.6 billion outstanding investment in this industry to achieve a two-year break-even.”
If the Treasury recovers just 57 cents on the dollar or more in upcoming equity sales, the public will have been made fully whole, CAR concluded.
The U.S. will raise about $13.6 billion through GM’s IPO, reducing its stake from 61% to around 33%. It has already recovered $9.5 billion, including interest, of the $49.5 billion it has invested in GM. It’ll sell the remaining shares in subsequent stock offerings over the next few years.
The balance of the government’s aid to the auto sector includes $12.1 billion for Chrysler, $1.5 billion for Chrysler Financial, $17.7 billion for GMAC (now Ally Bank), $600 million for government-backed warranties and $400 million to prop up ailing auto suppliers. Both Ally and Chrysler plan IPOs in the next year or so, allowing the government to recoup more of its bailout funds.

Behold America’s Most Expensive Home: It’s A Shack.

Small, cute and pricey in Carpinteria, Calif.

What’s the most expensive home in the U.S.? Back in May, Forbes reported that it was the Los Angeles home being sold for $150 million by the late television producer Aaron Spelling.
Not even close.
The Spelling mansion has 56,500 square feet of space covering 123 rooms, 16 carports and a bowling alley. At about $2,700 a square foot, the house is not so terribly expensive. Throw in the fact that it rests on 4.6 acres in Los Angeles’ Holmby Hills neighborhood, and there’s an argument for this being a pretty decent bargain.
To find really expensive real estate, think small. We asked our real estate analyst friends at Seattle-based Zillow.com to sift through the priciest realty listings in search of the most expensive one with less than 1,000 square feet of living space. They turned up all kinds of shacks, hovels and cabins trading for more than $1 million, including a half-dozen or so that are more expensive on a per-square foot basis than Spelling’s Manor.
It probably won’t surprise you to discover that pound-for-pound, the most expensive real estate listing in the U.S. is closer to the beach than the Spelling home. Wealthy homebuyers are obsessed with ocean views. Even if local public-access rules allow beachgoers to stroll by and stare while the beachfront homeowners pour milk on their shredded wheat, they’ll pay a huge premium for beachfront.
An hour’s drive west of Spelling’s old home lies the tony beach community of Carpinteria. There, you’ll find a humble beach shack that has been sitting at 3485 Padaro Ln. since it was first constructed a century ago. The grandchildren of the man who originally constructed this abode are selling. And at $5.3 million, it may be the most expensive real estate listing in the U.S.
Officially, this home has just 651 square feet of space–less space than a regulation squash court. The agent who’s handling the sale, John Henderson, explains that the house’s true square footage is 750 square feet. But even so, the asking price on this property works out to $7,060 per square foot, nearly three times what Spelling’s widow wants for their home.
But how you calculate the value of this Carpinteria home depends on how you look at it. “It’s got probably the smallest master bedroom I’ve ever seen,” Henderson admits. “But it’s on nearly half an acre of land and it’s got 92 square feet of beachfront.” That’s twice the frontage that neighboring properties have, he says. And local officials have okayed a plan to tear down the existing property and replace it with a 2,600 square foot house.
So maybe it’s not so expensive. If you plunk down $5.3 million for this house and spend $300 a square foot building a high-end home that fits with the approved plans, the $6.1 million total investment will bring your per-square-foot price down to $2,300.
But it looks like this still may end up being the most expensive home in America anyway. Henderson reports that about half the homebuyers he’s shown the property to say they’d like to keep the existing building in place. The antique shack is small, but polished. It’s charming enough to command a $600-a-night rate from the occasional vacation-home renter during California’s peak season.
If there’s a lesson in all this, it’s that we often forget how large a contribution land makes towards the value of real estate. There’s a 630 square foot house for sale at 15415 Eastvale Rd. in Poway, Calif. The sellers want $2.3 million. There’s no beach in Poway, so the asking price seems nuts. Alas, the home is sitting on 8.25 acres of land. The land might be subdivided into additional lots someday. The house is an afterthought.
So if we discount for land value, what is the most expensive home in the U.S., then? Hard to say. The house in Carpinteria still looks pricey. But a more expensive home might be a 702-square-foot condo at 1528 Miramar Bch. in Santa Barbara, Calif. The sellers want $2.2 million and the unit is sitting on just 1,742 square feet of land.
Here’s one more question about these high-value micro-homes: Why isn’t anybody building houses like these anymore? The habit of homebuilders is to construct the largest homes they possibly can on the land they get. They’re responding to consumer tastes, of course. But consumers seem to be downsizing these days. Maybe it’s time to bring back the 800-square-foot house. Some of the ones Zillow sent along are awfully cute. (Hey, it worked for BMW Group’s Mini, right?)
Whatever. The point is that there are very small homes for sale at prices far in excess of the $2,700-a-square-foot price at which the Spelling mansion is being offered. I’m not saying we got our story about the Spelling mansion wrong. But I look at these listings and it makes me think.
What follows is a list that Zillow sent. All are for sale for more than $1 million. All appear to have less than 800 square feet of living space. (I say “appear to have” because the information we have is from public records. When one investigates these high-end micro-homes, it often turns out that they’re a little bigger than what the public records state.)
319 Pacific Ave., Solana Beach, Calif., asking $2.4 million.
59-279 Ke Nui Rd., Haleiwa, Hawaii, asking $2.3 million
1528 Miramar Bch., Unit C,  Santa Barbara, Calif., asking $2.2 million
585 Herring Creek Rd., Vineyard Haven, Mass., asking $2.2 million
909 S Pacific St., Oceanside, Calif., asking $1.9 million.
158 Sunset Ln., Mantoloking, N.J., asking $1.9 million

Why Is Fox News Suddenly Owning Up to Its Politics?

Image via CrunchBase

Something awfully interesting is going on at Fox News these days. Ever since Rupert Murdoch founded his cable network, it has driven liberal critics into apoplexy by hanging the slogan “Fair and Balanced” on programming that tilted to the right — subtly during daytime hours, brazenly in prime time. While Murdoch himself has always been open about his politics, no matter what, you couldn’t get Fox News chief Roger Ailes or anyone who worked for him to admit the obvious: It’s a conservative channel that prefers Republicans to Democrats. Any perception that it was so, Ailes puckishly insisted, was only because we’ve all grown to used to the liberal slant of every other network.
Officially, none of that has changed. As a practical matter, however, Murdoch and Ailes seem to be wavering in their commitment to plausible deniability. It started, perhaps, last year, when Alan Colmes, the sole liberal fig leaf in prime time, departed “Hannity and Colmes” and was not replaced. Then there were News Corp.’s seven-figure donations to the Republican Governors Association and the Chamber of Commerce, and Murdoch’s slightly kooky comments about President Obama’s supposed racism. And now Ailes is out there saying startlingly un-fair-and-balanced things to The Daily Beast’s Howard Kurtz.
It’s a commonplace by now at Fox that the President is a socialist. But according to Ailes, Obama is such a socialist that “[h]e had to be told by the French and the Germans that his socialism was too far left for them to deal with.” Ailes also says that Obama “has a different belief system than most Americans,” calls President Bush a “poor guy” and freely admits to coaching Glenn Beck to go easier on Republicans in order to avoid alienating his core audience. And that’s just part one of a two-part interview.
Shocking? Not so much to Fox insiders. “Ailes is always like that, but they don’t usually don’t trot him out,” says one. “He’s says that kind of thing in the hallways all the time. He’s somewhere to the right of Atilla the Hun.”
Why are Murdoch and Ailes parting the veil after all this time? There are a few possibilities. It could be that they see this year’s swing in the electorate as a vindication of their worldview; in other words, Ailes truly believes simply being objective when he says Obama is too socialist for the French. It could be they want due credit for what they’ve done: building a partisan media apparatus that doesn’t just cover electoral shifts — it produces them.
Or it could be age. Ailes is 70; Murdoch, 79. One of the nice things about getting old, we’re told, is you don’t care so much what people think about you anymore. Fox News destroys CNN and MSNBC in the ratings every single night and brings in over $500 million in profits a year for News Corp. Maybe Murdoch and Ailes, in the twilight of their careers, just don’t give a fig what people say.

Mark Zuckerberg Grows Up, Draws Praise For Impressive Interview

Image via CrunchBase

His face was flushed, and he was sweating profusely while trying to answer even the easy questions. It was just earlier this year that Facebook chief executive Mark Zuckerberg looked like he was about to have a meltdown on stage while being interviewed at the Dow Jones D8 Conference in June.
And now look at him. Being interviewed on Tuesday on stage at the Web 2.0 conference in San Francisco, Zuckerberg was composed, calm and even possessed of a sense of humor and self-deprecation that’s been missing from his previous public appearances. In the past, Zuckerberg has been criticized as being awkward and rambling in these interviews, an engineer who’s more comfortable focusing on product than tackling and defending the big policy issues that Facebook faces.
But the old Zuckerberg was gone today, replaced by a confident speaker who was able to handle most of the tough questions — and there were a number of them from the hosts, Tim O’Reilly and John Battelle, and the audience.
Tackling the notion that Facebook tends to ask for forgiveness rather than permission when launching new features on the service that users may not like, Zuckerberg was able to turn the dialog into a discussion about how Facebook is on the cutting edge of resolving the tension behind what’s private and what’s not in the Web 2.0 era. “Frankly it’s one of the reasons why being at Facebook is so exciting,” Zuckerberg said. “We’re at the forefront of these unsolved issues.”
But he was also self-deprecating and humble, admitting to missteps, past and future: “Every mistake you could probably make, I’ve made, or will make,” he said, adding, “If anything, the Facebook story is a great example how if you’re building a product that people love, you can make a lot of mistakes.”
When the conversation turned to the “Points of Control” map that looks at the power consolidation by large corporations and organizations on the internet, Zuckerberg adeptly replied that the uncharted territory — areas yet to be explored or discovered online — should be the biggest part of the map. The audience greeted this with applause, while the hosts nodded in agreement.
Real-time responses on Twitter during Zuckerberg’s interview were generally very positive as well.
“God I Swear this is the best Zuckerberg interview I have ever seen,” tweeted @andytelasai. Another Twitter user, @dave_sloan: “Zuck is KILLING this interview.”
Dani Dudeck, general manager of corporate communications at social games company Zynga tweeted, “every time mark speaks he looks more comfortable & thrilled about what they’re building, facebook is on such a product tear right now.”
The transformation you are seeing is in almost all certainty the result of much coaching and training. But that doesn’t make it any less impressive — or important. Many have criticized the 26-year-old CEO in the past as being too immature and not articulate enough to lead the fast-growing company.
But after the interview, some are taking notice and changing their tune.
“wow – Zuck all grown up. He rocked the interview. Very very impressive,” tweeted @chrisalbinson, whose profile lists him as the managing director of Silicon Valley venture capital firm Panorama Capital.
“Zuck passes the grown-up company CEO test: He’s articulate, unfazed, and stays on message even when asked to defend the indefensible,” tweeted @antonejohnson, whose profile lists him as the founding principal of a business and IP law firm in San Francisco and Santa Moncia.
To be sure, Zuckerberg’s public speaking skills still leave room for improvement. The CEO still doesn’t get to the point in his answers quickly enough, and had a few awkward moments here and there. When asked a question about his thoughts on the business social graph, Zuckerberg said he didn’t understand the question, and later attributed part of the problem to not being able to hear the question well because of the poor acoustics in the hall, making it look like a dodge.
But overall, it was a strong showing from Zuckerberg, especially compared to his past interviews. As Facebook continues to figure out where to go from reaching 500 million users (and 200 million mobile users), it will need strong leadership and direction from the top. Until recently, it looked like Zuckerberg should consider stepping aside for the sake of company growth. Now, however, he may be just the man Facebook needs.

Hottest Young Royal, Prince William, To Wed

Image via Wikipedia

Back in July, the UK’s Prince William topped Forbes’ “World’s Hottest Young Royals” list based on furious speculation over whether the world’s most eligible royal would wed longtime love, Kate Middleton. Now it’s official: the announcement from his father, Prince Charles, came today; his office announced the engagement of Prince William to Miss Catherine Middleton. The pair were reportedly were engaged in Kenya; the wedding is set for next summer.
Royals watchers will have a field day speculating about wedding plans from venue to dress designer comparing it with the fairytale nuptials of Prince Charles and Princess Diana in 1981.

Twenty-One Cool Products And Services You Can Get For Free

From entertainment and financial advice to health care and technology.

In Pictures: 21 Cool Products And Services You Can Get For Free

The battered economy has taken the stigma out of bargain-hunting. Some might even say that saving a few bucks is in style.
We're not talking about buying nine cups of coffee and getting the 10th free--we're talking about free entertainment, financial advice, health care, technology and more.

Look hard enough and you can find a bevy of 100% discounts, especially online. "Facebook is a great source of freebies right now, as so many brands try to attract fans and establish themselves," says Julia Scott, who runs the popular blog BargainBabe.com.
In Pictures: 21 Cool Products And Services You Can Get For Free

We went freebie fishing and filled the net. Read on for a sampling. For the entire list, click here.
A word of warning, adds Scott: "There are probably more scams out there than there are legit offers, so it is important to be careful." Her advice: When you see a deal that looks too good to be true, always look for customer service e-mail, telephone number and a promised delivery date. Also look for eligibility requirements (by age or residence) or other exclusions; their absence lends a whiff of impropriety.

Among the legitimate goods you can get gratis:
Financial Services: Tax Preparation
Every year the Internal Revenue Service gathers an army of volunteers to dispense free tax advice and preparation services to the elderly, military personnel and their families, and households making below $49,000 a year. (For more, click here.) Another option: E-mail a question to Turbo Tax before the Jan. 31, 2011, and one of its tax experts will call you back with an answer--free. You only get one question, so make it a good one!
Financial Services: Credit Monitoring
The first step to improving your finances is figuring out where you stand. Get free credit reports once a year from AnnualCreditReport.com. For more consistent checkups, keep daily tabs on your status with Credit Karma.