DealBook: Former SAC Trader Found Guilty of Insider Trading

DealBook: Former Trader Is Found Liable in Fraud Case

Pogue’s Posts Blog: What Readers Found in Facebook’s ‘Other’ Folder

A couple of days ago, I wrote this post about the hidden “Other” folder on Facebook. This secret folder contains all messages sent to you by anybody who’s not among your Facebook friends. Because you’ve probably never looked in there, it might contain really important messages that you’ve never seen.

Hundreds of you wrote to report what you found in there. Some found nothing there. Some found only spam. Some found awkwardly written mash notes: “They were all men who wanted to get to know me and commented on my looks,” wrote one reader.

In all of those cases, the Other folder is doing its job.

But many more of you wrote that, sure enough, your Other folder contained important, now outdated messages, some with sad results:

• “Notification of the death of a friend was hidden in my Other box. I had been very hurt at not being told, and actually missed her funeral.

• “Thank you, David. I will never be able to say that enough. Our son died very unexpectedly on New Year’s Eve past (http://MackBrady.com), and thanks to your note, I am just now seeing dozens and dozens of kind and wonderful messages of sympathy and support.”

• “I learned of the death of a former, valued colleague two months ago.”

A number of you discovered, too late, that you’d won prizes or jobs:

• “Shoot, I just discovered I had won a contest for Knicks tickets, but the message was in that ‘Other’ folder. It was from 2011. Grrrr!”

• “Damn, I discovered that a year ago, I won free tickets to the theater and I never knew.”

• “I just checked my ‘Other’ folder and found out that I won a free high-end kitchen faucet for a contest I entered last year. Rats.”

• “Just looked at my ‘Other’ messages and found one about a job opening — in 2011. Think it’s been filled?”

Many of you discovered greetings from long-lost friends or students:

• “I found one from someone I had worked with in Viet Nam in 1970 — he had sent me a message to reestablish contact over two years ago. Glad I found it. Hope he still reads his messages on Facebook.”

• “Whoa! There’s tons of important messages in here. Former students of mine were trying to reach out to me. I can’t believe Facebook doesn’t notify you in any way about these.”

• “Just found a message from a long-lost friend in my ‘Other’ folder. I’d been trying to find her for more than a decade with no success. ??David Pogue, when she and I finally reunite, our first glass will be raised to you!”

• “I reconnected with an old penpal who I haven’t heard from in 15 years thanks to your tip on the ‘Other’ folder!”

• “I logged into it and found a message from an old acquaintance from 40 years ago. It portends an interesting catching up on each other.”

There were missed social opportunities:

• “Just discovered my Other folder! Missed an amazing party (damn!) and found a ton of messages dating back several years!! How the hell did that happen?! I am a savvy social media user and I’m astonished at this!”

• “Whoa. I had 58 messages there, one being an invitation to a bridal shower.”

And there were Good Samaritans trying to return lost credit cards and wallets:

• “Unbelievable! My husband’s wallet was lost and presumed stolen — someone had found it a year ago and sent us a Facebook message, which was hidden until now! Thanks so much.”

• “Just checked and found a message from someone telling me that they found my lost wallet…a year ago.? They really need to redo some thinking on that ‘other’ folder.”

• “A couple of years ago, I stupidly left my card in an ATM while traveling in Argentina. ?I discovered this ‘Other’ inbox a couple of months ago, and my messages included one from a very nice lady in Buenos Aires, who had a) found my card, b) not stolen all my money and c) actually bothered to track me down through Facebook to see if I wanted to reclaim it. Unfortunately, I found out about 18 months too late.”

Several of you found yourselves in the same position I did: feeling bad that people thought they were being ignored:

• “Now I have to apologize to several past acquaintances and let them know I haven’t been blowing them off!”

Several readers wanted to know how they could access the Other folder on their phones or tablets.

The answer: you can’t. The Facebook apps don’t permit you to see the Other folder. (You can, of course, go to www.facebook.com in your phone or tablet’s Web browser — don’t use the app — to work on the Other folder there.)

There was also a comment from Jimmy Chen, who works for the Messages team at Facebook. He wrote:

• “Our priority is delivering the most relevant messages to you while keeping lower-quality messages out. We use a number of factors to determine that, the most important of which is friendship. If you’re already friends with the sender, or you have a mutual friend, then the message will land in your inbox.”

Mr. Chen was also concerned by the implication that the “Other” folder and the $1 charge to avoid it were created at the same time. They weren’t:

• “The Other folder has existed for a long time before we introduced that ability. The point of being able to pay $1 to deliver to Inbox is that sometimes there are legitimate cases where you’d want to message a stranger — for example, you discovered a long-lost friend, or you found someone’s wallet on the bus.”

One reader, Ilya, had a thoughtful solution to the $1 problem:

• “If the goal really is to prevent spam and not to raise revenue, why not refund the charge if the user replies to the message? In fact, why not let each user set his or her own amount for accepting messages from strangers? The deposit is refunded if the user replies (or just clicks a button acknowledging the message as valid).”

I love that idea! How about it, Jimmy?

I also heard from Jonathan Thaw, who works in Facebook’s public relations department. He said these critiques will be passed along to Facebook’s Messages team. He also pointed out that, in fact, one of Facebook’s preference settings lets you change how much mail goes into the “Other” folder. (When you’re viewing your messages, click the tiny padlock next to your name at top left of the screen. Click “Who can contact me?”)

You have only two options here: Basic (the factory setting, the one causing all the problems) and Strict.

Unfortunately, the Strict option puts even more messages into the “Other” folder! It’s making the problem of missed messages worse. (A warning there even says: “You may miss messages from other people you know.”)

Look: it’s clear that the “Other”-folder system is broken in a very upsetting way. It’s preventing important connections, blocking the very communications that Facebook was created to foster.

Let’s hope that Facebook finds a better solution to blocking unwanted messages. Because right now, the secret Other folder is swallowing up a lot more than spam.

NYC High Gun-Permit Fee Found Constitutional

The high fee New York City charges for a residential firearm permit does not violate the Second Amendment to the U.S. Constitution, the U.S. Court of Appeals for the Second Circuit ruled Tuesday.

Flaws Found in Idea of Geography-Based Medicare Payments

The report’s authors, who include prominent health policy experts, doctors and consumer advocates, were responding to the argument that Medicare should pay higher levels of reimbursement to areas of the country that deliver measurably good care at low cost and less to regions where costs are high and outcomes are poor.

“Areas don’t make decisions; doctors, hospitals and delivery systems make decisions,” said Joseph P. Newhouse, a health policy professor at the Harvard School of Public Health who is chairman of the committee. Incentives, he said, are more appropriately aimed at the providers responsible for care.

The study was conducted at the request of the secretary of health and human services, Kathleen Sebelius, in response to a push by some members of Congress to revisit how Medicare pays hospitals and doctors.

Influential researchers at Dartmouth have long identified significant variations in health spending across the country, outlined in a document known as the Dartmouth Atlas. It has prompted a debate in the world of health care over whether the current Medicare payment system does too little to reward hospitals and doctors in states like Minnesota and Iowa, which have been able to hold medical spending down while still delivering good levels of care.

Congress has been considering proposals that would shift tens of billions of dollars of Medicare money away from doctors and hospitals in high-cost areas, like New York and Florida, to lower-cost regions.

As Medicare tries to find ways of moving beyond the current fee-for-service system, in which doctors and hospitals benefit by offering a high volume of services, there has been considerable debate over whether rewarding health systems based on their geography would be one way to encourage efficiency.

Three years ago, House members from states seen as low cost formed a quality-care coalition to help push for changes to Medicare payments.

“Continuing to pay health care providers for bad outcomes — while punishing states like Minnesota where doctors provide high-quality, low-cost care — does nothing to address Medicare’s solvency,” said Representative Betty McCollum, Democrat of Minnesota, one of the Congressional leaders of the coalition, in a statement responding to the report. “Congress needs to demand comprehensive, value-based payment reforms.”

Michael Richards, executive director of external affairs at Gundersen Health Systems, a member of the coalition, concurred, saying: “The report confirms there is a wide variation in Medicare spending across the country. The current fee-for-service system rewards high utilization of Medicare services.” But the authors of the interim report found that there was too much variation within a region to justify a payment policy aimed at all the hospitals and doctors within the area. Just as there were efficient providers in high-cost areas, there were inefficient ones in low-cost areas.

“There’s just a huge amount of difference,” said Dr. Peter B. Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan-Kettering Cancer Center in New York, who is also a member of the committee. “All you’re seeing is a map with averages.”

But Mr. Newhouse said existing programs that reward individual hospitals and doctors for better or more efficient care made more sense than a regional approach. “If one were to target at the delivery system level, that would benefit the high-value regions,” he said.

Federal officials are reviewing the study, according to a spokeswoman. The final report, which will include explicit recommendations, is expected this summer.

Ikea Withdraws Meatballs After Horse Meat Is Found

The retailer said it had removed some products from its stores in Sweden after the authorities in the Czech Republic detected horse meat in Ikea meatballs. The company said it had made the decision even though its own tests two weeks ago had not detected horse DNA.

Ikea also announced that it was stopping sales “of the concerned batch” of meatballs in Slovakia, the Czech Republic, Hungary, France, Britain, Portugal, Italy, Netherlands, Belgium, Spain, Greece, Cyprus and Ireland.

“We are now initiating further tests on the same production batch in which the Czech Republic authorities found indications of horse meat,” Ikea added in a statement. It said results were expected in the coming days.

“We do not tolerate any other ingredients than the ones stipulated in our recipes or specifications, secured through set standards, certifications and product analysis by accredited laboratories,” the statement said.

A traditional part of Swedish cuisine, meatballs are consumed in large quantities by customers in Ikea’s in-store cafeterias, and are also offered, frozen, for sale in Ikea’s in-store food shops for customers to take home.

The discovery came as European Union ministers were meeting in Brussels to discuss how to contain a crisis that began last month in Ireland, spread quickly to Britain, and has now expanded steadily across the Continent.

Around a dozen countries have now been affected, and the scandal has drawn attention to the problems of policing a complex supply chain for processed food in Europe.

The European Union introduced strict traceability laws for fresh beef after the outbreak of mad cow disease in the 1990’s. Similar controls are not in place for processed meat products.

While pressure for stricter rules is growing, some European nations worry that this could produce an unwieldy and impractical system.

In the meantime, European nations have stepped up DNA tests of meat products to determine their provenance, and these are producing more unwelcome discoveries every week.

Last week Nestlé, one of the best-known food companies in the world, said it was removing pasta meals from store shelves in Italy and Spain. Already most of the big supermarket chains in Britain have withdrawn products, including millions of hamburgers.

Last week, local authorities in Scotland were urged by a procurement agency not to use current stocks of frozen beef products, following the discovery of traces of horse DNA in a frozen burger taken from a Scottish school kitchen.

Scant Proof Is Found to Back Up Claims by Energy Drinks

Their rising popularity represents a generational shift in what people drink, and reflects a successful campaign to convince consumers, particularly teenagers, that the drinks provide a mental and physical edge.

The drinks are now under scrutiny by the Food and Drug Administration after reports of deaths and serious injuries that may be linked to their high caffeine levels. But however that review ends, one thing is clear, interviews with researchers and a review of scientific studies show: the energy drink industry is based on a brew of ingredients that, apart from caffeine, have little, if any benefit for consumers.

“If you had a cup of coffee you are going to affect metabolism in the same way,” said Dr. Robert W. Pettitt, an associate professor at Minnesota State University in Mankato, who has studied the drinks.

Energy drink companies have promoted their products not as caffeine-fueled concoctions but as specially engineered blends that provide something more. For example, producers claim that “Red Bull gives you wings,” that Rockstar Energy is “scientifically formulated” and Monster Energy is a “killer energy brew.” Representative Edward J. Markey of Massachusetts, a Democrat, has asked the government to investigate the industry’s marketing claims.

Promoting a message beyond caffeine has enabled the beverage makers to charge premium prices. A 16-ounce energy drink that sells for $2.99 a can contains about the same amount of caffeine as a tablet of NoDoz that costs 30 cents. Even Starbucks coffee is cheap by comparison; a 12-ounce cup that costs $1.85 has even more caffeine.

As with earlier elixirs, a dearth of evidence underlies such claims. Only a few human studies of energy drinks or the ingredients in them have been performed and they point to a similar conclusion, researchers say — that the beverages are mainly about caffeine.

Caffeine is called the world’s most widely used drug. A stimulant, it increases alertness, awareness and, if taken at the right time, improves athletic performance, studies show. Energy drink users feel its kick faster because the beverages are typically swallowed quickly or are sold as concentrates.

“These are caffeine delivery systems,” said Dr. Roland Griffiths, a researcher at Johns Hopkins University who has studied energy drinks. “They don’t want to say this is equivalent to a NoDoz because that is not a very sexy sales message.”

A scientist at the University of Wisconsin became puzzled as he researched an ingredient used in energy drinks like Red Bull, 5-Hour Energy and Monster Energy. The researcher, Dr. Craig A. Goodman, could not find any trials in humans of the additive, a substance with the tongue-twisting name of glucuronolactone that is related to glucose, a sugar. But Dr. Goodman, who had studied other energy drink ingredients, eventually found two 40-year-old studies from Japan that had examined it.

In the experiments, scientists injected large doses of the substance into laboratory rats. Afterward, the rats swam better. “I have no idea what it does in energy drinks,” Dr. Goodman said.

Energy drink manufacturers say it is their proprietary formulas, rather than specific ingredients, that provide users with physical and mental benefits. But that has not prevented them from implying otherwise.

Consider the case of taurine, an additive used in most energy products.

On its Web site, the producer of Red Bull, for example, states that “more than 2,500 reports have been published about taurine and its physiological effects,” including acting as a “detoxifying agent.” In addition, that company, Red Bull of Austria, points to a 2009 safety study by a European regulatory group that gave it a clean bill of health.

But Red Bull’s Web site does not mention reports by that same group, the European Food Safety Authority, which concluded that claims about the benefits in energy drinks lacked scientific support. Based on those findings, the European Commission has refused to approve claims that taurine helps maintain mental function and heart health and reduces muscle fatigue.

Taurine, an amino acidlike substance that got its name because it was first found in the bile of bulls, does play a role in bodily functions, and recent research suggests it might help prevent heart attacks in women with high cholesterol. However, most people get more than adequate amounts from foods like meat, experts said. And researchers added that those with heart problems who may need supplements would find far better sources than energy drinks.

Hiroko Tabuchi contributed reporting from Tokyo and Poypiti Amatatham from Bangkok.

Transcript of ’44 Bretton Woods Meeting Found at Treasury

Historians had never known that a transcript existed for the event held in the heat of World War II, when delegates from 44 allied nations fighting Hitler gathered in the mountains of New Hampshire to create the International Monetary Fund and the World Bank. But there were three copies in archives and libraries around Washington that had never been made public, until now.

“It’s as if someone handed us Madison’s notes on the debate over the Constitution,” said Eric Rauchway, a historian the University of California, Davis.

Economic historians who have viewed the transcript say it adds color and detail to the historical record, an already thick one given the many contemporaneous and subsequent accounts of Bretton Woods. The transcript seems to contain no great surprises, but it sheds light on the intense debates as the war raged abroad.

It depicts John Maynard Keynes, the British economist, hurrying to marshal support for the broad agreements on international finance. It underscores the tremendous power then wielded by Britain and, especially, the United States. It also shows the seeds of contemporary disputes being sown.

For instance, seven decades ago, a number of poorer or smaller countries were protesting their International Monetary Fund quotas, which determine power in the fund. Many of those countries, including China and India, are still pushing for more influence today.

In one section of the transcript, an American representative lays out a proposal for apportioning power in the fund and underscores what was at stake, with the war coming to its bloody climax in Europe.

“We fight together on sodden battlefields. We sail together on the majestic blue. We fly together in the ethereal sky,” said Fred M. Vinson, who later became chief justice of the United States. “The test of this conference is whether we can walk together, solve our economic problems, down the road to peace as we today march to victory.”

But the response was not one of absolute unity.

“In spite of the very eloquent and moving speech of the United States delegate, on behalf of the Iranian delegation I wish to state that the quota proposed for my country is entirely unsatisfactory,” a delegate from Tehran responded.

Then, a delegate from China added: “I hesitate greatly to sound a note of discord at this conference. It has been the effort of the Chinese delegation to promote harmony and the success of this great common enterprise. But every delegation has its difficulties.”

The Netherlands, Greece, Australia, India, Yugoslavia, New Zealand, France, Ethiopia, Norway and Britain then added their comments and objections. “I think that a lot of people have thought of Bretton Woods as being a stitch-up job between United Kingdom and the United States,” Mr. Rauchway said. “But that’s overstated, and it’s definitely visible in this transcript. You can see the poorer countries fighting their own corner.”

Kurt Schuler a Treasury Department economist, was browsing in an “out of the way” section of uncataloged material in the library two years ago when he came across the Bretton Woods document. He flipped through and saw some remarks by Keynes that he was not familiar with, sort of the economists’ equivalent of a Bob Dylan fan finding unknown lyrics.

“I checked them against Keynes’s collected works,” Mr. Schuler said. “And I knew I had something.”

His research revealed that there were three copies of the transcript that scores of economic historians were not aware of: the version at the Treasury Department; one in the National Archives; and the third in the International Monetary Fund archives.

In his spare time, Mr. Schuler set about turning the yellowed transcript into a book, with a co-editor, Andrew Rosenberg. It took a tremendous amount of work, Mr. Schuler said. They read the transcript aloud into transcription software. They added hyperlinks to documents referenced at the conference, and wrote summaries, annotations and historical notes.

This week, the polished transcript was published as an 800-page e-book by the Center for Financial Stability, a nonprofit group based in New York that researches financial markets, where Mr. Schuler is a senior fellow and Mr. Rosenberg a research associate.

“Everyone thinks they know what happened at Bretton Woods, but what they know has been filtered by generations of historical accounts,” Barry Eichengreen, a professor or economics and political science at the University of California, Berkeley, said in a statement. “International monetary history will never be the same.”

The transcript provides “insight in how it was that they were able to maintain a pace of work which allowed them to reach two really big agreements, on the I.M.F. and the World Bank, within a space of three weeks,” Mr. Schuler said. “Keynes was something of a task master,” he added.

Benn Steil, a senior fellow and director of international economics at the Council on Foreign Relations, said readers can see the British Empire “disintegrating before your eyes,” in the transcript. “The Indians are so vociferous that the British are ripping them off. The British are both furious and mortified that their colony would do this to them,” he said, describing a dispute over debts with the colonies.

“Bretton Woods was itself 95 percent Kabuki theater,” he said. “But it’s interesting Kabuki theater.”