Your Money: Questions Often Asked About Health Law

Those who managed to create accounts or peruse the plans offered in their state left with many questions about the Obama administration’s health care plan. Among them: What does all of this mean for my 26-year-old child, who is now too old to remain on my own policy? The premium subsidies are based on my income, but what if I have no idea what I may earn next year? How is “modified adjusted gross income” calculated anyway?

Last week, my column addressed the broad outlines of how the exchanges will work, from how the different tiers of coverage would be structured to what types of individuals would qualify for tax credits on their premiums.

Dozens of additional queries landed in my in-box this week. Here’s are some of the most frequently asked questions and an attempt at answering them:

Q. I haven’t seen any discussion about students. My son will be 26 next month, and thus can no longer be on my plan. He is a full-time student in another state and fully dependent on my financial support. Do you know where he fits into this system?

— Mark Alper, Berkeley, Ca.

A. Adult children lose coverage through a parent’s policy on their 26th birthday. But they can then immediately enroll on the exchange — even outside the open enrollment period, which ends on March 31. Individuals under age 30 may also qualify for a “catastrophic” plan, which carries a lower premium but a very high deductible (equivalent to the out-of-pocket maximum, or $6,350 for a single person, in 2014). Tax credits, however, cannot be applied to catastrophic plans.

Q. My difficulty and confusion is I don’t actually know what my annual income is or will be in the coming fiscal year. I am a freelance classical musician, meaning I have seasonal employment from as many as 20 employers in a year and I file tax returns in seven states and three countries.

— gibarian, San Francisco

A. The experts I spoke with said you needed to make your best educated guess when estimating your income. The exchange will verify it by checking your tax return from last year as well as your current income. (The federal government has contracts with firms that provide that information.) If your self-attested income varies by more than 10 percent when compared to those two sources, you will be asked to provide more documentation, according to a spokeswoman at the Department of Health and Human Services.

Q. I have very little annual personal income, but am fortunate to have other savings/resources that would allow me to pay for one of the better plans with higher premiums. (I have no access to any employer-sponsored plan). I am willing to enroll in one of these better plans on my state’s health exchange even if I don’t get any subsidy for it. (I seem to earn too little to qualify for a subsidy anyway.) Will I be allowed to do this, and do this without penalty or added taxes?

— KRyan, New York City

Q. I am currently unemployed but have a sizable trust fund. Do I qualify for discounts/tax credits when buying health insurance? Will I be required to show my federal tax return?

— Jory, Columbus, Ohio

A. You can certainly buy coverage on the exchanges when you don’t have coverage through an employer. Whether or not you pay full price or qualify for a premium tax credit depends on your modified adjusted gross income, which is based on your latest tax return (and yes, the exchanges will check your return).

If your household’s modified adjusted gross income is from 100 to 400 percent of the federal poverty level (that’s $11,490 to $45,960 a year if you’re filing as an individual and $23,550 to $94,200 for a family of four), you may be eligible for a premium tax credit, according to CCH, a tax and accounting service.

Several readers had questions about how the modified adjusted gross income is calculated. It’s basically your “adjusted gross income,” which can be found on line 37 of your 1040 tax return form. But it requires that you add back certain items like nontaxable Social Security income, tax-exempt interest and foreign-earned income, Mark Luscombe, a principal analyst at CCH, said.

The figure also includes income from items like dividends, interest, real estate and retirement account withdrawals. So even if you do not have much earned income, but have significant income from other sources, you obviously won’t qualify for financial assistance.

Premium tax credits and cost-sharing subsidies are generally based on your household income, which includes your spouse and any dependents for whom you file a personal exemption and who also earn enough money to file a return, he added.

Q. I get insurance through my employer. My same-sex husband has little to no income and will be using the exchange. Our state of residence (Virginia) is letting the federal government run the exchange. Our state does not recognize our marriage, but the Internal Revenue Service does. How will he determine income when using the exchange?

— S.G., Eastern U.S.

A. The I.R.S. said last month that all married same-sex couples would be treated as married for federal tax purposes, regardless of where they live. And starting in the 2013 tax year, all married couples will be required to file their returns together as either “married filing jointly” or “married filing separately.”

The insurance exchanges will also see you as married. In fact, if you’re a married couple buying insurance on the exchange — gay or straight — you’re required to file a joint federal return, the Treasury Department said. (Why? Imagine how many more people would qualify for subsidies if they used “married filing separately” status.)

Questions for Microsoft as It Nears a Crossroad

Justin Lane/European Pressphoto AgencySteven A. Ballmer, chief of Microsoft and a friend of the company’s chairman, Bill Gates, said he would retire in the next year.

Microsoft’s plan, announced Friday, to replace Steven A. Ballmer as its chief executive does not exactly follow — at least to people outside the company — the way they draft these things in business school.

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Steven Sinofsky
Left Microsoft last year amid friction and is seen as unlikely to return.

But Mr. Ballmer and Microsoft’s board have been considering the possibility of his retirement for some time. Still, because of Mr. Ballmer’s larger-than-life personality, the board’s reluctance to push back and the company’s recent product and financial problems, finding a new chief executive for Microsoft was never going to resemble a cut-and-dry, business-school case study, according to people with knowledge of the company.

“No one is an obvious candidate,” said Michael A. Cusumano, a professor of business and engineering at the Massachusetts Institute of Technology who studies strategy in the computer software industry. “All the really interesting people who were in the company over the last dozen years who might have been have left. I also find it hard to imagine they could bring an outsider in. Microsoft is known for having quite a lot of powerful groups within the company and they make life very difficult for anyone who tries to oversee them.”

Succession planning is a delicate issue for many companies, particularly one like Microsoft, where Mr. Ballmer has been a senior employee since 1980 and chief executive since 2000, and his longtime friend, Bill Gates, Microsoft’s co-founder, remains chairman.

“Particularly for a person like Ballmer, who really is one of the founders, leaving is almost like death, so it’s extremely difficult to have an orderly process,” said Joseph L. Bower, a professor at the Harvard Business School. “It requires a very grown-up relationship between the chief executive and his board.”

Industry insiders almost immediately began to place bets on which executives inside and outside Microsoft — and even outside the technology industry — could be tapped. The decision will go a long way to determining whether Microsoft will successfully transition to tech’s future of mobile computing and computing in a virtual cloud of data-storage devices.

But at the moment, at least, the betting cards are virtually empty.

Even though Mr. Ballmer had indicated he was going to retire when the youngest of his children went to college, which was in about two more years, “I think people thought Ballmer would maybe die with his boots on in that role,” Mr. Cusumano added.

Developing a succession plan is one of a board’s chief responsibilities, but only half of companies actively groom executives, according to a 2010 study by Stanford University’s Rock Center for Corporate Governance and Heidrick & Struggles, the executive search firm that is leading Microsoft’s search. Boards spend only an average two hours a year on succession planning, the study found.

“When you have such strong personalities as Gates and Ballmer, is the board really proactive with them, or is it more of a caretaker board?” said David Larcker, director of corporate governance research at Stanford University’s business school, who worked on the study.

Though it might not be obvious outside the boardroom, Microsoft’s directors have been planning the transition, according to a person briefed on the board’s meetings who was not authorized to speak about them publicly.

Discussions have been happening for a decade, the person said, and intensified in 2010. Several months ago, Mr. Ballmer suggested to the board that it was time to begin a formal succession process, the person said, and told directors on Wednesday that he would announce his retirement.

Mr. Ballmer and the board have discussed the attributes they want in the next chief executive and have been appraising internal and external executives who might be candidates. Over the last 18 to 24 months, Mr. Ballmer has personally met with several outside executives, including people outside the tech industry with experience transforming very large companies, according to the person knowledgeable about the board’s work.

Nick Wingfield contributed reporting.

Helen Thomas | 1920-2013: 50 Years of Tough Questions and ‘Thank You, Mr. President’

Her death was announced by the Gridiron Club, one of Washington’s leading news societies. Ms. Thomas was a past president of that organization.

Ms. Thomas covered every president from John F. Kennedy to Barack Obama for United Press International and, later, Hearst Newspapers. To her colleagues, she was the unofficial but undisputed head of the press corps — her status ratified by her signature line at the end of every White House news conference, “Thank you, Mr. President.”

Her blunt questions and sharp tone made her a familiar personality not only in the parochial world inside the Washington Beltway but also among television audiences across the country.

“Helen was a true pioneer, opening doors and breaking down barriers for generations of women in journalism,” President Obama said in a statement on Saturday. “She never failed to keep presidents — myself included — on their toes.” 

Presidents grew to respect, even to like, Ms. Thomas for her forthrightness and stamina, which sustained her well after the age at which most people had settled into retirement. President Bill Clinton gave her a cake on Aug. 4, 1997, her 77th birthday. Twelve years later, President Obama gave her cupcakes for her 89th. At his first news conference in February 2009, Mr. Obama called on her, saying: “Helen, I’m excited. This is my inaugural moment.”

But 16 months later, Ms. Thomas abruptly announced her retirement from Hearst amid an uproar over her assertion that Jews should “get the hell out of Palestine” and go back where they belonged, perhaps Germany or Poland. Her remarks, made almost offhandedly days earlier at a White House event, set off a storm when a videotape was posted.

In her retirement announcement, Ms. Thomas, whose parents immigrated to the United States from what is now Lebanon, said that she deeply regretted her remarks and that they did not reflect her “heartfelt belief” that peace would come to the Middle East only when all parties embraced “mutual respect and tolerance.”

“May that day come soon,” she said.

Ms. Thomas’s career bridged two eras, beginning during World War II when people got their news mostly from radio, newspapers and movie newsreels, and extending into the era of 24-hour information on cable television and the Internet. She resigned from U.P.I. on May 16, 2000, a day after it was taken over by an organization with links to the Unification Church.

Weeks later, Ms. Thomas was hired by Hearst to write a twice-weekly column on national issues. She spent the last 10 years of her working life there.

When Ms. Thomas took a job as a radio writer for United Press in 1943 (15 years before it merged with the International News Service to become U.P.I.), most female journalists wrote about social events and homemaking. The journalists who covered war, crime and politics, and congratulated one another over drinks at the press club were typically men.

She worked her way into full-time reporting and by the mid-1950s was covering federal agencies. She covered John F. Kennedy’s presidential campaign in 1960, and when he won she became the first woman assigned to the White House full time by a news service.

Ms. Thomas was also the first woman to be elected an officer of the White House Correspondents’ Association and the first to serve as its president. In 1975, she became the first woman elected to the Gridiron Club, which for 90 years had been a men-only bastion of Washington journalists.

Ms. Thomas was known for her dawn-to-dark work hours, and she won her share of exclusives and near-exclusives. She was the only female print journalist to accompany President Richard M. Nixon on his breakthrough trip to China in 1972.

“Helen was a better reporter than she was a writer — but in her prime had more than her share of scoops the rest of us would try to match,” Mark Knoller, the longtime CBS News White House reporter, wrote in a Twitter message on Saturday morning.

And, he added, “Pity the poor WH press aide who would try to tell Helen, ‘You can’t stand there.’ ”

Mark Landler contributed reporting.

Helen Thomas | 1920-2013: 50 Years of Tough Questions and ‘Thank You, Mr. President’

Her death was announced by the Gridiron Club, one of Washington’s leading news societies. Ms. Thomas was a past president of that organization.

Ms. Thomas covered every president from John F. Kennedy to Barack Obama for United Press International and, later, Hearst Newspapers. To her colleagues, she was the unofficial but undisputed head of the press corps — her status ratified by her signature line at the end of every White House news conference, “Thank you, Mr. President.”

Her blunt questions and sharp tone made her a familiar personality not only in the parochial world inside the Washington Beltway but also among television audiences across the country.

“Helen was a true pioneer, opening doors and breaking down barriers for generations of women in journalism,” President Obama said in a statement on Saturday. “She never failed to keep presidents — myself included — on their toes.” 

Presidents grew to respect, even to like, Ms. Thomas for her forthrightness and stamina, which sustained her well after the age at which most people had settled into retirement. President Bill Clinton gave her a cake on Aug. 4, 1997, her 77th birthday. Twelve years later, President Obama gave her cupcakes for her 89th. At his first news conference in February 2009, Mr. Obama called on her, saying: “Helen, I’m excited. This is my inaugural moment.”

But 16 months later, Ms. Thomas abruptly announced her retirement from Hearst amid an uproar over her assertion that Jews should “get the hell out of Palestine” and go back where they belonged, perhaps Germany or Poland. Her remarks, made almost offhandedly days earlier at a White House event, set off a storm when a videotape was posted.

In her retirement announcement, Ms. Thomas, whose parents immigrated to the United States from what is now Lebanon, said that she deeply regretted her remarks and that they did not reflect her “heartfelt belief” that peace would come to the Middle East only when all parties embraced “mutual respect and tolerance.”

“May that day come soon,” she said.

Ms. Thomas’s career bridged two eras, beginning during World War II when people got their news mostly from radio, newspapers and movie newsreels, and extending into the era of 24-hour information on cable television and the Internet. She resigned from U.P.I. on May 16, 2000, a day after it was taken over by an organization with links to the Unification Church.

Weeks later, Ms. Thomas was hired by Hearst to write a twice-weekly column on national issues. She spent the last 10 years of her working life there.

When Ms. Thomas took a job as a radio writer for United Press in 1943 (15 years before it merged with the International News Service to become U.P.I.), most female journalists wrote about social events and homemaking. The journalists who covered war, crime and politics, and congratulated one another over drinks at the press club were typically men.

She worked her way into full-time reporting and by the mid-1950s was covering federal agencies. She covered John F. Kennedy’s presidential campaign in 1960, and when he won she became the first woman assigned to the White House full time by a news service.

Ms. Thomas was also the first woman to be elected an officer of the White House Correspondents’ Association and the first to serve as its president. In 1975, she became the first woman elected to the Gridiron Club, which for 90 years had been a men-only bastion of Washington journalists.

Ms. Thomas was known for her dawn-to-dark work hours, and she won her share of exclusives and near-exclusives. She was the only female print journalist to accompany President Richard M. Nixon on his breakthrough trip to China in 1972.

“Helen was a better reporter than she was a writer — but in her prime had more than her share of scoops the rest of us would try to match,” Mark Knoller, the longtime CBS News White House reporter, wrote in a Twitter message on Saturday morning.

And, he added, “Pity the poor WH press aide who would try to tell Helen, ‘You can’t stand there.’ ”

Mark Landler contributed reporting.

DealBook: JPMorgan Chase Faces Questions on Potential New Capital Rules

Justin Lane/European Pressphoto AgencyDuring an earnings call on Friday, stock analysts asked questions JPMorgan Chase about how a potentially nettlesome regulation might affect the bank.

It’s often the case that when someone doesn’t want to talk about something, it only invites more questions.

That’s certainly how it felt on a conference call that JPMorgan Chase held Friday to discuss its second-quarter financial results. The earnings were relatively strong. Yet for much of the call, the stock analysts who cover JPMorgan asked questions about how a potentially nettlesome regulation might affect the bank.

The bank’s chief financial officer, Marianne Lake, was willing to discuss the subject, but only up to a point. There was one number she seemed to not want to reveal. The issue relates to something called the leverage ratio, a measure of how much capital a bank has.

Since the financial crisis of 2008, regulators have been introducing new rules on capital because they feel higher capital levels makes banks more able to weather storms. That’s because capital can act as a financial cushion that absorbs losses in troubled times. To measure whether it is sufficient, capital is often expressed as a percentage of a bank’s assets. For instance, a bank with $3 in capital and $100 in assets would have a leverage ratio of 3 percent.

This week, regulators proposed a new leverage ratio rule. They want large banks to hold capital that meets a certain percentage of assets, plus other risks embedded in their balance sheets. And it measures the ratios at different places in the bank’s corporate structure.

At the parent company, the leverage ratio would effectively have to be 5 percent. Meanwhile, regulators want the ratio to be 6 percent at the banking subsidiaries that are covered by federal deposit insurance.

The banks have two months to comment on the rules, during which they are almost certainly going to request changes. Once the proposed rules are put into effect, banks will have until the end of 2017 to comply with the new leverage ratios.

On Friday, JPMorgan Chase estimated that it was already close to meeting the 5 percent requirement at its holding company, saying it had enough capital to get to a 4.7 percent leverage ratio there.

Naturally, analysts also wanted to know whether JPMorgan Chase’s deposit-gathering subsidiaries, which are far larger than the holding company, were close to meeting the 6 percent requirement.

“Do you have any sense that you could give us of where you stand on the leverage ratio at the bank level today relative to the 6 percent requirement?” John McDonald, a bank analyst at Bernstein Research, asked on Friday.

Marianne Lake, the chief financial officer at JPMorgan Chase.

Ms. Lake responded that she would not disclose the bank leverage ratio. She added that it was lower than at the holding company.

A few minutes later, Betsy Graseck, a bank analyst at Morgan Stanley, tried. “I’m just wondering why no bank-sub disclosure. I realize that is different, but — and I heard your answer earlier — but I’m just wondering,” she asked, why the number was not provided.

Ms. Lake replied, “So, Betsy, there’s nothing sinister underlying it.”

The chief financial officer did offer some hints, however.

She said the bank subsidiary leverage ratio would be “small tens of basis points” lower than the 4.7 percent level at the holding company. A basis point is a hundredth of a percentage point. Therefore, the leverage ratio for JPMorgan Chase’s bank subsidiaries might be around 4.4 percent.

Under the proposed rules, those entities would eventually have to increase their capital holdings so they are at 6 percent.

Right now, that would mean JPMorgan Chase would have to raise capital by $40 to $50 billion at the subsidiaries. Analysts at Goldman Sachs and Keefe, Bruyette & Woods estimate a shortfall of as much as $47 billion, which is a far higher theoretical dollar deficit than exists at other large banks’ insured subsidiaries.

(However, Bank of New York Mellon’s deficit is higher as a percentage of existing capital, according to Keefe, Bruyette & Woods).

A capital hole of nearly $50 billion is significant even for a bank as big and profitable as JPMorgan Chase. That may be why the bank didn’t want to go into further detail. The fact that its dollar deficit seems to dwarf that of other banks may also be a source of discomfort. For instance, Goldman analysts estimate Citigroup only falls short by $10 billion at its insured entities.

Mark Kornblau, a JPMorgan Chase spokesman, declined to add to what the bank’s executives said on the Friday call about the leverage ratio.

On that call, JPMorgan Chase executives said the bank could increase its leverage ratio at the bank subsidiaries by moving assets or unwinding derivatives, the financial contracts that generate substantial trading revenue for JPMorgan Chase (as well as some losses, as shown by the London whale debacle last year).

Indeed, if JPMorgan does end up getting hit harder by the new leverage ratio, it may not be a complete accident.

Regulators have long tolerated immense amounts of Wall Street business taking place within insured subsidiaries. But the proposed leverage ratio may be the regulators’ new way of forcing banks to hold higher capital to protect against potential trading losses in such entities.

Goldman Sachs estimates it would take JPMorgan Chase two and a half years to earn the capital it needs to plug the hypothetical gap at is subsidiaries. This matters for shareholders. Using earnings to bolster capital might restrict what the bank can pay out in dividends and spend on stock buybacks. On Friday, JPMorgan Chase’s chief executive, Jamie Dimon, said the bank could step up distributions to shareholders and meet the new leverage ratio requirements. A bank of JPMorgan Chase’s profitability probably can do both.

Still, shareholders might feel more confidence about that assertion if the bank had detailed just how much extra capital it might have to find.

Corner Office: Getting Ahead by Having Answers Instead of Questions

Q. What were some of your first moves when you joined Bausch & Lomb a few years ago?

A. I was hired by our board of directors to turn the company around. It had been a market leader in eye health for many of its 159 years, but the last 30 years were not the company’s best 30 years. The first thing I needed to do was understand what made the company tick. I flew to Rochester, and did a town-hall meeting that was webcast globally, but I never went to my office.

I then went on a global tour. For about three weeks, I met with hundreds and hundreds of front-line managers and colleagues and customers before I actually spent the first day in my office. I learned what was wrong, and I felt pretty confident that I could create my turnaround plan from that.

Q. What steps did you take from there?

A. I think changing a culture requires multiple actions, and actions speak louder than words. You can talk about culture all you want, but it takes a while to seep in because it’s really about what you do. We owned a skyscraper in Rochester, but a few miles away we had a manufacturing plant, R.& D., customer service, sales and marketing, all under one roof. Yet all the executives were sitting in this fancy tower and everybody who really did the work was sitting in this other facility.

So I walked in after four weeks on the road and saw my huge office with this skyline view, and I said, “This isn’t going to work. If we’re really going to create one company, one culture, one team mentality, then we should all sit together.” And so we moved all the executives out of there to the building with everybody else. It was a great symbol that we’re all in this together, so let’s all sit together.

Q. What else?

A. I learned early on that we hadn’t brought a lot of meaningful innovation to market in four decades. I looked at our R.& D. organization and I saw that the talent level in that group was really high. It dawned on me that they were really focused on getting patents and publishing papers and creating process, but not really getting product out the door. When I talked to them, I learned that they really wanted to create something in their labs that helps people and the company.

Q. Why wasn’t that happening?

A. I think the disconnect was from a lack of focus on what success was. Success wasn’t around the number of patents you had or how many papers you published. Success needed to be defined as creating products that mattered. One of the ways we did it was by a semantics shift from “R.& D.” to “D.& R.” to show people that while we invest in research, let’s prioritize the development side.

Q. What other changes did you make?

A. We also made sure we were not spending our money wastefully. R.& D. sometimes can be the black hole of spending in health care companies, and so we wanted to also create incentives for scientists not to chase dreams that had low probability of success. So we made sure we celebrated and rewarded scientists for killing things early, too. Because a lot of times, these projects become like a child to the scientist. It’s what they work on. They fear that if they get rid of it, there won’t be a need for them in the organization and so they continue to spend and figure out ways to keep their project alive against very low odds.

The way you crack that is by saying that you should celebrate your successes and that you should equally celebrate your fast kills. We all fail at things. It’s about failing intelligently and failing fast so that you don’t waste money chasing something that’s never going to make it out the door and into customers’ hands.

Q. What are some leadership lessons you’ve learned over the course of your life?

A. The best advice I ever got was from Fred Hassan, who’s one of my mentors: “Never chase the next job.” Just do the job that you’re doing today the best you can, and be selfless and do the right thing for the people you’re managing and leading and let them take the credit. Let them shine and you’ll be successful.

I’ve never asked for a promotion or a raise in my career. That’s another piece of advice I give to students: “Let your work stand on its own. If you’re in there fighting for a raise and a promotion, it means that your work’s not doing it on its own. There’s some disconnect. Go back and reflect on why.”

Q. Other lessons?

A. You should always try to make the people around you as good and strong and talented as you can, because they make you shine. I think that’s probably the biggest key to success, and it probably comes from my days as a consultant. The most successful partners all had something in common — they had developed a lot of people to become partners, and so that’s what I started to emulate when I was there.

Q. A lot of managers are uncomfortable giving candid feedback. Your thoughts on that?

A. When I first started managing people, you wanted to always just pat them on the back and say, “Great job,” and when they did something wrong, you wanted to pretend it never happened. But I learned that if you didn’t deal with those things right away, they could turn into a bigger problem. So I figured out very quickly that you had to deal with those things right up front.

Q. Other career advice?

A. I think most people don’t realize that everybody comes to the C.E.O. with problems. Most people don’t come to tell me good news. The people I rely on or view as high-potential folks are people who come with a problem but also bring ideas for the solution. It may not be the right solution. We may do something entirely different, but they’ve been thoughtful about it.

Earlier in my career, when I went to my C.E.O.’s, I walked in and said, “Here’s the problem and I have two ideas for what we can do.” I never walked in without trying to be thoughtful, and at least two steps ahead. If people are looking to advance their career, they may want to be more thoughtful about bringing some ideas for solving a problem, and not just presenting a problem.

This interview has been edited and condensed.

City Controller Questions Plan to Eliminate Public Defenders

As the city of Philadelphia continues to seek approval of its five-year budget plan with the Pennsylvania Intergovernmental Cooperation Authority, City Controller Alan Butkovitz questioned today how the city could propose to eliminate ?public defender positions while the District Attorney?s Office, which prosecutes these cases, continues to receive sufficient funding to maintain its current staffing levels.?

DealBook: China’s Push to Cool Down Housing Raises Questions

Kim Kyung-Hoon/ReutersA man looks around a miniature of new apartment complex at a showroom in Beijing.

Chinese shares fell the most in two years on Monday as the Shanghai stock exchange’s property index tumbled 9.25 percent. Late on Friday, China’s State Council had announced a new set of policies designed to cool down the housing market.

Economic data released in the last few days has called into question the strength of China’s recovery. It may be that Beijing is so confident in the health of the economy that it can afford to squeeze the real estate sector harder. Or it may be that the government is so concerned about the social implications of a resurgent property market and the effect that real estate may have on the effort to rebalance the economy toward consumption from investment, that it is willing to take that risk.

The new rules include a 20 percent tax on gains from a sale, higher down payments and mortgage rates, and requirements that cities set annual price easing targets. The announcement was met with both skepticism and criticism.

This latest round of real estate controls is the ninth in the last 10 years, yet prices have increased markedly, and some on the Internet questioned the legality of levying taxes through administrative means and called for much more transparency and accountability in how the government might spend the proceeds.

Clearly investors are spooked, though as Yao Wei, chief economist at Societe Generale CIB wrote, according to Reuters:

“The actual impact of the new policy can be very severe or not severe at all, depending on implementation. But the wording is unexpectedly harsh. … In three months time, the impact may not be big at all. But it has stirred very high negative expectations.”

The announcement on Friday spurred a surge in existing home transactions. Some analysts, and most of the people with whom I have spoken, expect the tax to have the perverse effect of driving up the price of existing homes, as buyers will have to cover most of the tax, and pushing more of the sale into a side contract to hide both the true price and gains from the government.

The real estate market in China is already quite distorted, and these repeated rounds of repressive policies may be just layering on more distortions. But the changes required for a more rational housing market are so difficult that in the near term it is easier to try to manage through administrative fiat.

Christian Hartmann/ReutersZhang Xin, chief executive of Soho China.

In a bit of good timing for CBS, this week’s “60 Minutes” had two segments on Chinese real estate. The first was an interview with the billionaire developer Zhang Xin, chief executive of Soho China. “China’s Real Estate Bubble,” the second segment, examines the phenomenon of “Ghost Cities” that many China bears have highlighted over the last several years, complete with visits to the same empty malls and developments that we have been hearing about for years.

Jonathan Anderson of Emerging Advisors Group is out with a provocative report about those ghost cities. In “Hurray for Ghost Cities,” Mr. Anderson argues that these wasted investments are not really a big deal, adding that it might be better that the money was blown on developments rather than even more excess manufacturing.

Tom Miller is also mostly dismissive of the “Ghost Cities problem” in his excellent new book “China’s Urban Billion.” In one chapter, Mr. Miller writes:

The truth of the matter is that China is not building too many apartments, and a handful of empty urban districts are not evidence of a giant property bubble. Chinese property investment may be inefficient, but it is sustained by a huge, growing and sustainable demand for new housing. …

China’s current modern housing stock, defined as homes with individual bathrooms and kitchens, is around 150 million units. But 200 million migrant workers currently live in dormitories or slum housing. If one believes that the urban poor deserve to live in proper flats, the corollary is that Chinese cities actually have a significant shortage of housing – somewhere in the region of 70 million units. China is not building too many new apartments; it is building too few.

I do not mean to completely dismiss some of the dangerous imbalances that have been building in certain property markets across China. But China is not one real estate market, and taking a binary boom-or-bust view about the “China market” is likely a mistake.

The Financial Times examined the diverging markets last week, writing:

China takes bifurcation to a new extreme. Not only are housing prices in the biggest cities moving in a different direction to those in smaller centers, there is also a glaring discrepancy in the amount of development being undertaken.

The country’s main metropolises – Beijing, Shanghai and Shenzhen, which each have populations of more than 10 million – suffer from chronic shortages of housing for low- to middle-income residents. By contrast, scores of smaller cities with populations of up to 3 million face an increasingly severe oversupply.

This is why a simple description of China’s housing market as a “bubble” misses the point. Does “bubble” refer to the soaring prices in the biggest cities, where only the wealthy can afford homes? Or does it refer to the row upon row of empty apartment blocks in the smaller cities?

One of the crucial questions, for which very smart people offer very different answers, is can bubbles burst in certain areas without bringing down the whole economy?

Regardless of how that question is answered, we should perhaps give China’s leaders some credit for acknowledging potential bubbles and taking steps to rein them in. What might have been different if American policy makers had recognized and tried to manage the risks of a housing bubble in 2005, 2006 or 2007?

Analysis: Amid Tears Lance Armstrong Leaves Unanswered Questions in Oprah Winfrey Interview

Armstrong, the once defiant cyclist, also became choked up when he discussed how he told his oldest child that the rumors about Armstrong’s doping were true.

Even with all that, the interview will most likely be remembered for what it was missing.

Armstrong had not subjected himself to questioning from anyone in the news media since United States antidoping officials laid out their case against him in October. He chose not to appeal their ruling, leaving him with a lifetime ban from Olympic sports.

He personally chose Winfrey for his big reveal, and it went predictably. Winfrey allowed him to share his thoughts and elicited emotions from him, but she consistently failed to ask critical follow-up questions that would have addressed the most vexing aspects of Armstrong’s deception.

She did not press him on who helped him dope or cover up his drug use for more than a decade. Nor did she ask him why he chose to take banned performance-enhancing substances even after cancer had threatened his life.

Winfrey also did not push him to answer whether he had admitted to doctors in an Indianapolis hospital in 1996 that he had used performance-enhancing drugs, a confession a former teammate and his wife claimed they overheard that day. To get to the bottom of his deceit, antidoping officials said, Armstrong has to be willing to provide more details.

“He spoke to a talk-show host,” David Howman, the director general of the World Anti-Doping Agency, said from Montreal on Friday. “I don’t think any of it amounted to assistance to the antidoping community, let alone substantial assistance. You bundle it all up and say, ‘So what?’

Jeffrey M. Tillotson, the lawyer for an insurance company that unsuccessfully withheld a $5 million bonus from Armstrong on the basis that he had cheated to win the Tour de France in 2004, said his client would make a decision over the weekend about whether to sue Armstrong. If it proceeds, the company, SCA Promotions, will seek $12 million, the total it paid Armstrong in bonuses and legal fees.

“It seemed to us that he was more sorry that he had been caught than for what he had done,” Tillotson said. “If he’s serious about rehabbing himself, he needs to start making amends to the people he bullied and vilified, and he needs to start paying money back.”

Armstrong, who said he once believed himself to be invincible, explained in the portion of the interview broadcast Friday night that he started to take steps toward redemption last month. Then, after dozens of questions had already been lobbed his way, he became emotional when he described how he told his 13-year-old son, Luke, that yes, his father had cheated by doping. That talk happened last month over the holidays, Armstrong said as he fought back tears.

“I said, listen, there’s been a lot of questions about your dad, my career, whether I doped or did not dope, and I’ve always denied, I’ve always been ruthless and defiant about that, which is probably why you trusted me, which makes it even sicker,” Armstrong said he told his son, the oldest of his five children. “I want you to know it’s true.”

At times, Winfrey’s interview seemed more like a therapy session than an inquisition, with Armstrong admitting that he was narcissistic and had been in therapy — and that he should be in therapy regularly because his life was so complicated.

In the end, the interview most likely accomplished what Armstrong had hoped: it was the vehicle through which he admitted to the public that he had cheated by doping, which he had lied about for more than a decade. But his answers were just the first step to clawing back his once stellar reputation.

On Friday, Armstrong appeared more contrite than he had during the part of the interview that was shown Thursday, yet he still insisted that he was clean when he made his comeback to cycling in 2009 after a brief retirement, an assertion the United States Anti-Doping Agency said was untrue. He also implied that his lifetime ban from all Olympic sports was unfair because some of his former teammates who testified about their doping and the doping on Armstrong’s teams received only six-month bans.

Richard Pound, the founding chairman of WADA and a member of the International Olympic Committee, said he was unmoved by Armstrong’s televised mea culpa.

“If what he’s looking for is some kind of reconstruction of his image, instead of providing entertainment with Oprah Winfrey, he’s got a long way to go,” Pound said Friday from his Montreal office.

Armstrong acknowledged to Winfrey during Friday’s broadcast that he has a long way to go before winning back the public’s trust. He said he understood why people recently turned on him because they felt angry and betrayed.

“I lied to you and I’m sorry,” he said before acknowledging that he might have lost many of his supporters for good. “I am committed to spending as long as I have to to make amends, knowing full well that I won’t get very many back.”

Armstrong also said that the scandal has cost him $75 million in lost sponsors, all of whom abandoned him last fall after Usada made public 1,000 pages of evidence that Armstrong had doped.

“In a way, I just assumed we would get to that point,” he said of his sponsors’ leaving. “The story was getting out of control.”

In closing her interview, Winfrey asked Armstrong a question that left him perplexed.

“Will you rise again?” she said.

Armstrong said: “I don’t know. I don’t know. I don’t know what’s out there.”

Then, as the interview drew to a close, Armstrong said: “The ultimate crime is the betrayal of these people that supported me and believed in me.”

Criminal Practice: Defense Counsel Raise Questions About Indicting Grand Juries

With the return of the indicting grand jury to Pennsylvania last week for cases involving witness intimidation, defense attorneys are raising concerns that the grand jury process provides much less protection for defendants, while prosecutors say that indicting grand juries are necessary to protect witnesses facing the threat of harm or even death if they testify about homicides and other serious crimes.

Do Voir Dire Questions Inject Bias Into Your Jury?

What kinds of projections are we creating when we ask voir dire questions at trial or in a mock jury exercise? Are we tainting our jurors by asking them their perceptions of relevant issues before we give them a case story? Some folks believe that we are. I disagree.

More Questions, No Verdict in Phila. Priest Sex-Abuse Trial

As jurors in the Philadelphia priest sex-abuse trial undertook a half-day of deliberations, they asked three questions.

More Questions, No Verdict in Phila. Priest Sex-Abuse Trial

As jurors in the Philadelphia priest sex-abuse trial undertook a half-day of deliberations, they asked three questions.

The Lede Blog: David Barboza Answers Reader Questions on Reporting in China

The Times’s Shanghai bureau chief, David Barboza, reported last week that close relatives of Wen Jiabao, the prime minister of China, hold billions of dollars in hidden riches. Here are his answers to questions from readers prompted by the article.

As the NY Times’s Shanghai bureau chief, I assume you are a China old hand. I’m curious about what prompted you to write this article? What was your rationale for the timing of this article? Have you ever got a feeling of being used? — Casablanca

I have been in China since 2004, and as a correspondent for the Business section, I have focused my reporting energies on economic, financial and business issues. Throughout my tenure in China there has been a lot of discussion about whether the families of high-ranking government officials have benefited from the country’s economic transformation by receiving so-called secret shares in corporations. This is a regular topic of dinner conversation when bankers, lawyers and accountants gather in Shanghai and Beijing. I had been told many times that this is typically done by using “nominee investors,” friends or people not easily identifiable in the shareholder records as having ties to politicians. These nominees, I was told, often hold shares for the relatives of powerful politicians, giving them a stake in a company.

About a year ago, as I was reporting a series of articles about China’s state-managed economy, I decided to see if there was any evidence behind the theory. I started looking into the business ties of several high-ranking leaders. Anyone who knows business and finance in China knows that the conjecture about the prime minister’s relatives was particularly persistent, so my focus eventually narrowed on the Wen family. I knew this would be a time-consuming and difficult task, but I was determined to answer this question. I plowed in, and to my great surprise found that there was a tremendous amount of information available in the public record. My reporting did not find illegality or corruption. It did reveal the names of Mr. Wen’s relatives hidden behind dozens of investment vehicles that few people had ever heard of.

I almost believed all the allegations against Wen in your article (most of the report pointing him as double-handed and heavily involved in the alleged corruptions) until the end of your report, which indicates that he almost divorced his wife because of her questionable business deals, and he was willing to let history judge him. Unfortunately, most people would not finish reading such a lengthy report, or their opinions have been formed based on the first half of your report…. Please enlighten me and other readers how you can justify your strong allegations first and then hinting you may not be sure of the allegations. Let me be clear: We are all fed up with corruptions in China (and elsewhere), but I am afraid your report may cause confusions to the readers, and leading to much tighter government control – meaning more corruptions and left-leaning policies in China in the future. Hope that is not what you are wishing for. — Pacific, USA

I have to disagree with your assertion that I first listed strong allegations and then suggested I wasn’t sure about the allegations.

My goal in undertaking this story was to determine whether the relatives of the prime minister had large stakes in Chinese companies, and to figure out how much wealth they had accumulated. If there were clues as to how these relatives made their fortunes, that would obviously tell us something about how things work in China for the relatives of senior leaders.

I didn’t make allegations, I described my findings: the relatives of the prime minister have controlled a fortune that has had a value of at least $2.7 billion over the last decade, according to the public records I reviewed.

As with all reporting on any given subject, we did not conduct our investigation in a vacuum. We went directly to the people whose names appeared on the documents we tracked. We made repeated efforts to reach the prime minister and his various relatives to give them the opportunity to discuss the documents or to refute our findings. They did not respond or declined to comment. So the next best option was to explore the public record and share with our readers what the prime minister has said publicly about corruption and whether he has sought personal gain. We also cited documents released by the WikiLeaks organization because they also shed light on the subject and might help the reader better understand the context of our findings. There was an interesting State Department cable from 2007, which refers to the prime minister and his family’s business dealings.

First of all, thanks for publish the article. It’s an eye opening. My question is what are the implication of your article on the upcoming communist transition on November 8, 2012? Obviously, there’s someone trying to discredit Wen Jiabao and his reformist faction. Who would benefit the most from your article? Is it Wu Bangguo and Zhou Yongkang’s hardline faction?

I have a strange feeling that New York Times has become a tool in a factional struggle between different factions of Communist party. Your article is not exactly surprising, it’s an open secret that nobody’s hand was clean in China’s leadership. The whole government was corrupt. It’s impossible to be an honest government official. Only thing surprising is the scale of corruption, I was thinking hundreds of millions before, thanks to NY Times, now I know it’s in billions. — Jordan, Bend, Ore.

My apologies. I have to confess that I’m a business correspondent and do not cover Beijing politics, nor was the Party Congress a focus of my investigation. So I can’t really tell you the political implications of this article. You may have seen a comment in the article from Minxin Pei, who is at Claremont McKenna College. He believes this will weaken Wen in the last months of his term. There are two other experts who specialize in this area — Li Cheng and Kenneth Lieberthal, both at the Brookings Institution in Washington. We may be hearing more from them in the coming weeks about the 18th Party Congress and the transition, which will involve naming the next president, widely expected to be Xi Jinping, and a new prime minister to replace Wen Jiabao, likely to be Li Keqiang. My colleagues in Beijing are in the midst of a fascinating series about that transition called “Changing of the Guard.”

It is interesting that a few days ago, several Chinese sites reported that a thick bundle of material about Wen’s family wealth was sent to major US news agent by unidentified parties. The speculation was that this was the revenge for people who are sympathetic to Bo Xilai. Could Times tell us why it decided to do this now to Wen even though rumor about it had been going for years. Has the intentional leak played any role in the timing? If yes, I think that Times should mention it. This is a tremendous reporting, but it would be useful for the readers to know the context of this report. We would actually learn more about intricates about Chinese politics. –Joy, Poughkeepsie

Your questions are excellent. Why now? Because it took that long to gather and evaluate the evidence, which involved thousands of pages of corporate and regulatory documents that we obtained through public record requests to various government entities in China.

I began looking into the business dealings of Wen Jiabao’s family late last year. I had been working on a series called “Endangered Dragon,” which looked at China’s government-managed economy, and wanted to include a piece that would give deeper insight into how China’s capitalism worked at the top. It is a broad subject, which I decided would be made more manageable by focusing on one family. I chose the prime minister’s family because I had heard conjecture about their business dealings for many years. People talked openly about the family’s wealth as if it was fact, but there was really no reporting on the subject that I could find that cited hard evidence backing up the claims. I kept scratching my head about why no one had tried to truth-squad the widespread rumors.

So I got started last year, and within a month or so, I was discovering intriguing things about some of the businesses, but each new discovery required digging deeper and deeper. I expected to finish the project within a month, by working weekends, but it took more than a year!

I have read the speculation that some “insider” gave me information, or that some enemies of the prime minister dropped off a huge box of documents at my office. That never happened. Not only were there no leaked documents, I never in the course of reporting met anyone who offered or hinted that they had documents related to the family holdings. This was a paper trail of publicly available documents that I followed with my own reporting, and if I might hazard a guess, it was a trail that no one else had followed before me.

In short, given the amount of effort this investigation required, I’d be stunned if there were a box of documents sitting somewhere that contained all of this work. If only it were so easy!

A great article with a lot of details. May I ask you how you can get into such detailed level of information? Did you get any leads from someone inside the Wall? It seems to me it is almost impossible to untangle such a network of secret dealings without any hint from the people in the know, and these are probably people who are Wen’s enemies. Thank you. — Jack, NY

My only real source for this lengthy article was a filing cabinet full of documents I requested from various Chinese government offices over a period of about a year. After having some luck with my initial requests for corporate registration documents from the State Administration for Industry and Commerce bureaus, I went on a reporting spree: requesting and paying fees for the records of dozens of investment partnerships tied to the relatives of Wen Jiabao.

I also began making lists of individuals and companies and trying to figure out who the people were and what their relationships were to one another; and what, I asked, was the purpose of all these partnerships — many of which had similar shareholders lists.

Although S.A.I.C. records are open to the public, few journalists in China have really made good use of them. They are invaluable sources of information about private companies. Two excellent Chinese publications, Caixin and the 21 Century Business Herald, have regularly used S.A.I.C. records. These two publications have done some groundbreaking business reporting here. But government restrictions on writing about the families of senior leaders limits the scope of investigative journalism in China, particularly when the families of high-ranking officials are involved.

So, Jack, there was no person “inside the Wall” helping me. I read the documents, called lawyers, accountants and financial experts for advice about how to make sense of the records. Occasionally I met someone who was able to identify one of the shareholders. But I told very few people that I was working on a story about the prime minister’s relatives. Even my closest friends did not know. I knew talking about my research could be risky, and might derail the project.

Wealth Matters: When Advisers Change Jobs, Ask Questions

Whatever the reason, the transition often seems opaque to clients — the people whose money gives these advisers’ businesses value. But most probably don’t care too much as long as they get the same service and their statements arrive on time.

But a transaction this week got me thinking about the obligations advisers have to their clients when they move and how their handling of that process can offer insight into their character.

Seth Glickenhaus, who has worked on Wall Street since 1934 and started his first firm in 1938, has decided to sell his advisory firm, Glickenhaus & Company, to Marvin Schwartz, the team leader of six advisers called the Straus Group at Neuberger Berman.

Mr. Glickenhaus, who got his first job in finance from Herbert Salomon, one of the original Salomon brothers, is 98. With his eyesight failing and his step slowing, he said it was finally time to retire.

“I love being a money manager,” he said. “If I didn’t have certain obvious handicaps, I’d still be working at it. But I don’t think it’s fair to manage other people’s money when you think your handicaps could impair your ability.”

He had been concerned about finding a good home for his clients, who have entrusted him with over $900 million to manage. He has spent this past week contacting clients to tell them about his departure and why he picked Mr. Schwartz.

“I’ve admired him and used many of his ideas,” Mr. Glickenhaus said. “It was very hard to find someone with a similar investment policy. Most people in money management are interested in the fees they get and the commissions and don’t do an outstanding job.”

Mr. Schwartz, 72, whose group manages $11 billion, said he did not take the transition for granted. Mr. Glickenhaus’s clients are free to go elsewhere. But he said he and his team would be working hard over the next 90 days to meet with them and explain why they should move their accounts to Neuberger Berman.

“One of the challenges is to understand the mentality of an investor who entrusts a majority, if not all, of their invested assets with one person to manage over a long period of time,” Mr. Schwartz said. “I think it’s important to recognize that the new manager doesn’t have an attitude of coming in with a strong broom and instituting major change. Change should be instituted slowly, to the extent that there is change.”

That this transition of client accounts between firms is amicable is not the norm. Just ask people whose adviser has left one firm to go another and found themselves on the receiving end of a flurry of sweet-talking calls from the old and new firms.

“It’s a question of growing importance because there is a lot of moving of the deck chairs, partly in the brokerage industry,” said Stephen Horan, head of the private wealth practice at the CFA Institute, an association of investment professionals. “The situation creates a really interesting opportunity to gauge one of the things clients say is most important to them about their adviser, and that’s ‘What is the commitment to ethics?’ ”

Mr. Horan said that the increased movement of advisers over the last several years had been largely driven by the decline in the public’s opinion of many big Wall Street firms. Some advisers have decided they could be more successful at a boutique firm, on their own or, at the very least, at another big firm with a better reputation.

I decided to call three firms whose model is based on inducing advisers to leave established brokerage firms to join them and ask them how they look to smooth out transitions. All three were started, or began to grow, after the financial crash of 2008, and their goals are to become large enough that clients can get the advantages of a big brokerage house but with a wider variety of investment choices.

I wanted to know what clients could glean from how their advisers changed firms.

Moving has become so common that the industry has a set of guidelines called the broker protocol that is meant to govern the process and cut down on the number of lawsuits between firms.

More Questions, No Verdict in Phila. Priest Sex-Abuse Trial

As jurors in the Philadelphia priest sex-abuse trial undertook a half-day of deliberations, they asked three questions.

City Controller Questions Plan to Eliminate Public Defenders

As the city of Philadelphia continues to seek approval of its five-year budget plan with the Pennsylvania Intergovernmental Cooperation Authority, City Controller Alan Butkovitz questioned today how the city could propose to eliminate ?public defender positions while the District Attorney?s Office, which prosecutes these cases, continues to receive sufficient funding to maintain its current staffing levels.?