New Criteria Could Change Who Is Diagnosed With Alzheimer's

New guidelines for diagnosing the mental decline that can come with several diseases of aging may create confusion among doctors and patients about who has early Alzheimer's disease and who simply has mild cognitive impairment, a new report warns.

Mild cognitive impairment (MCI) is a mental decline in its earliest stages that's not a normal part of aging. Under previous guidelines, a patient was considered to have MCI if he or she had marked, but mild, memory problems but was otherwise functioning normally, explained Dr. John Morris, director of the Alzheimer's Disease Research Center at Washington University School of Medicine in St. Louis.

Recently, the U.S. National Institute on Aging and the Alzheimer's Association convened a work group to update criteria for MCI. Their revised guidelines cast a wider net for what qualifies. "As MCI was studied further, it was found that people with MCI often had other impairments in reasoning, visual-spatial skills and attention," Morris said.

Under the new guidelines, people with MCI can have also have problems doing daily activities, such as driving without getting disoriented, remembering to pay bills and paying the proper amount, and cooking safely. People can have MCI even if they depend on aids or assistance to complete those tasks.

Previously, what distinguished MCI from dementia was that ability to function, but the new guidelines blur the distinction, Morris noted.

"Now, there is no distinguishing line between mild cognitive impairment and mild Alzheimer's disease dementia," said Morris, who lays out his argument in an analysis published online Feb. 6 in theArchives of Neurology. "Broadening the criteria for MCI overlaps so much with the diagnosis of very mild Alzheimer's disease that physicians won't know whether to call it very mild Alzheimer's or MCI. It adds confusion to the field."

Morris' study included more than 17,500 people with a mean age of 75 who had either normal memory and thinking skills, MCI or Alzheimer's disease dementia.

He concluded that 99.8 percent of patients currently diagnosed with "very mild" Alzheimer's dementia and just under 93 percent of those diagnosed with "mild" Alzheimer's dementia could be reclassified as having MCI, based on the revised criteria.

Some 5.4 million Americans have Alzheimer's, according to the Alzheimer's Association.

While MCI can be a first sign of the Alzheimer's, it's not necessarily so. Other causes of MCI can include medications, stroke or depression, Morris explained.

Diagnosing Alzheimer's disease is typically done through a clinical examination with a neurologist. Neuroimaging tests are conducted, to rule out other conditions that might have caused the mental decline, such as a stroke or brain tumor.

Other means of diagnosing Alzheimer's include a spinal tap that looks for certain biomarkers in the spinal fluid or specialized MRIs that can detect amyloid protein, which is associated with Alzheimer's. However, these are not typically available outside of large metropolitan hospitals or as part of medical studies.

Dr. William Thies, chief medical and scientific officer for the Alzheimer's Association, said researchers now understand that Alzheimer's is a continuum of changes in the brain that begin years, and possibly decades, before the first MCI symptoms are noticed. Alzheimer's itself, Thies said, represents "the very last, devastating changes of the disease."

"You can do a lot of damage to the brain before it will not do all the functions it's supposed to do," Thies said. "There is a period of time when you will have silent changes in your brain structure and function, a pre-symptomatic period when the changes have already begun."

Because Alzheimer's is a continuum, that means that drawing a line between MCI and Alzheimer's is, by definition, "artificial," he noted.

"We recognize those lines are artificial, and at the moment because the criteria are relatively new, they remain somewhat fuzzy," Thies said. "This is an area where we will have continued discussion over the next few years to establish consistently where to categorize folks."

When Alzheimer's is believed to be the underlying cause of MCI, physicians can offer up a diagnosis of "MCI due to AD [Alzheimer's disease]," Morris said.

Even though the diagnosis of Alzheimer's is more devastating than MCI, it's important for patients and their families to hear the truth, so that they can come to terms with the diagnosis and make the necessary plans, Morris said.

"When we think the MCI is caused by underlying Alzheimer's disease, we should go ahead and call it very early Alzheimer's," Morris said. "It's artificial to call it MCI."

According to background information in the article, 30 percent to 60 percent of doctors conceal an Alzheimer's disease diagnosis because of causing distress to the family and the patient, even though 94 percent of the same doctors would reveal a diagnosis of terminal cancer.

Dr. Gayatri Devi, an attending neurologist at Lenox Hill Hospital in New York City, said that as a result of the new criteria, "large numbers of patients will be classified as having mild cognitive impairment when in fact they're suffering from Alzheimer's disease."

"This complicates research in the area, and confuses patients and families, not to mention physicians, who've relied on functional independence as the demarcation between Alzheimer's disease and MCI," Devi said.

Source: Yahoo! News

Obama says risky to attack Iran, wants diplomatic fix

WASHINGTON/TEHRAN (Reuters) - President Barack Obama said on Sunday there were important risks to consider before any military strike against Iran and made clear he does not want to see more conflict in the oil-producing Gulf region.

In a television interview, Obama also said he did not believe Tehran had the "intentions or capabilities" to attack the United States, playing down the threats from Tehran and saying he wanted a diplomatic end to the nuclear standoff.

"Any kind of additional military activity inside the Gulf is disruptive and has a big effect on us. It could have a big effect on oil prices. We've still got troops in Afghanistan, which borders Iran. And so our preferred solution here is diplomatic," Obama said.

His comments echoed concerns expressed by earlier by Iran's neighbor Turkey that an attack on Iran would be disastrous.

Obama, who is up for re-election in November, has ended the U.S. war in Iraq and is winding down combat in Afghanistan amid growing public discontent about American war spending at a time when the economy remains shaky.

He said Israel had not yet decided what to do in response to the escalating tension but was "rightly" concerned about Tehran's plans.

"My number one priority continues to be the security of the United States, but also the security of Israel, and we are going to make sure that we work in lockstep as we proceed to try to solve this, hopefully diplomatically," he told NBC.

Iranian leaders have responded sharply to speculation that Israel could bomb Iran within months to stop it from assembling nuclear weapons, threatening to retaliate against any country that launches an attack against the Islamic Republic.

Iran says its nuclear program is meant to produce energy, not weapons.

But its recent shift of uranium enrichment to a mountain bunker - possibly impervious to conventional bombing - and refusal to negotiate peaceful guarantees for the program or open up to U.N. inspectors have raised fears about Iran's ambitions as well as concerns about Gulf oil supplies.

'DISASTER'

Although tough sanctions from the United States and Europe have begun to inflict economic pain in Iran, its oil minister asserted on Saturday it would make no nuclear retreat even if its energy exports ground to a halt.

Betraying nervousness about the possibility of a military strike on Iran, two of its neighbors - Qatar and Turkey - urged Western powers on Sunday to make greater efforts to negotiate a solution to the nuclear dispute.

Speaking at a security conference in Munich, Turkish Foreign Minister Ahmet Davutoglu said an attack would be a disaster and suggested the dispute over Iran's nuclear program could be ended very rapidly.

"If there is strong political will and mutual confidence being established, this issue could be resolved in a few days," he said. "The technical disputes are not so big. The problem is mutual confidence and strong political will."

He added: "A military option will create a disaster in our region. So before that disaster, everybody must be serious in negotiations. We hope soon both sides will meet again but this time there will be a complete result."

Qatari Deputy Foreign Minister Khalid Mohamed al-Attiyah said an attack "is not a solution."

"I believe that with our allies and friends in the West we should open a serious dialogue with the Iranians to get out of this dilemma. This is what we feel in our region," he said.

Turkey hosted talks between Western powers and Iran a year ago that ended in stalemate because the participants could not agree on an agenda.

VOLATILE REGION

Despite Obama's stated preference for a diplomatic solution, he said from the White House on Sunday he would not take options off the table to stop Iran from getting nuclear weapons.

"We're going to do everything we can to prevent Iran from getting a nuclear weapon and creating an arms race - a nuclear arms race - in a volatile region," he said in the interview.

Any military strike on Iran, which might include an attack on the oilfields of No. 1 exporter Saudi Arabia, could send oil prices soaring, which could seriously harm the global economy.

Tehran has warned its response to any such strike would be "painful," threatening to target Israel and U.S. bases in the Gulf, and warning it may close the Strait of Hormuz used by one third of the world's seaborne oil traffic.

The elite Revolutionary Guards began two days of military maneuvers in southern Iran on Saturday in a show of force for Iran's adversaries. On Sunday, the deputy of that unit said Iran was ready to attack any country whose territory is used by "enemies" to launch a military strike against it.

"Any spot used by the enemy for hostile operations against Iran will be subjected to retaliatory aggression by our armed forces," Hossein Salami told the semi-official Fars news agency. The Gulf states that host U.S. military facilities are Qatar, Bahrain and Kuwait.

Experts currently estimate the longest range of an Iranian missile to be 1,500 miles, capable of reaching Israel and Europe. Las week, Israeli Vice Prime Minister Moshe Yaalon said Iran had been working on a missile that could strike the United States, with a range of 6,000 miles.

Asked about that risk, Obama said there was little sign of a pending Iranian attack on U.S. soil. "We don't see any evidence they have those intentions or capabilities right now," he said.

Source: Reuters

Gas Prices To Soar Above $4 Per Gallon

Gas prices always soar in the springtime.


Northerners venture out of their houses more as milder weather arrives, and the market anticipates higher consumption for summer vacation trips.


This year, analysts say, prices could cross the psychologically significant $4-per-gallon mark, adding as much as 60 cents per gallon to the current national average.


There are several reasons, according to USA Today. The economy is improving, jobless rates are falling, and threats by Iran to close the Strait of Hormuz continue to make global oil markets nervous.


According to projections by GasBuddy.com, which tracks gas price trends state by state, the average national price per gallon will likely peak around Memorial Day at about $4.


That means that prices in the most expensive (which translates to most highly-taxed) of the 48 states could hit levels as high as $4.60 a gallon.


Want proof? Last May, gasoline spiked to an average price of $4 per gallon across all U.S. markets. (Then it fell below $3.50 early last autumn.)


Four dollars a gallon seems to be the psychological limit that causes people to change their behavior, either driving less or thinking harder about vehicles with higher gas mileage.


Gas pump with dollars
If the current fragile economic recovery continues and strengthens, sooner or later, many households will have to replace their vehicles. The average car on U.S. roads is now more than 10 years old--the highest average age since World War II.


And with required corporate average fuel economy rising every year from now through 2016--and new standards reaching toward 54.5 mpg by 2025 out for public comment--new vehicles are likely to deliver notably lower fuel consumption.


The rising average fuel economy of cars on the road, as older cars are replaced with newer ones, is one of the reasons why--contrary to public belief--U.S. consumption of gasoline peaked in 2006.


It's been falling ever since.


But the cash you lay out for it? That's a different  story altogether.


Source: Green Car Reports

Why Siri Will Never Officially Appear on the iPhone 4

Since the arrival of the iPhone 4S, users of the humble iPhone 4 have been hoping for a chance to get Siri. While they can unofficially, they never will from Apple.


The iPhone 4S uses Apple's A5 processor. Which you know is more powerful than the A4 built into the iPhone 4—but it also has some weighty audio processing hardware baked into it. Specifically, the A5 is home to Audience's "EarSmart" technology, which uses a digital signal processor to remove background noise and secondary voices so phone calls sound better.


If you've never heard of Audience, don't sweat it: It's a start-up, but it powers Apple's noise-reduction circuity. Audience did, however, recently file its IPO. As part of that, the company revealed that its iPhone 4-era technology only works well when the phone is held near the speaker's mouth. The noise-reduction technology built into the iPhone 4S, however, is far better. It can cope with what Audience calls "far-field speech."


That is, in a nutshell, why Siri is officially only on the 4S. It's an app designed to be used from a distance: while the phone sits on your desk, as you're holding the handset to view a search result, or (perhaps less safely) while you're driving. The iPhone 4's audio processing abilities just aren't up to that task.


So, while hacks exist to install Siri on your jailbroken handset, or even legally, the plain, simple truth is that it won't work very well. Still, not to worry: it's not like Siri's that great anyway. 


Source: Gizmodo

Twitter hits a peak of 12K tweets per second during Super Bowl

Twitter users sent 12,233 tweets per second at the end of last night’s big game.


The Super Bowl halftime show featuring Madonna inspired 10,245 tweets per second.


Just one month ago, the service had 9,420 tweets per second during a Sunday football game featuring Tim Tebow. For contrast, Twitter saw a peak of 8,868 tweets per second during Beyoncé’s MTV music video awards show pregnancy announcement and just 5,106 tweets per second as the news of Osama bin Laden’s death was announced.


However, the all-time record for most tweets per second goes to Castle in the Sky, a Japanese anime show that set the bar at 25,088 tweets per second during a broadcast in December 2011.


Twitter may or may not be a big hit with anime fans around the globe, but we do know that Twitter is huge in Japan — bigger than Facebook, in fact, with around 25 million Japanese users hitting the site each month.


Twitter is also getting into the Super Bowl ads game. “This year we’re introducing a Twitter twist,” the company announced on its blog.


“Immediately after the game, you can replay all of the ads that aired during the game and tweet votes for your favorites on adscrimmage.twitter.com.”


The company said it will tally the votes and announce the winners on February 12, 2011, a week after the Super Bowl.


Source: Social Beat

10 Bright Ideas to Get You Through February

The movie inside my head: Here’s something you could use some grim February afternoon, although alas, not this month. But by 2014 we could have contact lenses that display computer-generated, panoramic 3D images that make the real world go away. They’re being developed for the U.S. military by the Washington State company Innovega, with the idea that soldiers could have maps or other critical data fed directly to their contacts.  But gamers probably won’t be far behind and it will only be a matter of time before the rest of us are able to have very private screenings inside our heads.


Phones you can dunk: Drop your phone in the sink and you’re pretty much headed for a bad day.  But a California start-up named Liquipel says it has created a coating that will protect your phone in the event of a dreaded dip.  And the word is that both the iPhone 5 and the Samsung Galaxy S3 will come with the wondrous waterproofing.


Everyone likes the green: For those already dreaming about getting on your bike again, a new invention should make city riding a bit safer.  Called the Intersector, it uses a microwave radar gun to calculate the speed and length of approaching objects.  If it determines a car is coming into an intersection, the light stays green for four seconds; if it’s a bike, the green last for 14 seconds.  The nifty device is now being tested in a handful of California cities.


When cans chill: When spring comes, so will the first self-chilling can. Joseph Company International will start selling in California and Las Vegas an all-natural energy drink called  West Coast Chill that not only provides a jolt, but also absolves you of the weighty responsibility of putting it in the refrigerator.  Just press a button on the can and the temperature of the liquid inside drops 30 degrees F.  How did we do without this?


Chew your package: While we’re on the subject of packaging that makes our lives even easier, we may soon, thanks to Harvard researchers, have containers we can eat. The scientists call them WikiCells. They’re food membranes held together by electrostatic forces and they work like an edible, biodegradeable shell that’s gotta taste better than cardboard.


Does this make me look virtually fat? It will also become easier to buy clothes online. Make that to buy clothes online that fit. Using the same kind of 3D camera technology as Microsoft Kinect, the British firm BodyMetrics has come up with a way to let you try on clothes without actually trying them on. By creating a 3D map of your body, it will show you precisely how clothes will fit you, not Heidi Klum. Don’t be surprised to see this technology available on the Amazon website. And eventually, with 3D cameras in new models of Smart TVs, your living room could also become your fitting room.


Wearin’ of the screen: Not only will your clothes fit better, but they’ll also be able to turn into actual touch screens. Canadian scientists are testing new fibers that will keep clothing soft and flexible while it doubles as a sensor. Soon you may be able to turn up the music by simply brushing your sleeve or take your blood pressure without lifting a finger.


Thanks for sharing: Why should you have to search all over the place to see the video clips on YouTube or Vimeo that your friends have shared through social networks? Now you don’t. A new iPad app called Showyou pulls thumbnail images for all of them into one easy-to-use grid that turns your friends’ recommendations into Web video programming. What are friends for?



Coming soon: The Robot Diet: If we assume that robots will be doing a lot of our work in the future, here’s more good news. We may not have to worry about them running out of batteries. British scientists are making progress in getting robots to run on biological fuel, causing some to speculate that they’ll one day be able to live on dead insects, rotting plants and yes, human waste.


Now this would make a great halftime show: In case the above info makes you think less of our robot friends, take a look of this video of flying “nano quadrators” or little bots developed at the University of Pennsylvania. And prepare to be awed by how they fly in formation. If not for all of the Super Bowl ads put online before the game, this would have been the most popular clip on YouTube last week with more than 3 million views.



Source: Smithsonian.com

JFK Had an Affair with a Teenager, Book Revealed

John F. Kennedy carried on an 18-month-long affair with a teenage White House intern, according to a new book published this week by a 69-year-old grandmother who claims to be the late US president's lover.


Excerpts of the shocking memoir, "Once Upon a Secret: My Affair with President John F. Kennedy and Its Aftermath," were released Monday by the New York Post, which said it had purchased a copy of the book at a local bookstore.


In it, author Mimi Alford wrote a tell-all account detailing how at the time their relationship started in the summer of 1962, she was less than half the age of the dashing president, assassinated the following year at age 46.


In an excerpt published by The Post, Alford wrote that she met Kennedy just four days into her internship, and that he invited her the following day on a personal tour of the White House residence that included first lady Jackie Kennedy's bedroom.


"Slowly, he unbuttoned the top of my shirtdress and touched my breasts," Alford -- at the time Mimi Beardsley -- wrote in the excerpt.


"Then he reached up between my legs and started to pull off my underwear. I finished unbuttoning my shirtdress and let it fall off my shoulders."


"After he finished, he hitched up his pants and smiled at me" before pointing her in the direction of the bathroom, the Post reported.


"I was in shock," Alford wrote.


"He, on the other hand, was matter-of-fact, and acted as if what had just occurred was the most natural thing in the world."


PHOTOS: Tape Recording Reveals Kennedy's Space Vision


The young woman, described by one Kennedy biographer as a "tall, slender, beautiful" college sophomore, continued the relationship for a year and a half -- even traveling with the president on occasion -- until their affair ended with Kennedy's assassination.


Kennedy is said to have carried on numerous White House affairs during his presidency, including with an alleged dalliance with Hollywood starlet Marilyn Monroe.


The Post wrote that Random House, which published the book, says that Alford after the president's death "grieved in private, locked her secret away and tried to start her life anew, only to find that her past would cast a long shadow -- and ultimately destroy her relationship with the man she married."


Source: Discovery News 

Who Has Apples at Work? In Many Cases, It’s the Bosses

Apple products are catching on inside businesses, but who exactly is using them there?


Frank Gillett, an analyst at Forrester Research, decided to find out recently by surveying nearly 10,000 information workers in 17 countries to help paint a profile of the typical person who uses an iPad, iPhone or Macintosh for work. The study was partly inspired by what Mr. Gillett called the “air travel and Starbucks effect” — a sense he got, while spying more and more Apple icons among road warriors and $4 latte-drinkers, that usage of the company’s products skewed toward more affluent workers.


Sure enough, the study, which Forrester plans to release Thursday, says that 43 percent of people making over $150,000 a year use an iPhone, iPad or Mac for work, making them far more likely than any other group to use an Apple product. In comparison, 27 percent of people earning $100,000 to $149,999 said they use an Apple product for work, while 23 percent of people making $50,000 to $99,999 a year and 19 percent of earners below $50,000 said the same.


Similarly, 41 percent of the respondents who identified themselves as “directors” at their companies said they used an Apple product for work. For self-identified “managers” and “workers,” the figures were 27 percent and 14 percent, respectively.


It’s important to keep in mind that there are a lot more worker bees in the world making $50,000 or less than there are directors making $150,000 or more. So that smaller percentage of lower compensated employees using Apple products still represents a much, much bigger pool of customers for Apple.


In Forrester’s survey, for example, only about 200 respondents made over $150,000 a year, while there were 6,800 making $50,000 or less. Translation: There were nearly 1,300 Apple users in the low-earner category, and only 87 in the high-earner category, even though, as a group, the high-earners were more likely to use Apple devices.


In total, 21 percent of Forrester’s respondents said they use one Apple device or more for work.


It’s interesting to note how this income breakdown squares with the conventional narrative of how Apple products are making their way into offices, which was long hostile territory to anything but Windows PCs. The perception is that Apple is benefiting from the so-called trend of “consumerization,” in which hidebound information technology departments are being forced to adapt to an avalanche of consumer technologies like mobile phones, tablets and social media by workers who effectively sneak them into the workplace.


That trend is real, but it appears that top decision makers inside big companies are often doing the sneaking, not just rank-and-file employees. That may be partly because highly compensated executives simply have more money to spend on Apple products. It could also be that they have more leverage to persuade their information technology departments to support Apple products. Mr. Gillett says he believes the portion of people in lower-earning categories using Apple products will only increase over time.


“Someone influential walks into I.T. and says, ‘Hey, you gotta make e-mail work on my iPad,’ ” he said. “At some point, it gets very hard for I.T. to say, ‘No, you can’t have it.’ “


Source: Bits

How to Think Positive About This Year’s Underwhelming Oscar Nominees

The Best Picture nominees were announced this week, and you seem a little ... unenthused. Are you just not feeling it for The Artist? Did you find The Descendants, Moneyball, and Hugo to all be simply "fine" and not superlative? Are you offended by the shamelessly effective tear-jerking of The Help,Extremely Loud and Incredibly Close, and War Horse? Well, since these are the nominated films we're all stuck with for the next month until the Oscarcast, Vulture wants to help you learn how to force yourself to be enthusiastic about them! Here are several upbeat talking points for each of the films nominated for Best Picture. Repeat them every morning for a simple pick-me-up!

The Descendants
- Any movie that uses Judy Greer well deserves all the awards!
- We appreciate Alexander Payne's continued insistence on dressing movie stars in normal-people clothes and casting ordinary-looking, age-appropriate women as their spouses!
- Why not set more movies in Hawaii, the birthplace of our president? Such a good setting!
- George Clooney ran around in flip-flops!
- Alexander Payne made Election! Give him a belated Oscar just for that!

The Artist
- It's fun to watch smiling people tap-dance!
- A black-and-white movie might win Best Picture, and that's kind of novel!
- We have to support Uggie in what may be his swan song!
- It's a well-made love letter to a bygone era of Hollywood!
- How kind of them to let Malcolm McDowell come in and randomly appear in about 30 seconds of the movie! Keeps him off the streets!

War Horse
- All those blue eyes are so pretty!
- Who doesn't like Emily Watson?
- This movie is kinda like The Incredible Journey, your favorite movie from when you were 7!
- Tom Hiddleston and Benedict Cumberbatch are in the film! Women with Tumblrs love Tom Hiddleston and Benedict Cumberbatch!

Moneyball
- It is good to see a movie where Brad Pitt lets himself be handsome!
- It's a sports movie that plays well even if you know nothing about sports!
- Bennett Miller was working from an Aaron Sorkin screenplay and he resisted the impulse to have everyone talk at top speed while walking! Instead, the characters sat around and actually paused a lot between sentences! Commendable!
- Remember that scene with Robin Wright as Pitt's ex-wife and Spike Jonze as her new husband? How marvelously, uncomfortably funny was that scene?
- Because of Moneyball, Jonah Hill is promising to make more good movies and less movies like The Sitter!

The Tree of Life
- Dinosaurs!
- That cinematography, so beautiful!
- All the kids were so good!
- This movie made Sean Penn angry, and doesn't that kind of make you fonder of the movie?

Midnight in Paris
- This movie has Marion Cotillard, and any movie is improved when Marion Cotillard is onscreen! Even Nine!
- Paris is the best city!
- It would be nice to reward Woody Allen for the biggest hit of his career!
- Corey Stoll as Hemingway: so funny and handsome! (Try to concentrate on him and forget that Adrien Brody was also in this movie!)

Hugo
- Scorsese uses 3-D like a master, employing depth of field on those incredible sets to make us feel like we're really in that train station!
- Other 3-D movies that have been nominated for Best Picture include Up andToy Story 3, and you liked both of those!
- That moment where Sacha Baron Cohen slowly leans into the camera and says, "It seems Maximilian doesn't like the cut of your jib!" ... well, we support campy quotability in our Best Picture nominees!
- The extended Melies flashback is really terrific!
- This movie had a robot!

Extremely Loud and Incredibly Close
- That scene where Sandra Bullock fights with her kid after he tells her, "I wish you were the one that died" ... well acted!
- Max von Sydow has no dialogue, and you liked that in The Artist!
- Jeffrey Wright is so good in that scene in his office where he talks about his father. So good!
- Casting former Jeopardy winners (like young star Thomas Horn) is a good thing! It brings us closer to the Ken Jennings/Watson buddy-cop comedy of our dreams!

The Help
- Even if its racial politics are iffy, this is a movie with several great performances from terrific actresses, so it can't be that bad!
- If you squint, this movie feels a little bit like Steel Magnolias!
- Isn't it kind of great that the biggest hit of all these nominees is the period drama starring women?
- Viola Davis!
- More Best Picture nominees ought to prominently feature characters eating shit pies!

Source: Vulture

The Dawn of Lower Pay on Wall St.

This week, the venerable investment bank Morgan Stanley stunned a generation of Wall Street bankers and traders by announcing that it was capping cash bonuses for 2011 at $125,000. Its top executives, including the chief executive, James P. Gorman, and his management team, will receive zero cash. And the Republican presidential front-runner, Mitt Romney, reignited a national debate over taxing the rich and Wall Street pay by revealing that his tax rate was in the 15 percent range, joining the billionaire investor Warren E. Buffett among the ranks of the favored few who pay lower rates than people earning just a small fraction of their millions. Mr. Romney hasn’t revealed his tax returns or total income, but disclosure forms indicate he received $9.6 million in 2010 and part of 2011 and had a net worth in excess of $250 million, much of it derived from his days as head of the private equity firm Bain Capital.


For most people, $125,000 is a lot of money, and for people on Wall Street, the cash bonus comes on top of base pay that has increased in recent years. The average base pay for managing directors at Morgan Stanley has risen to $400,000 and to $600,000 at Goldman Sachs. Employees also earn large parts of their bonuses in deferred cash and stock.


But $125,000 is a pittance by Wall Street standards. Citigroup paid Andrew Hall, a star commodities trader, a bonus of $98 million in 2008, the year of the financial crisis. As recently as 2010, many traders and investment bankers were arguing over whether their yearly bonuses should be eight figures rather than seven. Compensation at the 25 largest firms hit a record $135 billion that year, according to an analysis by The Wall Street Journal.


This week, Wall Street veterans were marveling that after paying federal and New York’s high state and city income taxes, Morgan Stanley employees who get the maximum cash bonus would take home just $65,000 to $75,000 on top of their base pay. “That’s an eye-opener,” said Michael Driscoll, a former top trader at Bear Stearns and Geosphere Capital, a hedge fund, who is now a visiting professor at Adelphi University. Many people on Wall Street, he said, have “multiple homes at high cost and with big mortgages, private school payments, college tuitions, car leases and payments. They were out over their skis with leverage and assumed the good days would last forever.”


Last year, Morgan Stanley increased the deferred portion of cash compensation to 60 percent from 40 percent, a move that was greeted with howls from employees who said they didn’t have enough advance notice and needed the money to meet mortgage payments, school costs and other fixed expenses. “The cost of living is so high in the New York area that we found it was a genuine hardship,” a Morgan Stanley spokeswoman told me this week. This year, cash bonuses for employees making $250,000 or less will be paid in full, with none of it deferred, although the bonuses are being capped at $125,000.


Even for those making seven figures or more, the cuts “are a blow,” Mr. Driscoll said. “The effect is psychological. To a large extent, Wall Street keeps score by what you’re paid. If you’re making $750,000 or $1 million, you’re doing O.K. by any reasonable standard. A lot of people make that kind of money. But it affects people’s psyches. It’s a hard thing for the other 99 percent to grasp, but for better or worse, that’s how they measure their value and self-worth: what their paycheck is. I’m not trying to defend that, but that’s how it is. Now they’re being paid less and less. They’re being pilloried in the press and by the 99 percent. Even Republican candidates are attacking you. People in the industry are being treated like pariahs.”


An investment banker I know lamented, “Contrary to popular opinion, bankers are people, enduring the human condition like other people. The industry is experiencing massive retrenchment, waves of redundancies, endless public criticism and repeated cutbacks in compensation levels.”


Overall compensation on Wall Street this year is expected to drop at least 30 percent, reflecting the dismal financial results reported this week by the industry standard-bearers Goldman Sachs, JPMorgan Chase, Bank of America and Morgan Stanley. The compensation ratios are hard to evaluate because this year’s payouts include the deferred portions of previous years’ awards, and include only the current components of this year’s.


Still, a trend seems clear. At Goldman Sachs, compensation was just over 42 percent of revenue, and at JPMorgan Chase it was 34 percent for the investment bank — low by historical standards. Even with the new caps on cash bonuses, Morgan Stanley’s compensation was something of an outlier, representing 51 percent of revenue, which reflects high costs at its global wealth management division, where brokers are paid on commission. Still, Morgan Stanley’s ratio was sharply lower than 2009’s 62 percent, which Mr. Gorman at the time vowed “no one will ever see again.”


In a regulatory filing Friday, Morgan Stanley said Mr. Gorman’s total compensation for 2011, including stock and deferred cash, would drop by 25 percent, to $10.5 million from $14 million in 2010.


Wall Street firms typically aim for a compensation ratio of less than 50 percent of revenue, but especially in weak years, they’ve often gone higher. One of the maddening aspects of Wall Street pay, at least for those outside the industry, is that in good times bankers and traders have demanded what they consider their fair share, often invoking the adage “we eat what we kill.” But in lean years, they’ve also insisted on high pay, threatening to jump to a competitor. What is different this year is that firms seem willing to call that bluff.


“In prior years, you’d see the ratios jump in down years,” said Brian Foley, an executive compensation expert. “You aren’t going to see that this year. The retention argument was always there, but it’s tough to make that argument this year because much of the Street is down. Where are they going to go? People are cutting back or even eliminating investment banking. They’re laying people off. A hedge fund? There are only so many hedge funds. And hedge funds haven’t had such a good year, either. Plus, the job security there is weak. It’s a limited opportunity, and now it’s constrained. Private equity is also limited. Those doors are closing.”


And European banks like Deutsche Bank and UBS, which once aggressively poached Wall Street talent, are reeling from the European debt crisis and have all but stopped hiring. UBS announced that it was sharply curtailing its investment banking operations after years of expansion. One Wall Street executive told me that “frankly, what’s different from last year is that the playing field feels even. Last year, they could walk across the street to Deutsche Bank, and we had some defections. This year, there’s very little risk. A top trader isn’t going to walk out the door.”


And a person with knowledge of Mr. Gorman’s decision at Morgan Stanley said he “wants people to think long term.”


Another factor has been the Federal Reserve, which has been closely scrutinizing Wall Street compensation practices in an effort to align incentives with longer-term interests and to curb incentives for excessive risk-taking. “We’re very aware of the environment we’re operating in,” the Morgan Stanley spokeswoman said. “We’re taking a disciplined approach to compensation and trying to align it with shareholder interests. And the bottom line is, it wasn’t a good year.”


Such changes are arguably long overdue. Many people are still enraged by the perverse compensation practices that had the insurance giant American International Group using money from the Troubled Asset Relief Program to pay millions in guaranteed bonuses to employees after investments drove the firm to insolvency. “I know no one is going to shed any tears over these people,” Mr. Driscoll said. “But I know people who are having a tough time keeping it all together. You can manage for a year or so, but eventually the compensation levels we’re seeing are going to catch up with you.”


It remains to be seen whether Wall Street’s newfound pay discipline will stick. A culture in which self-worth is measured by pay isn’t going to change overnight, or even in a few years. But virtually everyone I spoke to agreed that Wall Street pay, while still lofty, will be lower for the foreseeable future, and may never return to the heady days of 2007. “Internally, it’s troubling for people,” one executive told me. “But they’re going to have to change the way they think. In the mid-1990s, everyone did fine, the pay was perfectly respectable, and it didn’t make headlines. The chief executive made $4 million, and you thought that was great. Was anything so wrong with that?”


Source: The New York Times