ABCDE BUSINESS sunday, august 22, 2010 SLATE
Iceland to our land Skyr means yogurt — and an unlikely success story for a guy named Siggi in the little-guy economy. G3
CAR PAGES
Regal wheels from GM Wouldn’t you really rather have a Buick? Suddenly that ancient jingle isn’t such a silly question.
Plus, ads for thousands of vehicles, on the back page.
A HEDGE FUND KING CALLS IT QUITS
“You’ve been doing this for 30 years. You are a billionaire.
You can’t take a couple of days off to play golf?”
— Johann Rupert, after Stanley Druckenmiller, right, told him he was too busy to play in a golf tournament in Scotland. A month later, Druckenmiller has decided to take quite a few days off. He’s retiring, and closing his $12 billion hedge fund.
JOE KOHEN/WIREIMAGE/GETTY IMAGES
volatile markets, he told Rupert, chief executive of Com- pagnie Financiere Richemont, the world’s largest jewelry maker. “Are you crazy?” was Rupert’s reply, according to
S I
Druckenmiller. “You’ve been doing this for 30 years. You are a billionaire. You can’t take a couple of days off to play golf?” “I’d had that same thought a hundred times,” Drucken- miller said in an interview announcing his decision to re-
by Katherine Burton Bloomberg News
tanley Druckenmiller, one of the most successful hedge fund managers ever, has flirted with the idea of quitting several times in the past 10 years. A month ago, he got serious. That’s when friend Johann Rupert
invited him to play at the Alfred Dun- hill Links Championship in Scotland, a pro-am golf tournament in October. Druckenmiller, an avid golfer, de- clined.
He couldn’t leave the office, given October’s history of
tire after a 30-year career in which he amassed one of the best trading records in the hedge fund industry and made $1 billion for George Soros by forcing a devaluation of the British pound in 1992. Almost every family vacation, he said, had been interrupted by a work emergency. “For 30 years I’ve been responsible for managing client
money and it’s been a joy, but at some point I need to move on,” Druckenmiller said. “Thirty years is enough.” Druckenmiller, 57, said he’s frustrated by his failure in the past three years to match returns that had averaged 30 percent annually since 1986. His Duquesne Capital Management, which oversees $12 billion and has never had a losing year, is down 5 percent in 2010. “You may remember that I chose to leave Soros Fund
Management 10 years ago because the challenge of man- aging an enormous amount of capital was having a clear impact on my ability to perform, as well as my state of be- ing,” Druckenmiller wrote to his 100 clients. “Unfortu- nately, as Duquesne has grown, these factors have again emerged.” Druckenmiller built his reputation making large bets on macroeconomic themes that he spotted before others, a skill he shares with legendary traders including Bruce
druckenmiller continued on G5 by Ylan Q. Mui
The final phase of the landmark feder- al legislation that placed new restrictions on credit card interest rates and fees takes effect Sunday. Though the bulk of the law’s provisions were enacted earlier this year, there are still a few important changes you need to be aware of:
Limiting penalty fees
The law required the Feder- al Reserve to write regulations outlining how much credit card companies can hit you with for things such as late payments or over-the- limit purchases. The new rules ban them from charging fees that are larger than the infraction. For example, if you are late on a $20 payment, your penalty fee cannot be more than $20. Or, let’s say you spend $5 more than your max. The charge for that cannot be more than $5.
} Banning certain fees }
Issuers will no longer be able to charge you an inactiv- ity fee for not using your card.
They also can only charge you one fee per infraction. So if you make one late pay- ment, they can you only ding you once.
Containing rate increases If a credit card company raises your in-
G AX FN FS LF PW DC BD PG AA FD HO MN MS SM
MARKETS A second week of losses
Stocks slide after a jump in jobless claims and a surprise slump in manufacturing. G6
YTD: Dow NASDAQ S&P 500 -2.1% -3.9% -3.9%
Safe to shop, yet? Check the new rules
terest rate, it will have to tell you why. In addition, if your rate increases, the issuer must reevaluate it every six months. If you deserve to have it lowered, the card company must comply within 45 days of the evaluation. Previously, if a credit card company hiked your rate, there was no obligation to look at it again.
Protecting gift cards The law also established
}
new protections for store gift cards, which can only be re-
deemed at one retailer, and prepaid gift cards, which may be used at many loca- tions. All gift cards sold starting Sunday must be good for at least five years. In fact, even if you have a gift card and it has an expiration date on it sooner than that, any unspent money left on the card must be honored for at least five years. You can request a replacement for any expired gift card for free. Consumers have long complained about the number of fees on certain gift cards. Under the new law, only one fee per month can be charged and dormancy fees can only be assessed if you haven’t used your card in a year. However, you will still have to pay to buy certain types of gift cards. The law also does not cover gift cards that come as part of reward or promotional programs and re-loadable prepaid cards that act as replacements for checking accounts.
muiy@washpost.com
MICHELLE SINGLETARY The Color of Money
For students, don’t skip out on Credit Cards 101
E
ntering freshmen at colleges across the country will be the first class of regular-semester students to face
credit card restrictions under the Credit Card Accountability, Responsibility and Disclosure Act of 2009. To open a credit card account if you are under 21, you will need to show that you have the income to make required payments or get a co-signer 21 or older who has the ability to do so. Once you have a card with a co-signer, if you want a higher credit card limit, the co-signer must agree in writing to the increase. Credit card companies are prohibited from marketing credit within 1,000 feet of a college campus. This limit would include related college events, such as concerts or athletic competitions. Companies are also banned from offering certain “tangible” gifts. But I wonder how successful the law, also known as the Credit CARD Act, will be.
Credit marketers will find plenty of
locations near campus to pitch to students. The companies might not be able to offer a free T-shirt or stuffed animal, but they can entice students with discounts, reward points or
In Outlook
Go Team Inc.: College football is a big business in need of market-driven reform. Why not start by paying the players what they’re worth? A pro agent makes the case. B1
promotional credit terms, according to final rules released by the Federal Reserve. I’m sure plenty of parents are
convinced that their kid needs to establish credit, so they will be all too willing to co-sign for a credit card. By the way, the Federal Reserve says that anyone 21 or older — not just parents, legal guardians or a spouse — can co-sign for younger students to get a credit card. This means older siblings or even college friends could co-sign. But no one should ever do this. Co-signing doesn’t mean you are the backup borrower: You are equally responsible for the debt. Unless you are prepared to treat any charges as your own, don’t co-sign. I’ve long advocated that college students who are not employed full time shouldn’t have credit cards. It’s possible for them to get through college using just cash and a debit card. Trust me — I’ve seen it happen, even with a student who studied abroad. Although there are tougher credit standards now, credit issuers are still pursuing young adults.
singletary continued on G4
In copycats vs. copyright, the knock-off wins
pride myself on being a man of substance. A wonk. A nerd, even. And like most nerds, I don’t have a great
eye for fashion. So I ask this question seriously: What did you think of Chelsea Clinton’s Vera Wang wedding dress? Want to buy it? What if I can sell it to you really cheap? On Aug. 5, Sen. Charles E. Schumer
(D-N.Y.) introduced S.3728: The Innovative Design Protection and Piracy Prevention Act. He’s got 10 co-sponsors —including three Republicans — and a big idea: to extend copyright protections to the fashion industry, where none currently exist. That’s right: none. I —
EZRA KLEIN Economic and Domestic Policy
well, not I, but someone who can sew — can copy Vera Wang’s (extremely expensive) dress and sell it to you right now (for much less), and Wang can’t do a thing about it.
Allan Schwartz, founder and lead designer of the label ABS, has promised to do exactly that. He’ll take the dress, remake it and sell it to the masses for much cheaper. Is he stealing? Or is he popularizing? Schumer’s legislation suggests his answer: He wants to make Schwartz’s imitation illegal. Only Wang should be able to profit from her designs, at least for the first three years (the length of Schumer’s proposed copyright). But what if he’s wrong? What if copying is . . . good? We’re used to the logic of copyright.
klein continued on G4 GENEVIEVE DE MANIO/AFP/GETTY IMAGES
Chelsea Clinton’s Vera Wang wedding gown is already a fashion victim. Allan Schwartz plans to copy the dress and sell it under the ABS label. No copyright protection forbids it.
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