http://profiles.friendster.com/r8123611918

Dear Friend,

To many the word “righteousness” seems intimidating, something they seek to obtain, but no matter how hard they try it seems righteousness remains elusive. This struggle leads to a feeling of inability, inferiority and hopelessness, and it causes sincere believers to wonder if the Christian life really works. When we discover the New Covenant and the finished work of Jesus Christ at the cross, righteousness becomes a very positive word, because we recognize that the only righteousness worth anything is Jesus’ own righteousness, and we receive it as a free gift.

Without an unshakable assurance of Christ’s righteousness imputed to us by faith, we will never have the power to live the Christian life, or the boldness to move in the supernatural power of God. The assurance of Christ’s righteousness in us causes us to grow up from being spiritual babies to mature believers. The Hebrew writer tells us that if we are “unskilled in the word of righteousness” we are spiritual babies (Hebrews 5:13), meaning that true spiritual maturity is found in discovering the word of Christ’s righteousness.

ONLY GOD’S RIGHTEOUSNESS

Because God is perfectly righteous He cannot accept anything less. This poses a potential problem. On the one side God desires fellowship with us, but that fellowship will be tainted due to the fact that our best attempts at righteousness are but “filthy rags.” Here is the dilemma - God loves people yet He hates unrighteousness. How then can God have fellowship with the creation He loves? By imputing His own righteousness into us. The good news is that Jesus’ righteousness is ours by faith. This is why the Bible calls us “saints”, “just”, “faultless”, “without spot or wrinkle”, and “without reproach.” When we believe what God says about us and apply those descriptions to ourselves, we are not boasting in ourselves, but in Jesus, who lives in us.

Paul writes that we “become the righteousness of God in Jesus.” (2 Corinthians 5:21) John states that Jesus, the righteous One, is at the right hand of the Father interceding for us. (1 John 2:1) Here we see that righteousness is a person, Jesus Himself. (1 Corinthians 1:30) All these statements about how we are righteous now hinge on Jesus’ death on the cross, where He took our debt of sin and nailed it to the cross. This had a twofold effect: first our slate was clean, and secondly “principalities and powers” were disarmed and “made a public spectacle of.” (Colossians 2:14-15)

How does the devil condemn you? Does he not use unrighteous thoughts and deeds that you may have done to accuse you? Do you see why Jesus’ death on the cross in one swoop removed our sins and disarmed the devil? Once you see your unrighteousness nailed to the cross, the devil has no bullets for his pistol of accusations. When you believe that your sins have been nailed to the cross and Jesus is now your righteousness, the devil is reduced to firing blanks at you.

THE EFFECTS OF RIGHTEOUSNESS

The effects of Jesus’ righteousness imputed to us are immense. We are presented to God “holy and blameless and above reproach in His sight.” (Colossians 1:22) This does not refer to some future time; it is our current standing.

We are free from condemnation, because “It is God who justifies, who then is he who condemns. It is Christ who died, and furthermore is also risen, who is at the right hand of God, who also makes intercession for us.” (Romans 8:34) The only one who could condemn us and declare us unworthy is Christ, but instead He has made us righteous.

The only one who could condemn us and declare us unworthy is Christ, but instead He has made us righteous.

Since Christ does not condemn, no condemnation is valid; we are without spot and wrinkle, holy and without blemish before God. (Ephesians 5:27) Maybe you will want to confess who God says you are. Say it out loud, “I’m holy, blameless and above approach in the sight of God. Jesus’ death has justified me, and I am free from condemnation.”

BEAT UP ON SIN

What is our foundation? The Gospel! Paul writes about the Gospel, “For in it the righteousness of God is revealed from faith to faith; as it is written, the just shall live by faith.” (Romans 1:17) God’s anger at sin was revealed at the cross, where God did what He had wanted to do all along: He beat up on sin. God punished sin once and for all, and that punishment, which we deserved, fell on the flesh of Jesus. God imputes His righteousness to our account, on the basis that our sins have been paid, which clears the way for us to be declared righteous.

THE BENEFITS OF CHRIST’S FINISHED WORK

God demonstrated His righteousness, “because in His forbearance God had passed over the sins that were previously committed, to demonstrate at this present time His righteousness.” (Romans 3:21-26) God doesn’t treat sin lightly; no, He gave sin a most severe punishment. Before the cross God had “forbearance” and “passed over sins.” There are many instances in the Old Testament when various people should have been punished for their sins, but God overlooked it knowing that the final payment for sin would be made through Christ. Now we look back at the full payment that has been made on our behalf, and we enjoy the benefits of Christ’s finished work.

1. Our Prayers Avail

It’s not the fervent prayers that avail much, but the “effective fervent prayer of a righteous person.” (James 5:16) As long as you pray looking at your own righteousness your prayers will be ineffective. Such prayers are counter-productive and position you in a place where God cannot show His kindness to you. On the contrary, when your prayers are based on believing that Jesus has made you righteous, they avail much.

2. We are freed from self-effort

Once we recognize that Jesus is our righteousness any religious acts or spiritual efforts to please God become redundant and ridiculous.

3. We have a new identity

We are new creations in Christ (2 Corinthians 5:17), all things have become new. We are not merely renovated human beings, we have become partakers of divine nature; we are a new kind of person. Every being has a nature after its own kind whether bird, fish, cat or dog. We could pretend that a bird has fish nature and immerse into water, but it would quickly become clear that all of our good intentions would not bear fruit. You could pretend that a dairy cow is a racehorse, saddle it, and do all the proper training exercises, but you will find out that the cow still has a cow’s nature and a cow’s abilities. Similarly we can dress up a sinner in choir robes, put a hymnbook and a Bible in his hands, and make him speak Christian words, but if the nature has never been transformed our effort would be futile. By Jesus imputing righteousness we receive a new nature; we are not merely dressed up sinners, we have become saints of God.

4. We Have Victory Over Sin

Romans chapter 7 gives a graphic description of a person married to his own self-effort, the law, trying to overcome sin by performing good deeds. In spite of good intentions he fails, becomes frustrated, and exclaims “oh wretched man that I am.” In Romans chapter 8 we find a person married to Christ. Both the law and Christ are holy, just and perfect, but the law is powerless, while Christ is full of power.

5. We Are Secure

We are secure in Jesus because “if anyone sins we have an advocate with the Father, Jesus Christ the righteous.” (1 John 2:1) Your failures do not alter Jesus’ righteousness. Often people ask, “Well Pastor Peter what if I sin, what if I fail, what then?” Well, if that happens, it’s still none of the devil’s business and the sin is not more powerful than what Jesus did on the cross. Imagine a pair of scales in front of you, on the one side are your sinful deeds and on the other Jesus’ death on the cross. Which one tips the scale? What Jesus did is infinitely more powerful than any failure of ours. No wonder Solomon wrote, “For a righteous man may fall seven times and rise again, but the wicked shall fall by calamity.” (Proverbs 24:16) Notice that the one who has become righteous may fall. It doesn’t say that you have to fall because we can enjoy victory over sin, but it may happen, and if it happens you will “rise again.” The person with Christ’s righteousness has an inward nature that causes him to rise again. Put an eagle among the barnyard chickens, and the eagle will still mount its wings and soar because that’s the nature of the eagle. A Christian may find himself surrounded by failure and defeat, but the righteousness nature in the believer causes him to rise again. Remember that nothing can shake or alter what Jesus has done for you, as long as you believe it; His righteousness is foolproof and failure proof.

6. We Are Empowered

Some suggest that by teaching about righteousness as a gift, people are encouraged to live a sinful life. Not at all! Actually, this reasoning is both ridiculous and illogical. How would an increased awareness of your new righteous nature make you sin more? In fact, this is the only cure for sin. Religion teaches that you need to clean up your act, crucify your flesh, and deal with sin in your life in order for God’s blessing to flow. The gospel teaches the opposite. Receive the free gift of God’s righteousness and His blessing and “you will not fulfil the lust of the flesh.” (Galatians 5:16) Often the gospel believer and the legalistic person have similar moral convictions. Both groups believe that lying, stealing, adultery, etc. are wrong, but the reasons for pursuing holiness vastly differ. The legalistic person is seeking to be holy in order to please God, while the gospel believer lives holy because he has received the righteousness of God as a free gift.

The legalistic person is seeking to be holy in order to please God, while the gospel believer lives holy because he has received the righteousness of God as a free gift.

The gospel believer lives out who he is on the inside, while the legalist seeks to become something he is not. We live righteous because we have received Christ’s righteousness.

Peter Youngren

Intersexuality

From Wikipedia, the free encyclopedia

http://profiles.friendster.com/r8123611918

Intersexuality is the state of a living thing of a gonochoristic species whose sex chromosomes, genitalia, and/or secondary sex characteristics are determined to be neither exclusively male nor female. An organism with intersex may have biological characteristics of both the male and female sexes.^[1]

Intersexuality is the term adopted by medicine during the 20th century applied to human beings who cannot be classified as either male or female.^[2][3][4]

Intersexuality is also the word adopted by the identitary-political movement, to criticize medical protocols in sex assignment and to claim the right to be heard in the construction

Language

Research in the late twentieth century has led to a growing medical consensus that diverse intersex physicalities are normal, but relatively rare, forms of human biology. Perhaps the most prominent researcher, Milton Diamond, stresses the importance of care in selection of language related to intersexuality.

Nomenclature

Hermaphrodite

The terms hermaphrodite and pseudohermaphrodite, introduced in the 19th century, are now considered problematic as hermaphrodism refers to people who are both completely male and completely female, something not possible.^[7] The phrase ‘”ambiguous genitalia’” refers specifically to genital appearance, but not all intersex conditions result in atypical genital appearance.^[8]

Disorders of sex development

The Intersex Society of North America and intersex activists have moved to eliminate the term “intersex” in medical usage, replacing it with “disorders of sex development” (DSD) in order to avoid conflating anatomy with identity.^[9] Members of The Lawson Wilkins Pediatric Endocrine Society^[10] and the European Society for Paediatric Endocrinology^[11] accepted this term in their “Consensus statement on management of intersex disorders” published in the Archives of Disease in Children^[12] and in Pediatrics.^[13]

The term is defined by congenital conditions in which development of chromosomal, gonadal, or anatomical sex is atypical. However, this has been met with criticism from other activists who question a disease/disability model and advocate no legal definition of sexes, no gender assignments, no legal sex on birth certificates, and no official sexual orientation categories.^[14] Alternatives to labeling these as “disorders” have also been suggested, including “variations of sex development”.^[15]

Intersex people in society

History

Intersex individuals are treated in different ways by different cultures. In some cultures intersex people were included in larger “third gender” or gender-blending social roles along with other individuals. In most societies, intersexed individuals have been expected to conform to either a male or female gender role.^[16]

Whether or not they were socially tolerated or accepted by any particular culture, the existence of intersex people was known to many ancient and pre-modern cultures.

As an example, one of the Sumerian creation myths from more than 4,000 years ago has Ninmah, a mother goddess, fashioning mankind out of clay.^[17] She boasts that she will determine the fate – good or bad – for all she fashions. Enki, the father god, retorts as follows.

Enki answered Ninmah: “I will counterbalance whatever fate — good or bad — you happen to decide.” Ninmah took clay from the top of the abzu [ab = water, zu = far] in her hand and she fashioned from it first a man who could not bend his outstretched weak hands. Enki looked at the man who cannot bend his outstretched weak hands, and decreed his fate: he appointed him as a servant of the king.

… [Three men and one woman with atypical biology are formed and Enki gives each of them various forms of status to ensure respect for their uniqueness] …

Sixth, she fashioned one with neither penis nor vagina on its body. Enki looked at the one with neither penis nor vagina on its body and gave it the name Nibru [eunuch(?)], and decreed as its fate to stand before the king.”

Since the rise of modern medical science in Western societies, some intersex people with ambiguous external genitalia have had their genitalia surgically modified to resemble either male or female genitals. Ironically since the advancements in surgery have made it possible for intersex conditions to be concealed, many people are not aware of how frequently intersex conditions arise in human beings or that they occur at all. ^[18] Contemporary social activists, scientists and health practitioners, among others, have begun to revisit the issue, and awareness of the existence of physical sexual variation in human beings is returning.

There are increasing calls for recognition of the various degrees of intersex as healthy variations which should not be subject to correction. Some have attacked the common Western practice of performing corrective surgery on the genitals of intersex people as a Western cultural equivalent of female genital cutting. Despite the attacks on the practice, most of the medical profession still supports it, although activism has radically altered medical policies and how intersex patients and their families are treated.^{[19] [20]} Others, typically social conservatives, have claimed that the talk about third sexes represents an ideological agenda to deride gender as a social construct whereas they believe binary gender (i.e. there is only male and female) is a biological imperative.^[21]

Depending on the type of intersex condition, corrective surgery may not be necessary for protection of life or health, but purely for aesthetic or social purposes. Unlike other aesthetic surgical procedures performed on infants, such as corrective surgery for a cleft lip (as opposed to a cleft palate), genital surgery may lead to negative consequences for sexual functioning in later life (such as loss of sensation in the genitals, for example, when a clitoris deemed too large/penile is reduced/removed, or feelings of freakishness and unacceptability) which would have been avoided without the surgery; in other cases negative consequences may be avoided with surgery. Opponents maintain that there is no compelling evidence that the presumed social benefits of such “normalizing” surgery outweigh the potential costs.^[22](Similar attitudes are present in some cases of botched infant circumcision, in which the solution might involve intensive medical and parental efforts to reassign the male baby to a female identity, which opponents claim lead to the degrading interpretation that females are essentially castrated males. This view overlooks the embryological origin of the penis/clitoris.) Defenders of the practice argue that it is necessary for individuals to be clearly identified as male or female in order for them to function socially. However, many intersex individuals have resented the medical intervention, and some have been so discontented with their surgically assigned gender as to opt for sexual reassignment surgery later in life.

During the Victorian era, medical authors introduced the terms “true hermaphrodite” for an individual who has both ovarian and testicular gonadal histology, verified under a microscope, “male pseudo-hermaphrodite” for a person with testicular tissue, but either female or ambiguous sexual anatomy, and “female pseudo-hermaphrodite” for a person with ovarian tissue, but either male or ambiguous sexual anatomy. The writer Anne Fausto-Sterling coined the words herm (for “true hermaphrodite”), merm (for “male pseudo-hermaphrodite”), and ferm (for “female pseudo-hermaphrodite”), and proposed that these be recognized as sexes along with male and female. However, her use was “tongue-in-cheek”; she no longer advocates these terms even as a rhetorical device, and her proposed nomenclature was criticized by Cheryl Chase, in a letter to The Sciences which criticized the traditional standard of medical care as well as Fausto-Sterling’s shorter names, and announced the creation of the Intersex Society of North America.

Intersex in popular culture

Beginning as early as 1989, intersex became a topic of interest for broadcast TV and radio in the United States and other countries. Jeffrey Eugenides‘ novel Middlesex (2002) is narrated by an intersex character who discusses the societal experience of an intersex person.^[23] The Japanese manga series I.S., first published in 2003, features intersexual characters and how they deal with intersex-related issues and influence the lives of people around them.

Notable intersex people

• Cheryl Chase (activist), intersex activist^[24]
• Erik Schinegger, alpine skier ^[25]
• Jim Sinclair^[26]
• Lady Colin Campbell, British aristocrat and author of Guide to Being a Modern Lady^[27]
• Edinanci Silva, judoka and Gold medalist in the woman’s half-heavyweight division at the Pan-American games.
• Dawn Langley Simmons, American Author

Noted researchers on intersexed development

• Milton Diamond, professor of neurology, Univ. of Hawai’i at Manoa
• Anne Fausto-Sterling

[edit] Intersex organizations

• AIS Support Group UK & International
• AIS Support Group Australia
• Intersex Trust Aotearoa New Zealand (ITANZ)
• Organisation Intersex International

Response from society

Lack in education

In high school, most emphasis is placed upon the most common XX and XY genotypes. Thus, people nowadays may be more likely to look towards the sex chromosomes than, for example, the histology of the gonads. However, according to researcher Eric Vilain at the University of California, Los Angeles, “the biology of gender is far more complicated than XX or XY chromosomes”.^[28] Many different criteria have been proposed, and there is little consensus.^[29]

Disorders and scope

Sax’s strict definition of intersex is most relevant to family practice and psychological research. Other interest groups serve different communities and concerns and so broaden the definition of intersex in these fields.

For instance, the Intersex Society of North America (ISNA) definition states that the following conditions “sometimes involve intersex anatomy”:^[30]

• 5-alpha reductase deficiency
• androgen insensitivity syndrome
• aphallia
• clitoromegaly
• congenital adrenal hyperplasia
• gonadal dysgenesis (partial & complete)
• hypospadias
• Kallmann syndrome
• Klinefelter syndrome
• micropenis
• mosaicism involving sex chromosomes
• MRKH (Müllerian agenesis; vaginal agenesis; congenital absence of vagina)
• ovo-testes (formerly called “true hermaphroditism“)
• partial androgen insensitivity syndrome
• progestin-induced virilization
• Swyer syndrome
• Turner syndrome

Some people with some of these conditions (such as Kallmann syndrome and Turner syndrome) do not self-identify as intersex.^{[citation needed]} See also 17-beta-hydroxysteroid dehydrogenase deficiency.

Prevalence

The prevalence of intersex depends on which definition is used.

According to the ISNA definition above, 1 percent of live births exhibit some degree of sexual ambiguity, approximately one in every hundred births. ^[31] Between 0.1% and 0.2% of live births are ambiguous enough to become the subject of specialist medical attention, including surgery to disguise their sexual ambiguity.

According to Fausto-Sterling’s definition of intersex^[32], on the other hand, 1.7 percent of human births are intersex.^[32] She writes,

According to Leonard Sax the prevalence of intersex “restricted to those conditions in which chromosomal sex is inconsistent with phenotypic sex, or in which the phenotype is not classifiable as either male or female” is about 0.018%.^[33]

Signs

Ambiguous genitalia

Ambiguous genitalia appear as a large clitoris or small penis and may or may not require surgery.

Because there is variation in all of the processes of the development of the sex organs, a child can be born with a sexual anatomy that is typically female, or feminine in appearance with a larger than average clitoris (clitoral hypertrophy); or typically male, masculine in appearance with a smaller than average penis that is open along the underside. The appearance may be quite ambiguous, describable as female genitals with a very large clitoris and partially fused labia, or as male genitals with a very small penis, completely open along the midline (”hypospadic“), and empty scrotum.

Fertility is variable. According to some,^[34][35]the distinctions “male pseudohermaphrodite”, “female pseudohermaphrodite” and especially “true hermaphrodite”^[36] are vestiges of 19th century thinking. According to others, the terms “male pseudohermaphrodite”, and “female pseudohermaphrodite” are used to define the gender in terms of the histology (microscopic appearance) of the gonads.^[37]

“True hermaphroditism”

With some conditions of intersex, even the chromosomal sex may not be clear. A “true hermaphrodite” is defined as someone with both male gonadal tissue (testes) and female gonadal tissue (ovarian tissue).

In 2004, researchers at UCLA published their studies of a lateral gynandromorphic hermaphroditic bird, which had a testicle on the right and an ovary on the left. Its entire body was split down the middle between male and female, with hormones from both gonads running through the blood.^[38]

This extreme example of hermaphroditism is quite rare.

Ovotestes

Although there are no definite reports on any true hermaphroditism in humans, there is, on the other hand, a spectrum of forms of ovotestes. The varieties range, including having two ovotestes or having one ovary and one ovotestis. This is often in the form of streak gonads. Phenotype is not determinable from the ovotestes; in some case the appearance is “fairly typically female,” in others it is “fairly typically male,” and it may also be “fairly in-between in terms of genital development.”^[39]

Intersex activist Cheryl Chase is an example of someone with ovotestes.^[24]

Other diagnostic signs

In order to help in classification, other methods than a genitalia inspection can be performed:

For instance, a karyotype display of a tissue sample may determine which of the causes of intersex is prevalent in the case.

Management

Management of intersex can be categorized into one of the following two ^[40]:

1. Treatments: Restore functionality (or potential functionality)
2. Enhancements: Give the ability to identify with “mainstream” people e.g. breast enlargement surgery

However, there are other categorisation systems of management of intersexed, which falls into neither category.^[41]

In any case, the most common procedure is surgery.

Surgery

The exact procedure of the surgery depends on what is the cause of a less common body phenotype in the first place. There is often concern whether surgery should be performed at all. A traditional approach to the management of Intersexuality has been socially motivated surgery. However, some ^[41] (Alice Dreger) say that surgical treatment is socially motivated and hence ethically questionable; without evidence doctors regularly assume that intersexed persons can not have a clear identity. This is often taken further with parents of intersexed babies advised that without surgery their child will be stigmatized. Further, since almost all such surgeries are undertaken to fashion female genitalia for the child, it is more difficult for the child to present as male if they later select a male gender identity. 20% to 30% of surgical cases result in a loss of sexual sensation (Newman 1991, 1992).

Conventionally, surgery is performed at birth. Intersex advocates such as Anne Fausto-Sterling in her Sexing the Body argue surgery on intersexed babies should wait until the child can make an informed decision, and label operation without consent as genital mutilation.

Causes

“Mainstream” sex development

Main article: Sexual differentiation

The common pathway of sexual differentiation, where a productive human female has an XX chromosome pair, and a productive male has an XY pair, is relevant to the development of intersexed conditions.

During fertilization, the sperm adds either an X (female) or Y (male) chromosome to the X in the ovum. This determines the genetic sex of the embryo.^[42] During the first weeks of development, genetic male and female fetuses are “anatomically indistinguishable,” with primitive gonads beginning to develop during approximately the sixth week of gestation. The gonads, in a “bipotential state,” may develop into either testes (the male gonads) or ovaries (the female gonads) depending on the consequent events.^[42] Through the seventh week, male and female fetuses appear identical.

At around eight weeks of gestation, the gonads of an XY embryo differentiate into functional testes, secreting testosterone. Ovarian differentiation, for XX embryos, does not occur until approximately Week 12 of gestation. In normal female differentiation the Müllerian duct system develops into the uterus, Fallopian tubes, and inner third of the vagina. In males the Müllerian duct-inhibiting hormone MIH causes this duct system to regress. Next, androgens cause the development of the Wolffian duct system, which develops into the vas deferens, seminal vesicles, and ejaculatory ducts.^[42] By birth, the typical fetus has been completely “sexed” male or female, the hormones and genital development remaining consistent with the genetic sex.

Conditions

The final body appearance doesn’t always correspond with what is dictated by the genes. In other words, there is sometimes an incongruence between genotypic (chromosomal) and phenotypic sex. Although there neither no less common chromosomal sex nor mosaicism/chimerism, but just the most common types (XY or XX), less common phenotypes still appear in such cases. In this sense, the common habit in the 21st century of elevating the role of the sex chromosomes above all other factors when determining gender may be analogous to the older habit of finding “true” sex in the gonads.

This phenomenon complicates the common XY sex-determination system, because it proves that genes don’t always definitely determine the sex.^[43]

NEW DELHI — Markets in Asia dropped in early trading on Thursday, as fears of a global credit crunch drove investors to dump stocks and park cash in safe havens like gold and Treasuries.

http://profiles.friendster.com/r8123611918

Financial stocks were the among hardest hit, with Australia’s MacQuarie Bank falling about 20 percent, Japan’s Sumitomo Mitsui Financial Group dropping 7 percent and South Korea’s Kookmin Bank falling by 6.1 percent before lunchtime in Asia. Investors are concerned that banks will halt lending to each other and to their customers.

The Nikkei 225 average fell to a three-year low, down 3.6 percent. In Hong Kong, the Hang Seng Index tumbled 7.6 percent, China’s CSI 300 was down 5.8 percent and Taiwan’s Taiex Index was down 3.6 percent.

“Global banking sector confidence is gone” said Brian Hunsaker, an Asia researcher at Fox, Pitt, Kelton in Hong Kong. The fear is that “banks will just stop lending” and that there will be nasty consequences for economies around the world, he said.

Tuesday’s $85 billion bailout of American insurer A.I.G., rather than reassuring investors in Asia, seems to have stoked fear and confusion, strategists said, because it came after Lehman Brothers was allowed to file for bankruptcy. Investors feel that if an institution is large enough, it will be bailed out, but if it is smaller, there is no guarantee it will, Mr. Hunsaker said. “If everyone knew for certain there would be no more bankruptcies of financial institutions,” he said, “markets would be up.”

Gold prices jumped as investors looked for safe havens from stocks. Gold rose 2.4 percent in trading in Australia before noon, capping an 11 percent rise on Wednesday. Mining stocks also climbed on the back of demand for gold.

American International Group Inc.

http://profiles.friendster.com/r8123611918
AIG: NYSE; Financials/Insurance - MultilineAmerican International Group, the insurance giant, consists of an assortment of businesses that run the gamut from aircraft leasing to life insurance for Indians to retirement plans for elementary schoolteachers. While the main insurance unit and some other parts of the business remained profitable, in the fall of 2008 complex deals made by one unit dragged it to edge of ruin, as the mortgage market underlying the transaction melted down. On Sept. 17 the Federal Reserve announced that it was taking control of the company in an $85 billion bailout meant to prevent the havoc across international markets that would likely follow the company’s collapse.

The company’s complex structure and aggressive approach reflects the determination of the man who built A.I.G., Maurice R. Greenberg, to create an global empire operating in complementary businesses. Not even the company’s annual reports to shareholders or its regulatory filings offer a chart of its complex corporate structure.

Though its name is American, the company is rooted in Asia. According to company lore, its founder, Cornelius Vander Starr, a World War I veteran, traveled to Asia with only 300 Japanese yen (less than $3 by today’s exchange rates) in his pocket and started the firm in Shanghai in 1919.
With a partner, he sold marine and fire insurance and expanded rapidly throughout the Philippines, Indonesia and China by hiring locals as agents and managers, a business strategy A.I.G. uses today. Nearly half of A.I.G.’s 116,000 direct employees — about 62,000 people — are in Asia.

In 1960, Mr. Greenberg joined the company, following his mentor, an executive at Continental Casualty Company in Chicago. Mr. Greenberg focused on making giant commercial deals, increasing its share of the life insurance business and writing what were, decades ago, unusual types of coverage, like insurance against kidnapping and protection from suits against a company’s officers and directors.

A.I.G.’s problems rest in the company’s London-based financial products unit, part of its financial services group, which is exposed to securities tied to the value of home loans — the same kind of securities that forced Lehman Brothers into Chapter 11 bankruptcy proceedings the day before A.I.G. was bailed out. The financial products group sold credit-default swaps, complex financial contracts allowing buyers to insure securities backed by mortgages. Many of the buyers were European banks. As home values have fallen, the value of the underlying mortgages has declined, and A.I.G. has had to reduce the value of the securities on its books.

The company’s distress came after an unusual period of turmoil at the company.Early in 2005, questions arose about financial transactions that had the effect of making the company’s earnings look better. Mr. Greenberg resigned as chief executive after regulators sent a wave of subpoenas to the company; eventually A.I.G. restated earnings covering a five-year period. His successor tried to restore confidence in the company but his efforts did not meet with investor approval and he was replaced after the company announced that it lost $7.8 billion in 2008’s first quarter. In August it announced that it had lost another $5.3 billion in the second quarter.

In September the main financial ratings agencies made clear that they would downgrade A.I.G. ratings if the company were not able to raise more capital to back its obligations. A frantic scramble for investors was unsuccessful, leading a reluctant Fed to conclude that a bailout was unavoidable.
Company Information
American International Group, Inc. (AIG) is a holding company which, through its subsidiaries, is engaged in a range of insurance and insurance-related activities in the United States and abroad. AIG’s primary activities include both General Insurance and Life Insurance & Retirement Services operations. Other significant activities include Financial Services and Asset Management. AIG’s major product and service groupings are General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. Through these operating segments, AIG provides insurance, financial and investment products and services to both businesses and individuals in more than 130 countries and jurisdictions. In September 2007, AIG announced that it has completed the merger of a wholly owned subsidiary of AIG with 21st Century Insurance Group (21st Century). Upon consummation of the merger, AIG acquired remaining 39.3% interest in 21st Century, which AIG did not previously own.
American International Group Inc.
70 Pine Street New York NY 10270
Phone: +1 (212) 770-7000
Fax: +1 (212) 943-1125

Stocks dropped sharply on Wall Street Wednesday morning, as an unprecedented $85 billion government bailout of the troubled insurer American International Group failed to placate investors’ fears.

In one of the most extraordinary weeks in financial history, investors and customers in Asia and Europe tried to understand the breadth of the government’s efforts to rescue the insurance company. In Asia, customers continued to line up at offices to cancel insurance policies or to get questions answered. On Wall Street, the Dow Jones industrials plummeted more than 200 points in the first minutes of trading. The Dow was down 338 points about noon, and the broader Standard & Poor’s 500-stock index lost about 3.6 percent.

Shares fought their way to a positive finish on Tuesday, but spent much of the day in negative territory. On Monday, the American stock market suffered its worst single session since the days after the 9/11 terrorist attacks.

Shares of A.I.G. shed another 44 percent even after the Federal Reserve and the Treasury Department decided to prop up the ailing insurer with an $85 billion loan. Shareholders in the company appeared to be worried that their value would be wiped out by the deal.

Federal officials took the extraordinary measures after fears arose that a collapse at A.I.G. could set off catastrophic consequences in the global financial system. Treasury prices fell as the rescue of A.I.G. raised concern that the government would have to issue more debt to shore up financial markets. And the cost of borrowing overnight dollars spiked in the interbank lending market in Europe.

European stocks, which had been up slightly before Wall Street opened, fell back. An early rally in Asia lost steam on concerns about the American financial system and China’s economy.

Investors may also have been worried by a government report on Wednesday morning that showed construction of new homes and apartments falling more than expected last month, reaching a 17-year low.

Housing construction declined 6.2 percent in August to a seasonally adjusted annual rate of 895,000 units, the slowest building pace since January 1991.

While the report underscored the troubles in the housing sector, it also suggested that supply for new homes would continue to drop, which should eventually help prop up home values in the long run.

Most financial stocks were down in early trading on Wednesday. Morgan Stanley shares lost more than 15 percent; Merrill Lynch was down nearly 10 percent.

Some stock analysts said that the volatility in the market — and the sheer unpredictability of the last week’s events — made explanations scarce.

“I think every day is sui generis now,” Douglas M. Peta, market strategist at J. & W. Seligman & Company, a brokerage firm. “Every 30-minute segment might be.”

The A.I.G. bailout came just two weeks after the Treasury took over the quasi-government mortgage finance companies Fannie Mae and Freddie Mac, and days after the collapse of Lehman Brothers and the sale of Merrill Lynch.

“The U.S. government money has helped sentiment a bit and there’s a perception that maybe letting Lehman Brothers go in the end was not such a major systemic risk,” said Robin Marshall, director of investment management at the financial services firm Smith & Williamson in London.

The A.I.G. rescue was the most radical intervention in private business in the central bank’s history. The Fed concluded that “a disorderly failure of A.I.G. could add to already significant levels of financial market fragility.”

European bourses fell sharply after markets opened in New York. The FTSE 100 index in London dropped 0.8 percent and the DAX in Frankfurt was off 0.9 percent. The benchmark index in Paris was also down 0.9 percent.

In Asia, trading was mixed. In Tokyo, the Nikkei share average closed ahead by 1.2 percent, at 11,749.79.

But the Hang Seng index in Hong Kong closed down 3.6 percent after jumping 1.7 percent at the open.

Financial shares led the declines. Hong Kong-listed shares of Industrial and Commercial Bank of China, the top mainland Chinese bank, fell nearly 10 percent and the market heavyweight HSBC dropped 2.7 percent.

The Chinese Enterprises index of mainland Chinese companies listed in Hong Kong was down 4.2 percent, tracking losses on the mainland, where the Shanghai composite index dropped 2.9 percent to a new 22-month closing low, led by bank shares. Mainland-listed shares of four banks, including Industrial and Commercial Bank of China, plunged to the 10 percent daily limits. On Tuesday, eight such shares dropped by the maximum percentage.

The Strait Times index in Singapore dipped 1.7 percent and the Australian S&P/ASX 200 index fell 0.6 percent.

teven M. Davidoff, writing as The Deal Professor, is a commentator for DealBook on the legal aspects of mergers, private equity and corporate governance. A former corporate attorney at Shearman & Sterling, he is a professor at the University of Connecticut School of Law. His columns are available at The Deal Professor blog.

Call it the Weekend That Changed Wall Street.

The upheaval of the past few days offers some lessons about the markets and how a financial crisis turns fatal. Here are a few that I’ve been thinking about.

Lesson 1: Perception Is Everything

In financial crises, your actual capital adequacy and liquidity does not matter. Both Lehman Brothers and Bear Stearns — and Lehman particularly — were felt to be adequately capitalized only days before their fall. But once people thought that the end was near, the trading stopped, liquidity dried up, and the capital fled.

Lesson 2: Uncertainty Is Death

Lehman’s unfortunate problem was that we have already gone through one round of capital market infusions. The infusions have left the investors, mostly sovereign wealth funds, deep under water. Now, with continuing uncertainty over the price of Lehman’s assets, no one wanted to get hit again and potentially be forced to invest even more months from now — or worse yet, lose more money. Had Lehman faced this problem earlier or later in the cycle, it might have avoided bankruptcy (though probably still lost its independence).

It is the old adage all over again: If you can’t price assets, you can’t buy them.

Lesson 3: Know When to Fold ‘Em

John Thain, the chief executive of Merrill Lynch, made the right move in selling his firm to Bank of America. He took a deal when it was on the table. A month from now, it might have been better, but the whispers were that Merrill would be next. And in a down market, whispers can kill.

Lesson 4: Sometimes, You Can Only Raise Capital When You Don’t Need It

Lehman issued $4 billion in preferred stock in April — the share offering was oversubscribed. Even then, though, people whispered that the capital raise was a sign of weakness, reflecting Lehman’s anemic balance sheet. This paradox helped bring about the death of both Bear and Lehman: They needed capital, but raising it only made people more concerned about their state.

It is a Catch-22 for which we have yet to find a solution. And that is why, even to the bitter end, Lehman didn’t access the Federal Reserve’s emergency loan facility. If it had, everyone would have assumed it was in trouble.

The whole conundrum supports raising the capital reserve levels for investment banks. Ultimately, Lehman, Bear, Merrill and their balance sheets couldn’t stand the predicament.

Lesson 5: But Be Careful When You Do Raise Capital

The clauses and terms you agree to can further inhibit financing. For example, Washington Mutual raised $7 billion from a consortium led by TPG. But there is an antidilution clause in that financing that resets the share price paid by TPG to any subsequent, lower share price paid in any further equity raised until October 2009.

This protects TPG from getting diluted out on its investment, but is now preventing WaMu from raising more equity unless TPG is included.

Lesson 6: Bankruptcy Is Not the End of The World (For Some)

In the end, Lehman only filed for Chapter 11 protection at the holding company level. The remaining companies below the holding company remain functioning. Some will be sold, some will be run off and Lehman may even try to emerge from bankruptcy. There’s only a slim chance of that, but substantial parts of Lehman will live on.

Lesson 7: The Sky Is Not Falling

Things are tough, but the economy is still in reasonable shape. All of these troubles at Lehman, Bear, A.I.G. and WaMu are attributable to the housing crisis. If we solve that, we will begin to emerge from the woods. While parts of the country are stabilizing, others appear caught in a declining feedback loop. It would help most if we found a floor on the housing decline. To the extent the government is the answer here, then this is where it should focus.

Lesson 8: Shorts Kill

Shorting is a necessary mechanic in our capital markets. But in financial crises, shorting, and the whispers it generates, can be deadly for financial stocks that exist on trust (see Lesson 1). In these times, we need limits on shorting of financial institutions.

I know the shorts will scream that this is a lynch mob, but it’s not. It is merely a confined and short-term limit on their activities over the next few months. In the interim, there will still be thousands of other shorting opportunities that the short-sellers of the world can use to feed their families.

Lesson 9: Moral Hazard Is an Overused Term

Don’t talk to me about moral hazard. The shareholders of Lehman had no more say in the operation of their company than in the case of Bear or Fannie Mae. If we are really going to stop moral hazard, we will meaningfully punish the people who took these positions and approved them (i.e., management). The step that the FHFA just, to block the exit packages of the chief executive officers of Fannie and Freddie Mac, was a good start.

Lesson 10: In Every Sad Moment, There Are Winners

Congratulations to Jon Marzulli at Shearman & Sterling for representing Merrill Lynch, as well as Robert D. Joffe at Cravath Swaine & Moore and Ed Herlihy at Wachtell Lipton Rosen & Katz who represented Bank of America. Weil Gotshal & Manges is representing Lehman.

These are nice, and well-deserved, assignments for them and the rest of the lawyers I missed giving a shout-out to. Get some sleep.

Lesson 11: Henry Paulson Runs the U.S. Economy

Not President George W. Bush, not Federal Reserve Chairman Ben Bernanke…

A note: For those who watch the Fed, it announced Sunday that it would take as collateral much riskier assets — including equities, junk bonds, subprime mortgage-backed securities and even whole mortgages — in exchange for emergency loans through the Primary Dealer Credit Facility.

In a day of big news, this is equally as big as the other events. Before, the Fed justified the facility by saying it would only take on safe assets. But now, the taxpayers are really going to be guaranteeing the balance sheets (and investments) of the financial.

In the end, I’m a bit sad today. Both Merrill and Lehman were great institutions and will be missed. I wish my friends there the best…

TOKYO - Asian stock markets plummeted Tuesday as the collapse of Lehman Brothers and takeover of Merrill Lynch spurred fears of an imminent global financial crisis.

European markets extended losses in early trading after falling sharply Monday.

Tokyo’s Nikkei 225 index sank nearly 5 percent to 11,609.72, its lowest close since July 2005, while Hong Kong’s blue-chip Hang Seng Index shed 5.4 percent to its lowest point in nearly two years. Both markets — Asia’s two biggest — had been closed for holidays on Monday, when news first broke about the turmoil on Wall Street that has dramatically changed its landscape.

“Today was a bloodbath,” said Alex Tang, head of research at Core Pacific-Yamaichi, who noted that trading volume was its highest in months. “This was panic selling … They are dumping shares, they just want to liquidate their positions.”

South Korea’s main index slumped 6.1 percent, Taiwan’s benchmark was off 4.9 percent, and China’s Shanghai index dropped 4.5 percent to a nearly two-year low. But markets in India and Indonesia managed to eke out gains.

To ensure liquidity, Japan’s central bank on Tuesday injected of 2.5 trillion yen (US$24 billion) into money markets and issued a statement vowing to take measures to maintain stability in the country’s financial markets.

The dollar also took a hard hit, sinking to 103.83 yen Tuesday afternoon in Asia from mid-107 yen levels before the weekend.

In Europe, Britain’s FTSE 100 was down 1.5 percent in morning trading and France’s CAC-40 slid 1.4 percent.

The Japanese unit of Lehman Brothers Holdings Inc. on Tuesday sought bankruptcy protection at a Tokyo court after the 158-year-old firm filed for Chapter 11 bankruptcy in New York the previous day.

Desapite a flurry of last-minute negoatiations over the weekend, the storied New York investment bank was unable to find an investment parter to throw it a lifeline amid US$60 billion in soured real-estate holdings.

Investors were further shaken by equally stunning news that Merrill Lynch, one of the world’s most famous brokerages, sought to avoid a similar fate with a $50 billion transaction to become part of Bank of America Corp.

Indeed, the crisis appeared to be far from over. American Insurance Group, the world’s largest insurer, was fighting for its survival after downgrades from major credit rating firms, adding pressure as AIG seeks billions of dollars to strengthen its balance sheet.

On Wall Street Monday, the Dow Jones industrial average fell more than 500 points, or 4.4 percent, to 10,917.51 — its worst point drop since after the September 11, 2001, terror attacks.

U.S. stock futures were down modestly, suggesting Wall Street could fall further Tuesday.

The Tokyo Stock Exchange halted securities and derivatives trading by Lehman Brothers a day after Japan’s financial watchdog ordered its local unit to suspend operations.

Regulators in Hong Kong also announced they were restricting Lehman’s trading activities, allowing the firm to deliver securities to clients for any trades in the last two days and to settle any outstanding futures positions with clients by day’s end.

South Korea’s financial regulator suspended some operations of two local units of Lehman Brothers.

Financial issues faced intense selling pressure across Asia in the wake of Lehman’s demis.

In Tokyo, investors unloaded shares in institutions named as some of Lehman’s biggest lenders, including Aozora Bank Ltd., Mizuho Corporate Bank Ltd., Shinsei Bank Ltd. and Mitsubishi UFJ Financial Group, Inc.

Aozora, a midsize Tokyo-based bank, lost 15.8 percent to 171 yen, even as the company in a statement sought to reassure markets that its net exposure could be reduced to less than US$25 million compared with an initially reported figure of US$463 million.

Mizuho Financial Group, Inc., the parent company of Mizuho Corporate Bank, retreated 10.7 percent to 418,000 yen.

Shinsei lost 16 percent to 314 yen, and Mitsubishi UFJ Financial Group tumbled 7.7 percent to 792 yen.

In China, the overnight debacle on Wall Street outweighed any positive impact from a decision by China’s central bank late Monday to cut a key lending rate.

“Almost all the banking shares dropped by nearly 10 percent today because investors don’t think the interest rate cut will really boost the market,” said Wang Xiaodong, deputy manager of United Securities in Beijing.

Industrial & Commercial Bank of China, the country’s biggest lender, fell by the daily 10 percent limit to 3.80 yuan, while Bank of China dropped 9.2 percent to 3.17 yuan.

Australia’s banks, including Commonwealth Bank of Australia, ANZ Banking Group and National Australia Bank Ltd., were also hit hard.

In Seoul, top lender Kookmin Bank shares slid 8 percent. Hong Kong’s HSBC weakened 3.4 percent, while China Construction Bank tanked 8.2 percent to HK$5.15.

Hong Kong government officials said they were keeping a close eye on the markets.

“We know Hong Kong has a good monitoring system in place. I believe all monitoring agencies will make sure trading is conducted smoothly today,” said Chan Ka-keung, secretary for financial services and treasury.

A wilting dollar compounded the heavy sell-off, dragging down major exporters like Toyota Motor Corp., which declined 3.8 percent and home appliance producer Matsushita Electric Industrial Co., which fell 6.18 percent.

___

Associated Press writers Kelly Olsen in Seoul, South Korea, Ray Lilley in Wellington, New Zealand, Rohan Sullivan in Sydney, Australia, Mari Yamaguchi in Tokyo, Jeremiah Marquez in Hong Kong and Elaine Kurtenbach in Shanghai contributed to this report.

http://www.andriewongso.com/awartikel-797-Success_Story-Warren_Buffet

http://profiles.friendster.com/rudyantoatdeacons.com

http://balitourismdevelopment.blogspot.com/

Warren Buffett

From Wikipedia, the free encyclopedia

Warren Buffett
(2005)
Born	August 30, 1930 (1930-08-30) (age 78) Omaha, Nebraska, United States
Occupation	Chairman & CEO, Berkshire Hathaway
Salary	US$100,000
Net worth	US $62 billion (2008)[1]
Spouse(s)	Susan Buffett (1952–2004), Astrid Menks (2006-)[2]
Children	Susie Buffett, Howard Graham Buffett, Peter Buffett
Website www.berkshirehathaway.com

Warren Edward Buffett (born August 30, 1930, in Omaha, Nebraska) is an American investor, businessman and philanthropist. He is regarded as one of the world’s greatest investors and is the largest shareholder and CEO of Berkshire Hathaway.[3] With an estimated net worth of around US$62 billion,[4] he was ranked by Forbes as the richest person in the world as of February 11, 2008.[5]

Often called the “Oracle of Omaha,”[6] Buffett is noted for his adherence to the value investing philosophy and for his personal frugality despite his immense wealth.[7] His 2006 annual salary was about $100,000, which is small compared to senior executive remuneration in other comparable companies.[8] When he spent $9.7 million of Berkshire’s funds on a business jet in 1989, he jokingly named it “The Indefensible” because of his past criticisms of such purchases by other CEOs.[9] He lives in the same house in the central Dundee neighborhood of Omaha that he bought in 1958 for $31,500, today valued at around $700,000.[10]

Buffett is also a noted philanthropist. In 2006, he announced a plan to give away his fortune to charity, with 83% of it going to the Bill & Melinda Gates Foundation.[11] In 2007, he was listed among Time’s 100 Most Influential People in The World.[12] He also serves as a member of the board of trustees at Grinnell College.[13]

[edit] Early life and Benjamin Graham

Warren Buffett was born in Omaha, Nebraska on August 30, of 1930 from Howard and Leila (Stahl). As the son of a local stock broker, it is likely that he was exposed to markets at a young age. One of his influential mentors was Benjamin Graham. Graham’s philosophy had such an impact on Buffett that he enrolled in Columbia Business School to study directly under him. In Buffett’s own words: “I’m 15 percent Fisher and 85 percent Benjamin Graham.”[14] As Buffett would often say about Graham’s teachings: “The basic ideas of investing are to look at stocks as business, use the market’s fluctuations to your advantage, and seek a margin of safety. That’s what Ben Graham taught us. A hundred years from now they will still be the cornerstones of investing.”[15]

Public stances

This section may require restructuring to meet Wikipedia’s quality standards. Please discuss this issue on the talk page. (August 2008)

Buffett:

• repeatedly criticized the financial industry for what he considers to be a proliferation of advisers who add no value but are compensated based on the volume of business transactions which they facilitate. He has pointed to the growing volume of stock trades as evidence that an ever-greater proportion of investors’ gains are going to brokers and other middlemen.

• emphasized the non-productive aspect of gold in 1998 at Harvard: “It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” In 1977 Buffett was also quoted as saying about stocks, gold, farmland and inflation: “stocks are probably still the best of all the poor alternatives in an era of inflation - at least they are if you buy in at appropriate prices.”[16]

• stated that he only paid 19% of his income for 2006 ($48.1 million) in total federal taxes, while his employees paid 33% of theirs despite making much less money.[17]

• believes that the U.S. dollar will lose value in the long run. He views the United States’ expanding trade deficit as an alarming trend that will devalue the U.S. dollar and U.S. assets. As a result it is putting a larger portion of ownership of U.S. assets in the hands of foreigners. This induced Buffett to enter the foreign currency market for the first time in 2002. However, he substantially reduced his stake in 2005 as changing interest rates increased the costs of holding currency contracts. Buffett continues to be bearish on the dollar, and says he is looking to make acquisitions of companies which derive a substantial portion of their revenues from outside the United States. Buffett invested in PetroChina Company Limited and in a rare move, posted a commentary[18] on Berkshire Hathaway’s website why he would not divest from the company despite calls from some activists to do so. (He did, however, sell this stake, apparently for purely financial reasons.)

• believes that the world is nearing its maximum capacity of oil production, and that gradually depleted oil fields could reduce the amount produced.[19]

• believes government should not be in the business of gambling. He believes it is a tax on ignorance.[20]

Buffett’s speeches are known for mixing business discussions with humor. Each year, Buffett presides over Berkshire Hathaway’s annual shareholders’ meeting in the Qwest Center in Omaha, Nebraska, an event drawing over 20,000 visitors from both United States and abroad, giving it the nickname “Woodstock of Capitalism”.[21]

Berkshire’s annual reports and letters to shareholders, prepared by Buffett, frequently receive coverage by the financial media. Buffett’s writings are known for containing literary quotes ranging from the Bible to Mae West,[22] as well as Midwestern advice and numerous jokes. Various websites extol Buffett’s virtues while others decry Buffett’s business models or dismiss his investment advice and decisions.

Buffett also:

• favors the inheritance tax, saying that repealing it would be like “choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics“.[23] In 2007, Buffett testified before the Senate and urged them to preserve the estate tax so as to avoid a plutocracy. Some critics, including John Berlau writing in the August 23, 2004 issue of the National Review, have pointed out that Buffett (through Berkshire-Hathaway) has a commercial interest in the continuation of the estate tax, since it has benefited from the estate tax in past business dealings and is also involved in developing and marketing insurance policies which protect policy holders against future estate tax payments.[24]

• has been recognized as most responsible[citation needed] for FASB 123 (r), or Stock Option Expensing on the GAAP Income Statement. When asked about the subject at Berkshire Hathaway’s 2004 annual meeting, he compared the United States Congress and the Securities and Exchange Commission’s decision to override FASB, who wanted to consider company-issued stock-option compensation as an expense, to a bill proposed in the Indiana house for Pi to be changed from its real value of about 3.14159 to 4.

• has called the 2007—present downturn in the financial sector “poetic justice“.[25]

• was inducted into the Junior Achievement U.S. Business Hall of Fame in 1997.

Historical timeline

Education: Woodrow Wilson High School, Washington, D.C. in 1947[26] The Wharton School, University of Pennsylvania, 1947–1949 B.S. University of Nebraska, 1950 M.S. in Economics, Columbia University, in 1951. Employment: 1951–1954 Buffett-Falk & Co., Omaha - Investment Salesman 1954–1956 Graham-Newman Corp., New York - Securities Analyst 1956–1969 Buffett Partnership, Ltd., Omaha - General Partner 1970–Present Berkshire Hathaway Inc, Omaha - Chairman, CEO

1943: (13 years old)

• Buffett filed his first income tax return, deducting his bicycle as a work expense for $35.[27]

1945: (15 years old)

• In his senior year of high school, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in a barber shop. Within months, they owned three machines in different locations.

1949: (19 years old)

• In 1949, he was initiated into Alpha Sigma Phi Fraternity while an undergraduate at the Wharton School at the University of Pennsylvania. His father and uncles were also Alpha Sigma Phi brothers from the chapter at Nebraska, where Warren eventually transferred.

1950: (20 years old)

• Buffett applied for admission to Harvard Business School but was turned down.[28]

• Buffett enrolled at Columbia Business School after learning that Benjamin Graham and David Dodd, two well-known securities analysts, taught there.

1951: (21 years old)

• Buffett discovered Graham was on the Board of GEICO insurance at the time. After taking a train to Washington, D.C. on a Saturday, Buffett knocked on the door of GEICO’s headquarters until a janitor allowed him in. There, he met Lorimer Davidson, the Vice President, who was to become a lasting influence on him and life-long friend.[29] They talked for four hours about the insurance business. Davidson recalled that he found Buffett to be an “extraordinary man” after fifteen minutes.

• Buffett graduated from Columbia and wanted to work on Wall Street. Both his father and Ben Graham urged him not to. Buffett offered to work for Graham for free but Graham refused.[28] He purchased a Sinclair Texaco gas station as a side investment, but that venture did not work out as well as he had hoped. Meanwhile, he worked as a stockbroker. During that time, Buffett also took a Dale Carnegie public speaking course. Using what he learned, he felt confident enough to teach a night class at the University of Nebraska, “Investment Principles.” The average age of the students he taught was more than twice his own.

1952: (22 years old)

• Buffett married Susan Thompson.

1953: (23 years old)

• Susan had her first child, Susan Alice Buffett

1954: (24 years old)

• Benjamin Graham offered Buffett a job at his partnership with a starting salary of $12,000 a year. Here, he worked closely with Walter Schloss.

• Graham, who was a tough man to work for, was adamant that a stock provide a wide margin of safety after weighting the trade-off between its price and intrinsic value. Graham’s demand that a stock be worth more than its price made sense to Buffett, but it also made him question whether the criteria were too stringent, causing them to miss out on some big winners that had more qualitative values.[28]

• Susan had her second child, Howard Graham Buffett.

1956: (26 years old)

• Benjamin Graham retired and folded up his partnership.

• Buffett’s personal savings are now over $140,000.

• Buffett returned home to Omaha and created Buffett Partnership Ltd., an investment partnership.

“	I’ll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It’s addictive. And there’s fantastic brand loyalty.	”
—Warren Buffet[30][31], 1987

1957: (27 years old)

• Buffett had three partnerships operating the entire year.

• Buffett purchased a five-bedroom, stucco house on Farnam Street for $31,500.

1958: (28 years old)

• Susan had her third child, Peter Andrew Buffett

• Buffett had five partnerships operating the entire year.

1959: (29 years old)

• Buffett had six partnerships operating the entire year.

• Buffett was introduced to Charlie Munger.

1960: (30 years old)

• Buffett had seven partnerships operating the entire year.

• The partnerships were: Buffett Associates, Buffett Fund, Dacee, Emdee, Glenoff, Mo-Buff, and Underwood.

• Buffett asks one of his partners, a doctor, to find ten other doctors who will be willing to invest $10,000 each into his partnership. Eventually, eleven doctors agreed to invest.

1961: (31 years old)

• Buffett revealed that Sanborn Map Company accounted for 35% of the partnerships’ assets.

• Buffett explained that in 1958, Sanborn sold at $45 per share when the value of the Sanborn investment portfolio was $65 per share. This meant buyers valued Sanborn at “minus $20″ per share, and buyers were unwilling to pay more than 70 cents on the dollar for an investment portfolio with a map business thrown in for nothing.

• Buffett reveals that he earned a spot on the board of Sanborn.

1962: (32 years old)

• Buffett becomes a millionaire because Buffett’s partnerships, in January 1962, had in excess of $7,178,500 of which over $1,025,000 belonged to Buffett.

• Buffett merges all partnerships into one partnership.

• Buffett discovered a textile manufacturing firm, Berkshire Hathaway. Buffett’s partnerships began purchasing shares at $7.60 per share.

1965: (35 years old)

• When Buffett’s partnerships began aggressively purchasing Berkshire they paid $14.86 per share while the company had working capital (current assets minus current liabilities) of $19 per share, this did not include the value of fixed assets (factory and equipment).

• Buffett took control of Berkshire Hathaway at the board meeting and named a new President, Ken Chace, to run the company.

1966: (36 years old)

• Buffett closes the partnership to new money.

• Buffett wrote in his letter “unless it appears that circumstances have changed (under some conditions added capital would improve results) or unless new partners can bring some asset to the partnership other than simply capital, I intend to admit no additional partners to BPL.”

• In a second letter, Buffett announced his first investment in a private business — Hochschild, Kohn and Co, a privately owned Baltimore department store.

1967: (37 years old)

• Berkshire paid out its first and only dividend of 10 cents.

1969: (39 years old)

• Following his most successful year, Buffett liquidated the partnership and transferred their assets to his partners. Among the assets paid out were shares of Berkshire Hathaway.

1970: (40 years old)

• As chairman of Berkshire Hathaway, began writing his now-famous annual letters to shareholders.

1973: (43 years old)

• Berkshire began to acquire stock in the Washington Post Company. Buffett became close friends with Katharine Graham, who controlled the company and its flagship newspaper, and became a member of its board of directors.

1974: (44 years old)

• The SEC opens a formal investigation into Warren Buffett and one of Berkshire’s mergers. The reason was possible conflict of interest. Nothing ever came of it.

1977: (47 years old)

• Berkshire indirectly purchases the Buffalo Evening News for $32.5 million. Antitrust charges started.

1979: (49 years old)

• Berkshire began to acquire stock in ABC. With the stock trading at $290 per share, Buffett’s net worth neared $140 million. However, he lived solely on his salary of $50,000 per year.

• Berkshire began the year trading at $775 per share, and ended at $1,310. Buffett’s net worth reached $620 million, placing him on the Forbes 400 for the first time.

1988: (58 years old)

• Buffett began buying stock in Coca-Cola Company, eventually purchasing up to 7 percent of the company for $1.02 billion. It would turn out to be one of Berkshire’s most lucrative investments, and one which he still holds.

1990: (60 years old)

• Scandals involving Greenberg and Gutfreund appear.

1999: (69 years old)

• Buffett is named the top money manager of the 20th century in a survey by the Carson Group, ahead of Peter Lynch and John Templeton.[32]

2002: (72 years old)

• Buffett entered in $11 billion worth of forward contracts to deliver US dollars against other currencies. By April 2006, his total gain on these contracts was over $2 billion.

2004: (73 years old)

• His wife, Susan, passes away.

2006: (75 years old)

• Buffett announced in June that he would gradually give away 85% of his Berkshire holdings to five foundations in annual gifts of stock, starting in July 2006. The largest contribution will go to the Bill and Melinda Gates Foundation.[33]

2007: (76 Years old)

• In a letter to shareholders, Buffett announced that he was looking for a younger successor or perhaps successors to run his investment business.[34] Buffett had previously selected Lou Simpson, who runs investments at Geico, to fill that role. However, Simpson is only six years younger than Buffett.

2008: (77 Years old)

• Buffett becomes the richest man in the world according to Forbes,[35] dethroning Bill Gates, who held the title for thirteen years straight.

Personal life

Mr. Buffett married Susan Thompson in 1952. They had three children, Susie, Howard, and Peter. The couple began living separately in 1977, though they remained married until her death in July 2004. His daughter Susie lives in Omaha and does charitable work through the Susan A. Buffett Foundation and is a national board member of Girls, Inc.

In 2006, on his 76th birthday, he married his never-before-married longtime-companion, Astrid Menks, who was age 60 and had lived with him since his wife’s departure in 1977 to San Francisco.[36] Interestingly, it was Susan Buffett who arranged for the two to meet before she left Omaha to pursue her singing career. All three were close, and holiday cards to friends were signed “Warren, Susie and Astrid”[37]. Susan Buffett briefly discussed this relationship in an interview on the Charlie Rose Show shortly before her death, in a rare glimpse into Buffett’s personal life.[38]

Mr. Buffett and Ms. Menks formalized a relationship of more than 20 years in a brief civil ceremony at his daughter’s house in Omaha Wednesday afternoon.

The new Mrs. Buffett, 60, has been the constant companion to the 76-year-old financier, even as he remained married to his first wife, Susan T. Buffett, who died in 2004.

The first Mrs. Buffett, who had lived apart from her husband since the late 1970’s, knew and approved of the relationship with Ms. Menks.

“She has been with my father all these years for all the right reasons,” Mr. Buffett’s daughter, Susie Buffett, said in a telephone interview. “I’m so thankful. She loves him and takes care of him. If Warren didn’t have a cent, she’d be with him.”

Investors who thought Berkshire Hathaway shares might have been affected by Mr. Buffett’s domestic bliss saw hardly a blip in the price yesterday — up $296, or 0.3 percent, to close at $96,097.

The marriage is the second time this year that Mr. Buffett has made headlines. In June, he agreed to donate the vast bulk of his $40 billion personal fortune to foundations run by Bill and Melinda Gates, his children and one named for his late wife. Mr. Buffett said when announcing those plans that his health was excellent.

When together and out socially, Mr. Buffett, the older, wise-cracking businessman, seems proud to be with the former Ms. Menks, who is known for putting others at ease.

Mr. Buffett declined to comment, his assistant, Debbie Bosanek, said. Susie Buffett said her new stepmother also preferred not to comment. The wedding was reported yesterday in The Omaha World-Herald.

In many ways, Mr. Buffett has portrayed himself as the business world’s guardian of homespun values — decrying fat paychecks for executives, shunning technology stocks because he didn’t personally understand the businesses, and criticizing tax policies that encourage trading of stocks rather than the patient buy-and-hold approach he favors.

In his personal life, however, Mr. Buffett has been less conventional. His first wife, Susan, left the family home in Omaha in the late 1970’s, after raising the couple’s three children, and moved to San Francisco.

And she introduced a friend, Ms. Menks, to her husband and encouraged Ms. Menks to take care of Mr. Buffett.

The two women had become friends at an Omaha restaurant where Susan Buffett sang and Astrid Menks seated patrons.

“Unconventional is not a bad thing,” Susie Buffett said. “More people should have unconventional marriages.” She said her mother, who was also known as Susie, wanted to be known for who she was, especially as her father’s wealth and fame grew.

“She basically wanted a room of her own. They were very connected in a very deep way,” speaking frequently on the telephone and traveling together, Susie Buffett said. “They didn’t need to be in the same room.”

“Astrid and my mother were very close — really loved each other,” Susie Buffett said.

In an interview with Charlie Rose shortly before her death, the first Mrs. Buffett said of Ms. Menks’s relationship with her husband: “She takes great care of him, and he appreciates it and I appreciate it. She’s a wonderful person.”

Mr. Buffett and his new wife are both known for their frugality. He hunts for bargain stocks and lives simply for a man of his wealth. She often shopped in thrift stores for clothing, assembling fashionable outfits.

“They had a relationship that was so unusual, so fine, and so sophisticated — all three of those people,” said Cedric Hartman, an Omaha furniture maker and friend to the Buffetts for many years.

“We all got to know Astrid about the same time,” Mr. Hartman said. An immigrant from Latvia, “she appeared in town and you couldn’t miss her. She was smart, good-looking and had personal style — she would have been a standout anywhere.”

After she and Mr. Buffett became a couple, friends often received cards signed, “Warren, Susie and Astrid,” according to “Buffett: The Making of an American Capitalist” (Random House, 1995), a biography by Roger Lowenstein.

After his first wife’s death, Mr. Buffett changed his plans for his fortune. Initially, the bulk was to go to the foundation named for his late wife, which supports birth control efforts internationally. But watching the work of the Bill and Melinda Gates Foundation, he became convinced it could make better use of the bulk of his fortune.

He also began to think about marrying Ms. Menks, his daughter said. “He’s been talking about this for a while. It’s something he wanted to do.”

Last Saturday, Mr. Buffett and his daughter went to Borsheim’s Fine Jewelry in Omaha, which is owned by his conglomerate, Berkshire Hathaway, to pick out a ring.

Did Mr. Buffett get the employee discount? “I’m sure he did,” Susie Buffett said.

The bride didn’t see the ring until Wednesday afternoon’s ceremony. “It’s lovely,” Ms. Buffett said. “I think she’s thrilled with it.”

A local judge performed the 15-minute ceremony. The only witness besides Susie Buffett was the bride’s sister; Mr. Buffett’s two sons were out of the country. Afterward, Mr. and Mrs. Buffett, ever thrifty, took them to dinner at Bonefish Grill, a casual seafood restaurant.

He remains an avid player of the card game bridge, and has said that he spends 12 hours a week playing the game.[39] He often plays with Bill Gates and Paul Allen.

In 2006, he sponsored a bridge match for the Buffett Cup. In this event, modeled on the Ryder Cup in golf (and held immediately before it and in the same city), a team of twelve bridge players from the United States took on twelve Europeans.

In 2006, he auctioned his 2001 Lincoln Town Car[40] on eBay to raise money for Girls Inc.[41]

Warren Buffett is currently working with Christopher Webber on an animated series with DiC Entertainment chief Andy Heyward. According to information presented by Buffett at the Berkshire Hathaway annual meeting on May 6, 2006, the series will feature Buffett and Munger in roles and the series will teach children healthy financial habits for life. Cartoon drawings of Buffett and Munger were displayed throughout the events during the weekend and the special movie before the meeting began was in animation form by Heyward.

In December 2006 it was reported that Mr. Buffett does not carry a cell phone, does not have a computer at his desk, and drives his own car,[42] a Cadillac DTS.[43]

Buffett’s DNA report revealed that his paternal ancestors hail from northern Scandinavia, while his mother’s side most likely has roots in Iberia or Estonia.[44]

Philosophy

On Wealth

From a NY Times article: “I don’t believe in dynastic wealth,” [Warren Buffett] said, calling those who grow up in wealthy circumstances “members of the lucky sperm club.” Source: Greg Mankiw’s Blog, On Lucky Sperm, July 01, 2006

Buffett has written several times that his belief that in a market economy the rich earn outsized rewards for their talents. The following is taken from one of Buffett’s articles: “A market economy creates some lopsided payoffs to participants. The right endowment of vocal chords, anatomical structure, physical strength, or mental powers can produce enormous piles of claim checks (stocks, bonds, and other forms of capital) on future national output. Proper selection of ancestors similarly can result in lifetime supplies of such tickets upon birth. If zero real investment returns diverted a

Reuters
Authorized Warren Buffett biography due Sept. 29
08.11.08, 1:36 PM ET

United States - NEW YORK (Reuters) - The long-awaited authorized biography of billionaire investor Warren Buffett, the first written with his cooperation, is scheduled for release on September 29, the publisher said Monday.The 976-page book is being written by former Morgan Stanley (nyse: MS - news - people ) insurance analyst Alice Schroeder, and is titled “The Snowball: Warren Buffett and the Business of Life,” publisher Bantam Dell (nasdaq: DELL - news - people ) Publishing Group said.

Schroeder first met Buffett while working as an analyst, and covered Buffett’s insurance and investment company, Berkshire Hathaway Inc. (nyse: BRK - news - people )

According to the publisher, Schroeder has spent “thousands of hours” with Buffett, talking about his life and career, and winning broad access to his files and friends.

The book had been scheduled for a May release in conjunction with Berkshire’s annual shareholder meeting, but was delayed.

Its title comes from a reported comment by Buffett: “Life is like a snowball. The really important thing is finding wet snow and a really long hill.”

Schroeder’s book earlier had the title “The Snowball: How Warren Buffett Collected Friends, Wisdom and Wealth.”

Buffett has transformed Omaha, Nebraska-based Berkshire since 1965 into a roughly $179 billion conglomerate with at least 76 companies selling such things as car insurance, ice cream, paint and underwear, and investing in stocks.

Forbes magazine in March called Buffett the world’s richest person, worth about $62 billion. Buffett is giving away most of his wealth to the Bill & Melinda Gates Foundation and four family charities.

Bantam Dell, a division of Bertelsmann AG unit Random House Inc, said the biography’s cover price is $35, a tiny fraction of the cost of buying one Berkshire share. In afternoon trading, Berkshire’s Class A shares were up $2,350 at $118,100, while its Class B shares were up $87 at $3,935. (Reporting by Jonathan Stempel, editing by Gerald E. McCormick)