Bucks Blog: The Over-The-Wall Portfolio for Excess Cash

Carl Richards is a financial planner in Park City, Utah, and is the director of investor education at the BAM Alliance. His book, “The Behavior Gap,” was published this year. His sketches are archived on the Bucks blog.

If you’re an entrepreneur, you’ll spend years pouring everything — time, money, passion — into your businesses with the hope that someday it will pay off. If things go well, you’ll wake up one morning and find yourself with excess time, energy and, of course, cash.

Great! But now you have to figure out what do with that cash, and this is when things can get dangerous, fast.

Most entrepreneurs get twitchy at the thought of idle money. They’re used to taking big chances and are comfortable with risk. So, there’s a temptation to assume the same approach to controlled risk when investing outside their business.

One of the smartest guys I know runs an incredibly successful company but provided a textbook example of this approach. As the business matured and started throwing off excess cash, he began thinking about what to do with it. He invested in some pretty strange ventures. He backed a doctor with a new toothbrush design, a car wash and a company that made kayak paddles.

He knew nothing about any of these businesses. Not surprisingly, he lost that money.

Instead of sticking to what he knew to make money and protecting the profits, he made the classic mistake of thinking he could do more. He took risks with money that he promised himself he would never lose.

It’s like what Warren E. Buffett said about the super-smart and incredibly wealthy founders of Long-Term Capital Management, who ended up doing something really dumb: “To make money they didn’t need, they risked what they did have and did need, and that’s foolish.”

Don’t be foolish. If you’re fortunate to have enough money to last for a good long while, the game can, and should, change. Of course you can still focus on growing your business. Or, if you’re a serial entrepreneur, you can build the next one. But at the same time, you can start building a portfolio to protect your future.

One thing I have heard over and over when interviewing successful entrepreneurs is the idea of what I call the Over-the-Wall Portfolio. Of course, the entrepreneurs didn’t call it that. They often referred to it as the safe money or the money they promised their spouse they’d never lose.

Whatever you call it, the concept is pretty simple: You take the excess cash your business generates, or the lump sum from the sale of a business, and throw it over the wall into stable (and probably boring) investments.

Then you forget about it.

The allocation of an Over-the-Wall Portfolio will vary, but here are a few general guidelines to consider:

• Boring. Remember: excitement comes from being an entrepreneur (or the movies), not your over-the-wall money.
• Liquid. If something goes wrong, you want to be able to get to the money.
• Diversified. You can get rich by putting all your eggs in one basket, but you stay wealthy by being diversified.
• Passive. The Over-the-Wall Portfolio can’t depend on you for day-to-day management. You’re too busy with your business and having a life. The last thing you should be doing at night is logging into your day-trading account.

The best part of this strategy? It lets you get back to doing what you do best — running your business. But you get the added comfort of knowing that if your business fails, you’ll be O.K.

Eventually, my entrepreneur friend recognized his problem. One day, he told me, “Carl, I finally figured it out. My job is to stay focused on my business and make money. And with the money I make, I have to be sure I never lose any of it.”

I couldn’t have said it better myself.

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The New Old Age Blog: In the Middle: Why Elderly Couples Fight

George and Gracie (let’s call them that because using their real names would make them even unhappier than they already appear to be) are in their 80s and have been married for more than 65 years. Until recently they seemed to ride the waves that are inevitable in any marriage that spans nearly seven decades; through good and bad, they were partners and best friends.

But lately — ever since her hospitalization and his fall — they have been arguing more bitterly than usual (“Do you have to make such a mess in the kitchen?”), criticizing each other (“Why haven’t you dealt with the insurance company yet?”), withdrawing from each other, and generally making each other more miserable, more often than ever before.

This kind of degenerative relationship is not uncommon among the elderly in even the happiest marriages, marriage therapists and geriatricians said. But that is small comfort to either the couple in the middle of the maelstrom, or the children who care for them, as evidenced by a number of postings on caregiver blogs. As some of the children have wondered there: “Why can’t we all just get along?”

Therapists and others who work with the elderly said the first step to addressing the problem is understanding where it came from.

“A key question is whether the marital bickering is part of a lifelong marital style or a change,” said Dr. Linda Waite, director of the Center on Demography and Economics of Aging at NORC/University of Chicago. Is it new behavior – or just new to the grown children who are suddenly so deeply enmeshed in their parents’ lives that they are only now noticing that something is amiss?

How much of the problem is really just the marriage style? “Some couples like to fight and argue – it keeps their adrenaline going,” said Dr. Nancy K. Schlossberg, professor emerita of counseling psychology at the University of Maryland and author of “Overwhelmed: Coping With Life’s Ups and Downs.”

Sometimes the best judges of whether there is a problem are outsiders, said Dr. William Dale, chief of geriatrics at the University of Chicago Geriatrics Medicine. Pay attention if someone says, “‘Gee, Mom seems more argumentative or withdrawn than the last time I saw her,’” Dr. Dale advised.

If the tone or severity of the marital tensions seem new, then it is important to find out why. The causes could be mental or physical, doctors say.

On the mental front, increased anger and fighting could be one of the first signs of mild cognitive impairment, a precursor of dementia or Alzheimer’s, in one or both of the spouses, said Dr. Lisa Gwyther, director of the Duke Center for Aging Family Support Program and an associate professor in the department of psychiatry and behavioral sciences.

Dr. Dale concurs: “There is good evidence that the earliest signs of cognitive impairment are often emotional changes” — anger, anxiety, depression — “rather than cognitive ones” — memory, abstract thought.

But these early signs of cognitive decline can be so subtle that neither the spouses themselves, or their grown children, recognize them for what they are, Dr. Gwyther said. So husband and wife blame each other for the changes and allow feelings of hurt and resentment to grow.

Withdrawing from activities that used to give them pleasure can be a telltale sign of mild cognitive impairment – and can trigger anger and arguments.

“In one couple, the husband just didn’t want to participate in the holidays — the wife got angry and said he was being lazy and stubborn,” said Dr. Gwyther. But the truth was that his cognitive decline made all the activity overwhelming, and he didn’t want anyone to know that he was anxious about not remembering everyone’s names and embarrassing himself.

Suspicion and paranoia can also accompany mild cognitive decline and precipitate distrust and hurtful accusations. Dr. Gwyther recalled another woman who “called her daughter frantic because she said her husband dropped her at her chemo appointment, went to park the car, and didn’t return to get her.” The woman couldn’t imagine that her husband could possibly have lost his sense of time and direction, Dr. Gwyther added. She took it personally, complaining to her daughter that “your father doesn’t seem to care any more.”

Dr. Dale told of a spouse who accused her mate of infidelity because “she was convinced that when he was out grocery shopping he was really having an affair.”

Hoarding, an early symptom of mild cognitive impairment, can also create tension in a marriage. (For new treatments, see this recent post by my colleague Paula Span.)

When one couple came to a counseling session with Dr. Norman Abeles, emeritus professor of psychology and former director of psychological clinic at Michigan State University, the hoarding spouse finally said she did it because she thought that they would run out of money, “even though there was enough money to go around.” Dr. Abeles said that incident led to her diagnosis of mild cognitive impairment.

Adding to the confusion, mild cognitive impairment, or M.C.I., comes and goes. “There are good days and bad days, good hours and bad hours,” said Dr. Gwyther. “Alzheimer’s and dementia don’t start on Tuesday — it’s a slow insidious onset.” But the diagnosis is becoming more common: The Institute for Dementia Research and Prevention predicts that 1 in 6 women, and 1 in 10 men, who live past the age of 55 will develop dementia in their lifetime.

“Spouses find it difficult to know when their partner with M.C.I. is acting differently, usually badly, due to the advancing illness or due to ‘willful’ personality issues,” said Dr. Dale, citing a 2007 study in the journal Family Relations exploring the problems this can create for couples.

Blaming is often easier than understanding. Another of Dr. Gwyther’s patients was furious at her husband for not filing their taxes. “He’s a C.P.A.,” she said. “How could we owe back taxes?” It did not occur to her that he might be unable to handle that task — and was too frightened about his deteriorating mental focus to let her know.

But as harmful as mental decline can be for a marriage, it is just part of the equation. Physical ailments – even those that seem completely unrelated to marital relations – “can upset the equilibrium of the marriage,” according to a study in The Canadian Medical Association Journal.

“Most men get angry at what’s happened to them when they get ill, women get angry and scared when he’s not what he used to be — so they fight,” said Dr. Schlossberg.

Chronic illnesses, like diabetes, arthritis and heart disease, can have a strong negative effect on mood, said Dr. Waite, who will soon be publishing a study on the subject. Diabetes is so often accompanied by depression that Dr. Waite said “one of my colleagues argues that that it is even part of the disease.”

And ailments can have an effect on a couple’s sex life — which can compound the marital problems, doctors said.

“Diabetes brings on neuropathy,” said Dr. Waite. “That means touching and feeling in sex is not as rewarding.” Without the pleasures of affectionate touching — whether a passing hug at the sink or more — tensions can build. That’s why, if a couple is having problems with sex, they are more likely to have problems in the relationship — and vice versa, according to a 2007 New England Journal of Medicine study of sex and health among older adults.

Other changes in circumstances — retirement, shifting roles, the loss of autonomy, disparities in health and abilities — can wreak havoc. Losing independence can feel like losing oneself — and if you don’t know who you are any more, how can you know how to relate to your spouse?

“Fighting may come from a misguided notion that you can regain power by asserting it over your spouse,” said Dr. Schlossberg, whose observations are echoed in a 1984 study in The Canadian Journal of Medicine. “It doesn’t work, it’s false power – but they’ll try anything.”

The sheer exhaustion that can come from being the caregiving spouse is also bound to “make them stressed and angry,” said Dr. Waite. Not to mention guilty and resentful — never a prescription for happy marital relations.

“Part of the trap for the caregiver is the idea that you have to do it all, and the guilt you feel when you cannot live up to it,” said Dr. Gordon Herz, a psychologist in private practice in Madison, Wisc. Not surprisingly, resentment can soon follow, Dr. Herz added, because it is hard to admit to anyone that, “‘this is too much for me.’”

What can outside caregivers — children or other loved ones — do about these golden marriages on the rocks? Should they intervene — or butt out? And can marital therapy help — or is it too late to change?

Share your thoughts and experiences — and on Tuesday we will try to provide some advice from experts.

Read More..

The New Old Age Blog: In the Middle: Why Elderly Couples Fight

George and Gracie (let’s call them that because using their real names would make them even unhappier than they already appear to be) are in their 80s and have been married for more than 65 years. Until recently they seemed to ride the waves that are inevitable in any marriage that spans nearly seven decades; through good and bad, they were partners and best friends.

But lately — ever since her hospitalization and his fall — they have been arguing more bitterly than usual (“Do you have to make such a mess in the kitchen?”), criticizing each other (“Why haven’t you dealt with the insurance company yet?”), withdrawing from each other, and generally making each other more miserable, more often than ever before.

This kind of degenerative relationship is not uncommon among the elderly in even the happiest marriages, marriage therapists and geriatricians said. But that is small comfort to either the couple in the middle of the maelstrom, or the children who care for them, as evidenced by a number of postings on caregiver blogs. As some of the children have wondered there: “Why can’t we all just get along?”

Therapists and others who work with the elderly said the first step to addressing the problem is understanding where it came from.

“A key question is whether the marital bickering is part of a lifelong marital style or a change,” said Dr. Linda Waite, director of the Center on Demography and Economics of Aging at NORC/University of Chicago. Is it new behavior – or just new to the grown children who are suddenly so deeply enmeshed in their parents’ lives that they are only now noticing that something is amiss?

How much of the problem is really just the marriage style? “Some couples like to fight and argue – it keeps their adrenaline going,” said Dr. Nancy K. Schlossberg, professor emerita of counseling psychology at the University of Maryland and author of “Overwhelmed: Coping With Life’s Ups and Downs.”

Sometimes the best judges of whether there is a problem are outsiders, said Dr. William Dale, chief of geriatrics at the University of Chicago Geriatrics Medicine. Pay attention if someone says, “‘Gee, Mom seems more argumentative or withdrawn than the last time I saw her,’” Dr. Dale advised.

If the tone or severity of the marital tensions seem new, then it is important to find out why. The causes could be mental or physical, doctors say.

On the mental front, increased anger and fighting could be one of the first signs of mild cognitive impairment, a precursor of dementia or Alzheimer’s, in one or both of the spouses, said Dr. Lisa Gwyther, director of the Duke Center for Aging Family Support Program and an associate professor in the department of psychiatry and behavioral sciences.

Dr. Dale concurs: “There is good evidence that the earliest signs of cognitive impairment are often emotional changes” — anger, anxiety, depression — “rather than cognitive ones” — memory, abstract thought.

But these early signs of cognitive decline can be so subtle that neither the spouses themselves, or their grown children, recognize them for what they are, Dr. Gwyther said. So husband and wife blame each other for the changes and allow feelings of hurt and resentment to grow.

Withdrawing from activities that used to give them pleasure can be a telltale sign of mild cognitive impairment – and can trigger anger and arguments.

“In one couple, the husband just didn’t want to participate in the holidays — the wife got angry and said he was being lazy and stubborn,” said Dr. Gwyther. But the truth was that his cognitive decline made all the activity overwhelming, and he didn’t want anyone to know that he was anxious about not remembering everyone’s names and embarrassing himself.

Suspicion and paranoia can also accompany mild cognitive decline and precipitate distrust and hurtful accusations. Dr. Gwyther recalled another woman who “called her daughter frantic because she said her husband dropped her at her chemo appointment, went to park the car, and didn’t return to get her.” The woman couldn’t imagine that her husband could possibly have lost his sense of time and direction, Dr. Gwyther added. She took it personally, complaining to her daughter that “your father doesn’t seem to care any more.”

Dr. Dale told of a spouse who accused her mate of infidelity because “she was convinced that when he was out grocery shopping he was really having an affair.”

Hoarding, an early symptom of mild cognitive impairment, can also create tension in a marriage. (For new treatments, see this recent post by my colleague Paula Span.)

When one couple came to a counseling session with Dr. Norman Abeles, emeritus professor of psychology and former director of psychological clinic at Michigan State University, the hoarding spouse finally said she did it because she thought that they would run out of money, “even though there was enough money to go around.” Dr. Abeles said that incident led to her diagnosis of mild cognitive impairment.

Adding to the confusion, mild cognitive impairment, or M.C.I., comes and goes. “There are good days and bad days, good hours and bad hours,” said Dr. Gwyther. “Alzheimer’s and dementia don’t start on Tuesday — it’s a slow insidious onset.” But the diagnosis is becoming more common: The Institute for Dementia Research and Prevention predicts that 1 in 6 women, and 1 in 10 men, who live past the age of 55 will develop dementia in their lifetime.

“Spouses find it difficult to know when their partner with M.C.I. is acting differently, usually badly, due to the advancing illness or due to ‘willful’ personality issues,” said Dr. Dale, citing a 2007 study in the journal Family Relations exploring the problems this can create for couples.

Blaming is often easier than understanding. Another of Dr. Gwyther’s patients was furious at her husband for not filing their taxes. “He’s a C.P.A.,” she said. “How could we owe back taxes?” It did not occur to her that he might be unable to handle that task — and was too frightened about his deteriorating mental focus to let her know.

But as harmful as mental decline can be for a marriage, it is just part of the equation. Physical ailments – even those that seem completely unrelated to marital relations – “can upset the equilibrium of the marriage,” according to a study in The Canadian Medical Association Journal.

“Most men get angry at what’s happened to them when they get ill, women get angry and scared when he’s not what he used to be — so they fight,” said Dr. Schlossberg.

Chronic illnesses, like diabetes, arthritis and heart disease, can have a strong negative effect on mood, said Dr. Waite, who will soon be publishing a study on the subject. Diabetes is so often accompanied by depression that Dr. Waite said “one of my colleagues argues that that it is even part of the disease.”

And ailments can have an effect on a couple’s sex life — which can compound the marital problems, doctors said.

“Diabetes brings on neuropathy,” said Dr. Waite. “That means touching and feeling in sex is not as rewarding.” Without the pleasures of affectionate touching — whether a passing hug at the sink or more — tensions can build. That’s why, if a couple is having problems with sex, they are more likely to have problems in the relationship — and vice versa, according to a 2007 New England Journal of Medicine study of sex and health among older adults.

Other changes in circumstances — retirement, shifting roles, the loss of autonomy, disparities in health and abilities — can wreak havoc. Losing independence can feel like losing oneself — and if you don’t know who you are any more, how can you know how to relate to your spouse?

“Fighting may come from a misguided notion that you can regain power by asserting it over your spouse,” said Dr. Schlossberg, whose observations are echoed in a 1984 study in The Canadian Journal of Medicine. “It doesn’t work, it’s false power – but they’ll try anything.”

The sheer exhaustion that can come from being the caregiving spouse is also bound to “make them stressed and angry,” said Dr. Waite. Not to mention guilty and resentful — never a prescription for happy marital relations.

“Part of the trap for the caregiver is the idea that you have to do it all, and the guilt you feel when you cannot live up to it,” said Dr. Gordon Herz, a psychologist in private practice in Madison, Wisc. Not surprisingly, resentment can soon follow, Dr. Herz added, because it is hard to admit to anyone that, “‘this is too much for me.’”

What can outside caregivers — children or other loved ones — do about these golden marriages on the rocks? Should they intervene — or butt out? And can marital therapy help — or is it too late to change?

Share your thoughts and experiences — and on Tuesday we will try to provide some advice from experts.

Read More..

European Mobile Stocks Fall After Costly Spectrum Auction

BERLIN — Shares of four big European cellphone operators fell Monday after they paid more than twice what investors had been expecting in a spectrum auction in the Netherlands, raising concern that a damaging bidding war could sap the industry.

The Dutch auction began Oct. 31 and ended Friday, raising €3.8 billion, or $4.9 billion, for spectrum that the companies plan to use for high-speed service using Long Term Evolution, or LTE, technology. But analysts warned that the sale, to be followed next year by a much larger spectrum auction in Britain, could herald a new round of expensive infrastructure levies that may hamstring operators at a time when their sales have been stagnating.

The winners were KPN, the former Dutch monopoly; Vodafone, the British mobile group; the German company T-Mobile, and the Swedish operator Tele2.

LTE supports all of the typical high-speed applications including audio and video and Internet surfing, but is much faster, cutting download times and vastly expanding the capacity of existing networks to handle increases in data traffic.

After the bidding, KPN, which is partly owned by the Mexican communications mogul Carlos Slim Helú, canceled its dividend for 2012 and lowered its projected investor payout for 2013 to cover the $1.35 billion the company spent in the auction.

On Monday, the first day of stock trading after the auction’s completion, shares of KPN fell by as much as 14 percent in Amsterdam, the steepest drop in more than a decade. Shares of Vodafone were down 2.6 percent in London through mid-afternoon trading.

Shares of Deutsche Telekom, the parent company of T-Mobile, fell 1 percent in Frankfurt, and shares of Tele2 declined 3.5 percent in Stockholm.

“The money raised in the Dutch auction was a lot more than investors were expecting,” said Phil Kendall, an analyst at Strategy Analytics in Milton Keynes, England. “The concern now is that the sums will now be so great the technology will be unprofitable.”

Mr. Kendall said mobile operators were eager to obtain extra spectrum because extensive bandwidth had become increasingly critical amid the explosion of mobile Internet data, which is testing the capacity of some carriers’ grids and causing overloading.

“Really, for many operators, the only way they will be able to differentiate themselves from other operators is by having enough spectrum to manage the demand on their services,” Mr. Kendall said. “That is why there is such intense interest in buying more frequency.”

More radio spectrum, or wireless network capacity, is crucial to delivering the high speeds advertised in LTE, which theoretically can produce download rates of up to 300 megabits per second on a wireless connection. Such speeds and the expanded capacity of the networks are considered essential to support the rapid expansion of the wireless Internet, as well as the increasing use of mobile grids for robotic communication between devices.

Speeds on the first generation of LTE networks activated in Germany, South Korea, Sweden and the United States have averaged much less, generally 10 to 25 megabits per second, in part because operators do not have enough spectrum to exploit the technology’s full potential.

The Dutch auction also raised the specter of another costly round of infrastructure fees on the cellphone industry similar to those in 1999 and 2000, when operators paid billions for the first European 3G mobile licenses.

Investors were concerned that the Dutch prices could set a precedent for auctions planned in Britain and perhaps Poland next year, as well as others that will be held across Europe over the next five years as bandwidth is freed up and sold by national governments to wireless carriers. Germany, which held its latest spectrum auction in 2010, has indicated that it may hold another in 2016.

Those license sales in 1999 and 2000, engineered by cash-strapped governments in most cases to extract the maximum amount of money from mobile operators, led to large profit write-downs by operators including Vodafone and Telefónica, which owns the O2 carrier in Europe.

With completion of the Dutch auction, the focus will now shift to Britain, where the telecommunications regulator is planning to begin its spectrum auction in January.

All four British mobile network operators are expected to bid: Everything Everywhere, the venture of Deutsche Telekom and France Telecom; Vodafone; O2 U.K.; and 3, a unit of Hutchison Whampoa. The former landline monopoly, BT, has not ruled out a potential bid, which could further raise the stakes.

Matthew Howett, an analyst at Ovum, a research firm in London, said the British auction could raise £2 billion to £4 billion, or $3.2 billion to $6.5 billion.

“The £2 billion to £4 billion range that is widely touted is based on similar auctions elsewhere in Europe,” Mr. Howett said. “There is nothing to suggest that the U.K. should be any different. It’s possibly the most competitive market in Europe and all existing operators will want to make sure they walk away with spectrum to feed the almost insatiable appetite we in the U.K. now have for data.”

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Gérard Depardieu Says He Is Giving Up French Citizenship

PARIS — Gérard Depardieu, the famous French actor, will be French no more, so exasperated is he with French taxes and the French government, he declared in an angry open letter to France’s prime minister on Sunday.

Mr. Depardieu, who has been accused by France’s Socialist government of abandoning the country to avoid paying taxes, will be giving up his French citizenship and taking up residence over the border in Belgium, he wrote. Mr. Depardieu insisted that his move was not solely for tax reasons, but also because he felt the government believed that “success, creation, talent — difference, in fact — must be punished.”

Mr. Depardieu’s decision to leave France, where the Socialist government has created a 75 percent marginal tax rate for incomes above $1.3 million amid stagnating growth, rising unemployment and a contracting budget, has drawn reprobation from politicians of all ideological stripes, as well as the news media and a good number of ordinary citizens. Prime Minister Jean-Marc Ayrault has called the actor’s departure unpatriotic and “pathetic,” while the labor minister, Michel Sapin, deemed it the sign of a “form of personal degeneration.”

In his letter, published in the newspaper Le Journal du Dimanche, Mr. Depardieu said he had paid an 85 percent tax rate on his 2012 revenue and a total of 145 million euros, or $190 million, in taxes over his working life.

“I am neither to be pitied nor to be praised, but I refuse the word ‘pathetic,’ ” Mr. Depardieu wrote.

Mr. Depardieu, 63, who has been in almost 200 films and has won numerous awards, has drawn attention in recent years for his love of drink and several related episodes that caused him embarrassment.

“Who are you to judge me so, I ask you, Mr. Ayrault?” he wrote in his letter. “Despite my excesses, my appetite and my love of life, I am a free being, sir, and I will remain polite.”

On Friday, President François Hollande took up the subject, calling for “ethical behavior” by French taxpayers and suggesting that France may renegotiate its fiscal conventions with Belgium. He also joked that French residents of Néchin, the Belgian border village where Mr. Depardieu has bought a home, should not get too comfortable. Mr. Hollande noted that the mayor there is also a Socialist.

While several wealthy French citizens have reportedly departed for other fiscal shores since Mr. Hollande’s election in May, Sunday brought the unanticipated return to France of the writer Michel Houellebecq, who had been living in Ireland, where tax rates are relatively low.

“The major reason is that I want to speak my language, once again, in everyday life,” Mr. Houellebecq wrote in an e-mail to Agence France-Presse, insisting that taxes and politics had little to do with his repatriation.

Mr. Depardieu, too, will be able to speak his native tongue in his new home. Though many Belgians speak Flemish, Mr. Depardieu’s neighbors in Néchin speak French.

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As Gold Is Spirited Out of Afghanistan, Officials Wonder Why

Zalmai for The New York Times

A Kabul jewelry shop. Officials are concerned about gold being flown out of Afghanistan.

KABUL, Afghanistan — Packed into hand luggage and tucked into jacket pockets, roughly hewed bars of gold are being flown out of Kabul with increasing regularity, confounding Afghan and American officials who fear money launderers have found a new way to spirit funds from the country.

Most of the gold is being carried on commercial flights destined for Dubai, according to airport security reports and officials. The amounts carried by single couriers are often heavy enough that passengers flying from Kabul to the Persian Gulf emirate would be well advised to heed warnings about the danger of bags falling from overhead compartments. One courier, for instance, carried nearly 60 pounds of gold bars, each about the size of an iPhone, aboard an early morning flight in mid-October, according to an airport security report. The load was worth more than $1.5 million.

The gold is fully declared and legal to fly. Some, if not most, is legitimately being sent by gold dealers seeking to have old and damaged jewelry refashioned into new pieces by skilled craftsmen in the Persian Gulf, said Afghan officials and gold dealers.

But gold dealers in Kabul and current and former Kabul airport officials say there has been a surge in shipments since early summer. The talk of a growing exodus of gold from Afghanistan has been spreading among the business community here, and in recent weeks has caught the attention of Afghan and American officials. The officials are now puzzling over the origin of the gold — very little is mined in Afghanistan, although larger mines are planned — and why so much appears to be heading for Dubai.

“We are investigating it, and if we find this is a way of laundering money, we will intervene,” said Noorullah Delawari, the governor of Afghanistan’s central bank. Yet he acknowledged that there were more questions than answers at this point. “I don’t know where so much gold would come from, unless you can tell me something about it,” he said in an interview. Or, as a European official who tracks the Afghan economy put it, “new mysteries abound” as the war appears to be drawing to a close.

Figuring out what precisely is happening in the Afghan economy remains as confounding as ever. Nearly 90 percent of the financial activity takes place outside formal banks. Written contracts are the exception, receipts are rare and statistics are often unreliable. Money laundering is commonplace, say Western and Afghan officials.

As a result, with the gold, “right now you’re stuck in that situation we usually are: is there something bad going on here or is this just the Afghan way of commerce?” said a senior American official who tracks illicit financial networks.

There is reason to be suspicious: the gold shipments track with the far larger problem of cash smuggling. For years, flights have left Kabul almost every day carrying thick wads of bank notes — dollars, euros, Norwegian kroner, Saudi Arabian riyals and other currencies — stuffed into suitcases, packed into boxes and shrink-wrapped onto pallets. At one point, cash was even being hidden in food trays aboard now-defunct Pamir Airways flights to Dubai.

Last year alone, Afghanistan’s central bank says, roughly $4.5 billion in cash was spirited out through the airport. Efforts to stanch the flow have had limited impact, and concerns about money laundering persist, according to a report released last week by the United States Special Inspector General for Afghanistan Reconstruction.

The unimpeded “bulk cash flows raise the risk of money laundering and bulk cash smuggling — tools often used to finance terrorist, narcotics and other illicit operations,” the report said. The cash, and now the gold, is most often taken to Dubai, where officials are known for asking few questions. Many wealthy Afghans park their money and families in the emirate, and gold dealers say more middle-class Afghans are sending money and gold — seen as a safeguard against economic ruin — to Dubai as talk of a postwar economic collapse grows louder.

But given Dubai’s reputation as a haven for laundered money, an Afghan official said that the “obvious suspicion” is that at least some of the apparent growth in gold shipments to Dubai is tied to the myriad illicit activities — opium smuggling, corruption, Taliban taxation schemes — that have come to define Afghanistan’s economy.

There are also indications that Iran could be dipping into the Afghan gold trade. It is already buying up dollars and euros here to circumvent American and European sanctions, and it may be using gold for the same purpose.

Yahya, a dealer in Kabul, said other gold traders were helping Iran buy the precious metal here. Payment was being made in oil or with Iranian rials, which readily circulate in western Afghanistan. The Afghan dealers are then taking it to Dubai, where the gold is sold for dollars. The money is then moved to China, where it was used to buy needed goods or simply funneled back to Iran, said Yahya, who like many Afghans uses a single name.

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Dr. William F. House, Inventor of Cochlear Implant, Dies

Dr. William F. House, a medical researcher who braved skepticism to invent the cochlear implant, an electronic device considered to be the first to restore a human sense, died on Dec. 7 at his home in Aurora, Ore. He was 89.

The cause was metastatic melanoma, his daughter, Karen House, said.

Dr. House pushed against conventional thinking throughout his career. Over the objections of some, he introduced the surgical microscope to ear surgery. Tackling a form of vertigo that doctors had believed was psychosomatic, he developed a surgical procedure that enabled the first American in space to travel to the moon. Peering at the bones of the inner ear, he found enrapturing beauty.

Even after his ear-implant device had largely been supplanted by more sophisticated, and more expensive, devices, Dr. House remained convinced of his own version’s utility and advocated that it be used to help the world’s poor.

Today, more than 200,000 people in the world have inner-ear implants, a third of them in the United States. A majority of young deaf children receive them, and most people with the implants learn to understand speech with no visual help.

Hearing aids amplify sound to help the hearing-impaired. But many deaf people cannot hear at all because sound cannot be transmitted to their brains, however much it is amplified. This is because the delicate hair cells that line the cochlea, the liquid-filled spiral cavity of the inner ear, are damaged. When healthy, these hairs — more than 15,000 altogether — translate mechanical vibrations produced by sound into electrical signals and deliver them to the auditory nerve.

Dr. House’s cochlear implant electronically translated sound into mechanical vibrations. His initial device, implanted in 1961, was eventually rejected by the body. But after refining its materials, he created a long-lasting version and implanted it in 1969.

More than a decade would pass before the Food and Drug Administration approved the cochlear implant, but when it did, in 1984, Mark Novitch, the agency’s deputy commissioner, said, “For the first time a device can, to a degree, replace an organ of the human senses.”

One of Dr. House’s early implant patients, from an experimental trial, wrote to him in 1981 saying, “I no longer live in a world of soundless movement and voiceless faces.”

But for 27 years, Dr. House had faced stern opposition while he was developing the device. Doctors and scientists said it would not work, or not work very well, calling it a cruel hoax on people desperate to hear. Some said he was motivated by the prospect of financial gain. Some criticized him for experimenting on human subjects. Some advocates for the deaf said the device deprived its users of the dignity of their deafness without fully integrating them into the hearing world.

Even when the American Academy of Ophthalmology and Otolaryngology endorsed implants in 1977, it specifically denounced Dr. House’s version. It recommended more complicated versions, which were then under development and later became the standard.

But his work is broadly viewed as having sped the development of implants and enlarged understanding of the inner ear. Jack Urban, an aerospace engineer, helped develop the surgical microscope as well as mechanical and electronic aspects of the House implant.

Karl White, founding director of the National Center for Hearing Assessment and Management, said in an interview that it would have taken a decade longer to invent the cochlear implant without Dr. House’s contributions. He called him “a giant in the field.”

After embracing the use of the microscope in ear surgery, Dr. House developed procedures — radical for their time — for removing tumors from the back portion of the brain without causing facial paralysis; they cut the death rate from the surgery to less than 1 percent from 40 percent.

He also developed the first surgical treatment for Meniere’s disease, which involves debilitating vertigo and had been viewed as a psychosomatic condition. His procedure cured the astronaut Alan B. Shepard Jr. of the disease, clearing him to command the Apollo 14 mission to the moon in 1971. In 1961, Shepard had become the first American launched into space.

In presenting Dr. House with an award in 1995, the American Academy of Otolaryngology-Head and Neck Surgery Foundation said, “He has developed more new concepts in otology than almost any other single person in history.”

William Fouts House was born in Kansas City, Mo., on Dec. 1, 1923. When he was 3 his family moved to Whittier, Calif., where he grew up on a ranch. He did pre-dental studies at Whittier College and the University of Southern California, and earned a doctorate in dentistry at the University of California, Berkeley. After serving his required two years in the Navy — and filling the requisite 300 cavities a month — he went back to U.S.C. to pursue an interest in oral surgery. He earned his medical degree in 1953. After a residency at Los Angeles County Hospital, he joined the Los Angeles Foundation of Otology, a nonprofit research institution founded by his brother, Howard. Today it is called the House Research Institute.

Many at the time thought ear surgery was a declining field because of the effectiveness of antibiotics in dealing with ear maladies. But Dr. House saw antibiotics as enabling more sophisticated surgery by diminishing the threat of infection.

When his brother returned from West Germany with a surgical microscope, Dr. House saw its potential and adopted it for ear surgery; he is credited with introducing the device to the field. But again there was resistance. As Dr. House wrote in his memoir, “The Struggles of a Medical Innovator: Cochlear Implants and Other Ear Surgeries” (2011), some eye doctors initially criticized his use of a microscope in surgery as reckless and unnecessary for a surgeon with good eyesight.

Dr. House also used the microscope as a research tool. One night a week he would take one to a morgue for use in dissecting ears to gain insights that might lead to new surgical procedures. His initial reaction, he said, was how beautiful the bones seemed; he compared the experience to one’s first view of the Grand Canyon. His wife, the former June Stendhal, a nurse, often helped.

She died in 2008 after 64 years of marriage. In addition to his daughter, Dr. House is survived by a son, David; three grandchildren; and two great-grandchildren.

The implant Dr. House invented used a single channel to deliver information to the hearing system, as opposed to the multiple channels of competing models. The 3M Company, the original licensee of the House implant, sold its rights to another company, the Cochlear Corporation, in 1989. Cochlear later abandoned his design in favor of the multichannel version.

But Dr. House continued to fight for his single-electrode approach, saying it was far cheaper, and offered voluminous material as evidence of its efficacy. He had hoped to resume production of it and make it available to the poor around the world.

Neither the institute nor Dr. House made any money on the implant. He never sought a patent on any of his inventions, he said, because he did not want to restrict other researchers. A nephew, Dr. John House, the current president of the House institute, said his uncle had made the deal to license it to the 3M Company not for profit but simply to get it built by a reputable manufacturer.

Reflecting on his business decisions in his memoir, Dr. House acknowledged, “I might be a little richer today.”

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Dr. William F. House, Inventor of Cochlear Implant, Dies

Dr. William F. House, a medical researcher who braved skepticism to invent the cochlear implant, an electronic device considered to be the first to restore a human sense, died on Dec. 7 at his home in Aurora, Ore. He was 89.

The cause was metastatic melanoma, his daughter, Karen House, said.

Dr. House pushed against conventional thinking throughout his career. Over the objections of some, he introduced the surgical microscope to ear surgery. Tackling a form of vertigo that doctors had believed was psychosomatic, he developed a surgical procedure that enabled the first American in space to travel to the moon. Peering at the bones of the inner ear, he found enrapturing beauty.

Even after his ear-implant device had largely been supplanted by more sophisticated, and more expensive, devices, Dr. House remained convinced of his own version’s utility and advocated that it be used to help the world’s poor.

Today, more than 200,000 people in the world have inner-ear implants, a third of them in the United States. A majority of young deaf children receive them, and most people with the implants learn to understand speech with no visual help.

Hearing aids amplify sound to help the hearing-impaired. But many deaf people cannot hear at all because sound cannot be transmitted to their brains, however much it is amplified. This is because the delicate hair cells that line the cochlea, the liquid-filled spiral cavity of the inner ear, are damaged. When healthy, these hairs — more than 15,000 altogether — translate mechanical vibrations produced by sound into electrical signals and deliver them to the auditory nerve.

Dr. House’s cochlear implant electronically translated sound into mechanical vibrations. His initial device, implanted in 1961, was eventually rejected by the body. But after refining its materials, he created a long-lasting version and implanted it in 1969.

More than a decade would pass before the Food and Drug Administration approved the cochlear implant, but when it did, in 1984, Mark Novitch, the agency’s deputy commissioner, said, “For the first time a device can, to a degree, replace an organ of the human senses.”

One of Dr. House’s early implant patients, from an experimental trial, wrote to him in 1981 saying, “I no longer live in a world of soundless movement and voiceless faces.”

But for 27 years, Dr. House had faced stern opposition while he was developing the device. Doctors and scientists said it would not work, or not work very well, calling it a cruel hoax on people desperate to hear. Some said he was motivated by the prospect of financial gain. Some criticized him for experimenting on human subjects. Some advocates for the deaf said the device deprived its users of the dignity of their deafness without fully integrating them into the hearing world.

Even when the American Academy of Ophthalmology and Otolaryngology endorsed implants in 1977, it specifically denounced Dr. House’s version. It recommended more complicated versions, which were then under development and later became the standard.

But his work is broadly viewed as having sped the development of implants and enlarged understanding of the inner ear. Jack Urban, an aerospace engineer, helped develop the surgical microscope as well as mechanical and electronic aspects of the House implant.

Karl White, founding director of the National Center for Hearing Assessment and Management, said in an interview that it would have taken a decade longer to invent the cochlear implant without Dr. House’s contributions. He called him “a giant in the field.”

After embracing the use of the microscope in ear surgery, Dr. House developed procedures — radical for their time — for removing tumors from the back portion of the brain without causing facial paralysis; they cut the death rate from the surgery to less than 1 percent from 40 percent.

He also developed the first surgical treatment for Meniere’s disease, which involves debilitating vertigo and had been viewed as a psychosomatic condition. His procedure cured the astronaut Alan B. Shepard Jr. of the disease, clearing him to command the Apollo 14 mission to the moon in 1971. In 1961, Shepard had become the first American launched into space.

In presenting Dr. House with an award in 1995, the American Academy of Otolaryngology-Head and Neck Surgery Foundation said, “He has developed more new concepts in otology than almost any other single person in history.”

William Fouts House was born in Kansas City, Mo., on Dec. 1, 1923. When he was 3 his family moved to Whittier, Calif., where he grew up on a ranch. He did pre-dental studies at Whittier College and the University of Southern California, and earned a doctorate in dentistry at the University of California, Berkeley. After serving his required two years in the Navy — and filling the requisite 300 cavities a month — he went back to U.S.C. to pursue an interest in oral surgery. He earned his medical degree in 1953. After a residency at Los Angeles County Hospital, he joined the Los Angeles Foundation of Otology, a nonprofit research institution founded by his brother, Howard. Today it is called the House Research Institute.

Many at the time thought ear surgery was a declining field because of the effectiveness of antibiotics in dealing with ear maladies. But Dr. House saw antibiotics as enabling more sophisticated surgery by diminishing the threat of infection.

When his brother returned from West Germany with a surgical microscope, Dr. House saw its potential and adopted it for ear surgery; he is credited with introducing the device to the field. But again there was resistance. As Dr. House wrote in his memoir, “The Struggles of a Medical Innovator: Cochlear Implants and Other Ear Surgeries” (2011), some eye doctors initially criticized his use of a microscope in surgery as reckless and unnecessary for a surgeon with good eyesight.

Dr. House also used the microscope as a research tool. One night a week he would take one to a morgue for use in dissecting ears to gain insights that might lead to new surgical procedures. His initial reaction, he said, was how beautiful the bones seemed; he compared the experience to one’s first view of the Grand Canyon. His wife, the former June Stendhal, a nurse, often helped.

She died in 2008 after 64 years of marriage. In addition to his daughter, Dr. House is survived by a son, David; three grandchildren; and two great-grandchildren.

The implant Dr. House invented used a single channel to deliver information to the hearing system, as opposed to the multiple channels of competing models. The 3M Company, the original licensee of the House implant, sold its rights to another company, the Cochlear Corporation, in 1989. Cochlear later abandoned his design in favor of the multichannel version.

But Dr. House continued to fight for his single-electrode approach, saying it was far cheaper, and offered voluminous material as evidence of its efficacy. He had hoped to resume production of it and make it available to the poor around the world.

Neither the institute nor Dr. House made any money on the implant. He never sought a patent on any of his inventions, he said, because he did not want to restrict other researchers. A nephew, Dr. John House, the current president of the House institute, said his uncle had made the deal to license it to the 3M Company not for profit but simply to get it built by a reputable manufacturer.

Reflecting on his business decisions in his memoir, Dr. House acknowledged, “I might be a little richer today.”

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Bobby Kotick of Activision, Drawing Praise and Wrath

J. Emilio Flores for The New York Times

Bobby Kotick, chief executive of Activision Blizzard, with images of characters from the Skylanders series, one of the company’s successful franchises.

PEOPLE who love video games love to hate Bobby Kotick.

Mr. Kotick, the C.E.O. of Activision Blizzard, the world’s largest video game publisher, inspired a stocky, auburn-haired character named Money Sack, who, in a game created by a competitor and a former employee, wields a wide grin and an automatic weapon. In another video, Mr. Kotick pops up from behind a fortified wall, and in a husky, ominous voice says he’ll set the price of his biggest game, Call of Duty, to “your soul” — a dig at its cost. Then fiery lasers shoot out of his eyes, wreaking havoc on an apocalyptic fantasy world. In several online photographs he is depicted as the Devil, with red horns against a Hades-like background.

On this particular Sunday, it’s those Photoshopped horns that really irk Mr. Kotick. He is seated at a corner table in the cavernous breakfast room of the Pierre hotel, across the street from Central Park, shaking a leg nervously and whispering in a conspiratorial hush.

“Think about what it’s like for my dating life when the first picture that comes up is me as the Devil,” says Mr. Kotick, who is recently divorced. “You see all this chatter and you realize that they game the search results. These super-sophisticated 19-year-olds are smarter than our expensive P.R. firm.” (His publicist, Steven Rubenstein, shrugs sheepishly.)

Mr. Kotick, 49, has reason to be annoyed. Not since the music industry’s heyday has there been a business with such a wide disparity between the popularity of its products and its customers’ perception of the chief executive who made those products possible. Video games are among the most successful segments in the entertainment industry, and the disdain heaped on Mr. Kotick in video game blogs is second only to the admiration for him on Wall Street.

He bought the company that is now Activision in 1990, when it was nearly bankrupt and when analysts dismissed video games as fads. But in his 22 years as C.E.O. he has built Activision into a company with a stock market value of $12.7 billion, almost three times that of its top rival, Electronic Arts.

Mr. Kotick isn’t the most technology-driven executive. (He still prefers a BlackBerry.) And he doesn’t get into the weeds of creative storytelling; he leaves that to the studios Activision has acquired. But like David Geffen, who never played a musical instrument well but signed Bob Dylan, Joni Mitchell and the Eagles, Mr. Kotick has a knack for identifying hit after blockbuster hit. He wakes up each day thinking about those hits — some would say obsessing about them — and how Activision can lavish games like Call of Duty, Diablo and World of Warcraft with ever more bells and whistles to keep customers happy and ensure that the next release is a big success, too.

The latest edition of Activision’s biggest game, the shoot’em-up megahit Call of Duty: Black Ops II, was released Nov. 13 and had sales of $500 million in its first 24 hours and more than $1 billion in the first 15 days. That fell short of some analysts’ expectations but was nevertheless more than the total domestic box-office revenue of “Avatar,” the highest-grossing movie of all time.

BUT expensive, immersive games now face a challenge as free online games from companies like Zynga and Rovio compete for users’ attention. Retail sales of video games in the United States totaled $7.5 billion from January to October, down 26 percent from the same period in 2011, according to the NPD Group.

In response, Activision is doubling down on a handful of games with high margins. The strategy is to have customers pay $60 or more to traverse for hundreds of hours through story lines with orchestral soundtracks and realistic, hologram-like heroes and heroines. With each new version “we need more resources, more time, and our development schedule has to get longer,” Mr. Kotick says. “How do you make the games better each year?”

Developers of Call of Duty took the risky step of bringing the mostly historical war series into the not-so-distant future of 2025. David S. Goyer, co-writer of the story for “The Dark Knight Rises,” was a co-writer on the story for the latest Call of Duty. Trent Reznor, the Nine Inch Nails singer who won an Oscar for the soundtrack of “The Social Network,” did the theme song. Oliver L. North served as an adviser for the game, which features a virtual David H. Petraeus, the former Central Intelligence Agency director.

The Activision strategy relies heavily on the holiday season. “This is a nail-biting time for us,” said Brian G. Kelly, Mr. Kotick’s longtime business partner, who is co-chairman of the Activision Blizzard board.

In the three months ended Sept. 30, Activision exceeded analysts’ expectations and increased its earnings by 53 percent, to $226 million, or 20 cents a share, even as video game console sales declined slightly.

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Letter From Washington: U.S. Fiscal Deal Unlikely Without Compromise

WASHINGTON — As many Republicans reject higher tax rates for wealthier Americans, Newt Gingrich, the former speaker of the U.S. House of Representatives, urges them to continue to resist, claiming that the economic boom of the 1990s and the resulting budget surplus were due to his leadership in Congress and not to President Bill Clinton’s early tax increases.

All economic indicators were heading downward before he became speaker, Mr. Gingrich said on the NBC television show “Meet the Press” on Dec. 9, and “virtually all the economic growth occurs after Republicans take control” of the House in 1995. The budget was balanced late in the decade because of the tax cut he engineered in 1997, he said.

To paraphrase the late Senator Daniel Patrick Moynihan, Mr. Gingrich is entitled to his opinion, but not to his own facts.

The arguments against higher taxes today and those used by Mr. Gingrich and his allies against the Clinton tax increase in 1993 are strikingly similar: They will destroy jobs and devastate economic growth, without cutting the deficit.

The facts: The Clinton tax increase on upper incomes, which brought the top rate to 39.6 percent, as President Barack Obama wants to do now, was enacted Aug. 6, 1993. Over the next 18 months, the U.S. economy grew at a rate of about 4 percent; unemployment dropped sharply, to 6 percent from 7.6 percent. The stock market rose moderately.

Deficits immediately began to narrow, shrinking to $22 billion in 1997 from $255 billion in 1993. In late 1997, a small tax cut that included a reduction in capital-gains levies and a child credit was passed, though the much larger tax increases enacted four years earlier were left largely untouched. The budget situation continued to improve, moving to surpluses over the next four years. Most economists credit this result to the climate of the decade, which Alan Greenspan, the former chairman of the Federal Reserve, and others said had been prompted by the 1993 legislation’s bolstering of consumer and investor confidence.

Now the Republican pursuit of lower marginal tax rates for the more affluent defies at least political reality. Polls show strong support for Mr. Obama’s position on the top rate.

Eliminating the George W. Bush-era tax cuts for upper-income Americans, taking the top rate to 39.6 percent, along with the accompanying changes on some deductions and exemptions, would raise about $600 billion in a decade.

During the presidential campaign, the Republican nominee, Mitt Romney, floated the notion of capping deductions at $50,000 a year; that would raise less than $500 billion if, as would seem certain, it excluded charitable contributions; there would be other controversies, and it would hit middle-class taxpayers.

There are significant other tax elements apart from the rates. Some compromises will be necessary on scheduled increases in levies on dividends and capital gains. On the estate tax, although it goes exclusively to the rich, some Senate Democrats, like Max Baucus of Montana and Mary Landrieu of Louisiana, favor a more generous break.

As the political tension mounts over the current fiscal deadlock — which, unless a deal is reached by Dec. 31, would increase taxes for everyone and force some draconian spending cuts — there will have to be trade-offs for any ultimate deficit-reduction deal. Congressional Republicans insist this will only be palatable if there are major cuts to entitlement programs, especially Medicare.

There are clear indications that the White House, despite the objections of some Democrats, would go along with significant changes, perhaps including a form of means testing for Medicare benefits, altering the cost-of-living adjustments for entitlements and taxes.

None of that will fly politically unless it is accompanied by significant revenue increases. Initially, Mr. Obama wanted $1.6 trillion over 10 years; he has pulled back to $1.4 trillion. If he gets an amount in excess of $1 trillion — which would require additional measures beyond ending the Bush-era tax cuts for the wealthy — a substantive deal on entitlements becomes more palatable.

Even if the current standoff over taxes and spending is resolved in the next two weeks, things are going to get messy early next year. Republicans are intent on using the need to increase the debt ceiling as leverage to force the White House to accept entitlement cuts; Mr. Obama is adamant that he won’t play Russian roulette with the debt ceiling again, a reference to last year’s market-rattling last-minute deal.

The only way to avoid that face-off is to devise some sort of enforcement mechanism before New Year’s Eve that would mandate action on entitlements and increased revenue next year. The test for the president in his second term is to get a deal that is market-credible, inspiring consumer and investor confidence.

The shorter-term test for the Republicans, as some operatives, like the former Mississippi governor Haley Barbour realize, is to move away from the issue of rates for the wealthy. One of the party’s liabilities in the 2012 elections was that it was seen as a protector of the privileged. Threatening a fiscal meltdown to protect lower tax rates for millionaires isn’t a corrective.

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