Paul Newman was an incredibly generous man. The actor, who died two years ago of cancer, even joked about giving away $300 million from his Newman’s Own line of food products.
He should have kept a little for himself, a friend remembers Newman once saying.
But it’s apparently a little harder for Newman to keep all the generous promises he made now that he’s departed this life. Even a Hollywood hero, it seems, needs to put his wishes down in a will.
The food company is still giving away lots of cash. It recently passed the $300 million level and charities are still getting all of Newman’s share.
Newman’s unfulfilled promise, I’m hearing, is to his auto racing associates — the Newman Haas team, which he loved so much.
There’s no bad guy in this story. Newman’s love for auto racing is legendary. He’d spend as much time as he possibly could driving his car around the track. Tuesdays were set aside to visit his home track in Lime Rock, Conn.
In fact, I hear that just like with his food company, Newman never took his share of the profits from Newman Haas when the race team was prospering. Five championships in a row during the mid-2000s increased cash flow tremendously.
Newman plowed his winnings back into the sport.
Before the actor died in 2008, I’m told, he verbally promised to help fund the racing team for two years after his death. It was, I suppose, like making sure your family is taken care of.
The trouble is, nothing was put in writing. And, I’m told, there was no money set aside for this purpose. The racing profits of Newman Haas went down, so the dough to honor Newman’s wish needed to come from elsewhere.
It couldn’t be from Newman’s Own because proceeds from the food company are destined for charity. And the actor’s fondness for racing was never shared by his family. Everyone I contacted for this story was nervous that I was going to blast Newman for doing something awful, making information difficult to come by.
So I’m going to make the moral of this story simple: If you’d like something special to be done after you leave this earth, put it down in a legal document, or at the very least on a napkin.
Even Cool Hand Luke can’t make things happen from the beyond.
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“Geithner Warns China on Market,” that’s a headline from a story in last week’s Wall Street Journal.
It said US Treasury Secretary Tim Geithner warned China that it wouldn’t get access to our markets if it doesn’t change the way it does business.
This is about as funny as when Hank Paulson, Geithner’s predecessor, went to China a few years ago to warn Beijing about human-rights violations.
It’s time for a reality check.
China holds more than $700 billion in US government securities. And because of that, China can disrupt the US financial markets and cause interest rates to rise any time it wants.
Perhaps Washington should tone it down a bit when Chinese president Hu Jintao visits the US this week.
China has been making noise about taking away the US dollar’s role as the world’s reserve currency.
While we certainly can’t bow to that wish, it’s always smart to listen politely when a big creditor has something to say.
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Back in August I wrote that the Federal Reserve needed to do something to help the stock market because equity prices were getting dangerously close to another fall meltdown.
The Fed soon started spreading rumors about another quantitative easing, which is the process by which it electronically creates money that is then used to buy US government bonds.
The ultimate purpose is supposed to be keeping interest rates down when borrowing costs can’t be cut any more in the normal way.
Since I suggested that the Fed “do something” in that August column, I feel a little guilty criticizing the fact that Bernanke now seems proud of the fact that his actions have kept the stock market up.
But I’ll do it anyway.
“Our policies have contributed to a stronger stock market just as they did in March, 2009, when we did the first iteration of this program,” Bernanke said last week at a Federal Deposit Insurance Corp. forum.
The trouble is, when stock prices go higher because the Fed is adding too much money — liquidity — into the monetary system, they don’t tend to stay up. Financial bubbles just aren’t healthy, espe cially for naive investors who don’t understand the game — think 1987, 1989, 2000 and 2008.
And that’s exactly what happened again in 2009, when stock prices came down right after the first “iteration” of quantitative easing was fin ished.
And while the stock market’s rise has helped some segments of the economy — the rich, for instance, spent more during the holidays — the trickle-down effect of this wealth to the rest of the economy just isn’t that great.
Let’s hope the economy is going in the right direction. And let’s also hope that Bernanke realizes that getting the stock market to rise isn’t much of a feat.