COVER STORIES:

•  EXCLUSIVE IN-DEPTH INTERVIEW

Mr. Paulson Goes to Washington, by Nina Easton and Andy Serwer, page 140

Treasury Secretary Hank Paulson has unmatched credibility on Wall Street, in the White House and on both sides of the aisle in Congress. China 's leaders listen to him too. Managing editor Andy Serwer and Washington Bureau Chief Nina Easton pick his brain about the market, the economy, and D.C. politics.

QUOTES FROM PAULSON:

On negotiating with the Chinese: “The case that I will be making is that it is in China 's best interest to speed up the pace of their reforms and move ahead more quickly.”

 

On entitlement reform: “If we can get people to come to the table and make some progress, great. And if we can't, I'm not going to tilt at windmills.”

 

•  The Man to See in Silicon Valley , by Roger Parloff, page 150

From Apple to Netscape to Hewlett-Packard, Larry Sonsini has been the most important lawyer in the tech industry for 30 years. Now his legacy is under scrutiny as the twin scandals of options backdating and “pretexting” raise the question: Is he too close to the companies he represents?

 

•  PORTRAITS OF POWER

A FORTUNE Portfolio, photographs by Albert Watson, page 105

From Warren Buffett to Steve Jobs, Bill and Melinda Gates to the founders of YouTube and MySpace, Al Gore to Condi Rice, a remarkable gallery of remarkable leaders who personify the promise—and peril—of business in 2006.

 

The Greatest Money Manager of Our Time, by Andy Serwer, page 212

Bill Miller isn't a hedge fund recluse. He runs an ordinary mutual fund, the $20 billion Legg Mason Value Trust, where he has produced extraordinary returns: His fund has outperformed the stock market for 15 straight years. That's right, 15 years , starting in 1991—during George Bush the elder's presidency—through the tech bull market, then the crash, and now the recovery. In recent years Miller has inadvertently added to the drama of his DiMaggio-like streak by falling behind in the first half, only to come roaring back. As of early November, Miller was about 10 percentage points behind the S&P 500 “It's unlikely I'll beat the market this year,” he says. But he certainly thinks the condition will be temporary.

 

America's Most Dysfunctional Big Company, by Nicholas Varchaver, page 172

Two years ago C omputer Associates admitted $2.2 billion in fraud and recruited new CEO John Swainson to save the day. But the longtime IBM executive is still struggling to turn around what may have been, simply put, the most dysfunctional big corporation in America . When he arrived, the nearly $4 billion-in-revenues company had barely avoided federal indictment for securities fraud and obstruction of justice—Swainson has called it a “near death experience”—and eight former senior executives, including former CEO Sanjay Kumar, would eventually plead guilty. The tale of a c ompany trying to overcome its past.

 

Private Lives, by Geoffrey Colvin and Ram Charan, page 190

If you want to get to the bottom of today's historic boom in private equity, just follow Tom von Krannichfeldt around. You've probably never heard of him or the company he leads, AZ Electronic Materials Being private, AZ doesn't get much media attention. But the way von Krannichfeldt manages AZ—and the way other CEOs run their newly private outfits—holds the real key to how private equity is reshaping business .

 

You're S ooooooooo Predictable, by Jeffrey M. O'Brien, page 224

Everything you buy online says a little bit about you. And if all those bits get put into one big trove of data you and your tastes? Marketer's heaven. The race to create the next Google.

 

An Eye for Talent, by Nadira A. Hira, page 200

Many of the best black and Hispanic college grads forgo business school for other fields. John Rice has an idea why—and he's starting to change the MBA game. Today he has a monster hit on his hands: Management Leadership for Tomorrow (MLT), a nonprofit organization that introduces graduates to the business world through seminars, coaching, and test prep, is the No. 1 source of minorities for the top ten MBA programs.

 

DEPARTMENTS

FIRST Business Gets Thumped After a dozen years in the minority, the Democrats are ready to put their stamp on oil, pharma, and finance. Terror at the Bank A U.S. district court ruling holds two foreign banks liable for financing terrorism, even though their home countries found them innocent. Walter Forbes Goes Down The top-ranking suspect in the Cendant scandal finally is convicted of financial fraud. DISPATCHES IBM Goes Shopping Big Blue and others are trying to come up with gizmos to help retailers sell more and lose less. Back to School Student lenders have had good friends in Congress. That may change under the Democrats. The Recruiter Wendy Kopp's Teach for America hires so many top college grads that corporations want to partner with her on talent acquisition. Self-Deal? CEOs? Nahhh … Backdating may be just the beginning: A lot of other suspicious stuff tends to happen when companies grant options. COLUMNISTS Media Bubble The Philadelphia story: Is Brian Tierney the Inquirer 's savior—or worst than Knight-Ridder? While You Were Out Are you powerful? Take the quiz to find out. INVESTING Mapping the Market's Wild Ride The Dow keeps reaching new highs, but the other major indexes have yet to catch up. A graphic look at a ragged rally. Herman Miller: Sitting Pretty The office-furniture maker rebounds in style from a brutal industrywide slump. BUSINESS LIFE For Love and Money The two Harvard Business School classmates who resurrected Chris-Craft have a new plan to bring Indian Motorcycle back from the brink. Can this icon be saved? Gadgets Microsoft takes on iPod with its wireless-enabled Zune. Too bad Micorsoft does better with the hardware than with the software.

 

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For further information please contact:
Susan Brown Williams
212-522-0133
susan_williams@timeinc.com

Phil DiIanni
212-522-6282
phil_diianni@timeinc.com

 

 

 

 

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