February 3, 2010

Letting your house go to foreclosure because you are out of money and purposefully defaulting on a mortgage to save money: murky


The difference between letting your house go to foreclosure because you are out of money and purposefully defaulting on a mortgage to save money can be murky. But a growing body of research indicates that significant numbers of borrowers are declining to live under what some waggishly call "house arrest."

Using credit bureau data, consultants at Oliver Wyman calculated how many borrowers went straight from being current on their mortgage to default, rather than making spotty payments. They also weeded out owners having trouble paying other bills. Their estimate was that about 17 percent of owners defaulting in 2008, or 588,000 people, chose that option as a strategic calculation.

Continue reading "Letting your house go to foreclosure because you are out of money and purposefully defaulting on a mortgage to save money: murky" »

February 2, 2010

It's not insurance if you're the only customer

Insurance regulators said Delaware did not consider credit-default swaps to be insurance.

"I don't think an insurance commissioner should tread on the toes of the banking industry," said Karen Weldin Stewart, the commissioner in Delaware. "This started out as a bank product."

Her special deputy for examinations, John Tinsley, explained the reasoning. "In insurance, you're putting together a pool," he said. Each customer would be charged a premium based on the total risk of the pool.

A credit-default swap cannot be insurance, Mr. Tinsley said, because it does not involve a pool. There is just one seller and one buyer for every contract.

"It's an investment product," he said. "It's closer to buying an option."

Not everyone agrees. Eric R. Dinallo, New York State's insurance superintendent when A.I.G. imploded, said he believed credit-default swaps were insurance and should be regulated as such.

Continue reading "It's not insurance if you're the only customer" »

February 1, 2010

The original Title VII, in 1964, prohibited "disparate treatment" on the basis of race. In 1991, Congress amended the law to prohibit employment policies that have a "disparate impact" as well.

A target that does bear watching is the heavily freighted civil rights issue that the court raised and then skirted last June in the New Haven firefighters case, Ricci v. DeStefano. The issue in that case was whether the city engaged in a prohibited act of employment discrimination when it discarded the results of a promotion exam on which no black test-taker scored high enough to win a promotion. White firefighters who believed they were entitled to promotion sued under Title VII of the Civil Rights Act, which prohibits employment discrimination on the basis of race.

The original Title VII, in 1964, prohibited "disparate treatment" on the basis of race. In 1991, Congress amended the law to prohibit employment policies that have a "disparate impact" as well. The question for the Supreme Court last June was whether, in trying to avoid the racially disparate impact of the exam, New Haven had made the successful white firefighters the victims of disparate treatment.

The court ruled against the city; Justice Kennedy wrote for the 5-to-4 majority that New Haven's concern about liability for the racially disparate impact of the exam was overblown and insufficient to justify withholding promotions from the successful white test-takers.

The decision avoided a tricky question: suppose the racially disparate impact of a municipal employment policy is so grave that the Civil Rights Act requires a remedy that itself takes race into account - in other words, a remedy for disparate impact that requires disparate treatment.

The court's current majority has made clear that for the government to count individuals by race for almost any purpose is a violation of constitutional magnitude. So how could a statute that could require such an outcome be constitutional? In the New Haven case, Justice Kennedy left it to Justice Scalia to observe sarcastically in a concurring opinion that the court's resolution of the firefighter dispute "merely postpones the evil day on which the court will have to confront the question" of the Civil Rights Act's constitutionality.

Finding the law unconstitutional would be an astonishing step, all the more so because the Civil Rights Act's current form is a Congressional response to a series of Supreme Court decisions in the late 1980's that gave the law a reading that Congress thought was too narrow. The 1991 amendment codified a unanimous opinion of the Burger court, which in 1971 interpreted the original Civil Rights Act to bar employment policies that had a racially disparate impact, such as education requirements that were unrelated to the actual job.

-- Linda Greenhouse


Continue reading "The original Title VII, in 1964, prohibited "disparate treatment" on the basis of race. In 1991, Congress amended the law to prohibit employment policies that have a "disparate impact" as well." »

January 31, 2010

Details like apartment safes

Apart from that, there are details like apartment safes, which could matter to clubgoers who party in their own cribs.

"You may trust your friends and roommates, but you don't have to," said Jeffrey E. Levine, the chairman of Douglaston Development and its construction arm, Levine Builders. "And every medicine cabinet has a keyed lockbox for pharmaceuticals. Viagra, Vioxx, Vicodin -- nobody needs to know but you."

The smallest studio is just under 400 square feet and it's $1,850 a month and one month free rent. The smallest two-bedroom apartment is just under 900 square feet and it's $3,590 and one month free.

Continue reading "Details like apartment safes" »

January 28, 2010

Bubbles as mania


a bubble is a form of psychological malfunction. And like mental illness there's a tricky gray area between being really sick and just having a few problems, Mr. Shiller said during a panel discussion at the World Economic Forum in Davos, Switzerland.

The solution: a checklist like psychologists use to determine if someone is suffering from, say, depression. So here is Mr. Shiller's checklist.

  • Sharp increases in the price of an asset like real estate or dot-com shares
  • Great public excitement about said increases
  • An accompanying media frenzy
  • Stories of people earning a lot of money, causing envy among people who aren't
  • Growing interest in the asset class among the general public
  • "New era" theories to justify unprecedented price increases
  • A decline in lending standards

Continue reading "Bubbles as mania" »

January 24, 2010

Exercise: In Women, Training for a Sharper Mind


January 26, 2010
Vital Signs of Health:
Exercise: In Women, Training for a Sharper Mind
By
Older women who did an hour or two of strength training exercises each week had improved cognitive function a year later, scoring higher on tests of the brain processes responsible for planning and executing tasks, a new study has found.

Researchers in British Columbia randomly assigned 155 women ages 65 to 75 either to strength training with dumbbells and weight machines once or twice a week, or to a comparison group doing balance and toning exercises.

A year later, the women who did strength training had improved their performance on tests of so-called executive function by 10.9 percent to 12.6 percent, while those assigned to balance and toning exercises experienced a slight deterioration -- 0.5 percent. The improvements in the strength training group included an enhanced ability to make decisions, resolve conflicts and focus on subjects without being distracted by competing stimuli.
Older women are generally less likely than others to do strength training, even though it can promote bone health and counteract muscle loss, said Teresa Liu-Ambrose, a researcher at the Center for Hip Health and Mobility at Vancouver General Hospital and the lead author of the paper, which appears in the Jan. 25 issue of Archives of Internal Medicine.

-- RONI CARYN RABIN

Continue reading "Exercise: In Women, Training for a Sharper Mind" »