Coruscation

A test-prep industry for 4-year-olds has burgeoned. Bige Doruk opened Bright Kids NYC in 2009, and there is so much demand that she says she's opening a second site this month. She runs a two-month "boot camp" for the gifted test in the fall that includes eight one-on-one 45-minute sessions and two test-prep books for $1,075.

Blacks and Hispanics in gifted kindergarten programs dropped to 27 percent this year under the test-only system, from 46 percent under the old system (66 percent of city kindergartners are black or Hispanic).

other testing experts -- including Tonya Moon, a University of Virginia professor and principal investigator for the National Research Center on the Gifted and Talented, and Robert Tobias, a New York University professor who directed assessment for city schools from 1988 to 2001 -- say there is no magic test that can't be gamed. They say tests need to be supplemented with teacher evaluations, classroom observation and interviews.

"No test gives a full picture," Dr. Moon said. "There's need for multiple measures."

While applauding Mr. Klein for creating a citywide standard, Mr. Tobias said the test should be just one part of the evaluation: "Tests are fallible. I don't know a test in existence that's not subject to test prep. You will always have results biased toward kids with better opportunity."

EDUCATION
Equity of Test Is Debated as Children Compete for Gifted Kindergarten
By MICHAEL WINERIP
Published: July 25, 2010
Because test prep "boot camp" and $145-an-hour tutoring is available to those who can pay, children from wealthy families have an advantage, some parents say.

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Charles Kovit, the Hempstead, NY deputy town attorney, said that under the proposed code change any new towers or antennas would have to be 1,500 feet from residences, schools, houses of worship and libraries.

The town recently hired a consultant, Richard A. Comi of the Center for Municipal Solutions in Glenmont, to review antenna applications.

Under the new ordinance, applications for wireless facilities would require technical evidence that they had a "gap" in coverage necessitating a new tower.

"If not, they will get denied," Mr. Kovit said. The wireless companies would also have to prove that the selected location had "the least negative impact on area character and property values." If another location farther away from homes can solve the gap problem, "they are going to have to move."

REAL ESTATE
A Pushback Against Cell Towers
By MARCELLE S. FISCHLER
Published: August 27, 2010
Homeowners concerned about health, aesthetics and property values are trying to block new antennas.

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The notion of housing as an investment first began to blossom after World War II, when the nesting urges of returning soldiers created a construction boom. Demand was stoked as their bumper crop of children grew up and bought places of their own. The inflation of the 1970s, which increased the value of hard assets, and liberal tax policies both helped make housing a good bet. So did the long decline in mortgage rates from the early 1980s.

Despite all these tailwinds, prices rose modestly for much of the period. Real home prices increased 1.1 percent a year after inflation, according to Mr. Shiller's research.

By the late 1990s, however, the rate was 4 percent a year. Happy homeowners were taking about $100 billion a year out of their houses, which paid for a lot of good times.

"The experience we had from the late 1970s to the late 1990s was an aberration," said Barry Ritholtz of the equity research firm Fusion IQ. "People shouldn't be holding their breath waiting for it to happen again."

BUSINESS
Housing Fades as a Means to Build Wealth, Analysts Say
By DAVID STREITFELD
Published: August 22, 2010
Many economists now believe that the days of banking on an asset that could only rise in value are gone for good

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A classic energy mistake is to put in an oversized heating and cooling system. Consider hiring an independent engineer to recommend a system size. That way you can elevate your problem from not knowing what size your furnace should be to not knowing if you hired the right independent engineer. You'll be surprised how good that feels.

THE SATURDAY ESSAY AUGUST 21, 2010
How I (Almost) Saved the Earth
No one said it would be easy to build the greenest house on the block. Scott Adams on perplexing energy bills, ugly lawns and the true meaning of 'green'

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Bar servicers of first loans they do not own from holding any other mortgages on the same property ?

Companies operate as the back office for the mortgage lending industry. In good times, their tasks are fairly simple: they take in monthly mortgage payments and distribute them to whoever owns the loans. In many cases, large institutions like pension funds or mutual funds own the mortgages, and servicers are obligated to act in their interests at all times.

When borrowers are defaulting in droves, as they are now, loan servicing becomes much more complex and laborious. Servicers must chase delinquent borrowers for payments and otherwise manage these uneasy relationships, possibly into foreclosure.

So where does the conflict of interest lie? Often, the same bank that services a primary mortgage owned by another institution also owns a second mortgage or home equity line of credit on the same property. When that borrower has trouble meeting both payments, the servicer has an interest in making sure that amounts owed on the second lien, which it owns, continue to be paid even if the first loan, which it has no interest in, slides into delinquency. About two-thirds of primary mortgages are serviced by banks who do not own them but hold the accompanying seconds.

This conflict is a crucial reason that the government's loan modification program has been so woefully ineffective. The Treasury Department never forced the second-lien holders who service troubled primary mortgages to reduce the amount they are owed by borrowers, even though such a move would give them a better shot at keeping their homes.

BUSINESS
In This Play, One Role Is Enough
By GRETCHEN MORGENSON and Brad Miller, a Democratic representative from North Carolina
Published: August 14, 2010
A congressman wants to eliminate the dual roles played by big mortgage servicers.

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2010 Porsche Cayman S Orange

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In "Fault Lines: How Hidden Fractures Still Threaten the World Economy" (Princeton University, $26.95), Raghuram G. Rajan concludes that the financial crisis erupted "because in an integrated economy and in an integrated world, what is best for the individual actor or institution is not always best for the system."

Like geological fault lines, the fissures in the world economic system are more hidden and widespread than many realize, he says. And they are potentially more destructive than other, more obvious culprits, like greedy bankers, sleepy regulators and irresponsible borrowers.

Mr. Rajan, a finance professor at the University of Chicago and former chief economist at the International Monetary Fund, argues that the actions of these players (and others) unfolded on a larger worldwide stage, that was (and is) subject to the imperatives of political economies.

He cites three fault lines: domestic political stresses; trade imbalances among countries; and the tensions produced when financial systems with very different structures interact. All three came together to damage the financial sector in 2008, he says, and could meet again to cause another crisis.

Yet another fault line occurred with the meeting of two distinct financial systems. The first, which he calls an arms-length system, is based on transparency and legal safeguards, like those of the United States and Britain. The second, a relationship system, relies on close, informal ties among people and institutions. Examples of the latter include China, Japan and South Korea.

Mr. Rajan says foreign investors from arms-length systems who put capital in countries with relationship systems tend to erect safeguards to lower their risk -- like offering short-term loans that can be withdrawn quickly.

"The U.S. political system," Mr. Rajan notes, "is acutely sensitive to job growth because of the economy's weak safety nets," creating pressure for a series of ad hoc policies that have effectively steered the American economy from bubble to bubble and created damaging incentives. With interest rates kept low, financial players sought out riskier investments carrying higher returns. The possibility of government bailouts in the event of catastrophe further distorted attitudes toward risk.

MR. RAJAN unpacks how individual choices made by bankers and monetary authorities around the world can be seen as rational responses to the largely hidden flaws in the global financial system.

Business
A Call to Fix the Fundamentals
By NANCY F. KOEHN
Published: July 31, 2010
Raghuram G. Rajan writes that systems and large historical forces were the primary drivers of recent global financial instability.

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(Known in economics as price discrimination or price differentiation)

"We are spending $8 billion to $15 billion per year on textbooks" in the United States, Mr. McNealy says. "It seems to me we could put that all online for free."

The nonprofit Curriki fits into an ever-expanding list of organizations that seek to bring the blunt force of Internet economics to bear on the education market. Even the traditional textbook publishers agree that the days of tweaking a few pages in a book just to sell a new edition are coming to an end.

"Today, we are engaged in a very different dialogue with our customers," says Wendy Colby, a senior vice president of Houghton Mifflin Harcourt. "Our customers are asking us to look at different ways to experiment and to look at different value-based pricing models."

Eric Frank, the co-founder of Flat World Knowledge, argues that there is a huge financial opportunity in outflanking the traditional textbook makers. His company homes in on colleges and gives away a free online version of some textbooks. Students can then pay $30 for a black-and-white version to be printed on demand or $60 for a color version, or they can buy an audio copy.

About 55 percent of students buy a book, Mr. Frank said, adding that the leading calculus book from a traditional publisher costs more than $200.

Publishers have started de-emphasizing the textbook in favor of selling a package of supporting materials like teaching aids and training. And companies like Houghton Mifflin have created internal start-ups to embrace technology and capture for themselves some of the emerging online business.

They are responding in much the same way traditional software makers did when open-source arrived, by trying to bundle subscription services around a core product that has been undercut.

Ms. Colby of Houghton Mifflin puts the state of affairs politely: "I think the open-source movement is opening a whole new conversation, and that is what is exciting to us."

Technology
$200 Textbook vs. Free. You Do the Math.
By ASHLEE VANCE
Published: July 31, 2010
Two founders of Sun Microsystems have created two nonprofits to bring open-source textbooks to kindergarten through high school classes.

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Nevertheless, JPMorgan agreed to sell the loan to Inbursa on July 15, 2009, court documents show. It did not inform Cablevision and went ahead with the deal despite the fact that Grupo Televisa and other banks were interested in purchasing part of the loan.

When it sold the loan to Inbursa, JPMorgan structured it as a participation agreement rather than an assignment; such agreements can be sold without the borrower's consent. Still, the terms of the original Cablevision loan stated that participations could be sold only if the lending relationship between JPMorgan and Cablevision did not change significantly. Cablevision argued that the transaction with Inbursa did just that.

Cablevision learned that the sale to Inbursa required JPMorgan to hand over virtually any information Inbursa wanted about Cablevision. Court documents show that this language was added to the agreement at Inbursa's request.

Business
With Friends Like This ...
By GRETCHEN MORGENSON
Published: July 31, 2010
A case involving JPMorgan is another example of the drumbeat of disconcerting revelations about banks.

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At Passport NYC, the ethos is also aspirational, but if the young people there are racing toward adulthood, it is the Bravo television version, a New York existence in which everyone is passionately creative. On most days, the campers -- a mix from all over the country, as well as Mexico, Canada and the Upper East Side -- are out the door of the Y by 8:30 a.m., on their way to their first class or session with someone plugged in. "They're really commuting," said Molly Hott, the director of Passport NYC. "Parents today want to know their children are directed."

By 11:30 a.m. on a recent Thursday, teenagers were wiping down kitchen counters in the basement kitchen of an Upper West Side synagogue, having already whipped up baba ghanouj and couscous with stewed vegetables for a Moroccan Shabbat dinner (the camp is financed, in part, by the Foundation for Jewish Camp, and has a community service component).

Some parents pay good money so that their children can come as close to possible to living out the fantasy that they are demigods battling mythological monsters; at Passport NYC, parents are paying ($3,900 for three weeks) so their children can test out the fantasy of a glamorous New York career.

"Meeting Johnny Iuzzini" -- Jean Georges's pastry chef -- "was a life-changing experience," said Jesse Nagelberg, 16, of East Brunswick, N.J., who was in the kitchen that morning. "To see him use molecular gastronomy, to take a strawberry compote and put it into calcium nitrate so that it totally changed the consistency -- it opened my mind to an entire world of pastry." Jesse already runs his own catering business; now he thinks he might shift his focus in the direction of pastry.

When the economy is good, it is easy to raise an eyebrow at parents who urge their children to consider careers before they have even filled out college applications. When the economy is slow, the push suddenly seems more practical, even when the children chase less-than-practical careers.

Worst-case scenario, we will have a generation of aspirational, empowered young people coming up against a still-sluggish job market, one that cannot accommodate all that confidence and expectation. Best case, they will use that energy and confidence to recharge whatever they find.

N.Y. / REGION
Summer Camp for the Cool and Career-Conscious 13-Year-Old
By SUSAN DOMINUS
Published: July 30, 2010
For some children, vacation season is a time to be hip and "aspirational."

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Choosing a favorite Hamptons beach is not unlike choosing a favorite child. Still, two beaches were among the top 10 named this year by Stephen P. Leatherman, director of the Laboratory for Coastal Research at Florida International University. Coopers Beach (in Southampton) captured the No. 1 spot, beating out beaches in Florida and California. And Main Beach (in East Hampton) took fifth place. Both are wide and clean and -- very important -- sell food. Many beaches require seasonal parking permits, though visitors can park at Coopers Beach for $40 a day. Parking at Main Beach is $20 a day, but weekdays only; on weekends visitors must walk or ride bikes. (Details the Long Island Convention & Visitors Bureau's Web site, discoverlongisland.com.)

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Since the princes are nicer and more impressive, it is easy to be seduced into the belief that they also are more trustworthy. This is false. During the last few years, for example, the princes at Citigroup, Bear Stearns, Goldman Sachs and Lehman Brothers behaved with incredible stupidity while the hedge fund loners often behaved with impressive restraint.

As Sebastian Mallaby shows in his superb book, "More Money Than God", the smooth operators at the big banks were playing with other people's money, so they borrowed up to 30 times their investors' capital. The hedge fund guys usually had their own money in their fund, so they typically borrowed only one or two times their capital.

The social butterflies at the banks got swept up in the popular enthusiasms. The contrarians at the hedge funds made money betting against them. The well-connected bankers knew they'd get bailed out if anything went wrong. The solitary hedge fund guys knew they were on their own and regarded their trades with paranoid anxiety.

My friend once told me that women are not divided into "beautiful" and "chaste". So I am sure that business people are not divided into "princes" and socially inept.

OPINION
An Economy of Grinds
By DAVID BROOKS
Published: July 12, 2010
The slow economic recovery is shutting out the small businesses that are vital to its success.

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