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March 31, 2011


Loseit, a nudgey health, diet, exercise tracker.

March 30, 2011

Private groups shut down when mission complete

In the end, said Robert Daum, chairman of Out2Play's board, "we just decided to declare victory and go home. Money is a scarce resource, and there are lots of other good causes out there, so there is no point in hitting up our friends and contacts for gifts simply to perpetuate the organization."

Out2Play is working to complete roughly 40 more playgrounds before it closes. It plans to leave behind an endowment to cover some of the maintenance costs associated with the playgrounds, Ms. Wenner said.

Mission Accomplished, Nonprofits Go Out of Business

Published: April 1, 2011
Some nonprofits, like one fighting malaria or another serving victims of the Nazis, are happily closing their doors as they run out of work

March 29, 2011

Without Fannie, Freddie, wither 30 year fixed rate mortgage

Fannie and Freddie also make ownership more affordable by allowing borrowers to repay loans with fixed-interest rates over an unusually long period. A person who borrows $100,000 at 6 percent interest will pay $600 each month for 30 years, compared to $716 each month for 20 years.

The 30-year loan first became broadly available by an act of Congress in 1954 and, from then until now, the vast majority of such loans have been issued only with government support. Most investors are simply not willing to make such a long-term bet. They prefer loans with adjustable rates.

Alex J. Pollock, a former chief executive of the Federal Home Loan Bank of Chicago, said such loans would remain available in the absence of a federal guarantee, but they might be harder to find. And lenders might demand a larger down payment. Or a better credit score.

Without Loan Giants, 30-Year Mortgage May Fade Away
Published: March 3, 2011
If Fannie Mae and Freddie Mac shut down, interest rates would rise for most borrowers, but urban and rural residents could see sharper increases than customers in the suburbs.

March 28, 2011

Fannie and Freddie limit to drop to $625,500 in October

Among those borrowers choosing adjustable-rate mortgages are buyers of property costing more than the $729,750 limit at which Fannie Mae and Freddie Mac will buy back loans from lenders, said Mary Boudreau, the owner of Penfield Financial, a mortgage broker in Fairfield, Conn. (Without the government buyback, fewer lenders are willing to make these "jumbo" loans, which carry interest rates one or two points above those of conventional loans. The Fannie and Freddie limit is set to drop to $625,500 in October.)

More Borrowers Are Opting for Adjustable-Rate Mortgages
Published: March 17, 2011
This time around, mortgage experts say, lenders are offering more conservative ARM products, without the gimmicky "teaser" rates and features.

March 27, 2011

Do not wait to be right

In order to "become right," some investors will stand by their predictions despite a stock or the market going the opposite way, hoping to be proven correct. Ned Davis called this the curse of "being right rather than making money."There are only two kinds of predictions that have some value to investors: One is probability-based, and the other is risk-based. As long as you apply the same rules -- no one knows the future, they are subject to revision and should not be taken as gospel -- then these are sometimes worth considering.Probability assessments are typically based upon historical comparisons of prior markets with similar characteristics: The more variables that align, the higher the likelihood that a given scenario plays out in a similar fashion. They are of this variety: In the past, when X, Y and Z all happened together, then we expect that A is most likely, then B is possible, while C is the least likely.That doesn't mean A will happen or C cannot -- only that there's a specific probability of these events occurring out of the millions of ways the future might unfold. Whether any particular scenario plays out is determined by how the countless variables interact over time.

Looking at the future in terms of various probabilities is a productive way to position assets and manage risk. Why? If your expectations for the future recognize that this is but one possible outcome, then you are more likely to consider and plan for other contingencies. It builds in an expectation that other scenarios can and will occur.

[ Via Barry ]

March 26, 2011

A.K. Barnett-Hart CDO Thesis

By Peter Lattman

Deal Journal has yet to read "The Big Short," Michael Lewis's yarn on the financial crisis that hit stores today. We did, however, read his acknowledgments, where Lewis praises "A.K. Barnett-Hart, a Harvard undergraduate who had just written a thesis about the market for subprime mortgage-backed CDOs that remains more interesting than any single piece of Wall Street research on the subject."


A.K. Barnett-Hart
While unsure if we can stomach yet another book on the crisis, a killer thesis on the topic? Now that piqued our curiosity. We tracked down Barnett-Hart, a 24-year-old financial analyst at a large New York investment bank. She met us for coffee last week to discuss her thesis, "The Story of the CDO Market Meltdown: An Empirical Analysis." Handed in a year ago this week at the depths of the market collapse, the paper was awarded summa cum laude and won virtually every thesis honor, including the Harvard Hoopes Prize for outstanding scholarly work.

Last October, Barnett-Hart, already pulling all-nighters at the bank (we agreed to not name her employer), received a call from Lewis, who had heard about her thesis from a Harvard doctoral student. Lewis was blown away.


Deal Journal
An up-to-the-minute take on deals and deal makers.
Deal Profile: Phillips-Van Heusen to Acquire Tommy HilfigerDeals of the Day: Lehman Sacked Whistle-Blower
MARCH 15, 2010, 4:59 PM ET
Michael Lewis's 'The Big Short'? Read the


March 25, 2011

Learning a skill so well you don't think about it

When people first learn to use a keyboard, they improve very quickly from sloppy single-finger pecking to careful two-handed typing, until eventually the fingers move effortlessly and the whole process becomes unconscious. At this point, most people's typing skills stop progressing. They reach a plateau. If you think about it, it's strange. We've always been told that practice makes perfect, and yet many people sit behind a keyboard for hours a day. So why don't they just keeping getting better and better?

In the 1960s, the psychologists Paul Fitts and Michael Posner tried to answer this question by describing the three stages of acquiring a new skill. During the first phase, known as the cognitive phase, we intellectualize the task and discover new strategies to accomplish it more proficiently. During the second, the associative phase, we concentrate less, making fewer major errors, and become more efficient. Finally we reach what Fitts and Posner called the autonomous phase, when we're as good as we need to be at the task and we basically run on autopilot. Most of the time that's a good thing. The less we have to focus on the repetitive tasks of everyday life, the more we can concentrate on the stuff that really matters. You can actually see this phase shift take place in f.M.R.I.'s of subjects as they learn new tasks: the parts of the brain involved in conscious reasoning become less active, and other parts of the brain take over. You could call it the O.K. plateau.

Psychologists used to think that O.K. plateaus marked the upper bounds of innate ability. In his 1869 book "Hereditary Genius," Sir Francis Galton argued that a person could improve at mental and physical activities until he hit a wall, which "he cannot by any education or exertion overpass." In other words, the best we can do is simply the best we can do. But Ericsson and his colleagues have found over and over again that with the right kind of effort, that's rarely the case. They believe that Galton's wall often has much less to do with our innate limits than with what we consider an acceptable level of performance. They've found that top achievers typically follow the same general pattern.

They develop strategies for keeping out of the autonomous stage by doing three things: focusing on their technique, staying goal-oriented and getting immediate feedback on their performance. Amateur musicians, for example, tend to spend their practice time playing music, whereas pros tend to work through tedious exercises or focus on difficult parts of pieces. Similarly, the best ice skaters spend more of their practice time trying jumps that they land less often, while lesser skaters work more on jumps they've already mastered. In other words, regular practice simply isn't enough. For all of our griping over our failing memories -- the misplaced keys, the forgotten name, the factoid stuck on the tip of the tongue -- our biggest failing may be that we forget how rarely we forget. To improve, we have to be constantly pushing ourselves beyond where we think our limits lie and then pay attention to how and why we fail.

Secrets of a Mind-Gamer
Published: February 15, 2011
How I trained my brain and became a world-class memory athlete.

March 24, 2011

Emerging markets individual countries ETFs and exchange-traded mutual funds

Funds and ETFs
The best way to play individual countries is through exchange-traded mutual funds. You can track Russia via the Market Vectors Russia exchange-traded fund, Mexico via the iShares MSCI Mexico Index ETF and Taiwan via the iShares MSCI Taiwan Index ETF, among others.

Placing individual country bets isn't for the timid, however. Emerging markets are notoriously volatile, and single-country ETFs are susceptible to big swings. "These ETFs can have enormous years on the upside and enormous years on the downside," says Howard Sontag, chief executive of Sontag Advisory LLC in New York.

With correlations breaking down, the safest way to play emerging markets is to invest in a broad range of nations. You might assume that diversified index funds or ETFs would be a good vehicle. But those tend to be dominated by the biggest companies in the biggest markets--China and India among them.

"You can't just invest in the aggregate index," says Nuno Fernandes, a professor of finance at the International Institute for Management Development in Lausanne, Switzerland. "You have to do a better job of choosing where to invest."

An actively managed mutual fund might be a better alternative, because the manager, in theory, has the expertise to make the difficult strategy calls that most individual investors can't. To find the most experienced, scour fund websites for information about managers, and look for tenures of five years or longer or other emerging-markets experience.

The top performer during the past three years has been the Aberdeen Emerging Markets Institutional Fund, which gained 11% annually, according to investment-research firm Morningstar Inc. As of the end of January, it had 17% of its portfolio in Brazil, about one percentage point more than the MSCI Emerging Market Index--and just 5% in South Korea, versus 7% for the index.

The best performer on a five-year basis is the Wells Fargo Advantage Emerging Markets Fund, returning 13% annually. As of the end of February, Korea made up just 10% of the portfolio versus 15% for its benchmark, while Mexico accounted for 5.6%, more than the benchmark's 4.5%. The fund focuses on companies more than countries, says portfolio manager Jerry Zhang.

The menu of actively managed portfolios is growing. Firms have rolled out 23 new diversified emerging-market funds during the past 12 months, according to Morningstar, compared with six in the year-earlier period. There are 135 actively-managed emerging-market funds overall, according to Morningstar.

A caveat: Most actively managed funds lag the index over time. And for some of the firms rolling out new funds, this will be their first emerging-markets product. Among them: Marsico Funds, Baron Funds and Fred Alger Management Inc.'s Alger Funds.

How to Play the Emerging Markets
Despite the Gloomy Headlines, Opportunities Are Cropping Up in Unexpected Places

March 23, 2011

Why can't states grasp the absurdity of giving welfare to film and TV producers?

In the definitive document on this issue -- a paper published in December by the Center on Budget and Policy Priorities -- senior fellow Robert Tannenwald notes what he tactfully calls "flaws" in various studies the states have commissioned to justify the subsidy. Even after our recent experience with gullible or mendacious accountants in financial scandals like Enron's, it's actually shocking that reputable accounting firms would pull some of these stunts, such as counting the allowances film crews get paid for expenses as a benefit to the state, then counting the same money again when it is spent. Or assuming without explanation that the average film crew member makes $82,400 a year, when the Bureau of Labor Statistics sets that figure at $35,000. The most outrageous double counting, of course, is telling one state after another that it can bring in billions by enticing the same movies away from other states.

-- Michael Kinsley




Movie math

Why can't states grasp the absurdity of giving welfare to film and TV producers?

By Michael Kinsley

March 1, 2011

March 22, 2011


"Growth had a life of its own -- and that's O.K., when you're hitting the cover off the ball every time, but at some point, nothing lasts forever."

One thing hasn't changed: the man dreams big. In that same interview, Mr. Schultz spoke of expanding into still more products and in markets like China. He is pushing, of all things, a brand of instant coffee. The words "Starbucks Coffee" were just removed from the company's green mermaid logo because he wants to waltz his brand up and down the grocery aisles. On Thursday, he announced that the company had struck a deal with Green Mountain Coffee Roasters to distribute Starbucks coffee and teas for Keurig single-serving systems. Shares of Starbucks jumped nearly 10 percent on the news, reaching their highest level since 2006. The stock closed at $36.56 on Friday.

Mr. Schultz and his colleagues say Starbucks will keep its feet on the ground this time, but some outsiders have doubts. Detractors say Starbucks long ago ceded its role as a gourmet tastemaker to become a "billions-and-billions served" chain like McDonald's. Starbucks -- "Charbucks," to those who complain that its heavily roasted coffee tastes burned -- will never rekindle the old romance, these people say.

"Has anybody said they came back because people love the coffee again?" asks Bryant Simon, a history professor at Temple University and author of "Everything but the Coffee: Learning About America From Starbucks."

"They came back because they're remaking themselves as a brand that competes on value, largely -- a brand that's everywhere, easily accessible, predictable," Mr. Simon says.

HOWARD SCHULTZ, now 57, is a tall, sinewy man with a toothy grin and a silky sales pitch. He rarely sticks to script, preferring to speak off the cuff, whatever his audience. In conversations, he leans in, locks eyes and gives the impression that, right now, there is no one else in the world he would rather be talking to. When he speaks of "soul" and "authenticity" and "love," you could almost forget that he runs a multibillion-dollar business that has become an uneasy symbol of globalization. Or that the British actor Rupert Everett once likened Starbucks to a metastasizing cancer.

The story of Mr. Schultz's life and career has been told many times, not least by Mr. Schultz. (His second book, "Onward: How Starbucks Fought for Its Life Without Losing Its Soul," is to be published on March 29.) But some highlights bear repeating:

He grew up poor in the Bay View housing projects in Canarsie, Brooklyn, received a football scholarship to Northern Michigan University and, after a variety of jobs, joined the fledging Starbucks in 1982, as head of marketing. Inspired by Italy's coffee culture, he left Starbucks and opened his own coffee shop. Then, in 1987, he bought Starbucks, which at the time had all of six shops. By 1995, Starbucks had 677 shops. By 2000, it had 3,501, and that year Mr. Schultz stepped aside as C.E.O.

And so it went for Starbucks, one success after another, until the recession hit and exposed the company's overreach to the world.

Whether Starbucks can recapture a neighborhood feel, as Mr. Schultz insists, is anyone's guess. For many people, especially in areas where carefully made, lighter-roast coffee from the likes of Stumptown and Intelligentsia is trendy, Starbucks has become a place to go for free Wi-Fi, or to use the restroom, or to buy a coffee on the go.

Mr. Simon of Temple University says: "When you're selling stuff people don't need, you've got to be selling something else, and that's what Starbucks lost. There's a kind of dissonance between the messaging and the actual practice."

Mr. Schultz no longer plans to blanket the United States with new Starbucks stores, sometimes with multiple locations on one block -- a practice that inspired a contest on Flickr to see how many Starbucks shops people could fit into a single photograph. Instead, like so many other executives, he has his sights on China. Starbucks already has roughly 430 stores in mainland China and plans to have 1,500 there by 2015. India beckons as well. The company also plans to sell a wider variety of drinks and foods in grocery stores and its own shops, like Kind fruit and nut bars, which Starbucks put on the map.

IT may be difficult to believe, but there was a time when McDonald's was a novelty. But, like Ray Kroc, who took over a small hamburger business and built it into the most successful fast food operation in the world, Mr. Schultz has learned that growth can be seductive, and that it can exact a price.

A Changed Starbucks. A Changed C.E.O.
Published: March 12, 2011
Howard Schultz was humbled as Starbucks closed stores in the recession. Now he is thinking more like a manager and less like an entrepreneur.

March 21, 2011

Ten financial ratios

How a CPA would identify financial strength:

Cash to Equity
Quick Ratio
Current Ratio
Overbillings to underbillings

Long Term Debt to Equity
Return on Total Assets
Gross Profit
Contract Revenue to Working Capital
Revenues too Net Worth
Months in Backlog

Which list item is not a financial ratio

March 20, 2011

Remodeling is not heavily financed

WHY THE REBOUND? It may seem counterintuitive that even as the housing market continues to suffer and the economic recovery feels tentative, the renovation market is picking up. But Mr. Baker pointed out that while home sales and construction were linked to mortgage rates, renovations were determined more by income levels and job security.

"Remodeling is not heavily financed," he said. Instead, people are willing to spend cash, Mr. Baker said, because they have "a comfort level that the value of my home isn't depreciating." -- Kermit Baker, director of the remodeling futures program at the Joint Center for Housing Studies.

He said during the peak years of 2006 and 2007, only 30 to 35 percent of renovations were financed through home equity loans or second mortgages. Last year, that number dropped to 15 to 20 percent.

As Remodeling Rebounds, Caveats for the Homeowner
Published: March 18, 2011
Homeowners are edging back into renovations, but having work done means paying attention to some basic safety concerns.

March 19, 2011

Wealthy is more than $7.5 million, middle class is under $1.75 million

Above $1.75 million, the middle class starts turning wealthy.

According to a Fidelity Investments survey of more than 1,000 millionaires (households with at least $1 million in investible assets, excluding retirement accounts and real estate), 42% of respondents say they don't feel wealthy. Keep in mind that while $1 million is the threshold, this group has an average net worth of $3.5 million.

That 42% is slightly better than the 46% who said they didn't feel wealthy in 2009. So the recovery has, at least, made some miserable millionaires a little less miserable.

Those who don't feel wealthy were asked how much money they would need to feel wealthy. Their answer: $7.5 million. (That's the median asset level).

But here's the interesting twist. The 58% of millionaires who did feel wealthy were also asked how much money they had when the began to feel "wealthy." Their answer: $1.75 million.

So millionaires who don't feel wealthy say they would need $7.5 million to feel wealthy, while those who do feel wealthy need only $1.75 million.

-- Robert Frank

March 18, 2011

Pay on the basis of individual performance or group's ? Not individuals. Organize your people into a group.

If you want a person to work harder, you should offer to pay on the basis of individual performance, right? Not usually. A large body of research suggests it's best to motivate groups, not individuals. Organize your people into a group; reward everybody when the group achieves its goals. Susan Helper, Morris Kleiner and Yingchun Wang confirm this insight in a working paper for the National Bureau of Economic Research. They compared compensation schemes in different manufacturing settings and found that group incentive pay and hourly pay motivate workers more effectively than individual incentive pay.

[ Via Books ]

Joachim Huffmeier and Guido Hertel tried to figure out why groups magnify individual performance for a study in the Journal of Experimental Social Psychology. They studied relay swim teams in the 2008 Summer Olympics. They found that swimmers on the first legs of a relay did about as well as they did when swimming in individual events. Swimmers on the later legs outperformed their individual event times. In the heat of a competition, it seems, later swimmers feel indispensible to their team's success and are more motivated than when swimming just for themselves.

Not all groups perform equally well, of course. Researchers led by Thomas W. Malone at the Massachusetts Institute of Technology Sloan School of Management have found they can measure a group's I.Q. This group I.Q. is not well predicted by the median I.Q. of the group members. Measures of motivation didn't predict group performance all that well either.

Instead, the groups that did well had members that were good at reading each other's emotions. They took turns when speaking. Participation in conversation was widely distributed. There was no overbearing leader dominating everything.

Social Science Palooza II
Published: March 17, 2011
A sampling of recent research tries to understand the ties that bind.

March 17, 2011

Scarano's fun with NY zoning

The purpose of zoning is to provide for restrained development. But in Scarano's view, New York City's code was a Talmudic document, open to endless avenues of interpretation. Through a variety of arcane strategies, he could literally pull additional real estate out of the air. In the high-ceilinged warehouses of SoHo and TriBeCa, for instance, an earlier generation of gentrifiers had increased their living space by constructing mezzanines, creating the loft look that so many buyers were now after. "The population of factory buildings was unfortunately being used up," Scarano said. "So what did we do? We created the factory aesthetic in new construction." And he didn't just take the aesthetic -- he also adapted the zoning rules that applied to warehouse conversions. Under certain circumstances, the code classified loft mezzanines as storage space, not floor area, and Scarano assured developers their new building plans could slip through this loophole. Effectively, he said, he could fashion double-decker apartments, in buildings that were four stories for legal purposes and eight stories for marketing.

Scarano scoffs at the notion that any developer, Fischman included, was duped into accepting his designs. Architecture "is not so dissimilar from the accounting profession," he said, dropping all Mondrianic pretense. "When someone goes to their tax accountant . . . they don't tell the fellow to figure out how to not have the most deductions." Everyone was happy until the auditors arrived, and then came recriminations. Over the past few years, numerous developers have sued Scarano, claiming he prepared faulty plans, while he has countersued to recover hundreds of thousands in unpaid fees.

The Supersizer of Brooklyn
Published: March 18, 2011
With a knack for gaming the zoning code, the architect Robert Scarano proudly scored extra square footage for developers -- until his influence became too obvious to ignore.

March 16, 2011

Ability to mask disappointment

Studies of emotional cognition in preschoolers have shown that the ability to mask disappointment is highly correlated with perceived social skill level. "Display rules," that is, accepted social guidelines dictating the expression of emotions, can be seen in use by children as young as three years old--children who don't yet fully understand the difference between authentic and fabricated emotions. Writers, who understand nothing if not the difference between authentic and fabricated emotions, are often shockingly bad at hiding their own disappointments. For example: begin talking about trying the writing life, about applying to MFA programs, and the first thing anyone who has gone through a writing program will tell you is, "Don't expect to get anything out of it." You'll be told that workshop is harsh (or else stupid), that creative writing teaching jobs are a figment of Jane Smiley's imagination, that James Franco is the only person in the country allowed to publish short stories anymore. You'll be assured, essentially, that putting pen to paper is bad business.

On Expectations (And A Writer's Lack Of Same)
by S.J. Culver on March 17th, 2011

March 15, 2011

Startups better suited to San Francisco Bay than New York City

And that's precisely what's wrong with New York: it's filled with hyper-stressed, aggressive, social climbers who are actually kind of effete and helpless at the end of the day, and probably need to outsource their software development, because they're not, like, technical and all that. Except there's one problem....there aren't that many hackers in New York, and the few there are (I know because I used to be one of them) won't leave their $300,000 jobs on Wall Street to work on your hopelessly risky idea.

-- Antonio

Counterpoint: UK expat Paul Carr. bring the meh

March 14, 2011

Our interest is voyeuristic -- Nick Denton

"It's helpful when someone is a hypocrite, but we should have just said that our interest is voyeuristic. 'We did this story because we thought you would like it. We thought it was funny, so we thought you'd think it was funny, too.' And there was a tidal wave of traffic and attention."

-- Nick Denton at Gawker HQ on Elizabeth Street in Lower Manhattan early this year.

Richard Hofstader's seminal works about unreason and misinformation in American public affairs, The Paranoid Style in American Politics and Anti-Intellectualism in American Life, appeared in the early 1960s and were hardly respectful of the journalism of that time.

March 13, 2011

Slacktivist credit scoring and unemployment

MSN Money's Liz Pulliam Weston says a survey of HR managers found the use of credit-checks in hiring had increased from 25 percent in 1998 to 43 percent in 2006. Weston also describes the elegantly nasty conundrum this creates for those who lost their jobs in the global financial crisis:

Many Americans these days are discovering the Catch-22 of unemployment. And that is: You might fall behind on your bills because you've lost your job, and you might not be able to land a new job because you've fallen behind on your bills.


The credit agencies claim that this service they're selling of credit-checks on job applicants can reduce employee fraud and workplace violence.

Asked to provide evidence of this claim, they repeat the assertion in a much louder voice and remind us that fraud and workplace violence are undesirable.

Which is to say they have no evidence for this claim and that there is no evidence for this claim. It's just something that Transunion, Equifax and Experian hope that their corporate clients will come to believe if they repeat it often enough.

Andrew Martin of The New York Times pursued this point back in April, producing a dark comedy of twisting evasions from representatives of the credit agencies. (See: "As a Hiring Filter, Credit Checks Draw Questions.")

So why, then, is something cruel, self-defeating and broadly destructive becoming more widespread?

A big reason, I suspect, is the foolishness I was mocking in the previous post that leads many to prefer the misplaced concreteness of quantitative measures -- evenly patently absurd and arbitrary ones -- over qualitative judgments.

Judgment also requires one to take responsibility for one's decisions -- and here we come to what seems to be the primary selling-point for the credit agencies.

"Every time you hire a new employee, you put a lot on the line," an Experian brochure reads. "The wrong decision could jeopardize your firm's assets, reputation or security."

That sales pitch has nothing to do with any actual risk to a firm's "assets, reputation or security." It has everything to do with shielding clients from blame for hiring decisions that don't work out well. This is really what they're selling -- an insurance policy against blame for hiring the wrong employee, a way to deflect and avoid responsibility.

(If I'm right about that, then the survey Liz Pulliam Weston cited would indicate that in 2006, 46 percent of American Human Resource managers were lazy, timid, indecisive, irresponsible and desperate to deflect blame. Hmmm. That sounds a little low.)

Hawaii and Washington state prohibit the use of credit scoring in employment decisions. Similar bans were proposed recently in California, Maryland and Connecticut, prompting aggressive lobbying from the credit agencies to protect their little racket.

See also:

Business: As a Hiring Filter, Credit Checks Draw Questions
Published: April 9, 2010
Opponents said there was no evidence that people with weak credit are more likely to be bad employees.

March 12, 2011

Own your reputation on line

The narrow focus on privacy as a form of control misses what really worries people on the Internet today. What people seem to want is not simply control over their privacy settings; they want control over their online reputations. But the idea that any of us can control our reputations is, of course, an unrealistic fantasy. The truth is we can't possibly control what others say or know or think about us in a world of Facebook and Google, nor can we realistically demand that others give us the deference and respect to which we think we're entitled. On the Internet, it turns out, we're not entitled to demand any particular respect at all, and if others don't have the empathy necessary to forgive our missteps, or the attention spans necessary to judge us in context, there's nothing we can do about it.

The Web Means the End of Forgetting

Published: July 21, 2010
The digital age is facing its first existential crisis: the impossibility of erasing your posted past and moving on.

March 9, 2011

Property tax levied by the village on a typical Bronxville home is now $43,000 annually. Upper middle class ?

The property tax levied by the village on a typical Bronxville home is now $43,000, up 34 percent in the last five years, although the increase was negligible in the last two years as the mayor, the village trustees and school board members responded to their middle class constituents' concerns.

"I don't think we have seen an antitax uprising, but holding down property taxes is certainly spoken about a lot," said Dr. James D. Hudson, the 54-year-old school board president, a dentist with two children in the high school. He is often buttonholed on the subject, he said, at cocktail and dinner parties or while shopping.

"Their concern is that their taxes will continue to spiral up if we continue to do business as usual," said Dr. Hudson. "If you will, we are looking to develop a lean, mean education machine."

Lean and mean were rarely invoked in the past as a goal for America's wealthiest suburbs -- nearby Scarsdale, for example, Shaker Heights on the outskirts of Cleveland, Brookfield and River Hills near Milwaukee, and Greenwood Village in Colorado. Now that talk is commonplace, and it showed up in interviews with officials and in these communities, where property taxes have often risen by 4 or 5 percent a year.

In Bronxville, 86 percent of the typical $43,000 property tax levied by the village goes to the school system, particularly to educate the growing grade school population. For the parents of these children -- moving here in many cases from New York City -- $43,000 is less than they would spend to put two or three children in a private school.

Adding to the pressure, younger couples, including the Pulkkinens, are buying their homes from empty-nesters, who often sell to escape the rising tax burden. Mary C. Marvin, the mayor, says this exodus is accelerating.

For decades, she noted, many older people remained in their homes after their children were grown. In a village covering one square mile, with a static population of 6,400 people, the elderly once constituted nearly 20 percent, but that proportion is steadily dropping. Most important, these empty-nesters paid substantial property taxes without swelling the school population.

"You want the taxes to be something these older people can pay," said Mayor Marvin, 56, who is married to a lawyer and whose full-time position is unpaid, "because when they sell, they sell to families with children, and the children cost more to educate than the taxes their parents pay."

The eldest McBride is a former village trustee, a former governor of the local hospital and an elder in the Reformed Church. All this holds the couple in Bronxville. But their property taxes of $50,000 a year just to the village, and $10,000 more to the broader township, concern them.

"The tax burden is significant enough," Mr. McBride said, "that if it took a jump in the next couple of years, I would probably feel forced to move."

He doesn't fault Mayor Marvin or Dr. Quattrone who, in his view, have managed costs well. Instead, like Mr. Pulkkinen, Mr. McBride directs his ire at teacher compensation and at the teachers' union, the Bronxville Teachers' Association.

Until the teachers agreed to a partial wage freeze for the current school year, their pay had been rising at 3 to 3.5 percent a year. A typical teacher with a master's degree and 30 years of service makes nearly $118,000 today. That teacher is entitled to retire with an $80,000 state pension, or 67.5 percent of his or her final salary.

In a Wealthy Suburb, Concern Over School Taxes
Published: March 8, 2011
Even in Bronxville, N.Y., where typical income is high, a look at the property tax trajectory has residents worried.

[ Via ]

March 7, 2011

Mortgage market post Fannie/Freddie

The phase-out proposal also calls for a more limited role for the Federal Housing Administration, the insurer of low-down-payment mortgages that have grown popular among first-time buyers and those with weak credit or low income. It suggests raising the minimum down payment to 10 percent from 3.5 percent, and imposing that 10 percent minimum for Fannie and Freddie loans. F.H.A. is raising the mortgage insurance premium already -- it is set to increase next month, to 1.1 or 1.15 percent of the loan amount for 30-year fixed-rate loans. The agency was considering a jump to 2.25 percent.

The proposal also calls for lowering the size of loans that Fannie Mae and Freddie Mac can insure; the limit, for loans in high-cost areas, is already set to drop, on Oct. 1, to $625,500 from $729,750. Larger, "jumbo" loans typically carry higher rates.

Hey, S.E.C., That Escape Hatch Is Still Open
Published: March 5, 2011
Although the S.E.C. calls itself "the investor's advocate," it's still not enforcing a rule governing credit ratings agencies.

A Plan to Phase Out Fannie Mae and Freddie Mac
Published: March 3, 2011
A government proposal is currently in draft form, but industry experts say it will most likely affect borrowers even before it is finalized.

March 6, 2011

Georgia's anti-predatory-lending law: issuers and investors in mortgage pools held liable for abusive loans.

Back in 2003, for example, Georgia's legislature enacted one of the toughest predatory-lending laws in the nation. Part of the law allowed issuers of and investors in mortgage pools to be held liable if the loans were found to be abusive. Shortly after that law went into effect, the ratings agencies refused to rate mortgage securities containing Georgia loans because of this potential liability. The law was soon rewritten to eliminate the liability, allowing predatory lending to flourish.

Hey, S.E.C., That Escape Hatch Is Still Open
Published: March 5, 2011
Although the S.E.C. calls itself "the investor's advocate," it's still not enforcing a rule governing credit ratings agencies.

March 5, 2011

Dogmatic disputes, not deep philosophical and political differences

The Post referred to disputes among policymakers on how best to structure regulation of the financial sector told readers that:
"there are also deep philosophical and political differences as to what the government should do to prevent future crises."

The people who are making the decisions about regulating the financial sector are politicians. They get and keep their jobs by appealing to powerful interest groups who can finance election campaigns. Few, if any, of these people are known for their contributions to political philosophy. There is no obvious reason to believe that philosophy is a major factor in determining their approach to this issue and the Post certainly does not give us one.

-- Dean Barker on argument.

March 4, 2011

Charter School Logic

Most education researchers, though, recognize that Rhee's simple vision of heroic teachers saving American education is a fantasy, and that her dramatic, often authoritarian, style is ill-suited for education. If the ability to fire bad teachers and pay great teachers more were the key missing ingredient in education reform, why haven't charter schools, 88% of which are nonunionized and have that flexibility, lit the education world on fire? Why did the nation's most comprehensive study of charter schools, conducted by Stanford University researchers and sponsored by pro-charter foundations, conclude that charters outperformed regular public schools only 17 percent of the time, and actually did significantly worse 37 percent of the time? Why don't Southern states, which have weak teachers' unions, or none at all, outperform other parts of the country? Rhee often noted that poor blacks in New York are two years ahead of poor blacks in Washington, which properly illustrates that demography is not destiny, but New York didn't get ahead by firing bad teachers. Chancellor Joel Klein terminated only three teachers for incompetence between 2008 and 2010.

The press--including Whitmire, a former USA Today editorial writer--has a fundamental misunderstanding of unions. Whitmire writes that Rhee's proposal to weaken tenure protections and pay great teachers more "represented an existential challenge" to the American Federation of Teachers (AFT). "If the union couldn't protect their members' jobs, what was the point of having a union?" In fact, teachers' unions were created to do lots of things: lobby for more funding for public education, increase teacher salaries, reduce class size, improve the ability of teachers to discipline students, and fight private-school-voucher initiatives.

-- Slate

March 3, 2011

Share your web history ?

Dscover.me, Sitesimon.com and Voyurl.com is banking on our willingness to take that next step toward taking our lives public: namely, by automatically tracking personal browsing histories for public viewing.

All that sharing can open up new and tricky fields of interplay in relationships. Mina Tsay, a communications professor at Boston University who studies the psychological and social effects of media, said that in her studies of Facebook she found that frequent users saw the world as significantly more public than less-frequent users did -- a source of misunderstanding familiar to many social media users.

¶ Privacy notwithstanding, Dr. Tsay said social media's evolution might create more-passive consumers of information: people too reliant on others to decide what's interesting, stylish or valuable.

¶ "In some ways, this might produce a society in which we end up conforming to buying the same products, seeing the same information, going on the same trip, depending on the same sources," she said.

The Footprints of Web Feet
Published: March 4, 2011
A new generation of Web sites automatically tracks personal browsing histories for public viewing.