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March 31, 2013

Cossacks are not police

"They join the Cossacks, but then they behave like nationalists," he said. "They have support from the region, from Moscow. They feel they can do anything they want, that tomorrow they will have protection."

Indeed, the Cossacks who set out to patrol Stavropol on a recent night felt that they were part of a rising tide. Andrei Kovtun, 29, recalled the ribbing he got from his former colleagues in law enforcement when he first patrolled with the Cossacks, who do not have the right to demand documents, carry weapons or detain people.

Still, on one of his early calls -- separating two groups of brawling men -- he understood that a Cossack's presence had a psychological effect. "Are you a cop?" someone asked him, and when he answered, the room went quiet. Mr. Kovtun understood why: Policemen are bound by the law.

Historians still argue about who the Cossacks were -- descendants of escaped serfs or Tatar warriors, an ethnic group in their own right or a caste of horsemen. They played a crucial role in colonizing the south for the Russian empire, and later turned on peasant and worker uprisings, defending the czar.

The Bolsheviks nearly obliterated them, deporting tens of thousands in a process they called "de-Cossackization," but the image of the Cossack, wild and free, was a permanent part of the Russian imagination.

When Tolstoy sat down to write his classic novel "The Cossacks," he set it near present-day Stavropol, where the Terek River divided the Muslim-populated mountains from the steppes, which were Cossack country. In a scene taught to generations of schoolchildren, a young Cossack spots a Chechen swimming across the Terek disguised as a log and shoots him.

The notion of an ethnic dividing line is widely accepted to this day, but it is running up against demography. Muslim ethnic groups in the Caucasus have a high birthrate, and Russians are abandoning the steppe. About 81 percent of Stavropol's population is ethnic Russian, but that share has been shrinking for decades, the International Crisis Group has reported.

This rapid change is unsettling to ethnic Russians in Stavropol, who sometimes refer to the newcomers as "shepherds." Gennady A. Ganopenko, 42, said he grew up in a city so homogeneous that "the sound of a non-Russian language was grounds for a brawl."

"Earlier, this was the gate to the Caucasus," he said. "We opened the gate, and then the gate came off the hinges."

The Cossack revival seeks to slow this trend. Last summer, Aleksandr N. Tkachev, the governor of the Krasnodar region, to the west, took aim at his neighbors in the Stavropol region, saying so many Muslims had resettled there that Russians no longer felt at home. The region, he said, no longer served its traditional function as an ethnic "filter."

To crack down on illegal migration, he announced the creation of a salaried force of 1,000 Cossack patrolmen, which -- he explained in a speech to law enforcement officers -- would not be restrained by the law as the police are. He put it this way: "What you cannot do, a Cossack can."

March 30, 2013

MBS workers were personly long housing in 2006: did not expect problems in the wider housing market. Certain groups of securitization agents particularly aggressive in exposure to housing

New research suggests that financial workers involved in the mortgage-securitization business -- ground zero for the misaligned incentives that are supposed to have helped inflate the bubble -- were true believers in the housing boom.

In 2006, there were 1,760 registered attendees at the American Securitization Forum's conference in Las Vegas -- the major annual confab for the securitization industry. Screening out people who didn't work in mortgages, and making sure to oversample firms that worked at large financial institutions, as well as institutions that played a prominent role in the financial crisis, like Lehman Brothers, economists Wei Xiong at Princeton and Sahil Raina and Ing-Haw Cheng at the University of Michigan's Ross School of Business came up with a list of 400 mortgage-securitization professionals.

These were basically midlevel managers -- the people directly involved in the slicing and dicing of mortgage loans into the myriad of mortgage securities that institutional investors were lapping up during the boom years.

Using the LexisNexis database of legal documents, the economists collected data on all the properties the people on their list ever owned, including location, time of sale and price. They then created two control groups to repeat the exercise with. The first was a list of equity analysts who worked for a similar set of finance firms as the securitization workers, and who didn't cover housing companies. The second was a list of lawyers who didn't work in real estate law -- a wealthy group that reflects how people outside of finance behaved during the bubble.

The economists found that the securitization workers showed no awareness that housing was about to become undone. To the contrary, during the peak of the bubble, they were far more apt to swap into more expensive homes and buy second homes than the control groups were. And workers at firms like Bear Stearns and Lehman Brothers were among the most aggressive with their own home purchases.

To the argument that the aggressive home purchases of securitization agents might have reflected the higher bonuses they received during the boom years relative to, say, the equity analysts in the control group, Mr. Xiong points out that if were true, if they had any sense that their future income was at risk they would have plowed their money into something other than houses. Indeed, after the housing bust came, the securitization agents were far more likely to put their houses back on the market than the control groups, which suggests they were getting forced into sales.

The upshot, says Mr. Xiong: "These guys might have had bad incentives, but there's no sense they knew about the bubble."

March 29, 2013

Marissa Mayers' Nine Points

Marissa Mayers' nine points

# Ideas come from everywhere
# Share everything you can
# You're brilliant we're hiring
# A license to pursue dreams
# Innovation not instant perfection
# Data is a-political
# Creativity loves constraint.
# Don't Kill Projects, Morph them
# Users not money



March 28, 2013

Unlocking the Value of Personal Data: From Collection to Usage

The World Economic Forum published a report late last month that offered one path -- one that leans heavily on technology to protect privacy. The report grew out of a series of workshops on privacy held over the last year, sponsored by the forum and attended by government officials and privacy advocates, as well as business executives. The corporate members, more than others, shaped the final document.

The report, "Unlocking the Value of Personal Data: From Collection to Usage," recommends a major shift in the focus of regulation toward restricting the use of data. Curbs on the use of personal data, combined with new technological options, can give individuals control of their own information, according to the report, while permitting important data assets to flow relatively freely.

"There's no bad data, only bad uses of data," says Craig Mundie, a senior adviser at Microsoft, who worked on the position paper.

The report contains echoes of earlier times. The Fair Credit Reporting Act, passed in 1970, was the main response to the mainframe privacy challenge. The law permitted the collection of personal financial information by the credit bureaus, but restricted its use mainly to three areas: credit, insurance and employment.

Dr. Alex Pentland, a computational social scientist and director of the Human Dynamics Lab at the M.I.T. is also collaborating with law experts, like Scott L. David of the University of Washington, to develop innovative contract rules for handling and exchanging data that insures privacy and security and minimizes risk.

March 27, 2013

Clean as I've been

In the flowering of modernism between the end of the First World War and the beginning of the Second, architects forged a stainless-steel connection between housing and health. Victorian homes were a nightmare to them, a cesspit at any level of society: they were dark and stuffy; they were filled with carpets and hangings and ornate picture frames that harbored dirt and were difficult to clean; their primitive plumbing made it hard to bathe.

See Light, Air and Openness: Modern Architecture Between the Wars
By Paul Overy, reviewed by Edwin Heathcote.

The early modernists wanted to wash away this squalor with an ocean of shining chrome, tile and white plaster. Dirt-hoarding fabrics with grime-concealing patterns would be consigned to the efficient rubbish chutes. Furniture would be made from wipe-clean leather and steel. Generous windows and electric light would expose every speck of dirt. In "Light, Air and Openness," the architectural historian Paul Overy showed how the early modernists were obsessed with healthful living and influenced by the design of sanitariums.

The better home would lead to better people. Love of purity, in the words of the Swiss architect Le Corbusier, "leads to the joy of life: the pursuit of perfection." He was far from the first to tie minimalist hygiene in the home to moral purity. Adolf Loos famously connected decoration with degeneracy in his 1908 essay "Ornament and Crime." A person's soul could be cleansed only when his domestic surroundings were purged: "Soon the streets of the town will shine like white walls. ... Then fulfillment shall be ours."

Minimalism had a short life. Its asceticism was at odds with the rising consumer spending of the latter half of the 20th century. Designers started to preach comfort. Throw pillows, bold patterns and misshapen crockery crept in; Eames-style dressers were offset by quirky antiques and kitsch curios. Psychological studies showed the beneficial effects of color in the environment, so the white was painted over. The icy prose of the modernists was replaced by the warmth of Terence Conran's "House Book" and Martha Stewart Living.

But the new guard shared something with the minimalist: the home was still meant to improve its inhabitant. What had changed was the emphasis -- the intended result was a peaceful mind instead of a healthy body.

This, too, sounds perfectly reasonable. It becomes a problem when it becomes a mania -- when the state of your mind is considered contingent on the state of your home. Particularly Jesuitical in this respect is the Swedish flat-pack furniture and meatball giant Ikea. Its "Chuck Out Your Chintz" campaign of the '90s was an urge to purge unseen since the likes of Le Corbusier. A more recent slogan was "Happy Inside": brighten up or clear out the home and soothe the soul.

Ikea is not alone. Modernist determinism -- the idea that our lives can be perfected by perfecting our environments -- lives on in the rhetoric of a thousand marketing departments. It is backed by television's pop psychology, where the mental health of hoarders is restored by de-cluttering. Doing something about our surroundings has become a surrogate for therapy.

Of course one's home can be a source of happiness. But if we imagine that its primary role is to make us happy, we could end up believing that if we are unhappy, our home is primarily to blame. The marketers prefer it this way, because they have a solution: whatever it is they're selling. But home improvement can just as easily be a displacement activity, a distraction from underlying problems unrelated to d├ęcor. I like to remember the architect Cedric Price. Confronted by a client who wanted to turn his life around with a new house, Mr. Price suggested that what he really needed was a divorce.

-- Will Wiles

See also: Lifehacker minimalize and de-clutter.

March 26, 2013

Caffeine May Boost Driver Safety

The researchers interviewed all the drivers, gathering information about various health and lifestyle issues, including caffeine consumption over the past month. The study was published online in BMJ.

After adjusting for age, driver experience, distance driven, hours of sleep, naps, night driving and other factors, they found that drivers who consumed caffeine were 63 percent less likely to be involved in a crash.

Results Forty three percent of drivers reported consuming substances containing caffeine, such as tea, coffee, caffeine tablets, or energy drinks for the express purpose of staying awake. Only 3% reported using illegal stimulants such as amphetamine ("speed"); 3,4 methylenedioxymethamphetamine (ecstasy); and cocaine. After adjustment for potential confounders, drivers who consumed caffeinated substances for this purpose had a 63% reduced likelihood of crashing (odds ratio 0.37, 95% confidence interval 0.27 to 0.50) compared with drivers who did not take caffeinated substances.

According to the lead author, Lisa N. Sharwood, a research fellow at the George Institute for Global Health in Sydney, Australia, this does not mean that caffeinated drinks are the answer for road safety.

Censored data alert:

By excluding those who were involved in the most serious crashes, one misses the possibility that caffeine use might not be associated positively and might, in fact, be associated negatively, or that, while being associated positively in terms of the number of crashes, is associated negatively with the seriousness of crashes.

From the report: "Potential case participants were excluded if there was a fatality associated with the crash, the driver of the commercial vehicle was seriously injured (defined as being admitted to hospital for two weeks or more or losing consciousness as a consequence of the crash),...."

Use of caffeinated substances and risk of crashes in long distance drivers of commercial vehicles: case-control study
BMJ 2013; 346 doi: http://dx.doi.org/10.1136/bmj.f1140 (Published 19 March 2013)
Cite this as: BMJ 2013;346:f1140

March 25, 2013

Bank accounts big and small

Michael Poulos of Oliver Wyman, a consultancy, says that "before the crisis, almost every bank account made money. Big accounts made money on the spread, and small accounts made money on incident fees. You made money on all the accounts with interchange fees. All of that is either severely curtailed or completely gone." Oliver Wyman reckons that US banks now lose money on 37% of consumer accounts.

For those concerned that their low net worth bars them from the banking system, there are two reasons for hope. The first is that lenders and credit bureaus are starting to use a broader range of data to determine the creditworthiness of prospective borrowers. Many of the unbanked have no credit histories. But data from rent, mobile-phone and utility bills give lenders a way to find lower-risk borrowers.

The second reason for optimism is an increasingly competitive market in pre-paid cards. Once simply reloadable proxies for cash, many of these cards now offer much the same features as bank accounts.

March 24, 2013

Kotkin vs Florida

Among the most pervasive, and arguably pernicious, notions of the past decade has been that the "creative class" of the skilled, educated and hip would remake and revive American cities. The idea, packaged and peddled by consultant Richard Florida, had been that unlike spending public money to court Wall Street fat cats, corporate executives or other traditional elites, paying to appeal to the creative would truly trickle down, generating a widespread urban revival.

-- Joel Kotkin

Florida himself, in his role as an editor at The Atlantic, admitted last month what his critics, including myself, have said for a decade: that the benefits of appealing to the creative class accrue largely to its members--and do little to make anyone else any better off. The rewards of the "creative class" strategy, he notes, "flow disproportionately to more highly-skilled knowledge, professional and creative workers," since the wage increases that blue-collar and lower-skilled workers see "disappear when their higher housing costs are taken into account." His reasonable and fairly brave, if belated, takeaway: "On close inspection, talent clustering provides little in the way of trickle-down benefits."

Yes: Boulder and Raleigh-Durham and Fairfax County

No: Cleveland, Toledo, Hartford, Rochester, and Elmira, New York.

Perhaps the best that can be said about the creative-class idea is that it follows a real, if overhyped, phenomenon: the movement of young, largely single, childless and sometimes gay people into urban neighborhoods. This Soho-ization--the transformation of older, often industrial urban areas into hip enclaves--is evident in scores of cities. It can legitimately can be credited for boosting real estate values from Williamsburg, Brooklyn, Wicker Park in Chicago and Belltown in Seattle to Portland's Pearl District as well as much of San Francisco.

Empathy or Concern Troll ?

in many ways the Floridian focus on industries like entertainment, software, and social media creates a distorted set of economic priorities. The creatives, after all, generally don't work in factories or warehouses. So why assist these industries? Instead the trend is to declare good-paying blue collar professions a product of the past. If you can't find work in deindustrialized Michigan, suggests Salon's Ray Fisman, one can collect " more than a few crumbs" by joining the service class and serving food, cutting hair or grass in creative capitals like San Francisco or Austin.

These limitations of the "hip cool" strategy to drive broad-based economic growth have been evident for years. Conservative critics, such as the Manhattan Institute's Steve Malanga have pointed out that many creative-class havens often underperform economically compared to their less hip counterparts. More liberal academic analysts have denounced the idea as " exacerbating inequality and exclusion." One particularly sharp critic, the University of British Columbia's Jamie Peck see it as little more than a neo-liberal recipe of "biscotti and circuses."

Urban thinker Aaron Renn puts it in political terms: "the creative class doesn't have much in the way of coattails."

March 23, 2013

Brooklynites, priced out of Williamsburg, Boerum Hill, Carroll Gardens and Park Slope, are heading farther in. They are turning to neighborhoods like Sunset Park, Crown Heights, Bushwick and Prospect-Lefferts Gardens,

Many Brooklynites, priced out of Williamsburg, Boerum Hill, Carroll Gardens and Park Slope, are heading farther in. They are turning to neighborhoods like Sunset Park, Crown Heights, Bushwick and Prospect-Lefferts Gardens, bringing a willingness and an ability to pay more for housing than the waves of residents who came before them.

"What many clients have told me is that they like the old Brooklyn vibe of these up-and-coming areas," said Kristen Larkin, an agent with TOWN Residential. "They like the sense of community, friendliness of the neighbors, and the mom-and-pop shops that come along with it.

Brokers and developers say the cross-Brooklyn migration has picked up in recent years, as recent college graduates, artists and families, mostly white, seek new affordable neighborhoods. The median real estate price for Boerum Hill ($675,000), Carroll Gardens ($677,500) and Cobble Hill ($750,000), once viewed as out-of-the-way destinations for renters and homeowners unable to afford Manhattan, now rivals those in the northern reaches of the Upper East and West Sides and parts of Lower Manhattan, according to Streeteasy.com.

Park Slope reached a new median high of $670,500 last year. The median price in 2012 in prime sections of Williamsburg, including its waterfront, was $765,000, which outpaced even Manhattan destinations like the Gramercy Park area, where the median was $725,000 for the same period.

Housing prices in neighborhoods deeper inside Brooklyn are even competing with or surpassing real estate in solidly middle-class areas of Westchester County, Long Island and northern New Jersey, according to Trulia.com.

March 21, 2013

Automated search and automated commerce begat algorithmic schlock ?

Having found its golden meme, Solid Gold Bomb wrote a computer script to churn out hundreds of T-shirt designs riffing on the phrase -- "Keep Calm and Dream On" to "Keep Calm and Dance Off." In theory, Solid Gold Bomb could be selling billions of them, for they only become "real" once an order is made. It's the infinite monkey theorem, applied to products: with time, the algorithms would produce a T-shirt someone wants.

Amazon does not vet such items, and Solid Gold Bomb is too solid to care. The advent of 3D printing will create an explosion in such phantom products.

Books got there first: Amazon brims with algorithmically produced "literature." Philip M. Parker, a marketing professor, must be the most productive, erudite writer in history: Amazon lists him as author of more than 100,000 books. His secret? An algorithm to generate page-turners like "Webster's Estonian to English Crossword Puzzles" and "The 2007-2012 Outlook for Premoistened Towelettes and Baby Wipes in Greater China" ("The moist towelette is an essential part of the lunchbox, and with the new global economy, this volume is essential," reads its only review). Some of these books might be useful, but much of algorithmic literature exists for one reason: to swindle unsuspecting customers.

When the former Wired editor Chris Anderson wrote of "the long tail" -- the idea that, thanks to the Internet, companies can look beyond blockbusters and make money on obscure products -- he never warned us it would be so long and so ugly. Somehow, well-crafted niche products have surrendered to algorithmic schlock.


-- Evgeny Morozov

But while algorithms, 3D printers and Web stores have solved the supply problem, demand-side uncertainties remain. If there are, indeed, psychopaths who want a "Keep Calm and Rape a Lot" T-shirt, how do they find it? Or, rather, how does it find them? Whoever matches existing weirdos with nonexisting weird trinkets could be the next Google.

Or could that dubious honor go to Google itself? Organizing the world's information was just prelude to a far more important goal: becoming a universal shopping gateway. Last week's news that it will introduce Shopping Express, a same-day delivery service to contend with Amazon, confirms the obvious: shopping is essential to Google's future. By analyzing our information streams, it can predict what purchases make us happy, and remind us to keep shopping. It already underpins the Google's most intriguing smartphone app, Field Trip.

March 20, 2013

Capital gains cost basis, first in first out (FIFO), and the IRS

The method you choose can have a pretty drastic impact on your tax bill, at least in some cases. Let's say you bought $1,000 of Bank of America stock, or about 62 shares, back in August 1980 (the company was then known as Nations Bank). And assume you reinvested all dividends back into the same stock. Now, 13 years later, your stock holdings are worth about $19,000. If you sold $10,000 of the stock earlier this week, or about 830 shares, you would have the option of generating a giant gain, or a big loss, all depending on what method you use. For instance, if you sold the oldest shares first, you would log a capital gain of more than $7,100. But if you sold the newest shares first, you could post a loss of more than $14,000, according to calculations by NetBasis, the unit of NetWorth Services that provides cost basis calculations for investors.

If you don't pick a specific method, most brokerage firms will revert to their default, whereby they sell your oldest shares first, known as first in first out, or FIFO. (This applies to stocks and exchange-traded funds. For mutual funds, the default method is a bit different; they use the average cost of the shares held.)

"When people buy stock over time, FIFO may not be the best option," said Thomas B. Cooke, a tax and business law professor at Georgetown University's McDonough School of Business. "That makes it very incumbent on investors when they get their confirmation statement to make sure the right stock was sold."

You can choose from several different methods: You can sell the newest lots first, for instance, or you can unload the highest- or lowest-cost shares first. Or, your brokerage firm may have a tool to help you decide. At Schwab, for instance, a tax lot optimizer will choose the lots that let you take losses first. (Of course, if you are selling all of your stock, choosing a method is a moot point.)

March 19, 2013

13 - 8 = 8 ?

Correction: March 15, 2013

An earlier version of this article misstated the length of time that the developers of 56 Leonard and 150 Charles waited to begin work on their buildings after the Lehman Brothers crash in 2008. It was four years, not eight.

A Few Signs of Spring Downtown
Two new condos report robust sales, just months after a storm left the area in tatters

13 - 8 = 8 ?

March 18, 2013

Real Estate title insurance: competitive ?

Title insurance rates vary considerably by state. In New York, insurers belong to a rating bureau that submits a rate schedule for state approval. Depending on the value of the property, costs can easily run into the thousands. On a $500,000 home with a $400,000 mortgage, for example, the premium in the New York City area would be $2,666, according to Rafael Castellanos, the managing partner of Expert Title Insurance Agency in Manhattan. "It's a bargain in the end given the protection title insurance provides," he said.

Yet for years, a debate has raged as to whether premiums are too high, competition too constrained, and the insurers too closely intertwined with the mortgage and real estate professionals who send business their way. Some states have looked into the arrangements between title insurers and referral sources, including New York. In 2006, two title insurers that account for half the New York market -- the Fidelity National Title Group and First American -- agreed to 15 percent rate reductions to settle state allegations of illegal referral payments and rebates.

One insurer is offering a more transparent option. Entitle Direct in Stamford, Conn., offers premium rates up to 35 percent below the going rates in the 40 states in which it operates. (These rates are not available in New Jersey.) According to the company's founder, Timothy M. Dwyer, Entitle is able to offer reduced rates by marketing directly to consumers and eliminating the use of title agents, who typically receive a hefty split of the insurance premium for their services. "The national average commission is 80 percent of the premium," he said. "We do not have that expense. We contract out to a third-party partner that provides us with the title search product."

Founded in 2009, the company has grown slowly. Entitle's sales account for only 0.1 percent of the total national premium, said Birny Birnbaum, the executive director of the Center for Economic Justice, a consumer advocacy group. He attributed the slow growth to "the limited price competition in title insurance markets and the strength of the institutional arrangements between title insurers and those able to steer title business -- lenders, developers, Realtors, builders."

In Connecticut, where only lawyers can act as title insurance agents, "very few attorneys will close with Entitle, or sell very hard against it, because they're not making the premium," said Scott Penner, a lawyer in Milford. "Or they will increase their attorney fee, and that offsets the savings."

March 17, 2013

Afirmative action 2

WHAT'S more important to how your life turns out: the prestige of the school you attend or how much you learn while you're there? Does the answer to this question change if you are the recipient of affirmative action?

From school admissions to hiring, affirmative action policies attempt to compensate for this country's brutal history of racial discrimination by giving some minority applicants a leg up. This spring the Supreme Court will decide the latest affirmative action case, weighing in on the issue for the first time in 10 years.

Scholars began referring to this theory as "mismatch." It's the idea that affirmative action can harm those it's supposed to help by placing them at schools in which they fall below the median level of ability and therefore have a tough time. As a consequence, the argument goes, these students suffer learningwise and, later, careerwise. To be clear, mismatch theory does not allege that minority students should not attend elite universities. Far from it. But it does say that students -- minority or otherwise -- do not automatically benefit from attending a school that they enter with academic qualifications well below the median level of their classmates.

Data presented a plausible opportunity to gauge mismatch. The fact that 689 black students got into their first-choice law school meant that all 689 were similar in at least that one regard (though possibly dissimilar in many other ways). If mismatch theory held any water, then the 177 students who voluntarily opted for their second-choice school -- and were therefore theoretically better "matched" -- could be expected, on average, to have better outcomes on the bar exam than their peers who chose the more elite school. Mr. Sander's analysis of the B.P.S. data found that 21 percent of the black students who went to their second-choice schools failed the bar on their first attempt, compared with 34 percent of those who went to their first choice.

The experiment is far from ideal. Mismatch opponents argue that there are many unobservable differences between second-choice and first-choice students and that those differences, because they're unknown, cannot be accounted for in a formula. In the case of the B.P.S. data, maybe the second-choice students tended to have undergraduate majors that made them particularly well suited to flourish in the classroom and on the bar, regardless of which law school they attended. "All this work on mismatch assumes you know enough to write an algebraic expression that captures what's really going on," says Richard A. Berk, a professor of criminology and statistics at the University of Pennsylvania. "Here, there's so much we don't know. Besides, the LSAT is a very imperfect measure of performance in law school and thereafter, as is the bar exam."

Daniel E. Ho, a law professor at Stanford, also disputes the mismatch hypothesis. In a response to Mr. Sander's 2005 law review article, Mr. Ho wrote in the Yale Law Journal that "black law students who are similarly qualified when applying to law school perform equally well on the bar irrespective of what tier school they attend."

Scholars have been looking more closely at how affirmative action works in practice. Based on how they interpret the data that have been collected, some of these scholars have come to believe that affirmative action doesn't always help the students it's supposed to. Why? Because some minority students who get into a top school with the help of affirmative action might actually be better served by attending a less elite institution to which they could gain admission with less of a boost or no boost at all.

The idea that affirmative action might harm its intended beneficiaries was suggested as early as the 1960s, when affirmative action, a phrase introduced by the Kennedy administration, began to take hold as government and corporate policy. One long-simmering objection to affirmative action was articulated publicly by Clarence Thomas years before he joined the Supreme Court in 1991. Mr. Thomas, who has opposed affirmative action even while conceding that he benefited from it, told a reporter for The New York Times in 1982 that affirmative action placed students in programs above their abilities. Mr. Thomas, who was then the 34-year-old chairman of the Equal Employment Opportunity Commission, didn't deny the crisis in minority employment. But he blamed a failed education system rather than discrimination in admissions. "I watched the operation of such affirmative action policies when I was in college," he said, "and I watched the destruction of many kids as a result."

Scholars began referring to this theory as "mismatch." It's the idea that affirmative action can harm those it's supposed to help by placing them at schools in which they fall below the median level of ability and therefore have a tough time. As a consequence, the argument goes, these students suffer learningwise and, later, careerwise. To be clear, mismatch theory does not allege that minority students should not attend elite universities. Far from it. But it does say that students -- minority or otherwise -- do not automatically benefit from attending a school that they enter with academic qualifications well below the median level of their classmates.

The mismatch theory, if true, would affect many kids. According to a 2009 book, "No Longer Separate, Not Yet Equal: Race and Class in Elite College Admission and Campus Life," by Thomas J. Espenshade and Alexandria Walton Radford, a black student with an otherwise similar application to a white student receives the equivalent of a 310-point bump in SAT scores.

Mismatch theory attracted little attention until 2005, when a law professor at U.C.L.A., Richard H. Sander, published a provocative article in the Stanford Law Review, which focused on how affirmative action affected law students. Mr. Sander claimed that "a student who gains special admission to a more elite school on partly nonacademic grounds is likely to struggle more" and contended that "if the struggling leads to lower grades and less learning, then a variety of bad outcomes may result: higher attrition rates, lower pass rates on the bar, problems in the job market. The question is how large these effects are, and whether their consequences outweigh the benefits of greater prestige."

In other words, do the benefits of the connections made at, say, U.C.L.A. School of Law, and the weight U.C.L.A. carries in the job market, outweigh the cost of struggling academically there? Based on his reading of the data, Mr. Sander concluded that they did not.

The Duke economists say that lower-ranked schools in the University of California system are better at graduating minority students in STEM majors. For example, they conclude that had the bottom third of minority students at Berkeley who hoped to graduate with a STEM major gone to Santa Cruz instead, they would have been almost twice as likely to earn such a degree.

"Prior to California's ban on affirmative action," Peter Arcidiacono, one of the study's authors, told me, "what Berkeley did well was switch relatively ill-prepared minority students out of the sciences and into majors where credentials are relatively less important."

Dan Slater, lawyer and the author of "Love in the Time of Algorithms: What Technology Does to Meeting and Mating."

March 16, 2013

Love Hunters 2

The day Mr. Big signed, Ms. Yang took a flight to Chengdu, capital of Sichuan Province, where she would kick-start the campaign. During her 20-day search there, she had recurring nightmares. "I always feel unsettled during a campaign," she said, "but this time, the stress was crazy."

Her team of 10 love hunters scoured university campuses and shopping malls for three weeks, trying to meet a daily quota of 20 high-quality women, or two per person. Ms. Yang offered a bonus, about $16, for every candidate above the quota and set a personal goal of finding 10 "Class A" women a day herself.


Ms. Yang wasn't just haunted by a fear of letting the ideal candidate -- and the bonus -- slip out of her grasp. The office leak had also made her worry about security. One more false step and Mr. Big would bolt.

One afternoon in Chengdu, after slurping down a bowl of beef noodles at Master Kong's Chef's Table, Ms. Yang noticed a young woman sweeping past her into the restaurant, chatting on a cellphone. Long black hair hid most of the woman's face, but there was something captivating about her laugh and easy gait.

"She seemed open, warm, happy," Ms. Yang said. After a moment of indecision, Ms. Yang followed her inside, apologized for the intrusion and switched on her charm. Linking arms with the woman -- one of her patented moves -- Ms. Yang came away with her phone number, photograph and a few pertinent details: she was 24, a graduate student and a near-ringer for the TV hostess Zhou Tao.

Mr. Zhao has met several women on online dating sites, but he lost faith in the Internet when several women lied to him about their marital status and family backgrounds. His mother, however, had come through, arranging a meeting between him and the daughter of the woman she had met in the marriage market.

Not long after our conversation in McDonald's, Mr. Zhao met the woman at a coffee shop. It was, he told me later, even more awkward than most first dates. A rural migrant and door-to-door salesman, he struggled to find a shared topic of interest with the woman, a 35-year-old entrepreneur and Beijing native who had arrived driving a BMW sedan.

The lack of chemistry didn't seem to bother the woman, who told him about her profitable photo business and the three Beijing apartments she owned. Mr. Zhao didn't find her unattractive, but how was he supposed to respond? Then, even before broaching the possibility of a second date, he said, the woman made a proposition: if they married, he wouldn't have to work again.

"She said she made enough money for the two of us," he said. "I could have anything I want."

The marriage proposal stunned him. He had never heard a woman talk in such blunt, pragmatic terms. A life of wealth and leisure sounded tempting. Still, in the end, he couldn't imagine being subordinate to a woman. "If I accepted that situation," he asked me, "what kind of man would I be?"

It took Mr. Zhao several days before he worked up the nerve to tell his mother he had rejected the offer. He knew how hard she had worked, how much she had been counting on this. The news frustrated Ms. Yu. "Kids these days are way too picky," she said.

March 15, 2013

Google illiterate (reader) 2

Google Reader lived on borrowed time: creator Chris Wetherell reflects

My translation: Google never really believed in the project. Google Reader started in 2005 at what was really the golden age of RSS, blogging systems and a new content ecosystem. The big kahuna at that time was Bloglines (acquired by Ask.com) and Google Reader was an upstart.

And it entered the market with big ideas, a clear, clean slate and captured the imagination of early adopters despite some glitches. The Google Reader team, which included Chris (who was the Senior Software Engineer), worked hard to keep pushing the product forward. Among the folks who worked on the project included backend guru Ben Darnell, Mihai Parparita and Jason Shellen.

I wonder, did the company (Google) and the ecosystem at large misread the tea leaves? Did the world at large see an RSS/reader market when in reality the actual market opportunity was in data and sentiment analysis? Wetherell agreed. "The reader market never went past the experimental phase and none was iterating on the business model," he said. "Monetization abilities were never tried."

"There was so much data we had and so much information about the affinity readers had with certain content that we always felt there was monetization opportunity," he said. Dick Costolo (currently CEO of Twitter), who worked for Google at the time (having sold Google his company, Feedburner), came up with many monetization ideas but they fell on deaf ears. Costolo, of course is working hard to mine those affinity-and-context connections for Twitter, and is succeeding. What Costolo understood, Google and its mandarins totally missed, as noted in this November 2011 blog post by Chris who wrote.

Reader exhibits the best unpaid representation I've yet seen of a consumer's relationship to a content producer. You pay for HBO? That's a strong signal. Consuming free stuff? Reader's model was a dream. Even better than Netflix. You get affinity (which has clear monetary value) for free, and a tracked pattern of behavior for the act of iterating over differently sourced items - and a mechanism for distributing that quickly to an ostensible audience which didn't include social guilt or gameification - along with an extensible, scalable platform available via commonly used web technologies - all of which would be an amazing opportunity for the right product visionary. Reader is (was?) for information junkies; not just tech nerds. This market totally exists and is weirdly under-served (and is possibly affluent).

Marco Arment said it is good that Google Reader is shutting down, because "we're finally likely to see substantial innovation and competition in RSS desktop apps and sync platforms for the first time in almost a decade." It won't be easy or trivial. As we finished up our dinner, Wetherell said that it took a lot to make Google Reader work.

For instance, it was Google Crawler that gave the system ability to make lightning-fast connections and bring up recommendations. It is one of the main reasons it cannot be open sourced. The systems are too intertwined with Google's search and other infrastructure to be sold as well.

In addition, Google had a separate recommendations team fine-tuning Google Reader, and those people don't come in cheap. And let's not forget that it was Google's infrastructure that allowed millions of accounts to be hosted and many billions of items -- photos, videos, text objects -- to be saved for people to consume them at their leisure.

It wasn't -- and it still isn't -- a cheap exercise, said Wetherell, rationalizing why he somewhat understands Google's predicament. "This is and will always be a Google-level problem, especially if you are building a service for more than a few people," he said.

-- Giga Om Malik

March 14, 2013

Google illiterate (reader)

On Wednesday, Google announced that it was shutting down Google Reader.

I'm not saying that the second event was directly caused by the first, but the two are linked. As the NYT explains today, the settlement is no less than an attempt to change the very culture of Google, to make it less freewheelingly Silicon Valley and more of a mature and responsible corporate giant.

Google Reader was a part of that freewheeling culture, although just how freewheeling Google was is open to debate. Om Malik has a fantastic interview with Reader's founder, Chris Wetherell, who hacked it together with a small team and who never really managed to get Google senior management interested in the product or its potential.

"There was so much data we had and so much information about the affinity readers had with certain content that we always felt there was monetization opportunity," he said. Dick Costolo (currently CEO of Twitter), who worked for Google at the time (having sold Google his company, Feedburner), came up with many monetization ideas but they fell on deaf ears. Costolo, of course is working hard to mine those affinity-and-context connections for Twitter, and is succeeding. What Costolo understood, Google and its mandarins totally missed.

But whether or not Reader was ever going to be a good business for Google, it was from day one a fantastic public service for its users. Google started as a public service -- a way to find what you were looking for on the internet -- and didn't stop there. Google would also do things like buy the entire Usenet archives, or scan millions of out-of-print books, or put thousands of people to work making maps, all in order to be able to get all sorts of information to anybody who wants it. All of that was good business, as Daniel Soar explained in 2011:

Google is learning. The more data it gathers, the more it knows, the better it gets at what it does. Of course, the better it gets at what it does the more money it makes, and the more money it makes the more data it gathers and the better it gets at what it does - an example of the kind of win-win feedback loop Google specialises in - but what's surprising is that there is no obvious end to the process.

The end to the process, it turns out, is the government -- the Germans, of course, but also US states and many other authorities around the world. Governments love gathering data themselves, but they're less excited when a private, for-profit company does it -- and often does it better than they themselves can do it. What's more, while many of their citizens are still excited about Google and its range of offerings, a lot of them are worried, too, that they're losing their privacy and that Google has a scary amount of information about them.

-- Reuters Felix Salmon.

March 13, 2013

Affirmative action, on many bases

Most prominent liberals, including civil rights leaders and the Obama administration's lawyers, have indeed urged the court to uphold the current version of affirmative action. Yet a rump group of left-leaning legal scholars and education experts share at least some of Justice Kennedy's concerns. And they find themselves in the unusual position of seeing upsides in another potential liberal defeat in Chief Justice John G. Roberts Jr.'s court.

When elite colleges describe their admissions process, it sounds like one that follows Justice Kennedy's standard, with race as just one factor. In an amicus brief supporting the University of Texas, the eight Ivy League universities and six others said they sought a student body that was "diverse in many ways."

In fact, race plays a role unlike almost any other factor. An African-American student with a similar application to a white student received the equivalent of a 310-point lift in SAT scores, on a 1,600-point scale, according to a study of elite colleges by Thomas J. Espenshade, a Princeton sociologist. For Latino students, the margin was 130 points.

Recruited athletes and so-called legacy applicants also receive huge bonuses. But students who bring the other diversity that colleges claim to value -- socioeconomic status, geography and perspective, to name three cited in the brief -- receive no such advantage.

One study of 1990s data found that, all else equal, poorer students received no lift relative to affluent ones. Mr. Espenshade found that low-income minorities were somewhat more likely to gain admission than similar higher-income minorities but that lower-income whites received no advantage. In effect, poor and middle-income students are rejected, while others with the same scores and grades -- legacies, athletes and minorities, often from privileged backgrounds -- are admitted.

As a result, elite public and private colleges remain dominated by affluent students. Some colleges probably have more students from the top 2 percent of the income distribution than the bottom 50 percent.

The Kennedy dissent leaves the door open to affirmative action, but only a form that makes the explicit consideration of race a last resort. Other factors would have to come first. As it happens, there are several officially race-neutral factors that would raise no constitutional risk -- and help many minority applicants.

The most obvious is income. But others may be more important. If colleges gave students credit for coming from a low-income ZIP code, black and Latino students would benefit enormously, as they would from the consideration of wealth and family status. Only 27 percent of white students grow up in a single-parent family, compared with 60 percent of black children and 34 percent of Latino children.

One possible outcome is that the court will force colleges to show they have tried these forms of affirmative action before they turn to race. Another is a decision holding that racial preferences can be no larger -- in terms of SAT points, for instance -- than class preferences, says Stuart Taylor Jr., a co-author of a book critical of affirmative action.

March 12, 2013

Proximity in location-distance, or time ?

This post has been revised to reflect the following correction:

Correction: March 11, 2013

The Grindr app locates other people by distance, not time, as a previous version of this post stated.

The application focuses on proximity rather than location -- showing people's distance.

Jaime Woo, author of the book, Meet Grindr, How One App Changed the Way We Connect, says the cultural and technological impact of Grindr is much broader than most people realize. Mr. Woo, in a presentation on the design principles of the application, delivered Saturday afternoon at the South by Southwest conference, said the application had completely -- and very likely permanently -- altered the way app developers and users think about location-based services.

Grindr's main purpose is to facilitate hookups that are "spontaneous and intimate," he said. Both of those results are immensely appealing -- a kind of serendipity -- and contribute to the reasons that people are loyal and dedicated to an application, regardless of its intention. Scores of mobile apps and social networks have failed to inspire such enthusiasm, he said.

Mr. Woo said there were a lot of lessons to be learned from Grindr's financial success, which has inspired a wave of competitors -- Mister, Scruff, Jack'd, Tinder, OkCupid Locals -- to follow in its wake.

He said the primary appeal of Grindr was its simplicity. Users browse thumbnails, mark the ones they like as favorites or send them messages. That is different from Facebook and Twitter, where likes, pokes, retweets and favorites are often murky signals at best. Grindr's message is immediately clear from the moment that users sign up. The inherent value in that kind of intuitive design cannot be underestimated, he said.

The application focuses on proximity rather than location -- showing people's distance. This preserves privacy while sustaining a sense of mystery. The application also removes barriers for men who want to meet other men who are looking to connect.

March 11, 2013

Brooklyn Investor Loews $$L

Taxes: Oh yeah, and I haven't assumed any taxes on the above calculations. In recent years, unrealized gains seems to be offset by losses (note the deep discount to book value of CNA). So it would be a wash. Plus, these folks tend not to pay taxes. I think any monetization will come through spinoffs, exchanges and other tax efficient means. Part of the discount in L stock might be due to people applying 20% discounts to the value of publicly listed holdings for tax and liquidity. It may be the correct way to look at things, but I'm not convinced enough to put it in my valuations.

Conclusion: Anyway, this L is a really boring stock

Brooklyninvestor's Loews adjusted book value update.

Part 2 is up.

March 10, 2013

Life After Work -- Erin Callan

AT an office party in 2005, one of my colleagues asked my then husband what I did on weekends. She knew me as someone with great intensity and energy. "Does she kayak, go rock climbing and then run a half marathon?" she joked. No, he answered simply, "she sleeps." And that was true. When I wasn't catching up on work, I spent my weekends recharging my batteries for the coming week. Work always came first, before my family, friends and marriage -- which ended just a few years later.

In recent weeks I have been following with interest the escalating debate about work-life balance and the varying positions of Facebook's Sheryl Sandberg, Marissa Mayer of Yahoo and the academic Anne-Marie Slaughter, among others. Since I resigned my position as chief financial officer of Lehman Brothers in 2008, amid mounting chaos and a cloud of public humiliation only months before the company went bankrupt, I have had ample time to reflect on the decisions I made in balancing (or failing to balance) my job with the rest of my life. The fact that I call it "the rest of my life" gives you an indication where work stood in the pecking order.

-- Erin Callan, former chief financial officer of Lehman Brothers

March 9, 2013

New amenity : linear drains

The residences will offer custom features like linear drains in showers (so the water rushes out faster), kitchen countertops with marble mined in Alabama, and design elements like a raised medallion on the walls of the bathrooms. There will be parking for 92 vehicles, 15,000 square feet of amenities in the basement (including a 75-foot pool), and two gas-powered generators with submarine doors on top of the building, which were added to the designs after Sandy.

The development also has 10 attached town houses, ranging from $8.75 million to $12.25 million, five of which have private garages. All but two are under contract. A five-bedroom duplex penthouse, with 2,500 square feet of outdoor space, is currently available for $35 million.

The sales velocity at 150 Charles has stunned all involved and created a mad scramble to adjust to the demand. Since Feb. 12, the development has raised the price of its offering plan nine times to $785.67 million, a boost of nearly 13 percent. (56 Leonard Street has raised prices three times, by a total of 4 percent.)

Still, 150 Charles is not beloved by all its neighbors. A group of West Village (NYC) residents is still fighting to stop the development, claiming the developer unlawfully tore down the original building at the site. They wanted Mr. Witkoff to construct a taller, narrower building (up to 32 stories), which he had the right to build, that would have blocked fewer views and allowed in more light. He chose instead to construct a shorter, wider building, supposedly because it was more in keeping with the character of the Village.

March 8, 2013

Those who pay into Social Security

First, on Jan. 1 the tax wasn't hiked; it was restored to its 2010 level, after a two-year "holiday" that reduced the withholding to 4.2% of employees wages (up to wages of $101,800 in 2011 and $110,100 last year) from the 6.2% level in effect since 1990.

The idea was to deliver stimulus dollars to middle- and working-class families. But the holiday was always a wretched idea, in part because of what everyone knew would happen when the old rate reappeared --people treated it as a pay cut.

The worse flaw was that it was a lousy way to deliver targeted working-class relief. The change replaced the Obama administration's previous Making Work Pay tax credit, which delivered up to $800 to families earning $12,900 to $150,000.

The payroll tax break, by contrast, went only to those who pay into Social Security. So it left out 5.7 million state and local workers (mostly teachers). On the plus side, it fattened the paychecks even of the nation's top earners by a much-needed $2,100 or so.

-- Michael Hiltzik

March 5, 2013

Barnes & Noble did it all for the Nookie

In the call with analysts, Mr. Lynch was pressed on whether Barnes & Noble's digital content was really proprietary. Mr. Lynch acknowledged that what the bookseller possessed was the ability to sell publishers' content, but he insisted that it was "a strategic asset that is hard to replicate."

Wall Street seemed heartened by the company's acknowledgment that it needed to recalibrate its device business, perhaps anticipating that it would accelerate a breakup of the device and retail units. Shares of Barnes & Noble rose 3.35 percent, to close at $15.74.

Despite the shift in digital strategy, Mr. Lynch emphasized that the company was not abandoning the Nook division.

"Nook Media has been financing itself since October of 2012 due to the strong investment partners we've been able to attract in Microsoft and Pearson," he said. He added that the Nook segment and the physical book stores drove traffic to each other and needed to remain in partnership.

But analysts sounded a skeptical note. "Barnes & Noble stands at a fork in the road and rather than choose one path, it will likely need to split into two companies and let the retail business go down one path while freeing the Nook division to go down another," said Mr. McQuivey, of Forrester. "There's no guarantee that either path will lead to the promised land, but the two units are facing such different challenges and such unique prospects that it doesn't make sense for them to try to work together to solve such different problems."

March 2, 2013

Regulators and 13 banks complete 9.3 billion deal for foreclosure relief

The pact, reached after weeks of harried negotiations, halted a flawed review of millions of mortgages in foreclosure. Regulators, led by the comptroller's office, hastily scuttled that review amid heightened concerns that the process was generating billions of dollars in fees for consultants, but providing little relief for borrowers.

The effort was abandoned after consultants examined a tiny fraction of more than four million loans in foreclosure from 2009 to 2010. Ultimately, consultants completed a review of 104,000 loans, regulators said Thursday.


-- Dealbook / NY Times.

OCC foreclosure faqs.

As part of a consent order in April 2011, the comptroller's office and the Federal Reserve set up the Independent Foreclosure Review, which required banks hire a fleet of outside consultants to comb through loan files. The aim was to spot problems like illegal fees, botched loan modifications and examples where borrowers were evicted even though they were current on their mortgage payments.

By halting the review with only a sliver of the loans reviewed for problems, federal regulators don't have a complete picture of the extent of the abuse. As a result, consumer groups have argued, borrowers harmed by shoddy practices could still receive less money than they deserve.

In a speech this month, Thomas J. Curry, who heads the comptroller's office, defended the relief allocated through the settlement, describing it as "several times the potential payout had the reviews run their course."

An estimated 4.2 million borrowers in foreclosure will be contacted by Rust Consulting, a firm handling the payment details, by the end of March, according to the regulators.

Beyond the cash relief, the 13 mortgage lenders will provide $5.7 billion in other assistance like reducing mortgage balances and refinancing burdensome loans.

Three firms -- GMAC Mortgage, Everbank and OneWest -- didn't sign the pact. The lenders will continue to review their mortgages, according to the regulator. Those three companies service more than 450,000 loans in foreclosure from 2009 to 2010.

Updated February 28, 2013, 9:08 p.m. ET Foreclosure Files Detail Error Gap Some Big Banks Posted Sharply Higher Error Rates, Raising Questions About $9.3 Billion Settlement


The banks were ordered in 2011 to hire consultants to review foreclosures in search of possible errors that could result in compensation for borrowers.

Some 6.5% of files reviewed unveiled errors requiring compensation, officials at the Office of the Comptroller of the Currency said in January. They later revised the error rate to 4.2% after requesting new data, raising the total number reviewed to roughly 100,000 files.

But a breakdown of the information provided to the regulator shows that more than 11% of files examined for Wells Fargo WFC +0.88% & Co. and 9% of those for Bank of America Corp. BAC +0.98% had errors that would have required compensation for homeowners, said people who have reviewed the figures. A narrower sample of files--representing cases selected by outside consultants--showed error ratios of 21% for Wells Fargo and 16% for Bank of America, the people said.

The OCC findings appear skewed by the outsize contribution of one bank, J.P. Morgan Chase JPM -0.02% & Co., which reported an error rate far below rivals that oversaw a much larger universe of loans.

J.P Morgan was responsible for more than half of the completed files counted in the OCC review and reported compensation-worthy errors in just 0.6% of cases, according to people familiar with the figures.

J.P. Morgan is a smaller manager of mortgages than Bank of America and Wells Fargo. It had fewer borrowers who were eligible for the foreclosure review than Bank of America and roughly the same as Wells.

March 1, 2013

Love Hunters 1

Ms. Yang Jing, 28, is one of China's premier love hunters, a new breed of matchmaker that has proliferated in the country's economic boom. The company she works for, Diamond Love and Marriage, caters to China's nouveaux riches: men, and occasionally women, willing to pay tens and even hundreds of thousands of dollars to outsource the search for their ideal spouse.


In Joy City, Ms. Yang gave instructions to her eight-scout team, one of six squads the company was deploying in three cities for one Shanghai millionaire. This client had provided a list of requirements for his future wife, including her age (22 to 26), skin color ("white as porcelain") and sexual history (yes, a virgin).

"These millionaires are very picky, you know?" Ms. Yang said. "Nobody can ever be perfect enough." Still, the potential reward for Ms. Yang is huge: The love hunter who finds the client's eventual choice will receive a bonus of more than $30,000, around five times the average annual salary in this line of work.

In one case, Ms. Yu's migrant son reluctantly agreed to allow his aging mother to make the search for his future wife her all-consuming mission. In the other, Ms. Yang's richest client at Diamond Love deployed dozens of love hunters to find the most exquisite fair-skinned beauty in the land, even as he fretted about being conned by a bai jin nu, or gold digger.

Mr. Big, as I'll call him -- he insisted that Diamond Love not reveal his name -- is a member of China's fuyidai, the "first-generation rich" who have leapt from poverty to extreme wealth in a single bound, often jettisoning their first wives in the process. Diamond Love's clientele also includes many fuerdai, or "second-generation-rich," men and women in their 20s and 30s whose search is often bankrolled by wealthy parents keen on exerting control over their marital choices as well as the family inheritance.

But fuyidai like Mr. Big are accustomed to being the boss and can be the most uncompromising clients.

Mr. Big had an excruciatingly specific requirement for his second wife. The ideal woman, he said, would look like a younger replica of Zhou Tao, a famous Chinese television host: slim with pure white skin, slightly pointed chin, perfect teeth, double eyelids and long silken hair. To ensure her good character and fortune, he insisted that her wuguan -- a feng shui-like reading of the sense organs on the face -- show perfect harmony.

"When clients start out, all they want is beauty -- how tall, how white, how thin," Ms. Yang said. "Sometimes the person they're looking for doesn't exist in nature. Even if we find her, these clients often have no idea whether that would make their hearts feel settled. It's our job to try to move them from fantasy toward reality."

The New Matchmaking

Three decades of combustive economic growth have reshaped the landscape of marriage in China. A generation ago, China was one of the world's most equal nations, in both gender and wealth. Most people were poor, and tight controls over housing, employment, travel and family life simplified the search for a suitable match -- what the Chinese call mendang hudui, meaning roughly "family doors of equal size."

Like many Chinese who came of age in the 1960s and '70s, Ms. Yu married a man from her factory work unit, with their local Communist Party boss as informal matchmaker. As recently as 1990, researchers found that a vast majority of residents in two of China's largest cities dated just one person before marriage: their prospective spouse.

China's transition to a market economy has swept away many restrictions in people's lives. But of all the new freedoms the Chinese enjoy today -- making money, owning a house, choosing a career -- there is one that has become an unexpected burden: seeking a spouse. This may be a time of sexual and romantic liberation in China, but the solemn task of finding a husband or wife is proving to be a vexing proposition for rich and poor alike.

"The old family and social networks that people used to rely on for finding a husband or wife have fallen apart," said James Farrer, an American sociologist whose book, "Opening Up," looks at sex, dating and marriage in contemporary China. "There's a huge sense of dislocation in China, and young people don't know where to turn."

The confusion surrounding marriage in China reflects a country in frenzied transition. Sharp inequalities of wealth have created new fault lines in society, while the largest rural-to-urban migration in history has blurred many of the old ones. As many as 300 million rural Chinese have moved to cities in the last three decades. Uprooted and without nearby relatives to help arrange meetings with potential partners, these migrants are often lost in the swell of the big city.

Demographic changes, too, are creating complications. Not only are many more Chinese women postponing marriage to pursue careers, but China's gender gap -- 118 boys are born for every 100 girls -- has become one of the world's widest, fueled in large part by the government's restrictive one-child policy. By the end of this decade, Chinese researchers estimate, the country will have a surplus of 24 million unmarried men.

Single men have a hard time making the list if they don't own a house or an apartment, which in cities like Beijing are extremely expensive. And despite the gender imbalance, Chinese women face intense pressure to be married before the age of 28, lest they be rejected and stigmatized as "leftover women."

Dozens of high-end matchmaking services have sprung up in China in the last five years, charging big fees to find and to vet prospective spouses for wealthy clients. Their methods can turn into gaudy spectacle. One firm transported 200 would-be trophy wives to a resort town in southwestern China for the perusal of one powerful magnate. Another organized a caravan of BMWs for rich businessmen to find young wives in Sichuan Province. Diamond Love, among the largest love-hunting services, sponsored a matchmaking event in 2009 where 21 men each paid a $15,000 entrance fee.

The marriage candidates on offer in the parks, she discovered, were often a mismatch of shengnu ("leftover women") and shengnan ("leftover men"), two groups from opposite ends of the social scale. Shengnan, like her son, are mostly poor rural men left behind as female counterparts marry up in age and social status. The phenomenon is exacerbated by China's warped demographics, as the bubble of excess men starts to reach marrying age.

Finding a Chinese spouse can be even more challenging for so-called leftover women, even if they often have precisely what the shengnan lack: money, education and social and professional standing. One day in the Temple of Heaven park, I met a 70-year-old pensioner from Anhui Province who was seeking a husband for his eldest daughter, a 36-year-old economics professor in Beijing.

"My daughter is an outstanding girl," he said, pulling from his satchel an academic book she had published. "She's been introduced to about 15 men over the past two years, but they all rejected her because her degree is too high."