[PEN-L] China passes US in despotism of intellectual property

[Charlie]

... by arresting (!) a programmer charged with helping users block ads
from a commercial IM service.

Debate Over IM Add-Ons in China

Market Leader Says Software Developer Infringed Copyright

By Juliet Ye
Wall Street Journal, November 29, 2007
Page B2

Hong Kong -- A computer-science instructor's arrest on charges of
intellectual-property infringement has sparked a debate about whether a
popular application that blocks Web advertisements is fair or foul.

The instructor, Chen Shoufu, 28 years old, created an "add-on" program
called Coral QQ that modifies QQ, China's dominant instant-messaging
service.

Chinese Internet company Tencent Holdings Ltd. owns QQ, and Mr. Chen's
program changes how it's used -- in ways that many users like. Among
them, it blocks advertisements, although it also includes some ads and
spam from other Web companies as a way to get revenue for itself. It
also resolves Internet addresses, pinpointing the computer from which a
person is messaging, a feature Tencent offers, but for a fee of 10 yuan
($1.35) a month.

Both QQ and Coral QQ are available as free downloads on the Web. Mr.
Chen offers software for download on his Web site, and he includes
Tencent QQ, his own Coral QQ add-on and several commercial ads or
spamware from other companies.

Mr. Chen created Coral QQ in 2001 when he was a student at the Beijing
Institute of Technology, where he now works in the computer center as an
instructor.

China has the world's second-biggest Internet market after the U.S.,
with more than 160 million users, and it is a thriving market for such
add-ons. Coral QQ has about 40.6 million users, according to Chinese
computer-science publication Pchome.

Tencent first complained to Mr. Chen in late 2002, saying Coral QQ
violated its copyright and warning him to stop distributing it. He did.
Mr. Chen then devised a noninvasive "patch" on the program -- a separate
piece of software -- that would run concurrently with QQ on a user's
computer and modify it as the two went humming along. In 2003, he
resumed offering Coral QQ.

In 2006, as it became increasingly apparent that Coral QQ was only
growing in popularity, Tencent filed a 500,000 yuan ($68,000) lawsuit
alleging copyright infringement against Mr. Chen and won a judgment for
100,000 yuan, which Mr. Chen paid. In early August, Tencent complained
to the police in Shenzhen, where it has its headquarters, and on Aug. 16
Mr. Chen was detained. Tencent said Mr. Chen was "making illegal profits
and infringing on Tencent's copyright."

The confrontation has conferred a minor hero's status on Mr. Chen among
China's Web users. Thousands have posted messages on blogs and forums in
support of him.

Hong Bo, a widely known Beijing tech blogger who goes by the handle
Keso, said in an interview that Tencent's QQ "is bullying Chinese users
by monopolizing the market. Coral QQ helped those people, who wanted to
use QQ but hated the software, become Tencent users."

Tencent introduced instant messaging in China when the country had just
over two million Internet users. Today, QQ users send as many as three
billion instant messages a day. But Tencent's dominance of the Chinese
messaging market has at times vexed some of the 270 million users the
company estimates the service has, including multiple subscriptions,
often because of the pop-up ads and service fees.

"We believe that add-ons are not only an infringement on property rights
but also a main cause of online safety problems for users," Tencent
says. "Our aim is to better protect the users' rights while protecting
the company's legal rights."

In a recent episode of a fast-paced legal-cases program called "Case
Tracking," broadcast on a Shenzhen satellite-TV station, Liu Haihua of
the Shenzhen public-security bureau in Nanshan district, said, "Coral QQ
is making illegal profits from copyright infringement and binding in
commercial ads. When users install Coral QQ in their computers, these
commercials are automatically installed."

The police say the case is under investigation and wouldn't make Mr.
Chen, detained in Shenzhen, available for comment.

You Yunting, a noted intellectual-property lawyer in Shanghai, says he
is considering defending Mr. Chen and Coral QQ in court. He agrees with
the court judgment against Mr. Chen but not with the criminal proceedings.

"He's wrong, but not so bad as to be jailed," Mr. You says.

China's Computer Software Copyright Regulations hold that providing
revised software without the express agreement of the copyright owner
may cause the provider to be civilly -- or criminally -- liable. There
are few Chinese laws or regulations specifically governing add-ons,
although add-ons to online games have been prohibited since 2003. As for
whether an add-on application constitutes software piracy, Mr. You says
it defies definition.

"Intellectual-property protection in China is still complex at this
stage," he says.

Write to Juliet Ye at [EMAIL PROTECTED]

http://online.wsj.com

[PEN-L] heard much about the Vzlan supporters of 'democracy' in the capitalist press?

[michael a. lebowitz]

Venezuelan Opposition Protesters Shoot Chavez Supporter

November 28th 2007, by Kiraz Janicke - Venezuelanalysis.com

Caracas, November 28, 2007 (venezuelanalysis.com) 
- Neighbors, friends and family members of young 
worker and supporter of Venezuelan President Hugo 
Chavez, José Anibal Oliveros Yépez, who was 
murdered by a radical opposition group in the 
regional city of Valencia on Monday, have express 
profound rage and indignation at what occurred 
explaining that his body was spat on and kicked 
by his killers, "as if he were and animal."


Oliveres, 19 years old, was on his way to work 
driving a truck of state owned "socialist" 
housing company Petrocasa when he encountered 
opposition groups blocking the road in protest 
against proposed constitutional reforms. When he 
tried to convince them to let him pass he was 
shot several times and died before he could be rescued.


Radio YVKE Mundial reported that the opposition 
protesters came from Cuidad Alianza, a middle 
class suburb in Valencia and blocked a highway to 
impede workers from Petrocasa from passing to the 
poorer neighborhood of Araguita, where they were 
working to construct housing for the poor. 
However, the report noted many of the neighbors 
from Cuidad Alianza also rejected the violent 
behavior of some of the opposition groups.


A resident from Cuidad Alianza who did not want 
to be named told Radio YVKE Mundial that the 
opposition groups had blocked the road to 
Araguita from three o'clock in the morning and 
were patrolling the neighborhood "with guns in hand."


Alexander Borges, friend and workmate of Oliveros 
explained to VTV that they tried to rescue 
Oliveros, but were prevented by the protestors who threatened to kill them.


"There were four of us, trying to carry our 
friend to the community, but they surrounded us 
throwing bottles. I took the opportunity to move 
him [Oliveros] because they were going to hit him 
with a bottle in the face and I moved him so it 
did not hit him in the face. He had one bullet in 
the leg, a man from the local community was going 
to carry him, but in this moment they shot him 
twice in the back and this is when he fell to the ground."


"We pleaded with them for the life of our friend 
that was lying bloody on the ground, to please 
allow us the opportunity to pick him up and they 
responded that now they were coming for us, that 
they were coming for me," Borges added.


Borges explained that two other people came to 
help rescue Oliveros, but that the opposition 
supporters threw rocks and bottles at them 
screaming, "Come and pick up your dead, now we are coming for you."


Dixon Viloria, also a friend of Oliveros and a 
witness said that after they killed him, "they 
mal-treated him, kicked him, stripped off his 
clothes, hit him and screamed ‘pick up your dead 
chicken!' as if he was an animal."


Beltran Chavez, from Araguita said that neighbors 
from Cuidad Alianza had shot at workers from 
Petrocasa earlier when they tried to pass through 
to construction sites in Araguita. He said the 
same group of protesters had previously set 
alight to a truck from Petrocasa and physically 
and verbally attacked a group of women from Araguita.


"How can a group of people be better armed than 
the state and municipal police," he asked. He 
added that thanks to the municipal and state 
police the four people that participated in the act were captured."


National Assembly Deputy Francisco Ameliach and 
the Mayor of Guacara, José Manuel Flores, who 
visited the neighborhood to pay their respects to 
the Oliveros' family, reported that opposition 
groups in Ciudad Alianza that claim to represent 
"civil society" have marked the houses of Chavez 
supporters, or those they believe to be Chavez 
supporters, with red paint and "have said they are going to kill them."


Vice president Jorge Rodriguez confirmed that the 
Oliveros' killer had been identified and arrested 
and has confessed to the crime, reportedly saying 
that all "Chavistas" should be killed, as well as 
three other people also linked to his death. 
Rodrgiuez said that simultaneously coordinated 
opposition protests of small groups had blocked 
other highways with burning objects in Valencia 
and Maracay. In total 80 people were arrested.


Rodriguez has also asked the Venezuelan Episcopal 
Conference to explain what they know about a 
meeting held by the opposition in the Diocesan 
Insitute in Maracay where the violent protests 
are alleged to have been planned.


Rodriguez said he has witness testimony of people 
who were invited to the meeting in the Diocesan 
Institute to "pray for peace" however; when they 
arrived they found the meeting was planning the 
protest in Ciudad Alianza that resulted in the death of Oliveros.


Rodriguez said the Catholic hierarchy should 
remember the commandments not to lie and not to 
kill and said the Church should explain to the 
Venezuelan people why their buildings are being 
used to 

Re: [PEN-L] Foreclosure help on the way

[Jim Devine]

michael perelman wrote:
> A database would be very useful.  An Ohio judge just ruled that
> foreclosures were illegal because the forcloserers could not prove that
> they owned the property.

Michael, that word is spelled "foreclosusurers" or "forcecloserers."
--
Jim Devine / "The radios blare musak and newsak, diseases are cured every day /
the worst disease is to be unwanted, to be used up, and cast away." --
Peter Case.

Re: [PEN-L] Foreclosure help on the way

[michael perelman]

A database would be very useful.  An Ohio judge just ruled that
foreclosures were illegal because the forcloserers could not prove that
they owned the property.


raghu wrote:

On Nov 28, 2007 10:25 AM, Charles Brown
<[EMAIL PROTECTED]
> wrote:

Foreclosure help on the way



Under fire for the explosion of failed mortgages that has led to a
national foreclosure crisis, lenders promised U.S. mayors in
Detroit on Tuesday that they will pay for credit counseling
hotlines and assemble a database to help untangle who owns
foreclosed properties.


Help on the way for who exactly? How is creating a database of
foreclosed properties going to help the unfortunate ex-homeowner? The
only ones who would benefit are vulture investors looking for cheap
properties and possibly neighbors who don't want a unmaintained lawn
to drive down their own property value. This is a disgrace.
-raghu.





--

Michael Perelman
Economics Department
California State University
michael at ecst.csuchico.edu
Chico, CA 95929
530-898-5321
fax 530-898-5901
www.michaelperelman.wordpress.com

[PEN-L] Banking

[Charles Brown]

http://www.ft.com/cms/s/0/3da550e8-9d0e-11dc-af03-779fd2ac.html 

By Martin Wolf

Published: November 27 2007 18:51 | Last updated: November 27 2007 18:51

Why does banking generate such turmoil, with the crisis over securitised 
lending the latest example? Why is the industry so profitable? Why are 
the people it employs so well paid? The answer to these three questions 
is the same: banking takes high risks. But the public sector subsidises 
this risk-taking. It does so because banks provide a utility. What the 
banks give in return, however, is gung-ho speculation.

Perhaps the most striking characteristic of the banking sector is its 
profitability. Between 1997 and 2006, for example, the median nominal 
return on equity of UK banks was 20 per cent. While high by 
international standards, this seems not to be exceptional. In 2006, 
returns on equity were about 20 per cent in Ireland, Spain and the 
Nordic countries. In the US they were a little over 12 per cent. Returns 
in Germany, France and Italy seem to have been close to US levels.

As Andrew Smithers of London-based Smithers & Co and Geoffrey Wood of 
the Cass Business School at the City University London note in a 
splendid report, from which I have taken these data, long-run real 
returns on equity in the US have been a little below 7 per cent.* 
Another study estimated the global real return on equity in the 20th 
century at close to 6 per cent.**

A starting assumption for a competitive economy is that returns on 
equity should be much the same across industries. If a particular 
industry earns two or three times long-run average returns for a while, 
one should expect an offsetting period when returns will be below that 
average. If the high returns are very high, as they are, the low returns 
are likely to be negative.

Yet banks are also thinly capitalised: the core “tier 1” capital of big 
UK banks is a mere 4 per cent of liabilities. If returns on equity 
become negative in a thinly capitalised business, many banks will become 
insolvent. The point can be put more tellingly: these high returns on 
equity suggest that banks are taking substantial risks on a slender 
equity base. But the slenderness of that base also means that insolvency 
threatens when bad times arrive.

How do banks get away with holding so little capital that they make the 
most debt-laden of private equity deals in other industries look 
well-capitalised? It can hardly be because they are intrinsically safe. 
The volatility of earnings, the history of failure and the strong 
government regulation all suggest that this is not the case. The chief 
answer to the question is that banks benefit from sundry explicit and 
implicit guarantees: lender-of-last-resort facilities from central 
banks; formal deposit insurance; informal deposit insurance (of the kind 
just extracted from the UK Treasury by the crisis at Northern Rock); 
and, frequently, informal insurance of all debt liabilities and even of 
shareholders’ funds in institutions deemed too big or too politically 
sensitive to fail.

Such assistance reduces the cost of the debt associated with any level 
of equity, since lenders know they are protected by claims on the state, 
as well as by the equity cushion. This, then, allows banks to take more 
risk. If things go well, shareholders earn exceptional returns. If they 
go badly, the downside cannot exceed their equity. Beyond that point, 
creditors and government share the losses.

Governments are not totally stupid. They guarantee banks because the 
latter provide a social utility: a safe haven for money, and a payment 
system. But governments also realise that they are providing incentives 
for banks to economise on capital and take on risk. So governments 
impose capital-adequacy ratios, rules on risk management and (if they 
are sensible) liquidity requirements, as well. Unfortunately, these 
institutions are not only complex, but are staffed by single-minded and 
talented people. They go round regulations, just as water flows round an 
obstruction.

The result of this ingenuity includes “special purpose vehicles”, hedge 
funds and even, in some respects, private equity funds. These are all, 
in varying ways, off-balance-sheet banks: ways to exploit the 
exceptionally profitable opportunities (and corresponding risks) created 
by high leverage and maturity transformation. Securitisation, to take a 
salient example, is a clever way to shift what would once have been bank 
loans on to the books of these quasi-banks, with the consequences we all 
now see.

Quite as important as the tussle between regulators and shareholders is 
that between shareholders and their employees. In an industry with long 
periods of high profitability, followed by massive write-offs, the ideal 
employment contract for the employee has high bonuses for short-term 
performance.

Assume, then, a run of profitable years in which shareholders receive 
high returns and employees are handsom

Re: [PEN-L] Foreclosure help on the way

[Charles Brown]

>>> raghu <[EMAIL PROTECTED]> 11/28/2007 2:43 PM >>>
On Nov 28, 2007 10:25 AM, Charles Brown
<[EMAIL PROTECTED]>
wrote:

> Foreclosure help on the way
>


Under fire for the explosion of failed mortgages that has led to a
national
> foreclosure crisis, lenders promised U.S. mayors in Detroit on
Tuesday
> that they will pay for credit counseling hotlines and assemble a
database to
> help untangle who owns foreclosed properties.
>

Help on the way for who exactly? How is creating a database of
foreclosed
properties going to help the unfortunate ex-homeowner? The only ones
who
would benefit are vulture investors looking for cheap properties and
possibly neighbors who don't want a unmaintained lawn to drive down
their
own property value. This is a disgrace.
-raghu.



CB: Yes. It's demogogy.



Kilpatrick said the database would prove useful because residents
> inundate city halls with complaints about foreclosed homes with
> overgrown lawns and broken windows.
>
> But many often struggle to find answers because it can be difficult
to
> figure out who's responsible for the property, he said.
>
> "Now we'll know better who has the major responsibility for getting
> those houses in order," Kilpatrick said.
>
> Both the database and money for hotlines would be a big help, said
Ava
> Tinsley of the Boston-Edison Association in Detroit. The association
is
> involved in helping people facing foreclosure.
>
> It's difficult to determine which entity has seized a house when it
is
> foreclosed -- a bank for a mortgage or a government for taxes,
Tinsley
> said.
>
> And the demand for counseling help is immense, she said.
>
> "There are so many people out there who need help and don't realize
> they need help until it's the ninth hour," she said.
>
>

Re: [PEN-L] Foreclosure help on the way

[raghu]

On Nov 28, 2007 10:25 AM, Charles Brown <[EMAIL PROTECTED]>
wrote:

> Foreclosure help on the way
>


Under fire for the explosion of failed mortgages that has led to a national
> foreclosure crisis, lenders promised U.S. mayors in Detroit on Tuesday
> that they will pay for credit counseling hotlines and assemble a database to
> help untangle who owns foreclosed properties.
>

Help on the way for who exactly? How is creating a database of foreclosed
properties going to help the unfortunate ex-homeowner? The only ones who
would benefit are vulture investors looking for cheap properties and
possibly neighbors who don't want a unmaintained lawn to drive down their
own property value. This is a disgrace.
-raghu.



Kilpatrick said the database would prove useful because residents
> inundate city halls with complaints about foreclosed homes with
> overgrown lawns and broken windows.
>
> But many often struggle to find answers because it can be difficult to
> figure out who's responsible for the property, he said.
>
> "Now we'll know better who has the major responsibility for getting
> those houses in order," Kilpatrick said.
>
> Both the database and money for hotlines would be a big help, said Ava
> Tinsley of the Boston-Edison Association in Detroit. The association is
> involved in helping people facing foreclosure.
>
> It's difficult to determine which entity has seized a house when it is
> foreclosed -- a bank for a mortgage or a government for taxes, Tinsley
> said.
>
> And the demand for counseling help is immense, she said.
>
> "There are so many people out there who need help and don't realize
> they need help until it's the ninth hour," she said.
>
>

Re: [PEN-L] Moral hazard

[Charles Brown]

Yea. It seems to mean something like  that it's immoral for poor people
and debtors not to pay interest because of high risks in loans to them,
but that it's moral for the rich and creditors to be insured against the
very same risk they take in lending to the poor ?

Charles

>>> raghu <[EMAIL PROTECTED]> 11/28/2007 1:25 PM >>>
Isn't moral hazard just econospeak for a familiar phenomenon:
socialized
risk and privatized profit?
-raghu.


On Nov 28, 2007 7:02 AM, Charles Brown
<[EMAIL PROTECTED]>
wrote:

> Moral hazard
> From Wikipedia, the free encyclopedia
>
> Moral hazard is the prospect that a party insulated from risk may
> behave differently, for example, that an insured party's behaviour
will
> be more risky than it would without the insurance. Moral hazard
arises
> because an individual or institution does not bear the full
consequences
> of its actions, and therefore has a tendency to act less carefully
than
> it otherwise would, leaving another party to bear some
responsibility
> for the consequences of those actions.
>

Re: [PEN-L] Foreclosure help on the way

[Leigh Meyers]

"If you're the CEO of a major company and you don't want the bad press
associated with being the foreclosure king, that might have an effect on
you," he said.

They saved the best for last...

If they didn't give a flying about cutting mortgages for $10,000
dollar a year waitresses why should anyone believe that they care
about their public image?

Unless their public image is more important than their fiduciary
duties, business law.

Writing mortgage loans to people who have no hope of paying them the
first time they go to doc-in-the-box is not only a breech of fiduciary
duties to the people THEY borrowed the money from, it must violate
dozens of state/federal lending laws.

Orange prison jumpsuits on your CEO&CFO are not good PR either, and
prison is where most of them belong... along with these guys:
http://leighm.net/wp/2007/10/14/bafraid_vid/




On Nov 28, 2007 10:25 AM, Charles Brown <[EMAIL PROTECTED]> wrote:
> Foreclosure help on the way
> Mayors, lenders announce hotline, database aimed at reining in crisis
> November 28, 2007
>
> BY ZACHARY GORCHOW
>
> FREE PRESS STAFF WRITER
>
> Under fire for the explosion of failed mortgages that has led to a
> national foreclosure crisis, lenders promised U.S. mayors in Detroit on
> Tuesday that they will pay for credit counseling hotlines and assemble a
> database to help untangle who owns foreclosed properties.
>
> The U.S. Conference of Mayors, lenders, banks and nonprofits that help
> people with their loans huddled behind closed doors at the MGM Grand
> Detroit to brainstorm how to rein in the number of people losing their
> homes.
>
>
> The Mortgage Bankers Association committed Tuesday to donating $100 for
> every property in foreclosure -- about 1 million properties -- to
> hotlines designed to help people avoid foreclosure.
> The association also launched a database of all the loans in
> foreclosure, accessible on its Web site. The database will allow people
> to find out which lender is responsible for a foreclosed house and who
> the loan servicer is on the house.
>
> The association also said it would make its studio in Washington
> available to mayors to film a public service announcement about
> foreclosures, similar to one it did for Detroit Mayor Kwame Kilpatrick
> that hasn't aired yet.
>
> Paul Richman, the association's senior director of government affairs,
> said the steps are being taken to help address the need created by some
> in the industry.
>
> "We understand we need to prospectively be more careful in the future,"
> he said after the meeting.
>
> Kilpatrick said the database would prove useful because residents
> inundate city halls with complaints about foreclosed homes with
> overgrown lawns and broken windows.
>
> But many often struggle to find answers because it can be difficult to
> figure out who's responsible for the property, he said.
>
> "Now we'll know better who has the major responsibility for getting
> those houses in order," Kilpatrick said.
>
> Both the database and money for hotlines would be a big help, said Ava
> Tinsley of the Boston-Edison Association in Detroit. The association is
> involved in helping people facing foreclosure.
>
> It's difficult to determine which entity has seized a house when it is
> foreclosed -- a bank for a mortgage or a government for taxes, Tinsley
> said.
>
> And the demand for counseling help is immense, she said.
>
> "There are so many people out there who need help and don't realize
> they need help until it's the ninth hour," she said.
>
> Earlier in the day about 10 demonstrators protested the meeting outside
> the hotel. They called for states to use laws already on the books to
> put a moratorium on foreclosures.
>
> After being told by nonprofits that 72% of those in foreclosure have
> the wherewithal to remain in their homes if given proper help, the
> mayors said it's essential to convince people nearing or in foreclosure
> to seek help.
>
> Officials said three-quarters of those in foreclosure are not
> deadbeats, but caught in poorly designed loans -- part of the subprime
> market where loans began with cheap initial interest rates that later
> ballooned to unaffordable levels.
>
> "What we have is an unbelievable number of people in bad products,"
> said John Taylor, president and chief executive officer of the
> Washington-based National Community Reinvestment Coalition.
>
> Mayor Douglas Palmer of Trenton, N.J., the president of the National
> Conference of Mayors, said the problem doesn't affect just those in
> foreclosure.
>
> "The foreclosure crisis has the potential to break the back of our
> economy as well as the back of our families if we don't do something
> about this soon," Palmer said.
>
> In metro Detroit, it is the subprime collapse, coupled with a poor
> economy, that has fueled large numbers of foreclosures.
>
> Earlier this month, RealtyTrac reported 1 in 33 homes in metro Detroit
> was subject to a foreclosure filing -- second in the nation behind
> 

[PEN-L] Foreclosure help on the way

[Charles Brown]

Foreclosure help on the way
Mayors, lenders announce hotline, database aimed at reining in crisis
November 28, 2007

BY ZACHARY GORCHOW

FREE PRESS STAFF WRITER

Under fire for the explosion of failed mortgages that has led to a
national foreclosure crisis, lenders promised U.S. mayors in Detroit on
Tuesday that they will pay for credit counseling hotlines and assemble a
database to help untangle who owns foreclosed properties.

The U.S. Conference of Mayors, lenders, banks and nonprofits that help
people with their loans huddled behind closed doors at the MGM Grand
Detroit to brainstorm how to rein in the number of people losing their
homes.


The Mortgage Bankers Association committed Tuesday to donating $100 for
every property in foreclosure -- about 1 million properties -- to
hotlines designed to help people avoid foreclosure.
The association also launched a database of all the loans in
foreclosure, accessible on its Web site. The database will allow people
to find out which lender is responsible for a foreclosed house and who
the loan servicer is on the house.

The association also said it would make its studio in Washington
available to mayors to film a public service announcement about
foreclosures, similar to one it did for Detroit Mayor Kwame Kilpatrick
that hasn't aired yet.

Paul Richman, the association's senior director of government affairs,
said the steps are being taken to help address the need created by some
in the industry.

"We understand we need to prospectively be more careful in the future,"
he said after the meeting.

Kilpatrick said the database would prove useful because residents
inundate city halls with complaints about foreclosed homes with
overgrown lawns and broken windows.

But many often struggle to find answers because it can be difficult to
figure out who's responsible for the property, he said.

"Now we'll know better who has the major responsibility for getting
those houses in order," Kilpatrick said.

Both the database and money for hotlines would be a big help, said Ava
Tinsley of the Boston-Edison Association in Detroit. The association is
involved in helping people facing foreclosure.

It's difficult to determine which entity has seized a house when it is
foreclosed -- a bank for a mortgage or a government for taxes, Tinsley
said.

And the demand for counseling help is immense, she said.

"There are so many people out there who need help and don't realize
they need help until it's the ninth hour," she said.

Earlier in the day about 10 demonstrators protested the meeting outside
the hotel. They called for states to use laws already on the books to
put a moratorium on foreclosures.

After being told by nonprofits that 72% of those in foreclosure have
the wherewithal to remain in their homes if given proper help, the
mayors said it's essential to convince people nearing or in foreclosure
to seek help.

Officials said three-quarters of those in foreclosure are not
deadbeats, but caught in poorly designed loans -- part of the subprime
market where loans began with cheap initial interest rates that later
ballooned to unaffordable levels.

"What we have is an unbelievable number of people in bad products,"
said John Taylor, president and chief executive officer of the
Washington-based National Community Reinvestment Coalition.

Mayor Douglas Palmer of Trenton, N.J., the president of the National
Conference of Mayors, said the problem doesn't affect just those in
foreclosure.

"The foreclosure crisis has the potential to break the back of our
economy as well as the back of our families if we don't do something
about this soon," Palmer said.

In metro Detroit, it is the subprime collapse, coupled with a poor
economy, that has fueled large numbers of foreclosures.

Earlier this month, RealtyTrac reported 1 in 33 homes in metro Detroit
was subject to a foreclosure filing -- second in the nation behind
Stockton, Calif.

Having the mayors team up could bring key pressure on Washington and
state governments to put reforms in place to protect borrowers, Taylor
said.

"A concerted effort with a team of mayors, I think, could be very
effective," he said.

Charles Ballard, an economics professor at Michigan State University,
said while one mayor would not be able to effect much change, a
coalition of them could put considerable heat on the lending industry.

"If you're the CEO of a major company and you don't want the bad press
associated with being the foreclosure king, that might have an effect on
you," he said.

The Web site for the Mortgage Bankers Association database of loans is:
http://www.mortgagebankers.org/industryresources/resourcecenters/
PropertyPreservationResourceCenter.htm

Contact ZACHARY GORCHOW at 313-222-6678 or [EMAIL PROTECTED]

Re: [PEN-L] Moral hazard

[raghu]

Isn't moral hazard just econospeak for a familiar phenomenon: socialized
risk and privatized profit?
-raghu.


On Nov 28, 2007 7:02 AM, Charles Brown <[EMAIL PROTECTED]>
wrote:

> Moral hazard
> From Wikipedia, the free encyclopedia
>
> Moral hazard is the prospect that a party insulated from risk may
> behave differently, for example, that an insured party's behaviour will
> be more risky than it would without the insurance. Moral hazard arises
> because an individual or institution does not bear the full consequences
> of its actions, and therefore has a tendency to act less carefully than
> it otherwise would, leaving another party to bear some responsibility
> for the consequences of those actions.
>

Re: [PEN-L] Northern Rock and moral hazard

[raghu]

On Nov 28, 2007 8:15 AM, Julio Huato <[EMAIL PROTECTED]> wrote:

> Another column by Wolf that might also be of interest here:
>
> http://www.ft.com/cms/s/0/afd6e830-978b-11dc-9e08-779fd2ac.html
>
> Why is the FT more bearish than the WSJ?
>


Are they? It is just one columnist (Martin Wolf) who has been consistently
bearish. And Larry Summers balances him out to some extent.
-raghu.

Re: [PEN-L] economics in the news!

[raghu]

On Nov 28, 2007 6:26 AM, Jim Devine <[EMAIL PROTECTED]> wrote:

> is game theory a "serious science"? is any social research "serious
> science"? not yet. The problem with game theory is not that it isn't
> "serious science" as much as that its users often have _pretensions_
> of being serious scientists. (as per usual in social research, they
> reify their models, confusing the map with the territory.) And not all
> of its practitioners have such pretensions.
>


Game theory is best thought of as a branch of mathematics. The problem is
with the application not with the theory itself.
-raghu.

Re: [PEN-L] FOMC causes SM to rise

[Doug Henwood]

I was at this talk this morning. The market is delusional. Kohn gave
a very "balanced" speech - all one the one hand/on the other stuff.
He did say that over the last couple of years, the market has
repeatedly thought the Fed was going to be easier than it's been.
Evidently that perception lives on.

Doug

[PEN-L] FOMC causes SM to rise

[Jim Devine]

The New York Times
Business: Stocks Soar on Signal of 'Flexible' Fed Policy
 By MICHAEL M. GRYNBAUM
 A top Federal Reserve official appeared to open the door
 today for additional interest rate cuts, sending stock
 markets sharply higher.

so someone on the FOMC should buy a bunch of stock and then leak info
that the committee's going to cut interest rates. Then sell and go
home rich.

--
Jim Devine / "The radios blare musak and newsak, diseases are cured every day /
the worst disease is to be unwanted, to be used up, and cast away." --
Peter Case ("Poor Old Tom").



--
Jim Devine / "The radios blare musak and newsak, diseases are cured every day /
the worst disease is to be unwanted, to be used up, and cast away." --
Peter Case.

Re: [PEN-L] Northern Rock and moral hazard

[Julio Huato]

And this one by L Summers:

http://www.ft.com/cms/s/0/afd6e830-978b-11dc-9e08-779fd2ac.html

[PEN-L] Northern Rock and moral hazard

[Julio Huato]

raghu wrote:

> Interesting column in the FT by Martin Wolf about the bids to buy Northern 
> Rock.

Another column by Wolf that might also be of interest here:

http://www.ft.com/cms/s/0/afd6e830-978b-11dc-9e08-779fd2ac.html

Why is the FT more bearish than the WSJ?

Re: [PEN-L] economics in the news!

[Sandwichman]

On 11/27/07, Michael Perelman <[EMAIL PROTECTED]> wrote:

> With that background,
> police say, Robb may have thought he could outsmart them.. Although the
> police claim
> that his efforts to outwit them were amateurish.
>

He bludgeoned her while wrapping Christmas presents. That explains it. He
thought he could "beat the rap."



--
Sandwichman

Re: [PEN-L] economics in the news!

[Charles Brown]

clip

 is any social research "serious
science"? not yet.
--
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
way and let people talk.) --  Karl, paraphrasing Dante.

^
CB: Sure there is social research that is serious science.

[PEN-L] Moral hazard

[Charles Brown]

Moral hazard
>From Wikipedia, the free encyclopedia

Moral hazard is the prospect that a party insulated from risk may
behave differently, for example, that an insured party's behaviour will
be more risky than it would without the insurance. Moral hazard arises
because an individual or institution does not bear the full consequences
of its actions, and therefore has a tendency to act less carefully than
it otherwise would, leaving another party to bear some responsibility
for the consequences of those actions.

For example, an individual with insurance against automobile theft may
be less vigilant about locking his car, because the negative
consequences of automobile theft are (partially) borne by the insurance
company.

Moral hazard is related to asymmetric information, a situation in which
one party in a transaction has more information than another. A special
case of moral hazard is called a principal-agent problem, where one
party, called an agent, acts on behalf of another party, called the
principal. The agent usually has more information about his actions or
intentions than the principal does, because the principal usually cannot
perfectly monitor the agent. The agent may have an incentive to act
inappropriately (from the view of the principal) if the interests of the
agent and the principal are not aligned.

Contents [hide]
1 Moral hazard in finance
2 Moral hazard in insurance
3 See also
4 References
5 External links



[edit] Moral hazard in finance
Financial bail-outs of lending institutions by governments, central
banks or other institutions can encourage risky lending in the future,
if those that take the risks come to believe that they will not have to
carry the full burden of losses. Lending institutions need to take risks
by making loans, and usually the most risky loans have the potential for
making the highest return. A moral hazard arises if lending institutions
believe that they can make risky loans that will pay handsomely if the
investment turns out well but they will not have to fully pay for losses
if the investment turns out badly. Taxpayers, depositors, other
creditors have often had to shoulder at least part of the burden of
risky financial decisions made by lending institutions.[1]

Moral hazard can also occur with borrowers. Borrowers may not act
prudently (in the view of the lender) when they invest or spend funds
recklessly. For example, credit card companies often limit the amount
borrowers can spend using their cards, because without such limits those
borrowers may spend borrowed funds recklessly, leading to default.


[edit] Moral hazard in insurance
In insurance markets, moral hazard refers to the case where the
existence of the insurance changes the behaviour of the insured party,
since the insured party no longer bears the full costs of that
behaviour. For example, after purchasing automobile insurance, some may
tend to be less careful about locking the automobile or choose to drive
more, thereby increasing the risk of theft or an accident for the
insurance company. After purchasing fire insurance, some may tend to be
less careful about preventing fires (say, by smoking in bed or
neglecting to replace the batteries in fire alarms).

Before purchasing medical insurance, some may be more careful about
maintaining their health through their own actions because they must
bear the full financial cost of health care, and by implication, after
purchasing medical insurance, may be less careful about maintaining
their health. For example, an obese person has an additional incentive
to lose weight if he believes that he must pay for any health care costs
resulting from his unhealthy condition.

Deductibles, copayment, and coinsurance reduce the risk of moral hazard
since the insured have a financial incentive to avoid making a claim.

Moral hazard has been studied by insurers[2] and academics. See works
by Kenneth Arrow[3] and Tom Baker.[4]


[edit] See also
Perverse incentive
Unintended consequence
Free rider problem
Conflict of interest
Adverse selection
Feedback
Offset hypothesis

[edit] References
^ http://www.ft.com/cms/s/0/5ffd2606-69e8-11dc-a571-779fd2ac.html
Lawrence Summers, "Beware moral hazard fundamentalists", Financial
Times, September 23, 2007.
^ Everett Crosby, "Fire Prevention", in Annals of the American Academy
of Political and Social Science, Vol 26 Insurance pp224-238, Sept 1905.
[1] Crosby was one of the founders of the National Fire Protection
Association.[2]
^ Kenneth Arrow
"Uncertainty and the Welfare Economics of Medical Care" (AER, 1963)
Aspects of the Theory of Risk Bearing (1965)
Essays in the Theory of Risk- Bearing (1971)
^ Tom Baker, "On the Genealogy of Moral hazard", Texas Law Review,
December 1996, 75 Tex. L. Rev. 237

[edit] External links
Discussion of moral hazard and insurance by Robert Schenk
Moral hazard and risk
The Moral Hazard Myth (in Healthcare)
Moral hazard and health care
Moral hazard and Bataan Power Plant
The Moral Hazard Myth
Re

[PEN-L] Open letter to Michael Dell

[Louis Proyect]

http://www.zmag.org/content/showarticle.cfm?SectionID=76&ItemID=14389

Re: [PEN-L] economics in the news!

[Jim Devine]

Soula Avramidis wrote:
> Althusser says he was giving his wife a massage when he discovered he had 
> strangled her and he got off with consignment to a sanitorium. after reading 
> althusser, it does not take much to prove that althusser is insane. i think 
> the same goes for game theory. anyone who really think that is serious 
> science would have to qualify as insane.

sometimes, the "insane" see the world more clearly than the "sane" do.
Mental illness -- as usually defined -- refers to a deep problem with
an individual's ability to co-exist with society at large. Of course,
society is pretty crazy itself. That does not mean that the mentally
ill are always good people who always "get it right." (We should not
go down the path blazed by R.D. Laing.) But it does mean that they can
have a new, different, and even useful understanding of society that
we "sane" mortals lack.

Even though I disagree with a lot in Althusser's work, he did produce
some useful insights. (Maybe it's not all original, but his work
provoked a useful debate.) Similarly, even though John Nash was (is?)
schizophrenic doesn't mean that his ideas are totally bogus. There are
sane people who dig game theory.

is game theory a "serious science"? is any social research "serious
science"? not yet. The problem with game theory is not that it isn't
"serious science" as much as that its users often have _pretensions_
of being serious scientists. (as per usual in social research, they
reify their models, confusing the map with the territory.) And not all
of its practitioners have such pretensions.

--
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
way and let people talk.) --  Karl, paraphrasing Dante.

Re: [PEN-L] economics in the news!

[Robert Scott Gassler]

Wimps. The rector of a university in Belgium a 
few years ago strangled his wife, then stuffed 
her in the trunk of a rental car, then covered 
the car in gasoline and rammed it into a bridge. 
He got something like five years for killing his 
wife and ten for destroying rental property.


He got off after five years because of his past service to the community.

At 15:28 27/11/2007, you wrote:

The New York Times / November 27, 2007
National: Pennsylvania: Professor Pleads Guilty
By THE ASSOCIATED PRESS

An Ivy League professor pleaded guilty to voluntary
manslaughter for killing his wife last year as she wrapped
Christmas presents, telling a judge that he "just lost it"
during an argument. The man, Rafael Robb, 57, a tenured
economics professor at the University of Pennsylvania,
faces 4 ½ to 7 years in prison for bludgeoning his wife,
Ellen, 49, last Dec. 22. She was reportedly planning to
move out the next month and seek a divorce after a rocky
16-year marriage. Detectives theorized that the scene had
been staged to look like a burglary.

yes, but how good is his research?
--
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
way and let people talk.) --  Karl, paraphrasing Dante.

Re: [PEN-L] economics in the news!

[soula avramidis]

Althusser says he was giving his wife a massage when he discovered he had 
strangled her and he got off with consignment to a sanitorium. after reading 
althusser, it does not take much to prove that althusser is insane. i think the 
same goes for game theory. anyone who really think that is serious science 
would have to qualify as insane.

indeed,  the future lasts a long time.

- Original Message 
From: Michael Perelman <[EMAIL PROTECTED]>
To: PEN-L@SUS.CSUCHICO.EDU
Sent: Tuesday, November 27, 2007 5:13:13 PM
Subject: Re: economics in the news!

Here is what I wrote about the case back in January on my Blog

I found the story interesting for 2 reasons. First, the Times reports: .Robb 
was an
expert in game theory, a complex melding of psychology, human behavior and 
economics
. all aimed at determining what one.s adversary will do next. With that 
background,
police say, Robb may have thought he could outsmart them.. Although the police 
claim
that his efforts to outwit them were amateurish.

http://michaelperelman.wordpress.com/2007/01/10/the-futility-of-game-theory-a-murder-mystery/

> yes, but how good is his research?
> --
> Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
> way and let people talk.) --  Karl, paraphrasing Dante.

--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu
michaelperelman.wordpress.com


  

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