Friday, April 09, 2010

News you can use 

Casual sex is on the rise in the United States. Whether that is good or bad, you need to be aware!

If you eat vegetables for medicinal purposes only, then you will be interested in this news.

Think carefully before walking away from your mortgage.


By Blogger Brian, at Fri Apr 09, 12:13:00 PM:

TH - just curious if you hold companies to the same standard about walking away from a no-recourse commercial loan on property. Or from a subsidiary that can't pay its debts.  

By Blogger TigerHawk, at Fri Apr 09, 12:24:00 PM:

Actually, it is generally considered to be a very bad idea for an otherwise solvent company to let a subsidiary go bankrupt rather than pay its debts. The executives, for instance, have a "stain" disclosure that they have to make under the securities laws for years to come, and it affects one's dealings with banks and other institutions. So it is not good. As for commercial real estate, it is a mysterious business to me. I do not understand, for example, why anybody loans Donald Trump a dime.  

By Blogger Escort81, at Fri Apr 09, 01:43:00 PM:

Brian makes an interesting point that is worth fleshing out, keeping in mind that the linked article talks about the personal consequences of walking away from a mortgage that some people might not otherwise consider.

I have some experience (going back into the 1990s) with non-recourse debt in project finance for alternative energy (co-gens under the old PURPA law). Each project was structured as a stand-alone on its own merits, and without cross-collaterization. The lenders were sophisticated, as were the borrowers, and everybody went into the projects eyes wide open.

When a particular project became troubled -- either because of cost overruns or revenue shortfall on the "avoided cost" formula of the power purchase agreement with the local utility -- we would inject additional equity to stand behind the project to a point, but at some dollar figure, it stopped making economic sense. Then, the project essentially belongs to the lenders.

I would argue that there is a difference between the financing of a home, and walking from that, and the non-recourse financing of an independent power project, and turning that project over to its lenders under certain circumstances. A home is fundamentally a different kind of asset (because, you know, you live there), and probably should not be as highly leveraged as most project finance deals. All parties in a project finance, especially a new build, understand the relatively higher level of risks involved, in terms of the project being able to built and run to spec, and the revenue streams with the utility to run as expected.

I am not trying to make a moral point here, just trying to distinguish between the types of transactions.

But in a world where all asset classes become commoditized and securitized, Brian makes a point.  

By Blogger DEC, at Fri Apr 09, 01:49:00 PM:

"People in nonromantic sexual relationships today are likely to have multiple partners, researchers have found, and that behavior could promote the spread of sexually transmitted diseases, they note."

That's news?

I shake my head in amazement when researchers and journalists trumpet the discovery of something I have known my whole life.

That seems to happen a lot lately.  

By Blogger Ray, at Fri Apr 09, 03:39:00 PM:

DEC: part of that's the internet making it easier to hear about such things, but part of that is also a very real trend.

As grant funders become more risk-averse in the projects they're willing to fund, you have more people going for the easier results and less hard topics on their research. At the extreme end, you get obvious "results."  

By Anonymous Brian Schmidt, at Fri Apr 09, 04:43:00 PM:

I appreciate TH's and Escort's points as practical ones that aren't about ethics. The point I'd make is that many conservatives seem to think walking away is a moral flaw if done by individuals but not if done by corporations.

FWIW, my wife and I bought a small condo last year in Silicon Valley, with a 25% down payment.  

By Blogger Don Cox, at Sat Apr 10, 07:16:00 AM:

The story about casual sex offers no data from the past, so it does not indicate any shift.

It is not known what percentage of people give true answers when asked about their sex lives, but it may be quite low.

In other words, this further glimpse of the obvious is, as DEC says, a waste of time.  

By Blogger Foxfier, formerly Sailorette, at Sun Apr 11, 01:13:00 AM:

To add to Don Cox's objections, the quotes from the study don't say how many were asked about their last "non-romantic sexual relationship" and hadn't had one.

The assumption that everyone, baring a trivial fraction, have had f***buddies and the important thing is how many were sleeping with more than one person at that time.... (because STDs vanish after a break up....?)

Bah. Going off the reported information, another shock-sci blast for funding.  

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