Systemic Risk and the Refinancing Ratchet Effect

The confluence of three trends in the U.S. residential housing market-rising home prices, declining interest rates, and near-frictionless refinancing opportunities-led to vastly increased systemic risk in the financial system. Individually, each of these trends is benign, but when they occur simultaneously, as they did over the past decade, they impose an unintentional synchronization of homeowner leverage. This synchronization, coupled with the indivisibility of residential real estate that prevents homeowners from deleveraging when property values decline and homeowner equity deteriorates, conspire to create a "ratchet" effect in which homeowner leverage is maintained during good times without the ability to decrease leverage during bad times. If refinancing-facilitated homeowner-equity extraction is sufficiently widespread-as it was during the years leading up to the peak of the U.S. residential real-estate market-the inadvertent coordination of leverage during a market rise implies higher correlation of defaults during a market drop. To measure the systemic impact of this ratchet effect, we simulate the U.S. housing market with and without equity extractions, and estimate the losses absorbed by mortgage lenders by valuing the embedded put-option in non-recourse mortgages. Our simulations generate loss estimates of $1.5 trillion from June 2006 to December 2008 under historical market conditions, compared to simulated losses of$280 billion in the absence of equity extractions.Risk; Financial Crisis; Household Finance; Real Estate; Subprime

Investigations of afterpulsing and detection efficiency recovery in superconducting nanowire single-photon detectors

We report on the observation of a non-uniform dark count rate in Superconducting Nanowire Single Photon Detectors (SNSPDs), specifically focusing on an afterpulsing effect present when the SNSPD is operated at a high bias current regime. The afterpulsing exists for real detection events (triggered by input photons) as well as for dark counts (no laser input). In our standard set-up, the afterpulsing is most likely to occur at around 180 ns following a detection event, for both real counts and dark counts. We characterize the afterpulsing behavior and speculate that it is not due to the SNSPD itself but rather the amplifiers used to boost the electrical output signal from the SNSPD. We show that the afterpulsing indeed disappears when we use a different amplifier with a better low frequency response. We also examine the short-lived enhancement of detection efficiency during the recovery of the SNSPD due to temporary perturbation of the bias and grounding conditions

Evolution of Design and Construction of Lornex L-L Tailings Dam

The evolution of the Lornex tailings disposal facility, in particular the Lower L-L Dam, throughout the design and construction phases is presented with the emphasis on how economic considerations have dictated this process. Major episodes described here include: the early conversion to an energy efficient t wo-dam storage scheme, the reduction of the size of the L-L Starter Dam, the buttressing of the Starter Dam in an area involving soft foundations, and the development of hydraulic means to use cycloned tailings sand for annual raising of the L-L Dam. Extensive instrumentation was installed to monitor the performance of the L-L dam in critical construction periods. This helped the designers to adapt the design of the dam to its actual performance in order to ensure its safety

Cognitive behavioral therapy for the management of multiple sclerosis–related pain: a randomized clinical trial

BACKGROUND: Pain is a common and often debilitating symptom among persons with multiple sclerosis (PwMS). Besides interfering with daily functioning, pain in MS is associated with higher levels of depression and anxiety. While cognitive-behavioral therapy (CBT) for pain has been found to be an effective treatment in other populations, there has been a dearth of research in PwMS. METHODS: PwMS with at least moderate pain severity (N = 20) were randomly assigned to one of two groups: CBT plus standard care (CBT/SC) or MS-related education plus standard care (ED/SC), each of which met for 12 sessions. Changes in pain severity, pain interference, and depressive symptom severity from baseline to the 15 week follow-up were assessed using a 2×2 factorial design. Participants also rated their satisfaction with their treatment and accomplishment of personally meaningful behavioral goals. RESULTS: Both treatment groups rated their treatment satisfaction as very high and their behavioral goals as largely met, although only the CBT/SC group's mean goal accomplishment ratings represented significant improvement. While there were no significant differences between groups post-treatment on the three primary outcomes, there was an overall improvement over time for pain severity, pain interference, and depressive symptom severity. CONCLUSIONS: CBT or education-based programs may be helpful adjunctive treatments for PwMS experiencing pain.Accepted manuscrip

Systemic Risk and the Refinancing Ratchet Effect

The confluence of three trends in the U.S. residential housing market - rising home prices, declining interest rates, and near-frictionless refinancing opportunities - led to vastly increased systemic risk in the financial system. Individually, each of these trends is benign, but when they occur simultaneously, as they did over the past decade, they impose an unintentional synchronization of homeowner leverage. This synchronization, coupled with the indivisibility of residential real estate that prevents homeowners from deleveraging when property values decline and homeowner equity deteriorates, conspire to create a “ratchet” effect in which homeowner leverage is maintained or increased during good times without the ability to decrease leverage during bad times. If refinancing-facilitated homeowner-equity extraction is sufficiently widespread - as it was during the years leading up to the peak of the U.S. residential real-estate market - the inadvertent coordination of leverage during a market rise implies higher correlation of defaults during a market drop. To measure the systemic impact of this ratchet effect, we simulate the U.S. housing market with and without equity extractions, and estimate the losses absorbed by mortgage lenders by valuing the embedded put-option in non-recourse mortgages. Our simulations generate loss estimates of $1.5 trillion from June 2006 to December 2008 under historical market conditions, compared to simulated losses of$280 billion in the absence of equity extractions.Research support from the MIT Laboratory for Financial Engineering is gratefully acknowledged

Seismic Design of Tialings Dam An Overview of its Evolution and New Challenges

This paper first provides an overview of the evolution of tailings dam engineering over the years. It then highlights key factors affecting seismic performance of tailings dams: such as site seismicity, foundation and damfill geotechnical characteristics, dam design, construction, operation and decommissioning, seismic slope stability, and dam rehabilitation. Finally, it reviews some of the recent trends that lead to new challenges to the engineering profession. These challenges include: coping with heightened public concern about dam safety; balancing potential conflict between seismic and environmental requirements; and addressing issues introduced by globalisation of the mining industry. Institutional responses and technological tools available to meet these challenges are outlined

Mid-Infrared Images of Luminous Infrared Galaxies in a Merging Sequence

We report mid-infrared observations of several luminous infrared galaxies (LIGs) carried out with the Infrared Space Observatory. Our sample was chosen to represent different phases of a merger sequence of galaxy-galaxy interaction with special emphasis on early/intermediate stages of merging. The mid-infrared emission of these LIGs shows extended structures for the early and intermediate mergers, indicating that most of the mid-infrared luminosities are not from a central active galactic nucleus (AGN). Both the infrared hardness (indicated by the IRAS 12, 25, and 60 \micron flux density ratios) and the peak-to-total flux density ratios of these LIGs increase as projected separation of these interacting galaxies become smaller, consistent with increasing star formation activities that are concentrated to a smaller area as the merging process advances. These observations provide among the first observational constraint of largely theoretically based scenarios.Comment: 10 pages, 3 figures, please refer to ApJ Letters for the final versio