Marketplace - American Public Media

Rich folks can do things regular people can’t. Like eat a banana split with Mountain Dew-flavored ice cream on their helicopter commute home. And land that chopper at a mansion they bought with no money down.

Right, no money down. For those rich enough, buying a home can be as easy as showing banks their money. All some buyers have to do is pledge part of their wealth as collateral, instead of coughing up a down payment.

Many buyers used no down payment loans during the housing boom to get homes they couldn't afford. That led to a wave of foreclosures. So it's reasonable to expect that 100 percent home financing would have died. And it has, for nearly all Americans. But no down payment loans are crawling out of the grave -- for the wealthy, at least.

It may sound a little silly for the well-heeled to skip a doable down payment and pay interest they don’t have to. But it’s actually an interesting gamble that has appeal for banks and buyers.

“Interest rates are historically low. At the same time, the stock market is doing really well,” says Stijn Van Nieuwerburgh, director of New York University’s Center for Real Estate Finance Research. “Some investors or some households are asking themselves, ‘How can I profit from these low interest rates?’”

Here’s how. Say wealthy buyers pay 3 percent interest on a mortgage. Because they don't have to make a down payment, they don’t have to divert money from investments, such as stocks. If those investments earn more than 3 percent, that difference is profit.

"If they’re clients who have a high enough net worth, maybe for them, that’s a good decision," says Chris Mayer, a real estate professor at Columbia Business School. But he cautions, "Those investments could go down in value."

The risks are real. If the economy falters, rich borrowers could see their home and investment values drop. Or, adjustable mortgage rates could rise, eating up their profit. As for the banks, they’re enjoying this new demand from the wealthy.

“The banks are now trying to find new borrowers to lend to,” NYU's Van Nieuwerburgh says, “and this is some loan business that, in their view, is pretty safe and they’re happy to do.”

Pretty safe, because these borrowers have a big house and lots of money as collateral. If necessary, the lender could require wealthy borrowers to pledge more of their investments if home values drop.

The days of no down payment loans for property speculators or people with weak credit are over. But there no down payment loans for some homebuyers who aren't rich -- just yet. But they'll have to have certain professions, like the one practiced by Bill Cosby's TV character, who was famous for eye-scorching sweater patterns rather than the scrubs he wore on the job.

“If Cliff Huxtable came and started looking for a loan with us, we’d be delighted to lend to him,” Greg Wheeler, president of the private bank at BOK Financial, says, referring to the doctor played by Cosby.

He’s kidding, of course. Wheeler’s bank is not in the business of handing over money to 80's sitcom doctors. But it does have a growing business in no down payment loans for real doctors, even those just starting out. Many banks have special products for doctors, who can be profitable customers over the years.

“They tend to be very loyal clients,” Wheeler explains. “We want to engender that loyalty and have them join us early as clients. And we keep them for a very, very long time.”

No down payment loans may evoke memories of a swelling housing bubble. But in another form, they’re a way for banks to snare some big money clients.

Kai Ryssdal: We heard a lot about no money down mortgages during the housing boom. People using them to buy houses they couldn't afford. We all know how that ended, but get this: now we're hearing about them again.

This time around, really, really rich people using them to buy houses they can definitely afford. Sounds a little silly to skip a totally doable down payment and pay interest they don't have to. But it's actually an interesting gamble for those buyers and their banks.

Marketplace's Mark Garrison explains.

Mark Garrison: Rich folks can do things regular people can’t. Like eat a banana split with Mountain Dew-flavored ice cream on their helicopter commute home. And land that chopper at a mansion they bought with no money down. That’s right, no money down. For those rich enough, buying a home can be as easy as showing banks their money. All some buyers have to do is pledge their wealth as collateral, instead of coughing up a down payment. NYU real estate finance professor Stijn Van Nieuwerburgh explains the appeal.

Stijn Van Nieuwerburgh: Interest rates are historically low. At the same time, the stock market is doing really well. And some investors or some households are asking themselves, ‘how can I profit from these low interest rates?’

Here’s how. Say wealthy buyers pay 3% interest on a mortgage. They don’t have to divert their money to make a down payment. And if they leave it in investments that earn more than 3%, that difference is the profit.

Chris Mayer: If they’re clients who have a high enough net worth, maybe for them, that’s a good decision.

But Columbia real estate professor Chris Mayer is quick to add that there is risk. If the economy falters, rich borrowers could see their home and investment values drop. Or adjustable mortgage rates could rise, eating up their profit. As for the banks, NYU’s Van Nieuwerburgh says they’re enjoying this new demand from the wealthy.

Van Nieuwerburgh: The banks are now trying to find new borrowers to lend to and this is some loan business that, in their view, is pretty safe and they’re happy to do.

Pretty safe, because these borrowers have lots of money and a big house as collateral. The days of no down payment loans for speculators or people with weak credit are over. But there is a way to get a no down payment loan if you’re not rich, yet. You’ll need a certain job, like this fellow, known for sweaters with patterns that positively scorch the eyes.

Greg Wheeler: If Cliff Huxtable came and started looking for a loan with us, we’d be delighted to lend to him.

Greg Wheeler is kidding, of course. You don’t become president of The Private Bank at BOK Financial by handing over money to 80s sitcom doctors. But the bank does have a growing business in no down payment loans for real doctors, even those just starting out.

Wheeler: They tend to be very loyal clients and we wanna engender that loyalty and have them join us early as clients. And we keep them for a very, very long time.

Many banks have special mortgages for doctors, who can be profitable customers over the years. No down payment loans may evoke memories of a swelling housing bubble. But in another form, they’re a way for banks to snare some big money clients. In New York, I'm Mark Garrison, for Marketplace.

They say seeing is believing, but what you see isn't all that there is. We make judgments based on how people look or sound and are otherwise affected by outside influences all the time: music, paint color, the weather -- you name it. And most of the time we don't even know this is going on.

Adam Alter teaches marketing and psychology at New York University's Stern School of Business and he's got a new book out called "Drunk Tank Pink" about how our environment affects our decision-making.

In the book, Alter reveals that in general we are sharper, clearer thinkers when it's cold outside and that the colors around us can impact our mood -- from how angry we are to how willing we are to buy. He says his book is not so much about taking advantage of others as it is about educating consumers on what these cues are, because one they recognize them they can cope with them and deal with them and sometimes even harness them for personal benefit.

When asked if having all of this information about colors and music has changed his decision-making, he said that he has an advantage: He's color blind.

The Marketplace Wealth and Poverty Desk is launching a series of stories exploring the safety net.  No we’re not talking about that thing circus acrobats use. We’re talking about the things people have to do when they’ve fallen financially.

In order to do this we’re going to need your help.  Have you ever had to go on government programs like welfare or food stamps? Or maybe you’ve had to ask your family or a close friend for financial assistance. If so, we want to hear from you!

As this series continues we want you to let us know what you’ve had to do when things got rough.  We’ll take your answers and post them (no last names will be used).  If we really like your answer, we’ll contact you for an interview!

Here are some great responses we’ve already gotten from people!

Kurt, Portland, OR-

“Eleven years ago I lost both my full-time jobs within a few months of each other. My income went from 80,000 one year to 8,000 the next. After a year and a half of applying for positions, interviewing and still not having a job, I took out a $10,000 loan to go back to school to study website development.”

Bernie, New Carlisle, OH-

“As an educated, talented person with a bi-polar challenge and an entrepreneurial spirit I have, from time-to-time had to rely on help when a business venture didn't go well or when something prevented me from finding a stop-gap job. One time when things were financially tough it took a relative stranger to make me aware of food assistance and medicaid to help with a baby who was coming. One other time we were forced to get government food assistance and most recently we received help from what is called the "Hardest Hit Funds" which helped with our mortgage payments. Sure wish I had rich parents who could help; but like so many other people in our country I don't relatives to fall back on.”

Geoff, Belmont, MA-

“I lost my 10-year job in March 2011. I was old enough to take social security but did not take that option right away. I have a child to support and a wife who was also jobless who had run out of unemployment benefits. What kept us going was my unemployment benefits and food stamps, although these did not come to enough to pay rent and COBRA premiums, let alone our food and utilities. So I tapped my savings.”

Frank, San Diego, CA-

“I am my own safety net and I am also the safety net of our family and friends. From the time I was very young, I have always been saving. I have always had a cushion of one form or another. My family and friends call me the Bank of Frank and for some of my family and friends, I have been their lender of last resort and at times, their deposit institution.”

Kevin, Chanhassen, MN-

“I was laid off. We cut back on our spending, my wife worked part time and I made a strenuous effort to get a new job. If appropriate, we collected unemployment.”

Robert, Coon Rapids, MN-

“Three months after the birth of our 3rd child, I was fired. My spouse was not working at the time, so we lost 100% of our income. It took 3 months for me to find another job (with a loss of 1/3rd of our income). We relied on cutting expenses, using savings and our parents from whom we borrowed a car for the duration of my unemployment (I had lost my company car) and borrowed enough money to buy the car necessary for the job I ultimately found.”

Peter, Prescott, AZ-

My wife lost her job this year... and in a previous year we had to short-sell our home so we had no access to credit due to the hit in our credit rating. fortunately, despite our income of 50,000 gross for a family of four, we live quite well because we have cut waste our of our home economics. waste = all cost, no benefit. so, in terms of utilities, resources, food, and behaviors... we simply do not waste anything. everything has one or many more uses. it is not hard, it is not problematic... just shifts in habits so that we can live quite well without concern by maximizing benefits while minimizing costs.

Gregory, San Francisco, CA-

I believe that I am solidly middle class, but maybe upper middle class. My wife and I earn solid incomes. We are both professionals, and have little to fear from the economic downturn. At most we will be inconvenienced. Because of the above statement, we are avid savers. We max out on our 401K plans, and fund our IRAs to the maximum. On the rare occasion that we have an unexpected expense, we draw from savings to cover the cost.

Kryshon, Houston, TX-

“I took the opportunity to start a business. We are now in our sixth year and growing. No help just desperate. Hard work and sacrifice are my safety nets. Its 9pm and I will be at the office for another few hours. “

The Marketplace Wealth and Poverty Desk is launching a series of stories exploring the safety net.  No we’re not talking about that thing circus acrobats use. We’re talking about the things people have to do when they’ve fallen financially.

In order to do this we’re going to need your help.  Have you ever had to go on government programs like welfare or food stamps? Or maybe you’ve had to ask your family or a close friend for financial assistance. If so, we want to hear from you!

As this series continues we want you to let us know what you’ve had to do when things got rough.  We’ll take your answers and post them (no last names will be used).  If we really like your answer, we’ll contact you for an interview!

Here are some great responses we’ve already gotten from people!

Kurt, Portland, OR-

“Eleven years ago I lost both my full-time jobs within a few months of each other. My income went from 80,000 one year to 8,000 the next. After a year and a half of applying for positions, interviewing and still not having a job, I took out a $10,000 loan to go back to school to study website development.”

Bernie, New Carlisle, OH-

“As an educated, talented person with a bi-polar challenge and an entrepreneurial spirit I have, from time-to-time had to rely on help when a business venture didn't go well or when something prevented me from finding a stop-gap job. One time when things were financially tough it took a relative stranger to make me aware of food assistance and medicaid to help with a baby who was coming. One other time we were forced to get government food assistance and most recently we received help from what is called the "Hardest Hit Funds" which helped with our mortgage payments. Sure wish I had rich parents who could help; but like so many other people in our country I don't relatives to fall back on.”

Geoff, Belmont, MA-

“I lost my 10-year job in March 2011. I was old enough to take social security but did not take that option right away. I have a child to support and a wife who was also jobless who had run out of unemployment benefits. What kept us going was my unemployment benefits and food stamps, although these did not come to enough to pay rent and COBRA premiums, let alone our food and utilities. So I tapped my savings.”

Frank, San Diego, CA-

“I am my own safety net and I am also the safety net of our family and friends. From the time I was very young, I have always been saving. I have always had a cushion of one form or another. My family and friends call me the Bank of Frank and for some of my family and friends, I have been their lender of last resort and at times, their deposit institution.”

Kevin, Chanhassen, MN-

“I was laid off. We cut back on our spending, my wife worked part time and I made a strenuous effort to get a new job. If appropriate, we collected unemployment.”

Robert, Coon Rapids, MN-

“Three months after the birth of our 3rd child, I was fired. My spouse was not working at the time, so we lost 100% of our income. It took 3 months for me to find another job (with a loss of 1/3rd of our income). We relied on cutting expenses, using savings and our parents from whom we borrowed a car for the duration of my unemployment (I had lost my company car) and borrowed enough money to buy the car necessary for the job I ultimately found.”

Peter, Prescott, AZ-

My wife lost her job this year... and in a previous year we had to short-sell our home so we had no access to credit due to the hit in our credit rating. fortunately, despite our income of 50,000 gross for a family of four, we live quite well because we have cut waste our of our home economics. waste = all cost, no benefit. so, in terms of utilities, resources, food, and behaviors... we simply do not waste anything. everything has one or many more uses. it is not hard, it is not problematic... just shifts in habits so that we can live quite well without concern by maximizing benefits while minimizing costs.

Gregory, San Francisco, CA-

I believe that I am solidly middle class, but maybe upper middle class. My wife and I earn solid incomes. We are both professionals, and have little to fear from the economic downturn. At most we will be inconvenienced. Because of the above statement, we are avid savers. We max out on our 401K plans, and fund our IRAs to the maximum. On the rare occasion that we have an unexpected expense, we draw from savings to cover the cost.

Kryshon, Houston, TX-

“I took the opportunity to start a business. We are now in our sixth year and growing. No help just desperate. Hard work and sacrifice are my safety nets. Its 9pm and I will be at the office for another few hours. “

There's no small amount of emotion involved when you're buying a home. It's important to know the market you're buying in, of course, but it's just as important to know your realtor. He or she is, after all, the enabler when it comes to getting that dream house. Your emotional partner, if everything works out right. So now, a realtor talking about realtors. Alison Rogers writes about that in this week's special section of the New York Times. She's a Manhattan-based real estate agent at DG Neary Realty and a columnist for Time.com.

"I actually think -- and I made this point in the Times story -- that the more honest you are with your realtor, the more your realtor can help you," says Rogers. "If the realtor knows that this is the property for you, then he or she will kill themselves to get it for you."

But by showing all your cards and letting an agent know you love a property, don't you risk paying more? Rogers says in the end it doesn't matter because a good, experienced agent will be able to tell when you are in love with a property. She's particularly fond of one clientele -- millennials.

"They're so very, very straightforward about what they want and what they need. They're so direct in their feedback. As a result, I would lie down on coals to make any of my millennial clients happy," she says.

On the other hand, Rogers says she dreads working to find a home for attorneys because by training they are very risk averse. Real estate requires a leap of faith that attorneys have difficulty making, she says.  

Because buying a house is such a huge financial and emotional decision, Rogers says most real estate agents try hard to make their clients happy (they also have another motivation -- they want to do future deals with you). But for homebuyers who are unsatisfied with their agent, she offers this tip: be upfront; let the agent know why it's not working out and give him or her a chance to change their behavior. If things don't turn around, fire them.

Rogers says that as the housing market continues to recover from the collapse more than six years ago, people's emotions have changed as well.

"All real estate is local, so we really have seen two markets. In Manhattan, where I work, probably in some sections of L.A. where you are, in San Francisco, in D.C. it's still hot. There's a strong emotional factor of people getting into bidding wars and saying, 'Wait, I read in the paper that there was a housing collapse, how come I'm in a bidding war?' You have that in the hot, urban markets," says Rogers. "For people in markets where there really was a collapse -- markets like Phoenix or Miami -- the emotional factor has been 'I really don't want to let go of this house, where I spent so many Thanksgivings. And darnit, do I really have to take a 30 percent loss?' So it's almost insult upon injury."

These days, Rogers says the marekt's generally a little harder for buyers than sellers because with the explosion of Internet data, choice is now infinite. You can take two, three years to buy a property now because there's always new things that pop up on your computer, she says. 

Indoor mapping uses Wi-Fi, Bluetooth and even sensors within smartphones to help you you're your way inside a building. It can also help marketers find you.

"There's been a secret, quiet but really furious research and development war going on behind the scenes," says Erik Bovee, V.P. of business development of Indoo.rs, an indoor navigation tech company. He says Microsoft, Google, Apple -- even cell phone manufacturers like Samsung and HTC -- are all trying to gobble up indoor mapping technology. It kind of makes sense.

"People spend 80 percent of their time indoors," says Bovee.

And there are times when having a map inside a giant airport or store could be handy for a consumer.

"You know, you're in a really large Ikea, very maze-like, and you're looking for a certain kind of pillow," Bovee says. "Well, there will be an Ikea app with navigation capability."

But it's not just about navigation, it's about marketing. Imagine you're looking for that pillow in a department store. Siri can say, "The pillow is on the second floor. Go up the stairs and turn right. While you're at it, why don't you get a new sweater?. I'm just saying. I actually feel bad for you because your sweater is so terrible. Here's a 10 percent coupon."

That's not totally far-fetched.

"There's also the analytics component," say Tony Costa, a senior analyst at Forrester Research.

Retailers are willing to pay to know where customers go, where they linger so they can target ads for example.

"They could measure when somebody got an offer when say they're leaving for lunch," Costa says. "And they could track that person coming into the store and seeing the success rate of that offer."

He says we have early examples -- Walmart has an app to help you find what's on your grocery list and an interactive map that tells you what's on sale.

It can be tough to see a primary care physician today. Just wait till next year when another 30 million patients or so get insurance under Obamacare.

“We need all hands on deck. We need more family physicians. We need more primary care nurse practitioners, we need more physicians assistants…we need pharmacists. Everyone with a focus on the patient,” says Dr. Wanda Filer, a physician in York, Penn., and board member of the American Academy of Family Physicians.  

The nation is facing a shortage of primary care physicians. Estimates range from several thousand today to 52,000 by 2050. Annual spending on primary care is approximately $200 billion.

Not surprisingly, nurse practitioners, physician assistants, pharmacists and others are raising their hands to help fill the growing gap in coverage.

Nurse practitioners like Andrea Vettori who runs the Mary Howard Health Center in Center City, Philadelphia. Vettori says if she sees a patient outside her scope of practice, she will refer the patient directly to a specialist. There’s no need for a primary care physician in the equation.

“People talk about the future of health care and NP filling the role of the primary care provider, physicians becoming specialists. I don’t see any reason why that couldn’t be,” she says.

Rand Corporation health economist David Auerbach says there’s good reason for primary care doctors to be looking over their shoulders. Nurse practitioners can treat 85 percent of what a primary care doctor can treat.

“The number of primary physicians is growing very slowly. And the number of NPs is probably going to double in the next 15-20 years,” he says.  

All this isn’t lost on powerful medical organizations like the Family Physicians and the American Medical Association. Those groups say providers should work together -- as a team -- so long as physicians run the ship.

Bring on the turf war.

“Currently there are 12 states with active legislation looking at utilizing nurse practitioners at the top of their education to meet patient care needs,” says Tay Kopanos with the American Association of Nurse Practitioners.

She says nurses want to end laws that require some level of physician oversight, like for prescriptions or diagnosis.

Doctors say they aren’t opposed because they’re afraid other medical providers will steal their jobs. They say they’re concerned about patient safety. What if there is a complex case and the nurse practitioner misses something?

“I see it as physicians being true to their oath. And being true to their training and education. And I think most physicians feel that way. They are not threatened by this. At the end of the day what they want to do is deliver the best healthcare possible,” says Dr. Adris Hoven, president-elect of the American Medical Association.

Dr. John Rowe at the Columbia School of Public Health dismisses those concerns. He says nurse practitioners are already working without primary care doctors. 

“The fact is this is going on in 16-17 other states and there is no evidence that it’s not good for the patients,” he says.

As a doctor himself, Rowe gets why doctors are concerned.

“The physicians feel they have something special to offer. And being told there are individuals who are less well trained can do it as well as they could is a very difficult lesson for them,” he says.

But Rowe says if doctors and nurses can’t come together to solve the primary care shortage, that could be a painful and expensive lesson for all of us.

It can be tough to see a primary care physician today. Just wait till next year when another 30 million patients or so get insurance under Obamacare.

“We need all hands on deck. We need more family physicians. We need more primary care nurse practitioners, we need more physicians assistants…we need pharmacists. Everyone with a focus on the patient,” says Dr. Wanda Filer, a physician in York, Pennsylvania and board member of the American Academy of Family Physicians.  

The nation is facing a shortage of primary care physicians. Estimates range from several thousand today to 52,000 by 2050. Annual spending on primary care is approximately $200 billion.

Not surprisingly, nurse practitioners, physician assistants, pharmacists and others are raising their hands to help fill the growing gap in coverage.

Nurse practitioners like Andrea Vettori who runs the Mary Howard Health Center in Center City, Philadelphia. Vettori says if she sees a patient outside her scope of practice, she will refer the patient directly to a specialist. There’s no need for a primary care physician in the equation.

“People talk about the future of health care and NP filling the role of the primary care provider, physicians becoming specialists. I don’t see any reason why that couldn’t be,” she says.

Rand Corporation health economist David Auerbach says there’s good reason for primary care doctors to be looking over their shoulders. Nurse practitioners can treat 85 percent of what a primary care doctor can treat.

“The number of primary physicians is growing very slowly. And the number of NPs is probably going to double in the next 15-20 years,” he says.  

All this isn’t lost on powerful medical organizations like the Family Physicians and the American Medical Association. Those groups say providers should work together -- as a team -- so long as physicians run the ship.

Bring on the turf war.

“Currently there are 12 states with active legislation looking at utilizing nurse practitioners at the top of their education to meet patient care needs,” says Tay Kopanos with the American Association of Nurse Practitioners.

She says nurses want to end laws that require some level of physician oversight, like for prescriptions or diagnosis.

Doctors say they aren’t opposed because they’re afraid other medical providers will steal their jobs. They say they’re concerned about patient safety. What if there is a complex case and the nurse practitioner misses something?

“I see it as physicians being true to their oath. And being true to their training and education. And I think most physicians feel that way. They are not threatened by this. At the end of the day what they want to do is deliver the best healthcare possible,” says Dr. Adris Hoven, president-elect of the American Medical Association.

Dr. John Rowe at the Columbia School of Public Health dismisses those concerns. He says nurse practitioners are already working without primary care doctors. 

“The fact is this is going on in 16-17 other states and there is no evidence that it’s not good for the patients,” he says.

As a doctor himself, Rowe gets why doctors are concerned.

“The physicians feel they have something special to offer. And being told there are individuals who are less well trained can do it as well as they could is a very difficult lesson for them,” he says.

But Rowe says if doctors and nurses can’t come together to solve the primary care shortage, that could be a painful and expensive lesson for all of us.

The last time Chinese soccer fans saw the former chief of the country’s national league, he was being led away in chains after receiving a ten year prison sentence for taking bribes and fixing matches.

Joining him in jail were the league’s previous boss, the former national team captain, four other players on China’s only team to play in the world cup, and last, but not least, China’s most famous referee, Lu Jun, a man nicknamed ‘golden whistle.’

The state of Chinese soccer couldn’t be worse. Enter David Beckham. "I’m not a politician, so anything that has happened in the past has nothing to do with me," Beckham told reporters late last week, "but what is going on in the future will have something to do with me."

The new global ambassador for Chinese soccer followed through with his promise this weekend. He offered to take a free kick in front of the Chinese media wearing a designer suit.

He slipped and fell on his butt.

Images of Beckham taking a tumble were repeated on Chinese news stations, and China’s soccer league was back to square one.

“If I were David Beckham, I’d be careful about making promises about the future of Chinese football,” says Gady Epstein, Beijing correspondent for the Economist, who has written extensively about the problems with China’s soccer league, “As China’s economy has grown, as more money has gotten into the game, there have been more opportunities for match-fixing.”

Epstein says corruption is as big a problem in China’s soccer league as it is in its one party system.

On the street in Shanghai, a soccer fan who would only give his surname, Shen, says the state of Chinese soccer is immune to a ‘mend it like Beckham’ approach. Shen says China’s soccer system is so pathetic that fewer and fewer parents are pushing their kids to play the sport. Even though he’s a soccer fan, Shen says he didn’t pay attention to Beckham’s visit. The only thing he’d heard about it was that Beckham had fallen on his behind.

The Cyprus affair is a brutal reminder of the fact that when you “save” your money by putting it in a bank, you’re not really “saving” it at all: You’re lending it.

The bank borrows from you at a certain rate of interest, and then turns around and lends the same money out at a greater rate of interest. Well, not all of it. It keeps a wee bit of money on hand so that when we want to do a bit of shopping, we can get cash out of the ATM.

The Cypriot banks did two things. First, they offered depositors really good rates of interest -- as high as 4.75 percent for long-term accounts -- which attracted not only gaggles of old Cypriot ladies, but also hordes of foreigners.

How could the banks afford to pay such great rates? By investing the money from those “savers” in something that itself paid really great rates of interest: Greek government bonds.

When Greece got bailed out, the value of the bonds was cut in half. But that wasn’t all: The fat interest rate that those bonds were paying was also cut -- to just 3.5 percent.

That meant Cyprus’ banks had a lot less money coming in the door. But they still had to pay their depositors -- and in some cases they’re paying depositors more than they’re getting from the bonds.

In other words, the Cypriot banks are deep in debt, and they’re not making enough money to make their interest payments. They’re on the verge of going bust.

For help, they turned first to their European neighbors, who agreed to lend them some cash. They’ve now got more money coming in the door, but it’s not enough. Now they need to attack the problem at the other end, by reducing the amount they owe.

Who do they owe money to? The depositors.

Now, some of those depositors are protected -- accounts under 100,000 Euros are insured -- so you can’t touch them. But the other accounts?

Whack.

Cyprus is taking a big chunk of the money in those accounts -- around 30 percent.

The banks are a bit like the patriarch of a large family who has taken a huge pay cut. His family consists of a bunch of children, aged anywhere between 5- and 25-years-old, and now he's struggling to feed everyone. He gets a loan from his uncle, but it’s not enough. Something’s gotta give! He can’t stop feeding  the little kids. But the over 18s? Sorry boys and girls. From now on, 30 percent less soup for you.

The 30 percent "tax" on those big accounts does two things: First, it brings money into the door of the banks, giving them more money to operate with. Second, it reduces the amount of interest they have to pay to those account holders each month.

Feelings are running high, and two things could happen here. The adult offspring -- the depositors who are getting whacked in this case -- may decide to take their business elsewhere. And the little kids -- the small depositors -- may lose trust in the system and the banks. Sure their money is safe for now. But what about tomorrow? They may decide their money’s safer elsewhere. Maybe in their mattresses. Maybe offshore.

Either way, that’ll mean big problems, for Cyprus and its banks.

We're getting more signs the U.S. housing market is on the mend. Construction of new homes has hit a four-year high, and nearly two million homeowners have gone from being underwater on their mortgages to seeing positive equity. And that got us wondering: Should we expect a return to the bad old days of using our homes as ATMs?  

One reason so many homeowners sank so far underwater when the housing bubble burst was they had used their homes as an easy source of cash, taking out home equity lines of credit, often for consumer spending.

After the collapse, the Shaw neighborhood in St. Louis ended up like so many in the country. As home prices dropped, many people owed more on their mortgages than their properties were worth.

Real estate broker Matt Kastner points out to a four-family building in Shaw that sold for $250,000 in 2007.  A year later, he says, you couldn't get $150,000 for it. "Once you got into a building like this, you were pretty much stuck with it for a while."

Home values in Shaw have been slowly rising since. But even as prices rebound, Kastner says tapping any new-found positive equity is probably the last thing on homeowner's minds.

"A lot of these properties, they're going to have to get better appraisals and pay down some of their mortgage before they're really able to get out from under stuff, refinance, or pull cash out," says Kastner.

Richard Sharp is a senior vice president at First National Bank.  He says, even though home prices are rising, most people are still a long way from positive equity.

"We haven't seen a lot of that yet," Sharp said. "One of the big things I think is that in general the values are picking up, but they're picking up from depressed levels.  So they're just getting back in the ballpark of where they were."

Just ten percent of property owners said they would consider applying for a home equity loan in a recent survey conducted by real estate website Trulia.

"People are much more likely to try to get more money out of there house, or get more money to spend on other things through refinancing, than borrowing against their home," says Jed Kolko, an economist with Trulia.

Kolko says it will take a much bigger bump in home values than the current seven percent increase to encourage people to borrow against their equity.

The real positive sign he says is that rising values, mean fewer people defaulting on their mortgages, which is good for homeowners and their neighbors.

Emotions and money are a complicated pairing in any case. Throw in the parent-child relationship -- also sometimes complicated -- and you've got real problems. Turns out, senior citizens are racking up debt to help pay for stuff their kids want and kids are digging themselves into a hole to give their parents a hand -- and it's a mess. Carmen Wong Ulrich is a personal finance journalist and author of "The Real Cost of Living" who wrote about this issue for the New York Times.

"It's recently historically gotten very bad. There was a survey by Demos and AARP, they found that the average credit card balance for folks over 50 is now bigger than for folks under 50 by about $2,000. This is the first time that that's ever flipped. It really says a lot about what's going on with that generation," says Wong Ulrich.

One of the reasons that seniors are going into debt is because many of them are helping family members. The report found that nearly a quarter of folks over 50 gave money to or paid the debts of relatives by adding to their own credit card balance. But that's both adding debt to the younger generation and making things worse for the older generation, too.

"Every generation is going deeper and deeper into debt and the younger generations are helping the aging parents who are in trouble. But a lot of the thought process behind the how and why this kind of happens -- with this generation in particular -- and I've talked to psychologists about this, there's a lot of loneliness; there's a lot of guilt for making their children, they want their children to have a better life than they had. So their children's expectations are not being managed. The grown children say, 'I need my wedding paid for,' 'I need college paid for.' All of these things at the same time when we have seniors hit at the same time by a bad economy and bad market."

Wong Ulrich says one reason that some seniors wind up with debt problems and other don't has to do with their mindset. Culturally-speaking, Wong Ulrich says that the first generation of seniors to have easy access to credit may end up becoming super consumers who accumulate a lot of stuff over time. Moreover, seniors are guilted into giving a better life to their children without realizing that they may be enabling their kids to not work for themselves or learn the value of money.

The generation of older seniors who are children of people who grew up during the Great Depression....

"You see these kids of Depression-era parents who really went the opposite direction. Part of it is, after the Depression and after -- especially the '60s -- what we saw was this 'You can have the better toaster,' 'You can have a better car.' There was a lot of needing to upgrade. It's the first generation of "Keeping up with the Joneses." But then you add to that, in the '80s and '90s, easy access to credit and also a great housing market for a while there. And you have an ability to basically live well outside of your means," says Wong Ulrich.

Wong Ulrich advises seniors whose kids want them to go into debt to take care of themselves first. "It's up to you to say, 'You know what, if I do that and dip into my retirement, I might have to possibly move in with you.' Something tells me they may back off a little bit if you put it that way," she says.

Wong Ulrich says to end the cycle, seniors need to develop a plan that you can stick to in order to get rid of the debt, to be able to say no, and even get support from your community. If most of the trouble comes from helping family members, she says you need to go outside the family for support -- like meeting with a nonprofit credit counselor or a financial planner.

If you love something, the saying goes, set it free. Let it go. Give it away, even. Americans give away, on average, about 5 percent of our earnings. Some give more. Some less. A few give everything. Paul Sullivan is the Wealth Matters columnist for The New York Times. He writes in the Times' special section this week about young people who've inherited money -- big money -- and who've decided to give all of it away. Sullivan says it may sound crazy, but these so-called "trust fund progressives" have a different mindset.

"This particular group, they're motivated by social justice," says Sullivan. "They have all this privilege, they realize they have all this privelege, yet they feel a little guilty about it."

Sullivan says these types of inheritors are looking for ways to give money away -- and there's an organization called Resource Generation that brings together young people with financial wealth to help them figure out how to give their money way to causes that matter to them.

"They are writing checks to traditional nonprofits, to charities. They are also making low or no interest loans to organizations that they believe in. Lastly, they are helping their friends. They are perhaps buying a new car for somebody who needs to drive to work or helping somebody who needs to pay a big medical bill," says Sullivan.

Exactly how much money are we talking about here? There's a wide range -- everything from inheriting a house worth $500,000 to having access to a foundation worth $100 million. And the young wealthy are not just giving away dividend checks and extra income, they are dipping into principal and giving away vast sums.

If all of this sounds crazy, Sullivan says there is some young idealism involved here. Inheritors who are involved with Resource Generation are between the ages of 18-35. "They kick them out when they are 35 and become cynical," he jokes.

Eurozone finance ministers reached a last minute deal to grant Cyprus a $13 billion bailout early this morning. Those with large deposits in Cypriot banks could be hit will a tax of 30 percent in order to help fund the bailout.

Richard DeKaser, economist with Wells Fargo, discusses the impact of Cyprus' bailout on the U.S. economy.

And a new drug, in the final stages of approval by the FDA, could make it easier to give addicts medication without using pills and risking abuse.

Eurozone finance ministers reached a last minute deal to grant Cyprus a $13 billion bailout early this morning. Those with large deposits in Cypriot banks could be hit will a tax of 30 percent in order to help fund the bailout.

Richard DeKaser, economist with Wells Fargo, joins Marketplace's Mark Garrison to discuss the impact of Cyprus' bailout on the U.S. economy.

A country with lots of debt isn’t going to see much growth, right? That's a widely-held belief among the political class, supported by well-funded bipartisan PR campaigns. But many economists just don't agree.

Bloomberg senior writer David Lynch joins Marketplace's Mark Garrison to explain both sides of the debt debate.

Back in 2009 I was working at a bank in London, and had begun earning enough money to really start investing. I'd studied behavioral economics all through college and grad school, so I knew I'd be better at investing than the average Joe.

This was in the midst of the Great Recession, and the price of oil was incredibly low. I had read a few articles, and thought the price had hit bottom. I was sure it could only go up, so I bought into a fund where every 1 percent increase in the price of oil would net me a 2 percent return. Not too bad. I thought I'd need to hold the position at least three months to see the returns I expected. Now all I had to do was wait.

I checked my investment all the time, sometimes twice a day or more. To my chagrin, it fell the whole first week. The second week started out the same, and I got really stressed. Why wasn't it going up? Had I got something wrong? But then the price of oil began to rebound, and by the end of the second week, the investment had returned to the buying price. I sold immediately with zero return. Well, not exactly zero return -- with the cost of the "buy" and "sell" trades factored in, I made a return of -2 percent. Ouch.

So even with all my training in behavioral economics, I fell for a classic investment mistake we call the disposition effect. It's probably one of the most studied behavioral biases out there. It says investors tend to "sell the winners, and hold onto the losers" for purely emotional reasons. Basically, it feels good to close out a position with a gain (selling the winners). And it feels really bad to sell at a loss. As a result, investors tend to hold onto their losers for longer -- often until they break even.

Now obviously, if you sell your winners and hold onto your losers, you end up with a portfolio of losers -- not a good place to be. While I had studied the disposition effect inside and out, it wasn't enough to prevent me from falling prey to it. In the heat of the moment, watching my investment and pride plummet, I was most concerned with ending my anxiety, and not feeling like an idiot.

This isn't surprising -- we know we shouldn't do a lot of things like smoke, drink, eat junk food, etc. But sometimes the hard part isn't the knowing, it's the doing.

Eurozone finance ministers reached a last minute deal to grant Cyprus a $13 billion bailout early this morning. Those with large deposits in Cypriot banks could be hit will a tax of 30 percent in order to help fund the bailout.

But the news extends beyond Cyprus, which is a popular off-shore location for international bank depositors. Many Russians with money in Cypriot banks will feel the pain of the bailout. And that, according to Russian Prime Minister Dmitry Medvedev, amounts to thievery.

"The stealing of what has already been stolen continues," Medvedev said.

The BBC's Steve Rosenberg in Moscow joins Marketplace's Mark Garrison to explain how Russians are responding to the latest bailout plan in Cyprus.

After more than a week of turmoil, eurozone finance ministers reached a last minute deal to grant Cyprus a $13 billion bailout.

Under the current agreement, bank depositors with less than $130,000 will not lose any money. However, bigger depositors -- most of them foreigners -- may be taxed up to 40 percent. Last week, the Cypriot parliament rejected a bailout plan that would have taxed smaller bank depositors 7 percent.

Cyprus' finance minister Michalis Sarris greeted the deal with relief.

"We have averted the possibility of bankruptcy, we really avoided a disastrous exit from the eurozone," Sarris said.

Though Cyprus achieved a rescue deal, analysts say serious damage to the country's banking sector has been done. As banks reopen, many foreign depositors are likely to move capital out of the country. The rating agency Moody's has said in a report this morning that the bailout dealings in Cyprus "will have profound long-term negative consequences" for the country and the region.

Today President Barack Obama will designate five new national monuments. They’re spread all over the country: There's part of the San Juan Islands in Washington state, the Harriet Tubman Underground Railroad National Monument in Maryland, the Rio Grande del Norte National Monument in New Mexico, the First State National Monument in Delaware and the Charles Young Buffalo Soldiers National Monument in Ohio.

All of that new green space, could bring some serious greenbacks into those local economies says economist Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities.

"Those people are going to spend some money in the parks, maybe they’ll buy some food, some souvenirs. That type of spending helps boost local economies," says Bersnstein.

The Rio Grande Del Norte monument in New Mexico is expected to bring $15 million a year to the area.

That’s partially because Americans are starting to travel again says Douglas Quinby, principal analyst at PhoCusWright, a travel industry research firm.

"The economy is definitely improving, so we are optimistic [we are] going to see some gains in 2013," he says. 

Still, it could be a rough year for parks. Many are expected to take a hit under the sequestration budget cuts and will have to cut staff and reduce hours.