Author Archives: Emily Holbrook

About Emily Holbrook

Emily Holbrook is a former editor of the Risk Management Monitor and Risk Management magazine. You can read more of her writing at EmilyHolbrook.com.
Игроки всегда ценят удобный и стабильный доступ к играм. Для этого идеально подходит зеркало Вавады, которое позволяет обходить любые ограничения, обеспечивая доступ ко всем бонусам и слотам.

ABA Warns of Fraud

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The American Bankers Association has issued a news release stating that an individual or group of people claiming to be a part of the ABA are sending out letters as a part of a fake check scam. The letters contain a phone number, which people must call to find out how to collect the prize — a ploy to get personal information from the caller. Many of the letters also contain fraudulent checks for amounts between $1,000 and $5,000.

ABA is asking anyone who receives any type of fraudulent phone call, letter or email to contact alert@aba.com.

MacroShares — Betting the House

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Playing the financial markets is risky, and playing with housing derivatives is even more risky, as we’ve seen. But what if there was an exchange-traded stockssecurity for retail investors — a derivative, but one without the derivative stigma attached to it?

That would be MacroShares, the brainchild of famed economists Robert Shiller and Karl Case. The securities reflect the value of the (already widely used) S&P/Case-Schiller home price index in ten large urban areas. Now that it is available, investors everywhere have the option of investing in the housing market, without taking on the exorbitant risk offered by previous instruments. As The Economist states:

The idea has merit. For most people, their homes are their largest single investment. Finding a way to hedge that investment makes sense. Falling prices are accentuated in illiquid markets such as residential property. Having some protection against price falls should reduce concerns over paper losses.

MacroShares are unique in that they offer two different investment options — DMM (MacroShares housing down) and UMM (MacroShares housing up), which is, just as the name states, the option to bet on the downward or upward movement of house prices. Though trading in both are has remained relatively light, there is some good news — more people are betting on UMM than DMM.

Hurricane Bill Claims Two Lives

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The relentless Hurricane Bill has claimed two lives though it never even made landfall.

A 7-year-old girl died after a large wave, produced by Hurricane Bill, knocked her and two others into the Atlantic Ocean off Maine’s Acadia National Park. The Coast Guard was able to rescue all three, but the young girl later died in the hospital.

In Florida, a 54-year-old man drowned in the harsh waters, caused by the hurricane, off New Smyrna Beach.

The storm is also being blamed for the hospitalization of nine others in the U.S. and power failure to more than 23,000 homes and businesses in Nova Scotia.

Bill was downgraded from a to Tropical Storm status early this morning, with winds near 70 mph. The National Hurricane Center has stated that Bill has lost its “tropical characteristics” and the center does not predict any further damage to be created by the storm. According to the Insurance Information Institute:

Over the 20-year period 1988 to 2007, hurricanes and tropical storms made up 45.6 percent of total catastrophe losses.

Though the eastern coast of Canada is not as popular a destination as the coastline of Florida for hurricane landfalls, the area has surely seen its share of hurricane activity, including the following, more recent storms:

  • September 15, 1996 — Hurricane Hortense was the first hurricane to directly strike Nova Scotia since Hurricane Blanche in 1975. Hortense made landfall as a category 1 storm and caused $3 million in damage.
  • September 29, 2003 — Hurricane Juan, which is sometimes considered Atlantic Canada’s most widely destructive hurricane in more than a century, ripped through the coast of Nova Scotia. The storm killed 8 and caused more than $200 million in damage.
  • September 28, 2008 — Hurricane Kyle made landfall in Nova Scotia as a category 1 hurricane, causing power outages to 40,000 and $9 million in damage. 

As always, we will keep an eye on all storm activity in both the Atlantic and the Pacific. Check back each Friday for our Storm Summary series.

Storm Summary 5

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Welcome to the fifth “Storm Summary” post of the hurricane season.

Each Friday from now until the official end of the season (November 30) I will post an update on past and present storms, like the following:

NAME PEAK STATUS DATE LOCATION DAMAGE
Ana TD 28-May Mid Atlantic None
Blanca TS 7/6 to 7/8 East Pacific None
Carlos Cat. 1 7/10 to 7/16 East Pacific None
Dolores TS 7/15 to 7/17 East Pacific None
Enrique TS 8/4 to 8/7 East Pacific None
Felicia Cat.  4 8/3 to 8/11 East Pacific None
Guillermo Cat. 3 8/12 to 8/19 East Pacific None
Bill Cat. 3 8/13 to present Mid Atlantic None

Hurricane Bill became the second named storm and first major hurricane of the 2009 Atlantic hurricane season. At 8 a.m. this morning, Bill’s maximum winds had decreased to near 115 mph, making it close to the category 2 label. The National Hurricane Center said the center of the storm had become “less organized.”

Hurricane Bill is located approximately 385 miles south of Bermuda and is not expected to make landfall as it heads towards the cooler waters of the North Atlantic.

Though the Atlantic has only seen two named storms, the waters of the Pacific are seeing constant activity, due, in part, to El Niño, which is “the periodic warming of central and eastern tropical Pacific waters [that] occurs on average every two to five years and typically lasts about 12 months.” Although most people think of this phenomenon in negative terms for the damage it can spur on the West Coast, it is actually beneficial to the East Coast/Gulf Coast in the sense that warmer waters in the Pacific usually create conditions that suppress Atlantic hurricanes. Why exactly this occurs is not something I’m qualified to explain but, as I recall, it has something to do with warm and cool air mixing in a different way and creating a “wind shear” that helps prevent storms from developing.

The International Research Institute for Climate and Society can probably explain it better.

For constant, up-to-date storm information, visit NOAA. And for breaking information on the insured losses the storms create, check out the Insurance Information Institute and the Insurance Services Office.

Most importantly, don’t forget to check back next Friday for our sixth “Storm Summary” installment.