The FDA is meeting this week to look at all of the latest information about whether or not certain dental fillings (with mercury and "amalgam alloys") are hazardous to your health. In advance of this week's meetings, the FDA looked over nearly three dozen studies on the matter and found no reason to be concerned. That did not sit well with groups that want to ban dental fillings made partially out of mercury, especially for pregnant women. The Associated Press reported:
The Food and Drug Administration reviewed 34 recent research studies and found "no significant new information" that would change its determination that mercury-based fillings don't harm patients, except in rare cases where they have allergic reactions.
The FDA released a draft of its review ahead of a two-day meeting [PDF] ... to discuss the safety of mercury used in dentistry.
Consumer groups opposed to its use disputed the FDA's conclusions. The groups plan to petition the agency for an immediate ban on use of the cavity-filler in pregnant women.
"The science is over. There is no safe level of exposure," said Charles Brown, a lawyer for one of the groups, Consumers for Dental Choice. "The only thing standing between this and a ban is politics. They are still pretending it is a scientific question, but it isn't."
Here are some more resources for you as you pursue this story:
Bar Codes Often Wrong; Consumers Lose
The Ventura County (Calif.) Star found that even in these days of barcode scanners, consumers often pay much more than they should at retail checkouts for all sorts of reasons. TV stations looking for great November investigative projects might take a look at this. The Star followed a state inspector on retail rounds and found this:
A box of Glade PlugIns on sale for $2.79 rang up on checkout nearly a dollar more at $3.69. Two packages of the same amount of allergy medicine scanned in at $16.99 and $17.99, and a breath rinse came in $1 under its marked price.
"I find pricing errors at stores every week, and the amounts of overcharges are significant," [Teresa] White, [a Ventura County Division of Weights and Measures inspector,] said. "Consumers take it for granted that stores are doing things right. We check to make sure what they're doing is right, and many times it isn't."
A review of the county's inspections over the past year shows shoppers in Ventura County routinely pay more than they should in many stores because of mislabeled and misadvertised prices.
Nearly half the 300 retail stores checked by inspectors in the past year failed inspection by overcharging for at least one item during checkout. Of the 145 stores in violation, many -- including grocery chains such as Ralphs, Vons, Albertsons and Trader Joe's -- were repeat offenders and on probation for prior incidents.
Web Pressures Real Estate Fees
The New York Times ran an interesting piece that could be easily localized. It is a story about how Internet home listings are changing the real estate world. The story -- titled, "The last stand of the 6-percenters?" -- included this passage:
The Internet has radically changed the way consumers buy books and airline tickets, trade stock and learn news. But the real estate industry has resisted change -- and protected its commission structure -- by controlling the information on its Multiple Listing Service database of properties for sale.
"You can find out more on the Internet about an eBay Beanie Baby than you can about a $1 million house," said Glenn Kelman, chief executive of Redfin, a licensed broker in Washington State and California.
The M.L.S. is the only place that contains nearly all the homes for sale in a community. Only brokers can post there, but agents can also display selected information about a listing on their own Web sites and on Realtor.com, a site that works with the National Association of Realtors.
Traditional agents still firmly control the M.L.S., which allows all participating brokers, including Redfin, to view almost every home for sale in a particular area, even those being offered through competitors' agencies. But the typical 6 percent commission, paid out of the seller's proceeds and split between the seller's and buyer's agents, is under attack because, as economists note, it does not serve consumers well.
Economists who have studied the current system say that it also does little for most agents -- except for a few stars, whose impressive earnings give hope to the large majority of less-successful agents and thus encourage them to protect the status quo. Rivals on the Internet say they do this by refusing to cooperate with buyers using Web-based brokers and by denying M.L.S. information to some online firms.
They have not, as yet, fought back by reducing their commissions. And Paul B. Goodrich, the managing director of the Madrona Venture Group in Seattle, an investor in Redfin, says he thinks that they are unlikely ever to do so. "It will be hard for the real estate industry to change the way it compensates its agents," he said. "If Coldwell Banker announced it was paying 1 percent commission to its agents, there would be a mass exodus."
For more, see online services such as ZipRealty and BuySideInc.com
Nightmare Mortgages Soon Due
BusinessWeek followed up on a topic we talked about here last week. Option Adjustable Rate Mortgages (ARMs) will be due soon for many people who bought homes in the boom days of 2004 and 2005 -- and it is not going to be pretty. As the story points out, more than one out of ten mortgages written in the first five months of this year are option ARMS -- and in some states, more than half of all new mortgages are adjustable.
The bill is coming due. Many of the option ARMs taken out in 2004 and 2005 are resetting at much higher payment schedules -- often to the astonishment of people who thought the low installments were fixed for at least five years. And because home prices have leveled off, borrowers can't count on rising equity to bail them out. What's more, steep penalties prevent them from refinancing. The most diligent home buyers asked enough questions to know that option ARMs can be fraught with risk. But others, caught up in real estate mania, ignored or failed to appreciate the risk.
There was plenty more going on behind the scenes they didn't know about, either: that their broker was paid more to sell option ARMs than other mortgages; that their lender is allowed to claim the full monthly payment as revenue on its books even when borrowers choose to pay much less; that the loan's interest rates and up-front fees might not have been set by their bank but rather by a hedge fund; and that they'll soon be confronted with the choice of coughing up higher payments or coughing up their home. The option ARM is "like the neutron bomb," says George McCarthy, a housing economist at New York's Ford Foundation. "It's going to kill all the people but leave the houses standing."
Because banks don't have to report how many option ARMs they underwrite, few choose to do so. But the best available estimates show that option ARMs have soared in popularity. They accounted for as little as 0.5 percent of all mortgages written in 2003, but that shot up to at least 12.3 percent through the first five months of this year, according to First American LoanPerformance, an industry tracker. And while they made up at least 40 percent of mortgages in Salinas, Calif., and 26 percent in Naples, Fla., they're not just found in overheated coastal markets: Through Mar. 31 of this year, at least 51 percent of mortgages in West Virginia and 26% in Wyoming were option ARMs. Stock and bond analysts estimate that as many as 1.3 million borrowers took out as much as $389 billion in option ARMs in 2004 and 2005. And it's not letting up. Despite the housing slump, option ARMs totaling $77.2 billion were written in the second quarter of this year, according to investment bank Keefe, Bruyette & Woods Inc.
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My colleague Michelle Jarboe, coincidentally, published a story on this...
