House Prices Rise Again, but the Pace Could Slow

In 2013’s last glimpse at the housing market, figures released on Tuesday showed that home prices in major metro areas kept rising in October. Year-over-year, prices were up 13.6 percent, the biggest gain in more than seven years.

After plummeting during the housing bust, prices have increased steadily since the spring of 2012. Prices in 20 major American metro areas increased a modest 0.2 percent between September and October, without seasonal adjustment, evidence that the quick rebound in prices is slowing, according to the closely watched S&P/Case-Shiller data. Higher mortgage rates might continue to slow the pace of improvement going forward, analysts say.

Nationally, the increase in home prices is moderating, the S&P/Case-Shiller analysis said. Prices decreased in nine metro areas between September and October, including Denver, Chicago and Washington, whereas just one saw price decreases between August and September.

“Monthly numbers show we are living on borrowed time and the boom is fading,” said David M. Blitzer of S&P Dow Jones Indices in an analysis of the new data. A big question, he said, is how quickly the Federal Reserve pulls back from its extraordinary efforts to keep rates low.

“The key economic question facing housing is the Fed’s future course to scale back quantitative easing and how this will affect mortgage rates,” Mr. Blitzer said. “Other housing data paint a mixed picture suggesting that we may be close to the peak gains in prices.” He added: “Most forecasts for home prices point to single-digit growth in 2014.”

In many metro areas where prices declined sharply — particularly those encompassing Sun Belt and Rust Belt cities like Phoenix, Las Vegas and Detroit — similarly sharp rebounds followed. But generally, prices have not touched their pre-bust heights, with prices across the country remaining about 20 percent lower, the S&P/Case-Shiller data show. In Dallas and Denver, however, prices have hit new peaks, the report said.

Many economists expect price increases to moderate next year, with higher prices and higher mortgage costs making homes less affordable, even though the labor market recovery might pick up some steam and inventory might increase in some areas.

In December, the Fed said that improving economic conditions warranted the central bank starting to ease up on its stimulus efforts. The Fed said it would cut its monthly purchases of Treasury and mortgage-backed securities to $75 billion a month from $85 billion a month.

“Even after this reduction, we will be still expanding our holdings of longer-term securities at a rapid pace,” Ben S. Bernanke, the Fed chairman, said at a December news conference, his last before Janet L. Yellen takes over, pending Senate confirmation. “Our sizable and still-increasing holdings will continue to put downward pressure on longer-term interest rates, support mortgage markets, and make financial conditions more accommodative, which in turn should promote further progress in the labor market.”

But mortgage rates have risen, and the pace of sales has slowed in many metro areas. According to the National Association of Realtors, the government-backed mortgage finance company, existing-home sales dropped 4.3 percent to a seasonally adjusted annual rate of 4.9 million in November. New-home sales dropped 2.1 percent to a seasonally adjusted annual rate of 464,000, the Census Bureau said.

“While most housing markets still remain affordable, rising mortgage rates and rising house prices over the past six months are making it more challenging for the typical family to purchase a home without stretching beyond their means,” said Frank Nothaft, chief economist at Freddie Mac, in an analysis. “We expect mortgage rates to rise over the coming year, so it’s critical we start to see more job gains and income growth in the coming year.”

In some areas, limited housing supply has pushed prices high. “Home sales are hurt by higher mortgage interest rates, constrained inventory and continuing tight credit,” said Lawrence Yun of the National Association of Realtors, in an analysis. “There is a pent-up demand for both rental and owner-occupied housing as household formation will inevitably burst out, but the bottleneck is in limited housing supply, due to the slow recovery in new home construction.”

In a separate report released Tuesday, the Conference Board, a research group, said that consumer confidence jumped to 78.1 in December, from 72.0 in November, with sentiment about current economic conditions reaching its highest level since the spring of 2008. “Despite the many challenges throughout 2013, consumers are in better spirits today than when the year began,” said Lynn Franco, director of economic indicators at the Conference Board.

Many economists do expect jobs and income growth to improve, and to have a resulting effect on housing. “We expect that the improving employment picture next year will be accompanied by a sustained increase in interest rates, which in turn will roll over into the mortgage market,” said Doug Duncan, chief economist at Fannie Mae. He said the housing recovery might continue on a “modest upward trend.”

In the S&P/Case-Shiller report, a survey of 10 major metro areas, as well as a broader survey of 20 major metro areas, showed year-on-year price increases of about 13.6 percent in October, the biggest such rise since early 2006.

Economists have said foreclosures and short sales are making up a smaller proportion of sales, making housing price gains look larger, since those homes can trade at steep discounts.

Promised Fix for Health Site Could Squeeze Some Users

To help meet that schedule, the Obama administration, in an abrupt shift, named a “general contractor” on Friday to oversee changes to the troubled Web site of the federal marketplace.

Such a condensed time frame raises the question of how hundreds of thousands of people whose current policies do not comply with the health law will obtain new coverage in time, and how millions who may qualify for subsidies will enroll. Some experts predicted a groundswell of demands from Congress and elsewhere to delay the deadlines.

Jeffrey D. Zients, President Obama’s troubleshooter on the project, said the general contractor, Quality Software Services Inc., a unit of the UnitedHealth Group, would now “manage the overall effort,” like a general contractor on a home improvement project. Notably, that company had a role in developing one of the most troubled components of the marketplace, which helped verify the identities of those registering.

Until now, the federal Centers for Medicare and Medicaid Services served as the project’s quarterback. Contractors complained that the agency did not have the expertise to lead such a complex and ambitious undertaking, requiring the integration of dozens of programs and databases.

People involved in the repair effort said the Nov. 30 deadline was challenging but not impossible to meet. Mr. Zients, a management expert who is in line to take over as the chief White House economic adviser on Jan. 1, said, “By the end of November, HealthCare.gov will work smoothly for the vast majority of users.”

“It will take a lot of work,” he said. “A lot of problems need to be addressed. But let me be clear: HealthCare.gov is fixable.”

Since it went live on Oct. 1, the Web site has frustrated millions of people trying to obtain insurance under Mr. Obama’s health care law. For the administration, making it work is increasingly urgent for both political and practical reasons.

In recent weeks, insurance companies have notified hundreds of thousands of people around the country that their current coverage will end on Dec. 31 because it does not comply with the Affordable Care Act. For example, the policies may not provide “essential health benefits” like maternity care and may not cover as much of the medical costs as required by new federal standards.

In a typical letter, about 25,000 policyholders of Independence Blue Cross in Pennsylvania were informed, “As a result of the health care law, your current health plan will be discontinued effective December 31, 2013.”

Consumers living in Washington, D.C., were informed by CareFirst BlueCross BlueShield that “your current plan will cease to exist” on Jan. 1 because it does not conform to the new federal mandates.

Blue Cross and Blue Shield of Florida said it was informing about 300,000 subscribers that their insurance policies did not meet the new requirements.

Consumers are typically offered new coverage that meets federal standards, but the cost of comparable policies may be more or less than what they now pay, depending on a person’s age, income, family size, place of residence and tobacco use, among other factors.

Millions of consumers with individual policies are expected to qualify for subsidized rates. But the government must calculate the correct subsidies and process the enrollments — functions that were to be handled mainly by the Web site. People can also file applications on paper or by phone.

More than 19 million people have visited the Web site in the three and a half weeks since it opened as the main online vehicle in 36 states for choosing insurance coverage. But insurance executives said they were still receiving incomplete and inaccurate data on those who manage to get through the application process.

Mr. Zients said more than ninety percent of users were now able to create accounts, but only three out of ten were “getting through the application process.”

Robert Pear reported from Washington, and Sharon LaFraniere from New York. Ian Austen contributed reporting from Ottawa, and Reed Abelson from New York.

Civil Practice: Woodchips Are Real Estate, So School Could Be Liable for Injury

A school district is facing potential liability for injuries a sixth-grade girl suffered on a school playground because a Monroe County judge ruled the layer of woodchips covering the playground qualified as the school's real estate.

Disruptions: Apple’s Next Unveiling Could Make or Break a Business

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Shortcuts: A Special Purchase to Curb Behavior Could, Just as Easily, Terrify a Pet

We thought we had solved the problem by installing a new door that opens by radio frequency emitted from the tags on our cats’ collars. The only problem was that the cats hated the noise the door made and refused to use it.

We hoped they’d get used to it.

But six months later, Archie and Lily still view it with the same petrified stare as they did in the beginning.

That made me wonder about other pet problems and the products that owners buy to solve them.

There’s a caveat. What works for one pet may prove disastrous for another: different pets, different temperaments and different owners. Nonetheless, it can be useful to hear what some animal behavior experts and longtime pet owners suggest — or don’t — and why.

After all, Americans spent $53.3 billion on pet products last year, more than $12 billion of that for supplies and over-the-counter medicine, according to the American Pet Products Association.

First, what about sprays that are supposed to stop your cat from scratching your furniture? I’ve bought several bottles of different brands and spritzed them on the arms of the living room chairs. The cats walk up, sniff and then proceed to shred the chair as usual.

“I haven’t had much luck with sprays,” said Stephen L. Zawistowski, a science adviser to the American Society for the Prevention of Cruelty to Animals. He suggested putting double-sided tape, aluminum foil or Bubble Wrap on the places the cats like to scratch, while offering them a scratching post nearby.

That strategy has worked for me. I put catnip on a flat, corrugated cardboard box, and the cats claw away. It is the Trader Joe’s Double Wide Cat Scratcher and costs about $7.

Other sprays that promise to get rid of urine smells rarely do. Almost everyone I spoke to, including a friend who is down to five cats from eight, said none of them seemed to truly work.

The idea behind all these products, such as the most common, Nature’s Miracle, is not only to dispel the unpleasant odor for humans, but to discourage the pets from urinating in the same spot again.

“I no longer buy any of them,” my friend said. “I mix together half vinegar and half water with three to four drops of Dawn liquid dishwashing detergent and use it.” It seems to work, she said, even though it sometimes makes her house smell like salad dressing.

Automatic litter boxes don’t seem to have a lot of fans. They work this way: Sometime after the cat has done its business, a rake runs through the litter and deposits the excrement into a bag.

Besides being expensive — $100 and up — Mr. Zawistowski said that if the automatic cleaner started while the cats were in the box, it could frighten them so much they would avoid it altogether. If you own multiple cats, one can jump in after the first and “you have to make sure it doesn’t operate while the second cat is in the box,” he said.

A cat behavior that most of us find rather distasteful is the inclination to drink from toilets. One solution is to lower the toilet seat, but with two teenage boys in the house, it might be easier to train the cats to shut the lid.

Some suggest buying drinking fountains, but Megan Lynch, a cat owner, reported, “Our cat was terrified of the sound it made and didn’t want to go near it. We kept it for a month or so to see if he’d warm up to it, but he continued to regard it as an alien being that we had inexplicably brought into our home.”

Cats may drink from toilet bowls because the water can be fresher and cooler than water that’s been sitting in a bowl all day, Mr. Zawistowski said. That’s why he suggested refilling the bowl several times a day, wiping it out each time with a paper towel and then giving it a good scrubbing every few days.

Now on to dogs. One common product — retractable leashes — provoked the ire of several experts.

Economic View: A Carbon Tax That America Could Live With

THIS summer, the Obama administration released the President’s Climate Action Plan. It is a grab bag of regulations and policy initiatives aimed at reducing the nation’s carbon emissions, which many scientists believe contribute to global warming.

This got me to thinking: What might I do to reduce my own carbon emissions? Here are some things I came up with. Think of them as Greg Mankiw’s Climate Action Plan.

• I could buy a smaller, more fuel-efficient car.

• I could swap my traditional car for one with new technology, like a hybrid or an electric vehicle.

• I could car-pool to work.

• I could use public transportation.

• I could move closer to my job.

• I could buy a smaller house that requires less energy to heat and cool.

• I could adjust the thermostat to keep my home cooler in winter and warmer in summer.

• I could put solar panels on my roof.

• I could buy more energy-efficient home appliances.

• I could eat more locally produced foods, which need less fuel to transport.

I could go on, but by now you get the idea. Every day, we all make lifestyle choices that affect how much carbon is emitted. These decisions are personal but have global impact. Economists call the effects of our personal decisions on others “externalities.”

The main question is how we, as a society, ensure that we all make the right decisions, taking into account both the personal impact of our actions and the externalities. There are three approaches.

One approach is to appeal to individuals’ sense of social responsibility. This is what President Jimmy Carter did during the energy crisis of the 1970s. He encouraged Americans to adjust their thermostats and insulate their homes. I can still picture Mr. Carter sitting in the chilly White House, wearing his cardigan sweater.

It’s true that as a socially responsible economist, I always weigh the global costs and global benefits before pushing the ignition button on my car. (Yes, my tongue is firmly planted in my cheek.) But expecting most people to act this way is unrealistic. Life is busy, everyone has his or her own priorities, and even knowing the global impact of one’s own actions is a daunting task.

THE second approach is to use government regulation to change the decisions that people make. An example is the Corporate Average Fuel Economy, or CAFE, standards that regulate the emissions of cars sold. The President’s Climate Action Plan is filled with small regulatory changes aimed at making Americans live more carbon-efficient lives.

Yet this regulatory approach is fraught with problems. One is that it creates an inevitable tension between the products that consumers want to buy and the products that companies are allowed to sell. Robert A. Lutz, the former General Motors executive, laments that CAFE standards are “a huge bureaucratic nightmare.” He says, “CAFE is like trying to cure obesity by requiring clothing manufacturers to make smaller sizes.”

Yet another problem with such regulations is that they can influence only a small number of crucial decisions. In a free society, the government can’t easily regulate how close I live to work, whether I car-pool with my neighbor or how often I don a cardigan. Yet if we are to reduce carbon emissions at minimum cost, we need a policy that encompasses all possible margins of adjustment.

Fortunately, a policy broader in scope is possible, which brings us to the third approach to dealing with climate externalities: putting a price on carbon emissions. If the government charged a fee for each emission of carbon, that fee would be built into the prices of products and lifestyles. When making everyday decisions, people would naturally look at the prices they face and, in effect, take into account the global impact of their choices. In economics jargon, a price on carbon would induce people to “internalize the externality.”

A bill introduced this year by Representatives Henry A. Waxman and Earl Blumenauer and Senators Sheldon Whitehouse and Brian Schatz does exactly that. Their proposed carbon fee — or carbon tax, if you prefer — is more effective and less invasive than the regulatory approach that the federal government has traditionally pursued.

The four sponsors are all Democrats, which raises the question of whether such legislation could ever make its way through the Republican-controlled House of Representatives. The crucial point is what is done with the revenue raised by the carbon fee. If it’s used to finance larger government, Republicans would have every reason to balk. But if the Democratic sponsors conceded to using the new revenue to reduce personal and corporate income tax rates, a bipartisan compromise is possible to imagine.

Among economists, the issue is largely a no-brainer. In December 2011, the IGM Forum asked a panel of 41 prominent economists about this statement: “A tax on the carbon content of fuels would be a less expensive way to reduce carbon-dioxide emissions than would a collection of policies such as ‘corporate average fuel economy’ requirements for automobiles.” Ninety percent of the panelists agreed.

Could such an overwhelming consensus of economists be wrong? Well, actually, yes. But in this case, I am confident that the economics profession has it right. The hard part is persuading the public and the politicians.

N. Gregory Mankiw is a professor of economics at Harvard. He was an adviser to President George W. Bush.

Fee Cuts Could Hurt Indigent Defendants, CJA Lawyers Say

Private attorneys who accept appointments in federal criminal cases will be feeling the sting of the U.S. government's budget sequestration in the form of reduced hourly rates, but some Criminal Justice Act attorneys say that the real trauma will be felt by the people in need of their representation.

Bits Blog: Could the Hyperloop Really Cost $6 Billion? Critics Say No

Tapering of Stimulus Could Start as Soon as September, 2 Fed Presidents Hint

Charles L. Evans, the president of the Federal Reserve Bank of Chicago, said he would not rule out the possibility that the Fed could start tapering as early as next month.

The remarks came at a breakfast with reporters in Chicago and echoed through the markets during the day, because Mr. Evans is a voting member of the Federal Open Market Committee, which sets Fed policy, and because he has generally supported more aggressive efforts to stimulate the economy in the past.

In a separate interview with Market News International, the president of the Federal Reserve Bank of Atlanta, Dennis P. Lockhart, also indicated a September move was an option. Mr. Lockhart is not a voting member of the committee, however, so his comments carry a bit less weight than those of Mr. Evans.

On Wall Street, which has benefited from the Fed’s accommodative stance, stocks dropped after the comments, and major market indexes closed lower by a little more than half a percentage point.

The Fed and its chairman, Ben S. Bernanke, have signaled that the central bank’s policy of buying $85 billion a month in government bonds and mortgage-backed securities will be wound down if the economy improves further and unemployment continues to fall.

Mr. Bernanke has said he envisions the stimulus program coming to an end by the middle of next year if unemployment falls to about 7 percent. Last Friday, the Labor Department reported that unemployment in July fell to 7.4 percent, from 7.6 percent in June.

Mr. Bernanke has not said, however, when the tapering will begin, only that the speed and timing of any easing is contingent upon continued signs of strength in the economy.

Traders and economists expect bond purchases to be reduced before the end of 2013, but opinion is divided about whether that will start as early as next month, or come as late as December.

The Fed’s ultimate decision will have wide-reaching impact. The Fed’s aggressive bond buying has helped keep long-term interests rates low; mortgage rates have risen by roughly a full percentage point since Mr. Bernanke first raised the possibility of tapering in May. In addition, the stimulus has also helped prop up the big rally on Wall Street.

While the remarks by Mr. Evans and Mr. Lockhart on Tuesday did not resolve the debate, their tone suggested that tapering was indeed on the horizon if the economy held up.

“Adjustments to asset purchases are going to be conditional on our outlook materializing,” Mr. Evans said. “It’s going to be data-dependent.”

“I do expect though that the outlook will materialize, and we are quite likely to reduce the flow purchase rate starting later this year — couldn’t tell you which month that will be — and it’s likely to wind down, over time, in a couple or a few stages,” he said.

In terms of September, Mr. Evans said, “I clearly would not rule it out, it’s going to depend on the data — the data have been not so bad.”

For his part, Mr. Lockhart, the Atlanta Fed president, also said there was plenty of wiggle room for the central bank, depending on how economic growth shaped up over the coming months.

If growth turns out to be weaker than expected, he said, a reduction in stimulus efforts could be put off.

“If we see a deterioration from this point, and I would say my more realistic fear is just a kind of ambiguous picture of mixed data that signal neither accelerating strength nor necessarily deterioration, but that kind of moping along in the middle, then I think it’s not a foregone conclusion that the asset purchase program should be removed or removed rapidly,” he said.

Dean Maki, chief United States economist at Barclays, said: “Neither Fed president was willing to commit to September nor rule it out. What this is telling us is the F.O.M.C. is keeping its options open and awaiting further data.”

DealBook: Pension Reform Could Disrupt Investment Funds

Court Papers Say Spanier Could File Suit Against Freeh

Almost a year to the day after an internal investigation implicated former Penn State President Graham Spanier in covering up accusations against Jerry Sandusky, Spanier has filed a praecipe for writ of summons against Louis Freeh, the leader of the investigation, potentially paving the way for a suit against Freeh for libel, defamation or slander.

F.D.A. Rule Could Open Generic Drug Makers to Suits

The Food and Drug Administration on Wednesday signaled its intention to permit generic drug makers to make changes to their safety labels, a move that could open the door to lawsuits against generic drug companies for the first time since a Supreme Court decision barred such suits two years ago.

Consumer advocates applauded the development, calling it a necessary fix for a system that they say is unfair to patients who take generic medicines.

“It’s common sense,” said Dr. Sidney M. Wolfe, a senior adviser to the Health Research Group at Public Citizen, which in 2011 petitioned the F.D.A. to pass just such a rule. “It will obviously end this situation where people are being harmed physically and yet, although they are harmed, they have no right to go into court and get redress for serious damages.”

Dozens of lawsuits against generic drug manufacturers have been dismissed since 2011, when the Supreme Court ruled that because the generic companies must, by law, use the same label warnings as their brand name counterparts they cannot be sued for failing to alert patients about the risks of taking their drugs. Last month, the Supreme Court ruled — on similar grounds — that patients also may not sue generic drug makers by claiming that the drug was defectively designed.

The F.D.A.’s intentions came in the form of a bureaucratic step in which the agency must notify the Office of Management and Budget of its plans to publish a proposed new rule. In a summary posted Wednesday on the budget office’s Web site, the F.D.A. said the proposed rule would “create parity” between generic and brand-name drug makers with respect to how they update their labels — the lengthy list of a drug’s uses, dosages and risks.

Under the current system, brand-name manufacturers can change the label if they receive important new information about their drug. If the F.D.A. agrees that the label change is necessary, the generic manufacturers of the drug must also change their labels. The rule change could also allow generic manufacturers to change their labels if they became aware of safety concerns, which could make them liable if a court were to find they failed to warn patients about potential harms.

“It is a first step toward acknowledging that there is a problem with the current system,” said Michael Johnson, a lawyer who represented Gladys Mensing, one of the patients who sued generic drug companies in the 2011 Supreme Court case, Pliva v. Mensing. “It doesn’t make sense to have one set of rules for the name brand and another set of rules for the generics.”

Sandy Walsh, an F.D.A. spokeswoman, noted that the agency had said before that it was considering such a rule change. “It is premature to cite what changes in the regulations might be,” she said in an e-mail. “Discussions are under way.”

The Generic Pharmaceutical Association, an industry group, declined to comment on Wednesday. In the past, generic drug companies have argued against such a change, saying that it could create a chaotic situation in which several different labels existed for the same drug.

Jay Lefkowitz, the lawyer who represented the generic drug makers in both Supreme Court cases, said in an e-mail, “We will obviously look very carefully at whatever the F.D.A. proposes, if in fact it ends up proposing any change at all.”

The notice posted Wednesday indicates the agency’s intent to publish a proposed rule by September, when the public would be asked to comment.

Voter ID Ads Could Continue Until Election Day

Commonwealth Court Judge Robert Simpson this morning declined to hasten the pace for deciding on a motion filed by challengers to Pennsylvania?s new voter ID law asking him to enforce the injunction he issued earlier this month keeping the law from taking effect this November.

Strategies: Why Many Retirees Could Outlive a $1 Million Nest Egg

In 1953, when “How to Marry a Millionaire” was in movie theaters, $1 million bought the equivalent of $8.7 million today. Now $1 million won’t even buy an average Manhattan apartment or come remotely close to paying the average salary of an N.B.A. basketball player.

Still, $1 million is more money than 9 in 10 American families possess. It may no longer be a symbol of boundless wealth, but as a retirement nest egg, $1 million is relatively big. It may seem like a lot to live on.

But in many ways, it’s not.

Inflation isn’t the only thing that’s whittled down the $1 million. The topsy-turvy world of today’s financial markets — particularly, the still-ultralow interest rates in the bond market — is upending what many people thought they understood about how to pay for life after work.

“We’re facing a crisis right now, and it’s going to get worse,” said Alicia Munnell, director of the Center for Retirement Research at Boston College. “Most people haven’t saved nearly enough, not even people who have put away $1 million.”

For people close to retirement, the problem is acute. The conventional financial advice is that the older you get, the more you should put into bonds, which are widely considered safer than stocks. But consider this bleak picture: A typical 65-year-old couple with $1 million in tax-free municipal bonds want to retire. They plan to withdraw 4 percent of their savings a year — a common, rule-of-thumb drawdown. But under current conditions, if they spend that $40,000 a year, adjusted for inflation, there is a 72 percent probability that they will run through their bond portfolio before they die.

Suddenly, that risk-free bond portfolio is looking risky. “The probabilities are remarkably grim for retirees who insist on holding only bonds in the belief that they are safe,” says Seth J. Masters, the chief investment officer of Bernstein Global Wealth Management, a Manhattan-based firm, which ran these projections for Sunday Business. “Because we live in this world we tend to think of it as ‘normal,’ but from the standpoint of financial market history, it’s not normal at all,” Mr. Masters said. “And that’s very clear when you look at fixed-income returns.”

Several rounds of intervention by the Federal Reserve and other central banks, aimed at stimulating a moribund economy, have helped to suppress rates, and so has low inflation. Low rates have led to cheaper mortgages and credit cards, helping to balance family budgets.

But for savers, low rates have been a trial. The fundamental problem is that benchmark Treasury yields have been well below 4 percent since early in the financial crisis. That creates brutal math: if your portfolio’s income is below 4 percent, you can’t withdraw 4 percent annually, and add inflation adjustments, without depleting that portfolio over time.

And with rising life expectancies, many people will have a lot of time: the average 65-year-old woman today can be expected to live to 86, a man to 84. One out of 10 people who are 65 today will live past 95, according to projections from the Social Security Administration.

“If you’re invested only in bonds and you’re withdrawing 4 percent, plus inflation, your portfolio will decline,” said Maria A. Bruno, senior investment analyst at Vanguard. “That’s why we recommend that most people hold some equities. And why it’s important to be flexible.” In some years, investors may need to withdraw less than 4 percent, she said, and in some years they can take more.

Clearly, such flexibility depends on individual circumstances. Billionaires can afford to be very flexible: just 2 percent of a $1 billion portfolio is still $20 million. With economizing, even a big spender should be able to scrape by on that. But $20,000 — the cash flow from a $1 million portfolio at 2 percent — won’t take you very far in the United States today.

And if you’re not close to being a millionaire — if you’re starting, say, with $10,000 in financial assets — you’ve got very little flexibility indeed. Yet $10,890 is the median financial net worth of an American household today, according to calculations by Edward N. Wolff, an economics professor at New York University. (He bases this estimate on 2010 Federal Reserve data, which he has updated for Sunday Business according to changes in relevant market indexes.)

A millionaire household lives in elite territory, even if it no longer seems truly rich. Including a home in the calculations, such a family ranks in the top 10.1 percent of all households in the United States, according to Professor Wolff’s estimates. Excluding the value of a home, a net worth of $1 million puts a household in the top 8.1 percent. Yet even such families may have difficulty maintaining their standard of living in retirement.

“The bottom line is that people at nearly all levels of the income distribution have undersaved,” Professor Wolff said. “Social Security is going to be a major, and maybe primary, source of income for people, even for some of those close to the top.”

Professor Munnell said that in addition to relying on Social Security, which she called “absolutely crucial, even for people with $1 million,” other options include saving more, spending less, working longer and tapping home equity for living expenses. “There aren’t that many levers we can use,” she said. “We have to consider them all.”

THE bond market has always been a forbidding place for outsiders, but making some sense of it is important for people who rely on bond income.

Low bond yields have been a nightmare for many investors, but that’s not the only issue. Today’s market rates aren’t stable. Steve Huber, portfolio manager at T. Rowe Price, said, “Current yields are an anomaly when you consider where rates have been over the last decade or more.”

Rates are expected to rise. While that will eventually mean more income for bond buyers, it will create a host of problems. Already, the market has been rattled by speculation that after years of big bond-buying, the Fed may soon begin to taper its appetite. In May, a half-point climb in the yield of 10-year Treasury notes produced the biggest monthly bond market losses in nine years. (Yields and prices move in opposite directions.) Yet yields remain extraordinarily low on a historical basis. The yield on the benchmark 10-year Treasury note is just under 2.2 percent, compared with more than 6.5 percent, on average, since 1962, according to quarterly Bloomberg data.

Bits: If Our Gadgets Could Measure Our Emotions

“Honey, we know,” my mom replied. “But it should!”

She had a point. After all, computers and technology are becoming only smarter, faster and more intuitive. Artificial intelligence is creeping into our lives at a steady pace. Devices and apps can anticipate what we need, sometimes even before we realize it ourselves. So why shouldn’t they understand our feelings? If emotional reactions were measured, they could be valuable data points for better design and development. Emotional artificial intelligence, also called affective computing, may be on its way.

But should it be? After all, we’re already struggling to cope with the always-on nature of the devices in our lives. Yes, those gadgets would be more efficient if they could respond when we are frustrated, bored or too busy to be interrupted, yet they would also be intrusive in ways we can’t even fathom today. It sounds like a science-fiction movie, and in some ways it is. Much of this technology is still in its early stages, but it’s inching closer to reality.

Companies like Affectiva, a start-up spun out of the M.I.T. Media Lab, are working on software that trains computers to recognize human emotions based on their facial expressions and physiological responses. A company called Beyond Verbal, which has just raised close to $3 million in venture financing, is working on a software tool that can analyze speech and, based on the tone of a person’s voice, determine whether it indicates qualities like arrogance or annoyance, or both.

Microsoft recently revealed the Xbox One, the next-generation version of its flagship game console, which includes an update of Kinect, its motion-tracking device that lets people control games by moving their hands and bodies. The new Kinect, which goes on sale later this year, can be controlled by voice but is not programmed with software to detect emotions in those interactions.

But it does include a higher-definition camera capable of tracking fine skeletal and muscular changes in the body and face. The machine can already detect the physics behind bodily movements, and calculate the force behind a punch or the height of a jump. In addition, one of the Kinect’s new sensors uses infrared technology to track a player’s heartbeats. That could eventually help the company detect when a player’s pulse is racing during a fitness contest — and from excitement after winning a game. For avid gamers like myself, the possibilities for more immersive, interactive play are mind-boggling.

Albert Penello, a senior director of product planning at Microsoft, says the company intends to use that data to give designers insight into how people feel when playing its games — a kind of feedback loop that can help shape future offerings and experiences. He says Microsoft takes privacy very seriously and will require game developers to receive explicit permission from Xbox One owners before using the data.

Microsoft says games could even adapt in real time to players’ physical response, amping up the action if they aren’t stimulated enough, or tamping it down if it’s too scary. “We are trying to open up game designers to the mind of the players,” Mr. Penello said. “Are you scared or are you laughing? Are you paying attention and when are you not?”

Eventually, he said, the technology embedded in the Kinect camera could be used for a broader range of applications, including tracking reactions while someone is looking at ads or shopping online, in the hope of understanding what is or isn’t capturing the person’s interest. But he said those applications were not a top priority for the company. (Some companies have experimented with technologies like eye-tracking software to see what parts of commercials draw the most attention from viewers.)

Online media companies like Netflix, Spotify and Amazon already have access to real-time consumer sentiment, knowing which chapters, parts of songs, movies and TV shows people love, hate, skip and like to rewatch. Such data was used to engineer the popular online Netflix series “House of Cards,” whose creators had access to data about people’s television viewing habits.

So it is not much of a leap to imagine Kinect-like sensors, and tools like the ones Affectiva and Beyond Verbal are developing, being used to create new entertainment, Web browsing and search experiences.

The possibilities go far beyond that. Prerna Gupta, chief product officer at Smule, a development studio that makes mobile games, spoke about the subject at South by Southwest, the conference in Austin, Tex., in March. She called her talk “Apps of the Future: Instagram for Cyborgs,” and gazed far into the future of potential applications.

DealBook: Small Firm Could Turn the Vote on Dimon

Greg Scaffidi for The New York TimesJamie Dimon, the chief executive of JPMorgan Chase, which has been quietly working to shore up support for his dual role as chairman and C.E.O.

8:08 a.m. | Updated

The fate of Jamie Dimon of JPMorgan Chase could hinge on a small, London-based firm that is virtually unknown, even on Wall Street.

The firm, Governance for Owners, has been tasked with voting the shares of the bank’s largest shareholder — the asset management behemoth BlackRock — on the question of whether to split the jobs of chairman and chief executive. Mr. Dimon been chairman since 2006 and chief executive since 2005.

The shareholder vote on May 21 has emerged as a referendum on the leadership of Mr. Dimon after a multibillion-dollar trading loss last year and dust-ups with regulators. While not binding, a majority vote to have a separate chairman and chief executive would be a heavy blow to the influential banker.

It is not known how Governance for Owners will vote BlackRock’s approximately 6.5 percent stake, but a few influential shareholders could tip the outcome. Last year, some 40 percent of JPMorgan’s shares supported dividing the top jobs, although BlackRock did not.

Another call for a split came on Tuesday from Glass, Lewis, a shareholder advisory firm, which also urged investors to withhold support for six of the bank’s 11 directors. Its larger rival, Institutional Shareholder Services, on Friday supported a split and recommended against voting for three directors. Both reports also raised questions about the independence and qualifications of several board members.

“JPMorgan Chase strongly endorses the re-election of its current directors. This is the same board, risk committee and audit committee that helped guide the company through the financial crisis without a single losing quarter and has led the company through three years of record performance,” said Kristin Lemkau, a JPMorgan spokeswoman.

In deciding how to vote, some JPMorgan shareholders are weighing whether the board’s lead director, Lee Raymond, the no-nonsense former chief executive of Exxon Mobil, is a strong enough counterbalance to Mr. Dimon. Some question whether Mr. Raymond has pushed back enough on decisions made by Mr. Dimon, saying he and the board appear to have been largely reactive. His defenders point out that he is a strong personality and was instrumental in the decision earlier this year to slash Mr. Dimon’s compensation by more than 50 percent, to $11.5 million.

Having a strong lead director has been important to BlackRock. The firm has previously said that it supports companies that do not have an independent chairman if the lead director is a strong figure and has, for example, the power to set board meetings and call meetings where management is not present. In JPMorgan’s case Mr. Raymond does both these things.

In voting, Governance for Owners does not have to follow BlackRock’s corporate governance philosophy, but will take it into account, according to people briefed on the matter. Governance for Owners, which advises shareholders on how to vote and also runs a small shareholder activism fund, did not respond to requests for comment.

BlackRock outsourced its voting because of a provision in the Bank Holding Company Act. Because of its ties to the PNC Financial Services Group, BlackRock is required to outsource its votes to independent third parties when ownership exceeds a certain threshold. This provision is aimed at stopping any one company from having inordinate influence over the banking industry. BlackRock appears to be the only major JPMorgan shareholder to be affected this way.

Behind the scenes, JPMorgan has been aggressively working to persuade shareholders to support having Mr. Dimon hold both the chairman and chief executive titles. Most shareholders will not vote until the week before the May 21 meeting and in the leadup, board members are sitting down with some of JPMorgan’s biggest shareholders to make their case.

“There’s a fundamental conflict in combining the roles of chairman and C.E.O.,” Anne Simpson, the director of corporate governance at Calpers, the big California public pension fund that is the bank’s 50th-biggest shareholder. “It’s all thrown into stark relief when you’re dealing with a company that’s too big to fail.” The pension fund plans to vote for a split.

Some directors and top bank executives say privately that it should be up to the board, not shareholders, to make the decision to sever the two roles.

They also contend that shareholders need to put the trading loss by the bank’s chief investment office in London in context. While the loss was damaging, they note it was an isolated incident and in some ways things have never been better at the bank. Last month, the bank reported its 12th consecutive quarterly profit, aided by strong revenue gains from investment banking and mortgage-related activity.

Still there is some concern that investors are unhappy with the fallout from the trading losses and persistent regulatory issues, wondering whether a board shake-up is needed to rein in Mr. Dimon.

The report by I.S.S. cites “material failures of stewardship and risk oversight” by the bank’s board after a multibillion-dollar trading loss last year. (Both I.S.S. and Glass, Lewis do not actually vote shares, but many investors follow their recommendations, or use them as a basis on how to vote.)

I.S.S.’s pointed criticism of JPMorgan directors and its recommendation that shareholders withhold support for three who serve on the board’s risk policy committee — David M. Cote, James S. Crown and Ellen V. Futter — was a rare move for the organization, which noted that its recommendation was usually only under “extraordinary circumstances.”

In its report, Glass, Lewis echoed the criticism of directors on the risk policy committee and recommended votes against three additional directors: Crandall C. Bowles, James A. Bell and Laban P. Jackson, who are members of the board’s audit committee.

“We believe that shareholders may justifiably expect that the audit committee of one of the nation’s largest banks, and one of the largest participants in the global capital and derivative markets, should act to ensure that the bank’s traders cannot obfuscate the values of their positions with as much ease as evidently occurred in the London Whale matter,” Glass, Lewis wrote.

Both the Glass, Lewis and I.S.S. reports raise questions about the independence of several board members.

The directors, the reports note, have business relationships with JPMorgan. Crandall C. Bowles, for example, as chairman of the board of Springs Industries, has a financial relationship with JPMorgan. The bank, according to I.S.S., is currently “acting as financial adviser” to Springs Industries and could participate “in financing” for a possible acquisition.

The financial relationships are transparent and fully disclosed to regulators and investors, a person close to the bank noted.

Michael J. de la Merced contributed reporting.

Appeals: High Court Could Hear Key Civil Issues in 2013

Last year, by many accounts, was the year of the political blockbuster for the Pennsylvania Supreme Court, which presided over cases on the legislative reapportionment process and the state's controversial voter ID law.

Appeals: High Court Could Decide Big-Ticket Cases in 2013

A handful of cases sure to have lasting effects on Pennsylvanians, including how their legislative districts will look for the next decade and how Marcellus Shale natural gas drilling will be regulated, remained undecided by the state Supreme Court in the waning days of 2012.

Voter ID Ads Could Continue Until Election Day

Commonwealth Court Judge Robert Simpson this morning declined to hasten the pace for deciding on a motion filed by challengers to Pennsylvania?s new voter ID law asking him to enforce the injunction he issued earlier this month keeping the law from taking effect this November.

Voter ID Ads Could Continue Until Election Day

Commonwealth Court Judge Robert Simpson this morning declined to hasten the pace for deciding on a motion filed by challengers to Pennsylvania?s new voter ID law asking him to enforce the injunction he issued earlier this month keeping the law from taking effect this November.