hI
Have you guys heard about American govt shutdown?
They said this guy came that guy came wonder will happen.
NOW ALL ARE LOOKING AT SKY.
USA AT THE MERCY OF CHINA.
NoBODY CAN SAVE AMERICA-IS WHAT AMERICANS ARE SAYING themselves.
Those who marched on to iraq did not destroy iraq but they destroyed AMERICAN ECONOMY FOREVER.
October 3, 2013
$146 Billion and 15% in Student Loan Defaults, the Highest Since 1995
By Tyler Durden of ZeroHedge
Almost exactly one year ago we wrote "The Next Subprime Crisis Is Here: Over $120 Billion In Federal Student Loans In Default" in which we took the latest (2009 three year cohort) loan default data on Federal Student Loans released by the Department of Education and applied it to the total amount of student loans outstanding, which back then was $914 billion.
On Sep. 30, ED.gov provided its annual update - this time to the 2010 three year and 2011 two year cohorts - and to nobody's major surprise, learned that things just got even worse.
To wit: "The national two-year cohort default rate rose from 9.1 percent for FY 2010 to 10 percent for FY 2011. The three-year cohort default rate rose from 13.4 percent for FY 2009 to 14.7 percent for FY 2010." Putting this in context, according to Bloomberg defaults have risen to the highest level since 1995. The irony that this is happening in the aftermath of Bernanke's disastrous ZIRP policy is not lost on anyone.
Quantifying this percentage, recall the NY Fed reported in its second quarter household credit update that the amount of total outstanding student loans has now risen to $994 billion, or $80 billion more in just one year:
... one can calculate that the current amount of non-performing loans originated in 2010 is now a whopping $146 billion (the full total amount of student loans owed is $1.2 trillion when including private loans from the likes of Sallie Mae - this sum surpasses all other kinds of consumer borrowing expect for mortgages). Unfortunately, as the economic situation has only deteriorated since then especially for student-age Americans, the real blended amount of student loans in default is almost certainly substantially higher as of this moment.
The Education Department had this commentary:
“The growing number of students who have defaulted on their federal student loans is troubling,” U.S. Secretary of Education Arne Duncan said. “The Department will continue to work with institutions and borrowers to ensure that student debt is affordable. We remain committed to building a shared partnership with states, local governments, institutions, and students—as well as the business, labor, and philanthropic leaders—to improve college affordability for millions of students and families.”
In other words, the response to the bursting of the student loan bubble, is to entice even more young people into the low-yield debt trap by "keeping debt affordable", which in turn will lead to college tuitions rising even higher, forcing students to take out, and default on, even more loans, and so on until this latest debt bubble can no longer be swept under the rug.
Things get even worse when broken down by for-profit institutions. "For-profit institutions continue to have the highest average two- and three-year cohort default rates at 13.6 percent and 21.8 percent, respectively. Public institutions followed at 9.6 percent for the two-year rate and 13 percent for the three-year rate. Private non-profit institutions had the lowest rates at 5.2 percent for the two-year rate and 8.2 percent for the three-year rate."
In other words, more than one in five loans used to fund a for-profit education, which would be most of those that lead to actual jobs, will never be repaid to Uncle Sam, and the ultimate payer will be you, dear taxpayer, when the student loan bailout time comes.
In the meantime, ED.gov, which may or may not be down today, has announced its interim solution - pursuing sanctions against schools that have default rates of 25% or more for three consecutive years.
Certain schools are subject to sanctions for having two-year default rates of 25 percent or more for three consecutive years, or over 40 percent for one year. As a result, these schools will face the loss of eligibility in federal student aid programs unless they bring successful appeals. Please click here for more information about possible sanctions:http://www2.ed.gov/offices/OSFAP/defaultmanagement/cdr2yr.html
In other words, according to the government it is the school's fault that students are levering up en masse, when the real sanctions should be targeting the Federal Reserve and its easy money policy which while working miracles for PE firms, hedge funds and Primary Dealers in their pursuit of the Fed-funded "wealth effect" is backfiring when ordinary American students try to take advantage of zero cost money in their pursuit of the American Dream Nightmare.
Finally, as Bloomberg reports citing Rory O'Sullivan, of the Young Invincibles nonprofit group, "Our generation is behind in the economic recovery and not recovering as fast as we need to," said O’Sullivan, whose group represents the interests of people ages 18 to 34. “It’s financial disaster for borrowers. Defaults can dramatically affect their credit rating and make it harder to borrow in the future."
No need to worry though: remember that as the Fed has shown over the past five years, the only policy the US has in order to "fix" the unprecedented borrowing binge by everyone, is to force everyone into even more debt. And since monetarism is now a religion, all one needs is a little faith that all this will one day end well.
Finally, for those seeking some early humor, here is a chart straight from the St. Louis Fedshowing the full history of Federal student loans.
Graph of Federal government; consumer credit, student loans; asset, Level
Courtesy Tyler Durden, founder of ZeorHedge (EconMatters author archive here)
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.
© EconMatters All Rights Reserved | Facebook | Twitter | Post Alert | Kindle
Big Dip: What Did Congress Do to Gold Prices?
by Sean Brodrick, Resource Strategist, The Oxford Club
Thursday, October 3, 2013: Issue #2135
The U.S. government is in crisis. After all, the government failed to pass a continuing resolution to fund government operations on Monday. The U.S. dollar fell.
But many traders are left wondering, “If it’s such a crisis, why isn’t gold doing better?” The last time we had this scenario, in December 1995, gold moved higher. But this time, gold tanked. Seems weird, right?
Since gold is priced in dollars, they usually move in opposite directions. Now, they’re trending the same way. Money is rushing out of “safety” assets (gold and the dollar) and into “risk” assets.
What’s going on?
It’s a case of “The Congress That Cried Wolf” one too many times.
People have seen this movie before. Washington comes up against a budget deadline or debt limit. We’re told it will be the end of the world if the two sides in Washington don’t come to an agreement. They don’t come to an agreement.
Somehow the world muddles along anyway.
Then, after much shouting, the two sides Scotch-tape together some kind of agreement long after the “deadline” passes.
In other words, this “crisis” has become part of the usual noise out of Washington. America shrugs its broad shoulders and gets on with life.
My readers know that I’ve been predicting a short-term move lower in gold. But the long-term forces for a big move higher are still there.
So, this is leading to a better buying opportunity, if you believe those long-term forces are still in place. And I think gold’s big move higher is coming, because:
China’s Appetite Is Growing for Gold. Consumer gold demand in China, last year’s second-biggest user after India, should rise by at least the same pace as the country’s economic growth, according to the World Gold Council. China’s consumption is expected to hit 1,000 metric tons this year. Chinese New Year is only a few months away, and that’s usually a very bullish time for gold.
Inflation-Fueled Protests Are Spreading. Turn on your TV and watch international news. You’ll see protests and, in some cases, widespread civil unrest in Egypt, Turkey, Brazil, India, Indonesia – even China. Why are these people braving police beatings to voice their anger? Because inflation is heating up in those countries, and many of the world’s poor are seeing the cost of maintaining their standard of living slip out of their grasp. Inflation may be tame in the U.S. That’s not the case overseas. How long do you think before inflation spreads to our shores? And inflation and widespread unrest have historically both been supportive of gold.
The fact is, the recent dip in gold prices is a gift. When the hard times come, most people will decide they don’t own enough of it.
The Oxford Club recommends you have 5% of your money in gold. If you don’t own any yet, you might want to buy the pullback.
In any case, you’re in charge of your own investing decisions and destiny. And it sure looks like no one is in charge in Washington, D.C.
Good investing,
Sean
Have you guys heard about American govt shutdown?
They said this guy came that guy came wonder will happen.
NOW ALL ARE LOOKING AT SKY.
USA AT THE MERCY OF CHINA.
NoBODY CAN SAVE AMERICA-IS WHAT AMERICANS ARE SAYING themselves.
Those who marched on to iraq did not destroy iraq but they destroyed AMERICAN ECONOMY FOREVER.
October 3, 2013
$146 Billion and 15% in Student Loan Defaults, the Highest Since 1995
By Tyler Durden of ZeroHedge
Almost exactly one year ago we wrote "The Next Subprime Crisis Is Here: Over $120 Billion In Federal Student Loans In Default" in which we took the latest (2009 three year cohort) loan default data on Federal Student Loans released by the Department of Education and applied it to the total amount of student loans outstanding, which back then was $914 billion.
On Sep. 30, ED.gov provided its annual update - this time to the 2010 three year and 2011 two year cohorts - and to nobody's major surprise, learned that things just got even worse.
To wit: "The national two-year cohort default rate rose from 9.1 percent for FY 2010 to 10 percent for FY 2011. The three-year cohort default rate rose from 13.4 percent for FY 2009 to 14.7 percent for FY 2010." Putting this in context, according to Bloomberg defaults have risen to the highest level since 1995. The irony that this is happening in the aftermath of Bernanke's disastrous ZIRP policy is not lost on anyone.
Quantifying this percentage, recall the NY Fed reported in its second quarter household credit update that the amount of total outstanding student loans has now risen to $994 billion, or $80 billion more in just one year:
... one can calculate that the current amount of non-performing loans originated in 2010 is now a whopping $146 billion (the full total amount of student loans owed is $1.2 trillion when including private loans from the likes of Sallie Mae - this sum surpasses all other kinds of consumer borrowing expect for mortgages). Unfortunately, as the economic situation has only deteriorated since then especially for student-age Americans, the real blended amount of student loans in default is almost certainly substantially higher as of this moment.
The Education Department had this commentary:
“The growing number of students who have defaulted on their federal student loans is troubling,” U.S. Secretary of Education Arne Duncan said. “The Department will continue to work with institutions and borrowers to ensure that student debt is affordable. We remain committed to building a shared partnership with states, local governments, institutions, and students—as well as the business, labor, and philanthropic leaders—to improve college affordability for millions of students and families.”
In other words, the response to the bursting of the student loan bubble, is to entice even more young people into the low-yield debt trap by "keeping debt affordable", which in turn will lead to college tuitions rising even higher, forcing students to take out, and default on, even more loans, and so on until this latest debt bubble can no longer be swept under the rug.
Things get even worse when broken down by for-profit institutions. "For-profit institutions continue to have the highest average two- and three-year cohort default rates at 13.6 percent and 21.8 percent, respectively. Public institutions followed at 9.6 percent for the two-year rate and 13 percent for the three-year rate. Private non-profit institutions had the lowest rates at 5.2 percent for the two-year rate and 8.2 percent for the three-year rate."
In other words, more than one in five loans used to fund a for-profit education, which would be most of those that lead to actual jobs, will never be repaid to Uncle Sam, and the ultimate payer will be you, dear taxpayer, when the student loan bailout time comes.
In the meantime, ED.gov, which may or may not be down today, has announced its interim solution - pursuing sanctions against schools that have default rates of 25% or more for three consecutive years.
Certain schools are subject to sanctions for having two-year default rates of 25 percent or more for three consecutive years, or over 40 percent for one year. As a result, these schools will face the loss of eligibility in federal student aid programs unless they bring successful appeals. Please click here for more information about possible sanctions:http://www2.ed.gov/offices/OSFAP/defaultmanagement/cdr2yr.html
In other words, according to the government it is the school's fault that students are levering up en masse, when the real sanctions should be targeting the Federal Reserve and its easy money policy which while working miracles for PE firms, hedge funds and Primary Dealers in their pursuit of the Fed-funded "wealth effect" is backfiring when ordinary American students try to take advantage of zero cost money in their pursuit of the American Dream Nightmare.
Finally, as Bloomberg reports citing Rory O'Sullivan, of the Young Invincibles nonprofit group, "Our generation is behind in the economic recovery and not recovering as fast as we need to," said O’Sullivan, whose group represents the interests of people ages 18 to 34. “It’s financial disaster for borrowers. Defaults can dramatically affect their credit rating and make it harder to borrow in the future."
No need to worry though: remember that as the Fed has shown over the past five years, the only policy the US has in order to "fix" the unprecedented borrowing binge by everyone, is to force everyone into even more debt. And since monetarism is now a religion, all one needs is a little faith that all this will one day end well.
Finally, for those seeking some early humor, here is a chart straight from the St. Louis Fedshowing the full history of Federal student loans.
Graph of Federal government; consumer credit, student loans; asset, Level
Courtesy Tyler Durden, founder of ZeorHedge (EconMatters author archive here)
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.
© EconMatters All Rights Reserved | Facebook | Twitter | Post Alert | Kindle
Big Dip: What Did Congress Do to Gold Prices?
by Sean Brodrick, Resource Strategist, The Oxford Club
Thursday, October 3, 2013: Issue #2135
The U.S. government is in crisis. After all, the government failed to pass a continuing resolution to fund government operations on Monday. The U.S. dollar fell.
But many traders are left wondering, “If it’s such a crisis, why isn’t gold doing better?” The last time we had this scenario, in December 1995, gold moved higher. But this time, gold tanked. Seems weird, right?
Since gold is priced in dollars, they usually move in opposite directions. Now, they’re trending the same way. Money is rushing out of “safety” assets (gold and the dollar) and into “risk” assets.
What’s going on?
It’s a case of “The Congress That Cried Wolf” one too many times.
People have seen this movie before. Washington comes up against a budget deadline or debt limit. We’re told it will be the end of the world if the two sides in Washington don’t come to an agreement. They don’t come to an agreement.
Somehow the world muddles along anyway.
Then, after much shouting, the two sides Scotch-tape together some kind of agreement long after the “deadline” passes.
In other words, this “crisis” has become part of the usual noise out of Washington. America shrugs its broad shoulders and gets on with life.
My readers know that I’ve been predicting a short-term move lower in gold. But the long-term forces for a big move higher are still there.
So, this is leading to a better buying opportunity, if you believe those long-term forces are still in place. And I think gold’s big move higher is coming, because:
China’s Appetite Is Growing for Gold. Consumer gold demand in China, last year’s second-biggest user after India, should rise by at least the same pace as the country’s economic growth, according to the World Gold Council. China’s consumption is expected to hit 1,000 metric tons this year. Chinese New Year is only a few months away, and that’s usually a very bullish time for gold.
Inflation-Fueled Protests Are Spreading. Turn on your TV and watch international news. You’ll see protests and, in some cases, widespread civil unrest in Egypt, Turkey, Brazil, India, Indonesia – even China. Why are these people braving police beatings to voice their anger? Because inflation is heating up in those countries, and many of the world’s poor are seeing the cost of maintaining their standard of living slip out of their grasp. Inflation may be tame in the U.S. That’s not the case overseas. How long do you think before inflation spreads to our shores? And inflation and widespread unrest have historically both been supportive of gold.
The fact is, the recent dip in gold prices is a gift. When the hard times come, most people will decide they don’t own enough of it.
The Oxford Club recommends you have 5% of your money in gold. If you don’t own any yet, you might want to buy the pullback.
In any case, you’re in charge of your own investing decisions and destiny. And it sure looks like no one is in charge in Washington, D.C.
Good investing,
Sean
