The US Student Loan Bubble Broken Down By State, And Why Washington D.C. Sticks Out Like A Sore Thumb

Curious how the student loan bubble, just shy of $1 trillion, and now the largest debt portion of the US household non-mortgage wallet,  bigger than credit card and auto loan debt - affects your state? Then the following three charts just out from the NY Fed are for you. What the data shows is that less than 12% of the population in Hawaii has student loans, while the record is in D.C. at over 25%. All those "students" in the nation's capital. Really? But that's not all. While the average loan balance is under $21,000 in Wyoming, it is once again highest in D.C., with the average loan balance over $40,000. It is almost as if D.C. "students" have learned how to game the system.

PIMCO's Bill Gross Goes Churchillian

When the head of the world's largest bond fund starts paraphrasing war-time phrases, you know nothing is what it seems...

Gross: Never have investors reached so high in price for so low a return. Never have investors stooped so low for so much risk.

— PIMCO (@PIMCO) May 14, 2013

It seems to us that this can only end one way and the fight on the beaches this time will be between economic reality and central-bank-inspired mass hypnosis.

Is Lumber The New Baltic Dry?

Lumber is limit down once again. It has been falling now for two months in a very 'non-housing-recovery'-like manner. Of course, when Lumber prices are rising, everything is bullish and it merely serves to confirm the exuberance and bias to optimism that we should all have. However, just like the Baltic Dry Index, when it's falling it is a bullish sign that the market is over-supplied in anticipation of good things to come. With Lumber's two-month lead over stocks signaling the equity market may well be a little ahead of itself, it seems the supply-demand balance is off in the construction materials business (which one is off - supply or demand) but have no fear, just as with the Baltic Dry, it will come back if we just keep hoping. Or did the actions of a central-bank inspire confidence once again in the 'wrong' industry and spark another mal-investment boom?

POMO + Tepper + Tuesday = Total Equity Disconnect

It's Tuesday. It's a big POMO day. And sure enough, equities are in full-tilt melt-up mode. In the face of a stronger USD, rallying bond market, higher VIX, and widening credit spreads, the S&P 500 has smahed through yet another set of stops, squeezed shorts wherever you can see, and made new all-time highs. Mardi Gras indeed... though one wonders what happens when Europe closes and POMO is over. Will USDJPY 102 mark the 'top' in stocks today?

Michigan School Shuttered After Taking Money For Services Not Provided

The Buena Vista school district in Michigan accepted $402,000 of aid over three months from the state for a service is was not providing. As RT reports, the school district has taken the drastic steps of firing all of its teachers and shuttering its classrooms before the end of the school-year as the state tries to claw back (or seek an alternative plan) its ill-gotten gains. "We've hit a dead end," the local school district explains, unable to help the school of 400 mostly black and poor students, explaining that they are hesitant to bailout school districts and set a bad precedent. One parent exclaimed, "Our kids ain't really learning like they used to," adding that, "being out of school this early is going to hurt them a lot." The local democratic Representative  added helpfully, "we know from past history that students have been treated differently - going back to Brown vs Board of Education." Buena Vista teachers had offered to work without pay for a week, but that was not enough to keep the district's schools open. Instead, the district may offer a “skills camp,” a voluntary substitute paid for by federal grants, and run six hours per day for up to six weeks.

David Tepper Blesses The Market And Awaits "Manufacturing Renaissance"

While every other hedge fund manager is bashing Bernanke, we finally found one who loves the Chairman, unabashedly. The last time the outspoken hedge fund manager appeared on CNBC it was to pump financials into his asset sale in Europe (and here). Today he could not have been more upbeat about the US economy, US banks, and US manufacturing as he is "overwhelmingly bullish," adding that "the numbers are truly amazing". Sure enough the 'Tepper rally' market responded with its ubiquitous lemming like surge as the Appaloosa manager (with $17.9bn AUM) says: The Economy is getting better; he is bullish On Japan; does not worry about Fed tapering - but does not like bonds (adding that the end of QE2 was bullish (though if you care about facts, it wasn't); his biggest holding is Citigroup; sees a great US manufacturing renaissance; and while the Middle East is a concern, expects only a 5% drop if there is war. If that's not enough for you to back up the truck, he believes the US budget deficit will shrink "massively' and housing will rise. The only thing he is not buying with both hands and feet - Apple. As he said - the numbers are truly amazing, though we suspect we are looking at different numbers.

DOJ's "Nixonian" Phone Spying Scandal Sets Labor Unions Against Obama

It is just a few hours old, and already the Department of Justice's (legal) AP phone spying scandal has generated unintended consequences, by alienating and confronting Obama with his traditionally strongest constituency: labor unions, in this case the Newspaper Guild. From the Guild's shocked statement: "There could be no justification or explanation for this broad, over-reaching investigation. It appears officials are twisting legislation designed to protect public safety as a means to muzzle those concerned with the public’s right to know." They sound legitimately surprised.