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(a) Is liquidity okay? – (b) A “fun” end to Student Loans?
I’m listening to some “pundit” guy on tv talking about the equity
market. Among the eight or ten things that he thought were
“constructive” was the fact that bond prices have stabilized and as a
result there was one less thing to worry about. The absence of a
negative being a strong positive.
The fellow has a point. It depends on your perspective. Look at this
graph that covers the QE2 effect (Sept. to-date). Sure enough, after an
agonizing eight-week meltdown, LT bonds have come into a trading range.
Its been about a month now of “stability”.
Bullcrap. Look at a close-up of this "stability". Not stable at
all. 16 moves greater than 1 big figure. Look at those highlighted in
blue. That’s a lot of action. These are all gap moves. One after the
other where there is a big step in a very short period. I think of bonds
as less volatile on average than broad stock indexes. If there were
twelve days in a month with 200 Dow point moves and another three/four
of 400 pointers the smart guys on tv would not be using adjectives like “stable”. They might say, “nervous”, or even better “illiquid”.
Another recent example of a market “gap” that looked (to me) like a liquidity issue (not justified by the news flow):
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Student
loans are bullet proof. Or so they say. There’s no way out. Bankruptcy
does nothing for these loans. Think of it this way; Student Loans (“SL”)
are debtors prison. The flip side is if bankruptcy were a ticket out of
SLs, there would be no SLs. So the rules aren’t going to change.
With that in mind, I found the following report of interest. (actually it is the most boring/endless read ever, don't go there) (PDF-Link)
‘Bankruptcy Tourism’ under the EC Regulation on Insolvency Proceedings: A View from England and Wales
What will they think of next? Tourism that promotes/facilitates
bankruptcy. You gotta hand it to the sharpie lawyers and tour operators
who thought this one through.
It’s really quite simple. A German citizen who has some creditors
chasing after him can go BK in Berlin. But it will result in six years
of garnished wages. The alternative? Move to Wales for a bit, spend a
day or so in court, and come out pretty clean.
How good is the credit protection available in ‘debtor friendly’ Wales? Very good:
An automatic and generous discharge of bankruptcy debts. The scope of the discharge is generous, extends to tax debts and is subject to few exceptions.
Tax debts? If it covers tax liabilities it should cover student loans. How hard is it to do this? Easy.
The
only substantive eligibility requirement that debtors must satisfy
before petitioning for bankruptcy in England and Wales is that they are
unable to pay their debts.
The
only procedural requirements that have to be met are the filing of the
petition and statement of affairs together with the payment of the court
fee. It is common for debtors to make an appointment to attend court, complete and file the paperwork and obtain a bankruptcy order all on the same day.
Who is doing this? (link)
One German debt expert based in Kent said that he was helping management consultants, doctors, accountants, dentists and lawyers to discharge their bankruptcy.
“They come from all over the European Union. They like the tax laws here as they are better than the ones in their country.”
Sorry to tell you, but this will not work for SLs if you continue to
live in America. The US courts will not recognize the English BK
petition. But then again, staying in America is not such an obvious
choice anymore.
»
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The federal government should never have interfered in the student loan market (or any other market, really). That's what has enabled people to get so hideously indebted obtaining worthless degrees which essentially provide no monetary return: federal guarantees on the worthless debt.
It is an incredible ponzi scheme. I acquired $130k debt going to law school, now I make about $80k/yr (note: this is amazingly high for a law school graduate). If it weren't for the income-based repayment plans I would be completely disincentivized to work as the loan payments would consume all my disposable income. The full $130k will never be repaid - there's just no chance of it.
My fiancee has over $200k from law school debt!! She makes around $50k a year. Guess how much of that is going to be repaid: none. It ain't going to happen, she doesn't even pay all of the interest on it. Neither do I - we couldn't even afford to live if we did. The principle on our loans just keeps going up - it will never come down. It will never be repaid. Ever.
Get married, move to England (it's very nice) discharge your debts in UK court and then live happily ever after (outside of the US).
I am joking, but this IS going to happen to some extent. As you say, the debts are not really payable. You both lawyers, Any chance you could make a legal UK BK petition stick in the USA? You get $5mm (at least) if you figure this one out......
I won't comment on the specifics but we are contemplating doing something similar to what you have suggested (i.e. fleeing)!
A lot more people are defaulting on student loans - frankly everything than most realize. Most people won't tell anyone. In fact, every entity is really defaulting but no one is talking about it. Makes me wonder how long we are going to be on the default sit and spin until changes are made. And, I know collection attorneys are getting out of said business because people ain't got no money to pay and when the lawyers who have to collect the debt get out - that is interesting. People are no longer afraid of bad credit. They don't even want credit anymore.
Woman, 82, forced to reveal prosthetic breasthttp://www.nationalpost.com/todays-paper/Woman+forced+reveal+prosthetic+...
(of course if it makes flying safer, I'm all for it because Together we Thrive)
Super Ben to the rescue:
QE3 = Muni debt
QE4 = Student Loans
QE5 = Credit Cards
QE6 = IMF injection into PIIGS Banks
QE7 = Buying all of China's Treasuries?
QE8 = ???????
1. to cheat by failing to pay a gambling debt: You aren't going to welsh on me, are you?
2. to go back on one's word: He welshed on his promise to help in the campaign.
ConfederateH has a lot of pity for helpless abused banks who make stupid decisions. $20,000,000,000,000 of free cash just isn't enough for them, in his view.
Yep, that's pretty much what I was told by my Canadian friends...
Sounds very much like the EU.
Here we can 'settle' student loans that have gone to collection. So you call, prepared to pay cash today of say 50% of the outstanding. The person who's been badgering you gets their boss who is a hard ass but will settle for cash.
Paying back money "created out of thin air" is a moral issue?
That's what the church, state and bank want you to think.
If you think differently, you get a low fic-o-bedience score.
They don't like it when you fail to pay the vig on the imaginary money.
I wish every anti-education rant included some truths about the real situation, like
"I have 250,000 in student debt and can't pay it back" (From a dual major in art history and gender studies from NYU)
"My degree is totally worthless" (Says the girl with the massage therapist degree)
"I can't find a job and I am well educated" (Says the communications major)
I literally can't put a dollar value on my education, if it was 500,000 it still would have been worth every penny, and I went to a little stupid private catholic college in NY.
That being said, there are LOTS of programs that help with payment, the student loan creditors will out loans into deferment, lower monthlies due to hardships, etc.
If you have the option pay off the un-subsized part FIRST.
Higher education is still a great investment, as long as you do these three things (but having taught college courses, I would estimate that less than 2% of students actually do).
1. Before you go to college, have a solid career plan in place, and know what skills and knowledge you need to learn to be successful. Make sure the expected salary is sufficient to cover the educational debt you take on.
2. Take full advantage of your education by studying hard, asking your instructors lots of questions, and learning all the skills you will need for your future career. Use your school's career office to find internships or part-time work related to your future career while you are still in school. Make sure you sufficiently impress at least three people who can give you a good letter of reference.
3. Choose the lowest cost option that will give you a good foundation for your career. Do not be lured in by expensive “status symbol” schools. These schools typically offer loan-heavy financial aid packages to their least qualified students. You are far better off going to a state school or to one that offers you a higher level of grant-aid than taking on excessive debt to attend a school where you're likely to be on the low end of the grading curve anyway.
As principle I do not pay off my loan, and I have 40k debt because they did not loan any money they had from deposit. Your signature on any loan is what creates the funds for the loan. You are being robbed if you pay them any money at all.
As Tony Roma said, "Your reasons are your own"
I am a bit surprised that no one mentioned, as an out for Student Loans (or taxes, or child support) . . . Working Off Book.
Millions are doing it, and simultaneously drawing unemployment.
Many companies are telling their employees, we're going to lay you off and if you still want a job, we'll pay you cash. The employees don't have much of a choice if they want to work, so they take it.
Just because the AMERICAN PEOPLE are being SCREWED and led down a PATH to SOCIALISM doesn't mean we can't sit back and relax occasionally, right???
Light a blunt and listen to some Pink Floyd while enjoying the video "SUNSETS ON AMERICA" at (http://www.youtube.com/watch?v=WfJFGQiK3nc) for a little relief and escape from the TYRANNY.
Anonymous-
This ocean view really ties the rug together dude!! Puff..Puff..
Huh - so according to your 'socialism', the banks rule everyone and everything? What socialist thinker came up with that?
Notice how the NEW TERRORIST as stereotyped by the MAINSTREAM MEDIA are WHITE DUDES in a suit and tie like Mr. Vincent McCrudden??
Watch the YouTube video "The New American Terrorist ~ Regular Joe's" at (http://www.youtube.com/watch?v=bz9E5aTURWE).
Anonymous-
Isn't American tyranny great? I can't wait for the Gestapo to knock on my door and jail me for being a capitalist!!!!
Maybe they're finally narrowing down on those responsible for 911.
WTF TWT (together we thrive)
There is a hardship provision in the bankruptcy code that allows you to discharge student loans. However, unless you are a totally disabled quadriplegic, you probably will not qualify for that hardship provision.
The only escapes from the student loan debtor's prison are (1) death or (2) emigration to a country where the debt collectors can't pursue you.
Disability is an avenue to escape student loans. You do not need to be anything near a "quad", either. Disability can also get you a small, but nice income stream.
Disability, bitches!
Death does it with no cosigner's yes.
There is another way if you are a teacher: 5 year sentence in a Title I (read...poor area) school can discharge the loan with some paperwork. At least here in GA. Have no idea about other states or if this is a national thing with SL's.
http://studentaid.ed.gov/PORTALSWebApp/students/english/teachercancel.js...
even death is not an out, if someone co-sign the student loan !!!!!
So I'm working on doing away with the wife's pile of student loans. Anyone familiar with the Credit River decision?
http://www.creditriverinfo.com/FP%20Page-History.htm
Only an idiot would cite that case...you have to make your own case. You have to know your rights in order to enforce them. Basically the rabbit hole goes far deeper than most here would care to admit. There is hope if you can understand UCC and find people to help you dislodge from the matrix.
You know jdrose I don't agree with any of your comments about deflation, however if you would like some help with your wife's student loan debt I can offer you some information.
Fist off I find the most damning evidence against all loans is the fact that the Chicago Federal Reserve Bank produced a copy of Modern Money Mechanics every year up till 1994 or so and it you will find them say "What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts. Loans (assets) and deposits (liabilities) both rise by $9,000. Reserves are unchanged by the loan transactions."
http://upload.wikimedia.org/wikipedia/commons/4/4a/Modern_Money_Mechanics.pdf
The quote is on page 6.
Fighting the loans will be a tough battle for you as courts do not make it easy for you, but the important thing to remember is that if and when you go to court you need evidence and you need to make sure that you are in a common law court. Getting the evidence is easy. All you do is send in affidavits making your statements and backing your claim with fact to Direct loans or whoever it is that is claiming the debt. First you send some form of validation of debt letter, then you send an opportunity to cure, and finally a notice of default and estoppel. Once you have a default notice and estoppel and they continue to try and collect the debt you can sue them for what ever amount you deem reasonable.
This is a link to some information on common law and how to defend common law from Bill Thornton.
http://www.1215.org/
If you have any questions or want any examples of letters I have written plus the responses I get feel free to email me at samiewow@hotmail.com
Actually what they will do is garnish your wages if possible, so if your making 6 dollars an hour and have student loans they will garnish a piece of it. But I do agree with the person on this article, American Student Loans (which I have) are debtors prisons. The difference with this debtor prison is that anywhere you go in the US the prison is waiting. I'm not leaving america yet, because I still have hope. But if it doesn't work out Canada, Australia/NZ look real good.
This country has become a terrible place. If you have a chance to get out, take it. Don't wait too long or you may end up feeling like a European Jew who knew it was time to go but couldn't convince the family, and you know what happened to most of them.
Actually, there still is one honest-to-God real debtor's prison: Child Support. Doesn't matter if you can find a job or how much you actually make, you'll pay what they say when they say or go to jail . . . period.
Thats not been my experience. Oh and even if the deadbeat doesn't pay, can't restrict or deny his visitation.
What a shame that you can't extract ransom from the situation. It just doesn't seem right.
Of course, if the bum were at least in jail where he should be, "visitation" would not be a problem.
Makes you wonder about people's priorities.
Except when the sperm donor lives in a bankrupt stretch of rural Northern California and has no will, no work, and no wealth.
It should be a crime! Wait, it is a crime in this country. Yet there's always somebody who has the "successful deadbeat" story to tell.
I've heard thousands of tales to the contrary, however. Jail for child support is the rule in the working class and below. Not that there aren't exceptions to the rule, of course.
Hey Bruce you have been in the game for a long time, have you ever seen markets like this, or are we in unprecedented times. I am young, and it seems to me the markets are just acting crazy?
The stock market just makes no sense to me right now, up everyday, doesn't matter what news hits the wires, and Bond yeilds shoul;d be a lot higher in my opinion, no inflation my ass?
Deep,
I wasn't which "game" within all of the possibilities available today, that you were refering to. But if you are talking about the stock - bond purchase for investment market, the answer is; "No, the markets have not been like this since 1960 when I started watching." The general stock market history since that time has been well documented here and other places but, IMO, we have entered a new era.
IMO, land or equities based on real goods and basic production of items used domestiocally will be OK but, I fear significant inflation, sufficient to create unrest. Inflation has been with us since my childhood and I have two IRAs awarded as retirement accumulations back in the 70s that took a buying power hit in the late 70s-early80's and will probably be worth very little in a few more years. Fortunately, I am not dependant upon them.
Large companies producing things required for infrastructure as well as basic materials companies will probably hold value. My personal selections are based on what people and the country will need in a distressed situation or what can be exported.
I think even RobotTrader is surprised by the move higher and was looking for a correction around year end give or take, but it is a sell the dollar QE mantra which means whatever is denominated in USD must rise in price as the dollar is devalued, and all of that was initiated by the FED and now undescored by the BOJ, PBOC and ECB.
It is the same play that saved the world and the markets post financial crisis. A lot of people did not get it then and seems in that respect a lot still don't.
The obvious difference this time around is that other central banks have 'capitulated' to monetizing........out of necessity.
Trichet pulled a no panties Dancing With The Stars 11 out of 10 score spooking markets to think interest rates are looking up.
Economic failure is not an option so printing is the path of least resistance.
I've been in the game so long that I am out of it.
There has always been volatility in markets. Headline news, big changes in economic direction, changes in monetary policy, changes in governments even wars.
But what strikes me odd is that while we are seeing evidence of instability/illiquidity in a number of markets the Vix is the lowest it has been in some time.
You tell me, which one is the outlier? I think it is stocks going up 3/8 of percent a day on shit volume....
The facade needs a fresh daily coat of paint.
Don't move to Canada, we're just a different kind of f--ked up here. We're being transformed into a northern colony for the US and EU to pillage whatever resources they can (since the Brazilians are actually being smart and standing up for themselves). Between those goons and China, Canada will be a carcass in a few decades.
Agreed. I have been to canada twice in the past year and it is indistinguishable from the usa except for the massive immigration of somali and other africans. I watched in amazement at the airport when the immigration ooficer moved everyone in my line aside to allow a guy in white robes with FOUR wives and countless children, with no passports just some form for the refugee board, go through to meet their government sponsor, this happening right in front of me. the next guy in line, some elderly white guy, was harrassed almost 15 minutes by a very insolent asian immigration officer who smirked knowingly at me when he saw I was asian after he finally let the poor old guy go on his way. The whole scene in the airport gave the immediate impression of something like a leftist multicultural suicide train wreck taking place in slow motion, and in the country it was not much better. There is no real sense of nation and the country even has a thought police called, ironically, the human rights commission. day to day life reminded me of the usa. everyone you go there is a guard or an officer or someone yelling at you to to this or dont do that, like a bad babysitter. traffic jams, debt, housing bubbles, the whole nation seemed confused and it is easy to imagine an implosion at some not so future date. I came away very shocked and I have eliminated all canadian investments from my portfolio including natural resource. I just felt like they are near some sort of top.
Perhaps in Canada the airport screeners harass white guys because they realize that white guys are the ones responsible for the terrorism attributed to alCIAda...
No I think its more like racism against old white guys by asians who have come to power in formerly white countries.
Anyway, the screeners would be doing good to look at saudis not old white guys, according to wikileaks.
by the way this was the immigration officer not a screener. The irony probably will be lost on you.
That's why we're on here. We don't go out any more.
We're at the top of a real estate bubble that everyone denies exists. Ironically, this bubble gained real momentum on the artificially low rates resulting from the implosion of, wait for it, the US housing bubble.
It was recently announced that Canadian households are now more indebted than American households, in relative terms. Not only that but our obesity epidemic is surpassing the US. We used to be a nation of savers, but we've drunk the low interest rate, cheap money kool aid, but haven't had our day of reckoning yet.
We had free trade forced on us just like the rest, and we have not benefitted. If it weren't for the resources we whore out, we'd be nothing more than a tourist destination.
Still, I like my country and I ain't leavin'.
I have quite a few friends seriously thinking about moving to Canada, Mexico & Central America. The southern choices they say are a LOT cheaper than staying here. I'm staying here for a while, but I will look at some places in Europe if things get really bad here.
As for the student loans, more and more people are closer to defaulting on them due to the sucky economy, & if the economy gets worse they will default. Where does what little money you have go? Student loan payment or food? Student loan payment or heat, electricity, etc.?
The govt won't be able to go after all the defaulters as they will have no money, no homes, no jobs. Can't get blood from a turnip. These people will tell the govt to go pound sand.
What BK said. It doesn't matter if they default on student loan debts. The owners of the debt will just accrue interest and penalties and add them to the balance until the loans are paid.
That's quite irrelevant if the person has moved to a different country, isn't it? Absolutely no one cares how much interest and penalties are accrued if there's no hope of collecting on it.
If that person gives up his/her U.S. Citizenship, becomes a citizen of a different country and changes his/her name as well, they might even be able to come back for a time to the U.S.. Possibly even work here without having to worry about their wages being garnished.
There's a heck of a lot of economic incentive to do this.