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In September Uncle Sam Continued To Hand Out Car And Student Loans Like A Drunken Sailor
Following one of the highest monthly jumps in consumer credit in August, the September data showed that following the drop in household savings to a multi-year low, consumers naturally retrenched, and had no choice but to pay down debt. As the just released G.19 confirmed, in September, households once again reduced their credit card debt, which declined by $2.9 billion to $852 billion. This was the fourth such decline in six months, confirming that at the discretionary level where banks have supervision over borrowings, the consumer is still nowhere near willing to relever. Where, there was leverage, a lot of it, was once again in the government sector, which funded $13.8 billion of the total $14.6 billion rise in NSA credit, and where non-revolving credit: read loans for Government Motors, at least those that have not been record channel stuffed (as reported previously) and Federal Student Loans, which are now over $1 trillion, rose by $14.3 billion in one month. Of course, the difference between revolving and non-revolving credit is that while banks expect the former to be paid off eventually, Uncle Sam has no such illusions on any low APR debt it hands out to anyone who asks for it (and if the proceeds from student loans are used to purchase iPads, so be it).
Total monthly loan change:
Composition of lenders. As usual, it is only the government:
To summarize:
- Private (revolving) credit added YTD: $565 Million
- Uncle-Sam (non-revolving), and thus never collectible, credit YTD: $105 BILLION
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As a former drunken sailor, I take issue with this. I stopped spending when I ran out of money.
The prison and "college" subsidization needs to end. It's total, unmitigated bullshit.
Taxpayers should not be shelling out 40k per year to house prisoners who were sentenced to 3 years because some 19 year old had a dime bag of pot, and they certainly shouldn't be shelling out 50k to 200k so students can obtain a fine arts degree from the University of Pennsylvania or a vacuum tube repairman certificate from Everest University.
I realize that taking many of the non-violent pot smokers out of prison and rejecting 50k taxpayer loans to students of educationconnection.com will adversely impact the for-profit Prison & Education scams (where wardens & deans get compensated based on headcount), but the shit has got to stop. Subsidization of banks, Wall Street, the defense contractors, the prison racketeering operation and the education scammers is out of fucking control.
The war on drugs is not a "war" it is an inustry.
Thank God that as they hand out countless unimaginable amounts of student loans so that every single last legal naturally born American child can have a white collar corner office satisfying future, that the Student Loans are Not Discharged Under Federal Bankruptcy Law, so pretty soon the Dept of Education (or whoever the fuck it is extending the credit... as in which one isn't) will be able to have every Tom Dick and Sally's brain as collateral.
Free Obama-degrees for everyone! Keep in mind, this program will have to meet the needs of the Party's core constituency. Ex.
http://www.cnn.com/election/2012/results/state/OH#president
Vote by education:
No high school : 67% Obama
College grad : 53% Romney
Vote by religion:
Catholic : 53% Romney
'None' : 70% Obama
Vote by race:
White: 57% Romney
Black: 96% Obama
Let's go out on a limb and say that engineering or science majors will neither require nor qualify for Obama-degrees. But some likely candidates include:
- Applied Sociopthy
- Urban Chemistry
- High School Studies
All, gov't gauranteed, student loans will get paid back.
If the student doesn't pay it the loan will accumulate interest and if the debtor ever applies to collect Social Security the creditor can GARNISH THE DEBTORS SOCIAL SECURITY BENEFITS!
If the debtor dies before the creditor is paid the government (taxpayer) will pay the creditor for the principle AND THE ACCUMULATED INTEREST.
If a 20 year old graduates, has a $50,000 student loan gauranteed by the gov't and doesn't make payments the $50,000 will collect interest until the student dies, lets say at 85 years old, and then the creditor/bank will get the principle and 65 years of interest from the taxpayer.Student Loan debt is not dischargable in bankruptcy court.
Scary isn't it.
what is 85 years of interest on initial principle of 50K at 5%?
The interest would be $1,141,995.03 + the original $50,000 borrowed = $1,191,995.03
Now you see why there are 100 commercials trying to get you to borrow money to get an education.
DO NOT DO IT!
IT WILL BANKRUPT sOCIAL SECURITY FOR SURE.
Has anyone any information on the private companies making money off student loans. An old friend told me he knows a retired man in NYC who lent his sons' company $3 million with a pitch that he would make $30 MILLION OVER 5+ YEARS.The business involved managing student loan programs for colleges and universities. Very lucrative contracts it would seem.
This is nonsense. There are so many exceptions it's not realistic to even discuss the concept of the repayment of these loans.
Here are a couple links on foregiveness:
http://www.usnews.com/education/blogs/student-loan-ranger/2012/03/21/lea...
http://www.finaid.org/loans/forgiveness.phtml
and forbearance:
http://studentaid.ed.gov/repay-loans/deferment-forbearance
Can you say capital misallocation ?
Nobody wastes OPM like Govt.
Bet 15 ot of the $16Trillion debt was pissed up the wall.
Now the designated driver is a drunk.
Should be an interesting ride.
Buckle up you all.
"vacuum tube repairman certificate"
That is at least marginally useful. French literature and viking archeology, not so much.
Of course whole system needs overhaul, as in Europe student trainign costs much much cheaper.
Maybe you could stand on the street corner and sing "Immigrants song" in French!
Well it's all a scam to pretend that we have an economy. We don't (or can't) train people to work, so we keep them locked up or attending meaningless classes.
The point is to try to keep the dwindling middle class "safe" and pretend that their kids have a future.
Americans are good at one thing, and that's self deception.
A little off topic but check out this story from Baltimore. 8 guys beat an unarmed man to a coma. Not rare in B-more, but the coment section rivals ZH. check it out. Guess those on SNAP ...snapped!!
http://baltimore.cbslocal.com/2012/11/06/witness-to-brutal-attack-speaks-with-wjz/
As Gerald Celente says, when people have nothing left to lose, they lose it.
You don't need a crystal ball to see violence in our future.
What is that old saw about Sailors.
Something about deep pockets, and short arms...
Zero down mortgages are back also. House loans handed out like candy. Lenders don't care whether you pay back are not since the mortgage is passed on to the FHA (aka taxpayer). Maybe they will start BOGO on houses?
"Flip that house!"
It's all free Ya know. They gonna do more !
OT: 1400, 13,000
Bernank put scares the shit out of sellers again....
13k and 1400 firmly intact at the close. Golf clap Kevin.
3:30 ramp.
You gotta prop up Government Motors you know they are headed for Bankruptcy again (sarc) never mind if taxpayers bailed out Chrysler is going to make Jeeps in Italy now either those auto worker votes and pensions are your responsibility now!
If you are going to stimulate the economy might as well put the dough in the hands of younger spenders who are more likely to vote domocratic
Don't worry, this will be paid back, because "the jobs are coming".
Someone wake up Kevin - there isn't much time left in the day.
Holy shit - I think he's awake now and just had a fat finger - the wrong way.
Load on debt as much as you can, buy bullion, disappear. Whiners.
All, gov't gauranteed, student loans will get paid back.
If the student doesn't pay it the loan will accumulate interest and if the debtor ever applies to collect Social Security the creditor can GARNISH THE DEBTORS SOCIAL SECURITY BENEFITS!
If the debtor dies before the creditor is paid the government (taxpayer) will pay the creditor for the principle AND THE ACCUMULATED INTEREST.
If a 20 year old graduates, has a $50,000 student loan gauranteed by the gov't and doesn't make payments the $50,000 will collect interest until the student dies, lets say at 85 years old, and then the creditor/bank will get the principle and 65 years of interest from the taxpayer.Student Loan debt is not dischargable in bankruptcy court.
Scary isn't it.
what is 85 years of interest on initial principle of 50K at 5%?
The interest would be $1,141,995.03 + the original $50,000 borrowed = $1,191,995.03
Now you see why there are 100 commercials trying to get you to borrow money to get an education.
DO NOT DO IT!
IT WILL BANKRUPT sOCIAL SECURITY FOR SURE.
the federal government has the ability to garnish wages, levy bank accounts, and seize property without first obtaining a court judgment against the debtor.
There is no statute of limitations on federal student loan debt that stops the Dept. of Education from collecting a delinquent student loan.
In Obama´s world this debt will be forgiven.....it will never have to be paid back....that is the plan....
I am not ever going to take the chance. I could borrow, coventionally, pay the debt and default on the bank.
I think this is the latest moneychanger scam.
Student Loan debt used to be dischargable but, not anymore.
All of the ignorant people, myself included, who took on debt before Lehman fell on promises of all of the jobs because the bubble boomers were going to retire. Now I am making about 30k/year less than I thought I would be making.
We have geezers here that should have retired 5 years ago but, hang on depriving the younger generation of advancement.
I will pay the loan back and think of plan B for retirement. Maybe Vietnam or Laos?
Define 'geezers' young man....
I'm 48 and I consider myself a geezer. It is a term of endearment in my circle.
I'm a bit older, self employed in a field full of young studs. Yea, I bet they just can't wait till I croak, cause that's the last thing that will keep me from working, and they know it! Cheers!
nice double post:
This is nonsense. There are so many exceptions it's not realistic to even discuss the concept of the repayment of these loans.
Here are a couple links on foregiveness:
http://www.usnews.com/education/blogs/student-loan-ranger/2012/03/21/lea...
http://www.finaid.org/loans/forgiveness.phtml
and forbearance:
http://studentaid.ed.gov/repay-loans/deferment-forbearance
I double posted because I thought the subject important.
The first link you provided is for a H.R. 4170 which is, of course, stalled in the House.
The other links are not applicable to me.
You are incorrect in suggesting or assuming "There are so many exceptions it's not realistic to even discuss the concept of the repayment of these loans."
None of the avenues you list are feasible.
I am current with my payments, will pay this loan off eventually but, it really hurts my ability to save for retirement. I'll just be a burden on society if I have little, or no, savings because I was lured into getting an engineering degree, am making 2/3 of what I anticipated because I was lead to believe the "go to university and the jobs will come" bullshit cranked out by the establishment.
Now they are saying Americans don't have thr requisite skills to fill positions? What positions are those? Robots? I don't suppose I'm going to turn into a robot anytime soon.
I am just trying to warn others to avoid this mistake and pay for education upfront or get a trade.
Education cost have tripled since I graduated and this Student Loan racket is the mother of all moneychanger scams.
So GFU!
The point is, if you get the debt and can't pay, then there are all kinds of avenues to ensure that it doesn't eat up all of your monthly takehome. Effectively, you're simply complaining that the college route doesn't provide you the standard of living you thought, given you actually have the ability to repay them. Well, best of luck on that one... welcome to the party. [and I say this as someone who curtailed spending in favor of paying off student loans and have paid them all off... it's doable, but I'm not sure I wouldn't have been a bit more strategic with it if I had the chance again].
It will also help you, moving forward, to try and accept some responsibility for the position you're in. Blaming going to college on being "lured" into it is a bit... convenient... The thing is, plenty of people in the same situation as you actually opted not to go... did the math... did the research... and determined that it would be best simply to go hit the workforce and have a few years of experience on you when you finally got out with your degree. It works for some, not so much for others... point being, it's a gamble. When you borrow and leverage yourself to pursue an endeavor, you are a speculator... and with that speculation comes risk.
PS, if you're actually contemplating saving for retirement, then you have a lot to learn... if you want to pull down your pants and grab your ankles, be my guest... whatever floats your boat.... but you might get a bit of a surprise. It sounds like you've started on the path to connecting a few dots... there are a lot more.
***there are all kinds of avenues to ensure that it doesn't eat up all of your monthly takehome.****
i am sure you can forego payment w/out being, technically, in default but, the interest continues to accrue. This is the thesis of my post.
Formula:
Clearly, you have not looked at any of the links I sent you. You can pay lesser amounts (within your means) than the otherwise required monthly payments and be discharged from the debt just the same after passage of a certain time... please go back and think through some of these options. There is also the option of shifting the debt to dischargeable debt, but I'll let you figure out how to do that. You're approaching the problem like a traditional debt, do not... this is vastly more complicated and, thus, offers many different opportunities.
I'm talking about what YOU should do... not whether the system is moral or fair or anything else [it is not].
Again, you're talking about monies being taken from you and others until the day you die... this is not how the repayment mechanism works... please read up. You're speaking in generalities and misinformation.
It's also vastly more complicated that simply stating that the moneychangers are repaid... If you want to properly account for everything, then you would claw back the money from the educational institution too... don't hear much about this do we? This is moral hazard. If you want to eliminate moral hazard, then you need to eliminate it for all... the moneychangers are simply enablers for moral hazard. The problem is so vastly more complex than pointing a finger at the banksters. They're clearly culpable, and we may eventually saddle them with the loss (which may not be a bad thing at all), but there is a lot more blame to go around than that.
The other aspect is that uncle sam is starting to handle these cradle to grave... offering the loans directly as well as administration thereof. When the private banks (who are hopelessly dependent upon the government) are removed from the situation, then the government will pick up the slack in demand. You're simplifying the situation to absurdity... it's not that simple.
*****Again, you're talking about monies being taken from you and others until the day you die... this is not how the repayment mechanism works... please read up. You're speaking in generalities and misinformation. ****
Maybe you are the one with the reading comprehension disability?
**** You can pay lesser amounts (within your means) than the otherwise required monthly payments and be discharged from the debt just the same after passage of a certain time...****
I could do what you suggest but, as I pointed out in my previous post :
The government does not pay the interest on your unsubsidized loans (or on any PLUS loans). You are responsible for paying the interest that accrues (accumulates) during the deferment period, but your payment is not due during the deferment period. If you don’t pay the interest on your loan during deferment, it may be capitalized (added to your principal balance), and the amount you pay in the future will be higher.
So deferring payment just makes the loan balance grow. NOT A SOLUTION.
Apparently YOU are the one who didn't read the post you referred to me.
http://www.usnews.com/education/blogs/student-loan-ranger/2012/03/21/learn-what-the-student-loan-forgiveness-act-could-mean-for-you
On March 8, Congressman Hansen Clarke (D-Mich.) introduced H.R. 4170, the Student Loan Forgiveness Act of 2012.
This bill is stuck on the floor of the House of Representatives. DOES NOT APPLY
http://www.finaid.org/loans/forgiveness.phtml
I qualify for none of the above. DOES NOT APPLY
http://studentaid.ed.gov/repay-loans/deferment-forbearance
The government does not pay the interest on your unsubsidized loans (or on any PLUS loans). You are responsible for paying the interest that accrues (accumulates) during the deferment period, but your payment is not due during the deferment period. If you don’t pay the interest on your loan during deferment, it may be capitalized (added to your principal balance), and the amount you pay in the future will be higher.
DOES NOT APPLY
You should read the links you post. I don't comment on links I do not read.
Here is a lnk I offer tin retort:
http://www.businessweek.com/articles/2012-09-06/student-loans-debt-for-life#p3
Well, plz. don't shoot the messenger, but I think Ben & al. are at to something with all the QE etc.
Check out Fed's latest Z1 and from there the credit market debt outstanding by sector
http://www.federalreserve.gov/releases/z1/Current/z1r-2.pdf
Simple as this: time series of "mortgages" has never, that is never, declined y/y before the crisis i.e. 2008. Since then it has declined by about 1tn. Same can be said for financial sector debt, but that declined by 3tn from 2008 to Q2/2012. And both series are still declining.
Well, now, population in the US is growing by about 2-3m per year, right? Just take note for the reasons behind Obama victory - more and more latino votes. So, from 2008 the total population is UP by about 10m. Ten million people more - that's about 2 Ireland's or 1.2 x Greece and yet the private sector gross debt is DOWN by 4 tn in 4 years.
Ok, who believes this trend will continue for another year? 2 years?
Or will the Ben&al. do something for that. I think they will prevail.
Two charts: total systemic (non shadow) debt:
And you have a problem. Because shadow deleveraging is removing over $1 trillion in credit money per year: something nobody accounts for.
And in a massively levered, dot.com bubble 2.0, private equity debt loader-uppers back in the game, no price discovery, ZIRP'D/NIRP'D Zone that forces the most incompetent (*cough* CalPERS) to chase the worse assets to try and generate any real net return, Bernank'd Broken Markets WORLD, the debt (visible and shadow), is going to rise yet again.
Thank You Tyler,
nobody can deny those charts you just posted, maybe because nobody knows the ultimate deleveraging needs in the system. Very true, but somewhere down the line it (deleveraging) has run its course.
Private consumption is about 70% of GDP in the US and we know that those mortgages have made a historical decline during the last 4 years - consumer credit is up but it is neglible. Now, think about the following news at MSM: "mortgages up for the first time in 5(6, or whatever) years". BOOM, S&P 500 shoots beyond 1500, for sure. Is this headline coming sometime in the future? Yes, absolutely yes, and when it comes that time series will go up for another 20 years.
Might we have some problems before that? Yes, but I'm inclining to bet for the most probable outcome.
Tyler,
That is the $6 trillion in real estate equity that has evaporated since Bear Stearns crashed?
You call it deleverage. We call it appraisal fraud of overpriced real estate that caused housing equity to vanish vanished.
Yes?
selling into the close..
These are not loans...these are Obama´s plan...redistribution....food stamps..disability income...car loans...student loans...are all REDISTRIBUTION...probably many others too
There's gonna be alot of 'under-the-table' jobs filled in the coming years. This will dig into local and Fed tax receipts.
I envision a day coming soon where you have to fill out forms to cash checks from you employer, with ID, so you will be tracked as a debtor.
That $105 billion...well Benny has that covered. And if he fails, Joe Middle Class Taxpayer will gladly provide the funds. The more free stuff the better says the progs; so lets have welfare equality and give everyone free stuff.
What's the One Document You have in Your Possession that gives You the Authority or Jurisdiction to Control my Life?
I highly recommend everyone read this, he did a wonderful job
http://www.dailypaul.com/244165/whats-the-one-document-you-have-in-your-...
This is bullish for Apple as all those professors and students buy igadgets with the loaned funds either directly in the student's case or indirectly via salary in the professors case.
/sarc
My friend's wife ( an ivy league english prof) posted recenty to facebook how she was attending a conference on Asian American comic books at Stanford. Also she is on sabatical after 3 or 4 years of teaching.
Yeah that's productive for society! /sarc
If they lose their jobs, universities close and they lose their pensions and sabaticals I won't shed a tear.
+1 I thought you must be kidding us so I looked up this Symposium on the Stanford website. It is real and I spotted this little gem of importance in the description:
"In our discussions, we aim to think through the intersection of comics and Asian American storytelling, the attendant problems of such specificity when considering the local against the backdrop of the national, and how the specificity of the medium contributes to narrating representation, diaspora, immigration, family and history."
Smiler, I could have easily believed that you lifted that quote directly from an AnAnonymous post, but the fact that it does not contain a single mention of "US Citizenism" or 'americans' makes me suspect otherwise.
Yeah I didn't look it up but that sounds exactly like other nonsensical pseudo intellectual academic garbage that she has posted so I am sure its an accurate quote.
Because all the Fed can do right now is print and issue debt.
No sympathy here......those stupid fucking idiot kids voted en mass for Obamster, they can suck it for the next two decades spending their most productive and fruitful years fo their lives being bankster slaves.
Do you seriously believe that if "those stupid fucking idiot kids" had voted Republican things would proceed differently?
No......they could have abstained or voted 3rd party. BUT THEY SUPPORTED, HOPED AND PRAYED FOR THE CLOWN to win instead of using their brains. And cried tears of joy and danced in the streets when he won.
Obviously because they believed he would save them from themselves and the banksters. Silly little fucks don't realize that he and the entire Dem/Repub parties are own lock, stock and barrel.
Maybe searing, inexorable financial pain will awaken them from their delusions. Logic and reason sure as hell won't.
FUCK THEM.
Nah you are right... But I dont feel so bad about leaving them with the current tab
Not kids. They are soldiers. College on borrowed dollars is their future until they are no longer useful. College is where they are trained. This is the same level of training a new recruit will receive.
Helicopter Ben had one piece of advice for Frb staff - borrow for college.
At least a drunken sailor spends his own money.
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