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So You Want To Short The Student Loan Bubble? Now You Can

Tyler Durden's picture




 

Even as the gargantuan $1+ trillion student debt load has been the bubbly elephant in the room that few are still willing to talk about (as the ease of obtaining very fungible loans, with ultra-low interest rates, have become the primary source of lifestyle funding for a wide swath of Americans who are rotating out of high yielding credit cards into this latest Uncle Sam subsidy, and is thus just one more aspect of the status quo perpetuation), there have been until now zero opportunities for a the proverbial highly convex "ABX" short in the student debt space. This of course is the trade that was put on by those who sensed the subprime bubble is about to pop in early/mid 2007 and made billions as the yield chasers were summarily punished one by one as first New Century blew up, and then everyone else.

Yet while one was able to buy synthetic "hedge" exposure with limited downside and unlimited upside (by shorting synthetic index spreads) in subprime, so far the only way to be bearish on student debt has been to short the equity of various private sector lenders - a trade with very limited upside and unlimited downside, and which in the current idiotic New Normal is more likely to leave one insolvent and crushed in a smoldering heap of margin calls following yet another epic short squeeze as GETCO's stop hunting algo run amok.

This may be about to change. As WSJ reports, SecondMarket Holdings, the private-market securities trading firm best known for allowing numerous overzealous fans to buy FaceBook at moronic valuations, on Monday "will roll out a platform allowing lenders to issue securities backed by student loans directly to investors."

Why is SecondMarket doing this? The same reason Lloyd Blankfein was selling Abacus (and all those other synthetic MBS CDOs) to clueless yield chasers all across Europe and Asia: yield chasing and career risk. The justification is also the same: making a market.

The move is driven mainly by investors' growing appetite for student loans, said Barry Silbert, founder and chief executive of SecondMarket.

 

"The catalyst for this new suite of services is investor demand," said Mr. Silbert. "At the end of the day, investors are yield searching."

And just as Paulson was able to coordinate with other sellers of synthetic exposure and have a bearish bet already set in the primary market following collusion with Goldman even before breaking for trading, so we are confident that enterprising packagers of securities will be just as capable in tranching various student loan packets into securitized layers with the assistance of SecondMarket, and offload those with highest risk to those with the most aggressive career risk-for-yield chasing fulcrum points.

Investors registered through SecondMarket already can trade student-loan securities they hold in their portfolios, said Mr. Silbert. Since 2008, about $6 billion worth has traded on the exchange, he said.

 

The new platform will allow lenders to issue securities directly to SecondMarket's base of more than 100,000 investors, including institutions and affluent individuals who qualify as so-called accredited investors by the U.S. Securities and Exchange Commission.

 

Issuers will be able to sell securities backed by private student loans, which aren't guaranteed by the federal government, as well as older federally backed student loans known as Federal Family Education Loan Program (FFELP) loans. They also will be able to distribute servicing reports through the new platform, said Mr. Silbert.

 

Educational Funding of the South Inc., or EdSouth, and another lender have signed up to use the platform, according to SecondMarket.

 

Edsouth, which typically buys student loans from other lenders, has used SecondMarket to trade student-loan backed securities in the past, said President and Chief Executive John Arnold. The ability to issue securities piqued his interest, he said: "Any opportunity for capital, you'd have to be looking at."

And while some will be furious at what SecondMarket is doing, we applaud it as for the first time there will be a real chance for price discovery and crossing bids and asks in this latest debt bubble. After all, they are merely doing what Goldman Sachs called "making markets" which in retrospect merely allowed the subprime bubble to pop faster than it would have otherwise. Which in this day and age of one-way bets in everything is to be applauded.

Of course, all that betting against the student debt bubble - which is merely one more way of "fighting the Fed" - will do is crash it promptly, only to see it reincaranted in the form of the latest Ben Bernanke monetization program (QEternity+2.718) which will be launched after this one fails to take the DJIA to 32,000.

The key, as always, will be about timing. Those who get in just right, will be able to retire promptly. Everyone else will be sweeping their local McDonalds.

 

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Sun, 03/03/2013 - 15:52 | 3295774 The Grip
The Grip's picture

QEternity+2.718... Hysterical!

Sun, 03/03/2013 - 16:21 | 3295825 Kirk2NCC1701
Kirk2NCC1701's picture

e^1.  Naturally!

Sun, 03/03/2013 - 19:01 | 3296110 Supernova Born
Supernova Born's picture

What are a bunch of unemployed youth yoked to an impossible amount of non-dischargable debt to do?

Sun, 03/03/2013 - 19:21 | 3296142 cynicalskeptic
cynicalskeptic's picture

Lifetime indentured servitude, selling oneself into serfdom or debtor's prison......  and you thought there were no choices.

Sun, 03/03/2013 - 19:38 | 3296169 booboo
booboo's picture

I am sure they can work it off with a four year stint in The Global Force (Farce) for Good(s)

"So daddy what did you do in the army? Well honey, I was a Commodity Resource Officer serving with The Goldman Sackers in Indonesia during the Petrol Rebellion, paid for my college education which allowed me and your mother to secure these nice jobs as Walmart stocking supervisors Automotive Aisle at store #406045"

Sun, 03/03/2013 - 17:16 | 3295932 Silver Bug
Silver Bug's picture

Don't worry it's QE to infinity! The Bernake will just bail out the banks that have their loans defaulted on.

 

http://schiffblog.blogspot.ca/

Sun, 03/03/2013 - 15:57 | 3295775 The Grip
The Grip's picture

/edit - dup goddam safari & my fat fingers

Sun, 03/03/2013 - 15:57 | 3295783 _ConanTheLibert...
_ConanTheLibertarian_'s picture

SecondMarket Holdings should rename themselves to BuyAtTheTop Holdings.

Sun, 03/03/2013 - 16:07 | 3295809 css1971
css1971's picture

I'm sure there is a model somewhere that shows student debt is of AAA quality no matter the economic circumstances as long as you spread the security over enough students.

Sun, 03/03/2013 - 16:37 | 3295864 augustusgloop
augustusgloop's picture

Create tranches by league / zone :

Ivy tranch, Pac 12, etc. and  marke them to the schools and alumni. Then of course the (still AAA) garbage tranches of Florida school of information studies, DeVry, U of Phoenix, Lassen community college. 

Sun, 03/03/2013 - 16:58 | 3295899 onewayticket2
onewayticket2's picture

SoFi has already done this...well, just with the top tier/low default.

Social finance, based in SF, uses alums to fund loans, but ONLY at low default institutions.

Sun, 03/03/2013 - 17:31 | 3295956 chubbyjjfong
chubbyjjfong's picture

I just cannot believe that this sort of shit is happening again.  In light of what happened in 2008, why would anyone in their right mind want to invest in a whole bunch of shitty student loans? Did people not learn anything in 2008? God dam.. unbelieveable!!  This whole shit storm is really going down now.  

Sun, 03/03/2013 - 17:53 | 3295984 augustusgloop
augustusgloop's picture

Sell all the ITT, Devry, etc. technical institute, long island schoold of medical plebotomy, crap to German pension funds, making it sound like they are baby MITs & Caltechs, ja? 

Sun, 03/03/2013 - 21:07 | 3296381 booboo
booboo's picture

Throw in Full Sail (or as I have labeled it, Full Fail) for good measure.

Wed, 03/06/2013 - 09:19 | 3304287 Its_the_economy...
Its_the_economy_stupid's picture

I was talking w a twenty-something today that was in beautician school (hair cutting). She has borrowed in the high $20k for a 3 year school to learn how to cut hair for chissakes. Who the hell needs 3 years of school to cut freakin' hair.

 

You know the state governments that set up these trade licensing boards that require this crap just to get a certificate to cut hair are in bed with these piece of crap educators fleecing our youth. It is a goddam crime!

Sun, 03/03/2013 - 19:55 | 3296212 YungHungAndLegal
YungHungAndLegal's picture

TopTickYou Holdings

Sun, 03/03/2013 - 15:58 | 3295786 bigkahuna
bigkahuna's picture

Lets do this.

There is money to be made from this somewhere.

Sun, 03/03/2013 - 16:39 | 3295831 tickhound
tickhound's picture

 

 

Until the Mother of all AIG-like Bailouts comes in and squeezes the piss out of the shorts and the industries "exposed" become "beneficiaries" and any that survive consolidation proceed to make new highs.... All in the name of EDUCATION and protecting America's FUTURE.  It's practically a matter of National Security.  Students re-eligible for new loans in 2/3 years tops. 

As long as that doesn't happen you're good...

Of course they'll HINT at it first, a thousand times.  Deny it too.    

 

 

Sun, 03/03/2013 - 16:57 | 3295897 Never One Roach
Never One Roach's picture

You can always sell it to Big Wealthy Muppets, like the Chinese a La 2008:

 

The earthquake on the Wall Street, triggered by the bankruptcy of Lehman Brothers, has been shaking the financial sector in Hong Kong in the last two weeks. Thousands of retail investors holding minibonds of Lehman Brothers, at the edge of losing their lifelong savings, have filed complaints to the regulators and even staged protests, in a bid to urge the government to take action upon some intermediaries??mis-selling, and to hold regulators accountable for failing in supervision and investor education and protection. 

 

 "I am illiterate. I have deposited my savings in the bank year after year. When the salesman (at the bank) recommended me the minibonds as the most suitable financial product for retirement, promising higher interest rate and low risk, I invested HK$500,000, all the money I have saved from decades of manual work??, said an old man in trembling voice on a meeting organized by the Consumer Council of Hong Kong.

 

 

- See more at: http://www.chinastakes.com/2008/9/lehman-brothers-minibonds-teach-hong-k...

Sun, 03/03/2013 - 18:08 | 3295999 MisterMousePotato
MisterMousePotato's picture

It's for the chiiiiiiiiiiiiiiiiiiildreeeeeeeeeeeeeeen.

Sun, 03/03/2013 - 18:51 | 3296091 Never One Roach
Never One Roach's picture

All part and parcel of the, "No Muppet Left Behind Act."

Sun, 03/03/2013 - 16:33 | 3295853 Cadavre
Cadavre's picture

someone somewhere has gotz to be rough drafting credit default swap prospectus [roposals betting against collection of student loan debt ... right (?) ... shit it don't matter -  collected - uncollected - it all in USD - the paper required to charter a student loan CDS is worth more than the USD underly  - save the paper for something important - like posters of a blood red "V" to hang from the national mall's trees that will eventually be decorated with politico heel hung (ala Mussolini's wake) carcasses for the commoms to use as spittoons and pilgrimage urinals.

Need a couple of million, cash, to underwrite a student loan CDS for sure. Marketability would depend on how much of the student loan debt has been retailed into institutional and / or private (non NGO) portfolios - is there a source for privately held student debt?

Sun, 03/03/2013 - 20:28 | 3296303 formadesika3
formadesika3's picture

I counted 59 words in that last sentence before the break. I was afraid you were losing it but then you came on strong at the end.

Sun, 03/03/2013 - 23:10 | 3296709 DeadFred
DeadFred's picture

Wait for the ETF.

Maybe Student Holding Investment Trust? Just a guess.

Sun, 03/03/2013 - 15:58 | 3295788 icanhasbailout
icanhasbailout's picture

The Muppetization of America proceeds apace

Sun, 03/03/2013 - 16:01 | 3295791 Glass Seagull
Glass Seagull's picture

Tenured finance profs probably going to "teach" their students to buy this debt.

Sun, 03/03/2013 - 16:00 | 3295793 Uinta
Uinta's picture

So will Jon Corzine be going long?

Sun, 03/03/2013 - 16:05 | 3295797 JustObserving
JustObserving's picture

How can you make rational decisions in a manipulated, fraudulent market?  Thanks, I will pass.  The sage of Omaha may have inside information but I don't have any. He can make a few billion like he did with the Goldman Sachs bailout.

Keep up the Financialization.  That is the only thing we do better than any other economy.  Dagong, the Chinese rating agency, says that it is half the US economy.

Sun, 03/03/2013 - 18:22 | 3296028 Freegold
Freegold's picture

A rational decision would be to buy gold. You can make a killing in these distorted markets but chances are you will wake up one day and find that your wealth is mostly gone. I care not for yeild, only the return of my money. But the yield not collected will come back in the form of a windfall profit from golds revaluation. What is gold worth in a world full of paper-IOU:s? We will soon find out.

"Gold, go get you some" Aristotle

Sun, 03/03/2013 - 18:30 | 3296048 JustObserving
JustObserving's picture

I could not agree more.  But silver will rise faster.  So both gold and silver. 70% silver by dollars and 30% gold.

Only about $24 billion in silver bullion available in world now (870 million ounces) and about $3550 billion in gold (2000 million ounces).

Sun, 03/03/2013 - 19:28 | 3296151 cynicalskeptic
cynicalskeptic's picture

Haven't you heard?   WIth central bank loans, unlimited rehypoothecation and magical ETF's there's UNLIMITED amounts of gold and silver available for purchase.  

Just don't count on it actually existing if you don't have it in your personal possession.

Sun, 03/03/2013 - 16:03 | 3295800 Hughing
Hughing's picture

The purpose is give the fed a way to buy the debt. Wake me when the fed buys my Visa bill

Sun, 03/03/2013 - 16:25 | 3295839 Kirk2NCC1701
Kirk2NCC1701's picture

You, sir, are not a sheep, or a useful fool/tool.  You are a frickin genius!

Sun, 03/03/2013 - 16:47 | 3295881 debtor of last ...
debtor of last resort's picture

Every thread has it's wake up call.

Sun, 03/03/2013 - 16:06 | 3295804 steve from virginia
steve from virginia's picture

 

 

 

Sell short? how ... un-American!

 

That's terrorism, buddy!

Sun, 03/03/2013 - 16:13 | 3295817 disabledvet
disabledvet's picture

"highways with no cars. Government with no law. Universities with no students. Finance with no money." very American indeed...

Sun, 03/03/2013 - 16:10 | 3295808 Kaiser Sousa
Kaiser Sousa's picture

quick somebody alert CALPERS...

im sure theyd be interested.........

Sun, 03/03/2013 - 17:56 | 3295987 augustusgloop
augustusgloop's picture

would be like carp, eating their own shit off the bottom of the seafloor in a beaucratic virtuous circle. 

Sun, 03/03/2013 - 16:13 | 3295815 ebworthen
ebworthen's picture

Brilliant.

More debt instruments to make certain the bubble pops and more bailouts and QE for Wall Street and the pain to the students talked into the debt for illusory employment and the citizens who never went to college footing the bill for the FED and Wall Street's malfeasance.

The modern version of black tulips and South Seas shares, and it just goes on and on.

I would say "unbelievable" but it is too believable.

Sun, 03/03/2013 - 19:32 | 3296158 cynicalskeptic
cynicalskeptic's picture

It astounded me that the housing bubble lasted as long as it did.    We went from 20% down and over 8% interest in 1990 to NINJA loans for everyone........   WTF?   

Even now, Wall Street remains propped up by unlimited ZIRP and TARP money, and govenrment debt expands at an exponential rate.

 

You think there would be people with pitchforks and torches in the streets but no.......   as long as the bread and circuses contiunue...  Foodstamps, years of unemployment, and the illusion of 'hope and changer' even as it's business as usual for the big banks and Wall Street.

Sun, 03/03/2013 - 16:21 | 3295828 bsdetector
bsdetector's picture

Nope, don't buy it. Keep your hard earned dollars out of this ponzi scheme. Starve the beast don't try to short it.

Sun, 03/03/2013 - 16:21 | 3295829 Michelle
Michelle's picture

Could we be so lucky these securities get sliced and diced and tranched so many times that they "lose" the identities of the borrowers?

"Screw you, that ain't my debt."

"I never attended school."

"You have me confused with Linda Green."

Sun, 03/03/2013 - 22:30 | 3296613 ncdirtdigger
ncdirtdigger's picture

No, I am Linda Green.

Sun, 03/03/2013 - 16:22 | 3295830 Critical Path
Critical Path's picture

Good, Burn it down

Sun, 03/03/2013 - 16:23 | 3295833 ZeroFreedom
ZeroFreedom's picture

Excellent job second market. Is there an ETF so I can short?

Sun, 03/03/2013 - 16:28 | 3295843 Downtoolong
Downtoolong's picture

I can just imagine SecondMarket marketing this to students:

“Hey, want a great place to invest your student loan proceeds until your tuition is due? The more you borrow, the more you can make. Your interest alone could be enough to buy the new iPod5s.”

Sun, 03/03/2013 - 16:53 | 3295891 W74
W74's picture

Mwhwhahahhehaha.

Sun, 03/03/2013 - 18:59 | 3296105 GMadScientist
GMadScientist's picture

To really do things right, they'll need to find a way to end up with multiple students responsible for the same loans.

Sun, 03/03/2013 - 16:27 | 3295846 Born-Again Bankster
Born-Again Bankster's picture

The yields should buy pensions another 4 years before the whole thing explodes.  Damn...time to put the popcorn back in the pantry.  I thought we were getting close.

Sun, 03/03/2013 - 16:28 | 3295847 ToNYC
ToNYC's picture

So I can pay off my six figure school debt by shorting my loan cdss! how conveeeenyent

Sun, 03/03/2013 - 16:39 | 3295868 hmmmstrange
hmmmstrange's picture

I'm "going back to school" to get a loan to fund shorting my loan.

Sun, 03/03/2013 - 17:26 | 3295945 Zone1
Zone1's picture

The Magnetar trade on yourself!

Sun, 03/03/2013 - 18:06 | 3295996 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Ha! Brilliant.

Sun, 03/03/2013 - 18:58 | 3296103 ToNYC
ToNYC's picture

That's the lesson they are not teaching in the universcities so just borrow and lever the debt 10x since you can't go never bankrupt more than once, uh, never ever. one year at 60k NYU can work more half a miltard; I can learn to buy up greenwich village for dorm rooms like them too! john paulson goes to college again.

Sun, 03/03/2013 - 16:32 | 3295857 Bam_Man
Bam_Man's picture

The Fed can only buy "risk-free" debt (Sovereign credit) and that wwhich comes with collateral attached.

What do you suppose the "collateral" will be for the Student Loans they will inevitably be buying? Hmmmmmm....

Sun, 03/03/2013 - 16:50 | 3295886 W74
W74's picture

Souls.

Sun, 03/03/2013 - 20:41 | 3296327 Satan
Satan's picture

;)

Sun, 03/03/2013 - 17:06 | 3295915 Hughing
Hughing's picture

The full faith and credit of US Treasury:  gov't issued Sallie first then the Treasury sponsored refi's.  

Sun, 03/03/2013 - 18:54 | 3296092 formadesika3
formadesika3's picture

A lien on your minimum-wage paycheck.

Sun, 03/03/2013 - 19:41 | 3296181 Whoa Dammit
Whoa Dammit's picture

Foxconn 2.0

Cue the talking heads going on about how reasonable it is for students to have to work off their debt, by laboring free oh lets just say for the next 10 or 20 years.

(A couple of days ago I actually heard some imbecile on Fox News promoting that it is ok for employers to tell employees what they can eat if the employer is paying for the employeee's health insurance. First time I ever wanted to shoot my TV set.)

Sun, 03/03/2013 - 16:33 | 3295860 Never One Roach
Never One Roach's picture

Why not get a student loan for $120k so one can remodel that $800k beaten up trailer house in Culver City, right?

Sun, 03/03/2013 - 16:38 | 3295867 Atomizer
Atomizer's picture

Bauhaus - "Party of The 1st Part"

 

 

Who are you?

My card, pretty lady

Devil may-care music production, Beelzebub, Scratch, President

I like your style! Too bad you're not a singer

Oh, but I am, I am a singer!

Hmm, no fooling

No, no listen...

 

Fantastic! Different!

I want to be a star, oh please!

You've talked me into it. Contract!

 

Just our standard contract, nothing fancy

Fame! Fortune! Fans! Gold records! Concerts! World tours! Your name in lights!

Take your time, read it all

Oh, I give up. Can I trust you?

Ok, I'll sign

Write!

Where's the ink?

We always use blood, it's more permanent

Oh, I don't know, can't we wait for Dad?

Oh, sure, I'll be back next year. Come on, Wheeze!

Next year?! Oh wait, wait, stop. I'll sign

What about a band...? I know a drummer

She can't be bothered kid, she's got an interview

The interview circus is so absurd, and so silly

How do you feel about your sudden success?

Well, I feel like being a big star is really great, you know

It's like, fabulous. Lonely, too, sometimes

Oh, that's nice

This is the biggest thing ever to hit rock!

You're at the top now, sweetie

Yeah, but where do I go from here?

Don't worry, I want you, we have a bargain

No, I didn't mean that, wait!

I've been waiting, now it's my turn

No

According to our contract, at precisely midnight, at the moment of her greatest triumph, the party of the first part, that's you, agrees to render up her soul now and forever more

to the party of the second part, that's me

Shall we go?

Sun, 03/03/2013 - 18:51 | 3296093 Whoa Dammit
Whoa Dammit's picture

And the rest of us get dragged through Dantes 9 circles of hell, without ever signing up, just for trying to live in this time and place in the USA.

Sun, 03/03/2013 - 16:52 | 3295889 news printer
news printer's picture
Egyptian gas stations prepare for rationing

Egyptian gas stations will begin distributing gasoline and diesel fuel under a coupon system in July, according to Egyptian Minister of Petroleum and Mineral Resources Osama Kamal.

 

http://al-shorfa.com/en_GB/articles/meii/features/2013/03/02/feature-01

 

Sun, 03/03/2013 - 17:03 | 3295905 Bam_Man
Bam_Man's picture

And soon ,a camel in every driveway!

Sun, 03/03/2013 - 17:31 | 3295955 bugs_
bugs_'s picture

Even more bad news - we've eaten all the horses

Sun, 03/03/2013 - 18:12 | 3296009 MisterMousePotato
MisterMousePotato's picture

Bon mot, Sir. Bon mot.

Sun, 03/03/2013 - 17:07 | 3295916 Dick Darlington
Dick Darlington's picture

The move is driven mainly by investors' growing appetite for student loans, said Barry Silbert, founder and chief executive of SecondMarket.

"The catalyst for this new suite of services is investor demand," said Mr. Silbert. "At the end of the day, investors are yield searching."

 

LOL! At the end of the day investors are not just yield searching, they are fecking STUPID!

Sun, 03/03/2013 - 17:16 | 3295931 jomama
jomama's picture

free bennybux, bitchez.

Sun, 03/03/2013 - 17:24 | 3295942 Zone1
Zone1's picture

Now we can only hope that some CDO's come out of this.  The engineering student tranche will be AAA rated and law school tranche will be the equity portion.

Sun, 03/03/2013 - 17:32 | 3295957 Missiondweller
Missiondweller's picture

Please, please, please do tranches by major.

 

I'll go long engineering degrees and short liberal arts!

Sun, 03/03/2013 - 17:35 | 3295960 bugs_
bugs_'s picture

The Munder SLBS Fund

Sun, 03/03/2013 - 17:41 | 3295971 High_on_Sarcotics
High_on_Sarcotics's picture

Short the CDO.

Buy as much as you can when the price hits the floor.

Sell them back to the fed at a profit?

Sun, 03/03/2013 - 17:44 | 3295975 AgShaman
AgShaman's picture

Oh, 'misery' really does love 'company'?

Sun, 03/03/2013 - 18:06 | 3295997 Sleepless Knight
Sleepless Knight's picture

This shouldnt be allowed. They will sell it off as a great investment just ot cover their losses with other STUPID peoples money. Why cant this shit be stopped - it so obvious now - or is it just todays business as usual - sheeple beware?

Sun, 03/03/2013 - 18:10 | 3296005 RMolineaux
RMolineaux's picture

Willl the rating agencies give the top tier AAA, as in the previous subprime?

Sun, 03/03/2013 - 18:38 | 3296067 Winston Churchill
Winston Churchill's picture

Only after the creation of SLERS(Student Loan Electronic Registration Systems)to hide

the mulitple sales of single loans to the dumb money.No way in hell they can

make money on this crap unless its in another Ponzi scheme.

Sun, 03/03/2013 - 20:21 | 3296289 formadesika3
formadesika3's picture

Enabling legislation soon to be announced in Congress.

Sun, 03/03/2013 - 20:29 | 3296305 AgShaman
AgShaman's picture

That's a unique way of announcing the insider trading that's about to ensue?

Sun, 03/03/2013 - 20:18 | 3296273 formadesika3
formadesika3's picture

 

sheeple by definition cannot 'beware'. 'Beware' is short for 'Be + Aware.'

See the problem?

Sun, 03/03/2013 - 18:09 | 3296002 Cadavre
Cadavre's picture

Bailout alternatives that did not include bolstering the 144$ billion dollar bonus pig `n a poke cash Wal Street gave itself for engineering the financial collapse in 2009 and short covering the white shoe boy's bond / no reserve cds paper bathhouse parlors laid on the global financial markets that were not considered include:

The balout could have paid off all the residential mortgage debt and 90% of US credit card debt.

Convert every household in American to 100% solar power 5 TIMES OVER!

Pay off every student loan in the US 20 times over.

I don't think ass-pick-finger-boy Paulson and Tiny Tim slurping under the table and Kahzar what's his name considered these alternatives because of the "actual" work it would have required - Wal Street is an easy one stop drop box - - had the alternative uses of the bailout flow been directed to mortgages and credit card balances - someone  would have to look all that shit up - you know - research - ie "work" - which would mean a lot of K-Street Johnnies would need to cut short their "find the quarter" shenanigans with the prime K-Street Kiddie Brothel pre-school flesh puppets bussed into the cloak roms of our halls of government. 9 month vacations just ain't enough time for the hardcore corrupts on CSPAN to tote and and count all the cash in the bribe bags - it's exhausing - especialy after the cloak room rizzel drizzel takes the legs away!

Sun, 03/03/2013 - 18:24 | 3296033 Joseph Jones
Joseph Jones's picture

Pray for unexpected asteroid to kill every living politician in DC, starting with the head cheese and the next four people in line after him, and all SCOTUS...hope and pray they are all assembled for some event. 

Sun, 03/03/2013 - 18:31 | 3296052 Juggernaut Nihilism
Juggernaut Nihilism's picture

So what is the best way for a retail investor to short this disaster?  I made some money on the downside of the 2008 crisis, but missed the real opportunities.  I don't plan on missing the freebie of the student loan debacle, but I haven't been sure of the best approach.

Sun, 03/03/2013 - 19:03 | 3296116 formadesika3
formadesika3's picture

I can write you a contract. You have to send me all your contact information, as well as detailed contact information of all your closest relations, parents, spouse, children, etc.

This is just for verification purposes. No worries.

Sun, 03/03/2013 - 19:18 | 3296139 Whoa Dammit
Whoa Dammit's picture

I have friend who is a Nigerian businessman who may be willing to help you, but first you will need help him to recover his diamonds that are being held by customs, so that the investment pool will be large enough for both of you to make the really big money (snark).

Sun, 03/03/2013 - 19:09 | 3296124 PersonalRespons...
PersonalResponsibility's picture

.

Sun, 03/03/2013 - 19:20 | 3296141 cosmicinsight
cosmicinsight's picture

Secularization of debt as a trading vehicle is a sure bet to impending crisis.Well this will certainly help in perpetuating the self fulfilling prophecy that is ushered by our unregulated and desperate system.

Mon, 03/04/2013 - 14:20 | 3298327 formadesika3
formadesika3's picture

Oh gee, I finally got the joke! Thanks!

Sun, 03/03/2013 - 19:40 | 3296179 Oldwood
Oldwood's picture

Sure, play the markets and when it all blows up and shits all over you, I don't want to hear about evil bernanke or all of the rest of the villains. Stupid is as stupid does. People investing is any part of this market are the ones that will blow it up, and likely fuck all the rest of us in the process. But go ahead. Go for the easy money. What could possibly go wrong?

There have always been evil pricks out there scamming people looking for the easy money. They are bad people, but....It's the dumbasses that just keep going back to the table again and again that are the problem. Its not the crooks, it's the dumbasses that are killing us! Obama is convinced that we are all idiots and he is playing us like a fiddle. After all of this who can argue with him? HE and his kind are the Devil. We will never destroy the Devil. We have to be aware that he exists and what his game is. I've got no real religion, but what is going on right now with Obama and how the people are reacting shows me the face of the Devil if I were to ever see it. We, as a people, are as weak as water.

Sun, 03/03/2013 - 20:15 | 3296258 formadesika3
Sun, 03/03/2013 - 20:58 | 3296364 Talons Point
Talons Point's picture

Now I just need to know how to time my exposure

Sun, 03/03/2013 - 23:04 | 3296701 22winmag
22winmag's picture

Student-loan backed securities aka mortgage backed securities? Are you kidding me?

 

Didn't the King of Jordan or some other sensible middle eastern ruler ban the sale and possession of the latter before that bubble burst?

Mon, 03/04/2013 - 03:16 | 3297080 resurger
resurger's picture

That's what i want to hear, now you can short the FRAUD! good luck Ben on monetizing the Studen loan bubble...

Let's get rich ...

+5

Mon, 03/04/2013 - 04:00 | 3297115 Joe A
Joe A's picture

These students' loans backed securities will be triple A rated of course. Let's see if the world learned anything and will or will not buy these 'financial products'. Cheat me once shame on you, cheat me tiwce shame of me. But I am afraid that people and institutions will be stupid enough to fall for this once again. Well, it is in the end all backed by tax payers and in this case the taxes that will be paid by the very students. They will be tax and debts slaves forever.

Mon, 03/04/2013 - 12:01 | 3297834 WallowaMountainMan
WallowaMountainMan's picture

soooo, like, if they change the bankruptcy laws back to where student loans can be included, will that matter?

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