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Student Loans Soar To Record $1.111 Trillion, Up 12% In Past Year

Tyler Durden's picture




 

When the Fed releases its quarterly household credit report, the one item most focused on is the amount of mortgages outstanding and originated in the prior quarter, since courtesy of its monthly consumer credit updates we know that US households have largely given up charging their credit cards at the expense of non-revolving student and car loans. So here is the summary.

First, the good news: courtesy of ZIRP mortgage defaults and discharges tumbled in Q1, resulting in an increase in total mortgage debt balances of $8.17 billion, or an increase of $116 billion in the quarter. 

Now, the bad news: the increase in total mortgage balances had nothing to do with a surge in mortgage demand. Quite the contrary, as we have been reporting and as bank mortgage origination bankers have felt first hand, for whatever reason mortgage origination as a business has virtually slammed shut. The Fed confirmed as much when it reported just $332 billion in originations in Q1: well below the $452 billion in Q4, and certainly below the $577 billion a year ago.

In other words, the only reason why total mortgage balances did increase is due to a slowdown in either prepayments and/or discharges, which represents as the simple difference between Q1 originations and the change in total mortgage outstanding, tumbled to just $216 billion - the lowest in the past decade! One can be certain that absent a pick up in originations the total mortgage balances are set to tumble in the coming quarter as even this one last final refuge of the "consumers are releveraging" crowd is smashed.

But that is not to say that consumers have no interest in increasing their debt load. Quite the contrary. Because when one excludes those two conventional methods of leveraging up, credit cards and mortgages, US households are on an epic spending spree funded by, what else, student loans.

We have covered the topic of the student loan bubble extensively in the past so we won't waste more digital ink on where it comes from or what it means for the troubled US consumer, suffice to report that according to the Fed, in Q1 total Federal student loans rose by another $31 billion to a record $1.11 trillion, and up a whopping $125 billion, or 12% from this time last year.

For all the talk that the student loan bubble may have popped the demand for cheap, uncle Sam loans certainly is as strong as ever. The one places where the bubble may have popped, however, is the amount of delinquencies: at 11% it means that some $122 billion in student loans will never be repaid. And considering the Fed historically does a woeful job of accurately estimating the true delinquency rate, we would estimate that at this moment some $250-$300 billion in student debt is already 1 or more months delinquent with no intentions of ever being repaid.

 

Full NY Fed household debt presentation below (pdf)

 

 

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Tue, 05/13/2014 - 13:11 | 4755497 Dr. Engali
Dr. Engali's picture

Sustainable.

Tue, 05/13/2014 - 13:15 | 4755518 NoDebt
NoDebt's picture

Non-dischargable.

Tue, 05/13/2014 - 13:25 | 4755549 libertus
libertus's picture

Let the higher education bubble burst! If you have a masters or doctorate degree take charge of your own teaching and work with oplerno.com. Faculty own the intellectual property they produce and set the tuition. 12 week classes with three hours of contact time. 25 students max per class. Credits earned are transferable to other institutions if they accept since Oplerno has been approved by the Vermont State Board of Education. Teach in almost any language. Earn anythere from $4000 to $9000 per class. Courses cost students between $500 and $1500 per three credit class. 

Higher education is broken! Why waste time with reform that is impossible. Create a new system with us! Revolution! NO MORE STUDENT LOANS OR DEBT SLAVERY. JUST SHOUT "I"M SICK OF IT! I"M NOT GOING TO TAKE IT ANYMORE!"

 

Tue, 05/13/2014 - 13:31 | 4755592 Sudden Debt
Sudden Debt's picture

but what about the prefered dividends?.... those poor shareholders...

Tue, 05/13/2014 - 13:41 | 4755636 libertus
libertus's picture

Sorry no quick profits. Only a long term play on education and actually treating students/faculty with respect. The current system is dead man walking. 

Tue, 05/13/2014 - 14:02 | 4755734 NotApplicable
NotApplicable's picture

On a long enough timeline...

Besides, student loans are just another bailout to the contruction industry. I'm glad I'll be retired and holed up in the woods before the infrastructure bubble blows here at State U.

Tue, 05/13/2014 - 14:05 | 4755747 libertus
libertus's picture

It is a payout to the senior faculty and administration. However, point well taken. 

Tue, 05/13/2014 - 14:30 | 4755847 fonestar
fonestar's picture

fonestar noticed a massive increase in the people walking around with degrees years ago.  So either pop culture and television has created many, many more brilliant people.. or else educational standards have really gone to shit and degrees are about as valuable as every other paper asset out there.

Tue, 05/13/2014 - 14:42 | 4755903 libertus
libertus's picture

Fonestar is correct. The reason being is that there is no way to really show what you have learned. There is an answer for that--the portfolio. Unfortunately TPTB like their transcripts and named schools. What a racket! Just because you drive a BMW 7 series does not mean your a good driver. It just means you could make the lease payments. Just because you went to HARVARD or anyone of the other elite schools does not mean you actually can do something. It just means you have the social capital to get admitted. Oplerno upends that belief and is actually all about individual accomplishent and responsibility. 

Wed, 05/14/2014 - 17:02 | 4760541 Monty Burns
Monty Burns's picture

I'd look for a Harvard grad who's white, working-class and male.  Given the almost insuperable obstacles he'd have had to overcome he'd be worth big money.

Tue, 05/13/2014 - 14:42 | 4755904 libertus
libertus's picture

Fonestar is correct. The reason being is that there is no way to really show what you have learned. There is an answer for that--the portfolio. Unfortunately TPTB like their transcripts and named schools. What a racket! Just because you drive a BMW 7 series does not mean your a good driver. It just means you could make the lease payments. Just because you went to HARVARD or anyone of the other elite schools does not mean you actually can do something. It just means you have the social capital to get admitted. Oplerno upends that belief and is actually all about individual accomplishent and responsibility. 

Tue, 05/13/2014 - 13:47 | 4755667 aVileRat
aVileRat's picture

So if one were to cross plot employment wage growth to hours spent in education, I think we would see a strong trend to the declining value add of "junk" education which makes sense because most human capital is being forced into subsidized/bubble industries where that labour is a pure commodity vs. Indian/Chinese/LatAM sweatshops.

WSJ did a great piece on how many schools (such as stanford) are shutting their highest wage undergrad programs such as petrochemical engineering for more "progressive" programs to take advantage of tenured professor tax breaks, at the expense of their student job placement rate.

The big question I had with a colleague last night at an industry gala: what the fuck are all these non-job's no-skill's going to do ? How do you respond when you are told the 6-year state university degree has zero applied skills to a industrial level entry job ? Many are 140% tapped out (including family loans). That guy agreed: it's going to be nigh impossible to employ this lost generation without a huge retooling or systemic event that mass-trains them. Gen-Y (with the exception of the Gen-E entrepenuers amongst them struggling amid the wasteland) and Gen-Z may be writeoffs at this stage if another collapse leads to a 21% layoff push to the payroll.

 

 

 

 

Tue, 05/13/2014 - 14:00 | 4755723 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

What I always find interesting is how students these days want better facilities at lower prices. If they were serious, they would ask for a better education which seems something they are not interested in. The delusion of getting a sheepskin will lead to a job with their pointless degrees is lost on them. As someone who suffered through Eng school and finished with no debt, let them default for their poor choices. It is a free country.

Tue, 05/13/2014 - 14:19 | 4755797 FredFlintstone
FredFlintstone's picture

I studied engineering at a Big 10 school and our building was kinda dumpy, but we didn't know it. They have torn down all the old engineering buildings and have constructed tall, glass monuments that are energy hogs. I have walked through a couple and cannot believe how under utilized they were. High schools these days are so high end, it is unbelievable, but that is another story.

Tue, 05/13/2014 - 14:45 | 4755915 superflex
superflex's picture

Agreed.

The engineering and physics quad buildings didnt have AC when I started at UC in 1986.  We were happy to have a bar on campus.  I remember during the cicada outbreak of that year, having hundreds of critters in the classroom since we had to have the windows open to keep the rooms below 90°. 

Now days, there is a student gym on campus that would put 10 Planet Fitness's to shame.  I guess you cant get a degree without being able to scale the climbing wall.

Fucking spoiled brats.

Tue, 05/13/2014 - 14:47 | 4755923 Miffed Microbio...
Miffed Microbiologist's picture

I toured recently 2 colleges I had attended and was absolutely shocked at the massive amount of money spent on student " comfort". Fancy gyms. Yoga/Pilates studios. Spas. Palatial eateries. Olympic pools. Dear Lord what a crock. I guess students insist on an "experience" with their worthless degree. There was no student fitness center when I attended. We just jogged in the local area or went to the Y. Funny, I never felt I deserved more.

Miffed;-)

Tue, 05/13/2014 - 14:41 | 4755898 moonshadow
moonshadow's picture

i dont think the student mindset is the biggest problem. it's the parents. they still think that if their kid goes to college- for just about anything- that they will be assured of a good job. the reality hasnt dawned on parents yet. and they are not being told the reality by faculty or counselors in high school. so the problem will be solved only After their indebtedness mounts and the lightbulbs go off in parent's heads all over america. i think it's happening Now...

Tue, 05/13/2014 - 14:07 | 4755755 Citxmech
Citxmech's picture

After I finished my BA, I immediately went back to trade school.  With that combo - I was hired before I was even done with school.    Personally, I think the combo of a liberal arts education and a solid trade was the best choice I could've made at the time (my math skills were not really strong enough for science/engineering).  After 10 years in industry, I went back for an advanced degree and, again, was hired before being finished with school.  

The Catch-22 for most folks is how to obtain both a broad-based education that sets you apart from all of the OTJ folks and also have enough actual experience to set you apart from all the book-schooled folks.  If you can nogotiate this conundrum, you should do fine.

Tue, 05/13/2014 - 14:16 | 4755792 Son of Loki
Son of Loki's picture

No need to read anymore when all you need to do is watch Thug Notes ... all in the local dialect:

 

http://www.thug-notes.com/

Tue, 05/13/2014 - 15:24 | 4756049 James_Cole
James_Cole's picture

After I finished my BA, I immediately went back to trade school. 

Can't beat real hands-on experience either, guy I know keeps having these young guns try and take his job. Pushing mid 70s and these double Msc Mba come in fresh outta <insert fancy school here> thinking they're going to kick him out, not happened yet probably ain't gunna happen. 

That said, I've pointed this out lots but it bears repeating..

http://www.kurzweilai.net/images/probability-of-computerisation.png

I would actually think that graphic is highly optimistic as it doesn't consider enough software implications in various applications that may not replace people but will certainly lower the entry level. 

Tue, 05/13/2014 - 17:15 | 4756475 A Cruel Accountant
A Cruel Accountant's picture

College is FREE now!

 

http://www.mooc-list.com/

Tue, 05/13/2014 - 13:23 | 4755556 corporatewhore
corporatewhore's picture

Currently non dischargable except under extremely financially stressed circumstances.

This will have to be changed in order to make debt slaves of another generation in order to move the housing market.  Most won't declare chapter 7 or 13.

Payments will be reduced to much less than required currently.

 

Tue, 05/13/2014 - 13:30 | 4755590 insanelysane
insanelysane's picture

Like your thinking!  The IRS is probably working on a new rule where if you are underwater with your student loan, you can buy a house. and then apply the mortgage interest deduction to the outstanding student loan.

Tue, 05/13/2014 - 13:42 | 4755645 Bindar Dundat
Bindar Dundat's picture

An entire society as debt slaves -- just the same way they control the banks.  You own the debt, you own the bank, the people and society.   These are the  bonds that truly shackel us.

Tue, 05/13/2014 - 13:46 | 4755673 corporatewhore
corporatewhore's picture

Great idea!  Call Senator Warren and get this on her presidential platform!

Tue, 05/13/2014 - 14:25 | 4755822 insanelysane
insanelysane's picture

According to granny, no one deserves to be paid over 80k per year except college professors.

Tue, 05/13/2014 - 14:09 | 4755762 FredFlintstone
FredFlintstone's picture

When Hillary becomes President, Bill can be in charge of the Department of Student Debt Discharge. There would be a mattress in the back room.

Tue, 05/13/2014 - 13:52 | 4755696 thamnosma
thamnosma's picture

I wonder how many taking on this student loan debt are aware that it is non-dischargable?   It may qualify under full disability, so expect more of those claims.

Tue, 05/13/2014 - 14:21 | 4755808 corporatewhore
corporatewhore's picture

As I stated before that is under the current law and laws can and will be changed.

In order to get the economy moving for the student loan debt burdened nation you either have to forgive the debt, discharge the debt, or reduce the payment burden.  The most politically palatable solution is to lower the payments.  Right now the federal loans are capped at 10% of income.  It will need to go much lower.

If you are a bought off senator or representative (name me one who isn't) the law won't be changed until parents and students vote them out or get them to change their vote.  It will happen because the economy needs a jump start and this is one way to do it.

Tue, 05/13/2014 - 14:04 | 4755742 twh99
twh99's picture

How do they collect if it is given to a foreign student who goes home or a US student who decides to live abroad?

Tue, 05/13/2014 - 14:40 | 4755892 Son of Loki
Son of Loki's picture

Paying back a loan ... how 1990's.

Tue, 05/13/2014 - 14:45 | 4755917 Groundhog Day
Groundhog Day's picture

Thank God my first will not go to college for another 8 years.  Hopefully a new system will be put in place by then

Tue, 05/13/2014 - 15:03 | 4755982 NEOSERF
NEOSERF's picture

Expect the government to allow millenials to transfer student loans into a mortgage.   Our descent into banana-republicanism is almost complete.  Loans are the first thing taken but those without from those with.  Expect wallets and purse, storefronts next.

Tue, 05/13/2014 - 16:05 | 4756226 Stuck on Zero
Stuck on Zero's picture

You are 18 and decide you want to move to Singapore.  You borrow $300K to get a great education at a great University in the U.S.  The day you graduate you move to Singapore. 

Question:  Does the U.S. government come after you to pay back your loan?

 

 

 

Tue, 05/13/2014 - 13:16 | 4755521 nope-1004
nope-1004's picture

"If you can't afford it, finance it."

lmao

Tue, 05/13/2014 - 13:27 | 4755574 Sudden Debt
Sudden Debt's picture

If visa fails! try mastercard....

Tue, 05/13/2014 - 14:15 | 4755782 Osmium
Tue, 05/13/2014 - 13:18 | 4755530 Canadian Dirtlump
Canadian Dirtlump's picture

You just have to sit back and marvel at what the hell the world has become. Everything is a runaway mirage wrapped ina shell game, deep fried in a ponzi scheme gently nestled in a steaming pile of corruption.

 

The more this goes on as a whole, the worse it's gonna be and good lord, it's goona be breathtaking.

Tue, 05/13/2014 - 13:21 | 4755542 NoDebt
NoDebt's picture

You, sir, are in desperate need of an immediate purchase of a large block of S&P500 index shares.

Tue, 05/13/2014 - 13:34 | 4755613 Canadian Dirtlump
Canadian Dirtlump's picture

I'll sell my magic beans and get the proceeds to my brokerage account STAT.

Tue, 05/13/2014 - 13:36 | 4755625 NoDebt
NoDebt's picture

Good man.  You'll be very grateful you made this decision someday.  Trust me.  I'm an investment advisor.

Tue, 05/13/2014 - 13:23 | 4755548 fonzannoon
fonzannoon's picture

If this debt is non dischargable then why can't we package it and sell it? I mean these kids are paying like 7% on it now so we should be able to get the public like 4% after the hedge funds or whoever skimmed their piece. instead of a market ticker for the etf we can just have a live camera on an 18yr old running in a hamster wheel.

Tue, 05/13/2014 - 13:23 | 4755553 NoDebt
NoDebt's picture

The government already did.  It's call US Treasury Bonds.

Tue, 05/13/2014 - 13:25 | 4755563 fonzannoon
fonzannoon's picture

until i see an 18yr old running full speed on a hamster wheel it's not official.

Tue, 05/13/2014 - 13:32 | 4755602 NoDebt
NoDebt's picture

Ever been to McDonalds?  WalMart?

Sorry, bad examples.  Those are still mostly septuagenarians running around on those.  But when they finally drop dead from spinning the wheel, they'll load up the "Millennial Generation" and hang the debt forgiveness carrot just out of reach in front of the wheel.

Tue, 05/13/2014 - 13:42 | 4755643 Dr. Engali
Dr. Engali's picture

I go to Walmart all the time just so I can see this:

 

http://walmart-people.com/Home

Tue, 05/13/2014 - 13:29 | 4755588 Sudden Debt
Sudden Debt's picture

but the cycle bites you in the ass anyway.
try finding a job without e papers and you screwed!
and than there's the background checks.... reason enough to start your own bizz!

Tue, 05/13/2014 - 13:44 | 4755659 NotApplicable
NotApplicable's picture

7%??? Fuck, I'm paying 10%.

Unless they toss me a bone, I'll retire before I pay the damn thing off.

Tue, 05/13/2014 - 17:57 | 4756627 Peak Finance
Peak Finance's picture

SLABS - Student Loan Asset Backed Securtities

Don't know how the hell they are making payments on those securtities as the real-world non-payment / deliquency / differment rate is 30% 

Tue, 05/13/2014 - 13:32 | 4755584 Relentless101
Relentless101's picture

Haha. Let me just make a few interest calculations here. A very conservative 5% average rate on 1.111 Trillion is equal to... fuck me.

Tue, 05/13/2014 - 13:45 | 4755662 Bangin7GramRocks
Bangin7GramRocks's picture

Gubmint needs to keep the economy going somehow. It's the U.S. version of China's ghost cities.

Tue, 05/13/2014 - 13:12 | 4755499 Major Major Major
Major Major Major's picture

Hopefully they got the best education money can buy

Tue, 05/13/2014 - 13:14 | 4755512 Dr. Engali
Dr. Engali's picture

Hopefully they got the best education a life time of debt can buy

 

 

There fixed that for ya.

Tue, 05/13/2014 - 13:16 | 4755526 fonzannoon
fonzannoon's picture

I am pretty sure ham-bone referenced that the interest rate on those loans jumped bigtime to reflect the recovery that is taking place. Tyler should have thrown that in just for the halibut.

Tue, 05/13/2014 - 13:21 | 4755537 Dr. Engali
Dr. Engali's picture

Holy carp the jokes are getting bad.

Tue, 05/13/2014 - 13:26 | 4755572 fonzannoon
fonzannoon's picture

I need to stop, i feel like i am beginning to flounder.

Tue, 05/13/2014 - 13:33 | 4755607 Dr. Engali
Dr. Engali's picture

I sea what you are saying.

Tue, 05/13/2014 - 19:25 | 4756975 are we there yet
are we there yet's picture

flounder like flt mh 370?

Tue, 05/13/2014 - 13:28 | 4755580 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

Schooled (muppeted) is what a institution does to you, Education is what you do for yourself.

Tue, 05/13/2014 - 13:43 | 4755651 agstacks
agstacks's picture

"I never let schooling get in the way of my education" -Twain

Tue, 05/13/2014 - 13:17 | 4755528 NoDebt
NoDebt's picture

Why is it I see a "Starship Troopers" style future for us.  No space ships, of course (Russians won't sell us the rocket engines any more), but more like "pay your debt to earn your citizenship on a far-away battlefield."

Tue, 05/13/2014 - 13:33 | 4755555 Dr. Engali
Dr. Engali's picture

That battlefield may be a little closer to home than you think. I'm picturing brown shirts with an 'O' on their sleeve.

Tue, 05/13/2014 - 13:34 | 4755614 NoDebt
NoDebt's picture

Properly indoctrinated (as most are now), yeah, you're probably right.  I wonder how much debt forgiveness it would take to make somebody kick in their neighbor's door and start shooting.  Probably not very much.

Tue, 05/13/2014 - 14:46 | 4755918 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

"I'm picturing brown shirts with an 'O' on their sleeve."

 

Don't forget the N and W BEFORE THE O.

Tue, 05/13/2014 - 13:53 | 4755697 aardvarkk
aardvarkk's picture

I just watched "Starship Troopers for the first time in many years a couple of weeks ago.  I remember when I first saw it, I laughed at the matter-of-fact/gung-ho way the propaganda was shoved in your face.  It was obviously a satirical take on things playing on uncomfortable echoes in our media, but pretty over-the-top.  This time, after the show was done I switched over to CNN.  Not a lot of difference, except they weren't handing out bullets to the kiddies on CNN (yet).  Whoever put that show together was ahead of their time.

Tue, 05/13/2014 - 19:20 | 4756959 are we there yet
are we there yet's picture

Obama is more like a dung beetle bug than a brain bug.

Tue, 05/13/2014 - 13:18 | 4755532 Major Major Major
Major Major Major's picture

A lifetime of debt in deferment

 

FTFY 2

Tue, 05/13/2014 - 13:13 | 4755505 syntaxterror
syntaxterror's picture

Bullish!

When do these loans get bundled into a AAA-rated vehicle that I can invest in?

Tue, 05/13/2014 - 13:34 | 4755616 813kml
813kml's picture

GM Financial is busy turning your wish into reality, all they need is for institutions of higher learning to add more cup holders to secure the AAA rating.  Throw in some free coffee for students and it's a done deal.

Tue, 05/13/2014 - 13:59 | 4755718 Bunga Bunga
Bunga Bunga's picture

Something good to start for fresh graduates for their retirement. Invest in your own debt! Win-win. /sarc_off

Tue, 05/13/2014 - 13:29 | 4755507 Mercury
Mercury's picture

Thanks Uncle Sam for making college the affordablest ever!

Mission Accomplished!

What do you think the average, college administrator/student ratio is these days?

 

EZ money-----------higher prices

Connect the dots: http://chronicle.com/article/Administrator-Hiring-Drove-28-/144519/

 

Tue, 05/13/2014 - 14:00 | 4755728 FredFlintstone
FredFlintstone's picture

Ohio State has 57,000 students and 38,000 FTEs, which is about 1.5 students per employee.

Tue, 05/13/2014 - 13:14 | 4755509 Ignatius
Ignatius's picture

When/if my pension fails it's back to school for me!

Tue, 05/13/2014 - 13:18 | 4755534 NoDebt
NoDebt's picture

I get where you're coming from.  It's fun to borrow money you can use for anything and have no intention of ever paying back.

Tue, 05/13/2014 - 13:33 | 4755609 insanelysane
insanelysane's picture

Instead of collecting social security we could just enroll as full time students.

Tue, 05/13/2014 - 13:16 | 4755522 Intelligence_In...
Intelligence_Insulter's picture

The good news is that if after you graduate and your job pays below the poverty rate they can't garnish your wages.

So just aim low and you won't have to worry about paying them back.

Tue, 05/13/2014 - 13:20 | 4755536 Spungo
Spungo's picture

We should raise taxes so more people can learn gender studies.

Tue, 05/13/2014 - 13:24 | 4755557 Major Major Major
Major Major Major's picture

How did I fail women's studies? I love bitches.

Tue, 05/13/2014 - 13:26 | 4755568 Sudden Debt
Sudden Debt's picture

300 single dollar bills and a 50 for a lapdance at the local strip pclub will teach you all you need to know about the other gender.
That's how grandpa tought me at least....

Tue, 05/13/2014 - 13:55 | 4755707 FredFlintstone
FredFlintstone's picture

You had a "great" grandpa!

Tue, 05/13/2014 - 13:20 | 4755540 i_call_you_my_base
i_call_you_my_base's picture

Bullish for real estate.

Tue, 05/13/2014 - 13:23 | 4755552 FieldingMellish
FieldingMellish's picture

Hockey stickier.

Tue, 05/13/2014 - 13:24 | 4755560 Sudden Debt
Sudden Debt's picture

Starbucks and Mcdonalds await you you debt servs!

Tue, 05/13/2014 - 13:25 | 4755562 venturen
venturen's picture

smart kids...know that comrade Obama isn't going to make them pay to make every college worker rich. Read about the UCONN police chief making like $300k...or the retired UCONN professor pulling in $260k in pension gravy! 

Tue, 05/13/2014 - 13:57 | 4755713 NotApplicable
NotApplicable's picture

I know of cops who are retiring at +90% of their base salary, all because of the various overtime scams they've figured out over the years, like say... signing up for overtime, then calling in sick, then their buddy gets the overtime. Kicker? They both get overtime! People set these things up in advance, if you hadn't guessed already.

The other big scam is all these fucked up checkpoints funded by the Feds. Those are all overtime. So they've taken a 60% pension and turned it into a full-time paycheck by padding their last three years of employment.

This from a organization "protecting and serving."

Tue, 05/13/2014 - 15:48 | 4756016 Radical Marijuana
Radical Marijuana's picture

Pensions, which act like a form of insurance, tend to be underestimated regarding the degree to which they have persistently acted to dominate the direction that society took. If one looks at the CAFRs, it becomes clear that there are more than 100,000 government mandated entities, primarily for the purpose of providing pensions, which now own the vast majority of all shares of publicly traded corporations. Thus, there has developed what I call an Ouroboros of Incorporated Robbery.

Professional money managers (running in their herds, mostly following each other's tails), have fiduciary duties to retired people to control the economy, primarily because of the ways that governments have enforced entities which operate retirement pension funds, that have looped around to mostly own the economy. The people who originally made and maintained those systems still own a piece, but they no longer actually own more than the combined collective government mandated entities own together.

While the pensions for the police tend to be the single most extreme examples of the overall pension systems, they fit into the runaway paradoxes of the general pattern of social facts, which are intense!  What are young people supposed to do when they are born into a political economy system which was made by exponentially accelerating frauds, while being maintained by attitudes of deliberate ignorance towards those frauds? WHAT ARE THE REAL ROLES OF EDUCATION INSIDE SYSTEMS BASED ON FRAUD, OPERATING THROUGH ATTITUDES OF DELIBERATE IGNORANCE?

Young people are stuck inside of those systems, where success had a foundation of fraud, which used to work a hell of a lot better for the people now old, when they were younger. However, the tragic trajectory of that exponentially increasing fraud is going to strand some generation when it finally collapses into chaos. Pension funds, built on promises based on bullshit assumptions, now own the majority of the economy, and therefore, could theoretically control that economy, and, in a way they do, by struggling to keep the financial frauds going for those old people, while the young people are born into the system whose blatant insanities are becoming all too obvious.

Education is the way that the social system reproduces itself. Therefore, it makes perfectly perverse sense that there is a runaway student loan bubble, growing at an exponential rate, as one of the main ways to keep the combined pension funds floating. Since the banksters were able to recapture control over the American public "money" supply, everything that followed after that was based upon triumphant financial frauds, and therefore, pensions manifested within that context, and now student loans are manifesting within that fraud, while together they have become two of the main interacting components of the currently established systems.

The main thing that students should be taught is the thing that they will most certainly not be taught, which is to understand the deeper levels of how they were born into social systems controlled by legalized lies, backed by legalized violence, and when they were born into the spirals of development of those systems. Ironically, the areas of knowledge where they will be effectively taught to understand how real energy systems operate, so that they can participate in those processes better, shall continue to be swamped by those areas where real energy systems are deliberately not being taught to be understandable, because that would require facing the basic facts that the government has become the biggest form of organized crime, controlled by the best organized gangs of criminals. Students and pensioners are ALREADY inside of that reality, but the vast majority of them do not understand that, and have been conditioned to not want to understand that.

Therefore, the "education" systems keep on manifesting the GROWING Grand Canyon Paradoxes between those areas of knowledge based on genuinely better understanding of how general energy systems actually work, which is useful knowledge, contrasted to all of the other, more dominate domains, where systems of lies backed by violence control society, through profoundly paradoxical ways that those DO operate according to the general energy system laws, but are generally believed and taught to be as backwards as possible, because they were necessarily based on triumphant deceits and frauds. That kind of "education" is paradoxically useful knowledge for those who are going to become the replacement professional liars and immaculate hypocrities, whose jobs will be to attempt to keep those social systems of enforced frauds going. Pension funds and student loans are the two interconnected aspects of the political economy which most directly involve the most people in participating in the overall ways that the political economy is based on runaway systems of enforced frauds.

Tue, 05/13/2014 - 13:26 | 4755570 NOZZLE
NOZZLE's picture

Right now there are at least three broken down office buildings in Chicago near DePaul, John Marshall, Roooosevelt U and the Art Institute that are being renovated into student housing. Absent the spigot of SIGN RIGHT HERE IDIOT MONEY, those buildings would still be the pigeon hatcheries that they have been for decades.  

Bullish for broken down office buildings in Chitcago that should have been demolished decades ago. 

Tue, 05/13/2014 - 13:26 | 4755571 Duc888
Duc888's picture

 

 

sukkerz.

Tue, 05/13/2014 - 14:06 | 4755597 lasvegaspersona
lasvegaspersona's picture

something has to be real in the GDP numbers

Systemic collapse will be resisited by every bit of force that can be mustered. Those who benefit are not just the leaders. Every retired person, every unemployeed person, every bondholder, every government employee, every welfare recipient...you get the pic...

all will support the system and vote for those who can keep it going.

The dollar ain't going out voluntarily.

Tue, 05/13/2014 - 13:31 | 4755601 ptoemmes
ptoemmes's picture

Occupation: Professional Student

like one Zonker "Best Nine Years of My Life" Harris: http://doonesbury.washingtonpost.com/strip/cast/member/10

Tue, 05/13/2014 - 13:32 | 4755603 youngman
youngman's picture

These students think they will never have to pay them back....and they are probably right...anything for a vote...

Tue, 05/13/2014 - 13:59 | 4755719 NotApplicable
NotApplicable's picture

They'll pay all right. With a lifetime of poverty and steadily decreasing purchasing power. It's just not so obvious, thanks to the power of socialism.

Tue, 05/13/2014 - 13:33 | 4755608 homiegot
homiegot's picture

Met someone the other day that has 200k in student loans from NYU. For photography. Currently works in a coffee shop. That seems like a good ROI.

Tue, 05/13/2014 - 13:37 | 4755628 insanelysane
insanelysane's picture

Let's see 200k or buy some nice equipment for 10k and just starting taking picks and seeing what works.  If you still suck, pay 1k for webinars for Photoshop.

Tue, 05/13/2014 - 13:49 | 4755680 Seasmoke
Seasmoke's picture

U can pay me now or you can pay me later. (With a uniform, boots and weapon)

Tue, 05/13/2014 - 14:07 | 4755751 Otto Zitte
Otto Zitte's picture

They don't even get to be debt slaves to a mortgage anymore. Charts: age of these student loan borrowers; their suicide rate; their mortality rate; their ETHNICITY; their NATIONALITY.

Tue, 05/13/2014 - 14:09 | 4755758 GooseShtepping Moron
GooseShtepping Moron's picture

I'm glad I paid all of mine off, but it took about two and a half years of making ZERO discretionary purchases whatsoever. For that time I was a demand sinkhole as far as the larger economy was concerned. My life is a textbook study of the deflationary impact of deleveraging. But now I'm free and clear, and I will never take on debt again. Never.

I know it will probably never happen, but if enough Americans would band together, bite the bullet, and agree not to take on any more debt for just one year, meanwhile using all the money they can scrimp and save to retire their existing debt, we could pretty much crash the financial system. It would be ugly, though; so ugly and painful that people might start to conclude that Keynes was right after all. Any transition from a debt-based economy to a specie-backed economy must involve this intervening episode of ugliness; it is the gauntlet we must run before we can reach the new equilibrium and I don't see how it can be done with consistent, firm political vision and leadership. We would need, for instance, to put an end to Presidential term limits, but that carries an additional danger all its own.

Tue, 05/13/2014 - 14:31 | 4755846 Spungo
Spungo's picture

The education bubble will be fixed when students start killing themselves. Starbucks will write a letter to the president stating concern that this suicide trend makes it harder to retain employees.

Tue, 05/13/2014 - 14:42 | 4755900 22winmag
22winmag's picture

It started a while ago, and it's a touchy subject.

 

A decade ago it was the credit card trap prompting suicides among students, now it's student loans.

Tue, 05/13/2014 - 14:38 | 4755878 Drifter
Drifter's picture

1 trillion govt subsidy to academia.

These loans wouldn't have been made without govt guarantees, guarantees are only to banks of course, and taxpayers get stuck with the writeoffs (losses).

Just another way of govt giving "stimulus" to favored sectors of the economy at taxpayer expense.

And what are the favored sectors of the economy?   The lazy non-productive do-nothing sectors, banking, academia, and welfare of course.  

Bottom line, any sector supporting the status quo oligharchy running America. 

Yes, we're at the oligharchy point now.  Elections merely give the appearance of democracy.  Candidates are selected by the oligharchy, winners selected by the oligharchy.

"It doesn't matter who votes, just who counts the votes."  --- Stalin

"Give me control of a nation's money and I care not who makes the laws."  --- Rothschild

Tue, 05/13/2014 - 16:58 | 4756414 conspicio
conspicio's picture

"1 trillion govt subsidy to academia."

Indeed, they are not student loans, they are merely a mechanism for the leftist academia to entrench and secure moar power. The student is merely a mechanism of wealth transfer and a fellow traveller to mold in their own image as good little apparatchiks...

Tue, 05/13/2014 - 14:56 | 4755962 Billy Sol Estes
Billy Sol Estes's picture

11% of all Student Loan Debt holders are either delinquent or bankrupt?

Jesus....

Tue, 05/13/2014 - 15:00 | 4755974 ncdirtdigger
ncdirtdigger's picture

Get a degree in plumbology, HVACology, or drywallogy and be set for life.

Tue, 05/13/2014 - 15:15 | 4756022 Billy Sol Estes
Billy Sol Estes's picture

In Texas, HVAC's are sitting on their fat sweaty rears. I know one who is told to go him every day because there isn't any work.

Least he can draw a paycheck for his two children out of wedlock and pay the lease on his crew F-150 that he has driven over the agreed limit.

His world will come crashing down very soon...very soon.

Tue, 05/13/2014 - 15:20 | 4756033 magnetosphere
magnetosphere's picture

is this because homebuilding is not happening?

Tue, 05/13/2014 - 15:09 | 4756003 NOTaREALmerican
NOTaREALmerican's picture

The 1800's railroad bubbles were real-estate scams the student-lending bubble is a real-estate scam.  

The management of the university systems are doing very well, as are the bucolic college towns.

Perhaps, it's all real-estate scams?

Tue, 05/13/2014 - 15:18 | 4756027 yogibear
yogibear's picture

More reason to leave the US. Pile up the debt and purchase assets outside the US and then leave.

Tue, 05/13/2014 - 15:22 | 4756042 combatsnoopy
combatsnoopy's picture

In India the state sponsors education.  But also in India, there's no stupid affirmative action and the students' parents actually discipline them to study so it's actually worth it.

Tue, 05/13/2014 - 19:12 | 4756928 are we there yet
are we there yet's picture

And they speak better english in India, than US affirmative action students.

Tue, 05/13/2014 - 15:18 | 4756028 yogibear
yogibear's picture

n

Tue, 05/13/2014 - 15:18 | 4756029 yogibear
yogibear's picture

n

Tue, 05/13/2014 - 15:21 | 4756038 combatsnoopy
combatsnoopy's picture

And the stupid UC system is going to fix that by putting beaners and other affirmative action trophies before talent in admission at their schools.  I was going to take classes- their FA is beaner boomer idiot.  I'm about to pull my hair out.  

Tue, 05/13/2014 - 15:26 | 4756060 jal
jal's picture

If a student dies from natural causes, who pays the loan?

If a student dies from an accident, who pays the loan?

If a student dies from an act of war, who pays the loan?

If a student's slave wages cannot pay the loan who pays the loan?

WHO GETS ALL THE LOAN PAYMENTS?!!!!!!

Tue, 05/13/2014 - 18:33 | 4756777 Grouchy Marx
Grouchy Marx's picture

Must be a trick question. Loans don't need to be paid back anymore. 

Tue, 05/13/2014 - 17:13 | 4756465 A Cruel Accountant
A Cruel Accountant's picture

College is FREE$$$ now.

http://www.mooc-list.com/

Tue, 05/13/2014 - 19:11 | 4756922 are we there yet
are we there yet's picture

Politicians are turning students into financial broken windows as a way to pump fake fiat debt into the system while enslaving the next generation.

Tue, 05/13/2014 - 23:06 | 4757694 AdvancingTime
AdvancingTime's picture

A student loan is designed to help students pay for university tuition, books, and living expenses. It seems that many students are borrowing against their future at an almost unimaginable pace, unfortunately the money is often used for things other then education.

Too many young people and others taking student loans "living expenses" go on to include cars, trips, vacations and more. All this has a very dark side that will effect the lives of these borrowers going forward and has the potential to grow to crisis dimensions in the future.More on how students are borrowing against their futures in the article below.

http://brucewilds.blogspot.com/2012/04/students-borrowing-against-future...

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