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Bernanke Just Assured That The Student Loan Bubble Will Be The Next "Financial Stability Issue"

Tyler Durden's picture


"At this juncture . . . the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained" - Ben Bernanke, March 28, 2007

"I don’t think student loans are a financial stability issue to the same extent that, say, mortgage debt was in the last crisis because most of it is held not by financial institutions but by the federal government" - Ben Bernanke, August 7, 2012


Please mark your calendars accordingly as yesterday the Chairman just guaranteed that student loans will be cause for the next "financial stability issue."

Here are the facts, courtesy of a just released expose on the WSJ:

  • Rising college costs and a sagging economy are taking the biggest toll on a surprising group: upper-middle-income families.
  • According to a Wall Street Journal analysis of recently released Federal Reserve data, households with annual incomes of $94,535 to $205,335 saw the biggest jump in the percentage with student-loan debt from 2007 to 2010, the latest figures available. That group also saw a sharp climb in the amount of debt owed on average.
  • Ms. Hofmeister, an insurance broker and financial planner, says she and her husband, an operations manager, combined earn a six-figure income that puts them in the upper-middle class and were surprised by the amount they will have to borrow. She says she feels trapped in financial purgatory, between "people with lower incomes who have a lot of subsidy, and the truly affluent, for whom this isn't a problem."
  • The Journal's analysis defined upper-middle-income households as those with annual incomes between the 80th and 95th percentiles of all households nationwide. Among this group, 25.6% had student-loan debt in 2010, up from 19.5% in 2007. For all households, the portion with student loan debt rose to 19.1% in 2010 from 15.2% in 2007.
  • The amount borrowed by upper-middle-income families, meanwhile, has soared. They owed an average of $32,869 in college loans in 2010, up from $26,639 in 2007, after adjusting for inflation, according to the Journal's analysis.
  • The typical low-income family receives grants and scholarships totaling 36% of the cost, the lender says, while for higher-income families such packages total 21%.
  • More than three million households now owe at least $50,000 in student loans, up from about 794,000 in 2001 and fewer than 300,000 in 1989, after adjusting for inflation.
  • Some families are turning to loans because they spent heavily or used extra cash to save for retirement. More than one-third of parents with incomes of $95,000 to $125,000 with a child who entered college in 2011 didn't save or invest for that child's education, according to a survey by education consultants Human Capital Research.
  • With their finances strained, some higher-earning parents are making their children pick up more of the tab. Among families earning $100,000 or more, students paid 23% of their college costs in 2012 through loans, income and savings, according to Sallie Mae, up from 14% in 2009; the share covered by parents fell to 52% from 61%.

And last but not least, those ever-altruistic baby boomers:

"The boomers are the first generation shifting the cost of college to their kids," both through increased student borrowing and reduced taxpayer support for higher education, says Susan Dynarski, a professor of education and public policy at the University of Michigan.

Because leaving them with $16 trillion in public debt is not enough.

* * *

Here is the issue in a nutshell: college tuition, just like government spending, is off the charts. Both are so high, that on an unlevered basis, the payback rate is N/M. Note the use of the world "unlevered" as it is one which will never occur, before the next systemic reset, when talking about anything involving the government. And what leverage does is mask true supply and demand. If college tuition was representative of real supply and demand, prices would be tumbling on average. Instead the easy access to student debt makes college seem quite affordable at any price point and thus there is no pressure to lower the equilibrium price. Which explains this chart, where the government-funded student debt surge is merely there to fill the needs of all those kids going to college, all of whom will never be able to pay it off especially as America increasingly transitions to a part-time worker society.

But at least they too, like their parents and grandparents, are indentured debt servants, just like the government wants.

And to the perpetually wrong Bernanke, the thinking is that if more people are on the same wavelength as the US Treasury, i.e., so deeply in debt that everyone will be begging for a dollar devaluation and/or debt hyperinflation, then the Fed will be not only able, but encouraged to debase the US currency at will.

Sadly, Bernanke is and always has been wrong, and when the student loan bubble does pop, and it will, the cost will once again fall squarely on the shoulders of that one nearly extinct species: America's middle class, which not only generates positive cash flow, but, gasp, saves a little money here and there.

Make no mistake: they are squarely in Bernanke's bulls eye, and are slated for extermination at all costs. In a world in which everyone is broke and defecting from every game theory equilibrium possible, those who still play by the rules are the system's mortal enemies.

In the meantime, we can't wait for Obama's next brilliant contraption: cash for flunkers.


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Wed, 08/08/2012 - 22:08 | 2689736 vmromk
vmromk's picture

This motherfucking piece of shit Bernanke needs to be put out of his misery, before every single one of us is put out of ours.

Wed, 08/08/2012 - 22:28 | 2689796 old naughty
old naughty's picture

" this juncture..."

Really, he realizes what is happening now?

Thu, 08/09/2012 - 00:00 | 2690033 Surly Bear
Surly Bear's picture

Short of action by Congress, exactly how is the debt going to pop because, as most know, the debt cannot be discharged in bankruptcy court. If people are still getting collection calls for Hollywood Video bills that they may or may not owe, what the fuck do you think the government is going to do? Forgive the debt? Unlikely. 

Thu, 08/09/2012 - 01:28 | 2690137 LMAOLORI
LMAOLORI's picture



You make an excellent point Surly Bear they are garnishing social security for student loans right now and according to the WSJ the Republican's won't back a bankruptcy bill for student loans because of the debt thought obama does want that changed (VOTES and rather then going after the banker's of course his plan will then affect only investors (pension funds, etc). 


Federal Government Goes After Social Security Checks to Pay Student Loans


Obama Administration Backs Bankruptcy Option for Some Student Debt



Thu, 08/09/2012 - 02:40 | 2690184 CharlieSDT
CharlieSDT's picture

Sarah Lawrence College costs $59,170 per year.


What the fuck? Sarah Lawrence College? $59,170? What for? I don’t hear much about alumni from Sarah Lawrence College going on to make a bunch of money as CEO of GE or some other criminal organization like Goldman Sachs. No, Sarah Lawrence is just another one of many of America’s snooty overpriced liberal arts colleges mainly composed of girls (73% of the school is female) who think they’re sensitive and gifted and special and smart and major in Women’s Studies, Victorian Literature, Environmental Policy or some other equally useless bullshit.

Thu, 08/09/2012 - 02:54 | 2690189 Popo
Popo's picture

Make no mistake:  Geithner and Bernanke plan on forgiving student loan debt.  They have (perhaps correctly) determined that the public is actually willing to swallow debt forgiveness for students -- but not home owners.    The reason he isn't worried about student debt is that in his mind the solution is already baked in.   Of course -- this will lead to even higher education costs down the road.  But the Fed has never had a long term horizon for "solutions".   Forgiving student debt will buy them 10 years.  That's all he cares about.  

Thu, 08/09/2012 - 06:15 | 2690283 SheepRevolution
SheepRevolution's picture

Banksters forgiving debt? Earth calling to Popo...

Thu, 08/09/2012 - 04:23 | 2690242 HungrySeagull
HungrySeagull's picture

Then we have truly crossed over into the realm of beyond the event horizon.

First off I will open with both barrels and say:


"Who the fuck do you think you are you babbling imbecile?"

Second off.

I/we carry some debt and I think we are fortunate to have had a bank take care of the debt instead of Uncle Sam for once. The damn debt will still be around when we both get old enough for Social secuity. The silver lining (LIterally) is that it will be paid off by then.

I still have a house we can use to sell and make all of this go away. We will become debt free and thus useless to a Government intent on enslaving with Debt. (They have already done so very much at the levels I found truly disgusting; bordering on Generational Theft and Plunder unknown previously in History.)

Yesterday must be marked as the day Ben opened his big mouth and showed the Nation the true ignorance of the shadow cast far and wide by this Debt that cannot be dischaged by anything short of death.

This bubble will BREAK when Universities are exposed for the profit centers they are and Mills designed to enroll and enslave students. I was watching several students of different kinds walk down past the libary. They are so in debt just to be there (Something like 10K a year now) for a education they will find useless as ten thousand students have taken this and found that employers don't need or want that crappy degree)


I don't know why we bitch and groan so hard about this college experience when our very educational system from the Public Schools all the way up has shown themselves to be useless, brain washing and turning students into compliant lumps of programmed beings that need input.


I am number 5, I need input.


We are well and truly fucked, shanghai'ed into a ship going god knows where.


Tue, 08/14/2012 - 00:01 | 2702993 Enslavethechild...
EnslavethechildrenforBen's picture

It's either going to be Slavery, or it's going to be Revolution. One or the other will come to pass.  We all need to come together and decide how this thing is going to go down. As for me, it's give me Revolution or give me Death. I will gladly die before I let some Banker type enslave me. 

Wed, 08/15/2012 - 00:11 | 2705894 MeelionDollerBogus
MeelionDollerBogus's picture

+1 for short-circuit reference

Thu, 08/09/2012 - 09:04 | 2690567 sessinpo
sessinpo's picture

"they are garnishing social security for student loans right now"


The only problem with this logic is that SS is essentially broke, putting out more money then it receives.

Tue, 08/14/2012 - 23:57 | 2705868 MeelionDollerBogus
MeelionDollerBogus's picture

Debt that can't be paid can't keep growing. The supply dries up so all choice is removed - you just can't squeeze that stone into a negative-volume space hoping a few more drops will come out. There's no blood left for the vampires and they need a torrent, not a puddle or a few drops.

Thu, 08/09/2012 - 00:32 | 2690083 Born-Again Bankster
Born-Again Bankster's picture

Only a matter of time before they introduce ticker symbol, MBA...the 3x inverse ETF on student loan bundles...Put options anyone?  Giggity. 

Wed, 08/08/2012 - 23:02 | 2689876 vast-dom
vast-dom's picture

the slope is fucking steep - makes subprime look a hell of a lot safer.

Thu, 08/09/2012 - 07:08 | 2690326 Mareka
Mareka's picture

Senators Corker & Hagan are apparently still trying to sneak through the Covered Bond Act, S1835 that would allow rolling student loans, auto loans & credit card debt, among other things, into marketable securities. 

With the assist of Bob Corker, lapdog stooge of the banking industry, more piles of bad debt could soon be off loaded into pension funds everywhere.

It failed to pass at the end of last year.  The FDIC was opposed.

The NAR and Mortgage Bankers association are still promoting it.

Read the full text here...

Thu, 08/09/2012 - 07:38 | 2690366 LongSoupLine
LongSoupLine's picture


Wed, 08/08/2012 - 23:04 | 2689887 chipworley
chipworley's picture

BB is an academic tool with no experience for his position what-so-ever....

Thu, 08/09/2012 - 03:13 | 2690197 Popo
Popo's picture

Before becoming Master of the Universe, Bernanke served as a Fed governor for 2 years and before that he taught college.   Think about that for a minute:  A teacher with 2 years of non-teaching experience was handed the job of running the world economy.  There's only ever one reason you give a totally inexperienced person an awesome amount of responsibility:   You do that when you want a puppet who will blindly believe without asking questions.   Bernanke also suffers from personal vanity.  It was evident right away in his appearance, his endless photo shoots and in his accidental blabbing to Maria Bartiromo.  

Personal vanity + inexperience is exactly what the banking sector wanted.   And they got their man:  An obedient little automaton who is easily convinced of his own prowess despite endless evidence supporting the opposite.  

History will be brutal to the little man.  

He will of course blame the coming collapse on external events related to the collapse (War, social unrest, political instability, etc.) but everyone is already aware that his efforts to prop up the economy do little more than prop up the institutions and systems responsible for it's collapse. This is the powerful feedback cycle which accelerates America's make-over into a banana republic:  Banks create systemic instability, and Bernanke stabilizes the banks.  Lather, rinse, repeat.





Thu, 08/09/2012 - 04:24 | 2690243 HungrySeagull
HungrySeagull's picture


Give me that job and I will get this fucking mess fixed. Without so much talk.

Thu, 08/09/2012 - 05:54 | 2690278 tocointhephrase
tocointhephrase's picture

Without talk how the hell do you expect to move the market?

Tue, 08/14/2012 - 00:11 | 2703005 Enslavethechild...
EnslavethechildrenforBen's picture

"The Market" is no lesser of an Evil than Bernanke himself. For one entity to gain wealth, another entity has to lose wealth. The little old ladies and working stiffs are not the ones that are benefiting from this game, they are the ones who are being preyed upon. Wealth doesn't come from a printing press or from thin air, it comes from theft, cons and scams like "The Market".

Tue, 08/14/2012 - 23:55 | 2705864 MeelionDollerBogus
MeelionDollerBogus's picture

Consent and calculation are what make the difference.

In a market that is actively attacking corruption only mistakes or a few bad bets will lead to a loss that is another's gain. In equilibrium we can all gain by trading a loss of a specific nature to another who can reduce that loss using their own skills that no one else has. That is the purpose of markets, to produce and perform skills for which we are best suited that others are not. That's precisely the same thing as shifting potential loss to another for whom no loss will occur.

If you were suddenly stuck with a bunch of busted up cars you couldn't fix that you intended to flip you'd probably be very unhappy. Unless you're a mechanic looking for parts and flipping the fixed up vehicles and keeping the best one - in which case you'd probably be very happy but very busy.

Such is the same with any market. The key is CONSENT. Absurd nonsense trades which clearly leave you stuck with something NO one needs or wants shouldn't happen and without intervention by a money-printing fraudster... it WON'T happen systemically.

Once consent is restored and centralization is gone you have only yourself to blame for foolish choices and they won't be systemic - they'll be yours.

Thu, 08/09/2012 - 04:33 | 2690245 jeff montanye
jeff montanye's picture

p.s. anyone else recently arrived at a pinnacle position with little experience and great personal vanity?

things that make you go hmmm?  (hillary might actually have been better; not much but some)

Thu, 08/09/2012 - 06:49 | 2690312 SokPOTUS
SokPOTUS's picture

The worst part is; it's 5 1/2 years later, and he still has the job.  How is that possible?

Thu, 08/09/2012 - 06:59 | 2690319 Mentaliusanything
Mentaliusanything's picture

Word........ Ben has no tools ...he is a tool

Thu, 08/09/2012 - 08:58 | 2690558 oleander garch
oleander garch's picture

Professor Bernanke is correct to point out that in the last bubble the housing debt was in the hands of the private sector and then had to moved onto the books of the taxpayer.  With student loans, we have eliminated the cost of moving the debt from the private sector to the public sector since it is there already.  Technological breakthroughy.

Wed, 08/08/2012 - 22:07 | 2689738 Blagio
Blagio's picture

Who listens to the Bernank anymore? We have T Durden.

Wed, 08/08/2012 - 22:17 | 2689766 r00t61
r00t61's picture

Heli Ben is extremely useful as a contra-indicator.

Wed, 08/08/2012 - 22:19 | 2689739 Dr. Engali
Dr. Engali's picture

This system needs a reset in the worst way. The longer they continue to drag this out the more violent the reset will be.

Wed, 08/08/2012 - 23:00 | 2689868 THX 1178
THX 1178's picture

Yeah, but the longer it is drawn out, the more silver will be consumed for industrial purposes (in a supply deficit environment). So the longer it takes to crash the more valuable silver will be.

Wed, 08/08/2012 - 23:25 | 2689957 Prometheus418
Prometheus418's picture

Problem with that is where the event horizon is.

I had a lot of physical silver- not enugh to be a major player, but far more than the average bear.  Note the past tense.

I have not in any way lost my conviction that silver is a good long-term investment, and to be sure, I still hold some for that eventual payoff.  The problem is that I'm a working stiff with three young children- it doesn't matter what I think silver might do, it has been dribbling out, albeit slowly, to cover food, gas and clothing expenses. If the crash does not occur in the next year or so, all I'm going to have is stories about the silver I used to have.

And that's the real problem, isn't it?  If you had enough to weather the storm, silver is a good play- but if you never had much to begin with, silver is just a rental.  If things stretch out too far, all a silver/gold standard after a reset is going to do is protect the oligarchs while the rest of us burn alive.

I'm not saying that silver is a bad play, just extending a word of caution- a great deal of what my household experiencing now is due to the voracious appetite and fast growth of children, but the way things are headed, even double-income-no-kid households are going to be rolling quaters for gas money soon enough.  Hard to hold the shiny stuff when it's a choice between liquidation or starvation.

Wed, 08/08/2012 - 23:29 | 2689963 LetThemEatRand
LetThemEatRand's picture

The .01% do not have this problem.  By design, you do.

Thu, 08/09/2012 - 00:06 | 2690044 Monedas
Monedas's picture

The upper 1/10th of 1 % .... the uber rich Socialist cronies like Soros and Buffet .... honest working Capitalists need not apply !

Thu, 08/09/2012 - 02:29 | 2690176 Barry Freed
Barry Freed's picture

Mussolini didn't have that problem either until one day he was hanging from a lamp post.

Wed, 08/08/2012 - 23:48 | 2690009 hannah
hannah's picture

Prometheus418 you just proved my favorite saying...'buy gold today so you can be poorer tomorrow!'...thanks

Thu, 08/09/2012 - 02:18 | 2690172 THX 1178
THX 1178's picture

We're not all in your situation dude. 

"Hard to hold the shiny stuff when it's a choice between liquidation or starvation."

Buy food before the crash then and store it. Solved it for you.

Tue, 08/14/2012 - 23:49 | 2705850 MeelionDollerBogus
MeelionDollerBogus's picture

Food that you can carry and other food you can store and protect. You may need to hunker down. You may need to run. You should prepare for both.

Thu, 08/09/2012 - 02:42 | 2690187 A Nanny Moose
A Nanny Moose's picture

The parasite can never live without consent of its host.

Thu, 08/09/2012 - 06:35 | 2690300 Disenchanted
Disenchanted's picture



To learn who rules over you, simply learn who you are not allowed to criticise.
— Voltaire

Tue, 08/14/2012 - 23:48 | 2705848 MeelionDollerBogus
MeelionDollerBogus's picture

Not one parasite ever got consent from its host and it needs only a small population to keep itself alive in clusters using hosts as reservoirs.

Thu, 08/09/2012 - 07:57 | 2690388 BotMightFly
BotMightFly's picture

  Given the food growing problem and its coupling to oil fertilizers, then add Monsanto's pay per crop and it looks like having seed, land and backup food is a great currency.

Thu, 08/09/2012 - 09:15 | 2690585 sessinpo
sessinpo's picture

"silver is just a rental."

"On a long enough timeline the survival rate for everyone drops to zero"


So what isn't a rental?


But I digress. Deflation has been my argument for sometime. Thus declining values in PMs was/expected. I've actually stated moderately rising values, but that is over a period of time - 5 years or so. After the 1929 crash, PMs fell. People needed cash to pay for things, not PMs. PMs are still good insurance and will continue to hold value relative to everything else, except cash (at least for a while).

Tue, 08/14/2012 - 23:47 | 2705846 MeelionDollerBogus
MeelionDollerBogus's picture

Except by then most of the electronic needs of silver will be replaced by graphene. Perhaps some of the chemical needs too. Graphene is carbon which is nowhere near shortage.

Wed, 08/08/2012 - 22:08 | 2689743 CaptFufflePants
CaptFufflePants's picture

Hitler has nothing on the American Baby Boomer generation.

Wed, 08/08/2012 - 22:31 | 2689811 old naughty
old naughty's picture

Really? Is this why Nostramadus spelled his name HIS-ler?

Thu, 08/09/2012 - 09:19 | 2690627 sessinpo
sessinpo's picture

Or maybe he mispelled His ler and he meant He's lier.

Wed, 08/08/2012 - 22:12 | 2689745 q99x2
q99x2's picture

UCLA here I come. Be sure to pay you back once I get to Costa Rica.

Wed, 08/08/2012 - 22:13 | 2689757 dick cheneys ghost
dick cheneys ghost's picture

Got my education for free at 'University of ZeroHedge'

Wed, 08/08/2012 - 22:53 | 2689855 slewie the pi-rat
slewie the pi-rat's picture

drinks4tyler, BiCheZ!

Wed, 08/08/2012 - 22:13 | 2689758 boogerbently
boogerbently's picture

I'm tellin' ya, let's just forgive EVERYONES debts.....

Mortgage, student loans....sovereign debt.

It's all just 1's and 0's, anyways....

Wed, 08/08/2012 - 22:17 | 2689767 Thomas Jefferson
Thomas Jefferson's picture

Noble idea but a far fetched pipe dream.  The game is debt and the only ones taking it on are the governments and the 18 year old kids who are trapped between a rock and a hard place.  I have 3 degrees.  Trust me.  I learned the hard way what a piece of paper is worth.

Wed, 08/08/2012 - 22:28 | 2689798 HoofHearted
HoofHearted's picture

TJ, I've got five of them and teach at university. I harangue my students every semester that a piece of paper only collects dust. They need to get an education, and the piece of paper will come along with it. I also try to convince them to pay as little as possible and play hardball with the scholarships office. Needless to say, the scholarships office HATES me.

(I did math, so never paid for any of the degrees. More kids need to do math. Don't pay for college or grad assured of employment when you get out.)

Wed, 08/08/2012 - 22:28 | 2689799 r00t61
r00t61's picture

Debt forgiveness is a short-term fix; like fixing a broken window by closing the drapes.

One person's debt is also another person's asset.  Mortgage debt, credit card debt, auto loan debt, student debt - some of these assets are held by public and private pensions, among others.  Would you still support total debt forgiveness if it also meant Mom's pension got completely wiped out?

Besides, debt forgiveness does nothing to solve the underlying problems - fractional reserve lending, central banking, paper money, legal tender laws, leverage, regulatory capture - and is also moral hazard on an even greater scale.


Thu, 08/09/2012 - 00:55 | 2690111 LMAOLORI
LMAOLORI's picture


"One person's debt is also another person's asset.  Mortgage debt, credit card debt, auto loan debt, student debt - some of these assets are held by public and private pensions, among others.  Would you still support total debt forgiveness if it also meant Mom's pension got completely wiped out?"

Thumbs Up a voice of reason!


I see obama want's to allow investors to get screwed (though I'm positive he wouldn't mind pushing off all the govt. loans onto the taxpayers for votes but that won't wash) and of course he doesn't want to punish his banker backers who wrote Sub Prime student loans and off loaded them into pension funds, 401's, etc....


Obama Administration Backs Bankruptcy Option for Some Student Debt


The Obama administration urged Congress to make it easier for people to discharge a portion of certain student debt by filing for bankruptcy protection.

The recommendation, in a report by the Education Department and the Consumer Financial Protection Bureau, wouldn't affect the vast majority of student debt, which is issued by the federal government. It would apply only to the roughly $150 billion, or 15% of total outstanding student debt, issued by private lenders such as SLM Corp.'s Sallie Mae and Wells Fargo & Co.

Consumer bureau chief Richard Cordray said Congress should consider modifying a 2005 law that, except in rare circumstances, prohibits discharging private student loans through bankruptcy.

"It would be prudent to consider whether they wish to modify the code in light of the impact on young borrowers in challenging labor-market conditions," Mr. Cordray said. He added that the law doesn't appear to have met its objectives of bringing down borrowing costs and expanding access to private loans.

Expanding the concept to federal loans would be politically controversial given that it would likely result in taxpayer losses, and Republicans have expressed reservations.

in full


Private Student Loans Work Like Subprime Mortgages


Private lenders offered student loans without confirming that recipients could pay them back -- then sold them to investors, thus protecting the lenders against defaults, a government study finds.


Thu, 08/09/2012 - 06:29 | 2690294 Catullus
Catullus's picture

That's fine.  But the equity holders and the bondholders of the banks are first in line for the haircut. 

Mon, 08/13/2012 - 22:20 | 2702847 MeelionDollerBogus
MeelionDollerBogus's picture

repeated, regular debt-jubilee, not a one-off event, will actually remove moral hazard. It won't fight currency fraud from central bankers, however. Leverage & fractional reserve are fine if they are consenting. If society consents to be financially suicidal as long as it's a real free choice, not a hostage situation like today, so be it.

Wed, 08/08/2012 - 22:33 | 2689817 Long-John-Silver
Long-John-Silver's picture

Why stop at forgiving everyone's debt's? What about those of us that are debt free? Lets just forgive debt and give everyone $5 million dollars so everyone can retire (SARC).

Thu, 08/09/2012 - 03:00 | 2690192 Sabibaby
Sabibaby's picture

You're hired! 

Obama was only going to give us wellfare handouts but you're going to give us each 5 million dollars!


Thu, 08/09/2012 - 04:43 | 2690252 Oleander
Oleander's picture

I want a pony too.

Mon, 08/13/2012 - 22:18 | 2702841 MeelionDollerBogus
MeelionDollerBogus's picture

Vote Vermin Supreme for a free pony!


Thu, 08/09/2012 - 04:26 | 2690244 HungrySeagull
HungrySeagull's picture

That is called "Jubilee."


It is good to clean out the driftwood and gunk that piles up around the clogged pipe of society unable to live on what little they have, earn and pay.

Wed, 08/08/2012 - 22:15 | 2689763 Thomas Jefferson
Thomas Jefferson's picture

Totally unsustainable.  That which can't be sustained won't be.  Bankers can't get homeowners to borrow anymore.  No more juice left in that apple so they are preying on the most vulnerable.  Want a job?  Get a degree.  Want a degree?  Come on and borrow 40k a year for art appreciation 101, scuba 101, and communist indoctrination 101. 

Thu, 08/09/2012 - 01:02 | 2690118 LMAOLORI
LMAOLORI's picture



I think people who actually pay taxes are pretty vulnerable especially what's left of the middle class here's something else that is unsustainable


Social Security disability insurance puts US on path to financial ruin, says group


Analysis: Real stimulus spending is at least $2.5 trillion since 2008

Wed, 08/08/2012 - 22:18 | 2689768 Dr. Engali
Dr. Engali's picture

You would think the American public would have learned their lesson by now about debt.

Wed, 08/08/2012 - 22:22 | 2689781 r00t61
r00t61's picture

"The public is exactly what it is for what it doesn't know and doesn't want to know."

That applies to pretty much every "public" out there; not just the American one.

Wed, 08/08/2012 - 22:39 | 2689834 old naughty
old naughty's picture

Public? Are we talking about caulkers, flunkers, foodstamp-ers, or muppets?

Good, cash for all.

And let's collect from standard chartered...

Wed, 08/08/2012 - 22:23 | 2689783 otto skorzeny
otto skorzeny's picture

seriously? the American public?

Wed, 08/08/2012 - 23:02 | 2689875 Totentänzerlied
Totentänzerlied's picture

Not when, thanks to credit, every muppet with a pulse can live like a prince. Greater concern for the near-term future than beyond it is, this is all that is needed to ensure the success - amount of debt created - of a credit system.

Take one look at this country and tell me where there is, or has been in the last 100 years, any long-term planning being done by the muppets or the state or industry. Your view may be slightly obscured by $75 TRILLION DOLLARS OF UNFUNDED LIABILITIES.

Societies never learn until it is far too late. Rome was around for nearly a thousand years, did the Romans ever learn?

Mon, 08/13/2012 - 22:07 | 2702819 MeelionDollerBogus
MeelionDollerBogus's picture

Amazing, isn't it? Grant the slaves a year to 3 years to dance in the King's clothes so they agree, willingly to a life of slavery until death after. If kings 1000 years ago had thunk it they'd have done it knowing how well it works.

Wed, 08/08/2012 - 22:20 | 2689771 reader2010
reader2010's picture

Bullshit. The annual spending on "peace" is more than $1 Trillion and it's a non-issue. 

Wed, 08/08/2012 - 22:22 | 2689776 otto skorzeny
otto skorzeny's picture

class warfare-let's get this party started. also- how do I make $ off of this?(God-I'm starting to think like a Rothschild)

Wed, 08/08/2012 - 22:30 | 2689807 HoofHearted
HoofHearted's picture

I thought the same thing. After shorting the hell out of REITs or MBS, what would Kyle Bass do?

Short Sallie Mae and every student loan CDO you can find? Do they have CDSs on tranches of student loans? Help us somebody. There's fiat to be made so that we can get us some PMs.

Thu, 08/09/2012 - 01:42 | 2690149 you enjoy myself
you enjoy myself's picture

dear god that's a perfect basis for an acronym - WWKBD?  an all-encompassing synonym for fiscal sanity.

Wed, 08/08/2012 - 22:23 | 2689782 Neethgie
Neethgie's picture

I dont even understand why education is so fucking expensive, it is absolutely beyond me (i havent been to uni yet, had a "gap yah" or three) i really fail to grasp why the best tutors ect, dont just upload the course details online and do youtube seminars lectures and shit, all for a hell of a lot cheaper.


but then i guess thats the thing, if you go to harvard you dont learn anything more than someone reading the exact same thing in alabama, you just meet those people where the great american dream of nepotism and cronyism can take place.

Wed, 08/08/2012 - 22:26 | 2689790 DeFeralCat
DeFeralCat's picture

I disagree. At Harvard you learn how to legally rob people so you can lawyer up and enjoy your summer in the Hamptons.

Wed, 08/08/2012 - 22:27 | 2689795 otto skorzeny
otto skorzeny's picture

follow the $. alot of this debt is wracked up by "for profit schools"- many financed by GS, MS, JPM, because the  LOAN IS BACKED BY UNCLE SAM and cannot be forgiven in bankruptcy. plus all the profs pull in like $200K and EVERYBODY has to build huge athletic centers/stadiums for the bread/circus BS.

Wed, 08/08/2012 - 22:35 | 2689824 HoofHearted
HoofHearted's picture

The profs aren't pulling in 200K per year. Try this shit out:

Not a single damn university has its FULL PROFS making a mean of $200k per year. The people making the money are the administrators. Look at a table of university president salaries. Let me do it for you:

Notice these people are in the millions. So, tell your kid to become a uni president if he can't win all the gold medals at the Olympics or act as well as Gary Busey.

Wed, 08/08/2012 - 23:10 | 2689912 reader2010
reader2010's picture

Indoctrination is education.

Thu, 08/09/2012 - 00:59 | 2690115 Xanthias
Xanthias's picture

Another trend in academia is the casualization of the faculty: using part-timers often with no benefits, or else constantly firing and replacing junior faculty.  This is the rule at some of the famous schools mentioned here.  I'm always amazed at the amnesia of tenured professors and administrators, who forget where they came from, and who can regard their junior colleagues as so much disposable livestock.

Thu, 08/09/2012 - 09:30 | 2690695 sessinpo
sessinpo's picture

You can't take numbers like that and make a fair comparison. Different professors have different schedules. For example:

Some people complain that public school teachers (k-12) have it great. They get a nice salary with benefits and work 9-10 months out of the year as opposed to a private citizen that works basically 12 months out of the year excluding their vacation time.

Well, some university professors don't have such a demanding schedule either. But I realize you can't generalize and put them all in the same boat. Many professors are doing academic research, etc. But I can also say from personal experience of professors working 5 hours a day (and I'm not just talking about classroom lecture time), plus having summer off, and making a very cozy 5 figure salary while having an assistant doing a lot of the menial work such as grading. It may be only 5 figures, but when compared to the work actually done, it gets bumped into a nice 6 figure lifestyle.

Wed, 08/08/2012 - 22:34 | 2689823 Thomas Jefferson
Thomas Jefferson's picture

The rise of the apprenticeship.  In 10 years when my son is college age I will teach him everything I know for free.



Thu, 08/09/2012 - 06:55 | 2690316 ToNYC
ToNYC's picture

Well, that's what you think. They'll likely have no interest unless they can't get away from the farm.

Thu, 08/09/2012 - 09:35 | 2690711 sessinpo
sessinpo's picture

"I will teach him everything I know for free."


Actually, every good parent tries that. The unfortunate part is when the little bastard tells you this won't take long.

Thu, 08/09/2012 - 00:08 | 2690049 Prometheus418
Prometheus418's picture


I got a lot of my engineering training here free:

They're upgrading to a new system here:

Here's the problem, though.  MIT is happy to provide you with free education if you can engage the coursework, but without that sheepskin, getting your foot in the door is an uphill battle.  It used to be that autodidacts were prized in American society, but the University PR campaign has become incredibly strong after decades of insinuating that learning can only occur on a campus.

Fair warning to anyone going this route- it's possible to get past the degree wall with a lot of work, but you will take a beating on the way.  I started with a tool-and-die apprenticeship, spent a year taking a double classload of math and syllogistic logic core credits in a standard university, and then moved over to the MIT OCW program for the rest of my training.  While I was able to pay off my student loans quickly, it took eight years to get promoted to engineering the first time, and an additional three years to do it when I took my current job.  Even with six years with the offical title under my belt, making a move would still be difficult at best.  

That being said, there is a lot of satisfaction to be had from showing up others who paid for a degree, and have only a limited overview of the field.  One of the very tangible fringe benefits from always restarting at the bottom of the dog-pile is that you really get to know the products and processes you are designing in a way that a classroom environment really can't replicate.  And when the move is made, it's generally the case that there is about a one-year prove-up period where the pay sucks, but after demonstrating competence, it usually moves to on par with or above those with the offical degree.  If you can do what you claim to be able to, the rest falls into place.

I hate to generalize, but I've seen it a lot- that degree gives people a lot of confidence that is often unjustified.  We just got rid of an intern who graduated and prompty proved he was entirely unable to do the job- he got the paper, sure enough, but it didn't make him a good engineer.  The major problem was that he apparently felt that the paper conferred competance, and further learning was unnecessary- when confronted with problems he didn't understand, he would just flatly state that he never studied that, and then let the project sit unattended without asking any questions or attempting to discover a solution.  It's more common than you might think, unfortunately.

Wed, 08/08/2012 - 22:25 | 2689786 Crimedog
Crimedog's picture

Yeah, that chart does look bad, and the student loan debt bubble probably will pop.  But look at the y-axis - that's only $500 billion dollars.  The mortgage market, including all related derivatives, was TRILLIONS of dollars.  No comparison.  I think that's what the Bernank is referring to.  Yes, it will be bad, but, as much as ZH would like you to believe, it is NOT a financial stability issue like the '08 crisis.


ZH is just the boy who cried wolf at this point.

Wed, 08/08/2012 - 22:29 | 2689801 Neethgie
Neethgie's picture

i noted the numbers and thought the same, although its still pretty terrible when you think about it...

as the bernanke says "trillion here trillion there"

Wed, 08/08/2012 - 22:31 | 2689812 Crimedog
Crimedog's picture

I agree - it's not good.  But in today's world of QEs, Twist, ZIRP, etc., this is not material in the sense of tanking our economy.

Thu, 08/09/2012 - 10:05 | 2690864 Dumpster Fire
Dumpster Fire's picture

Nah it's irrelevant to Uncle Sugah.

But to the parent trying to get a kid through college, 500% inflation is pretty real.  To a fresh faced unemployed graduate stuck with 50K in loans and no way to ever get out from under them, it's real enough as well.

I would agree that no one put a gun to anyone's head (yet) but distorting a market that has all but been declared an absolute necessity for success today affects more than just whether the debt is 16 or 17 trillion.

Mon, 08/13/2012 - 09:29 | 2700607 MeelionDollerBogus
MeelionDollerBogus's picture

No gun?

"Get a degree or we won't hire you"

Degree acquired ...

"... tricked you, we're only hiring in India"

Looks like a gun to me. No hire = no income = no food

hence the EBT, more loans, which now students 2nd time round will use for rent and food and will try to find a way to evade them forever. I bet some will flat out leave the country.

Wed, 08/08/2012 - 22:29 | 2689802 otto skorzeny
otto skorzeny's picture

Bernank-is that you? shouldn't you be at your nightly human sacrifice thingy?

Wed, 08/08/2012 - 22:36 | 2689829 AGuy
AGuy's picture

"Bernank-is that you? shouldn't you be at your nightly human sacrifice thingy?"

He already is. That's the whole reason for his statement in the first place, much like investors got sacraficed by Bernanke with his "Subprime is contained" statement.


Wed, 08/08/2012 - 22:30 | 2689808 Thomas Jefferson
Thomas Jefferson's picture

The student loan debt is nondischargeable through bankruptcy.  The ultimate form of slavery.  Pay too much for a home?  Walk away.  Pay too much for college?  How about some garnished wages.  Cant pay child support?  Goto jail.  Indentured servants made up a large portion of George Washingtons army.  How histroy repeats itself.

Wed, 08/08/2012 - 23:10 | 2689909 ArsoN
ArsoN's picture

You really don't want mass numbers of (especially) males in their 20s feeling duped like that.  Horrible for social cohesion and stability (substance obuse, crime, violence).  Plus now with social media, things could get organized...    

Mon, 08/13/2012 - 09:27 | 2700600 MeelionDollerBogus
MeelionDollerBogus's picture

It's exactly what they want. They think they can hold out a solution without causing a revolution. Odds are not good.

Wed, 08/08/2012 - 23:02 | 2689880 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

You do not believe in equality? Women are not capable of crying wolf in your world. Do you also find those of different color lacking in ability as well?

Wed, 08/08/2012 - 23:08 | 2689907 Tyler Durden
Tyler Durden's picture

You do realize that the mortgage market has collateral behind it, right? And that of the $12 or so trillion in mortgages the houses this debt collateralizes are (supposedly) worth roughly the same (and much more if one listens to the NAR).

Here's the math on the TARP: Kashkari assumed 5% impairments on a total of $14 trillion in mortgages (resi and commercial). 5% of 14 trillion in $700 billion. TARP was $700 billion.

You also do realize that the asset collateralizing student debt is.... uhm... er.... nothing. (technically the "asset" behind student loans is the diploma on your wall. What is the going rate for 10 grams of paper these days anyway).

That's right: with mortgages you get recovery. It may be high, it may be low (as in foreclosures and REOs), but you get some recovery.

With student debt you get garnishment in case of default. Now what do you garnish from a broke individual, who has no job, who has no cash flows, who has no assets?

And now for some extra difficulty - if TARP is $700 billion and the max loss on ASSETLESS student loans is $500 billion (and rising faster than exponentially), please explain to everyone here just how student loans whose maximum loss will be the same as the TARP plug in about 6 months, is not in the same ballpark.

This is not a trick question.

Prove to us now what that expensive education was truly worth.


PS. when we wrote the post we did not get into all these details because we assumed readers were sophisticated enough to grasp semi-elementary finance. Once again we are proven wrong.

Wed, 08/08/2012 - 23:27 | 2689962 knukles
knukles's picture

Well said, Tyler.

And mighty kindly too, as a matter of fact.
There are frustrating times when one (speaking for myself) defaults to the more pointed "Do your own fucking research." but alas, such serves no functional utility of carrying the message to those who still suffer, of leading by example.

Wed, 08/08/2012 - 23:33 | 2689974 Hulk
Hulk's picture

Dear Tyler,

Many thanks for the education !!!

I had a conversation today with a finance manager who took me through his interest rate swaps

A conversation I would have been absolutely lost in pre zh

Unfucking believable!!!


Wed, 08/08/2012 - 23:35 | 2689979 LetThemEatRand
LetThemEatRand's picture

This is why they excepted student loans from bankruptcy protection years ago.  A home may have residual value, but the mortgagee can walk away and the bank is left with whatever the market will bear.  Not so with the student debtor.  He/she owes the entire amount.  Forever.

Wed, 08/08/2012 - 23:40 | 2689989 Crimedog
Crimedog's picture

Why would you say the diploma, which we all know is worthless, is the asset?  We all know the actual asset is the person who can go on to earn income to pay back the debt.  I realize the job market is bad, and you made that point in the post.  There will be people who will be unable to pay back their debts.  But to assume that EVERYONE who currently has student debt will not be able to pay back that debt is crazy.  There are still plenty of smart kids coming out of college with debt who are getting full-time jobs.


Don't you also need to apply an impairment against that $500 billion?  There will be a percentage of students actually paying back this debt.  I completely disagree with you that there will be no recovery on this $500 billion.


Do you have a breakout of this student debt to show how much is from college and how much is from graduate school, where the average debt is higher but the likelihood of repayment is higher as well?  This may provide some additional context around the possible recovery rates.  

Thu, 08/09/2012 - 00:25 | 2690073 Dr. Engali
Dr. Engali's picture

Are you paying attention to current events at all? There are no jobs for these kids to service the debt .The majority of these kids basically have a lifetime mortgage around their neck coming out of college. They can't find jobs and the interest rates on the loans are rising. These kids with worthless degrees will not have the ability to be consumers ,much less buy a house, because everything they make in a part time world will go to service their loans. And if they don't pay it willingly the bankers will get them through garnishment.
There will come a point where these loans will stop performing and the banks will have "assets" on their books again that they have marked to fantasy when in actuality they are worth a fraction of that. Of course the banks will have these "assets " levered up 20 to 1 and we all know where that gets us.

Thu, 08/09/2012 - 00:56 | 2690112 Sabibaby
Sabibaby's picture

Marking a degree to market!

Thu, 08/09/2012 - 02:35 | 2690180 cynicalskeptic
cynicalskeptic's picture

 You can always sell yourself (and your children) into indentured servitude, serfdom or outright slavery..... I suspect THAT is the intended 'end game'.  The wealthy 0.01% will have ALL the world's assets and capital - while the rest of the 99.99% serve their lords and masters.  


Thu, 08/09/2012 - 07:53 | 2690381 Canoe Driver
Canoe Driver's picture

Tyler is stating that $500 billion is the write down.  The actual size of aggregate student loan debt has now exceeded $1 trillion.

Mon, 08/13/2012 - 09:24 | 2700594 MeelionDollerBogus
MeelionDollerBogus's picture

what % do you think will not pay? It's MANDATORY. Can't be removed or forgiven by bankruptcy.

I think you need to check your premises. Those people come to the door armed with machine guns.

Wed, 08/08/2012 - 23:48 | 2690007 Crimedog
Crimedog's picture

And I realize that the Tyler is smarter at finance that I am - that's why I come here basically every day.  I love the amount of information that flows from this site.  But I'm not going to just throw effusive praise at every post like every other commenter on this site and just assume that it is the absolute truth.  How about some disagreement?  The statement that the student debt is ASSETLESS is an opinion, not fact.

Thu, 08/09/2012 - 00:41 | 2690095 StychoKiller
StychoKiller's picture

Hmm, fine -- repossess their brainz!  Check yer premises.

Thu, 08/09/2012 - 00:53 | 2690110 Sabibaby
Sabibaby's picture

It's worth what someone will pay for it. Choose wisely!


Thu, 08/09/2012 - 01:55 | 2690159 eaglefalcon
eaglefalcon's picture

Government cares less about owning assets, it just wants to own everybody's ass

Mon, 08/13/2012 - 09:22 | 2700587 MeelionDollerBogus
MeelionDollerBogus's picture

Wasn't there a challenge to show the asset? I don't see it.

Thu, 08/09/2012 - 01:24 | 2690123 vast-dom
vast-dom's picture

tyler: you forgot to add that a multi-degreed individual generally can't fix anything in a house. but maybe after they are decimated by the collecting agencies they will...fill out food stamps forms much more efficiently and that is almost akin to something resembling a real asset like a severely corrected depreciate home.

and there are some very fancy frames with glare free glass out there housing all that 10 gram paper.

Thu, 08/09/2012 - 01:35 | 2690143 dapper_dan
dapper_dan's picture

Tyler Dude - you'd be better off in the long run not dissing your readers.  People try.  Be generous.  The tone on these boards is already shitty enough without you taking it on too.  Not every reader around here worked on Wall St. or took finance in college, much less even went to college.  I wince when I read the rancor on these boards and was mighty disappointed on your digs too.  Let people learn over time without the insults.  Wish everyone here would lighten up a bit.  

Thu, 08/09/2012 - 02:22 | 2690174 Lednbrass
Lednbrass's picture

On a site with Fight Club as the underlying theme I think this should be expected. If somebody is going to call out Tyler and step into the ring, a few lumps are likely to follow. There are some sharp people from all walks of life in the crowd here, but not many want to scrap with a Tyler unless they have some very serious kung fu. It does show some balls though.

There is a reason this site wasn't founded as Mr.Tyler's Neighborhood and the tremendous latitude in speech is allowed. Some of the best lessons one can learn are often painful.

As far as newer folks go- Rule #8 of Fight Club: If it is your first night, you HAVE to fight. There are some here that will deliberately go after a poster they haven't seen before for only that reason, just to see how they deal with it.

Thu, 08/09/2012 - 05:09 | 2690264 r00t61
r00t61's picture

Guy's registered for 4 weeks and is already running around, telling people in what manner to behave and communicate from the anonymity of his computer.

I'm surprised he didn't throw a "it's for the children!" in there.

Thu, 08/09/2012 - 10:13 | 2690896 Glass Steagall
Glass Steagall's picture

Is that your blood?

Some of it, yeah.

Thu, 08/09/2012 - 10:36 | 2691013 dapper_dan
dapper_dan's picture

Didn't know we were getting in the ring with eachother.  Thought maybe the Fight Club was for the Establishment, TBTF banks and government.  Thanks for clueing me in that it ACTUALLY means beating the shit out of each other (verbally at leas).  To feel better about ourselves, and know our *movement* against the status quo has really advanced...  great, that'll work.... i'm sure...

Mon, 08/13/2012 - 09:20 | 2700582 MeelionDollerBogus
MeelionDollerBogus's picture

no, I approve of the bitch slap.

Blondie, you're too FUCKING BLOND.

Get off the fucking porch.

Wed, 08/08/2012 - 22:25 | 2689789 Paul Atreides
Paul Atreides's picture

More groundhog day...

Wed, 08/08/2012 - 22:25 | 2689791 buzzsaw99
buzzsaw99's picture

You have to look at it from the bernank's point of view. Human misery means nothing to him. As long as the bankers and billionaires get profits guaranteed by the fed gub there is no problem whatsoever.

Wed, 08/08/2012 - 23:43 | 2689993 rufusbird
rufusbird's picture

your comment is deep. The twist is "As long as the bankers get the profits..." puts him in the position of the suicide bomber who is holding his finger on the detonator button of a bomb that as soon as he lets got it blows up everything around him.

Wed, 08/08/2012 - 22:31 | 2689809 AUD
AUD's picture

Bernanke might be perpetually wrong but his credit is still considered 'money good', not just by most US citizens but by the rest of the world.

The student loan bubble may yet rise beyond all reasonable bounds, then double.

Wed, 08/08/2012 - 22:40 | 2689831 john_connor
john_connor's picture

Wife and I have law, engineering, and MBA degrees from Big Ten universities between the two of us. Guess what? WE DON'T OWE A FUCKING DIME.

I almost feel bad for these people with 100k plus student loan debt staring directly into a depression. Of course I don't. People must be held accountable for the decisions they make, including but not limited to taking out loans for worthless fucking degrees.

Wed, 08/08/2012 - 22:58 | 2689862 Neethgie
Neethgie's picture

did you get an mba in missing the fucking point? did you get a degree from a big ten university of ignorance?


because whilst i am glad for you, it IS your concern, given that its your tax dollars that back this debt, ergo someone else's "worthless fucking degree" is being backed by YOUR money, the article is not stating "PLZ FEEEL SOZ 4 MI" its saying america is supporting 500bn of debt thats likely to go delinquent with its citizens tax dollars, two degree's and you failed to garner that...

Wed, 08/08/2012 - 23:06 | 2689897 john_connor
john_connor's picture

Hey Moron,

I own gold, rental properties, and my income is diversified enough to survive. Not to mention I actually have a tax optimization strategy.

If taxes become punitive, which they are not, YET, then I will simply work less.

So fuck you.

Wed, 08/08/2012 - 23:08 | 2689905 otto skorzeny
otto skorzeny's picture

u r a massive douche

Wed, 08/08/2012 - 23:10 | 2689911 john_connor
john_connor's picture


Wed, 08/08/2012 - 23:13 | 2689922 otto skorzeny
otto skorzeny's picture

so you've got a spiffy Volvo SUV with a "Douchebag University" sticker in the back window-like people give a shit where you used to date-rape drunk co-eds at your homo-frat parties?

Wed, 08/08/2012 - 23:18 | 2689939 john_connor
john_connor's picture

Nope, see below. I'm not a Volvo fan as they are really not good cars.

Wed, 08/08/2012 - 23:29 | 2689965 Ineverslice
Ineverslice's picture

Zombie kill of the week?... Yessir!

Now go fetch me some Twinkies, MBA meat.

Wed, 08/08/2012 - 23:16 | 2689934 Neethgie
Neethgie's picture

do you not see how mismatched your original statement is to the one you just posted?

it does affect you too which you seem to have acknowledged, which is what you failed to get in the first place...

Wed, 08/08/2012 - 23:23 | 2689952 john_connor
john_connor's picture

I am prepared for taxes and/or an increase in the money supply, ie inflation. Both of which will occur as a result of an over indebted government that is absorbing bad loans.

So I completely get it, while you on the other hand can't even understand my post.

Mon, 08/13/2012 - 09:15 | 2700568 MeelionDollerBogus
MeelionDollerBogus's picture

You'll get it alright.

One day the IRS will roll up and see what you have and take it all. If you say it's not legal they'll shoot.

You hold your head too proud for one so easily robbed.

Thu, 08/09/2012 - 04:35 | 2690249 HungrySeagull
HungrySeagull's picture

Working less is a good stragety.

Less wages, less taxation and as long you are self reliant, the IRS will become just another Minor Annoyance once a year.

Sometimes we make good money during a year and simply stop. It may be weeks or months but we will close the year with a specific number in a certain range and know that the taxes will be paid, but the refund will be a little more than break even.


At the moment we have not stopped. We are trying to do something that have not been done before. Building reserves across several necessary and needful things so that if something bad happens, we would not suffer too much.

I eyed a grill today. Cast Iron and properly cast in a foundry and assembled very well. I may go ahead and buy the damn thing. Why? I can use it to help feed the neighbors as long they bring the meats. I am no cook, but beginning to think in ways I never thought of before to make us useful so that we are not targets.


Mon, 08/13/2012 - 09:14 | 2700563 MeelionDollerBogus
MeelionDollerBogus's picture

Hey fucknut, you definitely missed the point. You are paying more than you owe because you're paying into an expanding bubble using tax-dollars that you can be jailed for not paying.

You won't "work less"

What you don't pay will be taken by force.

You really, really, really don't get it. They won't ask for less. They'll see what you have and invent new taxes. "wealth tax" "luxury tax" "windfall profits tax".


The name of the game is rule-changing on the fly & shooting people who don't like it.

Wed, 08/08/2012 - 23:04 | 2689884 Rusty Diggins
Rusty Diggins's picture

Arrr, I know a fellow pirate when i smell one, fuck ye i gots mine!

Wed, 08/08/2012 - 23:10 | 2689910 chipworley
chipworley's picture


Wed, 08/08/2012 - 23:13 | 2689921 Floordawg
Floordawg's picture

Theres a satisfying solace knowing that certain people are surely going to be ZOMBIE TREAT'S when the SHTF. And the best part is, they always think exactly the contrary.

Wed, 08/08/2012 - 23:15 | 2689923 reader2010
reader2010's picture

i got myself with a phd from one of top five ivy places "for free." my ignorance has cost me dearly. guess what? i learned more here on zh than all my "educational" years combined. 

Wed, 08/08/2012 - 23:31 | 2689970 john_connor
john_connor's picture

No doubt. I have been reading this site for years and love it.

Thu, 08/09/2012 - 10:05 | 2690862 Oldrepublic
Oldrepublic's picture

Recently met a guy who was getting a doctorate in Physics from Yale. Accepted official version of 9-11!!!

Wed, 08/08/2012 - 23:22 | 2689953 Totentänzerlied
Totentänzerlied's picture

Apparently that only applies to the debtor, genius? In a legitimate credit system, the creditor takes risk too, including risk of counterparty bankruptcy. There is no risk in student loans beyond risk of premature death. Congratulations on your fancy degrees which seem to have conferred upon you nothing more than a feeling of a right to deride others on the internet while gloating about yourself. Seems that's all any degrees are good for these days.

Thu, 08/09/2012 - 00:23 | 2690076 azengrcat
azengrcat's picture

Slow your roll Big Ten... Should have spent your FRNs getting educated in the PAC-12, burning some humbolt, and getting in on some tech startups.

Mon, 08/13/2012 - 09:09 | 2700550 MeelionDollerBogus
MeelionDollerBogus's picture

Government and banks and schools should be held accountable for pushing loans on people they know can't repay them. No one is told that student debt is special, that you can't remove it using bankruptcy.

People are lied to about what is the nature of money and debt and academia.

This is no better than selling arsenic as tylenol then blaming the kids for being too dumb not to eat arsenic.

It's fraud.

Wed, 08/08/2012 - 22:41 | 2689835 Tsar Pointless
Tsar Pointless's picture

"Wait a minute. This thing is still on? I thought I asked somebody to turn this mic off already." Chairman Ben

I know. This is a pointless comment. But I do live in a pointless country, so there.

Wed, 08/08/2012 - 22:50 | 2689853 kito
kito's picture

You are right bernanke, not to the SAME extent, but rather wayyyyyy beyond it................

Wed, 08/08/2012 - 23:02 | 2689854 Floordawg
Floordawg's picture

Past central planner verbal diarrhea...

Bernanke, Jan 2008 - "The Federal Reserve is not currently forecasting a recession."

Paulson, April 2007 - "I don't see (subprime mortgage market troubles) imposing a serious problem. I think it's going to be largely contained."

Geithner, - April 2012 "(US credit rating downgrade) no risk of that."

and my all time favorite muppet slayer, Cramer - March 2008 "don't be silly, Bear Stearns is fine."


Wed, 08/08/2012 - 23:07 | 2689901 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

It is unfair and racist to use the actual words that government lackeys have spoken in the past. Especially if these words contradict or are in conflict with the words they are currently using. Barrack Obama hates people like you.

Wed, 08/08/2012 - 23:13 | 2689924 chipworley
chipworley's picture


Wed, 08/08/2012 - 23:05 | 2689889 ArsoN
ArsoN's picture

In addition to this years college class, the big wave of kids that ran to law school in '09 just got out in May.  Most probably have 6 month payment differment.  The shit should start hitting the fan by December. 

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