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The Fraud At The Heart Of Student Lending Exposed - The One Sentence Everyone Should Read

Tyler Durden's picture


A key reason why a preponderance of the population is fascinated with the student loan market is that as USA Today reported in a landmark piece last year, it is now bigger than ever the credit card market. And as the monthly consumer debt update from the Fed reminds us, the primary source of funding is none other than the US government. To many, this market has become the biggest credit bubble in America. Why do we make a big deal out of this? Because as Bloomberg reported last night, we now have prima facie evidence that the student loan market is not only an epic bubble, but it is also the next subprime! To wit: "Vince Sampson, president, Education Finance Council, said during a panel at the IMN ABS East Conference in Miami Monday that lenders are no longer pushing loans to people who can’t afford them." Re-read the last sentence as many times as necessary for it to sink in. Yes: just like before lenders were "pushing loans to people who can't afford them" which became the reason for the subprime bubble which has since spread to prime, but was missing the actual confirmation from authorities of just this action, this time around we have actual confirmation that student loans are being actually peddled to people who can not afford them. And with the government a primary source of lending, we will be lucky if tears is all this ends in.

More bullets from Bloomberg:

  • Vince Sampson, president, Education Finance Council, said during a panel at the IMN ABS East Conference in Miami Monday that lenders are no longer pushing loans to people who can’t afford them.
  • The bubble in the sector is over
  • Noted political dynamic of education funding
  • U.S. is currently 16th in the world in degree attainment
  • He notes the U.S. education secretary and U.S. president have probably looked at that number
  • Nevertheless state universities are struggling because state governments are poorer: Sampson
  • Says a sustained effort is underway at some schools to bring in out-of-state tuition, which typically pay 100% of the cost
  • Barbara Lambotte, a senior credit officer at Moody’s said during the panel that student loan lenders are chasing the same potential borrowers
  • Everybody is going after borrowers with co-signers and high FICOs, also students who may be going to the better schools: Lambotte
  • Gary Santo, a MD at First Marblehead said during the panel that borrowers too are being more conservative in theirchoice of education funding
  • Lambotte said Moody’s outlook on private student loan ABSmarket is negative, but newer loans should perform better

To be sure, when the implications of the $850+ billion student loan bubble blowing up spread through the financial markets, it will make subprime seem like a tame walk in the park.

Of course, nobody will care about it until it is too late. Just like every other time because this time is never different.


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Tue, 10/18/2011 - 09:46 | 1784805 SheepDog-One
SheepDog-One's picture

Sure student loans is a racket, you're dealing with bankers! Maybe a good lesson for the little brilliant darlings without a scholarship to learn early on right out of the gate.

Tue, 10/18/2011 - 09:57 | 1784843 Nascent_Variable
Nascent_Variable's picture

We're looking at a generation of unemployed youth with the added stress of 5 to 6 figure debt incurred to pay for a worthless education.

Remind me again, what recently happened in Arab countries that were full of unemployed, desperate youths?

Tue, 10/18/2011 - 10:05 | 1784878 Pladizow
Pladizow's picture

NIA's college conspiracy movie:

Close to 2.5 million views!

Tue, 10/18/2011 - 10:19 | 1784942 malikai
malikai's picture

I'm confused. How does this bubble actually pop when default is impossible? Can anyone actually explain how this bubble popping would play out?

Tue, 10/18/2011 - 10:26 | 1784972 shortus cynicus
shortus cynicus's picture

Default is always possible.

But discharging of debt by default not. At least not now yet.

Tue, 10/18/2011 - 10:34 | 1785018 Thulsa Doom
Thulsa Doom's picture

The government will forgive the debt if they "volunteer" for military service in WWIII. Usury, bitchez!

Tue, 10/18/2011 - 10:50 | 1785112 Cynical Sidney
Cynical Sidney's picture

why are students not allowed to default on such loans? why do our federal government provide guarantees on these loans while private companies capture all the profits? this kind of legislation does not help the students but rather enslaves them. not to mention such legislation creates conditions of fraudulent conveyance and conflict of interest, therefore it cannot and should not be constitutional; it's more reasons to hang banksters.

Tue, 10/18/2011 - 11:19 | 1785251 Ahmeexnal
Ahmeexnal's picture

Is anyone pointing a gun to your head forcing you to accept a student loan?

You know FRNs are worthless pieces of paper that pass for money. Why then do you assign value to a worthless piece of paper that passes for knowledge?

Are you one of the 99% brainwashed who believe that such a piece of paper is your key to success?

Steve Jobs gave the education system the finger.  Everyone should follow such example.


Tue, 10/18/2011 - 11:28 | 1785360 topcallingtroll
topcallingtroll's picture

Bill Gates of Microsoft is also a college dropout.

Tue, 10/18/2011 - 12:56 | 1785751 AldousHuxley
AldousHuxley's picture

Bill Gates, Warren Buffett, Donald Trump, Koch Brothers like many who proclaim to have earned their millions were born into upper class.

"There are three ways to make money. You can inherit it. You can marry it. You can steal it."

William Henry Gates III made his best decision on October 28, 1955, the night he was born. He chose J.W. Maxwell as his great-grandfather. Maxwell founded Seattle's National City Bank in 1906. His son, James Willard Maxwell was also a banker and established a million-dollar trust fund for William (Bill) Henry Gates III.

In some of the later lessons, you will be encouraged to take entrepreneurial risks. You may find it comforting to remember that at any time you can fall back on a trust fund worth many millions of 1998 dollars.


William Henry Gates, Jr. and Mary Maxwell were among Seattle's social and financial elite. Bill Gates, Jr. was a prominent corporate lawyer while Mary Maxwell was a board member of First Interstate Bank and Pacific Northwest Bell. She was also on the national board of United Way, along with John Opel, the chief executive officer of IBM who approved the inclusion of MS/DOS with the original IBM PC.

Remind your parents not to send you to public school. Bill Gates went to Lakeside, Seattle's most exclusive prep school where tuition in 1967 was $5,000 (Harvard tuition that year was $1760). Typical classmates included the McCaw brothers, who sold the cellular phone licenses they obtained from the U.S. Government to AT&T for $11.5 billion in 1994. When the kids there wanted to use a computer, they got their moms to hold a rummage sale and raise $3,000 to buy time on a DEC PDP-10, the same machine used by computer science researchers at Stanford and MIT.


Recall that in the 1980s we venerated Donald Trump and studied his "art of the deal". If Donald Trump had taken the millions he inherited from his father and put it all into mutual funds, you'd never have had to suffer through one of his books. But he'd be just about as rich today.


In 1942, Warren Buffett's father was elected to the first of four terms in the United States Congress, and move his family to Washington D.C. Giving money to politician's kids is one way to circumvent bribery rules. Where and how do you think Buffett raised money to start his investment???


For everyone else, college is the only way to even become middle class wage slave these days. And it doesn't even guarantee your retirement either.

Tue, 10/18/2011 - 11:39 | 1785432 topcallingtroll
topcallingtroll's picture

Bill Gates of Microsoft is also a college dropout.

Tue, 10/18/2011 - 13:39 | 1785918 AldousHuxley
AldousHuxley's picture

real smart people stay in college forever and get in the payroll. See "Student Worker" making $520,000 / year for churning out grads who can't even get jobs.

Name     Position     Department     Salary     Year
Dennis B Erickson     Head Coach Football     Ica Administration     $1,275,000     2008
Herbert J Sendek     Head Coach Men's Basketba     Ica Administration     $900,000     2008
Shay Marie Masterson     Student Worker V     Res Life Rha     $520,000     2008
Michael M Crow     President     Office Of The President     $475,000     2008
George Henry Poste     Dir AZ BioDesign Institut     Biodesign Institute     $456,825     2008
Robert Mittelstaedt     Dean     W. P. Carey School of Business     $456,502     2008
Charli Turner     Head Coach Women's Basket     Ica Administration     $400,000     2008
Elizabeth D Capaldi     Exec V Pres & Provost     Office/Exec Vp/Provost Of Univ     $385,000     2008
Jane Catherine Christie     Student Worker V     Res Life Rha     $353,600     2008
Robert Greenes     Chair (FSC)     Biomedical Informatics     $330,000     2008
Jeffrey Coles     Chair (FSC)     WPC Finance     $326,482     2008
Lisa Lee Love     V Pres University Athleti     Ica Administration     $325,306     2008
Sethuraman Panchanathan     Director, F (FSC)     School Computing & Informatics     $321,515     2008
Carol N Campbell     Exec V Pres & Chief Finan     Exec Vp Business And Finance     $320,882     2008
Richard H Stanley     Sr V Pres & University Pl     Srvp & University Planner     $313,857     2008
Jonathan Fink     Dir Global Inst Sustainab     Institute Of Sustainability     $310,500     2008
Subhash Mahajan     Director, F (FSC)     School Of Materials     $301,790     2008
James Arvid Ohlson     Professor     WPC Accountancy     $301,001     2008
Deirdre Ruth Meldrum     Dean     Fulton School of Engineering     $300,000     2008
Alejandro M Manelli     Professor     WPC Economics     $294,999     2008
Richard D Rogerson     Professor     WPC Economics     $294,724     2008
Patrick T Murphy     Head Coach Baseball     Ica Administration     $294,218     2008
David A Young     Senior VP for Academic Af     Office/Exec Vp/Provost Of Univ     $294,000     2008
Michael Tracy     Dir Strategic Planning     Biodesign Institute     $291,601     2008
Edward C Prescott     Regents Professor     WPC Economics     $283,244     2008
Patricia Denise White     Dean     College of Law     $282,000     2008
Anthony Bown Sanders     Professor     WPC Finance     $273,000     2008
Crocker H Liu     Professor     WPC Finance     $273,000     2008
Gerald Villanueva Bohulano     Student Worker V     Res Life Rha     $270,400     2008
Christopher Matthew Gast     Student Worker V     Res Life Rha     $270,400     2008
Hayley Roxanne Umphrey     Student Worker V     Res Life Rha     $270,400     2008
Vikram K Nanda     Professor     WPC Finance     $268,022     2008
Christine A Wilkinson     Sr V Pres & Secretary of     Senior Vice President     $261,695     2008
George Hynd     Dean     Fulton College of Education     $260,000     2008
Robert E Hoskisson     Professor     WPC Management     $259,434     2008
Robert John Kauffman     Professor     WPC Information Systems     $256,366     2008
Dennis L Hoffman     Assoc Dean     WPC Seidman Research Inst     $252,424     2008
Luc E Anselin     Dir, FA (FSC)     Geography     $252,000     2008
Philip Roger Regier     Exec Dean     W. P. Carey School of Business     $251,640     2008
James A Rund     V Pres Univ Student Initi     Univ Student Initiatives     $250,502     2008
Vincent Kerry Smith     Professor     WPC Economics     $246,809     2008
Mernoy E Harrison     V Pres & Exec V Provost     VP/Exec Vice Provost DPC     $245,080     2008
Sunil Wahal     Professor     WPC Finance     $242,026     2008
Robert Eugene Page Jr     Dir School of Life Scinc     Sols Administration & Faculty     $241,662     2008
Ajay Shreekrishna Vinze     Professor     WPC Information Systems     $240,224     2008
Quentin Duane Wheeler     V Pres/Dean College Lib A     College Of Lib Arts & Sciences     $240,000     2008
Charles W Christian     Dir Sch of Accountancy (F     WPC Accountancy     $240,000     2008
Kip Vernon Hodges     Dir, FA (FSC)     School Of Earth & Space Explor     $237,500     2008

Tue, 10/18/2011 - 11:41 | 1785438 ElvisDog
ElvisDog's picture

Because everyone from your elementary school teacher to Obama drills into students' and parents' heads that the only way to succeed is to go to college and it's your obligation to "do whatever it takes" to pay for juniors 5-8 years at college. That meme is accepted as the gospel truth by I would estimate 98% of all students and parents in the U.S.

Tue, 10/18/2011 - 12:37 | 1785671 AldousHuxley
AldousHuxley's picture

they forgot to add in one detail:

"go to a good college and major in practical studies"


if you major in bull shit studies at southern mississippi columbia college, what did you expect? well ok, you can still run for political office.


It is time to get rid of bottom 50% of colleges who let idiots dilute the value of college degree.

Tue, 10/18/2011 - 13:17 | 1785834 Silver Bully
Silver Bully's picture

'Is anyone pointing a gun to your head forcing you to accept a student loan?'

No, but this is the only debt where someone points a gun at your head if you don't pay. ALL of the debt, plus the interest, is paid with the barrel of a gun at your head. Why is that remotely significant? Think about other 'lifetime' debt you can acrue. Bad mortgage? Bad business? Bad marriage (with no kids, in a no fault state)? Lose billions in your hedge fund? Lose $500+ million in solar panel subsidies? Forget to take back a library book? No problem. You can settle for pennies on the dollar, or walk away.

Default on a student loan? Major problem.

If a person defaults on their loans, their paycheck is garnished 15%, and their tax returns are taken until the loan (with interest) is 100% discharged. If any money is STILL not paid for by the time you retire, YOUR SOCIAL SECURITY BENEFITS ARE GARNISHED. What bad mortgage does this? What failed marriage does this? Even filing for bankruptcy doesn't ruin your life like this. Our 'wiser' parents always assumed we would have perpetual growth (and jobs) to pay for this debt. Now the piper is coming due for such arrogance, but it isn't the parents paying the majority of the price (unless they co-signed) . . . it is their children.

The rules WILL be changed before long . . . or else there will be bloodshed over this. Celente is right. People who have lost everything, lose it.

Tue, 10/18/2011 - 13:42 | 1785937 AldousHuxley
AldousHuxley's picture

people have lost more than everything. recent grads don't even get unemployment and interest rates are 7%!


It is the baby boomer generation working as college admins ripping off the next generation while selling the dream. College admins are the real state snakeoil salesmen. They need to be reined in as well as banksters making profit off of no-risk loan products and quasi-government fucktards at Sallie Mae.


they are in debt for life!

Tue, 10/18/2011 - 12:45 | 1785710 Spirit Of Truth
Spirit Of Truth's picture

The banksters are schooling future generations.  Let's hope the youngters turn around and school banksters.

Tue, 10/18/2011 - 13:11 | 1785814 AldousHuxley
AldousHuxley's picture

See Occupy Wall Street.


Maybe they are naive young hippies, but hippies with $50k college loans made by banksters who knows government will bail them out for bad loans. At least allow them to declare bankruptcy and stick the loss on the banks, not some kids.


You let illegal aliens walk away from $500k house after living in it for couple years with $20/hour cash income, but baby boomers want to blame and punish college kids for $50k student loan? What a selfish old fucks we have in this country. Also the college presidents and admins (not professors) are one of the most overpaid paperpushers.


Sallie Mae (SLM) is the next Fannie /Freddie disaster.


Highest earners at private colleges (in millions, not including college presidents) not to include near tenured nature of the position:

1 Pete Carroll, head football coach, USC $4.4 2 David Silvers, clinical professor, dermatology, Columbia $4.3 3 Michael Johns, executive VP, health affairs, Emory $3.7 4 Arthur Rubenstein, executive VP and dean, School of Medicine, University of Pennsylvania $3.3 5 Zev Rosenwaks, professor, Center for Reproductive Medicine and Infertility, Cornell $3.1 6 David Swensen, chief investment officer, Yale $3.0 7 Harry Jacobson, vice chancellor health affairs, Vanderbilt $2.6 8 Jeffrey Moses, professor of medicine, Columbia $2.5 9 Norman B. Urmy, former executive vice president for clinical affairs, Vanderbilt $2.4 10 James Grifo, professor, obstetrics and gynecology, NYU $2.4
Tue, 10/18/2011 - 13:03 | 1785780 AldousHuxley
AldousHuxley's picture

Steve Jobs gave the education system the finger.  Everyone should follow such example.


College degree is required these days for even mundane jobs. You can't even become a secretary without a college degree.

Not everyone wants to become a tech entreprenuer.An I don't think you want your doctors, lawyers, accountants, etc. to just wing it and not have a college degree at all.

Your chances of getting richer is far better if you have a degree than not. For every 1 Steve jobs, there are thousands of college drop outs who are probably homeless versus, college degree will at least give you a chance at some non-labor intensive job.

Tue, 10/18/2011 - 20:56 | 1787429 FrankDrakman
FrankDrakman's picture

why are students not allowed to default on such loans

Blame their parents. Back in the late 1970's, once the "progressives" had buried shame and honour as concepts, a whole bunch of Boomer students realized that if they went bankrupt immediately after graduation, before they had a job, their student debt would disappear. Since there was no longer a stigma attached to bankruptcy, nobody gave a flying f*** if it was on their record. This concept spread like wildfire around campuses across the nation. Students started declaring bankruptcy in record numbers.

So, government took the then unprecedented step of making it impossible to discharge student loan debt through bankruptcy. One more reason for Generation Z (Y? X? I've lost track...) to hate the parents that have saddled them with huge debts and huge entitlements GenZ will never get, but will have to pay for.

Maybe Brokaw's next book should be about the Boomers - "The Greediest Generation".

Tue, 10/18/2011 - 11:06 | 1785196 tarsubil
tarsubil's picture

God help us all, that is exactly what I was thinking. What a mess.

Tue, 10/18/2011 - 11:27 | 1785353 Libertarian777
Libertarian777's picture

yep. Just because you legally owe the balance of the loan, if you cannot pay, you cannot pay.

When you owe the bank $10,000 it's your problem.

When 1 million kids owe the bank $10 billion, its the banks problem.

Tue, 10/18/2011 - 11:55 | 1785495 MachoMan
MachoMan's picture

Given the ability to garnish wages, etc., it basically means perpetually having no net worth...  no surplus...  And, if you take your sweet time with it, it probably means never touching the principal. 

Tue, 10/18/2011 - 12:34 | 1785656 SWRichmond
SWRichmond's picture

Yep.  The payoff, with interest, is more money than most of these people will ever see = debt peonage.  That was the purpose all along.

Tue, 10/18/2011 - 12:44 | 1785702 AldousHuxley
AldousHuxley's picture

It is an extra "TAX" by the banksters on the productivity gain of your education.


Dental schools debt in NY are at $300,000.


And you know what happens when the young professionals get out with such big debt? They rip you off so they can pay back these loans.


And you wonder why healthcare costs keep going up...

Tue, 10/18/2011 - 12:15 | 1785572 PrintingPress
PrintingPress's picture

No problem for the banks.   They can just garnish your wages until you die. 

Tue, 10/18/2011 - 12:24 | 1785615 Dental Floss Tycoon
Dental Floss Tycoon's picture

Banks don't have problems.  If a bank has a problem it becomes your problem.

Tue, 10/18/2011 - 10:28 | 1784984 JohnG
JohnG's picture

I smell a business opp in staged deaths.......

Tue, 10/18/2011 - 10:31 | 1785002 JohnG
JohnG's picture

And insurance fraud to boot (fuck I'm talking to myself again....)

Isn't Obongo jibber jabbering later I already need a drink.

Tue, 10/18/2011 - 10:50 | 1785107 monoloco
monoloco's picture

That's the big difference between this and the housing bubble, with student loans, there will be no strategic default, just millions of people with a massive debt overhang that will hold back their careers, their access to credit, and their standard of living. The universities are no different than drug dealers who prey on children. "Hey kid, want some free money? Just sign here, don't worry you won't have to pay it back until you're making 6 figures with your high powered degree in social studies. It's a sure thig."

Tue, 10/18/2011 - 11:12 | 1785221 tarsubil
tarsubil's picture

Honestly, I had a date night with the wife where we went and painted (and I drank a bottle of expensive wine), I'm a real sensitive guy, and the girl instructing the group was paid by the state to go back to school to "re-tool". She got a free ride to a very expensive private school to get a degree in ... wait for it ... you're not going to believe this ... are you sitting down?... Art! I'm not kidding, probably close to 6 figures to give a chick an Art degree which she uses to make $10 an hour instructing drunk rubes like me on how to paint something Bob Ross did. The whole educational system is fubar.

Tue, 10/18/2011 - 11:25 | 1785336 Blano
Blano's picture

LOL thanks for the laugh and the visual.

Tue, 10/18/2011 - 15:33 | 1785683 AldousHuxley
AldousHuxley's picture

you need $10,000 for even the beauty school.


You won't get Bob Ross today with so much pressure to make money because everyone is in debt. These days you HAVE to make a lot of money to stay in middle class. Money has too much power and won't let future Bob Ross to try something other than making money at all costs.


Bob Ross did his show on public TV for FREE.


Mon, 10/24/2011 - 12:40 | 1804780 tarsubil
tarsubil's picture

Actually, I've been to Bob Ross's warehouse in northern VA. I believe all of his original paintings from the show are there. Bob did the show as advertising for his painting products and services. His family seems to be doing fine with living off his legacy.

Mon, 10/24/2011 - 22:05 | 1806824 AldousHuxley
AldousHuxley's picture

funny thing is Bob Ross was in the military for a long time and got started in painting mountains in Alaska when he was from sunny Florida.


He didn't wants to work at a place where they yell at you and you yell at other humans.

Tue, 10/18/2011 - 12:48 | 1785718 Ag Star
Ag Star's picture

Really good movie.  In 1994 I graduated with an AA/Registered Nursing degree, paid as I went, got out with no debt.  Started work right away making $350/shift and in 2011 I retired from nursing making $744/shift (agency work in Los Angeles) I was suckered into going back to college for a BSN and after paying $900 a class for one year I said fuck it, this cost too much and I was already making more money than  RN's with bachelors.  I was also making more than nursing instructors with Masters degrees, WTF?  Sounds hard to beleive but I tell no lies.  That's why there's a nursing shortage, it stems from not paying instuctors well (masters degrees cost a lot) so no one wants to teach when they can make more money elsewhere.  Also, I was better prepared to take care or pt's and had more hospital experience though my AA program than nurses who went through  bachelor programs.  They took bullshit classes just to support the football team or other unnecessary university crap. While they were paying back school debt, I was buying property--yes

I have lost equity but at least I can live in it.

Tue, 10/18/2011 - 10:04 | 1784885 HoofHearted
HoofHearted's picture

Any idea of how to find a CDS (or some proxy) on student loans? I could be the next Kyle Bass!!!!!! (except those Eurocrat bitchez will probably try to ban naked CDSs on student loans also. Bitchez!)

By the way, is it time to cue the deer?

Tue, 10/18/2011 - 10:24 | 1784965 Mudduckk
Mudduckk's picture

Please limit your use of bitchez to one per post.  Biatch.

Tue, 10/18/2011 - 15:55 | 1786441 Ghordius
Ghordius's picture

LOL - hungry for risk!?
You too will have to retool, methinks... ;-)

Tue, 10/18/2011 - 10:03 | 1784855 DormRoom
DormRoom's picture

Did government not learn from the real estate fiasco?  Government incentived homeownership for those who couldn't afford it using Fannie Mae/Freddie Mac.  Wall Street took that bag of money, securitized it, and damned our parents.


Government incentives higher education with more funding in Pell Grants.  Wall street took that bag of money, and created an industry (Online education [Phoneix University/Devry ....]] that prints diplomas.  But the quality of education is questionable, and offers unemployable  skill sets. This misallocation facillitates structural unemployment, because of the mismatch in skills, and what the market wants.


Wall Street took that bag of money, and damned our young.


Like I said, Wall Street is the mechanism in which capital is distributed, and if it becomes broken, corrupted, or utilizes a false incentive schema, we witness, imbalances, price distortions, and misallocation.


clean up wallstreet.



Tue, 10/18/2011 - 11:03 | 1785177 been there done that
been there done that's picture

Let's not forget the whole "selling crappy stocks they knew were crap" thing. Wall Street sold shit stocks then shit mortgages.... what's next?

Tue, 10/18/2011 - 12:54 | 1785738 Ag Star
Ag Star's picture

Shit shool loan debt bubble.

Tue, 10/18/2011 - 13:33 | 1785899 AldousHuxley
AldousHuxley's picture

Sallie Mae = Fannie Mae


Meanwhile, "non-profit" college "executives" get paid millions of dollars + all kinds of bennnies including job security, dirt cheap cost of housing and sometimes paid for in comparison to private sector.


Even at shitty party school like Arizona STate University, you have many admins making north of $200k+


Not only limited to universities. Even Jewish non-profits!

No wonder Yale's MBA specialty is in NON-PROFIT, because that's where the cushy money jobs are these days.


These days, private workers are the SUCKERS!!! no job security, profit driven stress, outsourcing, global labor market salary and competition, little to no retirement funding, high cost of living, after taking out massive student loans.



This is why OWS is angry. This is why young Americans are angry.

Tue, 10/18/2011 - 12:54 | 1785742 Ag Star
Ag Star's picture

Shit school loan debt bubble.

Tue, 10/18/2011 - 11:58 | 1785514 MachoMan
MachoMan's picture

What consequences has anyone had to learn yet, really?  Many, many haven't even felt the real pain of the downturn...  especially not those associated with the government.

Further, all of these bubbles sprang forth contemporaneously...  the mechanism for all being cheap credit...  the genesis of which is the desire to vote one's self the benefits of the treasury (although the vote might have resembled more of a check/bundle of cash/favor than a vote).

Tue, 10/18/2011 - 15:37 | 1786368 AldousHuxley
AldousHuxley's picture

government subsidies only end up inflating shitty assets just like they did with housing.


if you want government policies to be effective, make it cut costs with productivity gains by introducing competition. but democrats just throw more money at their friends to overinflate shitty assets which makes fiscal conservatives angry and they end up cutting elsewhere.


Tue, 10/18/2011 - 17:04 | 1786836 MachoMan
MachoMan's picture

This is the paradox of central planning...  as soon as you decide the winner, it inevitably becomes a loser (ninny of the nanny state)...  unless it is the decider self-dealing...

It's not a democrat or republican thing...  it's a government thing...  and if you want government policies to be effective, then the best way is to reduce the size and scope of the government...  because it cannot implement viable and beneficial policies...  whether usurped by the few or overcome by the tyranny of the majority, it will fail.  The trick is to get it the fuck out of transactions unless absolutely necessary and even then to do it on a shoestring budget.

Tue, 10/18/2011 - 10:01 | 1784862 MillionDollarBonus_
MillionDollarBonus_'s picture

You can trust that mean libertarians will rally against anything descent. A college education is a HUMAN RIGHT and all Americans should have the opportunity to get a college degree. One of the reasons our economy is lagging is because there is a serious lack of good education in this country. Education is one of the most noble virtues, and no price is too high for a good college degree. Don’t worry about employment, just study what you are interested in and the jobs will come. That is the only way we are getting out of this economic crisis.

Tue, 10/18/2011 - 10:03 | 1784876 TuesdayBen
TuesdayBen's picture

MDB, you are hilarious.  I know damn well you are simply playing devil's advocate here on ZH, and that it is all tongue-in-cheek.  +1

Tue, 10/18/2011 - 10:49 | 1785102 DaveyJones
DaveyJones's picture

anything descent - very nice

Tue, 10/18/2011 - 10:12 | 1784914 fiftybagger
fiftybagger's picture

Your trollishness is fading.  You have more thumbs up than junks

Tue, 10/18/2011 - 10:13 | 1784918 fuu
fuu's picture

Your word clouds are boring.

Tue, 10/18/2011 - 11:14 | 1785238 tarsubil
tarsubil's picture

You people kept complaining and now his schtick has to be too obvious. Boo on yous!

Tue, 10/18/2011 - 10:22 | 1784954 blueRidgeBoy
blueRidgeBoy's picture

MDB, nice platitude choices.  May I also suggest:

  1. the children are our future
  2. a liberal arts education teaches you how to think
Tue, 10/18/2011 - 11:20 | 1785292 byteshredder
byteshredder's picture

"Education is a weapon whose effects depend on who holds it in his hands and at whom it is aimed." -- Joseph Stalin, 1937 in an interview with H. G. Wells

Our children have become tools in the hands of a tyrannical liberal/progressive movement.

Tue, 10/18/2011 - 15:39 | 1786379 AldousHuxley
AldousHuxley's picture

please don't lump progressives into the same boat as shitty asset inflating liberal corruptorates.


progressives don't want the same old Clintonian / Obama corruption.




Tue, 10/18/2011 - 10:26 | 1784974 JPM Hater001
JPM Hater001's picture

Dude, why do you continue to be the biggest moron on this blog.  Are you just doing it for attention?

Education is NOT a human right.  Your right TO SEEK and education is.  As a society we value, properly, an educated society but in the current system too many slip through the you.

Please stop talking about HUMAN RIGHTS until you have schooled yourself on NATURAL RIGHTS>HOBBS< >LOCKE< ET AL>>>Thats crossword talk for "and the like...

Texas just passed legistlation for natural law and the founding principles of our country to finally be taught AGAIN> you might want to attend.

Tue, 10/18/2011 - 10:34 | 1785013 JohnG
JohnG's picture

You haven't read many of this person's posts have you?  You are being fucked with.  Yes, really.

Tue, 10/18/2011 - 15:45 | 1786408 AldousHuxley
AldousHuxley's picture

Education is not a human right but so is inheritance entitlement in a capitalist economy.

I'm all for cutting education support as long as Paris Hilton, Mitt Romney, John McCain's wife, Rockefellers, Morgans, Clintons, Bushes, etc. gets zero inheritance and parents' connections to make it a truely equal competition.


Otherwise you will see smart people (the most productive) are going to flee this country for better masters. US is not the only government. US must offer competitive offers to those who want to better themselves.




Wed, 11/09/2011 - 22:49 | 1864298 fnordfnordfnord
fnordfnordfnord's picture

Education is not a human right

Maybe not, but it's a goddamned good idea not to surround yourself with morons.

Tue, 10/18/2011 - 10:39 | 1785044 MillionDollarBonus_
MillionDollarBonus_'s picture

This is a typical selfish libertarian comment. Education IS a human right, along with other necessities like healthcare, housing, minimum wage, cars, mobile phones and holidays. One of the reasons there is so much poverty in the world is that governments in third world countries REFUSE to provide these basic necessities. 

Tue, 10/18/2011 - 10:50 | 1785114 GeezerGeek
GeezerGeek's picture

Besides, giving everyone a mobile phone makes it so much easier to track people. Next thing we know, mobile phones will be mandatory, just like Obamacare.

Tue, 10/18/2011 - 10:55 | 1785131 monoloco
monoloco's picture

Yeah, and free cable TV, cause watching South Park is a basic human necessity. Oh, and free Dominos pizza.

Tue, 10/18/2011 - 10:57 | 1785138 FMR Bankster
FMR Bankster's picture

You got it MDB. One of these days all the big art history and political science companies will start hiring again and these kids will be set.

Tue, 10/18/2011 - 10:56 | 1785139 plongka10
plongka10's picture

Ah, but there's education, and then there's education thats worth paying for. I don't think the students of today are getting an education thats worth a shit.

Had to LOL at cars, mobile phones and holidays being a human right.

Tue, 10/18/2011 - 11:02 | 1785169 TrulyBelieving
TrulyBelieving's picture

MDB  You must be playing the devils advocate. No one can be that stupid. Not even liberals and OWSers. Sorry I junked you.

Tue, 10/18/2011 - 11:05 | 1785188 ceilidh_trail
ceilidh_trail's picture

(can't resist) MDB, what about my human right to pop a cap in your ass???

Tue, 10/18/2011 - 11:29 | 1785366 Blano
Blano's picture

Goddamn you're funny.


Unfortunately the novelty is wearing off.  Your green arrow numbers are accelerating.

Tue, 10/18/2011 - 10:50 | 1785109 Fuh Querada
Fuh Querada's picture


you are  getting so fucking predictable. Are you a program perhaps?  The train man?

Tue, 10/18/2011 - 11:30 | 1785377 caconhma
caconhma's picture

I hate people like MillionDollarBonus.

Their fucking rights are to steal other people money and live like pigs. These people are pig and must be treated as pigs.

I just wonder how stupid people can be buying this kind of demagoguery and lies.  Just providing a little bit better education for common people, so they can be more obedient and productive slaves for their masters will solve all the problems.

And speaking about “Human Rights” these people have in mind, just think about secret prisons and torture chambers these SOB are having in mind for Americans who disagree with their brand of Human Rights.


Tue, 10/18/2011 - 13:27 | 1785885 Silver Bully
Silver Bully's picture

Just imagine, you are describing your garden variety American. They typically vote Republican or Democrat. Sometimes two or three times.

Wed, 10/19/2011 - 22:49 | 1791331 Ahmeexnal
Ahmeexnal's picture

Their foodstamps keep coming irrespective of whether it's an elephant or a donkey sitting at the oval office.

Tue, 10/18/2011 - 10:03 | 1784873 Ruffcut
Ruffcut's picture

No one also told people to play pac-man and gobble up all the credit you can, either. "i'll worry about it later."

Tue, 10/18/2011 - 10:27 | 1784979 blueRidgeBoy
blueRidgeBoy's picture

oh, now Ruffcut, I see you haven't yet learned that we're all victims of big corporate fatcats, big government, big whatever.  As borrowers, we bear no responsibility for any of these assorted credit crises.  We were forced to take out 2nd mortgages, HELOCs, multiple credit cards, grad school loans, etc.  The banksters literally put guns to our heads - it's not our fault.  Don't worry - there are many here on ZH who will teach you the truth.  Watch this space.

Tue, 10/18/2011 - 10:08 | 1784902 Jay Gould Esq.
Jay Gould Esq.'s picture

"...state governments are poorer..."

Extremely well done. It is about time for some governmental impoverishment. What remains to commence is a strong, steady stream of trickle-up poverty to the federal level. Government at every level is far too plentiful.

Time for scarcity.

Tue, 10/18/2011 - 15:47 | 1786420 AldousHuxley
AldousHuxley's picture

scarcity for you, fire sale assets and slave wage labor for Mitt Romney's Mormon Inc (non-profit tax evading hedge fund).

Tue, 10/18/2011 - 10:14 | 1784923 Clueless Economist
Clueless Economist's picture

The standard portrayal of the Wall Street protesters goes something like this: Ragtag group of unemployed young adults, venting often incoherent but overall legitimate populist outrage about economic inequality. But go down to the movement’s headquarters, as I did this past weekend, and you see something far different.

It’s not just that knowledge of their “oppressors” -- the evil bankers -- is pretty thin, or that many of them are clearly college kids with nothing better to do than embrace the radical chic of “a cause.” I found a unifying and increasingly coherent ideology emerging among the protesters, which at its core has less to do with the evils of the banking business and more about the evils of capitalism -- and the need for a socialist revolution.

It’s not an overstatement to describe Zuccotti Park as New York’s Marxist epicenter. Flags with the iconic face of the Marxist revolutionary Che Guevara are everywhere; the only American flag I saw was hanging upside down. The “occupiers” openly refer to each other as “comrade,” and just about every piece of literature on offer (free or for sale) advocated socialism in the Marxist tradition as a cure-all for the inequalities of the American economic system.

Don’t try to explain to any of these protesters how those who sought to create a Marxist utopian dream of revolution also gave us the Stalinist purges, Mao’s bloody Cultural Revolution and many other efforts to collectivize thought in the name of economic “justice.”

One woman was holding a “Nationalize the Federal Reserve” sign; I tried to explain that the Fed is already nationalized, because it’s part of government, and she told me to “go check my f--king facts -- it’s privately owned.”

That’s when I was handed a piece paper offering the following wisdom: “The Game of Capitalism Breeds Dishonest Men.” The author of such deep thinking was a dude named De La Vega, an artist convicted a few years back for painting graffiti on a warehouse in The Bronx.

That was pretty mild compared to the sentiments offered in the official “Statement of the League for the Revolutionary Party” on the protests. These guys view as the enemy not just Wall Street tycoons, but also liberal labor leaders like Richard Trumka of the AFL-CIO.

The problem with Trumka, according to the Revolutionary Party and its Zuccotti Park contingent: He wants to work with wishy-washy Democratic Party politicians, where the true revolutionaries want to “defend and develop Marxist theory as a guide to action,” which is the protests’ real purpose.

Maybe the worse-spent dollar I have ever spent in my life was on a propaganda broadsheet titled “Justice,” which advocates “Struggle, Solidarity, Socialism.” On the front page of the newspaper-like document, beneath the headline “Capitalism: System Failure,” was a tease for a story on the economy and how “influential business economist Nouriel Roubini” recently said how “Karl Marx had it right. At some point, capitalism can destroy itself.”

Yes, the left-leaning Roubini made that fatuous statement, and many similar ones -- so many, in fact, that he has lost much of his credibility in financial circles, though that didn’t quite make it into the “Marx Was Right!” story.

Also absent was any notice of how the much-hated banks benefited not from free-market capitalism, which would have let them fail in 2008, but from crony capitalism that bailed them out. The similar cronyism practiced by Trumka and the Obama administration -- massive spending on useless but politically connected businesses like Solyndra, paired with class-warfare rhetoric -- likewise has very little to do with free markets.

I don’t advise going down to Zuccotti Park to have a serious conversation with the protesters, given their growing propensity toward violence and the growing revolutionary tone of the movement. But I would suggest that President Obama might want to put a hold on his support for the Occupy Wall Street movement as his 2012 re-election bid approaches.

If he keeps saying nice things about the protesters, the debate among business types and voters won’t be whether the president has some socialist leanings, but how much virtue he sees in the thoughts of Karl Marx.


Tue, 10/18/2011 - 10:27 | 1784983 kaiserhoff
kaiserhoff's picture

George Washington said they are all libertarians, but then George is a shill for the phat phucks and lunchwagons in DC.

Check that, George is an aparatchnik.

Tue, 10/18/2011 - 10:34 | 1785012 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

lets just hope they drown in debt then, and stay well away from any influence...!

Tue, 10/18/2011 - 10:35 | 1785025 Cynical Sidney
Cynical Sidney's picture

"I tried to explain that the Fed is already nationalized, because it’s part of government.........Also absent was any notice of how the much-hated banks benefited not from free-market capitalism, which would have let them fail in 2008, but from crony capitalism that bailed them out."

marxists ideal stress on equality (over productivity), and it's natural such ideal appeals to many when the phony-capitalist kleptocracy are stealing and robbing people out right, they are destroying wealth and people's life savings propelling the people to embrace marxism. this article is another example of how immoral criminals are overleveraging the futures of our youth, they are enslaving the youth in bad debts, they are denying them of quality of opportunity, and they expect the youth to be held responsible for all of these bad debts.

Tue, 10/18/2011 - 12:16 | 1785576 MachoMan
MachoMan's picture

The problem, of course, is that the marxist equality is built only for an academic vacuum...  in practice, some animals end up being more equal than others on animal farm.  And, ultimately, the ignorance of productivity causes impoverishment and/or collapse of the entire system (at best).

Not that capitalism can avoid some of these issues...  it's just that the meantime tends to be a little better (and the meantime is generally longer than the revolutionary period).

They're simply protesting about being serfs...  well, they're going to be serfs either way.  If they're that desperate to jump out of the frying pan into the fire, then so be it.

About the only game changers I see are: (1) the creation of a new, never before contemplated economic system and its perfect implementation into society at large [not a chance in hell]; or (2) the creation of a new, cheap and abundant energy source that decreases the price paid by consumers for energy, relatively speaking to the present price of oil and energy inputs of extraction (again, a snowball's chance).  I think humanity has exhausted itself on the former...  The latter might have a chance, but the hard constraints of eroi are not likely to be met.  Essentially any arguments to the contrary are faith based alchemy.

They say necessity is the mother of invention, but I think that's too broad...  necessity is the mother of bandaids...  bandaids that must be replaced...  sometimes rather quickly.

Tue, 10/18/2011 - 10:36 | 1785029 Smiddywesson
Smiddywesson's picture


There's a basic misunderstanding in your post about the nature of crowds.  The protesters are a crowd, a resource to be exploited by the person or persons who step up and tell them what to think, or more precisely what to feel, because crowds don't think.  Do not be stressed because the crowd doesn't know what to think yet, that's putting the chicken before the egg.  Reasons and beliefs always comes afterward.  If they appear to be Marxists or Communists or whatever at this stage, rest assured this is not over yet. 

The best, and most concise book on this topic was written over 100 years ago by Gustuv LeBonn, entitled The Crowd.  It's a great read.

Tue, 10/18/2011 - 11:05 | 1785191 aaronb17
aaronb17's picture

One woman was holding a “Nationalize the Federal Reserve” sign; I tried to explain that the Fed is already nationalized, because it’s part of government, and she told me to “go check my f--king facts -- it’s privately owned.”

Well, she was right in a lot of ways.  The fed pays dividends to private shareholders.  And the whole damn government is privately owned these days, is it not, given that national federal debt exceeds annual receipts by about 400%?

Frankly, these days "free market capitalism" is about as unconvicingin as an ideology as socialism is, anyway.  I can see how the kids would be confused.  Both principles appear to be equally impractical in practice because, unfortunatelly, people are a-holes.  Ultimately, having a-holes call themselves communists or capitalists does not change this fundamental characteristic. 

Tue, 10/18/2011 - 12:07 | 1785520 QuietCorday
QuietCorday's picture

We have exactly the same problem you describe in Britain, except we have had it for years and it really pisses me off.

Whenever there is an issue that catches on the tide of public dissent, or something that really needs to be addressed and changed, a certain group of authoritarian, revolutionary, unreconstructed Stalinists come out of the woodwork and try to manipulate the situation to "overthrow capitalism" and create a socialist workers revolutionary state. They do this by infiltrating absolutely every popular movement they can, installing their members in key roles, and trying to ride on the back of the movement to some sort of power.

The problem is that once they get involved in a new movement, their rhetoric starts to show and their real attitudes and opinions become obvious. This has the effect of driving people away in droves and making the movement and its concerns look like those of a bunch of rabid lunatics; in short, they kill expressions of popular political dissent.

Because this happens every single fucking time something comes up, we have now had over a decade of serious political and social concerns that have been ignored because a) they appear to be from nutters, and b) the people who did want to express dissent were put off by the nutters.

It happened with student loans, educational cuts, the public expenditure cuts, the war in Iraq, concerns over globalisation ... you name it, they are there, preaching, essentially, the need to become a 100-percent centrally planned, authoritarian Soviet-style state.     

And just to add ... the worst one was with the protests against the war in Iraq. These people infiltrated the dissent, set up the Stop the War coalition, then held protests that saw people carrying banners that said "We are all Hezbollah now."

This killed the ethical principles of the movement stone dead, and horrified the general public, most of whom did not want Britain to get involved in the war.   

Tue, 10/18/2011 - 12:47 | 1785715 obthedgehog
obthedgehog's picture

Different people I know have totally different opinions on the grassrooted-edness vs the manipulated-ness of OWS.  Your description is a nice way of tying the two ideas together.

Tue, 10/18/2011 - 13:21 | 1785808 Use of Weapons
Use of Weapons's picture

Word to the wise:

Hard-core Marxists are deployed in the same manner as undercover police operatives if the culture of said dissent allows it (the impressive seven year total of Mark Kennedy and so forth - hardly a lone wolf operation - but 'necessary' given Marx doesn't hold so much water with DG environmentalists); they're rarely aware of it, have to watch the ones who are. They're a m[i/e]metic poison, and have been used in this manner for a long time now; at least since the 60's, most if not all of the hard-core have detailed files on them, and can be enticed into engaging with any socially progressive / dissident movement with predictable results.

Widen your thinking a little to the great game - oh, and this is the 21st Century. The 20th Century was the century of the '-isms'; Capitalism is defined as unique because the mantra that Banking (or, rather, trade / economic activity) has run Western civilisation since the times when a silver mine lead to the greatest fleet in the hemisphere and domination of the area and thus it is the purest expression of the actual mechanics of societies (hopefully you should immediately get the reference). This is the wrong way of looking at it - Capitalism occurred because of those interests, it didn't generate them, and those interests can as easily operate under other 'isms'.

We're watching the end-game of the last great 'ism' - what replaces it is where we should be focused, and Marx, however an important thinker he was, isn't going to be anywhere close to the solution. I'm hopeful for a positive solution, others are hedging on evolution - 2.0's & beyond. Others are falling back onto old solutions, which I feel is potentially fatal for the species (and I'm hardly alone in that viewpoint).

Since you mentioned the war, you should educate yourself a bit - a while back I posted a link to news coverage of the '87 crash, featuring a very young junior MP presented as an expert on the markets, who was commenting on the effects. His name was Tony Blair, and it wasn't too long after that that his career took off, and he was primed to become the PM at certain meetings. Shocking idea: m[i/e]metic weapons can be organic, and the organic class can be wild (rare, and subject to brutal domestication if not pliable) or garden cultivated. I think it is naive to imagine that humans don't cultivate other humans-as-object/product/tool. Conditioning can be done via positive empathetic means, but usually fear/cruelty/shame/guilt are used - and produce a worse product, imo (but I'm biased here, I view manipulation as counter-productive in many cases, esp. if the subject becomes aware of it). The old adages that Great Britain was founded on the classics, and still has a very active class system should clue you into why horse breeding and so forth is so culturally central to national identity. [Read. between the lines here, of course].

But that's a little too radical & naughty even for ZH, methinks. Or in the words of Chomsky "If you believed something different, you wouldn't be sitting where you're sitting" to Andrew Marr, hopelessly outclassed in the interview.



The rabbit hole is a little deeper than you imagine, but that was an accurate portrayal of how non-sanctioned progress can be neutralised. Direct state infiltration is the less subtle version, or co-option of leader types if they emerge (or are created via the media, and then usually bound into it). Don't get too bogged down into the left/right paradigm here, either - works for both sides of that coin. Oh, and although this is rather heretical to mention here, "free will" within subjecthood is a somewhat lesser characteristic than most people would like to imagine.But...

Tue, 10/18/2011 - 12:49 | 1785714 Dental Floss Tycoon
Dental Floss Tycoon's picture


One woman was holding a “Nationalize the Federal Reserve” sign; I tried to explain that the Fed is already nationalized, because it’s part of government, and she told me to “go check my f--king facts -- it’s privately owned.”

What rock do you live under.  Check your fucking facts.  It is privately owned.

Tue, 10/18/2011 - 11:44 | 1785450 Grinder74
Grinder74's picture

I'm still waiting for the federal government to offset my 40k in sallie mae loans with my $47515 portion of the national debt.

Tue, 10/18/2011 - 09:47 | 1784806 buzzsaw99
buzzsaw99's picture


Tue, 10/18/2011 - 09:54 | 1784831 midtowng
midtowng's picture

They said the bubble is over. So we shouldn't worry, right?

They also said that the recession was over.

Tue, 10/18/2011 - 09:47 | 1784807 Caviar Emptor
Caviar Emptor's picture

Goddam The Pusher, bitchez !

Tue, 10/18/2011 - 10:05 | 1784890 GeneMarchbanks
GeneMarchbanks's picture

'To be sure, when the implications of the $850+ billion student loan bubble blowing up spread through the financial markets, it will make subprime seem like a tame walk in the park.'

It already has. These people bought stocks last week.

Tue, 10/18/2011 - 09:48 | 1784809 Vergeltung
Vergeltung's picture

ZH is the only place I am seeing this coverage. please keep up the excellent reporting!


Tue, 10/18/2011 - 09:48 | 1784811 SheepDog-One
SheepDog-One's picture

Until the student loan bubble blows up, back on them oars and ROW, graduates!

Tue, 10/18/2011 - 10:09 | 1784907 GeneMarchbanks
GeneMarchbanks's picture

Not applicable for me. As soon as I had get in debt in order to finish I dropped out. I can't really knock the experience though, I mean, a state university is a great place to get laid, purchase narcotics, and generally waste time enjoying yourself.

As far as learning anything?! Ummmm...

Tue, 10/18/2011 - 10:22 | 1784956 krispkritter
krispkritter's picture

Uh, what's that rowing job pay?

Tue, 10/18/2011 - 13:48 | 1785947 RKDS
RKDS's picture

Nothing, but you'll make it up in volume.

Tue, 10/18/2011 - 09:49 | 1784813 Christoph830
Christoph830's picture

How should we position ourselves for the inevitable collapse?  What are some good short candidates?

Tue, 10/18/2011 - 09:54 | 1784830 Misean
Misean's picture

The ol' frat house hazzing line "Assume the position!" comes to mind here.

Tue, 10/18/2011 - 10:37 | 1785032 JohnG
JohnG's picture

Buy gold.  Kinda shorts everything.

Tue, 10/18/2011 - 09:49 | 1784814 Ostapuk Ivano
Ostapuk Ivano's picture

I hate sallie mae.

Tue, 10/18/2011 - 09:52 | 1784816 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

That is pure comedy.

So now we bail out the Major Banking Houses (again, after again, after again....) because they pushed fraudulent student loans?  These Majors will throw a pity party about how everyone deserves equal equcation and how they were merely trying to help people achieve their dreams.

Tue, 10/18/2011 - 10:12 | 1784913 Temporalist
Temporalist's picture

The road to serfdom is paved with government intentions.

Tue, 10/18/2011 - 09:51 | 1784822 docmac324
docmac324's picture

So, for-profit universities whos students are dependent on GOV money will go away, their degrees will be worthless, and the individual is stuck with the debt.  All in the worst job market ever.

Sounds familiar.

Tue, 10/18/2011 - 10:35 | 1785021 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

yeh but its not a forced ponzi scheme like the welfare state - its optional idiocy

Tue, 10/18/2011 - 10:45 | 1785072 Smiddywesson
Smiddywesson's picture

A lot of those universities and colleges are going to go out of business because there are going to be a lot less customers right after a period of expansion during which they raised salaries and greatly expanded their facilities.  Ex:  New multi million dollar research facilities and dormatories with Starbucks type lounges that look more like hotels than dorms.  To compete in the education bubble and lure students, they had to expand, and that has left them vulnerable to a contraction.  They can't tighten their belts and survive because they are already too close to the precipice.

Tue, 10/18/2011 - 13:39 | 1785926 MachoMan
MachoMan's picture

This is correct, but the initial phase is to utilize a cheap dollar to entice foreign students over for education...  Although the american educational system is laughable to americans, it's apparently decently regarded in much of the rest of the world...  including our import nations.  Your college campus will look a lot more...  asian in the near future, if not already.  This attempt will ultimately be unsuccessful at reflating the college bubble.

Tue, 10/18/2011 - 09:53 | 1784824 TuesdayBen
TuesdayBen's picture

Time for a whole lot of college professors to take a nice big, and well-deserved, pay cut.

Tue, 10/18/2011 - 10:10 | 1784910 daily bread
daily bread's picture

+1  economics professors first

Tue, 10/18/2011 - 10:14 | 1784922 Temporalist
Temporalist's picture

They may deserve a different kind of Marie Antoinette.

Tue, 10/18/2011 - 10:47 | 1785087 Smiddywesson
Smiddywesson's picture

A lot of those multi-cultural diciplines will just be swept away.

I wouldn't want to be one of those professors right now.  It will be like trying to find a job on Wall Street.  Every college and University will be forced to cut the marginal programs.

Tue, 10/18/2011 - 11:06 | 1785195 DosZap
DosZap's picture


TENURE for these radical pricks is 90%% of the reason we have all these Progressive idiots running around.

It's better than a Federal Job.

Tue, 10/18/2011 - 11:47 | 1785471 Tsunami Wave
Tsunami Wave's picture

Waaahhhhhhhhhhh.. you're being mean!!! They are after all teaching ours and your children's minds.. how can you be such a snob! Teaching is a basic human right, what is a marketing or IT job or owning a small business compared to teaching or being a college professor!

<sarc. off>

Tue, 10/18/2011 - 09:53 | 1784825 Misean
Misean's picture

Brings new meaning to earning college credit...

Tue, 10/18/2011 - 09:54 | 1784826 jesusonline
jesusonline's picture
Stop your grinnin' and drop your linen! Somebody's on a fucking roll with those prompters :D President Obama’s Teleprompters stolen
Tue, 10/18/2011 - 10:24 | 1784963 krispkritter
krispkritter's picture

"And when asked to make a statement on loss of his teleprompters, the President, for once, had nothing to say."

Tue, 10/18/2011 - 10:55 | 1785132 GeezerGeek
GeezerGeek's picture

I didn't know that teleprompters had copper in them. Gotta pay of that college debt somehow...

Tue, 10/18/2011 - 11:51 | 1785478 Grinder74
Grinder74's picture

They're not stolen.  They're just being upgraded with the latest Rosetta Stone software for the Austrian language.

Tue, 10/18/2011 - 09:55 | 1784833 Josh Randall
Josh Randall's picture

7 years of college down the drain

Tue, 10/18/2011 - 10:06 | 1784892 Agent P
Agent P's picture

You owe me one sip of coffee.

Tue, 10/18/2011 - 10:14 | 1784924 gtb
gtb's picture

My advice for you is to drink heavily.

Tue, 10/18/2011 - 10:40 | 1785050 JohnG
JohnG's picture

In your forth year as a senior are you?

Tue, 10/18/2011 - 19:30 | 1787266 forexskin
forexskin's picture

Fat drunk and stupid is no way to go through life, son.

Wed, 10/19/2011 - 04:15 | 1788070 bIlluminati
bIlluminati's picture

Was it over when the Germans bombed Pearl Harbor?

Tue, 10/18/2011 - 09:55 | 1784834 legal eagle
legal eagle's picture

Deferment willbe number one elective.

Tue, 10/18/2011 - 09:56 | 1784835 Kokulakai
Kokulakai's picture



  I see a socialist campain promise in the offing.

Jubilee, Bitches.


Tue, 10/18/2011 - 10:21 | 1784949 kridkrid
kridkrid's picture

For sure. Already happening. I've seen at least a dozen links to articles about student loan forgiveness in my relatively small facebook community (and I'm not particularly young). It will continue to gain traction.

Tue, 10/18/2011 - 13:44 | 1785944 MachoMan
MachoMan's picture

The foregiveness generally requires public service or a job that serves a "public good."  I can't fathom that the end all be all solution that gains traction is to actually work for uncle sam to pay off the debt...  my guess is uncle sam's idea of a reasonable wage for debtors' work is a little different than the debtors'.  (actually, right now, if you factor in government pay, benefits, AND student loan foregiveness, the pay for the government is pretty damn high...)

It's not socialism that will gain traction so much as the desperate belief in the free lunch.  It's ultimately what drives socialism, but socialism is what failure of the free lunch concept looks like.

Tue, 10/18/2011 - 11:29 | 1785363 Raynja
Raynja's picture

Jubilee, isn't that what the bernank feels everytime he hits the print button (and reduces the burden of my debt)

Tue, 10/18/2011 - 09:56 | 1784839 UTICA CLUB XX PURE

Lenders are no longer pushing loans to people who can’t afford them Lenders are no longer pushing loans to people who can’t afford them Lenders are no longer pushing loans to people who can’t afford them Lenders are no longer pushing loans to people who can’t afford them LOLOLOLO What a Joke! Not Funny!

Tue, 10/18/2011 - 09:57 | 1784842 legal eagle
legal eagle's picture

To be fair, who can afford them Before obtaining the education? Credit counselors have to rely on average and means.

Tue, 10/18/2011 - 09:58 | 1784848 smithcreek
smithcreek's picture

I can guarantee student loan debt forgiveness within a year or two.  Why?  Because last month I sent a 5K check to Sallie Mae to finish off my loan.

Tue, 10/18/2011 - 10:19 | 1784932 dwdollar
dwdollar's picture

I should be able to pay mine off soon. I guarantee my luck is worse than yours, so yeah, I bet we're screwed.

I don't care though. I want this nightmare to be over with. Citi is saying I owe 4k more than I actually do, but I'm going to pay it anyway. Whatever... I will never get a loan from a big bank ever again. I will guide my children, family, and friends to local credit unions. The war has just begun.

Tue, 10/18/2011 - 10:37 | 1785037 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

my decision not to go to university and face the derision of my peers and parents sure looks fine and dandy now. I'm debt free and have about $45,000 worth of bullion...!

Tue, 10/18/2011 - 11:01 | 1785160 Smiddywesson
Smiddywesson's picture

Congrats, that is an inspiring story.  The other unsaid silver lining is that you have continued your education on your own and went right to the heart of what matters by coming to ZH.  So in other words, you can answer the derision of your peers by asking them some simple questions about the Fed and the real nature of money, and laugh straight in their faces when they give you a blank stare.  They probably remember about 1/10th of what they were forced to learn in Spanish III or Bio 101, but you have an education in reality.

Quick story:  Last year, I met a certified genius with a background in Economics and had a heated discussion about the economy.  I mean this kid was smart, but he kept talking about green shoots and backed up his opinions with government supplied numbers like GDP.  It was hilarious.  I have absolutely no formal education in Economics, Finance, or money.  I wonder what denial of reality will come out of his mouth when we next meet?

The only real education that matters is the one that matters to you.  (just made that up)

Tue, 10/18/2011 - 11:13 | 1785227 SilverIsKing
SilverIsKing's picture

If Citi says you owe more than you actually do, then you don't owe them this additional amount.  Why pay them what you don't owe them?

Tue, 10/18/2011 - 10:14 | 1784849 Mercury
Mercury's picture

The government shouldn't be pushing loans even to people who can afford them. 

I mean, it's almost like they're in business for themselves.


Goddamn the pusher man.

Tue, 10/18/2011 - 09:59 | 1784852 Awakened Sheeple
Awakened Sheeple's picture

I saw a post on facebook petitioning for forgiving student loan debt so its starting..


Fuck this.. No more bailouts. Not banks, not countries, not homeowners, not students.

Tue, 10/18/2011 - 10:14 | 1784921 Sockeye
Sockeye's picture

Thank you Awakened.

No more bailouts. No more socialism. It stops now!

Tue, 10/18/2011 - 13:50 | 1785953 MachoMan
MachoMan's picture

Actually, it would be socialism to foregive student loans...  All these students can file for bankruptcy like they would for any other poor business decision.  The cake has already been eaten...  can't have it too.

Tue, 10/18/2011 - 12:53 | 1785701 GFKjunior
GFKjunior's picture

I'm down for forgivness of my student loans, it is way too late to save the current system anyway. The faster and harder it falls the better.

Tue, 10/18/2011 - 10:05 | 1784853 TruthHunter
TruthHunter's picture

Every young adult struggling under a mountain of debt is a prime candidate for OWS.

These kids largely couldn't afford to be part of the housing bubble.  They were struggling

to pay off massive school loans working cash registers and fast food.


A mortgage is a piece of cake to walk away from compared to a student loan.

At least the banksters can't garnish food stamps.


"Bail out"  

If its a leaking boat, your still trying to save it.  If an airplane, your trying to save your skin; plane be damned.  So which is it?


Tue, 10/18/2011 - 11:17 | 1785265 SilverIsKing
SilverIsKing's picture

Everyone just stopping making their student loan payments would make for great TV.  That's something I'd love to see.

Tue, 10/18/2011 - 10:00 | 1784857 ZippyBananaPants
ZippyBananaPants's picture

Obama's teleprompter, podium stolen in Va.


Now someone else is going to be making his speaches.


How will we know which one is real?

Tue, 10/18/2011 - 10:28 | 1784986 krispkritter
krispkritter's picture

Look for the one with the long arm sticking out of his ass...

Tue, 10/18/2011 - 10:00 | 1784861 Jack Burton
Jack Burton's picture

How many of these student loans would be made without the government guarantee?  Not nearly as many as were made I am guessing.

So how do a large number of in debt graduates pay back their loans without good jobs?  And if they are employed in a decent job, the debt service costs will keep them out of the housing market and make them underconsumers for a decade at least. So however you look at it, it is bad for taxpayers , bad for students and bad for the wider economy.

Tue, 10/18/2011 - 10:02 | 1784867 Tense INDIAN
Tense INDIAN's picture

I learnt almost nothing in college ....that 4 year degree course should really be not more than 2 years ....u dont learn and remember all those things anyway would save plenty of money and time.......

Tue, 10/18/2011 - 10:31 | 1785000 blueRidgeBoy
blueRidgeBoy's picture

much of what you learn in college these days you should have learned in high school.  Pay twice, learn once.

Wed, 10/19/2011 - 04:26 | 1788077 bIlluminati
bIlluminati's picture

Some of us took math and science course and do remember what we learned. Others took the four-year party major,, and woke up with a major hangover. Your friendly neighborhood pusher would charge a higher rate of interest; other than that, don't see the difference.

The big thing, though, is that it's the professors that are living high on the hog. Bankers are only getting pennies on the dollar. So I'd like to see college teachers salary and pensions based entirely on the loan repayments of their students. My bet is that most professors would change careers. My best college professor - head of the biology department - went into auto repair so he could affor to send his kids to college - the same college he was teaching at, with child of teacher discount.

Tue, 10/18/2011 - 10:02 | 1784868 economessed
economessed's picture

So what we have here are fiat diplomas financed by fiat money.  Was there ever any question about the sustainability of this business model?

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