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January Consumer Credit Surges As Government Blows Student Debt Bubble To Epic Proportions

Tyler Durden's picture




 

One look at the just released consumer credit data would make one believe that the US consumer is getting back into it and the velocity of money is finally starting to ramp up: after all the headline January number came at a whopping +$17.8 billion on expectations of +10.5 billion. Nothing could be further from the truth.  As the first chart below demonstrates, January revolving credit, as in that used on one's credit card, actually declined by $2.9 billion compared to December, and was back to $800.9 billion: the first decline in 4 months as consumers spend less following an already weak holiday season. Yet offsetting this was an absolutely massive surge in Non-revolving credit, i.e., mostly student debt, which soared by $20.7 billion in the month, the highest sequential jump in this category in history, leading to a very misleading print of a major increase in credit. For earlier observations on the soaring student loan bubble see here. And it gets worse: when spread by sources of credit, the only place where credit came from was the US government, which funded a near record $28 billion, all of it going into student loans, even as every other source of credit declined in the month! If this is not the most blatant gaming of headlines, we don't know what is. But yes, America's lucky students get ever deeper into debt slavery, only to realize upon graduation that there are no jobs that pay high enough to allow them to pay off this debt. Thank you uncle Sam - may we have another bubble.

Total revolving and non-revolving credit:

Consumer credit by source:

Government portion of total credit (courtesy of John Lohman). Getting plain ridiculous as the government has now funded nearly 20% of consumer debt, in addition to having nearly 102% of Federal debt/GDP.

 

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Wed, 03/07/2012 - 16:25 | 2233346 Gully Foyle
Gully Foyle's picture

Hey now!

The idiot BIL just advised my son to take out student loans because the rates are cheap right now.

 

Wed, 03/07/2012 - 16:29 | 2233371 trav7777
trav7777's picture

i wouldn't take on any debt at this point that cannot be discharged.

The gov has moved to garnish SS, vet bennies, etc., over child support arrearages (which in some states are LUDICROUS - judges tell people laid off to just "go find" another job paying the 6 figures they used to earn before their job was outsourced).  So don't have kids either unless you're prepared to kill their mom, I guess.

Wed, 03/07/2012 - 16:33 | 2233390 CharlieSDT
CharlieSDT's picture

Sarah Lawrence College costs $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.

A quick perusal of a list of alumni of Sarah Lawrence on Wikipedia reveals very little in the way of business leaders, political figures other than that scumbag Rahm Emanuel, any good musician other than Carly Simon or any A-List actor of today except for Kyra Sedwick. There’s a couple of sort of well-known authors but nobody major except Alice Walker. Really it’s an unimpressive list, especially from the most expensive college in America.

 

http://www.singledudetravel.com/2011/10/the-higher-education-scam-and-sa...

Wed, 03/07/2012 - 17:27 | 2233602 economics1996
economics1996's picture

Someday, soon, people are going to realize the education offered in a main stream college or university is useless if it has any connect to any of the social or soft sciences.  Pure bull shit designed to get student s to support big government rip offs.

My subjects, economics and government, is pure bull shit.  Students would be better off reading a few books from Ludwig von Mises and saving their money, or spending it on a real degree in engineering.

Wed, 03/07/2012 - 20:55 | 2234337 Will To Live
Will To Live's picture

"Way back" in 1980 you could get an advanced degree in a medical field from a Midwestern State College for about $25 to $30 a credit hour. The Universities were doing fine then.  Just a data point to compare with how screwed up it is now.

Wed, 03/07/2012 - 16:46 | 2233438 TruthInSunshine
TruthInSunshine's picture

Trillion dollar bubble in the peak, you sayeth?

Yeah, I agree (shit is insane):

 

Education Connection

 

University of Phoenix Online 

 

Everest College Commercial 
Wed, 03/07/2012 - 16:52 | 2233456 JPM Hater001
JPM Hater001's picture

Someone get me a pin.  I'm gonna pop this thing like 14 year olds zit.

Wed, 03/07/2012 - 18:29 | 2233838 Antifaschistische
Antifaschistische's picture

If a college/university/trade school, etc. can't place 40% of it's graduates into their degree field of work, then the student should not be able to get a student loan for that degree, from that institution.

Maybe the number should be 60% or 80% or 35% but what we have now is absurd.  $100k in debt for total sham degrees is a crime.

Wed, 03/07/2012 - 17:26 | 2233595 Doubleguns
Doubleguns's picture

Rahm Emanuel paid nearly 60K for the free pussy. Guess he felt that was some kinda deal.

Wed, 03/07/2012 - 16:42 | 2233425 CrashisOptimistic
CrashisOptimistic's picture

In the old normal it was well known that in bad economic times, college enrollment expanded.  There was nothing else for those people to do.

In good economic times, there was too much money to be made and going to college was an opportunity cost.

 

In the new normal, in good economic times you need to get out of college and stop running up debt so you can work and make money, just like in the old normal, but with the debt avoidance imperative more prominent.

In bad new normal economic times (which is always) you fucking idiot GET OUT OF SCHOOL.  STOP RUNNING UP DEBT.  YOU AREN'T GOING TO GET A JOB WITH THAT DEGREE.

When people choose to make bullets fly, they will target university administration and tenured faculty along with banksters and politicians.

Wed, 03/07/2012 - 16:55 | 2233473 HungrySeagull
HungrySeagull's picture

Child support? Hah.

Just don't have children idiot.

Wed, 03/07/2012 - 19:02 | 2233963 Buck Johnson
Buck Johnson's picture

It's because our politicians have destroyed this country.  They are playing with numbers to make it look like things are doing alright when in reality everything is not doing well.  For short term money and power they have been bought by lobbyists to give businesses and financial institutions the ability to do anything that will make them money or not lose money.  And this is at the cost of US citizens. 

Eventually the US will go bankrupt and when it does this country will go insane when the checks don't come and no benefits of any kind is around.

Wed, 03/07/2012 - 23:41 | 2234648 Falkor
Falkor's picture

Incorporate an offshore entitiy, take a loan of few millions claiming you willl generate employment and never be seen again.

 

Thats not fraud. That's FED's modus operandi.

Wed, 03/07/2012 - 16:26 | 2233352 youngman
youngman's picture

Think of it this way...States are cutting back Higher educations funds...so the federal government steps up with easy loans to cover the gap....and in the future there will be a forgiveness on these loans....so the Government ends up subsidizing the universities....where the states can´t....

Wed, 03/07/2012 - 16:55 | 2233469 CrashisOptimistic
CrashisOptimistic's picture

There was a time and a window in which I thought there might be a debt forgiveness of student loans.

But at 16 trillion, that can't be done.  At 1.3Trillion/year, it can't be done.

The more likely event is a law will pass billing such loans to estate at time of death, and if they exceed the estate size, the heir will inherit the loan.

Wed, 03/07/2012 - 22:58 | 2234570 TheFourthStooge-ing
TheFourthStooge-ing's picture

CrashisOptimistic said:

The more likely event is a law will pass billing such loans to estate at time of death,

That is already the case. Outstanding student loans at time of death get first claim on any estate.

and if they exceed the estate size, the heir will inherit the loan.

Don't give them any ideas.

 

Wed, 03/07/2012 - 16:29 | 2233357 Comay Mierda
Comay Mierda's picture

look at all that debt that cant be written off in bankruptcy. the next generation is literally bankrupt and will spend the majority of their adult life as debt slaves working shit jobs.

i hope when they graduate they are at least smart enough to recognize how the govt has screwed them by bidding up tuition prices with grants and easily obtainable loans.  and i hope they realize the fed's central job in destroying the USD and eroding the middle class.

Wed, 03/07/2012 - 16:29 | 2233369 SheepDog-One
SheepDog-One's picture

IF theyre LUCKY enough to be able to land a shit job!

Wed, 03/07/2012 - 16:38 | 2233408 NotApplicable
NotApplicable's picture

By the time most graduate, they're so firmly entrenched within the system they have no choice but to believe in its lies. Otherwise, they have to admit to have taken the largest dead-end road in their lives.

Wed, 03/07/2012 - 18:07 | 2233765 czarangelus
czarangelus's picture

I didn't realize that until 2 years into my $32,000/yr school. Lucky me.

Wed, 03/07/2012 - 16:27 | 2233360 q99x2
q99x2's picture

I filed out my FASFA statement yesterday. It is still not to late for 2012.

Wed, 03/07/2012 - 16:35 | 2233397 brewing
brewing's picture

how many thousands in textbooks?  what a fucking racket that is...

Wed, 03/07/2012 - 16:51 | 2233453 object_orient
object_orient's picture

I'm thinking of going back to school and getting as much financial aid as possible. In present circumstances it might be best to learn a specialized trade and a foreign language at the same time. That way, if there are no jobs after graduation, you can ditch the non-dischargable debt and start over in another country.

Wed, 03/07/2012 - 16:56 | 2233482 HungrySeagull
HungrySeagull's picture

Don't do it. You are gonna be sorry to learn that THEY come here learn, graduate AND THEN GO BACK OVERSEAS TO HOMELAND and TEACH OTHERS.

YOU, the AMerican are not welcome or wanted.

Wed, 03/07/2012 - 17:26 | 2233597 aerojet
aerojet's picture

Don't you read?  You might better learn all of that on your own and not run up the debt.  The fucking un-dischargeable debt that ties your hands and keeps you from having valid choices in life.

Wed, 03/07/2012 - 22:59 | 2234573 mick_richfield
mick_richfield's picture

Are you getting a liberal arts degree?

Cut and paste this sentence 100 times: "It is still not too late to go to a two year school."

Fifty bucks for the spelling lesson, kid.

Wed, 03/07/2012 - 16:27 | 2233361 GeneMarchbanks
GeneMarchbanks's picture

Stay away from groupthink and debt. I just schooled you.

Wed, 03/07/2012 - 16:50 | 2233451 lizzy36
lizzy36's picture

Groupthink is fascinating.

It is natural to want to be part of a herd. Kids are raised and socialized to want to be "part of the crowd".Thier parents preach "if johnny told you to jump off a cliff", yet those same parents are absolutely enamoured with keeping up with the Joneses.

The reality is being a contrarian is lonely, difficult and more often than not, a path chosen by very few. 

 

Wed, 03/07/2012 - 16:59 | 2233493 GeneMarchbanks
GeneMarchbanks's picture

'The reality is being a contrarian is lonely, difficult and more often than not, a path chosen by very few.'

Yes but you speak with the Gods themselves.

Wed, 03/07/2012 - 17:01 | 2233500 Comay Mierda
Comay Mierda's picture

you hit the nail on the head.

the contrarian often is the outcast who most people think is crazy but at the end of the day comes out ahead

Wed, 03/07/2012 - 17:29 | 2233608 aerojet
aerojet's picture

What I have come to learn in my life is that being part of the crowd was never any kind of advantage.  The truly successful people are the standouts, the holdouts, and the iconoclasts.  Keeping up with the Joneses is bullshit and it always was. 

Wed, 03/07/2012 - 17:38 | 2233639 viahj
viahj's picture

it's easy to be alone when everyday you discover yet another reason to hate humanity.

Wed, 03/07/2012 - 19:02 | 2233967 sessinpo
sessinpo's picture

"Groupthink is fascinating."

 

I whole heartedly agree with this comment. You don't know how many people of the older generation that insist that a higher education is the ONLY way to go. They are from a different time and haven't done the calculations of current cost compared to real benefits. It is a sad thing because even my folks suffer from this - pure hubris - my father has a PhD in inorganic chemistry and my mother has a masters in education. Products of the greatest generation - pampered by veterans of WWII and think that a depression can't happen again because the people in control are to smart and have learned from the mistakes of the past.

 

Very sad.

Thu, 03/08/2012 - 06:02 | 2235240 Harlequin001
Harlequin001's picture

I'm a contrarian, me too!

No you're not...

Wed, 03/07/2012 - 16:27 | 2233362 taniquetil
taniquetil's picture

iBailout incoming.

Wed, 03/07/2012 - 16:29 | 2233363 Deep79
Deep79's picture

Yup this is going to end well

 

 

Wed, 03/07/2012 - 16:28 | 2233365 SheepDog-One
SheepDog-One's picture

WOW now everyone in the country is a fucking PHD and cant even land a job as nite sweeper at WalMart.

Wed, 03/07/2012 - 16:30 | 2233375 trav7777
trav7777's picture

i know/knew a chick workin at ANF who has a degree in biology

Wed, 03/07/2012 - 16:32 | 2233381 tekhneek
tekhneek's picture

Is that where you buy your abnormally tight t-shirts, or do you just go there to hit on bitches?

Wed, 03/07/2012 - 16:34 | 2233393 SheepDog-One
SheepDog-One's picture

Aber and Fitch? Nah, thats where the assless jeans guys hang out. 

Wed, 03/07/2012 - 16:41 | 2233421 piliage
piliage's picture

Aber and Fitch sounds like the world's worst vaudville act...evah.

Wed, 03/07/2012 - 16:33 | 2233386 SheepDog-One
SheepDog-One's picture

Yep and my friends daughter with an 8 year degree has been working at an ice cream shop for a year, just because she looks good too.

Wed, 03/07/2012 - 17:35 | 2233630 Moneyswirth
Moneyswirth's picture

Her surname isn't Fluke by any chance?

Wed, 03/07/2012 - 16:35 | 2233395 azzhatter
azzhatter's picture

is she hot? that's all that matters

Wed, 03/07/2012 - 16:36 | 2233402 Agent P
Agent P's picture

she's a jeanealogist

Wed, 03/07/2012 - 23:01 | 2234576 mick_richfield
mick_richfield's picture

Ahem.

Wed, 03/07/2012 - 18:49 | 2233912 Maghreb
Maghreb's picture

There are lines to get in outside the ones in the U.K. Young topless men standing around like bouncers, I might try shop lifiting there just for the experience of being chased through a shopping mall by a bunch of semi nude teens. I think they decided to take the GAP buisness model a step further and actually use a full gay nightclub as a place to sell clothes. Next step is to get a bunch of really freindly black guys with dyed blond hair selling E while dancing with you at the check out.

Wed, 03/07/2012 - 16:57 | 2233487 HungrySeagull
HungrySeagull's picture

PHD's can work in walmart, they just wont stoop to taking orders from a wart faced manager to stack pallets quick, chop chop before their actual work starts.

Wed, 03/07/2012 - 17:43 | 2233657 aerojet
aerojet's picture

The myth about a PhD is that you make lots of money.  In reality, most PhDs make less or they don't work in their field at all.  I now leave mine completely off my resume.  It's never worth going into debt for.  You might still do okay as an MD, if you don't mind the hours.  Law degrees are practically worthless unless you are connected or have a real plan for what you are going to do. 

Wed, 03/07/2012 - 16:28 | 2233367 Jason T
Jason T's picture

Obama!!!!  

Wed, 03/07/2012 - 16:30 | 2233374 LongSoupLine
LongSoupLine's picture

Eg-jew-kay-shun...bitchez!

Wed, 03/07/2012 - 16:31 | 2233376 mayhem_korner
mayhem_korner's picture

 

 

Serious question:  Is college tuition included in BLS inflation measure? 

Wed, 03/07/2012 - 16:55 | 2233477 JPM Hater001
JPM Hater001's picture

Does it count toward GDP?  You bet ya.

What I'd like to see is the weighting it gets and how hedonically adjusted the poor bastard is.

Wed, 03/07/2012 - 16:31 | 2233377 Divided States ...
Divided States of America's picture

My mom's friend son who amassed 25k of student loan just returned back to his own country and hes not planning to pay it back or return to this country. Guess someone's gonna be taking that hit...

Wed, 03/07/2012 - 16:33 | 2233384 thedrickster
thedrickster's picture

Watch out for drones.

Wed, 03/07/2012 - 16:35 | 2233398 azzhatter
azzhatter's picture

he is now a terrorist. Holder is searching for fastly and furiously

Wed, 03/07/2012 - 16:57 | 2233485 JPM Hater001
JPM Hater001's picture

he is now a(n) indebted and poorly educated terrorist.

Fixed.

Wed, 03/07/2012 - 16:41 | 2233423 NotApplicable
NotApplicable's picture

Wait, they even back loans for foreigners? FFS!

Wed, 03/07/2012 - 16:44 | 2233432 Comay Mierda
Comay Mierda's picture

"Guess someone's gonna be taking that hit..."

try calling the US Dept of Education and find out who actually owns the debt. you will be shown a black hole and told no one really knows who owns it, but you must keep making payments or else

you cant make this shit up

Wed, 03/07/2012 - 17:44 | 2233661 aerojet
aerojet's picture

We'll just see how that plays out.  You don't think the people who loaned him the money thought about how to collect if he bails?

Wed, 03/07/2012 - 16:31 | 2233378 tekhneek
tekhneek's picture

I'm thinking liberal arts... or sociology...

 

Wed, 03/07/2012 - 16:48 | 2233443 Hugo Chavez
Hugo Chavez's picture

god you look so fuckable
But you are probably a dewd arent you?

Wed, 03/07/2012 - 17:08 | 2233516 tekhneek
tekhneek's picture

Well this is awkward.

Wed, 03/07/2012 - 19:05 | 2233978 sessinpo
sessinpo's picture

But are you a dewd? lol

Wed, 03/07/2012 - 19:40 | 2234087 Dr. Acula
Dr. Acula's picture

It's your mom.

 

Wed, 03/07/2012 - 23:05 | 2234582 mick_richfield
mick_richfield's picture

It's OK, Tek.  I have a good-looking girl as part of my avatar, too.

And she must look really fuckable too -- because the fucking COMEX is fucking her just about every fucking day.

Wed, 03/07/2012 - 16:33 | 2233383 thedrickster
thedrickster's picture

So how long until forebearance is granted for gainful employment as a community organizer?

Wed, 03/07/2012 - 16:34 | 2233391 azzhatter
azzhatter's picture

how else will they get proper marxist indoctrination

Wed, 03/07/2012 - 16:40 | 2233414 Tsar Pointless
Tsar Pointless's picture

Between my partner and I, we have about $65,000 in student loan debt.

I'm unemployed, and he works nights at a hospital doing "environmental services" work. Meaning, he cleans up after surgeries in the OR and transplant patients in the ICU facility. And he does so for $9/hour.

Wed, 03/07/2012 - 16:43 | 2233429 NotApplicable
NotApplicable's picture

I'll bet you can buy new identities for a lot less than that.

Wed, 03/07/2012 - 17:43 | 2233658 SilverRhino
SilverRhino's picture

Creating / Selling a new identity is probably a GROWTH industry in the next several years.

 

Wed, 03/07/2012 - 17:46 | 2233666 aerojet
aerojet's picture

Seriously, you should read that article on BusinessInsider about how to disappear to Venezuela.

Wed, 03/07/2012 - 16:41 | 2233420 SmoothCoolSmoke
SmoothCoolSmoke's picture

Who gives a shit? 

Bernanke SCOREBOARD  says......

DOW +90.

Whoo-hoo!

 

 

Wed, 03/07/2012 - 16:50 | 2233448 Tsar Pointless
Tsar Pointless's picture

HFT computers and the typical Amerikkkan have at least one thing in common:

Both only look at the headline of a news story.

"Consumer credit up!"

"Unemployment rate falls!"

"Central Banks bail out [insert favorite bankrupt country here]!"

"Market up on recovery/Greece/EU/March Madness hopes!"

The rest of the story matters not.

Wed, 03/07/2012 - 21:08 | 2233426 LouisDega
LouisDega's picture

I never went to college and look how i turned out.  im not dumb but smart and i want respect. 

http://www.youtube.com/watch?v=vYabrQrXt4A

Wed, 03/07/2012 - 16:41 | 2233427 gjp
gjp's picture

And US consumer stocks go crazy.  New high for SBUX, HD closing in.  WFM, LULU, etc. all partying courtesy of Bennybucks.  Disgusting

Wed, 03/07/2012 - 16:46 | 2233437 mayhem_korner
mayhem_korner's picture

 

 

...but they lost ground to oil an PMs today.  Which means stocks went down.  Again.  I frequently send e-mails to CNBC's reporters when they post these "stocks surge" type articles to remind them how equity investing keeps losing ground. 

Nominal values are like opium to the normalcy bias.

Wed, 03/07/2012 - 17:46 | 2233668 viahj
viahj's picture

this has tomorrow's RoboTrader post written all over it

Wed, 03/07/2012 - 16:51 | 2233449 bob_dabolina
bob_dabolina's picture

Basically the government is involved in predatory lending. I'm not even sure if people taking these loans out realize that student loan debt is I think the only debt that isn't forgiven in bankruptcy.

So according to collegeboard.com the average tuition is $36,000 per year (not including books, and board). So you graduate with $144,000 in debt (basically a mortgage) and end up working some job as a cashier, now you want to file for bankruptcy but you still have the $144,000 debt.

How is this NOT worse than what the banks were doing? At least that black guy gets to live in his $1.4 million dollar mansion rent free.

Wed, 03/07/2012 - 16:57 | 2233486 mayhem_korner
mayhem_korner's picture

I'm not even sure if people taking these loans out realize that student loan debt

 

Kinda like 'buy a sofa and loveseat today...no payment 'til 2014!!!'.  A friend of mine once bought some concert tickets and when I asked he said "I didn't pay for it, I just put it on my credit card." 

Debt is nothing more than the separation, by time, between gratification and responsibility. 

Wed, 03/07/2012 - 16:58 | 2233490 thedrickster
thedrickster's picture

You are obviously just anti-intellectual and not educated enough to see that in exchange for debt slavery you gain lifetime admittance to the intellegensia and carte blanche to plunder the wealth of your inferior working neighbors.

Wed, 03/07/2012 - 16:50 | 2233450 Moneyswirth
Moneyswirth's picture

Surely there will be McJobs and other retail jobs available.  Look at any suburban/urban street and every fucking block has a Golden Arches or Walgreens or Target or Wal Mart, etc.  

Oh wait---as we know, the retail/CRE sector is getting flushed down the toilet too.

But not to worry---15 years from now we will all get free college tuition (we can stay in our parents basement until we're 26 with free healthcare---Thanks Obamacare!), free contraception (for all you law school grad students), free Chevy Volts and tax credits for voltage.

The future's so fucking bright.....oh...that's a mushroom cloud.

Wed, 03/07/2012 - 16:52 | 2233458 Village Smithy
Village Smithy's picture

Someone give us a little background on how a student loan can provide you with income while you are unemployed. Will they really give you more than you require for strictly tuition ? Um, it's not for me..it's it's for a friend of mine.

Wed, 03/07/2012 - 16:52 | 2233459 _Will_
_Will_'s picture

America's debt problem looks really bad when you consider the share of the debt load for those who actually work.

Per capita for the labor force ONLY, we the monthly billpayers and annual federal income taxpayers are each responsible for $100,000 in debt.

http://hearourvoices.us/post/2012/03/06/Americas-Free-Credit-Report.aspx

Wed, 03/07/2012 - 16:53 | 2233460 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

PhD = Piled high and Deep

MBA = Major Bullshit Artist

MA = Major Asshole

BA = Becoming Asshole

AA = Associate Asshole

Wed, 03/07/2012 - 16:54 | 2233466 Shizzmoney
Shizzmoney's picture

LOL at my young peers who voted for this clown Obama.

"Change" "Hope" are just euphanisms for "Bullshit".

Wed, 03/07/2012 - 16:55 | 2233478 thedrickster
thedrickster's picture

Where my principal reduction?

Wed, 03/07/2012 - 16:59 | 2233494 Peter Pan
Peter Pan's picture

The relationship between government and students is one of mutually agreed destruction. The government "thinks" it's going to get paid and the student "thinks" he or she is getting an education.

Wed, 03/07/2012 - 17:01 | 2233496 Peter Pan
Peter Pan's picture

The relationship between government and students is one of mutually agreed destruction. The government "thinks" it's going to get paid and the student "thinks" he or she is getting an education.

Wed, 03/07/2012 - 23:09 | 2234589 mick_richfield
mick_richfield's picture

The government pretends it's money.

The colleges pretend it's an education.

The parents pretend it'll help their kids get a job.

The students pretend to study.

I'm really sick of this.

Wed, 03/07/2012 - 17:01 | 2233499 BandGap
BandGap's picture

I have a PhD in Chemistry. All of my kids are studying medicine or to be engineers or scientists. Not all education is bad, it's just that they made it too easy for some..........

Wed, 03/07/2012 - 17:10 | 2233519 LawsofPhysics
LawsofPhysics's picture

Likewise.  I was part of a biotech company that went public in 2001.  When we went public I was told that my contributions were very important but that I needed to go back to school for an MBA if I wanted to move up.  I sold my shares and started my own gig.  Ten years later and we are still cranking, fuck the paper-pushers.  If we ever "go public" I will retire.

FYI, my entire college career cost me under 30K.

The bottom line is Atlas is shrugging, "modern" education is part of the problem.

Wed, 03/07/2012 - 17:18 | 2233550 BandGap
BandGap's picture

Passed on the MBA offer (free where I worked), went into regulating the pharma side of the business and have done well.  I paid my way for my entire education, about 19K out of pocket. 

Student loans these days are predatory.  High interest rates (pegged to my ability to contribute) and immediately begin charging interest. All of the kids will get their 4 year degrees and be less than 25K in debt for each.  The oldest (engineer) will start @ about 75K a year and there is a demand for his field so he will get a job.  He is making $14/hour as an intern this summer. I laugh or cry at people who have 100+K loans and are deep frying potatoes. What f*cking parents out there are advising their kids to go majors where there are about a dozen jobs, each at 25K a year?

Wed, 03/07/2012 - 17:19 | 2233558 BandGap
BandGap's picture

Passed on the MBA offer (free where I worked), went into regulating the pharma side of the business and have done well.  I paid my way for my entire education, about 19K out of pocket. 

Student loans these days are predatory.  High interest rates (pegged to my ability to contribute) and immediately begin charging interest. All of the kids will get their 4 year degrees and be less than 25K in debt for each.  The oldest (engineer) will start @ about 75K a year and there is a demand for his field so he will get a job.  He is making $14/hour as an intern this summer. I laugh or cry at people who have 100+K loans and are deep frying potatoes. What f*cking parents out there are advising their kids to go majors where there are about a dozen jobs, each at 25K a year?

Wed, 03/07/2012 - 17:20 | 2233565 Moneyswirth
Moneyswirth's picture

Nice...

Wed, 03/07/2012 - 17:34 | 2233626 MobBarley
MobBarley's picture

You have a PhD in Chemisty, and yet you couldn't synthesize LSD if ergot was growing

out your ass. Worthless!

You can't even explain how parts per trillionth of Corexit alter electrical propagation speed

of lipid membranes leading to apparent 'zombification' of exposed populances

through alteration of neuronal potentials and optic pathways in the pineal.

You're fucking WORTHLESS beyond justification.

Damn ZOMBIE.

 

Wed, 03/07/2012 - 17:05 | 2233507 Northeaster
Northeaster's picture

Why would any of this stop?

There is absolutely zero risk on the part of colleges/universities, the loans are all backstopped by the government. Those same colleges/universities, public and private, donate tons of money to campaigns, while at the same time increasing costs (supply/demand), to keep the cycle going. The government doesn't give a fuck, neither do college teachers/officials.

The only question will be "who" ends up paying? We know who will, as some politician that should be hanging from a lamppost already will announce a debt/loan forgiveness plan. Of course, said politicians will tell Americans how good it is for us and remind us to vote.

At this point, anyone that has been to college knows that outside the math, engineering and hard sciences, college is just an extension of high school, and a lot of the shit you need to know on the job you get trained for anyways (or at least incumbent upon you to keep your skills sharp). As long as students/parents are dumb enough to buy into the lie that college will make them successful, there will be no end to the amount of debt slaves lining up to hand over any potential future income, having no idea that the Financial Aid Office who doesn't give a fuck about them in the first place just had them sign their life away.

Thank goodness I went a long time ago.

Wed, 03/07/2012 - 17:15 | 2233537 trillion_dollar...
trillion_dollar_deficit's picture

Remember the Obamacare bill? Yeah, that one. Little paid attention to fact is that it also effectively nationalized the student loan industry. So, this epic bubble blowing should come as little susrpise.

Wed, 03/07/2012 - 17:18 | 2233549 sodbuster
sodbuster's picture

Maybe if these kids are that f'n stupid, they belong in college.... wait.....never mind.

Wed, 03/07/2012 - 17:23 | 2233577 kiwione
kiwione's picture

I think on a non-seasonally adjusted basis, the nonrevolving jump was higher - like $33B.  And the revolving drop was closer to 2%+

Wed, 03/07/2012 - 17:45 | 2233667 Stuck on Zero
Stuck on Zero's picture

If you don't have a job and are looking at being hungry in the street I'd say that a good response would be to get a big fat student loan and go live on a college campus somewhere.  Chances are you can keep earning degrees until the economy recovers and you can get a job.  So where's the problem?

Wed, 03/07/2012 - 18:24 | 2233827 Miss Expectations
Miss Expectations's picture

If you're just interested in learning, why not sneak into the large lecture halls and "audit" the classes for free? 

Wed, 03/07/2012 - 20:07 | 2234189 snblitz
snblitz's picture

I doubt you will learn much auditing classes.  Try the Harvard University 1953 Everyman's Library.  You can just sit at the beach and read.

Wed, 03/07/2012 - 18:01 | 2233741 Jacks Nipple
Jacks Nipple's picture

I've seen this coming, My mom, in her 60's, is full force in the student loan black hole. working on her PhD, online, teaching online courses for the same internet college, getting a paycheck from the college and also getting so much student loan to pay for her continued schooling /funding her APPL habit. It makes me sick and she knows how I feel, but I cannot be in control of everything.

that's why I booked a transatlantic cruise and will join the revolution in europe. My sister can take care of her.

Wed, 03/07/2012 - 18:21 | 2233817 Antifaschistische
Antifaschistische's picture

Student Debt Plan

A.  If you're a parent with college bound students you should begin polishing their credit rating very early on.  When they get to college they should have a collection of credit cards that you control.  Work with a credit counselor to ensure a constantly improving credit score.

B.  Do not let them pick a major that has no chance of employment

C.  Make sure they're near the top of their class.

D.  Put all education expenses on the credit cards.

E.   After graduation, and after a good job is attained encourage them to buy a house and a new car.  Within a year, plan on being so upside down that bankruptcy is the only way out.  When you stop making all payments...and glide into bankruptcy, buy gold with cash only. 

File....and give all debt back and start fresh 1 to 2 years after graduation.

Wed, 03/07/2012 - 20:00 | 2234170 shuckster
shuckster's picture

Ha student loans are only the beginning of everyone's problem. At $60 trillion in national debt, the average American owes $200,000 a piece. And forget future obligations... then you're in the millions

Wed, 03/07/2012 - 20:54 | 2234332 dolph9
dolph9's picture

Alot of this is going to hicks, spics, and nigs who are trying to be part of the middle class and who will end up being debt slaves.  Just as the housing bubble did to the middle class who were trying to be rich.

From the Godfather III "finance is a gun, politics is knowing when to pull the trigger."

Debt is a gun aimed at the heads of the American people.

Wed, 03/07/2012 - 21:47 | 2234441 Dingleberry
Dingleberry's picture

I've posted on this issue before. It means a lot to me. I saw firsthand for the last several years what was coming down the pike as an officer recruiter for the military. As a former officer myself, I appreciate the value of an education. But what I saw these days absolutely pales in comparison to what I went through in the 80s-90s attending college. The main thing is that I wasn't even given the chance to financially strangle myself like kids today. Student loans were dischargeable, and lenders wouldn't loan that much (even auto loans and credit cards, if you can believe it). Contrast that with today.  Kids don't realize what a racket "education" has become. It starts in high school. Schools are ranked by how many kids they send to 4-year colleges. Hence, the incessant push by counselors to send ALL kids to college, when realistically maybe 25% need to go. Colleges have become marketing machines that make corporate Amercia green with envy. Only Apple comes to mind as a marketing competitor. Kids will do anything and everything to gain a perceived "advantage" by going to expensive schools, when that rarely exists. On top of that, endless vacations and study abroad crap.  But they did not seem to care.  They do not understand that hard work is what gets one ahead. Not sheepskins. They only open a door or two.  These kids are smart and good, but do not comprehend compound interest, nor the dangers of potential defaults on their loans. Penalties, fees, interest increases, etc. happen nearly immediately when a graduate misses a payment. And they can almost NEVER be discharged. I believe bankers pray for them to miss a payment.  And parents are missing in action.  Even those graduates with good paying jons upon graduation are squeezed by taxes, student loans and other debt like credit cards and auto loans. I can say with absolute authority that the next generation will be downsizing, and have already neutered their financial lives for the next decade or two.  Our only hope is to educate the next generation, and stop this criminal educational-industrial complex from consuming them, as it will be even worse. Preying on our young does not bode well for our nation's future. 

Thu, 03/08/2012 - 02:01 | 2234958 boiltherich
boiltherich's picture

In my case Dingle the college was so large that there was a separate financial aid office for veterans run by a veteran that handled all our specialty issues.  He went on two weeks vacation and the day he left some hateful dumb cunt that did not like him or veterans took it upon herself to recalculate every veteran application for Pell Grants in the middle of the term.  The Pell Grant application said in bold block letters NOT TO INCLUDE VETERN DISABILITIES WHEN CALCULATING INCOME FOR ELIGIBILITY, but that dumb cunt did add it in and it put me $86 over the limit for Pell, so when I lined up on the first of the month to get paid I was told there was no check please go inside the financial aid office. 

I had to decide between rent payment or car payment.  When our regular vet rep got back I was waiting for him along with a couple dozen other vets that got cut off our Pell Grants and he said we could all go home and relax he would fix it.  It was almost like getting high the relief we felt at having that fixed, but by the following week he had the bad news that once that dumb cunt decertified us based on income the Pell Grants could NOT be restarted.  It was never explained who or why that had to be the case, that because of one error by some daft bitch dozens of people are cut off and the error CAN'T be fixed?  By anyone?  I know, it does not sound logical or possible. 

Well one thing led to another, without the Pell I had to drop a class in order to work more hours just to eat, but then once I dropped a class the VA called me part-time and cut my VA benefit.  But, because it was mid term and I was now part-time they said I would get no more benefit that year to repay the overpayment from when I was full-time.  Now I had NO financial aid and was working 15 hours a week. 

The VA rep said we would just have to start over in the fall with my having lost a whole semester and the summer from my degree program.  Unfortunately the week before the fall term started was 6 months after the whole Pell fiasco that stupid bitch cunt started and so when I went to sign up I was told I could get no financial aid of any kind till my defaulted student loan was repaid in full, I had not even been notified it was considered in default. 

Never sign a student loan agreement.  Never, not ever, if you need a student loan than you are by definition too poor to go to college and a degree is not going to get most people into the upper class, or even middle class today.  Those with college degree who do well are mostly people who were already wealthy enough not to need a student loan, a degree might be required for a job but you will be working for someone that did not need that loan.  And I might add that even with the degree in finance the most I ever made was $45k a year anyway.  Everybody I knew in any job I held that made more did so because they were related to or their dads were friends of their bosses.  Some people get ahead for various reasons but the degree was not one of those reasons.  I have seen really HOT people get ahead just because they were HOT, and yeah they had a degree, from some online university.  I have had bosses that were younger and clearly never read a newspaper in their lives, could not find Canada on the map, thought Latin was a type of dance music, and came to work still stoned from the night before, Daddy bought their degree and his golfing buddy was on the board. 

Oh by the way, thanks America for the $3,737 per month tax free you pay me with zero cost health care.  Even if I could I would never work in this corrupt formerly great nation again.  Let the billionaires and their bootlicking trailer trash run the place for a while, when your kids die of cholera give me a jingle and I will see what I can do to fix YOUR problems, or NOT!

Wed, 03/07/2012 - 21:58 | 2234465 yogibear
yogibear's picture

Let us look at the bubbles...

- The DOTCOMs. - It blew up!

- Housing - It Blew up!

- Student Loans - About ready to go Kaboom...

- US government debt (Transferred from the criminal banksters (real estate)  to the taxpayer). - When it blows it will be epic.

Wed, 03/07/2012 - 22:10 | 2234475 boiltherich
boiltherich's picture

I would like to tell you my story regarding college and a student loan, but it would be too long.  What I will say is that through zero fault of my own I became past due on a student loan in 1988 (by days) and there was no place to turn.  The US Department of Education was ostensibly the holder of the loan and main creditor, but there was no contact number, no office you could call to get matters fixed.  It was black and white, you sign that paper and your life is not your own, you can't even give up and discharge it in bankruptcy because the government treats it like a tax liability rather than a loan.  It took till 1999 to get the problem fixed and the whole time it was keeping my credit score under 600. 

I tell people, anyone that will listen, if your student financial aid package has to include a student loan you are better off learning a trade, being a truck driver, even a barista at Starfucks.  You have no idea how easily you can be placed in default of a student loan and once your name is on that paper you have NO rights.  I did not get a tax refund for 11 years.  I could not get a credit card most of my adult life.  I paid higher car insurance premiums, I could not rent a car or get on a plane (think about all that life has that is only available to people with good credit) not to mention you are not eligible for any government benefits till the debt is paid off.  And in the end after all that I was only able to get out from under by paying the full amount borrowed (a mere 2,200 bucks but try paying that off when you are dirt poor and have no credit and they are really good at keeping you that way) with what amounts to 20% annual interest.

And I COULD have sued the college that did this to me, if I had a lot of money and or good credit. 

If you ever sign a student loan document then you have more to learn about life than any college can possibly teach you.

Thu, 03/08/2012 - 00:06 | 2234703 Dingleberry
Dingleberry's picture

Well said. The banks are just praying that you miss a payment by a day, and then the REAL "preying" beigns. Credit scores are an essential part of life now. You hit the  main points. I would point out that it is very hard to rent a place (forget about buying) with a shitty credit score. Educate the young about this shit. It is our only hope.

Thu, 03/08/2012 - 02:10 | 2234966 boiltherich
boiltherich's picture

Yeah, I coined the term creditocracy in the 90s but it never caught on. 

Wed, 03/07/2012 - 22:22 | 2234501 Heroic Couplet
Heroic Couplet's picture

Republican tax cuts do not create jobs in the US, given the advent of offshoring. Some Republicans have to actually be unemployed for the long term before they figure it out, and I remind them the Bush tax cuts have been in place, unaltered, for 11 years. Where are the US jobs? The jobs sent offshore are not coming back and they're not being replace.

Republican in my state voted to keep student loans separate from bankruptcy proceedings, so Republicans in the US Congress are definitely on the take from finance sector lobbyists.

If you are part of the "consumer credit bubble" and you're Republican, you brought it on yourself, that's the only good part about the bubble. Take your complaints to your Republican Members of Congress.

Thu, 03/08/2012 - 11:56 | 2236079 DaveA
DaveA's picture

Men who are unemployable because of addiction or serious mental illness often enroll in no-name community colleges, get student loans, and live off the stipends. The schools don't care; it's all free money to them.

With a student body that is 70% female, our colleges have become expensive finishing schools. After the dollar collapses, they will be inexpensive brothels. Not a big difference, actually.

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