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Name The Bubble
As the title suggests, please name the latest bubble:
If you said student loans, you were correct. What is curious is that while virtually everyone has known about the student loan bubble in recent quarters, it is only for the past 3 that the Fed has actually started to disclose this data in its consumer loan excel spreadsheet (link - page 3). For historical data prior to 2011 we had to pull Bloomberg data (TDBCSTUD Index) going back to 1999. Perhaps the recent astronomical jump is why the Fed has been keeping a tight lip on this data...
And for those to whom this is news, here are some thoughts on the matter from before.
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That jump was the result of the gubermint taking over the student loan "business" from crony capitalists, err, private lenders.
Heh - step right up and get suckered in...http://pymnts.com/news/businesswire-feed/2012/february/27/sallie-mae-enc...
Thanks - I was wondering about that. Is it documented anywhere? (Couldn't find it mentioned in your link)
you might want to consider "what if"
it pops
This mental exercise, implemented correctly helped the unemployed dotcommer in 2002 and the mortgage broker in 2009.
Personally, I can't wait for this implosion. It is disgusting that universities have gouged folks just cuz they can. Next thing you know, I'll figure out that the medical profession has done this, too!! ;)
repent. save your money. invest it wisely in a post bubble pop world.
Everyone sees the scam, but few look into where the money is going. I will give a few stats that are accurate (they are from US govt surveys). This is a side project I was researching a bit in late 2011:
Number of students in 2000: 15,312 (in thousands) Average Tuition: $10,818 per year
Number of students in 2009: 20,427 (in thousands) Average Tuition: $17,633 per year
Student Increase: 33%
Tuition Increase: 63%
Number of colleges in 2000: 6,479
Number of colleges in 2009: 6,632
Increase: 2.3%
College teachers in 2000: ~1,113,000 - included grad students who teach
College teachers in 2009: ~1,439,000 - included grad students who teach
Increase: 29%
The number of students and the rate of increase in tuition far outpaces the growth of professors/teachers. The number of colleges (new) is very low.
If you do a little math, you arrive at the following:
Average revenue per Professor in 2000: $148,827
Average revenue per Professor in 2009: $250,305
INCREASE: 68%
One can logically assume that the average college professor is not earning 68% more than in the year 2000. Where does this money go?? This is excusionary of any fundraising by the schools for anything else - sports, private donors etc. Also, the number of "teachers" includes grad students, who basically act as slaves and are paid very very little.
I would guess most of this extra money goes to the adminitrators of the schools who pay themselves fat salaries. I would also guess it goes to endless building projects that are not needed.
The number of teachers increased about the same percent as the number of students - so its not a supply/demand issue exactly.
Inevtiably the money is going to lead back to the banks that make the loans which are backstopped by the US Govt and made non-dismissable in bankruptcy court.
Administrators getting paid fat salaries so they keep the gravy train going till it has run it's full course. Nothing greases the skids like a rock-star lifestyle.
The system runs on debt. Debt must be demanded by the public in order for the system to continue. This is the last major credit bubble and it looks like it is starting to roll over.
Administrative staff changes?
I read somewhere last year that overall staff on campus has been skyrocketing the last ten years. Perhaps that is where they are spending some of that money?
Good post but are you sure about the salaries going to Admins?
http://www.collegiatetimes.com/databases/salaries/university-of-florida
Amero???
Cobra!
http://www.40ozmaltliquor.com/archive/kingcobra.html
Apple looks pretty bubblicious to me...
DavidC
The Loch Ness Bubble.
Assange For President
http://wikileaks.org/gifiles/attach/17/17225_Stratfor%20Servi.pdf
take are ride on the "real" side… If you dare.
The rabbit hole we go !
If people can't make a living working...what else do you expect them to do. Of course they are going to make a living by going to back to school.
Do Not Go Gentle Into That Good Night
Nice wave...Serfs up!
I wouldn't worry too much about it
www.marketblip.com
I said Government Bonds.
And when the dollar is worth .00000000000000000001 oz. of gold you can pay this whole shit off for four bits.
All you need to do is buy more gold.
The fed won't be able to sell their gold forever to keep gold prices down. The more money they print the more gold they gotta sell.
You mean I get to be a debt serf! Oh Goodie!
"Seven years of college, down the drain."
That line would not get nearly as many laughs today.
7.5. Never made one single penny off of all that brain busting.
Stock market?
YES WE CAN!
Hopefully all those students are pursuing degrees in (neo-Keynesian) economics - the finest, most important, and most valuable science available to our society and our most powerful tool for rebuilding the economy after it was nearly destroyed by the unfettered Capitalism of Wall Street and the ineffective non-interventionist policies of Washington.
I think I can speak for my fellow sensible and enlightened contributors such as RobotTrader, MillionDollarBonus, and HamyWanger when I say that - if these young students strive to emulate such modern economic luminaries as Paul Volcker, Alan Greenspan, Ben Bernanke, Tim Geithner, Larry Summers, and Paul Krugman - our future will be bright indeed.
One of these does not belong with the others.
They're all functionally retarded high-priests of Ivy League Voodoonomics who salivate like Pavlov's dogs at the sight of the letters "Ctrl P".
Purposely ommitting the /sarc flag may have been a miscalculation on my part.
But but but EDUCATION IS THE KEY!!!!
I have a question. Does that mean we actually want to make people smarter? Or does that mean we want to use the promise of better opportunities to get kids running on the debt treadmill ASAP?
If there's one thing in this world we could dramatically bend the cost curve on it's education (and by "education," I mean actually making people more intelligent). Video lectures, books produce without any printing costs.
Because we've got one nasty feedback loop running right now. Encourage kids to borrow money (backed by the US government, of course), then give them over-paid government jobs to pay back their student loans (livin'n the dream), so it appears the system works....then ask for more education money....
Anybody else see where this is going?
Live off the government and gain Obama's carbon credits. One less person in the US driving means being more green. LOL, Unemploy everyone and there will be a lot less pollution in the US.
As long as the book is: "How to be a Corporate lobbyist."
Awesome.
Skilled labourer for a newly re-shored job can expect to make $20k-$25K and no benefits. He/she goes to technical school and graduates with $15k-20k in student loans.
For the honor of re-shoring those jobs, very profitable companies get federal, state, and city tax breaks. Which makes them more profitable. How do executives get bonused:profitability.
As living standards for the bottom 80% get squeezed, social stability will suffer. Count on it.
Million Dollar Boner is a Libertarian masquerading as a Socialist troll.....it's just his schtick to annoy and motivate the troops ! He has perceived a need and invented a perverse and dysfunctional cheerleading role for himself ! It's kind of like what I do but not as clever and entertaining and open ! Monedas 2012 Comedy Jihad World Tour
Disgusting, and BAC will get every penny back even to the grave from our young citizens.
Not even a Trillion dollars? WTF kind of bubble is that? .... a puppy shit bubble?
Compared to gold over the past decade, student loans seem flat...
Is it the amount of FHA loans currently outstanding?
iBubble
I would love to see that same chart plotted against tuition costs, the thesis being that cost inflation is due to access to credit.
bunch of 22 YO deadbeats !......../sarc
While I find the exchange of ideas on this thread as fascinating as any at ZH (and FAR more stimulating than any stale discussion in the average college class taught by some in-grown, solipsistic and WAY past their sell-by date prof), I'd still like to say that not all the college-age kids caught up in this mess are morons. It's easy to judge when you haven't been brought up in this generation.
And honestly, all I think that matters is WAKING UP. This is especially poignant as I currently work at a college and let me tell you, I see so many KIDS (I mean 18-21) that are really nothing more than lambs to the slaughter. I just can't find it in me to laugh at them or wrap myself in some hubristic "told ya so!" affect. If anything, I feel profoundly sad. Profoundly sad because no kid deserves this, and when you're 18, unless you've had the privilege of having parents who saw through this con crystal clear (mine didn't), then you're in for a world of hurt. And by the way: you don't have to be stupid to buy the con. What people don't realize is many of these bubbles are emotional and hijack our IQs, no matter how formidable those IQs may be.
I am waking up. I cannot convey in type how harrowing and painful it has been, but believe me, it has been. Humbled does not cover it. But again, I AM waking up. I honsetly think it's the best anyone of my generation can do. I do everything I can to cut my personal expenses (never owned a cell phone, don't have cable TV, don't buy all kinds of CDs/DVDs/I-stuff, cook my meals whenever I can). I've never drank, smoked, or done any drugs (never been high or drunk) -- BOY does that cut down on monthly expenses! My credit card balance is near zero and my credit score is over 750 so my loan interest is the lowest it can be. Finally, I am now learning what it truly means to have marketable skills and to be useful to your employer in their time of need/short-staffing. I've never been NEEDED before until my current job, and it feels GREAT! It's something college never taught me about or prepared me about.
I've also managed to taper off my antidepresant to save $100/mo as well. And before you go and say I'm an idiot for taking "happy pills" -- think again. I was dosed with SSRIs since age 14 because it was all the rage then for doctors to prescribe antidepressants to kids because they were considered "safe and effective." Yeah, go read the debacle that is the Paxil 329 study: http://psychcentral.com/blog/archives/2008/04/30/more-on-infamous-paxil-... or anything on http://1boringoldman.com to learn of the mind-boggling levels of corruption in psychiatry, much of it aimed at children. In hindsight, I didn't even need the meds (it was simply situational anxiety that would have cleared up in time, of that I'm certain), but psychiatry thought otherwise. I tried to get off the SSRIs back when I was 16 but couldn't because my psychiatrist's tapering regimen was too fast and I felt like my brain was in a frying pan and was bedridden for days. His response to my complaints? "Go back on the med." Yeah, if you think it's bad being enslaved to debt, try being enslaved to a pill you didn't even have to be on in the first place that has unknown long-term side effects and is a total sex drive killer (not so hot for a young man). If not for google and message board support groups, I would never have found a tapering regimen that worked for me. Wrap your head around THAT.
I personally think it all goes back to the post-WWII era. Back then, it was considered an honor to get into college because the admittance requirements were stricter. Back then, college degrees were rarer and commanded more respect and earning power. Naturally, every parent wanted this for their child since it was such a clear-cut path to prestige and middle-class income. So the government, over a period of decades, responded to this (misguided) demand from the public that every kid deserves a college education so that politicians could get their votes. Now of course we reap what we sow: the college grad market is saturated (how could it not be?) and college is obscenely overpriced (how could it not be with so much loan cash chasing an overly valued commodity?).
It's the same issue with the housing bubble: the post-war suburban boom was a heady time of real estate development and a nation over-eager to go to work and forget the horrors of war. Houses were going up fast, and families could afford them on a single middle class income. Owning a house became the American dream. So, naturally, we didn't want to let a good thing go and forced the American Dream to stay alive through issuing more and more debt to people who had no financial means to own a home so they too could "afford" the American dream.
Yeah, politicians are definitely to blame, but so is all of society for clinging to this ideal whose time has passed. It's the clinging that causes so much pain. If we could have just admitted to ourselves that it's not the end of the world if every kid doesn't go to college and not everyone can own a house, then we'd be a lot better off.
To sum up: As Carl Sagan said about people who still believed in superstition/the paranormal over scientific proof: "No one is born fully equipped." That is, no one is born fully equipped with all the right knowledge. It's just massively unfortunate that my generation came of age in a time of such radiant corruption and will pay so dearly for the "crime" of not being fully equipped.
And remember: it's entirely possible to be right AND still have a heart.
Taper off and end the SSRI. It is a brain killer. But follow honest medical advice. Don't drink tap water with flouride. You will get better, stick it out. My wife suggested the same for our son back then, I refused to allow anything like that. Thank God.
Best to you, you can do it!
College kids are not stupid for getting an education and taking out loans. They're stupid for continuing to give radical support to the stupid and dangerous ideas that are abusing all of us in the first place.
Yes, the college kids are now sheep to be sheared, over and over again for the rest of their lives. As Larry Sinclair recently remarked about economic events of recent months on both sides of the Atlantic, "Our children are now being marched up to sign all the loan obligations."
It's not like there haven't been people who have tried to go to college campuses over the years to warn the kids about such things, but they were censored, boycotted, attacked, shouted down and called intolerant "haters," and "greedy" free market capitalists, just for not wanting the crony government to take over the entire economy.
Don't believe? Then just try organizing a "Small Government, Free Market Capitalist" group on campus. Then watch out as the marxist, socialist, muslim, and environmental wackjob groups on campus make threats, throw Molotov cocktails, censor you, try to shut you down and kick you off campus with the help of the adminstration and staff.
Until they grow up, most students will continue to be their own worst enemies. They're still kids and don't know any better.
Absolutely brilliant post!
Indeed Mark, indeed.
God bless you.
Mega Double Trouble greenspan bernack crackerhead top deafing Supernova Kaboom !!! S&P soon to drop to 444... Oh the humanity !
So predatory debt is rocketing up on the vulnerable, what else is new?
This is all another fucking racket to bail out banks! You heard it here first. Mark this post.
Where is my banner... oh here it is:
MISSION ACCOMPLISHED!
Not surprising. It looks like the Chinese construction bubble around the typical university campus. They can't build fast enough at OU here in Norman.
it's a common misconception that bubbles always burst
www.marketblip.com
AAPL pie
An excellent website on the abusive lending, along with testimonials...
http://studentloanjustice.org/
Say, that's a lot of education right there. So where's all our highly paid PhDs? Surely they'll be boosting the economy and paying enough taxes to bail us out of this mess. And with the interest on those sudent loans we will make billions for the treasury! Just like the bank bailouts --- Win win win!
Back in the early 80's my wife and I had 26000 in student loans and paid it off with no problem. That's 60,000 in todays dollars. todays kids should stop their whining and pay off their debt. bunch a babies
Your wife paid it off because she rode a credit and cheap oil boom, so whatever work she did could carry the cost of the interest. Not because she was particularly talented or hard working.
Have kids? Look them in the eye and repeat that comment to them.
I have no student loan debt myself, but my sympathies are with the young and healthy who are being hoodwinked into debt servitude, and not with the disgusting, corrupt geezers who make up the establishment of American finance that pushed this debt onto them.
WOOHOO!!! I got it right!! :-P
Oddly enough, the graph of student loan debt is starting to resemble not a power function but an arctangent function which is shifted up and to the right.
This just in
Shrines protected from Pussy Riot
http://rt.com/art-and-culture/news/pussy-riot-church-cossacks-297/
.
Will Hunting (Matt Damon): You dropped a hundred and fifty grand on a education you coulda got for a dollar fifty in late charges at the public library
Read more: http://www.quotesquotations.com/movies/good-will-hunting-quotes/#ixzz1ncYGbs28
Cheap ez money to students...they are young and naive...they buy stereos, tv's and cars along with paying for their education. Then they graduate and can't find a job because of an economy that had beenseverely damaged by smart bankers making loanswith other peoples money that should never had been made. There is no escaping the student trap, no bankruptcy protection...perhaps if there had been bk protection the banks would nevre have made these loans. Welcome to indentured servitude. We arrest drug dealers, why not bankers? How are they different these days? What once was a fairly honest profession has become a way to rip off the world.
What has happened is that commercial America has marketed this concept of "the American Dream (TM)." They created this artificial construct so that people would go out and spend money on major items because they are part of "the American Dream (TM)." A nice car, a big house, an expensive education, etc. Then, as people found they couldn't afford "the American Dream (TM)," they began to finance the purchases they needed to make in order to achieve "the American Dream (TM)." As financing these purchases became more and more popular, people were told that these were "good debts." Well, at the end of the day, a debt is a debt. Most people are finding this out the hard way. Bill collectors will come after you the same if you owe $100,000 for student loan debt or $100,000 for a ridiculously large boom box. But now it's too late. People have incurred these debts, and only after the fact have they learned that there is no "good debt," as they were told. And the banks are bleeding Americans dry with these burdensome debts. It is decimating our nation.
You can discharge the boom box debt in BK, but not your student loan debt. That shit's like herpes!
I was thinking Viagra sales for those on food stamps. Ok, viagra sales for those who have student loans.
http://vegasxau.blogspot.com
Money going into equities from retail investors?
"The fact that we are approaching $1 trillion in student loan debt is staggering."
http://www.doctorhousingbubble.com/subprime-colleges-student-loan-debt-n...
Here's and idea.........send all your unemployed to college and hey presto no more unemployed!!!!
The entire education paradigm is under fire. Once education becomes less costly to produce and more professors lose their jobs due to technology and competition, the costs will go down. This is that last push of the education machine to fill their pockets. They have been hiring the same people to sell education loans that were pushing subprime loans. Yet again, manipulation of the masses. What the heck are people paying tens/hundreds of thousands for? So they can say they went to Ivy League and get a golden spoon? Fluff.
Where is the first place students turn to when they have a question? Google/Yahoo/MSN... Why pay for a teacher? To get that damn peace of paper, which doesn't count for much anymore. Another obsolete institution propped up by Uncle Scam.
What we really need in this country is a quadrupole of food stamps payments. Mine are not feeding me till the end of the month and I really don't want to revert back to eating liver again. Too many people are now toxic, so i have to chain them in the basement and flush em with filtered water for a fvkin month before i can get the smell and nasty green shit out of the meat. More food stamps would really help out.. Poor humans..sheesh
I am an instructor for an institution of higher learning (at least that's what it used to be called). The past few years have very odd to say the least. Jobless and even homeless students are flooding in with very little or possibly no interest in learning anything. It is very clear that student loans have morphed into some perverse form of welfare. If you wanted me to guess what percent have any intention of repaying the loan, I might say half. If you wanted me to guess how many understand how these loans will affect them later, I might say 1 in20! (I'm an optimist)
Perpetual forbearance is the name of the game.
the bubble will be when you tell us it is...
Train - Drops of Jupiter (ACOUSTIC LIVE!)
This is bullish for foodstamps, psychological councelling and serfdom.
i've noticed there are a lot of trivial comments here
who cares about the bubble, it's more about the blip!
www.marketblip.com
Besides, that chart doesnt much look like a bubble chart... even my granny could tell that
www.marketblip.com
you spammin piece of shit..why dont you fvk off and die?
I only guessed right because i had seen a similar chart before:
http://captaincapitalism.blogspot.com/2011/11/big-education-reaches-1-tr...
Though his data come from the NIPA accounts.
Avoid Lifestyle Adjustments Bubble
The economy is diseased and every central bank on the planet is pretending to be an epidemiologist! Only, nobody can actually fix the problem no matter how much money they print!
Shadow bailout of the education system much?
Government guarantess implode the housing market and education, but still there are plenty of morons wh praise Obamacare as a panacea, despite following the exact same template: price support as "increasing access", private companies operating as quasi-government agencies (but with even less oversight), no actual single system, so those who can afford it (mostly those on the sell-side of the equation, of course) can still get the best care (now with improved taxpayer subsidies!) and no competition, because what's the point of shopping around when somebody else will eventually pick up the the tab?