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Genesis Posts: 66462 Incept: 2007-06-26 
Royal Flush! 
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http://market-ticker.denninger.net/archi....
---------- I used to play flute; I wonder if I can play a fife? I incite prosecutors to create "Bubba Sausage Parking Lot" projects Darrell Issa has a middle finger and knows how to use it - Me 2008-08-04 10:02:13
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Bozonian Posts: 13051 Incept: 2007-09-01 
PFT - Pure F'n Tin
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A wise man once told me, "If you want to succeed, find out what the average human does, and do the exact opposite". So far it's worked out pretty well for me. Ok, so I haven't exactly followed that rule 100% of the time but I have quite a bit. The reason I'm saying that is that conventional wisdom had people going into debt, cars, homes and education. These people are royally screwed now. How'd you like to be coming out of college with 30k of debt (almost the minimum) into a deflationary environment with jobs going away and that debt that YOU CANNOT DISCHARGE WITH BANKRUPTCY?. HOLY ****! ---------- If deficits don't matter, then the Federal Government can borrow the money it needs and stop taxing the citizens. Everything I write is my opinion and not to be considered proven fact. Nothing I write should be considered financial advice. Last modified:
2008-08-04 10:10:48 by bozonian
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Truthseeker Posts: 1883 Incept: 2007-10-07
NW US
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Quote:The underlying fallacy here is that the government (or anyone for that matter) can prevent these defaults and damage. This is false, because the damage to the economy and the losses have already happened. They occurred when the bad loans were made; we are now arguing over when they will be recognized and upon whom they will fall, not whether or not the loss will take place. Bingo! Some (many) will only see this AFTER the cascade event. But it is certainly true today. ---------- "The remarkable persistence of the rally pales in comparison to the confidence of those people who had no idea there was anything wrong with the global financial system 2 years ago - and who now proclaim that everything has been fixed." " ~ Jeff Cooper@Minyanville 2008-08-04 10:12:56
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Bluntfacts Posts: 693 Incept: 2007-10-09 Las Vegas, Nevada
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Excellent Ticker for 8/4/08 Here is an item from the real world: my friends in Arizona. They did what was asked and got current on their home. Now they just got a jolt of reality. The new "restructured" loan is a 37 year at a mere 9.75% APR. Net effect is that their monthly went down $200. Payment one is due 9/1/08. They don't have the money. ---------- "Will someone come on TV and tell the truth about how bad it is". Jim Cramer August 2007. "We can change the focus to a soft blur; or sharpen it to crystal clarity" The Outer Limits 1964. 2008-08-04 10:24:31
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Guydaley Posts: 10361 Incept: 2007-07-10 
Missouri & Wyoming
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Amen!
---------- 2/17/09 = Hogzilla bill was signed = THE POINT OF NO RETURN = Cheers to the Reset, LONG LIVE THE UNDERGROUND ECONOMY! STARVE the BEAST! Adopt a J6P. 2008-08-04 10:28:57
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Leraconteur Posts: 7189 Incept: 2007-12-03
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"How'd you like to be coming out of college with 30k of debt (almost the minimum) into a deflationary environment with jobs going away and that debt that YOU CANNOT DISCHARGE WITH BANKRUPTCY?." More like hundred's of thousands. Go to a typical 4-year state school, that's $45k. Top Tier, that's $160,000. Then professional school, add another $200,000. Students walk out of Uni with a degree and a mortgage on a Socal house, and they cannot discharge those debts, ever. Great way to shackle them to a lifetime of debt servitude. They cannot leave the country (as they must earn the big bucks the USA offers), they must work, they cannot take it easy, go on sabbatical, extended holiday. Good for tax revenues, bad for social health. Last modified:
2008-08-04 10:38:44 by leraconteur
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Darknight Posts: 3293 Incept: 2007-08-10
The Wicked Forrest
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Blunt, tell them to ask for a 6% mod or they'll have to walk. Might just work...
---------- The price of apathy towards public affairs is to be ruled by evil men. - Plato 2008-08-04 10:33:44
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Bear Posts: 6466 Incept: 2007-07-10
SoCal, and my avatar is so ****ing small you cant see it
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Who the hell can get out of college with "ONLY" 30 K in debt ? I couldn't do that for less than almost 50K almost 30yrs ago....I would bet the number is a hell of a lot more than 30K upon graduation....or more correctly called Grad-e-a-shun ---------- Cause GS got all the beef.....Mliu 2008-08-04 10:42:25
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Wisc-xc Posts: 4479 Incept: 2007-07-14
outside chicago
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College costs have grown at an unreasonable and unsustainable rate, fueled by - you guessed it - cheap credit. As a consequence our young people come out of college with levels of debt never before seen - an especially cruel bit of exploitation by the "ivory tower jackoffs" who are, of course, those who do their damndest to indoctrinate those very same young people - and their employers. My nephew from LaGrange, Il. starts his term at Indiana Univ this fall. Tuition alone is $35,000 per year. There's an unsustainable bubble for you. He wants to be a teacher. Talk about future debt slavery. For that kind of scratch I hope they offer courses in common sense. If Matt Damon's character in Good Will Hunting is reading this he's likely falling all over himself with laughter. 2008-08-04 11:08:59
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Bozonian Posts: 13051 Incept: 2007-09-01
PFT - Pure F'n Tin
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Damn! I, me, the great bear Bozonian actually underestimated some bad news! What's this world coming to?
---------- If deficits don't matter, then the Federal Government can borrow the money it needs and stop taxing the citizens. Everything I write is my opinion and not to be considered proven fact. Nothing I write should be considered financial advice. 2008-08-04 11:12:24
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Guydaley Posts: 10361 Incept: 2007-07-10
Missouri & Wyoming
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All depends on how you want to handle education. If government and sucker parents are going to foot the bill, money is no object. If the student is footing the bill, well then there are plenty of options. I got a bunch of credits from community college of the Air Force for two tech school trainings, I tested for another big pile of credit, then went to community college. Graduated in a year, receiving the OLD GI bill. Got a letter from VA saying, either you use or you LOSE your GI bill if you don't use it by a certain date. Went to The Evergreen State College in Olympia, graduated in another year, because of all the testing credit and credit from the Air Force plus a community college degree. College = zero debt Now females on the other hand have it REALLY easy. Few go out for sports and there are a zillion sports scholarships they could try out for. ---------- 2/17/09 = Hogzilla bill was signed = THE POINT OF NO RETURN = Cheers to the Reset, LONG LIVE THE UNDERGROUND ECONOMY! STARVE the BEAST! Adopt a J6P. 2008-08-04 11:13:20
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Genesis Posts: 66462 Incept: 2007-06-26
Royal Flush!
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College, when funded by debt, has never been as poor an investment as it is now. For many fields it has a negative rate of real return over a person's entire employment LIFE! There are ways to manage this problem, but the standard "go for 4 years to a high quality school" leaves you permanently impaired in terms of your total life-cycle costs and potential benefits. Not good. ---------- I used to play flute; I wonder if I can play a fife? I incite prosecutors to create "Bubba Sausage Parking Lot" projects Darrell Issa has a middle finger and knows how to use it - Me 2008-08-04 11:13:28
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Weezie Posts: 3420 Incept: 2008-05-19
Now shuddap and take your medicine...
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Quote:College costs have grown at an unreasonable and unsustainable rate, fueled by - you guessed it - cheap credit. Then, add in the fact that anyone with a pulse can get into 'college' and you get prices skyrocketing. "Culinary school" is $50K (two year program) - now tell me that any kid fresh out of that school is going to be able to pay on a $50K loan at 12% interest on a restaurant kitchen worker salary. On another note, I had neighbors file for bankruptcy last year. Nice folks, but simply stupid with money. (They had me over about 18 months before their bankruptcy and I gave them some advice, which they either ignored or did the exact opposite... sigh...) The bankruptcy discharged some of their debts and they got into a repayment plan. However, if they make more money (raise, bonuses, etc.), that money goes to the amount that was discharged, not towards the repayment plan. (I personally don't agree with bankruptcy except in extreme cases, such as medical catastrophes, but it certainly appears that bankruptcy isn't the "great deal" it used to be.) ---------- The government isn't ****ing Santa Claus! 2008-08-04 11:15:15
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Matt_bear Posts: 1788 Incept: 2008-07-15
a week early on spy puts
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College has to be viewed just like trading stock....you short it. (kidding) Game plan going and out. Gen is right, college funded with debt is just no good. I went to the in-state university, got out in 4 years by going full time and taking advantage of the subsidized in-state tuition rate and scholarships. Waited on grad school and joined the working world first. Put my year in with the company, and it opened me up to company tuition reimbursement for my MBA. Now I'm 4 months away from graduating with my MBA (both degrees from FSU). I've got 5k on my credit card with a $2800 check coming in 2 weeks and another one after the end of my last semester. Voila, Bachelors and MBA with no debt. 2008-08-04 11:33:30
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Steelpiston71 Posts: 1804 Incept: 2007-09-05 Michigan
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I went to a cheaper university, and by working some and getting some scholarships and grants, I got my BS in 1994 with only 12k in Stafford Loans. If your parents work at this university, you get 12 free credit hrs per semester.
---------- "The Data Do Not Lie", Mr Mortgage (aka Hedgefundmanip), April 16th March Foreclosure Crisis Video. 2008-08-04 11:43:49
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Stormrunner Posts: 106 Incept: 2008-01-29 OC CA
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Genesis http://www.investorsinsight.com/blogs/jo.... Mind you I like Mauldin but this PIMCO PIMP, the "paradox of thrift...and of deleveraging" and the "States" mandate for the good of the citizenry to counter deflation with intervention, what a crock. This **** is so plausible superficially as to make sense till one realizes that the leveraging was about theft and nothing else. $500k loans to burger flippers to buy shacks, to generate fees and commisions while robbing the accumulated wealth of a nation. It would seem that the critical thinking skills of the nation are taking us exactly to that place where the meat hits the grinder. 2008-08-04 11:57:56
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Gamma Posts: 1702 Incept: 2008-01-20
Northern CA
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"The new "restructured" loan is a 37 year at a mere 9.75% APR. Net effect is that their monthly went down $200. Payment one is due 9/1/08. They don't have the money" Holy crap! ---------- It's better to donate a Ford to the Kidney Foundation than a Kidney to the Ford Foundation. 2008-08-04 11:58:49
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Genesis Posts: 66462 Incept: 2007-06-26
Royal Flush!
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Storm - yeah, I saw that. It ain't gonna work, and the "London Banker" article explains why (or you could have just read The Ticker for the last year!) ---------- I used to play flute; I wonder if I can play a fife? I incite prosecutors to create "Bubba Sausage Parking Lot" projects Darrell Issa has a middle finger and knows how to use it - Me 2008-08-04 12:01:20
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Leraconteur Posts: 7189 Incept: 2007-12-03
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I went to a state school in 1979-1983. My annual costs including books, room, board and tuition were...wait for it... $1,906.oo. Total. Per year, with 3 academic quarters. That's $635.34/academic quarter. Those are not typos. Less than $8,000 for my education. My loan was $49.15 for 120 months. When I speak with my gifted niece, I am very reluctant to say she should just go into massive debt to go to school. She is taking college classes now (at 14) and will be going to Ginormous Expensive University. 2008-08-04 12:05:27
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Sharon Posts: 1495 Incept: 2008-02-10
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My guess is that, down the road, defaults on student loans will be massive. The economy is headed into the crapper--and, frankly, this level of debt doesn't make sense even if we were heading into boom times. The income a college grad can expect to earn--if he/she can get a job at all--will in no way be sufficient to pay off their loans, unless they've managed to keep their debt levels very low. Since student loans can't be written off in a bankruptcy, you have to ask yourself what this means. Naturally, it means different things for different people. This kind of debt is similar to the kind of debt that "deadbeat dads" get into, in child-support cases--only worse. Child-support debt is also not dischargeable in bankruptcy. Probably we all know--or know of--guys who fathered two or three kids by the time they were 20 and discovered at some point in their early 20s that they owed tens of thousands in back child-support. Or, guys who evaded paying child-support until their kids were almost grown, and found, due to the wheels of law grinding so slowly, that they were about to get ground very fine. As with massive child-support debt, I think similar tactics will be employed to avoid paying student-loan debt. Some people, of course, just pay it. Most people find a way to dodge all or part of it. What we're about to see is a whole generation of young people whose chief aim in the arrangement of their lifestyles will be to avoid debt repayment. Since most people on this board are "normal" people, you may be unfamiliar with how this is done. What you see is a shift towards "under-the-table" income arrangements. The debtor earns the majority of his/her income "off the books." Self employment with a very low reported income is popular. Then you have people who change their residence frequently. Anyone who went into massive debt in order to qualify for a job that doesn't pay enough to pay off their student loans is probably looking at debt-dodging as the chief focus of their adult life. This probably means there will be an immense shift in the way the whole US economy operates--namely, a shift towards a black-market economy. This will have a negative effect on tax receipts. Maybe a "black market", "cash-and-carry" type of economy is coming anyway. The only jobs that pay much of anything are in the public sector--or derive, one way or another, from the public sector (such as medicine)--and we already know this isn't sustainable. We may be looking at a whole generation of people in which a big segment have no bank accounts, no visible means of support, and, in some cases, no permanent address--people who have "disappeared" themselves. 2008-08-04 12:13:15
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Genesis Posts: 66462 Incept: 2007-06-26
Royal Flush!
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No, the usual game for evading judgements like this (Garnishments) is that you hop jobs. It takes 3-6 months for them to "find" you and hit the new employer with a garnishment order, at which point you quit and go get a different job. We had a fair number of people when I ran my company who were hit with garnishments and quit the next day. This will get worse, but it doesn't necessarily force people under the table - it just forces them to hop jobs, and they both can and will. ---------- I used to play flute; I wonder if I can play a fife? I incite prosecutors to create "Bubba Sausage Parking Lot" projects Darrell Issa has a middle finger and knows how to use it - Me 2008-08-04 12:16:22
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Stormrunner Posts: 106 Incept: 2008-01-29 OC CA
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It’s just amazing how an "academic" can apply logic to make theft appear as if it is just a consequence of a cyclic reality that dilution is the best answer toward solving as opposed to INCARCERATION. If this is what is being taught in our universities then pricing them past the point of mainstream affordability is likely a "good thing", as this attitude toward the rationalization of unethical wealth redistribution likely bleeds into every facet of the curriculum, the new paradigm of American Business ethics.
2008-08-04 12:27:20
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Eternalblue Posts: 3879 Incept: 2007-08-09
sokali
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imo some of the rapid increases in tuition costs, atleast for state schools, is again because of out of control state spending. atleast in CA, every time the state runs out of money, school budgets get cut, which inevitably causes tuition to increase. Of course the cost of tuition never goes back down. ---------- all pullbacks are bear traps 2008-08-04 12:27:46
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Sharon Posts: 1495 Incept: 2008-02-10
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Gen, there are many strategies, and some of them are rather extreme. I know a woman who avoided going back to jail for breaking probation (on a drug charge) for nearly ten years. She found guys who would support her (and her son), and worked off the books. One of the more interesting asides to this story is that her son never attended school. If she had enrolled her son in school, the authorities would have been able to locate her. I'm dead serious here. This child literally never attended school past, maybe, third grade. He's now grown. Mom finally turned herself in and did her time, and is now employed. One guy I know is employed as a plumber, but earns most of his income "on the side." My ex kept his child-support obligations minimal, through self-employment. Reported income was (probably) far lower than real income. The business was incorporated, and he paid himself a very low wage. Assets were also mostly hidden in corporations. One reason I'm familiar with debt-dodging is, being female, many of my acquaintances have "deadbeat dads," so I hear a lot of stories. Some of the indebted have good accountants and smart lawyers; others must get by on their wits. 2008-08-04 12:30:11
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Genesis Posts: 66462 Incept: 2007-06-26
Royal Flush!
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There are plenty of "deadbeat Moms" too Sharon, and they're just as devious if not more so. I have worked this issue for more than a decade; painting this as some sort of gender-biased thing is only because judges give the kids to Mommy a huge percentage of the time, even if she's demonstrably less fit. Oh, and when Moms do get hit with support judgements? They default at a rate twice that of Dads in terms of percentages. Yes, really. ---------- I used to play flute; I wonder if I can play a fife? I incite prosecutors to create "Bubba Sausage Parking Lot" projects Darrell Issa has a middle finger and knows how to use it - Me 2008-08-04 12:34:28
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