Posts Tagged ‘debt’

Student Loan #Debt Getting Presidential Treatment

Posted: June 8, 2014 in Excess and Algorithms
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by @anarchyroll
6/8/2014

There is something about the word, and the monetary figure trillion that catches one’s attention. Trillion, as in; the total amount of student loan debt in America is $1 trillion.

A standing rule I have is that anytime the word debt and trillion are together in the same sentence, it is worth keeping an eye and an ear on.

Elizabeth Warren has been attempting to push a student loan debt reform bill through Congress. A bill that would in essence, allow debtors to refinance their student loan debt, something that is not currently allowed to happen.

President Obama has now formally put his support behind the bill.

Student loan debt has real potential to be the next bubble that busts the entire economy akin to the housing and dot-com collapses of the previous two decades.

The other important piece of the legislation is that it lowers the interest rates on the loans themselves. The first benefit of the bill helps those already in debt. The second benefit helps those yet to take out loans. Sounds like a common sense piece of win win legislation. Naturally in Washington it is facing an uphill battle with stark opposition.

Regardless of political affiliation or economic situation, $1 trillion of debt must be formally addressed with public policy of some kind to at least take a small preventive measure against a future recession or depression caused by outstanding debt on a mass scale as currently exists with student loan liabilities.

The #China Bubble

Posted: May 28, 2014 in Excess and Algorithms
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eanda logoby @anarchyroll
5/27/2014

What happens when the country that we borrow from needs to borrow from someone?

China is starting to see companies collapse and borrowing go up. Why should you care?

Because the United States of America is dependent on China whether we want to be or not, whether people know it or not. China now has to spend $4 to make a $1.

If China goes through a depression or a recession or even something resembling a recession, we are going to feel the negative effects here at home. Not just because they buy so much of our government debt, but because China is responsible for 1/3 of global economic input according to the article linked to above.

There’s no need to panic or ring a doomsday alarm. But China is in a debt crisis.When that language/terminology is used there must be cause for concern in the name of financial responsibility and fiduciary duty. Why is that the case? Why should you care about this?

China owns $1 Trillion with a T of US Government Debt.

That may not seem like a lot when you see the total amount of government debt. But a trillion dollars is a trillion dollars no matter how economists may try to justify it to themselves. Anytime a trillion dollars is involved, it’s safe to say that an eye and an ear should be paid to it at all times. Especially when a margin call from China could put us on a bullet train to a 2008 sequel. The sequel is never better than the original, but let’s keep this one in the territory of Casablanca and Old School and let the original stand alone with the test of time.

#MunicipalBankruptcy Shows Who’s In Charge

Posted: April 16, 2014 in Anarchy Journal Constitutional
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by @anarchyroll
4/15/2014

Did you hear the one where America turned into an oligarchy? It goes something like; between the start of the industrial revolution and the start of the Vietnam War land and resource ownership was grabbed and consolidated by a select few and they have been using the influence of said land and resources to try to grab more, more, more…how do you like it? how do YOU like it? how do you like it?

Do you know what municipal bankruptcy is? That has such a striking ring to it, no? Municipal bankruptcy. It sounds much more damning than Chapter 9 Title 11 Bankruptcy.

I grew up thinking that governments were in charge. Federal, state, and/or local. Detroit is like a highlighter pen on a never-ending text-book page of small words, showing who is really calling the shots and who has all along…banks.

Banks nearly destroyed modern civilization as we know it in 2008 and who went to jail? Who got brought up on charges? Did any one Wall Street CEO go through half of what a single mom applying for food stamps goes through? Didn’t think so.

Money talks and cash is king. We all learn that at some point or another. It is one of the many aspects of modern society in which we quietly lie to ourselves so we can believe we are have evolved since the caveman era.  Municipal bankruptcy will soon make it impossible to ignore. Detroit is not an exception to the rule, Detroit is a harbinger. Resistance to pension reform has made that all but a certainty.

What does municipal bankruptcy tell us? That we are still serfs and they are still living in the castles. Castles became known as Manhattan penthouses in the mid 1980s. Municipal bankruptcy shows who is really in charge. We can hold all the elections we want but there is a reason it’s called virtual reality. It’s not the real thing. It just looks and feels like it…

 

 

Student Loan #Debt & The #Education Bubble

Posted: March 6, 2014 in Excess and Algorithms
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by @anarchyroll
3/5/2014

A lot has been written about student loan debt, but apparently not a lot of research has been done into the subject. The Department of Education releases default rates once a year, but that is just about it. Are you surprised at this? So was the New York State Federal Reserve Bank. Two analysts working their essentially had to do a bulk of the research that is now often cited by the media and protest groups.

They found that the percentage of 25-year-old college graduates with student loan debts essentially doubled while the average loan balance increased 91% from 2003 to 2012.

Economists are looking at education borrowing as the next bubble that could burst and drag down the US economy along with it. Much like the housing bubble, there are a lot of government backed loans being given away with a rubber stamp to large amounts of people who are unable to immediately if ever repay. Government officials are openly comparing student borrowing to the mortgage-backed security crisis of 2008. And remember, this article opened with the fact that there has been little study and even less data available on the subject.

Mortgage backed securities, credit default swaps, and derivatives trading are all complicated things. Let’s keep the education bubble concept simple.

Student loan debt in America = $1.2 trillion (with a T) more than any other form of consumer debt.

Much like the series of articles written about quantitative easing (QE), there will be multiple articles written about student loan debt as well as the debate over raising the minimum wage. These are the three economic issues I feel most passionately about and wish to shine light upon. Let those numbers listed above wash over you for a bit. Do you know anyone dealing with student loan debt? How are they doing? What is their quality of life?

It’s not just the loan or the interest, it is the unemployment, underemployment, or complete non-existence of careers in the fields thousands if not millions of students are graduating with each year. It’s not just the monthly payment on the loan(s). It’s the monthly payment on the loan plus rent, utilities, food, transportation, etc.

The Education Bubble and the student loan debt crisis are one and the same. They are intertwined, they are two terms describing essentially the same thing.

How is higher education a bubble akin to the dot-com, real estate bubbles, and other asset bubbles? We’ll cover that in part 2…

#OWS Shines Light on Dark Debt Market

Posted: January 14, 2014 in Excess and Algorithms
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eanda logoby @anarchyroll
1/13/2014

Did you know what the secondary debt market was? I sure as hell didn’t. Now I do, thanks Occupy Wall Street and Strike Debt (an OWS offshoot).

Raising that question and answering it is precisely what the intention behind the action of buying and forgiving the debt, first $1 million, then $15 million. I hope this silences the movements critics (that aren’t members of the 1%). The debt they forgave was primarily medical debt, they said they will next be targeting student loan debt.

The movement is not as chic as it was a few years ago, and certainly doesn’t receive the news coverage it did during it’s initial run in Zuccotti Park, but that has been a blessing in disguise. Without national media attention and the inevitable ego boom that comes with it, they have been able to quietly do the work of the 99%.  Now the press only covers them when they make a big splash in the form of helping people, which is what any protest movement is supposed to be all about.