We need to talk about this student loan bubble

kmiklas

kmiklas

Anyone else see the similarities between the housing market bubble of 2007 and the current student loan situation?

- There is 1.2T (trillion) outstanding in student loan debt [1]
- Defaults are rising sharply [2]
- Jobs are going offshore, or to H1B's, making it difficult (if not impossible) for students to find employment and repay their loans in the U.S.
- Much like Mortgage-Backed Securities, student loans are being packaged into "Student-loan backed securities."
- Much like fishy mortgage-backed securities were repackaged as Collaterized Debt Obligations (CDOs), student loan debt is being repackaged into "Bespoke Tranche Opportunities."
- (Who comes up with these names, anyway? Is this a job title at the investment banks? "Hi, I'm Jane Doe - Decorous Fishy Debt Name Repackager - Goldman Sachs.")

- All the flowery names in the world cannot hide the stench of this from me.
- Anyone else looking at credit default swaps on student-loan backed securities?
- Do we need to start building a bailout fund for Sallie Mae? No way they're getting out of this without some form of voodoo.
- Will history sigh and repeat itself, once again?

References:
1. http://www.investopedia.com/article...n-assetbacked-securities-safe-or-subprime.asp
2. http://www.theblaze.com/news/2017/0...wers-failed-to-repay-student-loans-last-year/
 
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Young people have it very tough imo and it's not right.
Student loans
High house prices in much of the Western World
A very very competitive work environment.
All reasons I suppose which makes trading seem like a very attractive hobby one should not overlook.
You could self educate on trading very cheaply and imo is character building as well.
Sim trade for a few years, place small real bets.
 
I have a long term solution for student loan bubble...............reduce the cost of education and loan paying off is not a monster anymore.
 
kmiklas said:
Anyone else see the similarities between the housing market bubble of 2007 and the current student loan situation?

- There is 1.2T (trillion) outstanding in student loan debt [1]
- Defaults are rising sharply [2]
- Jobs are going offshore, or to H1B's, making it difficult (if not impossible) for students to find employment and repay their loans in the U.S.
- Much like Mortgage-Backed Securities, student loans are being packaged into "Student-loan backed securities."
- Much like fishy mortgage-backed securities were repackaged as Collaterized Debt Obligations (CDOs), student loan debt is being repackaged into "Bespoke Tranche Opportunities."
- (Who comes up with these names, anyway? Is this a job title at the investment banks? "Hi, I'm Jane Doe - Decorous Fishy Debt Name Repackager - Goldman Sachs.")

- All the flowery names in the world cannot hide the stench of this from me.
- Anyone else looking at credit default swaps on student-loan backed securities?
- Do we need to start building a bailout fund for Sallie Mae? No way they're getting out of this without some form of voodoo.
- Will history sigh and repeat itself, once again?

References:
1. http://www.investopedia.com/article...n-assetbacked-securities-safe-or-subprime.asp
2. http://www.theblaze.com/news/2017/0...wers-failed-to-repay-student-loans-last-year/
More...
You're using The Blaze as a reliable source for finance news? Seriously!

Typical of any highly biased source trying to make a political point I see a bunch of statistics unrelated to one another thrown together with a conclusion unsupported by those statistics, which sadly fools too many people who see the conclusion they want to see and don't take a closer look.

The answer to your question is a resounding no, if you really care about the answer?
 
kmiklas said:
Anyone else see the similarities between the housing market bubble of 2007 and the current student loan situation?
More...

No. While many homes lost 40% of their value in the recession, I don't think that a bachelors degree is going to get downgraded to a high school diploma when a student loan is called.
 
Ex hedgefunder, ex day trader Altucher on the futility of college

you're eighteen years old asking, "Well, how am I going to have millions of dollars later on?", the first thing I'll tell you to do is don't spend two hundred thousand dollars on a college degree
and waste four years of your life..."
I can go right now into the center of Times Square in NYC and shout, "Jesus is Satan!" and people would just walk around me and think, "OK, its free speech"...
But if I shouted, "Don't send your kids to college", WHOAH!!
Lock this guy up! Take away his kids!
Seriously...I've had death threats on this opinion.
People can't handle it.
We're told from an early age there is this magic formula. Degree = Job.
That's a lie...worse than a lie.
More than half of unemployed people DO have a college degree.
But no job.
Instead they have the burden of nearly inescapable debt. When you spend years taking on $10's of thousands of debt to an institution who can't deliver on it's big sales pitch?
That's not magic...it's a scam.
Oh, and guess what? Even if you do get a job incomes are getting lower every year. This will never stop.
Since 1993, income for people ages 18-35 have gone from $36,000 to $33,000. This seems like a small amount.
It's not. It's the first time ever that income has gone down over such a long period (more than a year).
This means: relying on a college, job, promotion, security, stability, retirement pension, retirement income = thing of the past.
So what should people do instead?
Forget what you know...forget what you're told is the right way. Instead, invest in yourself...reinvent yourself.
Because everything that used to be safe…
It doesn't exist anymore.
Debt has gone straight up. Incomes are down.
But OPPORTUNITIES...opportunities are endless.
 
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Some of these rates are absurd. Sallie Mae charges 10%+ APY in some cases. These loans will never get paid back.

It's an unsecured loan. At least mortgages have collateral. When unemployment hits 10%, the creditors will be holding worthless securities.
 
marketsurfer said:
Ex hedgefunder, ex day trader Altucher on the futility of college

you're eighteen years old asking, "Well, how am I going to have millions of dollars later on?", the first thing I'll tell you to do is don't spend two hundred thousand dollars on a college degree
and waste four years of your life..."
I can go right now into the center of Times Square in NYC and shout, "Jesus is Satan!" and people would just walk around me and think, "OK, its free speech"...
But if I shouted, "Don't send your kids to college", WHOAH!!
Lock this guy up! Take away his kids!
Seriously...I've had death threats on this opinion.
People can't handle it.
We're told from an early age there is this magic formula. Degree = Job.
That's a lie...worse than a lie.
More than half of unemployed people DO have a college degree.
But no job.
Instead they have the burden of nearly inescapable debt. When you spend years taking on $10's of thousands of debt to an institution who can't deliver on it's big sales pitch?
That's not magic...it's a scam.
Oh, and guess what? Even if you do get a job incomes are getting lower every year. This will never stop.
Since 1993, income for people ages 18-35 have gone from $36,000 to $33,000. This seems like a small amount.
It's not. It's the first time ever that income has gone down over such a long period (more than a year).
This means: relying on a college, job, promotion, security, stability, retirement pension, retirement income = thing of the past.
So what should people do instead?
Forget what you know...forget what you're told is the right way. Instead, invest in yourself...reinvent yourself.
Because everything that used to be safe…
It doesn't exist anymore.
Debt has gone straight up. Incomes are down.
But OPPORTUNITIES...opportunities are endless.
More...

I believe it comes down to how bad you want a job, cause when foreigners come here, they are working for themselves in a few years and our younger generation are crying the blues there is no jobs. When you mention about hustling, many think it is a dance. If you have the gift of gab= ABC, Always be closing. Also, might have to relocate, Austin Texas is like the new silicon valley, many tech companies, and Houston is still big energy.
 
marketsurfer said:
Ex hedgefunder, ex day trader Altucher on the futility of college

you're eighteen years old asking, "Well, how am I going to have millions of dollars later on?", the first thing I'll tell you to do is don't spend two hundred thousand dollars on a college degree
and waste four years of your life..."
I can go right now into the center of Times Square in NYC and shout, "Jesus is Satan!" and people would just walk around me and think, "OK, its free speech"...
But if I shouted, "Don't send your kids to college", WHOAH!!
Lock this guy up! Take away his kids!
Seriously...I've had death threats on this opinion.
People can't handle it.
We're told from an early age there is this magic formula. Degree = Job.
That's a lie...worse than a lie.
More than half of unemployed people DO have a college degree.
But no job.
Instead they have the burden of nearly inescapable debt. When you spend years taking on $10's of thousands of debt to an institution who can't deliver on it's big sales pitch?
That's not magic...it's a scam.
Oh, and guess what? Even if you do get a job incomes are getting lower every year. This will never stop.
Since 1993, income for people ages 18-35 have gone from $36,000 to $33,000. This seems like a small amount.
It's not. It's the first time ever that income has gone down over such a long period (more than a year).
This means: relying on a college, job, promotion, security, stability, retirement pension, retirement income = thing of the past.
So what should people do instead?
Forget what you know...forget what you're told is the right way. Instead, invest in yourself...reinvent yourself.
Because everything that used to be safe…
It doesn't exist anymore.
Debt has gone straight up. Incomes are down.
But OPPORTUNITIES...opportunities are endless.
More...
That was eye-opening!
 
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