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| Consumer Credit October: Whassup? in forum [Market-Ticker]
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Lowbeyond
Posts: 16892
Incept: 2008-02-11
CO aka West NJ/East CA
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the "children", most of whom are legal adults, do it to themselves.
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Maybe it was a birdy bread-bomber from the future?!
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Fraudster
Posts: 4173
Incept: 2011-05-10
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So much for the de-leveraging meme.
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"Let China sleep, for when she wakes, she will shake the world." - Napoleon Bonaparte
"Circulation ceases first at the outer edges [Europe and Japan]. It will take a while yet for the decay to reach the heart [America]." - Foundation & Empire by Isaac Asimov
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Traderchrispy
Posts: 10
Incept: 2010-12-06
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This may not just be young adults. Couldn't older adults "go back" to college too (i.e., alternative "unemployment" benefits)?
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Ktrosper
Posts: 1500
Incept: 2010-04-06
ft collins co
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Low wrote..the "children", most of whom are legal adults, do it to themselves.
agreed.. But, they are who we taught them to be. Real life will have an entirely different lesson for them, however. It's the same lesson RL taught me, and it ****ing hurts...
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The unexamined life is not worth living.-Socrates
The only stable state is the one in which all men are equal before the law.-Aristotle
Liberty exists now in the spaces government has not yet chosen to occupy.-Doc Zero
I anticipate that 10 Dallas Cowboys Cheerleaders will blow me this evening.-K.D
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Peterm99
Posts: 4984
Incept: 2009-03-21
SoCal
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Are these student loans generally fixed- or variable-rate loans?
If they're fixed-rate loans, I would expect them to become easier to pay off if/when the economy, i.e., job prospects, improves as these folks get work and can start paying them off with earnings.
If they're variable-rate, then I would expect them to be difficult to pay off even if/when the economy and job prospects improve because the interest rates would also be expected to rise.
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". . . the Constitution has died, the economy welters in irreversible decline, we have perpetual war, all power lies in the hands of the executive, the police are supreme, and a surveillance beyond Orwell’s imaginings falls into place." - Fred Reed
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Cvdoc
Posts: 163
Incept: 2009-06-11
Washington, DC
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These "kids" are not told about their real obligations. They should ask but they've somehow been conditioned not to. I teach at a medical school. Each rotation I ask them how much their monthly debt payments will be. Think 250k paid back over 20 years. Sometimes 350k. Guess their response a). I don't want to think about. b). It will be forgiven. Obama has "programs".
They don't get it at all. It does effect specialty choice. No one plans to be primary care. No shock that a "shortage" is predicted. Just another way to "ration" healthcare.
This country is so screwed.
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Few men desire liberty; most men wish only for a just master.
Sallust
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Pay_lay_ale
Posts: 252
Incept: 2010-09-16
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There are variable and fixed rate student loans. IIRC, the loans I received while in school were all variable rate, but I got a fixed rate consolidation loan at a 2% fixed rate back in 2004.
There will be a bailout of sorts on these loans. Young adults almost voted 100% for Obongo.
Yes, there are a sizable number of people who cannot find jobs in this economy and have resorted to going to school instead and living off of student loans. Repayment doesn't start until you stop taking classes. I know several people that are playing this game. Some of the dumber ones are going to scam schools like University of Phoenix, Kaplan, ITT Tech, DeVry, etc.
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Goforbroke
Posts: 5340
Incept: 2007-11-30
Just call me 'Comrade'
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They're responding to what's being told to them. There are no jobs for them without a college degree. (There are no jobs with one, either, but no one's telling them that, as the colleges need to justify their continance.) The key to a bright future is to get a good (i.e. college) education. With a college degree, the world is their oyster. They have not seen, as yet, the impact of the dwindling economy on their parents' lifestyles, as their parents just keep borrowing and/or missing credit card/mortgage payments to hide the realities from themselves and their kids. Not an excuse for their lack of perception/judgement, just an explanation. And the students in Cvdoc's class are right, but to a degree ... as I recall, Obama did say something about capping payments and excusing the loan if someone was in .gov service for 20 years ... from WSJ of 9/12 ... http://online.wsj.com/article/SB10000872.... Quote:The Obama administration has sought to ease the burden of student debt by expanding a program that limits debt payments by income and time.
The new rules, authorized by Congress and set to be finalized next month, will cap payments on federal student loans at 10% of a borrower's "discretionary" income—essentially the money remaining after taxes and living expenses—and then forgive any remaining debt after 20 years. Quote:Student Loan Forgiveness Act of 2012. H.R. 4170. forgives student loan debt for those who have paid 10 percent of their discretionary income toward their loans for 10 years and would cap interest on federal student loans at the current rate of 3.4 percent. Individuals who go into teaching, public service or practice medicine in underserved areas would have their debt forgiven after only five years."
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We have met the enemy and it is us. -- Pogo
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Lemonaid
Posts: 9879
Incept: 2008-01-20
Metro Detroit
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Indentured Servatude.
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"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." Ludwig von Mises
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Crzymorse
Posts: 1189
Incept: 2010-06-25
Maryland
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The problem is even the menial jobs are starting to require a college education. So you get it in the ass two ways, lower wages and higher debt load.
I had a friend that taught some MBA courses at a well known university in Baltimore. He got $80 an hour for three hours a week for 12 weeks to teach marketing (never mind the fact he was a Phd engineer with no marketing experience). He taught about 20 kids that paid $2500 each for the course. So they brought 50k into the university and the university paid him about 3k to teach the course at night. If their overhead ran 200% of his direct labor cost that comes to roughly 9k. Roughly 80% profit margin, not bad
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Mrbill
Posts: 7846
Incept: 2008-10-19
North Carolina
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They don't require a college education, they require a high school education, which you might have gotten by the end of college :)
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Peterm99
Posts: 4984
Incept: 2009-03-21
SoCal
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+1 Mrbill.
Not only has there been lots of monetary inflation over many decades, there's also been grade inflation and degree inflation.
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". . . the Constitution has died, the economy welters in irreversible decline, we have perpetual war, all power lies in the hands of the executive, the police are supreme, and a surveillance beyond Orwell’s imaginings falls into place." - Fred Reed
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Hstella
Posts: 284
Incept: 2009-08-18
Colorado
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.mil should benefit handsomely from this. From what I can tell, the top 20% of grads is doing ok (not well), and the rest are floundering. In a couple of weeks, when he comes to visit, I plan on breaking some hard truths to one of my brothers who is now in a residency program. Namely, "I can't tell you how happy I was that you got into the program. Because it gave you 3 years out of the work force for the economy to improve. Bad news: In the time that you've been in training, my earnings have gone down substantially, and I have little hope for your prospects in the working world. Not because I think you're not good at what you do, but because this is a stinking economy to be trying to do anything health care related." My other brother is working on joining the Navy.
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Rule10
Posts: 2456
Incept: 2008-09-30
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I can't wait for the "speak translated into text technology" to be perfected. I have so much to say yet so little time to type it accurately.
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You are not what you say you are, You are what you do.
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Chris92346
Posts: 1314
Incept: 2009-03-25
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You guys are confusing.
If outstanding credit goes up its "OMG OMG the Sky is falling"
If outstanding credit goes down its "OMG OMG the Sky is falling"
Granted though I am bothered by the burden we are putting on our young people with student load debt.
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Truthseeker
Posts: 8474
Incept: 2007-10-07
NorCal
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Exactly, Chris. The sky IS falling.
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"...But people better realize that the worst-case scenario could actually happen.9/11 happened. This can happen. An economic 9/11, the likes of which we've never seen." Gerald Celente
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Chris92346
Posts: 1314
Incept: 2009-03-25
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Truth LOL you are correct.
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Marcustullius
Posts: 200
Incept: 2010-06-12
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Chris, that's because we are watching the patient hemorrhaging.
If he bleeds more, someone says "OMG, he's bleeding to death!"
If the rate subsides a little, someone notes the total absence of tourniquet, pressure bandage and the like, and says "OMG, he's continuing to bleed to death!"
Tully
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"It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people's minds." (Samuel Adams)
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Cvdoc
Posts: 163
Incept: 2009-06-11
Washington, DC
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Bleeding always stops
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Few men desire liberty; most men wish only for a just master.
Sallust
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Marcustullius
Posts: 200
Incept: 2010-06-12
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True, CV -- and this kind of bleeding will stop at some point too. Most participants here probably won't like conditions during that time and its aftermath.
Tully
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"It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people's minds." (Samuel Adams)
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Atlasrocked
Posts: 363
Incept: 2009-03-23
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The teachers are voting for the easy money policies.
The kids will be voting for the politicians most likely to relieve them of their "unforeseen" inability to repay.
It's a win win political situation. Buy votes now and gain a huge new constituency later.
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