Financial Crisis

[RedFxTrade]

Students graduating a quarter mil in debt today have no chance

that sum and my limited time spent at a U.S. university lets me assume that there's something wrong with the education system, i.e. colleges/universities are much too expensive compared to Europe.

example: the maximum student loan in Germany one can get nowadays is ~€ 8,000 / $ ~12,000 per annum. assuming an average duration of 5-6 years to obtain a master's degree the max total debt is less than 30% of the equivalent "U.S. debt".

Well as usual I was overstating the case a bit but there are graduates from some private professional schools with that kind of debt.

Just saw this-

It's a hard road. There's no escape clause, either. Can't claim bankruptcy. They'll follow you to your grave and to your children's grave. Really sad. Raping the future before it even get's a chance.

And on a brighter note....The "End of Work" and the Coming Revolution in Education and An Open-Source Web-Enabled Revolution in Education.

From a personal perspective. I decided against university after one year, and decided to teach myself. A couple of people told me a few years ago, that with information for free on the internet you can teach yourself. I decided to go this path...I have been able to specialise in my area from the word go, and mostly for free. I think I have learned much more than if I had went to university and have been able to travel and live in Asia for long periods while still continuing my own learning....After all would you rather take marketing advice from Richard Branson, founder of Virgin and a billionaire or some professor/lecturer of marketing in a university who earns £40,000 a year?

All these students who are protesting and complaining about the hikes in student fees and cuts to arts etc etc should stop moaning and learn to think and fend for themselves through direct and empirical experience in the area they are passionate about. The Lefty Arts students who are most against student fee rises should look at all those artists and musicians, writers who did not go to university. The irony being that the stuff that is studied at uni came from people who did not go to university. Instead they drew their inspiration from their own self, and produced great works.

On Education....

One of the few things a person is willing to pay for and not get.

William Lowe Bryan (1860–1955)

One of the chief obstacles to intelligence and freedom of thought.

Bertrand A. Russell (1872-1970)

[EnhancePlus]

I just went to the websites of my 2 alma maters to check the current fees including tuition, books and supplies but not including room & board.

Undergrad 12 quarters (public U, in-state resident rate) 88k

Doctoral 12 quarters (private U) 260k

I went through in the 70s, now can't even imagine....

I was very fortunate to have a parent pay my tuition - public university and back in the 80's. I ended up extending my studies with a loan. I avoided that loan for 20 years. The interest for it got to 80%. For ONE class.

I'm just finishing paying for it after 6 years of $60.00 a month.

[churchill]

Jean-Claude Trichet made a huge mistake buying Greek and Irish debt. To what extent is Trichet attempting to save his reputation to the detriment of a real solution?

GOODNESS GRACIOUS! do morons ignorants really exist who think that Trichet is empowered to make that kind of decision without involving the whole ECB board who's members are receiving "guidance" from their relevant governments?

Whatever you say Naam I don't believe a word any of them say - They are all just protecting their own butts / Trichet is as slippery as Greenspan used to be -

There’s no mystery to US Treasury Secretary, Timothy Geithner’s intervention in the Irish bailout. Wikileaks has already revealed the reason.

http://namawinelake.wordpress.com/2011/06/13/there’s-no-mystery-to-us-treasury-secretary-timothy-geithner’s-intervention-in-the-irish-bailout-wikileaks-has-already-revealed-the-reason/

[Naam]

Whatever you say Naam I don't believe a word any of them say - They are all just protecting their own butts / Trichet is as slippery as Greenspan used to be

i fully agree with you Churchill but that's besides the point i referred to.

[midas]

A good read - http://www.theburnin...rm.com/?p=17002

Can you believe a trillion in US student debt? Talk about robbing the future! If when a final deflationary burst sweeps away all the debt-based "assets" including the electromagnetic bits representing a bank balance that even the FDIC can't hope to reimburse the ATMs will go dark and you will hear something like "I'm afraid I can't do that Dave" when you try to access your online account. Gold might be good to have along with lots of other useful things but paper cash will be the king of the debt-based "assets".

This has been a doomer neo-Malthusian rant.

And what is also sad is what is the real value of that education? You can't run away from that form of debt and yet will ever be able to generate enough income to pay it back?

Big government couldn't even provide the proper policing to ensure many of these young people didn't fall prey to ruthless scamsters on programs that would give you a piece of paper no better than something you can buy on Bangkok's Khaosan Road

Ridiculous. Just saw a report on CNN investigating whether a college degree was still worth it...especially in today's economy. Result? College grads, over their life, will earn around 30% more than those without degrees. I think if you did that survey with regards to the better degrees at the better schools, it would be way more than that (i.e. doctors, lawyers, engineers, software programmers, accountants, etc.). But for sure, some degrees are not worth that much.

Student loans are great. I got several and paid them off within 4-5 years. Worked good for me...retired at 46 with no pension...just money I earned.

Actually even CNN covered this subject in 2010....

College Education Could Possibly be the Largest Scam in U.S. History

http://www.davidicke.com/headlines/44235-college-education-could-possibly-be-the-largest-scam-in-us-history-

[churchill]

Whatever you say Naam I don't believe a word any of them say - They are all just protecting their own butts / Trichet is as slippery as Greenspan used to be

i fully agree with you Churchill but that's besides the point i referred to.

Do you think the head cares what the tail thinks - And do you think the Tail is aware of what is going on and is able to give the head any sensible guidance ?

Edited June 13, 2011 by churchill

[RedFxTrade]

Whatever you say Naam I don't believe a word any of them say - They are all just protecting their own butts / Trichet is as slippery as Greenspan used to be

i fully agree with you Churchill but that's besides the point i referred to.

Naam to be honest I don't think anyone thinks Trichet takes the decisions by himself. Its just used as a proxy to refer to an institution, the way its done with Bernanke...Steve Jobs at Apple, you will see the headline s "Jobs decides...blah, blah blah.." But Jobs will have consulted with all relevant people before announcing a decision....or Branson at Virgin, Michael O'Leary at Ryanair...in second thoughts O'Leary probably does makes the decisions by himself...on a lighter note, O'Leary is hilarious, very astute though...A Fat Tax, Online Gambling, charging for toilets, announcing his strategy at a German press conference will introducing Free Blowjobs in long haul flights...Ryanair pay very little on advertising as O'leary's rants get him the news headlines.

[churchill]

I think Trichet is praying ..

EURCHF touched all time low 1.2000 earlier as Greek deposits are now in accelerated transfer mode..........

Greek, Portuguese and Irish CDS All At Record Wides

http://www.zerohedge.com/article/greek-portuguese-and-irish-cds-all-record-wides

[churchill]

Whatever you say Naam I don't believe a word any of them say - They are all just protecting their own butts / Trichet is as slippery as Greenspan used to be

i fully agree with you Churchill but that's besides the point i referred to.

Naam to be honest I don't think anyone thinks Trichet takes the decisions by himself. Its just used as a proxy to refer to an institution, the way its done with Bernanke...Steve Jobs at Apple, you will see the headline s "Jobs decides...blah, blah blah.." But Jobs will have consulted with all relevant people before announcing a decision....or Branson at Virgin, Michael O'Leary at Ryanair...in second thoughts O'Leary probably does makes the decisions by himself...on a lighter note, O'Leary is hilarious, very astute though...A Fat Tax, Online Gambling, charging for toilets, announcing his strategy at a German press conference will introducing Free Blowjobs in long haul flights...Ryanair pay very little on advertising as O'leary's rants get him the news headlines.

Great - do Ryan Air do Business Class Bangkok - Europe ???

[RedFxTrade]

I think Trichet is praying ..

EURCHF touched all time low 1.2000 earlier as Greek deposits are now in accelerated transfer mode..........

Greek, Portuguese and Irish CDS All At Record Wides

http://www.zerohedge...ll-record-wides

I wonder who he is praying to...perhaps Lakshmi, The Indian God of Money and Good Fortune

Spanish yields are looking dangerously like breaking out also...to the up side...lower highs and squeezing to the top of the range highs...

[RedFxTrade]

Guys, do not know where you stand on Global Warming as caused by man...personally, I think its a load of <deleted>...with those emails from climategate saying stuff like "if only we can get the medieval warming period taken off the graph" and many scientists pointing out that Greenland has been well green before and the expert on polar bear being banned from the Copenhagen summit as he said that there are more Polar bears than ever now...The amount of money it is costing us is unreal...15-20% on EU gas bills, flights alone...you pay about £130 quid for a flight from the UK to Bangkok in tax...however, just saw this video yesterday and I m gobsmacked at the gra graphic nature of it....and how extreme the "eco fascists" have become...this video was made by the 10;10 body, which aims for everyone to reduce their carbon emissions by 10% a year...They have pulled the video, but its now all over the internet...unbelievable. Where is the room for open debate and reason?

And with this story this morning...Top scientist resigns, admist GW is a scam

Edited June 13, 2011 by RedFxTrade

[12DrinkMore]

And back down from the levity to the hard facts of life.

http://www.marketwatch.com/story/many-of-us-wont-be-able-to-retire-until-our-80s-2011-06-09

If you don't have enough money saved for retirement, you've got a few ways to close the gap between what you have and what you need in your nest egg: Save more, invest more aggressively, and/or work longer.Well, it turns out that working longer is indeed an option, according to the Employee Benefit Research Institute latest study.

The only problem is that the latest research shows that you'll have to work much longer than you anticipated. In fact, many Americans will have to keep on working well into their 70s and 80s to afford retirement, according to the study, titled "The Impact of Deferring Retirement Age on Retirement Income Adequacy."

Edited June 13, 2011 by 12DrinkMore

[craigt3365]

Actually even CNN covered this subject in 2010....

College Education Could Possibly be the Largest Scam in U.S. History

http://www.davidicke.com/headlines/44235-college-education-could-possibly-be-the-largest-scam-in-us-history-

Agreed. College education is crazy expensive now. I also saw the CNN special on education being a scam.

But it was a life changing even for me. I have several very close friends who never graduated from high school who are multi-millionaires. I have many more friends who have advanced degrees who are in the same boat. Hard to argue with the stats....

[RedFxTrade]

The Collateral Crunch

Interesting article from FT Alphaville The Collateral Crunch

I wonder if this would be bearish for the USD or not? I think over the medium term and long term for sure....as no doubt they will print in some form and raise the ceiling. However, by its very nature default and outright default is deflationary. Rising T-Bond yields would put of course put a crunch on housing and default rates throughout the economy. Rising yields of course is a tightening in and off itself.However, I would entertain the thought that in the very short term the USD could actually spike higher in this type of crunch scenario. This has been what Bob Hoye has been saying would happen, the bond market would tank, but the USD would strengthen due to a higher demand for cash throughout the economy. Also Russell Napier painted this picture that for the first time in 80 years, the stock and bond market would collapse together. I actually think the USD might strengthen initially as crazy as that sounds if said event does happen.

After all the day a couple of months ago when the US credit outlook was downgraded to negative the USD actually shot higher, after initially spiking lower, wrong footing many traders. Scary prospect indeed if bond and the stock market went down together.

It gets less attention than its credit-denominated relative, but the 2008 financial crisis actually sprung from a massive ‘collateral crunch’ within the shadow banking system.

Read Manmohan Singh on rehypothecation, or try to get your hands on Matt King’s seminal ‘Are the brokers broken?’ note. The Citigroup credit analyst warned just two weeks before Lehman’s collapse that “brokers’ and banks’ gross usage of repo, revealed in footnotes of 10-Qs, far exceeds that which shows up on balance sheet. Although in principle much of this is for clients (mostly hedge funds) it still makes their business as a whole much more dependent on the continued availability of repo funding than might otherwise be appreciated.”

No kidding. In 2008, the use of so-called toxic assets to secure repo funding very suddenly became unacceptable to other banks, causing financial meltdown.

Back then, the solution was for Fed chairman Ben Bernanke to say stuff like this: “We are encouraging firms to improve their management of liquidity risk and reduce over time their reliance on tri-party repos for overnight financing of less-liquid forms of collateral.”

Now we have that emphasis on the safest of collateral assets — government bonds, and especially US Treasuries. Some $4,000bn of these are currently used in the repo market, according to JPMorgan. Presumably, what you wouldn’t want is any further reduction in the amount of decent, liquid collateral available to a still nervous-financial system.

On that note — here’s a nice tidbit from Monday’s Financial Times:

Some of Wall Street’s biggest banks are preparing to cut their use of US Treasuries in August as a precaution against any turbulence that could follow if warring Republicans and Democrats fail to increase soon the US debt ceiling, a senior bank chief said.

One strategy, which bank executives only agreed to discuss without attribution due to the political sensitivities related to discussing Treasury debt, is to have more cash on hand to put up as collateral against derivatives and other transactions, decreasing the financial system’s reliance on Treasuries.

Combine a shift away from US Treasuries with everything else that’s currently happening in the collateral sphere. The Federal Reserve Bank of Chicago has a nifty new software programme to help banks estimate the amount of assets that may be needed once stuff like central counterparty clearing comes into effect. There’s been a worldwide shift towards collateralised lending just when upcoming Basel III rules for banks are busy redefining what can count as liquid or safe assets. And much more.

Now go back to that UST point, specifically.

JP Morgan managing director Matthew Zames warned back in April that:

A Treasury default could severely disrupt the $4 trillion Treasury financing market, which could sharply raise borrowing rates for some market participants and possibly lead to another acute deleveraging event. Because Treasuries have historically been viewed as the world’s safest asset, they are the most widely-used collateral in the world and underpin large parts of the financing markets. A default could trigger a wave of margin calls and a widening of haircuts on collateral, which in turn could lead to leveraging and a sharp drop in lending.

Shades of 2008, that.

[12DrinkMore]

A small flurry of activity here today. Wonder what brought it all on.

Got an hour?

http://www.youtube.c...h?v=Uz2j3BhL47c

Wide ranging and making huge leaps from one event to the next. But enjoyable and thought provoking nonetheless.

I liked the "Revenge of the Asians" slant at the end.

Edited June 13, 2011 by 12DrinkMore

[Naam]

S&P rates Greece "CCC" but planet earth still rotates

[flying]

Exclusive: The Fed's $600 Billion Stealth Bailout Of Foreign Banks Continues At The Expense Of The Domestic Economy, Or Explaining Where All The QE2 Money Went

Courtesy of the recently declassified Fed discount window documents, we now know that the biggest beneficiaries of the Fed's generosity during the peak of the credit crisis were foreign banks, among which Belgium's Dexia was the most troubled, and thus most lent to, bank.

Full article at link above

[flying]

http://www.youtube.com/watch?v=E7QnwYwHQIM&feature=player_embedded

[RedFxTrade]

A small flurry of activity here today. Wonder what brought it all on.

Got an hour?

http://www.youtube.c...h?v=Uz2j3BhL47c

Wide ranging and making huge leaps from one event to the next. But enjoyable and thought provoking nonetheless.

I liked the "Revenge of the Asians" slant at the end.

Happy days, I ll have to watch part 2 and 3. I saw part 1 on BBC...Rand is a scary looking women. No second guesses who wears the trousers in her relationships...Quite a sad figure at the end, but she was very resolute in her beliefs...The guy who produced the show seemed to be coming at it from a center left position. I think he dealt more with symptoms that causes overall, but a very interesting program none the less...and nice to see a program that does not blow bubbles up Greenspans ass.

[midas]

http://www.youtube.com/watch?v=E7QnwYwHQIM&feature=player_embedded

in fact the degree to which things have developed into an economic mess under Obama makes it very hard to believe it is actually incompetence......

By now I would put all my money on it being engineered civil unrest as per the plans of

people like Cass Sunstein et al.

Edited June 14, 2011 by midas

[cloudhopper]

A small flurry of activity here today. Wonder what brought it all on.

Got an hour?

http://www.youtube.c...h?v=Uz2j3BhL47c

Wide ranging and making huge leaps from one event to the next. But enjoyable and thought provoking nonetheless.

I liked the "Revenge of the Asians" slant at the end.

Great piece thanks. Ayn Rand was one of my heroes back in the day; fortunately I never saw her interviews!

Fascism is so insidious.

[cloudhopper]

in fact the degree to which things have developed into an economic mess under Obama makes it very hard to believe it is actually incompetence......

By now I would put all my money on it being engineered civil unrest as per the plans of

people like Cass Sunstein et al.

As wealth becomes more concentrated unrest will not need to be engineered.

Edited June 14, 2011 by cloudhopper

[Naam]

Exclusive: The Fed's $600 Billion Stealth Bailout Of Foreign Banks Continues At The Expense Of The Domestic Economy, Or Explaining Where All The QE2 Money Went

Courtesy of the recently declassified Fed discount window documents, we now know that the biggest beneficiaries of the Fed's generosity during the peak of the credit crisis were foreign banks, among which Belgium's Dexia was the most troubled, and thus most lent to, bank.

Full article at link above...

...concocted by Dyler Turd to bullshit his faithful followers

[Naam]

in fact the degree to which things have developed into an economic mess under Obama makes it very hard to believe it is actually incompetence......

By now I would put all my money on it being engineered civil unrest as per the plans of

people like Cass Sunstein et al.

As wealth becomes more concentrated unrest will not need to be engineered.

everybody knows it's the Bilderbergs and the Illuminati who engineer crises. European scientists detected last weekend a batch of EHEC bacteria which still carried the labels "Engineered in Switzerland by Bilderberg & Co., Registration of Patent applied for / do not copy!".

[cloudhopper]

Another unrest article; must be this week's theme...

http://www.taipanpublishinggroup.com/tpg/taipan-daily/taipan-daily-061011.html?sub=TD&o=372892&s=375956&u=48412125&l=269005&g=183&r=Milo

[Naam]

The ECB (European Central Bank)'s determination to force "austerity" on the periphery countries -- and to avoid debt restructuring at all costs -- is driving multiple generations to the brink.

what a load of crap! the ECB cannot force austerity on any EU member country. the governments of Greece and/or the other PIIGS states are free to default on their public debt and then face the consequences. perhaps one of us should inform Coelho, Papandreou, Zapatero, Berlusconi and the Irish dude to seek advice in Vegas? no hasty decisions till september!

I'll be giving my detailed thoughts on what is coming, and how to prepare, at Taipan's upcoming crisis and survival event in Las Vegas in September.

[cloudhopper]

"I'll be giving my detailed thoughts on what is coming, and how to prepare, at Taipan's upcoming crisis and survival event in Las Vegas in September."

Hey think attendance is free? Greece may have already defaulted by then anyway.

The ECB may not be able to force austerity but they sure can provide unlimited (except by the inevitable) bailout debt to postpone the European jenga.

[RedFxTrade]

The ECB (European Central Bank)'s determination to force "austerity" on the periphery countries -- and to avoid debt restructuring at all costs -- is driving multiple generations to the brink.

what a load of crap! the ECB cannot force austerity on any EU member country. the governments of Greece and/or the other PIIGS states are free to default on their public debt and then face the consequences. perhaps one of us should inform Coelho, Papandreou, Zapatero, Berlusconi and the Irish dude to seek advice in Vegas? no hasty decisions till september!

I'll be giving my detailed thoughts on what is coming, and how to prepare, at Taipan's upcoming crisis and survival event in Las Vegas in September.

Really? The ECB in conjunction with the government officials of these countries agree that austerity measures must be forced through...The ECB has stated many times that austerity measures must be strictly implemented..This is Trichets wish.The people are not free, not yet anyway to default...as government in collusion with all these champagne socialists within the EU said no...Police move into Catalan square

According to eyewitnesses, riot police moved in to Placa de Catalunya between 7 and 8 am, firing rubber bullets, tear gas and baton-charging the protesters. Footage from the encampment shows police attacking peaceful demonstrators without prior provocation.

How about Greece..violence until dawn, 3 people killed, riot police fighting and quashing protesters, tear gas, rubber bullets...yes all very non forceful.....protesters storming parliament...grenades...Trichet might not be out firing rubber bullets himself, but it his policy, or the ECB's policy in conjunction with the government elites...It appears they are forcing it through via the heavy hand of the state, and if TRichet condemned this, then he could simply give into debt forgiveness...but he chooses not to....When I can into my car and drive, I m not the one making the car move, thats the engine components and the petrol...I m just sending signals through movement to implement the motion.

Your right in that these countries can just walk away and say fuc_k you to the ECB and the EU, but thats not happening due to wishes of the wanke_rs at higher levels within the EU, which go against the will of the people...so austerity is being forced due to the decisions of the ECB...as I said, the ECB are driving the car but they are not causing the motion...it takes two to tango

http://www.youtube.com/watch?v=mhHBFlz4hG0&feature=autoplay&list=PL070C30DF123BBA9B&index=2&playnext=2

Edited June 14, 2011 by RedFxTrade

[ronz28]

Exclusive: The Fed's $600 Billion Stealth Bailout Of Foreign Banks Continues At The Expense Of The Domestic Economy, Or Explaining Where All The QE2 Money Went

Courtesy of the recently declassified Fed discount window documents, we now know that the biggest beneficiaries of the Fed's generosity during the peak of the credit crisis were foreign banks, among which Belgium's Dexia was the most troubled, and thus most lent to, bank.

Full article at link above

A fall of Dexia and other guarantors may have broken the buck on many money market funds at the time who held variable rate (bank) bonds because Dexia was backing the bank bonds issued in connection with swap arrangements that provided issuers of variable rate bonds such as a state housing agency who wanted fixed rate interest costs but issued a variable rate bond becuase it would realize greater proceeds from such a deal vs. a fixed rate issue.

A liquidity provider such as Dexia contracted at a price and guaranteed that it would buy and remarket the variable rate bonds issued by the state agency, etc. should a money market fund need to cash in... but were unable to sell the variable bond at the time to other investors for cash and would have put the bond back based on bond terms to the issuer if the bank (Dexia) did not provide the liquidity. At the peak of the liquidity crunch investors demanded to redeem an unplanned for level of bank (backed)bonds to repay investor who desired to withdraw money from the money market funds and at the time and were mostly reinvesting the proceeds in US T-bills. So the Fed in effect bailed out US investors and others in money market funds by providing a life line to Dexia, etc. during the liquidity crisis. One lesson learned should be that your guarantor better have the capacity to perform during a crisis ... but for the US Fed the world banking system may have failed and the US Fed may never have the capacity/ability to do this again.

An S&P report issued in connection with one such issue is found here and a description is at the last two pages.

http://www.tdhca.state.tx.us/bond-finance/docs/RAR-SP-SF.pdf

Edited June 14, 2011 by ronz28

[ronz28]

With the big push for austerity for the Greek lower and middle class do you think the Greek government might actually also be forced to start collecting taxes due by the wealthy (even for prior years) or will the Greeks just continue to let the wealthy off and perhaps the hard working Germans, and other Northern Europeans will bail them out???

I fear the US is following the same track in letting the super wealthy pay effective tax rates similar to the middle class or less based on Bush trickle down economics but the rich actually don't even give a trickle and retain all the benefits of the country's wealth based on their position to do so. Such mismanagement will probably result in the loss of a country's wealth and that of their wealthy class.