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More Startling Student Loan Statistics

On April 16, 2013, in Debt, Economy, by Tim

In this story from the other day, University of California at San Diego economist James Hamilton takes a look at some of the latest data on student loans and, you guessed it, things are worse than you might think (or, at least, than I thought).

As shown above, when excluding those student loans that are not yet in repayment, the default rate isn’t in the teens (as widely reported), it’s more like 30 percent – nearly a third. Presumably, this report about waiving the taxes due on forgiven student loan debt in the new White House budget is a response to this situation.

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The Stockman Book Tour Juggernaut

On April 15, 2013, in Economy, Stocks, by Tim

David Stockman’s book tour appears to be going quite well as he continues to get lots of press for such views as his characterization of the Federal Reserve as a serial bubble blowing machine and the U.S. economy being a giant Ponzi scheme. His ongoing feud with Nobel Laureate economist Paul Krugman has likely boosted book sales as well and he talked to Bill Maher on Friday about government spending as shown below.

Also see this clip of Stockman on the Neil Cavuto show last week where, presumably, he felt as though he was in friendly confines and really let loose on the Bernanke Fed.

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Reinflating the Housing Bubble

On April 11, 2013, in Housing, by Tim

After all the recent talk of central banks inflating new asset bubbles and of soaring property prices (home values in our neck of the woods are said to be up 25 percent in the last year), the message in the video below (spotted at the Azizonomics blog) is worth remembering.

We in the “Anglo-American property owning democracy” don’t seem to tire of asset bubbles. It’s as if former Fed Chief Alan Greenspan has trained an entire generation to expect them.

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Zell: 2013 Stock Market Like Housing in 2006

On April 11, 2013, in Stocks, by Tim

CNBC’s Maria Bartiromo begins “This market just does not want to quit…” before talking to perma-bear David Rosenberg of Gluskin Sheff and real estate investor Sam Zell who, surprisingly, makes Rosenberg sound bullish about equity markets.

You gotta love Maria’s response to Rosenberg’s first comment about “the mother of all liquidity driven rallies” in both the U.S. and Japan - “And it’s continuing, meaning, you have to be there. You don’t want to fight the Fed is what you’re saying.”

Zell plays the wet blanket at just over the two minute mark, culminating with this exchange:

Zell: This feels like the housing market of 2006. Everybody can’t afford to miss it.

Bartiromo: Uh oh….
…
Bartiromo: Well, I have to say, Sam Zell telling me that this stock market feels like the housing market of 2006 is a scary comment.

Zell: Why? Every single day it goes up. Every day in 2006, the housing market went up. What was the number one headline every day? Housing prices going up. What are you talking about every day now? New high on the stock market.

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A Sober Look at Quantitative Easing

On April 11, 2013, in Asia, Currencies, by Tim

This chart of past and predicted central bank assets from Credit Suisse, in which it becomes clear that the Bank of Japan has raised the money printing bar significantly, has popped up in a number of places recently, one of which was in this item at Sober Look.

It looks like both the yen and the Nikkei stock index are taking a breather today after surging earlier in the week, the latter notching a five-year yesterday. It seems inevitable that the yen-dollar exchange rate will return to 100 and, perhaps, weaken much more.

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A Wild Ride (to put it mildly) for Bitcoin

On April 10, 2013, in Currencies, by Tim

Bitcoins had a wild ride today, rising to as high as $266 before losing more than half its value in falling to near $100 and then surging back toward $200. This chart from Mt. Gox shows what happened today and this story at Tech Crunch provides some details behind what is apparently a denial of service attack by hackers.

Bitcoins

A long-term chart from the Tech Crunch article is shown below – click on it to enlarge.

Bitcoin

We humans are unlikely to ever come up with a fiat money system that really works over the long-term. It’s just not in our nature and Bitcoin is a good example of why that is so.

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