I've heard some grumblings lately that the next bubble is the value of our dollar. I can't imagine the ramifications of this. Thoughts?

Deflation could be the next bubble, though I'd say student loan defaults are more likely.

I think it will be student loans. Luckily I only have $3500 left to pay back, so I'm not hurting in that area.

(10-16-2012 03:31 PM)Ninerfan1 Wrote:  Deflation could be the next bubble, though I'd say student loan defaults are more likely.

Yep. However you can't default on those. Durben/Cohen have a bill in the house to discharge private loans in bankruptcy. Guess who is blocking it?

(10-16-2012 04:58 PM)firmbizzle Wrote:  

(10-16-2012 03:31 PM)Ninerfan1 Wrote:  Deflation could be the next bubble, though I'd say student loan defaults are more likely.

Yep. However you can't default on those. Durben/Cohen have a bill in the house to discharge private loans in bankruptcy. Guess who is blocking it?

WHy should they discharge it? It's a bad idea.

They should be telling people to stop wasting time and money on worthless degrees. The market is giving the signals, nobody should be trying to defy reality.

(10-16-2012 04:58 PM)firmbizzle Wrote:  

(10-16-2012 03:31 PM)Ninerfan1 Wrote:  Deflation could be the next bubble, though I'd say student loan defaults are more likely.

Yep. However you can't default on those. Durben/Cohen have a bill in the house to discharge private loans in bankruptcy. Guess who is blocking it?

Given that they are all government backed now, like many mortgages, it'll be extraordinarily damaging to the economy.

Credit Cards, still way to many companies offering 0% teaser rates and all kinds of rewards programs to get people to CHARGE. Unsecured credit is even easier to walk away from than a house or car you can't afford.

Still lingering is another wave of foreclosures. BofA's Countrywide portfolio had about 50% of mortgages in a preforclosure status as of July. Of the remaining 50%, 60% were underwater and behind 1 - 2 payments. Either BofA takes a huge earnings hit to write-down the mortgages, or foreclose. Wells Fargo still has a lot of problem loans from Wachovia's GoldenWest purchase. The housing crisis is far from over.

Student loans, government debt, fiat currencies. In that order.

If it really is student loans that people expect to go under next, then if I were Mitt Romney I wouldn't be so gung-ho on pushing everyone to get student loans and cut other means of scholarship funding...

(10-16-2012 08:18 PM)mtsufan561 Wrote:  If it really is student loans that people expect to go under next, then if I were Mitt Romney I wouldn't be so gung-ho on pushing everyone to get student loans and cut other means of scholarship funding...

I should clarify, it's a "college isn't worth it bubble". Debt or the expense in general isn't worth it.

Deflation is the enemy. It's the reason they keep printing money.

The problem with the Dollar being a bubble is that there isn't anywhere else to put money.

1) Gold is grossly overvalued and does not function as a medium of exchange in a modern society.
2) The Euro is in worse shape than the Dollar
3) The SFR is way overvalued and isn't widely held enough to be a 'world currency'
4) The Pound isn't in much better shape than the Dollar. If even that
5) The Yen is stagnant. Too many people got burned in the past with that currency
6) The Yuan doesn't float
7) The Ruble isn't trustworthy
8) Brazil's economy is falling into recession.

I know that Russia, Venezuela and Iran want to reduce the influence of the US Treasury by trying to structure oil purchases in other currencies, but those currencies generally tend to get switched to Dollars immediately after the transation.

Obviously, we should try to shore up the dollar by raising revenue and reducing spending. But I'm not sure there really is a way out for the economy to switch currencies.

(10-16-2012 05:06 PM)DrTorch Wrote:  

(10-16-2012 04:58 PM)firmbizzle Wrote:  

(10-16-2012 03:31 PM)Ninerfan1 Wrote:  Deflation could be the next bubble, though I'd say student loan defaults are more likely.

Yep. However you can't default on those. Durben/Cohen have a bill in the house to discharge private loans in bankruptcy. Guess who is blocking it?

WHy should they discharge it? It's a bad idea.

They should be telling people to stop wasting time and money on worthless degrees. The market is giving the signals, nobody should be trying to defy reality.

Easy solution to the for profit sham schools...If more than 10 percent of your students qualify for deferments because you don't train them to make enough money to pay the government back, then the school gets cut off. And any private loans are dischargable in bankruptcy.

(10-16-2012 09:43 PM)Tom in Lazybrook Wrote:  

(10-16-2012 05:06 PM)DrTorch Wrote:  

(10-16-2012 04:58 PM)firmbizzle Wrote:  

(10-16-2012 03:31 PM)Ninerfan1 Wrote:  Deflation could be the next bubble, though I'd say student loan defaults are more likely.

Yep. However you can't default on those. Durben/Cohen have a bill in the house to discharge private loans in bankruptcy. Guess who is blocking it?

WHy should they discharge it? It's a bad idea.

They should be telling people to stop wasting time and money on worthless degrees. The market is giving the signals, nobody should be trying to defy reality.

Easy solution to the for profit sham schools...If more than 10 percent of your students qualify for deferments because you don't train them to make enough money to pay the government back, then the school gets cut off. And any private loans are dischargable in bankruptcy.

I think they just passed that law.

(10-16-2012 08:42 PM)Jugnaut Wrote:  I should clarify, it's a "college isn't worth it bubble". Debt or the expense in general isn't worth it.

Agree but I see it also as a 'higher education' bubble. The government funnels money as student loans to students. The schools benefit with a steady stream of students - until the kids start realizing that all that debt they took on did not get them a job and start warning others. When enough kids get to the "college isn't worth it" stage and quit taking the college route, schools will go into a panic as enrollment plunges. The bubble will pop. Lots of laid off faculty and staff.

Reduced influence for academia. They won't be happy. It's not fair that the government can't continue to enable the loading up of young students with debt while at the same time their policies are leading to fewer jobs. Cost increases are rising faster in higher education than elsewhere in the economy. When things begin to break, schools will need to get leaner in a hurry. Something is bound to fail in this dependency cycle and probably relatively soon, next few years.

(10-16-2012 09:43 PM)Tom in Lazybrook Wrote:  

(10-16-2012 05:06 PM)DrTorch Wrote:  

(10-16-2012 04:58 PM)firmbizzle Wrote:  

(10-16-2012 03:31 PM)Ninerfan1 Wrote:  Deflation could be the next bubble, though I'd say student loan defaults are more likely.

Yep. However you can't default on those. Durben/Cohen have a bill in the house to discharge private loans in bankruptcy. Guess who is blocking it?

WHy should they discharge it? It's a bad idea.

They should be telling people to stop wasting time and money on worthless degrees. The market is giving the signals, nobody should be trying to defy reality.

Easy solution to the for profit sham schools...If more than 10 percent of your students qualify for deferments because you don't train them to make enough money to pay the government back, then the school gets cut off. And any private loans are dischargable in bankruptcy.

I also agree discharging the debt is a bad idea. You'd have doctors/lawyers, high earners, etc just declaring bankruptcy to get rid of hundreds of thousands in student debt. They wouldn't need credit anyway so why not get rid of the debt? I've seen this happen.

(10-17-2012 08:13 AM)VA49er Wrote:  

(10-16-2012 09:43 PM)Tom in Lazybrook Wrote:  

(10-16-2012 05:06 PM)DrTorch Wrote:  

(10-16-2012 04:58 PM)firmbizzle Wrote:  

(10-16-2012 03:31 PM)Ninerfan1 Wrote:  Deflation could be the next bubble, though I'd say student loan defaults are more likely.

Yep. However you can't default on those. Durben/Cohen have a bill in the house to discharge private loans in bankruptcy. Guess who is blocking it?

WHy should they discharge it? It's a bad idea.

They should be telling people to stop wasting time and money on worthless degrees. The market is giving the signals, nobody should be trying to defy reality.

Easy solution to the for profit sham schools...If more than 10 percent of your students qualify for deferments because you don't train them to make enough money to pay the government back, then the school gets cut off. And any private loans are dischargable in bankruptcy.

I also agree discharging the debt is a bad idea. You'd have doctors/lawyers, high earners, etc just declaring bankruptcy to get rid of hundreds of thousands in student debt. They wouldn't need credit anyway so why not get rid of the debt? I've seen this happen.

Actually I think its a GOOD idea to allow bankruptcy discharges for student loans in certain instances. For example, when a school charges so much for tuition that students cant make enough to pay the loans back in a reasonable manner, then the federal guarantee should be revoked. And any new loans for that school should be private and dischargable. Set up a threshold regarding deferments and constructive defaults. Do it by major and by school. Lets make the schools carry some responsibility for ensuring that the education provided is actually financially sustainable. I don't think that if one does it by degree, that medical doctors are going to qualify for deferments in such numbers to allow for discharge of debts in bankruptcy.

I fail to understand why college tuition has dramatically increased while at the same time, average pay per instruction hour has actually fallen. Something isn't adding up. Actually I think I understand. So long as the government makes college 'affordable' by subsidizing expensive private (and sometimes for profit) schools, they can constantly raise tuition.

(10-16-2012 09:43 PM)Tom in Lazybrook Wrote:  

(10-16-2012 05:06 PM)DrTorch Wrote:  

(10-16-2012 04:58 PM)firmbizzle Wrote:  

(10-16-2012 03:31 PM)Ninerfan1 Wrote:  Deflation could be the next bubble, though I'd say student loan defaults are more likely.

Yep. However you can't default on those. Durben/Cohen have a bill in the house to discharge private loans in bankruptcy. Guess who is blocking it?

WHy should they discharge it? It's a bad idea.

They should be telling people to stop wasting time and money on worthless degrees. The market is giving the signals, nobody should be trying to defy reality.

Easy solution to the for profit sham schools

Why single them out? State schools started this problem and are far more culpable.

(10-17-2012 08:22 AM)Tom in Lazybrook Wrote:  

(10-17-2012 08:13 AM)VA49er Wrote:  

(10-16-2012 09:43 PM)Tom in Lazybrook Wrote:  

(10-16-2012 05:06 PM)DrTorch Wrote:  

(10-16-2012 04:58 PM)firmbizzle Wrote:  Yep. However you can't default on those. Durben/Cohen have a bill in the house to discharge private loans in bankruptcy. Guess who is blocking it?

WHy should they discharge it? It's a bad idea.

They should be telling people to stop wasting time and money on worthless degrees. The market is giving the signals, nobody should be trying to defy reality.

Easy solution to the for profit sham schools...If more than 10 percent of your students qualify for deferments because you don't train them to make enough money to pay the government back, then the school gets cut off. And any private loans are dischargable in bankruptcy.

I also agree discharging the debt is a bad idea. You'd have doctors/lawyers, high earners, etc just declaring bankruptcy to get rid of hundreds of thousands in student debt. They wouldn't need credit anyway so why not get rid of the debt? I've seen this happen.

Actually I think its a GOOD idea to allow bankruptcy discharges for student loans in certain instances. For example, when a school charges so much for tuition that students cant make enough to pay the loans back in a reasonable manner, then the federal guarantee should be revoked. And any new loans for that school should be private and dischargable. Set up a threshold regarding deferments and constructive defaults. Do it by major and by school. Lets make the schools carry some responsibility for ensuring that the education provided is actually financially sustainable. I don't think that if one does it by degree, that medical doctors are going to qualify for deferments in such numbers to allow for discharge of debts in bankruptcy.

I fail to understand why college tuition has dramatically increased while at the same time, average pay per instruction hour has actually fallen. Something isn't adding up. Actually I think I understand. So long as the government makes college 'affordable' by subsidizing expensive private (and sometimes for profit) schools, they can constantly raise tuition.

I can understand your reasoning for discharging the debt, I just disagree. That's cool

As for why tuition has gone up, there are a couple of reasons I think. Student loans were/are easy to get, thus schools can charge more. It's just like when home prices soared due to easy credit. Second, state funding is being cut so the schools try to make up for that funding shortage. Third is demand. There are a crap load of people trying to go to school. That always happens in a recession.