Loan Bubble To Exceed $1 Trillion: "It's Going To Create A Generation Of Wage Slavery" And Another Taxpayer Bailout

While one of the biggest complaints of #OccupyWallStreet protesters, and much of the balance of middle-class America, continues to be the burden of student loans, the paradox is that, as the USA Today reports once again on one of its favorite subjects, student loans are set to surpass $1 trillion in total notional for the first time in history on what appears to be relentless demand and interest for this cheap form of educational financing, making this debt burden the single largest form of consumer debt, well bigger than outstanding credit card debt, and smaller only compared to mortgage debt. "The amount of student loans taken out last year crossed the $100 billion mark for the first time and total loans outstanding will exceed $1 trillion for the first time this year. Americans now owe more on student loans than on credit cards, reports the Federal Reserve Bank of New York. Students are borrowing twice what they did a decade ago after adjusting for inflation, the College Board reports. Total outstanding debt has doubled in the past five years — a sharp contrast to consumers reducing what's owed on home loans and credit cards." What explains this insatiable demand for this kind of debt? Well, it's cheap, it's easily accessible (the collateral is education), and it is fungible - a student can take out a loan, yet use part or all of the balance for tangential purchases (that iPhone 4S sure would make me cool). But this, like every other debt, comes at a price.

Per USA Today:

Taxpayers and other lenders have little risk of losing money on the loans, unlike mortgages made during the real estate bubble. Congress has given the lenders, the government included, broad collection powers, far greater than those of mortgage or credit card lenders. The debt can't be shed in bankruptcy.

The credit risk falls on young people who will start adult life deeper in debt, a burden that could place a drag on the economy in the future.

"Students who borrow too much end up delaying life-cycle events such as buying a car, buying a home, getting married (and) having children," says Mark Kantrowitz, publisher of FinAid.org.

Naturally, just like in the credit bubble days, when NINJA loans were fast and furious, the lines in front of banks stretched around the block. Banks may or may not have known that the loans would be repaid, but nobody pressured borrowers to live in that big McMansion that "demanded" $1 down and a 99.9% LTV. Sure enough, when the day of reckoning comes, it is never the fault of the person who probably should have shown some restraint, but no: after all everyone else is doing it.

Well, it is the same thing now. And with generations of people indoctrinated that only those with a college degree can be successful, it is only obvious that student debt is now the next big bubble.

"It's going to create a generation of wage slavery," says Nick Pardini, a Villanova University graduate student in finance who has warned on a blog for investors that student loans are the next credit bubble — with borrowers, rather than lenders, as the losers.

Full-time undergraduate students borrowed an average $4,963 in 2010, up 63% from a decade earlier after adjusting for inflation, the College Board reports. What's happening:

Granted, unlike with the mortgage bubble collapse, this time we know, as Zero Hedge reported earlier in the week, that everyone is on the fraud. We quote from "The Fraud At The Heart Of Student Lending Exposed - The One Sentence Everyone Should Read"

A key reason why a preponderance of the population is fascinated with the student loan market is that as USA Today reported in a landmark piece last year, it is now bigger than ever the credit card market. And as the monthly consumer debt update from the Fed reminds us, the primary source of funding is none other than the US government. To many, this market has become the biggest credit bubble in America. Why do we make a big deal out of this? Because as Bloomberg reported last night, we now have prima facie evidence that the student loan market is not only an epic bubble, but it is also the next subprime! To wit: "Vince Sampson, president, Education Finance Council, said during a panel at the IMN ABS East Conference in Miami Monday that lenders are no longer pushing loans to people who can’t afford them." Re-read the last sentence as many times as necessary for it to sink in. Yes: just like before lenders were "pushing loans to people who can't afford them" which became the reason for the subprime bubble which has since spread to prime, but was missing the actual confirmation from authorities of just this action, this time around we have actual confirmation that student loans are being actually peddled to people who can not afford them. And with the government a primary source of lending, we will be lucky if tears is all this ends in.

So... debtors know it's a bubble, lenders know it's a bubble, everyone knows it's a bubble, yet it is growing faster now than ever before.

If nothing this is a fantastic exercise in observing a slow at first, then fast-motion train wreck from the side. It is without a shadow of a doubt, that not only will the student debt bubble pop, but writedowns on amounts outstanding will be massive, potentially resulting in another hit of 50% to total notionals, or about $500 billion. And since the borrowers will be fully tapped out, and the lenders will plead ignorance, and control the regulators and administration any way, is there any doubt who will once again be forced to pay for this upcoming bail out? This is something that does notrequire a college degree to figure out...





Zero Hedge

Israelis don't plan to notify Us if decision made to strike Iran

Israeli officials say they won't warn the U.S. if they decide to launch a pre-emptive strike against Iranian nuclear facilities, one U.S. intelligence official familiar with the discussions told the Associated Press. The pronouncement, delivered in a series of private, top-level conversations, sets a tense tone ahead of meetings in the coming days at the White House and Capitol Hill.

Israeli officials said that if they eventually decide a strike is necessary, they would keep the Americans in the dark to decrease the likelihood that the U.S. would be held responsible for failing to stop Israel's potential attack. The U.S. has been working with the Israelis for months to persuade them that an attack would be only a temporary setback to Iran's nuclear program.
RELATED STORIESThai police question 3 more Iranians in alleged bomb plot


Israeli Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak delivered the message to a series of top-level U.S. visitors to the country, including the chairman of the Joint Chiefs of Staff, the White House national security adviser and the director of national intelligence, and top U.S. lawmakers, all trying to close the trust gap between Israel and the U.S. over how to deal with Iran's nuclear ambitions.

Netanyahu delivered the same message to all the Americans who have traveled to Israel for talks, the U.S. official said.

The official spoke on condition of anonymity to discuss sensitive strategic negotiations.

The White House did not respond to requests for comment, and the Pentagon and Office of Director of National Intelligence declined to comment, as did the Israeli Embassy.

Iran claims its nuclear program is for peaceful purposes, but the International Atomic Energy Agency has raised alarms that its uranium enrichment program might be a precursor to building nuclear weapons. The US has said it does not know whether the government has decided to weaponize its nuclear material and put it on a missile or other delivery device.

The secret warning is likely to worry US officials and begin the high level meetings with Israel and the US far apart on how to handle Iran.

But the apparent decision to keep the U.S. in the dark also stems from Israel's frustration with the White House. After a visit by National Security Adviser Tom Donilon in particular, they became convinced the Americans would neither take military action, nor go along with unilateral action by Israel against Iran. The Israelis concluded they would have to conduct a strike unilaterally -- a point they are likely to hammer home in a series of meetings over the next two weeks in Washington, the official said.

Barak will meet with top administration and congressional officials during his visit. Netanyahu arrives in Washington for meetings with President Barack Obama next week.

The behind-the-scenes warning belies the publicly united front the two sides have attempted to craft with the shuttle diplomacy to each other's capitals.

"It's unprecedented outreach to Israel to make sure we are working together to develop the plan to deter Iran from developing a nuclear weapon," and to keep them from exporting terrorism, said Maryland Rep. Dutch Ruppersberger, the top Democrat on the House intelligence committee.

He traveled there with the intelligence committee chairman, Rep. Mike Rogers, R-Mich., to meet Israel's prime minister and defense minister, along with other officials.

"We talked about the fact that sanctions are working and they are going to get a lot more aggressive," Ruppersberger added.

They also discussed talked about presenting a unified front to Iran, to counter the media reports that the two countries are at odds over how and when to attack Iran.

"We have to learn from North Korea. All those (peace) talks and stalling and they developed a nuclear weapon," he said. "We are going to send a message, enough is enough, the stalling is over. ... All options are on the table."

"I got the sense that Israel is incredibly serious about a strike on their nuclear weapons program," Rogers told CNN on Monday. "It's their calculus that the administration ... is not serious about a real military consequence to Iran moving forward.

"They believe they're going to have to make a decision on their own, given the current posture of the United States," he added.

U.S. intelligence and special operations officials have tried to keep a dialogue going with Israel, despite the high-level impasse, sharing with them options such as allowing Israel to use U.S. bases in the region from which to launch such a strike, as a way to make sure the Israelis give the Americans a heads-up, according to the U.S. official, and a former U.S. official with knowledge of the communications

Cooperation has improved on sharing of intelligence in the region, according to one current and one former U.S. official. Israel is providing key information on Syria for instance, now that the U.S. has closed its embassy and pulled out both its diplomats and intelligence officials stationed there, the U.S. official said.

Read more: http://www.foxnews.com/politics/2012/02/27/israelis-reportedly-dont-plan-to-notify-us-if-decision-made-to-strike-iran/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+foxnews%2Fpolitics+%28Internal+-+Politics+-+Text%29&utm_content=Google+Reader#ixzz1nhQCSpea

Chrislam Starts To Spread In America

Pastors that are really wolves in sheep’s clothing
You knew this day was going to come, when the liberal “love gospel” preachers who, desiring to fill their seats and bank accounts, would find a way to merge apostate christianity with the Devil’s religion of Islam. That day is here.

And unto the angel of the church of the Laodiceans write; These things saith the Amen, the faithful and true witness, the beginning of the creation of God; I know thy works, that thou art neither cold nor hot: I would thou wert cold or hot. So then because thou art lukewarm, and neither cold nor hot, I will spue thee out of my mouth.” Revelation 3:14-16

Rick Warren with his new best friend, Christ rejector Cat Stevens, who changed his name to Yusef Isalm

Just recently, Rick Warren, founder and pastor of Saddleback Community Church in Orange County California, addressed the convention of the Islamic Society of North America. Warren stated that Muslims and Christians must work together to combat stereotypes, promote peace and freedom, and solve global problems. Christians and Moslems – faith mates, soul mates and now work mates! Chrislam!
Quote of the Day: “Before we “shake your hand” in responding to your letter, we ask forgiveness of the All-Merciful One and of the Muslim community around the world.” – Rick Warren in a speech to Muslims.

This weekend, the Memorial Drive Presbyterian Church in Houston along with Christian communities in Atlanta, Seattle, and Detroit will initiate a series of sermons that have been designed to produce an ecumenical reconciliation between Christianity and Islam. In addition to the sermons, the Sunday school lessons will center on the inspired teachings of the Prophet Mohammad. Qurans will be placed in the pews next to the Bibles. (NOTE: Due to the overwhelming response that this article has generated, the Pastor of Memorial Church has issued a semi-denial of the events we reported. They do not, however, deny supporting and teaching a doctrine called “Jesus in the Koran. Click here to read their semi-denial. So until other information is made available to NTEB, we will run the story as is, along with their side, and you the reader can decide what’s going on. But people, ask yourself…would any real, bible believing church try and teach it’s members about “Jesus in the Koran”? That’s blasphemy.)


The sign may be Photoshop, but the message it carries is all too real. Chrislam must be stopped now. If your church teaches this heresy - run!

The concept of Chrislam, now embraced by such preachers as Rick Warren and Robert Schuller, appears to have emerged from a program on the meaning of “love your neighbor” at Grace Fellowship Church in Atlanta, Georgia “In 2001, like most Americans, we were pretty awakened to the true Islamic presence in the world and in the United States,” says Jon Stallsmith, the outreach minister at Grace Fellowship. “Jesus says we should love our neighbors. We can’t do that without having a relationship with them.”

Stallsmith maintains that a rapprochement between Muslims and Christians can be achieved by the fact that Jesus is mentioned twenty-five times in the Quran.

The Chrislam movement has gained impetus by statements from President George W. Bush and that Christians, Jews, and Muslims all worship the same God and by Rick Warren’s reference to Isa (the Muslim name for Jesus) in his prayer at the inauguration of President Barack Obama. Only 30 percent of Americans have a favorable view of Muslims, according to a Pew Forum poll. At the same time, more than half the country says they know “not very much” or “nothing at all” about the Islamic faith. “The recent political developments and the fact that we’re fighting two wars in Muslim countries should sharpen that need to know how to talk to these guys,” Stallsmith insists “We want to find peace, reconciliation around a scriptural understanding of Jesus.”

Jesus in the Quran is neither the only-begotten Son of God nor the Messiah who was divinely appointed to restore the House of David. He is rather viewed as a prophet who was appointed by Allah to prepare mankind for the coming of Mohammad.”

Now the end Begins

Is Spain the next Greece?

3 doomsaying experts who foresee economic devasation ahead

NEW YORK – Behind the mainstream Wall Street happy talk about more stable financial markets and an improving economy are grim warnings of tough times ahead from a small cadre of doomsayers who warn that the worst of the financial crisis is still to come.




Harry Dent, author of the new book The Great Crash Ahead, says another stock market crash is coming due to a bad ending to the global debt bubble. He has pulled back on his earlier prediction of a crash in 2012, as central banks around the world have been flooding markets with money, giving stocks an artificial short-term boost. But a crash is coming in 2013 or 2014, he warns. "This will be a repeat of 2008-09, only bigger, when it finally hits," Dent told USA TODAY.

Gerald Celente, a trend forecaster at the Trends Research Institute, says Americans should brace themselves for an "economic 9/11" due to policymakers' inability to solve the world's financial and economic woes. The coming meltdown, he predicts, will lead to growing social unrest and anti-government sentiment, aU.S. dollar with far less purchasing power and more people out of work.

Celente won't rule out another financial panic that could spark enough fear to cause a run on the nation's banks by depositors. That risk could cause the government to invoke "economic martial law" and call a "bank holiday" and close banks as it did during the Great Depression.

"We see some kind of threat of that magnitude," Celente, publisher of The Trends Journal newsletter, warned in an interview.

Robert Prechter, author of Conquer the Crash, first published in 2002 and updated in 2009, is still bearish. He says today's economy has similarities to the Great Depression and warns that 1930s-style deflation is still poised to cause financial havoc. Prechter predicts that the major U.S. stock indexes, such as the Dow Jones industrials and Standard & Poor's 500, will plunge below their bear market lows hit in March 2009 during the last financial crisis. The brief recovery will fail as it did in the 1930s, he says.

2 very different viewpoints

If he's right, stocks would lose more than half of their value. "The economic recovery has been weak, so the next downturn should generate bad news in a big way," Prechter said in an e-mail interview. "For the third time in a dozen years, the stock market is in a very bearish position."

These dire forecasts differ sharply with the brighter outlooks being espoused by the bulls, or optimists, on Wall Street. Recent stock performance and fresh readings on the economy also suggest a future that is less gloomy than the doomsayers predict.

The Dow, for instance, is in rebound mode and has climbed back to levels not seen since the early days of the financial crisis in May 2008. Tech stocks in the Nasdaq composite are trading at levels last seen in 2000. Data on auto sales, manufacturing and consumer confidence have been firming. Job creation is also on the rise. The unemployment rate dipped to 8.3% in January, its lowest level in three years.

As a result, stock market strategists such as Rod Smyth of RiverFront Investment have been raising their outlooks for 2012. Smyth raised his target range for the S&P 500 to 1250-1500. If the market hits the top of the range, stocks would have risen 10%. Similarly, Brian Belski, strategist at Oppenheimer, recently said he remains comfortable with his year-end 2012 target of 1400. That's up 2.5% from here. Bespoke Investment Group published research that shows the market, which is closing in on a new bull market high, has done well in the past once it breaks through old highs.

Bulls are betting that Europe's banking system will be stabilized, minimizing the risk of a severe credit crisis. Bulls are also encouraged by recent data from around the world that show modest growth and a pickup in economic momentum.

The causes of economic calamity

So what has the super-bears so worried?

Dent says the combination of aging Baby Boomers exiting their big spending years and a shift toward debt reduction and austerity around the world will cause the economy to suffer another severe leg down, making it more difficult for the government and Federal Reserve to avert a new meltdown. He has not always been bearish. In 1993 he wrote The Great Boom Ahead.

Celente, who as far back as 2008 has been warning of economic calamity, argues that the ballooning debt and the growing divide between the haves and have-nots has put the U.S. in a weakened state.

As a result, he says, the nation is more vulnerable to potential shocks. He worries about potential chaos caused by people all trying to yank their money out of financial markets at the same time. He also sees risk in the event there is a loss of confidence in elected leaders.

Societal unrest in the form of street protests and increased crime are possible, too, he adds. Markets could also be spooked by an oil price shock due to a military conflict between Israel and Iran, or a bad outcome to Europe's debt crisis.

"2012 is when many of the long-simmering socioeconomic and political trends that we have been forecasting and tracking will climax," Celente noted in his Top 12 Trends 2012 newsletter. In an interview he added: "When money stops flowing to the man on the street, blood starts flowing in the street."

While bulls are urging investors to get back into stocks, the doomsayers are advising a far different strategy. Dent's investment advice is simple: "Get out of the way." He recommends buying short-term U.S. Treasury bills and the U.S. dollar, which will benefit from safe-haven cash flows. He says stocks will fall sharply in value.

Celente's advice centers on survival. He says buy gold so you don't lose purchasing power when the value of the dollar plummets. He says buy a gun to protect your family against desperate people in search of food and money. He says plan a getaway to places with more stable finances and governments.

Prechter says to keep your powder dry and buy when things get really bad: "When things get really scary, as in early 2009, I get bullish."

USA Today

QE 3 Is Already Taking Place, Look At The Federal Reserve`s Balance Sheet

We already have QE 3. Get out the Federal Reserve‘s balance sheet. You’ll see that they’ve been pumping up – you can see unadjusted M2 is going through the roof. Look at their balance sheet.

All sorts of assets are suddenly appearing on their balance sheet. Where did they come from? They didn’t come from the Tooth Fairy; they came because they’re in there buying in the market as fast as they can. There Is QE 3 already. They don’t call it that but it’s there. –in Reuters

Jim Rogers is an author, financial commentator and successful international investor. He has been frequently featured in Time, The New York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The Financial Times and is a regular guest on Bloomberg and CNBC.

America 1950 vs. America 2012

Would you rather live in the America of 1950 or the America of 2012?  Has the United States changed for the better over the last 62 years?  Many fondly remember the 1950s and the 1960s as the "golden age" of America.  We emerged from World War II as the wealthiest and most powerful nation on the planet.  During that time period, just about anyone that wanted to get a job could find a job and the U.S. middle class expanded rapidly.  Back in 1950, America was still considered to be a "land of opportunity" and the economy was growing like crazy.  There was less crime, there was less divorce, the American people had much less debt and the world seemed a whole lot less crazy.  Most of the rest of the world deeply admired us and wanted to be more like us.  Of course there were a lot of things that were not great about America back in 1950, and there are many things that many of us dearly love that we would have to give up in order to go back and live during that time.  For example, there was no Internet back in 1950.  Instead of being able to go online and read the articles that you want to read, your news would have been almost entirely controlled by the big media companies of the day.  So there are definitely some advantages that we have today that they did not have back in 1950.  But not all of the changes have been for the better.  America is in a constant state of change, and many are deeply concerned about where all of these changes are taking us.

There has never been any society in the history of the world that has been perfect.  America was flawed in 1950 just as America is flawed today.

But that doesn't mean that we should not reflect on how much things have changed over the past 62 years.

So which version of America would you rather live in?

America 1950 vs. America 2012 - you make the call....

In 1950, a gallon of gasoline cost about 27 cents.

In 2012, a gallon of gasoline costs $3.69.

In 1950, you could buy a first-class stamp for just 3 cents.

In 2012, a first-class stamp will cost you 45 cents.

In 1950, more than 80 percent of all men were employed.

In 2012, less than 65 percent of all men are employed.

In 1950, the average duration of unemployment was about 12 weeks.

In 2012, the average duration of unemployment is about 40 weeks.

In 1950, the average family spent about 22% of its income on housing.

In 2012, the average family spends about 43% of its income on housing.

In 1950, gum chewing and talking in class were some of the major disciplinary problems in our schools.

In 2012, many of our public schools have been equipped with metal detectors because violence has become so bad.

In 1950, mothers decided what their children would eat for lunch.

In 2012, lunches are inspected by government control freaks to make sure that they contain the "correct foods" in many areas of the country.  For example, one 4-year-old girl recently had her lunch confiscated by a "lunch monitor" because it did not meet USDA guidelines....

A preschooler at West Hoke Elementary School ate three chicken nuggets for lunch Jan. 30 because the school told her the lunch her mother packed was not nutritious.

The girl’s turkey and cheese sandwich, banana, potato chips, and apple juice did not meet U.S. Department of Agriculture guidelines, according to the interpretation of the person who was inspecting all lunch boxes in the More at Four classroom that day.

The Division of Child Development and Early Education at the Department of Health and Human Services requires all lunches served in pre-kindergarten programs - including in-home day care centers - to meet USDA guidelines. That means lunches must consist of one serving of meat, one serving of milk, one serving of grain, and two servings of fruit or vegetables, even if the lunches are brought from home.

In 1950, the United States was #1 in GDP per capita.

In 2012, the United States is #13 in GDP per capita.

In 1950, redistribution of wealth was considered to be something that "the communists" did.

In 2012, the U.S. government redistributes more wealth than anyone else in the world.

In 1950, about 13 million Americans had manufacturing jobs.

In 2012, less than 12 million Americans have manufacturing jobs even though our population has more than doubled since 1950.

In 1950, the entire U.S. military was mobilized to protect the borders of South Korea.

In 2012, the U.S. borders with Mexico and Canada are wide open and now there are 1.4 million gang members living inside the United States.

In 1950, there were about 2 million people living in Detroit and it was one of the greatest cities on earth.

In 2012, there are about 700,000 people living in Detroit and it has become a symbol of what is wrong with the U.S. economy.

In 1950, the Dow Jones Industrial Average was slightly over the 200 mark.

In 2012, the Dow Jones Industrial Average is threatening to soar over the 13,000 mark.

In 1950, corporate taxes accounted for about 30 percent of all federal revenue.

In 2012, corporate taxes will account for less than 7 percent of all federal revenue.

In 1950, the median age at first marriage was about 22 for men and about 20 for women.

In 2012, the median age at first marriage is about 28 for men and about 26 for women.

In 1950, many Americans dressed up in suits and dresses before getting on an airplane.

In 2012, security goons look at the exposed forms of our women and our children before they are allowed to get on to an airplane.

In 1950, each retiree's Social Security benefit was paid for by 16 workers.

In 2012, each retiree's Social Security benefit is paid for by approximately 3.3 workers.

In 1950, many Americans regularly left their cars and the front doors of their homes unlocked.

In 2012, many Americans live with steel bars on their windows and gun sales are at record highs.

In 1950, the American people had a great love for the U.S. Constitution.

In 2012, if you are "reverent of individual liberty", you may get labeled as a potential terrorist by the U.S. government.

In 1950, the United States loaned more money to the rest of the world than anybody else.

In 2012, the United States owes more money to the rest of the world than anybody else.

In 1950, the U.S. national debt was about 257 billion dollars.

In 2012, the U.S. national debt is 59 times larger.  It is currently sitting at a grand total of $15,435,694,556,033.29.  Surely our children and our grandchildren will thank us for that.

One of the only things that is constant in life is change.

Whether we like it or not, America is going to continue to change.

Back in the 1950s and 1960s, about 70 percent of all American adults were married.

Today, only about 50 percent of all American adults are married.

We are more independent, less religious, more addicted to entertainment and more doped up on prescription drugs than Americans used to be.

We have a higher standard of living than Americans in 1950 did, but we are also drowning in an ocean of debt unlike anything the world has ever seen.

For a lot more on how the U.S. economy is doing in 2012, just check out this list of interesting facts.

So is America 2012 a better version than America 1950 was?

Have we made progress since then or are we going backwards?

Please feel free to leave a comment with your thoughts below....

Economic Collapse