Delinquencies On Student Loans Surpass Those On Credit Card Debt

This is not good at all. For those of you that I been following this blog know that I consider "Student Loan Debt" to be the latest asset bubble ($1 trillion) that will surpass in severity the sub-prime mortgage debacle of 2007-08.  It is only a matter of time.

The Delusional Bernanke

Earlier in the week, Senator Bob Corker asked Bernanke to respond to his dismal record on debasing the dollar and his record on price inflation.  Bernanke responded proudly that be believes his "inflation record is the best of any Federal Reserve Chairman in the post-war period." I know "facts" can get in the way of anyone; however, Bernanke is totally delusional about his record on inflation. Simply look at the following chart.

Do You Know Your U.S. Constitution? Do You Know Your Fourth Amendment Rights?

But, It's All Different This Time.

Bernanke's Twin

David Lereah, Chief Economist for the National Associate of Realtors (NAR), has made some pretty amazing (wrong) prognostication since 2005. Unlike Bernanke, he left his post at the NAR in 2007.  However, he did work for an organization whose motto is, "Its Always the Best Time to Buy." Therefore, I guess he was just carrying out the party line.  Just look at what he has said between 2005 and 2007.  Pretty amazing stuff, indeed!

“The continuing shortages of housing inventory are driving the price gains. There is no evidence of bubbles popping.” – David Lereah, NAR – August 2005

“The steady improvement in home sales will support price appreciation despite all the wild projections by academics, Wall Street analysts, and others in the media.” – David Lereah, NAR – January 10, 2007

However, in 2009, he then admitted in an interview with Money Magazine that he was nothing but a shill for the real estate industry.  (I wonder if Bernanke will ever have one of those truth moments when he leaves the Fed.)  More specifically, he states, “I was pressured by NAR executives to issue optimistic forecasts — then was left to shoulder the blame when things went sour. I was there for seven years doing everything they wanted me to. I worked for an association promoting housing, and it was my job to represent their interests. If you look at my actual forecasts, the numbers were right in line with most forecasts. The difference was that I put a positive spin on it. It was easy to do during boom times, harder when times weren’t good. I never thought the whole national real estate market would burst.”  I am always amazed at how humanity operates after they have one of those righteous moments after the fact.  I am sorry Mr. Lereah but you still have no creditability in my book.

And, for the NAR, they replaced Mr. Lereah with Lawrence Yun, who continues in the great footsteps of Mr. Lereah.  Mr. Yun recently assured the public that it was the best time to buy a home during the entire housing slide.  All what I can say is that Mr. Bernanke must be very proud of the work that Mr. Lereah did and the work that Mr. Yun is currently doing. 

For a more insightful reading on this topic, go to "Zero Hedge."

 

Yod-Gimel

To write "13" in Hebrew is simply two Hebrew letters, "yod-gimel."  The number "13" means rebellion and depravity.  Welcome to 2013!

Sequestration

For the current fiscal year, our Federal government is going to spend $3.565 trillion.  Trouble is that the Federal government is only going to take in something like $2.3 trillion.  So, our nation will have another trillion dollar deficit plus for the current fiscal year.  Now, where am I going with this since it  is not nothing new?  The answer is "sequestration."  The debate going on now between the Administration and Congress is how do we cut $85 billion from the current projected spending of $3.565 trillion.  Yes, that is only $85 billion, or 2.3%.  Are you telling us that all this debate is over trying to cut 2.3% from this year's budget?  Yes, that is correct.  However, to be more specific, the Obama Administration, which by the way put forth and approved the "sequestration plan," stated that the $85 billion cut could only be from discretionary spending, not the mandatory spending.  Since discretionary spending amounts to 35% of government spending, the true percentage of cuts amounts to approximately 7%.  But, I have a real problem with our government who can not find $85 billion of cuts when it comes to spending $3.565 trillion.  Just with all the fraud and waste that goes on within Washington, that amount should be easy to find.  So give us all break, Administration and Congress, and do your job. You put us into this mess, now fix it! Trouble is, I really don't believe that they will fix it, which will cause our economy will spiral out of control. 

Bernanke: Total Lack of Creditability

I wonder how he gets to keep his job. Over and over again from 2005 to 2007, he stated that the economy was on sound footings, and the Fed had the all those sub-prime mortgages contained.  That is, no real estate contagion would occur!  Now in 2013, Bernanke declares to an audience with dealers and investors the following: "Concerns that the central bank’s easy monetary policy has spawned economically-risky asset bubbles is over stated." In other words, he simply brushed off any concern that the Fed has once again engineered a likely asset bubble in debt securities and student loans.

For further enlightenment to Bernanke's total lack of any creditability going forward, review the following video:

Cost of Health Care

What is wrong with the following chart?

$GLD: $150 or Bust!

$SLV: $26 or Bust?

What Does Wal-Mart Know That We Don't

For those of you that have been following my posts, you know that my Wal-Mart post of Friday, November 16, 2012 was not a ringing endorsement to go out and buy the stock. As a matter of fact, I was and am still extremely bearish on the stock. Given the above statement by its Vice President of Finance, I just might be right on the future direction of WMT's stock.

Institute for Works of Religion (IOR)

 

The "Institute for Works of Religion, or the IOR" sounds innocuous enough.  Doesn't it?  I would garner that most people have never heard of it, but they have heard of the Vatican Bank. Why am I blogging about the IOR?  Well, I believe, as many do, that the IOR is a very powerful banking entity throughout the world that operates without much transparency; and the Vatican has just named its new president.  He is Ernst von Freyberg, a German attorney.  And, why is Mr. Freyberg significant?  Not that he is so significant, but his country definitely is in regard to the "Eschaton."   There has always been a very close relationship between Germany and the Vatican.  And, I believe that as time progresses that relationship will become even closer.  As I have blogged in the past, Germany is definitely the country to watch very closely going forward not only as a financial power but as a military power.

Germany, Spain Set To Pull The Plug On Green Energy

What do we have here?  Germany and Spain are refusing to subsidize the "Green Industry," just when the U.S. is still trying to make it work.  I guess consumers in Germany and Spain got tired of paying a surcharge of 14% of their electric bills to subsidize the totally unprofitable "Green Monster." Check out the story at "Zero Hedge."

Unemployment Tops 55% for the 15-24 Age Group in Greece and Spain

Six out of ten, 15-24 years of age, in Greece are unemployed.  Spain's 15-24 years of age are not that far behind at 55.6% unemployed.  I am sorry but all this talk coming from Europe and in American that the economies of the world are finally starting to turn around is a bunch of you know what.  Simply look at the chart below and you tell me what the future holds for all these young individuals with all kinds of time on their hands.  Would you say the possibility of riots?

23% of Americans are Illiterate in America

Please include attribution to OnlineCollegeCourses.com with this graphic.

Five Million College Grads in Jobs that Don't Require a High School Diploma

A new study by the "Center for College Affordability and Productivity" finds that 48% of recent college graduates are now in jobs that do not require a bachelor’s degree, and 37% hold jobs that require just a high school diploma.  The median starting salary for students graduating from four-year colleges in 2009 and 2010 was $27,000, down from $30,000 for those who entered the work force in 2006 to 2008, according to the study.  As a matter of fact, college graduates are fortunate to find any job in today’s bleak economy.  In 2006 and 2007, 90% of all college graduates found a job within a year of graduating.  Since 2011, just 56% of college graduates are able to find work.

The choice of major is extremely important in finding that first job, according to the New York Times. "Young graduates who majored in education and teaching or engineering were most likely to find a job requiring a college degree, while those who majored in Latin American studies and humanities majors were least likely to do so."  Among all recent education graduates, 71.1 percent were in jobs that required a college degree; of all area studies majors, Latin American studies and humanities majors, the share was 44.7 percent. 

Socrates

The America Way

 

What is the American way?  Debt and more debt!  Our national debt exceeds $16.5 trillion, which is greater than our GDP.  Our federal deficit for 2013 will probably exceed $1 trillion for the fifth year in a row.  Households carry $12.8 trillion in consumer and mortgage debts.  One-third of Americans has no savings and approximately half are one to two paychecks from being bankrupt.  Food stamp recipients are at a all time high.  Interest rates on all types of savings accounts for all practical purposes are "zero," which penalizes savers, or those individuals that are prudent about their financial affairs.  Since there is no incentive to save at a zero interest rate, individuals are forced to invest in high-risk investments in order to reach for yield.  The problem with that investment strategy is that with high yield comes high risk.  High risk simply means that there is a good chance that one will lose part or the entire principal that one has invested. 

So, who is responsible for this American way of life?  I hate to be redundant, but the answer is yet again the Federal Reserve System.  See, the Fed realizes that this phantom growth over the past decade in GDP has only been due to debt.  Therefore, in order to keep this game afloat, the Fed is trying to persuade the American public through the “wealth effect,” which would be the rising stock market, that its expansionary policies are really working.  If you are outside of Wall Street, say Main Street, I don’t believe that argument carries any weight. The reason being is that you want to see tangible signs of real benefits, like job growth, increase real wealth, not illusory stock market gains.  (Remember what the market gives it can as quickly take it all away.)

No More Saturday Mail Delivery

From the AP, "The U.S. Postal Service will stop delivering mail on Saturdays but continue to deliver packages six days a week under a plan aimed at saving about $2 billion, the financially struggling agency says."

The completely broke U.S. Postal Service, which last fiscal year lost $16 billion, will eventually have to be bailed out by the government.  (Just like Fannie Mae, Freddie Mac, and Wall Street.)  Stopping mail delivery one day a week, with the exception of packages, will simply buy some time, not much, for the 500,000 postal workers.

CBO Forecast: Dire -- But Wait, Prosperity is Just Around the Corner

The Congressional Budget Office's (CBO) just-released economic forecast for 2013 is nothing to write home about, to say the least.  GDP is expected to grow by only 1.4%, which I consider is way too high, the unemployment rate will "stay near" 8%, which I consider will reach at least 8.7%, the federal deficit will reach $845 billion, which I believe will be at least $1.2 trillion, and ObamaCare will cost 7 million their health insurance, which I estimate to be at least 10 million.

The CBO then goes on to say that the economy will improve after this year.  Do you really believe the CBO?  After three years of being told by this government that "prosperity" is just around the corner, I just don't see how anyone can believe what they tell us.

$INDU: Extremely Overbought

The Most Hated Form in the United States

Today, I grief the 100th birthday of the overturning of  Article I, Section 9 of the U.S. Constitution that explicitly prohibited a general income tax.  In its place, Congress ratified 16th amendment, which established the right to impose a Federal income tax on Americans.

A copy of the original "1040 Form" is as follows with its tax rates between 1% and 6%:

After seeing the above "1040 Form" in its total simplicity, don't you yearn for the good old days when you did not need a CPA or a tax attorney to file your income taxes?  I know, I do!

Employment to Population Ratio, or Where are the Jobs?