Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Memetrics
novahockey
quarterback
ScottC
yellojktVital Statistics:
| Last | Change | |
| S&P futures | 4,159 | 15.27 |
| Oil (WTI) | 95.15 | 0.26 |
| 10 year government bond yield | 3.10% | |
| 30 year fixed rate mortgage | 5.74% |
Stocks are higher as we await the Jackson Hole economic summit. Bonds and MBS are down small.
Second quarter GDP was revised upward from -0.9% to -0.6% as the estimate for personal consumption was increased. The GDP Price Index rose 7.7% on a year-over-year basis. Ex-food and energy it rose 4.4%. These rates were the same as the first estimate.
Note the Atlanta Fed’s GDP Now estimate for the third quarter was updated yesterday. They now see Q3 GDP rising at a 1.4% rate, a downward revision from the 1.6% predicted a week ago.
Housing affordability improved for the second straight month, according to the MBA. “Affordability conditions improved modestly in most of the country in July, as slightly lower mortgage rates and a decrease in the median loan amount led to the typical homebuyer’s mortgage payment falling $49 from June,” said Edward Seiler, MBA Associate Vice President of Housing Economics and Executive Director of the MBA Research Institute for Housing America. “Homebuyer demand has faltered this summer, as lingering economic uncertainty, high inflation and still-high mortgage rates caused many prospective buyers to delay their home search. The combination of a strong job market and moderating home-price growth could entice some of these buyers to return in the coming months.”
The silver bullet that will offset rising rates and home prices is wage inflation. Wage inflation generally lags goods and services inflation since raised are usually negotiated at the end of the year.
Note that the college loan forgiveness plan that the Administration recently unveiled might help here too, though it probably will just cause colleges to raise tuition in response.
Initial Jobless Claims ticked down to 243k last week. Despite all of the economic headwinds, the labor market continues to hold up.
Filed under: Economy |
All Things in Moderation 
Over/Under for the next round of student loan forgiveness?
LikeLike
I can’t believe more people aren’t up in arms about this.
It is transferring student debt from people who owe it to people who never took it out or paid it off.
LikeLike
I actually think they are up in arms.
LikeLike
I guess since woke over-educated and under-employed women make up the base of the democrat party, this is a sop to make up for the loss of Roe v Wade.
LikeLike
I don’t know who it plays well with outside of people who were going to vote Democrat already, no matter what. I guess it’s to help close the enthusiasm gap?
LikeLike
Theoretically this is unconstitutional, but I don’t know who would have standing to file a suit.
LikeLike
I don’t think it’s unconstitutional. It may exceed Biden’s and the Education Secretary’s statutory authority.
LikeLike
“I can’t believe more people aren’t up in arms about this.”
I think all the money that was given away during the pandemic relief has normalized it.
That’s how the Democrats are messaging it, that if you got a PPP loan and it was forgiven, then you are a hypocrite for calling out this round of student loan forgiveness.
They aren’t entirely wrong, but mostly it shows the moral hazard of giving away free money in the first place. Once you start, there’s no clear dividing line on where to stop.
“It is transferring student debt from people who owe it to people who never took it out or paid it off.”
Assuming it’s ever actually paid off. It’s just been tacked onto the deficit, like everything else. If taxes were being raised to pay for it, it would be a different story but that linkage was broken a while back. It will probably mostly manifest in higher inflation.
LikeLike
It will be more and come around in late summer of 2024, coincidentally.
LikeLike
I don’t know why I’m doing this, especially after Brent’s comments re women, but here’s what I think is a very interesting debate from moderates about the student loan dilemma. Not giving my opinion, just thought it was a fair analysis without all the histrionics.
https://thetriad.thebulwark.com/p/student-loan-war-mania
LikeLike
lms:
especially after Brent’s comments re women
I didn’t see a comment about women. I saw a comment about “woke over-educated and under-employed women”.
LikeLike
Gender and race are very broad categories. That’s why it’s always important to be specific!
LikeLike
“If you think of the higher-ed system as a kettle that is boiling, loan forgiveness is releasing steam in order to temporarily stop the whistle. It does nothing to turn down the heat on the burner.”
I think this is (and should be self-evidently) incorrect. Injecting more money through any channel into an already hyper-distorted market will only drive prices up.
“Biden’s plan is going to cost taxpayers about $360 billion. That’s real money.”
Under the current circumstances, I think this is incorrect. It will cost significantly more, because it will also be inflationary. On top of a lot of other inflationary spending. And that will not only cost more than $360 billion, the erosion of purchasing power will impact the lower classes the most.
The rest of the post is for subscribers and I don’t subscribe to The Bulwark, alas.
LikeLike
And here’s a link to the divide between men and women re…………..student loans. Once again no debate or comment from me, just thought if might be interesting as a counter intuitive. From 2019 so not part of the current issue.
https://collegecandy.com/2019/06/04/women-affected-more-than-men-by-college-loans-here-is-why/
LikeLike
women are the majority of college students and the majority of college graduates. and they owe the majority of student loan debt.
So why is this my problem? I thought women were strong independent powerful don’t need no man, fish bicycle and all that.
If the government decided to give 10k to a people in a male dominated field, say plumbers, the feminist left would go apeshit.
LikeLike
Nope
LikeLike
are you kidding? the same people who think a WNBA player should make the same as Lebron James because they do “the same job?”
LikeLike
Brent, I have no idea what you’re talking about and pretty sure I wouldn’t actually care one way or another about it. I guess we all know men are supreme earners when it comes to sports. As far as actual education goes, which is different…………….women are at least trying to catch up.
LikeLike
It isn’t 1969 anymore. Women get the majority of the degrees, are the majority of college students, and the majority of graduates in law school and med school.
If the percentages were reversed, there would be Congressional hearings to use the levers of government to equalize it.
Women wanted equality. They got it. Let them take the good along with the bad. And the bad includes taking accountability for their own actions and decisions without relying on the government or ex-husbands to bail them out.
LikeLike
BTW, a lot of us women are actually married to plumbers, UPS drivers, or other working men, and from my perspective we love them. They make the world go round, if anyone ever gave my husband a financial break as a Vet, business owner, without a college degree I wouldn’t turn it down.
LikeLike
As I always say, there are women and Women.
women in general might be okay with that, but Women would not.
LikeLike
I suspect most people wouldn’t turn down a financial break (I wouldn’t!). Rather every break is sound financial policy for the country at large is another question.
LikeLike
What does this have to do with a discussion about who benefits most from Biden’s bribery attempt?
LikeLike
Technically Brent, you spell it as Womyn.
No “men” in Womyn.
LikeLike
Scott, would you characterize the Trump checks that went out (with his name as the signer) as bribery?
https://www.washingtonpost.com/politics/coming-to-your-1200-relief-check-donald-j-trumps-name/2020/04/14/071016c2-7e82-11ea-8013-1b6da0e4a2b7_story.html
LikeLike
jnc:
Scott, would you characterize the Trump checks that went out (with his name as the signer) as bribery?
No, I think that was more akin to reparations for having prevented people from earning a living.
But more generally I do consider any wealth redistribution plan to be essentially a vote-buying scheme, as I said some time ago.
LikeLike
PPP was redress for the government preventing people from working. It also passed congress and went through the legislature, which is an important distinction in my mind.
But it never should have happened—government never should have stepped in to close businesses and decide what work was essential and what wasn’t. Should never have been necessary.
LikeLike
lms:
It seems to me that the article confirms exactly what Brent said…women get the majority of loans and hence will be the primary beneficiaries of Biden’s bribery attempt.
Beyond that, though, I think there are a lot of problems with the analysis, but this one was particularly special:
According to the savingforcollege.com article, “When women fill out the Free Application for Federal Student Aid (FAFSA), their Expected Family Contribution (EFC) is lower than that of men. That means that women start with fewer resources to pay for college, and have to rely on more financial aid to cover the gap.”
That is hilarious spin, and makes no sense whatsoever. It implies one of two things. Either people with lower incomes are more likely to have daughters than sons or people with lower incomes are less likely to send their sons to college than to send their daughters. The first is an absurdity, and the second, while possible, would actually be favorable to women. But it as spun as a negative. What a joke.
LikeLike
exactly. Having a lower EFC is a good thing. The author clearly doesn’t grasp the basics.
LikeLike
Or they are dishonest. Most journalism these days isn’t about following the facts wherever they lead, but finding (or spinning) information to support the argument you are starting with.
It’s all Op-Ed’s now.
LikeLike
I’ve found it’s less about women vs men on this issue than generational.
The underemployed college educated young people have bought into the idea that capitalism has failed, that it’s the Boomers’ fault, and that therefore they are entitled to this. And the Twitter media class is amplifying that because it perfectly describes them.
There’s a massive amount of resentment based on the idea that the previous generations manipulated “the system” to their advantage and passed along the problems and the tab to the younger generation. Like most ideas of this sort, it contains a kernel of truth (see national debt) that is then used to justify preexisting ideology.
I’ve given up and embraced nihilism. Pour another bourbon and watch it all burn.
LikeLike
I foresee a lot of shortages as tradesmen retire and over-educated millennials and genz-ers have little useful skills for production.
Tanner the sociologist ain’t about to work on a North Dakota oil rig.
LikeLike
Lol “Tanner” Thought Chad was the generic Sociologist.
LikeLike
A shortage of everybody. Competent bureaucrats. Middle-managers who have any idea how to manage. Pundits and political writers who can do something more than regurgitate Tweets. White collar workers who can do an actual serious business plan or do double entry accounting.
LikeLike
“Women Affected More Than Men By College Loans”
That’s sort of like arguing that one sex or the other is more impacted by capital gains taxes. While it may be true, it elides the fact that it’s a good problem to have capital gains in the first place.
“It goes without saying that college is expensive. While it provides students with a lot of benefits – a higher level of education and a degree, valuable connections with professors and advisors, and strong friendships – it comes at a huge cost.”
Note that significantly increased lifetime earning potential is not listed as one of the benefits. I’d submit that for the purpose of debating student loan forgiveness, that’s more relevant than “strong friendships”. (Presumably the proles who don’t go to college are unable to form significant emotional bonds over their lifetime due to their stunted intellects and limited educations.)
LikeLike
Historically, college has been exceeding expensive and very exclusive, it’s only recently that it’s been perceived as required for everyman. I don’t see how you reconcile it being required for everyman and maintain it’s credentially as some sort of economic benefit.
LikeLike
you don’t. At this point, college is as much as an “investment” as a vacation is for a lot of people
LikeLike
Sorry guys I’m not here to debate this stuff, just trying to give you a different viewpoint. Ignore it if you want it doesn’t really matter to me one way or another……………..
LikeLike
This would be like Trump writing a $10,000 check to gun owners because they got over-indebted buying too much ammo.
LikeLike
Ok, where do I sign up for the gun loan forgiveness program?
LikeLike
Even some of the progressive writers at the Post get the real issues:
Again, after all the free money the government handed out since 2020, I think the shock value has worn off. This is just one more check that either you qualify for or you don’t. The “principle” was breached a while back.
LikeLike
My solution to excessive student loan debt is the same that I proposed for the mortgage crisis: Make it dischargable in bankruptcy with appropriate conditions.
Have a five or ten or whatever year period after it’s first incurred where it’s not dischargable, and then if after that period the person still can’t pay it back then it they can file bankruptcy and have it treated like the rest of their debt and balance the creditor rights accordingly. That way there’s still a way to “let off steam” but it’s not just given away with no consequences.
Same thing with primary residence mortgages. Be able to cram them down to the market value of the underlying asset, just like you can do with car loans (and second house mortgages) today.
That’s the way to fix the problems systemically while still balancing debtor and creditor rights vs just declaring a debt jubilee every so often.
LikeLike
I’ve never understood why your solution is never considered. I always figured that Congress was afraid to re-open the Pandora’s Box of bankruptcy law or that both sides want student loan debt as an issue.
LikeLike
Because it would require legislation. Biden’s student loan forgiveness is based on the premise that he can do it unilaterally under existing law.
LikeLike
jnc:
My solution to excessive student loan debt is the same that I proposed for the mortgage crisis: Make it dischargable in bankruptcy with appropriate conditions.
Agreed.
LikeLike
I also believe student loan debt should be dischargeable through bankruptcy, and it’s always seemed crazy to me that it isn’t.
But shouldn’t be hard to make it happen. Apparently Biden can just issue an executive order.
LikeLike
I think I’ve been convinced. Since we have a “student loan crisis”, let’s address the root of the problem and outlaw student loans. Everyone pays cash from now on.
LikeLike
The thing that amazes me is the rate of inflation for textbooks has risen linearly with college tuition. Yet technology has reduced the price of the printed word.
This seems worthy of an antitrust investigation.
LikeLike
Textbooks for K-12 get more expensive. Then you also have to buy access to the digital version which is more expensive and can’t be kept or resold.
And the technology involved is usually less than optimal.
It’s a scam.
LikeLike
jnc:
Since we have a “student loan crisis”, let’s address the root of the problem and outlaw student loans.
All you need to do is re-privatize the student loan industry.
LikeLike
Package up. Re-privatize student loans. Subsidize or pay for at least potentially useful trade school and community college degrees or certifications. Propose some reforms on colleges that take federal money regarding what they do with their endowments or cap tuition based on their endowments. Blah blah blah. A suite of reforms plus subsidization that has an actual social benefit—like providing more tradespeople and engineers and electricians and plumbers and so on.
Make it a bill and then have congress vote on it. This “wave of my hand” governance is getting out of control.
LikeLike
Well, the easiest thing to do would be to remove the government guarantee.
How much would a lender require to make an unsecured loan to a college student where the interest is deferred for an unspecified period of time and payments are capped as a percentage of the borrower’s income?
LikeLike
Brent:
How much would a lender require to make an unsecured loan to a college student where the interest is deferred for an unspecified period of time and payments are capped as a percentage of the borrower’s income?
It would depend largely on 1) which school the student was going to and 2) what the student planned on studying while there. Which would have the added benefit of depriving lots of useless programs (basically anything ending with “Studies”) of cash to run the programs.
LikeLike
It would re-establish the value of a degree.
LikeLike