Student debt keeps rising

Apr 1, 2010 20:09 UTC

No de-leveraging here…


(Click here to enlarge)

The vast majority of loans come from the government. It’s doing students more harm than good offering them. More debt on offer to pay for an asset — whether a house, a security, or a college education — just inflates its price.

For other assets, it’s easy to sit out the borrowing arms race. Dwellings can be rented, savings parked somewhere besides frothy stocks or bonds. But every year there’s a new crop of 18 year-olds that have to pay the debt-inflated price of tuition.

(ht Stephen Culp, Reuters)


A simple way to value education is return on investment.

Private US colleges now deliver negative lifetime return on investment to most attendee. This post shows the calculation, using public data from the US Census and the College Board: ollege-become-a-bad-investment/

Obviously education has nonfinancial benefits, but if the system as a whole is delivering negative ROI, it is obviously broken.

Posted by zipflash | Report as abusive

Lunchtime Links 4-1

Apr 1, 2010 18:00 UTC

Washington’s scrap dealers (Dash, Dealbook) A great profile of FDIC’s two top deal-makers.

Holy bubble: Churches struck down by foreclosures (Hals, Reuters)

Measuring the cost of “banking pollution”…up to $200 trillion (Andrew Haldane) In this not-too-long speech, the Bank of England’s Executive Director for Financial Stability seeks to quantify the costs of financial crises, and argues banks should be broken up. Indeed. He notes that “it is possible that no amount of capital or liquidity may ever be quite enough,” presumably to rescue us from an Armageddon-like financial collapse. My Reuters Breakingviews’ colleague Peter Thal Larsen shares his view here.

Fed releases holdings of the Maiden Lane portfolios (NY Fed) Some disclosure for folks who want to know what the Fed got during the Bear Stearns rescue (Maiden Lane), the AIG rescue (Maiden Lane II) and the AIGFP counterparty rescue (Maiden Lane III). This breaks down all the securities the entities hold, but good luck trying to figure out what it means. Even expert valuation shops might spend weeks trying to value of this stuff independently. Blackrock manages this portfolio for the Fed, why no disclosure of its marks?

Barney Frank permanently bans staff from communicating with aide-turned-lobbyist (Grim, HuffPo)

Hartford pays back TARP (Kotoky, Reuters) Few recall that during the depth of the crisis, the big insurers bought banks to qualify for TARP funds. Measured using tangible common equity, insurers’ leverage was actually worse than banks’. But insurers came through much better since they didn’t face the same liquidity pressures. Their big liabilities are insurance policies. Banks were far more vulnerable because depositors/creditors fled.

April Fool’s from Google…

Google is Topeka ( For a limited time…

Google Docs now stores everything ( “Ever wish you could CTRL+F your keys?”

Google searches now measured in, er, “microfortnights?” (imgur) Try searching yourself and see what comes up. I got “femtogalactic years.”

Google’s new Japanese keyboard (picasa)