Just got back from two weeks in Hong Kong; got lots of stuff I want to write about, but been having trouble sitting down to do it.
So a brief shot before I get to the important stuff.
Was listening to NPR on my way in to work this morning; they were talking about a proposed government program to provide more accurate information to prospective college students. The idea is to get more accurate info than US News & World Report gets, plus make it a little bit less gameable.
That all sounded interesting, and useful (except, they said, graduation rates would be based on students who graduate w/in six years, rather than four or five).
But the reason I'm writing this is that, at the end, they stated that average student debt upon graduation is about $26k (I forget the exact figure). That does seem a little low to me (they could be adding in community college students, perhaps), although I don't know.
The bigger point is that they took that value and compared it to a car loan, saying that many people take out car loans for that much. True enough, but it isn't people just graduating from college (who may or may not have a job lined up) who are doing so, so I'm not sure of the value of the comparison.
Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts
20130216
20111103
Back to the beginning...
I previously mentioned reading Michael Lewis. Well, I just got his latest book, and found it rather disappointing. It was all good material, but just about all of it duplicate Vanity Fair articles that he wrote recently.
Actually, now that I was looking at Vanity Fair's site again to find links to those articles, I'm even more disappointed, because even more of it came out of Vanity Fair than I thought (I'd only seen the first two of those before reading the book).
It affects the prose, a little bit, because, for instance, the Ireland section mentions something about Greece without making it a reference back. And the book ends without a real conclusion; it just kind of drops off a cliff.
As I said, it's still good material, so I'm not totally down on it, but it could have been a bit more, I think. And I would have liked if it had gotten into more details of the trouble, with more details about where we go from here. I'm not sure exactly what I mean by that last statement, but, for instance, at the end of The Big Short, I really felt like I had a good handle on what happened with the mortgage crisis. I don't feel like I have that, now.
I'm very tempted to get John Mauldin's Endgame, which reviews indicate might give that level of understanding.
The takeaway, though, is certainly that much of the world is in very bad shape; perhaps even worse than indicated by watching the news. Excessive debt has caused a lot of problems, and will continue to do so for quite a while.
Actually, now that I was looking at Vanity Fair's site again to find links to those articles, I'm even more disappointed, because even more of it came out of Vanity Fair than I thought (I'd only seen the first two of those before reading the book).
It affects the prose, a little bit, because, for instance, the Ireland section mentions something about Greece without making it a reference back. And the book ends without a real conclusion; it just kind of drops off a cliff.
As I said, it's still good material, so I'm not totally down on it, but it could have been a bit more, I think. And I would have liked if it had gotten into more details of the trouble, with more details about where we go from here. I'm not sure exactly what I mean by that last statement, but, for instance, at the end of The Big Short, I really felt like I had a good handle on what happened with the mortgage crisis. I don't feel like I have that, now.
I'm very tempted to get John Mauldin's Endgame, which reviews indicate might give that level of understanding.
The takeaway, though, is certainly that much of the world is in very bad shape; perhaps even worse than indicated by watching the news. Excessive debt has caused a lot of problems, and will continue to do so for quite a while.
20110809
Rating the USA
Well, it seems that the S&P actually did lower the US' debt rating. I'm reminded of reading about the ratings agency guys in Michael Lewis' The Big Short that they were the short-bus guys. The ones who couldn't get jobs at the investment houses.
Looking at this, this, and this, I can see where that impression arises.
And this is also kind of amusing. I'm too lazy to look it up, but I wonder what Apple, with their $76B in cash has for a rating. You've got to think that when cash on hand is enough to keep the company running for multiple years, that the odds of bankruptcy (and that's what the rating is supposed to measure) is pretty low.
Looking at this, this, and this, I can see where that impression arises.
And this is also kind of amusing. I'm too lazy to look it up, but I wonder what Apple, with their $76B in cash has for a rating. You've got to think that when cash on hand is enough to keep the company running for multiple years, that the odds of bankruptcy (and that's what the rating is supposed to measure) is pretty low.
20110802
What price, success?
Well, it appears that the answer is 1.8M jobs. But, hey, what's another percent added to unemployment, as long as no new taxes are raised, right?
20110801
Everyone goes home happy?
Well, it appears that a debt ceiling deal is done, and everyone is going home happy. Except those people who, you know, actually worry about putting the economy back into recession.
The only good thing about this deal is that the cuts are minimal for the next two years. And half of those cuts are in the military, where it is easy for the effect of them to disappear. So that's something. But affecting the wealthy? That's still unthinkable, apparently.
And now we'll have a "supercommittee" that will capitulate further to Republican demands or deadlock, leaving a dreadful run of cuts all over the place, hurting everyone. It'll probably push the entire economy back into recession, if the last week or so's worth of economic indicators is to be believed. 1937, here we come. Yay.
I guess it's good to be completely intrasigent, because apparently that gets you everything you want.
It really would be nice if we had a Democratic President. The only good thing I can really say about his policies is that they're moderate, rather than extreme. Given all the extremists running on the other side, I guess that is something, but damned cold comfort. I certainly thought we were electing a Democrat, and maybe even a real progressive. But apparently those fall into the same category as unicorns and dancing faeries. Sigh.
The only good thing about this deal is that the cuts are minimal for the next two years. And half of those cuts are in the military, where it is easy for the effect of them to disappear. So that's something. But affecting the wealthy? That's still unthinkable, apparently.
And now we'll have a "supercommittee" that will capitulate further to Republican demands or deadlock, leaving a dreadful run of cuts all over the place, hurting everyone. It'll probably push the entire economy back into recession, if the last week or so's worth of economic indicators is to be believed. 1937, here we come. Yay.
I guess it's good to be completely intrasigent, because apparently that gets you everything you want.
It really would be nice if we had a Democratic President. The only good thing I can really say about his policies is that they're moderate, rather than extreme. Given all the extremists running on the other side, I guess that is something, but damned cold comfort. I certainly thought we were electing a Democrat, and maybe even a real progressive. But apparently those fall into the same category as unicorns and dancing faeries. Sigh.
20110729
Bumping up against the ceiling
Well, what have we learned from the ongoing trainwreck that is the debt ceiling negotiations?
We've learned that Boehner is an empty suit as the Speaker. Well, perhaps that's overstating things, as he certainly does have power. But he just as certainly isn't getting the job done as Speaker. Can he be replaced? It's possible, but quite unlikely. I think this leads to this being the least effective Congress in a long time. They really aren't going to end up having accomplished much of anything.
We've also learned that the Tea Party conservatives have no interest in actually governing. Their brinksmanship, I heard today, WILL lead to a downgrading of US bonds (it might take several months, but will happen, is what I heard). If they don't yet realize how big a deal that is, then they are also remarkably stupid. If fiscal responsibility is your goal, then forcing a rise in interest rates (which a downgrade will do) is about the stupidest possible thing to do. It would be roughly equivalent to me going to my bank and refinancing my house at a higher interest rate without getting any cash out.
Long-term, this might end up helping the country, as we learn who the leaders are, and who they aren't. And it might force the two parties to start working together (in particular, re-evaluating the calculus about whether it's better to help the country or to try to stick it to the President).
But in the short- to medium-term, it's going to lead to a whole lot of pain.
Or perhaps it'll lead to Obama ignoring Congress' perturbations, and issuing an executive order that says he's going to ignore the debt ceiling, citing the 14th Amendment. That might actually be the best solution, in that, since it is a long-term solution, it might avert the downgrade entirely (since it would prevent having to go through this exercise in frustration again. Would the courts back it up? I don't know.
And what is all this doing for the recovery? It's sinking it. And the latest Commerce Dept figures show how little margin there is to avoid going back into recession.
So where will beets be tomorrow? Beats me.
We've learned that Boehner is an empty suit as the Speaker. Well, perhaps that's overstating things, as he certainly does have power. But he just as certainly isn't getting the job done as Speaker. Can he be replaced? It's possible, but quite unlikely. I think this leads to this being the least effective Congress in a long time. They really aren't going to end up having accomplished much of anything.
We've also learned that the Tea Party conservatives have no interest in actually governing. Their brinksmanship, I heard today, WILL lead to a downgrading of US bonds (it might take several months, but will happen, is what I heard). If they don't yet realize how big a deal that is, then they are also remarkably stupid. If fiscal responsibility is your goal, then forcing a rise in interest rates (which a downgrade will do) is about the stupidest possible thing to do. It would be roughly equivalent to me going to my bank and refinancing my house at a higher interest rate without getting any cash out.
Long-term, this might end up helping the country, as we learn who the leaders are, and who they aren't. And it might force the two parties to start working together (in particular, re-evaluating the calculus about whether it's better to help the country or to try to stick it to the President).
But in the short- to medium-term, it's going to lead to a whole lot of pain.
Or perhaps it'll lead to Obama ignoring Congress' perturbations, and issuing an executive order that says he's going to ignore the debt ceiling, citing the 14th Amendment. That might actually be the best solution, in that, since it is a long-term solution, it might avert the downgrade entirely (since it would prevent having to go through this exercise in frustration again. Would the courts back it up? I don't know.
And what is all this doing for the recovery? It's sinking it. And the latest Commerce Dept figures show how little margin there is to avoid going back into recession.
So where will beets be tomorrow? Beats me.
20110718
So, is this a good time to panic?
I've been keeping half an eye on the incredible hypocrisy and mendacity that is the debt ceiling increase discussion. The question is, is it a cause for panic if the increase somehow doesn't happen?
David Brin, an excellent sci-fi author, doesn't think so. However, I think he doesn't really appreciate how it will hit the banking system. Also, there's the question of the paper market. If a fiat currency is called into question for legitimacy, it could actually cause the collapse of the entire economy. No, I don't think that'll happen, but I also don't think it's beyond the realm of possibility.
But we should really take a look at what it might mean to the banking system. If your collateral (a T-bill) doesn't pay out, are you still solvent? It's possible that you are not. If that happens, all hell could truly break loose.
Hopefully, the Republican intransigents are aware of this, and can find a way to back away from weakening "the full faith and credit of the United States". Because, that way, madness could truly lie.
It'd be really nice if everyone involved could constrain themselves to arguments that are actually rooted in facts. And not ignore the inconvenience that many of those complaining about the raise (actually, all of them who've been in Congress for more than four years) are the ones who repeatedly voted to raise the ceiling under W. Seven times, actually.
David Brin, an excellent sci-fi author, doesn't think so. However, I think he doesn't really appreciate how it will hit the banking system. Also, there's the question of the paper market. If a fiat currency is called into question for legitimacy, it could actually cause the collapse of the entire economy. No, I don't think that'll happen, but I also don't think it's beyond the realm of possibility.
But we should really take a look at what it might mean to the banking system. If your collateral (a T-bill) doesn't pay out, are you still solvent? It's possible that you are not. If that happens, all hell could truly break loose.
Hopefully, the Republican intransigents are aware of this, and can find a way to back away from weakening "the full faith and credit of the United States". Because, that way, madness could truly lie.
It'd be really nice if everyone involved could constrain themselves to arguments that are actually rooted in facts. And not ignore the inconvenience that many of those complaining about the raise (actually, all of them who've been in Congress for more than four years) are the ones who repeatedly voted to raise the ceiling under W. Seven times, actually.
20110419
Why now?
Just as I was getting in to work yesterday morning, NPR mentioned that S&P had issued a statement saying something like, "if we re-evaluated the rating on US government debt, it's more likely than not that we'll downgrade it".
When I ate breakfast this morning, I noticed that the Post had an article on the front page about this. I was disturbed by two things in that article (which, I should point out, I didn't follow into the section when it continued). One, in discussing current spending levels, they described the retirement system as "an expensive social safety net for retirees". The part of that that bothers me is the "expensive" part. That's a value judgement, not an objective one. The Post, at least outside of opinion columns, should not be making value judgements.
The other part is this. My first reaction about hearing about the downgrade was, "Why now?" Frankly, it feels a lot like S&P trying to inject itself into a political conversation where they really don't have any place. And the timing is especially strange, given that the recent substantive developments are all in the direction of cutting the deficit, which is what the S&P says it wants.
If they were reacting to substance, doing this immediately after the approval of the extension of the Bush tax cuts would have made a whole lot more sense. As it is, it seems more than trifle suspicious (possibly even disingenuous). On the plus side, the bond market seems to have treated it appropriately, ie: ignored it. On the minus side, it horked up the stock market yesterday.
When I ate breakfast this morning, I noticed that the Post had an article on the front page about this. I was disturbed by two things in that article (which, I should point out, I didn't follow into the section when it continued). One, in discussing current spending levels, they described the retirement system as "an expensive social safety net for retirees". The part of that that bothers me is the "expensive" part. That's a value judgement, not an objective one. The Post, at least outside of opinion columns, should not be making value judgements.
The other part is this. My first reaction about hearing about the downgrade was, "Why now?" Frankly, it feels a lot like S&P trying to inject itself into a political conversation where they really don't have any place. And the timing is especially strange, given that the recent substantive developments are all in the direction of cutting the deficit, which is what the S&P says it wants.
If they were reacting to substance, doing this immediately after the approval of the extension of the Bush tax cuts would have made a whole lot more sense. As it is, it seems more than trifle suspicious (possibly even disingenuous). On the plus side, the bond market seems to have treated it appropriately, ie: ignored it. On the minus side, it horked up the stock market yesterday.
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