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  • Originally posted by DOR View Post
    No, it was a government-guaranteed loan from Bank of America. I was there. I signed the documents. Don't tell me that was government money.
    And didn't the bank sell the loans to Sallie Mae to replenish its capital to make additional loans?
    To be Truly ignorant, Man requires an Education - Plato

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    • I still firmly believe that the rug will be yanked out from under us. The "phantom" millions unemployed didn't just magically disappear.
      “He was the most prodigious personification of all human inferiorities. He was an utterly incapable, unadapted, irresponsible, psychopathic personality, full of empty, infantile fantasies, but cursed with the keen intuition of a rat or a guttersnipe. He represented the shadow, the inferior part of everybody’s personality, in an overwhelming degree, and this was another reason why they fell for him.”

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      • Originally posted by TopHatter View Post
        I still firmly believe that the rug will be yanked out from under us. The "phantom" millions unemployed didn't just magically disappear.
        Well, it has been seven years, and we are due for a correction this Summer or the Fall. I'm guessing it will be Bubble 2.0 that will burst, but can't figure out what it will take down in its aftermath. The 2000-01 Dot-Com Burst (Bubble 1.0) took down Telecom in 2003, and this one will take something else down with it. Any guesses?

        And on that note, happy new year, everyone

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        • a correction, sure, but not a recession.

          i suspect the next big bubble will be student loan debt, but that will not have the paralyzing effect that something like a simultaneous meltdown of the finance/housing industries had.

          moreover as the population ages, this bubble will naturally shrink.

          we're in the middle of a virtuous cycle right now so i expect growth to accelerate this year.
          There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

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          • They are saying that this time it is car loans.

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            • Originally posted by Blademaster View Post
              They are saying that this time it is car loans.
              That's a merely shifitng of the markets. Insteaf of car loans, the money goes to car maintenance/repairs.
              Chimo

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              • Originally posted by Officer of Engineers View Post
                That's a merely shifitng of the markets. Insteaf of car loans, the money goes to car maintenance/repairs.
                I have not fully grasp what you said. Can you elaborate further?

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                • Instead of trading my car in and making newer or longer payments, I'm paying to repair my old car. Monies out of my pocket remains the same,
                  Chimo

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                  • Originally posted by Officer of Engineers View Post
                    Instead of trading my car in and making newer or longer payments, I'm paying to repair my old car. Monies out of my pocket remains the same,
                    Yes but what they are saying is that almost half of the car loans are bad or going into default. They are saying that car loans could be the next subprime market crisis.

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                    • Originally posted by astralis View Post
                      a correction, sure, but not a recession. i suspect the next big bubble will be student loan debt, but that will not have the paralyzing effect that something like a simultaneous meltdown of the finance/housing industries had. ... we're in the middle of a virtuous cycle right now so i expect growth to accelerate this year.
                      Yup, a correction limited to a few overheated sectors and not a wide-spread recession. This summer or fall's tech bubble 2.0 (again, fueled by finance) will not be paralyzing, but it will be somewhat demoralizing to the younger workers who are just emerging from the Great Recession.

                      Non-mortgage consumer finance (student, credit-card, payday, auto, etc loans) may well be the after-shock bubble to burst. On the up-side, it may cool down the bizarrely priced urban housing and rental markets in NYC, DC, Valley and certain other tech hubs, and make owning a home possible for a lucky and parsimonious fraction of those kids.

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                      • What a gloomy lot. Bubble is a word being overused and misused these days. The dot.com bubble, for those who lived and invested through it, compared well to the great Tulip and South Seas bubbles of yore--there was nothing in all those dot.coms to invest in except the mania of investors who thought there was and drove up stock prices. That's a prescription for a bubble. How anyone can define the troubles in the student loan market as a bubble escapes me. Was the savings and loan debacle some years back a bubble? Let's reserve the word for those insane events where investors drive stock prices up with nothing more to recommend them other than their own "irrational exuberance".
                        To be Truly ignorant, Man requires an Education - Plato

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                        • Originally posted by JAD_333 View Post
                          What a gloomy lot. Bubble is a word being overused and misused these days. The dot.com bubble, for those who lived and invested through it, compared well to the great Tulip and South Seas bubbles of yore--there was nothing in all those dot.coms to invest in except the mania of investors who thought there was and drove up stock prices. That's a prescription for a bubble. How anyone can define the troubles in the student loan market as a bubble escapes me. Was the savings and loan debacle some years back a bubble? Let's reserve the word for those insane events where investors drive stock prices up with nothing more to recommend them other than their own "irrational exuberance".
                          Kids are told go to college or else and there is no promise of a job on the other side for most, especially liberal arts types. The lack of jobs pushes the kids to then continue on to grad school or into a Ph.D program only to graduate and find the job market for scholars of byzantine horn blowers, or Ph.D in early German philosophers is extremely limited. By any measure the wholesale push of the young into universities is a bubble. hell even the tech side degrees are starting to feel it as companies bring in cheaper foreign technical workers.

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                          • Originally posted by JAD_333 View Post
                            What a gloomy lot. Bubble is a word being overused and misused these days. The dot.com bubble, for those who lived and invested through it, compared well to the great Tulip and South Seas bubbles of yore--there was nothing in all those dot.coms to invest in except the mania of investors who thought there was and drove up stock prices. That's a prescription for a bubble. How anyone can define the troubles in the student loan market as a bubble escapes me. Was the savings and loan debacle some years back a bubble? Let's reserve the word for those insane events where investors drive stock prices up with nothing more to recommend them other than their own "irrational exuberance".
                            Have you been following the valuation of certain one-trick tech companies? $10M for an app that does nothing but yell "Yo!" (http://www.justyo.co/), $1B for a photo-effects and sharing app*, $20B for a text-messaging app... and you can't begin to imagine the money being spent on copy-cat bull-$#!+. If this is not speculation, I don't know what is (and it is too early to say if it is just "irrational exuberance" or something more malevolent). I was too young and penniless to invest in the Dot-Com Bubble, but I imagine at least some of those working in the industry were similarly uncomfortable during the late-90s when companies were shelling out millions for domain names and other such shenanigans.

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                            • Originally posted by Blademaster View Post
                              Yes but what they are saying is that almost half of the car loans are bad or going into default. They are saying that car loans could be the next subprime market crisis.
                              It only becomes a problem if the bad debts are extensively leveraged. When you have hedge funds on top of hedge funds and huge amount of money put into the pot for interest rates, then default of the bad debts can bring down banks and wipe out savings. I am not aware of a giant speculative industry on car loans.

                              Originally posted by zraver View Post
                              Kids are told go to college or else and there is no promise of a job on the other side for most, especially liberal arts types. The lack of jobs pushes the kids to then continue on to grad school or into a Ph.D program only to graduate and find the job market for scholars of byzantine horn blowers, or Ph.D in early German philosophers is extremely limited. By any measure the wholesale push of the young into universities is a bubble. hell even the tech side degrees are starting to feel it as companies bring in cheaper foreign technical workers.
                              Yep. Research institutes have a very Malthusian logic; professors are hired at the rate of the natural increase of the student body and to replace retired professors. Right now the academic job market is for the most brilliant as well as hardiest researchers. If this doddrum does end in the future we are looking at an amazing generation of academics (and very versatile baristas).
                              All those who are merciful with the cruel will come to be cruel to the merciful.
                              -Talmud Kohelet Rabbah, 7:16.

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                              • Originally posted by Cactus View Post
                                Have you been following the valuation of certain one-trick tech companies? $10M for an app that does nothing but yell "Yo!" (Yo - It's that simple.), $1B for a photo-effects and sharing app*, $20B for a text-messaging app... and you can't begin to imagine the money being spent on copy-cat bull-$#!+. If this is not speculation, I don't know what is (and it is too early to say if it is just "irrational exuberance" or something more malevolent). I was too young and penniless to invest in the Dot-Com Bubble, but I imagine at least some of those working in the industry were similarly uncomfortable during the late-90s when companies were shelling out millions for domain names and other such shenanigans.
                                Let the VCs squander their money, and as for the biggies buying up one-trick ponies, there's method to the madness, usually a key patent or to acquire brains.

                                I remember the dot.com madness well, My sister in law racked up more than $200k on an initial $10k in her brokerage account and lost it all in crazy March 2000 when the bubble popped. I got caught on one investment I had. Went from $45+ per share to $2.50 in 3-4 months and lingered on for 2 years until it petered out entirely. Now if you had bought Priceline at $1.50 after the bubble busted, you'd be wealthy today. Not all dot.coms went belly up. For example, ICGE, which had a share price north of $275 in Dec 1999 and a market cap larger than most US corps for a brief shining moment, invested early in Blackboard, which did well, and saved it from extinction. One year later it's share price was $7+ and today it sells for $12+. But all told billions of net worth went down the toilet, which ironically set the stage for the housing bubble. The Fed in an effort to combat the recession which followed the dot.com bust cut interest rates to 1% which got home builders and mortgage bankers to thinking...hmm. Buffett said at the time, don't invest in anything you don't understand. That's pretty much what happens when bubbles are created.
                                To be Truly ignorant, Man requires an Education - Plato

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