Bundling Student Loans Like Mortgages. What could go wrong?

GOLDMAN SACHS: There’s an attractive way to profit from the $1.3 trillion student-loan bubble

Goldman Sachs has a plan to bundle student loans into securities and sell them, just like they did home mortgages. What could possibly go wrong!?

We won’t know until my friend David Dayen​ writes a book on how it all fell apart in 2021 under a Democratic president.

This sounds like a great plan — for the financial industry. I’m no expert, but I can’t see the downside for the industry.

  1. Students have to pay. They can’t get out of the loans via bankruptcy like with mortgages.
  2. Just like housing prices, tuitions always go up! Bigger loans are needed. The pipeline of students in debt will continue because free college isn’t coming anytime soon.
  3. Investors are looking for a new debt instrument to speculate with. They can’t use home mortgages like before, Millennials aren’t buying houses–because of their student debt–so it’s a winner for banks.
  4. The people who give out loans set the standards for worthiness or and credit. They have an incentive to give loans to people who may or may not be able to pay them back.
  5. The banks will be able to bundle loans to students who have jobs and A+++ ratings with students who don’t have jobs and D+++ ratings. Just because they can’t get a job isn’t the lender’s fault.

If they scheme crashes (free college comes in the future, debt forgiveness is arranged for previous students) the government will bail everyone out!

When that happens the  excuses are already in place!

Blame the students!

  1. It’s his own fault, he bought too much education.
  2. They should have known some degrees will just never pay off!
    “Computer programming!? Ha! Everyone knows that Indians can do it cheaper and better over the internet! . A degree in government lobbying is where the big money is at, everyone knows that.”

Blame Obama and Sanders

Obama was always giving people free stuff. First hope, them medical care.

Sanders put the crazy idea of “free college” into their heads. They figured Sanders would be elected and wave a magic wand to get rid of their debt! So they rolled the dice bought too much expensive education and lost.

Don’t blame Wall Street!
The financial institutions were just doing what they do. Make profits. There was a demand and they filled it.

Nobody could have predicted that an unregulated financial market would follow the same path with student loan debt instruments as it did with mortgage debt instruments.

Excuses, excuses, excuses

But Companies have learned their lesson! 

The line is always, “Markets work.” Shareholders would punish the companies if they tried to do the same thing again. Investors in securities KNOW things now. Movies, starring Margot Robbie were made about the credit default swaps and it’s hard to forget that bubble bath scene!

But have things changed? Really?

People smarter than me write on this topic and I’m sure they have already pointed this out.   I just wrote this post because I stumbled on the Bloomberg story and it read like the kind of story that you would see in a docu/drama like The Big Short, where people watching it asked, ‘Why didn’t anyone do anything to stop this at the time?” And then they would cut to Trump as President, the tax bill the Republicans rammed through congress, while a cabinet of Goldman Sachs executives quietly did what vampire squids do.

How the Right Weaponizes Accusations to Destroy People and Institutions

I was listening to Sam Seder and Digby on the Majority Report talking about the various political sexual harassment cases in the news last week.  Sam talked about the fear the GOP will weaponize them.  Of course they will, they have in the past.

I expect more allegations of misconduct on the left to pop up. Not because there are numerically more, but because the right will actively seek out cases on the left to balance the elephant grabbing the women in the room.

When I started this piece on Thanksgiving weekend 2017, I anticipated cases of false allegations coming from the right.

On Monday I read the story of woman who manufactured an allegation against Roy Moore, and tried to get the Washington Post to run with it. The woman worked for James O’Keefe’s Project Veritas.  (I was right again, but since I didn’t publish Sunday I don’t expect a cookie this time.)

An allegation that is reported on by the liberal media, then revealed to be false, would be great for the right. It lets them defend their own while demonizing women and the media.  “See?” they will crow, “Women LIE! You shouldn’t believe them! The liberal media . . . → Read More: How the Right Weaponizes Accusations to Destroy People and Institutions

How would Rove/Hughes Cover Up A Trump Pee Tape?

Trump Bodyguard Keith Schiller Testifies Russian Offered Trump Women, Was Turned Down

After a business meeting in preparation for the 2013 Miss Universe Pageant in Moscow, a Russian who attended the meeting told Donald Trump’s personal bodyguard Keith Schiller he could “send five women” to Trump’s hotel room, according to an NBC report on the congressional testimony Schiller gave behind closed doors Wednesday.

Schiller said he told the Russian, “We don’t do that type of stuff,” sources told NBC.

On their way back to the hotel Schiller said he and Trump laughed about the offer, and that he personally stood by Trump’s door after he went to bed. Multiple sources told NBC Schiller was confident that no one sent Trump any women that evening, and that he and Trump were aware of the possibility of wiretapping or hidden cameras in the hotel room.

War criminal, Karen Hughes, some guy, female war criminal

Now, what if you worked for the Trump White House and knew the real story about this entire incident as well as the rumors? How would you knock it down? For ideas I asked myself, What Would Karl Rove and Karen Hughes Do? WWKRKHD?

A war criminal, his . . . → Read More: How would Rove/Hughes Cover Up A Trump Pee Tape?

Candy’s for Closers! Trumpian Halloween Tricks

Don’t have money for Halloween Candy?  Hate giving away Halloween treats and love Halloween tricks? Hate the new office tradition of cube to cube trick or treating? h/t Val Rodham   Think that people who give things to others, without making a profit or getting a big tax deduction, are suckers?

Think that using desperate people to make money is just smart business? (e.g.  Whitefish in Puerto Rico )

If so, follow these simple tips from Evil Spocko channeling today’s Trumpian Halloween Trick and Treat techniques.

Put out a BIG empty bowl with sign over it that says, ‘Help yourself to 3 or 4.” or “These are big, so take only ONE!” h/t David Feldman Next to the empty bowl put a milk carton with a coin slot in the top covered with orange construction paper. Write on the paper “Trick or Treat for UNICEF!”   When people see that there is nothing in the bowl, complain about greedy co-workers who must have taken all the treats while you were gone. When asked what candy you had, mention the favorite candy of your office rival. “I’m not saying he took it, but you might want to notice what candy he is eating over the next few weeks.” When you . . . → Read More: Candy’s for Closers! Trumpian Halloween Tricks

Why Didn’t I Read About This Before? How Sexual Harassers Quash Stories

This piece, about Lisa Bloom’s attack strategy on Rose McGowan while defending Weinstein, makes me ill. But I suggest reading it because it explains other reasons we didn’t hear many of these harassment stories.

Clients Turn on ‘Champion for Women’ Lisa Bloom After Her Scorched Earth Crusade for Harvey Weinstein

When you take on a group or person who has money and power they aren’t just going to roll over. They will fight back. Sometimes viciously. They will use multiple intimidation tactics, including hiring lawyers to make subtle and not so subtle threats to control the narrative.

They will use carrots and sticks to achieve their goals. The sticks scare the crap out of most regular people. At least if there is the possibility of a payout, you might get access to the kind of lawyers who will take the case.

We often don’t see details about many harassment cases because of the intimidation of journalists and their publishers.

Hiring lawyers and PR fixers to intimidate people is the method used by the rich and powerful. Harassers who don’t have money use other methods to intimidate before and after the fact. It is helpful to be prepared for these actions. . . . → Read More: Why Didn’t I Read About This Before? How Sexual Harassers Quash Stories

Our Disaster-Fixer Machines Will Save Us!

Trump Threatens ‘Fire and Fury’ Against North Korea if It Endangers U.S.

Ooooh scary. Saber, meet Rattler-in-Chief.

 

I’ve seen this before, more than once. But don’t worry. There are multiple ways we scientists from the future can fix things if they get really horrible. One is a little machine we developed called the Disaster-Fixer Machine or DFM for short.  We starting it with Ronnie Reagan’s bogus Strategic Defense Initiative program and used 250 billion in black ops funding to create it.) But we won’t need it this time because Ivanka will talk him down first.  She’s part of the Trump Babysitting Team (TBT) along with McMaster and Kelly. When Trump was elected the DoD hired her. Why do you think she’s around Daddy all the time? Her fashion design skills? She’s our first line of defense.

If North Korea launches its little nuke it will be shot down by the revamped Star Wars Missile Shield, called the Ground-based Mid-course Defense System  or GMD for short. This Warthog Defense video explains how it works. It was a boondoggle program at first, but it appears to work great now. My friend Guy sued to get access to the first SDI makers information and found out that those people are some of . . . → Read More: Our Disaster-Fixer Machines Will Save Us!

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Does Rep. Collins Have Insurance For A Gun Accident?

Congressman Chris Collins (R) New York wrote an opinion piece titled:

I’m a member of Congress and I’m going to start carrying a gun Today U.S. Rep. Mo Brooks (R) Alabama introduced HR 2940 a bill that would permit congressional lawmakers to carry a concealed weapon anywhere in the country except the U.S. Capitol or in the presence of the president or vice president.

Okay Reps. I hear you, you are scared. I get it, decades of the NRA passing laws making more guns available to more people with less training and fewer restrictions on where they can bring them makes the world a scarier place. Thanks Obama!

Congresspeople could do the logical thing and buy and wear body armor, which could actually protect them. As the old saying goes, “Guns don’t protect you, body armor does.”

But it’s not really about protecting yourself is it? Stopping bullets with a vest doesn’t sound bad ass enough. Too passive. You want people to think, “He’ll shoot anyone who looks at him funny.” Why let actual self-protection get in the way of the image of a gunslinger?

Before our congress members start wearing guns everywhere I have a few questions I think . . . → Read More: Does Rep. Collins Have Insurance For A Gun Accident?

Does Rep. Collins have insurance for a gun accident?

Congressman Chris Collins spoke of protecting himself and constiuents following an appearance in Hamburg on Monday.CREDIT MICHAEL MROZIAK, WBFO

Congressman Chris Collins (R) New York wrote an opinion piece titled:

I’m a member of Congress and I’m going to start carrying a gun 

Okay Rep. Collins. I hear you, now I have a few questions I think the public has a right to know, especially those who are physically in the same place as you and your gun. (Not that I expect he will answer them, he wouldn’t say whether or not he was wearing a gun today while a chamber of commerce event at Micheal’s Catering & Banquet in Blasdell NY. I have more on possible reasons why he didn’t answer below*.)

Congressman, you have stated you will be carrying a gun everywhere in your district.

Do you have liability insurance in case you have an accident with the gun and injure someone? What does your policy cover? What is exempt? What are the limits of your insurance coverage?

To put liability limits in terms of your state-required auto insurance, for example:

New York auto insurance minimums are $25,000, $50,000 limits for bodily injury for each person . . . → Read More: Does Rep. Collins have insurance for a gun accident?

Wanted: Role Model Of Strength & Restraint For Fox TV Appearance

My friend Will Bunch wrote a book about Reagan “Tear Down This Myth: The Right-Wing Distortion of the Reagan Legacy ” in which he recounted how profoundly the movie The Day After affected Reagan. It led to him pushing to reducing the nuclear arsenal. Reagan needed to see “the darkest timeline” play out on TV. That is how he absorbed information, via a visual story with characters he could imagine caring about pulling him in and keeping him engaged for two hours and 7 minutes.

As an actor Reagan understood the role appearance has in people’s perceptions. He must have had people telling him the US needed to appear strong to the Russians. He must also had others telling him about the danger of a brinkmanship  and a nuclear accident we could not recover from.  What was it about that movie that reached him? The images of destruction of the country? Did he relate to the characters who were like his family and friends? Or did he put himself in the picture? Was he thinking about how he personally would be seen before a conflict and then after a nuclear exchange?

DJT takes situations and turns them into personal win or lose situations. He surrounds himself with his idea of . . . → Read More: Wanted: Role Model Of Strength & Restraint For Fox TV Appearance