Federal Reserve continues shadow bailout of banking industry – $947 billion of overpaid and low demand mortgage backed securities sit on the massive $2.8 trillion Fed balance sheet. The price of this hidden bailout will hit all Americans.
The Federal Reserve continues a secretive bailout of the banking system by purchasing more and more questionable mortgage backed securities. You would think that $1 trillion would catch the attention of the media but they seemed focus on other trivial items. The Fed balance sheet is still at record levels above $2.8 trillion to be exact, but the more troubling aspect of all of this is the amount of mortgage backed securities they have purchased. They continue to hoard toxic commercial real estate loans and a massive amount of residential mortgage backed securities. How much? The Fed now holds over $947 billion in mortgage backed securities. Keep in mind that prior to this financial crisis the Fed rarely held anything else except quality paper on its balance sheet. Yet this is the cost of the shadow financial bailout.
The Coming Demographic and Financial Disaster – Median income of Americans 65+ is $19,167. What happens when less affluent youth move back home and clash with older generations?
What happens when a society that prides itself on a middle class and self-sufficiency suddenly starts losing both? For over a decade the middle class in the US has been shrinking. This isn’t some speculation but is reflected in the stagnant household income data. You also have a giant demographic train in that many baby boomers are now retiring in mass. Over 10,000 baby boomers enter into retirement each day and many have an inadequate amount of savings (if any) to get them through the leaner years. Couple this with a less affluent younger generation and you have a recipe for financial and social turmoil. Many of these younger Americans, many saddled with large student debt, are moving back home with parents that have seen their entire home equity evaporate. Do you think these are happy households especially when the median income of those 65+ is $19,167?
The law school bubble – At 50 law schools, 20% of the students are either unemployed, flunked out, or are unknown yet data does not show up in national rankings. Many more pass bar exam than actual job openings in legal field. Legal bubble is another tangent of the higher education bubble.
The higher education bubble has gotten a solid amount of press coverage in the last couple of years. Even with student loan debt lurching towards the $1 trillion mark the higher education bubble train keeps moving along. Part of this has to do with the odd financialization of higher education where things are so extreme that someone with no job can suddenly enter into a for-profit paper mill and go into massive government backed debt and actually be worse off. Forget about an affordable community college when you can study video game design from your futon. You might say this is low hanging fruit to pick on.  But what about the law school market? Surely those pursuing the degree of most governmental representatives know a thing or two about political trends and some basic economics. Right? The statistics reveal a somewhat troubling picture within the higher education bubble and highlight a market saturation of lawyers, but also law schools pumping stats as if they were hocking adjustable rate mortgages at the height of the housing bubble. The data is somewhat revealing.
The university of financialization – science and math graduates opt to go into the gambling fields of Wall Street banking instead of building productive jobs for society. Many non-tech majors choose lower paying fields while going into massive debt. Youth summer employment drops from 60 to 46 percent in last decade.
Going to college has always been a dream for many Americans. Parents have high hopes for their children going to a good school and coming out with a degree that has made them more well rounded as citizens. But this desire may not be coinciding with the marketing jargon that spews out from the industry. Since the US is now one giant financialization machine, banks have shifted their gambling addiction from real estate to higher education. In the last decade the fastest growing segment of higher education enrollment has come from the for-profit college industry. This is an industry that spends more money on slick marketing and deceptive advertising than it does on actual instruction. Across the board however college tuitions have increased even at quality institutions but many are finding their degree is not providing a solid return on investment.