Tag Archives: Student Loans

May 10 2017

Vancouver Real Estate Forecast – Regulation & Currency


Armstrong Economics Blog/Canada

Re-Posted May 10, 2017 by Martin Armstrong

QUESTION: I am new to your services. I purchased the Canadian report on the property markets. I am fascinated by your ability to forecast so many events. I understand it is the computer for sure and no individual has the time to forecast so many markets all the time. It appears your forecast on the real estate in Vancouver was right on target. Am I correct in assuming this was caused by the regulation changes and the trend in the US dollar?

Thank you

DK

ANSWER: Yes to regulation and the dollar. The Savings & Loan (S&L) Crisis in the 1980s was caused by a change in tax code whereby the US Congress wanted to tax the rich so they changed the tax credits in real estate. They took a bull market and turned it into a one-way sellers’ market with no bid. They had to order S&Ls to lend into the real estate market. So when the real estate market collapsed, they then blamed the S&L and went to even criminally prosecute directors. I provided the warning to members of Congress what would happen if they changed the tax code. Of course, they ignored the warning and the crisis unfolded as any person with common sense would have expected.

Charles Humphrey Keating, Jr. (1923–2014) operated the Lincoln Savings and Loan Association in Irvine California. When Lincoln Savings & Loan failed in 1989, it cost the federal government over $3 billion and about 23,000 customers were left with worthless bonds. The government, which caused the fail, then criminally charged Keating and of course they convicted him. The argument was he KNEW he would fail 7 years in advance so the bonds he sold he KNEW he would default on making it a crime. He served four and a half years in prison before those convictions were overturned in 1996. The theory of that case was absurd. I have never encountered the head of any company that was major where the director knew the company would fail 7 years in advance. The government made Keating the scapegoat for whole S&L Crisis Congress created.

Today, just add to this the Vancouver real estate market the trend in China trying to stop the outflow of cash that has been pouring out of the country. If you change the capital flows, you change the markets.

It’s not hard to put this together as long as you keep a global view and an understanding of history and how it unfolds for government is typically the source of all economic crisis. Politicians are absolutely clueless. The regulation changes in the property market in London set in motion the collapse in values there as well and in Australia they even outlawed foreigners from buying real estate.

May 9 2017

Bitcoin Soars Over $1700 – 2017’s Best-Performing Currency


Tyler Durden's picture
by Tyler Durden
Re-Posted from ZERO HEDGE May 9, 2017 8:14 AM

Bitcoin is now up for 16 of the last 18 days, soaring over 50% in the last month and up almost 90% in 2017 – making its the year’s best performing currency.

There appears to be no specitic catalyst for today’s move as the surge in Japanese interest (as we detailed here) and news that Russia is considering, like Japan just did, to allow cryptocurrencies as a legal payment method are outweighing fears over ‘hard forks’, SEC rejections, and Chinese crackdowns.

 

One wonders whether this ‘spurious’ correlation has anything to do with Bitcoin’s rise – as Venezuela’s black market Bolivar plunges into hyperinflationary collapse, non-fiat currencies are bid…

We summarized the ongoing bitcoin frenzy as follows last week: “just as the Chinese bubble frenzy in bitcoin is fading, it may be replaced with a new one, in which thousands of Mrs. Watanabe traders shift their attention away from the FX market and toward digital currencies” and added that “If the transition is seamless, there is no telling just how far this particular bubble can grow.”

Five days later and $250 dollar higher, we are observing first hand how accurate this prediction may have been, although like last week, we have no way of telling how long this particular mania phase will last

May 9 2017

Emerging Market Debt Expanding Twice the Rate of 2016


Armstrong Economics Blog/Emerging Markets

Re-Posted May 9, 2017 by Martin Armstrong

The view that BREXIT is a passing phase and Europe will extinguish the swell of populism, has led to more debt in dollars being racked up at a faster pace than ever in US dollars among emerging markets, which stood at about 50% of the US National Debt. The debt in new offering has exploded as bears continue to say the Dow will crash and the dollar with it. This had led to an extraordinary offering of new dollar debt which is close to $160 billion by the 1st of May, 2017. This represents more than twice the dollar value reached by May 1st last year.

The willingness of investors to buy debt securities is rooted in these bearish forecasts. I was recently asked to do an interview because they said they were desperate to find someone who was bullish on the equities market long-term. The vast majority keep touting the dollar will crash with the share market and this is fueling the explosion in new debt along with the expectation that interest rates will rise – not fall.

Investment funds specializing in emerging market bonds reported inflows of $ 1.9 billion, according to data provider EPFR Global. Also, exchange-traded funds from this sector were able to show more than $200 million. Investors from the US and Europe are currently particularly interested in corporate bonds from countries such as Brazil, Indonesia or Argentina, since they yield comparatively high returns and have rather short maturities. This is similar to the Russian bond collapse back in 1998, which took down Long-Term Capital Management.

The bond debt from developing countries is growing exponentially with total commitments reaching around $425 billion+. This crop of bonds have an average maturity of 6.3 years as compared to 10 year maturities for investment grade rated as risk-free.

This is adding to the crisis we see on the horizon and a dollar rally will set off a debt crisis like nobody has ever seen in more than 100 years. Private debt among emerging markets is almost about $1.6 trillion with maturity due to foreign creditors over the next five years. It looks like about 90% of this debt is in US dollars.

May 8 2017

“The Crisis Has Become Pandemic” – System To Collect Defaulted Student Loans Is No Longer Functioning


Tyler Durden's picture
by Tyler Durden
Re-Posted from ZERO HEDGE May 8, 2017 5:20 AM

The system used by the Dept. of Education to collect on defaulted student loans came to a standstill in the last month, leaving an estimated 91,000 accounts in limbo, when the agency ordered debt collectors under contract to stop making collections on accounts.

As Consumerist’s Ashlee Kieler reports, consumers who expected their student loan payments to be deducted from their bank accounts this month have reportedly found the funds untouched, and their calls to the companies unanswered thanks to a Department of Education’s order prohibiting the debt collection companies from working on default accounts in response to two lawsuits against the agency.

The strange turn of events began with a lawsuit filed by two debt collection companies, who claim they were unfairly were fired by the Obama-era Education Department for poor performance. On March 29, the judge issued a temporary restraining order that prevented any new defaulted borrowers from being assigned to debt collectors and put into rehabilitation programs. Instead, the borrowers have piled up inside the department’s system, waiting.

On April 21, the government ordered the debt collectors involved in the suit to stop work altogether on defaulted accounts: no phone calls, no withdrawals from student accounts, nothing.

The Education Department and the Justice Department are partly to blame for “unnecessarily” throwing a wrench into the entire defaulted loan system, one attorney with knowledge of the case told BuzzFeed News, because they’ve been unable to come to a resolution that allows the loan system to kick back into gear. “There’s no fix in sight.”

Judge Susan Braden has extended the emergency order [PDF] several times since then, noting that it was made to “preserve the status quo to protect the interests of all parties and to afford the government an opportunity to reach a global solution” to two lawsuits against the Dept. of Education.

The cases, filed separately by several debt collection firms, claim that the Dept. of Education unfairly terminated their contracts with the companies.

More recently, the Dept. of Education ordered servicers to stop work on defaulted accounts. The actions, the companies argued in court filings [PDF], “fundamentally alter the status quo and are not fiscally responsible to the borrowers or to the federal taxpayers.”

“Thus, the well-documented student loan crisis will become a pandemic not because this Court ordered that result, but because [Dept. of Education] thinks that is what this Court expects,” the companies argue.

This week, the Dept. of Education submitted a court filing detailing how the Judge’s order and its subsequent suspension of collection activities has affected consumers, Career Education Review reports.

The Dept. claims that the action “has effectively shut down the Government’s defaulted student loan collection program,” with an estimated 91,000 borrowers now stuck in limbo because their accounts weren’t assigned to a debt collector in April.

Additionally, the Dept. argues that by not assigning borrowers to collectors “tens of thousand of borrowers have been prevented from gaining access to rehabilitation programs” and other benefits.

BuzzFeed News reports that debt collection agencies say that since the Department ordered a stop to collection activities they have been inundated with calls from borrowers.

However, the companies can’t help the customers. This, they claim, has resulted in thousands of messages and complaints from borrowers.

The collectors, BuzzFeed reports, claim that because of this borrowers will re-default and those enrolled in repayment programs could lose their eligibility.

Suzanne Martingale, policy staff attorney for our colleagues at Consumers Union, tells Consumerist that the stop in collections and payments could do “untold damage to borrowers.”

“Meanwhile, they’re going to rack up a ton of charges as more interest accrues on their loans,” she adds.

As the work stoppage drags on, consumer protection advocates are confused about where borrowers stand, especially given a tangle of other lawsuits involving the loan companies and the government. “The whole process has been completely mind-boggling,” said Persis Yu, the director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, who called the standstill “mystifying from a consumer protection standpoint.”

May 8 2017

Bill Blain: “Macron Will Prove A Disappointment As Nothing Is Actually Fixed In Europe”


Tyler Durden's picture
by Tyler Durden
Re-Posted from ZERO HEDGE May 8, 2017 5:57 AM

From Bill Blain’s latest Morning Porridge edition

“To summarise the summary: anyone who is capable of getting themselves made President should on no account be allowed to do the job..”

The best thing about the French Election is I’ve just won a case of very fine French wine on the result!

The papers and financial blogosphere are full of positivity – France is fixed, therefore the Euro is safe and its all great news. Put yer buying boots on.. And on the back of Friday’s very strong US numbers.. don’t worry that bonds continue to rally in the face of a likely Fed Hike..

Please.. the only thing good about the French vote is the least bad candidate won.

I question the grand expressions of upside the market is calling for. France has dodged a bullet, perhaps, but they aint solved the crisis – which boils to down to being the wrong economy using the wrong currency and absolutely no control of monetary or fiscal policy to fix it.

Macron has a head full of supply side policy cliches about sorting the labour market, and some catchy soundbites on Franco-German European hegemony – including the sacrifice of a fraction of the bloated state payroll. For all the hype, he’s a compromise of compromise candidates.

Lets not forget that fully 12% of the votes were spoilt – meaning a significant minority of Frenchmen made a conscious choice that neither candidate was any good!

I’ll make a grand prediction: Macron will prove a disappointment. His lack of power base from which to actually effect long term change across France means we’ll get one or other of the Le Pens in 5 years time.

Although he will no doubt trade on his youth and popularity – don’t be surprised if the lustre quickly fades. A number of blogs say he’ll quickly build a coalition of the willing.. I doubt it. He’s going to struggle to form any kind of working government in the face of the established parties, and hostility from right and left.

There is also the likelihood the electorate will come to realise the gifted young game-changer is actually as establishment as they come. Don’t forget he is the protégé of Jacques Attali –  those of us of a certain vintage will remember Attali as the archetypal enarch – squandering billions on titivating the Glistening Bank (The EBRD) with marble lifts and ego-building offices rather than actually lending. Macron’s paid up membership of the discredited French upper class is something a better organised Front Nationale will play to in coming years.

On the upside, the numbers are moving in Macron’s direction. The state isn’t in the same perilous debt position pre ECB intervention. A wee bit inflation will massage the numbers nicely. There are no immediate risks on the horizon. Unemployment is trending down (slowly), and is likely to boost his popularity. Merkel looks a shoe in for the German Election (very strong showing at the weekend in Danish Germany).

But, but and but again..

When Europe looks calm and sorted, its not. Nothing is actually fixed.. For all the happy posts this morning about Euro strength, which stocks to buy on the basis of French recovery, and the rest… I doubt it.

Although there is apparently nothing to worry about in Euroland anymore – we’ve still got the festering pustule that is Italy, episode 47 of the Greek Crisis on our doorsteps, and the who knows what coming from the Brexit negotiations. Europe will continue to amuse, fascinate and frustrate..

I don’t normally spend my Sundays watching the TV wallpaper paste that passes as “political comment” but as I supped my coffee, one soundbite caught my ear: “the aim of Europe is to ensure the economic collapse of the UK to make clear leaving the EU is never an option.”

Oh dear….

Is there a danger the now pointless UKIP decides to establish some convoluted relevance as the force of anti-Europeanism? Sure enough, someone later suggested we should mount a European boycott. If we stop buying French plonk, German cars, Spanish holidays, etc, then that’ll teach ’em.

It so happens an American chum of mine was in Yoorp over the weekend and he popped down for dinner last night. As he is an economist of some renown, and a former Scotsman before he went all Yankee on us, I asked his opinion on Brexit and what America thinks. He was succinct: “We don’t give a fig. As long as you all play nice and don’t break the global economy meaning we’ll have to bail it out, we really don’t care about Europe and the UK.” Nice.. but to the point..

A trade war with Europe and the nihilistic post UKIP politics of aggression would be a very bad idea… If I can’t get good European wine, it will inevitably mean drinking more Argentine Malbec.. Not a bad wine, but it’s impossible to function properly afterward!

May 8 2017

The Dollar Remains King


Armstrong Economics Blog/USD $

Re-Posted May 8, 2017 by Martin Armstrong

QUESTION:  Hi, I’ve read your blog for a couple of months now and it clearly opened my eyes. But I’m wondering if I’m getting crazy now.. I can see a pattern between rising Chinese yields (despite weaker growth), parked Chinese money in the Canadian & Australian housing bubble, plunging commodities (very bad for Australian and Canadian people who have to pay of their massive mortgages) and why all this will lead to a rising dollar. Am I looking in the right direction?

A.S.

ANSWER: Yes. The only way to reach the economic crisis that forces political change is to put on the maximum amount of pressure. It does not even require that what people BELIEVE will happen, happens. Human nature is such that we all act in anticipation of events. Sure the Euro has bounced on belief that BREXIT is a passing phase. But the election of Macron was the worst possible outcome as it should have been for it now seals the fate of Europe. The Euro that will crumble as Brussels now tries to federalize everything to secure its own survival against the people of Europe to defeat this populist movement by political decree.

The dollar rose between 1980 and 1985 on the fears that the USA would default creating a two-tier monetary system with red dollars externally and green dollars internally. The US national debt hit $907.7 billion in 1980 and the Eurodollar market was about the same. The Europeans were convinced that the US would default by adopting a two-tier dollar. Consequently, between 1980 and 1985, Eurodollar deposits fell by about 50% and the Europeans moved their accounts to the USA where they thought they would get green dollars. That was the number one question I would get at seminars and conferences in Europe between 1980 and 1985. It never happened. Yet the “belief” it might moved capital to USA and that sent even the British pound to $1.03 in 1985.

Only the dollar moving to all time record highs in 1985 sparked the Plaza Accord. However, that is where the whole idea of the Euro was born. Jim Baker saw THE PROBLEM AS THERE WAS NO CURRENCY TO COMPLETE AGAINST THE DOLLAR. Baker urged Europe to create a single currency to prevent the dollar from rising, which then reduced US exports.

The national debt continued to rise reaching $2.125 trillion by 1986 and $3.2 trillion by 1990 and now we are at $20 trillion by 2017. The Dow Jones Industrial average was 1,000 in 1980. So exactly how is 21,000 on the Dow today out of like from just the expansion in debt?

You can see the correlation below. Our number remains 23,000 on the Dow where things begin to get interesting. So far, it is just keeping pace with international value. The first opportunity for a major dollar high is 2018 and after that comes 2020/2021.

1980-1990

Categories: USD $
May 8 2017

Why Central Banks & Buying Equities


Armstrong Economics Blog/Central Banks

Re-Posted May 8, 2017 by Martin Armstrong

QUESTION: Mr. Armstrong; Why is the Swiss Central Bank buying American equities? On the one hand you would think it is manipulation, but on the other, why manipulate the US share market?

Any clue since you have met with them directly?

LW

ANSWER: I wrote about that explaining that the central banks have been buying equities since 2014. The Swiss National Bank posted its latest 13-F holdings showing it has been buying equities at a stepped up pace during the first quarter 2017. Their total equity holdings have now reached $80.4 billion, up $17 billion from the $63.4 billion at the end of 2016.

The central banks are trapped. Lowering interest rates to virtually zero reduced their yield on reserves and they cannot sell off government securities. The only viable hedge is US treasuries in the bond world against the chaos of the Eurozone. That offers no diversification just more government debt. The ECB owns 40% of European government debt. The Swiss are buying US equities as a hedge against the Euro and political unrest. This is not manipulation. They lost a fortune trying to maintain the peg the franc with the Euro. They cannot use pegs, so the only alternative to just buying US Treasuries is private equities.

The central bankers understand what our model is warning about. As confidence continues to decline in governments, the central banks can go bankrupt UNLESS they too diversify out of government bonds.

Granted, nobody wants to talk about this yet in public. This is NOT manipulation – this is cover your ass time. We have been recommending this trade to institutions for the past 5 years

May 7 2017

California Wants to Tax Space Flights Per Mile They Travel


Armstrong Economics Blog/The Hunt for Taxes

Re-Posted May 7, 2017 by Martin Armstrong

California Taxing Rockets

Believe it or not, the California Politicians & Regulators just spend all their time trying to figure out how to tax something new for they will never reform, it’s always give me more. California wants to collect taxes from space transportation companies based upon, get this, a formula of how frequent a company launches spacecrafts out of the state, and most absurdly, how far a commercial spacecraft travels from California soil. They want to tax space travel per mile and claim 62 miles above California belongs to the State. Sooner or later, they will want a tax from all satellites that just pass by their state once a day.The space launches are taking place from Vandenberg Air Force Base, in Santa Barbara.

The California Politicians are a special breed. They must have brain damage or they are just so corrupt it is no longer funny. They have claimed that taxing space travel from California “will lead to increased activity in the industry and will foster an atmosphere of growth and prosperity once present during the golden age of California’s aviation industry, thereby creating jobs as the industry thrives in this state.”

Any company should look for prosperity in Texas or Florida and forget California. The State is beyond help at this stage.

This should be the new theme song for California

May 7 2017

Macron Hacked – But it Looks Like Anti-Establishment Anti-Soros Movement


Armstrong Economics Blog/France

Re-Posted May 6, 2017 by Martin Armstrong

Emmanuel Macron and his staff were the target of a major co-ordinated computer hack on Friday night with only 48 hours before the election. This is similar to the cyberattacks that hit the Democratic Party during Hillary Clinton’s presidential campaign last year. Macron’s campaign announced Friday that tens of thousands of its internal emails and documents were leaked to the public via a file-sharing website Pastebin. The government has ordered that the French media is not aloud to publish the content of any messages to make sure the truth remains hidden. Mainstream media is following suit even outside of France. Some nine gigabytes of data were posted by a user called EMLEAKS to Pastebin, a document-sharing site that allows anonymous posting.  They posted: (see below)

The similarity with the DNC hack raises the question if this is part of a collapse in government confidence because the targets in the Clinton and Macron incidents were clearly against”establishment” and anti-democratic forces. The DNC and Macron supporters clearly have one thing is common – maintain the status quo and no real change to government.

It was on June 14, 2016, when Crowdstrike published a study commissioned by the DNC, in which they accused the Russian government of breaching the DNC’s computer systems. They have a debatable track record and I would not take them seriously. In fact, I highly question any real ability to trace a professional hack. When we were being attempted to hack into our systems back in 1999, we traced it to Langley, Va, but to do so it had to be live. Trying to trace who was trying to get in after the fact was pointless, and all we could do was trace it to a location. After the fact, it is impossible to trace for one can relay the origin around the world.

Of course everyone is again blaming Russia. This is raising a much more deeper issue. Is this really part of the rising civil unrest and not Russia? It’s not like there is no anti-establishment/anti-Soros movement. The politicians call it “populism” but that is what they all call any anti-government movement whenever government becomes too correct. Here is a cartoon from 1896 showing William Jennings Bryan as the Populist Presidential Candidate of the Democratic Party.

Putin himself has come out publicly in support of maintaining the EU. Everyone blames Russia and even claimed Putin supported BREXIT, Newsweek reported: “If you search Putin’s speeches or official statements since the official announcement of the British referendum in February 2016, you won’t find any mention of it.” Indeed, there is no indication that Putin wants to see the EU break apart either. A search of his comments produces the opposite result, which tends to make sense. There is no advantage to having the EU fall apart to Russia, but it may actually present greater risks.

It is popular to blame Russia for everything. That was an Obama strategy to deflect criticism about the content of the leaks from the DNC. The press has been touting Putin conspired with Trump to beat Hillary. The top Democratic member of the Senate Intelligence Committee,California Sen. Dianne Feinstein, says she has yet to see any evidence of collusion between Donald Trump advisers and the Russian government. Nevertheless, all the mainstream media continue to imply Putin and Trump conspired yet they never discuss the contents of the Podesta emails revealing how corrupt the DNC really was.

Macron is coming out and claiming there are fake documents being released. This seems to be a desperate measure and he hopes he will win so he does not have to verify anything he says. How can someone read 9 gigs of data in less than 30 minutes to claim they include some fakes? But there is something deeply wrong here. It seems doubtful that any documents incriminating Macron are fake. None were fake in the Podesta email hack. So if this is a common source being Russia, then why fake documents with Macron but not Podesta?

The hack is real and the incriminating evidence shows the same disdain for the French people as the Democrats had for the American people. What they reveal is clearly the conspiracy of the “establishment” to sell out the French people just as the Democrats did in 2016.

Macedonia 3-26-2017

The source of the hack is more of an anti-establishment anti-Soros movement that is building globally. Many people see this as a war against Soros and his attempt to recreate the world in his own vision. I have warned that I too oppose Soros, and I believe he is trying to fund civil unrest on a global scale.

Soros is allegedly behind funding civil unrest in Poland and Hungary and countless other places including the United States. Perhaps with hindsight we will see that Soros is trying to take over France.

 

Torrent Files

1)https://archive.org/download/Pierrpersongmail.com.7z/Pierrpersongmail.com.7z_archive.torrent
2)https://archive.org/download/langannerch/langannerch_archive.torrent
3)https://archive.org/download/quentin.lafay/quentin.lafay_archive.torrent
4)https://archive.org/download/Cedric.oen-marche.fr/Cedric.oen-marche.fr_archive.torrent
5)https://archive.org/download/Alaintourretgmail.com/Alaintourretgmail.com_archive.torrent
6)https://archive.org/download/Box_pierrpersongmail.com/Box_pierrpersongmail.com_archive.torrent
7)https://archive.org/download/xls_cedric/xls_cedric_archive.torrent
8)https://archive.org/download/Macron_201705/Macron_201705_archive.torrent

Zip/RAR Files

1)https://archive.org/download/Pierrpersongmail.com.7z/pierrperson@gmail.com.7z
2)https://archive.org/download/langannerch/langannerch.rar
3)https://archive.org/download/quentin.lafay/quentin.lafay.rar
4)https://archive.org/download/Cedric.oen-marche.fr/cedric.o@en-marche.fr.rar
5)https://archive.org/compress/Alaintourretgmail.com/formats=RAR&file=/Alaintourretgmail.com.zip
6)https://archive.org/download/Box_pierrpersongmail.com/box_pierrperson@gmail.com.rar
7)https://archive.org/download/xls_cedric/xls_cedric.rar
8)https://archive.org/compress/Macron_201705/formats=RAR&file=/Macron_201705.zip
Two smaller files with no ZIP/RAR

1)https://archive.org/download/Pierrpersongmail.com_drive.part2/Pierrpersongmail.com_drive.part2_archive.torrent
2)https://archive.org/download/Pierrpersongmail.com_drive.part1/Pierrpersongmail.com_drive.part1_archive.torrent

 

May 7 2017

Healthcare Still a Mess


Armstrong Economics Blog/Corruption

Re-Posted May 7, 2017 by Martin Armstrong

healthcare-1

QUESTION:  I read the obamacare repeal blog. I agree with the tax part. But removing pre existing conditions and most of the coverage protections when majority of families in US is one disaster away from bankruptcy and dying without coverage. is that right?

Thanks

T

ANSWER: No. There was a very simple solution. The healthcare industry should be nationalized as are utilities (not ownership) because it is a necessary monopoly. Any price increase must be approved and lawsuits must end. There should be predefined limits for damages not open-ended.

Anyone with problems of health that were uninsured should have been covered by Medicaid. There was no need to change the insurance of 300 million people for 20 million.

They made student loans non-dischargeable in bankruptcy to help bankers. What they should do is the reverse – exempt hospital bills from being able to garnish wages or assets or push anyone into bankruptcy.

Healthcare and Education have become abusive because they bribe politicians to keep their funds flowing. If they really had to compete, prices would decline.

Nobody should suffer and nobody should die because they lack money. That is how the justice system works. You get a court appointed lawyer who job is to lose – that have a near perfect record of losing every case about 99%. Any wins are by stupidity of prosecutors not brilliance of defense lawyers.

Hospitals have been doing their pest to put private practitioners out of business. You join the club, or you are out. Sound familiar?