The Perils of Student Debt

5 Jun 2018

Now is the time the high schoolers are graduating, and many are preparing for college. Part of the preparation is figuring out the finances – which includes student loans for many. Beware of the consequences…

A GENERATION BURIED IN STUDENT DEBT – Chicago Sun Times, 2018/06/02

The weight of the roughly $80,000 in debt that Judith Ruiz would leave school with didn’t hit her when she was applying for the student loans that would finance her education at Columbia College Chicago.

Or while she was sitting in lecture halls. Or even as she walked across the stage at graduation.

But six months later, still without a job, with lenders hounding her to pay, her student loans caught up to her, and Ruiz defaulted — for the first time.

Ruiz, now 30 and living with her mother in Oak Park, is working. But she remains in default on her student loans. And that’s eating away at her.

“You think, ‘Oh, hey, I’m just going to take out a loan, and it’ll cover everything, and I’ll just worry about it later,’ like a credit card. But this is so much bigger than that. That may work for a few thousand dollars, but it’s not going to work for $80,000.”

All of this debt delays what in the past was to be expected – you graduate, get a job to support yourself, move out on your own, maybe even get married and start a family.

But with the huge load of debt, it’s too much too overcome and graduates end up back home.

The article details several different accounts of hardship resulting from the load of student debt.


More Sears, K-Mart Stores Closing

21 May 2018

Sears is closing 40 stores in 24 states — here’s the list – San Francisco Chronicle, 2018/05/19

Sears is quietly closing at least 40 stores in 24 states, in addition to the 166 stores that the company previously said it would close this year.

Most of the stores on the new list will close in July and August.

Sears has cut its store count in half within the last five years. The company had 1,002 stores as of early February, down from 1,980 stores in 2013. It closed another 103 stores in April, in addition to the 40 stores that will close by August.

Hispanic Unemployment at All-Time Lows

10 May 2018

Opinion piece by a Hispanic American, commenting on low unemployment among Hispanic legal Americans.

Hispanics Score Under Trump Real Clear Politics, 2018/05/09

Among Latinos, the jobless rate has only registered below 5 percent for seven months total – in the history of this country. Six of those months have occurred with Donald Trump in the White House, including the April report released last week.

In contrast to the mainstream media narrative that the current president represents a retrenchment to a monolithic white America, the results so far suggest that exactly the opposite is happening as both Hispanic and African-American jobless figures reach all-time lows.

The recently passed tax cuts also represent a big win for Hispanic families who struggled under the previous administration. The harsh reality is that under President Obama, despite his popularity among voters of color, both blacks and Hispanics saw the gap widen between household wealth of white families and minorities families. The slow growth of the Obama years propelled massive asset appreciation, which exacerbated inequality because wages stagnated, much to the detriment of Hispanic prosperity. Thankfully, help is not just on the way, help is already here: The first quarter of 2018 saw wages – for all Americans – grow at the fastest clip in over a decade.


The piece also references how border security has helped bring down unemployment for legal Hispanic Americans.

CBO Reports Significant Increase in Tax Receipts from Last Year

9 May 2018

Monthly Budget Review for April 2018 Congressional Budget Office, 2018/05/07

Receipts for the first seven months of fiscal year 2018 totaled $2,012 billion, CBO estimates—$83 billion more than the amount during the same period last year.

Receipts collected in April were $30 billion to $40 billion larger than CBO expected when it prepared the estimates reported in The Budget and Economic Outlook: 2018 to 2028, which it issued on April 9. The bulk of that difference stems from larger-than-anticipated payments of individual income taxes. Those payments were mostly related to economic activity in 2017 and may reflect stronger-than-expected income growth in that year. Part of the strength in receipts also may reflect larger-than-anticipated payments for economic activity in 2018. The reasons for the added revenues will be better understood as more detailed information becomes available later this year.

The federal government realized a surplus of $218 billion in April 2018, CBO estimates—$35 billion larger than the surplus in April 2017.

CBO estimates that receipts in April 2018 totaled $515 billion—$59 billion (or 13 percent) more than those in the same month last year.


Translation… the tax cuts are working as intended.

Where Do Various Income Groups Keep Their Money

16 Apr 2018

Here’s where the super rich keep their moneyCNBC, 2018/02/07

Once you join the three comma club, where does all of that money actually live? It’s not as though most billionaires have the bulk of their fortunes sitting in a savings account.

To break down where the super rich keep their money, Jeff Desjardins at Visual Capitalist used data from the Federal Reserve Survey of Consumer Finances from 2016 to show how wealth distribution varies for those with a net worth of $10,000 or $100,000 versus those who are worth $1 billion.

No matter where you keep your money, the amount you have of it doesn’t define if you’re rich or not. That really comes down to one simple question: If you lost your job tomorrow, how long could you survive?

The article has a graphic detailing how various income group have these assets distributed from vehicle and homes to business investments.

Why Dodd-Frank Needs To Be Fixed

16 Mar 2018

This is an in depth article explaining the enormous monstrosity that is Dodd-Frank. Initial compliance costs runs in the hundreds of thousands of dollars ($400M – $600M for Chase). Smaller banks could not keep up with those costs.

Another issue is that much of Dodd-Frank still has a bunch of regulations that need to be determined. It was estimated to be 12-18 months to complete everything. It probably hasn’t been done. But what that does is this… because there is a bunch of legislation that is yet to be determined – it enriches the politicians. Why? Banks will spend money lobbying politicians as the various undetermined rules are determined. That’s in the article below as well.

Too big not to fail – The Economist, 2012/02/18

Over-regulated America – The Economist, 2012/02/18

Toy Icon Toys’R Us Is Wrapping It Up

16 Mar 2018

Toys “R” Us shutting U.S. stores, liquidating inventory – CBS, 2018/03/15

Toys “R” Us is going out of business in the U.S. The iconic chain announced early Thursday that it’s seeking bankruptcy court approval to start closing its 735 U.S. stores and liquidating their inventory.

Some 33,000 employees will lose their jobs as a result.

Toys “R” Us, which declared bankruptcy in September, was unable to convince creditors to refinance its more than $5 billion in debt, a crushing load that experts say hampered its ability to adapt to the growth in online shopping, among other consumer trends.

The chain was hobbled by debt stemming from the 2005 leveraged buyout by KKR, Bain Capital and Vornado Realty Trust (VNO). That deal placed it at disadvantage against larger rivals such as Amazon (AMZN), Walmart (WMT) and Target (TGT), which have made inroads in the toy market in recent years.

Toys “R” Us closing leaves workers, customers hanging – CBS, 2018/03/15

The company’s current leadership only compounded its mistakes by failing to act quickly and decisively. One example: When Toys “R” Us first declared bankruptcy in September, CEO Dave Brandon vowed not to close any stores, blithely remarking that “today marks the dawn of a new era at Toys “R” Us.” He was wrong.

The bankruptcy filing doesn’t cover Toys “R” Us’ international business, but it’s struggling, too. The company’s U.K. business on Wednesday announced that it is closing its doors after failing to find a buyer — about 3,000 people will lose their jobs. Toys “R” Us is considering combining as many as 200 of its top-performing U.S. stores with its Canadian operations, but Selbst said that would be complicated, expressing doubt it will fly.