Month: March 2019

Authored by Michael Snyder via The Economic Collapse blog,

When compared to a similar point in time, Millennials are deeper in debt than any other generation that has come before them.  And the biggest reason why they are in so much debt may surprise you. 

We’ll get to that in a minute, but first let’s talk about the giant mountain of debt that Millennials have accumulated.  According to the New York Fed, the total amount of debt that Millennials are carrying has risen by a whopping 22 percent in just the last five years…

New findings from the New York Federal Reserve reveal that millennials have now racked up over US$1 trillion of debt.

This troubling amount of debt, an increase of over 22% in just five years, is more than any other generation in history. This situation may leave you wondering how millennials ended up in such a sorry state.

Many young adults are absolutely drowning in debt, but the composition of that debt is quite different when compared to previous generations at a similar point in time.

Mortgage debt and credit card debt levels are far lower for Millennials, but the level of student loan debt is far, far higher…

While the debt levels accumulated by millennials eclipse those of the previous generation, Generation X, at a similar point in time, the complexion of the debt is very different.

According to a 2018 report from the St. Louis Federal Reserve Bank, mortgage debt is about 15% lower for millennials and credit card debt among millennials was about two-thirds that of Gen X.

However, student loan debt was over 300% greater.

Over the last 10 years, the total amount of student loan debt in the United States has more than doubled.

It is an absolutely enormous financial problem, and there doesn’t seem to be an easy solution.  Some politicians on the left are pledging to make college education “free” in the United States, but they never seem to explain who is going to pay for that.

But what everyone can agree on is that student loan debt levels are wildly out of control.  The following statistics come from Forbes…

The latest student loan debt statistics for 2019 show how serious the student loan debt crisis has become for borrowers across all demographics and age groups. There are more than 44 million borrowers who collectively owe $1.5 trillion in student loan debt in the U.S. alone. Student loan debt is now the second highest consumer debt category – behind only mortgage debt – and higher than both credit cards and auto loans. Borrowers in the Class of 2017, on average, owe $28,650, according to the Institute for College Access and Success.

What makes all of this even more depressing is the fact that the quality of “higher education” in the U.S. has gone down the toilet in recent years.  For much more on this, please see my recent article entitled “50 Actual College Course Titles That Prove That America’s Universities Are Training Our College Students To Be Socialists”.

Our colleges and universities are not adequately preparing our young people for their future careers, but they are burdening them with gigantic financial obligations that will haunt many of them for decades to come.

We have a deeply broken system, and we desperately need a complete and total overhaul of our system of higher education.

Due to the fact that so many of them are swamped by student loan debt, the homeownership rate for Millennials is much, much lower than the homeownership rate for the generations that immediately preceded them.  The following comes from CNBC…

The homeownership rate for those under 35 was just 36.5 percent in the last quarter of 2018, compared with 61 percent for those aged 35 to 44, and 70 percent for those aged 45 to 54, according to the U.S. Census. The millennial homeownership rate actually dropped in the fourth quarter compared with the third quarter, but was unchanged year over year.

This is one of the big reasons why “Housing Bubble 2” is beginning to burst.  There are not enough Millennials buying homes, and it looks like things could be even worse for Generation Z.

If you are a young adult, I would encourage you to limit your exposure to student loan debt as much as possible, because the debt that you accumulate while in school can have very serious long-term implications that you may not even be considering right now.

via ZeroHedge News https://ift.tt/2O3dMAz Tyler Durden

A $25 million racketeering and money laundering conspiracy that was at the center of the “largest college admission scam ever” saw its ringleader unmasked thanks to the Wall Street Journal.  The man at the center of the scheme is 58-year-old William Rick Singer. We reported on the scandal at length yesterday. 

Singer is called a “self described serial entrepreneur” who appeared to have found his niche in helping young people get into college. He was the founder of the Edge College & Career Network, the institution that helped broker bribes between the uber-wealthy and prestigious colleges. According to the company’s website, his goal was to “help alleviate the anxiety of getting into college” because he “has seen first hand the stress that the college admissions and athletics recruiting process can put on a family.”

Following yesterday’s charges, Singer pled guilty to racketeering, money laundering, conspiracy to defraud the United States and obstruction of justice. He is looking at between 15 and 19 1/2 years in prison for his crimes. During his court appearance, after a federal prosecutor ran through a number of alleged offenses committed by Singer, he confessed, saying: “Your honor, everything that [the prosecutor] said is true.”

He also admitted to the judge that he knew he was breaking the law and that he had done “many more” things. He detailed, at length, his entire test taking scheme, saying that he would often claim students had learning disabilities in order to help control testing sites.

Singer said: “If we could ensure that, we would secure a score that would be strong enough so they could get into the schools they wanted to go to.”

“The only way the scheme could work was if I could control the proctor and the site coordinator,” he continued.

He also admitted to bribing test administrators and bringing his own proctors for tests. 

Singer told the court that the kids always thought they were taking the test, but that the proctor and the administrator knew it was fixed. “The kids thought they really took the test but the proctor and administrator knew. I’m absolutely responsible,” he said. 

He explained that he arranged for students to write the answers on a separate sheet and then the proctor would bubble in the correct answers before the test was submitted. He also admitted to creating false sports profiles of students, simply stating he would “take a picture of the students face and put it on somebody else”.

Singer described an example of how he would operate: if a family wanted his services, he would arrange a scheme wherein they would, for example, make a $500,000 donation to a college’s athletics program and then a separate $200,000 donation to Singer’s charity, which was supposed to be for underdeserved kids. Singer’s company website says that he’s helped guide thousands of high school students on the college admission process.

His website states: “We partner with your son or daughter to identify their strengths, unlock their potential, choose the right college, position themselves for admission, and outline a course of study and extracurricular experiences to lead to a life of success.”

One of his clients, Greg Abbott, CEO of International Dispensing Corp, claimed that he heard of Singer’s services through a network of New York City mothers. Abbott had spoken to the FBI and called the entire situation “insane”.

“Literally, we were involved with this guy for our daughter to help out with college counseling and he gets f— arrested. We didn’t know he was doing this s—,” he told the Wall Street Journal. 

Singer is set to be sentenced in June.

via ZeroHedge News https://ift.tt/2TOvYmI Tyler Durden

Headline durable goods orders beat expectations notably in preliminary (delayed) January data (rising 0.4% MoM vs expectations of a 0.4% decline), however, excluding transportation-equipment demand, which is volatile and can move wildly on large orders in any given period, orders fell 0.1% – confirming the last six months of very modest growth (if any).

 

On the bright side, non-military capital goods orders excluding aircraft – a proxy for business investment – notably outperformed expectations – rising 0.8% MoM vs +0.2% expectations – the biggest jump since July.

As Bloomberg notes, the improvement in demand, underscored by orders for machinery and communications equipment, suggests a solid start to the year for manufacturers that should support economic growth in the first quarter. At the same time, other data for February give a more muted picture, with the Institute for Supply Management’s factory index falling to a two-year low in February and manufacturers adding the fewest workers since 2017.

Finally, we note that amid the ongoing Boeing debacle, total durable-goods orders, which gained 0.4 percent from December, got a boost from the volatile transportation category, reflecting a 15.9 percent rise in bookings for civilian aircraft and parts. Separate data showed Boeing’s aircraft orders fell in January to less than a quarter of the prior month’s total.

via ZeroHedge News https://ift.tt/2u2fvgt Tyler Durden

An 18-year-old Boeing 767-300 flying from Beijing to Seattle was forced to turn around on Wednesday for “maintenance” after the airline said that the plane had suffered a mechanical failure, reports the China Times.

Flight DL128 received an engine warning after takeoff at 12:20 p.m. on Wednesday, according to Delta, and returned to the Beijing Capital International Airport around 90 minutes later. The airline also said that most of the passengers on the flight will switch to DL188 as the original plane undergoes a maintenance assessment. 

Last year a similar flight was forced to land, when a Boeing 767 flying from Beijing suffered a potential engine malfunction and landed at a military airport in Alaska. 194 passengers were transferred to another aircraft before continuing on their way. 

On Sunday a Boeing 737 Max 8 passenger plane operated by Ethiopian Airlines crashed approximately six minutes after takeoff from Addis Ababa, Ethiopia, killing all 149 passengers and 8 crew members on board. The plane was just four months old at the time. 

China is one of more than two-dozen countries and airlines which have grounded the 373 Max 8 until further notice. 

via ZeroHedge News https://ift.tt/2TJMp3F Tyler Durden

Following disappointing (for inflationists) CPI data earlier in the week, US producer prices also rose at a slower than expected rate in February.

While Final Demand PPI printed as expected at +1.9% YoY, that is the weakest growth in prices since June 2017 (and back below the key Fed-mandated 2.00%)…

Core PPI (ex Food and Energy) slowed more than expected (+2.5% YoY vs +2.6% YoY exp).

• The index for final demand services was unchanged in February .

• The index for final demand goods increased 0.4 percent in February following three consecutive declines.

Over 80 percent of the advance can be traced to prices for final demand energy, which rose 1.8 percent. The index for final demand goods less foods and energy edged up 0.1 percent. Conversely, prices for final demand foods fell 0.3 percent. Forty percent of the increase in the index for final demand goods is attributable to a 3.3- percent rise in gasoline prices. The indexes for diesel fuel, jet fuel, integrated microcircuits, residual fuels, and beef and veal also moved higher. In contrast, prices for fresh and dry vegetables declined 12.8 percent. The indexes for iron and steel scrap and for residential natural gas also decreased.

In February, prices for traveler accommodation services rose 5.3 percent. The indexes for machinery, equipment, parts, and supplies wholesaling; food retailing; portfolio management; and legal services also moved higher. Conversely, margins for fuels and lubricants retailing fell 10.5 percent. The indexes for apparel, jewelry, footwear, and accessories retailing; airline passenger services; health, beauty, and optical goods retailing; and nonresidential real estate services also declined.

More comforting data for The Fed to remain “patient” – the question is, is ‘bad’ news still good news for the stock market?

via ZeroHedge News https://ift.tt/2HBBkeT Tyler Durden

President Trump slammed California Governor Gavin Newsom (D), who is reportedly planning to take executive action to eliminate the death penalty in the state. 

According to the Sacramento Bee, the move will grant reprieves to all 737 inmates awaiting executions – “around a quarter of the country’s death row inmates.”

“I do not believe that a civilized society can claim to be a leader in the world as long as its government continues to sanction the premediated and discriminatory execution of its people,” Newsom said in a statement distributed to several media outlets. 

Newsom says the death penalty system has discriminated against mentally ill defendants and people of color. It has not made the state safer and has wasted billions of taxpayer dollars, according to prepared remarks Newsom plans to deliver Wednesday morning when he signs the order.

“Our death penalty system has been – by any measure – a failure,” Newsom plans to say. “The intentional killing of another person is wrong. And as governor, I will not oversee the execution of any individual.” –Sacramento Bee

Newsom is expected to officially announce his decision in a Wednesday morning news conference. 

Via NBC4, an administration source in Newsom’s office said the order does the following:

1. Puts in place an executive moratorium on the death penalty in the form of a reprieve for all individuals sentenced to death in California.
2. Withdrawals California’s lethal injection protocol.
3. Immediately closes the execution chamber at San Quentin.
4. States clearly the directive does not provide for the release of any individual from prison or otherwise alter any current conviction or sentence.

Responding to the news, President Trump tweeted on Wednesday morning that Newsom was “Defying voters,” and that the “Friends and families of the always forgotten VICTIMS are not thrilled, and neither am I!”

Defying voters, the Governor of California will halt all death penalty executions of 737 stone cold killers. Friends and families of the always forgotten VICTIMS are not thrilled, and neither am I!

— Donald J. Trump (@realDonaldTrump) March 13, 2019

California hasn’t executed anyone in over a decade due to legal challenges to the state’s execution protocol, however at least 20 inmates would face immediate execution if those challenges were to be resolved. According to the Bee, Newsom has said he worries it could happen soon. 

Newsom has been a longtime opponent of the death penalty. While campaigning for a measure to repeal the death penalty in 2016, he told The Modesto Bee editorial board he would “be accountable to the will of the voters,” if he were elected governor.

“I would not get my personal opinions in the way of the public’s right to make a determination of where they want to take us” on the death penalty, he said. –Sacramento Bee

The death penalty moratorium will be in place for the duration of Newsom’s time as governor – while a future governor could decide to resume executions. 

California is one of 31 states with the death penalty, and follows several other states’ governors who have placed similar moratoriums on executions.  

via ZeroHedge News https://ift.tt/2Hy2SS7 Tyler Durden

Authorities at the Port of New York and New Jersey seized a massive 3,200 pounds of cocaine with an estimated street value of $77 million from a shipping container on Feb. 28, NPR reports. The massive drug bust took place after officials carried out an inspection of the shipment when they noticed tampering of several containers on a large vessel traveling from – where else – Buenaventura, Colombia, DEA special agent in charge Ray Donovan told NPR. That is when they discovered the nearly ton and a half of cocaine.

As NPR notes, the bust was part of a joint operation of the DEA, Customs and Border Protection, Coast Guard, Homeland Security Investigations, New York Police Department and New York State Police.

“This is the type of case that will last years. We’re investigating where it came from, where it’s going, everybody and everyone involved,” Donovan said hinting that a new “Escobar” may have emerged quietly in Colombia in recent years. “Any time an organization is moving that amount of cocaine, they’ve been involved for a long period of time.”

“This interception prevents a massive quantity of drugs from getting to the streets and in the hands of our children,” said Troy Miller, CBP Director of New York Field Operations, in a statement.

The shipment was intercepted when the vessel stopped over in New York/Newark on its way to Antwerp, Belgium. It contained a legitimate shipment of dried fruit, Donovan said. According to the report, it is unclear whether the drugs were destined for the U.S., or meant to continue on to Europe.

“The cocaine was loaded on the very tail end of the shipment,” Donovan explained. “That tells us it was the last thing put onto the container so that it was the first thing to be taken off, which is indicative of a very sophisticated organization that’s been involved in trafficking for some time.”

Donovan said the shipment is part of a larger trend in higher cocaine usage in recent years. “The cocaine market is coming back,” he said, adding that authorities seized about 26,500 pounds of cocaine in 2018; obviously it is unclear how many tons of Colombian cocaine were successfully be smuggled into the US in recent years.

Still, it may be too early to plan the script for a new Escobar TV drama: on a national level, the volume of drugs seized at ports of entry and in the field has been fluctuating. Officials at the borders seized 6,550 pounds of cocaine in 2018, down from 9,346 pounds in 2017, but up from 5,473 pounds in 2016.

Donovan also noted a growing trend in cocaine laced with fentanyl, a powerful opiate often used as a cheap, more potent alternative to heroin.

via ZeroHedge News https://ift.tt/2TC4Fgc Tyler Durden

The FAA remains stoic in its defense of Boeing in the face of the rest of the world banning, grounding, and investigating their latest 737 Max8 aircraft. However, reports today from The Wall Street Journal could force Elaine Chao to take action today.

In recordings of conversations with controllers of the pilot of the Ethiopian Airlines jet that crashed Sunday, he didn’t indicate any external problems with the jet or the flight, like a bird collision, CEO Tewolde Gebremariam told The Wall Street Journal.

The pilot “reported back to air-traffic controllers that he was having flight-control problems” and wanted to return to Addis Ababa, Mr. Gebremariam said.

The executive said he had listened to the recording and there were no other problems cited by the pilot.

The U.S. Federal Aviation Administration reiterated Tuesday that the aircraft is safe.

“Our review shows no systemic performance issues and provides no basis to order grounding the aircraft,” the agency said. U.S. carriers, sticking by the FAA guidance, have said they have no plans to ground flights.

But as the black boxes are investigated and if Ethiopian Air’s CEO’s comments are true – why wouldn’t they be – then both Boeing and the FAA face a more systemic problem than is currently considered.

Boeing shares are down modestly this morning, testing post-crisis lows…

The Wall Street Journal earlier reported that U.S. and Ethiopian officials were discussing the destination of the black boxes, with American officials quietly pushing for them to be sent to the US.

via ZeroHedge News https://ift.tt/2HeKnmk Tyler Durden

President Trump started off hot on Wednesday, tweeting that while he greatly appreciates House Speaker Nancy Pelosi’s statement that she’s against impeachment, “everyone must remember the minor fact that I never did anything wrong.” 

Trump boasted that the “Economy and Unemployment are the best ever, Military and Vets are great – and many other successes!” 

“How do you impeach a man who is considered by many to be the President with the most successful first two years in history, especially when he has done nothing wrong and impeachment is for “high crimes and misdemeanors”?” 

I greatly appreciate Nancy Pelosi’s statement against impeachment, but everyone must remember the minor fact that I never did anything wrong, the Economy and Unemployment are the best ever, Military and Vets are great – and many other successes! How do you impeach….

— Donald J. Trump (@realDonaldTrump) March 13, 2019

….a man who is considered by many to be the President with the most successful first two years in history, especially when he has done nothing wrong and impeachment is for “high crimes and misdemeanors”?

— Donald J. Trump (@realDonaldTrump) March 13, 2019

Pelosi (D-CA) came out against impeaching President Trump in a Monday Washington Post article – telling the paper that she thinks it would be too divisive to the country, adding that Trump is “just not worth it.” 

I’m not for impeachment. This is news. I’m going to give you some news right now because I haven’t said this to any press person before. But since you asked, and I’ve been thinking about this: Impeachment is so divisive to the country that unless there’s something so compelling and overwhelming and bipartisan, I don’t think we should go down that path, because it divides the country. And he’s just not worth it. –Washington Post

“I don’t usually talk about him this much,” Pelosi added. “This is the most I’ve probably talked about him. I hardly ever talk about him. You know, it’s not about him. It’s about what we can do for the people to lower health-care costs, bigger paychecks, cleaner government.”

via ZeroHedge News https://ift.tt/2F9O2Qc Tyler Durden