Monday, October 14, 2013

Student loans are the only bubble still around

Debt deleveraging has taken place in the mortgage market as well as in the credit card market, but not in the student loans market. And that is reflected in the delinquency rates.
Student loans have now a higher delinquency rate than the other two categories. And this is only getting worse with the terrible labor market conditions.

For more see the story in Mother Jones.

3 comments:

  1. Student loan aside -- yes, deleveraging has taken place, back to 2008 levels. Is this supposed to be comforting? In other words, where is expansion supposed to come from, considering wages are declining? I certainly hope not from an expectation that households should re-leverage from they place they were just prior to the crash.

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  2. The trouble is that demand is driven by debt financed consumption. What is needed is economic growth with equity, that is, rising wages with productivity and Keynes' process of investment socialization.

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  3. As to this post, I am very depressed,

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