A series of bombshell economic events have happened recently that are being blocked out by the great Fiscal cliff faux pas debate. These are the weekly under the radar events that made our eyes pop.
Student Loan Defaults Jump
The New York Fed has a new study which shows student loan delinquency rates were a whopping 11% in Q3.
Outstanding student loan debt now stands at $956 billion, an increase of $42 billion since last quarter. However, of the $42 billion, $23 billion is new debt while the remaining $19 billion is attributed to previously defaulted student loans that have been updated on credit reports this quarter.1 As a result, the percent of student loan balances 90+ days delinquent increased to 11 percent this quarter.2
Other highlights from the report include:
- Outstanding auto loans ($768 billion) are the highest in nearly four years.
- Auto loan balances increased for the sixth consecutive quarter.
- Mortgage debt at $8.03 trillion is at its lowest level since 2006.
- Delinquency rates for mortgages decreased from 6.3 percent to 5.9 percent.
- HELOC delinquency rates remain high by historical standards (4.9 percent).
- New foreclosures are returning to their pre-crisis levels, as about 242,000 consumers had a new foreclosure added to their credit report, the lowest in nearly six years.
- Mortgage originations, which we measure as the appearance of new mortgages on consumer credit reports, rose to $521 billion, the fourth consecutive quarterly increase.
Obama Administration Once Again Refuses to Label China a Currency Manipulator
Brought to you by the Treasury Department:
China's exceedingly high foreign exchange reserves, the persistence of
trade and current account surpluses, despite China's favorable cyclical position compared to advanced economies operating well below potential output, and the limited degree of appreciation of the RMB relative to the rapid productivity gains in the traded goods sector, suggest that the real exchange rate of the RMB remains significantly undervalued, and further appreciation of the RMB against the dollar and other major currencies is warranted. Chinese authorities acknowledge the need for continued exchange rate reform, and have reaffirmed their commitment to move more rapidly toward a market-determined exchange rate.
This report was delayed for the election and its clear the Obama administration has no intention of doing much about our massive job losses and trade deficit due to China's currency manipulation.
One Criminal Charge for Mortgage Fraud
We have one criminal charge for mortgage fraud.
A former executive of Lender Processing Services, Inc. (LPS) – a publicly traded company based in Jacksonville, Fla. – pleaded guilty today, admitting her participation in a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage-related documents with property recorders’ offices throughout the United States.
Senate For Profit College Investigation Report
Senator Tom Harkin has a video discussing the Senate's comprehensive report on for profit colleges. This comprehensive report is issued by the committee on health, labor, education and pensions, or HELP. It's worst than we knew. The populist reader's digest version is ripoff and scam. While enrollees in for profit higher education account for 10% of all students, they account for 50% of student loan defaults. Even worse, of those who enrolled in 2008-2009, 54% had dropped out.
Greece Bail Outs Continue
The European bail outs are a never ending cycle of rinse, cycle, repeat. Expecting Greece to generate growth under never ending austerity measures is clearly absurd. The latest is demanding Greece buy back some of it's debt to receive more bail out funds. Broke and busted Greece with have to borrow the money. Of course Greek pensions have been decimated.
2 Million will lose unemployment benefits in January 2013
The Emergency unemployment benefits will start to be phased on January 2, 2013. The estimates are between 2 and 5 million will lose their benefits by years end. The problem is there are no jobs as we've documented many times.