This isn’t Michael Burry pulling apart synthetic CDO level stuff. Show any junior analyst the raw data on default rates and they’ll be terrified. In part because they’re a junior analyst working on Wall Street largely to pay off their massive student loans.
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What’s the short? Just recently was talking about the difference between making good money and making generational wealth for Burry / Paulson in 09 was shorting the CDS and not the bank stocks. Similar analysis, but different payoff scale
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That’s the thing - it’s all government backed so there’s not really a short play unless you’re shorting private colleges or something. Probably the government just writes it down and taxpayers swallow it somehow?
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This is exactly why I'm not sure we'll see a "pop" of any kind, I'm not sure how we could with the government swallowing the losses. But we should expect to see a continuation in people unable to purchase homes and cars via debt, which would have implications for those markets.
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thoughts on how they think it'll pop? people could stop paying their mortgages, dot com prices had to come down... i don't see what happens with loans other than constant slow tax on grads
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Most likely result is government just eats defaults and a generation of people get hammered spending the rest of their lives trying to pay them back
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I'd be curious to know if you have any suggestions for possible solutions? It's been ongoing for nearly a decade now.
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I’m working on replacing them
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It has been a crisis for over a decade. Student loans are the heaviest, since they cannot be written off or securitised. They stay on the deficit.
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I dont this is the only debt bubble, what about total government debt worldwide, local state and country?
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Have you been a guest in any pod cast episodes that we could listen? I think it would be great opportunity to listen and learn about the current state and how you see both Lamda and MOOC’s eventually disrupting the space.
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If we can bail out the auto industry, Wall Street, giant banking institutions.... why can’t we bail out students from these predatory loans and tuitions?
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Government bailout? If it worked for automotive and for the banks why not here? Or is the size of it so different?
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