Replies to post #292782 on Zeev's Turnips Patch-No Politics (ZEEV)

[marketmaven]

COCO, LAUR, RLRN and APOL All Playing DOE Carry Trade

US BUBBLE STUDENT LOANS was standing at $100+BN
RIP-OFF: Student Loan Subsidies Using A Loophole That Will Cost The US Gov't - Taxpayers - Billions In Interest)
By Kathy M. Kristof, LA Times Staff Writer} 9/3/2004
Students who need help paying college tuition bills this fall can get a federally subsidized loan that charges 3.37% interest —not a bad deal. The deal can be even better for lenders. The government guarantees some of them a 9.5% interest rate for the student loans they issue, no matter what rates the lenders themselves are charging. The difference, and therefore the federal subsidy, can be 6 percentage points.

"Taxpayers are being ripped off," said Luke Swarthout, higher education associate with the U.S. Public Interest Research Group. "It is clear that no one is safeguarding the rules that are governing the student loan playing field." Education advocates have been attacking the system for years, to no avail. Their cause could be helped by a new report that says the number of loans covered by the 9.5% subsidy is growing at a rapid clip as some lenders aggressively exploit what critics call a loophole in the law.

The report by the Institute for College Access and Success Inc., a nonprofit education research organization, says there are $17.5 billion of the 9.5% loans outstanding, up from $12 billion at the end of 2002 and from $10 billion in 1998...... The government expected the loans to slowly dissipate; instead, they've grown. The reason, Shireman said, is that the Department of Education issued a directive aimed at clarifying the law that instead opened a gaping loophole.

The directive allows lenders to "recycle" new loans into old tax-exempt pools, Shireman said.......
http://www.latimes.com/business/la-fi-loan6sep06,1,6179898.story?coll=la-headlines-business

PS: yes, banks offer overdraft facilities, but from what I know, in the US, the overdrafts authorizations amount to several hundreds of dollars. Last time Citibank told me that I could have such an agreement but the smallest overdraft authorized was something like 1,000 dollars. Of course we all know what happens when "easy money" encourages spending. I decline the offer therefore.

[porter]

<I'm not a Greenspan fan, but I know what he's trying to do.>

How can you know if HE doesn't even know. <GG>

<He's studied Japan until he's blue in the face,>

Is this the new Fall season colour?

<...he's got to inflate the US out of the forces of world deflation.>

Everyone needs a calling.

<The fact is ...the world is now producing more goods than it can digest.>

Please substitute the word "we" for "it."

<Will Greenspan's methods work?... this has been a very tepid "recovery.">

Hey, he's not a sprinter. He's a tepid creature with tepid ways.

<Already the inventories (cars) are piling up,...>

Who buys cars off the lot, anymore ? Think eBay.

<Housing prices have gone through the roof>

Hold your tongue. I have a Venezuelan banker who wants to buy my house with the money he stole from the money my government gave his country. What's fair is fair.

<...but here too the inventories are building.>

Call me when LaJolla waterfront property falls.<g>

<...you can bet on one thing -- the media doesn't understand what is happening.>

Hey, no mention of $4000 gold? Where are the clotheslines of yesteryears?

Regards.
Porter

[porter]

<Will the Dow, at last, confirm?>
-------------------------------------------------------
YES.

And I assure you that your Balboa view on a clear day is far better than Buffett's view in Omaha.