Student Loan Bubble

It looks like the next great bubble is about to collapse.  In 2008 it was the Housing Market bubble. 

Take a look at this article which references the article below that.  This is what I would refer to as the equivalent of a Reverse Mortgage.  The Reverse Mortgage was popular for a couple years before the housing bubble burst, and maybe still used today, whereby you would sell your equity in the house for a loan of money right here and now to extinquish all debt.  Then when you sold the house, you would have to pay off the reverse mortgage loan (the upfront equity payment) first, and then get whatever money was left over.

Same idea here, only it's no longer the equity of the house, it's the future equity of a slave (I mean, college student). 

http://www.zerohedge.com/news/modest-proposal-students-refuse-become-debt-slaves-opt-sell-equity-their-future-wealth-instead

http://www.economist.com/blogs/freeexchange/2012/04/education?fsrc=scn/tw/te/bl/sellingapieceofyourfuture

My guess, we have 2-3 years before the student loan bubble pops and the $1+ Trillion in student loans needs to be bailed out so it doesn't "collapse" the entire higher education system (i.e. the gov't education system).

S&P 500 (Updated)

A real quick chart here.  Just wanted to pull something from an article and show you how this could play out.
http://www.oftwominds.com/blogmar12/SPX-Nikkei2-12.html

There's 3 scenarios that I see here labeled.  Most likely would be #2 in my opinion, but #1 and #3 can't be ruled out as infinite money printing ("liquidity") could be provided to force the markets higher, or a complete lack of liquidity could tank the markets.

Scenario #1 would be a breakthrough to the upside in the next couple weeks or so.  This seems unlikely as Greece needs to make a payment March 20th for their bonds and they don't have the money...at least that I know of.  The ECB made a pretty incredible "loan" yesterday to it's member banks to either help keep the market going higher, or as support in case Greece defaults (not likely) or the bond holders take a large hit from a haircut on the bonds (most likely).

Scenario #2 seems more likely as at least until it hits the major downsloping line of the past 10 years.  Then higher or lower.  My bet would be on higher at that point.  The markets are manipulated right now, and I don't see that changing any time soon.

Scenario #3 seems the most unlikely due to the fact that it could have already happened in November and the central banks intervened to make sure it didn't.  I don't know why they would stop now, but this scenario could happen if Greece officially defaults (based on the ISDA's determination...very unlikely) and the central banks decide to not intervene.  In that case, 2008 all over again.

So there you have it...my take on the next things to happen in the marketplace is #2...a drop of about 15-20% to erase the gains of 2012, then a steady climb back up to resistance.  What happens after that depends on what time of the year it is I think.

UPDATE - 10:30PM:

Just when you think things can't get any more bizarre...

http://www.bloomberg.com/news/2012-03-01/israel-to-begin-investing-reserves-in-u-s-equities-today-1-.html

So the Bank of Israel decides that keeping money in bonds and other currencies is not the best option.  It needs to get better returns (and more risk).  Let's prop up the US stock market.

Obviously this will have an effect on the prices above...maybe scenario #1 isn't so unlikely any more.

I also need to point out the fact that a central bank is now out in the open about investing in things other than traditional items like currencies, bonds and gold...we're now up to companies outright and stocks.  

Bye, bye free market!  It was nice knowing you.

Gas Prices

Before everybody starts believing all of the non-sense out there about why gas prices are so high, I thought I should put a post that even the most basic person can understand...

You'll see articles out there like these...

Refinery Closures...
http://finance.yahoo.com/news/angry-about-high-gas-prices--blame-shuttered-oil-refineries.html

Wall Street and Speculators
http://thehill.com/blogs/e2-wire/e2-wire/212137-pelosi-blames-wall-street-for-gas-price-spike

Middle East
http://www.wpxi.com/news/news/local/gas-prices-are-about-go-even-higher/nKPsJ/

Maybe all have some value if you want to look at things from any one of those angles...but really, that doesn't explain what I'm about to show you...

Here is the value of the Dollar.  Actually the Dollar vs. a basket of other currencies, but 58% the Euro...

In 2012, it's been down.  Around a 45 degree angle down.

So that means that the dollar is losing it's value, or it's being weaken, or inflated, or debased.  Whatever you want to call it vs other currencies.  As more money is created and the dollar gets weaker, it causes inflation.  Generally in everything.  Keep in mind, it was November 30th that the G6 coordinated an open swap line to prevent a continuation of that ugly chart I drew back in November.  Since then, near unlimited liquidity (money printing) around the world...

Now Gasoline...for March delivery.

Almost the complete opposite of the dollar...Dollar down due to inflation, Gas up.

So let's make sure this holds true for other things...

Yup...

But it's a world-wide liquidity injection...so we should see it in foreign items too...

US $ and Japanese Yen down....all others up.

Stock markets across the world.  All up, just like the Dow and S&P.  Some even more so, some less so, but all up.

Ok...Any Questions?

So when you read about Gas prices going up and you hear this or that...they're just stories, made up by someone who probably doesn't know anything trying to sell a story.  The real reason is the Global Bailout by the US dollar and the Japanese Yen it looks like.

Does Iran have a part to play in the future gas prices going up, absolutely.  Tensions about a war in Iran will do that to the global oil price, which as you see has gone up dramatically in the past week or so.  That will get us on our way to $5 gas this summer.  Fun times.

So don't look any where else but the Central Banks who nicely kept us from another recession in November and instead gave us high inflation, which as you can see, includes the price of gas, with everything else.