Saturday, May 9, 2015

Student Loan Growth Surging In 2015

Some excellent charts below from the Wall Street Journal updating the slow motion train wreck that is U.S. student loans. The average student will leave school with $35,000 in student loans in 2015.

Students will borrow a total of $68 billion this year alone, pushing the total student loan bill in America close to $1.4 trillion.

Common sense tells us borrowing money today must be paid back with reduced spending in the future. Any business involved in education or the tertiary income that streams from it (student housing, college town restaurants, etc.) are enjoying the short term boost to their bottom line. The country as a whole, however, will suffer in the long term as these student loans will reduce the younger generation's ability to spend, borrow and invest.

Tuesday, May 5, 2015

Carl Icahn Interview - Wall Street Week

I notice from time to time months will pass by and I haven't turned on CNBC or Bloomberg once. Listening to interviews on those networks, even if it is a high quality guest (extremely rare), is now frustrating for me at best. Due to time constraints guests usually do not have the opportunity to go into detail on their thoughts and you're left with a only headline.

I've found myself spending the time that was formally wasted on network news reading books, newsletters or watching/listening to more lengthy podcast/video interviews. As I've mentioned in the past, I try and divide my time equally between bullish and bearish views to make sure I'm hearing both sides of the argument in every asset class.

The interview below, with investing legend Carl Icahn this week on Wall Street Week, is one where he has the opportunity to speak and elaborate on his views. The first ten minutes is a discussion on his childhood. If you want to jump right into the meat of the financial markets you can begin at the 10 minute mark. 

Averaging S&P 500 Valuation Indicators: May 2015

Here is the May 2015 chart update of Doug Short's four major valuation metrics merged together for the S&P 500. Stocks are just slightly more dangerously priced today than they were at the peak in 1929, when they subsequently fell 90%.

For more see: U.S. Stocks Mania: Earnings, Valuation & Sentiment Review