Another bubble is about to pop

In this case we are talking about another subject we have bandied about here at Right Thinking, the student loan bubble, which president Obama just recently pretended to want to fix. From the article:

The largest bank in the United States will stop making student loans in a few weeks. JPMorgan Chase has sent a memorandum to colleges notifying them that the bank will stop making new student loans in October, according to Reuters. The official reason is quite bland. “We just don’t see this as a market that we can significantly grow,” Thasunda Duckett tells Reuters. Duckett is the chief executive for auto and student loans at Chase, which means she’s basically delivering the news that a large part of her business is getting closed down.

The move is eerily reminiscent of the subprime shutdown that happened in 2007. Each time a bank shuttered its subprime unit, the news was presented in much the same way that JPMorgan is spinning the end of its student lending. “It’s no longer sustainable and not the right place to allocate capital in the future,” HSBC Holdings Group Chief Executive Michael Geoghegan said in a statement the day HSBC shut down its subprime unit in 2007.

Oh shiz. This is going to screw a lot of people over. I am worried that as someone that did the right things I will still be the one tapped to pay for those that didn’t do the right things. That’s what Washington D.C. has become: the place where you can make others pay for your mistakes, after you humiliate them for not wanting to do just that.

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  1. Miguelito

    Oh I’m sure saint 0bama will attempt to ride in on his white horse and save the day with some sort of bailout. Those of us that planned ahead and lived within our means will, again, be expected to pay for the stupidity of others.

    I’m hoping (against hope) that this time, the rest of us will stand up and say, “Hell no!”

    Same with any attempt to bail out Detroit, or California when that eventually comes along.

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  2. AlexInCT *

    Oh I’m sure saint 0bama will attempt to ride in on his white horse and save the day with some sort of bailout.

    Watch them blame Boosh or republicans when they do that too. Then Dodd & Frank will come out of retirement to write the new legal framework around education lending, making it worse and the next collapse even bigger.

    I’m hoping (against hope) that this time, the rest of us will stand up and say, “Hell no!”

    How well has this worked for us? Besides, they are doing it for our own good, so like the battered wife, they will tell us that right after they bitchslap us.

    Same with any attempt to bail out Detroit, or California when that eventually comes along.

    The way Detroit and Cali are acting you are correct to use the word “when”.

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  3. AlexInCT *

    They’ll see this as a need for more government student loans. Just like they saw the need to push for more housing loans.

    You like to kick a guy when he’s down, don’t ya? Wishful thinking on my part that they would this time get it and do the right thing I guess.

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