How to create a secure retirement plan
If you want to make your retirement nest egg into something that approximates a pension, it’s time to think about annuities.
Source: How to create a secure retirement plan
Archive for the ‘Uncategorized’ Category
Shocking Statistic: Over 40% Of Student Borrowers Don’t Make Payments
By Tyler Durden
Submitted by Mike “Mish” Shedlock of MishTalk
Department of Education Wonders “Why 40% of Student Borrowers Don’t Make Payments”; Blame Bush (Seriously)!
Over 40 percent of those in student loan programs have stopped making payments. Many borrowers have never made any payments.
The department of education (a useless body that I would eliminate in one second if given the chance), cannot figure out why this is happening.
“We obviously have not cracked that nut but we want to keep working on it,” said Ted Mitchell, the Education Department’s under secretary.
The Wall Street Journal reports More Than 40% of Student Borrowers Aren’t Making Payments.
More than 40% of Americans who borrowed from the government’s main student-loan program aren’t making payments or are behind on more than $200 billion owed, raising worries that millions of them may never repay.
While most have since left school and joined the workforce, 43% of the roughly 22 million Americans with federal student loans weren’t making payments as of Jan. 1, according to a quarterly snapshot of the Education Department’s $1.2 trillion student-loan portfolio.
About 1 in 6 borrowers, or 3.6 million, were in default on $56 billion in student debt, meaning they had gone at least a year without making a payment. Three million more owing roughly $66 billion were at least a month behind.
Meantime, another three million owing almost $110 billion were in “forbearance” or “deferment,” meaning they had received permission to temporarily halt payments due to a financial emergency, such as unemployment. The figures exclude borrowers still in school and those with government-guaranteed private loans.
Navient Corp. , which services student loans and offers payment plans tied to income, says it attempts to reach each borrower on average 230 to 300 times—through letters, emails, calls and text messages—in the year leading up to his or her default. Ninety percent of those borrowers, which include federal borrowers as well as those who hold private loans, never respond and more than half never make a single payment before they default, the company says.
Crisis Easy to Explain
Carlo Salerno, an economist who studies higher education and has consulted for the private student-lending industry, noted that the government imposes virtually no credit checks on borrowers, requires no cosigners and doesn’t screen people for their preparedness for college-level course work. “On what planet does a financing vehicle with those kinds of terms and those kinds of performance metrics make sense,” he said.
I could easily come up with numerous reasons off the top of my head.
- Being in the workforce and having a job are two different things.
- Having a job and making enough money to pay back hundreds of thousands of dollars is yet another thing.
- Some feel cheated by the system, as well they should.
- Many have figured out the consequences of default are small. The worst that can happen is wage garnishment. Should …read more
Source: Shocking Statistic: Over 40% Of Student Borrowers Don’t Make Payments
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Valeant Lenders Agree To Amend Credit Facility
By Tyler Durden
Three days ago, the latest catalyst to weigh down Valeant stock was news that the company’s lenders were pushing back on its demands to obtain a default waiver and to loosen restrictions on its negative debt covenants. It appears, however, that that issue has been resolved, and as the company reported moments ago in a press release on its website, VEX “has obtained the requisite lender approval for the amendment and waiver to its credit facility. The Company expects to close the amendment and waiver next week.“
According to the agreement, the deadline for filing the Valeant 10-K will be extended to May 31, 2016 and the deadline for filing its Form 10-Q for the quarter ended March 31, 2016 will be extended to July 31, 2016.
More importantly, in addition to these waivers, the amendment will also modify, among other things, the interest coverage maintenance covenant and certain financial definitions which provides additional cushion in its financial covenants.
What’s the trade off? Well, the rollup and the piggybank are gone: the company agrees to “restrict its ability to make certain acquisitions and other investments and to pay dividends and other restricted payments” until the financial statements are filed and the Company achieves certain leverage ratios.
And most importantly, “while these restrictions are in place, the Company will also be required to apply substantially all net asset sale proceeds to prepay its term loans.”
In other words, any asset proceeds will be used only to repay the bank debt.
For now, the stock likes the news and was up 6% in pre market trading.
Full press release:
Intends to File 10-K on or before April 29, 2016, as Previously Disclosed
Valeant Pharmaceuticals International, Inc. (NYSE: VRX and TSX: VRX) announced today that it has obtained the requisite lender approval for the amendment and waiver to its credit facility. The Company expects to close the amendment and waiver next week.
Pursuant to the approved waiver, the deadline for filing the Company’s Form 10-K will be extended to May 31, 2016 and the deadline for filing its Form 10-Q for the quarter ended March 31, 2016 will be extended to July 31, 2016. While the Company is working diligently to file its Form 10-K and Form 10-Q, these extensions provide relief under the credit facility in the event the Form 10-K is not filed by April 29, 2016 and the Form 10-Q is not filed by June 14, 2016. In addition to the extensions, the approved waiver also waives the cross-default to Valeant’s indentures that arose when the Form 10-K was not filed on March 15, 2016. The waiver and amendment were approved by lenders holding more than 50% of the Company’s loans in principal amount.
In addition to these waivers, the amendment will also modify, among other things, the interest coverage maintenance covenant and certain financial …read more
Source: Valeant Lenders Agree To Amend Credit Facility
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Big Players (Read: Governments) Make Markets Unsafe
Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.
Reportage in The Wall Street Journal on April 4th states that “A fund owned by China’s foreign-exchange regulator has been taking stakes in some of the country’s biggest banks, raising speculation that it may be a new member of the so-called ‘national team’ of investors the Chinese government unleashes to support its stock market.”
Statists and interventionists around the world (read: `those who embrace State Capitalism) think “Big Players,” as the academic literature has dubbed them, will protect us from economic storms. While there is a budding and serious academic literature on Big Players – aka Market Disrupters – the financial press virtually ignores the Disrupters’ potential to bury us. Indeed, instead of stabilizing markets, the Big Players disrupt them. They are the purveyors of instability. For those who wish to grapple with the technical literature, I recommend: Roger Koppl. Big Players and the Economic Theory of Expectations. New York: Palgrave Macmillan, 2002.
Big Players have three defining characteristics. Firstly, they are big — big enough to influence markets. Secondly, they are largely insensitive to the discipline of profits and losses, insulating them from competitive pressures. Thirdly, their freedom from a prescribed set of rules affords them a high degree of discretion.
With these characteristics, Big Players are hard to predict. In consequence, they can disrupt. They divert entrepreneurial attention away from the assessment of strictly economic market fundamentals, such as the present value of prospective cash flows. Instead, the focus shifts toward attempting to predict the actions of Big Players, which are inherently political and unpredictable. This reduces the reliability of expectations, replacing skill with luck.
The Big Players’ discretionary interventions render unreliable most market signals about fundamentals. They foster environments that are ripe for herding and bandwagon effects, as well as noise trading, which is subject to fads and fashions. This partially explains why investment groups are spending big bucks to create a thinking, learning, and trading computer — a search for a master algorithm. Never mind. Big Players heighten volatility and create bubbles. They are the disrupters of the universe.
Just who are the Disrupters? Most central banks possess all the characteristics of Big Players in spades. Since the advent and implementation of quantitative easing (QE), they have become bigger players, with the state money they produce making up a much greater portion of broad money (state, plus bank money) than before 2009. Not only have their balance sheets exploded, but the composition of some of their balance sheets has changed in surprising ways. Not so long ago, central bank assets were largely comprised of domestic and foreign government bonds. Well, now you can find corporate bonds on some central bank balance sheets. And that’s not all. Central banks use their discretion to purchase equities, too. Just take a look at the Swiss National Bank (SNB), one of the alleged paragons of conservative central banking. By late last year (Q3), …read more
Source: Big Players (Read: Governments) Make Markets Unsafe
FBI: We bought ‘a tool’ to hack terrorist’s iPhone
FBI Director James Comey said Wednesday that the government had purchased “a tool” from a private party in order to unlock the iPhone used by one of the San Bernardino shooters.
Source: FBI: We bought ‘a tool’ to hack terrorist’s iPhone
This Chinese tech giant is having a terrible week
ZTE shares plummeted by as much as 15% on Thursday as investors reacted to a management overhaul, disappointing financial results and a warning from the company that it could face charges in the U.S.
Source: This Chinese tech giant is having a terrible week
Redstone’s health decisions now in daughter’s hands
Sumner Redstone has put his daughter Shari in charge of his health care decisions, replacing Viacom CEO Philippe Dauman.
Source: Redstone’s health decisions now in daughter’s hands
Yahoo is in a ‘serious free fall’
Yahoo is showing potential buyers some shocking financial figures, according to Re/code’s Kara Swisher.
Source: Yahoo is in a ‘serious free fall’
Takata airbag blamed for a Texas driver’s death
A driver in Texas was killed in March when a Takata airbag inflator ruptured. That was the tenth fatality blamed on the exploding airbags.
Source: Takata airbag blamed for a Texas driver’s death
