KeNo's Housing and Economic Portal: Monday May 11 Housing and Economic stories

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America’s Student Debt Pain Threatening a Corner of Bond Market - (www.bloomberg.com) America’s mounting student-debt problem is threatening to create trouble in part of a $170 billion bond market tied to government-guaranteed loans. With borrowers increasingly struggling to repay their student loans, Moody’s Investors Service is warning it may take investors longer than promised to get their money back. The credit grader said this month it may lower rankings on $3 billion of top-rated debt as investors face the threat of slowing principal payments or even receiving no interest. The concern underscores the fallout from a record $1.2 trillion in U.S. student loans that’s spreading to everything from the housing market and consumer spending to taxpayers. As a sluggish economic recovery forces borrowers to miss payments or tap relief programs, only 37 percent are current and reducing their balances, according to a Federal Reserve Bank of New York presentation this month.

Austria Has Its Own Little Greece to Deal With - (www.bloomberg.com) Rather than Greece, this is Carinthia, the Austrian province of 556,000 people bordering Italy and Slovenia. The region is resuming talks on Thursday about a 343 million-euro ($375 million) emergency loan from the Treasury to avoid running out of money for salaries and payments due in four weeks. “Nobody wants to leave Carinthia in the lurch,” Austrian Finance Minister Hans Joerg Schelling said on Tuesday. “But Carinthia should slowly realize how severe the situation is. I won’t let Carinthian politicians put the blame for this disaster on the federal government.” Like Greece, whose government remains locked in talks with its euro area counterparts on avoiding a default, the money the Austrian region is seeking is only a temporary lifeline and a prelude to a bigger cash crunch down the road.

Corinthian Students Face Difficult Choices After Shutdown - (abcnews.go.com) Students lining up at now-closed Corinthian Colleges are being told that if their credits are transferred to another school, they won't qualify to have their loans discharged. That puts many in a difficult situation: If they find a college willing to accept their credits, they may still have to redo many of the classes and continue to be saddled with debt. Students who gathered Tuesday at Corinthian subsidiary Everest College in Industry, California, were greeted by other for-profit schools that offered to look at their coursework. But several students say they've lost faith in for-profit trade schools that have come under scrutiny for misleading advertising on job placement after graduation. Corinthian Colleges announced Sunday it was shutting down its remaining 28 ground campuses, displacing about 16,000 students.

Death Of The Middle Class: Homeownership Rate Drops To 29 Year Low As Average Rent Hits Record High - (www.zerohedge.com) Overnight Gallup released its latest survey which confirmed just how dead the American Dream has become for tens if not hundreds of millions of Americans. According to the poll, the number of Americans who do not currently own a home and say they do not think they will buy a home in "the foreseeable future," has risen by one third to 41%, vs. "only" 31% two years ago. Non-homeowners' expectations of buying a house in the next year or five years have stayed essentially the same, suggesting little change in the short-term housing market. As Gallup wryly puts it, "what may have been a longer-term goal for many may now not be a goal at all, and this could have an effect on the longer-term housing market."

Baltimore Councilman Loses It, Says “Just call them N******” After CNN Host Calls Rioters “Thugs” - (www.infowars.com) A city councilman in Baltimore dropped the N word on live TV after becoming irate that a CNN host argued that labeling violent rioters and looters “thugs” was a correct use of language. An angry Carl Stokes said that CNN’s Erin Burnett should “just call them n*ggers. Just call them n*ggers,” when she attempted to explain that the word “thug” was a justified description. “No, it’s not the right word to call our children ‘thugs,’” Stokes said, when Burnett brought up the point.. “These are children who have been set aside, marginalized, who have not been engaged by us.” “But how does that justify what they did?” Burnett argued. “That’s a sense of right and wrong. They know it’s wrong to steal and burn down a CVS and an old persons’ home. I mean, come on.” “No, we don’t have to call them by names such as that. We don’t have to do that. That is exactly what we’ve sent them to. When you say, ‘Come on,’ come on what? You wouldn’t call your child a thug if they should do something that would not be what you expect them to do.”

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