Saturday, September 3, 2011


I don't normally focus on debt, other than I'm averse to it. Paid cash for my last couple of cars (late model pre-owned, tyvm) and my apartment. I do have a HELOC, at a quarter-point below Prime, that I use as a rainy day fund; I'm gradually paying off a storm a couple years back.

Many other bloggers have written knowledgeably and articulately about student loan debt, particularly law school debt. Sometimes apocalyptically. Sometimes bemoaning their own lot. Sometimes cursing the ABA and law schools. I didn't think I had anything to add, so I've stayed clear of it.

I recently saw this cheery article on real estate rentals. For the TL;DR folks, the author believes the real estate market is going to be in the crapper for 20 years, based on demographics, and that the likely solution will be rehabbing property to be rented. Admittedly, not much new insight, but here's the part that makes the student debt issue hit home.

"The group that's 25 to 29 ... they're deciding not to buy, or they're not as ready to buy or are less able to buy than previous cohorts were in that age group," she said.

The 30-34 age group is the most worrisome to her because those in this group are prime homebuying age -- and are the most likely to be underwater, Russell said. From 2004-10 the homeownership rate of householders in this group fell more than any other -- and it's still falling. In the second quarter, it slipped below 50 percent for only the second time since the (federal) data series began in the early 1990s, Russell said.

The big bogeyman for both of these prime homebuying groups, she said, is student debt.

"About 35 percent of people under 35 have student debt -- that's huge," she said. "I think the average debt load is about $23,000 among debtors. If you have student loans and a car loan, it's going to be hard to take on mortgage debt.

"And it's a number that's going up," she said. "You'd think there would be a turnaround" with people unable to afford to go to school in this economy.

"But people seem so frantic to get a college degree that it hasn't turned around yet," she said.

Rather than think about the people I know who are underwater, it's easier to enumerate the people who aren't underwater. The lucky souls who aren't are still stuck with their homes because there are either no qualified buyers or a surfeit of adjacent homes for sale. Sometimes, both. I know people ranging from roughly 30 to 82 who wish they could sell, but can't. In my own vicinity, the NYC metropolitan area, I believe foreigners will eventually take up the slack. Unfortunately, this won't do much for people in Indiana.

Hindsight is a beautiful thing; however, I don't think that when the gummint began handing out education loans like candy, that it also understood Johnny won't be able to buy Darla's starter home, and Darla in turn won't be able to able to buy Grandma's house to raise her growing family. As of September 2011, it's looking like a lost couple of decades for every age group.

Friday, September 2, 2011

August 2011 legal employmenTTT

Having published this table, there isn't much else that needs to be said. There is no growth in the U.S. legal industry. If anything, I'd guess that even if headcount remains static, the payroll is shrinking as associates are replaced with staff attorneys and temps. From the Wall Street Journal:
Meanwhile, unemployed lawyers now find themselves in the country's most cutthroat race for a job, with less than one opening for every 100 working attorneys.
The only good news of late is that the message is sinking in and law school applications are down considerably.

Not seasonally adjustedAugust20101,117,800
Seasonally adjustedAugust20101,113,800
Change from July 11-August 11100