The Wall Street Journal has a story about a Medical Student who now owes over $555,000 in student loan debt. Michelle Bisutti originally borrowed $250,000 to cover medical school, but her balance quickly ballooned as she deffered loan payments and defaulted during her residency.
While student loan debt of $500K is rare, balances of $100K+ are becoming more and more common.
This NY Times article makes a case that people who owe significantly more on their mortgage than their home is worth might be better off to walk away, even if they can afford the payments. The Wall Street Journal ran a similar article a few weeks ago.
The idea is that many people who bought homes with little or no down payment during the market’s peak could walk away and rent a similar home for a fraction of the price. The additional savings could significantly increase their financial well-being by sacrificing their credit.
John Courson, the president of the Mortgage Bankers Association disagrees and questions what kind of “message” homeowners who voluntarily walk away will send to family, kids, and friends. He correctly cites that foreclosures futher depress surrounding home prices.
I have often told my friends and colleagues that the I disagree with the idea of home ownership being the American Dream or a path to personal wealth. I have cited that even in the best markets, the actual rate of the return in too low. Home ownership also makes the workforce less mobile which causes other problems for our economy. Brett Arends of the Wall Street Journal agrees.
Story courtesy of Yahoo.
courtesy of SNL.
The popular social networking company did not give an official reason for the departure of its previous CFO, Gideon Yu, but the speculation is that it is looking for an executive with strong a strong background working in public companies. Essentially, they need a CFO to help them prepare to become a publically traded company. Facebook is looking for more capital to fund its growth and ever expanding technical cost.
Here is the full story via the WSJ.
The state of the American auto industry is in quite a mess. And while Americans are divided about if, how, or what our government should do to help revive it, Germans have an altogether different faith in their auto industry. In fact, they trust their automakers to act as banks, and gladly keep their savings with the auto companies.
Here is the full story at WSJ.
The International Accounting Standards Board, which is chaired by Sir David Tweedle, has come under scrutiny for bowing to political pressure from the European Union. The issue at hand is the method banks use to value their assets on the financial statements. Political interference in the accounting and financial sectors are nothing new in the US or abroad, but one of the key components of the IASB is supposed to be its ability to resist such political pressure.
Sir David, defended the boards decision even though his stated that it nearly led to his resignation. I am a big fan of the movement to International Accounting Standards, but I forsee such political pressure being a much larger issue then either the Securities Exchange Commission or the IASB has let on so far.
Here is the full story by Glenn Kessler courtesy of the Washington Post.