Analysis: Is student loan, education bubble next?

First the dot.coms popped, then mortgages. Are student loans and higher education the next bubble, the latest investment craze inflating on borrowed money and misplaced faith it can never go bad?

Some experts have raised the possibility. Last summer, Moody's Analytics pronounced fears of an education spending bubble "not without merit." Last spring, investor and PayPal founder Peter Thiel called attention to his claims of an education bubble by awarding two dozen young entrepreneurs $100,000 each NOT to attend college.

Recent weeks have seen another spate of "bubble" headlines — student loan defaults up, tuition rising another 8.3 percent this year and finally, out Thursday, a new report estimating that average student debt for borrowers from the college class of 2010 has passed $25,000. And all that on top of a multi-year slump in the job-market for new college graduates.

So do those who warn of a bubble have a case?

The hard part, of course, is that a bubble is never apparent until it bursts. But the short answer is this: There are worrisome trends. A degree is an asset whose value can change over time. Borrowing to pay for it is risky, and borrowing is way up. The stakes are high. You can usually walk away from a house. Not so a student loan, which can't even be discharged in bankruptcy.

But there are also important differences between a potential "student loan bubble" and an "education bubble." Furthermore, many economists think the whole concept of a bubble is a misleading way to think about what's happening, and may actually distract from the real problems. College affordability is a serious issue, but it's a different one. Borrowing for college and borrowing for, say, a house, are fundamentally different in important ways.
To be sure, there are some classic bubble warning signs:
—Everybody wants in. The idea that higher education is the only way to get ahead has become widely held. College enrollment has surged one-third in a decade. With rising demand, college tuition and fees have more than doubled over that time, outstripping inflation in every other major sector of the economy — energy, health care and housing, even when housing was bubbling itself.
—Those bills are paid with borrowed money. The volume of outstanding student loans is rising rapidly and now exceeds credit card debt, though recent reports of it crossing $1 trillion may be premature. Moody's Analytics puts the number at around $750 billion. But while credit card debt is declining, student loan debt keeps going up.
—Just like housing, many student loans were made with little or no research into whether borrowers were fit. Federal Stafford loans are basically automatic for college students, and government backing for other types of loans gave other student lenders little reason to be picky.
—Defaults on federal student loans jumped from 7 percent to 8.8 percent in the most recent fiscal year. That measures just recent borrowers who were already behind within two years of their first payments coming due.
Those numbers are all alarming. But putting them in context requires thinking separately about the ideas of a "student loan bubble" and an "education bubble."
First, one thing that's important about the possible student loan bubble is that it poses much less of a threat than housing debt did to drag down the entire economy. Yes, many individual borrowers may find themselves in trouble. But total student loans probably amount to less than 10 percent of outstanding mortgages. Every single student loan could default and it still probably wouldn't match total mortgage defaults during the recent downturn. More importantly, unlike mortgages, Wall Street isn't knee-deep in securities comprised of bundled student loans, as it was with mortgages. (It also helps that it's also harder to speculate in student loans; an investor can flip a house, but not a brain.)
The other big difference with student loans is the dominant role the federal government has assumed in the market in the last few years: it accounts for roughly 85 percent of student debt.
That matters for several reasons.
First, the government is answerable to voters and not shareholders, so it's more likely than private investors to take steps such as those announced by President Barack Obama to try to relieve student debt burdens.
Second, notes Mark Kantrowitz of the website Finaid.org, it's important to remember what actually causes a bubble to burst. It's not simply a run-up in prices. What bursts the bubble is a liquidity crisis, when borrowers suddenly can't get the money they need. Even during the depths of the 2008 financial crisis, when private student loans dried up, the government's dominant role kept student loans flowing.
That doesn't guarantee the bubble won't slowly and painfully deflate over time. But it insures against the chaos of a "crash" where suddenly students can't get loans at all — a scenario that could shut down untold numbers of colleges whose students rely on financial aid.
None of that, however, changes the fundamental risk for individual student borrowers: they could borrow heavily to pay for a college education and find the return much less than expected.
It's here, looking at the debate from an individual borrower's point of view as opposed to the entire economy, that the debate over the term "bubble" gets tricky. Can an education lose value?

Certainly a college degree can.

A key measure is the wage premium for bachelor's degree recipients over those with just high school diploma, and there are various ways to measure it. All show the wage premium is substantial, though after rising steadily for years it appears to have slipped some lately. Wages for the median bachelor's degree recipient are roughly $55,292, compared to $34,813 for those with only high school, according to the latest data from Georgetown University's Center on Education and the Workforce.
That reflects a premium that has fallen from roughly 67 percent a few years ago to 59 percent (the latest Bureau of Labor Statistics data put the 2010 premium at 65 percent for weekly wages). Still, all told, estimates for the lifetime earnings advantage of a college degree range from a conservative $500,000 to more than $1 million, according to the Census Bureau. Even with recent price increases, for the average student loan borrower that remains a very high return on investment.
It's true the unemployment rate for new college graduates is more than 10 percent. But unemployment for college graduates overall is 4.2 percent, compared to 9.7 percent for those with a high school degree.
Could college prices rise so much, and the premium fall so far, that a degree is no longer worth it? Of course, for some degrees. But in a modern economy, it's difficult to imagine that happening across the board. Here's where a degree is truly unlike other assets — most should correlate at least somewhat with skills that are useful in the world. Particular degrees may prove bad bets, but to imagine the premium on education itself dropping off a cliff is to imagine a world where things have gone so wrong that job skills no longer matter.
Or, as Kent Smetters, an economist at the University of Pennsylvania's Wharton School, puts it: "In that case, nobody's worried about paying back their loans. Everyone's heading for bunkers in Idaho and canned goods and that kind of stuff."
Here's the rub: Nobody earns a generic "college degree." Degrees are earned from different schools, with different reputations, and in different majors with much different payoffs. What counts most, says Georgetown's Anthony Carnevale, are the courses you take and your major. Roughly 30 percent of associate's degree recipients earn more than people with bachelor's degrees. A graduate with a mere certificate in engineering will earn roughly 20 percent more than the average bachelor's recipient.
That suggests there isn't one big bubble, but many smaller but significant ones stretching across different sectors — certain liberal arts grads, artists, lawyers who borrow six figures for law school and can't find a job, and students at for-profit colleges. The signs of a bubble at for-profits are unmistakable: Enrollment has tripled in a decade, roughly 96 percent of graduates have loans and borrowing is substantially higher than at other types of institutions. Default rates recently jumped to 15 percent.

But what's most important is the huge numbers who never earn a degree at all. At community colleges and for-profit schools, roughly one in five aiming for a bachelor's degree fail to secure it. Even at four-year public universities, the failure rate within six years is almost half. Anyone who borrows a large amount of money and then fails to complete a degree is in a world of hurt — quite possibly worse off than if they'd never even tried to go to college in the first place.

Retired general sweeps to power in Guatemala election

GUATEMALA CITY (Reuters) - A retired right-wing general promising a crackdown on violent crime won Guatemala's presidential election on Sunday and will be the first military man to take power since democracy was restored in 1986.

Otto Perez had 54.5 percent support with results in from 96 percent of polling stations while his rival, wealthy businessman Manuel Baldizon, trailed with 45.5 percent.

Guatemala's electoral tribunal declared Perez the winner late on Sunday, and his supporters began celebrating.

It was a clear move to the right for Central America's largest economy and came after leftist President Alvaro Colom failed to contain violent crime or protect the country from Mexican drug cartels using it as a key smuggling route.

Perez, 60, won the run-off election after promising that he would apply a "firm hand" by deploying troops on the streets and increasing the size of the police force.
Guatemala's murder rate is about eight times that of the United States and many of the country's 14.7 million people want a tougher stance on crime.
"There's even extortion in the schools," said housewife Elsa Guzman, 59. "I trust the army more. The army is not afraid to go out at night, but the police don't even go out at night ... that's why we want a military man."

Human rights groups fear Perez's crime-fighting message may have a dark side in a country with a history of military dictatorships and extra-judicial killings by security forces.

The army murdered suspected leftists and committed many massacres of peasants during the 1960-1996 civil war, in which about a quarter million people were killed or disappeared.
Perez was a commander in some of the most violent areas and there have been allegations that troops under his command committed abuses. He also headed the military intelligence unit accused of engineering assassinations of political rivals.
But he was also seen as a progressive officer inside the army and had a key role in supporting the 1996 peace accords which ended the war.
Perez has never been charged with human rights crimes and brushes off the accusations against him. "I can tell you, it's totally false," he told Reuters on Saturday.
The election campaign focused mainly on Guatemala's battle against street gangs and Mexican drug traffickers moving South American cocaine up through the country to the United States. Military experts say cartels and gangs control around 40 percent of Guatemala, a huge challenge for the next president.
Perez wants to hire 10,000 new police and 2,500 more soldiers to tackle crime, a model similar to that used in Mexico to combat the cartels.
But the policy has different implications in Guatemala, where a United Nations-backed "Truth Commission" found that 93 percent of civil war atrocities were committed by the state.
Even since the war ended, police have been suspected of executing young street gang members.
HUMAN RIGHTS TRIALS
Guatemala has begun to prosecute military officers implicated in the worse civil war abuses although Perez's victory will fan fears that they may escape justice.
Analysts say a key test will be whether Perez retains crusading Attorney General Claudia Paz y Paz, who has pushed ahead with human rights trials.
"That's the big question. If she's able to keep her job, will they allow her to do her job?" said Adriana Beltran at the Washington Office on Latin America think tank in Washington.
Perez has said that if Paz y Paz is doing her work well, there is no reason to end her four-year term prematurely.
The new president, who takes office in January, must also address severe poverty affecting more than half the population of the coffee- and sugar-exporting nation, which has one of the world's highest rates of chronic child malnutrition.
However, it is unclear where funds for extra spending on social assistance of security would come from.
Guatemala has one of the lowest tax takes in Latin America, at around 11 percent of gross domestic product, and a fiscal deficit above 3 percent of GDP.

Perez says he will boost tax collection to 14 percent of GDP in the next four years by targeting tax evasion. He has ruled out creating new taxes.

Markets give up hopes for lasting euro zone solution

NEW YORK (Reuters) - After another week of confusion and turmoil in Europe, investors are ditching whatever hopes they once had for a conclusive solution to the debt crisis.

That may foreshadow a gloomy holiday season in markets, especially if wary investors opt to reduce risk in their portfolios and take refuge in U.S. Treasuries and the dollar.

Just weeks after it seemed leaders had drafted a master plan to solve the crisis, doubts rose about whether Greece would back a 130 billion-euro bailout.

Disaster may have been averted when Greece, under fierce EU pressure, agreed over the weekend to form a new government that would approve the deal and stave off bankruptcy.

But that did little to calm investors, who were already looking ahead to the next problem: Italy. Italian bond yields hit a euro-era high of 6.4 percent Friday, raising fears the country may soon need a Greece-style emergency bailout.

The Greek agreement "may spark a brief relief rally," said Alan Ruskin, head of global G10 currency strategy at Deutsche Bank. "But it won't last and we will soon go back to focusing on Italy."

"At the end of the day, it does seem like a grand plan is elusive at best," said David Ader, head of government bond strategy at CRT Capital Group in Stamford, Connecticut.

"We've seen one European bank and one U.S. brokerage fail. We know there are strains for French banks. We're wondering how long it will be before Greek default worries spread to Italy and Spain," he said. "In a situation like that, money managers are going to decide to simply take their risk down."
FLIGHT TO SAFETY
Investors are betting the market will see evidence of that as soon as this week, as flight-to-safety flows help boost U.S. Treasury debt, lift the dollar against the euro and weigh on stock markets around the world.
The biggest fear is that a disorderly default in Greece or elsewhere would ripple across the global financial market the same way the Lehman Brothers collapse did in 2008. That, investors fear, would probably be enough to plunge the global economy into recession.
"This is going to be pretty negative news for risk markets," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "We are going to see a continued flight-to-quality tomorrow."
Benchmark U.S. 10-year note yields dropped more than 29 basis points in the past week and a half as worries about Europe overshadowed signs of economic improvement in America.
Ashraf Laidi, CEO of Intermarket Strategy in London, said he expected the euro to struggle again this week after losing nearly 3 percent against the dollar last week. By year end, he said it could fall below $1.30. It was around $1.38 Friday.
"This past week really raised some tricky questions," he said. "For the first time I can remember, the possibility that Greece really could leave the euro zone was being talked about in cafes and bars as well as on trading desks."
The weekend deal in Greece may stabilize things a bit in that it suggests Greece will keep the emergency funds flowing while making the tough spending cuts needed to get its fiscal house in order.
"What we had been afraid of was a stalemate. Now it seems the hard cuts will be made. I think equity markets will cheer this," said Michael Yoshikami, president and chief investment officer at YCMNET Advisors in Walnut Creek, California.
The cheering may not last long, though.
"These 24-hour risk-on rallies, I don't know how much longer people are going to be willing to do that," said Ader. "Sell-offs are getting deeper because the rallies are only short-covering moves. People are not getting long and putting on bets that everything is suddenly OK."
FROM GREECE TO ITALY
Deutsche Bank's Ruskin said the focus is likely to shift quickly from Greece to Italy in the weeks ahead, and that should mean more volatility and unwillingness to take on risk.
Italy's debt-to-output ratio stands at 120 percent, second only to Greece in the 17-country euro zone, and its borrowing costs are rising.
Prime Minister Silvio Berlusconi recently refused a loan offer by the International Monetary Fund and his government may be on the verge of collapse.
"Berlusconi says Italians are not feeling the crisis but that's because the European Central Bank has been providing high levels of liquidity at low interest rates and buying Italian bonds," Ruskin said. "That begs the question, should the ECB stop that to show them this is really a crisis?"

"I have to believe a lot of investors like me are thinking this could be the start of Italy week," said James Paulsen, chief investment strategist at Wells Capital Management in Minneapolis. "Italy is going to rapidly rise on investor radar screens and may be the bigger story."

Greece seals sketchy coalition deal

ATHENS (Reuters) - Greek Prime Minister George Papandreou sealed a deal with the opposition on a crisis coalition to approve an international bailout, but details remain thin despite an EU ultimatum for Athens to get serious about tackling its huge problems.

With Greece due to run out of money in a few weeks, the European Union told its bickering parties to explain by Monday evening how they would form a unity government to enact the 130 billion euro (£111.7 billion) emergency funding package.

Papandreou, who sealed his fate last week with a disastrous attempt to call a referendum on the bailout, will stand down when the new government takes over, the office of the Greek president said.

But otherwise he and conservative leader Antonis Samaras came up with the bare minimum to satisfy Brussels, and they must still agree on Monday who becomes the next prime minister to lead a nation which is destabilising the entire euro zone.

Papandreou's side trumpeted the agreement, reached late on Sunday at talks led by President Karolos Papoulias. "Today was a historic day for Greece," government spokesman Ilias Mossialos said, adding that the new coalition would be sworn in and hold a confidence vote within a week, if all went to plan.

Others were less charitable. "I'm afraid the new government will very soon turn out to be problematic," said Stefanos Manos, a former conservative finance minister.

A SUITABLE DATE
The new coalition has to win parliamentary approval for the bailout before calling early elections.
Papandreou's socialist PASOK party and the New Democracy party of Samaras agreed early on Monday that the most suitable date for the elections would be February 19 next year.
Brussels has piled pressure on Athens to approve the bailout, a last financial lifeline for Greece, fearing that its crisis will spill into much bigger euro zone economies such as Italy and Spain -- which would be far harder to rescue.

Papandreou and Samaras had been scrambling to reach a deal before finance ministers of euro countries meet in Brussels on Monday evening, to show that Greece is serious about taking steps needed to stave off bankruptcy.

Earlier, European Economic and Monetary Affairs Commissioner Olli Rehn told Reuters that finance ministers from countries that use the single currency would insist on hearing a plan for a unity government from their Greek colleague Evangelos Venizelos at Monday's Eurogroup meeting.
"We have called for a national unity government and remain persuaded that it is the convincing way of restoring confidence and meeting the commitments," he told Reuters. "We need a convincing report on this by Finance Minister Venizelos tomorrow in the Eurogroup."
Papandreou had sought the referendum to show that harsh cuts demanded in the bailout had public support, but the risk that a "no" vote could bring about a sudden bankruptcy caused mayhem in markets and unrest in the ruling party.
He soon ditched the idea and won a confidence vote in parliament, but only after promising to make way for the national unity coalition.
BACK SEAT DRIVING
The coalition deal is unlikely to calm Greek politics.
Whoever becomes prime minister will struggle to exert their authority as the party leaders run things behind the scenes, Manos told Reuters. "The civil service won't implement any decision and everyone will be waiting for the election."
Papandreou and Samaras -- who were once U.S. college room mates -- had to bury their deep differences and personal animosity, as Greece is deep in economic, political and social crisis, its future in the euro zone is in question, and their reputations among ordinary Greeks are at rock bottom.
"The two leaders had no other choice. If elections were held now, nobody would turn out to vote for them," said Elias Nikolakopoulos, political science professor at Athens University.
Many Greeks, who have suffered pay and pension cuts and massive job losses in the past two years, remained distrustful about politicians of all colours.
"Elections won't solve any of our problems now. These parties don't represent us anymore," said Michalis Skevofylakas, 47, a teacher.
Papandreou and Samaras are due to discuss on Monday morning who will be the new prime minister. Greek media tipped Lucas Papademos, a former deputy president of the European Central Bank, as a possible candidate.
President Papoulias, who led the talks that produced Sunday's deal, will summon the head of all leading parties for more negotiations at 1800 GMT on Monday.

Occupy protests inspires T-shirts, trademark bids

SAN FRANCISCO (AP) — The revolution will be trademarked and put on T-shirts if an increasing number of entrepreneurs succeed in their attempts to profit from the Occupy demonstrations.

A few T-shirts began to appear several days after the first protest began on Sept. 17 with a march through the streets of lower Manhattan.

Now, T-shirts, coffee mugs and other merchandise emblazoned with Occupy locations and slogans are being offered online and amid the camp sites that have sprung up in cities across the country. A number of merchandise vendors, clothing designers and others are making plans to market a wide-variety of goods for a wide-variety of reasons even as some protesters decry the business plans as directly counter to the demonstrations' goals.

In recent weeks, the U.S. Patent and Trademark Office has received a spate of applications from enterprising merchandisers, lawyer and others seeking to win exclusive commercial rights to such phrases as "We are the 99 percent," ''Occupy" and "Occupy DC 2012."

Organizers of the protest centered in Manhattan's Zuccotti Park went so far as to file for a trademark of "Occupy Wall Street" after several other applications connected to the demonstrations were filed with the U.S. Patent and Trademark Office.

Wylie Stecklow, a lawyer representing the protesters, said the Oct. 24 filing was done to prevent profiteering from a movement many say is a protest of corporate greed.
"I would like to ensure that this isn't coopted for commercial purposes," Stecklow said. "The trademark can be used for noncommercial purposes."
Stecklow's application was one of three filed with the U.S. PTO seeking to trademark either "Occupy Wall Street" or "Occupy Wall St."
Vince Ferraro, a small businessman based in Arizona, applied to trademark "Occupy Wall Street" a few hours after Stecklow. Ferraro declined to discuss his plans if he wins the trademark.
"If I prevail," he said, "I believe there are opportunities in commerce not directly related to the movement."

Both Stecklow and Ferraro were beat to the trademark office by a Long Island couple who filed for "Occupy Wall St." on Oct. 16. Robert and Diane Maresca paid $975 for the application, which said they intended to put the phrase on a wide-variety of products.

They couldn't be reached for comment. But on Thursday, the couple withdrew their application, leaving Stecklow's clients and Ferraro as the only two competing to own "Occupy Wall Street."
USPTO lawyer Cynthia Lynch said that when the trademark office is confronted with similar applications, it gives priority to the first application received. However, she said the trademark office also takes into consideration whether the phrase was in wide use before the first application was filed.
Stecklow, the attorney for the protesters, says he believed his clients will prevail because they've been using the phrase "Occupy Wall Street" for months before the first application was filed.
The USPTO's Lynch declined to discuss specific applications and said it takes about three months for the office to make an initial determination.
"This rush to trademark was entirely expected and predictable because this is what everybody does," said Ron Coleman, a trademark attorney and author of a popular trademark blog. "The irony is too rich."
Coleman predicted the New York protesters would prevail because they've been using the phrase the longest. Nonetheless, he questioned how the trademark could be managed by a group claiming to be leaderless.
"Who has authority to speak on behalf of the trademark," Coleman asked.
In the meantime, several businesses and merchandise vendors aren't waiting for the trademark office.
Ray Agrinzone, a clothing designer, launched theoccupystore.com earlier this month. The site offers t-shirts, hoodies and even gift certificates.

Agrinzone said he intends to donate 10 percent of profits to the Occupy Wall Street organizers. He said he has lost money so far, but still plans donate about $100 over the weekend. He said he will propose to organizers that a section of Zuccotti Park be turned into a merchandise zone for the benefit of the movement.

He said he has received hateful tweets and email from people opposed to his store and plans to profit from the Occupy demonstrations.

"There's nothing wrong with turning a profit," Agrinzone said. "I don't think that's what this is all about."
Further, he said that fashion can help with the movement's goals.

"There is no better way to spread the message of revolution than through clothes," Agrinzone said.

Big quake follows increase in Oklahoma rumblings

SPARKS, Okla. (AP) — Clouds of dust belched from the corners of almost every room in Joe Reneau's house as the biggest earthquake in Oklahoma history rocked the two-story building.

A roar that sounded like a jumbo jet filled the air, and Reneau's red-brick chimney collapsed and fell into the roof above the living room. By the time the shaking stopped, a pantry worth of food had been strewn across the kitchen and shards of glass and pottery covered the floor.

"It was like WHAM!" said Reneau, 75, gesturing with swipes of his arms. "I thought in my mind the house would stand, but then again, maybe not."

The magnitude 5.6 earthquake and its aftershocks still had residents rattled Sunday.

Two minor injuries were reported from Saturday's quakes by the Oklahoma Department of Emergency Management, which said neither person was hospitalized. And, aside from a buckled highway and the collapse of a tower on the St. Gregory's University administration building in Shawnee, no major damage was reported.

But the weekend earthquakes were among the strongest yet in a state that has seen a dramatic, unexplained increase in seismic activity.

Oklahoma typically had about 50 earthquakes a year until 2009. Then the number spiked, and 1,047 quakes shook the state last year, prompting researchers to install seismographs in the area. Still, most of the earthquakes have been small.
Saturday night's big one jolted Oklahoma State University's stadium shortly after the No. 3 Cowboys defeated No. 17 Kansas State. Fans were still leaving the game.
"That shook up the place, had a lot of people nervous," Oklahoma State wide receiver Justin Blackmon said.
The temblor sent Jesse Richards' wife running outside because she thought their home was going to collapse. The earthquake centered near their home in Sparks, 44 miles northeast of Oklahoma City, could be felt throughout the state and in Arkansas, Kansas, Missouri, northern Texas and some parts of Illinois and Wisconsin.
Richards estimated it lasted for as much as a minute. One of his wife's cookie jars fell on the floor and shattered, and pictures hanging in their living room were knocked askew.
"We've been here 18 years, and it's getting to be a regular occurrence," said Richards, 50. But, he added, "I hope I never get used to them."
Geologists now believe a magnitude 4.7 earthquake Saturday morning was a foreshock to the bigger one that followed that night. They recorded at least 10 aftershocks by midmorning Sunday and expected more. Two of the aftershocks, at 4 a.m. and 9 a.m., were big, magnitude 4.0.
"We will definitely continue to see aftershocks, as we've already seen aftershocks from this one," said Paul Earle, a seismologist with the U.S. Geological Survey in Golden, Colo. "We will see aftershocks in the days and weeks to come, possibly even months."
Brad Collins, the spokesman for St. Gregory's University in Shawnee, said one of the four towers on its "castle-looking" administration building collapsed in the big earthquake and the other three towers were damaged. He estimated the towers were about 25 feet tall.
"We definitely felt it," Collins said. "I was at home, getting ready for bed and it felt like the house was going to collapse. I tried to get back to my kids' room and it was tough to keep my balance, I could hardly walk."
Scientists are puzzled by the recent seismic activity. It appeared the latest quake occurred on the Wilzetta fault, but researchers may never know for sure. Earthquakes that hit east of the Rocky Mountains are harder to pinpoint because the fault systems are not as well studied as major faults like the San Andreas in California.

Arkansas also has seen a big increase in earthquake activity, which residents have blamed on injection wells. Natural gas companies engaged in hydraulic fracturing, or fracking, use fluid to break apart shale and rock to release natural gas. Injection wells then dispose of the fluid by injecting it back into the ground.

There are 181 injection wells in the Oklahoma county where most of the weekend earthquakes happened, said Matt Skinner, spokesman for the Oklahoma Corporation Commission, which oversees oil and gas production in the state and intrastate transportation pipelines.
But natural gas companies claim there is no proof of a connection between injection wells and earthquakes, and a study released earlier this year by an Oklahoma Geological Survey seismologist seems to back that up. It found most of the state's seismic activity didn't appear to be tied to the wells, although more investigation was needed.
"It's a real mystery," seismologist Austin Holland of the Oklahoma Geological Survey said of the recent shaking.
"At this point, there's no reason to think that the earthquakes would be caused by anything other than natural" shifts in the Earth's crust, Holland said.
Earle said he couldn't comment on the relationship between fracking, injection wells and earthquakes.
Most Oklahoma residents still see earthquakes as anomalies in a state more often damaged by tornadoes. Roger Baker, 52, laughed at the idea of buying earthquake insurance, although the weekend quakes left a 6-foot-long crack several inches deep his yard in Sparks.
"It's just a part of life," he said.

Prague resident Mark Treat, 52, was at the Dollar General store Sunday, buying paper towels in bulk, garbage bins and a broom and mop to begin cleaning up his home. He said the quake hit hard enough to knock dishes, lamps and a TV to the ground and overturn a chest of drawers.

"It busted up a lot of stuff," Treat said. "I can't believe is only was a 5.6."

Former boxing champ Frazier fighting liver cancer

Former world heavyweight champion Joe Frazier, who battled Muhammad Ali in a famed 1970s boxing trilogy, is fighting for his life with advanced liver cancer.

Frazier, 67, was the first man to defeat the legendary Ali, taking the undisputed heavyweight title with a unanimous 15-round decision over Ali in 1971 at Madison Square Garden in what was dubbed the "Fight of the Century".

Ali won a unanimous 12-round decision in a 1974 rematch and famously completed the trilogy with a victory in 1975 at the "Thrilla in Manila" by stopping Frazier after 14 rounds in their epic slugfest in the Philippines.

A year later "Smokin' Joe" lost for the fourth and final time in his career when George Foreman knocked him down twice before the fight was stopped in fifth round.

Frazier's illness was first reported by the New York Post, citing an unidentified source.
Frazier won the heavyweight title in 1970 by stopping Jimmy Ellis in the fifth round of their fight at Madison Square Garden. He defended the title four times before running into the bigger and stronger Foreman in their first fight in 1973.
Frazier began his career with 29 consecutive wins before suffering that first loss and his heavyweight title when he was knocked down six times in two rounds by Foreman in 1973 in Kingston, Jamaica.
He retired following the second Foreman fight in 1976 but returned for one more bout in 1981 at age 37.

In recent years, Frazier turned to singing forming a back-up group called the Knockouts.