Kevin Depew's daily Five Things You Need to Know to stay ahead of the pack on Wall Street:

1. Why You Can't Afford College Now

Sallie Mae (SLM), the largest student loan lender, surprised no one this morning by reporting its third consecutive quarterly loss. The shares are down more than 70% year-over-year. But the reason this is important news worth noting on Main Street is because it goes directly to how affordable college is for families across the country.

Here is the problem in a nutshell: the company can't make money loaning students money for college. This is the Main Street effect of the debt crisis.  SLM's access to funding is limited. As SLM CEO Al "Let's Get the F%$k Outta Here" Lord said on the company's call this morning, "our loan demand right now from our customers is running about 3 billion dollars a month and we've really only been able to access about a billion dollars a month, and that access has been at record costs."

Bottom Line: the cost of college is increasing both in tuition terms and in loan terms; a double whammy for Main Street.


2. Philadelphia Story Not a Good One

Good news? Not out of Philly. The Federal Reserve Bank of Philadelphia this morning said its general economic index fell to -24.9 from -17.4 in March, the lowest level since 2001. Economists, according to Bloomberg, had predicted a rise in the index to -15.

A reading less than zero is indicative of economic contraction. For all of last year the reading averaged 5.1.

The index has remained negative for five consecutive months now.


3.  Why Should We Care?

What is this index? What does it mean and why should we care?

First, a note on how the index is constructed. Just because a piece of economic news has a number attached to it (in this case the index's reading was reported as -17.4) doesn't mean it's based on anything that is tangibly countable. The Philadelphia Fed Index is anecdotal in the sense that it is compiled from a survey of participants who voluntarily answer a series of questions about the quality of business. It is also focused on the manufacturing sector, which has far less economic impact today than it did even a decade ago.

So why do we watch it? Three things.

1) It gives a general summary of manufacturing sentiment that could potentially spill over into broader business sentiment.
2) It provides anecdotal evidence of pipeline pricing pressure for raw materials.
3) Sometimes the "special questions" section is interesting.

Related to number three, above, take this month's survey for example. There were two special questions:

1. How would you characterize the current demand for your product(s)
compared to what was expected at the beginning of the year?

2. To what extent have you changed your plans for capital spending since January?

In responses to question 1, 29% said "greater than expected," while 38.4% said "less than expected."  Responses to question 2 indicated that 18.6% planned to increase capital spending, while 26.8% plan to decrease capital spending. Food for thought.


4. US Airsurchargeways

When will these airlines finally go out of business so the government can formally take them over as one big nationalized transportation system... to go along with the nationalized mortgage market, banking market and secondary education system?  Perhaps even sooner than we think.

Today we saw where US Airways Group (LCC) said it will begin charging customers $5 to reserve aisle or window seats in the first several rows of the coach cabin, effective May 7. This new fee follows US Airways' recently announced surcharge of $25 for a second bag for flights. The new surcharges are, naturally, being blamed on higher fuel costs.

To learn more, Minyanville price checked a sample US Air ticket to see just what kind of fees might be hidden in these airline tickets. 

Sample US Air Ticket



5. Five-Year-Olds: What Will They Think of Next?!

America is nothing if not a land of opportunity, ingenuity and entrepreneurship. Sure, the road to business success in America will eventually lead to nationalization, but the journey from Pioneer Zephyr to Amtrak is a long one, and all long journeys begin with the germ of an idea.

Sometimes, as in the story we are about to tell, that germ emanates from a five-year-old. And sometimes that five-year-old doesn't live in America at all, which, admittedly, makes our lead-in paragraph now seem rather awkward and forced but doesn't really change the very important point we are trying to make. And that point is... actually, it does change the point, but never mind that now. Instead, behold Sam Houghton of Britain who at five is thought to be the youngest to patent an idea in that country according to the BBC. 

Houghton was reportedly just three years old when, seeing his father sweeping up and changing out a large broom for leaves and a small broom for finer particles, hatched the idea for a double-headed broom.  The boy's father, a patent lawyer, was so impressed with the idea he helped Sam apply for a patent; truly an amazing story of ingenuity and entrepreneurship mixed with a desire to sweep.

As you might expect, Minyanville has learned that while Houghton may be the first five-year-old to land a patent, he's not the first to apply for one. Below, Minyanville looks at some other patent applications by five-year-olds that didn't quite reach approval.

Other Patent Applications by Five-Year-Olds

Patent applicant: Timmy Higgins, 5, Wooster, MA
Idea: Chocolate Mail
Function: It is mail that is made of chocolate.
Applicant's note: "How come the mailman can't just give chocolate mail to everyone. Then we could eat it. Yum!"

Patent applicant: Cindy Switzer, 5, Springfield, KY
Idea: Cotton Candy Pillow
Function: A pillow that is soft like cotton candy that you can sleep on and eat.
Applicant's note: "I had a bad dream about monsters. Mommy gave me a milk but what I really wanted was a cotton candy pillow."

Patent applicant: Jordan Rush, 5, Milwaukee, WI
Idea: Poop-Fueled Rocket Ship with Godzilla Head Laser Eyes
Function: A rocket ship with a Godzilla head and laser eyes that runs on poop.
Applicant's note: "Daddy said gas is expensive, but poop is free. We could use it to stop pollution."

Patent applicant: Shelby Warner, 5, Denver, CO
Idea: Robot Shoe
Function: It is a shoe that is really a robot that can run real fast and tie itself and dance and not smell ever.
Applicant's note: "Why do shoes smell like feet? Because they are always on them and not robots that do not smell and can dance real good like Allison."

Patent applicant: Warren Fells, 5, San Diego, CA
Idea: Tooth Fairy Trapper Wallet
Function: It is a trap that catches the tooth fairy and gets her in your wallet so you have more money.
Applicant's note: "I don't want to be a toothless zillionaire when I grow up because then I will have to only eat soup. But how else to get the tooth fairy's money?"