Author Topic: 2015 & recent loan quality  (Read 40338 times)

Rob L

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Re: 2015 & recent loan quality
« Reply #120 on: May 30, 2017, 11:30:26 AM »
Dude.  Those scores should come with a pamphlet weighing 10 pounds that explains how the models have progressed over time and what they actually reflect, today.  It's like how the SAT used to be highly correlated with intelligence quotient scores - and now Junior gets 1000 points for bubbling in the letters of his name properly.  They're getting ready to fuck us, again, in July, when they stop counting civil suits / medical debt / who knows what else.  Anyone who thinks they have a good handle on any FICO algo should be quite careful in a month...

LOL at that journalist's line about 2005 being "the first year FICO tracked (average credit score) data", too.  Yeah, before, they'd just toss darts all day and say "my, we have data on 200 million US consumers... anybody ever done basic analytics?  Nah, you're right - lunchtime!"

 ::)

Yeah, but the article did have a very nice chart.  :)

rawraw

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Re: 2015 & recent loan quality
« Reply #121 on: May 30, 2017, 11:32:28 AM »
Ha I think nonattender is a watered down version of Core. Glad we have you around to question these things!

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Fred93

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Re: 2015 & recent loan quality
« Reply #122 on: May 30, 2017, 05:55:30 PM »
The article has a nice chart of the FICO of the riskiest borrower scores over time.

This hardly supports the notion that LC borrower performance has played a major part in the degradation of returns we've experienced over the past 18 months.

 ;D ;D ;D  Credit score inflation.

Here's another (opposite) opinion, using same exact chart...
http://www.zerohedge.com/news/2017-05-29/millions-americans-just-got-artificial-boost-their-credit-score
Contains link to related WSJ article.  There was also a recent FT.com article, but I'm having trouble finding it.

A credit score isn't a fixed absolute reference scale.  Its a number based on a formula.  The meaning of inputs change over time.  The formula changes over time. 

I'm not sayin' that one guy is "right" and the other "wrong".  I think its more complex than that.  There are almost always some numbers going up and some going down. 

There have been several articles recently explaining some upcoming changes to the formula which happen to be public.  Most changes are proprietary.)  Each article took the point of view that the changes were wonderful because many more people would qualify for a new home, etc!  That just means credit score inflation.

http://www.miamiherald.com/news/business/real-estate-news/article153370939.html
https://www.fool.com/credit-cards/2017/03/20/this-regulatory-change-means-a-credit-score-boost.aspx
http://www.iol.co.za/business-report/technology/credit-score-to-become-more-forgiving-in-us-8807629

The "US consumer" isn't a uniform set of folks, but a vast complex array of different pockets of situation and behavior.  Therefore, some average over the whole country doesn't match up with the set of people who borrow from LC, and matches even less with a particular credit grade.  Not my original idea ... Nonattender has been beating this idea into my head for the last two years.

You see degradation in sub-prime auto loans now.  Each of the companies in this business has reported bad earnings and bad forecasts.  Now this isn't exactly the set of folks who borrow from LC either, as their FICO scores fall below the LC cutoff, but I believe that the low grade LC borrowers have some behavior in common with this group.

I've long held stock in Nicholas Financial, so I noticed this...
http://www.tampabay.com/news/business/banking/clearwater-auto-lender-nicholas-financial-sees-shares-drop-in-wake-of/2324518

There are many articles about recent degradation in sub prime auto loan performance...
https://www.ft.com/content/bab49198-3f98-11e7-9d56-25f963e998b2
FT.com requires a subscription before you can view an article, UNLESS you come from google.  So to view this article, go to google and type in this...
    US car market sparks subprime fear site:ft.com
Google will find the article for you, and when you click on the link google found, you get to read the article.

There was also a recent FT article talking about how banks are pulling back from subprime auto, with quotes from folks at several big banks saying it was the prudent thing to do.  Clearly everybody feels it.  Not just the specialty lenders.

Rob L

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Re: 2015 & recent loan quality
« Reply #123 on: May 30, 2017, 06:30:10 PM »
Ha I think nonattender is a watered down version of Core. Glad we have you around to question these things!

I think that should be taken as a complement. The forum was a more interesting place when he was here and is a more interesting place because you are here.
« Last Edit: May 30, 2017, 06:36:26 PM by Rob L »

nonattender

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Re: 2015 & recent loan quality
« Reply #124 on: May 31, 2017, 01:35:59 PM »
Took it as such.

I'm available for weddings (but charge 10x rate if the officiant is going to use that "Does anyone here object?" line - and silence expected).

(I am up against bullshit like this all the time:  https://www.thecollegefix.com/post/32830/ ... my bullshit detector is well honed - but tired.)
« Last Edit: May 31, 2017, 03:13:15 PM by nonattender »
A little nonsense now and then is relished by the wisest men.

Rob L

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Re: 2015 & recent loan quality
« Reply #125 on: May 31, 2017, 04:11:25 PM »
Took it as such.

I'm available for weddings (but charge 10x rate if the officiant is going to use that "Does anyone here object?" line - and silence expected).

(I am up against bullshit like this all the time:  https://www.thecollegefix.com/post/32830/ ... my bullshit detector is well honed - but tired.)

The article at your link doesn't rise to he level of bullshit.

nonattender

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Re: 2015 & recent loan quality
« Reply #126 on: May 31, 2017, 05:12:14 PM »
The article at your link doesn't rise to he level of bullshit.

Your inherent subconscious quantum sexual bias caused you to drop the "t" in what you wrote, subtly implying that there is a higher, more masculine standard of bullshit, "he bullshit" - as opposed to "she bullshit" - which has been proven, in the 'intersectional quantum physics' lab tests that we do (boy emits photon, girl absorbs photon), to exist, at least statistically, time and time again --- please, just go ahead and apologize - and then resign.

Protests at 9.  (Girl who wrote that crap will be awarded doctorate tomorrow at noon and will be teaching someone's kid at a school near you soon.)
« Last Edit: May 31, 2017, 05:17:19 PM by nonattender »
A little nonsense now and then is relished by the wisest men.

Rob L

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Re: 2015 & recent loan quality
« Reply #127 on: May 31, 2017, 07:09:12 PM »
The article at your link doesn't rise to he level of bullshit.

Your inherent subconscious quantum sexual bias caused you to drop the "t" in what you wrote, subtly implying that there is a higher, more masculine standard of bullshit, "he bullshit" - as opposed to "she bullshit" - which has been proven, in the 'intersectional quantum physics' lab tests that we do (boy emits photon, girl absorbs photon), to exist, at least statistically, time and time again --- please, just go ahead and apologize - and then resign.

Protests at 9.  (Girl who wrote that crap will be awarded doctorate tomorrow at noon and will be teaching someone's kid at a school near you soon.)

Best laugh I've had in a month!
On the other hand, the missing "t" was both there and not there, like Schrödinger's, cat dead and alive.
I do not know if the cat was male or female, but in the quantum state it was both.
« Last Edit: May 31, 2017, 07:13:35 PM by Rob L »

nonattender

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Re: 2015 & recent loan quality
« Reply #128 on: May 31, 2017, 09:08:29 PM »
On the other hand, the missing "t" was both there and not there, like Schrödinger's, cat dead and alive.
I do not know if the cat was male or female, but in the quantum state it was both.

Her surmise goes further:  "both dog and cat".  (She's working her way up to an important "we are all one" insight, to get grants.)

"Categorical qualitative distinctions are just a tool of the capitalist Newtonian intellectual oppressors.  Please fund my research."

I wish her a long and happy career at a Starbucks far, far away.
A little nonsense now and then is relished by the wisest men.

nonattender

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Re: 2015 & recent loan quality
« Reply #129 on: June 01, 2017, 04:33:15 PM »
Back to business, now:

You see degradation in sub-prime auto loans now.  Each of the companies in this business has reported bad earnings and bad forecasts.  Now this isn't exactly the set of folks who borrow from LC either, as their FICO scores fall below the LC cutoff, but I believe that the low grade LC borrowers have some behavior in common with this group.

Matus Says Haircuts, Not Cars, Show U.S. Economic Health:

https://www.bloomberg.com/news/videos/2017-06-01/matus-haircuts-not-cars-show-u-s-economic-health-video

And, back to credit scores, Dems have higher scores but more debt, Republicans have lower scores but less debt:

http://www.marketwatch.com/story/the-diverging-economic-fortunes-of-democratic-and-republican-states-can-be-tracked-through-their-credit-scores-2017-05-20
« Last Edit: June 01, 2017, 06:32:18 PM by nonattender »
A little nonsense now and then is relished by the wisest men.

Rob L

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Re: 2015 & recent loan quality
« Reply #130 on: June 22, 2017, 03:29:28 PM »
Interesting chart:



It was taken from a screen shot of a video I watched, not FRED, so it may possibly be faked. Looks real to me.

Fred93

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Re: 2015 & recent loan quality
« Reply #131 on: June 22, 2017, 04:26:54 PM »
Yea, it looks real.  However, note that the delinquency curve is plotted in units of "percent change from last year".  This is a typical manipulation which one sees when the author works hard, pushing all the buttons, trying to make a curve that looks like something he wants.  It makes no sense in this case.  You can see that the recent values on the blue curve are all VERY CLOSE TO ZERO PERCENT CHANGE SINCE LAST YEAR, which is no change, which is not exactly a leading indicator of anything.

Rob L

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Re: 2015 & recent loan quality
« Reply #132 on: June 22, 2017, 04:52:43 PM »
Yea, it looks real.  However, note that the delinquency curve is plotted in units of "percent change from last year".  This is a typical manipulation which one sees when the author works hard, pushing all the buttons, trying to make a curve that looks like something he wants.  It makes no sense in this case.  You can see that the recent values on the blue curve are all VERY CLOSE TO ZERO PERCENT CHANGE SINCE LAST YEAR, which is no change, which is not exactly a leading indicator of anything.

Yeah, agreed; selling it. Might be a nice example for the "Calling BS" class.