Lend Academy Network Forum

Lending Club Discussion => Investors - LC => Topic started by: Unfolder on February 12, 2015, 12:34:32 PM

Title: LC is the Next Internet Bubble
Post by: Unfolder on February 12, 2015, 12:34:32 PM
http://www.thestreet.com/story/13040401/1/amazon-twitter-uber-lending-club-and-the-next-internet-bubble.html?puc=TSMKTWATCH&cm_ven=TSMKTWATCH

Bubblicious!
Title: Re: LC is the Next Internet Bubble
Post by: RazzleDazzle on February 12, 2015, 01:09:22 PM
Unfolder, you really have a knack for finding such articles
Title: Re: LC is the Next Internet Bubble
Post by: AnilG on February 12, 2015, 01:53:25 PM
Really good article and concerns about Lending Club along with other hype cycle darlings. I believe a few others on the board has expressed similar sentiments. It is given that default rates will shoot up and the lenders will take all of the brunt. How many lenders will still be continuing to lend in that environment?

Quote
Lending Club is another one -- an online loan broker now valued at about $7.95 billion. Lending Club is supposedly exploiting a new community model of lending, providing borrowers and lenders a new direct, community-based market place. But Lending Club is brokering unsecured, consumer loans. Has anyone thought what might happen to unsecured loans in the next recession? Well you can be pretty sure default rates will shoot up and lenders will be stung -- then said lenders will just stop making these consumer loans. So the likelihood is that sooner or later, Lending Club's volumes will actually decrease, not rise. And yet it is only massive future rises in Lending Club's volumes that can justify the current stock price.

http://www.thestreet.com/story/13040401/1/amazon-twitter-uber-lending-club-and-the-next-internet-bubble.html?puc=TSMKTWATCH&cm_ven=TSMKTWATCH

Bubblicious!
Title: Re: LC is the Next Internet Bubble
Post by: MathGuy on February 12, 2015, 02:06:01 PM
This article is nonsense!  LC performed well during the real estate meltdown.  Their underwriting is better now.   They reject the vast majority of applicants (unlike the banks that gave you a loan at the height of the bubble if you had a pulse ...)
Their model has very low risk since they are not holding loans on their books and make most of their fees on origination fees.
LC is changing the way people borrow the same way as companies like apple changed the way people purchase music
that's the future!

Nothing is guaranteed but the upside potential vs the risk is very favorable.  JMHO

 Added another 100  shares on the down trend that is probably due to this article...
Title: Re: LC is the Next Internet Bubble
Post by: standby on February 12, 2015, 02:52:39 PM
Agree with you MG.  It's the future.  I personally think the banks are too top heavy now anyway.  It seems they are already going after LC while ignoring the elephant in the room.
Title: Re: LC is the Next Internet Bubble
Post by: rawraw on February 12, 2015, 05:13:53 PM
This article is nonsense!  LC performed well during the real estate meltdown.  Their underwriting is better now.   They reject the vast majority of applicants (unlike the banks that gave you a loan at the height of the bubble if you had a pulse ...)
Their model has very low risk since they are not holding loans on their books and make most of their fees on origination fees.
LC is changing the way people borrow the same way as companies like apple changed the way people purchase music
that's the future!

Nothing is guaranteed but the upside potential vs the risk is very favorable.  JMHO

 Added another 100  shares on the down trend that is probably due to this article...
How is their underwriting better?  They've loosened standards on the prime platform and have subprime, business loans, etc which you have next to no data about.  I wouldn't go short LC as I think they'll grow, but I posted this in another thread:

I was just surprised I saw something so negative so shocking.  Interestingly enough, I was speaking with a guy who recently met with some buy side firms on Wall Street.  He asked them who their #1 short was and they replied LendingClub.  Seems this sector is gaining a skeptical glance
Title: Re: LC is the Next Internet Bubble
Post by: Unfolder on February 12, 2015, 05:48:34 PM
I was just surprised I saw something so negative so shocking.  Interestingly enough, I was speaking with a guy who recently met with some buy side firms on Wall Street.  He asked them who their #1 short was and they replied LendingClub.  Seems this sector is gaining a skeptical glance

Ah, I love it, LC, a potentially revolutionary financial company, the AMZN of loans, gets burnt at the stake, while SHAK, which sells overpriced greasy burgers, is valued at $25 million per store. Capitalism.

Title: Re: LC is the Next Internet Bubble
Post by: bobeubanks on February 12, 2015, 06:09:03 PM
SHAK, which sells overpriced greasy burgers, is valued at $25 million per store. Capitalism.

Actually, just over $7M per location. What a bargain. ;)
Title: Re: LC is the Next Internet Bubble
Post by: rawraw on February 12, 2015, 06:18:29 PM
What are the sales per location?  That's more important
Title: Re: LC is the Next Internet Bubble
Post by: bobeubanks on February 12, 2015, 06:21:54 PM
Forward P/E for SHAK is 580.
Title: Re: LC is the Next Internet Bubble
Post by: Unfolder on February 12, 2015, 06:31:52 PM
580. Good, good, clearly SHAK is the future, ground beef, between two (that's two) sesame buns. The R&D barriers to entry are staggering. Bid it to the moon, and to the trash with bloated pig LC *snorts cocaine*
Title: Re: LC is the Next Internet Bubble
Post by: LendingAlpha.com on February 12, 2015, 07:41:50 PM
Credit card default rates were 3.2x higher from peak through trough, and it was only for a temporary period. If the weighted default rate is 4.29% and the average rate being 11.38%, then the worst performance given another 2008-like financial crisis would yield -2.3% during peak charge-off periods. Relatively speaking, that's not bad given that -2.3% would have probably been the best performing fixed income asset class during that time period. Also, portfolios that actively avoid certain risks (example: purposes such as small business and home improvement, or higher income) would probably not see a negative year.

Historical Credit Card composite default rates
(https://lendingalpha.com/wp-content/uploads/Historical-CC-Default-Rates.png)

Lending Alpha's Balanced Strategy expected to remain positive at 3.2x default environments
(https://lendingalpha.com/wp-content/uploads/Default-Rate-Sensitivity-Balanced-Strategy.png)

Currently modeled date from LendingClub: 11.38% interest rate, 4.29% default rate
(https://lendingalpha.com/wp-content/uploads/Investor-Net-Returns-Squeeze-2015-02-04.png)



Really good article and concerns about Lending Club along with other hype cycle darlings. I believe a few others on the board has expressed similar sentiments. It is given that default rates will shoot up and the lenders will take all of the brunt. How many lenders will still be continuing to lend in that environment?

Quote
Lending Club is another one -- an online loan broker now valued at about $7.95 billion. Lending Club is supposedly exploiting a new community model of lending, providing borrowers and lenders a new direct, community-based market place. But Lending Club is brokering unsecured, consumer loans. Has anyone thought what might happen to unsecured loans in the next recession? Well you can be pretty sure default rates will shoot up and lenders will be stung -- then said lenders will just stop making these consumer loans. So the likelihood is that sooner or later, Lending Club's volumes will actually decrease, not rise. And yet it is only massive future rises in Lending Club's volumes that can justify the current stock price.

http://www.thestreet.com/story/13040401/1/amazon-twitter-uber-lending-club-and-the-next-internet-bubble.html?puc=TSMKTWATCH&cm_ven=TSMKTWATCH

Bubblicious!
Title: LC is the Next Internet Bubble
Post by: BBingo on February 12, 2015, 07:49:30 PM

Credit card default rates were 3.2x higher from peak through trough, and it was only for a temporary period. If the weighted default rate is 4.29% and the average rate being 11.38%, then the worst performance given another 2008-like financial crisis would yield -2.3% during peak charge-off periods. Relatively speaking, that's not bad given that -2.3% would have probably been the best performing fixed income asset class during that time period. Also, portfolios that actively avoid certain risks (example: purposes such as small business and home improvement, or higher income) would probably not see a negative year.

Historical Credit Card composite default rates
(https://lendingalpha.com/wp-content/uploads/Historical-CC-Default-Rates.png)

Lending Alpha's Balanced Strategy expected to remain positive at 3.2x default environments
(https://lendingalpha.com/wp-content/uploads/Default-Rate-Sensitivity-Balanced-Strategy.png)

Currently modeled date from LendingClub: 11.38% interest rate, 4.29% default rate
(https://lendingalpha.com/wp-content/uploads/Investor-Net-Returns-Squeeze-2015-02-04.png)



Really good article and concerns about Lending Club along with other hype cycle darlings. I believe a few others on the board has expressed similar sentiments. It is given that default rates will shoot up and the lenders will take all of the brunt. How many lenders will still be continuing to lend in that environment?

Quote
Lending Club is another one -- an online loan broker now valued at about $7.95 billion. Lending Club is supposedly exploiting a new community model of lending, providing borrowers and lenders a new direct, community-based market place. But Lending Club is brokering unsecured, consumer loans. Has anyone thought what might happen to unsecured loans in the next recession? Well you can be pretty sure default rates will shoot up and lenders will be stung -- then said lenders will just stop making these consumer loans. So the likelihood is that sooner or later, Lending Club's volumes will actually decrease, not rise. And yet it is only massive future rises in Lending Club's volumes that can justify the current stock price.

http://www.thestreet.com/story/13040401/1/amazon-twitter-uber-lending-club-and-the-next-internet-bubble.html?puc=TSMKTWATCH&cm_ven=TSMKTWATCH

Bubblicious!

Excellent insight, thank you!


Sent from my iPhone using Tapatalkz.  U
Title: Re: LC is the Next Internet Bubble
Post by: MathGuy on February 12, 2015, 08:00:19 PM
rawraw what I meant is that now LC is better at evaluating the risk profile of the borrower than before.  My understanding is that LC looks      
at the economic data and trends and based on that loosen or strengthen their underwriting.  For example if unemployment trend up it requires to have a stricter underwriting requirement.        
      
LC is a good stock with strong business model, I don't care too much to what wall street people say.        
When I tell my friends and coworker that I invest in unsecured consumer loans they think that       
I am crazy and naive.  That's because they don't understand how lending club works.
so I tell them: don't criticize what you can't understand   (Bob Dylan)
Title: Re: LC is the Next Internet Bubble
Post by: hessinger on February 13, 2015, 02:22:19 AM
Credit card default rates were 3.2x higher from peak through trough, and it was only for a temporary period. If the weighted default rate is 4.29% and the average rate being 11.38%, then the worst performance given another 2008-like financial crisis would yield -2.3% during peak charge-off periods. Relatively speaking, that's not bad given that -2.3% would have probably been the best performing fixed income asset class during that time period. Also, portfolios that actively avoid certain risks (example: purposes such as small business and home improvement, or higher income) would probably not see a negative year.

Historical Credit Card composite default rates
(https://lendingalpha.com/wp-content/uploads/Historical-CC-Default-Rates.png)

Lending Alpha's Balanced Strategy expected to remain positive at 3.2x default environments
(https://lendingalpha.com/wp-content/uploads/Default-Rate-Sensitivity-Balanced-Strategy.png)

Currently modeled date from LendingClub: 11.38% interest rate, 4.29% default rate
(https://lendingalpha.com/wp-content/uploads/Investor-Net-Returns-Squeeze-2015-02-04.png)



Really good article and concerns about Lending Club along with other hype cycle darlings. I believe a few others on the board has expressed similar sentiments. It is given that default rates will shoot up and the lenders will take all of the brunt. How many lenders will still be continuing to lend in that environment?

Quote
Lending Club is another one -- an online loan broker now valued at about $7.95 billion. Lending Club is supposedly exploiting a new community model of lending, providing borrowers and lenders a new direct, community-based market place. But Lending Club is brokering unsecured, consumer loans. Has anyone thought what might happen to unsecured loans in the next recession? Well you can be pretty sure default rates will shoot up and lenders will be stung -- then said lenders will just stop making these consumer loans. So the likelihood is that sooner or later, Lending Club's volumes will actually decrease, not rise. And yet it is only massive future rises in Lending Club's volumes that can justify the current stock price.

http://www.thestreet.com/story/13040401/1/amazon-twitter-uber-lending-club-and-the-next-internet-bubble.html?puc=TSMKTWATCH&cm_ven=TSMKTWATCH

Bubblicious!

Wow. I thought these numbers would be a LOT worse actually.
Title: Re: LC is the Next Internet Bubble
Post by: rawraw on February 13, 2015, 06:24:34 AM
Credit card default rates were 3.2x higher from peak through trough, and it was only for a temporary period. If the weighted default rate is 4.29% and the average rate being 11.38%, then the worst performance given another 2008-like financial crisis would yield -2.3% during peak charge-off periods. Relatively speaking, that's not bad given that -2.3% would have probably been the best performing fixed income asset class during that time period. Also, portfolios that actively avoid certain risks (example: purposes such as small business and home improvement, or higher income) would probably not see a negative year.

Historical Credit Card composite default rates
(https://lendingalpha.com/wp-content/uploads/Historical-CC-Default-Rates.png)

Lending Alpha's Balanced Strategy expected to remain positive at 3.2x default environments
(https://lendingalpha.com/wp-content/uploads/Default-Rate-Sensitivity-Balanced-Strategy.png)

Currently modeled date from LendingClub: 11.38% interest rate, 4.29% default rate
(https://lendingalpha.com/wp-content/uploads/Investor-Net-Returns-Squeeze-2015-02-04.png)



Really good article and concerns about Lending Club along with other hype cycle darlings. I believe a few others on the board has expressed similar sentiments. It is given that default rates will shoot up and the lenders will take all of the brunt. How many lenders will still be continuing to lend in that environment?

Quote
Lending Club is another one -- an online loan broker now valued at about $7.95 billion. Lending Club is supposedly exploiting a new community model of lending, providing borrowers and lenders a new direct, community-based market place. But Lending Club is brokering unsecured, consumer loans. Has anyone thought what might happen to unsecured loans in the next recession? Well you can be pretty sure default rates will shoot up and lenders will be stung -- then said lenders will just stop making these consumer loans. So the likelihood is that sooner or later, Lending Club's volumes will actually decrease, not rise. And yet it is only massive future rises in Lending Club's volumes that can justify the current stock price.

http://www.thestreet.com/story/13040401/1/amazon-twitter-uber-lending-club-and-the-next-internet-bubble.html?puc=TSMKTWATCH&cm_ven=TSMKTWATCH

Bubblicious!
While the credit card data is interesting, a default on a credit card is different than a default on an installment loan given the amortization. There is more money to have to pay back on a LC note, so I expect this will influence the default rates vs credit card. Also, that credit card data is an average and we don't know what the average borrower for that compares to LC. But it is a good starting point
Title: Re: LC is the Next Internet Bubble
Post by: Fred93 on February 13, 2015, 06:43:17 AM
While the credit card data is interesting, a default on a credit card is different than a default on an installment loan given the amortization. There is more money to have to pay back on a LC note, so I expect this will influence the default rates vs credit card. Also, that credit card data is an average and we don't know what the average borrower for that compares to LC. But it is a good starting point

The federal reserve has many data series for different kinds of loans.  They all have the same shape, showing something like a 3x increase in the 2009/10 crisis.  It doesn't seem to matter what kind of loan.  The absolute default rates are different, but they all have the bump.  I therefore use 3x as a rule of thumb.  I choose my strategy under the presumption that default rates will increase by 3x some time in the future.

Here's a chart I posted a few months ago.  It shows two of these data series.  There are many more.
(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Ffred93.com%2Ffbi%2FChargeoffRatesvsTime.png&hash=18adff5eddcb713ebe0f6f5ca1f42793)
Title: Re: LC is the Next Internet Bubble
Post by: rawraw on February 13, 2015, 06:52:54 AM
Yes, I'm familiar with the Federal Reserve.  Although they don't gather the data themselves, they just index.  I have some free time avoiding Mardi Gras this weekend, perhaps I'll pull some of this data in a little more detail and create some series for the forum since I've been meaning to anyway for personal reasons.   I'm skeptical though, that the balance strategy still makes money but don't know what it actually invests in.  I built a rough stress test in Excel a while back and been meaning to revisit it, but my portfolio barely broke even or lost a little and I'm more than 60% in ABC.
Title: Re: LC is the Next Internet Bubble
Post by: Fred93 on February 13, 2015, 07:17:01 AM
I'm skeptical though, that the balance strategy still makes money but don't know what it actually invests in.

I also have no idea what lendingalpha is doing, so I have no opinion about their approach.  Their numbers look a little odd.  For my own strategy, I made sure that I'd be ok if defaults went up by 3x, and I suggest that for others.  Sounds like LA was trying to do something similar.

Quote
I built a rough stress test in Excel a while back and been meaning to revisit it, but my portfolio barely broke even or lost a little and I'm more than 60% in ABC.

If you mean that your calculation showed you'd "barely break even" after something like a 3x increase in defaults, or whatever level you chose, that's good.  I believe that there are a lot of people who have not bothered to do this sort of calculation.

I adjusted my strategy to break even at a 3x increase in defaults.  That's the amount of risk I want to take.  My strategy (at least by my calculations) does it without investing in A grade loans at all.
Title: Re: LC is the Next Internet Bubble
Post by: rawraw on February 13, 2015, 07:20:51 AM
I'm skeptical though, that the balance strategy still makes money but don't know what it actually invests in.

I also have no idea what lendingalpha is doing, so I have no opinion about their approach.  Their numbers look a little odd.  For my own strategy, I made sure that I'd be ok if defaults went up by 3x, and I suggest that for others.  Sounds like LA was trying to do something similar.

Quote
I built a rough stress test in Excel a while back and been meaning to revisit it, but my portfolio barely broke even or lost a little and I'm more than 60% in ABC.

If you mean that your calculation showed you'd "barely break even" after something like a 3x increase in defaults, or whatever level you chose, that's good.  I believe that there are a lot of people who have not bothered to do this sort of calculation.

I adjusted my strategy to break even at a 3x increase in defaults.  That's the amount of risk I want to take.  My strategy (at least by my calculations) does it without investing in A grade loans at all.
Yeah that's what I meant. And I agree with your post. I was hoping to share my spreadsheet but haven't fine tuned it yet and made sure I agree with the short cuts it takes
Title: Re: LC is the Next Internet Bubble
Post by: mchu168 on February 13, 2015, 11:56:03 AM
Consumers are saving like never before.  And given sluggish growth in the US and globally, we are facing a very prolonged credit cycle.  No need to worry...for now.
Title: Re: LC is the Next Internet Bubble
Post by: bobeubanks on February 13, 2015, 12:14:42 PM
Consumers are saving like never before. 

Never before? Data from the Fed doesn't back that up at all: https://research.stlouisfed.org/fred2/data/PSAVERT.txt

Better than 2005-7 but similar to other years since the late 1990s and it is now still lower than historical savings rates.
Title: Re: LC is the Next Internet Bubble
Post by: Booleans on February 13, 2015, 01:07:11 PM
Consumers are saving like never before.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F4cp3ZWH.png&hash=eef603dec0df7adf7934f5aa216658cc)
Title: Re: LC is the Next Internet Bubble
Post by: Unfolder on February 13, 2015, 05:08:15 PM
Never before? Data from the Fed doesn't back that up at all: https://research.stlouisfed.org/fred2/data/PSAVERT.txt

Better than 2005-7 but similar to other years since the late 1990s and it is now still lower than historical savings rates.

I don't think that anyone that needs an LC loan (or any personal loan) has saving or budgeting skills, bar very specific circumstances like health crises or short term business loans resulting from some boom/bust. To me, anyone borrowing from LC is a deadly risk, from A to G, and separating radioactive slag from just normal slag is a fun but ultimately pointless thing when THE SHOCKTM comes. As we saw during the mortgage meltdown, both the good and the bad were slain with pretty much equal abandon, and only those with liquidity (those already pretty well off) survived, indeed, prospered greatly. Those winners probably were never hitting up payday loans before or after the crunch.

Therefore I invest in all G's because those are the highest yields, and get me the most money. The G's will survive as well as the A's give or take a few percents barring no recession. If a recession comes, all these charts and modeling algorithms go up in smoke very quickly.  Needless to say, I am very bullish on the US economy, I don't see any shock that could destroy it, given how much liquidity the corps are sitting on. If I believed otherwise, I would definitely not be investing in consumer debt, any consumer debt. But yeah:

 
Consumers are saving like never before.  And given sluggish growth in the US and globally, we are facing a very prolonged credit cycle.  No need to worry...for now.
Title: Re: LC is the Next Internet Bubble
Post by: Fred93 on February 13, 2015, 05:49:19 PM
I invest in all G's because those are the highest yields, and get me the most money. The G's will survive as well as the A's give or take a few percents barring no recession. If a recession comes, all these charts and modeling algorithms go up in smoke very quickly.

Ok.  We have a difference of opinion.  I believe all the grades will have their default rates roughly multiplied by the same amount, which will do great damage to returns on G loans.
Title: Re: LC is the Next Internet Bubble
Post by: mchu168 on February 13, 2015, 07:46:29 PM
Consumers are saving like never before.

(https://forum.lendacademy.com/proxy.php?request=http%3A%2F%2Fi.imgur.com%2F4cp3ZWH.png&hash=eef603dec0df7adf7934f5aa216658cc)

What a bullish chart!
Title: Re: LC is the Next Internet Bubble
Post by: rawraw on February 13, 2015, 08:07:42 PM
Never before? Data from the Fed doesn't back that up at all: https://research.stlouisfed.org/fred2/data/PSAVERT.txt

Better than 2005-7 but similar to other years since the late 1990s and it is now still lower than historical savings rates.

I don't think that anyone that needs an LC loan (or any personal loan) has saving or budgeting skills, bar very specific circumstances like health crises or short term business loans resulting from some boom/bust. To me, anyone borrowing from LC is a deadly risk, from A to G, and separating radioactive slag from just normal slag is a fun but ultimately pointless thing when THE SHOCKTM comes. As we saw during the mortgage meltdown, both the good and the bad were slain with pretty much equal abandon, and only those with liquidity (those already pretty well off) survived, indeed, prospered greatly. Those winners probably were never hitting up payday loans before or after the crunch.

Therefore I invest in all G's because those are the highest yields, and get me the most money. The G's will survive as well as the A's give or take a few percents barring no recession. If a recession comes, all these charts and modeling algorithms go up in smoke very quickly.  Needless to say, I am very bullish on the US economy, I don't see any shock that could destroy it, given how much liquidity the corps are sitting on. If I believed otherwise, I would definitely not be investing in consumer debt, any consumer debt. But yeah:

 
Consumers are saving like never before.  And given sluggish growth in the US and globally, we are facing a very prolonged credit cycle.  No need to worry...for now.
What you are saying didn't happen and doesn't make much sense.  But the fact that you view the world as binary does explain your persona on this forum now lol
Title: Re: LC is the Next Internet Bubble
Post by: yojoakak on February 13, 2015, 11:30:56 PM
I invest in all G's because those are the highest yields, and get me the most money. The G's will survive as well as the A's give or take a few percents barring no recession. If a recession comes, all these charts and modeling algorithms go up in smoke very quickly.

Ok.  We have a difference of opinion.  I believe all the grades will have their default rates roughly multiplied by the same amount, which will do great damage to returns on G loans.

I dunno. He might have a point.

"More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.

“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist."

"Biggest Defaulters on Mortgages Are the Rich", July 8, 2010
http://www.nytimes.com/2010/07/09/business/economy/09rich.html?pagewanted=all&_r=0
Title: Re: LC is the Next Internet Bubble
Post by: Fred93 on February 14, 2015, 12:19:38 AM
You seem to be confusing "people with expensive houses" with "people with good credit scores".
Title: Re: LC is the Next Internet Bubble
Post by: kya on February 14, 2015, 06:10:58 AM
having worked in consumer lending for 30 plus years I can tell you one thing.... fico scores matter when estimating loss! ... most of us in sr. mgmt at one time or another tried to argue they didnt... the static pools of loss fell right in line all the way down the chart.... 
Title: LC is the Next Internet Bubble
Post by: BBingo on February 14, 2015, 11:10:21 AM

You seem to be confusing "people with expensive houses" with "people with good credit scores".

Yeah, that strikes me more as an indication the folks in expensive houses are only slightly more likely to be able to afford them than those in regularly priced houses. So the average Joe with a 1.5mil house is more likely to default than the same Joe with a 450k house.


Sent from my iPhone using Tapatalkz.  U
Title: Re: LC is the Next Internet Bubble
Post by: Unfolder on February 15, 2015, 08:25:15 PM
What you are saying didn't happen and doesn't make much sense.  But the fact that you view the world as binary does explain your persona on this forum now lol

having worked in consumer lending for 30 plus years I can tell you one thing.... fico scores matter when estimating loss! ... most of us in sr. mgmt at one time or another tried to argue they didnt... the static pools of loss fell right in line all the way down the chart.... 

Hmm late response but...if I RECALL, during the credit crunch, just about every major bank went under, and that which was AAA+ became FFF- overnight. It was only through the largess of the Fed and the taxpayer that the entire financial market did not have a grand mal seizure. If A can become G when poo hits the fan, might as well start with G so there can be no surprise.

One good thing about G, you break even from the interest alone within 3-4 years (I think). Sprint to safety  ;D