Author Topic: Consumer Loans Surge Across Asia  (Read 14188 times)

rawraw

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Re: Consumer Loans Surge Across Asia
« Reply #15 on: April 27, 2013, 04:40:54 AM »
I find it interesting you haven't really given any reasons to do it, except that others are doing it.

Fred

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Re: Consumer Loans Surge Across Asia
« Reply #16 on: April 27, 2013, 11:12:11 AM »
In a "momentum" equity strategy, " others are doing it" is a good enough reason.

You just need to have independent opinions on the size & timing.

rawraw

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Re: Consumer Loans Surge Across Asia
« Reply #17 on: April 27, 2013, 02:33:30 PM »
Ha ha, well that explains it.  We are different types of investors.  But I think there are some Chinese P2P sites, so you may be able to get exposure.

Fred

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Re: Consumer Loans Surge Across Asia
« Reply #18 on: April 27, 2013, 07:12:53 PM »
Not quite the same as 25% in the US.

I see this as an issue of nominal interest rate vs. real interest rate vs. inflation.

If you accept that real interest rate = nominal interest rate - inflation, then 40% nominal interest rate in a country of 15% inflation should be similar to 28% nominal interest rates in a country of 3% inflation.  Both have 25% real interest rate.

IMO, 25% real interest rate in the US should be similar with 25% real interest rate in Asia.

Ceteris paribus.

ee1x

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Re: Consumer Loans Surge Across Asia
« Reply #19 on: April 29, 2013, 11:34:37 PM »
Not quite the same as 25% in the US.

I see this as an issue of nominal interest rate vs. real interest rate vs. inflation.

If you accept that real interest rate = nominal interest rate - inflation, then 40% nominal interest rate in a country of 15% inflation should be similar to 28% nominal interest rates in a country of 3% inflation.  Both have 25% real interest rate.

IMO, 25% real interest rate in the US should be similar with 25% real interest rate in Asia.

Ceteris paribus.

It would be similar if that inflation rate were stable. In my mind (and perhaps I am wrong on this) when you are seeing 15% inflation there is going to be far more variability around that number than you'd see in a low-inflation environment. High inflation signals instability. For example... I would wager that you might see a year-to-year fluctuation between 12-18% inflation vs. the 0-4% we've seen in America. So I maintain it is not quite the same.

Got any good links to time series inflation data for these foreign countries? Now I'm curious to see if I'm actually right.
Investing since March 2012

standby

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Re: Consumer Loans Surge Across Asia
« Reply #20 on: January 14, 2015, 12:40:27 AM »
I'm happy about the conversation too.  Who wouldn't want to make a small gamble?  It's too bad so much risk is embedded everywhere.  I don't know what to do.  I was trying to figure out the context of fearful vs. greedy for me.  I can't help but look at a lot of complacency as greed so when the complacent get fearful, I guess I know what to do...     ;D  Slug away gentlemen!

BTW, maybe I'm crazy but it seems the P2P is less risky than stocks, because we know how much these assets have been hyper inflated, the truth in reporting is questionable, anytime you might get 1:10 split, I mean so many things can punch that asset down for almost no reason at all.  It's all fake anyway, right?  Or at least 50% of it.  I mean who'd take a gamble on that right now without some careful thought.

standby

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Re: Consumer Loans Surge Across Asia
« Reply #21 on: January 14, 2015, 12:43:48 AM »
Oh gosh, I just realized this post is really old.  Never mind!    ;)