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by blueelephanttea 528 days ago
This entire article seems to be completely based on a non-inflation adjusted write-off value. It is not surprising to me that we are setting write-off records. We were bound to at some point!

It is clear that delinquencies have ticketed up over the last year or two. But this article does not do a particularly good job about contextualizing if this is actually concerning.

Here is the actual rate:

https://fred.stlouisfed.org/series/CORCCT100S

Pretty tough to look at that and determine if this clearly concerning or an moderate adjustment to a changing post-covid environment.
1 comments
pests 528 days ago
I’m having trouble getting thinking this through. If the rate was inflation adjusted, would it appear better or worse?
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blueelephanttea 528 days ago
It would appear better. The absolute value of written off loans will perpetually increase since the total amount in loans will increase.

The record 2010 number is ~$80 billion in 2024 dollars vs $46 billion this year.

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listenallyall 528 days ago
46 billion is only 9 months of this year. Unlikely to reach 80, but the writeoffs are accelerating, hence the article.
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blueelephanttea 528 days ago
The 2010 $80 billion is a first 3 quarters number too. I'm objecting to the media's obsession with using the persistent march of inflation to constantly write headlines about record this or record that.

I'm agnostic to whether this is some important or stark economic indicator. But I think the media should write articles that use rates not absolute values when they choose to write these articles.

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listenallyall 528 days ago
> The 2010 $80 billion is a first 3 quarters number too

I dont think it is. The article includes a chart of the first 9 months of the past 20 years, 2010 looks like about 55 billion or so. In any case, it is very clear from that chart that the 2024 number is significantly higher than any other year except 2010. Not everything is measured in "rates," most things are just measured in dollars. Anyway credit card charges are unlikely to be subject to the exact same inflation rate as general goods like CPI, given that few people charge their housing to a credit card.

And the article does mention Capital One's writeoff rate increase over the past year.

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blueelephanttea 528 days ago
> The article includes a chart of the first 9 months of the past 20 years, 2010 looks like about 55 billion or so.

$55 billion in 2010 is $80 billion in 2024 dollars. I kind of feel like my original point was pretty clear.

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