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"The most in a decade" is where all the shenanigans of the article lie. Let's say Peak 2006, Sub-Prime Loan was $600B Let's say the average, natural Sub-Prime
by qroshan 7y ago
"The most in a decade" is where all the shenanigans of the article lie.
Let's say Peak 2006, Sub-Prime Loan was $600B
Let's say the average, natural Sub-Prime Loan is $100B
After the crash, may be the market over-corrected way to much and slowly crawling back to it's natural $100B.
With this perspective, the narrative becomes totally different. The lending standard is still too tight and still way below what the natural / average economy support.
Remember there has to be a balance between exuberance and over-cautious. A journalist should find out, what the happy medium is
That's why numerical literacy is important
- darawk 7y agoI'll also throw in there that it could be simply that mortgages are increasing overall, and that the sub-prime share of the mortgage pie isn't increasing at all.
- mactrey 7y agoThis line implies otherwise, since we can safely assume mortgage originations overall didn't double YoY: > Some $2.5 billion worth of subprime loans, those with FICO credit scores below 690, ended up in mortgage bonds in the first quarter of 2019. That is more than double a year earlier and the highest level since the end of 2007. Although the phrasing makes me wonder if more subprime loans are being originated or if more are just being securitized as opposed to being held on balance sheet.