3 ms·

> If a business is known to offer 10% settlements after 2 years... that predictability will eventually be taken advantage of. Yep. And the next order effect is

> If a business is known to offer 10% settlements after 2 years... that predictability will eventually be taken advantage of. Yep. And the next order effect is that the business stops selling bad debt and sits on it. And eventually starts thinking more carefully to whom lends money.

dalbasal 3y ago
Ad I said, I'm skeptical of the more expansive of such expectations. They might just sit on the debt, almost certainly if it's valued below a certain sum. The chains of effect leading to a useful improvement in lending prudence... long. The opportunities to stray some other way, many. Graveyards are full of wonks that expect a minor policy tweak to fix a problem, rather than just move it around. Most of these debts are unpaid bills, car payments, etc. Not businesses that specialise in debt. They outsource that part, and that part outsources too. "More prudent" means credit rating standards, or (usually) higher interest rate. That's not doing anything useful, IMO. You still get left with as much or more defaults, lawless collection, etc. IMO, if when we want to actually deal with something, we drop the grand ideas and operate at the level of the issue we want to affect. Where there are multiple "orders," we want to tightly control the "chain." Lawlessness in debt collection? Law enforcement. IP trolls abusing the legal system. Make it illegal. Look... Google, FB and such had IP laws specially tailored to them. Timed and written to shield them from legitimate copyright infringement claims, taking into account their ability to "implement IP" without interfering with their business too much. Where is the law for the person in OP's shoes? It doesn't exist. He has to suffice with the print paradigm that existed before www. Not-incidentally, the "print paradigm" was tailored for newspapers. That's what fair use is. It's not some abstract concept that happened to work for news. It was designed for them, probably by them. Copyright just isn't designed to work for ordinary people, so once you have incidents like this posts'... the realistic thing to do is avoid being a copyright user at all. If you want a clever law expected to make debt valued <X% impossible to profitably collect, make it dumb. You probably need an institution of some sort to control that second order, or a willingness to make blanket laws that harm other participants that aren't your target. Consider the RL structure of consumer lending, not a chalkboard model. Disney, Google, or the think tanks they fund to develop laws... they're certainly looking for a tightly controlled cause-effect chain with built in guarantees.
compiler-guy 3y ago
Most lenders already know how risky a particular loan is. They know the predicted default rate and price the credit accordingly, including the sell-on value. Reducing the sell-on value won't make them "more careful", it will just make them price the credit higher. That may make the very, very bottom tier of borrowers unable to borrow--maybe--but it doesn't prevent the vast amount of borrowers from getting a loan. It just makes it more expensive.

dalbasal 3y ago

Ad I said, I'm skeptical of the more expansive of such expectations. They might just sit on the debt, almost certainly if it's valued below a certain sum. The chains of effect leading to a useful improvement in lending prudence... long. The opportunities to stray some other way, many. Graveyards are full of wonks that expect a minor policy tweak to fix a problem, rather than just move it around. Most of these debts are unpaid bills, car payments, etc. Not businesses that specialise in debt. They outsource that part, and that part outsources too. "More prudent" means credit rating standards, or (usually) higher interest rate. That's not doing anything useful, IMO. You still get left with as much or more defaults, lawless collection, etc. IMO, if when we want to actually deal with something, we drop the grand ideas and operate at the level of the issue we want to affect. Where there are multiple "orders," we want to tightly control the "chain." Lawlessness in debt collection? Law enforcement. IP trolls abusing the legal system. Make it illegal. Look... Google, FB and such had IP laws specially tailored to them. Timed and written to shield them from legitimate copyright infringement claims, taking into account their ability to "implement IP" without interfering with their business too much. Where is the law for the person in OP's shoes? It doesn't exist. He has to suffice with the print paradigm that existed before www. Not-incidentally, the "print paradigm" was tailored for newspapers. That's what fair use is. It's not some abstract concept that happened to work for news. It was designed for them, probably by them. Copyright just isn't designed to work for ordinary people, so once you have incidents like this posts'... the realistic thing to do is avoid being a copyright user at all. If you want a clever law expected to make debt valued <X% impossible to profitably collect, make it dumb. You probably need an institution of some sort to control that second order, or a willingness to make blanket laws that harm other participants that aren't your target. Consider the RL structure of consumer lending, not a chalkboard model. Disney, Google, or the think tanks they fund to develop laws... they're certainly looking for a tightly controlled cause-effect chain with built in guarantees.

compiler-guy 3y ago

Most lenders already know how risky a particular loan is. They know the predicted default rate and price the credit accordingly, including the sell-on value. Reducing the sell-on value won't make them "more careful", it will just make them price the credit higher. That may make the very, very bottom tier of borrowers unable to borrow--maybe--but it doesn't prevent the vast amount of borrowers from getting a loan. It just makes it more expensive.