6 ms·
The economic boom isn’t helping everyone.
by mcnamaratw 2y ago
The economic boom isn’t helping everyone.
- jmclnx 2y ago>Credit card lenders were happy to help, signing up customers who might not have qualified in the past based on income, but looked like safe debtors because their bank accounts were flush with cash To me that is the biggest reason.
- philip1209 2y agoWasn't this sometimes a bug instead of a feature? Loaning based on cash instead of income is how Brex and Ramp took on Amex. (obligatory: "commercial != consumer")
- delfinom 2y agoThat seems to defeat the narrative of "the consumers are struggling due to high interest rates". If they have the cash in their accounts, they shouldn't be the ones largely defaulting.
- connicpu 2y agoThey had cash when they signed up, they don't anymore
- jandrese 2y agoI think the story is that the COVID stimulus checks meant that people who normally live paycheck to paycheck were for the first time showing a healthy bank balance which increased their credit score just enough to qualify. Once the checks stopped they stated defaulting.
- losteric 2y agoSince when is bank balance considered in credit scores and checks?
- jandrese 2y agoSince forever? Part of the assets/debt ratio.
- do_not_redeem 2y agoI'm gonna need a source on this one. https://www.myfico.com/credit-education/whats-in-your-credit-score https://www.myfico.com/credit-education/whats-in-your-credit...
- etempleton 2y agoI wonder to what extent credit card issuers factored-in pandemic related stimulus into their risk models. If they really considered cash on-hand as a replacement to verified income the stimulus payments would have completely invalidated their existing models.
- ac29 2y agoI have applied for many credit cards over the years and I have never once seen one that asked about assets, only income.
- asdev 2y agoit was never an economic boom, just an inflationary boom. AI hype created an echo bubble from 2021 but it's due to pop
- misiti3780 2y agoI agree it's going to pop. Unfortunately the market turn will be hard to short as far as i can tell.
- jraby3 2y agoIt was an economic boom based on debt. The US faired much better than europe but most likely due to the massive debt we used and then gave to our citizens (and businesses).
- chasd00 2y agoYeah I feel the same. Going to adjust to a more conservative portfolio soon and try to minimize the damage to ye’old 401k
- delfinom 2y agoIt is helping the wealthy, about all the government cares about really. And "low unmployment" and not "median income vs cost of living/inflation".
- paxys 2y agoThere's no economic boom, just a stock market boom. People are helped in proportion to the money they have in the market.
- nerdponx 2y agoThere was a huge corporate profit boom as well.
- yieldcrv 2y agoI wish a President would say that as well as publications leaning either direction
- jaco6 2y ago[dead]
- UncleMeat 2y agoReal wages are up, especially for lower earners. Unemployment is low.
- vladimirralev 2y agoReal wages are not up for low earners. This is such an obvious math flaw I can't understand how nobody is challenging it. Real wages are adjusted for average inflation based on all consumers. However low earners experience much higher inflation than the average, at least double, and their consumption is vastly different (all of it is housing, food and energy in that order). Many of these low wage earners are periodically homeless or otherwise avoid paying bills to begin with.
- TeaBrain 2y agoReal median wages for full time workers are up a little less than 2.5% since Q4 2019. It could be worse, but it's not really something worth getting excited over. https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q
- vladimirralev 2y ago
- timewizard 2y ago[dead]