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> Credit card delinquency rates, which are seen as a precursor to write-offs, peaked in July, according to data from Moody’s, but have only fallen slightly and
by davidclark 2y ago
> Credit card delinquency rates, which are seen as a precursor to write-offs, peaked in July, according to data from Moody’s, but have only fallen slightly and remain nearly a percentage point higher than they were on average in the year before the pandemic.
This is a prime example of a style of reporting that really grinds my gears.
The citation is clearly to another internet source, so a link should be provided. If it truly cannot be linked because it is private, more context is still needed to understand what this data means.
I actually can’t find the source myself, but I can find “Delinquency Rate on Credit Card Loans, All Commercial Banks” from the Federal Reserve. [1]
The percents from that source somewhat match those referenced in the FT quote. “Peaked in July”
- 2024Q1 3.15%
- 2024Q2 3.24%
- 2024Q3 3.23%
Using 2019 as “the year before the pandemic”, the average was 2.5825. Is +0.6475 “nearly a percentage point”? I guess it technically would round up.
Seemingly important context that the quote doesn’t give is that 3.23% is lower than any time 1991Q3 to 2011Q4. But, maybe the trend matters more for this metric.
[1] https://fred.stlouisfed.org/series/DRCCLACBS https://fred.stlouisfed.org/series/DRCCLACBS
- pessimizer 2y ago> Using 2019 as “the year before the pandemic”, the average was 2.5825. Is +0.6475 “nearly a percentage point”? I guess it technically would round up. They're clearly not giving their references, calculations, or any basis for comparison, which is awful. But there's no need to minimize what you've found in your own research, which is that that defaults are up ≈25%.
- deleted 2y ago[deleted]
- conductr 2y ago> which is that that defaults are up ≈25%. Thanks! I feel like this is actually the next reporting step that the source article needed to do. The original data source citation is helpful of course too. But my feel is the FT author is trying to avoid just listing the numbers, so tries to cleverly explain them and unintentionally creates a meaningless statement. Instead, they should exercise a tiny bit of analysis and tell us on a relative basis the metric has changed since the premise is that it’s changed a lot, how does “higher level” even compare to what the readers can relate to or comparing to another time they where high or the previous record holder. In any case, if I read it’s 25% higher than 2019 I immediately can see how that would be concerning and drastic change and makes me want to read more. The cynical part of me thinks it’s possibly just a way to increase word count and write with less numbers. But this is one of those cases when the author should use the data to create information for their audience to consume instead of describing the raw data (raw data nearly never needs description, if you’re tempted to do that, just cite/recite it directly). In short, information > raw data > convoluted descriptions of raw data.
- davidclark 2y agoYep! And, since I provided the basis for my commentary, you don’t have to trust my interpretation. My focus was critiquing their phrasing, which turns that 25% into 38%. Like I said, I’m not actually an expert on this to know if the trend is what matters.
- webninja 2y agoComments like yours make the comment section invaluable. Upvoted.
- mhh__ 2y agoA lot of this data is quite hard to find if you don't have access to a data provider like Bloomberg (and costs money to quote) so I can understand why they don't bother, even though they should obviously.
- infecto 2y agoAll of this data is public and well known for anyone in the finance industry, both professionals and reporters.
- bdangubic 2y agoyou should follow a statement like this with some links mate :)
- infecto 2y agoNot your mate but the OP already posted links to Fred which is where it’s public. I am sure moodys used some internal data but Fred delinquency and late rates should get pretty darn close. This data (credit card related) is not unique but I can see it’s not entirely obvious for folks like yourself that are not familiar with it. ;)
- bdangubic 2y agoagain - no links… :)
- deleted 2y ago[deleted]
- patmorgan23 2y agoCool. For those who are not in the finance industry, could you provide us some links to this easily accessible data?
- 2y ago
- listenallyall 2y agoWhy did you skip over the meat of the article in the second paragraph (and a graph) to complain about something in the 14th? Credit card lenders wrote off $46bn in seriously delinquent loan balances in the first nine months of 2024, up 50 per cent from the same period in the year prior and the highest level in 14 years, according to industry data collated by BankRegData. > The citation is clearly to another internet source How is "data from Moody's" (likely internal, unreleased, or subscriber-only) clearly an internet source?
- davidclark 2y agoDo you think the reporter at FT accessed this information on a paper report which was mailed to them? If not, then it is on the internet somewhere. Whether it is on the “public” or “free” internet is different. If it is not freely available, then they could still give a real citation, so someone else with access to Moody’s private data could find it.
- lazyasciiart 2y agoEmail is not "an internet source", and neither is my corporate sharepoint site.
- davidclark 2y ago“based on communications with Moody’s analysts” “based on internal data from Moody’s” “data from Moody’s” with no qualifier indicates the reader should be able to reasonably find the information themselves (which they can’t in this case)
- listenallyall 2y agoThe general public expects to be able to find all of Moody's analysis and data? No. The "from Moody's" is the part that indicates this data is likely proprietary and inaccessible, as opposed to a government or university source like the Fed, or U.Mich consumer surveys.
- Waterluvian 2y agoFor-profit media is not journalism. It kind of used to be. There was a level of responsibility despite the organizations being for-profit. But I just cannot pretend this is sufficiently true anymore.
- kasey_junk 2y agoWhat do you suppose journalism is and when do you propose that happened historically?
- Waterluvian 2y agoStuff like Carreyrou’s investigation on Theranos feels like journalism. Where the objective is the truth, not ad impressions. I think both goals can sometimes find harmony and the revenue can support the journalistic endeavour. But that feels less and less true. A lot of for-profit media is optimizing heavily towards clicks, often at the very clear expense of the story. Such as not linking citations because thou shalt not guide eyeballs away from the website. I feel that journalism has immense social value (I’d call it an absolute necessity) and ideally it is funded publicly and uses the academic tenure style approach.
- kasey_junk 2y agoI think you have a biased belief in the history of journalism. The news now is not in any way more optimized for selling content than the past commercial media. And the history of state run media is not particularly aligned with the idea that “the truth” was the goal.
- ghaff 2y agoAnd Carreyou worked for the Wall Street Journal and, as I recall, left because he wasn't allowed to be paid for speaking. Public funding has its own set of conflicts; look at any history of public television/radio funding.
- bee_rider 2y agoBy for-profit do you mean ad supported or something? I don’t really see any reason why journalism shouldn’t be for-profit. For example, a business model of producing informative articles and then selling access to those articles could be completely ethical, and a reasonable way to do journalism. Ad supported media is just a toxic business model though.
- hammock 2y agoHere is another FRED chart that may be instructive, although I am not clear on the difference between "delinquency rate" and "balances past due" ("accounts past due" is different still) https://fred.stlouisfed.org/series/RCCCBBALDPD30P https://fred.stlouisfed.org/series/RCCCBBALDPD30P
- nimbius 2y agoPast due < 30 days Delinquent > 30 days Generally delinquent increase of any percentage is a big red flag as these accounts are statistically very unlikely to make a correction and are a bellwether for greater issues like sustainable future consumer trends. They also betray the real unemployment rate including the us "jobless" hand wavery.
- hammock 2y agoNot following. Did you click the link? FRED has "30 or More Days Past Due", "60 or More Days Past Due" and "90 or More Days Past Due." None of them align with delinquency rate
- hattmall 2y agoIts up to the CC companies to determine delinquency. Some may consider it at > 30 days, others may wait until 90 or 120 days.
- renewiltord 2y agoThis is likely a rewrite of something else by the human equivalent of an LLM. I wouldn’t ascribe much motive to it except “boss said I need to get out 20 of these out by 11 PM”
- deleted 2y ago[deleted]
- infecto 2y agohttps://www.creditorsbar.org/news/-credit-card-charge-offs-and-delinquencies-hit-13-year-high-are-they-peaking https://www.creditorsbar.org/news/-credit-card-charge-offs-a... Basically what you already said but a little better connection in how moodys probably reported on it.