Wednesday, October 29, 2008

"We have continued to tweak our underwriting models and to the recalibrate models this may be unstable."

From Free Exchange:

"Emphasis Calculated Risk's (I think). But here's the bit that really grabbed my attention:

Lenders are shunning consumers already in debt and cutting credit limits for existing cardholders, especially those who live in areas ravaged by the housing crisis or who work in troubled industries. In some cases, lenders are even reining in credit lines after monitoring cardholders who shop at the same stores as other risky borrowers or who have mortgages from certain companies.

You've got to love that. Just in case the ongoing financial-real economy feedback loop wasn't enough for you, the credit card companies decide to pile on with just a bit more procyclicality. And pity the poor household living on a block full of foreclosed homes, in a recession-battered town, and shopping at discount stores in order to keep paying the bills on time. Cash only for you, my friend!"

Here's my comment:


"Lenders are shunning consumers already in debt and cutting credit limits for existing cardholders, especially those who live in areas ravaged by the housing crisis or who work in troubled industries. In some cases, lenders are even reining in credit lines after monitoring cardholders who shop at the same stores as other risky borrowers or who have mortgages from certain companies.

You've got to love that. Just in case the ongoing financial-real economy feedback loop wasn't enough for you, the credit card companies decide to pile on with just a bit more procyclicality. And pity the poor household living on a block full of foreclosed homes, in a recession-battered town, and shopping at discount stores in order to keep paying the bills on time. Cash only for you, my friend!"

Could somebody compile a list of those areas and stores for me, by any chance?

I pay my cc bill off every month. Now I know why it always feels especially fine.
10/29/2008 3:45 PM GST

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