Re: Credit Card Defaults up 26%

Mike, if CC defaults average around 2% and go up to 2.5%, I am not going to worry much about it. If they average around 10% and go up to 12.5% then perhaps it is a bit more worrisome. Having a title like "Credit Card Defaults up 26%" is BS because it doesn't really tell you anything. It is a media tactic to instill more fear. What if CC defaults were near 0%, then 26% is pretty meaningless. The exact same thing happened with the subprime mess. The media blew it all out of proportion and the banks are suffering for it because of excess fear and panic. The writedowns could have probaby been half of what they are going to total. There is just a big lack of trust right now that the media help to make worse.

Fred

"lubow" <lubow@xxxxxxxxxxxxxxxxxxxx> wrote in message news:IBKbj.4823$yC6.2513@xxxxxxxxxxx
Fred, suppose I told you that the number of fatal airline accidents had increased by 26% over the past quarter. Would you feel safer or less safe flying knowing that the percentage of safe flights was still hovering around 99%?

Now let's put this into the perspective of a credit default. Most people do not default. That means the increase in defaults is far more significant than the portion that pays on time.

This is what Six Sigma is all about, BTW.

--
Lubow
To see my stock picks go to www.stockpickr.com Enter lubow in Portfolio/Stock box


"FrediFizzx" <fredifizzx@xxxxxxxxxxx> wrote in message news:5t88n1F1cmk9hU1@xxxxxxxxxxxxxxxxxxxxx
"Thurston Howell IV" <thowellIv@xxxxxxxxx> wrote in message news:g1ntm39fimp0vpp5f9q15qkt7sn1pvtaec@xxxxxxxxxx
May continue through next year.

Put it in perspective otherwise it is mostly meaningless. What is the percentage of all credit card holders that are defaulting?

Fred



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