Tag Archives: economy

The end of #lendingclub’s most lucrative note grades

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The return on my portfolio with LendingClub – my choice was mostly low-grade notes – steadily dropped all the way down to 5.88% over the last year and a half. Until we finally run into this:

As of 11/7/2017, F & G grade Notes are not available for purchase by investors.

because LendingClub

noticed an increase in prepayment and delinquency rate in F and G grade Notes

Seems like the 20+% APY party came to an end. Even without any major event or recession in sight yet. My guess would be that with a spike in demand, LendingClub had to loosen up some criteria and let in a bunch of borrowers they wouldn’t and shouldn’t have otherwise, so now all of us are paying the price. Still might get much worse when the economy starts to tank.

A healthy bit of #conspiracy theorizing for 2017

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Why doesn’t anyone see the obvious? Many years of near-zero interest rate and dumping cheap money into the system produced mediocre economic growth combined with a huge debt and equity bubble (though surprisingly little inflation).

The rate will have to go up to realistic levels at some point, and with it will evaporate the equity bubble, mortgage affordability and the housing market – with debt servicing (consumer, corporate and government) draining all other parts of the economy.

Wouldn’t it be nice if we had a temporary figurehead with historic unfavorable rating to use as a scapegoat to do some bloodletting in this system?

Oh, wait…

Basic Income #basicincome

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The subject is all the rage in nerd blogs and progressive debates. But it’s a bit ridiculous how quick people are to forget history and get carried away with hype. Basic income (various versions of it, and much more along those lines) has been extensively debated and tried in real life for many years. It has serious pros and cons that mostly still hold, even in the world of (gasp) iphones and facebooks. There is a rich body of works and real-life data for anyone who cares to set aside a few dogmas and take an unbiased look around. Yet most vocal people just pretend like nothing of that kind has ever occurred, and the dumb humanity just never happened to think of trying out the groundbreaking Finnish new ways…

The world outside tech bubble is crazy

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In yesterday’s Bloomberg article with an upbeat glass-half-full original title of “The mining industry makes oil giants look great”, we see one of those CEO quotes that truly boggles the mind. Apparently, if this continued for 33 months already, it’s probably considered not so bad in the non-tech world.

… since he took on the role 33 months ago the company’s revenue had slumped by an average of $350 million a month.

Just curious, how does a routine conversation with the board/investors go then? “So, how are you guys doing?” – “Not so bad, focusing on our core competencies, pissing away $350 million a month, just like the last few years” – “Great, keep up the good work then!”

equivalent to a retirement sum worth millions of dollars #fumoney

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Wow:

Who are America’s fastest-growing class of millionaires? They are police officers, firefighters, teachers and federal bureaucrats, who, unless things change drastically, will be paid something near their full salaries every year–until death–after retiring in their mid-50s. That is equivalent to a retirement sum worth millions of dollars.

Never thought about it this way. Social security is on its way out; turns out the people with a guaranteed pension end up among the richest. You have to make a lot, save a lot, and manage your savings really well to match that.

And no, this is not socialist Europe, this is the good ol’ US of A, Gini index  45.0.