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America will soon see a wave of bank mergers?

economist.com

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Re: America will soon see a wave of bank mergers?

#371

Post by hanoz »

TexanFeller wrote: post #347
siliconc0w wrote: post #107

The big banks are terrible if you fall outside their algorithmic expectation. My partner and I were trying to get a mortgage and despite near perfect credit, large incomes, etc our apps were auto-denied because I never opened multiple open loan lines. Never needed them, just used CCs I immediately paid off for points as I always had a job/savings and bought cheap used cars for cash. We eventually got one but it took…

Credit scores make more sense if you think of them not as scores of your ability to pay back debt, but as scores of likely profitability for the creditor. Someone who never carries a balance and never will pay the occasional late fee is less profitable and thus has a lower score.

That doesn't make sense. A credit card provider may profit more from a customer who carries a balance and maybe makes the odd late payment, but a mortgage provider inherently has a customer who carries a balance, and the ideal is a customer who makes payments on time every time, for the life of the mortgage.

Re: America will soon see a wave of bank mergers?

#372

Post by pessimizer »

fowtowmowcow wrote: post #352
diordiderot wrote: post #319

Earlier quoted context omitted.

Your thinking is too fine grained. Missing forest through the trees. For a nation state with it's own currency, money is the sum of the production capacity / natural resources of that nation state. You don't need Joe and Sue to pay you back.

Okay Joe and Sue don't pay back their loan. Either Beth now has to borrow for her house or business at a higher rate of interest OR we deflate the value of the currency (by increasing the money supply) to make up for the loss on the balance sheet. Congratulations your civilization just discovered run away inflation.

Joe and Sue also don't pay back their loans to private banks, and those banks get bailed out.

Re: America will soon see a wave of bank mergers?

#373

Post by TexanFeller »

hanoz wrote: post #371
TexanFeller wrote: post #347

Earlier quoted context omitted.

Credit scores make more sense if you think of them not as scores of your ability to pay back debt, but as scores of likely profitability for the creditor. Someone who never carries a balance and never will pay the occasional late fee is less profitable and thus has a lower score.

That doesn't make sense. A credit card provider may profit more from a customer who carries a balance and maybe makes the odd late payment, but a mortgage provider inherently has a customer who carries a balance, and the ideal is a customer who makes payments on time every time, for the life of the mortgage.

There's sense in what you say and that's one reason why different scores are sometimes used for mortgages vs CCs etc. But one could also imagine ways in which zero risk creditors might be less desirable to mortgage lenders. They might be more likely to prepay the loan or refinance quickly and stop making those interest payments prematurely. I payed mine off massively early due to some good fortune - wonder if the mortgage company was annoyed they went through the laborious process of approving the loan and only got a few years out of it.

Re: America will soon see a wave of bank mergers?

#374

Post by int_19h »

newswasboring wrote: post #67
mtlmtlmtlmtl wrote: post #66

Earlier quoted context omitted.

And what's the situation now? Your country could gradually he heading towards a two party system.

No we are heading to a one party system. But that has nothing to do with first past the post. There are several historical and social reasons for that.

That FPTP results in a long-term two-party equilibrium (that may be occasionally disrupted) is not exactly a secret:

https://en.wikipedia.org/wiki/Duverger%27s_law

And in some cases, at least, FPTP itself is deliberately introduced by large parties to reduce the viability of their competitors. Northern Ireland was one particularly nasty case of that.

Re: America will soon see a wave of bank mergers?

#375

Post by hanoz »

TexanFeller wrote: post #373
hanoz wrote: post #371

Earlier quoted context omitted.

That doesn't make sense. A credit card provider may profit more from a customer who carries a balance and maybe makes the odd late payment, but a mortgage provider inherently has a customer who carries a balance, and the ideal is a customer who makes payments on time every time, for the life of the mortgage.

There's sense in what you say and that's one reason why different scores are sometimes used for mortgages vs CCs etc. But one could also imagine ways in which zero risk creditors might be less desirable to mortgage lenders. They might be more likely to prepay the loan or refinance quickly and stop making those interest payments prematurely. I payed mine off massively early due to some good fortune - wonder if the mor…

Fair point. It's a sorry state of afairs when you have to speculatively reverse engineer the algorithms run by a state-sanctioned oligopoly of private firms holding your own data gathered with, at best, coerced consent, and artificially structure your affairs in an attempt to present yourself as a dependable and unadventurous cash cow

Re: America will soon see a wave of bank mergers?

#376

Post by SllX »

pessimizer wrote: post #368
SllX wrote: post #197

Earlier quoted context omitted.

While corruption is never good, I’ll take private-sector corruption over government corruption every day of the week if I’m forced to choose. Governments are sovereign.

The government is corrupted by its relationships with the private sector. The only other way to pull money out of government is through salaries, and government workers don't get paid that much.

Most people are “the private-sector”, it’s called society and includes every voter not working directly for the government, which is most of them. If a government is necessarily corrupted by its relationships with the private-sector, then the word corruption is meaningless in the context of government. You should also mind that governments can also be corrupted—can be but not necessarily are-by their relationships with their own employees. I advise you to find and apply a limiting principle, one that would be useful for you in distinguishing government corruption from government business.

Re: America will soon see a wave of bank mergers?

#377

Post by TexanFeller »

merek wrote: post #358
TexanFeller wrote: post #347

Earlier quoted context omitted.

Credit scores make more sense if you think of them not as scores of your ability to pay back debt, but as scores of likely profitability for the creditor. Someone who never carries a balance and never will pay the occasional late fee is less profitable and thus has a lower score.

I think you need to factor in risk. This is a simplistic example but demonstrates the influence of risk. Who would you rather lend a mortgage to? - Group A, consisting of people who prudently pay debts early - Group B, consisting of people who pay debts on their due date, and sometimes after Let's say you lend $100B to each group A and group B. Historical data might show that in aggregate, group A has a default rate…

Risk is for sure a large component of profitability, I didn't mean to imply otherwise. But risk is not the only factor and credit scores often seem to track the total profitability curve better than the risk curve.

Re: America will soon see a wave of bank mergers?

#378

Post by WaxProlix »

teekert wrote: post #369
siliconc0w wrote: post #107

The big banks are terrible if you fall outside their algorithmic expectation. My partner and I were trying to get a mortgage and despite near perfect credit, large incomes, etc our apps were auto-denied because I never opened multiple open loan lines. Never needed them, just used CCs I immediately paid off for points as I always had a job/savings and bought cheap used cars for cash. We eventually got one but it took…

I always find this to be a baffling thing about the American system. Where I live we never take out a loan (except for houses) and most cards are debit cards. The American system seems to punish the way we act here, like you, you can be perfectly credit worthy but you have not been a good loan-taking rent-paying citizen? It feels dirty to me.

What metrics do they use there to determine your loanworthiness?

Re: America will soon see a wave of bank mergers?

#379

Post by dghlsakjg »

inconceivable wrote: post #117
siliconc0w wrote: post #107

The big banks are terrible if you fall outside their algorithmic expectation. My partner and I were trying to get a mortgage and despite near perfect credit, large incomes, etc our apps were auto-denied because I never opened multiple open loan lines. Never needed them, just used CCs I immediately paid off for points as I always had a job/savings and bought cheap used cars for cash. We eventually got one but it took…

never buy a mortgage through an app. use a human broker or if you're rich enough, a bank salesman. and for those of you who refuse to talk to people when spending multiple hundreds of thousands or even millions of dollars, well... this is what you get to deal with.

Everyone's downvoting, but this is what did it for me.

Especially if you have an unusual situation, brokers and personal bankers will know how to handle it.

I had 0 credit history in Canada (literally a completely blank printout), but wanted to buy a house now that I'm a PR. A personal banker was able to work with a copy of my US credit report (Canadian banks don't/can't pull this on their own), and proof of assets in the states. The first item on my Canadian credit report was cosigning a mortgage at prime rates.

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