By and enormous, American households are in a wholesome financial place. Yes, unemployment has been rising, nevertheless it’s nonetheless at pretty low ranges. Consumer spending has held up properly regardless of horrible sentiment. And many households are sitting on large inventory market good points and have a giant dwelling fairness cushion. And but there are indicators of hassle. Most notably, auto mortgage delinquencies have been surging to their highest stage in historical past. It’s the identical with scholar loans, the place delinquencies are far greater than regular. So what is going on on? On this episode we converse with Rikard Bandebo, the chief economist at VantageScore, which provides a shopper credit score rating that is totally different from the standard FICO measures. He explains how surging costs, rising pursuits, and — crucially — rising insurance coverage prices have created such an auto squeeze. We additionally talk about what this implies for broader shopper well being and whether or not this auto delinquency phenomenon indicators one thing broader about shopper stress.
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0:00 Ok-Shaped Economy Discussion Preview
1:41 Consumer Sentiment Confusion
2:53 Household Balance Sheets and Market Performance
4:03 Lending Standards and Historical Context
4:57 Guest Introduction: VantageScore and Credit Scoring
7:29 Credit Scoring Methodology and Predictive Analysis
10:48 VantageScore Innovations and Expanded Coverage
15:22 Credit Scores as Relative Risk Measures
18:17 External Economic Factors in Credit Assessment
19:48 Ok-Shaped Economy Deep Dive
21:26 Mortgage Rates and Housing Market Impact
26:33 Delinquency Trends and Consumer Stress Timeline
31:04 Shopping Patterns and Economic Indicators
33:35 Income vs. Wealth in Credit Risk
36:03 Auto Loan Crisis Analysis
41:00 Buy Now Pay Later and Hidden Leverage
43:15 Current Delinquency Status Across Products
43:49 Insurance Rate Impacts
45:12 Student Loan Payment Resumption
48:23 Conclusion and Economic Outlook
Bloomberg’s Joe Weisenthal and Tracy Alloway analyze the bizarre patterns, the complicated points and the most recent market crazes. Join the dialog each Monday and Thursday for interviews with probably the most fascinating minds in finance, economics and markets.
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