der Teufel wrote: Mon Mar 30, 2020 8:50 pm
philip964 wrote: Sat Mar 21, 2020 1:04 pm
So an accountant friend posed this question. Your a lending company with loans- you have payed off loans, loans that defaulted and required repossession and total loans made.
Lets say the name of your lending company is the USA. Here is the data for the USA.
USA
1.Total loans made 143,532
2. Payed off loans 4,865
3. Defaulted loans required repossession 2,572
4. Active loans = (1. - 2. - 3.) = 136,096 loans
5. Percent of loans that defaulted and required repossession = ( 3. /( 2.+ 3.) ) =
34.58 %
I stopped reading here. If I run the numbers I get:
2,572 / (4,865 + 143,532) = 2,572 / 148,397 = 0.01733 = 1.73%
1.73% is a lot different from 34.58%
What's up? Someone is way off. Maybe it's me, but if so please explain.
So if your making loans. You have the loans that you have made but have not been paid off. Those are the active loans. They could still default. You don't know. But you have the loans you made and were paid off. And you have the loans that defaulted. You have that history.
In your calculation you used the Total Loans made (3. / ( 2. + 1.) rather than my formula of ( 3. / 2.+ 3.)
The formula you used is sort of what everyone is hoping for all the active loans will not default. That is sort of the best case and is what people have been saying in the news that the default rate is. 1.73% and that is made up of very old loans with problems.
My formula uses the past history of the loans you have made in this case ( 2,572 / (4,865 + 2572) = .3457 = 34.57%
What also is being said alot is that lots of people take out loans and pay them off, but they did it without formally getting a loan, so there is no record of their loan or paying it off.
The main thing to learn from this is: Don't get a loan.
You shouldn't borrow money. So I am doing my best to not spend money I do not have.
I was told that long ago by a Texan who died awhile ago. He gets smarter in my eyes every day.
BTW the world loan default rate is 18.94% but that includes a lot of loan data from Germany, China and Iran which I am treating as suspect, since it is so much better than the rest of the world.
In other news:
https://www.themoscowtimes.com/2020/03/ ... ive-a69815
Putin met the chief loan officer for Russia a few days ago and that loan officer himself has just gotten a new loan.