Felix Salmon

The limits of systemic risk regulators

Felix Salmon
Jun 25, 2010 15:41 UTC

What kind of information will a systemic risk regulator need from banks? Sifma has just commissioned an 86-page study on this question from Deloitte, and the conclusion, though predictable, is sobering:

There is much work to be done, both domestically and globally, in order to address the issue of systemic risks in the financial system… Information gaps are inevitable, however, as noted by the FSB, “These gaps are highlighted, and significant costs incurred, when a lack of timely, accurate information hinders the ability of policy makers and market participants to develop effective policy responses.”

One of the reasons why Basel II was never fully implemented in the US is that many of the banks here simply don’t have the requisite sophistication to implement it. (In hindsight, this was a good thing.) And worldwide, it’s inevitable that many banks will lack the IT infrastructure needed to be able to give systemic-risk regulators the information they need, especially in a crisis.

You can’t regulate what you can’t measure, and it’s likely to prove impossible, in practice, to get all the world’s biggest banks up and running in terms of reliably reporting all of the information that regulators need, in an easily-tractable and standardized form. Inevitably, regulators are going to end up spending an inordinate amount of time regulating the known knowns rather than the known unknowns, like the economist looking for his keys underneath a lamppost.

As for the unknown unknowns, those you just have to resign yourself to, and hope that size, leverage, liquidity and capital-adequacy restrictions somehow keep them in check. Which is why Basel III is so important. Regulators are important, but rules are too.


Felix, you’re perpetuating one of the most toxic ideas in our policy discourse, which is that complexity and imperfect information make intelligent regulation impossible. We will never have perfect information, but we can do better at gathering the most important systemic information and applying our best minds to it, rather than their own individual trading books and year-end bonuses. It is true that lots of organizations would be unable to generate accurate, useful, timely information on a regular basis (see Lehman and the difficulty the bankruptcy court has had even figuring out what the assets and liabilities were); however, this is indicative not of irreducible complexity that must be tolerated, but poor management that must be incentivized to improve or find a new line of work. Strong institutions care about data collection, organization, and access, because the internal leaders need to be able to see this information. To the extent that our capitalists are unable to run their businesses without government hand-holding (and most of them are – see the hasty registration as a BHC and issuance of government-backed equity and debt even at the mighty Goldman Sachs), their regulators need to be able to look over their shoulders at the same high-quality information. The business of banks has become too complicated for us to accept any longer the existence of a systemically important bank that can’t rapidly generate an accurate historical cost and mark-to-market inventory of all its positions and a convincing explanation of any hedging. It’s just not acceptable any more to have this data scattered across dozens of unlinked Excel spreadsheets updated intermittently by hand, as Lehman did. We have had the computer technology to do much better for more than 10 years now, and it’s time to get serious about information management rather than continuing to treat IT departments as vehicles to help the HFT guys shave a few more milliseconds off their trade times.

Posted by najdorf | Report as abusive

The regulatory fight moves from Washington to Basel

Felix Salmon
Jun 25, 2010 13:36 UTC

It’s a great day: financial regulatory reform is done, and not a day too soon. The Consumer Financial Protection Bureau is coming — Ron Lieber has a great overview of how that will change the regulatory landscape — and while banks won’t have to sell their swaps desks entirely, they will need to spin them off into separately-capitalized, small-enough-to-fail subsidiaries which deal mainly on public exchanges. That’s a big and a welcome change.

No one really knows how the bill is going to shake out in reality: the Volcker rule, in particular, remains very vague indeed, and a lot of regulatory heavy lifting is being put onto the untested shoulders of the SEC and of other institutions which have failed many times in the past. But in general the bill makes as robust an attempt as could reasonably be expected to both monitor and ring-fence the kind of things which can cause systemic meltdowns.

The big disappointments on the consumer side were on auto dealers and annuities, neither of which are going to get the regulation they very much need and deserve; it’s also worth pouring out a glass for the late lamented vanilla option. And there are still far too many bank regulators: the OTS goes away, but the OCC remains, along with the FDIC and the SEC and the NCUA and the Fed. It’s a recipe for inconsistency, confusion, regulatory arbitrage, and turf wars.

The most important thing right now, however, is that the White House not sit on its laurels, and that it tries to carry over some of the momentum from the passage of this bill into the negotiation of Basel III, which seems to be falling apart a little. It’s in Basel, not Washington, that the most important constraints on the global banking system are going to be enacted. And pushing the rest of the G20 to get tough in Basel should be at the top of Barack Obama’s to-do list this weekend.


Correct me if I’m wrong, G-bahn, but it might be easier to regulate banks in a climate that won’t take “D’uh, not sure, but how about some more of that taxpayer money?” for a good answer from any banking conglomerate to the question of what they’ve been doing with funds entrusted to them.

It might be easier to regulate banks that aren’t viciously obstinate toward any sort of regulation, and it might be even easier still to get answers out of banks that weren’t outright bribing people who ought to be asking questions not to ask them.

In other words, you could say Obama’s job’s really a piece of cake, as long as you don’t ask where the cake’s coming from.

Posted by HBC | Report as abusive


Felix Salmon
Jun 25, 2010 05:11 UTC

“Dan Costa had a cool (and different) death grip, which can knock two signal bars off his Palm Pre” — PC Mag

Great moments in BP PR, part 441: Now BP is burning sea turtles alive — TBI

Lenders won’t be happy until borrowers are living on <$400/month, after mortgage payments — Rortybomb

5,000 words on the economics of the iPhone app store — Communities Dominate Brands

Why a “professor of Innovation” thinks McChrystal shouldn’t have been fired — HBR

Wine vending machines – with built-in breathalizer – open for business in Pennsylvania — Penn Live

Photoshop, circa 1872 — MAN

The gold/silver ratio’s new normal: closer to 65 than 50 — Inca Kola News

The NYT bravely takes on Big Sunscreen — NYT


Also check out this story on community banking and “Move Your Money” — a subject you’ve discussed before.

http://www.sanfranmag.com/story/its-a-wo nderful-bank

It also has a nice sidebar on the limited info available to help you decide whether your bank is a good one:

http://www.sanfranmag.com/story/5-ways-t o-case-a-bank-sort-of

Posted by ContrarianP | Report as abusive

God and RenTech’s black box

Felix Salmon
Jun 25, 2010 00:24 UTC

Does Renaissance Technologies — arguably the most successful hedge fund in the history of the world — know why it makes as much money as it does? A couple of weeks ago, I thought that it did, after reading a piece about RenTech’s Robert Frey in the FT. One of the fund’s four principles, he said, was rationality – “it can’t just be statistically valid”. You have to employ reason to identify a statistically significant but spurious pattern — which meant, I thought, that RenTech had a common-sense test: it wouldn’t enter into a strategy without having some kind of grip on why that strategy should work.

Ryan Avent, at the Economist, was unconvinced:

According to Sebastian Mallaby’s new hedge fund history, “More Money Than God”, the willingness to explore unexplained correlations is what sets Renaissance apart from other quant funds… The firm’s advantage is in its willingness to trade what doesn’t necessarily make sense…

Mr Frey is obviously in a better position than I am to know whether Renaissance does or does not require some theoretical model to be in place before trading on a signal can begin. But having the guts to trade relationships no one else can understand or explain would be one way to consistently beat the market over a period of two decades.

Scott Locklin, for one, thinks that’s ridiculous. Trading a relationship no one can understand or explain, he says, is “how you lose all your money in two weeks”. True scientists, says Locklin, of the type hired by RenTech, are trained to look for actual rather than spurious correlations, and to be able to tell the difference.

So, who’s right? Sebastian Mallaby would seem to be the best person to ask, here, since he spent a lot of time with RenTech types researching his doorstop of a book. So I asked him, and got this back:

The answer is that it is willing to trade stuff in the absence of intuitive explanations, and that this sets it apart from DE Shaw. But RenTech feels more comfortable when there is an intuitive explanation because that reduces the danger of data fitting errors.

Mallaby even quotes RenTech’s Bob Mercer to that effect in the book (page 302, for those of you following along at home):

“If somebody came with a theory about how the phases of Venus influence markets, we would want a lot of evidence….(But) some signals that make no intuitive sense do indeed work…the signals that we have been trading without interruption for fifteen years make no sense. Otherwise someone else would have found them.”

It’s weird, but if you believe Mallaby and Mercer, it’s true: somehow RenTech discovered a secret formula for making money. Follow the rules it spits out, and you’ll be rich, even though the formula makes no visible sense at all.

Does such a formula really exist? Is it as simple as finding it, keeping it secret, and doing whatever it tells you to do? Does that explain why the Medallion fund continues to do so well, even as RenTech’s other funds seem much more likely to come unstuck? And if such a formula does exist, would there have to be some deep reason why it works, which is just too recondite for mere mortals to work out? We’re entering the realm of the metaphysical here, which might be condign for a book entitled “More Money than God”. Maybe God — and only God — knows why James Simons is so rich, and maybe his formula is the modern-day equivalent of the Holy Grail.


I dunno if you read old comments, but Rich Jim and company used to be codebreakers. Yeah, you could call weird stuff a “potentially spurious correlation that makes no sense.” Or you could know something about information theory and code breaking, and know that your spurious correlation is statistically certainly telling you something about some underlying market mechanism you don’t quite understand. That’s more or less my point about their trading weird patterns. They probably don’t have economic models for what is happening, but I guarantee they have sound probabilistic models.

Not that I’d know anything about this and stuff.

Posted by slocklin | Report as abusive

Short-seller demonization watch, Tom Matzzie edition

Felix Salmon
Jun 24, 2010 23:29 UTC

Tom Matzzie, for reasons which are very unclear, has decided that he’s going to wage a media campaign against Steve Eisman — and, by implication, in favor of the predatory higher-education scam artists that Eisman is looking to cut down to size. Matzzie is a credible left-wing campaigner, which makes his current bedfellows very odd ones: he’s essentially defending companies which take billions of dollars from the government and put the onus to repay that money onto “students” who are very unlikely to even graduate, let alone get the kind of job which will let them repay the loan. Eisman’s testimony to the Senate today is compelling stuff, and it’s backed up by the testimony of the OIG’s Kathleen Tighe; judging by today’s hearing, no one outside the for-profit education industry, bar Matzzie, is remotely willing to step up to defend it.

Yet Matzzie insists on trying to do so, on the grounds that Eisman is short the sector:

Steven Eisman wants the regulation of higher education to get rich — not because it will be good for students or the schools. And now this hedge fund manager is leveraging a U.S. Senate hearing to take more short-selling profits.

A short-seller investor will always have a conflict of interest when speaking about a set of companies and that is why it is inappropriate to invite Eisman as an expert witness. He will typically always want to portray those companies in a bad light in order to generate news that would drive down their stock prices. His financial conflict of interest biases his testimony beyond redemption.

Could the committee possibly expect unbiased testimony? No. Eisman has staked a fortune on government action against higher education companies.

A conflict of interest happens when you have two different interests which are in conflict with each other: I see no conflict of interest at all here. To the contrary, I see an alignment of interests: Eisman has realized that if the government does the right thing, then he’ll make money, and so he’s more than happy to show the government everything he’s been able to find out about these companies.

It’s not the job of Senate committees to take testimony only from the “unbiased”, were such people to exist. It’s their job, rather, to find out the truth of the matter and act on it. And if Eisman can help them to uncover that truth, so much the better. After all, it’s not as though Eisman is trying to pull one over on the Senate: he’s entirely open and honest about his short position, and indeed it’s the promise of profits on that position which has allowed him to research the sector in such depth.

Eisman puts it like this:

Until recently, I thought that there would never again be an opportunity to be involved with an industry as socially destructive as the subprime mortgage industry. I was wrong. The For-Profit Education Industry has proven equal to the task.

He’s taking on that industry head-on, in public — which is a dangerous thing to do, as a long history of short sellers before him can testify. I hope this story turns out well for him. And I hope that at some point it will become more obvious why Matzzie is leading the charge against him. I can’t find any record of Matzzie having railed against short sellers in the past; I wonder why he suddenly cares so much about the issue now.


HBC said:

“It’s unlikely that the Senate will lift a finger to impede the malfeasance of Sallie Mae and the united edufraud squad. It was however remarkable that they sat still for what Eisner had to say, and at least somebody said it. They weren’t likely to invite or listen to Ralph Nader, who has absolutely zero conflict of interest… were they? ”

I reiterate, it is NOT about Eisman’s bias! Of course he is biased. It is about manipulation of the stock market and public trust in the Senate. The Senate is bound to never be seen to further self interest or improperly further another person’s or entity’s private interests.

I have never denied that what he had to say was important! it is just sad that it had to come from that source. And if you had read anything I said, I never denied Eiman’s the points! the fact remains his appearance is in his favour and self interest, NOT the students or education or for the good schools.

HBC< There were regulatory changes even before the hearings began, which hopefully do only good things and will not hurt the good schools.

And KID you tire me thinking I didn't read anything before I spoke and that I am uninformed! As a parent I am thinking like one. I did read. AT least I am not just a talking head, spewing a dislike and calling Mattzie a dbag which is really all this thread is about.

(admit it boys… you give a flying crap about education or the schools or you would see his appearance could taint the proceedings and the outcome in a negative way and Kid you said you were done with me many spews ago … what if Eisman isn't entirely correct? then it is ok to destroy them all? I see…)

Posted by hsvkitty | Report as abusive

The next Icelandic banking crisis

Felix Salmon
Jun 24, 2010 19:34 UTC

How many times can Iceland’s banks fail? More than once, it would seem, in the wake of an important ruling by Iceland’s Supreme Court. It regards loans which were disbursed in Icelandic kronur but linked to either Swiss francs or the Japanese yen; the court has now ruled that the indexing is illegal, and that the borrowers need only to repay the loans at their initial interest rate in kronur.

The decision is popular in Iceland, as you might expect: these loans were in many cases the only ones available for big-ticket items like cars, and attempts to defend the banks tend to fall on deaf ears. Here’s Alda Sigmundsdottir:

It is interesting to me that these comments come pretty much exclusively from outside Iceland. I have not heard one single Icelander express this opinion. Personally, I strongly disagree with this view. I did not take out a currency basket loan and have not been subject to the same nightmare as those who did; however, not for a moment do I begrudge those people this ruling, even if it means I have to carry some of that cost indirectly and even though I still have my mortgage, which is indexed to the rate of inflation, and for which there appears to be no correction in sight, unlike that for the currency basket loans.

It’s important to note here that Iceland’s big three (new) banks are now owned by the creditors of the big three (old) banks, including RBS, Credit Agricole, and Deka. So the first-order effects of this judgment are that Icelandic citizens are the winners, while foreign banks are the losers. In the wake of a financial crisis like the one Iceland has just seen, it’s hard to argue with that kind of calculus.

Of course, it’s never exactly a good thing for a nation’s banks to become insolvent, although Iceland’s politicians don’t seem to be able to say even that these days. The result is something close to chaos. A correspondent in the Icelandic financial industry emails me:

The central bank governor has come under a lot of pressure after stating the blindingly obvious yesterday that if the foreign loans are “rewound” back to the original amount then the banks will be in big trouble. The minister of economic affairs (who is incidentally not a politician but a former econ/business professor) is allegedly under a lot of pressure as well and might be replaced after agreeing with the CB governor. Apparently they aren’t agreeing enough with the public who are somewhere between the “let the banks burn” department and the aisle of “everyone in charge hates the public”. At the same time people haven’t really given any thought to the fact that when the consumer protection agency was asked why it hadn’t looked into the possibility of illegality at the time of origination they claim that people weren’t complaining at the time, they were happy with these loans so nothing was done.

The latest move came this morning from the “Association of creditors” who advised people to withdraw their deposits from the banks before the CB governor and minister of banking’s predictions materialized. The connection between an association of people who took loans and people who have deposits hasn’t yet been explained. Among all the turbulence the one thing that you can predict with some conviction is that comments made by any lobby group, politician, or “public” figure is going to be both baffling and flawed. Looks like the road to recovery is going to be a long one.

It’s pretty irresponsible to advocate for a bank run — although since there are only really three banks in Iceland, it’s not obvious what depositors are supposed to do with their money after they’ve withdrawn it. Buy lots of smoked fish and store it in the garden shed, perhaps?

What’s abundantly clear is that Iceland’s banks have failed it to the point at which they have lost the trust of the public — and that the government, including the judiciary, is doing a good job of representing the will of the people. Given that state of affairs, which seems unlikely to change, the problems facing the Icelandic economy are even greater than many think: it’s hard for economies to grow when they have a dysfunctional banking system lacking basic trust in institutions. Especially when no one seems to be expending any effort on finding a solution to that problem.


It is not getting better.
You can see here ,at a proetst yesterday ,when the police arrested one protester in front of the govermnet building.


And Bjork , is comlainig to parliement also

Posted by ander | Report as abusive

Why do minimum parking requirements still exist?

Felix Salmon
Jun 24, 2010 18:09 UTC

Tom Vanderbilt has a great piece in Slate on the high cost of free parking:

Minimum parking requirements are based on a form of “circular logic,” in which planners estimate parking need by looking at the highest levels of parking demand at suburban locations with free parking and no transit options. As a result, the space devoted to cars often exceeds the space devoted to humans (one study found mall parking lots were 20 percent bigger than the buildings they serviced), and the country is awash in a surplus of parking supply. In Tippecanoe County, Ind., for example, a group of Purdue University researchers noted, “[I]f all of the vehicles in the county were removed from garages, driveways, and all of the roads and residential streets and they were parked in parking lots at the same time, there would still be 83,000 unused spaces throughout the county.” And as Shoup argues, there is nothing free about this parking—everyone, even those who don’t drive, pays for it in one form or another, whether the invisible parking surcharge is built into retail prices or the various costs associated with parking-lot storm-water runoff.

For me the biggest and most invidious cost of parking lots is also the most difficult to measure: the way that they kill any attempt at decent architecture, both on the level of individual buildings and on the level of city development more broadly. Your favorite buildings, your favorite cities, and your favorite vacation destinations all have one thing in common: a distinct absence of massive parking lots. So why are these things mandated by zoning regulations across the U.S.? It makes precious little sense, and it’s high time that minimum parking requirements died a long-overdue death.

What makes the whole thing even weirder is that there is no obvious powerful lobby to agitate for the perpetuation of these requirements. Developers would love to be able to determine for themselves how much parking was optimal, and it’s not like Big Parking Lot has a massive presence in Washington; even the automakers don’t really have much of a dog in this fight. So why are these regulations so very persistent?


>Your favorite buildings, your favorite cities, and your favorite vacation destinations all have one thing in common: a distinct absence of massive parking lots.

Sort of. Isn’t Las Vegas and Orlando the top vacation destinations for Americans?

Orlando- Parking lots galore.
Las Vegas- parking structures galore

Posted by dtc | Report as abusive

Summers clams up

Felix Salmon
Jun 24, 2010 17:45 UTC

Caren Bohan has a 3,500-word profile of Larry Summers, in which she gets a lot of Washington insiders to talk about him on the record. The one person who doesn’t do much in the way of talking is Summers himself, who gets quoted all of three times; none of the quotes contains anything substantive. “If you want to do a profile, fine”, he seems to be saying. “Just don’t expect me to say anything”.

But now seems to be the time when key members of the administration’s economic team need to decide whether they’re staying or going — and a clear statement from Summers that he wants to stay is conspicuous by its absence. Last month, David Warsh laid out all the good reasons for him not to. For one thing, according to Harvard’s academic leave policy, Summers needs to return by January 2011. If he doesn’t he’ll lose his coveted position as University Professor — complete with complete freedom as to what and where he teaches, plus the ability to work one day a week for DE Shaw or anybody else, for which he could probably easily continue to pull down somewhere in the region of $8 million a year.

It’s also now clear that Obama will never give Summers either of the jobs he really wants: Treasury Secretary or Fed Chairman. So he’ll have to make do with his ill-defined current role, which gives him lots of face time with a president he genuinely admires. It’s hard to say no to Obama, but Summers is more than capable of making his dissatisfaction known within the administration when he doesn’t get his way:

First, according to informed sources, Summers asked to play golf with the president, which he did four weeks later on September 27. The economic adviser also huffed that he desired Cabinet status, an upgrade that Emanuel granted. Summers got walk-in privileges to Cabinet and other high-level meetings, for example, and he strode among the Cabinet officers who witnessed Obama’s State of the Union address. In addition, the former Harvard University president sought a personal car and driver, which happens to be a privilege that the head of the nation’s central bank enjoys. The chief of staff initially said yes, only to discover that that perk simply does not exist in the White House.

The job of the White House economic team has changed, now: we’re out of the immediate-crisis zone, and into the long hard slog back towards a world of lower deficits and economic growth driven by the private sector rather than by government. It’s painful, unrewarding work. My guess is that Summers will continue to do it if Obama manages to butter him up enough — but that for the time being he’s keeping his options open.


Yeah. In Marlon Brando’s immortal words: “Pass the butter.” But which one is Brando? Summers or Obama?

Posted by lambertstrether | Report as abusive

What’s with older Americans and credit card debt?

Felix Salmon
Jun 24, 2010 16:36 UTC

Lending Club just commissioned a new debt survey from Harris, which has some interesting results: (Update: See below, maybe they’re not interesting after all, and they’re just the result of a badly-worded survey).

Most Americans have some debt (76 percent). Among those who have debt other than a home mortgage, adults 55 and older are more likely to have credit card debt (73 percent) than younger adults 18-34 (60 percent)…

Of those who have debt, younger adults are more likely to have debt other than a home mortgage, with 93 percent of adults ages 18-34 reporting debt other than a home mortgage compared to 83 percent of adults ages 55 and above.

Older adults, however, are more likely to carry credit card debt, with 73 percent of those 55 and older who have debt besides a home mortgage reporting they have credit card debt, compared to 60 percent of their 18-34 year old counterparts.

I’m not entirely sure what this means, but it seems to imply that the young are more financially sensible than the old. It makes sense that 93% of 18-34 year-olds have some kind of non-mortgage debt, given the need for student loans and car loans. But only 60% run a balance on their credit cards, compared to 73% of Americans aged over 55. (Update: See the second update below, this isn’t really true either. Lesson: don’t trust press releases regarding survey results!)

Why are older Americans disproportionately likely to be racking up credit-card debt? I can see why Lending Club commissioned this survey: it’s pretty much a no-brainer for these people to refinance their credit card balance with a plain-vanilla unsecured loan, but precious few of them seem to do so. And I daresay that if you looked closer, a lot of them could even pay off their credit card debt with savings, and aren’t doing so.

Or is there something I’m missing, here? Is there any good reason why a whopping 73% of older Americans should be running credit-card balances?

Update: Many thanks to Beer_numbers, in the comments, who suspected that there might be something fishy going on in the survey: what if it captured people who had credit cards, but not credit card debt? If you pay off your credit card in full every month, you use your card as a transactional payments device, you never pay interest, and it doesn’t make much sense to say that you have credit card debt. Certainly you can’t save any money by refinancing that debt into something with a lower interest rate.

So, what exactly did the survey ask? It was a multiple-choice question:

Which of the following types of debt (aside from a home mortgage), if any, do you currently have? Please select all that apply.

The options were Credit card(s); Auto loan(s); Student loan(s); Health/medical; Major purchases (eg home appliances, entertainment systems); Other; and “I do not have any other debt besides a home mortgage”. If you have a credit card which you pay off every month, how are you meant to answer that question? Do you have a credit card? Yes. So it’s easy to imagine that you’d say yes to the do-you-have-a-credit-card question, even if you don’t, in reality, have credit card debt.

This was, to me, an atrociously badly-worded question. And as such, I think it’s probably best to discount the whole survey, and conclude very little from it. Shame on Lending Club and Harris.

Update 2: I just got this statement from Rob Garcia of Lending Club:

Beer_numbers is correct in pointing out that the numbers seem high. While the numbers do sound high, unfortunately for America, they are accurate and are consistent with other surveys in the market.

The exact question we asked was:
“Which of the following types of debt (aside from a home mortgage), if any, do you currently have? Please select all that apply.”

We do believe that the 44% of consumers who selected “credit card debt” as one of the answers to this question are indicating debt that they are carrying month to month. If they were simply indicating that whether they had used credit cards as a payment method then the number would have been much higher.

Where did the 44% number come from, since it’s not anywhere to be seen in the official press release? It turns out that if you look closely, the survey doesn’t say that 73% of older Americans have credit card debt; it says that 73% of older Americans who have debt other than a home mortgage have credit card debt. Chalk that one up to a badly-worded press release.

The actual numbers: of 2,401 respondents, 1,831 had debt; and of them, 1,068 had credit-card debt. For Americans 55 and older, there were 804 respondents, of whom 537 had debt, and 329 had credit-card debt. That’s 41% of the total. For Americans between 18 and 34, there were 719 respondents, of whom 553 had debt (that’s 77%, not 93%), and of whom 307 had credit card debt. That’s 38% of the total. The difference between 38% and 41%, I think, is not particularly significant.

Or maybe I have my denominator wrong, I can’t work out whether I’m meant to use the “weighted base” or the “unweighted base”. Here’s a PDF of the results, have at it. Where’s Nate Silver when you need him?


Also agree with beer#s. The press release didn’t specify what was meant by “carry credit card debt.” We know that historically the percentage of convenience users who do not roll balances and pay interest runs 30-40%. I think it is likely that older cardholders are more likely to have higher income and assets than younger borrowers, and more likely to be convenience users.

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