Tag Archives: prime credit

That is at times the boulder we are waiting to see and today Reuters is giving us just that (at https://www.reuters.com/business/finance/us-consumers-with-prime-credit-are-starting-slip-payments-2025-08-25/) with ‘US consumers with prime credit are starting to slip on payments’ was given to us a mere 10 hours ago. And for the non-alert this implies “Borrowers with prime credit scores tend to pose relatively little risk to lenders and creditors. With a prime credit score, you may qualify for more favorable loan or credit card terms, interest rates and reward programs” and when this group starts slipping, the financial world will be a matter of upheaval and that will drown the people of mortgages and other settings. This was a mere matter of time. I saw this danger about a year ago and when tourism fell down I alerted you all that the bed and breakfast people will be up soon. Now consider that California and Florida have at least 200,000 of such arrangements and 10% is now slipping. This implies that over the next year we can see this group grow to about 20%-40%, it all depends on who faithfully set the charters to repay as much as possible. Those who set a second setting towards more beds or a larger stage are truly screwed. Now consider that 20,000 up to 70,000 of these mortgages are now in disarray and likely collapsing on itself. The story gives me the benefit of the doubt. With “Late repayments over 90 days were up 109% year-over-year in the VantageScore superprime segment, while the prime segment posted a 47% increase year-over-year.” Sets the larger stage, where places are dwindling down on tourism, we see the setting change speculatively towards “Late repayments over 90 days were up 183% year-over-year in the VantageScore superprime segment” that point is what I see the point of no return. At that point bank and financial institutions are getting hammered as is the American economy. I reckon that this point will be reached by spring 2026. And with the quote “Even though in absolute terms the increase is modest, it shows that even consumers considered the most credit-healthy are also beginning to see some stress with regard to repayments.” The issue here is that these settings are on a 90% filled charter, as these regions are facing a lapse of over 10%, their food bills are up in the air. As I see it, you cannot gain momentum on an engine running on 100% all the time. This who had their repayments as high as possible and considered the chance of ‘bad weather’ are most likely to sit it out and that is the group that is way to small at present.

As such the expectations I had for America is starting to add up in the real world. As I see it Florida and California are up first, Las Vegas has had a tendency to make due with what they have, but the cracks are showing there too. California was until now one of the most economic viable situations in America, that is now ending and I reckon that after the fires and other altercations Los Angeles will not be a great place to live, crime will overtake the police there in mere months. But that last part is a speculation on my side.

Have a great day, Vancouver is just now coming into Tuesday (as is Los Angeles).