Wednesday, April 7, 2010
Charge Off and Delinquency Rates
In the previous two recessions that the time series covers, it appears the combined delinquency and charge off rates peaked within one quarter after the end of the recession.
The line plot is stacked, so the current combined rate in excess of 10% is the sum of the 3.04% charge off rate and the 7.42% delinquency rate (likewise for the year over year changes).
This might also serve as a supporting argument for why the unemployment rate (and underemployment rate) are now leading indicators...as they will be the primary driver for cure vs write off for the delinquencies (absent the Fed assuming the balance sheet of the entire private sector).
FRB CHGDEL Data Download Page