As someone that had a similar experience with Transferwise (actually also a 5k transfer), I'll give you a piece of advice: sue them.
In the US, you can file a small claims easily and without a lawyer. Some jurisdictions will even let you file 100% online, and the filing fees are very low.
After 2 months of Transferwises' excuses, they wired the full amount + legal fees to my account within a few hours of them receiving the notice.
Depends on the jurisdiction. In many countries, yes there are insurance requirements. Even in ones where there aren't, most vessels owned by larger companies carry insurance for the same reason anyone else does.
On the other hand, since oceangoing ships are (mostly) regulated by the countries they're registered in, which is frequently a regulation-light jurisdiction like Panama, Liberia, or the Marshall Islands - there are a surprising number of situations where the owner of the ship just completely disappears and the ship is left to rot.
One of the most famous recent examples of this was the ship involved in the Beirut port explosion this year. After being impounded for being unseaworthy, it rotted at its moorings and eventually capsized in the Beirut harbor.
A quick trip through developing-country ports on Google Earth will have quite a few ships like this.
This is definitely a super interesting company/approach - thanks for the link! I'm definitely curious as to whether they're actually using things like neural nets (or any other more-sophisticated technical techniques). The traditional problem is that those models aren't explainable, and potentially have hidden biases in them, so I'd be really curious what their approach is.
Interesting. Overall, I agree with everyone else - Affirm looks like a healthy company.
Major takeaways:
1.5% write-off rate for their jan 2020 vintage is very healthy - comparable to the long-term trend for unsecured superprime consumer debt. Given the (I suspect) lower average creditworthiness of Affirm customers, this is a great number. I'd be curious to see their long-term trend for same-age vintages, however. In consumer credit it's well known that all the stimulus support in 2020 has significantly depressed defaults. It would be interesting to see if this is a fluke, or if this is actually what their charge-off rate actually looks like in a normal environment/part of a bigger trend.
I'm a little skeptical of their claim to use ML & build a data moat for significantly better underwriting decisions. Consumer credit laws in the US so severely restrict what you can use for credit scoring purposes that better underwriting through data is basically a lost cause, absent some specific customer segment that has special credit situations.
Finally, as others have noted, 30% of revenue just from Peloton is an enormous number.
It definitely depends heavily on the market you're living in - some are very heavily subsidized, others are not.
As a counterpoint, I recently had a $30 off promotion for uber eats. Ordered a couple of hamburgers, and the food tab came to $29 - which was zeroed out after the promotion.
Delivery fee + service fee + tip meant I still ended up paying $18 for the service. I can't imagine I'd ever be a buyer at the full price.
This is a little different than what Lehman got in trouble for in the US.
During the financial crisis, the core issue is that banks were making loans off their own balance sheet with reserves too small to cover the losses that eventually occurred. In other words, when borrowers defaulted the bank itself lost money. This made them insolvent and caused the whole collapse.
In the case of Ant on the other hand, they essentially function as a lead generation platform for banks - currently 98% of "their loans" aren't really theirs at all, but rather are funded by their partner banks; if the loan defaults, it's the partner bank's problem, not Ant's.
The reason this change is such a big deal is that forcing Ant to fund 30% of its own loans will require raising an absolutely enormous amount of fairly expensive capital, driving up costs and significantly decreasing the value of the company.
Basically, when you purchase something with a credit card the bank fronts the money to the merchant and bills you for purchases later. If a transaction is fraudulent, either the merchant or the credit card company take the hit, and you're never out any money, even temporarily. For credit cards the market has settled on 0 consumer fraud liability pretty much no matter the circumstances (and very hassle-free too).
On the other hand, with debit cards money is withdrawn from your account when a fraudulent purchase is made, and you need to wait for your bank to complete an investigation to reimburse you. They also tend to have rather stricter reporting standards in that if you don't report fraud promptly, you might be stuck with (some) liability.
Either way you'll typically get your money back, but the hassle is much reduced with credit cards.
Interestingly, this is pretty much the split we've seen regarding terrorist hostage-taking in North Africa. While European governments have generally paid ransoms for the return of their citizens, the US Government steadfastly refuses to pay.
In early years, this generally led to better outcomes for European citizens, but as time wore on, it's come to a point where the terrorists actively avoid kidnapping Americans and prefer Europeans. Assuming the these types of hacks are explicitly targeted, I imagine we'd see a similar dynamic play out.
Your read is exactly correct - the frequent flyer costs aren't 'fully loaded', and accounting rules in the US have changed to more fully account for these costs.
That said, the logic behind structuring the rules this way isn't completely crazy. Essentially, award seats are intended to be seats that the airline cannot sell to paying passengers. Since those seats would otherwise earn the airline nothing, accounting for them on a strictly 'found-money' basis makes some sense.
This sometimes creates amusing situations when new loyalty program managers look at their margins and conclude massive sales make sense. For one example, see below - Garuda selling ~$20,000 first class tickets for ~$200 worth of points. On an internal accounting basis, this was still profitable for the program!
The airlines have successfully squeezed banks a good deal more than that! At this point all the US-domestic carriers are charging their bank partners over 1 US cent per point.
At least on an accounting basis though, airlines do actually make remarkable profits on their frequent flyer programs. In 2015 or so United disclosed their FFP business was earning ~67% margins, as against ~2% for the rest of the airline. I don't think they have disclosed more recent numbers, but margins are probably higher now.
That said, these profits are in part an accounting artifact. This is because up until very recently airline accounting rules only required carriers to realize the marginal cost of carrying a passenger when frequent flyer miles were redeemed. Since the marginal cost of a passenger is only ~$20 or so, this yields great margins.
These days however the overwhelming majority of airline miles are awarded for credit card spending rather than actually flying, though. As your second article notes, for United the split is 70/30 or so.
That is an excellent question - and one that I don't know the answer to. It's something we're looking into.
Incidentally though, the FAA minimum liability coverage for a widebody is $750 million, and the policies I've seen do allow for cargo onboard (though not passengers).
More complicated than buying a used car, but not horrible. The biggest issue is getting seller alignment.
On the cash front, ferry flights to the US are the biggest expense by far. A 777 burns ~$10,000 in fuel per hour, so positioning from (say) Asia to a boneyard in California adds up quickly... with crew, ferry insurance, landing fees & sundries you end up at $200-$250k. Parking runs around $3-5k per month in the desert, too.
Afraid no link - I'm actually in the process of buying 777s right now at a bit less than that (and then hopefully flipping for 5 apiece). Fresh out of a heavy C check, too.
But if you're curious re:prices, you can call the dealer listed on Controller.com as selling a 777. He's actually got several for sale in that neighborhood (and is super friendly, too - Eric).
They're worth a good bit less than single-digit millions. For context, you can pick up an airworthy 15 year old 777 right now for ~5 million dollars.
Last time I spoke with a widebody broker a few months ago, an old 747 with no equipment was a smidge less than $100k. Though with COVID, airworthy 747 freighters are 30-50 million....
Well, the liquid ban was added because some terrorists were caught trying to smuggle liquid binary explosives onto airplanes (with the plan to mix them in-air, then detonate them). Some airports are repealing the liquid ban now that they've developed screening machines that can accurately identify the contents of water bottles etc.
It's a bit nebulous, but as a rule high-annual-fee/interest rate rewards cards are built around this model; the higher the annual fee, the less interest income a bank expects to earn.
Issuers tend to specialize, too. For instance, banks like Barclays, Chase and Amex only (intentionally) target prime customers. Chase has been known to fire customers that suddenly start carrying significant balances on their cards, for instance.
On the other hand, banks like Capital One and Credit One explicitly target subprime customers and make the vast majority of their income from interest. Whereas Amex makes 90% of their card income from annual fees/interchange, for C1 it's more like 90% interest/10% interchange. Chase is like 65/35 Interchange/interest, for comparison.
For Amex, the simplest rule is that any card named after a color (Amex Gold, Amex Green, Amex Platinum etc) doesn't charge interest.
Oh - and the Amex charge cards don't actually have no limit. They do have a line, it's just hidden (and somewhat larger than most credit limits). Amex actually has a 'check my spending power' tool on their website where you can plug in a hypothetical purchase and it'll tell you if they would (hypothetically) approve it.
In the US, you can file a small claims easily and without a lawyer. Some jurisdictions will even let you file 100% online, and the filing fees are very low.
After 2 months of Transferwises' excuses, they wired the full amount + legal fees to my account within a few hours of them receiving the notice.