30 cents per dollar reserved. Bonds sold anyway.

I said yes once.

Not to the timeshare. To the presentation. Ninety minutes, they said, and I'd get breakfast and two tickets to a boat tour.

It ran past three hours. There was a whiteboard. A man worked out what I would spend on hotel rooms over thirty years. When I said no, a second man came over. Then a third.

I walked out without buying. Plenty of people don't.

Around 10 million American households own one. The average buyer paid $24,740 last year, using the industry's own figures from ARDA and Ernst & Young. Most of them borrowed to do it.

That's the part I've been reading about all month.

The company that sells you the week is usually the company that lends you the money. And one of those lenders has now told the SEC what it thinks its own loans are worth.

Hilton Grand Vacations runs the largest book of them. On June 30 it held $3.97 billion of loans it wrote itself. Against those loans it has set aside $1.195 billion for expected losses.

That works out to 30.1 cents of every dollar lent.

The company doesn't conceal it. The figure sits in the quarterly filing from July. It has climbed in every reporting period since the end of 2022.

It works out like this. The lender charges a weighted-average 14.4%. Then it books, on the day the loan is written, the assumption that roughly a third of the money never comes back.

Both sit in the same document.

I have no idea when that matters. A lender can carry a heavy reserve for years and nothing happens.

But one number sits oddly beside it. Over the same six months, the company raised $1.469 billion by borrowing against those loans in the bond market. Investors took all of it.

The lender says one thing about these borrowers. The bond market says another. The distance between the two is what I want to look at.

This connects directly to the gap between what the timeshare lenders say about their borrowers and what the bond market charges to fund them. There is a reason the two disagree, and it is written into the deals.

When a timeshare loan is packaged into a bond, the seller usually keeps the right to take it back. If the borrower stops paying, the sponsor swaps in a healthy loan or buys the bad one out at its outstanding principal. Moody's said as much when it rated a Holiday Inn Club Vacations deal last year: the sellers can repurchase defaulted loans, which lifts the recovery rate and strengthens the credit of the notes.

Hilton Grand Vacations describes the same arrangement in its own quarterly filing. A footnote to its loss provision says the figure is stated net of activity related to the repurchase of defaulted receivables.

So the bond pools stay tidy by construction. Defaults leave the pool and land back on the sponsor's balance sheet.

Investors have started to notice anyway. GlobalCapital reported in May that buyers were pressing sponsors on underwriting standards as delinquencies rose, with deals from the 2025 vintage performing worse than any since 2021.

The bonds are not lying. They are just describing a pool that gets cleaned every month by someone else.

And here's where it spreads. The loan is only half of what an owner signs up for.

The other half is the maintenance fee, billed every year whether the owner travels or not. Ernst & Young, working for the industry association, put the average at about $1,480 for a one-week interval, up 36% since 2020.

Nothing caps it. California's attorney general puts the problem in one line for consumers: the fees can rise each year without a limit, so the timeshare can quickly become unaffordable.

Now the other side of the ledger. Weeks routinely change hands on resale sites for a dollar, and many find no buyer at all. So the yearly bill rises against an asset with no market price.

That combination is what turns a borrower into a defaulter. Walking away from a loan is one decision. Walking away from a permanent bill on something you cannot sell is a different one, and people make it.

The industry sold $10.7 billion of these contracts last year across 1,434 American resorts. So the pool of people facing that decision keeps growing.

Meanwhile, look at what the seller has done with its cash.

At the end of 2024 Hilton Grand Vacations carried $1.895 billion of total equity. By June 30 this year it carried $1.258 billion. Retained earnings went from a positive $352 million to an accumulated deficit of $101 million over the same stretch.

Share count fell from 97 million to 78 million. That is a fifth of the company retired in eighteen months.

Buybacks shrink equity by design, so the decline alone proves nothing. What matters is the earnings underneath. In the second quarter the company earned $12 million for stockholders, against $25 million a year earlier.

Twelve million in profit. A hundred and fifty million in buybacks. One quarter.

Three more things worth keeping track of this week.

One year of mortgages keeps behaving worse than every year around it. Morningstar DBRS published a report on Wednesday showing that loans written in 2023 still run hot. Prime mortgage bonds from that vintage carry a weighted-average delinquency rate of 3.01% and non-QM deals 10.29%, both above where the equivalent 2019 pools sat before the pandemic. Loans written this year show 0.37% and 0.66%. The agency points at the unemployment rate, which stopped falling in 2023 and never went back. One cohort borrowed at the wrong moment and has carried it ever since.

Emerging markets have quietly become a bet on chips. Technology now accounts for more than 45% of the emerging-market index, and Taiwan's market fell over 6% on Wednesday, its worst session since the tariff shock. The Nikkei dropped 4% the same day. An investor who bought an EM fund for diversification away from American technology owns Taiwanese and Korean semiconductors instead. The label says one thing, the holdings say another.

Brazil is cutting rates into one of the highest yields in the world. Its central bank lowered the Selic to 14.00% on August 5, a unanimous quarter point and the fourth straight cut, taking a full percentage point off the 15.00% peak reached last year. The real still pays enough to draw carry money from everywhere. That works beautifully until global yields move, and then it does not. We'll see.

My grandfather almost bought Florida.

Not the state. A quarter-acre of it, from a brochure, on the instalment plan. He never went through with it. A lot of people did.

The company selling it was General Development Corporation, out of Miami. It formed in 1958 and it had the simplest business in America. Buy cow pasture in southwest Florida for about $50 an acre. Cut it into quarter-acre lots. Sell them to working people in Ohio and Michigan and New Jersey for ten dollars down and ten dollars a month.

GDC flew the buyers in. It planned their weekends so there was never a free afternoon to go and price anything else.

Then it lent them the money through its own finance arm and sold the paper onward.

Every lot was appraised. That was the part that mattered. An appraisal works by comparing a property to nearby sales of similar properties. Out in that pasture, the only nearby sales were other GDC lots, sold by GDC, at prices GDC had set the week before.

The land was worth whatever the seller had last charged for it.