CreditCards posts
FeedPosted Nov 6th 2009 5:00PM by Connie Madon (RSS feed)
Filed under: Management, Industry, Market matters, Money and Finance Today, Politics, Headline news, Federal Reserve, Financial Crisis
US Senator Bernie Sanders, independent from Vermont, is known for his straightforward and unbiased positions.
His new legislative proposal is to break up big banks that are deemed "too big to fail." To quote Mr. Sanders: "if an institution is too big to fail, it is too big to exist. We should break them up so they are no longer in a position to bring down our entire economy."
Continue reading Senator Sanders proposes legislation to break up large banks
Posted Nov 4th 2009 8:20AM by Steven Mallas (RSS feed)
Filed under: Earnings reports, American Express (AXP), MasterCard Inc'A' (MA), Visa Inc. (V)
I've said on many occasions that I prefer MasterCard (NYSE: MA) to Visa (NYSE: V). No, I don't mean the card products themselves. I mean the stocks. I believe Visa has better brand equity associated with it, and I think it possesses a little more depth and fundamental prowess. However, both of these companies operate on the same basic economic model: collect fees on transactions, and don't take on loan risk. So, both MasterCard and Visa do offer compelling long-term investment theses.
And, even though there were some negative outlooks on MasterCard's latest earnings report, which was released Tuesday, I have to say that I didn't find the situation too disturbing. Revenues increased only 2%. The top line was inhibited by currency effects, but it's not like we haven't heard that story before. More importantly, MasterCard posted adjusted income of $3.48 per share, representative of a 40% increase over the adjusted income recorded a year ago.
Continue reading Was MasterCard's Q3 good or bad?
Posted Oct 23rd 2009 4:00PM by Jon Ogg (RSS feed)
Filed under: Microsoft (MSFT), Amazon.com (AMZN), Broadcom Corp'A' (BRCM)

This was the day that could have been. Earnings were coming out favorably, yet the data just couldn't support the stocks. There were also trader comments that BofA/Merrill had large sell orders or sell programs throughout the day. It looks like the DJIA even closed out under the 10,000 mark on an unofficial basis.
Here were today's unofficial closing bell levels:
Dow 9,974.75 -106.56 (-1.06%)
S&P 500 1,079.73 -13.18 (-1.21%)
Nasdaq 2,154.47 -10.82 (-0.50%)
Top 10 Analyst CallsTop Day Traders StocksTop Stock/Market RumorsContinue reading Closing Bell: Losing the DJIA 10K (AMZN, BIIB, BRCM, COF, DOLE, MSFT, SPWRA)
Posted Oct 8th 2009 9:00AM by Tom Johansmeyer (RSS feed)
Filed under: Economic data, Recession
Consumer debt levels fell again in August for the seventh month in a row. Facing continued instability in the job market, people are paying down their debt, as a way to protect themselves. Savings are up, and borrowing is down – which could weaken the recovery. Consumer spending accounts for 70% of economic activity in the United States.
Total consumer debt outstanding dropped by $12 billion in August, according to the Federal Reserve, reflecting an annualized rate of 5.8%. Reality outpaced Wall Street's expectations, which were around $10 billion. In July, consumer debt outstanding fell $19 billion (9.1%), which was the largest in hard-dollar terms since 1943 and on a percentage basis since June 1975's 16.3%.
While consumer fear is playing a significant role, as a touchy housing market and dicey job situation leave little to lean on, the banks are also responsible for the change in direction. They aren't lending as easily, with stricter standards limiting the amount of credit available to consumers. You can't spend what you can't borrow.
Continue reading Consumer debt declines for seventh month in a row
Posted Sep 17th 2009 3:00PM by Steven Mallas (RSS feed)
Filed under: Earnings reports, American Express (AXP), MasterCard Inc'A' (MA), Visa Inc. (V)
Discover Financial Services (NYSE: DFS), a credit card company that competes with Visa (NYSE: V), MasterCard (NYSE: MA), and American Express (NYSE: AXP), released earnings for the third quarter on Thursday. The company put analysts to shame by posting a profit instead of a loss according to an article from Reuters.
The projection was for a loss of 12 cents per share. Discover actually made 52 cents per share of profit, once you exclude monies received from an antitrust settlement. Wow, that's what you call being way off the mark! The disparity surprised me, so I went to our very own earnings preview to see what we were reporting for an estimate. Sure enough, it stated the exact same expectation for a loss of 12 cents.
Continue reading Discover surprises analysts in Q3
Posted Jul 24th 2009 6:00PM by Steven Mallas (RSS feed)
Filed under: Earnings reports, American Express (AXP), MasterCard Inc'A' (MA), Visa Inc. (V)
American Express Company (NYSE: AXP), a company that competes with Visa Inc. (NYSE: V), MasterCard Incorporated (NYSE: MA), and Discover Financial Services (NYSE: DFS), issued Q2 results earlier in the week. Earnings from continuing operations dropped very steeply to 9 cents per share. How steeply? Well, the per-share profit lost 84% of its value this time around. However, it might make you feel a little better to know that 18 cents can be added back, since that was the net worth of repurchase activity relating to preferred shares from the U.S. Treasury department. Therefore, American Express took in 27 cents per share from continuing activities. According to this Reuters piece, that number met expectations.
The Reuters article also points out that revenues fell by 18% and that net charge-offs increased. Not a great picture. Reading through the press release, an investor might come away with a feeling of dread. Management mentions the not-so-strong spending by its cardmembers and the fact that loan losses are at historic levels.
Continue reading American Express not on my watch list after second-quarter data
Posted Jul 7th 2009 3:10PM by Connie Madon (RSS feed)
Filed under: Bad news, Money and Finance Today, Economic data, Personal finance, Housing

From this writer's observation, it seems that we have two US economies. One economy is doing just fine. The people in this group have money. They are living well, eating out frequently and buying pretty much what they want.
Then we have a second economy made up of the unemployed and persons living on the edge of disaster. Here we see a growing number of credit card and home equity delinquencies. These people are in a downward spiral. Having lost their jobs, they are using credit cards to survive. This leads to double trouble -- no money and default on credit card debt and home mortgage.
Continue reading Consumer deliquencies are at new highs
Posted Jun 18th 2009 1:50PM by Steven Mallas (RSS feed)
Filed under: Earnings reports, American Express (AXP), MasterCard Inc'A' (MA), Visa Inc. (V)
Discover Financial Services (NYSE:
DFS), a credit-card company that competes with
Visa (NYSE:
V),
MasterCard (NYSE:
MA), and
American Express (NYSE:
AXP), reported earnings for the second quarter. According to this
news summary, Discover beat expectations by posting a loss of $0.18 per share. The market thought that the loss would be as high as $0.29 per share.
If you read the actual press release, you'll see that Discover, on a reported basis, made $0.43 per share. However, we must remember that this profit included an antitrust settlement sourced to Visa and MasterCard. So, once you get rid of that money, you come up with a loss for the quarter.
Continue reading Discover Financial Services beats in Q2 -- buy the stock?
Posted Jun 15th 2009 5:00PM by Alex Salkever (RSS feed)
Filed under: Bad news, American Express (AXP), Economic data, Recession

Not a good day for those looking for green shoots with markets down strongly. And no wonder. Credit card problems with the U.S. consumer are off the hook as
CapitalOne (NYSE:
COF) charge-offs rose to their highest historical level
of 9.91% (via ZeroHedge) and
American Express (NYSE:
AXP)
rose to 10% (via Mish Shedlock).
Higher chargeoffs and retracting credit means further consumer spending retraction. A semi-annual survey by Collier Capital found that
20% of institutional investors plan to downsize their target allocation to private equity, (via PEHub) the largest negative response since the survey started in 2004. An article by two Harvard University economists found that the biggest reason for the
growing income inequality is lagging educational improvement in the American workforce (via VoxEU). There is no quick fix for this so its fairly bad news (although better than blaming the inequality on globalization and some neo-capitalist cabal).
Alex Salkever is Director of Research at Piqqem.com, a stock analysis site powered by the Wisdom of Crowds.Posted May 19th 2009 4:00PM by Jon Ogg (RSS feed)
Filed under: Home Depot (HD), American Express (AXP), Morgan Stanley (MS), Palm Inc (PALM)

We saw at least five directional changes throughout the day in the stock market, so the close still left people wondering what the day really was. The housing data was
weaker than expected, and today marked the first day that the
VIX went under 30. Here are today's unofficial closing bell levels:
Dow 8,476.36 -27.72 (-0.33%)
S&P 500 908.34 -1.37 (-0.15%)
Nasdaq 1,734.54 +2.18 (0.13%)
Top Analyst CallsContinue reading Closing Bell: Bull & Bears look equally confused (APP, AXP, HD, MS, PALM, STT)
Posted May 7th 2009 5:00PM by Joseph Lazzaro (RSS feed)
Filed under: Stocks to Buy

Is there a safe bank stock in this market? Well, given the unprecedented losses on mortgages and mortgage-related assets stemming from the leveraging bubble's excesses: no there isn't. But some banks do offer opportunities for investors who can tolerate high risk, and
Capital One Financial (NYSE:
COF) in one of these.
In general, analysts expect the rate of growth Capital One's loan delinquencies and charge-offs to slow. Further, COF has passed the U.S. Treasury's stress test and will not be required to raise new capital.
Continue reading Capital One Financial: A play for high-risk investors only
Posted Apr 30th 2009 9:30AM by Steven Mallas (RSS feed)
Filed under: Earnings reports, American Express (AXP), MasterCard Inc'A' (MA), Visa Inc. (V)
Visa (NYSE: V), whose colleagues include American Express (NYSE: AXP), MasterCard (NYSE: MA), and Discover Financial Services (NYSE: DFS), reported a Q2 profit on Wednesday that was surprisingly strong. On an adjusted basis, earnings came in at 73 cents per share. Analysts were banking on only 64 cents per share, according to Reuters.
Quite frankly, I can see the disparity between Wall Street's thinking and the ultimate reality. I mean, the economy has been bad (to state the obvious), and people aren't spending as much. This means that they aren't using their credit cards like they used to. Ergo, you might expect Visa to post a lower number.
Continue reading Let's give Visa some credit for its Q2 performance
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