With the economic downturn, rising unemployment, decline in house prices, and limited ability for consumers to continue using their homes as an ATM; credit card debt is poised to be the next disaster in the financial sector with bearish outlooks for credit lenders Capital One (COF), Discover (DFS), and American Express (AXP). Credit card processors such as Visa (V) and MasterCard (MA) have also declined with the overall market, but are leveraged to the volume of transactions with debit and credit cards rather than
Discover Card is being hurt by the weak consumer and credit crunch just like all the other financials. Unfortunately for it, it lacks the same brand strength of V, MA, and AXP.
Discover Financial Services operates as a credit card issuer and electronic payment services company primarily in the United States. The company offers Discover Card-branded credit cards to individuals and small businesses over Discover’s signature card network; and other consumer products and services, including prepaid and other consumer lending and deposit products through the Discover Bank subsidiary. Its payments businesses consist of Discover Network, a comprehensive payments network that supports multiple card products, issuers, and processors; PULSE, an ATM/debit network; and Diners...
Discover Financial Services has been gaining market share, most recently though its purchase of Diners Club. They are also sueing Visa and MC for blocking their marketshare. I think that Discover will grow by leaps and bounds in the coming couple years... Maybe we could see $100 a share in a couple years!
I mentioned in October that I planned to buy puts on Discover (DFS) because of current and impending credit card defaults. The stock hovered between around $10 and $12.50 before dropping below $7. I thought I missed my opportunity. (Why am I trying to time the buying of puts? Although I think DFS will eventually go to $0, July is the farthest out put available right now and I don't think it'll happen that soon. I don't short sell because I think it's riskier than puts, and the government loves to change the rules). Now that DFS is again above $10, I have another chance. If American Express
I mentioned in October that I planned to buy puts on Discover (DFS) because of current and impending credit card defaults. The stock hovered between around $10 and $12.50 before dropping below $7. I thought I missed my opportunity. (Why am I trying to time the buying of puts? Although I think DFS will eventually go to $0, July is the farthest out put available right now and I don't think it'll happen that soon. I don't short sell because I think it's riskier than puts, and the government loves to change the rules). Now that DFS is again above $10, I have another chance. If American Express
Now I know we would all love to look up in the sky and see Superman flying in to save the day but what we need is a dose of reality to face these markets. And instead of relying on one person which is what Wall Street usually hopes for, the President - elect may be taking the best approach of them all. With most people completely discounting the words of the current president, George Bush, everyone is turning to the guy who isn't the current president to make presidential decisions before he hits the office. Obama is going against the grain and this must be his motto at this point. The prev...
One trend we point to for 2009 is the wave of personal bankruptcies that shall awash Americans; we've written story after story after story about how people are now hiding out in their last option: credit cards - as all other places to stash debt have been shut off or used up. Ironically the credit card companies successfully lobbied to make personal bankruptcies much harder which led to a rash of filings a few (2?) years ago before the rules changed. Now, we will watch in great irony in 2009-2010 as the politicians who were bought and paid off bring up the credit card company executives ...
U.S. stock futures were higher Tuesday morning at the start of the election day. Overseas, markets also edged higher ahead of the U.S. presidential election, while oil prices declined further to below $64 a barrel. While it is uncertain yet if any of the candidates would help boost sentime...
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U.S. stock futures were higher Tuesday morning at the start of the election day. Overseas, markets also 
