Lilguy

How Much Will Citi's Credit Card Losses Rise with Unemployment?

Oh yeah, credit card debt at Citi, BAC, AmEx, etc., will go bad as unemployment continues to grow. OTOH, I don't think it will have the same effect as mortgage defaults have had, simply because people are unable to leverage their credit cards as much as they leveraged their homes. Still, it's gonna hurt many banks' asset base, reserves, and ultimately lending ability. Another arrow in the chest of an early economic recovery.

AmEx Shares Could Double - Barron's

OK, AmEx has done a marginally better job than the idiots at Visa in cleaning up their accounts--by paying off non-paying clients of all things. NTL, Barron's writing on both of these companies is just the sort of happy talk BS that Tyler Durden (Zero Hedge) loves to shred like yesterday's newspaper. (See his post here on Time magazine's saying the financial crisis is over--seekingalpha.com/artic....) Also, Meredith Whitney--who has been right more times in the last two years than Barron's has been in a decade about the state of the financial sector--clearly sees credit card defaults as the next big wave to strike the banks. If I remember correctly, she put the default number by the end of this year at about $4 billion. And, of course, there will be a next year with unemployment even worse, etc.

Even with mark-to-myth accounting, that's going to be a hard one for banks to cover up in the ol' balance sheet.

Insider Trends in the Financial Sector

Either Karim does not know what he is talking about OR he is deliberately misleading readers of this blog. (He does not disclose whether he has a position in any of the companies he mentions.)

It may be appropriate to pull this contribution from this website.