Frank Rong1

Financials To Resume Meltdown Momentarily

credit cards will not blow up for sure. Jason is very short-sighted. he has no clue how card companies make their money.

seekingalpha.com/artic...

AmEx's Pain Likely Discover's Gain

Morningstar is sure better than most of stock analysts, but I am not a fan of morningstar. they cover too many stocks and try to be expert on everything. Many of their research are flawed.

AmEx's Pain Likely Discover's Gain

Steve,

I have nothing to hide, I am not greencapital, nor MA trader

Five Great Businesses Currently on Sale

BuyLow,

Read it here on AmEX
seekingalpha.com/artic...

Five Great Businesses Currently on Sale

On Legg Mason, Legg Mason has a subsidy name Western asset management, it had invested some of their clients money in SIVs. The Par value is $5.6 Billion dollars, and 2.5 Billion from Citigroup's SIV in Which Citi said it will back. Now we have 3.1 billion LM is liable for it. It has already marked down $600 Million from par, so net exposure is 2.70 B.

Let's say, every mortgage defaulted, and LM can recover 50 cents on a dollar, I expect the max amount of money Legg can lose is 1 Billion, or one year worth of earning.

Five Great Businesses Currently on Sale

I will write an article on why China is a bubble ready to pop.

Five Great Businesses Currently on Sale

Tilut,

China and India are not free market, they are socialist-like woth some market based economy.

China is absolutely a bubble, I have not met a single person who is not bearish on China.

How Much Credit Is Too Much? Where AmEx Went Wrong

no

Card Issuers: Facts and Fictions

Steve,

Let's move on from this topic, and we can find out what happen to these four companies in two or three years.

I wrote two more articles I want to know how you think

How Much Credit Is Too Much? Where AmEx Went Wrong

STEVE,

Look, I careless about the trial, What I like about DFS has nothing to so with the lawsuit. As you know, the Visa bylaws was put in place in 1992, specifically against DFS. The problem DFS had over the years is acceptance, It was accepted far less places than Visa, the reason is simple, like I told you, Visa banned acquiring banks from doing business with DFS. That damage is huge. Who signs up merchant for acceptance? Acquiring banks, there are thousands of places that you can sign up to accept credit cards, but these places will not let you sign up for Discover. Why? because Visa told them, look, if you let merchants to take Discover, we will not let you do business with US again.

Forget about the past, let us look into the future, the truth are self-evident, the question is steve, can you handle the truth?

Discover has 18 million active users, Amex has about 23 millions. Discover card is not used as often as Visa for one simple reason, i.e. too many places did not take Discover Card. That's about to change for good. by early next year, Discover should reach parity, and it can partner up with merchants encourage more usages of Discover card, which means more money for DFS.

Visa on the other hand, will be looking at renew contracts with banks, Banks want to keep more of Visa's share of revenue, or they will move, no royalty there. Imagin sit down with Jamies Dimon or Ken Lewis, they will get very large concessions from them. Ken lewis even threaten to start a new network to compete against Visa.

How Much Credit Is Too Much? Where AmEx Went Wrong

V winner,

I am a value investor, I am not a friend of "GC", I am long DFS since it's the cheapest stock, yet this a great business. I figure DFS can earn about $2.50 a year, so it sells for 6 times normalized earning. comparing to V and MA, they sell for 30 tmes earning.

How Much Credit Is Too Much? Where AmEx Went Wrong

Thank you everyone for your comments, 41% of household make over 150,000 use an Amex card vs. 40%. Discover is a very successful buisness by any measure. Who are the rich? The rich people tend to be smart with their money, getting the best deal and in many ways they are frugal. Lots of "rich people" use Discover Card.

Amex cardholders tend to like to show off. In fact I know many people really broke, wrote bounced checks and carry an Amex Card. Amex has 23 million active users in the US, and I don't think we have that many rich people in US.

Enjoy your weekend,

Frank

How Much Credit Is Too Much? Where AmEx Went Wrong

1. Citi's card issuing business is a tiny part of its whole operation? It's a huge part, it's the only part that's making money for Citi. Citi is the third or fourth largest issuer in US. its card division brought in more than $3 billion in net income in 2007.

2. Discover's credit limits are low because they are targeting the low FICO, high risk sorts of people? Discover has been the best underwriter in the last few years. Discover Card is the hardest one to get.

3. Amex is a still great business, it's a business even an idiot can run it.

Credit Card Breakdown: AmEx Disappoints, as Predicted

I still think Ian cooper is an idiot. Some consumers are cash strapped, most of American are doing just fine. Amex's problem is really Amex's problem. The numbers of people who defaulted on loans at Amex felt to 5 years low, (Amex Master Trust), but the loan balance per default account doubled from three years ago. One possible reason? It juiced up spending volume by giving people too high of credit limits. I don't like Amex for now.

MasterCard and Visa are equally toxic. What's stopping a large card issuers from switching its card to Visa from MasterCard, or vice versa? Prices. Visa, MasterCard and Discover will be in a pricing war to get cardissuers to issue their card.

I like Discover, its earning is still strong. Although charge-offs are picking up recently, that's not a big deal, these losses can be offset by hiking overall rates on customers, or hiking fees on Merchants, and lower funding costs due the lower interest rate cut by the FED

Visa and MasterCard's loyalty lies with large banks. Top 10 banks control almost 70% of the transaction volumes, losing one large client will see the stock price fall off a cliff. That will happen after banks sell their stocks in MasterCard and Visa.

Visa and MasterCard are like emperors without clothes, they don't have any direct relationship with consumers. Their futures are in the hands of large banks.

I wouldn't touch V and MA with a 10 foot pole, these two stocks are the trainwreck waiting to happen, after about 1-2 years from now. People who buy these two stocks don't understand Microeconomics

Why American Express Should Be Ignored

Ian Cooper has no brain, Discover and Amex are far better businesses than Visa and MasterCard. DFS and Amex are getting paid for taking the credit risks. Much more pay than the risks they are taking. Delinquency and Charge-offs are irrelevant, since they can passes along higher loan losses to customers thru high interest rates. MasterCard and Visa on the other hand will have to compete against DFS and AMEX for renting out their networks.