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Posted
Sep 18 2009, 07:17 AM
by
James Dlugosch
Rating:
Money Blog: Top Stocks Blog - MSN Money
Does Chicken Little ever give up?
The supposed experts will tell you that one of the economic shoes to drop in the near future is massive credit card debt defaults. Persistent unemployment combined with already cash-strapped consumers mean the payments can't keep rolling in. Or so the argument goes.
The market disagrees, judging by the action in credit-card company stocks this year.
Bing: More on Credit Card Companies
I have been watching the action closely since the start of the year. You see, I was one of those experts who believed that credit card companies would be in big trouble during 2009.
I was so convinced of such an outcome that I was willing to speculate on the short side of the market with two names that I thought were particularly vulnerable. Both Capital One (COF) and American Express (AXP) were listed in my Top Stocks to Avoid in 2009
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Posted
Sep 15 2009, 11:41 AM
by
Jim Jubak
Rating:
Money Blog: Top Stocks Blog - MSN Money
 If you've wondered what JPMorgan Chase (JPM), one of the winners in the banking crisis, is going to do to savage more damaged competitors, wonder a little less. On September 14th, the bank announced it is going after American Express (AXP) and its highly profitable high-end card customers.
The effort is called Chase Blueprint, and it's targeted right at those credit card customers who have the income to decide how much of their monthly bill they'll pay off interest-free and how much they'll turn into a monthly balance.
The key to the effort is a software billing program that will allow the holders of the company's 152 million cards to decide which monthly purchases to pay off interest free -- the traditional American Express card model -- and which to finance. Bing: More about Chase Blueprint
Then -- and this is the hook that's designed to appeal to the new fiscally prudent spirit of our times -- Blueprint will tell customers how much interest they would save by paying more than the monthly medium.
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Posted
Aug 10 2009, 09:13 AM
by
Minyanville
Money Blog: Top Stocks Blog - MSN Money
This article was written by Minyanville's Megan Barnett
Since the downfall of Lehman Brothers, many of the biggest Wall Street banks have moved in lock step, as if to assume there is safety in numbers. Everyone took the bailout money at the same time (not that they had much choice), and now everyone wants to pay it back.
But now that the worst is behind the banking industry, or so many of them hope, at least one bank is finding reason to zig when everyone else zags. JPMorgan Chase (JPM) is taking the unusual step of auctioning off the warrants held by the U.S. government, instead of buying them back for a price negotiated privately with Treasury officials, according to the New York Post. The auction will be held in the open market and conducted by the Treasury Department.
(See also: Megan Barnett's "The Small Price to Pay for Financial Fraud")
It's different. It's transparent. It's fair. It makes sense.
It's also suspicious.
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Posted
Jul 24 2009, 05:39 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
Dow 9,000!
The Dow Jones Industrial Average closed above 9,000 for the first time since January. It marks a rally of over 2,500 points, or almost 39%, in a span of a little more than four months, according to The New York Times.
The underlying belief behind Thursday’s nearly 200-point performance is that companies are reporting better-than-expected profits, with companies like Intel (INTC), 3M (MMM) and even Ford (F) beating expectations.
But just as the Dow reached that psychological level, earnings results from Microsoft (MSFT) and American Express (AXP) disappointed investors. Strategists are calling for a correction in the markets, with some economists warning that a failed economic recovery could even lead to a double-dip recession wiping out stock market gains.
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Posted
Jun 19 2009, 06:38 AM
by
James Dlugosch
Rating:
Money Blog: Top Stocks Blog - MSN Money
After reading an article on "7 Stocks for 7 Deadly Sins" and looking at the performance of the stocks on this list, I wondered: Does it pay to be naughty… or nice?
That's why I thought it would be fun to compile a similar list -- this time using the Seven Heavenly Virtues as a guide.
Perhaps by keeping an eye on the performance of the stocks on each list, we'll have an answer to whether or not vice outperforms virtue.
Here are three "virtuous" stocks that just might prove that investing in virtue can ensure positive returns.
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Posted
May 05 2009, 12:13 PM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
 Do credit-card companies actually want to keep their customers? The way some are behaving suggests otherwise.
They're raising interest rates to 20%, in some cases. They're cutting back the spending limits of customers -- even the ones who have paid their bills consistently. They're pulling credit lines too quickly. They're socking people with new fees and raised fees.
In short, they're making life harder on the customers they have to make up for the business they've lost. The debt that credit-card companies are unable to collect is rising and could hit 10% next year, according to Moody's Investors Service. Those massive losses has companies panicking.
Enter the Credit Cardholders Bill of Rights.
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Posted
Apr 17 2009, 09:43 AM
by
James Dlugosch
Rating:
Money Blog: Top Stocks Blog - MSN Money
This post comes from partner site InvestorPlace.com.
As a rational investor, I more or less need to be hit over the head with an opportunity before acting. That is, if I'm going to take action in the market, I do so because of the obvious.
That doesn't mean that I'm a buy-and-hold or buy-and-forget investor. Instead, I simply react to events that only the blind would miss.
Case in point was my urging of investors to sell shares in late September of 2008. In Why It's Not Too Late to Sell, I suggested that all indicators supported lower prices -- not higher prices. In my opinion, reacting to the credit crisis was the most obvious course of action for investors.
The same can be said for why I suggested a long/short absolute return at the start of 2009. The only certainty in the market was volatility. And what was most uncertain was direction.
That's why it made sense to buy undervalued stocks in equal weight to selling short overvalued stocks. So far that approach, depending on how much collateral is used to support the short positions, has generated a double-digit positive return.
Leading the way higher in what was a down market for the first quarter were my Top 10 Stocks to Avoid in 2009. So far the aggregate return of these 10 stocks is -28.5% as of March 31 as compared to -11.7% for the S&P 500.
This performance includes a recommendation to cover four of the ten shorts in February when those positions were down even more than the aggregate return.
What does the future hold for these top stocks to avoid? Here is an update on three of my Top 10 Stocks to Avoid in 2009
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Posted
Mar 13 2009, 10:05 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
 American Express (AXP) and other credit-card companies have been closing accounts lately of customers they think could become unreliable in this economy. The companies want to reduce their risk of defaults, which are hitting all-time highs in the industry.
But credit lines are getting pulled too quickly, says noted financial analyst Meredith Whitney. That's going to hurt consumer confidence, spending and the overall economy in unexpected ways, she argues in The Wall Street Journal. There's about $5 trillion in outstanding credit-card lines in the U.S. (with about $800 billion drawn upon), Whitney says. The way things are going, $2.7 trillion of that will be cut by the end of next year. At first glance, that doesn't seem like a bad thing. People could spend more time saving and less time racking up credit-card debt.
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Posted
Mar 02 2009, 02:14 AM
by
Bernhard Warner and Matthew Yeomans
Rating:
Money Blog: Top Stocks Blog - MSN Money
This post comes from partner site The Big Money.
Six months after first stepping in to save American International Group (AIG), the U.S. government has once again agreed to bail it out. The federal government will offer an additional $30 billion in taxpayer money to AIG just hours before the "battled insurer" is expected to announce a $62 billion loss, the biggest quarterly loss in history. Given that the government already owns nearly 80% of AIG's holding company, it's not surprising that this latest plan will expose U.S. taxpayers to more financial risk. Yesterday's agreement raises the prospect of breaking up the 90-year-old giant into various units and relaxes the stringent loan terms set in September by "wiping out interest in hopes of preserving AIG's value over a longer period," writes the Wall Street Journal. Simply put, with credit-rating agencies on the brink of downgrading AIG's shares, the Treasury felt it had no choice but to prop up AIG "because its business and trading activities are so intricately woven through the world’s banking system," writes the New York Times. Now that we the people have a majority stake in AIG, perhaps it might reconsider the lawsuit it filed Friday against the federal government over a disputed $306 million in taxes, interest, and penalties?
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Posted
Feb 24 2009, 05:44 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
Ask a Manhattanite what a “lease buyout” is and most will blithely respond that it’s when a landlord pays a tenant to vacate his or her apartment. After all, why wouldn’t that little old lady next door -- the one paying $800 a month for a rent-controlled loft on the Upper West Side -- want to take a hundred grand to go find some new digs?
This phenomenon, formerly reserved for big-city landlords in New York or San Francisco, appears to be migrating to the financial industry.
Now American Express (AXP) is offering select clients $300 to close their credit-card accounts. The company didn’t disclose how many such offers it planned to send out -- but did say
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