Browse by Tags

• Credit card companies in a heap of trouble

  Posted Sep 04 2008, 10:31 AM by Andrew Horowitz
  Filed under: Credit Crisis, Andrew Horowitz, american express
  Rating:

  For those of us who have been fighting with the credit card companies over the years, this may come as bittersweet news. The truth is that "trouble" is an understatement. The obvious problem is that the credit card loans are unsecured and as unemployment rises and the global economy slows, there will be losses incurred as consumers:

  1. Slow spending
  2. Are delinquent on payments
  3. Default on payments
  4. File for bankruptcy
     

  According to Briefing.com, Lehman Brothers is (finally) reducing their estimates on three companies   Read More...

  Discuss ( 5 comments) 1,888 Views Digg this | Email this | Link to this

• Waddle be next for the Financials?

  Posted Jun 02 2008, 04:32 PM by Andrew Horowitz
  Filed under: Merrill Lynch, Morgan Stanley, Lehman Bros, JPMorgan, Credit Crisis, Andrew Horowitz
  Rating:

  What took them so long? S&P finally trimmed their outlook on Lehman Brothers Corp and other key financials today. It has become clear that the problems facing the financial sector is far from over. Financial stocks and the markets in general were hit hard as investors were spooked after S&P announced that they would be lowering ratings and their outlook on these companies. Is this any surprise to anyone?

  So now, the long term ratings on these three went from A+ to A and the short term rating went to A-1. The concerns seem to be focussing in on residential mortgage loans and residential construction slow downs. Timely, hey?

  According to the S&P release shown below, “The downgrade primarily reflects our concern that the pace and extent of earnings improvement could be considerably more muted than we previously assumed.” And "muted" is codeword for....?   Read More...

  Discuss ( 2 comments) 1,068 Views Digg this | Email this | Link to this

• Is Citigroup setting up to FAIL ?

  Posted May 12 2008, 10:27 AM by Andrew Horowitz
  Filed under: Citigroup, Credit Crisis, Andrew Horowitz
  Rating:
  The saga for Citigroup continues and rest assured that it is not going to subside anytime in the near future. In an effort to bring in capital, it is now planning hoping to sell its Japanese consumer finance unit. The move is intended to plug another hole in Citigroup's very leaky dam. In doing this, there are two results that Citigroup is likely trying to achieve:

  1. Keeping the parent alive by selling off the child, at least for the time being;
  2. Stopping any drag from the Japanese division which is reported to have over $400 billion of assets, approximately 20% of the total value of Citigroup's assets.
     

  The problem is that the valuing of these assets has become difficult as it is now a moving target since many of the traditional metrics have been tossed out during this historic market condition. Knowing that, it is interesting that Citigroup would  consider selling at a time when the price could be at its lowest.   Read More...

  Discuss ( 6 comments) 4,675 Views Digg this | Email this | Link to this