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Capital One Charge-Off Rate Shoots Higher
Credit card companies are under pressure today as more negative trends in charge-off and delinquency rates are noted across the board. The main pure play credit card name that most follow for representative trends in the space, Capital One, released data that showed materially deteriorating numbers in both the US general annualized charge-off rate (9.77%, a significant increase from 9.32% in August), and the 30 day + delinquency rate (5.38% versus5.09% in August). Auto finance and international metrics were also broadly worse month over month. Hopefully consumers are at least using their credit cards to purchase highly discounted clothing instead of funding their E-trade accounts with margin^2. The last, which seems to be the prevalent strategy in game-fever swept China, may not be the most prudent approach in a suddenly savings-focused America.
September COF data:
August COF data:
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chris whalen is right on this one. why anyone would own cof now is beyond my comprehension.
The "Peasants" are not that dumb to pay of debt twice....
They know in the end the debt will be bailed out by themselves in tax via uncle sam!
yes they are Andy. watching this one closely.
under the whalen thread, i am linking a copy of cof's response in regards the FASB 166,167 changes for January 2010.
i'm confident that you can assess what is says before reading lol!
Perhaps I would be too naive and optimistic to profess that Americans have learned not to finance depreciating assets?
A consistently positive consumer savings rate coupled with significant financial regulations reform would make for a very nice trend.
A consistently positive consumer savings rate coupled with significant financial regulations reform would make for a very nice trend.
and i want legs like gisele.
neither are going to happen.
lol, brilliant; i love responses like these
Oh, and to the poster above
Optimism is an illusion that there exist an order in which good is established as a natural state
Pessimism is an illusion that there exist an order in which bad is established as a natural state :p
Even better:
The eye altering, alters all.
Schopenhauer in response to Leibniz's moronic optimism.
Last month COF decreased net charge offs but while 30+ delinquencies increased which seemed awfully suspicious. ZH also noted it. This month's huge jump in charge offs seems to be proof that those who were cynical were right.
that's what happens when the banking system is close to insolvent and regulators look the other way. going forward at least for one year, I simply cannot figure out how the credit card earning model can do anything but deteriorate.
"Close to insolvent"
Correction: insolvent
...been so for a long while.
i've become much too much of a softie in my older years.
pussy :D
you got that one word on your mind alot cheeky, eh? lol!
well; if by on my mind you think on my ....; than yes :D
* as for my previous post; twas a joke dude; nothing serious, you know i like you ...
Also keep in mind that they are ALL being allowed to use fraudulent accounting.
And this is the best they can do?
Truly pathetic.
I am dreaming that joe public is staging a quiet revolution and not paying down credit cards and also not making mortgage payments because 1) he knows he would be paying way more than the structure is worth and 2)due to the banks' not wanting to write down the assets he can live there for free for awhile. ahhh
the best idea out there so far is Fed Reserve Board Governor Daniel Tarullo's idea to use Fed money to guarantee loans to small and medium sized businesses. Create jobs quickly and people will have money to pay mortgages. Thank you Daniel Tarullo. Best idea I heard all year.
Meanwhile, the "official" line from the Gubmint and Prime-Pump Media (but I repeat myself) is SPEND!! SPEND!! SPEND!!
Yeah, this will all end well.
The most INSANE headline from MSM msn.com. "Recession ends in 79 areas." OK, you click the headline, they have an interactive map; 79 OUT OF 384 AREAS! They brag that 1/5 areas are coming out of the recession, WHICH MEANS THAT 4/5, 80% ARE IN A RECESSION YOU MORONS!!! How is this good news!!?? I despise the MSM. Then they proceed to ask what Elkhart, IN thinks of the news. ARE YOU FREAKING KIDDING ME!! I've been to Elkhart. It serves as a nice area for cheap hotels for Notre Dame football games. The town itself is dead. DOA!!! If I were Elkhart, I'd tell MSNBC to go to #@ll!
speaking of cof and the impending FASB FAS 166, 167 changes entitled "forcing banks to return offshore sewage laden QSPEs, SIVs etc to their already crappy balance sheets" I thought ZHers might find COF's thoughts on this interesting as expressed in the comment period currently in effect.
http://www.fdic.gov/regulations/laws/federal/2009/09c06AD48.PDF
Why would they only ask for an additional six months (until June 30, 2010) to continue hidding the worm cans they have buried all over the place?
Spoon feeding Gerber usually arrives in small dollops. Six months may as well be six years given the attention span of most folks.
+1
yeungling and the aba crew probably haven't convinced enough congress critters to do the fasb 157 trick and threaten to nuke FASB headquarters.
this one is different than the 157 in that the rule has already been changed from the previous and is set to launch in Q1 2010.
Altruism and fractional banking are mutually exclusive. The tell going forward is if the majors will sacrifice the small fry in order to push the idea that stability would be enhanced if all revolving debt were made secured by the individual on a federal basis. Makes me wonder when Capital One will "purchase" the CC business from Citi and combine with Discover to help the dissolution process when it arrives.
Your are correct. The taxpayers should be made to shoulder this burden.
After all, we have a constituitional right to revolving debt on demand.
And free health care. And free everything else because those greedy evil rich people "owe it to us."
Do you realize that 47% of the people in this country pay zero income tax. And what I have stated above is precisely what they believe.
If you would like to start a riot when you find yourself around the Socialist left, just throw this at them.
The first American Revolutiuon was fought for the principle that there should be no "taxation without representation."
The coming revolution should be fought for the equal and opposite principle, that there should be no "representation without taxation."
Why should they work for prosperity, when the can simply tax their way to prosperity.
QED, gotta go.
Doc, as a 100% disabled war veteran you are barking up the wrong tree on the "those evil non tax paying welfare queen" line.
Just telling ya, differentiate or be aware of what exactly you are saying. Your thesis is that I pay NO TAX since I pay no federal income tax.. WhoT! Either you are being funny or supremely narrow minded. Especially since the founders drew the line at property ownership, which I meet. which makes your line that I pay no tax even funnier.
BTW, what I am hypothesizing is that the federal government will pass a law making the concept of a non recourse loan historical. Not that consumer credit should be guaranteed by the feds... which is what is happening now courtesy of the federal reserve.
You've already paid far more than most, if not all, of us. In fact our debts to you cannot, IMO, be repaid fully. Ever.
FWIW, and much as I don't pretend to read minds, I'm pretty sure you're not what Dr. Horace had in mind. Then again, maybe he's a schmuck. I'll leave it to him to defend himself.
differentiate or be aware of what exactly you are saying.
I believe that considered opinion should be, well, considered. One of the reasons mine is constantly changing as I gather 411.
BTW, I was the one that volunteered...
Like I said, if you want to start a riot ...
And no, I'm not talking about my mother who lives on SS and a small pension and hasn't paid income taxes in years.
I am speaking of the "entitlement mentality" which seems to be expanding exponentially.
We can't keep giving everything to everyone who stands up and "demands" it as a "right".
If we do that we'll wind up being a ....um, well gee......, lets see, I guess we already are a bankrupt nation?
Never mind. It seems I've started this discussion a little too late.
Yep - that's pretty much what I thought you meant.
Thanks. Cheers -
Citi CFO quote on the delinquencies in the mortgage business: "it is impossible for anyone to know what the delinquency trends are given the trial mods/programs ongoing." So, why release them? Citi CFO in repsonse to question on card forbearance programs: really can't say what the impact of the programs specifically, but they help to hold down delinquencies and optimize recovery (perhaps a recoup on market cap) Jim Cramer target = 13
i guess the cfo must not be reading the FHA's own reports which are rather bearish.
he should never have gotten a pass on that one....delinquencies on mortgages issued in the last year are very high and this has been widely reported.
Today's weekly rail report was just released.
http://www.aar.org/NewsAndEvents/PressReleases/2009/10_WTR/101509_RailTr...
how about the mortgage co COF bot at the top of the mkt, has that been wriiten off , or did they dump all the loans on the mkt?? or buried off balance sheet..
Consumers are not consuming.
What is fun is not only not consuming but not keeping the cash in the banks any more!
Personalty I am forced by the va to have a bank account to get the direct deposit (i am 100% via Vietnam after a prolonged fight with the VA) so the pittance arrives I pay the bills then sweep every thing left into my own hands NOTHING stays in the bank