Oil prices have more than doubled since 2004 going form $30 per/b to $60 per/b.
Foreclosure rates in many parts of the U.S. are up large percentages compared to a few years ago.
At the same time globlization have slashed corporate costs and technology has allowed workers to become more productive.
But consumer debt is growing (Master Card profits alone were up 70% last qrt) and at the end of the day how can profits be maintained if the credit runs dry?
Re: May 7th: Dow Jones Up 828 pts Since April 11th, 2007 close....Time Bomb?
Oil prices have more than doubled since 2004 going form $30 per/b to $60 per/b.
Foreclosure rates in many parts of the U.S. are up large percentages compared to a few years ago.
At the same time globlization have slashed corporate costs and technology has allowed workers to become more productive.
But consumer debt is growing (Master Card profits alone were up 70% last qrt) and at the end of the day how can profits be maintained if the credit runs dry?
828 points, 26 days. Where's the white out?
take your pick, UTD.
reasonably strong first quarter earnings reports, perception of a Goldilocks economy, recent flurry of M & A news (including a proposal for Dow Jones itself), ppl cashing out of real estate fearing the slowing housing market and investing it into the stock market, dems vs. bush policy deadlock easing chances of new law stress on businesses, rumors of feds lowering rates..
nothing easier than finding reasons for stock market behavior once its happened. :D
and i dont think mastercard makes money out of consumer debt, that would be the card's issuing bank.
Re: May 7th: Dow Jones Up 828 pts Since April 11th, 2007 close....Time Bomb?
^ I have read scenarios like that many times before, only to find that the following week the market takes a big tumble and all the gloom and doom articles begin to appear.
Re: May 7th: Dow Jones Up 828 pts Since April 11th, 2007 close....Time Bomb?
Increased MC profits come from transactions occuring, the more the better, the higher priced the transactions the better as they get around 2% of each sale their cards process. So it makes sense that as MC is used more globally it's profits will grow but how much of that 70% growth in profits is due to sales outside the U.S.?
In a world where using cash is going the wayside having access to the cc transaction logs of the cc companies, would allow you to compile and seperate them into different sectors based on what’s purchased and would give you a good indication on what parts of the economy are fairing well and not so well. You could easily break it down by nation by nation, region by region, city by city, neighborhood by neighborhood. You could micromanage interest rates by the hour and location not to mention be one hell of a stock broker :0.
Re: May 7th: Dow Jones Up 828 pts Since April 11th, 2007 close....Time Bomb?
up nicely today.
utd, although 2-3% of the CC transaction is charged to the merchant, typically less than 0.1-0.2% is interchange fees ending up as revenue to mastercard/visa, rest is free money for the issuing bank. it might be even lesser depending upon how the transaction is set up - swipe vs. handkeyed etc, and is not closely correlated with the total transaction amount. (the only reason i know this crap is because i'd been riding some MA from two weeks after its IPO). you are right though, their profits depend directly on number of transactions, and thats gone beserk.
Re: May 7th: Dow Jones Up 828 pts Since April 11th, 2007 close....Time Bomb?
The real estate bubble has already burst. Unlike stocks it does not happen overnight in case of real estate.
Is there any possibility that the investors in the real estate are now pulling out of there and adding stocks to their portfolio? That could be a reason for the run up in stock market.
Re: May 7th: Dow Jones Up 828 pts Since April 11th, 2007 close…Time Bomb?
The Dow has shed 500 points in the last 2 days.
… U.S. Credit Worries Outweigh Growth
The United States economy grew at a stronger-than-expected clip during the latest quarter. But its brisk pace couldn’t revive a stock market struggling wtih worries about credit and housing.
Re: May 7th: Dow Jones Up 828 pts Since April 11th, 2007 close…Time Bomb?
Quite the coaster. The dow recovers 450 plus points in a matter of days only to drop 380 points today.
Meanwhile economists are mirror my original concerns about credit debt. Fallout from the home-mortgage mess is causing higher rates and at the end of the day less $ in the economy.
…
With the home-mortgage crunch roiling stock markets, economists are beginning to worry about America’s credit-card debt.
Re: May 7th: Dow Jones Up 828 pts Since April 11th, 2007 close....Time Bomb?
**Dow sheds 360 points in fifth-largest drop so far this year
The sub prime related issues are now coming to the fore and the markets are getting very nervous.
****Wall Street shares slid lower with Dow suffering its fifth-largest decline yet this year, amid persistent financial woes, a dropping dollar, surging oil and General Motors Corp.'s largest-ever quarterly loss.
Re: May 7th: Dow Jones Up 828 pts Since April 11th, 2007 close....Time Bomb?
^ Well now we've got the warning from the fed on a slowing economy so will we see companies lowering their forecasts for the upcoming shopping season casuing another drop in their stock only to beat their expectations causing them to raise and delaying the real effects of the credit crunch until 08?
