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Strategies & Market Trends : Guidance and Visibility

AAPL 269.96

+4.0%

Feb 2 3:59 PM EST

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To: 2MAR$ who started this subject	6/16/2002 8:52:58 PM
From: Joe Stocks	of 208838

Consumer lenders; Excerpt from Doug Noland's commentary for the week. Short COF. Interesting read. prudentbear.com ""We are certainly now increasingly on the lookout for weakness and flight away from the marginal consumer lenders, and we believe that exactly this development gained momentum this week. We note the weakness in the stocks of Americredit, Metris, Household International, and Capital One Financial. These companies are both risky lenders and major operators in the securitization marketplace. It has been our expectation that the unfolding dislocation in the risk market (particularly Credit insurance and default swaps) would begin to impact the securitization marketplace at the margin (the most risky securitizations). Were these aggressive lenders to lose access to the capital markets, they would be forced to change their liberal lending policies and restrict additional lending to their most vulnerable borrowers. Such a circumstance would be quite problematic for borrower and lender alike. It would certainly appear that this group of stocks is now beginning to discount an imminent reversal of speculative flows to risky consumer securitizations. The weakness in the Credit insurers is also worth noting, as it may further indicate what we have expected would be changing perceptions as to the risk profiles of these companies and the securitization marketplace generally. If market perceptions have begun to take a less sanguine view of the risky lenders and Credit insurers, our analysis would expect that this would mark a seminal inflection point for the great U.S. mortgage finance/consumer Credit Bubble. "

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