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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Wyätt Gwyön who wrote (5753)1/22/2004 10:14:12 AM
From: russwinter  Read Replies (1) of 110194
 
<there are 156,000 SKUs there which contradict your perception>

I have a theory that prices are going up here as well. Quality is getting worse and worse. It's the old ancient, debasing the coinage stuff, chip off little chucks and corners, and pass the goods off on dumb Americans. I was dumb for awhile, but won't shop there anymore because of quality issues. Secondly, skyrocketing input prices in China are forcing them to cover costs as well. They will just decide they have other priorities than just unlimited marginally profitable exports to WMT.

<how are Americans supposed to pay for all this?>

The same way they already have, just borrow cheaply I guess. It's bad policy to encourage that. COF's quarterly report is illustrative.
biz.yahoo.com

COF has slightly less credit card holders as last year (47 million) yet their "managed loan portfolio" has grown from $59.7B to 71.2B. Just loan more and more to the same people. Incidentally they charged off 5.32% of that in 2003. COF makes a lot of it's money nickle and diming customers on late charges and "service fees".

Here's how it plays out:

2.650 B revenues
938 m loan losses
1.290B operating, marketing expense
422m before tax profit. 1.078B of rev. is "non-interest income, 381m are charges. $3.175B of their loan portfolio is now delinquent. Looks shaky to me, but Wall Street loves this stock. I'd like to hear Ramsey's assessment of this one?
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