Winzer, all this money corruption also makes me sick. Those that make
extreme amounts of money thru creation of real wealth that will also
increase the standard of living for others, I say good for them,
and punishment for those who only destroy and steal and cause many in
the world to be denied food medicine and shelter.
Even ignoring whether or not the IMF does good or harm, or is a
tool of the USA, the simple truth that they and all the politicians
knew ahead of time that those who control Russian thru force inside
and outside the government would rip off 99% of the money taxpayers
of other nations put up to help their poor.
But on the light side, here is a dough-nut-hole get rich scheme,
followed by the extra easy credit to be had.
VARNEY: A story now about an epic online battle over Dunkin Donuts:
That battle is over tonight, now that the company has bought
dunkindonuts.org. That's a gripe site set up by a disgruntled customer.
After protests from Dunkin Donuts, the customers said, if you don't like
it, buy it. Well, the company did just that...
Up next, "The Bottom Line," at Bank One.
VARNEY: Finally tonight, "The Bottom Line," our regular Friday feature
on one company making moves and making news. This week, Bank One.
Investors pummeled the stock after the bank warned that earnings would
disappoint. The culprit: brutal competition in the credit card business.
As the bank faces profit -- profit trouble, it's taking a big gamble on
a bold Internet strategy.
Terry Keenan looks at how Bank One can recapture its credibility.
(BEGIN VIDEOTAPE)
TERRY KEENAN, CNN CORRESPONDENT (voice-over): As the nation's premier
credit card issuer, Bank One has provided credit to millions and has
gotten plenty of credit in return. For years, the Midwest powerhouse has
been a Wall Street darling, cobbling together the nation's fifth largest
bank deal by deal: more than 100 banks in 15 years.
NED RILEY, CIO, BANKBOSTON: Bank One has been held up as sort of the
Mercedes of the retail banking business, and their tactics, their
strategy all of the things that they've been employing to grow the
business, particularly the credit card business, has been held up in
very high esteem. And clearly others were trying to emulate their
success over a period of time.
KEENAN: But all that emulation means competition, and this week Bank One
faced the consequences. As the growth rate of the credit card business
has plunged from more than 11 percent in 1997 to just two percent today,
Bank One and other credit card issuers have been forced into a price war.
As margins come under pressure, this week Bank One slashed its earnings
estimates by seven percent, a move that knocked more than $16 billion
off the value of its stock.
With its shares down 33 percent from their highs, Bank One the aggressive
acquirer was suddenly being talked about as a takeover target.
Banking analyst Charles Peabody has had a sell on the stock for some time.
CHARLES PEABODY, MITCHELL SECURITIES: I think this is only the first of
several shoes to drop, and I think the marketplace suspects that. If the
marketplace believed that this was the first and last disappointment,
the stock probably would not have traded down as aggressively as it did,
the marketplace suspects that there's another story yet to be told there.
KEENAN: Bank One is betting hundreds of millions that the story
investors will eventually focus on is Wingspan, its ambitious online bank.
KEENAN: Launched this summer with great fanfare, Wingspan is an entirely
independent bank with no connection to Bank One tellers, computer
systems or its 1,900 branches. CARL DORF, PILGRIM BANK AND THRIFT FUND:
Most banks, rather than taking this approach, have been using online as
an additional opportunity to do business with the bank, not setting it
up as a separate entity.
KEENAN: After a huge advertising campaign estimated at $100 million,
Bank One expects Wingspan will add to add to earnings beginning next year.
But money manager Gregg Hymowitz says there are other hidden costs.
GREGG HYMOWITZ, ENTRUST CAPITAL: I think it's interesting that the two
banks that have disappointed so far most notably has been First Union
and Bank One, and they're the two banks that are most out there with the
Internet play. And there's the appearance or the issue possibly of
whether or not the time that management spent and the resources that the
management team put towards the Internet takes away a little bit from
their traditional businesses.
KEENAN (on camera): Bank One is clearly betting that by breaking the
mold, it won't break the bank. But with its credibility on the line,
the pressure to succeed in cyberspace is greater than ever. |
