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To: orkrious who wrote (197771)	10/16/2002 7:56:08 AM
From: orkrious	Respond to of 436258

Peter Eavis Capital One 10/15/02 05:45 PM ET Oh dear, Capital One (COF:NYSE), the darling of the consumer credit bulls, is saying charge-offs will rise well into 2003 in its earnings release that came out after the close: "The company expects charge-offs to rise to the high-6 percent range in the first half of 2003 and then decline somewhat in the second half of 2003." That means a credit quality question mark will hang over COF until lasting improvement in charge offs is seen, if it ever does. The consumer finance bulls are saying, in their unthinking reductive manner, that credit losses should trend down any day now because unemployment appears to have stopped rising. If so, why is COF guiding higher on credit losses well into next year? Could it be poor underwriting? Oh I forgot, these guys are geniuses at borrower selection. Silly me. Also interesting in COF's Q3 figures is the massive cut in marketing spending from the year-earlier level. That has hit loan growth, which will in turn make credit numbers look worse on a proportionate basis. Ugly. None