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Capital One Reports $1.42 Billion Loss on Charges (Update2)
The loss from continuing operations was $3.67 a share, missing the 29-cent average profit estimate of 20 analysts surveyed by Bloomberg.
They say that close only counts in horseshoes and hand grenades. Who am I to argue?
Capital One slumped 45 percent in the past year in New York trading as late payments and defaults rose.
The market clearly saw this coming and had already priced it in of course.
The company slipped 8.5 percent to $20.08 in extended trading at 5:58 p.m. New York time after the loss announcement.
Nope. Too much optimism.
Real Estate Newsletter Articles this Week: Existing-Home Sales Increased to
4.15 million SAAR in November
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At the Calculated Risk Real Estate Newsletter this week:
[image: Existing Home Sales]*Click on graph for larger image.*
• NAR: Existing-Home Sales Increase...
17 hours ago
8 comments:
Stag,
Causation AND Correlation!
http://finance.yahoo.com/echarts?s=COF#chart1:symbol=cof;range=2y;compare=coh;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
If this doesn't highlight the need to "get credit flowing" I don't know what does.
Seriously. How can our eCONomy grow without money in our $250 wallets?
Oh the (Hu)Vanity!
mab,
Causation AND Correlation!
Perhaps they were both caught in the turkey and gravy soda downdraft?
http://finance.yahoo.com/echarts?s=jsda#chart1:symbol=jsda;range=2y;compare=coh+cof;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
Stag,
Jones Soda is a train wreck. Maybe they should try a bass flavored soda.
http://www.videosift.com/video/The-Super-Bass-O-Matic-76
Some round numbers:
$50 trillion in credit outstanding. At 6% interest, our eCONomy needs to generate $3 trillion yearly to pay the interest tab. Since GDP currently grows at only $700 billion a year, we need $2.3 trillion in new promises (debt) to keep the ponzi scheme going. Heaven forbid if credit expansion takes a hoilday or actually shrinks.
Serious question. Does the above make sense and if so how do we resolve this mess?
mab,
Serious question. Does the above make sense and if so how do we resolve this mess?
I wish I could offer a serious answer. I can say this though. I did more hoarding at Wal-Mart and Costco today.
Let me describe my Wal-Mart adventure.
I was walking through the sporting goods section and overheard an employee telling a customer about ammunition prices and how there is a shortage of product available. The customer was only there because he couldn't find ammunition elsewhere.
The employee said two things are going on right now. There's fear of a 500% sales tax increase and there's also fear that ammunition may soon require a serial number.
500% sales tax on ammunition is possible
http://www.ktbs.com/news/500-sales-tax-on-ammunition-is-possible-23853/
Ammunition is also being stockpiled. A proposed 500% sales tax increase might go into affect.
Wondering What's Happening With the Ammunition Accountability Campaign?
http://www.jbs.org/index.php/self-defense-second-amendment-blog/4350
The cost of ammunition would soar, for police and private citizens alike. The Sporting ARms and Ammunition Manufacturing Institute estimates it would take three weeks to produce ammunition currently produced in a single day. For reason of cost, manufacturers would produce only ultra-expensive encoded ammunition, which police would have to buy, just like everyone else.
Imagine the cost of ammunition if both were to happen simultaneously. I guess some people have already imagined it. I can't say those are valid fears, but those who were the most fearful over the last few years have also been the best protected. Capital One, Coach, and Jones Soda investors were clearly at the other end of the spectrum.
It might even be said that I imagined the future price increases in ammunition. It was all a part of my stagflationary thinking back in 2004. I have 350 rounds. I bought thinking it wouldn't be getting any cheaper.
My Wal-Mart adventure wasn't over though. I was curious how my 90 extra pairs of socks hoard (lol) was holding up now that deflation was kicking in with such a vengeance. Further, everyone knows apparel only gets cheaper.
I bought them at Wal-Mart. They are Gold Toe brand. I like that brand because my feet are size 12. That makes typical socks a bit tight, but this brand goes to size 13. Sounds a bit like Spinal Tap, lol.
My Wal-Mart no longer carries those socks. They've been replaced with a cheaper version. In my world, that's not deflation. That's a sign of stagflation. I think we're going to see a lot more signs of that in the future.
Once again, if other people start thinking like me then they won't be hoarding cash hoping for much cheaper rice prices in the future. That would be deflationary thinking. I'm still perfectly willing to buy the rice now. It seems like only last year we had rice shortages (that's probably because it was only last year).
One last thought on rice. I never did run out. I hoarded long before the shortage hit. Now that we've seen one shortage I hoard even more. My stagflationary thinking has yet to be altered by this deflationary episode. I really don't think it will be possible to alter it.
One last thought in general. Maybe things would be different if oil was still cheap. Some would argue that it is cheap. It is $40 instead of $150. I would argue it is $40 instead of $15 (the price through most of the 1990s). If $40 ends up being the low during a global recession/depression, I cringe at the thought of what it will be later. Perhaps we'll be really lucky and keep this global recession/depression going indefinitely though (sarcasm).
http://inflationdata.com/inflation/inflation_Rate/Historical_Oil_Prices_Table.asp
Perhaps we'll be really lucky and keep this global recession/depression going indefinitely though (sarcasm)
I've had that thought too (no sarcasm). Maybe the credit crisis is a blessing in disguise as it will force us to use scare resources more wisely. I'd hate to look back twenty years from now and think we burned all our cheap oil driving to malls to buy vanity.
Some of Buffett's comments over the past few years combined with his investment in a railroad strengthens my growing belief that the era of limitless cheap oil is ending. The end of "cheap oil" is bad enough, but the end of the "age of oil" is plain old frightening.
Recently, a Goldman analyst predicted a sharp/rapid rise in the price of oil later this year. Absent speculation, I don't see oil spiking any time soon. I just don't see the demand.
Right now I see fear all around me. Everyone is drastically reining in spending. I don't see that trend ending soon and that should should push oil prices down on a supply & demand basis.
Prior to the credit crisis, oil supplies were able to meet demand, albeit just barely. There was no actual shortage, only the expectation of a shortage.
The near term aside, I do think oil supplies will be a serious problem in the future. Outside of Saudi Arabia, all new supplies appear to be expensive. My guess is that any new economic boom will send oil soaring. My guess is also that we will not see an economic boom soon. The problem with $100/bbl oil is that we can't afford it. Or in the alternative, we can't afford a lot of other stuff.
Perhaps oil is the new economic regulator.
mab,
Maybe the credit crisis is a blessing in disguise as it will force us to use scare resources more wisely.
Scare resources? Freudian slip or an even more accurate way to describe our future?
I'm very much tempted to think the latter!
I'd hate to look back twenty years from now and think we burned all our cheap oil driving to malls to buy vanity.
When 9/11 hit, we were "scared" into burning all our cheap oil driving to malls to buy vanity though. It was part of the government's plan to stick it to the dead terrorists.
He Told Us to Go Shopping. Now the Bill Is Due.
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/03/AR2008100301977.html
Bush certainly wanted citizens to support his war -- he just wasn't going to require them actually to do anything. The support he sought was not active but passive. It entailed not popular engagement but popular deference. Bush simply wanted citizens (and Congress) to go along without asking too many questions.
Stag,
Here's what can happen when you scare your scarce resources away.
Boo! turns into Boohoo!
http://en.wikipedia.org/wiki/Nauru
Nauru is a phosphate rock island, and its primary economic activity since 1907 has been the export of phosphate mined from the island.[2] Before the island's only resource was depleted, Nauru could boast the highest per capita income in the world. With the exhaustion of phosphate reserves, its environment severely degraded by mining, and the trust established to manage the island's wealth significantly reduced in value, the government of Nauru has resorted to unusual measures to obtain income. In the 1990s, Nauru briefly became a tax haven and money laundering center. Since 2001, it has accepted aid from the Australian government; in exchange for this aid, Nauru housed, until early 2008, an offshore detention centre that held and processed asylum seekers trying to enter Australia
Apparently, Nauruians don't have kidneys otherwise they would of had something useful left to sell. I'm sure Mexico and England have a plan B for when they become net energy importers.
mab,
I'm sure Mexico and England have a plan B for when they become net energy importers.
They do have a plan B! Based on its sheer size, it should be at least twice as effective as plan A. Plan B should work for a few years.
Plan C should be twice as effective as plan B. Plan C should work for a few months.
Plan D should be twice as effective as plan C. Plan D should work for a few weeks.
This can go on for years, months, weeks, days, hours, minutes, seconds, milliseconds, and nanoseconds respectively!
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