Quote of the Month:
"Most worrisome is that many owners are essentially borrowing short via one-year floating rate mortgages."
| Forecasts & Statistics |
| Product Trends |
| Industry Trends |
| Issue Archive |
 |
 |
| Post-War Boost in Consumer Confidence |
| Alan Greenspan was right. Consumer confidence (and spending) was depressed in the first quarter of this year by the mounting uncertainty about the outcome of the looming conflict in Iraq. Now, the University of Michigan's Survey Research Center reports that its Index of Consumer Sentiment exhibited the third largest one month gain in its 50-year history during April 2003. |
| Small Business Optimism Rebounds |
| Small business optimism also surged in April, not surprisingly since owners are consumers, too (see previous story). The National Federation of Independent Business released the results of its April member survey (1,393 respondents) in which it found that its index of small business optimism rose to the highest reading since November 2002. |
| Personal Bankruptcies Set Another Record |
| Personal bankruptcy filings in the U.S. continued to grow through the first quarter of 2003. Statistics just released from the Administrative Office of the U.S. Courts indicate that more non-business bankruptcies were filed during the 12-month period ending March 31, 2003 (1,573,720 petitions) than during any previous 12-month period. |
| Credit Card Performance Declines |
| The credit card sector can't seem to shake the effects of the mild recession. According to Moody's Investors Services, in the first quarter of 2003 the percent of credit card loans written off as uncollectible rose to the highest level since the third quarter of 1997. |
 |
| American Express Introduces Expresspay Card |
| Joining other card issuers who are modifying smart cards to enhance convenience, American Express is testing a smart card product that uses a radio transponder to transmit payment information at the point of sale. The new Expresspay card works in much the same way as the popular Exxon-Mobil Speedpass product, as well as EZ Pass-style highway tollbooth systems. |
| E-Commerce Update |
| Updates on how the Internet is affecting marketing and commerce. |
| Credit for Cell Phone Buyers |
| AT&T Wireless Services, Inc. is offering a new service to enable credit-challenged consumers to purchase cell phones. It will offer its new phone, GoPhone, through such stores as Target and 7-Eleven. |
| A Bank Advertises its Credit Cards in France |
| There is no quicker way to highlight cross-cultural differences than to view advertisements abroad. The advertising column in the New York Times by Elaine Sciolino recently reviewed an advertising campaign by Egg Banking, an online banking service based in the U.K., that was marketing its credit card in France. |
 |
| A Bumpy Road Ahead? |
| An editorial in a recent Wall Street Journal raises some interesting and serious issues for our economy in the next several years. Currently, interest rates are at historically low levels. |
| Debt Burden and Delinquencies Ease |
| In this section of Spotlight we examine the charges of some alarmists that consumers are over-burdened with debt. In short, are we "going to hell in a handbag loaded with debt?" |
| Lending to Consumers for 109 Years, but No Profits |
| Back in 1893, a group of wealthy and influential New Yorkers joined forces to create a lending facility for low-income consumers. Among them were individuals whose names we still recognize: J. Pierpont Morgan, Cornelius Vanderbilt, August Belmont, and Seth Low, former mayor of New York and Brooklyn. These and other distinguished individuals contributed $100,000 (a lot of money in those days) to found a nonprofit pawnshop. |
| Sears Evaluating Bids for its Credit Unit |
| According to an article by Robin Sidel in a recent Wall Street Journal, Sears, Roebuck & Co. is evaluating initial offers for its credit-card business. |
| ACORN Attacks Wells Fargo |
| One of the costs of being in the business of lending on home mortgages is that you are subject to charges of racial discrimination. Several years ago ACORN mounted an attack on banks for "predatory lending" in the residential mortgage market. The American Financial Services Association (AFSA) responded by showing the basic economic fallacies in the report. |
 |
| Master Card and Visa Settle Suits with Retailers |
| MasterCard International has agreed to settle the suit brought by the nation's major retailers by paying them about $1 billion. (The retailers had asked for $5 billion to $25 billion.) Just a few days later Visa settled a similar dispute for $2 billion. |
| Identity Checks Required on New Customers |
| By October 1 of this year, all banks, insurance companies, credit card companies, and money service businesses regardless of their size, must confirm the identity of a new customer wishing to open a new account and cross-check the name and address of the customer with the list of known or suspected terrorists. |