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News Scan Oct 2014

Credit Card News, Economy News, Banking Industry News - Oct 2014
  • Quarterly profits and revenue at big American companies are poised to decline for the first time since the recession, as some industrial firms warn of a pullback in spending.
  • From railroads to manufacturers to energy producers, businesses say they are facing a protracted slowdown in production, sales and employment that will spill into next year. Some of them say they are already experiencing a downturn.
  • “The industrial environment’s in a recession. I don’t care what anybody says,” Daniel Florness, chief financial officer of Fastenal Co., told investors and analysts earlier this month. A third of the top 100 customers for Fastenal’s nuts, bolts and other factory and construction supplies have cut their spending by more than 10% and nearly a fifth by more than 25%, Mr. Florness said.
  • New credit cards with chips may be safer than the old magnetic stripe variety we all know. But they've caught a lot of unwanted attention lately, getting blamed for slumping user growth at Netflix, overwhelming small businesses and sparking a new round of consumer scams.
  • The challenges that chip cards face may seem ubiquitous — at least in this latest news cycle. But how many people are actually using them?.
  • Payments company Square shared data with The Washington Post showing that, as of September, only 37 percent of the cards that Square vendors processed were chip cards.
  • In an interview with Fusion’s Felix Salmon the day after last week’s Democratic debate and published Tuesday, Senator Bernie Sanders discussed the marquee features of democratic socialism he’s been tirelessly calling for during his presidential campaign: higher taxes for the wealthiest Americans, an increased minimum wage, and breaking up the biggest Wall Street banks.
  • Salmon also raised a possibility that has not been as prominent in Sanders’s stump speeches, but animates him nonetheless: turning the U.S.’s post offices into banks. Sanders:
  • If you are a low-income person, it is, depending upon where you live, very difficult to find normal banking. Banks don’t want you. And what people are forced to do is go to payday lenders who charge outrageously high interest rates. You go to check-cashing places, which rip you off. And, yes, I think that the postal service, in fact, can play an important role in providing modest types of banking service to folks who need it.
  • That extra drink or three you had last night may cost more than just your bar tab.
  • Excessive drinking cost the US economy $249 billion in 2010, up from the $223.5 billion it cost the country in 2006, according to a new analysis by the US Centers for Disease Control in the American Journal of Preventive Medicine. That increase, about 2.7% annually, “significantly outpac[ed]” the 1.9% annual inflation rate of the four-year period, researchers found.
  • The biggest cause of economic loss was lost productivity, which accounted for 71.9% of the total, or about $179 billion. Being hungover at work, and therefore having “impaired productivity” there, cost the economy approximately $77 billion. Health care was 11.4% of the cost, at about $28 billion. Almost half of these costs, 40.4%, were borne by the government.
  • Credit card offers -- can you remember the last time you went a week without getting one in the (junk) mail? Some of these offers for "preapproved credit" are worth looking into, and some should go straight into the bin. But how do you tell the difference between the worst and the best credit card offers?.
  • There are a few obvious answers. For example, high annual percentage rates of interest are bad. Low rates are good les. Big annual fee? Bad . No annual fee? Good.
  • A 1% "reward" on all purchases, payable in cash or in point? Not bad. Revolving categories of purchases, for which you must continually sign up to earn rewards? Not good.

5 Banking Stocks Set to Beat Earnings Estimates

Source: ZACKS Category: Banking Industry
  • Reduced pace of revenue growth and rapidly mounting expenses have remained major concerns for U.S. banks during the third quarter. Fundamentally, revenue and earnings growth has become uncertain on the back of a stronger dollar, plummeting commodity prices, weak emerging markets, restricted business and consumer spending, persistent low rate environment and volatile capital markets.
  • Banks are continuously looking for cost-saving opportunities to improve the bottom-line performances. Among other steps to curb costs, banks are increasingly spending on technological development in order to substitute labor and manage higher volumes, and increase operational efficiency.
  • On the investment banking front, with elevated M&A activities, advisory and underwriting revenues should show improvement. However, the equities division might witness a slowdown due to cautious steps taken by investors amid uncertainties surrounding the global economies and domestic interest rate environment.
  • Optimism turns negative among wealthy: Survey
    • The stock market plunge and generally rocky economic news both here and overseas have combined to erode Americans' confidence in the economic outlook. Just 22% of Americans think the economy will improve in the next year, reports CNBC's Steve Liesman with the exclusive results from CNBC's All-America Economic Survey.
  • The plunge in the stock market and weaker growth in the U.S. and abroad look to have taken a toll on American economic optimism.
  • The CNBC All-America Economic Survey finds views on the current state of the economy about stable, with 23 percent saying it is good or excellent and 42 percent judging it as fair. About a third say the economy is poor, up 3 points from the June survey.
  • Brian Kelly's most recent international trip through Ghana, Rwanda, and South Africa cost him just $5.60, Vice reports.
  • The former Wall Streeter turned "The Points Guy," travels the globe up to six months a year - and he does it for next to nothing, thanks to credit-card rewards and frequent-flyer miles.
  • When he's not jet setting, he's running his website, The Points Guy. In an interview with Vice, Kelly shared the No. 1 card for those looking to maximize their travel: the Chase Sapphire Preferred Card.
  • U.S. bank investors have been counting on higher interest rates for a long time, but the weak jobs report last Friday suggests they might have to wait even longer.
  • The disappointing data sent bank stocks lower, with the sector now down 14 per cent from its July 22 high. The S&P 500, by comparison, is down eight per cent.
  • Much of the banking sector’s underperformance is a result of concerns about GDP growth and lower-for-longer rates, as well as the threat prolonged energy price weakness has on credit quality.
  • Ever since the American dollar began to surge against foreign currencies late last year, economists have warned that the repercussions would eventually be felt on the home front. If there were any doubts about that, they were resolved last week.
  • With Friday’s Labor Department report showing slower hiring than expected in September, and the weaker data on exports and factory activity released earlier in the week, evidence of the effects of the dollar’s rise on the domestic economy is piling up.
  • While hardly catastrophic — almost no one expects the American economy to fall into recession anytime soon — the greenback’s strength will exert a significant drag on economic growth in the months ahead and could help push the Federal Reserve to wait until 2016 before raising interest rates.
  • October 1st was the deadline for retailers and credit card issuing companies to switch over to using the new EMV credit cards which contain a computer chip that creates and encrypts a new number every time the card is used, which will dramatically reduce the amount of credit card fraud.
  • Under the newly implemented regulations, if a business does not switch its credit card processing machines over to the new EMV cards or if a credit card issuer does not provide new EMV chip cards to its customers, in the event of credit card fraud, the responsibility for loss will be on either the credit card issuer or the retailer, whichever has not complied with the new law.
  • For us, the customers, our liability does not change from the legally mandated limit of $50, which is generally not even assessed against consumer victims of credit card fraud.