Saturday, November 7, 2009

>CREDIT: How To Obtain, Increase and Preserve Credit by RUSS WHITNEY



If you have no credit
If you have some credit and need more
If your credit needs rehabilitation

Then this manual was written for you.

Credit or one’s ability to pay their obligations has always been a critical component of our system of exchange. For years, government was on the side of the lender to the extent that people were actually sent to jail for nonpayment of obligations. Debtors’ prisons were abolished long ago, but it wasn’t until 1968 that the Consumer Credit Protection Act was initially enacted. For the first time, creditors had to state the true cost of borrowing.

Today to buy a car, home, get a job, or a new TV, most will have to pass the credit criteria of a credit bureau. With the electronic age, the collection of credit data is a multi-billion dollar industry. The first known credit bureau was formed by a group of tailors in London, England in 1803. Members of the Mutual Communication Society of London exchanged information on bad credit risks. The first US credit bureau was started in Brooklyn, New York in 1869.

For years, consumers were able to obtain credit primarily from their local stores and vendors. Then, to take advantage of all those eating out and traveling, a whole new set of credit evolved, the travel and entertainment cards. American Express and Diner’s Club are prime examples. The economy was booming and banks were anxious to partake in what was the “plastic” revolution in America. Up to that point, to make a “material” purchase you had to have an account directly with the merchant you were buying from. Then some banks in California got together and the MasterCard was born.

Credit Tightens
Credit was easy. Credit card companies were determined to sign up as many members as possible.

“You have been pre-approved for X amount of credit,” stated their marketing materials. More often than not, the annual family income was the only criteria considered.

But consumers went on a spending spree, charging everything in sight; as a result many were unable to pay, and credit procedures were tightened considerably. The economy went sour, interest rates went through the roof and numerous consumers fell into a credit “no-man’s” land. Downsizing became the buzzword in corporate circles and many became unemployed and without credit.

Credit Boom
Then, we came full circle. The economy was booming at a 50-year high and interest rates were very low. A Time magazine story quoted the Consumer Federation of America as stating that from 55 to 60 million Americans had an outstanding balance of over $7,000 in their credit card accounts, up $1,000 from the previous year. However, bank profit margins at that time were declining steadily since the mid-eighties. The article estimated a 300% decline during that period. Where did they look for additional business?

One way was to further penalize current customers. Some have decreased the grace period from 30 to 20 days. Others actually started charging a fee if the account is not used during a certain time frame. How important is this business to their bottom line? Credit card loans account for 7.8% of total bank lending, however it represents 12.2% of their loan income. It is very important to them.

Some even instituted a fee for closing an account.
How about those 50 million Americans with poor, or no credit? Many financial institutions are
actually targeting them as a major new source of consumer business, realizing that their stringent rules have prevented many good and stable people from receiving the credit they deserve. A divorce, illness, job loss or even a bankruptcy deprived consumers of a record that included years of steady and faithful payments.

Let’s start by understanding credit. What do the lenders look for when they evaluate someone for a loan? What are the different methods they employ to do so? We will explain the terminology used in credit, and review the different types of credit cards that are available.

We will identify the nine important pieces of federal legislation that were enacted to protect you in the marketplace. We will explain the significance of each and review what they mean to you, from the landmark Truth in Lending Act to the Real Estate Settlement Procedures Act.

Did You Get the Best Deal?
We will explain how to evaluate the different types of credit card proposals that you receive, how to shop around for the best deals and where to look. This will include the most comprehensive evaluation list available.

To read the full report: CREDIT MANUALS


• This excellent indicator can only be used for the Forex market. It has specific parameters that are ideal for the volatility of spot Forex.

• The PCI can be used on any time interval:

• The PCI is a leading indicator and not a lagging indicator.

• The main purpose of the PCI Indicator is to the help the trader
understanding the probability of market direction.

• The PCI monitors price movement (trend) and the probability of
trend reversal.

• It is very important that the trader understand that there is no
indicator that offers a 100% success rate, but the PCI has an extremely high rate of profitable signals.

• The key to success is learning to interpret the indicator along with
other technical tools: Candlestick Charting, chart patterns of trend continuation and reversal, and fundamental events

• The PCI Indicator can become a very helpful tool because it
confirms when the market is in an up trend, downtrend, or bracketed market.

More Specifics on the PCI Indicator

• The PCI Indicator is made up of five lines. This technical indicator estimates the probability of market direction by suggesting Bid or Ask positions.

• Let’s look at the essay on the PCI Indicator by InfoTech. Look at the bottom of the first page at the graph of the PCI chart plotting.

• Two Dotted Lines: There are 2 dotted lines on the chart – one at the top and one at the bottom. These dotted lines indicate the 0% to 100% boundaries of the indicator.

• The Black Line: There is a horizontal, fixed line that is positioned at 50% of the scale. This line is a filter or potential signal line that does not move.

• The Pink and Green trading signal lines move back and forth across the black filter line.

• The Pink Line: Is a moving average line that plots the overall longer-term direction of the market trend. It is a line that moves up or down, slowly heading in the direction of the overall trend.

To read the full report: PCI


Themes emerging from data, site visits and channel checks
We list key themes for the property sector following analysis of recent industry data and our recent site visits and channel checks with brokers in Delhi-NCR, Chennai and Bangalore:

1. Pan-India monthly residential sales volumes has moderated
from an aggregate 19,700 units/month sold in March-May to 16,100 units in June- August across the markets we track. However, it should be borne in mind that this period may be seasonally weak and we await data for September- October to see if there has been a festive season pick-up.

2. Residential new launch absorption has fallen from between 40%-60% in April-June to about 20%-25% in Jul-Aug. We note the number of launches in Jun-Aug was lower vs. Mar-May and prices for some new launches have also gone up.

3. Moderation in affordable housing take-up. The inventory of unsold homes in the Rs0.5-Rs3.0 mn/unit range has been increasing through CY2009. Cumulative absorption is encouraging in pockets of NCR but below 40% in some markets like Chennai and Bangalore.

4. Office lease take-up weak but some green shoots. Take-up across the six major markets of Mumbai, Gurgaon, Bangalore, Hyderabad, Chennai and Kolkata in August 2009 was about 70% lower vs. August 2008. However, the trajectory in Mumbai and Bangalore has improved since
March and it remains to be seen whether there is a significant pick up in 2010 with higher corporate budgets.

5. Execution ramp-up: We visited some DLF and Unitech sites recently and while work is underway on a number of sites, some developers may need to deliver north of 10 mn sq ft pa if demand for affordable housing units is robust over the coming months. Execution of this scale would be more than what they have done in the past.

6. Channel checks indicate investor-driven residential demand, yet to see significant pick-up in office market: Our channel checks in NCR and Chennai indicate that property investors have been quite active over the past six months with regard to take-up of new launches. Brokers we spoke with also indicated that the office market has not witnessed a significant pick-up in volume, especially in Gurgaon and Chennai.

To read the full report: REAL ESTATE DEVELOPERS


Earnings decline as expected; Reiterate Underperform
Tata Chemicals Q2 revenue and recurring PAT declined over 50% yoy led by poor performance in soda ash and non-urea fertilizers. Post this we change estimates marginally and reiterate Underperform with PO of INR180. Our PO is pegged at 7.6x FY11E P/E- a 10% discount to the 8yr avg, which is justified given weak demand in non-urea fertilizers & pressured pricing scenario in soda ash.

Soda ash volumes improve sequentially but at lower prices
GCIP volumes were up 23% qoq but at lower prices especially in export markets. This was led by ANSAC’s focus on regaining market share from Chinese exporters. Industry reports suggest that Chinese exporters continued to sell at or below their delivered costs in Sep qtr. We believe this will keep prices in check near term and pressure margins in soda ash though at higher capacity utilization.

Not yet out of woods

Mixed performance in fertilizers to continue
Urea volumes were up 9% yoy but NPK fertilizer volumes declined 49% led by weak monsoon. IMACID continued to report losses for the fourth sequential quarter. While we expect IMACID performance to improve in H2FY10, muted sales in NPK will likely continue as a follow up of weak monsoons. The company mentioned that it is considering doubling its urea capacity through brown field expansion.

Risk reward unfavorable
While we expect earnings to decline 28% in FY10, the stock trades at 11x FY11e PE and 7.1x FY11E EV/EBITDA. We rate risk-reward unfavorable given i) pressured price outlook in soda ash, ii) expectation of continuing softness in non-urea fertilizers and iii) increasing pension liabilities. Reiterate Underperform.

To read the full report: TATA CHEMICALS


Q3'09 Key Highlights

To read the report: GLOBAL IPO