Friday, July 3, 2009

Visa, Debt and Cycles.

Click to enlarge chart

Four charts encapsulate the state of the economy from the standpoint of the consumer's position to sustain consumer growth. The first BankAmericard (now Visa) bank credit card was introduced in 1958, shortly after American Express issued their first card earlier that year. Since that time consumers have learned to use their credit card as WMCs. (Weapons of Mass Consumption). Without the fuel to keep the engines of consumption purring, the WMCs could easily become WMDs. Incidentally, Visa had its initial public offering in March of 2008, just as the vanguards of Wall Street were beginning to crumble. You cant say that some dont know how to time the markets accurately!!!!!!!
Visa (V: NYSE) is at an interesting price-time juncture from a technical perspective. Monitoring the behaviour of this corporation's 'chart' may serve as an excellent harbinger of future events for the economic recovery--or lack thereof.
Chart : Bigcharts,com


  1. Thanks RD for the great charts and thoughtful commentary. Things look bad for Consumer Spending going forward,..and everyone agrees about that.

    I find no forecast looking for strong consumer spending. From a contrary perspective this is worrisome, and suggests perhaps that the worst is already priced in.

    Thanks for your blog,..always interesting.

    Regards, Jim P.

  2. Good Point...Contrarians always.

  3. good point and pardon my ignorance,whats a contrarian - someone who argues the point or who fights for the underdog - there will be no consumer spending for months to come but we must leave all of this natter in the very capable hands of our respective governments - NOT - lets all just go bankrupt and blame visa and the government!

  4. a contrarian is someone who is comfortable going against market sentiment--one who uses market sentiment such as Bullish consensus as a contra-indicator. For example if 80% of analysts are said to be bullish on the market, a contrarian will look for technical and/or fundamental indicators to establish shorts positions.