short

The attached image basically sums up my current investment thesis - credit cards are the next mortgages. Think about it this way - the average household has $2,000 in credit card debt that they carry over from month to month. These are the same people that are defaulting on their mortgages left and right. The thing is though, credit cards have much more lenient terms, allowing people to put off payments again and again. They are also unsecured. If you don’t pay your mortgage, at least the bank gets your house. If you don’t pay the credit card, the lender has no recourse.

So the strategy is - short Visa (V), Mastercard (MA) and Discover (DFS). Going to leave AMEX alone, as their lending policies are stricter.

Thoughts? Are there better ways to short credit card debt than shorting the individual credit card companies’ stock?

Whoever said China, the largest communist country in the world, has a free-er market than the US was dead on. The last time the NYSE banned short-selling, they had to repeal it two days after because it was artificially raising prices (no fucking way!).

What next? Reinstate the uptick rule?

Better yet, why not just follow Pakistan's lead in forbidding the market to drop?
http://www.cnbc.com/id/26439444

For SEC announcement:
http://sec.gov/news/press/2008/2008-211.htm

It seems that short sellers are under fire in both the U.S. and the U.K. So the question is simple, did short sellers bankrupt Lehman Brothers and AIG? Maybe the question is, how much did they have to do with it?

Fear and rumors? Naked short selling? Whatever happened to fundamentals?

Short Sellers on Bloomberg