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Quick Thoughts – Corn, Inflation and the Consumer

According to yesterday’s Crop Progress Report from the U.S. Department of Agriculture, 2% of the nation’s corn crop has been planted thus far, compared to 3% at the same time last year and 6% historically – small numbers, to be

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Quick Thoughts – KO

KO this morning reported Q1 EPS of $0.44 per share, consistent with consensus estimates, a result that we expect will be sufficient to move the shares higher given just how bad we see the sentiment on the name currently. Global

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Quick Thoughts: First Data Announcement Highlights Increasing Integration of Payments and Marketing

Yesterday, First Data (the leading US acquirer with 18% share – see below) announced the addition of support for loyalty marketing to its Clover platform which competes with Square Register, for example. Like Leaf from HPY and Square Register, Clover

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US Payments: A Primer on Merchant Acquiring

Merchant acquiring – the business of providing merchants with authorization for card payments and settling and clearing transactions, often but not always through the branded (including EFT) networks, so that funds are moved from the merchant account to the cardholder

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DFS: Capital, Opportunity, and Discipline

We estimate DFS has excess capital of $2.5bn (given that its 2015 Tier 1 common ratio is 8.7% under the CCAR severe-stress scenario, after the just-approved capital plan, versus a minimum requirement of 5% of risk-weighted assets that are currently

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No Free Lunch: A Primer on Interchange and Debit

This note comments on the WMT suit filed yesterday against Visa in the context of the broader impact of interchange on the structure of the card payments industry, particularly in debit. The dynamics are more involved than in many industries

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Quick Thoughts – BAC Capital Tsunami: Expect Stock Buyback of over $10bn in 2015

Last night, the Fed announced its review of bank capital plans for 2014 (March through March), including BAC. BAC was approved to buyback $4bn of stock and raised the dividend to 5 cents/quarter from a token penny. BAC also announced

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AXP: Structurally Improving Business Model

The economics of AXP’s business model are improving meaningfully as it overcomes the anti-competitive constraints imposed by V and MA through the exclusionary rules (preventing Amex from distributing its network services through the bank channel) which were struck down by

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Quick Thoughts: Appeals Court Ruling on Debit will Galvanize MCX

Late Friday, an Appeals Court overturned a July-ruling from the District Court that the Durbin cap on debit interchange be lowered and that debit cards be activated for unaffiliated networks to handle signature-authenticated transactions (as opposed to the Federal Reserve

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Quick Thoughts: BAC/COF – Rising Net Interest Margins and Payout Ratios

Bank stocks have rallied sharply as the market interpreted comments on Wednesday by Fed Chairman Yellen that short rates would increase earlier than previously discounted. We continue to see BAC (up 4% over last two days) as the best play

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