Through The Fly's Eyes: Credit Card Debt
MacroMavens Says Short Credit Card Companies; Go Long Fannie Mae
Credit card debt has been soaring since the home equity loan market has dried up, according to MacroMavens. Leading companies in this space - America Advance (AEA), Cash America (CSH), Dollar Financial (DLLR), EZCORP (EZPW) and ACE Cash (ACE) - have seen revenues jump 50% during the past three years and could be headed for trouble.
While credit card debt has been increasing, home equity loans have been in a decline and lending terms have become much more stringent - thereby reducing the risk exposure of these companies.
MacroMavens, in the Alan Abelson column this past weekend, suggests shorting the subprime credit card companies and going long Fannie Mae (FNM).
MacroMavens also suggested shorting regional banks and mortgage brokers.