Tuesday, December 8, 2009

VISA and the Health of the American Consumer.

Visa is an interesting stock listed on the NYSE. It can be argued that V can be viewed as a proxy for direct consumer participation in the economy, especially activity related to the amount of consumer credit being utilized. Market watch offers the following profile for the company.

Visa Inc. was incorporated on May 24, 2007. It operates as a retail electronic payments network and manages the world's most recognized global financial services brand. It facilitates global commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses and government entities. The Company provides financial institutions, its primary customers, with product platforms encompassing consumer credit, debit, prepaid and commercial payments. VisaNet, the Company's secure, centralized, global processing platform, enables it to provide financial institutions and merchants with a range of product platforms, transaction processing and related value-added services.

If consumers are not capable of returning to the credit driven consumption binge that drove the economy for many years, the fortunes of Visa may be adversely effected. This is a company worthy of monitoring on an ongoing basis: Like the Baltic Dry Index and the Dow Transports, the behaviour of this company could be a harbinger of future economic health: ergo stock market activity.

This chart is from The Fundamental Analyst blog and does not paint a very rosy picture of the credit scenario.

This chart is of Visa as of Friday December 04, 2009. As the adage goes: A picture is worth a thousand words.

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