US Consumer Confidence Sinks Further in Jan

The bottom continued to fall out from consumer confidence in January with the ongoing inability of the government and the private sector to stabilize the economy. The composite “RBC CASH Index” stands at 13.3 for January, 2.9 points below November, and a six-year low. However, RBC notes that slide in consumer confidence is offset somewhat by an increase in expectations for the future, just days before President-elect Obama is inaugurated. The “RBC Jobs Index” saw an incremental drop of nearly 4 points in January to 61.8, compared to 65.6 last month, and a new all-time low. The “RBC Current Conditions Index” dropped to another all-time low in January and currently stands at 8.7, compared to 16.5 last month. The “RBC Investment Index” currently stands at 22.5, down from 31.0 in December. However, the “RBC Expectations Index” was the one bright spot, actually improving in January to -11.3 from -21.2. RBC says a lack of decisive action and some quick results by the incoming Obama administration could negatively affect the economic confidence of the American public, causing it to sink yet further.

RBC CASH INDEX
Jan 08: 56.3
Feb 08: 48.5
Mar 08: 33.1
Apr 08: 29.5
May 08: 39.0
Jun 08: 22.5
Jul 08: 14.6
Aug 08: 33.8
Sep 08: 69.2
Oct 08: 37.0
Nov 08: 34.7
Dec 08: 15.3
Jan 09: 13.3
Source: Royal Bank of Canada

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NOV INDEX

The Conference Board Leading Economic
Index declined 0.5% and The Conference Board
Coincident Economic Index decreased 0.6% in November.
The LEI declined for the third consecutive
month. Two of the six components that make up the leading
economic index increased in November. The positive contributors are the
Spanish contribution to Euro M2, and the inverted long-term government
bond yield. The negative contributors are order books survey, job
placings, and the Spanish equity price index. The capital equipment
component of industrial production remained unchanged.
Between May and November of 2008, the LEI declined by 2.1% (about a -4.1%
annual rate), below the 1.2% decline (about a -2.5% annual rate)
from November 2007 through May 2008. In addition,
the weaknesses among the leading indicators remained widespread.
The leading economic index has been falling since the first
quarter of 2008, decreasing by 3.6%
since February, its largest decrease since 1992. The coincident economic index has also been falling
since its peak in February 2008, experiencing its most severe
contraction since the 1992-93 downturn. Taken together, the recent
behavior of the composite indexes suggests that economic activity could
contract further in the near term. The leading economic index
now stands at 108.4 (2004=100).

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TD Retail Card Acquires Canadian Portfolio

NJ-based TD Retail Card Services has acquired the private label credit
card program of Montreal-based jewelry retailer Birks & Mayors. Under
the agreement, TD will direct all facets of the program for the 37 Birks
stores, which are located in major metropolitan markets across Canada.
The Birks card can also be used for online purchases on the retailer’s
website, www.birks.com. Following the move to TD Retail Card Services,
Birks cardholders will continue to be able to avail themselves of a
number of financing options, including interest-free and low-interest
offerings, as well as a customer loyalty rewards program and a variety
of special incentives and services. Through the program’s rewards
feature, cardholders will continue to earn gift certificates equal to a
percentage of their total annual purchases. Additionally, cardholders
will continue to enjoy such benefits as free jewelry cleaning, gift
certificates on their birthday, free deliveries, free engraving of up to
10 characters with any purchase of $200 or more, and advance notice of
all Birks special events, promotions and sales.

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Chase Cards Post a Whopping $371MM Q4 Loss

J.P. Morgan Chase reported a fourth quarter net loss of $371 million for its credit card business, compared to a profit of $609 million for the year ago quarter. The decline was attributed to higher loan loss provisions, partially offset by higher net revenue due to the recent WaMu acquisition. The managed net charge-off rate for the quarter was 5.56%, up from 3.89% in the prior year and 5.00% in 3Q/08. The 30-day managed delinquency rate was 4.97%, up from 3.48% in the prior year and 3.91% in the prior quarter. Excluding Washington Mutual, the managed net charge-off rate for the fourth quarter was 5.29% and the 30-day delinquency rate was 4.36%. Chase reported that its fourth quarter ROE for cards was negative 10%, down from positive 17% in the prior year. Pretax income to average managed loans (ROO) was negative 1.16%, compared with positive 2.51% in the prior year and positive 1.17% in the prior quarter. End-of-period managed loans were $190.3 billion, up 21% from the prior year, and up 2% from the prior quarter. Charge volume was $96.0 billion, an increase of 1%, from the prior year. Excluding Washington Mutual, end-of-period managed loans were $162.1 billion and charge volume was $88.2 billion. Merchant processing volume was $135.1 billion and total transactions were 4.9 billion. Chase also noted that net accounts of 4.3 million were opened during the quarter and branch sales of credit cards increased by 56%. For complete details on Chase’s fourth quarter performance, visit CardData (www.carddata.com).

JPM CHASE HISTORICAL ($billions)
4Q/07 1Q/08 2Q/08 3Q/08 4Q/08
EOP Outstandings: $157.1 150.9 155.4 159.3 190.3
Charge Volume: $ 95.5 85.4 93.6 93.9 96.0
Source: CardData (www.carddata.com)

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MONEYBOOKERS & MAGENTO

Online payment system Moneybookers has added a plug-in for Magento to
enable customers to pay directly to a shop operator.
Moneybookers’ Magento payment system was co-developed by Phoenix Media
and is programmed so that it can be built into a Magento shop in just a
few steps. Retailers can then easily sign up for a Moneybookers merchant
account via the backend of the system. The advantages of using the
system include the simplicity of the payment process, as well as the
attractive conditions and services which Moneybookers offers. For
example, Moneybookers’ risk protection service runs precautionary checks
on all customer data. Moreover, once the online retailer’s entry payment
has been processed, an immediate confirmation is sent by Moneybookers.
This payment service is available for any overseas activities – at no
additional cost. Moneybookers is one of Europe’s largest online
payments systems and one of the world’s largest eWallet providers with
over six million account holders.

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NFC COMPETITION

The NFC Forum is extending the submission deadline for the NFC Forum Global Competition to February 28, 2009.
In the competition, developers in a “Commercial Track” compete for the
honor of having their solutions named “The Best NFC Product of the Year
2009,” while a “Research Track” recognizes “The Most Innovative NFC
Research Project of the Year 2009.” Winners in each track will be
awarded cash prizes. The competition’s goal is to promote the development and deployment of
innovative and exemplary NFC services. For both commercial and research
developers, the NFC Forum Global Competition is more than just an
opportunity to win an award. Finalists and winners may look forward to
global media coverage, increased awareness among attending industry
leaders and venture capitalists, and opportunities to forge partnerships
and share ideas. The “Commercial Track” is for business ideas that address a specific
market, business or consumer need or want. Entries are evaluated on commercial
viability and how successfully and innovatively they meet the identified
need using NFC technology. The “Research Track” is open to the academic community, including
university student teams and institutions and each submission requires an explanatory abstract of no more than 3,000 words
that identifies the challenge addressed and outlines the approach taken.

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CU Card Consolidation White Paper Issued

TNB Card Services has released “The Case for
Consolidation,” a white paper that examines reasons why credit unions
should move to single-source processing for debit and credit card
programs. Having a single point of contact for settlement issues,
authorizations,
card activations, chargebacks, and call center support allows credit
unions to respond more rapidly to cardholder needs, eliminates redundant
practices, and improves back-office operations. A single processor also
has the ability to easily establish and market a
rewards program that can combine points across multiple card products,
as well as other credit union products and services, such as online bill
pay, home loans, and auto loans. A single
processor for all debit and credit card transactions gives credit unions
the ability to better manage their card programs.

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OKI THERMAL PRINTERS

OKI Printing Solutions brand has unveiled several new solutions in printing technology.
New products include a new compact series of thermal label printers, including “LP441”,
“LP470” and “LP480” which provide the fastest speeds and highest print resolution of
any other portable label printer in its class, available with an
industry-leading, one year overnight exchange warranty. All OKI Printing Solutions’
products are built on parent company OKI
Data Corporation’s history of leadership and innovation in color
printing. It is based on printing technologies advanced by OKI Data
Corporation, such as digital LED technology and Single Pass Color. This
technology allows OKI Data to manufacture products that require fewer
moving parts for increased reliability.

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NOV DEBT

Growth in credit card debt picked-up some steam in November, rising A$551 million to A$45.3 billion. However, credit card volume dropped significantly by A$1.8 billion since October to A$17.6 billion.
Also, credit card limits declined for the first time since the Reserve Bank of Australia began tracking credit card metrics in 1985. Year-on-year credit card debt growth has slowed to 8.1%, compared to 8.3% in the prior month and 10.3% one-year ago. For November credit card volume decreased 4% year-on-year and 9% sequentially. In October credit card volume set a new record of A$19.4 billion. Credit limits now stand at A$122.3 billion, compared to A$122.5 in October. According to the Reserve Bank of Australia there are currently 14.3 million credit card and charge card accounts in Australia, compared to 13.9 million one-year ago.

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Discover Names CEO David Nelms as Chairman

Discover has named CEO David Nelms to Chairman of the Board and elected
Lawrence Weinbach as lead director. Nelms will replace Dennis Dammerman
Weinbach has served on the Discover board since the company went
public. A partner of Yankee Hill Capital Management LLC since 2006,he
currently chairs
Discover’s Nominating and Governance Committee and will continue in that
role in addition to becoming lead director.

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Cap One/CA eLearning Site Goes Bilingual

Capital One Financial Corporation and Consumer Action have released
their joint interactive financial education “MoneyWi$e eLearning” tool
in English and Spanish. The “MoneyWi$e eLearning” tool is the latest
initiative in the MoneyWi$e
financial education program. The partnership between Capital
One and Consumer Action was designed to help promote financial literacy
by providing consumers with free access to the information and tools
they need to make smart financial choices. The “MoneyWi$e eLearning”
course covers basic financial education topics including: talking to
teens about money; managing your money; building good credit; rebuilding
credit and savings to build wealth.

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