Discover’s scary slideshow…

January 30, 2009

Earnings season usually goes hand in hand with boring PPT presentations. But the one that Discover Financial Services (DFS) put out yesterday certainly caught our attention because of some of the scary slides smack dab in the middle. The slideshow was included in this 8K that was filed yesterday.

By far, the scariest slide is the one on pg. 26, which shows a map of bankruptcy filings in the United States. In four states — Arizona, California, Nevada, and Idaho(!) — filings have more than doubled since last year. In another five states — Florida, Oregon, Utah, Washington and Vermont(!), they’ve increased between 50% to 100% since last year. Only five states — North Dakota, South Dakota, Texas, Louisiana and Pennsylvania(!) — saw bankruptcies increase less than 15%. The national average is 35%. The exclamation points, by the way, are my attempt at expressing surprise, since I don’t recall reading any stories about serious financial problems in Idaho or Vermont and would have expected Pennsylvania to fare a lot worse.

The slides also have some interesting details about several of Discover’s competitors, including American Express (AXP) and Capital One (COF). For example, fully 26% of Amex’s receivables are in two of the hardest-hit states: California and Florida. Bank of Ameria (BAC) and Citibank (C) are both only slightly better at 22% each. On pg. 24, there was also an interesting graph that shows a rising trend of both unemployment (which is well known) and a much harder figure to measure: underemployment, which seems to be growing pretty dramatically.

While all of this data is probably out there in different places, the slideshow pulls it together in one cohesive place to present a pretty scary view of how much further this crisis has to go.

One final reminder: if you haven’t taken the footnoted.org annual survey yet, I hope you’ll take a few minutes to do so. We only do this once a year and it’s an important tool that lets me get a better idea of who’s reading the site and ways to improve it in 2009!

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