Discover Financial: Quite Solid Results, All Things Considered

I have a long Discover Financial (DFS) position married against a short Capital One (COF) position; but in this day and age such hedging strategies are moot points. Every stock in a sector goes up (or more rarely nowadays, down) as based on HFT algorithms. Differentiating between companies within a sector is moot as all go in the same direction. Our term for this has been "monolithic trading". We're slowly adjusting to this reality even though we've been pointing it out for over 2 years.

Discover reported earnings today, and considering the economic situation, it's pretty solid, with such low costs of capital nowadays thanks to your friendly Fed. While it's a pain to savers in the country, it is great for the financial corporations of America and really, catering to them is what it is all about. As long as too many Americans don't join the "Debtors Revolution" and are happy to pay 23-30%+ interest rather than their old 5-12%, while the companies can borrow from the Fed at nearly zero, the business model could be the best on Earth. Even with 10, 15, 20% default rates.