Are Investors Betting On The Collapse Of The Great Credit Card Duopoly?

The market rallied hard today, but there were two big losers: Visa & Mastercard.

If you haven’t been following them, the former stock market darlings — seemingly all the hedge funds were bullish on these two — are now both at 52-week lows.

Here’s a look at MasterCard in recent months. Visa’s chart is practically identical, day for day.

chart

Photo: StockCharts.com

The proximate cause of today’s decline: A downgrade from Sanford Benrstein analyst Rod Bourgeois.

According to The Street, the downgrade warned of increased interchange fees and a robust Consumer Financial Protection Agency that might claw into both of the firms’ profits. Similar regulatory threats are creeping in Europe.

Then there are obviously the question marks surrounding consumer spending, and there are also various startups in the payment space, looking for their slice of the action.

As for the Consumer Financial protection Agency, it sounds as though The White House is getting closer and closer to appointing controversial consumer advocate and professor Elizabeth Warren. There were reports, which The White House denies that to avoid a nomination fight, the White House would appoint her on an interim basis.

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