[$tinkle]

can you help a brother out?

AmEx Said to Request $3.5 Billion in U.S. Aid

srsly. bugger off. let the free market fail these jackasses.

ed for non-subscribers:

American Express Co. which is being hit by slowing consumer spending and rising defaults, is seeking roughly $3.5 billion in taxpayer-funded capital from the federal government, according to people familiar with the situation.

The card issuer is the latest company not directly hit by the housing crisis to request cash from the federal government. While retailers, car companies and others hit by the slowdown in consumer spending haven't gotten the government money, financial firms of all kinds are getting federal bailouts.

It isn't clear if the application under the Troubled Asset Relief Program came before or after the credit- and charge-card giant got Federal Reserve approval Monday to become a bank-holding company.
Heard on the Street

* Risky Business for AmEx Holders

Since one of the New York company's bank units previously was regulated by the federal Office of Thrift Supervision, AmEx likely would have been eligible for some TARP money under its old structure. AmEx executives decided, however, the path to government aid would be quicker and clearer if it was supervised directly by the Fed, these people said.

AmEx hasn't announced the application, and it isn't known how it would use government money. While federal regulators don't disclose which institutions have been approved or denied for assistance, many companies have been announcing their own plans.

An infusion would give AmEx greater flexibility in funding its operations but likely won't help with the consumer-spending slump.

Even the most affluent AmEx customers are cutting back on discretionary purchases, the company has acknowledged. A spending slowdown is particularly problematic for AmEx because its business model revolves around consumers who pull out plastic for their purchases.

Delinquencies and defaults on credit cards also are rising. Meanwhile, the company is virtually locked out of credit markets because investors who buy consumer loans are sitting on the sidelines.

AmEx shares are down 57% so far this year. On Tuesday, the stock fell $1.58, or 6.6%, to $22.40 in New York Stock Exchange composite trading at 4 p.m.
[American Express] Getty Images

The American Express headquarters in New York City

So far, 52 financial institutions have received preliminary or final approval for about $172 billion of the $250 billion available under the capital-infusion program, according to Keefe, Bruyette & Woods, a New York firm that specializes in the financial-services industry. Another 23 companies have submitted applications for an additional $4.6 billion.

Credit-card issuer Capital One Financial Corp., based in McLean, Va., has received preliminary approval for $3.55 billion in TARP money. Companies face a Nov. 14 application deadline.

AmEx also operates a proprietary network that processes card transactions.

Rivals Visa Inc. and MasterCard Inc., which operate processing networks, aren't eligible for TARP because they technically aren't financial institutions.

 

[stoney]

That explains why my Berkshire Hathaway shares are down...

But in all seriousness, AMEX has one of the strictest policies regarding issuing credit. Wait for the other foot to drop with Visa and MC.

 

[johnbryanpeters]

Let them die.

 

[dante]

That explains why my Berkshire Hathaway shares are down...

But in all seriousness, AMEX has one of the strictest policies regarding issuing credit. Wait for the other foot to drop with Visa and MC.

really? I'd thought that they'd gotten complacent about lending to sub-prime borrowers...

 

[stoney]

There in lies the problem. If you let them (auto mfg, finance corps, cc corps, etc) die, you have unemployed 10-20% of the country. Because we have become a service based economy, too many people have no training to do anything that produces a physical result. Once you lose a large % to unemployment, you start a very slippery slope of govt help which can not be supported, as those paying the most (read taxes) begin having to pay more to support those without work. Once those who pay the most run out of work, as the economy continues to die, you add another layer of unemployment. it builds until the bottom falls out, however once the bottom falls out, labor becomes so cheap that people start getting hired again as manufacturing comes back on shore and our products are shipped globally. But... the bottom point is the problem. That and how much the govt spends (read debt) to slow the slide, support people in the interim. It will have to be re-paid at some point, and by who? Not usually those who used it, but the next generation. Very vicious cycle.
Govt needs to minimally support those companies that need to stay alive to support the economy, but take an axe to those that are "too big to fail". They need to be vicious and get the firms back to a managable size.

 

[stoney]

really? I'd thought that they'd gotten complacent about lending to sub-prime borrowers...

Not to the same level as Visa/MC. They have recently opened up Blue cards, but they are hard to get still. My fiance can get one, but I can't... And I have an Alt-A level (one level below prime) credit score. Hers is well into the upper 800's though...

 

[$tinkle]

And I have an Alt-A level (one level below prime) credit score. Hers is well into the upper 800's though...

so she's charting new territory? (max is 850 i thought)

ed: vantage or fico?

 

[dan-o]

so she's charting new territory? (max is 850 i thought)

Joker measures his own accomplishments in Pink Bike feet.

 

[stoney]

so she's charting new territory? (max is 850 i thought)

ed: vantage or fico?

that's what I was referring to (fico) of near 850.

 

[$tinkle]

seems no one can agree: http://www.creditscoring.com/pages/funwithnumbers.htm

 

[jimmydean]

The black card FTL.

 

[Silver]

That explains why my Berkshire Hathaway shares are down...

But in all seriousness, AMEX has one of the strictest policies regarding issuing credit. Wait for the other foot to drop with Visa and MC.

Visa and Mastercard don't issue the cards. Banks do.

 

[johnbryanpeters]

...
Govt needs to minimally support those companies that need to stay alive to support the economy, but take an axe to those that are "too big to fail". They need to be vicious and get the firms back to a managable size.

Yeah that.

 

[$tinkle]

everythings in the crapper yet again:

at least if my car & house get repo'd, i won't have to worry about making my payments

 

[johnbryanpeters]

Next time, pay cash.

 

[Samirol]

There in lies the problem. If you let them (auto mfg, finance corps, cc corps, etc) die, you have unemployed 10-20% of the country. Because we have become a service based economy, too many people have no training to do anything that produces a physical result. Once you lose a large % to unemployment, you start a very slippery slope of govt help which can not be supported, as those paying the most (read taxes) begin having to pay more to support those without work. Once those who pay the most run out of work, as the economy continues to die, you add another layer of unemployment. it builds until the bottom falls out, however once the bottom falls out, labor becomes so cheap that people start getting hired again as manufacturing comes back on shore and our products are shipped globally. But... the bottom point is the problem. That and how much the govt spends (read debt) to slow the slide, support people in the interim. It will have to be re-paid at some point, and by who? Not usually those who used it, but the next generation. Very vicious cycle.
Govt needs to minimally support those companies that need to stay alive to support the economy, but take an axe to those that are "too big to fail". They need to be vicious and get the firms back to a managable size.

I agree and disagree. Those that pay the most taxes won't start paying more, they have a very strong guiding hand in policy and conservatives will come out crying about taxing the "most productive". Those that pay the most taxes will never go out of work, because they don't work, their money works.

The thing is that unless people are being paid a dollar a day, you won't see a giant manufacturing boom.

If unemployment hits 10%, we will need a massive New Deal program. Instead of wasting hundreds of billions in military expenses, we could fix the infrastructure of our country and strengthen our energy grid with more renewables and less coal.

 

[$tinkle]

luckily, my checking acct can cover my car, and i'm 90% paid on my home.

good thing i don't have to pay these balances in 30 days, like amex. wonder if they'll have these same terms foisted upon them as a condition for bailout? oh, sweet justice.

 

[RenegadeRick]

...Instead of wasting hundreds of billions in military expenses...

Ding, Ding, Ding! We have a winner!

Even the most hawkish among you must now see that our military misadventures are the root cause of this financial mess.

I (and Ron Paul) have been saying this for some time now. Unfortunately, it doesn't matter that we were right. It only matters that nobody listened.

Hey by the way, check out the latest lunacy from the King Paultard himself.

Most Republicans endorsed this view in order to achieve victories at the polls. Limiting government power and size with less spending and a balanced budget as the goal used to be a "traditional" Republican value. This is what Goldwater and Reagan talked about. That is what the Contract with America stood for.

The opportunity finally came in 2000 to do something about the cancerous growth of government. This clear message led to the Republican success at the polls.

Once the Republicans were in power, though, the promises faded, and all policies were directed at maintaining or increasing power by trying to whittle away at Democratic strength by acting like big-spending Democrats.

The Republican Congress never once stood up against the Bush/Rove machine that demanded support for unconstitutional wars, attacks on civil liberties here at home, and an economic policy based on more spending, more debt, and more inflation -- while constantly preaching the flawed doctrine that deficits don't matter as long as taxes aren't raised.

But what the Republican leadership didn't realize was that ALL spending is a tax on middle-class Americans through price inflation and that eventually the inevitable consequence is paying for the extravagance with a financial crisis.

Wow. That is some shizzle, dawg.

 

[dante]

Financing from the gov't includes the following terms:

8.99% FIXED APR for the first 90 days*

*rate can change at any time, for any reason, including during 90 day initial period
rate change can be retroactive to start of loan
max APR is 32.99%, compounded daily plus:
4% penalty for paying on time
6% penalty if your financial state is different than when loan originates
14% (current balance) or 25% (of the original loan amount), early payoff penalty, whichever is greater
12% royalty for having America, American, or USA in your company name
5-25% discretionary penalty

 

[Defenestrated]

Quick, socialize the corporate losses!