Posted on 11/11/2008 1:42:41 AM PST by Freedom_Is_Not_Free
American Express, the nation’s last big independent credit card company, said late Monday that it would transform into a bank holding company to strengthen its position in the market turmoil.
Federal Reserve banking regulators said they approved its application because of the “unusual and exigent circumstances” roiling financial markets and the company’s interest in tapping up to $3.8 billion in government money. As a full-fledged bank, American Express would gain greater access to the Treasury Department’s bailout plan for banks, a move that might allow it to lend more freely and perhaps acquire a larger deposit-taking institution.
American Express customers are unlikely to notice the changes. But Monday’s announcement may also represent the end of financial companies operating a single line of business and depending on the capital markets for financing.
Goldman Sachs and Morgan Stanley recently transformed themselves from investment banks to bank holding companies after being battered by the markets. Big lenders like GMAC, the finance company partly owned by General Motors, and General Electric’s financial subsidiary have similarly been considering becoming banks.
American Express executives have publicly maintained they did not need to become a bank holding company, although they also never completely ruled out that option. But when their financing costs soared as the commercial paper markets froze , the company increasingly recognized it needed to diversify its sources of financing. The company applied for banking holding company status about two or three weeks ago, according to a person with direct knowledge of the situation.
(Excerpt) Read more at nytimes.com ...
They can’t line up at the trough fast enough.
Where the hell does this end? Seriously, where? Is the Fed just going to monetize the entire economy until we spell Zimbabwe?
Just UFB
Just a humble opinion....but with my past dealings with American Express...this would be the last place I’d go to have a bank account with or a credit card. I can’t imagine any idiot doing business with these guys. I’d even go to some small town 1-bank operation in the middle of Red Bay, Alabama...before I’d sign up with AE.
So when does the US Post Office become a bank holding company? Maybe United Airlines will be the next bank holding company, or maybe TelMex, the national telephone company of Mexico.
How about whorehouses in Nevada? I can see it now — the United Bunny Ranch Bank. A free _job with every deposit.
How do we get in on this scam? I wanna become too big to fail. The question is — is the US too big to fail. Sadly, I think not.
LLS
Ditto your post... been with them since ‘79.
Ditto your post....been with them since ‘67.
Buckle up, it’ll get worse with Obama coming online. If Bush does refuse to bail out the automakers (would be nice!), you can be sure that Obama will, and we the taxpayers will be paying for all those gold plated benefits and salaries of the unions (not to mention the executives). Of course we’re about to pay out 7 bil of bonuses to Wall Street, so hey - what’s just another few billion among “friends”.
I own a business that sells industrial welding controls on the internet and via phone. Of all credit card purchases American Express cards are used less than 1% in comparison to all card sales. Furthermore, American Express charges us a discount fee of approximately 100% over Discover, Visa and Master Card on sales. No wonder they are in financial trouble...businesses can’t afford to sell in accordance with their rules and rates.
We have dropped American Express as one of our funding card services and will not do business with them again.
Before we do Zimbabwe we need to nationalize the debt which starts by nationalizing these creditors. They work their financial magic and pass along the bad debt to the Fed and Treasury. They tell us they are buying the cow, but as the old saying goes, why sell the cow to the govt guy when you can sell him the manure instead?
Like power and water, finance should function as a utility serving the real economy. Instead, finance has grown so large that it is sucking the energy out of the real economy, destroying it.
That it. I’m starting my own bank.
Gimme Gimme Gimme Bank One
Does anybody see how all of these bailouts cannot lead to anything but massive inflation?
Aren’t we looking at 70’s style inflation or worse?
However, in instances where I had to refute charges, AMX shined above all others in that regard.
“Buckle up, it’ll get worse with Obama coming online.”
This _is_ Obama coming online - been this way since it was obvious to Wall Street that he would win - August, maybe earlier. And it’s been brewing since the Dems took over congress.
Call your COngressman, and tell HIm No How No Way it Stops NOW!
No Amex, No Auto Companites NO NO NO!
Indeed, I can only see it getting worse with Obama. That is saying a lot after Bush. Can’t wait to hear his choice for Treasury.
It is fascinating watching AIG blackmail the government. Funny thing about blackmail — you think the extortion payment is all, but you have to know in your heart they will be back for more since they still have you over a barrel. The only way to get them off your back is to kill them and get it over with. AIG has been brilliant. Please give us $85 Billion, oops more, we need even more. They can keep this up for years, sucking on the government teat and constantly threatening to go under.
UFB.
Let me see if I have this straight. American Express can’t pay it’s bills. Now I’ve been a member for decades and those few times where they lost my check they were unmerciful with the dunning letters. Now that their checks are both lost and worthless they want me to pay that bill too? I don’t think so. They can go in the bucket with the rest of the marxists.
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