American Express Seeking Taxpayer Bailout
November 12th, 2008Don’t leave home without it.
Via: AP:
American Express Co. is seeking $3.5 billion in funds under the government’s plan to directly invest in financial firms, according to a Wednesday report in The Wall Street Journal citing unnamed sources.
Earlier this week, American Express received approval from the Federal Reserve to become a bank holding company, which is a similar structure to traditional commercial banks. The credit card company now has access to financing from the Fed and the ability to grow a large deposit base.
The increased funding opportunities through government programs, including the potential $3.5 billion investment, could be a huge boost to American Express as one of its primary sources of funding has nearly disappeared amid the ongoing credit crisis.
American Express relied on packaging pools of credit card debt and selling them to investors in the securitization market. As investors have shied away from purchasing all but the safest forms of debt, the market for credit card-backed securities has dwindled.
American Express is also facing a slowdown in the broader economy, which has led to more customers missing payments and cutting back on spending, hurting the company’s profitability.
I think American Express has already become a “bank” and is solvent because it now has money for operations
http://www.businessweek.com/ap/financialnews/D94DINV00.htm
Isn’t it sweet? No one wants to “invest” in debt anymore.
To write this gave me a very wry chuckle.
Investing in debt and its “future value,” or in “futures” of commodities has made the financial world go round for so many years. Lots of money has been made on this Ponzi scheme. There’s no way this house of cards wouldn’t collapse when the very loose rules required some accounting for the values of these bets on debt.
The accounting ledgers across the world have been cooked for years, and now, rules require they be accounted for re mark to market. And those who have been lying, cheating and stealing are falling faster than well, I forget the old saying.
I for one am feeling that truth should be out, not in.
I just wish the powers that be would not be attempting to quash the truth out movement that eeks out by dribs and drabs.
Make an announcement!
We were STUPID!
We invested in, made lots of money off of investing in debt, and NOW WE ARE BROKE.
We were SUCKERS.
But no, we can’t have corporations admitting to to faulty practices now, can we?
Rather than crash and burn like Enron, we’ll just have Treasury and Federal Reserve cover our asses with some beyond the comprehension of the ordinary citizen a program that is sublingual.
Put this pill under your tongue. It will go into your bloodstream very quickly.
In five seconds, you won’t even want to think about what these bailout programs mean to you, your children, or what FINANCIAL COLLAPSE means.
Sheesh. I read somewhere in the last year that nutmeg is a hallucegenic. Maybe I ought to get me some because I want to be on a trip out a here. Shortly.