American Express is being hit by slowing consumer spending and rising defaults and is now seeking roughly $3.5 billion in taxpayer-funded capital from the federal government, according to people familiar with the situation. I got the article from the Wall Street journal but they make you pay to read their really interesting stories so you are left with my analysis, sorry.
The credit card company 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 received government money, financial firms of all kinds are getting federal bailouts up the ying yang.
And those pesky tax payers, what are they getting? So far, nothing but a fatty bill from all these companies that spent their money and then ran crying to the government when there was none left.
I'm sorry Mr. Paulson and whoever else still believes a deregulated free market system will "fix" itself in the end. The reason why retailers, car companies, credit card providers and everyone else is hurting so bad is BECAUSE there was no government regulation to stop them from taking on risky business in the first place.
Boooooo American Express, if your CEO's are against any kind of socialism in America, then you shouldn't get a dime. Actually, let American Express fall, I never liked them anyway.
1 comment:
Banani i think you you are write about all of this, except the part about not liking American Express. Have you ever HAD an American Express card? They are awesome. In a world like ours where every one needs a "good credit score", and all the CC companies that try to fuck you, AMEX does a good job of protecting its customers and not holding them financially responsible for things like fraud. Also, unlike Visa and MC, they won't charge a currency conversion fee when you use the card abroad! That's not to say they didn't make a huge-ass mistake with the books, I'm just saying, I hope they don't go under (for my own sake).
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