American Express Nabs $3.39 Billion in Government Bail Out Money

Now who here thinks credit cards are just too big to fail or that the U.S. taxpayer should be supplementing companies who charge rates and fees which are akin to loan sharking?

Yet, without even a whimper, American Express just hauled in $3.39 Billion of taxpayer dollars in exchange for preferred shares.

American Express joins more than 190 regional banks, commercial lenders, insurers and card issuers seeking at least $75 billion from the second phase of the Treasury’s bailout program for financial firms. Rival Capital One Financial Corp. has preliminary approval for $3.6 billion from the U.S. and Discover Financial Services asked for $1.2 billion.

Note who is in there, one of the worse credit card companies of all time, Capital One and they are approved for $3.6 billion!

Isn't this lovely? and they let these companies magically turn themselves into banks in order to join in on the land grab for your money. Didn't credit card companies already get your money with 20%, 28% interest rates, universal default and predatory fees?

These financial sector companies and their pals in D.C. are just going to bring this nation to it's knees.

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Shambles

And we wonder why our economy is in shambles - these companies drive everything, from replacing us with foreign workers through the H1B/L1 visa programs. This really sucks.

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I'm fine with bailing them out

As long as conditions of the bailout include:

-Single fixed interest rate per account (no charging less for balance transfers, more for cash at the ATM, and variable rates that change at the drop of a hat).

-usury rates set at (CPI-1%), and if your account charges more than that, it automatically goes DOWN to that level and cannot be reinstated to a higher rate

-Mandatory unemployment/death insurance on all unsecured debt, to prevent them from ever needing to ask for a bailout again

-Opt-in instead of opt-out "pre-approval" on credit rating agencies.

These four changes would certainly end *most* of the worst behavior- and downright close many companies (especially that kind of usury rate, which would give investors much better places to put their money)

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Maximum jobs, not maximum profits.

We need to replace Too Big to Fall

With the idea of Too Big To Succeed.

I can't seem to find a single company that actually runs on profits instead of credit.

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Maximum jobs, not maximum profits.

Mank bail outs

I sincerely hope that no staff including shareholders will get any bonus's or profit share now after the bail out until debts are repaid... I also hope that the salary packages of the top brass are being reviewed and cut by a few million that will see the banks closer to showing a profit!!

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Capital Requirements - One More Failed Reform - Louis XVI

Amex is doing the opposite of what was once 'good banking'. Capital Requirements were at the top of the reform list. Supposedly, the Basel Agreement will handle Cap Requirements. We saw how well that worked in 2008.

If you have good bank equity, bank failures are rare.
But the Congress Critters had no stones on that, derivatives transparency, TBTF. The next major crisis has been planned.

There is a story about Louis XVI (beheaded 1791, last absolute French Monarch). He was traveling the country in his golden coach and passed a town hall with the roof caved in and he said to his retinue,

"Now, if I were a minister, I would see to it that that roof was fixed."

I hope this sounds familiar. Periods of failed reform are a really big deal if you follow history.

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Burton Leed