Chronicles Of Depression 2.0: #387: AmEx
NEW YORK (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 (AXP, Fortune 500) 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.
Emphasis added by me.
Wait one minute here.
Why not just write off the damned bad debt instead of sneaking behind all of us and stealing our money to make up for their customers defaulting?
You want our goddammed tax money, AmEx, you send all of us a fucking card! And make it Platinum!