AMEX: We Are a Bank, Too !
The Fed seems to be saying that American Express can now go join Goldman, Morgan, et.al. as banks.
The Federal Reserve Board on Monday announced its approval of the applications and notices under sections 3 and 4 of the Bank Holding Company Act by American Express Company and American Express Travel Related Services Company, Inc., both of New York, New York, to become bank holding companies on conversion of American Express Centurion Bank, Salt Lake City, Utah, to a bank, and to retain certain nonbanking subsidiaries, including American Express Bank, FSB, Salt Lake City, Utah.
Welcome to the club . . .
Now go chain all of your pens to your desks!
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Source:
Order Approving Formation of Bank Holding Companies and Notice to Engage in Certain Nonbanking Activities
FEDERAL RESERVE SYSTEM, November 10, 2008
American Express Company
American Express Travel Related Services Company, Inc.
http://www.federalreserve.gov/newsevents/press/orders/orders20081110a1.pdf
November 10th, 2008 at 8:00 pm
Maybe the shrinking “Big Three” can become a “bank” as well?
November 10th, 2008 at 8:05 pm
I fart in AMEX’s general direction!!
Hey Barry….why are your diaries scrolling off front page so fast??
It would be nice if they were there at least 24 hours or so.
Thanks man.
November 10th, 2008 at 8:07 pm
Only two posts on the front page? Leave ‘em on a little longer, please!!
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BR: I dont know why that is happening
How does Word Press handle this?
Can I keep posts up by number (i.e, 5) or by time, (i.e, 24 hours)
November 10th, 2008 at 8:34 pm
Doesn’t all this make you, as an American citizen who is a depositor they so covet in these regulatory slight of hands, wonder how big of a sucker you are?
November 10th, 2008 at 8:35 pm
Sleight of hand even…
Maybe us citizens to to change how we’re regulated.
November 10th, 2008 at 8:38 pm
AMEX cards aren’t much more useful than a debit card…now they’ll be able to issue one.
November 10th, 2008 at 8:40 pm
Dear Mr. Bernanke:
I would like to become a bank, so that I can receive bailout money to pay my debts.
November 10th, 2008 at 8:53 pm
What a joke. Fannie Mae, AIG, GM, Ford, Goldman, Morgan Stanley, Wells Fargo, now this. All the pigs are at the feed trough and they continue to come. Hangtime Bank will be applying for a charter soon.
November 10th, 2008 at 8:58 pm
I’m near wordless on this one. My first thot is that no one “wants” to become a bank holding company. They “have” to??? I’m really anxious, ready, and eager to be educated on this because I didn’t see this coming… I saw something coming, but not this.
November 10th, 2008 at 9:35 pm
karen,
it isn’t “the banker bailout” bill, it Is “the banker Takeover” bill..
of course, we pay the Bill, they get the Takeover..
depending on the location of your chair, a beautiful thing~
but, hey, we gots a new President, he”ll “Change” everything if we only “Hope” hard enough..
actually, it’s the other way ’round, He better Show “Change”, or “Hope” We’re too ‘Cained out to notice..
November 10th, 2008 at 9:41 pm
OT - I’m watching “The Crash of 1929″ on PBS. Great stuff. Love the old time WASP New York accents. Apparently lots of ordinary folks were getting stock tips from an astrologer named Evangeline Adams. The show explains in some detail the manipulations of stock prices by people like Michael Meehan and others.
Some guy named Roger W. Babson was the Roubini of 1929.
Highly recommend the show, if it’s being broadcast in your area.
November 10th, 2008 at 9:56 pm
Barry, why aren’t you more upset about this? You should be roiling mad!
November 10th, 2008 at 10:21 pm
Throwing a party for AIG employees - $300,000
Buying Bear Stearns - $30 B
Being declared a depository institution by the Fed - Priceless
November 10th, 2008 at 10:26 pm
As I read about this I couldn’t help but keep thinking about the following quote.
“Every normal man must be tempted at times to spit on his hands, hoist the black flag, and begin to slit throats.”
H. L. Mencken
Heres a link to a protest that was held in Iceland the other day.
http://www.youtube.com/watch?v=sBlzahb_Q7E
I lived in Iceland for 4 years a lifetime ago. Most mild mannered folks on the planet. If things continue down this path I think some noisy protests would be the BEST the elites could hope for.
November 10th, 2008 at 10:27 pm
Maybe the plan is to keep doing this stuff until Bush exits stage right? Eventually, like the boy who called wolf too often, we’ll all become bored and won’t pay any notice.
Then they can pull some really taxpayer big swindle!
November 10th, 2008 at 10:38 pm
Why does it make a difference if they apply to be a bank holding company? You don’t have to be a bank holding company to get a handout/bailout. AIG is proving that right now. You just have to be a) politically well connected or b) accrete a disasterous balance sheet during the boom years that is connected to the disasterous balance sheets of other politically well connected entities so that you can pretend to be a threat to the financial system.
November 10th, 2008 at 10:38 pm
All these “new founded banks” will be ok as long as they don’t get downgraded. Seen GNW as an example of what happens if they do…
November 10th, 2008 at 10:42 pm
This I am afraid, will all end very badly….for all us taxpayers!! These pigs can’t seem to get enough and on the other hand the middle class are left to fend for themselves.
November 10th, 2008 at 10:47 pm
Stop worrying about a pesky $1T bucks, or so.
The financial world is still WAY overleveraged:
http://www.marketoracle.co.uk/Article6756.html
Total BIS Monitored Global Derivatives: $680.3T
Total Global Capital Base (from which derivatives are derived from): $53.5T
$680T/$53.5T = 12.7x
excerpt from article:
“As you can see on the table at the “Big Picture Blog” (many thanks to them for their post), U.S. bankers should have their very own “reality TV” show entitled BANKERS GONE WILD! for how they’re rolling the dice with our money and our financial system. All the banks on this list (remember, things have deteriorated since Spring 2008) have exposure amounting to many, many times their total capital. As capital is eroded due to ongoing “realized” losses and further impairment of capital assets, the situation only gets worse. These banks must be propped up or merged together to avoid a meltdown, as we’ve already seen happening. Their exposure alone is apparently enough to consume all of the world’s capital as calculated above. This is the epitome of “hubris” and a textbook case of MORAL HAZARD that conquered an entire industry. The problem this time may not be “too big to fail” but, more accurately, “too big to save”. Only time will tell. But, seriously, do you REALLY THINK that Paulson’s $700 billion (yeah, it’s really larger than that…) bailout plan will do anything considering the size of the problem?”
So, derivatives “worth” more than their “notional” value (by 12.7x!). Yep, that sounds like a stable system to me… Good luck with that.
November 10th, 2008 at 11:05 pm
BR: Check the Reading panel of the Wordpress Settings. You can control how many posts per blog page. That doesn’t specifically control the front page, so I’m not sure why you’re only showing 2. E-mail me if you need help debugging.
Blog pages show at most
November 10th, 2008 at 11:09 pm
I just finished the PBS American Experience episode on the Crash of 1929. As a registered Republican (yup, that again), I have to say, “damn you, Barry Ritholtz”. Who do you think you are, a modern-day Roger Babson? I swear I saw a few Larry Kudlows, Bob Dolls, and even a Phil Gramm in that documentary. Too bad we elected that black bastard, Barack Obama…I swear we were working on a picture-perfect replica of 1929 until his election last Tuesday. Too bad we couldn’t have the modern-day Herbert Hoover following the modern-day Calvin Coolidge, because the next few years could have been quite entertaining.
Why couldn’t your damned stock market have started deteriorating a few months AFTER John McCain won, Barry Ritholtz???
November 10th, 2008 at 11:40 pm
Wait for GE to apply….. really wouldn’t surprise me if they tried.
November 11th, 2008 at 1:28 am
And if that wasn’t enough to make you choke, get a load of this:
US Government refuses to identify the recipients of 2 TRILLION dollars in “emergency” taxpayer loans. Don’t look at me, I didn’t get a brass farthing.
The only bright side of all this is that the greedy bastards hogging all the money refuse to spend it and that’s killing their business (finance). The old game theory axiom about people preferreing to lose money just to spite somebody rather than make money through cooperation is, sadly, true.
Cash is king, folks.
November 11th, 2008 at 8:43 am
So, we should not throw money at Detroit because they have proven themselves to be bad managers. Now tell me why we are throwing money at AmEx/AIG, etc.?
November 11th, 2008 at 9:32 am
Yes, let’s throw more money away. It is only paper…
I still like my plan. For every billion in bailout money we get one Executive’s head and all his assets. Start at the top and work on down the line. The heads should be lopped off in public. AIG is at 150 Billion, that is 150 f%$king heads.
We thirst for blood. Give me blood and I will give you eternity.
Vlad
November 11th, 2008 at 9:39 am
This is starting to look a little odd. Everybody wants to become a bank now. This isn’t being done as makework. Where’s the money? Over the short run, there probably isn’t much. Looking down the road a few months or years, what changes so being a bank is a good thing, as opposed to before the bailout plan when this would not have even been considered? There’s a scam in there somewhere.
November 11th, 2008 at 12:56 pm
when i read about AmEx last night, it made me remember this opinion piece from the great, great past of last week!
http://online.wsj.com/article/SB122584345511799173.html
no worries, Harv, we know you only ran AmEx from 1993 to 2001. everything you did during that time was golden!
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@Barry: in the Wordpress dashboard, click “settings” and then choose “Reading”. there is a setting for both # of posts and RSS entries to show.
November 11th, 2008 at 1:16 pm
fairs fair WalMart* too
wonder what that’ll look like in 25 years … the town general store, grocery store, pharmacy, medical clinic and bank all under 1 roof … thats efficiency … probably have its own zip code, TIF district and Congressional seat
November 11th, 2008 at 3:06 pm
“The Fed lets banks post consumer debt, such as credit card receivables, as collateral for loans from its discount window, which carry a 1.25 percent interest rate.”
Why am I paying almost 30% in interest rate on my credit card with AmEx? Shouldn’t that be decreased to 7% or 1.25%?