Couldn’t Amex just, you know, charge it?
‘It’ being the estimated $3.5bn in taxpayer-funded capital it is seeking from the US federal government, according to a report in the Wall Street Journal.
The request suggests Amex’s sudden conversion to a bank holding company may not be enough to allow it to cope with slowing consumer spending and rising defaults.
That conversion was fast-tracked because of the “emergency conditions” and “the unusual and exigent circumstances” in financial markets.
Per the Journal:
…it isn’t clear if the application under the Troubled Asset Relief Program came before or after the credit- and charge-card giant got Federal Reserve approval Monday to become a bank-holding company.
But the timing doesn’t matter. What does matter is that governments have crossed a dangerous threshold; they continue to reward excessive risk-taking and effectively punish anyone that was even remotely fiscally responsible.
Ergo - FT Alphaville is officially requesting taxpayer-funded capital from any of the laundry list of governments that have opened up their coffers recently. We promise not to blow it all on lunch, though we might lever ourselves up a bit and try to get in on the distressed asset action.
We’re not worried about the risks - someone will bail us out. Guaranteed.
Related links:
Your not so flexible friend - FT Alphaville
Fannie Mae to Paulson: Please sir, may I have some more? - FT Alphaville
How to save yourself, as US taxpayers’ expense - FT Alphaville
Top Tarps: FRBNY beats Treasury - FT Alphaville
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