Another bailout

What the hell is going on with American Express? From today's Wall Street Journal.

American Express Co. which is being hit by slowing consumer spending and rising defaults, is seeking roughly $3.5 billion in taxpayer-funded capital from the federal government, according to people familiar with the situation.

The card issuer 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 gotten the government money, financial firms of all kinds are getting federal bailouts.

I didn't get to read the whole thing because I'm not a subscriber, but I don't think we should be bailing out everyone who is suffering a slowdown. Especially not credit card companies. As I understand it, AMEX recently became a bank holding company and is trying to cash in on the generous bailouts offered to the financial industry.

“Given the continued volatility in the financial markets,” said Kenneth I. Chenault, chief executive of American Express, “we want to be best-positioned to take advantage of the various programs the federal government has introduced or may introduce to support U.S. financial institutions.”

Oh! I get it. AMEX becomes a bank holding company and immediately gets in line for the free cash from the Fed.

What horseshit! I'd like to become a bank too, and get a bailout. Not a big one, but maybe a couple of million would tide me over until after Christmas.

I see American Express (AXP) stock prices dropped 10%, to $20.05 on news of the bailout request. Good. They don't need a bailout. That's my money they're playing with.

While I'm at it, GM and Ford don't need a bailout either. If they'd make cars that the consumer wants and sell them at a price the consumer is willing to pay, they'd make plenty of money. If they'd get out from under the UAW thumb, they'd probably make money too. I don't know if stupidity or labor is dragging them down the worst.