Why This Downturn Is Different

• Report this Comment On December 05, 2008, at 12:26 PM, Decibel45 wrote:

  I remember reading a few months ago that American Express was greatly reducing the amount of credit that they were extending to people, trying to focus back to lending to the most affluent. I'm wondering if that's what's impacting their cash flow.

• Report this Comment On December 05, 2008, at 5:50 PM, tvadamfool wrote:

  American Express, apparently in their race to become a "bank," has performed a re-evaluation and has turned over thousands of accounts, many of them payment-current, for third-party collections. This is being done in a random and erratic fashion, and their own employees appear to have no clue as to how and when these accounts are being selected for closure. I smell an accounting scam.

  Although those first, belligerant phone calls can be quite unpleasant, this may ultimately be the best possible news for the Amex customers involved. The repayment plans they will be able to negotiate with the collectors are certain to be much more favorable than what they have been charged by Amex, whose interest rates, penalties, and fees are among the very highest in the industry.

  I don't know what they were thinking, and I absolutely oppose their receipt of a single penny in bailout funds, but good for those consumers who may be able to gain some breathing room!

• Report this Comment On December 06, 2008, at 10:15 PM, ARJTurgot wrote:

  AMEX has been a mess for a long time. This will just be yet another action that will lose customers. I suspect what has kept them going has been monopoly status at costco. Not hugely profitable, but solid cash flow. Even Buffett won't be able to bail them out this time.

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