AmEx CEO: Some Stabilization, Hopes for Recovery in 2nd Half of 2010
Submitted by
CalculatedRisk on Wed, 07/08/2009 - 12:04pm (55 comments)
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..............................
How much longer do the charge offs continue to increase.... How much longer do they stay 'elevated'.... I bet a year +
a trifecta would be some expert calling a second half 2011 recovery
So 2010 would be the half that the Chicago Fed referred to? Somehow, I suspect that the green shoots crowd were being more optimistic.
Someone didn't get the memo...
Guess the AmEx CEO was puffing on Hopium all day...
Wait until Goldman Sachs unleashes their card for affluent customers. It'll make Amex Black seem pedestrian.
Affluent customers don't need no stinking credit card
with the GS card you'll be able to walk into a store and drive them into liquidation by taking it out of your wallet
Is this the second half recovery that the Fed's Evans was talking about? 2010? Interesting that the Amex CEO isn't planning the company's business on even the 2010 2H turnaround. Chargoffs will keep rising as long as the labor market stays week, and will then lag it's eventual recovery. He's still being optimistic, but at least not on crack like Evans.
I am calling for a second half recovery, the second half of 2018!!!
There, are you satisfied, CEF?
At least I won't be accused of being a permabear;-}
More of the same, no money, no business, no 2nd half recovery.
Well, we should not worry about government borrowing crowding out private sector investments, at this rate, the only chance of return of capital is with the puny government single digit fed dollars.
Gah, the US is going to be moribund for a long long long time, at this rate of change.
Still no real movement on making housing cheaper for all the U-Boot commanders in the bubble states.
They are going to stop paying and start squatting faster and faster- the only trend that may undergo acceleration in the next two years.
CR, do you think this is starting to get boring, same old bad news, day after day?
Someday this war's gonna end...
recovery, 2nd half 2018: mankind rediscovers fire
It's times like this I wish this place had a polling function so we could have both an aggregate estimate along with looking backwards to see who's right consistently.
I'm sure the doomers think he's a rose colored optimist.
I've felt all along recovery would be H2 of 2010 at the earliest. Too much deleveraging to be done one way or the other for it to be any earlier. But with all the game playing by the government that recovery could be delayed.
I'm sure the doomers think he's a rose colored optimist.
On the contrary, I find his admission that it is too early to see a recovery refreshingly honest. It is too soon. That he's not managing Amex for a 2H '10 recovery is prudent and consistent with that.
There's a difference between being a bear and being bearish.
yeah, but we'd to have to arrive at a consensus as what "recovery" means.
I've been hearing that we're stabilizing since 12,000 on the Dow. These comments are so obviously coordinated .... god help the sheeple.
@black dog,
I've felt all along recovery would be H2 of 2011 at the earliest. Too much deleveraging to be done one way or the other for it to be any earlier. But with all the game playing by the government that recovery could be delayed.
Look at the Alt-A and Option ARM chart. My best guess on unemployment is a peak in June 2010. Maybe the job situation will improve this year, it just feels like it won't bottom until next year.
edit: I am basing employment on EMRATIO, not U3.
Comrade Elmer Fudd (profile) wrote on Wed, 7/8/2009 - 3:15 pm with the GS card you'll be able to walk into a store and drive them into liquidation by taking it out of your wallet
LOL!!!! Thanks for that, EF.
......wait a sec........I do a little weeding & watering, come back, and already they've changed the "turnaround" from 1/2 half of 2009 to second half of 2010? What did you guys DO?
Black Star Ranch (profile) wrote on Wed, 7/8/2009 - 1:29 pm
......wait a sec........I do a little weeding & watering, come back, and already they've changed the "turnaround" from 1/2 half of 2009 to second half of 2010? What did you guys DO?
The power of the commentariat has grown. I think Paulie is even afraid to eat roast beef for fear of choking.
@coinz
You're probably right. I'm retail and let me tell you, a lot of my compadres aren't going make it past H2 of THIS year. My 2010 (at the earliest )call is based on things really hitting the fan in the next few months.
From Reuters on the Alcoa Q3 earnings release:
Revenue slumped to $4.2 billion from $7.2 billion a year earlier, as metal prices and the autos industry slumped and global demand fell in the economic downturn.
That is a monster drop in revenues.
recovery metrics: car sales bottom and inch up a bit, new housing sales bottom and inch up a bit, excess foreclosures flush through system, housing prices bottom and stabilize, oil prices don't shoot through the roof, dollar retains world status and relative value, unemployment peaks and gradually begins to decline, wages and hours stabilize and begin modest increase, tax receipts begin to approximately equal government outlay, bankruptcy declines, etc.
can't see any or all of this stuff improving very soon, but politics dictates that it would be nice if things were looking up in Nov. 2010.
Recovery doesn't happen till private sector can stand on it's own two feet. I believe we are not close to that event. No 2010 recovery .... I think 2012, then flatline for awhile.
Any signs of greenshoots are stimulous and backstopped based. We can't be fooled into thinking greenshoots are legitimate based on capital markets working freely. We need a cleansing ....... can't wait because I wanna fix this mess and start thinking positive things for my children again.
@black dog,
Yeah, it seems retail is really hurting. I've seen a lot of closed store fronts in the last few months, and it seems every week, another major retailed goes BK. I don't think I've read about a chapter 7 in a while so they most should survive, just smaller than before. Fewer stores, fewer employees.
Catch anything about their forward looking statements?
interesting close - kermit by a whisker, but R2K not feeling the love and SRS, EEV and FAZ all kermit as well...
slump? That's cliff-diving!
edit: hmm, people are seeing this as good news as the slump was less than expected. AA trading halted afterhours.
Chenault can forget about a job in the Obama administration, where HOPE is the PLAN.
American Express is cutting their own throats with their long time Gold card members. We were recently on a ten day vacation with our closing date falling on the begining of our vacation holiday but terminating before our payment date. AMEX would not increase our limit enough to meet our hotel obligations. They have dropped our line from unlimited to 4500. They embarrased us with a hotel check in decline. We have nearly 300,000 points on the books at AMEX and pay $150 for the privelage. Their brand was their only reputation and poor management has destroyed it. We will spend our points and most likely cancel or drop to the green card in the future.
To many once great American Brands are run by too many overpaid freaking idiots who ride darkened Town cars to work, fly in corporate jets, and stay in 1000/night hotel suites ordering 320z steaks sipping $300 bottle of wine. This was the same company who begged their high end customers to charge everything. What fools....
Their business model has no way of distinquishing their high net worth customers from my College student with her $2000 dollar limited income limit.
2010, CR? Is that a typo?
American Express: Choose a card that is right for your inner deadbeat!
"They have dropped our line from unlimited to 4500. "
that's weird. I just checked mine - unlimited and 19.2k for my blue card.
I do hate the fact when I call their customer service I have to listen to an ad for their "Fine Villas" program. grrr Even if I were a billionaire I wouldn't pay for that...
Look at those long bonds !
Game plan is working very nicely for the big boys ...
WHIPSAW !
whoa...faz is doing a reverse split, 1 and a half somersault, in tuck position, after market close today. Who'd have thunk? Im going to prescore that dive a 5.8
What surprises me is his blind spot as to Amex's exposure to an economic downturn. He brags that Amex, unlike many competitors, derives a supermajority of their income from straight service fees and merchant charges. Merchant charges are not as volatile but they surely track the same as consumer credit over time.
" Comrade Coinz (homepage, profile) wrote on Wed, 7/8/2009 - 4:25 pm
.....Look at the Alt-A and Option ARM chart. My best guess on unemployment is a peak in June 2010. Maybe the job situation will improve this year, it just feels like it won't bottom until next year."
Isn't the general feeling that unemployment peaks AFTER the recovery begins? As such, shouldn't expect unemployment to peak until 2111.
Merchants hate Amex... cant blame them.....
House Committee Votes to Protect Auto Dealerships (Update2)
By Brian Faler
July 8 (Bloomberg) -- A House panel voted to require General Motors Corp. and Chrysler LLC to restore agreements with auto dealerships shed during bankruptcy proceedings.
A bill approved by the House Appropriations Committee also would require the Treasury Department to disclose more information to lawmakers about the future of the Troubled Asset Relief Program, including how much money the government expects to either gain or lose through the initiative.
The committee last night unanimously approved an amendment to the Treasury Department’s 2010 budget that would require the companies to re-establish the franchise agreements as a condition of receiving federal aid.
House Committee Votes to Protect Auto Dealerships (Update2) - Bloomberg.com
"American Express is cutting their own throats with their long time Gold card members."
I don't understand why anyone would bother with an Amex card in the first place, especially if you have to pay a stiff fee for the "privilege" of having the card. Every other credit card that I am aware of is available for free under at least one program.
When a credit card company is screwing you from the outset of the relationship, you should not be surprised if they find other ways to do it over time.
"Merchants hate Amex... cant blame them..... "
But any merchant involved with business travel must take amex or they're SOL. Amex seems to have a lock on the corporate card market.
Dunno why V/MC hasn't tried to invade this space more. If it weren't for this market, amex would be done.
Merchants hate Amex... cant blame them.....
Amen to that. They charge merchants 2x what MC/VISA charge (~4% v. 2%)
The so-called Public-Private Investment Program ...
NEW YORK (CNNMoney.com) -- Financial regulators on Wednesday tapped nine financial firms, including some of the biggest names on Wall Street, to help run a government program aimed at cleaning up the books of the nation's banks.
~~~~
More money down the tubes ... 13.9 trillion dollars worth of alphabet soup ...
"I don't understand why anyone would bother with an Amex card"
they used to have a program for their platinum card that more than paid for the annual fee. If you bought something and then found it cheaper they'd refund you the difference. I have used this all the time.
They cut it though and I haven't gotten around to finding a new card.
"whoa...faz is doing a reverse split, 1 and a half somersault, in tuck position, after market close today. Who'd have thunk? Im going to prescore that dive a 5.8"
I had great fun congratulating my friend on his %1500 percent gain on his AIG shares a few days ago. But only after he continually congratulated me on my long-term hold of SRS.
Amen to that. They charge merchants 2x what MC/VISA charge (~4% v. 2%)
I was talking to a merchant this week who hates AmEx because they're 6% compared to the usual 3%. Maybe he's too small time to get the big breaks.
He hates Diners Card (?) too -- asks people if they have anything else besides those 2, but he'll take them if he has to.
Ah, "business travel." That must be why Chenault is so comfortable with Amex's prospects. [/snark]
F.D. I use Amex for Costco purchases on my executive membership. Good cash back, good reporting mechanism, best gas prices around.
I don't know what you are talking about with regard to paying for AMEX card. I pay no annual fee and I get cash back rewards for my AMEX card. I use it everywhere I possibly can. 3% for gas and 1% for everything else. I don't leave home without it.
"Costco purchases"
I bet costco isn't paying 6%...
Entries by Karl Denninger - The Market Ticker
Denninger on the GS code kerfluffle
I was talking to a merchant this week who hates AmEx because they're 6% compared to the usual 3%.
I have a rule I follow. When buying gas, from chain stores with mostly made in china stock, I use the card. When buying from small local shops, I use cash.
I like that rule. I try to use cash at mom & pop-ers too. It's tough enough for them as it is. But I use the card other places when I can use the cash back feature. That's a pretty strong incentive.
Also, don't fall for that green shoots BS cause they ain't real. No recovery.
this co called 'recovery' is artifical
hat tip to: Interesting Finance & Economic articles
for the good articles
Amex is changing their name to: "Unamerican Excess" due to the fees they charge and the way they have cut the credit limits to many of their customers.
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