The Federal Reserve approved American Express to become a bank holding company tonight. With their new status, they now have access to the low cost loans that banks around the country have gained access to for months now.
And that’s a twist I did not see coming. I have been saying for weeks now that the next two shoes to drop were Hedge Funds that will begin to collapse in large numbers, and then banks and other institutions that are loaded with credit card loans. American Express and Discover were obviously high on the list, since they hold debt directly. Visa and MC do not.
American Express obviously felt the same way about things, and took some preemptive action to change their status to a bank holding company and gain access to those highly desirable, low interest funds.
But look on the bright side. If you make a deposit with American Express Bank, they may pay YOU 18-24% on that CD you take out.
Or, then again…
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