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To: The Reaper who wrote (186083)	2/23/2009 7:27:25 PM
From: MulhollandDrive	Read Replies (3) \| Respond to of 306849

maybe citi should send everyone $300 close their accounts now like amex is doing...wait, make that $500, it's C after all: AmEx Pays Some Cardholders $300 to Close Accounts By Hugh Son Feb. 23 (Bloomberg) -- American Express Co., the largest U.S. credit-card company by purchases, is paying some cardholders $300 each to close accounts so the lender can reduce the risk of defaults as the recession deepens. People who got the offer to “simplify” their finances must pay off their entire credit-card balance by April 30, according to New York-based American Express. Enrolling in the program cancels a customer’s account and may lead to forfeiture of reward points or rebates, the company said on its Web site. “What AmEx is trying to do is move to the front of the line in terms of getting paid back” by customers who owe debts to multiple lenders, said Michael Taiano, an analyst at Sandler O’Neill & Partners with a “hold” rating on the company. “They clearly grew loans faster than their competitors in the years leading up to this financial crisis.” Chief Executive Officer Kenneth Chenault is shedding customers as rivals reduce credit lines, raise interest rates and cut back on mail solicitations to brace for future losses. The industry’s defaults are set to break records and may reach as high as 11 percent by year-end in a stress scenario, reducing American Express’s annual profit by about 40 percent, according to Brian Foran, an analyst at Goldman Sachs Group Inc. ‘Select Cardmembers’ “This is an offer we made to select cardmembers to incent them to help pay down their balance,” said Molly Faust, an American Express spokeswoman, in a telephone interview today. Faust declined to say how the company picked which customers qualify for the offer. Consumers are falling behind on credit-card payments as U.S. unemployment reached 7.6 percent last month, the highest rate since 1992. Charge-offs, or loans that American Express deemed uncollectible, rose to 8.29 percent in January from 7 percent the month earlier, while payments at least 30 days overdue climbed to 5.28 percent from 4.86 percent, the company said last week in a filing for debt packaged into securities. American Express, which got $3.39 billion from the U.S. Treasury to boost capital, said last month that fourth-quarter profit from continuing operations fell 72 percent to $238 million as more consumers defaulted. The company blamed the charge-offs on faster loan growth than competitors in the past two years and a larger customer base in California and Florida, states hard hit by the housing bust, Chief Financial Officer Dan Henry said last month. The $300 comes on a prepaid card that can be used anywhere American Express is accepted, the company said. The promotion was reported earlier by CreditMattersBlog.com. American Express slipped 82 cents, or 6.3 percent, to $12.15 at 4:15 p.m. in New York Stock Exchange composite trading. The company has declined 73 percent in the past year. For Related News and Information:

To: The Reaper who wrote (186083)	2/23/2009 10:09:54 PM
From: Madharry	Read Replies (1) \| Respond to of 306849

Im not surprised. I had a conversation with a senior officer at Citibank in the late 90s when I was looking for work as a work-out officer and the guy was pretty obnoxious. After a while I broached the subject of possible employment and he put me off saying that Citi had straightened out all their problems and didnt need any workout-officers. Once they made a relative outsider and non-banker the CEO, it could only mean that the board was clueless too. It sobering that JPM is cutting their dividend sharply as well. What is it with these CEOs? dont they understand that people who buy bank stocks think they are going to get steady and increasing dividend yields?

To: The Reaper who wrote (186083)	2/24/2009 7:12:54 AM
From: butschi2	Read Replies (2) \| Respond to of 306849

Multiply this how many times around the world? There is no way that C can be saved by the Treasury. You just get the feeling they were levered up so much more than 40-1. Citi will and must be saved. IMHO total cost to taxpayer could be $300-500 billion. Citi is to interwoven in the financial markets on an asset base and much more through their $38.000.000.000.000 ($38 trillion) in nominal value in derivatives. If you kill Citi you kill the global financial system because i would expect the clearing systems to fall apart. AIG was deemed worth saving and i find the danger from AIG to the system small, because mostly only OTC-CDS in a 300-400 billion face value. This would have given losses to the counterparties, but there is no myriad of complex finanicals products with and without termination clauses as at Lehman. Lehman had only a small $1 trillion derivative book. Bear was saved because of their $7 trillion derivatives book.