Amex: Don’t Go Home Long It

by StockJockey

Thursday, August 07, 2008 - 6:02 pm

Consumers are beginning to leave home without the America Express card, and today shareholders did not want to go home long the stock:

Moody's Investors Service said on Thursday that it may downgraded American Express because of concerns about the credit card company's asset quality and lending exposures. Moody's placed on review for possible downgrade the ratings of American Express Company and American Express Travel Related Services and its rated operating subsidiaries. Moody's noted that were the long-term ratings to be downgraded, they would most likely be lowered by one notch. Marketwatch

If that was not enough, Meredith Whitney started the day on the wrong side of bed and stated the obvious....but when she speaks, investors listen. She paid the company her highest compliment, calling it the "least worst" of the financials:

"The wide-ranging effects of the housing downturn are highlighted by the worsening of U.S. cards' credit quality in AXP's affluent cardmember base," Whitney wrote in a note to clients after attending the investor day of American Express.Reuters

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“Typically, the affluent segment holds up well during downturns, but home price declines have resulted in significant losses in consumer net worth (lower home values),” she added.

Financial stocks continue to hit new potholes as the auction rate settlements wind their way through the brokers; John Thain and his peers might want to consider holding another round of garage sales to raise additional pocket change.

A billion here, a billion there, and once again we are talking real money

Throw in a few outages at several of online brokers and the CME, and it made for a nasty day.

Brutal.

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One more puke coming in American Express (AXP-NYSE)? Or will it hold?
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Moody’s warns it may downgrade American Express
Marketwatch

Analyst Whitney gloomy on U.S. spending as top AmEx clients hurt
Reuters

Previously
UBS Auction-Rate Buy Leaves Some Investors Out in Cold
1440 Wall Street
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