AmEx Warns

You can take your signals from the Administration, or you can take your signals from actual in-the-trenches businesses.

Like M&I Bank, American Express is conservative in its lending practices. And like M&I, it's taking hits and sending signals.

“The severe decline in home prices and the marked rise in oil prices have had a fundamental impact on consumer budgets and behavior. Not just as it relates to mortgages and home-related spending, but also across the full spectrum of the consumer economy

...as I showed you on the slide package, we saw our credit deteriorate in June beyond our expectations as the write-off rates rose and roll rates within the portfolio deteriorated versus prior months

...we now believe the economic weakness in the US will likely worsen throughout the remainder of the year and negatively impact credit and business trend ... we now expect that our lending write-off rate in the third and fourth quarter will be higher than June levels.”

So far, not particularly exceptionable, except that AmEx is adjusting their earnings projections mid-year.

But this statement is a bit jarring:

"... this fallout was evident across all consumer segments, even our longer-term super prime card members.”

Keep your head down, folks.

HT: Calculated Risk