On the Bailout, Part 23: “Bank holding company status to aid American Express funding”

Hmmm:

American Express said on Monday it won approval to become a bank holding company, in a step that could cut its borrowing costs and give it more access to government money. [Link]

I am not sure how this lowers their borrowing costs. Could someone explain that to me?

I think this is all about making it easier for AmEx to get government money meant for banks.

Update: Duh,I answered my own question. The USGOV bailout money is provided at below market rates.

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6 Responses

  1. банки Омска чем сильнее банкиры сетовали на кризис, тем активнее государство поддерживало их рублем. Крупнейшие государственные банки – Сбербанк, ВТБ, Газпромбанк – получили свыше 1 трлн руб., ВЭБ получил 75 млрд на увеличение капитала и $50 млрд на рефинансирование долгов российских компаний перед западными кредиторами. И это далеко не полный список благодеяний.

  2. Here is a rough/bad translation of Novosel’s comment:

    Banks Omsk stronger than bankers complained to the crisis, the state actively supported their rubles. Major state-owned banks – Sberbank, VTB, Gazprombank – received more than 1 trillion rubles., VEB has received 75 billion on capital increase and $ 50 billion to refinance the debts of Russian companies to Western creditors. And this is not an exhaustive list blagodeyany.

  3. I am not sure how this lowers their borrowing costs. Could someone explain that to me?

    My specialties are warfare and violence. I leave the economic stuff to others.

  4. I figured out my own answer:

    Duh,I answered my own question. The USGOV bailout money is provided at below market rates.

    Understanding Economics (think the Science of Human Response to Incentives) is quite useful to National Security. Incentives matter in coercion and will bending.

  5. I understand the principles, microeconomics, but I don’t have the memorization of the tables of forces for macroeconomics. This would include all the laws, all the various little in groups and customs and practices.

  6. MicroEconomics and MacroEconomics are really quite different.

    I think of MicroEconomics as “The Science of Human Response to Incentives”.

    MacroEconomics is really “The Science of Human Response to Incentives as applied to the understanding of National and Global Economies”.

    MicroEconomics is being applied in all sort of interesting ways to gain understaning and get novel insights such as Public Choice Theory (who organizations, especially political organizations work). Or look at the freaknomics blog and book for their novel approaches to Econ.

    I recommend checking out these blogs:

    http://econlog.econlib.org/

    http://www.marginalrevolution.com/marginalrevolution/

    http://freakonomics.blogs.nytimes.com/

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