The American Express ‘invitation’ (I wrote about yesterday) to, as they said, “a relatively small number of card members who have sizable balances and little spending and payment activity” may just be the tip of the iceberg.Why are they doing this?It is not out of the goodness of their heart.It is very likely because when they see a large balance with only minimal monthly payments and no new purchases, they are probably rightly concerned that the borrower may have fallen on hard times and may soon be unable to make the monthly payments.If that happens, then the credit card obligation which is currently an asset on the balance sheet will become a bad debt.So it seems to me that American Express is trying right now to strengthen its own balance sheet, and that is fine. But what is important for credit card holders is that you take care of YOUR OWN balance sheet.What the banks devise as their solution is not necessarily the best solution for you.

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Some of you may have received an ‘invitation’ from American Express over the last week or so to pay off your entire account balance and to close your account, and in return you will receive a $300 prepaid gift card.

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The stimulus package is a real disappointment because it could have provided a serious punch to shock the economy into action. Instead it is a typical – albeit much bigger than normal – spending bill, which means it is has more than the normal amount of pork and less of the incentives needed to stimulate capital investment, jobs and profits. But frankly, given the dismal state of the economy, I’ll take any spending in almost any form at this time – yes, even pork – provided it is done soon and in a big way. The economy can’t wait much longer.

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Watching yesterday parts of the House Financial Services Committee interrogation of the CEOs of the major banks and brokerage firms, I found myself fluctuating between being exasperated and bored It was reminiscent of so many other similar hearings – Congress educating itself after the fact. It was patently clear that our Government leaders did not understand the repercussions of their own political motives in contributing to the housing crisis they themselves fostered over the last twenty years.

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While the headlines in the media are all about the stimulus bill coming out of Congress and the Treasury’s bailout plan, there has been little media attention being drawn to a disturbing and growing phenomenon that is seriously impacting the potential retirement savings for employees, namely, the cutback in the corporate match for employee 401(k) plans.

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On Saturday morning, I flew from Phoenix to Tampa.Not surprisingly, the plane was full of boisterous and friendly Cardinals fans on their way to the Super Bowl. “Go Cards” was the mantra – from the USAir attendant assisting the boarding process to the flight attendant on the plane to the pilot when we landed.I was a disinterested party, simply trying to get from a business meeting in Arizona to a short visit with my mother in Siesta Key, Florida.As a Patriots fan; I kept my allegiance to myself.

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It is evident that banks and finance companies are doing everything in their power to rebuild their balance sheets. In an effort to lower their own borrowing costs, they are looking to the Federal Government for guarantees. They are actively engaged in the business of shrinking their own balance sheets, i.e. reducing their loan portfolios. And in the process of trying desperately to survive and eventually some day to thrive once again, they are abrogating the very rationale for their existence.

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