Less People are Leaving Home Without It

American Express is doing better these days—a fact which might be signaling an end to the recession. Maybe. This issue is detailed in the Wall Street Journal article “AmEx Chief Sees Reason For Hope, Cautiously” (10/22/09, section C1). The hope is that the company’s recent earnings, which were less bad than expected, is signaling that the economy is turning around. The article reports that American Express is “a barometer of affluent consumer and corporate spending patterns.” This means that if rich people and businesses are reaching for their American Express cards more often then they must feel like their situation is improving. From a leadership perspective, American Express’ Chief Executive Kenneth Chenault seems to be encouraged. In a recent statement, Mr. Chenault reported: “While there is reason to be cautious…trends in card member spending are encouraging and there are signs that the recession may be approaching an end.” This is hopeful—not only to American Express, but to everyone who is looking for a recovery to occur sooner rather than later. Not so fast though, says Capital One, who is not as sanguine about the economy’s prospects. Capital One has “expressed wariness that early signs of stabilization translate to real trends at this point,” states the Journal. Capital One’s profits, however, are actually up over this time last year. So while credit card companies performance in general is better-than-expected, it may be too early to say it means anything. I am thankful that at least we have some good news. Of course, when you compare this article to its next-door-neighbor article, about how the one-hundredth bank failure of the year is approaching, you get an idea of why Capital One would want to be cautious. On the other hand, bold leadership may be called for in these troubled times. If American Express thinks the economy is turning around, but others don't, then it might be time to consider expanding market share while competitors are playing it safe.