If consumer spending is the engine of our economy and the key to a future economic recovery, recent events suggest that the banking policymakers are seeking ways to jump-start this process. Consider the following:

*The Federal Reserve grants bank holding company status to American Express Company in an accelerated process that gives AMEX immediate access to the borrowing window at the Federal Reserve and possibly CPP capital.

*The Treasury abandons any effort to purchase troubled assets and securities, preferring instead to concentrate during the Administration?s waning days on providing capital to banks and other lenders, thereby leaving buyers and sellers who were hoping for some pricing parameters to their own devices in the marketplace.

*The banking regulators jointly issue guidance on what they expect from banks going forward as the primary financial intermediaries, particularly in those consumer sectors which have been frozen out of the market because of the unavailability of securitization funding sources.

Please see full newsletter for more information.