There is an intriguing news release over the weekend by American Express. The premium card issuer's subsidiary American Express Credit Corp  has come out with a $ 2 billion note sale at a whopping yield of 425 basis points above comparable US Treasury securities. This yield is way above what investors have been demanding earlier. See http://www.bloomberg.com/apps/news?pid=20601009&sid=a2qpc7d1hDSo&refer=bond

To me this kind of a sale by a leading financial services company is a resounding clap of thunder - companies are hard pressed to find cash! The famous 'Banana Skins' Risk Report by PwC listed Liqudity Risk as the biggest challenge seen by CFOs and company heads. The credit crunch is now dogged by liquidity crunch as well.

Amex is a little different from the other consumer lenders. It carries a premium image and is nowhere close to the sub-prime mass that has taken the leading banks down the garden path. Amex showed a steep drop of 37% in its 2Q 08 net earnings and had issued bleak projections.

If this is what a premium card issuer is priced for funding, imagine what the lesser mass market lenders will have to go through. Amex is also lined up for some windfall cash from the settlements with Visa and MasterCard on anti-trust lawsuits. Amex is touted to receive around $ 4.3 B over the next five years from its competitors.

I would think that if such a company in happy position is facing a crunch, Dr Doom - Nourel Roubini's predictions do seem be surfacing in the near horizon.

On the flip side, it's bad news for the consumers too. Amex won't have any room to lower its APRs and fees; at this rate of funding.  Looks like there aren't going to be any winners in this quest for resurrection by the financial services industry.