Session Alignment

American Express recently announced a second round of job cuts .

The announcement sent a shiver through the market for bonds backed by credit card debt .

The rise in unemployment has spattered a once - profitable business with red ink .

As hopes that credit cards would avoid the pain felt in mortgages have dwindled , so has any chance of the industry avoiding a political backlash .

This week the Congress voted through a bill that would sharply restrict card issuers’ ability to charge punitive fees and raise interest rates .

The industry ’s claim that the bill will choke off access to credit is a bit rich given its own rush to reduce its unsecured lending .

Morgan Stanley expects the big three issuers to post losses in their card businesses this year and next .

Little wonder , then , that card issuers feel shell - shocked .

When they clamber back into profit , they can expect returns on assets of only one - half of pre - crisis levels .