Shares of financial giant American Express (AXP) are trading lower in after hours trading despite a stronger than expected earnings report for its third quarter.

Going into this afternoon's earnings report, analysts had been expecting to see American Express announce earnings of $0.86 per share, while actual earnings came in above estimates at $0.90 per share.

The only question is -- how soon can the Congress get this deal done?

The potential 'deal' being $30 billion in new capital for community banks, who would then use it as a base to increase lending to small-sized/medium-sized businesses by up to $300 billion -- credit that's urgently needed and may prove to be a pivotal factor concerning the U.S. economic expansion's sustainability.

"If we can help the big banks, then we should certainly be able to help small-business lending," President Barack Obama said June 30, Bloomberg News reported. The Senate may consider the bill as early as this week; the program, called the Small Business Lending Fund, passed the U.S. House last month

In this market, you take the good news where you can get it, and Friday's positive data came from the credit markets.

There are signs that U.S. credit markets are loosening as they pertain to the U.S. auto sector.

About $22.9 billion in bonds backed by auto loans, borrowings for dealer inventory, and related debt were issued through April, up 67% from a year ago, according to data compiled by Bloomberg News.

It's a shopaholic's dream and a privacy advocate's nightmare -- a credit card that knows what you've been buying and can make recommendations on what to splurge on next.

Through a new partnership with an Internet company that specializes in personalized shopping, MasterCard (MA) just rolled out a Web shopping mall call MasterCard Marketplace on Monday. The gimmick is that it can predict what MA cardholders are likely to purchase and make suggestions. Now that consumer spending is actually above it's 2008 peak (really!), it is the perfect time for such a program.

Auto retailer CarMax Inc. (KMX) will be reporting its fourth quarter numbers tomorrow, and Wall Street is looking for further signs that the struggling auto industry is continuing to rebound.

Going into tomorrow's earnings release Wall Street is expecting to see the company show earnings of $0.25 per share. During the same period last year the company reported earnings of $0.17.

The political climate in Washington is hardly conducive to a joint resolution by the Democrats and Republicans honoring Moms on Mother's Day, let alone high-stakes banking issues, but one reality is clear: if banks don't starting providing more credit to small and medium-sized businesses, Congress will have to create agents -- or new institutions -- that do.

The issue is too important for the long-term health of the economy: small and medium-sized businesses account for the bulk of America's jobs and new hiring.

Presently, demand is growing incrementally, but as it increases, if business credit lines don't as well, the recovery could stall, necessitating Congressional action.

Charge offs are rising among our largest credit card companies, up 8.81% in November, from 8.02% in October.

Here are specific bank reports:

• For Capital One (COF), charge offs rose to 9.60%, from 9.04%
• Capital One expects its charge offs to peak early next year.
• Discover Financial Services (DFS) rose 8.98%, from 8.54%.
• Bank of America (BAC) had the largest charge offs at 13%, down a tad from 13.22% in October.
• Bank of America late payments rose to 7.69% from 7.59%.

By year-end 2009, we will see a more than $4 trillion pullback in credit lines. And we are a country that runs on credit. In fact, the entire growth in consumer spending from 1997 to 2008 was paid for with home equity lines and credit cards.

Credit standards are already impossibly high. My credit lines literally shrink every month because I do not use them. But what if I needed them? And I almost couldn't get a lease for a new car even though I have never missed a bill payment. The majority of people cannot borrow money and, therefore, cannot spend. This will not change in 2010.

Next: Reason #6: Excess capacity

Wednesday morning kicked off with news that Wells Fargo (NYSE: WFC) saw third-quarter earnings rise to $3.24 billion (56 cents per share) from $1.64 billion (49 cents per share) last year. The results handily trounced the consensus estimate of 37 cents per share.

Wells Fargo also reported revenue of $22.47 billion , which was better than both a year ago and the consensus estimate. The company stated that net charge-offs for the quarter came in at $5.1 billion (2.5% of average loans), compared to $4.4 billion (2.11% of average loans) in the second quarter. The bank did note that it expects credit losses to continue increasing, but at a slower pace thanks to a slowing of the pace of deterioration.

Homebuilder confidence hit a 1 year high today, providing another sign that the worst of the housing melt down may have passed.

The housing market started to crumble back in 2006, and since that time foreclosures and falling home prices have hit the economy hard, and played a major role in the recession that has effected millions. Today the The National Association of Home Builders/Wells Fargo confidence index climbed to 18, the highest level that it has been since June 2008.

It's been a week of mostly positive data points for U.S. investors. Here's another: the Libor-OIS spread has narrowed to a level former U.S. Federal Reserve Chairman Alan Greenspan said he regarded as "normal."

The Libor-OIS spread, which measures the reluctance among banks to lend, fell 1 basis point Thursday to 25 basis points -- its lowest level since January 24, 2008, Bloomberg News reported. The spread had surged to an incredible 364 basis point in October 2008, during the global financial crisis' acute stage.

For the fifth month in a row, consumers paid down their credit cards and other debt, as the worldwide recession continues to drive conservative financial behavior.

According to the Federal Reserve, outstanding consumer debt fell $10.3 billion (4.9%) to $2.5 trillion in June. Analysts expected a decline of only $4.7 billion, making the plunge unexpected -- and nearly twice the $5.4 billion by which consumer debt fell in May.

Not a good day for those looking for green shoots with markets down strongly. And no wonder. Credit card problems with the U.S. consumer are off the hook as CapitalOne (NYSE: COF) charge-offs rose to their highest historical level of 9.91% (via ZeroHedge) and American Express (NYSE: AXP) rose to 10% (via Mish Shedlock).

Higher chargeoffs and retracting credit means further consumer spending retraction. A semi-annual survey by Collier Capital found that 20% of institutional investors plan to downsize their target allocation to private equity, (via PEHub) the largest negative response since the survey started in 2004. An article by two Harvard University economists found that the biggest reason for the growing income inequality is lagging educational improvement in the American workforce (via VoxEU). There is no quick fix for this so its fairly bad news (although better than blaming the inequality on globalization and some neo-capitalist cabal).

Alex Salkever is Director of Research at Piqqem.com, a stock analysis site powered by the Wisdom of Crowds.

As we all know, the housing market has been taking a beating over the past couple years. The global recession seemed to spark right out of the American housing market, and things have not really been improving too much. With all the homes that are unsold in the country, more and more homeowners have decided to rent instead of sell their properties.

As the housing market began to come apart at the seams, home inventories started to swell, and prices started to drop. Everyone has been waiting anxiously to see a point where the lower prices would bring massive buyers back into the market, but that still has not happened yet, and instead of lowering prices even further, homeowners have decided to hold onto properties a little longer and pull in some rental income instead.

Small biz credit card issuer Advanta (NAS: ADVNA) will shut down accounts to preserve capital and will stop lending June 10, according to Bloomberg. The company has 1 million customers that could be left without credit cards, yet another blow for small businesses suffocating without sufficient credit lines. Shares tumbled 24% on the news to less than a dollar per issue.