American Express Q2 2008 - conservative level of provision but no imminent danger

--The company released earning of Q2 2008 this week: rev almost flat but net income decreased ~40% relative to Q2 07 to 0.65 bil due to its high provision. --The change of charge off and delinquency rate is increasing at slowing pace: net charge off increasd from 1 bil to 1.19 bil in Q1 08 and 0.66 bil in Q2 07; delinquency (30 days past due) rate stay at 3.6% --The change in provision level seems overdone relative to the change of charge off and delinquency: provision in Q2 08 is 2.4 bil, almost 100% from 1.2 bil in Q1 08 and threefold increase from Q 07. The company is taking conservative approach to set aside enough reserve to cushion future loss. Opinion: 1.provision level might be lower next quarte and its earning might be higher than Q2 08 due to lower provision 2.moderate overweight the company