Archive for the ‘In The News’ Category
August 11th, 2009 | 
Author: Here’s one of the most disturbing points made in the Financial Times piece on banks being poised to earn $38.5 billion in overdraft fees this year: Poorest customers are getting hit the hardest by the charges.
The FT reported over the weekend that banks are using higher fees on overdrafts and credit cards to boost their profits in the midst of the financial crisis. The overdraft fees are nearly double the charges reported in 2000. And, not surprisingly, much of the new revenue is coming from customers already hit hard by the crisis, according to the FT.
The most cash-strapped customers are the hardest hit by such fees, with 90 per cent of overdraft revenues coming from 10 per cent of the 130m checking accounts in the US. Regular use of overdrafts is most common among consumers with low credit scores.
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The internet giant, Google lost about USD700 million from the selling of it’s stake in AOL. The 5 percent share stake was acquired by Google from AOL back in 2005 with the original value of USD 1 billion dollars. Google ended up in getting approximately USD283 million from the original AOL shares value.
Time Warner took back the shares in preparation for the eventual public spinoff of AOL. When Google initially bought the shares, it valued AOL at $20 billion. Based on the price Time Warner paid for the repurchase of the shares, AOL is now worth $5.7 billion. I’m sure by the time it actually goes public, new CEO Tim Armstrong and AOL’s bankers are going to be arguing that it is worth a lot more.