What Was Wall Street Thinking? Banks Fire Rich Customers, Microsoft & Google Bicker, Porn Plays, Canadian Couch Potatoes

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If you're complaining about the microscopic yields that your modest savings are collecting at the local bank, it could be worse: You could have a lot of money in the bank.

Bank of New York (BK) sent notices to its richest clients last week, alerting anyone that has deposited more than $50 million in their accounts since the end of last month that an annual fee of at least 0.13% will be charged on the excess deposits.

Holding cash isn't as lucrative as it used to be for banks. Demand for consumer loans has waned, and even the Federal Reserve's 0.25% payout may be in jeopardy. Banks also have to pay up for FDIC coverage on deposits, and chunky accounts have capital-raising implications.

Having said all of this, do you really want to be the first bank to dismiss your wealthiest accounts this way? Investors refer to Bank of New York as BONY, given its acronym, but this seems more like a bonehead move than a BONY one.

That wasn't the only boneheaded event on Wall Street last week.

Tech Big Boys Do Battle

Microsoft
(MSFT) and Google (GOOG) are becoming mortal enemies with every passing chess piece move, but they rarely resort to old-school public bickering the way they did last week.

The war of words began when Google publicly accused Microsoft of teaming up with several tech giants to acquire patents that can be used to attack Google's Android platform.

That may seem fair, but then Microsoft fired back with a zinger. The world's largest software company dug up an email where it had invited the world's largest search company to participate in the patent acquisition. Ouch!

Google then fired back, arguing that it didn't believe Mr. Softy's offer was genuine at the time. Buying the patents as part of a consortium of blue-chip tech stocks wouldn't have necessarily prevented the other buyers from gunning for Android. Ouch!

Who is right? Who is wrong? Now that we're in a battle to see who has the last word in public, we're really seeing two tech giants belittle themselves for something that could have been handled behind closed doors to avoid mutual embarrassment.

Pop Porn

Kudos to The Wall Street Journal for digging into three words out of DirecTV (DTV) CFO Patrick Doyle's mouth during last week's conference call.

Doyle referred to "lower adult buys" as being a drag on pay-per-view performance, and most outlets glossed over the implications. Consumers associate DirecTV with a wide range of cable channels and its exclusive NFL Sunday Ticket football package, but satellite television and cable providers still profit from the sale of titillating mature content.

The challenge for the industry these days is that free ad-based websites -- streaming hardcore pornography -- are growing in popularity. Now that web-tethered televisions and flash-enabled tablets are making the content more portable, it's a challenge for softer adult content to command premiums over raunchier low-budget content that is freely available in cyberspace.

"Porn sells" may be an old adage, but one also has to remember why Playboy recently went private at a buyout price in the single digits. DirecTV is obviously relying more on pigskin than porn to bring home the bacon, but the shifting model does have at least minor financial implications for some unlikely companies.

It's Not Easy to Round Up 30,000 Canadians

Netflix
(NFLX) issued a statement on Thursday, claiming that it now has a million subscribers for its Canadian streaming service. Most investors are applauding the video giant's ability to attract a million subscribers to a disc-less service in its first 10 months.

The problem here is that Netflix closed out its second quarter with 970,000 Canadian accounts. The statement claims that it crossed the important milestone in July, but it must have been late July since the press release didn't go out until four days into August.

This would indicate either high churn levels or a serious deceleration in subscriber growth. I was all over this during Netflix's last month's quarterly report: "After launching its streaming service during the third quarter [of 2010], Netflix added 380,000 Canadian customers during the fourth," I wrote at the time. "Just 290,000 net new accounts were tacked on during this year's freshman quarter, and a mere 160,000 net additions were generated this past quarter. The end result is that Canada is growing, but the rate is slowing."

Is this a seasonal slowdown or did it just take a long time to get the press release out after identifying its millionth Canadian subscriber? We'll have a clearer snapshot here when Netflix's third quarter report rolls out in two months.

Longtime Motley Fool contributor Rick Munarriz does own shares in Netflix. The Motley Fool owns shares of Google and Microsoft. Motley Fool newsletter services have recommended buying shares of Google, Microsoft, and Netflix.


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redman

i never thot id live to see the day, the fat cats on wall st. would start to crumble, but look what is happening. i was too young to witness the crash back in the 30,s but like most have heard about it. they say it rained bodies down on wall st.

well im old now, and ive worked hard all my life, paid taxes, just to see the rich steal from the middle class to aquire larg ammounts of cash to make more money with. ive always been poor...( no wait that isnt right) ive never been poor, but ive been broke a hell of a lot of times.

the thing of it is, we hard working folk who help make the country what it was,(and i use the past tense) knew how to get by with what we had survive. there isnt one of those types in washington or on wall st. who know how to keep the wheel turning when it starts to run out of grease.

in short. the very same people who caused all this mess and suffering for the poor and middle class are behind a rock and a hard place, because they never learned what we did. get by with what you have in your hand. there is no more for them to stee from us , and that is the only way they ever learned to survive.....grist form the mill......

August 08 2011 at 4:47 PM Report abuse +1 rate up rate down Reply
mark

HOLY CRAP Brickhead!!! your past flamming MAD Your going to stroke out!! We are all p*ssed but you have taken it to a new level, Take it easy !! We will get a grip on things, Your anger is going to eat you up, Man I'm sorry that things are freeking you out!!!!!!!!!

August 08 2011 at 4:36 PM Report abuse rate up rate down Reply
gramps180

Wall street is a sham. I sold out long ago . I couldnt out guess the crooks.

August 08 2011 at 1:57 PM Report abuse +4 rate up rate down Reply