What Was Wall Street Thinking? $5 Debit Card Sting, Berkshire's Buyout, Oracle's HP Shot, and More


There's never a shortage of silliness when it comes to Wall Street. In case you were offline last week, here are some of the week's biggest surprises and head-shaking blunders.

Debit discredited: Last week's move by Bank of America (BAC) to begin charging its customers $5 a month if they use their debit cards for purchases is going to sting.

Folks still see Bank of America as the poster child of the "too big to fail" banks bailout. This move is going to reopen old wounds. Taxpayers had to bail out Bank of America, and now it's going to bilk the same taxpayers that also happen to be accountholders?

With the kind of consumer resentment that's going to bubble up in the coming days and weeks, I wouldn't be surprised if Bank of America doesn't start sending out bank statements in red rectangular mailers.

When executives attack: It's not a surprise to see Oracle (ORCL) CEO Larry Ellison needling Hewlett-Packard (HPQ), but things have gotten uglier than usual.

Ellison kicked things off by claiming that Autonomy -- which HP recently bought for $10.3 billion -- was originally shopped to HP for $6 billion earlier this year. Ellison said he balked, arguing that Autonomy was overpriced at the time. In other words, he was taking another shot at HP, this time implying that it's grossly overpaying for its acquisitions.

Autonomy chief Mike Lynch fired back, claiming that his data management company was never directly shopped to HP. Ellison has never been a shrinking violet, so he went ahead and posted the presentation's slides on Oracle's website -- at oracle.com/pleasebuyautonomy. Yes, Ellison even packs a punch when his company is naming Web pages.

Autonomy's response -- through Frank Quattrone, who helped shop the deal -- was that those slides were sent to Oracle exec and former HP CEO Mark Hurd three months before the alleged shopping visit in April.

Who's right? Did Ellison go too far by publishing the PowerPoint slides? Either way, HP is once again learning that you don't mess with Ellison unless you want to be embarrassed.

Buffett's surprising buffet: Has Berkshire Hathaway (BRK-B)(BRK-A) run out of investment ideas?

Warren Buffett's legendary holding company is doing something that it's never done before: Berkshire Hathaway is ready to buy back some of its own shares.

Stock repurchases are generally viewed as a good thing by the market. Done right, buybacks can improve earnings on a per share basis by reducing the number of shares outstanding. However, investors buy into Berkshire Hathaway to profit from the timely trades and acquisitions of Buffett and Charlie Munger. Is Berkshire Hathaway sending the wrong signal when it decides to buy into itself instead of using its tens of billions in the bank to buy more of the investments that have fallen even harder than the holding company?

I realize that I'm in the minority here. The stock popped higher on the news, possibly to the point where Buffett won't be buying at all (since he limited the timing of the purchases to when Berkshire Hathaway is trading for less than 110% of book value). Bulls will argue that Berkshire Hathaway's intrinsic value makes it a great buy at this point. I'm just not overly impressed to see Buffett do what any lay investor can easily do.

A fee for those glasses: Sony (SNE) has had it with footing the bill for 3-D specs. According to The Hollywood Reporter, the movie studio is telling theater owners that it will stop paying for the glasses handed out at its 3-D screenings come May of next year.

Studios want to move to the ownership model, where moviegoers bring in their own 3-D specs. Exhibitors can sell them to patrons who don't own a pair -- or left their glasses at home -- as an additional profit center. This is the model used in many countries, but stateside celluloid buffs are already paying at least $3 more for a 3-D screening over the more conventional 2-D flick. Isn't this the kind of move that will ultimately kill 3-D?

This has already been a challenging year at the local multiplex. Box office receipts are down year to date. Going out to the movies shouldn't become even more inconvenient or expensive, especially at a time when the release window between theatrical and DVD releases is narrowing and streaming technology at home is improving.

"Fade to black" means a profitable Wall Street, but it has an entirely different meaning on the silver screen.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article, except for HP. The Motley Fool owns shares of Berkshire Hathaway, Bank of America, and Oracle. Motley Fool newsletter services have recommended buying shares of Berkshire Hathaway.

Increase your money and finance knowledge from home

Investing in Real Estate

Learn the basics of investing in real estate.

View Course »

Portfolio Basics

What are stocks? Learn how to start investing.

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:
Russell Bennett

An amendment by Durbin cut BOA income by over 2 billion. They must make it up as a lot people depend on them.
Check out (google NYT. sept 30 Mortgage Crisis) See what else the Goverment did to help us.

October 03 2011 at 11:20 PM Report abuse rate up rate down Reply
1 reply to Russell Bennett's comment

Like I say, If you want to screw something up, just get the government involved.

October 04 2011 at 5:44 AM Report abuse +1 rate up rate down Reply

http://durbin.senate.gov/public/index.cfm/statementscommentary?ID=7906be86-810d-4a74-8836-df1b09f35e2c..............read all the gobbldleeegook bs from tiny dick turban on that debit card and the how and why the fees went over to the user not the business amd as always,brought right to your door courtesy of the deMs.

October 03 2011 at 10:10 PM Report abuse rate up rate down Reply
Morris Cantonitis

And in 2011, 201x, 201 EVIL Man,
The Wall Alley PIGGS, for their GREED they will pay,
Satan’s pizza man came with a delivery today,
A wonderful pizza for Halloween witches with brooms,
And loaded with toppings, small and big mushrooms

October 03 2011 at 9:48 PM Report abuse -1 rate up rate down Reply

Hi there, I'm a Democrat. Do you know where your country's at? We borrow trillions, spend, tax and print. Who cares where the money went? Jobs in China or someplace. We'll spend some more just in case. Take from the workers; give to the lazy. That gets votes so it's not crazy. Socialism is wonderful. Capitalism's a lot of bull. Lord Obama, he's our man. We'll vote for him as often as we can.

October 03 2011 at 9:47 PM Report abuse +1 rate up rate down Reply
Morris Cantonitis

The criminal deeds of the US Financial PIGGS affects the world all,
Parasitic leech medicine for their red plague ready to install,
Satan’s package comes in big and small,
The buildings they smolder topple and fall,
And all looks for the next day gap,
But nothing is there except a smoking pancake flapjack.

October 03 2011 at 9:12 PM Report abuse -1 rate up rate down Reply
1 reply to Morris Cantonitis's comment

Doesn't rime too well but at least it sort of makes sense.

October 03 2011 at 9:24 PM Report abuse +1 rate up rate down Reply
Morris Cantonitis

and all Satan's piglets that criminally short the markets DOWN promoted with lies

Satan will show u in his window all VITRIFIED.


October 03 2011 at 7:49 PM Report abuse -2 rate up rate down Reply
Morris Cantonitis

Where are U Boehner?

U do not need to hide.

Satan has his anal serpentine trident ready for U AGAIN to rock back and forth on for your joy and orgasm.

U know U want another ride so no need to hide.

Bad Bad Red Plague and Wall Alley PIGGS.

U bring shrooms on NYC fine pizza.

October 03 2011 at 7:26 PM Report abuse -2 rate up rate down Reply
1 reply to Morris Cantonitis's comment

moris ? WE KNOW there IS a MESSAGE HERE only dechipherable to ONE---and the 1 is U !

October 03 2011 at 10:12 PM Report abuse +1 rate up rate down Reply
Morris Cantonitis

The clouds stand Daarck for the Wall Alley PIGGS.
NO where for the PIGG to run.
No where for the PIGG to hide.
Satan has Mushroom Fun.
Won’t need formaldehyde.
Gifts from Satan
AS the Clock ticks the Hour.
Where are the Futures?
There can be ONLY 1 PIG and for Satan’s stew
NYC GETS NUKED, #1 hot n spicy pork barbecue.

October 03 2011 at 7:19 PM Report abuse -2 rate up rate down Reply

Politicians in Washington caused this. Durbin's stupid bill that was a gift to retailers, raised the cost of doing business for banks. The result? Banks have to cut back on something (jobs lost, bank branches closed, services curtailed) and/or they charge customers more. The government has no magic wand that can make things cost less. Every time politicians do something to "help", it always makes matters worse. Wonder how much retailers are contributing to Durbin's campaign?

October 03 2011 at 3:01 PM Report abuse +1 rate up rate down Reply
1 reply to tulipforme's comment

Let me get this right. Banks must cut back. Yes on their greed. They are going to lose more by even thinking about charging these fee's. I for one will closes all my accounts with them. Now lets count seeing how banks like numbers. That 3 for me, 3 for the wife 3 for my son.Shall I go on because I can if you like but I think it's pointless. HOW DID THIS RAISE COST? Don't you mean slimmed back their greed. Tell me what's your answer to keeping them in line with the real world. They want to play games, lets play, I always like a challage. Talk to suntrust they tried that weeks ago. Account closed. Don't use debit card no problem cash still works. So as you can see I really don't care what they do. For I also will/can play their game.

October 03 2011 at 8:49 PM Report abuse rate up rate down Reply
Christopher Blaise

Oh BofA! What are we going to do with you?
And pay for 3D glases?

October 03 2011 at 2:18 PM Report abuse +2 rate up rate down Reply