When Farah Patel needs to make a purchase, she often pulls out her MasterCard debit card, which deducts her purchases automatically from her bank account. The 30-year-old Greenwich, Conn. woman said she prefers it to her credit card.
“I don’t want to pay for my gas with a credit card and know I’m going to be paying interest on gas,” she said.
Patel is one of many debit card users who have helped MasterCard reach a new milestone. For the first time ever, the company said, U.S. debit card customers spent as much with their MasterCard debit cards — $118 billion — in the last fiscal quarter as they did with their credit cards.
Ask any bank CEO and they’ll tell you: reporting great profits at the same time lawmakers and advocacy groups are clamoring for an overhaul of your industry doesn’t make for great public relations. Recent positive third-quarter earnings reports by major health insurance companies may put them in the same boat — but do they really deserve to be there?
Some analysts say no.
“Insurance companies are not money trees. They got out into the market and buy health care services and resell those services at some markup at health care consumers. I would argue that markup is not that much,” said Thomas Carroll, a health care analyst at Stifel Nicolaus. “This whole notion of big bad insurance companies is rather silly.”
Former AIG chief executive Hank Greenberg is defending himself against criticism that his creation of AIG’s Financial Products unit was what ultimately led to the company’s spectacular decline.
“I’ve been out of the company for four years,” he said in an interview with ABCNews.com. “How could I be responsible for the problems they are suffering?”
A source close to AIG told ABC News that Greenberg was to blame for creating a unit that “put the whole company and the whole economy at risk.”
But Greenberg, who also criticized AIG for its retention bonuses today, said that under his tenure, the unit earned $5 billion by writing credit default swaps — financial instruments that essentially act as insurance policies on other investments — that passed the standards set by “the best risk management (departments) in the damn industry.”
In the dog-eat-dog world of big business, you don’t often hear about a company sticking up for a rival. Yet, earlier this week, Ford declared that it supported government help for General Motors and Chrysler, even while Ford itself said it could do without the short-term loans now under consideration by Congress.
Ford has made clear that it doesn’t want to see its cross-town competition put out of business … but don’t start singing Kumbaya yet. On Ford’s part, it’s not exactly a selfless move. Among the Detroit 3, there is substantial overlap among auto parts suppliers, and if even one domestic automaker collapses, parts suppliers – which are already struggling because the automakers have cut down on production and their purchase of supplies in recent years – could find themselves going under, too.
What does a cash-strapped American city look like?
Think fewer libraries, fewer public works projects, fewer after-school programs, fewer police officers and fewer public employees overall.
Thanks to the whimpering economy, some city officials say such reductions will match their significantly smaller budgets. But they’re also hoping the federal government will be able to ease at least some of the pain.
“What we’re saying is these are some ways that you can help us so we can help shore up the economy at the local level,” said Atlanta Mayor Shirley Franklin. “It’s a win-win.”
The news of a potential trillion-dollar federal government solution to the credit crisis is the dominant news story of the day, but let’s not sell the other news short.
The Securities and Exchange Commission announced today that it is temporarily banning the short selling of 799 financial stocks to “to protect the integrity and quality of the securities market and strengthen investor confidence.”
Cybele May, the founder of the candy review Web site Candy Blog, said that in recent years rising cocoa prices have led candy companies like Hershey’s — the maker of Take 5 and the top chocolate-seller in the U.S. — to replace cocoa butter with cheaper vegetable oils. The ingredients list for Take 5, for instance, now includes “palm, shea, sunflower and/or safflower oil.”
“They just ruined that,” May said of the Take 5 bar…Read more on ABCNews.com.
The most selective universities in the country this year posted record-low admission rates that dipped into the single digits — a result, many officials say, of sky-high application totals. As colleges such as Harvard and Princeton released their rates, they also touted the diverse backgrounds of successful applicants, who include students of color and international candidates.
But there’s at least one admissions statistic that many top colleges don’t trumpet…Read more on ABCNews.com.
Former Hollywood Madam Heidi Fleiss told ABC News that for rich, busy men, the convenience and predictability of using expensive prostitution rings are worth the price… Read more on ABCNews.com.