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Old     (pesos)      Join Date: Oct 2001 Location: Texas       09-22-2016, 2:31 AM Reply   
Anyone been following this sh*tshow? I plan to pull all my personal and business funds from WF in the near future. Disgusting.

http://money.cnn.com/2016/09/21/inve...nts/index.html
Old     (cwb4me)      Join Date: Apr 2010       09-22-2016, 7:57 AM Reply   
I don't care what is reported on the Clinton News Network.
Old     (wakeworld)      Join Date: Jan 1997       09-22-2016, 8:05 AM Reply   
What's the Cliff Notes version of this scandal? All the articles I read just rant about how wrong it was, but doesn't go into specifics about what they did wrong (no, I did not search very hard). I know that they created phony accounts, but why? And how does it benefit Wells Fargo?
Old     (pesos)      Join Date: Oct 2001 Location: Texas       09-22-2016, 8:12 AM Reply   
From the top down they created intense pressure and incentives for staff to create fraudulent cards and accounts to rack up tons of revenue for WF. Employees who blew the whistle or complained to hr etc were fired and intimidated. The ultimate boss of that department was allowed to retire and given a $125 million bonus. 5.300 employees were fired which just goes to show this wasn't a few bad apples - it was the corporate culture.

This breaks it down to eight sections:
https://www.theguardian.com/business...-warren-senate
Old     (wakeworld)      Join Date: Jan 1997       09-22-2016, 8:25 AM Reply   
Wow, what a mess. I would assume that he would get fired if, for no other reason, than the stock price taking such a hit. Have they said he won't be fired? After watching those hearings, I don't think he'll be giving any money back because he's seems to be quite the tool. However, that's probably a good thing. Companies need to start being smarter with their compensation packages for executives and if he gives the money back then it just covers Wells Fargo's ass for hiring this guy and throwing money at him like it was going out of style. They need to feel some sting so that they don't make the same mistake with the next guy.
Old     (psudy)      Join Date: Dec 2003       09-22-2016, 8:36 AM Reply   
"to rack up tons of revenue "

I wouldn't say tons compared to their size. It actually cost them quite a bit more in reputation and fines.

http://www.forbes.com/sites/maggiemc.../#4f8a40fa57e4
Old     (pesos)      Join Date: Oct 2001 Location: Texas       09-22-2016, 8:40 AM Reply   
I'll stick by the statement of their intended purpose... I doubt it was in their plan to get caught, pay fines, or sully their reputation...
Old     (psudy)      Join Date: Dec 2003       09-22-2016, 9:30 AM Reply   
Whow! Not defending them. Just pointing out that for what it cost them it was a pretty stupid move.
Old     (cowwboy)      Join Date: Jul 2008       09-22-2016, 9:41 AM Reply   
I just wish they would start jailing some of the bankers for their deeds.
Not specifically these guys, but looking back at the the schemes that created the late 07-08 collapse.
They got away scott free and the government bailed out their mess.
I wish we had those involved sitting in high security fed prison and I guarantee a lot of this would stop.
No white collar club fed prison. But the watch your back or your getting shanked prison.
Old     (wakeworld)      Join Date: Jan 1997       09-22-2016, 9:59 AM Reply   
How you could think that house of cards wouldn't eventually fall is beyond me. Then again, the top execs probably don't care because their comp is based on short term measurements. Again, it's mistakes like these that teach the companies lessons. Maybe they won't pay bonuses based on quarterly stock prices in the future. I'm all for this guy being investigated, but I bet it's going to be tough to get any actual charges to stick to him. People need to stop using banks that are trying to screw them. We need to use the free market, not the government, for justice in cases like these.
Old     (Laker1234)      Join Date: Mar 2010       09-22-2016, 1:40 PM Reply   
It's sad, but the regulation train is soon to be rolling onto the tracks, which will likely only hurt the innocent.
Old     (Cabledog)      Join Date: Dec 2013       09-22-2016, 8:14 PM Reply   
Not surprised the Wake World liberals supported a baled out bank and are shocked with the outcome
Old     (pesos)      Join Date: Oct 2001 Location: Texas       09-22-2016, 8:25 PM Reply   
Speak for yourself, cabledogturd.
Old     (Cabledog)      Join Date: Dec 2013       09-22-2016, 9:21 PM Reply   
Quote:
Originally Posted by pesos View Post
Speak for yourself, cabledogturd.
I am speaking for myself. Who are you speaking for peso-shi*t. Do you have amnesia? Don't do business with bad businesses. It hasn't even been 10 years since their last big f-up. I'm not surprised but that CEO with an extra 100M sure knew what he was doing...
Old     (pesos)      Join Date: Oct 2001 Location: Texas       09-22-2016, 9:34 PM Reply   
I meant speak for yourself instead of making the absurd claim that ww liberals supported there bailout when bush and his cronies were the ones who designed, supported, and implemented the bailout. It passed both houses with plenty of both R and D votes.
Old     (markj)      Join Date: Apr 2005       09-22-2016, 10:22 PM Reply   
Quote:
Originally Posted by pesos View Post
Speak for yourself, cabledogturd.
I see you're following me up the high road.
Old     (markj)      Join Date: Apr 2005       09-22-2016, 10:25 PM Reply   
Quote:
Originally Posted by Cabledog View Post
I am speaking for myself. Who are you speaking for peso-shi*t. Do you have amnesia? Don't do business with bad businesses. It hasn't even been 10 years since their last big f-up. I'm not surprised but that CEO with an extra 100M sure knew what he was doing...
peso-shi*t? Lol. I just woke my wife up laughing at that one.
Old     (markj)      Join Date: Apr 2005       09-22-2016, 10:32 PM Reply   
I was watching a recorded speech by Hildabeast tonight and couldn't help but to think of this one word: fembot. She ABSOLUTELY has neurological issues.
Old     (pesos)      Join Date: Oct 2001 Location: Texas       09-22-2016, 10:40 PM Reply   
Doubt I could watch it without falling asleep. Unlike you I never claimed to be on that road!
Old     (psudy)      Join Date: Dec 2003       09-23-2016, 7:36 AM Reply   
Quote:
Originally Posted by Laker1234 View Post
It's sad, but the regulation train is soon to be rolling onto the tracks, which will likely only hurt the innocent.
That train has been steaming down the track for a while now. The only problem is picture the train hitting a football stadium compared to a two story office building. That is the affect it has on the smaller guys.
Old     (stingreye)      Join Date: Oct 2012       09-23-2016, 9:27 AM Reply   
Look up Glass_Steagall
https://en.wikipedia.org/wiki/Glass%...ll_Legislation

Then looking up banking revenue from products they sell that are not:
1) Gov't securities
2) FDIC insured products (CD's, savings accounts etc).

Banks were separated from insurance companies, brokerage houses, and investment banks for a reason. Previously, they were barred from being a FDIC member bank unless they stuck with plain vanilla banking products.

Wells Fargo was the pioneer in getting banking deregulated. This scandal shows how "illegally" customers were defrauded by higher margin products for the bank.

Legally, this same pressure is there. Imagine how much money they make convincing grandma that the CD's she owns only earn her 2% and she need to buy a deferred annuity that earns her 3% and the bank makes a lot more money on. It creates conflicts of interest in an area where banks used to be trusted because EVERYTHING you could buy there previously was a guaranteed/fdic insured investment, and now those are the lowest margin products for banks so their incentive is to sell you something else at a higher margin for them that by definition is riskier. Does grandma fully understand the increased risk of the product being sold or is the banker pressured into meet target quotas, etc.

Deregulation has made the banks a lot more money and there is less and less difference between any of the financial conglomerates.

Last edited by stingreye; 09-23-2016 at 9:29 AM. Reason: grammer clarity
Old     (denverd1)      Join Date: May 2004 Location: Tyler       09-23-2016, 11:16 AM Reply   
any comments on Dodd Frank? Volcker?
Old     (stingreye)      Join Date: Oct 2012       09-23-2016, 3:49 PM Reply   
I heard alot about Dodd Frank but haven't really seen the teeth in it yet, I need to do my homework but it seems like most financial institutions are not really operating much differently under Dodd Frank (again I could be ignorant). The things I have heard/read:
1) I think it was what caused some hedge funds to return investor money and become family offices was one of the impacts.
2) On the audit side, I believe this is where PCAOB audits came from and the auditors I know are always concerned when dealing with a PCAOB audit.
3) Banks shifted around assets they held for asset based tests. The valuation of deritives, doing stress tests, etc. I think all of this is required when traditional banks start doing more investment banking and insurance type activities. WAY over my head but I think the complexity of the modern bank vs traditional bank makes it much harder to evaluate the risk. Its not too unlike Enron that went from dealing in boring pipelines (what has become Kinder Morgan) to being a complex financial organization. Bank audit is a unique field and Enron I don't believe was audited by the bank/financial expert auditors, it was more a normal audit team.

Volker has had some unintended consequences that I have witnessed. The biggest one is inventory of bonds at bond desks for big banks. These desks could be classified as proprietary trading vs market making. The lack of inventory and market making seems like its harder to get good pricing on bonds for both buying and selling as there is less liquidity. At least that has been my experience comparing pre and post financial crisis. The intention was the prevent the bank making bets against its customers but bond inventory appears to have been a casualty.

My previous comment was more about structural differences in modern banking when it comes to incentives.

Last edited by stingreye; 09-23-2016 at 3:50 PM. Reason: Grammar spelling
Old     (denverd1)      Join Date: May 2004 Location: Tyler       09-27-2016, 7:50 AM Reply   
BoA to pay 15M in fines from mini-flash crash
Finland the 3rd euro zone state to see negative 10 year rates

I'm seeing limited bond inventory as well. Always amazed to see how legislation impacts the real world and how far it is from it intended consequences. Instead of curbing Goldman and JPM's betting against their clients with leverage, we have limited trading of the safest instruments on the planet. Gov't work for ya

Last edited by denverd1; 09-27-2016 at 7:52 AM.
Old     (granddaddy53)      Join Date: Dec 2013       09-28-2016, 8:22 AM Reply   
Quote:
Originally Posted by cowwboy View Post
I just wish they would start jailing some of the bankers for their deeds.
Not specifically these guys, but looking back at the the schemes that created the late 07-08 collapse.
They got away scott free and the government bailed out their mess.
I wish we had those involved sitting in high security fed prison and I guarantee a lot of this would stop.
No white collar club fed prison. But the watch your back or your getting shanked prison.

They didn't invent those loans that went bad after sold, the lib government insisted the loans be made to those who could not afford them . It started with Clinton , bush admin tried to stop it and they were called the usual racist , homophobic, every other phobic, this was a democrat liberal policy that caused this, quit blaming business, every problem this country had ever had came from a government program, remember the Great Depression , Hoover solved the one before it by not bailing someone out or by providing government relief. FDR the opposite and it was an extremely long and anemic recovery , just like now with the government bailout that did not work and the resulting anemic c recovery again. Yes the treasury secretary who
Organized the bailout was a republican, but more so a previous Goldman Sacs employee who recommended it and Goldman Sacs got to right all the writs to release the funds at a price, which is why Buffett bought Goldman because he knew of the bailout and there involvement in dispersing the funds, all very incestuous but it all starts with government 1st
Old     (granddaddy53)      Join Date: Dec 2013       09-28-2016, 8:25 AM Reply   
Quote:
Originally Posted by denverd1 View Post
BoA to pay 15M in fines from mini-flash crash
Finland the 3rd euro zone state to see negative 10 year rates

I'm seeing limited bond inventory as well. Always amazed to see how legislation impacts the real world and how far it is from it intended consequences. Instead of curbing Goldman and JPM's betting against their clients with leverage, we have limited trading of the safest instruments on the planet. Gov't work for ya
Bam!!!!!!!!
Old     (granddaddy53)      Join Date: Dec 2013       09-28-2016, 8:29 AM Reply   
Quote:
Originally Posted by stingreye View Post
I heard alot about Dodd Frank but haven't really seen the teeth in it yet, I need to do my homework but it seems like most financial institutions are not really operating much differently under Dodd Frank (again I could be ignorant). The things I have heard/read:
1) I think it was what caused some hedge funds to return investor money and become family offices was one of the impacts.
2) On the audit side, I believe this is where PCAOB audits came from and the auditors I know are always concerned when dealing with a PCAOB audit.
3) Banks shifted around assets they held for asset based tests. The valuation of deritives, doing stress tests, etc. I think all of this is required when traditional banks start doing more investment banking and insurance type activities. WAY over my head but I think the complexity of the modern bank vs traditional bank makes it much harder to evaluate the risk. Its not too unlike Enron that went from dealing in boring pipelines (what has become Kinder Morgan) to being a complex financial organization. Bank audit is a unique field and Enron I don't believe was audited by the bank/financial expert auditors, it was more a normal audit team.

Volker has had some unintended consequences that I have witnessed. The biggest one is inventory of bonds at bond desks for big banks. These desks could be classified as proprietary trading vs market making. The lack of inventory and market making seems like its harder to get good pricing on bonds for both buying and selling as there is less liquidity. At least that has been my experience comparing pre and post financial crisis. The intention was the prevent the bank making bets against its customers but bond inventory appears to have been a casualty.

My previous comment was more about structural differences in modern banking when it comes to incentives.
It did exactly what it was intended to do which was limit competition from smaller or start up banks . Dodd franks only made bigger bigger and smaller safer more nimble as non existent.

All legislation should be 10 pages legal front and back with 1subject per bill, and to pass a new law you have to get rid of 10 laws

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