In Search of the Perfect Investment

I like AMZN, CAT,  VGK (for Europe) and VZ (for the yield). And soon, WFC as a short.

Wells Fargo keeps making cockroaches. Just about to breach support. Here’s WFC year to date.

Stumpf is appearing before Congress again this morning.

Now read today’s New York Times story:

 California Suspends Some Ties With Wells Fargo

Citing Wells Fargo’s “venal abuse of its customers,” the California treasurer took the unusual step on Wednesday of suspending many of its ties with the San Francisco bank as it continues to reel from the scandal over the creation of as many as two million unauthorized bank and credit card accounts.

The state treasurer, John Chiang, said he was suspending Wells Fargo’s “most highly profitable business relationships” with the state for at least a year, including the lucrative business of underwriting certain California municipal bonds.

On Tuesday alone, he said, he had pulled Wells Fargo off two large municipal bond deals.

“How can I continue to entrust the public’s money to an organization which has shown such little regard for the legions of Californians who placed their financial well-being in its care?” Mr. Chiang wrote in a letter on Wednesday to the bank’s chairman and chief executive, John G. Stumpf, and the bank’s board members.

Mr. Chiang said he was also suspending making any additional investments in Wells Fargo securities and would suspend the bank’s work as a broker-dealer hired to buy investments on the treasurer’s behalf.

The suspensions will last for one year, Mr. Chiang said, or longer if he finds evidence that Wells Fargo has “re-engaged in the same behavior” or failed to abide by the terms of a consent order it signed with the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency.

The move could cost Wells millions of dollars in banking fees because California is the largest issuer of municipal debt in the country. A state official said the suspension did not affect Wells Fargo’s role in every municipal bond deal, but it would cut them out of a significant portion. In addition to overseeing bond deals, the state treasurer also manages $75 billion worth of investments.

But more than anything the move is symbolically hurtful for Wells, which has a large presence in California, particularly in San Francisco, where its top executives work and live.

Mr. Chiang, a Democrat who is running for governor in 2018, said his office had “long relied on Wells Fargo, our oldest California-based financial institution, as a partner to meet the state’s investment and borrowing needs.”

So far this year, California has sold about $50 billion in municipal debt out of total of about $318 billion issued nationwide, according to Municipal Market Analytics, a research firm.

Mr. Chiang noted that he sits on the board of the state’s giant public pension funds, Calpers and Calstrs, which have a combined $2.3 billion invested in Wells Fargo stock and debt securities. He said he would use his position on the pension boards to push for governance changes at Wells Fargo, including separation of the chairman and chief executive roles. Currently, Mr. Stumpf holds both positions.

In a statement, the bank responded: “Wells Fargo has diligently and professionally worked with the state for the past 17 years to support the government and people of California. Our highly experienced and proven government banking, securities and treasury management teams stand ready to continue delivering outstanding service to the state.”

Separately, on Thursday, Mr. Stumpf is scheduled to testify in Washington before the House Financial Services Committee, having already appeared last week before the Senate’s banking panel. The responses he gave to the Senate committee investigating the bank’s misdeeds were widely viewed as a disaster. Nevertheless, according to a copy of his prepared remarks, he plans to stick with the same script he used last week.

His planned testimony, which was obtained by The New York Times, is a nearly word-for-word repetition of the introduction he prepared for last week’s Senate hearing, with just one notable difference: Hastening a policy change, Mr. Stumpf plans to say that Wells Fargo will eliminate sales goals for its retail bankers by Oct. 1, three months earlier than it had planned.

Those aggressive sales goals, which pushed Wells Fargo employees to open as many accounts as possible for customers or risk losing their jobs, have been blamed for the scandal now engulfing the bank, where myriad banking and credit card accounts may have been opened without the customers’ authorization.

“We decided that product sales goals do not belong in our retail banking business,” Mr. Stumpf will say, according to the testimony.

As he did at the Senate hearing, Mr. Stumpf plans to say he is “deeply sorry” and will “accept full responsibility for all unethical sales practices.”

Under fire over the unauthorized accounts, Wells Fargo’s board announced on Tuesday that it was stripping Mr. Stumpf of unvested stock awards valued at $41 million. He will also forgo his bonus this year and a portion of his $2.8 million base salary.

The clawback of both Mr. Stumpf’s compensation and that of Carrie L. Tolstedt, who until recently ran Wells Fargo’s retail banking division, was a move that members of the Senate panel suggested last week. The fact that the board decided to do so right before the House hearing does not seem coincidental.

And the move to retract a portion of Mr. Stumpf’s lavish compensation – at the time of Wells Fargo’s latest annual disclosure, he held shares and options valued at around $247 million – has not appeased some senators who criticized Mr. Stumpf last week.

“This is a small step in the right direction, but nowhere near real accountability,” Senator Elizabeth Warren, Democrat of Massachusetts, said in a statement.

She again called for Mr. Stumpf to resign, to “return every nickel he made while this scam was ongoing” and to face a criminal investigation.

On Wednesday, in what felt a bit like a warm-up for Mr. Stumpf’s appearance on Thursday, the House Financial Services Committee grilled the Federal Reserve chairwoman, Janet L. Yellen, about the handling of the Wells Fargo scandal. Some lawmakers called for tougher punishment of big banks and their executives when they run afoul of the law.

“Will you at least seriously consider breaking up Wells Fargo?” asked Representative Brad Sherman, Democrat of California.

Ms. Yellen responded that regulators would hold financial institutions to “exceptionally high standards of risk management, internal controls, consumer protection.”

Others on the committee continued to press the issue.

“How long does this stuff have to go on before you get outraged and take action?” asked Representative Michael Capuano, Democrat of Massachusetts. He said that the $185 million fine against Wells Fargo, which has $1.9 trillion in assets, “is barely a footnote in their annual report.”

Ms. Yellen said that regulators had already begun a review of practices at all of the largest banks.

“We are undertaking a look comprehensively, not only in the consumer area but compliance generally, because there has been a very disturbing pattern of violations,” she said.

And regulators are working to complete a long-pending rule on executive compensation designed to limit excessive risk-taking at financial firms, Ms. Yellen said. “I will do everything that I can at the Federal Reserve to be ready to act on this as soon as possible,” she added.

Wells Fargo has been in crisis mode since it acknowledged this month that its employees had, over the course of several years, opened as many as 1.5 million bank accounts and 565,000 credit card accounts that may not have been approved by customers. The company has fired 5,300 employees for ethics violations.

Mr. Stumpf’s efforts to minimize these actions did not play well at last week’s Senate hearing. Facing a barrage of criticism about Wells Fargo’s leadership and what ex-employees describe as a toxic sales culture of relentless pressure to meet unrealistic goals, Mr. Stumpf maintained that the problem did not extend beyond rogue employees whose activities “did not honor our culture.”

Banking analysts were not enthusiastic about the idea of him continuing that line of argument at Thursday’s House hearing.

“Given the nearly universal assessment that Mr. Stumpf’s Senate appearance was lackluster, sticking with the script may prove imprudent,” Isaac Boltansky, an analyst at Compass Point Research & Trading, wrote in a note to clients after reading the prepared remarks.

One big question facing Mr. Stumpf is whether he will remain at the helm of the bank. Some analysts who follow the bank are beginning to openly speculate about Mr. Stumpf’s possible ouster.

“Our support for the C.E.O. is now wavering,” Mike Mayo, a banking analyst at CLSA, wrote in a research note on Monday. “His actions have been reactionary versus leading.”

iPhone 7 sales are exploding

At least that’s the message I get from Verizon, whose rep explained last night that Verizon’s computers were “overwhelmed” with iPhone 7 and were acting very very slow. Like hours slow to send responses to simple requests.

Every carrier and their uncle seems to be selling iPhone 7 or iPhone 7 plus for $200 to $250 if you trade in your present iPhone 5 or 6.

It’s a great deal. 

Buying from Verizon is a pain. I don’t know about AT&T. Apple itself doesn’t offer a trade-on on your old phone.

We suffered throughVerizon’s awful buying — and wait for this — confirmation of buying process — yesterday, last night and this morning. Finally, we’re now on track to receive Susan’s new iPhone 7 plus some time before Christmas. God willing.

Why trade is so unpopular.

International trade has been shown to lower prices, lift wages and expand economies. But the benefits have not been shared equitably, and governments have failed to help the workers most harmed.

Hence, anti-trade feeling is rising in the United States and Europe.

In the U.S., training costs for a new trade are not tax deductible. Enhanced training in your existing trade or profession is tax deductible — even though there may be no jobs in your existing profession.

This needs to be changed in the tax code.

Some European countries, e.g. Sweden, will actually pay for you to learn a new trade.

Maybe we can get a little movement going here?

If you get one of these USB flash drives in the mail, throw it out

Do not insert it into your laptop. The USB flash drive you just got for free  contains a virus that might turn into ransomware.

Ransomware its the worst. it locks your computer so you can’t get to anything on it. It tells you to call a phone number and pay them money, oodles of it. They then unlock your computer. If you’re lucky, they won’t re-lock it in a month or two and demand more money.

My old (cracked record) recommendation: If you’re using Windows, remove your hard drive, and clone it. Do it today. Use this device, called an Aluratek hard disk duplicator.

To buy it (for a bargain $60), click here. 

When you get hit with ransomware, simply remove your working, now infected hard drive and replace it with the cloned one you kept in a drawer. Then clone the old one to the infected drive. That will remove the ransomware.

 Here’s how to clone your Apple’s hard drive — click here. Or ask the Genius Bar. I don’t use Apple computers.

They Walk Among Us

+ I was walking down the beach with some friends when someone shouted….. “Look at that dead bird!”

Someone looked up at the sky and said…”Where?”

+ My brother explained that the sun rises in the east and has for some time.

She shook her head and said, ‘Oh, I don’t keep up with all that stuff……’

+ My colleague and I were eating our lunch in our cafeteria, When we overheard an admin girl talking about the sunburn she got on her weekend drive to the beach.

She drove down in a convertible, but said she “didn’t think she’d get sunburned because the car was moving.”

+ I couldn’t find my luggage at the airport baggage area and went to the lost luggage office and reported the loss.

The woman there smiled and told me not to worry because she was a trained professional and said I was in good hands. ‘Now,’ she asked me, ‘has your plane arrived yet?’…

+ A man was driving when he saw the flash of a traffic camera. He figured that his picture had been taken for exceeding the limit, even though he knew that he was not speeding. Just to be sure, he went around the block and passed the same spot, driving even more slowly, but again the camera flashed. Now he began to think that this was quite funny, so he drove even slower as he passed the area again, but the traffic camera again flashed. He tried a fourth time with the same result. He did this a fifth time and was now laughing when the camera flashed as he rolled past, this time at a snail’s pace.

Two weeks later, he got five tickets in the mail for driving without a seat belt.

Harry Newton. Don’t do stupid this weekend. Don’t fall down the last step. I keep meeting people who have. Don’t forget to take 1000 IUs of Vitamin D3. My doc says everyone should take one pill a day of Vitamin D3.

Donald has some serious crazies supporting him. Here’s yesterday’s comment from someone called “Toby Bugfoot,”

Harry, your friend from Aussie land sounds like a WIMP. Listen to me and listen to me good, boy – DONALD J TRUMP IS GOD. Got it? And when he’s president on Nov. 8 I hope he bombs the sh*t out of australia, Norway, Aleppo, Syria and Canada. Wise up, this is Trump Country and immigrants must leave.

Friendly fellow. They are among us.