Seriously. You Were Lied to About the Wells Fargo Employee Recognition Trip

From my DU Journal 2/3/2009:

Wells Fargo Balance Sheet (For the period ending 12-31-08

Wells Fargo Income Statement (For the period ending 12-31-08)


I can not believe the rabid frenzy over This.



Wells Fargo makes a hefty profit. They pay their taxes (Nearly 1.9 billion on 2008 earnings.) They did not want TARP money. They did not need TARP money. Their bank, unlike a certain "C" bank, who will go nameless, didn't need to prop up their image (and avoid a run on their deposits...)



It was forced on them by Paulson. The US Government is the main beneficiary, not Wells Fargo.


Wells Fargo paying $371.5 million {in dividends} to the US Government



If they want to spend some of their profits on a Sales and Service Conference for its employees in Las Vegas, then who gives a flying fuck?

Right...

(The numbers don't lie, but, evidently, irrational emotion does)

If they didn't need it, they shouldn't have taken it. It was not mandatory.

for example, my uncles own and operate a bank in Colorado. They had bank examiners come in and check the books at the beginning of the year. They were told, in no uncertain terms, that they needed to accept TARP money or else risk a lower rating. I know the balance sheet of the bank, and it is on very firm ground; a very low percentage of defaulting loans, great asset and equity quality, already paid for buildings, stable capital. My uncles's bank doesn't need TARP money, but it may be forced to get take it (and also pay an exorbitant dividend to the government as a result). TARP should only be used for banks that truly need it.

And the deal that Wells was "forced" to take wasn't funding for bad assets like how TARP was originally designed. Wells Fargo sold really good assets (class "D" preferred stock) in exchange for the funds that the bank did not need and did not want and can not repay to the Treasury until 3 years from the stock issuance date, at the very earliest.

because if your referring to reserve supervisory ratings, then frankly, i find it hard to believe that the bank is as sound as he says it is.

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PBS wouldn't cite ANYTHING even remotely "freeperish".



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because it's true.

So 371 mill ain't much.

They're making beaucoup money on the deal if they've loaned out 72 billion on the new capital.

Dividends for most (if not all) corporations are paid quarterly.

And Wells Fargo isn't even allowed to repurchase the "Class D" preferred stock that it was forced to sell the US Government for three (3) years.

All those tasty dividends!

It BLEEDS for Wells Fargo! :cry: :cry:

Wells Fargo is the most solvent and fiscally sound financial institution in the US (and perhaps the World.)

Paulson and the FDIC told Wells Fargo to accept a portion of the Treasury securities purchase agreement (NOT TARP) or they would be left out in the cold if they ever needed temporary assistance of any kind.

The Worst I Have Ever Encountered.

Maybe they save money by not training the employees very well.

That is hardly the topic at hand.

But thank you for injecting a personal grudge.

Wells Fargo.

:eyes:

And it's not a "personal" grudge. Everyone I know hates that bank (along with a few others...)

Exclude Wells’s $16.1 billion in servicing rights from its tangible assets and this important ratio falls to a skimpy 1.44 percent.

That is way below the average minimum ratio for the big banks of 4 percent between 2003 and 2007, according to Oppenheimer & Co.

To get to that level, Wells would have to raise between $25 billion and $32 billion. That is equal to between 30 percent and 40 percent of its current market value.

In terms of market value, Wells looks even more expensive. Wells’s shares now trade at a lofty 2.3 times tangible book value, compared with 1.1 times for JPMorgan. Exclude the servicing rights and Wells’s price-to-tangible-book ratio soars to about 4.3 times, while JPMorgan’s only inches up to 1.2 times.

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_reilly&sid=aGa7CqVUGpZM

Enron looked good once, too. who knows what's behind the facades. It's a large financial corp; therefore, it's crooked. Is my motto.

If they chose badly, to fucking bad.

Doesn't matter if you are making $ or not, excess is out of style.

it's not always that easy to get out of these contracts. If the trip was planned in the last few months this would be a valid point, but it was planned way before TARP was a twinkle in Hank's eye. Wells Fargo cancelled all of the trips for which they could get out of the contracts without taking penalty. They were not able to do that with this one, but after all of the brou-ha-ha, they had no choice but to take the hit.

get the reputation of the bank that goes gambling on the taxpayer's dime.

To go through with it after it was publicized would have been to flaunt it in the face of an outraged public. I'm sure any decent PR person would have advised to scuttle the trip.

:shrug:

I just can't conceive the situation where somebody walks up and says "here, you need to take this million dollars. Take it now." And then bank saying "no, we are solvent. we don't need that, but would appreciate it if you would set it aside for a time where we may." And then the government saying "NO, TAKE IT NOW OR IT WILL NEVER BE THERE AGAIN!" That's too unreal. If there's one thing that just doesn't happen in this world its people walking up and forcing you to take millions of dollars you don't need. I don't buy it.

they are usually founded on one piece of irrational garbage. The entire mental model is then built upon that. Like:
"tax cuts create jobs" --> "the best stimulus is tax cuts" --> "rich people help america"

This logic transformation is:

"wells was given the option for one time access" --> "they felt like they must have the option in the future" ---> "it was forced on them"

Psychotic.

Wells Fargo issued class "D" stock to the Goverment in exchange for the 25 billion. Wells Fargo isn't even allowed to repurchase the stock for 3 years. In one partial quarter of ownership, the Government received 371 Million dollars in dividends.

The designers of the program were afraid that if Wells Fargo didn't participate in the program, and the other large banks did, that it would cause a run on the deposits of the bank that needed the funds to maintain solvency.

Saying Wells Fargo in particular is undeserving of criticism? If so I you may be right, I can envision a situation similiar to the auto companies, where Ford is surviving well but receives aid anyway. And then is treated like the *needed* the bailout. However the pattern of bonuses for failed banks is pretty pandemic, and stretches WAY beyond Wells Fargo. If you're interested in defending Wells, you may want to emphasize that fact - its them alone - rather than that the readers here have been "lied to". I'll bet your reception would be a little warmer. ;)

The media frenzy over a non-story was revenge for Wells Fargo winning the battle for Wachovia over CitiGroup.

:tinfoilhat:

:eyes:

Wells Fargo deserves a pat on the back.

FUCK THE GODDAMN BANKERS. They were making money hand over fist and now they are caught having launched the nuclear missiles and cratering our economny and you want to defend them??

FUCK THAT!

Along with this :

Perfect. :D

It's a little naive to believe they are.

Some of these banks are well deserving of the criticism. Wells Fargo just doesn't happen to be one of them. They make conservative business decisions, are one of the last hold outs against outsourcing and really try hard not to lay people off. I hope that the pitch fork crowd doesn't force them into that situation.

So before getting carried away with telling people to grow up, maybe you should do a little research and gather some facts. Wells Fargo is in a different caliber and is the only U.S. bank in the top 10. There is a good reason for that.

Who has time anymore to use the "Google?"

Just google Wells Fargo and predatory lending.

They were the scum who foreclosed on a woman who bought a house for 147k, paying 40,000 down (that's right 40,000). Her loan went from around 850 a month to over 1,500. Maybe they were just better at predatory lending. Now that's something to celebrate.


As far as financial statements go, quite often they aren't worth the paper they are written on. When you're paying millions for an audit, it's easy to get the outcome you want. This is why the system for public audits needs to be entirely restructured.

I think the idiots thought we could send our manufacturing base overseas and become the world's financial center. But the idiots overlooked a key ingredient in making that work - a financial system that could be trusted and wasn't awash with fraud and greed.

but Wells Fargo can overall go f*ck themselves.

need to learn that nothing can be "forced" on them. Maybe that woman should have taken a fixed loan (esp. with such a great downpayment - she probably worked her ass off to get that kind of change to put down) and she'd still have her house, or got a less expensive house, or whatever it took to make her purchase less likely to be foreclosed upon. Or kept renting during such a crappy time. Or at least realize as she is being foreclosed upon, that she took a risk to get a lower payment, hoping things would go well for her, but it didn't. Choice, consequence, learn from it, and take another run at it with those lessons learned in mind. No one is going to look out for adults on a consistent basis other than the adult her/himself. Nobody cares about me and my family's best interests more than me and my family - I keep that in mind everytime someone waves a "good deal" in front of my face like a carrot.

Wells Fargo should have said no to the money, rather than cry about "force" - what an equal bunch of bull puckey. They weren't forced to take the TARP, they took a risk hoping to get some benefit from both the money and the .gov, and it means they are now under the taxpayer's supervision and budget guidelines. Choice, consequence, learn from it or in their case, give the money back to the taxpayers with interest and take another run at making your company profitable without borrowing from taxpayers. Until then, Wells needs to shut up and do business as the .gov dictates.

I do believe in predatory lending as a reality. I also know that not every foreclosed case is a matter of being a predatory lending "victim." I think the faster we as society learn to say no to illusory "good deals", even when disguised as good candy and toys for us, so that we maintain more control over our lives and homes. That is part of what distinguishes the judgment of an adult vs. a small child. Making bad choices and then waiting for someone to "help" us is a waste of a normal adult's time.

I think people need to empower themselves in these issues, which means just saying no to some of these temptations that carry a big stick to whack us with later. If, like me, you don't want banks or others having final say in whether you stay in your home or not in ordinary circumstances, then don't give the bastards an easy way to take your home from you.

I've rented earlier in my life, because the loan deals at the time had interest rates of 18% and it made no sense to me to tie up a substantial amount of my dollars in a down payment on a dwelling with that kind of price tag (many many years ago). When I got married and there were two paychecks, rates were down to 14% on a first (adjustable from that!!) + 16% on a second, and we bought. And paid too much for our first house, and lost money when we sold it. Not good, but you can bet I made some different choices in deciding when and how to use credit in the future so as to leave me as little exposed to risk as possible. When the bank loans you money, you are just a renter - you don't own your home and that is a fact I never forgot.

What you have written is pure crap. The woman put 40,000 down on a 147k house purchase and was able to afford her payments UNTIL they jacked them up to over 1,500. I understand finance and could easily take advantage of people like that woman but I have some scruples. So she had the choice to be preyed upon?

And how exactly was her loan a "good deal." It was hardly something to good to be true. Your post reminds me of people that work at a job where they prey on other people but they have to come up with some kind of justification for their unscrupulous behavior.

I absolutely understand predatory lending, personal responsibility and how to discuss/debate issues.

Your hostility is unwarranted, your rudeness is wasted on me, and your assumptions point out the truth of "to assume makes an ass out of you and me." If you want to discuss or debate the issues raised, I'd like to listen. But since I don't do victim very well, the aggressiveness and hostility probably won't lead to much productive discussion.

I've extracted enough people over the years to understand that we come in all different flavors - treating everyone as a victim insults real victims, imho. Have not only felt outrage over victims but have gone to bat and smashed the bat successfully against those who wronged them. I was way more into empowering people and giving them tools to make sure that by the time they needed me to swing that bat, it was an unavoidable situation (not just that they picked the worst choice of all they had, which lead to a predictably bad outcome). Also came across people who liked to pretend that their choices shouldn't ever have consequences, that don't want to learn from mistakes, that spend their lives blaming others for stuff they could have avoided. Those aren't victims.

When someone signs a contract like this which due to unforeseen circumstances becomes a lead weight, does that automatically assign them victim status, and the lender, predatory status? Would the person attain victimhood status if things completely foreseen as possibilities occurred and caused the person to have that bad particular outcome actualized? Is there room for grey areas or is everything always black and white on this issue? Or is the concept of trying your hardest to manage your personal risk out of date?

The facts you provided didn't lead to the conclusion that her plight was so out of her control as to make her a victim completely at the mercy of the lender. Since your responses do not visit any of the other issues I raised (esp. those against Wells) do not add facts that might be useful, and fail at their attempts to go "personal" when faced with a difference of opinion or inference, there is nothing to converse about here. Differing opinions don't make me uncomfortable, but just spitting over them and not learning anything new? Waste of time for both of us. Sorry to have dragged this on - great subject, but boring discourse.

because it doesn't seem to add up. If she has a 5 year ARM on a 30 year mortgage, which is what Wells Fargo offers, and she paid on it for 5 years, at a 5.5% rate (which it is now and was lower 5 years ago) she would have owed about $99,000 after paying her bill faithfully for 5 years.

So in order for her payment to have gone up to $1500, it seems as though she would have to be paying an 18% interest rate, which seems unlikely given the record low interest rates over the past 7 years or so. So how did her payment get to be that high? Does this include taxes and insurance (which the bank is not responsible for)?

I just refinanced my mortgage for significantly more than her original loan and my payments are nearly a third of $1500. I find it impossible to believe that if I had gotten an ARM that I would be paying nearly 3 times as much once the 5-years were up even if the interest rates were at record highs.

What else is going on here, because these numbers do not seem to pass the smell test?

much like blago, ignoring the rule of law equals pain. I have no sympathy for them.

This is the shit being spewed by Maria Bartolomo and the other bankists on CNBC all day. They were, actually, "forced." To this extent: money would be worth nothing if the TARP didn't save a certain "C" bank and some others. It would have been the complete collapse of the fiat currency. Since Wells Fargo also partakes in the fiat currency system, they'd be broke, too. It's not that complicated. The CNBC stooges pretend that some banks were "strong-armed" into the TARP but could have otherwise demurred. How very fucking silly. What they'll never say is that the TARP served one purpose and one purpose only: to rescue the utterly failed project of profit capitalism, to save not this or that bank ("C" or otherwise), but banking itself - the very concept and function of the bank as a going concern.

...rates.

I can understand the position they were put in by Paulson.

They all had to take the money, or there would be no "money." There would be no "competition." There would be no "lending." This was a radical problem of the entire historically specific mode of capitalist value. This wasn't an isolated problem of one company or another. It went to the very root of the existence and function of money itself as a universal equivalent. Fiat currency (like the value of gold before it) is a social arrangement: that gold or currency have "value" is utterly arbitrary with respect to their material existence (gold does NOT have any more fundamental USE value than paper money, or digital money when it comes to material life, since you can't eat it or live in it: it's value is an agreement that it should function as a value, as EXCHANGE value, and nothing more). If Citi and the others had collapsed, that social arrangement would have been null and void, and with it, the very value of money in general. So it wouldn't have mattered if Wells fargo was 'liquid" while Citi was insolvent. It was a crisis of liquidity ITSELF. Wells Fargo's money would be just as worthless as Citi's: it would have no value or function, because the social agreements that bestow value and function on it would be voided. Chaos. True chaos: the collapse of the only way most of us have known of arranging our lives and production. Finished.

...about how Wells Fargo didn't take as much TARP as the others. There's this shitty little bank in Wisconsin (MNI) that took more than Wells and they can barely count change at the teller's window.

...no money at all at a future date.

Paulson put them in a funny position.

by Paulsen, he also told them that the economy was in such dire straits, if they didn't help and the economy completely collapsed, they would be responsible. Paraphrased, but that was the gist of what he said, essentially telling them they'd be "unAmerican" if they didn't help. If I had been one of those CEO's, I would have said yes too. What were they supposed to do, say fuck America and fuck the economy. Sure, we may had a role in what is now happening, but we aren't going to help get the country get out of this mess.

As a stockholder, YOU BET YOUR ASS I'm pissed that they'd even THINK of doing such a thing.

The stock market is hardly an adequate measure of a company's health. With everyone in a panic over bank failures, a lot of people pulled their money out of ALL bank stocks, just to be on the safe side.

If you're still a stockholder, you should be 1) happy that WF is doing well, 2) looking to buy more at the reduced rate, and 3) expecting to hold onto this stock for a while (as you probably should with any such investment).

Thank you for this very interesting and informative thread. As one whose knowledge of the banking industry in general and TARP in particular is, shall we say, lacking, the information I gathered here has helped me to understand what is happening, at least to the point where I can discuss it with some degree of certainty.

Special thanks to PBS Poll-435, crimsonblue, Hannah Bell, mkultra, Hansel & alcibiades_mystery for your well written informative posts.

EBM

:kick: