Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Wells Fargo

Markets Move Higher Following Crash Instigated by Obscure Agency

This article appeared online at TheNewAmerican.com on Wednesday, February 7, 2018: 

English: Logo of The Goldman Sachs Group, Inc....

With Wall Street regaining its footing following the decline that started last Thursday, commentators in the mainstream media are still searching for the decline’s cause. Initially they claimed that it was an unexpected surge in inflation evidenced by the rise in the yield of 10-year U.S. Treasury notes approaching three percent (in early September it was closer to two percent). This was followed by the jobs report that announced that wages increased 2.9 percent year-over-year, up from just over two percent previously.

Writers at the Wall Street Journal dug deeper: The selloff was caused by — ready? — “volatility sellers, risk-party funds and algorithmic trading.” They then went into mind-numbing detail about how these strategies work and how the crash cost people using in them in excess of $200 billion.

Peter Schiff, CEO of Euro Pacific Capital, told TheStreet.com that maybe it was the Federal Reserve’s unhappiness with The Donald:

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Sorry, Inflation Worries are Not Behind the Selloff in Stocks

This article was published by The McAlvany Intelligence Advisor on Wednesday, February 7, 2018:  

All manner of explanations for the recent market selloff in stocks have come out of the woodwork: the market has gotten ahead of itself; it was due for a correction anyway; it’s been 400 days since a three percent correction; and so on. The least informed is that all of a sudden there is inflation! See? The yield on the 10-year Treasury is up 80 basis points since September! That must mean there’s inflation! Couple that with the “surge” in wages just reported by the Bureau of Labor Statistics (2.9 percent year-over-year compared to 2.2 percent reported previously) and – voila! – inflation is back. Time to take profits!

Most commentators didn’t bother to check with the Fed, specifically the Cleveland Fed and the St. Louis Fed, which report the real numbers on inflation and money supply. First:

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Treasury Advisory Committee Says U.S. Must Borrow Trillions, Sending Stocks Down

This article appeared online at TheNewAmerican.com on Monday, February 5, 2018:

When an obscure advisory committee announced last Wednesday that the U.S. Treasury would have to borrow billions to fund Trump’s tax reform program, the stock market pitched headlong into a selloff, dropping Thursday, Friday, and early into Monday. Before the selloff, the Dow was approaching 26,300, but by the close on Friday it had lost 760 points. The rout continued into Monday, with the Dow down more than 1,200 points from Wednesday’s high. [Note the rout continued into Tuesday but found some footing by the end of the day.]

Much handwringing by commentators blamed the selloff on various technical factors:

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From Hero to Zero: $2-Billion Private Equity Fund Goes Broke in Oil

This article appeared online at TheNewAmerican.com on Tuesday, July 18, 2017:

J. Paul Getty Trust

EnerVest Ltd., a Houston-based private equity firm run by John Walker, is being taken over by one of its largest lenders to satisfy its unpaid debts. The firm raised capital from large investors, foundations, and pension plans and bought existing oil wells, improved them, and sent the dividends back to the investors.

In 2011, it had come off a very successful year. It owned 19,000 onshore oil wells on four million acres of land in 12 states. Its previous investments delivered a compounded annual return of 36 percent, a track record that made it relatively easy for Walker to raise additional capital. In a classic understatement, Walker said, “We had an outstanding year.” He explained just how he and his company did it; he bought cheap and sold dear, without using borrowed funds:

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From Hero to Zero: $2-Billion Private Equity Fund Goes Broke in Oil

This article appeared online at TheNewAmerican.com on Monday, July 17, 2017:  

Wells Fargo

Wells Fargo

EnerVest Ltd., a Houston-based private equity firm run by John Walker, is being taken over by Wells Fargo, one of its largest lenders, to satisfy its unpaid debts. The firm raised capital from large investors, foundations, and pension plans and bought existing oil wells, improved them, and sent the dividends back to the investors.

In 2011, it had come off a very successful year. It owned 19,000 onshore oil wells on four million acres of land in 12 states. Its previous investments delivered a compounded annual return of 36 percent, a track record that made it relatively easy for Walker to raise additional capital. In a classic understatement, Walker said, “We had an outstanding year.” He explained just how he and his company did it; he bought cheap and sold dear, without using borrowed funds:

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Best Advice in Politics: Don’t Give Money to Liars

This article was published by The McAlvany Intelligence Advisor on Friday, September 23, 2016:  

Hillary Clinton presidential campaign, 2008

Last Friday, Mish Shedlock, author of the MishTalk blog, riffed on an “exclusive” report published by the Observer. That report claimed that Hillary Clinton’s campaign was repeatedly charging one-time donors’ credit cards without their permission. This was allegedly being done not only to raise additional funds, but to improve her campaign’s reporting to the Federal Election Committee that a lot of her support was coming from small donors.

Shedlock read the report, published it in its entirety on his blog, and then added this disclaimer:

I cannot prove any of this. Nor can anyone else unless they have a recording of the call. But there is a moral to this story, two actually:

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Trump Advisor Publishes Story About Clinton Campaign Repeatedly Charging One-time Donors

This article appeared online at TheNewAmerican.com on Wednesday, September 21, 2016:  

Back in March Carol Mahre, an 81-year-old grandmother and lifelong Democrat, decided to contribute $25 to the Hillary for America campaign. She gave a staff member her account information and on March 16 $25 was deducted from her US Bank checking account.

Later that day another $25 was deducted from her account. On March 29 $19 was deducted from her account, payable to the Hillary for America campaign.

She tried unsuccessfully to get the campaign to reverse the charges and asked her son Roger, a local attorney in Maplewood, Minnesota, for help. He picked up where she left off,

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Revolving Credit Lines to Oil Industry Pose New Hazards to Banks

This article appeared online at TheNewAmerican.com on Tuesday, April 12, 2016:  

One Wells Fargo Center – Charlotte, North Caro...

One Wells Fargo Center – Charlotte, North Carolina

As earnings season on Wall Street starts, investors in the big banks are just now learning about unfunded revolving lines of credit (revolvers) that those banks extended to oil and energy related companies when times were better.

Ten of the largest U.S. banks, including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo, just disclosed that they have $147 billion in unfunded revolvers, which are likely to expand their exposure to the energy industry just when they would rather reduce it.

Those banks have been setting aside loan loss reserves amounting to billions in anticipation of the inevitable:

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Canada’s Oil Sands Impervious to Crude Oil’s Price Decline

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, January 14, 2015:

 

On Monday – the same day that UAE’s Energy Minister Suhall al-Mazrouel said that OPEC was going to stick to its decision to keep pumping regardless of price declines – the same day that Goldman Sachs issued its negative outlook for prices – when crude oil prices dropped in response by 5 percent, hitting a six-year-low of $44.20 a barrel on Tuesday, the CFO of Canadian Natural Resources announced he was going to expand both its production and its output into 2015 and beyond.

Chief Financial Officer Corey Bleber was oblivious to the carnage, saying that his company expected its overall output for 2015 to be at least seven percent ahead of last year’s, and that it would continue

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Impacts of Lower Crude Oil Prices Continue to Spread

This article first appeared online at TheNewAmerican.com on Tuesday, January 13, 2015:

 

After oil forecaster Jeremy Warner got lucky last year when he accurately called the top in oil prices, with a fall to at least $80 a barrel, he doubled down by predicting “that the oil price will remain low for a long time, sinking to perhaps as little as $20 a barrel over the coming year before recovering a little.”

Warner got lucky once again when Goldman Sachs confirmed his prognosis, setting off an eye-popping five percent decline in oil to $45 a barrel which continued into Tuesday. Tuesday’s low was $44.20. As Goldman Sachs noted,

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The ADP Jobs Report for November Just Arrived

The ACP jobs report for November showed 118,000 new jobs were created in the private sector last month. This is hardly good news for the economy but better than I, or Wells Fargo, anticipated. The manufacturing sector is declining, confirming (as I noted yesterday) the recession call by ECRI last year. Wells Fargo thought we might see 80,000.

ACP isn’t the Bureau of Labor Statistics (BLS) which is the big mack-daddy of employment tracking. They use a different methodology than does ACP and sometimes there is a divergence. But over time both outfits’ numbers are very close.

To parse the details:

118,000 new jobs in November, down from 158,000 in October.

19,000 new jobs were created by small businesses in November, down from 50,000 in October.

And, as expected, the manufacturing sector lost 16,000 jobs.

In December a year ago people were excited to see nearly 300,000 jobs created in the private sector. Later it turned out that a lot of them were temp jobs for the holidays. Job creation never touched 300,000 since, muddling around at about 100,000 ever since. This isn’t enough to restore the economy to good health. Or, put another way, there isn’t enough entrepreneurial activity to justify hiring at a level sufficient to absorb new entrants.

And that’s the key understanding from today’s ADP numbers: regulations, uncertainty about the fiscal cliff, the awareness that Obama has little interest in reviving the economy because of his totalitarian ideology and commitment to reducing the US to just another weak socialist state are all combining to keep entrepreneurs – the real job creators – from taking a risk on the future.

I frankly don’t see much to change these numbers from ADP or the BLS going forward. ECRI’s recession call appears accurate: they think it started last July. Nothing here from ADP changes that outlook for the near future.

Presidential Debate Questions from Light from the Right

George Will – Debate questions for the presidential candidates

The spectacles we persist in dignifying as presidential “debates” — two-minute regurgitations of rehearsed responses — often subtract from the nation’s understanding. But beginning Wednesday, these less-than-Lincoln-Douglas episodes might be edifying if the candidates could be inveigled into plowing fresh ground.

George Will

George Will (Photo credit: Keith Allison)

Will has some suggestions for Presidential Debate questions for Obama and Romney. And so do I. Here is one from Will on the Supreme Court:

Do you rejectthe Kelo v. New London decision, in which the Supreme Court deferred to governments’ desire to seize private property and give it to wealthier private interests who would pay higher taxes?

I have a better one:

Do you support the Supreme Court’s decision to uphold Obamacare on the basis that a tax – any tax – is ok as long as Congress intended it to be a tax?

Will has one on foreign policy:

On Oct. 7, we begin the 12th year of the war in Afghanistan, and 51 recent NATO fatalities have been at the hands of our supposed Afghan allies, causing U.S. commanders to indefinitely suspend many joint operations. Why are we staying there 27 more months?

I have a better one (or three):

Why are we there in the first place? What is your take on the War on Terror, which is a war against a strategy and not a war against an aggressor? And why didn’t Congress get involved in declaring war, as the Constitution demands?

Will has one on domestic policy:

Do you agree that a financial institution that is too big to fail is too big to exist? If not, why not? The biggest banks emerged from the Great Recession bigger. At the end of 2011, the five biggest (JPMorgan, Bank of America, Citigroup, Wells Fargo and Goldman Sachs) held more than $8.5 trillion in assets, which is 56 percent of the 2011 gross domestic product. Why should they not be broken up?

I have a better one:

Since the Federal Reserve is essentially a cartel designed from its beginning to protect big banks from the consequences of their own folly, why shouldn’t the Fed be abolished?

I won’t be holding my breath Wednesday night to see if any of mine make it.

Economy Tipping Over Into Recession, Again

English: Yellow hard hat. Studio photography.

When shipping and supply managers were quizzed about their current outlooks by two separate reporting agencies, their answers were the same: Orders are slowing and so is production of manufactured goods. The Purchasing Managers’ Index (PMI), released in late June, and the Report on Business of the Institute of Supply Management (ISM), which was released on Monday, each showed significant slowing. The PMI’s manufacturing index came in at its lowest level since last July, while new orders for durable goods (autos and appliances) fell sharply in June, continuing a trend downward since early spring. It also showed a decline in the backlog of orders, the first since last September.

According to the ISM, its index fell below 50 for the first time since July 2009, indicating continuing contraction in the manufacturing sector of the economy and echoing the PMI’s report. What was startling in the ISM’s report was the decline in new orders: down by an astonishing 12.3 percentage points in the month of June. ISM’s production index also declined severely, by 4.6 percent, and was down by 10 percent since the end of March.

Retailers’ inventories are climbing as well, indicating lack of demand by consumers. More troubling was

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Recalcitrant Unions Force Cities to Suspend Labor Agreements

Seal of the City of North Las VegasLast Friday the City Council of North Las Vegas, Nevada’s fourth largest city just north and east of Las Vegas, voted unanimously to suspend part of its union agreement in order to balance its budget. With property tax and general tax revenues down by more than 30 percent in just the last three years, North Las Vegas was facing a shortfall of $30 million in its $500 million budget.

Under state law it must submit a balanced budget by June 1. Negotiations with three public employee unions, the North Las Vegas Police Officers Association (POA), the North Las Vegas Police Supervisors Association (PSA), and the International Association of Firefighters (IAFF), began in January but the unions refused to make the concessions necessary to keep the city solvent. So the council went ahead and suspended the terms of the agreement without the unions’ approvals. The vote by the council ended cost of

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Foreclosure Settlement Bails Out the Big Banks

English: Wells Fargo Center

The report from The New York Times on Wednesday about the foreclosure settlement reached between five big banks and 49 states’ attorneys general made it appear that justice was being served. The $26 billion to be paid out to some 2 million homeowners (former and current) “could provide relief” to them under the terms of the settlement. It would also remove a cloud of uncertainty from the banks’ liability and might help in “halting the housing market’s downward slide.”

States’ attorneys general started an investigation in the fall of 2010 into the mortgage servicing industry when it was discovered that homeowners were being evicted or penalized through improper, incorrect or false paperwork emanating from Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, Ally Financial (formerly GMAC) with the help of Mortgage Electronic Registration Systems, Inc. (MERS).

Over the 14-month investigation the scope broadened and deepened as the extent of the costs and fraudulent abuses was revealed. The settlement means that, on the surface, the money will go to help homeowners affected by the fraud. A million homeowners can expect to have their existing mortgages reduced or their interest rates reduced. Another 750,000 former homeowners will receive, over the next three years, checks estimated to be about $2,000.

The size of the settlement fades into insignificance in light of the fact that there are more than

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France Slides Towards Debt Downgrade

A keychain of the Eiffel Tower.

Moody’s rating service warned on Monday that France’s coveted triple-A credit rating is in jeopardy as a result of the country’s “elevated borrowing costs…amid a deteriorating growth outlook.” Senior credit officer Alexander Kockerbeck said “As we noted in recent publications, the deterioration in debt metrics and the potential for further liabilities to emerge are exerting pressure on France’s creditworthiness and the [current] stable outlook of the government’s AAA debt rating.”

In May of this year Fitch Ratings confirmed France’s triple-A rating with a “stable” outlook but warned that “continued fiscal consolidation is needed to stabilize and then start to reduce public debt, which reached 81.7 percent of GDP as of [the end of] 2012.”

In August Fitch repeated that its rating for France remained triple-A but noted that the rise in the prices of credit default swaps (CDS) “may be a sign that the markets are

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80 is the New 65, Two Surveys Show

retirement plans

On Wednesday Wells Fargo released the results of its survey of 1,500 individuals between ages 25 and 75, titling it “80 is the New 65 for Many Middle Class Americans” while another study in June by three financial service non-profits showed three-quarters of those surveyed planning to work beyond age 65.

The first survey focused on middle class (incomes between $25,000 and $100,000 a year) citizens while the second concentrated on higher net worth individuals (those between ages 55 and 75 with investable assets of $100,000 or more) but the results were remarkably similar.

The Wells Fargo study found that one quarter of middle class Americans say they will “need to work until at least 80” to pay their bills, while three-quarters are expecting to work at least part time to help with the bills.  And when those between ages 40 and 60 were quizzed, more than half say they will “need to work” after age 65.

When asked about reforming Social Security and Medicare, the younger Wells Fargo respondents were willing to

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New Study: Economy Stuck in Neutral

Stick

Image by simpologist via Flickr

On Monday morning Sentier Research announced the results of its new study showing changes in household income since the year 2000 and how those incomes have fared both during the recent recession and since the recovery that began in June, 2009. Not only did household income (which counts all incomes of all members of the household, including wages, Social Security payments, interest, dividends, welfare checks, retirement income, unemployment benefits, and veterans’ benefits, all adjusted for inflation) decline during the recession by 3.2 percent, it fell another 6.7 percent during the recovery.

The household income index (HHI)—created by two former Census Bureau analysts, Gordon Green and John Coder—has declined by almost 10 percent since the start of the recession, marking “a significant reduction in the American standard of living.” And the decline has been steady, month after month since January 2000, with only nine months out of the 138 months since then showing any improvement.

As noted by Robert Pear in the New York Times, this explains

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White House to NY: Accept Bank Foreclosure Deal

P1210013

Image by azipaybarah via Flickr

New York’s Eric Schneiderman (right) is the only Attorney General who doesn’t like the foreclosure settlement agreed to by the major banks behind the mortgage-backed-securities (MBS) and foreclosure (robo-signing and faked-documents) frauds that helped bring on the economic crisis in 2008. And he is feeling the heat. In exchange for a small fine, the settlement agreement would end the years-long investigations by New York and other states into the frauds, and would prevent them or any of the investors hurt by the frauds from ever bringing additional charges in the future.

But Schneiderman’s investigation into the shady practices behind the development and sale of MBSs isn’t complete, and signing off on such an agreement now would end his efforts and forever protect the banks from further public exposure to their back office practices.

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The Economy Also Weakens Obama’s Reelection Hopes

Obama leaves the stage

Image by rob.rudloff via Flickr

The trickle of bad news about the economy has turned into a torrent, and is now threatening Barack Obama’s chances at reelection. On Wednesday the Institute for Supply Management issued its manufacturing index, which was expected to rise. Instead, it fell, to 53.5, perilously close to the edge of recession in manufacturing. John Silva, an economist at Wells Fargo, was blunt:

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.