Fish on Friday – a few odds and ends

Although I am not Catholic, fish on Friday is not a bad thing to serve. In the South, all of the “meat and three” places serve fried fish as one of their main entrees. Of course, we like to fry every thing here, as it makes our sweet tea taste better.

Without any particular order, here are a few odds and ends to digest with your fish and chips.

John Stumpf, the CEO of Wells Fargo was forced to resign yesterday, effective immediately, after it was revealed their cross-selling culture led to employees setting up bogus bank accounts to meet extremely high sales goals. This fraud abuse was reported by more than a few employees over many years, but their complaints were ignored. These are not process improvement suggestions, these are “we are doing fraudulent things” red flags. By ignoring these complaints, Stumpf earned the right to be fired. A company takes on the personality of its leader. Apparently, his personality was to get me numbers irrespective of how.

I don’t know if Americans are paying attention to the Brexit train wreck that is occurring in the UK. The UK wants to negotiate a soft settlement, but the EU wants them to get the hell out. In an unheard of move, Japan released an open letter, asking for the Brits to move gingerly or not at all, as Japanese companies employ about 146,000 people in Great Britain and will move their EU headquarters from there to the main continent, if needed. The Brexit move was sold on false information, but one thing that was not discussed enough is all the business done in the UK because of the EU. As many smarter than me said a few months ago, if the UK leaves, it will be harming its economic growth for years and may result in Scotland and Northern Ireland electing to leave the UK and remain in the EU. It is not ironic that Ireland is seeing an uptick in Brits who are seeking citizenship and passports there, as reported by The Guardian.

Americans are making that same mistake as we talk about trade, as we have a significant number of major foreign employers who employ many Americans. Trade agreements are generally good for the global economies, but as they are evaluated, we must evaluate all aspects, including jobs created here because of them. The biggest culprit of manufacturing jobs declining is technology and it will only get worse. Training for new jobs is paramount, but job loss due to technology will become so significant, at some point, companies needs to evaluate whether it is better to have humans employed rather than robots. At the end of the day, people need money to buy things, so are you lessening your own market, if no one can afford your products?

Samsung is in deep do-do. Just before the Christmas and holiday seasons start, they released a product that catches fire when plugged in. And, when they realized their predicament, traded phones with their customers and those caught fire as well. Apparently, the smaller version of the new Samsung Galaxy 7 does not catch fire, but many will choose not to take that risk and buy an Apple I-phone or another product. It is bad enough that pilots are telling passengers to not turn on those Samsung phones when taxiing. Between the lawsuits and sales impact, this will be the gift that keeps on giving for several years.

Well, that is enough non-election news for now. Have a great weekend.


22 thoughts on “Fish on Friday – a few odds and ends

    • Janis, these guys seem to land on their feet, don’t they. I know of a CEO who has been let go three times and walked away with a severance in each case. I met him and he was the consummate BS artist. Keith

    • Thanks Hugh. I actually bank with Wells Fargo as they inherited my accounts through two acquisitions. It is sad to see a CEO and his predecessors create the conditions for these actions. Brexit saddens me, as we are watching a train wreck in slow motion. Of course, if we elect Yrump it will be an even worse mistake.

  1. I would like to point our, the we the British are the second largest contributer to the EU. Personally, I think Brexit is being made difficult to deter others from leaving the bloc. We were being used as puppets and the British saw the EU for what it is; some bigot trying to control a third of the world (if not more), in one swoop. I’m ready for the hard times, for it has been hard for quote sometime. Thank God we are out of that dictatorship.

    • Persia, I understand all of the reasons cited for leaving and I do not make light of the UK’s position. The concerns I note are very real (and cited by people who know global finance) and the totality of what an exit entailed was never discussed in a true pro and con fashion. We are having the same dilemma here as we Americans are the most uninformed electorate in the first world and may make a horrible decision that impacts the world should Trump win. I would truly hate to see Scotland and Northern Ireland leave the UK, but those entities are discussing this very thing. And, US banks are speaking of moving their EU headquarters to the continent as we speak.

      I would love to see the UK parliament put a stay on the move for further evaluation. But, at the end of the day, my opinion counts for diddly, as I don’t live there, you do. Thanks for offering your thoughts as they are greatly appreciated. Keith

  2. Bravo for staying away from the U.S. election coverage that is everywhere else 🙂 On the downside, sorry to hear about the Brexit issues happening. I am in Canada and admit I hadn’t been keeping up on the problem.

    • Christy, as you can glean from Persia’s response, who lives there, it is a complex and sensitive issue. I have always believed you cannot shrink to greatness, so involving more with other countries leads to growth. With that said, some folks are impacted negatively more so than others. This is happening at the same time technology is reducing the number of jobs. That is why a holistic view is needed. Thanks, Keith

  3. Hi Keith, on the issue of Brits seeking Irish passports; that would be for the Republic (South), which is an independent EU member state, rather than Northern Ireland, which is a constituent part of the UK (and therefore is heading for the EU exit door with England, Scotland and Wales).

  4. Dear Keith,

    In general I am pro trade. I was for TPP in the earlier stages of negotiation process as long as the deal provided a buffer for the middle class. My early on review indicated that TPP was a good deal in general for those earning over $80,000 per year. Unfortunately most of the middle class make less than this amount. There are a lot of steps that could have fixed this hole like reforming the H1B and the H2B visa programs; more tech programs at the high school level, streamlining regulatory bureaucracies along with easier access to financial start up monies to make it easier to start a small business. Nothing like this was done. In the future, when trade agreements are negotiated, the middle class workers needs to be a major consideration.

    I am sick of election news myself. There is still 3 weeks left. Ciao, Gronda

    • Gronda, I am pro trade as well, but do realize we need good agreements. NAFTA takes a lot of crap, but on the whole it has been neutral on jobs and positive on trade. We just need to look at this things holistically. Offshoring of jobs began in earnest in the 1980s long before NAFTA, with the textile industry sending jobs to China and Mexico. Textile leaders have been notorious for following cheap labor – follow the closed plants in England, closed plants in New England and closed plants in the Carolinas. On the flip side, we have Mercedes, Nissan, BMW and Volvo making cars and trucks here, with Michelin making the tires, employing Americans. Keith

  5. Note to Readers: It was reported today, Mr. Stumpf dumped a lot of Wells Fargo stock in August before the announcement of the fine in September. That could be confirmed to be a serious no-no and violate insider trading rules. More to come on the issue.

    • Dear Keith,

      He even admitted this during the Senate Banking Committee hearing in September 2016. Senator Warren questioned him on this issue.

      It sounded like insider trading to me but because it is his stock and he as CEO and chairman, he would always have insider information and so, I don’t know how the rules apply in this case.

      Ciao, Gronda

      • Gronda, CEOs usually protect themselves with systematic sales – monthly, quarterly, etc. I don’t know if this is one of those or insider trading. It looks and smells like the latter, but they do need to look into it. Keith

  6. Note to Readers: I was pleased to see JP Morgan Chase announced internal audits to identify any curious actions taken within the bank. This is a good sign that the banking industry is taking seriously the travails of Wells Fargo. I should also give a shout out to Senator Elizabeth Warren and President Obama for getting the Consumer Financial Protection Bureau established. This is the organization that has fined Wells and other banks, credit card companies for aggressive and fraudulent actions with over 90% of the fines going to the impacted customers. Not ironically, Republicans do not like this very effective organization and fought its passing and have tried to defang it. What my old party fails to realize is the CFPB is good governance and helps people who get screwed

    • Dear Keith,

      Bank of America and Citibank need to take similar actions. If they do not, and then information comes out that their executives’ hands are not clean either, the critics will not be forgiving.

      Ciao, Gronda

      • Gronda, very true. You may recall that Bank of America received the biggest fine from the CFPB at $780 million for selling products that customers did not ask for. Citibank has been fined as well. But, all banks need to clean their act up. As we have discussed, bankers used to be a more trusted profession, but they threw that trust out the window. Keith

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