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Wells Fargo Penalties Since 2000: $22B

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Re: Wells Fargo Penalties Since 2000: $22B

#71

Post by BirAdam »

Joeri wrote: post #54
BirAdam wrote: post #20

Earlier quoted context omitted.

In the USA, politicians are bought and paid for by megacorps. They can’t really punish anyone without losing money themselves. In China, politicians are part of the CCP. If they don’t do what the CCP wants they have very serious consequences. Two systems, two very different yet serious problems.

If in America politicians are bought and paid for by large corporations, does it mean the country is no longer a democracy? Or is it still a democracy and the blame ultimately lies with voters who vote on corporate-backed candidates?

The USA is an oligarchy, with an illusion of choice.

Re: Wells Fargo Penalties Since 2000: $22B

#72

Post by mannykannot »

kqr wrote: post #60
blippage wrote: post #4

As Nassim Taleb observed, the problem here is no skin in the game. Bankers keep the upside, but shareholders have to carry the can. It's an agency problem. The fix to all this is dispensing some good solid jail time.

Graeber has an observation on a different part of this: the penalties are never greater than the profit that triggered the penalties. We're basically telling the bankers that "it's okay as long as the government gets a cut of the loot".

Getting a cut of the loot is at its most pernicious when it is in the form of campaign contributions and inside information.

Re: Wells Fargo Penalties Since 2000: $22B

#73

Post by trey-jones »

tjpnz wrote: post #66
blippage wrote: post #4

As Nassim Taleb observed, the problem here is no skin in the game. Bankers keep the upside, but shareholders have to carry the can. It's an agency problem. The fix to all this is dispensing some good solid jail time.

I like the idea of prison time but that's only going to happen with an impartial legal system that treats everyone the same; regardless of wealth, upbringing or Ivy League attendance among others. In the meantime how about fining companies so much that the bank will become insolvent if they don't give a crap and passing laws (if they don't exist already) to force a halt in trade for x-days/weeks?

I think the banking industry is already very heavy regulated since 2008. In fact these regulations are (in my limited experience) at least as bad for the consumer as for the banks. Dealing with banks in general since 2008 has been a huge pain in the ass, and it's not really the bankers' faults (other than the huge debacles that led to regulation).

Better to just let the banks doing stupid risky crap fail instead of even more regulation. And if the stupid risky crap they're doing is also illegal, then make the penalties matter, as others have already said.

Re: Wells Fargo Penalties Since 2000: $22B

#75

Post by Aeolun »

quickthrower2 wrote: post #16
Aeolun wrote: post #2

Clearly it's working very well for them. At some point, maybe it's better if they're just penalized into bankruptcy?

Them being the corporation or the employees?

I imagine it’d have to be the corporation. Proving any employee did a particular thing wrong is too hard/slow to be worth it.

Re: Wells Fargo Penalties Since 2000: $22B

#76

Post by lotsofpulp »

nine_k wrote: post #32
Ensorceled wrote: post #29

Earlier quoted context omitted.

> Shareholders hold shares by choice, so they don't "have to" do anything. That's not how pensions, ETFs, index funds or pretty much anything works.

If some institutions track indexes, why don't indexes drop the chronically underperforming asset? If it's not actually underperforming, that is, a lot of the market does comparably, not much better, them $1B / year is just the cost of doing business, however cynical this may sound.

The rest of the market is doing much better.

https://g.co/finance/WFC:NYSE?window=5Y&comparison=NYSEARCA%...

Re: Wells Fargo Penalties Since 2000: $22B

#77

Post by sbarre »

Joeri wrote: post #54
BirAdam wrote: post #20

Earlier quoted context omitted.

In the USA, politicians are bought and paid for by megacorps. They can’t really punish anyone without losing money themselves. In China, politicians are part of the CCP. If they don’t do what the CCP wants they have very serious consequences. Two systems, two very different yet serious problems.

If in America politicians are bought and paid for by large corporations, does it mean the country is no longer a democracy? Or is it still a democracy and the blame ultimately lies with voters who vote on corporate-backed candidates?

Have you ever seen what happens when a non-corporate-backed (i.e. independent) candidate steps up for election?

They are almost always out-spent and out-campaigned from all sides because both bought parties want to maintain the two-party system at all costs.

There are exceptions of course, but not meaningfully.

Blame Citizens United for all this. That decision marked the day the US completely stopped being a "by the people, for the people" country.

Re: Wells Fargo Penalties Since 2000: $22B

#78

Post by lotsofpulp »

Ensorceled wrote: post #64
itsoktocry wrote: post #47

Earlier quoted context omitted.

> That's not how pensions, ETFs, index funds or pretty much anything works. Yes, it's exactly how that stuff works. Why is it not the pension managers responsibility to make sure his clients are not invested in these things if there is financial risk? Or, if you decide to invest in a market-wide ETF, you are explicitly choosing to take the bad with the good. I love how people think you can outsource decision making t…

> Why is it not the pension managers responsibility to make sure his clients are not invested in these things if there is financial risk? That's the problem, there is no financial risk, check out Wells Fargo stock price. These are social problems these companies are spinning off, any financial problems are externalized. > I love how people think you can outsource decision making to absolve yourself of responsibility.…

>there is no financial risk, check out Wells Fargo stock price.

A Wells Fargo stock holder would have lost out on ~70% of returns over the last 5 years compared to a relatively riskless investment in sp500.

https://g.co/finance/WFC:NYSE?window=5Y&comparison=NYSEARCA%...

Total return for past 10 years is 4.79% per year.

https://dqydj.com/stock-return-calculator/

JPM 10 year return is is 15% and BAC is 13%.

Re: Wells Fargo Penalties Since 2000: $22B

#79

Post by FredPret »

charlescearl wrote: post #55

Instead of wasting resources punishing arbitrary capitalists (the next Wells CEO is no doubt biding its time), the state should seize some portion of the bank's operations and use them for the creation of operationally resourced public banks [1]. Then use this as a basis for the creation of plan for responsible community re-investment. As Lenin observed: " It is absurd to control and regulate deliveries of grain, or…

I've never understood why this ideology is deemed acceptable in polite conversation. If you quoted Hitler in glowing terms, you'd be rightly banished from society. But the much worse Lenin (& friends) is a-ok.

Re: Wells Fargo Penalties Since 2000: $22B

#80

Post by dsfyu404ed »

kqr wrote: post #60
blippage wrote: post #4

As Nassim Taleb observed, the problem here is no skin in the game. Bankers keep the upside, but shareholders have to carry the can. It's an agency problem. The fix to all this is dispensing some good solid jail time.

Graeber has an observation on a different part of this: the penalties are never greater than the profit that triggered the penalties. We're basically telling the bankers that "it's okay as long as the government gets a cut of the loot".

>it's okay as long as the government gets a cut of the loot".

That's how most "bad things" work. Why would asinine banking practices be different?

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