Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-60758 Wed, 28 Sep 2016 01:55:54 GMT Wells Fargo Claws Back Millions From CEO And Division Head After Scandal http://implode-explode.com/viewnews/2016-09-27_WellsFargoClawsBackMillionsFromCEOAndDivisionHeadAfterScandal.html Wells Fargo & Co. Chairman and Chief Executive John Stumpf will forfeit $41 million for the bank's burgeoning sales scandal, marking one of the biggest rebukes to the head of a major U.S. financial institution.

The bank's board moved to rescind pay for Mr. Stumpf and former community- banking head Carrie Tolstedt ahead of a hearing of the House Financial Services Committee Thursday. Wells Fargo's board said Ms. Tolstedt, who oversaw retail banking during bad behavior there, will forfeit unvested equity awards valued at $19 million.

The board said she won't exercise "outstanding options" during an investigation into the bank's sales practices. Ms. Tolstedt has also left the bank, earlier than her planned Dec. 31 retirement.

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The bank said that the $41 million is from Mr. Stumpf's unvested equity awards. It also said that he would forgo salary during an independent investigation the board is leading and has recused himself from all matters related to that as well as independent directors' deliberations. Neither he nor Ms. Tolstedt will receive a bonus for 2016.

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The bank's lead independent director, Stephen Sanger, said in the board's statement that further action may be warranted. The board's independent directors "will take such other actions as they collectively deem appropriate, which may include further compensation actions before any additional equity awards vest or bonus decisions are made early next year, clawbacks of compensation already paid out, and other employment-related actions."

The results of that investigation, for instance, will determine what becomes of Ms. Tolstedt's roughly $35 million in unvested options, according to a person familiar with the matter.

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In 2013, Wells Fargo agreed to enhance its clawback policy in exchange for New York City pension funds dropping a related shareholder resolution proposed by the city comptroller's office. New York City pension funds own almost $500 million in Wells Fargo stock.

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iehi-feed-60757 Wed, 28 Sep 2016 01:30:40 GMT Roach: US and Japanese central bankers are in denial over the signs of an impending meltdown http://implode-explode.com/viewnews/2016-09-27_RoachUSandJapanesecentralbankersareindenialoverthesignsofanimpen.html iehi-feed-60756 Tue, 27 Sep 2016 23:55:14 GMT Bank of Japan Confesses: Even We Don't Trust the Bank of Japan http://implode-explode.com/viewnews/2016-09-27_BankofJapanConfessesEvenWeDontTrusttheBankofJapan.html ``If a central bank without credibility makes a credible promise to run a non-credible policy, do the double negatives cancel out and create credibility?

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But the question is a serious one. The BOJ has just admitted, in effect, that it has a credibility problem, even as it sets about trying to promise that it will deliberately act to damage its credibility. Its admission, couched in layers of economic jargon, underscores the worries at many other central banks that years of low inflation could become self-perpetuating.

... Put simply, long-run inflation expectations depend in large part on where inflation has been, not on the 2% target the BOJ sets for it to be in future.

... "The Bank has attempted to make expectations formation more forward-looking by pursuing QQE [quantitative and qualitative easing] with the aim of anchoring inflation expectations at the price stability target of 2%," the BOJ said last week. "However, in the course of this attempt, the observed inflation rate declined due to a variety of factors such as the substantial fall in crude oil prices, and inflation expectations--reflecting their adaptive manner--followed suit."

Translated from central bank-speak, "it wasn't our fault, but we failed."

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The BOJ has also taken on an idea from Paul Krugman, a past winner of the Nobel memorial prize in economics: It wants to be credibly irresponsible. It promised on Wednesday to keep printing money until it overshoots the inflation target and stays above, in an effort to make people believe it is willing to run a looser policy in the long run than it really should. If they believed that, inflation expectations should rise faster, and inflation follow suit.

The problem is that if the target isn't believed in the first place, who is likely to believe the BOJ will go even further?

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iehi-feed-60755 Tue, 27 Sep 2016 23:53:32 GMT WTO Slashes Global Trade Forecast by 39% Since April: "Wake-Up Call" Says WTO Director http://implode-explode.com/viewnews/2016-09-27_WTOSlashesGlobalTradeForecastby39SinceAprilWakeUpCallSaysWTODire.html The new figure of 1.7 percent, down from the WTO's previous estimate of 2.8 percent in April, marked the first time in 15 years that international commerce was expected to lag the growth of the world economy, the trade body said.

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"We need to make sure that this does not translate into misguided policies that could make the situation much worse, not only from the perspective of trade but also for job creation and economic growth and development which are so closely linked to an open trading system," the report quoted him as saying.

The data underlined concerns that, after a long period of growth through globalization and reliance on global trade, governments are increasingly seeking to protect their own industries and promote domestic producers at the expense of foreign competitors.

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iehi-feed-60754 Tue, 27 Sep 2016 23:41:15 GMT Phantasmagoria http://implode-explode.com/viewnews/2016-09-27_Phantasmagoria.html iehi-feed-60753 Tue, 27 Sep 2016 23:10:28 GMT Don't ignore tsunami from South China Sea http://implode-explode.com/viewnews/2016-09-27_DontignoretsunamifromSouthChinaSea.html iehi-feed-60752 Tue, 27 Sep 2016 19:51:59 GMT US Probing Possible Worker Abuse By Wells Fargo http://implode-explode.com/viewnews/2016-09-27_USProbingPossibleWorkerAbuseByWellsFargo.html The U.S. Labor Department is investigating possible abuses of employees by Wells Fargo in connection with the bank's alleged efforts to open millions of unauthorized accounts to meet sales goals.

A group of Democratic senators last week asked the department to investigate whether Wells Fargo tellers, branch managers and customer service reps were harassed and threatened with termination in the aggressive sales push. A complete review of cases and complaints is needed to determine if the second-largest U.S. bank violated the Fair Labor Standards Act, the senators said. About 5,300 employees have been fired since 2011.

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iehi-feed-60751 Tue, 27 Sep 2016 19:49:45 GMT Ford Fights Back Against Trump Debate Claims http://implode-explode.com/viewnews/2016-09-27_FordFightsBackAgainstTrumpDebateClaims.html Ford Motor Co. went on the defensive following the latest attacks from Donald Trump aimed at the auto maker's big-dollar Mexico investments and production plans.

Mr. Trump has for most of his campaign used Ford's Mexico investment as a key pillar in his attacks of the North American Free Trade Agreement and as a way to highlight the decline of the U.S. manufacturing base. While Ford has been touting its plan to invest $1.6 billion in new Mexican production capacity, it has only recently taken Mr. Trump on directly. Its recent response included a round of television interviews and other media engagements conducted by Chief Executive Mark Fields.

Employees of the Dearborn, Mich., company, including high-ranking engineers, took to social media platforms--including Facebook and Twitter--with statistics that defend the company's reputation as an American company during and after Monday's presidential debate. A graphic that some employees sent out claims Ford invested $12 billion in U.S. plants and "created nearly" 28,000 jobs in the past five years. Others circulated stories written by Detroit media outlets highlighting Ford's contributions to the U.S. manufacturing sector.

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Ford employees and executives have recently pointed out the company will back-fill small car production in Michigan with higher-profit SUVs and pickup trucks. But the company has been slow to outline specific product plans as it continues to negotiate with union officials, and state and local officials on tax breaks and labor terms.

The company said it is currently hiring 488 professionals.

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iehi-feed-60750 Tue, 27 Sep 2016 15:49:24 GMT Donald Trump's economic plan is still god awful http://implode-explode.com/viewnews/2016-09-27_DonaldTrumpseconomicplanisstillgodawful.html iehi-feed-60749 Tue, 27 Sep 2016 03:15:42 GMT Fact-Checking the First Presidential Debate http://implode-explode.com/viewnews/2016-09-26_FactCheckingtheFirstPresidentialDebate.html iehi-feed-60748 Mon, 26 Sep 2016 18:24:39 GMT Renminbi use surges in London in spite of Brexit http://implode-explode.com/viewnews/2016-09-26_RenminbiusesurgesinLondoninspiteofBrexit.html The new figures, reflecting bilateral business confidence and the renminbi's growing international use, showed London's renminbi-denominated business transactions in August were 60 percent higher than July's.

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[China Construction Bank] London celebrated the significant milestone of clearing 10 trillion yuan ($1.5 trillion) of transactions between June 2014, when it was appointed by PBOC to be London's official renminbi clearing bank, and August 2016.

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iehi-feed-60746 Mon, 26 Sep 2016 15:06:32 GMT Wells Fargo Created A Decade Of Hell For Michigan Homeowner http://implode-explode.com/viewnews/2016-09-26_WellsFargoCreatedADecadeOfHellForMichiganHomeowner.html iehi-feed-60745 Mon, 26 Sep 2016 15:03:17 GMT Banking analyst Mike Mayo rips Wells Fargo CEO in a scathing note http://implode-explode.com/viewnews/2016-09-26_BankinganalystMikeMayoripsWellsFargoCEOinascathingnote.html iehi-feed-60744 Mon, 26 Sep 2016 14:58:46 GMT HBO's John Oliver Shreds Wells Fargo and John Stumpf http://implode-explode.com/viewnews/2016-09-26_HBOsJohnOliverShredsWellsFargoandJohnStumpf.html iehi-feed-60743 Mon, 26 Sep 2016 14:27:34 GMT A Weaker Currency Is No Longer Economic Elixir It Once Was http://implode-explode.com/viewnews/2016-09-26_AWeakerCurrencyIsNoLongerEconomicElixirItOnceWas.html Just look at Japan, where the yen plunged 28 percent in the two years through 2014, yet net exports to America still fell by 10 percent. Or at the U.K., where the pound's 19 percent tumble in the two years through 2009 couldn't stave off a 26 percent decline in shipments to the U.S. In fact, since the turn of the century, the ability of exchange-rate movements to affect trade and growth in major economies has fallen by more than half, according to Goldman Sachs Group Inc.

The findings suggest that weaker currencies may not provide much assistance to officials in countries like Japan and the U.K. that are relying on unprecedented easy-money policies to help boost tenuous growth and inflation. On the flip side, the data also indicate that concerns the U.S. recovery will be derailed as rising interest rates drive investors into the dollar are also overblown. A shift in the structure of advanced-economy trade to less price-elastic goods and services, combined with the prolonged effects of the financial crisis, have stunted the sensitivity of trade volumes relative to global exchange rates, according to Goldman Sachs analysts led by Jari Stehn.

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iehi-feed-60741 Mon, 26 Sep 2016 14:23:44 GMT Cracks showing in Germany's fragile truce with the ECB http://implode-explode.com/viewnews/2016-09-26_CracksshowinginGermanysfragiletrucewiththeECB.html "The big challenge for Mario Draghi will be to prepare the Bundestag and German public for a further easing of monetary policy," said Marcel Fratzscher, head of the DIW economic institute and a former senior official at the ECB.

That message is unlikely to go down well in Berlin. In addition to concerns about the distorting effects of QE on financial markets and the impact of low interest rates on German savers and insurers, the political landscape in Germany has become decidedly more toxic for the ECB over the past months.

With one year to go until the next federal election, the AfD has risen to a record high of 16 percent in national polls. On the defensive, Merkel's conservatives are desperate to shift the debate away from her increasingly unpopular stance on refugees.

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iehi-feed-60740 Mon, 26 Sep 2016 14:21:47 GMT Clueless Janet Paves the Way for Bigger Crash http://implode-explode.com/viewnews/2016-09-26_CluelessJanetPavestheWayforBiggerCrash.html iehi-feed-60739 Mon, 26 Sep 2016 14:19:20 GMT Economic Establishment Pans Trump Economic Plan http://implode-explode.com/viewnews/2016-09-26_EconomicEstablishmentPansTrumpEconomicPlan.html Establishment economists ranging from austere neoliberals to spendthrift Keynesians are united in branding Donald Trump's proposed economic policies as "disastrous."

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Trump's tax policies may well benefit very high-income households, but as Betsy McCaughey notes in the New York Post this week, they also reduce the federal income-tax rate for couples earning $50,000 or less to zero, and that tax-free threshold goes up if you add new child care tax deductions... the proposal to cut corporate income taxes to 15% from the current 35% is the "heart" of Trump's economic plan, and will do the most to repatriate production and encourage the business investment that will spur growth.

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And conservative analyst James Pethokoukis, a fellow at the American Enterprise Institute, labeled Trump's economic plan "a complete and utter joke" as he took the Republican nominee to task for potentially adding $2.6 trillion to $3.9 trillion to the national debt over the next 10 years -- even though the $9 trillion in debt added during the seven and a half years of the Obama administration has caused no detectable harm.

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iehi-feed-60738 Sun, 25 Sep 2016 18:08:40 GMT Former employees file class action against Wells Fargo http://implode-explode.com/viewnews/2016-09-25_FormeremployeesfileclassactionagainstWellsFargo.html Two former Wells Fargo & Co (WFC.N) employees have filed a class action in California seeking $2.6 billion or more for workers who tried to meet aggressive sales quotas without engaging in fraud and were later demoted, forced to resign or fired.

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Former employees Alexander Polonsky and Brian Zaghi allege Wells Fargo managers pressed workers to meet quotas of 10 accounts per day, required progress reports several times daily and reprimanded workers who fell short.

Polonsky and Zaghi filed applications matching customer requests and were counseled, demoted and later terminated, the lawsuit said.

While executives at the top benefited from the activity, the blame landed on thousands of $12-per-hour employees who tried to meet the quotas and were often required to work off the clock to do so, the lawsuit said.

Employees with a conscience who tried to meet quotas without engaging in fraud were the biggest victims, losing wages, benefits and suffering anxiety, humiliation and embarrassment, the lawsuit said.

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iehi-feed-60737 Sun, 25 Sep 2016 18:03:36 GMT Whistleblowing Wells Fargo loan officer describes years of fraudulent, criminal culture in the bank http://implode-explode.com/viewnews/2016-09-25_WhistleblowingWellsFargoloanofficerdescribesyearsoffraudulentcri.html