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George Hartzman Blows Whistle on Wells Fargo’s Envision Plans

Posted by Larry Doyle on February 11th, 2013 8:55 AM |

A week ago I cautioned people on two fronts in writing about Top Ten Investor Threats and How Much Are You Really Paying for That Fund?

In serendipitous fashion, over the weekend I read about a former financial advisor at Wells Fargo who blew the whistle on his firm for not properly informing clients of investment fees embedded in one of its programs. Which one? The Wells Fargo Advisors Envision plans. Let’s navigate and see exactly what this whistleblower, George Hartzman, has to say as he writes: >>>>> (more…)

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Posted in fraud, General, Wells Fargo | 2 Comments »

Price Fixing on Wall Street?

Posted by Larry Doyle on April 9th, 2010 11:16 AM |

Lessened competition in any industry will lead to wider margins and greater revenue and profit opportunities.

Wall Street circa 2010 is certainly a dramatically changed landscape with significantly lessened competition. Is Wall Street today an honest display of capitalism in which ‘to the victors go the spoils’? Or is Wall Street an oligopoly which is using its increased power and leverage to control, if not outright fix, prices for products and services?

In the midst of all the other issues Washington is facing, I think there is very little focus on this topic, but we overlook it at our peril. Why? Price fixing, or iterations thereof, is nothing more than a vehicle to transfer wealth from consumers to providers. (more…)

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Posted in Bank of America, Banking Institutions, Federal Reserve, General, JP Morgan, Mortgage Crisis, Wells Fargo | 2 Comments »

UPDATE: Analyst Exposes Wells Fargo Balance Sheet Charade

Posted by Larry Doyle on October 22nd, 2009 6:01 AM |

UPDATE: Wells Fargo released their earnings yesterday, October 21st. The Wall Street Journal commented on Wells’ earnings by writing, Wells Fargo Leads Stocks Into The Red:

Wells Fargo led stocks lower after a bearish analyst note triggered a selloff that took down J.P. Morgan Chase and other financial shares.

The Dow Jones Industrial Average closed down 92.12 points, or 0.9%, to 9949.36, marking its second decline in a row. J.P. Morgan and Bank of America were two of its weaker components, losing $1.38, or 3%, to $44.65, and 50 cents, or 2.9%, to 16.51, respectively.

Stocks had spent much of Wednesday’s session in the green as Morgan Stanley and Yahoo posted third-quarter profits above Wall Street expectations. But the market turned deep into the red late as Rochdale Securities’ banking analyst Richard Bove cut his investment rating on Wells Fargo to “sell” from “neutral,” saying the quality of its earnings was “pretty poor.”

What did Bove see? Perhaps he was focused on much of what I had referenced and Michael Shulman had written about in September.

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My Original Post from September 30, 2009 (more…)

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Posted in Banking Institutions, General, Wells Fargo | No Comments »

Wells Fargo Calls for More Socialized Housing Finance

Posted by Larry Doyle on September 16th, 2009 9:26 AM |

What does one do when your bank is the largest mortgage originator in the country, has outsized exposure to an array of toxic mortgage loans (pay-option ARMs and the like), and is located in the heart of the weakest real estate market nationwide? Call Ghostbusters . . . that is, call on Washington to further tap the wards of the state known as Freddie and Fannie in an attempt to offload this risk and future risk on the American taxpayer. Of whom do I speak? Wells Fargo, led by CEO John Stumpf, called for just such actions in a recent interview with the Financial Times, Wells Fargo Urges U.S. to Boost Mortgage Market.

The FT writes:

The US government should help revive the moribund market for big mortgages by getting Fannie Mae and Freddie Mac to buy large home loans from banks, the chief executive of the lender Wells Fargo urged on Tuesday.

In an interview with the Financial Times, John Stumpf, whose bank originates a quarter of all US mortgages, called for an increase in the size of loans purchased by Fannie and Freddie, the troubled finance groups controlled by the authorities.

Mr Stumpf said such a move would help reduce the interest rates charged by banks on so-called “jumbo” mortgages and revive a market for higher-end housing that has been devastated by the credit crunch.

Fannie and Freddie can currently buy or guarantee mortgages worth up to $417,000. The stimulus plan approved last year set the companies higher limits of up to $729,750 in certain high-cost areas such as California until the end of 2009. Congress has to approve any extension of those higher limits.

Be mindful that Freddie and Fannie have already been approved to purchase conforming loans with loan-to-value ratios of up to 125% and are also purchasing jumbo mortgage product in certain regions of the country. The simple fact is our domestic mortgage finance market can now be defined as nothing short of socialized finance.

CEO Stumpf’s call for a further extension of this socialized housing finance is nothing more than a veiled attempt to offload risk from Wells Fargo onto the American taxpayer. In the process, risk based pricing for Jumbo mortgages will not be properly aligned and the American taxpayer will eat larger losses now and in the future.

At what point will capitalism actually be given a chance?

Related Sense on Cents Commentary:
Barack and Barney Look to Further Plunder Freddie and Fannie (June 22, 2009)

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Posted in General, Housing Crisis, Wells Fargo | 2 Comments »